1
Annual Report 2016
Redbubble
Contents
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Contents
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85
FY2016 in Review
Highlights and Commentary
Chairman’s Letter
CEO’s Review
Directors’ Report
Auditor’s Independence Declaration
Remuneration Report
Consolidated Financial Statements
Directors’ Declaration
Independent Auditors’ Report
Shareholder and other ASX Required Information
Corporate Information
Founded in 2006, Redbubble is a global online
marketplace (redbubble.com) powered by
over 400,000 independent artists. Redbubble’s
community of passionate creatives sell
uncommon designs on high-quality, everyday
products such as apparel, stationary,
housewares, bags, wall art and so on. Through
the Redbubble marketplace independent
artists are able to profit from their creativity
and reach a new universe of adoring fans. For
customers, it’s the ultimate in self-expression.
A simple but meaningful way to show the
world who they are and what they care about.
Redbubble is listed on the ASXw
This report covers Redbubble Limited as a consolidated entity consisting of Redbubble Limited (referred to in this report
as Redbubble or the Company) and its controlled entities. Redbubble is a company limited by shares, incorporated
and domiciled in Australia (ACN 119200592). Its registered office is at Level 3, 271 Collins Street, Melbourne VIC 3000.
Redbubble is listed on the Australian Securities Exchange (ASX:RBL). Through the use of the internet, the Company
ensures that our corporate reporting is timely, complete and available globally. All press releases, financial reports and
other information are available on the Redbubble Investor Centre at shareholders.redbubble.com
2
Annual Report 2016
FY2016 in Review
Key financial and other metric highlights (year on year comparison)
$m for financial year (unless otherwise indicated)
FY15
FY16
% change**
Key financial metrics – Income Statement
GTV*
Repeat GTV*
Revenue from ordinary activities
Fulfiller expenses
Gross profit*
Gross profit margin (%)*
Operating expenses (exclusive of capitalised development costs)
EBITDA Loss* (inclusive of IPO costs $2.0M)
Loss per security (cents)
Key financial metrics – Balance Sheet (at 30 June)
Cash at bank
Borrowings
Intangible assets (Capitalised development costs)
Net tangible assets per security (cents)
Other metrics
Site visits (millions)
Conversion rate (% of visits)
Average Order Value (AOV) ($ per order)
Selling artists (thousands)
Unique customers (millions)
Products (as at 30 June) (number)
People (incl. contractors) (as at 30 June) (FTE)
88.4
28.8
71.1
47.0
24.1
142.9
50.7
114.6
75.6
39.0
33.9%
34.0%
30.1
6.5
0.07
14.0
15.2
4.6
(7.4)
103.1
1.75%
49.60
96
1.44
48
138
49.2
10.7
0.13
42.0
0.0
7.4
15.1
147.8
1.87%
52.60
154
2.20
57
182
61.7%
76.0%
61.2%
60.8%
61.8%
0.5%
57.2%
64.2%
85.7%
200%
(100%)
61.5%
304%
43.4%
6.9%
6.0%
61.6%
52.8%
18.8%
31.9%
* GTV, Gross profit, Gross profit margin and EBITDA (earnings before interest, tax, depreciation and amortisation) are non-IFRS measures that are presented to
provide readers a better understanding of Redbubble’s financial performance and position. The non-IFRS measures are unaudited, however, they have been
derived from the audited financial statements.
** % change calculations for key financial metrics based on numbers to nearest thousand dollars ($000).
2
3
Highlights and Commentary
• Gross Transaction Value (GTV), Revenue, Gross Profit
• Paid marketing expense was $7.7M up 79.8% and
and EBITDA Loss for FY16 are in line with or better
generated $45.9M in GTV ($12.3M in gross profit).
than the forecast set out in the company’s prospectus
Total paid marketing spend was 5.4 cents for every
issued in May 2016.
dollar of GTV generated.
• GTV, the total of sales processed through the
An analysis of FY16 operating expenses and the extent
Redbubble site less refunds, fraudulent transactions
they were expended to generate growth can be found
and chargebacks, was up $54.5M or 61.7% due to
on slide 39 of the attached Investor Presentation.
increase in all major metrics:
o Visits were up 44.7M or 43.4% to 147.8M
• EBITDA Loss (Gross profit less operating expenses)
was $8.7 million (before IPO costs) (up from $6.5
with growth in visits from mobiles (70.9%)
million) as the company continued to grow its
significantly outstripping growth from desktop
(28.5%) with mobile visits representing 44.5%
marketplace. The scaling benefits began to show in
the second half of the year.
of total visits for the year.
o Conversion rate up 6.9% to 1.87% despite the
increasing incidence of mobile visits which
• Tax expense of $3.4M despite the loss before tax, due
largely to the non-recognition of tax losses and R&D
offsets totalling $25.9M incurred prior to IPO. This
typically convert to sales at a lower rate than
comprises $15.5M of accumulated tax losses and R&D
those from desktop.
offsets as at June 2015 and $10.4M relating to FY16
o Average Order Value (AOV) up $3.00 or 6.0%
to $52.60 entirely as a result as of the impact
of foreign exchange rates. Nominally, AOV
up until the IPO.
•
IPO completed on 16 May 2016 raising $30.0M of
new equity capital and resulting in conversion of
was down by 4.2% reflecting product mix with
$15.5M Cumulative Redeemable Preference Shares
minimal price movements.
and$12.25M of Pre-IPO convertible notes into equity.
• Geographic split of GTV by region is largely
• Cash on hand balance at 30 June was $42.0M, up
from $14.0M following completion of the IPO.
unchanged compared to prior year (FY16/ FY15):
• As at 30 June 2016, the company has no debt.
o Americas
65%/64%
o Europe
27%/27%
o Oceania
7%/8%
o Rest of world
1%/1%
• Revenue (GTV less sales taxes and artists’ margin,
adjusted for unearned revenue pending shipment)
was up $43.5M or 61.2%.
• Gross profit (Revenue less Fulfiller expenses) as a
percentage of Revenue was 34.0% up from 33.9% in
the prior year.
• Operating expenses of $47.2M (exclusive of costs
relating to the IPO) were up 57.2% although the
increase slowed significantly in 2HFY16 (see half-year
by half-year analysis below).
4
Redbubble
Chairman’s Letter
The past year has been a big year for Redbubble, the
Redbubble’s strong FY2016 results reflect the skill and
highlight being our successful listing on the ASX on 16th
dedication of a strong and capable executive team. On
May. The arduous listing process did not distract the
behalf of the board, I would like to thank all the
operating teams. Redbubble delivered strong financial
Redbubble staff for all their achievements over the year.
performance and high growth across all strategic
We look forward to continuing to grow Redbubble with
measures.
you. The best is yet to come!
Redbubble continues to make great strides on its goal to
Yours faithfully,
build a company of enduring value. To achieve the goal,
Redbubble’s is creating the world’s largest marketplace
for independent artists. In doing so, Redbubble will bring
more creativity into the world. I am more confident than
ever that Redbubble will deliver and become a great
Australian-based company on the global stage.
Redbubble is not immune from global economic
conditions and foreign exchange volatility. Redbubble
Richard Cawsey
seeks to mitigate this by diversifying and broadening
Chairman
its business while localising production. To this end,
19 September 2016
Redbubble brought on new fulfillment partners around
the world. Redbubble also launched its German and
Spanish language websites.
Redbubble also continues to strengthen and develop
its governance practices, processes and capabilities.
They are described in our 2016 Corporate Governance
Statement on our Investor Centre website.
During the year Grant Murdoch joined our board as an
independent Non executive Director and Chair of the
Audit and Risk Committee. Grant has tremendous listed
company experience and has proved to be an invaluable
addition to the board. Chris Nunn, moved from the board
into an executive role, becoming our CFO.
4
5
Annual Report 2016 CEO’s Review
FY2016 was an exceptional year for Redbubble. The
The Company’s mission reflects the value it delivers to
Company achieved outstanding growth in its top-line and
the various participants in the Redbubble marketplace.
continued rapid scaling in its business. At the same time it
Redbubble is not just a business, it is a myriad of human
concluded a successful IPO raising a total of $42 million
experiences. As some of the customers have said:
(including the conversion of a pre-IPO round).
Redbubble is well positioned for continued strong growth. It
has the capabilities, resources and balance sheet to pursue
the opportunity before it. Future growth is not limited by the
Australian domestic market as over 90% of the Company’s
revenue is from offshore.
The Company participates in large consumer categories,
online apparel, accessories and homewares, where the
ability to grow is limited only by effective execution
capabilities. Further the Company can grow in a highly
scaleable way given its strong cash flow cycle and low
customer acquisition costs.
During FY2016 Redbubble’s full year revenue was $114.6M
(up 61.2% on FY2015) with a Gross Profit of $39.0M (up
•
“Redbubble is overflowing with wonderful and
creative designs that offer so much for reasonable
prices. I am a very happy repeat customer who is
looking forward to my next purchase.” Nichole via
Delighted
•
“I love how Redbubble provides independent artists
with a platform for selling their work. The customer
service, quality, and range of pieces is amazing!”
Coppelia via Delighted
•
“It was just an awesome experience. The products are
beyond unique, you can’t find certain t-shirts, throw
pillow cases, or iPad cases anywhere else. And the
quality of the t-shirts is great. Very much worth the
money.” David via Delighted
61.8% on FY2015) and an EBITDA loss of $8.7M. The EBITDA
Or in the words of some of the artists:
loss was $1.5M better than forecast at the time of the
IPO. These results show that the business is scaling well.
Revenue growth is ahead of operating expenditure growth,
margins are stable and customer acquisition costs are low.
The success in the business during FY 2016 reflects over
9 years of work that has gone into building a dynamic
marketplace that matches artists with consumers who
love their work. We are committed to building a company
of enduring value, focused on our mission of “creating
the world’s largest marketplace for independent artists,
bringing more creativity into the world.”
•
“I sell my artwork on a lot of different sites, but my
success on Redbubble is leaps and bounds ahead
of any of the other websites. It’s crazy - because
Redbubble is the only one that lets me set my royalty.
Thank you for being the BEST at what you do.” Kelly,
USA.
•
“I’ve tried most of the others but have found
Redbubble to be far superior as it is incredibly easy
to upload, the community is much more open and
friendly and I’ve earned much more money through it
than any other site.” Tom, Australia
•
“One of the nicest things I’ve found about Redbubble
One measure of the Company’s success in pursuing the
is the fact that you actually seem to care about artists
mission is that during FY2016 artists earned $20.7 million
and the people behind the work.” Michaela, Canada
through the marketplace (up 56.8% on FY2015), taking
their total earnings since the launch of Redbubble in
2007 to $53.3m.
6
Redbubble CEO’s Review (continued)
FY2016 Summary
FY2016 Operational Review
The core of the Company’s strategy is building on the
distinctive value created in the Redbubble marketplace.
In summary, this involves enhancing the marketplace
dynamics by attracting more artists, content and
customers in a virtuous cycle. In FY2016 the strategy has
been successful in delivering top-line Gross Transaction
Value (GTV) growth of 61.7% to $142.9 million, revenue
growth of 61.2% to $114.6 million and gross profit growth
of 61.8% to $39.0 million.
The growth in the business builds on nine years of strong,
organic growth. Over the past 3 years the compound
annual growth rate in GTV was 62% per year.
27%
65%
7%
Americas
Europe
Oceania
1%
Rest of World
New Products
Over the year Redbubble increased the range of physical
Gross Transaction Value by Financial Year, $Millions
products, with a particular focus on women’s apparel.
Redbubble introduced advanced technology that involves
$142.9
printing on the material before laser cutting and sewing.
$88.4
$59.3
$33.7
$15.7
$3.6
$4.2
$6.0
$1.2
FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016
Growth in financial outcomes have been supported by
growth in the key operating metrics:
Overall, twelve new products were added:
• Journals
• Women’s Fitted Scoop Neck Tee
• Women’s V-neck Tee
• Women’s Relaxed Fit Tee
• Laptop Sleeve
• Graphic Tee
• Women’s A-Line Dress
• Men’s Tri-blend Tee
• Women’s Chiffon Top
• Women’s Contrast Tank
• Men’s Heavy Tee
• iPhone Wallet
• Visits to the site – Up 43% to 147.8 million for the year
Three products were discontinued during the year.
• Conversion of those visits to purchase –
Up 7% to 1.87% of visits
• Average Order Value (AOV) – Up 6% to $52.60
Artists
The number of selling artists grew in line with GTV
growth, with 154,000 artists making sales during the year
(a growth of 62%). At year end there were 438,000 artists
The geographic split of sales (as shown below) remained
and 10.2 million works in the Redbubble marketplace.
essentially unchanged from last year, reflecting the
During FY2016 the artists earned a total of $20.7 million.
strong, balanced growth across all regions.
1 GTV (Gross Transaction Value) = Total receipts from customers less fraud,
refunds and chargebacks
Mobile
Reflecting general trends in internet user behaviour,
over 50% of traffic to the Redbubble marketplace now
comes from mobile devices. Significant work has gone
into improving the functionality and performance of
6
7
Annual Report 2016
CEO’s Review (continued)
the mobile website and growth in mobile visits has been
Supply chain enhancements
the primary driver of overall growth in visits. Mobile
In the first half of FY2017 Redbubble will focus on
visits tend to convert to sales at a lower rate than those
delivering greater direct-to-garment print capacity in core
from desktop. Despite this, improvements in the site
markets (specifically West Coast of the USA and Canada)
experience overall, and particularly in mobile, generated
for peak Christmas demand as well as more home-wares
increased overall conversion rates.
capability including bringing on new fulfillers. The second
Fulfilment
half will likely bring additional fulfillers including for wall
art and associated print products and home-wares in
An expanded and more localised third party fulfilment
Europe.
network has significantly improved the customer
experience by enabling shorter delivery times. One new
Artist community
fulfiller and eight new production locations were added to
Redbubble’s main focus this year will be on enhancing
the network during the year. The average delivery time fell
the ability of artists to drive traffic from social networks
from 5.1 business days to 4.2 business days (June 2015 vs
by improving the set of tools available to them to easily
June 2016). Customer satisfaction, as measured by Net
share new works, promotions and special activities on the
Promoter Score, increased from 59 to 63 (June 2015 vs
Redbubble platform. Work will also continue on piracy
June 2016).
New Markets
protection for artists and further automation of artist
authentication.
Considerable investment was made into developing the
New markets
technology and capabilities to launch native language
Redbubble’s new markets team will be concentrating on
websites in order to increase penetration into non-English
bedding down the three new sites (German, French and
speaking markets. A German language site was launched
Spanish) and driving deeper penetration into these new
in March, a French language site launched in June and a
markets.
Spanish language site launched in August.
FY2017 Outlook
Change in Key Management
Personnel (KMP)
In FY2017, Redbubble will continue to pursue a strategy
During FY2016
of enhancing the marketplace dynamics, focusing in
particular on improving the on-site user experience,
launching new physical products, increasing delivery
speeds, growing artist earnings and strengthening
penetration into the western European markets.
• Vanessa Freeman was appointed as Chief People and
Culture Officer with effect from 25 August 2015.
• Chris Nunn was appointed as the Chief Financial
Officer with effect from 1 November 2015 (following
his time as a Director and Chair of Redbubble’s Audit
On-site user experience
& Risk Committee).
Redbubble will continue to focus on the mobile experience.
• Victor Kovalev was appointed as the Chief Technology
There will be renewed attention on site speed as the
Officer with effect from 14 December 2015.
total content library expands and it becomes increasingly
important to serve customers images quickly and
Additional Information
seamlessly. Personalisation will be a new theme, enabling
Additional background on Redbubble, the core drivers
Redbubble to learn about users (and groups of users) and
and metrics for the business and strategy is covered in
to serve more relevant content to every unique visitor to
the Management Presentation delivered on the release
the site. A prototype native iOS application, with different
of the FY2016 Full Year Results. These may be found at:
capabilities than the core experience, will also be trialled.
shareholders.redbubble.com.
New products
A strong flow of new product is in the pipeline for FY2017, with
a focus on homewares and art categories for the first half of
the year. At this stage, it is anticipated the second half focus will
be line extensions to the existing apparel categories, offering
customers greater choice and better value.
Martin Hosking
Chief Executive Officer
19 September 2016
8
Redbubble Directors’ Report
8
9
Directors’ Report
Your Directors present their report on the consolidated
consumers. The products are produced and shipped by
entity, consisting of Redbubble Limited and the entities it
third party service providers (i.e., product manufacturers,
controlled during the year ended 30 June 2016 (referred
printers and shipping companies) referred to as fulfillers.
to hereafter as Redbubble).
No significant change in the nature of these activities
Directors
occurred during the year.
Dividends
The following persons were directors of the Redbubble
during the 2016 financial year (FY2016):
No dividends were paid or declared since the start of
FY2016.
Mr Richard Cawsey
Chair, Non-executive
Director
Review of operations
Mr Martin Hosking
Managing Director and
Chief Executive Officer
(CEO)
Ms Stephanie Tilenius
Non-executive Director
Through FY2016 Redbubble focused on delivering growth
by continuing to enhance the marketplace dynamics:
attracting more artists, content and customers in a
virtuous cycle. The strategy has been successful in
delivering top-line Gross Transaction Value (GTV) growth
of 61.7% to $142.9 million, revenue growth of 61.2% to
$114.6 million and gross profit growth of 61.8% to $39.0
Ms Teresa Engelhard
Non-executive Director
million.
Mr Greg Lockwood
Non-executive Director
Mr Grant Murdoch
Non-executive Director
(appointed 1 January
2016)
Mr Chris Nunn
Non-executive Director
(resigned 28 October
2015 to take up role
as Chief Financial
Officer commencing 1
November 2015)
Principal activities
Growth in financial outcomes has been supported by
growth in the key operating metrics:
• Visits to the site – Up 43% to 147.8 million for the year
• Conversion of those visits to purchase – Up 7% to
1.87% of visits
• Average Order Value (AOV) – Up 6% to $52.60
Reflecting general trends in user behavior, over 50%
of traffic to the Redbubble marketplace now comes
from mobile devices. Significant activity has gone into
improving the functionality and performance of the
mobile website and growth in mobile visits has been the
primary driver of overall growth in visits. Mobile visits
tend to convert to sales at a significantly lower rate
than those from desktop. Despite this, improvements in
the site experience overall, and particularly in mobile,
resulted in the increase overall conversion rates.
Redbubble, through its website at Redbubble.com and
Over the year Redbubble increased the range of physical
three foreign language sites, is an online marketplace that
products, with a particular focus on women’s apparel,
facilitates the sale and purchase of art and designs on a
including using advanced technology printing of the
range of products between independent creatives and
material before laser cutting it and sewing it.
10
11
Redbubble Overall, twelve new products were added:
circumstances arising since the end of the 2016 financial
•
Journals
• Women’s Fitted Scoop Neck Tee
• Women’s V-neck Tee
• Women’s Relaxed Fit Tee
•
Laptop Sleeve
• Graphic Tee
• Women’s A-Line Dress
• Men’s Tri-blend Tee
• Women’s Chiffon Top
• Women’s Contrast Tank
• Men’s Heavy Tee
•
iPhone Wallet
Three products were discontinued during the year.
year that has significantly affected, or may significantly
affect:
• Redbubble’s operations in future financial years;
•
the results of those operations in future financial
years; or
• Redbubble’s state of affairs in future financial years.
Strategy and likely developments in operations
In FY2017, Redbubble will continue to pursue a strategy
of enhancing the marketplace dynamics, focusing in
particular on improving the on-site user experience,
launching new physical products, increasing delivery
speeds, growing artist earnings and strengthening
penetration into the German, French and Spanish
language markets.
An expanded and more localised third party fulfillment
network has significantly improved the customer
On-site user experience: There will be a continuing
experience by enabling shorter delivery times. One new
focus on the mobile experience. Site speed will
fulfiller and eight new production locations were added
receive renewed attention as the total content library
to the network during the year. The average delivery time
expands and it becomes increasingly important to serve
fell from 5.1 business days in June 2015 to 4.2 business
customers images quickly and seamlessly. Personalisation
days in June 2016. Customer satisfaction as measured by
will be a new theme enabling Redbubble to learn about
Net Promoter Score increased from 59 in June 2015 to
63 in June 2016.
users (and groups of users) and to serve more relevant
content to every unique visitor to the site. A prototype
native iOS application, with different capabilities than the
The number of selling artists grew in line with GTV
core experience, will also be trialed.
growth with 154,000 artists making sales during the year
(a growth of 62%). At year end there were 438,000 artists
New products: A strong flow of new product is in the
and 10.2 million works in the Redbubble marketplace.
pipeline for FY2017 with a focus on homewares and art
categories for the first half of the year. At this stage, it is
Considerable investment was made into developing the
anticipated the second half focus will be line extensions
technology and capabilities to launch native language
to the existing apparel categories, offering customers
websites in order to increase penetration into non-
greater choice and better value.
English markets. A German language site was launched
in March and a French language site was launched in
Supply chain enhancements: In the first half of FY2017
June (ahead of plan). A Spanish language site is now in
there will be a focus on delivering greater direct-to-
final testing and will be launched in full in the September
garment print capacity in core markets (specifically
quarter of FY2017.
Significant changes in the state of affairs
West Coast of the USA and Canada) for peak Christmas
demand as well as more homewares capability including
bringing on new fulfillers. The second half will likely bring
additional fulfillers including for wall art and associated
print products and homewares in Europe.
Redbubble launched its initial public offering (IPO) and
listed on the Australian Securities Exchange (ASX) on
Artist community: The main focus this year will be
16 May 2016. Apart from the IPO and ASX listing, in the
on enhancing the ability of artists to drive traffic from
Directors’ opinion there have been no significant changes
social networks by improving the set of tools available
in the state of affairs of Redbubble during the year.
Significant events after end of 2016 financial year
to them to easily share new works, promotions and
special activities on the Redbubble platform. Work will
also continue on piracy protection for artists and further
In the Directors’ opinion there have been no matters or
automation of artist authentication.
10
11
Annual Report 2016 New markets: After full roll-out of the Spanish site early
Information on directors
in FY2017, the new markets team will be concentrating on
bedding down the three new sites (German, French and
Mr Richard Cawsey
Spanish) and driving deeper penetration into these new
Non-executive Director and Chair of the Board
markets.
Chair of Nomination Committee
Member of Audit and Risk Committee
Change in Key Management Personnel (KMP) during
Richard Cawsey has a 27-year track record of building
FY2016 and since the end of that financial year
high-performing organisations in Australia, Europe, North
• Vanessa Freeman was appointed as Chief People and
Culture Officer with effect from 25 August 2015.
• Chris Nunn was appointed as the Chief Financial
Officer with effect from 1 November 2015 (following
his resignation as a Director and Chair of Redbubble’s
Audit & Risk Committee).
America and Asia. in addition to chairing Redbubble, he is
the executive chair of Denali Venture Partners, a team of
advisers and execution partners that help fast growing
companies realise their potential. Richard has held a
number of board and senior executive roles for ASX listed
companies including OAMPS Ltd (as a non-executive
director), Centrepoint Alliance Ltd (as the managing
director and CEO), Advance Property Management Ltd
• Victor Kovalev was appointed as the Chief Technology
(as chair) and Wealthpoint ltd (as chair). As the managing
Officer with effect from 14 December 2015.
Governance and risk
director and CEO of Centrepoint Alliance ltd, Richard
drove the cultural and organisational transformation
required to survive as a listed finance company during the
global financial crisis. At St. George Bank (then Australia’s
5th largest), as group executive investment services,
Redbubble is committed to strong and effective
Richard created a new division and played a significant
governance frameworks. Redbubble’s corporate
role in the bank’s restructure and increased profit and
governance policies are described in the Redbubble
growth by over 25%. In Asia for Morgan Stanley, as a
Corporate Governance Statement - available in the
managing director, Richard had success in both starting
Corporate Governance section of Redbubble’s Investor
and growing a number of businesses. Richard has a
Centre: shareholders.redbubble.com
Bachelor of Commerce (Hons) degree from Australian
National University and is a graduate of the Australian
The Company is committed to managing its risks in
Institute of Company Directors.
an integrated, systematic and practical manner. The
overall objective of risk management is to assist the
Company to achieve its objectives by appropriately
Mr Martin Hosking
considering both threats and opportunities, and making
CEO and Managing Director
informed decisions. The Audit and Risk Committee
Member of Nomination Committee
oversees the process for identification and management
of risk in the Company, as described in the Redbubble
Martin Hosking has spent 20 years scaling Australian
Corporate Governance Statement. The Company
technology companies. He is a co-founder of Redbubble
Secretaries are responsible for providing oversight of
and became the CEO and Managing Director in July
the risk management framework and assurance on the
2010. Previously, Martin was the chair of Aconex, a SaaS
management of significant risks to the CEO and the
provider to construction firms, and Southern Innovation,
Board.
a digital pulse processing solution. He was instrumental in
the development and subsequent listing on the NASDAQ
The Company’s risk management framework,
of search company, LookSmart. Martin started his career
responsibilities and accountabilities are aligned with
as a diplomat with the Australian Department of Foreign
the Company’s business model. A statement of the
Affairs and Trade before joining McKinsey & Company,
Company’s risk management policy is provided in the
serving clients focusing on emerging technologies. Martin
Redbubble Corporate Governance Statement. The key
has a Bachelor of Arts (Hons – First class) degree from
organisational controls within the risk management
the University of Melbourne and an MBA (with distinction)
framework help to shape the strategies, capabilities
from Melbourne Business School, where he has also
and culture of the organisation, identify and address
lectured. Martin is a graduate of the Australian Institute of
vulnerabilities, strengthen the system of internal controls
Company Directors.
and build a more resilient organisation. The Company
also has a risk register with risk profiles populated across
various functions within the organisation.
12
Redbubble
Ms Teresa Engelhard
Independent Non-executive Director
Chair of Remuneration Committee
Mr Greg Lockwood
Independent Non-executive Director
Member of Audit and Risk Committee
Teresa Engelhard is a Silicon Valley transplant with 20
Greg Lockwood was appointed as a Non-executive
years of experience working with growth technology
Director with effect from June 2015. Greg is a partner
companies as a director, executive and venture capitalist.
of Piton Capital, which is a shareholder in Redbubble.
Teresa has served on over 10 boards and in addition to
In 1999, Greg founded UBS Capital’s early stage
being a Non-executive director of Redbubble, is currently
venture investing activities in Europe. Subsequently, he
a non-executive director of Planet Innovation, Ltd. and
co-founded Piton Capital, the London-based venture
StartupAUS. Teresa also serves on the Entrepreneurs’
capital fund specialising in marketplaces and business
Programme Committee for the Australian Government, a
models with network effects. Prior to his venture
sub-committee of the Innovation Australia Board. Teresa
capital activities, Greg worked in telecommunications
transitioned to a non-executive director path following
corporate finance with UBS in London and Zurich and
six years as a managing partner with Jolimont Capital in
held operating roles in classified media publishing in
Melbourne, where she was responsible for the investment
Toronto. Greg has an Honours Business degree from
in Next Window, which received an Australian Private
the University of Western Ontario, and a Master’s degree
Equity & Venture Capital Association Limited chairman’s
in management from the Kellogg Graduate School of
award in 2010 for outstanding exit performance. Prior to
moving to Australia, Teresa worked as a c-level executive
at both private and public IT companies and as a venture
Management.
capitalist with Mohr Davidow Ventures in California.
Mr Grant Murdoch
Teresa spent the early years of her career at McKinsey &
Independent Non-executive Director
Company in Los Angeles. She has a Bachelor of Science
Chair of Audit and Risk Committee
(Hons) degree from the California Institute of Technology
Member of Remuneration Committee
and an MBA from Stanford University. Teresa is a graduate
of the Australian Institute of Company Directors.
Grant Murdoch joined the Board as an independent
Ms Stephanie Tilenius
Independent Non-executive Director
Member of Remuneration Committee
Member of Nomination Committee
Non-executive Director and Chair of the Audit and Risk
Committee in January 2016. Grant has subsequently
joined the Remuneration Committee. Grant has more
than 37 years’ chartered accounting experience. From
2004 to 2011, Grant led the corporate finance team
for Ernst & Young Queensland and was an audit and
corporate finance partner with Deloitte from 1980 to
Stephanie Tilenius has been an executive-in-residence at
2000. Grant has extensive experience in providing advice
Kleiner Perkins Caufield & Byers, a venture capital firm,
in relation to mergers, acquisitions, takeovers, corporate
since June 2012, primarily focusing on companies within
restructures, share issues, pre-acquisition pricing due
its digital growth fund. From February 2010 until June
diligence advice, expert reports for capital raisings and
2012, Stephanie was a vice president of global commerce
initial public offerings. Grant is currently a director and
and payments at Google, Inc., where she oversaw digital
the chair of the audit committees for each of ALS limited
commerce, product search and payments. Prior to joining
(formerly Campbell Brothers), QIC limited and OFX
Google, Stephanie was at eBay, Inc. from March 2001
limited (previously Ozforex Limited). He is a senator of
until October 2009, where she progressed to senior vice
the University of Queensland (as well as chair of the risk
president of eBay.com global products. Stephanie was
committee and a member of the finance committee),
also a co-founder of PlanetRx.com and has worked at
an adjunct professor at the University of Queensland
other technology and business enterprises. Stephanie
Business School and a director of UQ Holdings Limited.
has served as a director of Coach, a NYSE-listed luxury
accessories brand, since August 2012, and as a director
Grant has a Master’s degree in Commerce (Honours)
from the University of Canterbury, New Zealand, is a
of Seagate Technology since October 2014. She is also
graduate of the Kellogg Advanced Executive Program
on the board of Tradesy, and is the chair of the advisory
and the Advanced Leadership Program at North Western
board of the Harvard Business School California Research
University and a fellow of the Institute of Chartered
Center. Stephanie holds a Bachelor of Arts degree and a
Accountants in Australia (as well as past chair at the
Master’s degree in International Finance from Brandeis
Queensland committee and a member of the national
University, Massachusetts, and an MBA from Harvard
professional standards committee) and of the Australian
University, Massachusetts.
Institute of Company Directors and is a member of the
AICD Queensland State Council.
13
12
Annual Report 2016
Company Secretaries
Redbubble’s Company Secretaries are Ms Corina Davis
(located in the United States) and Mr Paul Gordon
(located in Australia).
Ms Corina Davis
Mr Paul Gordon
General Counsel and Company Secretary (US)
Regional Counsel and Company Secretary (Australia)
Corina Davis joined Redbubble in 2012 and oversees the
Paul Gordon joined Redbubble in early 2015. Paul has
company’s legal function. Corina has a wide range of
broad corporate and commercial legal experience,
cross-functional experience with particular expertise
gained in-house and in top-tier law firms in Australia,
in copyright and trademark law, litigation, compliance
the UK and New Zealand. Before joining Redbubble,
and risk management. Before joining Redbubble,
Paul was the General Counsel at ASX-listed REA Group
Corina practiced law in Los Angeles and New York City
Ltd, operator of realestate.com.au. Before that Paul was
at Milstein Adelman, McCurdy & Fuller and Mendes &
a Senior Corporate Associate at Nabarro in the UK and
Mount. Corina is an active member of the Women’s
also practiced at Hogan Lovells (UK) and Chapman Tripp
General Counsel Network and
(NZ). Paul holds a Bachelor of Laws (Honours), Masters
the San Francisco General Counsel Group. Corina holds a
of Commerce from the University of Canterbury, New
Bachelor of Arts degree from the University of Michigan,
Ann Arbor and a Juris Doctor degree from the University
Zealand, and is currently completing a Diploma in Applied
Corporate Governance.
of San Diego School of Law, California.
Meetings of directors
Meetings of directors
Meetings of directors
Richard Cawsey
Richard Cawsey
Martin Hosking
Martin Hosking
Teresa Engelhard
Teresa Engelhard
Greg Lockwood
Greg Lockwood
Stephanie Tilenius
Stephanie Tilenius
Grant Murdoch (1)
Grant Murdoch (1)
Chris Nunn (2)
Chris Nunn (2)
Board
Board
Held
whilst in office
Held
whilst in office
15
Attended
whilst in office
Attended
whilst in office
15
Audit and Risk Management
Committee
Audit and Risk Management
Committee
Held
whilst in office
Held
whilst in office
6
Attended
whilst in office
Attended
whilst in office
6
Remuneration Committee
Nomination Committee
Remuneration Committee
Nomination Committee
Held
whilst in office
Held
whilst in office
-
Attended
whilst in office
Attended
whilst in office
-
Held
whilst in office
Held
whilst in office
1
Attended
whilst in office
Attended
whilst in office
1
15
15
15
15
15
15
15
15
15
10
10
4
4
15
15
15
15
15
15
15
11
11
9
9
4
4
6
-
-
-
-
6
6
-
-
3
3
3
3
6
-
-
-
-
6
6
-
-
3
3
3
3
-
-
-
4
4
-
-
4
4
1
1
3
3
-
-
-
4
4
-
-
2
2
1
1
3
3
1
1
1
-
-
-
-
1
1
-
-
-
-
1
1
1
-
-
-
-
1
1
-
-
-
-
(1) Grant Murdoch joined the Audit and Risk Committee as Chair on 1 January 2016
(2) Chris Nunn resigned from the Board abd as Audit and Risk Committee Chair on 28 October 2015 (before commencing as CFO on 1 November 2015).
14
Redbubble
Retirement, election, continuation in office of directors
Customer Support and Business Intelligence. Originally
trained as a chemical engineer, Rob completed his MBA
Under Redbubble’s constitution, directors cannot serve
at the Melbourne Business School and has held various
beyond three years or the third Annual General Meeting
senior roles in the fuel cell and e-commerce industries in
(AGM) after their appointment, whichever is longer,
North America and Australia.
without submitting for re-election by the Company.
A retiring Director is eligible for re-election without
Ms Corina Davis, General Counsel and Company
needing to give any prior notice of an intention to submit
Secretary
for re-election and holds office as a Director (subject to
Corina Davis joined Redbubble in 2012 and oversees
re-election) until the end of the general meeting at which
the Company’s legal function. Corina has a wide range
the Director retires.
of cross-functional experience with particular expertise
in copyright and trademark law, litigation, compliance
and risk management. Before joining Redbubble,
The Redbubble Senior Leadership Team
Corina practiced law in Los Angeles and New York City
Mr Martin Hosking, Chief Executive Officer
Mount. Corina is an active member of the Women’s
at Milstein Adelman, McCurdy & Fuller and Mendes &
See above.
General Counsel Network and the San Francisco General
Counsel Group. Corina holds a Bachelor of Arts degree
Mr Barry Newstead, Chief Operating Officer
Barry Newstead joined Redbubble in 2013 and has
from the University of Michigan, Ann Arbor and a Juris
Doctor degree from the University of San Diego School
executive responsibility for Redbubble’s web product,
of Law, California.
technology, physical product development, new markets
and strategy teams. Barry has held internet focused
Ms Vanessa Freeman, Chief People and Culture Officer
executive roles at the Wikimedia Foundation (which
Vanessa Freeman joined Redbubble as Chief People and
runs Wikipedia) and Australia Post. Earlier he was a
Culture Officer in August 2015. Vanessa previously held
strategy consultant with the Boston Consulting Group
senior human resources and strategy roles at Pacific
and the Bridgespan Group. He has worked extensively
Brands. Vanessa began her career with the New Zealand
in North America, Asia, Europe and Australia. Barry has
Trade Development Board in New York before joining
a Bachelor’s degree from Ivey Business School, Canada,
McKinsey & Company, London, where she focused
and a Master’s degree in Public Policy from Harvard
on corporate strategy, post-merger management and
University, USA. Barry is a graduate of the Australian
operational transformation. Vanessa has Bachelor of
Institute of Company Directors.
Arts and Bachelor of Commerce degrees from Auckland
University and an MBA from Stanford University,
Mr Chris Nunn, Chief Financial Officer
California.
Before Chris Nunn’s appointment as Chief Financial
Officer (CFO) in November 2015, Chris served as a
Mr Victor Kovalev, Chief Technology Officer
Non-executive Director and Chair of the Audit and Risk
Victor Kovalev joined Redbubble in December 2015 as
Committee of Redbubble from April 2015. Chris has more
Chief Technology Officer. Previously, he led Indiegogo’s
than 28 years of experience in the financial services and
technical team as vice president of engineering. Prior
property funds management industries, and has spent
to that, Victor held technical leadership roles at Yelp (as
most of the past 21 years as the senior finance executive
head of mobile, business owner portal, Yelp platform for
working with and reporting to the boards of ASX listed
fulfiller transactions and partner APIs) and also VMware –
companies and property trusts. Chris is a Chartered
having gone through both of their initial public offerings.
Accountant, a Graduate of the Australian Institute of
His professional expertise is in building driven cultures
Company Directors and has a Bachelor of Science
to foster radical innovation through rapid scaling. Victor
(Economics) degree from Loughborough University,
holds Bachelor of Science in Computer Engineering and
United Kingdom.
Master of Science in Computer Science degrees from
Georgia Institute of Technology and is a partner at a
California-based non-profit artist accelerator, Zoo Labs.
Mr Robert Baumert, Chief Fulfilment and Analytics
Officer
Rob Baumert joined Redbubble in April 2010 as head
of operations and finance. In August 2011, he moved
to San Francisco to establish Redbubble’s United States
operations, and has recently returned to Melbourne to
continue in his role as head of Supply Chain, Logistics,
14
15
Annual Report 2016
Details of share options and performance rights
The table that follows shows:
(i) the total number of unissued ordinary shares under options, performance rights and warrants, as at the date of this
Report and as at 30 June 2016 (including Directors, Executives and staff);
(ii) details of options and performance rights granted to Directors during or since the end of the 2016 financial year
and total options and performance rights of these individuals at the date of this Report; and
(iii) options exercised (and ordinary shares issued) as a result of exercise of options.
Details of share options and performance rights
Unissued ordinary shares under
Options
Performance rights
Warrants over ordinary shares
Total unissued ordinary shares
Granted
Options
Performance rights
Total granted
Exercised
Options
Performance rights
Total exercised
As at the date of Directors' Report
As at 30 June 2016
19,949,086
19,821,755
5,780,244
5,825,204
654,560
654,560
26,383,890
26,301,519
As at the date of Directors' Report
As at 30 June 2016
9,606,260
9,256,260
60,000
60,000
9,666,260
9,316,260
As at the date of Directors' Report
As at 30 June 2016
3,764,025
3,710,273
610,700
565,740
4,374,725
4,276,013
Holders of options, performance rights or warrants do not, by virtue of their holdings, have any pre-emptive right to
participate in any share issue of the Company or any related body corporate.
Indemnification and Insurance of officers
it is not practicable to state the timing of any payment
that may arise from an adverse finding. The Company
Redbubble has entered into Deeds of Indemnity with
considers that it is only possible but not probable that
all Redbubble Limited directors in accordance with
any of the actions will succeed. The Company does not
the Redbubble constitution. During the 2016 financial
consider that any of the current actions are likely to have
year, Redbubble paid a premium to insure the directors,
a material adverse effect on the business or financial
officers and managers of Redbubble and its controlled
position of the Company.
entities. The insurance contract requires that the amount
of the premium paid is confidential.
The Company is not aware of any other current or
Proceedings against the Company
governmental prosecutions in which the Company or
other members of the Redbubble Group are directly or
As at the date of this Report, there are current lawsuits
indirectly concerned.
threatened civil litigation proceedings, arbitration
proceedings, administration appeals, or criminal or
filed against members of the Redbubble Group that
relate to alleged intellectual property infringement and/
or breach of consumer laws. It is not possible for the
Company to provide any reliable assessment of the likely
quantum of damages that may become payable upon
an adverse finding under any of the actions. No trial
dates have been set for any of the actions and therefore
16
Redbubble
CEO and CFO declaration
Auditor
The CEO and CFO have provided a written statement
EY Australia was appointed as Redbubble’s Auditor on 25
to the Board in accordance with Section 295A of the
November 2014 and continues in office in accordance
Corporations Act. With regard to the financial records
with section 327 of the Corporations Act 2001.
and systems of risk management and internal compliance
in this written statement, the Board received assurance
To the extent permitted by law, the Company has agreed
from the CEO and CFO that the declaration was founded
to indemnify EY Australia, as part of the terms of its audit
on a sound system of risk management and internal
engagement agreement against claims by third parties
control, and that the system was operating effectively in
arising from the audit (for an unspecified amount). No
all material aspects in relation to the reporting of financial
payment has been made to indemnify EY during or since
risks.
the end of the 2016 financial year.
Remuneration Report
Non-audit services
The Remuneration Report is set out on pages 14 to 34
During the year EY performed other services in addition
and forms part of the Directors’ Report for the financial
to its audit responsibilities. The Directors are satisfied
year ended 30 June 2016.
Rounding of Amounts
that the provision of non-audit services by EY during
the reporting period did not compromise the auditor
independence requirements set out in the Corporations
Act. All non-audit services were subject to the Company’s
External Auditor Policy and do not undermine the general
The amounts contained in the Financial Report have
principles relating to auditor independence set out in
been rounded to the nearest $1,000 (where rounding
APES 110 Code of Ethics for Professional Accountants as
is applicable) where noted ($000) under the option
they did not involve reviewing or auditing the auditor’s
available to the Company under ASIC Class Order
own work, acting in a management or decision-making
2016/191. The Company is an entity to which the Class
capacity for the Company, or jointly sharing risks and
Order applies.
rewards.
Details of the amounts paid to the auditor of the
Company and its related practices for non-audit services
provided throughout the FY2016 and FY2015 financial
years are as set out below.
2016
$
2015
$
680,000
-
231,509
67,739
32,510
34,819
944,019
102,558
Non-audit services
Initial public offering
Taxation services
Other services
Total
Auditor’s Independence Declaration
A copy of the Auditor’s Independence Declaration, as required under section 307C of the Corporations Act, is set out
on page 18. The Auditor’s Independence Declaration forms part of the Directors’ Report.
16
17
Annual Report 2016
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
Auditor’s Independence Declaration to the Directors of Redbubble
Limited
As lead auditor for the audit of Redbubble Limited for the financial year ended 30 June 2016, I declare to
the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Redbubble Limited during the financial year.
Ernst & Young
Kylie Bodenham
Partner
25 August 2016
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
18
Redbubble
Remuneration Report
18
1919
Annual Report 2016 Remuneration Report
Letter from Remuneration Committee
Dear Shareholder,
To complement the first public Remuneration Report by Redbubble, this introductory letter provides background on
Redbubble’s remuneration policies.
Redbubble is pursuing a valuable mission: to create the world’s largest marketplace for independent artists, bringing
more creativity in the world. This mission is long-term and audacious. The Company is well advanced but building on
the established position requires continued scalable growth. If the company is successful, significant shareholder value
will be created and Redbubble will establish itself as an iconic Australian technology company.
Redbubble remuneration policies from the Board and CEO down are aligned to the mission and its long-term nature.
Given the inevitable uncertainties, we have sought to craft policies that create an alignment of interests with long-term
share value creation. Specifically, we opt to provide:
• Base level fixed compensation that is at market for the position
•
•
Short-term incentives, for KMP, based on achievement of specific Key Performance Indicators (KPIs)
Long-term incentives, across the organisation, in the form of stock options granted at no less than the share-price
at time of grant and vesting out over 4 years.
These practices have served Redbubble well. In the five years prior to its listing, trailing twelve-month GTV, which is a
sum total of all successful transactions on the platform, including taxes and artist margin, excluding refunds, fraud and
chargebacks, expressed in Australian dollars, has grown from under $10 million to over $140 million and the share price
Compound Annual Growth Rate (CAGR) has been 65%. Along the way, competitors, backed by some of Silicon Valley’s
best venture firms, have been outpaced by Redbubble. Application of these practices has allowed Redbubble to recruit
and retain a strong board, executive team and exceptional employees. These practices have ensured that all parties are
aligned on long-term share value price accretion and participate in the value created.
As we look to FY 2017 we are intending on moving further to bolster the focus on long-term shareholder value creation
by increasing the importance of stock options in all remuneration packages. Such options only becoming valuable with
share value growth and with Redbubble now publically listed, share value is more apparent and useful in attracting,
retaining and motivating all parties.
The existing practices reflect the motivations and intentions of the CEO and co-founder, Martin Hosking to create a
mission driven company of enduring value. His own shareholding in the Company, at ~25% ensures alignment between
his interests and those of other shareholders. His own compensation is based on the same methodology as used for
other executives.
With welcome and appreciation for both new and continuing shareholders,
Your Remuneration Committee,
Teresa Engelhard (Chair), Grant Murdoch (member) and Stephanie Tilenius (member)
20
Redbubble 1. Remuneration Report overview
The Directors of Redbubble Limited present the Remuneration Report (the Report) for the Company for the financial
year ended 30 June 2016. This Report forms part of the Director’s Report and has been audited in accordance with
section 300A of the Corporations Act 2001.
The report details the remuneration arrangements for KMP. KMP are those persons who, directly or indirectly, have
authority and responsibility for planning, directing and controlling the major activities of the Company.
The table below outlines the KMP of the Group and their movements during FY2016.
Key Management Personnel
Name
Position
Non-executive directors
Richard Cawsey
Chair, Non-executive director
Teresa Engelhard
Non-executive director
Greg Lockwood
Non-executive director
Grant Murdoch
Non-executive director (appointed 1 January 2016)
Chris Nunn
Non-executive director (resigned 28 October 2015)
Stephanie Tilenius
Non-executive director
Executive director
Martin Hosking
Managing Director and Chief Executive Officer (CEO)
Other key management personnel
Rob Baumert
Chief Fulfilment and Analytics Officer (CF&AO - effective 1 November 2015, CFO up to 31
October 2015)
Corina Davis
General Counsel and Company Secretary (US)
Vanessa Freeman
Chief People and Culture Officer (CP&CO - appointed 24 August 2015)
Victor Kovalev
Chief Technology Officer (CTO - appointed 14 December 2015)
Barry Newstead
Chief Operating Officer (COO)
Chris Nunn
Chief Financial Officer (CFO - appointed 1 November 2015)
2. Overview of executive remuneration
2.1 What is Redbubble’s remuneration strategy?
Redbubble’s remuneration strategy is based on three principles:
• The creation of enduring value
• Motivating and rewarding an engaged ownership mindset
• Aligning remuneration to shareholder value growth
Redbubble’s remuneration framework is designed to attract, motivate and retain qualified and experienced leaders;
to fairly remunerate executives for their contribution to Redbubble; and to reward high performance and shareholder
value growth.
Redbubble’s executive remuneration framework has higher at risk and equity components than Australian and global
peers (discussed below). Redbubble aims to set annual remuneration (fixed plus Short Term Incentives (STI)) below the
50th percentile. Total remuneration potential is above the 50th percentile if target share price appreciation over four
years is realised.
20
21
Annual Report 2016 Executive remuneration levels are reviewed annually by the Remuneration Committee with reference to both
Redbubble’s remuneration strategy, company performance and external benchmarks.
As a high-growth, online marketplace, Redbubble benchmarks itself against Australian and global peers. For Australian
based roles, the primary source of remuneration benchmarking is a group of Australian listed companies in the
technology sector with similar values for market capitalisation, employee headcount and revenue. For the CEO and
Australian-based KMP remuneration levels for comparable roles in Silicon Valley are also taken into account. For US-
based KMP, the primary source of remuneration benchmarking is a group of US-based private and public companies in
consumer internet sector also with similar market capitalisation, revenue levels and headcount.
2.2 How does Redbubble’s remuneration strategy take into account shareholders’ interests?
Redbubble remuneration strategy is aligned with long-term shareholder value growth through the use of four-year
option grants for Long Term Incentives (LTIs) and measurable KPIs which determine STI awards.
The company-wide KPI goals for the organisation in FY 2016 were GTV and repeat GTV growth as drivers of company
valuation and Redbubble’s share price. In addition, effective recruiting and staff satisfaction, measured via participation
in the Great Place to Work (GPTW) survey, and organisational integration are part of the personal KPIs. The survey is
conducted annually by The Great Place to Work Institute and is published in BRW magazine.
2.3 Elements of remuneration
The remuneration of the CEO and KMP are set out in section 6 (Statutory and Share-based reporting).
Redbubble provides an appropriate and competitive mix of remuneration components with an emphasis on value
derived from share price growth and a long-term focus.
The three components of Redbubble’s remuneration framework post listing are Fixed Remuneration, STIs and LTIs.
Fixed remuneration
The fixed component comprises base salary, allowances and superannuation (or foreign equivalent).
Fixed remuneration is designed to reward for:
• The scope of the executive’s role
• The executive’s skills, experience and qualifications
•
Individual performance
Total fixed remuneration (TFR) is set to reflect the market for a comparable role. TFR for KMP is generally targeted at or
below median levels compared to similar roles at comparator companies.
Short term incentives
STI awards are granted under the Company’s Short Term Incentive Plan (STI Plan). The STI benefit for a participant is
subject to the achievement of company and personal KPIs.
Where targets are achieved and a participant receives an STI benefit, a portion of the benefit is given in the form of
cash, with the remainder given in the form of performance rights under the Company’s Employee Equity Plan with a 2
year deferral.
The Redbubble Board retains discretion in approving STI cash payments and equity.
22
Redbubble Under the Company’s STI Plan, executives have the opportunity to earn an annual incentive award which is delivered
in cash and Performance Rights. The terms of the STI Plan are set out below. It is anticipated that the terms of the
STI awards will be reviewed and, if considered appropriate, amended on an annual basis. The aim of the STI program
at Redbubble is to set, focus and align the organisation to actionable and measurable annual targets. While it is the
smallest component of remuneration in terms of relative magnitude, the STI targets are key drivers of share price value,
so an explicit outcome of performance against STI targets is a parallel increase in LTI value.
Annual remuneration (fixed + STI)
Due to higher than typical, albeit at risk, LTI potential, annual remuneration for KMP is generally targeted below median
levels compared to similar roles at comparator companies.
Who is eligible?
Invitation to participate in the STI Plan is at the discretion of the CEO. Participation is
limited to executives who can materially impact the financial and operational performance
of the Company.
A participant must have six or more months’ active employment to be eligible to receive
an STI benefit in respect of a particular financial year. A participant’s STI benefit will be pro‐
rated where they have not been actively employed (or participating in the STI Plan) for the
whole of the financial year.
How is
performance
measured?
For FY2016, for the CEO, the STI benefit is dependent on the Company achieving specified
performance targets which apply to the entire STI award.
For participants other than the CEO, an STI award comprises two equal (i.e. 50%)
components, the first being dependent upon achievement of the Company’s performance
targets, and the second upon achievement of the participant’s personal performance
targets (which are tailored to each participant).
A participant will not receive a benefit in respect of either component unless they achieve
at least a satisfactory review for the purpose of their personal performance targets (see
further in ‘STI benefits’ below).
How much can
A target STI award is set for each participant, expressed as a dollar value. A participant’s
executives earn in
target STI award is set having regard to the participant’s role and responsibilities.
STI?
The amount of the STI benefit that a participant actually receives is dependent upon the
extent to which Company and personal performance targets have been achieved.
For FY2016, the CEO’s STI benefit depends on the Company’s performance against the
GTV and Repeat GTV targets below. The Board has the discretion to adjust the benefit
depending on the Company’s Gross Profit (GP) and personal measures for the CEO,
specifically the results of a ‘Great Place to Work’ survey and Completion of the IPO. The
maximum STI benefit that the CEO may receive for FY2016 is 150% of target STI.
22
23
Annual Report 2016 How much can
For FY2016, for participants other than the CEO:
executives earn in
- assuming the participant meets their personal targets, their STI benefit for the
STI? (Continued)
component of STI relating to Company performance will range between 50% (where a
minimum threshold GTV of $116.0 million is achieved) to 125% (where the target GTV is
exceeded by at least 30%) of the target for that component; and
- the participant’s STI benefit for the component of their STI award relating to personal
performance will range between 50% (in the case of a ‘large miss’ of their personal
targets) to 100% (in the case of achievement of their personal targets) of the target for that
component.
In each case, the Board has the right to increase or decrease a participant’s STI benefit by
20% to reflect ‘headwind’ or ‘tailwind’ conditions respectively. The maximum STI benefit a
participant may receive for FY2016 is 132% of target STI.
How is an STI
An STI benefit will be delivered partly in cash and partly in the form of $Nil price options
benefit provided
and Performance Rights granted under one of the Employee Equity Plans.
For FY2016, the CEO will receive 60% of any STI benefit in cash and 40% in the form of
Performance Rights.
Other participants who joined the Company:
• prior to the start of FY2016 will receive two thirds of their STI benefits in cash and one
third in the form of Performance Rights; and
•
after the start of FY2016 will receive half of their STI benefits in cash and half in the
form of Performance Rights.
When is it paid?
The STI award is determined after the end of the financial year following a review of
performance over the year against the STI performance measures by the CEO (and in
the case of the CEO, by the Board). The Board approves the final STI award based on this
assessment of performance.
Deferral terms
In calculating the number of Performance Rights to be granted, the dollar value of the
relevant component of the STI benefit will be divided by the Volume Weighted Average
Price (VWAP) over a representative 5-day period. The board retains the right to review the
VWAP period for extraordinary events that are considered to have distorted the VWAP.
All Performance Rights will be subject to time based vesting conditions with 50% of
Performance Rights comprised in a particular award vesting one year after their date of
allocation and the remaining 50% vesting two years after their date of allocation
What happens if an
If an executive voluntarily resigns from Redbubble, or has their employment with the
executive leaves?
Redbubble group terminated for poor performance or misconduct, prior to the relevant
vesting date, no STI is awarded for that year. Similarly, any unvested deferred STI is forfeited,
unless otherwise determined by the Board.
The Board has the discretion to accelerate vesting of Performance Rights and may exert this
discretion in certain cases (for example due to the death or disablement of a participant or a
change of control of the Company).
24
Redbubble Long term incentives
LTIs, in the form of stock options that vest over four years are the remuneration differentiator at Redbubble. All
executives have received LTI awards in the form of Options or Performance Rights that vest over multiple years.
Redbubble LTI plans have a 4-year vesting schedule and the realisable value of the options is 100% at risk.
All Redbubble executives have received LTI awards, in the form of Options or Performance Rights that vest over
multiple years. LTI grants are made to executives to align remuneration with the creation of shareholder value over the
long-term.
How is it paid?
KMP receive share options or performance rights in accordance with Redbubble’s
employee equity plan
How much can
The value KMP will realise from LTI grants will depend on the appreciation of Redbubble’s
executives earn?
share price over four years.
How much is at
Redbubble’s LTIs are 4 year vesting options with the strike price set at the market value
risk?
at time of issue. If Redbubble’s share price does not increase or if it declines from the
exercise price at issuance, the LTI will be worthless, thus it is effectively 100% at risk
relative to share price performance.
What happens if an
If an executive resigns or is terminated for cause, any unvested LTI awards are forfeited,
executive leaves?
unless otherwise determined by the Board.
The treatment of unvested and vested and unexercised awards will be determined by the
Board with reference to the circumstances of cessation.
2.4 Changes in FY2016
The Board introduced the deferred component of STI in FY2016 to better align the STI plan to shareholder value.
24
25
Annual Report 2016 3. Performance and executive remuneration outcomes in FY2016
A key underlying principle of the Group’s executive remuneration framework is that the remuneration levels should be
linked to Group performance.
The Group’s key financial measures of performance over the last 5 years are summarised in the table below.
Redbubble’s five year performance
Key indicators
Gross Transaction Value (GTV)
Revenue
Revenue as a % of GTV
2016
$'000
2015
$'000
2014
$'000
2013
$'000
2012
$'000
142,869 88,367 59,321 33,689 15,726
114,578 71,070 48,561 27,467 12,455
80.2%
80.4%
81.9%
81.5%
79.2%
GTV less sales taxes and artists’ margin, adjusted for unearned revenue pending shipment, equals Group's revenue.
Revenue has consistently been approximately 80% of GTV.
The growth in the Group’s revenue and GTV not its earnings has been the significant driver in the share price
appreciation. The Company listed on the ASX on 16 May 2015 so limited trading history exists, however, the Company’s
offer price of $1.33 at Listing represents a CAGR of 65% in its valuation from $0.11 5 years ago.
3.1 Performance against STI measures
A combination of financial and non-financial measures are used to measure performance for STI awards. Redbubble
performance against those measures is as follows for FY2016:
Financial measures
Measure
GTV at stable GP
Repeat GTV at stable GP
Non-financial measures
Measure
Percentage of employees who would recommend Redbubble as a Great Place to Work
Target
FY 2016 performance
Assessment
$145.0 million
$142.9 million
Threshold (98.5%)
$55.0 million
$50.7 million
Threshold (92.1%)
Target
80.0%
FY 2016 performance
Assessment
96.0%
Over achieved (120.0%)
In assessing holistically the performance of KMP in FY2016, the Board has used its discretion to award 100% of target
STI. In making this decision the Board considered: higher than forecasted earnings before interest, tax, depreciation
and amortisation (EBITDA) and GP, and significantly higher than targeted GPTW survey improvements. The STI award
as a percent of maximum potential STI was 67% for the CEO and 76% for other KMP.
26
Redbubble 4. How remuneration is governed
4.1 Remuneration Committee role
The Committee is responsible for reviewing and advising the Board on remuneration policies and practices. The
Committee also reviews and advises the Board on the design and implementation of short and long term incentive
performance packages, superannuation entitlements, termination entitlements and fringe benefits policies.
The remuneration of Directors, the CEO, KMP, managers and team members is reviewed by the Remuneration
Committee which then provides recommendations to the Board.
The members of the Committee during FY2016 were: Teresa Engelhard (Committee Chair), Stephanie Tilenius, Grant
Murdoch (appointed 1 January 2016) and Chris Nunn (ceased 28 October 2015 upon appointment as CFO).
4.2 Use of remuneration advisors
The Committee obtains independent advice from remuneration consultants, Hewitt Associates Pty Ltd on the
appropriateness of remuneration based trends in the US and Australia.
Both Hewitt Associates Pty Ltd and the Committee are satisfied the advice is free from undue influence from the KMP
to whom the remuneration recommendations apply.
The Remuneration Committee engaged remuneration advisors to provide remuneration recommendations leading
up to Redbubble’s IPO. The remuneration advisors provided market remuneration data and recommendations on the
remuneration mix and quantum for senior executives.
The remuneration advisor’s recommendations were provided to Redbubble as an input into decision-making only.
The Remuneration Committee considered the recommendations, along with other factors, in making its remuneration
decisions.
Hewitt Associates Pty Ltd was paid a fees of $40,000 for the remuneration recommendations.
4.3 Clawback of remuneration
In the event of serious misconduct or a material misstatement of the Group’s financial statements, the Board has the
discretion to reduce, cancel or clawback any unvested STI or LTI.
4.4 Executive employment agreements
CEO and Managing Director
The Company has entered into an employment agreement contract dated 10 August 2006 with Martin Hosking, the
Company’s CEO and Managing Director, to govern his employment with Redbubble.
The table below summarises the remuneration arrangements of the CEO.
26
27
Annual Report 2016 Summary of CEO Remuneration for FY2016
Remuneration element
Base pay, including
superannuation (1)
Value
$344,266
Proportion of
package
46%
Nature of
remuneration Details
Fixed pay
$262,800 p.a. up to 30 September 2015; $343,000 p.a.
effective 1 October 2015 and $395,120 p.a. (including
housing allowance of $52,120 p.a.) effective 1 April 2016
Cash bonus
Benefits
$75,000
$52,864
10%
7%
At risk
Fixed pay
Deferred short term incentive
$6,363
1%
At risk
Performance rights
$164,188
22%
At risk
Share options
$93,330
12%
At risk
Long service leave
$17,588
2%
Fixed pay
Total
$753,599
100%
(1) Includes superannuation on wellness allowance and bonus paid during the year.
60% of target STI award in cash for FY 2016
Benefits received include taxable value of an apartment up
to 31 March 2016 and wellness allowance
Represents share based payment expense recognised
during the year for 40% of target STI award for which grant
would be made in FY 2017
Represents share based payment expense recognised
during the year over the vesting period, for performance
rights granted in prior years
Represents share based payment expense recognised
during the year over the vesting period, for options granted
in prior year
Represents provision for long service leave made during
the year
Martin’s contract provides that he will receive an amount of fixed annual remuneration, which amount is subject to
review by the Company. His fixed annual remuneration is currently $395,120 per annum (inclusive of 9.5% employer
superannuation contribution).
The Company has also agreed to provide Martin with discretionary benefits of:
• Until 31 March 2016, personal accommodation at a leased premises in Melbourne during the working week. From 1
April 2016 the financial equivalent of this benefit was transferred into salary.
• A wellness allowance (a benefit that is generally available to all Redbubble employees). In FY2016 this allowance
was valued at $600.
In FY2016 Martin’s target STI award is $125,000, with a maximum STI benefit of $187,500. Martin will receive 60% of
any STI benefit in cash and the remainder in Performance Rights. The Performance Rights will be subject to time based
vesting conditions with 50% of Performance Rights comprised in a particular award vesting one year after their date of
allocation and the remaining 50% vesting two years after their date of allocation.
Under the terms of Martin’s employment contract, either party is entitled to terminate Martin’s employment contract by
giving one month’s written notice. The Company may, at its election, make a payment in lieu of that notice based on
Martin’s base remuneration package.
Other senior employment arrangements
All other executives are employed on open ended individual employment contracts that set out their terms of their
employment. Each agreement varies according to the individual KMP but typically includes:
• Termination provisions incorporating notice periods and payments of one month
• Performance and confidentiality obligations on the part of both the employer and employee
• Eligibility to participate in the Company’s Employee Equity Plan
28
Redbubble Termination provisions
The Board considers the CEO’s significant shareholding and the unvested options of all KMP to be more effective
means of retaining critical talent than termination notice periods.
KMP contractual termination provisions are as follows:
CEO notice period (by company or executive)
CFO notice period (by company or executive)
Other executives' notice period (by company or executive)
Resignation
1 month
6 months
1 month (AUS)
None (US)
In the case of termination due to death, disablement, redundancy or notice without cause the Board may in certain
circumstances use its discretion to approve a payment of up to 6 months’ salary.
5. Overview of non-executive Director (NED) remuneration
Redbubble’s NED policy is designed to attract and retain high calibre directors who can discharge the roles and
responsibilities required in terms of good governance, strong oversight, independence and strong alignment of
interests with long-term shareholder value creation. NED remuneration reflect the demands and responsibilities of the
directors.
The Remuneration Committee reviews NED remuneration against comparable companies. The Board also considers
advice from external advisors when undertaking the review process.
NED remuneration reflects the directors’ board and committee activities.
Directors are also to be reimbursed for all reasonable travelling and other expenses properly incurred by them in
attending Board meetings or any meetings of committees of Directors, in attending any general meetings of the
Company or otherwise in connection with the business or affairs of the Company. Directors may be paid such
additional or special remuneration if they, with the approval of the Board, perform any extra services or make special
exertions for the benefit of the Company.
There are no retirement benefit schemes for Directors, other than statutory superannuation contributions.
Maximum aggregate NED fee pool
The total amount paid to all Directors for their services must not exceed in aggregate in any financial year the amount
fixed by shareholders in a general meeting. Upon establishment this amount has been fixed by the Board in accordance
with the Constitution at $1,200,000. Any changes to this amount in future will require approval by shareholders in a
general meeting in accordance with the ASX Listing Rules.
28
29
Annual Report 2016 Redbubble
6. Statutory and share-based reporting
6.1 Executive KMP remuneration for the year ended 30 June 2016
Executive statutory remuneration for FY2016
Short term benefits
Post-employment
benefits
Long-term
benefits
Share-based payments
Total
Percentage of remuneration that consists of:
Non-monetary
Cash Salary Cash Bonus (1)
$
$
benefits (2)
$
Superannuation
$
Long service
leave (3)
$
Share-based
payments -
Performance
Share-based
payments - Share
options
(Performance
Share-based
payments - Share
options
At risk
Performance
rights (4)
$
& Time based) (5)
$
(Time based) (4)
$
Deferred STI (6)
$
Fixed (7) At risk STI (8)
$
$
$
Rights At risk LTI (9)
$
$
307,962 75,000
52,864
36,304
17,588
164,188 93,330
- 6,363
753,599
55%
11%
22%
12%
305,365 61,794
28,293
18,845
-
19,009 64,885
3,996
6,749
508,936
247,816 48,062
26,908
13,378
-
27,351 51,908
- 5,249
420,672
136,370 31,011
150
12,969
109
-
- 50,324
6,797
237,730
-
155,769 23,171
600
245,857 80,000
191,781 33,151
-
1,590,920 352,189 108,815
14,798
30,646
18,219
145,159
116
1,418
135
19,366
-
126,356
-
336,904
- 97,553
103,248
127,769
- 38,957
337,892
4,512
8,737
7,313
294,078 45,720
295,919
724,631
289,556
3,231,043
69%
68%
63%
58%
38%
73%
13%
13%
16%
9%
12%
14%
4%
7%
0%
0%
17%
0%
14%
12%
21%
33%
33%
13%
Executive director
Martin Hosking
Other key management personnel
Rob Baumert (*)
Corina Davis (*)
Vanessa Freeman (10)
Victor Kovalev (11)
Barry Newstead
Chris Nunn (12)
Total
(1) Represents cash bonus accrued for the year.
(2) Non-monetary benefits for Martin Hosking include the taxable value of an apartment up to 31 March 2016. All other non-monetary benefits relate to wellness benefits for all the executives and health benefits for the US executives.
(3) Only Australian executives are entitled to long service leave.
(4) Amounts disclosed reflect the value of remuneration consisting of performance rights/options, based on the value of rights/options expensed during the year. The fair value of rights is equivalent to fair value of shares at the grant date and the fair value of options is ascertained using Black-
Scholes model and is amortised over the vesting period.
(5) Amounts disclosed reflect the value of remuneration consisting of options, based on the value of options expensed during the year. The fair value of options is ascertained using Black-Scholes model and is amortised over the vesting period. These options were subject to company
performance conditions in FY 2015.
(6) Represents value of deferred STI expensed during the year which would be granted as $Nil price options to Australian executives and performance rights to US executives in FY 2017. The value of the deferred component is amortised over the vesting period.
(7) Fixed remuneration includes cash salary, non-monetary benefits, all superannuation benefits and long service leave.
(8) At risk STI includes cash bonus and deferred STI.
(9) At risk LTI includes share based payments expense for options.
(10) Vanessa Freeman was appointed effective 24 August 2015. She worked full-time for part of the year and part-time for the balance.
(11) Victor Kovalev was appointed effective 14 December 2015.
(12) Chris Nunn was appointed effective 1 November 2015.
(*) Remuneration is paid in USD. The numbers disclosed are in AUD and are derived by using USD to AUD average exchange rate of 1.3732.
30
Annual Report 2016
Fees for 2016
6.2 NED remuneration for the year ended 30 June 2016
Short term benefits
Post-employment
benefits
Share-based payments
Share-based payments -
Share-based payments -
Share options (Time
Director fees
$
Superannuation
$
Performance rights (1)
$
97,667
-
-
20,548
-
-
118,215
-
-
-
1,952
-
-
1,952
7,271
36,117
-
-
17,586
10,019
70,993
based) (1)
$
40,973
-
-
20,231
-
39,036
100,240
Total
$
145,911
36,117
-
42,731
17,586
49,055
291,400
Non-executive directors
Richard Cawsey (2)
Teresa Engelhard
Greg Lockwood
Grant Murdoch (3)
Chris Nunn (4)
Stephanie Tilenius
Total
(1) Amounts disclosed reflect the value of remuneration consisting of rights/options, based on the value of rights/options expensed during the year. The fair
value of rights/options is ascertained using Black-Scholes model.
(2) Director fees are paid to and performance rights are issued to Denali Venture Partners (Aust). In October 2014, the Board approved a grant of 248,360, $Nil
price options to Richard Cawsey, vesting over 3 years from 1 October 2014. However, the agreement was not executed at that time. This grant will be put up
for shareholders' approval during the AGM.
(3) Grant Murdoch was appointed effective 1 January 2016 and is entitled to directors fees (inclusive of superannuation) in cash of $40,000 per annum for
being a Director, and $5,000 per annum for being Chair of the Audit & Risk Committee.
(4) Chris Nunn resigned as a non-executive director effective 28 October 2015 to take up the position of the CFO.
PB
31
7. Equity instruments held by Directors and KMP
7.1 Option, performance rights and warrant holdings
The tables below disclose the number of share options, performance rights and warrants granted, exercised, vested or
forfeited during the year.
Option holdings
Share options do not carry any voting or dividend rights, and can only be exercised once the vesting conditions have
been met, until their expiry date.
Option holdings
Equivalent post-split numbers (1)
Balance at the
start of the year
Granted during
the year as
compensation (2)
Exercised
during the year
Forfeited during
the year (3)
Balance at the
end of the year
Vested and
exercisable at
the end of the
year
Unvested
options at the
end of the year
1,440,000
-
-
- 1,440,000 1,440,000
-
633,600
-
(633,600)
-
- -
-
- 89,540
-
- 89,540
14,551 74,989
2016
Non-executive directors
Richard Cawsey (4)
Teresa Engelhard
Grant Murdoch
Stephanie Tilenius
731,520
-
-
- 731,520 508,000
223,520
Executive director
Martin Hosking
Other key management personnel
Rob Baumert
Corina Davis
Vanessa Freeman
Victor Kovalev
Barry Newstead (5)
Chris Nunn
Related party
Jellicom Pty Ltd as trustee for the
Three Springs Family Trust
(Beneficiary - Martin Hosking)
2,894,000
-
(1,040,000)
(370,800) 1,483,200 617,920
865,280
2,628,480
-
(961,280)
(240,000) 1,427,200 867,200
560,000
960,000
-
(272,000)
(192,000)
496,000 320,000
176,000
- 600,000
-
- 600,000
- 600,000
- 1,200,000
-
- 1,200,000
- 1,200,000
2,400,000 578,720
-
(480,000) 2,498,720 884,399 1,614,321
- 680,000
-
- 680,000
- 680,000
1,600,200
-
-
- 1,600,200 1,600,200
-
Total
13,287,800 3,148,260
(2,906,880)
(1,282,800)
12,246,380 6,252,270 5,994,110
(1) Effective 1 December 2015, each share of the company was split into 40. All the numbers have been converted to equivalent post-split numbers.
(2) Options granted during the year with an exercise price of $Nil:
Grant Murdoch: 89,540 options
Barry Newstead: 578,720 options
Vanessa Freeman: 120,000 options
(3) The noting of options as forfeited (20% of the grant in each case) in fact reflects that 80% of a total pool of shares became subject to the option for
each individual, following determination of company performance conditions outlined in the relevant option agreements.
(4) In October 2014, the Board approved a grant of 248,360, $Nil price options to Richard Cawsey, vesting over 3 years from 1 October 2014. However,
the agreement was not executed at that time. This grant will be put up for shareholders' approval during the AGM.
(5) The opening balance was subject to a liquidity event condition.
32
Redbubble Option holdings
Performance rights holdings
Equivalent post-split numbers (1)
is satisfied on 16 November 2016, 6 months after the date of the IPO, whereupon a proportion of the rights will fully
Performance rights do not carry any voting or dividend rights. The liquidity event condition for the performance rights
Unvested
options at the
end of the year
vest by reference to time-based vesting schedules.
2016
Balance at the
start of the year
Exercised
during the year
Granted during
the year as
Balance at the
end of the year
Vested and
exercisable at
the end of the
year
compensation (2)
Forfeited during
the year (3)
Non-executive directors
Performance Rights holdings
Richard Cawsey (4)
Teresa Engelhard
Grant Murdoch
2016
Stephanie Tilenius
Non-executive directors
Executive director
Teresa Engelhard
Martin Hosking
Chris Nunn (4)
Other key management personnel
Stephanie Tilenius
Rob Baumert
Executive director
Corina Davis
Martin Hosking
Vanessa Freeman
Other key management personnel
Victor Kovalev
Rob Baumert
Barry Newstead (5)
Corina Davis
Chris Nunn
Barry Newstead
Related party
Related Party
Jellicom Pty Ltd as trustee for the
Denali Venture Partners (Aust) -
Three Springs Family Trust
(Beneficary - Richard Cawsey)
(Beneficiary - Martin Hosking)
1,440,000
-
633,600
Balance at the
start of the
year
731,520
-
Granted during
- 89,540
the year as
compensation
-
-
- 1,440,000 1,440,000
-
Equivalent post-split numbers (1)
-
Forfeited
during the
(633,600)
Exercised
-
during the
year
-
- -
Balance at
- 89,540
the end of the
year
Vested (3) at the
14,551 74,989
end of the year
- 731,520 508,000
-
Unvested at
the end of the
year
223,520
year (2)
299,640
2,894,000
-
-
-
(1,040,000)
- 299,640 208,080 91,560
(370,800) 1,483,200 617,920
865,280
294,960
-
(57,360)
(237,600)
-
-
-
81,360
2,628,480
-
-
-
(961,280)
- 81,360 54,240 27,120
(240,000) 1,427,200 867,200
560,000
960,000
-
(272,000)
(192,000)
496,000 320,000
176,000
1,580,720
-
- 600,000
-
-
- 1,580,720 856,240 724,480
- 600,000
- 600,000
- 1,200,000
-
- 1,200,000
- 1,200,000
200,160
-
2,400,000 578,720
-
-
- 200,160 133,440 66,720
(480,000) 2,498,720 884,399 1,614,321
288,000
-
- 680,000
-
-
- 288,000 192,000 96,000
- 680,000
- 680,000
1,157,440
-
-
- 1,157,440 602,800 554,640
151,920
1,600,200
-
-
-
-
- 151,920 151,920
- 1,600,200 1,600,200
-
-
Total
Total
13,287,800 3,148,260
4,054,200
-
(2,906,880)
(57,360)
12,246,380 6,252,270 5,994,110
(1,282,800)
(237,600) 3,759,240 2,198,720 1,560,520
(1) Effective 1 December 2015, each share of the company was split into 40. All the numbers have been converted to equivalent post-split numbers.
(1) Effective 1 December 2015, each share of the company was split into 40. All the numbers have been converted to equivalent post-split numbers.
(2) Forfeited during the year on termination.
(2) Options granted during the year with an exercise price of $Nil:
Grant Murdoch: 89,540 options
(3) The vesting of performance rights is subject to a liquidity event condition and service conditions. The numbers disclosed represent time based
Barry Newstead: 578,720 options
contingent rights (i.e. vesting contingent on the liquidity event condition being satisfied). The liquidity event condition will be met in FY 2017 on the
Vanessa Freeman: 120,000 options
date six months after the date of the IPO.
(3) The noting of options as forfeited (20% of the grant in each case) in fact reflects that 80% of a total pool of shares became subject to the option for
(4) The performance rights exercised represent shares issued for performance rights that were not subject to a liquidity event condition. These were
each individual, following determination of company performance conditions outlined in the relevant option agreements.
exercised in the capacity as a non-executive director, prior to taking up the position of CFO.
(4) In October 2014, the Board approved a grant of 248,360, $Nil price options to Richard Cawsey, vesting over 3 years from 1 October 2014. However,
the agreement was not executed at that time. This grant will be put up for shareholders' approval during the AGM.
(5) The opening balance was subject to a liquidity event condition.
32
33
Annual Report 2016 Warrant holdings
Warrants do not carry any voting or dividend rights, and can be exercised until their expiry date.
Warrants over Ordinary Shares holdings
These were issued in terms of the Facility Agreement.
Balance at the
start of the
year
Granted during
the year as
compensation
Equivalent post-split numbers (1)
Forfeited
during the
year
Balance at the
end of the year
Exercised
during the year
Vested and
exercisable at the
end of the year
Unvested at
the end of the
year
654,560
-
-
-
654,560
654,560
-
2016
Related Party
Denali Capital Managers Pty Ltd
(Beneficiary - Richard Cawsey) (2)
(1) Effective 1 December 2015, each share of the company was split into 40. The warrant holdings above have been converted to equivalent post-split
numbers.
(2) Denali Capital Managers Pty Ltd (Denali), an associated entity of Richard Cawsey, was issued with the warrants set out above as consideration for
Denali providing a loan facility to the Company. The loan facility agreement terminated in December 2012. The warrants may be exercised at any time
up to and including 31 December 2016.
Shares provided on exercise of remuneration options/rights
7.2 Shares issued on exercise of options/rights
Equivalent post-split numbers (1)
Date of exercise
Number of ordinary
shares issued
on exercise
Exercise price per
option
Fair value per share
at exercise date
Value at exercise
date (2)
29 September 2015
633,600
$0.13
$0.78 412,632
31 August 2015
1,040,000
$0.05
$0.78 755,300
2016
Non-executive directors
Teresa Engelhard
Executive director
Martin Hosking
Other key management personnel
Rob Baumert
20 November 2015
161,280
Corina Davis
Chris Nunn
Total
18 April 2016
23 March 2016
11 November 2015
800,000
272,000
57,360
2,964,240
$0.08
$0.13
$0.48
-
$1.20 182,125
$1.33 964,000
$1.20 196,860
$0.78 44,526
2,555,443
(1) Effective 1 December 2015, each share of the company was split into 40. All the numbers have been converted to equivalent post-split numbers.
(2) Value at exercise date is calculated as fair value available on exercise date less exercise price paid, multiplied by number of options exercised. For
presentation purposes, price per option/value per share has been rounded to two decimal places, however the value at exercise date has been
calculated based on unrounded numbers.
34
Redbubble
Share holdings in Redbubble Limited
7.3 Shareholdings of Directors and KMP
2016 - Redbubble Limited ordinary
shares
Balance at the
start of the year
Equivalent post-split numbers (1)
Received during
the year on
exercise of
options/
performance rights
Purchase of
shares
Sale/transfer of
shares
Balance at the
end of the year
Non-executive directors
Teresa Engelhard
Executive directors
Martin Hosking
Other key management personnel
Rob Baumert
Corina Davis
Chris Nunn
Related Parties
Beneficiary
- 633,600 112,780
- 746,380
601,880 1,040,000
- - 1,641,880
240,000
961,280
-
(1,201,280)
-
- 272,000
- - 272,000
- 57,360
- - 57,360
Cawsey Superannuation Fund Pty Ltd
Richard Cawsey
8,966,480
- 760,000
- 9,726,480
Denali Investors Pty Ltd
Richard Cawsey
760,000
- -
(760,000)
-
Denali Venture Partners Fund 1 LP
Richard Cawsey
1,840,240
- - - 1,840,240
Denali Venture Partners (Aust)
Richard Cawsey
57,360
- - - 57,360
Grattan Group Capital Pty Ltd
Rob Baumert
45,040
- -
(45,040)
-
Jellicom Pty Ltd as trustee for the Three
Springs Family Trust
Piton Capital Venture Fund II LP (2)
Martin Hosking 48,330,880
- -
(421,360) 47,909,520
Greg Lockwood
-
- 5,537,291
- 5,537,291
Piton Capital Investments Cooperatief B Greg Lockwood
-
- 927,840
- 927,840
G & M Murdoch Pty Ltd as trustee for the
Murdoch Family Superannuation Fund
Grant Murdoch
-
- 75,187
- 75,187
Overan Holdings Pty Ltd
Chris Nunn
-
- 76,000
- 76,000
Total
60,841,880 2,964,240
7,489,098
(2,427,680) 68,867,538
(1) Effective 1 December 2015, each share of the company was split into 40. All the numbers have been converted to equivalent post-split
numbers.
(2) Includes 3,681,571 shares issued as a consequence of conversion of cumulative redeemable preference shares to ordinary shares. For the
purpose of conversion, both the face value and unpaid accumulated dividend were aggregated.
34
35
Annual Report 2016 8. Equity grants outstanding
Equity grants outstanding
These were issued in terms of the Facility Agreement.
Warrants over Ordinary Shares holdings
Grant date
2016
# of options/
Related Party
rights granted Vest period/date
Denali Capital Managers Pty Ltd
Richard Cawsey (5) 27-Oct-09 720,000 Equal monthly vesting over 36
654,560
(Beneficiary - Richard Cawsey) (2)
months commencing from 1
April 2010 to 1 March 2013
Balance at the
start of the
year
Granted during
the year as
compensation
Expiry date
01-Mar-17
Exercise
price
$0.05
-
Equivalent post-split numbers (1)
Forfeited
during the
Vested
year
during the
Exercised
Value of options/
during the year
rights at grant
Balance at the
end of the year
date (2)
$15,840
-
year # (3) Exercised %
0%
654,560
-
-
Vested and
exercisable at the
end of the year
Unvested at
the end of the
year
Forfeited/
Forfeited/
Exercised #
-
654,560
lapsed %(4)
0%
lapsed #(4)
-
-
Value of
options/
rights post
forfeiture
$15,840
29-Sep-10 720,000 Equal monthly vesting over 36
(1) Effective 1 December 2015, each share of the company was split into 40. The warrant holdings above have been converted to equivalent post-split
0%
numbers.
(2) Denali Capital Managers Pty Ltd (Denali), an associated entity of Richard Cawsey, was issued with the warrants set out above as consideration for
Denali providing a loan facility to the Company. The loan facility agreement terminated in December 2012. The warrants may be exercised at any time
up to and including 31 December 2016.
1,267,200
months commencing from 1
October 2010 to 1 September
2013
01-Oct-17
21-Jul-17
$15,840
$56,074
800,000
52,800
$0.05
$0.13
63%
0%
0%
-
-
-
-
$15,840
$56,074
Rob Baumert
01-Sep-11
01-Oct-24
$0.48
$312,900
400,000
0%
01-Oct-18
$0.00
$69,806
50,040
0%
-
-
20%
240,000
$250,320
0%
-
$69,806
01-Oct-24
$0.48
$250,320
320,000
28%
272,000
20%
192,000
$200,256
24-Oct-14
1,200,000
01-Oct-13
200,160
Corina Davis
24-Oct-14
960,000
01-Oct-13
288,000
Equal monthly vesting over 48
months commencing from 1
September 2011 to 1 August
2015
25% on the first anniversary of
the vesting commencement
date, being 1 October 2015 and
1/48th over the next 36 months
in equal monthly numbers up
to 1 October 2018, subject to
performance conditions
25% on the first anniversary of
the grant date, being 1 October
2014 and 1/48th over the next
36 months in equal monthly
numbers up to 1 October 2017,
subject to a liquidity event
condition
25% on the first anniversary of
the vesting commencement
date, being 1 October 2015 and
1/48th over the next 36 months
in equal monthly numbers up
to 1 October 2018, subject to
performance conditions
25% on the first anniversary of
the grant date, being 1 October
2014 and 1/48th over the next
36 months in equal monthly
numbers up to 1 October 2017,
subject to a liquidity event
condition
120,000
01-Nov-15
05-Mar-15
1,854,000
01-Oct-18
$0.00
$100,440
72,000
0%
Vanessa Freeman
Martin Hosking
Teresa Engelhard
03-Jun-14 299,640 Equal monthly vesting over 36
03-Jun-21
$0.00
$104,499
99,880
0%
months commencing from 3
June 2014 to 3 May 2017,
subject to a liquidity event
condition
25% to vest on 1 March 2017
and 1/48th over the next 36
months in equal monthly
numbers up to 1 March 2020
01-Nov-15 480,000 25% to vest on 1 March 2017
and 1/48th over the next 36
months in equal monthly
numbers up to 1 March 2020
25% on the first anniversary of
the vesting commencement
date, being 1 October 2015 and
1/48th over the next 36 months
in equal monthly numbers up
to 1 October 2018, subject to
performance conditions
01-Nov-25
$0.00
$93,150
01-Nov-25
$0.75
$179,731
-
-
0%
0%
05-Mar-25
$0.51
$464,891
617,920
0%
01-Oct-20
$0.00
$275,638 197,600
0%
01-Oct-21
$0.00
36
$379,768 329,320
0%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0%
0%
0%
0%
-
-
-
-
$100,440
$104,499
$93,150
$179,731
20%
370,800
$371,912
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$275,638
$379,768
$108,631
$28,374
$19,146
$148,019
01-Oct-13
790,360
01-Oct-14
790,360
25% on the first anniversary of
the grant date, being 1 October
2014 and 1/48th over the next
36 months in equal monthly
numbers up to 1 October 2017,
subject to a liquidity event
condition
25% on the first anniversary of
the grant date, being 1 October
2015 and 1/48th over the next
36 months in equal monthly
numbers up to 1 October 2018,
subject to a liquidity event
condition
the vesting commencement
date, being 1 December 2016
and 1/48th over the next 36
months in equal monthly
numbers up to 1 December
2019
grant date and 2,150 monthly
thereafter over the next 35
months up to 1 January 2019
subject to holding the office of
Director of the Company
date and 269 monthly
thereafter over the next 35
months up to 1 January 2019
subject to holding the office of
Chair of the Company's Audit &
Risk Committee
of the grant date, being 5
March 2016 and 1/48th over
the next 31 months in equal
monthly numbers up to 1
October 2018, subject to
performance conditions and
liquidity event
months commencing from 1
December 2015 to 1 November
2019
the grant date, being 25
November 2014 and 1/48th
over the next 36 months in
equal monthly numbers up to 1
November 2017, subject to a
liquidity event condition
the grant date, being 25
November 2015 and 1/48th
over the next 36 months in
equal monthly numbers up to 1
November 2018, subject to a
liquidity event condition
the grant date, being 1
November 2016 and 1/48th
over the next 36 months in
equal monthly numbers up to 1
November 2019
months commencing from 1
April 2015 to 1 March 2018,
subject to holding the office of
Chair of the Company's Audit &
Risk Committee
months commencing from 1
April 2015 to 1 March 2018,
subject to holding the office of
Director of the Company
months commencing from 1
June 2014 to 1 May 2017
the grant date, being 1 June
2015 and 1/36th over the next
24 months in equal monthly
numbers up to 1 June 2017,
subject to a liquidity event
condition
years commencing from 1
March 2014 to 1 March 2016,
subject to a liquidity event
condition
years commencing from 1
March 2014 to 1 March 2016,
subject to a liquidity event
condition
months commencing from 1
October 2011 to 1 September
2012. These were transferred
from Martin Hosking on 2 May
2014, effective 1 November
2011
Victor Kovalev
14-Dec-15
1,200,000
25% on the first anniversary of
14-Dec-25
$1.20
$672,285
-
0%
0%
$672,285
Grant Murdoch
01-Feb-16
79,590
4,340 vest immediately on
01-Feb-26
$0.00
$95,846
12,940
0%
0%
$95,846
01-Feb-16 9,950 535 vest immediately on grant
01-Feb-26
$0.00
$11,982
1,611
0%
0%
$11,982
Barry Newstead
05-Mar-15
2,400,000
35.42% on the first anniversary
05-Mar-25
$0.51
$614,400
800,000
0%
20%
480,000
$491,520
25-Nov-15
578,720
Equal monthly vesting over 48
01-Nov-25
$0.00
$696,924
84,399
0%
$696,924
25-Nov-13
578,720
25% on the first anniversary of
25-Nov-20
$0.00
$201,829
144,680
0%
$201,829
25-Nov-14 578,720 25% on the first anniversary of
24-Nov-21
$0.00
$278,075
229,080
0%
0%
$278,075
Chris Nunn
01-Nov-15
680,000
25% on the first anniversary of
01-Nov-25
$0.85
$235,193
-
0%
0%
$235,193
20-Mar-15
88,480
Equal monthly vesting over 36
n/a
$0.00
$44,992
17,200
19%
17,200
81%
71,280
$8,746
20-Mar-15 206,480 Equal monthly vesting over 36
n/a
$0.00
$104,995
40,160
19%
40,160
81%
166,320
$20,421
Stephanie Tilenius 12-May-14
731,520
Equal monthly vesting over 36
12-May-21
$0.37
$108,631
243,840
0%
01-Jun-14
81,360
1/3rd on the first anniversary of
01-Jun-19
$0.00
$28,374
27,120
0%
Denali Venture
28-Mar-13
138,480
Equal yearly vesting over 3
28-Mar-20
$0.00
$26,370
46,160
0%
$26,370
14-Nov-13
13,440
Equal yearly vesting over 3
14-Nov-20
$0.00
$4,687
4,480
0%
$4,687
Denali Capital
21-Dec-12
654,560
21 December 2012
31-Dec-16
$0.14
$19,146
Jellicom Pty Ltd as
08-Aug-12
1,600,200
Equal monthly vesting over 12
01-Oct-18
$0.14
$148,019
-
-
0%
0%
Partners (Aust) -
(Beneficiary -
Richard Cawsey)
Managers Pty Ltd
(Beneficiary -
Richard Cawsey)
trustee for the
Three Springs
Family Trust
(Beneficiary -
Martin Hosking)
(1) Effective 1 December 2015, each share of the company was split into 40. All the numbers have been converted to equivalent post-split numbers.
(2) Value at grant date for options / performance rights has been determined by using the Black-Scholes method.
(3) The vesting of performance rights is subject to a liquidity event condition and service conditions. The numbers disclosed represent time based contingent rights (i.e. vesting contingent on the liquidity
event condition being satisfied). The liquidity event condition will be met in FY 2017 on the date six months after the date of the IPO.
(4) For Barry Newstead, Corina Davis, Martin Hosking and Rob Baumert, the noting of options as 'forfeited/lapsed' (20% in each case) in fact reflects that 80% of a total pool of shares became subject to the
option for each individual, following determination of company performance conditions outlined in the relevant option agreements.
(5) In October 2014, the Board approved a grant of 248,360, $Nil price options to Richard Cawsey, vesting over 3 years from 1 October 2014. However, the agreement was not executed at that time. This
grant will be put up for shareholders' approval during the AGM.
Redbubble
Equity grants outstanding
# of options/
Grant date
rights granted Vest period/date
Richard Cawsey (5) 27-Oct-09 720,000 Equal monthly vesting over 36
Value of options/
Vested
rights at grant
during the
Exercise
Expiry date
price
01-Mar-17
$0.05
date (2)
$15,840
year # (3)
Exercised %
Exercised #
lapsed %(4)
lapsed #(4)
Forfeited/
Forfeited/
-
-
0%
0%
0%
0%
Value of
options/
rights post
forfeiture
$15,840
$15,840
29-Sep-10 720,000 Equal monthly vesting over 36
01-Oct-17
$0.05
$15,840
Rob Baumert
01-Sep-11
1,267,200
Equal monthly vesting over 48
21-Jul-17
$0.13
$56,074
52,800
63%
800,000
0%
$56,074
24-Oct-14
1,200,000
25% on the first anniversary of
01-Oct-24
$0.48
$312,900
400,000
0%
20%
240,000
$250,320
01-Oct-13
200,160
25% on the first anniversary of
01-Oct-18
$0.00
$69,806
50,040
0%
0%
-
$69,806
Corina Davis
24-Oct-14
960,000
25% on the first anniversary of
01-Oct-24
$0.48
$250,320
320,000
28%
272,000
20%
192,000
$200,256
01-Oct-13
288,000
25% on the first anniversary of
01-Oct-18
$0.00
$100,440
72,000
0%
0%
$100,440
months commencing from 1
April 2010 to 1 March 2013
months commencing from 1
October 2010 to 1 September
2013
2015
months commencing from 1
September 2011 to 1 August
the vesting commencement
date, being 1 October 2015 and
1/48th over the next 36 months
in equal monthly numbers up
to 1 October 2018, subject to
performance conditions
the grant date, being 1 October
2014 and 1/48th over the next
36 months in equal monthly
numbers up to 1 October 2017,
subject to a liquidity event
condition
the vesting commencement
date, being 1 October 2015 and
1/48th over the next 36 months
in equal monthly numbers up
to 1 October 2018, subject to
performance conditions
the grant date, being 1 October
2014 and 1/48th over the next
36 months in equal monthly
numbers up to 1 October 2017,
subject to a liquidity event
condition
Teresa Engelhard
03-Jun-14 299,640 Equal monthly vesting over 36
03-Jun-21
$0.00
$104,499
99,880
0%
months commencing from 3
June 2014 to 3 May 2017,
subject to a liquidity event
condition
-
-
-
-
-
-
0%
Warrants over Ordinary Shares holdings
-
-
0%
2016
$0.00
120,000
$93,150
01-Nov-15
01-Nov-25
These were issued in terms of the Facility Agreement.
Vanessa Freeman
Equity grants outstanding
25% to vest on 1 March 2017
and 1/48th over the next 36
months in equal monthly
numbers up to 1 March 2020
Balance at the
01-Nov-15 480,000 25% to vest on 1 March 2017
start of the
and 1/48th over the next 36
year
months in equal monthly
numbers up to 1 March 2020
Richard Cawsey (5) 27-Oct-09 720,000 Equal monthly vesting over 36
25% on the first anniversary of
Martin Hosking
654,560
months commencing from 1
the vesting commencement
April 2010 to 1 March 2013
date, being 1 October 2015 and
(1) Effective 1 December 2015, each share of the company was split into 40. The warrant holdings above have been converted to equivalent post-split
1/48th over the next 36 months
29-Sep-10 720,000 Equal monthly vesting over 36
numbers.
in equal monthly numbers up
months commencing from 1
(2) Denali Capital Managers Pty Ltd (Denali), an associated entity of Richard Cawsey, was issued with the warrants set out above as consideration for
to 1 October 2018, subject to
October 2010 to 1 September
Denali providing a loan facility to the Company. The loan facility agreement terminated in December 2012. The warrants may be exercised at any time
performance conditions
2013
up to and including 31 December 2016.
Equivalent post-split numbers (1)
Forfeited
during the
year
Exercised
during the year
Exercise
price
$0.05
$0.51
# of options/
rights granted Vest period/date
year # (3) Exercised %
0%
-
617,920
0%
654,560
-
Related Party
Denali Capital Managers Pty Ltd
Vested and
0%
-
exercisable at the
end of the year
-
Balance at the
Vested
end of the year
during the
$179,731
Value of options/
rights at grant
Granted during
01-Nov-25
the year as
compensation
(Beneficiary - Richard Cawsey) (2)
date (2)
$15,840
$464,891
Expiry date
01-Mar-17
05-Mar-25
Grant date
05-Mar-15
Exercised #
1,854,000
-
-
654,560
01-Oct-17
$15,840
Unvested at
0%
the end of the
year
Forfeited/
lapsed %(4)
0%
20%
-
$0.75
$0.05
0%
0%
0%
-
-
-
-
-
-
-
-
-
-
-
Forfeited/
lapsed #(4)
-
370,800
-
-
-
$104,499
$93,150
Value of
$179,731
options/
rights post
forfeiture
$15,840
$371,912
$15,840
$56,074
$275,638
88,480
79,590
790,360
578,720
790,360
288,000
200,160
120,000
960,000
01-Oct-14
24-Oct-14
01-Oct-13
24-Oct-14
01-Feb-16
14-Dec-15
14-Dec-15
01-Nov-15
20-Mar-15
1,200,000
1,200,000
2,400,000
1,200,000
05-Mar-15
25-Nov-13
1,854,000
578,720
680,000
790,360
01-Nov-15
01-Oct-14
01-Sep-11
01-Oct-13
1,267,200
790,360
21-Jul-17
01-Oct-20
$0.13
$0.00
52,800
$56,074
$275,638 197,600
63%
0%
800,000
-
0%
0%
36
Rob Baumert
Victor Kovalev
Corina Davis
Grant Murdoch
Teresa Engelhard
Barry Newstead
Vanessa Freeman
Martin Hosking
Chris Nunn
Victor Kovalev
Partners (Aust) -
(Beneficiary -
Richard Cawsey)
Managers Pty Ltd
(Beneficiary -
Richard Cawsey)
trustee for the
Three Springs
Family Trust
(Beneficiary -
Partners (Aust) -
(Beneficiary -
Richard Cawsey)
Managers Pty Ltd
(Beneficiary -
Richard Cawsey)
trustee for the
Three Springs
Family Trust
(Beneficiary -
Martin Hosking)
25-Nov-14 578,720 25% on the first anniversary of
01-Oct-13
25% on the first anniversary of
the grant date, being 25
the grant date, being 1 October
November 2015 and 1/48th
2014 and 1/48th over the next
over the next 36 months in
36 months in equal monthly
equal monthly numbers up to 1
numbers up to 1 October 2017,
November 2018, subject to a
subject to a liquidity event
liquidity event condition
condition
25% on the first anniversary of
25% on the first anniversary of
the grant date, being 1
the grant date, being 1 October
November 2016 and 1/48th
2015 and 1/48th over the next
over the next 36 months in
36 months in equal monthly
equal monthly numbers up to 1
numbers up to 1 October 2018,
November 2019
subject to a liquidity event
Equal monthly vesting over 36
condition
months commencing from 1
25% on the first anniversary of
April 2015 to 1 March 2018,
the vesting commencement
subject to holding the office of
Equal monthly vesting over 48
25% on the first anniversary of
months commencing from 1
the grant date, being 1 October
September 2011 to 1 August
2014 and 1/48th over the next
2015
36 months in equal monthly
25% on the first anniversary of
numbers up to 1 October 2017,
the vesting commencement
subject to a liquidity event
date, being 1 October 2015 and
condition
1/48th over the next 36 months
25% on the first anniversary of
in equal monthly numbers up
the grant date, being 1 October
to 1 October 2018, subject to
2015 and 1/48th over the next
performance conditions
36 months in equal monthly
numbers up to 1 October 2018,
25% on the first anniversary of
subject to a liquidity event
the grant date, being 1 October
condition
2014 and 1/48th over the next
25% on the first anniversary of
36 months in equal monthly
the vesting commencement
numbers up to 1 October 2017,
date, being 1 December 2016
subject to a liquidity event
and 1/48th over the next 36
condition
months in equal monthly
25% on the first anniversary of
numbers up to 1 December
the vesting commencement
2019
date, being 1 October 2015 and
4,340 vest immediately on
1/48th over the next 36 months
grant date and 2,150 monthly
in equal monthly numbers up
thereafter over the next 35
to 1 October 2018, subject to
months up to 1 January 2019
performance conditions
subject to holding the office of
Director of the Company
01-Oct-13
25% on the first anniversary of
01-Feb-16 9,950 535 vest immediately on grant
the grant date, being 1 October
date and 269 monthly
2014 and 1/48th over the next
thereafter over the next 35
36 months in equal monthly
months up to 1 January 2019
numbers up to 1 October 2017,
subject to holding the office of
subject to a liquidity event
Chair of the Company's Audit &
condition
Risk Committee
03-Jun-14 299,640 Equal monthly vesting over 36
35.42% on the first anniversary
05-Mar-15
months commencing from 3
of the grant date, being 5
June 2014 to 3 May 2017,
March 2016 and 1/48th over
subject to a liquidity event
the next 31 months in equal
condition
monthly numbers up to 1
25% to vest on 1 March 2017
October 2018, subject to
and 1/48th over the next 36
performance conditions and
months in equal monthly
liquidity event
numbers up to 1 March 2020
25-Nov-15
Equal monthly vesting over 48
01-Nov-15 480,000 25% to vest on 1 March 2017
months commencing from 1
and 1/48th over the next 36
December 2015 to 1 November
months in equal monthly
2019
numbers up to 1 March 2020
25% on the first anniversary of
25% on the first anniversary of
the vesting commencement
the grant date, being 25
date, being 1 October 2015 and
November 2014 and 1/48th
1/48th over the next 36 months
over the next 36 months in
in equal monthly numbers up
equal monthly numbers up to 1
to 1 October 2018, subject to
November 2017, subject to a
performance conditions
liquidity event condition
01-Oct-24
$0.48
$312,900
400,000
0%
01-Oct-21
$0.00
$379,768 329,320
0%
01-Oct-18
$0.00
$69,806
50,040
14-Dec-25
$1.20
$672,285
-
0%
0%
-
-
-
-
20%
240,000
$250,320
0%
0%
0%
-
-
-
$379,768
$69,806
$672,285
01-Oct-24
$0.48
$250,320
320,000
28%
272,000
20%
192,000
$200,256
01-Feb-26
$0.00
$95,846
12,940
0%
01-Oct-18
01-Feb-26
$0.00
$0.00
$100,440
$11,982
72,000
1,611
0%
0%
03-Jun-21
05-Mar-25
$0.00
$0.51
$104,499
$614,400
99,880
800,000
0%
0%
01-Nov-25
$0.00
$93,150
-
0%
01-Nov-25
01-Nov-25
$0.00
$0.75
$696,924
$179,731
84,399
-
0%
0%
05-Mar-25
25-Nov-20
$0.51
$0.00
$464,891
$201,829
617,920
144,680
0%
0%
24-Nov-21
01-Oct-20
$0.00
$0.00
$278,075
229,080
$275,638 197,600
0%
0%
01-Nov-25
01-Oct-21
$0.85
$0.00
$235,193
$379,768 329,320
-
0%
0%
37
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0%
0%
0%
-
-
-
$95,846
$100,440
$11,982
0%
20%
-
480,000
$104,499
$491,520
0%
0%
0%
-
-
-
$93,150
$696,924
$179,731
20%
0%
370,800
-
$371,912
$201,829
0%
0%
0%
0%
-
-
-
-
$278,075
$275,638
$235,193
$379,768
n/a
$0.00
$44,992
17,200
19%
17,200
81%
71,280
$8,746
14-Dec-25
$1.20
$672,285
-
0%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$672,285
$95,846
$108,631
$28,374
$11,982
$4,687
$696,924
$19,146
$201,829
$148,019
$108,631
$28,374
$19,146
$148,019
20-Mar-15 206,480 Equal monthly vesting over 36
n/a
$0.00
$104,995
40,160
19%
40,160
81%
166,320
$20,421
Grant Murdoch
01-Feb-16
79,590
01-Feb-26
$0.00
$95,846
12,940
Stephanie Tilenius 12-May-14
731,520
12-May-21
$0.37
$108,631
243,840
01-Jun-14
01-Feb-16 9,950 535 vest immediately on grant
1/3rd on the first anniversary of
81,360
01-Jun-19
01-Feb-26
$0.00
$0.00
$28,374
$11,982
27,120
1,611
Barry Newstead
Denali Venture
05-Mar-15
28-Mar-13
2,400,000
138,480
35.42% on the first anniversary
Equal yearly vesting over 3
05-Mar-25
28-Mar-20
$0.51
$0.00
$614,400
$26,370
800,000
46,160
0%
0%
20%
0%
480,000
-
$491,520
$26,370
14-Nov-13
13,440
October 2018, subject to
Equal yearly vesting over 3
14-Nov-20
$0.00
$4,687
4,480
0%
25-Nov-15
578,720
subject to a liquidity event
Equal monthly vesting over 48
01-Nov-25
$0.00
$696,924
84,399
Denali Capital
21-Dec-12
654,560
December 2015 to 1 November
21 December 2012
31-Dec-16
$0.14
$19,146
25-Nov-13
578,720
25% on the first anniversary of
25-Nov-20
$0.00
$201,829
144,680
Jellicom Pty Ltd as
08-Aug-12
1,600,200
November 2014 and 1/48th
Equal monthly vesting over 12
01-Oct-18
$0.14
$148,019
Martin Hosking)
25-Nov-14 578,720 25% on the first anniversary of
2014, effective 1 November
24-Nov-21
$0.00
$278,075
229,080
0%
0%
$278,075
(1) Effective 1 December 2015, each share of the company was split into 40. All the numbers have been converted to equivalent post-split numbers.
over the next 36 months in
(2) Value at grant date for options / performance rights has been determined by using the Black-Scholes method.
equal monthly numbers up to 1
November 2018, subject to a
(3) The vesting of performance rights is subject to a liquidity event condition and service conditions. The numbers disclosed represent time based contingent rights (i.e. vesting contingent on the liquidity
liquidity event condition
event condition being satisfied). The liquidity event condition will be met in FY 2017 on the date six months after the date of the IPO.
680,000
25% on the first anniversary of
01-Nov-25
$0.85
$235,193
-
Chris Nunn
01-Nov-15
0%
0%
$235,193
(4) For Barry Newstead, Corina Davis, Martin Hosking and Rob Baumert, the noting of options as 'forfeited/lapsed' (20% in each case) in fact reflects that 80% of a total pool of shares became subject to the
the grant date, being 1
option for each individual, following determination of company performance conditions outlined in the relevant option agreements.
November 2016 and 1/48th
(5) In October 2014, the Board approved a grant of 248,360, $Nil price options to Richard Cawsey, vesting over 3 years from 1 October 2014. However, the agreement was not executed at that time. This
over the next 36 months in
grant will be put up for shareholders' approval during the AGM.
equal monthly numbers up to 1
November 2019
20-Mar-15
88,480
Equal monthly vesting over 36
n/a
$0.00
$44,992
17,200
19%
17,200
81%
71,280
$8,746
20-Mar-15 206,480 Equal monthly vesting over 36
n/a
$0.00
$104,995
40,160
19%
40,160
81%
166,320
$20,421
Stephanie Tilenius 12-May-14
731,520
Equal monthly vesting over 36
12-May-21
$0.37
$108,631
243,840
0%
01-Jun-14
81,360
1/3rd on the first anniversary of
01-Jun-19
$0.00
$28,374
27,120
0%
Denali Venture
28-Mar-13
138,480
Equal yearly vesting over 3
28-Mar-20
$0.00
$26,370
46,160
0%
$26,370
14-Nov-13
13,440
Equal yearly vesting over 3
14-Nov-20
$0.00
$4,687
4,480
0%
$4,687
Denali Capital
21-Dec-12
654,560
21 December 2012
31-Dec-16
$0.14
$19,146
Jellicom Pty Ltd as
08-Aug-12
1,600,200
Equal monthly vesting over 12
01-Oct-18
$0.14
$148,019
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
-
-
-
-
date, being 1 December 2016
Chair of the Company's Audit &
and 1/48th over the next 36
Risk Committee
months in equal monthly
numbers up to 1 December
months commencing from 1
2019
April 2015 to 1 March 2018,
4,340 vest immediately on
subject to holding the office of
grant date and 2,150 monthly
Director of the Company
thereafter over the next 35
Equal monthly vesting over 36
months up to 1 January 2019
months commencing from 1
subject to holding the office of
June 2014 to 1 May 2017
Director of the Company
the grant date, being 1 June
date and 269 monthly
2015 and 1/36th over the next
thereafter over the next 35
24 months in equal monthly
months up to 1 January 2019
numbers up to 1 June 2017,
subject to holding the office of
subject to a liquidity event
Chair of the Company's Audit &
condition
Risk Committee
of the grant date, being 5
years commencing from 1
March 2016 and 1/48th over
March 2014 to 1 March 2016,
the next 31 months in equal
subject to a liquidity event
monthly numbers up to 1
condition
performance conditions and
years commencing from 1
liquidity event
March 2014 to 1 March 2016,
condition
months commencing from 1
2019
the grant date, being 25
over the next 36 months in
months commencing from 1
equal monthly numbers up to 1
October 2011 to 1 September
November 2017, subject to a
2012. These were transferred
liquidity event condition
from Martin Hosking on 2 May
2011
the grant date, being 25
November 2015 and 1/48th
months commencing from 1
April 2015 to 1 March 2018,
subject to holding the office of
Chair of the Company's Audit &
Risk Committee
months commencing from 1
April 2015 to 1 March 2018,
subject to holding the office of
Director of the Company
months commencing from 1
June 2014 to 1 May 2017
the grant date, being 1 June
2015 and 1/36th over the next
24 months in equal monthly
numbers up to 1 June 2017,
subject to a liquidity event
condition
years commencing from 1
March 2014 to 1 March 2016,
subject to a liquidity event
condition
years commencing from 1
March 2014 to 1 March 2016,
subject to a liquidity event
condition
months commencing from 1
October 2011 to 1 September
2012. These were transferred
from Martin Hosking on 2 May
2014, effective 1 November
2011
(1) Effective 1 December 2015, each share of the company was split into 40. All the numbers have been converted to equivalent post-split numbers.
(2) Value at grant date for options / performance rights has been determined by using the Black-Scholes method.
(3) The vesting of performance rights is subject to a liquidity event condition and service conditions. The numbers disclosed represent time based contingent rights (i.e. vesting contingent on the liquidity
event condition being satisfied). The liquidity event condition will be met in FY 2017 on the date six months after the date of the IPO.
(4) For Barry Newstead, Corina Davis, Martin Hosking and Rob Baumert, the noting of options as 'forfeited/lapsed' (20% in each case) in fact reflects that 80% of a total pool of shares became subject to the
option for each individual, following determination of company performance conditions outlined in the relevant option agreements.
(5) In October 2014, the Board approved a grant of 248,360, $Nil price options to Richard Cawsey, vesting over 3 years from 1 October 2014. However, the agreement was not executed at that time. This
grant will be put up for shareholders' approval during the AGM.
Annual Report 2016
-
-
-
-
Equity grants outstanding
# of options/
Grant date
rights granted Vest period/date
Richard Cawsey (5) 27-Oct-09 720,000 Equal monthly vesting over 36
Value of options/
Vested
rights at grant
during the
Exercise
Expiry date
price
01-Mar-17
$0.05
date (2)
$15,840
year # (3)
Exercised %
Exercised #
lapsed %(4)
lapsed #(4)
Forfeited/
Forfeited/
0%
0%
0%
0%
Value of
options/
rights post
forfeiture
$15,840
$15,840
29-Sep-10 720,000 Equal monthly vesting over 36
01-Oct-17
$0.05
$15,840
Rob Baumert
01-Sep-11
1,267,200
Equal monthly vesting over 48
21-Jul-17
$0.13
$56,074
52,800
63%
800,000
0%
$56,074
24-Oct-14
1,200,000
25% on the first anniversary of
01-Oct-24
$0.48
$312,900
400,000
0%
20%
240,000
$250,320
01-Oct-13
200,160
25% on the first anniversary of
01-Oct-18
$0.00
$69,806
50,040
0%
0%
-
$69,806
Corina Davis
24-Oct-14
960,000
25% on the first anniversary of
01-Oct-24
$0.48
$250,320
320,000
28%
272,000
20%
192,000
$200,256
01-Oct-13
288,000
25% on the first anniversary of
01-Oct-18
$0.00
$100,440
72,000
0%
0%
$100,440
Teresa Engelhard
03-Jun-14 299,640 Equal monthly vesting over 36
03-Jun-21
$0.00
$104,499
99,880
0%
0%
$104,499
Vanessa Freeman
01-Nov-15
120,000
25% to vest on 1 March 2017
01-Nov-25
$0.00
$93,150
01-Nov-15 480,000 25% to vest on 1 March 2017
01-Nov-25
$0.75
$179,731
0%
0%
0%
0%
$93,150
$179,731
Martin Hosking
05-Mar-15
1,854,000
25% on the first anniversary of
05-Mar-25
$0.51
$464,891
617,920
0%
20%
370,800
$371,912
01-Oct-13
790,360
25% on the first anniversary of
01-Oct-20
$0.00
$275,638 197,600
0%
0%
$275,638
01-Oct-14
790,360
25% on the first anniversary of
01-Oct-21
$0.00
$379,768 329,320
0%
0%
$379,768
Victor Kovalev
14-Dec-15
1,200,000
25% on the first anniversary of
14-Dec-25
$1.20
$672,285
-
0%
0%
$672,285
Grant Murdoch
01-Feb-16
79,590
4,340 vest immediately on
01-Feb-26
$0.00
$95,846
12,940
0%
0%
$95,846
01-Feb-16 9,950 535 vest immediately on grant
01-Feb-26
$0.00
$11,982
1,611
0%
0%
$11,982
Barry Newstead
05-Mar-15
2,400,000
35.42% on the first anniversary
05-Mar-25
$0.51
$614,400
800,000
0%
20%
480,000
$491,520
25-Nov-15
578,720
01-Nov-25
$0.00
$696,924
84,399
0%
$696,924
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0%
0%
0%
$201,829
$278,075
months commencing from 1
April 2010 to 1 March 2013
months commencing from 1
October 2010 to 1 September
2013
2015
months commencing from 1
September 2011 to 1 August
the vesting commencement
date, being 1 October 2015 and
1/48th over the next 36 months
in equal monthly numbers up
to 1 October 2018, subject to
performance conditions
the grant date, being 1 October
2014 and 1/48th over the next
36 months in equal monthly
numbers up to 1 October 2017,
subject to a liquidity event
condition
the vesting commencement
date, being 1 October 2015 and
1/48th over the next 36 months
in equal monthly numbers up
to 1 October 2018, subject to
performance conditions
the grant date, being 1 October
2014 and 1/48th over the next
36 months in equal monthly
numbers up to 1 October 2017,
subject to a liquidity event
condition
months commencing from 3
June 2014 to 3 May 2017,
subject to a liquidity event
condition
and 1/48th over the next 36
months in equal monthly
numbers up to 1 March 2020
and 1/48th over the next 36
months in equal monthly
numbers up to 1 March 2020
the vesting commencement
date, being 1 October 2015 and
1/48th over the next 36 months
in equal monthly numbers up
to 1 October 2018, subject to
performance conditions
the grant date, being 1 October
2014 and 1/48th over the next
36 months in equal monthly
numbers up to 1 October 2017,
subject to a liquidity event
condition
the grant date, being 1 October
2015 and 1/48th over the next
36 months in equal monthly
numbers up to 1 October 2018,
subject to a liquidity event
condition
the vesting commencement
date, being 1 December 2016
and 1/48th over the next 36
months in equal monthly
numbers up to 1 December
2019
grant date and 2,150 monthly
thereafter over the next 35
months up to 1 January 2019
subject to holding the office of
Director of the Company
date and 269 monthly
thereafter over the next 35
months up to 1 January 2019
subject to holding the office of
Chair of the Company's Audit &
Risk Committee
of the grant date, being 5
March 2016 and 1/48th over
the next 31 months in equal
monthly numbers up to 1
October 2018, subject to
performance conditions and
liquidity event
Equal monthly vesting over 48
months commencing from 1
December 2015 to 1 November
2019
25% on the first anniversary of
the grant date, being 25
November 2014 and 1/48th
over the next 36 months in
equal monthly numbers up to 1
November 2017, subject to a
liquidity event condition
Equity grants outstanding
25-Nov-14 578,720 25% on the first anniversary of
24-Nov-21
$0.00
$278,075
229,080
0%
25-Nov-20
$0.00
$201,829
144,680
0%
Warrants over Ordinary Shares holdings
25-Nov-13
578,720
These were issued in terms of the Facility Agreement.
the grant date, being 25
November 2015 and 1/48th
Balance at the
over the next 36 months in
start of the
equal monthly numbers up to 1
year
November 2018, subject to a
liquidity event condition
2016
# of options/
rights granted Vest period/date
Related Party
Denali Capital Managers Pty Ltd
Grant date
01-Nov-15
Granted during
the year as
compensation
Expiry date
01-Mar-17
01-Nov-25
Exercised
during the year
Exercise
price
$0.05
$0.85
Equivalent post-split numbers (1)
Forfeited
during the
year
Value of options/
rights at grant
Balance at the
Vested
end of the year
during the
Vested and
exercisable at the
end of the year
Unvested at
the end of the
year
Forfeited/
date (2)
$15,840
$235,193
year # (3) Exercised %
0%
0%
654,560
Exercised #
lapsed %(4)
0%
0%
-
0%
81%
0%
20%
81%
-
-
-
-
-
-
-
0%
n/a
19%
63%
$0.00
$0.13
$0.05
88,480
17,200
52,800
17,200
731,520
680,000
$44,992
800,000
$56,074
$15,840
0%
19%
21-Jul-17
01-Oct-17
-
-
654,560
01-Sep-11
20-Mar-15
1,267,200
1,200,000
$0.48
$0.00
Rob Baumert
-
40,160
400,000
40,160
01-Oct-24
n/a
$312,900
$104,995
Stephanie Tilenius 12-May-14
(Beneficiary - Richard Cawsey) (2)
Richard Cawsey (5) 27-Oct-09 720,000 Equal monthly vesting over 36
25% on the first anniversary of
Chris Nunn
654,560
months commencing from 1
the grant date, being 1
April 2010 to 1 March 2013
November 2016 and 1/48th
(1) Effective 1 December 2015, each share of the company was split into 40. The warrant holdings above have been converted to equivalent post-split
over the next 36 months in
29-Sep-10 720,000 Equal monthly vesting over 36
numbers.
equal monthly numbers up to 1
months commencing from 1
(2) Denali Capital Managers Pty Ltd (Denali), an associated entity of Richard Cawsey, was issued with the warrants set out above as consideration for
November 2019
October 2010 to 1 September
Denali providing a loan facility to the Company. The loan facility agreement terminated in December 2012. The warrants may be exercised at any time
Equal monthly vesting over 36
2013
up to and including 31 December 2016.
months commencing from 1
Equal monthly vesting over 48
April 2015 to 1 March 2018,
months commencing from 1
subject to holding the office of
September 2011 to 1 August
Chair of the Company's Audit &
2015
Risk Committee
24-Oct-14
25% on the first anniversary of
20-Mar-15 206,480 Equal monthly vesting over 36
the vesting commencement
months commencing from 1
date, being 1 October 2015 and
April 2015 to 1 March 2018,
1/48th over the next 36 months
subject to holding the office of
in equal monthly numbers up
Director of the Company
to 1 October 2018, subject to
Equal monthly vesting over 36
performance conditions
months commencing from 1
June 2014 to 1 May 2017
25% on the first anniversary of
1/3rd on the first anniversary of
the grant date, being 1 October
the grant date, being 1 June
2014 and 1/48th over the next
2015 and 1/36th over the next
36 months in equal monthly
24 months in equal monthly
numbers up to 1 October 2017,
numbers up to 1 June 2017,
subject to a liquidity event
subject to a liquidity event
condition
condition
25% on the first anniversary of
the vesting commencement
Equal yearly vesting over 3
date, being 1 October 2015 and
years commencing from 1
1/48th over the next 36 months
March 2014 to 1 March 2016,
in equal monthly numbers up
subject to a liquidity event
to 1 October 2018, subject to
condition
performance conditions
Equal yearly vesting over 3
years commencing from 1
25% on the first anniversary of
March 2014 to 1 March 2016,
the grant date, being 1 October
subject to a liquidity event
2014 and 1/48th over the next
condition
36 months in equal monthly
21 December 2012
numbers up to 1 October 2017,
subject to a liquidity event
condition
Denali Venture
Partners (Aust) -
(Beneficiary -
Richard Cawsey)
01-Oct-18
01-Jun-19
01-Oct-13
01-Jun-14
$69,806
$28,374
200,160
81,360
50,040
27,120
$0.00
$0.00
Corina Davis
12-May-21
28-Mar-20
28-Mar-13
14-Nov-20
14-Nov-13
31-Dec-16
21-Dec-12
$250,320
$100,440
$108,631
01-Oct-24
01-Oct-18
24-Oct-14
01-Oct-13
$26,370
320,000
272,000
960,000
138,480
654,560
$19,146
288,000
243,840
0%
0%
46,160
$4,687
72,000
13,440
$0.00
$0.00
$0.14
$0.48
$0.00
4,480
$0.37
28%
0%
0%
0%
0%
0%
-
-
-
-
-
-
-
-
0%
0%
0%
0%
0%
0%
20%
0%
Value of
options/
rights post
forfeiture
$15,840
$235,193
Forfeited/
lapsed #(4)
-
-
-
$15,840
71,280
$8,746
-
$56,074
240,000
166,320
$250,320
$20,421
-
-
-
$108,631
$69,806
$28,374
192,000
$200,256
-
-
-
-
$26,370
$4,687
$100,440
$19,146
$104,499
$148,019
-
-
-
-
$0.00
0%
0%
0%
0%
120,000
01-Nov-15
01-Nov-25
1,600,200
$0.00
$0.14
99,880
-
$104,499
$148,019
03-Jun-21
01-Oct-18
03-Jun-14 299,640 Equal monthly vesting over 36
08-Aug-12
Equal monthly vesting over 12
months commencing from 3
months commencing from 1
June 2014 to 3 May 2017,
October 2011 to 1 September
subject to a liquidity event
2012. These were transferred
condition
from Martin Hosking on 2 May
25% to vest on 1 March 2017
2014, effective 1 November
and 1/48th over the next 36
2011
months in equal monthly
numbers up to 1 March 2020
(1) Effective 1 December 2015, each share of the company was split into 40. All the numbers have been converted to equivalent post-split numbers.
01-Nov-15 480,000 25% to vest on 1 March 2017
and 1/48th over the next 36
(2) Value at grant date for options / performance rights has been determined by using the Black-Scholes method.
months in equal monthly
(3) The vesting of performance rights is subject to a liquidity event condition and service conditions. The numbers disclosed represent time based contingent rights (i.e. vesting contingent on the liquidity
numbers up to 1 March 2020
event condition being satisfied). The liquidity event condition will be met in FY 2017 on the date six months after the date of the IPO.
$0.51
25% on the first anniversary of
Martin Hosking
(4) For Barry Newstead, Corina Davis, Martin Hosking and Rob Baumert, the noting of options as 'forfeited/lapsed' (20% in each case) in fact reflects that 80% of a total pool of shares became subject to the
the vesting commencement
option for each individual, following determination of company performance conditions outlined in the relevant option agreements.
date, being 1 October 2015 and
1/48th over the next 36 months
in equal monthly numbers up
to 1 October 2018, subject to
performance conditions
(5) In October 2014, the Board approved a grant of 248,360, $Nil price options to Richard Cawsey, vesting over 3 years from 1 October 2014. However, the agreement was not executed at that time. This
grant will be put up for shareholders' approval during the AGM.
1,854,000
05-Mar-25
05-Mar-15
01-Nov-25
$179,731
$464,891
$93,150
617,920
370,800
$0.75
20%
0%
0%
0%
0%
0%
-
-
-
-
-
-
-
$179,731
$371,912
$93,150
01-Oct-20
$0.00
$275,638 197,600
0%
01-Oct-21
$0.00
$379,768 329,320
0%
38
14-Dec-25
$1.20
$672,285
-
0%
01-Oct-13
790,360
01-Oct-14
790,360
Victor Kovalev
14-Dec-15
1,200,000
25% on the first anniversary of
the grant date, being 1 October
2014 and 1/48th over the next
36 months in equal monthly
numbers up to 1 October 2017,
subject to a liquidity event
condition
25% on the first anniversary of
the grant date, being 1 October
2015 and 1/48th over the next
36 months in equal monthly
numbers up to 1 October 2018,
subject to a liquidity event
condition
25% on the first anniversary of
the vesting commencement
date, being 1 December 2016
and 1/48th over the next 36
months in equal monthly
numbers up to 1 December
2019
grant date and 2,150 monthly
thereafter over the next 35
months up to 1 January 2019
subject to holding the office of
Director of the Company
date and 269 monthly
thereafter over the next 35
months up to 1 January 2019
subject to holding the office of
Chair of the Company's Audit &
Risk Committee
of the grant date, being 5
March 2016 and 1/48th over
the next 31 months in equal
monthly numbers up to 1
October 2018, subject to
performance conditions and
liquidity event
months commencing from 1
December 2015 to 1 November
2019
the grant date, being 25
November 2014 and 1/48th
over the next 36 months in
equal monthly numbers up to 1
November 2017, subject to a
liquidity event condition
the grant date, being 25
November 2015 and 1/48th
over the next 36 months in
equal monthly numbers up to 1
November 2018, subject to a
liquidity event condition
the grant date, being 1
November 2016 and 1/48th
over the next 36 months in
equal monthly numbers up to 1
November 2019
months commencing from 1
April 2015 to 1 March 2018,
subject to holding the office of
Chair of the Company's Audit &
Risk Committee
months commencing from 1
April 2015 to 1 March 2018,
subject to holding the office of
Director of the Company
months commencing from 1
June 2014 to 1 May 2017
the grant date, being 1 June
2015 and 1/36th over the next
24 months in equal monthly
numbers up to 1 June 2017,
subject to a liquidity event
condition
years commencing from 1
March 2014 to 1 March 2016,
subject to a liquidity event
condition
years commencing from 1
March 2014 to 1 March 2016,
subject to a liquidity event
condition
months commencing from 1
October 2011 to 1 September
2012. These were transferred
from Martin Hosking on 2 May
2014, effective 1 November
2011
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$275,638
$379,768
$672,285
$108,631
$28,374
$19,146
$148,019
Grant Murdoch
01-Feb-16
79,590
4,340 vest immediately on
01-Feb-26
$0.00
$95,846
12,940
0%
0%
$95,846
01-Feb-16 9,950 535 vest immediately on grant
01-Feb-26
$0.00
$11,982
1,611
0%
0%
$11,982
Barry Newstead
05-Mar-15
2,400,000
35.42% on the first anniversary
05-Mar-25
$0.51
$614,400
800,000
0%
20%
480,000
$491,520
25-Nov-15
578,720
Equal monthly vesting over 48
01-Nov-25
$0.00
$696,924
84,399
0%
$696,924
25-Nov-13
578,720
25% on the first anniversary of
25-Nov-20
$0.00
$201,829
144,680
0%
$201,829
25-Nov-14 578,720 25% on the first anniversary of
24-Nov-21
$0.00
$278,075
229,080
0%
0%
$278,075
Chris Nunn
01-Nov-15
680,000
25% on the first anniversary of
01-Nov-25
$0.85
$235,193
-
0%
0%
$235,193
20-Mar-15
88,480
Equal monthly vesting over 36
n/a
$0.00
$44,992
17,200
19%
17,200
81%
71,280
$8,746
20-Mar-15 206,480 Equal monthly vesting over 36
n/a
$0.00
$104,995
40,160
19%
40,160
81%
166,320
$20,421
Stephanie Tilenius 12-May-14
731,520
Equal monthly vesting over 36
12-May-21
$0.37
$108,631
243,840
0%
01-Jun-14
81,360
1/3rd on the first anniversary of
01-Jun-19
$0.00
$28,374
27,120
0%
Denali Venture
28-Mar-13
138,480
Equal yearly vesting over 3
28-Mar-20
$0.00
$26,370
46,160
0%
$26,370
14-Nov-13
13,440
Equal yearly vesting over 3
14-Nov-20
$0.00
$4,687
4,480
0%
$4,687
Denali Capital
21-Dec-12
654,560
21 December 2012
31-Dec-16
$0.14
$19,146
Jellicom Pty Ltd as
08-Aug-12
1,600,200
Equal monthly vesting over 12
01-Oct-18
$0.14
$148,019
-
-
0%
0%
Partners (Aust) -
(Beneficiary -
Richard Cawsey)
Managers Pty Ltd
(Beneficiary -
Richard Cawsey)
trustee for the
Three Springs
Family Trust
(Beneficiary -
Martin Hosking)
(1) Effective 1 December 2015, each share of the company was split into 40. All the numbers have been converted to equivalent post-split numbers.
(2) Value at grant date for options / performance rights has been determined by using the Black-Scholes method.
(3) The vesting of performance rights is subject to a liquidity event condition and service conditions. The numbers disclosed represent time based contingent rights (i.e. vesting contingent on the liquidity
event condition being satisfied). The liquidity event condition will be met in FY 2017 on the date six months after the date of the IPO.
(4) For Barry Newstead, Corina Davis, Martin Hosking and Rob Baumert, the noting of options as 'forfeited/lapsed' (20% in each case) in fact reflects that 80% of a total pool of shares became subject to the
option for each individual, following determination of company performance conditions outlined in the relevant option agreements.
(5) In October 2014, the Board approved a grant of 248,360, $Nil price options to Richard Cawsey, vesting over 3 years from 1 October 2014. However, the agreement was not executed at that time. This
grant will be put up for shareholders' approval during the AGM.
Denali Capital
Managers Pty Ltd
(Beneficiary -
Richard Cawsey)
Teresa Engelhard
Jellicom Pty Ltd as
trustee for the
Three Springs
Family Trust
(Beneficiary -
Vanessa Freeman
Martin Hosking)
Redbubble
9. Loans, transactions and other balances with KMP and their related parties
9.1 Other transactions with KMP
Richard Cawsey, the Chair of the Board, is a partner of Denali Venture Partners. Denali Venture Partners has provided
various consulting services to the Group for which fees of $50,000 were paid. The consulting fees are based on the
time and service provided and the rates are equivalent to other similarly sized entities. As at 30 June 2016, there was no
balance outstanding towards the consulting fees.
Chris Nunn (CFO), is a director of Elite Executive Services Pty Ltd, which provided executive relocation services to the
employees of Redbubble during the year for which the fees totaled $12,710. The fees are based on the time and service
provided and the rates are equivalent to other similarly sized entities. At the year end, the balance outstanding was
$1,865.
Rob Baumert (CF&AO), exercised a part of his options and sold the related shares during the year ended 30 June 2016,
resulting in a receivable balance of $79,000 in relation to exercise and withholding taxes on the sale. As at year end, the
balance stands recovered.
The Directors’ Report is made in accordance with a resolution of the Directors of the Company.
Richard Cawsey
Chairman
Melbourne
25 August 2016
38
39
Annual Report 2016
Consolidated statement of
comprehensive income
for the year ended 30 June 2016
40
Redbubble Consolidated statement of comprehensive income
for the year ended 30 June 2016
Consolidated statement of comprehensive income for the year ended 30 June 2016
Revenue from services
Operating expenses
Fulfiller expenses
Employee and contractor costs
Marketing expenses
Operations and administration
Depreciation and amortisation
Finance costs
Total operating expenses
Other income
Other expenses
Loss before income tax
Income tax (expense)/benefit
Total loss for the year attributable to owners
Other comprehensive income
Items that will be reclassified subsequently to profit or loss
Loss on foreign currency translation
Total other comprehensive loss attributable to owners
Total comprehensive loss for the year attributable to owners
Loss per share attributable to the ordinary equity holders of the company
Basic loss per share
Diluted loss per share
Notes
4
5
6
7 & 8
9
10
11
12
13
14
14
2016
$'000
114,578
(75,575)
(24,696)
(9,786)
(14,761)
(4,009)
(1,829)
(130,656)
300
(606)
(16,384)
(3,433)
(19,817)
(304)
(304)
(20,121)
(0.13)
(0.13)
2015
$'000
71,070
(46,998)
(14,748)
(6,529)
(8,776)
(2,027)
(235)
(79,313)
178
(669)
(8,734)
2,466
(6,268)
(541)
(541)
(6,809)
(0.07)
(0.07)
The above consolidated statement of comprehensive income should be read in conjunction with accompanying notes.
40
41
Annual Report 2016
Consolidated statement of comprehensive income
for the year ended 30 June 2016
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other financial assets
Other current assets
Current tax assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Other financial assets
Deferred tax assets
Related party loan
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Unearned revenue
Current tax liabilities
Employee benefit liabilities
Total current liabilities
Non-current liabilities
Non-current borrowings
Employee benefit liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Share based payment reserve
Foreign exchange translation reserve
Accumulated losses
Total equity
Notes
2016
$'000
2015
$'000
15 41,977 13,974
18 490
708
19 181
184
20 40
-
21 919
622
637
-
44,244 15,488
22 1,245
1,191
23 7,416
4,591
20 1,088
517
13 1,649
5,043
36
- 331
11,398 11,673
55,642 27,161
24 13,079 10,285
2,443
1,652
- 83
25 1,070
692
16,592 12,712
26
- 15,166
25 67
46
67 15,212
16,659 27,924
38,983
(763)
27 67,865
9,532
28 3,214
1,680
28 (906) (602)
(31,190) (11,373)
38,983
(763)
The above consolidated balance sheet should be read in conjunction with accompanying notes.
42
Redbubble Consolidated balance sheet
for the year ended 30 June 2016
Consolidated statement of changes in equity for the year ended 30 June 2016
2015
Balance at 1 July 2014
Loss for the year
Other comprehensive loss
Total comprehensive loss
Exercise of share options
Transfer of exercised options
Share based
payments
reserve
$'000
Accumulated
Losses
$'000
9,167 533 (61) (5,105)
Share Capital
$'000
Foreign
exchange
translation
reserve
$'000
Notes
Total
$'000
4,534
- - - (6,268) (6,268)
- - (541)
- (541)
- - (541) (6,268) (6,809)
27 177
- - - 177
188 (188)
- - -
Issue of options as share based compensation
- 461
- - 461
Issue of performance rights as share based
compensation
Balance at 30 June 2015
- 874
- - 874
9,532 1,680 (602) (11,373) (763)
2016
Balance as at 1 July 2015
Loss for the year
Other comprehensive loss
Total comprehensive loss
Share based
payments
reserve
Foreign
exchange
translation
reserve
Accumulated
Losses
Share Capital
Notes
$'000
$'000
$'000
$'000
Total
$'000
9,532 1,680 (602) (11,373) (763)
- - - (19,817) (19,817)
- -
(304)
- (304)
- - (304) (19,817) (20,121)
Issue of ordinary shares pursuant to the IPO
27 30,000
- - - 30,000
IPO costs, net of tax
8 (1,433)
- - - (1,433)
Conversion of cumulative redeemable preference
shares
26 16,273
- - - 16,273
Conversion of pre-IPO convertible notes
34 12,250
- - - 12,250
Exercise of share options
27 672
- - - 672
Transfer of exercised options / performance rights
571 (571)
- - -
Issue of options as share based compensation
- 1,361
- - 1,361
Issue of performance rights as share based
compensation
Balance at 30 June 2016
- 744
- - 744
67,865 3,214 (906) (31,190)
38,983
The above consolidated statement of changes in equity should be read in conjunction with accompanying notes.
42
43
Annual Report 2016
Consolidated statement of changes in equity
for the year ended 30 June 2016
Consolidated statement of cash flows for the year ended 30 June 2016
Cash flows from operating activities
Receipts from customers
Payments to artists
Payments to fulfillers
Payments to other suppliers and employees
Finance income received
Other income
Income taxes paid
Notes
2016
$'000
2015
$'000
145,442
87,901
(20,364)
(12,092)
(74,902)
(45,191)
(54,886)
(29,856)
190
40
120
119
(285)
(754)
Net cash (used in)/provided by operating activities
16 (4,685)
167
Cash flows from investing activities
Payment for property, plant and equipment
Payment for intangible assets
Payment for deposit on capital works
Repayment of related party loan and interest
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of share capital pursuant to the IPO
IPO costs
Proceeds from issue of pre-IPO convertible notes
Transaction costs for issue of pre-IPO convertible notes
Proceeds from issue of cumulative redeemable preference shares
Transaction costs for cumulative redeemable preference shares
Proceeds from exercise of share options
Transaction costs for establishment of loan facility
Net cash provided by financing activities
Net increase in cash and cash equivalents held
Cash and cash equivalents at beginning of year
Effect of exchange rate changes on cash and cash equivalents
(812)
(1,001)
(6,121)
(4,216)
(331)
-
333
53
(6,931)
(5,164)
27 30,000
-
8 (1,902)
-
34 12,250
10 (608)
-
-
-
15,500
-
(437)
27 672
-
177
(245)
40,412
14,995
28,796
9,998
13,974
4,621
(793)
(645)
26
26
Cash and cash equivalents at the end of the financial year
15 41,977
13,974
The above consolidated statement of cash flows should be read in conjunction with accompanying notes.
44
Redbubble 1. Corporate information
The consolidated financial statements of Redbubble
Limited for the year ended 30 June 2016 were authorised
for issue by a resolution of the Directors on 25 August
2016.
The preparation of financial statements requires the use
of certain critical accounting estimates. It also requires
management to exercise its judgment in the process
of applying the Group’s accounting policies. The areas
involving a higher degree of judgment or complexity, or
the areas where assumptions and estimates are significant
to the financial statements are disclosed in note 3.
The financial report covers Redbubble Limited and its
controlled entities as the consolidated group (the Group).
(b) Principles of consolidation
Redbubble Limited is the ultimate parent company, the
parent entity, of the Group.
Subsidiaries are all entities over which the Group has
control. Control is established when the Group is
Redbubble Limited (the Company) is a for profit company
exposed to, or has rights to variable returns from its
limited by shares, incorporated and domiciled in Australia,
involvement with the entity and has the ability to affect
whose shares are publicly traded on the Australian Stock
those returns through its power to direct the relevant
Exchange. The Company completed an Initial Public
activities of the entity. Subsidiaries are fully consolidated
Offering (IPO) on 16 May 2016 totalling $39.83 million,
from the date on which the Group gains control. They
which included $30.0 million from a primary issue (note
would be deconsolidated from the date that control
27).
The Group is a global online marketplace for independent
artists.
2. Summary of significant
accounting policies
The principal accounting policies adopted in the
preparation of these consolidated financial statements
are set out below. These policies have been consistently
applied to all the years presented, unless otherwise
stated.
(a) Basis of preparation
ceases. A list of the subsidiaries is provided in note 29 to
the financial statements.
Intercompany transactions, balances and unrealised
gains or losses on transactions between Group entities are
fully eliminated on consolidation. Accounting policies of
subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
(c) Foreign currency transaction
(i) Functional and presentation currency
The functional currency of each of the Group's entities
is the currency of the primary economic environment
in which that entity operates. The consolidated financial
statements are presented in Australian dollars which is
the parent entity's functional and presentation currency.
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.
(ii) Transaction and balances
Transactions in foreign currencies are initially recorded
by the Group’s entities at their respective functional
currency spot rates at the date the transaction first
qualifies for recognition.
The financial report is presented in Australian dollars and
all the values are rounded to the nearest thousand dollars
($000) unless otherwise stated as disclosed in note 2(w).
At the end of the reporting period:
•
Foreign currency monetary items are translated using
the closing exchange rate;
(i) Compliance with IFRS
• Non-monetary items that are measured at historical
The consolidated financial statements comply with
International Financial Reporting Standards (IFRS) as
issued by the International Accounting Standards Board
(IASB).
(ii) Historical cost convention
These financial statements have been prepared under the
historical cost convention.
(iii) Critical accounting estimates
cost are translated using the exchange rate at the
date of the transaction; and
• Non-monetary items that are measured at fair value
are translated using the exchange rate at the date
when fair value was determined.
44
45
Annual Report 2016
Exchange differences arising on the settlement of monetary
(e) Government grants
items or on translating monetary items at exchange rates
different from those at which they were translated on initial
Grants from government are recognised at the fair
recognition or in prior reporting periods are recognised
value when there is reasonable assurance that the grant
through profit or loss, except where they relate to an item
will be received and the Group has complied with the
of other comprehensive income.
required conditions. Grants relating to expense items
(iii) Group companies
The results and financial position of all the Group
are recognised as income over the periods necessary to
match the grant to costs they are compensating.
entities that have a functional currency different from
(f) Income tax
the presentation currency are translated into the
The tax expense recognised in the statement of
presentation currency (none of which has the currency of
comprehensive income relates to current income tax
a hyperinflationary economy) as follows:
expense plus deferred tax expense (being the movement
• Assets and liabilities for each balance sheet are
in deferred tax assets and liabilities and unused tax losses
translated at the closing exchange rate at the date of
during the year).
that balance sheet;
•
Income and expenses for each income statement and
statement of comprehensive income are translated at
average exchange rates; and
• All resulting exchange differences are recognised in
other comprehensive income.
Current tax is the amount of income taxes payable
(recoverable) in respect of the taxable profit (tax loss) for
the year and is measured at the amount expected to be
paid to (recovered from) the taxation authorities, using
the tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period.
(d) Revenue recognition
(i) Revenue from rendering of services
The Group provides an internet based marketplace
platform and associated logistics services to facilitate the
sale of goods from artists to those who want to purchase
goods bearing the artists’ designs. Artists display and
sell art via the Group’s website. The Group aggregates
demand from the buyers to support preferential
relationships between third party suppliers, fulfillers and
drop shippers and the artists, using the Group’s platform.
Revenue from services provided in connection with
facilitating the sale of goods is recognised when the
amount can be measured reliably at the value of the
consideration received or receivable. The Group is
acting as the artists’ agent in arranging for the selling of
the artist’s goods to customers. The amounts collected
on behalf of artists are not recognised in the income
statement. The revenue recognised by the Group is
Deferred tax is provided on temporary differences which
are determined by comparing the carrying amounts of tax
bases of assets and liabilities to the carrying amounts in
the consolidated financial statements.
Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based
on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period.
Deferred tax assets are recognised for all deductible
temporary differences and unused tax losses to the
extent:
•
it is probable that future taxable profits will be
available against which the deductible temporary
differences and losses can be utilised
•
the likelihood of continuing to meet the relevant
definitions of “same business” are met
effectively the cost of fulfilment and shipment plus the
•
there are no changes in tax legislation that adversely
Group’s margin.
affect the ability to realise the deferred tax asset
benefits.
Amounts disclosed as revenue are net of trade discounts,
returns, rebates, taxes and fraud.
(ii) Interest income
Interest income is recognised on a time proportion basis
using the effective interest method (EIR). The EIR is the
rate that exactly discounts the estimated future cash
receipts over the expected life of the financial instrument
Current tax assets and liabilities are offset where there
is a legally enforceable right to set off the recognised
amounts and there is an intention either to settle on a
net basis or to realise the asset and settle the liability
simultaneously.
Deferred tax assets and liabilities are offset where there
is or would be a legal right to set off current tax assets
or a shorter period, where appropriate, to the net carrying
against current tax liabilities and the deferred tax assets
amount of the financial asset.
and the deferred tax liabilities relate to income taxes
46
Redbubble levied by the same taxation authority on either the same
(i) Impairment of non-financial assets
taxable entity or different taxable entities which intend
At the end of each reporting period, the Group assesses
either to settle current tax liabilities and assets on a net
whether there is any indication that an asset may be
basis, or to realise the assets and settle the liabilities
impaired. If such an indication exists, an impairment test
simultaneously in each future period in which significant
is carried out on the asset by comparing the recoverable
amounts of deferred tax liabilities or assets are expected
amount of the asset, being the higher of the asset’s fair
to be settled or recovered.
value less costs to dispose, and value in use, to the asset's
carrying amount.
Current and deferred tax is recognised as income or
an expense and included in profit or loss for the period
Any excess of the asset’s carrying amount over its
except where the tax arises from a transaction which is
recoverable amount is recognised immediately in profit
recognised in other comprehensive income or equity, in
or loss, unless the asset is carried at a revalued amount
which case the tax is recognised in other comprehensive
income or equity respectively.
in accordance with another Standard (e.g. in accordance
with the revaluation model in AASB 116: Property, Plant
and Equipment). Any impairment loss of a revalued asset
(g) Property, plant and equipment
is treated as a revaluation decrease in accordance with
that other Standard.
Plant and equipment is measured on a cost basis and is
therefore carried at cost less accumulated depreciation
and any accumulated impairment losses.
Where it is not possible to estimate the recoverable
amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which
Depreciation
the asset belongs.
The depreciable amount of all fixed assets is depreciated
on a straight-line basis over the asset’s useful life to the
(j) Inventories
Group commencing from the time the asset is held ready
Inventories of packaging materials are measured at the
for use. Leasehold improvements are depreciated over
lower of cost and net realisable value. Cost of inventory is
the shorter of either the unexpired period of the lease or
determined using the first-in-first-out basis and are net of
the estimated useful lives of the improvements.
any rebates and discounts received.
The depreciation rates used for each class of depreciable
asset are shown below:
Net realisable value is the estimated selling price in the
ordinary course of business, less the estimated costs of
Class of Fixed Assets
Useful life
Leasehold improvements
Life of lease
Computer equipment
3 years
Furniture and equipment
2-5 years
At the end of each annual reporting period, the
depreciation method, useful life and residual value of
each asset is reviewed. Any revisions are accounted for
prospectively as a change in estimate.
(h) Intangible assets other than goodwill
Capitalised development costs
Expenditure during the research phase of a project is
recognised as an expense when incurred. Development
costs are capitalised only when technical feasibility
studies identify that the project is expected to deliver
future economic benefits and these benefits can be
measured reliably.
Capitalised development costs have a finite useful life and
are amortised on a straight-line basis based on the future
economic benefits over the useful life of the project,
typically between 2 to 3 years.
completion and the costs necessary to make the sale.
Net realisable value is estimated using the most reliable
evidence available at the reporting date and inventory
is written down through an obsolescence provision if
necessary.
(k) Financial assets
Loans, trade and other receivables and other financial
assets do not include derivative financial assets without
fixed or determinable payments that are quoted in an
active market.
After initial recognition, loans and trade and other
receivables are measured at amortised cost using the
effective interest method. Any change in their value is
recognised in profit or loss.
Collectability of financial assets is reviewed on an
ongoing basis. Financial assets which are known to be
uncollectible are written off by reducing the carrying
amount directly.
46
47
Annual Report 2016 (l) Cash and cash equivalents
terminate an employee’s employment before the normal
Cash and cash equivalents comprises cash on hand
an offer of benefits in exchange for the termination of
retirement date or an employee’s decision to accept
and short term deposits which are readily convertible
employment.
to known amounts of cash and which are subject to an
insignificant risk of change in value.
Termination benefits are recorded as a provision when
the Group can no longer withdraw the offer of those
(m) Trade and other payables
benefits.
Trade and other payables represent the liabilities for
(o) Leases
goods and services received by the Group that remain
unpaid at the end of the reporting period. The balance
Lease payments for operating leases, where substantially
is recognised as a current liability with the amounts
all of the risks and benefits remain with the lessor, are
normally paid within 30 days of recognition of the
liability.
charged as expenses on a straight-line basis over the life
of the lease term.
(n) Employee benefits
(p) Goods and Services Tax (GST), Value Added Tax (VAT)
and Sales Tax
(i) Wages, salaries, annual and long service leave
Provision is made for the Group's liability for employee
Revenue, expenses and assets are recognised net of the
benefits arising from services rendered by employees to
amount of goods and services tax (GST), value added
the end of the reporting period. Employee benefits that
tax (VAT) and sales tax, except where the amount of
are expected to be settled within one year have been
GST, VAT and sales tax incurred is not recoverable from
measured at the amounts expected to be paid when the
the Australian Taxation Office (ATO) or other similar
liability is settled.
International bodies.
Employee benefits expected to be settled more than
Receivables and payable are stated inclusive of GST, VAT
twelve months after the end of the reporting period have
and sales tax, where applicable.
been measured at the present value of the estimated
future cash outflows to be made for those benefits.
The net amount of GST, VAT and sales tax recoverable
In determining the liability, consideration is given to
from, or payable to, the ATO or other similar International
employee wage increases and the probability that the
bodies, is included as part of receivables or payables in
employee may satisfy vesting requirements. Cash flows
the statement of financial position.
are discounted using market yields on corporate bonds
with terms to maturity that match the expected timing of
cash flows.
The statement of cash flows includes cash on a gross
basis and the GST, VAT and sales tax component of cash
Changes in the measurement of the liability are
flows arising from investing and financing activities which
recognised in profit or loss.
is recoverable from, or payable to, the taxation authority
is classified as operating cash flows.
Employee benefits are presented as current liabilities
in the balance sheet if the Group does not have an
USA operations are subject to sales tax and UK operations
unconditional right to defer settlement of the liability
are subject to VAT.
for at least 12 months after the reporting date regardless
of the classification of the liability for measurement
purposes under AASB 119.
(q) Equity-settled compensation
The Group operates equity-settled share-based payment
employee share and option schemes. The fair value
(ii) Defined contribution schemes
of the equity to which employees become entitled is
Obligations for contributions to defined contribution
measured at grant date and recognised as an expense
superannuation plans are recognised as an employee
over the vesting period, with a corresponding increase to
benefit expense in profit or loss in the periods in which
services are provided by employees.
an equity account.
(iii) Termination benefits
Termination benefits are those benefits paid to an
employee as a result of either the Group’s decision to
The fair value of options is ascertained using a Black-
Scholes pricing model which incorporates all market
vesting conditions. The amount to be expensed is
determined by reference to the fair value of the options
48
Redbubble
or shares granted, this expense takes into account any
ordinary shares;
•
the weighted average number of shares assumed to
have been issued for no consideration in relation to
the dilutive potential ordinary shares.
(t) Parent entity financial information
The financial information for the parent entity, Redbubble
Limited, disclosed in note 30 has been prepared on the
same basis as the consolidated financial statements
except investments in subsidiaries. They are accounted
for at cost in the financial statements of the parent entity.
(u) Segment reporting
Operating segments are reported in a manner consistent
with internal reporting provided to the chief operating
decision makers, who provide the strategic direction
and management oversight of the Group in terms of
monitoring results and approving strategic planning for
the business. Given that the internal reporting provided
is not disaggregated in a way that identifies any unique
reportable segments, the Group has identified being a
global online marketplace as its only operating segment.
(v) Comparative amounts
Comparatives are consistent with prior years, unless
otherwise stated.
Where a change in comparatives would also affect the
opening retained earnings previously presented in a
comparative period, an opening statement of financial
position at the earliest date of the comparative period
would be presented.
(w) Rounding of amounts
The Company is of the kind referred to in class order
2016/191, issued by the Australian Securities and
Investments Commission, relating to the “rounding
off” of amounts in the financial statements. Amounts
in the financial statements have been rounded off in
accordance with the class order to the nearest thousand
dollars or in certain other cases, nearest dollars, unless
otherwise stated.
market performance conditions and the impact of any
non-vesting conditions but ignores the effect of any
service and non-market performance vesting conditions.
Non-market vesting conditions are taken into account
when considering the number of options expected to
vest and at the end of each reporting period, the Group
revisits its estimate. Revisions to the prior period estimate
are recognised in profit or loss and equity.
The fair value of performance rights is determined in
accordance with the fair market value of the shares
available at the grant date. Up to the date of Listing, the
fair value of shares was ascertained by carrying out an
independent valuation.
(r) 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 the profit or loss over the period
of borrowings using the effective interest method. Fees
paid on the establishment of loan facilities, which are
not an incremental cost relating to the actual draw-
down of the facility, are recognised as transaction costs
of the loan to the extent that it is probable that some or
all 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 amortised on a
straight-line basis over the term of the facility.
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.
(s) Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
•
the profit attributable to owners of the Company,
excluding any cost of servicing equity other than
ordinary shares;
• by the weighted average number of ordinary shares
outstanding during the financial year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into
account:
•
the after income tax effect of interest and other
financing costs associated with the dilutive potential
48
49
Annual Report 2016 3. Critical accounting estimates
(iii) Recognition of deferred tax assets
Deferred income taxes arise from temporary differences
between the tax and financial statement recognition of
revenue and expense, the incurrence of tax losses and
entitlement to non-refundable tax offsets. In evaluating
the Group’s ability to recover deferred tax assets within
the jurisdiction from which they arise, the Group
considers all available positive and negative evidence,
including probability of achieving appropriate continuity
of ownership levels, likelihood of meeting relevant
definitions of “same business”, scheduled reversals of
deferred tax liabilities, projected future taxable income
and results of recent operations. This evaluation requires
significant management judgment. Refer to note 13 for
more details.
(iv) Share-based payments
Equity-settled share-based payments with employees are
measured at the fair value of the equity instrument at the
grant date. Fair value of options is measured by using a
Black-Scholes model and fair value of performance rights
is measured by using the fair value of shares available at
the grant date. Up to the date of Listing, the fair value of
shares was determined by carrying out an independent
valuation. Refer to notes 5 and 35 for more details.
(v) USA sales tax
The Group currently collects and remits sales tax on sales
made via the Redbubble website to customers in the US
state of California. Management believes a sales tax nexus
may exist due to its own offices being situated in that
state. Significant management judgement is required to
determine if nexus exists in other states. Management has
determined that no taxes are payable in relation to sales
in other states.
and judgements
Estimates and judgments are continually evaluated and
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 circumstances. The Group makes
estimates and assumptions concerning the future which
may not equal the related actual results. These are
discussed below.
(i) Revenue recognition principal versus agent
The Group is acting as the artists’ agent in arranging
for the selling of the artist’s goods to customers for
accounting purposes only. The amounts collected
on behalf of artists are not recognised in the income
statement.
The revenue recognised by the Group is effectively the
cost of fulfilment and shipping plus Group’s margin.
Given the nature of the relationship between the Group
and product fulfillers and the associated risks and
rewards, the Group has determined, for accounting
purposes only, that it is acting as a principal with respect
to fulfillers as opposed to as an agent.
(ii) Development costs – capitalisation, valuation
and impairment
Expenditure during the research phase of a project is
recognised as an expense when incurred. Development
costs are capitalised only when technical feasibility
studies identify that the project is expected to deliver
future economic benefits and these benefits can be
measured reliably. Determining the feasibility of the
project and the likelihood of the project delivering future
economic benefits, which can be measured reliably, is a
significant management estimate and judgement.
Capitalised development costs have a finite useful life and
are amortised on a systematic basis based on the future
economic benefits over the useful life of the project,
typically between 2 to 3 years and are considered for
impairment at each reporting date. Refer to note 23 for
more details.
50
Redbubble
4. Fulfiller expenses
Fulfiller expenses (1)
Total fulfiller expenses
2016
$'000
2015
$'000
75,575 46,998
75,575 46,998
(1) Fulfiller expenses comprise of product and printing, shipping and transaction costs and are equivalent to cost of goods sold.
5. Employee and contractor costs
Salary costs
Contractor costs
Share-based payments and other long-term incentives
Superannuation costs and other pension related costs (1)
Total employee and contractor costs
2016
$'000
2015
$'000
16,819 10,745
4,575
1,958
2,105
1,340
1,197
705
24,696 14,748
(1) Includes contribution to 401K funds, which is the superannuation equivalent for the USA subsidiary.
6. Marketing expenses
Paid marketing
Other marketing expenses
Total marketing expenses
7. Operations and administration
Technology infrastructure and software costs
IPO costs (note 8)
Travel expenses
Rental expense on operating leases
Recruiting expenses
Other operations and administration expenses
Total operations and administration
2016
$'000
7,661
2,125
9,786
2015
$'000
4,260
2,269
6,529
2016
$'000
2015
$'000
4,352
2,071
2,011
-
1,480
998
1,208
991
1,009
1,098
4,701
3,618
14,761
8,776
50
51
Annual Report 2016
8. Initial Public Offering (IPO) costs
IPO costs expensed
IPO costs, net of tax, charged to equity
Total IPO costs
2016
$'000
2015
$'000
2,011
-
1,433
-
3,444
-
In May 2016, the Company completed an IPO totalling $39.83 million. The IPO comprised a primary issue of 22,556,391 ordinary shares ($30.00
million) and a secondary sale 7,393,401 shares ($9.83 million). Total costs of $3.44 million were incurred as a result of the offer of which $1.43
million ($1.90 million before tax) related to the primary issue and has been charged to equity in accordance with AASB132 (note 27).
9. Depreciation and amortisation
Depreciation of property, plant and equipment (note 22)
Amortisation of capitalised development costs (note 23)
Total depreciation and amortisation
10. Finance costs
2016
$'000
752
3,257
4,009
2015
$'000
249
1,778
2,027
2016
$'000
2015
$'000
Interest and amortised transaction costs on cumulative redeemable preference shares (CRPS) (1)
Transaction costs on pre-IPO convertible notes (Convertible Notes) (2)
Transaction costs on loan facility with the Commonwealth Bank of Australia (CBA) (3)
Total finance costs
1,108
103
608
-
113
132
1,829
235
(1) The CRPS were issued on 21 May 2015 and converted into ordinary shares upon the IPO. The interest for the year up to the date of IPO of $0.69
million is included above. The transaction costs incurred in relation thereto were being amortised over a period of 3 years. On conversion, however,
the remaining unamortised transaction costs of $0.42 million were amortised (note 26).
(2) On 21 March 2016, the Company raised $12.25 million (face value) by issuing Convertible Notes which converted into ordinary shares upon the
IPO. The transaction costs of $0.61 million incurred in relation thereto have been expensed during the year (note 34).
(3) Represents amortisation of transaction costs incurred for establishment of a loan facility with CBA that expired on 8 December 2015 and was not
renewed.
52
Redbubble
11. Other income
Finance income
Government grant - export market development grant
Total other income
12. Other expenses
Net foreign exchange loss recognised in loss before income tax
Other expenses
Total other expenses
13. Income tax
(a) Income tax expense/(benefit)
Current tax
Deferred tax
Over provision in prior years
Total income tax expense/(benefit)
Deferred income tax expense/(benefit) included in income tax expense/(benefit) comprises:
Decrease/(increase) in deferred tax assets
Increase in deferred tax liability
Deferred tax
2016
$'000
180
120
300
2016
$'000
598
8
606
2016
$'000
(424)
3,863
(6)
3,433
2,910
953
3,863
2015
$'000
59
119
178
2015
$'000
661
8
669
2015
$'000
951
(3,313)
(104)
(2,466)
(3,917)
604
(3,313)
52
53
Annual Report 2016
13. Income tax (continued)
(b) Numerical reconciliation of income tax expense/(benefit) to prima facie tax payable
Loss from ordinary activities before income tax expense/(benefit)
Income tax calculated @ 30%
Tax effect of amounts that are not deductible/(taxable) in calculating income tax:
Tax effect of non-allowable items
Tax effect of US tax rate
2016
$'000
(16,384)
(4,915)
153
14
2015
$'000
(8,734)
(2,620)
206
28
Unrecognised tax losses and research and development tax offsets
7,764
-
Recognition of previously unrecognised deferred tax assets in the US subsidiary
US income tax benefit due to exercise/disposition of employee stock options
(475)
-
(401)
-
Research and development
Share-based payments
Other non-deductible/non-assessable items
Income tax adjusted for permanent differences:
Effect of movements in foreign exchange
Over provision in prior year
Income tax expense/(benefit) attributable to loss from ordinary activities
923
475
115
(214)
(6)
3,433
(311)
252
89
(6)
(104)
(2,466)
54
Redbubble
13. Income tax (continued)
(c) Deferred tax assets
(c) Deferred tax assets
The balance comprises temporary differences attributable to:
(c) Deferred tax assets
The balance comprises temporary differences attributable to:
The balance comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Amounts recognised in profit or loss:
Employee benefits
Employee benefits
Carry forward state tax credits
Carry forward state tax credits
Deferred expenditure - other
Deferred expenditure - other
Unrealised foreign exchange losses
Unrealised foreign exchange losses
Legal and acquisition costs
Legal and acquisition costs
Carried forward tax losses
Carried forward tax losses
Research and development tax offset
Research and development tax offset
Property, plant, equipment and intangible assets
Property, plant, equipment and intangible assets
IPO costs
IPO costs
Other items
Other items
Net deferred tax assets
Net deferred tax assets
Movements:
Movements:
Opening balance at 1 July
Opening balance at 1 July
Credited to the consolidated balance sheet
Credited to the consolidated balance sheet
(Debited)/Credited to the consolidated statement of comprehensive income
(Debited)/Credited to the consolidated statement of comprehensive income
Closing balance at 30 June
Closing balance at 30 June
2016
2016
$'000
$'000
2015
2015
$'000
$'000
536
536
133
133
361
361
-
-
127
127
385
385
-
-
(973)
(973)
141
141
1,649
1,649
563
563
61
61
85
85
287
287
171
171
2,474
2,474
2,175
2,175
(769)
(769)
939 -
939 -
(4)
(4)
5,043
5,043
5,043
5,043
469
469
(3,863)
(3,863)
1,649
1,649
-
-
1,730
1,730
3,313
3,313
5,043
5,043
(d) Unrecognised deferred tax assets
(d) Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items: (1)
(d) Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items: (1)
Deferred tax assets have not been recognised in respect of the following items (1):
Tax losses
Tax losses
Research and development tax offsets
Research and development tax offsets
Total
Total
2016
2016
$'000
$'000
5,088
5,088
2,676
2,676
7,764
7,764
2015
2015
$'000
$'000
-
-
-
-
-
-
(1) During the current year, the Group de-recognised deferred tax assets (DTA) of $4.65 million attributable to Australian carried forward tax
(1) During the current year, the Group de-recognised deferred tax assets (DTA) of $4.65 million attributable to Australian carried forward tax
losses and non-refundable research and development offsets up to 30 June 2015, reflecting a more conservative approach to the treatment of
losses and non-refundable research and development offsets up to 30 June 2015, reflecting a more conservative approach to the treatment of
tax losses. Further, DTA of $3.11 million in relation to tax losses incurred and non-refundable research and development offsets up to the date
tax losses. Further, DTA of $3.11 million in relation to tax losses incurred and non-refundable research and development offsets up to the date
of IPO have not been recognised.
of IPO have not been recognised.
54
55
Annual Report 2016
14. Loss per share
Information concerning the classification of securities
(i) Fully paid ordinary shares
All ordinary shares are fully paid and have been included in determination of both the basic loss per share and the
diluted loss per shares.
(ii) Potential ordinary shares
None of the options over ordinary shares, performance rights, warrants over ordinary shares and former preference
shares that could be considered as potential ordinary shares have been included in determination of diluted EPS, since
they are anti-dilutive. Due to losses incurred during the current as well the prior year, inclusion of potential ordinary
shares in weighted average number of shares would increase the denominator used in calculating diluted EPS and
thereby reduce the loss per share.
Basic loss per share
Basic loss per share attributable to the ordinary equity holders of the company
Diluted loss per share
Diluted loss per share attributable to the ordinary equity holders of the company
Weighted average number of shares used as the denominator
2016
$ per share
2015
$ per share
(0.13)
(0.13)
2016
number
(0.07)
(0.07)
2015
number
Weighted average number of shares used as denominator in calculating basic and diluted
loss per share (1)
150,413,364
92,118,160
(1) Effective 1 December 2015, each share of the Company was split into 40. The weighted average number of shares has been converted to
equivalent post split number.
Reconciliation of loss used in calculating loss per share
Loss attributable to the ordinary equity holders of the company used in calculating basic
and diluted loss per share
2016
$'000
(19,817)
2015
$'000
(6,268)
56
Redbubble
15. Cash and cash equivalents
Cash at bank and on hand
Fixed term bank deposits (1)
Total cash and cash equivalents
2016
$'000
2015
$'000
20,977
3,974
21,000 10,000
41,977 13,974
(1) Fixed term bank deposits attract interest at normal term deposit rates. They are placed for a period of 1-3 months and are not subject to any risk of
change of values.
16. Reconciliation of loss for the year to net cash (outflow)/inflow from
operating activities
Loss for the year
Non-cash items
De-recognition/(recognition) of deferred tax asset
Depreciation and amortisation
Amortisation of share-based payments
Unrealised foreign exchange losses
2016
$'000
2015
$'000
(19,817)
(6,268)
3,863 (3,313)
4,009
2,027
2,105
1,340
868
799
Net loss on the disposal/write off of property, plant and equipment and intangible assets
82
34
Finance costs on CRPS and loan facility with CBA
Classified as investing/financing activities
Interest on related party loan
Transaction costs on Convertible Notes
Change in operating assets and liabilities
Decrease/(Increase) in trade and other receivables
Increase in prepayments
Decrease/(Increase) in inventories
(Increase)/Decrease in current tax assets
Increase in other financial assets
Increase in trade and other payables
Increase in unearned revenue
(Decrease)/Increase in current tax liabilities
Increase in employee benefit liabilities
Exchange loss on translation of foreign operations
Net cash (outflow)/inflow from operating activities
1,221
235
(2) (6)
608
-
205 (323)
(410) (220)
3 (142)
(237)
10
(280)
(81)
2,655
5,631
867
730
(83)
83
399
263
(341) (632)
(4,285)
167
56
57
Annual Report 2016 17. Financial risk management
This note explains the Group’s financial risk management and how the exposure to these risks affects the Group’s
future financial performance.
The Group’s risk management is carried out by the senior management through delegation from the Board of
Directors. The Board oversees and monitors senior management’s implementation of the Group’s risk management
framework. This is based on recommendations from the Audit & Risk Committee, where appropriate. The risk
management framework includes policies and procedures approved by the Board and managed by internal legal
counsel and the finance function.
The Group holds the following financial instruments:
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Related party loan
Financial liabilities
Trade and other payables
Non-current borrowings (principal)
Non-current borrowings (interest)
Notes
2016
$'000
2015
$'000
15 41,977 13,974
18 490
708
20 1,128
36 -
517
331
24 13,079 10,285
26
26
- 15,500
- 87
The carrying value of the assets and liabilities disclosed in the table closely approximates or equals their fair value.
Cash and cash equivalents (note 15) and security held with banks (note 20) attract variable interest rates. All other
financial assets and liabilities are non-interest bearing.
(a) Market risk
Foreign exchange risk
The Group collects funds from customers in five currencies (USD, AUD, EUR, CAD and GBP) and maintains bank
accounts in these currencies. The Group has liabilities to vendors or artists in these currencies. The Group settles
its liabilities in the native currency hence creating a natural hedge. Any surplus funds are converted to AUD or USD
based operating accounts when management feels it is prudent to do so. During the year, the Group began to employ
European suppliers for European sales. The Group is progressively localising fulfilment which will further aid in the
natural hedge.
58
Redbubble 17. Financial risk management (continued)
(a) Market risk (continued)
The foreign currency assets and liabilities (expressed in AUD) held by the Group, which are largely held by the USA
subsidiary whose functional currency is USD, are as below:
At 30 June 2016
Cash and cash equivalents
Trade receivables
Trade and other payables
Net exposure
At 30 June 2015
Cash and cash equivalents
Trade receivables
Trade and other payables
Net exposure
GBP
$'000
USD
$'000
EUR
$'000
1,677 105
1,389
76
- 36
(1,275)
478
(272)
(167)
(1,043)
382
GBP
$'000
426
USD
$'000
(17)
133
-
(1,450)
(891)
(202)
(219)
EUR
$'000
331
60
(210)
181
CAD
$'000
450
26
(118)
358
CAD
$'000
64
35
(74)
25
Total
$'000
3,621
138
(2,708)
1,051
Total
$'000
804
228
(1,936)
(904)
Since the foreign currency exposure as at year-end is minimal, the impact of movement in foreign exchange rates on
Group’s net profit and equity would be immaterial.
(b) Credit risk
Credit risk is a risk that counterparty will default on its contractual obligations resulting in a financial loss to the Group.
The Group faces primary credit risk from potential default on receivables by payment service providers. The Group
receives payments of the balance due from two service providers every 1-3 days. The credit risk of balances held
with another service provider is managed by regularly sweeping funds out of the provider accounts into a portfolio of
managed banking facilities held with highly rated and regulated financial institutions.
(i) Cash and bank balances/financial assets
As at 30 June 2016, the Group has $21.0 million (2015: $10.0 million) held in bank deposits, classified as cash and
cash equivalents, and $0.44 million (2015: $0.26 million) in deposits placed with banks as security, classified as other
financial assets, that attract interest at normal term deposit rates.
The Group’s bank accounts are predominantly non-interest bearing accounts. In Australia, funds in excess of the short-
term liquidity requirements are moved to savings account that attracts interest at normal bank rates on balances over
$0.01 million.
The financial assets include certain other operational deposits over and above the deposits placed with banks as
security.
The banks with which the accounts are maintained/deposits are placed are reputable financial institutions and hence,
the credit risk is considered low. Further, the balances are not concentrated with any one bank.
58
59
Annual Report 2016
17. Financial risk management (continued)
(b) Credit risk (continued)
(ii) Trade receivables
The Group is not exposed to any significant credit risk on account of trade receivables. The Group accepts payments
either via credit card, Paypal or Amazon payments. In any case, the Group ensures that cash is received up front prior
to the product being manufactured. The trade receivables balance as at 30 June 2016 represents amounts receivable
from two of these payment service providers. It is believed that the credit risk from collections from payment service
providers is minimal.
The Group does encounter credit card fraud, which is typical for the industry. Such fraud has been immaterial to the
Group.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and ensuring that all term deposits can be
converted to funds in accordance with forecast cash usage. Due to the dynamic nature of the underlying business,
flexibility in funding is maintained by ensuring ready access to the cash reserves of the business.
Term deposits classified as cash and cash equivalents are placed for a period of 1 to 3 months. These can be withdrawn
prematurely but may incur a minor penalty in the form of reduced interest earned.
During the year, the Group raised $12.25 million by issuing pre-IPO convertible notes (note 34) that were converted
into ordinary shares upon IPO. Further, the Group raised $30 million through the IPO (note 27).
All financial liabilities are current and anticipated to be repaid over the normal payment terms, usually 30 days.
(i) Financial arrangements
The Group had no borrowing facilities at the end of reporting period.
Fixed rate
Expiring within one year (bank loan)
2016
$'000
Drawn
2015
$'000
Undrawn
2015
$'000
2016
$'000
2016
$'000
Total
2015
$'000
-
-
- 5,000
- 5,000
Expiring beyond one year (cumulative redeemable preference shares)
- 15,500
-
-
- 15,500
Total
- 15,500
- 5,000
- 20,500
The cumulative redeemable preference shares were converted into ordinary shares upon the IPO (note 26).
(ii) Maturities of financial liabilities
The following table summarises the maturity profile of the Group’s financial liabilities based on contractual
undiscounted payments.
60
Redbubble 17. Financial risk management (continued)
(c) Liquidity risk (continued)
Contractual maturities of financial liabilities
At 30 June 2016
Trade and other payables
Borrowings (principal)
Borrowings (interest)
Total financial liabilities
Contractual maturities of financial liabilities
At 30 June 2015
Trade and other payables
Borrowings (principal)
Borrowings (interest)
Total financial liabilities
Less than 6
months
$'000
6 to 12
months
$'000
Between 1 and
2 years
$'000
Between 2 and
3 years
$'000
Total
contractual
cash flows
$'000
13,079
- - - 13,079
- - - - -
- - - - -
13,079
- - - 13,079
Less than 6
months
$'000
6 to 12
months
$'000
Between 1 and
2 years
$'000
Between 2 and
3 years
$'000
Total
contractual
cash flows
$'000
10,285
- - - 10,285
- - - 15,500 15,500
- - - 2,325 2,325
10,285
- - 17,825 28,110
The Group’s policy is to maintain a capital structure for the business which ensures sufficient liquidity, provides support
for business operations, maintains shareholder confidence and positions the business for future growth. The Group
manages its capital structure and makes adjustments in light of changes in economic conditions.
The ongoing maintenance of the Group’s policy is characterised by ongoing cash flow forecast analysis and detailed
budgeting processes which, combined with continual development of banking relationships, is directed at providing a
sound financial positioning for the Group’s operations and financial management activities.
The Group is not subject to externally imposed capital requirements. The Group complied with all the bank lending
requirements to maintain the loan facility during the prior year and this year until the facility expired in December 2015.
18. Trade and other receivables
Trade receivables
Other receivable
Total trade and other receivables
Ageing of net trade receivables from due date
(a)
(a) Impairment
None of the above balances are impaired or past due.
Current - 30 days
Closing balance
2016
$'000
2015
$'000
441
695
49
13
490
708
2016
$'000
2015
$'000
441
695
441
695
60
61
Annual Report 2016 (b) Ageing of net trade receivables from due date
(b) Ageing of net trade receivables from due date
Current - 30 days
Trade receivables
Closing balance
Trade receivables
Other receivable
Other receivable
Total trade and other receivables
Total trade and other receivables
(a)
(c) Credit risk and fair value
Ageing of net trade receivables from due date
2016
2016
$'000
$'000
2016
-
441
$'000
2015
2015
$'000
$'000
2015
695
695
$'000
-
441
49
695
695
13
49
490
13
708
490
708
Ageing of net trade receivables from due date
(a)
The Group has no significant concentration of credit risk with respect to any single counterparty or group of
counterparties. Refer to note 17 for more information on the risk management policy of the group. The carrying
Current - 30 days
amount of trade and other receivables is considered a reasonable approximation of fair value due to the short-term
695
Current - 30 days
695
Closing balance
nature of the balances. The maximum exposure to credit risk at the reporting date is the carrying amount of each class
695
Closing balance
of receivable in the financial statements.
441
441
441
2016
$'000
2016
441
$'000
2015
$'000
2015
695
$'000
(d) Collateral held as security
The Group does not hold any collateral in relation to these receivables.
19. Inventories
At cost:
Packaging supplies
Total inventories
20. Other financial assets
(a)
Current other financial assets
Security held with banks (1)
Current deposits/advances
Security held with banks (1)
Total current financial assets
Current deposits/advances
Total current financial assets
Non-current financial assets
(b)
Non-current financial assets
Non-current other financial assets
Security held with banks (1)
Non-current deposits/advances (2)
Security held with banks (1)
Total non-current financial assets
Non-current deposits/advances (2)
Total non-current financial assets
(1) Relates largely to term deposits held as security against lease obligations.
(2) Includes capital advances of $0.33 million (2015: $Nil).
(1) Relates largely to term deposits held as security against lease obligations.
(2) Includes capital advances of $0.33 million (2015: $Nil).
(*) Movement has been combined with movement of non-current other financial assets.
(*) Movement has been combined with movement of non-current other financial assets.
62
2016
$'000
181
181
2015
$'000
184
184
2016
$'000
2016
36
$'000
4
36
40
4
2015
$'000
2015
$'000
-
-
-
-
-
40
-
2016
$'000
2016
409
$'000
679
409
1,088
679
2015
$'000
2015
263
$'000
254
263
517
254
1,088
517
Redbubble
21. Other current assets
Prepayments
Unamortised borrowing cost (1)
Total other current assets
2016
$'000
2015
$'000
919
509
-
113
919
622
(1) On 8 December 2014, the Group entered into a loan facility agreement with the CBA for $5.00 million. The facility term was for one year and
expired during the current year. It has not been renewed and there has been no drawdown. The facility was secured by a floating charge on the
Group's present and after acquired property. The unamortised transaction costs of $0.11 million as at 30 June 2015 have been amortised during
the current year (note 10).
22. Property, plant and equipment
Cost
Note
$'000
$'000
$'000
Leasehold improvements
Furniture and equipment
Computer equipment
Total
$'000
Balance at 1 July 2015
754
344
691
1,789
Additions
Disposals
124
84
604
812
-
- (30)
(30)
Exchange differences
10
6
6
22
Balance at 30 June 2016
888
434
1,271
2,593
Balance at 1 July 2014
188
151
422
761
Additions
Disposals
537
184
280
1,001
-
(14)
(46)
(60)
Exchange differences
29
23
35
87
Balance at 30 June 2015
754
344
691
1,789
Accumulated depreciation
Balance at 1 July 2015
Charge for the year
Disposals
Exchange differences
Balance at 30 June 2016
Balance at 1 July 2014
Charge for the year
Disposals
Exchange differences
Balance at 30 June 2015
Net book value
As at 30 June 2016
As at 30 June 2015
(136)
(396)
(94)
(86)
(368)
(598)
(270)
(752)
-
- 18
18
(1)
(533)
(44)
(81)
(1)
(181)
(45)
(47)
(14)
(16)
(634)
(1,348)
(245)
(334)
(121)
(249)
9
9
- 7
19
26
(11)
(136)
355
618
(9)
(94)
253
250
(21)
(41)
(368)
637
323
(598)
1,245
1,191
The property, plant and equipment shown above relates to Redbubble offices in Melbourne and San Francisco.
62
63
Annual Report 2016
23. Intangible Assets
Cost
Balance at 1 July 2015
Additions
Disposals
Exchange differences
Balance at 30 June 2016
Balance at 1 July 2014
Additions
Disposals
Exchange differences
Balance at 30 June 2015
Accumulated amortisation
Balance at 1 July 2015
Charge for the year
Disposals
Exchange differences
Balance at 30 June 2016
Balance at 1 July 2014
Charge for the year
Disposals
Exchange differences
Balance at 30 June 2015
Net book value
As at 30 June 2016
As at 30 June 2015
Capitalised development
costs
Note
$'000
7,434
6,121
(72)
30
13,513
3,157
4,216
-
61
7,434
(2,843)
(3,257)
2
1
(6,097)
(1,044)
(1,778)
-
9
9
(21)
(2,843)
7,416
4,591
Development costs are capitalised only when technical feasibility studies identify that the project is expected to deliver
future economic benefits and these benefits can be measured reliably. The development costs have finite useful lives
typically between 2 to 3 years with a weighted average of 2.2 years.
64
Redbubble
24. Trade and other payables
Trade and other payables (1)
GST and other value added taxes payable
Total trade and other payables
(1) Largely includes payables to fulfillers and artists.
25. Employee benefit liabilities
(a) Current employee benefit liabilities
Annual leave
Annual leave
Long service leave
Long service leave
Total current employee benefit liabilities
Total current employee benefit liabilities
(b) Non-current employee benefit liability
(b) Non-current employee benefit liability
(b) Non-current employee benefit liability
Long service leave
Long service leave
Total non-current employee benefit liability
Total non-current employee benefit liability
2016
$'000
2015
$'000
12,495
9,806
584
479
13,079 10,285
2016
2016
$'000
$'000
976
976
94
94
1,070
1,070
2015
2015
$'000
$'000
627
627
65
65
692
692
2016
2016
$'000
$'000
67
67
67
67
2015
2015
$'000
$'000
46
46
46
46
(c) Unrecognised contingent liabilities
The are no unrecognised contingent liabilities as at 30 June 2016 (2015: $Nil).
26. Non-current borrowings
Unsecured cumulative redeemable preference shares (CRPS) (1)
Total non-current borrowings
2016
$'000
2015
$'000
- 15,166
- 15,166
(1) On 21 May, 2015, the Group raised $15.50 million by issuing 476,774 CRPS at $32.51 per share (face value) and incurred transactions costs of
$0.44 million of which $0.02 million was amortised up to 30 June 2015. During the current year, the CRPS were converted into ordinary shares on
occurrence of the IPO. In order to calculate the number of ordinary shares issued on conversion, both the face value and the accumulated unpaid
dividends up to the date of IPO were aggregated. Effective 1 December 2015, each share of the Company was split into 40. Accordingly, the CRPS
were converted at a value of $0.81 (post-split) $32.51 (pre-split) and 20,022,554 ordinary shares were issued for $16.27 million.
64
65
Annual Report 2016 (a) Share capital
27. Contributed equity
(a) Share capital
(a) Share capital
(a) Share capital
Ordinary shares
Ordinary shares
Issued and fully paid
Issued and fully paid
Transfer from share based payments reserve
Ordinary shares
for exercised options / performance rights
Transfer from share based payments reserve
for exercised options / performance rights
Issued and fully paid
Total share capital
Total share capital
Transfer from share based payments reserve
for exercised options / performance rights
Check - tie to BS
Total share capital
Check - tie to BS
Should be zero
Should be zero
Check - tie to BS
(b) Movements in ordinary share capital
Should be zero
(b) Movements in ordinary share capital
(b) Movements in ordinary share capital
At 1 July 2014
At 1 July 2014
(b) Movements in ordinary share capital
Exercise of options
2016
2016
Shares
Shares
Consolidated and parent entity
Consolidated and parent entity
Consolidated and parent entity
2015
Shares (1)
2015
Shares (1)
2015
Shares (1)
2016
2016
$'000
$'000
2015
2015
$'000
$'000
2016
198,352,517 141,263,640 67,106
2016
198,352,517 141,263,640 67,106
$'000
- 759
-
Shares
2015
9,344
9,344
$'000
188
-
- 759
198,352,517 141,263,640 67,106
198,352,517 141,263,640 67,865
188
9,344
9,532
-
198,352,517 141,263,640 67,865
- 759
67,865
198,352,517 141,263,640 67,865
67,865
-
9,532
188
9,532
9,532
9,532
-
-
-
67,865
9,532
-
-
$'000
$'000
974
974
177
Number of Shares (1)
Number of Shares (1)
47,849,000
47,849,000
2,814,000
Number of Shares (1)
2,814,000
90,600,640
47,849,000
90,600,640
141,263,640
2,814,000
141,263,640
3,710,273
672
8,193
-
177
$'000
8,193
974
8,193
9,344
177
9,344
672
3,710,273
90,600,640
565,740
565,740
141,263,640
22,556,391
3,710,273
22,556,391
-
565,740
-
20,022,554
22,556,391
20,022,554
10,233,919
-
9,344
30,000
672
30,000
(1,433)
-
(1,433)
16,273
30,000
16,273
12,250
(1,433)
12,250
198,352,517 67,106
Exercise of options
Conversion of preference shares to ordinary shares
At 1 July 2014
Conversion of preference shares to ordinary shares
At 30 June 2015
Exercise of options
At 30 June 2015
Exercise of options
Conversion of preference shares to ordinary shares
Exercise of options
Shares issued to employees for vested performance rights
At 30 June 2015
Shares issued pursuant to the IPO (2)
Shares issued to employees for vested performance rights
Shares issued pursuant to the IPO (2)
Exercise of options
IPO costs, net of tax (2)
IPO costs, net of tax (2)
Shares issued to employees for vested performance rights
Shares issued on conversion of CRPS (3)
Shares issued pursuant to the IPO (2)
Shares issued on conversion of CRPS (3)
Share issued on conversion of pre-IPO convertible notes (Convertible Notes) (4)
IPO costs, net of tax (2)
Share issued on conversion of pre-IPO convertible notes (Convertible Notes) (4)
At 30 June 2016
Shares issued on conversion of CRPS (3)
At 30 June 2016
Share issued on conversion of pre-IPO convertible notes (Convertible Notes) (4)
12,250
(1) Effective 1 December 2015, each share of the company was split into 40. All the numbers have been converted to equivalent post split numbers
(1) Effective 1 December 2015, each share of the company was split into 40. All the numbers have been converted to equivalent post split numbers
At 30 June 2016
for better understanding and comparison.
for better understanding and comparison.
(2) Refer to note 8 for details of the IPO.
(1) Effective 1 December 2015, each share of the company was split into 40. All the numbers have been converted to equivalent post split numbers
(2) Refer to note 8 for details of the IPO.
(3) Refer to note 26 for details of the CRPS.
for better understanding and comparison.
(3) Refer to note 26 for details of the CRPS.
(4) Refer to note 34 for details of the Convertible Notes.
(2) Refer to note 8 for details of the IPO.
(4) Refer to note 34 for details of the Convertible Notes.
(3) Refer to note 26 for details of the CRPS.
(c) Movements in preference share capital
(c) Movements in preference share capital
(c) Movements in preference share capital
(4) Refer to note 34 for details of the Convertible Notes.
At 1 July 2014
Conversion of preference shares to ordinary shares effective 9 January 2015
At 1 July 2014
(c) Movements in preference share capital
Conversion of preference shares to ordinary shares effective 9 January 2015
At 30 June 2015
At 1 July 2014
At 30 June 2015
At 30 June 2016
Conversion of preference shares to ordinary shares effective 9 January 2015
At 30 June 2016
8,193
(8,193)
$'000
(8,193)
-
2,265,016
(2,265,016)
Number of Shares
(2,265,016)
198,352,517 67,106
198,352,517 67,106
Number of Shares
2,265,016
$'000
8,193
2,265,016
8,193
-
-
(8,193)
-
Number of Shares
(2,265,016)
10,233,919
20,022,554
10,233,919
16,273
$'000
-
-
-
-
-
At 30 June 2015
At 30 June 2016
(d) Ordinary shares
-
-
-
-
The holders of ordinary shares are entitled to participate in dividends and the proceeds on winding up of the Company.
On a show of hands at meetings of the Company, each holder of ordinary shares has one vote in person or by proxy,
and upon a poll each share is entitled to one vote.
The Company does not have authorised capital or par value in respect of its shares.
66
Redbubble
27. Contributed equity (continued)
(e) Preference shares (issued up to 30 June 2014 and converted to ordinary shares on 9 January 2015)
The holders of Preference shares had preferential rights: to all dividends ahead of ordinary shareholders; to the
subscription amount and to the declared but unpaid dividends in the event of liquidation; to the subscription amount in
the event of a sale of the existing shares in the Company; to convert to ordinary shares at any time.
(f) Transfer from share based payment reserve
During the year, an amount of $0.57 million (2015: $0.19 million) was transferred out of the share based payment
reserve to share capital representing aggregated fair value of options / performance rights exercised during the year.
The prior year amount represents aggregated fair value of options exercised up to 30 June 2015.
(g) Dividends
No Dividends were declared or paid during the year.
28. Reserves
Nature and purpose of reserves
(a) Share based payment reserve
The share based payments reserve arises on issue of share options / performance rights as payment for services to
consultants, employees and Directors.
(b) Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entities are recognised in other comprehensive
income ‑ foreign currency translation reserve. The cumulative amount is reclassified to profit or loss when the net
investment to which it relates is disposed of.
29. Interests in subsidiaries
Information about principal subsidiaries
The subsidiaries listed below have share capital consisting solely of ordinary shares, which are held directly by the
parent entity, Redbubble Limited. The proportion of ownership interests held equals the voting rights held by the parent
entity. Each subsidiary’s principal place of business is also its country of incorporation or registration.
Name of Entity
Country of
incorporation
Principal activities
Redbubble Incorporated
USA
Limited risk distributor engaged in world wide
marketing and logistics operations for the parent entity
Redbubble Europe Limited
UK
Marketing and logistics operations in Europe
Equity holding
2016
%
Equity holding
2015
%
100
100
100
100
Subsidiary financial statements used in the preparation of these consolidated financial statements have been prepared
as at the same reporting date as the Group’s financial statements.
66
67
Annual Report 2016 30. Parent entity financial information
The following information has been extracted from the books and records of the parent entity, Redbubble Limited and
has been prepared in accordance with accounting standards.
(a) Summary financial information
Statement of financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Share based payment reserve
Accumulated losses
Total equity
Loss and other comprehensive income
Loss for the year
Total comprehensive loss
2016
$'000
2015
$'000
98,546 42,521
9,003
9,631
107,549 52,152
69,351 52,249
67
46
69,418 52,295
67,865
9,532
3,214
1,680
(32,948) (11,355)
38,131 (143)
(20,827)
(6,480)
(20,827)
(6,480)
(b) Guarantees entered into by the parent entity
The parent entity has not entered into any guarantees as at 30 June 2016 (2015: $Nil).
(c) Contingent liabilities of the parent entity
As at the date of these financial statements there are current lawsuits filed against entities within the Group that relate
to alleged intellectual property infringement and/or breach of consumer laws.
It is not possible for the Company to provide any reliable assessment of the likely quantum of damages that may
become payable upon an adverse finding under any of the claims.
No trial dates have been set for any of the claims and therefore it is not practicable to state the timing of any payment
that may arise from an adverse finding.
The Company considers that it is only possible but not probable that any action will succeed and accordingly no
provision for any liability has been made in these financial statements.
68
Redbubble
30. Parent entity financial information (continued)
(c) Contingent liabilities of the parent entity (continued)
The Company does not consider that any of the current actions are likely to have a material adverse effect on the
business or financial position of the Company.
(d) Contractual commitments
As at 30 June 2016, the parent entity had contractual commitments for minimum lease payments in relation to non-
cancellable operating leases totalling to $4.67 million (2015: $0.56 million). There was a capital commitment towards
leasehold improvements as at 30 June 2016 of $0.58 million (2015: $Nil).
31. Contingent liabilities
As at the date of these financial statements there are current lawsuits filed against entities within the Group that relate
to alleged intellectual property infringement and/or breach of consumer laws.
It is not possible for the Group to provide any reliable assessment of the likely quantum of damages that may become
payable upon an adverse finding under any of the claims.
No trial dates have been set for any of the claims and therefore it is not practicable to state the timing of any payment
that may arise from an adverse finding.
The Group considers that it is only possible but not probable that any action will succeed and accordingly no provision
for any liability has been made in these financial statements.
The Group does not consider that any of the current actions are likely to have a material adverse effect on the business
or financial position of the Group.
32. Commitments for expenditure
(a) Capital commitments
The Group had a capital commitment towards leasehold improvements of $0.58 million as at 30 June 2016 (2015:
$Nil).
(b) Other commitments
The Group had no other material commitments as at 30 June 2016 (2015: $Nil).
Within one year
Later than one year but not later than five years
(c) Lease commitments
Total other commitments
Operating leases
2016
$'000
-
2015
$'000
42
Commitments for minimum lease payments in relation non-cancellable operating leases are payable as follows:
Lease commitments
Within one year
Later than one year but not later than five years
More than five years
Total lease commitments
2016
$'000
2015
$'000
1,229
1,089
6,182
2,394
184
468
7,595
3,951
The Group leases offices under non-cancellable operating leases for periods ranging within 2 to 6 years, with rent
payable monthly in advance. The leases have varying terms, escalation clauses and renewal rights. Rental provisions
within the lease agreement provide for increase in the minimum lease payments as contracted.
68
69
Annual Report 2016 33. Events occurring after the balance sheet date
The financial report was authorised for issue on 25 August 2016 by the board of Directors. There have been no
significant events after the balance sheet date that require disclosure.
34. Pre-IPO convertible notes
On 21 March 2016, the Group raised $12.25 million (face value) by issue of Pre-IPO Convertible Notes (Convertible
Notes) and incurred transactions costs of $0.61 million. These were converted into ordinary shares upon the IPO (note
27) at a price of $1.197 and 10,233,919 ordinary shares were issued.
35. Share-based payments
Options over ordinary shares
In September 2015, the Group introduced the “Redbubble Equity Incentive Plan”. Under this plan options over ordinary
shares may be granted to Redbubble Limited board members, employees (including senior executives) and contractors.
The options are subject to service conditions and have a predetermined time-based vesting schedule. The grantees of
options under this Plan may exercise vested options at any time before the earlier of:
(a) a specified expiry date (generally 10 years from the grant date); and
(b) 90 days after ceasing to be a Director, employee or contractor for Redbubble Limited.
Some of the options already granted have a zero exercise price, so as to be akin to performance rights (or restricted
stock units).
During FY 2015, options were granted under the “2014 Option Plan”. Options granted prior to that were governed by
individual agreements with the relevant participants, (i.e. not subject to centralised equity plan rules such as the 2014
Option Plan or Redbubble Equity Incentive Plan) and do not have performance targets.
Executive options for FY 2015
These were granted in FY 2015 as a short-term incentive (STI) to senior executives of the Group under the 2014
Option Plan. The number of options granted to participants was subject to: achievement of certain performance-
based conditions in relation to the Group's Sales and Gross Profit targets or organic visit growth targets; and personal
performance assessment. The options have a predetermined time-based vesting schedule and grantees may exercise
the options for a further set number of years after the options are vested.
Performance rights
Up to the end of FY 2015, performance rights were granted under the Restricted Share and Performance Rights Plan to
all employees including senior executives, consultants and board members. Two grants were made under this plan during
the current year. Once granted, the rights have a predetermined time-based vesting schedule. All the performance rights
are subject to service conditions, a liquidity event condition and share trading restrictions. The liquidity event condition will
be met during FY2017 on the date 6 months after the date of the IPO and hence, none of the performance rights vest until
then.
Executive STI for FY2016 - Options and Performance Rights
The Company has contracted with executives who can materially impact the financial and operational performance of the
Group to pay an STI benefit under the “Redbubble SLT Short Term Incentive (STI) Plan”. The STI benefits for the current
year are subject to: achievement of certain performance-based requirements in relation to the Group's Gross Transaction
Value (GTV) and Repeat GTV; and personal performance assessment in the current year.
70
Redbubble 35. Share-based payments (continued)
The value of the STI is part cash and part equity, with the split depending on the date the executive joined the Company.
The equity component will consist of options with a zero exercise price for executives employed by Redbubble Limited
and performance rights for executives employed by Redbubble Inc. The options for Redbubble Limited executives will be
granted under the Redbubble Equity Incentive Plan. The performance rights for Redbubble Inc. executives will be granted
under the “Restricted Share and Performance Rights Plan”. The target dollar value of the grants has been determined
during the current year but the grants will be made in FY 2017, calculated by dividing the dollar value by the volume
weighted average price over a representative 5 day period.
Warrants over ordinary shares (previously over preference shares)
Warrants over preference shares were issued in FY 2012 to Denali Capital Managers Pty Ltd, an entity related to Richard
Cawsey, the Chair of the Board, under terms of a loan facility agreement in addition to the interest thereon. The loan
facility terminated on 31 December 2012. The Warrants were converted to Warrants over ordinary shares when the
Company was converted from a private company to a public company on 9 January 2015.
70
71
Annual Report 2016 35. Share-based payments (continued)
(a) Movement
The table below summarises the movement in the number of options / performance rights / warrants during the year
(a) Movement during the year
2016
Number (*)
2016
WAEP ($) (*)
2015
Number (*)
2015
WAEP ($) (*)
Options over ordinary shares
Outstanding at 1 July
Granted during the year (1)
Exercised during the year
Forfeited during the year
Expired during the year
Outstanding at 30 June
Exercisable at 30 June
Performance rights
Outstanding at 1 July
Granted during the year
Exercised during the year
Forfeited during the year
Expired during the year
Outstanding at 30 June
Vested at 30 June (2)
Warrants over ordinary shares
Outstanding at 1 July
Outstanding at 30 June
Exercisable at 30 June
All plans
Outstanding at 1 July
Granted during the year
Exercised during the year
Forfeited during the year
Expired during the year
Outstanding at 30 June
Exercisable at 30 June
17,942,720
9,256,260
(3,710,273)
(3,665,826)
(1,126)
19,821,755
7,166,690
8,465,400
60,000
(565,740)
(2,134,456)
-
5,825,204
3,201,959
654,560
654,560
654,560
27,062,680
9,316,260
(4,276,013)
(5,800,282)
(1,126)
26,301,519
11,023,209
0.36
10,776,120
0.82
9,980,600
0.18 (2,814,000)
0.53
0.85
0.57
0.31
-
-
-
-
-
-
-
0.14
0.14
0.14
0.35
0.82
0.18
0.53
0.85
0.56
0.30
-
-
17,942,720
6,716,400
4,669,520
4,371,880
-
(576,000)
-
8,465,400
1,700,280
654,560
654,560
654,560
16,100,200
14,352,480
(2,814,000)
(576,000)
-
27,062,680
9,071,240
0.13
0.51
0.06
-
-
0.36
0.12
-
-
-
-
-
-
-
0.14
0.14
0.14
0.13
0.51
0.06
-
-
0.35
0.12
(*) WAEP stands for Weighted Average Exercise Price. All the numbers have been converted to equivalent post split numbers for better
understanding and comparison.
(1) 1,068,720 options have zero exercise price (2015: Nil). The expiry period for grants made during the current year and FY 2015 was 10 years. For
the grants made in prior years, the expiry period varied from 3-10 years.
(2) The vesting of performance rights is subject to a liquidity event condition and service conditions. The numbers disclosed represent time based
contingent rights (i.e. vesting contingent on the liquidity event condition being satisfied) except 24,560 rights for FY 2015 which were actually
vested. The liquidity event condition will be met in FY 2017 on the date six months after the date of the IPO. The performance rights would have
expired in 5-7 years of grant date if the IPO would not have occurred. In FY 2015, 294,960 rights were granted that were not subject to a liquidity
event condition.
(b) Modifications to the awards (1)
72
Waiver of liquidity event condition / accelerated vesting with respect to performance rights
Extension of expiry period by two years for options over ordinary shares
Cancellation pursuant to amendment of contract
Accelerated vesting of unvested options over ordinary shares upon termination
Total
2016
Number (*)
221,904
-
100,000
236,040
557,944
2015
Number (*)
352,400
2,396,160
-
-
2,748,560
(1) There was no incremental fair value granted as a result of the modifications.
(*) All the numbers have been converted to equivalent post split numbers for better understanding and comparison.
Redbubble
(a) Movement during the year
Options over ordinary shares
Outstanding at 1 July
Granted during the year (1)
Exercised during the year
Forfeited during the year
Expired during the year
Outstanding at 30 June
Exercisable at 30 June
Performance rights
Outstanding at 1 July
Granted during the year
Exercised during the year
Forfeited during the year
Expired during the year
Outstanding at 30 June
Vested at 30 June (2)
Warrants over ordinary shares
Outstanding at 1 July
Outstanding at 30 June
Exercisable at 30 June
All plans
Outstanding at 1 July
Granted during the year
Exercised during the year
Forfeited during the year
Expired during the year
Outstanding at 30 June
Exercisable at 30 June
2016
Number (*)
2016
WAEP ($) (*)
2015
Number (*)
2015
WAEP ($) (*)
(565,740)
(2,134,456)
(576,000)
17,942,720
9,256,260
(3,710,273)
(3,665,826)
(1,126)
19,821,755
7,166,690
8,465,400
60,000
-
5,825,204
3,201,959
654,560
654,560
654,560
27,062,680
9,316,260
(4,276,013)
(5,800,282)
(1,126)
26,301,519
11,023,209
10,776,120
9,980,600
0.18 (2,814,000)
0.36
0.82
0.53
0.85
0.57
0.31
-
-
-
-
-
-
-
0.14
0.14
0.14
0.35
0.82
0.18
0.53
0.85
0.56
0.30
17,942,720
6,716,400
4,669,520
4,371,880
8,465,400
1,700,280
654,560
654,560
654,560
-
-
-
-
-
16,100,200
14,352,480
(2,814,000)
(576,000)
27,062,680
9,071,240
0.13
0.51
0.06
0.36
0.12
0.14
0.14
0.14
0.13
0.51
0.06
0.35
0.12
-
-
-
-
-
-
-
-
-
-
-
(*) WAEP stands for Weighted Average Exercise Price. All the numbers have been converted to equivalent post split numbers for better
understanding and comparison.
(1) 1,068,720 options have zero exercise price (2015: Nil). The expiry period for grants made during the current year and FY 2015 was 10 years. For
the grants made in prior years, the expiry period varied from 3-10 years.
(2) The vesting of performance rights is subject to a liquidity event condition and service conditions. The numbers disclosed represent time based
35. Share-based payments (continued)
contingent rights (i.e. vesting contingent on the liquidity event condition being satisfied) except 24,560 rights for FY 2015 which were actually
vested. The liquidity event condition will be met in FY 2017 on the date six months after the date of the IPO. The performance rights would have
expired in 5-7 years of grant date if the IPO would not have occurred. In FY 2015, 294,960 rights were granted that were not subject to a liquidity
(b) Modifications to the awards (1)
event condition.
The table below details modifications to a number of options/performance rights during the year:
(b) Modifications to the awards (1)
Waiver of liquidity event condition / accelerated vesting with respect to performance rights
Extension of expiry period by two years for options over ordinary shares
Cancellation pursuant to amendment of contract
Accelerated vesting of unvested options over ordinary shares upon termination
Total
2016
Number (*)
221,904
-
100,000
236,040
557,944
2015
Number (*)
352,400
2,396,160
-
-
2,748,560
(1) There was no incremental fair value granted as a result of the modifications.
(*) All the numbers have been converted to equivalent post split numbers for better understanding and comparison.
(c) Additional disclosures
72
73
Annual Report 2016
36. Related party transactions
The Group's main related parties are as follows:
(a) Entities exercising significant influence over the Group
The CEO Martin Hosking and his family trust with Jellicom Pty Ltd as trustee, have significant influence over the Group.
During the current year, no transactions were made with Jellicom Pty Ltd (2015: $Nil).
(b) Compensation of the key management personnel of the Group
Short-term employee benefits
Post-employment benefits
Share-based employee benefits
Other long-term benefits (1)
Termination benefits
Total transactions with key management personnel
2016
$
2015
$
2,170,139 1,884,176
147,111 83,030
1,185,827
938,829
19,366
(16,342)
- 63,174
3,522,443 2,952,867
(1) The negative amount in the prior year relates to long service leave provision no longer required.
(c) Other related parties
Other related parties include immediate family members of key management personnel and entities that are controlled
or significantly influenced by those key management personnel, individually or collectively with their immediate family
members.
(d) Transactions with related parties
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated.
The following transactions occurred with related parties:
(i) Richard Cawsey, the Chair of the Board, is a partner of Denali Venture Partners. Denali Venture Partners has
provided various consulting services to the Group for which fees of $50,000 were paid (2015: $92,043). The
consulting fees are based on the time and service provided at rates equivalent to other providers of the same
services. As at 30 June 2016, there were no outstanding balances (2015: $Nil).
(ii) Stephanie Tilenius, a member of the Board, is the CEO of Vida Health. Vida Health entered into a sublease
agreement with the Group in April 2014 to sublease a portion of the Group's building located in San Francisco,
California. The sublease was terminated on 26 March 2015. In FY 2015, Vida Health paid the Group rental payments
of $25,457 and there were no outstanding balances.
36. Related party transactions (continued)
(iii) Chris Nunn, the Chief Financial Officer, is a Director of Elite Executive Services Pty Ltd, which has provided
executive relocation services to employees of Redbubble during the year for which the fees totalled $12,710 (2015:
$Nil). The fees are based on the time and service provided at rates equivalent to other providers of the same
services. As at 30 June 2016, the outstanding balance was $1,865 (2015: $Nil).
(iv) Rob Baumert, the Chief Fulfilment and Analytics Officer, exercised part of his options and sold the related shares
during the year ended 30 June 2016, resulting in a receivable balance of $79,000 (2015: $Nil) in relation to exercise
and withholding taxes on the sale. As at year end, the balance stands recovered (2015: $Nil).
74
Redbubble (v) The Group granted a loan to Faith Sedlin, the Chief Marketing Officer, in an earlier year. During the year, the related
party loan and interest thereon of $331,145 was recovered (2015: $52,847). As at 30 June 2016, there was no
outstanding balance (2015: $330,738).
37. Remuneration of auditors
Ernst & Young
Audit and review of financial reports
Taxation services
Initial public offering
Other services
Remuneration of Ernst & Young
38. Segment information
(a) Operating segment
2016
$
133,617
231,509
680,000
32,510
1,077,636
2015
$
96,350
67,739
-
34,819
198,908
The Group is a global online marketplace and accordingly, has identified that as its only operating segment.
(b) Geographical information
Australia
United States
United Kingdom
Rest of the world
Total
2016
2015
Non-current
Non-current
Revenue
$'000
7,525
72,008
16,734
18,311
assets (1)
$'000
7,290
1,318
53
-
114,578
8,661
Revenue
$'000
5,197
43,753
10,317
11,803
71,070
assets (1)
$'000
4,545
1,237
-
-
5,782
(1) Non-current assets for this purpose consist of property, plant and equipment and intangible assets.
74
75
Annual Report 2016
39. New and amended accounting standards and interpretations
(i) New and amended accounting standards and interpretations issued and effective
The Group has adopted the following new and amended standards which were applicable as disclosed in the table
below. Adoption of these new and amended standards and interpretations has not had a material impact on the Group.
Reference
AASB 2013-9
AASB 2015-3
Title
Amendments to Australian Accounting Standards – Conceptual Framework, Materiality and
Financial Instruments
The Standard contains three main parts and makes amendments to a number of Standards and
Interpretations.
Part A of AASB 2013-9 makes consequential amendments arising from the issuance of AASB CF
2013-1.
Part B makes amendments to particular Australian Accounting Standards to delete references to
AASB 1031 and also makes minor editorial amendments to various other standards.
Part C makes amendments to a number of Australian Accounting Standards, including
incorporating Chapter 6 Hedge Accounting into AASB 9 Financial Instruments.
Amendments to Australian Accounting Standards arising from the Withdrawal of AASB 1031
Materiality
The Standard completes the AASB’s project to remove Australian guidance on materiality from
Australian Accounting Standards.
Application date
1 July 2015
1 July 2015
(ii) New accounting standards and interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2016
reporting periods and have not been early adopted by the Group. Initial application of the following standards and
interpretations will not affect any of the amounts recognised in the financial report, but may change disclosures
presently made in relation to the Group.
The Group’s interpretations of the impact of these new standards is set out below:
Reference
Title
Summary
AASB 2014-3
AASB 2014-4
Amendments to Australian
Accounting Standards –
Accounting for Acquisitions of
Interests in Joint Operations
[AASB 1 & AASB 11]
Clarification of Acceptable
Methods of Depreciation and
Amortisation
(Amendments to AASB 116
and AASB 138)
AASB 2014-3 amends AASB 11 to provide guidance on the accounting for
acquisitions of interests in joint operations in which the activity constitutes a
business.
Group Assessment
This is only expected to impact the Group if acquisitions are made in the future.
This standard will not be early adopted by the Group.
AASB 116 and AASB 138 both establish the principle for the basis of depreciation
and amortisation as being the expected pattern of consumption of the future
economic benefits of an asset.
The IASB has clarified that the use of revenue-based methods to calculate the
depreciation of an asset is not appropriate because revenue generated by an activity
that includes the use of an asset generally reflects factors other than the
consumption of the economic benefits embodied in the asset.
The amendment also clarified that revenue is generally presumed to be an
inappropriate basis for measuring the consumption of the economic benefits
embodied in an intangible asset. This presumption, however, can be rebutted in
certain limited circumstances.
Group Assessment
This is not expected to impact the financial statements as the Group policy is to
amortise based on consumption of economic benefits (useful lives of assets and
intangibles).
Application date of
standard
1 January 2016
Application date
for Group
1 July 2016
1 January 2016
1 July 2016
AASB 2015-1
Amendments to Australian
Accounting Standards –
Annual Improvements to
Australian Accounting
Standards 2012–2014 Cycle
This standard will not be early adopted by the Group.
The subjects of the principal amendments to the Standards are set out below:
1 January 2016
1 July 2016
AASB 134 Interim Financial Reporting:
76
• Disclosure of information ‘elsewhere in the interim financial report’ - amends
AASB 134 to clarify the meaning of disclosure of information ‘elsewhere in the
interim financial report’ and to require the inclusion of a cross-reference from the
interim financial statements to the location of this information.
Group Assessment
Minimal impact to the Group's financial report.
AASB 2015-2
Amendments to Australian
The Standard makes amendments to AASB 101 Presentation of Financial Statements
1 January 2016
1 July 2016
Accounting Standards –
arising from the IASB’s Disclosure Initiative project. The amendments are designed to
Disclosure Initiative:
further encourage companies to apply professional judgment in determining what
Amendments to AASB 101
information to disclose in the financial statements.
For example, the amendments make clear that materiality applies to the whole of
financial statements and that the inclusion of immaterial information can inhibit the
usefulness of financial disclosures. The amendments also clarify that companies
should use professional judgment in determining where and in what order
information is presented in the financial disclosures.
Group Assessment
The Group will continue to draft financial statements in the most effective manner in
order to meet the requirements of this standard.
AASB 2015-9
Amendments to Australian
This standard inserts scope paragraphs into AASB 8 and AASB 133 in place of
1 January 2016
1 July 2016
Accounting Standards - Scope
application paragraph text in AASB 1057. This is to correct inadvertant removal of
and Application Paragraphs
these paragraphs during editorial changes made in August 2015. There is no change
[AASB 8, AASB 133 & AASB
to the requirements or the applicability of AASB 8 and AASB 133.
1057]
Group Assessment
Minimal impact to the Group's financial report.
AASB 1057
Application of Australian
This Standard lists the application paragraphs for each other Standard (and
1 January 2016
1 July 2016
Accounting Standards
Interpretation), grouped where they are the same. Accordingly, paragraphs 5 and 22
respectively specify the application paragraphs for Standards and Interpretations in
general. Differing application paragraphs are set out for individual Standards and
Interpretations or grouped where possible.
The application paragraphs do not affect requirements in other Standards that specify
that certain paragraphs apply only to certain types of entities.
Group Assessment
The Group will continue to apply standards that are applicable.
2016-1
Amendments to Australian
This Standard amends AASB 112 Income Taxes (July 2004) and AASB 112 Income
1 January 2017
1 July 2017
Accounting Standards
Taxes (August 2015) to clarify the requirements on recognition of deferred tax assets
–Recognition of Deferred Tax
for unrealised losses on debt instruments measured at fair value.
Assets for Unrealised Losses
[AASB 112]
2016-2
Amendments to Australian
This Standard amends AASB 107 Statement of Cash Flows (August 2015) to require
1 January 2017
1 July 2017
Group Assessment
This is only expected to impact the Group if there are deferred tax assets for
unrealised losses on debt instruments measured at fair value in the future.
This standard will not be early adopted by the Group.
Accounting Standards
–Disclosure Initiative:
entities preparing financial statements in accordance with Tier 1 reporting
requirements to provide disclosures that enable users of financial statements to
Amendments to AASB 107
evaluate changes in liabilities arising from financing activities, including both
changes arising from cash flows and non-cash changes.
Group Assessment
Minimal impact to the Group's disclosures in the financial report.
AASB 9
Financial Instruments
AASB 9 (December 2014) is a new Principal standard which replaces AASB 139. This
1 January 2018
1 July 2018
AASB 15
Revenue from Contracts with
In May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers,
1 January 2018
1 July 2018
Customers
which replaces IAS 11 Construction Contracts, IAS 18 Revenueand related
new Principal version supersedes AASB 9 issued in December 2009 (as amended)
and AASB 9 (issued in December 2010) and includes a model for classification and
measurement, a single, forward-looking ‘expected loss’ impairment model and a
substantially-reformed approach to hedge accounting.
AASB 9 is effective for annual periods beginning on or after 1 July 2018. However,
the Standard is available for early application. The own credit changes can be early
applied in isolation without otherwise changing the accounting for financial
instruments.
Group Assessment
future.
This is only expected to have an impact on the Group if hedging is undertaken in the
This standard will not be early adopted by the Group.
Interpretations (IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the
Construction of Real Estate,IFRIC 18 Transfers of Assets from Customers and SIC-31
Revenue—Barter Transactions Involving Advertising Services).
The core principle of IFRS 15 is that an entity recognises revenue to depict the
transfer of promised goods or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those goods
An entity recognises revenue in accordance with that core principle by applying the
or services.
following steps:
(a) Step 1: Identify the contract(s) with a customer
(b) Step 2: Identify the performance obligations in the contract
(c) Step 3: Determine the transaction price
(d) Step 4: Allocate the transaction price to the performance obligations in the
(e) Step 5: Recognise revenue when (or as) the entity satisfies a performance
contract
obligation
Early application of this standard is permitted.
The International Accounting Standards Board (IASB) in its July 2015 meeting
decided to confirm its proposal to defer the effective date of IFRS 15 (the
international equivalent of AASB 15) from 1 January 2017 to 1 January 2018. The
amendment to give effect to the new effective date for IFRS 15 is expected to be
issued in September 2015 . At this time, it is expected that the AASB will make a
corresponding amendment to AASB 15, which will mean that the application date of
this standard for the Group will move from 1 July 2017 to 1 July 2018.
The Group has not yet made an assessment of whether this standard will be early
Group Assessment
adopted.
(whether it is housed in a subsidiary or not)
(b) A partial gain or loss to be recognised when a transaction involves assets that do
not constitute a business, even if these assets are housed in a subsidiary.
AASB 2014-10 also makes an editorial correction to AASB 10.
AASB 2015-10 defers the mandatory effective date (application date) of AASB 2014-
10 so that the amendments are required to be applied for annual reporting periods
beginning on or after 1 January 2018 instead of 1 January 2016.
This is only expected to impact the Group should such activites be undertaken in the
Group Assessment
future.
This standard will not be early adopted by the Group.
Lessee accounting
• Lessees are required to recognise assets and liabilities for all leases with a term of
more than 12 months, unless the underlying asset is of low value.
• A lessee measures right-of-use assets similarly to other non-financial assets and
lease liabilities similarly to other financial liabilities.
• Assets and liabilities arising from a lease are initially measured on a present value
basis. The measurement includes non-cancellable lease payments (including
inflation-linked payments), and also includes payments to be made in optional
periods if the lessee is reasonably certain to exercise an option to extend the lease, or
not to exercise an option to terminate the lease.
• AASB 16 contains disclosure requirements for lessees.
Lessor accounting
• AASB 16 substantially carries forward the lessor accounting requirements in AASB
117. Accordingly, a lessor continues to classify its leases as operating leases or
finance leases, and to account for those two types of leases differently.
• AASB 16 also requires enhanced disclosures to be provided by lessors that will
improve information disclosed about a lessor’s risk exposure, particularly to residual
value risk.
AASB 16 supersedes:
(a) AASB 117 Leases
(b) Interpretation 4 Determining whether an Arrangement contains a Lease
(c) SIC-15 Operating Leases—Incentives
(d) SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a
Lease
The new standard will be effective for annual periods beginning on or after 1 January
2019. Early application is permitted, provided the new revenue standard, AASB 15
Revenue from Contracts with Customers, has been applied, or is applied at the same
date as AASB 16.
Group Assessment
adopted.
The Group has not yet made an assessment of whether this standard will be early
AASB 2014-10 Amendments to Australian
AASB 2014-10 amends AASB 10 Consolidated Financial Statements and AASB 128 to
1 January 2018
1 July 2018
Accounting Standards – Sale
address an inconsistency between the requirements in AASB 10 and those in AASB
or Contribution of Assets
128 (August 2011), in dealing with the sale or contribution of assets between an
between an Investor and its
investor and its associate or joint venture. The amendments require:
Associate or Joint Venture
(a) A full gain or loss to be recognised when a transaction involves a business
AASB 16
Leases
The key features of AASB 16 are as follows:
1 January 2019
1 July 2019
Redbubble 76
Reference
Title
Summary
Application date of
Application date
standard
for Group
AASB 2014-3
Amendments to Australian
AASB 2014-3 amends AASB 11 to provide guidance on the accounting for
1 January 2016
1 July 2016
Accounting Standards –
acquisitions of interests in joint operations in which the activity constitutes a
Accounting for Acquisitions of
business.
Interests in Joint Operations
Group Assessment
[AASB 1 & AASB 11]
This is only expected to impact the Group if acquisitions are made in the future.
This standard will not be early adopted by the Group.
AASB 2014-4
Clarification of Acceptable
AASB 116 and AASB 138 both establish the principle for the basis of depreciation
1 January 2016
1 July 2016
Methods of Depreciation and
and amortisation as being the expected pattern of consumption of the future
Amortisation
(Amendments to AASB 116
and AASB 138)
economic benefits of an asset.
The IASB has clarified that the use of revenue-based methods to calculate the
depreciation of an asset is not appropriate because revenue generated by an activity
that includes the use of an asset generally reflects factors other than the
consumption of the economic benefits embodied in the asset.
The amendment also clarified that revenue is generally presumed to be an
inappropriate basis for measuring the consumption of the economic benefits
embodied in an intangible asset. This presumption, however, can be rebutted in
certain limited circumstances.
Group Assessment
This is not expected to impact the financial statements as the Group policy is to
amortise based on consumption of economic benefits (useful lives of assets and
39. New and amended accounting standards and interpretations (continued)
intangibles).
AASB 2015-1
Amendments to Australian
Accounting Standards –
Annual Improvements to
Australian Accounting
Standards 2012–2014 Cycle
AASB 2015-2
Amendments to Australian
Accounting Standards –
Disclosure Initiative:
Amendments to AASB 101
AASB 2015-9
Amendments to Australian
Accounting Standards - Scope
and Application Paragraphs
[AASB 8, AASB 133 & AASB
1057]
AASB 1057
Application of Australian
Accounting Standards
2016-1
Amendments to Australian
Accounting Standards
–Recognition of Deferred Tax
Assets for Unrealised Losses
[AASB 112]
2016-2
Amendments to Australian
Accounting Standards
–Disclosure Initiative:
Amendments to AASB 107
AASB 9
Financial Instruments
This standard will not be early adopted by the Group.
The subjects of the principal amendments to the Standards are set out below:
1 January 2016
1 July 2016
AASB 134 Interim Financial Reporting:
• Disclosure of information ‘elsewhere in the interim financial report’ - amends
AASB 134 to clarify the meaning of disclosure of information ‘elsewhere in the
interim financial report’ and to require the inclusion of a cross-reference from the
interim financial statements to the location of this information.
Group Assessment
Minimal impact to the Group's financial report.
The Standard makes amendments to AASB 101 Presentation of Financial Statements
arising from the IASB’s Disclosure Initiative project. The amendments are designed to
further encourage companies to apply professional judgment in determining what
information to disclose in the financial statements.
For example, the amendments make clear that materiality applies to the whole of
financial statements and that the inclusion of immaterial information can inhibit the
usefulness of financial disclosures. The amendments also clarify that companies
should use professional judgment in determining where and in what order
information is presented in the financial disclosures.
Group Assessment
The Group will continue to draft financial statements in the most effective manner in
order to meet the requirements of this standard.
This standard inserts scope paragraphs into AASB 8 and AASB 133 in place of
application paragraph text in AASB 1057. This is to correct inadvertant removal of
these paragraphs during editorial changes made in August 2015. There is no change
to the requirements or the applicability of AASB 8 and AASB 133.
Group Assessment
Minimal impact to the Group's financial report.
This Standard lists the application paragraphs for each other Standard (and
Interpretation), grouped where they are the same. Accordingly, paragraphs 5 and 22
respectively specify the application paragraphs for Standards and Interpretations in
general. Differing application paragraphs are set out for individual Standards and
Interpretations or grouped where possible.
The application paragraphs do not affect requirements in other Standards that specify
that certain paragraphs apply only to certain types of entities.
Group Assessment
The Group will continue to apply standards that are applicable.
This Standard amends AASB 112 Income Taxes (July 2004) and AASB 112 Income
Taxes (August 2015) to clarify the requirements on recognition of deferred tax assets
for unrealised losses on debt instruments measured at fair value.
Group Assessment
This is only expected to impact the Group if there are deferred tax assets for
unrealised losses on debt instruments measured at fair value in the future.
This standard will not be early adopted by the Group.
This Standard amends AASB 107 Statement of Cash Flows (August 2015) to require
entities preparing financial statements in accordance with Tier 1 reporting
requirements to provide disclosures that enable users of financial statements to
evaluate changes in liabilities arising from financing activities, including both
changes arising from cash flows and non-cash changes.
Group Assessment
Minimal impact to the Group's disclosures in the financial report.
AASB 9 (December 2014) is a new Principal standard which replaces AASB 139. This
new Principal version supersedes AASB 9 issued in December 2009 (as amended)
and AASB 9 (issued in December 2010) and includes a model for classification and
measurement, a single, forward-looking ‘expected loss’ impairment model and a
substantially-reformed approach to hedge accounting.
AASB 9 is effective for annual periods beginning on or after 1 July 2018. However,
the Standard is available for early application. The own credit changes can be early
applied in isolation without otherwise changing the accounting for financial
instruments.
Group Assessment
77
This is only expected to have an impact on the Group if hedging is undertaken in the
future.
This standard will not be early adopted by the Group.
1 January 2016
1 July 2016
1 January 2016
1 July 2016
1 January 2016
1 July 2016
1 January 2017
1 July 2017
1 January 2017
1 July 2017
1 January 2018
1 July 2018
AASB 15
Revenue from Contracts with
Customers
In May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers,
which replaces IAS 11 Construction Contracts, IAS 18 Revenueand related
1 January 2018
1 July 2018
AASB 2014-10 Amendments to Australian
AASB 2014-10 amends AASB 10 Consolidated Financial Statements and AASB 128 to
1 January 2018
1 July 2018
Accounting Standards – Sale
address an inconsistency between the requirements in AASB 10 and those in AASB
or Contribution of Assets
128 (August 2011), in dealing with the sale or contribution of assets between an
between an Investor and its
investor and its associate or joint venture. The amendments require:
Associate or Joint Venture
(a) A full gain or loss to be recognised when a transaction involves a business
AASB 16
Leases
The key features of AASB 16 are as follows:
1 January 2019
1 July 2019
Interpretations (IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the
Construction of Real Estate,IFRIC 18 Transfers of Assets from Customers and SIC-31
Revenue—Barter Transactions Involving Advertising Services).
The core principle of IFRS 15 is that an entity recognises revenue to depict the
transfer of promised goods or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those goods
An entity recognises revenue in accordance with that core principle by applying the
or services.
following steps:
(a) Step 1: Identify the contract(s) with a customer
(b) Step 2: Identify the performance obligations in the contract
(c) Step 3: Determine the transaction price
(d) Step 4: Allocate the transaction price to the performance obligations in the
(e) Step 5: Recognise revenue when (or as) the entity satisfies a performance
contract
obligation
Early application of this standard is permitted.
The International Accounting Standards Board (IASB) in its July 2015 meeting
decided to confirm its proposal to defer the effective date of IFRS 15 (the
international equivalent of AASB 15) from 1 January 2017 to 1 January 2018. The
amendment to give effect to the new effective date for IFRS 15 is expected to be
issued in September 2015 . At this time, it is expected that the AASB will make a
corresponding amendment to AASB 15, which will mean that the application date of
this standard for the Group will move from 1 July 2017 to 1 July 2018.
The Group has not yet made an assessment of whether this standard will be early
Group Assessment
adopted.
(whether it is housed in a subsidiary or not)
(b) A partial gain or loss to be recognised when a transaction involves assets that do
not constitute a business, even if these assets are housed in a subsidiary.
AASB 2014-10 also makes an editorial correction to AASB 10.
AASB 2015-10 defers the mandatory effective date (application date) of AASB 2014-
10 so that the amendments are required to be applied for annual reporting periods
beginning on or after 1 January 2018 instead of 1 January 2016.
This is only expected to impact the Group should such activites be undertaken in the
Group Assessment
future.
This standard will not be early adopted by the Group.
Lessee accounting
• Lessees are required to recognise assets and liabilities for all leases with a term of
more than 12 months, unless the underlying asset is of low value.
• A lessee measures right-of-use assets similarly to other non-financial assets and
lease liabilities similarly to other financial liabilities.
• Assets and liabilities arising from a lease are initially measured on a present value
basis. The measurement includes non-cancellable lease payments (including
inflation-linked payments), and also includes payments to be made in optional
periods if the lessee is reasonably certain to exercise an option to extend the lease, or
not to exercise an option to terminate the lease.
• AASB 16 contains disclosure requirements for lessees.
Lessor accounting
• AASB 16 substantially carries forward the lessor accounting requirements in AASB
117. Accordingly, a lessor continues to classify its leases as operating leases or
finance leases, and to account for those two types of leases differently.
• AASB 16 also requires enhanced disclosures to be provided by lessors that will
improve information disclosed about a lessor’s risk exposure, particularly to residual
value risk.
AASB 16 supersedes:
(a) AASB 117 Leases
(b) Interpretation 4 Determining whether an Arrangement contains a Lease
(c) SIC-15 Operating Leases—Incentives
(d) SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a
Lease
The new standard will be effective for annual periods beginning on or after 1 January
2019. Early application is permitted, provided the new revenue standard, AASB 15
Revenue from Contracts with Customers, has been applied, or is applied at the same
date as AASB 16.
Group Assessment
adopted.
The Group has not yet made an assessment of whether this standard will be early
Annual Report 2016 Reference
Title
Summary
Application date of
Application date
standard
for Group
AASB 2014-3
Amendments to Australian
AASB 2014-3 amends AASB 11 to provide guidance on the accounting for
1 January 2016
1 July 2016
Accounting Standards –
acquisitions of interests in joint operations in which the activity constitutes a
AASB 2014-4
Clarification of Acceptable
AASB 116 and AASB 138 both establish the principle for the basis of depreciation
1 January 2016
1 July 2016
Accounting for Acquisitions of
business.
Interests in Joint Operations
Group Assessment
[AASB 1 & AASB 11]
This is only expected to impact the Group if acquisitions are made in the future.
This standard will not be early adopted by the Group.
Methods of Depreciation and
and amortisation as being the expected pattern of consumption of the future
Amortisation
economic benefits of an asset.
(Amendments to AASB 116
The IASB has clarified that the use of revenue-based methods to calculate the
and AASB 138)
depreciation of an asset is not appropriate because revenue generated by an activity
AASB 2015-1
Amendments to Australian
The subjects of the principal amendments to the Standards are set out below:
1 January 2016
1 July 2016
AASB 2015-2
Amendments to Australian
The Standard makes amendments to AASB 101 Presentation of Financial Statements
1 January 2016
1 July 2016
that includes the use of an asset generally reflects factors other than the
consumption of the economic benefits embodied in the asset.
The amendment also clarified that revenue is generally presumed to be an
inappropriate basis for measuring the consumption of the economic benefits
embodied in an intangible asset. This presumption, however, can be rebutted in
certain limited circumstances.
Group Assessment
This is not expected to impact the financial statements as the Group policy is to
amortise based on consumption of economic benefits (useful lives of assets and
intangibles).
This standard will not be early adopted by the Group.
Accounting Standards –
Annual Improvements to
AASB 134 Interim Financial Reporting:
Australian Accounting
• Disclosure of information ‘elsewhere in the interim financial report’ - amends
Standards 2012–2014 Cycle
AASB 134 to clarify the meaning of disclosure of information ‘elsewhere in the
interim financial report’ and to require the inclusion of a cross-reference from the
interim financial statements to the location of this information.
Group Assessment
Minimal impact to the Group's financial report.
Accounting Standards –
arising from the IASB’s Disclosure Initiative project. The amendments are designed to
Disclosure Initiative:
further encourage companies to apply professional judgment in determining what
Amendments to AASB 101
information to disclose in the financial statements.
For example, the amendments make clear that materiality applies to the whole of
financial statements and that the inclusion of immaterial information can inhibit the
usefulness of financial disclosures. The amendments also clarify that companies
should use professional judgment in determining where and in what order
information is presented in the financial disclosures.
Group Assessment
The Group will continue to draft financial statements in the most effective manner in
order to meet the requirements of this standard.
AASB 2015-9
Amendments to Australian
This standard inserts scope paragraphs into AASB 8 and AASB 133 in place of
1 January 2016
1 July 2016
Accounting Standards - Scope
application paragraph text in AASB 1057. This is to correct inadvertant removal of
and Application Paragraphs
these paragraphs during editorial changes made in August 2015. There is no change
[AASB 8, AASB 133 & AASB
to the requirements or the applicability of AASB 8 and AASB 133.
1057]
Group Assessment
Minimal impact to the Group's financial report.
AASB 1057
Application of Australian
This Standard lists the application paragraphs for each other Standard (and
1 January 2016
1 July 2016
Accounting Standards
Interpretation), grouped where they are the same. Accordingly, paragraphs 5 and 22
respectively specify the application paragraphs for Standards and Interpretations in
general. Differing application paragraphs are set out for individual Standards and
Interpretations or grouped where possible.
The application paragraphs do not affect requirements in other Standards that specify
that certain paragraphs apply only to certain types of entities.
Group Assessment
The Group will continue to apply standards that are applicable.
2016-1
Amendments to Australian
This Standard amends AASB 112 Income Taxes (July 2004) and AASB 112 Income
1 January 2017
1 July 2017
Accounting Standards
Taxes (August 2015) to clarify the requirements on recognition of deferred tax assets
–Recognition of Deferred Tax
Assets for Unrealised Losses
[AASB 112]
for unrealised losses on debt instruments measured at fair value.
Group Assessment
This is only expected to impact the Group if there are deferred tax assets for
unrealised losses on debt instruments measured at fair value in the future.
2016-2
This standard will not be early adopted by the Group.
This Standard amends AASB 107 Statement of Cash Flows (August 2015) to require
entities preparing financial statements in accordance with Tier 1 reporting
requirements to provide disclosures that enable users of financial statements to
evaluate changes in liabilities arising from financing activities, including both
changes arising from cash flows and non-cash changes.
39. New and amended accounting standards and interpretations (continued)
Amendments to Australian
Accounting Standards
–Disclosure Initiative:
Amendments to AASB 107
1 January 2017
1 July 2017
AASB 9
Financial Instruments
AASB 15
Revenue from Contracts with
Customers
AASB 2014-10 Amendments to Australian
Accounting Standards – Sale
or Contribution of Assets
between an Investor and its
Associate or Joint Venture
1 January 2018
1 July 2018
1 January 2018
1 July 2018
1 January 2018
1 July 2018
Group Assessment
Minimal impact to the Group's disclosures in the financial report.
AASB 9 (December 2014) is a new Principal standard which replaces AASB 139. This
new Principal version supersedes AASB 9 issued in December 2009 (as amended)
and AASB 9 (issued in December 2010) and includes a model for classification and
measurement, a single, forward-looking ‘expected loss’ impairment model and a
substantially-reformed approach to hedge accounting.
AASB 9 is effective for annual periods beginning on or after 1 July 2018. However,
the Standard is available for early application. The own credit changes can be early
applied in isolation without otherwise changing the accounting for financial
instruments.
Group Assessment
This is only expected to have an impact on the Group if hedging is undertaken in the
future.
This standard will not be early adopted by the Group.
In May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers,
which replaces IAS 11 Construction Contracts, IAS 18 Revenueand related
Interpretations (IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the
Construction of Real Estate,IFRIC 18 Transfers of Assets from Customers and SIC-31
Revenue—Barter Transactions Involving Advertising Services).
The core principle of IFRS 15 is that an entity recognises revenue to depict the
transfer of promised goods or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those goods
or services.
An entity recognises revenue in accordance with that core principle by applying the
following steps:
(a) Step 1: Identify the contract(s) with a customer
(b) Step 2: Identify the performance obligations in the contract
(c) Step 3: Determine the transaction price
(d) Step 4: Allocate the transaction price to the performance obligations in the
contract
(e) Step 5: Recognise revenue when (or as) the entity satisfies a performance
obligation
Early application of this standard is permitted.
The International Accounting Standards Board (IASB) in its July 2015 meeting
decided to confirm its proposal to defer the effective date of IFRS 15 (the
international equivalent of AASB 15) from 1 January 2017 to 1 January 2018. The
amendment to give effect to the new effective date for IFRS 15 is expected to be
issued in September 2015 . At this time, it is expected that the AASB will make a
corresponding amendment to AASB 15, which will mean that the application date of
this standard for the Group will move from 1 July 2017 to 1 July 2018.
Group Assessment
The Group has not yet made an assessment of whether this standard will be early
adopted.
AASB 2014-10 amends AASB 10 Consolidated Financial Statements and AASB 128 to
address an inconsistency between the requirements in AASB 10 and those in AASB
128 (August 2011), in dealing with the sale or contribution of assets between an
investor and its associate or joint venture. The amendments require:
(a) A full gain or loss to be recognised when a transaction involves a business
(whether it is housed in a subsidiary or not)
(b) A partial gain or loss to be recognised when a transaction involves assets that do
not constitute a business, even if these assets are housed in a subsidiary.
AASB 2014-10 also makes an editorial correction to AASB 10.
AASB 2015-10 defers the mandatory effective date (application date) of AASB 2014-
10 so that the amendments are required to be applied for annual reporting periods
beginning on or after 1 January 2018 instead of 1 January 2016.
Group Assessment
This is only expected to impact the Group should such activites be undertaken in the
future.
AASB 16
Leases
This standard will not be early adopted by the Group.
The key features of AASB 16 are as follows:
1 January 2019
1 July 2019
Lessee accounting
• Lessees are required to recognise assets and liabilities for all leases with a term of
more than 12 months, unless the underlying asset is of low value.
• A lessee measures right-of-use assets similarly to other non-financial assets and
78
lease liabilities similarly to other financial liabilities.
• Assets and liabilities arising from a lease are initially measured on a present value
basis. The measurement includes non-cancellable lease payments (including
inflation-linked payments), and also includes payments to be made in optional
periods if the lessee is reasonably certain to exercise an option to extend the lease, or
not to exercise an option to terminate the lease.
• AASB 16 contains disclosure requirements for lessees.
Lessor accounting
• AASB 16 substantially carries forward the lessor accounting requirements in AASB
117. Accordingly, a lessor continues to classify its leases as operating leases or
finance leases, and to account for those two types of leases differently.
• AASB 16 also requires enhanced disclosures to be provided by lessors that will
improve information disclosed about a lessor’s risk exposure, particularly to residual
value risk.
AASB 16 supersedes:
(a) AASB 117 Leases
(b) Interpretation 4 Determining whether an Arrangement contains a Lease
(c) SIC-15 Operating Leases—Incentives
(d) SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a
Lease
The new standard will be effective for annual periods beginning on or after 1 January
2019. Early application is permitted, provided the new revenue standard, AASB 15
Revenue from Contracts with Customers, has been applied, or is applied at the same
date as AASB 16.
Group Assessment
adopted.
The Group has not yet made an assessment of whether this standard will be early
Redbubble Reference
Title
Summary
Application date of
Application date
standard
for Group
AASB 2014-3
Amendments to Australian
AASB 2014-3 amends AASB 11 to provide guidance on the accounting for
1 January 2016
1 July 2016
Accounting Standards –
acquisitions of interests in joint operations in which the activity constitutes a
AASB 2014-4
Clarification of Acceptable
AASB 116 and AASB 138 both establish the principle for the basis of depreciation
1 January 2016
1 July 2016
Accounting for Acquisitions of
business.
Interests in Joint Operations
Group Assessment
[AASB 1 & AASB 11]
This is only expected to impact the Group if acquisitions are made in the future.
This standard will not be early adopted by the Group.
Methods of Depreciation and
and amortisation as being the expected pattern of consumption of the future
Amortisation
economic benefits of an asset.
(Amendments to AASB 116
The IASB has clarified that the use of revenue-based methods to calculate the
and AASB 138)
depreciation of an asset is not appropriate because revenue generated by an activity
AASB 2015-1
Amendments to Australian
The subjects of the principal amendments to the Standards are set out below:
1 January 2016
1 July 2016
AASB 2015-2
Amendments to Australian
The Standard makes amendments to AASB 101 Presentation of Financial Statements
1 January 2016
1 July 2016
that includes the use of an asset generally reflects factors other than the
consumption of the economic benefits embodied in the asset.
The amendment also clarified that revenue is generally presumed to be an
inappropriate basis for measuring the consumption of the economic benefits
embodied in an intangible asset. This presumption, however, can be rebutted in
certain limited circumstances.
Group Assessment
This is not expected to impact the financial statements as the Group policy is to
amortise based on consumption of economic benefits (useful lives of assets and
intangibles).
This standard will not be early adopted by the Group.
Accounting Standards –
Annual Improvements to
AASB 134 Interim Financial Reporting:
Australian Accounting
• Disclosure of information ‘elsewhere in the interim financial report’ - amends
Standards 2012–2014 Cycle
AASB 134 to clarify the meaning of disclosure of information ‘elsewhere in the
interim financial report’ and to require the inclusion of a cross-reference from the
interim financial statements to the location of this information.
Group Assessment
Minimal impact to the Group's financial report.
Accounting Standards –
arising from the IASB’s Disclosure Initiative project. The amendments are designed to
Disclosure Initiative:
further encourage companies to apply professional judgment in determining what
Amendments to AASB 101
information to disclose in the financial statements.
For example, the amendments make clear that materiality applies to the whole of
financial statements and that the inclusion of immaterial information can inhibit the
usefulness of financial disclosures. The amendments also clarify that companies
should use professional judgment in determining where and in what order
information is presented in the financial disclosures.
Group Assessment
The Group will continue to draft financial statements in the most effective manner in
order to meet the requirements of this standard.
AASB 2015-9
Amendments to Australian
This standard inserts scope paragraphs into AASB 8 and AASB 133 in place of
1 January 2016
1 July 2016
Accounting Standards - Scope
application paragraph text in AASB 1057. This is to correct inadvertant removal of
and Application Paragraphs
these paragraphs during editorial changes made in August 2015. There is no change
[AASB 8, AASB 133 & AASB
to the requirements or the applicability of AASB 8 and AASB 133.
1057]
Group Assessment
Minimal impact to the Group's financial report.
AASB 1057
Application of Australian
This Standard lists the application paragraphs for each other Standard (and
1 January 2016
1 July 2016
Accounting Standards
Interpretation), grouped where they are the same. Accordingly, paragraphs 5 and 22
respectively specify the application paragraphs for Standards and Interpretations in
general. Differing application paragraphs are set out for individual Standards and
Interpretations or grouped where possible.
The application paragraphs do not affect requirements in other Standards that specify
that certain paragraphs apply only to certain types of entities.
Group Assessment
The Group will continue to apply standards that are applicable.
2016-1
Amendments to Australian
This Standard amends AASB 112 Income Taxes (July 2004) and AASB 112 Income
1 January 2017
1 July 2017
Accounting Standards
Taxes (August 2015) to clarify the requirements on recognition of deferred tax assets
–Recognition of Deferred Tax
for unrealised losses on debt instruments measured at fair value.
Assets for Unrealised Losses
[AASB 112]
2016-2
Amendments to Australian
This Standard amends AASB 107 Statement of Cash Flows (August 2015) to require
1 January 2017
1 July 2017
Group Assessment
This is only expected to impact the Group if there are deferred tax assets for
unrealised losses on debt instruments measured at fair value in the future.
This standard will not be early adopted by the Group.
Accounting Standards
–Disclosure Initiative:
entities preparing financial statements in accordance with Tier 1 reporting
requirements to provide disclosures that enable users of financial statements to
Amendments to AASB 107
evaluate changes in liabilities arising from financing activities, including both
changes arising from cash flows and non-cash changes.
Group Assessment
Minimal impact to the Group's disclosures in the financial report.
AASB 9
Financial Instruments
AASB 9 (December 2014) is a new Principal standard which replaces AASB 139. This
1 January 2018
1 July 2018
AASB 15
Revenue from Contracts with
In May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers,
1 January 2018
1 July 2018
Customers
which replaces IAS 11 Construction Contracts, IAS 18 Revenueand related
new Principal version supersedes AASB 9 issued in December 2009 (as amended)
and AASB 9 (issued in December 2010) and includes a model for classification and
measurement, a single, forward-looking ‘expected loss’ impairment model and a
substantially-reformed approach to hedge accounting.
AASB 9 is effective for annual periods beginning on or after 1 July 2018. However,
the Standard is available for early application. The own credit changes can be early
applied in isolation without otherwise changing the accounting for financial
instruments.
Group Assessment
future.
This is only expected to have an impact on the Group if hedging is undertaken in the
This standard will not be early adopted by the Group.
Interpretations (IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the
Construction of Real Estate,IFRIC 18 Transfers of Assets from Customers and SIC-31
Revenue—Barter Transactions Involving Advertising Services).
The core principle of IFRS 15 is that an entity recognises revenue to depict the
transfer of promised goods or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those goods
An entity recognises revenue in accordance with that core principle by applying the
or services.
following steps:
(a) Step 1: Identify the contract(s) with a customer
(b) Step 2: Identify the performance obligations in the contract
(c) Step 3: Determine the transaction price
(d) Step 4: Allocate the transaction price to the performance obligations in the
(e) Step 5: Recognise revenue when (or as) the entity satisfies a performance
contract
obligation
Early application of this standard is permitted.
The International Accounting Standards Board (IASB) in its July 2015 meeting
decided to confirm its proposal to defer the effective date of IFRS 15 (the
international equivalent of AASB 15) from 1 January 2017 to 1 January 2018. The
amendment to give effect to the new effective date for IFRS 15 is expected to be
issued in September 2015 . At this time, it is expected that the AASB will make a
corresponding amendment to AASB 15, which will mean that the application date of
this standard for the Group will move from 1 July 2017 to 1 July 2018.
The Group has not yet made an assessment of whether this standard will be early
Group Assessment
adopted.
128 (August 2011), in dealing with the sale or contribution of assets between an
investor and its associate or joint venture. The amendments require:
(a) A full gain or loss to be recognised when a transaction involves a business
(whether it is housed in a subsidiary or not)
(b) A partial gain or loss to be recognised when a transaction involves assets that do
not constitute a business, even if these assets are housed in a subsidiary.
AASB 2014-10 also makes an editorial correction to AASB 10.
AASB 2015-10 defers the mandatory effective date (application date) of AASB 2014-
10 so that the amendments are required to be applied for annual reporting periods
beginning on or after 1 January 2018 instead of 1 January 2016.
or Contribution of Assets
between an Investor and its
Associate or Joint Venture
AASB 2014-10 Amendments to Australian
AASB 2014-10 amends AASB 10 Consolidated Financial Statements and AASB 128 to
1 January 2018
1 July 2018
Accounting Standards – Sale
address an inconsistency between the requirements in AASB 10 and those in AASB
39. New and amended accounting standards and interpretations (continued)
Group Assessment
This is only expected to impact the Group should such activites be undertaken in the
future.
AASB 16
Leases
This standard will not be early adopted by the Group.
The key features of AASB 16 are as follows:
1 January 2019
1 July 2019
Lessee accounting
• Lessees are required to recognise assets and liabilities for all leases with a term of
more than 12 months, unless the underlying asset is of low value.
• A lessee measures right-of-use assets similarly to other non-financial assets and
lease liabilities similarly to other financial liabilities.
• Assets and liabilities arising from a lease are initially measured on a present value
basis. The measurement includes non-cancellable lease payments (including
inflation-linked payments), and also includes payments to be made in optional
periods if the lessee is reasonably certain to exercise an option to extend the lease, or
not to exercise an option to terminate the lease.
• AASB 16 contains disclosure requirements for lessees.
Lessor accounting
• AASB 16 substantially carries forward the lessor accounting requirements in AASB
117. Accordingly, a lessor continues to classify its leases as operating leases or
finance leases, and to account for those two types of leases differently.
• AASB 16 also requires enhanced disclosures to be provided by lessors that will
improve information disclosed about a lessor’s risk exposure, particularly to residual
value risk.
AASB 16 supersedes:
(a) AASB 117 Leases
(b) Interpretation 4 Determining whether an Arrangement contains a Lease
(c) SIC-15 Operating Leases—Incentives
(d) SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a
Lease
The new standard will be effective for annual periods beginning on or after 1 January
2019. Early application is permitted, provided the new revenue standard, AASB 15
Revenue from Contracts with Customers, has been applied, or is applied at the same
date as AASB 16.
Group Assessment
The Group has not yet made an assessment of whether this standard will be early
adopted.
78
79
Annual Report 2016 Directors’ Declaration
In accordance with a resolution of the Directors of Redbubble Limited, we state that in the Directors’ opinion:
(a) the financial statements and notes set out on pages 40 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 consolidated entity’s financial position as at 30 June 2016 and of its
performance for the financial year ended on that date; and
(b) there are reasonable grounds to believe that Redbubble Limited will be able to pay its debts as and when they
become due and payable.
Note 2(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 Managing Director & Chief Executive Officer and Chief Financial
Officer required by Section 295A of the Corporations Act 2001.
Richard Cawsey
Chairman
Melbourne
25 August 2016
Martin Hosking
Chief Executive Officer
Melbourne
25 August 2016
80
Redbubble
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
Independent auditor’s report to the members of Redbubble Limited
Report on the financial report
We have audited the accompanying financial report of Redbubble Limited, which comprises the
consolidated statement of financial position as at 30 June 2016, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement
of cash flows for the year then ended, notes comprising a summary of significant accounting policies and
other explanatory information, and the directors' declaration of the consolidated entity comprising the
company and the entities it controlled at the year's end or from time to time during the financial year.
Directors' responsibility 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 controls as the directors determine are necessary to enable the preparation of the financial
report that is free from material misstatement, whether due to fraud or error. In Note 2(a)(i), the directors
also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that
the financial statements comply with International Financial Reporting Standards.
Auditor's responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor's judgment, including the assessment
of the risks of material misstatement of the financial report, whether due to fraud or error. In making
those risk assessments, the auditor considers internal controls relevant to the entity's preparation and
fair presentation of the financial report in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's
internal controls. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Independence
In conducting our audit we have complied with the independence requirements of the Corporations Act
2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a
copy of which is included in the directors’ report.
Opinion
In our opinion:
a.
the financial report of Redbubble Limited is in accordance with the Corporations Act 2001,
including:
80
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
81
Annual Report 2016
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
Independent auditor’s report to the members of Redbubble Limited
giving a true and fair view of the consolidated entity's financial position as at 30 June 2016
and of its performance for the year ended on that date; and
i
Report on the financial report
complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
ii
b.
the financial report also complies with International Financial Reporting Standards as disclosed
in Note 2(a)(i).
We have audited the accompanying financial report of Redbubble Limited, which comprises the
consolidated statement of financial position as at 30 June 2016, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement
of cash flows for the year then ended, notes comprising a summary of significant accounting policies and
Report on the remuneration report
other explanatory information, and the directors' declaration of the consolidated entity comprising the
company and the entities it controlled at the year's end or from time to time during the financial year.
We have audited the Remuneration Report included in the directors' report for the year ended 30 June
Directors' responsibility for the financial report
2016. 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
The directors of the company are responsible for the preparation of the financial report that gives a true
Australian Auditing Standards.
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal controls as the directors determine are necessary to enable the preparation of the financial
Opinion
report that is free from material misstatement, whether due to fraud or error. In Note 2(a)(i), the directors
also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that
In our opinion, the Remuneration Report of Redbubble Limited for the year ended 30 June 2016,
the financial statements comply with International Financial Reporting Standards.
complies with section 300A of the Corporations Act 2001.
Auditor's responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
Ernst & Young
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor's judgment, including the assessment
of the risks of material misstatement of the financial report, whether due to fraud or error. In making
those risk assessments, the auditor considers internal controls relevant to the entity's preparation and
fair presentation of the financial report in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's
internal controls. An audit also includes evaluating the appropriateness of accounting policies used and
Kylie Bodenham
the reasonableness of accounting estimates made by the directors, as well as evaluating the overall
Partner
presentation of the financial report.
Melbourne
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
25 August 2016
our audit opinion.
Independence
In conducting our audit we have complied with the independence requirements of the Corporations Act
2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a
copy of which is included in the directors’ report.
Opinion
In our opinion:
a.
the financial report of Redbubble Limited is in accordance with the Corporations Act 2001,
including:
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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c:\users\kaminje\documents\my ea folder 2015\kylie bodenham\redbubble\fy16 rbl - audit report.docx
2
Shareholder and other ASX
Required Information
The shareholder information set out below was applicable as at 12 September 2016.
A. Distribution of shareholders
Analysis of numbers of ordinary shareholders by size of holding:
Range
Total holders
Shares
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Grand Totals
96
256
176
274
74
876
189,650,603
7,072,084
1,432,116
920,933
45,101
199,120,837
% of Issued
Capital
95.24
3.55
0.72
0.46
0.02
100
There were 25 holders of less than a marketable parcel of ordinary shares.
B. Top 20 Holders of Fully Paid Ordinary Shares
The names of the twenty largest registered holders of quoted fully paid ordinary shares are listed below:
Name
Jellicom Pty Ltd
CAV IH No5 Ltd
J P Morgan Nominees Australia Ltd
Blackbird FOF Pty Ltd
Cawsey Superannuation Fund Pty Ltd
National Nominees Ltd
Simon Yencken
Piton Capital Venture Fund II LP
HSBC Custody Nominees (Australia) Ltd
HSBC Custody Nominees (Australia) Ltd - a/c 2
Australian Direct Investments Pty Ltd
G A Bundy & N T Bundy
Radiata Investments Pty Ltd
Lonsdale Nominees Pty Ltd
Jabbour Holdings Pty Ltd
Citicorp Nominees Pty Ltd
Paul Vanzella
Gatum Pty Ltd
Denali Venture Partners Fund 1 LP
Martin Hosking
Top 20 holders of Ordinary Fully Paid Shares (TOTAL)
Total Remaining Holders Balance
Grand Totals
Number of
ordinary shares
% of Issued
Capital
47,909,520
16,719,480
14,519,453
11,361,819
9,726,480
8,062,760
5,890,160
5,537,291
5,411,299
4,833,497
3,259,160
3,200,000
2,966,200
2,408,640
2,068,450
1,919,674
1,905,984
1,881,520
1,840,240
1,641,880
153,063,507
46,057,330
199,120,837
24.06
8.40
7.29
5.71
4.88
4.05
2.96
2.78
2.72
2.43
1.64
1.61
1.49
1.21
1.04
0.96
0.96
0.94
0.92
0.82
76.87
23.13
100.00
82
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Annual Report 2016 Shareholder and other ASX
Required Information (continued)
C. Unquoted equity securities
The numbers of unquoted equity securities in the Company are set out below:
Type of equity security
Share Options
Performance Rights
Total number of ordinary shares subject of options and performance rights
Number held
19,734,766
5,780,244
25,515,010
D. Substantial Holders
Substantial holders in the Company* are set out below:
Name
Martin Hosking (directly and through controlled entity)
Simon Baker (through controlled entity)
MXB Holdings LP
Richard Cawsey
Blackbird FOF Pty Ltd
Acorn Capital Ltd
*As disclosed in substantial shareholder notices received by the Company
E. Securities subject to escrow arrangements
Number held
% of Issued
Capital
49,620,449
16,719,480
13,541,880
12,278,640
11,361,819
10,483,680
24.92
8.40
6.80
6.17
5.71
5.26
As at 12 September 2016, these were 68,758,535 Ordinary Shares subject to voluntary escrow on issue. The escrow
period for these shares ends two business days after release of Company’s FY2017 full year results.
F. Voting Rights
The voting rights attaching to each class of equity securities are set out below:
• Ordinary Shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll
each share shall have one vote.
• Options and Performance Rights
No voting rights
G. Other ASX Required Inforantion
The Company has used the cash and assets in a form readily convertible to cash, that it had at the time of admission to
the ASX, in a way consistant with its business objectives. This statement is made pursuant to ASX Listing Rule 4.10.19.
84
Redbubble Corporate Information
Directors
Richard Cawsey (Chair)
Martin Hosking (Chief Executive Officer and Managing Director)
Stephanie Tilenius
Teresa Engelhard
Greg Lockwood
Grant Murdoch (appointed 1 January 2016)
Chris Nunn (resigned as Director on 28 October 2015 - and commenced
as CFO on 1 November 2015)
Company Secretaries
Corina Davis
Paul Gordon
Registered Office
Level 3, 271 Collins Street
Share Register
Auditors
Melbourne VIC 3000
Australia
Link Market Services
Tower 4, 727 Collins St
Melbourne VIC 3008
Australia
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000
Australia
Bankers
Commonwealth Bank of Australia
Stock Exchange Listing
Redbubble Ltd shares are listed on the
Australian Securities Exchange (listing code: RBL)
Website
redbubble.com
Investor Centre
shareholders.redbubble.com
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Annual Report 2016
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Redbubble 86
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Annual Report 2016 88
Redbubble