Unaudited Preliminary 2018 Results
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS
MARCH 2018
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
PAGE
2
Contents
Directors’ Report 3 – 5
Statement of Financial Position 6 – 7
Statement of Comprehensive Income 8 – 9
Statement of Cash Flows 10
Statement of Changes in Equity 11
Notes to the Financial Statements 12 – 46
Corporate Information 47
Auditor’s Report 48 – 52
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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Directors’ Report
The Directors are pleased to submit to shareholders their report and financial statements for the year ended
31 March 2018.
Principal Activities
Enprise Group Limited (Enprise) currently has one operating division, Enprise Solutions, which is a
solution provider for MYOB Enterprise software in Australia and New Zealand.
Enprise has a joint venture, Datagate Innovation Limited (Datagate), an early stage business that
provides online reporting and billing portals under a Software-as-a-Service (SaaS) model for resellers of
Telco/Utility services and hosted service providers. Enprise invested in another joint venture,
Kilimanjaro Consulting Pty Limited (Kilimanjaro) in September 2017. Kilimanjaro is the largest MYOB
enterprise partner in Australia.
Significant Changes in the State of Affairs
Enprise invested $1 million in cash and issued $2.1 million worth of shares in exchange for a 47.09%
ownership of Kilimanjaro Consulting Pty Limited (Kilimanjaro) on 29 September 2017. The Enprise shares
were issues at $1.39 per share. Kilimanjaro’s principal activities are similar to Enprise in that it is a
solution provider for MYOB Enterprise software in Australia.
Directors
Mr Lindsay Phillips (appointed 1 December 2013)
Mr George Cooper (appointed 10 April 2012)
Mr Nicholas Paul (appointed 1 December 2015)
Mr Ronald Baskind (appointed 31 January 2018)
Remuneration of Directors
The remuneration of the Directors for the year ended 31 March 2018 is set out below:
Group
2018 2017
$000 $000
Salaries, bonuses and commissions 201 211
Other benefits 33 50
Directors fees 65 65
Total compensation 299 326
George Cooper 201 211
Lindsay Phillips 40 40
Nicholas Paul 58 75
299 326
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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Rounding of Amounts
Amounts in the directors’ report and financial statements have been rounded off to the nearest
thousand dollars.
Review of Operations and Outlook
Enprise is leveraging its position as the only MYOB EXO and MYOB Advanced reseller with offices in both
New Zealand and Australia, to target trans-Tasman businesses. Enprise is well positioned to take
advantage of the trend towards cloud while still having a stable, well supported, secure and continually
developed on-premises offering. The Australian sales increased by 8.6% to $2.0 million, whilst New
Zealand sales increased by 7.7% to $7.0 million. Profitability from operations before income tax
decreased by 0.2% to $814,000. Net tangible assets per share increased 42% to 21 cents per share.
The company paid dividends during the year of 3.5 cents per share in July 2017 and 1 cent per share in
January 2018. The total dividend for the year was $339,284 of which $46,326 was reinvested through
the dividend reinvestment plan.
Datagate had twenty seven paying customers at 31 March 2018 representing annualised recurring
revenue of $344,856, a 55% increase from 31 March 2017. The Datagate rights issue in November 2017
was over-subscribed. The total cash raised by Datagate was $685,959 made up entirely of external
investors. Enprise chose not to subscribe and consequently Enprise’ stake in Datagate reduced to
39.29%. If Enprise’ 1,708,333 shares in Datagate were valued at the rights issue price of $1.50 per share,
the value of Enprise’ Datagate investment would be $2,562,500. The actual carrying value of Datagate is
$827,995 after a charge for the year of $408,611. The difference between the carrying value and the
value at the last investment round is $1,734,505.
Enprise obtained a 47.09% share of Kilimanjaro in September 2017. Kilimanjaro is the largest reseller of
MYOB Exo and Advanced in Australia. This was a strategic addition to the portfolio to gain synergies due
to the similarities in the business models and to expand Enprise’ reach in Australia. To date synergies
have already been gained by merging the Finance functions and Kilimanjaro utilising the cloud
infrastructure resources that Enprise already possesses. Future synergies are in progress for the
consulting and sales divisions of the business. The initial value of the investment was $3,168,400. The
carrying value of Kilimanjaro at year end was $2,871,339 after a charge for the year of $297,061. At the
time of purchase the Company also granted a put option for the remaining 52.71% for $3,967,964
(2,854,650 ENS shares). The option can be exercised between 1 September 2019 and 30 August 2020.
In December 2017 Enprise obtained a 14.6% holding in iSell, which sells a cloud-based quoting system
used by the IT reseller market in Australia, New Zealand and the UK. iSell shares the same Managed
Service Provider market as Datagate and the two entities could gain synergies in their sales and
marketing functions. The initial value of the investment was $736,833.
In November 2017 Enprise paid $223,737 for a 6.49% holding in Vadacom, a cloud based VOIP phone
and virtual PABX provider. Enprise has a similar target market as Vadacom and both entities have and
will continue to leverage off this.
Enprise is actively exploring other opportunities in the SME software market.
Donations
Enprise made donations during the year of nil (2017: $870).
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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Directors Interests
Number of
Shares
Lindsay Phillips* 1,629,682
George Cooper 414,974
Nicholas Paul 39,600
Ronald Baskind 717,978
Top 10 Shareholdings
Holding %
New Zealand Central Securities Depository
Ltd
1,961,741 20.48
Nightingale Partners Pty Ltd* 1,189,991 12.42
Red Cow Investments Pty Ltd~ 717,978 7.50
Net Power Solutions Limited 611,408 6.38
Awatea Trust 422,591 4.41
Cooper Trust 320,927 3.35
Amely Zaininger 301,189 3.14
Ironwood Investments Pty Ltd* 237,569 2.48
Anjelco Investments Pty 210,865 2.20
Bernard Israel Fridman 181,767 1.90
*Related parties to Lindsay Phillips
~Related party to Ronald Baskind
The directors’ report is signed for and on behalf of the Board, and was authorised for issue on the date
below.
Nicholas Paul George Cooper
Director Director
31 July 2018 31 July 2018
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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6
Statement of Financial Position
As at 31 March 2018
Note
2018 2017
$000 $000
ASSETS
Current Assets
Cash and cash equivalents
1,235 598
Trade and other receivables 11
1,191 1,226
Related party receivables 11
330 6
Lock Finance
3 57
Term deposit
- 154
Staff receivables 51 8
Total Current Assets
2,810 2,049
Non-Current Assets
Investments in equity accounted
joint venture
12(a),(b)
3,699 1,237
Investments in equity accounted
associate
12(c)
738 -
Investments 28
321 -
Property, plant and equipment 13
103 104
Staff receivables
86 9
Deferred tax asset 27
326 325
Intangible assets 14 1,760 1,825
Total Non-Current Assets
7,033 3,500
TOTAL ASSETS 9,843 5,549
LIABILITIES
Current Liabilities
Trade and other payables 15
1,135 1,139
Provisions 16
183 193
Term loan 25
314
Other liabilities 15 15
Total Current Liabilities
1,647 1,347
Non-Current Liabilities
Other liabilities
19 34
Term loan 25
635 -
Deferred tax liability 27 38 56
Total Non-Current Liabilities
692 90
TOTAL LIABILITIES 2,339 1,437
The above statement of financial position should be read in conjunction with the accompanying notes.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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Statement of Financial Position (cont)
As at 31 March 2018
Note
2018 2017
$000 $000
EQUITY
Equity attributable to equity
holders of the parent
Contributed equity 17
6,566 2,936
Retained earnings
938 1,176
TOTAL EQUITY 7,504 4,112
TOTAL EQUITY AND LIABILITIES 9,843 5,549
Contributed equity 17
2,936 2,936
For and on behalf of the Board, who authorise the issue of these financial statements on 31 July 2018:
Nicholas Paul George Cooper
Director Director
31 July 2018 31 July 2018
The above statement of financial position should be read in conjunction with the accompanying notes.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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Statement of Comprehensive Income
For the year ended 31 March 2017
Note
2018 2017
$000 $000
Continuing operations
Revenue
Software and licences
4,394
4,262
Services and support
4,513
3,998
Other revenue 6 43
85
8,950 8,345
Cost of Goods Sold
(3,402)
(3,222)
Advertising and marketing expense
(72)
(90)
Employee benefits expense 7(d)
(3,352)
(3,100)
Professional fees 7(b)
(241)
(183)
Travel expenses
(192)
(165)
Other operating expenses 7(a)
(664)
(631)
Finance expense
(90)
(41)
Net gain/(loss) on foreign exchange
(8)
3
Depreciation & amortisation 7(c)
(115)
(100)
Profit from operations before income tax 814 816
Share of loss from equity accounted
investment, net of tax 12 (707) (411)
Other non-operating expenses (25) -
Profit before tax 82 405
Income (tax)/benefit 8 19 252
Net profit from continuing operations 101 657
Profit for the period
101
657
Other comprehensive income - -
Total comprehensive income
for the period 101 657
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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Statement of Comprehensive Income (cont)
Note
2018 2017
$000 $000
Profit (Loss) attributable to:
Owners of the Parent
101 657
Profit for the period
101 657
Total comprehensive income (loss) attributable to:
Owners of the Parent
101 657
Total comprehensive income for the year
101 657
Earnings per share attributable to the ordinary equity
holders of the company: 10
Basic earnings per share
0.013
0.094
Diluted earnings per share
0.013
0.094
Basic earnings per share from continuing operations *
0.013
0.094
Diluted earnings per share from continuing operations *
0.013
0.094
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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Statement of Cash Flows
For the year ended 31 March 2018
Note
2018 2017
$000 $000
Cash flows from operating activities
Receipts from customers (inclusive of GST) 8,658
9,249
Payments to suppliers and employees
(inclusive of GST)
(8,024)
(8,293)
Interest paid
(33)
(2)
Interest received
11
21
Net cash flows from operating activities 18 612 975
Cash flows from investing activities
Purchase of property, plant and equipment
(65)
(15)
Purchase of intangibles
-
-
Loans given to staff
(127)
(25)
Loans repaid by staff
8
15
Purchase of Kilimanjaro
(1,000)
-
Purchase of Zhik
(97)
-
Purchase of Vadacom
(224)
-
Purchase of iSell
(738)
-
Proceeds for sale of Enprise Software
-
51
Investments in joint venture
-
(250)
Net cash outflow on disposal of subsidiary
following loss of control
-
-
Net cash flows used in investing activities
(2,243)
(224)
Cash flows from financing activities
Dividends paid
(340)
(335)
Proceeds from issue of shares
1,461
193
Share buyback
-
(80)
ASB loan
1,000
-
ASB loan repayments
(51)
Lock Finance
54
1
Insurance loan
-
(35)
Term deposit
154
-
Net cash flows used in financing activities
2,278
(256)
Net increase/(decrease) in cash and cash
equivalents
647
495
Net foreign exchange differences
(10)
(6)
Cash and cash equivalents at beginning of
period
598
109
Cash and cash equivalents at end of period
1,235
598
The above statement of cash flows should be read in conjunction with the accompanying notes.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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Statement of Changes in Equity
Share
capital
Retained
earnings
Non-
contro
lling
intere
st
2017
Total
equity
Group $000 $000 $000 $000
Balance at 1 April 2016 2,823 854 - 3,677
Net profit / (loss) for the period:
- 657 - 657
Other comprehensive income
- - -
Total comprehensive income for the period - 657 - 657
Transactions with owners, recorded directly in equity 113 (335) - (222)
Balance at 31 March 2017 2,936 1,176
-
4,112
Share
capital
Retained
earnings
Non-
contro
lling
intere
st
2018
Total
equity
Group $000 $000 $000 $000
Balance at 1 April 2017 2,936 1,176 - 4,112
New shares issued 3,630 - - 3,630
Net profit / (loss) for the period: - 101 - 101
Other comprehensive income - - - -
Total comprehensive income for the period - 101 - 101
Dividends paid - (339) - (339)
Balance at 31 March 2018
6,566 938 - 7,504
The above statement of changes in equity should be read in conjunction with the accompany notes.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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Notes to the Financial Statements
For the year ended 31 March 2018
1 Corporate information
The financial statements represented are those for the Enprise Group Limited.
Enprise Group Limited is a company limited by shares incorporated and domiciled in New Zealand whose shares
are publicly traded on the New Zealand Alternative Market (NZAX).
The nature of the operations and principal activities of the Group are described in the Directors’ Report section of
this annual report.
2 Summary of significant accounting policies
Table of Contents
(a) Basis of preparation ......................................................................................................... 13
(b) Changes in accounting policies ........................................................................................ 13
(c) Statement of compliance ................................................................................................. 13
(d) New accounting standards and interpretations .............................................................. 13
(e) Basis of consolidation ....................................................................................................... 14
(f) Investment in subsidiaries ............................................................................................... 14
(g) Investment in equity accounted associates – refer note 12 ........................................... 15
(h) Segment reporting – refer note 5 .................................................................................... 16
(i) Foreign currency translation ............................................................................................ 16
(j) Cash and cash equivalents ............................................................................................... 16
(K) Trade and other receivables – refer note 11 ................................................................... 17
(l) Property, plant and equipment – refer note 13 .............................................................. 17
(m) Leases – refer note 21 ...................................................................................................... 17
(n) Intangibles – refer note 14 ............................................................................................... 17
(o) Trade and other payables – refer note 15 ....................................................................... 18
(p) Provisions and employee benefits – refer note 16 .......................................................... 18
(q) Revenue recognition – refer note 6 ................................................................................. 18
(r) Income tax and other taxes – refer note 8 ...................................................................... 19
(s) Earnings per share – refer note 10 ................................................................................... 20
(t) Impairment of non-financial assets ................................................................................. 20
(u) Contributed equity – refer note 17 .................................................................................. 20
(v) Discontinued operation..............................................................................20
(w) Classification of investment..........................................................................21
(x) Available for sale investment carried at fair value - refer note 28.............................21
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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(a) Basis of preparation
The financial statements have been prepared under the historical cost convention, as modified by revaluations to
fair value for certain classes of assets as described in the accounting policies. The financial statements are presented
in New Zealand dollars and all values are rounded to the nearest thousand dollars ($000) unless otherwise stated.
(b) Changes in accounting policies
All policies have been applied on a basis consistent with the previous year.
(c) Statement of compliance
Enprise Group Limited is a FMC Reporting Entity under the Financial Markets Conduct Act 2013 and the Financial
Reporting Act 2013 and its financial statements comply with these acts. The company is listed on the New Zealand
Stock Exchange Alternate Market.
The financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting
Practice (“NZ GAAP”). The financial statements comply with New Zealand equivalents to International Financial
Reporting Standards (“NZ IFRS”), as appropriate for profit-oriented entities. They also comply with International
Financial Reporting Standards (“IFRS”).
(d) New accounting standards and interpretations
Standards and interpretations that have recently been issued or amended but are not yet effective have not been
adopted by the Group for the annual reporting period ending 31 March 2018. These are outlined in the table below.
Reference Title Summary of requirements Effective date –
periods
beginning on or
after
Impact on Group financial report Application
date for
Group*
NZ IFRS 9 Financial
Instruments:
Classification
and
Measurement
This standard includes a new
framework for classification and
measurement of financial instruments
and a forward-looking expected-loss
impairment model.
It requires all financial assets to be:
(a) Classified on the basis of the
entity’s business model for
managing the financial assets
and the contractual cash flow
characteristics of the financial
asset.
(b) Initially measured at fair value
plus, in the case of a financial
asset not at fair value through
profit or loss, particular
transaction costs
(c) Subsequently measured at
amortised cost or fair value.
1 January
2018
Due to the nature of the
Group's financial assets and
liabilities the introduction of a
new classification (and
associated measurement)
framework is not expected to
have a material impact on the
financial instruments of the
Group. The forward-looking
impairment requirements are
also unlikely to materially
impact the financial
statements as extended credit
terms are rarely provided and
the Group has not had a
significant history of bad
debts in the past. The Group
also has extensive credit
control policies and
procedures in place that
ensure that credit is only
provided to good quality
customers.
1 April 2018
NZ IFRS 15 Revenue from
Contracts with
Customers
The core principle of the Standard is
to recognise revenue for the amount
of consideration due to an entity in
exchange for goods and services
provided to the customer. This is
done following a 5 step process:
(1) Identify the contract with the
customer
(2) Identify the performance
obligations in the contract
(3) Determine the transaction price
(4) Allocate the transaction price to
the performance obligations in
1 January
2018
The Group has commenced a
NZ IFRS 15 implementation
project by reviewing existing
and planned sales contracts.
Software revenue will change
to becoming recognised net of
cost of goods sold. This will
have a significant impact on
Sales but no impact on Gross
Profit and Total
Comprehensive Income. The
effect on consulting revenue
recognition is immaterial as
revenue recognition occurs in
1 April 2018
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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14
the contract and
(5) Recognise revenue when (or as)
the entity satisfies a
performance obligation by
transferring control of an asset
to a customer. This may be at a
point in time or over time.
The standard is expected to have a
significant impact on the timing of
revenue recognition for the software
industry.
accordance with the defined
deliverables in the contract
and there are typically few
implementation projects that
are unfinished at year end.
Unfinished implementation
projects at year end will be
reviewed to assess whether
revenue recognition is in
accordance with the defined
deliverables in the contract.
NZ IFRS 16 Leases NZ IFRS 16 removes the classification
of leases as either operating or
finance leases – for the lessee –
effectively treating all leases as
finance leases. Lessor accounting
remains similar to current practice –
i.e. lessors continue to classify leases
as finance and operating leases.
Measures such as reported EBITDA
will improve because what are
currently accounted for as operating
lease expenses will become
depreciation and interest charges.
1 January
2019
The Group has a number of
lease commitments which will
be required to be capitalised
on the statement of financial
position when the new
standard is introduced. If NZ
IFRS 16 were introduced at
the current reporting date the
leasing asset and associated
liability would be a maximum
of the net present value of the
commitments disclosed in
note 21. The rent expense will
be replaced by interest
expense and depreciation
relating to the lease liability
and asset. The net impact on
Total Comprehensive Income
will be positive but
immaterial.
1 April 2019
(e) Basis of consolidation
The consolidated financial statements of Enprise Group Limited (“the Group”) comprise the financial statements of
the parent and its subsidiaries (as outlined in note 19) as at 31 March each year.
Subsidiaries are all entities over which the parent has control. Control is obtained when the parent has power over
the investee, is exposed to or has rights to variable returns from its investment and has the ability to use its power
to affect returns.
Subsidiaries are fully consolidated from the date on which control is obtained by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method. The acquisition method involves
recognising at acquisition date, separately from goodwill, the identifiable assets acquired, the liabilities assumed and
any non-controlling interest in the acquirer. The identifiable assets acquired and the liabilities assumed are
measured at their acquisition date fair values. The difference between the above items and the fair value of the
consideration is goodwill.
(f) Investment in subsidiaries
Subsidiary 31 March 2018 31 March 2017
Enprise Australia Pty Limited 100% 100%
Enprise Solutions Limited 100% 100%
Enprise Limited 100% 100%
GlobalBizpro Limited 100% 100%
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FINANCIAL STATEMENTS 31 MARCH 2018
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(g) Investment in equity accounted investments – refer note 12
Joint Venture Percentage Held Balance Date
Datagate Innovation Limited 39.25% 31 March
Kilimanjaro Consulting Pty Limited 47.09% 30 June
Associate Percentage Held Balance Date
iSell Pty Limited 14.06% 30 June
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to
the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities require unanimous consent of the
parties sharing control.
The results and assets and liabilities of the joint venture are incorporated in these consolidated financial statements
using the equity method of accounting. Under the equity method, an investment in a joint venture is initially
recognised in the consolidated statement of financial position at cost and adjusted thereafter to recognise the
Group's share of the profit or loss and other comprehensive income of the joint venture.
An investment in a joint venture is accounted for using the equity method from the date on which the investee
becomes a joint venture. On acquisition of the investment in a joint venture, any excess of the cost of the
investment over the Group's share of the net fair value of the identifiable assets and liabilities of the investee is
recognised as goodwill, which is included within the carrying amount of the investment. Any excess of the Group's
share of the net fair value of the identifiable assets and liabilities over the cost of the investment, after
reassessment, is recognised immediately in profit or loss in the period in which the investment is acquired.
The requirements of NZ IAS 39 are applied to determine whether it is necessary to recognise any impairment loss
with respect to the Group’s investment in a joint venture. When necessary, the entire carrying amount of the
investment (including goodwill) is tested for impairment in accordance with NZ IAS 36 Impairment of Assets as a
single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its
carrying amount. Any impairment loss recognised forms part of the carrying amount of the investment. Any reversal
of that impairment loss is recognised in accordance with NZ IAS 36 to the extent that the recoverable amount of the
investment subsequently increases.
When the Group reduces its ownership interest in a joint venture but the Group continues to use the equity method,
the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been recognised in other
comprehensive income relating to that reduction in ownership interest if that gain or loss would be reclassified to
profit or loss on the disposal of the related assets or liabilities.
When a group entity transacts with a joint venture of the Group, profits and losses resulting from the transactions
with the joint venture are recognised in the Group's consolidated financial statements only to the extent of interests
in the joint venture that are not related to the Group.
Enprise reduced its equity stake in Datagate on 5 November 2015 to 69.75%. Datagate became a joint venture on 11
December 2015 when a further 569,000 shares were issued in conjunction with a Datagate shareholders agreement
resulting in the Company losing control but maintaining joint control. This triggered a fair value adjustment to the
carrying value of Enprise’s investment in Datagate. The capital raising took place at $1.00 per share, valuing the
Company’s equity interest at $1,500,000. On 4
th
February 2016 a further 242,000 shares were issued in Datagate
reducing the Enprise share to 50.65%. The company later reduced its equity stake in Datagate on 1 December 2016
when a capital raising took place at $1.20 per share, valuing Enprise’s Datagate shares at $2,050,000. On 23
December 2016 the capital raising was completed, the total cash raised in December 2016 was $1,042,794, reducing
Enprise’s share to 44.19%. Enprise reduced its equity stake in Datagate in November 2017 when a capital raising
took place at $1.50 per share, valuing Enprise’s Datagate shares at $2,562,500. On 22 November 2017 when the
capital raising was completed, Enprise reduced its equity stake in Datagate to 39.25%.
The Company obtained a 47.09% share of Kilimanjaro in September 2017. The carrying value of Kilimanjaro at year
end was $2,871,339 after a charge for the year of $297,061. At the time of purchase the Company also granted a put
option for the remaining 52.71% for $3,967,964 (2,854,650 ENS shares). The option can be exercised between 1
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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September 2019 and 30 August 2020. Kilimanjaro is the largest reseller of MYOB Exo and Advanced in Australia. This
was a strategic addition to the portfolio to gain synergies due to the similarities in the business models and to
expand Enprise’ reach in Australia.
The Company obtained a 14.6% holding in iSell in December 2017. The carrying value of iSell at year end was
$738,471 after a charge for the year of $739. iSell is a software company that sells a cloud-based quoting system
used by the IT reseller market in Australia, New Zealand and the UK.
The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive
income of equity accounted associate, after adjustments to align the accounting policies with those of the Group,
from the date that significant influence commences until the date that significant influence ceases.
(h) Segment reporting – refer note 5
A business segment is a distinguishable component of the entity that is engaged in providing products or services
that are subject to risks and returns that are different to those of other operating business segments. Operating
segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-
maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of
the operating segments, has been identified as the Board of Directors that makes strategic decisions.
(i) Foreign currency translation
(i) Functional and presentation currency
Both the functional and presentation currency of Enprise Group Limited is New Zealand dollars ($). The subsidiaries’
and joint venture’s functional currency is the local currency which is translated to presentation currency (see below).
(ii) Transactions & balances
Subsidiary/Joint Venture Functional Currency Presentation Currency
Enprise Australia Pty Limited Australian dollars ($) New Zealand dollars ($)
Enprise Solutions Limited New Zealand dollars ($) New Zealand dollars ($)
Enprise Limited New Zealand dollars ($) New Zealand dollars ($)
GlobalBizpro Limited New Zealand dollars ($) New Zealand dollars ($)
Datagate Innovation Limited New Zealand dollars ($) New Zealand dollars ($)
Kilimanjaro Consulting Pty Limited Australian dollars ($) New Zealand dollars ($)
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates
ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are
retranslated at the rate of exchange ruling at the reporting date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate as at the date of the initial transaction.
(iii) Translation of Group Companies functional currency to presentation currency
The results of the subsidiaries are translated into New Zealand dollars as at the date of each transaction. Assets and
liabilities are translated at exchange rates prevailing at reporting date. Exchange variations resulting from the
translation are recognised in the foreign currency translation reserve in equity.
(j) Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise of cash at bank and in hand and
short-term deposits with an original maturity of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as
defined above.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
PAGE
17
(k) Trade and other receivables – refer note 11
Trade receivables, which generally have 30-90 day terms, are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method, less an allowance for impairment.
Collectability of trade receivables is reviewed on an ongoing basis at an operating unit level. Individual debts that
are known to be uncollectible are written off when identified. An impairment provision is recognised when there is
objective evidence that the Company will not be able to collect the receivable. Financial difficulties of the debtor,
default payments or debts more than 90 days overdue are considered objective evidence of impairment.
(l) Property, plant and equipment – refer note 13
Property, plant and equipment are stated at historical cost less accumulated depreciation and any accumulated
impairment losses. Such costs include the cost of replacing parts that are eligible for capitalisation when the cost
of replacing the parts is incurred. The cost is recognised in the carrying amount of the plant and equipment as a
replacement only if it is eligible for capitalisation. All other repairs and maintenance are recognised in the
statement of comprehensive income as incurred.
Depreciation is calculated on a diminishing value basis over the estimated useful life of the specific assets:
Computer equipment – 20% to 50%
Office furniture and equipment – 10% to 50%
The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at
each financial year end.
Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no further future economic
benefits are expected from its use.
(m) Leases – refer note 21
Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the
lease term.
(n) Intangibles – refer note 14
Goodwill
Goodwill that arises on the acquisition of subsidiaries are initially measured at cost of the business combination,
being the excess of the consideration transferred over the fair value of the Subsidiaries’ net identifiable assets
acquired and liabilities assumed. After initial recognition, goodwill is measured at the amount recognised at
acquisition date less any accumulated impairment losses.
Other intangible assets
Other intangible assets that are acquired by the Group and have finite useful lives are measured at cost less
accumulated amortisation and accumulated impairment losses. See note 14.
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the
specific asset to which it relates. All other expenditure, including expenditure on internally generated intangible
assets, is recognised in the statement of comprehensive income as incurred.
Except for goodwill, intangible assets are amortised on a straight-line basis in the statement of comprehensive
income over their estimated useful lives, from the date that they are available for use.
The estimated useful lives for the current and comparative periods are as follows:
Software licenses
3-5 years
Customer relationships
5 years
Amortisation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if
appropriate.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
PAGE
18
Research and development costs
Research costs are expensed as incurred.
Development activities involve a plan or design for the production of new or substantially improved products and
processes. Development expenditure is capitalised only if development costs can be measured reliably, the
product or process is technically and commercially feasible, future economic benefits are probable and the Group
intends to and has sufficient resources to complete development and to use or sell the asset. The expenditure
capitalised includes the cost of materials, direct labour, overhead costs that are directly attributable to preparing
the asset for its intended use. Capitalised development expenditure is measured at cost less accumulated
depreciation and accumulated impairment losses.
(o) Trade and other payables – refer note 15
Trade and other payables are carried at amortised cost and due to their short term nature they are not discounted.
They represent liabilities for services provided to the Group prior to the end of the financial year that are unpaid
and arise when the Group becomes obliged to make future payments in respect of the purchase of these services.
The amounts are unsecured and are usually paid within 30 days of recognition.
(p) Provisions and employee benefits – refer note 16
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle
the present obligation at the reporting date.
Employee leave benefits
Wages, salaries, annual leave
Liabilities for wages and salaries, including non-monetary benefits, and annual leave are recognised in respect of
employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the
liabilities are settled.
(q) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue
are net of returns, trade allowances, rebates and amounts collected on behalf of third parties. Revenue is
recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can
be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
(i) Rendering of services
Revenue includes software implementation and support services.
When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue
associated with the transaction is recognised by reference to the stage of completion of the transaction at the
balance date. The outcome of a transaction can be estimated reliably when all the following conditions are
satisfied:
The amount of revenue can be measured reliably;
It is probable that the economic benefits associated with the transaction will flow to the Group;
The stage of completion of the transaction at the balance date can be measured reliably; and
The cost incurred for the transaction and the costs to complete the transaction can be measured reliably
Contract revenue is also recognised under the percentage of completion method. A percentage of the revenue is
recognised in the accounting period in which the services are rendered. The stage of completion is assessed by
reference to surveys of work performed and delivered. When the outcome of an implementation and provisioning
contract cannot be estimated reliably, contract revenue is recognised only to the extent of contract costs incurred
that are likely to be recoverable. An expected loss on a contract is recognised immediately in profit or loss.
When the contract outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses
recognised that are recoverable.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
PAGE
19
Contract income, which includes license fees, hosting fees and transaction fees, is recognised in the statement of
comprehensive income in the accounting period in which the service is rendered, by reference to completion of
the specific transaction assessed on the basis of the actual service provided.
(ii) Sale of goods
Revenue includes sales of software licenses.
The revenue from the sale of third party software is recognised at the time of sale. Revenue from in-house
developed software is recognised on acceptance by the client.
The revenue from the maintenance on software developed by the Group is recognised over the period that the
maintenance applies.
(iii) Interest revenue
Interest income is accrued on a time basis, by reference to the principal outstanding and at the interest rate
applicable.
(iv) Rental income
Rental income is recognised in the income statement on a straight-line basis over the term of the lease. Lease
incentives granted are recognised as an integral part of the rental income, over the term of the lease.
(r) Income tax and other taxes – refer note 8
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities based on the current period’s taxable income. The tax rates and
tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the
consolidated financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for
all deductible temporary differences and unutilised tax losses to the extent that it is probable that taxable profits
will be available against which those deductible temporary differences and unutilised tax losses can be utilised.
Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial
recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the
taxable profit nor the accounting profit.
Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Temporary differences that can reasonably be foreseen in the next accounting period have been recognised as a
deferred tax asset.
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
i. when the GST incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of
the expense item as applicable; and
ii. receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the statement of financial position.
Cash flows are included in the Statement of Cash Flows on a gross basis and including the GST component of cash
flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation
authority is classified as part of operating cash flows.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
PAGE
20
(s) Earnings per share – refer note 10
Basic earnings per share is calculated as net profit attributable to members of the parent, divided by the weighted
average number of ordinary shares.
Diluted earnings per share is calculated as net profit attributable to members of the parent, divided by the
weighted number of ordinary shares and dilutive potential ordinary shares.
(t) Impairment of non-financial assets
The carrying amounts of the Group’s non-financial assets are reviewed at each reporting date to determine
whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is
estimated.
Goodwill is tested annually for impairment. An impairment loss is recognised if the carrying amount of an asset or
its related cash-generating unit (“CGU”) exceeds its estimated recoverable amount. The recoverable amount of an
asset or CGU is the greater of its value in use and its fair value less costs to sell. For the purposes of impairment
testing, goodwill is allocated to each of the Group’s cash-generating units that are expected to benefit from the
synergies of the combination, irrespective of whether other assets or liabilities are assigned to those units.
Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill
relates. The Group performs its impairment testing as at 31 March each year using the value in use method based
on expected future revenue. When the recoverable amount of the cash-generating unit is less than the carrying
amount, an impairment loss is recognised.
Key assumptions used in determining the future cash flows from each segment over the next 5 years with a
terminal value. The terminal value is based on a 2% perpetual growth rate after 5 years. These assumptions are
based on continued growth in new products and services being delivered by Enprise to both new and existing
customers. The Australian growth rate is higher than New Zealand as Enprise has assumed increased customer
acquisition off a smaller base, therefore a higher rate as a percentage.
The discount rate was estimated based on the weighted average cost of capital of similar public listed companies.
31 March 2018 Growth Rate Discount Rate
Enprise Services – New Zealand 5% 20%
Enprise Services – Australia 10% 20%
31 March 2017 Growth Rate Discount Rate
Enprise Services – New Zealand 5% 20%
Enprise Services – Australia 10% 20%
Management has performed sensitivity analysis on the key assumptions and believes that no reasonably possible
changes in any of the above key assumptions would cause the carrying value of goodwill to be materially lower
than its recoverable amount
(u) Contributed equity – refer note 17
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
(v) Discontinued operation – refer to note 5 and 25
A discontinued operation is a component of the Group’s business, the operation and cash flows of which can be
clearly distinguished from the rest of the Group and which:
· represents a separate major line of business or geographical area of operations;
· is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of
operations; or
· is a subsidiary acquired exclusively with a view to re-sale.
Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria
to be classified as held for sale.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
PAGE
21
(w) Classification of investments
Financial assets
The Group classifies its investments in the following categories: financial assets at fair value through profit or
loss, loans and receivables. The classification depends on the purpose for which the investments were acquired.
Management determines the classification of its investments at the initial recognition and re-evaluates this
designation at every reporting date.
Income is recognised on an effective interest basis for debt instruments other than those financial assets
designated as at fair value through the profit and loss.
Financial instruments
Financial assets at fair value through profit or loss are stated at fair value, with any resultant gain or loss
recognised in profit or loss. Financial assets at fair value through profit or loss are financial assets representing
investments in units or convertible notes. Financial assets are designated in this category if they are managed
and performance is evaluated on a fair value basis, in accordance with the Group’s investment strategy. Assets
in this category are classified as current assets if expected to be settled within 12 months, otherwise they are
classified as noncurrent. No financial assets were impaired in profit and loss account for the year ended 31
March 2017.
Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor
with no intention of selling the receivable. They are included in current assets, except for those with maturities
greater than 12 months after the reporting date which are classified as non-current assets.
The Group’s loans and receivables comprise receivables and cash and cash equivalents. Interest income is
recognised by applying the effective interest rate.
Financial assets measurement
Loans and receivables and held to maturity investments are carried at amortised cost using the effective
interest method.
Realised and unrealised gains and losses arising from changes in the fair value of the ‘financial assets at fair
value through profit or loss’ category are included in the profit or loss in the period in which they arise.
The Group assesses at each reporting date whether there is objective evidence that a financial asset or a group
of financial assets is impaired.
(x) Available for sale investments held at fair value
Investment Percentage Held Balance Date
Zhik Pty Limited 0.60% 30 June
Vadacom Limited 6.49% 31 March
Available for sale investments are recognised at fair value at year end.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
PAGE
22
3 Financial risk management objectives and policies
The Group’s principal financial instruments comprise receivables, payables and cash and short-term deposits.
The Group manages its exposure to key financial risks, including interest rate, liquidity risk and currency risk in
accordance with the Group’s financial risk management policy. The objective of the policy is to support the
delivery of the Group’s financial targets whilst protecting future financial security.
The Board reviews and agrees policies for managing each of the risks identified below, foreign currency and
interest rate risk, credit allowances, and future cash flow forecast projections.
Risk exposures and responses
Interest rate risk
The Group’s exposure to market interest rates relates primarily to the Group’s cash deposited in interest-bearing
call accounts. Interest rates are monitored although there is generally no significant variation in interest rates
offered by the different major banks.
The local operational bank accounts do not earn interest.
At 31 March 2018, if interest rates had moved, as illustrated in the table below, with all other variables held
constant, post-tax profit and equity would have been affected as follows:
Judgements of reasonably possible
movements:
Post Tax Profit
Higher/(Lower)
Equity
Higher/(Lower)
2018 2017 2018 2017
$000 $000 $000 $000
Group
+1% (100 basis points) 1 8 1 8
- 1% (100 basis points) (1) (8) (1) (8)
Credit risk
Credit risk arises from the financial assets of the Group, being trade and other receivables. The Group’s exposure
to credit risk arises from potential default of the counter party, with a maximum exposure equal to the carrying
amount of these instruments. Exposure at balance date is addressed in each applicable note. The carrying amount
of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting
date was as follows:
2018
2017
$000 $000
Loans and receivables 1,661 1,307
Cash and cash equivalents 1,235 598
Term deposits - 154
Total 2,896 2,059
The Group does not hold any credit derivatives to offset its credit exposure.
The Group trades only with recognised, creditworthy third parties and as such collateral is not requested nor is it
the Group’s policy to securitize its trade and other receivables.
It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification
procedures including an assessment of their independent credit rating, financial position, past experience and
industry reputation. Risk limits are set for each individual customer in accordance with parameters set by the
board. These risk limits are regularly monitored.
In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to
bad debts is not significant.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
PAGE
23
3 Financial risk management objectives and policies (cont)
The only significant concentration of credit risk within the Group exists in relation to cash and cash equivalents,
the majority being held with two major trading banks.
Foreign currency risk
Each entity in the Group conducts the majority of its transactions in its functional currency.
The currency exposure of the Group arises from the effect of any substantial movements in currency rates on the
transfer of funds (the large proportion being in Australian dollars) to the local currency of the subsidiary to fund
operations.
The net exposure is not significant due to the size of the foreign operations and is mitigated by the regular transfer
of small advances to spread the currency risk over time. Although each subsidiary or geographic segment is subject
to variations in foreign currency rates, each segment is not material. Refer to note 5 on segment reporting.
The Group’s exposure to foreign currency risk was as follows based on notional amounts:
2018 2017
In thousands translated from Australian
Dollars
NZD $000 NZD $000
Cash and cash equivalents 108 63
Trade and other receivables 331 225
Trade and other payables (408) (379)
Net statement of financial position exposure 31 (91)
The following significant exchange rates applied during the year:
Average rate Reporting date spot rate
2018 2017 2018 2017
Australian Dollars 0.9231 0.9383 0.9423 0.9174
At 31 March 2018, if exchange rates had moved with all other variables held constant, the impact to the post tax
profit and equity would not be material.
Liquidity risk
Liquidity risk represents the Group’s ability to meet its financial obligations on time. The Group’s cash flow enables
it to make timely payments. The Management evaluates the Group’s liquidity requirements on an ongoing basis.
The following tables set out the contractual cash flows for all financial liabilities:
Group – 2018
In thousands on New
Zealand Dollars
Carrying
amount
Contractual
cash flow
6 months
or less
6 – 12
months
1 – 2
years
2 – 5
years
Trade and other payables 1,135 1,135 1,135 - - -
Related party payables - - - - - -
Other liabilities 983 983 162 168 653 -
Total 2,118 2,118 1,297 168 653 -
Group – 2017
In thousands on New
Zealand Dollars
Carrying
amount
Contractual
cash flow
6 months
or less
6 – 12
months
1 – 2
years
2 – 5
years
Trade and other payables 1,139 1,139 1,139 - - -
Related party payables - - - - - -
Other liabilities 49 49 8 7 15 19
Total 1,188 1,188 1,147 7 15 19
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
PAGE
24
3 Financial risk management objectives and policies (cont)
Financial instruments classification
Group
Non-
derivative
financial
liabilities
Loans and
receivable
Fair value
through profit
or loss 2018
Total
31 March 2018 $000 $000 $000 $000
Financial Assets:
Cash and cash equivalents - 1,235 - 1,235
Trade and other receivables - 1,191 - 1,191
Related party receivables - 330 - 330
Lock Finance - 3 - 3
Staff receivables - 137 - 137
Term deposit - - - -
Total - 2,896 - 2,896
Financial Liabilities:
Trade and other payables 1,135 - - 1,135
Other liabilities 34 - - 34
Total 1,169 - - 1,169
Group
Non-
derivative
financial
liabilities
Loans and
receivable
Fair value
through profit
or loss 2017
Total
31 March 2017 $000 $000 $000 $000
Financial Assets:
Cash and cash equivalents - 598 - 598
Trade and other receivables - 1,226 - 1,226
Related party receivables - 6 - 6
Lock finance - 57 - 57
Staff receivables - 17 - 17
Term deposit - - 154 154
Total - 1,904 154 2,058
Financial Liabilities:
Trade and other payables 1,139 - - 1,139
Other liabilities 49 - - 49
Total 1,188 - - 1,188
The Lock Finance facility was secured over Trade Receivables of Enprise Solutions Limited and Enprise Australia Pty
Limited. This facility was relinquished in December 2017 when Enprise Solutions Limited took out the ASB term
loan.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
PAGE
25
4 Significant accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts in the financial statements. Management continually evaluates its judgements and
estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its
judgements and estimates on historical experience and on other various factors it believes to be reasonable under
the circumstances, the results of which form the basis of the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these estimates under different assumptions and
conditions.
Impairment of goodwill
The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy
stated in note 14. The recoverable amounts of cash-generating units have been determined based on value-in-use
calculations. These calculations require the use of estimates (note 2(t))
Impairment of non-financial assets other than goodwill
The Group assesses impairment of all assets at each reporting date by evaluating conditions specific to the Group
and to the particular asset that may lead to impairment. The Group follows the guidance of NZ IAS 36 to determine
if a non-financial asset is impaired. This determination requires significant judgement. In making this judgement,
the Group evaluates, among other factors, external sources of information, such as significant changes with
adverse effect and market rates, as well as internal sources of information, such as evidence of obsolescence or
physical damage.
Recognition of the deferred tax asset
The Group has recognised a deferred tax asset on its statement of financial position as at reporting date. Significant
judgement is required in determining if the utilisation of deferred tax assets is probable. The recognition of
deferred tax assets is based upon whether it is more likely than not that sufficient and suitable taxable profits will
be available in the future against which the reversal of temporary differences can be deducted. To determine the
future taxable profits, reference is made to the latest forecasts of future earnings of the Group. Where the
temporary differences are related to losses, relevant tax law is considered to determine the availability of the
losses to offset against the future taxable profits.
The Group has recognised the benefit of a deferred tax asset for unutilised tax losses for one years’ forecast
taxable profit in New Zealand. The Directors have not recognised the benefit of unutilised tax losses beyond one
year due to uncertainty with regards to future shareholder continuity.
Classification of Datagate as a joint venture
Datagate is a limited liability company whose legal form confers separation between the parties to the joint
arrangement and the company itself. Furthermore, the parties are bound by a shareholder agreement that governs
each party’s rights and obligations. There are no other facts and circumstances that indicate that the parties to the
joint arrangement have rights to the assets and obligations for the liabilities of the joint arrangement. Accordingly,
Datagate is classified as a joint venture of the Group. Refer to note 26 for details.
Classification of Kilimanjaro as a joint venture
Kilimanjaro is a limited liability company whose legal form confers separation between the parties to the joint
arrangement and the company itself. This is because currently decisions regarding Kilimanjaro’s relevant activities
requires unanimous consent of both directors, each who have been appointed by separate investors under the
company’s constitution. Accordingly, Kilimanjaro is classified as a joint venture of the Group. Refer to note 26 for
details.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
PAGE
26
4 Significant accounting judgements, estimates and assumptions (cont.)
Classification of iSell as an associate
iSell is a limited liability company which Enprise neither controls nor has joint control of. However Enprise’ interest
represents significant influence. Therefore the investment in iSell has been equity accounted for and has been
presented as an equity accounted associate in the balance sheet. Refer to note 12 for details.
5 Segment information
In presenting information on the basis of geographical segments, segment revenue is based on the geographical
location of customers. Segment assets are based on the geographical location of the assets.
The Board of Directors is the Group’s chief operating decision-maker. Management has determined the operating
segments based on the information reviewed by the Board of Directors and the Chief Executive Officer for the
purposes of allocating resources and assessing performance.
The geographic segments are described in the table below:
Legal Entity Location Geographic region
Enprise Group Limited (Parent) New Zealand New Zealand
Enprise Solutions Limited New Zealand New Zealand and Worldwide
Enprise Australia Pty Limited Australia Australia
Enprise Limited (Non-Trading) New Zealand New Zealand
Global Bizpro Limited (Non-Trading) New Zealand New Zealand
Datagate Innovation Limited * New Zealand Worldwide
Kilimanjaro Consulting Pty Limited ** Australia Australia
iSell Pty Limited *** Australia Worldwide
* Datagate has been recognised as a subsidiary until 11 December 2015 when the company lost control. From 11 December 2015, Datagate has
been recognised as a joint venture as the Company has joint control.
** Kilimanjaro has been recognised as a joint venture from 1 October 2017 as the Company has joint control.
*** iSell has been recognised as an associate from 1 January 2018 as the Company has significant influence but not joint control.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
PAGE
27
5 Segment information (cont)
Geographic segments
The following table presents revenue, profit, and certain asset information regarding the subsidiaries’ performance
for the year.
Year ended
31 March 2018
New
Zealand
$000
Australia
$000
Asia
$000
TOTAL
$000
Continued operations
Revenue 6,928 1,950 29 8,907
Other income 32 - - 32
Interest Received 10 1 - 11
Total segment revenue 6,970 1,951 29 8,950
Inter-segment elimination - - - -
Total group revenue 6,970 1,951 29 8,950
Share of loss from equity accounted
associate
(707) - - (707)
Inter-segment elimination - - - -
Net profit 173 (72) - 101
Depreciation & amortisation 115 - - 115
Capital expenditure 37 - - 37
Segment assets – current 3,107 447 - 3,554
Investments in equity accounted
associate
4,437 - - 4,437
Segment assets – other non-current 2,576 20 - 2,596
Inter-segment elimination (744) - - (744)
Total group assets 9,376 467 - 9,843
Liabilities 1,902 1,181 - 3,083
Inter-segment elimination - (744) - (744)
Total group liabilities 1,902 437 - 2,339
Year ended
31 March 2017
New
Zealand
$000
Australia
$000
Asia
$000
TOTAL
$000
Revenue 6,382 1,797 81 8,260
Other income 64 - - 64
Interest received 21 - - 21
Total segment revenue 6,467 1,797 81 8,345
Inter-segment elimination - - - -
Total group revenue 6,467 1,797 81 8,345
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
PAGE
28
5 Segment information (cont)
Year ended
31 March 2017
New
Zealand
$000
Australia
$000
Asia
$000
TOTAL
$000
Share of loss from equity accounted
associate
(411) - - (411)
Inter-segment elimination - - - -
Net profit 526 131 - 657
Depreciation & amortisation 100 - - 100
Capital expenditure 31 - - 31
Segment assets – current 2,610 290 - 2,187
Investments in equity accounted
associate
1,237 - - 1,397
Segment assets – other non-current 1,780 158 - 2,001
Inter-segment elimination (526) - - (721)
Total group assets 5,101 448 - 5,549
Liabilities 1,057 906 - 1,908
Inter-segment elimination - (526) - (721)
Total group liabilities 1,057 380 - 1,437
Enprise
Services
Corporate Total
31 March 2018
Revenue 8,579 328 8,907
Other income 32 - 32
Total segment revenue 8,611 328 8,939
Interest received 1 10 11
Total group revenue 8,612 338 8,950
Interest expense (19) (14) (33)
Depreciation and amortisation (115) - (115)
Total group expense (134) (14) (148)
Share of loss from equity accounted associated - (707) (707)
Net profit / (loss) 474 (373) 101
Enprise
Services
Corporate Total
31 March 2017
Revenue 8,260 - 8,260
Other income 64 - 64
Total segment revenue 8,324 - 8,324
Interest received 15 6 21
Total group revenue 8,339 6 8,345
Interest expense - (2) (2)
Depreciation and amortisation (100) - (100)
Total group expense (100) - (100)
Share of loss from equity accounted associated - (411) (411)
Net profit / (Loss) 1,185 (528) 657
Assets and liabilities are not reported by segment to the Board of Directors. They are reported on a consolidated
group basis.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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29
7 Expenses
2018 2017
$000 $000
(a) Other operating expenses
Communications 66 60
Premises (operating lease) 197 194
Other 401 377
664 631
(b) Professional fees
Directors fees 65 65
Accountancy 19 23
Auditor’s remuneration (See note 24) 60 88
Legal 97 7
241 183
(c) Depreciation and amortisation
Depreciation 50 35
Amortisation – Customer Relationship 65 65
115 100
(d) Employee benefits expense
Wages and salaries 3,258 3,028
Superannuation 94 72
3,352 3,100
6 Other revenue
2018 2017
$000 $000
Interest income 11 21
Rent income 32 64
43 85
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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30
8 Income tax
2018 2017
$000 $000
(a) Income tax expense
Statement of comprehensive income
Current income tax benefit (19) (252)
(b) Reconciliation between tax at
statutory rate and tax expense in the
statement of comprehensive income
Profit before tax from continuing operations 82 405
Loss before tax from discontinuing
operations
- -
82 405
Parent and Subsidiaries Profit taxed at 28% 166 286
Australian Subsidiary Profit (Loss) taxed at
30%
- 119
166 405
Statutory tax at 28% to 30% thereon 47 116
Temporary Differences 23 (252)
Non-deductible items 256 103
Non-assessable items (12) -
Tax losses utilised (333) (219)
Income tax expense reported in the
statement of comprehensive income
(19) (252)
(c) Unrecognised temporary differences
and tax losses
Unrecognised temporary differences are not
material
Accumulated tax losses (8,486) (8,819)
(d) Aggregate temporary differences from
investments in subsidiaries and associates
for which no deferred tax asset has been
recognized:
- -
(e) Imputation credits available in
subsequent period
- 15
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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31
9 Dividends paid
A final dividend of 3.5 cents (2016: 3 cents) per share was declared on 2 June 2017, the record date is 3 July 2017.
The dividend amount was $243,383 and paid on 17 July 2017. The dividend reinvestment plan did not apply.
An interim dividend of 1.0 cent per share was paid on 30 January 2018. The dividend amount was $95,451. The
dividend reinvestment plan applied resulting in 32,508 new shares being issued.
10 Earnings per share
The following reflects the income used in the basic and diluted earnings per share computations:
2018 2017
$000 $000
(a) Earnings used in calculating earnings per share
For basic earnings per share:
Net profit attributable to ordinary equity holders of the parent 101 657
For diluted earnings per share:
Net profit attributable to ordinary equity holders of the parent (from basic
EPS)
101 657
Net profit attributable to ordinary equity holders of the parent 101 657
(b) Weighted average number of shares 2018 2017
Thousands Thousands
Balance as at 1 April 6,966 6,791
Issue of ordinary shares – Staff 249 50
Rights issue 770 -
Purchase of Kilimanjaro in exchange for shares 1,560 -
Cancellation of ordinary shares – Global Bizpro - (200)
Issue of ordinary shares – Dividend Reinvestment Plan 33 325
Balance at end of year 9,578 6,966
Effect of dilution:
Share options - -
Weighted average number of ordinary shares 7,950 6,837
2018 2017
Cents per share
Cents per share
Basic earnings per share for the continued operation 1.3 9.6
Diluted earnings per share for the continued operation 1.3 9.6
The earnings and weighted average number of ordinary issued shares used
in the calculation of basic earnings per share are as follows:
$000
Net Profit attributable to ordinary equity holders 101
No.
Weighted average number of shares for the purpose of basic earnings per
share
7,950,372
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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32
10 Earnings per share (cont)
There are no instruments (e.g. share options) excluded from the calculation of diluted earnings per share that
could potentially dilute basic earnings per share in the future because they are antidilutive for either of the periods
presented.
11 Current assets - trade and other receivables
2018 2017
$000 $000
Trade receivables 1,205 1,227
Allowance for impairment loss (a) (90) (88)
Other receivables 76 87
Carrying amount of trade and other
receivables
1,191 1,226
Related party receivables (b)
Subsidiaries - -
Associate 330 6
330 6
(a) Allowance for impairment loss
Trade receivables are non-interest bearing and are generally on 30-90 day terms. A provision for bad debts is
recognised when there is objective evidence that an individual trade receivable is impaired.
Bad debts of $38,454 (2017: $18,767) have been recognised by the Group and bad debts recovery of $59,575
(2017: $42,007) by the Group in the current year. These amounts have been included in the other operating
expenses item.
Movements in the provision for impairment loss were as follows:
2018 2017
At 1 April (88) (87)
Charge for the year (62) (43)
Amounts Recovered 60 42
At 31 March (90) (88)
At 31 March 2018, the aging analysis of trade receivables is as follows:
Total 0 – 30 days 31 – 60
days
61- 90 days
PDNI*
+91 days
PDNI*
+91 days
CI*
2018 Group 1,191 739 154 81 121 97
2017 Group 1,226 737 250 48 124 67
Past due not impaired (PDNI) Considered impaired (CI)
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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33
11 Current assets - trade and other receivables (cont)
(b) Related Party Receivables
For terms and conditions of related party receivables refer to note 19.
(c) Fair value and credit risk
Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value.
The maximum exposure to credit risk is the fair value of receivables. Collateral is not held as security, nor is it the
Group's policy to transfer (on-sell) receivables to special purpose entities.
(d) Foreign exchange and interest risk
For further information on the management of foreign exchange and interest risk refer to note 3.
12 Non-current assets – investments in equity accounted associate
(a) Datagate Innovation Limited
2018 2017
$000 $000
Opening balance 1,237 1,398
Investments in associate for the year - 250
Share of loss for the year (409) (411)
828 1,237
Please refer to note 26 – Joint Venture.
The accounted associate is not a publicly listed entity and consequently does not have published price quotation.
The Company reduced its equity stake in Datagate in November 2017 to 39.25% by not investing in this capital
raising. This rights issue took place at $1.50 per share, valuing the Company’s equity interest in Datagate at
$2,562,000.
Datagate is an early stage software company that is incurring losses however it is actively marketing its product.
The recoverability of the investment in the joint venture is dependent on the joint venture meeting its profit
forecast. If the joint venture were unable to meet its profit forecast, adjustments may need to be made to the
carrying value of the investment in joint venture. Further details on the joint venture is provided in note 26.
Reconciliation of the net assets of the joint venture
Net assets of the joint venture 1,931
Proportion of the Group’s ownership interest in the joint venture 39.25% 758
Goodwill 70
Carrying amount of the Group’s interest in the joint venture 828
(b) Kilimanjaro Consulting Pty Limited
2018 2017
$000 $000
Opening balance - -
Investments in associate for the year 3,168 -
Share of loss for the year (297) -
2,871 -
Please refer to note 26 – Joint Venture.
The accounted associate is not a publicly listed entity and consequently does not have published price quotation.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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34
The Company obtained a 47.09% share of Kilimanjaro in September 2017. The carrying value of Kilimanjaro at year
end was $2,871,339 after a charge for the year of $297,061. At the time of purchase the Company also granted a
put option for the remaining 52.71% for $3,967,964 (2,854,650 ENS shares). The option can be exercised between 1
September 2019 and 30 August 2020.
Kilimanjaro is the largest reseller of MYOB Exo and Advanced in Australia. This was a strategic addition to the
portfolio to gain synergies due to the similarities in the business models and to expand Enprise’ reach in Australia.
Further details on the joint venture is provided in note 26.
Reconciliation of the net assets of the joint venture
Net assets of the joint venture (105)
Proportion of the Group’s ownership interest in the joint venture 47.09% (49)
Goodwill 2,920
Carrying amount of the Group’s interest in the joint venture 2,871
(c) iSell Pty Limited
2018 2017
$000 $000
Opening balance - -
Investments in associate for the year 739 -
Share of loss for the year (1) -
738 -
The accounted associate is not a publicly listed entity and consequently does not have published price quotation.
The Company obtained a 14.6% holding in iSell in December 2017. The carrying value of iSell at year end was
$738,471 after a charge for the year of $739.
iSell is a software company that sells a cloud-based quoting system used by the IT reseller market in Australia, New
Zealand and the UK.
Reconciliation of the net assets of the joint venture
Net assets of the joint venture 560
Proportion of the Group’s ownership interest in the joint venture 14.16% 82
Goodwill 656
Carrying amount of the Group’s interest in the joint venture 738
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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35
13 Non-current assets – property, plant and equipment
Computer
equipment
Furniture
and fittings
Office
equipment Total
$000 $000 $000 $000
Year ended 31 March 2018
Cost 150 171 84 405
Accumulated depreciation and impairment (117) (111) (73) (301)
Carrying value at beginning of the year 33 60 11 104
Additions 46 1 3 50
Disposals (1) - - (1)
Depreciation charge for the year (31) (17) (2) (50)
Carrying value at the end of the year 47 44 12 103
At 31 March 2018
Cost 195 172 87 454
Accumulated depreciation and impairment (148) (128) (75) (351)
Net carrying amount 47 44 12 103
Computer
equipment
Furniture
and fittings
Office
equipment Total
$000 $000 $000 $000
Year ended 31 March 2017
Cost 165 171 84 420
Accumulated depreciation and impairment (149) (94) (69) (312)
Carrying value at beginning of the year 16 77 15 108
Additions 31 - - 31
Disposals (1) - - (1)
Depreciation charge for the year (13) (17) (4) (34)
Carrying value at end of year 33 60 11 104
At 31 March 2017
Cost 150 171 84 405
Accumulated depreciation and impairment (117) (111) (73) (301)
Net carrying amount 33 60 11 104
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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36
14 Non-current assets – intangible assets
Customer
relationship
Goodwill
Software
licences Total
$000 $000 $000 $000
Year ended 31 March 2018
Cost 329 1,626 - 1,955
Accumulated amortisation and impairment (130) - - (130)
Carrying value at the beginning of the year 199 1,626 - 1,825
Amortisation charge for the year (65) - - (65)
Carrying value at end of year 134 1626 - 1,760
At 31 March 2018
Cost 329 1,626 - 1,955
Accumulated amortisation and impairment (195) - - (195)
Net carrying amount 134 1626 - 1,760
Customer
Relationship Goodwill
Software
licences Total
$000 $000 $000 $000
Year ended 31 March 2017
Cost 329 1,626 - 1,955
Accumulated amortisation and impairment (65) - - (65)
Carrying value at the beginning of the year 264 1,626 - 1,890
Additions - - - -
Disposal of business - - - -
Impairment - - - -
Amortisation charge for the year (65) - - (65)
Effect of foreign exchange differences - - - -
Carrying value at end of year 199 1,626 - 1,825
At 31 March 2017
Cost 329 1,626 - 1,955
Accumulated amortisation and impairment (130) - - (130)
Net carrying amount 199 1,626 - 1,825
The carrying amount of goodwill allocated to Australia’s CGU is $417,244 and the carrying amount of goodwill for
New Zealand’s is $1,209,080.
Description of the Group's intangible assets
Customer Relationships
Customer relationship costs are carried at cost less accumulated amortisation and accumulated impairment losses.
This intangible asset has been assessed as having a finite life and is amortised using the straight line value method
over a period of 5 years. The amortisation has been recognised in the statement of comprehensive income in the
line item depreciation and impairment. If an impairment indication arises, the recoverable amount is estimated
and an impairment loss is recognised to the extent that the recoverable amount is lower than the carrying amount.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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37
15 Current liabilities - trade and other payables
2018 2017
$000 $000
Trade payables 510 520
Payroll liabilities 81 72
Other payables 544 547
Carrying amount of trade and other
payables
1,135 1,139
(a) Fair value
Due to the short term nature of these payables, their carrying value is assumed to approximate their fair value.
(b) Foreign exchange and liquidity risk
For further information on the management of foreign exchange and liquidity risk refer to note 3.
16 Current liabilities – provisions
2018 2017
$000 $000
Employee entitlements 183 193
At 31 March 183 193
The staff leave entitlements which consist of holiday pay are due and payable, it is expected that they will be paid
within the following 12 month period.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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38
17 Contributed equity
2018 2017
$000 $000
Ordinary shares
(a) Ordinary shares
Issued and fully paid 6,566 2,936
Ordinary shares have no par value. Each share entitles the holder to one vote and the right to dividends. On wind
up each share has equal share of residual assets.
2018
$000
2017
$000
Movement in ordinary shares on issue
At 1 April 2017
2,936 2,823
Cancellation of ordinary shares
- (80)
Issue of ordinary shares
2,169 113
Issue of ordinary shares
1,185 25
Issue of ordinary shares
230 55
Issue of ordinary shares 46 -
At 31 March 2018 6,566 2,936
On 29 September 2017, 1,560,000 shares were issued to existing Kilimanjaro shareholders to acquire a 47.09%
stake. The shares were issued at a price of $1.39 per share.
On 20 November 2017, 852,664 shares were issued to eligible shareholders as part of a rights issue. The shares
were issued at a price of $1.39 per share.
On 8 December 2017, 165,753 shares were issued in a private placement to staff. The shares were issued at a price
of $1.39 per share.
On 31 January 2018, 32,508 shares were issued pursuant to a dividend reinvestment plan offered to eligible
shareholders. The shares were issued at a price of $1.425 per share.
The Group's objectives when managing capital, that is share capital, foreign translation reserve and retained
earnings, are to safeguard the Group's ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of
capital.
In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
Consistent with others in the industry, the group monitors capital on the basis of the gearing ratio. This ratio is
calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including current and
non-current borrowings as shown in the consolidated balance sheet) less cash and cash equivalents. Total capital is
calculated as equity as shown in the consolidated balance sheet plus net debt.
The Group took out a $1 million loan with ASB Bank on 15 December 2017. The covenant under the loan has an
interest coverage ratio requirement. Refer Note 25.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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39
18 Statement of cash flows reconciliation
2018 2017
$000 $000
Reconciliation of net profit to net cash flows from operations
Net profit
101
657
Adjustments for non-cash items:
Depreciation and amortisation 115 100
Net loss / (gain) on foreign exchange 8 (3)
Income tax benefit (19) (252)
Release of fit out loan (15) -
Share of loss from equity accounted joint venture –
Datagate
409 411
Share of loss from equity accounted joint venture –
Kilimanjaro
297 -
Share of loss from equity accounted associate – iSell 1 -
Changes in assets and liabilities
(Increase)/decrease in trade and other receivables (289) (153)
(Decrease)/increase in trade and other payables (4) 230
Decrease in other liabilities 8 (15)
Net cash from operating activities 612 975
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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40
19 Related party disclosure
(a) Subsidiaries and joint venture
The consolidated financial statements include the financial statements of Enprise Group Limited, the subsidiaries
and the joint venture, as listed in the following table:
Subsidiary name Country of
incorporation
Principal
Activity
% of equity interest Investment ($000)
2018 2017 2018 2017
Enprise Solutions
Limited
New Zealand Software sales 100 100 2,075 2,075
Enprise Australia Pty
Limited
Australia Software sales 100 100 - -
Enprise Limited New Zealand Software sales 100 100 - -
Global Bizpro Limited New Zealand Software sales 100 100 - -
Joint Venture name Country of
incorporation
Principal
Activity
% of equity interest Investment ($000)
2018 2017 2018 2017
Datagate Innovation
Limited
New Zealand Software Sales 39.25 44.19 1,352 1,352
Kilimanjaro Consulting
Pty Limited
Australia Software Sales 47.09 - 3,168 -
iSell Pty Limited Australia Software Sales 14.60 - 739 -
(b) Ultimate parent
Enprise Group Limited is the ultimate New Zealand parent entity and the ultimate parent of the Group.
(c) Key management personnel
Details relating to key management personnel, including remuneration paid, are included in note 20.
(d) Transactions with related parties
The following table provides the total amount of transactions that were entered into with related parties for the
relevant financial year (for information regarding outstanding balances on related party trade receivables and
payables at year-end, refer to notes 11 and 15 respectively):
Related Party
Sales to related
parties
Purchases from
related parties
Amounts owed by
related parties
Amounts owed to
related parties
$000 $000 $000 $000
Group
Kilimanjaro Consulting Pty
Limited
2018 293 3 318 -
2017 - - - -
Zhik Pty Limited 2018 81 - 6 -
2017 - - - -
Vadacom Limited 2018 11 - 2 -
2017 - - - -
Datagate Innovation Limited 2018 45 - 4 -
2017 58 - 6 -
Nicholas Paul (Director) ̽ 2018 - 33 - -
2017 - 50 - -
̽The outstanding balance from The Sales Factory within creditors is related by Nicholas Paul, who is a common
director for both companies.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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41
19 Related party disclosure (cont)
Terms and conditions of transactions with related parties:
(i) Shareholders and other related parties
During the year, the group provided and received services on standard commercial terms with related parties.
(ii) Subsidiaries
The transactions between the parent, Enprise Group Limited, and its subsidiaries, are comprised of cash advances
from the parent to the subsidiaries ($539k), and purchases made on behalf of the parent by the subsidiaries
($133k).
20 Key management personnel
Compensation for key management personnel
2018 2017
$000 $000
Salaries, bonuses and commissions 201 211
Other benefits 33 -
Directors fees 65 65
Total compensation 299 276
During the year, the number of employees or former employees, not being non-executive directors of Enprise
Group Limited received remuneration and the value of other benefits that exceeded $100,000 as follows:
2018 2017
Number of employees
100,001 – 110,000 5 3
110,001 – 120,000 3 1
120,001 – 130,000 - 4
130,001 – 140,000 1 -
140,001 – 150,000 1 -
150,001 – 160,000 - -
160,001 – 170,000 - 1
170,001 – 180,000 - 1
180,001 – 190,000 - -
190,001 – 200,000 1 -
200,001 – 210,000 1 -
210,001 – 220,000 - 1
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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42
21 Commitments
(i) Leasing commitments
Lease commitments
The Group has commercial lease commitments.
Enprise Solutions Limited – Auckland Office
The lease of Enprise Solutions Limited, Auckland Office, is for an initial term of 8 years, commencing 21 June
2012 with a renewal of a further six years. The renewal date is 21 June 2020. The final expiry date of the lease
is 20 June 2026.
Enprise Solutions Limited – Wellington Office
The lease of Enprise Solutions Limited, Wellington office, is for a term of 12 months, commencing on the 1st
February 2018. The lease expires on 31
st
January 2019 with a renewal of a further one year.
Enprise Solutions Limited – Hamilton Office
The lease of Enprise Solution Limited, Hamilton office, commenced on the 5th November 2007. The lease
agreement continues to operate until terminated by either party by way of 3 months’ notice in writing.
The total expense recognised for the year ended 31 March 2018 in relation to operating commitments is $198,677
(2017: $194,339).
Future minimum rentals payable under non-cancellable operating leases as at 31 March are as follows:
2018 2017
$000 $000
Within one year 128 139
After one year but not more than five years 160 288
After more than five years - -
Total minimum lease payments 288 427
(ii) Property, plant and equipment commitments
The Group had no contractual obligations to purchase plant and equipment at balance date. (2016: $nil).
22 Contingencies
There were no known material contingent liabilities at 31 March 2018 (2017: $nil).
23 Events after the reporting date
There were no known material events after the reporting date.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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43
24 Auditor’s remuneration
2018 2017
$000 $000
Amounts received or due and receivable by
Staples Rodway Auckland
Audit of financial statements – Staples
Rodway Auckland
Current year 21 57
Prior year 52 31
73 88
25 Borrowings
2018 2017
$000 $000
Secured - at amortised cost
Bank loan 949 -
949 -
Current 314 -
Non-current 635 -
949 -
Borrowing arrangements
On 15 December 2017 the Company took out a $1 million loan with ASB Bank. The bank loan is secured by
unlimited cross guarantee and indemnity from and between Enprise Group Limited, Enprise Solutions Limited,
Globalbizpro Limited, and Enprise Limited.
The weighted average interest rate is 6.830% per annum as at 31 March 2018.
Borrowing covenants
The Group has complied with all borrowing covenants in the current financial year (2017: N/A).
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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44
26 Joint Venture
(a) Datagate Innovation Limited
Datagate is a New Zealand based company and was classified as a subsidiary until 11 December 2015, when the
Company change the classification to a Joint Venture. The company reduced its equity stake in Datagate on 5
November 2015 to 69.75%. Datagate became a joint venture on 11 December 2015 when a further 569,000 shares
were issued in conjunction with a Datagate shareholders agreement resulting in the Company losing control but
maintaining joint control. This triggered a fair value adjustment to the carrying value of the Company’s investment
in Datagate. The capital raising took place at $1.00 per share, valuing the Company’s equity interest at $1,500,000.
On 4
th
February 2016 a further 242,000 shares were issued in Datagate reducing the Enprise share to 50.65%.The
investment in the joint venture is measured using the fair value method.
The Company invested $250,000 in Datagate at $1.20 per share on 1 December 2016. The capital raising total of
$1,042,794 reduced the Company’s share of Datagate to 44.19% and valued the company’s investment at
$2,050,000. The Company later reduced its equity stake in Datagate in November 2017 to 39.25% by not investing
in a second capital raising. This rights issue took place at $1.50 per share, valuing the Company’s equity interest in
Datagate at $2,562,000.
The following is summarised financial information for Datagate Innovation, based on its financial statements
prepared in accordance with IFRS.
In thousands of New Zealand
Dollars
2018
$000
2017
$000
Revenue 329 227
Profit / (Loss) from continuing operation’s (983) (862)
Other comprehensive income - -
Total comprehensive income / (loss) for the period (983) (862)
Current assets 848 1035
Non-current assets 1,977 1,341
Current liabilities (178) (163)
Non-current liabilities (716) -
Net assets 1,931 2,213
Financial Information as at 31 March 2018
2018 2017
000’s 000’s
Trade and other Debtors 84 48
Cash 764 999
Trade Creditors (127) (168)
Fixed Assets 17 14
Software Licenses 1,960 1,250
Net Assets 2,698 2,143
Charges to the Statement of Comprehensive Income of Datagate
2018 2017
000’s 000’s
Depreciation and Amortisation (349) (297)
Interest Income 16 14
Interest expense - -
Income Tax - -
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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45
26 Joint Venture (cont)
(b) Kilimanjaro Consulting Pty Limited
Kilimanjaro is the largest reseller of MYOB Exo and Advanced in Australia. This was a strategic addition to the
portfolio to gain synergies due to the similarities in the business models and to expand Enprise’ reach in Australia.
The Company obtained a 47.09% share of Kilimanjaro in September 2017. The carrying value of Kilimanjaro at year
end was $2,871,339 after a charge for the year of $297,061.
At the time of purchase the Company also granted a put option for the remaining 52.71% for $3,967,964
(2,854,650 ENS shares). The option can be exercised between 1 September 2019 and 30 August 2020.
The following is summarised financial information for Kilimanjaro Consulting, based on its financial statements
prepared in accordance with IFRS from 1 October 2017 to 31 March 2018.
In thousands of New Zealand
Dollars
2018
$000
2017
$000
Revenue 4,967 -
Profit / (Loss) from continuing operation’s (631) -
Other comprehensive income - -
Total comprehensive income / (loss) for the period (631) -
Current assets 1,720 -
Non-current assets 1,060 -
Current liabilities (2,058) -
Non-current liabilities (834) -
Net assets (111) -
Financial Information as at 31 March 2018
2018 2017
000’s 000’s
Trade and other Debtors 1,391 -
Cash 329 -
Trade Creditors (241) -
Fixed Assets 260 -
Software Licenses 801 -
Net Assets 2,541 -
Charges to the Statement of Comprehensive Income of Kilimanjaro
2018 2017
000’s 000’s
Depreciation and Amortisation (29) -
Interest Income 3 -
Interest expense (28) -
Income Tax 2 -
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
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46
27 Deferred Tax Balances
2017 Recognised
in profit
2018
Deferred tax assets (liabilities) in relation to
Customer relationships (56) 18 (38)
Doubtful debts 25 1 26
Employee benefits and entitlements 51 17 68
Tax losses carried forward 222 - 222
Audit fee accrual 15 (5) 10
Depreciation of Impaired Assets 12 (12) -
Total deferred tax recognised 269 19 288
Non-current deferred tax
Customer relationships (38)
Doubtful debts 26
Employee benefits and entitlements 68
Tax losses carried forward 222
Audit fee accrual 10
Depreciation of Impaired Assets -
288
28 Non-Equity Accounted Investments
2018 2017
$000 $000
Zhik 97 -
Vadacom 224 -
321 -
(a) Zhik Pty Limited
In June 2017 Enprise paid $97,101 for a 0.6% holding in Zhik, a manufacturer of performance sports apparel.
The asset has been treated as an available-for-sale investment carried at fair value. This is because the Company
does not have significant influence over the entity.
(a) Vadacom Limited
In November 2017 Enprise paid $223,737 for a 6.49% holding in Vadacom, a cloud based VOIP phone and virtual
PABX provider. Enprise has a similar target market as Vadacom and both entities have and will continue to
leverage off this.
The asset has been treated as an available-for-sale investment carried at fair value. This is because the Company
does not have significant influence over the entity.
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
PAGE
47
Corporate Information
New Zealand company number 1562383
ARBN (Australian Registered Body Number) 125 825 792
ABN (Australian Business Number) 41 125 825 792
Contact details
New Zealand Principal place of business
Level 2, 16 Hugo Johnston Drive Level 2, 16 Hugo Johnston Drive
Penrose, Auckland 1061 Penrose, Auckland 1061
PO Box 62262 Phone: +64 9 829 5500
Sylvia Park
Auckland 1644 Registered office
Phone: +64 9 829 5500 Level 2, 16 Hugo Johnston Drive
Fax: +64 9 829 5501 Penrose, Auckland 1061
Australia Principal place of business – Australia
P O Box R348 2/52 O’Connell Street, Parramatta
Royal Exchange NSW 2150
Sydney
NSW 1225 Suite 422-433, 838 Collins Street, Docklands
Phone: +61 2 8355 7055 VIC 3008
Fax: +61 2 8355 7045
Registered office – Enprise Australia
Internet address Level 3, 22 Market Street
www.enprisegroup.com Sydney, NSW 2000
Email
info@enprisegroup.com
Directors George Cooper Chief Executive Officer
Lindsay Phillips Chairman
Nicholas Paul Non-executive Director
Ronald Baskind Executive Director
Share Register Link Market Services Limited
Level 7, Zurich House
21 Queen Street
Auckland, New Zealand
Phone: +64 9 375 5990
Enprise Group Limited shares are listed on the New Zealand Stock Exchange Alternative Market
Auditor Staples Rodway Auckland, New Zealand
Lawyer Hudson Gavin Martin, Auckland, New Zealand
Sean Joyce, Auckland, New Zealand
Principal Bankers ASB Bank Limited, Auckland, New Zealand
ENPRISE GROUP LIMITED AND SUBSIDIARIES
FINANCIAL STATEMENTS 31 MARCH 2018
PAGE
48
Auditor’s Report
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of Enprise Group Limited
Report on the Financial Statements
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.