Access Innovation Holdings Limited
ABN 12 122 058 708
Annual Report - 30 June 2020
Access Innovation Holdings Limited
Contents
30 June 2020
Directors' report
Auditor's independence declaration
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors' declaration
Independent auditor's report to the members of Access Innovation Holdings Limited
Shareholder information
Corporate directory
2
8
9
10
11
12
13
57
58
62
65
1
Access Innovation Holdings Limited
Directors' report
30 June 2020
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the 'Group') consisting of Access Innovation Holdings Limited (referred to hereafter as the 'Company' or 'parent entity') and
the entities it controlled at the end of, or during, the year ended 30 June 2020.
Directors
The following persons were directors of Access Innovation Holdings Limited during the whole of the financial year and up
to the date of this report, unless otherwise stated:
Deanne Weir - Non-Executive Director and Chair
Anthony Abrahams - Executive Director and Chief Executive Officer
John Martin - Non-Executive Director
Alison Loat - Non-Executive Director
Jonathan Pearce (appointed on 21 January 2020) - Non-Executive Director
Principal activities
Ai-Media is a global access provider, utilizing its technology platform to make content available for all live and recorded
captioning, transcription, subtitles, translation and speech analytics services.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
The loss for the Group after providing for income tax amounted to $12,741,152 (30 June 2019: $3,882,599).
Operations
A summary of the results for the year is as follows:
2020
$
2019
$
Change
Change
$
%
Revenue from operating activities
EBITDA
Loss after tax benefit from ordinary activities
25,423,090 18,339,127
(2,506,516)
(3,882,599)
(10,048,332)
(12,741,152)
7,083,963
(7,541,816)
(8,858,553)
38.6%
300.9%
228.2%
FY20 has been a strong year of revenue growth and operational cost efficiency savings across all regions.
Effective 1 May 2020, the Company acquired the Chicago-based Alternative Communication Services, LLC ('ACS') and
PostCAP LLC ('POST') (collectively known as ACS Group). ACS is a leading US provider of speech-to-text captioning and
sign language services in North America. The acquisition provides the Company with scale and scope to enable greater
participation in the growing North American language services market and increase the size and diversity of the Company's
customer base. The FY20 results include two months of ACS Group’s results (May and June).
Full year service revenue for FY20 grew $7,083,963 or 38.6% compared to $18,339,127 in FY19 with growth accelerating
throughout the year on a trend set to continue through FY21. The key driver for the increase in operating expenses was the
Group’s strategy to continue to establish and resource new international operations and invest in product development and
infrastructure costs to support the expanding business.
Excluding the impact of the ACS acquisition, FY20 service revenue grew at 25% primarily driven by the following:
●
Australia and New Zealand ('ANZ') – a strong increase in enterprise business as a number of new university and
corporate customers have been won and annualisation of revenue from a broadcast customer that only provided
revenue for part of the year in FY19;
Ai-Media (ex ACS Group) North America – strong growth in enterprise business and work for 3 new broadcast
customers; and
Rest of World – first year of operations in Asia, which has included generating revenue from a number of significant
new customers together with strong growth in Europe, Middle-East and Africa ('EMEA') from enterprise live and
recorded sales to corporate, government and education customers and the on boarding of a new broadcast customer.
●
●
2
Access Innovation Holdings Limited
Directors' report
30 June 2020
Reconciliation of loss after income tax benefit to EBITDA as follows:
Loss after income tax benefit
Add: Finance costs
Less: Income tax benefit
Less: Interest income
EBIT
Add: Depreciation and amortisation expense
EBITDA
Reconciliation of results with the Prospectus
Consolidated
2020
$
2019
$
(12,741,152)
3,847,136
(3,412,886)
(57,837)
(3,882,599)
402,010
(657,087)
(119,263)
(12,364,739)
2,316,407
(4,256,939)
1,750,423
(10,048,332)
(2,506,516)
On 10 August 2020, the Company issued a prospectus ('Prospectus') for its Initial Public Offering ('IPO') seeking to raise
$65,480,526 through the issuance of 24,548,779 new shares at $1.23 per share and the transfer of 28,687,420 shares at
$1.23 per share to the new shareholders. The Company's shares commenced trading on ASX on 15 September 2020. The
Prospectus contained a financial forecast for the period ended 30 June 2020 and for the period ending 30 June 2021.
Reported Services revenue was $0.8 million higher than the Prospectus statutory forecast for FY20, due to higher revenue
than forecast from North America and ROW. This led to marginally higher EBITDA, whilst net loss after tax was in line with
the Prospectus forecast.
Services revenue
Other revenue
Total revenue
EBITDA
Depreciation and amortisation
EBIT
Net interest expense
Loss before tax
Income tax benefit
Loss after tax benefit
2020
Prospectus
$million
Actual
$million
24.6
0.9
25.6
(10.3)
(2.3)
(12.5)
(3.6)
(16.1)
3.3
25.4
0.9
26.3
(10.0)
(2.3)
(12.3)
(3.8)
(16.1)
3.4
(12.8)
(12.7)
The statutory EBITDA for the Company was a loss of $10.0 million. This was impacted by one-off costs associated with
the IPO (which was completed on 15 September 2020), acquisition costs and restructuring costs, as set out below :
Statutory EBITDA
IPO costs
Acquisition costs
Restructuring costs
Normalised EBITDA
$million
(10.0)
0.4
0.8
0.2
(8.6)
3
Access Innovation Holdings Limited
Directors' report
30 June 2020
Liquidity
The consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2020 reflects a
net loss after income tax of $12,741,152 (2019: $3,882,599) and the consolidated statement of cash flows reflects net cash
outflows from operating activities of $5,774,105 (2019: $1,959,636). As at 30 June 2020, the consolidated statement of
financial position reflects a net asset deficit position of $8,796,601 (2019: net assets of $2,705,583) and a net current
liability position of $23,342,126 (2019: net current asset of $373,013).
The directors have assessed that based on the successful IPO capital raised it is appropriate to prepare the financial report
on the going concern basis. For further information, refer to note 2.
Significant changes in the state of affairs
On 29 August 2019, Ai-Media SG Pte. Limited, a new subsidiary was incorporated in Singapore and started operations
during the year.
The Company raised $10,330,000 in cash proceeds from entering into various convertible note subscription agreements
('debt notes') between 13 December 2019 and 25 June 2020. The terms of repayment of the debt notes issued is either full
repayment of principal and interest, accrued daily at a coupon rate of 8% per annum, on the 30 June 2021, or earlier if
there is a liquidity event. In the event there is a liquidity event earlier than 30 June 2021, the value of the debt note at the
liquidity event date is converted into ordinary shares with a discount price range. As the number of shares on conversion is
variable, the entire financial instrument will be classified as financial liabilities.
On 1 May 2020, the Group acquired 100% of the share capital of ACS Group. The acquisition was funded by a
combination of cash, equity and deferred consideration, with $769,899 being paid as at 30 June 2020. The cash
component was met with existing funds raised with the convertible notes issued. The acquisition of this highly regarded US
captioning services company will complement the Group's breakout organic sales growth in the North American market,
delivering long term customers, local knowledge and an expanded workforce.
There were no other significant changes in the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
On 15 September 2020 the Company successfully completed its Initial Public Offering (“IPO”) on the Australian Securities
Exchange raising a total of $65,480,526 from the additional issuance of 24,548,779 shares at an issue price of $1.23 per
share ($30,194,999) and transfer of 28,687,420 shares at an issue price of $1.23 per share ($35,285,527) to new
shareholders. The capital proceeds from the additional issuance of shares will be used to pursue the Group’s strategic
global growth objectives, repay all shareholder loans and fund IPO related costs.
On 15 September 2020, all the convertible notes were converted into ordinary shares.
Due to the impact of COVID-19, since 30 June 2020, Ai Media has seen increases in content requiring captioning. While
some live events and some recorded media categories remain impacted, an accelerated shift towards virtual events and
education resulting in increased demand for captioning from educational, government and non government organisations
and corporate customers.
No other matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly affect
the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Likely developments and expected results of operations
The Group’s growth strategy is focused on continuing its current growth trajectory, particularly in its offshore regions and to
ongoing development of its technology to provide a wider range of services for its customers. The key pillars of the Group’s
growth strategy are:
●
●
●
●
●
growth markets;
platform automation and scalability;
product innovation;
organic growth; and
acquisition opportunities.
Business risks
Please refer to the Prospectus for a description of the Company’s business risks.
4
Access Innovation Holdings Limited
Directors' report
30 June 2020
Environmental regulation
The Group is not subject to any significant environmental regulation under a law of Commonwealth or State law within all
the geographical locations the Group operate in.
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Name:
Title:
Qualifications:
Experience and expertise:
Name:
Title:
Qualifications:
Experience and expertise:
Name:
Title:
Qualifications:
Experience and expertise:
Deanne Weir
Non-Executive Director and Chair
BA(Hons) LLB(Hons) LLM
Deanne has served as a director of Ai-Media since 2010, and became Chair in
August 2013. An entrepreneur, company director and philanthropist, Deanne
previously spent 10 years at ASX listed company Austar United Communications as a
senior executive, including as General Counsel and Company Secretary. Deanne is
also Chair of Seer Data and Analytics, an Australian technology start-up. Deanne is
passionate about community engagement and the power of story-telling to help
influence social change. Deanne was a long-term Board member and Deputy Chair at
Screen Australia and in 2017 was appointed Chair of the Sydney Film Festival.
Deanne is a Graduate of the Australian Institute of Company Directors.
Anthony Abrahams
Co-Founder, Director and Chief Executive Officer
BCom (Hons). LLB (UNSW), MPhil. MBA (Oxford)
Tony co-founded Ai-Media in 2003. Tony served as a Director of Northcott Disability
Services from 2010 to 2018, and was recognised by the World Economic Forum as a
Young Global Leader in 2013. In previous roles, Tony worked to establish the Oxford
Internet Institute in 2001, while attending the University of Oxford as a Rhodes
Scholar. Tony has been a member of the Australian Institute of Company Directors
since 2006.
John Martin
Independent, Non-Executive Director
BA LLB (Hons)
John joined the board in 2010 and served as the company’s first Chairman until 2013.
He is an experienced company director and business executive having served as
CEO and director of ASX-listed Babcock & Brown Communities, Primelife and
Regeneus. John is a former corporate and executive partner of the law firm Allens
where he specialised in M&A, fundraising and corporate advisory. He is a Non-
Executive Director of ASX-listed investment company, Concentrated Leaders Fund;
national law firm, Sparke Helmore; biotech company, Biopoint; and wireless
technology company, Lokket. John is a member of the Australian Institute of
Company Directors.
Alison Loat
Independent, Non-Executive Director
BAH, Queen’s University, Kingston Canada; MPP, Harvard Kennedy School
Alison joined the Board in 2018 is the Chair of Ai-Media’s Canadian entity. Alison is
the Managing Director, Sustainable Investing and Innovation at OPTrust, a Canadian
public pension plan, where she is responsible for environmental, social and
governancerelated aspects of $22 billion in globally diversified investments and for
developing a new investment portfolio that deploys capital at the intersection of
sustainability and innovation. She is also a Director of The Logic, a Canadian media
company.
Alison is currently a World Economic Forum Young Global Leader, where she serves
on the program’s Advisory Board, an Advisory Board member at the Max Bell School
of Public Policy at McGill University and a governor of Ridley College. She received
both the Queen’s Gold and Diamond Jubilee Medals for her service to Canada and
was named one of the WXN 100 Most Powerful Women in Canada. She holds a BA
(Honours) from Queen’s University and a Master of Public Policy (MPP) from the
Harvard Kennedy School.
5
Access Innovation Holdings Limited
Directors' report
30 June 2020
Name:
Title:
Qualifications:
Experience and expertise:
Company secretary
Name:
Title:
Experience and expertise:
Jonathan Pearce (appointed on 21 January 2020)
Non-Executive Director
B Fin.; Graduate Diploma of App. Fin
Jonathan has significant experience in the finance industry where he has held senior
roles in a number of boutique investment and advisory houses. He is a portfolio
manager of the CVC Emerging Companies Fund and focuses primarily on corporate
finance and advisory for small mid-cap companies listed on the ASX.
Suzanne Sanossian
Company Secretary
Sue joined Ai-Media in 2011 and is responsible for assisting the Board and company
in meeting its fiduciary, compliance and corporate governance obligations. Sue heads
up the People and Culture team and previously was part of the corporate
development and legal affairs team at Austar United Communications Limited (an
ASX listed company), and has prior experience in administrative roles with two ASX
listed companies – Lake Technology Limited and Excel Coal Limited. Sue is a pivotal
point of contact for the Board, investors, senior executives, staff and industry peers.
She is a Member of the Australian Institute of Company Directors and is currently
studying with the Governance Institute of Australia (Certificate in Governance). In
January 2020 Sue was appointed Board member of the Global Alliance of Speech to
Text Captioning, a US-based non-profit corporation which is dedicated to universal
accessibility to the spoken word via all forms of captioning.
Meetings of directors
The number of meetings of the Company's Board of Directors ('the Board') held during the year ended 30 June 2020, and
the number of meetings attended by each director were:
Deanne Weir
Anthony Abrahams
John Martin
Alison Loat
Jonathan Pearce
Full Board
Attended
Held
12
12
12
12
7
12
12
12
12
7
Held: represents the number of meetings held during the time the director held office.
Additional disclosures
The following table sets out each director’s relevant interest in shares, debentures, and rights or options in shares or
debentures of the Group and other key management personnel option holdings as at the date of this report.
Directors’ shareholdings
The following table sets out each director’s relevant interest in shares of the company or a related body corporate as at the
date of this report:
Directors
Deanne Weir
Anthony Abrahams
John Martin
Alison Loat
Jonathan Pearce
6
Ordinary
shares
Number
16,072,336
27,639,898
1,088,646
250,000
4,797,719
49,848,599
Access Innovation Holdings Limited
Directors' report
30 June 2020
Remuneration report
Remuneration Report disclosure is not required as the Company was not a listed entity as at 30 June 2020.
Shares under option
There were no unissued ordinary shares of Access Innovation Holdings Limited under option outstanding at the date of this
report.
Shares issued on the exercise of options
During or since the end of the financial year, the Company issued 8,577,250 ordinary shares as a result of the exercise of
options after satisfaction of the vesting conditions i.e. a Liquidity Event (the IPO).
Indemnity and insurance of officers
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a
director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and executives of
the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the
Company or any related entity.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this directors' report.
Auditor
Deloitte Touche Tohmatsu continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act
2001.
On behalf of the directors
___________________________
Anthony Abrahams
Director and Chief Executive Officer
30 September 2020
7
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Grosvenor Place
225 George Street
Sydney, NSW, 2000
Australia
Phone: +61 2 9322 7000
www.deloitte.com.au
30 September 2020
The Board of Directors
Access Innovation Holdings Limited
Level 1, 103 Miller Street
North Sydney NSW 2060
Australia
Dear Board Members
Access Innovation Holdings Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of Access Innovation Holdings Limited.
As lead audit partner for the audit of the financial report of Access Innovation Holdings Limited for the
year ended 30 June 2020, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
(ii) any applicable code of professional conduct in relation to the audit.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
Joshua Tanchel
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
8
Access Innovation Holdings Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2020
Revenue
Other income
Interest revenue calculated using the effective interest method
Expenses
Cost of sales
Employee benefits expense
Depreciation and amortisation expense
Impairment of receivables
Professional and consulting costs
Business development costs
Networking and information technology costs
Other employment costs
Office expenses
Other expenses
Finance costs
Loss before income tax benefit
Income tax benefit
Consolidated
Note
2020
$
2019
Restated*
$
6
7
8
11
8
9
25,423,090 18,339,127
925,991
57,837
103,928
119,263
(14,569,774)
(12,896,794)
(2,316,407)
(141,688)
(3,163,874)
(2,064,983)
(1,219,371)
(641,962)
(376,851)
(1,322,116)
(3,847,136)
(9,417,108)
(6,532,263)
(1,750,423)
(1,055)
(995,815)
(1,272,882)
(1,006,116)
(466,595)
(314,866)
(942,871)
(402,010)
(16,154,038)
(4,539,686)
3,412,886
657,087
Loss after income tax benefit for the year attributable to the owners of Access
Innovation Holdings Limited
(12,741,152)
(3,882,599)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to the owners of Access
Innovation Holdings Limited
(37,463)
4,110
(37,463)
4,110
(12,778,615)
(3,878,489)
Cents
Cents
Basic loss per share
Diluted loss per share
38
38
(13.24)
(13.24)
(4.04)
(4.04)
*
The Group has applied AASB 16 using the full retrospective approach from 1 July 2019. The comparative amounts
presented as at 30 June 2019 were restated for the impact of AASB 16, refer to note 4 for detailed information.
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
9
Access Innovation Holdings Limited
Consolidated statement of financial position
As at 30 June 2020
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Investments
Income tax
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangibles
Deferred tax assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Lease liabilities
Derivative financial instruments
Income tax
Employee benefits
Provisions
Total current liabilities
Non-current liabilities
Trade and other payables
Borrowings
Lease liabilities
Employee benefits
Provisions
Income tax
Total non-current liabilities
Total liabilities
Net (liabilities)/assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
2020
$
Consolidated
2019
Restated*
$
1 Jul 2018
Restated*
$
10
11
12
13
9
2,994,171
6,145,996
374,578
272,076
-
9,786,821
1,436,682
3,646,605
201,797
272,076
495,609
6,052,769
5,595,451
2,787,331
-
-
1,289
8,384,071
14
15
16
9
1,091,321
1,122,974
11,244,053
3,333,960
16,792,308
929,669
1,272,235
3,068,078
278,156
5,548,138
1,037,155
1,550,632
1,986,761
512,606
5,087,154
26,579,129 11,600,907 13,471,225
17
18
19
21
20
9
22
23
24
25
26
7,613,706
167,812
13,248,427
660,762
3,017,593
-
1,100,782
7,319,865
33,128,947
-
384,034
1,129,896
467,501
265,352
-
2,246,783
1,875,447
153,856
764,511
739,116
-
-
766,918
1,379,908
5,679,756
469,917
800,000
1,277,571
402,728
265,352
-
3,215,568
1,378,852
59,761
-
655,043
-
870,240
455,408
1,381,460
4,800,764
278,684
800,000
1,162,844
279,522
-
392,663
2,913,713
35,375,730
8,895,324
7,714,477
(8,796,601)
2,705,583
5,756,748
27
28
8,980,031
8,671,609
(26,448,241)
8,980,031
7,432,641
(13,707,089)
8,980,031
6,601,207
(9,824,490)
(8,796,601)
2,705,583
5,756,748
*
The Group has applied AASB 16 using the full retrospective approach from 1 July 2019. The comparative amounts
presented as at 30 June 2019 were restated for the impact of AASB 16, refer to note 4 for detailed information.
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
10
Access Innovation Holdings Limited
Consolidated statement of changes in equity
For the year ended 30 June 2020
Consolidated
Balance at 1 July 2018
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total equity
$
8,980,031
6,601,207
(9,802,689)
5,778,549
Impact of adoption of AASB 16 * (note 4)
-
-
(21,801)
(21,801)
Balance at 1 July 2018 - restated
8,980,031
6,601,207
(9,824,490)
5,756,748
Loss after income tax benefit for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Share-based payments (note 42)
-
-
-
-
-
4,110
(3,882,599)
-
(3,882,599)
4,110
4,110
(3,882,599)
(3,878,489)
827,324
-
827,324
Balance at 30 June 2019
8,980,031
7,432,641
(13,707,089)
2,705,583
*
The Group has applied AASB 16 using the full retrospective approach from 1 July 2019. The comparative amounts
presented as at 30 June 2019 were restated for the impact of AASB 16, refer to note 4 for detailed information.
Consolidated
Balance at 1 July 2019
Loss after income tax benefit for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Share-based payments (note 42)
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total equity
$
8,980,031
7,432,641
(13,707,089)
2,705,583
-
-
-
-
(37,463)
(12,741,152)
-
(12,741,152)
(37,463)
(37,463)
(12,741,152)
(12,778,615)
-
1,276,431
-
1,276,431
Balance at 30 June 2020
8,980,031
8,671,609
(26,448,241)
(8,796,601)
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
11
Access Innovation Holdings Limited
Consolidated statement of cash flows
For the year ended 30 June 2020
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Other revenue
Interest and other finance costs paid
Income taxes refunded/(paid)
Consolidated
Note
2020
$
2019
Restated*
$
26,479,701 19,232,611
(20,388,701)
(32,880,722)
(6,401,021)
57,837
925,991
(832,127)
475,215
(1,156,090)
119,263
103,928
(159,978)
(866,759)
Net cash used in operating activities
40
(5,774,105)
(1,959,636)
Cash flows from investing activities
Payment for purchase of business, net of cash acquired
Payments for property, plant and equipment
Payments for intangibles
Payments for security deposits
Payments for term deposits
Net cash used in investing activities
Cash flows from financing activities
Proceeds from bank loans and other loans
Proceeds from shareholder loans
Proceeds from convertible notes
Repayment of lease liabilities
Net cash from/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
36
14
16
(464,853)
(518,998)
(2,568,997)
-
-
-
(103,818)
(1,882,806)
(4,722)
(272,076)
(3,552,848)
(2,263,422)
424,817
1,613,918
10,330,000
(779,000)
-
-
-
(702,797)
11,589,735
(702,797)
2,262,782
672,171
59,218
(4,925,855)
5,595,451
2,575
Cash and cash equivalents at the end of the financial year
10
2,994,171
672,171
*
The Group has applied AASB 16 using the full retrospective approach from 1 July 2019. The comparative amounts
presented as at 30 June 2019 were restated for the impact of AASB 16, refer to note 4 for detailed information.
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
12
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 1. General information
The financial statements cover Access Innovation Holdings Limited as a Group consisting of Access Innovation Holdings
Limited ('Company' or 'parent entity') and the entities it controlled at the end of, or during, the year (referred to in these
financial statements as the 'Group'). The financial statements are presented in Australian dollars, which is Access
Innovation Holdings Limited's functional and presentation currency.
Access Innovation Holdings Limited is a listed public company limited by shares, incorporated and domiciled in Australia.
Its registered office and principal place of business are:
Registered office
Level 6
277 William Street
Melbourne VIC 3000
Principal place of business
Level 1
103 Miller Street
North Sydney NSW 2060
A description of the nature of the Group's operations and its principal activities are included in the directors' report, which is
not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 30 September 2020.
The directors have the power to amend and reissue the financial statements.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of these
Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of
the Group.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The following Accounting Standards and Interpretations are most relevant to the Group:
AASB 16 Leases
The Group has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 'Leases' and for lessees eliminates
the classifications of operating leases and finance leases. Except for short-term leases and leases of low-value assets,
right-of-use assets and corresponding lease liabilities are recognised in the statement of financial position. Straight-line
operating lease expense recognition is replaced with a depreciation charge for the right-of-use assets (included in
operating costs) and an interest expense on the recognised lease liabilities (included in finance costs). In the earlier
periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease
expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results
improve as the operating expense is now replaced by interest expense and depreciation in profit or loss. For classification
within the statement of cash flows, the interest portion is disclosed in operating activities and the principal portion of the
lease payments are separately disclosed in financing activities. For lessor accounting, the standard does not substantially
change how a lessor accounts for leases.
Impact of adoption
AASB 16 was adopted using the full retrospective approach and as such the comparatives have been restated. The impact
on the financial performance and position of the Group from the adoption of AASB 16 is detailed in note 4.
13
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Practical expedients applied
When adopting AASB 16 from 1 July 2018, the Group has applied the following practical expedients:
applying a single discount rate to the portfolio of leases with reasonably similar characteristics;
●
accounting for leases with a remaining lease term of 12 months as at 1 July 2019 as short-term leases;
●
excluding any initial direct costs from the measurement of right-of-use assets;
●
using hindsight in determining the lease term when the contract contains options to extend or terminate the lease; and
●
not apply AASB 16 to contracts that were not previously identified as containing a lease.
●
Interpretation 23 Uncertainty over Income Tax
The Group has adopted Interpretation 23 from 1 July 2019. The interpretation clarifies how to apply the recognition and
measurement requirements of AASB 112 ‘Income Taxes’ in circumstances where uncertain tax treatments exists. The
interpretation requires: the Group to determine whether each uncertain tax treatment should be treated separately or
together, based on which approach better predicts the resolution of the uncertainty; the Group to consider whether it is
probable that a taxation authority will accept an uncertain tax treatment; and if the Group concludes that it is not probable
that the taxation authority will accept an uncertain tax treatment, it shall reflect the effect of uncertainty in determining the
related taxable profit (tax loss), tax bases, unused tax losses, unused tax credits or tax rates, measuring the tax uncertainty
based on either the most likely amount or the expected value. In making the assessment it is assumed that a taxation
authority will examine amounts it has a right to examine and have full knowledge of all related information when making
those examinations. Management has considered all facts and circumstances as it relates to the Group and believe there
is no material uncertainty over the availability of the tax losses and other deductions to the Group.
Initial adoption of AASB 1 'First-time Adoption of Australian Accounting Standards'
The Group previously prepared general purpose financial statements with reduced disclosure requirements, that adopted
full recognition and measurements of Australian Accounting Standards but with some exempted disclosures. These
financial statements are the first general purpose financial statements prepared under Australian Accounting Standards.
The only impact of adoption is the additional disclosures as full recognition and measurements have already been applied.
Going concern
The financial report has been prepared on the going concern basis which contemplates the continuity of normal business
activities and the realisation of assets and settlement of liabilities in the ordinary course of business and assumes the
Group will have sufficient cash resources to pay their debts as and when they become due and payable for at least 12
months from the date of signing the financial report.
The Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2020 reflects a net loss
after income tax of $12,741,152 (2019: $3,882,599) and the Statement of Cash Flows reflects net cash outflows from
operating activities of $5,774,105 (2019: $1,959,636). As at 30 June 2020, the Statement of Financial Position reflects a
net asset deficit position of $8,796,601 (2019: net assets of $2,705,583) and a net current liability position of $23,342,126
(2019: net current asset of $373,013). The increase in losses and net cash outflows from operating activities in the current
year are a result of the strategic decision taken by the Group to accelerate its expansion to take advantage of the global
market growth opportunity.
On 15 September 2020 the Company successfully completed its Initial Public Offering (“IPO”) on the Australian Securities
Exchange raising a total of $65,480,526 from the additional issuance of 24,548,779 shares at an issue price of $1.23 per
share ($30,194,999) and transfer of 28,687,420 shares at an issue price of $1.23 per share ($35,285,527) to new
shareholders. The capital proceeds from the additional issuance of shares will be used to pursue the Group’s strategic
global growth objectives, repay all shareholder loans and fund IPO related costs.
As a consequence of the successful IPO, both the deficiency in net assets and the net current liability positions were
remediated subsequent to the year end. Resultantly, based on the successful IPO capital raised it is appropriate to prepare
the financial report on the going concern basis.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as
appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board ('IASB').
14
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Historical cost convention
The financial statements have been prepared under the historical cost convention except for, where applicable, the
revaluation of financial assets and liabilities at fair value through profit or loss and derivative financial instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed in note 3.
Comparative information
The financial statements presented in the comparative financial information are for the financial year ended 30 June 2019
and when required by accounting standards, comparative amounts have been adjusted to conform to changes in
presentation for the current financial year.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in note 39.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Access Innovation
Holdings Limited as at 30 June 2020 and the results of all subsidiaries for the year then ended.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group 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 to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted
by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity
attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group
recognises the fair value of the consideration received and the fair value of any investment retained together with any gain
or loss in profit or loss.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same
basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the
allocation of resources to operating segments and assessing their performance.
Foreign currency translation
Foreign currency transactions
Foreign currency transactions are translated into the Company's functional currency which is the Australian dollars using
the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at financial year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in profit or loss.
15
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the
reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average
exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange
differences are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in
exchange for transferring goods or services to a customer. For each contract with a customer, the Group: identifies the
contract with a customer; identifies the performance obligations in the contract; determines the transaction price which
takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the
separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be
delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the
transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts,
rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates
are determined using either the 'expected value' or 'most likely amount' method. The measurement of variable
consideration is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly
probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The measurement
constraint continues until the uncertainty associated with the variable consideration is subsequently resolved. Amounts
received that are subject to the constraining principle are recognised as a refund liability. During the year, variable
consideration comprised of immaterial discounts to certain customers.
Revenue from services
Revenue from a contract to provide services is recognised over time for all live captioning, as customers simultaneously
receive and consume captioning services as live captioned events occur. All recorded captioning is recognised at a point in
time, at such time that the customers gains control of and derives the benefits from the completed captioned medium(s)
produced and incurs the obligation to pay for completed captioning. Revenue from services primarily have payment terms
of 30 days.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest
rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset
to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established. Other income is
recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange for
transferring goods or services to a customer.
Grant income
During the year the Group received payments from various governments amounting to $280,715 as part of their boosting
cash flow for small medium businesses and employers due to the impacts of the COVID-19 pandemic. These amounts
have been recognised as government grants and recognised as income once there is reasonable assurance the Group will
comply with any conditions attached.
Cost of sales
Cost of sales includes both direct and indirect labour costs and other costs directly attributable to the generation of
revenue.
16
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Contract assets and liabilities
AASB 15 uses the terms ‘contract asset’ and ‘contract liability’ to describe what is commonly known as ‘accrued revenue’
and ‘deferred revenue’. Contract receivables represent receivables in respect of which the Group’s right to consideration is
unconditional subject only to the passage of time. Contract receivables are non-derivative financial assets accounted for in
accordance with the Group’s accounting policy for non-derivative financial assets. Contract assets represent the Group’s
right to consideration for services provided to customers for which the Group’s right remains conditional on something
other than the passage of time. Contract liabilities arise where payment is received prior to work being performed. Contract
assets and contract liabilities are recognised and measured in accordance with this accounting policy
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the
applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to
temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when
the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted,
except for:
●
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting
nor taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and
the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the
foreseeable future.
●
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred
tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for
the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is
probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable
authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
Access Innovation Holdings Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income
tax consolidated group under the tax consolidation regime. The head entity and each subsidiary in the tax consolidated
group continue to account for their own current and deferred tax amounts. The tax consolidated group has applied the
'separate taxpayer within group' approach in determining the appropriate amount of taxes to allocate to members of the tax
consolidated group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets)
and the deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax
consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts
receivable from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the
intercompany charge equals the current tax liability or benefit of each tax consolidated group member, resulting in neither a
contribution by the head entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.
Research and development grant
The Group has exceeded the $20 million ATO threshold to claim the refundable R&D tax credit and accounts for the
concession as part of its calculation of income tax expense/benefit for the financial year.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
17
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
Group's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months
after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle
a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value. For the statement of cash flows presentation purposes, cash
and cash equivalents also includes bank overdrafts, which are shown within borrowings in current liabilities on the
statement of financial position.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within
30 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the
initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured
at either amortised cost or fair value depending on their classification. Classification is determined based on both the
business model within which such assets are held and the contractual cash flow characteristics of the financial asset
unless an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the
Group has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of
recovering part or all of a financial asset, its carrying value is written off.
Financial assets at amortised cost
A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held within a
business model whose objective is to hold assets in order to collect contractual cash flows; and (ii) the contractual terms of
the financial asset represent contractual cash flows that are solely payments of principal and interest.
Investments
Investments includes non-derivative financial assets with fixed or determinable payments and fixed maturities where the
Group has the positive intention and ability to hold the financial asset to maturity. This category excludes financial assets
that are held for an undefined period. Investments are carried at amortised cost using the effective interest rate method
adjusted for any principal repayments. Gains and losses are recognised in profit or loss when the asset is derecognised or
impaired.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial assets which are either measured at
amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon
the Group's assessment at the end of each reporting period as to whether the financial instrument's credit risk has
increased significantly since initial recognition, based on reasonable and supportable information that is available, without
undue cost or effort to obtain.
18
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected
credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable
to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where
it is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected
credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present
value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment
(excluding land) over their expected useful lives as follows:
Leasehold improvements
Plant and equipment
3 to 5 years
5 to 10 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting
date.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the assets,
whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in
the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset,
and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of
the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted
for any remeasurement of lease liabilities.
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 of low-value assets. Lease payments on these assets are expensed to profit or loss
as incurred.
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value
at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible
assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are
subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss
arising from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the
carrying amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually.
Changes in the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation
method or period.
Goodwill
Goodwill arises on the acquisition of a business and is carried at cost less accumulated impairment losses. Impairment
losses on goodwill are taken to profit or loss and are not subsequently reversed.
19
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Development
Development costs are capitalised when it is probable that the project will be a success considering its commercial and
technical feasibility, the Group is able to use or sell the asset, the Group has sufficient resources and intent to complete the
development and its costs can be measured reliably. Capitalised development costs are amortised on a straight-line basis
over the period of their expected benefit, being their finite life of 4 years.
Intellectual property
Significant costs associated with intellectual property are deferred and amortised on a straight-line basis over the period of
its expected benefit, being its finite life, which varies from 3 to 5 years.
Customer contracts
Customer contracts acquired in a business combination are amortised on a straight-line basis over the period of their
expected benefit, being their finite life of 5 years.
Software
Significant costs associated with software are deferred and amortised on a straight-line basis over the period of its
expected benefit, being its finite life, which varies from 3 to 5 years.
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired.
Other non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
form a cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and
which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within 30 days of recognition.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They
are subsequently measured at amortised cost using the effective interest method.
The component of the convertible notes that exhibits characteristics of a liability is recognised as a liability in the statement
of financial position, net of transaction costs.
On the issue of the convertible notes the debt host contract component is determined using a market rate for an equivalent
non-convertible bond and this amount is carried as a current liability on an amortised cost basis until extinguished on
conversion or redemption. The increase in the liability due to the passage of time is recognised as a finance cost. The
remainder of the proceeds at initial recognition are allocated to the embedded conversion option that is recognised at fair
value as a financial liability. This is subsequently remeasured at fair value at each reporting date and differences in fair
value are recognised in profit and loss. On conversion of the convertible note into ordinary shares, the carrying amount of
the debt host contract and derivative is converted into ordinary shares.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease
or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Lease payments comprise of fixed
payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option
is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend
on an index or a rate are expensed in the period in which they are incurred.
20
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured
if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an
adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use
asset is fully written down.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is
probable the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value
of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the
provision resulting from the passage of time is recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are
measured as the present value of expected future payments to be made in respect of services provided by employees up
to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures
and periods of service. Expected future payments are discounted using market yields at the reporting date on high quality
corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for
the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of
cash is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined
using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the
option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the
expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do
not determine whether the Group receives the services that entitle the employees to receive payment. No account is taken
of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the
best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount
recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already
recognised in previous periods.
21
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the
Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was
granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:
●
during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the
expired portion of the vesting period.
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the
reporting date.
●
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to
settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other
conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made.
An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair
value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a
cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the vesting
period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, they are treated as if they had vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and
new award is treated as if they were a modification.
Derivative financial instruments
Embedded derivative
Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their
economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not
classified as fair value through profit or loss with such gains or losses presented in finance costs. These embedded
derivatives are measured at fair value with changes in fair value recognised in profit or loss. Reassessment only occurs if
there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be
required or a reclassification of a financial instrument out of the fair value through profit or loss category.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the
fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the
principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data is
available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity
instruments or other assets are acquired.
22
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest
in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value
or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to
profit or loss.
On the acquisition of a business, the Group assesses the financial assets acquired and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, the Group's operating or
accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the Group remeasures its previously held equity interest in the
acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount is
recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent
changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within
equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling
interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment
in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair
value of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a
gain directly in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and
measurement of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred
and the acquirer's previously held equity interest in the acquirer.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Access Innovation Holdings
Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial
year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part
of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
23
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2020. The Group's
assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the Group,
are set out below.
Conceptual Framework for Financial Reporting (Conceptual Framework)
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January 2020 and
early adoption is permitted. The Conceptual Framework contains new definition and recognition criteria as well as new
guidance on measurement that affects several Accounting Standards. Where the Group has relied on the existing
framework in determining its accounting policies for transactions, events or conditions that are not otherwise dealt with
under the Australian Accounting Standards, the Group may need to review such policies under the revised framework. At
this time, the application of the Conceptual Framework is not expected to have a material impact on the Group's financial
statements.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates
and assumptions on historical experience and on other various factors, including expectations of future events,
management believes to be reasonable under the circumstances.
Judgement has been exercised in considering the impacts that the COVID-19 pandemic has had, or may have, on the
Group based on known information. This consideration extends to the nature of the products and services offered,
customers, supply chain, staffing and geographic regions in which the Group operates. Other than as addressed in specific
notes, there does not currently appear to be either any significant impact upon the financial statements or any significant
uncertainties with respect to events or conditions which may impact the Group unfavourably as at the reporting date or
subsequently as a result of the COVID-19 pandemic
The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements,
estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities (refer to the respective notes) within the next financial year are discussed below.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted and key judgements exist when determining the vesting period. For cash
settled liabilities the fair value is determined using the best estimate of the market price of the entity’s ordinary shares at
each reporting period.
Best estimate judgements on present obligations
The amount recognised as a provision shall be the best estimate of the expenditure required to settle the present obligation
at the end of the reporting period. Management take into account the probability weighting of the most likely outcome when
recognising provisions which involves key judgements.
Recovery of deferred tax assets
Deferred tax assets are recognised for tax losses and deductible temporary differences only if the Group considers it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
Derivative financial instruments
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently
remeasured to their fair value at each reporting period. The Group makes judgements and estimates in relation to the
observable inputs which determine the fair value adopted. These judgements include the estimated share price, as well the
timing and probability of a Liquidity event (e.g. IPO) taking place.
24
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 3. Critical accounting judgements, estimates and assumptions (continued)
Business combinations
The Group makes judgements and estimates in relation to the fair value allocation of the purchase price. The amount of
goodwill initially recognised as a result of a business combination is dependent on the allocation of the purchase price to
the fair value of the identifiable assets acquired and the liabilities assumed. The determination of the fair value of the
assets and liabilities is based, to a considerable extent, on management’s judgement. Allocation of the purchase price
affects the results of the Group as finite lived intangible assets are amortised, whereas indefinite lived intangible assets,
including goodwill, are not amortised and could result in differing amortisation charges based on the allocation to indefinite
lived and finite lived intangible assets.
Note 4. Restatement of comparatives
Adoption of AASB 16 'Leases'
The Group has adopted AASB 16 'Leases' from 1 July 2019, using the full retrospective approach, resulting in the following
restatement of comparatives for the statement of financial position as at 30 June 2019:
●
●
●
●
●
●
Leased plant and equipment (previously recognised under finance leases) of $379,508 were reclassified from
property, plant and equipment to right-of-use assets
Additional right-of-use assets of $892,727 were recognised (discounted based on the weighted average incremental
borrowing rate of 3.6% and net of accumulated depreciation)
Net deferred tax assets increased by $9,343 (as a result of the net tax effect on right-of-use assets and lease
liabilities)
Finance lease liabilities of $276,146 (current) and $428,262 (non-current) were reclassified from borrowings to lease
liabilities
Additional lease liabilities of $1,312,279 were recognised (current $462,970 and non-current $849,309)
The overall impact on total equity was a decrease of $30,144.
The impact on the statement of profit or loss and other comprehensive income for the year ended 30 June 2019:
●
●
●
●
●
Depreciation of $385,665 was recognised against the right-of-use assets
Lease payments of $424,546 were reclassified from other expenses to principal repayments against lease liabilities
Finance costs of $50,799 were recognised against lease liabilities
Income tax benefit increased by $3,575
Loss after income tax expense increased by $8,343
Statement of financial position at the beginning of the earliest comparative period
Retained profits as at 1 July 2018 were restated by $21,801, as result of right-of-use assets and lease liabilities
as described above.
25
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 4. Restatement of comparatives (continued)
Statement of profit or loss and other comprehensive income
Revenue
Consolidated
2019
$
$
2019
$
Reported
Adjustment Restated
18,339,127
- 18,339,127
Other income
Interest revenue calculated using the effective interest method
103,928
119,263
-
-
103,928
119,263
Expenses
Cost of sales
Employee benefits expense
Depreciation and amortisation expense
Impairment of receivables
Professional and consulting costs
Business development costs
Networking and information technology costs
Other employment costs
Office expenses
Other expenses
Finance costs
(9,417,108)
(6,532,263)
(1,364,758)
(1,055)
-
(1,272,882)
(1,006,116)
(466,595)
(739,412)
(1,938,686)
(351,211)
-
-
(385,665)
-
(995,815)
-
-
-
424,546
995,815
(50,799)
(9,417,108)
(6,532,263)
(1,750,423)
(1,055)
(995,815)
(1,272,882)
(1,006,116)
(466,595)
(314,866)
(942,871)
(402,010)
Loss before income tax benefit
(4,527,768)
(11,918)
(4,539,686)
Income tax benefit
653,512
3,575
657,087
Loss after income tax benefit for the year attributable to the owners of
Access Innovation Holdings Limited
(3,874,256)
(8,343)
(3,882,599)
Other comprehensive income
Foreign currency translation
Other comprehensive income for the year, net of tax
4,110
4,110
-
-
4,110
4,110
Total comprehensive income for the year attributable to the owners of
Access Innovation Holdings Limited
(3,870,146)
(8,343)
(3,878,489)
Basic loss per share
Diluted loss per share
Cents
Cents
Cents
Reported
Adjustment Restated
(4.02)
(4.02)
(0.02)
(0.02)
(4.04)
(4.04)
26
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 4. Restatement of comparatives (continued)
Statement of financial position at the beginning of the earliest comparative period
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Income tax
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangibles
Deferred tax assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Lease liabilities
Income tax
Employee benefits
Provisions
Total current liabilities
Non-current liabilities
Trade and other payables
Borrowings
Lease liabilities
Employee benefits
Income tax
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Consolidated
1 Jul 2018
$
1 Jul 2018
$
$
Reported
Adjustment Restated
5,595,451
2,787,331
1,289
8,384,071
-
-
-
-
5,595,451
2,787,331
1,289
8,384,071
1,309,395
-
1,986,761
503,263
3,799,419
(272,240)
1,550,632
-
9,343
1,287,735
1,037,155
1,550,632
1,986,761
512,606
5,087,154
12,183,490
1,287,735 13,471,225
1,614,963
59,761
230,497
-
870,240
455,408
1,381,460
4,612,329
(236,111)
-
(230,497)
655,043
-
-
-
188,435
1,378,852
59,761
-
655,043
870,240
455,408
1,381,460
4,800,764
278,684
841,743
-
279,522
392,663
1,792,612
-
(41,743)
1,162,844
-
-
1,121,101
278,684
800,000
1,162,844
279,522
392,663
2,913,713
6,404,941
1,309,536
7,714,477
5,778,549
(21,801)
5,756,748
8,980,031
6,601,207
(9,802,689)
-
-
(21,801)
8,980,031
6,601,207
(9,824,490)
5,778,549
(21,801)
5,756,748
27
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 4. Restatement of comparatives (continued)
Statement of financial position at the end of the earliest comparative period
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Contract assets
Investments
Income tax
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangibles
Deferred tax assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Lease liabilities
Employee benefits
Provisions
Total current liabilities
Non-current liabilities
Trade and other payables
Borrowings
Lease liabilities
Employee benefits
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Consolidated
2019
$
$
2019
$
Reported
Adjustment Restated
1,436,682
3,646,605
201,797
272,076
495,609
6,052,769
-
-
-
-
-
-
1,436,682
3,646,605
201,797
272,076
495,609
6,052,769
1,309,177
-
3,068,078
266,311
4,643,566
(379,508)
1,272,235
-
11,845
904,572
929,669
1,272,235
3,068,078
278,156
5,548,138
10,696,335
904,572 11,600,907
2,253,010
153,856
1,040,657
-
766,918
1,379,908
5,594,349
(377,563)
-
(276,146)
739,116
-
-
85,407
1,875,447
153,856
764,511
739,116
766,918
1,379,908
5,679,756
469,917
1,228,262
-
402,728
265,352
2,366,259
-
(428,262)
1,277,571
-
-
849,309
469,917
800,000
1,277,571
402,728
265,352
3,215,568
7,960,608
934,716
8,895,324
2,735,727
(30,144)
2,705,583
8,980,031
7,432,641
(13,676,945)
-
-
(30,144)
8,980,031
7,432,641
(13,707,089)
2,735,727
(30,144)
2,705,583
28
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 5. Operating segments
Identification of reportable operating segments
The Group is organised into 3 operating segments based on geographical locations: Australia and New Zealand ('ANZ'),
North America (which includes Canada and United States of America), Rest of the world ('ROW') (which includes United
Kingdom and Singapore). These operating segments are based on the internal reports that are reviewed and used by the
Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in
determining the allocation of resources. There is no aggregation of operating segments.
The CODM reviews EBITDA (earnings before interest, tax, depreciation and amortisation). The accounting policies
adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.
The information reported to the CODM is on a monthly basis.
The CODM does not regularly review segment assets and segment liabilities. Refer to statement of financial position for
assets and liabilities.
Major customers
The Group's largest 3 customers contribute to approximately 45% of the Group's revenue.
Operating segment information
Consolidated - 2020
Revenue
Sales to external customers
Other revenue
Total revenue
EBITDA
Depreciation and amortisation
Interest revenue
Finance costs
Loss before income tax benefit
Income tax benefit
Loss after income tax benefit
Consolidated - 2019
Revenue
Sales to external customers
Other revenue
Total revenue
EBITDA
Depreciation and amortisation
Interest revenue
Finance costs
Loss before income tax benefit
Income tax benefit
Loss after income tax benefit
ANZ
$
North
America
$
ROW
$
Corporate
$
Total
$
17,616,542
919,169
18,535,711
4,879,374
6,822
4,886,196
2,927,174
-
2,927,174
- 25,423,090
-
925,991
- 26,349,081
6,698,101
(905,549)
(311,170)
(15,529,714)
(10,048,332)
(2,316,407)
57,837
(3,847,136)
(16,154,038)
3,412,886
(12,741,152)
ANZ
$
North
America
$
ROW
$
Corporate
$
Total
$
16,157,248
103,928
16,261,176
765,775
-
765,775
1,416,104
-
1,416,104
- 18,339,127
-
103,928
- 18,443,055
6,752,364
(904,272)
(82,815)
(8,271,793)
(2,506,516)
(1,750,423)
119,263
(402,010)
(4,539,686)
657,087
(3,882,599)
29
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 6. Revenue
Service revenue
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Major product lines
Broadcast*
Non-broadcast*
Timing of revenue recognition
Goods transferred at a point in time
Services transferred over time
Consolidated
2020
$
2019
$
25,423,090 18,339,127
Consolidated
2020
$
2019
$
15,280,613 13,860,027
4,479,100
10,142,477
25,423,090 18,339,127
11,942,592
7,675,623
13,480,498 10,663,504
25,423,090 18,339,127
*
Broadcast revenue includes services provided to broadcasters, including captioning live, sporting events and recorded
content. Non-broadcast revenue includes services provided to enterprise and convention (corporate, governments
and universities) customers.
Note 7. Other income
Other revenue
Consolidated
2020
$
2019
$
925,991
103,928
Other revenue relates to IT infrastructure services provided on an ad-hoc and non-recurring basis.
30
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 8. Expenses
Loss before income tax includes the following specific expenses:
Depreciation
Leasehold improvements
Plant and equipment
Buildings right-of-use assets
Plant and equipment right-of-use assets
Total depreciation
Amortisation
Development
Customer contracts
Intellectual property
Software
Total amortisation
Total depreciation and amortisation
Finance costs
Interest and finance charges paid/payable on borrowings
Interest and finance charges paid/payable on lease liabilities
Interest on convertible notes (debt host)
Fair value movement on embedded derivatives (note 20)
Finance costs expensed
Leases
Short-term lease payments
Superannuation expense
Defined contribution superannuation expense
Consolidated
2020
$
2019
$
252,080
105,266
411,015
291,217
221,910
149,929
385,665
191,430
1,059,578
948,934
1,167,752
24,043
-
65,034
705,794
-
86
95,609
1,256,829
801,489
2,316,407
1,750,423
481,292
47,172
949,469
2,369,203
351,211
50,799
-
-
3,847,136
402,010
166,521
151,971
1,295,910
972,001
31
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 9. Income tax
Income tax benefit
Current tax
Deferred tax - origination and reversal of temporary differences
Adjustment recognised for prior periods
Under/over opening deferred tax assets
Aggregate income tax benefit
Deferred tax included in income tax benefit comprises:
Decrease/(increase) in deferred tax assets
Numerical reconciliation of income tax benefit and tax at the statutory rate
Loss before income tax benefit
Tax at the statutory tax rate of 27.5%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Research and Development
Other non-assessable and non-deductible items
Sundry items
Adjustment recognised for prior periods
Current year tax losses not recognised
Difference in overseas tax rates
Recognition of deferred tax liability
Under/over opening deferred tax assets
Income tax benefit
Consolidated
2020
$
2019
$
(132,532)
(3,433,280)
(3,592)
156,518
(862,127)
234,450
(29,410)
-
(3,412,886)
(657,087)
(3,433,280)
234,450
(16,154,038)
(4,539,686)
(4,442,360)
(1,248,414)
(403,000)
1,312,247
243,972
(993,000)
901,852
776
(3,289,141)
(3,592)
(454,203)
177,532
-
156,518
(1,338,786)
(29,410)
-
-
711,109
-
(3,412,886)
(657,087)
32
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 9. Income tax (continued)
Deferred tax asset
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Allowance for expected credit losses
Property, plant and equipment
Employee benefits
Provisions
Accrued expenses
Tax losses
Research and development tax losses
Prepayments
Contract assets
Capitalised development cost and customer contracts
Right-of-use assets/lease liabilities
Other
Deferred tax asset
Movements:
Opening balance
Credited/(charged) to profit or loss
Additions through business combinations (note 36)
Closing balance
Income tax
Income tax refund due
Consolidated
2020
$
2019
$
17,625
(1,589)
417,582
1,373,179
59,868
1,226,397
1,410,498
(1,190)
(28,448)
(1,358,218)
91,710
126,546
-
96,031
311,854
-
572,426
-
-
(2,310)
-
(711,109)
11,845
(581)
3,333,960
278,156
278,156
3,433,280
(377,476)
512,606
(234,450)
-
3,333,960
278,156
Consolidated
2020
$
2019
$
-
495,609
The Group has recognised a deferred tax asset in respect of the tax losses as it is considered probable that there will be
future taxable profits available in excess of the profits arising from the reversal of existing taxable temporary differences.
33
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 10. Current assets - cash and cash equivalents
Cash on hand
Cash at bank
Reconciliation to cash and cash equivalents at the end of the financial year
The above figures are reconciled to cash and cash equivalents at the end of the financial
year as shown in the statement of cash flows as follows:
Balances as above
Bank overdraft (note 19)
Balance as per statement of cash flows
Note 11. Current assets - trade and other receivables
Trade receivables
Less: Allowance for expected credit losses
Other receivables
Prepayments
Security deposits
Consolidated
2020
$
2019
$
196
2,993,975
120
1,436,562
2,994,171
1,436,682
2,994,171
-
1,436,682
(764,511)
2,994,171
672,171
Consolidated
2020
$
2019
$
5,539,586
(139,714)
5,399,872
3,243,844
-
3,243,844
139,353
558,753
48,018
5,016
365,622
32,123
6,145,996
3,646,605
Allowance for expected credit losses
The Group has recognised a loss of $140,153 (2019: $1,055) in profit or loss in respect of the expected credit losses for
the year ended 30 June 2020.
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Consolidated
Not overdue
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
Carrying amount
Allowance for expected
credit losses
2020
$
2019
$
2020
$
2019
$
2,992,960
2,146,007
289,092
111,527
1,782,107
1,258,925
177,231
25,581
-
30,043
45,038
64,633
5,539,586
3,243,844
139,714
-
-
-
-
-
34
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 11. Current assets - trade and other receivables (continued)
Movements in the allowance for expected credit losses are as follows:
Opening balance
Additional provisions recognised
Foreign currency translation
Closing balance
Note 12. Current assets - contract assets
Contract assets
Reconciliation
Movement in the contract assets during the financial year are as follows:
Opening balance
Additions
Amounts recognised in profit and loss
Closing balance
Note 13. Current assets - investments
Term deposit
Consolidated
2020
$
2019
$
-
141,688
(1,974)
139,714
-
-
-
-
Consolidated
2020
$
2019
$
374,578
201,797
201,797
1,090,502
(917,721)
-
785,643
(583,846)
374,578
201,797
Consolidated
2020
$
2019
$
272,076
272,076
The term deposit bears interest of 2% (2019: 4%) per annum and has a maturity of more than three months but less than
one year.
Note 14. Non-current assets - property, plant and equipment
Leasehold improvements - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
35
Consolidated
2020
$
2019
$
1,556,804
(842,451)
714,353
1,360,907
(590,371)
770,536
3,338,137
(2,961,169)
376,968
2,982,857
(2,823,724)
159,133
1,091,321
929,669
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 14. Non-current assets - property, plant and equipment (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2018
Additions
Exchange differences
Depreciation expense
Balance at 30 June 2019
Additions
Depreciation expense
Balance at 30 June 2020
Note 15. Non-current assets - right-of-use assets
Buildings - right-of-use
Less: Accumulated depreciation
Plant and equipment - right-of-use
Less: Accumulated depreciation
Leasehold
Plant and
improvements equipment
$
$
870,522
121,924
-
(221,910)
770,536
195,897
(252,080)
166,633
140,894
1,535
(149,929)
159,133
323,101
(105,266)
Total
$
1,037,155
262,818
1,535
(371,839)
929,669
518,998
(357,346)
714,353
376,968
1,091,321
Consolidated
2020
$
2019
$
1,986,183
(1,163,809)
822,374
1,645,521
(752,794)
892,727
1,203,001
(902,401)
300,600
990,692
(611,184)
379,508
1,122,974
1,272,235
The Group leases buildings for its offices under agreements of between two to five years with, in some cases, options to
extend. The leases have various escalation clauses. On renewal, the terms of the leases are renegotiated. The Group also
leases plant and equipment under agreements of three years.
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2018
Additions
Depreciation expense
Balance at 30 June 2019
Additions
Depreciation expense
Balance at 30 June 2020
Buildings -
right-of-use
$
Plant and
equipment
right-of-use
$
Total
$
1,278,392
-
(385,665)
272,240
298,698
(191,430)
1,550,632
298,698
(577,095)
892,727
340,662
(411,015)
379,508
212,309
(291,217)
1,272,235
552,971
(702,232)
822,374
300,600
1,122,974
36
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 16. Non-current assets - intangibles
Goodwill - at cost
Development - at cost
Less: Accumulated amortisation
Intellectual property - at cost
Less: Accumulated amortisation
Customer contracts - at cost
Less: Accumulated amortisation
Software - at cost
Less: Accumulated amortisation
Consolidated
2020
$
2019
$
5,714,525
389,434
7,065,982
(3,114,704)
3,951,278
4,532,802
(1,946,952)
2,585,850
602,789
(325,904)
276,885
325,942
(325,904)
38
1,166,649
(24,041)
1,142,608
-
-
-
1,293,731
(1,134,974)
158,757
1,163,380
(1,070,624)
92,756
11,244,053
3,068,078
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2018
Additions
Amortisation expense
Balance at 30 June 2019
Additions
Additions through business
combinations (note 36)
Exchange differences
Amortisation expense
Goodwill
$
Development
$
Intellectual
property
$
Customer
contracts
$
Software
$
Total
$
389,434
-
-
1,414,782
1,876,862
(705,794)
389,434
-
2,585,850
2,533,180
124
-
(86)
38
-
-
-
-
-
-
182,421
5,944
(95,609)
1,986,761
1,882,806
(801,489)
92,756
35,817
3,068,078
2,568,997
5,658,165
(333,074)
-
-
-
(1,167,752)
294,163
(17,316)
-
1,254,064
(87,413)
(24,043)
102,183
(6,965)
(65,034)
7,308,575
(444,768)
(1,256,829)
Balance at 30 June 2020
5,714,525
3,951,278
276,885
1,142,608
158,757 11,244,053
Impairment test for goodwill
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash generating units (CGU), or groups
of CGUs, that are expected to benefit from the synergies of the combinations. Each unit or groups of units to which
goodwill is allocated represents the lowest level at which assets are monitored for internal management purposes. Prior to
the acquisition of ACS (refer to note 36) the goodwill held was allocated to the Rest of the World ('ROW') CGU. The
acquisition of ACS is expected to benefit the synergies of the North America operations and has been allocated to the
North America CGU.
37
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 16. Non-current assets - intangibles (continued)
The carrying amount of goodwill has been allocated to the CGUs as follows:
North America
ROW
Consolidated
2020
$
2019
$
5,325,091
389,434
-
389,434
5,714,525
389,434
The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be
impaired. Based on the growth experienced in the ROW CGU, no impairment of goodwill has been identified. The goodwill
associated with ACS and allocated to the North America CGU, arose when the business was acquired in the current year
on 1 May 2020. Subsequent to the acquisition, ACS has continued to operate ahead of expectations and the Group is
benefiting from the synergies of the combination in the North America CGU. The Directors believe the recoverable amount
based on the fair value less costs to sell of the North America CGU is in excess of the carrying amount and no reasonable
changes to key assumptions would lead to impairment.
Note 17. Current liabilities - trade and other payables
Consolidated
2020
$
2019
$
1,619,908
3,020,597
2,973,201
275,359
1,383,742
216,346
7,613,706
1,875,447
Consolidated
2020
$
2019
$
167,812
153,856
153,853
86,834
(72,875)
-
153,853
-
167,812
153,853
Trade payables
Accrued expenses
Cash-settled share-based payments
Refer to note 30 for further information on financial instruments.
For terms and conditions relating to cash-settled share-based payments, please refer to note 32.
Note 18. Current liabilities - contract liabilities
Contract liabilities
Reconciliation
Movement in the contract liabilities during the financial year are as follows:
Opening balance
Payments received in advance
Transfer to revenue
Closing balance
38
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 19. Current liabilities - borrowings
Bank overdraft
Bank loans
Shareholder loans
Other loans
Convertible notes payable
Related party loans
Consolidated
2020
$
2019
$
-
757,686
2,413,918
29,506
9,918,942
128,375
764,511
-
-
-
-
-
13,248,427
764,511
Refer to note 24 for further information on assets pledged as security and financing arrangements.
Refer to note 30 for further information on financial instruments.
Bank loans
The bank loans are interest bearing and are due to mature on 21 September 2020. Interest is payable at the rate of 5% per
annum.
Shareholder loans
The loans from shareholders are interest bearing and were due to mature on 30 September 2020. The loans from
shareholders were renegotiated and are now maturing on the earlier of 45 days post the date of a successful IPO or
divided into two tranches payable within 5 business days after 31 December 2021 ($1,613,918) and within 5 business days
after 31 December 2022 ($800,000). Interest is payable at the fixed rate of 12% per annum. The Company successfully
completed its Initial Public Offering (“IPO”) on the Australian Securities Exchange on 15 September 2020, in accordance
with the agreement the Shareholder Loans will be settled 45 days post the date of a successful IPO.
Convertible notes
The Group raised $4,500,000 on 13 December 2019 through the issuance of 4,500,000 convertible notes and an additional
$5,830,000 from entering into various convertible note subscription agreements ('debt notes') between 1 January 2020 and
25 June 2020. The convertible notes have a face value of $1.00 per note. The note has a fixed 8.00% coupon interest rate
(accrued daily) and becomes repayable in cash on the 30 June 2021 (maturity date) or should a liquidity event (such as an
IPO) occur before the maturity date, monies owing (being principal and interest accrued daily to the liquidity event) is
converted into ordinary shares based on the following conversion discounts:
●
●
●
If a liquidity event occurs on or before 30 June 2020, a 20% discount to the price per ordinary share (as determined
by the company acting reasonably) paid under the liquidity event;
a liquidity event occurs between 1 July 2020 and 31 December 2020, a 25% discount to the price per Ordinary share
(as determined by the Company acting reasonably) paid under the liquidity event; and
If a liquidity event occurs on and from 1 January 2021, a 30% discount to the price per ordinary share (as determined
by the Company acting reasonably) paid under the liquidity event.
All of the above scenarios is subject to a pre-money valuation cap of $110,000,000 in aggregate for all equity
securities. This is the valuation of all equity securities on which the appropriate conversion discounts shall apply if the
valuation is in excess of the $110,000,000.
The contractual right to repay cash to the note holders matures on the 30 June 2021, thus the liability has been classified
as current. The debt host contract (convertible note payable) has been measured at amortised cost and the derivative
component has been measured at fair value through the profit and loss with such gains or losses presented in finance cost
(see note 20). As the number of shares to be issued in the event of a liquidity event is variable and contingent upon the
liquidity event itself, the derivative component has been classified as a financial liability.
On 15 September 2020 the Company successfully completed its Initial Public Offering (“IPO”) on the Australian Securities
Exchange, with all convertible notes converting into ordinary shares.
39
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 19. Current liabilities - borrowings (continued)
Related party loans
The payables to related parties are interest bearing and are due to mature on 1 October 2020. Interest is payable at the
fixed rate of 5% per annum.
Note 20. Current liabilities - derivative financial instruments
Derivative financial instrument
Refer to note 30 for further information on financial instruments.
Consolidated
2020
$
2019
$
3,017,593
-
On initial recognition of the convertible notes payable, a derivative financial instrument of $648,390 has been
recognised. The derivative financial instrument has been subsequently measured at the reporting period date, with
changes in fair value of $2,369,203 being recognised in profit and loss and such gains or losses have been presented as
finance costs.
Refer to note 31 for further information on fair value measurement.
Derivative financial instruments refers to the derivative component of the convertible notes as disclosed in note 19.
Note 21. Current liabilities - lease liabilities
Lease liability
Refer to note 30 for further information on the maturity analysis of lease liabilities.
Note 22. Current liabilities - provisions
Deferred consideration
Other provisions
Consolidated
2020
$
2019
$
660,762
739,116
Consolidated
2020
$
2019
$
5,565,085
1,754,780
-
1,379,908
7,319,865
1,379,908
Deferred consideration
The provision represents the obligation to pay deferred consideration following the acquisition of a business or assets. It is
measured at the present value of the estimated liability. The deferred consideration includes a deferred cash and equity
amount of $2,771,915 and $2,793,170 respectively. The deferred cash consideration becomes payable on or around 45
days from the liquidity event which occurred on the 15 September 2020 as part of the IPO. The deferred equity
consideration has been classified as a financial liability as in a non-liquidity event scenario, it is settled in cash. As a result
of the liquidity event which occurred on the 15 September 2020, the deferred equity consideration has been settled in
ordinary shares.
Other provisions
The provision represents the best estimate of other provisions associated with the share based payment plan.
40
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 22. Current liabilities - provisions (continued)
Movements in provisions
Movements in each class of provision during the current financial year, other than employee benefits, are set out below:
Consolidated - 2020
Carrying amount at the start of the year
Additional provisions recognised
Additions through business combinations (note 36)
Currency translation difference
Carrying amount at the end of the year
Note 23. Non-current liabilities - trade and other payables
Accrued interest payable
Refer to note 30 for further information on financial instruments.
Note 24. Non-current liabilities - borrowings
Shareholder loan
Related party loans
Refer to note 30 for further information on financial instruments.
Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
Bank overdraft
Bank loans
Deferred
consideration
$
Other
provisions
$
-
-
5,913,172
(348,087)
1,379,908
374,872
-
-
5,565,085
1,754,780
Consolidated
2020
$
2019
$
-
469,917
Consolidated
2020
$
2019
$
-
384,034
800,000
-
384,034
800,000
Consolidated
2020
$
2019
$
-
757,686
764,511
-
757,686
764,511
Assets pledged as security
The bank overdraft and loans are secured by a term deposit with a balance of approximately $1,300,000.
Shareholder loans are unsecured but will rank in priority of payment to other unsecured creditors.
41
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 24. Non-current liabilities - borrowings (continued)
The convertible notes payable are not secured, however, in the event that prior to the maturity date, the Group suffers any
material adverse event which in the noteholder’s opinion (acting reasonably) renders the Group unlikely to meet the
redemption requirements, the noteholder may by notice to the Group, require it to promptly grant a general security over its
assets and undertakings. The convertible notes payable rank in priority to any other equity securities.
The lease liabilities are effectively secured as the rights to the leased assets, recognised in the statement of financial
position, and would revert to the lessor in the event of default.
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Total facilities
Bank overdraft
Line of credit
Used at the reporting date
Bank overdraft
Line of credit
Unused at the reporting date
Bank overdraft
Line of credit
Note 25. Non-current liabilities - lease liabilities
Lease liability
Refer to note 30 for information on the maturity analysis of lease liabilities.
Note 26. Non-current liabilities - provisions
Lease make good
Consolidated
2020
$
2019
$
1,000,000
919,513
1,919,513
1,000,000
-
1,000,000
-
757,686
757,686
764,511
-
764,511
1,000,000
161,827
1,161,827
235,489
-
235,489
Consolidated
2020
$
2019
$
1,129,896
1,277,571
Consolidated
2020
$
2019
$
265,352
265,352
Lease make good
The provision represents the present value of the estimated costs to make good the premises leased by the Group at the
end of the respective lease terms.
42
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 27. Equity - issued capital
Consolidated
2020
Shares
2019
Shares
2020
$
2019
$
Ordinary shares - fully paid
96,200,980 96,200,980
8,980,031
8,980,031
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the
Company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Subsequent to year end, the Company issued ordinary shares to convertible noteholders, in addition to issuing new shares
as part of the IPO.
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can
provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce
the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt.
The Group is subject to certain financing arrangements covenants and meeting these is given priority in all capital risk
management decisions. There have been no events of default on the financing arrangements during the financial year.
The capital risk management policy remains unchanged from the 30 June 2019 Annual Report.
Note 28. Equity - reserves
Foreign currency translation reserve
Employee share scheme reserve
Employee share option reserve
Consolidated
2020
$
2019
$
(22,863)
8,308,142
386,330
14,600
7,382,745
35,296
8,671,609
7,432,641
Foreign currency translation reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign
operations.
Employee share scheme ('ESS') reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their
remuneration.
Employee share option reserve
The reserve is used to recognise the value of share options benefits provided to employees and directors as part of their
remuneration.
43
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 28. Equity - reserves (continued)
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2018
Foreign currency translation
Share-based payments
Balance at 30 June 2019
Foreign currency translation
Share-based payments
Balance at 30 June 2020
Note 29. Equity - dividends
Foreign
currency
translation
reserve
$
Employee
share scheme
reserve
$
Employee
share option
reserve
$
Total
$
10,490
4,110
-
6,590,717
-
792,028
-
-
35,296
6,601,207
4,110
827,324
14,600
(37,463)
-
7,382,745
-
925,397
35,296
-
351,034
7,432,641
(37,463)
1,276,431
(22,863)
8,308,142
386,330
8,671,609
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Franking credits
Consolidated
2020
$
2019
$
Franking credits available for subsequent financial years based on a tax rate of 27.5%
395,200
266,733
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
●
●
●
franking credits that will arise from the payment of the amount of the provision for income tax at the reporting date
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date
Note 30. Financial instruments
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and
interest rate risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability
of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group.
Risk management is carried out by senior finance executives ('Finance') under frameworks approved by the Board of
Directors ('the Board'). These frameworks include identification and analysis of the risk exposure of the Group and
appropriate procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within the Group's
operating units. Finance reports to the Board on a monthly basis.
Market risk
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through
foreign exchange rate fluctuations.
44
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 30. Financial instruments (continued)
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and
cash flow forecasting.
The carrying amount of the Group's foreign currency denominated financial assets and financial liabilities at the reporting
date were as follows:
Consolidated
Pound Sterling
Canadian dollars
Singapore dollars
US dollars
Assets
Liabilities
2020
$
2019
$
2020
$
2019
$
1,002,290
462,041
202,462
3,513,445
446,377
142,439
-
382,692
3,159,403
2,732,641
751,192
5,010,804
1,917,107
1,120,798
-
987,268
5,180,238
971,508 11,654,040
4,025,173
The Group had net liabilities denominated in foreign currencies of $6,473,802 (assets of $5,180,238 less liabilities of
$11,654,040) as at 30 June 2020 (2019: $3,053,665 (assets of $971,508 less liabilities of $4,025,173)). Based on this
exposure, had the Australian dollars weakened by 5%/strengthened by 5% (2019: weakened by 5%/strengthened by 5%)
against these foreign currencies with all other variables held constant, the Group's profit before tax for the year would have
been $32,450 lower/$32,450 higher (2019: $15,307 lower/$15,307 higher) and equity would have been $22,715
lower/$22,715 higher (2019: $10,715 lower/$10,715 higher). The percentage change is the expected overall volatility of the
significant currencies, which is based on management's assessment of reasonable possible fluctuations taking into
consideration movements over the last 12 months each year and the spot rate at each reporting date. The actual foreign
exchange gain for the year ended 30 June 2020 was $625 (2019: loss of $1,335).
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group's main interest rate risk arises from long-term borrowings. Borrowings obtained at variable rates expose the
Group to interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk.
As at the reporting date, the Group had the following variable borrowings outstanding:
Consolidated
2020
2019
Weighted
average
interest rate
%
Weighted
average
interest rate
%
Balance
$
Balance
$
Bank overdraft and bank loans
5.00%
757,686
5.00%
764,511
Net exposure to cash flow variable interest rate risk
757,686
764,511
An analysis by remaining contractual maturities in shown in 'liquidity and interest rate risk management' below.
For the Group the bank and shareholder loans outstanding, totalling $757,686 (2019: $764,511), are principal and interest
payment loans. An official increase/decrease in interest rates of 100 (2019: 100) basis points would have an
adverse/favourable effect on profit before tax of $7,577 (2019: $7,645) per annum. The percentage change is based on the
expected volatility of interest rates using market data and analysts forecasts.
45
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 30. Financial instruments (continued)
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Group. The Group has a strict code of credit, confirming references and setting appropriate credit limits. The Group obtains
guarantees where appropriate to mitigate credit risk. The maximum exposure to credit risk at the reporting date to
recognised financial assets is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the
statement of financial position and notes to the financial statements. The Group does not hold any collateral.
The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables through
the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered representative
across all customers of the Group based on recent sales experience, historical collection rates and forward-looking
information that is available.
Trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the failure of
a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual payments for a
period greater than 1 year.
Liquidity risk
Liquidity risk requires the Group to maintain sufficient liquid assets (mainly cash and cash equivalents) and available
borrowing facilities to be able to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously
monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
Financing arrangements
Refer to disclosure of unused borrowing facilities at the reporting date in note 24.
Subject to the continuance of satisfactory credit ratings, the bank overdraft facilities may be drawn at any time but may also
be terminated by the bank without notice. The outstanding amount is payable on demand.
46
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 30. Financial instruments (continued)
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the
financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining
contractual maturities (except as noted below) and therefore these totals may differ from their carrying amount in the
statement of financial position.
Consolidated - 2020
Non-interest bearing
Trade payables
Cash-settled share-based payments
Interest-bearing - fixed rate
Bank loans
Other loans
Shareholder loans**
Payable to related parties
Convertible notes payable*
Lease liability
Total
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
1,619,908
2,973,201
-
-
-
-
-
-
1,619,908
2,973,201
757,686
29,506
2,450,068
249,734
13,503,820
931,134
22,515,057
-
-
-
249,734
-
795,681
1,045,415
-
-
-
170,298
-
102,042
272,340
757,686
-
29,506
-
2,450,068
-
-
669,766
- 13,503,820
-
1,828,857
- 23,832,812
*
**
The convertible notes payable represents both the embedded derivative and the debt host contract. On 15 September
2020 the Company successfully completed its IPO on the Australian Securities Exchange, with all Convertible Notes
converting into ordinary shares.
The loans from shareholders were due to mature on the earlier of 45 days post IPO ASX Listing Date or within 5
business days after 31 December 2021 ($1,613,918) and 31 December 2022 ($800,000). On 15 September 2020 the
Company successfully completed its IPO on the Australian Securities Exchange, as such the shareholder loans will
be settled out of the cash proceeds from the IPO.
Consolidated - 2019
Non-interest bearing
Trade payables
Cash-settled share-based payments
Interest-bearing - fixed rate
Bank overdraft
Shareholder loans
Lease liability
Total
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
275,359
216,346
-
-
-
-
764,511
96,000
921,908
2,274,124
-
96,000
931,134
1,027,134
-
944,000
897,724
1,841,724
-
-
-
-
-
-
275,359
216,346
764,511
1,136,000
2,750,766
5,142,982
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
47
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 31. Fair value measurement
Fair value hierarchy
The following tables detail the Group's assets and liabilities, measured or disclosed at fair value, using a three level
hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
or indirectly
Level 3: Unobservable inputs for the asset or liability
Consolidated - 2020
Liabilities
Derivative financial instruments
Deferred consideration
Total liabilities
Level 1
$
Level 2
$
Level 3
$
Total
$
-
-
-
-
-
-
3,017,593
5,565,085
8,582,678
3,017,593
5,565,085
8,582,678
There were no transfers between levels during the financial year.
Valuation techniques for fair value measurements categorised within level 2 and level 3
Unquoted investments have been valued using a discounted cash flow model.
The derivative financial instrument and the deferred consideration is payable based on the timing of liquidity event (the
IPO). The significant unobservable input related to the probability of the liquidity event (the IPO) have been assessed and
discounting them to a present value.
The sensitivity analysis indicated a potential change in value whereby the derivative financial instrument and deferred
consideration held as at 30 June 2020 would increase by $1,498,785 and $324,149 respectively if the probability and
timing of IPO changed.
Level 3 assets and liabilities
Refer to note 22 for the movement in the deferred consideration. Movements in derivative financial instruments during the
current and previous financial year are set out below:
Consolidated
Balance at 1 July 2018
Balance at 30 June 2019
Amounts recognised at initial recognition
Amounts recognised in profit or loss
Balance at 30 June 2020
Derivative
financial
instruments
$
-
-
648,390
2,369,203
3,017,593
48
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 32. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Deloitte Touche Tohmatsu, the
auditor of the Company:
Audit services - Deloitte Touche Tohmatsu
Audit or review of the financial statements
Other services - Deloitte Touche Tohmatsu
Preparation of the tax return
IPO and Due diligence costs
Other assurance services
Other services provided to overseas entities
Consolidated
2020
$
2019
$
160,250
60,000
24,250
365,858
100,500
17,427
28,250
-
-
-
508,035
28,250
668,285
88,250
Note 33. Contingent liabilities
The Group has given bank guarantees as at 30 June 2020 of $264,962 (2019: $264,962) to various landlords.
Note 34. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the Group is set out
below:
Consolidated
2020
$
2019
$
689,379
60,853
8,212
781,836
497,114
47,226
8,212
370,221
1,540,280
922,773
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Note 35. Related party transactions
Parent entity
Access Innovation Holdings Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 37.
Key management personnel
Disclosures relating to key management personnel are set out in note 34.
49
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 35. Related party transactions (continued)
Transactions with related parties
The following transactions occurred with related parties:
Payment for other expenses:
Interest paid on shareholder loans
Interest paid on convertible notes
Fair value movement on embedded derivatives to director and related entities
Consolidated
2020
$
2019
$
287,086
481,794
1,523,145
96,000
-
-
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans to/from related parties
The following balances are outstanding at the reporting date in relation to loans with related parties:
Current borrowings:
Shareholder loan
Related party loans
Convertible notes to director and related entities
Non-current borrowings:
Shareholder loan
Related party loans
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Consolidated
2020
$
2019
$
2,413,918
73,515
5,180,000
-
-
-
-
223,961
800,000
-
50
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 36. Business combinations
On 1 May 2020, the Group acquired 100% of the share capital of Alternative Communication Services LLC ('ACS') and
PostCAP LLC (collectively known as ACS Group) for the total consideration of $6,683,071 (US$4,316,596). The acquired
business contributed revenues of $2,360,493 and profit after tax of $122,768 to the Group for the period from 1 May 2020
to 30 June 2020. If the acquisition occurred on 1 July 2019, the full year contributions would have been revenues of
$14,916,893 and profit after tax of $1,034,648. The values identified in relation to the acquisition are final as at 30 June
2020.
Details of the acquisition are as follows:
Fair value
$
305,046
1,347,150
6,888
294,163
1,254,064
102,183
(942,768)
(377,476)
(332,869)
(6,888)
(593,235)
(31,352)
1,024,906
5,658,165
6,683,071
769,899
5,913,172
6,683,071
6,683,071
(305,046)
(5,913,172)
464,853
Cash and cash equivalents
Trade receivables
Right-of-use assets
Intellectual property
Customer contracts
Software
Trade payables
Deferred tax liability
Bank loans
Lease liability
Related party loans
Other loans
Net assets acquired
Goodwill
Acquisition-date fair value of the total consideration transferred
Representing:
Cash paid or payable to vendor
Deferred consideration
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
Less: cash and cash equivalents acquired
Less: deferred consideration
Net cash used
51
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 37. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 2:
Name
Access Innovation Media Pty Limited
Access Innovation IP Pty Limited
Ai-Media Employee Incentive Trust
Access Innovation Media UK Ltd
-Ai-Media UK B Ltd *
Ai Media Inc.
-Alternative Communication Services LLC
-PostCAP LLC
Ai-Media Canada Inc.**
Ai-Media NZ Limited
Ai-Media SG Pte. Ltd
Principal place of business /
Country of incorporation
Ownership interest
2019
2020
%
%
Australia
Australia
Australia
United Kingdom
United Kingdom
United States of America
United States of America
United States of America
Canada
New Zealand
Singapore
100%
100%
100%
100%
100%
100%
100%
100%
49%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
100%
100%
-
*
**
Wholly-owned subsidiary of Access Innovation Media UK Ltd
Ai Media Canada Inc is 100% consolidated into Access Innovation Holdings Limited as they share in 100% of the
variable returns and are able to use their power to affect such returns
Note 38. Earnings per share
Consolidated
2020
$
2019
$
Loss after income tax attributable to the owners of Access Innovation Holdings Limited
(12,741,152)
(3,882,599)
Weighted average number of ordinary shares used in calculating basic loss per share
96,200,980 96,200,980
Weighted average number of ordinary shares used in calculating diluted loss per share
96,200,980 96,200,980
Number
Number
Basic loss per share
Diluted loss per share
Cents
Cents
(13.24)
(13.24)
(4.04)
(4.04)
Options have been excluded in the 30 June 2020 and 30 June 2019 calculations as their inclusion would be anti-dilutive.
Note 39. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
52
Parent
2020
$
2019
$
(7,554,590)
(288,764)
(7,554,590)
(288,764)
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 39. Parent entity information (continued)
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Foreign currency translation reserve
Employee share scheme reserve
Employee share option reserve
Retained profits/(accumulated losses)
Total equity
Parent
2020
$
2019
$
29,272,638 22,881,161
30,754,782 22,887,065
17,773,240
2,358,030
17,773,240
3,627,366
8,980,033
10,282
8,272,746
386,330
(4,667,849)
8,980,031
10,282
7,347,349
35,296
2,886,741
12,981,542 19,259,699
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2020 and 30 June 2019.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2020 and 30 June 2019.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2020 and 30 June 2019.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2, except for the
following:
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
53
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 40. Reconciliation of loss after income tax to net cash used in operating activities
Loss after income tax benefit for the year
(12,741,152)
(3,882,599)
Consolidated
2020
$
2019
$
Adjustments for:
Depreciation and amortisation
Share-based payments
Non-cash items
Change in operating assets and liabilities:
Increase in trade and other receivables
Increase in contract assets
Decrease/(increase) in income tax refund due
Decrease/(increase) in deferred tax assets
Increase in trade and other payables
Increase in contract liabilities
Increase in derivative liabilities
Decrease in provision for income tax
Decrease in deferred tax liabilities
Increase in employee benefits
Increase in provisions
Net cash used in operating activities
2,316,407
1,276,431
(158,227)
1,750,423
827,324
636,205
(1,152,241)
(172,781)
495,609
(3,055,804)
4,328,158
13,956
3,017,593
-
(377,476)
398,637
36,785
(854,552)
(201,797)
(494,320)
234,450
496,595
94,095
-
(1,263,976)
-
434,716
263,800
(5,774,105)
(1,959,636)
Note 41. Changes in liabilities arising from financing activities
Consolidated
Balance at 1 July 2018
Net cash used in financing
activities
Acquisition of leases
Balance at 30 June 2019
Net cash from/(used in)
financing activities
Acquisition of leases
Changes through business
combinations (note 36)
Exchange differences
Net unnamortised issue costs’
Bank loans
$
Shareholder
loans
$
Related
Other loans
$
party loans
$
Convertible
notes
$
Lease
liability
$
Total
$
-
-
-
-
800,000
-
-
800,000
424,817
-
1,613,918
-
-
-
-
-
-
-
-
-
-
-
- 1,817,887 2,617,887
-
-
(702,797)
901,597
(702,797)
901,597
- 2,016,687 2,816,687
-
-
10,330,000
-
(779,000)
552,971
11,589,735
552,971
332,869
-
-
-
-
-
31,352
(1,846)
-
593,235
(80,826)
-
-
-
(411,058)
-
-
-
957,456
(82,672)
(411,058)
Balance at 30 June 2020
757,686 2,413,918
29,506
512,409 9,918,942 1,790,658 15,423,119
Note 42. Share-based payments
The Company’s incentive program has been in place since 2013 and underpins a broader strategy of rewarding
performance and retaining key talent.
The program is designed to assist in motivating and rewarding long term performance and teamwork towards the
realisation of shared goals: growth in Ai-Media's social impact and business success, and growth of the value of the
business and share price towards realisation of a Liquidity Event.
54
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 42. Share-based payments (continued)
Participation is by invitation from the Board and those invited can make an application under the terms of the invitation
materials and plan rules.
Each grant is subject to satisfaction of the relevant vesting conditions – including performance, service and occurrence of a
Liquidity Event (such as an IPO). Prior to a Vesting Notice being given to a Participant, the Board must have determined
that a Liquidity Event as defined in the plan rules has occurred.
No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor
voting rights.
The share-based payment expense in relation to options and rights for 2020 is $1,276,431 (2019: $827,324).
Equity-settled share option plan
Set out below are summaries of options granted:
Number of
options
2020
Weighted
average
exercise price
2020
Number of
options
2019
Weighted
average
exercise price
2019
Outstanding at the beginning of the financial year
Granted
Forfeited
9,892,250
1,095,000
(2,410,000)
$0.51
$0.62
$0.86
7,962,250
4,480,000
(2,550,000)
$0.38
$0.72
$0.45
Outstanding at the end of the financial year
8,577,250
$0.48
9,892,250
$0.51
The options outstanding at 30 June 2020 had a weighted average exercise price of $0.48 (2019: $0.51), and a weighted
average remaining contractual life of 0.18 years. In 2020, options were granted in July, August, September and October
2019. The aggregate of the estimated fair values of the options granted on those dates is $933,296. In 2019, options were
granted in November, December, February, March and April 2019.
The aggregate of the estimated fair values of the options granted on those dates is $3,225,600.
Cash-settled share-based payments
The Group issues to certain employees share appreciation rights (SARs) that require the Group to pay the intrinsic value of
the SAR to the employee at the date of exercise. The Group has recorded liabilities of $2,973,201 and $216,346 in 2020
and 2019.
Set out below are summaries of SARs granted:
Number of
rights
2020
Weighted
average
exercise price
2020
Number of
rights
2019
Weighted
average
exercise price
2019
Outstanding at the beginning of the financial year
Granted
Forfeited
1,570,000
1,460,000
(260,000)
$1.23
$1.23
$1.23
150,000
1,440,000
(20,000)
$0.72
$0.72
$0.72
Outstanding at the end of the financial year
2,770,000
$1.23
1,570,000
$0.72
55
Access Innovation Holdings Limited
Notes to the consolidated financial statements
30 June 2020
Note 43. Events after the reporting period
On 15 September 2020 the Company successfully completed its Initial Public Offering (“IPO”) on the Australian Securities
Exchange raising a total of $65,480,526 from the additional issuance of 24,548,779 shares at an issue price of $1.23 per
share ($30,194,999) and transfer of 28,687,420 shares at an issue price of $1.23 per share ($35,285,527) to new
shareholders. The capital proceeds from the additional issuance of shares will be used to pursue the Group’s strategic
global growth objectives, repay all shareholder loans and fund IPO related costs.
On 15 September 2020, all the convertible notes were converted into ordinary shares.
Due to the impact of COVID-19, since 30 June 2020, Ai Media has seen increases in content requiring captioning. While
some live events and some recorded media categories remain impacted, an accelerated shift towards virtual events and
education resulting in increased demand for captioning from educational, government and non government organisations
and corporate customers.
No other matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly affect
the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
56
Access Innovation Holdings Limited
Directors' declaration
30 June 2020
In the directors' opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June
2020 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Anthony Abrahams
Director and Chief Executive Officer
30 September 2020
57
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Grosvenor Place
225 George Street
Sydney, NSW, 2000
Australia
Phone: +61 2 9322 7000
www.deloitte.com.au
Independent Auditor’s Report to the members of
Access Innovation Holdings Limited
Opinion
We have audited the financial report of Access Innovation Holdings Limited (the “Company”) and its
subsidiaries (the “Group”), which comprises the consolidated statement of financial position as at 30
June 2020, the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the year
then ended, and notes to the financial statements, including a summary of significant accounting
policies and other explanatory information, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
financial performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
58
Key Audit Matter
Identification and valuation of
intangible assets in Business
Combinations
As disclosed in Note 36, on 1 May 2020 the
Group acquired 100% of the share capital of
Alternative Communication Services LLC and
Post CAP LLC for the total consideration of
$6,683,071 (US$4,316,596). The values
identified in relation to the acquisition are
final as at 30 June 2020.
In relation to the Business Combinations,
there is significant judgement relating to the
determination of the fair value of identifiable
intangible assets acquired.
How the scope of our audit responded to the
Key Audit Matter
Our procedures included, but were not limited to:
•
•
•
•
Evaluated the design and implementation
of the relevant controls over the
identification and valuation of intangible
assets in Business Combinations;
Evaluated the competency and objectivity
of management’s expert used to identify
and fair value the intangible assets
acquired;
Evaluated the criteria applied by
management/management’s expert when
identifying intangible assets acquired;
In conjunction with our valuation
specialists, reviewed the valuation
methodology applied when determining the
fair value of identified intangible assets;
and
• Assessed
the appropriateness of
the
Group’s disclosures of the intangible assets
acquired in the Notes to the financial
statements.
Convertible notes (derivative financial
instruments)
As disclosed in Note 19, the Group raised
$10,330,000 from entering into convertible
note subscription agreements during the
reporting period.
Accounting for convertible notes involves
complexity in assessing the appropriate
accounting treatment, including classification
as debt or equity, presentation in the
financial statements as well as
the
subsequent measurement of the individual
components of the liability based on the
terms and conditions of the agreement. This
assessment included significant judgement
linked to the probability of an initial public
offering of securities proceeding and the
share price of $1.23.
Our procedures included, but were not limited to:
• Obtained a copy of the debt host
agreements and agreed the issue date
back to management’s schedule of debt
instruments;
• Assessed the reasonableness of the market
rate applied to the debt host contract
component and validated the accuracy of
the accrued interest;
• Selected a sample of convertible notes and
agreed the date the funds were received to
managements schedule and the bank
statements;
•
In conjunction with our valuation
specialists, assessed the appropriateness
of the valuation methodology applied
including the valuation model inputs for the
embedded conversion option; and
• Assessed the completeness and
appropriateness of the disclosures in the
Notes to the financial statements.
59
Other Information
The directors are responsible for the other information. The other information comprises Directors’
Report for the year ended 30 June 2020 but does not include the financial report and our auditor’s
report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be 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.
Responsibilities of the Directors for the Financial Report
The directors of the Group are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and
for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
•
•
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or
the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
60
•
•
•
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group’s audit. We remain
solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
DELOITTE TOUCHE TOHMATSU
Joshua Tanchel
Partner
Chartered Accountants
Sydney, 30 September 2020
61
Access Innovation Holdings Limited
Shareholder information
30 June 2020
The shareholder information set out below was applicable as at 28 September 2020.
Shareholder Information required by the Australian Securities Exchange Limited (ASX) Listing Rules and not disclosed
elsewhere in the Report is set out below.
In accordance with the 4th edition of the ASX Corporate Governance Council’s Principles and Recommendations, the 2020
Corporate Governance Statement, as approved by the Board, is available on the Company’s website at: https://www.ai-
media.tv/corporate-governance/. The Corporate Governance Statement sets out the extent to which Access Innovation
Holdings Limited has followed the ASX Corporate Governance Council’s Recommendations during the 2020 financial year.
Distribution of equity securities
Analysis of number of equity security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Unmarketable Parcels
Minimum $ 500.00 parcel at $ 1.2300 per unit
On market buy-back
The Company is not currently conducting an on-market buy-back.
Number
of holders
of ordinary Number
shares
of units held % of units
274,603
378
3,979,447
1,255
541
4,320,910
575 13,203,187
63 122,599,714
-
3
3
9
85
2,812 144,377,861
100
Minimum
Parcel Size
Holders
Units
407
53
16,146
62
Access Innovation Holdings Limited
Shareholder information
30 June 2020
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
PEARLIROSE PTY LTD
DEANNE WEIR
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
ANGELA ABRAHAMS + GEOFFREY ABRAHAMS
TYLER LEE PTY LTD
UBS NOMINEES PTY LTD
WALSH & COMPANY INVESTMENTS LIMITED < CVC EMERGING COMPANIES A/C >
NATIONAL NOMINEES LIMITED
ANZU APAC
ICONIC INVESTMENTS PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CS THIRD NOMINEES PTY LIMITED < HSBC CUST NOM AU LTD 13 A/C >
ANGELA ABRAHAMS + GEOFFREY ABRAHAMS < G&A ABRAHAMS S/F A/C >
GREG SIRTES < SIRTES SUPER FUND A/C >
PHILIP A HYSSONG
BNP PARIBAS NOMS PTY LTD < DRP >
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
LEONIE JACKSON
WASHINGTON H SOUL PATTINSON AND COMPANY LIMITED
CITICORP NOMINEES PTY LIMITED
Total Remaining Holders Balance
Unquoted equity securities
There are no unquoted equity securities.
Substantial holders
Substantial holders in the Company are set out below:
PEARLIROSE PTY LTD
DEANNE WEIR
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
ANGELA ABRAHAMS + GEOFFREY ABRAHAMS
Ordinary shares
% of total
Number held
27,639,898
16,072,336
7,542,518
7,401,753
6,000,000
4,480,888
4,334,886
3,796,759
3,793,000
3,765,994
3,504,818
3,140,795
2,669,857
2,493,603
2,322,880
2,260,266
1,964,063
1,687,500
1,626,016
1,399,127
shares
issued
19.14
11.13
5.22
5.13
4.16
3.10
3.00
2.63
2.63
2.61
2.43
2.18
1.85
1.73
1.61
1.57
1.36
1.17
1.13
0.97
107,896,957
74.75
36,480,904
25.25
Ordinary shares
% of total
shares
issued
Number held
27,639,898
16,072,336
7,542,518
7,401,753
19.14
11.13
5.22
5.13
The Company also has a technical relevant interest in approximately 93,640,206 ordinary shares as a result of voluntary
escrow arrangements between the Company and relevant shareholders described in the Prospectus.
63
Access Innovation Holdings Limited
Shareholder information
30 June 2020
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
There are no other classes of equity securities.
Securities subject to voluntary escrow
Class
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Expiry date
HY21 results date
FY21 results date
FY22 results date.
FY23 results date.
Number
of shares
13,173,907
33,504,278
23,481,006
23,481,015
93,640,206
64
Corporate Directory
Access Innovation Holdings Limited
ACN 122 058 708
Board of Directors
Deanne Weir
Non-Executive Director and Chair
Anthony Abrahams
Executive Director and Chief Executive Officer
John Martin
Non-Executive Director
Alison Loat
Non-Executive Director
Jonathan Pearce
Non-Executive Director
Company Secretary
Suzanne Sanossian
Registered Office
Level 6, 277 William Street
Melbourne VIC 3000
Principal place of business
Level 1, 103 Miller Street
North Sydney NSW 2000
Postal Address
PO Box 763
North Sydney NSW 2059
Tel: +61 2 8870 7700
Email: investorrelations@ai-media.tv
Website
www.ai‑media.tv
Share Registry
Computershare Investor Services Pty Limited
452 Johnston Street
Abbotsford Vic 3067
Telephone: 1300 555 159 (Australia)
+61 3 9415 4062 (Overseas)
Website: www.computershare.com.au/investorcenter
Auditors
Deloitte Touche Tohmatsu
Grosvenor Place 225 George Street
Sydney NSW 2000
Stock Exchange
Australian Securities Exchange
Exchange Centre, 20 Bridge St, Sydney NSW 2000
ASX code
AIM
Annual report for the financial year ended
30 June 2020
Key dates
The Company will notify the ASX and investors when
the date of the Annual General Meeting has been
determined
65