ICANDY INTERACTIVE LIMITED
AND CONTROLLED ENTITIES
ABN: 87 604 871 712
Financial Report For The Year Ended
31 December 2018
For personal use only ICANDY INTERACTIVE LIMITED
AND CONTROLLED ENTITIES
ABN: 87 604 871 712
Financial Report For The Year Ended
31 December 2018
CONTENTS
Corporate Governance Statement
Directors' Report
Auditor's Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors' Declaration
Independent Auditor's Report
Additional Information for Listed Public Companies
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For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
CORPORATE GOVERNANCE STATEMENT
iCandy Interactive Limited is listed on the Australian Securities Exchange (ASX). Accordingly, unless stated otherwise in this
document, the Board's corporate governance arrangements comply with the recommendations of the ASX Corporate Governance
Council as well as current standards of best practice. The corporate governance statement is current as at the date of this report
and has been approved by the board.
Our approach to corporate governance
(a) Framework and approach to corporate governance and responsibility
The Board of iCandy Interactive Limited ("the Company") is committed to maintaining the highest standards of corporate
governance.
Corporate governance is about having a set of values that underpin the company's everyday activities - values that
ensure fair dealing, transparency of actions, and protect the interests of stakeholders. The Board considers corporate
governance forms part of a broader framework of corporate responsibility and regulatory oversight.
In pursuing the commitment to best practice governance standards, the Board will continue to:
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renew and improve its governance practices; and
monitor global developments in best practice corporate governance.
The Board's approach has been guided by the principles and practices that are in our stakeholders' best interests while
enduring full compliance with legal requirements.
(b) Compliance with the ASX Corporate Governance Principles and Recommendations
The ASX Listing Rules require listed companies to include in their Annual Report a statement disclosing the extent to
which they have followed the ASX Corporate Governance Principles and Recommendations in the reporting period.
Listed companies must identify the recommendations that have not been followed and provide reasons for the company's
decision and this can be found on pages 7 to 11.
Date of this statement
This statement reflects our corporate governance policies and procedures as at 31 December 2018.
The Board of Directors
(a)
Membership and expertise of the Board
The Board has a broad range of relevant financial and other skills, experience and expertise to meet its objectives. The current
Board composition, with details of individual Director's backgrounds, is set out in the Directors Report which is included in this
Annual Report.
(b)
Board role and responsibility
The Board is accountable to shareholders for iCandy Interactive Limited's performance. In summary, the Board's
responsibilities include:
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providing strategic direction and approving corporate strategic initiatives;
planning for Board and executive succession;
selecting and evaluating future Directors, the Chief Executive Officer ("CEO")
approving budget and monitoring management and financial performance;
considering and approving the Annual Financial Report (including the Directors' Declaration) and the interim financial
statements;
approving iCandy Interactive Limited's risk management strategy, monitoring its effectiveness and maintaining a director
and ongoing dialogue with iCandy Interactive Limited's auditors and regulators; and
considering and reviewing the social and ethical impact of iCandy Interactive Limited's activities, setting standards for
social and ethical practices and monitoring compliance with iCandy Interactive Limited's social responsibility policies and
practices.
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CORPORATE GOVERNANCE STATEMENT
The Board would normally delegate to management responsibility for:
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developing and implementing corporate strategies and making recommendations on significant corporate strategic
initiatives;
maintaining an effective risk management framework and keeping the Board and market fully informed about material
risks;
developing iCandy Interactive Limited's annual budget, recommending it to the Board for approval and managing day-to-
day operations within budget; and
managing day-to-day operations in accordance with standards for social and ethical practices which have been set by the
Board.
The current circumstances, however, require all these functions to be exercised by the Board members or the Company
Secretary. The company does not currently have a performance evaluation method due to the current size and limited nature
of its operations.
The company has adopted a Board Charter which sets out the specific responsibilities of the Board, the requirements as to the
Board's composition, the roles and responsibilities of the Chairman, Company Secretary and management, the establishment,
operations and management of Board Committees, Directors' access to Company records and information, details of the
Board's relationship with management, details of the Board's performance review and details of the Board's disclosure policy.
A copy of the Company's Board Charter is contained in the Company's Corporate Governance Plan which is available on the
Company's website.
(c)
Board size and composition
The Board determines its size and composition, subject to the limits imposed by iCandy Interactive Limited's Constitution. The
Constitution requires a minimum of three and a maximum of twenty Directors. In addition, at least two of the Directors shall
ordinarily reside within Australia. Currently, the Board consists of five directors. The Board supports the principles of diversity;
however, due to the size and scale of the company's operations, it has no female representative on the board at the present
time.
Election of the Board members is substantially the province of the Shareholders in general meetings.
(d)
The selection and role of the Chairman
The Chairman is selected by the Board from the non-executive Directors. The Chairman's role includes:
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providing effective leadership on formulating the Board's strategy;
representing the views of the Board to the public;
ensuring that, when all Board members take office, they are fully briefed on the terms of their appointment, their duties
and responsibilities;
ensuring that the Board meets at regular intervals throughout the year, and that minutes of meetings accurately record
decisions taken and, where appropriate, the view of individual Directors;
guiding the agenda and conduct of all Board meetings; and
reviewing the performance of the Board of Directors.
The Board Charter provides that where practical, the Chairman of the Board will be a non-executive director. The Chairman,
Kin Wai Lau is a non-executive director but is not considered by the Board to be independent.
(e)
Directors' Independence
The Board assesses each of the Directors against specific criteria to decide whether they are in a position to exercise
independent judgement. Directors are considered to be independent if they are independent of management and free from any
business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with,
the exercise of their unfettered and independent judgement. Materiality is assessed on a case-by-case basis by reference to
each Directors' individual circumstances rather than general materiality thresholds. In assessing independence, the Board
considers whether the Director has a business or other relationship with iCandy Interactive Limited, either directly, or as a
partner, shareholder or officer of a company or other Company that has an interest, or a business or other relationship, with
iCandy Interactive Limited or another iCandy Interactive Limited group member. Presently, the Company's independent
directors are Robert Kolodziej, Marcus Ungar and Masahiko Honma. The Company may seek to appoint additional
independent Directors in the future to address the lack of independence of its Directors.
(f)
Avoidance of conflicts of interest by a Director
In accordance with the Corporations Act 2001, any Director with a material personal interest in a matter being considered by
the Board must not be present when the matter is being considered and may not vote on the matter.
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CORPORATE GOVERNANCE STATEMENT
(g)
Meetings of the Board and their conduct
Meetings of the Board happen when and as appropriate. Details of Board meetings held and attended are tabled in the
Directors' Report, which forms part of this Annual Report.
(h)
Succession planning
The Board plans succession of its own members taking into account the skills, experience and expertise required and currently
represented, and iCandy Interactive Limited's future direction. The Board is also responsible for CEO succession planning.
(i)
Review of Board performance
The Board of iCandy Interactive Limited is responsible for evaluating the performance of the Board and individual Directors will
be evaluated on an annual basis, with the aid of an independent advisory, if deemed required. The process for this can be
found in Schedule 6 of the Company's Corporate Governance Plan.
The Company's Corporate Governance Plan requires the Board to disclose whether or not performance evaluations were
conducted during the relevant reporting period. Details of the performance evaluations conducted will be provided in the
Company's Annual Reports.
(j)
Nomination and appointment of new Directors
iCandy Interactive Limited has detailed guidelines for the appointment and selection of the Board. The Company's Corporate
Governance Plan requires the Board to undertake appropriate checks before appointing a person, or putting forward to security
holders a candidate for election, as a Director.
All material information relevant to a decision on whether or not to elect or re-elect a Director will be provided to security
holders in a Notice of Meeting pursuant to which the resolution to elect or re-elect such Director will be voted on.
(k)
Retirement and re-election of Directors
iCandy Interactive Limited's Constitution states that one-third of our Directors must retire each year. The maximum time that
each Director can serve in any single term is three years. Any Director who has been appointed during the year must retire at
the next annual general meeting. Eligible Directors who retire each year may offer themselves for re-election by shareholders
at the next annual general meeting.
(l)
Compulsory retirement of Directors
The Board has no limit on the number of terms of office which any Director may serve.
(m)
Board access to information and advice
All Directors have unrestricted access to company records and information and receive regular detailed financial and
operational report. The Company Secretary provides Directors with ongoing guidance on issues such as corporate
governance, iCandy Interactive Limited's Constitution and the law. The Board collectively, and each Director individually has
the right to seek independent professional advice at iCandy Interactive Limited's expense to help them carry out their
responsibilities. Which the Chairman's prior approval is needed, it may not be unreasonably withheld and, in the its absence,
Board approval may be sought.
(n)
Diversity Policy
The Board has adopted a diversity policy which provides a framework for the Company to achieve, amongst other things, a
diverse and skilled workforce, a workplace culture characterised by inclusive practices and behaviours for the benefits of all
staff, improved employment and career development opportunities for women and a work environment that values and utilises
the contributions of employees with diverse backgrounds, experiences and perspectives. The Diversity Policy of iCandy
Interactive Limited is available on the Company's website.
This diversity policy outlines requirements for the Board to develop measurable objectives for achieving diversity, and annually
assess both the objectives and the progress in achieving those objectives. Accordingly, the Board has developed the following
objectives regarding gender diversity and aims to achieve these objectives over the next five years as director and senior
executive positions become vacant and appropriately qualified candidates become available:
2018
2019 - 2024
Women on the Board
Women in senior executive positions
Women employed by the Company
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%
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iCandy Interactive Limited Financial Report for the year ended 31 December 2018
No.
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%
25%
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CORPORATE GOVERNANCE STATEMENT
(o)
Securities trading policy
Directors and employees are subject to the Corporations Act restrictions on trading securities in the Company if they are in
possession of inside information. This is regarded as any information that is non-public and, if it were public, that a reasonable
person would expect to have a material effect on the price of the Company's securities.
In addition, the Company has established a policy on the trading in iCandy Interactive Limited's securities, which applies to all
Directors and employees. Key aspects of this policy are as follows:
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Directors and employees are encouraged to be long term holders of the company's securities and are discouraged from
any short-term trading;
Directors and employees may trade shares for 4 weeks following announcements of the annual results, half year results
and the annual general meeting, provided the market has been fully informed. However, a trading embargo of 2 days
applies immediately after any significant announcement;
Directors and employees need to ensure that the market is fully informed before they can trade and to protect themselves
should discuss the intended share trading with the Chairman or Company Secretary; and
Trading outside the four-week period is required to be approved by the Chairman, prior to any transaction occurring.
Generally, if the market is fully informed, the approval will be granted.
Directors are required to notify the Company Secretary within 2 days of a change in their beneficial interest in the Company
shares.
Directors are also required to obtain a written acknowledgment of the Chairman (or the Board in the case of the Chairman)
prior to trading.
Directors' interest in the company's securities have not changed materially in the last 12 months.
Board Committees
(a)
Board committees and membership
(b)
Audit committee
(c)
Board Risk Oversight Committee
(d)
Board Nominations Committee
(e)
Board Remuneration Committee
Due to the size and nature of the existing Board and the magnitude of the Company's operations, the Company does not currently
have the committees listed above. Pursuant to clause 5(h) of the Company's Board Charter, the full Board carries out the duties that
would ordinarily be assigned to the above Committees under the written terms of reference for those committees.
Audit governance and independence
(a)
Approach to audit governance
The Board is committed to these basic principles:
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iCandy Interactive Limited must produce trust and fair financial repots; and
Its accounting methods are comprehensive and relevant and comply with applicable accounting rules and policies.
(b)
Engagement and rotation of external auditor
iCandy Interactive Limited's independent external auditor is Bentleys Audit & Corporate (WA) Pty Ltd.
(c)
Discussions with external auditor on independence
The Board requires the external auditor to confirm that they have maintained their independence.
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CORPORATE GOVERNANCE STATEMENT
(d)
Relationship with auditor
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the audit partners and any audit firm employee on the iCandy Interactive Limited's audit are prohibited from being an
officer of iCandy Interactive Limited;
an immediate family member of an audit partner or any audit firm employee on the iCandy Interactive Limited's audit is
prohibited from being a Director or an officer in a significant position at iCandy Interactive Limited;
a former audit firm partner or employee on the iCandy Interactive Limited's audit is prohibited from being a Director or
Officer in a significant position at iCandy Interactive Limited for at least five years and after the five years, can have no
continuing financial relationship with the audit firm;
members of the audit team and firm are prohibited from having a business relationship with iCandy Interactive Limited or
any officer of iCandy Interactive Limited unless the relationship is clearly insignificant to both parties;
the audit firm, its partners, its employees on the iCandy Interactive Limited's audit and their immediate family members
are prohibited from having a direct or material indirect investment in iCandy Interactive Limited;
officers of iCandy Interactive Limited are prohibited from receiving any remuneration from the audit firm;
the audit firm is prohibited from having a financial interest in any company with a controlling interest in iCandy Interactive
Limited; and
the audit firm engagement team in any given year cannot include a person who have been an officer of iCandy Interactive
Limited during that year.
(e)
Restrictions on non-audit services by the external auditor
The external auditor is not restricted in the provision of non-audit services to iCandy Interactive Limited except as required by
the Corporations Act or the ASX Listing Rules.
(f)
Attendance at Annual General Meeting
iCandy Interactive Limited's external auditor attends the annual general meeting and is available to answer shareholders
questions.
Controlling and managing risk
(a)
Approach to risk management
Taking and managing risk are central to business and to building shareholder value. iCandy Interactive Limited's approach is to
identify, assess and control the risks which affects its business. The intention is to enable risks to be balanced against
appropriate rewards. The risk management approach links iCandy Interactive Limited's vision and values, objectives and
strategies, and procedures and training.
(b)
Risk management roles and responsibilities
The Board is responsible for approving and reviewing iCandy Interactive Limited's risk management strategy and policy. The
Board is responsible for implementing the Board-approved risk management strategy and developing policies, controls,
processes and procedures to identify and manage risks in all of iCandy Interactive Limited's activities.
iCandy Interactive Limited does not comply with ASX recommendations on these issues as it does not have a formal verifiable
system of risk management or any employees to implement such a system as it does not view this to be appropriate at the
current time. It relies on the oversight of the Directors and the various committees, together with the periodic verification of the
external auditor.
(c)
Company secretarial assurance
The Board received periodic reports about the financial conditions and operational results of iCandy Interactive Limited. The
CEO periodically provides formal statements to the Board that in all material respects:
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the company's periodic financial statements present a true and fair view of iCandy Interactive Limited's financial condition
and operational results for those reporting periods; and
that risk management and internal compliance and control systems are sound, appropriate and operating efficiently and
effectively.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
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CORPORATE GOVERNANCE STATEMENT
Remuneration framework
(a)
Overview
The remuneration of an executive Director will be decided by the Board, without the affected executive Director participating in
that decision-making process.
The total maximum remuneration of Non-Executive Directors are initially set by the Directors and subsequent variation is by
ordinary resolution of Shareholders in general meeting in accordance with the Constitution, the Corporations Act and the ASX
listing Rules, as applicable. The determination of Directors' remuneration within that maximum will be made by the Board
having regard to the inputs and value to the Company of the respective contributions by each non-executive Director. The
current amount has been set at an amount not to excess $150,000 per annum.
In addition, a Director may be paid fees or other amounts, (e.g. subject to any necessary Shareholder approval, non-cash
performance incentives such as Options) as the Directors determine whether a Director performs special duties or otherwise
performs services outside the scope of the ordinary duties of a Director.
Directors are also entitled to be paid reasonable travelling, hotel and other expenses incurred by them respectively in or about
the performance of their duties as Directors.
The Board review and approves the remuneration policy to enable the Company to attract and retain executives and Directors
who will create value for Shareholders having consideration to the amount considered to be commensurate for a company of
its size and level of activity as well as the relevant Directors' time, commitment and responsibility. The Board is also
responsible for reviewing any employee incentive and equity-based plans including the appropriateness of performance
hurdles and total payments proposed.
(b)
Employee Share Options Scheme
There are no Employee Share Options Schemes (ESOS) granted over un-issued shares to directors or executives as part of
their remuneration. The issue of any options would require approval by Shareholders.
Corporate responsibility and sustainability
(a)
Approach to corporate responsibility and sustainability
iCandy Interactive Limited's approach to corporate responsibility and sustainability is to manage its business I a way that
produces positive outcomes for all stakeholders and maximises economic, social and environmental value simultaneously. In
doing so, iCandy Interactive Limited accepts that the responsibilities flowing from this go beyond both strict legal obligations
and financial bottom line. Transparency, the desire for fair dealing, and positive links into the community underpin our everyday
activities and corporate responsibility practices.
(b)
Code of conduct
iCandy Interactive Limited's Board and management are committed to their Code of Conduct (Code) which is based on their
core values and on the expectations of their clients, of shareholders and of the broader community.
The Code aims to promote a high level of professionalism and provide a benchmark for ethical and professional behaviour
throughout the Company. It also promotes a healthy, respectful workplace and environment for all their employees.
At the same time, the Code aims to support their business reputation and corporate image within the wider community and
make employees aware of the consequences they face if they breach the Code.
The ASX recommendations require that the Code of Conduct is reviewed periodically, specifically to reflect the ASX Corporate
Governance Principles and Recommendations.
(c)
Insider trading policy and trading in iCandy Interactive Limited shares
The Company Secretary has responsibility for ensuring compliance with the continuous disclosure requirements in the ASX
Listing Rules, and overseeing and coordinating information disclosure to the ASX, analysts, brokers, shareholders, the media
and the public.
iCandy Interactive Limited is committed to giving all shareholders comprehensive and equal access to information about our
activities, and to fulfil continuous disclosure obligations to the broader market. iCandy Interactive Limited's policy is designed to
ensure compliance with ASX Listing Rules continuous disclosure requirements. It ensures any information that a reasonable
person would expect to have a material effect on the price of iCandy Interactive Limited's securities is disclosed.
At the same time, the Code aims to support their business reputation and corporate image within the wider community and
make employees aware of the consequences they face if they breach the Code.
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CORPORATE GOVERNANCE STATEMENT
iCandy Interactive Limited currently maintains its own website and relies on communication in this medium on the ASX Company
Announcements platform carrying all the relevant information.
Compliance with ASX Corporate Governance Council Good Practice Recommendations
The table below outlines each of the ASX Best Practice Recommendations and the Company's compliance with those
recommendations. Where the Company has met the relevant recommendation during the reporting period, this is indicated by a
"YES" in the relevant column. Where the Company has not met or complied with a recommendation, this is indicated by a "NO" and
an accompanying note explaining the reasons why the Company has not met the recommendation.
Principles and Recommendations
Complied
Note
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1
A listed entity should disclose:
(a)
(b)
the respective roles and responsibilities of its board and management; and
those matters expressly reserved to the board and those delegated to management
Recommendation 1.2
A listed entity should :
(a)
undertake appropriate checks before appointing a person, or putting forward a person, or putting
forward to security holders a candidate for election, as a director; and
provide security holders with all material information relevant to a decision on whether or not to
elect or re-elect a director.
(b)
Recommendation 1.3
A listed entity should have a written agreement with each director and senior executive setting out the
terms of their appointment.
Recommendation 1.4
The Company Secretary of a listed entity should be accountable, directly to the board, through the
chair, on all matters to do with the proper functioning of the board.
Recommendation 1.5
A listed entity should:
(a)
Have a diversity policy which includes requirements for the board or a relevant committee of the
board;
(i)
(ii)
disclose that policy of a summary of it; and
disclose as at the end of each reporting period:
to set measurable objectives for achieving gender diversity; and
to assess annually both the objectives and the entity's progress in achieving them;
(b)
(c)
(i)
(ii)
(A)
(B)
the measurable objectives for achieving gender diversity set by the board or a relevant
committee of the board in accordance with the entity's diversity policy.
either:
the respective portions of men and women on board, in senior executive positions and
across the whole organisation (including how the entity has defined "senior executive" for
these purposes_; or
if the entity is a "relevant employer" under the Workplace Gender Equality Act, the entity's
most recent "Gender Equality Indicators", as defined in the Workplace Gender Equality Act
2012.
Recommendation 1.6
A listed entity should:
(a)
have and disclose a process for periodically evaluating the performance of the board, its
committees and individual directors; and
disclose in relation to each reporting period, whether a performance evaluation was undertaken
in the reporting period in accordance with that process.
(b)
Yes
Yes
Yes
Yes
Yes
No
1
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CORPORATE GOVERNANCE STATEMENT
Recommendation 1.7
A listed entity should:
(a)
have and disclose a process for periodically evaluating the performance of its senior executives;
and
disclose in relation to each reporting period, whether a performance evaluation was undertaken
in the reporting period in accordance with that process.
(b)
Principle 2: Structure the Board to add value
Recommendation 2.1
The board of a listed entity should:
(a)
have a nomination committee which:
has at least three members, a majority of whom are independent directors;
is chaired by an independent director and disclose:
(i)
(ii)
(iii) the charter of the committee;
(iv) the members of the committee; and
(v)
as at the end of each reporting period, the number of times the committee met throughout
the period and the individual attendances of the members at those meetings; or
(b)
If it does not have a nomination committee, disclose that fact and the processes it employs to
address board succession issues and to ensure that the board has the appropriate balance of
skills, experience, independence and knowledge of the entity to enable it to discharge its duties.
Recommendation 2.2
A listed entity should have and disclose a broad skill matrix setting out the mix of skills and diversity
that the board currently has or is looking to achieving its membership.
Recommendation 2.3
A listed entity should disclose:
(a)
(b)
the names of the directors considered by the board to be independent directors;
if a director has an interest, position, association or relationship of the type described in Box 2.3
of the ASX Corporate Governance Principles and Recommendation (3rd Edition), but if the
board is of the opinion that it does not compromise the independence of the director, the nature
of the interest, position, association or relationship in question and an explanation of why the
board of that opinion; and
the length of service of each director
(c)
Recommendation 2.4
A majority of the board of a listed entity should be independent directors.
Recommendation 2.5
The chair of the board of a listed entity should be an independent director and, in particular, should
not be the same person as the CEO of the entity.
Recommendation 2.6
A listed entity should have a program for inducting new directors and providing appropriate
professional development opportunities for continuing directors to develop and maintain the skills and
knowledge needed to perform their role as a director effectively.
Principle 3: Act Ethically and Responsibly
Recommendation 3.1
A listed entity should:
(a)
(b) disclose that code or a summary of it.
have a code of conduct for its directors, senior executives and employees; and
2
3
4
No
No
Yes
Yes
Yes
No
Yes
Yes
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CORPORATE GOVERNANCE STATEMENT
Principle 4: Safeguard Integrity in Corporate Reporting
Recommendation 4.1
The board of a listed entity should:
(a)
have an audit committee which:
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has at least three members, a majority of whom are independent directors;
is chaired by an independent director who is not the chair of the board, and disclose:
(i)
(ii)
(iii) the charter of the committee;
(iv) the relevant qualifications and experience of the members of the committee; and
(v)
as at the end of each reporting period, the number of times the committee met throughout
the period and the individual attendances of the members at those meetings; or
if it does not have an audit committee, disclose that fact and the processes it employs that
independently verifies and safeguards the integrity of its financial reporting, including the
processes for the appointing and removal of the external auditor and the rotation of the external
auditor.
(b)
Recommendation 4.2
The Board of a listed entity should, before it approves the entity's financial statements for a financial
period, receive from its CEO and CFO a declaration that the financial records of the entity have been
properly maintained and that the financial statements comply with the appropriate accounting
standards and give a true and fair view of the financial position and performance of the entity and that
the opinion has been formed on the basis of a sound system of risk management and internal control
which is operating effectively.
Recommendation 4.3
A listed entity that has an AGM should ensure that its external auditor attends its AGM and is
available to answer questions from security holders relevant to the Annual Report.
Principle 5: Make timely and balances disclosure
Recommendation 5.1
A listed entity should:
(a)
have a written policy for complying with its continuous disclosure obligations under the Listing
Rules; and
Yes
Yes
Yes
(b)
disclose that policy or a summary of it.
Principle 6: Respect the rights of Security Holders
Recommendation 6.1
A listed entity should provide information about itself and its governance to investors via its website.
Yes
Recommendation 6.2
A listed entity should design and implement an investor relations program to facilitate effective two-
way communication with investors.
Recommendation 6.3
A listed entity should disclose the policies and processes it has in place to facilitate and encourage
participation at meetings of security holders.
Recommendation 6.4
A listed entity should give security holders the option to receive communications from, and send
communications to, the entity and its board.
Yes
Yes
Yes
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CORPORATE GOVERNANCE STATEMENT
Principle 7: Recognise and manage risk
Recommendation 7.1
The board of a listed entity should:
(a)
have a committee or committees to oversee risk, each of which:
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has at least three members, a majority of whom are independent directors;
is chaired by an independent director who is not the chair of the board, and disclose:
(i)
(ii)
(iii) the charter of the committee;
(iv) the members of the committee; and
(v)
as at the end of each reporting period, the number of times the committee met throughout
the period and the individual attendances of the members at those meetings; or
(b)
if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and
the process it employs for overseeing the entity's risk management framework.
Recommendation 7.2
The board or a committee of the board should:
(a)
review the entity's risk management framework with management at least annually to satisfy
itself that it continues to be sound, to determine whether there have been any changes in the
material business risks the entity faces and to ensure that they remain within the risk appetite
set by the board; and
disclose in relation to each reporting period, whether such a review has taken place.
(b)
Recommendation 7.3
A listed entity should disclose:
(a)
(b)
if it has an internal audit function, how the function is structured and what role it performs; or
if it does not have an internal audit function, that fact and the processes it employs for
evaluating and continually improving the effectiveness of its risk management and internal
control process.
Yes
Yes
Recommendation 7.4
A listed entity should disclose whether, and if so how, it has regard to economic, environmental and
social sustainability risks and, if it doesn't how it manages or intends to mange those risks.
Yes
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1
The board of a listed entity should:
(a)
have a remuneration committee which:
No
7
has at least three members, a majority of whom are independent directors;
is chaired by an independent director who is not the chair of the board, and disclose:
(i)
(ii)
(iii) the charter of the committee;
(iv) the members of the committee; and
(v)
as at the end of each reporting period, the number of times the committee met throughout
the period and the individual attendances of the members at those meetings; or
(b)
if it does not have a remuneration committee, disclose that fact and the processes it employs for
setting the level and composition of remuneration for directors and senior executives and
ensuring that such remuneration is appropriate.
Recommendation 8.2
A listed entity should separately disclose its policies and practices regarding the remuneration of non-
executive directors and the remuneration of executive directors and other senior executives and
ensure that the different roles and responsibilities of non-executive directors compared to executive
directors and other senior executives are reflected in the level and composition of their remuneration.
Yes
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
10
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
CORPORATE GOVERNANCE STATEMENT
Recommendation 8.3
A listed entity which has an equity-based remuneration scheme should:
(a)
have a policy on whether participants are permitted to enter into transactions (whether through
the use of derivatives or otherwise) which limits the economic risk of participating in the
scheme; and
disclose that policy or a summary of it.
(b)
No
8
Note 1
The Board is responsible for evaluating the performance of the Board and individual Directors will be evaluated on an annual basis,
with the aid of an independent advisor, if deemed required. The Company's Corporate Governance Plan requires the Board to
disclose whether or not performance evaluations were conducted during the relevant reporting period with details of the
performance evaluations conducted will be provided in the Company's Annual Report. No evaluation has taken place to the date of
this report.
Note 2
The Company has not undertaken a performance evaluation of its senior executives noting that the Company currently does not
employ any executives. Performance reviews will take place once senior executive roles are occupied.
Note 3
Due to the size and nature of the existing Board, the Company does not currently have a Nomination Committee. The full Board
carries out the duties that would ordinarily be assigned to the Nomination Committee and the Board devotes time on an annual
basis to discuss Board succession issues. All members of the Board are involved in the Company's nomination process, to the
maximum extent permitted under the Corporations Act and ASX Listing Rules.
Note 4
The current Chairman of the Company, Mr Ki Wai Lau, is not deemed an independent director due to his indirect shareholdings in
the Company via Fatfish Blockchain Limited, of which he is an Executive Director.
Note 5
Due to the size and nature of the existing Board, the Company does not currently have a Audit Committee. The full Board carries
out the duties that would ordinarily be assigned to the Audit Committee under the written terms of reference for that committee and
annually to fulfilling the roles and responsibilities associated with maintaining the Company's internal audit function and
arrangements with external auditors. All members of the Board are involved in the Company's audit function to ensure the proper
maintenance of the entity and the integrity of all financial report.
Note 6
Due to the size and nature of the existing Board, the Company does not currently have a Risk Management Committee. The full
Board carries out the duties that would ordinarily be assigned to the Risk Management Committee and devotes time annually to
fulfilling the rules and responsibilities associated with overseeing risk and maintaining the entity's risk management framework and
associated internal compliance and control procedures.
Note 7
Due to the size and nature of the existing Board, the Company does not currently have a Remuneration Committee. The full Board
carries out the duties that would ordinarily be assigned to the Remuneration Committee and devotes time annually to fulfilling the
rules and responsibilities associated with setting the level and composition of remuneration for Directors, ensuring that such
remuneration is appropriate and not excessive.
Note 8
The Company does not currently have any equity based remuneration schemes in place.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
11
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
DIRECTORS' REPORT
Your directors present their report on the consolidated entity (referred to herein as the Group) consisting of iCandy Interactive Limited and its
controlled entities for the financial period ended 31 December 2018.
General Information
Directors
The following persons were directors of iCandy Interactive Limited during the whole of the financial period and up to the date of this report,
unless otherwise stated.
Kin Wai Lau
Non-Executive Director and Chairman
Appointed on 20 March 2015
Phillip Lord
Executive Director
Appointed 11 October 2017
Kin Wai is a serial tech entrepreneur with extensive international start-
up, senior management and investment experience.
Since founding his first company at age 23, Kin Wai has built companies
across telecom software, internet media and biotech. He is one of the
handful of entrepreneurs in Southeast Asia that have real track-record of
multiple exists. Kin Wai was named by the media as one of the
youngest ever MDs of a publicly traded firm in Southeast Asia when he
IPO'd his first company at the age of 28. He has since been involved in
building other tech companies, with three of them being listed on major
stock exchanges in the region.
Kin Wai began his career as research staff and a PhD candidate at the
Imperial College, London, before starting up his own company.
Kin Wai frequently supports entrepreneurial campaigns in colleges and
universities and is a regular judge at innovation and start-up
competitions in Singapore.
Kin Wai graduated with first class honours in Electronics & Electrical
Engineering from the University of Manchester, United Kingdom. He
also has a Master in Business, Administration from the University of
Oxford.
Other current directorships of listed companies
Fatfish Blockchain Limited - appointed July 2014
Former directorships of listed companies in last three years
N/A
Phillip has been a serial investor in tech and early stage companies with
20 years of experience in global equity, debt, and M&A markets. He was
formerly MD for Jefferies & Nomura, working in Tokyo, Hong Kong,
Singapore & London.
He expressed that he was super excited about joining iCandy and to
have the opportunity to drive growth for the Company within the gaming
industry, and its surrounding verticals like in-game advertising and
micropayment. He has also stated that there is a revolution happening in
blockchain technology and is positive that the blockchain technology
could facilitate in-game micro-payment purchase in the gaming industry
for the free-to-play business model of mobile games.
Other current directorships of listed companies
N/A
Former directorships of listed companies in last three years
N/A
Candy Interactive Limited Financial Report for the year ended 31 December 2018
12
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
DIRECTORS' REPORT
Robert Kolodziej
Non-Executive Director
Appointed 27 May 2015
Marcus Ungar
Non-Executive Director
Appointed 1 April 2018
Masahiko Honma
Non-Executive Director
Appointed 22 June 2018
Robert is a senior advisor at Bell Porter Securities and has over 20
years' experience in investment management. He has wide
macroeconomic understanding across many areas of financial markets
and specialises in strategic investment advice for high net worth clients,
small cap fund managers and family officers.
Robert has expertise with small capitalisation companies especially in
the technology and renewable sector and has been arranging
transactions in equity capital markets for these companies. Prior to
working in stockbroking, Robert worked for Ernst & Young in the
property trust area while at the same time running a business
specialising in eco-tourism. Since then, he has worked in the property
development sector specialising in due diligence and strategy.
Separately from his role at Bell Potter Securities, he is also an Executive
Director at Kollins Capital, a financial services and corporate advisory
firm.
Other current directorships of listed companies
N/A
Former directorships of listed companies in last three years
N/A
Marcus is a founding member of CGAM Pty Ltd which is a private equity
firm based in Sydney. CGAM invests in innovative, high quality
technology companies seeking growth stage investment. He is currently
the CEO of Investorlend Pty Limited. Investorlend is an investment
platform which enables its investors to participate in commercial loans
and equity linked investments.
Marcus has also continued his association with Compass Global
Markets which specialises in foreign exchange and international
payments.
Other current directorships of listed companies
N/A
Former directorships of listed companies in last three years
N/A
Mr Honma is the founder of IncubateFund. Mr Honma started his career
with overseeing information technology investments in Silicon Valley at
JAFCO's overseas investment arm. He has also held roles in
Accenture's venture capital arm and in 2007 founded Core People
Partners, a fund specialising in incubation of internet businesses.
Mr Honma has a stellar track record of creating and supporting mobile
gaming start-ups including Pokelabo and Gumi. Both have grown from 2
to 3 persons teams when Mr Honma joined as the first outside investor
in 2008, into companies with 280 and 400 employees respectively.
Pokelabo, which Mr Honma co-founded and took the first CEO role of
was successfully acquired by GREE, mobile gaming giant in Japan, with
the valuation of over US$174 million in an all-cash deal in 2012.
Other current directorships of listed companies
N/A
Former directorships of listed companies in last three years
N/A
Candy Interactive Limited Financial Report for the year ended 31 December 2018
13
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
DIRECTORS' REPORT
Donald Low
Non-Executive Director
Resigned 1 April 2018
Donald has worked in the corporate advisory and corporate finance
section with experience over seeing the whole business cycle, ranging
from start-ups, business creating and exits via Initial Public Offerings
(IPOs), Reverse Take Overs (RTO), Trade Sales and Mergers and
Acquisitions (M&A). As part of all corporate restructurings, especially in
distressed assets and business models, Donald takes a hands-on
approach in the senior management of the companies post transactions.
He has served as Chief Executive Officer (CEO) and as director on
boards of private and publicly listed companies in Asia, Australia and
Europe with interests ranging from traditional businesses such as
agriculture (oil palm plantations, etc), logistics, finance, mining,
manufacturing, goods and services (A&W) to new economy businesses
in TMT (Telecommunication, Media & Technology) space and the fast
growing internet environment.
Other current directorships of listed companies
Fatfish Blockchain Limited - appointed April 2008
Former directorships of listed companies in last three years
Gladiator Resources Limited - resigned February 2017
Company Secretary
Mr Donald Low resigned as the Company Secretary on 1 April 2018. Mr Andrew Draffin and Ms Jiahui Lan were subsequently appointed as
Joint Company Secretary on that date.
Andrew is a director of the accounting firm DW Accounting & Advisory Pty Ltd. He holds a Bachelor of Commerce and is a member of the
Chartered Accountants Australia and New Zealand. Andrew is a Director, Chief Financial Offer and Company Secretary of listed, unlisted
and private companies across a broad range of industries. His focus is on financial reporting, treasury management, management
accounting and corporate services, areas where he has gained over 18 years experience.
Jiahui is a director of the accounting firm DW Accounting & Advisory Pty Ltd. She holds a Bachelor of Business (Accounting). Jiahui is a
Director and Company Secretary of listed, unlisted and private companies across a range of industries. Her focus is on financial reporting,
management accounting and corporate services, areas where she has gained over 10 years experience.
Shareholdings of directors and other key management personnel
The interest of each Director and other key management personnel, directly and indirectly, in the shares and options of the Company at the
date of this report are as follows:
Kin Wai Lau*
Phillip Lord
Robert Kolodziej
Marcus Ungar
Masahiko Honma
Donald Han Low*
Date of this report
31 December 2017
Ordinary Shares
Share Options
Ordinary Shares
Share Options
192,500,001
-
192,500,001
-
-
- - -
250,000
- 250,000
-
-
- - -
-
-
- -
192,500,001
- 192,500,001
-
*Shares are held in Fatfish Internet Pte Ltd, a subsidiary of Fatfish Blockchain Limited, of which Mr Kin Wai Lau and Mr Donald Han Low are
directors of.
Candy Interactive Limited Financial Report for the year ended 31 December 2018
14
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
DIRECTORS' REPORT
Meetings of Directors
During the financial year, 3 meetings of directors (including circular resolutions) were held.
Attendances by each director during the year were as follows:
Kin Wai Lau
Phillip Lord
Robert Kolodziej
Marcus Ungar
Masahiko Honma
Donald Han Low
Directors' Meetings
Number eligible to
attend
Number attended
3
3
3
-
-
3
3
3
3
-
-
3
Principle Activities and Significant Changes in Nature of Activities
The Company's business plan is to develop and publish 'freenium' games for smartphones, which are free-to-download and free-to-play for
players. The 'freenium' game model is proven to be a successful business model employed by many global mobile game companies. The
Company plans to generate revenue through the following approaches.
-
-
-
In-game purchases - players can purchase virtual items or currencies which are used within the Company's games to improve character
levels, speed up the game progress and/or enhance playing experience;
Mobile advertising - which allows iCandy to advertise third-party products and services in the Company's games; and
Game merchandise sales - players can purchase game related merchandise branded with logos and artwork of the Company's various
games.
Review of Operations
During the financial year ended 31 December 2018 the Group reported a higher revenue and lower loss from ordinary activities compared to
the previous period. Particularly, after excluding one-off items such as impairment losses and unrealized movement in fair value of
intangibles, the operating loss for the current financial year narrowed to approximately $1,150,178 compared to $1,874,371 in the previous
financial year. This was attributable to several factors:
-
-
contribution from the two successful game titles launched during the year - Light A Way and Hollywhoot; and
contribution from the first blockchain game developed by the Group - Cryptant Crab.
In an effort to broaden the Group’s revenue stream, iCandy has also started to leverage on its experience in the mobile gaming industry to
provide game publishing services, which involves iCandy marketing and distributing mobile games developed by third party development
studio in return for a percentage of revenue. One such successful publishing deal in 2018 was Void Troopers. The iCandy management is
optimistic that it is able to secure more low-risk high-reward publishing deals in 2019.
Furthermore, with several successful and popular titles under iCandy’s stable of games, iCandy’s management plans to allocate more
resources to growing its gamer base and gamer retention rate via several medium. The Group entered into an agreement to acquire majority
stake in Joyseed, a game studio based in Indonesia with the objective to expand further the game production capability and capacity of the
Group. With more production capacity the Group plans to continue on developing more mobile game titles that can mirror the success of the
existing successful games within its game portfolio.
Operating Results
The consolidated loss of the consolidated entity after providing for income tax amounted to $3,445,405. (2017: loss of $3,113,914)
Financial Position
The net assets of the Group have decreased by $827,188 from $3,793,160 as at 31 December 2017 to $2,965,972 as at 31 December 2018.
Dividend Paid or Recommended
It is not recommended that a dividend be declared and no dividends were paid or declared during and since the end of the financial year.
Candy Interactive Limited Financial Report for the year ended 31 December 2018
15
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
DIRECTORS' REPORT
Reconciliation to Preliminary Results
The following tables reconcile statutory consolidated net losses after tax to preliminary consolidated net losses after tax in Appendix 4E:
Consolidated statement of profit or loss
Appendix 4E
Adjustments
Statutory Financial Report
Statutory net loss after tax
(2,908,888)
(536,517)
(3,445,405)
The following table reconciles statutory consolidated statement of financial position to preliminary consolidated statement of financial position
in Appendix 4E.
Consolidated statement of financial position
Appendix 4E
Adjustments
Statutory Financial Report
Total Assets
Total Liabilities
5,196,314
1,731,007
(500,058)
(723)
4,696,256
1,730,284
The audit had just commenced before the lodgement of the Company's Appendix 4E. Listed below are the major items that have affected the
Consolidated statement of profit or loss and Consolidated Statement of financial position.
1.
2.
Appxplore (iCandy) Limited, a wholly owned subsidiary of iCandy Interactive Limited had made a prepayment in the prior year of AUD
329,167 (SGD 316,000) to purchase PT Maximum Impact. Due to the extended time period in completing this transaction, the Company
has decided to impair the prepayment.
The subsidiaries of iCandy Interactive Limited had provided loans to related parties in prior years. The loans were interest free. As the
entities that the loans were provided to continues to incur losses, the Company has recognised a provision for impairment of $207,350.
Matters subsequent to the End of the Financial Year
On 2 January 2019, the Company announced that all of the conditions precedent to the Share Purchase Agreement of PT Joyseed Berbagi
Sukses had been fulfilled, and hence the agreement had become unconditional.
In addition, due to limitations of foreign ownership rules in Indonesia, the Company and the Vendors had entered into a supplemental
agreement to reduce the acquisition of Joyseed from 70% to 67%. The consideration was proportionately adjusted to AUD 335,000
(previously AUD 350,000).
The consideration is to be satisfied by the issue of iCandy Shares in 8 Tranches on a quarterly basis.
On 4 January 2019, the acquisition of PT Joyseed Berbagi Sukses was completed with the issuance of 326,389 fully paid ordinary shares at
a nominated value of $0.09 per share (AUD 29,375). The shares had been issued as Tranche 1 settlement of the acquisition.
On 5 March 2019, the Company announced it had entered into a binding term sheet with UK based Xcademy Limited ("Xcademy"), which is
building and planning to launch a mobile first online video influencer training and monetisation platform.
As announced, subject to the satisfaction of all conditions precedent under the agreement, the Company intends to invest up to USD
$200,000 in cash consideration and USD $100,000 in digital advertising into Xcademy in return for 20% of the enlarged share capital of
Xcademy. At the date of this report, the transaction has not been finalised.
On 21 March 2019, the Company announced it had entered into a Global Collaboration and Distribution Agreement with ASX-listed Emerge
Gaming Limited ("EM1").
The Agreement provides for the joint building and operation of mobile games focused on EM1's eSports platform which has been launched in
various major geographical markets in collaboration with telcos and other major consumer businesses.
The key terms of the Agreement include:
-
-
-
-
-
Collaboration purpose: The purpose of the collaboration is to license and integrate select iCandy's game content onto EM1's Arcade X
Platform to develop mutual beneficial business in the mobile esports area.
Grant of Licence by EM1: EM1 grants to iCandy a non-exclusive license to use EM1's Arcade X technology and platform in the
territories.
Grant of Licence by iCandy: iCandy grants to EM1 a non-exclusive license to use select games from its game portfolio in the Territories.
Territories: Australia, New Zealand, Latin America, India, Middle East and Africa
Revenue Share: iCandy and EM1 are to share the net revenue from this collaboration on a 50:50 basis, after deducting all relevant and
reasonable costs from both parties.
Future Developments
The Company plans to implement its business strategy as outlined above.
The Company will continue to keep stakeholders informed of any future developments via its compliance with the continuous disclosure
requirements.
Candy Interactive Limited Financial Report for the year ended 31 December 2018
16
For personal use only
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
DIRECTORS' REPORT
Environmental Issues
The Company's operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of a State or
Territory.
Audit/Non-Audit Services
Auditors' remuneration is disclosed In Note 6. No non-audit services have been provided by the auditor or their related practices.
Indemnifying Officers or Auditors
An indemnity has been given by the Company in favour of the directors to the extent that Corporations Act 2001 allows. No payment or
agreement has been given in relation to a premium in respect of a contract insuring against a liability incurred as an officer for the costs or
expenses to defend legal proceedings.
No other insurance premiums of indemnity has been paid or provided in respect of any directors or auditors.
Capital Raising and Capital Structure
As at 31 December 2018, the Company has 309,007,937 fully paid ordinary shares. During the year, a total of 31,815,191 fully paid ordinary
shares were issued. Please refer to Note 18 - Issued capital for further details.
Summary of Options on issue
Issuing entity
Issue Date
Number of shares
under option
Class of shares
Exercise Price
Expiry Date
iCandy Interactive Limited
10 Jun 2015
8,033,333 Listed options
iCandy Interactive Limited
iCandy Interactive Limited
1 Feb 2016
9 Oct 2017
22,500,000 Listed options
20,500,000 Unlisted options
iCandy Interactive Limited
26 Nov 2018
10,000,000 Unlisted options
$0.210
$0.210
$0.100
$0.050
4 Feb 2020
4 Feb 2020
9 Oct 2019
26 Nov 2020
Option holders do not have any rights to participate in any issues or other interest in the company or any other entity.
For details of options issued to directors and executives as remuneration, refer to Remuneration Report.
There have been no shares issued since the end of the financial year resulting from exercise of options.
Proceedings on Behalf of Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or 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 any part of those proceedings.
The Company was not a party to any such proceedings during the year.
Auditor's Independence Declaration
A copy of the auditor's independence declaration as required by section 307c of the Corporations Act 2001 is attached on page 21.
Candy Interactive Limited Financial Report for the year ended 31 December 2018
17
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
DIRECTORS' REPORT
REMUNERATION REPORT - AUDITED
This remuneration report sets out remuneration information for non-executive directors, executive directors and other key management
personnel.
Remuneration Policies
Remuneration levels are competively set to attract the most qualified and experienced Directors and Senior Executives. The Board may
obtain independent advice on the appropriateness of remuneration packages. No independent advice was sought during or since the end of
the period under review with regards to remuneration.
There are no schemes for retirement benefits.
The directors are reimbursed for expenses incurred by them in the course of their duties as directors of the company.
There is no link between the provision of any monetary benefits and performance of the company.
The Group's earnings and movement in shareholder's wealth for the past four years are detailed in the following table:
31 December 2018
31 December 2017
31 December 2016
Nine months
ending 31
December 2015
Revenue
Net (loss) before tax
Net (loss) after tax
Share price at start of the year
Share price at end of the year
Dividends paid
Basic (loss) per share
Key management remuneration policy
2,815,704 1,656,454 1,573,617 154,246
(3,480,281) (3,362,941) (408,768) (250,254)
(3,445,405) (3,113,914) (422,090) (250,254)
$0.00
$0.14
$0.00
$0.16
- - - -
(1.18) (1.23) (0.19) (0.14)
$0.00
$0.14
$0.16
$0.05
The key management personnel of the company are represented by the directors and company secretary.
The key management personnel remuneration policy is therefore the same as the directors' remuneration policy.
Directors and executives disclosed in this report
Name
Kin Wai Lau
Phillip Lord
Robert Kolodziej
Marcus Ungar (appointed 1 April 2018)
Position Held
Non-Executive Director and Chairman
Executive Director
Non-Executive Director
Non-Executive Director
Masahiko Honma (appointed 22 June 2018)
Non-Executive Director
Donald Han Low (resigned 1 April 2018)
Non-Executive Director and Company Secretary
Remuneration of Directors and Other Key Management Personnel (KMP) for the Year Ended 31 December 2018
Name
Kin Wai Lau
Philip Lord
Robert Kolodziej
Salaries, fees and
leave
Shares,
Options/Incentive
Rights
Superannuation
Total
24,907
- - 24,907
84,164
- - 84,164
12,000
- -
12,000
Marcus Ungar (appointed 1 April 2018)
18,000
- - 18,000
Masahiko Honma (appointed 22 June 2018)
Donald Han Low (resigned 1 April 2018)
- -
6,000
145,071
- -
- - 6,000
- - 145,071
Candy Interactive Limited Financial Report for the year ended 31 December 2018
18
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
DIRECTORS' REPORT
Remuneration of Directors and Other Key Management Personnel (KMP) for the Year Ended 31 December 2017
Name
Salaries, fees and
leave
Shares,
Options/Incentive
Rights
Superannuation
Total
Kin Wai Lau
23,024
-
- 23,024
Philip Lord (appointed 11 October 2017)
108,738
- - 108,738
Donald Han Low
Robert Kolodziej
24,000
- - 24,000
12,000
- -
12,000
167,762
- - 167,762
No post-employment benefits were paid to the directors. The directors do not participate in any incentive programs.
KMP Shareholdings
The number of ordinary shares in iCandy Interactive Limited held by each KMP of the Group during the financial year are as follows:
Name
Kin Wai Lau*
Philip Lord
Balance at beginning
of year
Granted as
Remuneration during
the year
Issued on Exercise
of Options during the
year
Other changes
during the year
Balance at End
of Year
192,500,000
- - - 192,500,000
-
-
- - -
Robert Kolodziej
250,000
-
- - 250,000
Marcus Ungar (appointed 1
April 2018)
Masahiko Honma
(appointed 22 June 2018)
Donald Han Low (resigned
1 April 2018)*
-
- -
-
-
-
- - - -
192,500,000
- - - 192,500,000
*Shares were held in Fatfish Internet Pte Ltd, a subsidiary of Fatfish Blockchain Limited, of which Mr Kin Wai Lau and Mr Donald Han Low
are directors of.
The number of listed and unlisted options in iCandy Interactive Limited held by each KMP of the Group during the financial year are as
follows:
Name
Kin Wai Lau*
Philip Lord
Balance at beginning
of year
Granted as
Remuneration during
the year
Issued on Exercise
of Options during the
year
Other changes
during the year
Balance at End
of Year
- - - - -
-
- - - -
Robert Kolodziej
- - - - -
Marcus Ungar (appointed 1
April 2018)
Masahiko Honma
(appointed 22 June 2018)
Donald Han Low (resigned
1 April 2018)*
- - - - -
- - - -
-
- - -
-
-
Share options granted to directors and executives
No shares or options were granted to Directors or Executives during the year.
At the end of the financial year, no unlisted options were held by any Director and other key management personnel, directly and indirectly.
Other transactions and balances with Key Management Personnel:
There were no other transactions and balances during the reporting period. In 2017, Mr Kin Wai Lau had loaned Appxplore (iCandy) Limited,
formerly known as iCandy Ventures Limited AUD $191,865 (SGD $200,000).
In prior years, the Company had loaned AUD $810,342.32 to Fatfish Blockchain Limited and its controlled entities.
Candy Interactive Limited Financial Report for the year ended 31 December 2018
19
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
DIRECTORS' REPORT
This concludes the remuneration report, which has been audited.
The Directors' Report, incorporating the Remuneration Report, is signed in accordance with a resolution of the Board of Directors made
pursuant to s.298(2) of the Corporations Act 2001.
Mr Kin Wai Lau
Director
Dated this 29 March 2019
Candy Interactive Limited Financial Report for the year ended 31 December 2018
20
For personal use only To The Board of Directors
Auditor’s Independence Declaration under Section 307C of the
Corporations Act 2001
As lead audit Partner for the audit of the financial statements of iCandy Interactive
Limited for the financial year ended 31 December 2018, I declare that to the best of my
knowledge and belief, there have been no contraventions of:
the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
any applicable code of professional conduct in relation to the audit.
Yours faithfully
BENTLEYS
Chartered Accountants
MARK DELAURENTIS CA
Partner
Dated at Perth this 29th day of March 2019
For personal use only
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2018
Continuing operations
Revenue
Other income
Cost of sales
Gross Profit
Marketing expenses
Audit fees
Provision for doubtful debts
Legal and professional fees
Share based payments
Occupancy expenses
Employee benefits expense
Depreciation and amortisation expense
Impairment expense
Computer expenses
Other expenses
Travel expenses
Unrealised movement in fair value of intangibles
Finance expenses
Loss before income tax
Tax (benefit)/expense
Loss for the year attributable to members of the company
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss when
specific conditions are met:
Exchange differences on translating foreign operations, net of tax
Total other comprehensive income/(loss) for the year
Total comprehensive income for the year
Earnings per share
Basic loss per share (cents)
Diluted loss per share (cents)
Note
3
3
13
4
7
7
Group
2018
$
2017
$
2,815,704
160,425
(1,507,858)
1,468,271
(33,968)
(60,594)
(2,759)
(224,342)
(457,457)
(82,139)
(619,208)
(1,100,703)
(1,143,465)
(618)
(188,097)
(30,898)
(1,004,304)
-
(3,480,281)
34,876
(3,445,405)
1,656,454
(11,137)
(939,533)
705,784
(65,269)
(50,196)
-
(129,108)
(885,980)
(37,834)
(514,729)
(651,745)
(1,488,570)
(11,274)
(113,322)
(120,698)
-
-
(3,362,941)
249,027
(3,113,914)
15,537
15,537
15,537
(3,429,868)
62,889
62,889
62,889
(3,051,025)
(1.18)
(1.18)
(1.23)
(1.23)
The accompanying notes form part of these financial statements.
iCandy Interactive Limited Financial Report for the Year Ended 31 December 2018
22
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2018
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other financial assets
Other assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
Other non-current assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Other financial liabilities
Current tax liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Deferred tax liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Retained earnings
TOTAL EQUITY
Group
Note
2018
$
2017
$
8
9
10
14
12
13
14
15
16
17
17
18
27
359,888
159,777
1,421,012
8,070
1,948,747
115,217
2,632,292
-
2,747,509
4,696,256
929,822
790,118
1,528
1,721,468
8,816
8,816
1,730,284
2,965,972
142,241
287,256
1,379,023
18,501
1,827,021
97,910
1,713,129
1,184,334
2,995,373
4,822,394
134,139
832,696
2,006
968,841
60,393
60,393
1,029,234
3,793,160
29,201,668
(19,890,013)
(6,345,683)
2,965,972
27,056,445
(19,477,027)
(3,786,258)
3,793,160
The accompanying notes form part of these financial statements.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
23
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2018
Consolidated Group
Balance at 1 January 2017
Comprehensive income
Loss for the year
Other comprehensive income for the year
Total comprehensive income for the year
Transactions with owners, in their capacity as owners,
and other transfers
Shares issued during the year
Transaction costs
Options issued during the year
Total transactions with owners and other transfers
Issued Capital
Accumulated
Losses
$
$
Foreign Currency
Translation
Reserve
$
Reserve
Option Reserve
$
Other
Components of
Equity
$
Total
$
24,159,330
(672,344)
(135,897)
-
-
-
(3,113,914)
-
(3,113,914)
-
62,889
62,889
2,977,065
(79,950)
-
2,897,115
-
-
-
-
-
-
-
-
-
-
-
-
-
-
885,980
885,980
(20,289,999)
3,061,090
-
-
-
-
-
-
-
(3,113,914)
62,889
(3,051,025)
2,977,065
(79,950)
885,980
3,783,095
Balance at 31 December 2017
27,056,445
(3,786,258)
(73,008)
885,980
(20,289,999)
3,793,160
27,056,445
(3,786,258)
(73,008)
885,980
(20,289,999)
3,793,160
Balance at 1 January 2018
Comprehensive income
Loss for the year
Other comprehensive income for the year
Total comprehensive income for the year
-
-
-
(3,445,405)
-
(3,445,405)
-
15,537
15,537
Transactions with owners, in their capacity as owners,
and other transfers
Shares issued during the year
Transaction costs net of tax
Options issued during the year
Options expired during the year
2,145,223
-
-
-
Total transactions with owners and other transfers
2,145,223
-
-
-
885,980
885,980
-
-
-
-
-
-
-
-
-
-
457,457
(885,980)
(428,523)
-
-
-
-
-
-
-
(3,445,405)
15,537
(3,429,868)
2,145,223
-
457,457
-
2,602,680
Balance at 31 December 2018
29,201,668
(6,345,683)
(57,471)
457,457
(20,289,999)
2,965,972
The accompanying notes form part of these financial statements.
iCandy Interative Limited Financial Report for the year ended 31 December 2018
24
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Net cash generated by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash acquired with acquisition of Inzen Studio Pte Ltd
Interest received
Purchase of property, plant and equipment
Purchase of intangible assets
Deposit paid for acquisition of investment
Payments for investments
Loans to related parties:
- payments made
- proceeds from repayments
Net cash (used in)/generated by investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Payments for capital raising costs
Loans from related parties:
- proceeds from borrowings
Net cash provided by (used in) financing activities
Net increase in cash held
Cash and cash equivalents at beginning of financial year
Effect of exchange rates on cash holdings in foreign currencies
Cash and cash equivalents at end of financial year
Group
Note
2018
$
2017
$
2,695,908
(2,820,057)
(124,149)
1,553,137
(2,166,699)
(613,562)
-
982
(37,553)
(300,000)
-
-
(88,892)
209,573
(215,890)
545,207
-
-
545,207
205,168
142,241
12,479
359,888
631
60,323
(89,802)
(464,585)
(250,000)
(601,390)
-
(104,351)
(1,449,174)
1,332,500
(87,945)
314,490
1,559,045
(503,691)
645,505
427
142,241
8
The accompanying notes form part of these financial statements.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
25
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
These consolidated financial statements and notes represent those of iCandy Interactive Limited and Controlled Entities ("group").
The financial statements were authorised for issue on 29 March 2019 by the directors of the company.
Note 1
Summary of Significant Accounting Policies
Basis of Preparation
These general purpose consolidated financial statements have been prepared in accordance with the Corporations Act 2001, Australian
Accounting Standards and Interpretations of the Australian Accounting Standards Board and in compliance with International Financial
Reporting Standards as issued by the International Accounting Standards Board. The Group is a for-profit entity for financial reporting
purposes under Australian Accounting Standards. Material accounting policies adopted in the preparation of these financial statements are
presented below and have been consistently applied unless stated otherwise.
Except for cash flow information, the financial statements have been prepared on an accrual basis and are based on historical costs,
modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.
(a)
Principles of Consolidation
iCandy Interactive Limited's financial statements consolidated those of the Parent Company and all of its subsidiaries as of 31
December 2018. The Parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the
subsidiary and has the ability to affect those returns through its power over the subsidiary. All subsidiaries have a reporting date of 31
December.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group from the date on
which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the date that control ceases. Inter-
company transactions, balances and unrealised gains or losses on transactions between Group entities are fully eliminated on
consolidation. Accounting policies of subsidiaries have been changed and adjustments made where necessary to ensure uniformity of
the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective
date of acquisition, or up to the effective date of disposal, as applicable.
Non-controlling interests, presented as part of equity, represent the portion of a subsidiary's profit or loss and net assets that is not held
by the Group. The Group attributes total comprehensive income or loss of subsidiaries between the owners of the parent and the non-
controlling interests based on their respective ownership interests.
Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses
under common control. The business combination will be accounted for from the date that control is obtained, whereby the fair value of
the identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to certain limited
When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent
consideration arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is not
remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability is
remeasured each reporting period to fair value, recognising any change to fair value in profit or loss, unless the change in value can be
identified as existing at acquisition date.
All transaction costs incurred in relation to business combinations, other than those associated with the issue of a financial instrument,
are recognised as expenses in profit or loss when incurred.
The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.
Goodwill
Goodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the excess of the sum of:
(i) the consideration transferred at fair value;
(ii) any non-controlling interest (determined under either fair value or proportionate interest method); and
(iii) the acquisition date fair value of any previously held equity interest;
over the acquisition date fair value of any identifiable assets acquired and liabilities assumed.
The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date fair value of any
previously held equity interest shall form the cost of the investment in the separate financial statements.
Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are
accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to
reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling
interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of
the Group.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
26
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 1: Summary of Significant Accounting Policies (Cont'd)
When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated as the difference between
(i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying
amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. All amounts previously
recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the
related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as
specified/permitted by applicable AASB Accounting Standards). The fair value of any investment retained in the former subsidiary at
the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under AASB 139: Financial
Instruments: Recognition and Measurement, when applicable, the cost on initial recognition of an investment in an associate or a joint
venture.
The amount of goodwill recognised on acquisition of each subsidiary in which the Group holds less than 100% interest will depend on
the method adopted in measuring the non-controlling interest. The Group can elect in most circumstances to measure the non-
controlling interest in the acquiree either at fair value (full goodwill method) or at the non-controlling interest's proportionate share of the
subsidiary's identifiable net assets (proportionate interest method). In such circumstances, the Group determines which method to
adopt for each acquisition and this is stated in the respective note to the financial statements disclosing the business combination.
Under the full goodwill method, the fair value of the non-controlling interest is determined using valuation techniques which make the
maximum use of market information where available.
Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments
in associates.
Goodwill is tested for impairment annually and is allocated to the Group's cash-generating units or groups of cash-generating units,
representing the lowest level at which goodwill is monitored and not larger than an operating segment. Gains and losses on the
disposal of an entity include the carrying amount of goodwill related to the entity disposed of.
(b)
Income Tax
The income tax expense (income) for the year comprises current income tax expense (income) and deferred tax expense (income).
Current income tax expense charged to profit or loss is the tax payable on taxable income for the current period. Current tax liabilities
(assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority using tax rates (and tax
laws) that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax
losses.
Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates to items that are
recognised outside profit or loss or arising from a business combination.
A deferred tax liability shall be recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises
from: (a) the initial recognition of goodwill; or (b) the initial recognition of an asset or liability in a transaction which: (i) is not a business
combination; and (ii) at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).
Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset or liability, where there
is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or
the liability is settled and their measurement also reflects the manner in which management expects to recover or settle the carrying
amount of the related asset or liability. With respect to non-depreciable items of property, plant and equipment measured at fair value
and items of investment property measured at fair value, the related deferred tax liability or deferred tax asset is measured on the basis
that the carrying amount of the asset will be recovered entirely through sale. When an investment property that is depreciable is held by
the entity in a business model whose objective is to consume substantially all of the economic benefits embodied in the property
through use over time (rather than through sale), the related deferred tax liability or deferred tax asset is measured on the basis that the
carrying amount of such property will be recovered entirely through use.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that is probably that
future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax
assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not
probable that the reversal will occur in the foreseeable future.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
27
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 1: Summary of Significant Accounting Policies (Cont'd)
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or
simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset
where: (i) a legally enforceable right of set-off exists; and (ii) the deferred tax assets and liabilities relate to income taxes levied by the
same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or
simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of
deferred tax assets or liabilities are expected to be recovered or settled.
(c)
Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending on the
requirements of the applicable accounting standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly (i.e. unforced)
transaction between independent, knowledgeable and willing market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used to determine fair value.
Adjustments to market values may be made having regard to the characteristics of the specific asset or liability. The fair values of
assets and liabilities that are not traded in an active market are determined using one or more valuation techniques. These valuation
techniques maximise, to the extent possible, the use of observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or liability (i.e. the market with the
greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the most advantageous market
available to the entity at the end of the reporting period (i.e. the market that maximises the receipts from the sale of the asset or
minimises the payments made to transfer the liability, after taking into account transaction costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant’s ability to use the asset in its highest
and best use or to sell it to another market participant that would use the asset in its highest and best use.
The fair value of liabilities and the entity’s own equity instruments (excluding those related to share-based payment arrangements) may
be valued, where there is no observable market price in relation to the transfer of such financial instruments, by reference to observable
market information where such instruments are held as assets. Where this information is not available, other valuation techniques are
adopted and, where significant, are detailed in the respective note to the financial statements.
(d)
Digital Currencies
Digital currencies are indefinite life intangible assets initially recognised at cost. The digital currencies are subsequently measured at
fair value by reference to the quote price in an active digital currency market.
Any increases or decreases in the fair value of the digital currencies are recognised through the profit and loss, similar to any gains or
losses upon the disposals of digital currencies.
(e)
Accounting for Common Control
Where the acquisition of entities that are deemed to be under common control occurs then consideration is required to determine the
accounting acquirer. A new entity formed to effect a business combination through the issue of equity interests will not be regarded as
the accounting acquirer, rather one of the combining entities that existed prior to the business combination shall be identified as the
accounting acquirer.
The pooling of interests method is adopted for business combinations under common control. Existing book values for assets and
liabilities at the date of acquisition will be recognised and fair value adjustments including new intangibles or goodwill will not be
recognised. Any premium between the fair value of consideration paid and the book value of net assets is debited to a separate
category of equity.
(f)
Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated
depreciation and impairment losses.
Plant and equipment
Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated depreciation and any accumulated
impairment. In the event the carrying amount of plant and equipment is greater than the estimated recoverable amount, the carrying
amount is written down immediately to the estimated recoverable amount and impairment losses are recognised either in profit or loss.
A formal assessment of recoverable amount is made when impairment indicators are present (refer to Note 1(h) for details of
impairment).
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount
from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the
asset's employment and subsequent disposal. The expected net cash flows have been discounted to their present values in
determining recoverable amounts.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
28
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 1: Summary of Significant Accounting Policies (Cont'd)
The cost of fixed assets constructed within the consolidated group includes the cost of materials, direct labour, borrowing costs and an
appropriate proportion of fixed and variable overheads.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. All other repairs and maintenance are recognised as expenses in profit or loss during the financial period in which they are
incurred.
Depreciation
The depreciable amount of all fixed assets including buildings and capitalised leased assets, but excluding freehold land, is depreciated
on a straight-line basis over the asset's useful life to the Group commencing from the time the asset is held ready for use. Leasehold
improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the
improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Leasehold improvements
Plant and equipment
Signages
Depreciation Rate
10 - 25%
10 - 25%
10 - 25%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its
estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are
recognised in profit or loss in the period in which they arise. Gains shall not be classified as revenue. When revalued assets are sold,
amounts included in the revaluation surplus relating to that asset are transferred to retained earnings.
(g)
Financial Instruments
Recognition and Initial Measurement
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions to the instrument.
For financial assets, this is the date that the Group commits itself to either the purchase or sale of the asset (i.e. trade date accounting
is adopted).
Financial instruments (except for trade receivables) are initially measured at fair value plus transactions costs except where the
instrument is classified ‘at fair value through profit or loss’ in which case transaction costs are expensed to profit or loss immediately.
Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are
adopted.
Classification and Subsequent Measurement
Financial instruments are subsequently measured at fair value, amortised cost using the effective interest method, or cost.
Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at initial recognition less
principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation of the difference between that
initial amount and the maturity amount calculated using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest expense in
profit or loss over the relevant period. The effective interest rate is the internal rate of return of the financial asset or liability. That is, it is
the rate that exactly discounts the estimated future cash flows through the expected life of the instrument to the net carrying amount at
initial recognition.
The Group does not designate any interests in subsidiaries, associates or joint ventures as being subject to the requirements of
Accounting Standards specifically applicable to financial instruments.
(i)
Financial assets at fair value through profit or loss
Financial assets are classified at 'fair value through profit or loss" when they are held for trading for the purpose of short-term profit
taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to
enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis
in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value
with changes in carrying amount included in profit or loss.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
29
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 1: Summary of Significant Accounting Policies (Cont'd)
(ii)
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market and are subsequently measured at amortised cost.
Gains or losses are recognised in profit or loss through the amortisation process and when the financial asset is derecognised.
(iii)
Financial Liabilities
Non-derivative financial liabilities other than financial guarantees are subsequently measured at amortised cost. Gains or losses
are recognised in profit or loss through the amortisation process and when the financial liability is derecognised.
Impairment
A financial asset (or a group of financial assets) is deemed to be impaired if, and only if, there is objective evidence of impairment as a
result of one or more events (a "loss" event) having occurred, which has an impact on the estimated future cash flows of the financial
asset(s).
In the case of available-for-sale financial assets, a significant or prolonged decline in the market value of the instrument is considered
to constitute a loss event. Impairment losses are recognised in profit or loss immediately. Also, any cumulative decline in fair value
previously recognised in other comprehensive income is reclassified intro profit or loss at this point.
In the case of financial assets carried at amortised cost, loss events may include: indications that the debtors or a group of debtors are
experiencing significant financial difficulty, default or delinquency in interest or principal payments; indications that they will enter
bankruptcy or other financial reorganisation; and changes in arrears or economic conditions that correlate with defaults.
For financial assets carried at amortised cost (including loans and receivables), a separate allowance account is used to reduce the
carrying amount of financial assets impaired by credit losses. After having taken all possible measures of recovery, if management
establishes that the carrying amount cannot be recovered by any means, at that point the written-off amounts are charged to the
allowance account or the carrying amount of impaired financial assets is reduced directly if no impairment amount was previously
recognised in the allowance account.
When the terms of financial assets that would otherwise have been past due or impaired have been renegotiated, the Group recognises
the impairment for such financial assets by taking into account the original terms as if the terms have not been renegotiated so that the
loss events that have occurred are duly considered.
(h)
Impairment of Assets
At the end of each reporting period, the company assesses whether there is any indication that an asset may be impaired. The
assessment will include the consideration of external and internal sources of information, including dividends received from
subsidiaries, associates or joint ventures deemed to be out of pre-acquisition profits. If such an indication exists, an impairment test is
carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs of
disposal and value in use, to the asset’s carrying amount. Any excess of the asset’s carrying amount over its recoverable amount is
recognised immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with another Standard (eg in
accordance with the revaluation model in AASB 116: Property, Plant and Equipment ). Any impairment loss of a revalued asset is
treated as a revaluation decrease in accordance with that other Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the entity estimates the recoverable amount of the
cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill, intangible assets with indefinite lives and intangible assets not yet available for
use.
When an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised
estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have
been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an
impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the
reversal of the impairment loss is treated as a revaluation increase.
(i)
Investments in Associates
An associate is an entity over which the company has significant influence. Significant influence is the power to participate in the
financial and operating policy decisions of the entity but is not control or joint control of those policies. Investments in associates are
accounted for in the financial statements by applying the equity method of accounting, whereby the investment is initially recognised at
cost (including transaction costs) and adjusted thereafter for the post-acquisition change in the company’s share of net assets of the
associate. In addition, the Company’s share of the profit or loss and other comprehensive income is included in the financial
statements.
The carrying amount of the investment includes, when applicable, goodwill relating to the associate. Any discount on acquisition,
whereby the Company’s share of the net fair value of the associate exceeds the cost of investment, is recognised in profit or loss in the
period in which the investment is acquired.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
30
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 1: Summary of Significant Accounting Policies (Cont'd)
Profits and losses resulting from transactions between the Company and the associate are eliminated to the extent of the Company’s
interest in the associate.
When the Company’s share of losses in an associate equals or exceeds its interest in the associate, the Company discontinues
recognising its share of further losses unless it has incurred legal or constructive obligations or made payments on behalf of the
associate. When the associate subsequently makes profits, the Company will resume recognising its share of those profits once its
share of the profits equals the share of the losses not recognised.
The requirements of AASB 128: Investments in Associates and Joint Ventures and AASB 9: Financial Instruments are applied to
determine whether it is necessary to recognise any impairment loss with respect to the Group’s investment in an associate or a joint
venture. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with
AASB 136: Impairment of Assets as a single asset by comparing its recoverable amount (higher of value in use and fair value less
costs of disposal) with its carrying amount. Any impairment loss recognised forms part of the carrying amount of the investment. Any
reversal of that impairment loss is recognised in accordance with AASB 136 to the extent that the recoverable amount of the
investment subsequently increases.
(j)
Interests in Joint Arrangements
Joint arrangements represent the contractual sharing of control between parties in a business venture where unanimous decisions
about relevant activities are required.
Separate joint venture entities providing joint venturers with an interest to net assets are classified as a joint venture and accounted for
using the equity method. Refer to Note 1(mn) for a description of the equity method of accounting.
Joint operations represent arrangements whereby joint operators maintain direct interests in each asset and exposure to each liability
of the arrangement. The company’s interests in the assets, liabilities, revenue and expenses of joint operations are included in the
respective line items of the financial statements.
Gains and losses resulting from sales to a joint operation are recognised to the extent of the other parties’ interests. When the
Company makes purchases from a joint operation, it does not recognise its share of the gains and losses from the joint arrangement
until it resells those goods/assets to a third party.
(k)
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of the Company is the currency of the primary economic environment in which that entity operates. The
financial statements are presented in Australian dollars, which is the Company’s functional currency.
Transaction and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the
transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical
cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported
at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in profit or loss, except exchange differences that
arise from net investment hedges.
Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive income to the
extent that the underlying gain or loss is recognised in other comprehensive income, otherwise the exchange difference is recognised
in the profit or loss.
The Company
The financial results and position of foreign operations whose functional currency is different from the entity’s presentation currency are
translated as follows:
—
—
—
assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
income and expenses are translated at exchange rates at the average over the year; and
all resulting exchange differences are recognised in other comprehensive income.
Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars are recognised
in other comprehensive income and included in the foreign currency translation reserve in the statement of financial position and
allocated to non-controlling interest where relevant. The cumulative amount of these differences is reclassified into profit or loss in the
period in which the operation is disposed of.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
31
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 1: Summary of Significant Accounting Policies (Cont'd)
(l)
Employee Benefits
Short-term employee benefits
Provision is made for the Company’s obligation for short-term employee benefits. Short-term employee benefits are benefits (other
than termination benefits) that are expected to be settled wholly before twelve months after the end of the annual reporting period in
which the employees render the related service, including wages, salaries and sick leave. Short-term employee benefits are measured
at the (undiscounted) amounts expected to be paid when the obligation is settled.
The company’s obligations for short-term employee benefits such as wages, salaries and sick leave are recognised as part of current
trade and other payables in the statement of financial position. The company’s obligations for employees’ annual leave and long
service leave entitlements are recognised as provisions in the statement of financial position.
Other long-term employee benefits
Provision is made for employees’ long service leave and annual leave entitlements not expected to be settled wholly within 12 months
after the end of the annual reporting period in which the employees render the related service. Other long-term employee benefits are
measured at the present value of the expected future payments to be made to employees.
The Group's obligations for long-term employee benefits are presented as non-current provisions in its statement of financial position,
except where the Group does not have any unconditional right to defer settlement for at least 12 months after the end of the reporting
period, in which case the obligations are presented as current provisions.
(m)
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that
an outflow of economic benefits will result and that outflow can be reliably measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period.
(n)
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and deposits available on demand with banks. Bank overdrafts are reporting within
short-term borrowings in current liabilities in the statement of financial position.
(o)
Revenue and Other Income
Accounting policy for revenue recognition
Revenue is recognised and measure at the fair value of the consideration received or receivable to the extent it is probable that the
economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is recognised with reference to the
completion by the Company of specific performance obligations of contracts with customers, as described below.
Revenue from contracts with customers
The Company elected to adopt the provisions of AASB 15: Revenue from Contracts with Customers with effect from 1 January 2018.
Revenue is recognised on the purchase of mobile gaming applications and licencing services to customers in an amount that reflects
the consideration to which the Company expects to be entitled in exchange for those goods or services.
All contracts with effect from 1 January 2018 (either written, verbal or implied) are identified, together with the separate performance
obligations within the contract and the transaction price is determined. Adjustments are made for the time value of money excluding
credit risk and the transaction price is allocated to the separate performance obligations on a basis of relative stand-alone selling price
of each distinct good/service. The estimation approach is taken if no distinct observable prices exists and revenue is recognised when
each performance obligation is satisfied.
Credit risk is presented separately as an expense, rather than adjusted to revenue. For goods, the performance obligation is satisfied
when the customer takes control of the goods. For services, the performance obligation is satisfied when the service has been
performed, typically for promises to transfer services to customers. For performance obligations satisfied over time, the Company
selects an appropriate measure of progress to determine how much revenue is recognised as the performance obligation is satisfied.
Mobile game applications revenue
Revenue from mobile game application sales are recognised at the time of the game application purchase.
Publishing revenue
The Company receives revenue for publishing income in relation to mobile game applications. The publishing revenue is recognised at
the time the service is provided.
Interest
Interest revenue is recognised using the effective interest method.
All revenue is stated net of the amount of goods and services tax.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
32
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 1: Summary of Significant Accounting Policies (Cont'd)
(p)
Trade and Other Receivables
Trade and other receivables include amounts due from customers for goods sold and services performed in the ordinary course of
business. Receivables expected to be collected within 12 months of the end of the reporting period are classified as current assets. All
other receivables are classified as non-current assets.
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any provision for impairment. Refer to Note 1(h) for further discussion on the determination of impairment losses.
(q)
Trade and Other Payables
Trade and other payables represent the liabilities for goods and services received by the entity that remain unpaid at the end of the
reporting period. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the
liability.
(r)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not
recoverable from the Australian Taxation Office (ATO).
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 ATO is included with other receivables or 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 ATO are presented as operating cash flows included in receipts from customers or payments to
suppliers.
(s)
Government Grants
Government grants are recognised at fair value where there is reasonable assurance that the grant will be received and all grant
conditions will be met. Grants relating to expense items are recognised as income over the periods necessary to match the grant to the
costs it is compensating. Grants relating to assets are credited to deferred income at fair value and are credited to income over the
expected useful life of the asset on a straight-line basis.
(t)
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current
financial year.
Where the company retrospectively applies an accounting policy, makes a retrospective restatement or reclassifies items in its financial
statements, an additional (third) statement of financial position as at the beginning of the preceding period in addition to the minimum
comparative financial statements is presented.
(u)
Critical Accounting Estimates and Judgements
The directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best
available current information. Estimates assume a reasonable expectation of future events and are based on current trends and
economic data, obtained both externally and within the company.
(i) Key judgements and estimates - Intellectual Property - Research and Development
In determining the development expenditures to be capitalised, the Group makes estimates and assumptions based on expected
future economic benefits generated by products that are the result of those development expenditures. Other important estimates
and assumptions in this assessment process are the distinction between R&D and the estimated useful life.
Development costs associated with intangible assets are only capitalised by the Group when it can demonstrate the technical
feasibility of completing the asset so that the asset will be available for use or sale, how the asset will generate future economic
benefits and the ability to measure reliably the expenditure attributable to the intangible asset during its development.
Development costs in respect to software are internally generated, and have a finite useful life. The amortisation method is line
over the period of the expected benefit, being 5 years. Impairment testing is undertaken when impairment indicators exist.
(ii) Key Estimate - Taxation
Refer to Note 4 - Income Tax
(iii) Key judgements and estimates - Impairment
The Group assess impairment at each reporting date by evaluating conditions specific to the Group that may lead to impairment of
assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations
performed in assessing recoverable amounts incorporate a number of key estimates. There is also judgement applied in
determining recoverability of asset.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
33
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 1: Summary of Significant Accounting Policies (Cont'd)
(iv) Key judgements and estimates - Share-based payments
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 an internal valuation using a Black-Scholes option pricing
model, using the assumptions detailed in Note 21 - Share-based payments.
(v)
New Accounting Standards for Application in Future Periods
Accounting Standards issued by the AASB that are not yet mandatorily applicable to the Group, together with an assessment of the
potential impact of such pronouncements on the Group when adopted in future periods, are discussed below:
- AASB 16: Leases (applicable to annual reporting period beginning on or after 1 January 2019)
The Group has chosen not to early-adopt AASB 16. However, the Group has conducted a high-level assessment of the impact of
this new Standard, as follows.
A core change under AASB 16: Leases is that most leases will be recognised on the balance sheet by lessees, as the new
Standard does not differentiate between operating and finance leases.
An asset and a financial liability are recognised in accordance with this new Standard. There are, however, two exceptions
allowed. These are short-term and low-value leases.
(w)
Going Concern Note
The financial report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and
the realisation of assets and the settlement of liabilities in the ordinary course of business.
The Company incurred a loss for the year after tax of $3,445,405 (2017: Loss of $3,113,914) and net cash outflows from operating
activities of $124,149 (2017 Outflows: $613,562)
During the 2018 financial year, the entity completed the acquisition of a portfolio of mobile games from Animoca Brands Limited
("AB1"). As at the date of this report, a cash payment of AUD $450,000 is due to AB1, representing the remainder of the cash
consideration.
The ability of the Company to continue as a going concern is principally dependent upon the ability of the Company to secure funds by
raising capital from equity markets, increasing cashflow from existing businesses and managing cashflow in line with available funds.
These conditions indicates uncertainty that may cast doubt about the ability of the Company to continue as a going concern. In the
event the above matters are not achieved, the Company will be required to raise funds for working capital from debt or equity sources.
The directors have prepared a cash flow forecast, which indicates that the Company will have sufficient cash flows to meet all
commitments and working capital requirements for the 12 month period from the date of signing this financial report.
Based on the cash flow forecasts and other factors to above, the directors are satisfied that the going concern basis or preparation is
appropriate. In particular, given the Company's history of raising capital to date, the directors are confident of the Company's ability to
raise additional funds as and when they are required.
Should the Company be unable to continue as a going concern, it may be required to realise its assets and extinguish its liabilities other
than in the normal course of business and at amounts different to those stated in the financial statements. The financial statements do
not include any adjustments relating to the recoverability and classification of asset carrying amounts or to the amount and
classification of liabilities that might result should the Company be unable to continue as a going concern and meet its debts as and
when they fall due.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
34
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 2
Parent Information
The following information has been extracted from the books and records of the parent and has been prepared in accordance with
Australian Accounting Standards.
STATEMENT OF FINANCIAL POSITION
ASSETS
Current Assets
Non-current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Non-current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued Capital
Retained earnings
Reserves
TOTAL EQUITY
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Profit/(Loss) for the year
Other comprehensive income for the year
Total comprehensive income
2018
$
2017
$
89,458
3,718,136
3,807,594
368,117
3,471,914
3,840,031
841,622
-
841,622
93,491
(46,620)
46,871
2,965,972
3,793,160
29,201,668
(26,693,153)
457,457
2,965,972
27,056,444
(24,149,264)
885,980
3,793,160
(2,543,889)
-
(2,543,889)
(23,826,435)
-
(23,826,435)
On consolidation of the Group, iCandy Interactive Limited's investment cost in Appxplore (iCandy) Limited - formerly known as iCandy
Ventures Limited ($15,000,000) and iCandy Digital Pte Ltd ($5,000,000) has been allocated to equity. Refer to Note 25(b) for a detailed
explanation on the adoption of this accounting policy.
Note 3
Revenue and Other Income
The Group has recognised the following amounts relating to revenue in the statement of profit or loss.
(a) Revenue from continuing operations
Sales revenue
- Sale of mobile game applications
- Services income
- Publishing income
(b)
Other income
-
-
-
-
interest received
Unrealised foreign exchange gain/(loss)
foreign exchange gain/(loss)
other income
Group
2018
$
2017
$
2,318,224
1,656,454
106,894
390,586
-
-
2,815,704
1,656,454
62,171
24,450
-
73,804
160,425
60,323
(50,370)
(29,330)
8,240
(11,137)
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
35
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 4
Tax Expense
(a)
The components of tax (expense) income
comprise:
Current tax
Deferred tax
(b)
The prima facie tax on profit from ordinary activities before income tax is
reconciled to income tax as follows:
Prima facie tax payable on profit from ordinary activities before income tax at
27.5% (2017: 27.5%)
—
consolidated group
Add:
Tax effect of:
—
—
current year tax loss not brought into account
income tax payable by foreign subsidiary
write back of deferred tax liabilities brought into account
—
Income tax attributable to entity
Note
17
Group
2018
$
2017
$
86,618
(51,742)
34,876
250,988
(1,961)
249,027
(957,077)
(924,809)
957,077
23,556
(58,432)
(34,876)
924,809
(3,969)
(245,058)
(249,027)
(d) Deferred tax assets not brought into account
Deferred tax assets not brought to account, the benefits of which will only be realised if it is probable that taxable profit will be available
against which the unutilised tax losses can be utilised.
Temporary differences
Tax Losses:
- Operating losses
(d) Deferred tax liabilities
Deferred tax liabilities brought into account on purchase of Inzen Studio Pte Ltd
Deferred tax liabilities brought into account by foreign subsidiary
1,209,662
678,564
-
8,816
8,816
58,432
1,961
60,393
Note 5
Key Management Personnel Compensation
Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration paid or payable to each member of the
Group’s key management personnel (KMP) for the year ended 31 December 2018.
The totals of remuneration paid to KMP of the company and the Group during the year are as follows:
Short-term employee benefits
Share-based payments
Total KMP compensation
Short-term employee benefits
2018
$
145,071
-
145,071
2017
$
167,762
-
167,762
–
these amounts include fees and benefits paid to the non-executive chair and non-executive directors as well as all salary, paid
leave benefits, fringe benefits and cash bonuses awarded to executive directors and other key management personnel.
Share-based payments
–
these amounts represent the expense related to the participation of KMP in equity-settled benefit schemes as measured by the fair
value of the options, rights and shares granted on grant date.
Further information in relation to KMP remuneration can be found in the Remuneration Report.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
36
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 6
Auditor’s Remuneration
Remuneration of the auditor for:
—
auditing or reviewing the financial statements
—
auditing or reviewing the financial report of subsidiaries
Note 7
Earnings per Share
(a)
Reconciliation of earnings to profit or loss
Loss
Loss used to calculate basic and dilutive EPS
(b)
Weighted average number of ordinary shares outstanding during the year
used in calculating basic EPS
Weighted average number of ordinary shares outstanding during the year
used in calculating dilutive EPS
Note 8
Cash and Cash Equivalents
Cash at bank and on hand
Reconciliation of cash
Cash and cash equivalents at the end of the financial year as shown in the
statement of cash flows is reconciled to items in the statement of financial
position as follows:
Cash and cash equivalents
Group
2018
$
2017
$
35,549
25,045
60,594
30,701
19,495
50,196
Group
2018
$
2017
$
(3,445,405)
(3,113,914)
(3,445,405)
(3,113,914)
No.
No.
291,469,218 253,761,838
291,469,218 253,761,838
Note
Group
2018
$
359,888
359,888
2017
$
142,241
142,241
24
359,888
359,888
142,241
142,241
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
37
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 9
Trade and Other Receivables
CURRENT
Trade receivables
Provision for impairment
Other receivables
GST receivables
Total current trade and other receivables
Group
2018
$
2017
$
136,169
165,854
(2,888)
-
133,281
165,854
18,973
7,523
96,835
24,567
159,777
287,256
The Group applies the simplified approach to providing for expected credit losses prescribed by AASB 9, which permits the use of the
lifetime expected loss provision for all trade receivables. To measure the expected credit losses, trade receivables have been grouped
based on shared credit risk characteristics and the days past due. The loss allowance provision as at 31 December 2018 is determined as
follows; the expected credit losses also incorporate forward-looking information.
There has been no impact with the application of AASB 9: Financial Instruments
The "amounts written off" are all due to customers declaring bankruptcy, or term receivables that have now become unrecoverable.
2018
Expected loss rate
Gross carrying amount
Loss allowing provision
2017
Expected loss rate
Gross carrying amount
Loss allowing provision
Credit risk
Current
>30 days
past due
>60 days
past due
>90 days
past due
Total
$
0%
159,777
159,777
0%
287,256
-
287,256
$
$
$
$
0%
0%
0%
-
0%
-
-
-
-
0%
-
-
-
159,777
-
-
159,777
0%
-
-
-
287,256
-
287,256
The Group has no significant concentration of credit risk with respect to any single counter party or group of counter parties other than those
receivables specifically provided for and mentioned within Note 9. The class of assets described as Trade and Other Receivables is
considered to be the main source of credit risk related to the Group.
On a geographic basis, the Group has significant credit risk exposures in Malaysia given the substantial operations in that region. The
Group's exposure to credit risk for receivables at the end of the reporting period in those regions are as follows:
AUD
Australia
Singapore
Malaysia
Group
2018
$
4,314
133,282
22,181
159,777
2017
$
21,792
88,131
177,333
287,256
The Group always measures the loss allowance for trade receivables at an amount equal to lifetime expected credit loss. The expected
credit losses on trade receivables are estimated using a provision matrix by reference to past default experience of the debtor and an
analysis of the debtor's current financial position, adjusted for factors that are specific to the debtors, general economic conditions of the
industry in which the debtors operate and an assessment of both the current as well as the forecast direction of conditions at the reporting
date.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
38
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 9: Trade and Other Receivables (Cont'd)
There has been no change in the estimation techniques or significant assumptions made during the current reporting period.
The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no
realistic prospect of recovery, eg when the debtor has been placed under liquidation or has entered into bankruptcy proceedings, or when
the trade receivables are over two years past due, whichever occurs earlier. None of the trade receivables that have been written off is
subject to enforcement activities.
(a) Collateral Held as Security
No collateral was held as security at balance date or date the date of this report.
Group
2018
$
2017
$
159,777
-
159,777
287,256
-
287,256
Note
24
Group
2018
$
2017
$
1,426,823
(5,811)
1,421,012
1,328,595
50,428
1,379,023
1,421,012
-
1,421,012
1,379,023
-
1,379,023
(b) Financial Assets Classified as Loans and Receivables
Trade and other Receivables
— Total current
— Total non-current
Total financial assets classified as loans and receivables
Note 10
Other Financial Assets
CURRENT
Amount receivable from:
other related parties
others
-
-
Total current assets
Total Other Financial Assets
Current
Non-Current
Terms of Receivables:
All receivables are at call.
There are no securities attached.
No interest are charged on receivables.
Note 11
Interests in Subsidiaries
(a)
Information about Principal Subsidiaries
The subsidiaries listed below have share capital consisting solely of ordinary shares or ordinary units which are held directly by the
Group. The proportion of ownership interests held equals the voting rights held by Group. Each subsidiary’s principal place of business
is also its country of incorporation.
Name of subsidiary
iCandy Digital Pte Ltd
Appxplore (iCandy) Limited (formerly known as iCandy Ventures Limited)
Appxplore (iCandy) Sdn Bhd (formerly known as Appxplore Sdn Bhd - 100%
owned by Appxplore (iCandy) Limited)
Inzen (iCandy) Pte Ltd (formerly known as Inzen Studio Pte Ltd)
iCandy Play Limited
iCandy Games Limited
Principal place of business
Singapore
British Virgin Island
Malaysia
Singapore
British Virgin Island
British Virgin Island
Ownership interest held by
the Group
2018
(%)
100
100
100
100
100
100
2017
(%)
100
100
100
100
-
-
Subsidiary financial statements used in the preparation of these consolidated financial statements have also been prepared as at the
same reporting date as the Group’s financial statements.
(b) Significant Restrictions
There are no significant restrictions over the Group's ability to access or use assets and settle liabilities, of the Group.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
39
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 12
Property, Plant and Equipment
PLANT AND EQUIPMENT
Plant and equipment:
At cost
Accumulated depreciation
Leasehold improvements
At cost
Accumulated depreciation
Signage
At cost
Accumulated depreciation
Group
2018
$
2017
$
126,833
(55,134)
71,699
62,908
(20,723)
42,185
1,746
(413)
1,333
87,836
(34,196)
53,640
51,928
(8,256)
43,672
849
(251)
598
Total property, plant and equipment
115,217
97,910
(a)
Movements in Carrying Amounts
Movements in carrying amounts for each class of property, plant and equipment between the beginning and the end of the current
financial year.
Consolidated Group:
Balance at 1 January 2017
Additions
Depreciation expense
Balance at 31 December 2017
Additions
Depreciation expense
Foreign exchange movement
Balance at 31 December 2018
Plant and
equipment
$
14,039
48,202
(8,601)
53,640
30,334
(17,086)
4,811
71,699
Leasehold
Improvement
s
$
6,107
41,601
(4,036)
43,672
6,363
(11,946)
4,096
42,185
Signage
Total
$
$
681
-
(83)
598
856
(146)
25
20,827
89,803
(12,720)
97,910
37,553
(29,178)
8,932
1,333
115,217
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
40
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 13
Intangible Assets
Goodwill
Cost
Accumulated impairment losses
Net carrying amount
Games Portfolio
Cost
Accumulated impairment losses
Net carrying amount
Computer software:
Cost
Accumulated amortisation and impairment losses
Net carrying amount
Research and development
Cost
Accumulated amortisation and impairment losses
Net carrying amount
Cryptocurrency
Cost
Accumulated amortisation and impairment losses
Net carrying amount
Total intangible assets
Consolidated Group:
Group
2018
$
2017
$
-
-
-
2,600,000
(1,150,000)
1,450,000
305,300
(305,300)
-
-
-
-
1,940,131
1,759,275
(987,597)
(554,499)
952,534
1,204,776
2,038,175
2,014,213
(1,892,372)
(1,505,860)
145,803
508,353
1,082,827
(998,872)
83,955
-
-
-
2,632,292
1,713,129
Year ended 31 December 2017
Balance at the beginning of the year
Additions
Acquisitions through business combinations
Amortisation charge
Impairment losses
-
-
305,300
-
(305,300)
Year ended 31 December 2018
Balance at the beginning of the year
Reclassification from prepayments
Additions
Amortisation charge
Impairment losses
Movement in fair value
Movement in foreign currency
Closing value at 31 December 2018
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,600,000
(846,667)
-
-
1,450,000
Goodwill
Games
Portfolio
Computer
Software
$
$
$
Research
and
Development
$
Cryptocurrency
Total
$
-
-
-
-
-
-
1,283,606
466,583
2,090,536
(639,025)
(1,488,571)
1,713,129
1,143,355
140,251
412,920
53,663
-
1,785,236
(351,499)
(287,526)
-
(1,183,271)
1,204,776
508,353
1,204,776
508,353
-
1,713,129
-
-
-
-
610,781
610,781
472,046
3,072,046
(303,333)
(388,026)
(380,169)
-
-
-
-
-
-
(1,071,528)
(846,667)
(1,004,304)
(1,004,304)
135,784
952,534
17,619
145,803
5,432
158,835
83,955
2,632,292
On 9 March 2018, Appxplore (iCandy) Limited received 3,000,000 NOX tokens from Nitro Interactive Limited for publishing services
rendered.
Intangible assets, other than goodwill, have finite useful lives. The current amortisation charges for intangible assets are included under
depreciation and amortisation expense per the statement of profit or loss.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
41
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 13: Intangible Assets (Cont'd)
Cryptocurrencies are valued at fair value at reporting date. Management has selected the coinmarketcap exchange as its exchange to
gather information on determining the fair value of the cryptocurrency.
Games Portfolio
The recoverable amount of this games portfolio has been determined using the value in use method based on the net present value of
project earnings before interest, tax and depreciation using cash flow projections based on financial budgets approved by senior
management covering 1 year forecast. A growth rate of 3% was used to extrapolate management's cash flow forecast for a further 4 years.
The cash flow projections were prepared based on past experience and contracts that are in place. A discount rate of 11% has been
applied.
Note 14
Other Assets
CURRENT
Prepayments
NON-CURRENT
Prepayment on acquisition of business*
Prepayment on acquisition of games portfolio**
Prepayment on cryptocurrency***
Total Other Assets
Current
Non-Current
Group
2018
$
2017
$
8,070
8,070
18,501
18,501
323,553
250,000
610,781
1,184,334
-
-
-
8,070
-
8,070
18,501
1,184,334
1,202,835
* Represents deposit paid of SGD 316,600 for acquisition of PT Maximum that has been impaired in the current year.
** As announced on 15 August 2018, the process of taking over of Animoca's game portfolio and integrating it into the Company's existing
platform is progressing smoothly and well. The Company is entitled to the revenue and costs incurred in maintaining the portfolio. As such,
the prepayment has been reallocated as an intangible during the financial year. Refer to Note 13 for further information.
*** During the financial year, the Group was issued with cryptocurrency it had prepaid for. This has been classified as an intangible. Refer to
Note 7 for further information.
Note 15
Trade and Other Payables
CURRENT
Unsecured liabilities
Trade payables
Sundry payables and accrued expenses
(a) Financial liabilities at amortised cost classified as trade and other payables
Trade and other payables
— Total current
— Total non-current
Financial liabilities as trade and other payables
Group
2018
$
2017
$
121,219
808,603
929,822
58,854
75,285
134,139
Note
Group
2018
$
2017
$
929,822
-
929,822
134,139
-
134,139
24
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
42
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 16
Other Financial Liabilities
CURRENT
Amounts payable to:
- other related parties
Total Other Financial Liabilities
Current
Non-Current
Terms of payables:
All payables are at call
There are no securities attached
No interest payable on amounts owing.
Note 17
Tax
CURRENT
Income tax payable
NON-CURRENT
Consolidated Group
Deferred tax liabilities
Intangible assets
Other
Balance at 31 December 2017
Consolidated Group
Deferred tax liabilities
Intangible assets
Other
Balance at 31 December 2018
Group
2018
$
2017
$
790,118
790,118
832,696
832,696
790,118
832,696
-
-
790,118
832,696
Group
2018
$
2017
$
1,528
1,528
2,006
2,006
Opening
Balance
Recognised
in Profit and
Loss
Charged
directly to
Equity
Changes in
Tax Rates
Exchange
Differences
Closing
Balance
$
$
-
1,689
1,689
58,432
229
58,661
$
$
58,432
1,961
60,393
(58,432)
6,690
(51,742)
$
$
-
-
-
-
-
-
$
$
-
-
-
-
-
-
$
$
-
43
43
-
165
165
$
58,432
1,961
60,393
$
-
8,816
8,816
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
43
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 18
Issued Capital
309,007,937 fully paid ordinary shares (2017: 277,192,746 fully paid ordinary shares)
The Group has authorised share capital amounting to 309,007,937 fully paid ordinary shares.
Group
2018
$
29,201,668
2017
$
27,056,445
29,201,668
27,056,445
(a)
Ordinary Shares
At the beginning of the reporting period
Shares issued during the year
Transaction costs
At the end of the reporting period
Group
2018
No.
2018
$
2017
No.
2017
$
277,192,746
27,056,445 229,283,334
24,159,330
31,815,191
2,145,223
47,909,412
2,977,065
-
-
-
(79,950)
309,007,937
29,201,668 277,192,746
27,056,445
On 11 January 2018, 100 fully paid ordinary shares were issued under the Cleansing offer under prospectus dated 10 January 2018. A
total of $16 was raised, net of capital raising costs.
On 28 June 2018, 25,000,000 fully paid ordinary shares were issued as initial consideration shares for the acquisition of portfolio of 318
mobile casual games from Animoca Brands Limited.
On 4 September 2018, 3,300,000 fully paid ordinary shares were issued as Tranche 1 subscription shares in relation to strategic
investment by eSports.com Group AG as announced on the 2 August 2018. A total of $264,000 was raised, net of capital raising costs.
On 7 November 2018, 2,583,249 fully paid ordinary shares were issued as partial Tranche 2 subscription shares in relation to strategic
investment by eSports.com Group AB. A total of $206,660 was raised, net of capital raising costs.
On 12 December 2018, 931,842 fully paid ordinary shares were issued as remaining tranche 2 subscription shares and partial Tranche
3 subscriptions shares in relation to strategic investment by eSports.com Group AB. A total of $74,547 was raised, net of capital raising
costs.
(b)
Options
There were 30,533,333 listed options on issue for the financial year ended 31 December 2018. The following reconciles with the
outstanding listed options to subscribe for fully paid ordinary shares in the Company at the beginning and end of the financial year.
Balance at beginning of the year
Granted during the financial year
Expired during the financial year
Released from escrow
Balance and Exercisable at end of the year
Group
2018
2017
No.
27,716,666
-
-
2,816,667
30,533,333
No.
27,716,666
-
-
-
27,716,666
The following reconciles with the outstanding unlisted options to subscribe for fully paid ordinary shares in the Company at the
beginning and end of the financial year.
Balance at beginning of the year
Granted during the financial year
Expired during the financial year
Released from escrow
Balance and Exercisable at end of the year
Group
2018
No.
33,316,667
10,000,000
(10,000,000)
(2,816,667)
30,500,000
2017
No.
2,816,667
30,500,000
-
-
33,316,667
10,000,000 unlisted options expired on 9 October 2019. The options had an exercise price of $0.10.
A total of 10,000,000 unlisted options were issued to brokers in consideration for services rendered for investor relations. Options have
an exercise price of $0.05 and expiry date of 26 November 2020. Refer to Note 21: Share based payments for further information
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
44
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 18: Issued Capital (Cont'd)
(c) Capital Management
Management controls the capital of the Group in order to maintain a sustainable debt to equity ratio, generate long-term shareholder
value and ensure that the Group can fund its operations and continue as a going concern.
The Group’s debt and capital include ordinary share capital and financial liabilities, supported by financial assets.
The Group is not subject to any externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group's financial risks and adjusting its capital structure in
response to changes in these risks and in the market. These responses include the management of debt levels, distributions to
shareholders and share issues.
Total borrowings
Less cash and cash equivalents
Net debt
Total equity
Total capital
Gearing ratio
Note 19
Operating Segments
General Information
Identification of reportable segments
Note
16
8
Group
2018
$
2017
$
790,118
832,696
(359,888)
(142,241)
430,230
690,455
2,965,972
3,793,160
3,396,202
4,483,615
13%
15%
The Group has identified its operating segments based on the internal reports that are reviewed and used by the board of directors (chief
operating decision makers) in assessing performance and in determining the allocation of resources.
The Group is managed primarily on the basis of product category and service offerings as the diversification of the Group's operations
inherently have notably different risk profiles and performance assessment criteria. Operating segments are therefore determined on the
same basis.
Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar
economic characteristics and are also similar with respect to the following:
—
the products sold and/or services provided by the segment
Types of products and services by segment
(i)
Development and sale of digital media (except games)
The Group is engaged in the development of software for interactive digital media (except games).
(ii)
Design and development of intellectual properties for software applications and games
The Group is also engaged in the design and development of intellectual properties for software applications and games.
Basis of accounting for purposes of reporting by operating segments
(a)
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors, being the chief operating decision makers with respect to
operating segments, are determined in accordance with accounting policies that are consistent with those adopted in the annual
financial statements of the Group.
(b)
Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of the economic
value from the asset. In most instances, segment assets are clearly identifiable on the basis of their nature and physical location.
(c)
Segment liabilities
Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of the
segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and are not allocated. Segment
liabilities include trade and other payables and certain direct borrowings.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
45
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 19: Operating Segments (Cont'd)
(d)
Unallocated items
The following items of revenue, expense, assets and liabilities are not allocated to operating segments as they are not considered part
of the core operations of any segment:
• Impairment of assets and other non-recurring items of revenue or expense
• Income tax expense
• Current tax liabilities
• Other financial liabilities
• Intangible assets
(e)
Segment information
(i) Segment performance
31 December 2018
REVENUE
External sales
Total segment revenue
Reconciliation of segment revenue to group revenue
Total group revenue
Development
of digital
media
Development
of Intellectual
properties
All Other
Segments
Total
$
$
$
$
9,264
2,804,032
2,408
2,815,704
9,264
2,804,032
2,408
2,815,704
2,815,704
Segment result from continuing operations before tax
(635,565)
263,717
(2,491,918)
(2,863,766)
Reconciliation of segment result to group net profit/loss before tax
Intersegment elimination
loss after tax from continuing operations
31 December 2017
REVENUE
External sales
Total segment revenue
Reconciliation of segment revenue to group revenue
Total group revenue
Development
of digital
media
Development
of Intellectual
properties
All Other
Segments
(581,639)
(3,445,405)
Total
$
$
$
$
-
-
1,656,454
1,656,454
-
-
1,656,454
1,656,454
1,656,454
Segment result from continuing operations before tax
(739,054)
355,353
(1,172,519)
(1,556,220)
Reconciliation of segment result to group net profit/loss before tax
Intersegment elimination
loss after tax from continuing operations
(ii) Segment assets
31 December 2018
Segment assets
Segment assets include:
—
Non-current assets (other than financial assets and
deferred tax)
Reconciliation of segment assets to group assets
Intersegment eliminations
Total group assets
(1,557,694)
(3,113,914)
Development
of digital
media
$
Development
of Intellectual
properties
$
All Other
Segments
Total
$
$
968,558
3,638,239
21,734,029
26,340,826
953,041
1,710,513
-
2,663,554
(21,644,570)
4,696,256
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
46
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 19: Operating Segments (Cont'd)
31 December 2017
Segment assets
Segment assets include:
—
Non-current assets (other than financial assets and
deferred tax)
Reconciliation of segment assets to group assets
Intersegment eliminations
Total group assets
(iii) Segment liabilities
31 December 2018
Segment liabilities
Reconciliation of segment liabilities to group liabilities
Intersegment eliminations
Total group liabilities
31 December 2017
Segment liabilities
Reconciliation of segment liabilities to group liabilities
Intersegment eliminations
Total group liabilities
(iv) Revenue by geographical region
Development
of digital
media
$
Development
of Intellectual
properties
$
All Other
Segments
Total
$
$
1,627,611
3,241,995
26,646,985
31,516,591
1,623,921
2,915,803
21,896,758
26,436,482
(26,694,197)
4,822,394
Development
of digital
media
$
Development
of Intellectual
properties
$
All Other
Segments
Total
$
$
483,235
298,862
948,187
1,730,284
Development
of digital
media
$
Development
of Intellectual
properties
$
-
1,730,284
Total
All Other
Segments
$
$
3,667,538
2,139,952
199,909
6,007,399
(4,978,165)
1,029,234
Revenue, including revenue from discontinued operations, attributable to external customers is disclosed below, based on the location
of the external customer:
Australia
Singapore
Malaysia
Total revenue
(v) Assets by geographical region
The location of segment assets by geographical location of the assets is disclosed below:
Australia
Singapore
Malaysia
Total Assets
31
December
2018
$
699,633
42,499
2,073,572
2,815,704
31
December
2017
$
-
-
1,656,454
1,656,454
31
December
2018
$
1,539,459
984,432
2,172,365
4,696,256
31
December
2017
$
370,310
1,627,611
2,824,473
4,822,394
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
47
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 20
Cash Flow Information
(a)
Reconciliation of Cash Flows from Operating Activities with Profit after
Income Tax
Profit after income tax
Non-cash flows in profit
Depreciation, amortisation and impairment
Unrealised movement in fair value of intangibles
Provision for doubtful debts
Options issued for services
Unrealised foreign currency gain
Interest revenue
Changes in assets and liabilities, net of the effects of purchase and disposal
of subsidiaries:
(Increase)/decrease in trade and term receivables
(Increase)/decrease in prepayments
Increase/(decrease) in trade payables and accruals
Increase/(decrease) in income taxes payable
Increase/(decrease) in deferred taxes payable
Cash flows from operating activities
Note 21
Share-based Payments
The aggregate share-based payments for the financial year are set out below:
Group
2018
$
2017
$
(3,445,405)
(3,113,914)
2,244,168
2,140,315
1,004,304
2,759
-
-
457,457
885,980
(666,120)
(62,001)
59,606
(60,324)
127,479
10,431
254,834
(478)
(51,577)
(124,149)
(82,686)
(18,501)
(170,296)
(8,956)
(244,786)
(613,562)
Outstanding during the year
Granted
Granted
Exercised
Released from escrow
Expired
Outstanding and exercisable at year-end
2018
2017
Number
Weighted
average
exercise
price
$
33,316,667
10,000,000
0.050
-
-
(2,816,667)
(10,000,000)
30,500,000
-
-
-
-
Number
2,816,667
20,500,000
10,000,000
-
-
-
33,316,667
Weighted
average
exercise
price
$
0.100
0.065
-
-
-
The following share-based payment arrangements were in existence during the current reporting period:
Number
Grant Date
Expiry Date
Exercise
Price
Fair value at
grant date
$
$
(i) Options granted
10,000,000
26 Nov 2018 26 Nov 2020
5 cents
0.0409
Options were priced using the Black-Scholes model. Where relevant, the expected life used in the model has been adjusted based on
management's best estimate of the effects of non-transferability of exercise restrictions. Expected volatility is based on the historical share
price volatility of the Company over the reporting period.
Number
Share price
at grant date
Exercise
Price
Expected volatility Option life
Risk-free
interest rate
10,000,000
0.067
0.05
124%
2 years
2.02%
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
48
For personal use only
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 22
Events After the Reporting Period
Other than the following, the directors are not aware of any significant events since the end of the reporting period.
On 2 January 2019, the Company announced that all of the conditions precedent to the Share Purchase Agreement of PT Joyseed Berbagi
Sukses had been fulfilled, and hence the agreement had become unconditional.
In addition, due to limitations of foreign ownership rules in Indonesia, the Company and the Vendors had entered into a supplemental
agreement to reduce the acquisition of Joyseed from 70% to 67%. The consideration was proportionately adjusted to AUD 335,000
(previously AUD 350,000)
The consideration is to be satisfied by the issue of iCandy Shares in 8 Tranches on a quarterly basis.
On 4 January 2019, the acquisition of PT Joyseed Berbagi Sukses was completed with the issuance of 326,389 fully paid ordinary shares at
a nominated value of $0.09 per share. (AUD 29,375) The shares had been issued as Tranche 1 settlement of the acquisition.
On 5 March 2019, the Company announced it had entered into a binding term sheet with UK based Xcademy Limited, which is building and
planning to launch a mobile first online video influencer training and monetisation platform.
As announced, subject to the satisfaction of all conditions precedent under the agreement, the Company intends to invest up to USD
$200,000 in cash consideration and USD $100,000 in digital advertising into Xcademy in return for 20% of the enlarged share capital of
Xcademy. At the date of this report, the transaction has not been finalised.
On 21 March 2019, the Company announced it had entered into a Global Collaboration and Distribution Agreement with ASX-listed Emerge
Gaming Limited ("EM1").
The Agreement provides for the joint building and operation of mobile games focused on EM1's eSports platform which has been launched
in various major geographical markets in collaboration with telcos and other major consumer businesses.
The key terms of the Agreement include:
-
-
-
-
-
Collaboration purpose: The purpose of the collaboration is to license and integrated select iCandy's game content onto EM1's Arcade X
Platform to develop mutual beneficial business in the mobile esports area.
Grant of Licence by EM1: EM1 grants to iCandy a non-exclusive license to use EM1's Arcade X technology and platform in territories.
Grant of Licence by iCandy: iCandy grants to EM1 a non-exclusive license to use select games from its game portfolio in the
Territories: Australia, New Zealand, Latin America, India, Middle East and Africa
Revenue Share: iCandy and EM1 are to share the net revenue from this collaboration on a 50:50 basis, after deducting all relevant and
reasonable costs from both parties.
Note 23
Related Party Transactions
Related Parties
(a)
The Group's main related parties are as follows:
i.
Entities exercising control over the Group:
The ultimate parent entity that exercises control over the Group is Fatfish Blockchain Limited, formerly known as Fatfish Internet Group
Limited, which is incorporated in Australia.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
49
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 23: Related Party Transactions (Cont'd)
ii.
Key Management Personnel:
Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly,
including any director (whether executive or otherwise) of that entity are considered key management personnel.
For details of disclosures relating to key management personnel, refer to Note 5.
(b)
Transactions with related parties:
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other
parties unless otherwise stated.
The following transactions occurred with related parties:
i.
KMP related entities
-
-
-
-
-
-
Directors' fees/wages paid to Kin Wai Lau
Directors' fees paid to Philip Lord
Directors' fees paid to Robert Kolodziej
Directors' fees paid to Marcus Ungar
Directors' fees paid to Masahiko Honma
Directors' fees and company secretarial fees paid to DHL Corporate
Advisory, of which Mr Donald Low is a director and shareholder
(c)
Amounts payable to and receivable from related parties
Trade and Other Receivables
i.
Loans Payable to Ultimate Parent Entity - Fatfish Blockchain Limited
Beginning of the year
Loans advanced
End of the year
ii.
Loan payable to Immediate Parent Entity - Fatfish Internet Pte Ltd
Beginning of the year
Loans advanced
Loan repayment made
Foreign currency movement
End of the year
iii.
Loans to Other Related Parties
Beginning of the year
Loans advanced
Loan repayment received
Foreign currency movement
End of the year
iv.
Loans receivable from Other Related Parties
Beginning of the year
Loans advanced
Loan repayment received
Foreign currency movement
End of the year
Group
2018
$
2017
$
24,907
84,164
12,000
18,000
-
6,000
23,024
108,738
12,000
-
-
24,000
145,071
167,762
Group
2018
$
2017
$
106,418
106,418
-
-
106,418
106,418
439,991
425,548
4,030
12,769
(100,750)
36,240
(893)
2,567
379,511
439,991
252,906
-
-
-
83,608
168,081
-
1,217
252,906
252,906
1,251,498
1,262,892
-
14,243
(100,000)
106,358
-
(25,637)
1,257,856
1,251,498
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
50
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 23: Related Party Transactions (Cont'd)
v.
Loans receivable from Immediate Parent Entity - Fatfish Internet Pte Ltd
Beginning of the year
Loans advanced
End of the year
93,552
-
93,552
43,167
50,385
93,552
(d)
Other transactions and balances with Key Management Personnel:
There were no other transactions and balances during the reporting period. In 2017, Mr Kin Wai Lau had loaned Appxplore (iCandy)
Limited, formerly known as iCandy Ventures Limited AUD $207,555 (SGD $200,000).
Note 24
Financial Risk Management
The Group’s financial instruments consist mainly of deposits with banks, local money market instruments, short-term investments, accounts
receivable and payable and loans to and from subsidiaries
The totals for each category of financial instruments, measured in accordance with AASB 139: Financial Instruments: Recognition and
Measurement as detailed in the accounting policies to these financial statements, are as follows:
Financial Assets
Cash and cash equivalents
Loans and receivables
Other financial assets
Total Financial Assets
Financial Liabilities
Financial liabilities at amortised cost
Trade and other payables
Other financial liabilities
Total Financial Liabilities
Financial Risk Management Policies
Note
8
9
10
15
16
Group
2018
$
2017
$
359,888
159,777
142,241
287,256
1,421,013
1,379,023
1,940,678
1,808,520
929,822
790,118
1,719,940
134,139
832,696
966,835
The directors are responsible for iCandy Interactive Limited's risk management strategy and management is responsible for implementing
the directors' strategy. A risk management program focuses on the unpredictability of finance markets and seeks to minimise potential
adverse effects on financial performance. iCandy Interactive Limited uses different methods to measure different types of risk to which it is
exposed. These methods include sensitivity analysis in the case on interest rate and market risk. iCandy Interactive Limited does not use
derivatives.
The consolidated entity's financial instruments consist of deposits with banks and accounts receivables and payables. The main purpose of
non-derivative financial instruments is to raise finance for group operations.
Specific Financial Risk Exposures and Management
The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of interest
rate risk and foreign currency risk.
a. Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations
that could lead to a financial loss to the Group.
The Group does not have any significant risk exposure to any single counterparty or any group of counterparties having similar
characteristics. The credit risk on liquid funds and derivative financial instruments is limited as the counterparties are banks with high
credit ratings assigned by international credit rating agencies.
The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represent the Group's
maximum exposure to credit risk.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
51
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 24: Financial Risk Management (Cont'd)
b.
Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations
related to financial liabilities. The Group manages this risk through the following mechanisms:
• preparing forward-looking cash flow analyses in relation to its operating, investing and financing activities;
• obtaining funding from a variety of sources;
• maintaining a reputable credit profile; and
• only investing surplus cash with major financial institutions
The table below reflects an undiscounted contractual maturity analysis for financial liabilities. Bank overdrafts have been deducted in
the analysis as management does not consider that there is any material risk that the bank will terminate such facilities. The bank does
however maintain the right to terminate the facilities without notice and therefore the balances of overdrafts outstanding at year-end
could become repayable within 12 months. Financial guarantee liabilities are treated as payable on demand since the Group has no
control over the timing of any potential settlement of the liabilities.
Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual timing may therefore
differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflect the earliest contractual
settlement dates and do not reflect management’s expectations that banking facilities will be rolled forward.
Financial liability and financial asset maturity analysis
Consolidated Group
2018
$
2017
$
2018
$
2017
$
2018
$
2017
$
2018
$
2017
$
Within 1 Year
1 to 5 years
Over 5 years
Total
Financial liabilities due for payment
Trade and other
payables
Amounts payable to
related parties
Total expected
outflows
929,822
134,139
790,118
832,696
929,822
134,139
790,118
832,696
1,719,940
966,835
-
-
-
-
1,719,940
966,835
Consolidated Group
2018
$
2017
$
2018
$
2017
$
2018
$
2017
$
2018
$
2017
$
Within 1 Year
1 to 5 years
Over 5 years
Total
Financial Assets - cash flows realisable
359,888
142,241
159,777
287,256
1,421,012
1,379,023
1,940,677
1,808,520
220,737
841,685
Cash and cash
equivalents
Trade, term and loans
receivables
Amounts receivable
from related parties
Total anticipated
inflows
Net (outflow) / inflow
on financial
instruments
c. Market Risk
i.
Interest rate risk
359,888
142,241
159,777
287,256
1,421,012
1,379,023
1,940,677
1,808,520
220,737
841,685
-
-
-
-
-
-
-
-
The Group's exposure to market risk primarily consists of financial risks associated with changes in interest rates as detailed below. As
the level of risk is low, the Group does not use any derivatives to hedge its exposure.
The Group is not exposed to interest rate risk on its non-current borrowings as the terms of the loan agreement stipulates that no
interest is payable.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
52
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 24: Financial Risk Management (Cont'd)
ii.
Foreign currency risk
Exposure to foreign currency risk may result in the fair value or future cash flows of a financial instrument fluctuating due to movement
in foreign exchange rates of currencies in which the Group holds financial instruments which are other than the AUD functional
currency of the Group.
With instruments being held by overseas operations, fluctuations in the SGD Dollar and Malaysia Ringgit may impact on the Group’s
financial results unless those exposures are appropriately hedged.
The following significant exchange rates were applied during the year.
$1 AUD
Singapore
Malaysia
iii. Sensitivity Analysis
31 December 2018
31 December 2017
Average
Rate
Spot Rate
Average
Rate
Spot Rate
0.9916
0.3316
1.0378
0.3423
0.9446
0.3033
0.9593
0.3159
The following table illustrates sensitivities to the Group’s exposures to changes in interest rates, exchange rates and commodity and equity
prices. The table indicates the impact of how profit and equity values reported at the end of the reporting period would have been affected by
changes in the relevant risk variable that management considers to be reasonably possible.
These sensitivities assume that the movement in a particular variable is independent of other variables.
Year ended 31 December 2018
+/- 0.75% in interest rates
+/- 10% in $A/$SGD
+/- 10% in $A/$MYR
Year ended 31 December 2017
+/- 0.75% in interest rates
+/- 10% in $A/$SGD
+/- 10% in $A/$MYR
Group
Profit
$
2,699
1,625
25,850
Group
Profit
$
1,067
997
3,595
Equity
$
2,699
1,625
25,850
Equity
$
1,067
997
3,595
There have been no changes in any of the methods or assumptions used to prepare the above sensitivity analysis from the prior year.
Fair Values
Fair value estimation
The fair values of financial assets and financial liabilities are presented in the following table and can be compared to their carrying amounts
as presented in the statement of financial position. Fair value is 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.
Differences between fair values and carrying amounts of financial instruments with fixed interest rates are due to the change in discount
rates being applied by the market since their initial recognition by the Group.
Consolidated Group
Financial assets
Cash and cash equivalents
Trade and other receivables:
Other financial assets
Total financial assets
Financial liabilities at amortised cost
Trade and other payables
Other financial liabilities
Total financial liabilities
Note
2018
Carrying
Amount
$
Fair Value
$
Carrying
Amount
$
2017
Fair Value
$
8
10
15
16
359,888
159,777
1,421,013
1,940,678
359,888
159,777
1,421,013
1,940,678
142,241
287,256
1,379,023
1,808,520
142,241
287,256
1,379,023
1,808,520
929,822
790,118
1,719,940
929,822
790,118
1,719,940
134,139
832,696
966,835
134,139
832,696
966,835
(i)
Cash and cash equivalents, trade and other receivables, and trade and other payables are short-term instruments in nature whose
carrying amounts are equivalent to their fair values.
(ii)
Term receivables reprice to market interest rates every three months, ensuring carrying amounts approximate fair value.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
53
For personal use only
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 25
Contingent Liabilities
During the financial year, the Company completed its Asset purchase of a Portfolio of Games from Animoca Brands Limited ("AB1").
There are 2 contingent liabilities in relation to the purchase and they are listed below.
Performance Payments
-
-
If during the first year after the Completion Date, the Games generate an aggregate Net Games Profit of at least AUD $500,000,
AB1 would be entitled to a performance payment in the number of shares equivalent in value to AUD 1,500,000 to be issued within
15 days of the final determination of the Net Games Profit. Each share would be valued at a price equal to the average closing
price of a share during the 15 day trading period immediately preceding the issuance of such Shares to AB1 up to a maximum of
9,375,000. Should the number of Shares to be issued to AB1 exceeds the maximum shares, the remaining balance of
performance payment will be paid to AB1 in cash by the Company.
If during the second year after the Completion Date, the Games generate an aggregate Net Games Profit of at least AUD
$1,000,000, AB1 would be entitled to a performance payment in the number of shares equivalent in value to AUD 1,500,000 to be
issued within 15 days of the final determination of the Net Games Profit. Each share would be valued at a price equal to the
average closing price of a share during the 15 day trading period immediately preceding the issuance of such Shares to AB1 up to
a maximum of 9,375,000. Should the number of Shares to be issued to AB1 exceeds the maximum shares, the remaining balance
of performance payment will be paid to AB1 in cash by the Company.
Earn Out Payment
For a period of 5 years from the Completion Date, AB1 shall be entitled to share in the Net Games Profits from the Games, in accordance
with the following conditions:
-
During any year in which the Net Games Profit from the Games reaches AUD $1,000,000, AB1 shall receive a cash payment
equal to at least 10% of such Net Profit as AB1's profit share payable within 15 days of the final determination of the Net Games
Profit. The value of AB1's profit share for any such year shall increase by 10% for each addition AUD $500,000 in Net Games
Profit reached by the Games during such year, up to a maximum of 50%. The table below illustrates how the Company and AB1
intend for the profit share scheme to work:
Net Games Profit (AUD)
1,000,000 - 1,499,999.99
1,500,000 - 1999,999.99
2,000,000 - 2,499,999.99
2,500,000 - 2,999,999.99
30,000,003,499,999.90
3,500,000.00
Profit Share
10%
20%
30%
40%
50%
50%
Note 26
Fair Value Measurements
The Group measures and recognises the following assets and liabilities at fair value on a recurring basis after initial recognition:
— financial assets - fair value OCI
— investments in subsidiaries
The Group measures and recognises the following assets and liabilities at fair value on a recurring basis after initial recognition:
(a) Fair value hierarchy
AASB 13: Fair Value Measurement requires the disclosure of fair value information by level of the fair value hierarchy, which
categorises fair value measurements into one of three possible levels based on the lowest level that an input that is significant to the
measurement can be categorised into as follows:
Level 1
Level 2
Level 3
Measurements based on quoted
prices (unadjusted) in active
markets for identical assets or
liabilities that the entity can
access at the measurement
date.
Measurements based on inputs other than
quoted prices included in Level 1 that are
observable for the asset or liability, either
directly or indirectly.
Measurements based on unobservable
inputs for the asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation techniques.
These valuation techniques maximise, to the extent possible, the use of observable market data. If all significant inputs required to
measure fair value are observable, the asset or liability is included in Level 2. If one or more significant inputs are not based on
observable market data, the asset or liability is included in Level 3.
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
54
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 26: Fair Value Measurements (Cont'd)
Valuation techniques
The Group selects a valuation technique that is appropriate in the circumstances and for which sufficient data is available to measure
fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics of the asset or liability being
measured. The valuation techniques selected by the Group are consistent with one or more of the following valuation approaches:
●
●
●
Market approach: valuation techniques that use prices and other relevant information generated by market transactions for
identical or similar assets or liabilities.
Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a single discounted
present value.
Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service capacity.
Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing the asset or
liability, including assumptions about risks. When selecting a valuation technique, the Group gives priority to those techniques that
maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs that are developed using market data
(such as publicly available information on actual transactions) and reflect the assumptions that buyers and sellers would generally use
when pricing the asset or liability are considered observable, whereas inputs for which market data are not available and therefore are
developed using the best information available about such assumptions are considered unobservable.
Note 27
Reserves
a.
Foreign Currency Translation Reserve
The foreign currency translation reserve records exchange differences arising on translation of a foreign controlled subsidiary.
Balance at the beginning of the period
Foreign currency movements during the year
b. Premium on Assets Acquired
Group
2018
$
73,008
(15,537)
57,471
2017
$
135,897
(62,889)
73,008
When the Company acquired Appxplore (iCandy) Limited, formerly known as iCandy Ventures Limited, a company incorporated in
British Virgin Island and iCandy Digital Pte Ltd, a company incorporated in Singapore, this transaction was assessed as a transaction
involved entities under common control. The Company was formed to effect the business combination and consideration was settled
via the issue of equity interests. As the Company was incorporated to effect the transactions, it was determined that iCandy Interactive
Limited would be the legal acquirer and Appxplore (iCandy) Limited would be the accounting acquirer as it was an entity that was
carrying on a business prior to the business combination,
In accordance with the accounting policy adopted, all assets and liabilities will be recorded at their book value at the date of
acquisition. The remaining difference between the fair value of the consideration paid and the book value of the net assets acquired is
allocated to equity.
Balance at the beginning of the period
Group
2018
$
20,289,999
20,289,999
2017
$
20,289,999
20,289,999
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
55
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
Note 26: Reserves (Cont'd)
c. Option Reserve
The option reserve records the fair value movement on options.
Balance at the beginning of the period
Issue of options during the year
Expiry of options during the year
Total Reserves
Foreign currency translation reserve
Other components of equity
Option reserve
Note 28
Company Details
The registered office of the company is:
iCandy Interactive Limited
Level 4, 91 William Street
Melbourne Vic 3000
The principal places of business are:
iCandy Interactive Limited
Level 4, 91 William Street
Melbourne Vic 3000
Group
2018
$
(885,980)
(457,457)
885,980
(457,457)
2017
$
-
(885,980)
-
(885,980)
Group
2018
$
57,471
20,289,999
(457,457)
19,890,013
2017
$
73,008
20,289,999
(885,980)
19,477,027
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
56
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
DIRECTORS' DECLARATION
In accordance with a resolution of the directors of iCandy Interactive Limited, the directors of the company declare
that:
1.
the financial statements and notes are in accordance with the Corporations Act 2001 and:
(a)
(b)
comply with Australian Accounting Standards, which, as stated in accounting policy Note 1 to the
financial statements, constitutes compliance with International Financial Reporting Standards; and
give a true and fair view of the financial position as at 31 December 2018 and of the performance for the
year ended on that date of the consolidated group;
2.
3.
in the directors' opinion there are reasonable grounds to believe that the company will be able to pay its debts
as and when they become due and payable; and
the directors have been given the declarations required by section 295A of the Corporations Act 2001 from
the Chief Executive Officer and Chief Financial Officer.
Director
Dated this
Mr Kin Wai Lau
29 March 2019
iCandy Interactive Limited Financial Report for the year ended 31 December 2018
57
For personal use only Independent Auditor's Report
To the Members of iCandy Interactive Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of iCandy Interactive Limited (“the Company”) and
its subsidiaries (“the Consolidated Entity”), which comprises the consolidated statement
of financial position as at 31 December 2018, the consolidated statement of profit or loss
and other comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies, and the
directors’ declaration.
In our opinion:
a.
the accompanying financial report of the Consolidated Entity is in accordance with
the Corporations Act 2001, including:
(i)
giving a true and fair view of the Consolidated Entity’s financial position as
at 31 December 2018 and of its financial performance for the year then
ended; and
(ii)
complying with Australian Accounting Standards and the Corporations
Regulations 2001.
b.
the financial report also complies with International Financial Reporting Standards
as disclosed in Note 1.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Those
standards require that we comply with relevant ethical requirements relating to audit
engagements and plan and perform the audit to obtain reasonable assurance about
whether the financial report is free from material misstatement. 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 Consolidated Entity 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 believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
For personal use only
Independent Auditor’s Report
To the Members of iCandy Interactive Limited (Continued)
Material Uncertainty Related to Going Concern
We draw attention to Note 1(w) in the financial report which indicates that the Consolidated Entity incurred a
net loss of $3,445,405 during the year ended 31 December 2018. As stated in Note 1(w), these events or
conditions, along with other matters as set forth in Note 1(w), indicate that a material uncertainty exists that
may cast significant doubt on the Consolidated Entity’s ability to continue as a going concern. Our opinion is
not modified in this respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report of the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Key audit matter
How our audit addressed the key audit matter
Impairment assessment of Cash Generating
Units inclusive of intangible assets
− As disclosed in note 13, the Consolidated Entity
has intangible assets of $2,632,292 after
impairment charges of $846,667.
− Impairment of intangible assets is considered to
be a key audit matter due to the significance of
the assets to the Consolidated Entity’s financial
position, current year’s performance and due to
the judgement involved in determining the key
assumptions used in the recoverable amount.
An impairment loss is recognised for the amount by
which the asset's carrying amount exceeds its
recoverable amount. The recoverable amount of the
CGU is based on certain key assumptions, such as
cash flow projections covering the life of the games.
Our procedures amongst others included:
− Obtaining an understanding of the value in use
model and assumptions used;
− Critically evaluating management’s
methodologies and their documented basis for
key assumptions utilised in the valuation models.
− We checked the mathematical accuracy of the
cash flow models;
− We assessed the reasonableness of historical
cashflows to forecasts provided by management;
− We performed sensitivity analyses around the
discount rate used; and
− We assessed the appropriateness of the
disclosures included in Note 13 to the financial
report.
Share based payments
Our procedures included, amongst others:
(Refer to Note 21 )
During the year ended 31 December 2018, the
Company incurred share based payments totalling
$457,457.
− Analysing contractual agreements to identify the
key terms and conditions of share based
payments issued and relevant vesting conditions
in accordance with AASB 2 Share Based
Payments;
For personal use only
Independent Auditor’s Report
To the Members of iCandy Interactive Limited (Continued)
Key audit matter
How our audit addressed the key audit matter
Share based payments are considered to be a key
audit matter due to
− Evaluating management’s Black-Scholes
Valuation Models and assessing the
− the value of the transactions;
− the complexities involved in recognition and
measurement of these instruments;
− the judgement involved in determining the inputs
used in the valuation for the model; and
− the judgement involved in valuing the settlement
shares.
Management used the Black-Scholes option
valuation model to determine the fair value of the
options granted. This process involved significant
estimation and judgement required to determine the
fair value of the equity instruments granted.
Recoverability of other financial assets
The Consolidated entity has provided loans to
multiple entities including related parties and to
external parties, totalling $1,421,012, as disclosed in
Note 10.
assumptions and inputs used;
− Assessing the amount recognised during the
period against the vesting conditions of the
options;
− Assessing the adequacy of the disclosures
included in the financial report;
Our procedures amongst others included:
− Obtaining loan confirmations;
− Discussions held with management over the
Due to the quantum of the loans, the recoverability of
recoverability of the loans;
the loans were considered a key audit matter.
− Assessment of the counterparty’s capacity to
repay the loan; and
We assessed the appropriateness of the disclosures
included in Notes 10 and 23 to the financial report.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Consolidated Entity’s annual report for the year ended 31 December 2018, but does not include
the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and 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.
For personal use only Independent Auditor’s Report
To the Members of iCandy Interactive Limited (Continued)
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 Note 1, the
directors also state in accordance with Australian Accounting Standard AASB 101 Presentation of Financial
Statements, that the financial report complies with International Financial Reporting Standards.
In preparing the financial report, the directors are responsible for assessing the Consolidated Entity’s ability 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 Consolidated Entity or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our responsibility is to express an opinion on the financial report based on our audit. Our objectives are to
obtain reasonable assurance about whether the financial report as a whole is free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian
Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Consolidated Entity’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Consolidated Entity’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Consolidated Entity to cease to
continue as a going concern.
For personal use only Independent Auditor’s Report
To the Members of iCandy Interactive Limited (Continued)
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Consolidated Entity to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Consolidated Entity audit. We remain
solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 31 December
2018. The directors of the Company are responsible for the preparation and presentation of the remuneration
report in accordance with s 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.
Auditor’s Opinion
In our opinion, the Remuneration Report of the Company, for the year ended 31 December 2018, complies
with section 300A of the Corporations Act 2001.
BENTLEYS
Chartered Accountants
MARK DELAURENTIS CA
Partner
Dated at Perth this 29th day of March 2019
For personal use only ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITES
ABN: 87 604 604 871 712
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
The following information is current as at 28 March 2019
1.
Shareholding
a.
Distribution of Shareholders
No. of Holders
No. of Ordinary
Shares
Category (size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
70
58
231
363
90
812
4,040
217,864
2,070,795
13,014,698
294,026,929
309,334,326
b.
c.
The number of shareholdings held in less than marketable parcels is 154. (2017: 94)
The names of the substantial shareholders listed in the holding company’s register are:
Shareholder
Fatfish Internet Pte Ltd
Animoca Brands Limited
Number
No. of Fully Paid
Ordinary Shares
% Held of Issued
Ordinary Capital
187,500,001
25,000,000
60.61%
8.08%
d.
The names of the substantial option holders listed in the holding company's register are:
Shareholder
HSBC Custody Nominees (Australia) Limtied
HFI Limited
Rexroth Holdings Pty Ltd
e.
20 Largest Shareholders — Ordinary Shares
Fatfish Internet Pte Ltd
Animoca Brands Limited
HSBC Custody Nominees (Australia) Limited
Esports.com Group AG
Fatfish Medialab Pte Ltd
Lead Nation Holdings Limited
Dutchman Capital Pte Ltd
RHB Securities Singapore Pte Ltd
Incubate Fund 1-G Limited Partnership
Mr Jen Yu Lim
Tock Yung Myn Gerald
Tan Choon Huat
Jason Jon Boyer
Hoo Jia Ling
Kie Siek Phai Roland
Liang Zhenlong
Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17. Quelk Seow Kee
Low Ching Hong
18.
19.
Citicorp Nominees Pty Limited
Lay Chin Moey
20.
Number
No. of Options
% Held of Listed
Options
11,173,381
10,650,000
7,000,000
15.73%
14.99%
9.85%
Number of Ordinary
Fully Paid Shares
Held
187,500,001
25,000,000
11,372,058
6,815,091
5,000,000
4,927,701
4,673,870
4,505,917
4,140,056
3,750,000
2,744,180
2,535,371
1,743,034
1,622,171
1,594,059
1,594,059
1,463,642
1,270,409
1,259,186
1,206,126
274,716,931
% Held
of Issued
Ordinary Capital
60.61%
8.08%
3.68%
2.20%
1.62%
1.59%
1.51%
1.46%
1.34%
1.21%
0.89%
0.82%
0.56%
0.52%
0.52%
0.52%
0.47%
0.41%
0.41%
0.39%
88.81%
Candy Interactive Limited FInancial Report for the year ended 31 December 2018
63
For personal use only
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITES
ABN: 87 604 604 871 712
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
f.
20 Largest Option Holders — Listed Options
Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
HSBC Custody Nominees (Australia) Limited
HFI Limited
Rexroth Holdings Pty Ltd
CPS Capital Investments Pty Ltd
Ms Poh Khuan Low
Blue Boat Group Limited
TA Securities Holdings Berhad
Mr Jimmy Fausto Caffieri & Mrs Lucia Caffieri
Mr Jackie Au Yueng
Ms Lay Chin Moey
CGAM Pty Ltd
RHB Securities Singapore Pte Ltd
Lawley Investments Pty Ltd
Celtic Capital Pte Ltd
Mr Lee Yoke Khai
Mr Matthew Ian Banks & Mrs Sandra Elizabeth
Banks
Chifley Portfolios Pty Limited
Larrakeyah Pty Ltd
Ninethy Three Pty Ltd
Sangreal Investments Pty Ltd
Number of Listed
Options
% Held
of Listed Options
11,173,381
10,650,000
7,000,000
3,000,000
2,108,333
1,790,000
1,525,000
1,500,000
1,500,000
1,480,000
1,333,333
1,014,000
1,000,000
1,000,000
1,000,000
800,000
750,000
750,000
750,000
750,000
50,874,047
15.73
14.99
9.85
4.22
2.97
2.52
2.15
2.11
2.11
2.08
1.88
1.43
1.41
1.41
1.41
1.13
1.06
1.06
1.06
1.06
71.64
2.
3.
4.
The name of the company secretary is Mr Andrew Draffin and Ms Jiahui Lan
The address of the principal registered office in Australia is Level 4, 91 William Street, Melbourne Victoria
3000
Registers of securities are held at the following addresses
Link Market Services Limited
Level 4, 152 St Georges Terrace
Perth WA 6000
5.
Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of the
Australian Securities Exchange Limited.
Candy Interactive Limited FInancial Report for the year ended 31 December 2018
64
For personal use only