More annual reports from Wisr Limited:
2023 ReportPeers and competitors of Wisr Limited:
Zaim Credit SystemsA N N UA L R E P O R T
Wisr_AnnualReport_FY19_20.10.indd 1
21/10/19 10:28 am
WI S R L IMIT ED | A NNUA L REPORT 2019
1
Wisr_AnnualReport_FY19_20.10.indd 2
21/10/19 10:28 am
OUR VISI ON IS TO
BRI NG FI NA NCIA L
WELLNESS TO ALL
AUSTRALIANS.
Wisr_AnnualReport_FY19_20.10.indd 3
2
21/10/19 10:28 am
WI S R L IMIT ED | AN NUAL REPORT 2019
WI S R L IMIT ED | A NNUA L REPORT 2019
1
Wisr_AnnualReport_FY19_20.10.indd 4
21/10/19 10:28 am
Contents.
4.
5.
7.
9.
1 2.
13.
15.
16.
17.
19.
22.
37.
38.
39.
4 0.
41 .
42.
67.
68.
71 .
74.
FY19 H IG HL IGHT S
CHAIRMA N’S R EVIEW
CEO’S R EVIEW
OPPORTUNIT Y SIZE
FY19 LOA N O RIG INAT ION
FINANC IA L W EL LN ESS EC OSYSTEM
RECOGN ITION
PE OPLE A N D CU LTURE
FY20 OUTLOOK
BOARD O F DIREC TORS
DIRECTORS’ REPO RT
AU DITO R’S INDEP EN DENC E DE CL A R ATIO N
STATEM EN T O F P ROFIT OR LOSS A N D OTH ER COM PR E HE NS IVE IN COM E
STATEM EN T O F FIN AN C IAL POSI TION
STATEM EN T O F C HAN GES IN EQU ITY
STATEM EN T O F C ASH FLOWS
NOT ES TO THE FIN A NC IAL STATEM EN TS
DIRECTORS’ DECL A RAT ION
INDE PEN DEN T AUDITOR’S REP ORT TO TH E MEMB E R S O F W ISR L IM ITE D
ASX ADDITIO NA L IN FORMAT ION
CORPORATE DIR EC TO RY
Wisr_AnnualReport_FY19_17.10.indd 5
2
21/10/19 6:41 pm
WI S R L IMIT ED | AN NUAL REPORT 2019
WI S R L IMIT ED | A NNUA L REPORT 2019
Our vision is to
bring financial
wellness to all
Australians.
3
Wisr_AnnualReport_FY19_20.10.indd 6
21/10/19 10:28 am
FY19 Highlights.
Operating revenue up 91%, to $3.04m
Loan origination volume up 281% to
Marketing expense down 4%, to
(FY18 $1.6m).
$68.9m (FY18 $18.1m).
$1.46m (FY18 $1.52m).
Launched Wisr App to promote
Raised $15m, net of costs, in an
Introduced over 60,000 Australians
financial wellness through debt
oversubscribed equity raise in H2FY19.
into the Wisr Ecosystem.
reduction, with over 25,000 downloads
in the first three months from launch.
Significantly extended the reach and
Strategic partnership announcements
Progress towards evolving Wisr debt
potential of the Wisr Financial Wellness
including Smartgroup, HCF and an
funding facilities with multiple parties.
Ecosystem through the launch of
industry super fund.
Wisr@Work and Wisr&Co B2B2C
partnership models.
Launched WisrCredit, the country’s
The Company is well capitalised with
only credit score comparison service
$16.8m net assets including $12m cash
with over 32,000 Australians
as at 30 June 2019.
comparing their scores in FY19.
Wisr_AnnualReport_FY19_20.10.indd 7
4
21/10/19 10:28 am
WI S R L IMIT ED | A NNUA L REPORT 2019
Wisr has moved beyond its
transformational phase and is now
established to maximise growth
and margins based on operational
excellence, a unique strategy and
a committed and forward-thinking
team.
Chairman’s review.
Dear Shareholder,
Company deliver on this strategy
Rather, by investing in a unique
On behalf of the Board of Directors it
gives me great pleasure to present the
2019 Wisr Annual Report.
This has been a year in which Wisr
has built on its strategic foundations,
delivering growth across the core
business, maintaining strong
governance while demonstrating a
clear pathway for continued expansion
through the launch of the Wisr
Ecosystem.
ST RATEGY
As previously outlined, the strategy of
the company is set to provide Wisr the
platform to scale and grow through
through the rollout of new consumer
business model and strategy, lead by
products WisrCredit and Wisr App,
an experienced team, the Company can
alongside the growth of the strategic
build defensible channels and position
partnerships platform Wisr@Work.
the business for long term growth and
Tens of thousands of new customers
have been introduced to Wisr as a
result of these channels. We expect to
ongoing shareholder value.
FI NAN CIA L HIGHLIG HTS
see these numbers continue to grow as
Wisr Limited reported a net loss
these channels develop and mature in
after tax of $7.7m (FY18: $6.2m),
the coming years.
while forward investing in the Wisr
As the Company continues the rollout
of the Wisr Ecosystem, I expect to see
these new products and services begin
to contribute to the underlying unit
Ecosystem and positioning the
Company for long-term growth.
REVENUE
economics of the business and support
Wisr increased operating revenue
growth in the core lending business.
by 91% during the year to $3.04m
a unique combination of financial
In the broader market context of the
wellness products that complement its
hotly contested consumer lending
core lending business.
space, I hold the firm view that the
from $1.6m in FY18. Revenue is
predominantly derived from loan
establishment fees and management
fees from servicing loans sold to third
The board is pleased to see the
path forward is not through imitating
existing consumer lending models.
parties.
5
Wisr_AnnualReport_FY19_20.10.indd 8
21/10/19 10:29 am
“ Wisr has moved beyond its
transformational phase and is now
established to maximise growth
and margins based on operational
excellence, a unique strategy and
The growth in revenue was driven
H2FY19. The $12m cash excludes liquid
the core lending business and
by the 281% increase in loan volume
loans held on balance sheet, $1.8m of
originations growth
during the year to $68.9m from
which were sold and realised as cash
$18.1m in FY18. The FY18 revenue
on 2 July 2019 as part of standard
figure included interest revenue from
business operations.
• Maintain credit quality and improve
loan unit economics to deliver a
greater share of revenue per loan to
loans held on balance sheet prior to
the commencement of wholesale
funding in October 2017 which inflates
the FY18 revenue figure relative to
FY19.
Today, Wisr uses a predominantly
Wisr
capital-light funding model through
• Diversification of debt funding
off balance sheet funding structures
models through new structures and
which have allowed the business
facilities, whilst maintaining capital-
to scale from a capital allocation
light attributes
a committed and forward-thinking
EXPENSES
perspective. This has allowed capital to
be used to fund Company growth and
team.
Employee expenses, the majority line
deliver on the Wisr Ecosystem strategy
item for Wisr, increased 32% to $5.0m
as opposed to supporting loan funding.
• Launch Secured Vehicle Finance
product to increase the total
addressable market
• Increase customer numbers in the
in FY19 from $3.8m in FY18 driven by
an increase in headcount from circa
33 to 52. A significant portion of the
growth in headcount has been driven
by the build and rollout of the Wisr
Ecosystem, as the Company invests in
building assets of long term strategic
value.
Marketing expense decreased 4%
to $1.46m in FY19 from $1.52m in
FY18 which highlights the continued
effective scaling of the business. Loan
originations increased 281% during
the same period. A material portion of
the marketing spend was also related
to the rollout of the Wisr Ecosystem
products as opposed to pure loan
origination.
This approach has been successful
Wisr Ecosystem
and allowed Wisr to be a true platform
play in the market. As the Company
continues to mature and grow, it will
• Maintain a culture of high
performance and delivery excellence
look to evolve its funding structures
The Company continues to deliver on
to maximise the opportunity to
its strategic mandate and is moving
strengthen the underlying business
into an incredibly exciting period. This
economics.
is all made possible through the hard
work and dedication of the whole Wisr
The Company’s objectives in pursuing
the new funding opportunities are
team.
increasing debt capacity to fund
Thank you to our valued shareholders,
our rapid growth, diversification of
for your continued support, confidence
funding partners and therefore risk,
and trust in Wisr. I would also like to
improved overall margins for Wisr
thank the Board and management
and improvement in specific loan
team for their ongoing contribution,
unit economics. The structures of the
vision, and experience as we enter
new facilities are diverse and will see
an extremely exciting period for the
the Company benefit from a hybrid
organisation.
JOHN NANTES
EXECUTIVE CHAIRMAN
Customer processing costs of $1.2m
funding model while maintaining its
are now being separately disclosed
capital-light attributes.
given their materiality. These relate
to the processing of loans, but a
significant portion relates to the
onboarding of customers into the Wisr
Ecosystem.
FINANCIAL POSITIONING AND
DEB T FU NDING
The Company is well capitalised with
$16.8m net assets including $12m
cash as at 30 June 2019 following an
oversubscribed $15m equity raise in
LOOKING F ORWARD
Wisr has moved beyond its
transformational phase and is now
established to maximise growth
and margins based on operational
excellence, a unique strategy and a
committed and forward-thinking team.
In FY20 Wisr will deliver on this
through key strategic priorities:
• Continue efficient scaling of
Wisr_AnnualReport_FY19_20.10.indd 9
6
21/10/19 10:29 am
“ WI S R L IMIT ED | A NNUA L REPORT 2019
CEO’s review.
2019 has been a pivotal year for Wisr
There remains a truly significant
our approach to delivering consistently
as we execute our strategy to redefine
opportunity in the Australian market
strong but prudent and safe, growth
and reinvent what a consumer lending
for Wisr to build a company of scale,
of the loan book, rather than chasing
company can be. Our unique business
purpose, and profitability in a way that
short term volume at the expense of
model and approach to this sector we
hasn’t been done before, and we’re
unit economics.
believe sets us apart, and 2019 has
excited about the path ahead of us.
delivered strong proof points that we
are setting out on the right track.
The team has delivered an outstanding
EFFICIENTLY SC ALI NG THE
LENDIN G BUSINESS
While we expect that competition
will only increase in the consumer
lending space in the coming years, we
believe the strategy that is focussed
set of results across all of our key
In the past year, Wisr continued its
on building the strongest platform for
metrics, with almost $110m in total
balance of long term sustainable book
long term, sustainable and profitable
loans written, the establishment of a
growth delivered by market leading
success is the right one.
unique ecosystem of financial wellness
unit economics, operational excellence
products and tools bringing tens of
and conservative loss rates.
thousands of Australians to Wisr, and
delivering major B2B partnerships.
Wisr delivered 281% loan volume
growth in FY19, while also passing
This is all due to the incredible hard
the milestone of $100m in total loans
The opportunity is significant in
the Australian market, with over 3
million personal loan applications
expected in the coming year1 of which
Wisr’s share is only in its infancy. We
work, commitment and continued
written. This growth was achieved
firmly believe that through a strong
pursuit of excellence demonstrated
alongside 91% revenue growth while
brand, operational and marketing
every day by the entire Wisr team, and
marketing spend reduced by 4%.
efficiency, and investment in our
I would like to sincerely thank them for
everything that they do.
The efficient scaling of the core
personal loans business is central to
proprietary lending platform, Wisr is
uniquely placed to capitalise on this
opportunity.
7
Wisr_AnnualReport_FY19_20.10.indd 10
21/10/19 10:29 am
1Source: Equifax Credit Pulse 2019 (published August 2019), Wisr data August 2019 REINVE NTING WHAT A
CONS UMER LENDING COMPANY
CAN BE
Wisr is committed to building the
consumer lending company of the
few months, the app reached the top
With an unwavering commitment to
10 finance apps in The App Store at
improving the financial wellness of all
launch and has gone on to help pay
Australians, Wisr is building a purpose-
down hundreds of thousands of dollars
led business capable of delivering this
in extra consumer debt.
new type of experience to the millions
of Australians who apply for a personal
future, something genuinely unique
Wisr’s strategic partnership platform,
in this space, not merely extending on
Wisr@Work, continued to grow in FY19
loan each year.
what’s already available in the market
providing a highly scalable distribution
Fusing the best of emerging fintech
today.
of the Wisr product suite. Partnerships
with the operational reliability of a
We’ve approached this by establishing
Wisr as a purpose-led company, one
that is focussed on the financial
wellness of Australians. In FY19 the
Company delivered on this purpose
with the rollout of the Wisr Financial
Wellness Ecosystem, welcoming over
60,000 Australian’s to the Company in
the process.
WisrCredit, Australia’s only credit
score comparison tool, launched in
announced include ASX listed salary
traditional lender, Wisr will continue
packaging and employee benefits
to deliver exceptional customer
company Smartgroup, Australia’s
experiences and a business model
largest not for profit health insurer
that is scalable, purpose-led and
HCF, and a soon to be named industry
built to deliver long term value and
superannuation fund. It’s exciting to be
profitability.
working with such well known, forward-
thinking companies such as these, and
we look forward to announcing more
partnerships as they become finalised
in the coming year.
ANT HONY NANT ES
CHIEF EXECUTIVE OFFICER
the first half of the financial year to
SUM MARY
There’s never been a better time
to build a purpose-led business in
consumer finance. The tailwinds and
momentum are well and truly behind
businesses like Wisr, who look to
champion the customer and provide
a smarter, fairer alternative to the
incumbents.
help address confusion and lack of
understanding around credit scores.
By the end of the financial year over
32,000 Australians used the service to
check and compare their credit scores,
with over 40% of them ranked as
some of the most creditworthy in the
country.
In March 2019, debt reduction tool
Wisr App launched to support the over
2 million Australian’s struggling to pay
down high-interest credit card debt.
With over 25,000 downloads in its first
There remains a truly significant opportunity
in the Australian market for Wisr to build a
company of scale, purpose, and profitability in
a way that hasn’t been done before, and we’re
excited about the path ahead of us.
Wisr_AnnualReport_FY19_20.10.indd 11
8
21/10/19 10:29 am
“ WI S R L IMIT ED | AN NUAL REPORT 2019
1.53M
Personal Loans
1.36M
Credit Cards
374,000
Auto Loans
1.15M
Home Loans
4.4 million applications for
consumer credit expected in
the next six months.
9
Wisr_AnnualReport_FY19_20.10.indd 12
21/10/19 10:29 am
Source: Equifax Credit Pulse 2019 (published August 2019) A significant opportunity
exists for Wisr.
APPROXIMATELY 3 MILLION PERSONAL LOAN APPLICATIONS EXPECTED PER ANNUM.
3M PERSONAL LOAN APPLICATIONS
0.22%
(CURRENT WISR PENETRATION)
Wisr personal loan applications in FY19 as a share
of potential expected personal loan applications.
Wisr_AnnualReport_FY19_20.10.indd 13
10
21/10/19 10:29 am
Source: Equifax Credit Pulse 2019 (published August 2019), Wisr data August 2019 WI S R L IMIT ED | A NNUA L REPORT 2019
Building market-leading
unit economics.
Wisr continued the efficient scaling of its core personal loans business, delivering
281% loan volume growth and 91% revenue growth while reducing marketing
spend by 4%. This demonstrates the value of Wisr’s purpose-led unique
ecosystem, which allows the Company to scale efficiently.
1 1
Wisr_AnnualReport_FY19_20.10.indd 14
21/10/19 10:29 am
W IS R QUARTER ON QUARTER LOAN
OR IGI N AT ION GROWTH
Loan origination volume up 281% to $68.9m (FY18 $18.1m).
$108.8m
$21.9m
(unaudited)
$86.9m
$18.8m
Total loan originations (cumulative, to scale)
Quarterly loan originations (number)
$68.1m
$16.9m
$51.2m
$11.9m
$17.9m
$0.3m
$18.6m
$0.7m
$19.7m
$1.1m
$21.2m
$1.5m
$23.2m
$2.1m
$26.5m
$3.3m
$39.3m
$7.9m
$31.3m
$4.8m
Q1 FY17
Q2 FY17
Q3 FY17
Q4 FY17
Q1 FY18
Q2 FY18
Q3 FY18
Q4 FY18
Q1 FY19
Q2 FY19
Q3 FY19
Q4 FY19
EF FI CI E N CY AND MARGIN IMPROVEM EN T
FY17
FY18
FY19
FY17
FY18
FY19
Operating
Revenue
Marketing
Expenses
FY17
Loan Volume
FY18
FY19
0
1,000
2,000
3,000
0
20,000
40,000
60,000
$’000
$’000
Wisr_AnnualReport_FY19_20.10.indd 15
1 2
21/10/19 10:29 am
WI S R L IMIT ED | AN NUAL REPORT 2019
WI S R L IMIT ED | AN NUAL REPORT 2019
Wisr Financial Wellness Ecosystem.
In FY19 Wisr delivered the preliminary rollout of the Wisr Ecosystem, welcoming over 60,000 Australians through its
channels to 30 June 2019. The Wisr Ecosystem includes the launch of a number of individually powerful, and collectively
unique products aligned to financial wellness.
OVER 60,0 00 AUSTRALIANS EN TERED T HE WISR ECOSYST EM IN F Y1 9.
Personal Loans
WisrCredit
WisrApp Downloads
60,000
40,000
20,000
0
1 3
Wisr_AnnualReport_FY19_20.10.indd 16
21/10/19 10:29 am
Source: Wisr data August 2019 WISRCREDIT
Australia’s only credit score comparison site, WisrCredit,
attracted over 32,000 users since launching in Q2FY19, 40%
of whom are amongst the most creditworthy in Australia.
WISR A PP
Debt reduction tool Wisr App, launched in Q3FY19, garnered
over 25,000 downloads in the first months of launch. The
app rounds up everyday transactions to help pay down extra
debt, specifically targeting high-interest credit card debt.
WISR@WO RK
Workplace financial wellness program Wisr@Work launched
with Smartgroup (ASX:SIQ) as a founding partner.
The program addresses a leading cause of stress in the
workplace, stress related to personal finances1, and will be
rolled out more broadly in FY20.
Wisr_AnnualReport_FY19_20.10.indd 17
14
21/10/19 10:29 am
1PwC’s 8th annual Employee Financial Wellness Survey, PwC US, 2019 WI S R L IMIT ED | AN NUAL REPORT 2019
Recognition.
In FY19 Wisr was proud to be one of the
most recognised Fintechs in Australia with 16
nominations and 4 award wins.
15
Wisr_AnnualReport_FY19_20.10.indd 18
21/10/19 10:29 am
People & culture.
At Wisr, we strive to be one of
for all staff to be owners in the
Australia’s best workplaces. We are
business, aligning their contribution to
big believers in high performance
the benefits associated with Company
while still promoting a healthy work-
financial performance.
life balance. In FY19 we put in place a
number of key initiatives to execute on
T EAM B UILD ING
our vision to be renowned as a great
place to work.
FO CUS O N W ELL BEING
We offer Wisr staff a $500 annual
wellness reimbursement for any
worthwhile personal or professional
development initiative. There are no
boundaries on how staff can spend this
money.
FUN P ERKS
We have a massage chair, hanging
plants, arcade machine and comfy
lounge area. We also hold regular ping
pong competitions on Fridays in a fast-
paced King’s Court style game.
C AR E E R PATH S
We are flexible in helping staff grow
We hold fun quarterly team building
events outside of the office to bring
people closer together and create
better cross-team collaboration.
ST UDENT INTERNSHIPS
We’re committed to attracting and
developing the brightest and best
young minds in the country. In the
past year, we’ve had over 10 talented
students complete internships, with
some turning into full-time positions.
REFER R AL PR OGR AM
We know that some of the best hires
come from staff who refer people
to Wisr. It’s only right that this goes
rewarded with an attractive cash
referral bonus.
in their roles and we support our staff
K NO WLEDG E SHAR ING
in achieving their goals by offering
coaching, mentorship and a safe work
environment to experiment and try
new things.
We hold a fortnightly lunch-and-learn
series where staff members and guest
speakers share knowledge and skills to
help each other grow and learn.
STAFF SHARE P ROGR AM
All Wisr staff are eligible for the
Long Term Incentive (LTI) staff share
program. This provides the opportunity
Wisr_AnnualReport_FY19_20.10.indd 19
16
19
21/10/19 10:29 am
WI S R L IMIT ED | AN NUAL REPORT 2019
WI S R L IMIT ED | AN NUAL REPORT 2019
FY20 Outlook.
With an unwavering commitment to improving the financial wellness of all
Australians, Wisr is building a purpose-led business delivering a smarter, fairer
alternative to the millions of Australians who apply for a personal loan each year.
Fusing the best of emerging fintech with the operational reliability of a
traditional lender, Wisr will continue to deliver exceptional customer experiences
and a business model that is scalable, purpose-led, and built to deliver long term
value and profitability.
17
Wisr_AnnualReport_FY19_20.10.indd 20
21/10/19 10:29 am
K EY P RIORI TIES FOR FY20
ORIGI NATION GROWTH
•
Efficiently scale the core lending business and grow
originations.
• Maintain credit quality and improve loan unit economics
to deliver a greater share of revenue per loan for Wisr.
•
Launch Wisr Secured Vehicle Finance product to increase
total addressable market.
DEBT F UN DI NG
•
Diversification of debt funding models through new
structures and facilities, whilst maintaining capital-light
attributes.
FI NAN CIA L WELLNE SS E COSYST EM
•
•
•
•
Evolution of the Wisr experience to incorporate all
financial wellness touch-points.
Expansion of the Wisr App across Android and web
platforms.
Launch of Financial Wellness Platform through WisrCredit.
Building out the Wisr Ecosystem with the launch of
new features to deliver financial wellness outcomes for
customers.
PARTNERSHI P DI STRIB UTION
•
•
Activate existing strategic partnerships to deliver the
Wisr Ecosystem to millions of Australians.
On-board more strategic partners who share our vision to
deliver financial wellness to Australians.
PEOPLE
•
•
•
Hire more superstar talent to help deliver on Wisr’s vision.
Continue to bring diversity and inclusion throughout all
hiring areas.
Extend on the existing high performance culture.
Wisr_AnnualReport_FY19_20.10.indd 21
18
21/10/19 10:29 am
WI S R L IMIT ED | AN NUAL REPORT 2019
Board of Directors.
JOHN NANTES
EXECUTIVE CHAIRMAN
BA, U Melbourne; BComm, U Melbourne;
LLB, Deakin U; Dip. Fin Planning
C RAI G S WANGER
NON-EXECUTIVE DIRECTOR
BSC Agr. U. Sydney; MBA, FAICD
CHRIS W HI TEHEAD
NON-EXECUTIVE DIRECTOR
B.Sc (Chem), U Manchester; Advanced
Management, U. Penn-Wharton
Mr Nantes has over 23 years of
Mr Swanger has over 20 years of
Mr Whitehead has over 30 years of
experience in financial services. Prior
experience in financial services. He
experience in financial services &
to being the CEO of Adcock Private
was Executive Director of Macquarie
technology, across a range of roles.
Equity Pty Ltd, he was Group Head of
Global Investments, responsible for
He was formerly CEO of Credit Union
Financial Services at Crowe Horwath,
managing around $10bn in client
Australia Limited (2009 to 2015) and
which held over $10b in funds under
funds across Asia, North America &
CEO Retail Banking at BankWest (2001
management and was Australia’s
Australia. He has extensive board
to 2007). He has served as CIO at
largest SMSF provider with over 10,000
experience, including Macquarie Bank’s
BankWest and Advance and prior to
funds. He has also been the CEO of
major funds management entity,
this worked within the IT industry. He
Prescott Securities, a Stockbroking &
Macquarie Investment Management
has previously served as nonexecutive
Financial Planning business managing
Limited and a total of 15 internal
director for Cuscal Limited, St
over $2b in FUM, as well as the CEO of
and external boards since 2003. Since
Andrews Insurance Group, Unisys
WHK Eastern Victoria, an accounting
Macquarie, he has invested in and
West and a number of other financial
and specialist tax business. He has
advised a large portfolio of technology
services, technology & community
also held various Senior Executive roles
companies across finance, health and
organisations. Mr Whitehead is
in St George Bank and Colonial State
entertainment. More specifically in
also Managing Director of FINSIA,
Bank across retail, private banking
areas related to Wisr, he was Chairman
the Financial Services Institute of
and wealth management. Mr Nantes
of five of the largest debt listed
Australasia.
is also currently Executive Chairman
investment companies in Australia
& Responsible Manager for Cashwerkz
Limited (ASX:CWZ), a financial services
and New Zealand issued over the past
decade, and more recently worked with
company & Non-Executive Director
Australia’s largest corporate bond and
of Thinkxtra, a non-listed IOT public
securitization distribution specialists,
company.
1 9
is on the board of Xinja Bank and on
the Investment Committee for two
investors in SME financing in Australia
and Asia.
Wisr_AnnualReport_FY19_20.10.indd 22
21/10/19 10:29 am
Wisr_AnnualReport_FY19_20.10.indd 23
2 02 0
21/10/19 10:29 am
WI S R L IMIT ED | AN NUAL REPORT 2019
Financial report.
The Directors present their report, together with the financial
statements, on the consolidated entity (referred to hereafter as
the Group) consisting of Wisr Limited (referred to hereafter as the
Company or Parent Entity) and the entities controlled at the end
of, or during, the year ended 30 June 2019.
21
Wisr_AnnualReport_FY19_17.10.indd 24
21/10/19 6:37 pm
Directors’ report
For the year ended 30 June 2019
Directors’ report.
The directors present their report, together with the financial statements, on the consolidated entity (also referred to hereafter
as the Group) consisting of Wisr Limited (referred to hereafter as the Company or Parent Entity) and the entities it controlled
at the end of, or during, the year ended 30 June 2019.
Directors
The following persons were directors of the Company during the whole of the financial year and up to the date of this report,
unless otherwise stated:
Name
Position
John Nantes
Executive Chairman
Craig Swanger
Non-Executive Director
Chris Whitehead
Non-Executive Director
Particulars of each director’s experience and qualifications are set out later in this report.
Principal activities
During the financial year, the Group’s primary activity was writing personal loans for 3, 5 and 7 year maturities to Australian
consumers, then on-selling these loans to retail, wholesale and institutional investors.
Review of operations
Key Group highlights include:
Loan origination volume up 281% to $68.90m (FY18 $18.10m)
- Operating revenue up 91%, to $3.04m (FY18 $1.59m)
-
- Marketing expense down 4%, to $1.46m (FY18 $1.52m)
- The Group is well capitalised with $16.77m net assets (FY18 $4.66m) including $11.99m cash as at 30 June 2019
(FY18 $1.55m)
- Raised $15m, net of costs, in an oversubscribed equity raise in H2FY19
-
Launched Wisr App to promote more financial wellness and encourage debt reduction for Australians, with over
25,000 downloads in its first few months
Launched WisrCredit, the country’s only credit score comparison service with over 32,000 Australians comparing
their scores as at 30 June 2019
-
- Significantly extended the reach and potential of the Wisr Financial Wellness Ecosystem (“Wisr Ecosystem”)
through the launch of Wisr@Work and Wisr&Co B2B2C partnership models
- Strategic partnership announcements including Smartgroup, HCF and an industry super fund
- Progress towards evolving Wisr debt funding facilities with multiple parties
Scaling efficiently
Wisr continued the efficient scaling of its core personal loans business, delivering 281% loan volume growth and 91%
revenue growth despite reducing marketing spend by 4%. This demonstrates the value of Wisr’s purpose-led unique
ecosystem, which allows the Group to scale efficiently, whilst maintaining consistently strong credit quality.
Wisr underwriting performance
The Wisr credit engine continues to deliver consistent, but safe growth of the loan book in line with management
expectations.
Wisr continued its balance of long-term sustainable book growth delivered by market leading unit economics, operating
excellence and conservative loss rates. The Group’s strategy not to maximise loan book growth for short term volume at
the expense of unit economics is evident.
The Group recognises the opportunity is significant in the Australian market but maintains the strategy that wins over the
medium to long term is the most important and is focused on building the strongest platform foundation in the market for
long term sustainable, profitable success.
2 2
WI S R L IMIT ED | A NNUA L REPORT 2019
Directors’ report
For the year ended 30 June 2019
Review of operations (cont.)
Wisr Financial Wellness Ecosystem
In FY19 Wisr delivered the preliminary rollout of the Wisr Ecosystem, acquiring over 60,000 Australians to 30 June 2019
into its channels. The Wisr Ecosystem includes the launch of a number of individually powerful, and collectively unique
products aligned to financial wellness:
- Australia’s only credit score comparison site, WisrCredit, attracted over 32,000 users since launching in Q2FY19,
the majority of whom are amongst the most creditworthy in Australia.
- Debt reduction tool Wisr App, launched in Q3FY19, garnered over 25,000 downloads in the first months of launch.
The app rounds up everyday transactions to help pay down extra debt, specifically targeting high-interest credit
card debt.
- Workplace financial wellness program Wisr@Work launched with Smartgroup (ASX:SIQ) as a founding partner.
The program addresses the number one cause of stress in the workplace, stress related to personal finances, and
will be rolled out more broadly in the coming year.
Revenue
The Group increased operating revenue by 91% during the year to $3.04m from $1.59m in FY18. Revenue is
predominantly derived from loan establishment fees and management fees from servicing loans sold to third parties. The
growth in revenue was driven by the 281% increase in loan volume during the year to $68.90m from $18.10m in FY18. The
FY18 revenue figure included interest revenue from loans held on balance sheet prior to the commencement of wholesale
funding in October 2017 which inflates the FY18 revenue figure relative to FY19.
Expenses
Employee expenses, the majority line item for Wisr, increased 32% to $5.02m in FY19 from $3.80m in FY18 driven by an
increase in headcount from circa 33 to 52. A significant portion of growth in headcount has been driven by the build and
rollout of the Wisr Ecosystem, as the Group invests in building assets of long-term strategic value.
Marketing expense decreased 4% to $1.46m in FY19 from $1.52m in FY18 which highlights the continued effective scaling
of the business. Loan originations increased 281% during the same period. A material portion of the marketing spend was
also related to the rollout of the Wisr Ecosystem products as opposed to pure loan origination.
Customer processing costs of $1.17m are now being separately disclosed given their materiality (FY18 $0.21m). These
relate to the processing of loans, but a significant portion relates to the onboarding of customers into the Wisr Ecosystem.
Financial Position and Debt Funding
The Group is well capitalised with $16.77m net assets including $11.99m cash as at 30 June 2019 following an
oversubscribed $15m equity raise in H2FY19. The $11.99m cash excludes liquid loans held on balance sheet, $1.80m of
which were sold and realised as cash on 2 July 2019 as part of standard business operations.
Interest in shares
- Ordinary shares held: 2,773,619
and options as at 30
Performance rights held: 333,334
AASB 9 Financial Instruments, adopted for the first time in FY19, requires loan receivable provisions to be calculated on an
expected credit loss basis using a three-stage process. An expected credit loss provision of $235,646 was raised at 30
June 2019.
Today, Wisr utilises a predominantly capital light funding model through off balance sheet funding structures which has
allowed the business to scale from a capital allocation perspective. That means, capital has been used to fund company
growth and deliver on the Wisr Ecosystem strategy as opposed to supporting loan funding. This approach has been
successful and allowed Wisr to be a true platform play in the market.
Wisr is currently in advanced discussions with new funding partners and is pleased with the strong interest shown by major
bank funders to provide debt capital to Wisr’s fast growing loan book. The Group’s objectives in pursuing the new funding
opportunities are increasing debt capacity to fund our rapid growth, diversification of funding partners and therefore risk,
improved overall margins for Wisr and improvement in specific loan unit economics.
23
Directors’ report
For the year ended 30 June 2019
John Nantes
- Executive Chairman
Qualifications
Experience
- LLB, B.Comm, B.A., Dip Financial Planning
- Mr Nantes has over 23 years of experience in Financial Services. Prior to being the Chief
Executive Officer of Adcock Private Equity Pty Ltd, Mr Nantes was Group Head of Financial
Services at Crowe Horwath, which held over $10b in funds under management and was
Australia’s largest SMSF provider with over 10,000 funds. Mr Nantes has also been the CEO of
Prescott Securities, a Stockbroking and Financial Planning business managing over $2b in FUM,
as well as the CEO of WHK Eastern Victoria, an accounting and specialist tax business. Mr
Nantes has also held various Senior Executive roles in St George Bank and Colonial State Bank
across retail, private banking and wealth management. Mr Nantes is also currently Executive
Chairman and Responsible Manager for Cashwerkz Limited (ASX:CWZ), a financial services
company and Non-Executive Director of Thinkxtra, a non-listed IOT public company.
Interest in shares
- Ordinary shares held: 8,847,015
and options as at 30
Performance rights held: 4,000,000
Former directorships
- None
- Cashwerkz Limited (ASX: CWZ)
Craig Swanger
- Non-Executive Director
June 2019
(last 3 years)
Other current
directorships
Qualifications
Experience
- BCom (Hons), Graduate Diploma in Financial Markets
- Mr Swanger has over 20 years of experience in financial services. He was Executive Director of
Macquarie Global Investments, responsible for managing around $10bn in client funds across
Asia, North America and Australia.
Mr Swanger has extensive board experience, including Macquarie Bank’s major funds
management entity, Macquarie Investment Management Limited and a total of 15 internal external
boards since 2003. Since Macquarie, Mr Swanger has invested in and advised a large portfolio
of technology companies across finance, health and entertainment. More specifically in areas
related to Wisr, Mr Swanger was Chairman of 5 of the largest debt listed investment companies
in Australia and New Zealand issued over the past decade, and more recently worked with
Australia’s largest corporate bond and securitization distribution specialists, is on the board of
Xinja Bank and on the Investment Committee for two investors in SME financing in Australia and
Asia.
- None
Former directorships
- None
June 2019
(last 3 years)
Other current
directorships
Directors’ report
For the year ended 30 June 2019
Review of operations (cont.)
Wisr Financial Wellness Ecosystem
In FY19 Wisr delivered the preliminary rollout of the Wisr Ecosystem, acquiring over 60,000 Australians to 30 June 2019
into its channels. The Wisr Ecosystem includes the launch of a number of individually powerful, and collectively unique
products aligned to financial wellness:
- Australia’s only credit score comparison site, WisrCredit, attracted over 32,000 users since launching in Q2FY19,
the majority of whom are amongst the most creditworthy in Australia.
- Debt reduction tool Wisr App, launched in Q3FY19, garnered over 25,000 downloads in the first months of launch.
The app rounds up everyday transactions to help pay down extra debt, specifically targeting high-interest credit
card debt.
- Workplace financial wellness program Wisr@Work launched with Smartgroup (ASX:SIQ) as a founding partner.
The program addresses the number one cause of stress in the workplace, stress related to personal finances, and
will be rolled out more broadly in the coming year.
Revenue
Expenses
The Group increased operating revenue by 91% during the year to $3.04m from $1.59m in FY18. Revenue is
predominantly derived from loan establishment fees and management fees from servicing loans sold to third parties. The
growth in revenue was driven by the 281% increase in loan volume during the year to $68.90m from $18.10m in FY18. The
FY18 revenue figure included interest revenue from loans held on balance sheet prior to the commencement of wholesale
funding in October 2017 which inflates the FY18 revenue figure relative to FY19.
Employee expenses, the majority line item for Wisr, increased 32% to $5.02m in FY19 from $3.80m in FY18 driven by an
increase in headcount from circa 33 to 52. A significant portion of growth in headcount has been driven by the build and
rollout of the Wisr Ecosystem, as the Group invests in building assets of long-term strategic value.
Marketing expense decreased 4% to $1.46m in FY19 from $1.52m in FY18 which highlights the continued effective scaling
of the business. Loan originations increased 281% during the same period. A material portion of the marketing spend was
also related to the rollout of the Wisr Ecosystem products as opposed to pure loan origination.
Customer processing costs of $1.17m are now being separately disclosed given their materiality (FY18 $0.21m). These
relate to the processing of loans, but a significant portion relates to the onboarding of customers into the Wisr Ecosystem.
Financial Position and Debt Funding
Directors’ report
For the year ended 30 June 2019
John Nantes
- Executive Chairman
Qualifications
Experience
- LLB, B.Comm, B.A., Dip Financial Planning
- Mr Nantes has over 23 years of experience in Financial Services. Prior to being the Chief
Executive Officer of Adcock Private Equity Pty Ltd, Mr Nantes was Group Head of Financial
Services at Crowe Horwath, which held over $10b in funds under management and was
Australia’s largest SMSF provider with over 10,000 funds. Mr Nantes has also been the CEO of
Prescott Securities, a Stockbroking and Financial Planning business managing over $2b in FUM,
as well as the CEO of WHK Eastern Victoria, an accounting and specialist tax business. Mr
Nantes has also held various Senior Executive roles in St George Bank and Colonial State Bank
across retail, private banking and wealth management. Mr Nantes is also currently Executive
Chairman and Responsible Manager for Cashwerkz Limited (ASX:CWZ), a financial services
company and Non-Executive Director of Thinkxtra, a non-listed IOT public company.
Interest in shares
and options as at 30
June 2019
Former directorships
(last 3 years)
Other current
directorships
- Ordinary shares held: 8,847,015
Performance rights held: 4,000,000
- None
- Cashwerkz Limited (ASX: CWZ)
Craig Swanger
- Non-Executive Director
Qualifications
Experience
- BCom (Hons), Graduate Diploma in Financial Markets
- Mr Swanger has over 20 years of experience in financial services. He was Executive Director of
Macquarie Global Investments, responsible for managing around $10bn in client funds across
Asia, North America and Australia.
Mr Swanger has extensive board experience, including Macquarie Bank’s major funds
management entity, Macquarie Investment Management Limited and a total of 15 internal external
boards since 2003. Since Macquarie, Mr Swanger has invested in and advised a large portfolio
of technology companies across finance, health and entertainment. More specifically in areas
related to Wisr, Mr Swanger was Chairman of 5 of the largest debt listed investment companies
in Australia and New Zealand issued over the past decade, and more recently worked with
Australia’s largest corporate bond and securitization distribution specialists, is on the board of
Xinja Bank and on the Investment Committee for two investors in SME financing in Australia and
Asia.
The Group is well capitalised with $16.77m net assets including $11.99m cash as at 30 June 2019 following an
oversubscribed $15m equity raise in H2FY19. The $11.99m cash excludes liquid loans held on balance sheet, $1.80m of
which were sold and realised as cash on 2 July 2019 as part of standard business operations.
AASB 9 Financial Instruments, adopted for the first time in FY19, requires loan receivable provisions to be calculated on an
expected credit loss basis using a three-stage process. An expected credit loss provision of $235,646 was raised at 30
June 2019.
Interest in shares
and options as at 30
June 2019
Former directorships
(last 3 years)
Other current
directorships
- Ordinary shares held: 2,773,619
Performance rights held: 333,334
- None
- None
Today, Wisr utilises a predominantly capital light funding model through off balance sheet funding structures which has
allowed the business to scale from a capital allocation perspective. That means, capital has been used to fund company
growth and deliver on the Wisr Ecosystem strategy as opposed to supporting loan funding. This approach has been
successful and allowed Wisr to be a true platform play in the market.
Wisr is currently in advanced discussions with new funding partners and is pleased with the strong interest shown by major
bank funders to provide debt capital to Wisr’s fast growing loan book. The Group’s objectives in pursuing the new funding
opportunities are increasing debt capacity to fund our rapid growth, diversification of funding partners and therefore risk,
improved overall margins for Wisr and improvement in specific loan unit economics.
24
- BSc in Chemistry, Wharton Advanced Management Program, FAICD, F Fin
- Mr Whitehead has over 30 years’ experience in financial services and technology, across a wide
range of roles. He was formerly CEO of Credit Union Australia Limited (2009 to 2015) and CEO
Retail Banking at BankWest (2001 to 2007). He has served as CIO at BankWest and Advance
and prior to this worked within the IT industry. Chris has previously served as non-executive
director for Cuscal Limited, St Andrews Insurance Group, Unisys West and a number of other
financial services, technology and community organisations. Mr Whitehead is also Managing
Director of FINSIA, the Financial Services Institute of Australasia.
Interest in shares
- Ordinary shares held: 3,190,000
and options as at 30
Performance rights held: 1,500,000
June 2019
(last 3 years)
Other current
directorships
Former directorships
- None
- None
Information on company secretaries
Vanessa Chidrawi
Experience
- Vanessa is a highly experienced governance professional, having held leadership and executive
management roles in companies listed on ASX, TSX, Nasdaq and JSE over the past fifteen
years. She obtained degrees in law and commerce and then practised as an attorney for twelve
years before entering the corporate world.
Vanessa has acted as company secretary to a range of companies listed on ASX and TSX and
brings with her a wealth of experience in governance management, board advisory, corporate
structuring and capital raising in the listed company space.
Experience
- Miss Ho holds a Bachelor of Laws and Bachelor of Business (Accounting Major) degree and has
completed a Graduate Diploma in Applied Corporate Governance.
She is currently also Office Manager and Compliance Officer of the Group.
Miss Ho has also had over 3 years’ experience practicing as a solicitor in a private law firm in
Sydney.
WI S R L IMIT ED | A NNUA L REPORT 2019
Directors’ report
For the year ended 30 June 2019
Review of operations (cont.)
Directors’ report
For the year ended 30 June 2019
Chris Whitehead
- Non-Executive Director
The structures of the new facilities are diverse and will see Wisr benefit from a hybrid funding model while maintaining its
capital light attributes.
Qualifications
Experience
Outlook – FY20 and Beyond
With an unwavering commitment to improving the financial wellness of all Australians, Wisr is building a purpose-led business
delivering a smarter, fairer alternative to the millions of Australians who apply for a personal loan each year1.
Fusing the best of emerging fintech with the operational reliability of a traditional lender, Wisr will continue to deliver
exceptional customer experiences and a business model that is scalable and built to deliver long term profitability.
Key priorities for FY20 include:
Origination Growth
- Efficiently scale the core lending business and grow origination volumes
- Maintain credit quality and improve loan unit economics to deliver a greater share of revenue per loan to Wisr
-
Launch Wisr Secured Vehicle Finance product to increase total addressable market
Debt funding
- Diversification of debt funding models through new structures and facilities, whilst maintaining capital-light
attributes
Financial Wellness Ecosystem
- Evolution of the Wisr experience to incorporate all Wisr financial wellness touchpoints
- Expansion of the Wisr App across Android and web platforms
- Building on the Wisr Ecosystem with the launch of new features
-
Increasing customer numbers in the Wisr Ecosystem
Partnership Distribution
- Activate existing strategic partnerships to make the Wisr Ecosystem available to millions of Australians
- On-board more strategic partners who share Wisr’s vision to deliver financial wellness to Australians
May Ho
People
- Hire superstar talent to help deliver on Wisr’s vision
- Continue to bring diversity and inclusion throughout all hiring areas
- Extend on the existing high performance culture within the Company
1 Equifax Credit Pulse 2019 (published August 2019)
Dividends
There were no dividends declared or paid in the financial year.
Significant changes in state of affairs
There were no significant changes in the state of affairs of the Group during the financial year.
Events since the end of the financial year
In July 2019, the Group entered into a three-year agreement with SmartGroup Corporation Ltd (ASX:SIQ) (SmartGroup) to
partner on the distribution of Wisr’s ecosystem of financial wellness products.
Environmental matters
The Group is not subject to any significant environmental regulations under Australian Commonwealth or State law.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
company or any related entity against a liability incurred by the auditor. During the financial year, the company has not paid
a premium in respect of a contract to insure the auditor of the Company or any related entity.
Information on directors
The names and details of the Company's directors in office during the financial year and until the date of this report are
presented below.
25
Directors’ report
For the year ended 30 June 2019
Review of operations (cont.)
capital light attributes.
Outlook – FY20 and Beyond
Key priorities for FY20 include:
Origination Growth
The structures of the new facilities are diverse and will see Wisr benefit from a hybrid funding model while maintaining its
With an unwavering commitment to improving the financial wellness of all Australians, Wisr is building a purpose-led business
delivering a smarter, fairer alternative to the millions of Australians who apply for a personal loan each year1.
Fusing the best of emerging fintech with the operational reliability of a traditional lender, Wisr will continue to deliver
exceptional customer experiences and a business model that is scalable and built to deliver long term profitability.
- Efficiently scale the core lending business and grow origination volumes
- Maintain credit quality and improve loan unit economics to deliver a greater share of revenue per loan to Wisr
-
Launch Wisr Secured Vehicle Finance product to increase total addressable market
Directors’ report
For the year ended 30 June 2019
Chris Whitehead
- Non-Executive Director
Qualifications
Experience
Interest in shares
and options as at 30
June 2019
Former directorships
(last 3 years)
Other current
directorships
- BSc in Chemistry, Wharton Advanced Management Program, FAICD, F Fin
- Mr Whitehead has over 30 years’ experience in financial services and technology, across a wide
range of roles. He was formerly CEO of Credit Union Australia Limited (2009 to 2015) and CEO
Retail Banking at BankWest (2001 to 2007). He has served as CIO at BankWest and Advance
and prior to this worked within the IT industry. Chris has previously served as non-executive
director for Cuscal Limited, St Andrews Insurance Group, Unisys West and a number of other
financial services, technology and community organisations. Mr Whitehead is also Managing
Director of FINSIA, the Financial Services Institute of Australasia.
- Ordinary shares held: 3,190,000
Performance rights held: 1,500,000
- None
- None
Debt funding
attributes
- Diversification of debt funding models through new structures and facilities, whilst maintaining capital-light
Information on company secretaries
Vanessa Chidrawi
Experience
- Vanessa is a highly experienced governance professional, having held leadership and executive
management roles in companies listed on ASX, TSX, Nasdaq and JSE over the past fifteen
years. She obtained degrees in law and commerce and then practised as an attorney for twelve
years before entering the corporate world.
Partnership Distribution
- Activate existing strategic partnerships to make the Wisr Ecosystem available to millions of Australians
- On-board more strategic partners who share Wisr’s vision to deliver financial wellness to Australians
May Ho
Vanessa has acted as company secretary to a range of companies listed on ASX and TSX and
brings with her a wealth of experience in governance management, board advisory, corporate
structuring and capital raising in the listed company space.
Financial Wellness Ecosystem
- Evolution of the Wisr experience to incorporate all Wisr financial wellness touchpoints
- Expansion of the Wisr App across Android and web platforms
- Building on the Wisr Ecosystem with the launch of new features
-
Increasing customer numbers in the Wisr Ecosystem
Experience
- Miss Ho holds a Bachelor of Laws and Bachelor of Business (Accounting Major) degree and has
completed a Graduate Diploma in Applied Corporate Governance.
She is currently also Office Manager and Compliance Officer of the Group.
Miss Ho has also had over 3 years’ experience practicing as a solicitor in a private law firm in
Sydney.
2 6
People
- Hire superstar talent to help deliver on Wisr’s vision
- Continue to bring diversity and inclusion throughout all hiring areas
- Extend on the existing high performance culture within the Company
1 Equifax Credit Pulse 2019 (published August 2019)
Dividends
There were no dividends declared or paid in the financial year.
Significant changes in state of affairs
There were no significant changes in the state of affairs of the Group during the financial year.
Events since the end of the financial year
In July 2019, the Group entered into a three-year agreement with SmartGroup Corporation Ltd (ASX:SIQ) (SmartGroup) to
partner on the distribution of Wisr’s ecosystem of financial wellness products.
Environmental matters
The Group is not subject to any significant environmental regulations under Australian Commonwealth or State law.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
company or any related entity against a liability incurred by the auditor. During the financial year, the company has not paid
a premium in respect of a contract to insure the auditor of the Company or any related entity.
The names and details of the Company's directors in office during the financial year and until the date of this report are
Information on directors
presented below.
WI S R L IMIT ED | A NNUA L REPORT 2019
Directors’ report
For the year ended 30 June 2019
Indemnification and insurance of officers and auditors
The Group has entered into agreements with the following to indemnify them against liabilities incurred in their capacity as
an officer/director of the Group to the extent permitted by law:
John Nantes
-
- Craig Swanger
- Chris Whitehead
- Peter Beaumont
- Vanessa Chidrawi
Leanne Ralph
-
- Stephen Porges
- Campbell McComb
- Winton Willesee
- Andrew McKay
- Robert Parton
During the financial year, the Group incurred a premium to insure the directors and officers of the Group. Disclosure of the
nature of the liabilities covered and the amount of the premium payable is prohibited by the insurance contract.
Performance rights
The Group has not otherwise, during or since the end of the financial year, except to the extent permitted by law indemnified
or agreed to indemnify an officer or auditor of the company or any of its controlled entities against a liability incurred as such
an officer or auditor.
Meetings of directors
The number of meetings of the Company’s Board of Directors and of each board committee held during the year ended 30
June 2019, and the number of meetings attended by each director were:
Directors' Meetings
Remuneration and Nomination
Committee Meetings
Number eligible to
attend
14
14
14
Number attended
14
11
14
Number eligible to
attend
-
2
2
Number attended
-
2
2
John Nantes
Craig Swanger
Chris Whitehead
Directors’ report
For the year ended 30 June 2019
Non-audit services (cont.)
• 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 independence declaration
The auditor's independence declaration in accordance with section 307C of the Corporations Act 2001 for the year ended
30 June 2019 has been received and can be found within the financial report.
At the date of this report, the unissued ordinary shares of Wisr Limited under performance rights are as follows:
Effective Grant Date
Date of Expiry
Exercise Price
Number under Performance Rights
17 November 2016
17 November 2019
7 August 2017
7 August 2017
19 February 2019
19 February 2019
31 July 2019
31 July 2020
31 July 2020
31 July 2021
Nil
Nil
Nil
Nil
Nil
5,833,334
192,576
2,214,637
13,430,088
13,430,089
35,100,724
Performance rights holders do not have any rights to participate in any issues of shares or other interests of the Company
or any other entity.
There have been no performance rights granted over unissued shares or interests of any controlled entity within the Group
during or since the end of the reporting period.
For details of performance rights issued to directors and executives as remuneration, refer to the remuneration report.
Proceedings on behalf of the Company
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of
the Corporations Act 2001.
0BCorporate governance statement
Our Corporate Governance Statement is available on our website at: www.wisr.com.au/About/Policies.
Non-audit services
BDO East Coast Partnership were appointed Company auditor on 20 May 2015 and will continue in office in accordance with
section 327 of the Corporations Act 2001. The Company may decide to engage the auditor on assignments additional to
their statutory audit duties where the auditor’s expertise and experience with the Group are important.
The following fees were paid or payable to BDO East Coast Partnership for non-audit services provided during the year
ended 30 June 2019:
Accounting advice services
$
2,000
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 Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 19 to the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
• all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
27
The Group has entered into agreements with the following to indemnify them against liabilities incurred in their capacity as
• none of the services undermine the general principles relating to auditor independence as set out in APES 110
Directors’ report
For the year ended 30 June 2019
Non-audit services (cont.)
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 independence declaration
The auditor's independence declaration in accordance with section 307C of the Corporations Act 2001 for the year ended
30 June 2019 has been received and can be found within the financial report.
Performance rights
At the date of this report, the unissued ordinary shares of Wisr Limited under performance rights are as follows:
Effective Grant Date
Date of Expiry
Exercise Price
Number under Performance Rights
17 November 2016
17 November 2019
7 August 2017
7 August 2017
19 February 2019
19 February 2019
31 July 2019
31 July 2020
31 July 2020
31 July 2021
Nil
Nil
Nil
Nil
Nil
5,833,334
192,576
2,214,637
13,430,088
13,430,089
35,100,724
Performance rights holders do not have any rights to participate in any issues of shares or other interests of the Company
or any other entity.
There have been no performance rights granted over unissued shares or interests of any controlled entity within the Group
during or since the end of the reporting period.
For details of performance rights issued to directors and executives as remuneration, refer to the remuneration report.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of
0BCorporate governance statement
Our Corporate Governance Statement is available on our website at: www.wisr.com.au/About/Policies.
Directors’ report
For the year ended 30 June 2019
Indemnification and insurance of officers and auditors
an officer/director of the Group to the extent permitted by law:
- Stephen Porges
- Campbell McComb
- Winton Willesee
- Andrew McKay
- Robert Parton
-
John Nantes
- Craig Swanger
- Chris Whitehead
- Peter Beaumont
- Vanessa Chidrawi
-
Leanne Ralph
an officer or auditor.
Meetings of directors
During the financial year, the Group incurred a premium to insure the directors and officers of the Group. Disclosure of the
nature of the liabilities covered and the amount of the premium payable is prohibited by the insurance contract.
The Group has not otherwise, during or since the end of the financial year, except to the extent permitted by law indemnified
or agreed to indemnify an officer or auditor of the company or any of its controlled entities against a liability incurred as such
The number of meetings of the Company’s Board of Directors and of each board committee held during the year ended 30
June 2019, and the number of meetings attended by each director were:
Directors' Meetings
Remuneration and Nomination
Committee Meetings
Number eligible to
Number eligible to
attend
Number attended
attend
Number attended
14
14
14
14
11
14
-
2
2
-
2
2
John Nantes
Craig Swanger
Chris Whitehead
Proceedings on behalf of the Company
the Corporations Act 2001.
Non-audit services
BDO East Coast Partnership were appointed Company auditor on 20 May 2015 and will continue in office in accordance with
section 327 of the Corporations Act 2001. The Company may decide to engage the auditor on assignments additional to
their statutory audit duties where the auditor’s expertise and experience with the Group are important.
The following fees were paid or payable to BDO East Coast Partnership for non-audit services provided during the year
ended 30 June 2019:
Accounting advice services
$
2,000
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 Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 19 to the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
• all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
2 8
WI S R L IMIT ED | A NNUA L REPORT 2019
Directors’ report
For the year ended 30 June 2019
Remuneration report (audited)
The Directors present Wisr Limited’s 2019 remuneration report which sets out remuneration information for the Company’s
non-executive directors and other key management personnel.
Directors’ report
For the year ended 30 June 2019
Remuneration report (cont.)
b) Remuneration governance (cont.)
Company Performance
The report contains the following sections:
a) Key management personnel disclosed in this report
b) Remuneration governance
c) Service agreements
d) Details of remuneration
e) Equity instruments held by key management personnel
f) Movement in performance rights
g) Fair value of performance rights
a) Key management personnel disclosed in this report
The key management personnel are 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
Entity.
During the year ended 30 June 2019 and up to the date of this report, the following were classified as key management
personnel:
Name
Position
John Nantes
Executive Chairman
Craig Swanger
Non-Executive Director
Chris Whitehead
Non-Executive Director
Anthony Nantes
Chief Executive Officer
Andrew Goodwin
Chief Financial Officer
Mathew Lu
Chief Operating Officer
b) Remuneration governance
The Board ensures that executive reward satisfies the following key criteria for good reward governance practices:
-
-
align the interests of the CEO with those of the shareholders; and
ensure total remuneration is competitive by market standards.
-
-
-
-
-
competitiveness and reasonableness;
acceptability to shareholders;
performance linkage and alignment of executive compensation;
transparency; and
capital management.
The Company has structured an executive remuneration framework that is market competitive and complementary to the
reward strategy of the organisation. Aligning to shareholders’ interests, the framework:
-
-
-
has economic profit as a core component;
focuses on sustained growth in shareholder wealth as well as focusing the executive on key non-financial drivers of
value; and
attracts and retains high calibre executives who receive a base salary (which is based on factors such as length of
service and experience), superannuation, and performance incentives.
In accordance with best practice corporate governance, the structure of non-executive director and executive remuneration
is separate and distinct.
29
Given the growth nature of the Company, the lack of profit and other key financial variables as shown in the table below,
salary and the award of Performance Rights are made on the basis of each individual’s contribution to their specific role in
the Company to date and their expected importance to the future of the Company. Performance Rights were deemed to
provide an appropriate performance incentive for each individual as applicable.
Operating revenue
Loss
Dividend
Cash balance
Share price
30 June 2019
30 June 2018
30 June 2017
30 June 2016
3.043m
(7.731m)
$
nil
11.993m
$0.15
$
1.591m
(6.208m)
nil
1.549m
$0.02
$
1.160m
(5.432m)
nil
3.479m
$0.03
$
1.237m
(8.754m)
nil
1.265m
$0.05
Non-executive director remuneration was designed to attract and retain directors of the highest calibre, whilst incurring a
Non-executive directors
cost which is acceptable to shareholders.
The Constitution and the ASX Listing Rules specify that the aggregate remuneration 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 was adopted by a special resolution passed at the Annual General Meeting
held on 24 November 2006 when shareholders approved an aggregate remuneration of up to a maximum of $500,000 per
year.
The aggregate remuneration is reviewed annually. The remuneration for non-executive directors is comprised of cash,
superannuation contributions and performance rights.
Retirement allowances for non-executive directors
There is no scheme to provide retirement benefits, other than statutory superannuation, to non-executive directors.
CEO remuneration
The remuneration aspects of the contract for the CEO aims to reward the CEO with a level and mix of remuneration
commensurate with the position and responsibilities within the Company and so as to:
The Remuneration and Nominations Committee assesses the appropriateness of the nature and amount of remuneration of
the CEO on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring
maximum stakeholder benefit from the retention of a high quality CEO.
The level of fixed remuneration for the CEO is set so as to provide a base level of remuneration which is both appropriate to
the position and is competitive in the market. The CEO receives fixed remuneration by way of salary and company
Fixed remuneration
superannuation payments.
Other employees’ remuneration
The Company aims to reward employees with a level of remuneration commensurate with their position and responsibilities
within the Company and so as to ensure total remuneration is competitive by market standards. The CEO makes
assessments and recommendations to the Board regarding employee remuneration.
Retirement benefits
No executives have entered into employment agreements that provide additional retirement benefits.
Directors’ report
For the year ended 30 June 2019
Remuneration report (audited)
non-executive directors and other key management personnel.
The report contains the following sections:
a) Key management personnel disclosed in this report
b) Remuneration governance
c) Service agreements
d) Details of remuneration
e) Equity instruments held by key management personnel
f) Movement in performance rights
g) Fair value of performance rights
a) Key management personnel disclosed in this report
Entity.
personnel:
Name
Position
John Nantes
Executive Chairman
Craig Swanger
Non-Executive Director
Chris Whitehead
Non-Executive Director
Anthony Nantes
Chief Executive Officer
Andrew Goodwin
Chief Financial Officer
Mathew Lu
Chief Operating Officer
b) Remuneration governance
The key management personnel are 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
During the year ended 30 June 2019 and up to the date of this report, the following were classified as key management
The Directors present Wisr Limited’s 2019 remuneration report which sets out remuneration information for the Company’s
b) Remuneration governance (cont.)
Directors’ report
For the year ended 30 June 2019
Remuneration report (cont.)
Company Performance
Given the growth nature of the Company, the lack of profit and other key financial variables as shown in the table below,
salary and the award of Performance Rights are made on the basis of each individual’s contribution to their specific role in
the Company to date and their expected importance to the future of the Company. Performance Rights were deemed to
provide an appropriate performance incentive for each individual as applicable.
Operating revenue
Loss
Dividend
Cash balance
Share price
30 June 2019
$
3.043m
(7.731m)
nil
11.993m
$0.15
30 June 2018
$
1.591m
(6.208m)
nil
1.549m
$0.02
30 June 2017
$
1.160m
(5.432m)
nil
3.479m
$0.03
30 June 2016
$
1.237m
(8.754m)
nil
1.265m
$0.05
Non-executive directors
Non-executive director remuneration was designed to attract and retain directors of the highest calibre, whilst incurring a
cost which is acceptable to shareholders.
The Constitution and the ASX Listing Rules specify that the aggregate remuneration 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 was adopted by a special resolution passed at the Annual General Meeting
held on 24 November 2006 when shareholders approved an aggregate remuneration of up to a maximum of $500,000 per
year.
The aggregate remuneration is reviewed annually. The remuneration for non-executive directors is comprised of cash,
superannuation contributions and performance rights.
Retirement allowances for non-executive directors
There is no scheme to provide retirement benefits, other than statutory superannuation, to non-executive directors.
CEO remuneration
The remuneration aspects of the contract for the CEO aims to reward the CEO with a level and mix of remuneration
commensurate with the position and responsibilities within the Company and so as to:
The Board ensures that executive reward satisfies the following key criteria for good reward governance practices:
-
-
align the interests of the CEO with those of the shareholders; and
ensure total remuneration is competitive by market standards.
-
-
-
-
-
-
-
-
competitiveness and reasonableness;
acceptability to shareholders;
performance linkage and alignment of executive compensation;
transparency; and
capital management.
The Company has structured an executive remuneration framework that is market competitive and complementary to the
reward strategy of the organisation. Aligning to shareholders’ interests, the framework:
has economic profit as a core component;
value; and
focuses on sustained growth in shareholder wealth as well as focusing the executive on key non-financial drivers of
attracts and retains high calibre executives who receive a base salary (which is based on factors such as length of
service and experience), superannuation, and performance incentives.
In accordance with best practice corporate governance, the structure of non-executive director and executive remuneration
is separate and distinct.
The Remuneration and Nominations Committee assesses the appropriateness of the nature and amount of remuneration of
the CEO on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring
maximum stakeholder benefit from the retention of a high quality CEO.
Fixed remuneration
The level of fixed remuneration for the CEO is set so as to provide a base level of remuneration which is both appropriate to
the position and is competitive in the market. The CEO receives fixed remuneration by way of salary and company
superannuation payments.
Other employees’ remuneration
The Company aims to reward employees with a level of remuneration commensurate with their position and responsibilities
within the Company and so as to ensure total remuneration is competitive by market standards. The CEO makes
assessments and recommendations to the Board regarding employee remuneration.
Retirement benefits
No executives have entered into employment agreements that provide additional retirement benefits.
30
WI S R L IMIT ED | A NNUA L REPORT 2019
Directors’ report
For the year ended 30 June 2019
Remuneration report (cont.)
c) Service agreements
Directors’ report
For the year ended 30 June 2019
Remuneration report (cont.)
c) Service agreements (cont.)
The remuneration agreements of key management personnel as at 30 June 2019 are set out below:
KMP
Position held as at 30 June
2019 and any change during
the year
Contract details (duration and
termination)
Agreed gross cash salary
per annum incl.
superannuation
$
following table:
In addition to the above salary based compensation, the following key management personnel have been granted
performance rights to align their compensation with the performance of the Company, as reflected in its share price.
Performance rights are granted in tranches and are linked to increasing share prices over designated periods, as per the
Mr J Nantes
Executive Chairman
Mr C Swanger
Non-executive director
Mr C Whitehead Non-executive director
Mr A Nantes
Chief Executive Officer
Mr A Goodwin
Chief Financial Officer
Mr M Lu
Chief Operating Officer
No determined duration – subject to
retirement and re-election rules of
the Company’s constitution.
No notice required to terminate.
No determined duration – subject to
retirement and re-election rules of
the Company’s constitution.
No notice required to terminate.
No determined duration – subject to
retirement and re-election rules of
the Company’s constitution.
No notice required to terminate.
No fixed term.
6 months’ notice to terminate.
No fixed term.
3 months’ notice to terminate.
No fixed term.
1 months’ notice to terminate
100,000
60,000
60,000
273,750
240,900
200,000
KMP
Share price target
4 cents**
6 cents**
18 cents*
-
N/A
N/A
-
N/A
N/A
-
N/A
N/A
Mr J Nantes
a director after re-
Mr C Swanger
a director after re-
Mr C Whitehead
a director after re-
No. of performance rights
that will vest
Minimum period to remain
admission
Date performance rights
lapse if conditions not met
No. of performance rights
that will vest
Minimum period to remain
admission
Date performance rights
lapse if conditions not met
No. of performance rights
that will vest
Minimum period to remain
admission
Date performance rights
lapse if conditions not met
No. of performance rights
that will vest
Date employee must
remain employed with
Company
Date performance rights
lapse if conditions not met
-
N/A
N/A
-
N/A
N/A
-
N/A
N/A
4,000,000
24 months from 17
Nov 2016
17 Nov 2019
333,334
24 months from 17
Nov 2016
17 Nov 2019
1,500,000
24 months from 17
Nov 2016
17 Nov 2019
-
-
2,202,643
2,202,643
Mr M Lu
31 Jul 2020
31 Jul 2021
N/A
Measurement Date
31 Jul 2020
31 Jul 2021
31 Jul 2020
31 Jul 2021
N/A
* The Performance Rights will be issued and will vest in tranches based on the volume weighted average price at or above the hurdle price for at least ten
consecutive trading days. In addition, the term hurdle must be met.
** The Performance Rights will be issued and will vest in tranches based on the volume weighted average price being at or above the hurdle price for a 30-
day trading period prior to the Measurement Date. In addition, the employment hurdle must be met.
31
Mr J Nantes
Executive Chairman
Mr C Swanger
Non-executive director
Mr C Whitehead Non-executive director
Mr A Goodwin
Chief Financial Officer
Mr M Lu
Chief Operating Officer
No determined duration – subject to
retirement and re-election rules of
the Company’s constitution.
No notice required to terminate.
No determined duration – subject to
retirement and re-election rules of
the Company’s constitution.
No notice required to terminate.
No determined duration – subject to
retirement and re-election rules of
the Company’s constitution.
No notice required to terminate.
No fixed term.
6 months’ notice to terminate.
No fixed term.
3 months’ notice to terminate.
No fixed term.
1 months’ notice to terminate
100,000
60,000
60,000
273,750
240,900
200,000
Directors’ report
For the year ended 30 June 2019
Remuneration report (cont.)
c) Service agreements
Directors’ report
For the year ended 30 June 2019
Remuneration report (cont.)
c) Service agreements (cont.)
The remuneration agreements of key management personnel as at 30 June 2019 are set out below:
KMP
Position held as at 30 June
2019 and any change during
the year
Contract details (duration and
termination)
Agreed gross cash salary
per annum incl.
superannuation
$
In addition to the above salary based compensation, the following key management personnel have been granted
performance rights to align their compensation with the performance of the Company, as reflected in its share price.
Performance rights are granted in tranches and are linked to increasing share prices over designated periods, as per the
following table:
KMP
Share price target
4 cents**
6 cents**
18 cents*
Mr J Nantes
Mr A Nantes
Chief Executive Officer
Mr C Swanger
Mr C Whitehead
Mr M Lu
No. of performance rights
that will vest
Minimum period to remain
a director after re-
admission
Date performance rights
lapse if conditions not met
No. of performance rights
that will vest
Minimum period to remain
a director after re-
admission
Date performance rights
lapse if conditions not met
No. of performance rights
that will vest
Minimum period to remain
a director after re-
admission
Date performance rights
lapse if conditions not met
No. of performance rights
that will vest
Date employee must
remain employed with
Company
-
N/A
N/A
-
N/A
N/A
-
N/A
N/A
-
N/A
N/A
-
N/A
N/A
-
N/A
N/A
2,202,643
2,202,643
31 Jul 2020
31 Jul 2021
Measurement Date
31 Jul 2020
31 Jul 2021
Date performance rights
lapse if conditions not met
31 Jul 2020
31 Jul 2021
4,000,000
24 months from 17
Nov 2016
17 Nov 2019
333,334
24 months from 17
Nov 2016
17 Nov 2019
1,500,000
24 months from 17
Nov 2016
17 Nov 2019
-
N/A
-
N/A
* The Performance Rights will be issued and will vest in tranches based on the volume weighted average price at or above the hurdle price for at least ten
consecutive trading days. In addition, the term hurdle must be met.
** The Performance Rights will be issued and will vest in tranches based on the volume weighted average price being at or above the hurdle price for a 30-
day trading period prior to the Measurement Date. In addition, the employment hurdle must be met.
32
WI S R L IMIT ED | A NNUA L REPORT 2019
Directors’ report
For the year ended 30 June 2019
Remuneration report (cont.)
d) Details of remuneration
The following table of benefits and payment details, in respect to the financial year, represents the components of
remuneration for each member of the key management personnel of the Group:
Short term benefits
Cash salary,
fees & short-
term
compensated
absences
$
Short-
term
incentive
schemes
$
Directors (2019)
John Nantes
Craig Swanger
Chris Whitehead
Total:
Executives (2019)
Anthony Nantes
Andrew Goodwin
Mathew Lu
Total:
Directors (2018)
John Nantes
Craig Swanger
Chris Whitehead
Total:
91,324
54,795
54,795
200,914
250,000
220,000
182,648
652,648
91,324
54,795
54,795
200,914
-
-
-
-
-
-
-
-
-
-
-
-
Executives (2018)
Anthony Nantes
Andrew Goodwin
Mathew Lu
Peter Beaumont1
David Doust2
Total:
1) KMP up until 15 May 2018.
2) Retired 17 August 2017.
250,000
210,000
23,728
159,817
31,857
675,402
95,890
-
-
-
-
95,890
Post
employment
benefits
Long-term
benefits Share based payments
Super-
annuation
$
Long
service
leave
$
Performance
Rights
$
Shares
$
Total
$
% Performance
Related
8,676
5,205
5,205
19,086
-
-
-
-
1,017
85
382
1,484
-
-
-
-
101,017
60,085
60,382
221,484
21,771
20,900
17,352
60,023
1,247
863
185
2,295
- 495,446
- 229,918
768,464
471,681
5,755
- 205,940
5,755 725,364 1,446,085
8,676
5,205
5,205
19,086
32,860
19,950
2,254
15,183
2,160
72,407
-
-
-
-
-
-
-
-
-
-
9,493
791
3,615
13,899
-
-
-
-
109,493
60,791
63,615
233,899
- 255,079
- 209,082
-
337
-
633,829
439,032
25,982
238,456
34,017
337 527,280 1,371,316
63,119
-
-
1.01
0.14
0.63
64.47
48.74
2.79
8.67
1.30
5.68
56.81
47.62
-
26.61
-
Further details of performance-related remuneration paid or accrued for FY2019 in respect of specific key management
personnel are discussed below:
- Mr A Nantes
Subject to Board determination on outcomes achieved for FY2018, a share based long-term incentive equal to 1%
of the market capital value of the Company as at 30 June 2019, up to a maximum value of 200% of total remuneration
may also be payable to Mr Nantes in the next financial year. An amount of $495,446 has been accrued in respect
of this incentive for FY2019.
1. KMP up until 15 May 2018.
2. Retired 17 August 2017.
150,000
28,967,470
31,405,871
Total:
2,194,625
33
Directors’ report
For the year ended 30 June 2019
Remuneration report (cont.)
- Mr A Goodwin
Subject to the achievement of agreed KPI targets, a share based long-term incentive to a maximum value of
$220,000 for each of the financial years to 30 June 2019 may be awarded to Mr Goodwin in the next financial
year. An amount of $229,918 has been accrued in respect of this incentive in FY2019.
Other short-term and long-term incentives established in the year for the above KMPs are set out in Note 23 of the
financial report.
Performance conditions set for KMP short-term and long-term incentives (as discussed above and in Note 23 of the
financial report) align the KMP interests with the outcomes for shareholders, customers, and staff. The achievement of
these performance conditions support the growth of company value whilst providing KMPs with remuneration packages
that are above market rates relative to peer roles. Conversely, an underperformance of goals expose KMPs to a level of
financial risk where their remuneration packages become well below market rates.
e) Equity instruments held by key management personnel
The table below shows the number of ordinary shares in the Company held by key management personnel.
Balance at the
Received as
exercise of
Other changes
Balance at end
start of the year
compensation
options or rights
during the year
of the year
Received on
667,015
636,364
200,000
Total:
1,503,379
8,000,000
666,666
3,000,000
11,666,666
180,000
1,470,589
190,000
1,840,589
8,847,015
2,773,619
3,390,000
15,010,634
Directors (2019)
John Nantes
Craig Swanger
Chris Whitehead
Executives (2019)
Anthony Nantes
Andrew Goodwin
Mathew Lu
Directors (2018)
John Nantes
Craig Swanger
Chris Whitehead
Executives (2018)
Anthony Nantes
Andrew Goodwin
Mathew Lu
Peter Beaumont1
David Doust2
4,488,364
4,461,652
1,704,079
Total:
4,488,364
6,165,731
-
-
-
-
-
667,015
200,000
867,015
-
-
-
-
-
-
-
-
-
-
-
-
-
Total:
636,364
1,503,379
2,288,401
2,194,625
5,338
4,488,364
-
-
-
-
-
-
-
-
-
-
-
-
-
-
200,000
200,000
636,364
-
-
-
-
-
-
-
(8,352,747)
(8,347,409)
8,950,016
1,704,079
200,000
10,854,095
667,015
636,364
200,000
-
-
150,000
20,614,723
25,253,087
Directors’ report
For the year ended 30 June 2019
Remuneration report (cont.)
- Mr A Goodwin
Subject to the achievement of agreed KPI targets, a share based long-term incentive to a maximum value of
$220,000 for each of the financial years to 30 June 2019 may be awarded to Mr Goodwin in the next financial
year. An amount of $229,918 has been accrued in respect of this incentive in FY2019.
Other short-term and long-term incentives established in the year for the above KMPs are set out in Note 23 of the
financial report.
Performance conditions set for KMP short-term and long-term incentives (as discussed above and in Note 23 of the
financial report) align the KMP interests with the outcomes for shareholders, customers, and staff. The achievement of
these performance conditions support the growth of company value whilst providing KMPs with remuneration packages
that are above market rates relative to peer roles. Conversely, an underperformance of goals expose KMPs to a level of
financial risk where their remuneration packages become well below market rates.
e) Equity instruments held by key management personnel
The table below shows the number of ordinary shares in the Company held by key management personnel.
Balance at the
start of the year
Received as
compensation
Directors’ report
For the year ended 30 June 2019
Remuneration report (cont.)
d) Details of remuneration
The following table of benefits and payment details, in respect to the financial year, represents the components of
remuneration for each member of the key management personnel of the Group:
Post
employment
Long-term
Short term benefits
benefits
benefits Share based payments
Cash salary,
fees & short-
term
Short-
term
Long
compensated
incentive
Super-
service
Performance
absences
schemes
annuation
leave
Rights
Shares
Total
% Performance
$
$
$
$
$
$
$
Related
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,676
5,205
5,205
19,086
8,676
5,205
5,205
19,086
32,860
19,950
2,254
15,183
2,160
72,407
Total:
200,914
Directors (2019)
John Nantes
Craig Swanger
Chris Whitehead
Executives (2019)
Anthony Nantes
Andrew Goodwin
Mathew Lu
Total:
Directors (2018)
John Nantes
Craig Swanger
Chris Whitehead
Executives (2018)
Anthony Nantes
Andrew Goodwin
Mathew Lu
Peter Beaumont1
David Doust2
91,324
54,795
54,795
250,000
220,000
182,648
652,648
91,324
54,795
54,795
210,000
23,728
159,817
31,857
Total:
200,914
250,000
95,890
Total:
675,402
95,890
1) KMP up until 15 May 2018.
2) Retired 17 August 2017.
personnel are discussed below:
- Mr A Nantes
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,017
85
382
1,484
-
-
-
-
101,017
60,085
60,382
221,484
21,771
20,900
17,352
60,023
1,247
863
185
2,295
- 495,446
768,464
- 229,918
471,681
5,755
- 205,940
5,755 725,364 1,446,085
1.01
0.14
0.63
64.47
48.74
2.79
8.67
1.30
5.68
56.81
47.62
-
-
9,493
791
3,615
13,899
-
-
-
-
109,493
60,791
63,615
233,899
- 255,079
633,829
- 209,082
439,032
-
25,982
-
-
337
63,119
238,456
26.61
-
34,017
337 527,280 1,371,316
Further details of performance-related remuneration paid or accrued for FY2019 in respect of specific key management
Directors (2019)
John Nantes
Craig Swanger
Chris Whitehead
Executives (2019)
Anthony Nantes
Andrew Goodwin
Mathew Lu
Directors (2018)
John Nantes
Craig Swanger
Chris Whitehead
Executives (2018)
Anthony Nantes
Andrew Goodwin
Mathew Lu
Peter Beaumont1
David Doust2
Subject to Board determination on outcomes achieved for FY2018, a share based long-term incentive equal to 1%
of the market capital value of the Company as at 30 June 2019, up to a maximum value of 200% of total remuneration
may also be payable to Mr Nantes in the next financial year. An amount of $495,446 has been accrued in respect
of this incentive for FY2019.
1. KMP up until 15 May 2018.
2. Retired 17 August 2017.
667,015
636,364
200,000
1,503,379
4,488,364
-
-
4,488,364
667,015
-
200,000
867,015
2,288,401
-
-
150,000
28,967,470
31,405,871
Total:
Total:
Total:
Total:
Received on
exercise of
options or rights
-
-
-
-
8,000,000
666,666
3,000,000
11,666,666
4,461,652
1,704,079
-
6,165,731
-
-
-
-
2,194,625
-
-
-
-
2,194,625
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other changes
during the year
Balance at end
of the year
180,000
1,470,589
190,000
1,840,589
8,847,015
2,773,619
3,390,000
15,010,634
-
-
200,000
200,000
8,950,016
1,704,079
200,000
10,854,095
-
636,364
-
636,364
667,015
636,364
200,000
1,503,379
5,338
-
-
-
(8,352,747)
(8,347,409)
4,488,364
-
-
150,000
20,614,723
25,253,087
34
WI S R L IMIT ED | A NNUA L REPORT 2019
Directors’ report
For the year ended 30 June 2019
Remuneration report (cont.)
f) Movement in performance rights
The table below provides the number of performance rights held by Key Management Personnel at 30 June 2018 and 30
June 2019.
Rights
Rights
Rights
held at 30
granted
exercised
June 2018
during
FY19
during
FY19
Rights
lapsed
during
FY19
Rights
Vested as at 30 June
held as at
30 June
2019
2019 *
Name
Number
Number
Number
Number
Number
Number
Directors
J Nantes *
12,000,000
C Swanger *
1,000,000
C Whitehead *
6,000,000
Total:
19,000,000
Executives
A Nantes
A Goodwin
M Lu
Total:
-
-
-
-
-
-
-
-
-
-
4,405,286
4,405,286
t
o
N
l
e
b
a
s
i
c
r
e
x
e
l
e
b
a
s
i
c
r
e
x
E
d
e
t
s
e
V
%
d
e
t
i
e
f
r
o
F
%
l
e
b
a
l
i
a
v
A
%
g
n
i
t
s
e
v
r
o
f
(8,000,000)
(666,666)
-
-
4,000,000
4,000,000
333,334
333,334
(3,000,000)
(1,500,000)
1,500,000
1,500,000
(11,666,666)
(1,500,000)
5,833,334
5,833,334
-
-
-
-
-
-
-
-
-
-
-
-
4,405,286
4,405,286
4,405,286
4,405,286
100
100
75
-
-
-
-
-
25
-
-
-
-
-
-
-
-
100
-
-
-
-
-
-
-
-
* These Performance Rights will automatically vest and exercise for nil consideration on satisfaction of the Vesting Conditions.
The Vesting Conditions for the Performance Rights are:
1. The holder being a director/employee of the Company as at the relevant vesting determination dates specified in table g) below; and
2. The relevant volume weighted average price (VWAP) of the Company’s ordinary shares is at least the price specified in table g) below for a period
of 10 consecutive trading days.
Directors’ report
For the year ended 30 June 2019
Remuneration report (cont.)
g) Fair value of performance rights
Performance Rights granted
Number
Effective
grant date
Vesting Conditions
VWAP Share
Expiry date
Price condition
determination
($)
Fair Value
per right at
effective
grant date
($)
Earliest
vesting
date
Directors (2019) **
J Nantes **
4,000,000
17 Nov 2016
0.001326
17 Nov 2018
0.18
17 Nov 2019
C Swanger **
333,334
17 Nov 2016
0.001326
17 Nov 2018
0.18
17 Nov 2019
C Whitehead **
1,500,000
17 Nov 2016
0.001326
17 Nov 2018
0.18
17 Nov 2019
Executives (2019)
A Nantes
A Goodwin
M Lu
-
-
-
-
-
-
-
-
-
-
-
-
2,202,643
19 Feb 2019
2,202,643
19 Feb 2019
0.00764
0.00489
31 Jul 2020
31 Jul 2021
0.04
0.06
31 Jul 2020
31 Jul 2021
** These Performance Rights will automatically vest and exercise for nil consideration on satisfaction of the Vesting Conditions.
The Vesting Conditions for the Performance Rights are:
1. The holder being a director/employee of the Company as at the relevant vesting determination dates specified in the table; and
2.
The relevant volume weighted average price (VWAP) of the Company’s ordinary shares is at least the price specified in the table for a period of
10 consecutive trading days.
The total fair value of above rights at grant date issued to key management personnel is $7,239. The value of rights granted
during the period differs to the expense recognised as part of each key management person’s remuneration in table d) above
because this value is the grant date fair value calculated in accordance with AASB 2 Share Based Payment.
This concludes the remuneration report, which has been audited.
This report is made in accordance with a resolution of directors.
...............................................................
John Nantes
Director
Sydney
30 September 2019
35
Directors’ report
For the year ended 30 June 2019
Remuneration report (cont.)
f) Movement in performance rights
June 2019.
The table below provides the number of performance rights held by Key Management Personnel at 30 June 2018 and 30
Rights
Rights
Rights
Rights
Vested as at 30 June
held at 30
granted
exercised
June 2018
during
FY19
during
FY19
held as at
30 June
2019
2019 *
Rights
lapsed
during
FY19
Number
t
o
N
e
l
b
a
s
i
c
r
e
x
e
e
l
b
a
s
i
c
r
e
x
E
d
e
t
s
e
V
%
d
e
t
i
e
f
r
o
F
%
e
l
b
a
l
i
a
v
A
%
g
n
i
t
s
e
v
r
o
f
Directors’ report
For the year ended 30 June 2019
Remuneration report (cont.)
g) Fair value of performance rights
Performance Rights granted
Number
Effective
grant date
Vesting Conditions
Earliest
vesting
determination
date
VWAP Share
Price condition
($)
Expiry date
Fair Value
per right at
effective
grant date
($)
4,000,000
17 Nov 2016
0.001326
17 Nov 2018
0.18
17 Nov 2019
Directors (2019) **
J Nantes **
Name
Number
Number
Number
Number
Number
C Swanger **
333,334
17 Nov 2016
0.001326
17 Nov 2018
0.18
17 Nov 2019
C Whitehead **
1,500,000
17 Nov 2016
0.001326
17 Nov 2018
0.18
17 Nov 2019
Directors
J Nantes *
12,000,000
C Swanger *
1,000,000
(8,000,000)
(666,666)
4,000,000
4,000,000
333,334
333,334
C Whitehead *
6,000,000
(3,000,000)
(1,500,000)
1,500,000
1,500,000
Total:
19,000,000
(11,666,666)
(1,500,000)
5,833,334
5,833,334
Executives
A Nantes
A Goodwin
M Lu
Total:
-
-
-
-
4,405,286
4,405,286
-
-
-
-
-
-
-
-
4,405,286
4,405,286
4,405,286
4,405,286
-
-
-
-
-
-
-
-
-
-
-
-
100
100
75
-
-
-
-
-
25
-
-
-
-
-
-
-
-
100
-
-
-
-
-
-
-
-
* These Performance Rights will automatically vest and exercise for nil consideration on satisfaction of the Vesting Conditions.
The Vesting Conditions for the Performance Rights are:
1. The holder being a director/employee of the Company as at the relevant vesting determination dates specified in table g) below; and
2. The relevant volume weighted average price (VWAP) of the Company’s ordinary shares is at least the price specified in table g) below for a period
of 10 consecutive trading days.
Executives (2019)
A Nantes
A Goodwin
M Lu
-
-
-
-
-
-
-
-
-
-
-
-
2,202,643
2,202,643
19 Feb 2019
19 Feb 2019
0.00764
0.00489
31 Jul 2020
31 Jul 2021
0.04
0.06
31 Jul 2020
31 Jul 2021
** These Performance Rights will automatically vest and exercise for nil consideration on satisfaction of the Vesting Conditions.
The Vesting Conditions for the Performance Rights are:
1. The holder being a director/employee of the Company as at the relevant vesting determination dates specified in the table; and
2.
The relevant volume weighted average price (VWAP) of the Company’s ordinary shares is at least the price specified in the table for a period of
10 consecutive trading days.
The total fair value of above rights at grant date issued to key management personnel is $7,239. The value of rights granted
during the period differs to the expense recognised as part of each key management person’s remuneration in table d) above
because this value is the grant date fair value calculated in accordance with AASB 2 Share Based Payment.
This concludes the remuneration report, which has been audited.
This report is made in accordance with a resolution of directors.
...............................................................
John Nantes
Director
Sydney
30 September 2019
36
WI S R L IMIT ED | A NNUA L REPORT 2019
Auditor’s independence declaration
For the year ended 30 June 2019
Auditor’s Independence Declaration.
Financial report
For the year ended 30 June 2019
Statement of Profit or Loss and Other Comprehensive Income.
Revenue
Other income
Expenses
Employee benefits expense
Depreciation and amortisation expense
Marketing expense
Customer processing costs
Loan asset impairments and write-offs
Property lease costs
Other expenses
Finance costs
Share based payment expense
Loss before income tax
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) for the year
Loss for the year is attributable to:
Owners of Wisr Limited
Total comprehensive (loss) for the year is attributable to:
Owners of Wisr Limited
Note
Consolidated
2019
$
2018
$
2
3
3,042,587
253,791
1,590,690
231,514
(5,024,824)
(3,801,276)
(68,306)
(1,464,841)
(1,172,658)
(235,521)
(166,920)
(23,922)
(1,521,198)
(208,783)
(79,962)
(129,320)
(1,649,986)
(1,159,972)
(148,311)
(41,596)
(1,096,053)
(1,064,041)
(7,731,042)
(6,207,866)
-
-
(7,731,042)
(6,207,866)
30
4
18
-
-
(7,731,042)
(6,207,866)
(7,731,042)
(6,207,866)
(7,731,042)
(6,207,866)
Earnings per share for loss attributable to the owners of Wisr Limited
Cents
Cents
Basic earnings per share
Diluted earnings per share
27
27
(1.34)
(1.34)
(1.39)
(1.39)
37
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
Auditor’s independence declaration
For the year ended 30 June 2019
Auditor’s Independence Declaration.
Financial report
For the year ended 30 June 2019
Statement of Profit or Loss and Other Comprehensive Income.
Revenue
Other income
Expenses
Employee benefits expense
Depreciation and amortisation expense
Marketing expense
Customer processing costs
Loan asset impairments and write-offs
Property lease costs
Other expenses
Finance costs
Share based payment expense
Loss before income tax
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) for the year
Loss for the year is attributable to:
Owners of Wisr Limited
Total comprehensive (loss) for the year is attributable to:
Owners of Wisr Limited
Note
Consolidated
2019
$
2018
$
2
3
3,042,587
253,791
1,590,690
231,514
(5,024,824)
(68,306)
(1,464,841)
(1,172,658)
(235,521)
(166,920)
(1,649,986)
(148,311)
(1,096,053)
(3,801,276)
(23,922)
(1,521,198)
(208,783)
(79,962)
(129,320)
(1,159,972)
(41,596)
(1,064,041)
(7,731,042)
(6,207,866)
-
-
(7,731,042)
(6,207,866)
30
4
18
-
-
(7,731,042)
(6,207,866)
(7,731,042)
(6,207,866)
(7,731,042)
(6,207,866)
Earnings per share for loss attributable to the owners of Wisr Limited
Cents
Cents
Basic earnings per share
Diluted earnings per share
27
27
(1.34)
(1.34)
(1.39)
(1.39)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
38
WI S R L IMIT ED | A NNUA L REPORT 2019
Financial report
As at 30 June 2019
Statement of Financial Position.
Assets
Current assets
Cash and cash equivalents
Loan receivables
Trade and other receivables
Other assets
Total current assets
Non-current assets
Loan receivables
Property, plant and equipment
Intangible assets
Other financial assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Employee benefits
Convertible notes
Secured note
Total current liabilities
Non-Current Liabilities
Employee benefits
Secured note
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Financial report
For the year ended 30 June 2019
Statement of Changes in Equity.
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive (loss) for the year
Transactions with owners in their capacity as owners:
Note
Consolidated
2019
$
2018
$
Consolidated
Balance at 1 July 2017
Issued
capital
$
Accumulated
Reserves
losses
$
$
Total
equity
$
28,604,725
1,394,508 (20,796,796)
9,202,437
5
6
7
8
11,993,165
4,909,991
440,829
550,597
17,894,582
1,548,888
1,609,247
273,563
553,458
3,985,156
6
9
11
10
1,587,362
15,222
579,608
518,000
2,700,192
2,073,686
41,168
-
518,000
2,632,854
20,594,774
6,618,010
12
13
14
14
13
14
1,441,879
335,222
-
225,000
2,002,101
1,346,009
240,389
373,000
-
1,959,398
44,840
1,775,000
1,819,840
-
-
3,821,941
1,959,398
(6,207,866)
(6,207,866)
-
-
-
(6,207,866)
(6,207,866)
-
-
-
-
-
600,000
1,064,041
Issue of share capital (no cost associated with raise)
600,000
Share based payment expense during the period
119,255
944,786
Transfer of reserve to accumulated losses
-
(439,243)
439,243
-
Balance at 30 June 2018
29,323,980
1,900,051 (26,565,419)
4,658,612
Consolidated
Balance at 1 July 2018
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive (loss) for the year
Transactions with owners in their capacity as owners:
Issued
capital
$
Accumulated
Reserves
losses
$
$
Total
equity
$
29,323,980
1,900,051 (26,565,419)
4,658,612
-
-
(7,731,042)
(7,731,042)
-
-
-
(7,731,042)
(7,731,042)
Issue of share capital
Costs of raising capital
19,695,500
(1,143,877)
-
155,000
-
19,695,500
(988,877)
Share based payment expense during the period (Note 16 (b))
-
1,096,053
-
1,096,053
-
-
-
-
-
-
16,772,833
4,658,612
of options
476,790
(476,790)
-
Transfer of share based reserve to issued capital on exercise
15
16
16
48,412,004 29,323,980
1,895,421
1,900,051
(33,534,592) (26,565,419)
16,772,833
4,658,612
Transfer of gain on funder forgiveness of options obligation to
accumulated losses
-
(325,612)
325,612
Issue of shares as a result of exercise of options for
consideration
59,611
(17,024)
-
42,587
Transfer of reserve to accumulated losses
-
(436,257)
436,257
-
-
-
Balance at 30 June 2019
48,412,004
1,895,421 (33,534,592)
16,772,833
39
The above statement of financial position should be read in conjunction with the accompanying notes
The above statement of changes in equity should be read in conjunction with the accompanying notes
Financial report
As at 30 June 2019
Statement of Financial Position.
Financial report
For the year ended 30 June 2019
Statement of Changes in Equity.
Assets
Current assets
Cash and cash equivalents
Loan receivables
Trade and other receivables
Other assets
Total current assets
Non-current assets
Loan receivables
Property, plant and equipment
Intangible assets
Other financial assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Employee benefits
Convertible notes
Secured note
Total current liabilities
Non-Current Liabilities
Employee benefits
Secured note
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
5
6
7
8
6
9
11
10
12
13
14
14
13
14
11,993,165
4,909,991
440,829
550,597
1,548,888
1,609,247
273,563
553,458
1,587,362
2,073,686
15,222
579,608
518,000
2,700,192
41,168
-
518,000
2,632,854
20,594,774
6,618,010
1,441,879
335,222
-
225,000
2,002,101
1,346,009
240,389
373,000
1,959,398
44,840
1,775,000
1,819,840
-
-
-
Note
Consolidated
2019
$
2018
$
Consolidated
Balance at 1 July 2017
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total
equity
$
28,604,725
1,394,508 (20,796,796)
9,202,437
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive (loss) for the year
-
-
-
-
-
(6,207,866)
-
(6,207,866)
-
-
(6,207,866)
(6,207,866)
17,894,582
3,985,156
Transactions with owners in their capacity as owners:
Issue of share capital (no cost associated with raise)
600,000
-
Share based payment expense during the period
119,255
944,786
-
-
600,000
1,064,041
Transfer of reserve to accumulated losses
-
(439,243)
439,243
-
Balance at 30 June 2018
29,323,980
1,900,051 (26,565,419)
4,658,612
Consolidated
Balance at 1 July 2018
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive (loss) for the year
Transactions with owners in their capacity as owners:
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total
equity
$
29,323,980
1,900,051 (26,565,419)
4,658,612
-
-
-
-
-
(7,731,042)
-
(7,731,042)
-
-
(7,731,042)
(7,731,042)
Issue of share capital
Costs of raising capital
19,695,500
(1,143,877)
-
155,000
-
19,695,500
(988,877)
3,821,941
1,959,398
Share based payment expense during the period (Note 16 (b))
-
1,096,053
-
1,096,053
16,772,833
4,658,612
15
16
16
48,412,004 29,323,980
1,895,421
1,900,051
(33,534,592) (26,565,419)
16,772,833
4,658,612
Transfer of share based reserve to issued capital on exercise
of options
476,790
(476,790)
-
Transfer of gain on funder forgiveness of options obligation to
accumulated losses
-
(325,612)
325,612
-
-
Issue of shares as a result of exercise of options for
consideration
59,611
(17,024)
-
42,587
Transfer of reserve to accumulated losses
-
(436,257)
436,257
-
Balance at 30 June 2019
48,412,004
1,895,421 (33,534,592)
16,772,833
The above statement of financial position should be read in conjunction with the accompanying notes
The above statement of changes in equity should be read in conjunction with the accompanying notes
4 0
WI S R L IMIT ED | A NNUA L REPORT 2019
Financial report
For the year ended 30 June 2019
Statement of Cash Flows.
Cash flows from operating activities
Net of lending and repayments
Net proceeds from sale of loans
Payments to suppliers and employees
Interest received
Management fees received
Interest and other finance costs paid
Proceeds from R&D tax incentive
Consolidated
2019
$
2018
$
(66,172,289) (14,885,009)
65,263,962 18,859,853
(9,122,201) (6,297,173)
(2,322,329)
(10,030,528)
42,877
48,066
660,159 168,191
(43,601)
(138,452)
-
234,025
Net cash used in operating activities
26
(9,226,730)
(2,154,862)
International Financial Reporting Standards as issued by the International Accounting Standards Board. The Group is a for-
Cash flows from investing activities
Payments for investments
Payments for development of technology assets
-
(621,968)
(18,000)
-
otherwise.
Net cash used in investing activities
(621,968)
(18,000)
financial liabilities.
Cash flows from financing activities
Proceeds from issue of shares
Costs of raising capital paid
Repayment of convertible notes
Proceeds from issuance of secured note
Transaction costs related to loans and borrowings
19,739,501
(988,877)
(327,074)
2,000,000
(130,575)
600,000
-
(299,000)
-
(58,550)
the current financial year.
i) Going concern
Net cash provided by financing activities
20,292,975
242,450
These financial statements have been prepared under a going concern basis.
Net increase / (decrease) increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
10,444,277
1,548,888
(1,930,412)
3,479,300
The Directors believe that the Group will have sufficient resources to pay its debts and meet its commitments for at
least the next 12 months from the date of this financial report due to the Group having:
-
strong cash reserves boosted by the successful capital raise it completed in H2FY2019; and
- wholesale funding arrangements for future loan originations, both of which support its operational commitments.
Cash and cash equivalents at the end of the financial year
11,993,165
1,548,888
ii) New and revised accounting standards and interpretations
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
The consolidated financial statements of Wisr Limited (the Company) for the year ended 30 June 2019 was authorised for
issue in accordance with a resolution of the directors on 30 September 2019. The directors have the power to amend and
revise the financial report.
The consolidated financial statements and notes represent those of Wisr Limited and its controlled entities (the Group).
Wisr Limited is a company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the
Australian Stock Exchange.
Note 1. Summary of significant accounting policies
a.
Basis of preparation
These general purpose consolidated financial statements have been prepared in accordance with the Corporations Act 2001,
Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board and in compliance with
profit entity for financial reporting purposes under Australian Accounting Standards. Material accounting policies adopted in
the preparation of these financial statements are presented below and have been consistently applied unless stated
Except for cash flow information, the financial statements have been prepared on an accrual basis and are based on historical
costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and
Where required by Accounting Standards and/or for improved presentation purposes, comparative figures have been
adjusted to conform with changes in presentation for the current year.
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for
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.
AASB 9 Financial Instruments
The Group has adopted AASB 9 from 1 July 2018. The standard introduced new classification and measurement
models for financial assets. A financial asset shall be measured at amortised cost if it is held within a business model
whose objective is to hold assets in order to collect contractual cash flows which arise on specified dates and that
are solely principal and interest. A debt investment shall be measured at fair value through other comprehensive
income if it is held within a business model whose objective is to both hold assets in order to collect contractual cash
flows which arise on specified dates that are solely principal and interest as well as selling the asset on the basis of
its fair value. All other financial assets are classified and measured at fair value through profit or loss unless the entity
makes an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not
held-for-trading or contingent consideration recognised in a business combination) in other comprehensive income
('OCI'). Despite these requirements, a financial asset may be irrevocably designated as measured at fair value
through profit or loss to reduce the effect of, or eliminate, an accounting mismatch. For financial liabilities designated
at fair value through profit or loss, the standard requires the portion of the change in fair value that relates to the
entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge
accounting requirements are intended to more closely align the accounting treatment with the risk management
activities of the entity.
41
The above statement of cash flows should be read in conjunction with the accompanying notes
Net cash used in operating activities
26
(9,226,730)
(2,154,862)
Financial report
For the year ended 30 June 2019
Statement of Cash Flows.
Cash flows from operating activities
Net of lending and repayments
Net proceeds from sale of loans
Payments to suppliers and employees
Interest received
Management fees received
Interest and other finance costs paid
Proceeds from R&D tax incentive
Cash flows from investing activities
Payments for investments
Payments for development of technology assets
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Costs of raising capital paid
Repayment of convertible notes
Proceeds from issuance of secured note
Transaction costs related to loans and borrowings
Net cash provided by financing activities
Consolidated
2019
$
2018
$
(66,172,289) (14,885,009)
65,263,962 18,859,853
(9,122,201) (6,297,173)
(10,030,528)
(2,322,329)
48,066
42,877
660,159 168,191
(138,452)
234,025
(43,601)
-
-
(18,000)
(621,968)
-
(621,968)
(18,000)
19,739,501
600,000
(988,877)
(327,074)
2,000,000
(130,575)
-
-
(299,000)
(58,550)
20,292,975
242,450
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
The consolidated financial statements of Wisr Limited (the Company) for the year ended 30 June 2019 was authorised for
issue in accordance with a resolution of the directors on 30 September 2019. The directors have the power to amend and
revise the financial report.
The consolidated financial statements and notes represent those of Wisr Limited and its controlled entities (the Group).
Wisr Limited is a company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the
Australian Stock Exchange.
Note 1. Summary of significant accounting policies
a.
Basis of preparation
These general purpose consolidated financial statements have been prepared in accordance with the Corporations Act 2001,
Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board and in compliance with
International Financial Reporting Standards as issued by the International Accounting Standards Board. The Group is a for-
profit entity for financial reporting purposes under Australian Accounting Standards. Material accounting policies adopted in
the preparation of these financial statements are presented below and have been consistently applied unless stated
otherwise.
Except for cash flow information, the financial statements have been prepared on an accrual basis and are based on historical
costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and
financial liabilities.
Where required by Accounting Standards and/or for improved presentation purposes, comparative figures have been
adjusted to conform with changes in presentation for the current year.
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for
the current financial year.
i) Going concern
These financial statements have been prepared under a going concern basis.
The Directors believe that the Group will have sufficient resources to pay its debts and meet its commitments for at
least the next 12 months from the date of this financial report due to the Group having:
-
- wholesale funding arrangements for future loan originations, both of which support its operational commitments.
strong cash reserves boosted by the successful capital raise it completed in H2FY2019; and
Net increase / (decrease) increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
10,444,277
(1,930,412)
1,548,888
3,479,300
Cash and cash equivalents at the end of the financial year
11,993,165
1,548,888
ii) New and revised accounting standards and interpretations
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.
AASB 9 Financial Instruments
The Group has adopted AASB 9 from 1 July 2018. The standard introduced new classification and measurement
models for financial assets. A financial asset shall be measured at amortised cost if it is held within a business model
whose objective is to hold assets in order to collect contractual cash flows which arise on specified dates and that
are solely principal and interest. A debt investment shall be measured at fair value through other comprehensive
income if it is held within a business model whose objective is to both hold assets in order to collect contractual cash
flows which arise on specified dates that are solely principal and interest as well as selling the asset on the basis of
its fair value. All other financial assets are classified and measured at fair value through profit or loss unless the entity
makes an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not
held-for-trading or contingent consideration recognised in a business combination) in other comprehensive income
('OCI'). Despite these requirements, a financial asset may be irrevocably designated as measured at fair value
through profit or loss to reduce the effect of, or eliminate, an accounting mismatch. For financial liabilities designated
at fair value through profit or loss, the standard requires the portion of the change in fair value that relates to the
entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge
accounting requirements are intended to more closely align the accounting treatment with the risk management
activities of the entity.
The above statement of cash flows should be read in conjunction with the accompanying notes
4 2
WI S R L IMIT ED | A NNUA L REPORT 2019
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
b. Principles of consolidation
AASB 9 Financial Instruments (cont.)
New impairment requirements use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment is
measured using a 12-month ECL method unless the credit risk on a financial instrument has increased significantly
since initial recognition in which case the lifetime ECL method is adopted. If stage 3 ECL is recognised for an asset,
the interest income is recognised on the loan balance net of impairment. For receivables, a simplified approach to
measuring expected credit losses using a lifetime expected loss allowance is available.
The impact on the financial performance and position of the Group from the adoption of this Accounting Standards
is detailed in Note 6.
AASB 15 Revenue from Contracts with Customers
The Group has adopted AASB 15 from 1 July 2018. The standard provides a single comprehensive model for
revenue recognition. The core principle of the standard is that an entity shall recognise revenue to depict the transfer
of promised goods or services to customers at an amount that reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services. The standard introduced a new contract-based revenue
recognition model with a measurement approach that is based on an allocation of the transaction price. This is
described further in the accounting policies below. Credit risk is presented separately as an expense rather than
adjusted against revenue. Contracts with customers are presented in an entity's statement of financial position as a
contract liability, a contract asset, or a receivable, depending on the relationship between the entity's performance
and the customer's payment. Customer acquisition costs and costs to fulfil a contract can, subject to certain criteria,
be capitalised as an asset and amortised over the contract period.
The consolidated financial statements incorporate the assets and liabilities of the Company and all subsidiaries as at 30 June
2019, and the results of all subsidiaries for the year then ended.
Subsidiaries are all those entities over which the Company has the power to govern the financial and operating policies,
generally accompanying a shareholding of 100% of the voting rights. The existence and effect of potential voting rights that
are currently exercisable or convertible are considered when assessing whether the Company controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de consolidated from
the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by
Investments in subsidiaries are accounted for at cost in the individual financial statements of the Company, less any
the Group.
impairment charges.
c. Foreign currency transactions and balances
The impact on the financial performance and position of the consolidated entity from the adoption of this Accounting
Standards is detailed in Note 2.
Functional and presentation currency
iii) New accounting standards for application in future periods
Discussed below are certain new accounting standards and interpretations which have been published but are not
mandatory for the 30 June 2019 reporting period and have not been early adopted by the Group. The Group has not
yet fully assessed the potential impact of these new accounting standards and interpretations.
AASB 16: Leases (applicable to annual reporting periods beginning on or after 1 January 2019)
When effective, this Standard will replace the current accounting requirements applicable to leases in AASB 117:
Leases and related Interpretations. AASB 16 introduces a single lessee accounting model that eliminates the
requirement for leases to be classified as operating or finance leases.
d. Impairment of assets
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (the functional currency). The consolidated financial statements are
presented in Australian dollars, which is Wisr Limited’s functional and presentation currency.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised
through profit or loss, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.
The main changes introduced by the new Standard include:
-
-
-
-
recognition of a right-to-use asset and liability for all leases (excluding short-term leases with less than 12 months
of tenure and leases relating to low-value assets);
depreciation of right-to-use assets in line with AASB 116: Property, Plant and Equipment in profit or loss and
unwinding of the liability in principal and interest components;
variable lease payments that depend on an index or a rate are included in the initial measurement of the lease
liability using the index or rate at the commencement date;
by applying a practical expedient, a lessee is permitted to elect not to separate non-lease components and
instead account for all components as a lease; and
additional disclosure requirements.
-
The transitional provisions of AASB 16 allow a lessee to either retrospectively apply the Standard to comparatives
in line with AASB 108 or recognise the cumulative effect of retrospective application as an adjustment to opening
equity on the date of initial application.
The directors anticipate that the adoption of AASB 16 will not have a material impact on the Group’s financial
statements.
Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not
be recoverable, and as a minimum, annually. An impairment loss is recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and
value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-
generating units). Non-financial assets, other than goodwill, that suffered an impairment are reviewed for possible reversal
of the impairment at the end of each reporting period.
e. Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial
measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at
either amortised cost or fair value depending on their classification. Classification is determined based on both the business
model within which such assets are held and the contractual cash flow characteristics of the financial asset unless, an
accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the
Group has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of
recovering part or all of a financial asset, it's carrying value is written off.
43
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
AASB 9 Financial Instruments (cont.)
New impairment requirements use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment is
measured using a 12-month ECL method unless the credit risk on a financial instrument has increased significantly
since initial recognition in which case the lifetime ECL method is adopted. If stage 3 ECL is recognised for an asset,
the interest income is recognised on the loan balance net of impairment. For receivables, a simplified approach to
measuring expected credit losses using a lifetime expected loss allowance is available.
The impact on the financial performance and position of the Group from the adoption of this Accounting Standards
is detailed in Note 6.
AASB 15 Revenue from Contracts with Customers
The Group has adopted AASB 15 from 1 July 2018. The standard provides a single comprehensive model for
revenue recognition. The core principle of the standard is that an entity shall recognise revenue to depict the transfer
of promised goods or services to customers at an amount that reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services. The standard introduced a new contract-based revenue
recognition model with a measurement approach that is based on an allocation of the transaction price. This is
described further in the accounting policies below. Credit risk is presented separately as an expense rather than
adjusted against revenue. Contracts with customers are presented in an entity's statement of financial position as a
contract liability, a contract asset, or a receivable, depending on the relationship between the entity's performance
and the customer's payment. Customer acquisition costs and costs to fulfil a contract can, subject to certain criteria,
be capitalised as an asset and amortised over the contract period.
The impact on the financial performance and position of the consolidated entity from the adoption of this Accounting
Standards is detailed in Note 2.
iii) New accounting standards for application in future periods
Discussed below are certain new accounting standards and interpretations which have been published but are not
mandatory for the 30 June 2019 reporting period and have not been early adopted by the Group. The Group has not
yet fully assessed the potential impact of these new accounting standards and interpretations.
AASB 16: Leases (applicable to annual reporting periods beginning on or after 1 January 2019)
When effective, this Standard will replace the current accounting requirements applicable to leases in AASB 117:
Leases and related Interpretations. AASB 16 introduces a single lessee accounting model that eliminates the
requirement for leases to be classified as operating or finance leases.
The main changes introduced by the new Standard include:
recognition of a right-to-use asset and liability for all leases (excluding short-term leases with less than 12 months
of tenure and leases relating to low-value assets);
depreciation of right-to-use assets in line with AASB 116: Property, Plant and Equipment in profit or loss and
unwinding of the liability in principal and interest components;
variable lease payments that depend on an index or a rate are included in the initial measurement of the lease
liability using the index or rate at the commencement date;
by applying a practical expedient, a lessee is permitted to elect not to separate non-lease components and
instead account for all components as a lease; and
additional disclosure requirements.
The transitional provisions of AASB 16 allow a lessee to either retrospectively apply the Standard to comparatives
in line with AASB 108 or recognise the cumulative effect of retrospective application as an adjustment to opening
equity on the date of initial application.
statements.
The directors anticipate that the adoption of AASB 16 will not have a material impact on the Group’s financial
-
-
-
-
-
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
b. Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of the Company and all subsidiaries as at 30 June
2019, and the results of all subsidiaries for the year then ended.
Subsidiaries are all those entities over which the Company has the power to govern the financial and operating policies,
generally accompanying a shareholding of 100% of the voting rights. The existence and effect of potential voting rights that
are currently exercisable or convertible are considered when assessing whether the Company controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de consolidated from
the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by
the Group.
Investments in subsidiaries are accounted for at cost in the individual financial statements of the Company, less any
impairment charges.
c. Foreign currency transactions and balances
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (the functional currency). The consolidated financial statements are
presented in Australian dollars, which is Wisr Limited’s functional and presentation currency.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised
through profit or loss, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.
d. Impairment of assets
Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not
be recoverable, and as a minimum, annually. An impairment loss is recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and
value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-
generating units). Non-financial assets, other than goodwill, that suffered an impairment are reviewed for possible reversal
of the impairment at the end of each reporting period.
e. Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial
measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at
either amortised cost or fair value depending on their classification. Classification is determined based on both the business
model within which such assets are held and the contractual cash flow characteristics of the financial asset unless, an
accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the
Group has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of
recovering part or all of a financial asset, it's carrying value is written off.
4 4
WI S R L IMIT ED | A NNUA L REPORT 2019
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
e. Investments and other financial assets (cont.)
h. Fair value measurements (cont.)
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as
financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading, where
they are acquired for the purpose of selling in the short-term with an intention of making a profit, or a derivative; or (ii)
designated as such upon initial recognition where permitted. Fair value movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the consolidated entity
intends to hold for the foreseeable future and has irrevocably elected to classify them as such upon initial recognition.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are either measured
at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon
the consolidated entity's assessment at the end of each reporting period as to whether the financial instrument's credit risk
has increased significantly since initial recognition, based on reasonable and supportable information that is available, without
undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit
loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a
default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is
determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit
losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
to the financial statements.
recognition:
For financial assets measured at fair value through other comprehensive income, the loss allowance is recognised within
other comprehensive income. In all other cases, the loss allowance is recognised in profit or loss.
f. Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not
recoverable from the Australian Taxation Office. In these circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position
are shown inclusive of GST. The net amount of GST recoverable from, or payable to, the taxation authority is included with
other receivables or payables in the statement of financial position.
g. Critical accounting estimates and judgments
The Directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge
and best available current information. Estimates assume a reasonable expectation of future events and are based on current
trends and economic data, obtained both externally and within the Group.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the
lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected
credit loss rate for each group. These assumptions include historical collection rates along with a macroeconomic overlay.
h. Fair value measurements
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending
on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly (ie
unforced) transaction between independent, knowledgeable and willing market participants at the measurement date.
following valuation approaches:
45
As fair value is a market-based measure, the closest equivalent observable market pricing information is used to determine
fair value. Adjustments to market values may be made having regard to the characteristics of the specific asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation
techniques. These valuation techniques maximise, to the extent possible, the use of observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or liability (ie the market
with the greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the most
advantageous market available to the entity at the end of the reporting period (ie the market that maximises the receipts from
the sale of the asset or minimises the payments made to transfer the liability, after taking into account transaction costs and
transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant’s ability to use the asset in
its highest and best use or to sell it to another market participant that would use the asset in its highest and best use.
The fair value of liabilities and the entity’s own equity instruments (excluding those related to share-based payment
arrangements) may be valued, where there is no observable market price in relation to the transfer of such financial
instruments, by reference to observable market information where such instruments are held as assets. Where this
information is not available, other valuation techniques are adopted and, where significant, are detailed in the respective note
The Group measures and recognises the following assets and liabilities at fair value on a recurring basis after initial
- Financial assets at fair value through profit & loss (investment)
- Financial assets at FV through OCI (loan receivables)
The Group does not subsequently measure any liabilities at fair value on a non-recurring basis.
(a) Fair Value Hierarchy
AASB 13: Fair Value Measurement requires the disclosure of fair value information by level of the fair value hierarchy, which
categorises fair value measurements into one of three possible levels based on the lowest level that an input that is significant
to the measurement can be categorised into as follows:
Level 1
Level 2
Level 3
Measurements based on quoted prices
Measurements based on inputs other
Measurements based on unobservable
(unadjusted) in active markets for
than quoted prices included in Level 1
inputs for the asset or liability.
identical assets or liabilities that the
that are observable for the asset or
entity can access at the measurement
liability, either directly or indirectly.
date.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation
techniques. These valuation techniques maximise, to the extent possible, the use of observable market data. If all significant
inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one or more significant
inputs are not based on observable market data, the asset or liability is included in Level 3.
Valuation techniques
The Group selects a valuation technique that is appropriate in the circumstances and for which sufficient data is available to
measure fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics of the
asset or liability being measured. The valuation techniques selected by the Group are consistent with one or more of the
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
e. Investments and other financial assets (cont.)
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as
financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading, where
they are acquired for the purpose of selling in the short-term with an intention of making a profit, or a derivative; or (ii)
designated as such upon initial recognition where permitted. Fair value movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the consolidated entity
intends to hold for the foreseeable future and has irrevocably elected to classify them as such upon initial recognition.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are either measured
at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon
the consolidated entity's assessment at the end of each reporting period as to whether the financial instrument's credit risk
has increased significantly since initial recognition, based on reasonable and supportable information that is available, without
undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit
loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a
default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is
determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit
losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is recognised within
other comprehensive income. In all other cases, the loss allowance is recognised in profit or loss.
f. Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not
recoverable from the Australian Taxation Office. In these circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position
are shown inclusive of GST. The net amount of GST recoverable from, or payable to, the taxation authority is included with
other receivables or payables in the statement of financial position.
g. Critical accounting estimates and judgments
The Directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge
and best available current information. Estimates assume a reasonable expectation of future events and are based on current
trends and economic data, obtained both externally and within the Group.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the
lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected
credit loss rate for each group. These assumptions include historical collection rates along with a macroeconomic overlay.
h. Fair value measurements
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending
on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly (ie
unforced) transaction between independent, knowledgeable and willing market participants at the measurement date.
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
h. Fair value measurements (cont.)
As fair value is a market-based measure, the closest equivalent observable market pricing information is used to determine
fair value. Adjustments to market values may be made having regard to the characteristics of the specific asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation
techniques. These valuation techniques maximise, to the extent possible, the use of observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or liability (ie the market
with the greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the most
advantageous market available to the entity at the end of the reporting period (ie the market that maximises the receipts from
the sale of the asset or minimises the payments made to transfer the liability, after taking into account transaction costs and
transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant’s ability to use the asset in
its highest and best use or to sell it to another market participant that would use the asset in its highest and best use.
The fair value of liabilities and the entity’s own equity instruments (excluding those related to share-based payment
arrangements) may be valued, where there is no observable market price in relation to the transfer of such financial
instruments, by reference to observable market information where such instruments are held as assets. Where this
information is not available, other valuation techniques are adopted and, where significant, are detailed in the respective note
to the financial statements.
The Group measures and recognises the following assets and liabilities at fair value on a recurring basis after initial
recognition:
- Financial assets at fair value through profit & loss (investment)
- Financial assets at FV through OCI (loan receivables)
The Group does not subsequently measure any liabilities at fair value on a non-recurring basis.
(a) Fair Value Hierarchy
AASB 13: Fair Value Measurement requires the disclosure of fair value information by level of the fair value hierarchy, which
categorises fair value measurements into one of three possible levels based on the lowest level that an input that is significant
to the measurement can be categorised into as follows:
Level 1
Measurements based on quoted prices
(unadjusted) in active markets for
identical assets or liabilities that the
entity can access at the measurement
date.
Level 2
Measurements based on inputs other
than quoted prices included in Level 1
that are observable for the asset or
liability, either directly or indirectly.
Level 3
Measurements based on unobservable
inputs for the asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation
techniques. These valuation techniques maximise, to the extent possible, the use of observable market data. If all significant
inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one or more significant
inputs are not based on observable market data, the asset or liability is included in Level 3.
Valuation techniques
The Group selects a valuation technique that is appropriate in the circumstances and for which sufficient data is available to
measure fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics of the
asset or liability being measured. The valuation techniques selected by the Group are consistent with one or more of the
following valuation approaches:
4 6
WI S R L IMIT ED | A NNUA L REPORT 2019
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
h. Fair value measurements (cont.)
Note 2. Revenue
- Market approach: valuation techniques that use prices and other relevant information generated by market
transactions for identical or similar assets or liabilities.
-
Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a
single discounted present value.
- Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service
capacity.
Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing the
asset or liability, including assumptions about risks. When selecting a valuation technique, the Group gives priority to those
techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs hat are developed
using market data (such as publicly available information on actual transactions) and reflect the assumptions that buyers and
sellers would generally use when pricing the asset or liability are considered observable, whereas inputs for which market
data is not available and therefore are developed using the best information available about such assumptions are considered
unobservable.
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Interest income on financial assets
Effective interest income on financial assets
Other revenue from financial assets
Interest on cash
Interest from investments
Total income from investments (financial assets)
Revenue from contracts with customers
Management fees
Total revenue from contracts with customers
Total revenue
Interest income on financial assets
i)
Interest income
Consolidated
2019
$
2018
$
1,917,670
242,047
6,611
37,982
1,129,821
211,070
6,282
37,102
2,204,310
1,384,275
838,277
838,277
206,415
206,415
3,042,587
1,590,690
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can
be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating
the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective
interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to the net carrying amount of the financial asset.
Loan establishment fees are deferred and recognised as an adjustment to the effective interest rate as these fees
are an integral part of generating an involvement with the resulting financial instrument.
Government grants revenue is recognised at fair value when there is reasonable assurance that the grant will be
received and the grant conditions will be met.
ii) Loan establishment fees
iii) Government grants
Revenue from contracts with customers
Management fees
Management fees are earned through the contracts with funders (customers) which entitle the consolidated entity to
fees as a result of satisfying the performance obligation, being the monthly management of the associated loan
portfolio. Revenue is recognised on an over-time basis. The allocation of the transaction price is calculated as a
percentage of the loan balance managed by the consolidated entity on a monthly basis, being the satisfaction of the
performance obligation.
Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected to
be entitled in exchange for transferring services to a customer.
The consolidated entity invoice on a monthly basis which aligns to the recognition criteria noted above and as a
result, there is no recognition of contract assets or liabilities required.
47
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
h. Fair value measurements (cont.)
Note 2. Revenue
- Market approach: valuation techniques that use prices and other relevant information generated by market
transactions for identical or similar assets or liabilities.
-
Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a
single discounted present value.
- Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service
capacity.
Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing the
asset or liability, including assumptions about risks. When selecting a valuation technique, the Group gives priority to those
techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs hat are developed
using market data (such as publicly available information on actual transactions) and reflect the assumptions that buyers and
sellers would generally use when pricing the asset or liability are considered observable, whereas inputs for which market
data is not available and therefore are developed using the best information available about such assumptions are considered
unobservable.
Interest income on financial assets
Effective interest income on financial assets
Other revenue from financial assets
Interest on cash
Interest from investments
Total income from investments (financial assets)
Revenue from contracts with customers
Management fees
Total revenue from contracts with customers
Total revenue
Consolidated
2019
$
2018
$
1,917,670
242,047
6,611
37,982
2,204,310
1,129,821
211,070
6,282
37,102
1,384,275
838,277
838,277
206,415
206,415
3,042,587
1,590,690
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can
be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
Interest income on financial assets
i)
Interest income
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating
the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective
interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to the net carrying amount of the financial asset.
ii) Loan establishment fees
Loan establishment fees are deferred and recognised as an adjustment to the effective interest rate as these fees
are an integral part of generating an involvement with the resulting financial instrument.
iii) Government grants
Government grants revenue is recognised at fair value when there is reasonable assurance that the grant will be
received and the grant conditions will be met.
Revenue from contracts with customers
Management fees
Management fees are earned through the contracts with funders (customers) which entitle the consolidated entity to
fees as a result of satisfying the performance obligation, being the monthly management of the associated loan
portfolio. Revenue is recognised on an over-time basis. The allocation of the transaction price is calculated as a
percentage of the loan balance managed by the consolidated entity on a monthly basis, being the satisfaction of the
performance obligation.
Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected to
be entitled in exchange for transferring services to a customer.
The consolidated entity invoice on a monthly basis which aligns to the recognition criteria noted above and as a
result, there is no recognition of contract assets or liabilities required.
4 8
WI S R L IMIT ED | A NNUA L REPORT 2019
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 3. Other income
R&D tax incentive
Rental income
Gain on loan purchase
Gain on sale of loan assets
Other income
Note 4. Expenses
Losses from ordinary activities before income tax includes the following other specific
expenses:
Property lease costs
Superannuation expense
Legal expenses
Write off of loan assets
Provision for expected credit losses expense / (provision writeback)
Bad debt expense
Loss on sale of loan assets
Note 5. Cash and cash equivalents
Cash at bank
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 6. Loan receivables
Current
Loan receivables
Less: allowance for expected credit losses
Non-current
Loan receivables
Less: allowance for expected credit losses
Consolidated
2019
$
229,840
-
12,345
11,606
2018
$
223,264
8,250
-
-
253,791
231,514
Consolidated
2019
$
2018
$
Consolidated
2019
$
2018
$
4,993,162
(83,171)
4,909,991
1,696,600
(87,353)
1,609,247
1,739,837
(152,475)
1,587,362
2,190,060
(116,374)
2,073,686
166,920
129,320
through other comprehensive income.
386,159
298,277
Reclassification
40,041
29,745
An immaterial re-classification of accrued interest from trade and other payables to loan receivables has been processed
during the current period and reflected in the comparative figures. The prior year amount reclassified amounted to $52,679.
31,918
149,860
53,743
235,521
(107,598)
187,560
-
79,962
Consolidated
2019
$
11,993,165
2018
$
1,548,888
Reconciliation to cash and cash equivalents at the end of the financial year
The above figures are reconciled to cash and cash equivalents at the end of the financial
year as shown in the statement of cash flows as follows:
Balance as above
Balance as per statement of cash flows
11,993,165
11,993,165
1,548,888
1,548,888
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short term highly liquid
investments with original maturities of three months or less, and bank overdrafts.
Loan receivables of $2,453,225 (2018: $2,818,962) (net of impairments) are classified as financial assets subsequently
measured at amortised cost.
Loan receivables of $4,044,128 (2018: $863,971) are classified as financial assets subsequently measured at fair value
Loan receivables comprise of personal loans between $5,000 to $50,000 using risk-based pricing with interest rates
starting from 8.50% to 19.95%. The personal loans are repayable within the range of 3 to 7 years.
The fair value of the loan receivables is considered to approximate the carrying value.
Initial adoption of AASB 9 Financial Instruments
The Company has adopted AASB 9 from 1 July 2018. Although the Company ran an off-balance sheet loan funding model
during FY2019, there are still some loan receivables retained on balance sheet, as noted above. These are measured at
amortised cost using the effective interest method.
The following table explains the original and new measurement for the Groups financial assets as at 1 July 2018.
Financial assets
Original classification
New classification
Change in carrying
Cash and cash equivalents
Loan and receivables
Loan receivables
Loan and receivables
Amortised cost
Amortised cost
Bank deposits
Loan and receivables
Amortised cost
AASB 9 uses an expected credit loss methodology based on a three-stage approach:
amount
No AASB 9 impact
Impact on impairment as
detailed below
No AASB 9 impact
Stage 1 – Loan receivables which have not had a significant increase in credit risk since initial recognition. For these
assets, 12 months expected credit losses are recognised.
Stage 2 – Loan receivables which have had a significant increase in credit risk since initial recognition but do not have
objective evidence of impairment. For these assets, lifetime expected credit losses are recognised.
Stage 3 – Loan receivables which have objective evidence of impairment. For these assets, lifetime expected credit losses
are recognised. However, the Company writes off loan receivables at this stage.
49
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 3. Other income
R&D tax incentive
Rental income
Gain on loan purchase
Gain on sale of loan assets
Other income
Note 4. Expenses
expenses:
Property lease costs
Superannuation expense
Legal expenses
Write off of loan assets
Bad debt expense
Loss on sale of loan assets
Note 5. Cash and cash equivalents
Cash at bank
Provision for expected credit losses expense / (provision writeback)
Losses from ordinary activities before income tax includes the following other specific
Consolidated
2019
229,840
$
-
12,345
11,606
2018
$
223,264
8,250
-
-
253,791
231,514
Consolidated
2019
$
2018
$
166,920
129,320
386,159
298,277
40,041
29,745
31,918
149,860
53,743
235,521
(107,598)
187,560
-
79,962
Reconciliation to cash and cash equivalents at the end of the financial year
The above figures are reconciled to cash and cash equivalents at the end of the financial
year as shown in the statement of cash flows as follows:
Balance as above
Balance as per statement of cash flows
11,993,165
11,993,165
1,548,888
1,548,888
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short term highly liquid
investments with original maturities of three months or less, and bank overdrafts.
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 6. Loan receivables
Current
Loan receivables
Less: allowance for expected credit losses
Non-current
Loan receivables
Less: allowance for expected credit losses
Consolidated
2019
$
2018
$
4,993,162
(83,171)
4,909,991
1,696,600
(87,353)
1,609,247
1,739,837
(152,475)
1,587,362
2,190,060
(116,374)
2,073,686
Loan receivables of $2,453,225 (2018: $2,818,962) (net of impairments) are classified as financial assets subsequently
measured at amortised cost.
Loan receivables of $4,044,128 (2018: $863,971) are classified as financial assets subsequently measured at fair value
through other comprehensive income.
Reclassification
An immaterial re-classification of accrued interest from trade and other payables to loan receivables has been processed
during the current period and reflected in the comparative figures. The prior year amount reclassified amounted to $52,679.
Loan receivables comprise of personal loans between $5,000 to $50,000 using risk-based pricing with interest rates
starting from 8.50% to 19.95%. The personal loans are repayable within the range of 3 to 7 years.
The fair value of the loan receivables is considered to approximate the carrying value.
Initial adoption of AASB 9 Financial Instruments
Consolidated
2019
$
2018
$
11,993,165
1,548,888
The Company has adopted AASB 9 from 1 July 2018. Although the Company ran an off-balance sheet loan funding model
during FY2019, there are still some loan receivables retained on balance sheet, as noted above. These are measured at
amortised cost using the effective interest method.
The following table explains the original and new measurement for the Groups financial assets as at 1 July 2018.
Financial assets
Original classification
New classification
Cash and cash equivalents
Loan receivables
Loan and receivables
Loan and receivables
Amortised cost
Amortised cost
Bank deposits
Loan and receivables
Amortised cost
Change in carrying
amount
No AASB 9 impact
Impact on impairment as
detailed below
No AASB 9 impact
AASB 9 uses an expected credit loss methodology based on a three-stage approach:
Stage 1 – Loan receivables which have not had a significant increase in credit risk since initial recognition. For these
assets, 12 months expected credit losses are recognised.
Stage 2 – Loan receivables which have had a significant increase in credit risk since initial recognition but do not have
objective evidence of impairment. For these assets, lifetime expected credit losses are recognised.
Stage 3 – Loan receivables which have objective evidence of impairment. For these assets, lifetime expected credit losses
are recognised. However, the Company writes off loan receivables at this stage.
50
WI S R L IMIT ED | A NNUA L REPORT 2019
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 6. Loan receivables (cont.)
Note 9. Property, plant and equipment
Management estimate
For Stage 1 and 2, the Company analysed historical data on an arrears bucket basis in order to calculate the 12 month and
lifetime expected credit losses. Time value of money and an economic overlay were also considered as part of the
assessment. An economic overlay refers to the recognition of forward looking information to the extent it is considered to
affect the expected credit losses of the loan receivables balance.
Plant and equipment, at cost
Less: accumulated depreciation
As at 30 June 2019
Stage 1 – 12 month expected credit loss
Stage 2 – lifetime expected credit loss
Total expected credit loss
Consolidated
$
5,730
229,916
235,646
All property, plant and equipment are initially measured at cost and are depreciated over their useful lives on a straight-line
basis. Depreciation commences from the time the asset is available for its intended use. Leasehold improvements are
depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.
The impact of adopting AASB 9 was assessed as having no material impact on the prior year. As a result, no changes
have been made to the comparatives.
The useful lives used for each class of depreciable assets are as follows:
Consolidated
2019
$
2018
$
79,280
(64,058)
15,222
79,280
(38,112)
41,168
Note 7. Trade and other receivables
Current
Accrued management fee income
R&D tax incentive receivable
Consolidated
2019
$
221,751
219,078
440,829
2018
$
42,011
231,552
273,563
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30
days.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses a lifetime
expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days
overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure
purposes. Unless otherwise disclosed in the notes to the financial statements, the carrying amount of the Group’s financial
instruments approximates their fair value.
Note 8. Other assets
Current
Prepayments
Deposits
Cash held in trust
5 1
Consolidated
2019
$
198,291
26,333
325,973
550,597
2018
$
187,733
26,333
339,392
553,458
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable
amount. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the
asset’s employment and subsequent disposal. The expected net cash flows have not been discounted in determining
Class of Asset
Plant and equipment
Useful Life
2-5 years
recoverable amounts.
Note 10. Other financial assets
Non-current
Investment in DirectMoney Personal Loan Fund
Consolidated
30 Jun 2019 30 Jun 2018
$
$
518,000 518,000
In the prior years, the Group invested $518,000 into the DirectMoney Personal Loan Fund. The DirectMoney Personal Loan
Fund is a registered managed investment scheme where investors’ money is pooled and invested into unsecured personal
loans acquired from Wisr Finance Pty Ltd. The investment is classified as fair value through profit or loss in accordance with
AASB 9: Financial Instruments.
Valuation Techniques and Inputs Used to Measure Level 2 Fair Values
Fair Value at 30 Jun 2019
Description
Other financial assets
Investment in DirectMoney
Personal Loan Fund (Fund)
$000
518
Valuation Technique(s)
Inputs Used
Market approach using
Monthly valuation report
monthly valuation reports
provided Fund’s Investment
provided by Fund’s
Manager and Fund’s
Investment Manager and
Fund’s Administrator.
Administrator.
There were no changes during the period in the valuation techniques used by the Group to determine Level 2 fair values.
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 6. Loan receivables (cont.)
Management estimate
As at 30 June 2019
Stage 1 – 12 month expected credit loss
Stage 2 – lifetime expected credit loss
Total expected credit loss
have been made to the comparatives.
Note 7. Trade and other receivables
Current
Accrued management fee income
R&D tax incentive receivable
days.
overdue.
Fair value estimation
Current
Prepayments
Deposits
Cash held in trust
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure
purposes. Unless otherwise disclosed in the notes to the financial statements, the carrying amount of the Group’s financial
instruments approximates their fair value.
Note 8. Other assets
Consolidated
$
5,730
229,916
235,646
Consolidated
2019
$
221,751
219,078
440,829
2018
$
42,011
231,552
273,563
Consolidated
2019
$
198,291
26,333
325,973
550,597
2018
$
187,733
26,333
339,392
553,458
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 9. Property, plant and equipment
For Stage 1 and 2, the Company analysed historical data on an arrears bucket basis in order to calculate the 12 month and
lifetime expected credit losses. Time value of money and an economic overlay were also considered as part of the
assessment. An economic overlay refers to the recognition of forward looking information to the extent it is considered to
affect the expected credit losses of the loan receivables balance.
Plant and equipment, at cost
Less: accumulated depreciation
Consolidated
2019
$
2018
$
79,280
(64,058)
15,222
79,280
(38,112)
41,168
The impact of adopting AASB 9 was assessed as having no material impact on the prior year. As a result, no changes
The useful lives used for each class of depreciable assets are as follows:
All property, plant and equipment are initially measured at cost and are depreciated over their useful lives on a straight-line
basis. Depreciation commences from the time the asset is available for its intended use. Leasehold improvements are
depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30
The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses a lifetime
expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days
Note 10. Other financial assets
Non-current
Investment in DirectMoney Personal Loan Fund
Consolidated
30 Jun 2019 30 Jun 2018
$
$
518,000 518,000
Class of Asset
Plant and equipment
Useful Life
2-5 years
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable
amount. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the
asset’s employment and subsequent disposal. The expected net cash flows have not been discounted in determining
recoverable amounts.
In the prior years, the Group invested $518,000 into the DirectMoney Personal Loan Fund. The DirectMoney Personal Loan
Fund is a registered managed investment scheme where investors’ money is pooled and invested into unsecured personal
loans acquired from Wisr Finance Pty Ltd. The investment is classified as fair value through profit or loss in accordance with
AASB 9: Financial Instruments.
Valuation Techniques and Inputs Used to Measure Level 2 Fair Values
Description
Other financial assets
Investment in DirectMoney
Personal Loan Fund (Fund)
Fair Value at 30 Jun 2019
$000
Valuation Technique(s)
Inputs Used
518
Market approach using
monthly valuation reports
provided by Fund’s
Investment Manager and
Fund’s Administrator.
Monthly valuation report
provided Fund’s Investment
Manager and Fund’s
Administrator.
There were no changes during the period in the valuation techniques used by the Group to determine Level 2 fair values.
52
WI S R L IMIT ED | A NNUA L REPORT 2019
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 11. Intangible assets
Note 13. Employee benefits
Consolidated
2019
$
2018
$
335,222
240,389
44,840
-
Technology assets:
Cost
Accumulated amortisation
Net carrying amount
Technology assets under development:
Cost
Accumulated amortisation
Net carrying amount
Total intangible assets
Consolidated
30 Jun 2019 30 June 2018
$
$
609,240
(42,360)
566,880
12,728
-
12,728
579,608
-
-
-
-
-
-
-
Current
Provision for annual leave
Non-current
Provision for long service leave
Technology assets are recognised at cost of acquisition. They have a finite life and are carried at cost less any
accumulated amortisation and any impairment losses. Technology assets are amortised over their useful lives ranging from
2 to 5 years on a straight-line basis.
Development costs are charged to the statement of profit of loss and other comprehensive income as incurred, or deferred
where it is probable that sufficient future benefits will be derived so as to recover those deferred costs.
Secured note
Note 14. Interest bearing liabilities
The recoverable amount of the group’s intangible assets have been tested for impairment via a value-in-use calculation
using a discounted cash flow model, based on discounted projected cashflows derived by the cash generating unit over the
useful life of the assets. The cash generating unit was identified as being related to the operating cashflows earned via the
Wisr App, being derived via account maintenance fees and loan referral income and is related to the intangible assets
noted above.
Note 12. Trade and other payables
Current
Trade payables
Sundry payables
Accrued expenses
Superannuation payable
Consolidated
2019
$
2018
$
927,211
175,073
219,403
120,192
1,441,879
744,518
255,407
259,248
86,836
1,346,009
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are
unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are
presented as current liabilities. The fair value of the trade and other payables is considered to approximate their carrying
value.
Note 15. Issued capital
(a) Issued and paid up capital
Ordinary shares fully paid
Costs of raising capital
Provision is made for the Group’s obligation for employee benefits arising from services rendered by employees to the end
of the reporting period. Short term employee benefits are benefits (other than termination benefits and equity compensation
benefits) that are expected to be settled wholly within 12 months after the end of the annual reporting period in which the
employees render the related service, including wages, salaries and personal leave. Short term employee benefits are
measured at the (undiscounted) amounts expected to be paid when the obligation is settled, plus any related costs.
In September 2018, the Group originated a $2,000,000 secured note from sophisticated investors. The note is used for
working capital purposes through initial funding of personal loans prior to them being sold to funding partners as part of
normal business operations. The note had a 12 month term, $1,775,000 of which was refinanced in September 2019. The
secured note is initially recognised at the fair value of the consideration received, net of transaction costs. The note is
subsequently measured at amortised cost using the effective interest method.
Convertible note
As at 30 June 2018, Wisr Marketplace Limited had $373,000 of convertibles notes on issue that were secured against
identified loans within Wisr Marketplace Limited’s balance sheet. The carrying value of the loans pledged as security as of
30 June 2018 was $286,274. The holders had recourse to these loans and a distribution of interest based on the gross
return of the loans less a 4% loss reserve and 1.5% servicing fee.
These notes were in a rundown phase where holders received periodic repayments of principal on the note based on the
total principal repayments received from the loans secured against the note.
In April 2019, the convertible notes were redeemed in full which included a repurchase of the loans pledged as security.
Consolidated
2019
$
2018
$
49,555,881
(1,143,877)
48,412,004
29,644,386
(320,406)
29,323,980
Ordinary shares participate in dividends and the proceeds on winding up the Company. At shareholder meetings, each
ordinary share is entitled to one vote when a poll is called. Otherwise, each shareholder has one vote on show of hands.
Ordinary shares are classified as equity and recognised at the fair value of the consideration received by the Group.
Incremental costs directly attributable to the issue of new shares or options are expensed as incurred.
5 3
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 11. Intangible assets
Note 13. Employee benefits
Technology assets are recognised at cost of acquisition. They have a finite life and are carried at cost less any
accumulated amortisation and any impairment losses. Technology assets are amortised over their useful lives ranging from
2 to 5 years on a straight-line basis.
Development costs are charged to the statement of profit of loss and other comprehensive income as incurred, or deferred
where it is probable that sufficient future benefits will be derived so as to recover those deferred costs.
The recoverable amount of the group’s intangible assets have been tested for impairment via a value-in-use calculation
using a discounted cash flow model, based on discounted projected cashflows derived by the cash generating unit over the
useful life of the assets. The cash generating unit was identified as being related to the operating cashflows earned via the
Wisr App, being derived via account maintenance fees and loan referral income and is related to the intangible assets
Technology assets:
Cost
Accumulated amortisation
Net carrying amount
Cost
Accumulated amortisation
Net carrying amount
Total intangible assets
Technology assets under development:
noted above.
Note 12. Trade and other payables
Current
Trade payables
Sundry payables
Accrued expenses
Superannuation payable
Consolidated
30 Jun 2019 30 June 2018
$
609,240
(42,360)
566,880
12,728
-
12,728
579,608
$
-
-
-
-
-
-
-
Consolidated
2019
$
927,211
175,073
219,403
120,192
2018
$
744,518
255,407
259,248
86,836
1,441,879
1,346,009
Current
Provision for annual leave
Non-current
Provision for long service leave
Consolidated
2019
$
2018
$
335,222
240,389
44,840
-
Provision is made for the Group’s obligation for employee benefits arising from services rendered by employees to the end
of the reporting period. Short term employee benefits are benefits (other than termination benefits and equity compensation
benefits) that are expected to be settled wholly within 12 months after the end of the annual reporting period in which the
employees render the related service, including wages, salaries and personal leave. Short term employee benefits are
measured at the (undiscounted) amounts expected to be paid when the obligation is settled, plus any related costs.
Note 14. Interest bearing liabilities
Secured note
In September 2018, the Group originated a $2,000,000 secured note from sophisticated investors. The note is used for
working capital purposes through initial funding of personal loans prior to them being sold to funding partners as part of
normal business operations. The note had a 12 month term, $1,775,000 of which was refinanced in September 2019. The
secured note is initially recognised at the fair value of the consideration received, net of transaction costs. The note is
subsequently measured at amortised cost using the effective interest method.
Convertible note
As at 30 June 2018, Wisr Marketplace Limited had $373,000 of convertibles notes on issue that were secured against
identified loans within Wisr Marketplace Limited’s balance sheet. The carrying value of the loans pledged as security as of
30 June 2018 was $286,274. The holders had recourse to these loans and a distribution of interest based on the gross
return of the loans less a 4% loss reserve and 1.5% servicing fee.
These notes were in a rundown phase where holders received periodic repayments of principal on the note based on the
total principal repayments received from the loans secured against the note.
In April 2019, the convertible notes were redeemed in full which included a repurchase of the loans pledged as security.
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are
unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are
presented as current liabilities. The fair value of the trade and other payables is considered to approximate their carrying
value.
Note 15. Issued capital
(a) Issued and paid up capital
Ordinary shares fully paid
Costs of raising capital
Consolidated
2019
$
2018
$
49,555,881
(1,143,877)
48,412,004
29,644,386
(320,406)
29,323,980
Ordinary shares participate in dividends and the proceeds on winding up the Company. At shareholder meetings, each
ordinary share is entitled to one vote when a poll is called. Otherwise, each shareholder has one vote on show of hands.
Ordinary shares are classified as equity and recognised at the fair value of the consideration received by the Group.
Incremental costs directly attributable to the issue of new shares or options are expensed as incurred.
54
WI S R L IMIT ED | A NNUA L REPORT 2019
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 15. Issued capital (cont.)
Note 16. Equity – reserves and accumulated losses (cont.)
(b) Reconciliation of issued and paid-up capital
Opening balance as at 1 July
Issue of shares as payment of funder fees (non-cash)
Issue of shares to CEO as part of short-term incentive
Issue of shares to Alceon
Issue of shares to CFO as part of long-term incentive
Issue of shares to directors on vesting of performance rights
Issue of shares from capital raises in the period
Costs of raising capital
Issue of shares on exercise of options
Closing Balance as at 30 June
(c) Performance rights
2019
Number of
shares
2018
$
Number of
shares
$
455,405,424
1,988,120
4,461,652
-
1,704,079
11,666,666
311,851,176
-
3,131,035
790,208,152
99,406
95,635
-
81,114
131,341
19,695,500
(1,143,877)
128,905
29,323,980 436,925,084
2,000,000
2,194,625
14,285,715
-
-
-
-
-
48,412,004 455,405,424
28,604,725
60,000
59,255
600,000
-
-
-
-
-
29,323,980
Movement in reserves:
At 1 July 2017
Share based payments expense
Transfer from reserve to retained earnings
At 30 June 2018
Share based payments expense
Costs of raising capital
Transfer from reserve to retained earnings
Transfer from reserve on exercise of options
Transfer of gain on funder forgiveness of options obligation to
Issue of shares as a result of exercise of options for consideration
retained earnings
At 30 June 2019
Employee
equity benefits
reserve
$
1,241,382
571,535
(439,243)
1,373,674
852,147
(436,257)
(312,644)
-
-
-
1,476,920
Other share
based
payments
reserve
153,126
373,251
526,377
243,906
155,000
$
-
-
(164,146)
(325,612)
(17,024)
418,501
Total
$
1,394,508
944,786
(439,243)
1,900,051
1,096,053
155,000
(436,257)
(476,790)
(325,612)
(17,024)
1,895,421
As at 30 June 2019, there were a total of 38,966,725 (2018: 37,082,562) performance rights outstanding.
Under the Company’s Performance Rights Plan, these performance rights were issued at no cost to the recipients and
represent a right to one ordinary share in the Company in the future for no consideration, subject to satisfying the
performance conditions and compliance with the rules of the Plan.
(d) Capital management
Management controls the capital of the Group in order to maintain a sustainable debt to equity ratio, generate long term
shareholder value and ensure that the Group can fund its operations and continue as a going concern.
Accumulated losses:
Opening balance
Total loss after income tax for the year
Transfer from reserve to retained earnings
Total
17. Capital and lease commitments
The Group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets. The
Group is not subject to any externally imposed capital requirements.
a)
Finance lease commitments
There are no finance lease commitments (2018: nil).
The Group’s objectives when managing capital are to maximize shareholder value and to maintain an optimal capital
structure. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders. Management gives particular regard to conservation of liquidity in its recommendations as to the declaration
of dividends. There were no dividends declared in in the year.
Note 16. Equity – reserves and accumulated losses
(a) Employee equity benefits reserve
The employee equity benefits reserve records items recognised as expenses on valuation of employee performance rights
and accrual of employee short-term and long-term incentives.
(b) Other share based payments reserve
The other share based payments reserve records funding expenses accrued and are expected to be paid in the form of
shares.
5 5
Consolidated
2019
$
2018
$
(26,565,419)
(20,796,796)
(7,731,042)
(6,207,866)
761,869
439,243
(33,534,592)
(26,565,419)
Consolidated
2019
2018
196,799
110,089
$
-
-
$
-
-
196,799
110,089
b) Operating lease commitments
Non-cancellable operating leases contracted for but not recognised in the financial statements.
Payable – minimum lease payments:
i) Within one year
ii) One to five years
iii) More than five years
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised
as expenses in the periods in which they are incurred on a straight line basis.
Wisr Finance Pty Ltd has a non-cancellable property lease which was varied in June 2019 to a 39-month term which
commenced on 1 March 2017, with rent payable monthly in advance. Contingent rental provisions within the lease
agreement require that the minimum lease payments shall be increased from and including each anniversary of the
commencing date of the term by 4%.
As detailed at note 1 a) the group does not anticipate a material impact of adoption of AASB 16 – Leases as a result of the
current lease having a term of less than 12 months.
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 15. Issued capital (cont.)
Note 16. Equity – reserves and accumulated losses (cont.)
2019
Number of
shares
2018
$
Number of
shares
$
-
-
-
-
-
(b) Reconciliation of issued and paid-up capital
Opening balance as at 1 July
Issue of shares as payment of funder fees (non-cash)
Issue of shares to CEO as part of short-term incentive
Issue of shares to Alceon
455,405,424
29,323,980 436,925,084
28,604,725
1,988,120
4,461,652
-
99,406
95,635
2,000,000
2,194,625
-
14,285,715
60,000
59,255
600,000
Issue of shares to CFO as part of long-term incentive
1,704,079
Issue of shares to directors on vesting of performance rights
11,666,666
81,114
131,341
311,851,176
19,695,500
-
(1,143,877)
3,131,035
128,905
790,208,152
48,412,004 455,405,424
29,323,980
-
-
-
-
-
Issue of shares from capital raises in the period
Costs of raising capital
Issue of shares on exercise of options
Closing Balance as at 30 June
(c) Performance rights
As at 30 June 2019, there were a total of 38,966,725 (2018: 37,082,562) performance rights outstanding.
Under the Company’s Performance Rights Plan, these performance rights were issued at no cost to the recipients and
represent a right to one ordinary share in the Company in the future for no consideration, subject to satisfying the
performance conditions and compliance with the rules of the Plan.
(d) Capital management
Management controls the capital of the Group in order to maintain a sustainable debt to equity ratio, generate long term
shareholder value and ensure that the Group can fund its operations and continue as a going concern.
Movement in reserves:
At 1 July 2017
Share based payments expense
Transfer from reserve to retained earnings
At 30 June 2018
Share based payments expense
Costs of raising capital
Transfer from reserve to retained earnings
Transfer from reserve on exercise of options
Transfer of gain on funder forgiveness of options obligation to
retained earnings
Issue of shares as a result of exercise of options for consideration
At 30 June 2019
Accumulated losses:
Opening balance
Total loss after income tax for the year
Transfer from reserve to retained earnings
Total
17. Capital and lease commitments
Employee
equity benefits
reserve
$
1,241,382
571,535
(439,243)
1,373,674
852,147
-
(436,257)
(312,644)
-
Other share
based
payments
reserve
$
153,126
373,251
-
526,377
243,906
155,000
-
(164,146)
(325,612)
-
1,476,920
(17,024)
418,501
Total
$
1,394,508
944,786
(439,243)
1,900,051
1,096,053
155,000
(436,257)
(476,790)
(325,612)
(17,024)
1,895,421
Consolidated
2019
$
(26,565,419)
(7,731,042)
761,869
(33,534,592)
2018
$
(20,796,796)
(6,207,866)
439,243
(26,565,419)
The Group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets. The
Group is not subject to any externally imposed capital requirements.
Finance lease commitments
a)
There are no finance lease commitments (2018: nil).
The Group’s objectives when managing capital are to maximize shareholder value and to maintain an optimal capital
structure. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders. Management gives particular regard to conservation of liquidity in its recommendations as to the declaration
of dividends. There were no dividends declared in in the year.
Note 16. Equity – reserves and accumulated losses
(a) Employee equity benefits reserve
The employee equity benefits reserve records items recognised as expenses on valuation of employee performance rights
and accrual of employee short-term and long-term incentives.
(b) Other share based payments reserve
The other share based payments reserve records funding expenses accrued and are expected to be paid in the form of
shares.
b) Operating lease commitments
Non-cancellable operating leases contracted for but not recognised in the financial statements.
Payable – minimum lease payments:
i) Within one year
ii) One to five years
iii) More than five years
Consolidated
2019
$
196,799
-
-
196,799
2018
$
110,089
-
-
110,089
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised
as expenses in the periods in which they are incurred on a straight line basis.
Wisr Finance Pty Ltd has a non-cancellable property lease which was varied in June 2019 to a 39-month term which
commenced on 1 March 2017, with rent payable monthly in advance. Contingent rental provisions within the lease
agreement require that the minimum lease payments shall be increased from and including each anniversary of the
commencing date of the term by 4%.
As detailed at note 1 a) the group does not anticipate a material impact of adoption of AASB 16 – Leases as a result of the
current lease having a term of less than 12 months.
56
WI S R L IMIT ED | A NNUA L REPORT 2019
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 18. Income tax
Numerical reconciliation of income tax expense to prima facie tax payable
Loss from continuing operations before income tax expense
Tax benefit at the tax rate of 27.5% (2018: 27.5%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
- Temporary differences not recognised
- Non-recognition of current year tax losses
Income tax expense / (benefit)
Consolidated
2019
$
2018
$
(7,731,042)
(2,126,037)
(6,207,866)
(1,707,163)
102,904
2,023,133
-
19,828
1,687,335
-
As at 30 June 2019, the entity has unrecognised carried forward tax losses of $34,016,142 (2018: $26,659,295), the
utilisation of which is dependent on the entity satisfying the requirements of the Same Business Test (SBT).
The income tax expense or benefit for the period is the tax payable / refundable on the current period's taxable income based
on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities, attributable to
temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements,
and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets
are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each
jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to
measure the deferred tax asset or liability.
An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred
tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a
business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases
of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset
where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and
settle the liability simultaneously.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.
Wisr Limited and its wholly owned controlled entities have implemented the tax consolidation legislation as of 1 January
2004.
following 30 June 2019; and
The head entity, Wisr Limited, and the controlled entities in the tax consolidated group continue to account for their own
current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues
to be a standalone taxpayer in its own right.
In addition to its own current and deferred tax amounts, Wisr Limited also recognises the current tax liabilities (or assets)
and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the
tax consolidated group.
following 30 June 2019.
Current COO Long-Term Incentives
5 7
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 18. Income tax (cont.)
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts
receivable from or payable to other entities in the group.
Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are
recognised as a contribution to (or distribution from) wholly owned tax consolidated entities.
Note 19. Remuneration of auditors
During the year, the following fees were paid or payable for services provided by the auditor:
Consolidated
2019
75,000
$
-
31,372
2,000
108,372
2018
$
83,000
4,850
25,000
-
112,850
BDO East Coast Partnership
- Audit of the financial report – assurance services
- Taxation services – non-assurance services
- Review of the half-yearly financial report – assurance services
- Accounting advice – non-assurance services
Note 20. Contingent liabilities
CEO Short and Long-Term Incentives
The following long-term incentives may be awarded by the Company to the CEO and are noted as contingent liabilities:
- Grant of shares equivalent to 0.5% of the market capital value of the Company on achieving a share price of 6c
based on the average weighted price of the equity of the Company for a consecutive 30 day period in the 90 days
immediately preceding the first day of the Vesting Date being 6c. The Vesting Date being within 20 business days
following 30 June 2019; and
- Grant of shares equivalent to 0.5% of the market capital value of the Company on achieving a share price of 12c
based on the average weighted price of the equity of the Company for a consecutive 30 day period in the 90 days
immediately preceding the first day of the vesting date being 12c. The Vesting Date being within 20 business days
following 30 June 2019.
CFO Long-Term Incentives
The Company may award the CFO an issue of shares in the Company to a maximum value of $220,000 for each of the
financial years to 30 June 2018 and subsequently, annually, subject to the discretion of the CEO and Board, and achievement
of outcomes to be agreed with the CEO or absent agreement, as determined by the CEO.
Former COO Long-Term Incentives
The following long-term incentives may be awarded by the Company to the COO and are noted as contingent liabilities:
- Grant of shares equal to 1% market capital value of the Company as at 30 June 2019, up to a maximum value of
50% of total remuneration or $100,000, whichever is the lesser, for each of the relevant years;
- Grant of shares equal to 0.25% of the market capital value of the Company on achieving a share price of 6c based
on the average weighted price of the equity of the Company for a consecutive 30 day period in the 90 days
immediately preceding the first day of the Vesting Date being 6c. The Vesting Date being within 20 business days
- Grant of shares equal to 0.25% of the market capital value of the Company on achieving a share price of 12c based
on the average weighted price of the equity of the Company for a consecutive 30 day period in the 90 days
immediately preceding the first day of the vesting date being 12c. The Vesting Date being within 20 business days
The Company may award the current COO an issue of shares in the Company, through an Executive Staff Share Scheme,
to an annual value of $70,000 unless agreed otherwise, effective from 1 July 2018 for each of the financial years, subject to
the discretion of the CEO and Board, and achievement of outcomes to be agreed with the CEO or absent agreement, as
determined by the CEO.
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 18. Income tax
Numerical reconciliation of income tax expense to prima facie tax payable
Loss from continuing operations before income tax expense
Tax benefit at the tax rate of 27.5% (2018: 27.5%)
- Temporary differences not recognised
- Non-recognition of current year tax losses
Income tax expense / (benefit)
Consolidated
2019
$
2018
$
(7,731,042)
(2,126,037)
(6,207,866)
(1,707,163)
102,904
2,023,133
19,828
1,687,335
-
-
As at 30 June 2019, the entity has unrecognised carried forward tax losses of $34,016,142 (2018: $26,659,295), the
utilisation of which is dependent on the entity satisfying the requirements of the Same Business Test (SBT).
The income tax expense or benefit for the period is the tax payable / refundable on the current period's taxable income based
on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities, attributable to
temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements,
and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets
are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each
jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to
measure the deferred tax asset or liability.
An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred
tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a
business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases
of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset
where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and
settle the liability simultaneously.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.
Wisr Limited and its wholly owned controlled entities have implemented the tax consolidation legislation as of 1 January
2004.
The head entity, Wisr Limited, and the controlled entities in the tax consolidated group continue to account for their own
current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues
to be a standalone taxpayer in its own right.
In addition to its own current and deferred tax amounts, Wisr Limited also recognises the current tax liabilities (or assets)
and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the
tax consolidated group.
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Note 19. Remuneration of auditors
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 18. Income tax (cont.)
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts
receivable from or payable to other entities in the group.
Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are
recognised as a contribution to (or distribution from) wholly owned tax consolidated entities.
During the year, the following fees were paid or payable for services provided by the auditor:
BDO East Coast Partnership
- Audit of the financial report – assurance services
- Taxation services – non-assurance services
- Review of the half-yearly financial report – assurance services
- Accounting advice – non-assurance services
Note 20. Contingent liabilities
Consolidated
2019
$
75,000
-
31,372
2,000
108,372
2018
$
83,000
4,850
25,000
-
112,850
CEO Short and Long-Term Incentives
The following long-term incentives may be awarded by the Company to the CEO and are noted as contingent liabilities:
- Grant of shares equivalent to 0.5% of the market capital value of the Company on achieving a share price of 6c
based on the average weighted price of the equity of the Company for a consecutive 30 day period in the 90 days
immediately preceding the first day of the Vesting Date being 6c. The Vesting Date being within 20 business days
following 30 June 2019; and
- Grant of shares equivalent to 0.5% of the market capital value of the Company on achieving a share price of 12c
based on the average weighted price of the equity of the Company for a consecutive 30 day period in the 90 days
immediately preceding the first day of the vesting date being 12c. The Vesting Date being within 20 business days
following 30 June 2019.
CFO Long-Term Incentives
The Company may award the CFO an issue of shares in the Company to a maximum value of $220,000 for each of the
financial years to 30 June 2018 and subsequently, annually, subject to the discretion of the CEO and Board, and achievement
of outcomes to be agreed with the CEO or absent agreement, as determined by the CEO.
Former COO Long-Term Incentives
The following long-term incentives may be awarded by the Company to the COO and are noted as contingent liabilities:
- Grant of shares equal to 1% market capital value of the Company as at 30 June 2019, up to a maximum value of
50% of total remuneration or $100,000, whichever is the lesser, for each of the relevant years;
- Grant of shares equal to 0.25% of the market capital value of the Company on achieving a share price of 6c based
on the average weighted price of the equity of the Company for a consecutive 30 day period in the 90 days
immediately preceding the first day of the Vesting Date being 6c. The Vesting Date being within 20 business days
following 30 June 2019; and
- Grant of shares equal to 0.25% of the market capital value of the Company on achieving a share price of 12c based
on the average weighted price of the equity of the Company for a consecutive 30 day period in the 90 days
immediately preceding the first day of the vesting date being 12c. The Vesting Date being within 20 business days
following 30 June 2019.
Current COO Long-Term Incentives
The Company may award the current COO an issue of shares in the Company, through an Executive Staff Share Scheme,
to an annual value of $70,000 unless agreed otherwise, effective from 1 July 2018 for each of the financial years, subject to
the discretion of the CEO and Board, and achievement of outcomes to be agreed with the CEO or absent agreement, as
determined by the CEO.
58
WI S R L IMIT ED | A NNUA L REPORT 2019
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 21. Subsidiaries
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 24. Related party transactions
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policies described in Note 1:
(a) Parent entity
The legal parent is Wisr Limited.
Name
Wisr Finance Pty Ltd
Wisr Investment Management Pty Ltd
Wisr Loans Servicing Pty Ltd
Wisr Credit Management Pty Ltd
Wisr Marketplace Limited
Wisr Services Pty Ltd
Wisr Funding Pty Ltd
Wisr Notes 1 Pty Ltd
Note 22. Events after the reporting period
Status
Country of
incorporation
% owned
2019
% owned
2018
(b) Subsidiaries
Interest in subsidiaries are set out in Note 21.
Registered 2 May 2006
Registered 20 February 2015
Registered 20 February 2015
Registered 19 March 2015
Registered 16 March 2015
Registered 13 January 2017
Registered 9 April 2018
Registered 31 July 2018
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
(c) Transactions with related parties
As at 30 June 2019, all transactions that have occurred among the subsidiaries within the Group have been eliminated for
consolidation purposes. There were no other related party transactions (2018: nil).
The individual financial statements for the parent entity show the following aggregate amounts:
In July 2019, the Group entered into a three-year agreement with SmartGroup Corporation Ltd (ASX:SIQ) (SmartGroup) to
partner on the distribution of Wisr’s ecosystem of financial wellness products. Loan conversion has commenced, however it
is not currently possible to reliably measure the financial impact of this agreement.
Note 23. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the consolidated
entity is set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Total KMP compensation
Consolidated
2019
$
853,652
79,109
2,295
732,603
1,667,659
2018
$
972,206
91,493
-
541,516
1,605,215
Short-term employee benefits
These amounts include fees and benefits paid to the executive Chair and non-executive directors as well as all salary, paid
leave benefits, fringe benefits and cash bonuses awarded to executive directors and other KMP.
Post-employment benefits
These amounts are the current year’s estimated cost of providing for the Group’s superannuation contributions made
during the year.
Long-term benefits
These amounts represent long service leave benefits accruing during the year.
Share-based payments
These amounts represent the expense related to the participation of KMP in equity-settled benefit schemes as measured
by the fair value of the options, rights and shares granted on grant date.
5 9
Note 25. Parent entity information
(a) Summary financial information
Statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Shareholders’ equity
Issued capital
Reserves
Accumulated losses
Loss for the year
Total comprehensive loss
statements.
(b) Contingent liabilities
See Note 20.
(c) Contractual commitments
The financial information for the parent entity, Wisr Limited, has been prepared on the same basis as the consolidated
financial statements, except that investments in subsidiaries are accounted for at cost net of impairment in the parent financial
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2019 and 30 June 2018.
2019
$
2018
$
4,831,730
29,701,747
34,533,477
564,551
14,943,118
15,507,669
27,672
-
27,672
79,026
-
79,026
41,399,776
1,895,420
(8,789,391)
34,505,805
22,311,751
1,900,051
(8,783,159)
15,428,643
(768,161)
(833,593)
(768,161)
(833,593)
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 21. Subsidiaries
Name
Wisr Finance Pty Ltd
Wisr Investment Management Pty Ltd
Wisr Loans Servicing Pty Ltd
Wisr Credit Management Pty Ltd
Wisr Marketplace Limited
Wisr Services Pty Ltd
Wisr Funding Pty Ltd
Wisr Notes 1 Pty Ltd
Note 22. Events after the reporting period
Compensation
entity is set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Total KMP compensation
Short-term employee benefits
Post-employment benefits
during the year.
Long-term benefits
Share-based payments
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policies described in Note 1:
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 24. Related party transactions
(a) Parent entity
The legal parent is Wisr Limited.
Country of
% owned
% owned
Status
incorporation
2019
2018
(b) Subsidiaries
Interest in subsidiaries are set out in Note 21.
Registered 2 May 2006
Registered 20 February 2015
Registered 20 February 2015
Registered 19 March 2015
Registered 16 March 2015
Registered 13 January 2017
Registered 9 April 2018
Registered 31 July 2018
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
(c) Transactions with related parties
As at 30 June 2019, all transactions that have occurred among the subsidiaries within the Group have been eliminated for
consolidation purposes. There were no other related party transactions (2018: nil).
Note 25. Parent entity information
(a) Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
In July 2019, the Group entered into a three-year agreement with SmartGroup Corporation Ltd (ASX:SIQ) (SmartGroup) to
partner on the distribution of Wisr’s ecosystem of financial wellness products. Loan conversion has commenced, however it
is not currently possible to reliably measure the financial impact of this agreement.
Note 23. Key management personnel disclosures
The aggregate compensation made to directors and other members of key management personnel of the consolidated
Statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Shareholders’ equity
Issued capital
Reserves
Accumulated losses
Loss for the year
Total comprehensive loss
Consolidated
2019
$
853,652
79,109
2,295
2018
$
972,206
91,493
-
732,603
1,667,659
541,516
1,605,215
2019
$
4,831,730
29,701,747
34,533,477
2018
$
564,551
14,943,118
15,507,669
27,672
-
27,672
79,026
-
79,026
41,399,776
1,895,420
(8,789,391)
34,505,805
22,311,751
1,900,051
(8,783,159)
15,428,643
(768,161)
(833,593)
(768,161)
(833,593)
These amounts include fees and benefits paid to the executive Chair and non-executive directors as well as all salary, paid
leave benefits, fringe benefits and cash bonuses awarded to executive directors and other KMP.
The financial information for the parent entity, Wisr Limited, has been prepared on the same basis as the consolidated
financial statements, except that investments in subsidiaries are accounted for at cost net of impairment in the parent financial
statements.
These amounts are the current year’s estimated cost of providing for the Group’s superannuation contributions made
(b) Contingent liabilities
See Note 20.
These amounts represent long service leave benefits accruing during the year.
(c) Contractual commitments
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2019 and 30 June 2018.
These amounts represent the expense related to the participation of KMP in equity-settled benefit schemes as measured
by the fair value of the options, rights and shares granted on grant date.
6 0
WI S R L IMIT ED | A NNUA L REPORT 2019
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 26. Cash flow information
Reconciliation of loss after income tax to net cash outflows from operating activities
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Consolidated
2019
$
2018
$
Note 29. Dividends
(a) Dividends paid during the year
Loss for the year
(7,731,042)
(6,207,866)
There were no dividends paid during the year (2018: nil).
Adjustments for non-cash items or items for which the cash flows are investing or financing
cash flows
Depreciation and amortisation
Share-based payments and accruals
Fundraising expenses
Loss on disposal of assets
Non-cash modification benefit on contractual cashflows
Changes in operating assets and liabilities:
(Increase) / decrease in loan receivables
Increase in trade and other receivables
Decrease / (increase) in other assets
Increase in trade and other payables
Increase in provision for employee benefits
Net cash flows used in operating activities
Note 27. Earnings per share
Basic earnings per share
Diluted earnings per share
Weighted average number of shares used as the denominator
68,305
1,096,053
-
-
(47,339)
23,921
1,064,041
(45,750)
426
-
(2,814,420)
(167,266)
2,861
226,445
139,673
2,809,124
(258,515)
(96,528)
496,516
59,769
(9,226,730)
(2,154,862)
2019
Cents
(1.34)
(1.34)
2018
Cents
(1.39)
(1.39)
Weighted average number of shares used as the denominator in calculating basic earnings
445,066,294
per share
-
Adjustments for calculation of diluted earnings per share
Weighted average number of ordinary shares used in calculating dilutive earnings per share 575,478,118 445,066,294
575,478,118
-
In addition to the above, there were $155,000 worth of options issued to Blue Ocean Equities as part of the consideration for
their capital raising mandate. The amount is included in the Statement of Changes in Equity. The options are money in
options, meaning that if exercised, cash is received by the Company based on the option strike price.
The performance rights on issue have not been considered in the diluted earnings per share as their effect is anti-dilutive.
(a) Performance rights
Number of
shares
Number of
shares
- Recruitment expense of $49,879 (2018: $6,049).
Basic earnings per share
Basic earnings per share is calculated by dividing the result attributable to equity holders of the Company by the weighted
average number of ordinary shares outstanding during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Note 28. Segment information
Management has determined that the Group has one operating segment, being the provision of personal loans to
consumers. The internal reporting framework is based on the principal activity as discussed above and is the most relevant
to assist the Board as Chief Operating Decision Maker with making decisions regarding the Group and its ongoing growth.
The assets as presented relate to the operating segment. The Group operates in Australia only.
61
Ordinary shares
(b) Franking Credits
– 27.5%)
after the end of the year.
Note 30. Share based payments
Franking credits available for subsequent reporting periods based on a tax rate of 27.5% (2018
The above amounts are calculated from the balance of the franking account as at the end of the reporting period, adjusted
for franking credits and debits that will arise from the settlement of liabilities or receivables for income tax and dividends
2019
$
2018
$
1,542,955
1,542,955
The share-based payment expense of $1,096,053 (2018: $1,064,041) consists of:
- KMP LTIs of $725,364 (2018: $527,280) accrued up to 30 June 2019;
- Performance rights expense (including a portion to KMP) of $126,783 (2018: $103,510) accrued up to 30 June 2019;
- Funder fee expense totalling $132,120 (2018: $396,631) paid and accrued during the year in relation to an
agreement entered into between the Company and 255 Finance in August 2017, of which the Company agreed to
issue shares to 255 Finance and options that vest upon certain hurdles being met;
- Option expense of $61,907 (2018: $30,571) accrued in relation to the grant of call options to sophisticated investors
of a $2 million working capital facility for the Group; and
Balance at beginning of year
granted
-
-
-
forfeited
exercised
Balance at end of year
rights
Exercise price
rights
Exercise price
Notes
2019
Number of
performance
37,082,562
31,661,940
(18,111,111)
(11,666,666)
38,966,725
2018
Number of
performance
Nil
Nil
Nil
Nil
Nil
37,175,000
6,565,125
(6,657,563)
-
37,082,562
Nil
Nil
Nil
Nil
Nil
During the year, the Group awarded its staff an offer to participate in the Group’s Long-Term Incentive Plan (LTIP) in the
form of performance rights and link to KPIs for FY2019. From an accounting perspective, these performance rights have
been granted. There are also future share price hurdles for granted performance rights to vest.
The total fair value of these performance rights at grant date is $198,362 of which $36,242 has been recognised as a share-
based performance rights expense in accordance with AASB 2 Share-based payment for FY2019. The fair value was
calculated using a Hoadley Barrier model, which included the following inputs:
Reconciliation of loss after income tax to net cash outflows from operating activities
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 26. Cash flow information
Loss for the year
cash flows
Depreciation and amortisation
Share-based payments and accruals
Fundraising expenses
Loss on disposal of assets
Non-cash modification benefit on contractual cashflows
Changes in operating assets and liabilities:
(Increase) / decrease in loan receivables
Increase in trade and other receivables
Decrease / (increase) in other assets
Increase in trade and other payables
Increase in provision for employee benefits
Net cash flows used in operating activities
Note 27. Earnings per share
Basic earnings per share
Diluted earnings per share
Consolidated
2019
$
2018
$
(7,731,042)
(6,207,866)
68,305
1,096,053
-
-
(47,339)
23,921
1,064,041
(45,750)
426
-
(2,814,420)
(167,266)
2,861
226,445
139,673
2,809,124
(258,515)
(96,528)
496,516
59,769
(9,226,730)
(2,154,862)
2019
Cents
(1.34)
(1.34)
2018
Cents
(1.39)
(1.39)
Weighted average number of shares used as the denominator
Weighted average number of shares used as the denominator in calculating basic earnings
per share
Adjustments for calculation of diluted earnings per share
Weighted average number of ordinary shares used in calculating dilutive earnings per share 575,478,118 445,066,294
Number of
Number of
shares
shares
575,478,118
445,066,294
-
-
Adjustments for non-cash items or items for which the cash flows are investing or financing
(b) Franking Credits
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 29. Dividends
(a) Dividends paid during the year
Ordinary shares
There were no dividends paid during the year (2018: nil).
Franking credits available for subsequent reporting periods based on a tax rate of 27.5% (2018
– 27.5%)
1,542,955
1,542,955
The above amounts are calculated from the balance of the franking account as at the end of the reporting period, adjusted
for franking credits and debits that will arise from the settlement of liabilities or receivables for income tax and dividends
after the end of the year.
2019
$
2018
$
Note 30. Share based payments
The share-based payment expense of $1,096,053 (2018: $1,064,041) consists of:
- KMP LTIs of $725,364 (2018: $527,280) accrued up to 30 June 2019;
- Performance rights expense (including a portion to KMP) of $126,783 (2018: $103,510) accrued up to 30 June 2019;
- Funder fee expense totalling $132,120 (2018: $396,631) paid and accrued during the year in relation to an
agreement entered into between the Company and 255 Finance in August 2017, of which the Company agreed to
issue shares to 255 Finance and options that vest upon certain hurdles being met;
- Option expense of $61,907 (2018: $30,571) accrued in relation to the grant of call options to sophisticated investors
of a $2 million working capital facility for the Group; and
- Recruitment expense of $49,879 (2018: $6,049).
In addition to the above, there were $155,000 worth of options issued to Blue Ocean Equities as part of the consideration for
their capital raising mandate. The amount is included in the Statement of Changes in Equity. The options are money in
options, meaning that if exercised, cash is received by the Company based on the option strike price.
The performance rights on issue have not been considered in the diluted earnings per share as their effect is anti-dilutive.
(a) Performance rights
Notes
2019
2018
Basic earnings per share
Diluted earnings per share
Note 28. Segment information
Basic earnings per share is calculated by dividing the result attributable to equity holders of the Company by the weighted
average number of ordinary shares outstanding during the financial year.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Management has determined that the Group has one operating segment, being the provision of personal loans to
consumers. The internal reporting framework is based on the principal activity as discussed above and is the most relevant
to assist the Board as Chief Operating Decision Maker with making decisions regarding the Group and its ongoing growth.
The assets as presented relate to the operating segment. The Group operates in Australia only.
Balance at beginning of year
-
-
-
granted
forfeited
exercised
Balance at end of year
Number of
performance
rights
37,082,562
31,661,940
(18,111,111)
(11,666,666)
38,966,725
Exercise price
Nil
Nil
Nil
Nil
Number of
performance
rights
37,175,000
6,565,125
(6,657,563)
-
Exercise price
Nil
Nil
Nil
Nil
Nil
37,082,562
Nil
During the year, the Group awarded its staff an offer to participate in the Group’s Long-Term Incentive Plan (LTIP) in the
form of performance rights and link to KPIs for FY2019. From an accounting perspective, these performance rights have
been granted. There are also future share price hurdles for granted performance rights to vest.
The total fair value of these performance rights at grant date is $198,362 of which $36,242 has been recognised as a share-
based performance rights expense in accordance with AASB 2 Share-based payment for FY2019. The fair value was
calculated using a Hoadley Barrier model, which included the following inputs:
6 2
WI S R L IMIT ED | A NNUA L REPORT 2019
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 30. Share based payments (cont.)
(a) Performance rights (cont.)
Grant date
19/02/2019
19/02/2019
Expiry date
31/07/2020
31/07/2021
Spot price
0.0227
0.0227
Barrier price
$0.04
$0.06
Volatility
40%
40%
Risk-free
interest rate
2.50%
2.50%
Fair value at
grant date
$0.00764
$0.00489
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 31. Financial risk management
The business of the Group and the industry in which it operates are subject to risk factors both of a general nature and risks
which are specific to the industry and/or the Group’s business activities.
The potential effect of these risk factors either individually, or in combination, may have an adverse effect on the future
financial and operating performance of the Group, its financial position, its prospects and the value of its shares.
The following are the key risks that specifically relate to the Group:
The Group has also recognised a performance rights expense of $89,057 (2018: $83,683) for performance rights under
the Group’s LTIP awarded in FY2018 in accordance with AASB 2. The total fair value of these performance rights at grant
date is $219,406.
(i) Credit risk
The Group has also recognised a performance rights expense of $1,484 (2018: $19,827) for performance rights granted
in prior financial years in accordance with AASB 2. The total fair value of those performance rights at grant date is
$1,047,580.
As a lending business, the Group is at risk of a larger than expected number of its borrowers failing or becoming
unable to repay their loans, particularly for loans which are held on balance sheet as opposed to being funded by a
third party. While loans are assessed according to a strict Credit Manual and Credit Risk Policy as well as being
targeted at prime retail borrowers (not ‘payday’ lending customers), the loans may be unsecured and so are subject
to the capacity of the individual borrower to repay the loan.
The Group granted 4,405,286 performance rights to key management personnel as share-based payments during the year
(2018: nil rights granted).
All loan balances are monitored on an ongoing basis for collectability and AASB 9 – Financial Instruments has
been adopted in FY2019 which includes the assessment of lifetime expected credit losses as detailed at note 6.
The Group provides benefits to employees in the form of share-based payment transactions, whereby employees render
services in exchange for shares or performance rights (equity-settled transactions).
(ii) Inability to recover defaulted loans
The cost of the transactions with employees is measured by reference to the fair value at the date at which they are
granted. The fair value is determined by an external valuer using a binomial 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 the Company
(market conditions). The cost of equity-settled transactions is recognised as an expense, together with a corresponding
increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the
relevant employees become fully entitled to exercise the rights (vesting date).
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 number of rights that, in the opinion of the Directors of the
Company, will ultimately vest. This opinion is formed based on the best available information at balance date. 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. Where the terms of an equity-settled option are modified, at a
minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any
increase in the value of the transaction as a result of the modification, as measured at the date of the modification.
Default is defined by the group as the failure of the borrower to meet required contractual cashflows, this definition
is selected as it aligns with the operational analysis of the loan books. If a borrower does not meet their required loan
payments and the loan goes into default, the Group may not be able to recover the relevant portion of the value of
the loan or the cost of recovery of the loan may be deemed to be greater than the amount potentially recoverable,
even if the borrower owns assets such as a house. In this case the loan may be sold (at a loss) to a third party or
written off as a bad debt. High levels of bad debts could limit profitability and adversely affect future performance.
The Group mitigates this risk by approving loans according to a strict credit criteria. The risk is also mitigated through
the use of third party funders for a proportion of loans.
(iii) Fraudulent borrowers
There is a general ongoing risk that borrowers may deliberately fabricate evidence to support loan applications and
they have no intention of paying off their loan. The Group has procedures in place to detect fraudulent applications
and activities, however the risk of fraud cannot be totally removed.
(iv) Personal Loans may be unsecured
The Group’s loans may be issued on an unsecured basis. The Group’s reputation and financial position could be
adversely impacted if the Group’s targeted credit performance of its loan book is not met and collections and debt
recovery procedures prove less than effective.
(v) Costs of acquiring loans
The Group’s business model and on-going commercial viability is directly linked to its ability to attract suitable
borrowers and increase the volume of loans funded and managed by the Group. The Group has built its existing loan
volumes using a mix of direct channel marketing (using search engine marketing and media advertising) and
developing relationships with mortgage and finance brokers to introduce loans. The Group has forecasted the future
costs of acquiring loans in the desired volumes however these costs are subject to market forces and cannot be
predicted with certainty.
(vi) Ability to source third party funding and sell loans
The Group’s business model and on-going commercial viability is strongly linked to its ability to source sufficient
third-party funding to enable it to sell its loans and raise the funds to lend to potential borrowers.
The Group seeks to manage this risk by establishing multiple sources of loan buyers. The Group seeks to on-sell
loans to the DirectMoney Personal Loan Fund (subject to that fund having sufficient funds available) and to
institutional loan buyers.
63
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 30. Share based payments (cont.)
(a) Performance rights (cont.)
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 31. Financial risk management
Grant date
19/02/2019
19/02/2019
Expiry date
Spot price
Barrier price
Volatility
31/07/2020
31/07/2021
0.0227
0.0227
$0.04
$0.06
40%
40%
Risk-free
interest rate
Fair value at
grant date
2.50%
2.50%
$0.00764
$0.00489
The business of the Group and the industry in which it operates are subject to risk factors both of a general nature and risks
which are specific to the industry and/or the Group’s business activities.
The potential effect of these risk factors either individually, or in combination, may have an adverse effect on the future
financial and operating performance of the Group, its financial position, its prospects and the value of its shares.
The following are the key risks that specifically relate to the Group:
The Group has also recognised a performance rights expense of $89,057 (2018: $83,683) for performance rights under
the Group’s LTIP awarded in FY2018 in accordance with AASB 2. The total fair value of these performance rights at grant
(i) Credit risk
date is $219,406.
$1,047,580.
(2018: nil rights granted).
The Group has also recognised a performance rights expense of $1,484 (2018: $19,827) for performance rights granted
in prior financial years in accordance with AASB 2. The total fair value of those performance rights at grant date is
The Group granted 4,405,286 performance rights to key management personnel as share-based payments during the year
As a lending business, the Group is at risk of a larger than expected number of its borrowers failing or becoming
unable to repay their loans, particularly for loans which are held on balance sheet as opposed to being funded by a
third party. While loans are assessed according to a strict Credit Manual and Credit Risk Policy as well as being
targeted at prime retail borrowers (not ‘payday’ lending customers), the loans may be unsecured and so are subject
to the capacity of the individual borrower to repay the loan.
All loan balances are monitored on an ongoing basis for collectability and AASB 9 – Financial Instruments has
been adopted in FY2019 which includes the assessment of lifetime expected credit losses as detailed at note 6.
The Group provides benefits to employees in the form of share-based payment transactions, whereby employees render
(ii) Inability to recover defaulted loans
services in exchange for shares or performance rights (equity-settled transactions).
The cost of the transactions with employees is measured by reference to the fair value at the date at which they are
granted. The fair value is determined by an external valuer using a binomial 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 the Company
(market conditions). The cost of equity-settled transactions is recognised as an expense, together with a corresponding
increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the
relevant employees become fully entitled to exercise the rights (vesting date).
Default is defined by the group as the failure of the borrower to meet required contractual cashflows, this definition
is selected as it aligns with the operational analysis of the loan books. If a borrower does not meet their required loan
payments and the loan goes into default, the Group may not be able to recover the relevant portion of the value of
the loan or the cost of recovery of the loan may be deemed to be greater than the amount potentially recoverable,
even if the borrower owns assets such as a house. In this case the loan may be sold (at a loss) to a third party or
written off as a bad debt. High levels of bad debts could limit profitability and adversely affect future performance.
The Group mitigates this risk by approving loans according to a strict credit criteria. The risk is also mitigated through
the use of third party funders for a proportion of loans.
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the
(iii) Fraudulent borrowers
There is a general ongoing risk that borrowers may deliberately fabricate evidence to support loan applications and
they have no intention of paying off their loan. The Group has procedures in place to detect fraudulent applications
and activities, however the risk of fraud cannot be totally removed.
minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any
(iv) Personal Loans may be unsecured
The Group’s loans may be issued on an unsecured basis. The Group’s reputation and financial position could be
adversely impacted if the Group’s targeted credit performance of its loan book is not met and collections and debt
recovery procedures prove less than effective.
(v) Costs of acquiring loans
The Group’s business model and on-going commercial viability is directly linked to its ability to attract suitable
borrowers and increase the volume of loans funded and managed by the Group. The Group has built its existing loan
volumes using a mix of direct channel marketing (using search engine marketing and media advertising) and
developing relationships with mortgage and finance brokers to introduce loans. The Group has forecasted the future
costs of acquiring loans in the desired volumes however these costs are subject to market forces and cannot be
predicted with certainty.
(vi) Ability to source third party funding and sell loans
The Group’s business model and on-going commercial viability is strongly linked to its ability to source sufficient
third-party funding to enable it to sell its loans and raise the funds to lend to potential borrowers.
The Group seeks to manage this risk by establishing multiple sources of loan buyers. The Group seeks to on-sell
loans to the DirectMoney Personal Loan Fund (subject to that fund having sufficient funds available) and to
institutional loan buyers.
6 4
extent to which the vesting period has expired and (ii) the number of rights that, in the opinion of the Directors of the
Company, will ultimately vest. This opinion is formed based on the best available information at balance date. 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. Where the terms of an equity-settled option are modified, at a
increase in the value of the transaction as a result of the modification, as measured at the date of the modification.
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 31. Financial risk management (cont.)
(viii) Market risk (cont.)
b.
Interest rate risk
considered low.
The Group has $2 million of borrowings which have a fixed rate of interest and therefore interest rate risk is
The Group has $11,993,165 of cash as at 30 June 2019, some of which attracts deposit rates of interest. Any
reduction in interest rates would have an impact on the interest earned, however the impact is not deemed to be
material.
WI S R L IMIT ED | A NNUA L REPORT 2019
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 31. Financial risk management (cont.)
(vii) Liquidity risk (cont.)
Prudent liquidity risk management implies maintaining sufficient cash to ensure the ability to meet financial
obligations as they fall due. The Group manages liquidity risk by maintaining a cash reserve and continuously
monitoring forecast and actual cash flows.
Maturity Analysis – Group
2019
Financial assets
Cash and cash equivalents
Loan receivables
Trade and other receivables
Other financial assets
Total financial assets
Financial liabilities
Non-derivatives
Trade creditors
Other payables
Secured notes
Total non-derivatives
Net financial assets
2018
Financial assets
Cash and cash equivalents
Loan receivables
Trade and other receivables
Other financial assets
Total financial assets
Financial liabilities
Non-derivatives
Trade creditors
Other payables
Convertible notes*
Total non-derivatives
Net financial assets
Within 1 year
$
11,993,165
4,909,991
440,829
325,973
17,669,958
927,211
514,668
225,000
1,666,879
1 – 5 years
$
-
1,587,362
-
518,000
2,105,362
-
-
1,775,000
1,775,000
Total
$
11,993,165
6,497,353
440,829
843,973
19,775,320
927,211
514,668
2,000,000
3,441,879
16,003,079
330,362
16,333,441
Within 1 year
$
1,548,888
1,609,247
273,563
339,392
3,771,090
744,518
601,491
373,000
1,719,009
1 – 5 years
$
-
2,073,686
-
518,000
2,591,686
-
-
-
-
Total
$
1,548,888
3,682,933
273,563
857,392
6,362,776
744,518
601,491
373,000
1,719,009
2,052,081
2,591,686
4,643,767
* The repayment of the notes is linked to the repayment profile of the loans which provide security for the notes. Given the option the Group has
to repay these notes prior to their maturity, the notes are shown as being current.
(viii) Market risk
a. Price risk
The Group’s investment in the DirectMoney Personal Loan Fund (Fund) is exposed to variations in the unit price
of the Fund. The unit price may vary subject to the credit performance of the loans held in the Fund. As the
Group is the Seller of and Investment Manager of the Fund, the Group has a sound knowledge of the price risk
associated with its investment. To date, the unit price has not declined in value.
65
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 31. Financial risk management (cont.)
(vii) Liquidity risk (cont.)
Financial report
For the year ended 30 June 2019
Notes to the Financial Statements.
Note 31. Financial risk management (cont.)
(viii) Market risk (cont.)
Prudent liquidity risk management implies maintaining sufficient cash to ensure the ability to meet financial
obligations as they fall due. The Group manages liquidity risk by maintaining a cash reserve and continuously
monitoring forecast and actual cash flows.
Within 1 year
1 – 5 years
b.
Interest rate risk
The Group has $2 million of borrowings which have a fixed rate of interest and therefore interest rate risk is
considered low.
The Group has $11,993,165 of cash as at 30 June 2019, some of which attracts deposit rates of interest. Any
reduction in interest rates would have an impact on the interest earned, however the impact is not deemed to be
material.
Maturity Analysis – Group
2019
Financial assets
Cash and cash equivalents
Loan receivables
Trade and other receivables
Other financial assets
Total financial assets
Financial liabilities
Non-derivatives
Trade creditors
Other payables
Secured notes
Total non-derivatives
Net financial assets
2018
Financial assets
Cash and cash equivalents
Loan receivables
Trade and other receivables
Other financial assets
Total financial assets
Financial liabilities
Non-derivatives
Trade creditors
Other payables
Convertible notes*
Total non-derivatives
Net financial assets
$
11,993,165
4,909,991
440,829
325,973
17,669,958
927,211
514,668
225,000
1,666,879
$
1,548,888
1,609,247
273,563
339,392
3,771,090
744,518
601,491
373,000
1,719,009
1,587,362
518,000
2,105,362
1,775,000
1,775,000
2,073,686
518,000
2,591,686
$
-
-
-
-
$
-
-
-
-
-
-
Total
$
11,993,165
6,497,353
440,829
843,973
19,775,320
927,211
514,668
2,000,000
3,441,879
Total
$
1,548,888
3,682,933
273,563
857,392
6,362,776
744,518
601,491
373,000
1,719,009
16,003,079
330,362
16,333,441
Within 1 year
1 – 5 years
* The repayment of the notes is linked to the repayment profile of the loans which provide security for the notes. Given the option the Group has
to repay these notes prior to their maturity, the notes are shown as being current.
2,052,081
2,591,686
4,643,767
(viii) Market risk
a. Price risk
The Group’s investment in the DirectMoney Personal Loan Fund (Fund) is exposed to variations in the unit price
of the Fund. The unit price may vary subject to the credit performance of the loans held in the Fund. As the
Group is the Seller of and Investment Manager of the Fund, the Group has a sound knowledge of the price risk
associated with its investment. To date, the unit price has not declined in value.
6 6
Wisr Limited
Independent auditor's report to the members of Wisr Limited
Independent Auditor’s Report to the Members of Wisr Limited.
WI S R L IMIT ED | A NNUA L REPORT 2019
Wisr Limited
Directors’ declaration
Directors’ Declaration.
The directors of the Company declare that, in the opinion of the directors:
(a)
the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the financial position and performance of the consolidated entity; and
complying with Australian Accounting Standards, including the interpretations, and the Corporations
Regulations 2001;
the financial statements and notes thereto also comply with International Financial Reporting Standards, as
disclosed in Note 1;
the directors have been given the declarations required by s.295A of the Corporations Act 2001; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable;
(b)
(c)
(d)
Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the Corporations Act 2001.
...............................................................
John Nantes
Director
Sydney
30 September 2019
67
Wisr Limited
Directors’ declaration
Directors’ Declaration.
Wisr Limited
Independent auditor's report to the members of Wisr Limited
Independent Auditor’s Report to the Members of Wisr Limited.
The directors of the Company declare that, in the opinion of the directors:
(a)
the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the financial position and performance of the consolidated entity; and
complying with Australian Accounting Standards, including the interpretations, and the Corporations
(b)
the financial statements and notes thereto also comply with International Financial Reporting Standards, as
the directors have been given the declarations required by s.295A of the Corporations Act 2001; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
Regulations 2001;
disclosed in Note 1;
(c)
(d)
due and payable;
Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the Corporations Act 2001.
...............................................................
John Nantes
Director
Sydney
30 September 2019
6 8
WI S R L IMIT ED | A NNUA L REPORT 2019
Wisr Limited
Independent auditor's report to the members of Wisr Limited
Independent Auditor’s Report to the Members of Wisr Limited.
Wisr Limited
Independent auditor's report to the members of Wisr Limited
Independent Auditor’s Report to the Members of Wisr Limited.
69
Wisr Limited
Independent auditor's report to the members of Wisr Limited
Independent Auditor’s Report to the Members of Wisr Limited.
Wisr Limited
Independent auditor's report to the members of Wisr Limited
Independent Auditor’s Report to the Members of Wisr Limited.
70
WI S R L IMIT ED | A NNUA L REPORT 2019
Wisr Limited
ASX additional information
ASX Additional Information.
Wisr Limited
ASX additional information
ASX Additional Information.
Additional information required by the ASX Limited Listing Rules and not disclosed elsewhere in this report is set out below.
a. Distribution of shareholders
The distribution of issued capital as at 30 September 2019 was as follows:
Size of Holding
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and Over
Total
Number of holders
Number of securities
131
250
343
1,034
469
2,227
34,650
870,254
2,746,564
44,925,330
777,859,054
826,435,852
Percentage of
securities
(%)
0.00
0.11
0.33
5.44
94.12
100.00
e. Twenty largest shareholders
The twenty largest shareholders of quoted equity securities as at 30 September 2019 are as follows:
Shareholder
ADCOCK PRIVATE EQUITY PTY LIMITED
Continue reading text version or see original annual report in PDF format above