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Contents
Financial highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Letter from the CEO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Review of operations and activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Directors’ report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Auditor’s independence declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Corporate governance statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Notes to the financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Directors’ declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Independent auditor’s report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Shareholder information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
A YEAR WHERE THE FOUNDATIONS
FOR EXECUTION AGAINST THE
STRATEGIC PLAN WERE LAID.
The team delivered growth in both the Australian and US markets
and prepared the company for its July 2019 IPO .
The directors and management remain focussed on working
to achieve our growth aspirations .
QuickFee Limited | Annual Report 2019
1
Financial highlights
á15%
á70%
Australia reached a record
of $42 million of lending,
up 15% on prior year
US hit a record high of
US$8 million of lending,
up 70% on prior year
Recorded
sustained growth in lending
to legal firms, which now
represents 24% of the total
Australian loan book
Delivered
our highest pre-tax profit
of $851k in Australia
Strong growth
in the number of firms using
the QuickFee platform
109 new firms in Australia,
117 new firms in the US
Successfully
listed on the ASX on
10 July 2019, raising $13.5
million in a significantly
oversubscribed IPO
2
quickfee.com.au
Letter from the CEO
Bruce Coombes, CEO
We have moved swiftly to strengthen our US team with a
number of new additions. One of the key appointments made
in May 2019 was Richard Formoe as Chief Revenue Officer.
Richard has an outstanding track record in building sales teams
in fintech companies across the US and in the short amount
of time Richard has had with QuickFee, he has already made
a strong contribution to our US business.
We are very excited about executing our business model
and meeting the needs of the market that we are addressing.
I am pleased to share with you the key findings from this
year’s 2019 Borrower Survey, which was sent to more than
4,000 clients of accounting and law firms to provide feedback
on their experience with taking a loan from QuickFee.
These findings included:
• Over 90% of users surveyed said that the availability
of payment plans was important;
• 94% were likely to use a QuickFee payment plan option
next time they receive an invoice from their accountant
or lawyer, and
• 92% found the application process very easy.
Dear Fellow Shareholders,
The 2019 financial year has been a monumental year
for QuickFee Limited (‘QuickFee’, ‘group’ or ‘company’).
Listing on the ASX post-year end was a significant transition
for the group, but the achievements of FY 2019 should
first be acknowledged. It was a period of continued
growth and several key successes, which included:
• Sustained growth in the Australian lending book,
up 15% on the prior period, to end the year with a record
$42 million being lent to clients of professional firms;
• Recorded our best year in lending in the US, up 70% on
the prior year, to end the year at a record US$8 million
of lending;
• Recorded our highest pre-tax profit of $851,086 from
QuickFee AU;
• Continued growth in the number of firms using the
QuickFee platform, up 109 firms in Australia and up
117 firms in the US;
• Continued traction with legal firms in the Australian
market, which now represents 24% of the total Australian
loan book, and
• Successfully raised $13.5 million through the IPO on
9 July 2019, which was significantly oversubscribed.
“ WE ARE VERY EXCITED ABOUT EXECUTING OUR
BUSINESS MODEL AND MEETING THE NEEDS
OF THE MARKET THAT WE ARE ADDRESSING.”
QuickFee Limited | Annual Report 2019
3
Letter from the CEO
Continued
These findings give us further validation of the need for
our products and the ambitious growth strategy which
we are executing.
Looking forward, we have a strong focus on executing against
the growth strategy outlined in our prospectus, by investing in
our sales capabilities and marketing activities, and to rapidly
grow our loan book. I am confident that we have the right
strategy, the right leadership and the means to build a great
team. Certainly, the right market opportunities exist to build
a long term sustainable and profitable QuickFee.
I would like to take this opportunity to welcome our
Chairman, Mr Barry Lewin, to the QuickFee board. Barry is
working alongside my long-term fellow director Mr Dale
Smorgon to ensure our corporate governance reflects best
practice and that we execute well against our stated strategy.
We look forward to his valued contribution and stewardship.
I would also like to thank our team for all of their hard work
during a very busy year. Achieving record results during the
year in which we completed our successful IPO is testament
to the quality of our people. We have built a solid foundation
on the back of our proven business model and are now well
placed to execute on our growth plans in Australia and build
on our footprint and first mover advantage in the very large
addressable US market.
Sincere thanks must also go to our new shareholders for your
support. QuickFee could not take advantage of the significant
market opportunity we have without your support.
Yours sincerely,
Mr Bruce Coombes
Chief Executive Officer
LENDING BOOK
FY18 vs FY19
NUMBER OF FIRMS SIGNED
FY18 vs FY19
23.8m
600
19.6m
491
3.2m
6.5m
135
FY18
FY19
AU Book
US book in AUD
FY18
AU
US
252
FY19
4
quickfee.com.au Review of operations and activities
30 June 2019
We continued to market to and sign up law firms in Australia.
Lending to clients of law firms now represents 24% of the total
Australian loan book and includes increased lending with our
family law product. Accounting firms continue to join the group
in both Australia and the United States and our payment portal
in the US has seen significant increases in transaction volumes.
The QuickFee US business is the primary growth engine
for QuickFee Limited and the appointment of an experienced
Chief Revenue Officer during the financial year was a key
appointment which will position the US business for growth.
The group has reported a loss for the period of $1,154,932
(2018: $278,973). However, this annual report covers the period
from 1 July 2018 to 30 June 2019; the comparative period is
from 15 February 2018 to 30 June 2018 and is therefore not
directly comparable with current period results. Adjusting for
the timing differences, the increased loss is largely due to the
significant upscaling of operations by QuickFee US and the
listing costs incurred ahead of the initial public offering (IPO)
to the Australian Securities Exchange (ASX) on 9 July 2019.
Net assets amounted to $474,272 as at 30 June 2019
(2018: $2,304,895), including cash reserves of $2,781,387
(2018: $4,155,653).
The 2019 financial year has been a monumental year for
QuickFee Limited. Listing on the ASX within two weeks of
balance date was a significant transition for the group and
involved very significant effort from the team.
Notwithstanding that increased workload, the QuickFee
Limited team produced record results across many metrics:
• Australian lending grew to a record
$42 million, up 15% on the prior year;
• The US business recorded its best
year of lending up 70% on the prior
year, to end the year at US$8 million
of lending;
• Achieved our highest pre-tax profit
of $851,086 by QuickFee Australia
Pty Ltd; and
• Continued growth in the number of
firms using the QuickFee platform,
up 226 firms globally.
QuickFee Limited | Annual Report 2019
5
Directors’ report
Your directors present their report on the consolidated entity
consisting of QuickFee Limited and the entities it controlled at
the end of, or during, the year ended 30 June 2019. Throughout
the report, the consolidated entity is referred to as the group.
This directors’ report is the first for the group and covers the
period from 1 July 2018 to 30 June 2019. The comparative
period is from 15 February 2018 to 30 June 2018.
Directors and company secretary
The following persons held office as directors of QuickFee
Limited during the whole of the financial period and up to
the date of this report, except where otherwise stated:
Mr Barry Lewin, Non-Executive Chairman
(appointed 1 May 2019)
Mr Bruce Coombes, Managing Director and
Chief Executive Officer
Mr Dale Smorgon, Non-Executive Director
Mr Dean Smorgon, Non-Executive Director
(resigned 15 May 2019)
The following persons held office as company secretary of
QuickFee Limited during the whole of the financial period and
up to the date of this report, except where otherwise stated:
Mr Bruce Coombes (appointed 4 June 2018,
resigned 8 July 2019)
Mr Phillip Hains (appointed 1 May 2019)
Ms Jennifer James (appointed 12 August 2019)
Principal activities
The group has developed and generates revenue from the
QuickFee platform, allowing professional firms to accept
monthly payment plans where clients obtain finance online
from QuickFee Limited to facilitate invoice payments to the
firm in full. The group has established two separate operations:
QuickFee AU for the Australian market and QuickFee US for
the United States market.
Dividends – QuickFee Limited
No dividends were declared or paid to members for the year
ended 30 June 2019. The directors do not recommend that
a dividend be paid in respect of the financial period.
As disclosed in note 10(b) of the financial statements, dividends
of $680,000 were paid in the period ended 30 June 2019
(2018: $100,000) to the shareholders of QuickFee Australia
Pty Ltd. These dividends were paid prior to the 9 July 2019 legal
acquisition of QuickFee Australia Pty Ltd by QuickFee Limited
on IPO as disclosed in note 11 of the financial statements.
Accordingly, these dividends do not represent dividends of
QuickFee Limited and should not be interpreted as such.
Review of operations
Information on the operations and financial position of the
group and its business strategies and prospects is set out
in the review of operations and activities on page 5 of this
annual report.
Significant changes in the state of affairs
Other than the information set out in the review of operations
and activities on page 5 of this annual report, there are no
significant changes in the state of affairs that the group has
not disclosed.
Events since the end of the financial year
On 9 July 2019, QuickFee Limited undertook an IPO on the
Australian Securities Exchange (ASX) with 67,500,000 ordinary
shares issued at $0.20 each, raising $13,500,000 before
transaction costs. Many transactions were contractually
covenanted to take place upon the IPO, including:
• Completion of the acquisition by QuickFee Limited of
QuickFee AU as disclosed in note 11 of the financial
statements, resulting in the issue of 24,000,000 ordinary
shares in the QuickFee Limited and cash settlement of
3,200,000 as full consideration;
• Completion of the acquisition by QuickFee Limited of
QuickFee US as disclosed in note 11 of the financial
statements, resulting in the issue of 26,250,000 ordinary
shares in QuickFee Limited as consideration along with
provision for 9,148,630 deferred consideration shares to
be issued following satisfaction of the following milestones:
– 1/3 to be issued upon QuickFee US having successfully
contracted more than 300 firms (by number) within
24 months;
– 1/3 to be issued upon QuickFee US achieving an aggregate
value of currently held loans in excess of US$6,000,000
within 24 months, and
– 1/3 to be issued upon the aggregate value of loans
made by QuickFee US from the commencement of
QuickFee US’s operations exceeding US$15,000,000
within 24 months.
• Certain convertible loans provided by seed investors
converted into shares at an issue price of $0.10 per share
resulting in the issuance of 16,000,000 ordinary shares
in the QuickFee Limited;
• Certain loans associated with founders and a seed investor
converted into shares at an issue price of $0.20 per share
resulting in the issuance of 6,000,000 ordinary shares in the
QuickFee Limited;
6
quickfee.com.au • The grant of 800,000 shares and 3,000,000 broker options to
EverBlu Capital Pty Ltd in consideration for the termination
of their role as lead manager to the IPO. The broker options
expire on 9 July 2022 and comprise three tranches of
1,000,000 options (Class A, B and C) with exercise prices
of $0.20, $0.30 and $0.40, respectively;
• The grant of 3,000,000 executive options to Mr Bruce
Coombes. These options expire on 9 July 2023 and comprise
three tranches of 1,000,000 options (Class A, B and C) with
exercise prices of $0.30, $0.40 and $0.50, respectively.
Class A, B and C vest and become capable of exercise
12, 24 and 36 months, respectively, from their date of issue
contingent on continued employment at each vesting date;
• The grant of 5,851,370 performance rights to employees of
QuickFee US, including 2,925,685 to Mr James Drummond.
These performance rights vest upon QuickFee US having
successfully contracted more than 300 firms (by number)
within 24 months following the issue date.
On 10 September 2019, the group announced the achievement
of one of the performance milestones for deferred consideration
shares. This comprised the aggregate value of loans made
by QuickFee US from the commencement of QuickFee US’s
operations exceeding US$15,000,000 within 24 months of
listing. As a result, QuickFee Limited issued 3,049,543 shares
to the vendors of QuickFee US.
No other matter or circumstance has arisen since 30 June 2019
that has significantly affected the group’s operations, results or
state of affairs, or may do so in future years.
Likely developments and expected results
of operations
Other than the information set out in the review of operations
and activities on page 5 of this annual report, there are no
likely developments or details on the expected results of
operations that the group has not disclosed.
Environmental regulation
The group is not affected by any significant environmental
regulation in respect of its operations.
Information on directors
The following information is current as at the date of this report.
Mr Barry Lewin
Non-Executive Chairman (MBA, B.Com, LLB)
Experience and expertise
Mr Barry Lewin is the Founder and Managing Director of
Melbourne based corporate advisory firm SLM Corporate
Pty Limited, and has significant experience advising public
and private companies on transaction structuring, debt and
equity issues, mergers, acquisitions, business sales and all
aspects of corporate governance. Prior to establishing SLM
Corporate in 1999, Barry spent 12 years as an in-house
counsel to a number of ASX listed companies.
Date of appointment
1 May 2019
Other current directorships (listed)
• Non-Executive Chairman of ELMO Software Limited
(ASX:ELO), since 10 October 2018
• Non-Executive Chairman of Praemium Limited (ASX:PPS),
since 12 May 2017
Former directorships in last 3 years (listed)
None
Special responsibilities
• Chair of the audit and risk committee
• Member of the remuneration and nomination committee
Interests in securities
Ordinary shares
791,000
Deferred consideration shares
Options
Performance rights
–
–
–
QuickFee Limited | Annual Report 2019
7
Directors’ report
Continued
Mr Bruce Coombes
Managing Director and Chief Executive Officer
(B.Bus, Member – AICPA)
Experience and expertise
Mr Bruce Coombes qualified as a Chartered Accountant
in 1985 and has spent his entire career within or providing
solutions to the accounting profession. Previously a partner
in the accounting firm, Macquarie Partners (now part of
Deloitte), Bruce introduced outsourcing as a solution for
Australian accounting firms. The business he created,
Accountants Resourcing, was ultimately acquired by
a major financial institution.
Bruce is a founder of both QuickFee AU and QuickFee US.
Date of appointment
4 June 2018
Other current directorships (listed)
None
Former directorships in last 3 years (listed)
None
Special responsibilities
• Chief Executive Officer
• Member of the audit and risk committee
Mr Dale Smorgon
Non-Executive Director (B.Com)
Experience and expertise
Mr Dale Smorgon has held senior executive positions in a range
of companies over the past 20 years, including more than 10
years with Inmatrix, acquired in 2010 by SunGard Data Systems
(now FIS). Inmatrix delivered credit risk analytics and software
solutions to major financial institutions and professional firms
in Australia and the United States. Dale has been a director of
QuickFee AU since 1 June 2012 and provides his experience
and important strategic direction to the business.
Dale is currently the Chief Executive Officer of Innovative
Retail Pty Ltd, which delivers premium family entertainment
experiences within shopping malls.
Date of appointment
15 February 2018
Other current directorships (listed)
None
Former directorships in last 3 years (listed)
None
Special responsibilities
• Member of the audit and risk committee
• Member of the remuneration and nomination committee
• Chair of the remuneration and nomination committee
Interests in securities
Ordinary shares
Deferred consideration shares
Options
Performance rights
Interests in securities
Ordinary shares
Deferred consideration shares
Options
21,399,818
2,439,635
3,000,000
–
Performance rights
21,399,817
2,439,634
–
–
8
quickfee.com.au Company secretary
The joint company secretaries are Mr Phillip Hains and Ms Jennifer James.
Mr Phillip Hains was appointed to the position on 1 May 2019. Mr Hains is a Chartered Accountant operating a specialist public practice,
‘The CFO Solution’. The CFO Solution focuses on providing back office support, financial reporting and compliance systems for listed
public companies. A specialist in the public company environment, Mr Hains has served the needs of a number of company boards and
their related committees. He has over 30 years’ experience in providing businesses with accounting, administration, compliance and
general management services. He holds a Master of Business Administration from RMIT University and a Public Practice Certificate
from the Chartered Accountants Australia and New Zealand.
Ms Jennifer James was appointed to the position on 12 August 2019. Ms James has worked in the accounting profession since
2004 and joined QuickFee AU at its inception. She was instrumental in the introduction of the group’s loan management system
and the development of its payment portal. As a reflection of her extensive knowledge of the group, in particular corporate matters,
Ms James was appointed as a joint company secretary.
Meetings of directors
The numbers of meetings of QuickFee Limited’s board of directors and of each board committee held during the year ended
30 June 2019, and the numbers of meetings attended by each director were:
FULL MEETINGS OF DIRECTORS
MEETINGS OF COMMITTEES
AUDIT
REMUNERATION
B
–
–
–
–
A
–
–
–
–
B
–
–
–
–
A
–
–
–
–
B
–
–
–
–
A
–
–
–
–
Mr Barry Lewin
Mr Bruce Coombes
Mr Dale Smorgon
Mr Dean Smorgon
A = Number of meetings attended
B = Number of meetings held during the time the director held office or was a member of the committee during the year
The directors of QuickFee Limited approved a number of IPO related resolutions but did not meet formally until after the IPO on
9 July 2019. As disclosed in note 11 of the financial statements, this was when the legal acquisition by QuickFee Limited of QuickFee
AU and QuickFee US occurred.
QuickFee Limited | Annual Report 2019
9
Directors’ report
Continued
Remuneration report (audited)
The remuneration report details the key management
personnel (KMP) remuneration arrangements for QuickFee
Limited, in accordance with the requirements of the
Corporations Act 2001 and its Regulations.
The remuneration report is set out under the following
main headings:
(a) Remuneration governance
(b) Key management personnel
(c) Human resource strategy and remuneration policy
(d) Remuneration payments and link between performance
and reward
(e) Remuneration of key management personnel
(f) Key terms of employment contracts
(g) Additional statutory information
(a) Remuneration governance
The remuneration and nomination committee is responsible for
reviewing the remuneration arrangements for the group’s
directors and executives and making recommendations to the
board. The remuneration and nomination committee has two
key functions:
• The purpose of the remuneration function is to provide
advice, recommendations and assistance to the board in
relation to the group’s remuneration policies and
remuneration packages of senior executives, executive
directors and non-executive directors.
• The purpose of the nomination function is to review and
make recommendations to the board with respect to
identifying nominees for directorships and key executive
appointments; considering the composition of the board,
ensuring that effective induction and education procedures
exist for new board appointees, key executives and senior
management; ensuring that appropriate procedures exist to
assess and review the performance of the chairman, non-
executive directors and senior executives. The responsibility
for the group’s remuneration policy rests with the full board
notwithstanding the establishment of the committee.
Further information regarding the committee’s responsibilities
is set out in the remuneration and nomination committee
charter which can be viewed at www.quickfee.com/site/
wp-content/uploads/Corporate-Governance-Plan-QuickFee-
Limited.pdf.
Key management personnel are those persons having authority
and responsibility for planning, directing and controlling the
activities of the group, directly or indirectly, including all
directors (non-executive and executive) of the group.
(b) Key management personnel
The directors and other key management personnel of the group during or since the end of the financial year were:
Non-executive directors
Mr Barry Lewin
(appointed 1 May 2019)
Mr Dale Smorgon
Executive directors
Mr Bruce Coombes
Position
Chair of the board Chair of the audit and risk committee
Member of the remuneration and nomination committee
Member of the audit and risk committee
Chair of the remuneration and nomination committee
Position
Chief Executive Officer
Member of audit and risk committee
Member of remuneration and nomination committee
Other key management personnel
Mr James Drummond
Position
Chief Operating Officer (COO)
Chief Financial Officer (CFO)
10
quickfee.com.au (c) Human resource strategy and remuneration policy
The framework encourages executive reward with the
achievement of strategic objectives and the creation of value
for shareholders, and it is considered to be based on market
best practice for the delivery of reward. The board of directors
(‘the board’) ensures that executive reward satisfies the
following key criteria for good reward governance practices:
• competitiveness and reasonableness
• acceptability to shareholders
• performance linkage and alignment of
executive compensation
• transparency
Assessing performance
The remuneration and nomination committee is responsible
for assessing performance against KPIs and determining the
STI and LTI to be paid. To assist in this assessment, the
committee receives data from independently run surveys,
but not external remuneration consultants.
Performance is monitored on an informal basis throughout
the year and a formal evaluation is performed annually.
(d) Remuneration payments and link between
performance and reward
QuickFee Limited’s remuneration strategy is designed to assist
the group achieve its corporate objectives through appropriate
fixed and performance-based remuneration as detailed below:
Executive remuneration
The group aims to reward executives based on their position
and responsibility, with a level and mix of remuneration which
has both fixed and variable components.
The executive remuneration and reward framework for the year
ended 30 June 2019 (or implemented on IPO) included:
• cash salary
• superannuation
• short-term incentives
• long-term incentives (implemented on IPO as performance
rights and share options)
The combination of these comprises the executive’s total
remuneration as detailed under ‘key terms of employment
contracts’ below.
Fixed remuneration, consisting of base salary, fees and
superannuation is reviewed annually by the remuneration
and nomination committee based on individual and business
performance, the overall performance of the group and
comparable market remunerations.
Short-term incentives (STI Plan)
QuickFee Limited has established a short-term incentive plan
under which employees may be provided with a cash bonus
for achievement against key performance metrics.
Participation in the STI Plan is determined at the discretion
of the board. Key performance metrics will generally relate to
conditions that are within the control of the employee; for
example, profit or sales targets, strategic measures or other
such conditions as the group may decide as relevant to the
specific executive role. The quantum of any reward is
determined by the board.
Amounts to be paid to employees under the STI Plan will
typically be paid after the release of full financial year audited
results, and in accordance with the annual review process.
Long-term incentives (LTI Plan)
QuickFee Limited has established a ‘Performance Rights
and Options Plan’, adopted on IPO on 9 July 2019.
Performance Rights and Options Plan (PROP Plan or Plan)
Equity incentives under the PROP Plan may be granted to
employees (or such other person that the board determines is
eligible to participate). Offers will be made at the discretion of the
board. The terms of the incentives granted under this Plan will be
determined by the board at grant and may therefore vary over
time. QuickFee Limited will regularly assess the appropriateness
of its incentive plans and may amend or replace, suspend or
cease using the Plan if considered appropriate by the board.
The Plan is intended to align the interests of the senior
executives with shareholders. Awards under the Plan can be
structured as an option to receive shares at a future date
subject to the recipient paying the exercise price (Plan Option)
or a performance right to acquire a share, subject to satisfaction
of any vesting conditions (Plan Performance Rights).
Grants under the Plan are made annually and are made to the
senior executive team and such other executives as the board
may determine from time to time. Any grants are made subject
to the ASX Listing Rules, to the extent applicable.
The group’s CEO is entitled to 3,000,000 executive options
granted on 9 July 2019. These options expire on 9 July 2023 and
comprise three tranches of 1,000,000 options (Class A,
B and C) with exercise prices of $0.30, $0.40 and $0.50,
respectively. Class A, B and C vest and become capable of
exercise 12, 24 and 36 months, respectively, from their date of
issue contingent on continued employment at each vesting date.
The group’s COO/CFO is entitled to 2,925,685 performance
rights granted on 9 July 2019. These performance rights vest
upon QuickFee US having successfully contracted more than
300 firms (by number) within 24 months following the issue date.
QuickFee Limited | Annual Report 2019
11
Directors’ report
Continued
(d) Remuneration payments and link between performance and reward (continued)
The table below details the fixed, short- and long-term incentives in relation to executive remuneration and the link to the
group’s performance.
Element
Performance measures
Strategic objective/performance link
Fixed
remuneration
The position description of each executive includes
a set of individual performance measures which
are reviewed and evaluated each financial year.
Each executives’ individual performance measures
are specifically designed to ensure alignment with
the group’s strategic plans for the year.
Remuneration is set competitively in order to:
Fixed remuneration is based on:
• Recruit: attract the best talent to QuickFee
• Role and responsibility
Limited to ensure sustainable growth
• Retain: ensure talent is not lured away
by competitors
• Capability and competencies
• Comparable market remunerations
QuickFee Limited’s performance pay consists of short- and long-term incentives which are designed to:
• Motivate: to achieve financial and non-financial corporate objectives
• Reward: create performance culture that recognises and rewards outstanding performance
• Retain: through the PROP Plan and the subsequent tenure required for options and performance
rights to vest
The personal key performance metrics of each
executive relate to conditions that are within the
control of the employee which include but are
not limited to revenue and expense targets,
strategic initiatives and such other conditions
as the group requires.
STIs are cash-based payments
Quantum of STI = % of performance relative
to an individual’s key performance metrics
Ensures each executive is held accountable
for the outcomes that are under their control.
These outcomes are designed to support the
overall group objectives.
STIs are designed to motivate individuals,
create a high-performance culture and increase
employee engagement.
Participants must be employed on vesting date
for the options or performance rights to vest.
Ensures a direct link between the LTI and
the creation of shareholder value.
Performance will be tested at the end of each
vesting period (years 1, 2, and 3) based on share
price performance.
Performance-
based
remuneration
(STIs and LTIs)
Short-term
incentive plan
(STI), being
cash award
Long-term
incentive plan
(LTI), being share
options and
performance
rights
QuickFee Limited is committed to continue evolving the key performance indicators for executives ensuring meaningful stretch
targets on which to be assessed.
12
quickfee.com.au Non-executive directors’ remuneration
Each of the non-executive directors has entered into
appointment letters with QuickFee Limited, confirming the
terms of their appointment and their roles and responsibilities.
Under the Constitution, the board decides the total
amount paid to each of the non-executive directors as
remuneration for their services as a director. However, under
the ASX Listing Rules, the total amount of fees paid to all
directors for their services (excluding, for these purposes,
the salary of any executive director) must not exceed in
aggregate in any financial year the amount fixed by the
company in general meeting.
The maximum annual aggregate directors’ fee pool limit
is $400,000 (inclusive of superannuation), adopted on
IPO of QuickFee Limited on 9 July 2019. Any change to
that aggregated annual sum needs to be approved by
shareholders. The aggregate sum does not include any
special and additional remuneration for special exertions
and additional services performed by a director as
determined appropriate by the board.
Chair and independent non-executive director, Mr Barry
Lewin’s annual director fee is $100,000 (inclusive of
superannuation), effective from his appointment to the
position on 1 May 2019. This fee also covers his role as
chair of the audit and risk committee and as member of the
remuneration and nomination committee. Mr Dale Smorgon
receives an annual fee of $65,000 per annum (inclusive of
superannuation) for his role as a non-executive director,
chair of the remuneration and nomination committee and
a member of the audit and risk committee.
Directors may also be reimbursed for expenses properly
incurred by them in connection with the affairs of the group,
including travel and other expenses in attending to the group’s
affairs. The directors’ fees do not include a commission on,
or a percentage of, profits or income.
If a director renders or is called on to perform extra services or
to make any special exertions in connection with the affairs of
the group, the board may arrange for special remuneration to
be paid to that director, either in addition to or in substitution
for that director’s remuneration set out above.
Non-executive directors do not receive performance-related
compensation, and there are no contractual redundancy
or retirement benefit schemes for non-executive directors,
other than statutory superannuation contributions.
Statutory performance indicators
We aim to align our executive remuneration to our strategic
and business objectives and the creation of shareholder
wealth. The table below shows measures of the group’s
financial performance since inception (as the business
has been established less than five years as required by the
Corporations Act 2001). However, these are not necessarily
consistent with the measures used in determining the variable
amounts of remuneration to be awarded to KMPs. As a
consequence, there may not always be a direct correlation
between the statutory key performance measures and the
variable remuneration awarded.
Loss for the period attributable to owners ($)
1,154,932
278,973
Basic loss per share (cents)
0.43
0.10
–
–
–
–
–
–
2019
2018
2017
2016
2015
The group’s earnings have remained negative since inception due to the nature of the business. No dividends have ever been
declared by QuickFee Limited. The group continues to focus on revenue growth with the objective of achieving key commercial
milestones in order to add shareholder value.
QuickFee Limited | Annual Report 2019
13
Directors’ report
Continued
(e) Remuneration of key management personnel
The table below details remuneration of key management personnel based on the policies previously discussed for the year ended
30 June 2019.
1 JULY 2018 TO 30 JUNE 2019
SHORT-TERM BENEFITS
POST-
EMPLOY-
MENT
BENEFITS
CASH
SALARY
AND FEES
$
CASH
BONUS
$
NON-
MONETARY
BENEFITS
$
OTHER1
$
SUPER-
ANNUATION
$
LONG-TERM
BENEFITS
LONG
SERVICE
LEAVE
$
Non-executive directors
Mr Barry Lewin
Mr Dale Smorgon
Mr Dean Smorgon
16,666
22,248
–
Executive directors
Mr Bruce Coombes
245,833
Other KMP
Mr James Drummond
204,508
Total KMP compensation
489,255
Notes
–
–
–
–
–
–
–
–
–
–
–
–
–
1,084
–
–
–
–
TOTAL
$
16,666
23,332
–
–
123,282
25,000
51,629
445,744
7,530
–
–
–
212,038
7,530
123,282
26,084
51,629
697,780
1. $123,282 comprises $91,667 in consulting fees and $31,615 movement in annual leave obligation. During the year ended 30 June 2019, the group engaged
Carrot Consulting Pty Limited, an entity controlled by Mr Bruce Coombes, to provide consulting services in connection with the IPO of QuickFee Limited.
These services were based on normal commercial terms and conditions and were at market rates.
14
quickfee.com.au The following table shows details of remuneration expenses of each director or other key management personnel recognised for
the period from 15 February 2018 to 30 June 2018.
15 FEBRUARY TO 30 JUNE 2018
SHORT-TERM BENEFITS
POST-
EMPLOY-
MENT
BENEFITS
CASH
SALARY
AND FEES
$
CASH
BONUS
$
NON-
MONETARY
BENEFITS
$
OTHER1
$
SUPER-
ANNUATION
$
LONG-TERM
BENEFITS
LONG
SERVICE
LEAVE
$
–
–
–
–
488
–
–
–
TOTAL
$
5,625
–
Non-executive directors
Mr Dale Smorgon
Mr Dean Smorgon
5,137
–
Executive directors
Mr Bruce Coombes
90,264
Other KMP
Mr James Drummond
29,384
Total KMP compensation
124,785
Notes
–
–
–
–
–
–
100,000
11,294
–
201,558
2,645
–
–
2,645
100,000
11,782
–
–
32,029
239,212
1. $100,000 comprises consulting fees. During the period ended 30 June 2018, the group engaged Carrot Consulting Pty Limited, an entity controlled by Mr Bruce
Coombes, to provide consulting services in connection with the IPO of QuickFee Limited. These services were based on normal commercial terms and conditions
and were at market rates.
(f) Key terms of employment contracts
Name: Mr Bruce Coombes
Title:
Managing Director and Chief Executive Officer
Details:
Base salary for the year ended 30 June 2019 of $350,000, plus statutory superannuation, to be reviewed annually by
the remuneration and nomination committee with a 3-month termination notice by either party. Contract duration
is unspecified.
Name: Mr James Drummond
Title:
Chief Operating Officer and Chief Financial Officer
Details:
Base salary for the year ended 30 June 2019 of US$150,000, effective 20 May 2019, to be reviewed annually by the
remuneration and nomination committee with immediate termination by either party. Contract duration is unspecified.
QuickFee Limited | Annual Report 2019
15
Directors’ report
Continued
(g) Additional statutory information
Relative proportions of fixed vs variable remuneration expense
The following table shows the relative proportions of remuneration that are linked to performance and those that are fixed,
based on the amounts disclosed as statutory remuneration expense on page 14 above:
NAME
FIXED REMUNERATION
AT RISK – STI
AT RISK – LTI
Non-executive
director
Mr Barry Lewin
Mr Dale Smorgon
Executive directors
Mr Bruce Coombes
Other KMP
Mr James
Drummond
2019
%
100
100
100
2018
%
–
100
100
2019
%
2018
%
2019
%
2018
%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
88
100
12
Reconciliation of options and ordinary shares held by KMP
Option holdings
BALANCE
AT START OF
THE PERIOD
GRANTED AS
REMUNERATION
EXERCISED
OTHER
CHANGES
BALANCE
AT END OF
THE PERIOD1
VESTED AND
EXERCISABLE
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2019
Options
Mr Barry Lewin
Mr Bruce Coombes
Mr Dale Smorgon
Mr James Drummond
Notes
1. Balance incorporates option holdings in the parent entity, QuickFee Limited, as at 30 June 2019. It does not incorporate holdings granted upon the IPO
on 9 July 2019 as disclosed in notes 11 and 15 of the financial statements. Please refer to the ‘information on directors’ section on pages 7 to 8 of this directors’
report for directors’ holdings as at 26 September 2019.
16
quickfee.com.au Share holdings
2019
Options
Mr Barry Lewin
Mr Bruce Coombes
Mr Dale Smorgon
Mr James Drummond
Notes
BALANCE AT
THE START OF
THE PERIOD
GRANTED AS
REMUNERATION
RECEIVED
ON EXERCISE
OF OPTIONS
OTHER
CHANGES
BALANCE
AT END OF
THE PERIOD1
–
1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1
–
–
1. Balance incorporates share holdings in the parent entity, QuickFee Limited, as at 30 June 2019. It does not incorporate holdings in QuickFee AU and
QuickFee US prior to the legal acquisition of these controlled entities by QuickFee Limited on 9 July 2019 as disclosed in notes 11 and 15 of the financial
statements. Please refer to the ‘information on directors’ section on pages 7 to 8 of this directors’ report for directors’ holdings as at 26 September 2019.
Loans provided to the group by key management personnel
NAME
Bonec Pty Limited
Carrot Consulting Pty Limited
Derida Pty Limited
Jamada Holdings Pty Limited
BALANCE AT
THE START OF
THE YEAR
$
INTEREST PAID
AND PAYABLE
FOR THE YEAR
$
BALANCE AT
THE END OF
THE YEAR
$
–
700,000
300,000
–
8,903
43,000
23,785
16,272
150,000
400,000
800,000
250,000
HIGHEST
BALANCE
DURING
THE YEAR
$
150,000
700,000
800,000
250,000
Bonec Pty Limited
An unsecured loan with Bonec Pty Limited, an entity controlled by Mr Bruce Coombes, was entered into on 26 November 2018.
Interest is charged monthly at 10% per annum and the loan converted to ordinary share capital on IPO of QuickFee Limited as
disclosed in note 15 of the financial statements.
Carrot Consulting Pty Limited
An unsecured loan with Carrot Consulting Pty Limited, an entity controlled by Mr Bruce Coombes, was entered into on 1 June 2018
with repayment expected on 31 December 2019. Interest is charged monthly at 12% per annum and the loan has a limit of $500,000.
The interest rate reduced to 8% from 1 July 2019.
QuickFee Limited | Annual Report 2019
17
Directors’ report
Continued
(g) Additional statutory information (continued)
Derida Pty Limited
An unsecured loan with Derida Pty Limited, an entity in which Mr Dale Smorgon is a 25% shareholder and director, was entered
into on 1 June 2018 with repayment expected on 31 December 2019. Interest is charged monthly at 12% per annum and the loan
has a limit of $500,000. The interest rate reduced to 8% from 1 July 2019.
A separate unsecured loan with Derida Pty Limited was entered into on 26 November 2018. Interest is charged monthly at
10% per annum and the loan converted to ordinary share capital on IPO of QuickFee Limited as disclosed in note 15 of the
financial statements.
Jamada Holdings Pty Limited
An unsecured loan with Jamada Holdings Pty Limited, an entity controlled by Mr Bruce Coombes, was entered into on
26 November 2018. Interest is charged monthly at 10% per annum and the loan converted to ordinary share capital on IPO
of QuickFee Limited as disclosed in note 15 of the financial statements.
Other transactions with key management personnel
Mr Barry Lewin is the Managing Director and major shareholder of SLM Corporate Pty Limited (SLM). Prior to Mr Barry Lewin’s
appointment as Non-Executive Chairman of QuickFee Limited on 1 May 2019, the group entered into a mandate letter on
24 August 2018, pursuant to which SLM agreed to provide prospectus due diligence services, advice, guidance and oversight.
Over the eight-month term of the mandate, SLM was paid an aggregate $160,000. A further $5,000 was paid to SLM for valuation
services rendered. These services were based on normal commercial terms and conditions and were at market rates.
Aggregate amounts of other transactions with key management personnel of QuickFee Limited:
FROM
15 FEBRUARY TO
30 JUNE 2018
$
30 JUNE 2019
$
Amounts recognised as expense
Consulting services rendered by SLM Corporate Pty Limited
165,000
–
THIS CONCLUDES THE REMUNERATION REPORT, WHICH HAS BEEN AUDITED.
18
quickfee.com.au Shares under option, performance rights and deferred shares
(a) Unissued ordinary shares
Unissued ordinary shares of QuickFee Limited under option at the date of this report are as follows:
DATE GRANTED
2019-07-09 (deferred consideration shares)
2019-07-09 (performance rights)
2019-07-09 (Class A broker options)
2019-07-09 (Class B broker options)
2019-07-09 (Class C broker options)
2019-07-09 (Class A executive options)
2019-07-09 (Class B executive options)
EXPIRY DATE
2021-07-09
2021-07-09
2022-07-09
2022-07-09
2022-07-09
2023-07-09
2023-07-09
EXERCISE
PRICE
($)
nil
nil
0.20
0.30
0.40
0.30
0.40
NUMBER
UNISSUED
9,148,630
5,851,370
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
2019-07-09 (Class C executive options)
2023-07-09
0.50
1,000,000
Total
21,000,000
No holder has any right under the options/performance rights/deferred shares to participate in any other share issue of
QuickFee Limited or any other entity.
(b) Shares issued on the exercise of options
No ordinary shares of QuickFee Limited were issued during the year ended 30 June 2019 on the exercise of options granted.
Insurance of officers and indemnities
(a) Insurance of officers
During the financial year, QuickFee Limited has not otherwise paid a premium in respect of a contract to insure the directors
and officers of QuickFee Limited against a liability to the extent permitted by the Corporations Act 2001.
(b) Indemnity of auditors
QuickFee Limited has agreed to indemnify their auditors, William Buck Audit (Vic) Pty Ltd, to the extent permitted by law,
against any claim by a third party arising from QuickFee Limited’s breach of their agreement. The indemnity stipulates that
QuickFee Limited will meet the full amount of any such liabilities including a reasonable amount of legal costs.
Proceedings on behalf of QuickFee Limited
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of
QuickFee Limited, or to intervene in any proceedings to which QuickFee Limited is a party, for the purpose of taking responsibility
on behalf of QuickFee Limited for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of QuickFee Limited with leave of the Court under section 237 of the
Corporations Act 2001.
QuickFee Limited | Annual Report 2019
19
Directors’ report
Continued
Non-audit services
QuickFee Limited may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s
expertise and experience with the group are important.
Details of the amounts paid or payable to the auditor (William Buck Audit (Vic) Pty Ltd) for audit and non-audit services provided
during the period are set out below.
The board of directors has considered the position and, in accordance with advice received from the audit committee, is satisfied
that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not
compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
• all non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and objectivity
of the auditor
• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics
for Professional Accountants.
During the period the following fees were paid or payable for non-audit services provided by the auditor of the parent entity,
its related practices and non-related audit firms:
William Buck Audit (Vic) Pty Ltd Australian firm:
Investigating accountant's report
Total remuneration for other assurance services
Total remuneration for non-audit services
2019
$
2018
$
9,000
9,000
9,000
–
–
–
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 21.
Rounding of amounts
The group is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the ‘rounding off’ of amounts in the directors’
report. Amounts in the directors’ report have been rounded off in accordance with the instrument to the nearest dollar.
This report is made in accordance with a resolution of directors.
Mr Barry Lewin
Non-Executive Chairman
Sydney
26 September 2019
20
quickfee.com.au Auditor’s independence declaration
QuickFee Limited | Annual Report 2019
21
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF QUICKFEE LIMITED I declare that, to the best of my knowledge and belief during the year ended 30 June 2019 there have been: — no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and — no contraventions of any applicable code of professional conduct in relation to the audit. William Buck Audit (Vic) Pty Ltd ABN 59 116 151 136 N. S. Benbow Director Dated this 26th day of September 2019 Corporate governance statement
QuickFee Limited and the board are committed to achieving and demonstrating the highest standards of corporate governance.
QuickFee Limited has reviewed its corporate governance practices against the Corporate Governance Principles and
Recommendations (3rd edition) published by the ASX Corporate Governance Council.
The 2019 corporate governance statement is dated as at 30 June 2019 and reflects the corporate governance practices in place
throughout the 2019 financial period. The 2019 corporate governance statement was approved by the board on 4 July 2019. A description
of the group’s current corporate governance practices is set out in the group’s corporate governance statement which can be
viewed at www.asx.com.au/asxpdf/20190710/pdf/446j2l2lv47zvh.pdf.
22
quickfee.com.au Financial statements
Contents
Consolidated statement of profit or loss
and other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . 24
Consolidated balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Consolidated statement of changes in equity . . . . . . . . . . . . . 26
Consolidated statement of cash flows . . . . . . . . . . . . . . . . . . . 27
Notes to the financial statements . . . . . . . . . . . . . . . . . . . . . . . . 28
Directors’ declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
These financial statements are consolidated
financial statements for the group consisting of
QuickFee Limited and its controlled entities. A list
of major controlled entities is included in note 12.
The financial statements are presented in the
Australian currency.
QuickFee Limited is a company limited by
shares, incorporated and domiciled in Australia.
Its registered office is:
Level 3, 62 Lygon Street
Carlton VIC 3053
Its principal place of business is:
QuickFee Limited
Suite 4.05, 10 Century Circuit
Baulkham Hills NSW 2153
The financial statements were authorised for
issue by the directors on 26 September 2019.
The directors have the power to amend and
reissue the financial statements.
QuickFee Limited | Annual Report 2019
QuickFee Limited | Annual Report 2019
23
23
Consolidated statement of profit or loss
and other comprehensive income
For the year ended 30 June 2019
Revenue from contracts with customers
2
5,803,170
1,493,319
NOTES
30 JUNE 2019
$
FROM
15 FEBRUARY TO
30 JUNE 2018
$
Cost of sales
Gross profit
Other income
Other gains/(losses) – net
General and administrative expenses
Selling and marketing expenses
Operating loss
Listing costs
Loss before income tax
Income tax expense
Loss for the period
Other comprehensive income
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations
Total comprehensive loss for the period
3(b)
(1,703,819)
(562,031)
3(a)
3(b)
3(b)
4,099,351
931,288
2,302
77,089
–
2,957
(2,771,845)
(802,108)
(1,802,100)
(367,902)
(395,203)
(235,765)
(525,311)
–
(920,514)
(235,765)
4
(234,418)
(43,208)
(1,154,932)
(278,973)
1,712
42,213
(1,153,220)
(236,760)
CENTS
CENTS
Loss per share for loss attributable to the ordinary equity holders
of the company:
Basic and diluted loss per share
Pro forma loss per share (based on ordinary shares post-IPO)
18
18
(0.43)
(0.01)
(0.10)
–
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
24
quickfee.com.au Consolidated balance sheet
As at 30 June 2019
ASSETS
Current assets
Cash and cash equivalents
Loan receivables
Other receivables
Other current assets
Total current assets
Non-current assets
Loan receivables
Property, plant and equipment
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Loan settlements outstanding
Trade and other payables
Contract liabilities
Borrowings
Current tax liabilities
Employee benefit obligations
Total current liabilities
Non-current liabilities
Borrowings
Deferred tax liabilities
Employee benefit obligations
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Other reserves
Accumulated losses
Total equity
NOTES
2019
$
2018
$
5(a)
5(b)
2,781,387
4,155,653
29,457,833
22,353,816
60,722
240,152
3,791
111,398
32,540,094
26,624,658
599,229
23,790
39,516
125,199
787,734
271,318
8,439
–
114,177
393,934
33,327,828
27,018,592
4,315,530
3,056,739
605,033
150,773
186,530
81,478
27,036,877
18,957,670
157,046
78,417
86,247
–
32,343,676
22,368,664
5(b)
5(b)
5(c)
2(b)
5(d)
5(d)
434,222
2,339,428
–
75,658
5,605
–
509,880
2,345,033
32,853,556
24,713,697
474,272
2,304,895
6(a)
6(b)
2,644,252
2,641,655
43,925
42,213
(2,213,905)
(378,973)
474,272
2,304,895
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
QuickFee Limited | Annual Report 2019
25
Consolidated statement of changes in equity
For the year ended 30 June 2019
ATTRIBUTABLE TO OWNERS OF QUICKFEE LIMITED
CONTRIBUTED
EQUITY
$
OTHER
RESERVES
$
ACCUMULATED
LOSSES
$
NOTES
Balance at 30 June 2018
2,641,655
42,213
(378,973)
2,304,895
Balance at 15 February 2018
Loss for the period
Other comprehensive income
Total comprehensive income/(loss)
for the period
Transactions with owners in their capacity
as owners:
Common control transaction
Dividends paid to controlled entity’s
shareholders
Balance at 1 July 2018
Loss for the period
Other comprehensive income
Total comprehensive income/(loss)
for the period
Transactions with owners in their capacity
as owners:
Contributions of equity
Transaction costs arising on future share issues
Dividends paid to controlled entity’s
shareholders
6(a)
6(a)
10(b)
TOTAL
EQUITY
$
1
1
–
–
–
–
–
–
(278,973)
(278,973)
42,213
–
42,213
42,213
(278,973)
(236,760)
6(a),
11
10(b)
2,641,654
–
2,641,654
–
–
–
–
2,641,654
(100,000)
(100,000)
(100,000)
2,541,654
ATTRIBUTABLE TO OWNERS OF QUICKFEE LIMITED
CONTRIBUTED
EQUITY
$
OTHER
RESERVES
$
ACCUMULATED
LOSSES
$
NOTES
TOTAL
EQUITY
$
2,641,655
42,213
(378,973)
2,304,895
–
–
–
120,000
(117,403)
–
2,597
–
(1,154,932)
(1,154,932)
1,712
–
1,712
1,712
(1,154,932)
(1,153,220)
–
–
–
–
–
–
120,000
(117,403)
(680,000)
(680,000)
(680,000)
(677,403)
Balance at 30 June 2019
2,644,252
43,925
(2,213,905)
474,272
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
26
quickfee.com.au
Consolidated statement of cash flows
For the year ended 30 June 2019
Cash flows from operating activities
Interest, fees and charges from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Loan principal advanced to customers, net of repayments
Finance costs paid
Income taxes paid
NOTES
30 JUNE 2019
$
FROM
15 FEBRUARY TO
30 JUNE 2018
$
6,181,472
1,633,878
(4,932,373)
(1,083,796)
(6,305,847)
(2,657,882)
(1,538,904)
(471,649)
(208,739)
(42,043)
Net cash (outflow) from operating activities
7(a)
(6,804,391)
(2,621,492)
Cash flows from investing activities
Payments for property, plant and equipment
(19,122)
(11,896)
Proceeds from common control transaction (cash acquired)
11
–
1,850,695
Interest received from financial institutions
Net cash (outflow) inflow from investing activities
Cash flows from financing activities
Proceeds from issues of shares
1,633
–
(17,489)
1,838,799
6(a)
120,000
–
Proceeds from borrowings, net of repayments
6,060,965
5,047,055
Dividends paid to controlled entity’s shareholders
10(b)
(680,000)
(100,000)
Net cash inflow from financing activities
Net (decrease) increase in cash and cash equivalents
5,500,965
4,947,055
(1,320,915)
4,164,362
Cash and cash equivalents at the beginning of the financial period
4,155,653
–
Effects of exchange rate changes on cash and cash equivalents
(53,351)
(8,709)
Cash and cash equivalents at end of period
5(a)
2,781,387
4,155,653
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
QuickFee Limited | Annual Report 2019
27
Notes to the financial statements
For the year ended 30 June 2019
Contents
1
2
Segment information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Revenue from contract with customers . . . . . . . . . . . . . . 30
3 Other income and expense items . . . . . . . . . . . . . . . . . . . 32
4
5
6
7
8
9
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Financial assets and financial liabilities . . . . . . . . . . . . . . 34
Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Cash flow information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Critical estimates and judgements . . . . . . . . . . . . . . . . . . 40
Financial risk management . . . . . . . . . . . . . . . . . . . . . . . . . 40
10 Capital management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
11 Common control transaction . . . . . . . . . . . . . . . . . . . . . . . 44
12
Interests in other entities . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
13 Contingent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
14 Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
15 Events occurring after the reporting period . . . . . . . . . . 46
16 Related party transactions . . . . . . . . . . . . . . . . . . . . . . . . . 47
17 Remuneration of auditors . . . . . . . . . . . . . . . . . . . . . . . . . . 48
18 Loss per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
19 Parent entity financial information . . . . . . . . . . . . . . . . . . 49
20 Summary of significant accounting policies . . . . . . . . . . 50
2828
quickfee.com.auquickfee.com.au 1 Segment information
(a) Description of segments and principal activities
The group has identified its operating segments based on the internal reports that are reviewed and used by the executive
management team, consisting of the Chief Executive Officer and the Chief Financial Officer. Management examines the group’s
performance from a geographic perspective and has identified two reportable segments of its business:
• Australia: this part of the business developed the QuickFee platform for Australian firms allowing them to accept monthly
payment plans where clients obtain finance online from QuickFee AU to facilitate invoice payments to the firm in full.
• United States: following the success of QuickFee AU in the Australian market, management of QuickFee AU incorporated
QuickFee US as an entirely separate operation to pursue opportunities in the much larger market in the United States where
no direct competitor exists.
(b) Financial breakdown
The segment information for the reportable segments for the year ended 30 June 2019 is as follows:
2019
AUSTRALIA
$
UNITED STATES
$
UNALLOCATED
$
TOTAL
$
Revenue from contracts with customers
4,279,418
1,523,752
Cost of sales
Gross profit
Other income
Other gains/(losses) – net
(1,285,362)
(418,457)
2,994,056
1,105,295
–
–
669
–
1,633
77,089
–
–
–
5,803,170
(1,703,819)
4,099,351
2,302
77,089
General and administrative expenses
(1,320,341)
(1,000,869)
(450,635)
(2,771,845)
Selling and marketing expenses
(822,629)
(979,471)
–
(1,802,100)
Operating profit/(loss)
851,086
(874,376)
(371,913)
(395,203)
Listing costs
Income tax expense
–
(234,418)
–
–
(525,311)
(525,311)
–
(234,418)
Profit/(loss) for the year
616,668
(874,376)
(897,224)
(1,154,932)
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
24,538,168
8,778,216
11,444
33,327,828
24,538,168
8,778,216
11,444
33,327,828
22,718,483
9,782,509
352,564
32,853,556
22,718,483
9,782,509
352,564
32,853,556
QuickFee Limited | Annual Report 2019
29
Notes to the financial statements
Continued
1 Segment information (continued)
The segment information for the reportable segments for the period ended 30 June 2018 is as follows:
2018
AUSTRALIA
$
UNITED STATES
$
UNALLOCATED
$
Revenue from contracts with customers
1,238,454
254,865
Cost of sales
Gross profit
(473,213)
(88,818)
765,241
166,047
–
–
–
TOTAL
$
1,493,319
(562,031)
931,288
Other gains/(losses) – net
–
–
2,957
2,957
General and administrative expenses
(398,984)
(259,162)
(143,962)
(802,108)
Selling and marketing expenses
(210,661)
(157,241)
–
(367,902)
Operating profit/(loss)
Income tax expense
155,596
(250,356)
(141,005)
(235,765)
(43,208)
–
–
(43,208)
Profit/(loss) for the period
112,388
(250,356)
(141,005)
(278,973)
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
20,978,556
5,388,997
651,039
27,018,592
20,978,556
5,388,997
651,039
27,018,592
19,054,641
5,659,056
19,054,641
5,659,056
–
–
24,713,697
24,713,697
2 Revenue from contract with customers
(a) Disaggregation of revenue from contracts with customers
The group derives revenue from the transfer of services over time and at a point in time in the following major streams:
2019
Timing of revenue recognition
At a point in time
Over time
INTEREST
REVENUE
$
APPLICATION
FEE REVENUE
$
MERCHANT
FEE REVENUE
$
PLATFORM FEE
REVENUE
$
OTHER
REVENUE
$
TOTAL
$
–
–
122,892
159,502
25,972
308,366
4,538,754
679,982
–
276,068
–
5,494,804
4,538,754
679,982
122,892
435,570
25,972
5,803,170
30
quickfee.com.au 2018
Timing of revenue recognition
INTEREST
REVENUE
$
APPLICATION
FEE REVENUE
$
MERCHANT
FEE REVENUE
$
PLATFORM FEE
REVENUE
$
OTHER
REVENUE
$
TOTAL
$
At a point in time
Over time
–
–
27,544
1,186,750
166,423
–
26,268
73,810
1,569
55,381
10,955
1,437,938
1,186,750
166,423
27,544
100,078
12,524
1,493,319
(b) Liabilities related to contracts with customers
Contract liabilities – deferred revenue
Total current contract liabilities
2019
$
150,773
150,773
2018
$
81,478
81,478
(i) Revenue recognised in relation to contract liabilities
The following table shows how much of the revenue recognised in the current reporting period relates to carried-forward contract
liabilities and how much relates to performance obligations that were satisfied in a prior period.
Revenue recognised that was included in the contract liability balance
at the beginning of the period
Deferred revenue
(c) Accounting policies
FROM
15 FEBRUARY TO
30 JUNE 2018
$
30 JUNE 2019
$
81,478
–
(i) Interest revenue
Revenue from interest on loans advanced is recognised over the life of the loans granted by the group to its customers as the
performance obligation is satisfied over the period loans remain outstanding. The group recognises revenue on loan receivables
using the effective interest rate method (in accordance with AASB 9 Financial Instruments), based on estimated future cash
receipts over the expected life of the financial asset. In making their judgement of estimated future cash flows and expected life
of the loan receivables balance, management have considered historical results, taking into consideration the type of customer,
the type of transaction and specifics of each arrangement and contract.
(ii) Application fee revenue
Revenue from application fees is recognised over the life of the loans granted by the group to its customers as the performance
obligation is satisfied over the period loans remain outstanding.
(iii) Merchant fee revenue
Revenue from merchant fees is recognised at a point in time when the service is performed and there are no unfulfilled service
obligations that will restrict the entitlement to receive the consideration.
(iv) Platform fee revenue
Revenue from the QSOP platform is split between joining/set up fees and recurring monthly subscription fees. Joining/set up fee
revenue is recognised at a point in time once the single performance obligation of establishing the customer onto the platform is
satisfied. Recurring monthly subscription fee revenue is recognised on a straight-line basis over the subscription term.
QuickFee Limited | Annual Report 2019
31
Notes to the financial statements
Continued
3 Other income and expense items
(a) Other gains/(losses)
Net foreign exchange gains/(losses)
(b) Breakdown of expenses by nature
Cost of sales
Credit checks and insurance
Finance costs
Platform costs
General and administrative expenses
Accounting and audit
Bad debts
Computer costs
Consulting
Depreciation
Employee benefits, excluding superannuation
Insurance
Legal
Occupancy
Recruitment and staff training
Superannuation
Travel and entertainment
Other
Selling and marketing expenses
Commissions
Employee benefits, excluding superannuation
Marketing
Superannuation
32
FROM
15 FEBRUARY TO
30 JUNE 2018
$
2,957
2,957
30 JUNE 2019
$
77,089
77,089
FROM
15 FEBRUARY TO
30 JUNE 2018
$
30 JUNE 2019
$
144,520
1,538,904
20,395
1,703,819
121,511
38,138
195,045
438,887
3,771
1,141,971
16,331
5,400
144,098
81,681
42,179
350,202
192,631
2,771,845
36,709
1,363,183
341,439
60,769
67,939
471,649
22,443
562,031
56,773
–
44,156
113,988
19,457
278,015
2,448
27,926
42,365
47,310
14,622
111,539
43,509
802,108
1,416
292,465
57,232
16,789
1,802,100
367,902
quickfee.com.au
4 Income tax expense
(a) Income tax expense
Current tax
Current tax on profits for the period
Total current tax expense
Deferred income tax
Decrease/(increase) in deferred tax assets
(Decrease)/increase in deferred tax liabilities
Total deferred tax expense/(benefit)
Income tax expense
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Loss from continuing operations before income tax expense
Tax at the Australian tax rate of 27.5% (2018: 27.5%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Accrued expenses
Blackhole expenditure (Section 40–880, ITAA 1997)
Deferred revenue
Employee leave obligations
Entertainment
Listing costs
Unrealised currency (gains)/losses
Other items
Subtotal
Difference in overseas tax rates
Tax losses and other timing differences for which no deferred tax asset is recognised
Income tax expense
FROM
15 FEBRUARY TO
30 JUNE 2018
$
30 JUNE 2019
$
279,539
279,539
54,502
54,502
(45,121)
–
–
(11,294)
(45,121)
(11,294)
234,418
43,208
FROM
15 FEBRUARY TO
30 JUNE 2018
$
30 JUNE 2019
$
(920,514)
(235,765)
(253,141)
(64,835)
72,852
(28,892)
45,086
42,371
3,714
144,461
(21,199)
121,341
126,593
(18,767)
126,592
234,418
10,008
–
(1,460)
–
430
–
(813)
82,973
26,303
(9,398)
26,303
43,208
QuickFee Limited | Annual Report 2019
33
Notes to the financial statements
Continued
4 Income tax expense (continued)
(c) Tax losses
The group does not recognise as a deferred tax asset carried forward tax losses attributed to QuickFee US and QuickFee Limited
in its capacity as parent entity (as opposed to its capacity as a group). Deferred tax assets are recognised for deductible temporary
differences only if the entities consider it is probable that future taxable amounts will be available to utilise those temporary
differences and losses. As at 30 June 2019, no deferred tax balances have been recognised in relation to these entities.
Unused tax losses available to the group are currently not known and have not been included as the group has not yet calculated
a reliable estimate of these losses.
5 Financial assets and financial liabilities
(a) Cash and cash equivalents
Current assets
Cash at bank and in hand
2019
$
2018
$
2,781,387
4,155,653
(i) Reconciliation to cash flow statement
The above figures reconcile to the amount of cash shown in the consolidated statement of cash flows at the end of the financial
period as follows:
Balances as above
Balances per statement of cash flows
2019
$
2018
$
2,781,387
4,155,653
2,781,387
4,155,653
(ii) Classification as cash equivalents
Term deposits are presented as cash equivalents if they have a maturity of three months or less from the date of acquisition and are
repayable with 24 hours notice with no loss of interest. See note 20(h) for the group’s other accounting policies on cash and cash
equivalents.
(iii) Risk exposure
The group’s maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of cash and
cash equivalents mentioned above.
34
quickfee.com.au (b) Loan receivables
Loan receivables
2019
2018
CURRENT
$
NON-CURRENT
$
TOTAL
$
CURRENT
$
NON-CURRENT
$
TOTAL
$
Gross loan receivables
30,996,705
700,655
31,697,360
23,693,305
271,318
23,964,623
Deferred interest revenue
(1,538,872)
(101,426)
(1,640,298)
(1,339,489)
–
(1,339,489)
29,457,833
599,229
30,057,062
22,353,816
271,318
22,625,134
Loan payables
Loan settlements outstanding
(4,315,530)
(4,315,530)
–
–
(4,315,530)
(3,056,739)
(4,315,530)
(3,056,739)
–
–
(3,056,739)
(3,056,739)
Net loan receivables
25,142,303
599,229
25,741,532
19,297,077
271,318
19,568,395
(i) Classification as of loan receivables
Gross written loans represent cash to be received at balance date. Deferred interest revenue represents interest accumulated
on individual loans which will be recognised as revenue in future periods using the effective interest rate method.
(ii) Recognition and measurement of loan receivables
Gross written loans are non-derivative financial assets, with fixed and determinable payments that are not quoted in an
active market. Loan receivables are initially recognised at fair value and are subsequently measured at amortised cost using
the effective interest method. Loan receivables are due for settlement at various times in line with the terms of their contracts.
(iii) Classification as of loan settlements outstanding
Loan settlements outstanding represent loans approved but yet to be settled by the group to professional firms, usually due
to the first loan instalment having not been received as cleared funds.
(iv) Recognition and measurement of loan settlements outstanding
Loan settlements outstanding are non-derivative financial liabilities, with fixed and determinable payments that are not
quoted in an active market. Loan settlements outstanding are initially recognised at fair value and are subsequently measured
at amortised cost using the effective interest method.
(v) Impairment and risk exposure
Information about the impairment of loan receivables and the company’s exposure to credit risk, foreign currency risk and interest
rate risk can be found in note 9.
(c) Trade and other payables
Trade payables
Accrued expenses
Other payables
2019
2018
CURRENT
$
NON-CURRENT
$
TOTAL
$
CURRENT
$
NON-CURRENT
$
163,821
364,814
76,398
605,033
–
–
–
–
163,821
364,814
76,398
35,982
101,536
49,012
605,033
186,530
–
–
–
–
TOTAL
$
35,982
101,536
49,012
186,530
Trade payables are unsecured and are usually paid within 30 days of recognition.
The carrying amounts of trade and other payables are considered to be the same as their fair values, due to their short-term nature.
QuickFee Limited | Annual Report 2019
35
Notes to the financial statements
Continued
5 Financial assets and financial liabilities (continued)
(d) Borrowings
2019
2018
CURRENT
$
NON-CURRENT
$
TOTAL
$
CURRENT
$
NON-CURRENT
$
TOTAL
$
Secured
Global Credit Investments (i)
4,277,770
–
4,277,770
–
2,097,145
2,097,145
Lease Collateral (ii)
18,194,860
434,222
18,629,082
15,609,621
242,283
15,851,904
Total secured borrowings
22,472,630
434,222
22,906,852
15,609,621
2,339,428
17,949,049
Unsecured
Bonec (iii)
Carrot Consulting (iv)
Convertible loans (v)
Derida (vi)
Jamada Holdings (vii)
Wingate Direct Investments (viii)
150,000
400,000
1,600,000
800,000
250,000
400,000
Other unsecured borrowings (ix)
1,112,962
Total unsecured borrowings
4,712,962
Capitalised borrowing costs
Unamortised borrowing costs
(148,715)
Total capitalised borrowing costs
(148,715)
–
–
–
–
–
–
–
–
–
–
150,000
–
400,000
700,000
1,600,000
1,480,000
800,000
300,000
250,000
–
400,000
300,000
1,112,962
676,498
4,712,962
3,456,498
(148,715)
(108,449)
(148,715)
(108,449)
–
–
–
–
–
–
–
–
–
–
–
700,000
1,480,000
300,000
–
300,000
676,498
3,456,498
(108,449)
(108,449)
Total borrowings
27,036,877
434,222
27,471,099
18,957,670
2,339,428
21,297,098
(i) Global Credit Investments Pty Ltd
The Global Credit Investments Pty Ltd (GCI) loan was entered into on 1 September 2017 and matures on 31 August 2019. The loan is
secured over certain identified receivables of QuickFee Group LLC (QuickFee US). The loan attracts interest at 10% per annum paid
monthly in arrears and has a limit of US$5,000,000. Further draw downs are at the lender’s discretion. The loan does not have an
equity conversion feature.
(ii) Lease Collateral Pty Ltd
A loan with a limit of $20,000,000 was entered into with Lease Collateral Pty Ltd. The loan attracts interest at 3.95% per annum plus
the base rate as published by the Reserve Bank of Australia. The loan matures 12 months after the date that a termination notice is
sent by either party. As at the date of this report a termination notice had not been received from either party. The loan is secured
over the QuickFee Australia Pty Ltd loan book and does not have an equity conversion feature.
There is an established business practice for partial repayments following receipt of funds from the group’s loan customers in
accordance with their loan schedule. Non-current loans represent loans whereby the loan customer is not required to repay to the
group within 12 months and thus the obligation of the group to repay these loans would also be for a longer period than 12 months.
36
quickfee.com.au (iii) Bonec Pty Limited
An unsecured loan with Bonec Pty Limited, an entity controlled by Mr Bruce Coombes, was entered into on 26 November 2018.
Interest is charged monthly at 10% per annum and the loan converted to ordinary share capital on IPO of QuickFee Limited as
disclosed in note 15. Total interest paid and payable for the year ended 30 June 2019 was $8,903.
(iv) Carrot Consulting Pty Limited
An unsecured loan with Carrot Consulting Pty Limited, an entity controlled by Mr Bruce Coombes, was entered into on 1 June 2018
with repayment expected on 31 December 2019. Interest is charged monthly at 12% per annum and the loan has a limit of $500,000.
Total interest paid and payable for the year ended 30 June 2019 was $43,000.
(v) Convertible loans
Convertible loan agreements were entered into between the group and a number of parties in the period ended 30 June 2018.
The notes converted to ordinary share capital at $0.10 each on IPO of QuickFee Limited as disclosed in note 15. The conversion
of the loan was at the discretion of the group.
(vi) Derida Pty Limited
An unsecured loan with Derida Pty Limited, an entity in which Mr Dale Smorgon is a 25% shareholder and director, was entered
into on 1 June 2018 with repayment expected on 31 December 2019. Interest is charged monthly at 12% per annum and the loan
has a limit of $500,000.
A separate unsecured loan with Derida Pty Limited was entered into on 26 November 2018. Interest is charged monthly at 10%
per annum and the loan converted to ordinary share capital on IPO of QuickFee Limited as disclosed in note 15.
For the two loans, total interest paid and payable for the year ended 30 June 2019 was $23,785.
(vii) Jamada Holdings Pty Limited
An unsecured loan with Jamada Holdings Pty Limited, an entity controlled by Mr Bruce Coombes, was entered into on
26 November 2018. Interest is charged monthly at 10% per annum and the loan converted to ordinary share capital on IPO
of QuickFee Limited as disclosed in note 15. Total interest paid and payable for the year ended 30 June 2019 was $16,272.
(viii) Wingate Direct Investments Pty Limited
An unsecured loan with Wingate Direct Investments Pty Limited, an entity associated with Mr Franco Dogliotti (director of
QuickFee Australia Pty Ltd until May 2019), was entered into on 1 June 2018 with repayment expected on 31 December 2019.
Interest is charged monthly at 12% per annum and the loan has a limit of $500,000.
(ix) Other unsecured borrowings
Other unsecured borrowings comprise loans of:
• $400,000 as at 30 June 2019 (2018: nil) entered into on 26 November 2018. Interest is charged monthly at 10% per annum and
the loan converted to ordinary share capital on IPO of QuickFee Limited as disclosed in note 15.
• US$500,000 facility limit with US$500,000 (A$715,962) drawn down as at 30 June 2019 (2018: US$500,000 or A$676,498) and
interest charged monthly at 6% per annum.
(x) Fair value
The fair values of borrowings are not materially different to their carrying amounts, since the interest payable on those borrowings
is either close to current market rates or the borrowings are of a short-term nature.
(xi) Risk exposures
Details of the group’s exposure to risks arising from current and non-current borrowings are set out in note 9.
QuickFee Limited | Annual Report 2019
37
Notes to the financial statements
Continued
6 Equity
(a) Contributed equity
Full paid ordinary shares
NOTES
6(a)(ii)
9 JULY 2019
SHARES
30 JUNE 2019
SHARES
30 JUNE 2018
SHARES
9 JULY 2019
$
30 JUNE 2019
$
30 JUNE 2018
$
QuickFee Limited
140,550,001
1
1
19,104,252
(117,402)
1
QuickFee AU
QuickFee US
–
–
729,166
700,000
2,000,000
2,000,000
–
–
2,033,827
1,913,827
727,827
727,827
6(a)(i) 140,550,001
2,729,167
2,700,001
19,104,252
2,644,252
2,641,655
(i) Movements in ordinary shares:
DETAILS
Balance at 15 February 2018
Common control transaction (2018-02-15)1
Balance at 30 June 2018
NUMBER
OF SHARES
1
TOTAL
$
1
2,700,000
2,641,654
2,700,001
2,641,655
Issue at $4.11 to employees of QuickFee Australia Pty Ltd (2019-01-23)
29,166
120,000
Less: Transaction costs arising on future share issues on IPO2
Balance at 30 June 2019
–
(117,403)
2,729,167
2,644,252
Conversion of existing QuickFee AU and QuickFee US class shares to QuickFee Limited
class shares pursuant to IPO (2019-07-09)3
47,520,834
–
Issue at $0.10 on conversion of QuickFee Limited seed loan agreements (2019-07-09)
16,000,000
1,600,000
Issue at $0.20 on conversion of QuickFee US s/holder loan agreements (2019-07-09)
6,000,000
1,200,000
Issue at $0.20 pursuant to IPO (2019-07-09)
Issue at $0.20 as consideration to broker on IPO (2019-07-09)
Balance at 9 July 20194
Notes
67,500,000
13,500,000
800,000
160,000
140,550,001
19,104,252
1. As disclosed in note 11, the deemed occurrence of the common control transaction was 15 February 2018 from an accounting perspective (notwithstanding
the IPO and legal acquisition date of 9 July 2019). The transaction value of $2,641,654 represents the net assets of the combining entities reflected at their
15 February 2018 carrying amounts. This value does not represent cash inflows of fully paid ordinary shares and should not be interpreted as such. The number
of shares is the total of the separate share registries of the combining entities (i.e. QuickFee AU and QuickFee US) as at 15 February 2018.
2. Transaction costs that would have occurred regardless of the IPO proceeding were recognised in the year ended 30 June 2019. Such costs have been prorated
between ‘listing costs’ in profit or loss and as a deduction to equity according to the ratio of new shares (relative to the overall capital structure) issued upon IPO.
3. Conversion of QuickFee AU and QuickFee US class shares to QuickFee Limited class shares incorporates the 24,000,000 ordinary shares issued as full consideration
for the acquisition of QuickFee AU and the 26,250,000 ordinary shares issued as partial consideration for the acquisition of QuickFee US on 9 July 2019 on IPO as
disclosed in note 15 (i.e. 50,250,000 shares in total). This 50,250,000 shares comprises the following line items in ‘movements in ordinary shares’ above: (a)
2,700,000 million shares as at 15 February 2018, the date of the common control transaction disclosed in note 11; (b) 29,166 shares issued
in the period ended 30 June 2018; and (c) the conversion figure of 47,250,834.
4. Balance at 9 July 2019 excludes transaction costs arising on share issues contingent on the successful completion of the IPO, principally broker underwriting
and management fees.
38
quickfee.com.au (ii) Ordinary shares
Ordinary shares entitle the holder to participate in dividends, and to share in the proceeds of winding up the company in proportion
to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon
a poll each share is entitled to one vote.
Ordinary shares have no par value and the company does not have a limited amount of authorised capital.
(b) Other reserves
The consolidated balance sheet line item ‘other reserves’ comprises the ‘foreign currency translation reserve’.
(i) Nature and purpose of other reserves
Foreign currency translation
Exchange differences arising on translation of foreign controlled entities are recognised in other comprehensive income as
described in note 20(d) and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit
or loss when the net investment is disposed of.
7 Cash flow information
(a) Reconciliation of profit/(loss) after income tax to net cash inflow (outflow) from operating activities
Loss for the period
Adjustments for
Depreciation
Interest income from financial institutions
Change in operating assets and liabilities:
Movement in loan receivables
Movement in other receivables
Movement in other operating assets
Movement in trade and other payables
Movement in other operating liabilities
NOTES
2019
$
2018
$
(1,154,932)
(278,973)
3(b)
3,771
(1,633)
19,457
–
(6,005,038)
(2,488,894)
(56,931)
107,532
(179,292)
(55,432)
301,100
288,564
120,125
(45,307)
Net cash inflow (outflow) from operating activities
(6,804,391)
(2,621,492)
QuickFee Limited | Annual Report 2019
39
Notes to the financial statements
Continued
8 Critical estimates and judgements
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual
results. Management also needs to exercise judgement in applying the group’s accounting policies.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are
more likely to be materially adjusted due to estimates and assumptions turning out to be wrong. Detailed information about each
of these estimates and judgements is included in other notes together with information about the basis of calculation for each
affected line item in the financial statements.
The areas involving significant estimates or judgements are:
• Non-recognition of carry-forward tax losses – note 4(c)
• Estimation of split between transaction costs arising on future share issues between profit or loss and equity – note 6(a)(i)
• Consolidation decisions and determination of the common control transaction – note 11.
Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including
expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under
the circumstances.
9 Financial risk management
This note explains the group’s exposure to financial risks and how these risks could affect the group’s future financial performance.
The group’s risk management is predominantly controlled by the board. The board monitors the group’s financial risk management
policies and exposures and approves substantial financial transactions. It also reviews the effectiveness of internal controls relating
to market risk, credit risk and liquidity risk.
(a) Market risk
(i) Foreign exchange risk
The group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through foreign
exchange rate fluctuations. The group is primarily exposed to changes in the United States dollar against the Australian dollar
on translation into the group’s presentation currency of controlled entity’s financial information. However, there are no material
financial assets and liabilities denominated in currencies other than the functional currency of each entity. Therefore, management
has concluded that market risk from foreign exchange fluctuation is not material.
(ii) Interest rate risk
The group is not exposed to interest rate risk on the vast majority of its financial instruments as loans and borrowings and
interest received as revenue from customers are set at fixed interest rates. The exception to this is the borrowing with Lease
Collateral Pty Ltd which has a variable component being the base rate stipulated by the Reserve Bank of Australia (RBA).
If the RBA rate moved by 0.25% it would increase/decrease the interest expense by $45,487 (2018:$39,024).
(b) Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract
obligations that could lead to a financial loss to the group.
40
quickfee.com.au (i) Risk management
The group’s customer base consists of professional service firms; typically, these firms are long established businesses.
Credit risk is managed through the maintenance of procedures, ensuring to the extent possible that firms and clients that are
counterparties to transactions are of sound credit worthiness. Both QuickFee AU and QuickFee US apply the group’s ‘credit and
collections policy’ prior to granting any loans to clients and firms in order to ensure sound and prudent lending practices are
applied. The policy sets out:
• limits for the value of loans granted to clients with respect to a firm’s annual revenue to limit risks related to a firm’s ability
to repay loans on behalf of a client, if required;
• limits for the value of loans granted to any one particular firm to limit concentration of its loan book;
• annual reviews undertaken in respect of all client loans and firms; and
• undertaking credit checks on all borrowers prior to granting loans.
To further protect the group from credit risk, firms grant to QuickFee Limited the irrevocable right to require the firm to purchase
a client loan for the outstanding amount in the event that a client defaults on an instalment payment.
Accordingly, the group is not exposed to any significant credit risk on loan receivables due to the fact that the group has recourse
against the borrowers to recover amounts in respect of unpaid invoices used as collateral for any loan granted. Historically the risk
of default has been immaterial due to the underlying professional services firms being low risk. The group also has credit insurance
to mitigate against the risk of default and there is not a significant risk of concentration.
Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating.
(ii) Impairment of financial assets
The culmination of the series of protections against credit risk identified in note 9(b)(i) above is that the identified loss allowance
as at 30 June 2019 and 30 June 2018 was determined for loan receivables to be immaterial, resulting in the non-recognition of any
expected credit losses.
While cash and cash equivalents are also subject to the impairment requirements of AASB 9, the identified impairment loss was
likewise immaterial.
(iii) Past due but not impaired
As at 30 June 2019, loan receivables of $1,274,258 (2018: $1,170,125) were past due but not impaired. These relate to a number of
independent customers for whom there is no recent history of default. The ageing analysis of these loan receivables is as follows:
1-30 days overdue
31-60 days overdue
61-90 days overdue
91+ days overdue
2019
$
1,150,509
34,754
12,007
76,988
2018
$
531,232
136,017
434,473
68,403
1,274,258
1,170,125
QuickFee Limited | Annual Report 2019
41
Notes to the financial statements
Continued
9 Financial risk management (continued)
(c) Liquidity risk
Liquidity risk arises from the possibility that the group might encounter difficulty in settling its debts or otherwise meeting
its obligations related to financial liabilities. The group manages this risk through the following mechanisms:
• preparing forward looking cash flow analyses in relation to its operating, investing and financing activities;
• obtaining funding from a variety of sources;
• maintaining a reputable credit profile;
• managing credit risk related to financial assets;
•
investing cash and cash equivalents and deposits at call with major financial institutions; and
• comparing the maturity profile of financial liabilities with the realisation profile of financial assets.
(i) Maturities of financial liabilities
The tables below analyse the group’s financial liabilities into relevant maturity groupings based on their contractual maturities. The
amounts disclosed in the table are the contractual undiscounted cash flows.
LESS THAN
12 MONTHS
$
BETWEEN
1 AND 2 YEARS
$
BETWEEN
2 AND 5 YEARS
$
OVER
5 YEARS
$
TOTAL
CONTRACTUAL
CASH FLOWS
$
CARRYING
AMOUNT
(ASSETS)/
LIABILITIES
$
CONTRACTUAL MATURITIES
OF FINANCIAL LIABILITIES
At 30 June 2019
Loan settlements outstanding
4,315,530
Trade and other payables
605,033
–
–
Borrowings
Total
At 30 June 2018
26,888,162
434,222
31,808,725
434,222
Loan settlements outstanding
3,056,739
Trade and other payables
186,530
–
–
Borrowings
Total
18,849,221
2,339,428
22,092,490
2,339,428
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4,315,530
4,315,530
605,033
605,033
27,322,384
27,322,384
32,242,947
32,242,947
3,056,739
3,056,739
186,530
186,530
21,188,649
21,188,649
24,431,918
24,431,918
42
quickfee.com.au 10 Capital management
(a) Risk management
The group’s objectives when managing capital are to:
• safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and
benefits for other stakeholders, and
• maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the group may issue new shares or reduce its capital, subject to the
provisions of the group’s constitution. The capital structure of the group consists of equity attributed to equity holders of the
group, comprising contributed equity, reserves and accumulated losses. By monitoring undiscounted cash flow forecasts and
actual cash flows provided to the board by the group’s management, the board monitors the need to raise additional equity
from the equity markets.
(b) Dividends
(i) Ordinary shares
Dividends to shareholders of QuickFee Australia Pty Ltd
FROM
15 FEBRUARY TO
30 JUNE 2018
$
30 JUNE 2019
$
680,000
100,000
Dividends of $680,000 were paid in the period ended 30 June 2019 (2018: $100,000) to the shareholders of QuickFee Australia
Pty Ltd. These dividends were paid prior to the legal acquisition of QuickFee Australia Pty Ltd by QuickFee Limited as disclosed
in note 11. Accordingly, these dividends do not represent dividends of QuickFee Limited and should not be interpreted as such.
(ii) Franked dividends
Franking credits available for subsequent reporting periods based
on a tax rate of 27.5% (2018: 27.5%)
CONSOLIDATED ENTITY
2019
$
2018
$
379,704
428,895
The above amounts are calculated from the balance of the franking account as at the end of the reporting period, adjusted for
franking credits and debits that will arise from the settlement of liabilities or receivables for income tax and dividends after the
end of the period.
The consolidated amounts include franking credits that would be available to the parent entity if distributable profits of
subsidiaries were paid as dividends.
QuickFee Limited | Annual Report 2019
43
Notes to the financial statements
Continued
11 Common control transaction
The group entered into binding acquisition agreements to acquire 100% of the issued share capital in both QuickFee Australia
Pty Ltd (QuickFee AU) and QuickFee Group LLC (QuickFee US) as described in the group structure below.
QuickFee Limited
QuickFee Group LLC
(QuickFee US)
QuickFee Australia Pty Ltd
(QuickFee AU)
QuickFee Finance LLC
(QuickFee Finance US)
QuickFee Inc
(QuickFee US Operations)
QuickFee Finance Pty Ltd
(QuickFee Finance AU)
QuickFee GCI LLC
(QuickFee GCI)
These binding agreements were subject to certain conditions including the completion of the IPO which occurred on 9 July 2019.
The transaction resulted in existing shareholders of both QuickFee AU and QuickFee US becoming shareholders of QuickFee Limited,
which is ultimately the parent entity of the group. The characteristics of this transaction are outside the scope of AASB 3 Business
Combinations due to the common control of both the acquirer and the acquirees. This also meant that the shareholder group which
controlled QuickFee Limited also effectively controlled QuickFee AU and QuickFee US from the date of the group’s incorporation.
In determining the date of common control from an accounting (as opposed to legal) perspective, the 15 February 2018
incorporation date of the parent entity was determined to be the date of the common control transaction.
Management have accounted for the combination using the ‘pooling method’ of common control as detailed below:
• Assets and liabilities (and therefore equity) of the combining entities are reflected at their carrying amounts;
• The number of ordinary shares was ascertained by combining the three separate classes of ordinary shares; that is,
the ordinary shares of QuickFee Limited, QuickFee AU and QuickFee US (refer to note 6(a) for further details);
• No adjustments have been made to reflect fair values, or recognise any new assets or liabilities, that would otherwise have been
done under the acquisition method of accounting under AASB 3. The only adjustments that have been made were to harmonise
accounting policies;
• No goodwill has been recognised as a result of the combination;
• The consolidated statement of profit or loss and other comprehensive income reflects the results of the combining entities
for the period from 1 July 2018 to 30 June 2019; and
• Comparative information has been presented reflecting the period from 15 February 2018 to 30 June 2018, with the former
representing the date of the common control transaction as outlined above.
44
quickfee.com.au 12 Interests in other entities
(a) Material controlled entities
The group’s controlled entities at 30 June 2019 are set out below. The country of incorporation or registration is also their principal
place of business.
NAME OF ENTITY
QuickFee Australia Pty Ltd
QuickFee Finance Pty Ltd
QuickFee GCI Pty Limited
QuickFee Group LLC
QuickFee Finance LLC
QuickFee GCI LLC
QuickFee Inc.
OWNERSHIP INTEREST HELD BY THE GROUP
PLACE OF
BUSINESS/COUNTRY
OF INCORPORATION
9 JULY 2019
%
30 JUNE 2019
%
30 JUNE 2018
%
Australia
Australia
Australia
United States
United States
United States
United States
100
100
100
100
100
100
100
–
–
–
–
–
–
–
–
–
–
–
–
–
–
As at 30 June 2019, legal ownership of the above mentioned controlled entities did not exist. As disclosed in note 11, the deemed
occurrence of the common control transaction was 15 February 2018 from an accounting perspective (notwithstanding the IPO
date of 9 July 2019). Accordingly, the group’s controlled entities became subsidiaries on 9 July 2019 with 100% ownership interests
held by the group at this date.
13 Contingent liabilities
The group had no material contingent liabilities at 30 June 2019 (2018: nil).
14 Commitments
(a) Non-cancellable operating leases
The group leases an office suite under a non-cancellable operating lease expiring on 31 October 2019.
Commitments for minimum lease payments in relation to non-cancellable
operating leases are payable as follows:
Within one year
Later than one year but not later than five years
2019
$
2018
$
12,837
–
38,137
12,837
12,837
50,974
QuickFee Limited | Annual Report 2019
45
Notes to the financial statements
Continued
15 Events occurring after the reporting period
On 9 July 2019, QuickFee Limited undertook an IPO on the Australian Securities Exchange (ASX) with 67,500,000 ordinary shares
issued at $0.20 each, raising $13,500,000 before transaction costs. Many transactions were contractually covenanted to take place
upon the IPO, including:
• The legal acquisition by QuickFee Limited of QuickFee AU as disclosed in note 11, resulting in the issue of 24,000,000 ordinary
shares in QuickFee Limited and cash settlement of $3,200,000 as full consideration;
• The legal acquisition by QuickFee Limited of QuickFee US as disclosed in note 11, resulting in the issue of 26,250,000 ordinary
shares in QuickFee Limited as consideration along with provision for 9,148,630 deferred consideration shares to be issued
following satisfaction of the following milestones:
– 1/3 to be issued upon QuickFee US having successfully contracted more than 300 firms (by number) within 24 months;
– 1/3 to be issued upon QuickFee US achieving an aggregate value of currently held loans in excess of US$6,000,000 within
24 months; and
– 1/3 to be issued upon the aggregate value of loans made by QuickFee US from the commencement of QuickFee US’s
operations exceeding US$15,000,000 within 24 months.
• The conversion of seed loan agreements described in note 5(d)(v) with various lenders pursuant to which the $1,600,000 was
loaned to QuickFee Limited. Such loans converted into shares at an issue price of $0.10 per share resulting in the issuance of
16,000,000 ordinary shares in the company;
• The conversion of loan agreements with QuickFee US shareholders described in notes 5(d)(iii), 5(d)(vi), 5(d)(vii) and 5(d)(ix)
pursuant to which the $1,200,000 was loaned to QuickFee Limited. Such loans converted into shares at an issue price of
$0.20 per share resulting in the issuance of 6,000,000 ordinary shares in the company;
• The grant of 800,000 shares and 3,000,000 broker options to EverBlu Capital Pty Ltd in consideration for the termination of
their role as lead manager to the IPO. These options expire on 9 July 2022 and comprise three tranches of 1,000,000 options
(Class A, B and C) with exercise prices of $0.20, $0.30 and $0.40, respectively;
• The grant of 3,000,000 executive options to Mr Bruce Coombes. These options expire on 9 July 2023 and comprise three tranches
of 1,000,000 options (Class A, B and C) with exercise prices of $0.30, $0.40 and $0.50, respectively. Class A, B and C
vest and become capable of exercise 12, 24 and 36 months, respectively, from their date of issue contingent on continued
employment at each vesting date;
• The grant of 5,851,370 performance rights to employees of QuickFee US, including 2,925,685 to Mr James Drummond.
These performance rights vest upon QuickFee US having successfully contracted more than 300 firms (by number) within
24 months following the issue date.
These transactions contingent on the IPO were adjudged to be non-adjusting subsequent events.
On 10 September 2019, the group announced the achievement of one of the performance milestones for deferred consideration
shares. This comprised the aggregate value of loans made by QuickFee US from the commencement of QuickFee US’s operations
exceeding US$15,000,000 within 24 months. As a result, QuickFee Limited issued 3,049,543 shares to the vendors of QuickFee US.
No other matter or circumstance has occurred subsequent to period end that has significantly affected, or may significantly affect,
the operations of the group, the results of those operations or the state of affairs of the group or economic entity in subsequent
financial periods.
46
quickfee.com.au 16 Related party transactions
(a) Controlled entities
Interests in controlled entities are set out in note 12(a).
(b) Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Long-term benefits
Detailed remuneration disclosures are provided in the remuneration report on pages 10 to 18.
(c) Transactions with other related parties
The following transactions occurred with related parties:
Sales and purchases of goods and services
Purchases of various goods and services from entities controlled
by key management personnel (i)
FROM
15 FEBRUARY TO
30 JUNE 2018
$
30 JUNE 2019
$
720,067
227,430
26,084
51,629
11,782
–
797,780
239,212
FROM
15 FEBRUARY TO
30 JUNE 2018
$
30 JUNE 2019
$
165,000
–
(i) Purchases from entities controlled by key management personnel
The group acquired the following services from entities that are controlled by members of the group’s key management personnel:
• Consultancy fees.
For detailed disclosures please refer to the remuneration report on pages 10 to 18.
(d) Loans to/from related parties
Loans from related parties are disclosed in note 5(d).
QuickFee Limited | Annual Report 2019
47
Notes to the financial statements
Continued
17 Remuneration of auditors
During the period the following fees were paid or payable for services provided by the auditor of the parent entity, its related
practices and non-related audit firms:
(a) William Buck Audit (Vic) Pty Ltd
(i) Audit and other assurance services
Audit and review of financial statements
Other assurance services
Investigating accountant’s report
Total remuneration for audit and other assurance services
Total auditor’s remuneration
18 Loss per share
(a) Reconciliation of loss used in calculating loss per share
2019
$
2018
$
39,909
17,205
9,000
48,909
48,909
–
17,205
17,205
FROM
15 FEBRUARY TO
30 JUNE 2018
$
30 JUNE 2019
$
Basic and diluted loss per share
Loss attributable to the ordinary equity holders of the company used in
calculating loss per share:
From continuing operations
1,154,932
278,973
(b) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator
in calculating basic and diluted loss per share
Number of ordinary shares on issue post-IPO used as the denominator in calculating
pro forma loss per share
30 JUNE 2019
NUMBER
30 JUNE 2018
NUMBER
2,712,626
2,700,001
NOTES
9 JULY 2019
NUMBER
6(a)(i)
140,550,001
48
quickfee.com.au 19 Parent entity financial information
(a) Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
Balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Shareholders’ equity
Contributed equity
Retained earnings
Loss for the period
Total comprehensive loss
2019
$
2018
$
11,444
638,431
4,618,687
3,470,616
4,630,131
4,109,047
3,152,564
1,467,392
3,152,564
1,467,392
2,524,252
2,641,655
(1,046,685)
–
1,477,567
2,641,655
1,046,685
1,046,685
–
–
(b) Guarantees entered into by the parent entity
The parent entity has not entered into any guarantees in relation to debts of its controlled entities in the period ended
30 June 2019 (2018: nil).
(c) Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2019 or 30 June 2018.
(d) Contractual commitments for the acquisition of property, plant or equipment
The parent entity has not entered into any contractual commitments for the acquisition of property, plant or equipment
in the period ended 30 June 2019 (2018: nil).
(e) Determining the parent entity financial information
The financial information for the parent entity has been prepared on the same basis as the consolidated financial statements.
QuickFee Limited | Annual Report 2019
49
Summary of significant accounting policies
Contents
(a) Basis of preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
(b) Principles of consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . 52
(c) Segment reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
(d) Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . 53
(e) Revenue recognition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(f)
Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(g) Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(h) Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(i) Loan receivables and payables . . . . . . . . . . . . . . . . . . . . . . 54
(j) Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(k) Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(l) Borrowing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
(m) Contributed equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
(n) Loss per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
(o) Rounding of amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
(p) Goods and services tax (GST) . . . . . . . . . . . . . . . . . . . . . . . 56
5050
quickfee.com.auquickfee.com.au 20 Summary of significant accounting policies
This note provides a list of the significant accounting policies adopted in the preparation of these consolidated financial statements
to the extent they have not already been disclosed in the other notes above. These policies have been consistently applied to all the
periods presented, unless otherwise stated. The financial statements are for the group consisting of QuickFee Limited and its
controlled entities.
(a) Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. QuickFee Limited is a
for-profit entity for the purpose of preparing the financial statements.
These financial statements are the first for the group and cover the period from 1 July 2018 to 30 June 2019. The comparative
period is from 15 February 2018 to 30 June 2018.
AASB 9 Financial Instruments and AASB 15 Revenue from Contracts with Customers were adopted on 15 February 2018.
(i) Compliance with IFRS
The consolidated financial statements of the QuickFee Limited group also comply with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB).
(ii) Historical cost convention
The financial statements have been prepared on a historical cost basis.
(iii) New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2019 reporting
periods and have not been early adopted by the group. The group’s assessment of the impact of these new standards and
interpretations is set out below.
Title of standard
AASB Interpretation 23 Uncertainty over Income Tax Treatment
Nature of change
Interpretation 23 clarifies the application of the recognition and measurement criteria in
AASB 112 Income Taxes where there is uncertainty over income tax treatments and requires an
assessment of each uncertain tax position as to whether it is probable that a taxation authority
will accept the position. Where it is not probable, the effect of the uncertainty will be reflected in
determining the relevant taxable profit or loss, tax bases, unused tax losses and unused tax
credits or tax rates. The amount will be determined as either the single most likely amount or
the sum of the probability weighted amounts in a range of possible outcomes, whichever better
predicts the resolution of the uncertainty. Judgements will be reassessed as and when new
facts and circumstances are presented.
Impact
The group’s existing recognition and measurement accounting policies are aligned with the
requirements of Interpretation 23 and hence no transition adjustment to retained earnings
is required.
Mandatory application
date/Date of
adoption by group
The group has adopted the standard from its mandatory adoption date of 1 July 2019.
QuickFee Limited | Annual Report 2019
51
Notes to the financial statements
Continued
20 Summary of significant accounting policies (continued)
(a) Basis of preparation (continued)
(iii) New standards and interpretations not yet adopted (continued)
Title of standard
AASB 16 Leases
Nature of change
AASB 16 was issued in February 2016. It will result in almost all leases being recognised on the
balance sheet by lessees, as the distinction between operating and finance leases is removed.
Under the new standard, an asset (the right to use the leased item) and a financial liability to pay
rentals are recognised. The only exceptions are short-term and low-value leases.
Impact
The group has reviewed all leasing arrangements in light of the new lease accounting rules in
AASB 16. The standard will affect the accounting for the group’s operating leases.
As at the reporting date, the group has non-cancellable operating lease commitments of $12,837,
see note 14(a).
The group expects to recognise right-of-use assets of approximately $11,190 on 1 July 2019
and lease liabilities of $12,706 (after adjustments for prepayments and accrued lease payments
recognised as at 30 June 2019). Overall net assets will be approximately $1,516 lower.
The group expects that net profit after tax will increase by approximately $1,516 for the year ended
30 June 2020 as a result of adopting the new rules.
Operating cash flows will increase and financing cash flows decrease by approximately $12,837
as repayment of the principal portion of the lease liabilities will be classified as cash flows from
financing activities.
Mandatory
application date/
Date of adoption by
group
The group will apply the standard from its mandatory adoption date of 1 July 2019. The group
is currently in the process of implementing the standard.
The group intends to apply the modified retrospective transition approach and will not restate
comparative amounts for the year prior to first adoption. Right-of-use assets will be measured at
the amount of the lease liability on adoption (adjusted for any prepaid or accrued lease expenses).
There are no other new standards and interpretations that are not yet effective and that would be expected to have a material
impact on the group in the current or future reporting periods and on foreseeable future transactions.
(b) Principles of consolidation
(i) Controlled entities
Controlled entities are all entities (including structured entities) over which the group has control. The group controls an entity
when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect
those returns through its power to direct the activities of the entity. Controlled entities are fully consolidated from the date on
which control is transferred to the group. They are deconsolidated from the date that control ceases.
The ‘pooling method’ of accounting is used to account for common control business combinations by the group.
Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset.
Accounting policies of controlled entities have been changed where necessary to ensure consistency with the policies
adopted by the group.
(c) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
This has been identified as the chief executive officer.
52
quickfee.com.au (d) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the group’s entities are measured using the currency of the primary economic
environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in
Australian dollar ($), which is QuickFee Limited’s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets
and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss.
Foreign exchange gains and losses that relate to borrowings are presented in the consolidated statement of profit or loss, within
finance costs. All other foreign exchange gains and losses are presented in the consolidated statement of profit or loss on a net
basis within other gains/(losses).
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date
when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part
of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as equities held
at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss and translation differences
on non-monetary assets such as equities classified as at fair value through other comprehensive income are recognised in other
comprehensive income.
(iii) Group companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that
have a functional currency different from the presentation currency are translated into the presentation currency as follows:
• assets and liabilities for each consolidated balance sheet presented are translated at the closing rate at the date of that
consolidated balance sheet
•
income and expenses for each consolidated statement of profit or loss and consolidated statement of profit or loss and
other comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the
dates of the transactions), and
• all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings
and other financial instruments designated as hedges of such investments, are recognised in other comprehensive income.
When a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange
differences are reclassified to profit or loss, as part of the gain or loss on sale.
(e) Revenue recognition
The accounting policies for the group’s revenue from contracts with customers are explained in note 2.
(f) Income tax
The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable
income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences
and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the
reporting period in the countries where the company and its controlled entities and associates operate and generate taxable
income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax
regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be
paid to the tax authorities.
QuickFee Limited | Annual Report 2019
53
Notes to the financial statements
Continued
20 Summary of significant accounting policies (continued)
(f) Income tax (continued)
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not
recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects
neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted
or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset
is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary
differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of
investments in foreign operations where the company is able to control the timing of the reversal of the temporary differences
and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where
the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the
liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly
in equity, respectively.
(g) Leases
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the group as lessee are classified
as operating leases (note 14). Payments made under operating leases (net of any incentives received from the lessor) are charged
to profit or loss on a straight-line basis over the period of the lease.
(h) Cash and cash equivalents
For the purpose of presentation in the consolidated statement of cash flows, cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months
or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value,
and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the consolidated balance sheet.
(i) Loan receivables and payables
The accounting policies for the group’s loan receivables and loan settlements outstanding (loan payables) are explained in note 5(b).
(j) Trade and other payables
These amounts represent liabilities for goods and services provided to the group prior to the end of financial period which are
unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented
as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their
fair value and subsequently measured at amortised cost using the effective interest method.
(k) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in
profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities
are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down.
In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all
of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of
the facility to which it relates.
54
quickfee.com.au The fair value of the liability portion of a convertible bond is determined using a market interest rate for an equivalent
non-convertible bond. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion
or maturity of the bonds. The remainder of the proceeds is allocated to the conversion option. This is recognised and included
in shareholders’ equity, net of income tax effects.
Borrowings are removed from the consolidated balance sheet when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred
to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit
or loss as other income or finance costs.
Where the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to extinguish all or
part of the liability (debt for equity swap), a gain or loss is recognised in profit or loss, which is measured as the difference between
the carrying amount of the financial liability and the fair value of the equity instruments issued.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for
at least 12 months after the reporting period.
(l) Borrowing costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying
asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale.
Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets
is deducted from the borrowing costs eligible for capitalisation.
Other borrowing costs are expensed in the period in which they are incurred.
(m) Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
(n) Loss per share
(i) Basic loss per share
Basic loss per share is calculated by dividing:
• the loss attributable to owners of the company, excluding any costs of servicing equity other than ordinary shares
• by the weighted average number of ordinary shares outstanding during the financial period, adjusted for bonus elements
in ordinary shares issued during the year.
(ii) Diluted loss per share
Diluted loss per share adjusts the figures used in the determination of basic loss per share to take into account:
• the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and
• the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion
of all dilutive potential ordinary shares.
(o) Rounding of amounts
The company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the ‘rounding off’ of amounts in the financial
statements. Amounts in the financial statements have been rounded off in accordance with the instrument to the nearest dollar.
QuickFee Limited | Annual Report 2019
55
Notes to the financial statements
Continued
20 Summary of significant accounting policies (continued)
(p) Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable
from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable
from, or payable to, the taxation authority is included with other receivables or payables in the consolidated balance sheet.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which
are recoverable from, or payable to the taxation authority, are presented as operating cash flows.
56
quickfee.com.au Directors’ declaration
In the directors’ opinion:
(a)
the financial statements and notes set out on pages 23 to 56 are in accordance with the Corporations Act 2001, including:
(i)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements, and
(ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2019 and of its performance
for the financial period ended on that date, and
(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable.
Note 20(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The directors have been given the declarations by the chief executive officer and chief financial officer required by section 295A
of the Corporations Act 2001.
This declaration is made in accordance with a resolution of directors.
Mr Barry Lewin
Non-Executive Chairman
Sydney
26 September 2019
QuickFee Limited | Annual Report 2019
57
Independent auditor’s report
QuickFee Limited
Independent auditor’s report to members
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of QuickFee Limited (the Company) and its controlled
entities (the Group), which comprises the consolidated statement of financial position as at
30 June 2019, the consolidated statement of profit or loss and other comprehensive
income, the consolidated statement of changes in equity and the consolidated statement of
cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies and other explanatory information, and the
directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2019 and of
its financial performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations
2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our
responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of
the Corporations Act 2001 and the ethical requirements of the Accounting Professional and
Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the
Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Other Matter
The comparative period disclosed in the financial period, being the 15th of February to the
30th of June 2018, has not been audited.
The controlled entities referred to in the notes to the financial report have been audited on
a single entity basis for the year ended 30 June 2018, for which unmodified opinions were
expressed.
58
quickfee.com.au
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
REVENUE RECOGNITION
Area of focus
Quickfee Ltd has two distinct revenue
streams material to the audit, being a) its
loan application fees and b) its loan interest
charges.
Under its revenue recognition policy, both
the application fee and underlying loan
interest are considered to be one
performance obligation, with revenue under
this performance obligation recognised over
the duration of the contract.
There is risk that revenues that are
unearned under each loan agreement are
brought forward and recognised in-advance
of this revenue recognition policy.
How our audit addressed it
Our testing concentrated on the following procedures:
— Reviewing individual loan contracts and establishing
the existence of the contract asset, comprised of the
deferred application fee and deferred interest fees;
— Vouching under a sample basis underlying loan
books to loan agreements;
— Recalculating interest and application fees (and its
subsequent release from unearned income in the
statement of financial position to income in the
statement of profit loss)
— Re-performing the 5-step revenue recognition
process as stipulated in AASB 15 to assess the
identification and treatment of performance
obligations under the loan agreements;
We also ensured that disclosures of revenue recognition
and the accounting policy thereon are appropriate in the
financial statements.
QuickFee Limited | Annual Report 2019
59
Independent auditor’s report
Continued
ACCRUAL AND CLASSIFICATION OF CONTRACTUAL UNDERTAKINGS OF THE IPO
How our audit addressed it
Costs of the IPO
— We inspected the major
contractual undertakings of the
Group to understand which
costs were and were not
contingent upon the IPO to
determine whether or not they
should be accrued in the
financial statements;
— We examined management’s
model for apportioning costs
between the profit and loss and
equity by vouching to the % of
new shares issued under IPO.
Executory contracts not yet
performed at 30 June
— We inspected these agreements
to ensure that their status, as at
30 June, was contingent upon
the fulfilment of the IPO;
With all matters, either accrued as at
30 June or non-adjusting
subsequent events, we ensure that
they were appropriately disclosed in
these financial statements.
Area of focus
On 9 July 2019, the Group completed an Initial Public
Offering (IPO), collecting $13.5 million cash (before costs).
As at 30 June 2019 the Group was contractually bound to
almost all the service providers to the IPO, these principally
being:
— Brokers;
— Corporate advisors; and
— Lawyers and accountants.
In preparing these financial statements, management
assessed that any costs that were for services rendered,
irrespective of the success of the IPO, should be accrued
as at 30 June 2019, and those costs which were contingent
upon the successful completion of the IPO, were not
recognised until the following financial year.
Management also conducted an analysis of the IPO costs
which were accrued and apportioned pro-rata between the
profit or loss or to equity according to the ratio of new
shares (relative to the overall capital structure) issued upon
IPO.
In-addition to the above costs, many transactions were
contractually covenanted to take place upon the IPO,
including the following:
— The legal acquisition by QuickFee Limited of QuickFee
Australia Pty Ltd and QuickFee Group LLC;
— The conversion of some debt instruments into equity;
and
— The grant (precipitating the subsequent issue) of a
contingent equity arrangements including performance
rights and options to senior management, consultants
and directors.
Other than the acquisition transaction (refer below), the
transactions, which completed in July 2019 were adjudged
by management to be non-adjusting subsequent events,
which were disclosed but not recognised for the year ended
30 June 2019.
60
quickfee.com.au
CONTROL OVER SUBSIDIARIES PRIOR TO THE DATE OF LEGAL ACQUISITION
Area of focus
How our audit addressed it
Management determined that QuickFee Australia
Pty Ltd and QuickFee Group LLC were subject to
common control from the date of the QuickFee
Limited’s incorporation, not withstanding that the
legal acquisition occurred on 9 July 2019. In
determining this, the Group considered that the
key shareholdings of Quickfee Pty Ltd and the
Quickfee Group LLC combined allowed the
directors representing those shareholdings (at the
time) to control the Combined Group both before
and after the acquisition and prior to the injection
of new capital into the Combined Group.
— We inspected the shareholding interests
in each entity and vouched which
shareholding parties were able to control
each entity;
— We consulted with our internal specialists
whether or not the transaction met the
definition of common control;
— We ensured that the common control
transaction was computationally correct
and brought in the net assets of the
combining entities as at that date at their
historical carrying values.
We also examined key disclosures relevant to
the common control transaction in the financial
statements.
Other Information
The directors are responsible for the other information. The other information comprises the information in
the Group’s annual report for the year ended 30 June 2019, but does not include the financial report and
the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
QuickFee Limited | Annual Report 2019
61
Independent auditor’s report
Continued
62
Auditor’s Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of these financial statements is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf This description forms part of our independent auditor’s report. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2019. In our opinion, the Remuneration Report of QuickFee Limited for the year ended 30 June 2019, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. William Buck Audit (Vic) Pty Ltd ABN: 59 116 151 136 N.S. Benbow Director Melbourne, 26 September 2019 quickfee.com.au Shareholder information
The shareholder information set out below was applicable as at 23 September 2019.
A. Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
HOLDING
1 – 1000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
There were 45 holders of less than a marketable parcel of ordinary shares.
NO. OF
HOLDERS
ORDINARY
SHARES
107
631
342
646
148
76,770
1,750,190
2,881,812
23,184,340
115,706,432
1,874
143,599,544
QuickFee Limited | Annual Report 2019
63
Shareholder information
Continued
B. Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
NAME
DERIDA PTY LIMITED
JAMADA HOLDINGS PTY LIMITED
BONEC PTY LIMITED
HTI MANAGEMENT PTY LTD
WINGATE DIRECT INVESTMENTS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
UBS NOMINEES PTY LTD
SARGON CT PTY LTD
COLUMBUS INVESTMENT SERVICES LIMITED
SUBURBAN HOLDINGS PTY LIMITED
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