Crowd Media Holdings Limited
Appendix 4E
Preliminary final report
1. Company details
Name of entity:
Crowd Media Holdings Limited
ABN:
13 083 160 909
Reporting period:
For the year ended 30 June 2021
Previous period:
For the year ended 30 June 2020
2. Results for announcement to the market
$
Revenues from ordinary activities
down
33.0% to
11,058,027
Loss from ordinary activities after tax attributable to the owners of Crowd
Media Holdings Limited
up
225.7% to
(6,235,508)
Loss for the year attributable to the owners of Crowd Media Holdings
Limited
up
225.7% to
(6,235,508)
Dividends
There were no dividends paid, recommended or declared during the current financial period.
Comments
The loss for the Group after providing for income tax amounted to $6,235,508 (30 June 2020: $1,914,560).
Refer to Directors Report for discussion of the results of operation for the year.
3. Net tangible assets
Reporting
period
Previous
period
Cents
Cents
Net tangible assets per ordinary security
0.77
0.46
Calculated as follows:
Group
2021
2020
$
$
Net assets
5,251,448
2,581,775
Less: Intangibles
(507,020)
(825,158)
Net tangible assets
4,744,428
1,756,617
Total shares issued
620,030,418
384,016,015
4. Control gained over entities
Not applicable.
Crowd Media Holdings Limited
Appendix 4E
Preliminary final report
5. Loss of control over entities
Name of entities (or group of entities)
Bongo Operations Pty Ltd
Global AQA Pty Ltd
Buddy Operations Pty Ltd
Crowd Mobile QA Operations B.V.
Date control lost
1 May 2021
$
Contribution of such entities to the reporting entity's profit/(loss) from ordinary activities before income tax
during the period (where material)
(2,223,178)
Profit/(loss) from ordinary activities before income tax of the controlled entity (or group of entities) whilst
controlled during the whole of the previous period (where material)
(446,745)
6. Dividends
Current period
There were no dividends paid, recommended or declared during the current financial period.
Previous period
There were no dividends paid, recommended or declared during the previous financial period.
7. Dividend reinvestment plans
Not applicable.
8. Details of associates and joint venture entities
The Group has an interest in a joint venture that, at 30 June 2021, had not yet been fully incorporated. Once the entity is
incorporated, information in relation to ASX 4.3A(11) will be provided in the financial report for the half-year ended 31
December 2021.
9. Foreign entities
Details of origin of accounting standards used in compiling the report:
Not applicable.
10. Audit qualification or review
Details of audit/review dispute or qualification (if any):
The financial statements have been audited and an unmodified opinion has been issued.
11. Attachments
Details of attachments (if any):
The Annual Report of Crowd Media Holdings Limited for the year ended 30 June 2021 is attached.
Crowd Media Holdings Limited
Appendix 4E
Preliminary final report
12. Signed
As authorised by the Board of Directors
Signed ___________________________
Date: 27 August 2021
Steven Schapera
Chairman
Melbourne
1
Crowd Media
Holdings Limited
(ASX:CM8 / FWB: CM3)
For year ended 30 June 2021
Crowd is in a strong position to
compete: as at 30 June 2021 we
had disposed of almost all legacy
debt; had $3.1 million of cash on
hand; divested the loss-making
Mobile Premium SMS business;
and had assembled an
outstanding execution team to
drive our Talking Head vision to
commercialisation.
Steven Schapera
Crowd Media Holdings Limited - Chairman
The Board looks forward to
welcoming Mr Idan Schmorak as
the Company’s Chief Executive
Officer. Idan’s military
background has clearly
characterised his
lead-from-the-front management
style, with a focus and discipline
that is exemplary.
Crowd Media Holdings Limited
Contents
30 June 2021
Corporate directory
2
Chairman’s letter
3
Directors’ report
6
Auditor’s independence declaration
23
Consolidated statement of profit or loss and other comprehensive income
24
Consolidated statement of financial position
26
Consolidated statement of changes in equity
27
Consolidated statement of cash flows
28
Notes to the consolidated financial statements
29
Directors' declaration
78
Independent auditor’s report to the members of Crowd Media Holdings Limited
79
Shareholder information
83
1
Steven Schapera
Crowd Media Holdings Limited - Chairman
Crowd Media Holdings Limited
Corporate directory
30 June 2021
Directors
Steven Schapera - Chairman
Domenic Carosa
Matthew Blake
Scott Mison
Company Secretary
Scott Mison
Registered Office
202/37 Barrack Street
Perth WA 6000
Australia
Tel: 1300 034 045 (within Australia) | +61 (3) 9020 1468 (outside Australia)
Fax: +61 (3) 9923 6507
Principal place of business
95B Piet Heinkade
1019 GM Amsterdam
Netherlands
+61 (3) 9020 1468 (outside Australia)
Share Registry
Boardroom Pty Limited
Level 12
225 George Street
Sydney NSW 2000
Tel: 1300 737 760 (within Australia) | +61 (0) 3 9290 9600 (outside Australia)
Fax: +61 (2) 9279 0664
Auditor
RSM Australia Partners
Level 21
55 Collins Street
Melbourne VIC 3000
Stock exchange listing
Crowd Media Holdings Limited shares are listed on the Australian Securities Exchange
(ASX code: CM8)
Crowd Media Holdings Limited shares are also dual listed on the Frankfurt Stock
Exchange (FWB code: CM3)
Website
Corporate Governance
Statement
www.crowdmedia.com
The Company’s directors and management are committed to conducting the Group’s
business in an ethical manner and in accordance with the highest standards of
corporate governance. The Company has adopted and substantially complies with the
ASX Corporate Governance Principles and Recommendations (4th Edition)
(‘Recommendations’) to the extent appropriate to the size and nature of the Group’s
operations.
The Company has prepared a Corporate Governance Statement which sets out the
corporate governance practices that were in operation throughout the financial year for
the Company, identifies any Recommendations that have not been followed, and
provides reasons for not following such Recommendations.
The Company’s Corporate Governance Statement and policies, which will be
approved at the same time as the Annual Report, can be found on its website:
https://crowdmedia.listedcompany.com/corporate_governance.html
2
Chairman’s Letter
“Crowd Media showed significant financial
improvements in terms of liquidity and financial
position compared to the previous year. Crowd
raised $6.9 million (net of transaction costs) in FY
2021 from share placements and option
exercises. These proceeds were used to make
key strategic investments in support of our
Talking Head strategy, as well as to retire the
onerous BillFront note payable in full. ”
Financial Summary
For FY 2021, revenue was $10.9 million, underlying
EBITDA was ($1.0 million), and operating cashflow
was ($1.2 million).
Crowd Media showed significant financial
improvements in terms of liquidity and financial
position compared to the previous year. Crowd raised
$6.9 million (net of transaction costs) in FY 2021 from
share placements and option exercises. These
proceeds were used to make key strategic
investments in support of our Talking Head strategy,
as well as to retire the onerous BillFront note payable
in full. As at 30 June 2021, Crowd’s net cash (cash
less debt) was $2.5 million, a substantial increase of
$4.2 million from 30 June 2020.
The net tangible asset backing for each Crowd share
of 0.77 cents has improved by 67% versus prior year
at 0.46 cents.
Underlying EBITDA Results
Crowd Media reported an underlying EBITDA result of
($1.0 million) for FY 2021:
Net Profit / (Loss) after tax (NPAT)
(6,235,508)
Add back: income tax expense / (benefit)*
(non-cash)
2,352,435
Add back: finance costs
461,043
Deduct: interest revenue
(18,131)
Add back: depreciation & amortisation
639,219
Earnings before interest, tax,
depreciation and amortisation (EBITDA)
(2,800,942)
Add back: impairment expenses (non-cash)
853,843
Add back: share-based payments expense
399,197
Add back: restructuring and financing costs
503,308
Effects of exchange rate changes
231
Underlying EBITDA
(1,044,363)
Dear Shareholders,
I am pleased to present Crowd Media’s 2021 Annual Report. Crowd is in a strong position to compete: as at 30 June
2021 we had disposed of almost all legacy debt; had $3.1 million of cash on hand; divested the loss-making Mobile
Premium SMS business; and had assembled an outstanding execution team to drive our Talking Head vision to
commercialisation.
Since then, we have reached another significant milestone with the appointment of Mr Idan Schmorak as Chief
Executive Office of the Company effective 20 September 2021. Before joining Crowd, Idan served as the Director of
Business Development at VFR Holdings, an Israeli-based start-up incubator and investment firm. In this position, he
was tasked with driving growth in products and services, increasing sales revenue and leading the marketing function
across a number of company-owned ventures, including leading the “Talking Head” team as part of VFR’s joint
venture with Crowd Media. The Board is delighted to welcome Mr Schmorak to lead Crowd Media in its next phase of
growth as we drive our conversational commerce objectives to commercialisation.
In support of these objectives, and the repositioning of the company as a media tech player, the Board of Crowd Media
sought to cement a number of strategic alliances. Today these comprise four investee partners: Forever Holdings (UK);
our joint venture with VFR (Israel), UneeQ / Digital Humans (USA) and Aflorithmic (UK). Each of these serve to further
advance our Talking Head strategy. Crowd has since released its beta version of the “Digital Dom - Talking Head”. This
digital twin of Crowd’s Director, Domenic Carosa, showcases Crowd’s integration of our partner technologies
(Aflorithmic for Dom’s voice cloning, and VFR for the Digital Dom), and delivered great learnings for our conversational
commerce platform. Today the plan is coming together nicely, and we can soon shift focus to the integration of
Crowd’s Q&A tech.
3
* Income tax expense reflects a non-cash write-off of
deferred tax assets of $2.7 million.
Chairman’s Letter
Q&A
All players, including Crowd Mobile, have witnessed a
decline in the use of SMS as a paid-messaging
platform. This trend has been accompanied by
strengthening and material regulatory headwinds
culminating in the Board deciding to divest its legacy
and loss making Mobile Premium SMS business for a
nominal amount effective 1 May 2021. Going forward,
this will improve overall profitability of the company by
allowing the Mobile division to focus solely on the
profitable Subscription business. The underlying Q&A
AI-driven technology platform remains the property of
Crowd and the purchaser of the Q&A business has
been provided with a non-exclusive license to use the
platform for a monthly recurring fee.
Subscription
This division has also faced a number of regulatory
headwinds, which we were able to mitigate with the
launch of new products and markets. Revenue for FY
2021 of $6.0 million was down 14% versus the prior
year, however, the underlying EBITDA profit
contribution was flat at $2.0 million (FY 2020: $2.1
million). The Company continues to optimize its cost
base within the division in order to maximise profits
and cashflow.
Crowd Direct Division
Revenue for the Crowd Direct division grew by 186%
versus the prior year, however, the business has
performed below our internal expectations as
measured by return on marketing spend. We are
seeing retail advertising dollars continue to move away
from bricks and mortar to aggressive online
deployment, coupled with deepening discounts.
Taken together, this has driven customer acquisition
costs up, and CM2 margins down, to the point where
it is not sustainable for a number of our brands.
Accordingly, we have restructured this business
segment in a positive way, to focus on our
best-performing brands: Kamu and KINN, which we
see as having the strongest potential.
Fiscal Responsibility
Total current and non-current borrowings were
reduced by $2.9 million during the year. The Company
fully repaid its securitized BillFront debt facility in
November 2020, ahead of the scheduled maturity in
April 2021, which saves the company at least $0.2
million per year in financing costs. The Tranche 1
convertible notes matured on 28 June 2021; of these,
545 notes ($1,000 each) were converted to shares and
460 notes were repaid in cash. As at 30 June 2021,
total borrowings outstanding were $0.6 million, this
being Tranche 2 of the convertible notes, maturing in
December 2021.
Crowd Media showed strong improvements in
numerous financial metrics compared to the prior
year: operating cash flows of ($1.2 million) improved
by $0.6 million, or 35%; working capital improved by
$3.1 million from ($0.3 million) to $2.8 million; net
assets increased by $2.7 million from $2.6 million to
$5.3 million; and net cash (cash less debt) increased
by $4.2 million from ($1.7 million) to $2.5 million.
The Board continues to review cashflow, costs, debt
finance strategy, and balance sheet strength on an
ongoing and disciplined basis.
Board, Governance and Management
The Board is committed to ensuring Crowd’s business
is conducted in accordance with the highest
standards of corporate governance and we work
closely with our Auditors who assist us to navigate this
process.
This, together with strong management and an
experienced Board, creates a positive culture for
shareholders, employees and customers.
Outlook
With the divestiture of the loss-making Mobile
Premium SMS business, the Crowd Mobile division is
able to now focus solely on the profitable Subscription
business. Whilst the Mobile Subscription division is
expected to deliver ongoing profits, and its cost base
and performance are continually optimised to ensure
this, the Company is not expecting any growth within
this segment. Conversational commerce, on the other
hand, is growing exponentially and our timing seems
perfect.
The Board looks forward to welcoming Mr Idan
Schmorak as the Company’s Chief Executive Officer.
Idan’s military background has clearly characterised
his lead-from-the-front management style, with a
focus and discipline that is exemplary. His substantial
experience in avatar and AI technology, as well as
business development, is just what Crowd needs in a
CEO to drive the Talking Head platform and its
conversational commerce capabilities.
On behalf of the Board, I thank our Shareholders for
their ongoing support. To the Company’s Management
team, I thank you for your loyalty, integrity, and
committed effort during a most challenging period. I
also thank my co-directors for the significant value
they have added to the Board, and the extent to which
they have made themselves available. Special thanks
must go to CFO Melanie Mouldenhauer who has
worked under most testing conditions, and director
Domenic Carosa for his assistance particularly with
the divestment of the Mobile Premium SMS business.
As Chairman, I look forward to leading Crowd Media
into its next phase of growth, as we execute on our
strategic plans to reposition this business for a
prosperous future in conversational commerce.
Steven Schapera
Crowd Media Holdings Limited - Chairman
4
5
Crowd Media Holdings Limited
Directors' report
30 June 2021
6
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the 'Group' or 'Crowd') consisting of Crowd Media Holdings Limited (referred to hereafter as the 'Company', 'parent entity'
or 'Crowd Media') and the entities it controlled at the end of, or during, the year ended 30 June 2021.
Directors
The following persons were directors of Crowd Media Holdings Limited during the whole of the financial year and up to the
date of this report, unless otherwise stated:
Steven Schapera - Chairman
Domenic Carosa*
Matthew Blake
Appointed 7 April 2021
Scott Mison
Appointed 7 April 2021
Robert Quandt
Resigned 30 June 2021
John Palermo
Resigned 1 April 2021
*
On 27 January 2021, Domenic Carosa resigned as Chief Executive Officer of the Company, effective 31 March 2021,
however remained on the board of directors as a Non-Executive Director from this date.
Principal activities
During the financial year the principal continuing activities of the Group consisted of the sale of information, entertainment
and content and utility services for mobile phones and tablets; the sale of products direct-to-consumer; and development of
conversational commerce technology.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
Crowd Media Holdings Limited was organised into three operating segments during the financial year: Mobile Content-
Q&A (or ‘Q&A’), Mobile Content-Subscription (or ‘Subscription’) and Crowd Direct. Effective 1 May 2021, the Group sold its
Q&A Mobile Premium SMS business for a nominal amount. This will improve overall profitability of the company by
allowing the Mobile division to focus solely on the profitable Subscription business. The underlying Q&A AI-driven
technology platform will remain the property of Crowd and the purchaser will be provided with a non-exclusive license to
use the platform.
Crowd Media Group earned revenue, from both continuing and discontinued operations, for the year ended 30 June 2021
of $10,909,622 versus $16,480,683 in the prior year ended 30 June 2020 (‘pcp’ or ’prior year’). The Company’s earnings
before interest, tax, depreciation and amortisation ('EBITDA') was a loss of ($2,800,942) for the year (pcp: loss of
($1,071,400)) and the net loss after tax for the year was ($6,235,508) (30 June 2020: ($1,914,560)). Crowd Media’s net
asset position at 30 June 2021 was $5,251,448, an increase of $2,669,673 from the 30 June 2020 balance.
Crowd Media Holdings Limited
Directors' report
30 June 2021
7
Notably, the Company’s EBITDA and net loss includes a non-cash share-based payment charge of $399,197, restructuring
costs of $503,308 and non-cash impairment expenses of $853,843. When adjusting only for these effects, consistent with
performance measures reported to shareholders during the year, the Underlying EBITDA for the financial year is a loss of
($1,044,363), as follows:
2021
2020
Increase/
(decrease)
Percentage
change
$
$
$
%
Net profit / (loss) after tax ('NPAT')
(6,235,508)
(1,914,560)
(4,320,948)
226%
Deduct/(Add back): income tax expense / (benefit)* (non-cash)
2,352,435
(654,348)
3,006,783
(460%)
Add back: finance costs
461,043
899,679
(438,636)
(49%)
Deduct: interest revenue
(18,131)
(327)
(17,804)
5445%
Add back: depreciation and amortisation
639,219
598,156
41,063
7%
Earnings before interest, tax, depreciation and amortisation
('EBITDA')
(2,800,942)
(1,071,400)
(1,729,542)
161%
Add back: impairment expenses (non-cash)
853,843
(3,197)
857,040
(26808%)
Add back: share-based payments expense (non-cash)
399,197
302,488
96,709
32%
Add back: restructuring and financing costs
503,308
605,265
(101,957)
(17%)
Add back: net fair value loss on derivative financial liabilities
-
303,902
(303,902)
(100%)
Effects of exchange rate changes
231
4,315
(4,084)
(95%)
Underlying EBITDA
(1,044,363)
141,373
(1,185,736)
(839%)
*
Income tax expense for the year ended 30 June 2021 reflects a non-cash write-off of deferred tax assets of $2.7
million.
Comparison of years ended 30 June 2021 to 30 June 2020
2021
2020
Increase/
(decrease)
Percentage
change
$
$
$
%
Revenue
10,909,622
16,480,683
(5,571,061)
(34%)
Other income
137,506
22,000
115,506
525%
Cost of sales
(3,095,715)
(4,642,716)
1,547,001
(33%)
Selling, general and administration expenses
(9,898,512)
(12,934,564)
3,036,052
(23%)
Impairment expense
(853,843)
3,197
(857,040)
(26808%)
EBITDA Profit / (Loss)
(2,800,942)
(1,071,400)
(1,729,542)
161%
Interest income
18,131
327
17,804
5445%
Depreciation and amortisation
(639,219)
(598,156)
(41,063)
7%
Finance costs
(461,043)
(899,679)
438,636
(49%)
Income tax (expense) / benefit*
(2,352,435)
654,348
(3,006,783)
(460%)
NPAT
(6,235,508)
(1,914,560)
(4,320,948)
226%
*
Income tax expense for the year ended 30 June 2021 reflects a non-cash write-off of deferred tax assets of $2.7
million.
Revenue
For the year, revenue from Crowd Media’s continuing and discontinued operations totaled $10,909,622 (pcp: $16,480,683).
Revenue from continuing operations of $7,026,273 (pcp: $7,788,671) was represented by Subscription of $6,034,239,
(pcp: $7,032,328) and Crowd Direct of $992,034 (pcp: $347,923). Revenue from discontinued operations of the Q&A
division was $3,883,349 (pcp: $8,692,012).
Crowd Media Holdings Limited
Directors' report
30 June 2021
8
The Subscription business continues to be profitable. Management will continue to expand the product offering, adding
new and better-quality third-party content and diversifying revenue in order to lift revenue and profitability.
Crowd Direct contributed revenue of $992,034 during the year. The division has performed below internal expectations as
measured by return on marketing spend. Retail marketing dollars are seen to be moving away from bricks and mortar, to
aggressive online deployment. Accordingly, we have restructured this business segment in a positive way, to focus on our
best-performing brands, Kamu and KINN, which we see as having the strongest potential.
Expenses
(i) Cost of sales
For the year, the Group’s cost of sales was $3,095,715, or 28% of revenue (pcp: $4,642,716 at 28%). Cost of sales as a
percentage of revenue are expected to be relatively flat over the next financial year.
(ii) Selling, general and administration expense
Crowd Media’s selling, general and administration expenses (including Marketing) of $9,898,512 for the year decreased by
23% compared to the prior period. The decrease is mainly due to a decrease in marketing expenses (-32% versus the
prior period), consultants fees (-26% versus the prior period) and employee benefits expenses (-9% versus the prior
period).
(iii) Depreciation and amortisation
The consolidated depreciation and amortisation expense for the year was $639,219 (pcp: $598,156). The increase from
prior period is mainly due to amortisation on software intangible assets.
(iv) Finance costs
The consolidated finance costs for the year of $461,043 decreased by $438,636, or 49%, from the prior year. The
Company fully repaid the loan payable to BillFront during the year, which will save approximately $0.2 million in annual
interest and administration costs.
(v) Income tax expense/(benefit)
The consolidated tax expense for the year of $2,352,435 reflects a non-cash write-off of deferred tax assets of $2.7 million.
Cash flow
The Company’s net cash used in operating activities for the year was ($1,162,271), an improvement of 35% compared to
the prior period cash used of ($1,797,144). Operating cash flows are expected to further improve in the next financial year
2022 due to realising benefits from the ongoing initiatives to improve business performance and optimize costs.
The net cash flow from investing activities for the period was ($1,609,870). Crowd invested $332k in the form of an
interest-bearing convertible notes loan to UneeQ Limited, $225k in the form of an interest-bearing Convertible Note loan to
Forever Holdings Ltd, $444k for the first tranche of the investment into Aflorithmic Labs Ltd and $326k in the joint venture
with VFR Assets and Holdings Ltd. These investments further cemented Crowd’s strategic alliances with these partners
and underpinned Crowd’s “Talking Head” strategy.
Net cash flow from financing activities was $4,100,271. Crowd raised $6.9 million (net of transaction costs) from the issue
of shares during the year and used $1.6 million to fully repay and extinguish (early) the BillFront loan to preserve cash. A
further $0.46 million was used to repay a portion of the Tranche 1 convertible notes at maturity. The remaining Tranche 1
notes were converted to shares.
Liquidity and Financial Position
At Crowd Media’s 30 June 2021 reporting date:
●
Cash and cash equivalents (‘cash’) were $3,142,991, an increase of $1.2 million from $1,913,953 at 30 June 2020
●
Working capital (defined as current assets less current liabilities) increased by $3.1 million to $2,833,099 (30 June
2020: ($300,448))
●
Reporting date total current and non-current borrowings (‘debt’) were $624,743, a decrease of $2.9 million from
$3,554,598 at 30 June 2020
●
Net cash (cash less debt) was $2,518,248, an increase of $4.2 million from ($1,640,645) at 30 June 2020
●
Net assets were $5,251,448, an increase of $2.7 million from $2,581,775 at 30 June 2020
The financial statements have been prepared on a going concern basis. Refer to note 2 of the financial statements.
Crowd Media Holdings Limited
Directors' report
30 June 2021
9
Significant changes in the state of affairs
Strategic collaboration and investments
On 11 September 2020, the Company announced that it had agreed to make a strategic investment into London-based
Forever Holdings Limited, thereby accelerating Crowd’s conversational commerce initiative. Forever is a ‘leading edge’
voice-and-visual Interactive Digital Media company. Their technology can enable one-to-one digital encounters between an
influencer and any follower who wants to converse with them 1:1. This dialogue can function on Crowd’s AI-driven Q&A
Chatbot technology platform, across multiple languages. By combining Crowd’s Chatbot technology with Forever’s digital
voice and visual projections we can significantly accelerate development of Crowd’s Horizon 3 “Talking Head” strategy, as
outlined by Chairman Steven Schapera at the November 2019 Annual General Meeting. On 11 September 2020, Crowd
invested GBP£50,000 (circa AUD$92,000) in Forever Holdings Ltd with the issue of 4,000,000 Crowd shares at $0.023 and
on 16 March 2021 Crowd invested GBP£125,000 in the form of a convertible note receivable from Forever Holdings.
On 11 November 2020, the Company announced that it signed two strategic partnerships in order to further accelerate its
stated “Talking Head” strategy. Crowd executed a three-year binding Heads of Agreement with UneeQ Limited for the
creation of ‘Digital Ambassadors’ to help power Conversation Commerce activity and influencer marketing. As part of this
partnership, Crowd invested USD 250,000 in the form of an interest-bearing convertible notes loan to UneeQ Limited
during the financial half-year. Crowd also executed a binding Heads of Agreement to form a joint venture with Israel-based
VFR Assets and Holdings Limited ('VFR'). VFR has created one of the world’s first virtual digital influencers, Zoe Dvir (i.e. a
digital influencer that does not actually exist in real life). The joint venture will bring together the technical and commercial
expertise of both parties to create a platform that will allow Crowd to roll out many “talking heads” in days and at a fraction
of the cost of current platforms. Crowd will invest USD 250,000 into an incorporated joint venture, while VFR will provide
the IP, know-how and development resources to develop the proof of concept.
On 27 January 2021, the Company announced that it has further cemented its push into conversational commerce via a
new collaboration and strategic investment into Artificial Intelligence company Aflorithmic Labs Ltd ('AFLR'). Crowd will
invest GBP 1 million in AFLR, structured as GBP 750,000 in cash and the equivalent of GBP 250,000 in Crowd shares
(subject to shareholder approval), after which Crowd will own a 10% stake in AFLR and AFLR will own approximately 1.3%
of Crowd. This collaboration enables the accelerated integration of Crowd’s well-proven AI-driven Q&A Chatbot
technology (which has processed in excess of 180 million questions and answers) with AFLR’s voice cloning technology
and the video technology from one of Crowd’s other JV partners, VFR, as previously announced. Together, these comprise
of the platform for Crowd’s Talking Head technology that aims to deliver an immersive experience combining sight, sound,
and real-time conversation.
Capital raising and full repayment of loan payable to BillFront
On 16 November 2020, the Company announced that it raised $4 million (less transaction costs) through a placement of
80 million ordinary shares at $0.05 per share and 40 million options with an exercise price of $0.07 and 2-year expiry from
issue. The issue of these shares and options was approved by shareholders at the Extraordinary General Meeting held on
19 March 2021. The placement proceeds were utilised by the Company to strengthen the balance sheet, continue
accelerated R&D of its “Talking Head” technology, boost inventory for the Crowd Direct division and repay the BillFront
loan payable in full.
On 27 January 2021, the Company announced that it raised $1.6 million (less transaction costs) through a placement of 32
million ordinary shares at $0.05 per share and 16 million options with an exercise price of $0.07 and 2-year expiry from
issue. The issue of these shares and options was approved by shareholders at the Extraordinary General Meeting held on
19 March 2021. The placement proceeds were utilised by the Company to strengthen the balance sheet and continue
accelerated R&D of its “Talking Head” technology.
Management update
On 27 January 2021, the Company announced that Domenic Carosa resigned as Chief Executive Officer of the Company,
effective 31 March 2021, to spend more time with his recently-listed fintech company, Banxa Holdings Inc. Mr. Carosa
transitioned to a Non-Executive Director role with the Company and will remain available, on an as-needed consulting
basis, for projects relating to Crowd’s Horizon 2 (Fintech and Insurtech) and Horizon 3 (Talking Head) objectives.
Chairman Steven Schapera and Director Robert Quandt both moved to interim executive roles whilst the board
commenced a search for a new Chief Executive Officer.
Crowd Media Holdings Limited
Directors' report
30 June 2021
10
Board appointments and resignations
On 7 April 2021, the Company announced that Mr Matthew Blake and Mr Scott Mison were appointed as Non-Executive
Directors of the Company. Mr Mison was also appointed as Company Secretary. Mr Blake has 25 years’ experience in the
financial services industry and with ASX companies. Mr Mison has more than 23 years of international corporate and
operational experience. On 6 April 2021, the Company announced that Mr John Palermo retired as Non-Executive Director
and Company Secretary of the Company, effective 1 April 2021, and on 21 June 2021 the Company announced that Mr
Robert Quandt would retire as Non-Executive Director of the Company, effective 30 June 2021.
Divestment of mobile premium SMS (Q&A) business
On 29 April 2021, the Company announced that it has divested its legacy and loss making Mobile Premium SMS business
for a nominal amount, effect 1 May 2021. This will improve overall profitability of the Company by allowing the Mobile
division to focus solely on the profitable Subscription business. The underlying Q&A AI-driven technology platform will
remain the property of Crowd and the purchaser has been provided with a non-exclusive license to use the platform.
Maturity of Tranche 1 Convertible Notes
On 28 June 2021, the Company announced that Tranche 1 of the European Investments Consortium Convertible Notes
were fully repaid. Of the 1,005 notes (each $1,000 face value) outstanding at maturity, 545 notes were converted to shares
and 460 notes were repaid in cash, including interest.
Novel Coronavirus (COVID-19)
The Novel Coronavirus ('COVID-19') has been declared a pandemic in March 2020 by the World Health Organisation
('WHO'). There have been considerable economic impacts in Australia, Europe and globally arising from the outbreak of
COVID-19 and Government action to reduce the spread of the virus. The outbreak of COVID-19 and the subsequent
quarantine measures imposed by the Australian, European and other governments as well as the travel and trade
restrictions imposed by Australia, Europe and other countries in early 2020 have caused disruption to businesses and
economic activity.
The impact of the COVID-19 pandemic is ongoing is dependent on measures imposed by the Australian Government and
other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic
stimulus that may be provided. It is not practicable to estimate the potential impact, positive or negative, after the reporting
date.
There were no other significant changes in the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
On 16 August 2021, the Company announced the appointment of Mr Idan Schmorak as Chief Executive Officer of the
Company with effect from 20 September 2021. Idan currently serves as the Director of Business Development at VFR
Holdings, an Israeli-based start-up incubator and investment firm. In this position, he has been tasked with driving growth
in products and services, increasing sales revenue and leading the marketing function across a number of company-owned
ventures, including leading the “Talking Head” team as part of the VFR joint venture with Crowd Media.
On 13 August 2021, the Company issued 2,003,065 fully paid ordinary shares on conversion of performance rights and
200,765 fully paid ordinary shares in lieu of interest paid on the Tranche 2 convertible notes.
No other matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect
the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Likely developments and expected results of operations
The Directors and management of the Group will focus on targeting growth in the combined business operations, whilst
paying down debt in cash, wherever possible.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
Crowd Media Holdings Limited
Directors' report
30 June 2021
11
Information on directors
Name:
Steven Schapera
Title:
Non-Executive Chairman
Qualifications:
Mechanical Engineering, Winemaking
Experience and expertise:
Steven has more than 30 years’ experience founding and building businesses across
agricultural, wine, and cosmetics industries. He co-founded BECCA Cosmetics in
2001 and exited to Estee Lauder in 2016 for more than AUD $300m. He continues to
serve as Chairman of BECCA Holdings, the original investment entity. He was an
early investor into Berlin-based Invincible Brands GmbH, and has served on the
board as an Non-Executive Director since January 2018. Having studied both
mechanical engineering and winemaking, Steven possesses a rare mix of technical
and bio-technical skills. These are combined with an excellent understanding of
supply chain, branding and positioning, as evidenced by his significant success
selling branded products in more than 40 countries across Europe, North America,
Australia, Asia, and Africa in the beauty, health, and wellness industries.
Other current directorships:
Chief Executive Officer of Lab Brands Ltd (UK); Chairman of BECCA Holdings Pty
Ltd; Non-Executive Director of Invincible Brands GmbH (Germany); Non-Executive
Director of ASX-listed OBJ Ltd; Non-Executive Director of Wild Nutrition Ltd (UK);
Chairman of Swedish Nasdaq First North (SIMRIS ALG AB)
Former directorships (last 3 years): None
Special responsibilities:
None
Interests in shares:
20,000,000 ordinary shares (held indirectly)
Interests in options:
29,100,000 options over ordinary shares (held indirectly by Namaqua Holdings Ltd;
Mr. Schapera has a relevant interest in Namaqua Holdings Ltd and accordingly has a
relevant interest in the securities held by the entity)
Interests in rights:
None
Contractual rights to shares:
500 Tranche 2 convertible notes (held indirectly)
Name:
Domenic Carosa
Title:
Non-Executive Director
Qualifications:
Masters of Entrepreneurship and Innovation (MEI) from Swinburne University
Experience and expertise:
Domenic Carosa is a Non-Executive Director of Crowd Media. With over 20 years’
experience in business and technology, Domenic has built a reputation as a leader in
the internet space by building one of Australia’s leading digital music service
providers in the late 90’s, and building from scratch Australia’s second largest virtual
web hosting/communications company which he sold for A$25 million in 2006-07.
Domenic was previously the co-founder and Group CEO of ASX-listed Destra
Corporation Ltd which was the largest independent media and entertainment
company in Australia with revenues of over A$100 million. Mr Carosa was a director
of Destra Limited until April 2009. Domenic is past Chairman of the Internet Industry
Association (IIA). Domenic is Non-Executive Chairman of the Future Capital
Development Fund and Non-Executive Chairman of Dominet Digital Corporation Pty
Ltd, an internet investment group.
Other current directorships:
Chairman and Non-Executive Director of Banxa Holdings Inc
Former directorships (last 3 years): None
Special responsibilities:
None
Interests in shares:
32,565,428 ordinary shares (held indirectly)
Interests in options:
3,500,000 options over ordinary shares (held indirectly)
Interests in rights:
None
Contractual rights to shares:
50 Tranche 2 convertible notes (held indirectly)
Crowd Media Holdings Limited
Directors' report
30 June 2021
12
Name:
Matthew Blake
Title:
Non-Executive Director (appointed 7 April 2021)
Qualifications:
Bachelor of Commerce from University of Western Australia and Graduate Diploma in
Applied Finance and Investment with the Financial Services Institute of Australasia.
Experience and expertise:
Matthew has 25 years' experience in the financial services industry and with ASX
companies. He joined DJ Carmichael Pty Limited in 1999 as an Investment Adviser,
later becoming an Executive Director of the company until the sale of the business to
Shaw and Partners Limited in 2019.
Other current directorships:
Executive Director of Victory Mines Limited; Non-Executive Director of Great
Southern Mining Limited
Former directorships (last 3 years): None
Special responsibilities:
None
Interests in shares:
None
Interests in options:
None
Interests in rights:
None
Contractual rights to shares:
None
Name:
Scott Mison
Title:
Non-Executive Director and Company Secretary (appointed 7 April 2021)
Qualifications:
Bachelor of Business degree majoring in Accounting and Member of the Institute of
Chartered Accountants in Australia and Governance Institute of Australia.
Experience and expertise:
Scott has more than 23 years of corporate and operation experience in Australia, UK,
Central Asia, Africa and the US. He has held many Director and Company Secretary
roles with ASX or LSE companies.
Other current directorships:
None
Former directorships (last 3 years): Non-Executive Director of Zyber Holdings Limited (resigned 30 October 2018); Non-
Executive Director of New World Resources (resigned 30 November 2019)
Special responsibilities:
None
Interests in shares:
None
Interests in options:
None
Interests in rights:
None
Contractual rights to shares:
None
Name:
Robert Quandt
Title:
Former Non-Executive Director (resigned effective 30 June 2021)
Qualifications:
Master of Industrial Engineering from Technical University of Berlin
Experience and expertise:
Robert Quandt is a consultant by training and has spent 10 years in Management
Consulting at Booz & Company. He also served 2 years as strategy lead for the €5bn
Americas Business of Linde AG a German industrial gases supplier. He later joined
Invincible Brands, a digital native brand builder with HelloBody, Natural Mojo,
IamKamu, Mermaid + Me and Banana Beauty as Chief Operating Officer and Chief
Financial Officer ('CFO') and helped to scale the business from €7m to €100m in just
3 years. Robert has broad expertise in operations from supply chain to fulfilment and
deep expertise in Finance. He also lead the sale of Invincible Brands to the London
based Private Equity Capital D.
Other current directorships:
Not applicable as no longer a Director
Former directorships (last 3 years): Not applicable as no longer a Director
Special responsibilities:
Not applicable as no longer a Director
Interests in shares:
Not applicable as no longer a Director
Interests in options:
Not applicable as no longer a Director
Interests in rights:
Not applicable as no longer a Director
Contractual rights to shares:
Not applicable as no longer a Director
Crowd Media Holdings Limited
Directors' report
30 June 2021
13
Name:
John Palermo
Title:
Former Non-Executive Director (resigned effective 1 April 2021)
Qualifications:
Fellow Chartered Accountant
Experience and expertise:
John has 20 years' experience in public practice, with expertise in corporate
transaction execution, strategic business management and business structuring.
Other current directorships:
Not applicable as no longer a Director
Former directorships (last 3 years): Not applicable as no longer a Director
Special responsibilities:
Not applicable as no longer a Director
Interests in shares:
Not applicable as no longer a Director
Interests in options:
Not applicable as no longer a Director
Interests in rights:
Not applicable as no longer a Director
Contractual rights to shares:
Not applicable as no longer a Director
'Other current directorships' quoted above are current directorships for listed entities and excludes directorships of all other
types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and
excludes directorships of all other types of entities, unless otherwise stated.
Company secretary
Scott Mison is the Company Secretary and is a Non-Executive Director. Refer to 'Information on directors' section above
for experience and expertise.
Meetings of directors
The number of meetings of the Company's Board of Directors ('the Board') held during the year ended 30 June 2021, and
the number of meetings attended by each director were:
Full Board
Attended
Held
Steven Schapera - Chairman
10
10
Domenic Carosa
10
10
Matthew Blake
2
2
Scott Mison
2
2
Robert Quandt
10
10
John Palermo
8
8
Held: represents the number of meetings held during the time the director held office.
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the Group, in accordance
with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
●
Principles used to determine the nature and amount of remuneration
●
Details of remuneration
●
Service agreements
●
Share-based compensation
●
Additional information
●
Additional disclosures relating to key management personnel
Crowd Media Holdings Limited
Directors' report
30 June 2021
14
Principles used to determine the nature and amount of remuneration
The objective of the Group's executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives
and the creation of value for shareholders. The Board of Directors ('the Board') ensures that executive reward satisfies the
following key criteria for good reward governance practices:
●
competitiveness and reasonableness
●
acceptability to shareholders
●
performance linkage / alignment of executive compensation
●
transparency
The Board is responsible for determining and reviewing remuneration arrangements for its directors and executives. The
performance of the Group depends on the quality of its directors and executives. The remuneration philosophy is to attract,
motivate and retain high performance and high quality personnel.
The reward framework is designed to align executive reward to shareholders' interests. The Board have considered that it
should seek to enhance shareholders' interests by:
●
having revenue and economic profit as a core component of plan design
●
focusing on sustained growth in shareholder wealth, and particularly growth in share price, and delivering constant or
increasing return on assets as well as focusing the executive on key non-financial drivers of value
●
attracting and retaining high calibre executives
Additionally, the reward framework should seek to enhance executives' interests by:
●
rewarding capability and experience
●
reflecting competitive reward for contribution to growth in shareholder wealth
●
providing a clear structure for earning rewards
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
Non-executive directors' remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive
directors' fees and payments are reviewed annually by the Board. The Board may, from time to time, receive advice from
independent remuneration consultants to ensure non-executive directors' fees and payments are appropriate and in line
with the market. Non-executive directors may receive share options or other incentives. Fees are reviewed annually and
include superannuation contributions, where required. The non-executive directors do not receive any other benefits.
ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by a general
meeting. The most recent determination was at the Annual General Meeting held on 9 December 2015, where the
shareholders approved an aggregate remuneration of $500,000.
Executive remuneration
The Group aims to reward executives based on their position and responsibility, with a level and mix of remuneration which
has both fixed and variable components.
The executive remuneration and reward framework has four components:
●
base pay and non-monetary benefits
●
short-term performance incentives
●
share-based payments
●
other remuneration such as superannuation and long service leave
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the
Board, based on individual and business unit performance, the overall performance of the Group and comparable market
remunerations.
The short-term incentives ('STI') program is designed to align the targets of the business units with the targets of those
executives in charge of meeting those targets. STI payments are paid as cash bonuses and are discretionary.
Crowd Media Holdings Limited
Directors' report
30 June 2021
15
The long-term incentives (‘LTI’) may include equity based payments in the form of shares, performance rights or options.
On 17 December 2014, shareholders approved a Performance Rights Plan ('PR Plan'). Under the PR Plan, selected
employees and Directors may be granted performance rights which will entitle them to receive ordinary shares in the
Company, subject to the Company meeting performance objectives.
On 18 December 2019, the Company agreed to issue Performance Rights to employees. The three-year PRs are based
on retention targets for key employees, excluding directors, and the maximum number of shares that can be issued on
conversion is 11,000,000. On 5 November 2020, the Company agreed to issue a further 4,500,000 performance rights to
key employees, excluding directors, on similar terms to those issued on 18 December 2019.
Performance rights may be issued to all employees and Directors of the Company and any Subsidiary. The number of
performance rights (if any) to be offered from time to time to each person shall be determined by the Board in its discretion.
The performance rights in respect of an employee will vest no earlier than on meeting the relevant Performance
Condition(s). Unissued performance rights will be issued pro-rata at the time the relevant Performance Condition is met.
The employee must still be employed by the Company at the time of vesting, unless otherwise agreed by the Board in
limited circumstances. Any performance rights that have been earned but remain unvested will vest in the event of a
takeover or similar event occurring. Should the holder of performance rights resign, all rights not yet vested will be forfeited.
The Company established an employee option plan in 2015 called the Crowd Mobile Limited Executive Option Plan
(‘Option Plan’), which replaces the former Q Limited Incentive Option Scheme. The Group may, at the discretion of the
Board, grant options over ordinary shares in the Company to certain key management personnel (and Directors) of the
Group. The options are issued for nil consideration and are granted in accordance with performance guidelines established
by the Board.
As a legacy tool, the Company has so far maintained, though not activated, The Q Limited Share Plan (‘Q Plan’) which was
established in 2011 fiscal year as part of the then remuneration strategy and the Q Plan currently holds a minor
shareholding in the Company.
All LTI incentives are designed and used specifically to align management and shareholder’s interests and to assist the
Company in the attraction, motivation and retention of appropriately skilled staff. In particular, the plans are designed to
provide relevant executives with an incentive for future performance and typically include vesting conditions under the
plans.
Group performance and link to remuneration
Remuneration for certain individuals is directly linked to the performance of the Group. A portion of cash bonus and
incentive payments are dependent on defined earnings per share targets being met. The remaining portion of the cash
bonus and incentive payments are at the discretion of the Nomination and Remuneration Committee. Refer to the section
'Additional information' below for details of the earnings and total shareholders return for the last five years.
Use of remuneration consultants
During the financial year ended 30 June 2021, the Company did not engage remuneration consultants to review its existing
remuneration policies or provide recommendations on how to improve incentive programs.
Voting and comments made at the Company's 2020 Annual General Meeting ('AGM')
At the 25 November 2020 AGM, 78.28% of the votes received supported the adoption of the remuneration report for the
year ended 30 June 2020. The Company did not receive any specific feedback at the AGM regarding its remuneration
practices.
Details of remuneration
The key management personnel of the Group consisted of the directors of Crowd Media Holdings Limited and the following
person:
●
Melanie Mouldenhauer – Chief Financial Officer.
Crowd Media Holdings Limited
Directors' report
30 June 2021
16
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in the following tables.
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
Cash
Non-
Termination
Super-
Leave
Equity-
and fees
bonus
monetary
payments
annuation
benefits
settled
Total
2021
$
$
$
$
$
$
$
$
Non-Executive
Directors:
S Schapera(2)
153,009
-
-
-
-
-
47,622
200,631
D Carosa(1)
14,902
-
-
-
-
-
-
14,902
R Quandt
197,537
-
-
-
-
-
47,622
245,159
M Blake*
13,833
-
-
-
-
-
-
13,833
S Mison*
22,133
-
-
-
-
-
-
22,133
J Palermo**
53,800
-
-
-
-
-
-
53,800
Executive
Directors:
S Schapera(2)
45,232
-
-
-
-
-
-
45,232
D Carosa(1)
384,995
-
-
-
3,325
-
27,213
415,533
Other Key
Management
Personnel:
M Mouldenhauer
213,517
-
-
-
-
-
41,925
255,442
1,098,958
-
-
-
3,325
-
164,382
1,266,665
*
Remuneration is for the period from appointment as a director or key management personnel to 30 June 2021
**
Remuneration is for the period from 1 July to date of resignation or termination as a director or key management
personnel
(1)
On 27 January 2021, Domenic Carosa resigned as Chief Executive Officer of the Company, effective 31 March 2021,
however remained on the board of directors as a Non-Executive Director from this date
(2)
Mr. Schapera transitioned from Non-Executive Director to Executive Director upon the resignation of Mr. Carosa
effective 31 March 2021
Crowd Media Holdings Limited
Directors' report
30 June 2021
17
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
Cash
Non-
Termination
Super-
Leave
Equity-
and fees
bonus
monetary
payments
annuation
benefits
settled
Total
2020
$
$
$
$
$
$
$
$
Non-Executive
Directors:
S Schapera**
188,404
-
-
-
-
-
51,780
240,184
R Quandt**
152,054
-
-
-
-
-
51,780
203,834
J Palermo**
23,275
-
-
-
-
-
-
23,275
T Hnarakis*
37,500
-
-
-
3,563
-
-
41,063
S Karzis*
36,058
-
-
-
-
-
-
36,058
Executive
Directors:
D Carosa
456,048
-
2,396
-
5,700
-
29,588
493,732
Other Key
Management
Personnel:
M Mouldenhauer
212,297
-
-
-
-
-
20,079
232,376
A Ignatovska*
49,238
-
-
-
-
-
-
49,238
M de Jong*
117,117
-
-
60,281
-
-
-
177,398
1,271,991
-
2,396
60,281
9,263
-
153,227
1,497,158
*
Remuneration is for the period from 1 July to date of resignation or termination as a director or key management
personnel
**
Remuneration is for the period from appointment as a director or key management personnel to 30 June 2020
Proportion of remuneration linked to performance
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Fixed remuneration
At risk - STI
At risk - LTI
Name
2021
2020
2021
2020
2021
2020
Non-Executive Directors:
S Schapera
76%
78%
-
-
24%
22%
D Carosa
100%
-
-
-
-
-
R Quandt
81%
75%
-
-
19%
25%
M Blake
100%
-
-
-
-
-
S Mison
100%
-
-
-
-
-
J Palermo
100%
100%
-
-
-
-
T Hnarakis
-
100%
-
-
-
-
S Karzis
-
100%
-
-
-
-
Executive Directors:
S Schapera
100%
-
-
-
-
-
D Carosa
93%
94%
-
-
7%
6%
Other Key Management
Personnel:
M Mouldenhauer
84%
91%
-
-
16%
9%
A Ignatovska
-
100%
-
-
-
-
M de Jong
-
100%
-
-
-
-
Crowd Media Holdings Limited
Directors' report
30 June 2021
18
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
Details of these agreements are as follows:
Name:
Melanie Mouldenhauer
Title:
Chief Financial Officer
Agreement commenced:
1 June 2019
Term of agreement:
Ongoing
Details:
Base annual package, performance based, ‘at-risk’ STI and discretionary share
based LTI remuneration, subject to annual performance review. 4 months termination
by employer, 2 months by executive. The Company may terminate the agreement
with cause in certain circumstances such as gross misconduct.
* Base annual package - €133,590 plus statutory social security
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Share-based compensation
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during the year
ended 30 June 2021.
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other key
management personnel in this financial year or future reporting years are as follows:
Fair value
Vesting date and
per option
Grant date
exercisable date
Expiry date
Exercise price at grant date
13 December 2019
13 December 2020
13 December 2022
$0.030
$0.0122
13 December 2019
13 December 2020
13 December 2022
$0.050
$0.0094
13 December 2019
13 December 2020
13 December 2022
$0.070
$0.0077
Options granted carry no dividend or voting rights.
There were no other options over ordinary shares granted to or vested in directors and other key management personnel
as part of compensation during the year ended 30 June 2021.
Performance rights
The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration of directors and
other key management personnel in this financial year or future reporting years are as follows:
Fair value
Vesting date and
per right
Grant date
exercisable date
Expiry date
at grant date
18 December 2019
30 June 2021*
30 June 2021
$0.0230
18 December 2019
30 June 2022
30 June 2022
$0.0230
5 November 2020
30 June 2021*
30 June 2021
$0.0400
5 November 2020
30 June 2022
30 June 2022
$0.0400
5 November 2020
30 June 2023
30 June 2023
$0.0400
*
Performance rights that vested on 30 June 2021 were issued subsequent to the financial year in August 2021
Performance rights granted carry no dividend or voting rights.
Crowd Media Holdings Limited
Directors' report
30 June 2021
19
Additional information
The earnings of the Group for the five years to 30 June 2021 are summarised below:
2021
2020
2019
2018
2017
$
$
$
$
$
Sales revenue (continuing and discontinued)
10,909,622
16,480,683
23,918,776
38,552,347
43,887,388
Adjusted EBITDA
(2,558,481)
(770,695)
(5,587,379)
(23,175,246)
9,407,765
Total comprehensive income for the year
attributable to the owners of Crowd Media
Holdings Limited
(6,119,657)
(1,856,796)
(4,284,757)
(25,640,051)
(251,234)
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
2021
2020
2019
2018
2017
Share price at financial year end ($)
0.02
0.03
0.01
0.04
0.14
Basic earnings per share (cents per share)
(1.26)
(0.68)
(2.10)
(11.71)
(0.05)
Diluted earnings per share (cents per share)
(1.26)
(0.68)
(2.10)
(11.71)
(0.05)
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each director and other members of key
management personnel of the Group, including their personally related parties, is set out below:
Balance at
Received
Balance at
the start of
as part of
Disposals/
the end of
the year
remuneration
Additions
other
the year
Ordinary shares
S Schapera
-
-
20,000,000
-
20,000,000
D Carosa
25,742,968
-
6,822,460
-
32,565,428
R Quandt
-
-
10,277,778
-
10,277,778
M Blake
-
-
-
-
-
S Mison
-
-
-
-
-
J Palermo
-
-
-
-
-
M Mouldenhauer
-
-
242,285
-
242,285
25,742,968
-
37,342,523
-
63,085,491
Option holding
The number of options over ordinary shares in the Company held during the financial year by each director and other
members of key management personnel of the Group, including their personally related parties, is set out below:
Balance at
Expired/
Balance at
the start of
forfeited/
the end of
the year
Granted
Exercised
other
the year
Options over ordinary shares
S Schapera
9,100,000
20,000,000
-
-
29,100,000
D Carosa
5,200,000
2,500,000
(4,200,000)
-
3,500,000
R Quandt
9,100,000
10,277,778
-
-
19,377,778
M Blake
-
-
-
-
-
S Mison
-
-
-
-
-
J Palermo
-
-
-
-
-
M Mouldenhauer
-
-
-
-
-
23,400,000
32,777,778
(4,200,000)
-
51,977,778
Crowd Media Holdings Limited
Directors' report
30 June 2021
20
Performance rights holding
The number of performance rights over ordinary shares in the Company held during the financial year by each director and
other members of key management personnel of the Group, including their personally related parties, is set out below:
Balance at
Expired/
Balance at
the start of
forfeited/
the end of
the year
Granted
Vested
other
the year
Performance rights over ordinary shares
S Schapera
-
-
-
-
-
D Carosa
-
-
-
-
-
R Quandt
-
-
-
-
-
M Blake
-
-
-
-
-
S Mison
-
-
-
-
-
J Palermo
-
-
-
-
-
M Mouldenhauer
1,598,000
1,500,000
(398,000)
-
2,700,000
1,598,000
1,500,000
(398,000)
-
2,700,000
This concludes the remuneration report, which has been audited.
Shares under option
Unissued ordinary shares of Crowd Media Holdings Limited under option at the date of this report are as follows:
Exercise
Number
Grant date
Expiry date
price
under option
2 April 2019
2 April 2022
$0.050
2,000,000
6 December 2019
6 December 2021
$0.030
8,514,488
6 December 2019
6 December 2021
$0.050
2,000,000
6 December 2019
6 December 2021
$0.100
5,000,000
13 December 2019
13 December 2022
$0.030
10,000,000
13 December 2019
13 December 2022
$0.050
5,850,000
13 December 2019
13 December 2022
$0.070
5,850,000
13 December 2019
31 December 2021
$0.030
5,388,889
30 January 2020
31 December 2021
$0.030
277,778
30 January 2020
31 December 2023
$0.030
4,752,000
27 March 2020
31 December 2023
$0.030
1,250,000
20 April 2020
31 December 2023
$0.030
1,250,000
1 May 2020
31 December 2021
$0.030
3,611,111
11 June 2020
31 December 2021
$0.030
1,111,111
11 June 2020
31 December 2023
$0.030
8,000,000
25 August 2020
11 September 2022
$0.040
12,432,810
1 October 2020
30 September 2023
$0.030
7,500,000
6 November 2020
31 December 2023
$0.030
1,500,000
16 November 2020
31 December 2021
$0.030
8,333,333
16 November 2020
31 December 2023
$0.030
500,000
31 January 2021
31 December 2021
$0.030
277,778
23 March 2021
25 March 2023
$0.070
70,000,000
28 June 2021
31 December 2021
$0.030
30,277,778
195,677,076
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of
the Company or of any other body corporate.
Crowd Media Holdings Limited
Directors' report
30 June 2021
21
Shares under performance rights
Unissued ordinary shares of Crowd Media Holdings Limited under performance rights at the date of this report are as
follows:
Number
Grant date
Expiry date
under rights
18 December 2019
30 June 2022
5,500,000
5 November 2020
30 June 2022
1,350,000
5 November 2020
20 June 2023
2,250,000
9,100,000
No person entitled to exercise the performance rights had or has any right by virtue of the performance right to participate
in any share issue of the Company or of any other body corporate.
Shares issued on the exercise of options
The following ordinary shares of Crowd Media Holdings Limited were issued during the year ended 30 June 2021 and up to
the date of this report on the exercise of options granted:
Exercise
Number of
Date options granted
price
shares issued
6 December 2019
$0.030
576,889
6 December 2019
$0.050
3,000,000
13 December 2019
$0.030
2,777,778
13 December 2019
$0.030
2,222,222
13 December 2019
$0.030
500,000
13 December 2019
$0.030
1,666,667
13 December 2019
$0.030
1,700,000
27 March 2020
$0.030
3,250,000
27 March 2020
$0.030
250,000
20 April 2020
$0.030
3,000,000
20 April 2020
$0.030
3,000,000
20 April 2020
$0.030
2,555,556
25 August 2020
$0.040
80,000
25 August 2020
$0.040
11,560,286
25 August 2020
$0.040
74,000
25 August 2020
$0.040
610,000
25 August 2020
$0.040
3,117,475
25 August 2020
$0.040
1,271,858
25 August 2020
$0.040
1,958,571
20 November 2020
$0.030
2,000,000
20 November 2020
$0.030
500,000
13 January 2021
$0.030
9,166,667
54,837,969
Shares issued on the exercise of performance rights
The following ordinary shares of Crowd Media Holdings Limited were issued during the year ended 30 June 2021 and up to
the date of this report on the exercise of performance rights granted:
Number of
Date performance rights granted
shares issued
18 December 2019
3,059,687
5 November 2020
419,760
3,479,447
Crowd Media Holdings Limited
Directors' report
30 June 2021
22
Indemnity and insurance of officers
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a
director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and executives of
the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the
Company or any related entity.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
Non-audit services
There were no non-audit services provided during the financial year by the auditor.
Officers of the Company who are former partners of RSM Australia Partners
There are no officers of the Company who are former partners of RSM Australia Partners.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this directors' report.
Auditor
RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act
2001.
On behalf of the directors
___________________________
Steven Schapera
Chairman
27 August 2021
Melbourne
23
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Crowd Media Holdings Limited for the year ended 30 June
2021, I declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
M PARAMESWARAN
Partner
Dated: 27 August 2021
Melbourne, Victoria
Crowd Media Holdings Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2021
Group
Note
2021
2020
$
$
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
24
Revenue from continuing operations
Revenue from continuing operations
5
7,026,273
7,788,671
Cost of sales
(1,866,436)
(2,022,023)
Gross profit
5,159,837
5,766,648
Share of losses of joint ventures accounted for using the equity method
16
(7,232)
-
Other income
6
10,000
10,000
Interest revenue calculated using the effective interest method
18,131
327
Expenses
Marketing
(1,674,599)
(1,755,692)
Administration and other expenses
(800,012)
(781,085)
Consultants
(854,065)
(1,092,859)
Depreciation and amortisation expense
7
(554,944)
(533,601)
Employee benefits expense
(2,326,988)
(2,207,989)
Impairment of assets
(280,423)
-
Travel and accommodation
(14)
(61,137)
Product development
(11,371)
(5,118)
Share-based payment
7
(399,197)
(302,488)
Allowance for expected credit losses
(95,066)
3,197
Net fair value loss on financial liabilities
-
(303,902)
Finance costs
7
(455,334)
(858,464)
Loss before income tax (expense)/benefit from continuing operations
(2,271,277)
(2,122,163)
Income tax (expense)/benefit
8
(2,218,239)
1,248,865
Loss after income tax (expense)/benefit from continuing operations
(4,489,516)
(873,298)
Loss after income tax expense from discontinued operations
9
(1,745,992)
(1,041,262)
Loss after income tax (expense)/benefit for the year attributable to the owners
of Crowd Media Holdings Limited
28
(6,235,508)
(1,914,560)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
115,851
57,764
Other comprehensive income for the year, net of tax
115,851
57,764
Total comprehensive income for the year attributable to the owners of Crowd
Media Holdings Limited
(6,119,657)
(1,856,796)
Total comprehensive income for the year is attributable to:
Continuing operations
(4,373,665)
(815,534)
Discontinued operations
(1,745,992)
(1,041,262)
(6,119,657)
(1,856,796)
Crowd Media Holdings Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2021
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
25
Cents
Cents
Earnings per share for loss from continuing operations attributable to the
owners of Crowd Media Holdings Limited
Basic earnings per share
38
(0.91)
(0.31)
Diluted earnings per share
38
(0.91)
(0.31)
Earnings per share for loss from discontinued operations attributable to the
owners of Crowd Media Holdings Limited
Basic earnings per share
38
(0.35)
(0.37)
Diluted earnings per share
38
(0.35)
(0.37)
Earnings per share for loss attributable to the owners of Crowd Media
Holdings Limited
Basic earnings per share
38
(1.26)
(0.68)
Diluted earnings per share
38
(1.26)
(0.68)
Crowd Media Holdings Limited
Consolidated statement of financial position
As at 30 June 2021
Group
Note
2021
2020
$
$
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
26
Assets
Current assets
Cash and cash equivalents
10
3,142,991
1,913,953
Trade and other receivables
11
1,241,779
2,176,440
Accrued income
12
781,940
1,925,793
Inventories
13
412,566
118,236
Income tax receivable
8
-
471,974
Convertible notes receivable
14
344,638
-
Other assets
15
226,513
262,605
Total current assets
6,150,427
6,869,001
Non-current assets
Investments accounted for using the equity method
16
318,833
-
Other financial assets
17
983,490
-
Property, plant and equipment
18
151,753
224,470
Right-of-use assets
19
1,498,401
1,950,985
Intangibles
20
507,020
825,158
Deferred tax
8
-
2,244,437
Convertible notes receivable
14
235,550
-
Total non-current assets
3,695,047
5,245,050
Total assets
9,845,474
12,114,051
Liabilities
Current liabilities
Trade and other payables
21
2,241,887
3,727,401
Deferred revenue
22
109,229
85,062
Borrowings
23
624,743
2,905,275
Lease liabilities
24
287,234
285,433
Employee benefits
25
43,163
13,427
Provisions
11,072
152,851
Total current liabilities
3,317,328
7,169,449
Non-current liabilities
Borrowings
23
-
649,323
Lease liabilities
24
1,276,698
1,713,504
Total non-current liabilities
1,276,698
2,362,827
Total liabilities
4,594,026
9,532,276
Net assets
5,251,448
2,581,775
Equity
Issued capital
26
40,052,021
31,599,781
Reserves
27
6,186,647
5,731,186
Accumulated losses
28
(40,987,220)
(34,749,192)
Total equity
5,251,448
2,581,775
Crowd Media Holdings Limited
Consolidated statement of changes in equity
For the year ended 30 June 2021
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
27
Issued
Foreign
currency
Share-based
payments
Convertible
note
optionality
Accumulated
Total equity
capital
reserve
reserve
reserve
losses
Group
$
$
$
$
$
$
Balance at 1 July 2019
28,720,072
249,274
4,813,399
-
(32,834,632)
948,113
Loss after income tax benefit for
the year
-
-
-
-
(1,914,560)
(1,914,560)
Other comprehensive income
for the year, net of tax
-
57,764
-
-
-
57,764
Total comprehensive income for
the year
-
57,764
-
-
(1,914,560)
(1,856,796)
Transactions with owners in
their capacity as owners:
Contributions of equity, net of
transaction costs (note 26)
2,879,709
-
-
-
-
2,879,709
Share-based payments (note
39)
-
-
302,488
-
-
302,488
Convertible note option (note
28)
-
-
-
308,261
-
308,261
Balance at 30 June 2020
31,599,781
307,038
5,115,887
308,261
(34,749,192)
2,581,775
Issued
Foreign
currency
Share-based
payments
Convertible
note
optionality
Accumulated
Total equity
capital
reserve
reserve
reserve
losses
Group
$
$
$
$
$
$
Balance at 1 July 2020
31,599,781
307,038
5,115,887
308,261
(34,749,192)
2,581,775
Loss after income tax expense
for the year
-
-
-
-
(6,235,508)
(6,235,508)
Other comprehensive income
for the year, net of tax
-
115,851
-
-
-
115,851
Total comprehensive income for
the year
-
115,851
-
-
(6,235,508)
(6,119,657)
Transactions with owners in
their capacity as owners:
Contributions of equity, net of
transaction costs (note 26)
8,452,240
-
-
-
-
8,452,240
Share-based payments (note
39)
-
-
399,197
-
-
399,197
Convertible note option (note
23)
-
-
-
(59,587)
-
(59,587)
Cancellation of share capital of
subsidiaries on deregistration of
entities
-
-
-
-
(2,520)
(2,520)
Balance at 30 June 2021
40,052,021
422,889
5,515,084
248,674
(40,987,220)
5,251,448
Crowd Media Holdings Limited
Consolidated statement of cash flows
For the year ended 30 June 2021
Group
Note
2021
2020
$
$
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
28
Cash flows from operating activities
Receipts from customers (inclusive of GST)
13,678,273
17,155,085
Payments to suppliers and employees (inclusive of GST)
(15,116,274)
(17,984,514)
Interest received
18,131
58,033
Government grants (COVID-19)
137,506
22,000
Interest and other finance costs paid
(331,708)
(899,679)
Income taxes refunded
451,801
-
Income taxes paid
-
(148,069)
Net cash used in operating activities
37
(1,162,271)
(1,797,144)
Cash flows from investing activities
Payments for investments
(443,548)
-
Payments for new joint venture capital invested
(326,065)
-
Payments for property, plant and equipment
18
-
(15,090)
Payments for intangibles
20
(283,626)
(255,919)
Payments for convertible notes
(556,631)
-
Proceeds from disposal of property, plant and equipment
-
3,878
Net cash used in investing activities
(1,609,870)
(267,131)
Cash flows from financing activities
Proceeds from issue of shares (net of transaction costs)
26
6,851,695
1,555,250
Proceeds from issue of convertible notes - European Investment Consortium
-
2,821,000
Repayment of convertible notes - European Investment Consortium
(460,000)
-
Repayment of borrowings - BillFront
(1,647,416)
(497,198)
Repayment of convertible notes - Obsidian
-
(563,071)
Repayment of lease liabilities
(435,005)
(323,327)
Net cash from financing activities
4,309,274
2,992,654
Net increase in cash and cash equivalents
1,537,133
928,379
Cash and cash equivalents at the beginning of the financial year
1,913,953
839,462
Effects of exchange rate changes on cash and cash equivalents
(308,095)
146,112
Cash and cash equivalents at the end of the financial year
10
3,142,991
1,913,953
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
29
Note 1. General information
The financial statements cover Crowd Media Holdings Limited as a consolidated entity consisting of Crowd Media Holdings
Limited (referred to as 'Company' or 'parent entity') and the entities it controlled at the end of, or during, the year (referred
to as the 'Group' or 'Crowd Media'). The financial statements are presented in Australian dollars, which is Crowd Media
Holdings Limited's functional and presentation currency.
Crowd Media Holdings Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business are:
Registered office
Principal place of business
202/37 Barrack Street
95B Piet Heinkade
Perth WA 6000
1019 GM Amsterdam
Australia
Netherlands
A description of the nature of the Group's operations and its principal activities are included in the directors' report, which is
not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 27 August 2021. The
directors have the power to amend and reissue the financial statements.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of these
Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of
the Group.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Going concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of normal
business activities and the realisation of assets and discharge of liabilities in the normal course of business.
As disclosed in the financial statements, for the financial year ended 30 June 2021, the Group incurred a loss of
$6,235,508 and had net operating cash outflows of $1,162,271.
The Directors believe that there are reasonable grounds to believe that the Group will be able to continue as a going
concern, after consideration of the following factors:
●
The Group expects to generate positive operating cashflow, in part due to the divestment of the loss making Mobile
Premium SMS (Q&A) business during the current financial year (refer to note 9), which will allow the Mobile division to
focus solely on the profitable Subscription business; and
●
The Group’s proven record of being able to raise funds to support its business plan, which includes receiving $4.0
million through a placement of 80,000,000 shares at $0.050 (refer to note 26) in November 2020 and receiving a
further $1.6 million through a placement of 32,000,000 shares at $0.050 (refer to note 26) in February 2021.
Accordingly, the Directors believe that the Group will be able to continue as a going concern and that it is appropriate to
adopt the going concern basis in the preparation of the financial report.
The financial report does not include any adjustments relating to the amounts or classification of recorded assets or
liabilities that might be necessary if the Group does not continue as a going concern.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 2. Significant accounting policies (continued)
30
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as
appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention except for financial instruments
measured at fair value through profit or loss.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in note 35.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Crowd Media Holdings
Limited as at 30 June 2021 and the results of all subsidiaries for the year then ended.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted
by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity
attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group
recognises the fair value of the consideration received and the fair value of any investment retained together with any gain
or loss in profit or loss.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same
basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the
allocation of resources to operating segments and assessing their performance.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Crowd Media Holdings Limited's functional and
presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into the Company's functional currency using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in profit or loss.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 2. Significant accounting policies (continued)
31
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the
reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average
exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange
differences are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in
exchange for transferring goods or services to a customer. For each contract with a customer, the Group: identifies the
contract with a customer; identifies the performance obligations in the contract; determines the transaction price which
takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the
separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be
delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the
transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts,
rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates
are determined using either the 'expected value' or 'most likely amount' method. The measurement of variable
consideration is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly
probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The measurement
constraint continues until the uncertainty associated with the variable consideration is subsequently resolved. Amounts
received that are subject to the constraining principle are recognised as a refund liability.
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which is
generally at the time of delivery.
Rendering of services
Revenue from a contract to provide services is recognised when the Group satisfies its performance obligation over time
as the services are rendered based on either a fixed price or an hourly rate.
Government grants
Grants from the government are recognised at their fair value when there is reasonable assurance that the grant will be
received and that the Group will comply with all attached conditions. Government grants relating to costs are deferred and
recognised in profit or loss over the period necessary to match them with the costs that they are intended to compensate.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest
rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset
to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the
applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to
temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 2. Significant accounting policies (continued)
32
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when
the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted,
except for:
●
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting
nor taxable profits; or
●
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and
the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the
foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred
tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for
the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is
probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable
authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
Discontinued operations
A discontinued operation is a component of the Group that has been disposed of or is classified as held for sale and that
represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to
dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The
results of discontinued operations are presented separately on the face of the statement of profit or loss and other
comprehensive income.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
Group's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months
after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle
a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within
30 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 2. Significant accounting policies (continued)
33
Contract assets
Contract assets are recognised when the Group has transferred goods or services to the customer but where the Group is
yet to establish an unconditional right to consideration. Contract assets are treated as financial assets for impairment
purposes. The financial statements include the recognition of accrued revenue which is used to refer to a class of contract
assets.
Inventories
Finished goods are stated at the lower of cost and net realisable value on a 'first in first out' basis. Cost comprises of
purchase and delivery costs, net of rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
Joint ventures
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net
assets of the arrangement. Investments in joint ventures are accounted for using the equity method. Under the equity
method, the share of the profits or losses of the joint venture is recognised in profit or loss and the share of the movements
in equity is recognised in other comprehensive income. Investments in joint ventures are carried in the statement of
financial position at cost plus post-acquisition changes in the Group's share of net assets of the joint venture. Goodwill
relating to the joint venture is included in the carrying amount of the investment and is neither amortised nor individually
tested for impairment. Income earned from joint venture entities reduce the carrying amount of the investment.
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the
initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured
at either amortised cost or fair value depending on their classification. Classification is determined based on both the
business model within which such assets are held and the contractual cash flow characteristics of the financial asset
unless an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the
Group has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of
recovering part or all of a financial asset, its carrying value is written off.
Financial assets at amortised cost
A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held within a
business model whose objective is to hold assets in order to collect contractual cash flows; and (ii) the contractual terms of
the financial asset represent contractual cash flows that are solely payments of principal and interest.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial assets which are either measured at
amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon
the Group's assessment at the end of each reporting period as to whether the financial instrument's credit risk has
increased significantly since initial recognition, based on reasonable and supportable information that is available, without
undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected
credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable
to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where
it is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected
credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present
value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance is
recognised in other comprehensive income with a corresponding expense through profit or loss. In all other cases, the loss
allowance reduces the asset's carrying value with a corresponding expense through profit or loss.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 2. Significant accounting policies (continued)
34
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment
(excluding land) over their expected useful lives as follows:
Plant and equipment
1.5 - 5 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting
date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in
the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset,
and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of
the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted
for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with
terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss
as incurred.
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value
at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible
assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are
subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss
arising from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the
carrying amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually.
Changes in the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation
method or period.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for
impairment, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at
cost less accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and are not
subsequently reversed.
Intellectual property
Significant costs associated with intellectual property deemed to have an indefinite life are capitalised as an asset and are
not amortised. Instead, intellectual property assets are tested annually for impairment, or more frequently if events or
changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses.
Impairment losses on intellectual property are taken to profit or loss and are not subsequently reversed.
Distribution network
Significant investments in relation to distribution networks and messaging systems are capitalised as an asset and
amortised on a straight-line basis over the period of their expected benefit, being their finite useful life of 4.7 years.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 2. Significant accounting policies (continued)
35
Software
Significant costs associated with software are deferred and amortised on a straight-line basis over the period of their
expected benefit, being their finite life of 5 - 6 years.
Databases
Costs in relation to databases are capitalised as an asset and amortised on a straight-line basis over the period of their
expected benefit, being their finite life of 5 - 6 years.
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired.
Other non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
form a cash-generating unit.
Trade and other payables
Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of the financial
year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted.
The amounts are unsecured and are usually paid within 30 days of recognition.
Contract liabilities
Contract liabilities represent the Group's obligation to transfer goods or services to a customer and are recognised when a
customer pays consideration, or when the Group recognises a receivable to reflect its unconditional right to consideration
(whichever is earlier) before the Group has transferred the goods or services to the customer. These financial statements
include the recognition of deferred revenue which is a term used to refer to a class of contract liabilities.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They
are subsequently measured at amortised cost using the effective interest method.
The component of the convertible notes that exhibit characteristics of a liability is recognised as a liability in the statement
of financial position, net of transaction costs.
On the issue of the convertible notes the fair value of the liability component is determined using a market rate for an
equivalent non-convertible bond and this amount is carried as a non-current liability using the amortised cost basis until
extinguished on conversion or redemption. The increase in the liability due to the passage of time is recognised as a
finance cost. The remainder of the proceeds are allocated to the conversion option that is recognised and included in
shareholders equity as a convertible note reserve, net of transaction costs. The carrying amount of the conversion option is
not remeasured in the subsequent years. The corresponding interest on convertible notes is expensed to profit or loss.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease
or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Lease payments comprise of fixed
payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option
is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend
on an index or a rate are expensed in the period in which they are incurred.
The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are
incurred. Variable lease payments include rent concessions in the form of rent forgiveness or a waiver as a direct
consequence of the Covid-19 pandemic and which relate to payments originally due on or before 30 June 2021.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 2. Significant accounting policies (continued)
36
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured
if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an
adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use
asset is fully written down.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is
probable the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value
of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the
provision resulting from the passage of time is recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries and other employee benefits expected to be settled within 12 months of the reporting date
are measured at the amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
Employee benefits not expected to be settled within 12 months of the reporting date are measured as the present value of
expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration
is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected
future payments are discounted using market yields at the reporting date on high-quality corporate bonds with terms to
maturity and currency that match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, performance rights or options over shares, that are provided to
employees in exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of
services, where the amount of cash is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined
using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the
option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the
expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do
not determine whether the Group receives the services that entitle the employees to receive payment. No account is taken
of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the
best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount
recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already
recognised in previous periods.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 2. Significant accounting policies (continued)
37
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the
Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was
granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:
●
during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the
expired portion of the vesting period.
●
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the
reporting date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to
settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other
conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made.
An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair
value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a
cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the vesting
period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, they are treated as they had vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and
new award is treated as if they were a modification.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the
fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the
principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques used to measure fair value are those that are appropriate in the circumstances
and which maximise the use of relevant observable inputs and minimise the use of unobservable inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and
transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair
value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either
not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge
and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an
analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison,
where applicable, with external sources of data.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 2. Significant accounting policies (continued)
38
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Crowd Media Holdings Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of additional ordinary that would have been outstanding assuming conversion of all dilutive
potential ordinary shares.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part
of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2021. The Group has
not yet assessed the impact of these new or amended Accounting Standards and Interpretations.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates
and assumptions on historical experience and on other various factors, including expectations of future events,
management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will
seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next
financial year are discussed below.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may
have, on the Group based on known information. This consideration extends to the nature of the products and services
offered, customers, supply chain, staffing and geographic regions in which the Group operates. Other than as addressed in
specific notes, there does not currently appear to be either any significant impact upon the financial statements or any
significant uncertainties with respect to events or conditions which may impact the Group unfavourably as at the reporting
date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-
Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting
estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts
of assets and liabilities within the next annual reporting period but may impact profit or loss and equity. Refer to note 39 for
details of inputs utilised in calculating the fair value of the equity instrument.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 3. Critical accounting judgements, estimates and assumptions (continued)
39
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the
lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected
credit loss rate for each group. These assumptions include recent sales experience, historical collection rates, the impact
of the Coronavirus (COVID-19) pandemic and forward-looking information that is available. The allowance for expected
credit losses, as disclosed in note 11, is calculated based on the information available at the time of preparation. The
actual credit losses in future years may be higher or lower.
Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its property, plant
and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical
innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less
than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be
written off or written down.
Goodwill and other indefinite life intangible assets
The Group tests annually, or more frequently if events or changes in circumstances indicate impairment, whether goodwill
and other indefinite life intangible assets have suffered any impairment, in accordance with the accounting policy stated in
note 2. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations.
These calculations require the use of assumptions, including estimated pre-tax discount rates based on the current cost of
capital and growth rates of the estimated future cash flows.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The Group assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets at
each reporting date by evaluating conditions specific to the Group and to the particular asset that may lead to impairment.
If an impairment trigger exists, the recoverable amount of the asset is determined. This involves assessing the value of the
asset at fair value less costs of disposal and using value-in-use models which incorporate a number of key estimates and
assumptions.
Income tax
The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in
determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary
course of business for which the ultimate tax determination is uncertain. The Group recognises liabilities for anticipated tax
audit issues based on the Group's current understanding of the tax law. Where the final tax outcome of these matters is
different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in
which such determination is made.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement
is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the
underlying asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods
to be included in the lease term. In determining the lease term, all facts and circumstances that create an economical
incentive to exercise an extension option, or not to exercise a termination option, are considered at the lease
commencement date. Factors considered may include the importance of the asset to the Group's operations; comparison
of terms and conditions to prevailing market rates; incurrence of significant penalties; existence of significant leasehold
improvements; and the costs and disruption to replace the asset. The Group reassesses whether it is reasonably certain to
exercise an extension option, or not exercise a termination option, if there is a significant event or significant change in
circumstances.
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to
discount future lease payments to measure the present value of the lease liability at the lease commencement date. Such
a rate is based on what the Group estimates it would have to pay a third party to borrow the funds necessary to obtain an
asset of a similar value to the right-of-use asset, with similar terms, security and economic environment.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
40
Note 4. Operating segments
Identification of reportable operating segments
The Group was organised into three operating segments during the financial year: Mobile Content- Q&A (or ‘Q&A’), Mobile
Content-Subscription (or ‘Subscription’) and Crowd Direct. The Company operates mobile content businesses globally but
predominantly in Europe, Latin America and Australasia. These operating segments are based on the internal reports that
are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in
assessing performance and in determining the allocation of resources. There is no aggregation of operating segments.
Effective 1 May 2021, the Group sold its Mobile Premium SMS ('Q&A') business. The underlying Q&A AI-driven technology
platform will remain the property of Crowd and these assets have been transferred to the Mobile Content - Subscription
segment for reporting from 1 May 2021.
The Subscription operating segment recognises all corporate costs including public company costs, acquisition costs,
share based payments expense and restructure costs. In the prior period, these were reported under the Q&A segment
and have been transferred to Subscription due to the sale of the Q&A business.
For operating segment performance, the CODM reviews EBITDA (earnings before interest, tax, depreciation and
amortisation). The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the
financial statements.
The information reported to the CODM is on at least a monthly basis.
Types of products and services
The principal products and services of each of these operating segments are as follows:
Mobile Content - Q & A
Crowd Mobile proprietary Q&A micro job platform technology that facilitates Q&A
entertainment products via various Direct Carrier Billing, SMS and App product offerings.
Mobile Content - Subscription Crowd Mobile subscription based, broad content offering of products such as mobile
security, games and video portals via an m-payments network. Effective 1 May 2021 with
the sale of the Q&A division, the underlying AI-driven technology platform is reported under
the Subscription division.
Crowd Direct
Crowd Direct (direct-to-consumer) works with brands and digital influencers to sell products
and/or services that it owns, or part-owns, or is strategically aligned with.
Crowd Media
Crowd Media operated as an agency, working with brands and digital influencers to provide
social media marketing, digital influencer advertising and third party affiliate services. As of
the financial year ended 30 June 2020, this division was no longer material and is no longer
a focus of the CODM, but has been reported here for comparative purposes.
The Subscription segment also includes Group Corporate costs.
Intersegment receivables, payables and loans
Intersegment loans are initially recognised at the consideration received. Intersegment loans receivable and loans payable
that earn or incur non-market interest are not adjusted to fair value based on market interest rates. Intersegment loans are
eliminated on consolidation.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 4. Operating segments (continued)
41
Operating segment information
Continuing
Discontinued
Crowd
Crowd
Subscription**
Direct
Media
Total
Q&A *
Total
Group - 2021
$
$
$
$
$
$
Revenue
Sales to external customers
6,034,239
992,034
-
7,026,273
3,883,349
10,909,622
Interest income
7,027
11,104
-
18,131
-
18,131
Total revenue
6,041,266
1,003,138
-
7,044,404
3,883,349
10,927,753
Adjusted EBITDA
(179,066)
(724,575)
-
(903,641)
(1,654,840)
(2,558,481)
Depreciation and amortisation
(531,665)
(23,279)
-
(554,944)
(84,275)
(639,219)
Impairment of assets
(130,391)
(245,098)
-
(375,489)
(478,354)
(853,843)
Interest income
7,027
11,104
-
18,131
-
18,131
Finance costs
(455,334)
-
-
(455,334)
(5,709)
(461,043)
Gain on disposal of
discontinued operation
-
-
-
-
611,382
611,382
Loss before income tax
expense
(1,289,429)
(981,848)
-
(2,271,277)
(1,611,796)
(3,883,073)
Income tax expense
(2,352,435)
Loss after income tax
expense
(6,235,508)
Assets
Segment assets
8,350,787
1,494,687
-
9,845,474
-
9,845,474
Total assets
9,845,474
Liabilities
Segment liabilities
4,415,813
178,213
-
4,594,026
-
4,594,026
Total liabilities
4,594,026
*
Effective 1 May 2021, the Group sold its Mobile Premium SMS (Q&A) business. This segment reflects the
discontinued operations during the financial year.
**
Crowd Mobile (Subscription) segment includes Group Corporate costs. These were recorded under the Q&A segment
in the prior financial year.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 4. Operating segments (continued)
42
Continuing
Discontinued
Crowd
Crowd
Subscription
Direct
Media
Total
Q&A *
Total
Group - 2020
$
$
$
$
$
$
Revenue
Sales to external customers
7,032,328
347,923
239,766
7,620,017
8,860,666
16,480,683
Interest income
-
-
-
-
327
327
Total revenue
7,032,328
347,923
239,766
7,620,017
8,860,993
16,481,010
Adjusted EBITDA
2,204,497
(209,515)
(263,102)
1,731,880
(2,502,575)
(770,695)
Depreciation and amortisation
(417,310)
-
(2,950)
(420,260)
(177,896)
(598,156)
Impairment of assets
3,197
-
-
3,197
-
3,197
Interest income
-
-
-
-
327
327
Finance costs
(2,660,471)
-
(42)
(2,660,513)
1,760,834
(899,679)
Other non-cash expenses
-
-
-
-
(303,902)
(303,902)
Loss before income tax
benefit
(870,087)
(209,515)
(266,094)
(1,345,696)
(1,223,212)
(2,568,908)
Income tax benefit
654,348
Loss after income tax benefit
(1,914,560)
Assets
Segment assets
5,358,356
554,641
-
5,912,997
6,201,054
12,114,051
Total assets
12,114,051
Liabilities
Segment liabilities
3,649,978
389,259
-
4,039,237
5,493,039
9,532,276
Total liabilities
9,532,276
*
Q&A included Group Corporate revenue and costs. Therefore, the amounts do not align with the discontinued
operations amounts in the consolidated statement of profit or loss and other comprehensive income, or note 9, for
2020.
Geographical information
Revenue
Geographical non-current
assets
2021
2020
2021
2020
$
$
$
$
Australasia
165,096
226,703
501,325
805,537
Europe
10,319,502
15,047,078
3,193,724
2,195,078
Latin America
314,846
1,014,535
-
-
Other
110,178
192,367
-
-
10,909,622
16,480,683
3,695,049
3,000,615
The geographical non-current assets above are exclusive of, where applicable, financial instruments, deferred tax assets,
post-employment benefits assets and rights under insurance contracts.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
43
Note 5. Revenue
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Continuing
Discontinued
Subscription
Crowd Direct
Crowd Media
Total
Q&A *
Total
Group - 2021
$
$
$
$
$
$
Major product lines
Information
-
-
-
-
3,883,349
3,883,349
Entertainment and content
6,034,239
-
-
6,034,239
-
6,034,239
Direct-to-consumer
-
992,034
-
992,034
-
992,034
Marketing agency
-
-
-
-
-
-
6,034,239
992,034
-
7,026,273
3,883,349
10,909,622
Geographical regions
Australasia
165,096
-
-
165,096
-
165,096
Europe
5,561,694
992,034
-
6,553,728
3,765,774
10,319,502
Latin America
270,551
-
-
270,551
44,295
314,846
Other
36,898
-
-
36,898
73,280
110,178
6,034,239
992,034
-
7,026,273
3,883,349
10,909,622
Timing of revenue recognition
Goods transferred at a point in
time
6,034,239
992,034
-
7,026,273
3,883,349
10,909,622
Services transferred over time
-
-
-
-
-
-
6,034,239
992,034
-
7,026,273
3,883,349
10,909,622
*
Effective 1 May 2021, the Group sold its Mobile Premium SMS ('Q&A') business. This segment reflects the
discontinued operations during the financial year.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 5. Revenue (continued)
44
Continuing
Discontinued
Subscription
Crowd Direct
Crowd Media
Total
Q&A*
Total
Group - 2020
$
$
$
$
$
$
Major product lines
Information
-
-
-
-
8,860,666
8,860,666
Entertainment and content
7,032,328
-
-
7,032,328
-
7,032,328
Direct-to-consumer
-
347,923
-
347,923
-
347,923
Marketing agency
-
-
239,766
239,766
-
239,766
7,032,328
347,923
239,766
7,620,017
8,860,666
16,480,683
Geographical regions
Australasia
58,481
-
-
58,481
168,222
226,703
Europe
6,195,478
347,923
234,278
6,777,679
8,269,399
15,047,078
Latin America
670,822
-
-
670,822
343,713
1,014,535
Other
107,547
-
5,488
113,035
79,332
192,367
7,032,328
347,923
239,766
7,620,017
8,860,666
16,480,683
Timing of revenue recognition
Goods transferred at a point in
time
7,032,328
347,923
-
7,380,251
8,860,666
16,240,917
Services transferred over time
-
-
239,766
239,766
-
239,766
7,032,328
347,923
239,766
7,620,017
8,860,666
16,480,683
*
Q&A included Group Corporate revenue and costs. Therefore, the amounts do not align with the discontinued
operations amounts in the consolidated statement of profit or loss and other comprehensive income, or note 9, for
2020.
Note 6. Other income
Group
2021
2020
$
$
Government grants (COVID-19)
10,000
10,000
During the year the Group received payments from the Australian Government amounting to $10,000 (2020: $10,000) as
part of its ‘Boosting Cash Flow for Employers’ scheme in response to the Coronavirus pandemic. These non-tax amounts
have been recognised as government grants and recognised as income once there is reasonable assurance that the
Company will comply with any conditions attached.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
45
Note 7. Expenses
Group
2021
2020
$
$
Loss before income tax from continuing operations includes the following specific expenses:
Depreciation
Property, plant and equipment
99,149
119,183
Right-of-use assets
384,717
409,699
Total depreciation
483,866
528,882
Amortisation
Intangibles
71,078
4,719
Total depreciation and amortisation
554,944
533,601
Impairment
Allowance for expected credit losses
95,066
(3,197)
Finance costs
Interest and finance charges paid
361,135
738,784
Interest and finance charges paid/payable on lease liabilities
94,199
119,680
Finance costs expensed
455,334
858,464
Superannuation expense
Defined contribution superannuation expense
7,025
9,263
Share-based payments expense
Share-based payments expense
399,197
302,488
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
46
Note 8. Income tax
Group
2021
2020
$
$
Income tax expense/(benefit)
Current tax
(347,716)
10,170
Deferred tax - origination and reversal of temporary differences
2,700,151
(664,518)
Aggregate income tax expense/(benefit)
2,352,435
(654,348)
Income tax expense/(benefit) is attributable to:
Loss from continuing operations
2,218,239
(1,248,865)
Loss from discontinued operations
134,196
594,517
Aggregate income tax expense/(benefit)
2,352,435
(654,348)
Deferred tax included in income tax expense/(benefit) comprises:
Decrease/(increase) in deferred tax assets
2,700,151
(664,518)
Numerical reconciliation of income tax expense/(benefit) and tax at the statutory rate
Loss before income tax (expense)/benefit from continuing operations
(2,271,277)
(2,122,163)
Loss before income tax expense from discontinued operations
(1,611,796)
(446,745)
(3,883,073)
(2,568,908)
Tax at the statutory tax rate of 27.5%
(1,067,845)
(706,450)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Entertainment expenses
42
272
Impairment of assets
54,999
-
Share-based payments
103,791
90,746
Employee entitlement accruals
6,971
2,006
Net capital gain on exiting Consolidated Group
34,870
-
Tax losses not recognised as recoupable
2,866,426
-
Other items (net)
195,681
12,595
2,194,935
(600,831)
Differences in overseas tax rates
157,500
(53,517)
Income tax expense/(benefit)
2,352,435
(654,348)
Group
2021
2020
$
$
Amounts credited directly to equity
Deferred tax assets
(455,714)
-
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 8. Income tax (continued)
47
Group
2021
2020
$
$
Deferred tax asset
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Tax losses
-
2,426,559
Employee benefits
-
5,991
Transaction fees (blackhole expenditure)
-
242,933
Provisions
-
21,558
Other
-
3,110
-
2,700,151
Amounts recognised in equity:
Foreign exchange revaluation
-
(455,714)
Deferred tax asset
-
2,244,437
Movements:
Opening balance
2,244,437
1,579,919
Credited/(charged) to profit or loss
(2,700,151)
664,518
Credited to equity
455,714
-
Closing balance
-
2,244,437
Group
2021
2020
$
$
Income tax receivable
Income tax receivable
-
471,974
Note 9. Discontinued operations
Sale of Q&A Business
Effective 1 May 2021, the Group sold its Mobile Premium SMS ('Q&A') business for a nominal amount. This will improve
overall profitability of the company by allowing the Mobile division to focus solely on the profitable Subscription business.
The underlying Q&A AI-driven technology platform will remain the property of Crowd and the purchaser will be provided
with a non-exclusive license to use the platform.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 9. Discontinued operations (continued)
48
Financial performance information
Group
2021
2020
$
$
Revenue
3,883,349
8,692,012
Government grants (COVID-19)
127,506
12,000
Total revenue
4,010,855
8,704,012
Cost of sales
(1,229,279)
(2,620,693)
Marketing
(1,313,878)
(2,619,429)
Administration and other expenses
(676,102)
(652,910)
Consultants
(63,493)
(141,207)
Depreciation and amortisation expense
(84,275)
(64,555)
Employee benefits expense
(2,368,365)
(2,968,647)
Impairment of assets
(478,354)
-
Travel and accommodation
(14,578)
(36,168)
Product development
-
(5,933)
Finance costs
(5,709)
(41,215)
Total expenses
(6,234,033)
(9,150,757)
Loss before income tax expense
(2,223,178)
(446,745)
Income tax expense
(134,196)
(594,517)
Loss after income tax expense
(2,357,374)
(1,041,262)
Gain on disposal before income tax
611,382
-
Income tax expense
-
-
Gain on disposal after income tax expense
611,382
-
Loss after income tax expense from discontinued operations
(1,745,992)
(1,041,262)
During the Coronavirus (‘COVID-19’) pandemic, the Group has received JobKeeper support payments from the Australian
Government amounting to $127,506 (2020: $12,000) which are passed on to eligible employees. These have been
recognised as government grants in the financial statements and recorded as other income over the periods in which the
related employee benefits are recognised as an expense. The Group was eligible for JobKeeper support from the
government on the condition that employee benefits continue to be paid.
Carrying amounts of assets and liabilities disposed
Group
2021
$
Cash and cash equivalents
87,196
Trade and other receivables
805,722
Accrued income
475,631
Other
15,454
Total assets
1,384,003
Trade and other payables
2,019,500
Total liabilities
2,019,500
Net liabilities
(635,497)
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 9. Discontinued operations (continued)
49
Details of the disposal
Group
2021
$
Total sale consideration
2
Carrying amount of net liabilities disposed
635,497
Disposal costs
(24,117)
Gain on disposal before income tax
611,382
Income tax expense
-
Gain on disposal after income tax
611,382
Note 10. Cash and cash equivalents
Group
2021
2020
$
$
Current assets
Cash at bank
3,142,991
1,913,953
Note 11. Trade and other receivables
Group
2021
2020
$
$
Current assets
Trade receivables
1,499,382
2,224,998
Less: Allowance for expected credit losses
(276,292)
(467,048)
1,223,090
1,757,950
Other receivables
18,689
418,490
1,241,779
2,176,440
Allowance for expected credit losses
The Group has recognised a loss of $95,066 (30 June 2020: recovery of $3,197) in profit or loss in respect of the expected
credit losses for the year ended 30 June 2021.
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Expected credit loss rate
Carrying amount
Allowance for expected
credit losses
2021
2020
2021
2020
2021
2020
Group
%
%
$
$
$
$
Not overdue
3%
13%
258,274
1,365,444
8,300
176,354
0 to 3 months overdue
8%
23%
1,013,106
726,877
82,175
170,638
3 to 6 months overdue
54%
84%
69,898
78,670
37,567
66,298
6 to 9 months overdue
85%
98%
65,840
14,522
55,986
14,273
Over 9 months overdue
100%
100%
92,264
39,485
92,264
39,485
1,499,382
2,224,998
276,292
467,048
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 11. Trade and other receivables (continued)
50
The Group has increased its monitoring of debt recovery as there is an increased probability of customers delaying
payment or being unable to pay, due to the COVID-19 pandemic.
Note 12. Accrued income
Group
2021
2020
$
$
Current assets
Accrued income
781,940
1,925,793
AASB 15 uses the term 'contract assets' and 'contract liabilities'. To maintain consistency in presentation with prior periods,
the Group has retained the use of 'accrued income' and 'deferred revenue', respectively.
Note 13. Inventories
Group
2021
2020
$
$
Current assets
Finished goods - at net realisable value
412,566
118,236
Note 14. Convertible notes receivable
Group
2021
2020
$
$
Current assets
Convertible notes receivable
344,638
-
Non-current assets
Convertible notes receivable
235,550
-
The current convertible note receivable from UneeQ Ltd was recorded at the principal face amount of USD$250,000 (circa
AUD$333,650) plus accrued interest of AUD$10,988 at 30 June 2021. The note bears interest at 6.00% per annum and
matures on 8 May 2022.
The non-current convertible note receivable from Forever Holdings Ltd was recorded at the principal face amount of
GBP£125,000 (circa AUD$230,257) plus accrued interest of AUD$5,293 at 30 June 2021. The note bears interest at
8.00% per annum and matures on 15 March 2024.
Note 15. Other assets
Group
2021
2020
$
$
Current assets
Prepayments
183,731
223,953
Security deposits
-
8,098
Other deposits
42,782
30,554
226,513
262,605
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
51
Note 16. Investments accounted for using the equity method
Group
2021
2020
$
$
Non-current assets
Investment in joint venture
318,833
-
On 11 November 2020, Crowd Media announced that it had entered into a 50:50 joint venture with Israeli-based VFR
Assets and Holdings Ltd to co-develop a technical platform which will enable the scalable creation of "Talking Head" digital
assets for use in conversational commerce. Crowd Media invested $318,833 in the joint venture during financial year 2021.
Interests in joint ventures are accounted for using the equity method of accounting.
Interests in joint ventures
Interests in joint ventures are accounted for using the equity method of accounting. Information relating to joint ventures
that are material to the Group are set out below:
Summarised financial information
2021
2020
$
$
Summarised statement of financial position
Current assets
-
-
Non-current assets
359,089
-
Total assets
359,089
-
Current liabilities
47,488
-
Non-current liabilities
-
-
Total liabilities
47,488
-
Net assets
311,601
-
Summarised statement of profit or loss and other comprehensive income
Revenue
-
-
Expenses
(14,464)
-
Loss before income tax
(14,464)
-
Income tax expense
-
-
Loss after income tax
(14,464)
-
Other comprehensive income
-
-
Total comprehensive income
(14,464)
-
Reconciliation of the Group's carrying amount
Opening carrying amount
-
-
Share of loss after income tax
(7,232)
-
Share of other comprehensive income
-
-
Closing carrying amount
(7,232)
-
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
52
Note 17. Other financial assets
Group
2021
2020
$
$
Non-current assets
Investment in Aflorithmic Labs Ltd
891,490
-
Investment in Forever Holdings Ltd
92,000
-
983,490
-
Reconciliation
Reconciliation of the carrying amounts at the beginning and end of the current and previous
financial year are set out below:
Opening carrying amount
-
-
Additions
983,490
-
Revaluations
-
-
Impairment of assets
-
-
Closing carrying amount
983,490
-
Aflorithmic Labs Ltd
Aflorithmic Labs Ltd is an artificial intelligence ('AI') company that has developed an application programming interface
('API') first Audio-as-a-Service platform to power the next generation of audio creation. On 27 January 2021, Crowd
announced that it would invest GBP£1 million in Aflorithmic Labs over three investment tranches. The first tranche of
GBP£500,000 (circa AUD$891,490) was completed on 30 April 2021 with the issue of 8,451,740 Crowd shares at $0.053
and the payment of GBP£250,000 in cash. The remaining two tranches will be completed in the next financial year.
Forever Holdings Ltd
Forever Holdings Ltd is a leading edge voice-and-visual Interactive Digital Media company. Their technology can enable
one-to-one digital encounters between an influencer and any follower who wants to converse with them 1:1. On 11
September 2020, Crowd invested GBP£50,000 (circa AUD$92,000) in Forever Holdings Ltd with the issue of 4,000,000
Crowd shares at $0.023. Crowd also invested GBP£125,000 in the form of a convertible note receivable from Forever
Holdings.
Note 18. Property, plant and equipment
Group
2021
2020
$
$
Non-current assets
Plant and equipment - at cost
917,430
985,153
Less: Accumulated depreciation
(765,677)
(760,683)
151,753
224,470
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 18. Property, plant and equipment (continued)
53
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Plant and
equipment
Group
$
Balance at 1 July 2019
352,892
Additions
15,090
Disposals
(3,878)
Exchange differences
2,222
Depreciation expense
(141,856)
Balance at 30 June 2020
224,470
Additions
74,069
Disposals
(7,601)
Exchange differences
8,191
Depreciation expense
(147,376)
Balance at 30 June 2021
151,753
Note 19. Right-of-use assets
Group
2021
2020
$
$
Non-current assets
Buildings - right-of-use
2,079,271
2,364,569
Less: Accumulated depreciation
(580,870)
(413,584)
1,498,401
1,950,985
The Group leases land and buildings for its offices under agreements of between two to five years with, in some cases,
options to extend. The leases have various escalation clauses. On renewal, the terms of the leases are renegotiated.
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Buildings -
right-
of-use
Group
$
Balance at 1 July 2019
-
Recognised on adoption of AASB 16
2,322,264
Exchange differences
38,420
Depreciation expense
(409,699)
Balance at 30 June 2020
1,950,985
Exchange differences
(67,867)
Depreciation expense
(384,717)
Balance at 30 June 2021
1,498,401
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 19. Right-of-use assets (continued)
54
For other lease disclosures, refer to:
●
note 7 for depreciation on right-of-use assets and interest on lease liabilities;
●
note 24 for lease liabilities at the reporting date;
●
note 30 for maturity analysis of lease liabilities; and
●
consolidated statement of cash flows for repayment of lease liabilities.
Note 20. Intangibles
Group
2021
2020
$
$
Non-current assets
Goodwill after impairment
-
317,214
Intellectual property - at cost
1,491,480
2,715,033
Less: Accumulated amortisation
(1,362,810)
(2,617,309)
128,670
97,724
Distribution network - at cost
-
13,600,158
Less: Accumulated amortisation
-
(8,191,961)
Less: Impairment
-
(5,408,197)
-
-
Software - at cost
480,894
3,328,241
Less: Accumulated amortisation
(130,455)
(991,771)
Less: Impairment
-
(2,114,833)
350,439
221,637
Databases - at cost
621,900
621,900
Less: Accumulated amortisation
(456,900)
(456,899)
Less: Impairment
(165,000)
-
-
165,001
Website and other intangibles - at cost
47,381
33,396
Less: Accumulated amortisation
(19,470)
(9,814)
27,911
23,582
507,020
825,158
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 20. Intangibles (continued)
55
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Intellectual
Distribution
Website
and other
Goodwill
property
network
Software
Databases
intangibles
Total
Group
$
$
$
$
$
$
$
Balance at 1 July 2019
317,214
98,926
-
1,055
165,001
31,798
613,994
Additions
-
-
-
242,653
-
13,266
255,919
Exchange differences
-
21
-
1,574
-
251
1,846
Amortisation expense
-
(1,223)
-
(23,645)
-
(21,733)
(46,601)
Balance at 30 June 2020
317,214
97,724
-
221,637
165,001
23,582
825,158
Additions
-
30,412
-
229,771
-
6,819
267,002
Exchange differences
-
534
-
(3,764)
(1)
7,581
4,350
Impairment of assets
(317,214)
-
-
-
(165,000)
-
(482,214)
Amortisation expense
-
-
-
(97,205)
-
(10,071)
(107,276)
Balance at 30 June 2021
-
128,670
-
350,439
-
27,911
507,020
Impairment of goodwill
Due to the sale of the Q&A division during the current financial year, the historical goodwill acquired through business
combinations is deemed not recoverable. As a result, an impairment expense of $317,214 has been recognised in the
statement of profit or loss and other comprehensive income during the year.
Note 21. Trade and other payables
Group
2021
2020
$
$
Current liabilities
Trade payables
1,099,380
1,734,562
Accrued expenses and other payables
1,142,507
1,992,839
2,241,887
3,727,401
Refer to note 30 for further information on financial instruments.
Note 22. Deferred revenue
Group
2021
2020
$
$
Current liabilities
Deferred revenue
109,229
85,062
AASB 15 uses the term 'contract assets' and 'contract liabilities'. To maintain consistency in presentation with prior periods,
the Group has retained the use of 'accrued income' and 'deferred revenue', respectively.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
56
Note 23. Borrowings
Group
2021
2020
$
$
Current liabilities
Loans payable - BillFront
-
1,671,834
Convertible notes payable - European Investments Consortium
624,743
1,233,441
624,743
2,905,275
Non-current liabilities
Convertible notes payable - European Investments Consortium (Tranche 2)
-
649,323
Refer to note 30 for further information on financial instruments.
Loans payable - BillFront
The loan was repaid in full during the year.
Convertible notes payable - European Investment Consortium
On 29 August 2019, the Company entered into an agreement with a consortium of strategic investors, the European
Investment Consortium, under which the members agreed, amongst other things, to subscribe for convertible notes with a
face value of up to $3.7 million via two tranches.
Tranche 1 of the European Investments Consortium convertible notes was executed on 19 December 2019. The Company
raised $1,741,000 (less associated fees and costs) and issued 1,741 convertible notes with a face value of AUD 1,000
each. The Tranche 1 notes are convertible into shares at a fixed price of $0.018 and matured on 25 June 2021. At maturity,
the 1,005 remaining notes were repaid in shares (545 notes) and cash (460 notes).
Under Tranche 2, the Company raised $1,080,000 (less associated fees and costs) and issued 1,080 convertible notes
with a face value of AUD 1,000 each on 31 January 2020. The Tranche 2 notes are convertible into shares at a fixed price
of $0.02 and mature on 18 December 2021. At 30 June 2021, 650 Tranche 2 notes were outstanding and 430 notes had
been converted into shares. The fair value of the conversion right of the notes is recorded as a reserve within equity.
The fair value of the conversion right of the notes is recorded as a reserve within equity.
Total secured liabilities
The total secured liabilities are as follows:
Group
2021
2020
$
$
Loans payable - BillFront
-
1,671,834
Convertible notes payable - European Investment Consortium
624,743
1,882,764
624,743
3,554,598
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
57
Note 24. Lease liabilities
Group
2021
2020
$
$
Current liabilities
Lease liability
287,234
285,433
Non-current liabilities
Lease liability
1,276,698
1,713,504
Refer to note 30 for further information on financial instruments.
Note 25. Employee benefits
Group
2021
2020
$
$
Current liabilities
Employee benefits
43,163
13,427
Note 26. Issued capital
Group
2021
2020
2021
2020
Shares
Shares
$
$
Ordinary shares - fully paid
620,030,418
384,016,015
40,052,021
31,599,781
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 26. Issued capital (continued)
58
Movements in ordinary share capital
Details
Date
Shares
Issue price
$
Balance
1 July 2019
241,265,666
28,720,072
Issue of shares on conversion of convertible notes
8 July 2019
7,981,744
$0.014
110,858
Issue of shares on conversion of convertible notes
27 August 2019
7,918,582
$0.015
115,453
Issue of shares on conversion of convertible notes
2 September 2019
4,246,139
$0.017
71,405
Issue of shares as consideration for corporate and
other advisory services
15 October 2019
8,514,488
$0.018
153,261
Issue of shares as consideration for corporate and
other advisory services
6 December 2019
576,889
$0.018
10,384
Issue of shares on conversion of convertible notes
13 December 2019
12,555,556
$0.018
226,000
Issue of shares in lieu of interest
13 December 2019
241,333
$0.025
6,126
Issue of shares as consideration for corporate and
other advisory services
30 January 2020
4,752,000
$0.020
95,040
Issue of shares on convertible note conversion
30 January 2020
277,778
$0.018
5,000
Issue of shares in lieu of interest
30 January 2020
9,002
$0.021
189
Issue of shares on convertible note conversion
27 March 2020
4,750,000
$0.020
95,000
Issue of shares in lieu of interest
27 March 2020
130,848
$0.018
2,395
Issue of shares on convertible note conversion
20 April 2020
5,555,556
$0.018
100,000
Issue of shares on convertible note conversion
20 April 2020
4,250,000
$0.020
85,000
Issue of shares in lieu of interest
20 April 2020
478,205
$0.019
8,990
Issue of shares on convertible note conversion
1 May 2020
3,611,111
$0.018
65,000
Issue of shares in lieu of interest
1 May 2020
208,205
$0.020
4,185
Issue of shares on convertible note conversion
11 June 2020
1,111,111
$0.018
20,000
Issue of shares on convertible note conversion
11 June 2020
8,000,000
$0.020
160,000
Issue of shares in lieu of interest
11 June 2020
292,808
$0.024
7,027
Issue of shares in lieu of interest
11 June 2020
78,994
$0.026
2,030
Issue of shares on capital raising
17 June 2020
5,000,000
$0.030
150,000
Issue of shares on capital raising
26 June 2020
62,210,000
$0.025
1,555,250
Less: share issue transaction costs
-
$0.000
(168,884)
Balance
30 June 2020
384,016,015
31,599,781
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 26. Issued capital (continued)
59
Details
Date
Shares
Issue price
$
Balance
1 July 2020
384,016,015
31,599,781
Issue of shares on exercise of performance rights
17 August 2020
1,476,382
$0.000
-
Issue of shares in lieu of interest
3 September 2020
59,361
$0.027
1,603
Issue of shares as part as subscription agreement
with Forever Holdings Limited
11 September 2020
4,000,000
$0.023
92,000
Issue of shares as consideration for commission and
facilitation payments
1 October 2020
430,535
$0.020
8,611
Issue of shares on conversion of convertible notes
6 November 2020
1,500,000
$0.020
30,000
Issue of shares on exercise of options
6 November 2020
80,000
$0.040
3,200
Issue of shares on exercise of options
6 November 2020
3,000,000
$0.030
90,000
Issue of shares on exercise of options
16 November 2020
12,160,223
$0.030
364,807
Issue of shares on exercise of options
16 November 2020
11,560,286
$0.040
462,411
Issue of shares on conversion of convertible notes
16 November 2020
8,333,333
$0.018
150,000
Issue of shares on exercise of options
16 November 2020
144,658
$0.037
5,425
Issue of shares on conversion of convertible notes
16 November 2020
500,000
$0.020
10,000
Issue of shares on conversion of convertible notes
16 November 2020
7,981
$0.046
367
Issue of shares as consideration for consulting fees
for investor relations services
18 November 2020
1,950,000
$0.050
97,500
Issue of shares
19 November 2020
35,479,037
$0.058
2,057,784
Issue of shares
19 November 2020
44,520,963
$0.044
1,942,215
Issue of shares on conversion of convertible notes
19 November 2020
2,500,000
$0.020
50,000
Issue of shares on exercise of options
19 November 2020
2,000,000
$0.030
60,000
Issue of shares on exercise of options
19 November 2020
74,000
$0.040
2,960
Issue of shares on exercise of options
3 December 2020
2,222,222
$0.030
66,667
Issue of shares on exercise of options
3 December 2020
610,000
$0.040
24,400
Issue of shares on exercise of options
13 January 2021
3,117,475
$0.040
124,699
Issue of shares on exercise of options
13 January 2021
9,416,667
$0.030
282,500
Issue of shares on conversion of convertible notes
13 January 2021
9,444,445
$0.018
170,000
Issue of shares on exercise of options
27 January 2021
1,271,858
$0.040
50,874
Issue of shares on exercise of options
27 January 2021
500,000
$0.030
15,000
Issue of shares on exercise of options
27 January 2021
3,000,000
$0.050
150,000
Issue of shares in lieu of interest
27 January 2021
100,221
$0.050
5,041
Issue of shares
1 February 2021
32,000,000
$0.050
1,600,000
Issue of shares
23 February 2021
1,666,667
$0.030
50,000
Issue of shares
23 February 2021
1,958,571
$0.040
78,343
Issue of shares on exercise of options
24 March 2021
500,000
$0.030
15,000
Issue of shares on exercise of options
30 April 2021
1,700,000
$0.030
51,000
Issue of shares as part of agreement with Aflorithmic
Labs Ltd
30 April 2021
8,451,740
$0.053
447,942
Issue of shares on conversion of convertible notes
28 June 2021
30,277,778
$0.018
545,000
Deregistration and sale of subsidiaries
-
$0.000
(14,536)
Less: share issue transaction costs
-
$0.000
(638,573)
Balance
30 June 2021
620,030,418
40,052,021
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the
Company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 26. Issued capital (continued)
60
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can
provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce
the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt.
The Group would look to raise capital when an opportunity to invest in a business or company was seen as value adding
relative to the current Company's share price at the time of the investment. The Group will pursue additional investments
however in the short term the focus is to integrate and grow its existing businesses in order to maximise synergies.
The Group is subject to certain financing arrangement covenants and meeting these is given priority in all capital risk
management decisions. There have been no events of default on the financing arrangements during the financial year.
The capital risk management policy remains unchanged from the 2020 Annual Report.
Note 27. Reserves
Group
2021
2020
$
$
Foreign currency reserve
422,889
307,038
Share-based payments reserve
5,515,084
5,115,887
Convertible note optionality reserve
248,674
308,261
6,186,647
5,731,186
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign
operations.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their
remuneration, and other parties as part of their compensation for services.
Convertible note optionality reserve
The reserve is used to recognise the value of the optionality component of the convertible note over the life of the facility.
Note 28. Accumulated losses
Group
2021
2020
$
$
Accumulated losses at the beginning of the financial year
(34,749,192)
(32,834,632)
Loss after income tax (expense)/benefit for the year
(6,235,508)
(1,914,560)
Cancellation of share capital of subsidiaries on deregistration of entities
(2,520)
-
Accumulated losses at the end of the financial year
(40,987,220)
(34,749,192)
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
61
Note 29. Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 30. Financial instruments
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and
interest rate risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the
Group. Due to our smaller size and less complex business and including the natural revenue and expense cash flow
hedges in the Australian and European operations, whilst we maintain an active dialogue with foreign exchange providers,
as yet the Group, to date, has not required the use of derivative financial instruments such as forward foreign exchange
contracts to hedge risk. This may change in the future as our operations and related treasury needs develop. The Group
uses different methods to measure different types of risk to which it is exposed. These methods may include sensitivity
analysis in the case of interest rate, foreign exchange and other price risks, as well as ageing analysis for credit risk.
Risk management is carried out between the CEO and key management personnel under policies approved by the Board
of Directors ('the Board'). These policies include identification and analysis of the risk exposure of the Group and
appropriate procedures, controls and risk limits. The CEO and CFO identify, evaluate and hedge financial risks within the
Group's operating units (where appropriate) and report to the Board on a monthly basis.
Market risk
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk
through foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and
cash flow forecasting.
The average exchange rates and reporting date exchange rates applied were as follows:
Average exchange rates
Reporting date exchange
rates
2021
2020
2021
2020
Australian dollars
United Kingdom Sterling
0.5547
0.5324
0.5434
0.5578
European Union Euros
0.6257
0.6068
0.6322
0.6124
United Stated Dollars
0.7470
0.6711
0.7500
0.6876
Hungarian Forint
223.6053
204.4948
222.2716
217.5790
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 30. Financial instruments (continued)
62
The carrying amount of the Group's foreign currency denominated financial assets and financial liabilities at the reporting
date were as follows:
Assets
Liabilities
2021
2020
2021
2020
Group
$
$
$
$
Australian Dollar
2,896,596
1,985,312
1,024,643
4,368,805
Euros
1,978,095
3,194,095
3,068,665
3,678,075
Pound Sterling
133,026
275,829
143,948
76,570
United States Dollar
193,014
141,812
245,906
308,018
Mexican Peso
14,590
20,139
3,261
-
Turkish Lira
112,146
98,841
13,829
21,434
South African Rand
1,703
-
237
-
Hungarian Forint
195
39,272
-
(519)
Other
94,949
309,443
93,536
1,079,868
5,424,314
6,064,743
4,594,025
9,532,251
Sensitivity analysis
AUD strengthened
AUD weakened
Group - 2021
% change
Effect on
profit before
tax
Effect on
equity
% change
Effect on
profit before
tax
Effect on
equity
United Kingdom Sterling
5%
(4,579)
(4,579)
5%
4,579
4,579
European Union Euros
5%
7,832
7,832
5%
(7,832)
(7,832)
Other currencies
5%
27,434
27,434
5%
(27,434)
(27,434)
30,687
30,687
(30,687)
(30,687)
AUD strengthened
AUD weakened
Group - 2020
% change
Effect on
profit before
tax
Effect on
equity
% change
Effect on
profit before
tax
Effect on
equity
United Kingdom Sterling
5%
55,343
55,343
5%
(55,343)
(55,343)
European Union Euros
5%
74,645
74,645
5%
(74,645)
(74,645)
Other currencies
5%
136,474
136,474
5%
(136,474)
(136,474)
266,462
266,462
(266,462)
(266,462)
The analysis above has been carried out on Management’s estimate of what is reasonably possible for changes in
exchange rates (i.e. 5%) for the financial year.
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group's main interest rate risk arises from borrowings. Borrowings issued at variable rates expose the Group to
interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The policy is to maintain
borrowings at fixed rates and to monitor fair value interest rate risk in Australia and Europe to ensure borrowings remain
competitively priced. If deemed necessary, the Group may seek to utilise interest rate swaps or re-financing to achieve this
when necessary.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 30. Financial instruments (continued)
63
As at the reporting date, the Group had the following borrowings:
2021
2020
Weighted
average
interest rate
Balance
Weighted
average
interest rate
Balance
Group
%
$
%
$
Loans payable - BillFront
-
-
11.25%
1,671,834
Convertible notes payable - European Investment Consortium
10.00%
624,743
10.00%
1,882,764
Net exposure to cash flow interest rate risk
624,743
3,554,598
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Group. To date, the significant portion of credit risk relates to the telecommunications aggregator companies from which
the Group receives its cash flows after 7 to 180 days post month end. The Group tries to ensure that it transacts with the
largest aggregator companies available in the various countries in which it conducts business and makes regular industry
reference checks and sets credit limits to mitigate credit risk. If a risk concentration is deemed too great in a particular
country then the Group seeks to utilise multiple aggregators.
The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables
through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered
representative across all customers of the Group based on recent sales experience, historical collection rates and forward-
looking information that is available. As disclosed in note 11, due to the Coronavirus (Covid-19) pandemic, the calculation
of expected credit losses and loss rates has been revised as at 30 June 2021.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include
the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual
payments for a period greater than 1 year.
The Group has no significant credit risk at 30 June 2021 or 30 June 2020.
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash
equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously
monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 30. Financial instruments (continued)
64
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the
financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
Weighted
average
interest rate
1 year or less
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Remaining
contractual
maturities
Group - 2021
%
$
$
$
$
$
Non-derivatives
Non-interest bearing
Trade payables
-
1,099,380
-
-
-
1,099,380
Accrued expenses and other
payables
-
1,142,507
-
-
-
1,142,507
Interest-bearing - variable
Lease liability
-
287,234
308,513
968,185
-
1,563,932
Interest-bearing - fixed rate
Convertible notes payable -
European Investment
Consortium
10.00%
624,743
-
-
-
624,743
Total non-derivatives
3,153,864
308,513
968,185
-
4,430,562
Weighted
average
interest rate
1 year or less
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Remaining
contractual
maturities
Group - 2020
%
$
$
$
$
$
Non-derivatives
Non-interest bearing
Trade payables
-
1,734,562
-
-
-
1,734,562
Accrued expenses and other
payables
-
1,992,839
-
-
-
1,992,839
Interest-bearing - variable
Lease liability
-
285,433
713,964
999,540
-
1,998,937
Loans payable - BillFront
11.25%
1,824,661
-
-
-
1,824,661
Interest-bearing - fixed rate
Convertible notes payable
10.00%
1,417,434
683,991
-
-
2,101,425
Total non-derivatives
7,254,929
1,397,955
999,540
-
9,652,424
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
65
Note 31. Fair value measurement
Fair value hierarchy
The following tables detail the Group's assets and liabilities, measured or disclosed at fair value, using a three level
hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
or indirectly
Level 3: Unobservable inputs for the asset or liability
Level 1
Level 2
Level 3
Total
Group - 2021
$
$
$
$
Assets
Convertible notes receivable
-
-
580,188
580,188
Total assets
-
-
580,188
580,188
Liabilities
Convertible notes payable
-
-
624,743
624,743
Total liabilities
-
-
624,743
624,743
Level 1
Level 2
Level 3
Total
Group - 2020
$
$
$
$
Liabilities
Loans payable
-
-
1,671,827
1,671,827
Convertible notes payable
-
-
1,882,764
1,882,764
Total liabilities
-
-
3,554,591
3,554,591
There were no transfers between levels during the financial year.
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair
values due to their short-term nature.
The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market
interest rate that is available for similar financial liabilities. The discount rate used is 23%.
Valuation techniques for fair value measurements categorised within level 2 and level 3
Unquoted investments have been valued using a discounted cash flow model.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 31. Fair value measurement (continued)
66
Level 3 assets and liabilities
Movements in level 3 assets and liabilities during the current and previous financial year are set out below:
Convertible loans
receivable
Loans payable
Convertible notes
payable
UneeQ Ltd
Forever
Holdings
Ltd
NTH Mobile
Limited
BillFront
Obsidian
European
Investments
Consortium
Total
$
$
$
$
$
$
$
Balance at 1 July 2019
-
-
(418,397) (2,169,032)
(556,887)
-
(3,144,316)
Additions
-
-
-
-
-
(2,523,991) (2,523,991)
Change in derivative liability
fair value
-
-
-
-
(303,902)
-
(303,902)
Repayments
-
-
418,397
492,207
563,071
-
1,473,675
Conversions
-
-
-
-
297,718
641,227
938,945
Foreign currency translation
movement
-
-
-
4,998
-
-
4,998
Balance at 30 June 2020
-
-
-
(1,671,827)
-
(1,882,764) (3,554,591)
Additions
344,638
235,550
-
-
-
-
580,188
Change in derivative liability
fair value
-
-
-
-
-
-
-
Repayments
-
-
-
1,671,827
-
460,000
2,131,827
Conversions
-
-
-
-
-
798,021
798,021
Foreign currency translation
movement
-
-
-
-
-
-
-
Balance at 30 June 2021
344,638
235,550
-
-
-
(624,743)
(44,555)
Note 32. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the Group is set out
below:
Group
2021
2020
$
$
Short-term employee benefits
1,098,958
1,274,387
Post-employment benefits
3,325
9,263
Termination benefits
-
60,281
Share-based payments
164,382
153,227
1,266,665
1,497,158
Detailed remuneration disclosures can be found in the remuneration report and equity interests in the directors' report.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
67
Note 33. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by RSM Australia Partners, the
auditor of the Company:
Group
2021
2020
$
$
Audit services - RSM Australia Partners
Audit or review of the financial statements
108,000
118,000
Note 34. Related party transactions
Parent entity
Crowd Media Holdings Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 36.
Joint ventures
Interests in joint ventures are set out in note 16.
Key management personnel
Disclosures relating to key management personnel are set out in note 32 and the remuneration report included in the
directors' report.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 34. Related party transactions (continued)
68
Transactions with related parties
The following transactions occurred with related parties:
Group
2021
2020
$
$
Payment for services:
Boardroom Pty Limited (Former Director S. Karzis is the General Manager of Corporate
Counsel Pty Ltd, a subsidiary of Boardroom) provided professional registry and corporate
secretarial services to Crowd Media Holdings Ltd. Amounts reported are until resignation as
a director by S. Karzis on 10 February 2020.
-
63,018
Compensation paid to Sophie Karzis, Former Director and legal counsel, via monies paid to
her company, Corporate Counsel Pty Ltd.
-
32,979
Wholesale Investor Pty Ltd (Director D. Carosa is a 7% shareholder) provided investor
promotions services to Crowd Media Holdings Ltd.
6,000
6,000
Mish Guru Limited (Director D. Carosa is a 0.25% shareholder) provided marketing services
to Crowd Media Holdings Limited subsidiaries.
-
5,874
Other expense/(receipt) transactions:
Dominet Digital Corporation Pty Ltd (a Carosa vendor) paid Crowd Media Holdings Ltd for
office space rented, at cost, which was partially offset by payments made to Dominet for
virtual PA services and mobile phone reimbursement, at cost.
(5,196)
(120)
Global Internet Ventures Pty Ltd (Director D. Carosa is a 15% shareholder) paid Crowd
Media Holdings Ltd for office space rented, at cost.
(118,714)
(111,010)
Kindy Now Pty Ltd (Director D. Carosa is a 7.74% shareholder) paid Crowd Media Holdings
Ltd for office space rented, at cost.
-
(20,819)
Lab Brands Ltd (Director S. Schapera is a Director and CEO) supplied products and services
to Crowd Media Holdings Ltd relating to the selling of London Labs products in the Direct-to-
Consumer division.
24,356
16,551
Invincible Brands Lifestyle Services GmbH (Director S. Schapera is a Non-Executive
Director) paid Crowd Media Holdings Ltd for marketing and selling of its products, net of the
related product and distribution expenses owed by Crowd.
(254,159)
(224,082)
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 34. Related party transactions (continued)
69
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Group
2021
2020
$
$
Current receivables:
Kindy Now Pty Ltd (Director D. Carosa is a 7.74% shareholder) paid Crowd Media Holdings
Ltd for office space rented, at cost.
-
13,585
Current payables:
Payable to Boardroom Pty Limited for professional registry and corporate secretarial
services to Crowd Media Holdings Limited
-
11,129
Dominet Digital Corporation Pty Ltd (a Carosa vendor) paid Crowd Media Holdings Ltd for
office space rented, at cost, which was partially offset by payments made to Dominet for
virtual PA services and mobile phone reimbursement, at cost.
-
832
Lab Brands Ltd (Director S. Schapera is a Director and CEO) supplied products and services
to Crowd Media Holdings Ltd relating to the selling of London Labs products in the Direct-to-
Consumer division
8,057
16,551
Invincible Brands Lifestyle Services GmbH (Director S. Schapera is a Non-Executive
Director) paid Crowd Media Holdings Ltd for marketing and selling of its products, net of the
related product and distribution expenses owed by Crowd.
46,002
12,646
Other liabilities:
Director S. Schapera held 500 Tranche 2 convertible notes issued by Crowd Media Holdings
Ltd at 30 June 2021 (refer note 23).
480,572
904,182
Director D. Carosa held 500 Tranche 2 convertible notes issued by Crowd Media Holdings
Ltd at 30 June 2021 (refer note 23).
48,057
87,746
Director R. Quandt held 185 Tranche 1 convertible notes issued by Crowd Media Holdings
Ltd at 30 June 2020.
-
172,216
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
70
Note 35. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Parent
2021
2020
$
$
Profit after income tax
8,093,478
180,323
Total comprehensive income
8,093,478
180,323
Statement of financial position
Parent
2021
2020
$
$
Total current assets
10,881,434
16,805,657
Total assets
24,427,262
33,846,192
Total current liabilities
1,017,031
23,355,463
Total liabilities
1,017,031
24,113,317
Equity
Issued capital
99,302,825
90,836,049
Foreign currency reserve
930,825
1,063,333
Share-based payments reserve
5,770,813
5,371,616
Convertible note optionality reserve
248,674
308,261
Accumulated losses
(82,842,906)
(87,846,384)
Total equity
23,410,231
9,732,875
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2021 and 30 June 2020.
Contingent liabilities
The parent entity has no contingent liabilities as at 30 June 2021 and 30 June 2020.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2021 and 30 June 2020.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2, except for the
following:
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
●
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
71
Note 36. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 2:
Ownership interest
Principal place of business /
2021
2020
Name
Country of incorporation
%
%
Bongo Operations Pty Ltd **
Australia
-
100%
Bongo IP Pty Ltd *
Australia
100%
100%
Global AQA Pty Ltd **
Australia
-
100%
Global AQA IP Pty Ltd
Australia
100%
100%
Buddy Operations Pty Ltd **
Australia
-
100%
Buddy IP Pty Ltd
Australia
100%
100%
Crowd Mobile IP Pty Ltd ***
Australia
-
100%
Crowd Media Australia Pty Ltd ***
Australia
-
100%
Bongo Europe Pty Ltd ***
Australia
-
100%
Digital Global Marketing Pty Ltd
Australia
100%
100%
Q Share Plan Pty Limited ***
Australia
-
100%
Crowd Mobile EU Kft ***
Europe
-
100%
Crowd Media (Global) UK Ltd
United Kingdom
100%
100%
Crowd Mobile Co-Operatief U.A. *
The Netherlands
100%
100%
Crowd Mobile QA Services B.V.
The Netherlands
100%
100%
Track Holdings B.V.
The Netherlands
100%
100%
Track Online B.V.
The Netherlands
100%
100%
Track Concepts B.V.
The Netherlands
100%
100%
Be Tracked Media B.V.
The Netherlands
100%
100%
Vivazz Mobile B.V.
The Netherlands
100%
100%
Track Mobile B.V.
The Netherlands
100%
100%
Immediato B.V.
The Netherlands
100%
100%
Mobilizo B.V.
The Netherlands
100%
100%
Yulara B.V.
The Netherlands
100%
100%
Crowd Mobile QA Operations B.V. **
The Netherlands
-
100%
Crowd Mobile IP B.V.
The Netherlands
100%
100%
Crowd Media B.V.
The Netherlands
100%
100%
Inala QA B.V.
The Netherlands
100%
100%
*
Bongo IP Pty Ltd owns 1% of Crowd Mobile Co-Operatief U.A.
**
Entity was divested during 2021 as part of the sale of the Q&A division
*** Dormant entity closed during 2021
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
72
Note 37. Cash flow information
Reconciliation of loss after income tax to net cash used in operating activities
Group
2021
2020
$
$
Loss after income tax (expense)/benefit for the year
(6,235,508)
(1,914,560)
Adjustments for:
Depreciation and amortisation
639,219
598,156
Impairment of non-current assets
762,637
-
Share of loss - joint ventures
7,232
-
Share-based payments
399,197
302,488
Change in derivative liability fair value
-
303,902
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
157,226
(6,313)
Decrease in accrued income
668,222
826,507
Increase in inventories
(294,330)
(118,236)
Decrease/(increase) in income tax refund due
471,974
(137,899)
Decrease/(increase) in deferred tax assets
2,244,437
(664,518)
Decrease in prepayments
40,222
17,374
Decrease/(increase) in other operating assets
(592,416)
36,445
Increase/(decrease) in trade and other payables
714,866
(366,011)
Increase/(decrease) in deferred revenue
24,167
(91,283)
Decrease in derivative liabilities
-
(152,467)
Increase/(decrease) in employee benefits
29,736
(32,671)
Decrease in other provisions
(141,779)
(398,058)
Decrease in other operating liabilities
(57,373)
-
Net cash used in operating activities
(1,162,271)
(1,797,144)
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 37. Cash flow information (continued)
73
Changes in liabilities arising from financing activities
Loans payable
Convertible notes payable
NTH Mobile
Limited
BillFront
Obsidian
European
Investment
Consortium
Lease
liabilities
Total
Group
$
$
$
$
$
$
Balance at 1 July 2019
418,397
2,169,032
556,887
-
-
3,144,316
Net cash from/(used in)
financing activities
(418,397)
(497,198)
(563,071)
2,821,000
(323,327)
1,019,007
Leases recognised on adoption
of AASB 16 (note 2)
-
-
-
-
2,322,264
2,322,264
Conversions
-
-
(297,718)
(641,227)
-
(938,945)
Change in derivative liability fair
value
-
-
303,902
-
-
303,902
Conversion option recorded in
equity
-
-
-
(297,009)
-
(297,009)
Balance at 30 June 2020
-
1,671,834
-
1,882,764
1,998,937
5,553,535
Net cash used in financing
activities
-
(1,647,416)
-
(460,000)
(435,005)
(2,542,421)
Conversions
-
-
-
(798,021)
-
(798,021)
Exchange differences
-
(24,418)
-
-
-
(24,418)
Balance at 30 June 2021
-
-
-
624,743
1,563,932
2,188,675
Note 38. Earnings per share
Group
2021
2020
$
$
Earnings per share for loss from continuing operations
Loss after income tax attributable to the owners of Crowd Media Holdings Limited
(4,489,516)
(873,298)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
495,709,555
280,020,911
Weighted average number of ordinary shares used in calculating diluted earnings per share
495,709,555
280,020,911
Cents
Cents
Basic earnings per share
(0.91)
(0.31)
Diluted earnings per share
(0.91)
(0.31)
Group
2021
2020
$
$
Earnings per share for loss from discontinued operations
Loss after income tax attributable to the owners of Crowd Media Holdings Limited
(1,745,992)
(1,041,262)
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 38. Earnings per share (continued)
74
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
495,709,555
280,020,911
Weighted average number of ordinary shares used in calculating diluted earnings per share
495,709,555
280,020,911
Cents
Cents
Basic earnings per share
(0.35)
(0.37)
Diluted earnings per share
(0.35)
(0.37)
Group
2021
2020
$
$
Earnings per share for loss
Loss after income tax attributable to the owners of Crowd Media Holdings Limited
(6,235,508)
(1,914,560)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
495,709,555
280,020,911
Weighted average number of ordinary shares used in calculating diluted earnings per share
495,709,555
280,020,911
Cents
Cents
Basic earnings per share
(1.26)
(0.68)
Diluted earnings per share
(1.26)
(0.68)
Options and performance rights have been excluded from the above calculation in the current and previous year as their
inclusion would be anti-dilutive.
Note 39. Share-based payments
Options
Debt refinancing plan options
As part of the debt refinancing plan in the year ended 30 June 2019, 2,000,000 options were issued to entities associated
with JGB (Cayman) Newton Ltd ('JGB').
Consultant options
At the 2019 Annual General Meeting, shareholders approved the grant of 8,514,488 options to Starland Management Pty
Ltd, and on 30 January 2020 a further 4,752,000 options were granted, in consideration for corporate advisory and
consulting services provided by Starland Management Pty Ltd. On 1 October 2020, 7,500,000 options were granted to
Perpetual Capital Investments Pty Ltd in consideration for corporate advisory and consulting services provided by
Perpetual Capital Management Pty Ltd.
Investor Relations consultant options
At the 2019 Annual General Meeting, shareholders approved the grant of 10,000,000 Investor Relations consultant options
in consideration for investor relations services provided by its investor relations consultant, DGWA, the German Institute for
Asset and Equity Allocation and Valuation 'Deutsche Gesellschaft für Wertpapieranalyse GmbH'.
Executive Share Options Plan ('ESOP')
The ESOP established by the Group and approved by shareholders at a general meeting, granted 26,000,000 options over
ordinary shares in the Company to certain key management personnel (and Directors) of the Group. The options were
granted in accordance with performance guidelines established by the Board.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 39. Share-based payments (continued)
75
Set out below are summaries of options granted:
2021
Balance at
Expired/
Balance at
Exercise
the start of
forfeited/
the end of
Grant date
Expiry date
price
the year
Granted
Exercised
other
the year
02/04/2019
02/04/2022
$0.050
2,000,000
-
-
-
2,000,000
06/12/2019
06/12/2021
$0.030
576,889
-
(576,889)
-
-
06/12/2019
06/12/2021
$0.030
8,514,488
-
-
-
8,514,488
06/12/2019
06/12/2021
$0.050
5,000,000
-
(3,000,000)
-
2,000,000
06/12/2019
06/12/2021
$0.100
5,000,000
-
-
-
5,000,000
13/12/2019
13/12/2022
$0.030
11,700,000
-
(1,700,000)
-
10,000,000
13/12/2019
13/12/2022
$0.050
5,850,000
-
-
-
5,850,000
13/12/2019
13/12/2022
$0.070
5,850,000
-
-
-
5,850,000
30/01/2020
31/12/2023
$0.030
4,752,000
-
-
-
4,752,000
01/10/2020
30/09/2023
$0.030
-
7,500,000
-
-
7,500,000
49,243,377
7,500,000
(5,276,889)
-
51,466,488
2020
Balance at
Expired/
Balance at
Exercise
the start of
forfeited/
the end of
Grant date
Expiry date
price
the year
Granted
Exercised
other
the year
02/04/2019
02/04/2022
$0.050
2,000,000
-
-
-
2,000,000
06/12/2019
06/12/2021
$0.030
-
576,889
-
-
576,889
06/12/2019
06/12/2021
$0.030
-
8,514,488
-
-
8,514,488
06/12/2019
06/12/2021
$0.050
-
5,000,000
-
-
5,000,000
06/12/2019
06/12/2021
$0.100
-
5,000,000
-
-
5,000,000
13/12/2019
13/12/2022
$0.030
-
13,000,000
-
(1,300,000)
11,700,000
13/12/2019
13/12/2022
$0.050
-
6,500,000
-
(650,000)
5,850,000
13/12/2019
13/12/2022
$0.070
-
6,500,000
-
(650,000)
5,850,000
30/01/2020
31/12/2023
$0.030
-
4,752,000
-
-
4,752,000
2,000,000
49,843,377
-
(2,600,000)
49,243,377
Performance rights
On 17 December 2014, shareholders approved a Performance Rights Plan ('PR Plan'). Under the PR Plan, selected
employees and Directors may be granted performance rights ('PRs') which will entitle them to receive ordinary shares in
the Company, subject to the Company meeting performance objectives.
On 31 July 2019, the Company agreed to issue 11,000,000 PRs to employees, excluding the directors and CEO. On 18
December 2019, the Board approved to modify the conditions of the performance rights as follows:
●
1-year performance rights: 20% of the performance rights (2,200,000) will be issued to employees that have been
continuously employed by Crowd as of the vesting date of 30 June 2020. For employees that met the vesting
conditions, the 1-year performance rights were exercised in August 2020.
●
2-year performance rights: 30% of the performance rights (3,300,000) will be issued to employees that have been
continuously employed by Crowd as of the vesting date of 30 June 2021. For employees that met the vesting
conditions, the 1-year performance rights were exercised in August 2021.
●
3-year performance rights: 50% of the performance rights (5,500,000) will be issued to employees that have been
continuously employed by Crowd as of the vesting date of 30 June 2022.
●
Any extenuating circumstances regarding continuous employment are subject to Board approval.
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
Note 39. Share-based payments (continued)
76
On 5 November 2020, the Company agreed to issue 4,500,000 PRs to employees, excluding the directors and CEO. The
conditions of the performance rights are as follows:
●
1-year performance rights: 20% of the performance rights (900,000) will be issued to employees that have been
continuously employed by Crowd as of the vesting date of 30 June 2021. For employees that met the vesting
conditions, the 1-year performance rights were exercised in August 2021.
●
2-year performance rights: 30% of the performance rights (1,350,000) will be issued to employees that have been
continuously employed by Crowd as of the vesting date of 30 June 2022.
●
3-year performance rights: 50% of the performance rights (2,250,000) will be issued to employees that have been
continuously employed by Crowd as of the vesting date of 30 June 2023.
●
Any extenuating circumstances regarding continuous employment are subject to Board approval.
Set out below are summaries of performance rights granted:
2021
Balance at
Expired/
Balance at
the start of
forfeited/
the end of
Grant date
Expiry date
the year
Granted
Exercised
other
the year
18/12/2019
30/06/2020
2,200,000
-
(2,200,000)
-
-
18/12/2019
30/06/2021
3,300,000
-
-
-
3,300,000
18/12/2019
30/06/2022
5,500,000
-
-
-
5,500,000
05/11/2020
30/06/2021
-
900,000
-
-
900,000
05/11/2020
30/06/2022
-
1,350,000
-
-
1,350,000
05/11/2020
30/06/2023
-
2,250,000
-
-
2,250,000
11,000,000
4,500,000
(2,200,000)
-
13,300,000
2020
Balance at
Expired/
Balance at
the start of
forfeited/
the end of
Grant date
Expiry date
the year
Granted
Exercised
other
the year
18/12/2019
30/06/2020
-
2,200,000
-
-
2,200,000
18/12/2019
30/06/2021
-
3,300,000
-
-
3,300,000
18/12/2019
30/06/2022
-
5,500,000
-
-
5,500,000
-
11,000,000
-
-
11,000,000
Valuation model inputs
For the options granted during the current financial year, the valuation model inputs used to determine the fair value at the
grant date, are as follows:
Share price
Exercise
Expected
Dividend
Risk-free
Fair value
Grant date
Expiry date
at grant date
price
volatility
yield
interest rate
at grant date
01/10/2020
30/09/2023
$0.025
$0.030
94.00%
-
1.04%
$0.0138
For the performance rights granted during the current financial year, the valuation model inputs used to determine the fair
value at the grant date, are as follows:
Share price
Expected
Dividend
Risk-free
Fair value
Grant date
Expiry date
at grant date
volatility
yield
interest rate
at grant date
05/11/2020
30/06/2021
$0.040
-
-
-
$0.0400
05/11/2020
30/06/2022
$0.040
-
-
-
$0.0400
05/11/2020
30/06/2023
$0.040
-
-
-
$0.0400
Crowd Media Holdings Limited
Notes to the consolidated financial statements
30 June 2021
77
Note 40. Events after the reporting period
On 16 August 2021, the Company announced the appointment of Mr Idan Schmorak as Chief Executive Officer of the
Company with effect from 20 September 2021. Idan currently serves as the Director of Business Development at VFR
Holdings, an Israeli-based start-up incubator and investment firm. In this position, he has been tasked with driving growth
in products and services, increasing sales revenue and leading the marketing function across a number of company-owned
ventures, including leading the “Talking Head” team as part of the VFR joint venture with Crowd Media.
On 13 August 2021, the Company issued 2,003,065 fully paid ordinary shares on conversion of performance rights and
200,765 fully paid ordinary shares in lieu of interest paid on the Tranche 2 convertible notes.
No other matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect
the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Crowd Media Holdings Limited
Directors' declaration
30 June 2021
78
In the directors' opinion:
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
●
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 2 to the financial statements;
●
the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June
2021 and of its performance for the financial year ended on that date; and
●
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Steven Schapera
Chairman
27 August 2021
Melbourne
79
INDEPENDENT AUDITOR’S REPORT
To the Members of Crowd Media Holdings Limited
Opinion
We have audited the financial report of Crowd Media Holdings Limited (the Company) and its subsidiaries (the
Group), which comprises the statement of financial position as at 30 June 2021, the statement of profit or loss
and other comprehensive income, the statement of changes in equity and the statement of cash flows for the year
then ended, and notes to the financial statements, including a summary of significant accounting policies, and the
directors' declaration. In our opinion the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
(i)
giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial
performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
80
Key Audit Matters (continued)
Key Audit Matter
How our audit addressed this matter
Recognition of Revenue and Accrued Revenue
Refer to Note 5 in the financial statements
The Group’s revenue relates to the sale of
information and entertainment content services for
mobile phones and tablets, and direct to consumer
product sales and/or services.
Total revenue (continued operations) for the year
ended 30 June 2021 was $7m and accrued revenue
of $0.8m, which is material to the financial
statements. We have considered the recognition of
revenue due to its size and magnitude in the
financial statements.
The nature and timing of recognition of accrued
revenue
at
year-end
involves
management
judgement and is complex.
We have considered the recognition of revenue and
the associated accrued revenue as a key audit
matter because of the reasons above.
Our key audit procedures in relation to the recognition
of revenue included:
•
Obtaining a detailed understanding of the
processes and internal controls associated with
the capture and recording of revenue;
•
Assessing
whether
the
Group’s
revenue
recognition policies were in compliance with
AASB
15
Revenue
from
Contracts
with
Customers;
•
On a sample basis, vouching to supporting
contracts and third-party reports of sales data to
revenue recognised;
•
Comparing accrued revenue to subsequent third-
party reports and funds receipted; and
•
Checking the accuracy of valuation of foreign
currency transactions recorded.
AASB 9 – Expected Credit Loss
Refer to Note 11 in the financial statements
As at 30 June 2021, gross trade receivables
amounted to $1.5m (2020: $2.2m), and the
allowance for impairment of accounts receivables
amounted to $0.3m (2020: $0.5m).
The Group's management has applied a simplified
ECL model to determine the allowance for
impairment of trade receivables. The ECL model
involves the use of various assumptions, macro-
economic factors and study of historical trends
relating to the Group's history of a collection of
trade receivables.
We considered this a key audit matter as the ECL
is highly subjective and requires management to
make significant judgements, assumptions and
estimates involved in the application of the
expected credit loss model.
Our audit procedures included the following:
•
Assessing the valuation methodology used;
•
Verifying whether the ECL model developed by
management is consistent with the requirements
of AASB 9;
•
Testing the accuracy and completeness of
underlying data used in the model and the
mathematical accuracy of the computation of
ECL;
• Testing key assumptions and judgments, such as
those used to calculate the likelihood of default
and loss on default by comparing to historical
data, as well as the appropriateness of forward-
looking factors (macroeconomic factors) used to
determine ECL’s; and
• Assessing whether the disclosures in the
financial statements are adequate.
81
Key Audit Matters (continued)
Key Audit Matter
How our audit addressed this matter
Discontinued Operations
Refer to Note 9 in the financial statements
During the financial year, the Group sold its Mobile
Premium SMS (Q&A) business for a nominal
amount.
Losses for the period from discontinued operations
of $1.8m (2020: $1m) have been separately
disclosed on the face of the statement of profit or
loss and other comprehensive income in the current
year and prior year results.
We considered this to be a key audit matter due to
the:
•
Quantum
of
loss
from
discontinued
operations
that
directly
impact
the
consolidated statement of profit or loss and
other comprehensive income; and
•
Judgement involved in considering whether
assets are impaired.
Our key audit procedures in relation to the recognition
of revenue included:
•
Reviewing
the
share
sale
agreement
to
understand
the
transaction
including
the
consideration
received
and
the
related
accounting considerations;
•
Assessing the adequacy of any impairment
raised and ensuring that it was accurately
accounted for; and
•
Evaluating the adequacy of the financial
statements disclosures is in accordance with the
accounting standards.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2021 but does not include the financial report and the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
82
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: www.auasb.gov.au/admin/file/content102/c3/ar2_2020.pdf. This
description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors' report for the year ended 30 June 2021.
In our opinion, the Remuneration Report of Crowd Media Holdings Limited, for the year ended 30 June 2021,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
M PARAMESWARAN
Partner
Dated: 27 August 2021
Melbourne, Victoria
Crowd Media Holdings Limited
Shareholder information
30 June 2021
83
In accordance with ASX Listing Rule 4.10, the Company provides the following information to shareholders not elsewhere
disclosed in this Annual Report. The information provided is current as at 17 August 2021 ('Reporting Date').
Corporate Governance Statement
The Company’s Directors and management are committed to conducting the Group’s business in an ethical manner and in
accordance with the highest standards of corporate governance. The Company has adopted and substantially complies
with the ASX Corporate Governance Principles and Recommendations (Fourth Edition) ('Recommendations') to the extent
appropriate to the size and nature of the Group’s operations.
The Company has prepared a statement which sets out the corporate governance practices that were in operation
throughout the financial year for the Company, identifies any Recommendations that have not been followed, and provides
reasons for not following such Recommendations ('Corporate Governance Statement').
In accordance with ASX Listing Rules 4.10.3 and 4.7.4, the Corporate Governance Statement will be available for review
on Crowd Media’s website, https://investor.crowdmobile.com/corporate_governance.html#investor (Website), and will be
lodged together with an Appendix 4G with ASX at the same time that this Annual Report is lodged with ASX.
The Appendix 4G will particularise each Recommendation that needs to be reported against by Crowd Mobile and will
provide shareholders with information as to where relevant governance disclosures can be found.
The Company’s corporate governance policies and charters are all available on Crowd Media Holdings Limited’s Website.
Substantial shareholders
Number held
Percentage of
total shares
on issue
No.
%
CAROSA CORPORATION BV
32,330,653
5.20%
Distribution of equity securities
As at the Reporting Date, the number of holders in each class of equity securities:
Number of
holders
No.
Fully paid ordinary shares
2,332
Options exercisable at $0.03 each on or before 6 December 2021
1
Options exercisable at $0.03 each on or before 31 December 2021
14
Options exercisable at $0.03 each on or before 13 December 2022
3
Options exercisable at $0.03 each on or before 31 December 2023
9
Options exercisable at $0.03 each on or before 30 September 2023
1
Options exercisable at $0.05 each on or before 6 December 2021
1
Options exercisable at $0.04 each on or before 11 September 2022
36
Options exercisable at $0.05 each on or before 13 December 2022
3
Options exercisable at $0.07 each on or before 13 December 2022
3
Options exercisable at $0.10 each on or before 25 March 2023
156
Options exercisable at $0.10 each on or before 6 December 2021
1
Convertible notes – Tranche 2 maturing on 18 December 2021
3
Performance rights vesting on 30 June 2022
16
Performance rights vesting on 30 June 2023
3
Crowd Media Holdings Limited
Shareholder information
30 June 2021
84
Distribution of ordinary shareholders
Percentage of
Holders
Total units
total shares
No.
No.
%
Holdings ranges:
1 to 1,000
93
7,483
-
1,001 to 5,000
69
233,178
0.040
5,001 to 10,000
267
2,393,367
0.380
10,001 to 100,000
1,261
53,456,594
8.590
100,001 and over
642
566,143,625
90.990
2,332
622,234,247
100.000
Distribution of option holders
Percentage of
Holders
Total options
total options
No.
No.
No.
Holdings ranges:
1 to 1,000
1
286
-
1,001 to 5,000
2
9,676
0.005
5,001 to 10,000
4
29,997
0.015
10,001 to 100,000
87
5,034,544
2.573
100,001 and over
135
190,602,573
97.407
229
195,677,076
100.000
Distribution of convertible notes
Holders of
convertible
notes
No.
Holdings ranges:
1 to 1,000
3
1,001 to 5,000
-
5,001 to 10,000
-
10,001 to 100,000
-
100,001 and over
-
3
Less than marketable parcels of ordinary shares ('UMP Shares')
The number of holders of less than a marketable parcel of ordinary shares based on the closing market price at the
Reporting Date is as follows:
Total shares
UMP shares
UMP holders
Percentage of issued shares
held by UMP holders
No.
No.
No.
%
622,234,247
6,136,472
679
0.98
Crowd Media Holdings Limited
Shareholder information
30 June 2021
85
Quoted securities
Twenty largest quoted equity security holders
The Company only has one class of quoted securities, being ordinary shares. The names of the 20 largest holders of
ordinary shares, and the number of ordinary shares and percentage of capital held by each holder is as follows:
Ordinary shares
% of total
shares
Number held
issued
CAROSA CORPORATION BV
32,330,653
5.196
BNP PARIBAS NOMINEES PTY LTD (IB AU NOMS RETAILCLIENT DRP)
22,099,197
3.552
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD (DRP A/C)
20,896,700
3.358
D S A H HOLDINGS PTY LTD
18,484,045
2.971
818 CORPORATE PTY LTD (818 A/C)
16,250,000
2.612
MR ROGER BLAKE & MRS ERICA LYNETTE BLAKE (THE MANDY SUPER FUND A/C)
12,500,000
2.009
10 BOLIVIANOS PTY LTD
10,444,654
1.679
NATIONAL NOMINEES LIMITED (DB A/C)
10,277,778
1.652
MR RENE RATH
8,792,570
1.413
MR HENDRIKUS ANTONIUS JOHANNES KUSTERS
8,792,570
1.413
AFLORITHMIC LABS LTD
8,451,740
1.358
MAESTRO CAPITAL PTY LTD (MAESTRO CAPITAL SUPER A/C)
8,283,313
1.331
MR DIMCE NASTOVSKI (BRANDON NASTOVSKI A/C)
8,097,005
1.301
MR NICOLA LUCANO
7,799,989
1.254
MR NOEL RUSSELL CAMERON & DR BELINDA CAROLINE GOAD (NOEL CAMERON
SUPER FUND A/C)
6,841,176
1.099
DRISCOLL FUTURE PTY LTD (DRISCOLL SUPER FUND A/C)
6,603,400
1.061
PERPETUAL CAPITAL INVESTMENTS PTY LTD
6,542,188
1.051
MR ROBERT GEMELLI
6,461,039
1.038
MUTUAL TRUST PTY LTD
5,807,598
0.933
CITICORP NOMINEES PTY LIMITED
5,500,504
0.884
231,256,119
37.165
Total remaining holders balance
390,978,128
62.835
Crowd Media Holdings Limited
Shareholder information
30 June 2021
86
Unquoted equity securities
The number of each class of unquoted equity securities on issue, and the number of their holders, are as follows:
Number of
unquoted
equity
Number
Class of equity securities
securities
of holders
Options exercisable at $0.03 each on or before 6 December 2021
8,514,488
1
Options exercisable at $0.03 each on or before 31 December 2021
49,277,778
14
Options exercisable at $0.03 each on or before 13 December 2022
10,000,000
3
Options exercisable at $0.03 each on or before 30 September 2023
7,500,000
1
Options exercisable at $0.03 each on or before 31 December 2023
17,252,000
9
Options exercisable at $0.04 each on or before 11 September 2022
12,432,810
36
Options exercisable at $0.05 each on or before 6 December 2021
2,000,000
1
Options exercisable at $0.05 each on or before 2 April 2022
2,000,000
1
Options exercisable at $0.05 each on or before 13 December 2022
5,850,000
3
Options exercisable at $0.07 each on or before 13 December 2022
5,850,000
3
Options exercisable at $0.07 each on or before 25 March 2023
70,000,000
156
Options exercisable at $0.10 each on or before 6 December 2021
5,000,000
1
Convertible notes – Tranche 2 maturing on 18 December 2021
650
3
Performance rights vesting on 30 June 2021
4,200,000
13
Performance rights vesting on 30 June 2022
6,850,000
10
Performance rights vesting on 30 June 2023
2,250,000
3
Except as listed below, no persons hold 20% or more of the equity securities in any unquoted class that were not issued or
acquired under an employee incentive scheme.
●
Options exercisable at $0.03 each on or before 6 December 2021: 8,514,488 are held by 818 Corporate Pty Ltd.
●
Options exercisable at $0.03 each on or before 31 December 2021: 20,000,000 are held by Namaqua Holdings Ltd
and 10,277,778 are held by JCL Investments GMBH.
●
Options exercisable at $0.03 each on or before 13 December 2022: 4,550,000 are held by JCL Investments GMBH
and 4,550,000 are held by Namaqua Holdings Ltd.
●
Options exercisable at $0.03 each on or before 30 September 2023: 7,500,000 are held by Perpetual Capital
Investments Pty Ltd.
●
Options exercisable at $0.03 each on or before 31 December 2023: 7,500,000 are held by 818 Corporate Pty Ltd and
4,752,000 are held by Starland Management Pty Ltd.
●
Options exercisable at $0.05 each on or before 6 December 2021: 2,000,000 are held by Stefan Muller.
●
Options exercisable at $0.05 each on or before 2 April 2022: 1,136,541 are held by JGB Partners LP; 746,162 are
held by JGB Capital Offshore Ltd.
●
Options exercisable at $0.05 each on or before 13 December 2022: 2,275,000 are held by JCL Investments GMBH;
2,275,000 are held by Namaqua Holdings Ltd; and 1,300,000 are held by Dominet Digital Investments Pty Ltd
(Dominet Digital Inves Fam AC).
●
Options exercisable at $0.07 each on or before 13 December 2022: 2,275,000 are held by JCL Investments GMBH;
2,275,000 are held by Namaqua Holdings Ltd; and 1,300,000 are held by Dominet Digital Investments Pty Ltd
(Dominet Digital Inves Fam AC).
●
Options exercisable at $0.10 each on or before 6 December 2021: 5,000,000 are held by Stefan Muller.
●
Convertible notes – Tranche 2 maturing on 18 December 2021: 500 notes are held by Namaqua Holdings Ltd.
Voting rights
The only class of equity securities on issue in the Company which carry voting rights is ordinary shares.
At a general meeting of the Company, every holder of ordinary shares is entitled to vote in person or by proxy or attorney;
and on a show of hands every person present who is a member has one vote, and on a poll every person present in
person or by proxy or attorney has one vote for each ordinary share he holds.
Voluntary escrow
There are 1,950,000 shares on issue in the Company that are subject to voluntary escrow.
Crowd Media Holdings Limited
Shareholder information
30 June 2021
87
Stock Exchange Listings
The Company’s ordinary shares are quoted on the Australian Securities Exchange ('ASX') (ASX issuer code: CM8) and on
the Frankfurt Stock Exchange (European stock code: CM3).
Buybacks
No securities were purchased on-market during the reporting period under or for the purposes of an employee incentive
scheme or to satisfy the entitlements of the holders of options or other rights to acquire securities granted under an
employee incentive scheme.
The Company is not currently conducting an on-market buy-back.
Item 7 issues of securities
There are no issues of securities approved for the purposes of item 7 of section 611 of the Corporations Act which have
not yet been completed.
Company secretary
The Company’s secretary is Scott Mison.
Registered office
The address and telephone number of the Company’s registered office are:
202/37 Barrack Street
Perth WA 6000
Telephone: +61 3 9020 1468
Share registry
The address and telephone number of the Company’s share registry, Boardroom Pty Limited, are:
Street Address:
Level 12
225 George Street
SYDNEY NSW 2000
Telephone: +61 2 9290 9600
www.crowdmedia.com