CORPORATE DIRECTORY
Directors
Fred Bart (Chairman)
Ian Dennis
Cheryl Bart AO
Company Secretary
Ian Dennis
Registered Off ice
Israel Corporate Off ice
Level 12
75 Elizabeth Street
SYDNEY NSW 2000
Australia
3 Pekris Street
Rehovot
ISRAEL 76702
Telephone: +61 2 9233 3915
Facsimile: +61 2 9232 3411
Email:
iandennis@audiopixels.com.au
Telephone: + 972 73 232 4444
+ 972 73 232 4455
Facsimile:
danny@audiopixels.com
Email:
Bankers
St George Bank
Level 13
182 George Street
SYDNEY NSW 2000
Australia
Website
www.audiopixels.com.au
Auditor
Deloitte Touche Tohmatsu
Chartered Accountants
Eclipse Tower
Level 19
60 Station Street
Parramatta NSW 2150
Australia
Share Registry
Computershare Investor Services Pty Limited
Level 3
60 Carrington Street
Sydney NSW 2000
GPO Box 7045
Sydney NSW 1115
Australia
Telephone: 1300 855 080 or
Facsimile:
+61 3 9415 5000 outside Australia
1300 137 341
2
4762 Designed and Produced by RDA Creative www.rda.com.au
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273
CONTENTS
Directors’ Report
Auditor’s Independence Declaration
Independent Audit Report
Directors’ Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes To and Forming Part of the Financial Statements
ASX Additional Information
Twenty Largest Ordinary Shareholders
Corporate Governance Statement
2
9
10
12
13
15
16
17
18
46
47
48
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Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 20136Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 DIRECTOR’S REPORT
The Directors of Audio Pixels Holdings Limited submit herewith the financial report of the company for the financial
year ended 31 December 2014. In order to comply with the provisions of the Corporations Act 2001, the directors report
as follows:
The names and particulars of the directors of the company during or since the end of the financial year are:
Name
Fred Bart
Ian Dennis
Cheryl Bart
AO
Particulars
Chairman and Chief Executive Officer. A director since 5 September 2000. He has been Chairman and
Managing Director of numerous private companies since 1980, specialising in manufacturing, property
and marketable securities. Mr Bart is also Chairman of Immunovative Therapies Limited, an Israeli
company involved in the manufacture of cancer vaccines for the treatment of most forms of cancer.
He is a member of the Australian Institute of Company Directors, Chairman of the Audit Committee
and a member of the Nomination and Remuneration Committee.
Non executive director and Company Secretary. Ian is a chartered accountant with experience as
director and secretary in various public listed and unlisted technology companies. He has been
involved in the investment banking industry and stockbroking industry for the past twenty seven years.
Prior to that, Ian was with KPMG, Chartered Accountants in Sydney. Appointed to the Board on
5 September 2000. He is a member of the Australian Institute of Company Directors and a member of
the Audit Committee and Nomination and Remuneration Committee.
Non executive director. Appointed to the Board on 26 November 2001. Cheryl Bart is a lawyer and
company director. She is non‑executive director of ABC (Australian Broadcasting Corporation),
SA Power Networks (formerly ETSA Utilities), Spark Infrastructure Limited, SG Fleet Australia Limited,
Football Federation of Australia (FFA), Australian Himalayan Foundation, and the Local Organising
Committee of the 2015 Australian Asian Cup. She is a fellow of the Australian Institute of Company
Directors, Patron of SportsConnect and a member of Chief Executive Women. She is a member of the
Audit Committee and a member of the Nominations and Remuneration Committee.
Directorships of Other Listed Companies
Directorships of other listed companies held by directors in the 3 years immediately before the end of the financial year are
as follows:
Name
Fred Bart
Ian Dennis
Cheryl Bart
Company
Electro Optic Systems Holdings Limited
Electro Optic Systems Holdings Limited
Spark Infrastructure Group Limited
SG Fleet Australia Limited
Principal Activities
Period of directorship
Since May 2000
Since May 2000
Since November 2005
Since February 2014
The principal activity of the Company is an investment in Audio Pixels Limited of Israel. Audio Pixels Limited is engaged in
the development of digital speakers.
Results
The net loss for the financial year ended to 31 December 2014 was $2,796,787 (31 December 2013 ‑ $2,147,576).
Dividends
The directors recommend that no dividend be paid and no amount has been paid or declared by way of dividend since the
end of the previous financial year and up to the date of this report.
2
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 DIRECTOR’S REPORT
Review of Operations
Digital Speakers
During the reporting period the Consolidated Entity
continued the development of its digital speakers
technologies and its commercialisation into a high
demand product; including but not limited to activities under
development agreements with leading consumer, electronic,
and semiconductor manufacturers.
Management’s focus has been on completing the
objectives of the Phase III of the previously announced
four phase technology commercialization plan.
This multifaceted phase strives to validate and advance
the technology readiness levels of all critical aspects of its
industry‑transforming product. The main objective of the
Phase III was to integrate, test and optimise all components
of the product including the MEMS chip output, ASIC and
package design. The main objective of Phase IV will be to
make all the optimisation changes and complete the final,
commercial product.
On March 3rd 2015, the company publicly released
preliminary measurement results, specifically
Frequency Response specifications. These results not only
substantiated the technology’s advantages over comparable
analog speaker technologies, but exceeded the company’s
own performance objectives. The results demonstrated
sound pressure levels (SPL) within the low frequency
spectrum that were previously believed to be unattainable
within a micro form factor; measuring 80dB (decibels) at
250Hz (at 10cm) for a standalone chip that is half the size of a
standard micro‑speaker. But this is just half the story.
The industry has for decades been relying on frequency
response specifications to describe the quality of a speaker.
However a speaker’s fidelity is not solely dependent on
the width or range of frequencies it can produce, but also
on additional essential attributes. To accurately reproduce
recorded content and sound truly “lifelike” a speaker must also:
(a) Have a “flat” frequency response (i.e. have small
loudness variations between different frequencies
within the audible range). This objective of
reproducing all musically relevant tones, at the
same volume is more commonly known “flat”. In
speakers flat is good, as the “flatter” the response the
closer the speaker is to accurately reproducing the
original sound. Conventional micro speakers have
distinct double‑humped shape with significant variation
(typically 10‑15dB) between the peaks and valleys.
Even high‑end, audiophile speakers have loudness
variations of 1‑3dB within their range.
When examining the preliminary performance
results recently released by the company, one
notices a perfectly linear frequency response “curve”
‑ that is sloped at 6dB per octave. As has been
previously announced the 6dB per octave slope,
which is a native phenomenon to the digital sound
reconstruction technique, is correctable (in real‑time)
via our software algorithms and would result in flatness
variations smaller than 1dB.
In essence what this means is that our speakers
do not impose the physical constraints inherent in
conventional speakers, rather our chips allow the
music to be heard as it was recorded.
(b) Have low harmonic distortion. Distortion is
considered by experts to be perhaps the most
significant problem affecting perceived sound quality.
Typical analog speakers generate certain “amounts” of
harmonic distortion. Harmonic distortion means the
speaker is producing frequencies that are not present
in the original recording (but instead are multiplications
of the recorded frequencies). Typically, the distortion
becomes larger at lower frequencies and can reach
values of 15‑20% in micro‑speakers. For a reference, the
human distortion detection threshold is considered
at 0.25%. The company’s digital speakers have a
maximum distortion level of 0.1%.
(c) Have fast response to transient events. This lesser
known yet critical parameter determines how quickly
or slowly a speaker can faithfully reproduce sudden
waveforms (“transients”). A transient is a short duration,
high level sonic energy peak, such as a hand‑clap or
snare drum hit. To accurately reproduce most any
sound in the percussion family the speaker must
have excellent transient response. The transient
response performance of a conventional speaker
heavily depends on its construction (very light and
stiff membranes) this in addition to having very
low impedance and high damping amplifiers.
AudioPixels’ speaker construction and digital nature can
react to changes in input signal within 3 microseconds
thus offering unprecedented and near perfect
transient response. (For reference, the response of
human hearing is of the order of 50 microseconds).
As outlined, the performance specifications released not
only demonstrate the previously unimaginable advantage
of a 2‑octave (frequency) gain when compared to similar
class micro‑speakers, but additionally validated the accuracy
of “lifelike” tone reproduction.
Ultimately the primary value proposition to industry and
consumers alike is that our digital micro‑loudspeaker chip
should enable manufacturers to be able to produce far
more engaging and qualitative sound experiences, from
devices that are simpler, smaller, thinner, lighter and more
energy efficient.
3
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 20136Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273
DIRECTOR’S REPORT
Review of Operations (Cont.)
ASIC ‑ Manufacturing Assessment
MEMS ‑ Manufacturing Readiness
Assessment
During this reporting period the company received and
meticulously tested the first generation of functional
MEMS chips fabricated by our primary MEMS vendor.
All critical static and dynamic aspects of the chip
were evaluated with nano‑precision using the most
advanced systems available for the evaluation of micro
electro mechanical structures. Overwhelmingly the
fabrication‑run met the prescribed requirements
and expectations; however the depth in which the
assessment was conducted exposed a fabrication
vulnerability that required additional engineering efforts.
Such efforts included collaboration with world leaders
in the field of atomic layer deposition culminating in
demonstrable results that furnish the company with a
number of viable solutions to achieve targeted yields
when in mass production. This issue has been overcome.
MEMS ‑ Electro Acoustic Assessment
When tackling ground breaking technologies it is often
necessary not only to develop the core technology and
its manufacturability but also the means and methods
of analysis and test. To ensure precise validation of the
technology the company designed and built state‑of‑the
art measurement equipment capable of applying
varying methods and methodologies for the concurrent
evaluation of electrical, mechanical and acoustic
properties of the MEMS devices. Expansive testing
conducted with utmost precision is necessary for industry
corroboration of our radically different approach to
loudspeaker technology; one that defies the convention
of an industry deeply entrenched in acoustic principles
originated nearly a century ago.
To date the chips have undergone many millions of
measurement cycles, producing results that have met the
development goals for the MEMS chip.
The novel measurement techniques used, enabled our
engineering team to detect and validate a specific acoustic
phenomenon that even further stretches the acoustic
capabilities of the chip. The newly found transduction
principle (patent pending) permits the recycling of acoustic
elements (“pixels”) at a far more rapid rate, thus nearly
doubling the effective active area of our chip, which in
turn presents cost reduction opportunities that do not
compromise the qualitative performance of the chip.
Collaborative efforts with ICSense have yielded a
successful tape‑out run. The produced ASIC’s have
completed extensive evaluation with overall performance
exceeding the realistic objectives set for this first
generation ASIC. The ASIC will soon be integrated into
our tests systems to allow for evaluation of the ASIC’s
performance using actual MEMS chips.
PACKAGE ‑ Design Assessment
Concerted activities between the company packaging
and assembly partner and a world‑leading advance
Materials Company successfully completed the evaluation
phase and has entered full development of the integrated
chip assembly process and its commercial packaging.
Evaluation prototypes are in production, which will
enable the joint team to assess and refine the production
assembly process and overall package.
Overall Program Status
Phase III is nearing completion as the company has
amassed and validated nearly all essential prerequisites
for Phase IV, which principal objective is the fabrication of
a commercial product. Management has already begun
laying the groundwork required for Phase IV.
Intellectual Property
As pioneers in the field of digital speakers the company
continues to explore numerous opportunities to expand
its intellectual property portfolio, adding 5 new patent
applications during the reporting period.
Further information concerning the operations
and financial condition of the entity can be found
in the financial report and in releases made to the
Australian Stock Exchange (ASX) during the year.
Property Investment
The Company sold its commercial property known as
Lots 3, 4, 25 and 45 at 360 Pacific Highway, Crows Nest
during the year as the property was surplus to the
requirements of the Group.
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Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 DIRECTOR’S REPORT
Changes in State of Affairs
There was no significant change in the state of affairs of
the company or the consolidated entity other than that
referred to in the financial statements or notes thereto.
Significant Events After
Balance Date
There has not been any matter or circumstance that has
arisen since the end of the financial year which is not
otherwise dealt with in this report or in the financial
statements, that has significantly affected or may
significantly affect the operations of the company or the
consolidated entity, the results of those operations or the
state of affairs of the company or the consolidated entity
in subsequent financial years.
Future Developments
The consolidated entity will continue to focus on the
development of its digital speaker technology.
Environmental Regulations
In the opinion of the directors the company and the
consolidated entity is in compliance with all applicable
environmental legislation and regulations.
Indemnification of Officers
and Auditors
During or since the financial year, the company has not
indemnified or made a relevant agreement to indemnify
an officer or auditor of the company or of any related
body corporate against a liability incurred as such an
officer or auditor. In addition, the company has not paid,
or agreed to pay, a premium in respect of a contract
insuring against a liability incurred by an officer or auditor.
Directors’ Interests and Benefits
The relevant interest of each director in the share capital of
the Company as notified by the directors to the Australian
Stock Exchange in accordance with Section 205G(1) of the
Corporations Act as at the date of this report are:
Name
Fred Bart
Ian Dennis
Cheryl Bart
Ordinary Shares
5,441,250
570,050
500,000
Since the end of the previous financial year no director of
the company has received or become entitled to receive
any benefit (other than a benefit included in the aggregate
amount of remuneration received or due and receivable by
directors as shown in the financial statements) because of
a contract made by the company or related corporation
with the director or with a firm of which the director is
a member, or with a company in which the director has
a substantial financial interest. There are no employment
contracts for any of the directors.
Remuneration Report (Audited)
This report outlines the remuneration arrangements in
place for Directors and key management personnel of
the Company.
The Directors are responsible for remuneration policies
and packages applicable to the Board members of
the Company. The entire Board makes up the Nomination
and Remuneration Committee. The broad remuneration
policy is to ensure the remuneration package properly
reflects the person’s duties and responsibilities.
There are currently no performance based incentives
to directors or executives based on the performance of
the Company. There are no employment contracts in place
with any Director of the Company. There are standard
employment contracts for the three executives of
Audio Pixels Limited in Israel including at will employment
and a notice period of three months for termination.
The key management personnel of Audio Pixels
Holdings Limited during the year were:
Name
Ordinary Shares
Fred Bart
Chairman and Chief Executive Officer
Cheryl Bart
Non executive director
Ian Dennis
Non executive director and
company secretary
Danny Lewin CEO and director of Audio Pixels Limited
Yuval Cohen Chief Technical Officer of
Audio Pixels Limited
Shay Kaplan
Chief Scientist of Audio Pixels Limited
The Directors fees are not dependent on the earnings
of the company and the consequences of the
Company’s performance on shareholder wealth.
On 24 September 2010, the maximum total directors
fees were increased to a total of $250,000 per annum
in line with the increased activities of the company.
The actual directors fees paid were within the approved
limit of $250,000 per annum approved by shareholders at
the Annual General Meeting held on 24 September 2010.
5
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 20136Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 DIRECTOR’S REPORT
Remuneration Report (Cont.)
The table below sets out summary information about the company’s earnings and movements in shareholder wealth for
the last 5 financial years.
Year ended
31 December
2014
$
Year ended
31 December
2013
$
Year ended
31 December
2012
$
Year ended
31 December
2011
$
6 Months ended
31 December
2010
$
Year ended
30 June
2010
$
Revenue
181,583
304,536
161,986
269,534
143,207
563,842
Net profit /(loss)
before tax
Net profit/(loss)
after tax
Share price at start
of year/period
Share price at end
of year/period
Dividend Paid
(2,796,787)
(2,147,576)
(2,615,412)
(2,931,907)
(557,129)
237,211
(2,796,787)
(2,147,576)
(2,615,412)
(2,930,697)
(530,606)
197,489
Year ended
31 December
2014
$
Year ended
31 December
2013
$
Year ended
31 December
2012
$
Year ended
31 December
2011
$
6 Months ended
31 December
2010
$
Year ended 30
June
2010
$
3.80
9.86
0.00
5.60
3.80
0.00
6.00
5.60
0.00
4.60
6.00
0.00
0.26
4.60
0.00
0.16
0.26
0.00
The aggregate compensation of the key management personnel of the company is set out below:
Short‑term employee benefits
Post employment benefits
Directors’ Shareholdings
Fred Bart
Ian Dennis
Cheryl Bart
31 December 2014
$
31 December 2013
$
690,224
143,625
833,849
Number
5,441,250
570,050
500,000
618,715
125,668
744,383
Number
5,441,250
570,050
500,000
Mr Fred Bart purchased 200,000 ordinary shares during the year ended 31 December 2013 via a placement approved by shareholders
in general meeting. On 4 September 2013, Ian Dennis purchased 50,000 ordinary shares from Fred Bart at $2.00 each.
Transactions with Related Entities
The company received Nil (year ended 31 December 2013: $14,366) in respect of management fees from 4F Investments
Pty Limited, a company associated with Fred Bart. These management fees are based on a share of actual costs incurred
and do not include a profit mark up.
During the year ended 31 December 2014, the Company paid a total of $107,734 (year ended 31 December 2013 ‑ $107,488)
to 4F Investments Pty Limited, a company associated with Mr Fred Bart in respect of directors fees and superannuation for
Mr Fred Bart and Mrs Cheryl Bart.
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Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 DIRECTOR’S REPORT
Remuneration Report (Cont.)
During the year ended 31 December 2014, the Company paid a total of $41,016 (year ended 31 December 2013 ‑ $40,922)
to Dennis Corporate Services Pty Limited, a company associated with Mr Ian Dennis in respect of directors fees
and superannuation.
During the year, the Company paid $30,000 (31 December 2013 ‑ $30,000) to Dennis Corporate Services Pty Limited,
a company associated with Mr Ian Dennis in respect of consulting fees for company secretarial and accounting services.
On 8 May 2014, the company entered into a lease in respect of office premises at Level 12, 75 Elizabeth Street Sydney for a
period of forty eight months to 30 March 2018. The company recharges 20% ($13,559) of the rent to Electro Optic Systems
Holdings Limited, a company of which Fred Bart and Ian Dennis are directors, 20% ($13,559) to 4F Investments Pty Limited,
a company controlled by Fred Bart and 40% ($27,818) to another tenant who is a shareholder in the company.
Short Term
Post Employment
Total
December 2014
Fred Bart
Cheryl Bart
Ian Dennis
Danny Lewin
Yuval Cohen
Shay Kaplan
December 2013
Fred Bart
Cheryl Bart
Ian Dennis
Danny Lewin
Yuval Cohen
Shay Kaplan
Directors fees/
Salary
$
Non‑monetary
$
Superannuation
$
61,000
37,500
67,500*
139,369
153,941
133,238
592,548
61,000
37,500
67,500*
122,076
133,788
116,724
538,588
‑
‑
‑
30,195
29,135
38,346
97,676
‑
‑
‑
26,475
23,120
30,532
80,127
5,718
3,516
3,516
‑
‑
‑
12,750
5,566
3,422
3,422
‑
‑
‑
12,410
Social
Security
$
‑
‑
‑
42,597
47,178
41,100
130,875
‑
‑
‑
36,931
40,626
35,701
113,258
$
66,718
41,016
71,016
212,161
230,254
212,684
833,849
66,566
40,922
70,922
185,482
197,534
182,957
744,383
* The amounts disclosed for Ian Dennis include directors fees of $37,500 and consulting fees of $30,000.
Audit Committee
The Audit Committee was formally constituted on 29 August 2014 with all three directors appointed to the Audit Committee.
Ian Dennis was appointed chair of the Audit Committee.
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Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 20136Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 DIRECTOR’S REPORT
Directors’ Meetings
During the year the company held three meetings of directors, no meetings of the Audit Committee and no meetings of
the Nomination and Remuneration Committee. The attendances of the directors at meetings of the Board were:
Fred Bart
Ian Dennis
Cheryl Bart
Attended
Maximum
possible attended
3
3
3
3
3
3
All current board members are on the Audit Committee and the Nomination and Remuneration Committee.
Non‑audit Services
Details of amounts paid or payable to the auditor for non‑audit services provided during the year by the auditor are
outlined in Note 4 to the financial statements.
The directors are satisfied that the provision of non‑audit services, during the year, by the auditor (or by another person
or firm on the auditor’s behalf ) is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
The directors are of the opinion that the services disclosed in Note 4 to the financial statements do not compromise the
external auditors’ independence, based on a resolution of directors, for the following reasons:
All non‑audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor, and
None of the services undermine the general principles relating to auditor independence as set out in Code of Conduct
APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional & Ethical Standards Board,
including reviewing or auditing the auditor’s own work, acting in a management or decision‑making capacity for the
company, acting as advocate for the company or jointly sharing economic risks and rewards.
Auditor’s Independence Declaration
The auditor’s independence declaration is included on page 9.
Signed in accordance with a resolution of directors made pursuant to s.298(2) of the Corporations Act 2001.
On behalf of the Directors
I A Dennis
Director
Dated at Sydney this 25 day of March 2015
8
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 9
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 20136Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 12 to 45.
10
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 7 to 9
11
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 20136Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 DIRECTORS’ DECLARATION
The directors declare that:
(a) in the directors’ opinion, there are reasonable grounds to believe the company will be able to pay its debts as and when
they become due and payable;
(b) in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the
Corporations Act 2001, including compliance with accounting standards and give a true and fair view of the financial
position and performance of the company and the consolidated entity;
(c) the directors have been given the declarations required by s.295A of the Corporations Act 2001; and
(d) the attached financial statements are in compliance with International Financial Reporting Standards, as stated in
note 1 to the financial statements.
Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the Corporations Act 2001.
On behalf of the Directors
I A Dennis
Director
Dated at Sydney this 25 day of March 2015.
12
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2014
Consolidated
Year ended
31 December
2014
$
Consolidated
Year ended
31 December
2013
$
181,583
304,536
Note
2
(845,106)
(67,601)
(74,483)
(136,000)
1,107,313
‑
(36,226)
(63,391)
‑
(2,862,876)
(890,428)
(62,000)
(95,509)
(136,000)
1,045,468
(47,375)
(37,043)
‑
(100,000)
(2,129,225)
2
3
(2,796,787)
(2,147,576)
‑
‑
(2,796,787)
(2,147,576)
Revenue
Administrative expenses
Amortisation
Depreciation
Directors fees
Exchange gains
Marketing
Property expenses
(Loss) on sale of property
Reduction in fair value of investment property
Research and development expenses
(Loss) before income tax
Income tax benefit
(Loss) for the year
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit and
loss
Exchange differences arising on translation of foreign operations
15
(738,709)
(857,960)
Other comprehensive (loss) for the year, net of tax
(738,709)
(857,960)
Total comprehensive (loss) for the year
(3,535,496)
(3,005,536)
Notes to the financial statements are included on pages 18 to 45.
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 2013
13
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2014
Consolidated
Year ended
31 December
2014
Consolidated
Year ended
31 December
2013
Note
(2,796,787)
(2,147,576)
(3,535,496)
(3,005,536)
(Loss) attributable to:
Owners of the company
Total comprehensive (loss) attributable to:
Owners of the company
Earnings per share
Basic and diluted (cents per share)
19
(10.88)
(8.46)
Notes to the financial statements are included on pages 18 to 45.
14
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2014
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Assets held for sale
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
Goodwill
Intangible asset
Property, plant and equipment
Trade and other receivables
TOTAL NON CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
Equity attributable to owners of the company
TOTAL EQUITY
Consolidated
December
2014
$
Consolidated
December
2013
$
Note
5
6
7
8
9
10
6
11
12
13
15
16
1,875,504
79,200
‑
1,954,704
4,271,573
132,430
1,500,000
5,904,003
2,124,068
1,992,314
710,346
147,300
6,117
2,987,831
4,942,535
353,008
418,685
771,693
771,693
721,620
170,186
6,072
2,890,192
8,794,195
668,014
419,843
1,087,857
1,087,857
4,170,842
7,706,338
37,398,942
37,398,942
(22,531,358)
(21,792,649)
(10,696,742)
(7,899,955)
4,170,842
4,170,842
7,706,338
7,706,338
Notes to the financial statements are included on pages 18 to 45.
15
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 2013 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2014
December 2014 ‑
Consolidated
Equity
Settled
Option
Reserve
$
Issued
Capital
$
Exchange
translation
reserve
$
Minority
Acquisition
Reserve
$
Accumulated
Losses
$
Total
$
Balance at 1 January 2014
37,398,942
4,512,898
(766,855)
(25,538,692)
(7,899,955)
7,706,338
Other comprehensive
income for the year
‑
‑
(738,709)
‑
‑
(738,709)
(Loss) for the year
‑
‑
‑
‑
(2,796,787)
(2,796,787)
Balance at 31 December 2014
37,398,942
4,512,898
(1,505,564)
(25,538,692)
(10,696,742)
4,170,842
December 2013 ‑
Consolidated
Equity
Settled
Option
Reserve
$
Issued
Capital
$
Exchange
translation
reserve
$
Minority
Acquisition
Reserve
$
Accumulated
Losses
$
Total
$
Balance at 1 January 2013
35,945,405
4,512,898
91,105
(25,538,692)
(5,752,379)
9,258,337
Issue of new shares at
$5.00 each
Issue of new shares at
$1.59 each
Exercise of options
Other comprehensive
income for the year
1,000,000
48,123
405,414
‑
‑
‑
‑
‑
‑
‑
‑
1,000,000
48,123
405,414
‑
‑
(857,960)
‑
‑
(857,960)
(Loss) for the year
‑
‑
‑
‑
(2,147,576)
(2,147,576)
Balance at 31 December 2013
37,398,942
4,512,898
(766,855)
(25,538,692)
(7,899,955)
7,706,338
Notes to the financial statements are included on pages 18 to 45.
16
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2014
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Consolidated
Year ended
31 December
2014
$
Consolidated
Year ended
31 December
2013
$
Notes
153,682
163,113
(4,080,390)
(2,987,225)
44,020
147,544
Net cash (used by) operating activities
17
(3,882,688)
(2,676,568)
Cash flows from investing activities
Payment for property, plant and equipment
Receipts from sale of property
Net cash inflows/(outflows) from investing activities
Cash flows from financing activities
Placement of shares
Exercise of options
Net cash provided by financing activities
Net (decrease) in cash and cash equivalents held
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate fluctuations on the balances of cash held in
foreign currencies
Cash and cash equivalents at the end of the financial year
5
(39,930)
1,436,609
1,396,679
(44,824)
‑
(44,824)
‑
‑
‑
1,048,123
405,414
1,453,537
(2,486,009)
(1,267,855)
4,271,573
5,415,454
89,940
1,875,504
123,974
4,271,573
Notes to the financial statements are included on pages 18 to 45.
17
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 2013 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
1. Summary of Significant
Accounting Policies
Statement of Compliance
The financial report is a general purpose financial
report which has been prepared in accordance with
the Corporations Act 2001, Accounting Standards
and Interpretations, and complies with other requirements
of the law. Accounting Standards include Australian
equivalents to International Financial Reporting Standards
(“A‑IFRS”). Compliance with A‑IFRS ensures that the
financial statements and notes comply with International
Financial Reporting Standards (“IFRS”). For the purposes
of preparing the consolidated financial statements,
the Company is a for profit entity.
The financial statements were authorised for issue by the
Directors on 25 March 2015.
the future trading prospects of the consolidated
entity including obtaining commercial contracts; and
the ability of the company to raise capital from
existing or new shareholders.
If the company and the consolidated entity are unable
to achieve successful outcomes in relation to the
above matters, significant uncertainty would exist as to
the ability of the company and the consolidated entity
to continue as going concerns and therefore, they may
be required to realise their assets and extinguish their
liabilities other than in the normal course of business and
at amounts different from those stated in the financial report.
No adjustments have been made to the financial
report relating to the recoverability and classification
of recorded asset amounts or to the amounts and
classification of liabilities that might be necessary should
the company and the consolidated entity not continue as
going concerns.
Basis of Preparation
(c) Cash and cash equivalents
The financial report has been prepared on the
basis of historical cost, except for the revaluation of
investment property. Cost is based on the fair values
of the consideration given in exchange for assets.
All amounts are expressed in Australian dollars.
(a) Borrowings
Borrowings are recorded initially at fair value, net of
transaction costs. Subsequent to initial recognition,
borrowings are measured at amortised cost with any
difference between the initial recognised amount and the
redemption value being recognised in profit or loss over
the period of the borrowing using the effective interest
rate method.
(b) Going concern
The financial report has been prepared on the going
concern basis which assumes continuity of normal
business activities and the realisation of assets and the
settlement of liabilities in the ordinary course of business.
The consolidated entity incurred a net loss during the
year of $2,796,787 (2013: $2,147,576). Net cash used by
operating activities was $3,882,688 (2013: $2,676,568).
As at 31 December 2014, the consolidated entity
had cash of $1,875,504 (2013: $4,271,573) of which
$29,744 (2013 ‑ $30,677) is restricted as it secures future
lease payments. The cash will become unrestricted if the
contracts are concluded or renegotiated.
In the opinion of the directors, the ability of the company
and consolidated entity to continue as going concerns
and pay their debts as and when they become due and
payable is dependent upon:
Cash and cash equivalents comprise cash on hand,
cash in banks and investments in money market
instruments maturing within less than 3 months at the
date of acquisition, net of outstanding bank overdrafts.
Bank overdrafts are shown within borrowings in current
liabilities in the Statement of Financial Position.
(d) Employee benefits
Provision is made for benefits accruing to employees
in respect of wages and salaries, annual leave, and long
service leave when it is probable that settlement will be
required and they are capable of being measured reliably.
Provisions made in respect of short term employee benefits
are measured at their nominal values using the remuneration
rate expected to apply at the time of settlement.
Provisions made in respect of long term employee
benefits are measured as the present value of the
estimated future cash outflows to be made by the
consolidated entity in respect of services provided by
employees up to the reporting date.
Defined contribution plans ‑ Contributions to defined
benefit contribution superannuation plans are expensed
when incurred.
(e) Financial assets
Financial assets are classified into loans and receivables.
The classification depends on the nature and purpose of
the financial assets and is determined at the time of the
initial recognition.
Loans and receivables
the completion of the development stage of
the technology;
Trade receivables, loans and other receivables are
recorded at amortised cost less impairment.
18
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
1. Summary of Significant
Accounting Policies (Cont.)
(f) Financial instruments issued by
the company
Debt and equity instruments
Debt and equity instruments are classified as either
liabilities or as equity in accordance with the substance of
the contractual arrangement.
Transaction costs on the issue of
equity instruments
Transaction costs arising on the issue of equity
instruments are recognised directly in equity as a
reduction of the proceeds of the equity instruments to
which the costs relate. Transaction costs are the costs
that are incurred directly in connection with the issue of
those equity instruments and which would not have been
incurred had those instruments not been issued.
Interest
Interest is classified as an expense consistent with the
Statement of Financial Position classification of the
related debt.
(g) Foreign currency
Foreign currency transactions
All foreign currency transactions during the financial year are
bought to account using the exchange rate in effect at the
date of the transaction. Foreign currency monetary items at
reporting date are translated at the exchange rate existing at
reporting date. Non‑monetary assets and liabilities carried at
fair value and historic cost that are denominated in foreign
currencies are translated at the rates prevailing at the date
when the fair value was determined.
Exchange differences are recognised in profit and loss in
the period they arise.
Foreign operations
On consolidation, the assets and liabilities of the
consolidated entity’s overseas operations are translated
at exchange rates prevailing at the reporting date.
Income and expense items are translated at the average
exchange rates for the period unless exchange rates
fluctuate significantly. Exchange differences arising, if any,
are recognised in the foreign currency translation reserve,
and recognised in profit and loss on disposal of the
foreign operation.
(h) Goods and Services Tax
Revenues, expenses and assets are recognised net of the
amount of goods and services tax (GST), except:
i. where the amount of GST incurred is not recoverable
from the taxation authority, it is recognised as part of
the cost of acquisition of an asset or as part of an item
of expense; or
ii. for receivables and payables which are recognised
inclusive of GST.
The net amount of GST recoverable from, or payable to,
the taxation authority is included as part of receivables
or payables.
Cash flows are included in the Statement of Cash Flows
on a gross basis. The GST component of cash flows
arising from investing and financing activities which is
recoverable from, or payable to, the taxation authority is
classified as operating cash flows.
(i) Goodwill
Goodwill arising in a business combination is recognised
as an asset at the date that control is acquired (the
acquisition date). Goodwill is measured as the excess of
the sum of the consideration transferred, the amount of
any non‑controlling interests in the acquiree, and the fair
value of the acquirer’s previously held equity interest in
the acquiree (if any) over the net of the acquisition‑date
amounts of the identifiable assets acquired and the
liabilities assumed.
If, after reassessment, the Group’s interest in the fair
value of the acquiree’s identifiable net assets exceeds the
sum of the consideration transferred, the amount of any
non‑controlling interests in the acquiree and the fair value
of the acquirer’s previously held equity interest in the
acquiree (if any), the excess is recognised immediately in
profit or loss as a bargain purchase gain.
Goodwill is not amortised but is reviewed for impairment
at least annually. For the purpose of impairment testing,
goodwill is allocated to each of the Group’s cash‑generating
units expected to benefit from the synergies of the
combination. Cash‑generating units to which goodwill has
been allocated are tested for impairment annually, or more
frequently when there is an indication that the unit may be
impaired. If the recoverable amount of the cash‑generating
unit is less than its carrying amount, the impairment loss
is allocated first to reduce the carrying amount of any
goodwill allocated to the unit and then to the other assets
of the unit pro‑rata on the basis of the carrying amount of
each asset in the unit. An impairment loss recognised for
goodwill is not reversed in a subsequent period.
On disposal of a subsidiary, the attributable amount of
goodwill is included in the determination of the profit or
loss on disposal.
19
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 2013
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
1. Summary of Significant
Accounting Policies (Cont.)
(j) Impairment of assets
At each reporting date, the entity reviews the carrying
amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any).
Where the asset does not generate cash flows that are
independent from other assets, the entity estimates the
recoverable amount of the cash‑generating unit to which
the asset belongs.
If the recoverable amount of an asset (or cash‑generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (cash‑generating unit) is reduced to its
recoverable amount. An impairment loss is recognised in
profit or loss immediately.
Where an impairment loss subsequently reverses,
the carrying amount of the asset (cash‑generating unit)
is increased to the revised estimate of its recoverable amount,
but only to the extent that the increased carrying amount
does not exceed the carrying amount that would have
been determined had no impairment loss been recognised
for the asset (cash‑generating unit) in prior years. A reversal of
an impairment loss is recognised in profit or loss immediately.
(k) Income Tax
Current tax
Current tax is calculated by reference to the amount of
income taxes payable or recoverable in respect of the
taxable profit or tax loss for the period. It is calculated
using tax rates and tax laws that have been enacted or
substantively enacted by reporting date. Current tax for
current and prior periods is recognised as a liability (or asset)
to the extent that it is unpaid (or refundable).
Deferred tax
Deferred tax is recognised on temporary differences
between the carrying amount of assets and liabilities in
the financial statements and the corresponding tax base
of those items.
In principle, deferred tax liabilities are recognised for
all taxable temporary differences. Deferred tax assets
are recognised to the extent that it is probable that
sufficient taxable amounts will be available against which
deductible temporary differences or unused tax losses
and tax offsets can be utilised. However, deferred tax
assets and liabilities are not recognised if the temporary
differences giving rise to them arise from the initial
recognition of assets and liabilities (other than as a result
of business combination) which affects neither taxable
income nor accounting profit.
Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply to the period(s)
when the assets and liability giving rise to them are realised
or settled, based on tax rates (and tax laws) that have
been enacted or substantively enacted by reporting date.
The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from
the manner in which the entity expects, at the reporting
date, to recover or settle the carrying amount of its assets
and liabilities.
Deferred tax assets and liabilities are offset when they
relate to income taxes levied by the same taxation
authority and the company intends to settles its current
tax assets and liabilities on a net basis.
Current and deferred tax for the period
Current and deferred tax is recognised as an expense
or income in profit or loss, except when it relates to
items credited or debited directly to equity, in which
case the deferred tax is also recognised directly in equity,
or where it arises from the initial accounting for a
business combination, in which case it is taken into
account in the determination of goodwill or excess.
(l) Intangible assets
Intangible assets acquired in a
business combination
Intangible assets acquired in a business combination
are identified and recognised separately from goodwill
where they satisfy the definition of an intangible asset and
their fair value can be measured reliably. Subsequent to
initial recognition, intangible assets acquired in a business
combination are reported at cost less accumulated
amortisation and accumulated impairment losses,
on the same basis as intangible assets acquired separately.
The intangible assets are written off on a straight line
basis over 14 years. Expenditure on research activities is
recognised as an expense in the period in which it is incurred.
(m) Investment property
Investment property, which is property held to earn
rentals and/or for capital appreciation, is measured at its
fair value at the reporting date. Gains or losses arising from
changes in the fair value of the investment property are
included in profit or loss in the period in which they arise.
20
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
1. Summary of Significant
Accounting Policies (Cont.)
(n) Leasing
Leases are classified as finance leases whenever the terms
of the lease transfer substantially all the risks and rewards
of ownership to the lessee. All other leases are classified as
operating leases.
The Group as lessor
Income from operating leases is recognised on a
straight‑line basis over the term of the relevant lease.
Initial direct costs incurred in negotiating and arranging
an operating lease are added to the carrying amount of
the leased asset and recognised on a straight‑line basis
over the lease term.
The Group as lessee
Operating lease payments are recognised as an expense
on a straight‑line basis over the lease term, except where
another systematic basis is more representative of the time
pattern in which economic benefits from the leased asset
are consumed. Contingent rentals arising under operating
leases are recognised as an expense in the period in which
they are incurred. In the event that lease incentives are
received to enter into operating leases, such incentives
are recognised as a liability. The aggregate benefit of
incentives is recognised as a reduction of rental expense on
a straight‑line basis, except where another systematic basis is
more representative of the time pattern in which economic
benefits from the leased asset are consumed.
(o) Payables
Trade payable and other accounts payable are recognised
when the entity becomes obliged to make future payments
resulting from the purchase of goods and services.
(p) Provisions
Provisions are recognised when the entity has a present
obligation as a result of a past event, the future sacrifice
of economic benefits is probable, and the amount of the
provision can be measured reliably.
When some or all of the economic benefits required to
settle a provision are expected to be recovered from a
third party, the receivable is recognised as an asset if it
is virtually certain that recovery will be received and the
amount of the receivable can be measured reliably.
The amount recognised as a provision is the best
estimate of the consideration required to settle the
present obligation, taking into account the risks and
uncertainties surrounding the obligation. Where a
provision is measured using the cash flows estimated to
settle the present obligation, its carrying amount is the
present value of those cash flows.
(q) Basis of consolidation
The consolidated financial statements incorporate
the financial statements of the Company and entities
controlled by the Company. Control is achieved when
the Company:
Has power over the investee;
Is exposed, or has rights, to variable returns from
its involvement with the investee; and
Has the ability to use its power to affect its returns.
The Company reassesses 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
listed above.
Consolidation of a subsidiary begins when the
Company obtains control over the subsidiary and ceases
when the Company loses control of the subsidiary.
Specifically, income and expenses of a subsidiary
acquired or disposed of during the year are included in
the consolidated statement of profit or loss and other
comprehensive income from the date the Company
gains control until the date when the Company ceases to
control the subsidiary.
(r) Property, plant and equipment
Fixtures and equipment are stated at cost less accumulated
depreciation and accumulated impairment losses.
Depreciation is recognised so as to write off the cost or
valuation of assets less their residual values over their
useful lives, using the straightline method. The estimated
useful lives, residual values and depreciation method are
reviewed at each year end, with the effect of any changes
in estimate accounted for on a prospective basis.
Assets and disposal groups are classified as held for sale
if their carrying amount will be recovered principally
through a sale transaction rather than through
continuing use. This condition is regarded as met only
when the sale is highly probable and the non‑current asset
(or disposal group) is available for immediate sales in the
present condition. Management must be committed
to the sale, which should be expected to qualify
as a completed sale within one year from the date
of classification. Non‑current assets (and disposal groups)
classified as held for sale are measured at the lower of their
previous carrying amount and fair value less costs to sell.
The following estimated useful lives are used in the
calculation of depreciation:
Computers and related equipment
5 to 15 years
Leasehold improvements
3 to 5 years
Office furniture and equipment
5 to 15 years
21
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 2013 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
1. Summary of Significant
Accounting Policies (Cont.)
(s) Revenue Recognition
Rental revenue comprises revenue earned from the
rental of the premises at 360 Pacific Highway, Crows Nest,
New South Wales. Rental revenue is recognised on a
straight line basis over the term of the relevant lease
(See Note 1(m)). Interest income and distributions
received are recognised on an accrual basis.
(t) Application of New and Revised
Accounting Standards
The Group has adopted all of the new and revised
Standards and Interpretations issued by the Australian
Accounting Standards Board (the AASB) that are relevant
to their operations and effective for the current year.
New and revised Standards and amendments thereof
and Interpretations effective for the current year that are
relevant to the Group include:
AASB 1031 Materiality (2013)
AASB 2012‑3 Amendments to AASB 132 ‑
Offsetting Financial Assets and Financial Liabilities
Impact of the application of AASB 2012‑3
Address inconsistencies in current practice when
applying the offsetting criteria in AASB 132 Financial
Instruments: Presentation. Clarifies the meaning of
“currently has a legally enforceable right of set‑off” and”
simultaneous realisation and settlement”. However this did
not result in any changes to the financial statements.
Impact of the application of AASB 2013‑3
Narrow‑scope amendments to AASB 136 Impairment of
Assets address the disclosure of information about the
recoverable amount of impaired assets if that amount is
based on fair value less costs of disposal.
The application of AASB 2013‑3 has not had any material
impact on the amounts recognised in the consolidated
financial statements.
Impact of the application of AASB 2013‑9
Part B makes amendments to particular Australian
Accounting Standards to delete references to AASB 1031
and minor editorial amendments to various standards.
The application of AASB 2013‑9 has not had any material
impact on the amounts recognised in the consolidated
financial statements.
AASB 2013‑3 Amendments to AASB 136 ‑
Impact of the application of AASB 2011‑4
Recoverable Amount Disclosures
AASB 2013‑9 Amendments to Conceptual
Framework and Materiality ‑ Part B
AASB 2011‑4 Amendments to Australian Accounting
Standards to Remove Individual Key Management
Personnel Disclosure Requirements
Impact of the application of AASB 1031
Revised AASB 1031 is an interim standard that
cross‑references to other Standards and the Framework for
the Preparation and Presentation of Financial Statements
(issued December 2013) that contain guidance on materiality.
The application of AASB 1031 has not had any material
impact on the amounts recognised in the consolidated
financial statements.
Amends AASB 124 Related Party Disclosures to remove the
individual key management personnel (KMP) disclosures
required by Australian specific paragraphs. As a result the
Group only discloses the key management personnel
compensation in total for each of the categories required
by AASB 124.
Such disclosures are more in the nature of governance
disclosures that are better dealt with as part of the
Corporations Act 2001.
The application of AASB 2011‑4 has not had any material
impact on the amounts recognised in the consolidated
financial statements.
22
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
1. Summary of Significant Accounting Policies (Cont.)
(t) Application of New and Revised Accounting Standards (Cont.)
Standards and Interpretations in issue not yet adopted
At the date of authorisation of the financial statements, the Standards and Interpretations listed below were in issue but not
yet effective.
Standard/Interpretation
Effective for annual
reporting periods
beginning on or
after
Expected to be
initially applied in
the financial year
ending
AASB 2014‑1 Amendments to Australian Accounting Standards
1 July 2014
31 Dec 2015
‑ Part A: Annual Improvements 2010‑2012 and 2011‑2013 Cycles
‑ Part B: Defined Benefit Plans: Employee Contributions
‑ Part C: Materiality
AASB 2014‑1 Amendments to Australian Accounting Standards
1 Jan 2018
31 Dec 2018
‑ Part D Consequential amendments arising from AASB 14
‑ Part E: Financial Instruments
AASB 15 Revenue from Contracts with Customers and relevant
amending standards
AASB 9 Financial Instruments and relevant amending accounting
standards
AASB 2014‑4 Amendments to Australian Accounting Standards ‑
Clarification of Acceptable Methods of Depreciation and Amortisation
1 Jan 2017
31 Dec 2017
1 Jan 2018
31 Dec 2018
1 Jan 2016
31 Dec 2016
The directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material
financial impact on the financial statements of the company or the consolidated entity but may change disclosures made.
(u) Share based payments
Equity‑settled share‑based payments are measured at fair value at the date of the grant. Fair value is measured by use of
a Black‑Scholes Option Pricing model. The expected life used in the model has been adjusted, based on management
best estimates, for the effects of non‑transferability, exercise restrictions and behavioural considerations. The fair value
determined at the grant date of the equity‑settled share based payments is expensed on a straight‑line basis over the
vesting period, based on the consolidated entity’s estimate of shares that will eventually vest.
23
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 2013 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
1. Summary of Significant
Accounting Policies (Cont.)
(v) Critical accounting judgements
In the application of the consolidated entity’s
accounting policies, management is required to
make judgements, estimates and assumptions about
carrying values of assets and liabilities that are not readily
apparent from other sources. The estimates and associated
assumptions are based on historical experience and various
other factors that are believed to be reasonable under
the circumstance, the results of which form the basis of
making these judgements. Actual results may differ from
these estimates.
The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised
if the revision affects only that period, or in the period of
the revision and future periods if the revision affects both
current and future periods.
Key sources of estimation uncertainty
The following are the key assumptions concerning
the future, and other key sources of estimation uncertainty
at the balance sheet date, that have a significant risk of
causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year:
Intangible asset/Goodwill
The directors made a critical judgement in relation to the
value of the intangible asset included in Note 9 and the
impairment model used in accessing the carrying amount
of the goodwill (see Note 8).
Deferred tax
The directors made a critical judgement in relation to
not recognising the deferred tax balances described
in Note 3(b). The directors do not currently consider its
probable that sufficient taxable amounts will be available
against which deductible temporary differences can
be utilised.
24
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
2. (Loss) from Operations
(a) Revenue
Interest received ‑ other entities
Management fees ‑ related parties
Management fees ‑ other
Rental income
Total revenue
(b) Expenses
Reduction of fair value of investment property
Loss on sale of property
Amortisation
Depreciation
Employee benefits expense:
Other employee benefits
Superannuation
3. Income Taxes
(a) Income tax recognised in profit or loss
Tax expense comprises:
Tax expense/(income) ‑ prior year
Deferred tax expense/(income)
Total tax expense/(income)
The prima facie income tax expense on pre‑tax accounting profit reconciles to the
income tax expense in the financial statements as follows:
(Loss) from operations
Amortisation
Loss on sale of property
Impairment of property
Consolidated
Year ended
31 December
2014
$
Consolidated
Year ended
31 December
2013
$
44,020
‑
1,600
135,963
181,583
‑
63,391
67,601
74,483
142,652
14,366
‑
147,518
304,536
100,000
‑
62,000
95,509
1,464,298
12,750
1,477,048
1,370,483
12,410
1,382,893
‑
‑
‑
‑
‑
‑
(2,796,787)
(2,147,576)
67,601
63,391
‑
(2,665,795)
62,000
‑
100,000
(1,985,576)
25
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 2013 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
3. Income Taxes (Cont.)
Income tax expense calculated at 30%
Effect of different tax rates of subsidiaries operating in other jurisdictions
Deferred tax benefit not brought to account
31 December
2014
$
31 December
2013
$
(799,739)
(595,673)
175,310
624,429
‑
143,931
451,742
‑
The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities on
taxable profits under Australian tax law and 25% under Israeli law. There has been no change in the corporate tax rate when
compared with the previous reporting period.
(b) Unrecognised deferred tax balances
The following deferred tax assets have not been bought to account as assets:
Tax losses ‑ revenue
Tax losses ‑ capital
Temporary differences
(c) Franking account balance
Adjusted franking account balance
(d) Israeli Tax Ruling
2,417,588
168,038
(104,671)
2,480,955
1,793,129
‑
(104,961)
1,688,168
86,721
86,721
On July 16th 2012 a Tax Ruling was issued by the Israeli Tax Authorities (ITA) under which the ITA confirmed that the Merger
carried out between Audio Pixels Ltd, a private Israeli company (P.C 513853606) and Audio Pixels Holdings Limited, a public
Australian company, complies with the conditions stipulated in Section 103T of the Israeli Ordinance. Consequently, the
transfer of the rights by the transferring rights holders in exchange for the issuance of shares in the Australian company is
not taxable at the date of the Merger pursuant to the provisions of Section 103T of the Israeli Ordinance.
26
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
4. Remuneration of Auditors
(i) Auditor of the parent entity
Audit or review of the financial statements
Taxation service
(ii) Network firm of the parent entity auditor
Audit or review of the financial statements
Taxation service
The auditor of Audio Pixels Holdings Limited is Deloitte Touche Tohmatsu.
5. Cash and Cash Equivalents
Cash on hand and at bank
Weighted average interest rate received on cash
6. Trade and Other Receivables
Current
GST receivable
Prepayments
Trade debtors
Current debtors are receivable within 30 days
Non Current
Other debtors
Other debtors comprise security deposits with government bodies.
31 December
2014
$
31 December
2013
$
32,300
2,500
34,800
17,614
5,594
23,208
27,050
4,500
31,550
15,586
‑
15,586
1,875,504
4,271,573
1.97%
1.98%
8,116
71,084
‑
79,200
69
118,838
13,523
132,430
6,117
6,072
27
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 2013 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
7. Asset Held for Sale
Strata title commercial property
31 December
2014
$
31 December
2013
$
‑
1,500,000
In 2013 the fair value of the Strata Title commercial property was determined in accordance with a valuation carried out on
14 February 2014 by Landmark White (Sydney) Pty Limited, independent valuers not related to the company. The valuation
which conforms to Australian Valuation Standards was arrived at by reference to market evidence of transaction prices for
similar properties and capitalisation of the net rental income at a rate of 7.25%.
The property was sold during the course of the 2014 year.
8. Goodwill
Being goodwill acquired on the acquisition of Audio Pixels Limited. The goodwill
is allocated to the cash generating unit of digital speakers by Audio Pixels Limited
of Israel.
Balance at 1 January
Net foreign currency exchange
Balance at 31 December
2,124,068
1,992,314
1,992,314
131,754
2,124,068
1,840,135
152,179
1,992,314
The recoverable amount of this cash generating unit is determined based on a fair value less costs of disposal calculation
which uses cash flow projections based on financial budgets approved by the directors covering an 11 year period,
with a growth rate reflecting the expected future growth in the product market, and a discount rate of 24% per annum.
The cash flow projections used in the impairment model extend beyond 5 years as the intangible assets generating the
cash flows within relate to new technology and hence reflect a longer operating cycle and time to market. Cash flow
projections during the budget period are based on the same expected gross margins and raw materials price inflation
during the budget period and factor in a probability of the viability of the product. The directors believe that any
reasonable possible change in the key assumptions on which recoverable amount is based would not cause the aggregate
carrying value to exceed the aggregate recoverable amount of the cash generating unit. Movements in the value of the
goodwill are a result of the retranslation of the goodwill from the functional currency of the cash generating unit to which
it is attributed.
9. Intangible Asset
Being the independent valuation of In Process Research and Development
determined at the acquisition date of 24 September 2010 by Ernst & Young, Israel
in their report dated 17 August 2011.
Exchange differences on translation
Less accumulated amortisation
868,000
868,000
111,447
(269,101)
710,346
55,120
(201,500)
721,620
28
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
10. Property, Plant and Equipment
Computers and related equipment ‑ at cost
Less accumulated depreciation
Leasehold improvements ‑ at cost
Less accumulated depreciation
Office furniture and equipment ‑ at cost
Less accumulated depreciation
31 December
2014
$
31 December
2013
$
296,039
(274,730)
21,309
199,132
(198,722)
410
829,720
(704,139)
125,581
255,609
(237,415)
18,194
183,065
(182,604)
461
742,611
(591,080)
151,531
Total net book value of Property, Plant and Equipment
147,300
170,186
Cost
Computers and related equipment
Balance at 1 January
Additions
Net foreign currency exchange differences
Balance as at 31 December
Leasehold improvements
Balance at 1 January
Net foreign currency exchange differences
Balance as at 31 December
255,609
17,997
22,433
296,039
183,065
16,067
199,132
211,659
8,172
35,778
255,609
156,595
26,470
183,065
29
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 2013 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
10. Property, Plant and Equipment (Cont.)
Office furniture and equipment
Balance at 1 January
Additions
Net foreign currency exchange differences
Balance as at 31 December
Accumulated depreciation
Computers and related equipment ‑ at cost
Balance as at 1 January
Net foreign currency exchange differences
Depreciation expense
Balance at 31 December
Leasehold improvements
Balance as at 1 January
Net foreign currency exchange differences
Depreciation expense
Balance at 31 December
Office furniture and equipment
Balance as at 1 January
Net foreign currency exchange differences
Depreciation expense
Balance at 31 December
31 December
2014
$
31 December
2013
$
742,611
21,933
65,176
829,720
(237,415)
(21,530)
(15,785)
(274,730)
(182,604)
(16,031)
(87)
(198,722)
(591,080)
(54,448)
(58,611)
(704,139)
603,883
36,652
102,076
742,611
(180,508)
(32,569)
(24,338)
(237,415)
(156,129)
(26,398)
(77)
(182,604)
(439,659)
(80,327)
(71,094)
(591,080)
11. Trade and Other Payables
Current
Trade payables and accruals
The payables are non interest bearing and have an average credit period of 30 days.
12. Provisions
Employee benefits
353,008
668,014
418,685
419,843
30
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
13. Issued Capital
Issued and paid up capital
Fully paid Ordinary Shares
Balance at the beginning of the financial year
Issue of shares at $5.00 each for cash
Issue of shares at $1.59 each for cash
Issue of shares on exercise of options
Balance at the end of the financial year
Fully paid Ordinary Shares
Balance at the beginning of the financial year
Issue of shares at $5.00 each for cash
Issue of shares $1.59 each for cash
Issue of shares on exercise of options
Balance at the end of the financial year
31 December
2014
$
31 December
2013
$
37,398,942
‑
‑
‑
37,398,942
35,945,405
1,000,000
48,123
405,414
37,398,942
Number
Number
25,707,047
24,409,985
‑
‑
200,000
30,183
‑
1,066,879
25,707,047
25,707,047
Fully paid ordinary shares carry one vote per share and carry the rights to dividends.
Changes in the Corporations Law abolished the authorised capital and par value concept in relation to share capital from
1 July 1998. Therefor the company does not have a limited amount of authorised capital and issued shares do not have
a par value.
14. Options Issued to Founders and Staff
On 13 January 2011, shareholders approved the issue of 1,066,879 unlisted options at an exercise price of 38 cents to the
founders and staff of Audio Pixels Limited of Israel. These 1,066,879 unlisted options were issued on 11 February 2011.
All the 1,066,879 options were exercised during the prior year raising $405,414. There are no options outstanding at
balance date or the date of this report.
Each share option converted to one ordinary share in Audio Pixels Holdings Limited. The options carried neither rights to
dividends nor voting rights.
The allocation of the options between the founders and staff was as follows:
Founders
Staff
Number
919,879
147,000
1,066,879
Value
$
3,891,088
621,810
4,512,898
The value of the options issued to the three founders was allocated to the minority acquisition reserve and the value of the
options issued to staff was treated as share based payments in the 31 December 2011 profit and loss account.
31
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 2013 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
2014
2013
Weighted
Average
Exercise price
$
Number
14. Options Issued to Founders and Staff (Cont.)
Balance at the beginning of the financial year
‑
Exercised during the year
Balance at the end of the financial year
Exercisable at end of year
‑
‑
‑
‑
‑
‑
‑
Weighted
Average
Exercise price
$
0.38
0.38
‑
‑
Number
1,066,879
(1,066,879)
‑
‑
These 1,066,879 options were subject to a voluntary escrow which expired on 11 February 2013.
15. Reserves
Foreign currency translation
Balance at the beginning of the financial year
Translation of foreign operations
Balance at end of financial year
Foreign currency translation
31 December
2014
$
31 December
2013
$
(766,855)
(738,709)
(1,505,564)
91,105
(857,960)
(766,855)
Exchange differences relating to the translation of the results and net assets of the Group’s foreign operations from their
functional currencies to the Group’s presentation currency (i.e. Australian dollars) are recognised directly in other comprehensive
income and accumulated in the foreign currency translation reserve. Exchange differences previously accumulated in the
foreign currency translation reserve are reclassified to profit and loss on the disposal of the foreign operation.
Equity settled option reserve
Balance at the beginning of the financial year
Balance at end of financial year
The above equity‑settled option reserve relates to share options granted by the Company.
Minority acquisition reserve
Balance at the beginning of the financial year
Balance at end of financial year
4,512,898
4,512,898
4,512,898
4,512,898
(25,538,692)
(25,538,692)
(25,538,692)
(25,538,692)
The minority interest reserve comprises amounts related to the acquisition of a
minority interest shareholding in a subsidiary company in a prior period.
Total Reserves
(22,531,358)
(21,792,649)
16. Accumulated Losses
Balance at the beginning of the financial year
(Loss) for the year attributable to owners of the company
Balance at the end of the financial year
(7,899,955)
(2,796,787)
(10,696,742)
(5,752,379)
(2,147,576)
(7,899,955)
32
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
31 December
2014
$
31 December
2013
$
17. Notes to the Statement of Cash Flows
(a) Reconciliation of cash and cash equivalents
For the purposes of the statement of cash flows, cash includes cash on hand and at call deposits with banks or financial
institutions, investments in money market instruments maturing within less than 3 months at the date of acquisition.
Cash and cash equivalents at the end of the financial year as shown in the statement of cash flows is reconciled to the
related items in the statement of financial position as follows:
Cash and cash equivalents
1,875,504
4,271,573
(b) Restricted cash
Cash held as security for future lease payments
29,744
30,667
(c) Reconciliation of (loss) for the period to net cash flows from operating activities
(Loss) after related income tax
Reduction in fair value of investment property
Loss on sale of property
Amortisation
Depreciation
Foreign exchange
Changes in assets and liabilities
(Increase)/ decrease in assets
Current trade and other receivables
Non‑current trade and other receivables
Increase /(decrease) in liabilities
Provisions
Current trade payables
(2,796,787)
(2,147,576)
‑
63,391
67,601
74,483
100,000
‑
62,000
95,509
(1,028,397)
(1,214,263)
53,230
(45)
(1,158)
(315,006)
(73,595)
7,786
151,828
341,743
Net cash (used in) operating activities
(3,882,688)
(2,676,568)
33
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 2013 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
18. Related Party Transactions
(a) Directors
The Directors of Audio Pixels Holdings Limited in office during the year were Fred Bart, Ian Dennis and Cheryl Bart.
(b) KMP Remuneration
The aggregate compensation of the key management personnel of the company is set out below:
Short‑term employee benefits
Post employment benefits
31 December
2014
$
31 December
2013
$
690,224
143,625
833,849
618,715
125,668
744,383
The remuneration above relates to directors fees and superannuation paid to entities associated with Fred Bart, Cheryl Bart
and Ian Dennis and the remuneration of the three senior executives of Audio Pixels Limited in Israel.
(c) Transactions with related entities
The company received Nil (year ended 31 December 2013: $14,366) in respect of management fees from 4F Investments
Pty Limited, a company associated with Fred Bart. These management fees are based on a share of actual costs incurred
and do not include a profit mark up.
During the year ended 31 December 2014, the Company paid a total of $107,734 (year ended 31 December 2013 ‑ $107,488)
to 4F Investments Pty Limited, a company associated with Mr Fred Bart in respect of directors fees and superannuation for
Mr Fred Bart and Mrs Cheryl Bart.
During the year ended 31 December 2014, the Company paid a total of $41,016 (year ended 31 December 2013 ‑ $40,922)
to Dennis Corporate Services Pty Limited, a company associated with Mr Ian Dennis in respect of directors fees
and superannuation.
During the year, the Company paid $30,000 (31 December 2013 ‑ $30,000) to Dennis Corporate Services Pty Limited,
a company associated with Mr Ian Dennis in respect of consulting fees for company secretarial and accounting services.
On 8 May 2014, the company entered into a lease in respect of office premises at Level 12, 75 Elizabeth Street Sydney for a
period of forty eight months to 30 March 2018. The company recharges 20% ($13,559) of the rent to Electro Optic Systems
Holdings Limited, a company of which Fred Bart and Ian Dennis are directors, 20% ($13,559) to 4F Investments Pty Limited,
a company controlled by Fred Bart and 40% ($27,818) to another tenant who is a shareholder in the company.
34
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
19. Earnings per Share
Basic (loss) per share
Diluted (loss) per share
(Loss) (a)
31 December
2014
$
31 December
2013
$
(10.88 cents)
(8.46 cents)
(10.88 cents)
(8.46 cents)
(2,796,787)
(2,147,576)
Weighted average number of Ordinary Shares
25,707,047
25,395,498
(a) (Loss) used in the calculation of basic earnings per share are the same as the net (loss) in the Statement of profit or loss and other comprehensive income.
Diluted (loss) per share
There were 1,066,879 unlisted options exercisable at 38 cents which were exercised prior to the expiry date on
31 March 2013 which were potential ordinary shares which were considered to be antidilutive as they would result in a
reduction in the loss per share if exercised. Accordingly as per AASB 133 the basic earnings per share is the same as diluted
earnings per share as no adjustment has been made for the antidilutive potential ordinary shares.
35
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 2013 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
20. Segment Information
AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Group
that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to
assess performance.
The identification of the Group’s reportable segments has not changed from those disclosed in the previous 2013 report.
The Group’s reportable segments are property investment and digital speakers.
The consolidate entity operates in Australia and Israel.
Products and services within each segment
Property Investment
The parent company had a commercial strata property in Australia which was sold during the financial year. The company
derived rental revenue from the property.
Digital speakers
The subsidiary company in Israel is developing a digital speaker and has not reached the stage of having any revenue.
31 December
2014
31 December
2013
135,963
‑
135,963
45,620
181,583
36,436
(2,878,843)
(2,842,407)
45,620
(2,796,787)
‑
147,518
‑
147,518
157,018
304,536
10,475
(2,315,069)
(2,304,594)
157,018
(2,147,576)
‑
(2,796,787)
(2,147,576)
Segment Revenues
Property investment
Digital speakers
Total of all segments
Unallocated interest revenue
Total
Segment Results
Property investment
Digital speakers
Total of all segments
Unallocated
(Loss) before income tax
Income tax gain/ (expense)
(Loss) for the period
36
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
20. Segment Information (Cont.)
The consolidated entity had one customer who provided 100% of the rental income for the year ended 31 December 2014
and 100% for the year ended 31 December 2013.
Segment Assets and Liabilities
Property investment
Digital speakers
Total all segments
Unallocated *
Consolidated
Assets
Liabilities
31 December
2014
31 December
2013
$
31 December
2014
31 December
2013
$
‑
3,058,915
3,058,915
1,883,620
4,942,535
1,513,523
3,009,030
4,522,553
4,271,642
8,794,195
‑
771,693
771,693
‑
771,693
‑
1,087,857
1,087,857
‑
1,087,587
*The unallocated amount represents cash and GST receivable.
Assets used jointly by reportable segments are allocated on the basis of the revenue earned by the individual
reportable segments.
Other Segment Information
Depreciation and amortisation
of segment assets
31 December
2014
31 December
2013
$
Acquisition of segment assets
31 December
2014
31 December
2013
$
‑
142,084
142,084
‑
142,084
‑
157,509
157,509
‑
157,509
‑
39,930
39,930
‑
39,930
‑
44,824
44,824
‑
44,824
Property investment
Digital speakers
Total all segments
Unallocated
Consolidated
37
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 2013 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
20. Segment Information (Cont.)
Information on Geographical Segments
Geographical Segments
31 December 2014
Australia
Israel
Total
31 December 2013
Australia
Israel
Total
Revenue
from External
Customers
$
181,574
9
181,583
304,536
‑
304,536
Segment
Assets
$
1,471,032
3,471,503
4,942,535
5,674,251
3,119,944
8,794,195
Acquisition
of Segment
Assets
$
‑
39,930
39,930
‑
44,824
44,824
38
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
21. Financial Risk Management Objectives and Policies
The consolidated entity’s principal financial instruments comprise receivables, payables, cash and short term deposits.
Due to the small size of the group significant risk management decisions are taken by the board of directors. These risks
include market risk (including fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.
The Directors do not plan to eliminate risk altogether, rather they plan to identify and respond to risks in a way that creates
value for the company and its shareholders. Directors and shareholders appreciate that in order for the consolidated entity
to compete and grow, a long term strategy needs to involve risk taking for reward.
The consolidated entity does not use derivative financial instruments to hedge these risk exposures.
Risk Exposures and Responses
(a) Interest rate risk
The Group’s exposure to market interest rates relates primarily to the consolidated entity’s cash holdings and short
term deposits.
At balance date, the consolidated entity had the following mix of financial assets exposed to Australian interest rate risk that
are not designated in cash flow hedges:
Financial assets
Cash and cash equivalents
31 December
2014
$
31 December
2013
$
1,875,504
4,271,573
The Group constantly analyses its interest rate exposure. Within this analysis consideration is given to potential renewals of
existing positions, alternative financing and the mix of fixed and variable interest rates.
At 31 December 2014, if interest rates had moved, as illustrated in the table below, with all other variables held constant,
post tax (loss) and equity would have been affected as follows:
Judgements of reasonably
possible movements
Post Tax Profit
Higher/(Lower)
Equity
Higher/(Lower)
Consolidated entity
+1% (100 basis points)
‑.5% (50 basis points)
31 December
2014
$
31 December
2013
$
31 December
2013
$
31 December
2013
$
18,695
(9,438)
42,530
(21,443)
18,695
(9,438)
42,630
(21,443)
The movements in profits are due to higher/lower interest rates on cash and cash equivalents balances. The cash and cash
equivalents balances were lower in December 2014 than in December 2013 and accordingly the sensitivity is lower.
39
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 2013 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
21. Financial Risk Management Objectives and Policies (Cont.)
(b) Foreign currency risk
The consolidated entity has a foreign currency risk since the acquisition of Audio Pixels Limited. Audio Pixels Limited
operates in Israel and all transfer of funds to Audio Pixels Limited are denominated in US dollars. The consolidated entity
does not hedge its US dollar exposure.
The carrying amounts of the Group’s foreign currency (US$) denominated monetary assets and monetary liabilities at the
end of the reporting period are as follows:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Liabilities
Assets
31 December
2014
$
31 December
2013
$
31 December
2014
$
31 December
2013
$
‑
‑
‑
‑
330,415
392,479
456,829
43,540
‑
1,024,765
116,349
‑
All US$ denominated financial instruments were translated to A$ at 31 December 2014 at the exchange rate of 0.8158
(2013: 0.8874).
At 31 December 2014 and 31 December 2013, had the Australian Dollar moved, as illustrated in the table below, with all
other variables held constant, post tax loss and equity would have been affected as follows:
Judgements of reasonably possible
movements
Post Tax Loss
Higher/(Lower)
Equity
Higher/(Lower)
Consolidated
AUD/USD +10%
AUD/USD ‑5%
2014
$
2013
$
2014
$
2013
$
318,745
(184,537)
261,693
(151,506)
318,745
(184,537)
261,693
(151,506)
Management believes the balance date risk exposures are representative of risk exposure inherent in financial instruments.
(c) Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to
the Group. The consolidated entity has adopted a policy of only dealing with creditworthy counterparties which are
continuously monitored. Rental revenue is due in advance.
The credit risk on liquid funds is limited because the counterparties are major banks with high credit‑ratings assigned by
international credit agencies.
40
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
21. Financial Risk Management Objectives and Policies (Cont.)
(d) Liquidity risk management
The consolidated entity’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. The consolidated entity’s investments in money market instruments all have a
maturity of less than 3 months.
Ultimate responsibility for liquidity risk management rests with the board of directors, who have built an appropriate risk
management framework for the management of the consolidated entity’s short, medium and long term funding and liquidity
requirements. The consolidated entity manages liquidity by maintaining adequate cash reserves by continuously monitoring
forecast and actual cash flows and managing maturity profiles of financial assets.
The following tables detail the consolidated entity’s remaining contractual maturity for its non‑derivative financial assets.
The tables have been drawn up based on the undiscounted contractual maturities of the financial assets including interest that
will be earned on these assets except where the consolidated entity anticipates that the cash flow will occur in a different period.
Weighted
average effective
interest rate
%
0.00
1.97
0.00
1.98
Less than
1 month
$
355,586
1,523,002
962,021
3,316,608
1‑3 months
$
3 months
to 1 year
$
1‑5 years
$
‑
6,168
‑
14,110
‑
27,756
‑
63,497
‑
‑
‑
‑
31 December 2014
Non interest bearing
Fixed rate instruments
31 December 2013
Non interest bearing
Fixed rate instruments
All financial liabilities are expected to be settled under commercial terms of within 3 months.
(e) Commodity price risk
The consolidated entity has no exposure to commodity price risk.
(f) Other price risks
The directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the
financial statements approximate their fair values.
41
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 2013 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
22. Financial Instruments
Fair value of financial instruments
This note provides information about how the Group determines fair values of various financial assets and financial liabilities.
Prior to its sale the Strata Title property held for resale was the only asset in the Group measured at fair value. The fair value
determined at 31 December 2013 was $1,500,000. The fair value hierarchy was Level 3.
Movement schedule
Balance at the beginning of the financial year
Proceeds of sale received
Total gains/(losses) in profit/(loss)
Balance at end of financial year
Sensitivity schedule
31 December
2014
$
31 December
2013
$
1,500,000
(1,436,609)
(63,391)
‑
1,600,000
‑
(100,000)
1,500,000
Movements in the valuation of the property have sensitivity to the capitalisation rate. Increases in the capitalisation rate
would result in a lower property valuation and vice versa.
23. Subsequent Events
Apart from the announcement of the performance specifications on 3 March 2015, the Directors are not aware of any
significant events since the end of the financial year and up to the date of this report.
42
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
24. Parent Entity Disclosures
Financial position
Assets
Current assets
Non‑current assets
Total assets
Liabilities
Current liabilities
Non‑current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
(Accumulated losses)/Retained earnings
Total equity
Financial performance
Profit/(Loss) for the period
Other comprehensive income
25. Controlled Entity
Name of Entity
Parent Entity
31 December
2014
$
31 December
2013
$
14,598,637
2,428,209
12,215,449
4,028,209
17,026,846
16,243,658
22,593
‑
16,415
‑
22,593
16,415
17,004,253
16,227,243
37,398,942
37,398,942
(21,025,794)
(21,025,794)
631,105
(145,905)
17,004,253
16,227,243
777,010
‑
777,010
793,046
‑
793,046
Country of
Incorporation
31 December
2014
%
31 December
2013
%
Audio Pixels Holdings Limited
Australia
Controlled Entity
Audio Pixels Limited
Israel
100.00
100.00
43
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 2013 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
26. Leases
Operating leases ‑ leasing arrangements (the Company as lessor)
The strata title property was sold during the year. Operating leases in the prior year relate to the strata title property owned
by the consolidated entity with a remaining lease term of thirty three months to 30 September 2016, with an option for a
further term of three years. The operating leases contain rental review clauses. The lessee does not have an option to buy
the property at the expiry of the lease period.
Non‑cancellable operating lease receivables
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Longer than 5 years
31 December
2014
$
31 December
2013
$
‑
‑
‑
‑
147,518
358,153
‑
505,671
Operating leases ‑ leasing arrangements (the Company as lessee)
Previously the parent company entered into a sublease arrangement in respect of its head office premises at Level 12,
75 Elizabeth Street, Sydney NSW commencing on 29 October 2012 for a period of 17 months to 30 March 2014.
On 8 May 2014, the parent company entered into a lease in respect of office premises at Level 12, 75 Elizabeth Street
Sydney for a period of forty eight months from 31 March 2014 to 30 March 2018. The company recharges 20% of the rent to
Electro Optic Systems Holdings Limited, a company of which Fred Bart and Ian Dennis are directors, 20% to 4F Investments
Pty Limited, a company controlled by Fred Bart and 40% to another tenant who is a shareholder in the company.
Non‑cancellable operating lease payables
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Longer than 5 years
31 December
2014
$
31 December
2013
$
87,516
196,911
‑
284,427
1,412
‑
‑
1,412
The Company recovers 80% of the lease payments from director related entities who sublease space from the company on
a month to month basis.
44
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2014
27. Contingent Liability
The parent company has been advised of a potential derivative action in Israel by an individual shareholder of BE4 Limited
(a company with no financial interest in Audio Pixels Holdings Limited), an Israeli company in bankruptcy proceedings.
At the date of this report the parent company has not been formally served. The Directors do not believe the Company has
a case to answer, and is prepared to vigorously defend any action if commenced.
28. Additional Company Information
Audio Pixels Holdings Limited is a listed public company, incorporated and operating in Australia.
Registered Office and Principal Place of Business
Level 12
75 Elizabeth Street
Sydney NSW 2000
Australia
Tel: (02) 9233 3915
Fax: (02) 9232 3411
www.audiopixels.com.au
The Company has 11 (2013:11) employees in Israel.
45
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 2013 ASX ADDITIONAL INFORMATION
Additional information required by the Australian Stock Exchange Listing Rules and not disclosed elsewhere in this report.
Home Exchange
The Company’s ordinary shares are quoted on the Australian Stock Exchange Limited under the trading symbol “AKP”.
The Home Exchange is Sydney. The Company also has a Level 1 American Depositary Receipts (ADR) program and
quotation on the OTCQX market in the United State of America under the code “ADPXY”.
Substantial Shareholders
At 16 March 2015 the following substantial shareholders were registered:
Fred Bart Group
Voting Rights
Ordinary Shares
Percentage of total
Ordinary Shares
5,441,250
21.17%
At 16 March 2015 there were 1,254 holders of fully paid ordinary shares.
Rule 74 of the Company’s Constitution stipulates the voting rights of members as follows:
“Subject to any rights or restrictions for the time being attached to any class or classes of shares and to this Constitution:
(a) on a show of hands every person present in the capacity of a Member or a proxy, attorney or representative (or in more
than one of these capacities) has one vote; and
(b) On a poll every person present who is a Member or proxy, attorney or representative has member present has:
(i) For each fully paid share that the person holds or represents ‑ one vote; and
(ii) For each share other than a fully paid share that the person holds or represents ‑ that proportion of one vote
that the amount paid (not credited) on the shares bears to the total amount paid and payable on the share
(excluding amounts credited).”
Other Information
In accordance with Listing Rule 4.10.19, the Company has used the cash and assets in a form readily convertible to cash that
it had at the time of admission in a way consistent with its business objectives.
Distribution of Shareholdings
At 16 March 2015 the distribution of ordinary shareholdings were:
Range
1‑1,000
1,001 ‑ 5,000
5,001 ‑ 10,000
10,001 ‑ 100,000
100,001 and over
There were 41 ordinary shareholders with less than a marketable parcel.
There is no current on‑market buy‑back.
46
Ordinary
Shareholders
Number of
Shares
526
367
199
129
33
1,254
247,988
970,018
1,718,156
4,375,267
18,395,618
25,707,047
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273 TWENTY LARGEST ORDINARY SHAREHOLDERS
At 16 March 2015 the 20 largest ordinary shareholders held 64.44% of the total issued fully paid quoted ordinary shares
of 25,707,047.
Shareholder
1. Meitav Dash Trusts Limited
2. Landed Investments (NZ) Limited
3. Fred Bart
4. Link Traders (Aust) Pty Limited
5. Kam Superannuation Fund Pty Limited
6. HSBC Custodian Nominees (Australia) Pty Limited
7. Bart Superannuation Pty Limited
8. Lee K Lau
9. Ian Dennis and Caroline Dennis
10. Cheryl Bart
11. Meitav Dash Trusts Limited
12. Jamber Investments Pty Limited
13. Decante Pty Ltd
14. Leo James Casey and Frances Mary Casey
15. Brent McCarty, Yvonne McCarty and Zeljan Unkovich
16. Meitav Dash Trusts Limited
17. James John Bart
18. Larron Pty Limited
19. Nicole Bart
20. Norbert Lipton
Fully Paid
Ordinary Shares
Percentage of
Total
4,211,551
3,565,000
1,244,325
769,910
650,000
628,932
592,780
588,546
570,000
500,000
498,152
440,000
403,000
350,000
321,309
278,273
255,974
251,000
250,000
196,610
16,565,362
16.38%
13.87%
4.84%
2.99%
2.53%
2.45%
2.31%
2.29%
2.22%
1.94%
1.94%
1.71%
1.57%
1.36%
1.25%
1.08%
1.00%
0.98%
0.97%
0.76%
64.44%
47
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 2013 CORPORATE GOVERNANCE STATEMENT
The Board of Directors of Audio Pixels Holdings Limited is
responsible for the corporate governance of the entity.
The Board guides and monitors the business and
affairs of Audio Pixels Holdings Limited on behalf of
the shareholders by whom they are elected and to
whom they are accountable. The Board recognises
that it has a number of legal and other obligations to
non‑shareholder stakeholders.
The Directors are committed to protecting stakeholders’
interests and keeping investors fully informed about the
performance of the Group, while meeting stakeholders’
expectations of sound corporate governance practices.
To ensure the best representation of Shareholder
interests, the Board will regularly review its corporate
governance practices.
The Corporate Governance Statement follows the
Australian Stock Exchange Corporate Governance
Council’s (the “Council’s”) amendments to the
3rd edition of the Corporate Governance Principles and
Recommendations released on 27 March 2014 in relation
to diversity, remuneration, sustainability, trading policies
and briefings.
In accordance with the Council’s recommendations,
the Corporate Governance Statement must now
contain certain specific information and must
disclose the extent to which the Company has
followed the guidelines during the period. Where a
recommendation has not been followed, that fact
must be disclosed, together with the reasons for
the departure. Audio Pixels Holdings Limited’s Corporate
Governance Statement is now structured with reference
to the Corporate Governance Council’s principles and
recommendations, which are as follows:
Principle 1.
Lay solid foundations for management
and oversight
Principle 2.
Structure the Board to add value
Principle 3.
Promote ethical and responsible
decision making
Principle 4.
Safeguard integrity in
financial reporting
Principle 5. Make timely and balanced disclosure
Principle 6.
Respect the rights of shareholders
Principle 7.
Recognise and manage risk
Principle 8.
Remunerate fairly and responsibly
Audio Pixels Holdings Limited’s corporate governance
practices were in place throughout the year ended
31 December 2014, unless otherwise stated, and embrace
the Council’s best practice recommendations which are
being put in place as appropriate.
Due to the limitations imposed by size, the Company
does not meet Recommendation 3.1 of the Guidelines as
the Company does not have a formal code of conduct.
The Company has three executives and eight staff based
in Israel and three Australian based directors to which the
code of conduct applies. The company currently has one
woman on the board and one woman in an executive
position in Israel.
Due to the limitations imposed by size, the Company
did not meet Recommendation 4.2 of the Guidelines as
the Company did not have a formally constituted Audit
Committee until 29 August 2014. Until 29 August 2014
all three of the directors of the Company acted as the
Audit Committee. The Audit Committee was formally
constituted on 29 August 2014 with all three directors
appointed to the Audit Committee. Ian Dennis was
appointed chair of the Audit Committee. The Company was
admitted to the S&P All Ordinaries Index in March 2012 and is
required to have an Audit Committee. The Audit Committee
Charter is available on the web site.
In accordance with Recommendation 5.1, the Board
has appointed Ian Dennis, Director and Company
Secretary to ensure compliance with ASX Listing Rule
disclosure requirements. Due to the limitations imposed
by size the Board has not established written policies
and procedures.
The Directors respect the rights of shareholders in
accordance with Principle 6. The Company sends all
financial communications to shareholders who have
requested hard copy financial statements and posts all
relevant information including all ASX Announcements on
the Company web site. Notices of Meetings are sent to all
shareholders inviting them to attend the Annual General
Meeting which is held at the registered office in Sydney.
A representative of the auditor, Deloitte Touche Tohmatsu
attends the Annual General Meeting.
The Directors have established a formal risk assessment
plan in order to comply with Principle 7. The Directors and
management have considered whether the Company has
any material exposure to economic, environmental and social
sustainability risks and determined that whilst the Company
is in a development phase that no material exposure exists.
Additional information regarding the Company’s corporate
governance policies, its Directors and other relevant
information can be found on the Company’s website:
www.audiopixels.com.au
48
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273
CORPORATE GOVERNANCE STATEMENT
Structure of the Board
The term in office held by each Director in office at the
date of this report is as follows:
The skills, experience and expertise relevant to the position
of director held by each Director in office at the date of
this Annual Report is included in the Directors’ Report
on page 2. Directors of Audio Pixels Holdings Limited
are considered to be independent when they are
independent of management and free from any business
or other relationship that could materially interfere
with, or could reasonably be perceived to materially
interfere with, the exercise of their unfettered and
independent judgement.
In the context of director independence, “materiality”
is considered from both the Company and individual
director perspective. The determination of materiality
requires consideration of both quantitative and
qualitative elements. An item is presumed to be
quantitatively immaterial if it is equal or less than
5 percent of the appropriate base amount. It is presumed
to be material (unless there is qualitative evidence to
the contrary) if it is equal to or greater than 10 percent of
the appropriate base amount.
Qualitative factors considered include whether
a relationship is strategically important, the competitive
landscape, the nature of the relationship and the
contractual or other arrangements governing it and other
factors which point to the actual ability of the director in
question to shape the direction of the Company’s loyalty.
In accordance with the definition of independence
above, and the materiality thresholds set, the following
Director of Audio Pixels Holdings Limited is considered to
be independent:
Name
Position
Mr. Ian Dennis
Non‑executive Director
Due to limitations imposed by the small size of
the Company, the company does not comply
with Recommendation 2.1 in having a majority of
independent directors. The Chairman, Mr Fred Bart is
not an independent Chairman as recommended by
Recommendation 2.2. The Board proposes to maintain
the current directors until the size of the activities of the
Company warrant further changes.
There are procedures in place, agreed by the Board,
to enable directors, in furtherance of their duties, to seek
independent professional advice at the Company’s expense.
Name
Position
Term in Office
Mr Fred Bart
Mr. Ian Dennis
Ms Cheryl Bart
Non‑Executive
Chairman
Non‑Executive
Director
Non‑Executive
Director
13 years
13 years
11 years
For additional details regarding board appointments,
please refer to the Company’s website.
Audit Committee
The Audit Committee was formally constituted on
29 August 2014 with all three directors appointed to the
Audit Committee. Ian Dennis was appointed chair of the
Audit Committee.
Nomination and
Remuneration Committee
The entire Board comprises the Nomination and
Remuneration Committee. The Board continues
to operate within the established guidelines,
including when necessary, selecting candidates for
the position of Director and, where appropriate,
seeking the services of an independent consultant
who is not a director of the Company to provide
assistance in the recruitment of potential Directors.
Performance
The performance of the Board is reviewed regularly
against both measurable and qualitative indicators.
Directors whose performance is consistently unsatisfactory
may be asked to retire.
Diversity Policy
The Company values diversity and recognises the benefits
it can bring to the organisation’s ability to achieve its goals.
Accordingly, the Company has developed a diversity
policy which outlines its diversity objectives in relation to
gender, age, cultural background and ethnicity. It includes
requirements for the Board to establish measurable
objectives for achieving diversity, and for the Board to
assess annually both the objectives, and the Company’s
progress made in achieving them.
At the date of this report, the Company has three
executives and eight staff based in Israel and three
Australian based directors to which this policy applies.
The company currently has one woman on the board and
one woman in an executive position in Israel.
49
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 2013 CORPORATE GOVERNANCE STATEMENT
Remuneration
One of the Company’s key objectives is to provide
maximum stakeholder benefits from the retention of a
high quality Board by remunerating Directors fairly and
appropriately with reference to relevant employment
market conditions. The entire Board comprises the
Remuneration Committee. The expected outcomes of the
remuneration structure are:
(ii) procures someone else to buy or sell securities in
the company; or
(iii) passes on that information to a third party where
that person knows, or ought reasonably to know,
that the third party would be likely to deal in the
securities or procure someone else to deal in the
securities of the company.
When is information “generally available”?
Retention and motivation of directors; and
Information is considered to be generally available if it:
(a) is readily observable; (for example, published in
the press, or in marketing communications); or
(b) has been made known in a manner likely to bring it
to the attention of persons who commonly invest
in securities of a kind whose price or value might
be affected by the information (e.g. by way of an
ASX announcement) and, since the information was
made known, a reasonable period has elapsed.
Examples of inside information:
Some examples of information which could be inside
information are:
Sales figures;
Profit forecasts;
Unpublished announcements, or knowledge of
possible regulatory investigation;
Liquidity and cashflow;
Proposed changes in AKP’s capital structure,
including issues of securities, right and buy‑backs;
Borrowings;
Major asset purchase or sales;
Impending mergers, acquisitions, reconstructions,
takeovers, etc;
Significant litigation;
Significant changes in operations;
Significant changes in industry;
New products/services in technology;
Proposed dividends;
Management restructuring or Board changes, and
New contracts or customers.
Attraction of quality management to the Company;
For details regarding the amount of remuneration and all
monetary and non‑monetary components for each of the
key management personnel during the year, refer to the
Remuneration Report in the Directors report.
There is no scheme to provide retirement
benefits, other than statutory superannuation,
to non‑executive directors.
The Board is responsible for determining and reviewing
compensation arrangements for the Directors themselves.
Securities Trading Policy
1. Introduction
The Securities Trading Policy of Audio Pixels
Holdings Limited (“AKP”) regulates the sale and purchase of
securities (ordinary shares, options and derivative products)
in AKP by Directors, employees and associated persons.
The purpose of this Securities Trading Policy is to reinforce
this position and to assist Directors, employees and
associates to avoid conduct known as “insider trading”.
The Securities Trading Policy was updated to comply with
ASX Listing Rules on Trading Policies which came into effect
on 1 January 2011.
2. What Is Insider Trading?
2.1 Prohibition
Insider trading is a criminal offence. A person will be guilty
of insider trading if:
(a) that person possesses information in relation to a
company which is not generally available to the market,
and if it were generally available to the market, would
be likely to affect the price or value of that company’s
securities (ie. information that is “price sensitive”); and
(b) that person:
(i) buys or sells securities in the company;
50
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273
CORPORATE GOVERNANCE STATEMENT
Securities Trading Policy (Cont.)
2.3 Dealing through third parties
A person does not need to be a Director or employee of
AKP to be guilty of insider trading in relation to securities
in our Company. The prohibition extends to dealings by
Directors and employees through nominees, agents or
other associates, such as family members, family trusts and
family companies.
2.4 Employee share and option schemes
The prohibition will not apply to the initial acquisition of
shares or options under AKP’s Employee Share Ownership
Plan or under any Prospectus issued by the Company.
However, it will apply when shares are disposed of, or
options are exercised, if the employee at that time is
in possession of price sensitive information that is not
generally available to the market.
3. Guidelines for Trading in
AKP Securities
3.1 General rule
Directors and employees of AKP should not buy or sell
securities in AKP, when AKP is in possession of price
sensitive or confidential information that is not generally
available to the market.
3.2 Safest times to deal in AKP securities
There is no particular time during which it is “safe” or
“unsafe” to deal in AKP securities. The SOLE TEST is
whether, at the particular time, a Director or employee
is in possession of price sensitive information that is not
generally available in the market.
3.3 Closed periods
Subject to the insider trading provisions of the
Corporations Act and the notification requirements
of the Company set out in the “ Trading Policy”,
the trading windows (in order to minimise suggestions of
insider trading) for any Directors or employees to deal in
Securities is during the four week period commencing on
the second business day after:
(a) AKP’s annual general meeting;
(b) The release of AKP’s half‑yearly announcement to
the ASX;
(c) The release of AKPs’s preliminary final statement or full
year announcement to ASX (whichever is earlier);
(d) The release of a disclosure document
(e.g. a prospectus) by AKP; and
(e) The release of the quarterly commitments test report
known as Appendix 4C.
In accordance with ASX Listing Rule 12.12.2 Directors and
employees are prohibited from trading in the Company’s
securities except during the above “trading windows”
(in which case, the closed period is the whole of the year
apart from the defined trading windows).
The Chairman of the Board, or the Chairman’s delegate,
(e.g. the Company Secretary) may also notify Directors
and employees of AKP in writing of other ad hoc closed
periods determined by the Board.
3.4 Excluded trading
For the purposes of ASX Listing Rule 12.12.3 the following
examples of trading in the Company’s securities are
excluded from the operation of the Trading Policy:
1.
2.
transfers of securities of the Company already held by
Directors or employees into a superannuation fund or
other saving scheme in which the restricted person
is a beneficiary;
transfers of securities of the Company already held by
Directors or Employees to or from private companies
or trusts controlled by the restricted person;
3. an investment in, or trading in units of, a fund or
other scheme (other than a scheme only investing in
the securities of the entity) where the assets of the
fund or other scheme are invested at the discretion of a
third party;
4. where a restricted person is a trustee, trading in the
securities of the Company by that trust provided the
restricted person is not a beneficiary of the trust and
any decision to trade during the prohibited period
is taken by the other trustees or by the investment
managers independently of the restricted person;
5. undertakings to accept, or the acceptance of,
a takeover offer;
6.
trading under an offer or invitation made to all or
most of the security holders. Such as, a rights issue, a
security purchase plan, a dividend reinvestment plan
and an equal access buy‑back, where the plan that
determines the timing and structure of the offer has
been approved by the Board This includes decisions
relating to whether or not to take up the entitlements
and the sale of entitlements required to provide for
the take up of the balance of entitlements under a
renounceable pro rate issue;
7. a disposal of securities of the Company that is the
result of a secured lender exercising their rights under
a margin lending arrangement. Any agreements by
Directors or employees that provide lenders with
rights over their interest in the Company’s securities
must be approved in writing beforehand by the Board;
51
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 2013 CORPORATE GOVERNANCE STATEMENT
Securities Trading Policy (Cont.)
4. Disclosure Policy
Any Director or employee proposing to buy or sell in
excess of 20,000 AKP securities MUST advise the Chairman
(in the case of Directors) or the Company Secretary
(in the case of employees) in writing (on any approved
form) of their intention to do so BEFORE buying or selling
the securities. This notification obligation operates
at all times.
Directors and employees must not buy or sell AKP in
excess of 20,000 AKP securities until approval has been
given by the Board, Chairman or Company Secretary.
The Board, Chairman or Company Secretary should not
reasonably withhold approval and if a response is not
received within 48 hours of the advice, approval will be
deemed to have been given.
5. Australian Stock Exchange Limited
Notification by Directors
The Australian Stock Exchange Listing Rules oblige
any Director dealing in AKP securities to notify AKP
(through AKP’s Company Secretary) within 3 days after any
dealing providing full details of the dealing in accordance
with the prescribed (Appendix 3Y) form.
8.
the exercise (but not the sale of securities
following exercise) of an option or a right under an
employee incentive scheme, or the conversion of
a convertible security, where the final date for the
exercise of the option or right, or the conversion of
the security, falls within the prohibited period and
the Company has been in an exceptionally long
prohibited period or the Company has had a number
of consecutive prohibited periods and the restricted
person could not reasonably have been expected to
exercise it at a time when free to do so.
3.5 Trading during a prohibited period
with prior written clearance
In accordance with ASX Listing Rule 12.12.4,
a restricted person, who is not in possession of inside
information in relation to the Company, may be
given prior written clearance by the Chairman of the
Board or the Chairman’s delegate (e.g. the Company
Secretary) to sell or otherwise dispose of the securities
of the Company during a prohibited period under
the Trading Policy where the restricted person is in
severe financial hardship or there are other exceptional
circumstances approved by the Board.
3.6 Procedures for clearance
In accordance with ASX Listing Rule 12.12.5 any request
for clearance to trade during a prohibited period due
to exceptional circumstances must be in writing to
the Chairman of the Board prior to the trade setting
out the reasons for the request and the approval
of the Chairman of the Board must be in writing
(electronic clearance by email or facsimile is acceptable)
and is only valid for five (5) business days after the
approval is given.
52
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273
CORPORATE DIRECTORY
Registered Off ice
Israel Corporate Off ice
Telephone: +61 2 9233 3915
Facsimile: +61 2 9232 3411
Telephone: + 972 73 232 4444
Facsimile:
+ 972 73 232 4455
Email:
iandennis@audiopixels.com.au
Email:
danny@audiopixels.com
3 Pekris Street
Rehovot
ISRAEL 76702
Bankers
St George Bank
Level 13
182 George Street
SYDNEY NSW 2000
Australia
Directors
Fred Bart (Chairman)
Ian Dennis
Cheryl Bart AO
Company Secretary
Ian Dennis
Level 12
75 Elizabeth Street
SYDNEY NSW 2000
Australia
www.audiopixels.com.au
Website
Auditor
Deloitte Touche Tohmatsu
Chartered Accountants
Eclipse Tower
Level 19
60 Station Street
Parramatta NSW 2150
Australia
Share Registry
Level 3
60 Carrington Street
Sydney NSW 2000
GPO Box 7045
Sydney NSW 1115
Australia
Computershare Investor Services Pty Limited
Telephone: 1300 855 080 or
+61 3 9415 5000 outside Australia
Facsimile:
1300 137 341
4762 Designed and Produced by RDA Creative www.rda.com.au
53
Audio Pixels Holdings Limited ACN 094 384 273 | Annual Report 20136Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273
Audio Pixels Holdings Limited
ACN 094 384 273
www.audiopixels.com.au
54
2014
ANNUAL REPORT
Annual Report 2014 | Audio Pixels Holdings Limited ACN 094 384 273