ACN 168 751 746
Annual Report30 June 2016F
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DIRECTORSRuwanWeerasooriya–ManagingDirectorJackMatthews–Non-executiveChairmanBrandonMunro–Non-executiveDirector
COMPANYSECRETARYIanHobson
REGISTEREDOFFICESuite5,95HayStreetSubiacoWA6008Telephone: +61893888290Facsimile: +61893888256Email: [email protected]: www.rewardleholdings.com
PRINCIPALPLACEOFBUSINESSLevel4,10-16QueenStreetMelbourneVIC3000
SHAREREGISTRYAutomicRegistryServicesSuite1A,Level1,7VentnorAvenueWestPerthWA6005Telephone: +61893242099Facsimile: +61893212337
AUDITORSMooreStephensAudit(Vic)Level18,530CollinsStreet,MelbourneVIC3000
SOLICTORSNovaLegalGroundFloor,10OrdStreet,WestPerthWA6005BANKWestpacBankingCorporationLimitedAUSTRALIANSECURITIESEXCHANGEASXCodeRXH
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LETTER FROM THE BOARD OF DIRECTORS TO SHAREHOLDERS
DearShareholders,Over the past year, Rewardle has continued to develop its transaction based social network, connecting
consumers with their favourite places. Put simply, Rewardle has digitised the traditional “buy 9, get 1 free” paper
punch card to provide extended utility by adding prepayment , mobile ordering, mobile payments and social
media integrations while also offering merchants sophisticated data marketing capabilities.
Rewardle’s clients are your typical neighbourhood businesses - cafés, yoga studios, butchers, hairdressers etc.
These time poor merchants, with limited operational and marketing support, don’t have access to the digital tools
of large retail chains but desperately need them to connect with customers in an increasingly digital and
connected world.
During the 2016 financial year, the Rewardle team, led by founder and Managing Director Ruwan Weerasooriya,
has grown the national network from approximately 4,000 Merchants and over 1,000,000 Members to over 5,400
merchants and over 1,900,000 members.
During the year the company continued to develop brand partnerships with companies/brands such as KitKat,
Cellarmasters, Brisbane Lions, Mövenpick, Commonwealth Bank of Australia and Vodafone.
During the second half of the year, the Company commenced a systematic program to convert trial merchants
into monthly subscription customers with more than 1,000 Merchants signing up to become paying Merchants by
30 June 2016.
Rewardle is committed to its mission to provide local SME Merchants with the digital engagement tools and
business intelligence typically only available to large retail chains by unlocking the power of mobile computing,
cloud based software and Big Data analysis.
In the 2017 financial year, the Company will continue to focus on merchant subscription conversions and on
other ways to effectively monetise its substantial merchant network.
On behalf of the Board of Rewardle, I would like to thank you for your support of the Company, and I look forward to an exciting and successful 2017 financial year for Rewardle.YourssincerelyJackMatthewsChairman
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RewardleHoldingsLimited(“Rewardle”or“theCompany”)isanAustralianbasedcompany.CORPORATEDuringtheyearandtothedateofthisreport:
i. TheCompany,on3July2015, issuedtostaff thefollowingoptionstosubscribeforordinaryfullypaidshares:
a. 60,000unlistedperformanceoptionsexercisableat20centseachexpiring7February2018;b. 836,500unlistedperformanceoptionsexercisableat25centseachexpiring7February2018;c. 550,000unlistedperformanceoptionsexercisableat30centseachexpiring7February2018;andd. 1,000,000unlistedoptionsexercisableat30centseachexpiring31March2018.
ii. On10August2015,theCompanyissued87,500fullypaidordinarysharesfollowingtheexerciseof87,500unlistedperformanceoptionsexercisableat20centseachonorbefore7February2018.
iii. On11September2015,theCompanyissued150,000fullypaidordinarysharesfollowingtheexerciseof150,000unlistedoptionsexercisableat20centseachonorbefore30June2017.
iv. On17August2016,theCompanyissued43,750,000sharesat$0.05eachfor$2,187,500.v. On2September2016,theCompanyissued13,296,934sharesat$0.05eachfor$664,847.
COMPANYOVERVIEWTheRewardlePlatformisamarketingandtransactionalplatformthatcombinesmembership,points,rewards,mobileordering,paymentsandsocialmediaintegrationintoasinglecloudbasedplatformpoweredbyBigDataanalysis.Rewardleispositionedtobealeadingplayerastheworldsofsocialmedia,marketing,mobileandpaymentsconvergetotransformhowweconnect,shareandtransact.TheCompanyisledbyanexperiencedentrepreneurialteamwithasuccessfulbackgroundinInternetandmediabusinesses.DuringtheyeartheCompanyhascontinuedtobuildontheNetworkeffectsinherentwithintheRewardlePlatform.InJanuary2016,theCompanycommencedconvertingfreetrialMerchantstopayingwithexcellentearlyresults.ThishasassistedtheCompanyinincreasingitsrevenueanddecreasingitsloss,summarisedasfollows:
REVIEW OF OPERATIONS
30 June 2016$
30 June 2015$
Revenue 2,280,035 1,238,654
Loss before taxation and extraordinary items 4,516,653 6,280,903
Extraordinary items 0 0
Loss after taxation and extraordinary items 4,516,653 6,280,903
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REVIEW OF OPERATIONS
Early mover advantage established through development of proprietary technology platform and building substantial network scale
Critical mass established through the recruitment of over 5400 local businesses and approximately 2m Members
Network effect powering ongoing organic growth and serving as barrier to entry for potential competitors
19% of free trialist Merchants that were part of building critical mass have been converted to paying Merchants over recent months
Use of free trials as standard Merchant onboarding offer ceased as of 1 July 2016, new Merchants pay immediately to join the Rewardle Network
Consistent traction in development of brand advertising and recurring, monthly Merchant Services (SaaS) fees
Multiple opportunities being developed by management to leverage the growing network and platform data into additional revenue streams
Scalable technology platform business model with largely fixed costs is designed to deliver highly profitable marginal revenue over time
Rewardle offers investors exposure to the high growth digital marketing and mobile payments sectors.
The Company is uniquely positioned to capture the digital migration of marketing budgets and customer relationships of up to 200,000 local businesses in Australia
Rewardle offers a digital marketing and payments solution to local independent businesses that is underpinned by a proprietary membership, points, rewards and payments platform.
The Company has captured a substantial early mover advantage through platform development and recruitment of over 5400 local businesses and nearly 2m Members since founding in 2012.
Initial monetisation is being demonstrated through consistent brand advertising and growing, recurring, Merchant Services (SaaS) fees.
As a highly scalable technology business with largely fixed costs there is substantial potential in development of new revenue streams that leverage the Company’s consistently growing network and platform data.
While continuing to build existing revenue streams, management is working on the development of new revenue opportunities through a variety of approaches including building, partnering and acquisition.
OPPORTUNITY SUMMARY
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REVIEW OF OPERATIONS
STRATEGY
NETWORK EFFECTS CONTINUING TO DRIVE NETWORK GROWTH AND ENGAGEMENT
EXECUTION
Step 1.
Buildthe Network
Step 2.
Educateand Engage
Step 3.
Mone�sethe Network
Step 4.
Addi�onalservices
NOW
Use free trials to build Merchant and
Member Network
Merchant andMember Network
offered asaudience to brands
Brand partnershipsbuild on value
proposi�on to converttrialists to paying
subscribers
Leverage Pla�orm,brand ac�vity and
Network scale to recruit new Merchants without
free trial offer
Na�onal Network of over 5,400 Merchants and approaching 2m Members
Consistent trac�on withbrand partners genera�ng
short term revenue andsuppor�ng Merchant and
Member engagement
1,000+ trialists or 10% ofMerchant Network converted
to paying uder ongoingconversion program
Use of free trial as standardon boarding offer ceased 1
July 2016 and new Merchantsnow pay immediately to join
the Network
NOW
14.518.8
23.027.2
31.7
Jun 15 Sep 15 Dec 15 Mar 16 Jun 16
Check-ins growing fastest (m)
1.081.33
1.541.73 1.90
Jun 15 Sep 15 Dec 15 Mar 16 Jun 16
Members growing faster (m)
4,0774,721 5,022 5,145 5,420
Jun 15 Sep 15 Dec 15 Mar 16 Jun 16
Merchants growing
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BUSINESS SUMMARY
CONSISTENT TRACTION WITH ADVERTISING PARTNERS IS BEING ENHANCED AS NETWORK AND ENGAGEMENT GROWS
CEASED FREE TRIALS AS OF JULY 1 2016, CONTINUING TO GROW THE NETWORK WITH MERCHANTS PAYING IMMEDIATELY
While unlikely to pay at present, low engagement status can be upgraded through education and support which Rewardle is conducting. In the meantime, these Merchants continue to acquire Members and provide valuable Network density while paying Merchant coverage develops.
DEMONSTRATING CONSISTENT TRACTION IN CONVERTING TRIALIST MERCHANTS TO PAYING RECURRING MONTHLY FEES
2012 July 2016July 2015
Uber
Ben and JerrysOpenair cinema
AirAsia KitKat
Quickflix CellarmastersLi�le Shop of Horrors
Fiddler onthe Roof
CommonwealthBank
BrisbaneLions
EmporiumHotel Mövenpick Vodafone
5,420
1,030Converted
to paying +2,600Strong to moderate engagement
likely to pay +1,790Low engagement
unlikely to pay at present
Management summary of Merchant Network engagement and propensity to pay*
Ongoing educa�on, engagement and conversion program
Free trials to buildini�al cri�cal scale
Massive scope to scale with less than 3% of the addressable market currently using Rewardle
Free trials ceased as of 1 July, new Merchants pay immediately to join Merchant Network and use Rewardle
Set up fee Basic monthlyfee
Performancefees
Addi�onalservices
NEXT
Addressable market of up to
200,000SMEs in sectors where
loyalty programscommonly offeredF
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BUSINESS SUMMARY
SET TO LEVERAGE EARLY MOVER ADVANTAGE TO GROW NETWORK AND REVENUE
Early move advantage capturedthrough investment in pla�orm and network development
Macro technology trendssupport business model
Network effect supportsgrowth and act as barrier
for compe�tors
Demonstra�ng ini�alcommercial trac�on
with substan�al upside
Highly scalable business modeland massive addressable market
Highly scaleable pla�orm,fast growing network
Largely fixed cost basebusiness model with scope
to increase scale by up to 35x
Set to yield highlyprofitable marginal revenue
Con�nue growing ini�al revenuesteams
Brand Adver�singConversion of trialist Merchants to paying
recurring monthly fees
Acquisi�on of new Merchantsto pay recurring monthly
fees immediately
NEXT
Develop addi�onal revenuestreams that leverage network, pla�orm data, and opera�ons
Build Partner Buy
NOW
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YourdirectorspresenttheirreportontheCompanyanditscontrolledentitiesfortheyearended30June2016.DIRECTORSThenamesoftheDirectorsoftheCompanyinofficeduringthefinancialyearanduptothedateofthisreportareasfollows:RuwanWeerasooriya–ManagingDirectorJackMatthews–Non-executiveChairmanBrandonMunro–Non-executiveDirectorDirectorshavebeeninofficesincethestartofthefinancialyearuntilthedateofthisreportunlessotherwisestated.ThefollowingpersonsheldthepositionofCompanySecretaryduringthefinancialyear:IanHobsonTheparticularsofthequalifications,experienceandspecialresponsibilitiesofeachDirectorareasfollows:RuwanWeerasooriya–ManagingDirectorRuwanWeerasooriyaisthefounderandManagingDirectorofRewardle.Over20yearshehasconsistentlystayedattheforefrontofthedisruptioncausedbytheadventandproliferationoftheinternet.Hehasestablished,builtandoperatedarangeoftechnologyandmediarelatedbusinesseswithmultiplesuccessfuloutcomesincludingtradesalesto ASX listed industry leaders. In 2013 he was named in the Top 50 Australian Startup Influencers byStartupdaily.com.au. He established Rewardle in 2012 to provide Local SMEMerchantswith the digital customerengagementtoolsandbusinessintelligencetypicallyonlyavailabletolargeretailchainsbyunlockingthepowerofmobilecomputing,cloudbasedsoftwareandbigdataanalysis.Atthedateofthisreport,MrWeerasooriyahasinterestsinthefollowingsharesandoptionsoftheCompany:
§ 107,500,000ordinaryshares§ 9,375,000unlistedoptionsexercisableat$0.20eachandexpiring30June2017§ 10,000,000performanceoptionsexercisableat$0.20eachandexpiring7February2018
DuringthepastthreeyearsMrWeerasooriyahasheldnootherlistedcompanydirectorships.JackMatthews–Non-ExecutiveChairmanJackMatthewsholdsaB.A.inPhilosophyfromTheCollegeofWilliam&Mary(Williamsburg,VA)andisamemberoftheAustralianInstituteofCompanyDirectorsandtheNewZealandInstituteofDirectors.JackMatthewsbringsextensiveknowledgeoftheevolvingdigitalmedialandscape,strongcommercialnetworksandexperience inexecutingandsuccessfully integratingdigitalbusinessacquisitions. Hehasheldanumberof seniorleadershippositionswithinthedigitalmediaandsubscriptiontelevisionindustriesinAustraliaandNewZealand.JackplayedanintegralroleinthesuccessofFairfax’sdigitalstrategy,firstasCEOofFairfaxDigitalandmostrecentlyasCEOofFairfaxMetropolitanMedia.Atthedateofthisreport,MrMatthewshasinterestsinthefollowingsharesandoptionsoftheCompany:
§ 266,667ordinaryshares§ 1,150,000unlistedoptionsexercisableat$0.20eachandexpiring30June2017
DuringthepastthreeyearsMrMatthewshasheldthefollowinglistedcompanydirectorships:
§ TrilogyInternationalLimited(NewZealand)–15August-present§ APNOutdoorGroupLimited–17October2014-present
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BrandonMunro–Non-ExecutiveDirectorBrandonMunro holds a Bachelor of Economics and Bachelor of Laws from University ofWestern Australia, andGraduateDiploma inAppliedFinanceand Investment fromSecurities InstituteofAustralia. He is a Fellowof theFinancial Services InstituteofAustralia (Finsia) and is aGraduateMemberof theAustralian Instituteof CompanyDirectors. Brandonbringsregulatory,governance,mergersandacquisitionsandcapitalmarketsknowledgetotheteam.Atthedateofthisreport,MrMunrohasinterestsinthefollowingsharesandoptionsoftheCompany:
§ 3,175,000ordinaryshares§ 1,300,000unlistedoptionsexercisableat$0.20eachandexpiring30June2017
DuringthepastthreeyearsMrMunrohasheldthefollowingotherlistedcompanydirectorships:
§ Department13InternationalLimited–4April2014–18December2015§ NovattiGroupLimited–12October2015–present§ BannermanResourcesLimited–9March2016-present
IanHobson–CompanySecretaryIanHobsonisaFellowCharteredAccountantandCharteredSecretarywhoprovidescompanysecretarialandfinancialcontrollerservicestoASXlistedcompanies.Ianhashad30years’experienceintheprofession.Ianisexperiencedinduediligence,transactionsupport,capitalraisingandcorporategovernance.CORPORATEINFORMATIONCorporateStructureRewardleHoldings Limited is a limited liability company that is incorporatedanddomiciled inAustralia.RewardleHoldings Limited (Group)hasprepareda consolidated financial report incorporating theentities that it controlledduringthefinancialyearasfollows: RewardleHoldingsLtd - parententity RewardlePtyLtd - 100%ownedcontrolledentityNatureofOperationsandPrincipalActivitiesThe principal continuing activities during the year of entitieswithin the consolidated entitywasDigital CustomerEngagementplatformforlocalSMEmerchants.OPERATINGANDFINANCIALREVIEWReviewofOperationsAreviewofoperationsforthefinancialyearandtheresultsofthoseoperationsarecontainedwithintheCompanyreview.OperatingResultsConsolidatedlossafterincometaxforthefinancialyearwas$4,516,653(2015:$6,280,903loss).FinancialPositionAt30 June2016, theGrouphadnetassetsof$467,287 (2015:$4,639,649)withcash reservesof$906,533 (2015:$4,859,008).
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FinancingandInvestingActivitiesThecompanyissuedthefollowingsecuritiesduringtheyear:
§ 60,000unlisted$0.20performanceoptionsexpiringon7February2018;§ 836,500unlisted$0.25performanceoptionsexpiringon7February2018;§ 550,000unlisted$0.30performanceoptionsexpiringon7February2018;§ 1,000,000unlisted$0.30optionsexpiringon31March2018;§ 87,500ordinaryfullypaidsharesontheexerciseof$0.20optionsexpiring7February2018;and§ 150,000ordinaryfullypaidsharesontheexerciseof$0.20optionsexpiring30June2017.
DividendsNodividendswerepaidduringtheyear(2015:nil)andnorecommendationismadeastothepaymentofdividends.SIGNIFICANTCHANGESINTHESTATEOFAFFAIRSSignificantchangesinthestateofaffairsoftheGroupduringthefinancialyeararedetailedinthecompanyreview.Intheopinionofthedirectors,therewerenoothersignificantchangesinthestateofaffairsoftheCompanythatoccurredduringthefinancialyearunderreviewnototherwisedisclosedinthisreportorinthefinancialreport.EVENTSSINCETHEENDOFTHEFINANCIALYEARNomattersor circumstanceshavearisen, since theendof the financial year,which significantly affected,ormaysignificantlyaffect,theoperationsofthegroup,theresultsofthoseoperations,orthestateofaffairsoftheGroupinsubsequentfinancialyears,otherthanasfollowsoroutlinedinthecompanyreviewwhichiscontainedinthisAnnualReport:On9August2016,theCompanyannouncedanacceleratedonefortwoproratanon-renounceableentitlementofferofupto65,694,508fullypaidordinarysharesat$0.05eachtoraise$3,284,725(beforecosts).TheEntitlementOffercomprisedanacceleratedinstitutionalcomponentandaretailcomponent.TheInstitutionalEntitlementOfferwascompletedon11August2016,with43,750,000sharesissuedon17August2016at$0.05each, raising$2,187,500 (before costs). TheCompany’sManagingDirectorand founder,MrRuwanWeerasooriya,subscribedfor20,000,000sharesofhisentitlementundertheInstitutionalEntitlementOffer.ArisingfromthepartialunderwritingoftheshortfallsharesundertheInstitutionalEntitlementOffer,2,000,000sharesweresubscribedforbytheunderwriter(SequoiNomineesPtyLtd),acompanyinwhichMrBrandonMunro,aDirectoroftheCompany,isadirectorandshareholder.TheRetailEntitlementOfferwascompletedon31August2016.On2September2016,9,315,818shareswereissuedundertheRetailEntitlementOfferacceptancesand3,981,116sharesundertheshortfallapplications,at$0.05each,raisinga total of $664,847.MrBrandonMunro subscribed forhis entitlementof 391,667 sharesunder theRetailEntitlementOffer.LIKELYDEVELOPMENTSANDEXPECTEDRESULTSTheGroupwillcontinuetopursueitsprincipalactivityofrollingoutitsDigitalCustomerEngagementplatformforlocalSMEmerchants.
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MEETINGSOFDIRECTORSThenumbersofmeetingsofdirectorsheldduringtheyearandthenumbersofmeetingsattendedbyeachdirectorwereasfollows:
BoardofDirectors Numbereligibletoattend NumberattendedRWeerasooriya 6 6JMatthews 6 6BMunro 6 6
REMUNERATIONREPORT(AUDITED)This report details the nature and amount of remuneration for each director and keymanagement personnel ofRewardleHoldingsLimited.Theinformationprovidedintheremunerationreportincludesremunerationdisclosuresthatareauditedasrequiredbysection308(3C)oftheCorporationsAct2001.ForthepurposesofthisreportKeyManagementPersonneloftheGrouparedefinedasthosepersonshavingauthorityand responsibility for planning, directing and controlling the major activities of the group, directly or indirectly,includinganydirector(whetherexecutiveorotherwise)oftheparentcompany.ThefollowingpersonsweredirectorsofRewardleHoldingsLimitedduringthefinancialyear:RuwanWeerasooriya ManagingDirectorJackMatthews Non-executiveChairmanBrandonMunro Non-executiveDirectorTherewerenootherpersonsthatfulfilledtheroleofakeymanagementpersonduringtheyear,otherthanthosedisclosedasDirectors.Theremunerationreportissetoutunderthefollowingmainheadings:
• Remunerationpolicy• Remunerationstructure• Employmentcontractsofdirectorsandseniorexecutives• Detailsofremunerationforyear• Compensationoptionstokeymanagementpersonnel• Sharesissuedtokeymanagementpersonnelonexerciseofcompensationoptions• VotingandcommentsmadeattheCompany’slastAnnualGeneralMeeting• Loanswithkeymanagementpersonnel• Additionaldisclosuresrelatingtokeymanagementpersonnel• Othertransactionswithkeymanagementpersonnel
RENUMERATIONGOVERNANCERemunerationCommitteeThe full Board carries out the roles and responsibilities of the Remuneration Committee and is responsible fordeterminingandreviewingthecompensationarrangementsfortheDirectorsthemselves,theManagingDirectorandanyExecutives.Executive remuneration is reviewed annually having regard to individual and business performance, relevantcomparativeremunerationandinternalandindependentexternaladvice.
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A. RemunerationpolicyTheboardpolicy istoremuneratedirectorsatmarketratesfortime,commitmentandresponsibilities. Theboarddeterminespaymentstothedirectorsandreviewstheirremunerationannually,basedonmarketpractice,dutiesandaccountability.Independentexternaladviceissoughtwhenrequired.Themaximumaggregateamountofdirectors’feesthatcanbepaidissubjecttoapprovalbyshareholdersinageneralmeeting,fromtimetotime.However,toaligndirectors’ interests with shareholders’ interests, the directors are encouraged to hold shares and options in thecompany.TheGroup’saimistoremunerateatalevelthatreflectsthesizeandnatureoftheGroup.GroupofficersanddirectorsareremuneratedtoalevelconsistentwiththesizeoftheGroup.Thedirectorsreceiveasuperannuationguaranteecontributionrequiredbythegovernment,whichiscurrently9.5%,anddonotreceiveanyotherretirementbenefits.Someindividuals,however,maychoosetosacrificepartoftheirsalarytoincreasepaymentstowardssuperannuation.Allremunerationpaidtodirectorsandexecutivesisvaluedatthecosttothecompanyandexpensed.TheBoardbelievesthatithasimplementedsuitablepracticesandproceduresthatareappropriateforanorganisationofthissizeandmaturity.TheGroupdidnotpayanyperformance-basedcomponentofremunerationduringtheyearotherthanincentiveandperformanceoptionsgrantedtodirectorsasdisclosedinNoteDbelow.B. RemunerationstructureIn accordance with best practice corporate governance, the structure of non-executive directors and executivecompensationisseparateanddistinct.UseofRemunerationConsultantsTheBoarddoesnotseektheadviceofRemunerationConsultantsinfulfillingitsrolesandresponsibilitiesassociatedwiththeRemunerationCommitteeanddeterminingcompensationforDirectors,theManagingDirectorandanyKeyManagementPersonnel.Non-executiveDirectorCompensationObjectiveTheBoardseekstosetaggregatecompensationatalevelthatprovidesthecompanywiththeabilitytoattractandretaindirectorsofthehighestcalibre,whilstincurringacostthatisacceptabletoshareholders.StructureTheConstitutionandtheASXListingRulesspecifythattheaggregatecompensationofnon-executivedirectorsshallbedeterminedfromtimetotimebyageneralmeeting.Anamountnotexceedingtheamountdeterminedisthendivided between the directors as agreed. The latest determination approved by shareholders was an aggregatecompensationof$500,000peryear.The amount of aggregate compensation sought to be approved by shareholders and the manner in which it isapportionedamongstdirectorsisreviewedannually.TheBoardmayconsideradvicefromexternalconsultantsaswellasthefeespaidtonon-executivedirectorsofcomparablecompanieswhenundertakingtheannualreviewprocess.Non-Executive Directors’ remuneration may include an incentive portion consisting of options, as consideredappropriatebytheBoard,whichmaybesubjecttoShareholderapprovalinaccordancewithASXlistingrules.
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ExecutiveCompensation
ObjectiveTheentityaimstorewardexecutiveswithalevelandmixofcompensationcommensuratewiththeirpositionandresponsibilitieswithintheentitysoasto:
§ rewardexecutivesforcompanyandindividualperformanceagainsttargetssetbyappropriatebenchmarks;§ aligntheinterestsofexecutiveswiththoseofshareholders;§ linkrewardswiththestrategicgoalsandperformanceofthecompany;and§ ensuretotalcompensationiscompetitivebymarketstandards.
StructureIndeterminingthelevelandmake-upofexecutiveremuneration,theBoardnegotiatesaremunerationtoreflectthemarketsalaryforapositionandindividualofcomparableresponsibilityandexperience.DuetothelimitedsizeoftheCompanyandofitsoperationsandfinancialaffairs,theuseofaseparateremunerationcommitteeisnotconsideredappropriate.Remunerationisregularlycomparedwiththeexternalmarketbyparticipationinindustrysalarysurveysandduring recruitment activities generally. If required, theBoardmay engage an external consultant to provideindependentadviceintheformofawrittenreportdetailingmarketlevelsofremunerationforcomparableexecutiveroles.Compensationmayconsistofthefollowingkeyelements:
§ FixedCompensation;§ VariableCompensation;§ ShortTermIncentive(STI);and§ LongTermIncentive(LTI).
Remunerationconsistsofafixedremunerationandalongtermincentiveportionasconsideredappropriate.FixedRemunerationTheleveloffixedremunerationissetsoastoprovideabaselevelofremunerationwhichisbothappropriatetothepositionandiscompetitiveinthemarket.FixedremunerationisreviewedannuallybytheBoardhavingregardtotheCompany and individual performance, relevant comparable remuneration in the mining exploration sector andexternaladvice.Thefixedremunerationisabasesalaryormonthlyconsultingfee.VariablePay—LongTermIncentivesThe objective of long term incentives is to reward directors/executives in amannerwhich aligns this element ofremunerationwiththecreationofshareholderwealth.Theincentiveportionispayablebaseduponattainmentofobjectivesrelatedtothedirector’s/executive’sjobresponsibilities.Theobjectivesvary,butallaretargetedtorelatedirectlytotheCompany’sbusinessandfinancialperformanceandthustoshareholdervalue.Longtermincentives(LTIs)grantedtodirectors/executivesaredeliveredintheformofoptions.LTIgrantstoExecutivesaredeliveredintheformofemployeeshareoptions.TheseoptionsareissuedatanexercisepricedeterminedbytheBoardatthetimeofissue.Theemployeeshareoptionsonissueduringtheyearvestoveraselectedperiodnotbasedonserviceconditions.TheobjectiveofthegrantingofoptionsistorewardExecutivesinamannerwhichalignstheelementofremunerationwiththecreationofshareholderwealth.AssuchLTIsaremadetoExecutiveswhoareabletoinfluencethegenerationofshareholderwealthandthushaveanimpactontheCompany’sperformance.ThelevelofLTIgrantedis,inturn,dependentontheCompany’srecentsharepriceperformance,theseniorityoftheExecutive,andtheresponsibilitiestheExecutiveassumesintheCompany.Typically,thegrantofLTIsoccursatthecommencementofemploymentorintheeventthattheindividualreceivesapromotionand,assuch,isnotsubsequentlyaffectedbytheindividual’sperformanceovertime.
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C. EmploymentcontractsofdirectorsandotherkeymanagementpersonnelTheemploymentarrangementsofthedirectorsarenotformalisedinacontractofemploymentexceptasfollows:§ MrRuwanWeerasooriyawhoenteredintoanexecutiveservicesagreement(ManagingDirector)onorabout20July
2014whichcommenceduponlistingontheASXon7October2014.TheManagingDirector’sremunerationpackagecomprises10,000,000performanceoptionswhichareexercisableintosharesintheCompanywhenmilestonesareachievedwithinprescribedtimeframes,atanexercisepriceof$0.20pershareonorbefore7February2018,andanannual salary of $150,000 plus statutory superannuation. The service agreement has no fixed term and MrWeerasooriyaortheCompanycanterminatetheagreementuponprovisionofsixmonthswrittennotice.
D. DetailsofremunerationforyearDetailsoftheremunerationofeachDirectorandotherkeymanagementpersonneloftheCompany,includingtheirpersonally-relatedentities,duringtheyearwasasfollows:
ShortTermBenefits
Post-Employment
ShareBasedPayments
Total$
Remunerationconsistingof
optionsduringtheyear
%
Remuneration
basedonperformance
%
Director
Year
Salaryandfees$
Superannuation
$
Options
$
RWeerasooriya 20162015
150,000112,500
14,25010,687
-705,000
164,250828,187
-85
-85
JMatthews 20162015
36,53027,397
3,4702,603
--
40,00030,000
--
--
BMunro 20162015
36,53027,397
3,4702,603
--
40,00030,000
--
--
Total 20162015
223,060167,294
21,19015,893
-705,000
244,250888,187
-79
-79
E. CompensationoptionstokeymanagementpersonnelTherewerenooptionsgrantedasequitycompensationbenefitstoDirectorsandotherkeymanagementpersonneloftheCompanyduringtheyear.
Duringthepreviousyear,thefollowingperformanceoptionsweregrantedasincentivesforperformancetotheManagingDirector.Theoptionswereissuedfreeofcharge.Eachoptionentitlestheholdertosubscribeforonefullypaidordinaryshare in the Company, exercisablewhen performancemilestones are achievedwithin prescribed timeframes, at anexercisepriceof$0.20pershareonorbefore7February2018.
Director
Numbergranted
No.vestedduringthe
year
Grantdate
Valueperoptionat
grantdate¹$
Exercise
price$
Firstexercise
date
Lastexercise
date
RWeerasooriya 10,000,000 10,000,000 25/07/2014 $0.0705 $0.20 11/11/2014 7/02/2018
Total 10,000,000 10,000,000 ¹ValuationwasdoneusingBlackScholesmodel
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16 REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
Theperformancemilestonestobeachievedwithintheprescribedtimeframesare:
TimefromlistingonASX(7October2014)
PerformanceOptionmilestones 12months 18months 24months 36months
1. 5,000Merchantsor500,000Members 2,500,000 1,250,000 500,000 -2. 10,000Merchantsor1,000,000Members 2,500,000 1,250,000 500,000
PerformanceOptionmilestones 15months 21months 27months 39months
3. Revenueof$250kinrolling3monthperiod* 2,500,000 1,250,000 500,000 -
4. Revenueof$500kforrolling3monthperiod* 2,500,000 1,250,000 500,000
*Note:Therolling3monthperiodmustbewhollysatisfiedwithinthestatedtimeframesfromlistingontheASX.
Milestones1&2wereachievedby9June2015with1,000,000membersregistered,eightmonthsafterlistingontheASX.5,000,000performanceoptionsbecameexercisable.Milestone3wasachievedon30June2016,twentymonthsafterlistingontheASX.1,250,000performanceoptionsbecameexercisable.
F. SharesissuedtokeymanagementpersonnelonexerciseofcompensationoptionsNoshareswereissuedtoDirectorsonexerciseofcompensationoptionsduringtheyear.
G. VotingandcommentsmadeattheCompany’slastAnnualGeneralMeetingTheCompanyreceived100%ofvotes“for”theadoptionoftheremunerationreportforthe2015financialyear.TheCompanydidnotreceiveanyspecificfeedbackattheAGMorthroughouttheyearonitsremunerationpractices.H. LoanswithkeymanagementpersonnelTherewerenoloanstokeymanagementpersonnelortheirrelatedentitiesduringthefinancialyear.
I. AdditionaldisclosuresrelatingtokeymanagementpersonnelShareholdingsThenumberof shares in theCompanyheldduring the financial yearbyeachDirectorandothermembersof keymanagementpersonneloftheConsolidatedEntity,includingtheirpersonallyrelatedparties,issetoutbelow:Director
BalanceatBeginningofYear
Receivedas
Remuneration
Options
Exercised
Acquired/(disposed)
NetChange
Other
BalanceatEndofYear
RWeerasooriya 87,500,000 - - - - 87,500,000JMatthews 266,667 - - - - 266,667BMunro 783,333 - - - - 783,333 88,550,000 - - - - 88,550,000
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OptionHoldingsThenumberofoptionsoverordinarysharesintheCompanyheldduringthefinancialyearbyeachDirectorandothermembersofkeymanagementpersonneloftheConsolidatedEntity,includingtheirpersonallyrelatedparties,issetoutbelow:Director
BalanceatBeginningofYear
Receivedas
Remuneration
OptionsExpired/Cancelled
NetChange
Other
BalanceatEndofYear
NumberVested
Number
Exercisable RWeerasooriya 19,375,000 - - - 19,375,000 19,375,000 15,625,000JMatthews 1,150,000 - - - 1,150,000 1,150,000 1,150,000BMunro 1,300,000 - - - 1,300,000 1,300,000 1,300,000 21,825,000 - - - 21,825,000 21,825,000 16,825,000
J. Othertransactionswithkeymanagementpersonnel
Duringthepreviousfinancialyear,the$15,687remainingbalanceoftheloanfromtheacquisitionofRewardlePtyLtdwasrepaidtoMrWeerasooriyaon18July2014.At30June2016,theCompanyowed$4,777(30June2015:$11,653)toMrWeerasooriyaforthereimbursementofbusinessexpenses.TheCompanyenteredintoaleaseforitsprincipalplaceofbusinessonFlindersStreetinMelbournewhichcommencedon1July2014foraninitialtermofoneyear,withtwofurtheroptiontermsofoneyeareach.MrWeerasooriyaisthelessorunderthelease.Theoptiontoextendthisleasehadnotbeenexecutedandtheleasecontinuedonamonthbymonthbasis.Therentalpaidonthisleaseduringtheyearwas$24,753(2015:$24,753).During the financial period ended30 June2014, theCompanyentered into convertible note agreementswith itsDirectorsandalsowithunrelatedparties.Theconvertiblenoteswereissuedwithaconversionpriceof20centspershareandaninterestrateof12%perannum.Convertiblenoteholdersreceivedattachingoptionsexpiring30June2017,exercisableat20centseach, in lieuofanestablishmentfee.Theattachingoptionswerevaluedat$0.06798eachusingtheBlack-Scholesoptionvaluationmethodology.Duringthepreviousyear,on12September2014, theCompany issued shares and paid the accrued interest to note holders on conversion of their convertible notes.AmountsrelatingtoconvertiblenoteagreementswiththeDirectorsareasfollows:
2015Director
ConvertibleNotes
Outstanding$
AttachingOptionsReceived
No.
AttachingOptionsValue
$
12%Interest
Received$
ConversionShares
ReceivedNo.
RWeerasooriya - - - 111,781 12,500,000JMatthews - 150,000 10,197 1,210 200,000BMunro - - - 3,577 400,000 - 150,000 10,197 123,722 13,900,000
ThisistheendoftheAuditedRemunerationReport.
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INSURANCEOFOFFICERS
TheCompanyhasinplaceaninsurancepolicyinsuringDirectorsandOfficersoftheCompanyagainstanyliabilityarisingfromaclaimbroughtbyathirdpartyagainsttheCompanyoritsDirectorsandOfficers,andagainstliabilitiesforcostsandexpensesincurredbythemindefendinganylegalproceedingsarisingoutoftheirconductwhileactingintheircapacityasaDirectororofficeroftheCompany,otherthanconductinvolvingawilfulbreachofdutyinrelationtotheCompany.Inaccordancewithaconfidentialityclauseundertheinsurancepolicy,theamountofthepremiumpaidtotheinsurershasnotbeendisclosed.ThisispermittedunderSection300(9)oftheCorporationsAct2001.SHAREOPTIONSAtthedateofthisreporttherewerethefollowingunissuedordinarysharesforwhichoptionswereoutstanding:
• 19,225,000unlistedoptionsexpiring30June2017,exercisableat$0.20each• 19,972,500unlistedperformanceoptionsexpiring7February2018,exercisableat$0.20each• 836,500unlistedperformanceoptionsexpiring7February2018,exercisableat$0.25each• 550,000unlistedperformanceoptionsexpiring7February2018,exercisableat$0.30each• 1,000,000unlistedoptionsexpiring31March2018,exercisableat$0.30each
Duringtheyearthefollowingoptionswereissued:
• 60,000performanceoptionsexpiring7February2018,exercisableat$0.20each• 836,500performanceoptionsexpiring7February2018,exercisableat$0.25each• 550,000performanceoptionsexpiring7February2018,exercisableat$0.30each• 1,000,000optionsexpiring31March2018,exercisableat$0.30each
Duringtheyearthefollowingoptionswereexercised:
• 87,500performanceoptionsexpiring7February2018wereexercisedat$0.20each• 150,000optionsexpiring30June2017wereexercisedat$0.20each
Nooptionsexpiredduringtheyear.Sincetheendofthefinancialyear,nootheroptionshavebeenissued,exercisedorexpired.Nopersonentitledtoexercisetheseoptionshadorhasanyright,byvirtueoftheoption,toparticipateinanyshareissueofanyotherbodycorporate.LEGALPROCEEDINGSThecompanywasnotapartytoanylegalproceedingsduringtheyear.PROCEEDINGSONBEHALFOFTHECOMPANYNo person has applied for leave of Court to bring proceedings on behalf of the company or intervene in anyproceedingstowhichtheCompanyisapartyforthepurposeoftakingresponsibilityonbehalfoftheCompanyforalloranypartofthoseproceedings.TheCompanywasnotapartytoanysuchproceedingsduringtheyear.
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ENVIRONMENTALREGULATIONSTheGroupisnotcurrentlysubjecttoanyspecificenvironmentalregulationunderAustralianCommonwealthorStatelaw.CORPORATEGOVERNANCEUnderASXListingRule4.10.3theCompany’sCorporateGovernanceStatementcanbelocatedattheURLontheCompany’swebsitebeing::http://rewardleholdings.com/corporate-policies/
AUDITORMooreStephensAudit(Vic)wereappointedauditorsoftheCompanyattheannualgeneralmeetingon20November2015.BDOEastCoastPartnershipwerethepreviousauditors. NON-AUDITSERVICESTherewerenoamountspaidorpayabletotheauditorfornon-auditservicesprovidedduringtheyearbytheauditorotherthanthoseoutlinedinNote4tothefinancialstatements.Thedirectorsaresatisfiedthattheprovisionofnon-auditservicesduringthefinancialyear,bytheauditor(orbyanotherpersonorfirmontheauditor’sbehalf),iscompatiblewiththegeneralstandardofindependenceforauditorsimposedbytheCorporationAct2001.ThedirectorsareoftheopinionthattheservicesasdisclosedinNote4tothefinancialstatementsdonotcompromisetheexternalauditor’sindependencerequirementsoftheCorporationsAct2001forthefollowingreason:• noneoftheservicesunderminethegeneralprinciplesrelatingtoauditorindependenceassetoutinAPES110Code
ofEthicsforProfessionalAccountantsissuedbytheAccountingProfessionalandEthicalStandardsBoard,includingreviewingorauditingtheauditor'sownwork,actinginamanagementordecision-makingcapacityforthecompany,actingasadvocateforthecompanyorjointlysharingeconomicrisksandrewards.
AUDITOR’SDECLARATIONOFINDEPENDENCEThe auditor’s independence declaration for the year ended 30 June 2016, as required under section 307C of theCorporationsAct2001,hasbeenreceivedandisincludedwithinthefinancialreport.Signedinaccordancewitharesolutionofdirectors.RuwanWeerasooriyaManagingDirector23September2016
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Consolidated
Note2016
$2015
$ Revenue Renderingofservices 585,792 122,615Otherincome 2(a) 1,694,243 1,116,039 Expenses Consultingfees (140,701) (134,315)Depreciation (6,773) -Directorsfeesandbenefitsexpense (244,250) (183,187)Employeebenefitsexpense (3,274,360) (2,130,794)Financecosts (325) (573,948)ITequipment (655,377) (1,274,482)Legalfees (25,829) (58,622)Merchantandmembernetworkcosts (1,144,901) (693,222)Sharebasedpayments (296,791) (1,559,556)Otherexpenses 2(b) (1,007,381) (911,431)Lossbeforeincometaxexpense (4,516,653) (6,280,903)Incometaxexpense 3 - -
Lossafterincometaxfortheyear (4,516,653) (6,280,903)
Othercomprehensiveincome - -Othercomprehensiveincomefortheyear,netoftax - -TotalcomprehensivelossattributabletomembersofRewardleHoldingsLimited (4,516,653) (6,280,903)
Cents CentsBasicanddilutedlosspersharefortheyearattributabletothemembersofRewardleHoldingsLimited
5 (3.44) (5.66)
TheaboveConsolidatedStatementofProfitorLossandOtherComprehensiveIncomeshouldbereadinconjunctionwiththeaccompanyingnotes.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2016F
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Consolidated
Note2016
$2015
$ ASSETS CurrentAssets Cashandcashequivalents 6 906,533 4,859,008Tradeandotherreceivables 7 150,776 118,723TotalCurrentAssets 1,057,309 4,977,731 Non-CurrentAssets Tradeandotherreceivables 7 4,140 714Plantandequipment 8 12,376 -TotalNon-CurrentAssets 16,516 714
TotalAssets 1,073,825 4,978,445 LIABILITIES CurrentLiabilities Tradeandotherpayables 9 456,221 228,039Provisions 10 150,317 110,757TotalCurrentLiabilities 606,538 338,796
TotalLiabilities 606,538 338,796
NETASSETS 467,287 4,639,649 EQUITY Issuedcapital 11 12,353,702 12,306,202Reserves 12 3,019,981 2,723,190Accumulatedlosses (14,906,396) (10,389,743)
TOTALEQUITY 467,287 4,639,649TheaboveConsolidatedStatementofFinancialPositionshouldbereadinconjunctionwiththeaccompanyingnotes.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2016F
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Consolidated Issued
Capital$
AccumulatedLosses
$
Reserves
$
Total
$
2016
Balanceat1July2015 12,306,202 (10,389,743) 2,723,190 4,639,649
Lossforyear - (4,516,653) - (4,516,653)Totalcomprehensivelossfortheyear - (4,516,653) - (4,516,653) Transactionswithownersintheircapacityasowners:
Securitiesissuedduringtheyear 47,500 - - 47,500Costofsharebasedpayments - - 296,791 296,791
Balanceat30June2016 12,353,702 (14,906,396) 3,019,981 467,287
2015
Balanceat1July2014 220,101 (4,108,840) 1,061,665 (2,827,074)
Lossforyear - (6,280,903) - (6,280,903)Totalcomprehensivelossfortheyear - (6,280,903) - (6,280,903) Transactionswithownersintheircapacityasowners:
Securitiesissuedduringtheyear 12,780,000 - - 12,780,000Capitalraisingcosts (693,899) - - (693,899)Costofsharebasedpayments - - 1,661,525 1,661,525
Balanceat30June2015 12,306,202 (10,389,743) 2,723,190 4,639,649
TheaboveConsolidatedStatementofChangesinEquityshouldbereadinconjunctionwiththeaccompanyingnotes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2016F
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Consolidated
Note2016
$2015
$ Inflows/
(Outflows)Inflows/
(Outflows)Cashflowsfromoperatingactivities Receiptsfromcustomers 525,918 100,516Paymentstosuppliersandemployees (6,200,662) (5,329,874)Interestreceived 27,604 43,463R&Dtaxoffsetrefundreceived 1,666,639 1,072,576Interestandotherfinancecostspaid (325) (170,858)
Netcashusedinoperatingactivities 6(a) (3,980,826) (4,284,177)
Cashflowsfrominvestingactivities Paymentforplantandequipment (19,149) -Paymentofsecuritydeposit - (986)
Netcashusedininvestingactivities (19,149) (986)
Cashflowsfromfinancingactivities Proceedsfromissueofshares 47,500 9,067,500Paymentofcapitalraisingcosts - (591,929)Proceedsfromborrowings - 260,000Repaymentofborrowings - (45,687)
Netcashprovidedbyfinancingactivities 47,500 8,689,884
Net(decrease)/increaseincashheld (3,952,475) 4,404,721 Cashatbeginningofthefinancialyear 4,859,008 454,287
Cashatendofthefinancialyear 6 906,533 4,859,008
TheaboveConsolidatedStatementofCashFlowsshouldbereadinconjunctionwiththeaccompanyingnotes.
CONSOLIDATED STATEMENT OF CASH FLOW FOR THE YEAR ENDED 30 JUNE 2016F
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1. SummaryofSignificantAccountingPolicies(a) BasisofPreparation
TheseconsolidatedfinancialstatementsandnotesrepresentthoseofRewardleHoldingsLimitedandcontrolledentities(“Group”or“ConsolidatedEntity”).The financial report is a general purpose financial report,whichhasbeenprepared in accordancewith therequirements of the Corporations Act 2001, Australian Accounting Standards and other authoritativepronouncementsoftheAustralianAccountingStandardsBoard.TheGroup isa for-profitentity for financialreportingpurposesunderAustralianAccountingStandards.Thefinancialreporthasbeenpreparedonanaccrualsbasisandisbasedonhistoricalcostsmodifiedbytherevaluationofselectednon-currentassets,financialassetsandfinancialliabilitiesforwhichthefairvaluebasisofaccountinghasbeenapplied.Rewardle Holdings Limited (“Company” or “Parent Entity”) is a company limited by shares incorporated inAustralia. The nature of the operations and principal activities of theGroup are described in theDirectorsReport.Theseparatefinancialstatementsoftheparententity,RewardleHoldingsLimited,havenotbeenpresentedwithinthisfinancialreportaspermittedbytheCorporationsAct2001.
(b) Goingconcernbasis
For the year ended 30 June 2016 the consolidated entity had an operating net loss of $4,516,653 (2015:$6,280,903)andnetcashoutflowsfromoperatingactivitiesof$3,980,826(2015:$4,284,177).Theabilitytocontinueasagoingconcernisdependentuponanumberoffactors,onebeingthecontinuationandavailabilityoffunds.Thefinancialstatementshavebeenpreparedonthebasisthattheconsolidatedentityisagoingconcern,whichcontemplatesthecontinuityofitsbusiness,realisationofassetsandthesettlementofliabilitiesinthenormalcourseofbusiness.Indeterminingthatthegoingconcernassumptionisappropriate,thedirectorshavehadregardto:• Successfulpostyearendcapitalraiseof$2,852,347;• ForecastincreaseinthenumberofMerchantspayingthemonthlysubscriptionfees;• Forecastincreaseintherevenuegeneratedfrombrandandchannelpartnerships;• Previoussuccessonbeingeligiblefortheresearchanddevelopmenttaxincentive;and• Ifrequired,previoussuccessinbeingabletoraisecapitalasequity.
Theconsolidatedentity’sabilitytocontinuetooperateasagoingconcernisdependentupontheitemslistedabove.Shouldtheseeventsnotoccurasanticipated,theconsolidatedentitymaybeunabletocontinueasagoingconcernandmayberequiredtorealiseitsassetsandextinguishitsliabilitiesotherthanintheordinarycourseofbusiness,andatamountsthatdifferfromthosestatedinthefinancialstatements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016F
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25 REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
1. SummaryofSignificantAccountingPolicies(Cont.)
(c) Newaccountingstandardsforapplicationincurrent&futureperiodsTheGrouphasadoptedallofthenew,revisedoramendingAccountingStandardsandInterpretationsissuedbytheAustralianAccountingStandardsBoard(‘AASB’)thataremandatoryforthecurrentreportingperiod.TheadoptionoftheseAccountingStandardsandInterpretationsdidnothaveanysignificantimpactonthefinancialperformanceorpositionoftheGroup.Anynew,revisedoramendingAccountingStandardsorInterpretationsthatarenotyetmandatoryhavenotbeenearlyadopted.AustralianAccountingStandardsandInterpretationsthathaverecentlybeenissuedoramendedbutarenotyetmandatory, have not been early adopted by theGroup for period ended 30 June 2016. TheGroup'sassessmentoftheimpactoftheseneworamendedAccountingStandardsandInterpretations,mostrelevanttotheconsolidatedentity,aresetoutbelow.AASB9FinancialInstrumentsTheseamendmentsmustbeappliedforfinancialyearscommencingonorafter1January2018.Thereforeapplication date for the Group will be 30 June 2019. The Group does not currently have any hedgingarrangementsinplace.AASB 9 addresses the classification, measurement and de-recognition of financial assets and financialliabilities.SinceDecember2013,italsosetsoutnewrulesforhedgeaccounting.TherewillbenoimpactontheGroup’saccountingforfinancialassetsandfinancialliabilities,asthenewrequirementsonlyeffecttheaccountingforavailable-for-salefinancialassetsandtheaccountingforfinancialliabilitiesthataredesignatedatfairvaluethroughprofitorlossandtheGroupdoesnothaveanysuchfinancialassetsorfinancialliabilities.ThenewhedgingrulesalignhedgeaccountingmorecloselywiththeGroup’sriskmanagementpractices.Asageneralruleitwillbeeasiertoapplyhedgeaccountinggoingforward.Thenewstandardalsointroducesexpandeddisclosurerequirementsandchangesinpresentation.AASB15RevenuefromContractswithCustomersThese amendmentsmust be applied for annual reporting periods beginning on or after 1 January 2018.ThereforeapplicationdatefortheGroupwillbe30June2019.Anentitywill recognise revenue todepict the transferof promisedgoodsor services to customers in anamountthatreflectstheconsiderationtowhichtheentityexpectstobeentitledinexchangeforthosegoodsorservices. Thismeansthat revenuewillberecognisedwhencontrolofgoodsorservices is transferred,ratherthanontransferofrisksandrewardsasiscurrentlythecaseunderIAS18Revenue.DuetotherecentreleaseofthisstandardtheGrouphasnotyetmadeanassessmentoftheimpactofthisstandard.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016F
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1. SummaryofSignificantAccountingPolicies(Cont.)(c) Newaccountingstandardsforapplicationincurrent&futureperiods(Cont.)
AASB16LeasesIFRS16eliminatestheoperatingandfinanceleaseclassificationsforlesseescurrentlyaccountedforunderAASB117Leases.Itinsteadrequiresanentitytobringmostleasesontoitsstatementoffinancialpositionina similarway to how existing finance leases are treated under AASB 117. An entitywill be required torecognisealeaseliabilityandarightofuseassetinitsstatementoffinancialpositionformostleases.Therearesomeoptionalexemptionsforleaseswithaperiodof12monthsorlessandforlowvalueleases.Theapplicationdateofthisstandardisforannualreportingperiodsbeginningonorafter1January2019.Duetotherecentreleaseofthisstandard,theGrouphasnotyetmadeadetailedassessmentoftheimpactofthisstandard.
(d) StatementofComplianceThefinancialreportwasauthorisedforissueon23September2016.The financial report, comprising the financial statements and notes thereto, complies with InternationalFinancialReportingStandards(IFRS)asissuedbytheInternationalAccountingStandardsBoard(IASB).
(e) Basisofconsolidation
The consolidated financial statements comprise the financial statements of Rewardle Holdings Limited(“Company”or“ParentEntity”)anditssubsidiariesasat30Juneeachyear(“ConsolidatedEntity”or“Group”).Controlisachievedwherethecompanyhasthepowertogovernthefinancialandoperatingpoliciesofanentitysoastoobtainbenefitsfromitsactivities.Thefinancialstatementsofthesubsidiariesarepreparedforthesamereportingyearastheparentcompany,usingconsistentaccountingpolicies.Inpreparing theconsolidated financial statements,all intercompanybalancesand transactions, incomeandexpensesandprofitandlossesresultingfromintra-grouptransactionshavebeeneliminatedinfull.SubsidiariesarefullyconsolidatedfromthedateonwhichcontrolistransferredtotheGroupandceasetobeconsolidatedfromthedateonwhichcontrolistransferredoutoftheGroup.Controlexistswherethecompanyhas the power to govern the financial and operating policies of an entity so as to obtain benefits from itsactivities.TheexistenceandeffectofpotentialvotingrightsthatarecurrentlyexercisableorconvertibleareconsideredwhenassessingwhentheGroupcontrolsanotherentity.Businesscombinationshavebeenaccountedforusingtheacquisitionmethodofaccounting(refernote1(f)).Unrealised gains or transactions between the Group and its associates are eliminated to the extent of theGroup’s interests in the associates. Unrealised losses are also eliminated unless the transaction providesevidenceofanimpairmentoftheassettransferred.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016F
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1. SummaryofSignificantAccountingPolicies(Cont.)
(e) Basisofconsolidation(Cont.)
Non-controllinginterestsrepresenttheportionofprofitorlossandnetassetsinsubsidiariesnotheldbytheGroupandarepresentedseparately inthestatementofprofitor lossandothercomprehensiveincomeandwithinequityintheconsolidatedstatementoffinancialposition.Lossesareattributedtothenon-controllinginterestsevenifthatresultsinadeficitbalance.TheGrouptreatstransactionswithnon-controllingintereststhatdonotresultinalossofcontrolastransactionswithequityownersoftheGroup.Achangeinownershipinterestresultsinanadjustmentbetweenthecarryingamountsofthecontrollingandnon-controllingintereststoreflecttheirrelativeinterestsinthesubsidiary.Anydifferencebetweentheamountoftheadjustmenttonon-controllinginterestsandanyconsiderationpaidorreceivedisrecognisedwithinequityattributabletoownersoftheCompany.Whenthegroupceasestohavecontrol,jointcontrolorsignificantinfluence,anyretainedinterestintheentityisre-measuredtoitsfairvaluewiththechangeincarryingamountrecognisedinprofitorloss.Thefairvalueistheinitialcarryingamountforthepurposesofsubsequentlyaccountingfortheretainedinterestasanassociate,jointcontrolledentityorfinancialasset.Inaddition,anyamountspreviouslyrecognisedinothercomprehensiveincomeinrespectofthatentityareaccountedforasiftheGrouphaddirectlydisposedoftherelatedassetsorliabilities.Thismaymeanthatamountspreviouslyrecognisedinothercomprehensiveincomearereclassifiedtoprofitorloss.
(f) Businesscombinations
The acquisitionmethod of accounting is used to account for all business combinations, including businesscombinationsinvolvingentitiesorbusinessundercommoncontrol,regardlessofwhetherequityinstrumentsorotherassetsareacquired.Theconsiderationtransferredfortheacquisitionofasubsidiarycomprisesthefairvalue of the assets transferred, the liabilities incurred and the equity interests issued by the Group. Theconsiderationtransferredalsoincludesthefairvalueofanycontingentconsiderationarrangementandthefairvalueofanypre-existingequityinterestinthesubsidiary.Acquisition-relatedcostsareexpensesasincurred.Identifiableassetsacquiredandliabilitiesandcontingentliabilitiesassumedinabusinesscombinationare,withlimited exceptions, measured initially at their fair values at the acquisition date. On an acquisition-by-acquisitionbasis,theGrouprecognisesanynon-controllinginterestintheacquireeeitheratfairvalueoratthenon-controllinginterest’sproportionateshareoftheacquiree’snetidentifiableassets.Theexcessoftheconsiderationtransferred,theamountofanynon-controllinginterestintheacquireeandtheacquisition-datefairvalueofanypreviousequityinterestintheacquireeoverthefairvalueoftheGroup’sshareofthenetidentifiableassetsacquiredisrecordedasgoodwill.Ifthoseamountsarelessthanthefairvalueofthenetidentifiableassetsofthesubsidiaryacquiredandthemeasurementofallamountshasbeenreviewed,thedifferenceisrecogniseddirectlyinprofitorlossasabargainpurchase.Where settlement of any part of cash consideration is deferred, the amounts payable in the future arediscountedtotheirpresentvalueasatthedateofexchange.Thediscountrateusedistheentity’sincrementalborrowingrate,beingtherateatwhichasimilarborrowingcouldbeobtainedfromanindependentfinancierundercomparabletermsandconditions.Contingentconsiderationisclassifiedaseitherequityorafinancialliability.Amountsclassifiedasafinancialliabilityaresubsequentlyremeasuredtofairvaluewithchanges in fairvaluerecognised inthestatementofprofitorlossandothercomprehensiveincome.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016F
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1. SummaryofSignificantAccountingPolicies(Cont.)
(g) RevenuerecognitionRevenueisrecognisedtotheextentthatitisprobablethattheeconomicbenefitswillflowtotheGroupandtherevenuecanbereliablymeasured.Revenueismeasuredatthefairvalueoftheconsiderationreceivedorreceivable.Amountsdisclosedasrevenuearenetofreturns,tradeallowancesanddutiesandtaxespaid.Interestrevenueisrecognisedasitaccrues,takingintoaccounttheeffectiveyieldonthefinancialasset.
(h) Researchanddevelopmenttaxrefund
Researchanddevelopment tax incentives are recognisedasother incomeat their fair valuewhere there isreasonableassurancethattheincentivewillbereceivedandtheGroupwillcomplywithallattachedconditions.
(i) Cashandcashequivalents
Cashcomprisescashatbankandinhand.Cashequivalentsareshortterm,highlyliquidinvestmentsthatarereadilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue.
Forthepurposesofthecashflowstatement,cashandcashequivalentsconsistofcashandcashequivalentsas
describedabove,netofoutstandingbankoverdrafts.(j) Tradeandotherreceivables
Trade receivables are recognised initially at fair value and subsequentlymeasured at amortised cost, lessprovisionforimpairment.Tradereceivablesaredueforsettlementwithin30daysfromthedateofrecognition.Collectabilityoftradereceivablesisreviewedonanongoingbasis.Debtswhichareknowntobeuncollectiblearewrittenoff.
AnallowanceaccountfordoubtfulreceivablesisestablishedwhenthereisobjectiveevidencethattheCompanywillnotbeabletocollectallamountsdueaccordingtotheoriginaltermsofreceivables.Theamountoftheprovisionisthedifferencebetweentheasset’scarryingamountandthepresentvalueofestimatedfuturecashflows,discountedattheoriginaleffectiveinterestrate.Cashflowsrelatingtoshort-termreceivablesarenotdiscountediftheeffectofdiscountingisimmaterial.Theamountoftheprovisionisrecognisedinthestatementofprofitorlossandothercomprehensiveincome.Whenatradereceivableforwhichanimpairmentallowancehas been recognised becomes uncollectable in a subsequent period, it iswritten off against the allowanceaccount.Subsequentrecoveriesofamountspreviouslywrittenoffarecreditedagainstotherexpensesinthestatementofprofitorlossandothercomprehensiveincome.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016F
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29 REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
1. SummaryofSignificantAccountingPolicies(Cont.)(k) IncomeTax
Currenttaxassetsandliabilitiesforthecurrentandpriorperiodsaremeasuredattheamountexpectedtoberecoveredfromorpaidtothetaxationauthorities.Thetaxratesandtaxlawsusedtocomputetheamountarethosethatareenactedorsubstantivelyenactedbythereportingdate.Deferredincometaxisprovidedonalltemporarydifferencesatthereportingdatebetweenthetaxbasesofassetsandliabilitiesandtheircarryingamountsforfinancialreportingpurposes.Deferredincometaxliabilitiesarerecognisedforalltaxabletemporarydifferencesexcept:§ whenthedeferredincometaxliabilityarisesfromtheinitialrecognitionofgoodwillorofanassetorliability
inatransactionthatisnotabusinesscombinationandthat,atthetimeofthetransaction,affectsneithertheaccountingprofitnortaxableprofitorloss;or
§ when the taxable temporary difference is associated with investments in subsidiaries, associates orinterestsinjointventures,andthetimingofthereversalofthetemporarydifferencecanbecontrolledanditisprobablethatthetemporarydifferencewillnotreverseintheforeseeablefuture.
Deferredincometaxassetsarerecognisedforalldeductibletemporarydifferences,carry-forwardofunusedtaxassetsandunusedtaxlosses,totheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferencesandthecarry-forwardofunusedtaxcreditsandunusedtaxlossescanbeutilised,except:§ whenthedeferredincometaxassetrelatingtothedeductibletemporarydifferencearisesfromtheinitial
recognitionofanassetorliabilityinatransactionthatisnotabusinesscombinationand,atthetimeofthetransaction,affectsneithertheaccountingprofitnortaxableprofitorloss;or
§ when the deductible temporary difference is associatedwith investments in subsidiaries, associates orinterests in joint ventures, inwhich caseadeferred taxasset isonly recognised to theextent that it isprobable that the temporarydifferencewill reverse in the foreseeable futureand taxableprofitwillbeavailableagainstwhichthetemporarydifferencecanbeutilised.
Thecarryingamountofdeferredincometaxassetsisreviewedateachreportingdateandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitwillbeavailabletoallowallorpartofthedeferredincometaxassettobeutilised.Unrecogniseddeferredincometaxassetsarereassessedateachreportingdateandarerecognisedtotheextentthatithasbecomeprobablethatfuturetaxableprofitwillallowthedeferredtaxassettoberecovered.Deferredincometaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplytotheperiodwhentheassetisrealisedortheliabilityissettled,basedontaxrates(andtaxlaws)thathavebeenenactedorsubstantivelyenactedatthereportingdate.Incometaxesrelatingtoitemsrecogniseddirectlyinequityarerecognisedinequityandnotinprofitorloss.Deferredtaxassetsanddeferredtaxliabilitiesareoffsetonlyifalegallyenforceablerightexiststosetoffcurrenttaxassetsagainstcurrenttax liabilitiesandthedeferredtaxassetsand liabilitiesrelatetothesametaxableentityandthesametaxationauthority.TheamountofbenefitsbroughttoaccountorwhichmayberealisedinthefutureisbasedontheassumptionthatnoadversechangewilloccurinincomelegislationandtheanticipationthattheGroupwillderivesufficientfutureassessableincometoenablethebenefittoberealisedandcomplywiththeconditionsofdeductibilityimposedbythelaw.
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30 REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
1. SummaryofSignificantAccountingPolicies(Cont.)
(l) OthertaxesRevenues,expensesandassetsarerecognisednetoftheamountofGSTexcept:§ whentheGSTincurredonapurchaseofgoodsandservicesisnotrecoverablefromthetaxationauthority,
inwhichcasetheGSTisrecognisedaspartofthecostofacquisitionoftheassetoraspartoftheexpenseitemasapplicable;and
§ receivablesandpayables,whicharestatedwiththeamountofGSTincluded.ThenetamountofGSTrecoverablefrom,orpayableto,thetaxationauthorityisincludedaspartofreceivablesorpayablesinthestatementoffinancialposition.CashflowsareincludedinthecashflowstatementonagrossbasisandtheGSTcomponentofcashflowsarisingfrom investingand financingactivities,which is recoverable from,orpayable to, the taxationauthorityareclassifiedasoperatingcashflows.CommitmentsandcontingenciesaredisclosednetoftheamountofGSTrecoverablefrom,orpayableto,thetaxationauthority.
(m) Financialassets
FinancialassetsinthescopeofAASB139FinancialInstruments:RecognitionandMeasurementareclassifiedaseitherfinancialassetsatfairvaluethroughprofitorloss,loansandreceivables,held-to-maturityinvestments,or available-for-sale investments, as appropriate. When financial assets are recognised initially, they aremeasured at fair value, plus, in the case of investments not at fair value through profit or loss, directlyattributable transactions costs. The Group determines the classification of its financial assets after initialrecognitionand,whenallowedandappropriate,re-evaluatesthisdesignationateachfinancialyear-end.
Allregularwaypurchasesandsalesoffinancialassetsarerecognisedonthetradedatei.e.thedatethattheGroupcommitstopurchasetheasset.Regularwaypurchasesorsalesarepurchasesorsalesoffinancialassetsundercontracts that requiredeliveryof theassetswithin theperiodestablishedgenerallyby regulationorconventioninthemarketplace(i) LoansandreceivablesLoansandreceivablesarenon-derivative financialassetswith fixedordeterminablepaymentsthatarenotquotedinanactivemarket.Suchassetsarecarriedatamortisedcostusingtheeffectiveinterestmethod.Gainsandlossesarerecognisedinprofitorlosswhentheloansandreceivablesarederecognisedorimpaired,aswellasthroughtheamortisationprocess.
(n) Impairmentofassets
TheGroupassessesateachreportingdatewhetherthereisanindicationthatanassetmaybeimpaired.Ifanysuchindicationexists,orwhenannualimpairmenttestingforanassetisrequired,theGroupmakesanestimateoftheasset’srecoverableamount.Anasset’srecoverableamountisthehigherofitsfairvaluelesscoststosellanditsvalueinuseandisdeterminedforanindividualasset,unlesstheassetdoesnotgeneratecashinflowsthatarelargelyindependentofthosefromotherassetsorgroupsofassetsandtheasset'svalueinusecannotbeestimatedtobeclosetoitsfairvalue.Insuchcasestheassetistestedforimpairmentaspartofthecash-generatingunittowhichitbelongs.Whenthecarryingamountofanassetorcash-generatingunitexceedsitsrecoverable amount, the asset or cash-generating unit is considered impaired and is written down to itsrecoverableamount.
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31 REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
1. SummaryofSignificantAccountingPolicies(Cont.)
(n) Impairmentofassets(Cont.)Inassessingvalueinuse,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheasset. Impairment losses relating to continuing operations are recognised in those expense categoriesconsistentwiththefunctionoftheimpairedassetunlesstheassetiscarriedatrevaluedamount(inwhichcasetheimpairmentlossistreatedasarevaluationdecrease).An assessment is also made at each reporting date as to whether there is any indication that previouslyrecognised impairment losses may no longer exist or may have decreased. If such indication exists, therecoverableamountisestimated.Apreviouslyrecognisedimpairmentlossisreversedonlyiftherehasbeenachangeintheestimatesusedtodeterminetheasset’srecoverableamountsincethelastimpairmentlosswasrecognised. Ifthat isthecasethecarryingamountoftheasset is increasedto itsrecoverableamount.Thatincreasedamountcannotexceedthecarryingamountthatwouldhavebeendetermined,netofdepreciation,hadnoimpairmentlossbeenrecognisedfortheassetinpriorperiods.Suchreversalisrecognisedinprofitorloss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluationincrease.After such a reversal thedepreciation charge is adjusted in futureperiods to allocate the asset’srevisedcarryingamount,lessanyresidualvalue,onasystematicbasisoveritsremainingusefullife.
(o) TradeandotherpayablesTradepayablesandotherpayablesarecarriedatamortisedcostsandrepresentliabilitiesforgoodsandservicesprovidedtotheGrouppriortotheendofthefinancialyearthatareunpaidandarisewhentheGroupbecomesobligedtomake futurepayments in respectof thepurchaseof thesegoodsandservices.Theamountsareunsecuredandareusuallypaidwithin30daysofrecognition.
(p) Provisions
ProvisionsarerecognisedwhentheGrouphasapresentobligation(legalorconstructive)asaresultofapastevent,itisprobablethatanoutflowofresourcesembodyingeconomicbenefitswillberequiredtosettletheobligationandareliableestimatecanbemadeoftheamountoftheobligation.WhentheGroupexpectssomeorallofaprovisiontobereimbursed,forexampleunderaninsurancecontract,thereimbursementisrecognisedasaseparateassetsbutonlywhenthereimbursementisvirtuallycertain.Theexpense relating to any provision is presented in the statement of profit or loss andother comprehensiveincomenetofanyreimbursement.Iftheeffectofthetimevalueofmoneyismaterial,provisionsarediscountedusingacurrentpre-taxratethatreflectstherisksspecifictotheliability.Whendiscountingisused,theincreaseintheprovisionduetothepassageoftimeisrecognisedasaborrowingcost.
(q) Employeebenefits
Short-termemployeebenefitsLiabilitiesforwagesandsalaries,includingnon-monetarybenefits,annualleaveandlongserviceleaveexpensestobesettledwithin12monthsofthereportingdatearemeasuredattheamountsexpectedtobepaidwhentheliabilitiesaresettled.
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32 REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
1. SummaryofSignificantAccountingPolicies(Cont.)
(q) Employeebenefits(Cont.)Otherlong-termemployeebenefitsTheliabilityforannualleaveandlongserviceleavenotexpectedtobesettledwithin12monthsofthereportingdateismeasuredasthepresentvalueofexpectedfuturepaymentstobemadeinrespectofservicesprovidedby employees up to the reporting date using the projected unit credit method. Consideration is given toexpectedfuturewageandsalarylevels,experienceofemployeedeparturesandperiodsofservice.Expectedfuturepaymentsarediscountedusingmarketyieldsatthereportingdateoncorporatebondswithtermstomaturityandcurrencythatmatch,ascloselyaspossible,theestimatedfuturecashoutflows.
(r) Share-basedpaymenttransactions
TheGroupprovidesbenefitstoemployees(includingseniorexecutives)oftheGroupintheformofshare-basedpayments, whereby employees render services in exchange for shares or rights over shares (equity-settledtransactions).Whenprovided,thecostoftheseequity-settledtransactionswithemployeesismeasuredbyreferencetothefairvalueoftheequityinstrumentsatthedateatwhichtheyaregranted.ThefairvalueisdeterminedusingtheBlack-Scholesmodelorthebinomialoptionvaluationmodel.Invaluingequity-settledtransactions,noaccountistakenofanyperformanceconditions,otherthanconditionslinkedtothepriceofthesharesofRewardleHoldingsLimited(marketconditions)ifapplicable.Thecostofequity-settledtransactionsisrecognised,togetherwithacorrespondingincreaseinequity,overtheperiod in which the performance and/or service conditions are fulfilled, ending on the date on which therelevantemployeesbecomefullyentitledtotheaward(thevestingperiod).The cumulativeexpense recognised forequity-settled transactionsat each reportingdateuntil vestingdatereflects(i)theextenttowhichthevestingperiodhasexpiredand(ii)theGroup’sbestestimateofthenumberofequityinstrumentsthatwillultimatelyvest.Noadjustmentismadeforthelikelihoodofmarketperformanceconditionsbeingmetastheeffectoftheseconditionsisincludedinthedeterminationoffairvalueatgrantdate.Thestatementofprofitorlossandothercomprehensiveincomechargeorcreditforaperiodrepresentsthemovementincumulativeexpenserecognisedasatthebeginningandendofthatperiod.No expense is recognised for awards that do not ultimately vest, except for awards where vesting is onlyconditionaluponamarketcondition.Ifthetermsofanequity-settledawardaremodified,asaminimumanexpenseisrecognisedasifthetermshadnotbeenmodified.Inaddition,anexpenseisrecognisedforanymodificationthatincreasesthetotalfairvalueoftheshare-basedpaymentarrangement,orisotherwisebeneficialtotheemployee,asmeasuredatthedateofmodification.Ifanequity-settledawardiscancelled,itistreatedasifithadvestedonthedateofcancellation,andanyexpensenotyet recognised for theaward is recognised immediately.However, ifanewaward is substituted for thecancelledawardanddesignatedasareplacementawardonthedatethatitisgranted,thecancelledandnewawardaretreatedasiftheywereamodificationoftheoriginalaward,asdescribedinthepreviousparagraph.Thedilutiveeffect,ifany,ofoutstandingoptionsisreflectedasadditionalsharedilutioninthecomputationofearningspershare.
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33 REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
1. SummaryofSignificantAccountingPolicies(Cont.)
(s) IssuedcapitalOrdinarysharesareclassifiedasequity. Incrementalcostsdirectlyattributabletothe issueofnewsharesoroptionsareshowninequityasadeduction,netoftax,fromtheproceeds.Incrementalcostsdirectlyattributableto the issueof new shares or options for the acquisitionof a newbusiness are not included in the cost ofacquisitionaspartofthepurchaseconsideration.
(t) SegmentReporting
Operating segments are reported in amanner consistentwith the internal reporting provided to the chiefoperatingdecisionmaker.Thechiefoperatingdecisionmaker,whoisresponsibleforallocatingresourcesandassessingperformanceoftheoperatingsegments,hasbeenidentifiedastheBoardofDirectorsoftheCompany.
(u) Earningspershare
Basicearningspershareiscalculatedasnetprofitattributabletomembersoftheparent,adjustedtoexcludeanycostsofservicingequity(otherthandividends)andpreferencesharedividends,dividedbytheweightedaveragenumberofordinaryshares,adjustedforanybonuselement.
Dilutedearningspershareiscalculatedasnetprofitattributabletomembersoftheparent,adjustedfor:§ costsofservicingequity(otherthandividends)andpreferencesharedividends;§ theaftertaxeffectofdividendsandinterestassociatedwithdilutivepotentialordinarysharesthathave
beenrecognisedasexpenses;and§ other non-discretionary changes in revenues or expenses during the period thatwould result from the
dilution of potential ordinary shares; divided by the weighted average number of ordinary shares anddilutivepotentialordinaryshares,adjustedforanybonuselement.
(v) Financecosts
Financecostsattributabletoqualifyingassetsarecapitalisedaspartoftheasset.Allotherfinancecostsareexpensedintheyearinwhichtheyareincurred,includinginterestonshort-termborrowings.
(w) Borrowings
Allloansandborrowingsareinitiallyrecognisedatcost,beingthefairvalueoftheconsiderationreceivednetof issuecostsassociatedwiththeborrowing. Interestcalculatedusingtheeffective interest ratemethod isaccruedovertheperioditbecomesdueandincreasesthecarryingamountoftheliability.Borrowings are classified as current liabilities unless the Company has an unconditional right to defersettlementoftheliabilityforatleast12monthsafterthestatementoffinancialpositiondate.Ontheissueoftheconvertiblenotesthefairvalueoftheliabilitycomponentisdeterminedusingamarketrateforanequivalentnon-convertiblebondandthisamountiscarriedasanon-currentliabilityontheamortisedcostbasisuntilextinguishedonconversionorredemption.Theincreaseintheliabilityduetothepassageoftimeisrecognisedasafinancecost.Theremainderoftheproceedsareallocatedtotheconversionoptionthatisrecognisedandincludedinshareholdersequityasaconvertiblenotereserve,netoftransactioncosts.Thecarryingamountof theconversionoption isnotremeasured inthesubsequentperiods.Thecorrespondinginterestonconvertiblenotesisexpensedtoprofitorloss.
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34 REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
1. SummaryofSignificantAccountingPolicies(Cont.)
(x) AccountingEstimatesandJudgments In the process of applying the Group’s accounting policies, management has made certain judgments or
estimationswhichhaveaneffectontheamountsrecognizedinthefinancialstatements.
Thecarryingamountsofcertainassetsandliabilitiesareoftendeterminedbasedonestimatesandassumptionsof future events. The key estimates and assumptions that have a significant risk of causing a materialadjustmenttothecarryingamountsofcertainassetsandliabilitieswithinthenextannualreportingperiodare:(i) ImpairmentofassetsIndeterminingtherecoverableamountofassets,intheabsenceofquotedmarketprices,estimationsaremaderegardingthepresentvalueoffuturecashflowsusingasset-specificdiscountratesandtherecoverableamountoftheassetisdetermined.Value-in-usecalculationsperformedinassessingrecoverableamountsincorporateanumberofkeyestimates.Noassetsweresubjecttoimpairmenttestingat30June2016.(ii) Share-basedpaymenttransactionsThe Group measures the cost of equity-settled transactions by reference to the fair value of the equityinstrumentsatthedateatwhichtheyaregranted.ThefairvalueisdeterminedfrommarketvalueusingtheBlackScholesmethod.(iii) Deferredtaxbalances
DeferredTaxBalanceshavenotbeenrecognisedasitisnotprobablethattheycanberecovered.
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35 REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
Consolidated 2016
$2015
$ 2. RevenueandExpenses (a) OtherIncome Interest 27,604 43,463Researchanddevelopmenttaxincentive 1,666,639 1,072,576 1,694,243 1,116,039 (b) OtherExpenses
Advertising 73,954 81,649Auditfees 39,358 41,000Companysecretarial,complianceandaccounting 91,550 128,404Doubtfuldebtexpense 39,343 7,907Freight 51,695 49,206Payrolltax 135,176 75,129Rent 93,647 85,538Securityexchangeandregistryfees 42,403 109,241Telephone 121,676 70,762Travelcosts 83,213 106,253Other 235,366 156,342 1,007,381 911,431
3. IncomeTax (a) IncomeTaxExpense Theincometaxexpensefortheyeardiffersfromtheprimafacietaxasfollows:
Lossforyear (4,516,653) (6,280,903) Primafacieincometax(benefit)@30%(2015:30%) (1,354,996) (1,884,271) Taxeffectofnon-deductible/(non-assessable)items (387,283) 303,912Deferredtaxassetsnotbroughttoaccount 1,742,279 1,580,359Totalincometaxexpense - - (b)DeferredTaxAssets Deferredtaxassetsnotbroughttoaccountarisingfromtaxlosses,thebenefitsofwhichwillonlyberealisediftheconditionsfordeductibilitysetoutinnote1(k)occur:
2,548,426
1,907,789
TherearenofrankingcreditsavailabletotheGroup.(c)DeferredTaxLiabilityDeferredtaxliability Nil Nil
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36 REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
Consolidated 2016
$2015
$ 4. Auditors’Remuneration Auditorreviewservices:
- MooreStephensAudit(Vic) 37,750 -- BDOEastCoastPartnership(previousauditor) 1,608 41,000
39,358 41,000
5. EarningsperShare(EPS) Cents CentsBasicearningspershare/dilutedearningspershare
(3.44)
(5.66)
Theearningsandweightedaveragenumberofordinarysharesusedinthecalculationofbasicearningspershareisasfollows:
Earnings–Netlossforyear (4,516,653) (6,280,903) No. No.WeightedaveragenumberofordinarysharesusedinthecalculationofbasicEPSAstheCompanyisinalossposition,dilutedEPScalculatedisequaltobasicEPS.
131,349,944
111,023,332
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37 REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
Consolidated 2016
$2015
$ 6. CashandCashEquivalents Cashatbank 906,533 4,859,008
Cashatbankearnsinterestatfloatingratesbasedondailybankdepositrates.Thisshouldbereadinconjunctionwithnote18onFinancialRiskManagement(a) Reconciliationoflossfortheyeartonetcashflowsfromoperating
activities:
Lossfortheyear (4,516,653) (6,280,903) Non-cashflowsinprofit Depreciation 6,773 -Equitysettledsharebasedpayment 296,791 2,031,866 Changesinassetsandliabilities Increaseintradeandotherreceivables (31,887) (84,760)Increase/(Decrease)intradeandotherpayables 224,590 (11,466)Increaseinprovisions 39,560 61,086Netcashoutflowsfromoperatingactivities (3,980,826) (4,284,177)
(b) Non-cashfinancingandinvestingactivitiesTherewerenonon-cashfinancingandinvestingactivitiesduringtheyear.Duringthepreviousyear,theCompanyissued18,500,000ordinaryfullypaidsharesuponconversionofconvertiblenoteswitha facevalueof$3,700,000.TheCompanyalso issued1,500,000brokersoptionsexpiring30June2017,exercisableat20centseach,asconsiderationforcapitalraisingservicesvaluedat$101,970.
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38 REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
Consolidated 2016
$2015
$ 7. TradeandOtherReceivables Current Tradereceivables 139,711 28,471Less:Provisionfordoubtfuldebt (39,343) - 100,368 28,471Otherreceivables 50,408 90,252 150,776 118,723
Termsandconditionsrelatingtotheabovefinancialinstruments:• Tradeandotherreceivablesarenon-interestbearingandgenerallyrepayablewithin30-60days.Non-Current Employeeloans 4,140 714
Theemployeeloansarenon-interestbearing.Noemployeeloansarepastdueorimpaired.Refertoriskmanagementnote18.
ImpairedtradereceivablesTheGrouprecognisedalossof$39,343(2015:$7,907)inprofitorlossinrespectofimpairmentoftradereceivablesfortheyearended30June2016.
Impairmentlosses: -individuallyimpairedtradereceivables - --movementinprovisionforimpairment (39,343) (7,907)
Movementsintheprovisionforimpairmentoftradereceivablesthatareassessedforimpairmentcollectivelyareasfollows:
Openingbalance - 7,335Additionalprovisionsrecognised 39,343 7,907Receivableswrittenoffduringtheyearasuncollectable - (15,242)
Closingbalance 39,343 -
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39 REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
Consolidated 2016
$2015
$ 7. TradeandOtherReceivables(Continued)
PastduebutnotimpairedAt30June2016,theageinganalysisoftradereceivablesisasfollows:
0–30days–notpastdue 16,497 89031–60days–notpastdue 57,421 2,05461–90days-pastduebutnotimpaired 2,220 2,313Over90days-pastduebutnotimpaired 24,230 23,214Over90days-consideredimpaired 39,343 -
139,711 28,471
Asat30June2016,tradereceivablesof$26,450(2015:$25,527)werepastduebutnotimpaired.TheGroupdidnotconsideracreditriskontheaggregatebalancesafterreviewingthecredittermsofcustomersbasedonrecentcollectionpractices.Theotherclasseswithintradeandotherreceivablesdonotcontainimpairedassetsandarenotpastdue.Basedonthecredithistoryoftheseclasses,itisexpectedthattheseamountswillbereceivedwhendue.
8. PlantandEquipment Plantandequipment–atcost 19,149 -Less:Accumulateddepreciation (6,773) -
Netcarryingamount 12,376 -
Reconciliation Netcarryingamountatthebeginningoftheyear - -Additions 19,149 -Depreciationexpense (6,773) -Netcarryingamountattheendoftheyear 12,376 -
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40 REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
Consolidated 2016
$2015
$ 9. TradeandOtherPayables Current Tradepayables 112,300 108,477Otherpayables 339,144 107,909Loanfromdirector 4,777 11,653
456,221 228,039
Termsandconditionsrelatingtotheabovefinancialinstruments:• Tradeandotherpayablesarenon-interestbearingandarenormallysettledon30dayterms.• Theloanfromdirectorisunsecuredandnon-interestbearing.• Duetotheshorttermnatureoftheabovefinancialinstruments,theircarryingvalueisassumedtoapproximate
theirfairvalue.• Amountsareexpectedtobesettledwithintwelvemonths,refertoriskmanagementnote18.10. Provisions Current Employeebenefits 150,317 110,757
EmployeebenefitsrepresentannualleaveentitlementsofemployeeswithintheGroupandisnon-interestbearing.Theentireobligationispresentedascurrent,sincetheGroupdoesnothavearighttodefersettlement.
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41 REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
Consolidated 2016
$2015
$ 11. IssuedCapital
(a) Issuedandpaidupcapital Ordinaryshares-fullypaid 12,353,702 12,306,202(b) Movementinordinarysharesonissue 2016 2015 Number $ Number $Ordinaryshares–fullypaid Balanceatbeginningofyear 131,151,515 12,306,202 76,966,665 220,101Issuedforcash–July2014 - - 533,335 80,000Issuedonconversionofconvertiblenotes–12September2014
-
-
18,500,000
3,700,000
Issuedforcashpursuanttoprospectus–30September2014
-
-
20,000,000
4,000,000
Expensesofissue - - - (366,719)Issuedforcashpursuanttoplacement–2April2015
-
-
15,151,515
5,000,000
Expensesofissue - - - (327,180)Exerciseofperformanceoptionsexpiring7/02/18 87,500 17,500 - -Exerciseofoptionsexpiring30/06/17 150,000 30,000 - -Balanceatendofyear 131,389,015 12,353,702 131,151,515 12,306,202 (c) ShareoptionsAttheendoftheyear,thefollowingoptionsoverunissuedordinaryshareswereoutstanding:• 19,225,000optionsexpiring30June2017,exercisableat20centseach;• 19,972,500performanceoptionsexpiring7February2018,exercisableat20centseach;• 836,500performanceoptionsexpiring7February2018,exercisableat25centseach;• 550,000performanceoptionsexpiring7February2018,exercisableat30centseach;and• 1,000,000optionsexpiring31March2018,exercisableat30centseach.(d) TermsandconditionsofissuedcapitalOrdinary shareshave the right to receivedividends asdeclaredand, in theeventofwindingup the company, toparticipate inproceedsfromthesaleofallsurplusassets inproportiontothenumberofandamountspaiduponsharesheld.Ordinarysharesentitletheirholdertoonevote,eitherinpersonorbyproxy,atameetingofthecompany.Refertocapitalriskmanagementnote18.
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42 REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
Consolidated 2016
$2015
$ 12. Reserves Optionissuereserve 3,023,903 2,727,112Acquisitionreserve (3,922) (3,922) 3,019,981 2,723,190 Optionissuereserve(i) NatureandpurposeofreserveTheoptionissuereserveisusedtoaccumulateamountsreceivedontheissueofoptions and records items recognised as expenses on valuation of incentivebasedshareoptions.(ii) Movementsinreserve
Balanceatbeginningofyear 2,727,112 1,065,587Issueofincentivebasedshareoptions–serviceoptions - 67,980Optionsissuedasestablishmentfeeonconvertiblenotes–attachingoptions
-
81,575
Issueofincentivebasedshareoptions–performanceoptions - 1,410,000Optionsissuedasconsiderationforcapitalraisingservices–brokeroptions
-
101,970
Issueofincentivebasedshareoptionstoemployees 126,000 -Valueofincentivebasedperformanceshareoptionsissuedtoemployeesandvestedduringtheyear
170,791
-
Balanceatendofyear 3,023,903 2,727,112
Acquisitionreserve(i) NatureandpurposeofreserveAspartoftheacquisitionofRewardlePtyLtdin2014,theequitybalancesoftheConsolidated Entity would be that of the operating entity, Rewardle Pty Ltd(deemedtobethe“acquirer”foraccountingpurposes).TheresultingdifferencebetweentheequitybalancesofRewardleHoldingsLimitedandthatofRewardlePtyLtdisrecognisedintheacquisitionreserve.(ii) Movementsinreserve
Balanceatbeginningofyear (3,922) (3,922)
Balanceatendofyear (3,922) (3,922)
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43 REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
Consolidated 2016
$2015
$ 13. Commitments Operatingleasecommitments Non-cancellableoperatingleasescontractedforbutnotrecognisedinthefinancialstatements:
Payable–minimumleasepayments -Notlaterthanoneyear 40,540 17,915-Afteroneyearbutnotmorethanfiveyears 157,965 - 198,505 17,915
RewardlePtyLtdenteredintoaleasefortheGroup’snewprincipalplaceofbusinessonQueenStreetinMelbournewithanunrelatedlandlordwhichcommencedon18July2016.Theinitialtermoftheleaseisthreeyears,withanoptiontoextendforafurthertermoftwoyears.Rentalforthefirstyear is$81,080perannum,howeverthefirstsixteenmonthsofthetermissubjecttoahalfrentfreeperiod.Oneachanniversaryoftheleasecommencementdate,therentwillbeincreasedbyafixedrateof4%.TheleasefortheSydneyofficepremisescommencedon10December2014foraperiodofoneyearwithanoptiontorenewforanotheryear.Therentforthefirstyearis$34,510.Currentlytheleaseisonamonthbymonthbasis.14. ContingentLiabilities
TheGrouphasnomaterialcontingentliabilitiesasatthedateofthisreport(2015:nil).15. FinancialReportingbySegments
TheGrouphasidentifieditsoperatingsegmentsbasedontheinternalreportsthatareusedbytheBoard(thechiefoperatingdecisionmakers)inassessingperformanceandindeterminingtheallocationofresources.TheBoardasawholewillregularlyreviewtheidentifiedsegmentsinordertoallocateresourcestothesegmentandtoassessitsperformance.The Board considers that the Group has only operated in one segment, being operating as a Digital CustomerEngagementplatformforlocalSMEmerchants.Whereapplicable,corporatecosts,financecosts,andinterestrevenuearenotallocatedtosegmentsastheyarenotconsideredpartofthecoreoperationsofthesegmentsandaremanagedonaGroupbasis.TheconsolidatedentityisdomiciledinAustralia.AllrevenuefromexternalcustomersisgeneratedfromAustraliaonly.Segmentrevenuesareallocatedbasedonthecountryinwhichtheprojectislocated.Revenueswerenotderivedfromasingleexternalcustomer.
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16. RelatedPartyTransactions (a) SubsidiariesThe consolidated financial statements include the financial statements of Rewardle Holdings Limited and thesubsidiarieslistedinthefollowingtable:
CountyofIncorporation
ClassofShares
%EquityInterest
2016 2015RewardlePtyLtd Australia Ordinary 100% 100%
(b) Parententity
RewardleHoldingsLimitedistheultimateAustralianparententityandultimateparentoftheGroup.
(c) KeymanagementpersonnelRefertotheremunerationreportcontainedintheDirectors’Reportfordetailsoftheremunerationpaidorpayableto each member of the consolidated entity’s key management personnel for the year ended 30 June 2016. Thetotalsofremunerationpaidtokeymanagementpersonnelofthecompanyduringtheyearareasfollows: Consolidated 2016
$2015
$ Short-termbenefits 223,060 167,294Post-employmentbenefits 21,190 15,893Share-basedpayments - 705,000 244,250 888,187
(d) OthertransactionswithKeyManagementPersonnelDuringthepreviousfinancialyear,the$15,687remainingbalanceoftheloanfromtheacquisitionofRewardlePtyLtdwasrepaidtoMrWeerasooriyaon18July2014.At30June2016,theCompanyowed$4,777(30June2015:$11,653)toMrWeerasooriyaforthereimbursementofbusinessexpenses.TheCompanyenteredintoaleaseforitsprincipalplaceofbusinessonFlindersStreetinMelbournewhichcommencedon1July2014foraninitialtermofoneyear,withtwofurtheroptiontermsofoneyeareach.MrWeerasooriyaisthelessorunderthelease.Theoptiontoextendthisleasehadnotbeenexecutedandtheleasecontinuedonamonthbymonthbasis.Therentalpaidonthisleaseduringtheyearwas$24,753(2015:$24,753).
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16. RelatedPartyTransactions(Continued) During the financial period ended30 June2014, theCompany entered into convertible note agreementswith itsDirectorsandalsowithunrelatedparties.Theconvertiblenoteswereissuedwithaconversionpriceof20centspershareandaninterestrateof12%perannum.Convertiblenoteholdersreceivedattachingoptionsexpiring30June2017,exercisableat20centseach, in lieuofanestablishmentfee.Theattachingoptionswerevaluedat$0.06798eachusingtheBlack-Scholesoptionvaluationmethodology.Duringthepreviousyear,on12September2014, theCompany issued shares and paid the accrued interest to note holders on conversion of their convertible notes.AmountsrelatingtoconvertiblenoteagreementswiththeDirectorsareasfollows:
2015Director
ConvertibleNotes
Outstanding$
AttachingOptionsReceived
No.
AttachingOptionsValue
$
12%Interest
Received$
ConversionShares
ReceivedNo.
RWeerasooriya - - - 111,781 12,500,000JMatthews - 150,000 10,197 1,210 200,000BMunro - - - 3,577 400,000 - 150,000 10,197 123,722 13,900,000
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016F
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17. ParentEntityDisclosures
(a) Summaryfinancialinformation Parent 2016
$2015
$FinancialPosition Assets CurrentAssets 318,788 4,577,672Non-currentasset - -Totalassets 318,788 4,577,672 Liabilities CurrentLiabilities 100,544 82,143Totalliabilities 100,544 82,143 Equity Issuedcapital 23,529,602 23,482,102Reserves 3,023,903 2,727,112Accumulatedlosses (26,335,261) (21,713,685)Totalequity 218,244 4,495,529
FinancialPerformance Lossfortheyear (4,621,576) (6,554,878)Othercomprehensiveincome - -Totalcomprehensiveloss (4,621,576) (6,554,878)
(b)GuaranteesRewardleHoldingsLimitedhasnotenteredintoanyguaranteesinrelationtothedebtsofitssubsidiary.(c)OtherCommitmentsandContingenciesRewardleHoldings Limited has no commitments to acquire property, plant and equipment, andhas no contingentliabilitiesapartfromtheamountsdisclosedinnote14.
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18. FinancialRiskManagement The Consolidated Entity’s principal financial instruments comprise receivables, payables, loans and cash. TheConsolidatedEntitymanagesitsexposuretokeyfinancialrisksinaccordancewiththeConsolidatedEntity’sfinancialriskmanagementpolicy.Theobjectiveof thepolicy is to support thedeliveryof theConsolidatedEntity’s financialtargetswhileprotectingfuturefinancialsecurity.ThemainrisksarisingfromtheConsolidatedEntity’sfinancialinstrumentsareinterestraterisk,creditriskandliquidityrisk.TheConsolidatedEntitydoesnotspeculateinthetradingofderivativeinstruments.TheConsolidatedEntityusesdifferentmethodstomeasureandmanagedifferenttypesofriskstowhich it isexposed.These includemonitoringlevels of exposure to interest rates and assessments ofmarket forecasts for interest rates. Ageing analysis of andmonitoringofreceivablesareundertakentomanagecreditrisk,liquidityriskismonitoredthroughthedevelopmentoffuturerollingcashflowforecasts.TheBoardreviewsandagreespoliciesformanagingeachoftheserisksassummarisedbelow.PrimaryresponsibilityforidentificationandcontroloffinancialrisksrestswiththeBoard.TheBoardreviewsandagreespoliciesformanagingeachoftherisksidentifiedbelow,includingforinterestraterisk,creditallowancesandcashflowforecastprojections.Detailsofthesignificantaccountingpoliciesandmethodsadopted,includingthecriteriaforrecognition,thebasisofmeasurementandthebasisonwhichincomeandexpensesarerecognised,inrespectofeachclassoffinancialassetandfinancialliabilityaredisclosedinnote1tothefinancialstatements.RiskExposuresandResponsesInterestrateriskTheConsolidatedEntity’sexposuretorisksofchangesinmarket interestratesrelatesprimarilytotheConsolidatedEntity’s cash balances. The Consolidated Entity constantly analyses its interest rate exposure.Within this analysisconsiderationisgiventopotentialrenewalsofexistingpositions,alternativefinancingpositionsandthemixoffixedandvariableinterestrates.AstheCompanyhasnointerestbearingborrowingsitsexposuretointerestratemovementsislimitedtotheamountofinterestincomeitcanpotentiallyearnonsurpluscashdeposits.Asatreportingdate,theConsolidatedEntityhadthefollowingfinancialassetsexposedtovariableinterestratesthatarenotdesignatedincashflowhedges: Consolidated 2016
$2015
$ FinancialAssets Cashandcashequivalents(interest-bearingaccounts) 906,533 4,859,008Netexposure 906,533 4,859,008
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18. FinancialRiskManagement(Continued) Thefollowingsensitivityanalysisisbasedontheinterestrateriskexposuresinexistenceatthereportingdate.Atyearend,ifinterestrateshadmoved,asillustratedinthetablebelow,withallothervariablesheldconstant,post-taxprofitandequityrelatingtofinancialassetsoftheConsolidatedEntitywouldhavebeenaffectedasfollows: Consolidated 2016
$2015
$Judgementsofreasonablypossiblemovements: Posttaxprofit–higher/(lower) +0.5% 4,533 24,295-0.5% (4,533) (24,295)Equity–higher/(lower) +0.5% 4,533 24,295-0.5% (4,533) (24,295)
LiquidityRiskTheGroup’sobjectiveistomaintainabalancebetweencontinuityoffundingandflexibilitythroughtheuseofloansandotheravailablecreditlines.TheConsolidatedEntitymanagesliquidityriskbymonitoringimmediateandforecastcashrequirementsandensuringadequatecashreservesaremaintained.CreditriskCreditriskarisesfromthefinancialassetsoftheConsolidatedEntity,whichcomprisedepositswithbanksandtradeandotherreceivables.TheConsolidatedentity’sexposuretocreditriskarisesfrompotentialdefaultofthecounterparty, with themaximum exposure equal to the carrying amount of these instruments. The carrying amount offinancialassetsincludedinthestatementoffinancialpositionrepresentstheConsolidatedEntity’smaximumexposuretocreditriskinrelationtothoseassets.TheConsolidatedEntitydoesnotholdanycreditderivativestooffsetitscreditexposure.TheConsolidatedEntitytradesonlywithrecognised,creditworthythirdpartiesandassuchcollateralisnotrequestednorisittheConsolidatedEntity’spolicytosecureitstradeandotherreceivables.ReceivablebalancesaremonitoredonanongoingbasiswiththeresultthattheConsolidatedEntitydoesnothaveasignificantexposuretobaddebts.TheConsolidatedEntity’scashdepositsareheldwithamajorAustralianbankinginstitutionwithacreditratingofAA-otherwise,therearenosignificantconcentrationsofcreditriskwithintheConsolidatedentity.
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18. FinancialRiskManagement(Continued) ThefollowingtabledetailstheexpectedmaturityoftheGroup’sfinancialassetsandliabilitiesbasedontheearliestdateofmaturityorpaymentrespectively.Theamountsarestatedonanundiscountedbasisandincludeinterest.
Consolidated Weightedaverageeffective
interestrate%
Lessthan1month
$
1–3Months
$
3months–1year
$
1–5years$
2016 FinancialAssets: Non-interestbearing - 139,711 37,789 986 4,140Variableinterestrate 0.95 906,533 - - -Fixedinterestrate - - - - - 1,046,244 37,789 986 4,140FinancialLiabilities: Non-interestbearing - 112,300 343,921 - -Fixedinterestrate - - - - - 112,300 343,921 - -2015 FinancialAssets: Non-interestbearing - 28,471 89,266 986 714Variableinterestrate 1.35 4,859,008 - - -Fixedinterestrate - - - - - 4,887,479 89,266 986 714FinancialLiabilities: Non-interestbearing - 108,477 119,562 - -Fixedinterestrate - - - - - 108,477 119,562 - -
CapitalManagementRiskManagement controls the capital of the ConsolidatedEntity in order tomaximise the return to shareholders andensurethattheGroupcanfunditsoperationsandcontinueasagoingconcern.Management effectively manages the Group’s capital by assessing the Consolidated Entity’s financial risks andadjustingitscapitalstructureinresponsetochangesintheserisksandinthemarket.Theseresponsesincludethemanagementofexpenditureanddebtlevelsandshareandoptionissues.TheGrouphasnoexternalloandebtfacilitiesotherthantradepayables.CommodityPriceandForeignCurrencyRiskTheConsolidatedEntity’sexposuretopriceandcurrencyriskisminimal.
FairValueTheGroupdoesnothaveanyfinancialinstrumentsthataresubjecttorecurringfairvaluemeasurements.Duetotheirshort-termnature,thecarryingamountsofthecurrentreceivablesandcurrenttradeandotherpayablesisassumedtoapproximatetheirfairvalue.
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19. ShareBasedPayments Consolidated 2016
$2015
$ (a)Valueofsharebasedpaymentsinthefinancialstatements Sharebasedpaymentsexpensed-directorsfeesandbenefitsexpense - 705,000Sharebasedpaymentsexpensed–employeebenefitsexpense 296,791 772,980Sharebasedpaymentsexpensed–financecosts - 553,886Sharebasedpayments–capitalraisingcosts - 101,970 296,791 2,133,836
(b) Summaryofshare-basedpaymentsNoshareswereissuedassharebasedpaymentsduringtheyear.Setoutbelowarethesummariesofoptionsgrantedassharebasedpayments:
2016
GrantDate
ExpiryDate
Exercise
Price
Balanceatbeginningof
year
Issuedduringthe
year
Exercisedduringthe
year
ExpiredorCancelled
Balanceatendofyear
Numbervested
Number
exercisable
30/04/14 30/06/17 $0.20 19,375,000 - (150,000) - 19,225,000 19,225,000 19,225,00030/04/14 7/02/18 $0.20 1)20,000,000 - (87,500) - 19,912,500 16,162,500 12,412,5003/07/15 7/02/18 $0.20 - 60,000 - - 60,000 45,000 45,0003/07/15 7/02/18 $0.25 - 836,500 - - 836,500 601,500 601,5003/07/15 7/02/18 $0.30 - 550,000 - - 550,000 387,500 387,5003/07/15 31/03/18 $0.30 - 1,000,000 - - 1,000,000 1,000,000 1,000,000
39,375,000 2,446,500 (237,500) - 41,584,000 37,421,500 33,671,500
2015
GrantDate
ExpiryDate
Exercise
Price
Balanceatbeginningof
year
Issuedduringtheyear
Exercisedduringthe
year
ExpiredorCancelled
Balanceatendofyear
Numbervested
Number
exercisable
30/04/14 30/06/17 $0.20 15,675,000 3,700,000 - - 19,375,000 19,375,000 19,375,00030/04/14 7/02/18 $0.20 - 1)20,000,000 - - 20,000,000 15,000,000 10,000,000
15,675,000 23,700,000 - - 39,375,000 34,375,000 29,375,000
Weightedaverageexerciseprice $0.20 $0.28 $0.20 - $0.20 $0.20
$0.21
Weightedaverageexerciseprice $0.20 $0.20 - - $0.20 $0.20
$0.20
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19. ShareBasedPayments(Continued) 1)Performanceoptions,issuedtotheManagingDirectorandemployeesbecomeexercisablewhenperformancemilestonesareachievedwithinprescribedtimeframes.Theperformancemilestonestobeachievedwithintheprescribedtimeframesare:
TimefromlistingonASX(7October2014)
PerformanceOptionmilestones 12months 18months 24months 36months
1. 5,000Merchantsor500,000Members 5,000,000 2,500,000 1,000,000 -
2. 10,000Merchantsor1,000,000Members 5,000,000 2,500,000 1,000,000
PerformanceOptionmilestones 15months 21months 27months 39months
3. Revenueof$250kinrolling3monthperiod* 5,000,000 2,500,000 1,000,000 -
4. Revenueof$500kforrolling3monthperiod* 5,000,000 2,500,000 1,000,000
*Note:Therolling3monthperiodmustbewhollysatisfiedwithinthestatedtimeframesfromlistingontheASX.
Milestones1&2wereachievedby9June2015with1,000,000membersregistered,eightmonthsafterlistingontheASX.10,000,000performanceoptionsbecameexercisable.Milestone3wasachievedon30June2016,twentymonthsafterlistingontheASX.2,500,000performanceoptionsbecameexercisable.TheassessedfairvaluesoftheoptionswasdeterminedusingabinomialoptionpricingmodelorBlack-Scholesmodel,takingintoaccounttheexerciseprice,termofoption,thesharepriceatgrantdateandexpectedpricevolatilityoftheunderlingshare,expectedyieldandtherisk-freeinterestrateforthetermoftheoption.Theinputstothemodelusedwere:Grantdate 30/04/2014 30/04/2014 3/07/2015 3/07/2015 3/07/2015 3/07/2015Dividendyield(%) - - - - - -Expectedvolatility(%) 75% 75% 80% 80% 80% 80%Risk-freeinterestrate(%) 2.95% 2.95% 2.03% 2.03% 2.03% 2.03%Expectedlifeofoptions(years) 3.17 3.33 2.58 2.58 2.58 2.75Underlyingshareprice($) $0.15 $0.15 $0.265 $0.265 $0.265 $0.265Optionexerciseprice($) $0.20 $0.20 $0.20 $0.25 $0.30 $0.30Valueofoption($) $0.06798 $0.07050 $0.1498 $0.1347 $0.1222 $0.1260
(c) WeightedaverageremainingcontractuallifeTheweightedaverageremainingcontractuallifeofshare-basedpaymentoptionsthatwereoutstandingasat30June2016was1.3years(2015:2.3years).(d) WeightedaveragefairvalueThe weighted average fair value of share-based payment options granted during the year was $0.12870 (2015:$0.07011)each.
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20. EventsSubsequenttoYearEnd Therearenoothermattersorcircumstancesthathavearisensince30June2016thathaveormaysignificantlyaffecttheoperations,results,orstateofaffairsoftheGroupotherthan:On9August2016,theCompanyannouncedanacceleratedonefortwoproratanon-renounceableentitlementofferofupto65,694,508fullypaidordinarysharesat$0.05eachtoraise$3,284,725(beforecosts).TheEntitlementOffercomprisedanacceleratedinstitutionalcomponentandaretailcomponent.TheInstitutionalEntitlementOfferwascompletedon11August2016,with43,750,000sharesissuedon17August2016at$0.05each, raising$2,187,500 (before costs). TheCompany’sManagingDirectorand founder,MrRuwanWeerasooriya,subscribedfor20,000,000sharesofhisentitlementundertheInstitutionalEntitlementOffer.ArisingfromthepartialunderwritingoftheshortfallsharesundertheInstitutionalEntitlementOffer,2,000,000sharesweresubscribedforbytheunderwriter(SequoiNomineesPtyLtd),acompanyinwhichMrBrandonMunro,aDirectoroftheCompany,isadirectorandshareholder.TheRetailEntitlementOfferwascompletedon31August2016.On2September2016,9,315,818shareswereissuedundertheRetailEntitlementOfferacceptancesand3,981,116sharesundertheshortfallapplications,at$0.05each,raising a total of $664,847.MrBrandonMunro subscribed forhis entitlementof 391,667 sharesunder theRetailEntitlementOffer.
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TheDirectorsoftheCompanydeclarethat:1. ThefinancialstatementsandnotesareinaccordancewiththeCorporationsAct2001,and:
(i) complywith Accounting Standards,Corporations Regulations 2001 andothermandatory professionalreportingrequirements;and
(ii) giveatrueandfairviewofthefinancialpositionoftheCompanyasat30June2016andofitsperformanceforthefinancialyearendedonthatdate.
2. TheChiefExecutiveOfficerandChiefFinancialOfficerequivalentsoftheCompanydeclarethat:
(i) the financial recordsof theCompany for theyearhavebeenproperlymaintained in accordancewithsection286oftheCorporationsAct2001;
(ii) thefinancialstatementsandnotesfortheyearcomplywiththeaccountingstandards;and(iii) thefinancialstatementsandnotesfortheyeargiveatrueandfairview.
3. The Company has included in note 1 to the financial statements an explicit and unreserved statement ofcompliance with International Financial Reporting Standards as issued by the International AccountingStandardsBoard.
4. Intheopinionofthedirectors’therearereasonablegroundstobelievethattheCompanywillbeabletopay
itsdebtsasandwhentheybecomedueandpayable.ThisdeclarationismadeinaccordancewitharesolutionoftheBoardofDirectors.RuwanWeerasooriyaManagingDirector23September2016
DIRECTOR’S DECLARATIONF
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF REWARDLE HOLDINGS LIMITED Report on the Financial Report We have audited the accompanying financial report of Rewardle Holdings Limited (the company), which comprises the consolidated statement of financial position as at 30 June 2016, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year. Directors’ Responsibility for the Financial Report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards (IFRS). Auditor’s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Rewardle Holdings Limited, would be in the same terms if provided to the directors as at the date of this auditor’s report.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF REWARDLE HOLDINGS LIMITED Report on the Financial Report We have audited the accompanying financial report of Rewardle Holdings Limited (the company), which comprises the consolidated statement of financial position as at 30 June 2016, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year. Directors’ Responsibility for the Financial Report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards (IFRS). Auditor’s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Rewardle Holdings Limited, would be in the same terms if provided to the directors as at the date of this auditor’s report.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF REWARDLE HOLDINGS LIMITED Report on the Financial Report We have audited the accompanying financial report of Rewardle Holdings Limited (the company), which comprises the consolidated statement of financial position as at 30 June 2016, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year. Directors’ Responsibility for the Financial Report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards (IFRS). Auditor’s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Rewardle Holdings Limited, would be in the same terms if provided to the directors as at the date of this auditor’s report.
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Auditor’s Opinion In our opinion: a. the financial report of Rewardle Holdings Limited is in accordance with the Corporations Act 2001,
including:
i. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2016 and of its performance for the year ended on that date; and
ii. complying with Australian Accounting Standards and the Corporations Regulations 2001; and
b. the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.
Emphasis of Matter Without modifying our opinion, we draw attention to Note 1(b) in the financial report, which details the director’s assumptions in preparing the financial report on a going concern basis. If these assumptions do not eventuate it may cast doubt about the Group’s ability to continue as a going concern and therefore the Group may be unable to realise its assets and discharge its liabilities in the normal course of business. Report on the Remuneration Report We have audited the remuneration report included in pages 12 to 17 of the directors’ report for the year ended 30 June 2016. The directors of the company are responsible for the preparation and presentation of the remuneration report in accordance with s 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards. Auditor’s Opinion In our opinion the remuneration report of Rewardle Holdings Limited for the year ended 30 June 2016 complies with s 300A of the Corporations Act 2001.
MOORE STEPHENS AUDIT (VIC) ABN 16 847 721 257
GEORGE S DAKIS Partner Audit & Assurance Services Melbourne, Victoria 23 September 2016
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56 REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
DECLARATION OF INDEPENDENCE
AUDITOR’S INDEPENDENCE DECLARATION UNDER S 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF REWARDLE HOLDINGS LIMITED I declare that, to the best of my knowledge and belief, during the year ended 30 June 2016, there have been: i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001
in relation to the audit; and
ii. no contraventions of any applicable code of professional conduct in relation to the audit.
MOORE STEPHENS AUDIT (VIC) ABN 16 847 721 257
GEORGE S. DAKIS Partner Audit & Assurance Services Melbourne, Victoria 23 September 2016
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF REWARDLE HOLDINGS LIMITED Report on the Financial Report We have audited the accompanying financial report of Rewardle Holdings Limited (the company), which comprises the consolidated statement of financial position as at 30 June 2016, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year. Directors’ Responsibility for the Financial Report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards (IFRS). Auditor’s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Rewardle Holdings Limited, would be in the same terms if provided to the directors as at the date of this auditor’s report.
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57 REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
HOLDINGSASAT15SEPTEMBER2016SubstantialShareholdersName Units %ofTotalRUWANWEERASOORIYA 88,000,000 46.70MAMALADEHOLDINGSPTYLTD<MARMALADEA/C> 19,000,000 10.08
HoldingRanges Holders TotalUnits %IssuedShareCapital1-1,000 38 1,754 0.00%1,001-5,000 90 280,193 0.15%5,001-10,000 141 1,248,098 0.66%10,001-100,000 389 14,325,336 7.60%100,001-9,999,999,999 157 172,580,568 91.59%Totals 815 188,435,949 100.00%
Thereare181shareholderswithlessthanamarketableparcel.VotingRightsEachfullypaidordinarysharecarriesvotingrightsofonevotepershare.TheTop20HoldersofOrdinarySharesare:Position HolderName Holding %IC
1 RUWANWEERASOORIYA 88,000,000 46.70%2 MARMALADEHOLDINGSPTYLTD 19,000,000 10.08%
<MARMALADEA/C> 3 MOSCHPTYLTD 4,000,000 2.12%4 MRTRENTANTONYGOODRICK 4,000,000 2.12%5 ACN158527952PTYLTD 2,200,000 1.17%
<LAZYAXLEA/C>6 ROBERTPAULMARTIN& 2,100,000 1.11%
SUSANPAMELAMARTIN<RP&SPMARTINS/FA/C>
7 RPMSUPERPTYLTD 2,010,000 1.07%<RPMSUPERFUNDA/C>
8 SEQUOINOMINEESPTYLTD 2,000,000 1.06%<THESEQUOIA/C>
9 P&DWILLIAMSONSUPERPTYLTD 1,500,000 0.80%<WILLIAMSONSUPERFUNDA/C>
10 GOLDFIREENTERPRISESPTYLTD 1,287,500 0.68%11 VAULT(WA)PTYLTD 1,200,026 0.64%
<VAULTA/C>12 CITICORPNOMINEESPTYLIMITED 1,092,161 0.58%13 MRPAULGREGORYBROWN& 1,000,000 0.53%
MRSJESSICAORIWIABROWN<BROWNSUPERFUNDA/C>
14 DRNATHANCHARLESGOODRICK& 1,000,000 0.53%MRSJESSICAGOODRICK
15 JPMORGANNOMINEESAUSTRALIALIMITED 991,711 0.53%16 LANDMARKHOLDINGS(WA)PTYLTD 990,000 0.53%
<THENESRALA/C>
SECURITIES EXCHANGE INFORMATIONF
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58 REWARDLE HOLDINGS LIMITED - ABN 37 168 751 746
17 WILLINGVALEPTYLTD 750,000 0.40%17 TINDINDICELLARSPTYLTD 750,000 0.40%17 BOTSKYPTYLTD 750,000 0.40%
<THEBOTICANO2FAMILYA/C>18 PUTNEYBRIDGEINVESTMENTSPTYLTD 739,887 0.39%
<CHRIS&JULIATITLEYS/FA/C>19 MSALISONMARYTITLEY 726,910 0.39%20 GOLDFIREENTERPRISESPTYLTD 619,715 0.33% Totals 136,707,910 72.55% TotalIssuedCapital 188,435,949 100.00%
UnquotedEquitySecurities
Number NumberofHolders
Class Holderswithgreaterthan20%
75,664,168 11 Ordinarysharesescrowed24monthsfromlisting
RuwanWeerasooriya(98%)
1,000,000 1 Optionsexercisableat20centsexpiring30June2017
JasonPotter(100%)
15,352,500 15 Optionsexercisableat20centsexpiring30June2017
MarmaladeHoldingsPtyLtd(61%)
10,000,000 1 Performanceoptionsexercisableat20centsexpiring7February2018
RuwanWeerasooriya(100%)
9,972,500 StaffPerformanceoptionsexercisableat20centsexpiring7February2018
ESOP
836,500 StaffPerformanceOptionsexercisableat25centsexpiring7February2018
ESOP
550,000 StaffPerformanceOptionsexercisableat30centsexpiring7February2018
ESOP
2,872,500 8 Optionsexercisableat20centsexpiring30June2017
RPMSuperPtyLtd(26%)R&SMartin<S/FA/C>(26%)GoldbondsuperPtyLtd(21%)
1,000,000 1 Optionsexercisableat20centsexpiring31March2018
JasonPotter(100%)
RestrictedSecuritiesThecompanyhasthefollowingrestrictedsecuritiesonissueasatthedateofthisreport:SecurityName HoldingsORDFPSHARES–ESCROWED24MONTHSFROMLISTING 75,664,168UNLISTEDOPTIONS–ESCROWED24MONTHSFROMLISTING 15,352,500UNLISTEDPERFORMANCEOPTIONS–ESC24MONTHS 10,000,000
On-marketBuy-backCurrentlythereisnoon-marketbuy-backoftheCompany’ssecurities.ConsistencywithbusinessobjectivesThecompanyhasuseditscashandassetsinaformreadilyconvertibletocashthatithadatthetimeoflistinginawayconsistentwithitsstatedbusinessobjectives.
SECURITIES EXCHANGE INFORMATIONF
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