More annual reports from Audio Pixels Holdings Limited:
2023 ReportAudio Pixels Holdings Limited
ACN 094 384 273
www.audiopixels.com.au
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CORPORATE DIRECTORY
Directors
Fred Bart (Chairman)
Ian Dennis
Cheryl Bart AO
Company secretary
Ian Dennis
Registered off ice
Suite 3, Level 12
75 Elizabeth Street
SYDNEY NSW 2000
Australia
Israel off ice
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
200 Barangaroo Avenue
Barangaroo
SYDNEY NSW 2000
Australia
Website
www.audiopixels.com.au
Auditor
Deloitte Touche Tohmatsu
Chartered Accountants
Brindabella Circuit
Brindabella Business Park
Canberra Airport ACT 2609
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
5035 Designed and Produced by RDA Creative www.rda.com.au
CORPORATE DIRECTORY
Contents
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
Israel off ice
3 Pekris Street
Rehovot
ISRAEL 76702
Bankers
St George Bank
200 Barangaroo Avenue
Barangaroo
SYDNEY NSW 2000
Australia
Directors
Fred Bart (Chairman)
Ian Dennis
Cheryl Bart AO
Company secretary
Ian Dennis
Registered off ice
Suite 3, Level 12
75 Elizabeth Street
SYDNEY NSW 2000
Australia
www.audiopixels.com.au
Website
Auditor
Deloitte Touche Tohmatsu
Chartered Accountants
Brindabella Circuit
Brindabella Business Park
Canberra Airport ACT 2609
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
2
9
10
Directors’ Report
Auditor’s Independence Declaration
Independent Audit Report
14 Directors’ Declaration
15
Consolidated Statement of Profit or Loss and Other Comprehensive Income
17 Consolidated Statement of Financial Position
18 Consolidated Statement of Changes in Equity
19 Consolidated Statement of Cash Flows
20 Notes To and Forming Part of the Financial Statements
47 ASX Additional Information
48 Twenty Largest Ordinary Shareholders
5035 Designed and Produced by RDA Creative www.rda.com.au
1
Annual Report 2020 • 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 2020. 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. He is a member 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 thirty
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 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 Chairman of Powering Australian Renewables and Ted X Sydney. Cheryl is a
non‑executive director of SG Fleet Australia Limited, ME Bank, and the Invictus Games. 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
Weebit Nano Limited
Noxopharm Limited
Electro Optic Systems Holdings Limited
SG Fleet Australia Limited
Principal Activities
Period of directorship
Since May 2000
Since March 2018
Since 8 May 2020
Since May 2000
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 2020 was $12,102,367 (31 December 2019 ‑ $6,231,930).
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 2020 • Audio Pixels Holdings Limited ACN 094 384 273 DIReCtoR’s RePoRt
Review of Operations
As has been reported throughout the period,
achievements were technical in nature, focused on
advancing the Company’s proven prototype technologies
into a mass‑production product. The main focus of the
period has been an intensive effort to combine the
company’s accomplishments into working devices that
can serve as product demonstrators as well as engineering
samples for select customers.
The primary highlight of the period was the successful
sampling of playing chips while still in wafer form in our
cleanroom. As has been demonstrated the sound clarity
and low frequency range of the chip was incomparable
to any currently available technologies of similar form
factor. Activities required to reach this milestone involved
changes to structural design and fabrication processes
of our MEMS transducer, advancements of algorithms,
signal processing, chip assembly and packaging,
measurement capabilities, as well as the design and
production of electronic circuitry required to demonstrate
the technology.
It should be noted that the global COVID‑19 pandemic
caused and continues to cause incongruities into our
plans, forcing management to constantly adjust timelines
involved in migrating the success of the technology
demonstration out of the noisy environment of the
cleanroom, where suitable assessment can be conducted
by industry and customers.
Highlights of particular activities as follows:
MEMS Fabrication ‑ during the period a number
of flaws in the fabrication process were detected
as contributing factors to the functional failure
of devices, lower than expected yields, as well as
diminishing life‑cycles. Correcting such shortcomings
required improvements to the fabrication process as
well as a number of relatively minor changes to the
structural design that serve to reduce dependencies
on manufacturing tolerances. The modifications
to both the design and fabrication process have
been proven to be sufficiently effective as to
sanction the fabrication of larger quantities of
wafers required to serve the objectives of product
demonstration / engineering samples. Additional
process optimization activities remain ongoing in an
effort to improve device yield (i.e. number of good
chips per wafer).
Device Performance ‑ Recent advancements in
computational modeling tools has for the first time
permitted the possibility to simulate the acoustic
phenomena that are relevant and prevalent in
our MEMS transducers. The company is currently
bringing a highly advanced dynamically coupled
system online, that enables analysis and prediction
of the acoustic performance of our structures.
The addition of such capabilities to the company’s
“toolbox” is a significant gamechanger to achieve
and maintain technological superiority, as such
simulation capabilities which have not been feasible
before, empower the company to use a software‑only
approach to explore and predict the influence most
any structural or functional modification might have
on the acoustic performance of the device.
New Generation ASIC ‑ during the reporting
period the company authorized a redesign of its
proprietary Application Specific Integrated Circuit
(ASIC) controller ‑ the component responsible for
converting algorithms into precision electrical signals
required to drive our MEMS transducer. The primary
impetus for this undertaking was to improve controls
of the Simplified Acoustic Half Structure.
Measurement Capabilities ‑ During the reporting
period the company undertook a major upgrade and
expansion of its test and measurement equipment
and capabilities. This effort was deemed necessary to
support the inclusion of packaged chips to the test
and measurement capabilities as well as to support
the characterization of larger quantities of wafers and
chips, for longer periods of times.
Demonstration Capabilities ‑ During the reporting
period the company expended considerable
resources designing and building electronic circuitry
that enable the company to demonstrate and
showcase the capabilities of our technologies. This
effort also included developments associated with
the packaging of individual chip as well as chip
arrays (multichip demonstration). Effort in this regard
including the qualification and addition assembly
and packaging vendor, located locally in order to
help overcome logistical complexities spurred by the
COVID pandemic experienced by our European based
vendors and their global suppliers.
While a number of technical issues arose during the
reporting period, solutions have been identified and
successfully implemented to resolve all known challenges.
Overall, the magnitude of accomplishments achieved
during the reporting period present a positive outlook on
the company’s ability to reach in a timely manner, its next
critical milestone involving demonstrating our technology
to the marketplace.
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.
3
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 DIReCtoR’s RePoRt
Changes in State of Affairs
Directors’ Interests and Benefits
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.
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:
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 and Insurance
of Officers and Auditors
The Company has agreed to indemnify the current
Directors, Company Secretary and Executive Officers
against all liabilities to other persons that may arise from
their position as Directors or Officers of the Company
and its controlled entities, except where to do so would
be prohibited by law. The agreement stipulates that the
Company will meet the full amount of any such liabilities,
including costs and expenses.
The Company has not, during or since the financial year
indemnified or agreed to indemnify an auditor of the
company or of any related body corporate against any
liability incurred as such an auditor.
name
Fred Bart
Ian Dennis
Cheryl Bart
ordinary shares
5,819,122
320,167
1,282,777
Remuneration Report (Audited)
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.
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 Board 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 executives of including at
will employment and a notice period of three months
for termination.
4
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 DIReCtoR’s RePoRt
Remuneration Report (Cont.)
The key management personnel of Audio Pixels Holdings Limited during the year were:
Fred Bart
Cheryl Bart
Ian Dennis
Chairman and Chief Executive Officer
Non executive director
Non executive director and company secretary
Danny Lewin
CEO and director of Audio Pixels Limited
Yuval Cohen
Chief Technical Officer of Audio Pixels Holdings 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.
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
2020
$
Year ended
31 December
2019
$
Year ended
31 December
2018
$
Year ended
31 December
2017
$
Year ended
31 December
2016
$
Revenue
Net (loss) before tax
Net (loss) after tax
191,434
(12,102,367)
(12,102,367)
272,520
(6,231,930)
(6,231,930)
86,961
(4,519,721)
(4,519,721)
65,624
(5,914,957)
(5,914,957)
103,630
(5,054,771)
(5,054,771)
Year ended
31 December
2020
$
Year ended
31 December
2019
$
Year ended
31 December
2018
$
Year ended
31 December
2017
$
Year ended
31 December
2016
$
15.35
24.05
0.00
20.22
15.35
0.00
16.82
20.22
0.00
14.15
16.82
0.00
8.45
14.15
0.00
Share price at start of
year/period
Share price at end of
year/period
Dividend Paid
5
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 DIReCtoR’s RePoRt
Remuneration Report (Cont.)
The following table sets out each key management personnel’s equity holdings (represented by holdings of fully paid
ordinary shares in Audio Pixels Holdings Limited).
Balance at
1/1/20
no.
Granted as
remuneration
no.
Received on
exercise of
options
no.
Mr Fred Bart*
Mrs Cheryl Bart*
Mr Ian Dennis
Mr Danny Lewin
Mr Yuval Cohen
5,819,122
1,282,777
320,167
1,438,619
1,430,819
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
net other
change
no.
‑
‑
‑
‑
(30,183)
Balance at
31/12/20
no.
5,819,122
1,282,777
320,167
1,438,619
1,400,636
* Included in the above shareholdings in respect to both Fred Bart and Cheryl Bart are 782,777 (2019: 782,777) shares in Audio Pixels Holdings Limited held by
the Bart Superannuation Fund, in respect to which each has a relevant interest.
Transactions with Related Entities
During the year ended 31 December 2020, the Company paid a total of $107,857 (year ended 31 December 2019 ‑ $107,857)
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 2020, the Company paid a total of $41,063 (year ended 31 December 2019 ‑ $41,063)
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 2019 ‑ $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 1 June 2018, the company exercised an option to renew a lease in respect of office premises at Suite 3, Level 12,
75 Elizabeth Street Sydney for a period of forty eight months to 30 March 2022. The Company recharged $31,598 (year ended
31 December 2019 ‑ $30,441) of the rent and other tenancy charges to Electro Optic Systems Holdings Limited, a company
of which Fred Bart and Ian Dennis are directors and $22,289 (year ended 31 December 2019 ‑ $30,441) to 4F Investments
Pty Limited, a company controlled by Fred Bart.
6
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 DIReCtoR’s RePoRt
Remuneration Report (Cont.)
The following table sets out the remuneration of each key management personnel of the Company:
short term
Post employment
total
December 2020
Fred Bart
Cheryl Bart
Ian Dennis
Danny Lewin
Yuval Cohen
December 2019
Fred Bart
Cheryl Bart
Ian Dennis
Danny Lewin
Yuval Cohen
Directors fees/
salary
$
non‑monetary
$
superannuation
$
social
security
$
61,000
37,500
67,500*
168,624
220,008
554,632
61,000
37,500
67,500*
170,962
220,008
556,970
‑
‑
‑
41,414
12,692
54,106
‑
‑
‑
41,828
14,385
56,213
5,794
3,563
3,563
‑
18,996
31,916
5,794
3,563
3,563
‑
18,996
31,916
‑
‑
‑
60,303
‑
60,303
‑
‑
‑
60,846
‑
60,846
$
66,794
41,063
71,063
270,341
251,686
700,957
66,794
41,063
71,063
273,636
253,389
705,945
* The amounts disclosed for Ian Dennis include directors fees of $37,500 and consulting fees of $30,000
Other non‑monetary benefits include annual leave provision increases during the year.
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.
Directors’ Meetings
During the year the Company held three meetings of directors, two 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:
Board of directors
Audit committee
nomination and
Remuneration committee
Directors
Mr Fred Bart
Mrs Cheryl Bart
Mr Ian Dennis
Held
Attended
Held
Attended
Held
Attended
3
3
3
3
3
3
2
2
2
2
2
2
‑
‑
‑
‑
‑
‑
All current board members are on the Audit Committee and the Nomination and Remuneration Committee.
7
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 DIReCtoR’s RePoRt
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 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 February 2021
8
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 9
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 10
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 11
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 12
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 4 to 7
13
Annual Report 2020 • 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 February 2021.
14
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 ConsoLIDAteD stAteMent oF PRoFIt oR Loss AnD
otHeR CoMPReHensIVe InCoMe
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
Consolidated
Year ended
31 December
2020
$
Consolidated
Year ended
31 December
2019
$
note
Revenue
2
191,434
272,520
Administrative expenses
Amortisation
Depreciation
Directors fees and superannuation
Foreign exchange (losses)/ gains
Interest expense
Profit/ (Loss) on sale of property, plant and equipment
Marketing
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
(961,705)
(83,257)
(426,583)
(148,920)
(3,822,820)
(19,253)
‑
‑
(1,040,527)
(84,565)
(405,840)
(148,920)
15,190
(30,462)
411
(1,224)
(6,831,263)
(4,808,513)
(12,102,367)
(6,231,930)
‑
‑
(12,102,367)
(6,231,930)
2
3
Exchange differences arising on translation of foreign operations
16
3,259,780
(190,559)
Other comprehensive income/(loss) for the year, net of tax
3,259,780
(190,559)
Total comprehensive (loss) for the year
(8,842,587)
(6,422,489)
Notes to the financial statements are included on pages 20 to 46.
15
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273
ConsoLIDAteD stAteMent oF PRoFIt oR Loss AnD
otHeR CoMPReHensIVe InCoMe
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
Consolidated
Year ended
31 December
2020
Consolidated
Year ended
31 December
2019
note
(12,102,367)
(6,231,930)
(8,842,587)
(6,422,489)
(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)
20
(42.50)
(22.02)
Notes to the financial statements are included on pages 20 to 46.
16
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273
ConsoLIDAteD stAteMent oF FInAnCIAL PosItIon
As At 31 DeCeMBeR 2020
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
Goodwill
Intangible asset
Right of use asset
Property, plant and equipment
Trade and other receivables
TOTAL NON CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Lease liabilities
Provisions
TOTAL CURRENT LIABILITIES
NON‑CURRENT LIABILITIES
Lease liabilities
TOTAL NON CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS/ (LIABILITIES)
EQUITY
Issued capital
Reserves
Accumulated losses
Equity attributable to owners of the company
TOTAL EQUITY
Consolidated
December
2020
$
Consolidated
December
2019
$
note
5
6
7
8
9
10
6
11
12
13
12
14
16
17
4,750,888
48,861
4,799,749
5,823,291
142,314
5,965,605
2,207,058
2,334,763
288,698
249,320
422,145
5,699
3,172,920
7,972,669
402,110
575,153
469,517
5,960
3,787,503
9,753,108
1,630,684
1,648,566
241,577
295,683
337,014
262,784
2,167,944
2,248,364
27,863
27,863
271,208
271,208
2,195,807
2,519,572
5,776,862
7,233,536
73,092,487
66,217,433
(20,954,197)
(24,724,836)
(46,361,428)
(34,259,061)
5,776,862
5,776,862
7,233,536
7,233,536
Notes to the financial statements are included on pages 20 to 46.
17
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273
ConsoLIDAteD stAteMent oF CHAnGes In eQUItY
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
December 2020 ‑
Consolidated
equity
settled
option
Reserve
$
Issued
Capital
$
exchange
translation
reserve
$
Minority
Acquisition
Reserve
$
Accumulated
Losses
$
total
$
Balance at 1 January 2020
66,217,433
5,041,902
(4,228,046)
(25,538,692)
(34,259,061)
7,223,536
Other comprehensive
income for the year
(Loss) for the year
‑
‑
Issue of shares for cash
6,875,054
‑
‑
‑
Recognition of share
based payments
‑
510,859
3,259,780
‑
‑
‑
‑
‑
‑
‑
‑
3,259,780
(12,102,367)
(12,102,367)
‑
‑
6,875,054
510,859
Balance at 31 December 2020
73,092,487
5,552,761
(968,266)
(25,538,692)
(46,361,428)
5,776,862
December 2019 ‑
Consolidated
equity
settled
option
Reserve
$
Issued
Capital
$
exchange
translation
reserve
$
Minority
Acquisition
Reserve
$
Accumulated
Losses
$
total
$
Balance at 1 January 2019
66,217,433
4,532,439
(4,037,487)
(25,538,692)
(28,027,131)
13,146,562
Other comprehensive
income for the year
(Loss) for the year
Recognition of share
based payments
‑
‑
‑
‑
‑
509,463
(190,559)
‑
‑
‑
‑
‑
‑
(190,559)
(6,231,930)
(6,231,930)
‑
509,463
Balance at 31 December 2019
66,217,433
5,041,902
(4,228,046)
(25,538,692)
(34,259,061)
7,223,536
Notes to the financial statements are included on pages 20 to 46.
18
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273
ConsoLIDAteD stAteMent oF CAsH FLoWs
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
Cash flows from operating activities
Receipts from customers
Government grants
Payments to suppliers and employees
Interest paid
Interest received
Consolidated
Year ended
31 December
2020
$
Consolidated
Year ended
31 December
2019
$
notes
96,133
76,692
121,763
‑
(7,629,840)
(4,917,915)
(19,253)
18,609
(30,462)
150,757
Net cash (used by) operating activities
18
(7,457,659)
(4,675,857)
Cash flows from investing activities
Payment for property, plant and equipment
Proceeds from sale of property, plant and equipment
Net cash (used by) from investing activities
Cash flows from financing activities
Proceeds from share placement
Repayment of lease liabilities
Net cash (used by)/provided by financing activities
(105,038)
(223,556)
‑
244
(105,038)
(223,312)
14
6,875,054
(338,782)
6,536,272
‑
(286,890)
(286,890)
Net increase/ (decrease) in cash and cash equivalents held
Cash and cash equivalents at the beginning of the financial year
(1,026,425)
5,823,291
(5,186,059)
11,019,092
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
(45,978)
4,750,888
(9,742)
5,823,291
Notes to the financial statements are included on pages 20 to 46.
19
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273
notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
1. Summary of Significant Accounting Policies
1(a) 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 (“AASBs”). Compliance with AASBS 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 February 2021.
1(b) Basis of preparation
The financial report has been prepared on the basis of historical cost. Cost is based on the fair values of the consideration
given in exchange for assets. All amounts are expressed in Australian dollars.
1(c) Adoption of new and revised standards
New and amended IFRS Standards that are effective for the current year
In the current year, the consolidated entity has applied a number of amendments to AASB Standards and Interpretations
issued by the IASB that are effective for an annual period that begins on or after 1 January 2020. Their adoption has not had
any material impact on the disclosures or on the amounts reported in these financial statements.
AASB 2018‑6 Amendments to Australian Accounting Standards ‑ Definition of a business
AASB 2018‑7 Amendments to Australian Accounting Standards ‑ Definition of material
Conceptual Framework for Financial Reporting and AASB 2019‑1 Amendments to Australian Accounting
Standards ‑ Reference to Conceptual Framework
AASB 2019‑3 Amendments to Australian Accounting Standards ‑ Interest Rate Benchmark Reform
AASB 2019‑5 Amendments to Australian Accounting Standards ‑ Disclosure of the Effect of New IFRS Standards Not Yet
Issued in Australia
New and revised Australian Accounting Standards and Interpretations on issue but not
yet effective
At the date of authorisation of the financial statements, the consolidated entity has not applied the following new and
revised Australian Accounting Standards, Interpretations and amendments that have been issued but are not yet effective:
standard/amendment
IFRS 17 Insurance contracts
IFRS 10 and IAS 28 (amendments) Sale or contribution of Assets between and Investor
and its Associate or Joint Venture
Amendments to IAS 1 ‑ Classification of Liabilities as Current or Non‑current
Amendments to IFRS 3 ‑ Reference to Conceptual Framework
effective for annual
reporting periods
beginning on or after
1 January 2023
Not set date
1 January 2022
1 January 2022
Amendments to IAS 16 ‑ Property, Plant and Equipment ‑ Proceeds before Intended Use
1 January 2022
Amendments to IAS 37 ‑ Onerous contracts ‑ Cost of Fulfilling a Contract
1 January 2022
Annual Improvements to IFRS Standards 2018‑2020 Cycle ‑ Amendments to IFRS 1
First‑time Adoption of International Financial Reporting Standards, IFRS 9 Financial
Instruments, IFRS Leases, and IAS 41 Agriculture
1 January 2022
The Directors do expect these new and revised standards issued but not effective to have a material effect on the
financial statements.
20
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
1. Summary of Significant
Accounting Policies (Cont.)
1(d) 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 $12,102,367. Net cash used by operating activities was
$7,457,659. As at 31 December 2020, the consolidated
entity had cash of $4,750,888. Further testing and
enhancement of the technology is continuing as the
company works towards achievement of the demonstrator
milestone to begin the transition to volume production.
As a result, it is anticipated that the available net working
capital will be consumed in the coming 12 months.
In the opinion of the directors, the ability of the
consolidated entity to continue as a going concern and
pay its debts as and when they become due and payable
is dependent upon:
the successful completion of the current testing
phase of the technology, enabling the company
to demonstrate the technology’s capabilities and
negotiate commercial contracts with interested
parties; and
following this, the ability of the company to
raise further capital as it gears up for production.
The Directors do not anticipate any issues in raising
additional capital.
If the consolidated entity is unable to achieve successful
outcomes in relation to the above matters, material
uncertainty would exist that may cast significant doubt as
to the ability of the consolidated entity to continue as a
going concern and therefore, it may be required to realise
its assets and extinguish its 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 consolidated
entity not continue as a going concern.
1(e) Revenue Recognition
Interest revenue is recognised using the effective interest
rate method.
Recharged revenue is recognised on an accrual basis.
1(f) Financial assets
Classification
The consolidated entity classifies its financial assets in the
following measurement categories:
Those to be measured subsequently at fair value
(either through other comprehensive income, or
through profit or loss), and
Those to be measured at amortised cost.
The classification depends on the consolidated entity’s
business model for managing financial assets and the
contractual terms of the cash flows. For assets measured at
fair value, gains and losses will either be recorded in profit
or loss or other comprehensive income. For investments
in debt instruments, this will depend on the business
model in which the investment is held. For investments in
equity instruments that are not held for trading, this will
depend on whether the consolidated entity has made an
irrevocable election at the time of initial recognition to
account for the equity investment at fair value through
other comprehensive income. The consolidated entity
reclassifies debt investments when and only when its
business model for managing those assets changes.
Measurement
At initial recognition, the consolidated entity measures a
financial asset at its fair value plus, in the case of a financial
asset not at fair value through profit or loss, transaction
costs that are directly attributable to the acquisition of
the financial asset. Transaction costs of financial assets
carried at fair value through profit or loss are expensed in
profit or loss.
21
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
1. Summary of Significant
Accounting Policies (Cont.)
Debt instruments
Subsequent measurement of debt instruments depends
on the consolidated entity’s business model for managing
the asset and the cash flow characteristics of the asset.
There are two measurement categories into which the
consolidated entity classifies its debt instruments:
Amortised cost: Assets that are held for collection
of contractual cash flows where those cash flows
represent solely payments of principal and interest
are measured at amortised cost. A gain or loss on
a debt investment that is subsequently measured
at amortised cost and is not part of a hedging
relationship is recognised in profit or loss when the
asset is derecognised or impaired. Interest income
from these financial assets is included in finance
income using the effective interest rate method.
Fair value through profit or loss (FVPL): Assets that do
not meet the criteria for amortised cost or FVOCI are
measured at fair value through profit or loss. A gain
or loss on a debt investment that is subsequently
measured at fair value through profit or loss and is
not part of a hedging relationship is recognised in
profit or loss and presented net in the statement of
profit or loss within other gains/(losses) in the period
in which it arises. No such assets are currently held by
the consolidated entity.
equity instruments
The consolidated entity subsequently measures all equity
investments at fair value. Where the consolidated entity’s
management has elected to present fair value gains and
losses on equity investments in other comprehensive
income, there is no subsequent reclassification of fair
value gains and losses to profit or loss following the
derecognition of the investment. Dividends from such
investments continue to be recognised in profit or loss
as other income when the consolidated entity’s right to
receive payments is established. Impairment losses (and
reversal of impairment losses) on equity investments
measured at FVOCI are not reported separately from other
changes in fair value. Changes in the fair value of financial
assets at fair value through profit or loss are recognised
in other expenses in the statement of profit or loss
as applicable.
Impairment
The consolidated entity assesses on a forward looking
basis the expected credit losses associated with its
debt instruments carried at amortised cost and FVOCI.
The impairment methodology applied depends on
whether there has been a significant increase in credit
risk. For trade receivables, and lease receivables, the
consolidated entity applies the simplified approach
permitted by AASB 9, which requires expected lifetime
losses to be recognised from initial recognition of
the receivables.
1(g) Financial Liabilities
trade and other payables
Liabilities are recognised for amounts to be paid for
goods or services received. Trade payables are settled on
terms aligned with the normal commercial terms in the
consolidated entity’s countries of operation.
1(h) Cash and cash equivalents
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.
1(i) 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.
22
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
1. Summary of Significant
Accounting Policies (Cont.)
1(j) Foreign currency
Foreign currency transactions
All foreign currency transactions during the financial year
are brought 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 historic cost that are denominated in
foreign currencies are translated using historic rates.
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.
any non‑controlling interests in the acquire, and the fair
value of the acquirer’s previously held equity interest in
the acquire (if any) over the net of the acquisition‑date
amounts of the identifiable assets acquired and the
liabilities assumed.
If, after reassessment, the consolidated entity’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 acquire (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 goodwill impairment
testing, there was one cash‑generating unit, relating
to the digital speakers segment. The cash‑generating
unit is tested for impairment annually. 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.
1(k) Goods and services tax
1(m) Impairment of assets
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.
1(l) 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
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.
23
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
1. Summary of Significant
Accounting Policies (Cont.)
1(n) 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.
1(o) 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 asset acquired is written off on a straight
line basis. Expenditure on research activities is recognised
as an expense in the period in which it is incurred.
1(p) Leases
The consolidated entity assesses whether a contract
is or contains a lease, at inception of a contract.
The consolidated entity recognises a right‑of‑use asset
and a corresponding lease liability with respect to all lease
agreements in which it is the lessee, except for short‑term
leases (defined as leases with a lease term of 12 months
or less) and leases of low value assets. For these leases,
the consolidated entity recognises the lease payments
as an operating expense on a straight‑line basis over the
term of the lease unless another systematic basis is more
representative of the time pattern in which economic
benefits from the leased asset are consumed.
The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted by using the rate
implicit in the lease. If this rate cannot be readily
determined, the consolidated entity uses its incremental
borrowing rate.
Lease payments included in the measurement of the lease
liability comprise:
fixed lease payments (including in‑substance fixed
payments), less any lease incentives;
variable lease payments that depend on an index or
rate, initially measured using the index or rate at the
commencement date;
the amount expected to be payable by the lessee
under residual value guarantees;
the exercise price of purchase options, if the lessee is
reasonably certain to exercise the options; and
payments of penalties for terminating the lease, if
the lease term reflects the exercise of an option to
terminate the lease.
24
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
1. Summary of Significant
Accounting Policies (Cont.)
The lease liability is presented as a separate line in the
consolidated statement of financial position.
The lease liability is subsequently measured by increasing
the carrying amount to reflect interest on the lease liability
(using the effective interest method) and by reducing the
carrying amount to reflect the lease payments made.
The consolidated entity remeasures the lease liability
(and makes a corresponding adjustment to the related
right‑of‑use asset) whenever:
the lease term has changed or there is a change in
the assessment of exercise of a purchase option,
in which case the lease liability is remeasured by
discounting the revised lease payments using a
revised discount rate.
the lease payments change due to changes in an
index or rate or a change in expected payment under
a guaranteed residual value, in which cases the lease
liability is remeasured by discounting the revised
lease payments using the initial discount rate (unless
the lease payments change is due to a change in a
floating interest rate, in which case a revised discount
rate is used).
a lease contract is modified and the lease
modification is not accounted for as a separate
lease, in which case the lease liability is remeasured
by discounting the revised lease payments using a
revised discount rate.
The consolidated entity did not make any such
adjustments during the period.
The right‑of‑use assets comprise the initial measurement
of the corresponding lease liability, lease payments made
at or before the commencement day and any initial
direct costs. They are subsequently measured at cost less
accumulated depreciation and impairment losses.
Whenever the consolidated entity incurs an obligation for
costs to dismantle and remove a leased asset, restore the
site on which it is located or restore the underlying asset
to the condition required by the terms and conditions
of the lease, a provision is recognised and measured
under AASB 137. The costs are included in the related
right‑of‑use asset, unless those costs are incurred to
produce inventories.
Right‑of‑use assets are depreciated over the shorter period
of lease term and useful life of the underlying asset. If a
lease transfers ownership of the underlying asset or the
cost of the right‑of‑use asset reflects that the consolidated
entity expects to exercise a purchase option, the related
right‑of‑use asset is depreciated over the useful life
of the underlying asset. The depreciation starts at the
commencement date of the lease.
The right‑of‑use assets are presented as a separate line in
the consolidated statement of financial position.
The consolidated entity applies AASB 136 Impairment
of Assets to determine whether a right‑of‑use asset is
impaired and accounts for any identified impairment loss
per the accounting policy disclosed in note 1(m).
Variable rents that do not depend on an index or rate
are not included in the measurement the lease liability
and the right‑of‑use asset. The related payments are
recognised as an expense in the period in which the event
or condition that triggers those payments occurs and
are included in the line “administrative expenses” in the
statement of profit or loss.
As a practical expedient, AASB 16 permits a lessee not
to separate non‑lease components, and instead account
for any lease and associated non‑lease components as a
single arrangement. The consolidated entity has not used
this practical expedient.
The following estimated useful lives are used in the
calculation of depreciation:
Office premises
2 to 4 years
1(q) 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.
25
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
1. Summary of Significant
Accounting Policies (Cont.)
1(r) 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.
All intragroup assets and liabilities, equity, expenses
and cash flows relating to transactions between
members of the consolidated entity are eliminated in
full on consolidation.
1(s) Property, plant and equipment
Property, plant 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
Office furniture and equipment
3 to 5 years
5 to 15 years
Depreciation in relation to right‑of‑use‑assets is outlined
in Note 1(p).
1(t) 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.
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Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
Functional Currency
The directors made a critical judgement in relation to
the functional currency of Audio Pixels Holdings Limited.
The directors consider AUD to be the appropriate
functional currency, as financing activities of the entity
occur in AUD.
Investment in subsidiary and
intercompany receivable
The directors made a critical judgement in relation to
the recoverability of the investment in subsidiary ‑ Audio
Pixels Limited and the receivable from this subsidiary.
The assessment of the recoverability of these assets is
considered concurrently with the recoverability of the
intangible asset/goodwill. These assets are discussed in
Note 24 as part of current and non‑current assets:
Investment in subsidiary ‑ $3,468,072
(31 December 2019: $2,957,213 (non‑current assets)
Intercompany receivable ‑ $37,498,377
(31 December 2019: $33,958,648 (included in
non‑current assets)
1. Summary of Significant
Accounting Policies (Cont.)
1(u) 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 8 and the
impairment model used in assessing the carrying amount
of the goodwill (see Note 7).
Deferred tax
The directors made a critical judgement in relation to
not recognising the deferred tax balances described in
Note 3(a). Given the current stage of development, the
directors do not currently consider it’s probable that
sufficient taxable amounts will be available against which
deductible temporary differences can be utilised.
27
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
Consolidated
Year ended
31 December
2020
$
Consolidated
Year ended
31 December
2019
$
18,609
96,133
76,692
191,434
83,257
115,323
311,260
19,253
150,757
121,763
‑
272,520
84,565
85,706
320,134
30,462
2,175,652
1,907,571
510,859
31,916
509,463
31,916
2,718,427
2,448,950
2. (Loss) from Operations
(a) Revenue
Interest received ‑ other entities
Recharge income
Cash boost
Total revenue
(b) Expenses
Amortisation
Depreciation of property, plant and equipment
Depreciation of right‑of‑use assets
Interest expense
Employee benefits expense:
Salary and other employee benefits
Share based payments
Superannuation
3. Income Taxes
(a) Income tax recognised in profit or loss
The Company is in a loss‑making position and therefore does not pay income tax in both Australia and Israel. Therefore
income tax payable is nil (2019: nil).
The Company does not recognise any deferred tax assets on balance sheet as management does not believe that there will
be sufficient profits in the foreseeable future that deferred tax assets can be utilised against. The amount of unrecognised
deferred tax assets at reporting date is $9,124,087 (2019: $7,334,736).
A corporate tax rate of 30% is payable by Australian corporate entities on taxable profits under Australian tax law and
23% (2019:23%) under Israeli law. There has been no change in the corporate tax rate when compared with the previous
reporting period.
(b) Franking account balance
Adjusted franking account balance
(c) Israeli tax Ruling
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, complied 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.
28
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
4. Remuneration of Auditors
Deloitte and related network firms*
Audit or review of the financial reports
‑ Group
‑ Subsidiary
Other services
‑ Taxation consulting 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 and other debtors
Non Current
Other debtors
Other debtors comprise security deposits with government bodies.
31 December
2020
$
31 December
2019
$
53,699
32,595
86,294
9,056
95,350
40,478
19,187
59,665
6,122
65,787
4,750,888
5,823,291
0.07%
1.19%
9,826
39,035
48,861
8,948
133,366
142,314
5,699
5,960
29
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
7. 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
31 December
2020
$
31 December
2019
$
2,207,058
2,334,763
2,334,763
(127,705)
2,207,058
2,326,483
8,280
2,334,763
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 a 10‑year period, with
forecast revenue growth rates based on the directors of the consolidated entity’s best estimate of the market development
and with a terminal rate of 2%, and a discount rate of 33% per annum. The assumed growth rate is based on the forecast
future global MEMS market. Given the nature of the product, the forecast cash flows are managements’ best estimate and
reflect the risks inherent in the initial take up of the product. 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 fair value less costs of disposal calculation is sensitive to changes in the percentage likelihood
of completion. Increases in the percentage likelihood of completion increases the recoverable amount and vice versa.
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.
8. Intangible Asset
Being the independent valuation of In Process Research 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
173,893
(753,195)
288,698
868,000
204,048
(669,938)
402,110
The intangible asset is allocated to the digital speaker cash‑generating unit being the only cash generating unit, when
assessed for impairment. Refer to Note 7 for commentary on the cash‑generating unit.
30
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273
notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
9. Right of use assets
Office premises ‑ at cost
Less accumulated depreciation
Total net book value of Right of use assets
Cost
Office premises
Balance at 1 January
Balance recorded on transition to AASB 16
Net foreign currency exchange differences
Balance as at 31 December
Motor vehicle
Balance recorded on transition to AASB 16
Additions
Disposals
Net foreign currency exchange differences
Balance as at 31 December
Accumulated depreciation
Office premises
Balance as at 1 January
Net foreign currency exchange differences
Depreciation expense
Balance at 31 December
31 December
2020
$
31 December
2019
$
857,829
(608,509)
249,320
249,320
895,297
(320,144)
575,153
575,153
895,297
‑
‑
895,297
(37,468)
857,829
‑
895,297
‑
‑
‑
‑
‑
(320,144)
22,895
(311,260)
(608,509)
‑
33,676
(33,676)
‑
‑
‑
‑
(320,144)
(320,144)
On 1 June 2018, the parent company exercised an option to renew a lease in respect of office premises at Suite 3, Level 12,
75 Elizabeth Street Sydney for a period of forty‑eight months from 31 March 2018 to 30 March 2022.
On 1 January 2019, the subsidiary company, Audio Pixels Limited exercised an option to renew a lease in respect of
facilities at 3 Pekris Street Rehovot, Israel for a period of twenty‑eight months to 31 May 2021.
Amounts recognised in profit and loss
Depreciation expense on right of use assets
Interest expense on lease liabilities
311,260
19,253
320,134
30,462
The total cash outflow for leases amount to $338,782 (Year ended 31 December 2019 ‑$317,352).
31
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
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
Total net book value of Property, Plant and Equipment
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
Additions
Net foreign currency exchange differences
Balance as at 31 December
31 December
2020
$
31 December
2019
$
483,675
(424,185)
59,490
333,768
(234,998)
98,770
507,937
(421,385)
86,552
366,797
(244,875)
121,922
1,280,719
1,315,628
(1,016,834)
(1,054,585)
263,885
422,145
261,043
469,517
507,937
21,477
(45,739)
483,675
394,491
110,938
2,508
507,937
366,797
360,094
‑
(33,029)
333,768
4,415
2,288
366,797
32
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
10. Property, Plant and Equipment (Cont.)
Office furniture and equipment
Balance at 1 January
Additions
Disposals
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
Disposals
Depreciation expense
Balance at 31 December
31 December
2020
$
31 December
2019
$
1,315,628
83,562
‑
(118,471)
1,280,719
(421,385)
39,866
(42,666)
(424,185)
(244,875)
22,624
(12,747)
(234,998)
(1,054,585)
97,661
‑
(59,910)
1,201,446
108,203
(1,660)
7,639
1,315,628
(374,022)
(2,525)
(44,838)
(421,385)
(252,699)
21,036
(13,212)
(244,875)
(999,452)
(29,112)
1,635
(27,656)
(1,016,834)
(1,054,585)
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.
1,630,684
1,648,566
33
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
12. Lease liabilities
Analysed as:
Current
Non‑Current
Disclosure required by AASB 16
Maturity Analysis
Year 1
Year 2
Year 3
Less: unearned interest
31 December
2020
$
31 December
2019
$
241,577
27,863
269,440
248,039
28,137
‑
(6,736)
269,440
337,014
271,208
608,222
337,014
247,933
28,000
(15,431)
608,222
The consolidated entity does not face a significant liquidity risk with regard to its lease liabilities. All lease obligations in
Australia are denominated in Australian dollars and the lease in Israel is denominated in Israeli shekels.
13. Provisions
Employee benefits
14. Issued Capital
Issued and paid up capital
Fully paid Ordinary Shares
Balance at the beginning of the financial year
Placement for cash at $17.32 per share
Balance at the end of the financial year
Fully paid Ordinary Shares
Balance at the beginning of the financial year
Placement for cash at $17.32 per share
Balance at the end of the financial year
295,683
262,784
66,217,433
6,875,054
73,092,487
66,217,433
‑
66,217,433
number
number
28,301,720
28,301,720
396,943
‑
28,698,663
28,301,720
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.
34
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
15. Employee Share Option Plan
The consolidated entity has an ownership‑based compensation scheme for employees (including directors) of the
company. In accordance with the provisions of the scheme, as approved by shareholders at a previous annual general
meeting, employees with more than three months service with the company may be granted options to purchase ordinary
shares at exercise prices determined by the directors based on market prices at the time the issue of options were made.
Each share option converts to one ordinary share in Audio Pixels Holdings Limited. No amounts are paid or payable by
the recipient on receipt of the options. The options carry neither rights to dividends nor voting rights. Options may be
exercised at any time from the date of vesting to the date of expiry.
The number of options granted is determined by the directors and takes into account the company’s and individual
achievements against both qualitative and quantitative criteria.
On 13 January 2011, shareholders approved the adoption of an Employee Share Option Plan.
(a) Unlisted Options issued under the Employee Share Option Plan
2020
2019
Weighted
average
exercise price
$
Weighted
average
exercise price
$
number
number
203,000
16.20
203,000
16.20
‑
‑
‑
203,000
‑
‑
‑
‑
16.20
‑
‑
‑
‑
203,000
‑
‑
‑
‑
16.20
‑
Balance at the beginning of the
financial year (i)
Granted during the year (ii)
Exercised during the year (iii)
Lapsed during the year (iv)
Balance at the end of the financial year (v)
Exercisable at end of the year
(i) Balance at the beginning of the year
2020
2019
number
Grant date
expiry date
exercise Price
203,000
203,000
17/12/18
17/12/18
17/12/21*
17/12/21*
16.20
16.20
Fair value at
grant date
$1,421,406
$1,421,406
Staff options carry no rights to dividends and no voting rights.
35
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273
notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
15. Employee Share Option Plan (Cont.)
(ii) Granted during the year
2020
Staff options
2019
Staff options
number
Grant date
expiry date
exercise Price
Fair value at
grant date
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
* These options commence to vest after 17 December 2020 and continuous employment on the basis of one twelfth of the
total number each month in the twelve month period to 17 December 2021.
(iii) exercised during the year
There were no options exercised during the year.
(iv) Lapsed during the year
No Staff options lapsed during the year.
(v) Balance at the end of the financial year
2020
Staff options
2019
Staff options
number
Grant date
expiry date
exercise Price
Fair value at
grant date
203,000
17/12/18
17/12/21*
$16.20
$1,421,406
203,000
17/12/18
17/12/21*
$16.20
$1,421,406
Staff options carry no rights to dividends and no voting rights.
*All options granted to staff on 17 December 2018 have a vesting condition that the employee must be employed by the
Group at the time of vesting. These options vest after 17 December 2020 and continuous employment on the basis of one
twelfth of the total number each month in the twelve month period to 17 December 2021.
The difference between the total fair value of the options issued during the financial year, at the date of issue, and the total
amount received from the employees (nil) is recognised in the financial statements over the vesting period as disclosed in
Note 15 to the financial statements.
36
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
16. 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
2020
$
31 December
2019
$
(4,228,046)
(4,037,487)
3,259,780
(968,266)
(190,599)
(4,228,046)
Exchange differences relating to the translation of the results and net assets of the consolidated entity’s foreign operations from
their functional currencies to the consolidated entity’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
Add share based payments in respect of options
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
The non‑controlling interest reserve comprises amounts related to the acquisition of a
non‑controlling interest shareholding in a subsidiary company in a prior period.
5,041,902
510,859
5,552,761
4,532,439
509,463
5,041,902
(25,538,692)
(25,538,692)
(25,538,692)
(25,538,692)
Total Reserves
(20,954,197)
(24,724,836)
37
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
17. 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
18. Notes to the Statement of Cash Flows
(a) Reconciliation of cash and cash equivalents
31 December
2020
$
31 December
2019
$
(34,259,061)
(28,027,131)
(12,102,367)
(6,231,930)
(46,361,428)
(34,259,061)
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
4,750,888
5,823,291
(b) Restricted cash
Cash held as security for future lease payments
58,662
60,167
Restricted cash amounts are included in the cash and cash equivalents amounts above.
(c) Reconciliation of (loss) for the period to net cash outflows from operating activities
(Loss) after related income tax
(12,102,367)
(6,231,930)
Amortisation
Depreciation
Foreign exchange (gains)/ losses
(Gain)/ Loss on sale of property, plant and equipment
Share based payments
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
83,257
426,583
3,515,277
‑
510,859
84,565
405,840
(193,741)
(411)
509,463
93,453
261
31,251
(435)
32,899
(17,881)
58,824
660,717
Net cash (used in) operating activities
(7,457,659)
(4,675,857)
38
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
19. 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
2020
$
31 December
2019
$
608,738
92,219
700,957
613,183
92,762
705,945
The remuneration above relates to directors fees, consultancy fees and superannuation paid to entities associated with
Fred Bart, Cheryl Bart and Ian Dennis and the remuneration of one senior executive of Audio Pixels Limited in Israel and one
senior executive of Audio Pixels Holdings Limited.
(c) Transactions with related entities
During the year ended 31 December 2020, the Company paid a total of $107,857 (year ended 31 December 2019 ‑ $107,857)
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 2020, the Company paid a total of $41,063 (year ended 31 December 2019 ‑ $41,063)
to Dennis Corporate Services Pty Limited, a company associated with Mr Ian Dennis in respect of directors fees
and superannuation.
During the year ended 31 December 2020, the Company paid $30,000 (31 December 2019 ‑ $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 1 June 2018, the company exercised an option to renew a lease in respect of office premises at Suite 3, Level 12, 75
Elizabeth Street Sydney for a period of forty eight months to 30 March 2022. The Company recharged $31,598 (year ended
31 December 2019 ‑ $30,441) of the rent and other tenancy charges to Electro Optic Systems Holdings Limited, a company
of which Fred Bart and Ian Dennis are directors and $22,289 (year ended 31 December 2019 ‑ $30,441) to 4F Investments
Pty Limited, a company controlled by Fred Bart.
39
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
20. Earnings per Share
Basic (loss) per share
Diluted (loss) per share (b)
(Loss) (a)
31 December
2020
31 December
2019
(42.50) cents
(22.02) cents
(42.50) cents
(22.02) cents
(12,102,367)
(6,231,930)
Weighted average number of Ordinary Shares
28,475,722
28,301,720
(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.
(b) There are potential ordinary shares to be issued in relation to the issue of 203,000 unlisted employee options issued on
17 December 2018 at an exercise price of $16.20. These options expire on 17 December 2023. The unlisted employee
options have not been included in dilutive EPS, as they are anti‑dilutive.
21. Segment Information
AASB 8 requires operating segments to be identified on the basis of internal reports about components of the consolidated
entity 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 consolidated entity’s reportable segments has not changed from those disclosed in the previous
2019 report.
The consolidated entity operates in Australia and Israel.
Products and services within each segment
Digital speakers
The subsidiary company in Israel is developing a digital speaker and has not reached the stage of generating any revenue
from the technology.
31 December
2020
$
31 December
2019
$
191,434
191,434
272,520
272,520
(12,102,367)
(12,102,367)
‑
(6,231,930)
(6,231,930)
‑
(12,102,367)
(6,231,930)
Segment Revenues
Digital speakers
Total of all segments
Segment Results
Digital speakers
(Loss) before income tax
Income tax gain/ (expense)
(Loss) for the period
40
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
21. Segment Information (Cont.)
segment Assets and Liabilities
Digital speakers
Total all segments
Unallocated
Consolidated
Assets
Liabilities
31 December
2020
$
31 December
2019
$
31 December
2020
$
31 December
2019
$
7,972,669
7,972,669
‑
9,753,108
9,753,108
‑
2,195,807
2,195,807
‑
2,519,572
2,519,572
‑
7,972,669
9,753,108
2,195,807
2,519,572
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
Acquisition of segment assets
31 December
2020
$
31 December
2019
$
31 December
2020
$
31 December
2019
$
509,836
509,836
‑
490,405
490,405
‑
105,038
105,038
‑
223,556
223,556
‑
509,836
409,405
105,038
223,556
Digital speakers
Total all segments
Unallocated
Consolidated
Information on Geographical segments
Geographical segments
31 December 2020
Australia
Israel
Total
31 December 2019
Australia
Israel
Total
Revenue
from external
Customers
$
191,434
‑
191,434
272,520
‑
272,520
segment
Assets
$
6,875,673
1,096,996
7,972,669
8,394,835
1,358,273
9,753,108
Acquisition
of segment
Assets
$
‑
105,038
105,038
‑
223,556
223,556
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Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
22. Financial Risk Management Objectives and Policies
The consolidated entity’s principal financial instruments held during the year comprise receivables, payables, cash and
short term deposits.
Due to the small size of the consolidated entity 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 consolidated entity’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
2020
$
31 December
2019
$
4,750,888
5,823,291
The consolidated entity 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 2020, 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)
‑0.07% (7 basis points)
31 December
2020
$
31 December
2019
$
31 December
2020
$
31 December
2019
$
50,944
(3,435)
53,135
(26,567)
50,944
(3,435)
53,135
(26,567)
The movements in losses are due to higher/lower interest rates on cash and cash equivalents balances. The cash and cash
equivalents balances were lower in December 2020 than in December 2019 and interest rates were lower ‑ accordingly the
sensitivity is lower.
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Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
22. 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 consolidated entity’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
2020
$
31 December
2019
$
31 December
2020
$
31 December
2019
$
‑
‑
‑
‑
1,344,060
44,733
1,590,070
1,423,733
510,598
129,106
‑
All US$ denominated financial instruments were translated to A$ at 31 December 2020 at the exchange rate of 0.7707
(2019: 0.7013).
At 31 December 2020 and 31 December 2019, 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%
2020
$
2019
$
2020
$
2019
$
685,606
(396,931)
512,526
(296,725)
685,606
(396,931)
512,526
(296,725)
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
consolidated entity. The consolidated entity has adopted a policy of only dealing with creditworthy counterparties which
are continuously monitored.
The credit risk on liquid funds is limited because the counterparties are major banks with high credit‑ratings assigned by
international credit agencies.
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Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
22. 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 and
non‑derivative financial liabilities. The tables have been drawn up based on the undiscounted contractual maturities of the
financial assets and financial liabilities 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
%
Less than
1 month
$
1‑3 months
$
3 months
to 1 year
$
1‑5 years
$
31 December 2020
Assets
Non interest bearing
Fixed rate instruments
Liabilities
0.00%
0.1%
506,192
3,976,637
Non interest bearing
0.00%
1,630,684
31 December 2019
Assets
Non interest bearing
Fixed rate instruments
Liabilities
0.00%
1.19%
509,839
2,318,723
‑
‑
‑
‑
3,010,544
Non interest bearing
0.00%
1,648,566
‑
All financial liabilities are expected to be settled under commercial terms of within 12 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.
23. Subsequent Events
The Directors are not aware of any significant events since the end of the financial year and up to the date of this report.
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Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
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)
Total equity
Financial performance
(Loss) for the period
Other comprehensive income
25. Controlled Entity
name of entity
Parent Entity
Audio Pixels Holdings Limited
Controlled Entities
Audio Pixels Limited
Audio Pixels Technologies Pty Limited
31 December
2020
$
31 December
2019
$
4,195,859
41,150,507
45,346,366
5,317,712
37,247,213
42,564,925
295,721
27,863
260,349
190,264
323,584
45,022,782
450,613
42,114,312
73,092,487
66,217,433
(19,985,932)
(20,496,789)
(8,083,773)
45,022,782
(3,606,332)
42,114,312
(4,477,441)
(509,583)
‑
‑
(4,477,441)
(509,583)
Country of
Incorporation
31 December
2020
%
31 December
2019
%
Australia
Israel
Australia
100.00
100.00
100.00
100.00
45
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 notes to AnD FoRMInG PARt oF tHe FInAnCIAL stAteMents
FoR tHe YeAR enDeD 31 DeCeMBeR 2020
26. Commitments
The subsidiary company, Audio Pixels Limited of Israel has entered into various purchase orders and commitments of
$122,808 (2019: $794,566) with various strategic partners which will become payable once qualified products are delivered
to the company.
27. Additional Company Information
Audio Pixels Holdings Limited is a listed public company, incorporated and operating in Australia.
Registered office and Principal Place of Business
Suite 3, Level 12
75 Elizabeth Street
Sydney NSW 2000
Australia
Tel: (02) 9233 3915
Fax: (02) 9232 3411
www.audiopixels.com.au
The Company has 15 (2019: 15) employees.
46
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273 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 OTC market in the United State of America under the code “ADPXY” which is under the NASDAQ
International Designation program.
Substantial Shareholders
At 22 February 2021 the following substantial shareholders were registered:
Fred Bart Group
Link Traders (Aust) Pty Ltd
Voting Rights
ordinary shares
Percentage of total
ordinary shares
5,819,122
1,970,588
20.28%
6.87%
At 22 February 2021 there were 2,494 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 22 February 2021 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
ordinary
shareholders
number of
shares
Percentage of
shares
1,482
591
208
177
36
2,494
514,862
1,470,486
1,647,787
4,816,466
20,249,062
28,698,663
1.79%
5.12%
5.74%
16.78%
70.57%
100.00%
There were 79 ordinary shareholders with less than a marketable parcel.
There is no current on‑market buy‑back.
47
Annual Report 2020 • Audio Pixels Holdings Limited ACN 094 384 273
CORPORATE DIRECTORY
tWentY LARGest oRDInARY sHAReHoLDeRs
Twenty Largest Ordinary Shareholders
Directors
At 22 February 2021 the 20 largest ordinary shareholders held 63.05% of the total issued fully paid quoted ordinary shares
of 28,698,663.
Fred Bart (Chairman)
Ian Dennis
Cheryl Bart AO
Fully Paid
ordinary shares
Percentage of
total
shareholder
1. Landed Investments (NZ) Limited
Company secretary
2. Altshuler Shacham Trusts Ltd
3. BNP Paribus Nominees Pty Ltd
Ian Dennis
4. Link Traders (Aust) Pty Limited
Registered off ice
6. Frederick Bart
Suite 3, Level 12
75 Elizabeth Street
SYDNEY NSW 2000
Australia
8. James John Bart
7. Bart Superannuation Pty Limited
5. HSBC Custody Nominees (Australia) Pty Ltd
9. Kam Superannuation Fund Pty Limited
10. Jamber Investments Pty Ltd
11. Cheryl Bart
Telephone: +61 2 9233 3915
Facsimile: +61 2 9232 3411
Email:
13. Arvada Pty Ltd
12. Decante Pty Limited
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