2019
Annual Report
For the year ended 31 March 2019
( 1 ) PLEXURE 2019 ANNUAL REPORT
Chairman’s Review
For the Year Ended 31 March 2019
What We Do
Plexure has developed an intelligent technology platform that powers
mobile marketing, helping brands create world-class customer
engagement. We make the sales process for physical retailers
seamless, engaging and profitable by identifying where customers are,
what they want and then facilitating their purchases. Our technology
delivers increases in purchase frequency, average basket value,
impulse visits and customer lifetime value, which are all key metrics for
retailers.
These product and service capabilities cover:
(cid:120) Next generation loyalty programmes
(cid:120) Personalised offers
(cid:120) Analytics and Insights
(cid:120) Mobile order and pay
(cid:120) Artificial intelligence and machine learning
(cid:120) App design and development
(cid:120) Customer data management
(cid:120) Marketing strategy and CRM consulting
(cid:120) System integration consulting
2019 Highlights
$16.9m
Total revenue
Up from $11.8m, an increase of 44%
over the year to 31 March 2019
$3.9m
Cashflow from
operating activities
Up from $2.6m, an increase of 48%
over the year to 31 March 2019
$7.3m
Cash at bank
Up from $4.1m, an increase of 77%
over the year to 31 March 2019
110m
Users on the platform
Up from 85m, an increase of 29% over
the year to 31 March 2019
$0.7m
Net loss after tax
Down from $1.7m, a decrease of 58%
over the year to 31 March 2019. This
includes the convertible note expense
of $1.7m
49
Active countries
Up from 32, an increase of 53% over
the year to 31 March 2019
$5.4m
McDonald’s purchased 9.9% equity stake*
Representing a 15% premium over the average price of Plexure’s shares during
March 2019
*Transaction settled on 2 April 2019
( 2 ) PLEXURE 2019 ANNUAL REPORT
Chairman’s Review
For the Year Ended 31 March 2019
Chairman’s Review
Dear Shareholders
Overview
Financial Year 2019 has been Plexure’s most successful year to date. The Company’s trading
performance has improved dramatically: without the impact of the convertible note we would have
delivered our maiden profit and we are cash flow positive from operating activities for the second
successive year. Customer usage is at record levels with 110 million users on our app at year-end. This
has driven revenues to a new high of $16.9m and at year-end we had $7.3m in the bank.
Our confidence in the business has been matched by our major customer, McDonald’s, who shortly after
balance date purchased a 9.9% equity stake in the Company at a premium to the then current market
price. This strategic investment by McDonald’s will assist Plexure develop its offerings and market
presence for McDonald’s and other customers.
Financial Performance
Our financial results for Financial Year 2019 were very pleasing. Highlights included:
(cid:120) Revenue increased by 44% to $16.9m
(cid:120) After removing the impact of the convertible note, a Net Profit After Tax (NPAT) of $0.948m
(cid:120) Cash at bank and term deposits at 31 March 2019 of $7.3m (excluding the proceeds of
McDonald’s post-balance date investment)
This improvement in the Company’s trading performance, coupled with the McDonald’s investment of
$5.4m, has been well received by the market and, as a consequence, the Company’s market
capitalisation has increased significantly in the early part of our 2020 financial year.
Opportunities available to the Company are growing and the Board will use its increased cash resources,
which total approximately $12.7m post the McDonald’s investment, to invest in its product roadmap,
technology platform and existing and new customer development.
Business Strategy
The Company’s goal is to be a world leader in the mobile application software sector and the investment
by McDonald’s is a solid validation that we are well on the way to achieving this goal.
Since the refresh of our management team 18 months ago, we have focused our attention on profitable
growth and have achieved a major transformation in the Company’s financial performance. This has
been accomplished through a combination of improved management of existing customers, new business
development, operating cost containment and driving value from the existing technology platform.
We have now reached the next stage in our strategy evolution and in the year ahead will expand the
business further. We anticipate deepening our relationship with McDonald’s, which will see us offering
additional products and services to them in currently served and new markets. Our new business pipeline
has also matured in recent months and we look forward to securing new customers in a variety of markets
in FY20.
Given the cash resources the Company now has available, the Board may also consider acquisitions to
accelerate its organic growth strategy, secure new technologies or source pools of talent.
( 3 ) PLEXURE 2019 ANNUAL REPORT
Chairman’s Review
For the Year Ended 31 March 2019
Management and Employees
Under our CEO Craig Herbison’s leadership, we have strengthened our management team and they have
responded in an outstanding fashion to the challenges of the business transformation, delivering a result
the Board is proud of.
We aim to pay management fairly and their remuneration includes short-term cash incentives and long-
term equity linked incentives. The skills we require are sought after globally and the Board has been
careful to design reward structures that are aligned with long-term shareholder wealth creation.
Plexure has a very diverse employee base with a blend of gender, nationalities, ethnicities and religion,
which creates a rich and vibrant culture within the business. Women still remain under-represented in all
areas of the Company and the Board remains committed to addressing, to the extent it can, this gender
imbalance.
Governance
During the year, there were a number of changes to the composition of the Board. Scott Bradley, the
Company’s founder, resigned in May 2018 and in August 2018, Tim Cook also resigned. We thank them
both for their valuable service.
In June 2018, Craig Herbison was appointed to the Board to replace Scott Bradley and in early April 2019
following year-end, Robert Bell was appointed as a replacement for Tim Cook. Robert, a Chartered
Accountant, is an experienced businessman and director with a background in finance, sales and
operations. He will Chair the Audit and Risk Management Committee.
The Board is very active and engaged in oversight of the Company and its strategy. Among the Directors,
there is a strong combination of industry expertise, operations, finance, technology development,
international business development, strategy formulation and governance experience.
Outlook
The Board continues to be optimistic about the prospects for the Company and feels confident that its
growth strategy will deliver very positive results for FY20 and beyond.
We appreciate your support as shareholders and we are very conscious of our obligations to you for the
future successful performance of our company.
Phil Norman
Chairman
( 4 ) PLEXURE 2019 ANNUAL REPORT
CEO’S Review
For the Year Ended 31 March 2019
CEO’s Review
FY19 was an excellent year for Plexure and marks my second year as CEO.
Our customer focus saw 44% revenue growth, a maiden profit at the half-year and a tripling of market
capitalisation at year-end. McDonald’s, our major customer gave us the ultimate vote of confidence by
taking a 9.9% equity stake in the business immediately following balance date and we saw our reach
extend to over 110 million end users on our platform in 49 countries worldwide.
Our three-horizon transformation strategy is well into its third phase of ‘Execute for Growth’ having
delivered the first two horizons of ‘Stabilise for Growth’ in late FY18 and ‘Build Foundations for Growth’ in
the first half of FY19.
With our transformation in full swing we have invested in our product roadmap and enhancements to our
proposition to support our ongoing growth and updated market positioning. We added new points earn
and burn capability into our loyalty product and deployed this in four markets. We also built advanced
analytics tools incorporating Artificial Intelligence (AI) and established a state-of-the-art security practice.
We enhanced our regulatory data protection capabilities for customers in Europe with the General Data
Protection Regulations (GDPR) and deployed Mobile Order and Pay in Japan. The business is rapidly
maturing its proposition and market saliency.
A significant investment in our future has seen an increased spend on our platform’s core technology to
enable a multi-cloud approach, and further enhance our world-leading scalability and availability. A multi-
cloud strategy is critical to address our full market opportunity, recognising that many mature prospective
customers already have a cloud provider relationship.
In late 2018, we improved our go-to-market focus with a new US based sales team looking to increase
our participation in the US mobile engagement market. This market is growing at a 43% Compound
Annual Growth Rate (CAGR) and will be worth USD $38bn by 2023. Our proposition remains largely
enterprise in focus due to the level of customisation required to deliver personalised solutions. We are
currently seeing strong traction for our proposition with good Request for Proposal (RFP) activity and deal
flow and are confident of adding new customers within the first half of FY20.
We have settled our new leadership team and grown our headcount in line with revenue growth.
Structurally, we are well positioned for growth with new competencies now embedded in the business to
enable a more mature and enterprise orientated execution. The global market for talent is challenging,
however, our recruitment brand and culture has us well set to attract and hold good people.
We remained cash-flow positive from operating activities for the second year with our underlying business
delivering strong, positive Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA). We
have also built healthy cash reserves of $7.3m from our operating activities. Commercially the business
has never been in better shape.
Our customer focus sees us build solutions in concert with our customers and align tightly on
transformation of their digital customer experiences. This drives new and improving revenue streams for
them - all enabled by Plexure people and technology. In FY20 we will continue the strong momentum in
our core business, deploying our cash reserves to enhance our proposition and serve our customers
exceptionally.
I would like to thank the Board and our shareholders for their continued support, without whose confidence
in the business our transformation and new momentum would not have been possible.
Craig Herbison
CEO
( 5 ) PLEXURE 2019 ANNUAL REPORT
Financial Commentary
For the Year Ended 31 March 2019
Financial Commentary
Key Achievements
(cid:120) Continued revenue growth of 44%, up $5.136m from FY18.
(cid:120) The net loss after tax reduced 58% to $0.703m from FY18. If the impact of the convertible note
is removed, there would have been a profit after tax (non-GAAP) of $0.948m (FY18: loss of
$0.411m).
(cid:120) The Company had $7.250m of cash on hand at balance date (excluding the proceeds from the
investment by McDonald’s subsequent to year-end) and was cashflow positive from operating
activities for the second successive year.
(cid:120) A new executive team is in place and is very focused on executing on the Company’s growth
programme.
Total revenue
Operating revenue
Net loss after tax
Cash at bank and short-term deposits
2019
$’000s
16,891
16,828
(703)
7,250
2018
$’000s
11,755
11,553
(1,666)
4,097
Change
$’000s
5,136
5,275
963
3,153
Change
%
44
46
(58)
77
Staff (contractors and FTE’s)
72
43
29
67
The year ended 31 March 2019 saw the Company build on the financial platform laid down in the previous
year. Revenue continued to grow and although costs also grew this was a conscious choice by the Board
and the Management team and was done in the context of the business remaining cashflow positive.
Plexure’s strong revenue growth of 44%, or $5.136m, came from existing customers, with the majority of
growth coming from McDonald’s with a further 17 countries added in the year ended 31 March 2019. This
was reflected in the growth in pure licensing revenue, which grew by 41%, or $2.834m to $9.702m.
Licensing will continue to grow as we add new markets and new customers.
Consulting revenue, which includes support, consulting and paid development work increased by 55% or
$2.480m to $6.987m. Consulting revenue tends to be one off in its nature, however, we have seen
continued demand for our services assisting our customers with campaigns and paid platform
development. We expect consulting revenue to continue to grow but anticipate a change in the mix with
paid platform development decreasing while consulting on customer campaigns will continue to grow.
Operating expenses increased by 32%, or $3.866m during the year to $15.799m as we scaled for growth.
Of this total increase of operating expenses, 71% or $2.873m came from an increase in staff and
contractor costs. This increase in staff and contractor costs was in two main areas, namely technology
and the customer team. The increase in technology headcount has enabled the business to focus further
on security, stability and cost reduction in the platform. The customer team has been increased to enable
us to better serve the ongoing growth in business from McDonald’s and to prepare for the anticipated
addition of new customers.
IT costs increased by 15% or $0.408m to $3.168m. These included platform hosting costs, which
increased by 17% or $0.411m to $2.764m. During the year, users increased by 29%, yet the cost of
operating the core platform only increased by 17%. This reflects the increased investment in technical
staff who are focusing on improvements in the efficiency, stability and cost performance of the core
platform.
Travel costs, office costs, and marketing costs also increased to support our customer growth.
( 6 ) PLEXURE 2019 ANNUAL REPORT
Financial Commentary
For the Year Ended 31 March 2019
For the year ended 31 March 2019, the Company’s total comprehensive loss decreased by 58% to
$0.685m (2018: $1.617m). Of the total comprehensive loss of $0.685m, $1.651m relates solely to the
close-out of the convertible note. Without the impact of the convertible note, the Company would have
reported a comprehensive profit (non-GAAP) of $0.966m*.
Impact of Convertible Note
During the year ended 31 March 2019, all of the note holders chose to convert to equity on either the 4
April 2018 or 29 March 2019. As a result, the convertible note liabilities on the balance sheet have been
extinguished and 13,942,171 shares have been issued at a price of 12 cents.
The close-out of the convertible note, plus the effective interest charged, resulted in a non-cash expense
of $1.651m being recognised in the Profit and Loss Statement. If the impact of the convertible note is
excluded (non-GAAP), the net loss attributable to shareholders (non-GAAP) of $0.703m would have been
a net profit attributable to shareholders of $0.948m*. This compares to a prior year net loss attributable to
shareholders of $0.411m, excluding the convertible note accounting* (calculated on the same basis).
Since the $1.6m convertible note was first signed in February 2017 a total cost of $2.886m has flowed
through the Profit and Loss Statement.
Cash on Hand
Plexure continued to be cash flow positive with cash from operating activities being positive for the second
successive year. The Company finished the year with cash and term deposits of $7.250m, an increase of
77%, or $3.153m over the previous year.
Subsequent Events
On 2 April 2019, McDonald’s Corporation signed a new Software as a Service Agreement with the
Company. On the same day, McDonald’s purchased an equity stake of 9.9% in the Company for $5.4m
representing a 15% premium over the volume-weighted average price of Plexure shares during March
2019.
*A reconciliation is provided in the supplementary financial information
( 7 ) PLEXURE 2019 ANNUAL REPORT
Directors’ Responsibility Statement
For the Year Ended 31 March 2019
Financial Statements
The Directors are responsible for presenting financial statements in accordance with New Zealand law
and generally accepted accounting practice, which present fairly the financial position of the Group as
at 31 March 2019 and the results of its operations and cash flows for the year ended on that date.
The Directors consider the financial statements of the Group have been prepared using accounting
policies which have been consistently applied and supported by reasonable judgements and estimates
and that all relevant financial reporting and accounting standards have been followed.
The Directors believe that proper accounting records have been kept which enable with reasonable
accuracy, the determination of the financial position of the Group and facilitate compliance of the
financial statements with the Financial Markets Conduct Act 2013.
The Directors consider that they have taken adequate steps to safeguard the assets of the Group, and
to prevent and detect fraud and other irregularities. Internal control procedures are also considered to
be sufficient to provide a reasonable assurance as to the integrity and reliability of the financial
statements.
The Financial Statements are signed on behalf of the Board by:
Phil Norman
Chairman
Brian Russell
Director
Dated: 20 May 2019
Dated: 20 May 2019
( 8 ) PLEXURE 2019 ANNUAL REPORT
Independent Auditor’s Report
To the Shareholders of Plexure Group Limited
Opinion
Basis for opinion
Audit materiality
Key audit matters
We have audited the consolidated financial statements of Plexure Group Limited and its
subsidiaries (the ‘Group’), which comprise the consolidated statement of financial position
as at 31 March 2019, and the consolidated statement of comprehensive income, statement
of changes in equity and statement of cash flows for the year then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements, on pages 12 to 40,
present fairly, in all material respects, the consolidated financial position of the Group as
at 31 March 2019, and its consolidated financial performance and cash flows for the year
then ended in accordance with New Zealand Equivalents to International Financial
Reporting Standards (‘NZ IFRS’) and International Financial Reporting Standards (‘IFRS’).
We conducted our audit in accordance with International Standards on Auditing (‘ISAs’)
and International Standards on Auditing (New Zealand) (‘ISAs (NZ)’). Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit
of the Consolidated Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1
(Revised) Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing
and Assurance Standards Board and the International Ethics Standards Board for
Accountants’ Code of Ethics for Professional Accountants, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
Other than in our capacity as auditor and the provision of taxation advice, we have no
relationship with or interests in the Company or any of its subsidiaries. These services
have not impaired our independence as auditor of the Company and Group.
We consider materiality primarily in terms of the magnitude of misstatement in the
financial statements of the Group that in our judgement would make it probable that the
economic decisions of a reasonably knowledgeable person would be changed or influenced
(the ‘quantitative’ materiality). In addition, we also assess whether other matters that
come to our attention during the audit would in our judgement change or influence the
decisions of such a person (the ‘qualitative’ materiality). We use materiality both in
planning the scope of our audit work and in evaluating the results of our work.
We determined materiality for the Group financial statements as a whole to be $325,000
(2018: $320,000).
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the consolidated financial statements of the current period.
These matters were addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
( 9 ) PLEXURE 2019 ANNUAL REPORT
Key audit matter
How our audit addressed the key audit matter
As part of our audit we:
(cid:120)
(cid:120)
(cid:120)
assessed a sample of contracts to ensure that
revenue is recognised in line with NZ IFRS 15 and the
group’s amended accounting policy
assessed the salient contractual terms in the service
agreements for conditions that impact the timing of
revenue recognition in line with NZ IFRS 15 and in
turn the completeness of deferred revenue
evaluated the Group’s allocation of revenue to the
various services provided under the contract.
Revenue Recognition (Note 2(c) and Note 3)
The Group's primary revenue arises from licensing and
professional services, and totalled $16.83m (2018:
$11.55m) for the year to 31 March 2019.
The service agreements contain multiple elements such
as license revenue, consulting revenue and other
revenue. The revenue recognition for each of these
different elements differ based on when the relevant
service has been delivered to the customer and is
normally after the revenue has been billed. This
requires the Group to identify the value of the
individual services being provided in the service
agreements and allocate the revenue received across
those services into the correct period to which the
services relates (in accordance with NZ IFRS 15
Revenue ('NZ IFRS 15')).
We have included the recognition of revenue as a key
audit matter due to the significance of revenue to the
measurement of the performance of the Group and the
judgement made in determining which period the
services are delivered.
Intangible Assets – Internally Developed
Software
(Note 2(c) and Note 15)
As part of our audit we:
As a software as a service provider the Group incurs
significant expenditure in developing, maintaining and
upgrading software.
The Group has to exercise judgement in determining
which costs associated with the software expenditure
meet the criteria for capitalisation (as described in Note
2(c)) including whether the software will generate
probable future economic benefits and be subsequently
amortised under NZ IAS 38 Intangible Assets ('NZ IAS
38') rather than being expensed as incurred.
Intangible assets relating to software had a carrying
value of $3.3m (2018: $4.4m) at 31 March 2019, and
there were additions of $0.6m (2018: $0.9m) for the
year then ended.
For internally developed software, we have included
the assessment of the capitalisation criteria, the
assessment whether the software will generate
probable future economic benefits and indicators of
impairment as a key audit matter due to the level of
judgement involved.
(cid:120)
(cid:120)
(cid:120)
assessed the Group’s policy for determining whether
software costs should be capitalised or expensed
against the relevant accounting standards and
performed a walk through to confirm our
understanding of the Group’s policy
selected a sample of the additions to internally
developed software during the year and evaluated
whether these additions were appropriately
capitalised by:
(cid:120)
(cid:120)
comparing the selected samples to relevant
supporting documentation (such as supplier
invoices, and employee records)
evaluating whether the capitalisation of software
meets the recognition criteria of the relevant
accounting standards and Group’s policy
challenged the Group’s assessment that the costs
capitalised will generate future economic benefits and
challenged the Group’s assessment of indicators of
impairment.
( 10 ) PLEXURE 2019 ANNUAL REPORT
Other information
Directors’ responsibilities for
the consolidated financial
statements
Auditor’s responsibilities for
the audit of the consolidated
financial statements
Restriction on use
The directors are responsible on behalf of the Group for the other information.
The other information comprises the information in the Annual Report that
accompanies the consolidated financial statements and the audit report.
Our opinion on the consolidated financial statements does not cover the other
information and we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and consider whether it is
materially inconsistent with the consolidated financial statements or our
knowledge obtained in the audit or otherwise appears to be materially
misstated. If so, we are required to report that fact. We have nothing to report
in this regard.
The directors are responsible on behalf of the Group for the preparation and fair
presentation of the consolidated financial statements in accordance with NZ
IFRS and IFRS, and for such internal control as the directors determine is
necessary to enable the preparation of consolidated financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible
on behalf of the Group for assessing the Group’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative but to
do so.
Our objectives are to obtain reasonable assurance about whether the consolidated
financial statements as a whole are 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 ISAs and ISAs (NZ) 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 these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial
statements is located on the External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-
responsibilities/audit-report-1
This description forms part of our auditor’s report.
This report is made solely to the Company’s shareholders, as a body. Our audit has
been undertaken so that we might state to the Company’s shareholders those
matters we are required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company’s shareholders as a body, for our
audit work, for this report, or for the opinions we have formed.
Andrew Boivin, Partner
for Deloitte Limited
Auckland, New Zealand
20 May 2019
( 11 ) PLEXURE 2019 ANNUAL REPORT
Consolidated Statement of Comprehensive Income
For the Year Ended 31 March 2019
Revenues
Revenue from contracts with customers
Other income
Total revenue and other income
Expenses
Wages and staff costs
Contractors
Travel costs
Office costs
Professional costs
Board fees
Marketing
IT costs
Other expenses
Depreciation
Amortisation
Operating expenses
Gain/(Loss) on derivative liability
Extinguish convertible note
Interest and other expense on derivatives
Financing expenses
Net loss before tax
Income tax expense
Notes
2019
$’000
2018
$’000
3
4
5
6
7
8
14
15
18
18
18
16,828
63
16,891
(6,321)
(1,813)
(581)
(514)
(606)
(166)
(300)
(3,168)
(448)
(108)
(1,774)
(15,799)
(1,477)
-
(174)
(1,651)
11,553
202
11,755
(4,286)
(975)
(450)
(381)
(299)
(189)
(92)
(2,760)
(463)
(101)
(1,937)
(11,933)
(900)
(64)
(291)
(1,255)
(559)
(1,433)
9(a)
(144)
(233)
Net loss after tax for the year attributable to the
shareholders of the company
(703)
(1,666)
Other comprehensive income
Exchange difference on translating foreign operations
Total comprehensive loss for the year attributable to
the shareholders of the company
19(c)
18
(685)
49
(1,617)
Earnings per share
Basic loss per share (cents)
Diluted loss per share (cents)
20
20
(0.6)
(0.6)
(1.6)
(0.3)
Calculated on a weighted average basis of the number of shares on issue.
The above consolidated statement of comprehensive income should be read in conjunction with the
accompanying notes.
( 12 ) PLEXURE 2019 ANNUAL REPORT
Consolidated Statement of Changes in Equity
For the year ended March 2019
Notes
Share
Capital and
Treasury
Stock
$’000
Foreign
Currency
Translation
Reserve
$’000
Share
Based
Payment
Reserve
$’000
Accumulated
Losses
Total
Equity
$’000
$’000
Balance at 1 April 2017
Net loss after tax
Exchange differences
arising on translating
foreign operations
Total comprehensive loss
Transactions with owners
Issue of share capital
Capital raise fees
Recognition of share
based payments
Share based payments
on options vested but not
exercised
Balance at 31 March 2018
Balance at 1 April 2018
Net loss after tax
Exchange differences
arising on translating
foreign operations
Total comprehensive loss
Transactions with owners
Conversion of Convertible
note
Share buyback
Shares issued way of
exercising of share
options
Recognition of share
based payments
Share based payments
on options vested but not
exercised
Balance at 31 March 2019
21
19(c)
19(a)
19(a)
19(b)
19(b)
21
19(c)
19(a)
19(a)
19(a)
19(b)
19(b)
24,952
-
-
-
1,900
(32)
-
-
26,820
26,820
-
-
-
4,481
(21)
8
-
-
65
-
49
49
-
-
-
114
114
-
18
18
-
-
-
-
-
1,078
-
(22,303)
(1,666)
3,792
(1,666)
-
49
(1,666)
(1,617)
-
-
-
53
-
-
-
-
(1)
240
(830)
830
301
(23,139)
4,096
301
-
(23,139)
(703)
4,096
(703)
-
18
(703)
(685)
-
-
-
-
-
1,900
(32)
53
-
4,481
(21)
7
240
-
(125)
125
31,288
132
415
(23,717)
8,118
The above consolidated statement of changes in equity should be read in conjunction with the
accompanying notes.
( 13 ) PLEXURE 2019 ANNUAL REPORT
Consolidated Statement of Financial Position
As at 31 March 2019
Asset
Current assets
Cash and cash equivalents
Term deposits
Income tax receivable
Trade and other receivables
Less current liabilities
Trade and other payables
Deferred revenue
Income tax payable
Convertible notes
Derivative liability
Other liabilities
Working capital
Non-current assets
Property, plant & equipment
Intangible assets
Non-current liabilities
Other liabilities
Total net assets
Equity
Share Capital and Treasury Stock
Share based payment reserve
Accumulated losses
Foreign currency translation reserve
Total equity
Signed on behalf of the Board by:
Notes
10
11
9(b)
12
16
17
9(b)
18
18
14
15
2019
$’000
1,179
6,071
14
2,635
9,899
1,344
3,888
-
-
-
-
5,232
2018
$’000
4,097
-
-
1,431
5,528
751
2,446
27
1,485
1,351
10
6,070
4,667
(542)
196
3,255
3,451
-
-
8,118
243
4,401
4,644
6
6
4,096
19(a)
19(b)
21
19(c)
31,288
415
(23,717)
132
8,118
26,820
301
(23,139)
114
4,096
Phil Norman
Chairman
Brian Russell
Director
Dated: 20 May 2019
Dated: 20 May 2019
The above consolidated statement of financial position should be read in conjunction with the
accompanying notes.
( 14 ) PLEXURE 2019 ANNUAL REPORT
Consolidated Statement of Cash Flows
For the year ended 31 March 2019
Operating activities
Cash was provided from (applied to):
Receipts from customers
Marketing funding received
Interest received
Payment to suppliers and employees
Income tax paid
Net cash inflow from operating activities
Investing activities
Cash was provided from (applied to):
Term deposit investment
Disposal of property, plant and equipment
Purchase of property, plant and equipment
Capitalised development costs
Net cash outflow from investing activities
Financing activities
Cash was provided from (applied to):
Issue of ordinary shares
Share capital raising costs
Share buyback
Net cash (outflow)/inflow from financing activities
Net (decrease)/increase in cash held
Add cash and cash equivalents at start of year
Effect of foreign exchange rate changes on cash
Cash at bank at end of year
Comprised of:
Cash and short-term deposits
Notes
2019
$’000
2018
$’000
17,065
-
63
(13,034)
(195)
3,899
(6,071)
-
(117)
(628)
(6,816)
8
-
(21)
(13)
13,300
175
10
(10,819)
(32)
2,634
-
3
(128)
(944)
(1,069)
1,900
(32)
-
1,868
(2,930)
3,433
4,097
12
1,179
615
49
4,097
1,179
4,097
26
11
15
19
19
19
10
10
The above consolidated statement of cash flows should be read in conjunction with the accompanying
notes.
( 15 ) PLEXURE 2019 ANNUAL REPORT
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
1. Corporate Information
The consolidated financial statements of Plexure Group Limited and its subsidiaries (collectively, the
Group) for the year ended 31 March 2019 were authorised for issue in accordance with a resolution of the
directors on 20th May 2019.
Plexure Group Limited (“the Company”) is a limited company incorporated and domiciled in New Zealand,
registered under the Companies Act 1993, and whose shares are publicly traded on the New Zealand
Stock Exchange [NZX:PLX]. The registered office is located at Level 4, 37 Galway Street, Auckland, New
Zealand.
The principal activity of the Company is the development and deployment of cloud-based Customer
Relationship Management (or CRM) solution that enables retailers to engage with consumers in real time
using connected devices and sensors. The principal activities of subsidiaries are disclosed in Note 13.
Statement of Compliance
The consolidated financial statements of the Group comply with New Zealand Equivalents to International
Financial Reporting Standards (“NZ IFRS”) as appropriate for profit-oriented entities.
The consolidated financial statements comply with International Financial Reporting Standards (“IFRS”).
Plexure Group Limited is a FMC reporting entity for the purposes of the Financial Markets Conduct Act
2013 and these financial statements comply with that Act.
2. Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of the financial statements are set out below.
These policies have been consistently applied unless otherwise stated.
(a) Basis of Preparation
The consolidated financial statements have been prepared in accordance with generally accepted
accounting practice in New Zealand (NZ GAAP). For the purposes of complying with NZ GAAP the entity
is a for-profit entity.
The consolidated financial statements have been prepared on the basis of historical cost and on a going
concern basis. Cost is based on the fair values of the consideration given in exchange for assets.
Accounting policies are selected and applied in a manner that ensures that the resulting financial
information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the
underlying transactions or other events is reported.
The consolidated financial statements are presented in New Zealand dollars and all values are rounded
to the nearest ($000), except when otherwise indicated. The consolidated financial statements provide
comparative information in respect of the previous period.
(b) Critical Judgements in Applying Accounting Policies
In the application of NZ IFRS management is required to make 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 various other factors that
are believed to be reasonable under the circumstance, the results of which form the basis of making the
judgements. Actual results may differ from these estimates. The estimates and underlying assumptions
are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in
which the estimate is revised if the revision affects only that period or in the period of the revision and
future periods if the revision affects both current and future periods.
( 16 ) PLEXURE 2019 ANNUAL REPORT
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
(c) Key Sources of Estimation Uncertainty and Key Judgements
Judgements made by management in the application of NZ IFRS that have significant effects on the
financial statements and estimates with a significant risk of material adjustments in the next year are
disclosed, where applicable, in the relevant notes to the financial statements.
Key Sources of Estimation Uncertainty and key judgements include:
(cid:120) The Group assesses each revenue contract to ensure that revenue is recognised by making
estimates and assumptions, for the contracts Plexure has in place with its customers in identifying
performance obligations. Refer to Note 3.
(cid:120) Determining whether the intangible assets to which the development expenditure relates meet the
criteria for capitalisation and if there are any indicators of impairment. Refer to Note 15.
Estimates and judgements are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be measurable under the
circumstances.
(d) Basis of Consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities
controlled by the Company and its subsidiaries as at 31 March 2019. Control is achieved when the Group
is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to
affect those returns through its power over the investee. Specifically, the Group controls an investee if
and only if the Group has:
(cid:120) Power over the investee;
(cid:120) Exposure, or rights, to variable returns from its involvement with the investee; and
(cid:120) The ability to use its power to affect its returns.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there
are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when
the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary.
Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are
included in the financial statements from the date the Group gains control until the date the Group ceases
to control the subsidiary.
Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They
are de-consolidated from the date that control ceases. The acquisition method of accounting is used to
account for the acquisition of subsidiaries by the Company. The consideration transferred for an
acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities
incurred or assumed at the date of exchange. Costs directly attributable to the acquisition are expensed
as incurred and included in operating expenses.
All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions
between members of the Group are eliminated in full on consolidation. Accounting policies of subsidiaries
are consistent with the policies adopted by the Group.
(e) Revenue from contracts with customers
The Group derives revenue from the provision of software licenses, consulting services and other revenue.
Revenue recognition is based on the delivery of performance obligations and an assessment of when
control is transferred to the customer. Revenue is recognised either when the performance obligation, in
the contract, has been performed (‘point in time’ recognition) or ‘over time’ as control of the performance
obligation is transferred to the customer (Refer to Note 2(w)).
( 17 ) PLEXURE 2019 ANNUAL REPORT
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
(e) Revenue from contracts with customers (continued)
The specific recognition criteria described below must also be met before revenue is recognised.
(i) Provision of software licenses
Revenue is recognised over time as the performance obligation is satisfied.
Such services include deployment and CRM, license, support and user fees. Consideration received
prior to the service being rendered is recognised in the consolidated statement of financial position
as deferred revenue.
(ii) Consulting services
The performance obligation is satisfied over-time and payment is generally due upon completion of
the project and acceptance by the customer. In some contracts, consideration received prior to the
service being rendered is recognised in the consolidated statement of financial position as deferred
revenue.
(iii) Other revenue
Other revenue includes travel reimbursement fees is recognised at the point in time when the trip is
complete.
(f) Taxation
Current Income Tax
Current income tax assets and liabilities for the current period 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, at the reporting date in the countries where
the Group operates and generates taxable income.
Deferred Tax
Deferred tax is accounted for using the comprehensive balance sheet liability method in respect of
temporary differences arising from differences between the carrying amount of assets and liabilities in the
financial statements and the corresponding tax base of those items.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax
assets are recognised to the extent that it is probable that sufficient taxable amounts will be available
against which deductible temporary differences or unused tax losses and tax offsets can be utilised.
However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to
them arise from the initial recognition of assets and liabilities (other than as a result of a business
combination), which affects neither taxable income nor accounting profit.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period
when the liability is settled or the asset is realised based on tax rates that have been enacted or
substantively enacted at reporting date. Deferred tax is charged or credited in the profit or loss, except
when it relates to items charged or credited in other comprehensive income, in which case the deferred
tax is also dealt with in other comprehensive income.
Sales Tax
Expenses and assets are recognised net of the amount of sales tax, except:
(cid:120) When the sales tax incurred on a purchase of assets or services is not recoverable from the
taxation authority, in which case, the sales tax is recognised as part of the cost of acquisition of
the asset or as part of the expense item, as applicable
(cid:120) When receivables and payables are stated with the amount of sales tax included
(cid:120) The net amount of sales tax recoverable from, or payable to, the taxation authority is included as
part of receivables or payables in the consolidated statement of financial position.
( 18 ) PLEXURE 2019 ANNUAL REPORT
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
(g) Foreign Currencies
The Group’s consolidated financial statements are presented in New Zealand dollars, which is also the
parent company’s functional currency. For each entity the Group determines the functional currency and
items included in the financial statements of each entity are measured using that functional currency. The
Group uses the direct method of consolidation and on disposal of a foreign operation, the gain or loss that
is reclassified to profit or loss reflects the amount that arises from using this method.
Transactions and balances
Transactions in foreign currencies are initially recorded by the Group’s entities at their respective
functional currency spot rates at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency
spot rates of exchange at the reporting date. Differences arising on settlement or translation of monetary
items are recognised in profit or loss with the exception of monetary items that are designated as part of
the hedge of the Group’s net investment of a foreign operation. These are recognised in other
comprehensive income until the net investment is disposed of, at which time, the cumulative amount is
reclassified to profit or loss. Tax charges and credits attributable to exchange differences on those
monetary items are also recorded in other comprehensive income.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using
the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in
a foreign currency are translated using the exchange rates at the date when the fair value is determined.
The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with
the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on
items whose fair value gain or loss is recognised in other comprehensive income or profit or loss are also
recognised in other comprehensive income or profit or loss, respectively).
Group companies
On consolidation, the assets and liabilities of foreign operations are translated into New Zealand Dollars
at the rate of exchange prevailing at the reporting date and their statements of profit or loss are translated
at exchange rates prevailing at the dates of the transactions. The exchange differences arising on
translation for consolidation are recognised in other comprehensive income. On disposal of a foreign
operation, the component of other comprehensive income relating to that particular foreign operation is
recognised in profit or loss.
(h) Property, Plant and Equipment
All items of Property, Plant and Equipment are stated at cost less accumulated depreciation, and
impairment. Cost includes expenditure that is directly attributable to the acquisition of the item.
Depreciation is provided on property, plant and equipment. Depreciation is calculated on a straight line
basis, so as to write off the net cost of the asset over its expected useful life to its estimated residual value.
The following estimates of useful lives are used in the calculation of depreciation:
Category
Fixtures & Fittings
Plant & Equipment
Estimated useful life
2-14 years
3 years
An item of property, plant and equipment and any significant part initially recognised is derecognised upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss
arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and
the carrying amount of the asset) is included in the consolidated statement of comprehensive income
when the asset is derecognised.
( 19 ) PLEXURE 2019 ANNUAL REPORT
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
(h) Property, Plant and Equipment (continued)
The residual values, useful lives and methods of depreciation of property, plant and equipment are
reviewed at each financial year-end and adjusted prospectively, if appropriate.
(i) Leases
The determination of whether an arrangement is (or contains) a lease is based on the substance of the
arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the
arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right
to use the asset or assets, even if that right is not explicitly specified in an arrangement.
Group as a lessee
Operating lease payments are recognised as an operating expense in the consolidated statement of
comprehensive income on a straight-line basis over the lease term.
(j) Intangible Assets
Capitalised Software Development Expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An internally-generated intangible asset arising from development (or from the development phase of an
internal project) is recognised if, and only if, all of the following have been demonstrated:
the technical feasibility of completing the intangible asset so that it will be available for use or sale;
the intention to complete the intangible asset and use or sell it;
the ability to use or sell the intangible asset;
(cid:120)
(cid:120)
(cid:120)
(cid:120) how the intangible asset will generate probable future economic benefits;
(cid:120)
the availability of adequate technical, financial and other resources to complete the development
and to use or sell the intangible asset; and
the ability to measure reliably the expenditure attributable to the intangible asset during its
development.
(cid:120)
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure
incurred from the date when the intangible asset first meets the recognition criteria listed above. Where
no internally-generated intangible asset can be recognised, development expenditure is charged to profit
or loss in the period in which it is incurred.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less
accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets
acquired separately. Based on the financial performance of the intangible assets the Group did not identify
any impairment indicators for the year ended 31 March 2019.
The useful life of internally-generated intangible assets is as follows:
Category
Core Platform
Mobile Apps
Estimated Useful Life
5 years
2 years
( 20 ) PLEXURE 2019 ANNUAL REPORT
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
(k) Impairment of Non-Financial Assets
At each balance sheet date, the Group reviews the carrying amounts of its assets to determine whether
there is any indication that those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss
(if any). Where the asset does not generate cash flows that are independent from other assets, the Group
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value
in use, the estimated future cash flows are discounted to their present value using a discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (cash-generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating
unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the
increased carrying amount does not exceed the carrying amount that would have been determined had
no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an
impairment loss is recognised in profit or loss immediately.
(l) Cash and Cash Equivalents
Cash and cash equivalents in the consolidated statement of financial position comprise cash on hand,
demand deposits, and other short-term highly liquid investments (original maturity of less than three
months) that are readily convertible to a known amount of cash and are subject to an insignificant risk of
changes in value.
(m) Term deposits
Term deposits are investments with an original maturity exceeding three months. Deposits with the original
maturity between three and twelve months are classified as current term deposits.
(n) Share Based Payments
Equity-settled share-based payments to employees and others providing similar services are measured
at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair
value of equity-settled share-based transactions are set out in Note 19. The fair value determined at the
grant date of equity-settled share-based payments is expensed on a straight-line basis over the vesting
period with a corresponding increase in equity, based on the Group’s estimate of equity instruments that
will eventually vest. At the end of each reporting period, the Group revises its estimate of the number of
equity instruments expected to vest. The impact of the revision of the original estimates, if any, is
recognised in profit and loss such that the cumulative expense reflects the revised estimate, with a
corresponding adjustment to the equity-settled share-based payment reserve.
(o) Financial Instruments
Financial assets and financial liabilities are recognised on the Group’s consolidated statement of financial
position when the Group becomes a party to the contractual provisions of the instrument.
(p) Accounts Receivable
Accounts receivable are measured at initial recognition at fair value and are subsequently measured at
amortised cost using the effective interest method.
Plexure Group has applied the NZ IFRS 9 simplified approach to measuring expected credit losses which
uses a lifetime expected credit loss allowance for all trade and other receivables.
( 21 ) PLEXURE 2019 ANNUAL REPORT
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
(p) Accounts Receivable (continued)
To measure expected credit losses, trade and other receivables have been grouped and reviewed on the
basis of the number of days past due. The expected credit loss allowance has been calculated by
considering the impact of the following characteristics:
(cid:120) The country, customer and market characteristics consider the relative risk related to the country
and region within which the customer resides and makes an assessment of the financial strength
of the customer and the market position.
(cid:120) The baseline characteristic considers the age of each invoice and applies an increasing expected
credit loss estimate as the trade receivable ages.
(q) Accounts Payable
Accounts payable are recognised when the Group becomes obliged to make future payments resulting
from the purchase of goods and services.
(r) Employee Benefits
Provision is made for benefits accruing to employees in respects of wages and salaries, annual leave,
and sick leave when it is probable that settlement will be required and they are capable of being measured
reliably.
Provision made in respect of employee benefits expected to be settled within 12 months, are measured
at their nominal values using the remuneration rate expected to apply at the time of settlement.
Provisions made in respect of employee benefits, which are not expected to be settled within 12 months,
are measured at the present value of the estimated future cash outflows to be made by the Group in
respect of services provided by employees up to reporting date.
(s) Consolidated Statement of Cash Flows
For the purpose of the consolidated statement of cash flows, cash and cash equivalents includes cash on
hand and in banks and investments in money market instruments net of outstanding bank overdrafts.
The consolidated statement of cash flows is prepared exclusive of GST, which is consistent with the
method used in the statement of comprehensive income.
Definition of terms used in the consolidated statement of cash flows:
(cid:120) Operating activities include all transactions and other events that are not investing or financing
(cid:120)
activities.
Investing activities are those activities relating to the acquisition and disposal of current and non-
current investments and any other non-current assets.
(cid:120) Financing activities are those activities relating to changes in the equity and debt capital structure
of the Group and those activities relating to the cost of servicing the Group’s equity.
(t) Convertible notes
Convertible notes are initially measured at fair value and subsequently measured at amortised cost using
the effective interest method.
The effective interest method is a method for calculating the amortised cost of a financial liability and
allocating interest expense over the relevant period.
( 22 ) PLEXURE 2019 ANNUAL REPORT
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
(u) Derivative financial liability
The derivative financial liability is carried at fair value, with any gains or losses arising on measurement
recognised in profit or loss.
(v) Treasury Stock
Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from
equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the
Group’s own equity instruments.
(w) Adoption of New Revised Standards and Interpretations
The Group adopted all mandatory new and amended standards and interpretations.
The impact of the adoption of these new standards is disclosed below.
NZ IFRS 9 Financial Instruments (effective for accounting periods beginning on or after 1 January 2018).
NZ IFRS 9, Financial Instruments, replaces the provisions of NZ IAS 39 that relate to the recognition,
classification, measurement and impairment of financial instruments. The adoption of NZ IFRS 9 from 1
April 2018 resulted in changes in accounting policies in the consolidated financial statements, however
compliance with the standard has not had any material impact on the financial position and financial
performance in the current or prior year. For prior year comparatives the modified retrospective method
of transition was used.
Plexure Group classifies its financial assets and financial liabilities as being measured at amortised cost.
There was no change in the fair value of the financial assets as a result of the adoption of a new
accounting standard.
At initial recognition, the Group measures a financial asset at its fair value plus transaction costs that are
directly attributable to the acquisition of the financial asset.
NZ IFRS 15 Revenue from contracts with customers (effective for accounting periods beginning on or
after 1 January 2018).
NZ IFRS 15 Revenue from contracts with customers, replaces NZ IAS 18 Revenue and changes the ways
Plexure Group recognises revenue. The Group adopted NZ IFRS 15 from 1 April 2018, which resulted in
changes in accounting policies relating to the recognition of revenue.
NZ IFRS 15 established a comprehensive framework for determining whether, how much and when
revenue is recognised, and also contains new requirements related to presentation. The core principle of
this new standard is that revenue should be recognised dependent on the transfer of promised goods or
services to the customer for an amount that reflects the consideration which should be received in
exchange for those goods or services. For prior year comparatives the modified retrospective method of
transition was used.
( 23 ) PLEXURE 2019 ANNUAL REPORT
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
(w) Adoption of New Revised Standards and Interpretations (continued)
Process and policy
To assess the impact of NZ IFRS 15 on the Group, contracts within each segment were aggregated to
create portfolios of contracts. An individual contract from each portfolio was selected as being
representative of each unique contract type.
For each contract type, the five-step method was applied to assess the impact on revenue recognition.
The five-step method for recognising revenue from contracts with customers involves consideration of the
following:
Identifying the contract with the customer
Identify the performance obligations in the contract
1.
2.
3. Determining the transaction price
4. Allocate the transaction price to performance obligations
5. Recognise revenue when each performance obligation is satisfied.
Revenue Type
Description
Key Judgements Outcome
Providing a
software license is
a distinct
performance
obligation and is
not required to be
bundled with other
performance
obligations.
The services are
a part of SaaS
and Hosting
performance
obligation and
should be bundled
as such.
The services are
a distinct
performance
obligation as they
are not highly
dependent or
interrelated to
other performance
obligations in the
contract.
N/A
SaaS and Hosting
fees (relates to
license revenue in
Note 3)
Mobile
engagement
platform licensing
and support.
Setup and
Deployment fees
(relates to license
revenue in Note
3)
SaaS platform
setup and CRM
implementation
for customers.
Determining the
distinct
performance
obligations and
whether items are
required to be
bundled to form a
distinct
performance
obligation.
Determining
whether the
services provided
are a distinct
performance
obligation.
Professional
services
(consulting
revenue in Note
3)
Value-add
services, and
tailored software
development
and/or
enhancement.
Determining
whether the
services provided
are a distinct
performance
obligation.
Expense
reimbursement
(relates to other
revenue in
Note 3)
Compensation for
client related
travel
No major
judgement
required, other
than confirming
the period of client
travel and aligning
costs to revenue
recognised.
( 24 ) PLEXURE 2019 ANNUAL REPORT
Timing of revenue
recognition
Over time
Platform access is
recognised over
time on the input of
service period
basis as benefits
are simultaneously
received and
consumed.
As above
Over time
Recognised when
the service is
complete or on a
stage of
completion input
basis based on the
hours required to
finalise the project.
Point in time
Recognised at the
point in time when
the client related
travel has
occurred.
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
(w) Adoption of New Revised Standards and Interpretations (continued)
Accounting policies have been amended to ensure that the five-step method, as defined in NZ IFRS 15,
is applied consistently to revenue recognition processes across Plexure Group.
Following a review of Plexure Group’s portfolio of contracts, management concluded that the
implementation of NZ IFRS 15 has deferred the recognition of set-up and deployment fees (part of license
revenue) for the year ended 31 March 2019 by $144,000 (31 March 2018: Nil).
Management obtained further understanding of revenue disclosure (under NZ IFRS 15) since the interim
report for six months ended 30 September 2018 and decided to amend the classification of revenue in
the notes to the consolidated financial statements into 3 categories (license, consulting services and other
revenue).
(x) Published but not yet applicable accounting standards
NZ IFRS 16 Leases (effective for accounting periods beginning on or after 1 January 2019)
NZ IFRS 16, Leases, replaces NZ IAS17: Leases and changes the way in which the Group accounts for
its operating leases. The new standard requires recognition of a lease liability and a right-of-use asset at
inception based on the future lease payments for substantially all lease contracts. The expense previously
recorded in relation to operating leases will move from being included in operating expenses to within
depreciation and finance expense.
NZ IFRS 16 is effective for the year ended 31 March 2020 with early adoption permitted. The Group
intends to adopt NZ IFRS 16 on its effective date. Considering the leases the Group has in place as at 31
March 2019, the adoption of NZ IFRS 16 based on the modified retrospective method is not expected to
have a material impact on the financial statements for the year ended 31 March 2020.
As at 31 March 2019 the Group had two current leases remaining (refer to note 23). The new office lease
was signed on 1 April 2019 (refer to note 28) and will be accounted prospectively under NZ IFRS 16 in
the year ended 31 March 2020.
3. Revenue from contracts with customers
License revenue (i)
Consulting revenue (i)
Other Revenue
2019
$’000
9,702
6,987
139
16,828
2018
$’000
6,868
4,507
178
11,553
(i)
License and Consulting revenue is recognised over time, the unutilised portion of revenue is
recognised as deferred revenue in the balance sheet. For detailed breakdown of deferred revenue
refer to Note 17.
Revenue by segment and region is presented in the segmentation report in Note 25.
4. Other income
Interest received
Government grant income
Marketing funding
( 25 ) PLEXURE 2019 ANNUAL REPORT
2019
$’000
63
-
-
63
2018
$’000
10
17
175
202
2019
$’000
4,287
903
359
74
130
25
543
6,321
48
4
2019
$’000
95
30
35
100
179
167
606
2019
$’000
2,764
257
122
25
3,168
2018
$’000
2,885
767
299
60
85
20
170
4,286
26
4
2018
$’000
40
23
25
79
33
99
299
2018
$’000
2,353
184
175
48
2,760
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
5. Wages and staff costs
Salaries (less capitalised)
NZ
Overseas
Benefits
NZ
Overseas
Kiwisaver/Pension
NZ
Overseas
Staff Costs
Permanent Staff numbers as at 31 March
NZ
Overseas
6. Professional fees
Auditors’ fees for audit of the financial statements
Auditors’ other fees:
Taxation compliance services
Ancillary assurance services
Accounting advisory services and systems
Consultancy services
Legal Expenses
7. IT Costs
Platform hosting
Support and maintenance
License
Other IT expenses
( 26 ) PLEXURE 2019 ANNUAL REPORT
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
8. Other expenses
Other Expenses includes the following amounts:
Listing expenses
Share Option expense
Foreign exchange (gain)/loss
Write off of trade receivables
Loss allowance on trade receivables
Non-derivatives interest expenses
Loss on disposal of property, plant & equipment (Note 14)
Bank fees
2019
$’000
70
240
(58)
(70)
195
-
49
22
448
9. Tax
The major components of income tax expense for the years ended 31 March 2019 and 2018 are:
(a) Consolidated Statement of Comprehensive Income:
Current income tax:
Current income tax expense
Withholding Tax not recognised
Prior Period Adjustment
Income tax expense reported in the statement of comprehensive
income
(b) Current tax assets and liabilities
RWT receivable
Current tax payable
(c) Reconciliation of income tax expense to net loss before tax:
Net loss before tax
Benefit of statutory income
Non-deductible expenses
Future benefit of tax losses not recognised
Effect of difference in overseas tax rates
Foreign withholding tax expenses
Prior period adjustment
Income tax expense reported in the statement of comprehensive
income
2019
$’000
(63)
(89)
8
(144)
2019
$’000
(16)
2
(14)
2019
$’000
(559)
156
(664)
462
(17)
(89)
8
(144)
2018
$’000
77
53
96
123
91
4
-
19
463
2018
$’000
(35)
(126)
(72)
(233)
2018
$’000
(8)
35
27
2018
$’000
(1,433)
401
(89)
(359)
12
(126)
(72)
(233)
( 27 ) PLEXURE 2019 ANNUAL REPORT
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
(d) Deferred Tax
The Group has estimated gross tax losses of $17.6m at balance date (2018: $23.0m). These are subject
to confirmation by the Inland Revenue Department and subject to meeting the requirements of the 2007
Income Tax Act. Unrecognised deferred tax assets arising from these tax losses are $4.9m measured at
28% (2018: $6.4m). The analysis of deferred tax assets and deferred tax liabilities is as follows:
At 1 April 2017
Recognised in profit and loss
At 31 March 2018
Intangible
assets
$’000
(615)
(270)
(885)
Provisions
& accruals
$’000
50
(12)
38
At 1 April 2018
Recognised in profit and loss
At 31 March 2019
(885)
233
(652)
38
(101)
(63)
Tax
losses
$’000
565
282
847
847
(132)
715
Deferred
$’000
86
(86)
-
-
-
-
(e) Imputation Credit Account Balances
Balance as at 31 March
10. Cash and Cash Equivalents
Cash and Cash and Cash Equivalents
Denominations in:
New Zealand dollars
United States dollars
Australian dollars
Japanese Yen
Great British pounds
11. Term Deposits
Term Deposits
2019
$000
16
2019
$’000
1,179
1,179
671
377
1
107
23
1,179
2019
$’000
6,071
6,071
Total
$’000
86
(86)
-
-
-
-
2018
$000
8
2018
$’000
4,097
4,097
3,906
77
36
55
23
4,097
2018
$’000
-
-
Term deposits are held with the group's bankers, made for varying periods depending on the immediate
cash requirements of the Group, and earn interest at the respective term deposit rates.
All term deposits are denominated in New Zealand dollars.
( 28 ) PLEXURE 2019 ANNUAL REPORT
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
12. Trade and Other Receivables
Accounts receivable
Provision for expected credit loss
Accrued Income
Sales tax receivable
Prepayments and other receivables
The aging profile of Accounts Receivable are as follows:
Current
30-59
60-89
90 days and later
2019
$’000
2,196
(196)
54
335
246
2,635
974
351
484
387
2,196
2018
$’000
1,029
(91)
111
212
170
1,431
273
463
121
172
1,029
The aging profile above does not necessarily reflect whether an amount is past due and impaired, as
customer credit terms vary. Of the accounts receivable total of $2.196m, $1.222m is showing as past due
(2018: $0.756m) however based on overseas payment patterns this is considered normal.
Accounts Receivable are split into revenue categories as follows:
License revenue
Consulting revenue
Other Revenue
1,574
608
14
2,196
944
64
21
1,029
13. Investments in Subsidiaries
The consolidated financial statements of the Group include the following subsidiaries:
Holder of IP
assets
Trading entity
Name
Plexure Limited
VMob IP Limited
Holding
company
Plexure Group
Limited
Plexure Group
Limited
Equity interest Balance
2019
2018
date
Country of
incorporation
Principal
activity
100%
100%
31 March New Zealand Trading entity
100%
100%
31 March New Zealand
VMob UK Limited Plexure Limited 100%
100%
31 March
United
Kingdom
VMob USA
Limited
Plexure KK
(previously VMob
KK)
VMob Pty
Limited (i)
VMob Singapore
Pte Limited (ii)
Plexure Limited 100%
100%
31 March USA
Trading entity
Plexure Limited 100%
100%
31 March
Japan
Trading entity
Plexure Limited
Plexure Limited
-
-
100%
31 March Australia
Trading entity
100%
31 March Singapore
Trading entity
(i)
(ii)
On 2 January 2019 Vmob Pty Limited was deregistered on the Australian Company register.
On 7 May 2018 Vmob Singapore Pte Limited was struck off the Singaporean register.
( 29 ) PLEXURE 2019 ANNUAL REPORT
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
14. Property, Plant & Equipment
Leasehold
Improvements
$’000
Furniture
& Fittings
$’000
Plant &
Equipment
$’000
Cost
At 1 April 2017
Additions
Disposal
At 31 March 2018
Additions
Disposal
At 31 March 2019
Depreciation
At 1 April 2017
Depreciation charge for
the year
Disposal
At 31 March 2018
Depreciation charge for
the year
Disposal
At 31 March 2019
Net book value
At 31 March 2018
At 31 March 2019
242
-
(6)
236
-
(236)
-
(111)
(49)
3
(157)
(24)
181
-
79
-
59
2
-
61
61
(9)
113
(24)
(5)
-
(29)
(17)
4
(42)
32
71
219
125
(30)
314
61
(9)
366
(165)
(47)
30
(182)
(67)
8
(241)
132
125
Total net loss on disposal of Property, Plant & Equipment during the period amounted to $49,488.
15. Intangible Assets
Cost
As at 1 April 2017
Additions – internally developed
As at 31 March 2018
Additions – internally developed
As at 31 March 2019
Amortisation
As at 1 April 2017
Amortisation charge for the year
As at 31 March 2018
Amortisation charge for the year
As at 31 March 2019
Net book value
As at 31 March 2018
As at 31 March 2019
( 30 ) PLEXURE 2019 ANNUAL REPORT
Core Platform
$000s
Mobile Platform
$000s
8,578
944
9,522
628
10,150
(3,345)
(1,784)
(5,129)
(1,766)
(6,895)
4,393
3,255
1,017
-
1,017
-
1,017
(856)
(153)
(1,009)
(8)
(1,017)
8
-
Total
$’000
520
127
(36)
611
122
(254)
479
(300)
(101)
33
(368)
(108)
193
(283)
243
196
8
Total
$000s
9,595
944
10,539
628
11,167
(4,201)
(1,937)
(6,138)
(1,774)
(7,912)
4,401
3,255
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
16. Trade and Other Payables
Accounts payable
Accruals
Staff social security and tax payable
Normal credit terms are 30th of the following month.
17. Deferred Revenue
2019
$’000
547
770
27
1,344
2018
$’000
216
443
92
751
Deferred customer revenue relates to income invoiced to customers in advance during a financial
period, part of which will be recognised in the statement of comprehensive income in the subsequent
financial period. All deferred revenue is classified as current liability.
Deferred license revenue
Deferred consulting revenue
18. Convertible note
2019
$’000
2,617
1,271
3,888
2018
$’000
1,251
1,195
2,446
On the 3 February 2017 Plexure Group Limited entered into a convertible debt agreement to issue
convertible notes with an aggregated principle value of $1.6m maturing on 3 November 2017. The notes
initially bore 8% interest per annum calculated on a simple basis and are convertible at the option of the
holder at a price of $0.28 per share.
On 30 August 2017 Plexure Group Limited agreed amended terms with the holders of the $1.6m of
convertible notes. The key terms of the amendments were as follows:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
The repayment date was extended from the 3 November 2017 until 31 March 2019.
Interest of $97,524 was converted into the face value of the convertible note.
Interest stopped accruing on the convertible note.
In return for the above the option has been repriced from 28c to 12c.
On 4 April 2018, holders of $168,888 worth of convertible notes exercised their option to convert to
1,407,398 shares. The note was converted at 12 cents per share compared to the market price on the
date of issue of 20 cents per share. On 29 March 2019 the remaining holders of $1,504,173 of the
convertible notes exercised their option to convert to 12,534,773 shares. The note was converted at 12
cents per share compared to the market price on the date of issue of 33.5 cents per share.
The convertible note consisted of liability amortised at cost and a derivative liability at fair value, which
were both closed out through the profit and loss statement resulting in an expense of $1.477m. To this was
added the interest charged of $0.168m and resident withholding tax and non-resident withholding tax.
( 31 ) PLEXURE 2019 ANNUAL REPORT
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
18. Convertible note (continued)
The movement in the carrying value of the convertible note liability is as follows:
Opening balance
Interest until date of new terms
Reversal of opening balance due to new terms
Proceeds of issue
Interest converted to the face value of the note
Derivative liability fair value at date of issue
Liability component
Effective interest rate charged
Close out of the convertible note through profit and loss
Conversion of the convertible note to equity
Closing balance
2019
$’000
1,485
-
-
-
-
-
1,485
168
22
(1,675)
-
The movement in the carrying value of the convertible note derivative liability is as follows:
Opening balance
Reversal of opening balance due to new terms
Amount at the date of issue
Fair value of derivative through profit and loss
Conversion of the convertible note to equity
Closing balance
2019
$’000
1,351
-
-
1,455
(2,806)
-
2018
$’000
1,419
191
(1,610)
1,600
75
(290)
1,385
100
-
-
1,485
2018
$’000
161
(161)
290
1,061
-
1,351
Reconciliation of the carrying value of the convertible note to financing expenses in the statement of
comprehensive income:
Convertible note interest until date of reversal
RWT & NRWT
Convertible note interest until balance date
Interest expense on derivatives
Reversal of convertible note liability due to new terms
Proceeds of issue
Interest converted to the face value of the note
Close out of the convertible note liability
Close out of the convertible note derivative liability
Reversal of derivative liability due to new terms
Fair value of the derivative through the profit and loss
Loss on derivative liability
2019
$’000
-
(6)
(168)
(174)
-
-
-
(22)
(1,455)
(1,477)
-
-
-
2018
$’000
(191)
-
(100)
(291)
(1,610)
1,600
74
-
-
(64)
161
(1,061)
(900)
( 32 ) PLEXURE 2019 ANNUAL REPORT
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
19. Share Capital, Treasury Stock and Share Based Payment Reserve
All shares are ordinary shares, have been issued as fully paid and have no par value. Fully paid ordinary
shares carry one vote per share, carry a right to dividends and a pro-rata share of net assets on a wind
up.
(a) Share Capital and Treasury Stock
Balance as at 31 March 2017
Shares issued by way of private placement in July 2017
Shares issued by way of private placement in August 2017
Balance as at 31 March 2018
Shares issued by way of conversion of convertible note in April
2018
Share buyback recognised as Treasury Stock in February 2019
Shares issued by way of exercising of share options in March
2019
Shares issued by way of conversion of convertible note in March
2019
Balance as at 31 March 2019
(b) Share based payment reserve
Shares
92,650,513
5,230,000
13,770,000
111,650,513
1,407,397
(71,421)
30,001
12,534,773
125,551,263
$’000
24,952
503
1,365
26,820
281
(21)
8
4,200
31,288
The share based payment reserve is used to record the accumulated value of unexercised share options
and vested share rights which have been recognised in the statement of comprehensive income. As at
balance date executives, and employees and directors have options over 8,805,440 shares (2018:
4,690,000).
Balance at the beginning of year
Share based payment
Writeback of share based payment expired but not vested
Options not exercised written to retained earnings
Options exercised
Balance at the end of year
(c) Foreign currency translation reserve
2019
$’000
301
242
(2)
(125)
(1)
415
2018
$’000
1,078
141
(88)
(830)
-
301
Exchange differences relating to the translation of the results and net assets of the Group's foreign
operations from their functional currencies to the Group's presentation currency (i.e. New Zealand dollars)
are recognised directly in other comprehensive income and accumulated in the foreign currency
translation reserve. Exchange differences previously accumulated in the foreign currency translation
reserve (in respect of translating the net assets of foreign operations) are reclassified to profit or loss on
the disposal of the foreign operation.
Balance at the beginning of year
Exchange differences arising on translating the foreign
operations
Balance at the end of year
2019
$’000
114
18
132
2018
$’000
65
49
114
( 33 ) PLEXURE 2019 ANNUAL REPORT
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
(d) Share Based Payments
In August 2012 the Group established a share option plan that entitles selected employees, contractors
and executives to purchase shares in the Company. In accordance with the terms of issue of the options,
holders are entitled to acquire shares at the price determined at the time the options were issued. All
options are to be delivered by physical delivery of shares. Terms and conditions of outstanding grants
are as follows:
Grant date
26/06/2014
28/10/2014
30/03/2015
17/06/2015
19/11/2015
02/12/2016
06/09/2017
20/11/2017
10/01/2018
19/06/2018
04/09/2018
20/11/2018
17/12/2018
Total options issued
Personnel entitled
Staff
Staff
Key executives and staff
Key executives and staff
Key executives and staff
Key executives and staff
Key executives
Key executives
Key executives and staff
Staff
Key executives
Staff
Key executives and staff
Number of instruments
5,440
40,000
70,000
160,000
30,000
910,000
1,000,000
400,000
720,000
60,000
3,500,000
140,000
1,770,000
8,805,440
All share options vest in three equal tranches, one third on each of the first, second and third anniversaries
of the grant. The contractual life of all options is 5 calendar years from the date of issue.
The number and average exercise price of the share options are as follows:
Outstanding at 1 April
Exercised during the year
Granted during the year
Forfeited during the year
Outstanding at 31 March
2019
2018
Weighted
average
exercise price
Number
of options
Weighted
average
exercise price
0.20
0.20
0.26
4,690,000
(30,001)
5,600,000
(1,454,559)
8,805,440
0.14
0.36
Number
of options
8,006,533
-
2,690,000
(6,006,533)
4,690,000
The fair value of services received in return for the share options granted is based on the fair value of
share options granted measured using a Black Scholes model with the following inputs:
Issue Date
Estimated fair value
per option at grant
date
Exercise price per
share
Expected volatility
Option life from date of
grant
Risk free interest rate
17/12/18
20/11/18
4/09/18
19/06/18
10/01/18
11.0 cents
9.7 cents
8.9 cents
9.8 cents
9.5 cents
23.25 cents
20.45 cents
18.8 cents
20.75 cents
19.3 cents
50%
50%
50%
50%
50%
5 years
5 years
5 years
5 years
5 years
1.70%
1.70%
1.70%
1.70%
4.00%
( 34 ) PLEXURE 2019 ANNUAL REPORT
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
(d) Share Based Payments (continued)
Issue Date
Estimated fair value per
option at grant date
Exercise price per share
Expected volatility
Option life from date of
grant
Risk free interest rate
Issue Date
Estimated fair value per
option at grant date
Exercise price per share
Expected volatility
Option life from date of
grant
Risk free interest rate
20/11/17
06/09/17
02/12/16
19/11/15
17/06/15
5.9 cents
5.4 cents
11.8 cents
16.7 cents
20.1 cents
12.0 cents
50%
11.0 cents
50%
24.0 cents
50%
34 cents
50%
40.8 cents
50%
5 years
5 years
5 years
5 years
5 years
4.00%
4.00%
4.00%
4.00%
4.00%
30/3/15
28/10/14
26/6/14
22.1 cents 0.16 cents 24.6 cents
45 cents 32.5 cents
50%
50%
50 cents
50%
5 years
5 years
5 years
4.00%
4.00%
4.00%
Expected volatility was estimated by reference to the volatility of listed equity securities for businesses
of a similar nature to the Group operating in the technology industry and Plexure’s own volatility.
20. Earnings Per Share
The loss of $0.703m (2018: $1.666m) for the year represented a loss per share shown below based on
weighted average ordinary shares on issue during the year.
Weighted average ordinary shares issued
Weighted average potential ordinary shares
Weighted average number of ordinary shares for diluted loss per
share
Basic loss per share (cents)
Diluted loss per share (cents)
2019
113,102,013
6,853,362
119,995,375
2018
105,306,540
6,168,939
105,306,540
0.6
0.6
1.6
0.3
Note that the options are not considered dilutive in terms of calculating earnings per share, as a loss was
recorded in 2019 and 2018.
21. Accumulated Losses
Balance at the beginning of year
Share based payments on expired options
Net loss for the year
Balance at the end of the year
2019
$’000
(23,139)
125
(703)
(23,717)
2018
$’000
(22,303)
830
(1,666)
(23,139)
( 35 ) PLEXURE 2019 ANNUAL REPORT
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
22. Related Party Transactions
At reporting date the Directors of the Company controlled 3% (2018: 19%) of the voting shares in the
Company.
2019
2018
Phil Norman
Sharon Hunter
Brian Russell
Scott Bradley
(resigned 29 May 2018)
Craig Herbison
(appointed 19 June 2018)
Tim Cook
(resigned 8 August 2018)
Director’s Fee ($)
Payables ($)
Shareholding (#)
Shares (%)
Director’s Fee ($)
Payables ($)
Shareholding (#)
Shares (%)
Director’s Fee ($)
Payables ($)
Shareholding (#)
Shares (%)
Director’s Fee ($)
Salary (CEO) ($)
Shareholding (#)
Shares (%)
Director’s Fee ($)
Salary and bonus (CEO) ($)
Shareholding (#)
Shares (%)
Director’s Fee ($)
Payables ($)
Shareholding (#)
Shares (%)
50,000
4,893
3,194,405
2.54
35,000
3,354
-
-
35,000
3,871
-
-
5,832
-
8,681,095
6.91
-
457,145
-
-
12,425
-
840,000
0.67
50,000
4,792
3,194,405
2.86
35,000
-
-
-
16,720
3,825
-
-
11,099
193,968
16,681,095
14.94
-
170,464
-
-
35,000
-
1,316,847
1.18
The Company supplied services to the value of $173,517 (2018: $173,517) to Loyalty New Zealand
Limited during the year. Phil Norman was a Director of this company during the year.
Key management personnel and director transactions
Key management personnel are defined as those persons having authority and responsibility for planning,
directing and controlling the activities of the Group, directly or indirectly and include the Chief Executive
and his direct reports.
In addition to their fees and salaries, the Group also provides non-cash benefits to executive officers in
the form of share options (refer Note 19). The following table summarises remuneration paid to key
management personnel and directors:
Directors’ fees*
Exec team salary and bonus
Share based payments
2019
$’000
138
1,586
194
1,918
2018
$’000
148
1,437
91
1,676
*Directors fees is the total amount paid to Directors as fees. This differs to the amount in the consolidated
statement of comprehensive income as that figure includes directors and officers insurance.
( 36 ) PLEXURE 2019 ANNUAL REPORT
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
23. Operating lease Commitments – Group as lessee
The Group leases property under non-cancelable operating lease arrangements. Future minimum rentals
payable under non- cancelable operating leases as at 31 March are as follows:
Within one year
After one year but not more than five years
2019
$’000
84
-
84
2018
$’000
129
73
202
ASB Bank provides a guarantee for $64,000 in respect of property leases.
24. Contingencies
There were no material contingent assets at 31 March 2019 (2018:Nil). There is a contingent liability of
$64,000 in respect of properties and a further $75,000 in relation to the NZX bond (2018: $139,000).
25. Segmental reporting
The Chief Executive and members of the executive management team are the Group’s chief operating
decision makers. They have determined that based on the information they use for the purposes of
allocating resources and assessing performance, the Group itself forms a single operating segment, the
development and deployment of a mobile engagement software with consulting services on campaigns
and where required paid technology development work. The segment result is reflected in the financial
statements.
The Group operated principally in Asia, Australasia, North America, Latin America and Europe during the
year ended 31 March 2019. Operating revenue by geographical location is as follows:
Asia
Australasia
North America
Latin America
Europe
2019
$’000
9,101
671
1,792
407
4,857
16,828
2018
$’000
7,049
639
307
1,134
2,424
11,553
All material non-current assets are held within New Zealand. We note that one customer contributes over
10% of our revenues.
( 37 ) PLEXURE 2019 ANNUAL REPORT
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
26. Reconciliation of Operating Cash Flows
Reconciliation from the net loss after tax to the net cash from operating activities.
Net loss after tax
Adjustments for non-cash items
Amortisation
Depreciation
Amortisation of lease inducement
Recognition of share based payments
Fair Value of Derivative
Interest Accrued on Convertible Note
Other
Movements in working capital
(Increase)/ Decrease in trade and other receivables
Increase/ (Decrease) in trade payables and accruals
Increase in deferred revenue
Net cash inflow from operating activities
27. Financial Risk Management
2019
$’000
(703)
1,774
108
(5)
240
1,477
174
51
3,819
(1,204)
545
1,442
783
3,899
2018
$’000
(1,666)
1,937
101
(9)
53
900
356
30
3,368
454
(819)
1,297
932
2,634
The Group is subject to a number of financial risks including liquidity risk, credit risk and market risk. The
Group does not enter into or trade financial instruments, including derivative financial instruments, for
speculative purposes. Specific risk management objectives and policies set out below:
(a) Capital Risk Management
The Group manages its capital to ensure that the Group will be able to continue as a going concern while
maximising the return to stakeholders through the optimisation of debt and equity.
The capital structure of the Group consists of debt, issued capital, equity reserves and accumulated losses
as disclosed in Notes 19 and 21.
The Group’s Board of Directors reviews the capital structure on a regular basis.
The Group is not subject to externally imposed capital requirements.
The Groups overall strategy remains unchanged from prior years.
(b) Interest Rate Risk
The Group has no significant interest bearing assets or liabilities and operating cashflows are substantially
independent of changes in market interest rates in interest bearing financial assets or liabilities.
( 38 ) PLEXURE 2019 ANNUAL REPORT
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
(c) Foreign Exchange Risk
The Group faces the risk of movements in foreign currency exchange rates against the New Zealand
dollar. During the year ended 31 March 2019, the Group’s transactions were in New Zealand dollars,
Australian dollars, United States dollars, Japanese Yen and Euros. As a result the Group’s consolidated
statement of comprehensive income and consolidated statement of financial position can be affected by
movements in exchange rates.
The table below details the Group’s sensitivity to a reasonably possible (10%) increase or decrease in the
New Zealand dollar against the relevant foreign currencies. The sensitivity analysis includes only
outstanding foreign currency denominated monetary items and adjusts their translation at the year end
for the change in foreign currency rates.
Carrying
amount
2019
+/- 10%
effect on
profit
before
tax
+/- 10%
effect on
equity
Carrying
amount
2018
+/- 10%
effect on
profit
before
tax
+/- 10%
effect on
equity
$’000
$’000
$’000
$’000
$’000
$’000
377
1
107
23
1,589
38
373
-
38
-
11
2
159
4
37
-
38
-
11
2
159
4
37
-
77
36
55
23
657
19
163
77
8
4
6
2
66
2
16
8
8
4
6
2
66
2
16
8
Financial Assets
Cash and cash equivalents
USD
AUD
JPY
GBP
Trade receivables
USD
AUD
JPY
EUR
(d) Credit Risk
Credit risk refers to the risk that a counter-party will default on its contractual obligations resulting in
financial loss to the Group. Financial instruments which potentially subject the Group to credit risk,
principally consist of bank balances and accounts receivable. The Board monitors and manages the
exposure to credit risk through the ongoing review of aged receivables and their recoverability.
The maximum exposures to credit risk at balance date are:
Cash, cash equivalents and Term Deposits
Accounts Receivable
2019
$’000
7,250
2,196
2018
$’000
4,097
1,029
At 31 March 2019, the credit risk associated with accounts receivable is considered minor due to the mix
of large organisations. The Group’s bank accounts are held with reputable banks in New Zealand and
overseas. Otherwise the Group does not have any other concentrations of credit risk. The Group does
not require any collateral or security to support financial instruments.
( 39 ) PLEXURE 2019 ANNUAL REPORT
Notes to the Consolidated Financial Statements
For the Year Ended 31 March 2019
(e) Liquidity Risk Management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who have built an
appropriate liquidity risk management framework for the management of the Group’s short, medium and
long-term funding and liquidity management requirements. The Group manages liquidity risk by
maintaining adequate reserves by continuously monitoring forecast and actual cash flows and matching
the maturity profiles of financial assets and liabilities.
28. Events after reporting period
On the 1 April Plexure signed a 6 year lease for new premises for an annual rent of $487,398.
On 2 April 2019 McDonald’s Corporation signed a new Software as a Service agreement with Plexure.
On the same day McDonald’s purchased a stake of 9.9% of Plexure for $5.4m representing a 15%
premium over the volume-weighted average price of Plexure shares during March 2019.
On 8 April 2019 the company appointed Robert Bell as a Non-Executive Director.
( 40 ) PLEXURE 2019 ANNUAL REPORT
Supplementary Financial Information
For the Year Ended 31 March 2019
The supplementary financial information does not form part of the financial statements. To assist in
understanding the Group’s performance, The Director’s have provided additional disclosure of the
Group’s results excluding the financing expenses which relate to the convertible note.
Reconciliation of net profit/(loss) before tax excluding convertible note accounting
Net loss before tax
Add back financing expenses (convertible note)
Net profit/(loss) before tax excluding convertible note accounting
2019
$’000
(559)
1,651
1,092
Reconciliation of net profit/(loss) after tax excluding convertible note accounting
Net loss after tax attributable to the shareholders of the company
Add back financing expenses (convertible note)
Net profit/(loss) after tax excluding convertible note accounting
2019
$’000
(703)
1,651
948
2018
$’000
(1,433)
1,255
(178)
2018
$’000
(1,666)
1,255
(411)
Reconciliation of total comprehensive profit/(loss) excluding convertible note accounting
Total loss for the year attributable to the shareholders of the company
Add back financing expenses (convertible note)
Total comprehensive profit/(loss) before excluding convertible note
accounting
2019
$’000
(685)
1,651
2018
$’000
(1,617)
1,255
966
(362)
( 41 ) PLEXURE 2019 ANNUAL REPORT
NZX Governance Report
For the Year Ended 31 March 2019
Corporate Governance Statement
This corporate governance statement demonstrates Plexure’s compliance with the new NZX Corporate
Governance Code.
Principle 1: Code of Ethical Behaviour
Directors should set high standards of ethical behaviour, model this behaviour and hold management
accountable for delivering these standards throughout the organization.
Recommendation 1.1 Code of Ethical Behaviour
Directors should set high standards of ethical behaviour, model this behaviour and hold management
accountable for these standards being followed throughout the organisation.
The Plexure Code of Ethics (the “Code”) is fundamental to the way that Plexure Group Limited (“Plexure”
or the “Company”) does business and it is published on our website. The purpose of the Code is to
ensure high standards of ethical conduct. The Code aims to achieve this purpose by the use of principles
that provide guidance on appropriate standards and conduct. As the Code and the principles set out in it
cannot capture every situation that might arise, Plexure personnel are requested to assess actions and
decisions against the backdrop of the principles and spirit of the Code and always seek to act consistently
with that. The Code has been approved by the board of directors (the “Board”) of Plexure.
Recommendation 1.2 Financial dealing policy
An issuer should have a financial product dealing policy which applies to employees and directors.
Plexure is committed to financial integrity and to ensuring compliance with all regulatory market
requirements at all times. Plexure’s Securities Trading Policy is a critical part of this commitment and of
ensuring every member of the Plexure team is aware of their obligations and legal requirements for trading
in Plexure securities. All of Plexure’s policies are owned by the board or a board delegate and are regularly
reviewed. The Plexure Securities Trading Policy was last reviewed in July 2018.
Principle 2: Board composition and Performance
To ensure an effective board, there should be a balance of independence, skills, knowledge, experience
and perspectives.”
Recommendation 2.1 Written Board Charter
The board of an issuer should operate under a written charter which sets out the roles and responsibilities
of the board. The board charter should clearly distinguish and disclose the respective roles and
responsibilities of the board and management.”
The Plexure Board Charter sets out how the board exercises and discharges its powers and
responsibilities, including through committees established by the board. The Charter defines and
prescribes the relationship between the board, the CEO, and the executive team.
The Board has statutory responsibility for the affairs and activities of the Company, which in practice is
achieved through delegation to the Chief Executive Officer of the day-to-day leadership and management
of the Company.
( 42 ) PLEXURE 2019 ANNUAL REPORT
NZX Governance Report
For the Year Ended 31 March 2019
Recommendation 2.2 Nominating and appointing directors to the board.
Every issuer should have a procedure for the nomination and appointment of directors to the board.
Plexure’s procedures for the nomination and appointment of directors are covered by the remuneration
committee. One third of the Directors stand for re-election at each AGM (as per the Board Charter). From
time to time Plexure will seek new Directors for its Board. The potential candidates are recruited based
on the specific skill set they can bring to the Board. The candidate will be interviewed by the Chair and a
sub-committee of the Board. They will be subject to checks on their character, education, criminal and
bankruptcy history.
Recommendation 2.3 Written agreements with each director
“An issuer should enter into written agreements with each newly appointed director establishing the terms
of their appointment.”
Plexure’s Directors enter in to a written agreement establishing the terms of their appointment, including
Plexure’s expectations for the role of director.
Recommendation 2.4 Information on directors
“Every issuer should disclose information about each director in its annual report or on its website,
including a profile of experience, length of service, independence and ownership interests.”
Profiles of each director’s experience can be found on the website.
Phil Norman
Chair – Independent
23 August 2012 (6 years, 7 months)
Brian Russell
Independent
27 Oct 2017 (1 year, 5 months)
Craig Herbison
Executive Director
19 June 2018 (9 months)
Sharon Hunter
Independent
27 November 2015 (3 years, 4 months)
Directors disclosed the following relevant interests in shares as at 31 March 2019.
Director
Phil Norman
Beneficially
3,194,405
Associated Persons
9,362
Recommendation 2.5 Diversity Policy
“An issuer should have a written diversity policy which includes requirements for the board or a relevant
committee of the board to set measurable objectives for achieving diversity (which, at a minimum, should
address gender diversity) and to assess annually both the objectives and the entity’s progress in achieving
them. The issuer should disclose the policy or a summary of it.”
Plexure is committed to creating and maintaining an inclusive and collaborative workplace culture by
recognising the values of a diverse and skilled workforce. This commitment extends to all areas of its
business and is encompassed in Plexure’s diversity policy which is available on our website.
As at 31 March 2019, the gender balance of the Company’s directors, officers and all employees and
contractors was as follows:
( 43 ) PLEXURE 2019 ANNUAL REPORT
NZX Governance Report
For the Year Ended 31 March 2019
Female
2019
Male
Total
Female
2018
Male
Total
Directors
Executive
Employees & contractors
Total (including directors)
Percentage
1
1
14
16
22%
3
3
50
56
78%
4
4
64
72
100%
1
0
12
13
30%
4
4
22
30
70%
5
4
34
43
100%
Although the gender balance has decreased proportionately, a female member has joined our executive
team. This remains an area of focus within the company.
As at 31 March 2019, the ethnical balance of the Company’s directors, officers and all employees and
contractors was as follows:
Directors
and
Executives
2019
Employees
and
contractors
Total
Directors
and
Executives
2018
Employees
and
contractors
Total
NZ European
Asian
Middle Eastern
European
American
Total
8
-
-
-
-
8
17
38
1
5
3
64
25
38
1
5
3
72
9
-
-
-
-
9
10
20
1
2
1
34
19
20
1
2
1
43
Plexure’s Directors also believe that diversity goes beyond gender and ethnicity and that diversity is the
key to succeeding in the fast-changing world.
Recommendation 2.6 Director training
“Directors should undertake appropriate training to remain current on how to best perform their duties as
directors of an issuer.”
Plexure is committed to the ongoing development of the board however during the year ended 31 March
2019 Plexure did not organise any group training for Directors. Directors of their own accord attended
sessions on their statutory requirements.
Recommendation 2.7 Performance
“The board should have a procedure to regularly assess director, board and committee performance.”
As per Plexure’s charter the Board reviews its performance as a whole on an annual basis. Performance
reviews of individual Directors will be undertaken as required and determined by the Board. Plexure has
its next scheduled Board review in July 2019.
Recommendation 2.8 Independent Directors
“A majority of the board should be independent directors.”
The majority of Plexure’s Board of Directors consists of independent directors.
( 44 ) PLEXURE 2019 ANNUAL REPORT
NZX Governance Report
For the Year Ended 31 March 2019
Recommendation 2.9 Chair and CEO
“The Chair and the CEO should be different people.”
Plexure’s Board Charter states that the Chair is separate from the CEO. Phil Norman is the Chair of the
board at Plexure, and Craig Herbison is the CEO at Plexure.
Principle 3: Board committees
The board should use committees where this will enhance its effectiveness in key areas, while still
retaining board responsibility.”
Recommendation 3.1 Audit committee
“An issuer’s audit committee should operate under a written charter. Membership on the audit committee
should be majority independent and comprise solely of non-executive directors of the issuer. The chair of
the audit committee should not also be the chair of the board.”
Plexure’s Audit and Risk Committee (ARC) has a written charter and is made up of independent directors.
The Chair of the ARC is not the Chair of the Board.
Current members: Phil Norman, Sharon Hunter
The role of the ARC is defined in the ARC Charter. The purpose of the ARC is to provide a specific
governance focus on enterprise risks and the financial management, accounting, audit and reporting of
Plexure and its subsidiaries.
Recommendation 3.2 Employees attend audit committee
“Employees should only attend audit committee meetings at the invitation of the audit committee.”
Plexure’s employees only attend ARC meetings at the invitation of the Audit and Risk Committee. The
Chief Financial Officer and the Auditors are regular invitees to these meetings.
Recommendation 3.3 Remuneration committee
“An issuer should have a remuneration committee which operates under a written charter (unless this is
carried out by the whole board). At least a majority of the remuneration committee should be independent
directors. Management should only attend remuneration committee meetings at the invitation of the
remuneration committee”
Plexure’s Remuneration Committee has a written charter which is available on the website. Plexure’s
remuneration committee is made up of independent directors.
Current members: Phil Norman (Chair), Sharon Hunter, Brian Russell.
The remuneration committee approves performance criteria and remuneration for the CEO and
recommends incentive payment or other adjustments to CEO remuneration to the board, taking into
account the CEO’s performance review with the board.
( 45 ) PLEXURE 2019 ANNUAL REPORT
NZX Governance Report
For the Year Ended 31 March 2019
Recommendation 3.4 Nomination committee
“An issuer should establish a nomination committee to recommend director appointments to the board
(unless this is carried out by the whole board), which should operate under a written charter. At least a
majority of the nomination committee should be independent directors”
Plexure does not have a separate nomination committee. The Board as a whole undertakes the role of
nominations committee given the size of the company.
Recommendation 3.5 Other committees
“An issuer should consider whether it is appropriate to have any other board committees as standing
board committees. All committees should operate under written charters. An issuer should identify the
members of each of its committees, and periodically report member attendance.”
Plexure has no other committees.
Attendance at board meetings
Directors attended the following total number of meetings:
Phil Norman
Sharon Hunter
Brian Russell
Craig Herbison
Tim Cook
Scott Bradley
11 of 11
10 of 11
11 of 11
8 of 8
4 of 4
2 of 2
Recommendation 3.6 Protocols for takeover offer
“The board should establish appropriate protocols that set out the procedure to be followed
if there is a takeover offer for the issuer including any communication between insiders and the bidder. It
should disclose the scope of independent advisory reports to shareholders. These protocols should
include the option of establishing an independent takeover committee, and the likely composition and
implementation of an independent takeover committee.”
Plexure has a takeover protocol that has been prepared by an external advisor that outlines all the
appropriate procedures if a takeover offer has been received.
Principle 4: Reporting and disclosure
“The board should demand integrity in financial and non-financial reporting, and in the timeliness and
balance of corporate disclosures.”
Recommendation 4.1 Continuous disclosure
“An issuer’s board should have a written continuous disclosure policy.”
Plexure is committed to notifying the market through full and fair disclosure to the NZX of any material
information related to its business required by applicable listing rules. The Market Disclosure Policy
assists the Board with the need to keep Plexure’s investors and markets informed through a timely, clear
and balanced approach which communicates both positive and negative news.
Plexure has appointed its Chief Financial Officer (CFO) as the Disclosure Officer. The CEO and the
executive team are required to provide all material information to the Disclosure Officer.
( 46 ) PLEXURE 2019 ANNUAL REPORT
NZX Governance Report
For the Year Ended 31 March 2019
Recommendation 4.2 Make key documents available
“An issuer should make its code of ethics, board and committee charters and the policies recommended
in the NZX Code, together with any other key governance documents, available on its website.”
Plexure’s Code of Conduct, board and committee charters, and other policies recommended in the NZX
Code, together with other key governance documents are available on Plexure’s website.
Recommendation 4.3 Financial reporting
“Financial reporting should be balanced, clear and objective. An issuer should provide non- financial
disclosure at least annually, including considering material exposure to environmental, economic and
social sustainability risks and other key risks. It should explain how it plans to manage those risks and
how operational or non-financial targets are measured. Non financial-reporting should be informative,
include forward looking assessment, and align with key strategies and metrics monitored by the board.”
The ARC plays a central role in Plexure’s commitment to transparent reporting of its financial and non-
financial performance. The ARC Charter clearly defines the roles of the board, the ARC, the executive,
and external auditors.
Financial reporting
The executive is responsible for implementing and maintaining appropriate accounting and financial
reporting principles, policies, and internal controls designed to ensure compliance with accounting
standards and applicable laws and regulations.
Plexure’s external auditor, Deloitte, is responsible for planning and carrying out each external audit and
review in line with applicable auditing and review standards. Deloitte is accountable to shareholders
through the ARC and the board respectively. The board retains overall responsibility for financial
reporting.
The ARC makes sure that it and the full board are sufficiently informed about good-practice financial
reporting and Plexure’s operations to know whether financial reporting is fit for purpose. This means it
represents a balanced viewpoint, is factual and complete, and is effectively implemented.
Non-Financial reporting
Plexure has not adopted environmental, social and governance reporting.
Principle 5: Remuneration
“The remuneration of directors and executives should be transparent, fair and reasonable.”
Recommendation 5.1 Director remuneration
“An issuer should recommend director remuneration to shareholders for approval in a transparent
manner. Actual director remuneration should be clearly disclosed in the issuer’s annual report.”
As at the date of this annual report Plexure has not conducted an annual review of its non-executive
director fees since the company has been incorporated. Where a review indicated the pool should be
increased, this would be put to a shareholder vote by resolution at the annual shareholders meeting.
( 47 ) PLEXURE 2019 ANNUAL REPORT
NZX Governance Report
For the Year Ended 31 March 2019
Directors remuneration received in FY19
Board Fees
Salary and Bonus
Phil Norman (Chair)
Sharon Hunter
Brian Russell
50,000
35,000
35,000
-
-
-
Craig Herbison (appointed 19 June 2018) -
457,145
Tim Cook (resigned 8 August 2018)
12,425
Scott Bradley (resigned 29 May 2018)
5,832
-
-
Recommendation 5.2 Remuneration policy for directors and officers
“An issuer should have a remuneration policy for remuneration of directors and officers, which outlines
the relative weightings of remuneration components and relevant performance criteria.”
Plexure’s Board and Executive remuneration policy which is published on Plexure’s website sets out
policies which are designed to be fair, simple and transparent. It is designed to promote a high-
performance culture and to align remuneration to the development and achievement of strategies and
business objectives to create sustainable value for shareholders.
Remuneration of directors
None of the directors is entitled to any remuneration from Plexure other than directors’ fees and
reasonable travel, accommodation, and other expenses incurred in the course of performing duties or
exercising powers as directors. No directors are entitled to any retirement benefits.
Remuneration of Plexure employees including executives
Plexure provides the opportunity for the employees to receive, where performance merits, a total
remuneration package for equivalent market-matched roles. Plexure’s Remuneration Committee reviews
the annual performance appraisal outcomes for all Executive Team members, including the Chief
Executive Officer. The review takes into account external benchmarking to ensure competitiveness with
comparable market peers, along with consideration of an individual’s performance, skills, expertise and
experience.
Total remuneration is made up of three components being: fixed remuneration, short-term performance-
based cash remuneration and long-term performance-based equity remuneration.
Fixed Remuneration
Fixed remuneration consists of base salary and benefits where applicable (generally based on local
requirements).
Short-Term Incentive
Short-term incentives (STI) are at-risk payments designed to motivate and reward for performance,
typically in that financial year. The target value of an STI payment is set annually, usually as a percentage
of the executive’s base salary. The relevant percentage ranges from 20% to 50%.
( 48 ) PLEXURE 2019 ANNUAL REPORT
NZX Governance Report
For the Year Ended 31 March 2019
Long Term Incentives - Options
In August 2012, the Group established a share option plan that entitles employees to purchase shares in
the Company. In accordance with the terms of issue of the options, holders are entitled to acquire shares
at the price determined at the time the options were issued.
The granting of options is designed to align the rewards for Executive Team members with the
enhancement of shareholder value over a multi-year period. The options vest over three years and must
be exercised within five years.
The number of options granted to the Executive team is determined by the Board.
Evaluating performance
Plexure’s Executive will evaluate staff performance at year end. The board is responsible for monitoring
the performance of the CEO and the executive team against established objectives.
All of Plexure’s permanent employees, including management, have undertaken performance reviews in
2019.
Plexure’s employee remuneration tables
The data in this section relates to Plexure permanent employees only.
Plexure notes the high proportion of employees earning above $100,000 reflects Plexure’s business
model and the demand for skill staff particularly in the Technology sector.
During the period employees, including executive directors, within the Group received annualised
remuneration, termination payments and benefits which exceeded $100,000 as follows:
( 49 ) PLEXURE 2019 ANNUAL REPORT
NZX Governance Report
For the Year Ended 31 March 2019
$100-$110,000
$110-$120,000
$120-$130,000
$130-$140,000
$140-$150,000
$150-$160,000
$160-$170,000
$170-$180,000
$180-$190,000
$190-$200,000
$210-$220,000
$220-$230,000
$230-$240,000
$240-$250,000
$250-$260,000
$260-$270,000
$270-$280,000
$280-$290,000
$290-$300,000
$300-$310,000
$310-$320,000
$320-$330,000
$330-$340,000
$340-$350,000
$350-$360,000
$360-$370,000
$370-$380,000
$380-$390,000
$390-$400,000
$400-$410,000
$410-$420,000
$420-$430,000
$430-$440,000
$440-$450,000
$450-$460,000
NZ Entity
1
4
2
-
6
1
-
1
-
-
-
-
-
-
-
-
1
-
-
-
1
-
-
-
-
-
-
-
-
-
-
-
-
-
1
18
2019
Intl Entity
-
2
-
-
1
-
-
1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4
Total
1
6
2
-
7
1
-
2
-
-
-
-
-
-
-
-
1
-
-
-
1
-
-
-
-
-
-
-
-
-
-
-
-
-
1
22
NZ Entity
5
3
5
-
2
-
1
-
1
-
-
-
1
-
-
1
1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20
2018
Intl Entity
-
-
-
1
-
-
-
-
-
-
-
-
1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2
Total
5
3
5
1
2
-
1
-
1
-
-
-
2
-
-
1
1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
22
Recommendation 5.3 CEO remuneration
“An issuer should disclose the remuneration arrangements in place for the CEO in its annual report. This
should include disclosure of the base salary, short term incentives and long-term incentives and the
performance criteria used to determine performance based payments.”
In FY19, Craig had a base salary of $300,000 per annum. The base salary is reviewed annually with effect
from 1 April each year. In addition to his base salary, he may also be paid an annual Short-Term Incentive
(STI) payment with an on-target value of 50 percent of his base salary. Payment of an STI is at the board’s
discretion and is assessed in the first quarter of each financial year, based on business performance in
the previous financial year.
( 50 ) PLEXURE 2019 ANNUAL REPORT
NZX Governance Report
For the Year Ended 31 March 2019
Craig is also entitled to share options. The size of the package of options is determined by the
Remuneration Committee. For further information on the CEOs salary see the additional NZX disclosures.
Principle 6: Risk management
“Directors should have a sound understanding of the key risks faced by the business, and should regularly
verify there are appropriate processes to identify and manage these.”
Recommendation 6.1 Risk management framework
“An issuer should have a risk management framework for its business and the issuer’s board should
receive and review regular reports. A framework should also be put in place to manage any existing risks
and to report the material risks facing the business and how these are being managed.”
Plexure’s risk management policy is published on its website. Plexure has a number of risk management
policies, as well as related internal compliance systems that are designed to:
(a) optimise the return to, and protect the interests of, stakeholders;
(b) safeguard Plexure's assets and maintain its reputation;
(c) improve Plexure's operating performance; and
(d) fulfil Plexure's strategic objectives.
The risk management approach focuses on management of the following material business risks:
1. Operating risks;
2. Financial risks;
3. Organisational risks; and
4. Corporate risks.
The Board is ultimately responsible for overseeing the effectiveness of the risk management system, and
the adequacy of the internal compliance and controls, which it believes should be monitored and managed
on a continuing basis. Plexure has in place number of mechanisms and internal controls intended to
identify and manage areas of material business risk.
The Audit and Risk Committee (ARC) is responsible for oversight, monitoring, and reviews. The CEO is
responsible for promoting a culture of proactively managing risks, and reporting to the ARC.
Recommendation 6.2 Health and safety risks
“An issuer should disclose how it manages its health and safety risks and should report on their health
and safety risks, performance and management.”
Plexure has appointed an internal health and safety officer who receives appropriate training on an
ongoing basis. Plexure maintains a risk register and the Board receives an updated risk register and
report on a monthly basis at the Board meeting.
Due to the size and nature of Plexure’s business and associated health and safety risks we do not
currently report externally on Health & Safety.
( 51 ) PLEXURE 2019 ANNUAL REPORT
NZX Governance Report
For the Year Ended 31 March 2019
Principle 7: Auditors
“The board should ensure the quality and independence of the external audit process.”
Recommendation 7.1 Establish a framework
“The board should establish a framework for the issuer’s relationship with its external auditors.”
Plexure’s External Auditor Independence Policy sets out the work that the external auditor is required to
do and specifies the services that the external auditor is not permitted to do. This ensures the ability of
the auditor to carry out their role is not impaired and could not be reasonably perceived to be impaired.
All non-audit work that the external auditor performs must be approved by the Chair of the ARC. The
approval details what work is to be performed and how auditor independence and objectivity are
maintained. The policy requires that the development of local and overseas practice for other related
assurance services be continuously monitored so that Plexure’s policies comply with best practice.
Deloitte has been the external auditor of Plexure for 6 years. The tenure and reappointment procedure of
the external auditor is detailed in the External Auditor Independence Policy.
Plexure is committed to having financial reports externally audited to ensure they meet international
accounting standards.
Recommendation 7.2 External auditor attend Annual Meeting
“The external auditor should attend the issuer’s Annual Meeting to answer questions from shareholders
in relation to the audit.”
In the past, Plexure’s external auditors have attended the Annual Shareholders’ Meeting (ASM), where
they have been available to answer shareholders’ questions about the audit. Plexure expects the auditor
to attend the 2019 ASM.
Recommendation 7.3 Internal audit
“Internal audit functions should be disclosed.”
Plexure does not have an internal audit function.
Principle 8: Shareholder rights and relations
“The board should respect the rights of shareholders and foster constructive relationships with
shareholders that encourage them to engage with the issuer.”
Recommendation 8.1 Website
“An issuer should have a website where investors and interested stakeholders can access financial and
operational information and key corporate governance information about the issuer.”
The investor section of Plexure’s website contains financial and operational information and key corporate
governance information.
( 52 ) PLEXURE 2019 ANNUAL REPORT
NZX Governance Report
For the Year Ended 31 March 2019
Recommendation 8.2 Investor communications
“An issuer should allow investors the ability to easily communicate with the issuer, including providing the
option to receive communications from the issuer electronically.”
Plexure communicates with shareholders through multiple channels throughout the year: continuous
market disclosure, half-year and full-year reporting, investor roadshow meetings and an Annual
Shareholders’ Meeting.
Plexure provides and advocates for the option for investors to receive communications electronically, to
and from both Plexure and its share register.
Shareholders can directly access our CEO and CFO who respond directly to shareholder phone calls and
emails.
Recommendation 8.3 Shareholder right to vote
“Quoted equity security holders should have the right to vote on major decisions which may change the
nature of the issuer in which they are invested in.”
Major decisions that may change the nature of Plexure’s business are presented as resolutions at the
ASM and voted on by shareholders.
Recommendation 8.4 One vote per share
“Issuers should respect the principle of one vote per share and as such count votes at a meeting of
shareholders by poll”.
Plexure’s shareholders receive one vote per share, which is equal with all other shareholders.
Recommendation 8.5 Notice of Annual Meeting
“The board should ensure that the annual shareholders notice of meeting is posted on the issuer’s website
as soon as possible and at least 20 days prior to the meeting.”
Each year, the annual shareholders notice of meeting is sent to shareholders by mail and email at least
20 days before the meeting.
( 53 ) PLEXURE 2019 ANNUAL REPORT
Additional NZX Disclosure
For the Year Ended 31 March 2019
NZX Additional Reporting
1. Substantial Product Holders
Pursuant to section 280 of the Financial Markets Conduct Act 2013, the following persons had given
notice as at the balance date of 31 March 2019 that they were substantial product holders in the
Company:
Name
Forsyth Barr Custodians Limited
Allectus Capital Limited
Jarden Custodians Limited
JML Capital Limited
Sharbo Ulc
No. of Shares
17,009,671
10,583,095
9,250,000
8,650,974
7,681,095
% of Issued
Shares
13.55
8.43
7.37
6.89
6.12
2. Spread of Security Holders at 31 March 2019
Shareholders
Shares
1 – 999
1,000 – 4,999
5,000 – 9,999
10,000 – 99,999
100,000 – 499,999
500,000 – 999,999
1,000,000 and above
TOTAL
Number
3
364
203
505
99
14
19
1,207
%
0.25
30.16
16.82
41.84
8.20
1.16
1.57
100.00
Number
313
961,487
1,390,122
14,875,569
20,252,520
9,442,633
78,628,619
125,551,263
%
0.00
0.76
1.11
11.85
16.13
7.52
62.63
100.00
( 54 ) PLEXURE 2019 ANNUAL REPORT
Additional NZX Disclosure
For the Year Ended 31 March 2019
3. Twenty Largest Equity Security Holders
The names of the 20 largest holders of ordinary issued shares as at 31 March 2019 are listed below.
Top 20 Shareholders
Forsyth Barr Custodians Limited
Allectus Capital Limited
Jarden Custodians Limited
JML Capital Limited
Sharbo Ulc
HSBC Nominees (New Zealand) Limited - NZCSD
Collins Asset Management Limited
Philip John Norman
Accident Compensation Corporation
Accident Compensation Corporation - NZCSD
Jaobq Pty Limited
Forsyth Barr Custodians Limited
ASB Nominees Limited
Maarten Arnold Janssen
Lamb Equities Limited
MK 1 Trustee Limited
Wairahi Holdings Limited
Scott John Bradley
Alan Michael Turner & Tracey Maree Turner
Beena Harshavardhan Jog
4. Interests Register
No. of Issued
Ordinary
Shares
17,009,671
10,583,095
9,250,000
8,650,974
7,681,095
4,151,599
3,838,692
3,194,405
2,178,311
2,000,000
1,257,143
1,240,196
1,236,000
1,153,491
1,119,358
1,084,589
1,000,000
1,000,000
1,000,000
900,000
79,528,619
% Issued
13.55
8.43
7.37
6.89
6.11
3.31
3.06
2.54
1.73
1.59
1.00
0.99
0.98
0.92
0.89
0.86
0.80
0.80
0.80
0.72
63.35
There were no transactions between the Group and Directors during the year other than their
remuneration for Director services, and in Craig Herbison’s case for remuneration as CEO.
5. Directors’ Remuneration
Directors’ remuneration is as follows:
Phil Norman
Sharon Hunter
Brian Russell
Scott Bradley (resigned 29 May 2018)
Craig Herbison (appointed 19 June 2018)
Tim Cook (resigned 8 August 2018)
Chairman fee
Director fee
Director fee
Salary
Director fee
Salary and Benefits
Director fee
Director fee
2019
$
50,000
35,000
35,000
-
5,832
457,145
-
12,435
2018
$
50,000
35,000
16,750
193,968
11,099
170,464
-
35,000
( 55 ) PLEXURE 2019 ANNUAL REPORT
Additional NZX Disclosure
For the Year Ended 31 March 2019
6. Directors’ Equity Security Holdings
Details of director equity securities holdings as at 31 March 2019 are set out below:
Name of Director
Phil Norman
7. Share Dealing
Shares
Beneficially
3,194,405
Associated
Persons
9,362
Tim Cook (resigned 8 August 2018) sold 476,847 shares during the year ended 31 March 2019.
Scott Bradley (resigned 29 May 2018) sold 8,000,000 shares in the off-market transactions during the
year ended 31 March 2019.
8. Directors’ Loans
There were no loans from the Group to Directors.
9. Use of Company Information
The Board received no notices during the year from directors requesting to use the Group information
received in their capacity as directors which would not have been otherwise available to them.
10. Dividend
The Directors recommend that no dividend be paid in relation to ordinary shares on issue.
11. CEO’s salary
In FY19, Craig had a base salary of $300,000 per annum. The base salary is reviewed annually with effect
from 1 April each year.
In addition to his base salary, Craig may also be paid an annual Short-Term Incentive (STI) payment with
an on-target value of 50 percent of his base salary. Payment of an STI is at the board’s discretion and is
assessed in the first quarter of each financial year, based on business performance in the previous
financial year.
Craig is also entitled to share options. The size of the package of options is determined by the
Remuneration Committee. As at 31 March 2019 Craig had 3,000,000 options granted to him.
( 56 ) PLEXURE 2019 ANNUAL REPORT
Additional NZX Disclosure
For the Year Ended 31 March 2019
12. Remuneration of Auditors
Audit of the financial statements
Tax compliance services
Ancillary assurance services
2019
$’000
95
30
35
160
2018
$’000
40
23
25
88
The auditor of the Group is Deloitte Limited for the year ended 31 March 2019.
13. Donations
The Group made no donations during the year ended 31 March 2019 (2018: Nil).
14. Directors Holding Office
The names of the Directors of the Group, who held office during and since the end of the year are:
Phil Norman
Sharon Hunter
Brian Russell
Scott Bradley (resigned: May 2018)
Craig Herbison (appointed: June 2018)
Tim Cook (resigned: August 2018)
Robert Bell (appointed: April 2019)
( 57 ) PLEXURE 2019 ANNUAL REPORT
Directory
As at 31 March 2019
Company Number
244518
NZ Business Number
9429039937803
Directors
Registered Office
Postal Address
Share Registrar
Auditors
Bankers
Solicitors
Website
Phil Norman – Chairman
Sharon Hunter
Brian Russell
Scott Bradley (resigned 29 May 2018)
Craig Herbison (appointed 19 June 2018)
Tim Cook (resigned 8 August 2018)
Level 4, 37 Galway Street
Britomart
Auckland
PO Box 90722
Victoria Street West
Auckland
Computershare Investor Services Limited
Private Bag 92119
Auckland
Phone: 09 488 8700
Fax: 09 488 8787
Deloitte Limited
Private Bag 115033
Shortland Street
Auckland
ASB Bank
PO Box 35
Shortland Street
Auckland
Bell Gully
PO Box 1291
Wellington
www.plexure.com
( 58 ) PLEXURE 2019 ANNUAL REPORT