FY23 Results Announcement – 30 May 2023
MARKET RELEASE
30 May 2023
2023 Full Year Results Announcement
Total trading revenue up 27%, demand increasing
TradeWindow (NZX: TWL) today announced its financial results for the full year to 31 March
2023
1
, delivering a 27% increase in trading revenue driven by solid organic growth.
Key highlights include:
• Trading revenue $4.9 million, up 27%
• Annual recurring revenue
2
$5.2 million, up 39%
• Total income
3
$5.7 million, up 18%
• Gross margin 46%, down 4ppt
• Total operating expenses $17.4 million, up 21%
• EBITDA loss $11.7 million, up 22%
• Net loss after tax $9.8 million, down 10%
• Cash and cash equivalents $6.1 million
Trading revenue and total income were within the revised guidance ranges of $4.8m-$5.1m
and $5.5m-$5.8m respectively.
TradeWindow Chief Executive AJ Smith said: “TradeWindow’s strong growth reflects
increasing demand for our digital trade solutions. Exporters, importers and freight
forwarders are seeing the benefits of moving from manual processes to digital trade and are
selecting TradeWindow solutions to be more efficient, connected and transparent.
“Our comprehensive solutions, underpinned by our global trade platform, mean we are well
positioned to take advantage of the growing opportunities in digital trade in existing and new
markets.”
Financial update
Trading revenue was $4.9 million, up 27% from $3.9 million, reflecting solid organic growth
and the full-year impact of prior acquisitions. Revenue growth reflected increased sales
across all product lines with revenue for Cube (the cornerstone of the global trade platform)
up 341%. Total income was $5.7 million, up 18% from $4.9 million.
Annualised recurring revenue (ARR) grew by 39% to $5.2 million, the result of strong sales
growth and 93% customer retention.
Recurring revenue as a percentage of trading revenue was 90%, up from 83% in FY22.
1
All comparisons are to the twelve month period to 31 March 2022 unless otherwise stated
2
Annual recurring revenue is calculated using subscription revenue for March 2023 and the monthly average
of transaction revenue for Q4 2023 annualised.
3
Total income includes government R&D grants and NZTE growth grant.
TradeWindow’s monthly average revenue per customer was up 9% to $1,289 for exporters
and importers and up 22% to $595 for freight forwarders.
Total operating expenses were $17.4 million, up 21% from $14.4 million, reflecting planned
investments in market development and the global trade platform.
TradeWindow’s EBITDA loss was $11.7 million, up 22% from $9.5 million, and its net loss
after tax reduced to $9.8 million
4
from $10.8 million.
In March, TradeWindow announced cost reductions to put the business on a more
sustainable footing as it balances growth, profitability and available funding. These
reductions will be visible in FY24.
Business highlights
Mr Smith said: “Business momentum is continuing to build with a particularly strong final
quarter of 2023.
“We have seen growth in products used by exporters and importers, with revenue up 23%,
and by freight forwarders, up 36%. Our key Australasian market performed strongly, with
trading revenue up 27%.
“During the second half, we successfully implemented new processes to increase the speed
of onboarding. This minimises the time between sales conversions and receipt of revenue
as well as improves customer experience.”
Capital management
At 31 March, TradeWindow’s cash balance was $6.1 million.
During the second half, TradeWindow raised $5.4 million under a capital raising.
Acknowledging the challenging funding market, TradeWindow announced cost reductions to
reduce cash usage to a more sustainable level, with a more conservative approach to its
R&D investments. Following the cost reductions, TradeWindow anticipates sufficient funding
for the FY24 year, without any new capital receipts
5
.
TradeWindow continues to consider its capital requirements for FY24 and beyond. On 31
March, TradeWindow announced a heads of agreement with nChain for an $11.1 million
strategic investment including a combination of $2.4 million cash, and product and services
to the value of $8.7 million, which will be used to complete the global trade platform. The
agreement is subject to agreeing long-form documentation setting out full details for the
strategic partnership, and approval of those final terms by TradeWindow shareholders. The
parties are actively engaged in reaching agreement on the long-form documentation and
TradeWindow will keep the market updated as required.
4
The amount includes a fair value gain on contingent consideration revaluation. Further detail is provided in
the investor presentation.
5
Further detail on the Company’s going concern assumption are on page 10 of the 2023 Financial Statements.
Note these assumptions relate to the 12 months from today’s date.
Outlook
Mr Smith said: “TradeWindow is well positioned to maximise opportunities in digital trade
and food traceability. We anticipate that demand will be driven by exporters, importers, and
freight forwarders seeking cost efficiencies from technology and needing to meet new
regulatory standards, especially in food traceability.
TradeWindow confirms guidance for FY24 trading revenue at $7.0 million to $8.0 million.
TradeWindow continues to focus on cost discipline and anticipates average monthly cash
outflow to reduce from $1.0 million for the second half of FY23 to $400,000 for the second
half of FY24.
TradeWindow anticipates achieving monthly EBITDA breakeven by the end of FY25 and
monthly cashflow breakeven in FY26.
Guidance for FY24 is subject to ongoing geopolitical and environmental uncertainty
including the impact of ongoing supply chain challenges, and the timing of customer
decisions and implementation of Cube and other solutions.
Webcast
TradeWindow will host a webcast at 11am this morning NZT on the full year results.
Participants can register for the conference by navigating to https://s1.c-
conf.com/diamondpass/10031011-mtqeu7.html
The webcast can be accessed using the same link.
Released for and on behalf of TradeWindow by:
Deidre Campbell
Chief Financial Officer
ENDS
About TradeWindow:
Founded in December 2018, TradeWindow is an NZX-listed software company that provides digital solutions for exporters,
importers, freight forwarders, and customs brokers to drive productivity, increase connectivity, and enhance visibility.
TradeWindow’s software solutions integrate to form a cohesive digital trade platform that enables customers to more efficiently
run their back-end operations, share information and securely collaborate with a global supply chain made up of customers, ports,
terminals, shipping lines, banks, insurance companies, and government authorities.
www.tradewindow.io
Further information:
Investors
Andrew Balgarnie
TradeWindow
+64 27 227 3541
Media
Coran Lill
The Project
+64 27 342 3836
---
Investor presentation
Financial results for the year ending 31 March 2023
Investor presentation2
This presentation has been prepared by Trade Window Holdings Limited (TradeWindow). All information is current at the date ofthis
presentation, unless stated otherwise. All currency amounts are in NZ dollars unless stated otherwise.
Disclaimer
Information in this presentation:
•is for general information purposes only, and does not constitute, or contain, an offer or invitation for subscription, purchase, or recommendation of securities in
TradeWindow for the purposes of the Financial Markets Conduct Act 2013 or otherwise, or constitute legal, financial, tax, financial product, or investment advice;
•should be read in conjunction with, and is subject to TradeWindow’s Financial Statements and Annual Reports, market releases andinformation published on
TradeWindow’s website (tradewindow.io);
•includes forward-looking statements about TradeWindow and the environment in which TradeWindow operates, which are subject to uncertainties and contingencies
outside TradeWindow’s control –TradeWindow’s actual results or performance may differ materially from these statements.
•includes statements relating to past performance information for illustrative purposes only and should not be relied upon as (and is not) an indication of future
performance;
•may contain information from third-parties believed to be reliable, however, no representations or warranties are made as to theaccuracy or completeness of such
information; and
•non-GAAP financial information does not have a standardised meaning prescribed by GAAP and therefore may not be comparable to similar financial information
presented by other entities. The non-GAAP financial information included in this document has not been subject to review by auditors. Non-GAAP measures are used by
management to monitor the business and are useful to provide investors to access business performance.
Investor presentation3
Agenda
Financial results overview
Market context & opportunity
Progress against our strategy
Financial overview
Outlook and summary
4
8
13
21
28
AJ Smith
CEO & Director
Deidre Campbell
Chief Financial Officer
Andrew Balgarnie
Chief Strategy Officer
Investor presentation4
•27% increase in trading revenue fromorganic growth and prior
acquisitions.
•Tradingrevenue and total income within revisedguidance ranges
($4.8-$5.1m and $5.5-$5.8m respectively).
•Increasing demand for solutions as shippers (exporters and
importers) and freight forwardersembrace the benefits ofdigital
trade and seek efficiencies in a challengingeconomicenvironment.
•Cost reductions announced in March 2023will be visible in FY2024.
•Well positionedto maximise opportunities in existing and new
markets.
•FY24 revenue guidance confirmed at $7m-$8m.
FY23: Trading revenue +27%, demand increasing
Investor presentation5
Key performance indicators
Annual
Recurring
Revenue
$5.2m
ARPC (Freight
Forwarders)
Up 9%
$595
Gross Margin
46%
Customer
retention rate
93%
% of expenses
R&D and
Commercialisation
56%
Note, all comparisons are against FY22 unlessotherwise indicated.Annual recurring revenue is calculated using
subscription revenue for March 2023 and the monthly average of transaction revenue for Q4 2023 annualised.
Down 4 ppt
Down 1 pptUp 4 ppt on FY22
Trading revenue
Up 27% (Total Revenue
$5.7m, up 18%)
$4.9m
ARPC (Shippers)
$1,289
Up 22%
475
Customers
Up 21 on FY22 (organic
12, acquired 9)
Up 39%
Investor presentation6
Trading revenue up 27%, demand increasing
Financial summary FY23
1
Earnings before interest, tax, depreciation & amortisation
FY22FY23FY22FY23FY22FY23
Trading
revenue
Other
income
Total
income
Total expenses
EBITDA
1
Net profit
(loss) after tax
Cash and
cash
equivalents
Average
monthly cash
outflow
% Change% Change% Change% Change
Profit (Loss)Cash positionCostsRevenue
$3.9m
$4.9m
$1.0m$0.8m
$4.9m
$5.7m
($14.4m)($17.4m)
($9.5m)($11.7m)($10.8m)($9.8m)
$5.9m$6.1m
($0.8m)($1.0m)
4%19%22%-10%21%18%27%-18%
FY22FY23FY22FY23FY22FY23FY22FY23
1
EBITDA –Earnings before interest, tax, depreciation & amortisation
Investor presentation7
FY24 funding profile
Completion of capital raising
$5.4 million secured under capital raising
announced in January 2023
Supported by key investors
Sufficient funding for FY24 without additional
capital receipts
Cash balance of $6.1m at31 March 2023
Cost reductions made
Implemented plans to reduce costs in FY24 to
put the business on a more sustainable footing
This included right-sizing employee numbers
(~27% reduction)
Cost reductions will be visible in FY24
Heads of agreement with nChain
Heads of agreement with nChain announced 31 March
nChain is a world leader in Web3 and enterprise block
chain technology and the developer of the BSV
Protocol
Complementary partnership will support
TradeWindowin the delivery of the global trade
platform andaccess to new markets
nChain would become 19.99% holder in TradeWindow
by way of ordinary shares, at an issue price of $0.3952
per share
Agreement subject to shareholder approval
Parties remain in active discussions on agreeing long-
form documentation
Product and
services to the
value of $8.7
million.
$11.1m strategic
investment by nChain
–combination of:
$2.4m cash
Market context & opportunity
Investor presentation9
Forwarder
Pre-Shipment
Inspector
Export PortCarrierImport Port
CustomsInsurer
Physical
Exporters Bank
Invoicing Platform
Financial
Document Courier
Customs
Information
Importers BankCorrespondent Bank
Document Courier
Current global trade system
Key:
ExporterImporter
10
Global trade is constrained by siloed systems which rely on manual paper-based processes to orchestrate the exchange of data
The trade problem
•Cost–human intervention at each stage of the
supply chain adds cost
•Risk–high volumes of commercially sensitive
data is being exchanged over email and physical
documents leaving businesses exposed to theft
or fraud
•Inconvenience–data entry and associated
errors can lead to shipment delays
•Opaque–lack of transparency hinders the
ability to build trust between parties
Current global trade system
A single transaction often
requires the interaction of more
than 20 entities, and involves
between 10 and 20 paper
documents and 5,000 data field
exchanges.
Boston Consulting Group
1
1. Source: https://www.bcg.com/en-gb/digital-ecosystems-in-trade-finance-seeing-beyond-the-technology
“
”
Investor presentation10
Investor presentation11
Digital trade market is evolving quickly
•Supply chain disruption
•Inflation and margin pressure
•Global skills shortage
Digital Trade
Facilitation
MACROECONOMIC TRENDS
•Affordable prices
•Product availability
•Environment, Sustainability and
Governance (ESG)
CUSTOMER DEMAND TRENDS
•New free trade agreements: CPTPP, UK-
AU FTA, UK-NZ FTA
•Regulatory changes: MLETR, Electronic
Trade Documents Bill (UK)
•Supply chain traceability: US FDA Food
Traceability Rules, EU General Food Law
and CBAM
MARKET ENABLING TRENDS
Investor presentation12
Well positioned as an early mover in the growing global supply chain management IT and food traceability markets
Our opportunity
1. Source: Gartner, Software Market Insights: Logistics and Supply Chain Management, 2022.
2. Source: https://www.marketsandmarkets.com/Market-Reports/food-traceability-market-103288069.html
Global supply chain
management IT market
$32B
1
Market estimated to grow at a CAGR of
14.3% to reach $56B by 2026
Global Food
Traceability Market
$27B
2
Market estimated to grow at a CAGR of
9.1% to reach $41B by 2025
12
Progress against our strategy
Investor presentation14
Our strategy
Trusted digital trade facilitation delivered through a global trade platform
that connects our customers with their supply chain ecosystem
End-to-end connectivity
across global supply
chains
Our vision
To make global supply
chains more productive,
connected and visible
Our mission
Strategic summary
Our strategic priorities
Market penetration
Build on the
foundations of our
acquired customer
base across A/NZ, and
expand into Asia &US
Land
Add customer value
Build trusted
relationships with our
existing customers;
with market leading
brands taking up Cube
Global trade platform
Converge proprietary
and acquired software
solutions into a highly
scalable global trade
platform
Build capability
Create and maintain an
environment focused
on performance,
innovation and
accountability
Grow
PeopleUnify
Accelerate growth
Continue to look for ways to accelerate our strategic priorities and growth through targeted acquisition
Acquire
$13,000
1
$18,000
1
$18,000
1
Investor presentation15
Driving digital transformation
•–start with the most acute pain point
Complete and compliantly formatted trade documents
(data) provides the foundations for digital trade
facilitation
•–immediate opportunity to connect supply chains
Securely share data and collaborate with supply chain
partners. Cross-selling to achieve 100%+ increase in
ARPC
•–deliver value chain visibility
Supply chain traceability provides the opportunity to
differentiate products though data driven story telling
Strong customer relationships provides the opportunity to deliver additional
value through new services starting with Cube and Assure+
•Future solutions –value add solutions
Data can be re-purposed, providing for future expansion
into adjacent markets including but not limited to new
integrations, risk management and finance
Annualised ARPC growth –Shipper illustrative example
1.Annualised ARPC for 12 months ended 31 March 2023 –Shipper customers
$13,000
1
$16,000
1
$16,000
1
Investor presentation16
Lifting existing capability into our global trade platform; building maturity in infrastructure layers
High level product roadmap
TradeWindow has
applications in all key
areas
Global trade
operational workflow
Infrastructure layers
are maturing
Key:
Current functionality
Future functionality
Investor presentation17
Some of the world’s most prolific agriculture exporters rely on our solutions to run business critical operations
475 organisations use our technology
Note, logos don’t necessarily correspond to top customers.
DairyMeat
Seafood
Horticulture
Other
Investor presentation18
We have low customer concentration risk with no single customer contributing more than 5.5%
Diversified customer base
Top 10 Customers % of trading revenue
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
12345678910
Investor Presentation19
Revenue composition
Transactional revenue
•TradeWindow generates transactional revenue each time a
customer either creates or shares a set of trade documents
Subscription revenue
•Customers pay monthly, quarterly, or annual subscription fees
to access solutions
•The amount of fee varies depending on the number of
solutions subscribed for and the number of users
Installation revenue
•TradeWindow earns one-off set up fees that vary depending on
the level of service and complexity of installation
Service revenue
•TradeWindow charges for ad-hoc customisation and
enhancement requests
Customer acquisition and trade volumes drive revenue growth
11%
6%
41%
42%
Transactional
revenue
Subscription
revenue
Installation
revenue
Service
revenue
Revenue
Composition
1
4%
6%
43%
47%
1.Unaudited full year 31 March 2023
Investor presentation20
People & Culture
•Total FTE equivalent atMay2023
is 82, followingcost reductions
announced in March. (At31
March 2023, FTE was 112)
•Reduction in FTE numbers were
focused mainly on taking a more
conservative approach to R&D
investments and have
notimpactedcustomer delivery
or support
•We have continued building our
Philippines-based team, which is
working well and delivering
significantadvantages both to
our business and customers
0
10
20
30
40
50
60
70
80
90
FTE by Market
New ZealandPhilippinesAustraliaUSAIndiaSingapore
20%
17%
48%
15%
FTE by Function
COGS
S&MR&DG&A
0102030405060708090
Senior Leaders
Employees
Total
FTE by Gender
FemaleMale
FTE numbers atMay 2023
Financial overview
Income Statement $000FY23FY22Change $Change %
Trading revenue4,9203,8781,04227%
Other income816999(183)-18%
Total income5,7364,87785918%
Employee benefits expense(13,064)(10,830)(2,234)21%
Other expenses(4,362)(3,594)(768)21%
Total expenses(17,426)(14,424)(3,002)21%
EBITDA
1
(11,690)(9,547)(2,143)22%
Revaluation of contingent consideration3,43803,438100%
Depreciation & amortisation(2,412)
(1,667)
(745)45%
Net finance expenses(106)(170)64-38%
Income tax97756041774%
Net loss after tax(9,793)(10,824)1,031-10%
Investor presentation22
Financial performance
•Trading revenue up 27% to $4.9m,
excludingacquisition up 17%
•Employee costs up 21%, not reflecting cost
reductions initiated in March which will be
visible in FY24
•Other expensesup 21% to $4.4m reflecting
costs variable to revenue and planned
investment
•Contingent considerationmovement reflects
a revaluation of the deferred earnoutrelating
to Rfider
•Depreciationand amortisationup 45%
reflecting acquired intangible assets
•Income tax reflects gain from deferred tax
accounting requirements on acquired
software platforms
1
EBITDA –Earnings before interest, tax, depreciation & amortisation
Trading revenue up 27% driven by organic growth and acquisitions
Revenue by type $000FY23FY22Change %
Transactional2,3321,62244%
Subscription2,0781,59630%
Services202226-11%
Installation308434-29%
Total trading revenue4,9203,87827%
Other income816999-18%
Total income5,7364,87718%
Trading revenue by country $000FY23FY22Change %
New Zealand3,1522,35634%
Australia1,6751,44616%
Asia937623%
Total trading revenue4,9203,87827%
Investor presentation23
Revenue by type and country
•Organic trading revenue growth of 17%
delivered-driven by sales growth, particularly
Cube, to existing customers
•Other income—Comprises NZTE growth grant
and R&D grants
•High recurring, stable revenue with transactional
and subscription revenueforming 90% (FY22
87% of trading revenue
•Continued focusinNew Zealand and good
progress in Australia and Asia
Organic growth underpinning revenue increase
FreightFY23FY22Change %
Subscriber
1
customer nos. period end3253202%
Ave Subscriber customer nos.32528912%
Ave monthly revenue per customer$595$48822%
Ave monthly revenue per customer
FY23FY22
Change %
Subscriber customer revenue $000
1
4,6083,56529%
Subscriber customer nos. period end4754545%
Ave Subscriber customer nos.47341813%
Ave monthly revenue per customer$812$71214%
Shippers
FY23FY22
Change %
Subscriber customer nos. period end15013412%
Ave Subscriber customer nos.14813113%
Ave monthly revenue per customer$1,289$1,1839%
Investor presentation24
Average revenue per customer (per month)
•Increased monthly Average Revenue Per
Customer (ARPC) for Freight –up 22%
reflects higher value of new customers.
•Increased monthly ARPCfor Shippers
(exporters & Importers) –up 9%. Reflects
growing Cube adoption.
1
Subscriber customers are those that are licensing TradeWindow’s software and generate monthly subscription revenue.
These customers may also generate transaction, services & installation revenues. It excludes certificate and other revenue.
ARPC up for both customer segments
Staff nos. (FTE)
FY23FY22
ChangeChange %
Cost of goods sold2417738%
Research & Development53
41
1232%
Sales & Marketing21
17
425%
General and Administration1415(1)-10%
Total staff nos. (FTE)112902225%
Other expenses $000
FY23FY22
Change $Change %
Cost of goods sold66045920144%
Research & Development53830123779%
Sales & Marketing79655923742%
General and Administration2,3682,275934%
Total other expenses4,3623,59476821%
Employee benefits expense $000FY23FY22Change $Change %
Cost of goods sold1,9911,48550634%
Research & Development5,5904,59199822%
Sales & Marketing2,8161,97184543%
General and Administration2,6672,783(116)-4%
Total employee benefits expense13,06410,8302,23321%
Investor presentation25
Operating expenses / staff numbers
•Employee costsfor FY23 do not reflect cost
reductions initiated in March 2023. Refer slide
20 for further detail on current FTE at May 2023
•Team in Philippines,providingnew channel of
talent including software development and
customer support
•Other expenses movement reflects costs
variable to revenue growth and planned
investment including ERP system
implementation costs
•No R&D cost capitalisedto balance sheet.
Reflect planned investments for FY23
$000sFY23FY22Change $Change %Movements
Current Assets8,0227,8521702%
Non-Current Assets14,5098,6635,84667%Acquired Software & Goodwill net of amortisation
Total Assets22,53116,5156,01636%
Current Liabilities4,7302,9661,764
59%
Acquisition deferred consideration $1.0m
Non-Current Liabilities1,8282,704(876)-32%
Acquisition deferred consideration $0.2m
Total Liabilities6,5585,67088816%
Net Assets15,97310,8455,12847%
Total Equity15,97310,8455,12847%Capital raised net of costs $14.7m
Investor presentation26
Balance sheet
$000sFY23FY22Change $Change %
Operating Activities
Cash Received from Customers4,8574,04081720%
Cash Paid to Suppliers and Employees(16,949)(13,204)(3,745)28%
Income Tax Received515(8)523-6537%
Grant Income7446766810%
Operating net cash flow(10,833)(8,496)(2,337)
28%
Investing net cash flow(2,509)(1,961)(548)28%
Financing cash flow13,55714,976(1,419)-9%
Net Change in Cash2154,519(4,304)-95%
Opening Cash5,9331,4134,520320%
Closing Cash6,1485,9332154%
Average monthly cash outflow
1
(1,002)(841)(161)19%
Investor presentation27
Cashflow
•Balance date cash and cash equivalents of
$6.1m, anticipated to be sufficient funding for
FY24.
•Key activity during the period:
−Operating activity:
•Cash from customers up 20%
•Income tax –R&D tax loss cash out received
−Investing activity:
•Rfider settlement payment$2.5 m
−Financing activity :
•Capital raising (net of costs) $14.7m (Jul22 $9.6m
and Mar23 $5.1m)
Balance date cash and cash equivalents of $6.1m
1
Average monthly cashflow excludes capital raise and acquisition transactions
Outlook and summary
FY23 outlook
Investor presentation29
•TradeWindow is well positioned to maximise opportunities in digital trade and food
traceability. We anticipate that demand will be driven by exporters, importers, and
freight forwarders seeking cost efficiencies from technology and needing to meet
new regulatory standards, especially in food traceability
•TradeWindow confirms guidance for FY24 trading revenue at $7.0 million to $8.0
million
•TradeWindow continues to focus on cost discipline and anticipates average
monthly cash outflow to reduce from $1.0 million for the second half of FY23 to
$400,000 for the second half of FY24
•TradeWindow anticipates achieving monthly EBITDA breakeven by the end of FY25
and monthly cashflow breakeven in FY26
•Guidance for FY24 is subject to ongoing geopolitical and environmental uncertainty
including the impact of ongoing supply chain challenges, and the timing of
customer decisions and implementation of Cube and other solutions
Investor presentation30
Summary
•Committed to our mission of makingglobal supply chains more productive,
connected and visible and pleased with our strategic progress
•Forecasting strong revenue growth for FY24, supported by high degrees of
recurring revenue
•Sufficient funding in place for FY24, with continued focus on securing
further funding
•Continued cost discipline with targeted investments to achieve our goals
Q&A
Appendix
Investor Presentation33
Glossary
Annualised Recurring Revenue (ARR)
Annual recurring revenue is calculated using
subscription revenue for March 2023 and the monthly
average of transaction revenue for Q4 2023 annualised.
Average Revenue Per Customer (ARPC)
Is subscriber customers’ monthly revenue divided by
number of subscriber customers as at end of the month.
The value provided is the average of the monthly ARPC
for the period.
CAGR
Compound annual growth rate.
Customer retention rate
Customer retention rate is the number of subscriber
customers who leave in a month as a percentage of the
total subscriber customers at the start of that month.
The percentage provided is the average of the monthly
churn for the period. The customer retention rate is the
inverse of customer churn.
CustomsBroker
A Customs Broker is a licenced individual who acts as
an intermediary for Shippers and Freight Forwarders in
handling the sequence of customs formalities involved
in the customs clearance and importing goods.
EBITDA
Earnings before interest, taxation, depreciation and
amortisation.
Freight Forwarder
A Freight Forwarder is an organisation who arranges
and handles the transport of goods between countries
on behalf of their customers. Responsibilities can also
include storing products, negotiating transportation
rates and booking cargo space.
Shipper
A Shipper is an exporter or importer who requires
carriers to transport goods for transport from one
location to another.
Subscriber customers
Subscriber customers are those thatlicense and/or
accessTradeWindow’ssoftware on amonthly basis. It
excludes pay as you go certificaterevenue.
Recurring revenue
Revenues that are predictable, stable and can be
counted on to occur at regular intervals going forward
with a relatively high degree of certainty. For Trade
Window this is subscription and transactional revenue.
---
Trade Window Holdings Limited
Consolidated Financial Statements
For the year ended
31 March 2023
Contents
Page
1
2
3
4-5
6-7
8
9-50
General disclosures51-53
54-57
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Auditors' report
Consolidated statement of comprehensive income
Trade Window Holdings Limited
Table of contents
For the year ended 31 March 2023
Directors' declaration
Directory
-
-
Signed in accordance with a resolution of the Directors.
Dated: 30 May 2023Dated: 30 May 2023
The Directors believe that proper accounting records have been kept which enable, with reasonable
accuracy, the determination of the financial position of the Group and facilitate compliance of the financial
statements with the Financial Reporting Act 2013.
The Directors consider that they have taken adequate steps to safeguard the assets of the Group, and to
prevent and detect fraud and other irregularities. Internal control procedures are also considered to be
sufficient to provide reasonable assurance as to the integrity and reliability of the financial statements.
The board of Directors are pleased to present the financial statements of the Group for the year ended 31
March 2023.
Alasdair MacLeodAJ Smith
have been prepared using the appropriate accounting policies, which have been consistently
applied and supported by reasonable judgements and estimates.
Trade Window Holdings Limited
Directors' declaration
For the year ended 31 March 2023
In the opinion of the Directors of Trade Window Holdings Limited, the financial statements and notes, on
pages 3 to 50:
comply with New Zealand generally accepted accounting practice and present fairly the financial
position of the Group as at 31 March 2023 and the result of operations for the year ended on that
date;
1
Incorporation Number
8233653
Principal Activities:
Registered Office
TradeWindow Company Secretary
Level 4, 33-45 Hurstmere Road, Takapuna
Auckland 0622
New Zealand
Directors:
Albertus Johannes Smith
Kerry Michael Friend
Philip John Norman
Diana Marie Puketapu
Alasdair (Alexander) John Macleod
Auditor:
KPMG
KPMG Centre
18 Viaduct Harbour Avenue
Auckland 1010
New Zealand
The Directors were in office for the whole period unless otherwise
stated.
Trade Window Holdings Limited
Directory
For the year ended 31 March 2023
Develop and commercialise technology solutions that provide
international trade participants with a secure platform and tools to
establish trust and trade globally in an efficient manner across
interconnected networks
There have been no significant changes in the nature of these activities
during the year ended 31 March 2023.
2
Notes20232022
$$
Revenue3.14,920,081 3,877,617
Other income4815,652 999,330
5,735,733 4,876,947
Employee benefits expense5.1(13,064,018) (10,830,303)
Depreciation and amortisation(2,411,844) (1,666,826)
Other expenses5.2(4,361,577) (3,593,903)
(14,101,706) (11,214,085)
Revaluation of contingent consideration143,438,000 -
Net finance expense6(105,923) (169,673)
Loss before income tax(10,769,629) (11,383,758)
Income tax7976,800 560,000
Net loss after tax(9,792,829) (10,823,758)
Items that are or may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations12,741 136
Total comprehensive loss for the year(9,780,088) (10,823,622)
Earnings/(loss) per share
Basic earnings/(loss) per share $27(0.10) (0.13)
Diluted earnings/(loss) per share $27(0.10) (0.13)
Trade Window Holdings Limited
Consolidated statement of comprehensive income
For the year ended 31 March 2023
The above information is to be read in conjunction with the notes to the consolidated financial statements.
3
Notes20232022
$$
8.16,148,125 5,932,558
91,730,107 1,835,624
751,252 6,244
3.292,458 77,809
8,021,942 7,852,235
9120,218 128,304
10244,433 277,892
11842,798 1,395,315
1213,202,921 6,762,523
Restricted cash8.298,432 98,604
14,508,802 8,662,638
22,530,744 16,514,873
Trade and other payables132,060,247 1,512,709
15529,580 486,248
172,513 7,071
11551,598 506,999
Contingent consideration141,039,000 -
Contract liabilities3.2547,335 453,605
4,730,273 2,966,632
Right of use assets
Intangible assets
Total assets
Liabilities
Current liabilities
Interest bearing loans and borrowings
Related party payables
Lease liabilities
Property, plant and equipment
Trade Window Holdings Limited
Consolidated statement of financial position
As at 31 March 2023
Assets
Current Assets
Cash and cash equivalents
Trade and other receivables
Income tax receivable
Contract assets
Non-current assets
Trade and other receivables
The above information is to be read in conjunction with the notes to the consolidated financial statements.
4
Notes20232022
$$
Trade Window Holdings Limited
Consolidated statement of financial position
As at 31 March 2023
Trade and other payables1364,067 64,143
Interest bearing loans and borrowings151,264,885 1,764,473
11321,700 875,045
Contingent consideration14177,000 -
1,827,652 2,703,661
6,557,925 5,670,293
15,972,819 10,844,580
Share capital2046,180,576 31,333,484
(30,378,029) (20,585,200)
20- -
(18,663) 7,574
188,935 88,722
15,972,819 10,844,580 Total equity
Net assets
Equity
Retained earnings
Convertible notes
Foreign currency translation reserve
Share based payments reserve
Total liabilities
Non-current liabilities
Lease liabilities
The above information is to be read in conjunction with the notes to the consolidated financial statements.
5
Notes
Issued capital
Retained
earnings
Equity
components of
convertible notes
Foreign currency
translation
reserve
Share based
payment reserveTotal
$$$$$$
Balance at 1 April 2021
6,147,047 (9,761,442) 6,818,964 4,946 284,625 3,494,140
Comprehensive expense for
the year
Loss for the year-(10,823,758)- - - (10,823,758)
Other comprehensive
income/(expense)
- - - 136 - 136
-(10,823,758)- 136 -(10,823,622)
Transactions with owners of
the company
Issue of capital/dividend to
shareholders
2015,092,532 - - - - 15,092,532
Adjustment to foreign currency
- - - 2,492 - 2,492
Maturity of convertible notes
20,216,818,964 -(6,818,964)- - -
Share issue on business
acquisitions
19,20
2,353,037 - - - - 2,353,037
Share options exercised
921,904 - - - - 921,904
Equity-settled share based
payments
- - - - (195,903) (195,903)
25,186,437 -(6,818,964)2,492 (195,903) 18,174,062
Balance at 31 March 2022
31,333,484 (20,585,200) - 7,574 88,722 10,844,580
Trade Window Holdings Limited
Consolidated statement of changes in equity
For the year ended 31 March 2023
The above information is to be read in conjunction with the notes to the consolidated financial statements.
6
Notes
Issued capital
Retained
earnings
Equity
components of
convertible notes
Foreign currency
translation
reserve
Share based
payment reserveTotal
$$$$$$
Trade Window Holdings Limited
Consolidated statement of changes in equity
For the year ended 31 March 2023
Balance at 1 April 2022
31,333,484 (20,585,200) - 7,574 88,722 10,844,580
Comprehensive expense for
the year
Loss for the year-(9,792,829)- - - (9,792,829)
Other comprehensive
income/(expense)
- - - 12,741 -12,741
-(9,792,829)-12,741 -(9,780,088)
Transactions with owners of
the company
Issue of capital/dividend to
shareholders
2014,689,831 - - - - 14,689,831
Adjustment to foreign currency
- - - (38,978) -(38,978)
Share options exercised
157,261 - - - - 157,261
Equity-settled share based
payments
- - - - 100,213 100,213
14,847,092 - - (38,978) 100,213 14,908,327
Balance at 31 March 2023
46,180,576 (30,378,029) -(18,663)188,935 15,972,819
The above information is to be read in conjunction with the notes to the consolidated financial statements.
7
Notes20232022
$$
Operating activities
Cash received from customers4,857,294 4,039,791
Cash paid to suppliers and employees(16,949,307) (13,203,825)
Income tax received514,993 (7,905)
Grant income744,260 676,126
Net cash used in operating activities28(10,832,760) (8,495,813)
Investing activities
Purchase of property, plant and equipment(147,842) (240,455)
Proceeds from sale plant and equipment24,489 4,707
Purchase of intangible assets12- (100,001)
Business acquisition19(2,500,000) (1,538,445)
Payments to term deposit8.2-(98,604)
Interest received6114,229 12,106
Net cash used in investing activities(2,509,124) (1,960,692)
Financing activities
Interest paid on lease liability6,11(59,094) (53,180)
Proceeds from/(repayment) of share capital14,735,324 15,000,000
Repayment of borrowings(468,256) (616,288)
Payments for lease liability - principal portion11(509,771) (380,563)
Proceeds/(repayments) from exercise of share options218 910
Proceeds from borrowings- 1,145,000
Payments to related parties-(30,380)
Interest paid(140,970) (89,660)
Net cash flows from financing activities13,557,451 14,975,839
Net change in cash and cash equivalents215,567 4,519,334
Cash and cash equivalents at the beginning of the financial year5,932,558 1,413,224
Cash and cash equivalents at the end of the financial year8.16,148,125 5,932,558
Trade Window Holdings Limited
Consolidated statement of cash flows
For the year ended 31 March 2023
The above information is to be read in conjunction with the notes to the consolidated financial statements.
8
1
These financial statements have been prepared in accordance with Generally Accepted Accounting
Practice in New Zealand ('NZ GAAP'). They comply with the New Zealand Equivalents to International
Financial Reporting Standards and other applicable Financial Reporting Standards, as appropriate for
Tier 1 for-profit entities. The consolidated financial statements of the Group also comply with
International Financial Reporting Standards (IFRS). The financial statements were authorised for issue
by the directors on the date included on page 1. The Group is a reporting entity for the purposes of the
Financial Reporting Act 2013 and its financial statements comply with that Act.
Accounting policies
The accounting policies set out below have been consistently applied to all periods presented in these
financial statements. Where applicable, certain comparatives have been reclassified to comply with the
accounting presentation adopted in the current year to ensure consistency with the current year
classification.
Basis of measurement
The financial statements have been prepared on the historical cost basis.
These financial statements are presented in New Zealand dollars ($) which is the Company's functional
currency, rounded to the nearest dollar. They have been prepared on a GST exclusive basis except for
receivables and payables that are stated inclusive of GST.
New accounting standards and interpretations
No new standards have been issued for the period ended 31 March 2023 that materially impact the
Group.
New accounting standards and interpretations issued but not yet effective
At the date of authorisation of these consolidated financial statements, there are no new accounting
standards or interpretations issued but not yet adopted that are expected to have a material impact on
the Group.
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
General information and statement of compliance
Trade Window Holdings Limited is a profit orientated entity.
Trade Window Holdings Limited is incorporated and domiciled in New Zealand and is a company
registered under the Companies Act 1993.
Consolidated financial statements for the Group are presented. The consolidated financial statements
of Trade Window Holdings Limited (company) as at and for the year ended 31 March 2023 comprise of
the Company and its subsidiaries (together referred to as the Group and individually as subsidiaries).
Trade Window Holdings Limited was incorporated on 10 September 2021 for the purpose of being the
holding company for Trade Window Limited. Prior to Trade Window Holdings Limited's incorporation,
the Group comprised of Trade Window Limited and its subsidiaries.
The subsidiaries are set out in note 18.
The principal activities of the Group during the year were developing and commercialising technology
solutions that provide international trade participants with a secure platform and tools to establish trust
and trade globally in an efficient manner across interconnected networks.
Basis of preparation
9
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
1
-
-
-
-
-
-
a.
In response, the Board has approved the FY24 Annual Budget which extends to May 2024 and
projects sufficient cash would be available to satisfy all financial obligations which arise in the next 14
months from balance date. The forecast cash flows are dependent on the assumptions outlined below.
Assumptions which give rise to a Material Uncertainty in relation to Going Concern:
Achievement of targeted revenue growth.
Sales are budgeted to increase by approximately 50%. The full year impact of deals won and
price increases implemented during FY23 is expected to generate approximately 45% of this
increase. The balance is expected to be generated from new customers.
As at 31 March 2023, the Group held Cash and Cash Equivalents of $6.1 million (2022 $5.9 million).
The Group successfully raised capital of $9.6 million (net of capital raise expenses) in July 2022 and
$5.1 million in March 2023 to fund their day-to-day operations. However, negative macro-economic
conditions over recent months have caused the capital market to contract rapidly.
The preparation of the financial statements in conformity with NZ IFRS and IFRS requires
management to make judgements, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ
from these estimates.
The principal areas of judgement in preparing these financial statements are set out below. Information
about critical judgements in applying accounting policies that have the most significant effect on the
amounts recognised in the financial statements is included in the following notes:
Note 1 Going concern, in determining whether the Group is a going concern.
Note 3.1 Revenue, in determining the revenue recognition of implementation revenue.
Note 11 Leases, on determining whether a contract contains a lease, lease terms, incremental
borrowing rate and lease renewal options.
Note 14 Contingent consideration, in determining the projected revenues for the target
periods, forecast share price at completion dates and settlement.
Note 19 Business acquisitions, in determining the fair value of the consideration transferred,
and fair value of the assets acquired (including intangibles and goodwill) and liabilities
assumed.
Note 22 Share-based payments, in determining the probability of the share price achieving the
vesting hurdle and the rate of employee attrition.
Going concern
The Group prepares its financial statements on a going concern basis and expects to be able to realise
its assets and meet its financial obligations in the normal course of business.
The Group is an early-stage organisation that is currently investing in the development of a Global
Trade Platform and as such has reported a loss for the year ended 31 March 2023 of $9.8 million
(2022 $10.8 million), and operating cash outflows of $10.8 million (2022 $8.5 million), and is projected
to continue to incur expenditure in excess of revenue for a period of at least 12 months from the date
of issuing these financial statements.
Use of estimates and judgements
General information and statement of compliance (continued)
10
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
1
b.
c.
d.
e. Shortfall payment to the Rfider vendors is in Shares.
A shortfall payment of $0.6 million is required in accordance with the Rfider purchase
agreement due to a reduction in th e Grou p’s share price subsequent to the transaction taking
place. The forecast assumes the shortfall payment will be settled in shares rather than cash.
The method of settlement of the shortfall payment may be in shares and/or cash.
The forecast’s assumptions have been stress tested against a range of scenarios including a reduction
in revenue without commensurate cost cutting, and a reduction in the anticipated cash investment
which demonstrates that the cashflow forecast is sensitive to changes in these key assumptions.
Should the Group not be able to achieve its forecasts in line with assumptions identified in Notes a - e,
the Group may be unable to have sufficient liquidity to be able to continue as a going concern for a
period of at least 12 months from the issuance of these financial statements. As a result, these events
and conditions indicate that a material uncertainty exists that may cast significant doubt on the Group’s
ability to continue as a going concern and, therefore, the Group may be unable to realise its assets and
discharge its liabilities in the normal course of business.
The Directors consider the Group to be a going concern and believe the Group will achieve its financial
forecasts and secure investment to the extent necessary to ensure the Group will have sufficient
liquidity to continue as a going concern and meet its financial obligations for the foreseeable future.
The Group's debt provider, ASB, introduced a new covenant in FY23 requiring consolidated
cash balances to be maintained at twice the amount of bank facility limits at all times. The
forecast currently projects the cash balance to reduce below that threshold which will give rise
to an Event of Review unless the covenant is modified or waivered. An Event of Review
requires Management to enter a dialogue with the bank to discuss plans, and is not
considered an Event of Default. The group has a long relationship with the ASB as a debt
provider and as a cornerstone shareholder and expects the collaborative relationship would
continue.
General information and statement of compliance (continued)
Going concern - (continued)
Successful implementation of cost-reduction plans
Salary and operating expenditure is projected to reduce by approximately 30% (excluding
transition costs). The Board and Management have implemented a plan to reduce costs and
cash usage to a more sustainable level by reducing headcount and reducing costs. The
savings are predominantly from redundancies in Research and Development and will not
impact the Group’s ability to continue to serve its current and future customers, meet market
demand and generate revenue from existing solutions.
Signing of the nChain agreement and receipt of cash consideration.
On 31 March 2023, the Group entered into a Heads of Agreement with strategic investor
nChain for $11.1 million. The $11.1 million investment includes product and services to the
value of $8.7 million and cash of $2.4 million for a 19.99% shareholding in the Company. The
forecasts assume the successful conclusion of this agreement. In the event this is
unsuccessful it will be necessary for the Board and management to seek alternate strategic
investors.
Ability to negotiate loan repayments for ASB loan.
11
2 Significant accounting policies
Intra company (refer to Note 18) balances and transactions, and any unrealised income and expenses
(except for foreign currency transaction gains and losses) arising from intra-group transactions, are
eliminated.
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
Basis of consolidation
Business combinations
The Group accounts for business combinations using the acquisition method when the acquired set of
activities and assets meets the definition of a business and control is transferred to the Group. In
determining whether a particular set of activities and assets is a business, the Group assesses whether
the set of assets and activities acquired includes, at a minimum, an input and substantive process and
whether the acquired set has the ability to produce outputs.
The consideration transferred in the acquisition is generally measured at fair value, as are the identified
net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain
purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred,
except if related to the issue of debt or equity securities. The consideration transferred does not include
amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised
in profit or loss.
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or
has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity. The financial statements of subsidiaries are included in the
consolidated financial statements from the date on which control commences until the date on which
control ceases.
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the
subsidiary, and any related non-controlling interests and other components of equity. Any resulting gain
or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair
value when control is lost.
Transactions eliminated on consolidation
12
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
2 Significant accounting policies (continued)
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is
reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if no impairment loss had been
recognised.
Foreign currency
Transactions in foreign currencies are translated to the respective functional currencies of Group
entities at exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated
to the functional currency at the exchange rate at that date. The foreign currency gain or loss on
monetary items is the difference between amortised cost in the functional currency at the beginning of
the year, adjusted for effective interest and payments during the year, and the amortised cost in foreign
currency translated at the exchange rate at the end of the year.
The foreign currency translation reserve arises from the translation of the Group's overseas operations
into the presentation currency of these financial statements.
Impairment
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 and indefinite-lived intangible assets are 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. Fair value less cost of disposal (FVLCD) is deemed to be the more appropriate method
given the Group is an early-stage business hence there are difficulties in assessing WACC, forecast
revenue, cash flows and forecast accuracy. Further, as a publicly listed entity, the fair value can be
easily ascertained.
Subject to an operating segment ceiling test, CGUs to which goodwill has been allocated are
aggregated so that the level at which impairment testing is performed reflects the lowest level at which
goodwill is monitored for internal reporting purposes. Goodwill acquired in a business combination is
allocated to groups of CGUs that are expected to benefit from the synergies of the combination.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs
are allocated first to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs),
and then to reduce the carrying amounts of the other assets in the CGU (group of CGUs) on a pro rata
basis.
13
20232022
$$
3.1
Transactional revenue2,332,065 1,621,634
Subscription revenue2,077,202 1,591,800
Service revenue205,970 230,004
Installation revenue304,844 434,179
Total revenue4,920,081 3,877,617
Revenue policy
Transactional revenue
Subscription revenue
Service revenue
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
Revenue
The Group generates revenue primarily from customers subscribing to and utilising its software
platforms. In the following table, revenue from contracts with customers is disaggregated by primary
nature and timing of revenue recognition.
Revenue is measured based on the consideration specified in the contract with a customer. The Group
recognises revenue when it transfers control of a good or service to a customer. Revenue is disclosed
net of credit notes and discounts. Unbilled revenue at year end is recognised as contract asset and any
unearned revenue at year end is recognised as contract liabilities. See table 3.2 for details of contract
assets and liabilities at year end.
Transactional revenue is recorded at the time the transactions are processed by the customer using
the Group’s software platforms. Transaction revenue is based on volume of usage and is recognised at
a point in time. Customers are mainly invoiced monthly and have payment terms of up to 30-days.
Subscription revenue comprises recurring monthly fees from customers who have subscribed to the
Group’s software platforms. The fee provides the customer with access to the various software
platforms, regular software updates and customer support services. Subscription revenue is invoiced
either in advance or monthly in arears, depending on the software product. Subscription revenue is
recognised over time as the services are used or delivered to the customer. Customers are mainly
invoiced monthly and have payment terms of up to 30-days.
Service revenue relates to ad-hoc customer support services outside of the scope of the standard
support agreement. The services are mainly for customer support to customers who request non-
standard customisation or assistance with a specific project. Service revenue is recognised over time
as the service is delivered to the customer, these range from a few hours to a week. Customers are
mainly invoiced monthly and have payment terms of up to 30-days.
14
20232022
$$
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
3.1
Installation revenue
3.2
Receivables, which are included in "Trade and other receivables"641,871 418,236
Contract assets92,458 77,809
Contract liabilities(547,335) (453,605)
186,994 42,440
The following table provides information about receivables, contract assets and contract liabilities
from contracts with customers.
The contract liabilities primarily relate to advance consideration the Group received from customers for
installation and for subscribing to its software platforms, for which revenue is recognised over time.
The contract assets primarily relate to the Group’s rights to consideration for work completed but not
billed at the reporting date. Contract assets are assessed for impairment under the requirements in the
financial instruments standard. Any unconditional rights to consideration are presented separately as a
receivable.
Information about remaining performance obligation has not been provided as these have an expected
duration of less than 12 months.
Contract balances
Revenue (continued)
Installation revenue comprises of one-off installation, software customisation and user training services.
The Group has assessed that installation is a separate performance obligation for certain products, and
all the activities are considered as one performance obligation which is satisfied over the term of the
contract as the customer simultaneously receives and consumes the benefits provided to them. After
the software is installed, the customers subscribe to ongoing maintenance and support services to
ensure that the software is regularly maintained by the Group. The majority of the Group’s Prodoc,
Cube and Speedi customers also pay a transaction based fee for usage of the software products
enabling the customer to match the cost to their seasonal cash inflows. The installation and transaction
fees for Prodoc are a single performance obligation and are recognised over the contract period. The
Group uses the output method of measuring progress of installation as it fairly depicts the entity’s
performance towards complete satisfaction of the performance condition. Majority of customers are
invoiced in advance and then on milestone completion. Payment terms are up to 30-days from invoice
date.
15
20232022
$$
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
4
Profit on sale of fixed assets10,643 -
Grant income804,885 997,950
Other124 1,380
Total other income815,652 999,330
Grant income
The Group is eligible for the IRD’s Research & Development Tax Incentive (RDTI) scheme which
allows for a 15% tax credit for eligible R&D expenditure not claimed under any other scheme.
In the prior period the Group was entitled to the Government's R&D project grant scheme which made
it eligible to a percentage reimbursement of project related costs through Callaghan Innovation. Where
the grant related to expenditure, it was recognised as income over the periods in which the expenditure
was incurred.
The Group is entitled to NZTE’s International Growth Fund Grant to assist with acceleration of growth in
the Australian market. This Grant allows for reimbursement of up to 50% of actual costs incurred in
carrying out pre-approved growth projects in Australia.
Other income
16
20232022
$$
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
5.1Employee benefits expense
Short term employee benefits (salaries)10,470,659 8,148,327
Post-employment benefits (superannuation)360,356 266,346
Other employee benefits2,233,003 2,415,630
Total employee benefits expense
13,064,018 10,830,303
5.2Other expenses include the following:
The following fees were paid or payable for services provided by KPMG
- Fees relating to the audit210,000 195,000
Directors fees254,533 107,896
Bad debts written off87 252
Loss on sale or disposal of fixed assets- 28,296
6Net finance expense
Interest income114,229 12,106
Interest expense(161,058) (128,599)
Interest on lease liabilities(59,094) (53,180)
Total net finance expense
(105,923) (169,673)
Finance income and expenses policy
Finance income comprises interest income on funds invested using the effective interest method.
Finance costs comprise interest expense on borrowings and interest on lease liabilities.
Borrowing costs that are not directly attributable to the acquisition, construction or production of a
qualifying asset are recognised in profit or loss using the effective interest method.
17
20232022
$$
7Income tax
Loss before income tax(10,769,629) (11,383,758)
28%28%
(3,015,496) (3,187,452)
Non-deductible expenses(1,057,852) 161,914
Recognition of tax losses previously unrecognised(976,800) -
Deferred tax not recognised in current tax year4,038,810 3,002,650
Prior year R&D tax losses cashed-out (Note 24)- (560,000)
Effect of different tax rates34,538 22,888
(976,800) (560,000)
Income tax expense / (income) is represented by:
Current tax- (560,000)
Deferred tax(976,800) -
(976,800) (560,000)
Deferred tax assets and liabilities
Recognised Deferred Tax Assets and Liabilities
Year ended 31 March 2023
Opening
Recognised
in profit or
loss
Business
AcquisitionsClosing
(422,916) 195,467 (976,800) (1,204,249)
ESOP(452,745) 505,647 -
52,902
Leases(506,967) 515,507 -
8,540
Accruals and Employee Benefits 135,608 (7,481) -
128,127
Net Taxable Loss1,247,020 (232,340) - 1,014,680
- 976,800 (976,800) -
Actual income tax expense / (income)
The current tax asset of $51,252 (2022: $6,244) represents the amount of income taxes receivable in
respect of the current period.
The research and development (R&D) tax loss cash-out was a 28% refund of the Group's tax losses
from eligible R&D activity. R&D tax losses cashed-out reduced the Group's business losses carried
forward to future years. The rules focus on start-up companies engaging in intensive R&D, and are
intended to reduce their exposure to market failures and tax distortions arising from the general tax
treatment of losses. It is intended to provide a cashflow timing benefit only. The Group is no longer
eligible to receive this benefit.
The table below shows the movement in the deferred tax balances that are recognised at the beginning
and end of the period.
Intangibles and Property, plant
and equipment
A deferred tax asset has been recognised to the extent of the deferred tax liability resulting from the
business acquisitions (Note 19).
Expected income tax
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
Tax expense
Domestic tax rate (28%)
18
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
7Income tax (continued)
Recognised Deferred Tax Assets and Liabilities
Year ended 31 March 2022
Opening
Recognised
in profit or
loss
Business
AcquisitionsClosing
(151,971) (270,945) - (422,916)
ESOP- (452,745) - (452,745)
Leases(10,528) (496,439) - (506,967)
Accruals and Employee Benefits 49,454 86,154 - 135,608
Net Taxable Loss113,045 1,133,975 - 1,247,020
- - - -
Income tax policy
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax
is not recognised on the initial recognition of goodwill. A deferred tax asset is recognised only to the
extent that it is probable that future taxable profits will be available against which the asset can be
utilised.
Intangibles and Property, plant
and equipment
The Group has $31,188,839 (2022: $20,694,140) of tax losses for which no deferred tax asset has
been recognised in the statement of financial position as it is not probable that the Group will be
achieving sufficient taxable profits in the foreseeable future. The current year tax loss is subject to
Inland Revenue assessment.
Tax expense comprises current and deferred tax and is calculated using rates enacted or substantively
enacted at balance date. Current tax and deferred tax is recognised in profit or loss except to the
extent that it relates to items recognised directly in equity or other comprehensive income, in which
case the tax is recognised as an adjustment against the item to which it relates.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using
tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in
respect of previous years.
19
20232022
$$
8.1
Bank accounts6,148,125 5,932,558
6,148,125 5,932,558
Cash and cash equivalents policy
8.2
Cash and cash equivalents comprises cash balances and call deposits used by the Group in the
management of its short-term commitments.
Restricted cash
Restricted cash is comprised of cash balances held with Commonwealth Bank Australia of $98,432
(2022: $98,604), that is held as a rent guarantee over one of the leases.
The bank accounts include cash balances held with ASB Bank Limited of $5,927,007 (2022:
$5,825,531), which is a related party. The Group also had an undrawn overdraft facility with ASB Bank
limited to a maximum of $150,000. The interest rate at balance date was 9.98% (2022: 6.23%) per
annum.
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
Cash and cash equivalents
Total cash and cash equivalents
20
20232022
$$
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
9
Current
Trade receivables641,871 418,226
Less: Provision for doubtful debts(6,571) -
635,300 418,226
Other receivables518,031 1,090,297
Prepayments576,776 327,101
1,730,107 1,835,624
Non-Current
Prepayments120,218 128,304
120,218 128,304
Total trade and other receivables1,850,325 1,963,928
Trade and other receivables (unless it is a trade receivable without a significant financing component)
is initially recognised at fair value plus transaction costs. A trade receivable without a significant
financing component is initially measured at the transaction price. It is then subsequently measured at
amortised cost using the effective interest method, less any provision for impairment.
A provision for impairment of trade receivables is established when there is objective evidence that the
Group will not be able to collect all amounts due according to the original terms of receivables.
Impairment is calculated based on an expected credit loss (ECL) model under NZ IFRS 9. Refer to
Note 16 for information about calculation and recognition of expected credit losses. The amount of the
provision is recognised in profit or loss. There was no provision for impairment recognised during the
year.
Trade and other receivables
Bad debt expense of $87 (2022: $252) has been recorded within other expenses in the statement of
comprehensive income.
Trade and other receivables policy
21
10
Lease-
hold
improve-
ments
Motor
vehicles
Furnit-
ure and
fittings
Plant
and
equip-
ment Total
$$$$$
39,208 37,904 60,486 363,150 500,748
19,476 - 17,908 119,674 157,058
- - - 4,800 4,800
- (28,348)- (59,761) (88,109)
58,684 9,556 78,394 427,863 574,497
10,698 19,004 5,411 187,743 222,856
- (15,573)- (49,919) (65,492)
18,185 3,593 8,128 142,794 172,700
28,883 7,024 13,539 280,618 330,064
28,510 18,900 55,075 175,407 277,892
29,801 2,532 64,855 147,245 244,433
- 37,904 22,201 194,062 254,167
39,208 - 48,042 153,205 240,455
- - - 47,921 47,921
-- (9,757) (32,038) (41,795)
39,208 37,904 60,486 363,150 500,748
- 11,044 2,602 74,970 88,616
-- (1,976) (6,815) (8,791)
10,698 7,960 4,785 119,588 143,031
10,698 19,004 5,411 187,743 222,856
- 26,860 19,599 119,092 165,551
28,510 18,900 55,075 175,407 277,892
Net carrying amount at 31 March 2021
Net carrying amount at 31 March 2022
Disposals
Depreciation expense
Total accumulated depreciation
Summary
Opening balance
Net carrying amount at 31 March 2023
Year ended 31 March 2022
Opening balance
Summary
Net carrying amount at 31 March 2022
Additions
Additions through business acquisition
Disposals
Total property, plant and equipment at cost
Accumulated depreciation
Depreciation expense
Total accumulated depreciation
Opening balance
Disposals
Total property, plant and equipment at cost
Accumulated depreciation
Additions through business acquisition
Disposals
Additions
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
Property, plant and equipment
Year ended 31 March 2023
Opening balance
22
10
Property, plant and equipment policy
Recognition and measurement
Depreciation
- 20.00% - 33.30%
- 21.00%
- 10.50%
- 30.00% - 67.00%
Impairment
There was no impairment of assets recognised for during the year.
Any gain or loss on disposal of an item of property, plant and equipment (calculated as the difference
between the net proceeds from disposal and the carrying amount of the item) is recognised in profit or
loss within other income or other expenses.
For property, plant and equipment, depreciation is based on the cost of an asset less its residual value.
Depreciation is recognised in profit or loss on a straight line basis over the estimated useful lives of
each component of an item of property, plant and equipment.
The depreciation rates for significant items of property, plant and equipment are as follows:
Leasehold improvements
Motor vehicles
Furniture and fittings
Plant and equipment
Depreciation methods, useful lives and residual values are reviewed at each financial year end and
adjusted if appropriate.
The carrying amounts of property, plant and equipment are reviewed at each balance date to
determine whether there is any indication of impairment. If any such indication exists, the asset's
recoverable amount is estimated.
An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable
amount. Impairment losses directly reduce the carrying amount of the assets and are recognised in
profit or loss.
When parts of an item of property, plant and equipment have different useful lives, they are accounted
for as separate items (major components) of property, plant and equipment.
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
Property, plant and equipment (continued)
All property, plant and equipment is measured at cost less accumulated depreciation and accumulated
impairment losses.
23
11
Right of use assets
BuildingsTotal
$$
1,787,046 1,787,046
(2,541)(2,541)
1,784,505 1,784,505
391,731 391,731
553,542 553,542
(3,566)(3,566)
941,707 941,707
1,395,315 1,395,315
Net carrying amount at 31 March 2023842,798 842,798
287,465 287,465
1,722,903 1,722,903
64,143 64,143
(287,465) (287,465)
1,787,046 1,787,046
249,136 249,136
(287,043) (287,043)
429,638 429,638
391,731 391,731
38,329 38,329
Net carrying amount at 31 March 20221,395,315 1,395,315
Lease liabilities20232022
$$
Lease liability (current)551,598 506,999
Lease liability (non-current)321,700 875,045
Total lease liabilities
873,298 1,382,044
Total Right of use assets at Cost
Accumulated amortisation
Opening balance
Disposals
Amortisation expense
Total accumulated amortisation
Summary
Net carrying amount at 31 March 2021
Disposals
Opening balance
Amortisation expense
Effects of movements in exchange rates
Total accumulated amortisation
Summary
Net carrying amount at 31 March 2022
Year ended 31 March 2022
Opening balance
Additions
Make good provision
Effects of movements in exchange rates
Total Right of use assets at Cost
Accumulated amortisation
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
Leases
Year ended 31 March 2023
Opening balance
24
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
11
Leases policy
Recognition and measurement
-
-
-
-
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying
amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use
asset has been reduced to zero.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-
term leases with terms of 12 months or less and leases for low-value assets. Lease payments on these
assets are expensed to the profit or loss as incurred.
Lease payments included in the measurement of the lease liability comprise the following:
fixed payments, including in-substance fixed payments;
variable lease payments that depend on an index or a rate, initially measured using the index or
rate as at the commencement date;
amounts expected to be payable under a residual value guarantee; and
the exercise price under a purchase option that the Group is reasonably certain to exercise,
lease payments in an optional renewal period if the Group is reasonably certain to exercise an
extension option, and penalties for early termination of a lease unless the Group is reasonably
certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured
when there is a change in future lease payments arising from a change in an index or rate, if there is a
change in the Group's estimate of the amount expected to be payable under a residual value guarantee,
or if the Group changes its assessment of whether it will exercise a purchase, extension or termination
option.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be
readily determined, the Group's incremental borrowing rate. Generally, the Group uses its incremental
borrowing rate as the discount rate.
Leases (continued)
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The
right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or before the commencement date, plus any initial direct costs
incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the
underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the
commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the
lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those
of property, plant and equipment. In addition, the right-of-use asset is periodically reduced by impairment
losses, if any, and adjusted for certain remeasurements of the lease liability.
25
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
11
Right of use assetBuildings
No. of right of use assets leased2
Range of remaining terms in months14-32
Average remaining term in months23
No. of leases with options to purchase-
No. of leases with termination options-
Future lease payments were as follows.
20232022
$$
Within 1 year 551,598 506,999
1-2 years 214,322 552,201
2-3 years 107,378 220,746
3-5 years- 102,098
Over 5 years--
Total future lease payments
873,298 1,382,044
Impairment
The Right of use asset is regularly assessed for impairment.
20232022
Amounts recognised in statement of comprehensive income
$$
Interest on lease liabilities
59,094 53,180
Depreciation on right of use assets
553,542 429,638
Amounts recognised in statement of cash flow
Interest on lease liabilities59,094 53,180
Principal lease payments509,771 380,563
Leases (continued)
The table below describes the nature of the Group’s leasing activities by type of right-of-use asset
recognised in the consolidated statement of financial position:
26
12
Software
Customer
relation-
ships GoodwillTotal
$$$$
5,880,557 456,016 2,469,761 8,806,334
2,980,000 - 5,146,000 8,126,000
8,860,557 456,016 7,615,761 16,932,334
1,941,207 102,604 - 2,043,811
1,640,000 45,602 - 1,685,602
3,581,207 148,206 - 3,729,413
3,939,350 353,412 2,469,761 6,762,523
Net carrying amount at 31 March 2023 5,279,350 307,810 7,615,761 13,202,921
3,390,605 456,016 995,691 4,842,312
2,389,951 - 1,474,070 3,864,021
100,001 - -100,001
5,880,557 456,016 2,469,761 8,806,334
892,651 57,002 - 949,653
1,048,556 45,602 - 1,094,158
1,941,207 102,604 - 2,043,811
2,497,954 399,014 995,691 3,892,659
Net carrying amount at 31 March 2022 3,939,350 353,412 2,469,761 6,762,523
Opening balance
Amortisation expense
Total accumulated amortisation
Summary
Net carrying amount at 31 March 2021
Accumulated amortisation
Opening balance
Amortisation expense
Total accumulated amortisation
Summary
Net carrying amount at 31 March 2022
Year ended 31 March 2022
Opening balance
Additions through business acquisition
Additions
Total Intangible assets at Cost
Additions through business acquisition
Total Intangible assets at Cost
Accumulated amortisation
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
Intangible assets
Year ended 31 March 2023
Opening balance
27
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
12
Intangible assets policy
Recognition and policy
Subsequent expenditure
Amortisation
- 1 - 5 years
- 10 years
Impairment
Software
Customer relationships
The Group tests whether goodwill has suffered any impairment on an annual basis. No impairment on
the carrying amount of goodwill has been recognised during the financial year (2022: Nil).
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less
costs to sell. Fair value less cost of disposal (FVLCD) is deemed to be the more appropriate method
given the Group is an early-stage business hence there are difficulties in assessing WACC, forecast
revenue, cash flows and forecast accuracy. Further, as a publicly listed entity, the fair value can be
easily ascertained.
Intangible assets (continued)
Goodwill is measured at cost less accumulated impairment losses.
Other intangible assets that are acquired by the Group and have finite useful lives are measured at cost
less accumulated amortisation and any accumulated impairment losses.
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
goodwill and brands is recognised in profit or loss as incurred.
Amortisation is calculated to write off the cost of intangible assets less their estimated residual value
using the straight-line method over their estimated useful lives, and is recognised in profit or loss.
Goodwill is not amortised.
The estimated useful lives for current and comparative periods are as follows:
28
20232022
$$
13
Current
Trade payables354,716 234,691
Sundry payables38,078 101,044
Accruals653,058 268,872
Employee benefits1,014,395 908,102
2,060,247 1,512,709
Non-current
Accruals64,067 64,143
2,124,314 1,576,852
Trade and other payables policy
Employee benefits policy
14
Current
Balance 1 April- -
Contingent consideration arising on business acquisitions2,347,000 -
Revaluation of Contingent consideration(1,308,000) -
1,039,000 -
Non-current
Balance 1 April- -
Contingent consideration arising on business acquisitions2,307,000 -
Revaluation of Contingent consideration(2,130,000) -
177,000 -
Balance at 31 March
1,216,000 -
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
Trade and other payables
Total trade and other payables
Trade and other payables are measured at amortised cost. These amounts represent liabilities for
goods and services provided to the Group prior to the end of financial year which are unpaid. The
amounts are unsecured and are usually paid within 30 days of recognition.
Short-term employee benefits obligations are measured on an undiscounted basis and are expensed
as the related service is provided. A liability is recognised for the amount expected to be paid for
outstanding annual leave balances if the Group has a present legal or constructive obligation to pay
this amount as a result of past services provided by the employee and the obligation can be estimated
reliably.
Contingent consideration
Refer to Note 19 for additional details of the acquisition relating to this contingent consideration.
Contingent consideration policy
Contingent considerations are recognised when the Group has a present legal or constructive
obligation as a result of a past event, it is probable that an outflow of economic resources will be
required from the Group and amounts can be estimated reliably. Timing or amount of the outflow may
still be uncertain. They are measured at the estimated expenditure required to settle the present
obligation, based on the most reliable evidence available at the reporting date, including the risks and
uncertainties associated with the present obligation. Where there are a number of similar obligations,
the likelihood that an outflow will be required in settlement is determined by considering the class of
obligations as a whole. Contingent considerations are discounted to their present values, where the
time value of money is material.
29
20232022
$$
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
15
Current
ASB term loan495,884 486,248
Callaghan R&D loan33,696 -
529,580 486,248
Non-current
ASB term loan866,921 1,344,881
Callaghan R&D loan397,964 419,592
1,264,885 1,764,473
Total interest bearing loans and borrowings1,794,465 2,250,721
Terms and repayment schedule
CurrencyMaturity date
ASB term loanNZD
28 Feb 2025 - 30
November 2026
1,362,805 1,831,129
Callaghan R&D loan NZD13 August 2030431,660 419,592
1,794,465 2,250,721
Interest bearing loans and liabilities policy
The Company has met all of its covenants during the year and as at balance date.
The ASB loan is secured over the assets of TradeWindow Services Limited together with an unlimited
guarantee and indemnity from Trade Window Limited.
On 13 August 2020, the Company received an R&D loan of $400,000 from Callaghan Innovation as
assistance for the economic impacts of COVID19 on the business. The loan balance at 31 March 2023
was $431,660 which included an interest accrual of 3% (2022: $419,592).
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between proceeds (net of transaction costs)
and the redemption amount is recognised in the statement of comprehensive income over the period of
the borrowing using the effective interest method. Borrowings are classified as current liabilities unless
the Group has an unconditional right to defer settlement of the liability for at least 12 months after the
reporting date.
Interest
rate
9.75%
3%
The face value and carrying value of the loans are the same.
Interest bearing loans and borrowings
30
16 Financial instruments classification and risk management
Financial assets held at amortised cost
-
-
Financial liabilities held at amortised cost
the contractual terms of the financial asset give rise on specified dates to cash flows that
are solely payments of principal and interest on the amounts outstanding.
Financial assets and liabilities are classified into the following categories:
A financial asset is measured at amortised cost if it meets both of the following conditions, and is not
designated as at fair value through profit or loss (FVTPL):
the asset is held within a business model whose objective is to hold assets to collect
contractual cash flows; and
Financial assets at amortised cost are subsequently measured at amortised cost using the effective
interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange
gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is
recognised in profit or loss.
Financial assets held at amortised cost comprise: cash and cash equivalents and trade and other
receivables.
Financial liabilities not designated as at FVTPL on initial recognition are classified as at amortised cost.
Financial liabilities at amortised cost are subsequently measured at amortised cost using the effective
interest method. Interest expense and foreign exchange gains and losses are recognised in profit or
loss. Any gain or loss on derecognition is recognised in profit or loss.
Financial liabilities held at amortised cost comprise: trade and other payables, interest bearing loans and
borrowings, lease liabilities, and related party payables.
All financial assets and liabilities (except for trade receivables that do not contain a significant financing
component) are initially measured at fair value, adjusted for transaction costs (where applicable). Trade
receivables without a significant financing component are initially measured at the transaction price in
accordance with the recognition of revenue.
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
The Group’s overall financial risk management programme focuses primarily on maintaining a financial
risk profile that provides flexibility to implement the Group’s strategies, while optimising return on assets.
Financial risk management is centralised, which supports compliance with the financial risk management
policies and procedures set by the Board.
Financial instruments are recognised in the statement of financial position when the Group becomes
party to a financial contract. They include cash and cash equivalents, trade and other receivables, trade
and other payables, interest bearing loans and borrowings, lease liabilities and related party payables.
31
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
16 Financial instruments classification and risk management (continued)
Impairment - financial assets
Derecognition
Financial Assets
Financial liabilities
The gross carrying amount of a financial asset is written off when the Group has no reasonable
expectations of recovering a financial asset in its entirety or a portion thereof.
The Group makes use of a simplified approach in accounting for trade and other receivables as well as
contract assets and records the loss allowance as lifetime expected credit losses. These are the
expected shortfalls in contractual cash flows, considering the potential for default at any point during the
life of the financial instrument. In calculating, the Group uses its historical experience, external indicators
and forward-looking information to calculate the expected credit losses using a provision matrix.
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial
asset expire, or it transfers the right to receive the contractual cash flows in a transaction in which
substantially all of the risks and rewards of ownership of the financial asset are transferred or in which
the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does
not retain control of the financial asset.
The Group derecognises a financial liability when the contractual obligations are discharged or cancelled,
or expire. The Group also derecognises a financial liability when its terms are modified and the cash
flows of the modified liability are substantially different, in which case a new financial liability based on the
modified terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the
consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in
profit or loss.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present
value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with
the contract and the cash flows that the Group expects to receive).
The Group recognises loss allowances for expected credit losses (ECLs) on financial assets measured
at amortised cost.
32
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
16 Financial instruments classification and risk management (continued)
31 March 2023
Amortised
cost
Other
amortised
costFVTPL
Financial assets$$$
Cash and cash equivalents6,148,125 - -
Trade and other receivables1,153,331 - -
98,432 - -
7,399,888 - -
Financial liabilities
Trade and other payables- 2,124,314 -
Interest bearing loans and borrowings- 1,794,465 -
Lease liabilities- 873,298 -
Contingent consideration- - 1,216,000
- 4,792,077 1,216,000
31 March 2022
Amortised
cost
Other
amortised
cost
FVTPL
Financial assets$$$
Cash and cash equivalents5,932,558 - -
Trade and other receivables1,508,533 - -
Restricted cash98,604 - -
7,539,695 - -
Financial liabilities
Trade and other payables- 1,576,852 -
Interest bearing loans and borrowings- 2,250,721 -
Lease liabilities- 1,382,044 -
- 5,209,617 -
The Group holds the following financial assets and liabilities, the table below shows their carrying amount
and measurement basis.
Restricted cash
33
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
16 Financial instruments classification and risk management (continued)
Fair value
-
-
-
Carrying
ValueFair Value
Carrying
ValueFair Value
Contingent consideration Level 31,216,000 1,216,000 - -
1,216,000 1,216,000 - -
Type
-
Market risk (mainly interest rate risk)
-
Credit risk
-
Liquidity risk
Financial risk management
The Group had exposure to the following risks from its use of financial instruments:
Valuation Technique
Significant
unobservable inputs
Inter-relationship
between significant
unobservable inputs and
fair value measurement
Contingent
consideration
Discounted cash flows:
The valuation model
considers the present
value of expected future
payments in shares and/or
cash, adjusted for risk.
The value of contingent
consideration is discounted
using a risk-free discount
rate to derive the present
value of contingent
consideration.
Expected total revenue for
the target business over
the measurement period.
Future Company share
price, estimated using
mathematical modelling
technique (starting share
price at $0.335 on 31
March 2023).
The estimated fair value
would increase / (decrease)
if:
- the expected total
revenue was higher /
(lower); or
- the quoted Company
equity security price was
higher / (lower).
20232022
Financial assets and financial liabilities measured at fair value in the statement of financial position
are grouped into three levels of a fair value hierarchy. The three levels are defined based on the
observability of significant inputs to the measurement, as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs that are observable for the asset or liability, either directly (as prices) or
indirectly (derived from prices) other than quoted prices included within level 1.
Level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
34
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
16 Financial instruments classification and risk management (continued)
Risk management framework
Market risk
Interest rate risk
Change in
profit/(loss
Change in
equity
Change in
profit/(loss)
Change in
equity
$$$$
Variable interest rates +1%16,926 16,926 17,560 17,560
Variable interest rates -1%(16,735) (16,735) (18,014) (18,014)
Foreign exchange risk
Credit risk
20232022
The Group is not subject to material foreign exchange risk.
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from trade receivables.
In respect of trade receivables, the Group is not exposed to any significant credit risk. There is no history
of customer default and management consider the credit quality of trade receivables to be good. The
Group trades with recognised, creditworthy third parties or requires payment in advance. The profile of
future customers is expected to be similar to that of past customers. On this basis, the Group does not
feel it necessary to have a written credit policy in place, however management continue to monitor this
risk.
Credit risk relating to bank balances is managed by banking with major financial institutions with high
quality external credit ratings.
The Company’s board of directors has overall responsibility for the establishment and oversight of the
Group’s risk management framework. The board of directors has established the Audit and Risk
Committee, which is responsible for developing and monitoring the Group’s risk management policies. A
risk register is maintained, and the Committee reports regularly to the board of directors on its activities.
The Group’s risk management policies are established to identify and analyse the risks faced by the
Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits.
Market risk is the risk that changes in market prices – e.g. foreign exchange rates, interest rates and
equity prices – will affect the Group’s income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return.
The Group's exposure to the risk of changes in interest rates primarily affects borrowings. The Group
had floating interest rates throughout the year.
The following table illustrates the sensitivity of profit/ (loss) and equity to a reasonably possible change in
interest rates of +/- 1% (2022: +/- 1%). These changes are considered to be reasonably possible based
on observation of current market conditions. The calculations are based on a change in the average
market interest rate for each period, and the financial instruments held at each reporting date that are
sensitive to changes in interest rates. All other variables are held constant.
35
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
16 Financial instruments classification and risk management (continued)
Liquidity risk
1 Year or
less 1-5 Years
More than
5 years
Total
contractual
cash flows
Year ended 31 March 2023$$$$
Cash and cash equivalents 6,148,125 - - 6,148,125
Trade and other receivables 1,153,331 - - 1,153,331
Restricted cash- - 98,432 98,432
7,301,456 - 98,432 7,399,888
Year ended 31 March 2022
Cash and cash equivalents 5,932,558 - - 5,932,558
Trade and other receivables 1,508,533 - - 1,508,533
Restricted cash- - 98,604 98,604
7,441,091 - 98,604 7,539,695
1 Year or
less 1-5 Years
More than
5 years
Total
contractual
cash flows
Carrying
amount of
liabilities
Year ended 31 March 2023$$$$$
2,060,247 64,067 - 2,124,314 2,124,314
529,580 1,103,540 161,345 1,794,465 1,794,465
2,513 - - 2,513 2,513
551,598 321,700 - 873,298 873,298
588,476 104,338 - 692,814 692,814
3,732,414 1,593,645 161,345 5,487,404 5,487,404
* the method of settlement of the shortfall payment may be in shares and/or cash (Note 19).
Year ended 31 March 2022
1,512,709 64,143 - 1,576,852 1,576,852
486,248 1,344,881 419,592 2,250,721 2,250,721
7,071 - - 7,071 7,071
506,999 875,045 - 1,382,044 1,382,044
2,513,027 2,284,069 419,592 5,216,688 5,216,688
Lease liabilities
Related party payables
Lease liabilities
Rfider acquisition shortfall
protection*
Trade and other payables
Interest bearing loans and
borrowings
Related party payables
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with
its financial liabilities that are settled by delivering cash or another financial asset.
The Group manages liquidity risk by maintaining adequate cash reserves and banking facilities. Forecast
and actual cash flows are continuously monitored with the maturity profiles of the majority of financial
assets and liabilities matched.
Liquidity profile of financial assets
Financial liabilities based on contractual cashflows due within
Trade and other payables
Interest bearing loans and
borrowings
36
17
Key management personnel
Other related parties
Transactions involving related entities
Kerry FriendExecutive director, beneficial
shareholder
Employment agreement, ESOP
Albertus Johannes Smith Executive director, shareholderEmployment agreement, ESOP
F40 Developments LtdCommon ownership
Supplier of Services
Independent Verification
Services Limited
Common ownershipSupplier of Services
ASB Bank LimitedShareholderFunds advanced, balances
payable, cash at bank, shares
issued
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
Related party
The Group has related party relationships with its directors and other key management personnel as
listed below. Remuneration of key management personnel during the year amounted to $1,452,462
(2022: $1,723,105), of which $1,386,918 (2022: $1,283,028) was for short-term employee benefits and
$65,544 (2022: $440,077) was for share-based payment expense.
Remuneration for the directors during the year amounted to $272,295 (2022: $107,896), of which
$254,533 (2022: $107,896) was for directors fees and $17,762 (2022: $Nil) was for share-based
payment expense.
ASB Bank Limited is a shareholder of the Group. The Group has bank balances with the ASB Bank (see
Note 8.1) as well as some interest bearing loan facilities as stated in Note 15.
The entities, the nature of the relationship and the types of transactions which the Group entered into
during the period are detailed below:
Related entityNature of relationshipTypes of transactions
37
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
17
31 March 2023
Purchases/
Salaries
Balances
payable
Interest
bearing loans Cash at bank
$$$$
- - 1,362,805 5,927,006
28,090 1,909 - -
10,754 604 - -
1,144,617 - - -
1,183,461 2,513 1,362,805 5,927,006
31 March 2022
Purchases/
Salaries
Balances
payable
Interest
bearing loans Cash at bank
$$$$
- - 1,831,129 5,825,531
74,469 7,071 - -
153,833 - - -
1,723,105 - - -
1,951,407 7,071 1,831,129 5,825,531
Key management personnel
Related party (continued)
The following transactions and outstanding balances between related parties occurred during the year:
Related party entity:
ASB Bank Limited
Independent Verification
Services Limited
F40 Developments Limited
Key management personnel
Related party entity:
ASB Bank Limited
Independent Verification
Services Limited
F40 Developments Limited
38
18 Interest in subsidiaries
Set out below is a list of material subsidiaries of the Group:
Country of
incorporation
20232022
Trade Window LimitedNew Zealand New Zealand100%100%
Trade Window Pty LimitedAustraliaAustralia100%100%
Trade Window Pte LimitedSingaporeSingapore100%100%
TradeWindow Services Limited
New Zealand New Zealand100%100%
Trade Window Origin LimitedNew Zealand New Zealand100%100%
Trade Window Nominees Limited New Zealand New Zealand100%100%
Trade Window CNCO Pte Limited SingaporeSingapore0%100%
Trade Window Incorporated PhilippinesPhilippines100%0%
All subsidiaries except for Trade Window Incorporated have a 31 March balance date. Trade Window
Incorporated has a balance date of 31 December.
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
Principal place
of business
In November 2022, the Group wound up the wholly owned subsidiary Trade Window CNCO Pte Limited.
The Group set up a new subsidiary, Trade Window Incorporated, which was incorporated in December
2022. This subsidiary operates in the Philippines and had no transactions as at 31 March 2023.
39
19Business acquisitions
Year ended 31 March 2023
Rfider
Consideration transferred
The details of the business combination are as follows:2023
$
Fair value of consideration transferred
Amount subject to earn-out based on revenue targets (current)2,347,000
Amount subject to earn-out based on revenue targets (non-current)2,307,000
Amount settled via cash2,500,000
Total fair value of consideration transferred7,154,000
Recognised identifiable net assets
Software2,980,000
Deferred tax liability(666,000)
Plant and equipment4,800
Goodwill4,835,200
Total identifiable net assets7,154,000
The Group has included $4.7 million as contingent consideration, which represents its fair value at the
date of acquisition (current $2.4 million, non-current $2.3 million). This has been recognised as a
contingent liability. At 31 March 2023, the contingent consideration had decreased by $3.4 million due to
remeasurement. The fair value of contingent consideration at balance date is $1.2 million (current $1.0
million, non-current $0.2 million) – refer Note 14. The shortfall protection component of this balance is
$0.7 million (current $0.6 million, non-current $0.1 million).
The actual value of the two deferred payment tranches will be determined based on the proportion of
revenue targets achieved for each period, with settlement in TradeWindow Holdings Limited shares.
Further, there is a shortfall protection mechanism which partially compensates the vendors should
TradeWindow Holdings Limited’s share price be less than a specified level at the time of payment of
each of the deferred tranches. Settlement of this component maybe in shares and/or cash.
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
With effect from 1 July 2022, the Group acquired the assets of Auckland based software as a service
company Rfider Limited, for a notional maximum purchase price of NZ$10 million. NZ$2.5 million was
paid in cash on settlement on 29 July 2022. NZ$7.5 million consideration was deferred to be settled in
shares in two tranches of up to NZ$3.75 million each, subject to achievement of revenue targets within
12 and 24 months from settlement, respectively. The Rfider product has since been rebranded as
"TradeWindow Assure+". The acquisition of Rfider provided the Group with a supply chain transparency
solution.
The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable
net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain
purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except
if related to the issue of debt or equity securities. Any contingent consideration is measured at fair value
at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a
financial instrument is classified as equity, then it is not remeasured, and settlement is accounted for
within equity. Otherwise, other contingent consideration is remeasured at fair value at each reporting
date and subsequent changes in the fair value of the contingent consideration are recognised in profit or
loss.
40
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
19Business acquisitions (continued)
Year ended 31 March 2022
Speedi Software Limited (Speedi)
The details of the business combination are as follows:
2022
$
Fair value of consideration transferred
Amount settled in shares (78,794 shares)725,000
Amount settled via cash725,000
Total fair value of consideration transferred
1,450,000
Recognised identifiable net assets
Software1,200,000
Goodwill250,000
Total identifiable net assets
1,450,000
As part of the recognised identifiable net assets, there is a portion of goodwill which has been
recognised. This is composed of intangible benefits such as sales and product synergies.
The strategic rationale for acquiring the business is to integrate into TradeWindow’s suite of solutions
and therefore a separate profit and loss is not maintained and impractical to desegregate.
Rfider contributed $116,463 to the consolidated revenue for the 9 months ended 31 March 2023.
Annualised revenue for the 12 months ended 31 March 2023 is expected to be approximately $155,000.
The business did not have a requirement to prepare NZ IFRS financial statements prior to acquisition.
The strategic rationale for acquiring the business is to integrate into TradeWindow’s suite of solutions
and therefore a separate profit and loss is not maintained and impractical to disaggregate.
As part of the recognised identifiable net assets, there is a portion of goodwill which has been
recognised. This is composed of intangible benefits such as sales and product synergies.
Measurement of fair values - The valuation techniques used for measuring the fair value of material
assets acquired in all business acquisitions during the year were as follows:
Property, Plant and Equipment - as the value of the tangible assets purchased are immaterial, these
have been recognised at the vendor's book value.
Software - where there is no comparable product which TradeWindow could purchase off the shelf to
continue serving its customers, software has been measured based on the estimated development cost
to replicate the acquired software.
These valuations are key accounting estimates.
On 1 October 2021 the Group acquired the assets of Tauranga based border clearance software
company, Speedi Software Limited. The acquisition provided the Group with a cost effective and lower
risk way to acquire customers, capability and extend its ecosystem reach.
The Speedi acquisition contributed $0.3m to the consolidated revenue for the six months ended 31
March 2022. However, the business is not subject to significant seasonality. As such, annualized
revenue for the 12 months ended 31 March 2022 is expected to be approximately $0.6m. The business
did not have a requirement to prepare NZ IFRS financial statements prior to acquisition.
41
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
19Business acquisitions (continued)
Cyberfreight
The details of the business combination are as follows:
2022
$
Fair value of consideration transferred
Amount settled in shares (188,810 shares)1,628,037
Amount settled via cash813,445
Total fair value of consideration transferred
2,441,482
Recognised identifiable net assets
Software1,189,951
Plant and equipment47,921
Prepayments(20,460)
Goodwill1,224,070
Total identifiable net assets
2,441,482
Equity instruments issued - The fair value of the ordinary shares issued was based on the share price
of the company at the date of listing.
Property, Plant and Equipment - as the value of the tangible assets purchased are immaterial, these
have been recognised at the vendor's book value.
Software - where there is no comparable product which TradeWindow could purchase off the shelf to
continue serving its customers, software has been measured based on the estimated development cost
to replicate the acquired software.
These valuations are key accounting estimates.
On 1 April 2021, the Group acquired the assets of Sydney based freight forwarding software company, Hi-
Tech Freight Solutions (Aust.) Pty Limited (“HTFSL”) for AU$2.25 million. The Group also acquired at the
same time the assets of Cyberfreight Solutions Pte. Limited (“CSPL”), a Singaporean company related to
HTFSL for SG$5,000 cash. HTFS and CSPL, were together known as “Cyberfreight”, Cyberfreight has
since been rebranded as "TradeWindow Freight". The acquisition of Cyberfreight provided the Group
with a cost-effective way to amass a high-quality customer base, access to freight management
capabilities, and secure market share in Australia and further afield.
Cyberfreight contributed $1.4 million to the consolidated revenue for the 12 months from 1 April 2021 to
31 March 2022. The business did not have a requirement to prepare NZ IFRS financial statements prior
to acquisition.
The strategic rationale for acquiring the business is to integrate into TradeWindow’s suite of solutions
and therefore a separate profit and loss is not maintained and impractical to desegregate.
As part of the recognised identifiable net assets, there is a portion of goodwill which has been
recognised. This is composed of intangible benefits such as sales and product synergies.
Measurement of fair values - The valuation techniques used for measuring the fair value of material
assets acquired in all business acquisitions during the prior year were as follows:
42
20 Share capital
2023202220232022
Number of
shares
Number of
shares
$$
Shares
86,373,316 5,780,472 31,333,484 6,147,047
26,425,599 1,630,239 14,689,831 15,000,000
- 267,604 - 2,353,037
227,317 79,721 157,261 716,347
- 845,124 - 6,818,964
- 77,428,440 - -
- 100,607 - 92,532
- 241,109 - 205,557
Balance at 31 March113,026,232 86,373,316 46,180,576 31,333,484
Shares issued in respect of employee
share options exercised
2020 Convertible note exchange
Shares issued in respect of 10:1
share exchange on formation of
TWHL (see Note 1)
Staff listing day bonus shares
Shares issued in respect of employee
share options exercised
On 1 April 2021 Trade Window Limited issued 94,405 shares to Douglas Meuross valued at $814,019
and 94,405 shares to Sally Wallace valued at $814,019 as part of the Cyberfreight acquisition, to the total
value of $1,628,037.
On 1 October 2021 Trade Window Limited issued 7,880 shares to Russell and Margaret Beswick valued
at $72,506, 31,517 shares to Andrew Hickton valued at $289,994 and 39,397 shares to RW and MJ
Beswick Trust valued at $362,500 as part of the acquisition of Speedi Software Limited to the total value
of $725,000.
At 31 March 2023, share capital comprised 113,026,232 shares. All issued shares rank equally, are fully
paid and have no par value.
During July 2022 Trade Window Holdings Limited raised $10,000,000 before capital raise expenses, by
way of a private placement (issuing 12,857,142 shares) and a Share Purchase Plan (issuing 1,428,434
shares). A further $5,463,010 before capital raise expenses was raised in Quarter 4 of the 2023 financial
year, resulting in the issuance of 12,140,023 shares. The amount raised in FY 2022 was $15,000,000
before capital raise expenses.
Shares issued in respect of business
acquisitions
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
Balance 1 April
Issue of ordinary shares
43
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
20 Share capital (continued)
Share capital policy
Capital management
21 Convertible notes
20232022
$$
Convertible notes
Balance 1 April-6,818,964
(Converted)/Issued to Independent Parties- (4,410,000)
(Converted)/Issued to Related Parties- (2,408,964)
Converted to Share Capital
Balance at 31 March
- -
Convertible notes
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary
shares are recognised as a deduction from equity, net of any tax effects.
For the purpose of the Group’s capital management, capital includes issued capital, convertible notes
and all other equity reserves attributable to the equity holders of the parent. The primary objective of the
Group’s capital management is to maximise the shareholder value. The Group manages its capital
structure and makes adjustments in light of changes in economic conditions and the requirements of the
financial covenants. There are no externally imposed capital requirements.
There were no convertible notes issued during the year (2022: $Nil).
44
22 Share based payment arrangements
2019/20 Share Option scheme
Number of options
Weighted
average
Year ended 31 March 2023
317,311 0.00100
-
-
-
(4,483)0.00092
(227,317)0.00092
85,511 0.00092
Comprised of:
Vested (and not exercised)62,695
Granted but not vested22,816
85,511
No options were approved to be issued under the existing scheme since prior to listing on 19 November
2021.
The number and weighted average exercise prices of share options under the employee share option
programmes were as follows:
Outstanding at the beginning of the period
Granted during period
Revoked during period
Exercised at end of 31 March 2023
Outstanding at the end of the Period
Under this plan, grantees have been granted options to purchase ordinary shares at an exercise price
based on the fair value of Trade Window Holdings Limited's shares on the date of the grant as approved
by the directors. Once granted, options vest over a period of time which is stated in the options offer
letter to the grantee. The grantee may exercise an option that has vested at any time during the period
commencing on the date on which the option vested and ending on the expiry date. Under the terms of
the scheme unvested options lapse immediately on termination of service. For a good leaver, as defined,
vested options must be exercised within three months following termination of services, and any options
exercised and converted to shares may be retained. For a bad leaver, as defined, vested options are
cancelled on the leaving date.
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
As at 31 March 2023 the Group had the following share-based payments arrangements.
The Group established a share option programme that entitled senior management to purchase shares
in the Company on 31 October 2019, which was revised on 25 March 2020 and 19 November 2021.
Under this programme, holders of vested options are entitled to purchase shares at the exercise price
specified at grant date. All options are to be settled by the physical delivery of shares.
45
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
22
Year ended 31 March 2022
40,511 0.00864
Granted prior to listing98,801 0.00885
Vested prior to listing(79,721)0.00882
Revoked prior to listing(1,022)0.00864
527,121 0.00092
Revoked after listing(27,170)0.00092
Vested after listing(241,209)0.00092
317,311 0.00100
Comprised of:
Vested (and not exercised)154,106
Granted but not vested163,205
317,311
2022 Share Option schemes
Employees LTI Option Plan
Grant Date Number of
instruments
Exercise
Price
Vesting Date Contractual
life of options
July 2022 1,169,670 Nil 1 July 20255 years
July 2022 54,054 Nil 1 July 20255 years
The key terms and conditions of the share options granted under this programme are as follows, all
options are to be settled by the physical delivery of shares:
Vesting conditions
Subject to hurdle rate of
17.5% per annum growth in
the share price, based on
the issue price.
Must be employed by the
company on vesting date
During the period the Group introduced a share option programme to replace the 2019/20 scheme. The
establishment of the 2022 Share Option Plan is designed to provide long-term incentives for senior
managers (including executive directors) to deliver long-term shareholder value, as well as retain and
motivate participants. Under this programme, participants were issued options at the equivalent price of
$0.74. This price was determined with reference to TWL’s closing share price on 29 July 2022. Under
the terms of the scheme, unvested options lapse on the date employment ceases.
Share based payment arrangements (continued)
Outstanding at the beginning of the period
10:1 Conversion on share exchange
Outstanding at the end of the period
46
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
22
Grant Date Number of
instruments
Exercise
Price
Vesting Date Contractual
life of options
Sep 2022 300,000 $0.70 Progressively
over two years
from grant date.
3 years
Number of optionsWeighted
average
exercise price
1,523,724 0.13782
(75,075) -
Vested & exercised at end of 31 March 2023- -
Outstanding at the end of the Period
1,448,649 0.14496
All shares are non-vested as at 31 March 2023.
Expense recognised in profit or loss
Share-based payments policy
The grant-date fair value of equity-settled share-based payment arrangements granted to employees is
generally recognised as an expense, with a corresponding increase in equity, over the vesting period of
the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which
the related service and non-market performance conditions are expected to be met, such that the
amount ultimately recognised is based on the number of awards that meet the related service and non-
market performance conditions at the vesting date. For share-based payment awards with non-vesting
conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions
and there is no true-up for differences between expected and actual outcomes.
Year ended 31 March 2023
Granted during period
Revoked during period
The total expense recognised in the statement of comprehensive income during the year was $257,239
(2022: $725,065).
The number and weighted average exercise prices of share options under the employee share option
programmes were as follows:
Share based payment arrangements (continued)
Non-Executive Directors Option Plan
Also during the period the Group introduced a share option programme for Non-Executive Directors.
Under this programme, holders of vested options are entitled to purchase shares at an exercise price
equal to the VWAP of TradeWindow shares over the 20 Business Day period prior to the date of
issuance of the Options, subject to a floor price of $0.70 per share.
The key terms and conditions of the share options granted under this programme are as follows, all
options are to be settled by the physical delivery of shares:
Vesting conditions
None
47
23
24
25
26
The Group has a contingent liability in 2023 of $1,035,902 relating to R&D tax losses cashed out (2022:
$1,035,902). If the Group becomes profitable in the future, there is a change in the shareholders greater
than 90%, or a liquidation event occurs, it would become payable.
There are no other contingencies.
Subsequent events
On 5 April 2023 the Group announced it had substantially completed employee consultations on
proposed cost reductions to reduce cash usage to a more sustainable level. The Group confirmed the
reduction of roles at the lower end of the 25-35 range provided. The roles are predominantly R&D roles
and do not impact the Group's ability to continue to serve all its current and future customers, meet
market demand and generate revenue from existing solutions.
On 31 March 2023 the Group announced it had entered into a Heads of agreement with nChain for a
$11.1 million strategic investment into TradeWindow – refer
https://www.nzx.com/announcements/409261. As at signing of these financial statements the long form
agreements are being finalised. The final agreement is subject to shareholder approval.
There are no other subsequent events after 31 March 2023 that require disclosure.
Segment reporting
An operating segment is reported in a manner consistent with the internal reporting provided to the chief
operating decision maker ("CODM") on a monthly basis. The CODM, who is responsible for allocating
resources and assessing performance of the operating segment(s) is part of the senior leadership team
and is involved in strategic decision making of the Group. Management has determined there is one
operating segment based on the reports reviewed by the CODM.
The reason for looking at the business as one segment is because of the inter-related nature of the
services and their dependence on the TradeWindow software which cannot be separated between
different products and services. The performance of the operating segment is reviewed by the CODM
and action plans are agreed with the management where necessary to improve performance of the
business.
The reportable operating segment derives its revenues from the provision of software solutions to its
customers. There are no major customers that make up to 10% of revenues. The CODM assesses the
performance of the operating segment from revenue to net income. The total revenue, direct costs,
operating expenses, interest and foreign exchange gains and losses, tax and net income are reviewed.
The amounts reported with respect to segment total assets and liabilities are measured in a manner
consistent with the consolidated statement of financial position. Reportable segment assets and
liabilities are equal to total assets and liabilities hence no reconciliation is required. The majority of the
Group's operations are within New Zealand and there are no other material geographic segments.
Contingencies
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
Capital commitments
There are no capital commitments at year end (2022: Nil).
48
27 Earnings per share
20232022
Profit (loss) attributable to ordinary shareholders
(9,780,088)(10,823,622)
Weighted average number of shares
Basic (ordinary shares)99,239,134 86,373,316
Effect of conversion of convertible notes- -
Diluted (ordinary shares plus convertible notes)99,239,134 86,373,316
Basic EPS ($)(0.10)(0.13)
Diluted EPS ($)(0.10)(0.13)
28Cash flow reconciliation20232022
$$
Net profit (loss) after tax
(9,792,829)(10,823,758)
Classification Differences
- Net finance expense105,923 169,673
- Loss on disposal(10,643)28,296
- Make good provision-(64,143)
Statement of financial position movements
- Trade and other receivables (excluding related party)113,603 (1,387,913)
- Contract assets(14,649)(25,880)
- Trade and other payables522,234 795,343
- Contract liabilities93,730 413,774
- Income tax payable(45,008)(7,905)
- Other movements(59,404)(77,749)
Other non-cash items
- Depreciation, amortisation and impairment2,411,844 1,666,826
- Employee share scheme257,239 817,623
- Revaluation of contingent consideration(3,438,000)-
- Tax asset recognised(976,800)-
Net cash from operating activities
(10,832,760)(8,495,813)
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
Basic earnings/(deficit) per share is calculated by dividing the net profit/(loss) for the year attributable
to the parent by the weighted average number of ordinary shares outstanding during the year. The
weighted average number of ordinary shares outstanding during the year is the number of ordinary
shares outstanding at the beginning of the year adjusted by the number of ordinary shares bought
back or issued during the year multiplied by a time-weighting factor. Diluted earnings per share
additionally considers the weighted average number of ordinary shares that would be issued on
conversion of all the dilutive potential ordinary shares into ordinary shares.
The reconciliation of the weighted average number of shares for the purpose of diluted earnings per
share to the weighted average number of ordinary shares used in the calculation of basic earnings per
share is below.
The earnings per share for the year ended 31 March was as follows:
49
29Reconciliation of liabilities arising from financing activities
Lease
liabilities
Long-term Short-termTotal
$$$$
1 April 2022
1,382,044 1,764,473 486,248 3,632,765
Cashflows:
- Repayment(509,771) - (468,256) (978,027)
- Interest(59,094) - (140,970) (200,064)
Non-cash:
- Reclassification- (511,588) 511,588 -
- Effects of movements in exchange rates
1,025 - -
1,025
- Interest59,094 12,000 140,970 212,064
Balance at 31 March 2023873,298 1,264,885 529,580 2,667,763
Year ended 31 March 2022
Opening balance39,704 1,220,147 489,864 1,749,715
Cashflows:
- Repayment(380,563) - (616,288) (996,851)
- Proceeds- 1,145,000- 1,145,000
- Interest(53,180) - (89,660) (142,840)
Non-cash:
- Reclassification- (612,672) 612,672 -
- Remeasurement1,722,903 - - 1,722,903
- Interest53,180 11,998 89,660 154,838
Balance at 31 March 20221,382,044 1,764,473 486,248 3,632,765
Trade Window Holdings Limited
Notes to the consolidated financial statements
For the year ended 31 March 2023
The changes in liabilities arising from financing activities can be classified as follows:
50
Interest register
Albertus J Smith
Trade Window Origin LimitedDirector
TradeWindow Services LimitedDirector
Trade Window LimitedDirector
Trade Window Pty LimitedDirector
Trade Window Pte LimitedDirector
Trade Window CNCO Pte Limited (ceased November 2022)Director
Trade Window Incorporated Director
Kerry M Friend
Tomadachi No.2 TrustTrustee and Shareholder in TWHL
Trade Window Nominees LimitedDirector
Trade Window LimitedDirector
TradeWindow Services LimitedDirector
Northpower LimitedDirector
Northpower Fibre LimitedDirector
Alasdair J MacLeod
Trade Window LimitedDirector
Silverstripe LimitedChair
Napier Port Holdings Limited and subsidiary Napier Port Limited (ceased December 2022)Chair
Hold Fast Investments LimitedChair
Silverstripe Trustees LimitedDirector
Big Brothers Big Sisters Hawke's Bay Chair
IHC- Board Appointments Committee Independent Director
Hawkes Bay Regional Economic Development Agency Chair
Diana M Puketapu
Trade Window LimitedDirector
Napier Port Holdings Limited and subsidiary Napier Port LimitedDirector
Ngati Porou Holding Company Limited (and subsidiaries) Director
Tamaki Regeneration Company Limited (and subsidiaries) Director
Manawanui Support LimitedDirector
DNA Designed LimitedDirector
New Zealand Cricket Director
New Zealand Olympic Committee Chair
Trade Window Holdings Limited
General disclosures
For the year ended 31 March 2023
In accordance with Section 140(2) of the Companies Act, the directors named below have made a
general disclosure of interest by a general notice disclosed to the Board and entered in the Company's
interests register. General notices given by directors which remain current as at 31 March 2023 are as
follows:
51
Trade Window Holdings Limited
General disclosures
For the year ended 31 March 2023
Interest register (continued)
Philip J Norman
Straker Translations Limited (ASX listed) Shareholder/Options Holder
Task Group Holdings Limited (NZX & ASX listed) Director/Shareholder
Task Retail Pty LimitedDirector
Just Life Group Limited (NZX listed) Director
Trade Window Limited Director
Plexure Limited Director
VMob IP Limited Director
VMob Singapore Pte Limited Director
Xero Limited (ASX listed) Shareholder
Loyalty New Zealand Limited Director
Nortek Management Services Limited Director/Shareholder
TruScreen Limited (NZX listed) Shareholder
MyWave Holdings Limited Shareholder
Touchpoint Group Limited Director/Shareholder/Options Holder
Bright Spark Innovations GP Limited Options Holder
Atrax Group New Zealand Limited Advisory Board Member
Francis (Peter) J Webb
Ngatoto Trust Limited Trustee
Masambri Holdings Limited Director
IVS Group Holdings Limited Director
Independent Verification Services Limited Director/CEO
IVS Training Limited Director/CEO
IVS Labs Limited Director/CEO
Project 42 Limited Director
Ontracknz 2020 Limited Director
Trade Window Origin Limited Director
Tradewindow Limited Shareholder
Willomane Limited Director
52
Trade Window Holdings Limited
General disclosures
For the year ended 31 March 2023
Directors remuneration
Director and
consulting fees
Salary
ESOP
$$$
Albertus J Smith- 343,000 20,161
Kerry M Friend- 202,656 8,011
Alasdair J MacLeod105,533 - 5,921
Diana M Puketapu74,833 - 5,921
Philip J Norman74,167 - 5,921
Employee remuneration
100,001 - 110,000
110,001 - 120,000
120,001 - 130,000
130,001 - 140,000
140,001 - 150,000
150,001 - 160,000
160,001 - 170,000
170,001 - 180,000
180,001 - 190,000
200,001 - 210,000
210,001 - 220,000
220,001 - 230,000
230,001 - 240,000
290,001 - 300,000
340,001 - 350,000
350,001 - 360,000
Donations
1
1
1
During the year ended 31 March 2023, the Group made donations of $Nil (2022: $Nil).
1
1
3
1
2
1
4
80,088
No directors fees were paid to directors of subsidiary entities.
Trade Window Holdings Limited and our subsidiaries have employees in New Zealand, Australia and
Singapore. Our pay levels reflect the different market rates in each country and region. The overseas
remuneration amounts are converted into New Zealand dollars. Noted in the table below are employees
who received remuneration and other benefits that exceed NZ $100,000:
Remuneration including share-based
remuneration ($)
Number of employees
(Total: 46)
8
8
6
3
1
4
80,754
As required by Section 211 of the Companies Act 1993 we disclose the following information:
The persons who held office as directors of Trade Window Holdings Limited at any time during the year
ended 31 March 2023 and their remuneration, are as follows:
Total
$
363,161
210,667
111,454
53
© 2023 KPMG, a New Zealand Partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private
English company limited by guarantee. All rights reserved.
Independent Auditor’s Report
To the shareholders of Trade Window Holdings Limited
Report on the audit of the consolidated financial statements
Opinion
In our opinion, the consolidated financial statements
of Trade Window Holdings Limited (the ’ company’)
and its subsidiaries (the 'group') on pages 3 to 50
present fairly, in all material respects:
i.the Group’s financial position as at 31 March
2023 and its financial performance and cash
flows for the year ended on that date;
ii.in accordance with New Zealand Equivalents to
International Financial Reporting Standards and
International Financial Reporting Standards
issued by the New Zealand Accounting
Standards Board.
We have audited the accompanying consolidated
financial statements which comprise:
— the consolidated statement of financial position
as at 31 March 2023;
— the consolidated statements of comprehensive
income, changes in equity and cash flows for
the year then ended; and
— notes, including a summary of significant
accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (‘ISAs (NZ)’). We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of the group in accordance with Professional and Ethical Standard 1 International Code of
Ethics for Assurance Practitioners (Including International Independence Standards) (New Zealand) issued by
the New Zealand Auditing and Assurance Standards Board and the International Ethics Standards Board for
Accountants’ International Code of Ethics for Professional Accountants (including International Independence
Standards) (‘IESBA Code’), and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the IESBA Code.
Our responsibilities under ISAs (NZ) are further described in the Auditor’s responsibilities for the audit of the
consolidated financial statements section of our report.
Other than in our capacity as auditor we have no relationship with, or interests in, the group.
Material uncertainty related to going concern
We draw attention to Note 1 in the consolidated financial statements, which indicates for the year ended 31
March 2023 the Group reported a loss of $9.8 million, had negative operating cashflows of $10.8 mil and is
projected to continue to incur expenditure more than revenue for a period of at least 12 months from the date of
issuing these financial statements. Should the Group not, achieve its financial forecasts, raise sufficient debt
and/or equity financing to fund projected cashflow deficits and continue to have support of its bankers and
shareholders, the Group may not be able to continue as a going concern and realise the value in its assets and
discharge its liabilities in the normal course of business and may therefore do so at different values from those
recorded in the Group’s financial statements. As stated in Note 1, these events or conditions indicate that a
material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
54
55
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the consolidated financial statements in the current period. Except for the matter described in the material
uncertainty related to going concern, we summarise below those matters and our key audit procedures to
address those matters in order that the shareholders as a body may better understand the process by which we
arrived at our audit opinion. Our procedures were undertaken in the context of and solely for the purpose of our
statutory audit opinion on the consolidated financial statements as a whole and we do not express discrete
opinions on separate elements of the consolidated financial statements.
The key audit matter How the matter was addressed in our audit
Revenue recognition
Refer to Note 3.1 to the Consolidated Financial
Statements.
The Group has several revenue streams, and
the revenue recognition policy for each stream
is different. We focused on this area because
the recognition of revenue in accordance with
NZ IFRS 15 involves judgement and the
outcome has a significant impact on profit or
loss and the financial position of the Group.
Also, there is a risk of overstatement of
revenues through premature revenue
recognition or recording fictitious revenues to
meet budgets and/or market guidance.
Our audit procedures included, among others: -
— Assessing whether the Group’s revenue recognition
policy is in compliance with NZ IFRS 15;
— Reviewing any changes or new contractual terms and
conditions entered into with new customers or new
material revenue streams during the period to identify
any poten
tial impact on performance obligations required
to satisfy the contract;
— Selecting a sample of invoices issued during the year
and agreeing to supporting documents to ensure that
revenue is appropriately recognised;
— Selecting a sample of invoices and credit notes issued
immediately after year-end to ensure revenue is
recognised in the correct period;
— Selecting a sample of deferred revenue balances and
agreeing these to supporting documents; and
— Performing high risk journal entry testing with the criteria
specifically targeting unusual entries to revenue
accounts.
We did not identify any matters that indicated that revenue is
materially misstated.
Business acquisitions
Refer to Note 19 to the Consolidated Financial
Statements.
On 29 July 2022, the Group acquired the
business and assets of Rfider Limited for a
notional purchase price of $10 million which is
subject in part to various future performance
obligations being met.
As a result of the acquisition, the Group
recognised definite life intangible assets of $2.9
million, Deferred Tax Liability of $0.7 million and
Goodwill of $4.8 million. Contingent
Our audit procedures included, among others: -
— Assessing whether the business acquisition has been
appropriately accounted for in accordance with
applicable financial reporting standards and reflects the
terms and conditions of the sale and purchase
agreement.
— Involving our internal valuation specialists to support us
in challenging the valuations produced by the Group and
the methodologies used to identify the fair value of
assets and liabilities acquired and fair value of
consideration paid. In particular, assessing the
56
The key audit matter How the matter was addressed in our audit
consideration of $4.7 million was recognised on
acquisition.
The accounting for these transactions is
complex due to the significant judgements and
estimates that are required to determine the
values of the consideration transferred and the
identification and measurement of the fair value
of the assets acquired and liabilities assumed.
Due to the size and complexity of the
acquisition, we considered this to be a key audit
matter.
methodologies and key assumptions used to determine
the fair value of the software (intangible assets) and
contingent consideration, which included challenging
management’s assumptions on the estimated cost to
develop the software, and assumptions associated with
forecast objectives being met as stipulated in the sale
and purchase agreement.
— Evaluating the adequacy of the financial statement
disclosures, including disclosures of key assumptions,
judgements, and sensitivities.
We did not identify any factors that were materially
inconsistent with management’s overall conclusion.
Other information
The Directors, on behalf of the group, are responsible for the other information included in the entity’s Annual
Report. Our opinion on the consolidated financial statements does not cover any other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the consolidated
financial statements, or our knowledge obtained in the audit or otherwise appears materially misstated. If, based
on the work we have performed, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
Use of this independent auditor’s r eport
This independent auditor’s report is made solely to the shareholders as a body. Our audit work has been
undertaken so that we might state to the shareholders those matters we are required to state to them in the
independent auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the shareholders as a body for our audit work, this independent
auditor’s report, or any of the opinions we have formed.
Responsibilities of the Directors for the consolidated
financial statements
The Directors, on behalf of the company, are responsible for:
— the preparation and fair presentation of the consolidated financial statements in accordance with generally
accepted accounting practice in New Zealand (being New Zealand Equivalents to International Financial
Reporting Standards) and International Financial Reporting Standards issued by the New Zealand
Accounting Standards Board;
— implementing necessary internal control to enable the preparation of a consolidated set of financial
statements that is free from material misstatement, whether due to fraud or error; and
57
— assessing the ability to continue as a going concern. This includes disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless they either intend to liquidate or to
cease operations or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated
financial statements
Our objective is:
— to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error; and
— to issue an independent auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with ISAs NZ will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
A further description of our responsibilities for the audit of these consolidated financial statements is located at
the External Reporting Board (XRB) website at:
http://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-1/
This description forms part of our independent auditor’s report.
The engagement partner on the audit resulting in this independent auditor's report is Aaron Woolsey.
For and on behalf of
KPMG
Auckland
30 May 2023
---
Trade Window Limited
Level 4, Partners Life Building, 33 – 45 Hurstmere Road, Takapuna, Auckland 0622
info@tradewindow.io
www.tradewindow.io
Results announcement
30 May 2023
Results for announcement to the market
Name of issuer Trade Window Holdings Limited (“TWL”)
Reporting Period 12 months to 31 March 2023
Previous Reporting Period 12 months to 31 March 2022
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$4,920 Up 27%
Total Revenue $5,736 Up 18%
Net profit/(loss) from
continuing operations
($9,793) Decrease of 10%
Total net profit/(loss) ($9,793) Decrease of 10%
Interim/Final Dividend
Amount per Quoted Equity
Security
Trade Window is currently investing for future growth and during
this phase does not propose to pay dividends.
Not applicable Not applicable
Record Date Not applicable
Dividend Payment Date Not applicable
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.02 $0.05
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Authority for this announcement
Name of person
authorised
to make this announcement
Deidre Campbell
Contact person for this
announcement
Deidre Campbell, CFO
Contact phone number 021 272 4008
Contact email address deidre@tradewindow.io
Date of release through MAP
30 May 2023
Audited financial statements accompany this announcement.
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.