APPSVILLAGE AUSTRALIA LIMITED
ABN: 50 626 544 796
ANNUAL REPORT
31 DECEMBER 2020
Contents
Corporate Directory……………………………………………………………………………………………………………………………………….1
Chairman Review……………………………………………………………………………………………………………………………………..…..2
Directors’ Report……………………………………………………………………………………………………………………………………….….4
Auditor’s Independence Declaration……………………………………………………………………………………………………..…….23
Consolidated Statement of Profit or Loss and other Comprehensive Income……………………………………………...24
Consolidated Statement of Financial Position………………………………………………………………………………………………25
Consolidated Statement of Changes in Equity……………………………………………………………………………………………..26
Consolidated Statement of Cash Flows……………………………………………………………………………………………….…….…27
Notes to the consolidated financial statements……………………………………………………………………………….….……...28
Directors’ Declaration……………………………………………………………………………………………………………….………………...53
Independent Auditor’s Report……………………………………………………………………………………………………………………..54
Additional ASX Information………………………………………………………………………………………………………………………....58
Non-Executive Director
Executive Director
Executive Director
Chairman and Non-Executive Director
Non-Executive Director
AppsVillage Australia Limited
Corporate Directory
31 December 2020
Directors
Yoav Ziv
Max Bluvband
Shahar Hajdu
Bahram Nour Omid
Andrew Whitten
Company Secretary
David Hwang
Registered Office
c/ Automic Group
Level 5
126 Philip St
Sydney NSW 2000
Australia
Auditors (Australia)
BDO Audit (WA) Pty Ltd
Level 1, 38 Station Street
Subiaco WA 6008
Australia
Legal Advisors
Automic Legal
Level 5
126 Philip St
Sydney NSW 2000
Australia
Share Registry
Automic Registry Services
Level 2
267 St Georges Terrace
Perth WA 6000
Australia
Stock Exchange Listing
Australia Securities Exchange
ASX Code: APV
1
Chairman Review
Dear Shareholders,
Welcome to the annual report of AppsVillage, the second since the Company listed on the Australian Securities Exchange in August
2019 and the first for me personally since I was appointed Non-Executive Chairman of the Company in June 2020.
Financial Year 2020 was a year of significant change not only for AppsVillage, but for all companies and markets globally. The challenges
brought about by the COVID-19 pandemic, not only significantly changed the daily lives for most people in the world, but also
significantly changed the operating environment for most businesses around the world. While the pandemic has presented many
challenges, I am pleased to report that your Company has responded quickly to these challenges and where possible has addressed
opportunities to ensure SMBs are better positioned to deal with the impacts of the COVID-19 pandemic and adapt to the changing
operating environment. We believe now more than ever that for SMBs to be successful, they must have an online strategy and we have
been working hard to ensure that AppsVillage becomes the go-to provider for SMBs looking to establish a digital presence to enable
them to better connect with their customers and grow their business.
A changing operating environment
Although 2020 COVID-19 was creating significant uncertainty on all businesses and markets worldwide, AppsVillage Australia Limited
delivered in year 2020, $992,832 in annual revenues which is 1.6X on its annual revenues compared to year 2019. `
The start of the 2020 calendar year began with the strong momentum of the previous year continuing through the first quarter with
the Company reporting revenue growth of 36% and paying customer growth of 22% versus the previous fourth quarter of 2019. While
this was a very promising start to the 2020 Financial Year, it became clear towards the end of the first quarter that the COVID-19
pandemic was creating significant uncertainty on all businesses and markets worldwide as governments attempted to respond to the
unknown impacts COVID-19 may have on economies. The country specific lock-downs which ensued, significantly affected supply
chains and logistics along with customer demand as both businesses and customers tried to come to terms with the effects of the
pandemic. Up to this point, the AppsVillage strategy had been to demonstrate the ability of the business to scale, which had been very
successful. However, with a significantly changed operating environment, the Company needed to adapt and respond to the challenges
and opportunities presented by the pandemic.
As a result, towards the end of the first quarter of 2020, the Company embarked on a cost reduction strategy with the aim to focus on
profitable and sustainable growth moving forward. As a result, paid advertising to acquire customers was reduced dramatically. The
impact of this strategy led to invoiced revenues falling by approximately 54% from Q1 2020 to Q4 2020. However, the decline in
spending for the business was far more dramatic, falling approximately 90% from Q1 2020 to Q4 2020. The decline in spending has
provided a more sustainable long term business model with the flexibility to again increase spending when market conditions show
sustained improvement.
Having said that, the company took advantage of the COVID 19 slowdown and invested a lot of resources to optimize its offering to
bring even greater value for SMBs. The hard work has accomplished a new must-have product for SMBS to overcome the challenge of
bringing traffic to its new digital assets. This new product brings AppsVillage to a much bigger market with a much higher revenue
potential for 2021.
New initiatives to support SMBs and help build their online presence.
As the Company implemented its cost reduction strategy, we also set about finding ways we could assist SMBs in dealing with the
challenges presented by the pandemic. In late March 2020, the Company announced an emergency micro loan facility to assist SMBs
with their immediate cashflow needs as credit markets around the world began to tighten. Then in early May, the Company announced
a Freemium pass for Australian SMBs to use the AppsVillage platform in order to provide them with the tools necessary to establish a
digital presence and help them connect with their customers and improve their sales potential. Both of these initiatives were
implemented to help SMBs respond to some of the immediate challenges they faced.
However, what became very clear as the effects of the pandemic continued to disrupt normal day to day operating conditions for
businesses, was that Companies more than ever needed to establish a digital presence and an online strategy in order to better connect
with customers. The pandemic has accelerated the shift of businesses and consumers to digital commerce and it is here where
AppsVillage seeks to be the go-to provider for SMBs looking to establish themselves and compete in a digital world.
2
JARVIS Launch
In June 2020 the Company launched JARVIS, an AI-based Facebook advertising campaign management agent for SMBs. JARVIS was
developed to serve as backend of a virtual marketing manager (see AdRabbit below) to enable SMBs to build and manage intelligent
online advertising and promotion campaigns at a fraction of the cost of traditional human marketing managers which some SMBs may
not be in a position to afford. Since its launch, the results of JARVIS have been shown to significantly improve Facebook advertising
campaigns across a number of sectors, in particular, retail, beauty and fitness. The Company has continued to work with SMBs to
expand and improve the capabilities of JARVIS to deliver better results for customers, leading to a significantly improved customer ROI.
JARVIS has been shown to significantly increase the number of new leads being generated for SMBs. Some Facebook campaigns have
produced a 300% increase in new leads versus leads generated through a standard approach. The strong early results and effectiveness
of JARVIS increased the Company’s focus on making sure that JARVIS would be available to as many SMBs as possible. In October,
AppsVillage signed an agreement with global ERP provider Priority Software, which has made JARVIS available to over 75,000 customers
across 40 countries. Priority Software’s selection of JARVIS provides strong validation of its capabilities and is in line with the Company’s
strategy to engage with a broad range of customers and third-party service providers to improve its reach with SMBs globally.
Following the agreements and partnerships with Facebook and Priority Software, AppsVillage signed further agreements with both
TikTok and Google Ads in early December to launch JARVIS on their platforms, enabling SMBs to leverage TikTok’s social power and
Google Ads online reach to promote their business. JARVIS for both TikTok and Google Ads provides an optimized solution for SMBs to
quickly and easily create and manage intelligent online advertising and promotion campaigns in a matter of minutes. TikTok was the
world’s most downloaded app in August 2020 and at the time had over 500 million users worldwide, providing a tremendous
opportunity for SMBs to improve their reach with customers.
The Company has had great success in making JARVIS available to SMBs on some of the world’s largest platforms, but importantly the
JARVIS system has the benefit for SMBs of being able optimize allocation between the Facebook, Google and TikTok Platforms to
achieve greater efficiency and higher return on their marketing Ad spend for each SMB that advertises on the AppsVillage platform.
AppsVillage is able to keep SMBs at the top of social media advertisement trends while at the same time being able to provide significant
savings in costs and time for SMBs. The platform does the rethinking and auto-evaluates which social media platform and advertising
platform is most suitable for their brand.
AdRabbit Launch Coming
The Company continued to innovate throughout 2020 with the aim to help SMBs establish a digital presence. Just prior to the end of
calendar 2020, AppsVillage announced the launch of AdRabbit in January 2021. AdRabbit is an affordable digital advertising and
marketing platform that allows SMBs to design, build and launch advertising campaigns easily on social media platforms and top tier
networks such as Facebook, Google and TikTok, directly from their mobile.
AdRabbit leverages the JARVIS AI-based advertising engine to ensure that advertising campaigns yield maximum customer reach and
user conversion results. The Company is very excited by the potential of AdRabbit to not only further improve SMBs advertising
campaigns, but to also improve their reach and conversion results with customers.
Outlook - positioned for growth in 2021
AppsVillage went through a significant transformation in calendar 2020 in response to the challenges of the COVID-19 pandemic. As a
result, the Company reduced its costs substantially and is now focused on profitable and sustainable growth. New initiatives like JARVIS
and AdRabbit have been designed to assist SMBs with the structural shift taking place to establish an online presence to promote their
businesses. These initiatives will be key drivers of growth and profitability for AppsVillage as we commence the 2021 Financial Year.
The Company made a number of management and executive changes throughout 2020 designed to improve the Company’s ability to
execute on its strategic goals and milestones and will continue to make further appointments as the business continues to grow.
AppsVillage will continue to innovate in order to become the go-to provider for SMBs looking to build their digital strategy. The
Company is committed to creating shareholder value and believe we are well placed to deliver on our operational and commercial
targets in 2021.
3
Yours sincerely
Bahram Nour-Omid
Chairman
AppsVillage Australia Limited
Directors’ Report
31 December 2020
The Directors present their report, together with the financial statements of AppsVillage Australia Limited (“the Company” or
“AppsVillage”) and its controlled entity (“the Group”) for the financial year ended 31 December 2020.
Directors
Name
Yoav Ziv
Max Bluvband
Shahar Hajdu
Bahram Nour Omid
Andrew Whitten
Status
Non-Executive Director
Executive Director and Chief Executive
Officer
Executive Director and Chief Technology
Officer since Company’s inception
Chairman and Non-Executive Director
Non-Executive Director and Company
Secretary
Appointed
23 May 2019
21 May 2019
Resigned
-
-
3 October 2019
-
10 June 2020
10 June 2020
Leanne Graham
Non-Executive Director
19 May 2019
-
Company
From
Secretary on 12 March
2021-
10 June 2020
Jonathan Hart
Non-Executive Director and Company
Secretary
1 March 2019
10 June 2020
Principal Activities
AppsVillage Australia Limited is a software-as-a-service (‘SaaS”) company that commenced activities in 2016.
AppsVillage provides an easy and inexpensive SaaS solution that allows small-to-medium businesses to create and manage their own
mobile application as a means of connecting with their customers and growing their business.
AppsVillage’s technology has automated the design, development, maintenance and marketing of mobile apps, allowing any business
to build, preview and launch their own application without have any code writing or digital marketing knowledge.
Dividends
No dividends have been paid or declared by the Group since the beginning of the financial year. No dividends were paid for the previous
financial year.
Review of Operations
Unless otherwise stated, all figures in this report are in the Company’s presentation currency US$.
Although in 2020 COVID-19 has created significant uncertainty on all businesses and markets worldwide, AppsVillage Australia Limited
delivered in year 2020, $992,832 in annual revenues which is 1.6X on its annual revenues compared to year 2019.
The start of the 2020 calendar year began with the strong momentum of the previous year continuing through the first quarter with
the Company reporting revenue growth of 36% and paying customer growth of 22% versus the previous fourth quarter of 2019. While
this was a very promising start to the 2020 Financial Year, it became clear towards the end of the first quarter that the COVID-19
pandemic was creating significant uncertainty on all businesses and markets worldwide as governments attempted to respond to the
unknown impacts COVID-19 may have on economies. The country specific lock-downs which ensued, significantly affected supply
4
chains and logistics along with customer demand as both businesses and customers tried to come to terms with the effects of the
pandemic. Up to this point, the AppsVillage strategy had been to demonstrate the ability of the business to scale, which had been very
successful. However, with a significantly changed operating environment, the Company needed to adapt and respond to the challenges
and opportunities presented by the pandemic.
Considering the mentioned above factors, the company has decided to invest a lot of resources to optimize the product in order to
ensure a higher value to its customers and therefore they would be less inclined to turn off their subscriptions. During this product
optimization phase, the company has also substantially reduced its spend on acquiring new customers.
AppsVillage Australia Limited
Directors’ Report (Continued)
31 December 2020
As a result, towards the end of the first quarter of 2020, the Company embarked on a cost reduction strategy with the aim to focus on
profitable and sustainable growth moving forward. The impact of this strategy led to invoiced revenues falling by approximately 54%
from Q1 2020 to Q4 2020. However, the decline in spending for the business was far more dramatic, falling approximately 90% from
Q1 2020 to Q4 2020. The decline in spending has provided a more sustainable long term business model with the flexibility to again
increase spending when market conditions show sustained improvement.
The amount of SMBs subscribed to the platform as of December 31, 2020 was 3,879 compared to 6,525 in December 31, 2019.
AppsVillage Australia Limited had reduced its losses for the year ended 31 December 2020 to $3,368,272 (2019: $4,856,894). The 2020
loss included a non-cash share-based payment of $249,060 (2019: $289,930).
The net assets of the Group are $163,366, compared to $1,661,832 at 31 December 2019.
As at 31 December 2020, the Group’s cash and cash equivalents are $818,049 compared to $2,662,198 at 31 December 2019.
Highlights during the year
Shares Issuance
In August 2020 the Company issued 22,145,906 ordinary shares at share price of 8 cents US (11.2c AUD). The funds were raised both
from new and existing investors.
JARVIS
In June 2020, the Company launched JARVIS, an AI-based Facebook advertising campaign management agent for SMBs. JARVIS was
developed to serve as a virtual marketing manager to enable SMBs to build and manage intelligent online advertising and promotion
campaigns at a fraction of the cost of traditional human marketing managers which some SMBs may not be in a position to afford.
Since its launch, the results of JARVIS have been shown to significantly improve Facebook advertising campaigns across several sectors
in particular - retail, beauty and fitness. The Company has continued to work with SMBs to expand and improve the capabilities of
JARVIS to deliver better results for customers, leading to a significantly improved customer ROI. JARVIS has been shown to significantly
increase the number of new leads being generated for SMBs. Some Facebook campaigns have produced a 300% increase in new leads
versus leads generated through a standard approach. The strong early results and effectiveness of JARVIS increased the Company’s
focus on making sure that JARVIS would be available to as many SMBs as possible.
AdRabbit
The Company continued to innovate throughout 2020 with the aim to help SMBs establish a digital presence. Just prior to the end of
calendar 2020, AppsVillage announced the launch of AdRabbit in January 2021. AdRabbit is an affordable digital advertising and
marketing platform that allows SMBs to design, build and launch advertising campaigns instantly on social media platforms and top
tier networks such as Facebook, Google and TikTok, directly from their mobile. AdRabbit leverages the JARVIS AI-based advertising
engine to ensure that advertising campaigns yield maximum customer reach and user conversion results. The Company is very excited
by the potential of AdRabbit to not only further improve SMBs advertising campaigns, but to also improve their reach and conversion
results with customers.
Strategic Partnerships
In October, AppsVillage signed an agreement with global ERP provider Priority Software, which has made Jarvis available to over 75,000
customers across 40 countries. Priority Software’s selection of AdRabbit provides strong validation of its capabilities and is in line with
the Company’s strategy to engage with a broad range of customers and third-party service providers to improve its reach with SMBs
globally. Following the agreements and partnerships with Facebook and Priority Software, AppsVillage signed further agreements with
both TikTok and Google Ads in early December to launch JARVIS on their platforms, enabling SMBs to leverage TikTok’s social power
and Google Ads online reach to promote their business. JARVIS for both TikTok and Google Ads provides an optimized solution for
SMBs to quickly and easily create and manage intelligent online advertising and promotion campaigns in a matter of minutes. TikTok
5
was the world’s most downloaded app in August 2020 and at the time had over 500 million users worldwide, providing a tremendous
opportunity for SMBs to improve their reach with customers.
Corporate Director Changes
On June 10, 2020 Jonathan Hart and Leanne Graham resigned as non-executive company directors.
Bahram Nor Omid was appointed on June 10, 2020 as non-executive director and Chairman of the board.
On March 12, 2021 David Hwang from the Automic Group was appointed as Company Secretary and Andrew Whitten resigned from
that role.
On March 12, 2021 David Hwang from the Automic company has been appointed as Company Secretary.
AppsVillage Australia Limited
Directors’ Report (Continued)
31 December 2020
Events after the reporting period
Director's investments
The company has successfully completed the placement for share raising $155K USD.
Capital Raising
The company has successfully completed a placement of institutional and private investors of $465K USD ($600K AUD) before cost.
The company has signed a non-binding term sheet with several investors for raising additional funds in the amount of $2,113K USD.
On March 12, 2021 Andrew Whitten has resigned as Company's Secretary and David Hwang from the Automic company has been
appointed as Company Secretary.
There were no other matters or circumstances have arisen since the end of the financial year which significantly affected or may
significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial
years.
AppsVillage Australia Limited
Directors’ Report (Continued)
31 December 2020
Information on Directors
Yoav Ziv
Qualifications
Experience
Non-Executive Director appointed on 23 May 2019
Yoav holds an MBA from Ben Gurion University, Israel, and is a Computer Science and Economics
graduate from Tel Aviv University, Israel.
Yoav Ziv is senior vice president and the General Manager of AT&T consumer,
media and advertising for Amdocs Limited (Amdocs), a leading software and
services provider to communications and media companies. Yoav resides in New
York City. From 2015 to 2017, Yoav was the global head of the quality engineering
services business unit within Amdocs. From 2013 to 2015, Yoav was the customer
business executive responsible for the Amdocs business at a tier 1 pay T provider
in New York.
From 2010 to 2013, Yoav was VP of marketing and strategic services at Realization,
a Silicon Valley technology and consulting firm specializing in project
management technologies and practices. Prior to 2010, Yoav filled numerous roles
in Amdocs in development, product management, sales, presales and operations
management.
250,000 unlisted options expiring 27 Aug 2021
40,000 ordinary shares
6
Interest in Shares and
Options at the date of
this report
Directorships held
in
other listed entities (last
3 years)
Nil
Max Bluvband
Executive Director and Chief Executive Officer appointed on 21 May 2019
Qualifications
Experience
Interest in Shares and
Options at the date of
this report
Directorships held in
other
listed entities
(last 3 years)
Bachelor of Science in Computer Science from Netanya Academic College.
Max Bluvband is the Chief Executive Officer and co-founder of AppsVillage. Max is an entrepreneur with
more than 18 years of experience and has founded multiple technology and mobile-focused companies.
In these companies, Max has led fundraising rounds from angel investors and top-tier venture capitalists,
such as Sequoia Capital, totaling more than US$15 million (approximately A$20.2 million) in funding. Max
has also led merger and acquisition activity, sales and other strategic initiatives in his companies. Prior to
co-founding AppsVillage, Max founded and served as the Chief Executive Officer of Silent Communication
Ltd., a company that provides device and network agnostic mobile client solutions. He led all activities with
Silent Communication Ltd., including multi-million dollar transactions with customers such as T-Mobile US
(NASDAQ:TMUS), Sony (TYO:6758), Metro PCS, Alltel, Alcatel Lucent (Euronext: ALU), France Telecom
(Euronext: ORA), A1, Ericsson (NASDAQ:ERIC), Sony Ericsson, Telecom Italia (BIT: TIT), MTS (MCX: MTSS)
and Safaricom, among others.
3,092,506 ordinary shares
1,108,457 unlisted options expiring on or before 5 years from the date of quotation (August 27, 2019) on
ASX.
9,187,500 performance options
Nil
AppsVillage Australia Limited
Directors’ Report (Continued)
31 December 2020
Information on Directors (continued)
Shahar Hajdu
Director appointed 3 October 2019 & Chief Technology Officer since Company’s inception
Qualifications
Experience
Interest in Shares and
Options at the date of
this report
Directorships held in
listed entities
other
(last 3 years)
Bachelor of Science in Computer Science cum laude from The Technion – Israel Institute of
Technology.
Shahar Hajdu leads the research and development of AppsVillage’s SaaS platform. Over the last 26
years, Shahar has gained extensive experience in software development, in industries ranging from
communications to multimedia. Prior to co-founding AppsVillage, Shahar co-founded and served as
the Chief Technology Officer of Silent Communication Ltd., a company that provides device and
network agnostic mobile client solutions, working with mobile network operators, device
manufacturers, and value-added service providers to rapidly expand deployment and revenue
opportunities for mobile applications and services. There, Shahar lead the technology vision across
Silent Communication Ltd’s product line and worked with top-tier customer companies including
TMobile US (NASDAQ: TMUS), Sony (TYO: 6758), MetroPCS, Alltel, Alcatel Lucent (Euronext: ALU),
France Telecom (Euronext: ORA), A1, Ericsson (NASDAQ: ERIC), Sony Ericsson, Telecom Italia (BIT:
TIT), MTS (MCX: MTSS) and Safaricom among others.
Shahar was also a senior software developer and senior engineer at Elbit Systems Ltd. (TLV: ESLT), an
international high technology company engaged in a wide range of defence, homeland security, and
commercial programs.
3,092,506 ordinary shares
1,108,457 unlisted options expiring on or before 5 years from the date of quotation on ASX
9,187,500 performance options
Nil
7
Bahram Nour-Omid
Non-Executive Director and Chairman of the board appointed on 10 June 2020
Qualifications
Experience
Dr. Nour-Omid earned a B.S. from the University of London’s Imperial College, and an M.S. in
Structural Engineering, M.A. in Mathematics and Ph.D. in Computer Simulation from the University
of California, Berkeley.
Dr. Nour-Omid has extensive executive leadership experience in the high-tech arena specifically with
Enterprise Software Solutions companies such as CRM, Supply Chain Management Systems, and E-
Commerce. Dr. Nour-Omid has been integrally involved in various aspects of running high-tech
businesses including product design, engineering, marketing as well as operations both domestic and
international. He began his career as a consulting scientist at the Lockheed Palo Alto Research
Laboratory, in 1982, where he conducted and directed research in the field of Scientific and high-
performance computing. In 1990, Dr. Nour-Omid co-founded Scopus Technology where he was the
Chief Technology Officer and served as a member of the Board of Directors of the company. Nour-
Omid was responsible for all the product development activities at Scopus while helping the company
maintain uninterrupted profitability from its inception, through a highly successful IPO in 1995. In
1998 the company merged into Siebel Systems, Inc. and ultimately acquired by Oracle Corporation.
In 1999 Dr. Nour-Omid Founded StudioXchange, Inc., a provider of production site, labor and
equipment procurement services for the entertainment industry and served as Chairman and Chief
Executive Officer. In 2000 StudioXchange was merged into iFilm and later acquired by MTV Networks.
In 2000 Dr. Nour-Omid became a founding member of Shelter Capital Partners, LLC., a private
Venture Capital firm with investments in Information Technology companies. While at Shelter, he
lead the investments and served on the board of; u-Nav microelectronics, a GPS solution provider
for the mobile location-based market, acquired by Atheros Communications (Nasdaq: ATHR now part
of Qualcomm); Kryptiq, a provider of secure clinical messaging and patient portal technologies,
acquired by SureScript, LLC; Integrated Decision Systems (IDS), an enterprise software solution for
Managed Accounts Industry, acquired by CheckFree (Nasdaq: CKFR, now part of Fisrv); Mobileum,
Inc., a provider of software solutions for the global wireless carrier market acquired by Audax Private
Equity.
AppsVillage Australia Limited
Directors’ Report (Continued)
31 December 2020
Information on Directors (continued)
In 2012 Dr. Nour-Omid assumed the Chairman and CEO role at Fuel Cycle, Inc. one of the portfolio
companies of Shelter Capital, bringing the company back to growth and profitability to create a
leading market research cloud that
combines both qualitative and quantitative data to power real-time business decisions, where he
remains as the executive chairman. In 2016 Dr. Nour-Omid became a founding member of Scopus
Ventures a founder-focused early-stage venture capital firm with investments in the US and Israel.
He is currently serving on the boards of AppsVillage, a provider of SaaS marketing solutions for SMBs;
Aperio Systems, Inc., a continuous monitoring of industrial control systems; and Emperical, a
provider of AI solutions for effective enterprise recruitment.
Interest in Shares and
Options at the date of
this report
Directorships held in
other
listed entities
(last 3 years)
2,624,669 Ordinary Shares
None
Andrew Whitten
Non-Executive Director and Company Secretary appointed on 10 June 2020. Resigned as as Company
secretary on 12 March 2021.
Bachelor of Arts (Economics) University of New South Wales, Master of Laws and Legal Practice,
University of Technology Sydney. Graduate Diploma in Applied Corporate Governance, Governance
Institute
Qualifications
Experience
Mr Whitten, who is based in Sydney, is a trained corporate lawyer, entrepreneur and investor.
Andrew has worked with many companies and has significant expertise across a wide range of
industry sectors, with an emphasis on technology
8
Interest in Shares and
Options at the date of
this report
Directorships held in
other
listed entities
(last 3 years)
Jonathan Hart
Qualifications
Experience
Interest in Shares
and Options at the
date of this report
Directorships held in
other listed entities
(last 3 years)
Leanne Graham
Qualifications
Experience
Interest
in Shares
and Options at the
date of this report
Directorships held
listed
in
entities
3
years)
other
(last
100,000 Ordinary Shares
Mr Whitten is a Non-executive Director of TinyBeans Group Limited (ASX: TNY)
since May 2020.
Independent Non-Executive Director and Company Secretary resigned on 10 June 2020.
Bachelor of Law and Commerce
Jonathan is currently a director of Emerge Gaming Limited (ASX:EM1), Company Secretary
or Hera-Med Limited and Mayur Resources Limited (ASX:MRL). He holds a Bachelor of Laws and
Commerce and has provided corporate advisory services and held several board positions
on various ASX listed companies over the years. His experience includes initial public offerings.
on ASX (AIM and JSE), reverse takeovers, due diligence investigations, general corporate and
commercial drafting, public and private mergers and acquisitions, general corporate advice
in relation to capital raisings, Corporations Act and ASX compliance.
250,000 unlisted options expiring 27 August 2021
50,000 ordinary shares
Emerge Gaming Limited (ASX:EM1)
Non-Executive Director resigned on 10 June 2020
N/A
With over 30 years in the software sector, Leanne Graham has assisted technology
companies with her broad experience, including SaaS expertise. Leanne is one of New
Zealand’s few female information technology entrepreneurs and a past
Chief Executive Officer of GeoOp Limited (NZX: GEO) where she served between February
2013 and January 2015.
Leanne is currently the Chair of VerifyUnion Ltd (New Zealand) and VPC Limited (ASX: VPC),
she sits on the Board of Directors of BidEnergy Limited (ASX: BID) and archTIS Limited (ASX:
AR9). Leanne is an Advisory Board Member of Anfix Software S.L. and Nibo Softwares e
Cursos SA (Brazil).
Leanne previously co-founded Enprise Software Group Limited, where she served as Group
Sales & Marketing Director and global Business General Manager. She was also the Global
Head of Sales and New Zealand Country Manager for Xero Limited, designing and executing
the company’s global sales and channel strategy.
250,000 unlisted options expiring 27 August 2021
50,000 ordinary shares
BidEnergy Limited (ASX: BID)
archTIS Limited (ASX: AR9)
Independent Non-Executive Director and Company Secretary resigned on 10 June 2020.
AppsVillage Australia Limited
Directors’ Report (Continued)
31 December 2020
Information on Directors (continued)
9
AppsVillage Australia Limited
Directors’ Report (Continued)
31 December 2020
Information on Directors (continued)
Meetings of Directors
Director
Status
Yoav Ziv
Max Bluvband
Shahar Hajdu
Appointed May 2019
Appointed May 2019
Appointed October
2019
Appointed June 2020
Nour
Bahram
Omid
Andrew Whitten Appointed June 2020
Leanne Graham
Jonathan Hart
Resigned June 2020
Resigned June 2020
Directors’ Meetings
Number
eligible to
attend
8
8
8
6
6
2
2
Number
attended
8
8
8
6
6
2
2
Audit
Committee
Number
eligible
attend
-
-
-
to
-
-
-
-
and
Risk
Remuneration Committee
Number
attended
-
-
-
-
-
-
-
Number
eligible
attend
-
-
-
-
-
-
-
Number
attended
to
-
-
-
-
-
-
-
Committee membership
The Board has chosen not to establish an Audit and Risk Committee and a Remuneration committee. The Board considers that due to
the relatively small size of the Company, the interests of the Company are best served by the full Board completing the functions
normally delegated to an audit committee.
The processes that the Board employs to independently verify and safeguard the integrity of its corporate reporting include:
•
•
•
reviewing and adopting the Company’s quarterly, half year and annual report prior to release to shareholders and the ASX;
overseeing the Company’s relationship with the external auditor, the external audit function generally and ensuring the
external audit engagement partner rotation is in accordance with the Corporations Code.
overseeing the adequacy of the Company’s financial risk management and internal controls.
Options
During the financial year, no options were exercised.
As at the date of this report, and the reporting date, there were 7,182,822 options on issue (2019: 37,049,314. Refer to Note 16) of the
financial statements for details on options issued during the financial year.
The holders of these options do not have any rights under the options to participate in any share issue of the Company or any other
entity.
Proceedings on Behalf of 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
Group, or to intervene in any proceedings to which the Group is a party, for the purpose of taking responsibility on behalf of the Group
for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Group with leave of the Court under section 237 of the
Corporations Act 2001.
Indemnification and Insurance of directors and officers
The Group has indemnified the Directors and Executives of the Group 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.
10
During the financial year, the Group paid a premium in respect of a contract to ensure 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.
Environmental Regulations
The Directors are not aware of any significant environmental issues affecting the Group or its compliance with relevant environmental
issues affecting the Group or its compliance with relevant environmental agencies or regulatory authorities.
Likely Developments and Expected Results of Operations
Although 2020 COVID-19 was creating significant uncertainty on all businesses and markets worldwide, AppsVillage Australia Limited
delivered in year 2020, $992,832 in annual revenues which is 1.6X on its annual revenues compared to year 2019. `
Having said that, the Company took advantage of the COVID 19 slowdown and invested a lot of resources to optimize its offering to
bring on of the most important tools for SMBs growth. The hard work has accomplished a new must-have product called “AdRabbit”
for SMBS (AdRabbit) to overcome the challenge of bringing traffic to the SMBs new digital assets. This new product brings AppsVillage
to a much bigger market with a much higher revenue potential for 2021.
$992,832
$611,042
USD
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$373,406
$200,000
$-
Y2018
Y2019
Y2020
11
AppsVillage Australia Limited
Directors’ Report (Continued)
31 December 2020
Indemnification of Auditors
To the extent that is permitted by law, the Company has agreed to indemnity its auditors, BDO Audit (WA) Pty Ltd, as part of the terms
of the agreement against claims by third parties arising from their report on the financial report. No payment has been made to
indemnify BDO Audit (WA) Pty Ltd during or since the financial year.
Non-audit Services
The Company’s auditor, BDO Audit (WA) Pty Ltd, has provided US$0 (2019:US$20,160) in non-audit service and its network firm has
provided US$4,500 in non-audit services to the Group during the year ended 31 December 2020 (2019: US$4,000).
Full details of their remuneration can be found within the financial statements at Note 6.
In the event that non-audit services are provided by BDO Audit (WA) Pty Ltd, the Board has established certain procedures to ensure
that the provision of non-audit services are compatible with, and do not compromise the auditor independence requirements of the
Corporations Act 2001. These procedures include:
●
non-audit services will be subject to the corporate governance procedures adopted by the Company and will be reviewed by the
Board to ensure they do not impact the integrity and objectivity of the auditor; and
●
ensuring non-audit services do not involve reviewing or auditing the auditor’s own work, acting in a management or decision-
making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.
Auditor’s Independence Declaration
The auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 23.
This report is made in accordance with a resolution of Directors.
12
AppsVillage Australia Limited
Directors’ Report (Continued)
31 December 2020
Remuneration Report - Audited
The remuneration report for the year ended 31 December 2020 outlines the remuneration arrangements of the Group in accordance
with the requirements of the Corporations Act 2001 (Cth), as amended (Act) and its regulations. The information has been audited as
required by section 308(3C) of the Act.
The remuneration report is presented under the following sections:
1. Key management personnel covered in this report
2. Remuneration governance
3. Executive remuneration arrangements
4. Non-executive director fee arrangements
5. Details of remuneration
6. Additional disclosures relating to equity instruments
7.
Loans to key management personnel (KMP) and their related parties
8. Other transactions and balances with KMP and their related parties
9. Voting of Shareholdings at last year’s annual general meeting
1. Key management personnel covered in this report
Key Management Personnel (KMP) have authority and responsibility for planning, directing and controlling the major activities of the
Group. KMP comprise the directors of the Company and identified key management personnel. Compensation levels for KMP are
competitively set to attract and retain appropriately qualified and experienced directors and executives. The Board may seek
independent advice on the appropriateness of compensation packages, given trends in comparable companies both locally and
internationally and the objectives of the Group’s compensation strategy.
Key management personnel covered in this report are as follows:
Name
Status
Appointed
Resigned
Yoav Ziv
Max Bluvband
Shahar Hajdu
Bahram Nour Omid
Andrew Whitten
Leanne Graham
Jonathan Hart
Non-Executive Director
Executive Director and Chief Executive Officer since
Company’s inception
Executive Director and Chief Technology Officer
since Company’s inception
Non-Executive and Chairman
Non-Executive Director & Company Secretary
Non-Executive Director
Non-Executive Director
23 May 2019
21 May 2019
3 October 2019
10 June 2020
10 June 2020
19 May 2019
1 March 2019
-
-
-
-
-
10 June 2020
10 June 2020
Other key management personnel
Gidi Krupnik
Moshe Cohen
Chief Financial Officer
Vice President of Business Development
1 January 2019
1 June 2018
-
-
2. Remuneration governance
The Directors believe the Company is not currently of a size nor are its affairs of such complexity as to warrant the establishment of a
separate remuneration committee. Accordingly, all matters are considered by the full Board of Directors, in accordance with a
Remuneration Committee Charter.
At this stage the Board does not consider the Group’s earnings- or earnings-related measures to be an appropriate key performance
indicator (KPI). In considering the relationship between the Group’s remuneration policy and the consequences for the Company’s
shareholder wealth, changes in share price are analysed as well as measures such as successful completion of business development
and corporate activities.
During the financial year, the Company did not engage any remuneration consultants.
13
AppsVillage Australia Limited
Directors’ Report,
Remuneration Report - Audited (Continued)
3.
Executive remuneration arrangements
The compensation structures are designed to attract suitably qualified candidates, reward the achievement of strategic objectives, and
achieve the broader outcome of creation of value for shareholders. Compensation packages may include a mix of fixed compensation,
equity-based compensation, as well as employer contributions to social benefits/superannuation funds. There is no performance-based
remuneration.
The compensation of the executives is subject to the approval by the Board on a case-by-case basis.
Mr Max Bluvband
Mr Max Bluvband is the Co-Founder, Executive Director/ Chief Executive Officer (CEO). In July 2016, AppsVillage Israel entered into an
executive agreement with Max Bluvband pursuant to which Mr Bluvband was appointed as the CEO.
A summary of the agreement is as follows:
(a)
(b)
(c)
(Term) Mr Bluvband’s service commenced on 1 July 2016 and continues in full force and effect until terminated in accordance
with the agreement.
(Salary): Mr Bluvband is paid a gross monthly salary of NIS 37,800 and superannuation and social benefits of NIS 7,900
(approximately US$13,000 based on prevailing exchange rates) per month pursuant to the agreement.
(Events of Termination): the agreement is terminable by either party by 90 days’ prior written notice but may be terminated
immediately by AppsVillage Israel where Mr Bluvband commits a material breach of the agreement, including continued no-
performance of his duties under the agreement.
The agreement is prepared in accordance with, and is subject to, the laws of Israel and contains terms and conditions which
are considered standard for an agreement of its nature, including those in relation to confidentiality, non-competition and
non-solicitation, confirmation of proprietary rights and other standard clauses.
Mr Shahar Hajdu
Mr Shahar Hajdu is the Co-Founder, Executive Director/Chief Technology Officer (CTO). In July 2016, AppsVillage Israel entered into
an agreement with Mr Shahar Hajdu pursuant to which Mr Hajdu was appointed as the CTO.
A summary of the agreement is as follows:
(a)
(b)
(c)
(Term) Mr Hajdu’s service commenced on 1 July 2016 and continues in full force and effect until terminated in accordance
with the agreement.
(Salary): Mr Hajdu is paid a gross monthly salary of NIS 37,800 and superannuation and social benefits of NIS 7,300
(approximately US$13,000 based on prevailing exchange rates) per month pursuant to the agreement.
(Events of Termination): the agreement is terminable by either party by 90 days’ prior written notice but may be terminated
immediately by AppsVillage Israel where Mr Hajdu commits a material breach of the agreement, including continued no-
performance of his duties under the agreement.
The agreement is prepared in accordance with, and is subject to, the laws of Israel and contains terms and conditions which
are considered standard for an agreement of its nature, including those in relation to confidentiality, non-competition and
non-solicitation, confirmation of proprietary rights and other standard clauses.
Mr Moshe Cohen
Mr Moshe Cohen is Vice President of Business Development. In June 2018, AppsVillage Israel entered into an agreement with Mr
Moshe Cohen pursuant to which Mr Cohen was appointed as the Vice President of Business Development.
A summary of the agreement is as follows:
(a)
(b)
(c)
(Term) Mr Cohen’s service commenced on 1 June 2018 and continues in full force and effect until terminated in accordance
with the agreement.
(Salary): Mr Cohen is paid a monthly fee of US$ 6,000 per month pursuant to the agreement.
(Events of Termination): the agreement is terminable by either party by 90 days’ prior written notice but may be terminated
immediately by AppsVillage Israel where Mr Cohen commits a material breach of the agreement, including continued no-
performance of his duties under the agreement.
14
The agreement is prepared in accordance with, and is subject to, the laws of Israel and contains terms and conditions which are
considered standard for an agreement of its nature, including those in relation to confidentiality, non-competition and non-solicitation,
confirmation of proprietary rights and other standard clauses.
Mr Gidi Krupnik
Mr Gidi Krupnik is Chief Financial Officer. In January 2019, AppsVillage Israel entered into an agreement with Mr Gidi Krupnik pursuant
to which Mr Krupnik was appointed as the Chief Financial Officer.
A summary of the agreement is as follows:
(a)
(Term) Mr Krupnik’s service commenced on January 1, 2019 and continues in full force and effect until terminated in
accordance with the agreement.
(b) (Salary): Mr Krupnik is paid an hourly fee of US$ 157 per hour pursuant to the agreement.
(c)
(Events of Termination): the agreement is terminable by either party by 30 days’ prior written notice but may be terminated
immediately by AppsVillage Israel where Mr Krupnik commits a material breach of the agreement, including continued no-
performance of his duties under the agreement.
The agreement is prepared in accordance with, and is subject to, the laws of Israel and contains terms and conditions which are
considered standard for an agreement of its nature, including those in relation to confidentiality, non-competition and non-solicitation,
confirmation of proprietary rights and other standard clauses.
4. Non-executive director fee arrangements
The Board policy is to remunerate non-executive directors at a level to comparable companies for time, commitment, and
responsibilities. Non-executive directors may receive performance related compensation. Directors’ fees cover all main Board activities
and membership of any committee. The Board has no established retirement or redundancy schemes in relation to non-executive
directors.
The maximum aggregate amount of fees that can be paid to non-executive directors is presently limited to an aggregate of
approximately $342,000 (A$500,000) per annum and any increase is subject to approval by shareholders. Fees for non-executive
directors are not linked to the performance of the Company. However, to align directors’ interests with shareholder interests, directors
are encouraged to hold shares in the Company.
Total fees for non-executive directors for the financial year were $144,407 (A$212,400) and cover main Board activities only. Non-
executive directors may receive additional remuneration for other services provided to the Group. All non-executive directors enter
into a service agreement with the Company in the form of a letter of appointment. The letter summarises the board policies and terms,
including remuneration, relevant to the office of director.
15
AppsVillage Australia Limited
Directors’ Report,
Remuneration Report - Audited (Continued)
5. Details of Remuneration
31 December 2020
Short
term
salary, fees &
commissions
Superannuati
on&
benefits
social
Non-
monetary
benefits
Bonus
Share-based
payments
Total
Performance
based
remuneration
US$
US$
US$
US$
US$
US$
%
Executive Directors:
Max Bluvband
Shahar Hajdu
Non-Executive Directors:
Yoav Ziv
Bahram Nour Omid (i)
Andrew Whitten (i)
Leanne Graham (ii)
Jonathan Hart (ii)
Other KMP:
Moshe Cohen
Gidi Krupnik
Total
131,769
131,769
41,330
42,000
28,931
13,777
18,369
72,204
73,728
553,877
35,037
35,420
31,109
26,699
-
-
-
-
-
-
-
-
-
-
-
-
-
-
70,457
57,808
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
197,915
193,888
41,330
42,000
28,931
13,777
18,369
-
-
-
-
-
-
72,204
73,728
682,142
-
-
-
(i)
(ii)
.
Mr Nour Omid appointed on 10 June 2020, Mr Whitten appointed on 10 June 2020.
Mrs Graham resigned on 10 June 2020, Mr Hart resigned on 10 June 2020.
They are not considered to be a KMP from these dates.
16
AppsVillage Australia Limited
Directors’ Report,
Remuneration Report - Audited (Continued)
31 December 2019
Short
term
salary, fees &
commissions
Superannuati
on & social
benefits
Non-
monetary
benefits
Bonus
Share-based
payments
Total
Performance
based
remuneration
US$
US$
US$
US$
US$
US$
%
Executive Directors :
Max Bluvband
Shahar Hajdu
Non-Execuitve Director
Yoav Ziv
Leanne Graham
Jonathan Hart
Nathan Barbarich
Howard Digby
Peter Webse
Other KMP
Moshe Cohen (i)
Gidi Krupnik
Total
88,132
88,132
23,940
23,940
23,940
-
-
-
74,977
64,418
387,479
26,304
24,462
27,445
8,794
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
50,766
36,239
-
-
-
-
-
-
-
-
-
-
-
37,781
37,781
179,662
159,169
18,166
18,166
18,166
-
-
-
19,710
-
149,770
42,106
42,106
42,106
-
-
-
94,687
64,418
624,254
-
-
-
-
-
-
-
-
-
-
-
(i) Mr Cohen resigned on 20 May 2019 from the position of Non-Executive Director, however continued to act as KMP in the
capacity of Vice President of Business Development.
6. Additional disclosures relating to equity instruments
The number of ordinary shares in AppsVillage Australia Limited held by KMP of the Group during the financial year are as follows:
31 December 2020
Balance at start of the
year
Shares issued
during
the
year (ii)
Other
during the year
changes
Balance at end of the year
Directors
Yoav Ziv
Max Bluvband
Shahar Hajdu
Bahram Nour Omid
Andrew Whitten
Leanne Graham (i)
Jonathan Hart (i)
Other KMP
Gidi Krupnik
Moshe Cohen
Total
40,000
3,092,506
3,092,506
2,356,812
-
50,000
50,000
-
4,980,336
13,663,160
-
-
-
267,857
100,000
-
-
-
-
-
-
-
(50,000)
(50,000)
-
2,998,925
4,706,067
-
-
(100,000)
40,000
3,092,506
3,092,506
2,624,669
100,000
-
-
-
7,979,261
16,928,942
(i)
(ii)
Mrs Graham resigned on 10 June 2020, Mr Hart resigned on 10 June 2020.
They are not considered to be a KMP from these dates and the balance at the end of the year represent the
outstanding shares as of the date of the resignation.
Shares issued during the year reflects on market sales/on market purchases.
17
AppsVillage Australia Limited
Directors’ Report,
Remuneration Report - Audited (Continued)
KMP Option Holdings
The number of options over ordinary shares held by each KMP of the Group during the financial year is as follows:
31 December 2020
Balance at
start of the
year
Granted
as
remune
ration
Exercise
d during
the year
Options
issued
during the
year
Other
changes
during
the year
Balance at
end of the
year
Vested and
exercisable
Unvested
and
un-
exercisable
Executive Directors
Max Bluvband
Shahar Hajdu
Non-Executive Directors
Yoav Ziv
Bahram Nour-Omid
Andrew Whitten
Leanne Graham (i)
Jonathan Hart (i)
Other KMP
Gidi Krupnik
Moshe Cohen
Total
10,295,957
10,295,957
250,000
-
-
250,000
250,000
-
3,375,000
24,716,914
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,295,957
10,295,957
1,108,457
1,108,457
9,187,500
9,187,500
-
-
(250,000)
(250,000)
250,000
-
-
-
-
250,000
-
-
250,000
250,000
-
-
-
-
-
-
-
(500,000)
-
3,375,000
24,216,914
-
-
2,966,914
-
3,375,000
21,750,000
(i)
Mrs Graham resigned on 10 June 2020, Mr Hart resigned on 10 June 2020.
They are not considered to be a KMP from these dates and the balance at the end of the year represent the
outstanding options as of the date of the resignation.
Options do not carry any voting or dividend rights and can only be exercised once the vesting conditions have been met, until their expiry
date.
KMP Warrants Holdings
The number of warrants over ordinary shares held by each KMP of the Group during the financial year is as follows:
31 December 2020
Balance
at start
of
the
year
Granted
as
remunera
tion
Exercised
during
the year
Warrants
issued
during the
year
Other
changes
during
the year
Balance at
end of the
year
Vested and
exercisable
Unvested
and
un-
exercisable
Executive Directors
Max Bluvband
Shahar Hajdu
Non-Executive Directors
Yoav Ziv
Bahram Nour Omid
Andrew Whitten
Leanne Graham
Jonathan Hart
Other KMP
Gidi Krupnik
Moshe Cohen
Total
-
-
-
-
-
-
-
-
300,000
300,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
300,000
300,000
-
300,000
300,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18
Warrants do not carry any voting or dividend rights and can only be exercised once the vesting conditions have been met, until their
expiry date.
AppsVillage Australia Limited
Directors’ Report,
Remuneration Report - Audited (Continued)
Terms and conditions of the share-based payment arrangements
Directors' options
Option class
Number
granted
Director Options
250,000
Former Director
Options
500,000
Grant
Date
8 August
2019
8 August
2019
Vesting and
exercise date
27
August
2019
27
2019
August
Expiry date
Exercise
price
Value per option
at grant date
Vested %
3 years from the
date of issue
3 years from the
date of issue
AUD$0.30 US$0.07266
100%
AUD$0.30 US$0.07266
100%
Performance options
The following performance options were granted in prior periods to Directors and other key management personnel:
Performance
rights series
Grant date
of
No.
performance
options
of
No.
performance
options
during the year
vested
Class A
Class B
Class C
Total
August
August
August
8
2019
8
2019
8
2019
7,000,000
7,000,000
7,000,000
21,000,000
-
-
-
-
Fair value per
performance
option
Total fair value of
performance
options
Total value
yet to be
expensed
$0.0837
$585,714
$0.0837
$585,714
$0.0837
$585,714
$585,714
$585,714
$585,714
-
$1,757,142
$1,757,142
In relation to Class A, B and C performance options the Directors have assessed the probability of meeting the non-market conditions
as less than probable. Accordingly, no amount in relation to these performance options has been recognised in the Statement of
Profit or Loss and Other Comprehensive Income or in the remuneration disclosures for Directors and key management personnel.
The 21,000,000 performance options have been granted to eligible participants as defined under the Company’s performance options
and options plan (PROP). In order to remain an eligible participant, the employee or director must remain in service to the Group or
the right will lapse and not vest.
19
AppsVillage Australia Limited
Directors’ Report,
Remuneration Report - Audited (Continued)
Terms and conditions of the share-based payment arrangements (continued)
Performance options (continued)
The above performance options were issued to the following Directors and other key management personnel:
Class A
Class B
Class C
Total
Directors:
Max Bluvband
Shahr Hajdu
Other KMP:
Moshe Cohen
Total
3,062,500
3,062,500
875,000
7,000,000
3,062,500
3,062,500
875,000
7,000,000
3,062,500
3,062,500
875,000
7,000,000
9,187,500
9,187,500
2,625,000
21,000,000
The following terms and conditions apply to the Performance Options:
4)
5) Upon:
a.
1)
2)
3)
The performance hurdles for the performance options are based on 3 separate targets relating to the Company’s revenue
targets.
•
Tranche A Performance Options: will vest and become exercisable upon the Company achieving at least one of the
Customer Collections or ACV revenues of at least AUD $2,500,000 from sales of products and services based on the
Company’s technology, for any 12-month period after Admission and before the Performance Expiry Date.
Tranche B Performance Options: will vest and become exercisable upon the Company achieving at least one of customer
collections or ACV revenues of at least AUD $5,000,000 from total sale of products and services that are based on the
Company’s technology, for any 12-month period after Admission and before the Performance Expiry Date; and
Tranche C Performance Options: will vest and become exercisable upon the Company achieving at least one Customer
Collections or ACV revenues of at least $10,000,000 from total sales of products based and services that are based on
the Company’s technology, for any 12-month period after Admission and before the Performance Expiry Date.
•
•
In order to remain an eligible participant, the employee and director must remain in services to the Group or the right will
lapse and not vest.
The performance options will vest on the date the milestone relating to that performance options has been satisfied. All of
the performance rights will vest and become exercisable if a change of control event occurs in relation to the Company
(whether by way of takeover bid, scheme of arrangement involving the Company which results in a change in 40% or more
of the voting shares in the Company, or the Group sells all or substantially all of its business or assets).
Each performance Option entitles the holder to one fully paid ordinary share upon exercise.
a takeover bid under Chapter 6 of the Corporations Act having been made in respect if the Company and:
i. having received acceptances for not less than 50.1% if the Company’s Shares on issue; and
ii. having been declared unconditional by the bidder; or
b.
a Court granting orders approving a compromise or arrangement for the purposes or in connection with a scheme
of arrangement for the reconstruction of the Company or its amalgamation with any other company or companies,
then, to the extent Performance Options have not converted into Shares due to satisfaction of the Vesting Conditions, the
Performance Options will automatically vest and become exercisable.
The Performance Options are exercisable at any time on or prior to the Performance Expiry Date.
The Performance Options may be exercised during the Exercise Period by notice in writing to the Company in the manner
specified on the Option certificate and payment of the Performance Exercise Price for each Option being exercised in
Australian currency by electronic funds transfer or other means of payment acceptable to the Company.
6)
7)
20
AppsVillage Australia Limited
Directors’ Report,
Remuneration Report - Audited (Continued)
7.
Loans from key management personnel (KMP) and their related parties
No loans are noted between the Group and key management personnel and their related parties for the current year (2019: Nil).
8. Other transactions and balances with KMP and their related parties
Transactions with related parties are entered into on terms equivalent to those that prevail in arm’s length transactions.
Related parties of the Group's key management personnel are as follows:
Mr Zigmund Bluvband – Executive Director and CEO Max Bluvband's Father
Mrs Hagit Bluvband – Executive Director and CEO Max Bluvband's wife
Pearl Cohen Zedek Latzer Baratz – CEO’s sister Anna Moshe is a partner of this legal firm
The Group has transactions with members of the Group’s key management personnel and/or their related parties during the year as
follows:
8(a) Share holdings by KMP related parties
31 December 2020
Balance
start of
year
at
the
Granted
remuneration
as
Other
during the year
changes
Balance at end of
the year
Zigmund Bluvband
449,283
Total
449,283
-
-
(449,283)
(449,283)
-
-
(i) Other changes during the year reflects on market sales/on market purchases.
8(b) Options Holdings by KMP Related Parties
31 December 2020
Balance
at
start of the
year
Granted
remuneration
as
Balance at the end
of the year
Hagit Bluvband
Peral Cohen
Total
229,052
193,282
422,334
-
-
-
229,052
193,282
422,334
8(c) Details of remuneration
31 December 2020
salary,
Short
term
fees & commissions
US$
52,289
23,491
75,780
Superannuation &
social benefits
US$
17,178
-
17,178
Hagit Bluvband
Peral Cohen Legal(i)
Total
Non-Monetary benefits
US$
27,053
-
27,053
Total
US$
96,520
23,491
120,011
(i) This is the fee paid to Pearl Cohen Legal for legal consult service in 2020. The terms of the agreement is on an arm’s length basis.
21
AppsVillage Australia Limited
Directors’ Report,
Remuneration Report - Audited (Continued)
9.
Voting of shareholders at last year’s annual general meeting
The Company received 99.66% "Yes" Votes cast on its Remuneration Report for the 2019 financial year.
The company did not receive any specific feedback at the annual general meeting regarding its remuneration practices.
This is the end of the audited remuneration report
This directors’ report is signed in accordance with a resolution of directors made pursuant to s.298(2) of the Corporations Act 2001.
On behalf of the Directors
Mr Max Bluvband
Chief Executive Officer
Tel Aviv, 31 March 2021
22
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY DEAN JUST TO THE DIRECTORS OF APPSVILLAGE AUSTRALIA
LIMITED
As lead auditor of AppsVillage Australia Limited for the year ended 31 December 2020, I declare that,
to the best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of AppsVillage Australia Limited and the entities it controlled during the
period.
Dean Just
Director
BDO Audit (WA) Pty Ltd
Perth, 31 March 2021
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
AppsVillage Australia Limited
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 31 December 2020
Revenue from contracts with customers
2
992,832
611,042
Note
2020
US$
2019
US$
Operating expenses
Cost of revenues – commissions
Research and development
Selling and marketing
General and administrative
Share-based payments
Listing and registration expenses
Issue of founder shares
Loss before finance expenses
Finance income
Finance expense
Loss before income tax
Income tax expense
Loss for the year
(106,086)
(790,227)
(2,171,520)
(1,024,874)
(249,060)
-
-
(59,921)
(547,790)
(2,616,218)
(542,185)
(289,930)
(634,487)
(929,952)
(3,348,935)
(5,009,441)
9,310
(25,657)
5,998
(13,794)
(3,365,282)
(5,017,237)
-
-
(3,365,282)
(5,017,237)
16
3
3
4
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Foreign currency translation reserve
15(c)
(2,990)
Total comprehensive loss for the year attributable to owners of the
Company
(3,368,272)
160,343
(4,856,894)
Loss per share attributable to owners of the Company
Basic/diluted loss per share (cents per share)
7
(0.07)
(0.140)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
24
AppsVillage Australia Limited
Consolidated Statement of Financial Position
As at 31 December 2020
Note
2020
US$
2019
US$
CURRENT ASSETS
Cash and cash equivalents
Restricted cash
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Right- of- use assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Employee provisions
Contract liability
Lease liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Lease liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
SHAREHOLDERS’ EQUITY
Issued capital
Reserves
Accumulated losses
SHAREHOLDERS’ EQUITY
8
9
10
11
12
13
14
15
818,049
44,772
116,578
979,399
14,121
46,920
61,041
2,662,198
28,223
138,884
2,829,305
10,116
-
10,116
1,040,440
2,839,421
522,224
154,116
153,659
27,268
857,267
19,807
19,807
877,074
163,366
736,034
93,577
347,978
-
1,177,589
-
-
1,177,589
1,661,832
9,588,036
1,198,608
7,967,290
952,538
(10,623,278)
(7,257,996)
163,366
1,661,832
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes
25
Share-based
payment reserve
Foreign Currency Translation
Reserve
US$
decessor
reserve
US$
accounting
AppsVillage Australia Limited
Consolidated Statement of Changes in Equity
As at 31 December 2020
Issued Capital
Accumulated losses
Balance at 1 January 2019
Loss for the year
Other comprehensive income
Total comprehensive Income (loss)
for the year
Transactions with owners in their
capacity as owners:
Issue of shares – Note 14
US$
304,314
-
-
-
6,584,350
Capital raising costs –Note 14
(944,951)
Share based payments –Note 16
-
Conversion of convertible loan -
Note 14
Transactions
restructure(i)
Balance at 31 December 2019
capital
under
2,023,577
-
US$
(2,240,759)
(5,017,237)
-
(5,017,237)
-
-
-
-
-
US$
298,258
-
-
-
-
363,210
289,929
-
-
-
-
160,343
160,343
-
-
-
-
-
7,967,290
(7,257,996)
951,397
160,343
Balance at 1 January 2020
7,967,290
Loss for the year
Other comprehensive income
Total comprehensive Income(loss)
for the year
Transactions with owners in their
capacity as owners:
Issue of shares– Note 14
-
-
-
1,800,159
Capital raising costs –Note 14
(179,413)
Share based payments –Note 16
-
(7,257,996)
(3,365,282)
-
(3,365,282)
-
-
-
Balance at 31 December 2020
9,588,036
(10,623,278)
951,397
-
-
-
-
-
249,060
1,200,457
160,343
-
(2,990)
(2,990)
-
-
-
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
26
-
-
-
-
-
-
-
-
(159,202)
(159,202)
(159,202)
-
-
-
-
-
-
Mandatorily
convertible bridge
loans
US$
2,023,577
-
-
-
-
-
-
Total
US$
385,390
(5,017,237)
160,343
(4,856,894)
6,584,350
(581,741)
289,929
(2,023,577)
-
-
-
-
-
-
-
-
-
-
(159,202)
1,661,832
1,661,832
(3,365,282)
(2,990)
(3,368,272)
1,800,159
(179,413)
249,060
163,366
157,353
(159,202)
AppsVillage Australia Limited
Consolidated Statement of Cash Flows
For the Year Ended 31 December 2020
CASH FLOWS USED IN OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Listing and registration expenses
Interest paid
Note
2020
US$
2019
US$
798,761
(4,170,025)
-
(5,783)
852,695
(2,910,460)
(634,487)
(7,796)
Net used in operating activities
8(b)
(3,377,047)
(2,700,048)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for plant and equipment
Net used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
(9,399)
(9,399)
(8,984)
(8,984)
Proceeds from the issue of shares
14
1,769,970
Transaction costs related to issues of shares
Investments in restricted cash
Repayment of lease liability
Proceeds from mandatorily convertible bridge loans
Net cash provided from financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Impact of movement in foreign exchange rates
Cash and cash equivalents at the end of the financial year
8
(179,413)
(16,549)
(22,578)
-
(1,835,016)
2,662,198
(9,133)
818,049
5,103,455
(581,741)
-
-
371,472
4,893,186
2,184,154
453,655
24,389
2,662,198
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Non- cash Investing Activities:
Right of Use Asset acquisition $19,519 USD
27
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These consolidated financial statements cover AppsVillage Australia Limited (Company) and its controlled entity (also referred to as
Group).
AppsVillage Australia Limited is a company limited by shares, incorporated and domiciled in Australia. The Group is a for-profit entity.
The nature of operations and principal activities of the Company are described in the Directors’ report.
Basis of preparation of the financial report
a)
Statement of Compliance
These financial statements are general purpose financial statements which have been prepared in accordance with Australian
Accounting Standards (AASBs) (including Australian Interpretations) adopted by the Australian Accounting Standards Board (AASB)
and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the Australian Accounting Standards Board has concluded would
result in financial statements containing relevant and reliable information about transactions, events and conditions. Compliance with
Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting
Standards.
b)
Basis of Measurement
The financial statements, except for cash flow information, have been prepared on an accruals basis and are based on historical costs,
modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.
The amounts presented in the financial statements are presented in Unites States Dollars (US$) and all values are rounded to the
nearest dollar unless stated otherwise.
c)
Going Concern
The financial report has been prepared on a going concern basis, which contemplates the continuity of normal business activity and
the realisation of assets and the settlement of liabilities in the ordinary course of business. The Group incurred a loss for year ended
31 December 2020 of US$ 3,365,282 (2019: US$ 5,017,237) and net cash outflows from operating activities of US$ 3,377,047 (2019:
US$2,700,048).
In context of this operating environment, the ability of the Group to continue as a going concern is dependent on securing additional
funding through debt or equity to continue to fund its operational and marketing activities.
These conditions indicate a material uncertainty that may cast a significant doubt about the entity’s ability to continue as a going
concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.
The Directors believe that there will be sufficient funds available to continue to meet the Group’s working capital requirements as at
the date of this report and that sufficient funds will be available to finance the operations of the Group for the following reasons:
• the Directors have assessed the likely cash flow for the 12-month period from the date of signing this financial report and its impact
on the Group and believe there will be sufficient funds to meet the Group’s working capital requirements as at the date of this report;
• the Group has recently been successful in raising equity and is planning to raise additional funds in the amount of $1,163K USD (please
refer to note 25);
• the level of expenditure can be managed; and
• the Directors also have reason to believe that in addition to the cash flow currently available, additional funds from receipts are
expected through the provision of the Group’s services.
28
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
should the Group not be able to continue as a going concern, it may be required to realise its assets and discharge its liabilities other
than in the ordinary course of business, and at amounts that differ from those stated in the financial statements or raise additional
capital through equity or debts raisings and that the financial report does not include any adjustments relating to the recoverability
and classification of recorded asset amounts or liabilities that might be necessary should the Group not continue as a going concern
and meet its debts as and when they become due and payable. The directors plan to continue the Group’s operations on the basis as
outlined above and believe there will be sufficient funds for the Group to meet its obligations and liabilities for at least twelve months
from the date of this report.
d)
Principles of Consideration
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 31 December 2020.
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the investee. Specifically, the Group controls as investee if and only if the Group
has:
•
•
•
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);
Exposure, or rights, to variable returns from its involvement with the investee, and
The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee, including:
•
•
•
The contractual arrangement with the other vote holders of the investee,
Rights arising from other contractual arrangements,
The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more
of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases
when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during
the year are included in the statement of profit or loss and other comprehensive income from the date the Group gains control until
the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the Group,
and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary,
adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting
policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the
Group are eliminated in full on consolidation.
A change in ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses
control over a subsidiary, it:
•
•
•
•
•
•
•
De-recognises the assets (including goodwill) and liabilities of the subsidiary
De-recognises the carrying amount of any non-controlling interests
De-recognises the cumulative translation differences recorded in equity
Recognises the fair value of the consideration received
Recognises the fair value of any investments retained
Recognises any surplus or deficit in profit or loss
Reclassifies the parent’s share of components previously recognised in OCI to profit or loss Accumulated losses as
appropriate, as would be required if the Group had directly disposed of the related assets or liabilities.
e)
Income Tax
Current income tax expense charged to the profit or loss is tax payable on taxable income calculated using applicable income tax rates
enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected
to be paid to (recovered from) the relevant taxation authority.
29
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Deferred income tax expense reflects movements in the deferred tax asset and deferred tax liability balances during the year as well
unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax
relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in financial statements. Deferred tax assets also result where amounts have been fully expensed but future
tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a
business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the rates that are expected to apply to the period when the asset is realised or the
liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement also reflects the manner
in which management expects to recover or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that
future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
When temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax
assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not
probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or
simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset
where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same
taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or
simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of
deferred tax assets or liabilities are expected to be recovered or settled.
f)
Financial Instruments
Initial recognition and measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity becomes a party to the
contractual provisions of the instrument.
Financial instruments are initially measured at fair value plus transactions costs where the instrument is not classified as at fair value
through profit or loss. Transaction costs related to instruments classified as at fair value through profit or loss are expensed to profit
or loss immediately. Financial instruments are classified and measured as set out below.
Classification and subsequent measurement
(i)
Receivables
Trade receivables are measured at amortised cost using the effective interest method, less any allowance for expected credit losses.
Trade receivables are generally due for settlement within 0 - 60 days.
(ii)
Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost. Gains or losses are
recognised in profit or loss though amortisation process and when the financial liability is derecognised.
Derivative instruments
The Group does not trade or hold derivatives.
Financial guarantees
The Group has no material financial guarantees.
30
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flow expires or the asset is transferred to another
party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset.
Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expired. The difference between
the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including
the transfer of non-cash assets or liabilities assumed, is recognised on profit or loss.
g) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits available on demand with banks with original maturity of three months or
less.
h) Trade 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 0 - 60 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.
Leases
i)
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an
assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement
conveys a right to use the asset.
Group as a lessee
Operating lease payments, where substantially all the risk and benefits remain with the lessor, are recognised as an expense in the
statement of profit or loss and other comprehensive income on a straight-line basis over the lease term. Operating lease incentives are
recognised as a liability when received and subsequently reduced by allocating lease payments between rental expense and reduction
of the liability.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value
of the following lease payments:
•
•
•
•
•
Fixed payments (including in-substance fixed payments), less any lease incentives receivable
Variable lease payment that are based on an index or a rate
Amount expected to be payable by the lessee under residual value guarantees
The exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and
Payments of penalties for termination the lease, if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s
incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset
of similar value in a similar economic environment with similar terms and conditions.
Right-of-use of assets are measured at cost comprising the following:
•
•
•
•
The amount of the initial measurement of lease liability
Any lease payments made at or before the commencement date less any lease incentives received
Any initial direct costs
Restoration cost
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in
profit or loss. Short term leases are leases with a lease term of 12 months or less. Low-value asset comprise IT equipment and small
items of office furniture.
31
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
j)
Revenue Recognition
The Group provides an online platform that enables users to create applications using their Facebook (‘FB’) pages and generates
revenue primarily from services related to such applications.
The Group recognises revenue when the customer obtains control over the promised services. The revenue is measured according to
the amount of the consideration to which the Group expects to be entitled in exchange for the services promised to the customer,
other than amounts collected for third parties.
Identifying the contract
The Group accounts for a contract with a customer only when the following conditions are met:
(a) The parties to the contract have approved the contract (in writing, orally or according to other customer business practices)
and they are committed to satisfying the obligations attributable to them;
(b) The Group can identify the rights of each party in relation to services that will be transferred;
(c) The Group can identify the payment terms for the service that will be transferred;
(d) The contract has a commercial substance (i.e. the risk, timing and amount of the entity’s future cash flows are expected to
(e)
change as a result of the contract); and
It is probable the consideration, to which the Group is entitled to in exchange for its services transferred to customer, will be
collected.
For the purposes of paragraph (e) the Group examines, inter alia, the percentage of the advance payments received and the spread of
the contractual payments, past experience with the customer and the status and existence of sufficient collateral.
If a contract with a customer does not meet all the above criteria, consideration received from the customer is recognised as a contract
liability until the criteria are met or when one of the following events occurs; the Group has no remaining obligation to transfer services
to the customer and any considerations promised by the customer has been received and cannot be returned; or the contract has been
terminated and the consideration received from the customer cannot be refunded.
Identifying Performance Obligations
On the contract’s inception date, the Group assesses the services promised in the contract with the customer and identifies as a
performance obligation any promise to transfer to the customer one of the following:
(a) Services that are distinct; or
(b) A series of distinct services that are substantially the same and have the same pattern of transfer to the customer.
The Group identifies services promised to the customer as being distinct when the customer can benefit from the services on their own
or in conjunction with other readily available resources and the Group’s promise to transfer the services to the customer is separately
identifiable from other promises in the contract.
Determining the transaction price
The transaction price is the amount of the consideration to which the Group expects to be entitled in exchange for the services
promised to the customer, other than amounts collected for third parties.
Satisfaction of performance obligations
Revenue is recognised overtime when the Group satisfies a performance obligation by transferring control over promised services to
the customer.
32
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
i)
Revenue Recognition
Interest income
Interest income 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.
j)
Research and development expenses
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding,
is recognised in profit or loss when incurred.
Development activities involve a plan or design for the production of new or substantially improved products and processes.
Development expenditure is capitalised only if development costs can be measured reliably, the product or process is technically and
commercially feasible, future economic benefits are probable, and the Group has intention and sufficient resources to complete
development and to use or sell the asset.
As of 31 December 2020, the Group does not meet the conditions to capitalise any development expenditure, therefore, all expenditure
was recognised in profit or loss as incurred.
k) Operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin.
l) Depreciation
Depreciation is a systematic allocation of the depreciable amount of an asset over its useful life. The depreciable amount is the cost of
the asset, less its residual value.
An asset is depreciated from the date it is ready for use, meaning the date it reaches the location and condition required for it to
operate in the manner intended by management.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of the fixed asset item,
since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the assets.
The estimated useful lives for the current and comparative periods are as follows:
•
Computer and software
33%
Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if appropriate.
m) Goods and Services Tax (GST)/Value Added Tax (VAT)
Revenues, expenses, and assets are recognised net of the amount of GST/VAT, except where the amount of GST/VAT incurred is not
recoverable.
Receivable and payables are stated inclusive of the amount of GST/VAT receivable or payable. The net amount of the GST/VAT
recoverable from, or payable to, the tax authorities is included with other receivables and payables in the statement of financial
position.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST/VAT component of investing and financing
activities, which are disclosed as operating cash flows.
33
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
n)
Employee Benefits
Post-employment benefits
The liability for severance pay is in accordance its obligations under Israeli employment law (Section 14 of the Severance Compensation
Act, 1963). All Israel based employees are included under Section 14, and are entitled only to monthly deposits, at a rate of 8.33% of
their monthly salary, made in the employee’s name with insurance companies or pension funds. Under Israeli employment law,
payments in accordance with Section 14 release the employer from any future severance payments.
The funds are made available to the employee at the time the employer-employee relationship is terminated, regardless of the cause
of termination. The severance pay liabilities and deposits under Section 14 are not reflected in the statements of financial position as
the severance pay risks have been irrevocably transferred to the insurance companies or pension funds.
Short term employee benefits
Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided
or upon the actual absence of the employee when the benefit is not accumulated.
The employee benefits are classified, for measurement purposes, as short-term benefits or as other long-term benefits depending on
when the Group expects the benefits to be wholly settled.
o)
Equity-settled compensation
The Group measures the share-based expense and the cost of equity-settled transaction with employees by reference to the fair value
of the equity instruments at the date at which they are granted. The fair value is determined by using the Black Scholes option valuation
model which takes into account the terms and conditions upon which the instruments are granted.
p)
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.
q)
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that
an outflow of economic benefits will result, and that outflow can be reliably measured. Provisions are measured using the best estimate
of the amounts required to settle the obligation at the end of the reporting period.
r)
Equity and reserves
Share capital represents the fair value of shares that have been issued. Any transaction costs associated with the issuing of shares are
deducted from share capital, net of any related income tax benefits. The Share-based payment reserve records the cost of share-based
payments.
s)
Foreign currency transactions and balances
Functional and presentation currency
The functional currency of each entity within the Group is measured using the currency of the primary economic environment in which
that entity operates. The consolidated financial statements are presented in US dollars which is the subsidiary’s functional currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction.
Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost
continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at
the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the profit or loss.
34
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive income to the
extent that the underlying gain or loss is recognised other comprehensive Income; otherwise the exchange difference is recognised in
profit or loss.
Group Companies
The financial results and position of foreign operations whose functional currency is different from the Group’s presentation currency
are translated as follows:
•
•
•
assets and liabilities are translated at year-end exchange rates prevailing at the reporting period;
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars are recognised
in other comprehensive income and included in the foreign currency translation reserve in the statement of financial position. These
differences are recognised in the profit or loss in the period which the operation is disposed of.
s)
Segment information
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors
(the chief operating decision makers) in assessing performance and in determining the allocation of resources. The Group’s sole
operating segment is consistent with the presentation of these consolidated financial statements.
t)
Share based payments
Share-based payments are measured at the fair value of goods or services received or the fair value of the equity instruments issued,
if it is determined the fair value of the goods or services cannot be reliably measured and are recorded at the date the goods or services
are received. The fair value of options is determined using the Black Scholes option valuation model. The number of shares and options
expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognised for services received
as consideration for the equity instruments granted is based on the number of equity instruments that eventually vest.
For performance options with non-market based vesting conditions, at each reporting date, the Company revises its estimate of the
number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or
loss over the remaining vesting period, with a corresponding adjustment to the option reserve.
u) Earnings/(loss) per share
Basic earnings/(loss) per share is calculated by dividing:
•
•
the profit/(loss) attributable to member of the parent entity, 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 year (if any).
Diluted earnings/(loss) per share adjusts the figures used in the determination of basic earnings/(loss) 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 additional ordinary shares that would have been outstanding assuming the conversion of
all dilutive potential ordinary shares.
v) Predecessor Accounting
Business combinations involving entities under capital reorganisation are accounted for using the predecessor accounting method.
Under this method;
•
•
Carrying values are not restated in the accounts of the acquiring entity, rather prior book values are maintained. As a result,
no fair value adjustments are recorded on the acquisition; and
The carrying value of net assets or liabilities acquired is recorded as a separate element of equity.
35
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
w) Critical Accounting Estimates and Judgements
The directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best
available current information. Estimates assume a reasonable expectation of future events and are based on current trends and
economic data, obtained both externally and within the Group.
Key Estimates and judgements
Share based payments
The Group initially measures the cost of equity-settled transactions with employees, KMP and directors by reference to the fair value
of the equity instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires
determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant.
This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the
share option, volatility and dividend yield and making assumptions about them, as well as an assessment of the probability of achieving
non-market-based vesting conditions.
The directors also apply judgements to assess the probability and timing of achieving milestones related to the performance options.
At 31 December 2020 the Directors have assessed the probability of meeting the non-market conditions as less than probable.
Accordingly, no amount in relation to these performance rights has been recognised in the Statement of Profit or Loss and Other
Comprehensive Income or in the remuneration disclosures for Directors and key management personnel. The assumptions and models
for estimating fair value for share-based payment transactions are disclosed on Note 16.
The Directors make estimates and judgements in preparing the financial report based on historical knowledge and best available
current information. Estimates assume a reasonable expectation of future events based and are based on current trends and economic
data, obtained both externally and within the Group.
COVID – 19
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (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 Coronavirus (COVID-
19) pandemic. At 31 December 2020 the Group has reassessed all significant judgements and estimates included in the 31 December
2020 financial result and position, including but not limited to, provisions against debtors, impairment of non-current assets, and other
provisions and estimates.
NOTE 2: REVENUE
The Group operates in one operating segment. In the following table sales are attributed to geographic distribution based on the
location of the customer:
Israel
United States
Other countries
Total revenue to external customers
2020
US$
7,160
34,176
41,496
992,832
2019
US$
18,942
305,521
286,579
611,042
36
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2020
NOTE 2: REVENUE (Continued)
Total revenues in both financial years are generated from provision of services that allow small-to-medium businesses to create and
manage their own mobile application as a means of connecting with their customers and growing their business. The revenue is
recognised over time in both periods
Disaggregation of revenue
2020
Revenue recognition at a point in time
Over time
2019
Revenue recognition at a point in time
Over time
NOTE 3: EXPENSES
Advertising
Revenue
US$
6,011
36,821
992,832
Advertising
Revenue
US$
7,736
63,306
611,042
Total
US$
6,011
36,821
992,832
Total
US$
47,736
63,306
611,042
Loss before income tax from continuing operations includes the following specific
expenses:
Payroll and related expenses
Professional services
Depreciation of plant and equipment
Depreciation of right of usage asset
Exchange rate differences
Finance expenses:
-
-
Interest income
Interest expenses
Total finance expenses
Listing and registration expenses
2020
US$
1,119,210
383,089
5,394
24,031
11,503
(9,310)
25,657
16,347
2019
US$
674,105
392,729
2,621
-
96,991
(5,998)
13,794
7,796
-
634,487
Share based payments expense
249,060
289,929
During the period the Group undertook several share-based payment transactions which are detailed in Note 16.
37
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2020
NOTE 4: INCOME TAX
The financial accounts for the year ended 31 December 2020 comprise the results of AppsVillage Australia Limited and AppsVillage
Israel. The legal parent is incorporated and domiciled in Australia where the applicable tax rate is 27.5% (2019: 27.5%). The applicable
tax rate in Israel is 23% (2019: 23%).
a)
Income tax expense
Current tax
Deferred tax
2020
US$
-
-
2019
US$
-
-
-
b)
The income tax expense for the year can be reconciled to the accounting loss as follows:
Loss for the year before tax
Tax at the Australian tax rate of 27.5%
Effect of different tax rate of group entities operating in a different jurisdiction
Effect of expenses that are not deductible in determining taxable income
Effect of unused tax losses not recognised as deferred tax assets
2020
US$
(3,365,282)
25,453)
143,093
85,071
697,289
-
2019
US$
(5,017,237)
(1,379,740)
147,973
323,657
908,110
-
Tax losses
Unused tax losses for which no deferred tax asset has been recognised will be subject to the Group satisfying the requirements
imposed by regulatory taxation authorities. The benefits of deferred tax assets will only be recognised if:
-
-
-
Future assessable income is derived of a nature of an amount sufficient to enable the benefit to be realised.
The condition for deductibility imposed by tax legislation continues to be complied with; and
No changes in tax legislation adversely affect the Group in realising the benefit.
c)
Deferred tax losses not recognised at reporting date
Deferred tax assets not recognised at the reporting date
Unused tax losses
2020
US$
2019
US$
839,105
1,358,457
38
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2020
NOTE 5: RELATED PARTY TRANSACTIONS
a)
Key Management Personnel Compensation
The totals of remuneration paid to KMP during the year are as follows:
Short term salary and fees
Social benefits
Non-Monetary benefits
Share based payments
Total KMP Compensation
2020
US$
553,877
70,457
57,808
-
682,142
2019
US$
387,479
50,766
36,239
149,770
624,254
b)
Transactions with related parties are entered into on terms equivalent to those that prevail in arm’s length transactions.
Other transactions
Related parties of the Group's key management personnel are as follows:
Mr Zigmund Bluvband – CEO's Father
Mrs Hagit Bluvband – CEO's Wife
Pearl Cohen Zedek Latzer Baratz – CEO’s sister Anna Moshe is a partner of this legal firm
The Group has transactions with members of the Group’s key management personnel and/or their related parties during the year as
follows:
b (1) Share holdings by KMP related parties
31 December 2020
Balance
start of
year
at
the
Granted
remuneration
as
Other
during the year(i)
changes
Balance at end of
the year
Zigmund Bluvband
Total
449,283
449,283
-
-
(449,283)
(449,283)
-
-
(i) Other changes during the year reflects on market sales/on market purchases.
31 December 2019
Moshe Cohen
Zigmund Bluvband
GNat Pty Ltd
Total
Balance
at
start of the
year
-
10,896
-
10,896
Granted
remuneration (iii)
as
Conversion (i)
1,687,500
-
2,750,000
4,437,500
-
1,112,296
-
1,112,296
Other
changes
during the year
(ii)
-
(673,909)
176,251
(497,658)
Balance at end of
the year
1,687,500
449,283
2,926,251
5,063,034
Conversion upon acquisition of the subsidiary AppsVillage Israel.
(i)
(ii) Other changes during the year reflects on market sales / on market purchases.
(iii) Received as part of 6,875,000 shares issued to the founders of the Company prior to the IPO with unit price of 0.1353. Refer
to Note 14.
39
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2020
NOTE 5: RELATED PARTY TRANSACTIONS (Continued)
b (2) Options Holdings by KMP Related Parties
31 December 2020
Balance
at
start of the
year
229,052
193,282
422,334
Granted
remuneration
as
Balance at the end
of the year
-
-
-
229,052
193,282
422,334
Hagit Bluvband
Pearl Cohen
Total
31 December 2019
RM Corporate
Hagit Bluvband
Total
Balance at start
of the year
-
2,222
2,222
Granted
as
remuneration (i)
5,000,000
-
5,000,000
Conversion (ii)
-
226,830
226,830
Balance at the end
of the year
5,000,000
229,052
5,229,052
The issue of 5,000,000 options with an exercise price of AUD$0.30 and a life of 3 years to the Lead Manager.
(i)
(ii) Conversion upon acquisition of the subsidiary AppsVillage Israel.
b (3) Details of remuneration
31 December 2020
salary,
term
Short
fees & commissions
US$
52,289
23,491
75,780
Superannuation &
social benefits
US$
17,178
-
17,178
Non-Monetary
benefits
27,053
-
27,053
Total
US$
96,520
23,491
120,011
Hagit Bluvband
Pearl Cohen(i)
Total
(i)
This is the fee paid to Pearl Cohen, for legal consult service in 2020. The terms of the agreement are on an arm’s length basis.
31 December 2019
Short term salary, fees
& commissions
US$
58,127
371,511
29,120
458,758
Superannuation &
social benefits
US$
-
-
11,094
11,094
Non-Monetary
benefits
-
-
12,624
12,624
Pearl Cohen legal(ii)
RM Corporation (i)
Hagit Bluvband
Total
Total
US$
58,127
371,511
52,838
482,476
(ii) This is the fee paid to RM Corporation for IPO related service. The terms of the agreement are on an arm’s length basis.
(iii) This is the fee paid to Pearl Cohen Legal for legal consult service in 2019. The terms of the agreement are on an arm’s length
basis.
40
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2020
NOTE 6: AUDITOR’S REMUNERATION
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices
and non-related audit firms:
Auditor remuneration
-
-
Auditing and reviewing the financial reports (BDO) - Australia
Auditing and reviewing the financial reports (BDO) – Israel
Other non-audit remuneration
-
-
Investigating Accountant’s Report (BDO) – Australia
Tax service (BDO) – Israel
NOTE 7: LOSS PER SHARE
Loss per share (EPS)
2020
US$
29,751
66,000
95,751
-
4,500
4,000
2020
US$
2019
US$
29,700
30,000
59,700
20,160
4,000
24,160
2019
US$
a)
Loss used in calculation of basic EPS and diluted EPS
,365,282)
(5,017,237)
b) Number of ordinary shares outstanding at year end used in
45,330,926
692
calculation of basic and diluted loss per share
NOTE 8: CASH AND CASH EQUIVALENTS
Cash at bank
Total cash and cash equivalents in the statement of cash flows
2020
US$
818,049
818,049
2019
US$
2,662,198
2,662,198
NOTE 8b: RECONCILIATION OF LOSS AFTER INCOME TAX TO NET CASH FLOWS FROM OPERATING ACTIVITIES:
Loss after income tax
Non-cash flows in loss after income tax
-
-
-
-
-
Non-cash currency differences expenses
Share based payment expense
Non-cash expense related to convertible loan
Depreciation and amortisation
Expenses related to issue of founder shares
Changes in assets and liabilities
-
-
-
-
(Increase) in trade and other receivables
Increase in trade and other payables
Increase in contract Liability
Increase/(decrease) in provisions
Cash flow used in operating activities
2020
US$
(3,365,282)
4,598
249,060
-
29,425
-
22,306
(183,622)
(194,071)
60,539
(3,377,047)
2019
US$
(5,017,237)
106,077
289,929
159,202
2,621
929,952
(60,829)
558,303
241,405
90,529
(2,700,048)
41
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2020
Non-Cash investing and financing activities
•
•
Right of Use Asset acquisition $19,519 USD
The Group issued shares for professional services and converted debt to equity as described in Note 14. There were no other
non-cash investing and financing activities during the year.
NOTE 9: RESTRICTED CASH
Restricted cash
NOTE 10: TRADE AND OTHER RECEIVABLES
CURRENT
Accounts receivables
Other receivables
2020
US$
44,772
2020
US$
1,616
114,962
116,578
2019
US$
28,223
2019
US$
16,538
122,346
138,884
All amounts are short-term. The net carrying value of trade and other receivables is considered a reasonable approximation of fair
value. The Group’s exposure to the risks associated with trade and other receivables are disclosed in Note 18.
NOTE 11: TRADE AND OTHER PAYABLES
CURRENT
Trade payables
Accrued expenses
Employee payables
2020
US$
219,682
118,011
522,224
2019
US$
184,531 65,099
485,444
185,491
736,034
All amounts are short-term. The carrying values of trade payables and other payables are considered to approximate fair value. The
Group’s exposure to the risks associated with trade and other payables are disclosed in Note 18.
NOTE 12: EMPLOYEE PROVISIONS
CURRENT
Annual leave
NOTE 13: CONTRACT LIABILITY
Opening Balance
Payments received in advance
Transfer to Revenue
Closing Balance
2020
US$
154,116
2019
US$
93,577
2020
US$
347,730
798,761
(992,832)
153,659
2019
US$
106,325
852,695
(611,042)
347,978
42
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2020
NOTE 14: ISSUED CAPITAL
Share Capital
a)
Fully paid ordinary shares
2020
Shares No.
2019
Shares No.
2020
US$
2019
US$
99,182,445
76,658,758
9,588,036
7,967,290
b) Movement in Ordinary Capital
Date
No.
Opening balance as at 1 January 2020
Issue of shares in relation to capital raising via
public offer
Issue of shares under the SPP
03 August 2020
76,658,758
19,164,688
28 August 2020
2,981,218
Issue of shares for professional services
16 October 2020
377,781
Costs of capital raising
-
Closing balance at 31 December 2020
-
99,182,445
c) Movement in Ordinary Capital
Date
No.
Opening balance as at 1 January 2019 (i)
Issue of shares in AppsVillage Ltd (Israel) (ii)
26 August 2019
110,028
19,950,686
Less: adjustment for predecessor accounting (i)
26 August 2019
(110,028)
Issue of shares upon conversion of loans held in the
AppsVillage Ltd (Israel) by third parties(iii)
Issue of shares – initial public offering
Issue of shares upon conversion of loans held in the
Company
Existing shares of AppsVillage Australia Limited (iv)
Issue of shares in relation to capital raising via public
offer
Costs of capital raising
Issue of 5,000,000 Lead Manager Options (refer to Note
16)
Closing balance at 31 December 2019
26 August 2019
10,910,905
27 August 2019
25,000,000
27 August 2019
3,923,198
27 August 2019
16 December 2019
6,875,001
9,998,968
-
-
-
-
76,658,758
Unit Price
US$
n/a
0.08
0.08
0.08
-
Unit Price
US$
n/a
n/a
n/a
n/a
0.1353
0.1353
0.1353
0.1722
-
-
Total
7,967,290
1,531,488
238,482
30,189
(179,413)
9,588,036
Total
304,314
-
-
2,023,577
3,401,911
530,674
929,952
1,721,813
(581,741)
(363,210)
7,967,290
(i) The application of continuation accounting for the acquisition and consolidation of common shareholders entity AppsVillage Ltd (Israel) required
the disclosure of AppsVillage Ltd (Israel) shares on issue as at 31 December 2018 as a comparative.
(ii) The Company issued 19,950,686 fully paid ordinary shares to AppsVillage Ltd (Israel).
(iii) The issue of 10,910,905 ordinary shares on conversion of US$2,023,577 mandatorily convertible converting loans in AppsVillage Australia.
(iv) A financing cost of US $ 929,952 has been recognised for the value of 6,875,000 shares of AppsVillage Australia post 31 December 2018 prior to the
acquisition date to the founders of the company. The share is valued at AUD$0.20 per share which is the IPO offer price.
a)
Capital Management
Due to the nature of the Group’s activities, the Group does not have ready access to credit facilities, with the primary source of funding
being equity raisings. Therefore, the focus of the Group’s capital risk management is the current working capital position against the
requirements of the Group to meet research and development programs and corporate overheads. The Group’s strategy is to ensure
appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raising as
required. Any surplus funds are invested with major financial institution
43
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2020
NOTE 15: RESERVES
a)
Share Based Payment Reserve
7,182,822 (31 December 2019: 37,049,314) options on issue
b) Movement in Share Based Payment Reserve
Opening balance as at 1 January 2020
Expensed in the statement of profit or loss and other comprehensive income
Issue of 4,500,000 Advisor's options
Issue of 1,806,816 options
Issue of 547,494 options
Issue of 328,512 options
Closing balance as at 31 December 2020
c)
Foreign currency translation Reserve
2020
US$
1,198,608
2019
US$
952,538
2020
US$
951,397
226,253
17,625
3,740
1,442
1,200,457
Foreign exchange reserve closing balance
2020
US$
157,353
2019
US$
160,343
The foreign currency translation reserve records exchange differences arising on translation from functional currency to presentation
currency.
d)
Predecessor Accounting Reserve
Predecessor accounting reserve closing balance
2020
US$
(159,202)
2019
US$
(159,202)
The reserve arises from the capital reorganisation and records the net liabilities of AppsVillage Australia Limited as at the acquisition
date of 26 August 2019.
44
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2020
NOTE 16: SHARE BASED PAYMENTS
During the year ended 31 December 2020, the Company recorded the following share-based payments:
•
•
•
•
•
The issue of 4,500,000 options with an exercise price of AUD$0.42 and a life of 3 years to AppsVillage Advisors ("Advisor's
Options"), which was approved at the company's 2019 AGM held on 16 June 2020.
The issue of 1,806,816 options with an exercise price of AUD $0.2 and a life of 10 years to certain employees of
AppsVillage.
The issue of 547,494 options with an exercise price of AUD $0.16 and a life of 10 years to certain employees of
AppsVillage.
The issue of 328,512 options exercisable at AUD $0.16 and a life of 10 years to certain employees of AppsVillage.
The issue of 377,781 shares at USD $0.08 for professional services.
Fair Value
Fair value is independently determined using a Black-Scholes option pricing model that takes into account the effective exercise price,
the terms of the option, the share price at grant date and expected price volatility of the underlying share value. This valuation
technique also applies to the Broker options as the value of the service performed could not be reliably determined. The Black Scholes
inputs and valuations were as follows:
Options
Advisor Options
Number of options
Grant date
Issue date
Exercise price AUD $
Expected volatility
Implied option life
4,500,000
16 June 2020
23 June 2020
$0.42
100%
3 years from issue date
Expected dividend yield
Risk free rate
Valuation per option AUD $
Exchange rate
Valuation per option USD $
Total valuation USD $ (i)
Nil
0.248%
$0.0735
0.6844
$0.05
$226,253
Company's
Option Plan
1,806,816
Stock
Company's
Option Plan
328,512
Stock
Company's
Stock
Option Plan
547,494
12 February 2020
12 February 2020
$0.2
100%
10 years from issue
date
Nil
1.06%
0.1644
0.6734
30 September 2020
30 September 2020
$0.16
100%
10 years from issue
date
Nil
0.8%
0.0616
0.716
28 October 2019
28 October 2019
$0.16
100%
10 years from issue
date
Nil
0.8%
0.0593
0.7046
$0.1107
$17,625
0.0441
$1,442
0.0418
$3,740
(i) The total fair valuation of options in FY20 is $249,060 US dollars.
Except for the Company's stock option plan, all options vest immediately.
45
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2020
NOTE 16: SHARE BASED PAYMENTS (Continued)
Broker Options
5,000,000
Warrants
2,000,000
Directors Options
Performance Options
750,000
26,250,000
Options
Number of options
Grant date
Issue date
Exercise price AUD $
Expected volatility
Implied option life
8 August 2019
27 August 2019
$0.30
100%
3 years from date of the
official quotation to ASX
Expected dividend yield
Risk free rate
Valuation per option AUD $
Exchange rate
Valuation per option USD $
Total valuation USD $
Nil
0.69%
$0.1074
0.6763
$0.0726
$363,210
8 August 2019
27 August 2019
$0.30
100%
2.5 years from date of
the official quotation
to ASX
Nil
0.69%
$0.0972
0.6763
$0.0657
$131,499
8 August 2019
27 August 2019
$0.30
100%
3 years from date of
the official quotation
to ASX
Nil
0.69%
$0.1074
0.6763
$0.0726
$54,497
8 August 2019
27 August 2019
$0.20
100%
3 years from date of
the official quotation
to ASX
Nil
0.69%
$0.1235
0.6763
$0.0837
$3,241,960
All options and warrants except for the performance options vest immediately.
Share Based Payments expense
Non-cash share-based payment expense for the full year is comprised as follows:
Issue of 4,500,000 Advisor's options
Issue of 1,806,815 options
Issue of 547,494 options
Issue of 328,512 options
Issue of 2,000,000 warrants
Issue of 750,000 options
Issue of 3,049,314 options
Total share-based payments expense recognised in profit or loss
Performance Options/Rights
Performance Options – Tranche A
Performance Options – Tranche B
Performance Options – Tranche C
Total
2020
US$
226,253
17,625
3,740
1,442
-
-
-
249,060
2019
US$
-
-
-
-
131,499
54,497
103,934
289,930
Number
Options
8,750,000
8,750,000
8,750,000
26,250,000
of
Expense
recognised FY20$
-
-
-
-
46
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2020
NOTE 16: SHARE BASED PAYMENTS (Continued)
Fair value of rights granted
A performance options plan (PROP) was established for the Chief Executive Officer (director), Chief Technology Officer (director) and
other certain key employees. The performance rights were issued on 27 August 2019. The performance rights issued to the CEO and
certain key employees pursuant to the PROP vest based on the achievement of various performance hurdles. The performance rights
have been granted to eligible participants as defined under the Company’s performance rights and option plan. In order to remain an
eligible participant, the employee and director must remain in services to the Group or the right will lapse and not vest.
The performance hurdles for the performance rights and options are based on 3 separate targets relating to the Company’s revenue
targets.
•
•
•
Tranche A Performance Options: will vest and become exercisable upon the Company achieving at least one of the
Customer Collections or ACV revenues of at least AUD $2,500,000 from sales of products and services based on the
Company’s technology, for any 12-month period after Admission and before the Performance Expiry Date.
Tranche B Performance Options: will vest and become exercisable upon the Company achieving at least one of customer
collections or ACV revenues of at least AUD $5,000,000 from total sale of products and services that are based on the
Company’s technology, for any 12-month period after Admission and before the Performance Expiry Date; and
Tranche C Performance Options: will vest and become exercisable upon the Company achieving at least one Customer
Collections or ACV revenues of at least $10,000,000 from total sales of products based and services that are based on
the Company’s technology, for any 12-month period after Admission and before the Performance Expiry Date.
The performance rights will vest on the date the milestone relating to that performance right has been satisfied. In total 26,250,000
performance rights were issued to the CEO and employees. The fair value of the performance rights has not been deemed as the
performance rights are based on non-market conditions. The directors of the Company have deemed the likelihood of the non-market
conditions being achieved as less than likely for Tranche A, Tranche B and Tranche C accordingly, no fair value assessment has been
made in relation to these Tranches.
NOTE 17: OPERATING SEGMENTS
Segment Information
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors
(the chief operating decision makers) in assessing performance and in determining the allocation of resources. The Group’s sole
operating segment is consistent with the presentation of these consolidated financial statements.
47
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements (continued)
For the Year Ended 31 December 2020
NOTE 18: FINANCIAL INSTRUMENTS
a)
Capital management
The Group’s objective when managing capital is to safeguard its ability to continue as a going concern so that it can continue to provide
returns for shareholders and benefits to other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid, return capital to shareholders,
issue new shares or sell assets to reduce debt.
Given the nature of the business, the Group monitors capital on the basis of current business operations and cash flow requirements.
There were no changes in the Group’s approach to capital management during the year.
b)
Categories of financial instruments
Financial Assets
Cash and cash equivalents
Restricted cash
Trade and other receivables
Financial liabilities
Trade and other payables and lease liabilities
2020
US$
818,049
44,772
116,578
979,399
349,617
349,617
2019
US$
2,662,198
28,223
138,884
2,829,305
250,590
250,590
The fair value of the above financial instruments approximates their carrying values.
c)
Financial risk management policies
In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note describes
the Group’s objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative
information in respect of those risks is presented throughout these financial statements.
The board has overall responsibility to the determination of the Group’s risk management objectives and policies and, whilst retaining
ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective
implementation of the objectives and policies to the Group’s finance function. The Group’s risk management policies and objectives
are therefore designed to minimise the potential impacts of those risks on the Group where such impacts mat be material. The board
receives financial reports through which it reviews the effectiveness of the processes put in place and the appropriateness of the
objectives and policies it sets. The overall objective of the board is to set policies that see to reduce risk as far as possible without
unduly affecting the Group’s competitiveness and flexibility.
d) Market risk
Market risk for the Group arises from the use of interest-bearing financial instruments. It is the risk that the fair value or future cash
flows of a financial instrument will fluctuate because of changes in interest rate (see (e) below).
48
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements (continued)
For the Year Ended 31 December 2020
NOTE 18: FINANCIAL INSTRUMENTS (Continued)
e)
Interest rate risk management
The following table illustrates sensitivities to the Group’s exposures to changes in interest rates. The table indicates the impact on how
profit or equity values reported at reporting date would have been affected by changes in the relevant risk variable that management
considers to be reasonably possible. These sensitivities assume that the movement in a particular variable is independent of other
variables.
Floating
Interest
Rate
Non-interest
bearing
2020
Total
Floating
Interest
Rate
Non-interest
bearing
2019
Total
US$
US$
US$
US$
US$
US$
Financial assets
- Within one year
Cash and cash equivalents
Restricted cash
818,049
44,772
-
-
818,049
2,662,198
44,772
28,223
-
-
Trade and other receivables
-
116,578
116,578
-
138,884
2,662,198
28,223
138,884
Total financial assets
862,821
116,578
979,399
2,690,421
138,884
2,829,305
Interest rate
0% to 1.5%
0% to 1.5%
Financial Liabilities
- Within one year
Trade and other Payables and
lease liabilities
Total financial liabilities
Interest rate
-
-
349,617
349,617
349,617
349,617
-
-
250,590
250,590
250,590
250,590
Net financial assets/liabilities 862,821
(232,859)
629,782
2,690,421
(111,703)
2,578,718
Year ended 31 December 2020
+/-1% in interest rates
Year ended 31 December 2019
+/-1% in interest rates
f)
Credit risk
Movement in Profit
US$
Movement in Equity
US$
8,180
26,622
8,180
26,622
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 adopted a policy of dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a
means of mitigating the risk of financial loss from defaults. The Group only transacts with entities that are rated the equivalent of
investment grade and above. This information is supplied by independent rating agencies where available and, if not available, the
Group uses other publicly available information and its own trading records to rates its major customers. The Group’s exposure and
the credit ratings of its counterparties are continuously monitored, and the aggregate value of transactions concluded is spread
amongst approved counterparties.
The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-
rating agencies.
49
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements (continued)
For the Year Ended 31 December 2020
NOTE 18: FINANCIAL INSTRUMENTS (Continued)
g)
Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its
obligations related to financial liabilities. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always
have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate reserves by continuously monitoring forecast and actual cash flows.
The following are the contractual maturities of financial liabilities based on the actual rates at the reporting date excluding interest
payments:
Interest
rate
Less than 6
months
US$
6-12
months
US$
1-2
years
US$
2-5
years
US$
Over 5
years
US$
2020
Trade and other
payables and lease
liabilities
-
-
302,542
302,542
-
-
27,268
19,807
27,268
19,807
-
-
Interest
rate
than 6
Less
months
US$
6-12
months
US$
1-2
years
US$
2-5
years
US$
Over 5
years
US$
2019
Trade and other
payables
-
-
250,590
250,590
-
-
-
-
-
-
-
-
Total
contractual
cash flows
US$
Carrying
amount
US$
349,617
47,075
349,617
47,075
Total
contractual
cash flows
US$
Carrying
amount
US$
250,590
250,590
250,590
250,590
h) Net fair value of financial assets and liabilities
Fair value estimation
Due to the short-term nature of the receivables and payables, the carrying value approximates fair value.
i)
Foreign currency risk
The currency risk is that risk that the value of financial instruments will fluctuate due to change in foreign exchange rates. Currency risk
arises when future commercial transactions and recognised assets and liabilities.
are denominated in a currency that is not the Company’s function currency. The Company is exposed to foreign exchange risk arising
from various currency exposures primarily with respect to the US Dollar (the functional currency of the subsidiary company), the New
Israeli Shekel, the Australian Dollar (functional currency of the parent company). No sensitivity analysis is disclosed as the balances in
foreign currency are immaterial.
50
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2020
NOTE 19: PARENT ENTITY FINANCIAL INFORMATION
The following information of the legal parent AppsVillage Australia Limited has been prepared in accordance with Australian Accounting
Standards and the accounting policies as outlined in Note 1.
2019
US$
1,565,200
-
1,565,200
96,632
-
96,632
1,661,832
7,804,186
547,766
(6,690,120)
1,661,832
(6,690,120)
157,729
(6,532,391)
a)
Financial Position of AppsVillage Australia Limited
ASSETS
Current assets
Non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Non-current liabilities
TOTAL LIABILITIES
NET ASSETS
SHAREHOLDERS’ EQUITY
Issued capital
Reserves
Accumulated losses
SHAREHOLDERS’ EQUITY
2020
US$
304,429
-
304,429
141,063
-
163,366
163,366
9,563,646
1,225,398
(10,625,678)
163,366
b)
Statement of profit or loss and other comprehensive
income
Loss for the year
Other comprehensive income
Total comprehensive loss
(3,935,558)
609,142
(3,326,416)
c)
Guarantees entered into by AppsVillage Australia Ltd for the debts of its subsidiary
There are no guarantees entered into by AppsVillage Ltd.
d)
Contingent liabilities of AppsVillage Australia Ltd
There were no contingent liabilities as at 31 December 2020 (2019: nil).
e)
Commitments by AppsVillage Australia Ltd
There were no commitments as at 31 December 2020 (2019: nil).
NOTE 20: CONTROLLED ENTITIES
The ultimate legal parent entity of the Group is AppsVillage Australia Ltd, incorporated and domiciled in Australia. The consolidated
financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting
policies described in Note 1.
Controlled entity
Country of incorporation
Percentage owned
2020
2019
Parent entity
AppsVillage Australia Limited
Australia
Subsidiaries of AppsVillage Australia Limited
AppsVillage Ltd
Israel
100%
100%
The proportion of ownership interest is equal to the proportion of voting power held.
51
AppsVillage Australia Limited
Notes to the Consolidated Financial Statements
For the Year Ended 31 December 2020
NOTE 21: COMMITMENTS
There are no material commitments at 31 December 2020 (31 December 2019:Nil).
NOTE 22: CONTINGENT LIABILITIES
The Group has no known contingent liabilities as at 31 December 2020 (31 December 2019:Nil).
NOTE 23: EVENTS AFTER THE REPORTING PERIOD
Director's investments
The company has successfully completed the placement for share raising $155K USD.
Capital Raising
The company has successfully completed a placement of institutional and private investors of $465K USD ($600K AUD) before cost.
The company has signed a non-binding term sheet with several investors for raising additional funds in the amount of $2,113K USD.
On March 12, 2021 Andrew Whitten has resigned as Company's Secretary and David Hwang from the Automic company has been
appointed as Company Secretary.
There were no other matters or circumstances have arisen since the end of the financial year which significantly affected or may
significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial
years.
NOTE 24: APPROVAL OF FINANCIAL STATEMENTS
The financial statements were approved by the board of directors and authorised for issue 31 March 2021.
The directors are unaware of any other significant event or circumstance that has arisen since 31 December 2020 that has significantly
affected the Group’s operations, results or state of affairs, or may do so in future years other than those disclosed above.
NOTE 25: APPLICATION OF NEW AND REVISED AUSTRALIAN ACCOUNTING STANDARDS
New, revised or amending Accounting Standards and Interpretations issued and adopted
There are no Australian accounting standards and Interpretations that have recently been issued or amended but are not yet effective
and have not been adopted by the Group for the year ended 31 December 2020 which are expected to have a material impact on the
Group in future reporting periods.
52
AppsVillage Australia Limited
Directors’ Declaration
For the Year Ended 31 December 2020
In the Director’s opinion:
1)
The consolidated financial statements and notes set out on pages 24 to 52 are in accordance with the Corporations Act 2001,
including:
a)
b)
complying with Australian Accounting Standards, Corporations Regulations 2001 and other mandatory professional
reporting requirements, noting the matters documented in Note 1(a);
giving a true and fair view, the consolidated entity’s financial position as at 31 December 2020 and of its performance
for the year ended on that date; and
2)
3)
There are reasonable grounds to believe that the Company will be able to pay its debts ad and when they become due and
payable.
This declaration has been made after receiving the declaration required to be made to the directors in accordance with
Section 295A of the Corporations Act 2001 for the financial year ended 31 December 2020.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors by:
Max Bluvband
Chief Executive Officer
Tel Aviv, 31 March 2021
53
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of AppsVillage Australia Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of AppsVillage Australia Limited (the Company) and its
subsidiaries (the Group), which comprises the consolidated statement of financial position as at
31 December 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 report, including a summary of significant accounting policies
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 31 December 2020 and of its
financial performance for the year ended on that date; 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 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.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an
Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form
part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Material uncertainty related to going concern
We draw attention to Note 1 in the financial report which describes the events and/or conditions which
give rise to the existence of a material uncertainty that may cast significant doubt about the group’s
ability to continue as a going concern and therefore the group may be unable to realise its assets and
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this
matter.
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 of 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. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Accounting for Share-Based Payments
Key audit matter
How the matter was addressed in our audit
During the financial year ended 31 December 2020, the
Our procedures included, but were not limited to:
Group issued equity instruments in the form of shares
and options to eligible employees and other
consultants, which have been accounted for as share-
based payments, as detailed in Note 16 in the financial
report.
Refer to Notes 1(t) and 1(w) in the financial report for
a description of the accounting policy and significant
judgements applied to these arrangements.
Share-based payments are a complex accounting area
and due to the complex and judgemental estimates
used in determining the fair value of share-based
payments. As a result, this is considered a key audit
matter.
•
•
•
•
•
•
Reviewing the relevant agreements to obtain an
understanding of the contractual nature and
terms and conditions of the share-based payment
arrangements;
Reviewing management’s determination of the
fair value of the share-based payments granted,
considering the appropriateness of the valuation
models used and assessing the valuation input;
Evaluating the independence, competence and
objectivity of the managements’ expert to assess
the reasonableness of management’s valuation
inputs;
Assessing the allocation of the share-based
payment expense over management’s expected
vesting period;
Assessing the recognition of share-based
payments as a share issue cost; and
Assessing the adequacy of the related disclosures
in Note 1(t), Note 1(w) and Note 16 in the
financial report.
2
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 31 December 2020, but does not include
the financial report and the 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 Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that 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.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
3
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 15 to 24 of the directors’ report for the
year ended 31 December 2020.
In our opinion, the Remuneration Report of AppsVillage Australia Limited, for the year ended
31 December 2020, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Dean Just
Director
Perth, 31 March 2021
4
ADDITIONAL ASX INFORMATION
The shareholder information set out below was applicable as 19 March 2021.
As at 19 March 2021 there were 1,144 holders of Ordinary Fully Paid Shares.
VOTING RIGHTS
The voting rights of the ordinary shares are as follows:
Subject to any rights or restrictions for the time being attached to any shares or class of shares of the Company, each member of the
Company is entitled to receive notice of, attend and vote at a general meeting. Resolutions of members will be decided by a show of
hands unless a poll is demanded. On a show of hands each eligible voter present has one vote. However, where a person present at a
general meeting represents personally or by proxy, attorney or representation more than one member, on a show of hands the person
is entitled to one vote only despite the number of members the person represents.
On a poll each eligible member has one vote for each fully paid share held.
There are no voting rights attached to any of the options and deferred securities that the Company currently has on issue. Upon exercise
of the options, the shares issued will have the same voting rights as existing ordinary shares.
TWENTY (20) LARGEST SHAREHOLDERS
The names of the twenty largest holders of each class of listed securities are listed below:
Ordinary Full Paid Shares
Holder Name
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
SCOPUS VENTURES FUND I LP
MR CHENBING LI
ARMAND GOLDBERG
MR TAMIR ELIEZER KREMENER
LEARNICON LLC
ILIYA SOFKOV
MISS SAMIRA ABDULRAZAK
MR ABDULKARIM ABDULRAZAK
MR DAN GOTLIEB
TRONIQ PTY LTD
MR KA LU
DR BENJAMIN CHACKO JACOB
MR YORAM LEVY & MS RUTHIE LEVY
ADAM BOYD UPTON & ANNA MARGUERITE COREN
MARTIN SHUSTER
MR PAUL DENNIS GREENBERG
MR JOSEPH YAVIN
MR JOSEPH YAVIN
TOTAL
Total issued capital ‐ selected security class(es)
58
Holding
15,442,576
9,132,361
2,625,669
2,355,367
2,044,255
1,962,610
1,339,285
1,306,964
1,204,777
1,171,970
1,166,493
1,100,000
1,063,000
1,032,062
1,026,701
900,000
857,812
833,333
797,875
% IC
17.13%
10.13%
2.91%
2.61%
2.27%
2.18%
1.49%
1.45%
1.34%
1.30%
1.29%
1.22%
1.18%
1.15%
1.14%
1.00%
0.95%
0.92%
0.89%
686,288
48,049,398
90,130,271
0.76%
53.31%
100.00%
SUBSTANTIAL HOLDERS
The names of the substantial shareholders disclosed to the Company as substantial shareholders as at 19 March 2020 are:
Name
Investment Administration Services Pty Ltd
P.A.C Capital Pty Ltd
MR MOSHE COHEN
DISTRIBUTION OF EQUITY SECURITIES
Ordinary Fully Paid Shares
Holding Ranges
1 ‐ 1,000
1,001 ‐ 5,000
5,001 ‐ 10,000
10,001 ‐ 100,000
100,001 ‐ 9,999,999,999
Totals
No of Shares
Held
% of
Capital
Issued
11,336,703
10,544,165
5,892,353
14.79%
13.75%
8.84%
Holders
28
208
244
550
114
1,144
Total Units
9,052
715,977
2,007,413
19,629,119
67,768,710
90,130,271
% Issued Share Capital
0.01%
0.79%
2.23%
21.78%
75.19%
100.00%
Unmarketable Parcels – 234 Holders with a total of 725,332 shares, based on the last trading price of $0.0.09 on 29 March 2021.
RESTRICTED SECURITIES
As at 19 March 2021, the following shares are subject to escrow:
1,014,857
15,277,548
2,639,248
5,750,000
26,250,000
2,000,000
410,066
Ordinary Fully Paid Shares escrowed 12 months from date of issue
Ordinary Fully Paid Shares escrowed 24 months from date of issue
Unlisted Options Expiring 5 years from quotation @ NIS0.01 escrowed 24 months from quotation
Unlisted Options Expiring 3 years from date of issue @ $0.30 escrowed 24 months from quotation
Unlisted Performance Options escrowed 24 months from quotation
Warrants Expiring 30 months from date of issue $0.30 escrowed 24 months from quotation
Unlisted Options Expiring 5 years from quotation @ NIS0.01 escrowed 12 months from date of issue
UNQUOTED SECURITIES
As at 19 March 2021, the following unquoted securities are on issue:
Unlisted Options Expiring 5 years from quotation @ NIS0.01 – 4 Holders
Holders with more than 20%
Holder Name
MR MAX EITAN BLUVBAND
MR SHAHAR HAJDU & MS RONI HAJDU
Unlisted Options Expiring 3 years from date of issue @ $0.30 – 19 Holders
Holders with more than 20%
Holder Name
GNAT PTY LTD
59
Holding
1,108,457
1,108,457
% IC
42%
42%
Holding
2,578,500
% IC
44.84%
Unlisted Performance Options escrowed 24 months from quotation – 5 Holders
Holders with more than 20%
Holder Name
MR MAX EITAN BLUVBAND
MR SHAHAR HAJDU & MS RONI HAJDU
Warrants Expiring 30 months from date of issue $0.30 – 7 Holders
Holders with more than 20%
Holder Name
ARMAND GOLDBERG & HERTZEL ROSENBLUM
VICTORIA LINDENBAUM
Holding
9,187,500
9,187,500
% IC
35%
35%
Holding
600,000
600,000
% IC
30%
30%
Unlisted Options Expiring 5 years from quotation @ NIS0.01 escrowed 12 months from date of issue – 4 Holders
Holders with more than 20%
Holder Name
NEXTAGE CONSULTING SERVICES (2008) LTD
ILAY RON
ON‐MARKET BUY BACK
There is currently no on‐market buyback program.
ASX LISTING RULE 4.10.19
Holding
193,282
114,526
% IC
47.13%
27.93%
The Company has used its cash and assets in a form readily convertible to cash that it had at the time of listing of the Company’s
securities to quotation in a way consistent with its business objectives.
CORPORATE GOVERNANCE STATEMENT
The Directors of the Company support the principles of corporate governance. The Company’s corporate governance statement is
located in the Company’s website at https://appv.co/public/website/corporate.html.
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