ACN 168 751 746
Annual Report
30 June 2017
For personal use only CORPORATE DIRECTORY
CORPORATE DIRECTORY
DIRECTORS
Ruwan Weerasooriya – Executive Chairman
Peter Pawlowitsch – Non-Executive Director
David Niall – 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
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
LETTER FROM THE BOARD OF DIRECTORS TO SHAREHOLDERS
LETTER FROM THE BOARD OF DIRECTORS TO SHAREHOLDERS
Dear Shareholder,
During the 2017 financial year, Rewardle continued its transition from a growth focus to commercialisation
which included the transition to a more operationally oriented board.
Rewardle is committed to its mission to provide local businesses 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.
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.
Over the past year, Rewardle has continued to commercialise its network of local businesses and members. As
at 30 June 2017, over 2000 Merchants are paying recurring monthly subscription fees and the Company has
continued to attract consistent advertising revenue from leading brands.
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.
In the 2018 financial year, 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.
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 2018 financial year for Rewardle.
Yours sincerely
Ruwan Weerasooriya
Chairman
3
Rewardle Holdings Limited
ABN 37 168 751 746
1
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
REVIEW OF OPERATIONS
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:
• On 12 July 2017, Mr Ruwan Weerasooriya provided a $400,000 unsecured, fee and interest free loan facility
to Rewardle Pty Ltd, of which $200,000 was drawn down and was repaid to Mr.Weerasooriya on 19
September 2017.
• On 17 July 2017, the Company announced a fully underwritten 1 for 1.4 pro-rata non-renounceable rights
issue offer of up to 134,597,106 fully paid ordinary shares at $0.015 each to raise $2,018,957 (before costs).
•
The rights issue offer was completed on 9 August 2017, with 134,597,106 shares issued on 9 August 2017 at
$0.015 each, raising $2,018,957 (before costs). The Company’s Managing Director and founder, Mr Ruwan
Weerasooriya, subscribed for 124,101,812 shares under the offer through a combination of exercise of rights
and the underwriting of the offer.
COMPANY OVERVIEW
Rewardle connects over 5,000 local businesses with over 2.5 million Members around Australia.
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.
The results for the year ended 30 June 2017 were as expected as the business builds on the commercialisation strategy
that was previously initiated.
Revenue
30 June 2017
$
2,624,383
30 June 2016
$
2,280,035
30 June 2015
$
1,238,654
Loss before taxation and extraordinary items
3,776,434
4,516,653
6,280,903
Extraordinary items
0
0
0
Lost after taxation and extraordinary items
3,776,434
4,516,653
6,280,903
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
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 5000 local businesses and over 2.5m Members
Network effect powering ongoing organic growth and serving as barrier to entry for potential competitors
Over 45% of Rewardle’s Merchant Network paying recurring Merchant Services (SaaS) fees
18 months of consistent traction in development of brand advertising and recurring Merchant Services (SaaS)
revenue
Substantial reduction in operating costs and growing recurring revenue from Merchant Services (SaaS) fees
with current annualised run rate of approximately $1m
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 5000 local businesses and over 2.5m 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.
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
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
and recurring Merchant
Services (SaaS) fees
Na(cid:143)onal Network of
over 5,040 Merchants and
over 2.5m Members
Consistent trac(cid:143)on with
brand partners genera(cid:143)ng
short term revenue and
suppor(cid:143)ng Merchant and
Member engagement
2,295 represen(cid:143)ng more
than 45% of Merchant
Network paying recurring
Merchant Services (Saas) fees
MERCHANT AND MEMBER NETWORK DEVELOPMENT
Merchants*
Paying Merchants*
Members*
Leverage Pla(cid:129)orm,
brand ac(cid:143)vity and
Network scale to recruit
new Merchants without
free trial offer
NOW
New Merchants pay
immediately to join,
including a set up fee
6,000
5,000
4,000
3,000
2,000
1,000
0
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
Jun 15
Sep 15
Dec 15 Mar 16
Jun 16
Sep 16
Dec 16 Mar 17
Jun 17
*Approximate values based on unaudited management accounts. Qtrly SaaS Revenue excludes bad debt provisions.
6
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only REVIEW OF OPERATIONS
QUARTERLY SAAS REVENUE AND OPERATION EXPENSES
Qtrly Saas revenue ($’000)*
Qtrly opera(cid:21)ng expenses ($’000)*
242
254
1,917
1,788
216
1,757
1,800
1,678
1,335
1,197
1211
106
19
19
25
42
Sep 15
Dec 15 Mar 15
Jun 16
Sep 16
Dec 16 Mar 17
Jun 17
Sep 15
Dec 15 Mar 15
Jun 16
Sep 16
Dec 16 Mar 17
Jun 17
*Approximate values based on unaudited management accounts. Qtrly SaaS Revenue excludes bad debt provisions.
BOARD AND MANAGEMENT TRANSITION
As announced to the ASX on 30th May 2017, as part of Rewardle’s development progression from strategic network
growth to commercialisation, the Company’s Board was re-aligned for the demands of this phase of growth.
Rewardle founder and Managing Director, Ruwan Weerasooriya assumed the role of Executive Chair, joined by David
Niall as an Executive Director and Peter Pawlowitsch as an Independent Non-Executive Director. Key terms and
commentary relating to the appointment of new Directors is outlined below:
David Niall – Executive Director (Appointed May 2017)
David Niall has a BSc (Hons) and holds a Master of Business Administration from Harvard Business School. Formerly
an executive at Telstra, he has deep knowledge of the mobiles industry with extensive experience in developing and
launching innovative products. He has extensive experience driving implementation of complex strategic programs
across telecommunications, technology and management consulting industries. David has been consulting to
Rewardle with respect to strategy and implementation over recent months and will increase his engagement with the
business is his role as an Executive Director.
Peter Pawlowitsch – Non-Executive (Appointed May 2017)
Peter Pawlowitsch is Certified Practising Accountant, holds a Master of Business Adminstration and is an experienced
public company director and investor in the technology sector. He is currently chairman of ASX-listed technology
companies Dubber Corporation Ltd and Novatti Group Ltd.
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only BUSINESS SUMMARY
KEY STRATEGIC GOALS
Management has substantially reduced operating costs while maintaining business development capability as
demonstrated by consistently developing Merchant Services (SaaS) fees and Brand Partnership income.
During FY18 management remains focussed on aligning operational costs with revenue generation and balancing
operating costs against closely monitored revenue targets.
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 746For personal use only DIRECTORS’ REPORT
DIRECTORS’ REPORT
Your Directors present their report on the Company and its controlled entities for the year ended 30 June 2017.
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 – Executive Chairman (became Executive Chairman on 30 May 2017)
Peter Pawlowitsch – Non-Executive Director (appointed 30 May 2017)
David Niall – Executive Director (appointed 30 May 2017)
Jack Matthews – Non-executive Chairman (resigned 30 May 2017)
Brandon Munro – Non-executive Director (resigned 30 May 2017)
Directors have been in office since the start of the financial year until the date of this report unless otherwise stated.
Ian Hobson held the position of Company Secretary for the full financial year.
The particulars of the qualifications, experience and special responsibilities of each Director are as follows:
Ruwan Weerasooriya – Executive Chairman
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:
§
§
231,601,812 ordinary shares
6,750,000 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.
Peter Pawlowitsch – Non-Executive Director
Mr Pawlowitsch holds a Bachelor of Commerce from the University of Western Australia, is a current member of the
Certified Practising Accountants of Australia and also holds a Master of Business Administration from Curtin University.
These qualifications have underpinned more than fifteen years’ experience in the accounting profession and more
recently in business management and the evaluation of businesses and mining projects.
At the date of this report, Mr Pawlowitsch has interests in the following shares and options of the Company:
§
10,435,762 ordinary shares
During the past three years, Mr Pawlowitsch has held directorships in the following listed entities:
§ Ventnor Resources Limited (12 February 2010 – present)
§ Department 13 International Limited (30 January 2012 – 18 December 2015)
§
Knosys Limited (16 March 2015 – present)
§ Novatti Group Limited (19 June 2015 – present)
§ Dubber Corporation Ltd (20 September 2011 – present)
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Rewardle Holdings Limited
ABN 37 168 751 746
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
DIRECTORS’ REPORT
DIRECTORS’ REPORT
David Niall – Executive Director
David Niall has a BSc (Hons) and holds a Master of Business Administration from Harvard Business School. Formerly an
executive at Telstra, he has a deep knowledge of the mobiles industry with extensive experience in developing and
launching innovative products. He has extensive experience driving implementation of complex strategic programs
across telecommunications, technology and management consulting industries.
At the date of this report, Mr Niall held no shares or options in the Company.
During the past three years Mr Niall has held no other listed Company Directorships.
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 $3,776,434 (2016: $4,516,653 loss).
Financial Position
At 30 June 2017, the Group had net liabilities of $552,981 (2016: net assets of $467,288) with cash reserves of $215,009
(2016: $906,533).
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Rewardle Holdings Limited
ABN 37 168 751 746
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Financing and Investing Activities
The Company issued the following securities during the year:
§
§
13,296,934 ordinary fully paid shares issued on 2 September 2016 at $0.05 per share ; and
43,750,000 ordinary fully paid shares issued on 17 August 2016 at $0.05 per share.
Dividends
No dividends were paid during the year (2016: 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 12 July 2017, Mr Ruwan Weerasooriya provided a $400,000 unsecured, fee and interest free loan facility to
Rewardle Pty Ltd, of which $200,000 was drawn down and was repaid to Mr.Weerasooriya on 19 September 2017.
On 17 July 2017, the Company announced a fully underwritten 1 for 1.4 pro-rata non-renounceable rights issue offer
of up to 134,597,106 fully paid ordinary shares at $0.015 each to raise $2,018,957 (before costs).
The rights issue offer was completed on 9 August 2017, with 134,597,106 shares issued on 9 August 2017 at $0.015
each, raising $2,018,957 (before costs). The Company’s Managing Director and founder, Mr Ruwan Weerasooriya,
subscribed for 124,101,812 shares under the offer through a combination of exercise of rights and the underwriting
of the 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.
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Rewardle Holdings Limited
ABN 37 168 751 746
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
DIRECTORS’ REPORT
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:
R Weerasooriya
J Matthews
P Pawlowitsch
D Niall
B Munro
REMUNERATION REPORT (AUDITED)
Board of Directors
Number eligible to attend
7
7
2
2
7
Number attended
7
7
2
2
7
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
Peter Pawlowitsch
David Niall
Executive Chairman
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
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 other key management personnel
• 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.
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Rewardle Holdings Limited
ABN 37 168 751 746
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
DIRECTORS’ REPORT
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 way 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.
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Rewardle Holdings Limited
ABN 37 168 751 746
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DIRECTORS’ REPORT
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 technology 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 that 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.
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Rewardle Holdings Limited
ABN 37 168 751 746
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
DIRECTORS’ REPORT
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.
§ Mr David Niall who has entered into an agreement that remains subject to shareholder approval which consists of a
package comprising $120,000 per annum plus superannuation, a notice period of six months and that he devote 70%
of his working time to the Company.
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
Year
Short Term
Benefits
Salary and
fees
$
Post-
Employment
Share Based
Payments
Superannuation
$
Options
$
Total
$
D Niall
R Weerasooriya
P Pawlowitsch
-
-
-
-
-
-
-
-
-
-
-
-
* The remuneration for Mr.Niall relates to the entire period he was employed by the Group.
150,000
150,000
3,044
-
28,125*
-
33,484
36,530
33,484
36,530
248,137
226,104
14,250
14,250
289
-
-
-
3,180
3,470
3,180
3,470
20,899
21,190
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
J Matthews
B Munro
Total
164,250
164,250
3,333
-
28,125*
-
36,664
40,000
36,664
40,000
269,036
247,294
Remuneration
consisting of
options during
the year
%
-
-
-
-
-
-
-
-
-
-
-
-
Remuneration
based on
performance
%
-
-
-
-
-
-
-
-
-
-
-
-
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.
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 2016 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.
On 12 July 2017, Mr Ruwan Weerasooriya provided a $400,000 unsecured, fee and interest free loan facility to
Rewardle Pty Ltd, of which $200,000 was drawn down and was repaid to Mr.Weerasooriya on 19 September 2017.
15
Rewardle Holdings Limited
ABN 37 168 751 746
11
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
DIRECTORS’ REPORT
DIRECTORS’ REPORT
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:
Balance at
Beginning of Year
Received as
Remuneration
Options
Exercised
Acquired/
(disposed)
Net Change
Other
Balance at
End of Year
87,500,000
6,087,526
-
93,587,526
-
-
-
-
-
-
-
-
-
-
-
-
20,000,000
-
-
20,000,000
107,500,000
6,087,526
-
113,587,526
Director
R Weerasooriya
P Pawlowitsch
D Niall
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
P Pawlowitsch
D Niall
Balance at
Beginning
of Year
19,375,000
1,600,000
-
20,975,000
Received as
Remuneration
Options
Expired/
Cancelled
Net Change
Other
Balance at
End of Year
Number
Vested
Number
Exercisable
-
-
-
-
12,625,000
1,600,000
-
14,225,000
-
-
-
-
6,750,000
-
-
6,250,000
-
-
6,250,000
-
-
6,750,000
6,250,000
6,250,000
J.
Other transactions with key management personnel
At 30 June 2017, the Company owed $917 (30 June 2016: $4,777) to Mr Weerasooriya for the reimbursement of
business expenses.
On 12 July 2017, Mr Ruwan Weerasooriya provided a $400,000 unsecured, fee and interest free loan facility to
Rewardle Pty Ltd, of which $200,000 was drawn down and was repaid to Mr.Weerasooriya on 19 September 2017.
This is the end of the Audited Remuneration 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.
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Rewardle Holdings Limited
ABN 37 168 751 746
12
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
DIRECTORS’ REPORT
DIRECTORS’ REPORT
SHARE OPTIONS
At the date of this report there were the following unissued ordinary shares for which options were outstanding:
• 13,412,500 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.
No options were issued or exercised during the year.
The following options lapsed during the year:
• 19,225,000 unlisted options, exercisable at 20 cents each;
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.
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Rewardle Holdings Limited
ABN 37 168 751 746
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
DIRECTORS’ REPORT
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 auditors of the Company for the year.
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 as 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 2017, 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
28 September 2017
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Rewardle Holdings Limited
ABN 37 168 751 746
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2017
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2017
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
Basic and diluted loss per share for the year attributable to the
members of Rewardle Holdings Limited
Consolidated
2017
$
2016
$
Note
2(a)
1,214,410
1,409,973
585,792
1,694,243
(197,012)
(11,346)
(248,490)
(3,289,361)
-
(273,819)
(45,307)
(1,012,546)
(5,521)
(1,317,415)
(140,701)
(6,773)
(244,250)
(3,274,360)
(325)
(655,377)
(25,829)
(1,144,901)
(296,791)
(1,007,381)
(3,776,434)
(4,516,653)
-
-
(3,776,434)
(4,516,653)
-
-
-
-
2(b)
3
5
(3,776,434)
(4,516,653)
Cents
(2.09)
Cents
(3.44)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes.
19
Rewardle Holdings Limited
ABN 37 168 751 746
15
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2017
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
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
Unearned income
Provisions
Total Current Liabilities
Total Liabilities
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Consolidated
Note
2017
$
2016
$
6
7
7
8
9
10
11
215,009
142,813
357,822
906,533
150,776
1,057,309
-
10,220
10,220
4,140
12,376
16,516
368,042
1,073,825
525,732
226,632
168,659
921,023
456,221
-
150,317
606,538
921,023
606,538
(552,981)
467,287
12
13
15,104,347
3,025,502
(18,682,830)
12,353,702
3,019,981
(14,906,396)
(552,981)
467,287
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
20
Rewardle Holdings Limited
ABN 37 168 751 746
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2017
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2017
Consolidated
2017
Issued
Capital
$
Accumulated
Losses
$
Reserves
$
Total
$
Balance at 1 July 2016
12,353,702
(14,906,396)
3,019,981
467,287
Loss for year
Total comprehensive loss for the year
-
-
(3,776,434)
(3,776,434)
-
-
(3,776,434)
(3,776,434)
Transactions with owners in their capacity as
owners:
Securities issued during the year
Capital raising costs
Cost of share based payments
2,852,347
(101,702)
-
-
-
-
-
-
5,521
2,852,347
(101,702)
5,521
Balance at 30 June 2017
15,104,347
(18,682,830)
3,025,502
(552,981)
2016
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
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
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Rewardle Holdings Limited
ABN 37 168 751 746
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2017
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2017
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
2017
$
2016
$
Note
Inflows/
(Outflows)
Inflows/
(Outflows)
1,297,697
(6,082,440)
5,401
1,404,572
-
525,918
(6,200,662)
27,604
1,666,639
(325)
6(a)
(3,374,770)
(3,980,826)
(9,190)
(58,209)
(67,399)
(19,149)
-
(19,149)
2,852,347
(101,702)
-
-
2,750,645
47,500
-
-
-
47,500
(691,524)
(3,952,475)
906,533
4,859,008
Cash at end of the financial year
6
215,009
906,533
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
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Rewardle Holdings Limited
ABN 37 168 751 746
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
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 2017 the consolidated entity had an operating net loss of $3,776,434 (2016:
$4,516,653), net cash outflows from operating activities of $3,374,770 (2016: $3,980,826) and net current
liabilities of $563,201 (2016: net current assets of $450,771).
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:
•
Subject to the matters below, the Group cashflow forecast shows a positive cash position for a period
extending beyond twelve months from this report;
Successful post year end capital raise of $2,018,957;
Forecast increase in the number of Merchants paying the monthly subscription fees;
Forecast revenue generated from brand and channel partnerships;
Previous success on being eligible for the research and development tax incentive;
• Being able to raise capital as equity;
•
•
•
•
• Monetisation of the existing membership base; and,
•
Increasing number of underlying members in this base.
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.
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Rewardle Holdings Limited
ABN 37 168 751 746
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
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 2017. 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. The Group has not
yet made an assessment of the impact of this standard.
24
Rewardle Holdings Limited
ABN 37 168 751 746
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
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. 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 28 September 2017.
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.
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Rewardle Holdings Limited
ABN 37 168 751 746
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
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.
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Rewardle Holdings Limited
ABN 37 168 751 746
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
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.
27
Rewardle Holdings Limited
ABN 37 168 751 746
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
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.
28
Rewardle Holdings Limited
ABN 37 168 751 746
24
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
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.
29
Rewardle Holdings Limited
ABN 37 168 751 746
25
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
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.
30
Rewardle Holdings Limited
ABN 37 168 751 746
26
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
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.
31
Rewardle Holdings Limited
ABN 37 168 751 746
27
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
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.
32
Rewardle Holdings Limited
ABN 37 168 751 746
28
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
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. No assets were subject to impairment testing at 30 June 2017.
(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.
33
Rewardle Holdings Limited
ABN 37 168 751 746
29
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
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
2017
$
2017
$
5,401
1,404,572
1,409,973
27,604
1,666,639
1,694,243
124,076
36,444
135,325
197,341
34,522
132,610
121,015
123,226
90,918
92,052
229,886
1,317,415
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
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
(3,776,434)
(4,516,653)
Prima facie income tax (benefit) @ 30% (2016: 30%)
(1,132,930)
(1,354,996)
Tax effect of non-deductible/(non-assessable) items
Deferred tax assets not brought to account
Total income tax expense
(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:
(355,011)
1,487,941
-
(387,283)
1,742,279
-
3,062,529
2,548,426
There are no franking credits available to the Group.
(c) Deferred Tax Liability
Deferred tax liability
34
Rewardle Holdings Limited
ABN 37 168 751 746
Nil
Nil
30
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
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
2017
$
2016
$
36,000
-
36,000
37,750
1,608
39,358
Cents
(2.09)
Cents
(3.44)
(3,776,434)
(4,516,653)
No.
No.
Weighted average number of ordinary shares used in the calculation of basic EPS
180,351,007
131,349,944
As the Company is in a loss position, diluted EPS calculated is equal to basic EPS.
35
Rewardle Holdings Limited
ABN 37 168 751 746
31
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
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 19 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)/Decrease in trade and other receivables
Increase/(Decrease) in trade and other payables
Increase in unearned income
Increase in provisions
Net cash outflows from operating activities
(b) Non-cash financing and investing activities
Consolidated
2017
$
2016
$
215,009
906,533
(3,776,434)
(4,516,653)
11,346
5,521
6,773
296,791
86,107
56,517
226,632
15,541
(31,887)
224,590
-
39,560
(3,374,770)
(3,980,826)
There were no non-cash financing and investing activities during the year or previous financial year.
36
Rewardle Holdings Limited
ABN 37 168 751 746
32
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
7.
Trade and Other Receivables
Current
Trade receivables
Less: Provision for doubtful debt
Other receivables
Consolidated
2017
$
2016
$
320,301
(236,684)
83,617
59,196
142,813
139,711
(39,343)
100,368
50,408
150,776
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
The employee loans are non-interest bearing. No employee loans are past due or impaired.
Refer to risk management note 19.
Impaired trade receivables
The Group recognised a loss of $197,341 (2016: $39,343) in profit or loss in respect of impairment of trade
receivables for the year ended 30 June 2017.
Impairment losses:
- movement in provision for impairment
(197,341)
(39,343)
Movements in the provision for impairment of trade receivables that are assessed for impairment collectively are as
follows:
Opening balance
Additional provisions recognised
Closing balance
39,343
197,341
236,684
-
39,343
39,343
37
Rewardle Holdings Limited
ABN 37 168 751 746
33
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
7.
Trade and Other Receivables (Continued)
Past due but not impaired
At 30 June 2017, 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
0 – 30 days – not past due but impaired
31 – 60 days – not past due but impaired
61 – 90 days - past due but impaired
Over 90 days - past due but impaired
Consolidated
2017
$
2016
$
52,058
27,755
3,804
-
21,875
15,362
15,919
183,528
320,301
16,497
57,421
2,220
24,230
-
-
-
39,343
139,711
As at 30 June 2017, trade receivables of $nil (2016: $26,450) were past due but not impaired.
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
28,339
(18,119)
10,220
12,376
9,190
(11,346)
10,220
19,149
(6,773)
12,376
-
19,149
(6,773)
12,376
38
Rewardle Holdings Limited
ABN 37 168 751 746
34
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
9.
Trade and Other Payables
Current
Trade payables
Other payables
Loan from director
Consolidated
2017
$
2016
$
177,985
346,830
917
525,732
112,300
339,144
4,777
456,221
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 19.
•
10. Unearned Income
Current
Unearned Income
226,632
-
Unearned income represents payment received in advance for services to still be provided within the Group and is
non-interest bearing.
11.
Provisions
Current
Employee benefits
168,659
150,317
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.
39
Rewardle Holdings Limited
ABN 37 168 751 746
35
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
12.
Issued Capital
Issued and paid up capital
(a)
Ordinary shares - fully paid
Consolidated
2017
$
2016
$
15,104,347
12,353,702
(b) Movement in ordinary shares on issue
2017
2016
Number
$
Number
$
Ordinary shares – fully paid
Balance at beginning of year
Issued for cash – August / September 2016
Expenses of issue
Exercise of performance options expiring 7/02/18
Exercise of options expiring 30/06/17
Balance at end of year
131,389,015 12,353,702
2,852,347
(101,702)
57,046,934
-
-
-
-
-
131,151,515 12,306,202
-
-
17,500
30,000
-
-
87,500
150,000
188,435,949 15,104,347
131,389,015
12,353,702
(c) Share options
At the end of the year, the following options over unissued ordinary shares were outstanding:
•
13,412,500 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 19.
40
Rewardle Holdings Limited
ABN 37 168 751 746
36
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Consolidated
2017
$
2016
$
3,029,424
(3,922)
3,025,502
3,023,903
(3,922)
3,019,981
3,023,903
-
2,727,112
126,000
5,521
170,791
3,029,424
3,023,903
13.
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 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)
41
Rewardle Holdings Limited
ABN 37 168 751 746
37
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
14.
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
2017
$
2016
$
89,041
81,081
170,122
40,540
157,965
198,505
15.
Contingent Liabilities
The Group has no material contingent liabilities as at the date of this report (2016: nil).
16.
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.
42
Rewardle Holdings Limited
ABN 37 168 751 746
38
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
17.
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
2017
100%
2016
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 2017.
The totals of remuneration paid to key management personnel of the Company during the year are as follows:
Short-term benefits
Post-employment benefits
Consolidated
2017
$
248,140
20,901
269,041
2016
$
223,060
21,190
244,250
(d) Other transactions with Key Management Personnel
At 30 June 2017, the Company owed $917 (30 June 2016: $4,777) to Mr Weerasooriya for the reimbursement of
business expenses.
43
Rewardle Holdings Limited
ABN 37 168 751 746
39
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
18.
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
2017
$
2016
$
80,816
-
80,816
318,788
-
318,788
245,039
245,039
100,544
100,544
26,280,247
3,029,424
(29,473,894)
(164,223)
23,529,602
3,023,903
(26,335,261)
218,244
(3,138,633)
-
(3,138,633)
(4,621,576)
-
(4,621,576)
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 19.
44
Rewardle Holdings Limited
ABN 37 168 751 746
40
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
19.
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
2017
$
2016
$
215,009
215,009
906,533
906,533
45
Rewardle Holdings Limited
ABN 37 168 751 746
41
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
19.
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
2017
$
2016
$
1,075
(1,075)
1,075
(1,075)
4,533
(4,533)
4,533
(4,533)
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.
46
Rewardle Holdings Limited
ABN 37 168 751 746
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
19.
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
2017
Financial Assets:
Non-interest bearing
Variable interest rate
Fixed interest rate
Financial Liabilities:
Non-interest bearing
Fixed interest rate
2016
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
-
-
-
-
0.95
-
-
-
320,301
215,009
-
535,310
525,732
-
525,732
986
-
-
986
-
-
-
139,711
906,533
-
1,046,244
37,789
-
-
37,789
112,300
-
112,300
343,921
-
343,921
2,189
-
-
2,189
56,021
-
-
56,021
-
-
-
986
-
-
986
-
-
-
-
-
-
4,140
-
-
4,140
-
-
-
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.
47
Rewardle Holdings Limited
ABN 37 168 751 746
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
20.
Share Based Payments
(a) Value of share based payments in the financial statements
Share based payments expensed – employee benefits expense
(b) Summary of share-based payments
No shares were issued as share based payments during the year.
Consolidated
2017
$
2016
$
5,521
5,521
296,791
296,791
Set out below are the summaries of options granted as share based payments:
2017
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
19,225,000
1) 19,912,500
60,000
836,500
550,000
1,000,000
41,584,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(19,225,000)
-
(6,500,000) 13,412,500 12,412,500
-
601,500
387,500
1,000,000
15,799,000 14,401,500
(60,000)
-
-
-
25,785,000
-
836,500
550,000
1,000,000
-
12,412,500
-
601,500
387,500
1,000,000
14,401,500
Weighted average exercise price
$0.20
-
-
$0.20
$0.21
$0.21
$0.21
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
48
Rewardle Holdings Limited
ABN 37 168 751 746
44
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
20.
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
2017 was 0.3 years (2016: 1.3 years).
(d) Weighted average fair value
The weighted average fair value of share-based payment options granted during the year was $nil (2016: $0.1287)
each.
49
Rewardle Holdings Limited
ABN 37 168 751 746
45
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
21.
Events Subsequent to Year End
There are no other matters or circumstances that have arisen since 30 June 2017 that have or may significantly affect
the operations, results, or state of affairs of the Group other than:
On 12 July 2017, Mr Ruwan Weerasooriya provided a $400,000 unsecured, fee and interest free loan facility to
Rewardle Pty Ltd, of which $200,000 was drawn down and was repaid to Mr.Weerasooriya on 19 September 2017.
On 17 July 2017, the Company announced a fully underwritten 1 for 1.4 pro-rata non-renounceable rights issue offer
of up to 134,597,106 fully paid ordinary shares at $0.015 each to raise $2,018,957 (before costs).
The rights issue offer was completed on 9 August 2017, with 134,597,106 shares issued on 9 August 2017 at $0.015
each, raising $2,018,957 (before costs). The Company’s Managing Director and founder, Mr Ruwan Weerasooriya,
subscribed for 124,101,812 shares under the offer through a combination of exercise of rights and the underwriting
of the offer.
50
Rewardle Holdings Limited
ABN 37 168 751 746
46
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
DIRECTORS’ DECLARATION
DIRECTORS' 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 2017 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
28 September 2017
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Rewardle Holdings Limited
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
INDEPENDENT AUDITOR’S REPORT
b)
the accompanying financial report of the Company is in accordance with the Corporations Act 2001, including:
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF REWARDLE HOLDINGS LIMITED AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT
INDEPENDENT AUDITOR’S REPORT
Report on the Audit of the Financial Report
TO THE MEMBERS OF REWARDLE HOLDINGS LIMITED AND CONTROLLED ENTITIES
TO THE MEMBERS OF REWARDLE HOLDINGS LIMITED AND CONTROLLED ENTITIES
Opinion
Report on the Audit of the Financial Report
Report on the Audit of the Financial Report
We have audited the financial report of Rewardle Holdings Ltd and Controlled Entity (the Company), which
Opinion
comprises the consolidated statement of financial position as at 30 June 2017, the consolidated statement of profit
Opinion
or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated
We have audited the financial report of Rewardle Holdings Ltd and Controlled Entity (the Company), which
statement of cash flows for the year then ended, and notes to the financial statements, including a summary of
We have audited the financial report of Rewardle Holdings Ltd and Controlled Entity (the Company), which
comprises the consolidated statement of financial position as at 30 June 2017, the consolidated statement of profit
significant accounting policies, and the directors’ declaration.
comprises the consolidated statement of financial position as at 30 June 2017, the consolidated statement of profit
or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated
or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, and notes to the financial statements, including a summary of
In our opinion:
statement of cash flows for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies, and the directors’ declaration.
significant accounting policies, and the directors’ declaration.
a)
In our opinion:
In our opinion:
a)
a)
giving a true and fair view of the Company’s financial position as at 30 June 2017 and of its financial
i.
the accompanying financial report of the Company is in accordance with the Corporations Act 2001, including:
performance for the year then ended; and
the accompanying financial report of the Company is in accordance with the Corporations Act 2001, including:
giving a true and fair view of the Company’s financial position as at 30 June 2017 and of its financial
i.
complying with Australian Accounting Standards and the Corporations Regulations 2001.
ii.
giving a true and fair view of the Company’s financial position as at 30 June 2017 and of its financial
i.
performance for the year then ended; and
performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
complying with Australian Accounting Standards and the Corporations Regulations 2001.
the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.
ii.
ii.
the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.
the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.
Basis for Opinion
b)
b)
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
Basis for Opinion
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our
Basis for Opinion
report. We are independent of the Company in accordance with the auditor independence requirements of the
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our
report. We are independent of the Company in accordance with the auditor independence requirements of the
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
report. We are independent of the Company in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
opinion.
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
Material Uncertainty Related to Going Concern
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
opinion.
We draw attention to Note 1(b) Going Concern basis in the financial report which describes the events and/or
Material Uncertainty Related to Going Concern
conditions which give rise to the existence of a material uncertainty that may cast significant doubt about the
Material Uncertainty Related to Going Concern
group’s ability to continue as a going concern and therefore the group may be unable to realise its assets and
We draw attention to Note 1(b) Going Concern basis in the financial report which describes the events and/or
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this matter.
We draw attention to Note 1(b) Going Concern basis in the financial report which describes the events and/or
conditions which give rise to the existence of a material uncertainty that may cast significant doubt about the
conditions which give rise to the existence of a material uncertainty that may cast significant doubt about the
group’s ability to continue as a going concern and therefore the group may be unable to realise its assets and
Key Audit Matters
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. Our opinion is not modified in respect of this matter.
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this matter.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
Key Audit Matters
the financial report of the current period. Except for the matters described in the Material Uncertainty related to
Key Audit Matters
Going Concern section, we have determined that there are no other key audit matters to communicate in our
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
report.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. Except for the matters described in the Material Uncertainty related to
the financial report of the current period. Except for the matters described in the Material Uncertainty related to
Going Concern section, we have determined that there are no other key audit matters to communicate in our
Going Concern section, we have determined that there are no other key audit matters to communicate in our
report.
report.
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REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
INDEPENDENT AUDITOR’S REPORT
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Company’s annual report for the year ended 30 June 2017, but does not include the financial report and our
Other Information
auditor’s report thereon.
The directors are responsible for the other information. The other information comprises the information included
in the Company’s annual report for the year ended 30 June 2017, but does not include the financial report and our
Our opinion on the financial report does not cover the other information and accordingly we do not express any
auditor’s report thereon.
form of assurance conclusion thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
form of assurance conclusion thereon.
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
If, based on the work we have performed, we conclude that there is a material misstatement of this other
obtained in the audit or otherwise appears to be materially misstated.
information, we are required to report that fact. We have nothing to report in this regard.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
Responsibilities of the Directors for the Financial Report
information, we are required to report that fact. We have nothing to report in this regard.
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
Responsibilities of the Directors for the Financial Report
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
and fair view and is free from material misstatement, whether due to fraud or error.
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
In preparing the financial report, the directors are responsible for assessing the ability of the Company to continue
and fair view and is free from material misstatement, whether due to fraud or error.
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Company or to cease operations, or has no realistic
In preparing the financial report, the directors are responsible for assessing the ability of the Company to continue
alternative but to do so.
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Company or to cease operations, or has no realistic
Auditor’s Responsibilities for the Audit of the Financial Report
alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Auditor’s Responsibilities for the Audit of the Financial Report
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
be expected to influence the economic decisions of users taken on the basis of this financial report.
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgment and
be expected to influence the economic decisions of users taken on the basis of this financial report.
maintain professional scepticism throughout the audit. We also:
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgment and
maintain professional scepticism throughout the audit. We also:
identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
intentional omissions, misrepresentations, or the override of internal control;
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
intentional omissions, misrepresentations, or the override of internal control;
the Company’s internal control;
obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
and related disclosures made by directors;
the Company’s internal control;
conclude on the appropriateness of director’s use of the going concern basis of accounting and, based on
evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
and related disclosures made by directors;
cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
conclude on the appropriateness of director’s use of the going concern basis of accounting and, based on
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
may cause the Company’s to cease to continue as a going concern; and
financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Company’s to cease to continue as a going concern; and
53
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
INDEPENDENT AUDITOR’S REPORT
evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance in
the audit of the financial report of the current period and are therefore the key audit matters. We describe these
matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 12 to 16 of the directors’ report for the year ended 30
June 2017.
In our opinion, the Remuneration Report of Rewardle Holdings Ltd and Controlled Entity, for the year ended 30
June 2017 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
MOORE STEPHENS AUDIT (VIC)
ABN 16 847 721 257
GEORGE S. DAKIS
Partner
Audit & Assurance Services
Melbourne, Victoria
28 September 2017
54
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
DECLARATION OF INDEPENDENCE
AUDITOR’S INDEPENDENCE DECLARATION
UNDER S 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF REWARDLE HOLDINGS LIMITED AND CONTROLLED ENTITY
AUDITOR’S INDEPENDENCE DECLARATION
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2017, there have been:
UNDER S 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF REWARDLE HOLDINGS LIMITED AND CONTROLLED ENTITY
i.
no contraventions of the auditor independence requirements as set out in the Corporations Act 2001
in relation to the audit; and
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2017, there have been:
ii.
no contraventions of any applicable code of professional conduct in relation to the audit.
i.
no contraventions of the auditor independence requirements as set out in the Corporations Act 2001
in relation to the audit; and
ii.
no contraventions of any applicable code of professional conduct in relation to the audit.
MOORE STEPHENS AUDIT (VIC)
ABN 16 847 721 257
MOORE STEPHENS AUDIT (VIC)
ABN 16 847 721 257
GEORGE S. DAKIS
Partner
Audit & Assurance Services
Melbourne, Victoria
GEORGE S. DAKIS
Partner
28 September 2017
Audit & Assurance Services
Melbourne, Victoria
28 September 2017
55
REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746For personal use only
SECURITIES EXCHANGE INFORMATION
SECURITIES EXCHANGE INFORMATION
HOLDINGS AS AT 20 SEPTEMBER 2017
Substantial Shareholders
Name
RUWAN WEERASOORIYA
MAMALADE HOLDINGS PTY LTD
Units
150,857,144
32,571,430
% of Total
54.68
11.81
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 433 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
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
RUWAN WEERASOORIYA
MARMALADE HOLDINGS PTY LTD
MARMALADE HOLDINGS PTY LTD
MOSCH PTY LTD
MR TRENT ANTONY GOODRICK
SEQUOI NOMINEES PTY LTD
MR HONGHAO SUN
A C N 158 527 952 PTY LTD
ROBERT PAUL MARTIN &
SUSAN PAMELA MARTIN