ACN 168 751 746
Annual Report
30 June 2016
CORPORATE DIRECTORY
DIRECTORS
Ruwan Weerasooriya – Managing Director
Jack Matthews – Non-executive Chairman
Brandon Munro – Non-executive Director
COMPANY SECRETARY
Ian Hobson
REGISTERED OFFICE
Suite 5, 95 Hay Street
Subiaco WA 6008
Telephone: +61 8 9388 8290
Facsimile: +61 8 9388 8256
Email:
Website: www.rewardleholdings.com
corporate@rewardle.com
PRINCIPAL PLACE OF BUSINESS
Level 4, 10-16 Queen Street
Melbourne VIC 3000
SHARE REGISTRY
Automic Registry Services
Suite 1A, Level 1, 7 Ventnor Avenue
West Perth WA 6005
Telephone: +61 8 9324 2099
Facsimile: +61 8 9321 2337
AUDITORS
Moore Stephens Audit (Vic)
Level 18, 530 Collins Street,
Melbourne VIC 3000
SOLICTORS
Nova Legal
Ground Floor, 10 Ord Street,
West Perth WA 6005
BANK
Westpac Banking Corporation Limited
AUSTRALIAN SECURITIES EXCHANGE
ASX Code RXH
2
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
LETTER FROM THE BOARD OF DIRECTORS TO SHAREHOLDERS
Dear Shareholders,
Over the past year, Rewardle has continued to develop its transaction based social network, connecting
consumers with their favourite places. Put simply, Rewardle has digitised the traditional “buy 9, get 1 free” paper
punch card to provide extended utility by adding prepayment , mobile ordering, mobile payments and social
media integrations while also offering merchants sophisticated data marketing capabilities.
Rewardle’s clients are your typical neighbourhood businesses - cafés, yoga studios, butchers, hairdressers etc.
These time poor merchants, with limited operational and marketing support, don’t have access to the digital tools
of large retail chains but desperately need them to connect with customers in an increasingly digital and
connected world.
During the 2016 financial year, the Rewardle team, led by founder and Managing Director Ruwan Weerasooriya,
has grown the national network from approximately 4,000 Merchants and over 1,000,000 Members to over 5,400
merchants and over 1,900,000 members.
During the year the company continued to develop brand partnerships with companies/brands such as KitKat,
Cellarmasters, Brisbane Lions, Mövenpick, Commonwealth Bank of Australia and Vodafone.
During the second half of the year, the Company commenced a systematic program to convert trial merchants
into monthly subscription customers with more than 1,000 Merchants signing up to become paying Merchants by
30 June 2016.
Rewardle is committed to its mission to provide local SME Merchants with the digital engagement tools and
business intelligence typically only available to large retail chains by unlocking the power of mobile computing,
cloud based software and Big Data analysis.
In the 2017 financial year, the Company will continue to focus on merchant subscription conversions and on
other ways to effectively monetise its substantial merchant network.
On behalf of the Board of Rewardle, I would like to thank you for your support of the Company, and I look forward
to an exciting and successful 2017 financial year for Rewardle.
Yours sincerely
Jack Matthews
Chairman
3
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
REVIEW OF OPERATIONS
Rewardle Holdings Limited (“Rewardle” or “the Company”) is an Australian based company.
CORPORATE
During the year and to the date of this report:
i.
The Company, on 3 July 2015, issued to staff the following options to subscribe for ordinary fully paid
shares:
a. 60,000 unlisted performance options exercisable at 20 cents each expiring 7 February 2018;
b. 836,500 unlisted performance options exercisable at 25 cents each expiring 7 February 2018;
c. 550,000 unlisted performance options exercisable at 30 cents each expiring 7 February 2018; and
d. 1,000,000 unlisted options exercisable at 30 cents each expiring 31 March 2018.
ii.
iii.
iv.
v.
On 10 August 2015, the Company issued 87,500 fully paid ordinary shares following the exercise of 87,500
unlisted performance options exercisable at 20 cents each on or before 7 February 2018.
On 11 September 2015, the Company issued 150,000 fully paid ordinary shares following the exercise of
150,000 unlisted options exercisable at 20 cents each on or before 30 June 2017.
On 17 August 2016, the Company issued 43,750,000 shares at $0.05 each for $2,187,500.
On 2 September 2016, the Company issued 13,296,934 shares at $0.05 each for $664,847.
COMPANY OVERVIEW
The Rewardle Platform is a marketing and transactional platform that combines membership, points, rewards,
mobile ordering, payments and social media integration into a single cloud based platform powered by Big Data
analysis.
Rewardle is positioned to be a leading player as the worlds of social media, marketing, mobile and payments
converge to transform how we connect, share and transact.
The Company is led by an experienced entrepreneurial team with a successful background in Internet and media
businesses.
During the year the Company has continued to build on the Network effects inherent within the Rewardle Platform.
In January 2016, the Company commenced converting free trial Merchants to paying with excellent early results.
This has assisted the Company in increasing its revenue and decreasing its loss, summarised as follows:
Revenue
Loss before taxation and extraordinary items
Extraordinary items
30 June 2016
$
30 June 2015
$
2,280,035
4,516,653
0
1,238,654
6,280,903
0
Loss after taxation and extraordinary items
4,516,653
6,280,903
4
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
REVIEW OF OPERATIONS
OPPORTUNITY SUMMARY
Early mover advantage established through development of proprietary technology platform and building
substantial network scale
Critical mass established through the recruitment of over 5400 local businesses and approximately 2m
Members
Network effect powering ongoing organic growth and serving as barrier to entry for potential competitors
19% of free trialist Merchants that were part of building critical mass have been converted to paying
Merchants over recent months
Use of free trials as standard Merchant onboarding offer ceased as of 1 July 2016, new Merchants pay
immediately to join the Rewardle Network
Consistent traction in development of brand advertising and recurring, monthly Merchant Services (SaaS)
fees
Multiple opportunities being developed by management to leverage the growing network and platform
data into additional revenue streams
Scalable technology platform business model with largely fixed costs is designed to deliver highly profitable
marginal revenue over time
Rewardle offers investors exposure to the high growth digital marketing and mobile payments sectors.
The Company is uniquely positioned to capture the digital migration of marketing budgets and customer
relationships of up to 200,000 local businesses in Australia
Rewardle offers a digital marketing and payments solution to local independent businesses that is underpinned by a
proprietary membership, points, rewards and payments platform.
The Company has captured a substantial early mover advantage through platform development and recruitment of
over 5400 local businesses and nearly 2m Members since founding in 2012.
Initial monetisation is being demonstrated through consistent brand advertising and growing, recurring, Merchant
Services (SaaS) fees.
As a highly scalable technology business with largely fixed costs there is substantial potential in development of new
revenue streams that leverage the Company’s consistently growing network and platform data.
While continuing to build existing revenue streams, management is working on the development of new revenue
opportunities through a variety of approaches including building, partnering and acquisition.
5
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746 REVIEW OF OPERATIONS
STRATEGY
Step 1.
Build
the Network
EXECUTION
Step 2.
Educate
and Engage
Step 3.
Mone(cid:5)se
the Network
NOW
Step 4.
Addi(cid:5)onal
services
Use free trials to
build Merchant and
Member Network
Merchant and
Member Network
offered as
audience to brands
Brand partnerships
build on value
proposi(cid:5)on to convert
trialists to paying
subscribers
Leverage Pla(cid:127)orm,
brand ac(cid:5)vity and
Network scale to recruit
new Merchants without
free trial offer
Na(cid:5)onal Network of
over 5,400 Merchants and
approaching 2m Members
Consistent trac(cid:5)on with
brand partners genera(cid:5)ng
short term revenue and
suppor(cid:5)ng Merchant and
Member engagement
1,000+ trialists or 10% of
Merchant Network converted
to paying uder ongoing
conversion program
Use of free trial as standard
on boarding offer ceased 1
July 2016 and new Merchants
now pay immediately to join
the Network
NOW
NETWORK EFFECTS CONTINUING TO DRIVE NETWORK GROWTH AND ENGAGEMENT
Merchants growing
Members growing faster (m)
Check-ins growing fastest (m)
4,721
5,022
5,145
5,420
4,077
1.90
1.73
1.54
1.33
1.08
31.7
27.2
23.0
18.8
14.5
Jun 15
Sep 15
Dec 15 Mar 16
Jun 16
Jun 15
Sep 15
Dec 15 Mar 16
Jun 16
Jun 15
Sep 15
Dec 15 Mar 16
Jun 16
6
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746 BUSINESS SUMMARY
CONSISTENT TRACTION WITH ADVERTISING PARTNERS IS BEING ENHANCED AS NETWORK AND
ENGAGEMENT GROWS
Uber
AirAsia
KitKat
Brisbane
Lions
Emporium
Hotel
Mövenpick
Vodafone
2012
July 2015
July 2016
Ben and Jerrys
Openair cinema
Quickflix
Cellarmasters
Li(cid:3)le Shop
of Horrors
Fiddler on
the Roof
Commonwealth
Bank
DEMONSTRATING CONSISTENT TRACTION IN CONVERTING TRIALIST MERCHANTS TO PAYING
RECURRING MONTHLY FEES
Converted
to paying
1,030
Strong to moderate engagement
likely to pay
+2,600
Low engagement
unlikely to pay at present
+1,790
5,420
Management summary of Merchant Network engagement and propensity to pay*
Ongoing educa(cid:31)on, engagement and conversion program
While unlikely to pay at present, low engagement status can be upgraded through education and support which
Rewardle is conducting. In the meantime, these Merchants continue to acquire Members and provide valuable
Network density while paying Merchant coverage develops.
CEASED FREE TRIALS AS OF JULY 1 2016, CONTINUING TO GROW THE NETWORK WITH MERCHANTS
PAYING IMMEDIATELY
Free trials to build
ini(cid:17)al cri(cid:17)cal scale
Massive scope to scale with less than 3% of the addressable market currently using Rewardle
Free trials ceased as of 1 July, new Merchants pay immediately to join Merchant Network and use Rewardle
Set up fee
Basic monthly
fee
Performance
fees
Addi(cid:17)onal
services
NEXT
Addressable
market of up to
200,000
SMEs in sectors where
loyalty programs
commonly offered
7
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746 BUSINESS SUMMARY
SET TO LEVERAGE EARLY MOVER ADVANTAGE TO GROW NETWORK AND REVENUE
Early move advantage captured
through investment in pla(cid:11)orm
and network development
Macro technology trends
support business model
Network effect supports
growth and act as barrier
for compe(cid:3)tors
Demonstra(cid:3)ng ini(cid:3)al
commercial trac(cid:3)on
with substan(cid:3)al upside
Highly scalable business model
Highly scaleable pla(cid:11)orm,
and massive addressable market
fast growing network
Largely fixed cost base
business model with scope
to increase scale by up to 35x
Set to yield highly
profitable marginal revenue
NOW
Con(cid:3)nue growing ini(cid:3)al revenue
steams
Brand Adver(cid:3)sing
Conversion of trialist
Merchants to paying
Acquisi(cid:3)on of new Merchants
to pay recurring monthly
recurring monthly fees
fees immediately
Develop addi(cid:3)onal revenue
NEXT
streams that leverage network,
Build
Partner
Buy
pla(cid:11)orm data, and opera(cid:3)ons
8
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746 DIRECTORS’ REPORT
Your directors present their report on the Company and its controlled entities for the year ended 30 June 2016.
DIRECTORS
The names of the Directors of the Company in office during the financial year and up to the date of this report are as
follows:
Ruwan Weerasooriya – Managing Director
Jack Matthews – Non-executive Chairman
Brandon Munro – Non-executive Director
Directors have been in office since the start of the financial year until the date of this report unless otherwise stated.
The following persons held the position of Company Secretary during the financial year:
Ian Hobson
The particulars of the qualifications, experience and special responsibilities of each Director are as follows:
Ruwan Weerasooriya – Managing Director
Ruwan Weerasooriya is the founder and Managing Director of Rewardle. Over 20 years he has consistently stayed at
the forefront of the disruption caused by the advent and proliferation of the internet. He has established, built and
operated a range of technology and media related businesses with multiple successful outcomes including trade sales
to ASX listed industry leaders. In 2013 he was named in the Top 50 Australian Startup Influencers by
Startupdaily.com.au. He established Rewardle in 2012 to provide Local SME Merchants with the digital customer
engagement tools and business intelligence typically only available to large retail chains by unlocking the power of
mobile computing, cloud based software and big data analysis.
At the date of this report, Mr Weerasooriya has interests in the following shares and options of the Company:
§
§
§
107,500,000 ordinary shares
9,375,000 unlisted options exercisable at $0.20 each and expiring 30 June 2017
10,000,000 performance options exercisable at $0.20 each and expiring 7 February 2018
During the past three years Mr Weerasooriya has held no other listed company directorships.
Jack Matthews – Non-Executive Chairman
Jack Matthews holds a B.A. in Philosophy from The College of William & Mary (Williamsburg, VA) and is a member of
the Australian Institute of Company Directors and the New Zealand Institute of Directors.
Jack Matthews brings extensive knowledge of the evolving digital media landscape, strong commercial networks and
experience in executing and successfully integrating digital business acquisitions. He has held a number of senior
leadership positions within the digital media and subscription television industries in Australia and New Zealand. Jack
played an integral role in the success of Fairfax’s digital strategy, first as CEO of Fairfax Digital and most recently as
CEO of Fairfax Metropolitan Media.
At the date of this report, Mr Matthews has interests in the following shares and options of the Company:
§
§
266,667 ordinary shares
1,150,000 unlisted options exercisable at $0.20 each and expiring 30 June 2017
During the past three years Mr Matthews has held the following listed company directorships:
Trilogy International Limited (New Zealand) – 15 August - present
§
§ APN Outdoor Group Limited – 17 October 2014 - present
9
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
DIRECTORS’ REPORT
Brandon Munro – Non-Executive Director
Brandon Munro holds a Bachelor of Economics and Bachelor of Laws from University of Western Australia, and
Graduate Diploma in Applied Finance and Investment from Securities Institute of Australia. He is a Fellow of the
Financial Services Institute of Australia (Finsia) and is a Graduate Member of the Australian Institute of Company
Directors.
Brandon brings regulatory, governance, mergers and acquisitions and capital markets knowledge to the team.
At the date of this report, Mr Munro has interests in the following shares and options of the Company:
§
§
3,175,000 ordinary shares
1,300,000 unlisted options exercisable at $0.20 each and expiring 30 June 2017
During the past three years Mr Munro has held the following other listed company directorships:
§ Department 13 International Limited – 4 April 2014 – 18 December 2015
§ Novatti Group Limited – 12 October 2015 – present
§ Bannerman Resources Limited – 9 March 2016 - present
Ian Hobson – Company Secretary
Ian Hobson is a Fellow Chartered Accountant and Chartered Secretary who provides company secretarial and financial
controller services to ASX listed companies. Ian has had 30 years’ experience in the profession. Ian is experienced in
due diligence, transaction support, capital raising and corporate governance.
CORPORATE INFORMATION
Corporate Structure
Rewardle Holdings Limited is a limited liability company that is incorporated and domiciled in Australia. Rewardle
Holdings Limited (Group) has prepared a consolidated financial report incorporating the entities that it controlled
during the financial year as follows:
Rewardle Holdings Ltd
Rewardle Pty Ltd
- parent entity
- 100% owned controlled entity
Nature of Operations and Principal Activities
The principal continuing activities during the year of entities within the consolidated entity was Digital Customer
Engagement platform for local SME merchants.
OPERATING AND FINANCIAL REVIEW
Review of Operations
A review of operations for the financial year and the results of those operations are contained within the Company
review.
Operating Results
Consolidated loss after income tax for the financial year was $4,516,653 (2015: $6,280,903 loss).
Financial Position
At 30 June 2016, the Group had net assets of $467,287 (2015: $4,639,649) with cash reserves of $906,533 (2015:
$4,859,008).
10
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
DIRECTORS’ REPORT
Financing and Investing Activities
The company issued the following securities during the year:
§
§
§
§
§
§
60,000 unlisted $0.20 performance options expiring on 7 February 2018;
836,500 unlisted $0.25 performance options expiring on 7 February 2018;
550,000 unlisted $0.30 performance options expiring on 7 February 2018;
1,000,000 unlisted $0.30 options expiring on 31 March 2018;
87,500 ordinary fully paid shares on the exercise of $0.20 options expiring 7 February 2018; and
150,000 ordinary fully paid shares on the exercise of $0.20 options expiring 30 June 2017.
Dividends
No dividends were paid during the year (2015: nil) and no recommendation is made as to the payment of dividends.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs of the Group during the financial year are detailed in the company review.
In the opinion of the directors, there were no other significant changes in the state of affairs of the Company that
occurred during the financial year under review not otherwise disclosed in this report or in the financial report.
EVENTS SINCE THE END OF THE FINANCIAL YEAR
No matters or circumstances have arisen, since the end of the financial year, which significantly affected, or may
significantly affect, the operations of the group, the results of those operations, or the state of affairs of the Group in
subsequent financial years, other than as follows or outlined in the company review which is contained in this Annual
Report:
On 9 August 2016, the Company announced an accelerated one for two pro rata non-renounceable entitlement offer
of up to 65,694,508 fully paid ordinary shares at $0.05 each to raise $3,284,725 (before costs). The Entitlement Offer
comprised an accelerated institutional component and a retail component.
The Institutional Entitlement Offer was completed on 11 August 2016, with 43,750,000 shares issued on 17 August
2016 at $0.05 each, raising $2,187,500 (before costs). The Company’s Managing Director and founder, Mr Ruwan
Weerasooriya, subscribed for 20,000,000 shares of his entitlement under the Institutional Entitlement Offer. Arising
from the partial underwriting of the shortfall shares under the Institutional Entitlement Offer, 2,000,000 shares were
subscribed for by the underwriter (Sequoi Nominees Pty Ltd), a company in which Mr Brandon Munro, a Director of
the Company, is a director and shareholder.
The Retail Entitlement Offer was completed on 31 August 2016. On 2 September 2016, 9,315,818 shares were issued
under the Retail Entitlement Offer acceptances and 3,981,116 shares under the shortfall applications, at $0.05 each,
raising a total of $664,847. Mr Brandon Munro subscribed for his entitlement of 391,667 shares under the Retail
Entitlement Offer.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Group will continue to pursue its principal activity of rolling out its Digital Customer Engagement platform for local
SME merchants.
11
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
DIRECTORS’ REPORT
MEETINGS OF DIRECTORS
The numbers of meetings of directors held during the year and the numbers of meetings attended by each director
were as follows:
Board of Directors
Number eligible to attend
6
6
6
Number attended
6
6
6
R Weerasooriya
J Matthews
B Munro
REMUNERATION REPORT (AUDITED)
This report details the nature and amount of remuneration for each director and key management personnel of
Rewardle Holdings Limited. The information provided in the remuneration report includes remuneration disclosures
that are audited as required by section 308(3C) of the Corporations Act 2001.
For the purposes of this report Key Management Personnel of the Group are defined as those persons having authority
and responsibility for planning, directing and controlling the major activities of the group, directly or indirectly,
including any director (whether executive or otherwise) of the parent company.
The following persons were directors of Rewardle Holdings Limited during the financial year:
Ruwan Weerasooriya
Jack Matthews
Brandon Munro
Managing Director
Non-executive Chairman
Non-executive Director
There were no other persons that fulfilled the role of a key management person during the year, other than those
disclosed as Directors.
The remuneration report is set out under the following main headings:
Employment contracts of directors and senior executives
• Remuneration policy
• Remuneration structure
•
• Details of remuneration for year
•
•
• Voting and comments made at the Company’s last Annual General Meeting
•
• Additional disclosures relating to key management personnel
• Other transactions with key management personnel
Compensation options to key management personnel
Shares issued to key management personnel on exercise of compensation options
Loans with key management personnel
RENUMERATION GOVERNANCE
Remuneration Committee
The full Board carries out the roles and responsibilities of the Remuneration Committee and is responsible for
determining and reviewing the compensation arrangements for the Directors themselves, the Managing Director and
any Executives.
Executive remuneration is reviewed annually having regard to individual and business performance, relevant
comparative remuneration and internal and independent external advice.
12
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
DIRECTORS’ REPORT
A.
Remuneration policy
The board policy is to remunerate directors at market rates for time, commitment and responsibilities. The board
determines payments to the directors and reviews their remuneration annually, based on market practice, duties and
accountability. Independent external advice is sought when required. The maximum aggregate amount of directors’
fees that can be paid is subject to approval by shareholders in a general meeting, from time to time. However, to align
directors’ interests with shareholders’ interests, the directors are encouraged to hold shares and options in the
company.
The Group’s aim is to remunerate at a level that reflects the size and nature of the Group. Group officers and directors
are remunerated to a level consistent with the size of the Group.
The directors receive a superannuation guarantee contribution required by the government, which is currently 9.5%,
and do not receive any other retirement benefits. Some individuals, however, may choose to sacrifice part of their
salary to increase payments towards superannuation.
All remuneration paid to directors and executives is valued at the cost to the company and expensed.
The Board believes that it has implemented suitable practices and procedures that are appropriate for an organisation
of this size and maturity.
The Group did not pay any performance-based component of remuneration during the year other than incentive and
performance options granted to directors as disclosed in Note D below.
B.
Remuneration structure
In accordance with best practice corporate governance, the structure of non-executive directors and executive
compensation is separate and distinct.
Use of Remuneration Consultants
The Board does not seek the advice of Remuneration Consultants in fulfilling its roles and responsibilities associated
with the Remuneration Committee and determining compensation for Directors, the Managing Director and any Key
Management Personnel.
Non-executive Director Compensation
Objective
The Board seeks to set aggregate compensation at a level that provides the company with the ability to attract and
retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
Structure
The Constitution and the ASX Listing Rules specify that the aggregate compensation of non-executive directors shall
be determined from time to time by a general meeting. An amount not exceeding the amount determined is then
divided between the directors as agreed. The latest determination approved by shareholders was an aggregate
compensation of $500,000 per year.
The amount of aggregate compensation sought to be approved by shareholders and the manner in which it is
apportioned amongst directors is reviewed annually. The Board may consider advice from external consultants as well
as the fees paid to non-executive directors of comparable companies when undertaking the annual review process.
Non-Executive Directors’ remuneration may include an incentive portion consisting of options, as considered
appropriate by the Board, which may be subject to Shareholder approval in accordance with ASX listing rules.
13
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
DIRECTORS’ REPORT
Executive Compensation
Objective
The entity aims to reward executives with a level and mix of compensation commensurate with their position and
responsibilities within the entity so as to:
§ reward executives for company and individual performance against targets set by appropriate benchmarks;
§ align the interests of executives with those of shareholders;
§ link rewards with the strategic goals and performance of the company; and
§ ensure total compensation is competitive by market standards.
Structure
In determining the level and make-up of executive remuneration, the Board negotiates a remuneration to reflect the
market salary for a position and individual of comparable responsibility and experience. Due to the limited size of the
Company and of its operations and financial affairs, the use of a separate remuneration committee is not considered
appropriate. Remuneration is regularly compared with the external market by participation in industry salary surveys
and during recruitment activities generally. If required, the Board may engage an external consultant to provide
independent advice in the form of a written report detailing market levels of remuneration for comparable executive
roles.
Compensation may consist of the following key elements:
§
Fixed Compensation;
§ Variable Compensation;
§
§
Short Term Incentive (STI); and
Long Term Incentive (LTI).
Remuneration consists of a fixed remuneration and a long term incentive portion as considered appropriate.
Fixed Remuneration
The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to the
position and is competitive in the market. Fixed remuneration is reviewed annually by the Board having regard to the
Company and individual performance, relevant comparable remuneration in the mining exploration sector and
external advice.
The fixed remuneration is a base salary or monthly consulting fee.
Variable Pay — Long Term Incentives
The objective of long term incentives is to reward directors/executives in a manner which aligns this element of
remuneration with the creation of shareholder wealth. The incentive portion is payable based upon attainment of
objectives related to the director’s/executive’s job responsibilities. The objectives vary, but all are targeted to relate
directly to the Company’s business and financial performance and thus to shareholder value.
Long term incentives (LTIs) granted to directors/ executives are delivered in the form of options.
LTI grants to Executives are delivered in the form of employee share options. These options are issued at an exercise
price determined by the Board at the time of issue. The employee share options on issue during the year vest over a
selected period not based on service conditions.
The objective of the granting of options is to reward Executives in a manner which aligns the element of remuneration
with the creation of shareholder wealth. As such LTIs are made to Executives who are able to influence the generation
of shareholder wealth and thus have an impact on the Company’s performance.
The level of LTI granted is, in turn, dependent on the Company’s recent share price performance, the seniority of the
Executive, and the responsibilities the Executive assumes in the Company.
Typically, the grant of LTIs occurs at the commencement of employment or in the event that the individual receives a
promotion and, as such, is not subsequently affected by the individual’s performance over time.
14
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
DIRECTORS’ REPORT
C.
Employment contracts of directors and other key management personnel
The employment arrangements of the directors are not formalised in a contract of employment except as follows:
§ Mr Ruwan Weerasooriya who entered into an executive services agreement (Managing Director) on or about 20 July
2014 which commenced upon listing on the ASX on 7 October 2014. The Managing Director’s remuneration package
comprises 10,000,000 performance options which are exercisable into shares in the Company when milestones are
achieved within prescribed timeframes, at an exercise price of $0.20 per share on or before 7 February 2018, and an
annual salary of $150,000 plus statutory superannuation. The service agreement has no fixed term and Mr
Weerasooriya or the Company can terminate the agreement upon provision of six months written notice.
D.
Details of remuneration for year
Details of the remuneration of each Director and other key management personnel of the Company, including their
personally-related entities, during the year was as follows:
Director
R Weerasooriya
J Matthews
B Munro
Total
Short Term
Benefits
Salary and
fees
$
150,000
112,500
36,530
27,397
36,530
27,397
223,060
167,294
Year
2016
2015
2016
2015
2016
2015
2016
2015
Post-
Employment
Share Based
Payments
Superannuation
$
Options
$
14,250
10,687
3,470
2,603
3,470
2,603
21,190
15,893
-
705,000
-
-
-
-
-
705,000
Remuneration
consisting of
options during
the year
%
-
85
-
-
-
-
-
79
Remuneration
based on
performance
%
-
85
-
-
-
-
-
79
Total
$
164,250
828,187
40,000
30,000
40,000
30,000
244,250
888,187
E.
Compensation options to key management personnel
There were no options granted as equity compensation benefits to Directors and other key management personnel of
the Company during the year.
During the previous year, the following performance options were granted as incentives for performance to the Managing
Director. The options were issued free of charge. Each option entitles the holder to subscribe for one fully paid ordinary
share in the Company, exercisable when performance milestones are achieved within prescribed timeframes, at an
exercise price of $0.20 per share on or before 7 February 2018.
Director
Number
granted
No. vested
during the
year
Grant date
R Weerasooriya
10,000,000
10,000,000
25/07/2014
Total
10,000,000
10,000,000
¹ Valuation was done using Black Scholes model
Value per
option at
grant date¹
$
$0.0705
Exercise
price
$
$0.20
First
exercise
date
Last
exercise
date
11/11/2014
7/02/2018
15
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
DIRECTORS’ REPORT
The performance milestones to be achieved within the prescribed timeframes are:
Time from listing on ASX (7 October 2014)
Performance Option milestones
12 months
18 months
24 months
36 months
1. 5,000 Merchants or 500,000 Members
2,500,000
2. 10,000 Merchants or 1,000,000 Members
1,250,000
2,500,000
500,000
-
1,250,000
500,000
Performance Option milestones
15 months
21 months
27 months
39 months
3. Revenue of $250k in rolling 3 month period*
2,500,000
1,250,000
500,000
-
4. Revenue of $500k for rolling 3 month period*
2,500,000
1,250,000
500,000
* Note: The rolling 3 month period must be wholly satisfied within the stated time frames from listing on the ASX.
Milestones 1 & 2 were achieved by 9 June 2015 with 1,000,000 members registered, eight months after listing on the
ASX. 5,000,000 performance options became exercisable.
Milestone 3 was achieved on 30 June 2016, twenty months after listing on the ASX. 1,250,000 performance options
became exercisable.
F.
Shares issued to key management personnel on exercise of compensation options
No shares were issued to Directors on exercise of compensation options during the year.
G.
Voting and comments made at the Company’s last Annual General Meeting
The Company received 100% of votes “for” the adoption of the remuneration report for the 2015 financial year. The
Company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices.
H.
Loans with key management personnel
There were no loans to key management personnel or their related entities during the financial year.
I.
Additional disclosures relating to key management personnel
Shareholdings
The number of shares in the Company held during the financial year by each Director and other members of key
management personnel of the Consolidated Entity, including their personally related parties, is set out below:
Director
R Weerasooriya
J Matthews
B Munro
Balance at
Beginning
of Year
87,500,000
266,667
783,333
88,550,000
Received as
Remuneration
Options
Exercised
Acquired/
(disposed)
Net Change
Other
Balance at
End of Year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
87,500,000
266,667
783,333
88,550,000
16
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
DIRECTORS’ REPORT
Option Holdings
The number of options over ordinary shares in the Company held during the financial year by each Director and other
members of key management personnel of the Consolidated Entity, including their personally related parties, is set
out below:
Director
R Weerasooriya
J Matthews
B Munro
Balance at
Beginning
of Year
19,375,000
1,150,000
1,300,000
21,825,000
Received as
Remuneration
Options
Expired/
Cancelled
Net Change
Other
Balance at
End of Year
Number
Vested
Number
Exercisable
-
-
-
-
-
-
-
-
-
-
-
-
19,375,000
1,150,000
1,300,000
19,375,000
1,150,000
1,300,000
15,625,000
1,150,000
1,300,000
21,825,000
21,825,000
16,825,000
J.
Other transactions with key management personnel
During the previous financial year, the $15,687 remaining balance of the loan from the acquisition of Rewardle Pty Ltd
was repaid to Mr Weerasooriya on 18 July 2014.
At 30 June 2016, the Company owed $4,777 (30 June 2015: $11,653) to Mr Weerasooriya for the reimbursement of
business expenses.
The Company entered into a lease for its principal place of business on Flinders Street in Melbourne which commenced
on 1 July 2014 for an initial term of one year, with two further option terms of one year each. Mr Weerasooriya is the
lessor under the lease. The option to extend this lease had not been executed and the lease continued on a month by
month basis. The rental paid on this lease during the year was $24,753 (2015: $24,753).
During the financial period ended 30 June 2014, the Company entered into convertible note agreements with its
Directors and also with unrelated parties. The convertible notes were issued with a conversion price of 20 cents per
share and an interest rate of 12% per annum. Convertible note holders received attaching options expiring 30 June
2017, exercisable at 20 cents each, in lieu of an establishment fee. The attaching options were valued at $0.06798
each using the Black-Scholes option valuation methodology. During the previous year, on 12 September 2014, the
Company issued shares and paid the accrued interest to note holders on conversion of their convertible notes.
Amounts relating to convertible note agreements with the Directors are as follows:
2015
Director
R Weerasooriya
J Matthews
B Munro
Convertible
Notes
Outstanding
$
Attaching
Options
Received
No.
Attaching
Options
Value
$
12% Interest
Received
$
Conversion
Shares
Received
No.
-
-
-
-
-
150,000
-
150,000
-
10,197
-
10,197
111,781
1,210
3,577
123,722
12,500,000
200,000
400,000
13,900,000
This is the end of the Audited Remuneration Report.
17
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
DIRECTORS’ REPORT
INSURANCE OF OFFICERS
The Company has in place an insurance policy insuring Directors and Officers of the Company against any liability arising
from a claim brought by a third party against the Company or its Directors and Officers, and against liabilities for costs
and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in their
capacity as a Director or officer of the Company, other than conduct involving a wilful breach of duty in relation to the
Company.
In accordance with a confidentiality clause under the insurance policy, the amount of the premium paid to the insurers
has not been disclosed. This is permitted under Section 300(9) of the Corporations Act 2001.
SHARE OPTIONS
At the date of this report there were the following unissued ordinary shares for which options were outstanding:
•
•
•
•
•
19,225,000 unlisted options expiring 30 June 2017, exercisable at $0.20 each
19,972,500 unlisted performance options expiring 7 February 2018, exercisable at $0.20 each
836,500 unlisted performance options expiring 7 February 2018, exercisable at $0.25 each
550,000 unlisted performance options expiring 7 February 2018, exercisable at $0.30 each
1,000,000 unlisted options expiring 31 March 2018, exercisable at $0.30 each
During the year the following options were issued:
•
•
•
•
60,000 performance options expiring 7 February 2018, exercisable at $0.20 each
836,500 performance options expiring 7 February 2018, exercisable at $0.25 each
550,000 performance options expiring 7 February 2018, exercisable at $0.30 each
1,000,000 options expiring 31 March 2018, exercisable at $0.30 each
During the year the following options were exercised:
•
•
87,500 performance options expiring 7 February 2018 were exercised at $0.20 each
150,000 options expiring 30 June 2017 were exercised at $0.20 each
No options expired during the year.
Since the end of the financial year, no other options have been issued, exercised or expired.
No person entitled to exercise these options had or has any right, by virtue of the option, to participate in any share
issue of any other body corporate.
LEGAL PROCEEDINGS
The company was not a party to any legal proceedings during the year.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all
or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
18
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
DIRECTORS’ REPORT
ENVIRONMENTAL REGULATIONS
The Group is not currently subject to any specific environmental regulation under Australian Commonwealth or State
law.
CORPORATE GOVERNANCE
Under ASX Listing Rule 4.10.3 the Company’s Corporate Governance Statement can be located at the URL on the
Company’s website being: : http://rewardleholdings.com/corporate-policies/
AUDITOR
Moore Stephens Audit (Vic) were appointed auditors of the Company at the annual general meeting on 20 November
2015. BDO East Coast Partnership were the previous auditors.
NON-AUDIT SERVICES
There were no amounts paid or payable to the auditor for non-audit services provided during the year by the auditor
other than those outlined in Note 4 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor’s behalf), is compatible with the general standard of independence for auditors imposed
by the Corporation Act 2001.
The directors are of the opinion that the services as disclosed in Note 4 to the financial statements do not compromise
the external auditor’s independence requirements of the Corporations Act 2001 for the following reason:
•
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including
reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the company,
acting as advocate for the company or jointly sharing economic risks and rewards.
AUDITOR’S DECLARATION OF INDEPENDENCE
The auditor’s independence declaration for the year ended 30 June 2016, as required under section 307C of the
Corporations Act 2001, has been received and is included within the financial report.
Signed in accordance with a resolution of directors.
Ruwan Weerasooriya
Managing Director
23 September 2016
19
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2016
Revenue
Rendering of services
Other income
Expenses
Consulting fees
Depreciation
Directors fees and benefits expense
Employee benefits expense
Finance costs
IT equipment
Legal fees
Merchant and member network costs
Share based payments
Other expenses
Loss before income tax expense
Income tax expense
Loss after income tax for the year
Other comprehensive income
Other comprehensive income for the year, net of tax
Total comprehensive loss attributable to members of Rewardle
Holdings Limited
Consolidated
2016
$
2015
$
Note
2(a)
585,792
1,694,243
122,615
1,116,039
(140,701)
(6,773)
(244,250)
(3,274,360)
(325)
(655,377)
(25,829)
(1,144,901)
(296,791)
(1,007,381)
(134,315)
-
(183,187)
(2,130,794)
(573,948)
(1,274,482)
(58,622)
(693,222)
(1,559,556)
(911,431)
(4,516,653)
(6,280,903)
-
-
(4,516,653)
(6,280,903)
-
-
-
-
(4,516,653)
(6,280,903)
2(b)
3
Basic and diluted loss per share for the year attributable to the
members of Rewardle Holdings Limited
5
Cents
(3.44)
Cents
(5.66)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes.
20
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2016
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Total Current Assets
Non-Current Assets
Trade and other receivables
Plant and equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Provisions
Total Current Liabilities
Total Liabilities
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Consolidated
Note
2016
$
2015
$
6
7
7
8
9
10
906,533
150,776
1,057,309
4,859,008
118,723
4,977,731
4,140
12,376
16,516
714
-
714
1,073,825
4,978,445
456,221
150,317
606,538
606,538
228,039
110,757
338,796
338,796
467,287
4,639,649
11
12
12,353,702
3,019,981
(14,906,396)
12,306,202
2,723,190
(10,389,743)
467,287
4,639,649
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
21
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2016
Consolidated
2016
Issued
Capital
$
Accumulated
Losses
$
Reserves
$
Total
$
Balance at 1 July 2015
12,306,202
(10,389,743)
2,723,190
4,639,649
Loss for year
Total comprehensive loss for the year
-
-
(4,516,653)
(4,516,653)
-
-
(4,516,653)
(4,516,653)
Transactions with owners in their capacity as
owners:
Securities issued during the year
Cost of share based payments
47,500
-
-
-
-
296,791
47,500
296,791
Balance at 30 June 2016
12,353,702
(14,906,396)
3,019,981
467,287
2015
Balance at 1 July 2014
220,101
(4,108,840)
1,061,665
(2,827,074)
Loss for year
Total comprehensive loss for the year
-
-
(6,280,903)
(6,280,903)
-
-
(6,280,903)
(6,280,903)
Transactions with owners in their capacity as
owners:
Securities issued during the year
Capital raising costs
Cost of share based payments
12,780,000
(693,899)
-
-
-
-
-
-
1,661,525
12,780,000
(693,899)
1,661,525
Balance at 30 June 2015
12,306,202
(10,389,743)
2,723,190
4,639,649
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
22
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
CONSOLIDATED STATEMENT OF CASH FLOW FOR THE YEAR ENDED 30 JUNE 2016
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
R&D tax offset refund received
Interest and other finance costs paid
Net cash used in operating activities
Cash flows from investing activities
Payment for plant and equipment
Payment of security deposit
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payment of capital raising costs
Proceeds from borrowings
Repayment of borrowings
Net cash provided by financing activities
Net (decrease)/increase in cash held
Cash at beginning of the financial year
Consolidated
2016
$
2015
$
Note
Inflows/
(Outflows)
Inflows/
(Outflows)
525,918
(6,200,662)
27,604
1,666,639
(325)
100,516
(5,329,874)
43,463
1,072,576
(170,858)
6(a)
(3,980,826)
(4,284,177)
(19,149)
-
(19,149)
-
(986)
(986)
47,500
-
-
-
9,067,500
(591,929)
260,000
(45,687)
47,500
8,689,884
(3,952,475)
4,404,721
4,859,008
454,287
Cash at end of the financial year
6
906,533
4,859,008
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
23
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
1.
Summary of Significant Accounting Policies
(a)
Basis of Preparation
These consolidated financial statements and notes represent those of Rewardle Holdings Limited and controlled
entities (“Group” or “Consolidated Entity”).
The financial report is a general purpose financial report, which has been prepared in accordance with the
requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards Board. The Group is a for-profit entity for financial
reporting purposes under Australian Accounting Standards.
The financial report has been prepared on an accruals basis and is based on historical costs modified by the
revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis
of accounting has been applied.
Rewardle Holdings Limited (“Company” or “Parent Entity”) is a company limited by shares incorporated in
Australia. The nature of the operations and principal activities of the Group are described in the Directors
Report.
The separate financial statements of the parent entity, Rewardle Holdings Limited, have not been presented
within this financial report as permitted by the Corporations Act 2001.
(b)
Going concern basis
For the year ended 30 June 2016 the consolidated entity had an operating net loss of $4,516,653 (2015:
$6,280,903) and net cash outflows from operating activities of $3,980,826 (2015: $4,284,177).
The ability to continue as a going concern is dependent upon a number of factors, one being the continuation
and availability of funds. The financial statements have been prepared on the basis that the consolidated entity
is a going concern, which contemplates the continuity of its business, realisation of assets and the settlement
of liabilities in the normal course of business.
In determining that the going concern assumption is appropriate, the directors have had regard to:
•
•
•
•
•
Successful post year end capital raise of $2,852,347;
Forecast increase in the number of Merchants paying the monthly subscription fees;
Forecast increase in the revenue generated from brand and channel partnerships;
Previous success on being eligible for the research and development tax incentive; and
If required, previous success in being able to raise capital as equity.
The consolidated entity’s ability to continue to operate as a going concern is dependent upon the items listed
above. Should these events not occur as anticipated, the consolidated entity may be unable to continue as a
going concern and may be required to realise its assets and extinguish its liabilities other than in the ordinary
course of business, and at amounts that differ from those stated in the financial statements.
24
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
1.
Summary of Significant Accounting Policies (Cont.)
(c)
New accounting standards for application in current & future periods
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued
by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period.
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the
financial performance or position of the Group.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not
been early adopted.
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not
yet mandatory, have not been early adopted by the Group for period ended 30 June 2016. The Group's
assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant
to the consolidated entity, are set out below.
AASB 9 Financial Instruments
These amendments must be applied for financial years commencing on or after 1 January 2018. Therefore
application date for the Group will be 30 June 2019. The Group does not currently have any hedging
arrangements in place.
AASB 9 addresses the classification, measurement and de-recognition of financial assets and financial
liabilities. Since December 2013, it also sets out new rules for hedge accounting. There will be no impact on
the Group’s accounting for financial assets and financial liabilities, as the new requirements only effect the
accounting for available-for-sale financial assets and the accounting for financial liabilities that are designated
at fair value through profit or loss and the Group does not have any such financial assets or financial liabilities.
The new hedging rules align hedge accounting more closely with the Group’s risk management practices. As
a general rule it will be easier to apply hedge accounting going forward. The new standard also introduces
expanded disclosure requirements and changes in presentation.
AASB 15 Revenue from Contracts with Customers
These amendments must be applied for annual reporting periods beginning on or after 1 January 2018.
Therefore application date for the Group will be 30 June 2019.
An entity will recognise 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. This means that revenue will be recognised when control of goods or services is transferred,
rather than on transfer of risks and rewards as is currently the case under IAS 18 Revenue. Due to the recent
release of this standard the Group has not yet made an assessment of the impact of this standard.
25
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
1.
Summary of Significant Accounting Policies (Cont.)
(c) New accounting standards for application in current & future periods (Cont.)
AASB 16 Leases
IFRS 16 eliminates the operating and finance lease classifications for lessees currently accounted for under
AASB 117 Leases. It instead requires an entity to bring most leases onto its statement of financial position in
a similar way to how existing finance leases are treated under AASB 117. An entity will be required to
recognise a lease liability and a right of use asset in its statement of financial position for most leases.
There are some optional exemptions for leases with a period of 12 months or less and for low value leases.
The application date of this standard is for annual reporting periods beginning on or after 1 January 2019.
Due to the recent release of this standard, the Group has not yet made a detailed assessment of the impact
of this standard.
(d)
Statement of Compliance
The financial report was authorised for issue on 23 September 2016.
The financial report, comprising the financial statements and notes thereto, complies with International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
(e)
Basis of consolidation
The consolidated financial statements comprise the financial statements of Rewardle Holdings Limited
(“Company” or “Parent Entity”) and its subsidiaries as at 30 June each year (“Consolidated Entity” or “Group”).
Control is achieved where the company has the power to govern the financial and operating policies of an entity
so as to obtain benefits from its activities.
The financial statements of the subsidiaries are prepared for the same reporting year as the parent company,
using consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and
expenses and profit and losses resulting from intra-group transactions have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be
consolidated from the date on which control is transferred out of the Group. Control exists where the company
has the power to govern the financial and operating policies of an entity so as to obtain benefits from its
activities.
The existence and effect of potential voting rights that are currently exercisable or convertible are considered
when assessing when the Group controls another entity.
Business combinations have been accounted for using the acquisition method of accounting (refer note 1(f)).
Unrealised gains or transactions between the Group and its associates are eliminated to the extent of the
Group’s interests in the associates. Unrealised losses are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred.
26
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
1.
Summary of Significant Accounting Policies (Cont.)
(e)
Basis of consolidation (Cont.)
Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries not held by the
Group and are presented separately in the statement of profit or loss and other comprehensive income and
within equity in the consolidated statement of financial position. Losses are attributed to the non-controlling
interests even if that results in a deficit balance.
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions
with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying
amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any
difference between the amount of the adjustment to non-controlling interests and any consideration paid or
received is recognised within equity attributable to owners of the Company.
When the group ceases to have control, joint control or significant influence, any retained interest in the entity
is re-measured to its fair value with the change in carrying amount recognised in profit or loss. The fair value is
the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate,
joint controlled entity or financial asset. In addition, any amounts previously recognised in other comprehensive
income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or
liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified
to profit or loss.
(f)
Business combinations
The acquisition method of accounting is used to account for all business combinations, including business
combinations involving entities or business under common control, regardless of whether equity instruments
or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair
value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The
consideration transferred also includes the fair value of any contingent consideration arrangement and the fair
value of any pre-existing equity interest in the subsidiary. Acquisition-related costs are expenses as incurred.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with
limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition-by-
acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the
non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the
acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share
of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of
the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed,
the difference is recognised directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are
discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental
borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier
under comparable terms and conditions.
Contingent consideration is classified as either equity or a financial liability. Amounts classified as a financial
liability are subsequently remeasured to fair value with changes in fair value recognised in the statement of
profit or loss and other comprehensive income.
27
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
1.
Summary of Significant Accounting Policies (Cont.)
(g)
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and
the revenue can be reliably measured.
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue
are net of returns, trade allowances and duties and taxes paid.
Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset.
(h)
Research and development tax refund
Research and development tax incentives are recognised as other income at their fair value where there is
reasonable assurance that the incentive will be received and the Group will comply with all attached conditions.
(i)
Cash and cash equivalents
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
For the purposes of the cash flow statement, cash and cash equivalents consist of cash and cash equivalents as
described above, net of outstanding bank overdrafts.
(j)
Trade and other receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less
provision for impairment. Trade receivables are due for settlement within 30 days from the date of recognition.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible
are written off.
An allowance account for doubtful receivables is established when there is objective evidence that the Company
will not be able to collect all amounts due according to the original terms of receivables. The amount of the
provision is the difference between the asset’s carrying amount and the present value of estimated future cash
flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not
discounted if the effect of discounting is immaterial. The amount of the provision is recognised in the statement
of profit or loss and other comprehensive income. When a trade receivable for which an impairment allowance
has been recognised becomes uncollectable in a subsequent period, it is written off against the allowance
account. Subsequent recoveries of amounts previously written off are credited against other expenses in the
statement of profit or loss and other comprehensive income.
28
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
1.
Summary of Significant Accounting Policies (Cont.)
(k)
Income Tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted by the reporting date.
Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
§ when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability
in a transaction that is not a business combination and that, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss; or
§ when the taxable temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and
it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused
tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses
can be utilised, except:
§ when the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; or
§ when the deductible temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is
probable that the temporary difference will reverse in the foreseeable future and taxable profit will be
available against which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent
that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the 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 at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable
entity and the same taxation authority.
The amount of benefits brought to account or which may be realised in the future is based on the assumption
that no adverse change will occur in income legislation and the anticipation that the Group will derive sufficient
future assessable income to enable the benefit to be realised and comply with the conditions of deductibility
imposed by the law.
29
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
1.
Summary of Significant Accounting Policies (Cont.)
(l)
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
§ when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority,
in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense
item as applicable; and
receivables and payables, which are stated with the amount of GST included.
§
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables
or payables in the statement of financial position.
Cash flows are included in the cash flow statement on a gross basis and the GST component of cash flows arising
from investing and financing activities, which is recoverable from, or payable to, the taxation authority are
classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
(m)
Financial assets
Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as
either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments,
or available-for-sale investments, as appropriate. When financial assets are recognised initially, they are
measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly
attributable transactions costs. The Group determines the classification of its financial assets after initial
recognition and, when allowed and appropriate, re-evaluates this designation at each financial year-end.
All regular way purchases and sales of financial assets are recognised on the trade date i.e. the date that the
Group commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets
under contracts that require delivery of the assets within the period established generally by regulation or
convention in the marketplace
Loans and receivables
(i)
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains
and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well
as through the amortisation process.
(n)
Impairment of assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any
such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate
of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell
and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows
that are largely independent of those from other assets or groups of assets and the asset's value in use cannot
be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-
generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its
recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its
recoverable amount.
30
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
1.
Summary of Significant Accounting Policies (Cont.)
(n)
Impairment of assets (Cont.)
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. Impairment losses relating to continuing operations are recognised in those expense categories
consistent with the function of the impaired asset unless the asset is carried at revalued amount (in which case
the impairment loss is treated as a revaluation decrease).
An assessment is also made at each reporting date as to whether there is any indication that previously
recognised impairment losses may no longer exist or may have decreased. If such indication exists, the
recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a
change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was
recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That
increased amount cannot exceed the carrying amount that would have been determined, net of depreciation,
had no impairment loss been recognised for the asset in prior periods. Such reversal is recognised in profit or
loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation
increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s
revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
(o)
Trade and other payables
Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services
provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes
obliged to make future payments in respect of the purchase of these goods and services. The amounts are
unsecured and are usually paid within 30 days of recognition.
(p)
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract,
the reimbursement is recognised as a separate assets but only when the reimbursement is virtually certain. The
expense relating to any provision is presented in the statement of profit or loss and other comprehensive
income net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects the risks specific to the liability.
When discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing
cost.
(q)
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expenses
to be settled within 12 months of the reporting date are measured at the amounts expected to be paid when
the liabilities are settled.
31
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
1.
Summary of Significant Accounting Policies (Cont.)
(q)
Employee benefits (Cont.)
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting
date is measured as the present value of expected future payments to be made in respect of services provided
by employees up to the reporting date using the projected unit credit method. Consideration is given to
expected future wage and salary levels, experience of employee departures and periods of service. Expected
future payments are discounted using market yields at the reporting date on corporate bonds with terms to
maturity and currency that match, as closely as possible, the estimated future cash outflows.
(r)
Share-based payment transactions
The Group provides benefits to employees (including senior executives) of the Group in the form of share-based
payments, whereby employees render services in exchange for shares or rights over shares (equity-settled
transactions).
When provided, the cost of these equity-settled transactions with employees is measured by reference to the
fair value of the equity instruments at the date at which they are granted. The fair value is determined using the
Black-Scholes model or the binomial option valuation model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions
linked to the price of the shares of Rewardle Holdings Limited (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the
period in which the performance and/or service conditions are fulfilled, ending on the date on which the
relevant employees become fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date
reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number
of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance
conditions being met as the effect of these conditions is included in the determination of fair value at grant date.
The statement of profit or loss and other comprehensive income charge or credit for a period represents the
movement in cumulative expense recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only
conditional upon a market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had
not been modified. In addition, an expense is recognised for any modification that increases the total fair value
of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date
of modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately. However, if a new award is substituted for the
cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new
award are treated as if they were a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of
earnings per share.
32
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
1.
Summary of Significant Accounting Policies (Cont.)
(s)
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable
to the issue of new shares or options for the acquisition of a new business are not included in the cost of
acquisition as part of the purchase consideration.
(t)
Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the Board of Directors of the Company.
(u)
Earnings per share
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude
any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted
average number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:
§
§
costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have
been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the
dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and
dilutive potential ordinary shares, adjusted for any bonus element.
§
(v)
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are
expensed in the year in which they are incurred, including interest on short-term borrowings.
(w)
Borrowings
All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net
of issue costs associated with the borrowing. Interest calculated using the effective interest rate method is
accrued over the period it becomes due and increases the carrying amount of the liability.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer
settlement of the liability for at least 12 months after the statement of financial position date.
On the issue of the convertible notes the fair value of the liability component is determined using a market rate
for an equivalent non-convertible bond and this amount is carried as a non-current liability on the amortised
cost basis until extinguished on conversion or redemption. The increase in the liability due to the passage of
time is recognised as a finance cost. The remainder of the proceeds are allocated to the conversion option that
is recognised and included in shareholders equity as a convertible note reserve, net of transaction costs. The
carrying amount of the conversion option is not remeasured in the subsequent periods. The corresponding
interest on convertible notes is expensed to profit or loss.
33
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
1.
Summary of Significant Accounting Policies (Cont.)
(x)
Accounting Estimates and Judgments
In the process of applying the Group’s accounting policies, management has made certain judgments or
estimations which have an effect on the amounts recognized in the financial statements.
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions
of future events. The key estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:
Impairment of assets
(i)
In determining the recoverable amount of assets, in the absence of quoted market prices, estimations are made
regarding the present value of future cash flows using asset-specific discount rates and the recoverable amount
of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate
a number of key estimates. No assets were subject to impairment testing at 30 June 2016.
(ii) Share-based payment transactions
The Group measures the cost of equity-settled transactions by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined from market value using the
Black Scholes method.
Deferred tax balances
(iii)
Deferred Tax Balances have not been recognised as it is not probable that they can be recovered.
34
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
2.
Revenue and Expenses
(a) Other Income
Interest
Research and development tax incentive
(b) Other Expenses
Advertising
Audit fees
Company secretarial, compliance and accounting
Doubtful debt expense
Freight
Payroll tax
Rent
Security exchange and registry fees
Telephone
Travel costs
Other
Consolidated
2016
$
2015
$
27,604
1,666,639
1,694,243
43,463
1,072,576
1,116,039
73,954
39,358
91,550
39,343
51,695
135,176
93,647
42,403
121,676
83,213
235,366
1,007,381
81,649
41,000
128,404
7,907
49,206
75,129
85,538
109,241
70,762
106,253
156,342
911,431
3.
Income Tax
(a) Income Tax Expense
The income tax expense for the year differs from the prima facie tax
as follows:
Loss for year
(4,516,653)
(6,280,903)
Prima facie income tax (benefit) @ 30% (2015: 30%)
(1,354,996)
(1,884,271)
Tax effect of non-deductible/(non-assessable) items
Deferred tax assets not brought to account
Total income tax expense
(387,283)
1,742,279
-
303,912
1,580,359
-
(b) Deferred Tax Assets
Deferred tax assets not brought to account arising from tax losses, the
benefits of which will only be realised if the conditions for
deductibility set out in note 1(k) occur:
There are no franking credits available to the Group.
(c) Deferred Tax Liability
Deferred tax liability
2,548,426
1,907,789
Nil
Nil
35
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
4.
Auditors’ Remuneration
Audit or review services:
- Moore Stephens Audit (Vic)
- BDO East Coast Partnership (previous auditor)
5.
Earnings per Share (EPS)
Basic earnings per share/diluted earnings per share
The earnings and weighted average number of ordinary shares used in the
calculation of basic earnings per share is as follows:
Earnings – Net loss for year
Consolidated
2016
$
2015
$
37,750
1,608
39,358
-
41,000
41,000
Cents
(3.44)
Cents
(5.66)
(4,516,653)
(6,280,903)
No.
No.
Weighted average number of ordinary shares used in the calculation of basic EPS
As the Company is in a loss position, diluted EPS calculated is equal to basic EPS.
131,349,944
111,023,332
36
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
6.
Cash and Cash Equivalents
Cash at bank
Cash at bank earns interest at floating rates based on daily bank deposit rates.
This should be read in conjunction with note 18 on Financial Risk Management
(a) Reconciliation of loss for the year to net cash flows from operating
activities:
Loss for the year
Non-cash flows in profit
Depreciation
Equity settled share based payment
Changes in assets and liabilities
Increase in trade and other receivables
Increase/(Decrease) in trade and other payables
Increase in provisions
Net cash outflows from operating activities
Consolidated
2016
$
2015
$
906,533
4,859,008
(4,516,653)
(6,280,903)
6,773
296,791
-
2,031,866
(31,887)
224,590
39,560
(84,760)
(11,466)
61,086
(3,980,826)
(4,284,177)
(b) Non-cash financing and investing activities
There were no non-cash financing and investing activities during the year.
During the previous year, the Company issued 18,500,000 ordinary fully paid shares upon conversion of convertible
notes with a face value of $3,700,000. The Company also issued 1,500,000 brokers options expiring 30 June 2017,
exercisable at 20 cents each, as consideration for capital raising services valued at $101,970.
37
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
7.
Trade and Other Receivables
Current
Trade receivables
Less: Provision for doubtful debt
Other receivables
Consolidated
2016
$
2015
$
139,711
(39,343)
100,368
50,408
150,776
28,471
-
28,471
90,252
118,723
Terms and conditions relating to the above financial instruments:
•
Trade and other receivables are non-interest bearing and generally repayable within 30-60 days.
Non-Current
Employee loans
4,140
714
The employee loans are non-interest bearing. No employee loans are past due or impaired.
Refer to risk management note 18.
Impaired trade receivables
The Group recognised a loss of $39,343 (2015: $7,907) in profit or loss in respect of impairment of trade receivables
for the year ended 30 June 2016.
Impairment losses:
- individually impaired trade receivables
- movement in provision for impairment
-
(39,343)
-
(7,907)
Movements in the provision for impairment of trade receivables that are assessed for impairment collectively are as
follows:
Opening balance
Additional provisions recognised
Receivables written off during the year as uncollectable
Closing balance
-
39,343
-
39,343
7,335
7,907
(15,242)
-
38
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
7.
Trade and Other Receivables (Continued)
Past due but not impaired
At 30 June 2016, the ageing analysis of trade receivables is as follows:
0 – 30 days – not past due
31 – 60 days – not past due
61 – 90 days - past due but not impaired
Over 90 days - past due but not impaired
Over 90 days - considered impaired
Consolidated
2016
$
2015
$
16,497
57,421
2,220
24,230
39,343
139,711
890
2,054
2,313
23,214
-
28,471
As at 30 June 2016, trade receivables of $26,450 (2015: $25,527) were past due but not impaired. The Group did not
consider a credit risk on the aggregate balances after reviewing the credit terms of customers based on recent
collection practices.
The other classes within trade and other receivables do not contain impaired assets and are not past due. Based on
the credit history of these classes, it is expected that these amounts will be received when due.
8.
Plant and Equipment
Plant and equipment – at cost
Less: Accumulated depreciation
Net carrying amount
Reconciliation
Net carrying amount at the beginning of the year
Additions
Depreciation expense
Net carrying amount at the end of the year
19,149
(6,773)
12,376
-
19,149
(6,773)
12,376
-
-
-
-
-
-
-
39
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
9.
Trade and Other Payables
Current
Trade payables
Other payables
Loan from director
Consolidated
2016
$
2015
$
112,300
339,144
4,777
456,221
108,477
107,909
11,653
228,039
Terms and conditions relating to the above financial instruments:
•
•
•
Trade and other payables are non-interest bearing and are normally settled on 30 day terms.
The loan from director is unsecured and non-interest bearing.
Due to the short term nature of the above financial instruments, their carrying value is assumed to approximate
their fair value.
Amounts are expected to be settled within twelve months, refer to risk management note 18.
•
10.
Provisions
Current
Employee benefits
150,317
110,757
Employee benefits represent annual leave entitlements of employees within the Group and is non-interest bearing.
The entire obligation is presented as current, since the Group does not have a right to defer settlement.
40
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
11.
Issued Capital
Issued and paid up capital
(a)
Ordinary shares - fully paid
Consolidated
2016
$
2015
$
12,353,702
12,306,202
(b) Movement in ordinary shares on issue
2016
2015
Ordinary shares – fully paid
Balance at beginning of year
Issued for cash – July 2014
Issued on conversion of convertible notes – 12
September 2014
Issued for cash pursuant to prospectus – 30
September 2014
Expenses of issue
Issued for cash pursuant to placement – 2 April
2015
Expenses of issue
Exercise of performance options expiring 7/02/18
Exercise of options expiring 30/06/17
Balance at end of year
Number
$
Number
$
131,151,515 12,306,202
-
-
76,966,665
533,335
220,101
80,000
-
-
-
-
-
-
18,500,000
3,700,000
20,000,000
-
4,000,000
(366,719)
-
-
87,500
150,000
-
-
17,500
30,000
131,389,015 12,353,702
15,151,515
-
-
-
131,151,515
5,000,000
(327,180)
-
-
12,306,202
(c) Share options
At the end of the year, the following options over unissued ordinary shares were outstanding:
•
•
•
•
•
19,225,000 options expiring 30 June 2017, exercisable at 20 cents each;
19,972,500 performance options expiring 7 February 2018, exercisable at 20 cents each;
836,500 performance options expiring 7 February 2018, exercisable at 25 cents each;
550,000 performance options expiring 7 February 2018, exercisable at 30 cents each; and
1,000,000 options expiring 31 March 2018, exercisable at 30 cents each.
(d) Terms and conditions of issued capital
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the company, to
participate in proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on
shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the company.
Refer to capital risk management note 18.
41
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
Consolidated
2016
$
2015
$
3,023,903
(3,922)
3,019,981
2,727,112
(3,922)
2,723,190
2,727,112
-
1,065,587
67,980
-
-
81,575
1,410,000
-
126,000
170,791
101,970
-
-
3,023,903
2,727,112
12.
Reserves
Option issue reserve
Acquisition reserve
Option issue reserve
(i) Nature and purpose of reserve
The option issue reserve is used to accumulate amounts received on the issue of
options and records items recognised as expenses on valuation of incentive
based share options.
(ii) Movements in reserve
Balance at beginning of year
Issue of incentive based share options – service options
Options issued as establishment fee on convertible notes –
attaching options
Issue of incentive based share options – performance options
Options issued as consideration for capital raising services – broker
options
Issue of incentive based share options to employees
Value of incentive based performance share options issued to
employees and vested during the year
Balance at end of year
Acquisition reserve
(i) Nature and purpose of reserve
As part of the acquisition of Rewardle Pty Ltd in 2014, the equity balances of the
Consolidated Entity would be that of the operating entity, Rewardle Pty Ltd
(deemed to be the “acquirer” for accounting purposes). The resulting difference
between the equity balances of Rewardle Holdings Limited and that of Rewardle
Pty Ltd is recognised in the acquisition reserve.
(ii) Movements in reserve
Balance at beginning of year
Balance at end of year
(3,922)
(3,922)
(3,922)
(3,922)
42
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
13.
Commitments
Operating lease commitments
Non-cancellable operating leases contracted for but not recognised in
the financial statements:
Payable – minimum lease payments
- Not later than one year
- After one year but not more than five years
Consolidated
2016
$
2015
$
40,540
157,965
198,505
17,915
-
17,915
Rewardle Pty Ltd entered into a lease for the Group’s new principal place of business on Queen Street in Melbourne
with an unrelated landlord which commenced on 18 July 2016. The initial term of the lease is three years, with an
option to extend for a further term of two years. Rental for the first year is $81,080 per annum, however the first
sixteen months of the term is subject to a half rent free period. On each anniversary of the lease commencement date,
the rent will be increased by a fixed rate of 4%.
The lease for the Sydney office premises commenced on 10 December 2014 for a period of one year with an option to
renew for another year. The rent for the first year is $34,510. Currently the lease is on a month by month basis.
14.
Contingent Liabilities
The Group has no material contingent liabilities as at the date of this report (2015: nil).
15.
Financial Reporting by Segments
The Group has identified its operating segments based on the internal reports that are used by the Board (the chief
operating decision makers) in assessing performance and in determining the allocation of resources.
The Board as a whole will regularly review the identified segments in order to allocate resources to the segment and
to assess its performance.
The Board considers that the Group has only operated in one segment, being operating as a Digital Customer
Engagement platform for local SME merchants.
Where applicable, corporate costs, finance costs, and interest revenue are not allocated to segments as they are not
considered part of the core operations of the segments and are managed on a Group basis.
The consolidated entity is domiciled in Australia. All revenue from external customers is generated from Australia only.
Segment revenues are allocated based on the country in which the project is located.
Revenues were not derived from a single external customer.
43
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
16.
Related Party Transactions
(a)
Subsidiaries
The consolidated financial statements include the financial statements of Rewardle Holdings Limited and the
subsidiaries listed in the following table:
County of
Incorporation
Class of Shares
Rewardle Pty Ltd
Australia
Ordinary
% Equity Interest
2016
100%
2015
100%
(b)
Parent entity
Rewardle Holdings Limited is the ultimate Australian parent entity and ultimate parent of the Group.
(c)
Key management personnel
Refer to the remuneration report contained in the Directors’ Report for details of the remuneration paid or payable
to each member of the consolidated entity’s key management personnel for the year ended 30 June 2016.
The totals of remuneration paid to key management personnel of the company during the year are as follows:
Short-term benefits
Post-employment benefits
Share-based payments
Consolidated
2016
$
223,060
21,190
-
244,250
2015
$
167,294
15,893
705,000
888,187
(d) Other transactions with Key Management Personnel
During the previous financial year, the $15,687 remaining balance of the loan from the acquisition of Rewardle Pty Ltd
was repaid to Mr Weerasooriya on 18 July 2014.
At 30 June 2016, the Company owed $4,777 (30 June 2015: $11,653) to Mr Weerasooriya for the reimbursement of
business expenses.
The Company entered into a lease for its principal place of business on Flinders Street in Melbourne which commenced
on 1 July 2014 for an initial term of one year, with two further option terms of one year each. Mr Weerasooriya is the
lessor under the lease. The option to extend this lease had not been executed and the lease continued on a month by
month basis. The rental paid on this lease during the year was $24,753 (2015: $24,753).
44
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
16.
Related Party Transactions (Continued)
During the financial period ended 30 June 2014, the Company entered into convertible note agreements with its
Directors and also with unrelated parties. The convertible notes were issued with a conversion price of 20 cents per
share and an interest rate of 12% per annum. Convertible note holders received attaching options expiring 30 June
2017, exercisable at 20 cents each, in lieu of an establishment fee. The attaching options were valued at $0.06798
each using the Black-Scholes option valuation methodology. During the previous year, on 12 September 2014, the
Company issued shares and paid the accrued interest to note holders on conversion of their convertible notes.
Amounts relating to convertible note agreements with the Directors are as follows:
2015
Director
R Weerasooriya
J Matthews
B Munro
Convertible
Notes
Outstanding
$
Attaching
Options
Received
No.
Attaching
Options
Value
$
12% Interest
Received
$
Conversion
Shares
Received
No.
-
-
-
-
-
150,000
-
150,000
-
10,197
-
10,197
111,781
1,210
3,577
123,722
12,500,000
200,000
400,000
13,900,000
45
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
17.
Parent Entity Disclosures
(a) Summary financial information
Financial Position
Assets
Current Assets
Non-current asset
Total assets
Liabilities
Current Liabilities
Total liabilities
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Financial Performance
Loss for the year
Other comprehensive income
Total comprehensive loss
(b) Guarantees
Parent
2016
$
2015
$
318,788
-
318,788
4,577,672
-
4,577,672
100,544
100,544
82,143
82,143
23,529,602
3,023,903
(26,335,261)
218,244
23,482,102
2,727,112
(21,713,685)
4,495,529
(4,621,576)
-
(4,621,576)
(6,554,878)
-
(6,554,878)
Rewardle Holdings Limited has not entered into any guarantees in relation to the debts of its subsidiary.
(c) Other Commitments and Contingencies
Rewardle Holdings Limited has no commitments to acquire property, plant and equipment, and has no contingent
liabilities apart from the amounts disclosed in note 14.
46
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
18.
Financial Risk Management
The Consolidated Entity’s principal financial instruments comprise receivables, payables, loans and cash. The
Consolidated Entity manages its exposure to key financial risks in accordance with the Consolidated Entity’s financial
risk management policy. The objective of the policy is to support the delivery of the Consolidated Entity’s financial
targets while protecting future financial security.
The main risks arising from the Consolidated Entity’s financial instruments are interest rate risk, credit risk and liquidity
risk. The Consolidated Entity does not speculate in the trading of derivative instruments. The Consolidated Entity uses
different methods to measure and manage different types of risks to which it is exposed. These include monitoring
levels of exposure to interest rates and assessments of market forecasts for interest rates. Ageing analysis of and
monitoring of receivables are undertaken to manage credit risk, liquidity risk is monitored through the development of
future rolling cash flow forecasts.
The Board reviews and agrees policies for managing each of these risks as summarised below.
Primary responsibility for identification and control of financial risks rests with the Board. The Board reviews and agrees
policies for managing each of the risks identified below, including for interest rate risk, credit allowances and cash flow
forecast projections.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset
and financial liability are disclosed in note 1 to the financial statements.
Risk Exposures and Responses
Interest rate risk
The Consolidated Entity’s exposure to risks of changes in market interest rates relates primarily to the Consolidated
Entity’s cash balances. The Consolidated Entity constantly analyses its interest rate exposure. Within this analysis
consideration is given to potential renewals of existing positions, alternative financing positions and the mix of fixed and
variable interest rates. As the Company has no interest bearing borrowings its exposure to interest rate movements is
limited to the amount of interest income it can potentially earn on surplus cash deposits.
As at reporting date, the Consolidated Entity had the following financial assets exposed to variable interest rates that
are not designated in cash flow hedges:
Financial Assets
Cash and cash equivalents (interest-bearing accounts)
Net exposure
Consolidated
2016
$
2015
$
906,533
906,533
4,859,008
4,859,008
47
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
18.
Financial Risk Management (Continued)
The following sensitivity analysis is based on the interest rate risk exposures in existence at the reporting date.
At year end, if interest rates had moved, as illustrated in the table below, with all other variables held constant, post-
tax profit and equity relating to financial assets of the Consolidated Entity would have been affected as follows:
Judgements of reasonably possible movements:
Post tax profit – higher / (lower)
+ 0.5%
- 0.5%
Equity – higher / (lower)
+ 0.5%
- 0.5%
Consolidated
2016
$
2015
$
4,533
(4,533)
4,533
(4,533)
24,295
(24,295)
24,295
(24,295)
Liquidity Risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of loans
and other available credit lines.
The Consolidated Entity manages liquidity risk by monitoring immediate and forecast cash requirements and ensuring
adequate cash reserves are maintained.
Credit risk
Credit risk arises from the financial assets of the Consolidated Entity, which comprise deposits with banks and trade
and other receivables. The Consolidated entity’s exposure to credit risk arises from potential default of the counter
party, with the maximum exposure equal to the carrying amount of these instruments. The carrying amount of
financial assets included in the statement of financial position represents the Consolidated Entity’s maximum exposure
to credit risk in relation to those assets.
The Consolidated Entity does not hold any credit derivatives to offset its credit exposure.
The Consolidated Entity trades only with recognised, credit worthy third parties and as such collateral is not requested
nor is it the Consolidated Entity’s policy to secure its trade and other receivables.
Receivable balances are monitored on an ongoing basis with the result that the Consolidated Entity does not have a
significant exposure to bad debts.
The Consolidated Entity’s cash deposits are held with a major Australian banking institution with a credit rating of AA-
otherwise, there are no significant concentrations of credit risk within the Consolidated entity.
48
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
18.
Financial Risk Management (Continued)
The following table details the expected maturity of the Group’s financial assets and liabilities based on the earliest
date of maturity or payment respectively. The amounts are stated on an undiscounted basis and include interest.
Consolidated
2016
Financial Assets:
Non-interest bearing
Variable interest rate
Fixed interest rate
Financial Liabilities:
Non-interest bearing
Fixed interest rate
2015
Financial Assets:
Non-interest bearing
Variable interest rate
Fixed interest rate
Financial Liabilities:
Non-interest bearing
Fixed interest rate
Weighted
average
effective
interest rate
%
Less than 1
month
$
1 – 3
Months
$
3 months
– 1 year
$
1 – 5
years
$
-
0.95
-
-
-
-
1.35
-
-
-
139,711
906,533
-
1,046,244
37,789
-
-
37,789
112,300
-
112,300
343,921
-
343,921
28,471
4,859,008
-
4,887,479
89,266
-
-
89,266
108,477
-
108,477
119,562
-
119,562
986
-
-
986
-
-
-
986
-
-
986
-
-
-
4,140
-
-
4,140
-
-
-
714
-
-
714
-
-
-
Capital Management Risk
Management controls the capital of the Consolidated Entity in order to maximise the return to shareholders and
ensure that the Group can fund its operations and continue as a going concern.
Management effectively manages the Group’s capital by assessing the Consolidated Entity’s financial risks and
adjusting its capital structure in response to changes in these risks and in the market. These responses include the
management of expenditure and debt levels and share and option issues.
The Group has no external loan debt facilities other than trade payables.
Commodity Price and Foreign Currency Risk
The Consolidated Entity’s exposure to price and currency risk is minimal.
Fair Value
The Group does not have any financial instruments that are subject to recurring fair value measurements. Due to their
short-term nature, the carrying amounts of the current receivables and current trade and other payables is assumed
to approximate their fair value.
49
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
19.
Share Based Payments
(a) Value of share based payments in the financial statements
Share based payments expensed - directors fees and benefits expense
Share based payments expensed – employee benefits expense
Share based payments expensed – finance costs
Share based payments – capital raising costs
Consolidated
2016
$
2015
$
-
296,791
-
-
296,791
705,000
772,980
553,886
101,970
2,133,836
(b) Summary of share-based payments
No shares were issued as share based payments during the year.
Set out below are the summaries of options granted as share based payments:
2016
Grant
Date
Expiry
Date
Exercise
Price
Balance at
beginning of
year
Issued
during the
year
Exercised
during the
year
Expired or
Cancelled
Balance at
end of
year
Number
vested
Number
exercisable
30/04/14 30/06/17
7/02/18
30/04/14
7/02/18
3/07/15
7/02/18
3/07/15
7/02/18
3/07/15
31/03/18
3/07/15
$0.20
$0.20
$0.20
$0.25
$0.30
$0.30
19,375,000
1) 20,000,000
-
-
-
-
39,375,000
-
-
60,000
836,500
550,000
1,000,000
2,446,500
(150,000)
(87,500)
-
-
-
-
(237,500)
-
-
-
-
-
-
-
19,225,000 19,225,000
19,912,500 16,162,500
45,000
601,500
387,500
1,000,000
41,584,000 37,421,500
60,000
836,500
550,000
1,000,000
19,225,000
12,412,500
45,000
601,500
387,500
1,000,000
33,671,500
Weighted average exercise price
$0.20
$0.28
$0.20
-
$0.20
$0.20
$0.21
2015
Grant
Date
Expiry
Date
Exercise
Price
Balance at
beginning of
year
Issued during
the year
Exercised
during the
year
Expired or
Cancelled
Balance at
end of
year
Number
vested
Number
exercisable
30/04/14 30/06/17
7/02/18
30/04/14
$0.20
$0.20
15,675,000
-
15,675,000
3,700,000
1) 20,000,000
23,700,000
Weighted average exercise price
$0.20
$0.20
-
-
-
-
-
-
-
-
19,375,000 19,375,000
20,000,000 15,000,000
39,375,000 34,375,000
19,375,000
10,000,000
29,375,000
$0.20
$0.20
$0.20
50
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
19.
Share Based Payments (Continued)
1) Performance options, issued to the Managing Director and employees become exercisable when performance
milestones are achieved within prescribed timeframes.
The performance milestones to be achieved within the prescribed timeframes are:
Time from listing on ASX (7 October 2014)
Performance Option milestones
12 months
18 months
24 months
36 months
1. 5,000 Merchants or 500,000 Members
5,000,000
2. 10,000 Merchants or 1,000,000 Members
2,500,000
5,000,000
1,000,000
2,500,000
-
1,000,000
Performance Option milestones
15 months
21 months
27 months
39 months
3. Revenue of $250k in rolling 3 month period*
5,000,000
2,500,000
1,000,000
-
4. Revenue of $500k for rolling 3 month period*
5,000,000
2,500,000
1,000,000
* Note: The rolling 3 month period must be wholly satisfied within the stated time frames from listing on the ASX.
Milestones 1 & 2 were achieved by 9 June 2015 with 1,000,000 members registered, eight months after listing on the
ASX. 10,000,000 performance options became exercisable.
Milestone 3 was achieved on 30 June 2016, twenty months after listing on the ASX. 2,500,000 performance options
became exercisable.
The assessed fair values of the options was determined using a binomial option pricing model or Black-Scholes model,
taking into account the exercise price, term of option, the share price at grant date and expected price volatility of the
underling share, expected yield and the risk-free interest rate for the term of the option. The inputs to the model used
were:
Grant date
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected life of options (years)
Underlying share price ($)
Option exercise price ($)
Value of option ($)
30/04/2014
-
75%
2.95%
3.17
$0.15
$0.20
$0.06798
30/04/2014
-
75%
2.95%
3.33
$0.15
$0.20
$0.07050
3/07/2015
-
80%
2.03%
2.58
$0.265
$0.20
$0.1498
3/07/2015
-
80%
2.03%
2.58
$0.265
$0.25
$0.1347
3/07/2015
-
80%
2.03%
2.58
$0.265
$0.30
$0.1222
3/07/2015
-
80%
2.03%
2.75
$0.265
$0.30
$0.1260
(c) Weighted average remaining contractual life
The weighted average remaining contractual life of share-based payment options that were outstanding as at 30 June
2016 was 1.3 years (2015: 2.3 years).
(d) Weighted average fair value
The weighted average fair value of share-based payment options granted during the year was $0.12870 (2015:
$0.07011) each.
51
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016
20.
Events Subsequent to Year End
There are no other matters or circumstances that have arisen since 30 June 2016 that have or may significantly affect
the operations, results, or state of affairs of the Group other than:
On 9 August 2016, the Company announced an accelerated one for two pro rata non-renounceable entitlement offer
of up to 65,694,508 fully paid ordinary shares at $0.05 each to raise $3,284,725 (before costs). The Entitlement Offer
comprised an accelerated institutional component and a retail component.
The Institutional Entitlement Offer was completed on 11 August 2016, with 43,750,000 shares issued on 17 August
2016 at $0.05 each, raising $2,187,500 (before costs). The Company’s Managing Director and founder, Mr Ruwan
Weerasooriya, subscribed for 20,000,000 shares of his entitlement under the Institutional Entitlement Offer. Arising
from the partial underwriting of the shortfall shares under the Institutional Entitlement Offer, 2,000,000 shares were
subscribed for by the underwriter (Sequoi Nominees Pty Ltd), a company in which Mr Brandon Munro, a Director of
the Company, is a director and shareholder.
The Retail Entitlement Offer was completed on 31 August 2016. On 2 September 2016, 9,315,818 shares were issued
under the Retail Entitlement Offer acceptances and 3,981,116 shares under the shortfall applications, at $0.05 each,
raising a total of $664,847. Mr Brandon Munro subscribed for his entitlement of 391,667 shares under the Retail
Entitlement Offer.
52
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
DIRECTOR’S DECLARATION
The Directors of the Company declare that:
1.
The financial statements and notes are in accordance with the Corporations Act 2001, and:
(i)
comply with Accounting Standards, Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
(ii) give a true and fair view of the financial position of the Company as at 30 June 2016 and of its performance
for the financial year ended on that date.
2.
The Chief Executive Officer and Chief Financial Officer equivalents of the Company declare that:
(i)
the financial records of the Company for the year have been properly maintained in accordance with
section 286 of the Corporations Act 2001;
(ii)
the financial statements and notes for the year comply with the accounting standards; and
(iii) the financial statements and notes for the year give a true and fair view.
3.
4.
The Company has included in note 1 to the financial statements an explicit and unreserved statement of
compliance with International Financial Reporting Standards as issued by the International Accounting
Standards Board.
In the opinion of the directors’ there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Ruwan Weerasooriya
Managing Director
23 September 2016
53
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
INDEPENDENT AUDITOR’S REPORT
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF REWARDLE HOLDINGS LIMITED
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF REWARDLE HOLDINGS LIMITED
Report on the Financial Report
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF REWARDLE HOLDINGS LIMITED
Report on the Financial Report
We have audited the accompanying financial report of Rewardle Holdings Limited
(the company), which comprises the consolidated statement of financial position as at 30 June 2016, the
Report on the Financial Report
We have audited the accompanying financial report of Rewardle Holdings Limited
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
(the company), which comprises the consolidated statement of financial position as at 30 June 2016, the
changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a
We have audited the accompanying financial report of Rewardle Holdings Limited
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
summary of significant accounting policies and other explanatory information and the directors’ declaration
(the company), which comprises the consolidated statement of financial position as at 30 June 2016, the
changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a
of the consolidated entity comprising the company and the entities it controlled at the year’s end or from
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
summary of significant accounting policies and other explanatory information and the directors’ declaration
time to time during the financial year.
changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a
of the consolidated entity comprising the company and the entities it controlled at the year’s end or from
summary of significant accounting policies and other explanatory information and the directors’ declaration
time to time during the financial year.
Directors’ Responsibility for the Financial Report
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
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
internal control as the directors determine is necessary to enable the preparation of the financial report that
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in
The directors of the company are responsible for the preparation of the financial report that gives a true and
internal control as the directors determine is necessary to enable the preparation of the financial report that
accordance with Accounting Standard AASB 101: Presentation of Financial Statements, that the financial
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in
statements comply with International Financial Reporting Standards (IFRS).
internal control as the directors determine is necessary to enable the preparation of the financial report that
accordance with Accounting Standard AASB 101: Presentation of Financial Statements, that the financial
is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in
statements comply with International Financial Reporting Standards (IFRS).
Auditor’s Responsibility
accordance with Accounting Standard AASB 101: Presentation of Financial Statements, that the financial
statements comply with International Financial Reporting Standards (IFRS).
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
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit
ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable
in accordance with Australian Auditing Standards. Those standards require that we comply with relevant
assurance whether the financial report is free from material misstatement.
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit
ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable
in accordance with Australian Auditing Standards. Those standards require that we comply with relevant
assurance 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
ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable
financial report. The procedures selected depend on the auditor’s judgment, including the assessment of the
assurance 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
risks of material misstatement of the financial report, whether due to fraud or error. In making those risk
financial report. The procedures selected depend on the auditor’s judgment, including the assessment of the
assessments, the auditor considers internal control relevant to the company’s preparation of the financial
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
risks of material misstatement of the financial report, whether due to fraud or error. In making those risk
report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose
financial report. The procedures selected depend on the auditor’s judgment, including the assessment of the
assessments, the auditor considers internal control relevant to the company’s preparation of the financial
An audit also includes evaluating
of expressing an opinion on the effectiveness of the entity’s internal control.
risks of material misstatement of the financial report, whether due to fraud or error. In making those risk
report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose
the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the
assessments, the auditor considers internal control relevant to the company’s preparation of the financial
An audit also includes evaluating
of expressing an opinion on the effectiveness of the entity’s internal control.
directors, as well as evaluating the overall presentation of the financial report.
report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose
the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the
An audit also includes evaluating
of expressing an opinion on the effectiveness of the entity’s internal control.
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
the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the
audit opinion.
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
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 confirm that the independence declaration required by the Corporations Act 2001, which has been
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act
given to the directors of Rewardle Holdings Limited, would be in the same terms if provided to the directors
2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been
as at the date of this auditor’s report.
In conducting our audit, we have complied with the independence requirements of the Corporations Act
given to the directors of Rewardle Holdings Limited, would be in the same terms if provided to the directors
2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been
as at the date of this auditor’s report.
given to the directors of Rewardle Holdings Limited, would be in the same terms if provided to the directors
as at the date of this auditor’s report.
54
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
INDEPENDENT AUDITOR’S REPORT
Auditor’s Opinion
In our opinion:
a.
the financial report of Rewardle Holdings Limited is in accordance with the Corporations Act 2001,
including:
i.
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 year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001; and
b.
the financial report also complies with International Financial Reporting Standards as disclosed in Note
1.
Emphasis of Matter
Without modifying our opinion, we draw attention to Note 1(b) in the financial report, which details the
director’s assumptions in preparing the financial report on a going concern basis. If these assumptions do not
eventuate it may cast doubt about the Group’s ability to continue as a going concern and therefore the Group
may be unable to realise its assets and discharge its liabilities in the normal course of business.
Report on the Remuneration Report
We have audited the remuneration report included in pages 12 to 17 of the directors’ report for the year
ended 30 June 2016. The directors of the company are responsible for the preparation and presentation of
the remuneration report in accordance with s 300A of the Corporations Act 2001. Our responsibility is to
express an opinion on the remuneration report, based on our audit conducted in accordance with Australian
Auditing Standards.
Auditor’s Opinion
In our opinion the remuneration report of Rewardle Holdings Limited for the year ended 30 June 2016
complies with s 300A of the Corporations Act 2001.
MOORE STEPHENS AUDIT (VIC)
ABN 16 847 721 257
GEORGE S DAKIS
Partner
Audit & Assurance Services
Melbourne, Victoria
23 September 2016
55
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
DECLARATION OF INDEPENDENCE
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF REWARDLE HOLDINGS LIMITED
Report on the Financial Report
AUDITOR’S INDEPENDENCE DECLARATION
We have audited the accompanying financial report of Rewardle Holdings Limited
UNDER S 307C OF THE CORPORATIONS ACT 2001
(the company), which comprises the consolidated statement of financial position as at 30 June 2016, the
TO THE DIRECTORS OF REWARDLE HOLDINGS LIMITED
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a
summary of significant accounting policies and other explanatory information and the directors’ declaration
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2016, there have been:
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.
i.
no contraventions of the auditor independence requirements as set out in the Corporations Act 2001
in relation to the audit; and
Directors’ Responsibility for the Financial Report
no contraventions of any applicable code of professional conduct in relation to the audit.
ii.
The directors of the company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
is free from material misstatement, whether due to fraud or error. In Note 1, 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 (IFRS).
MOORE STEPHENS AUDIT (VIC)
Auditor’s Responsibility
ABN 16 847 721 257
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 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
GEORGE S. DAKIS
financial report. The procedures selected depend on the auditor’s judgment, including the assessment of the
Partner
risks of material misstatement of the financial report, whether due to fraud or error. In making those risk
Audit & Assurance Services
assessments, the auditor considers internal control relevant to the company’s preparation of the financial
report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose
Melbourne, Victoria
An audit also includes evaluating
of expressing an opinion on the effectiveness of the entity’s internal control.
the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the
23 September 2016
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 confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of Rewardle Holdings Limited, would be in the same terms if provided to the directors
as at the date of this auditor’s report.
56
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
SECURITIES EXCHANGE INFORMATION
HOLDINGS AS AT 15 SEPTEMBER 2016
Substantial Shareholders
Name
RUWAN WEERASOORIYA
MAMALADE HOLDINGS PTY LTD
Units
88,000,000
19,000,000
% of Total
46.70
10.08
Holding Ranges
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 9,999,999,999
Totals
Holders
38
90
141
389
157
815
Total Units
1,754
280,193
1,248,098
14,325,336
172,580,568
188,435,949
% Issued Share Capital
0.00%
0.15%
0.66%
7.60%
91.59%
100.00%
There are 181 shareholders with less than a marketable parcel.
Voting Rights
Each fully paid ordinary share carries voting rights of one vote per share.
The Top 20 Holders of Ordinary Shares are:
Position Holder Name
Holding
% IC
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
RUWAN WEERASOORIYA
MARMALADE HOLDINGS PTY LTD
MOSCH PTY LTD
MR TRENT ANTONY GOODRICK
A C N 158 527 952 PTY LTD
ROBERT PAUL MARTIN &
SUSAN PAMELA MARTIN