ICANDY INTERACTIVE LIMITED
AND CONTROLLED ENTITIES
ABN: 87 604 871 712
Financial Report For The Year Ended
31 December 2019
ICANDY INTERACTIVE LIMITED
AND CONTROLLED ENTITIES
ABN: 87 604 871 712
Financial Report For The Year Ended
31 December 2019
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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14
21
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62
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 8 to 13.
Date of this statement
This statement reflects our corporate governance policies and procedures as at 31 December 2019.
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 evaluation 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.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
1
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
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 up 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 Board 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 charters provides that where practical, the Chairman of the Board will be a non-executive director. The
Chairman, Kin Wai Lau is an executive director and 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 reasonable 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.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
2
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
CORPORATE GOVERNANCE STATEMENT
(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.
(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. While the Chairman's prior approval is needed, it may not unreasonably withheld and, in the its absence,
Board approval may be sought.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
3
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
CORPORATE GOVERNANCE STATEMENT
(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, an
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 becomes available.
Women on the Board
Women in Senior Executive positions
Women employed by the company
(o)
Securities trading policy
2019
2020 - 2025
No.
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%
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No.
1
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%
25%
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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 acknowledgement 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)
(b)
(c)
(d)
(e)
Board committees and membership
Audit committee
Board Risk Oversight Committee
Board Nominations Committee
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.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
4
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
CORPORATE GOVERNANCE STATEMENT
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 true and fair financial reports; 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.
(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 form 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.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
5
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
CORPORATE GOVERNANCE STATEMENT
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.
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.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
6
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
CORPORATE GOVERNANCE STATEMENT
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 in 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.
iCandy Interactive Limited currently maintains its own website and relies on communication in this medium and the ASX Company
Announcements platform carrying all the relevant information.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
7
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
CORPORATE GOVERNANCE STATEMENT
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 have and disclose a board charter setting out:
(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 director or senior executive or putting
someone forward for election as a director; and
provide security holders with all material information in its possession relevant to a decision on
whether or not to elect or re-elect a director.
(b)
Recommendations 1.3
A listed entity should have a written agreement with each director and senior executive setting out the
terms of their appointment.
Recommendations 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)
(b)
have and disclose a diversity policy;
through its board or a committee of the board set measurable objectives for achieving gender
diversity in the composition of its board, senior executives and workforce generally; and
disclose in relation to each reporting period:
(c)
the measurable objectives set for that period to achieve gender diversity;
the entity's progress towards achieving those objectives; and
(1)
(2)
(3) either:
(A)
(B)
the respective proportions of men and women on the board, in senior executive positions
and across the whole workforce (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 and published under that Act.
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 for each reporting period whether a performance evaluation has been undertaken in
accordance with that process during or in respect of that period.
(b)
Recommendation 1.7
A listed entity should:
(a)
have and disclose a process for evaluating the performance of its senior executives at least
once every reporting period; and
disclose for each reporting period whether a performance evaluation has been undertaken in
accordance with that process during or in respect of that period.
(b)
Yes
Yes
Yes
Yes
Yes
No
No
1
2
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
8
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
CORPORATE GOVERNANCE STATEMENT
Principle 2: Structure the Board to be effective and add value
Recommendation 2.1
The board of a listed entity should:
(a)
have a nomination committee which:
(1)
(2)
has at least three members, a majority of whom are independent directors; and
is chaired by an independent director,
and disclose:
(3)
(4)
(5)
the charter of that committee;
the members of the committee; and
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, knowledge, experience, independence and diversity to enable it to discharge its duties
and responsibilities effectively.
Recommendations 2.2
A listed entity should have and disclose a board skills matrix setting out the mix of skills that the
board currently has or is looking to achieve in 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, affiliation or relationship of the type described in Box 2.3
but the board is of the opinion that it does not comprise the independence of the director, the
nature of the interest, position or relationship in question and an explanation of why the board is
of that opinion; and
the length of service of each director.
(c)
Recommendations 2.4
A majority of the board of a listed entity should be independent directors.
Recommendations 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.
Recommendations 2.6
A listed entity should have a program for inducting new directors and for periodically reviewing
whether there is a need for existing directors to undertake professional development to maintain the
skills and knowledge needed to perform their role as directors effectively.
Principle 3 - Instil a culture of acting lawfully, ethically and responsibly
Recommendation 3.1
A listed entity should articulate and disclose its values.
Recommendation 3.2
A listed entity should:
(a)
(b)
have and disclose a code of conduct for its directors, senior executives and employees; and
ensure that the board or a committee of the board is informed of any material breaches of that
code by a director or senior executive; and
any other material breaches of that code that call into question the culture of the organisation.
(c)
Recommendation 3.3
A listed entity should:
(a)
(b)
have and disclose a whistleblower policy; and
ensure that the board or a committee of the board is informed of any material incidents reported
under that policy.
No
3
4
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
9
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
CORPORATE GOVERNANCE STATEMENT
Recommendation 3.4
A listed entity should:
(a)
(b)
have and disclose an anti-bribery and corruption policy; and
ensure that the board or committee of the board is informed of any material breaches of that
policy.
Principle 4 - Safeguard the integrity of corporate reports
Recommendation 4.1
The board of a listed entity should:
(a)
have an audit committee which:
No
No
5
6
(1)
(2)
has at least three members, a majority of whom are non-executive directors and a majority
of whom are independent directors; and
is chaired by an independent director, who is not the chair of the board,
and disclose:
(3)
(4)
(5)
the charter of that committee;
the relevant qualifications and experience of the members of the committee; and
in relation to 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 an audit committee, disclose that fact and the process it employs that
independently verify and safeguard the integrity of its corporate reporting, including the
processes for the appointment and removal of the external auditor and the rotation of the audit
engagement partner.
Recommendations 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, in their opinion, 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.
Yes
Recommendations 4.3
A listed entity should disclose its processes to verify the integrity of any periodic corporate report it
releases to the market that is not audited or reviewed by an external auditor.
Yes
Principle 5 - Make timely and balanced disclosure
Recommendations 5.1
A listed entity should have and disclose a written policy for complying with its continuous disclose
obligations under listing rule 3.1
Recommendations 5.2
A listed entity should ensure that its board receives copies of all material market announcements
promptly after they have been made.
Recommendations 5.3
A listed entity that gives a new and substantive investor or analyst presentation should release a
copy of the presentation materials on the ASX Market Announcements Platform ahead of the
presentation.
Yes
Yes
Yes
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
10
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
CORPORATE GOVERNANCE STATEMENT
Principle 6 - Respect the rights of security holders
Recommendations 6.1
A listed entity should provide information about itself and its governance to investors via its website.
Yes
Recommendations 6.2
A listed entity should have an investor relations program that facilitates effective two-way
communication with investors.
Recommendations 6.3
A listed entity should disclose how it facilitates and encourages participation at meetings of security
holders.
Recommendations 6.4
A listed entity should ensure that all substantive resolutions at a meeting of security holders are
decided by a poll rather than by a show of hands.
Recommendations 6.5
A listed entity should give security holders the option to receive communications from, and send
communications to, the entity and its security registry electronically.
Yes
Yes
Yes
Yes
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:
No
7
(1)
(2)
has at least three members, a majority of whom are independent directors; and
is chaired by an independent director,
and disclose:
(3)
(4)
(5)
the charter of that committee;
the members of the committee; and
in relation to 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 processes 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 at least annually to satisfy itself that it continues
to be sound and that the entity is operating with due regard to 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 structure and what role it performs; or
if it does not have any internal audit function, that fact and the processes it employs for
evaluating and continually improving the effectiveness of its governance, risk management and
internal control processes.
Yes
Yes
Recommendations 7.4
A listed entity should disclose whether it has any material exposure to environmental or social risks
and, if it does, how it manages or intends to manage those risks.
Yes
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
11
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
CORPORATE GOVERNANCE STATEMENT
Principle 8 -Remunerate fairly and responsibly
Recommendation 8.1
The board of a listed entity should:
(a)
have a remuneration committee which:
(1)
(2)
has at least three members, a majority of whom are independent directors; and
is chaired by an independent director,
and disclose:
(3)
(4)
(5)
the charter of that committee;
the members of the committee; and
in relation to 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 and not excessive.
No
8
Recommendations 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.
Yes
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 limit the economic risk of participating in the scheme;
and
No
9
(b)
disclose that policy or a summary of it.
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, 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
The Company does not currently operate under a documented Anti-bribery and corruption policy given the size, nature and
geographical location of its operations.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
12
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
CORPORATE GOVERNANCE STATEMENT
Note 6
Due to the size and nature of the existing Board, the Company does not currently have 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
devotes time 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 7
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 roles and responsibilities associated with overseeing risk and maintaining the entity's risk management framework and
associated internal compliance and control procedures.
Note 8
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
roles and responsibilities associated with setting the level and composition of remuneration for Directors, ensuring that such
remuneration is appropriate and not excessive.
Note 9
The Company does not currently have any equity based remuneration schemes in place.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
13
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 2019.
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
Executive Director and Chairman
Appointed on 20 March 2015
Lum Piew
Executive Director
Appointed 17 May 2019
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
Lum Piew spent 26 years engaged in technology and managemnt consulting
with Acenture. He has led the Communications, Media and Technology
practice in Malaysia as its Managing Director over the last 12 years.
His extensive experience includes managing large-scale digital
transformation programs. He grew the Accenture practice from consulting to
outsourcing, and pivoting to digital transformation serving clients across
telco's, media and internet companies including Telenor, Grab, Google and
Facebook. At its peak, the Malaysia practice was Accenture's largest
practice in both revenues and staff numbers in Southeast Asia.
Other current directorships of listed companies
N/A
Former directorships of listed companies in last three years
N/A
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
14
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
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
15
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
DIRECTORS' REPORT
Phillip Lord
Executive Director
Resigned 21 June 2019
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
Company Secretary
Mr Andrew Draffin and Ms Jiahui Lan
Appointed 1 April 2018
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*
Lum Piew (appointed 17 May 2019)
Robert Kolodziej
Marcus Ungar
Masahiko Honma
Phillip Lord (resigned 21 June 2019)
Date of this report
31 December 2019
Ordinary Shares
Share Options
Ordinary Shares
Share Options
192,500,001
-
192,500,001
-
-
250,000
-
-
-
-
-
-
-
-
-
250,000
-
-
-
-
-
-
-
-
*Shares are held in Fatfish Internet Pte Ltd, a subsidiary of Fatfish Blockchain Limited, of which Mr Kin Wai Lau is a director of.
Meetings of directors
During the financial year, 24 meetings of directors (including circular resolutions) were held.
Attendances by each director during the year were as follows:
Kin Wai Lau
Lum Piew
Robert Kolodziej
Marcus Ungar
Masahiko Honma
Phillip Lord
Directors' Meetings
Number eligible to
attend
24
8
24
24
24
12
Number attend
24
8
24
24
24
12
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;
Game merchandise sales - players can purchase game related merchandise branded with logos and artwork of the Company's various
games; and
Publishing of games - publishing of mobile interactive entertainment for multiple mobile operating system platforms.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
16
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
DIRECTORS' REPORT
Review of Operations
For the financial year ended 31 December 2019, the Group reported a lower loss after tax, mainly because of lower impairment expense and unrealised
movement in fair value of intangibles in the current financial year.
However, the Group reported a lower revenue, mainly due to the expected fall in revenue of existing mobile games while there is a delay in the launching
of the new games that the Group is developing in-house.
The Group has been developing 4 new games in-house. These four new games are now expected to launch in the financial year ending 31 December
2020 and expected to bring significant positive impact to the financials of Group. The first amongst these 4 new games, Rocky Rampage, has garnered a
significant 500,000 users at its pre-registration phase. Rocky Rampage is expected to go live in early April 2020.
The Group expects to drive revenue in FY 2020 through the following initiatives:
(i) Release of 4 new self developed game titles;
(ii)
Identify more publishing opportunities; and
(iii) Penetrate the Chinese mobile game market via partnership with Chinese Internet conglomerate Alibaba Group (9Games).
Beyond FY2020, the Group believes that its investment in esports will pay off. The group achieved a significant milestone during the financial year ended
31 December 2019 entering into the field of esports, having made a major investment to obtain 42.5% stake in global esports tournament and media
network startup, Esports Players League (“ESPL”). Since the investment by the Group, ESPL has went on to secure an investment from highly regarded
early stage venture capital firm, 500 Startups. ESPL is currently planning to launch a global footprint across 16 countries in initial phase, covering Asia,
Europe and America, with central focus on mobile esports.
Operating Results
The consolidated loss of the consolidated entity after providing for income tax amounted to $2,323,035. (2018: loss of $3,445,405)
Financial Position
The net assets of the Group have decreased by $584,101 from $2,965,972 as at 31 December 2018 to $2,381,871 as at 31 December 2019.
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.
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
(2,391,100)
68,065
(2,323,035)
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
4,280,091
1,815,071
(83,149)
-
4,196,942
1,815,071
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.
iCandy Digital Pte Ltd, a subsidiary of iCandy Interactive Limited entered into a co-founding agreement and co-founded eSports Pte Ltd, a
Company incorporated in Singapore. The Company subsequently equity accounted for this investment and recognised a share of net loss
of associates of $82,756.
Matters Subsequent to the End of the Financial Year
On 7 January 2020 , the Company issued Tranche 5 acquisition shares in relation to the PT Joyseed Berbagi Sukses transaction. A total of 326,389 fully
paid ordinary shares were issued at a deemed price of $0.09 per share.
On 29 January 2020, the Company announced it had terminated its Global Game Development and Publishing Agreements with MoviGame due to
technical and resource constraints. MoviGame was unable to implement certain changes and adaptions to the game, Penguin Dash, to meet the
requirements of the Company as its global publisher.
The Company has been monitoring the potential impact of Covid -19 on its operations. There has so far been no impact on our financial position and we
don't expect it to as the Company expects that the video games industry will increase in demand due to the global movement restrictions imposed by
governments.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
17
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
DIRECTORS' REPORT
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.
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 2019, the Company has 337,190,644 fully paid ordinary shares. During the year, a total of 28,182,707 fully paid ordinary shares were
issued. Please refer to Note 18 - Issued capital for further details.
Summary of Options
Table below reflects the options on issue at the date this of report.
Issuing entity
Issue Date
Class of shares
Exercise Price
Expiry Date
Number of shares
under option
10,000,000
iCandy Interactive Limited
iCandy Interactive Limited
iCandy Interactive Limited
26 November 2018
Unlisted options
14 June 2019
15,500,000
Unlisted options
22 July 2019
1,249,998
Unlisted options
$0.050
$0.080
$0.060
26 November 2020
14 June 2021
22 July 2022
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.
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 five years are detailed in the following table:
31 December 2019
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
2,815,704
2,237,230
1,656,454
154,246
(2,312,065) (3,480,281) (3,362,941) (408,768) (250,254)
(2,323,035) (3,445,405) (3,113,914) (422,090) (250,254)
$0.00
$0.00
- - - - -
(0.68) (1.18) (1.23) (0.19) (0.14)
1,573,617
$0.00
$0.14
$0.14
$0.16
$0.05
$0.03
$0.16
$0.05
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
18
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
DIRECTORS' REPORT
Key management remuneration policy
The key management personnel of the company are represented by the directors.
The key management personnel remuneration policy is therefore the same as the directors' remuneration policy.
Directors and executives disclosed in this report
Name
Position Held
Kin Wai Lau
Lum Piew (appointed 17 May 2019)
Robert Kolodziej
Marcus Ungar
Masahiko Honma
Phillip Lord (Resigned 21 June 2019)
Executive Director and Chairman
Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Remuneration of Directors and Other Key Management Personnel (KMP) for the Year Ended 31 December 2019
Kin Wai Lau
Lum Piew (appointed 17 May 2019)
Robert Kolodziej
Marcus Ungar
Masahiko Honma
Phillip Lord (Resigned 21 June 2019)
Salaries, fees and
leave
Shares,
Options/Incentive
Rights
Superannuation
Total
25,309
-
-
25,309
24,500
- - 24,500
- - 12,000
12,000
- - 18,000
18,000
- - - -
- - 38,000
38,000
- - 117,809
117,809
Remuneration of Directors and Other Key Management Personnel (KMP) for the Year Ended 31 December 2018
Kin Wai Lau
Phillip Lord (Resigned 21 June 2019)
Robert Kolodziej
Marcus Ungar (appointed 1 April 2018)
Masahiko Honma (appointed 22 June 2018)
Donald Hand Low (resigned 1 April 2018)
Salaries, fees and
leave
Shares,
Options/Incentive
Rights
Superannuation
Total
- - 24,907
24,907
- - 84,164
84,164
- - 12,000
12,000
- - 18,000
18,000
- - - -
6,000
- - 6,000
- - 145,071
145,071
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
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
Kin Wai Lau*
Lum Piew (appointed 17 May 2019)
Robert Kolodziej
Marcus Ungar
Masahiko Honma
Phillip Lord (Resigned 21 June 2019)
192,500,001
-
250,000
-
-
-
- - - 192,500,001
-
- - -
- - - 250,000
- - - -
-
- - -
- - - -
*Shares were held in Fatfish Internet Pte Ltd, a subsidiary of Fatfish Blockchain Limited, of which Mr Kin Wai Lau is a director 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
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
Kin Wai Lau
Lum Piew (appointed 17 May 2019)
Robert Kolodziej
Marcus Ungar
Masahiko Honma
Phillip Lord (Resigned 21 June 2019)
- - - - -
- -
- - -
- - - - -
- - - - -
- - - - -
- - - - -
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
19
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
DIRECTORS' REPORT
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 $211,909 (SGD $200,000).
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 31 March 2020
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
20
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 2019, 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 31st day of March 2020
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 2019
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
Interest expense
Computer expenses
Other expenses
Travel expenses
Unrealised movement in fair value of intangibles
Share of net profits of associates and joint ventures
Loss before income tax
Tax expense/(benefit)
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
Net profit attributable to:
Owners of the parent entity
Non-controlling interest
Total comprehensive income attributable to:
Members of the parent entity
Non-controlling interest
Earnings per share
Basic loss per share (cents)
Diluted loss per share (cents)
Note
3(a)
3(b)
13
15
4
Group
2019
$
2018
$
2,237,230
247,680
(1,805,479)
679,431
(17,458)
(56,680)
(6,183)
(247,390)
(111,625)
(16,769)
(882,080)
(1,090,949)
(180,000)
(6,001)
(1,113)
(149,621)
(48,250)
(94,621)
(82,756)
(2,312,065)
(10,970)
(2,323,035)
120,353
120,353
120,353
(2,202,682)
(2,223,264)
(99,771)
(2,323,035)
(2,101,410)
(101,272)
(2,202,682)
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)
15,537
15,537
15,537
(3,429,868)
(3,445,405)
-
(3,445,405)
(3,429,868)
-
(3,429,868)
7
7
(0.68)
(0.68)
(1.18)
(1.18)
The accompanying notes form part of these financial statements.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
22
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other financial assets
Other assets
Right-of-use assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
Other non-current assets
Investments accounted for using the equity method
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Other financial liabilities
Lease liability
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
Equity attributable to owners of the parent entity
Non-controlling interest
TOTAL EQUITY
Group
Note
2019
$
2018
$
8
9
10
14
18
12
13
14
15
16
17
18
4(d)
19
27
414,229
352,513
1,415,336
70,817
49,933
2,302,828
124,273
1,747,035
-
22,806
1,894,114
4,196,942
1,009,471
742,905
53,219
1,539
1,807,134
7,937
7,937
1,815,071
2,381,871
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
30,306,207
(19,226,026)
(8,572,973)
2,507,208
(125,337)
2,381,871
29,201,668
(19,890,013)
(6,345,683)
2,965,972
-
2,965,972
The accompanying notes form part of these financial statements.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
23
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
Consolidated Group
Balance at 1 January 2018
Comprehensive income
Loss for the year
Other comprehensive income for the year
Total comprehensive income for the year
Issued Capital
Accumulated
Losses
$
$
Foreign Currency
Translation
Reserve
$
Reserve
Option Reserve
$
Other
Components of
Equity
$
Subtotal
Non-controlling
interests
$
$
27,056,445
(3,786,258)
(73,008)
885,980
(20,289,999)
3,793,160
-
-
-
(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
Options issued during the year
Options expired during the year
Total transactions with owners and other transfers
Balance at 31 December 2018
2,145,223
-
-
-
2,145,223
29,201,668
-
-
-
885,980
885,980
-
-
-
-
-
(6,345,683)
(57,471)
-
-
-
-
-
457,457
(885,980)
(428,523)
457,457
-
-
-
-
-
-
-
-
(20,289,999)
(3,445,405)
15,537
(3,429,868)
2,145,223
-
457,457
-
2,602,680
2,965,972
Balance at 1 January 2019
Effects of adoption of AASB 16
Balance at 1 January 2019 (restated)
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
Recognition of non-controlling interest in PT Joyseed Berbagi Sukses
Total transactions with owners and other transfers
Balance at 31 December 2019
29,201,668
(6,345,683)
(57,471)
457,457
(20,289,999)
2,965,972
-
(4,026)
-
-
-
(4,026)
29,201,668
(6,349,709)
(57,471)
457,457
(20,289,999)
2,961,946
-
-
-
(2,223,264)
-
(2,223,264)
-
121,854
121,854
1,711,605
(607,066)
-
-
1,104,539
30,306,207
-
-
-
-
-
-
-
-
-
-
(8,572,973)
64,383
-
-
-
-
-
542,133
-
542,133
999,590
-
-
-
-
-
-
-
-
(20,289,999)
(2,223,264)
121,854
(2,101,410)
(99,771)
(1,501)
(2,323,035)
120,353
(101,272)
(2,202,682)
1,711,605
(607,066)
542,133
-
1,646,672
2,507,208
-
-
-
(24,066)
(24,066)
(125,338)
1,711,605
(607,066)
542,133
(24,066)
1,622,606
2,381,870
The accompanying notes form part of these financial statements.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
24
Total
$
3,793,160
(3,445,405)
15,537
(3,429,868)
2,145,223
-
457,457
-
2,602,680
2,965,972
2,965,972
(4,026)
2,961,946
-
-
-
-
-
-
-
-
-
-
-
-
-
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Net cash generated by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of investments
Cash acquired from acquisition of subsidary
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
Payments of lease liability - principal
Payments of lease liability - interest
Loans to related parties:
- payments made
- proceeds from repayments
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
8
Group
Note
2019
$
2018
$
2,249,822
(3,274,883)
(1,025,061)
2,695,908
(2,820,057)
(124,149)
21
61,855
(31,271)
(139,476)
(145,023)
1,686
-
35,679
(216,550)
1,500,006
(128,882)
(66,290)
(6,001)
-
-
1,298,833
57,222
359,888
(2,881)
414,229
982
(37,553)
(300,000)
-
-
(88,892)
209,573
(215,890)
545,207
-
-
-
-
-
545,207
205,168
142,241
12,479
359,888
The accompanying notes form part of these financial statements.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
25
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
These consolidated financial statements and notes represent those of iCandy Interactive Limited and Controlled Entities ("group").
The financial statements were authorised for issue on 31 March 2020 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 2019.
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 exemptions).
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 2019
26
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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 9: 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.
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.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
27
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 1: Summary of Significant Accounting Policies (Cont'd)
(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(k) 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.
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.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
28
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 1: Summary of Significant Accounting Policies (Cont'd)
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; or
fair value through profit or loss.
A financial liability is measured at fair value through profit and loss if the financial liability is:
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.
(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.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
29
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 1: Summary of Significant Accounting Policies (Cont'd)
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 (e.g. 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.
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.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
30
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 1: Summary of Significant Accounting Policies (Cont'd)
(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)
Intangible Assets Other than Goodwill
Computer software
Computer software is recorded at cost. Where software is acquired at no cost, or for a nominal cost, the cost is its fair value, as at the date of
acquisition. It has a finite life and is carried at cost less accumulated amortisation and any impairment losses. Software has an estimated useful
life of between one and three years. It is assessed annually for impairment.
(l)
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 on the date of transaction; 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.
(m)
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.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
31
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 1: Summary of Significant Accounting Policies (Cont'd)
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 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.
(n)
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.
(o)
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.
(p)
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.
(q)
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.
(r)
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.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
32
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 1: Summary of Significant Accounting Policies (Cont'd)
(s)
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.
(t)
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.
(u)
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.
(v)
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.
(v) 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.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
33
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 1: Summary of Significant Accounting Policies (Cont'd)
(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 period after tax of $2,323,035 (31 December 2018: loss of $3,445,405) and net cash outflows from
operating activities of $1,025,061 (2018 Outflows: $124,149)
The ability of the Company to continue as a going concern is principally dependent on the Company to increase cashflow from existing
businesses, managing cashflow in line with available funds and the ability of the Company to secure funds by raising capital from equity markets.
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 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.
(x) New and amended accounting poliies adopted by the Group
Initial application of AASB 16
The Group has adopted AASB 16: Leases retrospectively with the cumulative effect of initially applying AASB 16 recognised at 1 January 2019.
In accordance with AASB 16, the comparatives for the 2018 reporting period have not been restated.
The Group has recognised a lease liability and right-of-use asset for all leases (with the exception of short- term and low- value leases)
recognised as operating leases under AASB 117: Leases where the Group is the lessee.
There has been no significant change from prior year treatment for leases where the Group is a lessor.
The lease liabilities are measured at the present value of the remaining lease payments. The Group's incremental borrowing rate as at 1 January
2019 was used to discount the lease payments.
The right-of-use asset for manufacturing equipment was measured at its carrying amount as if AASB 16 had been applied since the
commencement date, but discounted using the Group's weighted average incremental borrowing rate on 1 January 2019.
The right of use assets for the remaining leases were measured and recognised in the statement of financial position as at 1 January 2019 by
taking into consideration the lease liability and prepaid and accrued lease payments previously recognised as at 1 January 2019 (that are related
to the lease).
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
34
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 2
Parent Information
The following information has been extracted from the books and records of the financial information of the parent entity set out below 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
Loss for the year
Other comprehensive income for the year
Total comprehensive income
2019
$
2018
$
233,955
2,712,931
2,946,886
89,458
3,718,136
3,807,594
848,877
-
848,877
841,622
-
841,622
2,098,009
2,965,972
30,306,206
(29,207,787)
999,590
2,098,009
29,201,668
(26,693,153)
457,457
2,965,972
(2,514,634)
-
(2,514,634)
(2,543,889)
-
(2,543,889)
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 in-app applications
- ads and sponsorships
- publishing income
-
services
(b) Other income
-
interest received
- unrealised foreign exchange gin/(loss)
- other income
Group
2019
$
2018
$
1,235,559
2,318,224
568,948
85,694
347,029
-
390,586
106,894
2,237,230
2,815,704
61,855
(21,368)
207,193
247,680
62,171
24,450
73,804
160,425
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
35
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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% (2018: 27.5%)
consolidated group
parent entity
—
—
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
(c) Deferred tax assets not brought into account
Group
2019
$
2018
$
Note
(11,849)
879
(10,970)
86,618
(51,742)
34,876
(635,818)
(957,077)
635,818
12,699
(1,729)
10,970
957,077
23,556
(58,432)
(34,876)
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 by foreign subsidiary
Note 5
Key Management Personnel Compensation
1,722,865
1,209,662
7,937
7,937
8,816
8,816
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 2019.
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
2019
$
117,809
-
117,809
2018
$
145,071
-
145,071
–
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 2019
36
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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
Earnings used in the calculation of 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
Note 9
Trade and Other Receivables
CURRENT
Trade receivables
Provision for impairment
Other receivables
GST receivables
Total current trade and other receivables
Group
2019
$
2018
$
53,224
3,456
56,680
35,549
25,045
60,594
Group
2019
$
2018
$
(2,223,264)
(3,445,405)
(2,223,264)
(3,445,405)
No.
No.
327,634,307
291,469,218
327,634,307
291,469,218
Note
Group
2019
$
414,229
414,229
2018
$
359,888
359,888
21
414,229
414,229
359,888
359,888
Note
Group
2019
$
2018
$
194,154
136,169
9b
(4,527)
(2,888)
189,627
133,281
158,418
4,468
18,973
7,523
352,513
159,777
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 2019 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
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
37
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 9: Trade and Other Receivables (cont'd)
The "amounts written off" are all due to customers declaring bankruptcy, or term receivables that have now become unrecoverable.
2019
Expected loss rate
Gross carrying amount
Loss allowing provision
2018
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
$
1.27%
357,040
(4,527)
1.78%
162,665
(2,888)
$
$
$
0%
-
-
0%
-
-
0%
-
-
0%
-
-
$
0
357,040
(4,527)
162,665
(2,888)
0%
-
-
0%
-
-
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
Indonesia
Group
2019
$
4,559
746
343,650
3,558
2018
$
4,314
133,282
22,181
-
352,513
159,777
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.
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, e.g. 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.
(b) Financial Assets Measured at Amortised Cost
Trade and other Receivables
— Total current
— Total non-current
Total financial assets measured at amortised cost
Group
2019
$
2018
$
352,513
-
352,513
159,777
-
159,777
Note
24
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
38
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 10
Other Financial Assets
CURRENT
Amount receivable from:
- other related parties
- others
Investments held
Convertible notes
Total current assets
Total Other Financial Assets
Current
Non-Current
Terms of Receivables:
All receivables are at call.
There are no securities attached.
Group
2019
$
2018
$
1,317,286
23,383
1,340,669
-
74,667
1,415,336
1,426,823
(5,811)
1,421,012
-
-
1,421,012
1,415,336
-
1,415,336
1,421,012
-
1,421,012
Amount receivables of $1,309,248 (SGD 1,235,669) has an interest rate of 5% per annum attached.
No interest are charged on the remaining 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.
Name of subsidiary
Place of Incorporation
iCandy Digital Pte Ltd
Appxplore (iCandy) Limited
Appxplore (iCandy) Sdn Bhd
Inzen (iCandy) Pte Ltd
iCandy Play Limited
iCandy Games Limited
PT Joyseed Berhagi Sukses
Beetleroar Sdn Bhd
Singapore
British Virgin Island
Malaysia
Singapore
British Virgin Island
British Virgin Island
Indonesia
Malaysia
Ownership interest held by the
Group
Proportion of non-controlling
interests
2019
(%)
100%
100%
100%
100%
100%
100%
67%
40%
2018
(%)
100%
100%
100%
100%
100%
100%
-
-
2019
(%)
2018
(%)
-
-
-
-
-
-
33%
60%
-
-
-
-
-
-
-
-
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 2019
39
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 12
Plant and Equipment
PLANT AND EQUIPMENT
Plant and equipment:
At cost
Accumulated depreciation
Leasehold improvements
At cost
Accumulated amortisation
Signage
At cost
Accumulated amortisation
Total plant and equipment
Group
2019
$
2018
$
171,725
126,833
(79,986)
91,739
64,095
(32,741)
31,354
1,779
(599)
1,180
(55,134)
71,699
62,908
(20,723)
42,185
1,746
(413)
1,333
124,273
115,217
(a)
Movements in Carrying Amounts
Movements in carrying amounts for each class of plant and equipment between the beginning and the end of the current financial year.
Consolidated Group:
Balance at 1 January 2018
Additions
Depreciation expense
Foreign exchange movement
Balance at 31 December 2018
Additions
Additions through acquisition of entity
Depreciation expense
Foreign exchange movement
Balance at 31 December 2019
Plant and
Equipment
$
Leasehold
Improvements
$
Signage
Total
$
$
53,640
30,334
(17,086)
4,811
71,699
31,271
10,419
(24,674)
3,024
91,739
43,672
6,363
(11,946)
4,096
42,185
-
-
(11,627)
796
31,354
598
856
(146)
25
97,910
37,553
(29,178)
8,932
1,333
115,217
-
-
(178)
25
31,271
10,419
(36,479)
3,845
1,180
124,273
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
40
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 13
Intangible Assets
Goodwill
Cost
Accumulated impairment losses
Net carrying amount
Games Portfolio
Cost
Accumulated amortisation and 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:
Consolidated Group
2019
$
2018
$
283,862
-
283,862
-
-
-
2,600,000
2,600,000
(1,850,000)
(1,150,000)
750,000
1,450,000
1,980,833
1,940,131
(1,404,483)
576,350
(987,597)
952,534
258,224
2,038,175
(183,803)
(1,892,372)
74,421
145,803
1,200,673
1,082,827
(1,138,271)
(998,872)
62,402
83,955
1,747,035
2,632,292
Note
Goodwill
Games
Portfolio
Computer
Software
Research and
Development
Cryptocurrency
Total
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
Year ended 31 December 2019
Balance at the beginning of the year
Reclassification from prepayments
Additions
Amortisation charge
Impairment losses
Movement in fair value
Movement in foreign currency
-
-
-
-
-
-
-
-
-
-
28
283,862
-
-
-
-
$
$
$
-
-
2,600,000
(303,333)
(846,667)
-
-
1,450,000
1,204,776
508,353
-
1,713,129
-
-
-
-
610,781
610,781
472,046
3,072,046
(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
1,450,000
952,534
145,803
83,955
2,632,292
-
-
(520,000)
(180,000)
-
-
-
-
-
-
-
63,560
(396,167)
(74,419)
-
-
19,983
-
-
3,037
74,421
-
-
(85,766)
653
-
347,422
(990,586)
(180,000)
(85,766)
23,673
Closing value at 31 December 2019
283,862
750,000
576,350
62,402
1,747,035
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
41
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 13: Intangible Assets (Cont'd)
On 17 June 2019, Appxplore (iCandy) Limited received 3,000,000 NOX tokens from Nitro Interactive Limited for publishing services.
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.
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 12% has been applied.
Note 14
Other Assets
CURRENT
Prepayments
Total Other Assets
Current
Non-Current
Note 15
Associates
Set out below are the associates of the Grouop.
Name
Classification
Group
2019
$
2018
$
70,817
70,817
8,070
8,070
70,817
-
70,817
8,070
-
8,070
Place of
business/
incorporation
Proportion of ordinary share
interests/participating share
Measurement
Method
Carrying amount
2019
%
2018
%
2019
$
2018
$
Esports.com Pte Ltd
Associate
Singapore
42.55%
-
Equity
22,806
-
Esports.com Pte Ltd was co-founded with a consortium of partners in October 2019 to launch a global esports venture, named Esports Pro League
("ESPL").
ESPL is a global esports tournament and media network that will be developing an integrated and open ecosystem for tournaments, media, brands,
publishers, teams and players with a focus on community and digital interactivity.
Esports.com Pte Ltd is a private company and therefore, no quoted market prices are available for their shares.
(a)
Summarised financial information for associates
Set out below is the summarised financial information for Esports.com Pte Ltd. The disclosed information reflects the amounts presented in
the Australian Accounting Standards financial statements of the associates including adjustments made by the Group when applying the
equity method and adjustments for any differences in accounting policies between the Group and the associates.
Summarised financial position
Total current assets
Total non-current assets
Total current liabilities
Total non-current liabilities
Net assets
Group's share (%)
Group's share of associates net assets
Esports.com Pte Ltd
2019
2018
$
$
75,031
-
(21,432)
-
53,599
42.55%
22,806
-
-
-
-
-
-
-
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
42
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 15 : Associates (cont'd)
Summaried financial performance
Revenue
Loss after tax
Other comprehensive income
Total comprehensive income
Group's share (%)
Group's share of associates net assets
Reconciliation to carrying amount
Group's share of associates' opening net assets
Investments during the period
Group's share of net loss after tax
Foreign exchange movement
Note 16
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
Note 17
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 is payable on amounts owing.
Esports.com Pte Ltd
2019
2018
$
$
-
(194,490)
-
(194,490)
42.55%
(82,756)
Esports.com Pte Ltd
2019
2018
$
$
-
105,955
(82,756)
(393)
22,806
-
-
-
-
-
-
-
-
-
-
-
Note
Group
2019
$
2018
$
104,664
904,807
1,009,471
121,219
808,603
929,822
Group
2019
$
2018
$
1,009,471
-
1,009,471
929,822
-
929,822
25
Group
2019
$
2018
$
742,905
742,905
790,118
790,118
742,905
-
742,905
790,118
-
790,118
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
43
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 18
Leases
Amounts recognised in the balance sheet.
Right of use assets
Office space
Lease liabilities
Current
Non current
Note 19
Issued Capital
337,190,644 fully paid ordinary shares (2018: 309,007,937 fully paid ordinary shares)
The Group has authorised share capital amounting to 337,190,644 ordinary shares.
Group
2019
$
2018
$
49,933
49,933
53,219
-
53,219
-
-
-
-
-
Group
2019
$
30,306,207
2018
$
29,201,668
30,306,207
29,201,668
(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
2019
2018
No.
$
No.
$
309,007,937
29,201,668
277,192,746
27,056,445
28,182,707
1,711,605
31,815,191
2,145,223
-
(607,066)
-
-
337,190,644
30,306,207
309,007,937
29,201,668
On 4 January 2019, 8 April 2019, 22 July 2019 and 18 October 2019, 326,839 fully paid ordinary shares were issued on each date. This was in
relation to the acquisition of 67% of PT Joyseed Berbagi Sukses. There are a total of 8 tranches of 326,389 fully paid ordinary shares to be
issued. Tranche 1, Tranche 2, Tranche 3 and Tranche 4 have been issued. Shares were issued at $0.09 per share. No cash was raised.
On 8 April 2019, 250,000 fully paid ordinary shares were issued to MMR Corporate as consultancy fees. Shares were issued at $0.07 per share
and no cash was raised.
On 12 April 2019, 25,000,100 fully paid ordinary shares were issued under a private placement and cleansing offer. Shares were issued at $0.06
per share raising a total of $1,381,948, net of capital raising costs.
On 22 July 2019, the following shares were issued:
927,051 fully paid ordinary shares were issued under an agreement with Meta.us as part of a Convertible Note investment. Shares
were issued at $0.04 per share and no cash was raised.
700,000 fully paid ordinary shares were issued to Damian Kwok as consultancy fees. Shares were issued at $0.06 per share and no
cash was raised.
-
-
(b)
Options
There were no listed options on issue for the financial year ended 31 December 2019. 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 the end of the year
Group
2019
No.
2018
No.
30,533,333
(30,533,333)
-
-
-
27,716,666
-
-
2,816,667
30,533,333
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
44
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 19: Issued Capital (Cont'd)
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 the end of the year
On 14 June 2019, the following unlisted options were issued:
Group
2019
No.
2018
No.
30,500,000
16,749,998
(20,500,000)
-
26,749,998
33,316,667
10,000,000
(10,000,000)
(2,816,667)
30,500,000
-
-
7,500,000 unlisted options issued as Broker Options in relation to the private placement conducted on 12 April 2019. These options
have an exercise price of $0.08 and expiry date of 14 June 2021.
8,000,000 unlisted options were issued as Corporate Options in relation to the private placement conducted on the 12 April 2019.
These options have an exercise price of $0.08 and expiry date of 14 June 2021.
On 22 July 2019, 1,249,998 unlisted options were issued as employee options to the employees of subsidiary, Appxplore (iCandy) Sdn Bhd.
These options have an exercise price of $0.06 and expiry date of 22 July 2022.
The options issued during the financial year were calculated using the Black Scholes method and has a value of $236,617, $252,391 and
$53,125 attached to them respectively.
(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
9
Group
2019
$
742,905
(414,229)
328,676
2018
$
790,118
(359,888)
430,230
2,381,871
2,965,972
2,710,547
3,396,202
12%
13%
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
45
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 20
Operating Segments
General Information
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the board of directors (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.
(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 2019
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
$
$
3,498
3,498
1,595,927
1,595,927
637,805
637,805
2,237,230
2,237,230
2,237,230
Segment result from continuing operations before tax
(636,400)
(169,443)
(1,352,971)
(2,158,814)
Reconciliation of segment result to group net profit/loss before tax
Intersegment elimination
Loss after tax from continuing operations
(164,221)
(2,323,035)
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
46
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 20: Operating Segments (Cont'd)
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
9,264
2,804,032
2,804,032
2,408
2,408
2,815,704
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
(ii) Segment assets
31 December 2019
Segment assets
Segment assets include:
—
Additions to non-current assets (other than financial assets
and deferred tax)
Reconciliation of segment assets to group assets
Intersegment eliminations
Total group assets
31 December 2018
Segment assets
Segment assets include:
—
Additions to 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 2019
Segment liabilities
Reconciliation of segment assets to group liabilities
Intersegment eliminations
Total group liabilities
(581,639)
(3,445,405)
Development
of digital
media
$
Development
of Intellectual
properties
$
All Other
Segments
Total
$
$
603,149
2,222,451
26,071,164
28,896,764
576,886
310,492
25,733,684
26,621,062
Development
of digital
media
$
Development
of Intellectual
properties
$
(24,699,822)
4,196,942
Total
All Other
Segments
$
$
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
Development
of digital
media
$
Development
of Intellectual
properties
$
All Other
Segments
Total
$
$
492,167
368,466
954,438
1,815,071
-
1,815,071
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
47
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 20: Operating Segments (Cont'd)
31 December 2018
Segment liabilities
Reconciliation of segment assets 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
$
$
483,235
298,862
948,187
1,730,284
-
1,730,284
Revenue, including revenue from discontinued operations, attributable to external customers is disclosed below, based on the principal place of
business.
Australia
Singapore
Malaysia
Indonesia
Total revenue
(v) Assets by geographical region
The location of segment assets by geographical location of the assets is disclosed below:
Australia
Singapore
Malaysia
Indonesia
Total Assets
Note 21
Cash Flow Information
(a)
Reconciliation of Cash Flows from Operating Activities with Profit after
Income Tax
Loss 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
- Shares 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
Net cash generated by operating activities
2019
$
637,805
12,838
1,582,650
3,937
2,237,230
2018
$
699,633
42,499
2,073,572
-
2,815,704
2019
$
1,371,344
610,431
2,194,212
20,954
4,196,941
2018
$
1,539,459
984,432
2,172,365
-
4,696,256
Group
2019
$
2018
$
(2,323,035)
(3,445,405)
1,270,949
2,244,168
94,621
1,004,304
6,183
53,125
58,500
52,050
(60,752)
(192,736)
(62,747)
79,649
11
(879)
(1,025,061)
2,759
457,457
-
(666,120)
(62,001)
127,479
10,431
254,834
(478)
(51,577)
(124,149)
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
48
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 22
Share-based Payments
The aggregate share-based payments for the financial year are set out below:
Outstanding during the year
Granted
Exercised
Released from escrow
Expired
Outstanding and exercisable at year-end
2019
2018
Number
Weighted
average
exercise price
$
30,500,000
16,749,998
-
(20,500,000)
-
26,749,998
Number
Weighted
average
exercise price
$
0.050
33,316,667
10,000,000
-
(2,816,667)
(10,000,000)
30,500,000
The following share-based payment arrangements were in existence during the current reporting period:
Number
Grant Date
Expiry Date Exercise Price Fair value at
(i) Options granted
(ii) Options granted
15,500,000
1,249,998
14 June 2019 14 June 2021
22 July 2022
22 July 2019
$
$0.08
$0.06
grant date
$
489,008
53,125
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
15,500,000
1,249,998
$0.052
$0.036
$0.080
$0.060
139%
160%
2 years
3 years
1.49%
1.02%
Note 23
Events After the Reporting Period
On 7 January 2020 , the Company issued Tranche 5 acquisition shares in relation to the PT Joyseed Berbagi Sukses transaction. A total of 326,389
fully paid ordinary shares were issued at a deemed price of $0.09 per share.
On 29 January 2020, the Company announced it had terminated its Global Game Development and Publishing Agreements with MoviGame due to
technical and resource constraints. MoviGame was unable to implement certain changes and adaptions to the game, Penguin Dash, to meet the
requirements of the Company as its global publisher.
The Company has been monitoring the potential impact of Covid -19 on its operations. There has so far been no impact on our financial position and
we don't expect it to as the Company expects that the video games industry will increase in demand due to the global movement restrictions imposed
by governments.
Note 24
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.
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.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
49
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 24: Related party Transactions (Cont'd)
(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 Lum Piew
- Directors' fees paid to Robert Kolodziej
- Directors' fees paid to Marcus Ungar
- Directors' fees paid to Masahiko Honma
- Directors' fees paid to Phillip Lord
-
Directors' fees and company secretarial fees paid to DHL Corporate
Advisory, of which Mr Donald Low is a director and shareholder
(c)
Amount payable to and receivable from related parties
i. Loans payable to Ultimate Parent Entity - Fatfish Blockchain Limited
Beginning of the year
Loans advanced
Loan repayment made
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
Loans 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
v. Loans receivable from immediate parent entity - Fatfish Internet Pte Ltd
Beginning of the year
Loans advanced
Loan repayment received
Foreign currency movement
End of the year
Group
2019
$
2018
$
25,309
24,500
12,000
18,000
-
38,000
-
24,907
-
12,000
18,000
-
84,164
6,000
117,809
145,071
Group
2019
$
2018
$
106,418
106,418
-
(5,324)
-
-
101,094
106,418
379,511
439,991
-
-
3,847
4,030
(100,750)
36,240
383,358
379,511
252,906
252,906
-
-
5,547
-
-
-
258,453
252,906
1,257,856
1,251,498
5,159
-
54,271
-
(100,000)
106,358
1,317,286
1,257,856
93,552
93,552
-
-
-
-
-
-
93,552
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 $211,909 (SGD $200,000).
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
50
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 25
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 9: Financial Instruments 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
Trade and other payables
Other financial liabilities
Total Financial Liabilities
Financial Risk Management Policies
Note
8
9
10
16
16
Group
2019
$
2018
$
414,229
352,513
359,888
159,777
1,415,336
1,421,012
2,182,078
1,940,677
1,009,471
742,905
929,822
790,118
1,752,376
1,719,940
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.
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.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
51
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 25: Financial Risk Management (Cont'd)
Financial liability and financial asset maturity analysis
Consolidated Group
2019
$
2018
$
2019
$
2018
$
2019
$
2018
$
2019
$
2018
$
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
Consolidated Group
1,009,471
929,822
742,905
790,118
1,752,376
1,719,940
-
-
-
Within 1 Year
1 to 5 years
2019
$
2018
$
2019
$
2018
$
Financial Assets - cash flows realisable
414,229
359,888
352,513
159,777
1,415,336
1,421,012
2,182,078
1,940,677
429,702
220,737
-
-
-
-
-
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
-
-
-
-
-
-
-
-
-
-
-
Over 5 years
2019
$
2018
$
-
-
-
-
-
-
-
-
-
-
-
-
-
1,009,471
929,822
742,905
790,118
1,752,376
1,719,940
Total
2019
$
2018
$
414,229
359,888
352,513
159,777
1,415,336
1,421,012
2,182,078
1,940,677
429,702
220,737
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.
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
Indonesian Rupiah
iii. Sensitivity Analysis
2019
2018
Average Rate
Spot Rate
Average Rate
Spot Rate
0.9483
0.3473
0.0001
0.9438
0.3488
0.0001
0.9916
0.3316
1.0378
0.3423
- -
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.
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
52
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 25: Financial Risk Management (Cont'd)
These sensitivities assume that the movement in a particular variable is independent of other variables.
Year ended 31 December 2019
+/- 0.75% in interest rates
+/- 10% in $A/$SGD
+/- 10% in $A/$MYR
Year ended 31 December 2018
+/- 0.75% in interest rates
+/- 10% in $A/$SGD
+/- 10% in $A/$MYR
Group
Profit
$
Equity
$
3,107
246
620
3,107
246
620
Group
Profit
$
Equity
$
2,699
1,625
25,850
2,699
1,625
25,850
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. Refer to Note 21 for detailed disclosures regarding the fair value measurement of the group’s
financial assets and financial liabilities.
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
2019
Carrying
Amount
$
Fair Value
$
Carrying
Amount
$
2018
Fair Value
$
8
10
16
17
414,229
352,513
1,415,336
2,182,078
414,229
352,513
1,415,336
2,182,078
359,888
159,777
1,421,012
1,940,677
359,888
159,777
1,421,012
1,940,677
1,009,471
742,905
1,752,376
1,009,471
742,905
1,752,376
929,822
790,118
1,719,940
929,822
790,118
1,719,940
(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.
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 does not subsequently measure any liabilities at fair value on a non-recurring basis.
(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 2019
53
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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:
(cid:404)
(cid:404)
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.
(cid:404)
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.
Digital currencies have been value using Level 1 input. Market value has been determined by various platforms, including
https://coinmarketcap.com/.
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
2019
$
57,471
(121,854)
(64,383)
2018
$
73,008
(15,537)
57,471
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
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
Group
2019
$
20,289,999
20,289,999
2018
$
20,289,999
20,289,999
Group
2019
$
(457,457)
(542,133)
-
(999,590)
2018
$
(885,980)
(457,457)
885,980
(457,457)
Group
2019
$
(64,383)
20,289,999
(999,590)
19,226,026
2018
$
57,471
20,289,999
(457,457)
19,890,013
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
54
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 28
Business Combination
PT Joyseed Berbagi Sukses is an award winning mobile game development studio surging admist the expanding Southeast Asia's mobile game
market. Based in Jarkata, Indonesia, Joyseed's team is made up of the skilled artists and developers from the region dedicated to planting the seed
of joy in the hearts of everyone.
On 18 May 2018, the Company signed a term sheet to acquire 70% of PT Joyseed Berbagi Sukses, an Indonesian mobile gaming development
studio.
On 4 Janaury 2019, all conditions precedent to the Agreement had been fulfilled and acquisition completed. Due to limitations of foreign ownership
rules in Indonesia, the Company and Vendors entered into a supplemental agreement to reduce the acquisition from 70% to 67%.
There is a contingent liability in relation to the purchase. Refer to Note 29 - Contingent Liabilities for further information.
The fair value of the identifiable assets and liabilities of PT Joyseed Berbagi Sukses as at the date of acquisition were:
Consideration (including shares and deferred consideration subject to performance milestones that
have been adjusted based on probability assessments at transaction date)
Value of assets acquired
Cash
Other assets
Less:
Other liabilities
Non-controlling interest
Fair value of net assets acquired
Goodwill provisionally accounted for
4 Jan 2019
$
235,000
191
20,386
20,577
93,505
(24,066)
(48,862)
283,862
The contribution of PT Joyseed Berbagi Sukses to the consolidated entity's loss was $117,241.
Note 29
Contingent Liabilities
During the 2018 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 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 - 1,999,999.99
2,000,000 - 2,499,999.99
2,500,000 - 2,999,999.99
3,000,000 - 3,499,999.99
3,500,000
Profit Share
10%
20%
30%
40%
50%
50%
As announced on 9 July 2019, the Games have not generated an aggregate Net Games Profit of at least AUD $500,000, hence, no
deferred consideration shares will be issued to AB1.
A dispute has arisen with a third party on an outstanding amount owed by the company for an amount of $357,073 in excess of that recorded by
iCandy. The Company is confident with the amounts recorded and reflected within the financial statements is correct and a payment of an amount
above that recognised is not probable and the recognition of any additional liability at this stage could not be reliably measured.
During the 2019 financial year, the Company completed its purchase of 67% of PT Joyseed Berbagi Sukses, an Indonesian mobile gaming
development studio. There is a contingent liablity in relation to the purchase and is listed below:
Performance Payments
-
If within 24 months from the completion date, PT Joyseed Berbagi Sukses achieves a revenue milestone of AUD$350,000, the Company
will issue AUD $100,000 worth of the Company's shares to the Vendors within 10 Business days, issued at the Issue Price of $0.09 per
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
55
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 712
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Note 30
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
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
56
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 871 72
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 applicable to the entity, 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 2019 and of the performance for the
year ended on that date of the consolidated group;
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.
2.
3.
Director
Dated this
Mr Kin Wai Lau
31 March 2020
iCandy Interactive Limited Financial Report for the year ended 31 December 2019
57
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 2019, 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 2019 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.
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 $2,323,035 during the year ended 31 December 2019. 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
intangible assets of $1,747,035 after
has
impairment charges of $180,000.
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 22)
During the year ended 31 December 2019, the
Company incurred share based payments totalling
$542,133.
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;
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
Black-Scholes
Valuation Models and assessing the assumptions
management’s
the value of the transactions;
and inputs used;
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 $1,415,336, as disclosed in
Note 10.
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 24 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 2019, 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.
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.
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
2019. 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 2019, complies with
section 300A of the Corporations Act 2001.
BENTLEYS
Chartered Accountants
MARK DELAURENTIS CA
Partner
Dated at Perth this 31st day of March 2020
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 604 871 712
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
The following information is current as at 25 March 2020:
1.
a.
b.
c.
Shareholding
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
46
177
353
140
786
4,160
166,343
1,617,935
14,733,113
320,995,482
337,517,033
The number of shareholdings held in less than marketable parcels is 507 (2018: 154).
The names of the substantial shareholders listed in the holding company’s register are:
Shareholder
Fatfish Internet Pte Ltd
Animoca Brands Limited
d.
Voting Rights
Number
No. of Fully Paid
Ordinary Shares
% Held of Issued
Ordinary Capital
187,500,001
26,650,000
55.55%
7.89%
The voting rights attached to each class of equity security are as follows:
Ordinary shares
–
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a
meeting or by proxy has one vote on a show of hands.
e.
20 Largest Shareholders — Ordinary Shares
Name
Fatfish Internet Pte Ltd
Animoca Brands Limited
HSBC Custody Nominees (Australia) Limited
RHB Securities Singapore Pte Ltd
Esports.Com Group AG
Fatfish Medialab Pte Ltd
Lead Nation Holdings Limited
Incubate Fund 1-G Limited Partnership
Citicorp Nominees Pty Limited
BNP Paribas Noms Pty Ltd
Blue Boat Group Limited
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12. Mr Jason Jon Boyer
13.
14.
15.
Lead Nation Holdings Limited
Tan Choon Huat
Ms Nicole Gallin & Mr Kyle Haynes
Harford Vantage (Australia) Pty Ltd
16.
17. Mr Zhenlong Liang
18.
19.
20.
Kie Seik Phai Roland
Quek Seow Kee
Hoo Jia Ling
Number of Ordinary
Fully Paid Shares
Held
187,500,001
26,650,000
12,357,158
7,759,117
6,815,091
5,000,000
4,163,477
4,140,056
3,776,789
3,192,238
2,757,283
2,710,697
2,580,000
2,535,371
2,500,000
2,191,464
1,594,059
1,594,059
1,463,642
1,425,971
282,706,473
% Held
of Issued
Ordinary Capital
55.55%
7.89%
3.66%
2.30%
2.02%
1.48%
1.23%
1.23%
1.12%
0.95%
0.82%
0.80%
0.76%
0.75%
0.74%
0.65%
0.47%
0.47%
0.43%
0.42%
83.74%
ICANDY INTERACTIVE LIMITED AND CONTROLLED ENTITIES
ABN: 87 604 604 871 712
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
2.
3.
4.
5.
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
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.