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Technology
Driven Growth
Annual Report 2020
ABN 93 624 448 693
Appendix 4E
For the year ended 30 June 2020
Results for announcement to the market
Comparative period: year ended 30 June 2019
Revenue from ordinary activities
Loss from ordinary activities after tax attributable to members
Net loss for the period attributable to members
Distributions
A$
UP/DOWN
MOVEMENT %
8,489,208
3,826,550
3,826,550
Up
Up
Up
46.9%
231.3%
231.3%
No dividends have been paid or declared by QuickFee Limited for the current financial year. No dividends of QuickFee Limited
were paid for the previous financial year.
Explanation of results
The group has reported a loss for the period of $3,826,550 (2019: $1,154,932), with net assets amounting to $16,179,220
as at 30 June 2020 (2019: $474,272), including cash reserves of $14,970,488 (2019: $2,781,387).
Please refer to the ‘review of operations’ on pages 10 to 16 or further explanation of the results.
Additional information supporting the Appendix 4E disclosure requirements can be found in the review of operations and activities
and the financial statements for the year ended 30 June 2020.
Net tangible assets per security
Net tangible asset backing (per security)
30 JUNE 2020
CENTS
30 JUNE 2019
CENTS
8.04
17.48
Due to the conversion of QuickFee AU and QuickFee US shares to QuickFee Limited shares on 9 July 2019 (refer to note 8(a) of
the financial statements for further details), the net tangible asset backing per security calculated as at 30 June 2020 is not directly
comparable with the result presented as at 30 June 2019.
Changes in controlled entities
There have been no changes in controlled entities during the year ended 30 June 2020.
Other information required by Listing Rule 4.3A
Details of individual and total dividends or distributions and dividend or distribution payments
Details of any dividend or distribution reinvestment plans
Details of associates and joint venture entities
Other information
Audit
N/A
N/A
N/A
N/A
The financial statements have been audited by the group’s independent auditor without any modified opinion, disclaimer or
emphasis of matter.
Never be paid
late again.
Founded in 2009 and operating in Australia and the United States, QuickFee
offers payment and lending solutions to professional service firms.
In July 2019, QuickFee Australia and QuickFee US became wholly owned by
QuickFee Limited and completed an IPO on the ASX.
QuickFee’s fully integrated online payment platform and lending solution enables clients
to securely pay invoices up-front or over time. This ensures professional firms are paid
immediately and in full, while clients enjoy the flexibility of paying by instalment.
Contents
Our business model
Our market opportunity
Our competitive advantage
Letter from the Chair
Letter from the CEO
Review of operations and activities
Directors’ report
2
4
6
8
9
10
17
Auditor’s independence declaration
Corporate governance statement
Financial statements
Directors’ declaration
Independent auditor’s report
Shareholder information
Corporate directory
35
36
37
80
81
86
IBC
QuickFee Limited ABN 93 624 448 693
All things payments,
all things receivables
for professional
service firms.
QuickFee Limited | Annual Report 2020
1
Our business model
Smart, scaleable,
sustainable
A proven platform providing cash flow certainty
QuickFee
Firm
Paid in full & guarantees
the client’s loan
Client
Monthly loan payments
QuickFee provides financing to clients of
accountants and lawyers (professional
service firms).
QuickFee has a proven business model
with approximately 11 years operating
in Australia and four years in the US.
High credit quality as loans guaranteed
QuickFee AU maintains a credit
by professional firm.
insurance policy to mitigate against
the risk of default.
2
A platform that borrowers rate highly
90%
92%
69%
QuickFee Limited | Annual Report 2020
of users found that
accounting and law
firms offering payment
plans is very important.
of users found the
QuickFee payment
plan application very
or extremely easy.
of business users
selected monthly
payments to help
with their cashflow.
3
Our market opportunity
Significant, global
Accounting sector – estimated revenue
$20bn
AUD / 2019*
$111bn
USD / 2019*
Australian market
US market
QuickFee is the leading provider of B2B
financing solutions to the professional
services market.
Other funding providers like Prospa,
Moula are substitutes.
There remains significant opportunity to
increase the take up of this type of offering.
QuickFee has the first mover advantage
in the US market.
There is currently no direct competitor.
Other online credit providers to SMEs
are substitutes.
There is a huge market opportunity to
increase the take up of this type of offering.
4
Legal sector – estimated revenue
$21bn
AUD / 2019*
$313bn
USD / 2019*
* Source: IBISWorld.
QuickFee Limited | Annual Report 2020
5
Our competitive advantage
Being a first mover
Seizing opportunities with first mover advantage
QuickFee has first mover advantage in the
US market and is well positioned to capitalise
on this trend to online invoice payment
transactions. There is currently no direct
competitor and alternative online credit
providers to SMEs are substitutes.
The QuickFee platform allows clients of
firms utilising the platform to:
take on financing for invoices raised by the
firm; and
pay those invoices by EFT/ACH or credit card.
6
Firms can include a link to the platform on all
invoices they issue to clients and/or a link from
the firm’s website. The platform is branded
with the relevant firm’s logo.
The link transports the user to the QuickFee
platform. The platform requests information
about the client and the invoices they wish to
pay and then presents three options:
a. pay by the month in instalments using
a payment plan;
b. pay in full by EFT/ACH; or
c. pay in full by credit card.
There is a huge market opportunity to increase
the take up of this type of offering within the
accounting and legal sectors, and beyond.
Other professional services verticals like
architects, represent further opportunities.
“ I could maintain the
accountant of my choice
and free up cashflow in
my business.”
305m
US$305 million of FY20 pay in full (up-front payment)
transactions processed in the US$420 billion plus US
accounting/legal sectors.
13m
US$13.0 million of FY20 lending in US.
QuickFee Limited | Annual Report 2020
7
Letter from
the Chair
During the year we also added a number of new members
to the team, including several key new senior hires in sales,
marketing, finance and technology development. We welcome
all of these new team members.
We are certainly operating in unprecedented times, and I want
to take this opportunity to thank the entire QuickFee team,
led by Bruce, for their commitment during FY20, and in
particular over the past few months with working from
home restrictions continuing for many of our employees.
Despite the challenging environment, they are working hard
to assure our continued success.
My fellow directors and I also wish to express our sincere
appreciation to all shareholders for your support, and to
welcome our many new shareholders. We are confident you
will continue to benefit from your investment in QuickFee in
the years ahead.
Yours sincerely,
Barry Lewin
Non‑Executive Chairman
Dear Shareholders,
I am delighted to present to you QuickFee’s Annual Report
for the year ended 30 June 2020 (FY20), after an extremely
busy year following our successful IPO on the ASX on
9 July 2019 and the strongly supported follow up capital
raising in May 2020.
QuickFee provides online payment solutions for the clients
of professional services firms. We make the process of
getting paid easy for these firms, while providing their clients
with payment plans to assist with cash flow management
and ensure they have access to professional advice when
they need it most.
With a profitable and growing business in Australia, the
major focus for FY20 was to capitalise on QuickFee’s first
mover advantage in the US, where the professional services
market represents a huge opportunity for the group. I am
pleased to report that QuickFee made significant progress
on this goal, growing strongly across all key metrics.
With US professional service firms still largely using paper
invoices, we are seeing the early stages of a transition to
electronic invoicing, which was accelerated by the COVID‑19
pandemic with many clients unable to pay via cheque and
firms unable to process paper based invoicing due to working
from home restrictions. This resulted in a huge increase in
new firm sign ups. Transaction volumes on the QuickFee
platform more than doubled in a six‑week period during
March and April.
QuickFee now has 26 of the ’Top 100’ US accounting
firms signed onto the its platform, and we are
seeing this translate to record growth in lending
and transaction volumes.
We completed a strongly supported capital raising of
A$7.5 million in May, which provided additional capital
to support our growing loan book and for technology
investment. This additional capital, together with the
extension of our lending facilities in Australia and the US
announced in June, has positioned QuickFee extremely
well to continue to execute on our growth plans in both
the US and Australia, and for further investment in our
technology. We are particularly excited about our e‑invoicing
solution that we will be bringing to market shortly.
8
Letter from
the CEO
Dear Fellow Shareholders,
We continued to invest in the business over FY20.
We added to our US sales and account management teams
with a number of key hires, and also added key engineering
leads for our planned technology development. The build
of our receivables management and e-invoicing system
for the US market is underway and we expect to have our
first customers before the end of this calendar year.
An oversubscribed capital raising was undertaken in May,
which raised A$7.5 million before costs to provide additional
funding for growth in lending, as well as investment in
technology development. In addition, we increased our
Australian debt facility by A$5.0 million to A$25.0 million
and doubled the existing US debt facility to US$10.0 million,
giving us additional headroom for future growth.
Pleasingly, our resilient business model has meant we
have been able to withstand the global impact from the
COVID-19 pandemic, with teams in Australia and the
US working remotely for significant periods during the year.
I would like to take this opportunity to thank the QuickFee
team for their tireless efforts over the year and for their
contribution to our major achievements. I would also like to
thank the board of directors for their support and strategic
direction. I am grateful for the support I have from our
shareholders and I look forward to sharing our growth journey
with you in the years ahead.
Yours sincerely,
Bruce Coombes
Managing Director and
Chief Executive Officer
The 2020 financial year was another year of significant
progress for QuickFee, in which we took major steps
forward in growing our presence in the US market, as well as
further consolidating our already strong position in Australia.
Despite having to navigate a period of great uncertainty as a
result of the COVID-19 pandemic, QuickFee grew its business
across all key metrics, and achieved a number of significant
milestones, which included:
Record growth in our lending book, up 52% (vs FY19)
in the US and up 15% in Australia;
Record lending to clients of professional firms in both
the US and Australia, up 63% to US$13.0 million in the
US and up 17% to A$49.3 million in Australia;
Significant increases in US transaction values, up 137%
to US$305 million, with COVID-19 accelerating the shift
to online payments;
Significant growth in new firm signings (US at 412
active firms, up from 252 as at 30 June 2019) with 26
of the ‘Top 100’ US accounting firms now signed onto
the QuickFee platform, including a ‘Top 10’ firm;
FY20 revenue up 47% to A$8.5 million – another
record result;
Successfully completing a A$7.5 million share placement
to a range of institutions and high net wealth investors
in a very well-supported capital raising, funding QuickFee
for continued growth; and
Appointment of senior technology leaders to accelerate
our technology build.
A major focus of the business is to capitalise on our first
mover advantage in the huge professional services market
in the US. In this context, our payment plans offering continues
to see steady adoption whilst the early stages of the US
market transitioning to online payments is also driving a
significant take up of our pay in full (up-front payments)
offering. The COVID-19 pandemic is accelerating this shift.
With fewer than 20% of US accounting firms sending
all invoices electronically, compared to 56% in Australia,
we continue to see significant upside for growth in US
transactions on the QuickFee platform. Our Australian
experience tells us that the take up of online payments
drives further take up of payment plans, which is an
exciting prospect for the US operations.
QuickFee Limited | Annual Report 2020
9
Review of operations and activities
Strong growth
QuickFee delivered strong growth in revenue for the 12 months to 30 June 2020 (FY20), driven
by the accelerating momentum in the US and the steady growth in the Australian operations.
Investments in customer acquisition and technology development position the group strongly
for rapid and sustained growth over the medium term.
Profit & loss
The group reported a loss in FY20 of A$3.8 million
(FY19: loss of A$1.2 million). This result was driven by a
substantial increase in customer acquisition and research
and development (R&D) expenditures with revenues
increasing 47% to A$8.5 million, following strong growth
in both the US and Australia. The US is seeing particularly
rapid growth as QuickFee leverages its first mover advantage
in the massive US market for professional services, with its
revenues more than doubling to A$3.2 million. Contributing
to this growth was a surge in usage of QuickFee’s pay in
full (up-front) payment option since the COVID-19 lockdown
as the pandemic accelerated the shift to online payments.
This resulted in US merchant fee revenues rising 301% over
FY20 to A$1.3 million.
Customer acquisition expenses in FY20 were A$2.5 million,
up 85% on FY19, as the group continues to invest for future
growth. This investment is reflected in the growing number
of new firms signing onto the QuickFee platform and is a lead
indicator of future growth.
R&D expenditures rose 535% to A$0.7 million on the back
of a substantial increase in technology development spend.
The results of this increased spend, which will continue
through FY21, will become more evident in the coming months
as the group releases significant updates to its technology
platform and product offering. These software enhancements
will anchor QuickFee’s position as a leading player in the
professional services buy-now, pay later (BNPL) sector.
After adjusting for customer acquisition and R&D expenses,
along with one-off costs incurred from the IPO in July 2019,
the group reported an operating profit of A$185k. This highlights
the profitable underlying QuickFee business model. The Australian
operating segment reported a net profit after tax of A$865k,
with the US segment reporting a negligible A$49k loss before
customer acquisition expenses.
Minimal levels of bad debt continue across the business,
reflecting the quality of the structured lending product, the
rigorous credit process, and the Australian operation’s credit
protection insurance in place. However, with the COVID-19
pandemic presenting an uncertain environment, management
felt it prudent to reassess the group’s expected credit losses
on loan receivables. By taking a conservative forward looking
approach, this has led to a one-off increase in the impairment
provision representing approximately 1.5% of gross loan
receivables and a one-off expense to the profit and loss account.
Balance sheet
Net assets as at 30 June 2020 amounted to A$16.2 million
(FY19: A$0.5 million), including cash reserves of A$15.0 million
(FY19: A$2.8 million).
The group raised A$13.5 million before costs in a strongly
supported IPO on 9 July 2019 and our balance sheet was
further strengthened following the oversubscribed capital raising
in May 2020, which provided an additional A$7.5 million in
funding before costs for loan book growth, technology
development activities and brand building. Lending facilities
were further extended during FY20 in both the US and
Australia, by US$5.0 million and A$5.0 million, respectively.
8.5m 185k
A$185k group operating profit before customer
acquisition and R&D expenses, reflecting an underlying
profitable business model.
A$8.5 million in revenues in FY20, up 47% over FY19.
10
US business update
US lending grows rapidly
The US business grew rapidly over FY20 as we
continued to build on our first mover advantage in that
market. Lending to clients of US firms was up 63% to
US$13.0 million, with the last three quarters of FY20
generating consecutive record lending results.
The gross loan book increased by 52% over the year
to US$6.6 million as at 30 June 2020.
Early stages of huge transformation
opportunity creating accelerating
transaction volumes on QuickFee
platform
Transaction volumes and values through the US platform
continued to accelerate rapidly. The number of transactions
during FY20 were up 129% to 155k, with the value of
transactions up 137% to US$305 million. The annualised
payment portal transaction processing run rate is now
US$554 million.
US year on year lending (USD)
Transaction value (USD)
+63%
13.0m
8.0m
+137%
305m
129m
FY19
FY20
FY19
FY20
Lending book FY19 vs FY20 (USD)
Number of transactions
+52%
6.6m
4.4m
+129%
155k
68k
FY19
FY20
FY19
FY20
QuickFee Limited | Annual Report 2020
11
Review of operations and activities
Continued
US business update (continued)
AU vs US – % of invoices sent electronically
0-10%
0%
29%
10-25%
y
l
l
i
a
c
n
o
r
t
c
e
e
t
n
e
s
l
i
s
e
c
o
v
n
i
25-50%
50-75%
f
o
%
75-90%
16%
0%
10%
9%
13%
5%
13%
30%
90-100%
19%
56%
0%
20%
40%
60%
80%
100%
Source: QuickFee CSAT survey (February 2020)
% of firms
AU
US
In the US, where many firms still use paper based invoices
and payments by cheque (fewer than 20% of US accounting
firms send almost all invoices electronically, compared to
56% in Australia), the COVID-19 crisis is bringing forward
an acceleration of the move to electronic invoicing and
payment methods which is benefiting our business.
The chart below demonstrates this increase, showing
the rapid increase in US transaction values processed
from March 2020 onwards.
This represents a transformational development for
QuickFee’s business with record numbers of new firm
sign ups during FY20.
US pay in full (up-front) monthly portal transactions processed (USD)
45.5m
45.4m
46.2m
30.1m
12.7m
13.1m
14.8m
19.5m
19.0m
21.7m
17.6m
18.9m
Jul 19
Aug 19
Sep 19
Oct 19
Nov 19
Dec 19
Jan 20
Feb 20
Mar 20
Apr 20
May 20
Jun 20
12
Strong growth in new
firm signings
The US business continued to experience strong growth
in new firm sign ups, with 412 active firms signed to the
QuickFee platform as at 30 June 2020 (FY19: 252). A major
milestone was achieved with the signing of our first ‘Top 10’
US accounting firm in June. QuickFee ended FY20 with
26 firms out of the ‘Top 100’ US accounting firms signed
onto the QuickFee platform, and more than 26% of the
‘Top 400’ using QuickFee.
Number of US firms signed – FY19 vs FY20
+63%
412
252
FY19
FY20
Australian business update
Lending growth of 17% in a mature market with solid profitability
The Australian business achieved another year of strong growth. Lending was up 17% to
A$49.3 million, and the lending book grew by 15% to A$27.5 million as at 30 June 2020.
This is an excellent result in a relatively mature market, with the Australian operating segment
generating solid profitability of A$865k after tax.
AU year on year lending (AUD)
Lending book – FY19 vs FY20 (AUD)
+17%
49.3m
42.0m
+15%
27.5m
23.8m
FY19
FY20
FY19
FY20
QuickFee Limited | Annual Report 2020
13
Review of operations and activities
Continued
People and culture
Whilst newly listed, the transition from a privately owned
business has been a key focus during FY20 and QuickFee
is implementing policies, processes and a culture to attract,
retain and reward outstanding talent across all key disciplines
who can support our growth aspirations.
We have an enormous opportunity with our first mover
advantage in the massive North American professional
services market. We made a number of key hires during FY20
and we will continue to build the team, recruiting the best
talent available to assist us in executing our strategy to
become the market leader of online payment services to the
professional services markets in Australia and North America.
We are extremely proud of the QuickFee team, who met
the COVID-19 challenges, achieving record results across
all key metrics notwithstanding work from home and other
restrictions in both the US and Australia.
14
Integrated and innovative technology
Technology development remains a core focus for QuickFee. There were a number of
technology enhancements completed over FY20, as well as integrations with other platforms,
all designed to further embed QuickFee’s solution into professional service firms.
The build of our receivables management and e-invoicing
system for the US market is progressing well and we expect
to have our first customers using this by the end of this
calendar year. This is a very exciting development, particularly
in the US market, where there is expected to be strong
demand for this new functionality. The e-invoicing technology
will drive additional take-up of QuickFee’s lending products.
Outlook
Well-positioned for continued
growth
The 2020 financial year was a year of significant growth for
QuickFee following our oversubscribed IPO on 9 July 2019
and as we transitioned from a privately owned business.
Importantly, the plans implemented during FY20 position
QuickFee for continued rapid growth. The combination of a
strengthened financial position, record new firm sign ups,
technology enhancements, and investment in people, puts
QuickFee in an excellent position to continue to execute
successfully on our first mover advantage in the huge
professional services market in the US.
Our platform is highly scalable, and readily deployable into
new geographic markets where competition is low and the
professional services market is large. We will continue to
plan for entry into these adjacent geographic markets.
Timing should become clearer over the course of FY21.
In the short term, the opportunities presented by a
modernising US market, with the acceleration of the transition
to electronic invoicing and payments presents a major
opportunity for us to become the leading payment solution in
the US. We are at the very early stages of our growth and
there is much work to be done but we are confident of our
plans and our ability to achieve this objective.
QuickFee Limited | Annual Report 2020
15
Review of operations and activities
Continued
Management team
Barry Lewin
Non-Executive
Chairman
Bruce Coombes
Dale Smorgon
Chief Executive Officer
Non-Executive Director
James Drummond
Francesco Fabbrocino
Richard Formoe
Andreas Diwing
Corey Struve
Chief Operating Officer
Chief Technology
Officer
Chief Revenue Officer
Marketing Director
Financial Controller
16
Directors’ report
For the year ended 30 June 2020
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 2020. Throughout the report, QuickFee Limited is referred to as the ‘company’,
or ‘group’ when including its controlled entities comprising the consolidated entity.
This directors’ report covers the period from 1 July 2019 to 30 June 2020 (FY20). The comparative period is from 1 July 2018
to 30 June 2019 (FY19).
Directors and company secretary
The following persons held office as directors of QuickFee Limited during the whole of the financial year and up to the date
of this report, except where otherwise stated:
• Barry Lewin, Non‑Executive Chairman
• Bruce Coombes, Managing Director and Chief Executive Officer
• Dale Smorgon, Non‑Executive Director
The following persons held office as company secretary of QuickFee Limited as at 30 June 2020 and up to the date of this report:
•
Jennifer James
Principal activities
The group has developed and generates revenue from the QuickFee technology platform and fee funding lending solution,
allowing clients of professional service firms to pay invoices up‑front or over time. This ensures professional firms are paid
immediately in full, while clients enjoy the flexibility of paying by instalment.
The group has established two separate operations:
• QuickFee AU for the Australian market, established in 2009; and
• QuickFee US for the United States market, established in 2016.
Dividends – QuickFee Limited
No dividends were declared or paid to members for the year ended 30 June 2020. The directors do not recommend that a
dividend be paid in respect of FY20.
As disclosed in note 12(b) of the financial statements, dividends of A$680,000 were paid in FY19 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. Accordingly, these dividends do not represent dividends of QuickFee Limited and should not be
interpreted as such.
QuickFee Limited | Annual Report 2020
17
Directors’ report Continued
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 pages 10 to 16 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 pages 10 to 16 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 23 July 2020, the group held an extraordinary general meeting (EGM) resulting in the approval of the directors’ participation
in the May 2020 capital raising. On 30 July 2020, the group issued 1,000,000 additional fully paid ordinary shares to each of
Barry Lewin, Bruce Coombes and Dale Smorgon at A$0.21 each (A$630,000 raised in total). The terms of the directors’
participation were identical to those of the other participants in the capital raising.
At the EGM, shareholders also approved the allotment of 300,000 options to each of Barry Lewin and Dale Smorgon as
disclosed in note 17(a) of the financial statements.
No other matter or circumstance has arisen since 30 June 2020 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 pages 10 to 16 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.
18
Information on directors
The following information is current as at the date of this report.
Barry Lewin
Non‑Executive Chairman
(MBA, B.Com, LLB)
Experience and expertise
Barry Lewin is the founder and
Managing Director of Melbourne based
corporate advisory firm SLM Corporate,
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 board
Chair of the audit and risk committee
Member of the remuneration and
nomination committee
Interests in securities
Ordinary shares
Options
1,968,000
300,000
QuickFee Limited | Annual Report 2020
Bruce Coombes
Managing Director and Chief Executive
Officer (B.Bus, Member – AICPA)
Experience and expertise
Bruce Coombes qualified as a
Chartered Accountant in 1985 and
has spent his entire career within or
providing solutions to the accounting
profession. Bruce is a founder of both
QuickFee AU and QuickFee US, having
overseen the business from its start‑up
phase through to its IPO and beyond.
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.
Date of appointment
15 February 2018
Dale Smorgon
Non‑Executive Director (B.Com)
Experience and expertise
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.
Other current directorships (listed)
None
Date of appointment
15 February 2018
Former directorships in last
3 years (listed)
None
Special responsibilities
Chief Executive Officer
Member of the audit and risk committee
Member of the remuneration and
nomination committee
Interests in securities
Ordinary shares
Options
24,939,453
3,000,000
Other current directorships (listed)
None
Former directorships in last
3 years (listed)
None
Special responsibilities
Member of the audit and risk committee
Chair of the remuneration and
nomination committee
Interests in securities
Ordinary shares
Options
23,839,451
300,000
19
Directors’ report Continued
Company secretary
The company secretary is Jennifer James, appointed to the position on 12 August 2019. Jennifer 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.
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 2020, and the numbers of meetings attended by each director were:
FULL MEETINGS
OF DIRECTORS
MEETINGS OF COMMITTEES
AUDIT AND RISK
REMUNERATION
AND NOMINATION
A
12
12
12
B
12
12
12
A
3
3
3
B
3
3
3
A
1
1
1
B
1
1
1
Barry Lewin
Bruce Coombes
Dale 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
20
Remuneration report (audited)
The remuneration report details the director and other 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 https://www.quickfee.com/corporate‑governance/corporate‑governance‑plan/.
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
Barry Lewin
Dale Smorgon
Executive directors
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 (CEO)
Member of the audit and risk committee
Member of the remuneration and nomination committee
Other key management personnel
Position
James Drummond
Richard Formoe
Chief Operating Officer (COO)
Chief Revenue Officer (CRO)
QuickFee Limited | Annual Report 2020
21
Directors’ report Continued
(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
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; and
•
transparency.
Assessing performance
The remuneration and nomination committee is responsible for assessing performance against key performance indicators
(KPIs) and determining the short‑term incentives (STI) and long‑term incentives (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 2020 included:
• cash salary;
• superannuation;
• short‑term incentives; and
•
long‑term incentives.
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.
22
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.
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)
Equity incentives under the PROP 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 PROP 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 PROP if considered appropriate by the board.
PROP is intended to align the interests of the senior executives with shareholders. Awards under PROP can be structured as
an option to receive shares at a future date subject to the recipient paying the exercise price (options) or a performance right to
acquire a share, subject to satisfaction of any vesting conditions (performance rights).
Grants under PROP 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 was 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 A$0.30, A$0.40 and A$0.50,
respectively. Class A options vested on 9 July 2020; Class B and C vest on 9 July 2021 and 2022, respectively, contingent on
continued employment at each vesting date.
The group’s COO was entitled to 2,925,685 performance rights issued on 9 July 2019. These performance rights vested
on QuickFee US having successfully contracted more than 300 firms (by number) within 24 months following the issue date.
This milestone occurred in November 2019, resulting in the issue of 2,925,685 ordinary shares.
The group’s CRO was entitled to 2,000,000 options granted on 18 March 2020. These options expire on 30 June 2025 and
comprise five tranches of options (Class D) with exercise prices of A$0.50:
• Tranche 1 – 333,333 options, vested on 30 June 2020;
• Tranche 2 – 333,333 options, vest on satisfaction of an internal milestone condition;
• Tranche 3 – 333,334 options, vest on satisfaction of an internal milestone condition;
• Tranche 4 – 500,000 options, vest on 31 December 2021; and
• Tranche 5 – 500,000 options, vest on 31 December 2022.
The group’s COO was entitled to 1,000,000 options on the same terms and quantities as Class D tranche 1, 2 and 3 detailed above.
Each of the above unvested tranches will only be exercisable by the CRO and COO on continued employment through to each
vesting date.
QuickFee Limited | Annual Report 2020
23
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 executive’s individual performance
measures are specifically designed to ensure
alignment with the group’s strategic plans
for the year.
Remuneration is set competitively to:
Fixed remuneration is based on:
• Recruit: attract the best talent to QuickFee
Limited to ensure sustainable growth; and
• Retain: ensure talent is not lured away
by competitors.
• Role and responsibility;
• Capability and competencies; and
• 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; and
• 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:
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.
• Quantum of STI = % of performance relative
to an individual’s key performance metrics.
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.
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 linked to shareholder value creation on which to be assessed.
Non‑executive directors’ remuneration
Each non‑executive director 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.
24
The maximum annual aggregate directors’ fee pool limit is A$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, Barry Lewin’s annual director fee is A$100,000 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. Dale Smorgon receives an annual fee of A$65,000 per annum for his role as a non‑executive
director, chair of the remuneration and nomination committee, as well as membership 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.
Barry Lewin and Dale Smorgon were granted 300,000 options each, approved by shareholders at an EGM on 23 July 2020.
These options expire on 23 July 2025 and comprise three tranches of 100,000 options (Class E) with an exercise price of
A$0.50. Tranche 1, 2 and 3 vest on 30 June 2021, 2022 and 2023, respectively, contingent on continued employment at each
vesting date.
As the grant date of 23 July 2020 occurred after the directors began rendering services in respect of that grant, AASB 2 requires
the group to commence recognition of the share‑based payment expense when the services are received. Consequently, the
group commenced amortisation of the share‑based payment expense on 6 May 2020 as detailed in the EGM notice of meeting.
The valuation inputs reflect the 23 July 2020 grant date fair value.
There are no contractual redundancy or retirement benefit schemes for non‑executive directors, other than statutory
superannuation contributions (where applicable).
Statutory performance indicators
We aim to align our executive remuneration to our strategic and business objectives and the creation of shareholder wealth.
The table below shows measures of the group’s financial performance since inception (as the business has been established for
less than five years as required by the Corporations Act 2001). However, these are not necessarily consistent with the measures
used in determining the variable amounts of remuneration to be awarded to KMPs. Consequently, there may not always be a
direct correlation between the statutory key performance measures and the variable remuneration awarded.
FY20
FY191
FY181, 2
Loss for the period attributable to owners (A$)
3,826,550
1,154,932
278,973
Basic loss per share (cents)
2.5
42.6
10.3
Notes:
1. Due to the conversion of QuickFee AU and QuickFee US shares to QuickFee Limited shares on 9 July 2019 (refer to note 8(a) of the
financial statements for further details), basic loss per share calculated for FY18 and FY19 is not directly comparable with the results
presented for FY20.
2. FY18 represents a reduced financial period, being 15 February 2018 to 30 June 2018.
The group’s earnings have remained negative since inception due in the main to the group being in high growth mode, with a
significant amount being invested in customer acquisition activities and technology development. 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 generate further shareholder value.
QuickFee Limited | Annual Report 2020
25
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 2020.
SHORT‑TERM BENEFITS
POST‑
EMPLOY‑
MENT
BENEFITS
LONG‑
TERM
BENEFITS
SHARE‑BASED PAYMENTS
CASH
SALARY
AND FEES
A$
CASH
BONUS
A$
NON‑
MONE‑
TARY
BENEFITS
A$
ANNUAL
LEAVE
A$
SUPER‑
ANNU‑
ATION
A$
LONG
SERVICE
LEAVE
A$
OPTIONS
A$
PERFOR‑
MANCE
RIGHTS
A$
TOTAL
A$
FY20
Non‑executive directors
Barry Lewin
100,000
Dale Smorgon
65,000
Executive directors
–
–
–
–
–
–
–
–
–
–
14,264
14,264
–
–
114,264
79,264
350,000
80,000
–
68,392
21,003
9,281
102,961
–
631,637
260,668
44,686
7,802
24,057
260,668
103,671
7,354
22,924
–
–
–
–
20,160
146,284
503,657
24,585
–
419,202
1,036,336 228,357
15,156
115,373
21,003
9,281
176,234 146,284
1,748,024
Bruce
Coombes
Other KMP
James
Drummond
Richard
Formoe
Total
compensation
26
The table below details remuneration of key management personnel based on the policies previously discussed for the year
ended 30 June 2019.
SHORT‑TERM BENEFITS
POST‑
EMPLOY‑
MENT
BENEFITS
LONG‑
TERM
BENEFITS
SHARE‑BASED PAYMENTS
CASH
SALARY
AND
FEES
A$
NON‑
MONE‑
TARY
BENEFITS
A$
CASH
BONUS
A$
FY19
ANNUAL
LEAVE
A$
OTHER1
A$
SUPER‑
ANNU‑
ATION
A$
LONG
SERVICE
LEAVE
A$
OPTIONS
A$
PERFOR‑
MANCE
RIGHTS
A$
TOTAL
A$
Non‑executive directors
Barry Lewin
16,666
Dale Smorgon
22,248
Executive directors
Bruce
Coombes
245,833
Other KMP
James
Drummond
204,508
Total
compensation 489,255
–
–
–
–
–
–
–
–
–
–
–
–
1,084
–
–
–
31,615
91,667
25,000
51,629
7,530
–
–
–
–
7,530
31,615 91,667
26,084
51,629
–
–
–
–
–
–
–
16,666
23,332
– 445,744
– 212,038
– 697,780
Notes:
1.
During FY19, the group engaged Carrot Consulting Pty Limited, an entity controlled by 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.
QuickFee Limited | Annual Report 2020
27
Directors’ report Continued
(f) Key terms of employment contracts
The tables below detail the key terms of employment contracts of key management personnel for the year ended 30 June 2020.
Name
Title
Details
Name
Title
Details
Name
Title
Details
Bruce Coombes
Managing Director and Chief Executive Officer
Base salary of A$350,000, plus statutory superannuation, reviewed annually by the remuneration and
nomination committee with a 3‑month termination notice by either party. Contract duration is unspecified.
James Drummond
Chief Operating Officer
Base salary of US$200,000, effective 1 January 2020 (US$150,000 from 1 July to 31 December 2019),
reviewed annually by the remuneration and nomination committee with immediate termination by either party.
Contract duration is unspecified.
Richard Formoe
Chief Revenue Officer
Base salary of US$200,000, effective 1 January 2020 (US$150,000 from 1 July to 31 December 2019),
reviewed annually by the remuneration and nomination committee with immediate termination by either party.
Contract duration is unspecified.
(g) Additional statutory information
Relative proportions of fixed vs variable remuneration expense
The following table shows the relative proportions of remuneration that are linked to performance and those that are fixed,
based on the amounts disclosed as statutory remuneration expense on page 26 above:
NAME
Barry Lewin
Bruce Coombes
Dale Smorgon
James Drummond
Richard Formoe
FIXED REMUNERATION
AT RISK STI
AT RISK LTI
FY20
%
88
71
82
58
69
FY19
%
100
100
100
100
N/A
FY20
%
FY19
%
FY20
%
FY19
%
–
13
–
9
25
–
–
–
–
N/A
12
16
18
33
6
–
–
–
–
N/A
28
Performance based remuneration granted and forfeited during the year
The following table shows for each KMP how much of their STI cash bonus was awarded and how much was forfeited
during FY20.
FY20
Barry Lewin
Bruce Coombes1
Dale Smorgon
James Drummond2
Richard Formoe3
TOTAL STI CASH BONUS
TOTAL
OPPORTUNITY
A$
AWARDED
%
FORFEITED
%
–
100,000
–
44,686
26,067
–
80
–
100
29
–
20
–
–
71
Notes:
1. Bonuses to Bruce Coombes were granted for meeting tiered/incremental lending milestones, negotiating an increased facility limit on
borrowings and a staff hiring milestone.
2. Bonuses to James Drummond were granted on successful IPO on 9 July 2019 and meeting internal technology development milestones.
3. Bonuses to Richard Formoe were granted for the design and implementation of a new commissions structure and a staff hiring milestone.
In addition to the STI cash bonus of A$7,448 outlined above (being A$29,067 × 29%), Richard Formoe also received A$96,223 in commissions
based on exceeding monthly lending targets. The total opportunity for commissions is not applicable as these are uncapped.
Terms and conditions of the share‑based payment arrangements
Options
GRANT DATE
VESTING
AND
EXERCISE
DATE
EXPIRY DATE
EXERCISE
PRICE
A$
VALUE PER
OPTION AT
GRANT DATE
A$
VESTED
%
2019‑07‑09 (Class A director options)
2020‑07‑09
2023‑07‑09
2019‑07‑09 (Class B director options)
2021‑07‑09
2023‑07‑09
2019‑07‑09 (Class C director options)
2022‑07‑09
2023‑07‑09
2020‑03‑18 (Class D employee options)
2020‑06‑30
2025‑06‑30
2020‑03‑18 (Class D employee options)
Milestone1
2025‑06‑30
2020‑03‑18 (Class D employee options)
Milestone1
2025‑06‑30
2020‑03‑18 (Class D employee options)
2021‑12‑31
2025‑06‑30
2020‑03‑18 (Class D employee options)
2022‑12‑31
2025‑06‑30
2020‑07‑23 (Class E director options)
2021‑06‑30
2025‑07‑23
2020‑07‑23 (Class E director options)
2022‑06‑30
2025‑07‑23
2020‑07‑23 (Class E director options)
2023‑06‑30
2025‑07‑23
Notes:
1. Vesting occurs on satisfaction of internal milestone condition.
0.30
0.40
0.50
0.50
0.50
0.50
0.60
0.75
0.50
0.50
0.50
0.0522
0.0446
0.0391
0.0441
0.0441
0.0441
0.0369
0.0291
0.5732
0.5732
0.5732
100
–
–
100
–
–
–
–
–
–
–
The number of options over ordinary shares in the company provided as remuneration to key management personnel is shown
in the section titled ‘reconciliation of options and ordinary shares held by KMP’ below. The options carry no dividend or voting
rights. When exercisable, each option is convertible into one ordinary share of QuickFee Limited.
QuickFee Limited | Annual Report 2020
29
Directors’ report Continued
(g) Additional statutory information (continued)
Performance rights
In January 2017, James Drummond agreed to relinquish US$160,000 of salary over the 18 months ended 30 June 2018 in
exchange for the grant of performance rights contingent on the IPO of QuickFee Limited. These performance rights vested
on QuickFee US having successfully contracted more than 300 firms (by number) within 24 months following the issue date.
Accordingly, 2,925,685 performance rights were issued on 9 July 2019. On 8 November 2019, these performance rights
vested and 2,925,685 ordinary shares were issued.
Reconciliation of options and ordinary shares held by KMP
Options
BALANCE AT
THE START OF
THE PERIOD1
GRANTED AS
REMUNER‑
ATION
EXERCISED
OTHER
CHANGES
BALANCE AT
END OF THE
PERIOD
VESTED AND
EXERCISABLE
Barry Lewin
Bruce
Coombes
Dale Smorgon
James
Drummond
Richard
Formoe
–
–
–
–
–
–
3,000,000
–
1,000,000
2,000,000
–
–
–
–
–
–
–
–
–
–
–
–
3,000,000
1,000,000
–
–
1,000,000
333,333
2,000,000
333,333
Notes:
1. Balance incorporates option holdings in the parent entity, QuickFee Limited, as at 1 July 2019. It does not incorporate holdings granted upon
IPO on 9 July 2019 as disclosed in notes 1 and 17(a) of the financial statements.
Ordinary shares
Barry Lewin
Bruce Coombes
Dale Smorgon
James Drummond
Richard Formoe
BALANCE AT
THE START OF
THE PERIOD1
GRANTED AS
REMUNER‑
ATION
RECEIVED ON
EXERCISE OF
PERFORM‑
ANCE RIGHTS
–
1
–
–
–
–
–
–
–
–
OTHER
CHANGES2
BALANCE AT
END OF THE
PERIOD
968,000
968,000
23,939,452
23,939,453
23,839,451
23,839,451
–
–
–
2,925,685
–
2,925,685
–
6,000
6,000
Notes:
1. Balance incorporates shareholdings in the parent entity, QuickFee Limited, as at 1 July 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 1
and 8(a) of the financial statements.
2. Balance incorporates: (i) conversion of QuickFee AU and QuickFee US class shares to QuickFee Limited class shares on 9 July 2019
as disclosed in notes 1 and 8(a) of the financial statements; (ii) allotment of deferred consideration shares as disclosed in notes 1 and
8(a) of the financial statements, and (iii) on‑market acquisitions.
30
Loans provided to the group by key management personnel
BALANCE AT
THE START OF
THE PERIOD
A$
INTEREST PAID
AND PAYABLE
FOR THE YEAR
A$
BALANCE AT
THE END OF
THE YEAR
A$
150,000
400,000
800,000
250,000
–
29,333
29,333
–
–
–
–
–
HIGHEST
BALANCE
DURING THE
YEAR
A$
150,000
400,000
800,000
250,000
Bonec Pty Ltd
Carrot Consulting Pty Limited
Derida Pty Limited
Jamada Holdings Pty Limited
Bonec Pty Limited
An unsecured loan with Bonec Pty Limited, an entity controlled by Bruce Coombes, was entered into on 26 November 2018.
Interest was charged monthly at 10% per annum and the loan converted to ordinary share capital on the 9 July 2019 IPO of
QuickFee Limited.
Carrot Consulting Pty Limited
An unsecured loan with Carrot Consulting Pty Limited, an entity controlled by Bruce Coombes, was entered into on 1 June 2018.
Interest was charged monthly at 8% per annum during the year ended 30 June 2020 (2019: 12%). The loan was repaid on
1 June 2020.
Derida Pty Limited
An unsecured A$400,000 loan with Derida Pty Limited, an entity in which Dale Smorgon is a 25% shareholder and director, was
entered into on 1 June 2018. Interest was charged monthly at 8% per annum during the year ended 30 June 2020 (2019: 12%).
The loan was repaid on 1 June 2020.
A separate A$400,000 unsecured loan with Derida Pty Limited was entered into on 26 November 2018. Interest was charged
monthly at 10% per annum and the loan converted to ordinary share capital on IPO of QuickFee Limited.
Jamada Holdings Pty Limited
An unsecured loan with Jamada Holdings Pty Limited, an entity controlled by Bruce Coombes, was entered into on
26 November 2018. Interest was charged monthly at 10% per annum and the loan converted to ordinary share capital
on the 9 July 2019 IPO of QuickFee Limited.
Other transactions with key management personnel
Barry Lewin is the Managing Director and major shareholder of SLM Corporate Pty Limited (SLM). Prior to Barry’s appointment
as Non‑Executive Chairman of QuickFee Limited on 1 May 2019, the group entered into a mandate letter, 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 A$160,000. A further A$5,000 was paid to SLM for valuation services rendered. These services
were based on normal commercial terms and conditions and were at market rates.
A former employee of QuickFee AU, also the son of Bruce Coombes, was engaged to provide research and development
consulting services to QuickFee AU during FY20. This arrangement was undertaken due to the substantial knowledge of
QuickFee’s lending platform held by the former employee that was required for the software development. These services
were based on normal commercial terms and conditions and were at market rates.
QuickFee Limited | Annual Report 2020
31
Directors’ report Continued
(g) Additional statutory information (continued)
Aggregate amounts of other transactions with key management personnel of QuickFee Limited:
Amounts recognised as expense
Consulting services rendered by SLM Corporate Pty Limited
Consulting services rendered by Bruce Coombes’ son
Voting of shareholders at last year’s annual general meeting
FY20
A$
FY19
A$
–
165,000
26,500
–
QuickFee Limited received more than 95% of ‘yes’ votes on its remuneration report for FY19. The company did not receive any
specific feedback at the AGM or throughout the year on its remuneration practices.
This concludes the remuneration report, which has been audited
32
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:
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 director options)1
2019‑07‑09 (Class B director options)1
2019‑07‑09 (Class C director options)1
2020‑03‑18 (Class D employee options)1
2020‑03‑18 (Class D employee options)1
2020‑03‑18 (Class D employee options)1
2020‑03‑18 (Class D employee options)1
2020‑03‑18 (Class D employee options)1
2020‑07‑23 (Class E director options)1
2020‑07‑23 (Class E director options)1
2020‑07‑23 (Class E director options)1
Total
EXPIRY DATE
2022‑07‑09
2022‑07‑09
2022‑07‑09
2023‑07‑09
2023‑07‑09
2023‑07‑09
2025‑06‑30
2025‑06‑30
2025‑06‑30
2025‑06‑30
2025‑06‑30
2025‑07‑23
2025‑07‑23
2025‑07‑23
EXERCISE
PRICE (A$)
NUMBER
UNISSUED
0.20
0.30
0.40
0.30
0.40
0.50
0.50
0.50
0.50
0.60
0.75
0.50
0.50
0.50
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
866,666
666,666
666,668
500,000
500,000
200,000
200,000
200,000
9,800,000
No option holder has any right under the options to participate in any other share issue of the company or any other entity.
Notes:
1. Included in these options were options granted as remuneration to the directors and other key management personnel during the year.
Details of options granted are disclosed on pages 23 to 25 above.
(b) Shares issued on the exercise of options
No ordinary shares of QuickFee Limited were issued during the year ended 30 June 2020 on the exercise of options granted.
Insurance of officers and indemnities
(a) Insurance of officers
During the financial year, QuickFee Limited paid a premium of A$91,200 to insure the directors and secretaries of the company
and its controlled entities. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings
that may be brought against the officers in their capacity as officers of entities in the group, and any other payments arising
from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from
conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information
to gain advantage for themselves or someone else or to cause detriment to the company. It is not possible to apportion the
premium between amounts relating to the insurance against legal costs and those relating to other liabilities.
(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.
QuickFee Limited | Annual Report 2020
33
Directors’ report Continued
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.
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; and
• none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants (including Independence Standards).
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
Investigating accountant’s report
Total remuneration for other assurance services
Total remuneration for non‑audit services
Auditor’s independence declaration
FY20
A$
–
–
–
FY19
A$
9,000
9,000
9,000
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on
page 35.
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.
Barry Lewin
Non‑Executive Chairman
26 August 2020
34
Auditor’s independence declaration
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 2020
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 August 2020
QuickFee Limited | Annual Report 2020
35
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 FY20 corporate governance statement is dated as at 30 June 2020 and reflects the corporate governance practices in place
throughout FY20. The FY20 corporate governance statement was approved by the board on 26 August 2020. 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 https://quickfee.com/corporate‑governance/corporate‑governance‑statement/.
36
Financial statements
ABN 93 624 448 693
Contents
Consolidated statement of profit or loss and
other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
38
39
40
41
42
These financial statements are consolidated financial statements
for the group consisting of QuickFee Limited and its subsidiaries.
A list of major subsidiaries is included in note 13.
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 and principal place
of business is:
Suite 4.07
10 Century Circuit
Norwest NSW 2153
Its shares are listed on the Australian Securities Exchange.
The financial statements were authorised for issue by the directors on
26 August 2020. The directors have the power to amend and reissue
the financial statements.
QuickFee Limited | Annual Report 2020
37
Consolidated statement of profit or loss
and other comprehensive income
For the year ended 30 June 2020
Interest income calculated using the effective interest rate method
Interest expense
Net interest income
Revenue from contracts with customers
Cost of sales
Gross profit
Other income
Other gains/(losses) – net
General and administrative expenses
Selling and marketing expenses
Operating profit before customer acquisition and R&D expenses
Customer acquisition expenses
Research and development expenses
Operating loss
IPO expenses
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
NOTES
3
3
FY20
A$
FY19
A$
5,729,427
4,540,387
(1,652,565)
(1,571,247)
4,076,862
2,969,140
4
5(c)
5(a)
5(b)
5(c)
5(c)
5(c)
5(c)
2,759,781
1,238,444
(1,150,512)
(238,861)
5,686,131
3,968,723
77,941
(257,723)
26,641
77,089
(4,493,700)
(2,138,574)
(827,997)
(615,209)
184,652
1,318,670
(2,478,210)
(1,341,540)
(703,746)
(110,783)
(2,997,304)
(133,653)
5(c)
(812,885)
(786,861)
(3,810,189)
(920,514)
6
(16,361)
(234,418)
(3,826,550)
(1,154,932)
34,741
1,712
(3,791,809)
(1,153,220)
CENTS
CENTS
Loss per share for loss attributable to the ordinary equity holders
of the company:
Basic and diluted loss per share
19
(2.5)
(42.6)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
38
Consolidated statement of financial position
As at 30 June 2020
ASSETS
Current assets
Cash and cash equivalents
Loan receivables
Trade and other receivables
Other current assets
Total current assets
Non‑current assets
Loan receivables
Property, plant and equipment
Right‑of‑use assets
Deferred tax assets
Other non‑current assets
Total non‑current assets
Total assets
LIABILITIES
Current liabilities
Firm settlements outstanding
Trade and other payables
Contract liabilities
Borrowings
Lease liabilities
Current tax liabilities
Employee benefit obligations
Total current liabilities
Non‑current liabilities
Borrowings
Lease liabilities
Employee benefit obligations
Total non‑current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Other reserves
Accumulated losses
Total equity
NOTES
FY20
A$
FY19
A$
14,970,488
2,781,387
7(a)
36,345,719
29,457,833
298,908
313,291
60,722
240,152
51,928,406
32,540,094
7(a)
220,873
203,280
7(b)
1,036,352
–
114,350
1,574,855
599,229
23,790
–
39,516
125,199
787,734
53,503,261
33,327,828
7(a)
7(c)
4(b)
7(d)
7(b)
7(d)
7(b)
9,638,297
4,315,530
695,297
145,916
605,033
150,773
25,337,370
27,036,877
332,147
–
360,658
–
157,046
154,075
36,509,685
32,419,334
83,803
722,997
7,556
434,222
–
–
814,356
434,222
37,324,041
32,853,556
16,179,220
474,272
8(a)
8(b)
25,155,956
2,644,252
(2,936,281)
43,925
(6,040,455)
(2,213,905)
16,179,220
474,272
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
QuickFee Limited | Annual Report 2020
39
Consolidated statement of changes in equity
For the year ended 30 June 2020
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
ATTRIBUTABLE TO OWNERS OF QUICKFEE LIMITED
CONTRIBUTED
EQUITY
A$
OTHER
RESERVES
A$
ACCUMULATED
LOSSES
A$
TOTAL
EQUITY
A$
NOTES
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)
8(a)
8(a)
12(b)
Balance at 30 June 2019
2,644,252
43,925
(2,213,905)
474,272
ATTRIBUTABLE TO OWNERS OF QUICKFEE LIMITED
CONTRIBUTED
EQUITY
A$
OTHER
RESERVES
A$
ACCUMULATED
LOSSES
A$
TOTAL
EQUITY
A$
NOTES
2,644,252
43,925
(2,213,905)
474,272
–
–
–
–
(3,826,550)
(3,826,550)
34,741
–
34,741
34,741
(3,826,550)
(3,791,809)
Balance at 1 July 2019
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, net of
transaction costs
Legal acquisition of QuickFee AU
8(a)
8(b)
22,136,416
–
–
(3,200,000)
Share‑based payment expenses
8(b), 17(c)
375,288
185,053
22,511,704
(3,014,947)
–
–
–
–
22,136,416
(3,200,000)
560,341
19,496,757
Balance at 30 June 2020
25,155,956
(2,936,281)
(6,040,455)
16,179,220
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
40
Consolidated statement of cash flows
For the year ended 30 June 2020
Cash flows from operating activities
Interest, fees and charges from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest paid
Income taxes paid
Net cash inflow/(outflow) from operating activities before
changes in assets/liabilities
Loan principal advanced to customers, net of repayments
Proceeds from commercial borrowings, net of repayments
Repayment of commercial borrowings, net of proceeds
NOTES
FY20
A$
FY19
A$
8,527,463
6,181,472
(8,742,210)
(5,017,385)
(1,652,565)
(1,571,247)
(133,891)
(208,739)
(2,001,203)
(615,899)
(1,809,112)
(6,305,847)
–
5,401,231
(260,225)
–
Net cash inflow/(outflow) from operating activities
9(a)
(4,070,540)
(1,520,515)
Cash flows from investing activities
Payments for property, plant and equipment
(226,190)
(19,122)
Interest received from financial assets held for cash management purposes
1,319
1,633
Net cash inflow/(outflow) from investing activities
(224,871)
(17,489)
Cash flows from financing activities
Proceeds from issues of shares
Share issue transaction costs
Legal acquisition of QuickFee AU
Principal elements of lease payments
Proceeds from related party borrowings, net of repayments
Repayment of related party borrowings
Dividends paid to controlled entity’s shareholders
8(a)
23,170,000
120,000
(1,150,987)
8(b)
(3,200,000)
(122,568)
–
–
–
–
700,000
(2,000,000)
–
–
(680,000)
7(d)
12(b)
Net cash inflow/(outflow) from financing activities
16,696,445
140,000
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of year
12,401,034
(1,398,004)
2,781,387
4,155,653
(211,933)
23,738
14,970,488
2,781,387
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
QuickFee Limited | Annual Report 2020
41
Notes to the financial statements
For the year ended 30 June 2020
Contents
1 Significant changes in the current reporting period
2 Segment information
3 Net interest income
4 Revenue from contracts with customers
5 Other income and expense items
6
Income tax expense
7 Financial assets and financial liabilities
8 Equity
9 Cash flow information
10 Critical estimates and judgements
11 Financial risk management
12 Capital management
13 Interests in other entities
14 Contingent liabilities
15 Events occurring after the reporting period
16 Related party transactions
17 Share‑based payments
18 Remuneration of auditors
19 Loss per share
20 Parent entity financial information
21 Summary of significant accounting policies
22 Changes in accounting policies
43
43
46
46
47
49
50
56
59
60
60
63
64
64
65
65
66
69
70
70
72
79
42
1 Significant changes in the current reporting period
On 9 July 2019, QuickFee Limited (referred hereafter as the ‘company’ or ‘group’ when including its controlled entities) undertook
an initial public offering (IPO) on the Australian Securities Exchange (ASX) with 67,500,000 ordinary shares issued at A$0.20 each,
raising A$13,500,000 before transaction costs. Many transactions were contractually covenanted to take place on IPO, including:
• The legal acquisition by QuickFee Limited of QuickFee Australia Pty Ltd (‘QuickFee AU’), resulting in the issue of 24,000,000
ordinary shares in QuickFee Limited and cash settlement of A$3,200,000 as full consideration;
• The legal acquisition by QuickFee Limited of QuickFee Group LLC (‘QuickFee US’), 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
(milestone achieved in August 2019);
– 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 (milestone achieved in November 2019).
• The conversion of seed loan agreements (borrowings) with various lenders pursuant to which A$1,600,000 was loaned
to QuickFee Limited. Such loans converted into shares at an issue price of A$0.10 per share resulting in the issuance of
16,000,000 ordinary shares in the company;
• The conversion of loan agreements (borrowings) with QuickFee US shareholders pursuant to which A$1,200,000 was
loaned to QuickFee Limited. Such loans converted into shares at an issue price of A$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, as detailed in note 8(a)(i) and 17(a);
• The grant of 3,000,000 executive options to Bruce Coombes, as detailed in note 17(a); and
• The grant of 5,851,370 performance rights to employees of QuickFee US, as detailed in note 17(b).
Given that the shareholder group which controlled QuickFee Limited prior to the IPO also effectively controlled QuickFee AU
and QuickFee US from the date of the group’s incorporation, this transaction was treated as a common control transaction.
In determining the date of common control, the 15 February 2018 incorporation date of QuickFee Limited was determined to
be the date of the common control transaction, notwithstanding the 9 July 2019 legal acquisition date. This resulted in the group
consolidating its financial statements starting on 15 February 2018. Further details of the common transaction can be found in
note 11 of the group’s annual report for the year ended 30 June 2019.
2 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, the Chief Operating Officer and Financial Controller. Management
examines the group’s performance from a geographic perspective and has identified two reportable segments of its business:
• Australia (AU): 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 (US): following the success of QuickFee AU, management incorporated QuickFee US as an entirely separate
operation to pursue opportunities in the United States where no direct competitor exists.
• Research and development (R&D): expenses directly attributable to the group’s software and technology development.
QuickFee Limited | Annual Report 2020
43
Notes to the financial statements Continued
2 Segment information (continued)
(b) Financial breakdown
The table below shows the reportable segment information for the year ended 30 June 2020:
Net interest income
3,345,799
730,334
FY20
Consolidated statement
of profit or loss and other
comprehensive income
Interest income
Interest expense
Revenue from contracts
with customers
Cost of sales
Gross profit
Other income
Other gains/(losses) – net
General and administrative
expenses
AU
A$
US
A$
R&D
A$
UNALLOCATED
A$
TOTAL
A$
4,469,656
1,259,042
(1,123,857)
(528,708)
865,363
1,894,418
(891,594)
(258,918)
3,319,568
2,365,834
75,174
1,902
2,767
(259,625)
–
–
–
–
–
–
–
–
729
–
729
–
–
5,729,427
(1,652,565)
4,076,862
2,759,781
(1,150,512)
729
5,686,131
–
–
77,941
(257,723)
(1,546,654)
(1,691,679)
(173,606)
(1,081,761)
(4,493,700)
Selling and marketing expenses
(361,751)
(466,246)
–
–
(827,997)
Operating profit/(loss)
before customer acquisition
and R&D expenses
1,488,239
(48,949)
(173,606)
(1,081,032)
184,652
Customer acquisition expenses
(607,022)
(1,871,188)
–
Research and development
expenses
–
–
(703,746)
–
–
(2,478,210)
(703,746)
Operating profit/(loss)
881,217
(1,920,137)
(877,352)
(1,081,032)
(2,997,304)
IPO expenses
–
–
–
(812,885)
(812,885)
Profit/(loss) before income tax
881,217
(1,920,137)
(877,352)
(1,893,917)
(3,810,189)
Income tax expense
(16,361)
–
–
–
(16,361)
Profit/(loss) for the period
864,856
(1,920,137)
(877,352)
(1,893,917)
(3,826,550)
AU
A$
US
A$
R&D
A$
UNALLOCATED
A$
TOTAL
A$
27,763,210
10,630,969
27,763,210
10,630,969
23,807,057
13,377,757
23,807,057
13,377,757
–
–
–
–
15,109,082
53,503,261
15,109,082
53,503,261
139,227
37,324,041
139,227
37,324,041
FY20
Consolidated statement
of financial position
Segment assets
Total assets
Segment liabilities
Total liabilities
44
The table below shows the reportable segment information for the year ended 30 June 2019:
FY19
Consolidated statement of profit or loss
and other comprehensive income
Interest income
Interest expense
Net interest income
Revenue from contracts with customers
Cost of sales
Gross profit
Other income
Other gains/(losses) – net
AU
A$
US
A$
UNALLOCATED
A$
TOTAL
A$
3,770,607
768,147
1,633
4,540,387
(1,160,284)
(410,963)
–
(1,571,247)
2,610,323
482,839
357,184
755,605
(184,032)
(54,829)
1,633
2,969,140
–
–
1,238,444
(238,861)
2,909,130
1,057,960
1,633
3,968,723
25,972
–
669
–
–
77,089
26,641
77,089
General and administrative expenses
(1,196,661)
(752,828)
(189,085)
(2,138,574)
Selling and marketing expenses
(283,761)
(331,448)
–
(615,209)
Operating profit/(loss) before customer
acquisition and R&D expenses
1,454,680
(25,647)
(110,363)
1,318,670
Customer acquisition expenses
(547,158)
(794,382)
Research and development expenses
(56,436)
(54,347)
–
–
(1,341,540)
(110,783)
Operating profit/(loss)
IPO expenses
851,086
(874,376)
(110,363)
(133,653)
–
–
(786,861)
(786,861)
Profit/(loss) before income tax
851,086
(874,376)
(897,224)
(920,514)
Income tax expense
(234,418)
–
–
(234,418)
Profit/(loss) for the period
616,668
(874,376)
(897,224)
(1,154,932)
FY19
Consolidated statement of financial position
Segment assets
Total assets
Segment liabilities
Total liabilities
AU
A$
US
A$
UNALLOCATED
A$
TOTAL
A$
24,076,623
6,460,370
2,790,835
33,327,828
24,076,623
6,460,370
2,790,835
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 2020
45
Notes to the financial statements Continued
3 Net interest income
Interest income calculated using the effective interest rate method
Payment plans (loans)
Financial assets held for cash management purposes
Interest expense
Financial institution lenders
Other lenders
Lease liabilities
Net interest income
(a) Accounting policies
(i) Interest income
NOTES
FY20
A$
FY19
A$
5,727,800
4,538,754
1,627
1,633
5,729,427
4,540,387
(1,557,388)
(1,324,972)
(78,192)
(246,275)
7(b)
(16,985)
–
(1,652,565)
(1,571,247)
4,076,862
2,969,140
Interest income from loans advanced is recognised over the life of the loans granted by the group to its customers over the period
loans remain outstanding. The group recognises interest income 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.
4 Revenue from contracts 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:
FY20
Timing of revenue recognition
At a point in time
Over time
FY19
Timing of revenue recognition
At a point in time
Over time
46
APPLICATION
FEE REVENUE
A$
MERCHANT
FEE REVENUE
A$
PLATFORM FEE
REVENUE
A$
TOTAL
A$
–
1,892,250
107,670
1,999,920
190,976
–
568,885
759,861
190,976
1,892,250
676,555
2,759,781
–
377,139
159,502
276,068
536,641
701,803
–
377,139
435,570
1,238,444
425,735
425,735
(b) Liabilities related to contracts with customers
Contract liabilities – deferred revenue
Total current contract liabilities
FY20
A$
145,916
145,916
FY19
A$
150,773
150,773
(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
(i) Application fee revenue
FY20
A$
FY19
A$
150,773
81,478
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.
(ii) 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.
(iii) Platform fee revenue
Revenue from QuickFee’s payment 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.
5 Other income and expense items
(a) Other income
Government grants
Other items
(b) Other gains/(losses)
Net foreign exchange gains/(losses)
QuickFee Limited | Annual Report 2020
FY20
A$
62,500
15,441
77,941
FY20
A$
(257,723)
(257,723)
FY19
A$
–
26,641
26,641
FY19
A$
77,089
77,089
47
Notes to the financial statements Continued
5 Other income and expense items (continued)
(c) Breakdown of expenses by nature
NOTES
FY20
A$
FY19
A$
Cost of sales
Credit checks and insurance
Employee benefits1
Finance costs
Platform costs
General and administrative expenses
Accounting and audit
Computer equipment and software
Depreciation
Employee benefits1
Insurance
Investor relations
Legal
Listing and share registry
Net impairment losses on loan receivables
Office
Recruitment and staff training
Share‑based payment expenses (non‑cash)
Travel
Other items
Selling and marketing expenses
Commissions
Employee benefits1
Marketing
Customer acquisition expenses
Employee benefits1
Marketing
Research and development expenses
Employee benefits1
Other items
IPO expenses
17(c)
Share‑based payment expenses contingent on IPO (non‑cash)
17(c)
Other IPO expenses
247,306
129,234
595,308
178,664
144,520
32,120
2,286
59,935
1,150,512
238,861
211,900
124,141
190,746
195,153
59,925
3,771
1,774,641
1,067,947
89,018
101,860
183,385
77,611
570,818
302,561
327,481
49,153
315,965
174,420
15,026
–
29,760
–
38,138
206,303
84,357
–
307,869
130,325
4,493,700
2,138,574
43,717
681,223
103,057
827,997
37,436
547,774
29,999
615,209
1,920,341
1,005,121
557,869
336,419
2,478,210
1,341,540
199,768
503,978
703,746
511,188
301,697
812,885
–
110,783
110,783
–
786,861
786,861
Notes:
1. Employee benefits from each functional expense category includes aggregate superannuation of A$124,772 (2019: A$102,948).
48
6 Income tax expense
(a) Income tax expense
Current tax
Current tax on profits for the year
Adjustments for current tax of prior periods
Total current tax expense/(benefit)
Deferred income tax
Decrease/(increase) in deferred tax assets
Total deferred tax expense/(benefit)
Income tax expense
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Loss before income tax benefit
Tax at the Australian tax rate of 27.5% (2019: 27.5%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Blackhole expenditure (Section 40‑880, ITAA 1997)
Expected credit losses
Employee leave obligations
Prepaid expenses
Share‑based payments
Unrealised currency (gains)/losses
Other items
Subtotal
Difference in overseas tax rates
Adjustments for current tax of prior periods
Tax losses and other timing differences for which no deferred tax asset is recognised
Income tax expense
FY20
A$
FY19
A$
–
279,539
(23,155)
(23,155)
–
279,539
39,516
39,516
(45,121)
(45,121)
16,361
234,418
FY20
A$
(3,810,189)
(1,047,802)
FY19
RESTATED
A$
(920,514)
(253,141)
(67,555)
159,745
61,414
(40,388)
154,094
76,949
9,533
353,792
(49,768)
(23,155)
783,294
16,361
–
–
42,371
–
–
(21,199)
1,133
22,305
(18,767)
–
484,021
234,418
The numerical reconciliation of income tax expense to prima facie tax payable for the year ended 30 June 2019 has been restated
to reflect the income tax returns lodged for the same period.
QuickFee Limited | Annual Report 2020
49
Notes to the financial statements Continued
6 Income tax expense (continued)
(c) Tax losses
FY20
A$
FY19
A$
Unused Australian tax losses for which no deferred tax asset has been recognised
2,044,690
1,046,686
Potential tax benefit at 27.5% (2019: 27.5%)
562,290
Unused United States tax losses for which no deferred tax asset has been recognised
2,149,484
Potential tax benefit at 29.8% (2019: 29.8%)
641,406
287,839
576,672
172,079
Total potential tax benefit
1,203,696
459,918
The group does not recognise deferred tax assets for carried forward tax losses attributed to the QuickFee AU and QuickFee US
consolidated tax groups as at 30 June 2020. Deferred tax assets are recognised for deductible temporary differences only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
7 Financial assets and financial liabilities
(a) Loan receivables and firm payables
FY20
CURRENT
A$
NON‑
CURRENT
A$
TOTAL
A$
CURRENT
A$
NON‑
CURRENT
A$
FY19
TOTAL
A$
Loan receivables
NOTES
(i), (ii)
Gross loan receivables
36,918,653
220,873
37,139,526
29,468,563
599,229
30,067,792
Expected credit losses
11(b)
(572,934)
–
(572,934)
(10,730)
–
(10,730)
36,345,719
220,873
36,566,592
29,457,833
599,229
30,057,062
Firm payables
(iii), (iv)
Firm settlements
outstanding
9,638,297
9,638,297
–
–
9,638,297
4,315,530
9,638,297
4,315,530
–
–
4,315,530
4,315,530
Net loan receivables
26,707,422
220,873
26,928,295
25,142,303
599,229
25,741,532
(i) Classification of loan receivables
Gross written loans represent cash to be received at balance date.
(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.
50
(iii) Classification of firm settlements outstanding
Firm settlements outstanding represent the following:
• payment plans (loans) approved but yet to be settled by the group to professional service firms, usually due to the first
instalment having not been received as cleared funds; and
• pay in full (up‑front payment) transactions yet to be settled by the group to professional service firms.
(iv) Recognition and measurement of firm settlements outstanding
Firm settlements outstanding are non‑derivative financial liabilities, with fixed and determinable payments that are not quoted
in an active market. The carrying amounts of firm settlements outstanding are considered to be the same as their fair values,
due to their short‑term nature. Transactions awaiting settlement turnover quickly, typically within 1‑7 days.
(v) Impairment and risk exposure
Information about the impairment of loan receivables and the group’s exposure to credit risk, foreign currency risk and interest
rate risk can be found in note 11.
(b) Leases
This note provides information for leases where the group is a lessee.
(i) Amounts recognised in the statement of financial position
Right‑of‑use assets
Buildings
Lease liabilities
Current
Non‑current
Additions to the right‑of‑use assets during FY20 were A$1,179,769.
(ii) Amounts recognised in the statement of profit or loss and other comprehensive income
FY20
A$
FY19
A$
1,036,352
1,036,352
332,147
722,997
1,055,144
–
–
–
–
–
FY20
A$
FY19
A$
Depreciation charge of right‑of‑use assets
Buildings
Lease liabilities
Interest expense (included in net interest income)
Expense relating to short‑term leases (included in general and administrative expenses)
145,777
145,777
16,985
161,055
178,040
The total cash outflow for leases in FY20 was A$139,553.
QuickFee Limited | Annual Report 2020
–
–
–
–
–
51
Notes to the financial statements Continued
7 Financial assets and financial liabilities (continued)
(b) Leases (continued)
(iii) The group’s leasing activities and how these are accounted for
The group leases various office suites. Rental contracts are typically made for fixed periods of three to five years.
Contracts may contain both lease and non‑lease components. The group allocates the consideration in the contract to the
lease and non‑lease components based on their relative stand‑alone prices.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease
agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor.
Leased assets may not be used as security for borrowing purposes.
Until the 2019 financial year, leases of property, plant and equipment were classified as either finance or operating leases.
Payments made under operating leases (net of any incentives received from the lessor) were charged to profit or loss on a
straight‑line basis over the period of the lease.
From 1 July 2019, leases are recognised as a right‑of‑use asset and a corresponding liability at the date at which the leased
asset is available for use by the group.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present
value of the following lease payments:
•
fixed payments (including in‑substance fixed payments), less any lease incentives receivable;
• variable lease payments that are based on an index or a rate, initially measured using the index or rate as at the
commencement date;
• amounts expected to be payable by the lessee under residual value guarantees;
•
the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and
• payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is
generally the case for leases in the group, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee
would have to pay to borrow the funds necessary to obtain an asset of similar value to the right‑of‑use asset in a similar economic
environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the group:
• where possible, uses recent third‑party financing received by the individual lessee as a starting point, adjusted to reflect
changes in financing conditions since third party financing was received;
• uses a build‑up approach that starts with a risk‑free interest rate adjusted for credit risk for leases held by QuickFee Limited; and
• makes adjustments specific to the lease, e.g. term, country, currency and security.
The group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included
in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease
liability is reassessed and adjusted against the right‑of‑use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease
period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
52
Right‑of‑use assets are measured at cost comprising the following:
•
the amount of the initial measurement of lease liability;
• any lease payments made at or before the commencement date less any lease incentives received;
• any initial direct costs; and
•
restoration costs.
Right‑of‑use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight‑line basis.
If the group is reasonably certain to exercise a purchase option, the right‑of‑use asset is depreciated over the underlying asset’s
useful life.
Payments associated with short‑term leases and leases of low‑value assets are recognised on a straight‑line basis as an expense
in profit or loss. Short‑term leases are leases with a lease term of 12 months or less.
(c) Trade and other payables
CURRENT
A$
266,019
404,333
24,945
695,297
NON‑
CURRENT
A$
–
–
–
–
FY20
TOTAL
A$
CURRENT
A$
266,019
163,821
404,333
377,110
24,945
64,102
695,297
605,033
NON‑
CURRENT
A$
–
–
–
–
FY19
TOTAL
A$
163,821
377,110
64,102
605,033
Trade payables
Accrued expenses
Other payables
Total borrowings
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 2020
53
Notes to the financial statements Continued
7 Financial assets and financial liabilities (continued)
(d) Borrowings
NOTES
CURRENT
A$
NON‑
CURRENT
A$
TOTAL
A$
CURRENT
A$
NON‑
CURRENT
A$
FY20
FY19
TOTAL
A$
Secured
Global Credit Investments
7(d)(i)
6,192,627
–
6,192,627
4,277,770
–
4,277,770
Lease Collateral
7(d)(ii)
19,192,237
83,803 19,276,040 18,194,860
434,222 18,629,082
Total secured
borrowings
Unsecured
Bonec
Carrot Consulting
Convertible loans
Derida
Jamada Holdings
Wingate Direct
Investments
Other unsecured
borrowings
Total unsecured
borrowings
Capitalised borrowing
costs
Unamortised borrowing
costs
Total capitalised
borrowing costs
25,384,864
83,803 25,468,667 22,472,630
434,222 22,906,852
7(d)(iii)
7(d)(iv)
8(a)(i)
7(d)(v)
7(d)(v)
7(d)(vii)
7(d)(viii)
–
–
–
–
–
–
–
–
(47,494)
(47,494)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
150,000
400,000
1,600,000
800,000
250,000
400,000
1,112,962
4,712,962
(47,494)
(148,715)
(47,494)
(148,715)
–
–
–
–
–
–
–
–
–
–
150,000
400,000
1,600,000
800,000
250,000
400,000
1,112,962
4,712,962
(148,715)
(148,715)
Total borrowings
25,337,370
83,803 25,421,173 27,036,877
434,222 27,471,099
54
(i) Global Credit Investments Pty Ltd
The Global Credit Investments Pty Ltd loan was originally entered into on 1 September 2017 and matured on 31 August 2019,
with the group negotiating a roll over until 31 August 2020. On 26 June 2020, the group renegotiated the facility for a further
12 months. The loan is secured over certain identified loan receivables of QuickFee US. The loan attracts variable interest paid
monthly in arrears, 9.0% per annum for accounting firms as at 30 June 2020; legal firms loans accrue interest at 9.5% per annum.
The facility as at 30 June 2020 was US$10,000,000 (2019: US$5,000,000), with further drawdowns up to the limit available
subject to compliance with the lender’s terms and conditions.
(ii) Lease Collateral Pty Ltd
The Lease Collateral Pty Ltd loan was originally entered into on 3 November 2015. As at 30 June 2020, the facility limit was
A$25,000,000 (2019: A$20,000,000), secured over certain identified loan receivables of QuickFee AU. As at 30 June 2020,
the loan attracted interest at 4.1% per annum plus the base rate as published by the Reserve Bank of Australia (2019: 3.95%).
In addition, a line fee of 1.25% per annum applies, along with a scalable surcharge up to 1.0% per annum for drawdowns over
A$20,000,000 derived from the average reference bank credit default swap.
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 provided by either party.
(iii) Bonec Pty Limited
An unsecured loan with Bonec Pty Limited, an entity controlled by Bruce Coombes, was entered into on 26 November 2018.
Interest was charged monthly at 10% per annum and the loan converted to ordinary share capital on the 9 July 2019 IPO of
QuickFee Limited.
(iv) Carrot Consulting Pty Limited
An unsecured loan with Carrot Consulting Pty Limited, an entity controlled by Bruce Coombes, was entered into on 1 June 2018.
Interest was charged monthly at 8% per annum during the year ended 30 June 2020 (2019: 12%). The loan was repaid on
1 June 2020.
(v) Derida Pty Limited
An unsecured loan of A$400,000 with Derida Pty Limited, an entity in which Dale Smorgon is a 25% shareholder and director,
was entered into on 1 June 2018. Interest was charged monthly at 8% per annum during the year ended 30 June 2020 (2019: 12%).
The loan was repaid on 1 June 2020.
A separate unsecured loan of A$400,000 with Derida Pty Limited was entered into on 26 November 2018. Interest was
charged monthly at 10% per annum and the loan converted to ordinary share capital on the 9 July 2019 IPO of QuickFee Limited.
(vi) Jamada Holdings Pty Limited
An unsecured loan with Jamada Holdings Pty Limited, an entity controlled by Bruce Coombes, was entered into on 26 November 2018.
Interest was charged monthly at 10% per annum and the loan converted to ordinary share capital on the 9 July 2019 IPO of
QuickFee Limited.
(vii) Wingate Direct Investments Pty Limited
An unsecured loan with Wingate Direct Investments Pty Limited, an entity associated with Franco Dogliotti (director of
QuickFee Australia Pty Ltd until May 2019), was entered into on 1 June 2018. Interest was charged monthly at 8% per annum
during the year ended 30 June 2020 (2019: 12%). The loan was repaid on 17 January 2020.
QuickFee Limited | Annual Report 2020
55
Notes to the financial statements Continued
7 Financial assets and financial liabilities (continued)
(d) Borrowings (continued)
(viii) Other unsecured borrowings
Other unsecured borrowings comprise loans of:
• A$400,000 entered into on 26 November 2018. Interest was charged monthly at 10% per annum and the loan converted
to ordinary share capital on the 9 July 2019 IPO of QuickFee Limited.
• US$500,000 entered into in February 2016. Interest was charged monthly at 6% per annum. The loan was repaid on
12 July 2019.
(ix) Fair values
The fair values of borrowings are not materially different to their carrying amounts, since the interest payable on those
borrowings is either close to current market rates or the borrowings are of a short‑term nature.
(x) Risk exposures
Details of the group’s exposure to risks arising from current and non‑current borrowings are set out in note 11.
8 Equity
(a) Contributed equity
Fully paid ordinary shares
QuickFee Limited
QuickFee AU
QuickFee US
FY20
SHARES
FY19
SHARES
FY20
A$
FY19
A$
NOTES
8(a)(ii)
188,264,287
1
25,155,956
(117,402)
–
–
729,166
2,000,000
–
–
2,033,827
727,827
8(a)(i)
188,264,287
2,729,167
25,155,956
2,644,252
56
(i) Movements in ordinary shares:
DETAILS
Balance at 1 July 2018
Issue at A$4.11 to employees of QuickFee AU (2019‑01‑23)
Less: Transaction costs arising on future share issues on IPO1
Balance at 30 June 2019
NUMBER OF
SHARES
TOTAL
A$
2,700,001
2,641,655
29,166
120,000
–
(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)2
47,520,834
–
Issue at A$0.10 on conversion of QuickFee Limited seed loan agreements (2019‑07‑09)
16,000,000
1,600,000
Issue at A$0.20 on conversion of QuickFee US shareholder loan agreements
(2019‑07‑09)
Issue at A$0.20 pursuant to IPO (2019‑07‑09)
Issue at A$0.20 as consideration to broker on IPO (2019‑07‑09)3
6,000,000
1,200,000
67,500,000
13,500,000
800,000
160,000
Issue at A$nil on vesting of QuickFee US deferred consideration shares (2019‑09‑10)4, 5
3,049,543
Issue at A$nil on vesting of QuickFee US deferred consideration shares (2019‑11‑08)4, 6
3,049,543
Issue at A$nil on vesting of performance rights (2019‑11‑08)6, 7
5,851,370
–
–
–
Transfer from ‘share‑based payment reserve’ on vesting of performance rights (2019‑11‑08)7
–
292,568
Issue at A$0.21 pursuant to placement (2020‑05‑15)
32,714,286
6,870,000
Issue at A$nil on vesting of QuickFee US deferred consideration shares (2020‑05‑15)4, 8
3,049,544
–
Less: Transaction costs arising on share issues1
Balance at 30 June 2020
–
(1,110,864)
188,264,287
25,155,956
Notes:
1. Transaction costs that would have occurred regardless of the IPO proceeding were recognised in the year ended 30 June 2019. Such costs
were 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 on IPO. Transaction costs recognised on IPO comprise those arising contingent on the successful completion of the
IPO, principally broker underwriting and management fees.
2. Conversion of QuickFee AU and QuickFee US shares to QuickFee Limited shares incorporates the 24,000,000 ordinary shares issued as partial
consideration for the acquisition of QuickFee AU and the 26,250,000 ordinary shares issued as full consideration (excluding deferred consideration
shares) for the acquisition of QuickFee US on the 9 July 2019 IPO (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 (included in ‘balance at 1 July 2018’); (b) 29,166 shares issued on 23 January 2019; and (c) the conversion figure of 47,250,834.
3. The accounting entry to take up the broker shares valued at A$160,000 offset between ‘transaction costs arising on share issues’ (A$77,280)
and ‘share‑based payment expenses’ (A$82,720). This split was prorated according to the ratio of new shares (relative to the overall capital
structure) issued on IPO.
4. No monetary value was ascribed to the deferred consideration shares issued to pre‑IPO shareholders of QuickFee US on fulfilment of each
performance milestone. The deferred consideration shares were accounted for as part of the common control transaction on 15 February 2018.
As such, no further amount is recognised as contributed equity.
5. Performance milestone 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.
6. Performance milestone comprised QuickFee US having successfully contracted more than 300 firms (by number) within 24 months of IPO.
7. Refer to note 8(b) and 17(b) for further details.
8. Performance milestone comprised QuickFee US achieving an aggregate value of currently held loans in excess of US$6,000,000 within 24 months.
QuickFee Limited | Annual Report 2020
57
Notes to the financial statements Continued
8 Equity (continued)
(a) Contributed equity (continued)
(ii) Ordinary shares
Ordinary shares entitle the holder to participate in dividends, and to share in the proceeds of winding up the company
in proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote,
and upon a poll each share is entitled to one vote.
Ordinary shares have no par value and the company does not have a limited amount of authorised capital.
(b) Other reserves
The following table shows a breakdown of the statement of financial position line item ‘other reserves’ and the movements
in these reserves during the year. A description of the nature and purpose of each reserve is provided below the table.
COMMON
CONTROL
RESERVE
A$
SHARE‑BASED
PAYMENT
RESERVE
A$
FOREIGN
CURRENCY
TRANSLATION
RESERVE
A$
TOTAL OTHER
RESERVES
A$
NOTES
Balance at 1 July 2019
–
Legal acquisition of QuickFee AU
(3,200,000)
–
–
–
43,925
43,925
–
(3,200,000)
34,741
34,741
185,053
292,568
(292,568)
–
–
–
185,053
292,568
(292,568)
–
–
–
–
(3,200,000)
185,053
78,666
(2,936,281)
Currency translation differences
Transactions with owners in their
capacity as owners:
Options issued/expensed
Performance rights issued/expensed
Performance rights vested
As at 30 June 2020
(i) Nature and purpose of other reserves
Common control
17(c)
8(a)(i),
17(c)
8(a)(i)
The common control reserve recognises differences arising from the 15 February 2018 common control business combination
between QuickFee Limited and QuickFee AU under the ‘pooling method’. The 9 July 2019 legal acquisition was contingent on
the IPO of QuickFee Limited and included cash settlement of A$3,200,000 as consideration. This payment was made equally
and proportionately to all shareholders of QuickFee AU.
Share‑based payments
The share‑based payment reserve records items recognised as expenses on valuation of share options and performance rights
issued to key management personnel, other employees and eligible contractors.
Foreign currency translation
Exchange differences arising on translation of foreign controlled entities are recognised in other comprehensive income and
accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net investment
is disposed of.
58
9 Cash flow information
(a) Reconciliation of loss after income tax to net cash outflow from operating activities
Loss for the period
Adjustments for:
Depreciation
Expected credit losses
NOTES
FY20
A$
FY19
A$
(3,826,550)
(1,154,932)
5(c)
190,746
562,934
3,771
–
Interest received from financial assets held for cash management purposes
(1,627)
(1,633)
Share‑based payments
Net unrealised foreign exchange gains/(losses)
17(c)
5(b)
560,341
257,723
–
(77,089)
Change in operating assets and liabilities:
Movement in loan receivables
Movement in trade and other receivables
Movement in deferred tax assets
Movement in other operating assets
Movement in firm settlements outstanding
Movement in trade and other payables
Movement in contract liabilities
Movement in borrowings
Movement in employee benefit obligations
Movement in income taxes payable
Movement in deferred tax liabilities
(6,939,127)
(7,263,829)
(197,925)
39,516
(56,931)
(39,516)
(99,343)
(139,776)
5,280,788
1,258,791
206,457
(4,857)
301,100
69,295
(156,709)
5,360,965
214,139
154,075
(157,046)
–
70,799
(5,605)
Net cash inflow/(outflow) from operating activities
(4,070,540)
(1,520,515)
(b) Non‑cash investing and financing activities
Non‑cash investing and financing activities disclosed in other notes are:
• acquisition of right‑of‑use assets – note 7(b); and
• options and performance rights issued to employees under the ‘Performance Rights and Options Plan’ for no cash
consideration – note 17(a).
QuickFee Limited | Annual Report 2020
59
Notes to the financial statements Continued
10 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 deferred tax asset for carry‑forward tax losses – note 6(c);
• estimation of split between transaction costs arising on future share issues between profit or loss and equity – note 8(a); and
•
impairment of loan receivables – note 11(b).
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.
11 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 income 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 A$48,190 (2019: A$46,573).
(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.
60
(i) Risk management
The group’s customer base comprises clients 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 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 low due to the underlying professional services firms being low risk and the absence of significant risk
concentration. QuickFee AU maintains a credit insurance policy to mitigate against the risk of default on loan receivables.
In terms of trade receivables on merchant fee revenue collected in arrears, the group has direct debit authority for bank accounts
of each firm using the pay in full (up‑front payments) portal, which reduces risk.
For both loan and trade receivables, the group can divert inbound funds for pay in full transactions processed via the payments
portal to cover any amounts owing by a given firm to the group, providing an additional level of recourse.
Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating.
(ii) Security
For some loan receivables, particularly for professional service firms with fewer than three partners, the group obtains security
in the form of personal guarantees, which can be called upon if the counterparty is in default under the terms of the agreement.
(iii) Impairment of financial assets
The group has two types of financial assets that are subject to the expected credit loss model:
•
•
loan receivables; and
trade receivables for merchant fee revenue collected in arrears.
While cash and cash equivalents are also subject to the impairment requirements of AASB 9, the identified impairment loss
was immaterial.
Loan receivables
The group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss
allowance for all loan receivables.
To measure the expected credit losses, loan receivables have been grouped based on shared credit risk characteristics and the
days past due.
QuickFee Limited | Annual Report 2020
61
Notes to the financial statements Continued
11 Financial risk management (continued)
(b) Credit risk (continued)
The expected loss rates are based on the payment profiles of loans over a period of 36 months before 30 June 2020 and the
corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and
forward looking information on macroeconomic factors, primarily the COVID‑19 pandemic, affecting the ability of the customers
to settle the receivables.
On that basis, the loss allowance as at 30 June 2020 was determined to be A$572,934 for loan receivables.
The loss allowances for loan receivables as at 30 June reconciles to the opening loss allowances as follows:
Opening loss allowance as at 1 July
Increase in loan receivables loss allowance recognised in profit or loss during the year
Loan receivables written off during the year as uncollectible
Closing loss allowance at 30 June
FY20
A$
10,730
570,452
FY19
A$
9,458
39,410
(8,248)
(38,138)
572,934
10,730
Loan receivables are written off where there is no reasonable expectation of recovery. Indicators that there is no reasonable
expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the group, and a
failure to make contractual payments for a period of greater than 120 days past due.
Impairment losses on loan receivables are presented as net impairment losses within operating profit. Subsequent recoveries
of amounts previously written off are credited against the same line item.
Trade receivables
The culmination of the series of protections against credit risk identified in note 11(b)(i) above is that the identified loss allowance
as at 30 June 2020 and 30 June 2019 was determined for trade receivables to be immaterial, resulting in the non‑recognition of
any expected credit losses.
(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.
62
CONTRACTUAL MATURITIES
OF FINANCIAL LIABILITIES
NOTES
As at 30 June 2020
LESS
THAN 12
MONTHS
A$
BETWEEN
1 AND 2
YEARS
A$
BETWEEN
2 AND 5
YEARS
A$
OVER 5
YEARS
A$
TOTAL
CONTRA‑
CTUAL
CASH
FLOWS
A$
CARRYING
AMOUNT
(ASSETS)/
LIABIL‑
ITIES
A$
Firm settlements outstanding
Trade and other payables
7(a)
7(c)
9,638,297
695,297
–
–
–
–
332,147
365,065
436,484
–
–
–
9,638,297
9,638,297
695,297
695,297
1,133,696
1,133,696
7(d) 25,384,864
83,803
–
– 25,468,667 25,468,667
36,050,605
448,868
436,484
– 36,935,957 36,935,957
Lease liabilities
Borrowings
Total
As at 30 June 2019
Firm settlements outstanding
Trade and other payables
7(a)
7(c)
4,315,530
605,033
–
–
Borrowings
Total
7(d) 27,185,592
434,222
32,106,155
434,222
–
–
–
–
–
–
4,315,530
4,315,530
605,033
605,033
– 27,619,814 27,619,814
– 32,540,377 32,540,377
12 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 it 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
FY20
A$
FY19
A$
–
680,000
Dividends of $680,000 were paid in the year ended 30 June 2019 to the shareholders of QuickFee Australia Pty Ltd.
These dividends were paid prior to the legal acquisition of QuickFee Australia Pty Ltd by QuickFee Limited on 9 July 2019.
Accordingly, these dividends do not represent dividends of QuickFee Limited and should not be interpreted as such.
QuickFee Limited | Annual Report 2020
63
Notes to the financial statements Continued
12 Capital management (continued)
(b) Dividends (continued)
(ii) Franked dividends
Franking credits available for subsequent reporting periods based
on a tax rate of 27.5% (2019: 27.5%)
FY20
A$
FY19
A$
141,239
104,419
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 year.
The amounts include franking credits that would be available to the parent entity if distributable profits of subsidiaries were
paid as dividends.
13 Interests in other entities
(a) Controlled entities
The group’s controlled entities at 30 June 2020 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.
PLACE OF
BUSINESS/
COUNTRY OF
INCORPORATION
Australia
Australia
Australia
United States
United States
United States
United States
30 JUNE 2020
%
9 JULY 2019
%
30 JUNE 2019
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
–
–
–
–
–
–
–
As at 30 June 2019, legal ownership of the above mentioned controlled entities did not exist. 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.
14 Contingent liabilities
The group had no material contingent liabilities at 30 June 2020 (2019: nil).
64
15 Events occurring after the reporting period
On 23 July 2020, the group held an extraordinary general meeting (EGM) resulting in the approval of the directors’ participation
in the May 2020 capital raising. On 30 July 2020, the group issued 1,000,000 additional fully paid ordinary shares to each
of Barry Lewin, Bruce Coombes and Dale Smorgon at A$0.21 each (A$630,000 raised in total). The terms of the directors’
participation were identical to those of the other participants in the capital raising.
At the EGM, shareholders also approved the allotment of 300,000 options to each of Barry Lewin and Dale Smorgon as
disclosed in note 17(a).
No other matter or circumstance has occurred subsequent to period end that has significantly affected, or may significantly
affect, the operations of the group, the results of those operations or the state of affairs of the group or economic entity in
subsequent financial periods.
16 Related party transactions
(a) Controlled entities
Interests in controlled entities are set out in note 13(a).
(b) Key management personnel compensation
Short‑term employee benefits
Post‑employment benefits
Long‑term benefits
Detailed remuneration disclosures are provided in the remuneration report on pages 21 to 32.
(c) Transactions with other related parties
Sales and purchases of goods and services
Purchases of various goods and services from entities controlled by key management
personnel (i)
FY20
A$
FY19
A$
1,395,222
620,067
21,003
331,799
26,084
51,629
1,748,024
697,780
FY20
A$
FY19
A$
26,500
26,500
165,000
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 21 to 32.
(d) Loans to/from related parties
Loans from related parties are disclosed in note 7(d).
QuickFee Limited | Annual Report 2020
65
Notes to the financial statements Continued
17 Share‑based payments
The establishment of the ‘Performance Rights and Options Plan’ (PROP) was adopted on IPO of QuickFee Limited on
9 July 2019. The plan is designed to provide long‑term incentives for employees (including directors) and consultants to deliver
long‑term shareholder returns. Participation in the plan is at the board’s discretion and no individual has a contractual right to
participate in the plan or to receive any guaranteed benefits.
All performance rights and some options issued in the year ended 30 June 2020 were granted in January 2019 and January 2017,
respectively. However, the issuance of these securities was contingent on the IPO of QuickFee Limited. The remaining options
were granted in March and July 2020.
(a) Options
Set out below are summaries of options granted under the PROP:
As at 1 July
Issued/granted during the period:
As at 30 June
Vested and exercisable
AVERAGE
EXERCISE
PRICE PER
SHARE
OPTION
A$
–
0.426
0.426
0.336
FY20
NUMBER OF
OPTIONS
–
9,800,000
9,800,000
4,866,666
66
Share options outstanding at the end of the period have the following expiry dates and exercise prices:
GRANT DATE
HOLDER
ISSUE DATE
EXPIRY DATE
EXERCISE
PRICE
FY20
NUMBER OF
OPTIONS
2019‑01‑22
Bruce Coombes
2019‑07‑09
2023‑07‑09
2019‑01‑22
Bruce Coombes
2019‑07‑09
2023‑07‑09
2019‑01‑22
Bruce Coombes
2019‑07‑09
2023‑07‑09
2019‑01‑22
EverBlu Capital Pty Ltd
2019‑07‑09
2022‑07‑09
2019‑01‑22
EverBlu Capital Pty Ltd
2019‑07‑09
2022‑07‑09
2019‑01‑22
EverBlu Capital Pty Ltd
2019‑07‑09
2022‑07‑09
2020‑03‑18
Various employees
2020‑07‑30
2025‑06‑30
2020‑03‑18
Various employees
2020‑07‑30
2025‑06‑30
2020‑03‑18
Various employees
2020‑07‑30
2025‑06‑30
2020‑03‑18
Various employees
2020‑07‑30
2025‑06‑30
2020‑03‑18
Various employees
2020‑07‑30
2025‑06‑30
Options outstanding at end of financial year
2020‑07‑23
Barry Lewin
2020‑07‑30
2025‑07‑23
2020‑07‑23
Barry Lewin
2020‑07‑30
2025‑07‑23
2020‑07‑23
Barry Lewin
2020‑07‑30
2025‑07‑23
2020‑07‑23
Dale Smorgon
2020‑07‑30
2025‑07‑23
2020‑07‑23
Dale Smorgon
2020‑07‑30
2025‑07‑23
2020‑07‑23
Dale Smorgon
2020‑07‑30
2025‑07‑23
$0.300
$0.400
$0.500
$0.200
$0.300
$0.400
$0.500
$0.500
$0.500
$0.600
$0.750
$0.500
$0.500
$0.500
$0.500
$0.500
$0.500
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
866,666
666,666
666,668
500,000
500,000
9,200,000
100,000
100,000
100,000
100,000
100,000
100,000
Options granted after balance date included in share‑based payment expenses
9,800,000
Weighted average remaining contractual life of options outstanding at end of period
3.49 years
The grant of 3,000,000 executive options to Bruce Coombes was contingent on the IPO occurring. 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 A$0.30, A$0.40
and A$0.50, respectively. Class A options vested on 9 July 2020; Class B and C vest on 9 July 2021 and 2022, respectively,
contingent on continued employment at each vesting date.
The grant of 3,200,000 employee options across five tranches on 18 March 2020 vest at various dates contingent on continued
employment through to each vesting date. The second and third tranches also contain milestone conditions. These options expire
on 30 June 2025.
The 600,000 director options granted to Barry Lewin and Dale Smorgon on 23 July 2020 vest in three equal tranches at
30 June 2021, 2022 and 2023, respectively, contingent on continued employment through to each vesting date. These options
expire on 23 July 2025. As the grant date of 23 July 2020 occurred after the directors began rendering services in respect of
that grant, AASB 2 requires the group to commence recognition of the share‑based payment expense when the services are
received. Consequently, the group commenced amortisation of the share‑based payment expense on 6 May 2020 as detailed
in the EGM notice of meeting. The valuation inputs reflect the 23 July 2020 grant date fair value.
QuickFee Limited | Annual Report 2020
67
Notes to the financial statements Continued
17 Share‑based payments (continued)
(a) Options (continued)
(i) Fair value of options granted
The assessed fair value at grant date of options was determined using the binomial pricing model that takes into account
the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share,
the expected dividend yield, the risk‑free interest rate for the term of the option and certain probability assumptions.
GRANT DATE
EXPIRY DATE
EXERCISE
PRICE
NO. OF
OPTIONS
SHARE
PRICE AT
GRANT
DATE
EXPECTED
VOLATILITY
DIVIDEND
YIELD
RISK‑
FREE
INTEREST
RATE
FAIR
VALUE AT
GRANT
DATE PER
OPTION
2019‑01‑22
2023‑07‑09
$0.300
1,000,000
$0.125
2019‑01‑22
2023‑07‑09
$0.400
1,000,000
$0.125
2019‑01‑22
2023‑07‑09
$0.500
1,000,000
$0.125
2020‑03‑18
2025‑06‑30
$0.500
866,666
$0.190
2020‑03‑18
2025‑06‑30
$0.500
666,666
$0.190
2020‑03‑18
2025‑06‑30
$0.500
666,668
$0.190
2020‑03‑18
2025‑06‑30
$0.600
500,000
$0.190
2020‑03‑18
2025‑06‑30
$0.750
500,000
$0.190
2020‑07‑23
2025‑07‑23
$0.500
100,000
$0.770
2020‑07‑23
2025‑07‑23
$0.500
100,000
$0.770
2020‑07‑23
2025‑07‑23
$0.500
100,000
$0.770
2020‑07‑23
2025‑07‑23
$0.500
100,000
$0.770
2020‑07‑23
2025‑07‑23
$0.500
100,000
$0.770
2020‑07‑23
2025‑07‑23
$0.500
100,000
$0.770
82.0%
82.0%
82.0%
54.0%
54.0%
54.0%
54.0%
54.0%
88.0%
88.0%
88.0%
88.0%
88.0%
88.0%
0.0%
1.848%
$0.0522
0.0%
1.848%
$0.0446
0.0%
1.848%
$0.0391
0.0%
0.635%
$0.0441
0.0%
0.635%
$0.0441
0.0%
0.635%
$0.0441
0.0%
0.635%
$0.0369
0.0%
0.635%
$0.0291
0.0%
0.430%
$0.5732
0.0%
0.430%
$0.5732
0.0%
0.430%
$0.5732
0.0%
0.430%
$0.5732
0.0%
0.430%
$0.5732
0.0%
0.430%
$0.5732
(b) Performance rights
Set out below are summaries of performance rights granted under the PROP:
As at 1 July 2019
Issued during the period:
Vested during the period:
As at 30 June 2020
NUMBER OF
PERFORMANCE
RIGHTS
NOTES
–
5,851,370
8(a)(i)
(5,851,370)
–
In January 2017, two employees of QuickFee US agreed to each relinquish US$160,000 of salaries over an 18‑month period ending
in June 2018 in exchange for the grant of performance rights contingent on the IPO of QuickFee Limited. These performance rights
vested on QuickFee US having successfully contracted more than 300 firms (by number) within 24 months following the issue date.
Accordingly, 5,851,370 performance rights were issued on 9 July 2019, including 2,925,685 to the group’s Chief Operating
Officer, James Drummond. On 8 November 2019, these performance rights vested and 5,851,370 ordinary shares were issued.
68
(i) Fair value of performance rights granted
The assessed fair value at grant date of performance shares at grant date was determined using the binomial pricing model
that takes into account the term of the performance right, the share price at grant date and expected price volatility of the
underlying share, the expected dividend yield, the risk‑free interest rate for the term of the performance right and certain
probability assumptions.
GRANT DATE
EXPIRY DATE
EXERCISE
PRICE
NO. OF
PERF.
RIGHTS
SHARE
PRICE AT
GRANT
DATE
EXPECTED
VOLATILITY
DIVIDEND
YIELD
FAIR
VALUE AT
GRANT
DATE PER
PERFOR‑
MANCE
RIGHT
RISK‑
FREE
INTEREST
RATE
2017‑01‑31
2021‑07‑09
A$–
5,851,370
A$ 0.050
82.0%
0.0%
1.848% A$0.0500
(c) Expenses arising from share‑based payment transactions
Total expenses arising from share‑based payment transactions recognised during the period were as follows:
Options issued under PROP (contingent on IPO)
Other options issued under PROP (other)
Performance rights issued under PROP (contingent on IPO)
Shares issued under PROP (contingent on IPO)
8(a)(i)
NOTES
FY20
A$
135,900
49,153
292,568
160,000
Less: shares issued under PROP (contingent on IPO) transferred to share
issue transaction costs
8(a)(i)
(77,280)
560,341
FY19
A$
–
–
–
–
–
–
18 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
Audit and review of financial statements
Investigating accountant’s report
Total remuneration for audit and other assurance services
Total auditor’s remuneration
FY20
A$
77,150
–
77,150
77,150
FY19
A$
39,909
9,000
48,909
48,909
QuickFee Limited | Annual Report 2020
69
Notes to the financial statements Continued
19 Loss per share
(a) Reconciliation of loss used in calculating loss per share
Basic and diluted loss per share
Loss attributable to the ordinary equity holders of the company used
in calculating loss per share
(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
FY20
A$
FY19
A$
3,826,550
1,154,932
FY20
A$
FY19
A$
150,242,583
2,712,626
Due to the IPO conversion of QuickFee Australia and QuickFee US shares to QuickFee Limited shares on 9 July 2019 (refer to
note 8(a) for further details), the loss per share calculated for the year ended 30 June 2019 is not directly comparable with the
result presented for the year ended 30 June 2019.
On the basis of the group’s losses, the outstanding options are considered to be anti‑dilutive and were therefore excluded from
diluted weighted average number of ordinary shares.
20 Parent entity financial information
(a) Summary financial information
The individual financial statements for the parent entity, QuickFee Limited, show the following aggregate amounts:
Statement of financial position
Current assets
Non‑current assets
Total assets
Current liabilities
Total liabilities
Shareholders’ equity
Contributed equity
Other reserves
Accumulated losses
Loss for the period
Total comprehensive loss
70
FY20
A$
FY19
A$
217,348
11,444
21,588,301
4,618,687
21,805,649
4,630,131
88,553
3,152,564
88,553
3,152,564
25,035,956
2,524,252
185,053
–
(3,503,913)
(1,046,685)
21,717,096
1,477,567
2,457,228
1,046,685
2,457,228
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 year ended
30 June 2020 (2019: nil).
(c) Guarantees entered into by the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2020 or 30 June 2019.
(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 year ended 30 June 2020 (2019: 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.
(i) Investments in subsidiaries
Investments in subsidiaries are accounted for at cost in the financial statements of QuickFee Limited.
(ii) Tax consolidation legislation
QuickFee Limited and its wholly‑owned Australian controlled entities have implemented the tax consolidation legislation.
The head entity, QuickFee Limited, and the controlled entities in the tax consolidated group account for their own current
and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be
a stand‑alone taxpayer in its own right.
QuickFee Limited | Annual Report 2020
71
Summary of significant accounting policies
Contents
(a) Basis of preparation
(b) Principles of consolidation
(c) Segment reporting
(d) Foreign currency translation
(e) Revenue recognition
(f) Government grants
(g) Income tax
(h) Leases
(i) Cash and cash equivalents
(j) Loan receivables and firm payables
(k) Trade receivables
(l) Property, plant and equipment
(m) Trade and other payables
(n) Borrowings
(o) Employee benefits
(p) Contributed equity
(q) Loss per share
(r) Rounding of amounts
(s) Goods and services tax (GST)
73
74
74
74
75
75
75
75
76
76
76
76
76
77
77
78
78
79
79
72
21 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 years 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 cover the period from 1 July 2019 to 30 June 2020 (FY20). The comparative period is from
1 July 2018 to 30 June 2019 (FY19).
(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 and amended standards adopted by the group
The group has applied the following standards and amendments for the first time for their annual reporting period commencing
1 July 2019:
• AASB 16 Leases;
• AASB 2017‑6 Amendments to Australian Accounting Standards – Prepayment Features with Negative Compensation;
• AASB 2017‑7 Amendments to Australian Accounting Standards – Long‑term Interests in Associates and Joint Ventures;
• AASB 2018‑1 Amendments to Australian Accounting Standards – Annual Improvements 2015‑2017 Cycle;
• AASB 2018‑2 Amendments to Australian Accounting Standards – Plan Amendment, Curtailment or Settlement; and
•
Interpretation 23 Uncertainty over Income Tax Treatments.
The group also elected to adopt the following amendments early:
• AASB 2018‑7 Amendments to Australian Accounting Standards – Definition of Material.
The group had to change its accounting policies as a result of adopting AASB 16. This is disclosed in note 22. The other
amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to
significantly affect the current or future periods.
(iv) Changes to presentation – consolidated statement of profit or loss and other comprehensive income
QuickFee Limited decided in the current financial year to reformat the presentation of the consolidation statement of profit
or loss, including changes to the classification of its expenses. The group believes that this provides more relevant information
to its stakeholders. For example, the new format more clearly demonstrates the functional categories of expenditure that are
recurring and required to service the existing customer base (i.e. general and administrative and selling and marketing expenses)
and expenditures focused on the future growth and development of the group (i.e. customer acquisition and research and
development expenses). The comparative information has been reclassified accordingly. As part of the expense reclassification
undertaking, some amounts previously included in ‘general and administrative expenses’ have been re‑allocated to ‘IPO expenses’.
QuickFee Limited | Annual Report 2020
73
Notes to the financial statements Continued
21 Summary of significant accounting policies (continued)
(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, Chief Operating Officer and Financial Controller.
(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 dollars (A$), 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 are presented in the consolidated statement of profit or loss and other comprehensive income
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 statement of financial position presented are translated at the closing rate at the
date of that consolidated statement of financial position;
•
income and expenses for each 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.
74
(e) Revenue recognition
The accounting policies for the group’s revenue from contracts with customers are explained in note 4.
(f) Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be
received, and the group will comply with all attached conditions.
(g) 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.
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 group 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 where there is a legally enforceable right to offset current tax assets and liabilities
and where 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.
(i) Investment allowances and similar tax incentives
Companies within the group may be entitled to claim special tax deductions for investments in qualifying assets or in relation
to qualifying expenditure (e.g. the research and development tax incentive regime in Australia or other investment allowances).
The group accounts for such allowances as tax credits, which means that the allowance reduces income tax payable and current
tax expense.
(h) Leases
As explained in note 21(a) above, the group has changed its accounting policy for leases where the group is the lessee.
The new policy is described in note 7(b)(iii) and the impact of the change in note 22.
Until 30 June 2019, leases of property, plant and equipment where a significant portion of the risks and rewards of ownership
were not transferred to the group as lessee were classified as operating leases. Payments made under operating leases (net of
any incentives received from the lessor) were charged to profit or loss on a straight‑line basis over the period of the lease.
QuickFee Limited | Annual Report 2020
75
Notes to the financial statements Continued
21 Summary of significant accounting policies (continued)
(i) 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 statement of financial position.
(j) Loan receivables and firm payables
The accounting policies for the group’s loan receivables and firm settlements outstanding (firm payables) are explained in note 7(a).
(i) Impairment
The group assesses on a forward‑looking basis, the expected credit losses associated with its loan receivables carried at
amortised cost. The group applies the simplified approach permitted by AASB 9, which requires expected lifetime losses
to be recognised from initial recognition of the receivables, see note 11(b) for further details.
(k) Trade receivables
Trade receivables are amounts due from customers for services performed in the ordinary course of business. They are generally
due for settlement within 30 days and are therefore all classified as current. Trade receivables are recognised initially at the
amount of consideration that is unconditional unless they contain significant financing components, when they are recognised
at fair value. The group holds the trade receivables with the objective of collecting the contractual cash flows and therefore
measures them subsequently at amortised cost using the effective interest method. Details about the group’s impairment
policies and the calculation of the loss allowance are provided in note 11(b).
(l) Property, plant and equipment
Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items. Cost may also include transfers from equity of any gains or losses on qualifying cash
flow hedges of foreign currency purchases of property, plant and equipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured
reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other
repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.
Property, plant and equipment is recognised at historical cost less depreciation. Depreciation is calculated using the straight‑line
method to allocate the cost or revalued amounts of the assets, net of their residual values, over their estimated useful lives or,
in the case of leasehold improvements, the shorter lease term.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss.
(m) 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.
76
(n) 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.
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 statement of financial position 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.
(o) Employee benefits
(i) Short‑term benefits
Liabilities for annual leave that are expected to be settled wholly within 12 months after the end of the period in which the
employees render the related service are recognised in respect of employees’ services up to the end of the reporting period
and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current
employee benefit obligations in the consolidated statement of financial position.
(ii) Other long‑term employee benefit obligations
The group also has liabilities for long service leave and annual leave that are not expected to be settled wholly within 12 months
after the end of the period in which the employees render the related service. These obligations are therefore measured as
the present value of expected future payments to be made in respect of services provided by employees up to the end of the
reporting period using the projected unit credit method. Consideration is given to expected future wage and salary levels,
experience of employee departures and periods of service. Expected future payments are discounted using market yields
at the end of the reporting period of high‑quality corporate bonds with terms and currencies that match, as closely as possible,
the estimated future cash outflows. Remeasurements as a result of experience adjustments and changes in actuarial
assumptions are recognised in profit or loss.
The obligations are presented as current liabilities in the consolidated statement of financial position if the entity does not have an
unconditional right to defer settlement for at least 12 months after the reporting period, regardless of when the actual settlement
is expected to occur.
QuickFee Limited | Annual Report 2020
77
Notes to the financial statements Continued
21 Summary of significant accounting policies (continued)
(o) Employee benefits (continued)
(iii) Share‑based payments
Share‑based compensation benefits are provided to employees via the ‘Performance Rights and Options Plan’ (PROP),
an employee share scheme. Information relating to this scheme is set out in note 17.
Employee options
The fair value of options granted under the PROP are recognised as a share‑based payment expense with a corresponding
increase in equity. The total amount to be expensed is determined by reference to the fair value of the options granted:
•
including any market performance conditions (e.g. the group’s share price);
• excluding the impact of any service and non‑market performance vesting conditions (e.g. profitability, loan growth targets
and remaining an employee of the group over a specified time period); and
•
including the impact of any non‑vesting conditions (e.g. the requirement for employees to save or hold shares for a specific
period of time).
The total expense is recognised over the vesting period, which is the period over which all the specified vesting conditions are
to be satisfied. At the end of each period, the entity revises its estimates of the number of options that are expected to vest
based on the non‑market vesting and service conditions. It recognises the impact of the revision to original estimates, if any,
in profit or loss, with a corresponding adjustment to equity.
(p) 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.
(q) 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; and
• 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.
•
•
78
(r) 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.
(s) 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 statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.
22 Changes in accounting policies
This note explains the impact of the adoption of AASB 16 Leases on the group’s financial statements.
The group has adopted AASB 16 using the modified retrospective approach from 1 July 2019. The new accounting policies
are disclosed in note 7(b)(iii).
On adoption of AASB 16, the group applied the practical expedient of accounting for operating leases with a remaining
lease term of less than 12 months as at 1 July 2019 as short‑term leases. This resulted in no take up of right‑of‑use assets
and corresponding lease liabilities at 1 July 2019.
The group entered into two leases for offices suites, commencing on 1 January 2020 and 1 February 2020, for a period of five
years and three years, two months, respectively (with no extension options). Consequently, the group recognised right‑of‑use
assets and lease liabilities for these two leases for the year ended 30 June 2020. These liabilities were measured at the present
value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate at the commencement of each
lease. The weighted average lessee’s incremental borrowing rate applied to the lease liabilities on commencement was 4.15%.
QuickFee Limited | Annual Report 2020
79
Directors’ declaration
For the year ended 30 June 2020
In the directors’ opinion:
(a) the financial statements and notes set out on pages 37 to 79 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 group’s financial position as at 30 June 2020 and of its performance for the year ended
on that date, and
(b) there are reasonable grounds to believe that QuickFee Limited will be able to pay its debts as and when they become due
and payable.
Note 21(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 financial controller required by section 295A
of the Corporations Act 2001 .
This declaration is made in accordance with a resolution of the directors.
Barry Lewin
Non‑Executive Chairman
26 August 2020
80
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 2020, 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 2020 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
(including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
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.
QuickFee Limited | Annual Report 2020
81
Independent auditor’s report Continued
REVENUE RECOGNITION
Area of focus
As disclosed in Note 4 to the financial
statements, QuickFee Limited has three
distinct non-interest revenue streams
material to the audit, being a) its loan
application fees and b) its merchant fee
revenue; and c) its platform fee revenue.
These revenues are measured both at a
point in time and over time as the
performance condition is satisfied under the
contract.
There is risk that revenues that recognised
in-advance of the performance condition
being satisfied.
How our audit addressed it
Our testing concentrated on the following procedures:
— Examining the revenue policies for the individual
non-interest bearing revenue streams and tracing to
underlying documentation to determine if those
revenue streams are satisfied at a point in time or
over time;
— For those revenues earned at a point in time,
performing a sample of cut off testing to ensure that
revenues are earned in-accordance with the
underlying transaction; and
— For those revenues earned over time, tracing
through to the underlying performance condition
(being typically the underlying loan agreement) and
ensuring that revenues are released to the profit in
loss in line with the pro-rata satisfaction of that
condition.
We also ensured that disclosures of revenue recognition
and the accounting policy thereon are appropriate in the
financial statements.
SATISFACTION OF COMMON CONTROL TRANSACTIONS ARISING FROM THE IPO
Area of focus
As noted above, the Group completed an
IPO at the commencement of the reporting
period. There were several transactions
contractually covenanted to take place on
the IPO, as disclosed in the Prospectus for
the listing that materialised during the year,
including:
— The vesting and issue of 9,148,630
deferred consideration shares for
QuickFee US following the satisfaction
of milestone targets relating to the
writing of loan books and the signing up
of customers; and
— A payment of A$3,200,000 for the legal
acquisition of QuickFee Australia.
As stated in both the financial statements
and the Prospectus, these transactions
were made to shareholders of both the
QuickFee Australia and QuickFee US
shareholders in order to consummate the
How our audit addressed it
Our audit procedures included:
— Consulting with our Technical Team to determine
whether or not these transactions satisfied the
definition of common control transactions;
— Examining the substance of the transactions to
ensure that they were made to shareholders of both
entities in their capacity as shareholders;
— Ensuring the vesting conditions were satisfied prior to
the issue of the deferred consideration; and
— Cross-checking the results of our discussions with
management and inspection of legal documentation
relating to the Common Control transaction to
disclosures made in the Prospectus.
We also ensured that these transactions were
appropriately disclosed in the financial statements.
82
SATISFACTION OF COMMON CONTROL TRANSACTIONS ARISING FROM THE IPO
Area of focus
How our audit addressed it
common control transaction which occurred
in-advance of the listing and did not
stipulate any employment provisions in their
documentation.
VALUATION OF THE EXPECTED CREDIT LOSS PROVISION
Area of focus
How our audit addressed it
— We recalculated the value of the loan books as at
period end by tracing to a sample of loan contracts to
ensure that the loan book adequately aged loan
balances and identified any in-arrears exposures;
— We performed an ageing analysis of the Group’s loan
book to identify any deterioration since the prior
period;
— We examined individual firms with material
outstanding loan balances and we reviewed the going
concern status of these firms by performing
background checks, reviewing publicly available
information and ensuring sufficient credit checks were
performed;
— We performed subsequent receipt testing over
individual loans to identify potential exposures for the
Group; and
— Examination of the Group’s insurance policy to
quantify any net exposures for in-arrears loan
balances.
We also examined key disclosures relevant to credit risk
in the financial statements.
Historically, the Group has not been
exposed to significant credit risk on loan
receivables as the Group has recourse
against the borrowers to recover amounts
in respect of unpaid invoices used as
collateral for any loan granted. The risk of
default has been immaterial due to the
underlying professional services firms being
low risk, and sufficient credit checks being
performed prior to acceptance. In the
second half of the reporting period and to
the date of this report, the onset of the
COVID-19 pandemic has had an adverse
impact on the economies of both Australia
and the USA, being the two jurisdictions the
Group operates within.
With many companies in the professional
sphere facing major economic hurdles, the
risk of the underlying firms becoming
unable to service debts (should there be
recourse) has increased significantly.
Management has conducted a detailed
analysis and calculated a provision for
expected credit losses, with respect to firms
based in the US which are not insured
under credit insurance.
The key risk associated with this situation is
inadequate provision against expected
credit losses, which could result in
significant future costs.
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 2020, but does not include the financial report and
the auditor’s report thereon.
QuickFee Limited | Annual Report 2020
83
Independent auditor’s report Continued
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.
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
2020.
In our opinion, the Remuneration Report of QuickFee Limited for the year ended 30 June 2020, complies
with section 300A of the Corporations Act 2001.
84
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 August 2020
QuickFee Limited | Annual Report 2020
85
Shareholder information
The shareholder information set out below was applicable as at 21 August 2020.
A. Distribution of equity securities
Analysis of numbers of shareholders by size of holding:
NUMBER OF SHARES HELD
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total
NUMBER OF
HOLDERS
NUMBER OF
SHARES
% OF ISSUED
CAPITAL
463
1,626
645
907
154
344,944
4,238,226
5,094,414
27,989,672
153,597,031
0.18
2.22
2.66
14.63
80.31
3,795
191,264,287
100.00
There were 45 holders of less than a marketable parcel of ordinary shares.
Analysis of numbers of option holders by size of holding:
NUMBER OF OPTIONS HELD
NUMBER OF
HOLDERS
NUMBER OF
OPTIONS
% OF
OPTIONS
–
–
–
2
6
8
–
–
–
200,000
9,600,000
–
–
–
2.04
97.96
9,800,000
100.00
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total
86
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
UBS NOMINEES PTY LTD
DERIDA PTY LIMITED
HTI MANAGEMENT PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BONEC PTY LIMITED
JAMADA HOLDINGS PTY LIMITED
WINGATE DIRECT INVESTMENTS PTY LTD
SANDHURST TRUSTEES LTD
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