Linius Technologies Limited
ABN 84 149 796 332
Appendix 4E
Preliminary Final Report
30 June 2016
Reporting period
Report for the period ended 30 June 2016.
There is no prior corresponding period information relevant to the Appendix 4E. See comments below
on reverse acquisition accounting.
Results for announcement to the market
Revenue from ordinary activities
Profit/(Loss) from ordinary activities after tax
attributable to members
Net profit/(loss) for the period attributable to
members
Dividends
Increase/(decrease) over
previous corresponding period
$
‐
(5,364,619)
(5,364,619)
$
n/a
n/a
n/a
%
n/a
n/a
n/a
No dividends were paid or declared during the financial period and it is not proposed to pay dividends.
No dividends have previously been declared or paid in prior financial periods and there are no dividend
reinvestment plans in place.
Details of entities over which control has been gained during the period
During the period the Company completed an agreement with Linius (Aust) Pty Ltd (ACN 608 170 190)
pursuant to which the Company acquired 100% of the issued shares of Linius (Aust) Pty Ltd from the
shareholders of Linius (Aust) Pty Ltd, following the satisfaction or waiver of various conditions
precedent. The Company changed its name to Linius Technologies Limited as part of this process
The acquisition of Linius (Aust) Pty Ltd by the Company is considered to be a reverse acquisition under
Australian Accounting Standards, notwithstanding the Company being the legal parent of the
consolidated group. Consequently the financial information presented in this Appendix 4E and in the
attached Annual Report is the financial information of Linius (Aust) Pty Ltd. Linius (Aust) Pty Ltd was
incorporated on 10 September 2015, hence the reporting period is from this date up to 30 June 2016
and there is no prior corresponding period comparative information. Where considered relevant, some
historical financial information of Firestrike Resources Limited (renamed Linius Technologies Limited) for
the year ended 30 June 2015 has also been disclosed.
Details of entities over which control has been lost during the period
Nil.
For personal use only
Financial statements and Explanation of results
The financial results presented are in accordance with the reverse acquisition accounting as described
above and as described in the attached Annual Report.
The loss for the period ended 30 June 2016 after income tax expense amounted to $5,364,619. This loss
includes non‐cash share based payments expense of $2,498,135, non‐cash amortisation charges of
$315,000 and reverse acquisition transaction costs of $1,607,425, as a result of applying reverse
acquisition principles.
The financial statements for the period, further information and brief explanation of the financial results
for the period and other information required under Appendix 4E is contained in the Annual Report,
which has been subject to independent audit and which is lodged with this Appendix 4E.
Net tangible asset backing
Net tangible assets per ordinary security
Signed:
Current
period
0.55 cents
Previous
corresponding
period
n/a
Stephen Kerr
Director
31 August 2016
Melbourne
For personal use only
LINIUS TECHNOLOGIES LIMITED
ACN 149 796 332
ANNUAL REPORT
2016
(formerly Firestrike Resources Limited)
ANNUAL REPORT
For personal use only LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
CONTENTS PAGE
CORPORATE DIRECTORY…………………………………………………………………….……………………….……………….…..…2
CHAIRMAN'S LETTER TO SHAREHOLDERS ………………………………………….……………………………………….…..3-4
DIRECTORS' REPORT……………………………………………………………………………………………………………………...5-17
CORPORATE GOVERNANCE STATEMENT..…………………………………………………………………………………………..17
AUDITOR'S INDEPENDENCE DECLARATION……………………………………………………………………………..……….…18
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME………………………….….19
CONSOLIDATED STATEMENT OF FINANCIAL POSITION………………………….…………………………………………....20
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY………………………………………………………………….…..…21
CONSOLIDATED STATEMENT OF CASH FLOWS………………………………………………………………………….……..…22
NOTES TO THE FINANCIAL REPORT………………………………………………………………………………………..……..23-47
DIRECTORS' DECLARATION………………………………………………………………………………………………………………..48
INDEPENDENT AUDITOR'S REPORT…………………………………………………………………………………………….…49-50
ADDITIONAL INFORMATION FOR LISTED COMPANIES……………………………………………………………….…...51-54
PAGE 1
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
CORPORATE DIRECTORY
This annual report covers Linius Technologies Limited and its controlled entities (the “Consolidated Group”
or “Group”) during the period ended 30 June 2016. The functional and presentation currency of the Group
is Australian dollars.
OFFICERS
Stephen McGovern
Christopher Richardson
Stephen Kerr
(Non-Executive Chairman)
(Director and CEO)
(Director / CFO /Company Secretary)
REGISTERED OFFICE
Level 40, 140 William Street
MELBOURNE VIC 3000
SOLICITORS
AUDITORS
SHARE REGISTRY
PRINCIPAL PLACE OF BUSINESS
Milcor Legal
Lawyers
Level 1, 6 Thelma Street
WEST PERTH WA 6872
HLB Mann Judd
Level 4, 130 Stirling Street
PERTH WA 6000
Advanced Share Registry Ltd
110 Stirling Highway
NEDLANDS WA 6009
Telephone: (08) 9389 8033
Facsimile: (08) 9389 7871
Level 40, 140 William Street
MELBOURNE VIC 3000
Telephone: (03) 9607 8234
Facsimile: (03) 9607 8298
WEBSITE
ASX CODE
www.linius.com
LNU and LNUOA
PAGE 2
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
CHAIRMAN’S LETTER TO SHAREHOLDERS
Dear Shareholders,
Please find, enclosed, the Annual Report for Linius Technologies Limited after what has been a
transformative period for the Company and its business operations.
During the period the Company completed an agreement with Linius (Aust) Pty Ltd (ACN 608 170 190)
(Linius (Aust)) pursuant to which the Company acquired 100% of the issued shares of Linius (Aust) from
the shareholders of Linius (Aust) following the satisfaction or waiver of various conditions precedent. The
Company changed its name to Linius Technologies Limited as part of this process.
Change of Operations
As a result of the Linius (Aust) transaction, the entity has changed its operations to that of a technology
company. All mining exploration activities have ceased.
Linius (Aust) is an Australian company that has designed and patented the world’s first video virtualisation
engine, the Linius Video Virtualization EngineTM. The technology transforms large inflexible video files into
small highly flexible data structures. The patented process applies two techniques to video – data
indexing and virtualisation, which means that video can be indexed, spliced and edited in real time.
As a condition of the Linius (Aust) transaction and pursuant to a Prospectus issued on 3 March 2016, the
Company raised $3,500,000 through the issue of new Shares at an issue price of $0.05 per Share.
Pursuant to the Linius (Aust) agreement, the Company issued Shares and Performance Shares to the
Linius Aust vendors as consideration for the acquisition of the Linius (Aust) Shares. The Prospectus also
contained an offer of these consideration shares to the Vendors.
On 29 March 2016 shareholders approved the acquisition of Linius (Aust), the Public Offer, the
Consideration Offer, the Conversion Offer, the CPS Offer (per the Prospectus) and a change in the nature
and scale of the Company’s activities from a gold and base metal exploration company to a technology
company.
Reverse Acquisition
The acquisition of Linius (Aust) by the Company is considered to be a reverse acquisition under Australian
Accounting Standards, notwithstanding the Company being the legal parent of the Group. Consequently
the financial information presented in this Report is the financial information of Linius (Aust). Linius (Aust)
was incorporated on 10 September 2015, hence the reporting period is from this date up to 30 June
2016 and there is no prior corresponding period comparative information.
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
Where considered relevant, some historical financial information of Firestrike Resources Limited
(renamed Linius Technologies Limited) for the year ended 30 June 2015 has also been disclosed.
The legal structure of the Group subsequent to the acquisition of Linius (Aust) will be that the Company
will remain as the legal parent entity. However, the principles of reverse acquisition accounting are
applicable where the owners of the acquired entity (in this case, Linius (Aust)) obtain control of the
acquiring entity (in this case, the Company) as a result of the businesses’ combination.
Under reverse acquisition accounting, the consolidated financial statements are issued under the name
of the legal parent (the Company) but are a continuation of the financial statements of the legal subsidiary
(Linius (Aust)), with the assets and liabilities of the legal subsidiary being recognised and measured at
their pre-combination carrying amounts rather than their fair values.
Thank you
On behalf of your Directors I would like to sincerely thank all shareholders that have supported us through
this exciting transformation of the Company and its operations. I hope you will continue to support us as
we pursue the development of the Linius technology and the commercialisation of the software.
I present to you the report on the Company and its controlled entities for the financial period ended 30
June 2016.
Stephen McGovern
CHAIRMAN
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
DIRECTORS’ REPORT
Your directors present this report on the Company and its subsidiaries for the period ended 30 June 2016.
Directors
The Directors in office during the year were:
Stephen McGovern (Non-Executive Chairman) – appointed 18 April 2016
Christopher Richardson (Executive Director & CEO) – appointed 18 April 2016
Stephen Kerr (Executive Director & CFO) – appointed 18 April 2016
Roger Steinepreis (Non-Executive Chairman) – resigned 18 April 2016
David Holden (Non-Executive Director) – resigned 18 April 2016
Paul Lloyd (Non-Executive Director) – resigned 18 April 2016
All Directors have been in office since the start of the financial year to the date of this report, unless stated
otherwise.
Company Secretary
Stephen Kerr – appointed 18 April 2016
Paul Lloyd – resigned 18 April 2016
Principal Activities
The principal activities of the entity are those of a technology business, including research and development of
technology products, software development and the commercialisation and licencing of computer software.
Linius is an Australian company that has rights to a developed, patented method and system for providing video
content on a data network connected device having a display and device controller.
Linius has designed and patented the world’s first video virtualisation engine, the Linius Video Virtualization
EngineTM. The technology transforms large inflexible video files into small highly flexible data structures. The
patented process applies two techniques to video – data indexing and virtualisation, which means that video can
be indexed, spliced and edited in real time.
The Company has ceased all mining exploration activities.
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
DIRECTORS’ REPORT CONT INUED
Review of operations
Following the acquisition of the Linius technology and with the additional funding provided by the recent capital
raising, the Company has focussed on executing the short-term operating plan, as outlined in the Prospectus.
There were four key areas itemized: showcase deployments, technology development, patents, and marketing
(specifically, product management).
The Company prospectus outlined four milestones, the achievement of which would underpin the value of the
Linius technology in the marketplace and the Company as a whole.
Showcase Deployments
Showcase Deployments are examples of the Linius Video Virtualization Engine™ working in a specific segment of
the video value chain, designed to provide technical input to the company, and to verify and quantify the value of
the software in a particular market segment. On 21 December 2015, Digisoft.tv Limited (an Irish company)
(Digisoft) became Linius’ first showcase partner, with the intent of providing a Showcase Deployment for
personalised ads in the cable TV market.
Milestone 1 was achieved, when Linius (Aust) and Digisoft entered into an Evaluation and Limited Deployment
License Agreement under which Linius (Aust) has granted to Digisoft the right to conduct an in-house evaluation
of the Linius technology (Linius Software).
The Company continues to pursue showcase deployments in the transcoding and content-delivery network (CDN)
segments of the video value chain, which are expected to show substantial cost savings for the industry. In
addition, several new showcase target categories have been established, which represent value creation
opportunities, above and beyond the cost savings expected in the CDN and transcoding segments.
Technology Development
Development of the Video Virtualization Engine™ (VVE)— the key piece of software implementing the technology.
The Company is pleased to confirm that the development of the technology has progressed at a fast pace and
under budget compared with the original forecast in the operating plan. The first major step in the software
development process was completed on 12 May 2016, with the alpha-release of the VVE software. This was an
important proof point for the Company as, for the first time, the core claims of the main patent were
demonstrable. A public demonstration of the alpha version of the software was recorded, and is available on the
Linius web site.
The demo consisted of the Video Virtualization Engine performing Linius’ core patent claims, and demonstrated
a use-case of video personalisation:
Ingesting a video from a remote location and creating a virtual index that points to the raw video DNA of
the remote file;
Reassembling the video DNA on the fly, to playout in a format different to the original file, demonstrating
the reduced need for transcoding; and
Inserting content into the middle of the video playout on the fly, demonstrating personalisation.
This marked the achievement of Milestone 2 as outlined in the Prospectus.
Since the alpha release, development has proceeded apace towards a future beta release of the software.
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
DIRECTORS’ REPORT CONT INUED
Patents
The Linius core patent (US patent number 8893203 B2) has been granted in all major jurisdictions across the
world, including Australia, the U.S., Canada, South Korea, China, Hong Kong, Singapore, and India. On 13 June
2016, the last major jurisdiction which the Company was pursuing — the EU — issued a decision to grant the
patent.
In addition to the core patent, the Company is actively prosecuting two follow-on patents in the U.S.:
13/833,810, which has current status of “Pending”; and 13/833,431, which has current status of “Allowed”.
Finally, the Company is investigating 11 additional possibilities, which may be pursued as patents in the future.
Marketing (Product Management)
The core product management activity was to provide guidance to the engineering team on the goals, use cases,
scalability and stability requirements, and operating environment for the future software. In March 2016, the
decision was made that the VVE would be constructed as an “embedded” piece of software (as opposed to
commercial off-the-shelf software, like a word processing program, or a software-as-a-service platform). This is
consistent with the strategy outlined in the operating plan of using showcase partners as sales channels, allows
much quicker development of the software (and shorter time to market), and puts the Company in a better
position to quickly attack new market opportunities.
In a May 2016 engineering and product management summit, additional clarity was given to the engineering
team around the architecture and the application programming interfaces (APIs) of the VVE. The decision was
made to go with a modern, micro-services architecture, running on industry standard Linux operating systems.
Additionally, clear APIs were defined in conjunction with Digisoft to enable ultimate commercialisation of the
software by embedding it in Cable TV workflow software.
Operating Results
The loss for the period ended 30 June 2016 after income tax expense amounted to $5,364,619. This loss
includes non-cash share based payments expense of $2,498,135, non-cash amortisation charges of $315,000
and reverse acquisition transaction costs of $1,607,425, as a result of applying reverse acquisition principles.
Dividends Paid or Recommended
No dividends were paid or declared for payment.
Financial Position
The net assets of the Group at 30 June 2016 are $8,152,986.
The Directors believe the Company is well funded and in a stable financial position, allowing it to continue the
research and software development of its technology and to pursue the commercialisation and licencing of its
software.
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
DIRECTORS’ REPORT CONT INUED
Significant Changes in State of Affairs
The entity has changed its operations to that of a technology company. All mining exploration activities have
ceased. During the period the Company completed an agreement with Linius (Aust) Pty Ltd (ACN 608 170 190)
(Linius (Aust)) pursuant to which the Company acquired 100% of the issued shares of Linius (Aust) from the
shareholders of Linius (Aust) following the satisfaction or waiver of various conditions precedent. The Company
changed its name to Linius Technologies Limited as part of this process. This transaction is classified as a
reverse acquisition and the entity’s financial position and results are presented accordingly.
Reverse acquisition accounting
The acquisition of Linius (Aust) by the Company is considered to be a reverse acquisition under Australian
Accounting Standards, notwithstanding the Company being the legal parent of the Group. Consequently the
financial information presented in this Report is the financial information of Linius (Aust). Linius (Aust) was
incorporated on 10 September 2015, hence the reporting period is from this date up to 30 June 2016 and there
is no prior corresponding period comparative information.
Where considered relevant, some historical financial information of Firestrike Resources Limited (renamed
Linius Technologies Limited) for the year ended 30 June 2015 has also been disclosed.
The legal structure of the Group subsequent to the acquisition of Linius (Aust) will be that the Company will
remain as the legal parent entity. However, the principles of reverse acquisition accounting are applicable where
the owners of the acquired entity (in this case, Linius (Aust)) obtain control of the acquiring entity (in this case,
the Company) as a result of the businesses’ combination.
Under reverse acquisition accounting, the consolidated financial statements are issued under the name of the
legal parent (the Company) but are a continuation of the financial statements of the legal subsidiary (Linius
(Aust)), with the assets and liabilities of the legal subsidiary being recognised and measured at their pre-
combination carrying amounts rather than their fair values.
After Balance Date Events
There has not been any matters or circumstances that has arisen after balance date that has significantly
affected, or may significantly affect, the operations of the Group, the results of these operations, or the state of
affairs of the Group in future financial periods.
Environmental Issues
There are no environmental regulations or requirements that the Company is subject to.
PAGE 8
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
DIRECTORS’ REPORT CONT INUED
Information on Directors
Stephen McGovern
— Non-Executive Chairman
Experience
— Mr McGovern has over 23 years’ experience in the fields of telecommunications,
media sales, pay TV and regulatory Steve has been a senior executive of several
established companies, both domestically and internationally, which have been
primarily associated with new and emerging markets and have required a strong
sales and solutions focus. These include pay TV, telecommunications de-regulation,
internet service providers and media licensing, all of which maintain a strong sales
and solutions focus, both domestically and internationally.
Mr McGovern is formerly a Sales Director of Sky Subscriber Services managing
subscriber acquisition for Sky TV (now BSkyB) Between 1995 and 1998 Steve was an
executive involved in the launch of the pay TV industry in Australia within the
Galaxy/Austar/Foxtel network.
From 1998 Mr McGovern was General Manager of Hotkey Internet Services, an ISP
which was sold to Primus Telecommunications in 2000. From 2000 Steve was a
director of the Australian subsidiary of Affinity Internet Holdings, Europe’s second
largest ISP at the time and listed on the FTSE, having vended in an Australian based
ISP business.
For the past 11 years Mr McGovern has been Chief Executive of the my1300 group of
companies until the sale of the business earlier this year. This group comprised
businesses which involved media licensing, telecommunications service providers
and partner networks for Australian telecom companies such as Primus, AAPT, One
Tel, Worldxchange, Telstra, Optus and Vodafone.
Interest in Shares and
Options
— 20,000,000 Ordinary shares
20,000,000 Performance shares(unlisted)
6,000,000 Options (unlisted)
in
Directorships held
other listed entities in
the last 3 years
—
In the 3 years immediately before the end of the financial year, Stephen McGovern
served as a director of the following listed companies:
Dubber Corporation Limited (ASX:DUB)
Christopher
Richardson
Experience
— Director and CEO
— Mr Richardson is a global executive in the internet space who with global technology
sector experience. He has over 20 years experience building organisations and
products that succeed in their markets and provide exceptional shareholder value.
Currently, Mr Richardson sits on the board of directors of:
• Mirovoy Sales, a sales software automation company based in Prague, CZ; and
• The Ibis Network Limited, a content marketing agency based in Hong Kong, CN.
Previously, Mr Richardson served as global General Manager of KIT digital’s network-
operator division, and CEO of KIT Germany, where he oversaw growth of video
platform sales to network operators from $12 million US annually to over $100
million US, prior to KIT’s acquisition by Piksel, Inc. Before KIT digital, Mr Richardson
served in executive roles in marketing and product-management for several Silicon
Valley start-ups, including:
• U4EA Wireless (the world’s first SMB focused Wi-Fi manufacturer, and provider of
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
embedded wireless software; acquired by GoS Networks); and
• NextHop Technologies (an embedded routing software company; acquired by
Greenhills software), which he co-founded and raised Series A funding from tier-1
Silicon Valley VCs, led by New Enterprise Associates.
Prior to founding NextHop technologies, Mr Richardson was a software engineer at
MERIT Networks, where he helped build the early internet, developing routing
protocols, and consulting with developing countries around the world on deploying
the Internet; lecturing multiple times at ISOC’s Developing Countries workshops in
Geneva, Switzerland, and being the first non-native speaker at Russia’s All Russia
Telematiks conference. Mr Richardson was Visiting Professor of Internet Routing at
St. Petersburg State Technical University in St. Petersburg, Russia. He studied
mathematics and philosophy at the University of Michigan, where he won the William
S. Branstrom Prize for academic excellence and Evelyn O. Bychinky Award for
excellence in mathematics.
Interest in Shares and
options
Directorships held
in
other listed entities in
the last 3 years
—
10,000,000 Options
— Nil
Stephen Kerr
— Director, Company Secretary and CFO
Experience
— Mr Kerr is a qualified chartered accountant and chartered company secretary. He is
an experienced CFO and governance professional, having held senior finance
positions in private and publicly listed company environments across Australia and
New Zealand for over 15 years.
He has had exposure to a wide range of markets and industries including IT,
business services, logistics, transport and life-sciences and brings strong financial,
commercial and governance skills to the group.
Stephen holds a Bachelor of Commerce from the University of Melbourne and is a
current member of the Institute of Chartered Accountants in Australia and a Fellow of
the Governance institute of Australia.
— 1,500,000 Options
— Nil
Interest in Shares and
Options
Directorships held in
other listed entities in
the last 3 years
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
DIRECTORS’ REPORT CONT INUED
REMUNERATION REPORT - AUDITED
The information provided in the audited remuneration report includes remuneration disclosures that are required
under Accounting Standard AASB 124 Related Party Disclosures. These disclosures have been audited.
Key management personnel
Names and positions held of Consolidated Group key management personnel (KMP) in office at any time during
the year are:
Key Management Person Position
Stephen McGovern
Non-Executive Chairman
Christopher Richardson Director and CEO
Stephen Kerr
Director and CFO
Gavin Campion
Consultant
Roger Steinepreis
Non-Executive Chairman – resigned 18 April 2016
David Holden
Paul Lloyd
Non-Executive Director – resigned 18 April 2016
Non-Executive Director – resigned 18 April 2016
Principles used to determine the nature and amount of remuneration
The Board determines the appropriate nature and amount of remuneration. The board may receive advice from
independent remuneration consultants to ensure remuneration levels are appropriate and in line with the
market. No such advice was sought for the period ended 30 June 2016. The Board ensures that the executive
reward satisfies the following criteria for good reward governance practice:
• competitiveness and reasonableness;
• acceptability to shareholders;
• alignment of executive remuneration to performance;
• transparency; and
• capital management.
The framework provides for a mix of fixed and variable remuneration.
Non-executive Directors and executive Director
Fees and payments to non-executive Directors and the executive Directors reflect the demands, which are made
on, and the responsibilities of, the Directors. Non-executive Directors’ fees and payments are reviewed annually
by the Board.
Directors’ fees
Non-executive directors’ fees are determined within an aggregate directors’ fee pool limit, which is periodically
recommended for approval by shareholders. The maximum pool limit currently stands at $300,000 per annum.
Key Management Personnel Remuneration Policy
The Board’s policy for determining the nature and amount of remuneration of key management for the Group is
as follows:
The remuneration structure for key management personnel is based on a number of factors, including length of
service, particular experience of the individual concerned, and overall performance of the Group. There is
currently no remuneration related to Group perfomance. The contracts for service between the Group and key
management personnel are on a continuing basis, the terms of which are detailed below and are not expected to
change in the immediate future.
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
DIRECTORS’ REPORT CONT INUED
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service
agreements. Details of these agreements are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Stephen McGovern
Non-Executive Chairman
18 April 2016
No fixed term
An annual director fee of $90,000 plus superannuation. The fee paid to Mr
McGovern is subject to annual review by the Board. Under the terms of his
agreement, the Company has issued Mr McGovern’s nominee with 6,000,000
Options. The Company will reimburse Mr McGovern for all reasonable
expenses incurred in performing his duties. The agreement includes a non-
competition clause.
Christopher Richardson
Director and CEO
1 December 2015 (Appointed a director on 18 April 2016)
No fixed term
An annual consultancy fee of $150,000, payable at the rate of $12,500 per
month (exclusive of any GST or withholding taxes). The Consultancy Fee will
be reviewed annually by the Board. Under the terms of the agreement, the
Company has issued Mr Richardson’s nominee with 10,000,000 Options. The
agreement can be terminated by the company on one months’ notice or by Mr
Richardson on three month’s written notice. The Company will reimburse Mr
Richardson for all reasonable expenses incurred in performing his duties. The
agreement includes a non-competition clause.
Stephen Kerr
Director and CFO
21 January 2016 (Appointed a director on 18 April 2016)
No fixed term
An annual consultancy fee of $84,000, payable at the rate of $7,000 per
month (exclusive of any GST or withholding taxes). The Consultancy Fee will
be reviewed annually by the Board. Under the terms of the agreement, the
Company has issued Mr Kerr’s nominee with 1,500,000 Options. The
agreement can be terminated by either party on three month’s written notice.
The Company will reimburse Mr Kerr for all reasonable expenses incurred in
performing his duties. The agreement includes a non-competition clause.
Gavin Campion
Consultant
18 April 2016
No fixed term
An annual consultancy fee of $65,700, payable at the rate of $5,475 per
month (exclusive of any GST or withholding taxes). The Consultancy Fee will
be reviewed annually by the Board. Under the terms of the agreement, the
Company has issued Mr Campion’s nominee with 41,000,000 Options. The
agreement can be terminated by either party on one month’s written notice.
The Company will reimburse Mr Campion for all reasonable expenses
incurred in performing his duties. The agreement includes a non-competition
clause.
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
DIRECTORS’ REPORT CONT INUED
Key Management Personnel Remuneration
2016
Key Management
Personnel
Stephen McGovern
Christopher Richardson
Stephen Kerr
Gavin Campion
Roger Steinepreis
David Holden
Paul Lloyd
2015
Key Management
Personnel
Roger Steinepreis
David Holden
Paul Lloyd
Directors’
fees &
consultancy
fees
Share-
based
payments
Total
Performance
Related
Share-based
$
$
$
%
%
19,9384
75,0005
32,6556
15,3657
19,0001
19,0002
123,3003
187,450
124,966
21,087
207,388
199,966
53,742
1,280,907
1,296,272
-
-
-
19,000
19,000
123,300
304,258
1,614,410
1,918,668
-
-
-
-
-
-
-
-
90.4
62.5
39.2
98.8
-
-
-
84.1
Directors’ &
consultancy
fees
Total
Performance
Related
Performance
Related
$
$
%
%
26,5401
26,540
26,5002
96,5403
26,500
96,540
149,580
149,580
-
-
-
-
-
-
-
-
1. Consultancy fees were paid to Steinepreis Paganin, a related party of Roger Steinepreis.
2. Consultancy fees were paid to Shackleton Capital Pty Ltd, a related party of David Holden.
3. Consultancy fees were paid to Coral Brook Pty Ltd, a related party of Paul Lloyd.
4. Consultancy fees were paid to SMG Nominees Pty Ltd, a related party of Stephen McGovern
5. Consultancy fees were paid to Mirovoy Sales, s.r.o. , a related party of Christopher Richardson
6. Consultancy fees were paid to SC Kerr & Co, a related party of Stephen Kerr
7. Consultancy fees were paid the Hydria Plenus Pty Ltd, a related party of Gavin Campion
Performance income as a proportion of total remuneration
Executive directors and executives were not paid performance based bonuses.
PAGE 13
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
DIRECTORS’ REPORT CONT INUED
Options issued as part of remuneration for the period ended 30 June 2016
The following options were issued to the Directors or key management personnel as part of their
remuneration during the period:
Stephen McGovern 6,000,000 options issued
Christopher Richardson 10,000,000 options issued
Stephen Kerr 1,500,000 options issued
Gavin Campion 41,000,000 options issued
Number of Options held by Key Management Personnel
Stephen McGovern
Christopher Richardson
Stephen Kerr
Gavin Campion
Total
Balance
1.7.2015
Granted during
the period
to 30.6.2016
Total Vested
and Exercisable
30.6.2016
Total
Unexercisable
30.6.2016
Total lapsed
or exercised
30.6.2016
-
-
-
-
-
6,000,000
10,000,000
1,500,000
6,000,000
-
4,000,000
6,000,000
675,000
825,000
41,000,000
41,000,000
-
58,500,000
51,675,000
6,825,000
-
-
-
-
-
For details on the valuation of options granted during the period refer Note 19.
Number of Shares held by Key Management Personnel
Balance
1.7.2015
Received as
Compensation
Options
Exercised
Acquired during
the year
Stephen McGovern
Gavin campion
Total
-
-
-
-
-
-
-
-
-
20,000,000
45,000,000
65,000,000
65,000,000
Balance
30.6.2016
20,000,000
45,000,000
Number of Performance Shares held by Key Management Personnel
Stephen McGovern
Gavin campion
Total
Balance
1.7.2015
Received as
Compensation
-
-
-
-
-
-
Acquired during
the year
20,000,000
45,000,000
Balance
30.6.2016
20,000,000
45,000,000
65,000,000
65,000,000
PAGE 14
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
DIRECTORS’ REPORT CONT INUED
Related Party Transactions
Consolidated Group
Transactions with related parties:
Legal fees paid to Steinepreis Paganin, a legal firm in which
Roger Steinepreis has an interest
Amounts owing to related parties (included in trade and other payables)
Entity related to Stephen McGovern
Entity related to Christopher Richardson
Entity related to Stephen Kerr
2016
$
2015
$
159,633
7,703
8,193
37,131
7,700
-
-
-
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated.
END OF REMUNERATION REPORT
Meetings of Directors
During the financial year, five meetings of Directors were held. Attendance by each director was as follows:
Directors’ Meetings
Number eligible to attend
Number attended
Stephen McGovern
Christopher Richardson
Stephen Kerr
Roger Steinepreis
David Holden
Paul Lloyd
1
1
1
5
5
5
1
1
1
5
4
5
PAGE 15
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
DIRECTORS’ REPORT CONT INUED
Indemnification and insurance of Directors and Officers
The Company has agreed to indemnify all the directors of the Company for any liabilities to another person (other
than the Company or related body corporate) that may arise from their position as directors of the Company, and
its controlled entities, except where the liability arises out of conduct involving a lack of good faith.
The Company has paid premiums to insure each of the Directors against liabilities for costs and expenses
incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of
director of the Company, other than conduct involving a wilful breach of duty in relation to the Consolidated
Group.
Options
At the date of this report, the unissued ordinary shares of Linius Technologies Limited under option are as
follows;
Date of Expiry
Exercise Price
Number Under Option
31/12/2016
31/03/2019
listed
unlisted
4 cents
5 cents
14,527,554
61,500,000
During the year ended 30 June 2016, no ordinary shares of Linius Technologies Limited were issued on the
exercise of options granted under any Employee Option Plan.
No person entitled to exercise the option had or has any right by virtue of the option to participate in any share
issue of any other body corporate.
Proceedings on Behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company
for all or any part of those proceedings. The Company was not a party to any such proceedings during the period.
Future Developments
Other than as referred to in this report, further information as to likely developments in the operations of the
Consolidated Group and expected results of those operations would, in the opinion of the Directors, be
speculative and prejudicial to the interests of the Consolidated Group and its shareholders.
PAGE 16
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
DIRECTORS’ REPORT CONT INUED
Corporate Governance statement
The Company’s Corporate Governance Statement has been lodged with ASX and is available from Company’s
website at www.linius.com/corporate-governance/ .
Auditor’s Independence Declaration
The Auditor’s independence declaration for the year ended 30 June 2016 has been received and can be found
on page 18 of the annual report.
Non-Audit Services
The Board of directors is satisfied that the provision of non-audit services during the year is compatible with the
general standard of independence for auditors imposed by the Corporations Act 2001. The directors are
satisfied that the services disclosed below did not compromise the external auditor’s independence because the
nature of the services provided does not compromise the general principles relating to auditor independence in
accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and
Ethical Standards Board.
Signed in accordance with a resolution of the Board of Directors.
Stephen McGovern
Director
31 August 2016
PAGE 17
For personal use only
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Linius Technologies Limited for the
year ended 30 June 2016, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
a)
b)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
31 August 2016
D Buckley
Partner
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533.
Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of
International, a worldwide organisation of accounting firms and business advisers.
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME
FOR PERIOD ENDED 30 JUNE 2016
Note
Consolidated Group
Revenue
Administrative expenses
Amortisation expenses
Consultant costs
Share-based payments expense
Financial and compliance expenses
Software development expenses
Patent costs
Legal expenses
Travel and accommodation expenses
Impairment of exploration expenditure and project
acquisition costs
Loss before transaction costs and income tax
Transaction costs relating to the reverse acquisition
by the accounting acquirer Linius (Aust) Pty Ltd of
Linius Technologies Limited.
Loss before income tax
Income tax expense
Loss for the year
Other comprehensive loss
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign
operations
Total comprehensive loss for the year
3
22
4
2
2016
$
12,027
(141,159)
(315,000)
(241,959)
19
(2,498,135)
(32,442)
(272,068)
(38,166)
(184,015)
(46,277)
-
(3,757,194)
2015
$
12,002
(188,846)
-
-
-
(131,157)
-
-
(5,255)
(821)
(369,588)
(683,665)
(1,607,425)
-
(5,364,619)
(683,588)
-
-
(5,364,619)
(683,665)
-
(5,364,619)
39,040
(644,625)
Basic loss per share (cents per share)
7
Diluted loss per share (cents per share)
(3.7)
n/a
(0.9)
n/a
The accompanying notes form part of the financial report
PAGE 19
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2016
Note
Consolidated Group
2016
$
2015
$
CURRENT ASSETS
Cash and cash equivalents
Other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Intellectual property
Property, plant and equipment
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Option premium reserve
Share based payments reserve
Foreign currency translation reserve
Accumulated losses
TOTAL EQUITY
8
9
3,275,258
75,506
3,350,764
10
5,085,000
-
5,085,000
8,435,764
282,778
282,778
282,778
719,359
10,566
729,925
-
130
130
730,055
20,165
20,165
20,165
8,152,986
709,890
11,809,470
4,970,029
-
36,461
1,708,135
-
-
(39,966)
(5,364,619)
(4,256,634)
8,152,986
709,890
11
12
19
The accompanying notes form part of the financial report
PAGE 20
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 30 JUNE 2016
Consolidated Group
Issued
Capital
Share based
payments
reserve
Option
Premium
Reserve
Accumulated
Losses
Total
Foreign
Currency
translation
reserve
$
$
$
$
$
$
Balance 1 July 2014
4,160,284
- 22,961
(3,572,969)
(79,006)
531,270
Loss for the year
Other comprehensive loss
Total comprehensive loss
Shares and options issued
during the year (net of
capital raising costs)
-
-
-
-
-
-
(683,665)
-
(683,665)
-
39,040
39,040
(683,665)
39,040
(644,625)
809,745
- 13,500
-
-
823,245
Balance at 30 June 2015
4,970,029
- 36,461
(4,256,634)
(39,966)
709,890
Balance at incorporation
Loss for the period
Other comprehensive loss
Total comprehensive loss
Shares issued on
incorporation
Shares issued during the
year (net of capital raising
costs)
Reverse acquisition of
Linius Technologies
Conversion Offer
CPS Offer
-
-
-
-
200
5,000,000
5,684,270
875,000
250,000
-
-
-
-
-
-
-
-
-
Share-based payments
-
1,708,135
Balance at 30 June 2016
11,809,470 1,708,135
-
-
-
-
-
-
-
-
-
-
-
-
(5,364,619)
-
(5,364,619)
-
-
-
-
-
-
(5,364,619)
The accompanying notes form part of the financial report
-
-
-
-
-
-
-
-
-
-
-
-
(5,364,619)
-
(5,364,619)
200
5,000,000
5,684,270
875,000
250,000
1,708,135
8,152,986
PAGE 21
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 30 JUNE 2016
Note
Consolidated Group
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers
Interest received
Net cash used in operating activities
13
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of intellectual property
Cash acquired through reverse acquisition
22
Exploration expenditure
Net cash provided by /(used) in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of convertible notes
Proceeds from issue of shares
Capital raising costs paid
Net cash inflows from financing activities
Net increase/(decrease) in cash held
Cash at beginning of financial year
Cash at end of financial year
8
2016
$
(699,093)
6,159
(692,934)
(400,000)
4,017,992
-
3,617,992
350,000
200
-
350,200
3,275,258
-
3,275,258
The accompanying notes form part of the financial report
2015
$
(366,264)
12,002
(354,262)
-
(76,708)
(76,708)
-
856,000
(32,755)
823,245
392,275
327,084
719,359
PAGE 22
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
These general purpose financial statements comprise the financial report and notes of Linius Technologies
Limited, a listed Australian company incorporated and domiciled in Western Australia.
Basis of Preparation
The financial report is a general purpose financial report that has been prepared in accordance with Australian
Accounting Standards, which include Australian equivalents to International Financial Reporting (AIFRS),
Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards
Board and the Corporations Act 2001.
The financial statements comprise the consolidated financial statements for the Group. For the purposes of
preparing the consolidated financial statements, the Company is a for-profit entity.
Australian Accounting Standards set out accounting policies that the Australian Accounting Standards Board has
concluded would result in a financial report containing relevant and reliable information about transactions,
events and conditions to which they apply. Compliance with AIFRS ensures that the financial report and notes also
comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation
of this financial report are presented below. They have been consistently applied unless otherwise stated.
The financial report was authorised for issue on 31 August 2016.
The financial report has been prepared on an accruals basis and is based on historical costs, modified, where
applicable, by the measurement at fair value of selected non-current assets, financial assets and financial
liabilities.
Reverse Acquisition Accounting
The acquisition of Linius (Aust) Pty Ltd by the Company is considered to be a reverse acquisition under Australian
Accounting Standards, notwithstanding the Company being the legal parent of the Group. Consequently the
financial information presented in this Report is the financial information of Linius (Aust) Pty Ltd. Linius (Aust) Pty
Ltd was incorporated on 10 September 2015, hence the reporting period is from this date up to 30 June 2016
and there is no prior corresponding period comparative information.
Where considered relevant, some historical financial information of Firestrike Resources Limited (renamed Linius
Technologies Limited) for the year ended 30 June 2015 has also been disclosed.
The legal structure of the Group subsequent to the acquisition of Linius (Aust) Pty Ltd will be that the Company will
remain as the legal parent entity. However, the principles of reverse acquisition accounting are applicable where
the owners of the acquired entity (in this case, Linius (Aust) Pty Ltd obtain control of the acquiring entity (in this
case, the Company) as a result of the businesses’ combination.
Under reverse acquisition accounting, the consolidated financial statements are issued under the name of the
legal parent (the Company) but are a continuation of the financial statements of the legal subsidiary (Linius (Aust)
Pty Ltd, with the assets and liabilities of the legal subsidiary being recognised and measured at their pre-
combination carrying amounts rather than their fair values.
Going Concern
The financial statements have been prepared under the historical cost convention, applying the going concern
basis of accounting.
PAGE 23
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
a.
Income Tax
The income tax expense/(benefit) for the year comprises current income tax expense/(benefit) and deferred tax
expense/(benefit).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using
applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities/(assets)
are therefore measured at the amounts expected to be paid to/(recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during
the period as well unused tax losses.
Current and deferred income tax expense/(benefit) is charged or credited directly to equity instead of the profit or
loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the financial report. Deferred tax assets also result where
amounts have been fully expensed but future tax deductions are available. No deferred income tax will be
recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no
effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the
asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date.
Their measurement also reflects the manner in which management expects to recover or settle the carrying
amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that
it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be
utilised.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that
net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred
tax assets and liabilities are offset where a legally enforceable right of set-off exists and the deferred tax assets
and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or
different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of
the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or
liabilities are expected to be recovered or settled.
b.
Financial Instruments
Recognition and Initial Measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when the Group
becomes a party to the contractual provisions of the instrument. Trade date accounting is adopted for financial
assets that are delivered within timeframes established by marketplace convention.
PAGE 24
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial instruments are initially measured at fair value plus transactions costs where the instrument is not
classified as at fair value through profit or loss. Transaction costs related to instruments classified as at fair value
through profit or loss are expensed to profit or loss immediately. Financial instruments are classified and
measured as set out below.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is
transferred to another party whereby the entity no longer has any significant continuing involvement in the risks
and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are
either discharged, cancelled or expire. The difference between the carrying value of the financial liability
extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-
cash assets or liabilities assumed, is recognised in profit or loss.
Classification and Subsequent Measurement
Financial assets at fair value through profit or loss
i.
Financial assets are classified at fair value through profit or loss when they are held for trading for the purpose of
short term profit taking, where they are derivatives not held for hedging purposes, or designated as such to avoid
an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by
key management personnel on a fair value basis in accordance with a documented risk management or
investment strategy. Realised and unrealised gains and losses arising from changes in fair value are included in
profit or loss in the period in which they arise.
Loans and receivables
ii.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market and are subsequently measured at amortised cost using the effective interest rate method.
iii.
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or
determinable payments, and it is the Group’s intention to hold these investments to maturity. They are
subsequently measured at amortised cost using the effective interest rate method.
iv.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either designated as such or that are
not classified in any of the other categories. They comprise investments in the equity of other entities where there
is neither a fixed maturity nor fixed or determinable payments.
v.
Financial Liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost
using the effective interest rate method.
PAGE 25
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Impairment of financial assets
The Group assesses at each balance date whether a financial asset or Group of financial assets is impaired.
i.
Financial assets at fair value through profit or loss
If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been
incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the
present value of estimated future cash flows (excluding future credit losses that have not been incurred)
discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate computed at initial
recognition). The carrying amount of the asset is reduced either directly or through use of an allowance account.
The amount of the loss is recognised in profit or loss.
The Group first assesses whether objective evidence of impairment exists individually for financial assets that are
individually significant, and individually or collectively for financial assets that are not individually significant. If it is
determined that no objective evidence of impairment exists for an individually assessed financial asset, whether
significant or not, the asset is included in a Group of financial assets with similar credit risk characteristics and
that Group of financial assets is collectively assessed for impairment. Assets that are individually assessed for
impairment and for which an impairment loss is or continues to be recognised are not included in a collective
assessment of impairment.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss
is reversed. Any subsequent reversal of an impairment loss is recognised in profit or loss, to the extent that the
carrying value of the asset does not exceed its amortised cost at the reversal date.
ii .
Financial assets carried at cost
If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is
not carried at fair value (because its fair value cannot be reliably measured), or on a derivative asset that is linked
to and must be settled by delivery of such an unquoted equity instrument, the amount of the loss is measured as
the difference between the asset’s carrying amount and the present value of estimated future cash flows,
discounted at the current market rate of return for a similar financial asset. Such impairment loss shall not be
reversed in subsequent periods.
iii.
Available-for-sale financial assets
If there is objective evidence that an available-for-sale investment is impaired, an amount comprising the
difference between its cost (net of any principal repayment and amortisation) and its current fair value, less any
impairment loss previously recognised in profit or loss, is transferred from equity to the statement of
comprehensive income. Reversals of impairment losses for equity instruments classified as available-for-sale are
not recognised in profit. Reversals of impairment losses for debt instruments are reversed through profit or loss if
the increase in an instrument's fair value can be objectively related to an event occurring after the impairment
loss was recognised in profit or loss.
PAGE 26
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
c.
Impairment of Tangible and Intangible Assets
At each reporting date, the Directors review the carrying values of the Group’s tangible and intangible assets to
determine whether there is any indication that those assets have been impaired. If such an indication exists, the
recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is
compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is
expensed to the statement of comprehensive income.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
Where it is not possible to estimate the recoverable amount of an individual asset, the Directors estimate the
recoverable amount of the cash-generating unit to which the asset belongs.
d.
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for
which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
e.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of 12 months or less, and bank overdrafts. Bank overdrafts are shown within
short-term borrowings in current liabilities in the statement of financial position.
f.
Revenue and Other Income
Revenue is measured at the fair value of the consideration received or receivable after taking into account any
trade discounts and volume rebates allowed. Any consideration deferred is treated as the provision of finance
and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The
difference between the amount initially recognised and the amount ultimately received is interest revenue.
Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of
significant risks and rewards of ownership of the goods and the cessation of all involvement in those goods.
Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is
the rate inherent in the instrument. Dividend revenue is recognised when the right to receive a dividend has been
established.
All revenue is stated net of the amount of goods and services tax (GST).
Trade and Other Payables
g.
Trade and other payables represent the liability outstanding at the end of the reporting period for goods and
services received by the Group during the reporting period, which remains unpaid. The balance is recognised as a
current liability with the amount being normally paid within 30 days of recognition of the liability.
Goods and Services Tax (GST)
h.
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of
the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the
statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of
investing and financing activities, which are disclosed as operating cash flows.
PAGE 27
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Comparative Figures
i.
The acquisition of Linius (Aust) Pty Ltd by the Company is considered to be a reverse acquisition under Australian
Accounting Standards, notwithstanding the Company being the legal parent of the group. Consequently the
financial information presented in this Report is the financial information of Linius (Aust) Pty Ltd. Linius (Aust) Pty
Ltd was incorporated on 10 September 2015, hence the reporting period is from this date up to 30 June 2016
and there is no prior corresponding period comparative information. Where considered relevant, some historical
financial information of Firestrike Resources Limited (renamed Linius Technologies Limited) for the year ended 30
June 2015 has also been disclosed.
Where required by Accounting standards, comparative figures have been adjusted to conform to changes in the
presentation for the current financial year.
Critical Accounting Estimates and Judgments
j.
The Directors evaluate estimates and judgments incorporated into the financial report based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future events
and are based on current trends and economic data, obtained both externally and within the Group.
Impairment
The Directors assess impairment at each reporting date by evaluating conditions specific to the Consolidated
Group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the
asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number
of key estimates.
Income tax
Balances disclosed in the financial report and the notes thereto related to taxation are based on the best
estimates of Directors. These estimates take into account both the financial performance and position of the
Group as they pertain to current income taxation legislation, and the Directors’ understanding thereof. No
adjustment has been made for pending or future taxation legislation. The current income tax position represents
that Directors’ best estimate, pending an assessment by the Australian Taxation Office.
Deferred taxation
Potential deferred income tax benefits have not been brought to account at reporting date because the Directors
do not believe that it is appropriate to regard realisations of deferred income tax benefits as probable.
Share based payment transactions
The Company 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 using a Black-Scholes
option pricing model. The Company measures the cost of cash-settled share based payments at fair value at the
grant date using the Black & Scholes option pricing model taking into account the terms and conditions upon
which the instruments were granted.
Environmental issues
Balances disclosed in the financial report and notes thereto are not adjusted for any pending or enacted
environmental legislation. The Group is not subject to any significant environmental regulation.
PAGE 28
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
k.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The Chief Operating Decision Maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the Board of Directors of Linius
Technologies Limited.
l.
Trade and other receivables
Trade receivables are measured on initial recognition at fair value and are subsequently measured at amortised
cost using the effective interest rate method, less any allowance for impairment. Trade receivables are generally
due for settlement within periods ranging from 15 days to 30 days.
Impairment of trade receivables is continually reviewed and those that are considered to be uncollectible are
written off by reducing the carrying amount directly. An allowance account is used when there is objective
evidence that the Group will not be able to collect all amounts due according to the original contractual terms.
Factors considered by the Group in making this determination include known significant financial difficulties of the
debtor, review of financial information and significant delinquency in making contractual payments to the Group.
The impairment allowance is set equal to the difference between the carrying amount of the receivable and the
present value of estimated future cash flows, discounted at the original effective interest rate. Where receivables
are short-term discounting is not applied in determining the allowance.
The amount of the impairment loss is recognised in the statement of comprehensive income within other
expenses. When a trade receivable for which an impairment allowance had been recognised becomes
uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of
amounts previously written off are credited against other expenses in the statement of comprehensive income.
Intangible assets
m.
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their
fair value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost.
Indefinite life intangible assets are not amortised and are subsequently measured at cost less any impairment.
Finite life intangible assets are subsequently measured at cost less amortisation and any impairment. The gains
or losses recognised in profit or loss arising from the derecognition of intangible assets are measured as the
difference between net disposal proceeds and the carrying amount of the intangible asset. The method and useful
lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of consumption or
useful life are accounted for prospectively by changing the amortisation method or period.
Employee leave benefits
n.
Wages, salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave
expected to be settled within 12 months of the balance date are recognised in other payables in respect of
employees’ services up to the balance date. They are measured at the amounts expected to be paid when the
liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and are
measured at the rates paid or payable.
PAGE 29
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the
present value of expected future payments to be made in respect of services provided by employees up to the
balance date. Consideration is given to expected future wage and salary levels, experience of employee
departures, and period of service. Expected future payments are discounted using market yields at the balance
date on national government bonds with terms to maturity and currencies that match, as closely as possible, the
estimated future cash outflows.
o. 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. Incremental costs directly attributable
to the issue of new shares or options for the acquisition of a new business are not included in the cost of
acquisition as part of the purchase consideration.
p.
Earnings per share
Basic earnings per share is calculated as net profit/loss attributable to members of the Company, adjusted to
exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the
weighted average number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit/loss attributable to members of the Company, adjusted for:
costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses;
and other non-discretionary changes in revenues or expenses during the period that would result from the
dilution of potential ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for
any bonus element.
q.
Adoption of new and revised standards
Standards and Interpretations applicable to 30 June 2016
In the period ended 30 June 2016, the Directors have reviewed all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to the Group and effective for the current annual reporting
period.
As a result of this review, the Directors have determined that there is no material impact of the new and revised
Standards and Interpretations on the Group and, therefore, no material change is necessary to Group accounting
policies.
Standards and Interpretations in issue not yet adopted
As a result of this review, the Directors have determined that there is no material impact of the new and revised
Standards and Interpretations on the Group and, therefore, no material change is necessary to Group accounting
policies.
PAGE 30
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
r.
Foreign currency translation
Both the functional and presentation currency of Linius Technologies Limited is Australian dollars. Each entity in
the Group determines its own functional currency and items included in the financial statements of each entity are
measured using that functional currency.
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates
ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are
retranslated at the rate of exchange ruling at the balance date.
All exchange differences in the consolidated financial report are taken to profit or loss with the exception of
differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These
are taken directly to equity until the disposal of the net investment, at which time they are recognised in profit or
loss.
Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate as at the date of the initial transaction.
Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the
date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are
reported as part of the fair value gain or loss.
As at the balance date the assets and liabilities of this subsidiary is translated into the presentation currency of
Linius Technologies Limited at the rate of exchange ruling at the balance date and income and expense items are
translated at the average exchange rate for the period, unless exchange rates fluctuated significantly during that
period, in which case the exchange rates at the dates of the transactions are used.
The exchange differences arising on the translation are taken directly to a separate component of equity, being
recognised in the foreign currency translation reserve.
On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular
foreign operation is recognised in profit or loss.
In addition, in relation to the partial disposal of a subsidiary that does not result in the Group losing control over
the subsidiary, the proportionate share of accumulated exchange differences are re-attributed to non-controlling
interests and are not recognised in profit or loss. For all other partial disposals (i.e. partial disposals of associates
or jointly controlled entities that do not result in the Group losing significant influence or joint control), the
proportionate share of the accumulated exchange differences is reclassified to profit or loss.
s.
Share-based payments
The Company has issued options to directors as part of their remuneration arrangements and has issued options
and shares to third parties in consideration for acquisitions, settlement of loans, acquisition fees and for
consultancy services received. The cost of these equity-settled transactions has been measured by reference to
the fair value of the equity instruments granted, namely the market value of the Company’s shares on the dates
when agreements were reached to issue those shares.
PAGE 31
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
t.
Parent entity financial information
The financial information for the parent entity, Linius Technologies Limited, disclosed in note 24 has been
prepared on the same basis as the consolidated financial statements, except as set out below.
(i) Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the parent entity’s
financial statements. Dividends received from associates are recognised in the parent entity’s profit or loss, rather
than being deducted from the carrying amount of these investments.
(ii) Share-based payments
The grant by the company of options over its equity instruments to the employees of subsidiary undertakings in the
Group is treated as a capital contribution to that subsidiary undertaking. The fair value of employee services
received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase
to investment in subsidiary undertakings, with a corresponding credit to equity.
NOTE 2: REVENUE
Other revenue:
Interest received
Total revenue
NOTE 3: LOSS FOR THE YEAR
Significant expenses:
Occupancy costs
Consolidated Group
2016
$
12,027
12,027
Consolidated Group
2016
$
2015
$
12,002
12,002
2015
$
28,807
41,940
PAGE 32
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 4: INCOME TAX EXPENSE
Consolidated Group
2016
2015
$
-
-
$
-
-
(a) Income tax expense
Current tax
Deferred tax
(b) Reconciliation of income tax expense to prima facie tax payable
The prima facie tax payable on profit/loss from ordinary activities
before income tax is reconciled to the income tax expense as
follows:
Prima facie tax on operating loss at 28%
(1,502,093)
(205,100)
Add / (Less)
Tax effect of:
Reverse acquisition expenses
Share based payments
Other non-allowable items
Other deductible items
450,079
699,478
-
-
2,231
5,100
-
(6,000)
Unused tax losses not recognised as deferred assets
350,305
206,000
Income tax attributable to operating loss
-
(c) Unrecognised deferred tax assets
-
-
-
Unused Australian tax losses for which no deferred tax asset has
been recognised
350,305
1,465,717
Potential deferred tax assets attributable to tax losses carried forward have not been brought to account at 30
June 2016 because the Directors do not believe it is appropriate to regard realisation of the deferred tax assets
as probable at this current point in time. These benefits will only be obtained if:
i. The Consolidated Group derives future assessable income of a nature and of an amount sufficient to enable the
benefit from the deductions for the loss to be realised;
ii. The Consolidated Group continues to comply with conditions for deductibility imposed by law; and
iii. No changes in tax legislation adversely affect the Consolidated Group in realising the benefit from the
deductions for the losses.
PAGE 33
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 5 : KEY MANAGEMENT PERSONNEL
The total of remuneration paid to KMP of the Consolidated Group during the period are as follows:
Consolidated Group
Short-term employee benefits
Share-based payments
NOTE 6: AUDITOR’S REMUNERATION
Remuneration of the auditor for services provide to the Group and
the Parent during the year:
— auditing or reviewing the financial report
— other services
NOTE 7: EARNINGS/LOSS PER SHARE
a.
Reconciliation of earnings to profit or loss
Loss used to calculate basic EPS
b.
Weighted average number of ordinary shares outstanding
during the period used in calculating basic EPS
2016
$
304,258
1,614,410
1,918,668
Consolidated Group
2016
$
30,500
25,000
55,500
2015
$
149,580
-
149,580
2015
$
21,500
-
21,500
Consolidated Group
2016
$
(5,364,619)
No.
144,515,330
2015
$
(683,665)
No.
78,623,273
PAGE 34
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 8: CASH AND CASH EQUIVALENTS
Cash at bank and in hand
The effective interest rate on short-term bank deposits was varying
between 2.6% to 3.28%.
Reconciliation of cash
Consolidated Group
2016
$
3,275,258
2015
$
719,359
Cash at the end of the financial year as shown in the statement of cash flows is reconciled to items in the statement
of financial position as follows:
Cash and cash equivalents
3,275,258
719,359
NOTE 9: OTHER RECEIVABLES
CURRENT
GST receivable
Prepaid expenses and other receivables
Consolidated Group
2016
$
53,007
22,499
75,506
2015
$
7,385
3,181
10,566
NOTE 10: INTELLECTUAL PROPERTY
During the period the Group acquired the intellectual property associated with the Linius technology from an
unrelated party, Phoenix Myrrh. The intellectual property includes patents, copyright, confidential information and
trademarks. In accordance with accounting standards and the Group accounting policies this asset is treated as
having a finite life and is being amortised over 10 years.
Intellectual property at cost
Accumulated amortisation
Consolidated Group
2016
$
5,400,000
(315,000)
5,085,000
2015
$
-
-
-
PAGE 35
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 10:INTELLECTUAL PROPERTY (CONTINUED)
The directors have assessed the value and useful life of the intellectual property at balance date.
The cost of the intellectual property was established upon the purchase of the intellectual property through a third
party transaction during the current financial period. The value of the intellectual property was further validated
through the reverse takeover process and capital raising undertaken by Linius Technologies Limited (Linius) in
April/May 2016. During this process an independent report was commissioned, which gave the directors comfort that
the intellectual property purchased was covered by valid patents, trademarks and copyright.
Since listing on ASX, the shares of Linius have traded in a ready market, validating the value of the intellectual
property asset. The assets of the Group at 30 June 2016 consist principally of cash of $3.3m and Intellectual
property at cost of $5.4m. Net assets are $8.2m. The value of Linius is therefore comprised of its cash and
intellectual property. Investors purchasing Linius shares on market on ASX are purchasing an interest in the
intellectual property of Linius plus the finite cash figure.
Linius shares closed at a price of 7.4 cents per share on 30 June 2016. Total fully paid ordinary shares on issue at 30
June 2016 are 562.2m. This gives a market capitalisation of Linius of $41.6m. After deducting NTA from this figure
the implied value of the intellectual property is $38.4m. The directors believe that the recoverability of the value of
the intellectual property on the balance sheet at 30 June 2016 is validated by the on market trading in Linius shares.
The directors note that the intellectual property is at an early stage in its commercial life, with the associated
technology approaching commercialisation. The value and lifespan of the owned intellectual property continues to be
enhanced by further patent registrations in new jurisdictions across the world and through continued development of
the technology associated with the intellectual property.
The directors have currently assessed the useful life of the intellectual property as being 10 years. The directors
consider that a 10 year useful life is reasonable and appropriate and have amortised the value of intellectual property
at balance date on that basis.
NOTE 11: TRADE AND OTHER PAYABLES
Trade payables*
Sundry payables and accrued expenses
Consolidated Group
2016
$
144,463
138,315
282,778
2015
$
3,165
17,000
20,165
*Terms of trade are in line with normal commercial terms (usually 30 to 60 days)
PAGE 36
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 12: ISSUED CAPITAL AND RESERVES
Consolidated Group
Issued Capital
Opening balance
Issue of shares on incorporation of Linius (Aust) Pty Ltd
Note
2016
$
-
200
Issue of shares to acquire Linius intellectual porperty
5,000,000
Shares eliminated in legal subsidiary on acquisition
Shares acquired on acquisition of legal parent
Consideration shares
-
-
-
Deemed consideration of reverse acquisition 22
5,684,270
Number
-
20,000
50,000
(70,000)
189,738,580
300,000,000
-
17,500,000
5,000,000
875,000
250,000
-
50,000,000
11,809,470
562,238,580
Conversion Offer
CPS Offer
Conversion of performance shares
At reporting date
The Company has issued share capital amounting to 562,238,580 ordinary shares of no par value.
Ordinary shares
Opening balance
Fully paid shares issued during the period
_ 10 October 2014 (Placement)
— 18 November 2015 (conversion of listed options)
— 7 December 2015 (Rights issue)
— 18 December 2015 (conversion of listed options)
— 5 February 2016 (conversion of listed options)
— 5 February 2016 (share-based payment of consulting fees)
— 18 April 2016 (Issue of Linius (Aust) vendor shares)
— 18 April 2016 (conversion of performance shares)
— 18 April 2016 (share issue pursuant to public offer)
— 18 April 2016 (conversion of Linius (Aust convertible note)
— 18 April 2016 (share-based payment of Linius (Aust) acquisition fees)
— 23 May 2016 (conversion of performance shares)
— 23 May 2016 (share based payment of consulting fees)
Parent Entity
2016
No.
2015
No.
90,499,985
47,999,985
42,500,000
3,134,246
25,536,608
113,200
25,000
202,269
250,000,000
50,000,000
70,000,000
17,500,000
5,000,000
50,000,000
227,272
At reporting date
562,238,580
90,499,985
At shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each
shareholder has one vote on a show of hands.
PAGE 37
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 12: ISSUED CAPITAL AND RESERVES (CONTINUED)
Performance shares on issue
Parent Entity
Opening balance
Performance shares issued during the year
Number converted to ordinary shares during the period
At reporting date
2016
No.
-
200,000,000
(100,000,000)
100,000,000
2015
No.
-
-
-
-
The performance shares are unlisted. The terms of these performance shares are detailed in NOTE: 22.
NATURE AND PURPOSE OF RESERVES
Share-Based Payments Reserve
This reserve is used to record exchange differences arising from translation of the financial statements of foreign
subsidiaries.
Option Premium Reserve
This reserve records the proceeds from option rights issues net of capital raising costs.
Foreign Currency Translation Reserve
This reserve is used to record exchange differences arising from translation of the financial statements of foreign
subsidiaries.
Capital risk management
The Consolidated Group’s objectives when managing capital are to safeguard its ability to continue as a going
concern, so that it may continue to provide returns for shareholders and benefits for other stakeholders.
Due to the nature of the Consolidated Group’s activities, being an early stage technology company, the
Consolidated Group does not have ready access to credit facilities, with the primary source of funding being equity
raisings. Therefore, the focus of the Consolidated Group’s capital risk management is the current working capital
position against the requirements of the Consolidated Group to meet research and development of software, early
stage business commercialisation initiatives and corporate overheads. The Consolidated Group’s strategy is to
ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating
appropriate capital raisings as required. The working capital position of the Consolidated Group at 30 June 2016
is as follows:
Cash and cash equivalents
Trade and other receivables
Trade and other payables and other liabilities
Working capital position
Consolidated Group
2016
$
3,275,258
75,506
(282,778)
3,067,986
2015
$
719,359
10,566
(20,165)
709,760
PAGE 38
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 13: CASH FLOW INFORMATION
Loss after income tax
(5,364,619)
(683,665)
Cash flows excluded from loss attributable to operating activities
Non cash items
- Loss on sale of equipment
- Amortisation / depreciation
- Exploration expenditure impairment
- Share-based payments expense
- Transaction costs relating to reverse acquisition
Changes in assets and liabilities
- Increase/(decrease) in debtor and income accrual
- Increase/(decrease) in trade payables and accruals
- (Increase)/decrease in trade receivables and prepayments
-
315,000
874
884
-
369,588
2,498,135
1,607,425
-
-
-
35,223
215,902
3,013
(49,079)
4,123
Cash flows used in operating activities
(692,934)
(354,262)
NOTE 14: RELATED PARTY TRANSACTIONS
Transactions with related parties:
Legal fees paid to Steinepreis Paganin, a legal firm in which
Roger Steinepreis has an interest
Amounts owing to related parties (included in trade and other payables):
Entity related to Stephen McGovern
Entity related to Christopher Richardson
Entity related to Stephen Kerr
Consolidated Group
2016
$
2015
$
159,633
7,703
8,193
37,131
7,700
-
-
-
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated.
PAGE 39
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 15: INTERESTS IN CONTROLLED ENTITIES
The parent company had the following controlled entities:
Name of the subsidiary
Place of incorporation
Class of shares
Firestrike Resources Incorporated (a)
Linius (Aust) Pty Ltd (b)
USA
Australia
Ordinary
Ordinary
% Held
2016
100%
100%
2015
100%
-
(a) Incorporated in 2012 with a nominal share capital of US$10.
(b) Refer to Note 1. Reverse Acquisition Accounting details
Balances and transactions between the parent and its subsidiaries, which are related parties of the parent,
have been eliminated on consolidation and not disclosed in this note.
NOTE 16: OPERATING SEGMENTS
Segment Information
AASB 8 Operating Segments requires operating segments to be identified on the basis of internal reports about
components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate
resources to the segment and to assess its performance.
The Group’s operating segments have been determined with reference to the monthly management accounts used
by the Chief Operating Decision Maker to make decisions regarding the Company’s operations and allocation of
working capital. Due to the size and nature of the Group, the Board as a whole has been determined as the Chief
Operating Decision Maker.
Based on the quantitative thresholds included in AASB 8, there is only one reportable segment, being the
Development of computer software in the Australasian region.
The revenues and results of this segment are those of the Group as a whole and are set out in the consolidated
statement of comprehensive income. The segment assets and liabilities of this segment are those of the Group and
are set out in the consolidated statement of financial position.
NOTE 17: COMMITMENTS
There are no lease commitments as at balance date. The entity operates from premises which are leased on a
month to month tenancy.
NOTE 18: CONTINGENCIES
There are no contingent assets or liabilities as at balance date.
PAGE 40
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 19: SHARE-BASED PAYMENTS
The following share based payments occurred during the financial period.
There were no share based payments in 2015.
Options
Vested options
Stephen McGovern
Christopher Richardson
Stephen Kerr
Gavin Campion
External consultants
Shares
Settlement of consulting fees via share issues shares
Convertible note fees
Consulting fees
$
187,450
124,966
21,087
1,280,907
93,725
1,708,135
525,000
265,000
2,498,135
Unlisted options
On 29 April 2016, at a general meeting of shareholders of the Company, and conditional on completion of the
reverse acquisition transaction, it was resolved to issue 10,000,000 options to Mr Christopher Richardson or his
nominees, 6,000,000 options to Mr Stephen McGovern or his nominees, 1,500,000 options to Mr Stephen Kerr
or his nominees and 41,000,000 options to Mr Gavin Campion or his nominees.
During the period 3,000,000 options were issued to external advisors for corporate consulting services.
The options issued to Mr Richardson and Mr Kerr are subject to the following vesting conditions. Milestone
references refer to those milestones detailed in Note: 22.
Name
Stephen Kerr
No. New Options
300,000
300,000
300,000
300,000
300,000
Chris Richardson
4,000,000
1,500,000
1,500,000
1,500,000
1,500,000
Milestone 1 and 2 had been achieved as at balance date.
Vesting date
Vesting in equal instalments of 75,000 each at
the end of each calendar quarter after Completion
Vesting on the date of satisfaction of Milestone 1
Vesting on the date of satisfaction of Milestone 2
Vesting on the date of satisfaction of Milestone 3
Vesting on the date of satisfaction of Milestone 4
Vesting in equal instalments of 1,000,000 each at
the end of each calendar quarter after the
Completion
Vesting on the date of satisfaction of Milestone 1
Vesting on the date of satisfaction of Milestone 2
Vesting on the date of satisfaction of Milestone 3
Vesting on the date of satisfaction of Milestone 4
PAGE 41
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LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 19: SHARE-BASED PAYMENTS (CONTINUED)
The expense recognised in the statement of comprehensive income in relation to these option related share-
based payments is $1,708,135.
The fair value of the equity-settled share options granted in the current period is estimated as at the date of grant
using the Black and Scholes model taking into account the terms and conditions upon which the options were
granted.
30 June 2016
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected life of option (years)
Exercise price (cents)
Grant date share price
Grant date fair value
Grant date
61,500,000
Unlisted options
Nil
100%
2.00%
2.9 yrs
$0.05
$0.05
$0.03
28 April 2016
Options on issue
Opening balance
Options issued during year (Issued at $0.002)
Options issued during year (Issued at $0.005)
Options issued during the year
Options over ordinary shares exercised during the year
At reporting date
Parent Entity
2016
No.
2015
No.
17,800,000
13,300,000
-
-
3,000,000
1,500,000
61,500,000
(3,272,446)
-
-
76,027,554
17,800,000
14,527,554 options are listed and are exercisable at 4 cents by 31 December 2016.
61,500,000 options are unlisted and are exercisable at 5 cents by 31 March 2019.
Weighted average exercise price at balance date was 5 cents (2015: 4 cents)
Weighted average remaining contractual life of the options on issue at balance date is 2.9 years (2015: 1.5 years)
PAGE 42
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 20: FINANCIAL RISK MANAGEMENT
a.
Financial Risk Management Policies
The Consolidated Group’s financial instruments consist mainly of deposits with banks.
The main purpose of non-derivative financial instruments is to raise finance for Consolidated Group
operations.
The Consolidated Group does not speculate in the trading of derivative instruments.
i. Treasury Risk Management
The Board meets on a regular basis to analyse financial risk exposure and to evaluate treasury
management strategies in the context of the most recent economic conditions and forecasts.
The Board’s overall risk management strategy seeks to assist the Consolidated Group in meeting its
financial targets, whilst minimising potential adverse effects on financial performance.
Risk management policies are approved and reviewed by the Board on a regular basis.
ii. Financial Risk Exposures and Management
Interest rate risk
The Consolidated Group exposure to financial risk is limited to interest rate risk arising from assets and
liabilities bearing variable interest rates. The weighted average interest rate on cash holdings is 2.8% at 30
June 2016. All other assets and liabilities are non interest bearing.
The Consolidated Group holds cash deposits with Australian banking financial institutions, namely the ANZ
Bank. The ANZ Bank has an AA rating with Standard & Poors.
Interest rate sensitivity
Had the interest rate moved by 10 basis points with all other variables held constant, the post tax loss and
equity would have decreased / increased by $37,272 (2015: $7,196)
Liquidity risk
Liquidity risk arises from the possibility that the Consolidated Group might encounter difficulty in settling its
debts or otherwise meeting its obligations related to financial liabilities. The Consolidated Group manages
liquidity risk by continuously monitoring forecast and actual cash flows and ensuring sufficient cash and
marketable securities are available to meet the current and future commitments of the Consolidated Group.
Due to the nature of the Consolidated Group’s activities, being mineral exploration, the Consolidated Group
does not have ready access to credit facilities, with the primary source of funding being equity raisings. The
Board of Directors constantly monitors the state of equity markets in conjunction with the Consolidated
Group’s current and future funding requirements, with a view to initiating appropriate capital raisings as
required. The financial liabilities of the Consolidated Group are confined to trade and other payables as
due within 12 months of the reporting date. The Board manages liquidity risk by monitoring forecast cash
flows against actual liquidity level on a regular basis
There are no unused borrowing facilities from any financial institution.
Credit risk
There no material amounts of collateral held as security at balance date. Credit risk is reviewed regularly by
the Board. It arises through deposits with financial institutions. The Board monitors credit risk by actively
assessing the rating quality and liquidity of counter parties. Only banks and financial institutions with an ‘A’
rating are utilised.
PAGE 43
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 20: FINANCIAL RISK MANAGEMENT (CONTINUED)
The Consolidated Group only invests in listed available-for-sale financial assets that have a minimum ‘A’
credit rating. Unlisted available-for-sale financial assets are not rated by external credit agencies. These are
reviewed regularly by the Consolidated Group to ensure that credit exposure is minimised.
The credit risk for counterparties included in trade and other receivables at balance date is nil.
The Consolidated Group holds cash deposits with Australian banking financial institutions, namely the ANZ
Bank. The ANZ Bank has an AA rating with Standard & Poors.
Price risk
The Consolidated Group is not exposed to commodity price risk.
b. Financial Instruments
i.
Derivative Financial Instruments
Derivative financial instruments are not used by the Consolidated Group.
ii.
Financial instrument composition and maturity analysis:
The table below reflects the undiscounted contractual settlement terms for financial instruments of a
fixed period of maturity. The financial instruments are all classified as current.
Financial Assets:
Cash and cash equivalents
Total Financial Assets
Financial Liabilities:
Trade payables
Total Financial Liabilities
iii.
Net Fair Values
Weighted Average
Effective Interest Rate
2016
%
2015
%
2.80
2.88
-
-
Floating Interest Rate
2016
$
2015
$
3,725,258
3,725,258
719,359
719,359
282,778
282,778
20,165
20,165
The net fair values of all financial assets and financial liabilities approximate their carrying value.
NOTE 21: EVENTS AFTER THE REPORTING PERIOD
There has not been any matter or circumstance that has arisen after balance date that has significantly affected, or
may significantly affect, the operations of the Group, the results of these operations, or the state of affairs of the
Group in future financial periods.
PAGE 44
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 22: REVERSE ACQUISTION ACCOUNTING
On 18 April 2016, Linius Technologies Limited issued 300,000,000 fully paid ordinary shares to Linius (Aust) Pty
Ltd as consideration of 100% of all the rights and title to Linius (Aust) Pty Ltd. As a result the shareholders of Linius
(Aust) Pty Ltd held at the date of acquisition 61.29% of the issued capital of Linius Technologies Limited.
Refer to note 1 for the further information on the reverse acquisition.
The reverse acquisition is treated as an acquisition of assets and liabilities of Linius Technologies Limited as at 18
April 2016.
Net assets acquired $
Cash and cash equivalents
Trade and other receivables
Loan receivable
Trade and other payables
Value of asset acquisition as at 18 April 2016
Loss on acquisition of Linius (Aust) Pty Ltd
Deemed acquisition consideration
Less net assets acquired
Transaction costs of reverse acquisition on 18 April 2016
4,017,992
41,408
250,000
(232,555)
4,076,845
5,684,270
4,076,845
1,607,425
The consideration for the acquisition took the form of the issue of 250,000,000 ordinary shares to the vendors,
plus a further amount of deferred consideration in the form of the issue of 200,000,000 performance shares to the
Vendors. The performance shares have the following rights and are subject to the achievement of four milestones as listed
below.
Rights attaching to the Performance Shares
(i) Each performance share is a share in the capital of Linius Technologies Limited (Linius).
(ii) Each performance share confers on the holder (Holder) the right to receive notices of general meetings and
financial reports and accounts of Linius that are circulated to the holders of fully paid ordinary shares in the capital
of Linius Technologies Limited (Shareholders). Holders have the right to attend general meetings of Shareholders.
(iii) A performance share does not entitle the Holder to vote on any resolutions proposed by Linius except as
otherwise required by law.
(iv) A performance share does not entitle the Holder to any dividends.
(v) A performance share does not entitle the Holder to a return of capital, whether in a winding up, upon a reduction
of capital or otherwise.
(vi) A performance share does not entitle the Holder to participate in the surplus profits or assets of the company
winding up.
(vii) A performance share is not transferable.
(viii) If at any time the issued capital of the company is reconstructed (including a consolidation, subdivision,
reduction, cancellation or return of issued share capital), all rights of a Holder will be changed to the extent
necessary to comply with the applicable ASX Listing Rules at the time of reorganisation.
(ix) The performance shares will not be quoted on ASX. However, at the time of conversion of the performance
shares into fully paid ordinary shares (Shares), the company must within 10 Business Days apply for the official
quotation of the Shares arising from the conversion on ASX.
PAGE 45
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
NOTE 22: REVERSE ACQUISTION ACCOUNTING (CONTINUED)
(x) A performance share does not entitled a Holder (in their capacity as a holder of a Performance Share) to
participate in new issues of capital offered to holders of Shares such as bonus issues and entitlement issues.
(xi) The terms of the performance shares may be amended as necessary by the directors in order to comply with the
ASX Listing Rules, or any directions of ASX regarding the terms provided that, subject to compliance with the ASX
Listing Rules, following such amendment, the economic and other rights of the Holder are not diminished or
terminated.
(xii) A performance share gives the Holder no rights other than those expressly provided by these terms and those
provided at law where such rights at law cannot be excluded by these terms.
The performance shares are divided into 4 classes (A,B,C and D) of 50,000,000 performance shares per class. A
performance share in the relevant class will convert into one ordinary share upon achievement of:
(A) Class A – Linius (Aust) Pty Ltd enters into an agreement with Digisoft, Cork, Ireland for a limited deployment of its
technology, being the installation and activation by a third party of the Linius technology (Limited Deployment), with
the objective of demonstrating personalisation of video streams, by that date which is 12 months from the issue
date (Milestone 1);
(B) Class B – Linius (Aust) Pty Ltd completes an alpha release of the Linius technology (which means, in line with the
industry standard definition of that term, a first-stage completed version of a program or application, which may be
unstable but is nevertheless useful to show what the program or application can do) that demonstrates publicly that
the Linius technology achieves the Linius core patent claims, namely that the technology is able to (1) take a URL
link to a piece of video content in an unknown location, and (2) play and display the video content on multiple
devices with different video format requirements (and without the need for transcoding), by that date which is 18
months from the issue date (Milestone 2);
(C) Class C - Linius (Aust) Pty Ltd enters into an agreement with a third party (unrelated to the party under Milestone
1) for a Limited Deployment of its technology with the objective of demonstrating removal of the requirement for
transcoding of video and reduction of storage. This deployment will be in partnership with a an organisation that is
able to take a standard video and transcode it into all standards-based formats and store it at broadcast quality,
likely to be a content delivery network by that date which is 24 months from the issue date (Milestone 3); and
(D) Class D – Completion of a Limited Deployment with a third party (which may or may not be one of the parties
under Milestones 1 and 3) which demonstrates that the Linius technology removes the requirement for transcoding
of an original MPEG-4 video file to play out on devices traditionally requiring differing formats and in doing so
reduces storage requirements, and the issue of a report, either prepared by or verified by the third party, confirming
this (Milestone 4),
At balance date Milestone 1 and Milestone 2 had been achieved and 100,000,000 performance shares had
converted to ordinary shares.
PAGE 46
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
NOTES TO THE FINANCIAL REPORT FOR THE PERIOD ENDED 30 JUNE 2016
Note 23: R&D TAX INCENTIVE – RESEARCH AND DEVELOPMENT
Since the formation of Linius (Aust) Pty Ltd, the main activity of the company has been the continued research and
development of the Linius technology, specifically the research and software development associated with the
Linius Video Virtualization Engine™ (VVE).
The directors are of the view that the consolidated group will be entitled to a R&D Tax Incentive in regard to the
research and development expenditure incurred in the 2016 financial year. However, the receipt of this incentive is
not sufficiently certain, considering that Linius (Aust) Pty Ltd was newly incorporated during the current financial
year and has no history of registering for and claiming research and development incentive. Therefore there is no
accrual in the financial statements for any income related to a research and development tax rebate for the 2016
year. Any such incentive will be accounted for in the year it is received. The directors conservatively estimate that
the Group will be entitled to a R&D Tax Incentive of approximately $140,000 on expenditure in the 2016 year.
NOTE 24: PARENT ENTITY DISCLOSURES
The following detailed information is related to the legal parent entity Linius Technologies Limited
as at 30 June 2016
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Total liabilities
Equity
Issued Capital
Option premium reserve
Share based payments reserve
Accumulated losses
Total equity
Financial performance
Loss for the year
Total comprehensive loss
For details on commitments, see Note 17.
2016
$
3,254,775
18,650,000
21,904,775
2015
$
725,939
-
725,929
16,805
16,805
20,094
20,094
27,450,424
4,970,029
36,461
1,708,135
(7,307,050)
21,887,970
2016
$
3,006,405
3,006,405
36,461
-
(4,300,645)
705,845
2015
$
(659,756)
(659,756)
PAGE 47
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
DIRECTORS’ DECLARATION
In the directors’ opinion:
The attached financial statements and notes comply with the Corporations Act 2001, the Australian
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 1 to the financial
statements;
the attached financial statements and notes give a true and fair view of the Consolidated Group's
financial position as at 30 June 2016 and of its performance for the financial period 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.
Stephen McGovern
Director
31 August 2016
PAGE 48
For personal use only
INDEPENDENT AUDITOR’S REPORT
To the members of Linius Technologies Limited
Report on the Financial Report
We have audited the accompanying financial report of Linius Technologies Limited(“the company”), which
comprises the consolidated statement of financial position as at 30 June 2016, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement of
cash flows for the year then ended, notes comprising a summary of significant accounting policies and other
explanatory information, and the directors’ declaration, of the Group comprising the company and the entities
it controlled at the year’s end or from time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In Note 1, the directors also state, in accordance with Accounting Standard AASB 101: Presentation of
Financial Statements, the consolidated financial statements comply with International Financial Reporting
Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit
in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical
requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance
about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the
risks of material misstatement of the financial report, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the Group’s preparation of the financial report
that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the company’s and its controlled
An audit also includes evaluating the appropriateness of accounting policies used and
entities’ internal control.
the reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the financial report.
Our audit did not involve an analysis of the prudence of business decisions made by directors or management.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533.
Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of
International, a worldwide organisation of accounting firms and business advisers.
For personal use only
Auditor’s Opinion
In our opinion:
(a)
the financial report of Linius Technologies Limited is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2016 and its performance
for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b)
the financial report also complies with International Financial Reporting Standards as disclosed in Note
1.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2016.
The directors of the company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on
the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Linius Technologies Limited for the year ended 30 June 2016
complies with section 300A of the Corporations Act 2001.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
31 August 2016
D I Buckley
Partner
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
ADDITIONAL INFORMATION FOR LISTED COMPANIES
1.
Shareholding as at 24 August 2016
a.
Distribution of Shareholders
Category (size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
Above 100,001
Number
Holders
10
6
54
Number
Ordinary
1,382
18,248
488,603
428
20,426,258
307 541,304,089
805 562,238,580
b.
The number of shareholdings held in less than marketable parcels is 28.
c.
The names of the substantial shareholders listed in the holding Consolidated Group’s register
as at 24 August 2016 are:
Shareholder
Number
Ordinary
%
1 Phoenix Myrrh Technology Pty Ltd
250,000,000
44.47
2 Earthrise Holdings Pty Ltd
45,000,000
8.00
d.
Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary shares
—
Each ordinary share is entitled to one vote when a poll is called, otherwise each member
present at a meeting or by proxy has one vote on a show of hands.
PAGE 51
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
ADDITIONAL INFORMATION FOR LISTED COMPANIES (CONTINUED)
e.
20 Largest Shareholders — Ordinary Shares
Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Phoenix Myrrh Technology Pty Ltd
Earthrise Holdings Pty Ltd
Steve McGovern Nominees Pty Ltd
Naley Pty Ltd
Parlin Investments Pty Ltd
One Managed Investment Funds Limited
Sunshore Holdings Pty Ltd
Sunshore Holdings Pty Ltd
One Managed Investment Funds Ltd
Coral Brook Pty Ltd
Jetmax Trading Pty Ltd
Celtic Capital Pty Ltd
Duncan Lawrie Offshore Services Limited & JDO Assoc Ltd
Viminale Pty Ltd
David Peter Valentino
Mr Roger Steinepreis & Mrs Jacqueline Steinepreis
Cintra Pty Ltd
Timriki Pty Ltd
Ferncourt Enterprises Pty LTd
MAPD Nominees Pty Ltd
f.
Distribution of Option holders (ASX code LNUOA)
Category (size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
Above 100,001
Number of
Ordinary Fully
Paid Shares
Held
250,000,000
45,000,000
20,000,000
20,000,000
15,000,000
7,179,500
6,063,637
5,650,000
5,640,000
5,568,182
5,210,000
4,685,000
4,033,637
3,874,873
3,500,000
3,181,819
3,000,000
3,000,000
2,875,000
2,250,000
415,711,648
% Held of
Issued
Ordinary
Capital
44.47
8.00
3.56
3.56
2.67
1.28
1.08
1.01
1.00
0.99
0.93
0.83
0.72
0.69
0.62
0.57
0.53
0.53
0.51
0.40
73.94
Number
of
Number
of
Holders
Options
0
11
8
49
23
91
0
52,250
63,334
1,967,874
12,444,096
14,527,554
PAGE 52
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
g.
20 Largest Option holders — LNUOA Options at 4 cents expiry
31 December 2016
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Name
Ms Nicole Gallin & Mr Kyle Haynes
Duncan Lawrie Offshore Ltd & JDO Assoc Ltd
Mr Nicholas Dermott McDonald
Ranchland Holdings Pty Ltd
First Investment Partners Pty Ltd
Coral Brook Pty Ltd
Mrs Fionnuala Catherine Edmondson
Mr Anthony Alexander Anderson
NTJ Investments Pty Ltd
MR J L Brownlow & Ms E L Grant
Minico Pty Ltd
Humble Pty Ltd < Humble Family A/C>
Brownlow PR Pty Ltd
Paranoid Enterprises Pty Ltd
Mr Anthony Alexander Anderson
Super MSJ Pty Ltd
Mr Chanly Nguyen
Mr Peter Hamilton Hayes & Ms Megan Jane Armitage
Mr Robert Speirs
Social Investments Pty Ltd
Number of
Options Held
% Held of
Options
1,500,000
1,500,000
1,349,000
1,250,000
786,008
625,000
600,000
600,000
500,000
500,000
450,000
315,900
300,000
300,000
300,000
290,000
268,992
216,330
195,000
100,000
12,032,230
10.33
10.33
9.29
8.60
5.41
4.30
4.13
4.13
3.44
3.44
3.10
2.17
2.07
2.07
2.07
2.00
1.85
1.50
1.34
1.28
82.82
PAGE 53
For personal use only
LINIUS TECHNOLOGIES LIMITED
ANNUAL REPORT 2016
ADDITIONAL INFORMATION FOR LISTED COMPANIES (CONTINUED)
2.
3.
The name of the Company Secretary is Mr Stephen Kerr.
The address of the principal registered office in Australia is:
Level 40, 140 William Street
MELBOURNE VIC 3000
Telephone 03 9607 8234
4.
Registers of securities are held at the following addresses:
Advance Share Registry
110 Stirling Hwy
NEDLANDS
WA 6009
Australia
5.
Securities Exchange Listing
Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of
the Australian Securities Exchange Limited.
6. In accordance with ASX Listing Rule 4.10.19, the Consolidated Group advises that, since re-listing on
9 May 2016, it has used its cash in a way consistent with its business objectives.
PAGE 54
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