Annual Report
30 June 2015
ABN 93 075 419 715
(Formerly known as Otis Energy Limited)
Contents
1
iSignthis Ltd
Contents
30 June 2015
Corporate directory
Chairman’s letter
Letter from the Managing Director
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 to the members of iSignthis Ltd
Shareholder information
2
3
4
6
22
25
26
27
28
29
53
54
55
2
Corporate Directory
Corporate directory
iSignthis Ltd - 30 June 2015
Directors
Timothy Hart
(Non-Executive Chairman)
Nickolas John Karantzis
(Managing Director)
Barnaby Egerton-Warburton
(Non-Executive Director)
Scott Minehane
(Non-Executive Director)
Company secretary & CFO
Todd Richards
Registered office
Share register
Auditor
456 Victoria Parade
East Melbourne, VIC, 3002
Link Market Services
Level 12, 680 George Street
Sydney, NSW, 2000
Hayes Knight Audit Pty Ltd
Level 12, 31 Queen Street
Melbourne, VIC, 3000
Stock exchange listing
iSignthis Ltd shares are listed on the Australian
Securities Exchange (ASX code: ISX)
(ASX code options: ISXO)
Website
www.isignthis.com
Chairman’s Letter
3
Letter from Chairman
Signthis Ltd - 30 June 2015
Dear Shareholders,
When iSignthis was founded, we set out to significantly impact the online payment chain by
mitigating Card Not Present fraud whilst streamlining the payment process. The scope of
our service has expanded considerably since that time and we now enter new markets by
providing a pure online solution whereby AML obligated entities are able to identify and on
board customers to meet regulatory requirements. The past year has seen the company take
tremendous strides in achieving our fundamental goals.
In March this year we officially began trading under our own code, ISX, on the Australian Stock
Exchange following the reverse acquisition of Otis Energy Limited (OTE).
As part of the acquisition agreement and change of direction of the Company, the following
Board appointments were made;
• Mr. Timothy Hart – Non Executive Chairman
• Mr. Nickolas (John) Karantzis – Managing Director and CEO
• Mr. Scott Minehane – Non Executive Director
On completion of the acquisition, Mr. Harry Hill and Mr. Winton Willesee resigned as directors
of the Company. Mr. Barnaby Egerton-Warburton remains on the Board but has transitioned
from Managing Director to Non-Executive Director.
Since the re-listing we have signed on numerous new customers and business partners, had
patents granted in new jurisdictions and started the process of full product launch with our
early adopter clients.
iSignthis operates in a particularly dynamic global environment. The way that business is
conducted, people consume and governments regulate, is constantly evolving. Innovation
and disruption are at the heart of everything we do and our solutions are not built just to
accommodate change but to facilitate it. iSignthis remains the only company offering identity
proofing of persons in conjunction with payment services.
The values that are central to our operations and our solution that is built to thrive in its
dynamic environment, ensure that iSignthis sustains its competitive advantage into the future.
And what an exciting future it is!
I would like to express our sincere appreciation to our shareholders on behalf of the iSignthis
Board of Directors, Management team and talented employees. We look forward to sharing
our success with you as we continue to grow.
Tim Hart
Non-Executive Chairman
4
Managing Director’s Letter
Letter from Managing Director
Signthis Ltd - 30 June 2015
Dear Shareholders,
I am pleased to present to you this review of iSignthis’ progress for the Financial Year ended
30 June 2015.
The reports and information that follow reflect the significant transition of the Company from
Otis Energy Limited to iSignthis Ltd as approved by shareholders on 22 December 2014. The
transition being finalised on 16 March 2015 with the completion of the acquisition of iSignthis
and the re-listing of the Company as iSignthis Ltd and trading under the new code of ISX.
Key achievements this year include:
•
•
•
The Company successfully raised $3.1m by way of an oversubscribed public offer.
iSignthis began trading as ISX on the Australian Stock Exchange on 16 March 2015.
Further Patents granted in New Zealand, South Africa and Singapore increasing the
number of jurisdictions in which patents are held to 19
• PCI Certification achieved allowing global interconnection with bank and card schemes
•
•
Independent legal advice confirming validity of process to meet AML/CTF requirements in
various key geographic markets
Expansion of sales and business development department, by vertical, market sector and
geographic spread
• Approaching full launch for existing clients including eMerchantPay, Adelante and
SolidTrustPay.
• Agreements signed with partner companies including IPGPay
The Year in Review
The Company’s results reflect a considerable change in operations as the Company transitioned
and divested its oil and gas exploration assets (under the former entity of Otis Energy Limited) and
acquired online payment and identity authentication service provider, iSignthis Ltd.
Operations
Following the re-listing in March 2015, the Company has focused on key operational elements
of business development growth and delivery of services to existing and new customers.
growth and delivery of services to existing and new customers.
Extensive marketing and promotion of the iSignthis evidence of identity (EOI) and strong customer
authentication (SCA) services by way of presentation at key finance and anti-money laundering
conferences has delivered a strong sales pipeline of opportunities. Since re-listing, agreements have
been finalised with e-Wallet provider SolidTrustPay as well as a partner agreement with IPGPay.
These clients, along with previously signed customers eMerchantPay, Adelante and Assurity
are now in the final stages of service implementation and processing of transactions.
The iSignthis business development team continues to actively pursue new customers and partners in
order to build scale and generate significant transaction processing output as soon as possible.
Managing Director’s Letter
5
We look forward to making further announcements once agreements are finalised.
Financial Position
At the end of the year the Company had cash at bank of $2.267m. This position reflects
the operating costs incurred post relisting and the payment of transaction costs
associated with the capital raising.
Outlook
Over the last year we have gradually grown in number and geographic reach of employees.
One of our key goals for the second half of this year was to recruit people who shared our
values to help us expand operations and awareness globally. We are extremely proud of
the talent that we have attracted to join iSignthis and believe this is a testament to our
technology, internal culture and the strength of the opportunities that lay ahead.
Every effort is now focused on growth. We have a significant first mover advantage
in regards to the delivery of a truly online customer identity service. We now strive to
deliver an outstanding product to existing customers, expand our customer list and
deliver revenues in the 2016 FY.
The key focus and short-term objectives include:
•
Transaction flow from existing customers to commence in August 2015 resulting in
the first reportable recurring revenues and cash input.
• Business Development will continue to be a major focus for the iSignthis team.
Building on opportunities created and looking at closing and announcing new
agreements with direct customers, strategic channel partners and referrers.
• An announcement was released on 14 July 2015 advising of a new channel partner
agreement with The Flying Merchant enabling the automation of KYC and to
mitigate payment risk for high-risk businesses.
•
Technical deployment and delivery of services based on newly signed agreements.
• Continuing R&D of potential new products and services – adding to the disruption
of existing processes within the financial services industry.
•
Further exposure of the iSignthis brand by way of targeted participation in
conferences and finance related events.
I would like to thank our exceptional team who share the iSignthis vision and contribute
to our operational success. I would also like to express gratitude on behalf of everyone
at iSignthis to our shareholders for the support that enables us to grow and provide
payment solutions we are passionate about.
You can be assured that the Board, Management and iSignthis team are dedicated to delivering
value to our shareholders and we look forward to keeping you informed of our progress.
N.J. (John) Karantzis
Managing Director and CEO
6
Director’s Report
Report from Director’s
Signthis Ltd - 30 June 2015
The Directors present their report, together with
the financial statements, on the consolidated entity
(referred to hereafter as the 'consolidated entity')
consisting of iSignthis Ltd (referred to hereafter as
the 'company' or 'parent entity') and the entities it
controlled at the end of, or during, the year ended
30 June 2015.
Directors
The following persons were directors of iSignthis Ltd
during the whole of the financial year and up to the
date of this report, unless otherwise stated:
• Mr Tim Hart
(appointed 22 December 2014)
• Mr Nickolas John Karantzis
(appointed 22 December 2014)
• Mr Scott Minehane
(appointed 22 December 2014)
• Mr Barnaby Egerton-Warburton
(resigned as the Managing Director 22 December
2014 and appointed Non-Executive Director 22
December 2014)
• Mr Winton Willesee
(resigned 22 December 2014)
• Mr Harry Hill
(resigned 22 December 2014)
Principal activities
The main focus during the financial year was
completing the acquisition of iSignthis group which
was completed on 9 March 2015.
iSignthis is an Australian based business which
has been granted USA, European, South African
and Australian patents that significantly enhance
online payment security, internet identity,
e-mandates and e-contract validation services,
to safeguard eCommerce operators, and assist
Anti Money Laundering (“AML”) and Counter
Terrorism Funding (“CTF”) obligated entities meet
their compliance requirements. The consolidated
entity has patents pending in several other key
jurisdictions, including China, Hong Kong, South
Korea, Canada, Brazil and India.
Dividends
There were no dividends paid, recommended or
declared during the current or previous financial year.
Review of operations
The loss for the consolidated entity after providing
for income tax amounted to $20,139,425 (30 June
2014: profit of $nil).
Financial Position
The net assets of the consolidated entity increased
by $2,213,495 to $3,472,495 as at 30 June 2015
(2014: $1,259,000). During the financial year, the
company under took an IPO which resulted in
raising $3.1 million before costs, following the
completion of a reverse acquisition of the company
formerly known as Otis Energy Limited (ASX: OTE).
The consolidated entity’s working capital, being
current assets less current liabilities was $2,179,486
at 30 June 2015
(2014: $Nil). During the period the consolidated
entity had a negative cash flow from operating
activities of $1,800,498
(2014: $Nil).
As a result of the above the Directors believe the
consolidated entity is in a strong and stable position
to expand and grow its current operations.
Significant changes in the state of affairs
During the year the consolidated entity entered
into an agreement to sell off its interest in its
subsidiaries incorporated in the United States of
America which held the interests in all Oil and Gas
projects previously.
On 22 December the shareholders approved the
acquisition of 100% of issued capital of iSignthis
BV - (iSignthis) and ISX IP Ltd (ISX). iSignthis is
an Australian based business which has been
granted USA, European, South African and
Australian patents that significantly enhance online
payment security, internet identity, e-mandates
and e-contract validation services, to safeguard
eCommerce operators, and assist Anti Money
Laundering (“AML”) and Counter Terrorism
Director’s Report
7
Funding (“CTF”) obligated entities meet their
compliance requirements. The entity has patents
pending in several other key jurisdictions,
including China, Hong Kong, South Korea, Canada,
Brazil and India.
The consolidated entity changed its name to
iSignthis Ltd following shareholder approval at the
general meeting held on 22 December 2014.
On 22 December 2014 the consolidated entity
lodged a prospectus for the offer of 103,333,333
shares at an issue price of (3 cents) each, to raise
approximately $3,100,000 (before costs).
As consideration for the acquisition of 100% of
the issued capital in iSignthis, the vendor issued
298,333,333 vendor shares (on a post consolidation
basis) to the shareholders of iSignthis.
In addition, the vendor also issued 336,666,667
performance shares (on a post consolidation basis)
based on achievement of the following milestones
within three (3) of completing the transaction:
(i) 112,222,222 Class A Performance Shares –
on achievement of annual revenue of at least
$5,000,000. Annual revenue will be calculated
on annualised basis over a 6 month reporting
period. Class A Performance Shares will expire if
unconverted within three (3) years of completing
the transaction;
(ii) 112,222,222 Class B Performance Shares –
on achievement of annual revenue of at least
$7,500,000. Annual revenue will be calculated
on annualised basis over a 6 month reporting
period. Class B Performance Shares will expire if
unconverted within three (3) years of completing
the transaction; and
(iii) 112,222,223 Class C Performance Shares
– on achievement of annual revenue of at least
$10,000,000. Annual revenue will be calculated on
annualised basis over a 6 month reporting period.
Class C Performance Shares will expire if unconverted
within three (3) years of completing the transaction.
Other key terms of the transaction included the
payment by the vendor to iSignthis, of a non-
refundable Inducement Fee of $50,000, provision,
by the vendor to iSignthis, of a drawdown facility of
up to $300,000 to be immediately available upon
execution of a binding term sheet. Execution of a
binding share sale, intellectual property assignment
and licence agreements between the vendor and
the shareholders of iSignthis and the sale of the
remaining oil and gas assets of the vendor.
On 15 January 2015 the consolidated entity
completed a share consolidation as approved by
shareholders at the general meeting held on the 22
December 2014 to consolidate the issued capital on
a basis of the one share for every ten shares held.
The consolidated entity lodged a Supplementary
Prospectus to provide additional information to
investors on the 29 January 2015. Applicants who
have subscribed for Shares under the Prospectus to
the date of this Supplementary Prospectus were given
the Supplementary Prospectus, and had 1 month
from the date of the Supplementary Prospectus to
withdraw their Application and be repaid.
On 9 March 2015, the company completed the
reverse acquisition with the company issuing
298,333,333 fully paid ordinary shares to the
vendor as approved at the shareholder meeting
held on 22 of December 2014. These shares were
placed in escrow for a period of 24 months from
the date of issue.
On 9 March 2015, the company issued a further
10,000,000 fully paid ordinary shares (to be held in
escrow for a period of 24 months) to the vendor as
part of settlement for the cash shortfall amount under
the terms of the share sale and purchase agreement.
On 15 May 2015 the company issued 3,370,600
fully paid ordinary shares to the iSignthis vendor
as satisfaction of cash shortfall amount as detailed
in the share sale and purchase agreement. The
consolidated entity also issued 30,000,000 unlisted
options to advisors of the company in recognition
of ongoing corporate services provided to the
company, as approved by shareholders at the
company’s general meeting held on the 7 May 2015.
On 16 March 2015 the consolidated entity
reinstated to official quotation and commenced
trading on the ASX trading platform.
On 23 June 2015, the consolidated entity issued
250,000 fully paid ordinary shares following the
exercise of 250,000 options at $0.05 (5 cents) per
option.
There were no other significant changes in the
state of affairs of the consolidated entity during the
financial year.
8
Director’s Report
Matters subsequent to the end of the
financial year
No matter or circumstance has arisen since
30 June 2015 that has significantly affected, or
may significantly affect the consolidated entity’s
operations, the results of those operations, or
the consolidated entity’s state of affairs in future
financial years.
Likely developments and expected results
of operations
Over the last year we have gradually grown in
number and geographic reach of employees. One
of our key goals for the second half of this year was
to recruit people who shared our values to help us
expand operations and awareness globally. We are
extremely proud of the talent that we have attracted
to join iSignthis and believe this is a testament to
our technology, internal culture and the strength of
the opportunities that lay ahead.
Every effort is now focused on growth. We have a
significant first mover advantage in regards to the
delivery of a truly online customer identity service.
We now strive to deliver an outstanding product to
existing customers, expand our customer list and
deliver revenues in the 2016 FY.
“ (our talent) is a testament to our technology,
internal culture and the strength of the
opportunities that lay ahead.”
Director’s Report
9
Information on Directors
Signthis Ltd - 30 June 2015
Name
Mr Timothy Hart
Title
Non-Executive Chairman
(appointed 22 December 2014)
Name
Mr Nickolas John Karantzis
Title
Managing Director
(appointed 22 December 2014)
Qualifications:
Qualifications:
Bsc, MM(T), MMkting, PGDIPSI (Oxon), GAICD, FAIM
B.E. LL.M. M.Enterp FIEAust CPEng EurIng
Experience and expertise
Experience and expertise
Mr. Hart is the Managing Director and Chief Executive
Officer of Ridley Corporation Limited (ASX:RIC). Mr.
Hart was Chief Executive Officer of Sugar Australia and
Sugar New Zealand (joint ventures between Wilmar/
CSR and Mackay Sugar Limited).
Eight years prior to this, Mr. Hart held management
positions with SCA Hygiene Australasia, Carter
Holt Harvey, ACI Plastics Packaging, Amcor Limited
and Pasminco Limited. He has also been Deputy
Chairman of the Australian Food & Grocery Council,
Chaired the Corporate Affairs Committee and was a
Director of the World Sugar Research organisation.
Mr. Hart currently Chairs the AFGC Agribusiness
Forum and is a Director of not for profits National
Association of Women in Operations (NAWO)
and Enactus (SIFE). Mr. Hart has an extensive
background of senior management, in the
agribusiness, food, resources, automotive and
packaging industries across Australia, New Zealand,
Europe and Asia.
Mr. Karantzis holds qualifications in engineering
(University of Western Australia), law and business
(University of Melbourne and University of
Melbourne Business School).
He is a founder of iSignthis, and has been leading
the sales effort whilst developing the intellectual
property to its commercialised state. Mr. Karantzis
has over 20 years’ experience in a number of
sectors, including online media, defence and
communications, with a background in secure
communications.
His previous public company experience includes
directorships with ASX listed Pacific Star Network
Limited (ASX:PNW) and Reeltime Media Limited
(ASX:RMA).
Other current directorships:
Nil
Former directorships (last 3 years)
Other current directorships:
Nil
Ridley Corporation Limited (ASX:RIC)
Special responsibilities:
Former directorships (last 3 years)
Nill
Nil
Special responsibilities:
Interests in shares:
Nill
Chairman, Member of the Audit & Risk Committee
and Chairman of the Remuneration Committee
Interests in shares:
Nill
10
Name
Director’s Report
Name
Mr Scott Minehane
Mr Barnaby Egerton-Warburton
Title
Non-Executive Director
(appointed 22 December 2014)
Title
Non-Executive Director
(resigned as managing director on 22 December 2014)
Qualifications:
Qualifications:
Bsc, MM(T), MMkting, PGDIPSI (Oxon), GAICD, FAIM
B. Ec. GAICD
Experience and expertise
Experience and expertise
Mr. Minehane has international regulatory and
strategy experience in the telecommunications
sector and has been involved in advising investors,
telecommunications operators, Governments and
regulators in Australia, Asia, the Pacific and South
Africa for over 25 years. He is also an independent
director of ASX listed Etherstack plc (ASX:ESK)
which specialises in wireless technology including
waveforms and public mobile radio solutions.
Mr Egerton-Warburton holds a Bachelor of
Economics Degree and is a graduate of the
Australian Institute of Company Directors. He
has over 20 years of trading, investment banking,
international investment and market experience.
He has held positions with global investment
banks in Hong Kong, New York and Sydney
including JPMorgan, Banque Nationale de Paris and
Prudential Securities.
Mr. Minehane has a Bachelor of Economics and a
Bachelor of Laws from the University of Queensland
and holds a Master of Laws, specialising in
Communications and Asian Law from the University
of Melbourne.
Other current directorships:
Etherstack plc (ASX:ESK)
(appointed 2 May 2012)
Other current directorships:
Eneabba Gas Limited (ASX : ENB) and DMY Capital
Ltd (ASX : AMY)
Former directorships (last 3 years)
1-Page Limited (ASX : 1PG)
(resigned 9 October 2014)
Special responsibilities:
Former directorships (last 3 years)
Member of REM and Audit & Risk Committee
Nil
Interests in shares:
Special responsibilities:
2,762,224 fully paid ordinary shares
Chairman of the Audit and Risk Committee
Interests in options:
Interests in shares:
Nill
2,446,547 listed $0.50 (50 cents) options expiring 31
December 2015
‘Other current directorships’ quoted in this document are current directorships for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
‘Former directorships (last 3 years)’ quoted in this document are directorships held in the last 3 years for listed entities only
and excludes directorships of all other types of entities, unless otherwise stated.
Director’s Report
Name
Mr Harry Hill
Title
11
Name
Mr Winton Willesee
Title
Non-Executive Chairman
(resigned 22 December 2014
Non-Executive Director and Company
(resigned 22 December 2014)
Qualifications:
CPA, FCIS
Experience and expertise
Harry is a Certified Practising Accountant and
Fellow of the Chartered Institute of Secretaries.
He has over 35 years experience as a Director
and Company Secretary of several publicly listed
companies involved in oil and gas exploration,
mining and mineral exploration.
Other current directorships:
Nil
Former directorships (last 3 years)
Nil
Special responsibilities:
Chairman of the Audit and Risk Committee
Interests in shares:
31,500 fully paid ordinary shares
Interests in options:
200,000 listed $0.50 (50 cents) options expiring 31
December 2015
Qualifications:
BBus., DipEd., PGDipBus., MCom., FFin, CPA, MAICD,
ACIS/ACSA
Experience and expertise
Mr Willesee is an experienced company director
and company secretary. Mr Willesee brings a broad
range of skills and experience in strategy, company
development, corporate governance, company
public listings, merger and acquisition transactions
and corporate finance. Mr Willesee holds a Master
of Commerce, Post-Graduate Diploma in Business
(Economics and Finance), a Graduate Diploma in
Applied Corporate Governance, a Graduate Diploma
in Applied Finance and Investment, a Graduate
Diploma in Education and a Bachelor of Business.
He is a Fellow of the Financial Services Institute of
Australasia, a Member of the Australian Institute of
Company Directors a Member of CPA Australia and a
Chartered Secretary.
Other current directorships:
Chairman of Birimian Gold Limited
(appointed 31 January 2013), Coretrack Limited
(appointed 4 October 2010), Cove Resources Limited
(appointed 4 June 2008) and Metallum Limited
(appointed 14 March 2011)
Former directorships (last 3 years)
Bioprospect Limited (retired 15 September 2013),
Base Resources Limited (retired 26 November 2013),
Torrens Energy Limited (retired 2 May 2014) and
Newera Resources Limited (resigned 31 July 2014).
Special responsibilities:
Nil
Interests in shares:
975,000 fully paid ordinary shares
Interests in options:
1,231,250 listed $0.50 (50 cents) cent options
expiring 31 December 2015December 2015
12
Director’s Report
Company Secretary
Todd Richards is a co-founder of iSignthis,
and a Certified Practising Accountant with
more than 20 years experience in statutory
corporations and international and ASX listed
companies. His experience has been gained in
a number of industries including manufacturing,
logistics, professional sport, IT, online media
and telecommunications. Todd’s previous public
company experience includes executive and
Company Secretary roles with ASX listed Destra
Corporation Limited (ASX:DES) and Reeltime Media
Limited (ASX:RMA).
Meetings of directors
The number of meetings of the company’s Board of
Directors (‘the Board’) and of each Board committee
held during the year ended 30 June 2015, and the
number of meetings attended by each director were:
Key management personnel are those persons
having authority and responsibility for planning,
directing and controlling the activities of the entity,
directly or indirectly, including all directors.
The remuneration report is set out under the following
main headings:
•
Principles used to determine the nature and
amount of remuneration
• Details of remuneration
•
•
Service agreements
Share-based compensation
• Additional disclosures relating to key management
personnel
Full Board
Nomination and
Remuneration
Committee
Audit and Risk Committee
Attended
Held
Attended
Held
Attended
Held
Mr Timothy Hart
Mr S Minehane
Mr B Egerton-Warburton
Mr NJ Karantzis
Mr W Willesee
Mr H Hill
6
6
13
6
7
7
6
6
13
6
7
7
1
1
1
-
-
-
1
1
1
-
-
-
1
1
1
-
-
-
1
1
1
-
-
-
Held: represents the number of meetings held
during the time the director held office or was a
member of the relevant committee.
Remuneration report (audited)
The remuneration report details the key
management personnel remuneration
arrangements for the consolidated entity,
in accordance with the requirements of the
Corporations Act 2001 and its Regulations.
Principles used to determine the nature and amount
of remuneration
The objective of the consolidated entity’s executive
reward framework is to ensure reward for
performance is competitive and appropriate for the
results delivered. The framework aligns executive
reward with the achievement of strategic objectives
and the creation of value for shareholders, and
conforms to the market best practice for the
delivery of reward.
Director’s Report
13
The Board of Directors (‘the Board’) ensures that
executive reward satisfies the following key
criteria for good reward governance practices:
not present at any discussions relating to the
determination of his own remuneration.
competitiveness and reasonableness
Executive remuneration
•
•
acceptability to shareholders
• performance linkage / alignment of executive
compensation
•
transparency
The Nomination and Remuneration Committee
is responsible for determining and reviewing
remuneration arrangements for its directors and
executives. The performance of the consolidated
entity depends on the quality of its directors and
executives. The remuneration philosophy is to
attract, motivate and retain high performance and
high quality personnel.
Alignment to shareholders’ interests:
• has economic profit as a core component of
plan design
•
focuses on sustained growth in shareholder
wealth, consisting of dividends and growth in
share price, and delivering constant or increasing
return on assets as well as focusing the executive
on key non-financial drivers of value
•
attracts and retains high calibre executives
In accordance with best practice corporate
governance, the structure of non-executive directors
and executive remunerations are separate.
Non-executive directors remuneration
•
Fees and payments to non-executive directors
reflect the demands and responsibilities of their
role. Non-executive directors’ fees and payments
are reviewed annually by the Nomination and
Remuneration Committee. The Nomination and
Remuneration Committee may, from time to time,
receive advice from independent remuneration
consultants to ensure non-executive directors’
fees and payments are appropriate and in
line with the market. The chairman’s fees are
determined independently to the fees of other
non-executive directors based on comparative
roles in the external market. The chairman is
The consolidated entity aims to reward executives
with a level and mix of remuneration based on their
position and responsibility, which has both fixed and
variable components.
The executive remuneration and reward
framework has three components:
• base pay and non-monetary benefits
•
share-based payments
• other remuneration such as superannuation
and long service leave
The combination of these comprises the executive’s
total remuneration.
Fixed remuneration, consisting of base salary,
superannuation and non-monetary benefits,
are reviewed annually by the Nomination and
Remuneration Committee, based on individual and
business unit performance, the overall performance
of the consolidated entity and comparable market
remunerations.
Executives may receive their fixed remuneration in
the form of cash or other fringe benefits (for example
motor vehicle benefits) where it does not create
any additional costs to the consolidated entity and
provides additional value to the executive.
Following the issue of shares and performance
shares for the initial acquisition of iSignthis B.V.
and ISX IP Ltd (together known as “iSignthis”) the
board of directors of the consolidated entity have
concluded that as they are still in early stages
of operations, both STI and LTI share based
payments are not yet appropriate. The board
will continue to monitor and review its decision
as the consolidated entity progresses and reaches
further milestones.
Consolidated entity performance and link to
remuneration
Remuneration for certain individuals is not directly linked
to performance of the consolidated entity. An individual
member of staff’s performance assessment is done by
14
Director’s Report
reference to their contribution to the Company’s overall
operational achievements. All Directors and Executives
hold shares and options in the Company to facilitate
goal congruence between Executives with that of the
business and shareholders.
The Nomination and Remuneration Committee
is of the opinion that the continued improved
results can be attributed in part to the adoption
of performance based compensation and is
satisfied that this improvement will continue to
increase shareholder wealth if maintained over
the coming years.
Voting and comments made at the company’s
5 November 2014 Annual General Meeting
(‘AGM’ At the 5 November 2014 AGM, 99.98%
of the votes received supported the adoption
of the remuneration report for the year ended
30 June 2014. The company did not receive
any specific feedback at the AGM regarding its
remuneration practices.
Details of remuneration
The proportion of remuneration linked to
performance and the fixed proportion are
as follows:
Amounts of remuneration
Details of the remuneration of key management
personnel of the consolidated entity are set out in
the following tables.
The remuneration table listed below comprises
of 12 months of remuneration of iSignthis B.V.
and ISX IP Ltd (together known as “iSignthis”) and
approximately 4 months of ISX from the acquisition
date of 9 March 2015.
Short-term benefits
Post em-
ployment
benefits
Long-term
benefits
Share-
based
payments
Cash
salary
and fees
$
20,000
13,333
13,333
2015
Non-Executive Directors:
Mr Timothy Hart
Mr Scott Minehane
Mr Barnaby Egerton-
Warburton
Executive Directors:
Mr Nickolas John Karantzis
200,773
Other Key Management
Personnel:
Mr Todd Richards
155,700
403,139
Cash
bonus
$
Non-
monetary
$
Super-
annuation
$
Long
service
leave
$
Equity-
settled
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,900
1,267
1,267
-
8,550
12,984
-
-
-
-
-
21,900
14,600
14,600
200,773
-
164,250
416,123
Director’s Report
15
Details/Amounts of remuneration
The remuneration table listed below relates to
that of the legal parent entity (iSignthis Ltd) for
the period 1 July 2014 to the date of the reverse
acquisition 9 March 2015. The 2014 comparatives
remuneration table have also been included as
signed off in the 2014 Annual Report
Short-term benefits
Post em-
ployment
benefits
Long-term
benefits
Share-
based
payments
Cash
salary
and fees
$
Cash
bonus
$
Non-
monetary
$
Super-
annuation
$
Long
service
leave
$
Equity-
settled
$
Total
$
-
-
-
-
-
10,000
6,667
27,000
12,000
82,015
137,682
-
-
-
-
-
-
-
-
-
-
950
633
-
-
3,907
5,490
-
-
-
-
-
10,950
7,300
27,000
12,000
85,922
143,172
2015
Non-Executive Directors:
Mr Timothy Hart
Mr Scott Minehane
Harry Hill
Winton Willesee*
Executive Directors:
Barnaby Egerton
Warburton
*Payments exclude amounts paid for Company Secretarial services provided which amounted to $24,600 for the year. An additional
amount of $6,000 was paid to a company associated with Mr Winton Willesee for providing office services.
16
Director’s Report
Short-term benefits
Post em-
ployment
benefits
Long-term
benefits
Share-
based
payments
2014
Non-Executive Directors:
Harry Hill
Winton Willesee*
Executive Directors:
Barnaby Egerton
Warburton
Cash
salary
and fees
$
54,000
35,700
190,144
279,844
Cash
bonus
$
Non-
monetary
$
Super-
annuation
$
Long
service
leave
$
Equity-
settled
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
19,218
19,218
-
-
-
54,000
35,700
209,362
299,062
*Payments exclude amounts paid for Company Secretarial services provided which amounted to $52,800 for the year. An additional
amount of $12,000 was paid to a company associated with Mr Winton Willesee for providing office services.
Fixed remuneration
At risk - STI
At risk - LTI
2015
2014
2015
2014
2015
2014
Name
Non-Executive Directors:
Mr Timothy Hart
Mr Scott Minehane
Mr Barnaby Egerton-
Warburton
Executive Directors:
100%
100%
100%
-%
-%
-%
Mr Nickolas John Karantzis
100%
-%
Other Key Management
Personnel:
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
Mr Todd Richards
100%
-%
-%
-%
--%
-%
-%
-%
-%
-%
Director’s Report
17
Service agreements
Details:
Remuneration and other terms of employment
for key management personnel are formalised in
service agreements. Details of these agreements
are as follows:
Name:
Mr. Nickolas John Karantzis
Title:
Managing Director
Term of aggreement:
24 months
Details:
The proposed terms of Mr. Karantzis Executive
Services Agreement for the position of
Managing Director and Chief Executive Officer
will include a term of twenty four (24) months,
with a termination period of six (6) months by
either party, a director’s fee and base salary
totalling $200,000 per annum, plus statutory
superannuation entitlements, and domicile
portability provisions. The agreement shall
recognise one month of accrued annual leave,
and participation in the employee incentive plan.
Name:
Mr. Todd Richards
Title:
The proposed terms of Mr. Richards’ Executive
Services Agreement for the position of Chief Financial
Officer and Company Secretary of the Company
will include a term of twenty four (24) months, with
a termination period of three (3) months by either
party, a base salary of $180,000 per annum, plus
statutory superannuation entitlements, and domicile
portability provisions. The agreement provides for
participation in the employee incentive plan.
Key management personnel have no entitlement
to termination payments in the event of removal
for misconduct.
Share-based compensation
Issue of shares
There were no shares issued to directors and other
key management personnel as part of compensation
during the year ended 30 June 2015.
Options
There were no options over ordinary shares issued
to directors and other key management personnel
as part of compensation that were outstanding as
at 30 June 2015.
There were no options over ordinary shares
granted to or vested by directors and other key
management personnel as part of compensation
during the year ended 30 June 2015.
Additional disclosures relating to key management
personnel
Chief Financial Officer and Company Secretary
Shareholding
Term of aggreement:
24 months
The number of shares in the company held during
the financial year by each director and other
members of key management personnel of the
consolidated entity, including their personally
related parties, is set out below:
18
Director’s Report
Balance at
the start of
the year
Received
as part of
remuneration
Additions
Disposals/
Other*****
Balance at
the end of
the year
Ordinary Shares
Barnaby Egerton-
Warburton*
26,955,562
Winton Willesee **
9,750,000
Harry Hill ***
Mr Tim Hart ****
Mr Nickolas John
Karantzis ****
Mr Scott Minehane ****
-
-
-
-
-
-
-
-
-
-
66,667
(24,260,005)
2,762,224
-
(9,750,000)
315,000
(315,000)
-
-
-
-
-
-
-
-
-
-
-
36,705,562
381,667
(34,325,005)
2,762,224
*
**
***
****
On 15 January 2015 the company completed a consolidation of capital on a basis of one for ten shares held in
the company which is shown above as disposals/other.
Resigned as Director and company secretary on 22 December 2014
Resigned as Director on 22 December 2014
During the financial year iSignthis Ltd (formerly Otis Energy Limited) (the “acquiree”) completed the acquisition
of iSignthis B.V. and ISX IP Ltd (together known as "iSignthis")(“acquirer”). The acquiree issued a total of
311,703,933 fully paid ordinary shares to the acquirer in as consideration for the transaction. These members
of the Key Management Personnel hold an interest in the acquirer.
*****
The disposals/other column represents the post - consolidation share movement and also the members of
Key Management Personal who resigned during the year that no longer require disclosure.
Director’s Report
Option holding
The number of options over ordinary shares in the
company held during the financial year by each
director and other members of key management
personnel of the consolidated entity, including their
personally related parties, is set out below:
19
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
Other****
Balance at
the end of
the year
Options over ordinary shares
Barnaby Egerton-
Warburton*
24,465,464
Winton Willesee **
12,312,500
Harry Hill ***
2,000,000
-
-
-
38,777,964
-
-
-
-
(22,018,917)
2,446,547
(12,312,500)
(2,000,000)
-
-
(36,331,417)
2,446,547
*
**
***
****
*****
On 15 January 2015 the company completed a consolidation of capital on a basis of one for ten options held
in the company which is shown above as disposals/other.
Resigned as Director and company secretary on 22 December 2014
Resigned as Director on 22 December 2014
The Expired/forfeited/other column represents the post - consolidation option movement and also the
members of Key Management Personal who resigned during the year that no longer require disclosure.
The disposals/other column represents the post - consolidation share movement and also the members of
Key Management Personal who resigned during the year that no longer require disclosure.
20
Director’s Report
This concludes the remuneration report, which
has been audited.
Shares under option
Unissued ordinary shares of iSignthis Ltd under
option at the date of this report are as follows:
Grant date
Expiry date
Exercise price
Number
under option
February 2011 to June 2011
31 December 2015
$0.500
18,605,045
1 March 2013
1 March 2016
$0.050
750,000
7 May 2015
13 May 2017
$0.040
30,000,000
49,355,045
Following a consolidation of capital which occurred
on the 15 January 2015 on a one for ten basis,
all options on issue at this date were adjusted
accordingly. On 7 May 2015 at the shareholder
general meeting, 30,000,000 adviser options were
issued at $0.0001 (0.01 cent) per option with an
exercise price of $0.04 (4 cents) per option.
No person entitled to exercise the options had or
has any right by virtue of the option to participate
in any share issue of the company or of any other
body corporate.
Shares issued on the exercise of options
The following ordinary shares of iSignthis Ltd were
issued during the year ended 30 June 2015 and
up to the date of this report on the exercise of
options granted:
Date options granted
Exercise price
Number of
1 March 2015*
$0.050
250,000
*
On the 23 June 2015 250,000 fully paid ordinary shares were issued following the exercise of 250,000 options
at $0.05 (5 cents) per option.
Director’s Report
21
Indemnity and insurance of officers
The company has indemnified the directors and
executives of the company for costs incurred, in
their capacity as a director or executive, for which
they may be held personally liable, except where
there is a lack of good faith.
During the financial year, the company paid a
premium in respect of a contract to insure the
directors and executives of the company against a
liability to the extent permitted by the Corporations
Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the
amount of the premium.
Indemnity and insurance of auditor
The company has not, during or since the end of the
financial year, indemnified or agreed to indemnify
the auditor of the company or any related entity
against a liability incurred by the auditor.
During the financial year, the company has not paid
a premium in respect of a contract to insure the
auditor of the company or any related entity.
Proceedings on behalf of the company
No person has applied to the Court under section
237 of the Corporations Act 2001 for leave to
bring proceedings on behalf of the company,
or to intervene in any proceedings to which the
company is a party for the purpose of taking
responsibility on behalf of the company for all or
part of those proceedings.
Non-audit services
Details of the amounts paid or payable to the
auditor for non-audit services provided during the
financial year by the auditor are outlined in note 21
to the financial statements.
The directors are satisfied that the provision of
non-audit services during the financial year, by
the auditor (or by another person or firm on the
auditor’s behalf), is compatible with the general
standard of independence for auditors imposed by
the Corporations Act 2001.
The directors are of the opinion that the services
as disclosed in note 21 to the financial statements
do not compromise the external auditor’s
independence requirements of the Corporations
Act 2001 for the following reasons:
•
all non-audit services have been reviewed and
approved to ensure that they do not impact the
integrity and objectivity of the auditor; and
• none of the services undermine the general
principles relating to auditor independence
as set out in APES 110 Code of Ethics for
Professional Accountants issued by the
Accounting Professional and Ethical Standards
Board, including reviewing or auditing the
auditor’s own work, acting in a management
or decision-making capacity for the company,
acting as advocate for the company or jointly
sharing economic risks and rewards.
Officers of the Company who are former audit
partners of Hayes Knight Audit Pty Ltd
There are no officers of the Company who are
former audit partners of Hayes Knight Audit Pty Ltd.
Auditor’s independence declaration
A copy of the auditor’s independence declaration
as required under section 307C of the Corporations
Act 2001 is set out on the following page.
Auditor
Hayes Knight Audit Pty Ltd continues in office in
accordance with section 327 of the Corporations
Act 2001.
This report is made in accordance with a resolution
of directors, pursuant to section 298(2)(a) of the
Corporations Act 2001.
On behalf of the directors
N.J. (John) Karantzis
Managing Director and CEO
25 August 2015
“Every effort is now focused on
growth. We have a significant first
mover advantage in regards to the
delivery of a truly online customer
identity service.
We now strive to deliver an
outstanding product to existing
customers, expand our customer
list and deliver revenues in the
2016 FY.”
N.J. (John) Karantzis
Managing Director and CEO
25 August 2015
Consolidation Statement of Cash Flows
25
Consolidation Statement of profit or loss and other
comprehensive Income for the year ended
Signthis Ltd - 30 June 2015
Revenue
Expenses
Listing expense on reverse acquisition
Corporate expenses
Advertising & marketing
Employee benefits expense
Research & development expenses
Depreciation expense
Other expense
Operating Costs
Share based payments
Net realised foreign exchange loss
Finance costs
Loss before income tax expense
Income tax expense
Loss after income tax expense for the year attributable to the
owners of iSignthis Ltd
Other comprehensive income
Items that may be reclassified subsequently to profit or loss.
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to the
owners of iSignthis Ltd
Consolidated
2015
$
28,962
(13,652,805)
(695,417)
(145,132)
(643,351)
(15,805)
(7,305)
(369,169)
(23,619)
(4,601,216)
(12,482)
(2,086)
(20,139,425)
-
(20,139,425)
-
(5,818)
(5,818)
(20,145,243)
Note
5
6
-
-
-
-
7
-
7
7
-
7
8
-
-
-
-
-
2014
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Basic earnings per share
Diluted earnings per share
30
30
Cents
(5.17)
(5.17)
Cents
-
-
26
Consolidation Statement of Cash Flows
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other
Total current assets
Non-current assets
Property, plant and equipment
Intangibles
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Employee benefits
Total current liabilities
Non-current liabilities
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Consolidated
Note
2015
$
2014
$
9
10
11
12
13
14
15
-
16
-
-
17
18
2,267,022
32,828
76,479
2,376,329
37,660
-
-
-
-
-
1,259,000
1,259,000
1,296,660
1,259,000
3,672,989
1,259,000
169,291
27,552
196,843
3,651
3,651
200,494
-
-
-
-
-
-
3,472,495
1,259,000
8,916,522
1,259,000
14,695,398
(20,139,425)
-
-
3,472,495
1,259,000
Consolidation Statement of Cash Flows
27
Issued
capital
$
Share based
payments
reserve
$
Accumulated
losses
$
Foreign Cur-
rency
Reserve
$
Total
equity
$
Consolidated
Balance at 1 July 2013
1,259,000
Profit after income tax ex-
pense for the year
Other comprehensive income
for the year, net of tax
Total comprehensive
income for the year
Balance at 30 June 2014
-
-
-
-
Balance at 30 June 2014
1,259,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,259,000
-
-
-
-
1,259,000
Issued
capital
$
Share based
payments
reserve
$
Accumulated
losses
$
Foreign
Currency
Reserve
$
Total
equity
$
-
-
-
-
-
(20,139,425)
-
-
1,259,000
(20,139,425)
-
(5,818)
(5,818)
(20,139,425)
(5,818)
(20,145,243)
Consolidated
Balance at 1 July 2014
1,259,000
Loss after income tax
expense for the year
Other comprehensive income
for the year, net of tax
Total comprehensive income
for the year
Transactions with owners in
their capacity as owners:
Share-based payments
(note 31)
Deemed value of OTE
shares upon acquisition
-
-
-
-
4,791,201
Initial Public Offering (IPO)
3,100,000
Issue of options
Exercise of options
3,000
12,500
4,601,216
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,601,216
4,791,201
3,100,000
3,000
12,500
10,100,000
(249,179)
Performance shares issued
-
10,100,000
Capital raising costs
(249,179)
-
Balance at 30 June 2015
8,916,522
14,701,216
(20,139,425)
(5,818)
3,472,495
28
Consolidation Statement of Cash Flows
Consolidated
Note
2015
$
2014
$
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Other revenue
19,759
(1,829,483)
(1,809,724)
9,104
122
Net cash used in operating activities
28
(1,800,498)
Cash flows from investing activities
Payments for property, plant and equipment
12
(44,965)
Net proceeds of cash and loans from acquisition of business
Net cash from investing activities
Cash flows from financing activities
1,251,981
1,207,016
Proceeds from issue of shares
17
3,115,500
Capital raising costs
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
(249,179)
2,866,321
2,272,839
-
(5,817)
Cash and cash equivalents at the end of the financial year
9
2,267,022
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Notes to the Financial Statements
29
Note 1. General information
The financial statements cover iSignthis Ltd as a
consolidated entity consisting of iSignthis Ltd and
the entities it controlled at the end of, or during,
the year. The financial statements are presented in
Australian dollars, which is iSignthis Ltd’s functional
and presentation currency.
iSignthis Ltd is a listed public company limited by
shares, incorporated and domiciled in Australia.
Its registered office and principal place of
business is:
• AASB 2012-3 Amendments to Australian
Accounting Standards - Offsetting Financial
Assets and Financial Liabilities
• AASB 2013-3 Amendments to AASB 136
- Recoverable Amount Disclosures for Non-
Financial Assets
• AASB 2013-4 Amendments to Australian
Accounting Standards - Novation of Derivatives
and Continuation of Hedge Accounting
• AASB 2013-5 Amendments to Australian
Accounting Standards - Investment Entities
• AASB 2014-1 Amendments to Australian
Accounting Standards (Parts A to C)
456 Victoria Parade
East Melbourne
Victoria, 3002
A description of the nature of the consolidated
entity’s operations and its principal activities are
included in the directors’ report, which is not part of
the financial statements.
The financial statements were authorised for issue,
in accordance with a resolution of directors, on
25 August 2015. The directors have the power to
amend and reissue the financial statements.
Note 2. Significant accounting policies
The principal accounting policies adopted in the
preparation of the financial statements are set out
below. These policies have been consistently applied
to all the years presented, unless otherwise stated.
New, revised or amending Accounting Standards
and Interpretations adopted
The consolidated entity has adopted all of the new,
revised or amending Accounting Standards and
Interpretations issued by the Australian Accounting
Standards Board (‘AASB’) that are mandatory for the
current reporting period.
Any new, revised or amending Accounting
Standards or Interpretations that are not yet
mandatory have not been early adopted.
The adoption of these Accounting Standards and
Interpretations did not have any significant impact
on the financial performance or position of the
consolidated entity.
The following Accounting Standards and Interpretations
are most relevant to the consolidated entity:
Basis of preparation
These general purpose financial statements have
been prepared in accordance with Australian
Accounting Standards and Interpretations issued by
the Australian Accounting Standards Board (‘AASB’)
and the Corporations Act 2001, as appropriate
for for-profit oriented entities. These financial
statements also comply with International Financial
Reporting Standards as issued by the International
Accounting Standards Board (‘IASB’).
Historical cost convention
The financial statements have been prepared
under the historical cost convention, except for,
where applicable, the revaluation of available-
for-sale financial assets, financial assets and
liabilities at fair value through profit or loss,
investment properties, certain classes of
property, plant and equipment and derivative
financial instruments.
Critical accounting estimates
The preparation of the financial statements
requires the use of certain critical accounting
estimates. It also requires management to
exercise its judgement in the process of applying
the consolidated entity’s accounting policies. The
areas involving a higher degree of judgement
or complexity, or areas where assumptions and
estimates are significant to the financial statements,
are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001,
these financial statements present the results of the
consolidated entity only. Supplementary information
about the parent entity is disclosed in note 25.
30
Notes to the Financial Statements
Principles of consolidation
The consolidated financial statements incorporate
the assets and liabilities of all subsidiaries of
iSignthis Ltd (‘company’ or ‘parent entity’) as at 30
June 2015 and the results of all subsidiaries for the
year then ended. iSignthis Ltd and its subsidiaries
together are referred to in these financial
statements as the ‘consolidated entity’.
Subsidiaries are all those entities over which the
consolidated entity has control. The consolidated
entity controls an entity when the consolidated
entity is exposed to, or has rights to, variable
returns from its involvement with the entity and has
the ability to affect those returns through its power
to direct the activities of the entity. Subsidiaries are
fully consolidated from the date on which control is
transferred to the consolidated entity. They are de-
consolidated from the date that control ceases.
Reverse asset acquisition
On 9 March 2015, iSignthis Ltd (formerly Otis
Energy Limited) (“ISX”) completed the acquisition of
identity and authentication service provider iSignthis
B.V. and ISX IP Ltd (together known as “iSignthis”)
(“Acquisition”). The Acquisition has been accounted
for using the principles for reverse acquisitions
in AASB 3 Business Combinations because, as a
result of the Acquisition, the former shareholders of
‘iSignthis’ (the legal subsidiary) obtained accounting
control of ISX (the legal parent).
The Acquisition did not meet the definition of a
business combination in accordance with AASB 3
Business Combinations as acquiree was deemed
not to be a business for accounting purposes
and, therefore, the transaction was not a business
combination within the scope of AASB 3. Instead
the Acquisition has been accounted for as a share-
based payment transaction using the principles of
share based payment transactions in AASB 2, and in
particular the guidance in AASB 2 that any difference
between the fair value of the shares issued by the
accounting acquirer (iSignthis) and the fair value of
the accounting acquiree’s (iSignthis Ltd (formerly Otis
Energy Limited)) identifiable net assets represents a
service received by iSignthis, including payment for a
service of an ASX stock exchange listing which will be
expensed through the consolidated entity’s profit and
loss statement in the 2015 financial year.
Accordingly the consolidated financial report of
ISX has been prepared as a continuation of the
business and operations of iSignthis. As the deemed
accounting acquirer iSignthis has accounted for the
acquisition from 9 March 2015. The comparative
information for the 12 months ended 30 June 2014
presented in the financial report is that of iSignthis.
The impact of the reverse asset acquisition on each
of the primary statements is as follows:
Consolidated statement of comprehensive income:
•
•
The statement for the period ended 30 June
2015 comprises 12 months of operating results
of iSignthis and approximately 4 months of ISX
from the acquisition date of 9 March 2015.
The statement for the period to 30 June 2014
comprises 12 months of iSignthis
Consolidated statement of financial position:
•
•
The consolidated statement of financial position
at 30 June 2015 represents iSignthis and ISX
assets and liabilities as at that date.
The consolidated statement of financial position
at 30 June 2014 represents iSignthis assets and
liabilities as at that date.
Statement of changes in equity:
•
The consolidated statement of changes in equity
for the period ended 30 June 2015 comprises
iSignthis balance at 1 July 2014, its loss for the 12
months and transactions with equity holders for
12 months. It also comprises ISX’s transactions
with equity holders in the past approximately 4
months (to 30 June 2015) and the equity balances
of iSignthis and ISX at 30 June 2015.
•
The consolidated statement of changes in
equity for the period ended 30 June 2014
comprises 12 months of iSignthis
Statement of cash flows:
•
•
The consolidated cash flow statement for the
period ended 30 June 2015 comprises the cash
balance of iSignthis, as at 1 July 2014, the cash
transactions for the 12 months (12 months for
iSignthis and 4 months for ISX and the cash
balance of iSignthis and ISX at 30 June 2015.
The consolidated cash flow statement for the
period ended 30 June 2014 comprises 12
months of iSignthis cash transactions.
Notes to the Financial Statements
31
References throughout the financial statements to
“reverse asset acquisition” are in reference to the
above accounting treatment.
Intercompany transactions, balances and unrealised
gains on transactions between entities in the
consolidated entity are eliminated. Unrealised
losses are also eliminated unless the transaction
provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries
have been changed where necessary to ensure
consistency with the policies adopted by the
consolidated entity.
The acquisition of subsidiaries is accounted for
using the acquisition method of accounting. A
change in ownership interest, without the loss of
control, is accounted for as an equity transaction,
where the difference between the consideration
transferred and the book value of the share of the
non-controlling interest acquired is recognised
directly in equity attributable to the parent.
Where the consolidated entity loses control over
a subsidiary, it derecognises the assets including
goodwill, liabilities and non-controlling interest
in the subsidiary together with any cumulative
translation differences recognised in equity. The
consolidated entity recognises the fair value of the
consideration received and the fair value of any
investment retained together with any gain or loss
in profit or loss.
Operating segments
Operating segments are presented using the
‘management approach’, where the information
presented is on the same basis as the internal
reports provided to the Chief Operating Decision
Makers (‘CODM’). The CODM is responsible for the
allocation of resources to operating segments and
assessing their performance.
Foreign currency translation
The financial statements are presented in Australian
dollars, which is iSignthis Ltd’s functional and
presentation currency.
Foreign currency transactions
Foreign currency transactions are translated
into Australian dollars using the exchange rates
prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the
settlement of such transactions and from the
translation at financial year-end exchange rates
of monetary assets and liabilities denominated in
foreign currencies are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations
are translated into Australian dollars using the
exchange rates at the reporting date. The revenues
and expenses of foreign operations are translated
into Australian dollars using the average exchange
rates, which approximate the rates at the dates
of the transactions, for the period. All resulting
foreign exchange differences are recognised in
other comprehensive income through the foreign
currency reserve in equity.
The foreign currency reserve is recognised in
profit or loss when the foreign operation or net
investment is disposed of.
Revenue recognition
Revenue is recognised when it is probable that the
economic benefit will flow to the consolidated entity
and the revenue can be reliably measured. Revenue
is measured at the fair value of the consideration
received or receivable.
Sale of goods
Sale of goods revenue is recognised at the point of
sale, which is where the customer has taken delivery
of the goods, the risks and rewards are transferred
to the customer and there is a valid sales contract.
Amounts disclosed as revenue are net of sales
returns and trade discounts.
Interest
Interest revenue is recognised as interest accrues
using the effective interest method. This is a method
of calculating the amortised cost of a financial asset
and allocating the interest income over the relevant
period using the effective interest rate, which is the
rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset
to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or
when the right to receive payment is established.
32
Notes to the Financial Statements
Income tax
Current and non-current classification
The income tax expense or benefit for the period
is the tax payable on that period’s taxable income
based on the applicable income tax rate for each
jurisdiction, adjusted by the changes in deferred
tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment
recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised
for temporary differences at the tax rates expected
to be applied when the assets are recovered or
liabilities are settled, based on those tax rates that
are enacted or substantively enacted, except for:
• When the deferred income tax asset or liability
arises from the initial recognition of goodwill or
an asset or liability in a transaction that is not a
business combination and that, at the time of
the transaction, affects neither the accounting
nor taxable profits; or
• When the taxable temporary difference is
associated with interests in subsidiaries,
associates or joint ventures, and the timing of
the reversal can be controlled and it is probable
that the temporary difference will not reverse in
the foreseeable future.
Deferred tax assets are recognised for deductible
temporary differences and unused tax losses only
if it is probable that future taxable amounts will
be available to utilise those temporary differences
and losses.
The carrying amount of recognised and
unrecognised deferred tax assets are reviewed
at each reporting date. Deferred tax assets
recognised are reduced to the extent that it is no
longer probable that future taxable profits will be
available for the carrying amount to be recovered.
Previously unrecognised deferred tax assets
are recognised to the extent that it is probable
that there are future taxable profits available to
recover the asset.
Deferred tax assets and liabilities are offset only
where there is a legally enforceable right to offset
current tax assets against current tax liabilities and
deferred tax assets against deferred tax liabilities;
and they relate to the same taxable authority on
either the same taxable entity or different taxable
entities which intend to settle simultaneously.
Assets and liabilities are presented in the statement
of financial position based on current and non-
current classification.
An asset is classified as current when: it is either
expected to be realised or intended to be sold
or consumed in normal operating cycle; it is held
primarily for the purpose of trading; it is expected
to be realised within 12 months after the reporting
period; or the asset is cash or cash equivalent
unless restricted from being exchanged or used
to settle a liability for at least 12 months after the
reporting period. All other assets are classified as
non-current.
A liability is classified as current when: it is either
expected to be settled in normal operating cycle; it
is held primarily for the purpose of trading; it is due
to be settled within 12 months after the reporting
period; or there is no unconditional right to defer
the settlement of the liability for at least 12 months
after the reporting period. All other liabilities are
classified as non-current.
Deferred tax assets and liabilities are always
classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other
short-term, highly liquid investments with original
maturities of three months or less that are readily
convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.
Trade and other receivables
Other receivables are recognised at amortised cost,
less any provision for impairment.
Property, plant and equipment
Land and buildings are shown at fair value, based
on periodic, at least every 3 years, valuations by
external independent valuers, less subsequent
depreciation and impairment for buildings. The
valuations are undertaken more frequently if there
is a material change in the fair value relative to the
carrying amount. Any accumulated depreciation
at the date of revaluation is eliminated against
Notes to the Financial Statements
33
the gross carrying amount of the asset and the
net amount is restated to the revalued amount
of the asset. Increases in the carrying amounts
arising on revaluation of land and buildings are
credited in other comprehensive income through
to the revaluation surplus reserve in equity. Any
revaluation decrements are initially taken in other
comprehensive income through to the revaluation
surplus reserve to the extent of any previous
revaluation surplus of the same asset. Thereafter
the decrements are taken to profit or loss.
Plant and equipment is stated at historical cost
less accumulated depreciation and impairment.
Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to
write off the net cost of each item of property, plant
and equipment (excluding land) over their expected
useful lives as follows:
Plant and equipment
3-7 years
The residual values, useful lives and depreciation
methods are reviewed, and adjusted if appropriate,
at each reporting date.
Leasehold improvements and plant and equipment
under lease are depreciated over the unexpired
period of the lease or the estimated useful life of
the assets, whichever is shorter.
An item of property, plant and equipment is
derecognised upon disposal or when there is no
future economic benefit to the consolidated entity.
Gains and losses between the carrying amount and
the disposal proceeds are taken to profit or loss.
Any revaluation surplus reserve relating to the item
disposed of is transferred directly to retained profits.
Impairment of non-financial assets
Goodwill and other intangible assets that have an
indefinite useful life are not subject to amortisation
and are tested annually for impairment, or more
frequently if events or changes in circumstances
indicate that they might be impaired. Other non-
financial assets are reviewed for impairment
whenever events or changes in circumstances
indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for
the amount by which the asset’s carrying amount
exceeds its recoverable amount.
Recoverable amount is the higher of an asset’s
fair value less costs of disposal and value-in-
use. The value-in-use is the present value of
the estimated future cash flows relating to the
asset using a pre-tax discount rate specific to the
asset or cash-generating unit to which the asset
belongs. Assets that do not have independent
cash flows are grouped together to form a cash-
generating unit.
Trade and other payables
These amounts represent liabilities for goods and
services provided to the consolidated entity prior to
the end of the financial year and which are unpaid.
Due to their short-term nature they are measured
at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within
30 days of recognition.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-
monetary benefits, annual leave and long service
leave expected to be settled within 12 months of
the reporting date are measured at the amounts
expected to be paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service
leave not expected to be settled within 12
months of the reporting date are measured as
the present value of expected future payments
to be made in respect of services provided by
employees up to the reporting date using the
projected unit credit method. Consideration
is given to expected future wage and salary
levels, experience of employee departures and
periods of service. Expected future payments are
discounted using market yields at the reporting
date on national government bonds with terms
to maturity and currency that match, as closely as
possible, the estimated future cash outflows.
Share-based payments
Equity-settled and cash-settled share-based
compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or
options over shares, that are provided to employees
34
Notes to the Financial Statements
in exchange for the rendering of services. Cash-
settled transactions are awards of cash for the
exchange of services, where the amount of cash is
determined by reference to the share price.
The cost of equity-settled transactions are measured
at fair value on grant date. Fair value is independently
determined using either the Binomial or Black-Scholes
option pricing model that takes into account the
exercise price, the term of the option, the impact of
dilution, the share price at grant date and expected
price volatility of the underlying share, the expected
dividend yield and the risk free interest rate for
the term of the option, together with non-vesting
conditions that do not determine whether the
consolidated entity receives the services that entitle
the employees to receive payment. No account is
taken of any other vesting conditions.
The cost of equity-settled transactions are
recognised as an expense with a corresponding
increase in equity over the vesting period. The
cumulative charge to profit or loss is calculated
based on the grant date fair value of the award,
the best estimate of the number of awards that are
likely to vest and the expired portion of the vesting
period. The amount recognised in profit or loss
for the period is the cumulative amount calculated
at each reporting date less amounts already
recognised in previous periods.
The cost of cash-settled transactions is initially,
and at each reporting date until vested,
determined by applying either the Binomial or
Black-Scholes option pricing model, taking into
consideration the terms and conditions on which
the award was granted. The cumulative charge
to profit or loss until settlement of the liability is
calculated as follows:
• during the vesting period, the liability at each
reporting date is the fair value of the award at
that date multiplied by the expired portion of
the vesting period.
•
from the end of the vesting period until
settlement of the award, the liability is the full
fair value of the liability at the reporting date.
All changes in the liability are recognised in profit or
loss. The ultimate cost of cash-settled transactions
is the cash paid to settle the liability.
Market conditions are taken into consideration
in determining fair value. Therefore any awards
subject to market conditions are considered to
vest irrespective of whether or not that market
condition has been met, provided all other
conditions are satisfied.
If equity-settled awards are modified, as a minimum
an expense is recognised as if the modification
has not been made. An additional expense is
recognised, over the remaining vesting period, for
any modification that increases the total fair value
of the share-based compensation benefit as at the
date of modification.
If the non-vesting condition is within the control of
the consolidated entity or employee, the failure to
satisfy the condition is treated as a cancellation.
If the condition is not within the control of the
consolidated entity or employee and is not satisfied
during the vesting period, any remaining expense
for the award is recognised over the remaining
vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated
as if it has vested on the date of cancellation, and
any remaining expense is recognised immediately.
If a new replacement award is substituted for the
cancelled award, the cancelled and new award is
treated as if they were a modification.
Fair value measurement
When an asset or liability, financial or non-
financial, is measured at fair value for recognition
or disclosure purposes, the fair value is based on
the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction
between market participants at the measurement
date; and assumes that the transaction will
take place either: in the principal market; or in
the absence of a principal market, in the most
advantageous market.
Fair value is measured using the assumptions
that market participants would use when pricing
the asset or liability, assuming they act in their
economic best interests. For non-financial assets,
the fair value measurement is based on its
highest and best use. Valuation techniques that
are appropriate in the circumstances and for
which sufficient data are available to measure fair
value, are used, maximising the use of relevant
observable inputs and minimising the use of
unobservable inputs.
Notes to the Financial Statements
35
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue
of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
Business combinations
The acquisition method of accounting is used
to account for business combinations regardless
of whether equity instruments or other assets
are acquired.
The consideration transferred is the sum of
the acquisition-date fair values of the assets
transferred, equity instruments issued or liabilities
incurred by the acquirer to former owners of the
acquiree and the amount of any non-controlling
interest in the acquiree. For each business
combination, the non-controlling interest in the
acquiree is measured at either fair value or at the
proportionate share of the acquiree’s identifiable
net assets. All acquisition costs are expensed as
incurred to profit or loss.
On the acquisition of a business, the consolidated
entity assesses the financial assets acquired and
liabilities assumed for appropriate classification
and designation in accordance with the
contractual terms, economic conditions, the
consolidated entity’s operating or accounting
policies and other pertinent conditions in
existence at the acquisition-date.
Where the business combination is achieved in
stages, the consolidated entity remeasures its
previously held equity interest in the acquiree at
the acquisition-date fair value and the difference
between the fair value and the previous carrying
amount is recognised in profit or loss.
Contingent consideration to be transferred by the
acquirer is recognised at the acquisition-date fair
value. Subsequent changes in the fair value of the
contingent consideration classified as an asset or
liability is recognised in profit or loss. Contingent
consideration classified as equity is not remeasured
and its subsequent settlement is accounted for
within equity.
The difference between the acquisition-date fair value
of assets acquired, liabilities assumed and any non-
controlling interest in the acquiree and the fair value of
the consideration transferred and the fair value of any
pre-existing investment in the acquiree is recognised
as goodwill. If the consideration transferred and the
pre-existing fair value is less than the fair value of
the identifiable net assets acquired, being a bargain
purchase to the acquirer, the difference is recognised
as a gain directly in profit or loss by the acquirer on
the acquisition-date, but only after a reassessment of
the identification and measurement of the net assets
acquired, the non-controlling interest in the acquiree,
if any, the consideration transferred and the acquirer’s
previously held equity interest in the acquirer.
Business combinations are initially accounted for
on a provisional basis. The acquirer retrospectively
adjusts the provisional amounts recognised and
also recognises additional assets or liabilities during
the measurement period, based on new information
obtained about the facts and circumstances that
existed at the acquisition-date. The measurement
period ends on either the earlier of (i) 12 months
from the date of the acquisition or (ii) when the
acquirer receives all the information possible to
determine fair value.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing
the profit attributable to the owners of iSignthis Ltd,
excluding any costs of servicing equity other than
ordinary shares, by the weighted average number
of ordinary shares outstanding during the financial
year, adjusted for bonus elements in ordinary
shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used
in the determination of basic earnings per share
to take into account the after income tax effect of
interest and other financing costs associated with
dilutive potential ordinary shares and the weighted
average number of shares assumed to have been
issued for no consideration in relation to dilutive
potential ordinary shares.
Goods and Services Tax (‘GST’) and other
similar taxes
Revenues, expenses and assets are recognised net
of the amount of associated GST, unless the GST
incurred is not recoverable from the tax authority.
In this case it is recognised as part of the cost of the
acquisition of the asset or as part of the expense.
36
Notes to the Financial Statements
Receivables and payables are stated inclusive of
the amount of GST receivable or payable. The net
amount of GST recoverable from, or payable to, the
tax authority is included in other receivables or other
payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST
components of cash flows arising from investing
or financing activities which are recoverable from,
or payable to the tax authority, are presented as
operating cash flows.
Commitments and contingencies are disclosed net of
the amount of GST recoverable from, or payable to,
the tax authority.
New Accounting Standards and Interpretations
not yet mandatory or early adopted
Australian Accounting Standards and Interpretations
that have recently been issued or amended but are
not yet mandatory, have not been early adopted by
the consolidated entity for the annual reporting period
ended 30 June 2015. The consolidated entity has not
yet assessed the impact of these new or amended
Accounting Standards and Interpretations.
Note 3. Critical accounting judgements,
estimates and assumptions
The preparation of the financial statements requires
management to make judgements, estimates and
assumptions that affect the reported amounts in
the financial statements. Management continually
evaluates its judgements and estimates in relation
to assets, liabilities, contingent liabilities, revenue
and expenses. Management bases its judgements,
estimates and assumptions on historical experience
and on other various factors, including expectations
of future events, management believes to be
reasonable under the circumstances. The resulting
accounting judgements and estimates will seldom
equal the related actual results. The judgements,
estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying
amounts of assets and liabilities (refer to the
respective notes) within the next financial year are
discussed below.
Share-based payment transactions
The consolidated entity measures the cost of equity-
settled transactions with employees by reference to
the fair value of the equity instruments at the date at
which they are granted. The fair value is determined
by using either the Binomial or Black-Scholes model
taking into account the terms and conditions upon
which the instruments were granted. The accounting
estimates and assumptions relating to equity-settled
share-based payments would have no impact on the
carrying amounts of assets and liabilities within the
next annual reporting period but may impact profit or
loss and equity.
Provision for impairment of receivables
The provision for impairment of receivables
assessment requires a degree of estimation and
judgement. The level of provision is assessed by taking
into account the recent sales experience, the ageing
of receivables, historical collection rates and specific
knowledge of the individual debtors financial position.
Estimation of useful lives of assets
The consolidated entity determines the estimated
useful lives and related depreciation and
amortisation charges for its property, plant and
equipment and finite life intangible assets. The
useful lives could change significantly as a result
of technical innovations or some other event. The
depreciation and amortisation charge will increase
where the useful lives are less than previously
estimated lives, or technically obsolete or non-
strategic assets that have been abandoned or sold
will be written off or written down.
Goodwill and other indefinite life intangible assets
The consolidated entity tests annually, or more
frequently if events or changes in circumstances
indicate impairment, whether goodwill and other
indefinite life intangible assets have suffered any
impairment, in accordance with the accounting
policy stated in note 2.
Impairment of non-financial assets other than
goodwill and other indefinite life intangible assets
The consolidated entity assesses impairment of non-
financial assets other than goodwill and other indefinite
life intangible assets at each reporting date by evaluating
conditions specific to the consolidated entity and to
the particular asset that may lead to impairment. If an
impairment trigger exists, the recoverable amount of the
asset is determined. This involves fair value less costs of
disposal or value-in-use calculations, which incorporate a
number of key estimates and assumptions.
Income tax
The consolidated entity is subject to income taxes
in the jurisdictions in which it operates. Significant
judgement is required in determining the provision
for income tax. There are many transactions and
Notes to the Financial Statements
37
calculations undertaken during the ordinary course
of business for which the ultimate tax determination
is uncertain. The consolidated entity recognises
liabilities for anticipated tax audit issues based on the
consolidated entity’s current understanding of the tax
law. Where the final tax outcome of these matters is
different from the carrying amounts, such differences
will impact the current and deferred tax provisions in
the period in which such determination is made.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible
temporary differences only if the consolidated
entity considers it is probable that future taxable
amounts will be available to utilise those temporary
differences and losses.
Employee benefits provision
As discussed in note 2, the liability for employee
benefits expected to be settled more than 12
months from the reporting date are recognised and
measured at the present value of the estimated
future cash flows to be made in respect of all
employees at the reporting date. In determining the
present value of the liability, estimates of attrition
rates and pay increases through promotion and
inflation have been taken into account.
Business combinations
As discussed in note 2, business combinations
are initially accounted for on a provisional basis.
The fair value of assets acquired, liabilities and
contingent liabilities assumed are initially estimated
by the consolidated entity taking into consideration
all available information at the reporting date.
Fair value adjustments on the finalisation of the
business combination accounting is retrospective,
where applicable, to the period the combination
occurred and may have an impact on the assets and
liabilities, depreciation and amortisation reported.
Note 4. Operating segments
Identification of reportable operating segments
The consolidated entity is organised into one
operating segment which consists of online payment
security, internet identity, e-mandates and e-contract
validation services, to safeguard eCommerce
operators, and assist Anti Money Laundering (“AML”)
and Counter Terrorism Funding (“CTF”). This operating
segment is based on the internal reports that are
reviewed and used by the Board of Directors (who
are identified as the Chief Operating Decision Makers
(‘CODM’) in assessing performance and in determining
the allocation of resources.
Note 5. Revenue
Consolidated
Fees
Integration fees
Other revenue
Interest
Revenue
During the financial year the consolidated entity generated integration fees amounting to $19,759.
Note 6. Listing expense on reverse acquisition
Integration fees
2014
$
-
-
2015
$
19,759
9,203
28,962
Consolidated
2015
$
2014
$
13,652,805
-
38
Notes to the Financial Statements
Note 6. Listing expense on reverse
acquisition (continued)
The steps for calculating The steps for calculating of
the acquisition account items reflect the following
rationale:
•
•
Signthis BV and ISX IP Ltd (together “iSignthis”)
is deemed to make a share-based payment to
acquire the existing shareholders’ interest in the
net assets of iSignthis Ltd (“ISX”) following the
Acquisition;
the total consideration deemed to be paid by
iSignthis at the Acquisition (by way of the share-
based payment) is calculated as follows:
1. nature of deemed consideration – shares in
iSignthis;
2. value of iSignthis Ltd share – cannot be
determined as no active market for ISX shares at
time of acquisition;
3.
therefore assess value of iSignthis Ltd shares
deemed to be issued by reference to the fair value
of ISX assets acquired;
4.
5.
fair value of ISX assets acquired ( no. of ISX shares
on issue prior to Acquisition been 159,706,705
multiplied by the Fair value of each ISX share
immediately prior to Acquisition been $0.03 (3
cents).
fair value of equity issued by the vendor ( no. of
performance shares issued upon Acquisition been
336,666,667 multiplied by the Fair value of each
ISX share immediately prior to Acquisition been
$0.03 (3 cents).
As the shares of ISX were not being traded at the
time of the Acquisition (the shares were suspended
pending the outcome of the transaction) there was
no active market for those shares. Accordingly the
fair value of the shares was determined as 3 cents
per share, this being the price at which ISX shares had
been issued pursuant to the Prospectus, which was
the last transaction for ISX shares immediately prior to
the Acquisition.
The total consideration deemed to be paid by iSignthis
is then compared to the net assets of ISX at the
Acquisition. The excess of the consideration paid
over the value of the net assets of ISX is expensed in
the consolidated statement of income as a listing fee
expense (Calculations seen below).
Consolidated
2015
$
2014
$
Calculation of listing expense on reverse acquisition
Deemed fair value of consideration shares paid on acquisition
(159,706,705 fully paid ordinary shares @ $0.03 (3 cents))
Deemed fair value of consideration performance shares paid on
acquisition (336,666,667 performance shares @ $0.03 (3 cents))
Less: Fair value of net assets of ISX acquired on reverse acquisition
Cash & cash equivalents
Receivables
Other assets
Prospectus funds received (of which $151,080 was
oversubscribed and therefore subsequently refunded)
Trade & other payables
4,791,201
10,100,000
3,704,080
841,240
6,793
(3,251,080)
(62,637)
Listing expense recognised on reverse acquisition
13,652,805
-
-
-
-
-
-
-
-
Notes to the Financial Statements
39
Note 7. Expenses
Consolidated
Loss before income tax includes the following specific expenses:
Depreciation
Computers & office equipment
Operating
Operating expenses
Finance costs
Interest and finance charges paid/payable
Share-based payments expense
Share-based payments expense
Note 8. Income tax benefit
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Share-based payments
Costs in respect of foreign operations
Listing Expense on Acquisition
Fair value adjustment
Deductible blackhole expenditure
Other timing differences
Income tax losses not taken up as a tax benefit
Income tax expense
Deferred tax assets not recognised
Deferred tax assets not recognised comprises temporary differences attributable to:
Tax losses (Australia)
Temporary differences (Australia)
Tax losses (foreign subsidiaries)
Total deferred tax assets not recognised
2015
$
-
7,305
23,619
2,086
4,601,216
2014
$
-
-
-
-
Consolidated
2015
$
2014
$
(20,139,425)
(6,041,828)
1,380,365
149,130
3,030,000
3,080,190
1,597,857
(18,643)
(4,400)
(1,574,814)
-
581,944
23,996
21,939
627,879
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
40
Notes to the Financial Statements
The above potential tax benefit for deductible
temporary differences, which excludes tax losses,
has not been recognised in the financial statements
as the recovery of the benefit is uncertain.
The taxation benefits of tax losses and temporary
differences not brought to account will only be
obtained if:
i) the consolidated entity derives future assessable
income of a nature and of an amount sufficient
to enable the benefit from the deductions for the
losses to be realised;
ii) the consolidated entity continues to comply with
the conditions for deductibility imposed by law;
iii) no changes in tax legislation adversely affect the
consolidated entity in realising the benefit from the
deductions for the losses; and
iv) the losses are transferred to an eligible entity in
the consolidated group.
Due to the significant change in ownership
following the reverse acquisition of iSignthis BV
and ISX IP Ltd (together “iSignthis”) the company
has taken a conservative approach regarding
the carried forward tax losses from iSignthis
Ltd (Formerly Otis Energy Limited) and it will
undertake a detailed investigation in relation to
this matter going forward.
Note 9. Current assets - cash and cash equivalents
Integration fees
Cash on deposit
Consolidated
2015
$
2014
$
767,022
1,500,000
2,267,022
-
-
-
Note 10. Current assets - trade and other receivables
Consolidated
GST receivable
2015
$
32,828
2014
$
-
Due to the short term nature of the receivables, their carrying value is assumed to be approximately their fair value. No collateral or
security is held. No interest is charged on the receivables. The consolidated entity has financial risk management policies in place to
ensure that all receivable are received within the credit time frame.
Note 11. Current assets - other
Prepayments
Consolidated
2015
$
76,479
2014
$
-
Notes to the Financial Statements
41
Note 12. Non-current assets - property, plant and equipment
Consolidated
Computer and office equipment - at cost
Less: Accumulated depreciation
2015
$
44,965
(7,305)
37,660
2014
$
-
-
-
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Balance at 30 June 2014
Additions
Depreciation expense
Balance at 30 June 2015
Note 13. Non-current assets - intangibles
Consolidated
Computer
and Office
Equipment
$
Total
$
44,965
(7,305)
44,965
(7,305)
37,660
37,660
Consolidated
2015
$
2014
$
Intellectual property - at cost
1,259,000
1,259,000
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Balance at 30 June 2014
Balance at 30 June 2015
Consolidated
Computer
and Office
Equipment
$
Total
$
1,259,000
1,259,000
1,259,000
1,259,000
The patent above has been valued at cost and the board of directors have reviewed the carrying value and have concluded that it is too
early to impair the carrying value due to the recent iSignthis acquisition
42
Notes to the Financial Statements
Note 14. Current liabilities - trade and other payables
Consolidated
Trade payables
Other payables
Refer to note 19 for further information on financial instruments.
2015
$
64,763
104,528
169,291
2014
$
-
-
-
Note 15. Current liabilities - employee benefits
Consolidated
Annual leave
2015
$
27,552
2014
$
-
Note 16. Non-current liabilities - employee benefits
Consolidated
Long service leave
2015
$
3,651
2014
$
-
Note 17. Equity - issued capital
Consolidated
Ordinary shares - fully paid
574,993,971
1
8,916,522
1,259,000
2015
Shares
2014
Shares
2015
$
2014
$
Notes to the Financial Statements
43
Movements in ordinary share capital
Details
Balance
Date
Shares
Issue price
$
30 June 2014
1
(1)
1,259,000
-
4,791,201
Existing OTE Shares at acquisition date
10 March 2015
159,706,705
$0.000
Issue Share to Vendor (iSignthis Ltd)
10 March 2015
298,333,333
$0.000
(20,139,425)
Issue Share to Vendor for cash short-
fall (iSignthis Ltd)
IPO
10 March 2015
10,000,000
10 March 2015
103,333,333
Issue Share to Vendor for cash short-
fall (iSignthis Ltd)
15 May 2015
3,370,600
Option issue (note 31)
15 May 2015
-
$0.000
$0.030
$0.000
$0.000
-
3,100,000
-
3,000
Exercise of unlisted options
23 June 2015
250,000
$0.050
12,500
Capital raising costs
Balance
-
-
30 June 2015
574,993,971
(249,179)
8,916,522
Ordinary shares
Ordinary shares entitle the holder to participate in
dividends and the proceeds on the winding up of the
company in proportion to the number of and amounts
paid on the shares held. The fully paid ordinary shares
have no par value and the company does not have a
limited amount of authorised capital.
On a show of hands every member present at a
meeting in person or by proxy shall have one vote
and upon a poll each share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The consolidated entity’s objectives when managing
capital is to safeguard its ability to continue as a
going concern, so that it can provide returns for
shareholders and benefits for other stakeholders
and to maintain an optimum capital structure to
reduce the cost of capital.
In order to maintain or adjust the capital
structure, the consolidated entity may adjust the
amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell
assets to reduce debt.
The consolidated entity would look to raise capital
when an opportunity to invest in a business or
company was seen as value adding relative to the
current company’s share price at the time of the
investment. The consolidated entity is not actively
pursuing additional investments in the short term
as it continues to integrate and grow its existing
businesses in order to maximise synergies.
The consolidated entity is subject to certain
financing arrangements covenants and
meeting these is given priority in all capital risk
management decisions. There have been no
events of default on the financing arrangements
during the financial year.
44
Notes to the Financial Statements
Note 18. Equity - reserves
Foreign currency reserve
Share-based payments reserve
Consolidated
2015
$
(5,818)
14,701,216
14,695,398
2014
$
-
-
-
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remuneration, and
other parties as part of their compensation for services. Performance shares issued as part consideration of the acquisition of iSignthis
B.V. and ISX IP Ltd (together known as “iSignthis”) have been included in the reserv
Note 19. Financial instruments
Financial risk management objectives
The consolidated entity’s activities expose it to a variety
of financial risks: market risk (including foreign currency
risk, price risk and interest rate risk), credit risk and
liquidity risk. The consolidated entity’s overall risk
management program focuses on the unpredictability
of financial markets and seeks to minimise potential
adverse effects on the financial performance of the
consolidated entity. The consolidated entity uses
different methods to measure different types of risk to
which it is exposed. These methods include sensitivity
analysis in the case of interest rate, foreign exchange
and other price risks, ageing analysis for credit risk and
beta analysis in respect of investment portfolios to
determine market risk.
Risk management is carried out by senior finance
executives (‘finance’) under policies approved by
the Board of Directors (‘the Board’). These policies
include identification and analysis of the risk
exposure of the consolidated entity and appropriate
procedures, controls and risk limits. Finance
identifies, evaluates and hedges financial risks within
the consolidated entity’s operating units. Finance
reports to the Board on a monthly basis.
Market risk
Foreign currency risk
The consolidated entity undertakes certain transactions
denominated in foreign currency and is exposed to
foreign currency risk through foreign exchange rate
fluctuations.
Foreign exchange risk arises from future commercial
transactions and recognised financial assets and financial
liabilities denominated in a currency that is not the
entity’s functional currency.
Price risk
The consolidated entity is not exposed to any significant
price risk.
Interest rate risk
The consolidated entity’s only exposure to interest
rate risk is in relation to deposits held. Deposits are
held with reputable banking financial institutions.
Consolidated
2015
2014
Weighted
average
interest rate
%
1.50%
2.90%
Balance
$
767,022
1,500,000
2,267,022
Weighted
average
interest rate
%
-%
-%
Balance
$
-
-
Cash at bank
Cash on deposit
Net exposure to cash flow interest rate risk
Notes to the Financial Statements
45
Below is a sensitivity analysis of interest rates at
a rate of 50 basis points on cash at bank and 100
basis points on cash on deposit for the 2014 and
2015 financial years. The impact would not be
material on bank balances held at 30 June 2015.
The percentage change is based on expected
volatility of interest rates using market data and
analysis forecasts.
Consolidated - 2015
Basis points increase
Basis points decrease
Basis points
change
Effect on
profit
before tax
Effect on
equity
Basis points
change
Effect
on profit
before tax
Effect on
equity
Cash at bank
Cash on deposit
50
100
3,835
3,835
15,000
15,000
50
100
(3,835)
(3,835)
(15,000)
(15,000)
18,835
18,835
(18,835)
(18,835)
Credit risk
Liquidity risk
Credit risk refers to the risk that a counterparty
will default on its contractual obligations resulting
in financial loss to the consolidated entity. The
consolidated entity has a strict code of credit,
including obtaining agency credit information,
confirming references and setting appropriate
credit limits. The consolidated entity obtains
guarantees where appropriate to mitigate credit
risk. The maximum exposure to credit risk at the
reporting date to recognised financial assets is
the carrying amount, net of any provisions for
impairment of those assets, as disclosed in the
statement of financial position and notes to the
financial statements. The consolidated entity does
not hold any collateral.
Vigilant liquidity risk management requires the
consolidated entity to maintain sufficient liquid
assets (mainly cash and cash equivalents) and
available borrowing facilities to be able to pay debts
as and when they become due and payable.
The consolidated entity manages liquidity risk
by maintaining adequate cash reserves and
available borrowing facilities by continuously
monitoring actual and forecast cash flows and
matching the maturity profiles of financial
assets and liabilities.
46
Notes to the Financial Statements
Note 19. Financial instruments (continued)
Mr Scott Minehane
Liquidity risk
Vigilant liquidity risk management requires the
consolidated entity to maintain sufficient liquid
assets (mainly cash and cash equivalents) and
available borrowing facilities to be able to pay debts
as and when they become due and payable.
The consolidated entity manages liquidity risk by
maintaining adequate cash reserves and available
borrowing facilities by continuously monitoring
actual and forecast cash flows and matching the
maturity profiles of financial assets and liabilities.
Note 20. Key management personnel
disclosures
Directors
The following persons were directors of iSignthis Ltd
during the financial year:
Mr Timothy Hart
(Non-Executive Chairman)
Mr Nickolas John Karantzis
(Managing Director and CEO)
(Managing Director and CEO)
Mr Barnaby Egerton-Warburton
(Non-Executive Director)
Mr Winton Willesee
(Non-Executive Director and Company Secretary)
Mr Harry Hill
(Non-Executive Chairman)
Other key management personnel
The following person also had the authority and
responsibility for planning, directing and controlling
the major activities of the consolidated entity,
directly or indirectly, during the financial year:
Mr Todd Richards
CFO and Company Secretary
Compensation
The aggregate compensation made to directors and
other members of key management personnel of
the consolidated entity is set out below:
Short-term employee benefits
Post-employment benefits
Consolidated
2015
$
403,139
12,984
416,123
2014
$
-
-
-
The remuneration amounts seen above includes 12 months of remuneration for iSignthis B.V. and ISX IP Ltd (together known as
“iSignthis”) and approximately 4 months of remuneration for iSignthis Ltd (legal parent). Please refer to the remuneration table contained
in the directors report for further information.
Note 21. Remuneration of auditors
During the financial year the following fees were
paid or payable for services provided by Hayes
Knight Audit Pty Ltd, the auditor of the company:
Notes to the Financial Statements
47
Note 21. Remuneration of auditors (continued)
Audit services - Hayes Knight Audit Pty Ltd
Audit or review of the financial statements
Audit services - Hayes Knight Audit Pty Ltd
Review of the financial statements of the Authenticate Pty Ltd
& ISX IP Ltd group prior to reverse acquisition completion
Note 22. Contingent liabilities
There were no contingent liabilities at 30 June
2015 and 30 June 2014.
Note 23. Commitments
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
Operating lease commitments includes the office lease until 25 May 2020.
Consolidated
2015
$
2014
$
31,300
-
5,800
37,100
Consolidated
2015
$
2014
$
85,000
375,387
460,387
-
-
-
Note 24. Related party transactions
Transactions with related parties
Parent entity
iSignthis Ltd is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 26.
There were no transactions with related parties
during the current and previous financial year.
Receivable from and payable to related parties
There were no trade receivables from or trade
payables to related parties at the current and
previous reporting date.
Key management personnel
Loans to/from related parties
Disclosures relating to key management personnel
are set out in note 20 and the remuneration report
in the directors’ report.
There were no loans to or from related parties at
the current and previous reporting date.
48
Notes to the Financial Statements
Note 25. Parent entity information
Set out below is the supplementary information
about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
Statement of financial position
Total current assets Total assets
Post-employment benefits
Total current liabilities
Total liabilities
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Parent
2015
$
(25,911,722)
(25,911,722)
2014
$
-
-
Parent
2015
$
2014
$
2,256,010
3,855,327
109,423
109,423
93,439,137
15,607,816
(105,301,049)
3,745,904
-
-
-
-
-
-
-
-
Guarantees entered into by the parent entity in
relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to
the debts of its subsidiaries as at 30 June 2014 and
30 June 2015.
Contingent liabilities
The parent entity had no contingent liabilities as at
30 June 2014 and 30 June 2015.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for
property, plant and equipment as at 30 June 2014
and 30 June 2015.
Significant accounting policies
The accounting policies of the parent entity are
consistent with those of the consolidated entity, as
disclosed in note 2, except for the following:
•
•
Investments in subsidiaries are accounted for at
cost, less any impairment, in the parent entity.
Investments in associates are accounted for at
cost, less any impairment, in the parent entity.
• Dividends received from subsidiaries are
recognised as other income by the parent
entity and its receipt may be an indicator of an
impairment of the investment.
Notes to the Financial Statements
49
Note 26. Interests in subsidiaries
The consolidated financial statements incorporate
the assets, liabilities and results of the following
subsidiaries in accordance with the accounting
policy described in note 2:
Name
Principal place of business
/Country of incorporation
Exercise price
Number
under option
Authenticate Pty Ltd
Authenticate BV
iSignthis BV
ISX IP Ltd
Otis Energy Inc *
Sito Exploration LLC *
Otis Energy I LLC *
Otis Energy II LLC *
Australia
Netherlands
Netherlands
British Virgin Islands
USA
USA
USA
USA
100.00%
100.00%
100.00%
100.00%
-%
-%
-%
-%
-%
-%
-%
-%
100.00%
100.00%
100.00%
100.00%
Otis Energy (Yemen) Limited
British Virgin Islands
100.00%
100.00%
* During the period the legal parent entity entered into an agreement to sell its interests in its US subsidiaries. The sale was completed
during the period and therefore at reporting date the company had no ownership interest in the above companies, with the exception
of Otis Energy (Yemen) Limited.
For the purposes of this subsidiaries note the parent entity has been deemed as the legal parent entity been iSignthis Ltd.
Note 27. Events after the reporting period
No matter or circumstance has arisen since
30 June 2015 that has significantly affected, or
may significantly affect the consolidated entity’s
operations, the results of those operations, or
the consolidated entity’s state of affairs in future
financial years.
50
Notes to the Financial Statements
Note 28. Reconciliation of loss after income
tax to net cash used in operating activities
Consolidated
2015
$
2014
$
Loss after income tax expense for the year
(20,139,425)
Adjustments for:
Depreciation and amortisation
Share-based payments
Foreign exchange differences
Listing expense on reverse acquisition
Change in operating assets and liabilities:
Increase in trade and other receivables
Increase in prepayments
Increase in trade and other payables
Increase in employee benefits
7,305
4,601,216
(13,586)
13,652,805
(32,828)
(32,828)
(76,479)
169,291
31,203
Net cash used in operating activities
(1,800,498)
-
-
-
-
-
-
-
-
-
-
-
Notes to the Financial Statements
51
Note 29. Non-cash investing and
financing activities
On 9 March 2015, the Company completed the
reverse acquisition of iSignthis B.V. and ISX IP Ltd
(together known as "iSignthis") in which the legal
parent entity (iSignthis Ltd) ("ISX") issued a total of
311,703,933 fully paid ordinary shares to iSignthis
throughout the financial year as approved by
shareholders at the general meeting held on the 22
December 2014.
The Company also issued the following Vendor
Consideration Performance Shares:
112,222,222 Class A Performance Shares, which
convert into Shares on a one for one basis on
achievement, within three full financial years of
Completion, of revenue over a 6 month reporting
period (being for a 6 month period ending 30 June
or 31 December), on an annualised basis, to annual
revenue of at least $5,000,000 (Milestone A). For
the avoidance of doubt, a half year revenue of
$2,500,000 will satisfy Milestone A.
112,222,222 Class B Performance Shares, which
convert into Shares on a one for one basis on
achievement, within three full financial years from
Completion, of revenue over a 6 month reporting
period (being for a 6 month period ending 30 June
or 31 December), on an annualised basis, to annual
revenue of at least $7,500,000 (Milestone B). For
the avoidance of doubt, a half year revenue of
$3,750,000 will satisfy Milestone B;
112,222,223 Class C Performance Shares, which
convert into Shares on a one for one basis on
achievement, within three full financial years of
Completion, of revenue over a 6 month reporting
period (being for a 6 month period ending 30 June
or 31 December), on an annualised basis, to annual
revenue of at least $10,000,000 (Milestone C). For
the avoidance of doubt, a half year revenue of
$5,000,000 will satisfy Milestone C.
As at the date of the this report, none of the
milestones have been met in relation to the
Performance Shares and none of the Performance
Shares were issued or cancelled.
Note 30. Earnings per share
In accordance with the principles of reverse
acquisition accounting, the weighted average
number of ordinary shares outstanding during the
period ended 30 June 2015 has been calculated as
the weighted average number of ordinary shares
of provider iSignthis B.V. and ISX IP Ltd (together
known as “iSignthis”) outstanding during the period
before acquisition multiplied by the exchange ratio
established in the acquisition accounting, and the
actual number of ordinary shares of iSignthis Ltd
(formerly Otis Energy Limited) outstanding during
the period after acquisition.
Consolidated
2015
$
2014
$
Loss after income tax attributable to the owners of iSignthis Ltd
(20,139,425)
-
Weighted average number of ordinary shares used in calculating
basic earnings per share
Weighted average number of ordinary shares used in calculating
diluted earnings per share
Basic earnings per share
Diluted earnings per share
Number
Number
389,476,571
308,333,333
389,476,571
308,333,333
Cents
(5.17)
(5.17)
Cents
-
-
52
Notes to the Financial Statements
Note 31. Share-based payments
Set out below are summaries of options granted under the plan:
2015
Grant date
Expiry date
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
01/01/2010*
16/03/2015
$0.040
-
-
30,000,000
30,000,000
-
-
-
-
30,000,000
30,000,000
On 7 May 2015 at the company’s general meeting
shareholders approved to grant 30,000,000 Advisor
Options to the Advisors (and/or nominees) in
recognition of ongoing corporate advisory services
provided to the Company by the Advisors. The options
had an issue price of $0.0001 (0.01 cent) per option.
Set out below are the options exercisable at the end
of the financial year:
Grant date
Expiry date
07/05/2015
16/03/2015
For the options granted during the current financial
year, the valuation model inputs used to determine
the fair value at the grant date, are as follows:
2015
2014
Balance at
the end of
the year
-
-
Number
30,000,000
30,000,000
Grant date
Expiry date
Share price
at grant date
Exercise
price
Expected
volatility
Dividend
yield
Risk-free
interest rate
Fair value
at grant date
07/05/2015
16/03/2015
$0.190
$0.040
70.21%
-%
2.12%
$0.153
Notes to the Financial Statements
53
As part of the part consideration for the acquisition
of 100% of issued capital of iSignthis B.V. and ISX IP
Ltd (together known as "iSignthis") the vendor also
issued 336,666,667 performance shares (on a post
consolidation basis) based on achievement of the
following milestones within three (3) of completing
the transaction:
(i) 112,222,222 Class A Performance Shares – on
achievement of annual revenue of at least $5,000,000.
Annual revenue will be calculated on annualised basis
over a 6 month reporting period. Class A Performance
Shares will expire if unconverted within three (3) years
of completing the transaction;
(ii) 112,222,222 Class B Performance Shares
– on achievement of annual revenue of at least
$7,500,000. Annual revenue will be calculated
on annualised basis over a 6 month reporting
period. Class B Performance Shares will expire if
unconverted within three (3) years of completing
the transaction; and
(iii) 112,222,223 Class C Performance Shares
– on achievement of annual revenue of at least
$10,000,000. Annual revenue will be calculated on
annualised basis over a 6 month reporting period.
Class C Performance Shares will expire if unconverted
within three (3) years of completing the transaction.
The performance shares listed above have been
valued at fair value being $0.03. The date at which
the fair value of the equity instruments granted was
measured for the purposes AASB 2 (Appendix A and
paragraph 10). For transactions with employees and
others providing similar services, the measurement
date is grant date. For transactions with parties
other than employees (and those providing similar
services), the measurement date is the date the
entity obtains the goods or the counterparty
renders service. Therefore As per AASB2, the
measurement date for the Shares is 9 March 2015.
This is the date on which the consolidated entity
finalised the transaction directly related to the issue
of the Shares.
As consideration for the acquisition of 100%
of the issued capital in iSignthis, the vendor
also issued 298,333,333 vendor shares to the
shareholders of iSignthis.
On 15 May 2015 the company issued 3,370,600
fully paid ordinary shares to the iSignthis vendor as
satisfaction of cash shortfall amount as detailed in
the share sale and purchase agreement.
A total of 311,703,933 fully paid ordinary shares
have been issued as consideration for the
acquisition of 100% of the issued capital in iSignthis
(all of which are been held in escrow for a period of
24 months from the date of issue).
In the directors’ opinion:
•
•
•
•
the attached financial statements and notes
comply with the Corporations Act 2001, the
Accounting Standards, the Corporations
Regulations 2001 and other mandatory
professional reporting requirements;
the attached financial statements and notes
comply with International Financial Reporting
Standards as issued by the International
Accounting Standards Board as described in
note 2 to the financial statements;
the attached financial statements and notes
give a true and fair view of the consolidated
entity’s financial position as at 30 June 2015 and
of its performance for the financial year ended
on that date; and
there are reasonable grounds to believe that
the company will be able to pay its debts as and
when they become due and payable.
The directors have been given the declarations
required by section 295A of the Corporations Act
2001.
Signed in accordance with a resolution of directors
made pursuant to section 295(5)(a) of the
Corporations Act 2001.
On behalf of the directors
On 9 March 2015, the company issued a further
10,000,000 fully paid ordinary shares to the
vendor as part of settlement for the cash shortfall
amount under the terms of the share sale and
purchase agreement.
Nickolas John Karantzis
Managing Director
25 August 2015
56
Shareholder Information
The shareholder information set out below was applicable as at 4 August 2015.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Number of holders
of ordinary quoted
shares
Number of holders
of options over
ordinary shares
611
612
547
1,084
252
3,106
992
133
86
20
82
37
358
287
Shareholder Information
57
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
MYCATMAX PTY LTD
BANNABY INVESTMENTS PTY LIMITED
CITICORP NOMINEES PTY LIMITED
IFM PTY LIMITED
Number held
17,000,000
14,100,000
12,197,100
10,000,000
MS MERLE SMITH & MS KATHRYN SMITH
9,650,000
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
UBS NOMINEES PTY LTD
MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) PTY LIMITED
9,347,577
7,056,950
6,452,703
5,986,203
% of total
quoted shares
issued
6.46
5.36
4.63
3.80
3.67
3.55
2.68
2.45
2.27
MR GARRY SHANE COLLINS & MRS JANICE ANN COLLINS
5,952,800
2.26
MAHSOR HOLDINGS PTY LTD
HOLDREY PTY LTD
DECK CHAIR HOLDINGS PTY LTD
LEYRTH PTY LTD
BRISPOT NOMINEES PTY LTD
MAHSOR HOLDINGS PTY LTD
B & G ESTATES LIMITED
LUNAIR PTY LTD
CS FOURTH NOMINEES PTY LTD
MR PAUL ANTHONY MOSS
5,275,000
5,000,000
3,150,000
2,800,000
2,747,297
2,500,000
2,500,000
2,450,000
2,025,539
2,000,000
2.00
1.90
1.20
1.06
1.04
0.95
0.95
0.93
0.77
0.76
128,191,169
47.74
58
Shareholder Information
Ordinary shares
Number held
% of total
quoted shares
issued
WHISTLER STREET PTY LTD
2,400,000
12.90
AZALEA FAMILY HOLDINGS PTY LTD
1,231,250
HUGH LATIMER & COMPANY PTY LTD
1,000,000
BERENES NOMINEES PTY LTD
MISS EMMA BUTTERWORTH
DOMINION INVESTMENTS PTY LTD
UOB KAY HIAN PRIVATE LIMITED
MR RAJNISH SHARAN
CASTLE BAILEY PTY LTD
MR RICHARD FLUDE
GREENDAY CORPORATE PTY LTD
MR MICHAEL JOHN HYNES
BELL POTTER NOMINEES LTD
MISS CHING FONG WAN
FULLERTON PRIVATE CAPITAL PTY LIMITED
GAKS INVESTMENT HOLDINGS PTY LTD
MR JOHN ZACCARIA
MR DALBIR SINGH
MR HARRY ARTHUR HILL
1,000,000
1,000,000
1,000,000
867,500
500,000
400,000
355,600
350,000
330,330
287,500
268,852
267,562
256,995
250,000
213,005
200,000
MR GEDIRE MOHAMAD & MRS NAHLA MOHAMAD
200,000
6.62
5.37
5.37
5.37
5.37
4.66
2.69
2.15
1.91
1.88
1.78
1.55
1.45
1.44
1.38
1.34
1.14
1.07
1.07
12,378,594
66.51
Shareholder Information
59
ISIGNTHIS LTD
MYCATMAX PTY LTD
BANNABY INVESTMENTS PTY LIMITED
CITICORP NOMINEES PTY LIMITED
IFM PTY LIMITED
MS MERLE SMITH & MS KATHRYN SMITH
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
UBS NOMINEES PTY LTD
MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) PTY LIMITED
MR GARRY SHANE COLLINS & MRS JANICE ANN COLLINS
MAHSOR HOLDINGS PTY LTD
HOLDREY PTY LTD
DECK CHAIR HOLDINGS PTY LTD
LEYRTH PTY LTD
BRISPOT NOMINEES PTY LTD
MAHSOR HOLDINGS PTY LTD
B & G ESTATES LIMITED
LUNAIR PTY LTD
CS FOURTH NOMINEES PTY LTD
Ordinary shares
% of total
quoted shares
issued
Number held
311,703,933
54.21
17,000,000
14,100,000
12,197,100
10,000,000
9,650,000
9,347,577
7,056,950
6,452,703
5,986,203
2.96
2.45
2.12
1.74
1.68
1.63
1.23
1.12
1.04
5,952,800
1.04
5,275,000
5,000,000
3,150,000
2,800,000
2,747,297
2,500,000
2,500,000
2,450,000
2,025,539
0.92
0.87
0.55
0.49
0.48
0.43
0.43
0.43
0.35
437,895,102
76.17
60
Shareholder Information
Substantial holders
Substantial holders in the company are set out below:
Ordinary shares
Number held
% of total
quoted shares
issued
ISIGNTHIS LTD
311,703,933
54.21
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a
poll each share shall have one vote.
There are no other classes of equity securities.