ANNUAL REPORT 2021
Consolidated financial statements
for the year ended 30 June 2021
LiveTiles Limited • ABN 95 066 139 991
LiveTiles Annual Report 2021
2
Contents
Company Snapshot
Letter from the Chair and CEO
Director’s Report
Remuneration Report
Consolidated Financial Statements
Independent Auditor’s Report
Shareholder Information
Corporate Information
3
10
16
36
52
103
108
112
Contents 3
COMPANY
SNAPSHOT
LiveTiles Annual Report 2021 LiveTiles Annual Report 2021
Company Snapshot
4
WE ARE LIVETILES
LiveTiles creates workplace technology for companies of all sizes
to connect their employees to everything they need at work for a
more personal, productive and purposeful experience. From complex
digital workplaces to quick-to-deploy mobile apps our solutions help
connect people to the very best employee experiences.
Our company is a pioneer in the Employee Experience
Platform (EXP) space. Employee experience is
LiveTiles views Employee Experience in 5 key pillars:
the emotional connection that emerges from the
• Connection – helping companies create authentic
experience between a person and their employer.
relationships between employees and employers.
Great Employee Experience is where employees
are deeply connected and engaged to a company’s
purpose, brand, values and vision, and where
employees are enabled to perform at their best
and are happy and healthy at work and in life.
• Engagement – helping employees communicate
and collaborate effectively within their teams and
across the organisation. Simplifying the way people
do their work by creating experiences that bring
content from many systems into a single interface.
• Well-being – helping companies prioritise
the well-being of their people.
• Performance – helping people understand how
to be successful in their roles, by creating highly
connected, engaged and healthy employees.
• Inspiration – helping companies create
environments where people are inspired to drive
strong company performance and innovation.
COMPANY
SNAPSHOT
Product sales
commenced in
February 2015
Listed on the
Australian Stock
Exchange in
September 2015
2018 - Acquired
Hyperfish, a US
AI/Bot company
for A$8.9m
LiveTiles Annual Report 2021
5
The EXP industry is growing at a rapid rate as
LiveTiles products offer a range of business-critical
companies around the world make the investments
capabilities, enabling strong communications,
needed to improve the experience of their employees
collaboration and engagement between employees.
to retain talent and increase productivity.
This also includes a powerful integration service
which facilitates the seamless integration of key
Employers need to adapt to become a place where
business system’s data from other applications
all employees actually want to work, not somewhere
into the LiveTiles experience.
they need to. An employee will interact with their
workplace technology differently depending on
With both Desktop and Mobile solutions, LiveTiles
whether they are a frontline worker or at a desk,
is one of the few companies in the world that offers
a Millennial or a Baby Boomer, a Full-Timer or a
a fully integrated solution to all workers.
Contractor. Employee Experience Platforms must
bridge all these divides.
MOBILE
Newly launched
mobile application
for staff
communications.
Primary target
market : Frontline
workers with no PC
access.
Our Solutions
10
DESKTOP
Solutions for
improving the
workplace tech
environment. From
intranet to more
complex Employee
Experience Platforms
(EXP). Our products
make it easy for
employees to get the
information they want,
in the application or
environment of their
choice.
2019 - Acquired
Wizdom, a Danish
digital software
company for A$48m
2019 - Acquired
CYCL, a Swiss
intranet software
company for $32.2m
2.3m Contracted
Licences as at
30 June 2021
92% ARR Net
Retention Rate
Company Snapshot LiveTiles Annual Report 2021
Company Snapshot
6
Mobile employee app
LiveTiles Reach
Desktop
Employee Experience Platform
Demand has exceeded expectations
A solution to simplify the complexity
of the traditional digital workplace.
Description
Employee communications app.
SaaS product hosted by LiveTiles.
Description
Target
market
Frontline workers with no PC
access. e.g. Healthcare, Retail,
Services, Construction, Manufacturing
Market size
US $11bn1
Competitors
Workplace by Facebook, Staffbase,
Workjam, Beekeeper, Dynamic Signal,
Slack etc
Complexity
Low
Go to market
Direct and via Partners
Sales cycle
1-6 months +. In person meetings
preferable. Installation within minutes.
Complexity
“Stay in the loop with personalised employee
experiences for everyone.”
1. Source : Statista https://www.statista.com/statistics/633178/worldwide-communication-
software-market-size/
What was a traditional intranet
has transformed into a much more
complete offering. Low code,
customisable solutions with a variety
of additional features to drive strong
employee experience.
Target
market
Medium to large enterprises
with >500 employees
Market size
US $300bn
Competitors
Highly fragmented market.
Traditional IT firms, Company
in-house developers, Unily, Simplrr,
LumApps, Igloo, Valo, Powell etc.
Medium to high. Most large
organisations require integration
and customisations of “tool kit”. LVT’s
proprietary integration hub facilities
this. LVT also offers a variety of
advanced add-on capabilities such
as “Directory” and “Everywhere”.
Go to market
Direct and via Partners
Sales cycle
6-12 months. In person
meetings preferable.
More than an “intranet”, LiveTiles is a pioneer
in this evolving space.
Revenue of
$45m as at
June 2021
$(1.1)m
Underlying
EBITDA
$51.8m
Cash receipts
7
Operating revenue up 19% year on year
Operating Revenue
Govt. and Other Income
44.5
46.7
37.8
45.0
6.7
FY20
1.7
FY21
22.5
18.1
4.4
FY19
$AUDm
Average annualised recurring revenue per customer up 22%
57%
5yr CAGR
$A
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$0
7
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$45m
Operating Revenue
+19% yoy
2.3m
Contracted licences
+48% yoy
+1211%
LiveTiles Reach (Mobile)
licence growth (yoy)
$(1.1)m
Underlying EBITDA
+91% yoy
LiveTiles Annual Report 2021Key Statistics
Total contracted licences up 48% in FY21
Mobile Licences
+1211%
28k
FY20
363k
FY21
Desktop Licences
+14%
1.5m
1.7m
FY20
FY21
Mobile & Desktop Bundled (EXP)
+458%
245k
44k
FY20
FY21
Licences for both products
TOTAL
+48%
2.3m
1.6m
FY20
FY21
8
$51.8m
Cash receipts
+26% yoy
145
Employees in the US,
EMEA and APAC
$62.8m
ARR
+17% yoy
92%
ARR Net $ Retention
LiveTiles Annual Report 2021Key Statistics 9
Cash receipts up 26% for FY21
m
$
D
U
A
60
50
40
30
20
10
0
51.8
41.0
19.6
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Annualised recurring revenue by industry as at 30 June 2021
6%
Education
13%
Other
9%
Financial
services
19%
Services
13%
Retail/
Consumer
14%
Industrials
14%
Government
12%
Healthcare
LiveTiles Annual Report 2021FY21 Financial and Business Highlights
10
LETTER FROM
THE CHAIR AND CEO
LiveTiles Annual Report 2021 11
Chairman’s Letter
Dear Shareholder,
It is a pleasure to present LiveTiles’ Annual Report for
the 2020-21 financial year.
Since my appointment in September 2020, LiveTiles
has progressed from a digital workplace technology
provider to a pioneer in the Employee Experience
Platform (EXP) space. ‘Employee Experience’ as we
knew it has changed forever and a renaissance of the
concept is underway - right now - as a result of the
dramatic changes in working environments around
the globe. Organisations are becoming more mindful
of the experiences they influence. Almost every
organisation is realising the need to fundamentally
change the way it engages with employees, the way it
attracts and develops them, and ultimately, the way it
connects with them so that employees feel they belong
to a deeply connected purpose-driven community.
Employees, now more than ever, need the means
to connect, and disconnect, to set boundaries for
the betterment of their own and their colleagues’
health and wellbeing. It’s no longer just about getting
employees to engage with content. But it’s about
generating deeper connections and interactions
where employees are engaging, collaborating and
learning from each other.
We believe that LiveTiles is uniquely positioned to
capitalise on the rapidly evolving EXP market. We are
one of the few companies in the world that offers fully
integrated solutions - both mobile and desktop – that
enhances the engagement and collaboration needs
of any employee in any industry, presenting both
short- and long-term growth opportunities.
In FY21, LiveTiles became ‘leaner and sharper’
concentrating on improvements across the business
and realising healthy growth in our licence base
and operating revenues. We reduced operating
expenditures putting the company on a pathway to
profitability and our Board is committed to continue
its focus on disciplined cost management during
FY22 and beyond.
In acknowledgement of our share price performance
and shareholder feedback, the Board commissioned
an independent strategic review in Q3 of FY21 with
the aim of evaluating the operations, structure and
strategy of LiveTiles. The Board endorsed the review
findings, resulting in a new strategic plan, with the
execution of this plan started in late Q4 FY21,
and will continue throughout FY22.
The review confirmed that LiveTiles is well positioned
to capitalise on the growing Employee Experience
market noting the recent success of LiveTiles Reach.
It has been encouraging to see the success of LiveTiles
Reach, our Employee Experience mobile app, and
the competitive advantage it has given LiveTiles in
the market. Our LiveTiles Reach offering has been
instrumental in securing record company deals and
work with renowned global organisations such as
United Healthcare Group, Nestle and Footlocker.
This success comes as a result of production innovation
based on deep customer insight, dedication to our
long-term view and relationship building, and I thank
the LiveTiles team for these achievements to date. We
look forward to significantly leveraging our LiveTiles
Reach offering within the EXP market in FY22.
Another important outcome of the review has
been our focus on improving LiveTiles’ operating
efficiencies. The leadership team is focused on
simplifying our business model, on consolidating
our product portfolio, on refining our go-to-market
strategy, and on disciplined performance
management. To date, this has had improved
underlying performance, which we expect to
continue throughout FY22 and beyond.
The outcomes of the commissioned review did not
come without its challenges. The company undertook
a restructure during Q4 of FY21, which resulted in a
number of our colleagues leaving. We thank them for
their contributions and commitment to LiveTiles.
LiveTiles Annual Report 2021Letter from the Chair and CEO 12
During the 2021 financial year, I was delighted to
I would like to thank our shareholders, customers
welcome Fiona Le Brocq and Jesse Todd to the
and partners for their ongoing support and patience
LiveTiles Board. Fiona is a highly regarded branding
during what has been an unusually challenging
and marketing expert with additional skills in
pandemic environment.
digital transformation, customer experience and
employee experience. Jesse brings an impressive
The Company is focused and well positioned
range of complementary skills including a forensic
to maximise EXP growth opportunities in FY22
understanding of technology solutions particularly
and beyond.
for blue-chip companies and large public sector
organisations across the globe.
We will also continue to focus on inclusion and
diversity. In terms of gender diversity, 57% of all new
Yours sincerely,
hires during FY21 in the APAC region are female.
However, the Board does acknowledge that overall
Dr Marc Stigter
only 25% of LiveTiles employees are female and only
Chairman
one of the five board members is female. In FY22,
LiveTiles Ltd.
the Board will make the reshaping of our inclusion
and overall diversity strategies, targets
and measurements a top priority.
Our people deserve a sincere thanks for their hard
work and affective commitment to LiveTiles. I have
been impressed by the collective ability, desire and
courage of LiveTilers to think differently and create
unforgettable experiences for our customers. This
is not just an espoused value but a consistently
demonstrated one that has become the norm within
LiveTiles. The vibe and energy that I am experiencing
at LiveTiles underpins our culture. How we foster and
further evolve our own Employee Experience and
culture during the next few years will be a key area
of focus to me.
LiveTiles Annual Report 2021Letter from the Chair and CEO
13
CEO’s Letter to Shareholders
FY21 Operational Overview
Dear Shareholder,
Customers and Partners
The last 12 months have been extraordinary, and I’d
like to offer my thanks for your continued investment
and support. FY21 was not without its global
operational challenges due to the ongoing uncertainty
with COVID-19. But we have continued to make
significant improvements across the business during
the year, while executing strict cost discipline,
and we are pleased with the foundation the
Company has built for FY22.
FY21 Financial Performance Overview
Our focus on delivering the best Employee Experience
solutions through innovation and service has resonated
strongly with customers and users. Over the last 12
months we have continued to obsess over providing
the best experience possible for our customers with
product and service innovations, as well as strategic
partnerships to help grow sales pipeline.
We have been successful in leveraging strategic
partnerships to accelerate customer acquisitions,
drive product innovation and improve the customer
experience. Examples include making strategic
Despite the challenges of FY21, our contracted licence
investments into R&D partnerships with leading
base grew 48% to 2.3 million, including an outstanding
Australian Universities and research bodies, to
1211% increase in LiveTiles Reach. LiveTiles Reach
deepen the functionality of LiveTiles products,
was instrumental in signing record company deals
joining the ServiceNow Partner Program and
with some of the world’s largest brands, including
the International Association of Microsoft
United Healthcare Group and Nestle, which helped
Channel Partners to broaden our go-to-market
deliver 19% growth in operating revenues to $45m.
channel opportunities, and our certification with
Combined with our continued focus on keeping
ISO27001:2013, a highly sought-after information
operating expenditures under control, LiveTiles is now
on a path to profitability with Underlying EBITDA1
security management standard.
at $(1.1)m, a 91% improvement from FY20.A deeper
Employees and social well-being
look into the numbers reveals more encouraging signs
for our business. Cash Receipts of $51.8m in FY21
were a fresh record, that’s an increase of 26% year on
year and represents a 96% 3-year Compound annual
growth rate.
Adjusted2 net operating cash flow on a trailing twelve
month basis has improved by 72% from $(22)m in
FY20 to $(6.2)m. Cash and cash equivalents was
$16.8m as at 30 June 2021, leaving sufficient capital
to manage ongoing operations.
At LiveTiles, we believe that Employee experience
(EX) is the emotional connection that emerges from
the experience between a person and their employer.
Our continuous mission is to ensure that LiveTiles
employees feel deeply connected to our company’s
values, purpose, brand, and vision. As a company,
we are always evolving and embracing change as we
adapt to fluctuations in the market and the needs
of our customers. However, our internal values are
one aspect of the employee experience that remain
constant and unwavering.
1. Underlying EBITDA excludes non-cash expenses and one-off non-recurring items
2. Adjusted Net Operating Cash Flows includes cash payments for capitalised software development costs (reported in Investing Activities), lease liability payments (reported in Financing activities)
and excludes government grant income, as this is an accurate reflection of the Company’s operating cash positions
LiveTiles Annual Report 2021Letter from the Chair and CEO 14
The LiveTiles core values state that we are
2025 Carbon Target
decent humans, we get stuff done, and we create
unforgettable experiences. These values underpin
all aspects of the employee experience at LiveTiles,
from recruitment, to onboarding, to conduct, to
performance management, development, and all
the moments in between.
LiveTiles has always prided itself on being a people
first company, one that embraces work/life blend
(note, we don’t use the term “balance” which we
believe to be more suggestive of a complex juggling
act), and we are a company that truly cares about
the wellbeing of its employees.
Globally we have implemented competitive and
consistent leave policies that encourage employees
to take paid leave when needed or desired. In addition
to annual leave, employees are provided additional
Employee Experience Platforms help human beings
work remotely and more efficiently. Our software
reduces carbon emissions by boosting the performance
and wellbeing of the human beings using it, as well as
minimising unnecessary travel and bottlenecks.
Today, LiveTiles takes another step. We are pledging
to achieve net-zero emissions by 2025. This is
significantly ahead of many industry peers.
Our strategy to reduce our emissions will be
multifaceted and will be assisted by Tim Hodgson,
founder of carbon pledge start-up MyNetZero,
to help bring our employees and our partners
on this journey with us.
Outlook
days of paid leave to dedicate to initiatives that bring
In light of the ongoing uncertainty created by the global
joy outside of work.
COVID-19 pandemic and the challenges it brings to the
global business operations, the Group has decided not
Our unique Employee Experience (EX) days allow
to provide guidance in respect to FY22, other than
employees 2 additional days per year to try new
to reiterate its continued focus on disciplined cost
experiences, and our Volunteering policy encourages
management strategies and execution of the following
employees to take up to 4 days throughout the year
key strategic measures:
to give back to the community or contribute to a
cause that will better our world.
• Continuing to leverage the operating model for
efficiencies to maximise commercial opportunities
The pandemic has highlighted the growing importance
• Reshaping the go-to-market model and simplifying
of mental health awareness and support in the
LiveTiles’ product portfolio
workplace, and LiveTiles has bolstered its existing
programs to include quarterly training in mental
health first aid. The company has expanded the
reach and accessibility of its Employee Assistance
Program (EAP) with 24/7 phone or online counselling
• Accelerating the product roadmap for scale and
working with strategic partners in new product
development to further cement LiveTiles leading
position in the global Employee Experience market.
available in all regions and time zones. In addition to
• The addition of our Employee Mobile App has
mental health support, LiveTiles employees have the
not only strengthened our product offering but
opportunity to participate in regular online fitness
increased the work environments that we can
classes, meditation and mindfulness sessions, and
target so that all workers can maximise their
frequent social gatherings (online and in person) to
Employee Experience.
further support wellbeing and connection.
LiveTiles Annual Report 2021Letter from the Chair and CEO 15
We would like to express our gratitude to the
ongoing support from our shareholders, customers
and partners and thank our dedicated staff for their
commitment and hard work. We remain focused on
delivering our new Premiership Plan, our unchanged
vision to be a market leader in Employee Experience
and building long term value for our shareholders.
Our Board and Management team are committed
to continue to focus on disciplined cost management
strategies to maximise our growth opportunities and
our confidence in the medium to longer term outlook
remains strong.
Karl Redenbach
Chief Executive Officer & Co-Founder
LiveTiles Ltd
LiveTiles Annual Report 2021Letter from the Chair and CEO 16
DIRECTORS’ REPORT
LiveTiles Annual Report 2021 17
The Directors present their report together with the financial statements of the consolidated group
(the Group), being LiveTiles Limited (the Company) and its controlled entities for the year ended 30 June 2021.
Directors
The names of the directors in office at any time during the financial year and up to the date of this report
(unless stated otherwise) are:
Dr Marc Stigter
Non-executive Chair (appointed 11 September 2020)
Karl Redenbach
Executive Director and Chief Executive Officer
Peter Nguyen-Brown
Executive Director and Chief eXperience Officer
Jesse Todd
Non-Executive Director (appointed 15 April 2021)
Fiona Le Brocq
Non-Executive Director (appointed 15 April 2021)
Andrew McKeon
Non-Executive Director (resigned 15 April 2021)
David Lemphers
Non-Executive Director (resigned 11 September 2020)
Dana Rasmussen
Non-Executive Director (resigned 15 April 2021)
Information on directors
Karl Redenbach
Executive Director and Chief Executive Officer
Appointed
25 August 2015
Experience and
qualifications
Karl Redenbach co-founded the LiveTiles concept, together with Peter Nguyen-Brown,
in 2012. Karl was also a co-founder and the former CEO of the nSynergy Group, a global
technology consulting business. Karl was awarded CEO of the year by the Australian
Human Resources Institute in December 2014. Karl holds a Bachelor of Laws and
a Bachelor of Arts from Monash University and completed the Owner/President
Management program at Harvard Business School.
Special responsibilities
None
Peter Nguyen-Brown
Executive Director and Chief Experience Officer
Appointed
25 August 2015
Experience and
qualifications
Peter Nguyen-Brown has over 20 years experience in technology consulting and
software development. Peter co-founded the LiveTiles concept, together with
Karl Redenbach, in 2012. Peter was formerly Chief Operating Officer and co-founder
of the nSynergy Group, a global technology consulting business. Peter holds a
Bachelor of Applied Science in Computer Science and Software Engineering from
Swinburne University.
Special responsibilities
Remuneration Committee
Directors’ ReportLiveTiles Annual Report 2021 18
Marc Stigter
Non-Executive Chair
Appointed
11 September 2020
Experience and
qualifications
Dr Marc Stigter is a global expert in creating high value boards, and driving strong
leadership and performance in organisations. Marc is a former Shell Country Chairman
in the Middle East and worked for other blue-chip companies around the world. He
earned a PhD at Lancaster University Management School (UK) and also has three
Masters degrees. He is an Honorary Senior Fellow at the University of Melbourne and an
Associate Director at Melbourne Business School. His books on rethinking governance,
strategy and culture are published by Bloomsbury and Palgrave Macmillan.
Special responsibilities
Remuneration Committee, Audit and Risk Committee
Jesse Todd
Non-Executive Director
Appointed
15 April 2021
Experience and
qualifications
Jesse Todd is a global technology leader specialising in governance technology solutions
for enterprise companies and public sector organisations across the world. Mr Todd is
the co-founder and current CEO of compliance software consultancy firm Informotion
and SaaS compliance platform EncompaaS. Prior to that Jesse served as Head of Group
Technology for the Royal Bank of Scotland where he was responsible for technology
across all the non-trading functions. In addition, Jesse has as worked for some of the
largest financial companies including BT, Deutsche Bank and ABN AMRO.
Special responsibilities
Audit and Risk Committee (chair), Remuneration Committee
Fiona Le Brocq
Non-Executive Director
Appointed
15 April 2021
Experience and
qualifications
Fiona Le Brocq has more than 25 years’ experience in marketing, building and growing
brands across industries including health insurance and healthcare, digital marketplace
and finance. She is passionate about customer-centricity, and the role that brands play to
drive long-term growth. She spent 15 years agency-side working with ANZ, Transurban,
Qantas and ABC before more moving to NAB, followed by SEEK, then moving to
Medibank in 2015. Fiona’s current role is Senior Executive, Brand, Marketing & CX,
responsible for customer growth, brand strategy and management, digital marketing
& automation and lifecycle strategy.
Special responsibilities
Audit and Risk Committee, Remuneration Committee (chair)
Andrew McKeon
Non-Executive Director
Appointed
1 April 2017, resigned 15 April 2021
Experience and
qualifications
Andrew McKeon has over 25 years of global marketing experience and is currently
the Global Chief Creative Officer at Genero, a global video production marketplace.
Prior to Genero, Andrew was the Global Accounts and Agencies Lead for Facebook and
Instagram, where he managed relationships with Facebook’s largest customers including
Amazon, Nike and Apple. Prior to Facebook, Andrew was a creative director at Apple
where he helped launch a number of Apple’s most innovative products. Andrew holds
a Bachelor of Economics degree from Monash University.
Special responsibilities
Audit and Risk Committee, Remuneration Committee
Directors’ ReportLiveTiles Annual Report 2021 19
David Lemphers
Non-Executive Director
Appointed
1 September 2018, resigned 11 September 2020
Experience and
qualifications
David Lemphers has over 20 years of software engineering and technology strategy
experience and is currently the CEO of Code Pilot, an AI acceleration platform. David
is also a seasoned entrepreneur having completed multiple successful exits. David is
currently CTO in Residence at Techstars, a global startup accelerator based out of the US.
David’s prior experience includes leading the National Cloud Computing practice for PwC
and being a founding member of the Windows Azure team at Microsoft where he spent
5 years as an engineer. David holds a Bachelor of Computer Science from Swinburne
University and a Bachelor of Laws from Monash University.
Special responsibilities
Remuneration Committee
Dana Rasmussen
Non-Executive Director
Appointed
27 September 2019, resigned 15 April 2021
Experience and
qualifications
Dana is an accomplished people executive based in San Francisco and is currently
the VP People & Culture at Stitch Fix, a leading US technology and ecommerce business.
Prior to this role, Dana held senior people function roles at Honor, Flywheel Sports,
Banana Republic, L Brands and Yahoo.
Dana holds a Bachelor of Science – BS, Business Management, Organisational
Behaviour from Babson College and a Business Fellowship at Templeton College,
University of Oxford.
Special responsibilities
Remuneration Committee
Directors’ interests in shares and options
As at the date of this report, the interest of the directors in the shares (including shares held under
the Management Incentive Plan) and options of the Company were:
Number of ordinary shares
Number of options over
ordinary shares
Karl Redenbach
Peter Nguyen-Brown
Dr Marc Stigter
Jesse Todd
Fiona Le Brocq
Andrew McKeon
David Lemphers
Dana Rasmussen
90,982,547
78,232,547
118,105
175,900
-
-
-
-
-
-
-
-
-
-
-
-
Directors’ ReportLiveTiles Annual Report 2021
20
Meetings of directors
The number of meetings of directors (including meetings of committees of directors) held during the year
and the number of meetings attended by each director were as follows:
Directors’ meetings
Audit and Risk
Committee
Remuneration
Committee
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Karl Redenbach
Peter Nguyen-Brown
Dr Marc Stigter1
Jesse Todd2
Fiona Le Brocq3
Andrew McKeon4
David Lemphers5
Dana Rasmussen6
Notes:
7
7
4
2
2
5
3
5
7
7
4
2
2
5
1
5
–
–
1
1
1
–
–
–
–
–
1
1
1
–
–
–
–
1
–
–
–
–
1
1
–
1
–
–
–
–
1
1
1. Dr Marc Stigter was appointed as Chair and Non-Executive Director on 11 September 2020
2. Jesse Todd was appointed as Non-Executive Director on 15 April 2021
3. Fiona Le Brocq was appointed as Non-Executive Director on 15 April 2021
4. Andrew McKeon resigned as Non-Executive Director on 15 April 2021
5. David Lemphers resigned as Non-Executive Director on 11 September 2020
6. Dana Rasmussen resigned as Non-Executive Director on 15 April 2021
Committees and membership
During the year, the Company had the following committees:
• Audit and Risk Committee; and
• Remuneration Committee.
The Remuneration Committee was in place from 1 July 2020 for the entire FY21; the Remuneration Committee
consisted of the following Board Members through the period:
David Lemphers
1 July 2020 – 11 September 2020
Dana Rasmussen (Chair)
1 July 2020 – 15 April 2021
Peter Nguyen-Brown
1 July 2020 – 30 June 2021
Marc Stigter
11 September 2020 – 30 June 2021
Fiona Le Brocq (Chair)
15 April 2021 – 30 June 2021
Jesse Todd
15 April 2021 – 30 June 2021
Directors’ ReportLiveTiles Annual Report 2021
21
On 15 April 2021 the Audit and Risk Committee was re-established. Mr Todd was appointed as Chair
of the Audit and Risk Committee and Dr Stigter and Ms Le Brocq as members.
Dr Stigter assumed the position of Chair of the Board upon his appointment on 11 September 2020.
Members acting on the committees of the board during the year were:
Audit and Risk Committee
Remuneration Committee
Jesse Todd (Chair)
Fiona Le Brocq
Dr Marc Stigter
Fiona Le Brocq (Chair)
Jesse Todd
Dr Marc Stigter
Peter Nguyen-Brown
Dana Rasmussen (resigned 15 April 2021)
David Lemphers (resigned 11 September 2020)
Information on Company Secretary
David Hwang has held the position as Company Secretary of the Company since 7 April 2021. Prior to that,
Andrew Whitten held the position as Company Secretary of the Company since 28 April 2015.
David is a Principal of Automic Legal and Chief Compliance Officer of Automic Group. He is an experienced
executive, corporate lawyer and company secretary specialising in listings on ASX (IPOs and reverse listings),
equity capital markets and providing advice on corporate governance and compliance issues. David currently
serves as outsourced company secretary and non-executive director to a number of ASX listed entities.
David holds a Bachelor of Laws from UNSW.
Principal activities
The Group’s principal continuing activities during the year was being a Software as a Service (SaaS) provider,
specialising in the development and sale of Employee Experience software via cloud-based platform offerings.
LiveTiles is a global leader in the Employee Experience workplace software market, creating and delivering
solutions that drives engaged employee communication and collaboration in the modern workplace. LiveTiles
has over 1,000 enterprise customers representing a diverse range of sectors across North America, Europe
and Asia Pacific.
Directors’ ReportLiveTiles Annual Report 2021 22
Operating and Financial review
Certain financial information in the review of business operations below referencing Earnings Before Interest,
Tax, Depreciation and Amortisation (EBITDA) has been derived from the reviewed financial statements.
The Annual Recurring Revenue (ARR1), EBITDA and Underlying EBITDA positions are non-IFRS financial
information used by Directors and Management to assess the underlying performance of the business and
as such have not been reviewed in accordance with Australian Auditing Standards.
During the year ended 30 June 2021, despite the ongoing global challenges with COVID-19, LiveTiles has
achieved another year of strong growth across its key business metrics of ARR, Revenues, EBITDA and Cash.
• ARR grew +17% to $62.8m (2020: $53.8m), comprising 1,078 customers (2020: 1,092). On a constant
currency basis when compared with 30 June 2020 FX rates, ARR grew 20% to $64.7m as at 30 June 2021.
• Operating Revenues grew +19% to $44. 98m (2020: $37.8m).
• EBTIDA improved by +19% to $(16.2)m 2020: $(19.9)m. On an Underlying EBITDA basis, there was
a +91% improvement year over year to $(1.1)m.
• Cash Receipts grew +26% to $51.8m (2020: $41m) and Adjusted Net Operating Cash Flows2 improved
+26% to $(19.6)m (2020: $26.6m), when excluding one-off non-recurring payments in FY21 this position
improved +72% to $(6.2)m leaving cash balance at 30 June 2021 at $16.8m (2020: $37.8m).
1. LiveTiles defines ARR as revenue, normalised on an annual basis, that LiveTiles has a reasonable expectation it will continue to receive from its customers for providing them with products and services.
This definition includes committed recurring subscriptions for products and services, and includes service types where there is a demonstrable track record of repeat revenues such as support. It excludes
revenue deemed unlikely to be recurring in nature.
2. Adjusted Net Operating Cash Flows includes cash payments for capitalised software development costs (reported in Investing Activities), lease liability payments (reported in Financing activities) and excludes
government grant income, as this is an accurate reflection of the Company’s operating cash positions.
Directors’ ReportLiveTiles Annual Report 2021 The table below summarises the Group’s statement of profit or loss and other comprehensive income
for the year, as well as the EBITDA and Underlying EBITDA positions, which are used as key management
reporting metrics.
23
Software subscription revenue
Software related services revenue
Total operating revenue
Other income
Total Revenue
Cost of revenues
Gross Profit
Gross Profit Margin
Product research and development
Sales and marketing
General and administration
Total operating expenses
One off costs
Depreciation and amortisation
Non cash expenses
Net Operating Profit / (Loss)
EBITDA
EBITDA Margin
Underlying EBITDA
Underlying EBITDA Margin
Notes
(a)
(b)
(c)
(d)
(e)
FY21
($000s)
34,402
10,574
44,977
1,745
46,722
(12,155)
32,821
73.0%
(12,158)
(15,399)
(13,856)
(41,412)
FY20
($000s)
28,981
8,810
37,790
Movement
19%
20%
19%
6,678
(74)%
44,468
5%
(9,591)
28,200
(27)%
16%
74.6%
(16 pp)
(7,086)
(72)%
(24,628)
(21,060)
(52,774)
37%
34%
22%
(14,030)
(2,197)
(539)%
(5,950)
(2,737)
(6,508)
(5,139)
(29,562)
(31,740)
(16,206)
(36.3)%
(1,134)
(2.8)%
(19,891)
(52.6)%
163 pp
(12,558)
91%
(33.2)%
304 pp
9 %
47%
7%
19%
Net Profit / (Loss) after tax
(30,141)
(31,604)
5%
Notes
(a) Excludes other income.
(b)
(c)
Includes amortisation of capitalised software development costs of $5.3m during the period.
One-off costs include non-recurring expenses in connection to the settlement of litigation settled during the financial year, and one-off $1.6m Employee restructure and redundancy costs made in Q4FY21.
(d) Non-cash expense items include $0.7m share based payments, $1.7m finance charges related to discounting of CYCL earn out provision and $0.3 unrealised foreign currency movements.
(e)
In the 31 December 2020 appendix 4D accounts, the term Adjusted EBITDA was used; this has now been changed to Underlying EBTIDA as a more accurate and appropriate measure of underlying company
performance. There is no change however to the calculation or interpretation of the measure. Underlying EBITDA excludes non-cash expenses and one-off non-recurring items.
Directors’ ReportLiveTiles Annual Report 2021
24
Financial Year 2021 Highlights
ARR and Revenues
Organic ARR (Reported Currency)
Operating Revenue
Acquired ARR in FY
Govt. and other Income
62.8
53.8
49.1
62.8
4.7
FY20
FY21
40.1
32.1
8.0
FY19
44.5
46.7
22.5
18.1
4.4
FY19
37.8
45.0
6.7
FY20
1.7
FY21
ARR (AUD $m)
Revenue (AUD $m)
Despite the challenging operating environment over the past
12 months due to COVID-19, LiveTiles has successfully grown its
Operating Revenues by +19% in FY21 when compared to FY20.
This growth highlights the strength of the LiveTiles product offering in the evolving Employee Experience
market in a post-COVID work environment. Results driven by the Company’s new business sales from
both direct and indirect channels, the evolving sales motion of cross-selling LiveTiles products and upselling
licence counts into existing customers, strategic partnerships, ongoing product innovation and strengthening
brand awareness.
For the 12 months to 30 June 2021, total revenue and other income was $46.72m (2020: $44.47m), including
subscription revenue of $34.40m (2020: $28.98m), Software related services revenue of $10.57m (2020:
$8.8m) and government grant, other income of $1.7m (2020: $6.7m). In addition, unearned revenue (a balance
within the Statement of Financial Position) was $13.5m (2020: $11.28m); a result of invoicing customers their
full fees in advance of their subscription period, a feature of Software as a Service (SaaS) business models.
Directors’ ReportLiveTiles Annual Report 2021 25
ARR grew by +17% to $62.8m (2020: $53.8m)
• Alliance Partnerships. These contracted
comprising 1,078 paying customers (2020: 1,092)
partnerships provide channels for the re-sale and
with an average ARR per customer of $58.3k.
use of LiveTiles and alliance partner products to
On a constant currency basis when compared with
the partner’s end-customers each year. During the
30 June 2020 FX rates, ARR grew +20% to $64.7m
period there were existing contracted partnership
as at 30 June 2021.
arrangements recognised in the ARR from prior
periods, that had approx. $2.4m not transact into
ARR Net $ Retention3 at 30 June 2021 for the
revenue throughout periods of FY21 due to the
12-month period was 92%.
lack of sales by Partners to their end-users and
uncertainty on any potential billing and collection
During the past 12-18 months LiveTiles, its customers
efforts on the Partner itself.
and partners have all experienced various challenges
from the impact of the COVID-19 pandemic and as a
result; variances between the Company’s reported
ARR and FY21 operating revenues have been realised,
further explained from the following key material
contributing factors:
• COVID relief and deferred billings. LiveTiles
had customers and partners that faced financial
• Adverse FX movements: over the past 12 months
throughout COVID-19 the global markets have
been exposed to large currency fluctuations and
with 61% of LiveTiles revenues coming from outside
Australia, the company has been impacted with
adverse FX rate movements when converting
signed contracts to AUD, with an adverse impact
of approximately $2.1m.
hardships at various stages due to COVID and the
Company in the interest of maintaining its existing
• Delays in projects go-live: with a combination
of larger complex integrations and the ongoing
and long-term relationships with these partners
COVID-19 restrictions limiting the ability for
and customers agreed to provide commercial relief
face-to-face project workshops, these have both
during the financial year. It was agreed to provide
contributed to longer delays from when a contract
deferred billings or one-off reduced billed amounts
is signed (timing of ARR recorded) to when
with continued access to its subscription whilst
projects go-live and the licence effective dates
maintaining their contracted ARR values; over
start (timing of accounting revenue recorded),
the course of the financial year this contributed to
this has contributed approx. $2.2m of the ARR
approx. $2.3m for customer and $2.5m for partners
and Revenue variance across both partner and
of the ARR and Revenue variance.
customer channels.
These commercial concessions were provided as a
one-off; and the customers and partners will return
• Partner Margin: a cohort of partners acquired
through the Group acquisitions historically had
to their regular billing cycles per their ARR amounts
their gross contracted amounts reported in ARR,
in FY22.
whilst accounting revenue was reported as net of
partner discount margins, this has created approx.
$1.8m of the ARR and Revenue variance. This was
corrected over the last two quarters of FY21 and
will remain reported in the ARR value as ‘net’ of
partner discount margin, which is in line with rest
of the Group’s ARR recognition policy.
3.
Net Retention is ARR expansion from existing customers less any down sells or cancellations in the period / ARR at the beginning of the period. This does not include any ARR contracted to new customers or
impact of FX currency movements in that period.
Directors’ ReportLiveTiles Annual Report 2021 26
Customers
By Industry
20%
15%
10%
5%
0%
Education
Finance
G overn m ent
H ealthcare
Industrials
C onsu m er
Services
O ther
By Size
ARR Per Customer
26%
58.3
57%
5yr CAGR
49.3
0
0
0
$
D
U
A
43.6
28.1
11.0
5.2
6.2
FY15
FY18
FY21
74%
Enterprise
Mid Market
Directors’ ReportLiveTiles Annual Report 2021 27
During the 2021 financial year, Average ARR per customer over the year grew +18% from $49.3k to $58.3k and
+22% to $60.0k on a constant currency basis when using 30 June 2020 FX rates. A result that reflects the shift
in focus towards a greater mix of our customer based towards larger Enterprise customers. During the period,
there were 110 new customers added, taking total customer numbers at 30 June 2021 to 1,078, (2020: 1,092).
LiveTiles, as a leader in the Employee Experience market, continues to broaden its global base of enterprise
customers, driven by the portfolio of products that addresses the needs of the corporate and front-line
workforce around engagement, communication and collaboration. During the financial year 2021, the Group
announced its three largest ever Customer signings with Footlocker (Q2), United Healthcare Group (Q3) and
Nestle (Q4), that combined represents over 650,000 employees globally to potentially engage and collaborate
using the LiveTiles Platform, demonstrating the diverse and competitive offering LiveTiles provides across
multiple industries.
Operating Expenses and EBITDA Performance $AUDm
+$3.6m EBITDA (AUD $m) FY21 vs FY20
7.2
(16.2)
(11.8)
4.1
(19.9)
2.3
(2.6)
(4.7)
9.2
FY20
EBITDA
Revenue
Cost
of Sales
R&D
S&M
G&A
One-Offs Non-Cash
Expenses
FY21
EBITDA
Directors’ ReportLiveTiles Annual Report 2021 28
Product Research and Development
AUD $000s
FY21
FY20 Movement
Product research and development
(12,158.3)
(7,085.9)
72%
% of Total Revenue
26.0%
15.9%
101 pp
R&D increased $4.7m, the increase was a result of having the CYCL developer team for the full year, which was
acquired in Q2-FY20 and new strategic investments with third party R&D partners that commenced in Q4FY21
(see Strategic Review update below). During the year approx. $5.3m of R&D work on commercialised software
was capitalised, in accordance with AASB138, up from $4.9m from 2020.
Sales and Marketing
AUD $000s
Sales and marketing
% of Total Revenue
FY21
FY20 Movement
(15,398.7)
(24,628.4)
(37%)
34.2%
65.2%
(309 pp)
Sales & Marketing improved by +37% with $9.2m savings, a key factor to the savings in the period was
reduced marketing and T&E due to COVID19 restraints as well as the cancellation of a large US sales
partnerships in Q3FY20.
General and Administration
AUD $000s
FY21
FY20 Movement
General and administration
(13,855.5)
(21,060.0)
(34%)
% of Total Revenue
29.7%
47.4%
(177 pp)
General & administration improved by 34% and $7.2m compared to 2020. Savings were realised through
a slowdown of hiring in the departments, a reduction in office locations and lease costs and no professional
fees incurred through capital raises or acquisition activities.
Other Items impacting the results for 2021, include One-Off costs $14m incurred in connection with the
settlement of litigation and legal costs during the period and an organisation restructure with redundancy
costs in Q4FY21. Non-cash expense $2.7m items include employee share based payments, revaluation
charges relating to the CYCL earn out provision and unrealised foreign currency movements.
Directors’ ReportLiveTiles Annual Report 2021 29
Cash Receipts
m
$
D
U
A
60
50
40
30
20
10
0
51.8
41.0
19.6
6.9
8
1
n
u
J
7
1
c
e
D
8
1
c
e
D
9
1
n
u
J
9
1
c
e
D
0
2
n
u
J
0
2
c
e
D
1
2
n
u
J
Adjusted net operating cashflow
Adjusted net operating cashflows
(exlcuding non-recurring, one off items)
FY19
FY20
FY21
FY19
FY20
FY21
m
$
D
U
A
(33.8)
(19.6)
(26.6)
m
$
D
U
A
(22.2)
(33.0)
(6.2)
+72%
YoY
+26%
YoY
Cash Receipts of $51.8m for the Group in financial year 2021 was a record and saw 26% increase on the prior
year and a 96% 3 year Compound Annual Growth Rate (CAGR).
Cash Flows: Adjusted Net Operating Cash Flows on a Trailing Twelve Month (TTM) basis of $(19.6)m, improved
+26%, compared to FY20 and when excluding one-off non-recurring items, this improved by +72% to net
outflows of $(6.2)m. Improvements driven by increasing cash receipts and continued focus by Management
on disciplined cost management.
Cash and cash equivalents $16.8m as at 30 June 2021.
Directors’ ReportLiveTiles Annual Report 2021
30
Significant activities during
the financial year
Company Strategic Review
Following the review, the Board has since approved
a new Company strategic plan with clearly defined
goals. Underpinning this plan are three key initiatives,
outlined below, that the Company looks to execute
The Board and LiveTiles Management are pleased to
over the short to mid-term, with part of these
share the outcomes of the recently completed review
initiatives already implemented. The initiatives are
of the LiveTiles global business and the Company’s
designed with the intent to drive the business to be
strategic plan going forward. The review was initiated
more focused, simplified, efficient, sustainable and
in Q3 2021 with the view to evaluate and simplify
achieve product-led growth for FY22 and beyond.
its operations, improve the financial health, build a
strategy to reposition the business for new growth
By 2024 the Company aims to achieve the
and scale, as well as to align and optimise the
following three key strategic goals:
company structure.
The strategic business review was completed
Employee Experience
1. Be recognised as the global leader in
by an independent ex-McKinsey consultant
with over 10+ years of global SaaS experience,
with the following key outcomes identified:
2. Significantly increase Licenced User numbers,
with minimum 5x growth
3. Have 50% of the world’s top 300 employers
• Business Model opportunity to simplify the overall
as LiveTiles customers
model. It has inherited complexities from past
acquisitions and now has two core products
Achievement of these goals will be made through
requiring different operating models. The Go-to-
three focused initiatives across the business:
market strategy and execution needs an overhaul
to deliver scalable, high velocity growth.
1. Go-to-Market
• Strategy: opportunity to clearly define vision,
2. Operating efficiencies
3. R&D and Product Investment
strategy and direction of the company, to provide
focus for product, sales and marketing teams,
and to provide clarity to customers and investors.
• Performance: opportunity to realign organisation
structure aligned to focused strategic goals,
top-down.
• Product Focus opportunity to further simplify both
the go-to-market and the product development
priorities, to drive strong focus internally, and to
compete strongly in the addressable market that
LiveTiles plays in.
• Financial: focus needed on improving cash
burn, leveraging the foundations of a strong
customer book, identify and chase profitable
and scalable products.
Directors’ ReportLiveTiles Annual Report 2021 31
1 Go-to-Market Model
Land and Expand
As part of the organisational restructure, the
go-to-market and sales model has been adjusted,
with a focus to not only continue with new business
sales, which accounts for 71% of FY21 ARR growth;
however, to increase our attention and investment
into existing Account Management function and
account-based marketing to drive greater upsell and
cross-sell motions to our existing 1,000+ customers.
There will be a specific focus on the existing customer
base that accounts for 70% of current revenues,
with an aim to have over 40% of future ARR growth
come from existing customers and strengthen the
Net $ Retention rates by 5-10% and move towards
SaaS best in class. Starting from 1 July, the Account
Management function now has 42% of total field
roles compared to 26% in FY21.
Enterprise and Small-Medium Sized
Business (SMB)
Starting in Q1FY22; there will be a shift in the
investment and focus of the sales and marketing
teams to the Enterprise and Mid-Market customer
markets only, whilst the Company will provide a newly
launched digital platform for the SMB market to
access our Employee App offering (LiveTiles Reach)
in a low to no touch motion.
The approach is to get LiveTiles Reach into the hands
of as many users as possible, whilst allowing LiveTiles
focus to be on the higher return value customer.
To support this initiative, we are launching a new
LiveTiles Reach dedicated website, a robust digital
marketing strategy and an engaging free LiveTiles
Reach trial – bolstering LiveTiles Reach app downloads
by 10x and an expected increase of 15-20% in LiveTiles
Reach paying customers achieved as an outcome of
conversions through the trial download.
Product simplification
2 Operating Efficiencies
The review determined that LiveTiles product
offering is strong relative to its peers and has a
unique competitive advantage to offer solutions
to all customers, regardless of work environments
(office vs front-line workforce). It identified that
LiveTiles owns two distinct, yet very complimentary
product offerings, both Mobile and Desktop solutions,
that create an overall Employee Experience platform
offering. Yet it also recognised that the sales and
The review put forward several initiatives to improve
key business operating efficiencies to maximise
its commercial opportunities and drive long term
sustainability. The key areas of focus for improving
operating efficiencies over the next 12-24 months
will be the following:
Organisational Restructure and Alignment
marketing strategies had not evolved along with
In Q4FY21 the Company undertook an organisation
this product shift and that the timing was ideal to
restructure, aligned to the new strategic plan and
re-align the product and go to market strategy.
an outcome of the business review. These changes
saw a reduction of 27 roles (16% of total Q3FY21
Going forward, 65-70% of marketing investments will
headcount) across the business and a repositioning of
move towards scaling LiveTiles Reach, the Employee
roles into newly created positions, primarily focused
Experience App to help scale the number of LiveTiles
on customer facing activities. Through this exercise
Reach licences sold. Particularly when LiveTiles
the Company has realised approx. $3.5m in annualised
Reach exceeded expectations with licence sales
savings to invest back into the business over the next
growth of +1211% in FY21 compared to FY20
12-24 months to help achieve the strategic growth
and when combined with its simplicity and short
plans, with a total of $1.6m in associated restructuring
implementation time.
and redundancy costs.
Directors’ ReportLiveTiles Annual Report 2021 32
Improvement in Customer Acquisition
Costs (CAC)
3 Product and R&D
By simplifying the go-to-market model, business
LiveTiles operates in a competitive Employee
operations and focusing on the two core Employee
Experience market and the shifts in buyer behaviour
Experience solutions, Mobile and Desktop, this will
and employee experience needs post-pandemic have
allow the Company to better position its investments
now opened a range of new product development
into customer demand generation and marketing
opportunities to invest in through both our organic
initiatives that will help to improve our CAC and
product development activities and along with
customer profitability.
strategic partners. To continue to maintain this
competitive advantage, LiveTiles’ product and R&D
The following activities are planned to be
spend as a % of Total revenues will be approx. 27-35%
implemented through FY22 with to improve the
over the next 12 months, with the core investments
current CAC payback period from 18months down
focused in the following areas:
to 12months and continue the trajectory of increasing
the CAC:LTV from 2.6x (2020), 3.7x (2021) to at
least 5-6x:
• A redesign of the go-to-market pricing structure
to align the new simplified product sale focuses
(Mobile, Desktop or full-scale EX offering), a rebase
of the discounting practices and provide scope
for easy price add-ons to be made for value added
features (e.g. Analytics services).
Continue to expand and accelerate existing
product roadmap
In the same manner with the refined go to market and
product simplification strategy, there will be a focus
on evolving the LiveTiles Platform to enhance its rich
feature set of the LiveTiles Reach SaaS products and
consolidating the developed and acquired Intranet
products over past 6 years.
• Reset and re-contracting of approximately 70-80%
marketing supplier agreements, with payments tied
This work will see the LiveTiles product offerings
being consolidated into one agnostic LiveTiles
to set performance outcomes, rather than fixed fee
Employee Experience Platform, that enables
deliverables. There has also been a deliberate and
customers (the Employer) to seamlessly connect,
strategic focus on recruiting agencies with global
collaborate and communicate with their Employees.
capabilities, that can focus on driving scalable
An example of these new and important projects are:
growth in key priority markets such as the USA.
• A newly established dedicated account
management model (as outlined in item 1),
with a compensation model to monetise customers
faster to shorten the payback period and on
achieving net $ retention benchmarks,
with a minimum 95% threshold.
• Analytics Services – deep proactive real time
insights into the adoption and usage of employee
experience applications, a service offering that
is agnostic to the LiveTiles products and able to
integrate with insights from other key business
systems, using LiveTiles Integration Core product
(see below).
• Integration Core – one stop shop for
connecting employee experience applications
to business-critical systems (i.e. ServiceNow,
Salesforce, Workplace, Jira etc.).
Directors’ ReportLiveTiles Annual Report 2021 33
Innovation and scale through new channels
and R&D partners
These emerging use cases and activities will open
new channels to market with these R&D partners
The rapid digitisation of workplaces over the past
18 months presents new opportunities for our
platform to be leveraged for specific use cases, such
as employee well-being and climate change focus.
LiveTiles will leverage existing innovation and deep
technical experience with these R&D partners
to accelerate bringing new products to market.
Recognising these opportunities, LiveTiles has
and present new customer use case opportunities
from our evolving platform linked to specific high
value outcomes. As such, LiveTiles believes its
necessary to invest in these white-label initiatives
and sees approximately 50-60% of total R&D spend
going towards these strategic initiatives.
Other Business Updates
established strategic R&D partnerships with specialist
Partnerships
providers of these services, who have leveraged our
LiveTiles continues to dedicate its go to market
LiveTiles Reach product and our Employee Experience
focus through its channel partners, in addition to
platform to further develop and scale their offerings
the direct sales approach. The number of contracted
combined with LiveTiles software, under a white-label
partners grew to 324 as at 30 June 2021 (up 46%
product strategy. Including for example:
since 30 June 2020), with the majority of LiveTiles’
partner channel activity contribution coming from
• A trial using the LiveTiles Reach platform,
the EMEA market with 38% of all partners.
deployed into a global mining company to provide
an employee well-being app experience to all
Microsoft relationship
employees. This strategy is underpinned by the size
LiveTiles strategic relationship with Microsoft
of the emerging Employee Well-Being marketplace,
continues to strengthen each year, including following
a Total Addressable Market (TAM) considered
key activities:
to be worth up to $33.6bil.4
• LiveTiles Reach being leveraged to support
climate change focus groups within companies
through a partnership with Monash University’s
Climate Works.
• Announced a new alliance and co-sell agreement
with Microsoft, whereby LiveTiles Reach and
LiveTiles Directory will be sold through the
Microsoft’s SMC sales centre in the US. Also
announced a co-marketing motion with Microsoft
• LiveTiles is working on global AI initiatives which
in the US to jointly target strategic enterprise
includes projects with HumanLink, CSIRO’s Data61
accounts; The depth this of partnership and its
and their National AI Centre, which will focus on
co-sell activities was evidenced in the period,
using the LiveTiles Reach platform to collaborate
with the strong support provided in the United
and engage at scale with the Australian developer
Healthcare Group tender win.
and engineering community, to assess personal
and ethical values and understanding how they
influence the outcome of bias in AI development.
• In May, LiveTiles signed on the International
Association of Microsoft Channel Partners
(IAMCP) as a customer and strategic partner to
• Develop a LiveTiles marketplace for Employee
allow them to broaden its communications and
Experience software and product solutions
collaboration solutions, using LiveTiles Reach
enabling low touch deployment to a broad range
to engage and help its 2,000+ Microsoft partner
of EX needs. The marketplace will provide a digital
network, a network that represents $10bn in
platform for customers, prospects and trial users
partner revenues.
to access a range of LiveTiles features and key
third-party partner solutions for specific use cases.
4
Global Wellness Institute: Self-Improvement sub-market (Nov9-2020) https://globalwellnessinstitute.org/press-room/press-releases/gwi-finds-mental-wellness-is-a-121-billion-market/
Directors’ ReportLiveTiles Annual Report 2021 34
Industry Recognition
Share options
During the year, Gartner, a global technology
During the financial year, no options were exercised.
analyst firm released their Market Guide for Intranet
Packaged Solutions, where LiveTiles was named
As at the date of this report and as at the reporting
as the largest vendor in terms of total deployments
date, there were 17,851,550 options on issue
and revenue (outside of Workplace by Facebook).
(2020: 10,032,650). Refer to note 23 of the financial
This type of research and recognition is significant
statements for details on options issued during
for LiveTiles, as the analyst coverage helps formally
the financial year.
define the market and market opportunity, and
many executives of the largest companies in the
Significant changes in state of affairs
world subscribe to this, these industry recognition
Other than as outlined in the Operating and
papers have helped LiveTiles win in large competitive
financial review of the Directors’ Report, there were
tender processes.
CYCL Integration
no significant changes in the state of affairs of the
Group during the financial year.
LiveTiles Switzerland (formerly CYCL AG) was
Outlook and likely developments
successfully integrated during the 2021 Financial
In light of the ongoing uncertainty created by the
Year and is now an integral and key component to
global COVID-19 pandemic and the challenges it
the LiveTiles Group, with its two products becoming
brings to the global business operations, the Group
integral and fully deployed into the LiveTiles offering,
has decided not to provide guidance in respect to
with LiveTiles Reach and Intranet Hub further
FY22, other than to reiterate its continued focus on
strengthening the LiveTiles platform. CYCL’s team
disciplined cost management strategies and execution
now comprises the core of the global product and
of the following key strategic measures:
development team and the majority of Professional
Services team in EMEA, whilst one of the co-founders
• Continuing to leverage the operating model for
is now LiveTiles global CTO; a testament to the
efficiencies to maximise commercial opportunities.
strength of their product team.
Significant events since the end of the financial year
• Reshaping the go-to-market model and simplifying
LiveTiles’ product portfolio.
There have been no significant events affecting
• Accelerating the product roadmap for scale and
the Group since the end of the Financial Year.
working with strategic partners in new product
development to further cement LiveTiles leading
Environmental regulation and performance
position in the global Employee Experience market.
The Directors are not aware of any significant
environmental issues affecting the Group or its
The Directors continue to expect strong medium
compliance with relevant environmental agencies
to long-term growth potential for LiveTiles, driven
or regulatory authorities.
Dividends
by increased remote working and the demand
for Employee Experience solutions to support
organisations in a post pandemic working environment.
No dividends were paid or declared since the start
of the financial year. No recommendation for payment
of dividends has been made.
Directors’ ReportLiveTiles Annual Report 2021 35
Indemnification and insurance of officers
The directors are of the opinion that the services as
and directors
Under the Company’s constitution, to the extent
permitted by law and subject to the provisions of the
Corporations Act 2001, the Company indemnifies
every Director, executive officer and secretary of
disclosed in Note 6 to the financial statements do not
compromise the external auditors’ independence
requirements of the Corporations Act 2001 for the
following reasons:
the Company against any liability incurred by that
• all non-audit services have been reviewed and
person as an officer of the Company. The Company
approved to ensure that they do not impact the
has insured its Directors, executive officers and the
integrity and objectivity of the auditors; and
• none of the services undermine the general
principles relating to auditor independence as set
out in APES 110 Code of Ethics for Professional
Accountants issued by the Accounting Professional
and Ethical Standards Board, including reviewing
or auditing the auditor’s own work, acting in a
management or decision-making capacity for the
Company, acting as advocate for the Company
or jointly sharing economic risks and rewards.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as
required under section 307C of the Corporations Act
2001 is set out on page 35 of Annual Report.
Company Secretary for the 2021 financial year.
Under the Company’s directors’ and officers’ liability
insurance policy, the Company cannot release to any
third party or otherwise publish details of the nature
of the liabilities insured by the policy or the amount
of the premium. Accordingly, the Company relies on
section 300(9) of the Corporations Act 2001 to exempt
it from the requirements to disclose the nature
of the liability insured against and the premium
amount of the policy.
Indemnification of auditors
The Company’s auditor, BDO Audit Pty Ltd,
has not been indemnified under any circumstance.
Non-audit services
Details of the amounts paid or payable to the
Company’s auditors for non-audit services provided
during the financial year are outlined in Note 6
to the financial statements.
The directors are satisfied that the provision
of non-audit services during the financial year,
by the auditors (or by another person or firm on
the auditors’ behalf), is compatible with the general
standard of independence for auditors imposed by
the Corporations Act 2001.
Directors’ ReportLiveTiles Annual Report 2021 36
REMUNERATION
REPORT
LiveTiles Annual Report 2021 37
REMUNERATION REPORT (AUDITED)
1
Introduction
This Remuneration Report for the year ended 30 June 2021 outlines the remuneration arrangements of
LiveTiles Limited and its controlled entities in accordance with the requirements of the Corporations Act 2001
(Cth), as amended (the Act) and its regulations. This information has been audited as required by the Act.
This Remuneration Report details the remuneration arrangements for key management personnel (KMP)
who are defined as those persons having authority and responsibility for planning, directing and controlling
the major activities of the Group, directly or indirectly, including any director (whether executive or otherwise)
of the parent company.
The following individuals were classified as KMP of the Group during the financial year ended 30 June 2021.
Unless otherwise indicated, the individuals were KMP for the entire financial year.
Senior Executives
Karl Redenbach
Chief Executive Officer and Executive Director
Peter Nguyen-Brown
Chief eXperience Officer and Executive Director
Jarrod Magee
Chief Financial Officer (appointed 14 October 2020)
Rowan Wilkie
Chief Financial Officer (ceased to be KMP 14 October 2020)
Non-Executive Directors
Dr Marc Stigter
Non-Executive Chair (appointed 11 September 2020)
Jesse Todd
Non-Executive Director (appointed 15 April 2021)
Fiona Le Brocq
Non-Executive Director (appointed 15 April 2021)
Andrew McKeon
Non-Executive Director (resigned 15 April 2021)
David Lemphers
Non-Executive Director (resigned 11 September 2020)
Dana Rasmussen
Non-Executive Chair (resigned 15 April 2021)
There were no other changes to KMP after the reporting date and before the date the financial report was
authorised for issue.
LiveTiles Annual Report 2021Remuneration Report 38
2
Remuneration governance
The Remuneration Committee was in place from 1 July 2020 for the entire FY21; the Remuneration Committee
consisted of the following Board Members through the period:
David Lemphers
1 July 2020 – 11 September 2020
Dana Rasmussen (Chair)
1 July 2020 – 15 April 2021
Peter Nguyen-Brown
1 July 2020 – 30 June 2021
Marc Stigter
11 September 2020 – 30 June 2021
Fiona Le Brocq (Chair)
15 April 2021 – 30 June 2021
Jesse Todd
15 April 2021 – 30 June 2021
The Remuneration Committee is responsible for reviewing and approving remuneration arrangements for the
executive directors and reviewing remuneration arrangements for executives reporting to the CEO. Executive
directors are not present during board meetings when their remuneration arrangements are reviewed by the
non-executive directors.
The Remuneration Committee also reviews the remuneration arrangements for the non-executive directors
of the Board, including fees, travel and other benefits.
Non-director members, including members of management, may attend all or part of Remuneration
Committee meetings.
Further information on Remuneration can be seen in the Corporate Governance Statement on the Company’s
website at www.livetilesglobal.com/company/investors/.
LiveTiles Annual Report 2021Remuneration Report 39
3
Executive remuneration arrangements
Remuneration principles
The Group’s approach to executive remuneration is based on the following objectives:
• Ensuring the Company’s remuneration structures are equitable and aligned with long-term interests
of the Company and its shareholders;
• Attracting and retaining skilled executives; and
• Structuring short and long-term incentives that are challenging and linked to the creation of sustainable
shareholder returns.
Remuneration structure
The following table outlines how the Group’s executive remuneration structure aligns remuneration
with performance.
Component
Description
Purpose
Link to performance
Who participates?
Fixed
remuneration
Base salary
package including
statutory
superannuation
contributions
where applicable.
Short term
incentives (STI)
Paid in cash
or shares.
Long term
incentives (LTI)
Shares
issued under
Management
Incentive Plan
(MIP).
To provide
competitive fixed
remuneration
determined with
reference to role,
experience and
market.
Rewards
executives for
their contribution
to achievement of
Group outcomes.
Rewards
executives for
their contribution
to the creation of
shareholder value
over the longer
term.
Individual performance
is considered during the
annual remuneration
review.
All executives.
Discretionary bonus
linked to specific
financial and non-
financial targets.
Executives and other
key employees who have
an impact on the Group’s
performance.
Executives and other
key employees.
Shares issued
under the MIP to
executives who are key
management personnel
have been structured
such that executives
are remunerated only
when the Company’s
share price exceeds the
vesting price.
See section 7 of the Remuneration Report for further details of the Management Incentive Plan.
Company performance
A key underlying principle of the Group’s executive remuneration framework is that remuneration levels
should be linked to Group performance. As the Group’s strategy is focused on investing in growth to drive
recurring revenues and set up for future profitability, it has not been appropriate, to date, to assess the Group’s
performance on the basis of profitability.
LiveTiles Annual Report 2021Remuneration Report 40
The Group’s key financial measures of performance are summarised in the table below:
30 June
2021
30 June
2020
30 June
2019
30 June
2018
30 June
2017
Annualised Recurring Revenue
$62.8m
$53.8m
$40.1m
$15.0m
$4.0m
Cash balance
Share price
Loss before income tax expense and
non-recurring and non-cash items
$16.8m
$37.8m
$14.9m
$17.8m
$3.5m
$0.15
$0.23
$0.44
$0.48
$0.23
$(9.8)m
$(21.3)m
$(34.2)m
$(20.8)m
$(6.2)m
Dividends
nil
nil
nil
nil
nil
The Group’s key financial measure of performance over the longer term includes the increase in annualised
recurring revenue which has increased to $62.8 million at 30 June 2021 from $53.8 million at 30 June 2020.
Shareholder alignment is driven by the structure of the Management Incentive Plan, where share price
appreciation drives value for executives through the Plan (refer to section 7 of the Remuneration Report).
4
Executive contracts
Remuneration arrangements for executives are formalised in employment agreements. The table below sets
out the key terms and conditions of the employment contracts of the CEO and senior executives. All contracts
are for unlimited duration.
Base salary
Superannuation
Bonus
Karl Redenbach,
CEO and
Executive
Director1
Peter Nguyen-
Brown, CXO
and Executive
Director2
Jarrod Magee,
CFO3
Rowan Wilkie,
CFO4
$977,160
Statutory minimum
$700,000
Statutory minimum
$300,000
Statutory minimum
$375,000
Statutory minimum
Discretionary cash bonus capped
at 100% of base salary, subject
to meeting ARR and other
performance targets.
Discretionary cash bonus capped
at 100% of base salary, subject
to meeting ARR and other
performance targets.
Discretionary cash bonus capped
at 30% of base salary, subject to
meeting performance targets.
Discretionary cash bonus capped
at 50% of base salary, subject to
meeting performance targets.
Notice period
6 months
6 months
3 months
3 months
Notes:
1
The Remuneration Committee approved an increase for Karl Redenbach from US$690,000 to US$750,000 effective from 1 July 2020. During the year, Mr Redenbach’s remuneration was adjusted as a result of his
re-location to Australia, at which point his salary was converted to AUD at the prevailing FX rate of USD 1 : AUD1.3029.
The Remuneration Committee approved a base salary increase for Peter Nguyen-Brown A$500,000 to A$700,000 effective from 1 July 2020.
Jarrod Magee joined LiveTiles as CFO and a KMP on 14 October 2020.
Rowan Wilkie ceased to be a KMP on 14 October 2020.
2
3
4
Long term incentives for KMP are discussed in section 7 of the Remuneration Report.
In the case of each of the executive above, the Company may terminate the employment agreement without
notice for misconduct or material breach of contract.
LiveTiles Annual Report 2021Remuneration Report
41
5
Executive remuneration details
Details of the remuneration paid to KMP executives for the year are set out below.
Fixed remuneration and Long-Term Incentive (LTI)
In 2019, the Board implemented the outcomes of an independent review of the Company’s executive
director remuneration. In FY20 due to the impacts of the COVID19 pandemic, rather than having ARR
growth as the only measure, a focus on cash management was also required. For the 2021 financial year,
the same principles from both 2019 and 2020 were also applied. These changes were also a result of investor
and proxy firm feedback to add additional performance metrics beyond ARR growth to the Company’s fixed
remuneration framework.
In relation to the FY21 LTI measures, the aim was to foster greater alignment between employees,
shareholders, customers and executive outcomes, with the focuses on:
i.
long term financial performance hurdles and delivery against the Company longer-term strategy; and
ii. creation of sustained shareholder value.
In financial year 2021 no Executive Directors were awarded LTI. The CEO and CXO, respectively, remain
the single largest shareholders in the Group, providing strong alignment with shareholder interests.
Future measures of long-term value creation, in the form of incentive schemes as part of executive
remuneration, will be reviewed by the Board in financial year 2022.
Short-Term Incentive (STI)
In respect of Executive Director STI for financial year 2021, the targets related to ARR growth, balancing the
operating investments that drive growth with disciplined cash efficiencies as stated above and other qualitative
metrics aligned to strategy. ARR growth has been selected by the Board as a primary measure for performance
since LiveTiles listed on ASX in 2015, as this is a broadly accepted measure of future revenues and growth
performance for pre-profitability Software as a Service (SaaS) comparable companies in light of their recurring
nature and intrinsic recurring cash flow value to shareholder. Whilst the cash measures have been adopted in
light of recent macro-environment pressures and a view by the Board to drive disciplined cost initiatives.
For financial year 2021, the Group achieved +17% ARR growth and realised a +26% improvement in its
Adjusted Net Operating Cash Flow on a trailing 12-month basis. The Remuneration Committee assessed the
Executive Directors to have achieved their FY21 STI targets; however, the Executive Directors offered to
forego their FY21 bonus payments considering the current macro environment and ultimately in the interests
of the Company and shareholders. This was accepted and endorsed by the Remuneration Committee.
The Company’s annual performance management cycle is due to complete by October. The Board will update
investors on the performance management cycle outcome and metrics at the Company’s Annual General
Meeting in November 2021.
CFO targets relate to the external audit, global taxation framework, robust financial performance and analysis,
implementation of key business systems, strategic planning, transformation, and operations support.
LiveTiles Annual Report 2021Remuneration Report 42
r
a
e
y
l
a
i
c
n
a
n
i
F
$
s
e
e
f
d
n
a
y
r
a
l
a
S
$
s
u
n
o
b
I
T
S
Karl Redenbach
2021
993,554
-
2020
853,199
298,860
d
n
a
e
v
a
e
l
l
a
u
n
n
A
e
v
a
e
l
e
c
i
v
r
e
s
g
n
o
l
$
s
t
n
e
m
e
l
t
i
t
n
e
-
-
t
n
e
m
y
o
l
p
m
e
$
s
t
fi
e
n
e
b
-
t
s
o
P
d
e
s
a
b
e
r
a
h
S
$
1
s
t
n
e
m
y
a
p
e
c
n
a
m
r
o
f
r
e
P
%
d
e
t
a
l
e
r
$
l
a
t
o
T
7,231
-
1,000,785
0%
-
16,952
1,169,011
27%
Peter Nguyen-Brown
Jarrod Magee
Rowan Wilkie2
Total
2021
700,000
-
111,934
21,694
-
833,628
2020
477,652
220,000
48,835
21,003
5,651
773,141
2021
214,773
35,000
13,150
15,866
46,172
324,961
2020
-
-
-
-
-
-
2021
109,375
153,875
6,001
6,327
11,075
286,653
2020
325,739
30,000
28,050
21,003
76,384
481,176
2021
2,017,702
188,875
131,085
51,118
57,247
2,446,027
2020
1,656,590
548,860
76,885
42,006
98,987
2,423,328
0%
29%
25%
-
58%
22%
10%
27%
1
Represents shares issued under the Management Incentive Plan and options under the Long Term Incentive Plan (as detailed in Section 7 of the Remuneration Report and Note 23 of the financial statements), and
shares issued in lieu of cash STI.
2 Mr Wilkie ceased being a KMP on 14 October 2020 therefore the table reflects remuneration up to that date.
6
Non-executive director fee arrangements
The Board seeks to set the fees for non-executive directors at a level which provides the Company with the
ability to attract and retain directors of a high calibre, whilst incurring a cost which is acceptable to shareholders.
Under the Company’s constitution and the ASX listing rules, the maximum aggregate amount of fees that can
be paid to non-executive directors shall be determined from time to time by a general meeting of shareholders.
The current aggregate fee pool for the non-executive directors is $500,000.
Each non-executive director receives a fee for being a director of the Company. In addition, a non-executive
director may be paid fees or other amounts as the Board determines where a non-executive director
performs special duties or otherwise performs services outside the scope of the ordinary duties of a director.
Non-executive directors are also entitled to be reimbursed for reasonable expenses incurred in performing
their duties as directors.
Non-executive director letters of appointment are in place with Dr Marc Stigter, Jesse Todd and Fiona Le Brocq.
For the period from 11 September 2020 to 30 June 2021, Dr Stigter was entitled to remuneration of $165,000
per annum (including superannuation, if applicable).
For the period from 15 April 2021 to 30 June 2021, Mr Todd was entitled to remuneration of $110,000
per annum (including superannuation, if applicable).
LiveTiles Annual Report 2021Remuneration Report
43
For the period from 15 April 2021 to 30 June 2021, Ms Le Brocq was entitled to remuneration
of $110,000 per annum (including superannuation, if applicable).
For the period from 1 July 2020 to 15 April 2021, Mr McKeon was entitled to remuneration of
$100,000 per annum (including superannuation, if applicable) (2020: $100,000). Mr McKeon resigned
as Non-Executive Director on 15 April 2021.
For the period from 1 July 2020 to 15 April 2021, Ms Rasmussen was entitled to remuneration of
$100,000 per annum (including superannuation, if applicable) (2020: $100,000). Ms Rasmussen resigned
as Non-Executive Director on 15 April 2021.
For the period from 1 July 2020 to 11 September 2020, Mr Lemphers was entitled to remuneration of
$100,000 per annum (including superannuation, if applicable) (2020: $100,000). Mr Lemphers resigned
as Non-Executive Director on 11 September 2020.
The table below outlines remuneration paid to non-executive directors for the year.
e
v
i
t
u
c
e
x
e
-
n
o
N
r
o
t
c
e
r
i
d
r
a
e
y
l
a
i
c
n
a
n
i
F
$
s
e
e
F
$
s
u
n
o
b
h
s
a
C
n
o
i
t
a
n
m
r
e
T
i
$
s
t
fi
e
n
e
b
t
n
e
m
y
o
l
p
m
e
$
s
t
fi
e
n
e
b
-
t
s
o
P
$
1
P
I
M
–
s
t
n
e
m
y
a
p
d
e
s
a
b
e
r
a
h
S
$
r
e
h
t
O
Dr Marc Stigter1
2021
131,875
Jesse Todd2
Fiona Le Brocq3
Andrew McKeon4
David Lemphers5
Dana Rasmussen6
Cassandra Kelly7
Total
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
-
23,333
-
23,333
-
87,083
95,000
20,076
95,000
87,083
70,000
-
33,750
2021
372,784
2020
293,750
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,216
-
-
-
-
-
-
-
-
-
2,216
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
l
a
t
o
T
131,875
-
23,333
-
25,549
-
87,083
95,000
20,076
95,000
87,083
70,000
-
33,750
375,000
293,750
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 Dr Marc Stigter was appointed as Non-Executive Chair on 11 September 2020.
2
3
4
Jesse Todd was appointed as Non-Executive Director on 15 April 2021.
Fiona Le Brocq was appointed as Non-Executive Director on 15 April 2021.During the period, Ms Le Brocq was overpaid $2,217 as at 30 June 2021, this overpayment has since been adjusted for in the FY22 period.
Andrew McKeon resigned as Non-Executive Director on 15 April 2021.
5 David Lemphers resigned as Non-Executive Director on 11 September 2020.
6 Dana Rasmussen resigned as Non-Executive Director on 15 April 2021.
7
Cassandra Kelly resigned as Non-Executive Director on 27 September 2019.
LiveTiles Annual Report 2021Remuneration Report
44
7
Equity instruments held by key management personnel
Long Term Incentive Plan
The purpose of the Long Term Incentive Plan (LTIP) is to assist in the reward, retention and motivation of eligible
management and employees and to align the interests of these persons more closely with the interests of the
Company’s shareholders. Options issued under the LTIP to key management personnel have been structured
such that KMPs are remunerated only when the Company’s share price exceeds the vesting price.
The following tranches of options have been issued to key management personnel under the LTIP:
Tranche
Number of shares
Date issued
Vesting date
Expiry date
Vesting price
2020
150,000
01/03/2021
01/03/2023
01/03/2025
$0.36
Fair value per share at grant date
$0.07
The following table represents options issued to key management personnel under the LTIP.
Balance
at 1 July
2020
Issued
during the
year
Exercised
during the
year
Net
change
other
Balance
at 30 June
2021
Fair value
at 30 June
2021
Senior Executives
Karl Redenbach
Peter Nguyen-Brown
Jarrod Magee
Rowan Wilkie
Non-executive directors
Marc Stigter
Jesse Todd
Fiona Le Brocq
Andrew McKeon
David Lemphers
Dana Rasmussen
Cassandra Kelly
-
-
-
-
-
-
-
-
-
-
-
-
-
150,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
150,000
$10,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
LiveTiles Annual Report 2021Remuneration Report
45
Management Incentive Plan
The purpose of the Management Incentive Plan (MIP) is to assist in the reward, retention and motivation
of eligible directors and management and to align the interests of these persons more closely with the interests
of the Company’s shareholders. Shares issued under the MIP to executives who are key management personnel
have been structured such that executives are remunerated only when the Company’s share price exceeds
the vesting price.
The issue price of shares issued under the MIP is funded by a non-recourse interest free loan from the
Company. The issue price and loan value is set with reference to the closing share price on the date prior to
issue. Vesting of shares issued under the MIP is subject to the satisfaction or waiver of vesting conditions
determined by the Board. Subject to the MIP rules, any unvested shares lapse immediately and are forfeited if
the relevant vesting conditions are not satisfied within the applicable vesting period. Once vested, shares issued
under the MIP are treated in the same way as all other ordinary shares, subject to the full repayment of any
outstanding loan by the relevant executive.
The Board has the sole discretion to determine the directors and employees who are eligible to participate
in the MIP and the terms upon which shares are issued under the MIP, including the issue price, loan amount
and vesting conditions.
The following tranches of shares have been issued to key management personnel under the MIP:
No. of
shares
Date
issued
Vesting
date
Expiry
date
Vesting
price
Fair
value1
Tranche A
15,000,000
25/08/2015
24/08/2017
24/08/2021
Tranche B
10,000,000
25/08/2015
24/08/2018
24/08/2021
Tranche C
10,000,000
25/08/2015
24/08/2019
24/08/2021
Tranche M
266,667
06/05/2019
05/05/2020
06/05/2025
Tranche N
266,667
06/05/2019
05/05/2021
06/05/2025
Tranche O
266,667
06/05/2019
05/05/2022
06/05/2025
Tranche S
Tranche T
100,000
15/01/2021
15/10/2021
15/01/2027
100,000
15/01/2021
15/10/2022
15/01/2027
Tranche U
100,000
15/01/2021
15/10/2023
15/01/2027
1
Fair value per share at grant date.
$0.25
$0.35
$0.45
$0.57
$0.57
$0.57
$0.23
$0.23
$0.23
$0.06
$0.06
$0.06
$0.17
$0.17
$0.17
$0.09
$0.09
$0.09
Note: under a takeover scenario, the legal framework for both options and MIPS allows for Board discretion
to disallow or allow unvested securities to vest.
LiveTiles Annual Report 2021Remuneration Report
46
Shareholdings of Key Management Personnel (KMP)
The table below outlines the ordinary shares held by KMP (excluding shares held under the MIP).
Balance at
1 July 2020
Granted as
remuneration
Options
exercised
Net change
other
Balance at
30 June 2021
Senior Executives
Karl Redenbach1
91,122,082
Peter Nguyen-Brown1
91,122,082
Jarrod Magee
Rowan Wilkie
Non-executive directors
Marc Stigter2
Jesse Todd2
Fiona Le Brocq
Cassandra Kelly
-
-
-
-
-
-
Andrew McKeon3
277,778
David Lemphers
Dana Rasmussen
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(19,639,535)
71,482,547
(19,639,535)
71,482,547
-
-
-
-
118,105
118,105
175,900
175,900
-
-
(277,778)
-
-
-
-
-
-
-
1
Karl Redenbach and Peter Nguyen-Brown sold 11.5m shares each to fund the legal case while also transferring 8.1m shares each in an off market trade as part of the settlement agreement of the same case. Refer
to ASX announcements on 21 October 2020 and 9 December 2020 for further details.
2
3
Jesse Todd and Marc Stigter purchased shares on market in a personal capacity on 19 June 2021 and 13 May 2021, respectively. Refer to ASX announcements on those dates for further information.
Andrew McKeon resigned as Non-Executive Director during the year. His shares held upon resignation are reversed in the “net change other” column in the table above and therefore no balances are disclosed as
at 30 June 2021.
LiveTiles Annual Report 2021Remuneration Report
47
The following table represents shares issued to key management personnel under the Management Incentive
Plan, as approved by the Company’s shareholders on 30 November 2020 (as described in section 7 above).
Balance
at 1 July
2020
Issued
during the
year
Exercised
during the
year
Net
change
other
Balance
at 30 June
2021
Fair value
at 30 June
2021
Senior Executives
Karl Redenbach
19,500,000
Peter Nguyen-Brown
6,750,000
-
-
Jarrod Magee
-
300,000
Rowan Wilkie1
800,001
Non-executive directors
Marc Stigter
Jesse Todd
Fiona Le Brocq
Cassandra Kelly
Andrew McKeon
David Lemphers
Dana Rasmussen
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19,500,000
$1,170,000
6,750,000
$405,000
300,000
$27,000
(800,001)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1
Rowan Wilkie ceased to be a KMP during the year. His MIP shares held upon ceasing to be a KMP are reversed in the “net change other” column in the table above and therefore no balances are disclosed as at
30 June 2021.
LiveTiles Annual Report 2021Remuneration Report
48
Loans to Key Management Personnel
The following non-recourse loans have been provided by the Company to KMP under the MIP (as approved
by shareholders at a general meeting on 30 November 2020). The non-recourse loans are interest-free and the
proceeds are used to subscribe for shares in the Company under the MIP. The non-recourse loans are treated
as off-balance sheet due to the inherent uncertainty that they will crystallise. Under the terms of the MIP,
there is no obligation to settle the loan, which is dependent on the satisfaction of the vesting conditions and
the recipient’s option to exercise. The shares remain restricted until funds are received in settlement of the
prescribed loan balance, providing the Company security over the receivable.
Balance at
1 July 2020
Loans
issued
Loans
repaid
Net change
other
Balance at
30 June 2021
Senior Executives
Karl Redenbach
$2,925,000
Peter Nguyen-Brown
$1,012,500
-
-
Jarrod Magee
-
$51,000
Rowan Wilkie1
$456,000
Non-executive directors
Marc Stigter
Jesse Todd
Fiona Le Brocq
Cassandra Kelly
Andrew McKeon
David Lemphers
Dana Rasmussen
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$2,925,000
$1,012,500
$51,000
$(456,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1
Rowan Wilkie ceased to be a KMP during the year. His non-recourse loans held upon ceasing to be a KMP are reversed in the “net change other” column in the table above and therefore no balances are disclosed as
at 30 June 2021.
LiveTiles Annual Report 2021Remuneration Report
49
The following loans have been provided to key management personnel by the Company.
Balance at
1 July 2020
Loans
increase
Interest
accrued
Loans
repaid
Balance at
30 June 2021
Senior Executives
Karl Redenbach
$348,691
$161,127
$73,169
Peter Nguyen-Brown
$348,691
$161,127
$73,169
Jarrod Magee
Rowan Wilkie
Non-executive directors
Marc Stigter
Jesse Todd
Fiona Le Brocq
Cassandra Kelly
Andrew McKeon
David Lemphers
Dana Rasmussen
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$582,987
$582,987
-
-
-
-
-
-
-
-
-
The loans in the above table, first raised in April 2019, have been provided to the co-founders to assist with
their defence of litigation brought against them, as advised to ASX on 1 June 2018. While the Group has
engaged its own lawyers to represent the four Group entities named in the litigation, instructed by the
independent non-executive directors, the loans above solely relate to legal advice sought by co-founders.
The loans have been provided at arm’s length with a total capped principal amount of $475,000 per person.
Interest charged at 15% per annum and is capitalised annually. There have been no write-downs of balances
owed during the period. No provision is held in relation to the collection of these balances.
The loan is repayable, including interest, 180 days after the later of 1) the case is settled, 2) findings
determined against the defendants or 3) receipt of cost assessors certificate but no later than 31 December
2022. The independent non-executive directors, supported by legal counsel, continue to monitor the case
on behalf of the Group and the governance of these loans.
LiveTiles Annual Report 2021Remuneration Report
50
8
Other transactions with KMP
There were no other transactions with key management personnel.
9
Shareholder adoption of Remuneration Report
At the Group’s most recent Annual General Meeting held on 30 November 2020, shareholders voted
to adopt the 2020 Remuneration Report.
End of Remuneration Report which has been audited.
This report is made in accordance with the resolution of directors, pursuant to section 298(2)(a)
of the Corporations Act 2001.
On behalf of the directors
Dr Marc Stigter
Chairman
Date: 26 August 2021
Melbourne
Karl Redenbach
CEO and Executive Director
Date: 26 August 2021
Melbourne
LiveTiles Annual Report 2021Remuneration Report
51
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret St
Sydney NSW 2000
Australia
DECLARATION OF INDEPENDENCE BY MARTIN COYLE TO THE DIRECTORS OF LIVETILES LIMITED
As lead auditor of LiveTiles Limited for the year ended 30 June 2021, I declare that, to the best of my
knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of LiveTiles Limited and the entities it controlled during the period.
Martin Coyle
Director
BDO Audit Pty Ltd
Sydney, 26 August 2021
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
LiveTiles Annual Report 2021Auditor’s Independence Declaration
52
CONSOLIDATED
FINANCIAL
STATEMENTS
LiveTiles Annual Report 2021 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2021
53
Revenue
Other income
Total Revenues
Expenses
Employee benefits expense
Contractors
Marketing expense
Travel and entertainment expense
Professional fees
Rent and other office costs
Information technology costs
Other expenses
Depreciation expense
Amortisation charge of intangibles
Share based payments expense
Litigation costs
Restructuring costs
Unrealised currency loss
Finance costs
Loss before income tax
Income tax (expense) / benefit
Net loss for the year
Other comprehensive income:
Note
2021 $
2020 $
3
3
44,976,600
37,790,403
1,745,588
6,678,080
46,722,188
44,468,483
5
(24,523,730)
(30,163,090)
(8,628,277)
(8,569,830)
(1,926,189)
(3,041,599)
(423,748)
(2,537,367)
(2,168,657)
(3,212,118)
(1,540,402)
(2,362,924)
(3,411,363)
(2,714,242)
(5,234,104)
(4,425,711)
(1,157,735)
(1,166,772)
12
23
(10,128,638)
(10,256,971)
(711,498)
(3,928,656)
(12,408,256)
-
(1,621,780)
(2,196,735)
(330,020)
(1,207,703)
(2,069,475)
(425,215)
(76,283,872)
(76,208,933)
(29,561,684)
(31,740,450)
4
(579,266)
136,009
(30,140,950)
(31,604,441)
Items that will be reclassified subsequently to profit or loss when specific conditions are met:
Exchange differences on translating foreign operations, net of tax
(3,480,916)
572,706
Items that will not be reclassified subsequently to profit or loss:
Actuarial gain on remeasurement of defined benefit pension schemes, net of tax
883,720
445,608
Other comprehensive (loss) / income for the year
(2,597,196)
1,018,314
Total comprehensive loss for the year
(32,738,146)
(30,586,127)
Earnings per share for loss attributable to the owners of LiveTiles Limited
Basic earnings per share (cents)
Diluted earnings per share (cents)
8
8
(3.45)
(3.45)
(4.00)
(4.00)
The accompanying notes form part of these financial statements.
LiveTiles Annual Report 2021Consolidated Financial Statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021
Note
2021 $
2020 $
54
Current Assets
Cash and cash equivalents
Trade and other receivables
Other current assets
TOTAL CURRENT ASSETS
Non-Current Assets
Property, plant and equipment
Deferred tax asset
Right-of-use assets
Intangible assets
Other non-current assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
Current liabilities
Trade and other payables
Income tax payable
Lease liabilities
Employee benefits provision
Provisions for business combinations
Other current liabilities
TOTAL CURRENT LIABILITIES
Non-Current liabilities
Employee benefits provision
Income tax payable
Deferred tax liability
Lease liabilities
Provisions for business combinations
Pension liabilities
Other non-current liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
Equity
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
The accompanying notes form part of these financial statements.
9
10
4
11
12
10
13
4
14
16
17
15
16
4
4
14
17
18
15
20
21
16,804,924
37,791,314
8,589,999
8,521,493
1,749,806
980,256
27,144,729
47,293,063
828,945
-
977,860
291,833
2,504,394
3,562,990
72,508,993
81,054,324
251,956
1,018,883
76,094,288
86,905,890
103,239,017
134,198,953
7,863,233
7,443,718
1,885,287
1,324,238
861,978
904,700
2,924,288
2,258,095
10,822,951
3,069,981
14,274,368
12,388,804
38,632,105
27,389,536
161,366
541,798
140,094
-
2,079,508
2,967,791
2,365,036
3,427,179
-
8,988,671
5,085,636
6,812,051
490,008
776,377
10,723,352
23,112,163
49,355,457
50,501,699
53,883,560
83,697,254
205,044,070
202,831,116
349,912
2,235,610
(151,510,422)
(121,369,472)
53,883,560
83,697,254
LiveTiles Annual Report 2021Consolidated Financial Statements
55
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2021
Note
Issued
capital $
Reserves $
Accumulated
losses $
Total
equity $
Balance at 1 July 2019
122,972,591
7,073,919
(89,765,031)
40,281,479
Loss for the year
Other comprehensive income for the
year, net of tax
Remeasurements of the defined benefit
asset, net of tax
Total comprehensive loss for the year
-
-
-
-
-
(31,604,441)
(31,604,441)
572,706
445,608
-
-
572,706
445,608
1,018,314
(31,604,441)
(30,586,127)
Transactions with owners, in their capacity as owners
Contributions of equity
20(b)(c)
54,999,999
Transaction costs
(3,629,017)
Shares issued for CYCL AG
20(d)
12,568,747
-
-
Shares issued for earn outs
20(a)(e)
15,918,796
(9,785,279)
Share based payment expense
23
-
3,928,656
Total transactions with owners
79,858,525
(5,856,623)
-
-
-
-
-
54,999,999
(3,629,017)
12,568,747
6,133,517
3,928,656
74,001,902
Balance at 30 June 2020
202,831,116
2,235,610
(121,369,472)
83,697,254
Balance at 1 July 2020
202,831,116
2,235,610
(121,369,472)
83,697,254
Loss for the year
Other comprehensive income for the
year, net of tax
Remeasurements of the defined benefit
asset, net of tax
Total comprehensive loss for the year
Transactions with owners, in their capacity as owners
-
-
-
-
-
(30,140,950)
(30,140,950)
(3,480,916)
883,720
-
-
(3,480,916)
883,720
(2,597,196)
(30,140,950)
(32,738,146)
Shares issued for earn outs
Share based payment expense
20(f)
23
2,212,954
-
-
711,498
Total transactions with owners
2,212,954
711,498
-
-
-
2,212,954
711,498
2,924,452
Balance at 30 June 2021
205,044,070
349,912
(151,510,422)
53,883,560
The accompanying notes form part of these financial statements.
LiveTiles Annual Report 2021Consolidated Financial Statements
56
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2021
Note
2021 $
2020 $
Cash flows from operating activities
Receipts from customers (inclusive of GST)
51,883,609
40,968,708
Payments to suppliers and employees (inclusive of GST)
(56,472,307)
(61,240,424)
Net cash used in ordinary operating activities
(4,588,698)
(20,271,716)
Litigation settlement payment
Interest received
Interest and other finance costs paid
Government grants received
Income tax paid
(8,445,000)
28,243
(388,177)
1,053,865
-
170,574
(425,241)
11,511,545
(9,540)
(235,618)
Net cash used in operating activities
24
(12,349,307)
(9,250,456)
Cash flows from investing activities
Payments for development costs
Payments for plant and equipment
Net cash acquired as part of acquisition of subsidiaries
Payments for acquisition of subsidiaries
Loans to related parties
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue transaction costs
Repayment of lease liability
Net cash (used in) / from financing activities
(5,336,652)
(4,916,009)
(173,872)
-
-
(219,816)
(422,380)
(10,647,148)
(306,813)
(400,933)
(5,817,337)
(16,606,286)
20
-
-
(842,078)
(842,078)
54,999,999
(3,629,017)
(878,755)
50,492,227
Net (decrease) / increase in cash held
(19,008,722)
24,635,485
Cash and cash equivalents at beginning of financial year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of financial year
37,791,314
(1,977,668)
16,804,924
14,880,920
(1,725,091)
37,791,314
The accompanying notes form part of these financial statements.
LiveTiles Annual Report 2021Consolidated Financial Statements
57
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
These consolidated financial statements and notes
In preparing the consolidated financial statements,
represent LiveTiles Limited and controlled entities
all intercompany balances and transactions, income
(the “Consolidated Group” or “Group”).
and expenses and profit or losses resulting from
intra-group transactions are eliminated in full.
The financial statements were authorised for issue
Accounting policies of subsidiaries have been changed
on 26 August 2021 by the directors of the Company.
and adjustments made where necessary to ensure
uniformity of the accounting policies adopted by
NOTE 1: SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
the Group.
Basis of Preparation
These general purpose financial statements have
been prepared in accordance with the Corporations
Act 2001, Australian Accounting Standards and
Interpretations of the Australian Accounting
Standards Board and International Financial
Reporting Standards as issued by the International
Accounting Standards Board. The Group is a for-
profit entity for financial reporting purposes under
Australian Accounting Standards. Material accounting
policies adopted in the preparation of these financial
statements are presented below and have been
consistently applied unless stated otherwise.
The financial report is presented in Australian dollars
and all values are rounded to the nearest dollar.
a.
Principles of consolidation
The consolidated financial statements incorporate
all of the assets, liabilities and results of the parent
entity (LiveTiles Limited) and all of the subsidiaries.
Subsidiaries are entities the parent controls.
The parent controls an entity when it is exposed to,
or has rights to, variable returns from its involvement
with the entity and has the ability to affect those
returns through its power over the entity. A list of
the subsidiaries is provided in Note 19.
The assets, liabilities and results of all subsidiaries
are consolidated into the financial statements of the
Group from the date on which control is obtained
by the Group. The consolidation of a subsidiary is
discontinued from the date that control ceases.
b. Fair value of assets and liabilities
The Group measures some of its assets and liabilities
at fair value on either a recurring or non-recurring
basis, depending on the requirements of the
applicable Accounting Standard.
Fair value is the price the Group would receive to sell
an asset or would have to pay to transfer a liability
in an orderly (i.e. unforced) transaction between
independent, knowledgeable, and willing market
participants at the measurement date.
As fair value is a market-based measure, the closest
equivalent observable market pricing information
is used to determine fair value. Adjustments to
market values may be made having regard to the
characteristics of the specific asset or liability.
The fair values of assets and liabilities that are not
traded in an active market are determined using
one or more valuation techniques. These valuation
techniques maximise, to the extent possible, the use
of observable market data.
To the extent possible, market information is
extracted from either the principal market for the
asset or liability (i.e. the market with the greatest
volume and level of activity for the asset or liability)
or, in the absence of such a market, the most
advantageous market available to the entity at the end
of the reporting period (i.e. the market that maximises
the receipts from the sale of the asset or minimises the
payments made to transfer the liability, after taking
into account transaction costs and transport costs).
LiveTiles Annual Report 2021Consolidated Financial Statements 58
For non-financial assets, the fair value measurement
Subsequent to initial recognition, right-of-use
also takes into account a market participant’s ability
assets are measured at cost (adjusted for any
to use the asset in its highest and best use or to sell
remeasurement of the associated lease liability),
it to another market participant that would use the
less accumulated depreciation and any accumulated
asset in its highest and best use.
impairment loss.
The fair value of liabilities and the entity’s own
Right-of-use assets are depreciated over the shorter
equity instruments (excluding those related
of the lease term and the estimated useful life of
to share based payment arrangements) may
the underlying asset, consistent with the estimated
be valued, where there is no observable market
consumption of the economic benefits embodied in
price in relation to the transfer of such financial
the underlying asset.
instruments, by reference to observable market
information where such instruments are held
as assets. Where this information is not available,
Lease liabilities
Lease liabilities are initially recognised at the present
other valuation techniques are adopted and,
value of the future lease payments (i.e., the lease
where significant, are detailed in the respective
payments that are unpaid at the commencement date
note to the financial statements.
of the lease). These lease payments are discounted
c. Finance costs
using the interest rate implicit in the lease, if that rate
can be readily determined, or otherwise using the
Finance costs are expensed in the period in which they
Group’s incremental borrowing rate.
are incurred except if they relate to a qualifying asset.
d. Leases
Subsequent to initial recognition, lease liabilities are
measured at the present value of the remaining lease
At the commencement date of a lease (other than
payments (i.e., the lease payments that are unpaid
leases of 12-months or less and leases of low value
at the reporting date). Interest expense on lease
assets), the Group recognises:
liabilities is recognised in profit or loss (presented
• a right-of-use asset representing its right to use
the underlying asset; and
as a component of finance costs). Lease liabilities are
remeasured to reflect changes to lease terms, changes
to lease payments and any lease modifications not
• a lease liability representing its obligation to make
accounted for as separate leases.
lease payments.
Payments related to short-term leases or leases
Right-of-use assets
Right-of-use assets are initially recognised at cost,
of low-value asset not included in the measurement
of lease liabilities are recognised as an expense when
comprising the amount of the initial measurement
incurred. Short-term leases are leases with a lease
of the lease liability, any lease payments made
term of 12 months or less. Low-value assets comprise
at or before the commencement date of the lease,
IT-equipment and small items of office furniture.
less any lease incentives received, any initial direct
costs incurred by the Group, and an estimate of
costs to be incurred by the Group in dismantling and
removing the underlying asset, restoring the site on
which it is located or restoring the underlying asset
to the condition required by the terms and conditions
of the lease.
LiveTiles Annual Report 2021Consolidated Financial Statements 59
e. Impairment of assets
The carrying amount of recognised and unrecognised
At the end of each reporting period, the Group
deferred tax assets are reviewed at each reporting
assesses whether there is any indication that an
date. Deferred tax assets recognised are reduced to
asset may be impaired. The assessment will include
the extent that it is no longer probable that future
the consideration of external and internal sources of
taxable profits will be available for the carrying
information. If such an indication exists, an impairment
amount to be recovered. Previously unrecognised
test is carried out on the asset by comparing the
deferred tax assets are recognised to the extent that
recoverable amount of the asset, being the higher
it is probable that there are future taxable profits
of the asset’s fair value less costs of disposal and value
available to recover the asset.
in use, to the asset’s carrying amount. Any excess
of the asset’s carrying amount over its recoverable
Deferred tax assets and liabilities are offset only
amount is recognised immediately in profit or loss.
where there is a legally enforceable right to offset
current tax assets against current tax liabilities and
Where it is not possible to estimate the recoverable
deferred tax assets against deferred tax liabilities;
amount of an individual asset, the Group estimates
and they relate to the same taxable authority on
the recoverable amount of the cash-generating unit
either the same taxable entity or different taxable
to which the asset belongs.
entities which intend to settle simultaneously.
Impairment testing is performed annually for
LiveTiles Limited (the ‘head entity’) and its
intangible assets with indefinite lives and intangible
wholly-owned Australian subsidiaries have formed
assets not yet available for use.
f.
Income tax
an income tax consolidated group under the tax
consolidation regime. The head entity and each
subsidiary in the tax consolidated group continue
The income tax expense or benefit for the period is
to account for their own current and deferred tax
the tax payable on that period’s taxable income based
amounts. The tax consolidated group has applied
on the applicable income tax rate for each jurisdiction,
the ‘separate taxpayer within group’ approach in
adjusted by the changes in deferred tax assets and
determining the appropriate amount of taxes to
liabilities attributable to temporary differences,
allocate to members of the tax consolidated group.
unused tax losses and the adjustment recognised
for prior periods, where applicable.
In addition to its own current and deferred tax
Deferred tax assets and liabilities are recognised for
tax liabilities (or assets) and the deferred tax assets
temporary differences at the tax rates expected to
arising from unused tax losses and unused tax credits
be applied when the assets are recovered or liabilities
assumed from each subsidiary in the tax group.
amounts, the head entity also recognises the current
are settled, based on those tax rates that are enacted
or substantively enacted.
Assets or liabilities arising under tax funding
agreements with the tax consolidated entities are
Deferred tax assets are recognised for deductible
recognised as amounts receivable from or payable to
temporary differences and unused tax losses only
other entities in the tax consolidated group. The tax
if it is probable that future taxable amounts will
funding arrangement ensures that the intercompany
be available to utilise those temporary differences
charge equals the current tax liability or benefit
and losses.
of each tax consolidated group member, resulting
in neither a contribution by the head entity to the
subsidiaries nor a distribution by the subsidiaries
to the head entity.
LiveTiles Annual Report 2021Consolidated Financial Statements 60
g. Business combinations
i. Foreign currency transactions and balances
Business combinations occur where an acquirer
obtains control over one or more businesses.
Functional and presentation currency
The functional currency of each of the Group’s
A business combination will be accounted for from
economic environment in which that entity operates.
the date that control is attained whereby fair value of
The consolidated financial statements are presented
the identifiable assets acquired and liabilities assumed
in Australian dollars, which is the parent entity’s
is recognised (with limited exceptions).
functional currency.
entities is measured using the currency of the primary
The consideration transferred for the acquisition
including any contingent consideration is generally
Transactions and balances
Foreign currency transactions are translated
measured at fair value. Where the fair value of
into functional currency using the exchange
the consideration is greater than the fair value
rates prevailing at the date of the transaction.
of the identifiable assets and liabilities, goodwill
Foreign currency monetary items are translated
is recognised. Goodwill is tested annually for
at the year-end exchange rate. Non-monetary
impairment. Where fair value of the consideration
items measured at historical cost continue to be
is less than fair value of the identifiable assets and
carried at the exchange rate at the date of the
liabilities, a gain on a bargain purchase is recognised
transaction. Non-monetary items measured at fair
in the Income Statement.
value are reported at the exchange rate at the date
Transaction costs are expensed as incurred
unless except if they relate to the issue of debt
Exchange differences arising on the translation
or equity securities.
of monetary items are recognised in profit or loss.
when fair values were determined.
Contingent consideration is classified as a financial
Exchange differences arising on the translation
liability. Subsequent changes in the fair value of
of non-monetary items are recognised directly
the contingent consideration are recognised in
in other comprehensive income to the extent that
the Income Statement.
the underlying gain or loss is recognised in other
comprehensive income; otherwise the exchange
h. Research and development
difference is recognised in profit or loss.
Research costs are expensed in the period in which
they are incurred.
Group companies
The financial results and position of foreign
Development costs are only capitalised when it is
operations, whose functional currency is different
probable that the project will be a success, the Group
from the Group’s presentation currency, are
will use or sell the asset, the Group has sufficient
translated as follows:
resources and intent to complete the asset and the
development costs can be measured reliably. If one or
• assets and liabilities are translated at exchange
more of these criteria are not met, development costs
rates prevailing at the end of the reporting period;
are expensed in the period in which they are incurred.
Capitalised development costs are amortised on a
straight-line basis over the period of their expected
• income and expenses are translated at average
exchange rates for the period; and
pattern of consumption, up to a maximum of 5 years
• retained earnings are translated at the exchange
or shorter dependant on their deemed useful life.
rates prevailing at the date of the transaction.
LiveTiles Annual Report 2021Consolidated Financial Statements 61
Exchange differences arising on translation of
foreign operations with functional currencies other
Defined benefit pension benefits
All employees of the Group who are based in
than Australian dollars are recognised in other
Switzerland, as required by Swiss law, become
comprehensive income and included in the foreign
members of the Group’s defined benefit pension plans.
currency translation reserve in the statement of
The plans are co-funded by the Group with equal
financial position. The cumulative amount of these
co-contributions required by the employees ranging
differences is reclassified into profit or loss in the
from 4% – 10% of the employee’s salary. Contributions
period in which the operation is disposed of.
in respect of employees’ defined benefit entitlements
are recognised as an expense in the period in which
j. Employee benefits
they are incurred.
Short-term employee benefits
Liabilities for wages and salaries, including non-
k. Defined benefit pension obligations
monetary benefits, annual leave and long service
Upon retirement, members of the Group’s defined
leave expected to be settled within 12 months of the
benefit pension plans are entitled to either receive a
reporting date are measured at the amounts expected
lump sum payment to the value of their accumulated
to be paid when the liabilities are settled.
retirement balance, or receive an ongoing annual
Other long-term employee benefits
The liability for annual leave and long service leave
annuity calculated as a percentage (conversion rate)
of their accumulated balance.
not expected to be settled within 12 months of the
Assets and obligations of the fund are valued in
reporting date are measured as the present value
accordance with an actuarial valuation, using the
of expected future payments to be made in respect of
projected unit credit method. Under this method,
services provided by employees up to the reporting
where the fair value of plan assets differs from the
date using the projected unit credit method.
projected benefit obligation of a pension plan must
Consideration is given to expected future wage and
be recorded on the Consolidated Balance Sheet as
salary levels, experience of employee departures
an asset, in the case of an overfunded plan, or as a
and periods of service. Expected future payments
liability, in the case of an underfunded plan.
are discounted using market yields at the reporting
date on corporate bond rates with terms to maturity
The gains or losses and prior service costs or credits
and currency that match, as closely as possible, the
that arise but are not recognised as components
estimated future cash outflows.
of pension cost are recorded as a component of
other comprehensive income. The service costs
Defined contribution pension benefits
All employees of the Group who are based in Australia
related to defined benefits are included in operating
income. The other components of net benefit cost
and Denmark receive defined contribution pension
are presented in the consolidated profit and loss
entitlements, for which the Group pays the fixed
separately from the service cost component and
pension guarantee contribution (currently between
outside operating income.
6% and 9.5% of the employee’s average ordinary
salary) to the employee’s pension fund of choice.
l. Share based payments
All contributions in respect of employees’ defined
Equity settled share based compensation benefits
contribution entitlements are recognised as an
are provided to employees and related parties. Equity
expense in the period in which they are incurred.
settled transactions are awards of shares, or options
over shares, that are provided to employees and
suppliers in exchange for the rendering of services.
LiveTiles Annual Report 2021Consolidated Financial Statements 62
The cost of equity-settled transactions are measured
m. Provisions
at fair value on grant date. Fair value is independently
Provisions are recognised when the Group has a
determined using the Black-Scholes option pricing
present (legal or constructive) obligation as a result of
model that takes into account the exercise price, the
a past event, it is probable the Group will be required
term of the option, the impact of dilution, the share
to settle the obligation, and a reliable estimate can
price at grant date and expected price volatility of the
be made of the amount of the obligation. The amount
underlying share, the expected dividend yield and
recognised as a provision is the best estimate of the
the risk free interest rate for the term of the option,
consideration required to settle the present obligation
together with non-vesting conditions that do not
at the reporting date, taking into account the risks and
determine whether the Group receives the services
uncertainties surrounding the obligation.
that entitle the employees to receive payment.
No account is taken of any other vesting conditions.
n. Cash and cash equivalents
If equity settled awards are modified, as a minimum
deposits held at call with financial institutions, other
an expense is recognised as if the modification has
short-term, highly liquid investments with original
Cash and cash equivalents includes cash on hand,
not been made.
maturities of three months or less that are readily
convertible to known amounts of cash and which are
An additional expense is recognised, over the
subject to an insignificant risk of changes in value.
remaining vesting period, for any modification that
increases the total fair value of the share based
o. Revenue and other income
compensation benefit as at the date of modification.
Revenue is recognised when it is probable that
If the non-vesting condition is within the control of the
the revenue can be reliably measured. Revenue
Group or employee, the failure to satisfy the condition
is measured at the fair value of the consideration
the economic benefit will flow to the Group and
is treated as a cancellation. If the condition is not
received or receivable.
within the control of the Group or employee and
is not satisfied during the vesting period, any
remaining expense for the award is recognised
Software subscription revenue
Subscription revenue is recognised when the Group’s
over the remaining vesting period, unless the
performance obligations are satisfied. For annual
award is forfeited.
subscription contracts, revenue is recognised evenly
over the subscription period for which the customer
If equity settled awards are cancelled, it is treated
is contracted. For perpetual licences, where an
as if it has vested on the date of cancellation, and
upfront payment is made in addition to annual support
any remaining expense is recognised immediately.
fees, revenue related to the upfront payment is
If a new replacement award is substituted for the
recognised evenly over the estimated lifetime
cancelled award, the cancelled and new award
of the customer contract.
is treated as if they were a modification.
Where a customer pays their subscription in advance,
that amount is recorded as a liability on the balance
sheet until the Group provides the purchased
subscription for that period.
LiveTiles Annual Report 2021Consolidated Financial Statements 63
Services revenue
Revenue from services are recognised by reference to
service hours delivered, for contractual arrangements
p. Financial instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised
billed on a time and materials basis or by reference to
when the Group becomes a party to the contractual
the stage of completion for contractual arrangements
provisions of the instrument. Financial assets and
billed on a fixed price basis. Stage of completion is
financial liabilities are initially measured at fair value.
measured by reference to labour hours incurred to
Transaction costs that are directly attributable to the
date as a percentage of total estimated labour hours
acquisition or issue of financial assets and financial
for each contract.
liabilities (other than financial assets and financial
liabilities at fair value through profit or loss) are added
Research and development grant income
Research and development grant income is recognised
to or deducted from the fair value of the financial
assets or financial liabilities, as appropriate, on initial
when the Group is entitled to the research and
recognition. Transaction costs directly attributable to
development grant. The amount is treated as other
the acquisition of financial assets or financial liabilities
income in the period in which the research and
at fair value through profit or loss are recognised
development costs were incurred.
immediately in profit or loss.
Grant income
Government grants are recognised at fair value where
Classification and subsequent measurement
Financial assets that meet the following conditions
there is reasonable assurance that the grant will be
are measured subsequently at amortised cost:
received and all grant conditions will be met. Grants
relating to expense items are recognised as income
• Held within a business model whose objective is to
over the periods necessary to match the grant to the
hold financial assets in order to collect contractual
costs it is compensating. Grants relating to assets
cash flows;
are credited to deferred income at fair value and are
credited to income over the expected useful life of the
asset on a straight-line basis.
Interest income
Interest income is recognised as interest accrues using
the effective interest method. This is a method of
calculating the amortised cost of a financial asset and
allocating the interest income over the relevant period
using the effective interest rate, which is the rate
that exactly discounts estimated future cash receipts
through the expected life of the financial asset to the
net carrying amount of the financial asset.
• The contractual terms of the financial asset give
rise on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.
Financial assets that meet the following conditions are
measured subsequently at fair value through other
comprehensive income (FVTOCI):
• The financial asset is held within a business
model whose objective is achieved by both
collecting contractual cash flows and selling
the financial assets;
• The contractual terms of the financial asset give
rise on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.
LiveTiles Annual Report 2021Consolidated Financial Statements 64
By default, all other financial assets are measured
Cash flows are presented on a gross basis. The GST or
subsequently at fair value through profit or loss (FVTPL).
VAT components of cash flows arising from investing
or financing activities which are recoverable from,
As at the reporting date, the Group`s financial assets
or payable to, the local tax office are presented
consisted of cash and cash equivalents and trade and
as operating cash flows included in receipts from
other receivables which are measured at amortised
customers or payments to suppliers.
cost in accordance with the above accounting policy.
r. Current and non-current classification
Non-derivative financial liabilities are initially
Assets and liabilities are presented in the statement
measured at fair value and are subsequently measured
of financial position based on current and non-current
at amortised cost. Gains or losses are recognised in
classification.
profit or loss through the amortisation process and
when the financial liability is derecognised.
An asset is classified as current when: it is either
expected to be realised or intended to be sold
As at the reporting date, the Group`s financial
or consumed in normal operating cycle; it is held
liabilities consisted of trade and other payables and
primarily for the purpose of trading; it is expected
lease liabilities which are measured at amortised cost
to be realised within 12 months after the reporting
in accordance with the above accounting policy.
period; or the asset is cash or cash equivalent unless
Impairment
At the end of each reporting period, the Group
assesses whether there is objective evidence
restricted from being exchanged or used to settle
a liability for at least 12 months after the reporting
period. All other assets are classified as non-current.
that a financial instrument has been impaired.
A liability is classified as current when: it is either
The impairment methodology applied depends
expected to be settled in normal operating cycle; it is
on whether there has been a significant increase in
held primarily for the purpose of trading; it is due
credit risk. The Group applies the AASB 9 simplified
to be settled within 12 months after the reporting
approach to measuring expected credit losses which
period; or there is no unconditional right to defer the
uses a lifetime expected loss allowance for all trade
settlement of the liability for at least 12 months after
receivables and contract assets.
the reporting period. All other liabilities are classified
q.
Goods and Services Tax (GST), Value Added Tax
as non-current.
(VAT) and other consumption taxes
Deferred tax assets and liabilities are always classified
Revenues, expenses and assets are recognised net of
as non-current.
the amount of GST or VAT, except where the amount
of GST or VAT incurred is not recoverable from the
s. Intangible assets
local tax office.
Goodwill
Goodwill arising on the acquisition of subsidiaries is
Receivables and payables are stated inclusive of the
measured at cost less accumulated impairment losses.
amount of GST or VAT receivable or payable.
The Group tests goodwill annually or more frequently
The net amount of GST or VAT recoverable from,
if events or changes in circumstances indicate that
or payable to, the local tax office is included with
goodwill may be impaired.
other receivables or payables in the statement
of financial position.
LiveTiles Annual Report 2021Consolidated Financial Statements 65
Intellectual property
Intellectual property acquired as part of a business
u. Critical accounting estimates and judgements
The preparation of the financial statements requires
combination is recognised separately from goodwill.
management to make judgements, estimates and
The intellectual property assets are carried at fair
assumptions that affect the reported amounts in
value at the date of acquisition less accumulated
the financial statements. Management continually
amortisation and impairment losses. Intellectual
evaluates its judgements and estimates in relation
property assets are amortised over the period in
to assets, liabilities, contingent liabilities, revenue
which the benefits are expected to be obtained.
and expenses. Management bases its judgements,
estimates and assumptions on historical experience
Customer contracts and relationships
Customer contracts and relationships acquired
and on other various factors, including expectations of
future events, management believes to be reasonable
as part of a business combination is recognised
under the circumstances. The resulting accounting
separately from goodwill. The customer contracts
judgements and estimates will seldom equal the
and relationships are carried at fair value at the
related actual results. The judgements, estimates and
date of acquisition less accumulated amortisation
assumptions that have a significant risk of causing a
and impairment losses. Customer contracts and
material adjustment to the carrying amounts of assets
relationship assets are amortised over the period in
and liabilities (refer to the respective notes) within the
which the benefits are expected to be obtained.
next financial year are discussed below.
t. Earnings per share
v. Key estimates
Basic earnings per share is calculated by dividing the
i. Share-based payment transactions
profit or loss attributable to the owners of LiveTiles
Limited, excluding any costs of servicing equity
other than ordinary shares, by the weighted average
number of ordinary shares outstanding during the
financial period, adjusted for bonus elements in
ordinary shares issued during the financial period.
Diluted earnings per share adjusts the figures used
in the determination of basic earnings per share
to take into account the after income tax effect of
interest and other financing costs associated with
dilutive potential ordinary shares and the weighted
average number of shares assumed to have been
issued for no consideration in relation to dilutive
potential ordinary shares.
The Group measures the cost of equity-settled
transactions with employees by reference to
the fair value of the equity instruments at the
date at which they are granted. The fair value is
determined by using the Black-Scholes model
taking into account the terms and conditions
upon which the instruments were granted. The
accounting estimates and assumptions relating to
equity-settled share-based payments would have
no impact on the carrying amounts of assets and
liabilities within the next annual reporting period
but may impact profit or loss and equity.
ii. Recovery of deferred tax assets
Deferred tax assets are recognised for deductible
temporary differences only if the Group considers
it is probable that future taxable amounts will be
available to utilise those temporary differences
and losses.
LiveTiles Annual Report 2021Consolidated Financial Statements
66
iii. Government grant income
w. New or amended Accounting Standards
The Group measures government grant
income over the period necessary to match the
income with the costs that they are intended
to compensate. The accounting estimates and
assumptions relating to the recognition of
government grant income include the project
duration, value and forecast expenditure over
the life of the project.
iv. Performance based payments for acquired entities
and Interpretations adopted
The Directors have reviewed all of the new and
revised accounting standards and interpretations
issued by the Australian Accounting Standards
Board for annual reporting periods beginning or after
1 July 2020. It has been determined that there is no
impact, material or otherwise, of any other new or
revised accounting standards and interpretations
other than those outlined in the new and amended
standards adopted by the group outlined above.
The Group measures performance based
y. Going concern
payments (earn-out payments) for acquired
For the year ended 30 June 2021, the Group made
entities estimating the probability of the targets
a loss of $30,140,950 (2020: $31,604,441) and had
being met and using an appropriate discount rate
net cash flows used in ordinary operating activities of
to reflect payment periods. These performance
$4,588,698 (2020: $20,271,716). Further cost savings
based payments are disclosed within provisions
are expected to be realised in FY22 as a result of
for business combinations in the statement of
reduced headcount and other cost synergies realised
financial position.
from restructuring completed during the period.
At 30 June 2021, the Group had a cash balance of
v. Valuation of goodwill and other intangible assets
$16,804,924 (2020: $37,791,314). Furthermore, a
In determining the recoverable value of goodwill
and other intangible assets the Group makes
estimates pertaining to the future cash flows of
each of the Cash Generating Units (CGUs). Refer
to Note 12 for details of current year assumptions.
major component of the Group’s current liabilities
relate to unearned revenue, deferred tax liabilities and
deferred share liabilities recognised within provisions
for business combinations of $24,913,111 which is not
expected to be paid in cash.
vi. Capitalisation of development costs and useful
life of intangible assets
The Directors are therefore of the opinion that the
Group will be able to continue as a going concern taking
into account, cash on hand, reduced operating cash
The Group has made judgements when assessing
outflows, expected growth in customer receipts and
whether internal development projects meet
the ongoing management of cash operating expenses.
the criteria to be capitalised, and measuring the
costs and useful life attributed to such projects.
On acquisition, specific intangible assets are
recognised separately from goodwill and then
amortised over their useful lives. The capitalisation
of these assets and related amortisation charges
are based on judgements about the value and
useful life of such items. Amortisation methods,
useful lives and residual values are reviewed at each
reporting date and adjusted if appropriate. Refer to
Note 12 for details of current year assumptions.
LiveTiles Annual Report 2021Consolidated Financial Statements 67
NOTE 2: PARENT INFORMATION
The following information has been extracted from the records of the parent, LiveTiles Limited.
Statement of Financial Position
2021 $
2020 $
Parent entity
Assets
Current assets
Non-current assets
TOTAL ASSETS
Liabilities
Current liabilities
Non-current liabilities
TOTAL LIABILITIES
Equity
Issued capital
1,866,568
15,749,777
65,128,028
76,088,760
66,994,596
91,838,537
(13,111,036)
(3,460,552)
-
(8,988,671)
(13,111,036)
(12,449,223)
530,359,293
528,146,339
Accumulated losses and reserves
(476,475,733)
(448,757,025)
TOTAL EQUITY
53,883,560
79,389,314
Statement of Profit or Loss and Other Comprehensive Income
Total loss
Total comprehensive loss
(28,430,206)
(40,864,164)
(28,430,206)
(40,864,164)
In the 2021 financial year, included within the parent entity loss of $28,430,206 is a provision against
intercompany receivables from and investments in other entities within the Group of $13,648,280.
In the 2020 financial year, included within the parent entity loss of $40,864,164 is a provision against
intercompany receivables from and investments in other entities within the Group of $30,022,940.
Equity balances of the parent include those relating to Modun Resources Limited, which were eliminated
upon consolidation of the Group following the completion of the reverse acquisition on 25 August 2015.
All intercompany balances within the Group are eliminated upon consolidation.
LiveTiles Annual Report 2021Consolidated Financial Statements 68
NOTE 3: REVENUE AND OTHER INCOME
Revenue:
Software subscription revenue
34,402,311
28,980,551
Software related services revenue
10,574,289
8,809,852
2021 $
2020 $
Total revenue
Other income:
Interest income
Research and development grant income
Other grant income
Other income
Total other income
44,976,600
37,790,403
174,607
240,701
-
4,524,280
1,540,767
1,788,817
30,214
124,282
1,745,588
6,678,080
Total revenue and other income
46,722,188
44,468,483
LiveTiles Annual Report 2021Consolidated Financial Statements
NOTE 4: INCOME TAX
a.
The components of tax benefit / (expense) comprise:
Current tax
Deferred tax
Total
b.
The prima facie tax expense on loss from ordinary activities
before income tax is reconciled to income tax as follows:
Net loss before tax
Prima facie tax benefit on loss from ordinary activities before
income tax at 26% (2020: 27.5%)
Adjust for:
69
2021 $
2020 $
(1,102,847)
(1,297,627)
523,581
1,433,636
(579,266)
136,009
(29,561,684)
(31,740,540)
7,686,038
8,728,624
tax effect of variance in overseas tax rates
(300,641)
(1,246,031)
withholding tax expense
(410,752)
(1,295,840)
tax effect of non-deductible research and development expenditure
(1,261,431)
(2,563,091)
tax effect of other permanent differences
tax effect of other temporary differences
(3,345,738)
(1,931,890)
164,798
-
current year losses not recognised
(2,425,842)
(5,086,087)
de-recognition of deferred tax balances
(257,483)
1,433,636
utilisation of prior period losses
Income tax (expense) / benefit attributable to entity
1,668,473
(579,266)
-
136,009
The Group qualifies for the small business company tax rate of 26%.
c.
Deferred tax asset relates to the following:
Carry forward losses for Wizdom A/S
Total deferred tax asset
d. Deferred tax liability relates to the following:
-
-
291,833
291,833
Intangible assets on acquisition of Hyperfish, Inc
(158,603)
(198,363)
Intangible assets on acquisition of Wizdom A/S
(1,529,390)
(2,154,320)
Intangible assets on acquisition of CYCL AG
(1,135,504)
(1,689,738)
Defined benefit pension liabilities of CYCL AG
743,989
1,074,630
Total deferred tax liability
(2,079,508)
(2,967,791)
e. Net tax effect of carried forward losses not brought to account
60,070,275
49,567,470
f.
Income tax payable
2,427,085
1,324,238
LiveTiles Annual Report 2021Consolidated Financial Statements
70
The income tax payable reflects income tax payable and withholding tax payable at the end of the reporting
period. Of the total above, $541,798 is classified as a non-current liability, related to income tax owed to Danish
taxation authorities not payable within the next 12 months. Further details on timing of income tax payments
are detailed in Note 26 (iii).
NOTE 5: EMPLOYEE BENEFIT EXPENSE
Employee benefit expense
Wages and salaries – staff
Wages and salaries – Directors
Commission and bonus expense
Payroll tax and other on costs
Employee insurance costs
2021 $
2020 $
16,568,617
19,995,392
2,072,694
1,569,198
1,305,537
2,569,869
1,109,925
1,768,009
761,939
1,232,939
Pension and superannuation expense
1,363,161
1,210,016
Annual leave and long service leave expense
1,256,573
1,672,913
Other employee benefits expense
Total employee benefit expense
85,284
144,754
24,523,730
30,163,090
NOTE 6: AUDITOR’S REMUNERATION
Remuneration of the auditor for:
(a) Auditors of the Group – BDO and related network firms:
– audit and review of the financial statements
– other assurance services
Total remuneration for audit and other assurance services
(b) Other auditors and their related network firms:
– audit and review of the financial statements
– other assurance services
– taxation services
Total remuneration of network firms of other auditors
2021 $
2020 $
187,800
-
187,800
94,304
-
94,304
18,468
112,772
214,200
12,000
226,200
57,851
18,221
76,072
11,637
87,709
LiveTiles Annual Report 2021Consolidated Financial Statements
71
NOTE 7: DIVIDENDS
LiveTiles Limited has not paid or proposed to pay any dividends for the year ended 30 June 2021 (2020: nil).
NOTE 8: EARNINGS PER SHARE
Reconciliation of earnings to loss:
2021 $
2020 $
Earnings used to calculate basic earnings per share
(30,140,950)
(31,604,441)
Weighted average number of ordinary shares outstanding during the
year used in calculating basic earnings per share
Basic (loss) / earnings per share
Diluted (loss) / earnings per share
No.
No.
873,549,070
789,942,896
Cents
(3.45)
(3.45)
Cents
(4.00)
(4.00)
There are 17,851,550 options outstanding at 30 June 2021, see Note 23(b). The options on issue have not been
considered in the diluted earnings per share as their effect is anti-dilutive.
NOTE 9: TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Accrued revenue
Provision for doubtful debts
Total
Provision for doubtful debts
2021 $
2020 $
7,191,130
7,970,451
1,988,978
1,295,178
(590,109)
(744,136)
8,589,999
8,521,493
The Group makes use of a simplified approach in accounting for the impairment of trade and other receivables
as well as other current assets and records the loss allowance at the amount equal to the lifetime expected
credit loss (ECL). In using this practical expedient, the Group uses its historical experience, external indicators,
and forward-looking information to calculate the ECL using a provision matrix. From this calculation, it was
determined that the ECL in trade and other receivables was immaterial to be disclosed separately.
During the period, the Group recognised a doubtful debt expense of $360,397 (2020: $205,797). This is shown
within Other Expenses of $5,234,104 (2020: $4,425,711).
LiveTiles Annual Report 2021Consolidated Financial Statements
72
Credit risk
The Group has no significant concentration of credit risk with respect to any single counterparty or group
of counterparties. The class of assets described as “trade and other receivables” is considered to be the main
source of credit risk related to the Group.
On a geographical basis, the Group has credit risk exposures in Australia, Asia, North America, Europe and
the Middle East. The Group’s exposure to credit risk for trade receivables at the end of the reporting period
in those regions is as follows:
AUD
Asia Pacific
North America
Europe, Middle East & Africa
2021 $
2020 $
2,415,960
2,325,525
1,899,618
1,764,112
2,875,552
3,880,814
Total receivables exposed to credit risk
7,191,130
7,970,451
The following table details the Group’s trade and other receivables exposed to credit with ageing analysis and
impairment provided for thereon. Amounts are considered as “past due” when the debt has not been settled,
with the terms and conditions agreed between the Group and the customer or counterparty to the transaction.
Receivables that are past due are assessed for impairment by ascertaining solvency of the debtors and are
provided for where there are specific circumstances indicating that the debt may not be fully repaid to the Group.
The balances of receivables that remain within initial trade terms (as detailed in the table) are considered
to be of high credit quality.
Past Due but Not Impaired (Days Overdue) $
Gross
Amount $
Within Initial
Trade Terms
< 300
31–600
61–900
>900
Past Due and
Impaired
7,191,130
4,736,257 1,506,293
102,728
381,304
198,417
266,131
7,970,451
5,017,378 1,009,364
267,127
952,188
339,396
384,998
2021
Trade and term
receivables
2020
Trade and term
receivables
LiveTiles Annual Report 2021Consolidated Financial Statements
NOTE 10: OTHER ASSETS
AUD
Current
Deposits paid
Prepaid expenses
Loans to related parties
Non-current
Rental Deposits
Loans to related parties
73
Note
2021 $
2020 $
25
25
98,080
485,752
1,165,974
1,749,806
251,956
-
88,166
892,090
-
980,256
321,502
697,381
251,956
1,018,883
NOTE 11: NON-CURRENT ASSETS – RIGHT-OF-USE ASSETS
AUD
Properties
Equipment
Balance at
1 July 2019
Additions
Depreciation
Foreign
Exchange1
Balance at
30 June 2020
3,821,214
423,745
(875,315)
120,582
3,490,226
–
92,897
(22,319)
2,186
72,764
Total right-of-use asset
3,821,214
516,642
(897,634)
122,768
3,562,990
AUD
Properties
Equipment
Balance at
1 July 2020
Additions
Depreciation
Foreign
Exchange1
Balance at
30 June 2021
3,490,226
107,787
(818,850)
(300,377)
2,478,786
72,764
-
(44,052)
(3,104)
25,608
Total right-of-use asset
3,562,990
107,787
(862,902)
(303,481)
2,504,394
1 Represents the effect of movements in foreign exchange rates on assets and liabilities held in foreign currencies.
LiveTiles Annual Report 2021Consolidated Financial Statements
74
NOTE 12: INTANGIBLE ASSETS
2020 Financial Year
At Cost
Note
Balance at
1 July 2019
Additions
Disposals
Capitalised
development costs
Software intellectual
property
Customer contracts
and relationships
Goodwill
Total costs
5,042,235
4,916,009
10,018,741
9,350,000
5,996,099
2,340,000
30,889,332
27,353,721
51,946,407
43,959,730
-
-
-
-
-
Foreign
Exchange
Balance
at 30 June
2020
-
9,958,244
507,349
19,876,090
168,527
8,504,626
1,500,805
59,743,858
2,176,681
98,082,818
Accumulated
amortisation
Balance at
1 July 2019
Amortisation
Charge
Disposals
Foreign
exchange
Balance
at 30 June
2020
Capitalised development costs
(5,042,235)
(4,916,009)
Software intellectual property
(455,639)
(1,586,000)
Customer contracts and
relationships
Total accumulated
amortisation
(1,284,406)
(3,754,962)
(6,782,280)
(10,256,971)
-
-
-
-
-
(9,958,244)
2,062
(2,039,577)
8,695
(5,030,673)
10,757
(17,028,494)
Summary of net
intangible assets
Balance at
1 July 2019
Additions
Amortisation
charge
Disposals
Foreign
exchange
Balance
at 30 June
2020
Net intangible assets
45,164,127
43,959,730
10,256,971
Deferred tax liability
(3,192,972)
(1,890,273)
611,385
-
-
2,187,438
81,054,324
429,439
(4,042,421)
LiveTiles Annual Report 2021Consolidated Financial Statements
75
2021 Financial Year
At cost
Capitalised
development costs
Software intellectual
property
Customer contracts
and relationships
Goodwill
Total costs
Note
Balance at
1 July 2020
Additions
Disposals
9,958,244
5,336,652
19,876,090
8,504,626
59,743,858
-
-
-
98,082,818
5,336,652
-
-
-
-
-
Foreign
exchange
Balance
at 30 June
2021
-
15,294,896
(941,217)
18,934,873
(346,963)
8,157,663
(2,812,599)
56,931,259
(4,100,779)
99,318,691
Accumulated
amortisation
Balance at
1 July 2020
Amortisation
charge
Disposals
Foreign
exchange
Balance
at 30 June
2021
Capitalised development costs
(9,958,244)
(5,336,652)
Software intellectual property
(2,039,577)
(1,919,876)
Customer contracts and
relationships
Total accumulated
amortisation
(5,030,673)
(2,872,110)
(17,028,494)
(10,128,638)
-
-
-
-
-
(15,294,896)
116,263
(3,843,190)
231,171
7,671,612
347,434
(26,809,698)
Summary of net
intangible assets
Balance at
1 July 2020
Additions
Amortisation
Charge
Disposals
Foreign
Exchange
Balance
at 30 June
2021
Net intangible assets
81,054,324
5,336,652
(10,128,638)
Deferred tax liability
(4,042,421)
-
1,053,145
-
-
(3,753,345)
72,508,993
165,779
(2,823,497)
The estimated useful life of capitalised development costs is determined to be in line with the frequency
at which our software is updated and replaced. During the 2021 financial year, development costs were
fully amortised in the same financial year given the iterative nature and frequency of updates in the Group’s
product life cycle.
Other intangible assets have a finite life and are amortised on a straight-line basis over their useful lives. The
estimated useful life and amortisation method are reviewed at the end of each reporting period. The useful life
of software intellectual property is 10 years. The useful life of customer contracts and relationships is 2 years.
Goodwill is carried at cost less any accumulated impairment losses.
LiveTiles Annual Report 2021Consolidated Financial Statements
76
The Group tests annually whether goodwill has suffered any impairment. For the 2021 and 2020 reporting
periods, the recoverable amount of the cash-generating units (CGUs) was determined based on value-in-use
calculations, using cash flow projections based on financial budgets approved by management covering a
five-year period. Of the Group’s goodwill at 30 June 2021, $3.1m relates to the acquisition of Hyperfish Inc.,
$27.1m relates to the acquisition of Wizdom A/S and $26.7m relates to the acquisition of CYCL AG.
The assumptions used for the current reporting period may differ from the assumptions in the next reporting
period as internal and external circumstances and expectations change. The Group has used the following
assumptions in the 30 June 2021 calculation of value-in-use, based on conservative expectations for the future:
Goodwill Impairment
Testing Assumptions
Annual Revenue
Growth Rate
Compound Annual
Growth Rate
Terminal
Growth Rate
Post-tax
discount Rate
Hyperfish Inc.
Wizdom A/S
CYCL AG
10% – 17%
10% – 17%
10% – 17%
13.87%
13.12%
15.73%
2.00%
2.00%
2.00%
17.10%
17.10%
17.10%
Assumptions for gross margin, other operating costs and annual capital expenditure are based on past
performance and management’s expectations for the future.
Should these assumptions not occur the resulting goodwill carrying may decrease. Management has performed
sensitivity analysis and assessed reasonable changes for key assumptions and has not identified any instances
that could cause the carrying amount of the group of CGUs, over which goodwill is monitored, to exceed its
recoverable amount. Analysis performed as follows:
• If the annual revenue growth rate applied was 5% lower, no impairment noted;
• If gross margin / operating cost and annual capital expenditure forecasts exceeded by 5% – 10%,
no impairment noted;
• Terminal growth rate assumed at the lowest end of the range of historical inflation rates (i.e 2.0% – 3.5%);
• Post-tax discount rate assumed at the highest end of the range of industry peers, per benchmarking analysis.
Management believes that other reasonable changes in the key assumptions on which the recoverable amount
is based would not cause the CGUs carry amount to exceed its recoverable amount.
LiveTiles Annual Report 2021Consolidated Financial Statements 77
NOTE 13: TRADE AND OTHER PAYABLES
Current
Trade payables
Employee benefits accruals
Note
2021 $
2020 $
5,160,988
3,903,398
2,037,605
3,267,946
Employee benefits accruals to related parties
25
132,004
45,274
Other payables and accruals
Total
NOTE 14: LEASE LIABILITIES
532,636
227,100
7,863,233
7,443,718
Balance at
1 July 2019
Finance Cost
Additions
Payments
Foreign
Exchange
Balance
at 30 June
2020
4,508,419
423,547
463,334
(1,281,018)
144,022
4,258,304
-
1,668
92,675
(22,978)
2,210
73,575
4,508,419
425,215
556,009
(1,303,996)
146,232
4,331,879
Balance at
1 July 2020
Finance Cost
Additions
Payments
Foreign
Exchange
Balance
at 30 June
2021
4,258,304
335,376
107,787
(1,135,336)
(365,091)
3,201,040
73,575
1,944
-
(44,062)
(5,483)
25,974
4,331,879
337,320
107,787
(1,179,398)
(370,574)
3,227,014
At net present value:
Properties
Equipment
Total lease
liabilities
At net present value:
Properties
Equipment
Total lease
liabilities
LiveTiles Annual Report 2021Consolidated Financial Statements
Current
Properties
Equipment
Total
Non-current
Properties
Equipment
Total
78
30 June 2021
30 June 2020
836,004
25,974
861,978
2,365,036
-
2,365,036
858,754
45,946
904,700
3,399,550
27,629
3,427,179
The Group leases various offices and equipment. Rental contracts are typically made for fixed periods of 2 to
5 years but may have extension options. Lease terms are negotiated on an individual basis and contain a wide
range of different terms and conditions. The lease agreements do not impose any covenants, but leased assets
may not be used as security for borrowing purposes.
NOTE 15: OTHER LIABILITIES
Current
Unearned revenue
Unearned grant income
Total
Non-current
Unearned revenue
US government program repayable
Total
2021 $
2020 $
13,319,659
954,709
14,274,368
188,157
301,851
490,008
11,024,867
1,363,937
12,338,804
253,529
522,848
776,377
Unearned income is carried at amortised cost and represents amounts billed to customers in advance of the
revenue being recognised in accordance with the revenue recognition policy outlined in note 1. Unearned
income is presented as a current liability unless the performance obligations associated with the revenue will
be satisfied in greater than 12 months.
US government program repayable relates to amounts owed to the United States (US) Federal Government
for monies loaned to the Group on a 1% annual interest loan under the US Small Business Administration
(SBA) Paycheck Protection Program (PPP) (the program). Monies under this program were distributed by US
commercial banks in accordance with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
enacted on 27 March 2020.
LiveTiles Annual Report 2021Consolidated Financial Statements
79
Under the program, the Group applied for, and received, a second distribution amount of $962,789 (2020:
$1,866,204). Under the terms of the program this was calculated to enable the Group to draw funds to the
value of twenty four weeks payroll, employee related oncosts and rental expenses. To the extent that the
borrowed funds were used for these purposes, under the terms of the program, loan monies would be forgiven,
adjusted for any reduction of headcount. The Group has received notice of forgiveness of $1,655,138, relating
to the first distribution amount received in 2020, leaving $211,066 remaining payable.
The Group has estimated that the value of the second distribution amount which will be forgiven as $872,004,
leaving $90,785 remaining payable, reflecting the impact of reductions in headcount in the US as a result of
restructuring during the period. This will be assessed during the 2022 financial year. Government grant income
has been recorded for the value of this estimated forgiveness, with the remaining balance of the loan remaining
a payable.
The unforgiven balances of the loans are not due and are not payable within the next twelve months.
NOTE 16: EMPLOYEE BENEFITS PROVISION
Current
Non-current
Total
2021 $
2,924,288
161,366
3,085,654
2020 $
2,258,095
140,094
2,398,189
Provision for employee benefits
Provision for employee benefits represents amounts accrued for annual leave and long service leave.
The current portion for this provision includes the total amount accrued for annual leave entitlements and the
amounts accrued for long service leave entitlements that have vested due to employees having completed the
required period of service. Based on past experience, the Group does not expect the full amount of annual leave
or long service leave balances classified as current liabilities to be settled within the next 12 months. However,
these amounts must be classified as current liabilities since the Group does not have an unconditional right to
defer the settlement of these amounts in the event employees wish to use their leave entitlement. It is expected
that $584,858 will not be taken in the next 12 months.
The non-current portion for this provision includes amounts accrued for long service leave entitlements that
have not yet vested in relation to those employees who have not yet completed the required period of service.
In calculating the present value of future cash flows in respect of long service leave, the probability of long
service leave being taken is based on historical data. Refer to note 1 for the measurement and recognition
criteria relating to employee benefits.
LiveTiles Annual Report 2021Consolidated Financial Statements
NOTE 17: PROVISIONS FOR BUSINESS COMBINATIONS
Current
Provision for contingent
consideration – CYCL
Total
Non-current
Provision for contingent
consideration – CYCL
Total
80
2021 $
2020 $
10,822,951
3,069,981
10,822,951
3,069,981
-
-
8,988,671
8,988,671
Of the amounts included in provisions, $3,108,496 is expected to be settled in cash, the remaining balance
of $7,714,455 is expected to be settled in stock. The second earn out test date is 31 December 2021.
NOTE 18: NON-CURRENT LIABILITIES – PENSION LIABILITIES
The Group’s pension liabilities relate to the defined benefit plans in Switzerland, which were acquired in
December 2019 upon the completion of the acquisition of CYCL AG. As at 30 June 2021, the fund has a funding
ratio of 118%. As required under Swiss law, the plans are co-funded by the Group with equal co-contributions
required by the employees ranging from 4% – 10% of the employee’s salary. Upon retirement, employees are
entitled to either receive a lump sum payment to the value of their accumulated retirement balance; or receive
an ongoing annual annuity calculated as a percentage (conversion rate) of their accumulated balance – as at
30 June 2021 this conversion rate is 6.20%.
The defined benefit plans are legally separate from the Group and administered by a separate fund. The pension
plans of the Group are managed by Swiss pension fund ‘Profond Pension Fund’ (the fund), which is a collective
pension fund, which is common in Switzerland. Under this structure, members own a proportionate share of
the aggregated collective investments, rather than an individual share of the underlying assets, as is common
in Australia. The Group’s members consist of 45 of the total 57,775 members as at 30 June 2021.
The board of the fund is made up of independent trustees/directors. By law, the board is required to act in the
best interests of participants to the schemes and has the responsibility of setting investment, contribution,
benefit levels and other relevant policies.
LiveTiles Annual Report 2021Consolidated Financial Statements
81
The plans are exposed to a number of risks, including:
• Investment risk: movement of discount rate used against the return from plan assets;
• Interest rate risk: decreases/increases in the discount rate used will increase/decrease
the defined benefit obligation;
• Longevity risk: changes in the estimation of mortality rates of current and former employees; and
• Salary risk: increases in future salaries increase the gross defined benefit obligation.
As the fund is a collective fund, return on assets are distributed to participants at a rate agreed by the pension
board and any surplus/(deficit) is held in reserve. The effect of this is to provide consistency of returns and to
enable the fund to have sufficient reserves to fund any future payment obligations.
In the event of a funding shortfall, the pension plan regulations outline that the following provisions
will be made, in sequence:
1.
Make changes to the way the fund is administered, including:
• Adjustments to the calculation of future benefit entitlements (conversion rate);
• Adjustments to the investment strategy;
• Adjustments to financing/benefits; and
• Restrictions on early withdrawals of benefits.
2.
If a shortfall persists, for the duration of the cover shortfall, the pension plan may levy (non-returnable)
contributions from employees, employers or pensioners.
In the event that a funding shortfall does occur, separately to the pension plan regulations, the Swiss
Government has established a scheme, the LOB Guarantee Fund, by which pension funds may be entitled
to subsidies to enable equalisation. The fund may act to provide subsidies in the following circumstances:
• benefit schemes with an unfavourable age structure; or
• where a pension fund has become insolvent.
AASB 119 requires that the assets and obligations of the fund are valued in accordance with an actuarial
valuation, using the projected unit credit method. Under this method, where the fair value of plan assets differs
from the projected benefit obligation of a pension plan must be recorded on the Consolidated Balance Sheet
as an asset, in the case of an overfunded plan, or as a liability, in the case of an underfunded plan.
The gains or losses and prior service costs or credits that arise but are not recognised as components of pension
cost are recorded as a component of other comprehensive income. The service costs related to defined benefits
are included in operating income. The other components of net benefit cost are presented in the consolidated
profit and loss separately from the service cost component and outside operating income.
The following tables summarise the components of net benefit expense recognised in profit and loss, actuarial
gains and losses recognised in other comprehensive income, and funded status and amounts recognised in the
consolidated statement of financial position.
LiveTiles Annual Report 2021Consolidated Financial Statements 82
Initial recognition
as at 3 December 2019
Current service cost
Interest income / (expense)
Defined benefit pension expense
recognised in profit or loss
Contributions by fund participants:
Employer
Plan participants
Total contributions
Remeasurements:
Return on plan assets, excluding
amounts included in interest income
Loss from change in experience
Gain from change in financial
assumptions
Defined benefit pension actuarial
losses/(gains) recognised in other
comprehensive income
Present value of
obligations $
Fair value of plan
assets $
Balance $
(23,784,906)
16,862,683
(6,922,223)
(465,828)
(14,615)
(480,443)
-
(308,028)
(308,028)
-
10,510
10,510
303,701
308,028
611,729
(465,828)
(4,105)
(469,933)
303,701
-
303,701
-
86,085
86,085
(107,050)
562,872
-
-
(107,050)
562,872
455,822
86,085
541,907
Benefits paid
(405,116)
405,116
-
Foreign exchange rate changes
(912,273)
646,770
(265,503)
Balance at 30 June 2020
(25,434,944)
18,622,893
(6,812,051)
LiveTiles Annual Report 2021Consolidated Financial Statements
83
Balance as at 30 June 2020
(25,434,944)
18,622,893
(6,812,051)
Present value of
obligations $
Fair value of plan
assets $
Balance $
Current service cost
Interest income / (expense)
Defined benefit pension expense
recognised in profit or loss
Contributions by fund participants:
Employer
Plan participants
Total contributions
Remeasurements:
Return on plan assets, excluding
amounts included in interest income
Gain from change in experience
Gain from change in demographic
assumptions
Gain from change in financial
assumptions
Defined benefit pension actuarial
losses/(gains) recognised in other
comprehensive income
(767,878)
(59,013)
(826,891)
-
(528,324)
(528,324)
-
25,292
25,292
(767,878)
(33,721)
(801,599)
517,065
528,324
517,065
-
1,045,389
517,065
-
70,595
70,595
240,998
1,170,389
145,079
-
-
-
240,998
1,170,389
145,079
1,556,466
70,595
1,627,061
Benefits paid
2,014,415
(2,014,415)
-
Foreign exchange rate changes
1,483,542
(1,099,654)
383,888
Balance at 30 June 2021
(21,735,736)
16,650,100
(5,085,636)
The projected unit credit method, requires management make certain assumptions relating to the long-term
rate of return on plan assets, discount rates used to determine the present value of future obligations and
expenses, salary inflation rates, mortality rates and other assumptions. The accounting estimates related to our
pension plans are highly susceptible to change from period to period based on the performance of plan assets,
actuarial valuations, market conditions and contracted benefit changes.
The selection of assumptions is based on historical trends and known economic and market conditions at the
time of valuation, as well as independent studies of trends performed by our actuarial advisors. However,
actual results may differ substantially from the estimates that were based on the critical assumptions.
The reconciliation to the fair value of plan assets and projected benefit obligation under the projected unit
method are shown over page.
LiveTiles Annual Report 2021Consolidated Financial Statements
84
Plan assets
Plan assets
Adjustments for AASB 119
30 June 2021
30 June 2020
12,133,929
13,716,212
Estimation of the value of Pensions in Payment
Fair value of plan assets
4,516,170
16,650,099
4,906,681
18,622,893
Plan obligations
Plan obligations
Adjustments for AASB 119
Estimation of the obligation of Pensions in Payment
Projected unit credit method actuarial adjustment
Projected plan obligations
Net Pension Liabilities
30 June 2021
30 June 2020
12,133,929
13,716,212
4,516,170
5,085,636
21,735,735
5,085,636
4,906,681
6,812,051
25,434,944
6,812,051
The Group reviews annually the discount rate used to calculate the present value of pension plan liabilities.
The discount rate used at each measurement date is set based on a high-quality corporate bond yield curve,
derived based on bond universe information sourced from reputable third-party indexes, data providers, and
rating agencies. Additionally, the expected long term rate of return on plan assets is derived for each benefit
plan by considering the expected future long-term return assumption for each individual asset class. A single
long-term return assumption is then derived for each plan based upon the plan’s target asset allocation.
The actuarial assumption used in determining the present value of the defined benefit obligation of the pension
plans include:
Actuarial assumptions
Discount Rate
Growth in future salaries
Pension increase rate
Longevity at retirement
30 June 2021
30 June 2020
0.30%
1.00%
0.00%
0.25%
1.00%
0.00%
20 – 22 years
19 – 22 years
The following table depicts the sensitivity of estimated fiscal year 2021 pension expense to incremental
changes in the discount rate and the expected long-term rate of return on assets.
Actuarial assumptions
Reasonably Possible Change
Increase
Decrease
Discount Rate
(+/- 0.50%)
19,714,071
24,085,531
Growth in future salaries
(+/- 0.50%)
22,036,279
21,451,035
Defined benefit obligation
LiveTiles Annual Report 2021Consolidated Financial Statements 85
NOTE 19: INTERESTS IN SUBSIDIARIES
a. Information about principal subsidiaries
The wholly-owned subsidiaries listed below have share capital consisting solely of ordinary shares which
are held directly by the Group. The proportion of ownership interests held equals the voting rights held
by the Group. Each subsidiary’s principal place of business is also its country of incorporation.
Name of subsidiary
Principal place of business
LiveTiles Holdings Pty Ltd
LiveTiles APAC Pty Ltd
LiveTiles R and D Pty Ltd
LiveTiles Corporation
Modun Resources Pte Ltd
LiveTiles Ireland Limited
Hyperfish, Inc
Australia
Australia
Australia
USA
Singapore
Ireland
USA
LiveTiles Europe A/S (formerly Wizdom A/S)
Denmark
LiveTiles Switzerland (formerly CYCL AG)
Switzerland
Ownership interest
2021
100%
100%
100%
100%
100%
100%
100%
100%
100%
2020
100%
100%
100%
100%
100%
100%
100%
100%
100%
b. Significant restrictions
There are no restrictions over the Group’s ability to access or use assets, and settle liabilities, of the Group.
c. Acquisition of controlled entities
There were no acquisitions during the period.
d. Disposal of controlled entities
There were no disposals of controlled entities.
LiveTiles Annual Report 2021Consolidated Financial Statements 86
NOTE 20: EQUITY – ISSUED CAPITAL
Consolidated Group
30 June
2021 Shares
30 June
2020 Shares
30 June
2021 $
30 June
2020 $
Ordinary shares – fully paid
879,859,403
871,393,902
205,044,070
202,831,116
Movements in ordinary share capital
Date
Shares No.
Issue Price $
Total $
Balance
30-Jun-2019
624,707,227
Share capital issued
Share capital issued
Share capital issued
Share capital issued
Share capital issued
Less: capital raising costs
(a)
(b)
(c)
(d)
(e)
30-Jul-2019
6,810,234
24-Sep-2019
142,857,143
18-Oct-2019
14,285,422
3-Dec-2019
42,605,922
18-Feb-2020
40,127,954
$0.35
$0.35
$0.295
$0.327
Balance
30-Jun-2020
871,393,902
122,972,591
2,786,828
50,000,000
4,999,999
12,568,747
13,131,968
(3,629,017)
202,831,116
Share capital issued
(f)
26-Feb-2021
8,465,501
$0.26
2,212,954
Balance
30-Jun-2021
879,859,403
205,044,070
Restricted shares on issue
(g)
32,530,001
–
Total issued capital
30-Jun-2021
912,389,404
205,044,070
a. On 30 July 2019, LiveTiles Limited issued 6,810,234 shares to Orange Fish Holdings LLC as payment for
Hyperfish satisfying the performance targets of its second earn out. The fair value of the shares issued is
based on the share price of LiveTiles Limited at the date of the acquisition.
b. On 25 September 2019, LiveTiles Limited issued 142,857,143 shares at $0.35 per share to raise $50,000,000.
c. On 18 October 2019, LiveTiles Limited issued 14,285,422 shares at $0.35 per share to raise $4,999,999.
d. On 3 December 2019, LiveTiles Limited issued 42,605,922 shares as consideration for 100% of the shares
in CYCL AG. The fair value of the shares issued is based on the share price of LiveTiles Limited at the date
of the acquisition.
e. On 18 February 2020, LiveTiles Limited issued 40,127,954 shares to Webtop Holding ApS as payment for
Wizdom satisfying the performance targets of its earn out. The fair value of the shares issued is based on the
share price of LiveTiles Limited at the acquisition date.
f. On 26 February 2021, LiveTiles Limited issued 8,465,501 shares to the former owners of CYCL AG as
payment for CYCL satisfying the performance targets of its first earn out. The fair value of the shares issued
is based on the share price of LiveTiles Limited at the acquisition date.
g. As at 30 June 2021, LiveTiles Limited had issued 32,530,001 shares under the Management Incentive Plan.
LiveTiles Annual Report 2021Consolidated Financial Statements
87
• Tranches A, B and C – 26,250,000 shares were issued under the Management Incentive Plan
on 25 August 2015
• Tranches D, E and F – 1,200,000 shares were issued under the Management Incentive Plan on 5 April 2016
• Tranches G, H and I – 300,000 shares were issued under the Management Incentive Plan on 2 June 2017
• Tranches J, K and L – 600,000 shares were issued under the Management Incentive Plan on 20 November 2017
• Tranches M, N and O – 800,001 shares were issued under the Management Incentive Plan on 6 May 2019
• Tranches P, Q and R – 1,680,000 shares were issued under the Management Incentive Plan on 16 March 2020
• Tranches S, T and U – 300,000 shares were issued under the Management Incentive Plan on 25 January 2021
• Tranches V, X and W – 1,400,000 shares were issued under the Management Incentive Plan on 8 March 2021
Refer to Note 23(a).
Shares issued under the Management Incentive Plan are not included in the earnings per share calculation
in Note 8.
NOTE 21: RESERVES
Share based payments reserve
2021 $
2020 $
3,374,167
2,662,669
Foreign currency translation reserve
(4,353,583)
(872,667)
Pension revaluation reserve
Total
1,329,328
445,608
349,912
2,235,610
LiveTiles Annual Report 2021Consolidated Financial Statements
88
a. Share based payments reserve
The share based payments reserve records items recognised as expenses on valuation of share based payments.
Movements in share based payments reserve
Note
2021 $
2020 $
Opening balance
Share based payment expense
– management incentive plan
Share based payment expense
– long-term incentive plan
Share based payment expense
– Wizdom post combination services
Shares issued for Hyperfish earn-out
Shares issued for Wizdom earn-out
Closing balance
23(a)
23(b)
23(d)
20(a)
20(e)
2,662,669
8,519,292
130,768
132,503
580,730
544,023
-
-
-
3,252,130
(2,672,568)
(7,112,711)
3,374,167
2,662,669
b. Foreign currency translation reserve
The foreign currency translation reserve records exchange differences arising on translation of a foreign
controlled subsidiary. Foreign currency translation reserves relate to the translation of foreign operations
with functional currencies other than Australian dollars. Exchange differences arising on translation are
recognised in other comprehensive income. Current period movement predominately relates to the translation
of intercompany balances domiciled in the USA and denominated in AUD that are considered permanent in
nature. Intercompany balances fully eliminate upon consolidation.
Movements in foreign currency translation reserve
2021 $
2020 $
Opening balance
(872,667)
(1,445,373)
Foreign currency translation of subsidiaries within the Group
(3,480,916)
572,706
Closing balance
(4,353,583)
(872,667)
c. Pension revaluation reserve
The pension revaluation reserve records movements arising from actuarial gain or loss on the revaluation
of the Group’s defined benefit pension plan assets, net of tax.
Movements in pension revaluation reserve
Opening balance
Actuarial gain, net of tax
Closing balance
2021 $
445,608
883,720
1,329,328
2020 $
-
445,608
445,608
LiveTiles Annual Report 2021Consolidated Financial Statements 89
NOTE 22: CAPITAL AND LEASING COMMITMENTS
Capital commitments
2021 $
2020 $
Capital commitments contracted for but not recognised in the financial statements
Payable – minimum capital commitments:
– not later than 12 months
– between 12 months and 5 years
Total
63,992
410,442
474,434
65,404
448,250
513,654
Capital commitments represent minimum capital spend relating to ongoing government grants as at
30 June 2021.
There were no material contingent liabilities or assets as at 30 June 2021 (2020: nil).
NOTE 23: SHARE BASED PAYMENTS EXPENSE
Operating lease commitments
Note
2021 $
2020 $
Non-cash share based payment expense
– Management Incentive Plan shares
– Long Term Incentive Plan shares
– Contingent payment on acquisition of Wizdom A/S
Total share based payments expense
(a) Management Incentive Plan shares
(a)
(b)
(c)
130,768
580,730
132,503
544,023
-
3,252,130
711,498
3,928,656
On 25 August 2015, LiveTiles Limited issued 35,000,000 shares to certain Directors via a limited recourse loan
under the Management Incentive Plan. The effect of this arrangement is equivalent to granting the Directors an
option to purchase the shares at $0.15. These shares were issued in Tranches A, B and C.
On 5 April 2016, LiveTiles Limited issued 1,200,000 shares to senior employees of the Company via a loan
under the Management Incentive Plan. The effect of this arrangement is equivalent to granting the employees
an option to purchase the shares at $0.285. These shares were issued in Tranches D, E and F.
On 2 June 2017, LiveTiles Limited issued 300,000 shares to a senior employee of the Company via a loan under
the Management Incentive Plan. The effect of this arrangement is equivalent to granting the employee an
option to purchase the shares at $0.245. These shares were issued in Tranches G, H and I.
On 20 November 2017, LiveTiles Limited issued 600,000 shares to a senior employee of the Company via a limited
recourse loan under the Management Incentive Plan. The effect of this arrangement is equivalent to granting the
employee an option to purchase the shares at $0.25. These shares were issued in Tranches J, K and L.
On 6 May 2019, LiveTiles Limited issued 800,001 shares to a senior employee of the Company via a limited
recourse loan under the Management Incentive Plan. The effect of this arrangement is equivalent to granting
the employee an option to purchase the shares at $0.57. These shares were issued in Tranches M, N and O.
LiveTiles Annual Report 2021Consolidated Financial Statements 90
On 3 March 2020, LiveTiles Limited issued 1,680,000 shares to senior employees of the Company via a limited
recourse loan under the Management Incentive Plan. The effect of this arrangement is equivalent to granting
the employee an option to purchase the shares at $0.15. These shares were issued in Tranches P, Q and R.
On 25 January 2021, LiveTiles Limited issued 300,000 shares to senior employees of the Company via a limited
recourse loan under the Management Incentive Plan. The effect of this arrangement is equivalent to granting
the employee an option to purchase the shares at $0.23. These shares were issued in Tranches S, T and U.
On 1 March 2021, LiveTiles Limited issued 1,400,000 shares to senior employees of the Company via a limited
recourse loan under the Management Incentive Plan. The effect of this arrangement is equivalent to granting
the employee an option to purchase the shares at $0.25. These shares were issued in Tranches V, X and W.
Fair value is independently determined using a Black-Scholes option pricing model that takes into account the
effective exercise price, the term of the non-recourse loans, the share price at grant date and expected price
volatility of the underlying share. An adjustment has also been made to the valuation to reflect the time and
price based vesting conditions. The volatility is based on the volatility in the Company’s share price since the
date of the reverse acquisition.
The assumptions used to value the Management Incentive Plan shares are set out below:
Share
price
Effective
exercise
price
Term of
loan to fund
acquisition of
shares (yrs)
Compounded
risk-free
interest rate
Discount to
reflect
vesting
conditions
Discounted
value per
share
Volatility
Tranch
A, B, C
$0.15
$0.15
D, E, F
$0.25
$0.285
G, H, I
$0.235
$0.245
J, K, L
$0.27
$0.25
M, N, O
$0.445
$0.57
P, Q, R
$0.15
$0.15
S, T, U
$0.23
$0.23
V, W, X
$0.25
$0.25
6
6
6
6
6
6
6
6
3.1%
3.1%
3.1%
3.1%
3.1%
3.1%
3.1%
3.1%
75%
75%
75%
75%
75%
75%
75%
75%
40%
40%
40%
40%
40%
40%
40%
40%
$0.06
$0.10
$0.09
$0.11
$0.17
$0.06
$0.09
$0.10
LiveTiles Annual Report 2021Consolidated Financial Statements
91
The value of the loan shares issued under the Management Incentive Plan has been expensed as a share based
payment for the period ended 30 June 2021 as follows:
Number of
Shares
Date issued
Vesting date
Vesting price
Expense for 12 months
ended 30 June 2021 $
Tranche A
15,000,000
25/8/2015
24/8/2017
Tranche B
10,000,000
25/8/2015
24/8/2018
Tranche C
10,000,000
25/8/2015
24/8/2019
Tranche D
400,000
5/4/2016
6/4/2017
Tranche E
400,000
5/4/2016
6/4/2018
Tranche F
400,000
5/4/2016
6/4/2019
Tranche G
100,000
2/6/2017
2/6/2018
Tranche H
100,000
2/6/2017
2/6/2019
Tranche I
100,000
2/6/2017
2/6/2020
Tranche J
200,000
20/11/2017
20/11/2018
Tranche K
200,000
20/11/2017
20/11/2019
Tranche L
200,000
20/11/2017
20/11/2020
Tranche M
266,667
6/5/2019
5/5/2020
Tranche N
266,667
6/5/2019
5/5/2021
Tranche O
266,667
6/5/2019
5/5/2022
Tranche P
560,000
16/3/2020
16/3/2021
Tranche Q
560,000
16/3/2020
16/12/2022
Tranche R
560,000
16/3/2020
16/12/2023
Tranche S
100,000
15/1/2021
15/10/2021
Tranche T
100,000
15/1/2021
15/10/2022
Tranche U
100,000
15/1/2021
15/10/2023
Tranche V
467,000
1/3/2021
1/3/2022
Tranche X
467,000
1/3/2021
1/3/2023
Tranche W
467,000
1/3/2021
1/3/2024
Total
(b) Long Term Incentive Plan Options
$0.25
$0.35
$0.45
$0.285
$0.285
$0.285
$0.245
$0.245
$0.245
$0.25
$0.25
$0.25
$0.57
$0.57
$0.57
$0.15
$0.15
$0.15
$0.23
$0.23
$0.23
$0.25
$0.25
$0.25
-
-
-
-
-
-
-
-
-
-
-
2,853
-
19,189
14,572
24,116
19,383
12,343
5,658
2,421
1,540
15,659
7,830
5,204
130,768
On 16 November 2018, LiveTiles Limited issued 4,056,200 options to certain employees under the Long-Term
Incentive Plan.
On 16 January 2019, LiveTiles Limited issued 555,000 options to certain employees under the Long-Term
Incentive Plan.
LiveTiles Annual Report 2021Consolidated Financial Statements
92
On 25 November 2019, LiveTiles Limited issued 4,521,650 options to certain employees under the Long-Term
Incentive Plan.
On 16 March 2020, LiveTiles Limited issued 900,000 options to certain employees under the Long-Term
Incentive Plan.
On 1 March 2021, LiveTiles Limited issued 7,818,700 options to certain employees under the Long-Term
Incentive Plan.
Fair value is independently determined using a Black-Scholes option pricing model that takes into account the
effective exercise price, the term of the option, the share price at grant date and expected price volatility of the
underlying share. The value of the loan shares issued under the Management Incentive Plan has been expensed
as a share based payment for the period ended 30 June 2021 as follows:
Number of
options
Date issued
Vesting date
Vesting price
Expense for 12 months
ended 30 June 2021 $
200,000
200,000
940,000
940,000
888,100
888,100
185,000
185,000
185,000
611,325
611,325
1,468,500
1,468,500
181,000
181,000
450,000
450,000
2,605,000
2,605,000
1,304,350
1,304,350
Total
16/11/2019
16/11/2019
16/11/2019
16/11/2020
16/11/2019
16/11/2020
16/11/2019
16/11/2021
16/11/2019
16/11/2020
16/11/2019
16/11/2021
16/1/2019
16/1/2020
16/1/2019
16/1/2021
16/1/2019
16/1/2022
25/11/2019
25/11/2021
25/11/2019
25/11/2022
25/11/2019
25/11/2021
25/11/2019
25/11/2022
25/11/2019
25/11/2021
25/11/2019
25/11/2022
16/3/2020
16/12/2021
16/3/2020
16/12/2022
1/3/2021
1/3/2021
1/3/2021
1/3/2021
1/3/2023
1/3/2024
1/3/2023
1/3/2024
$0.41
$0.41
$0.41
$0.41
$0.59
$0.59
$0.52
$0.52
$0.52
$0.43
$0.43
$0.30
$0.30
$0.30
$0.30
$0.15
$0.15
$0.25
$0.25
$0.36
$0.36
-
6,384
16,039
30,180
18,073
37,167
-
-
-
30,547
29,085
75,307
69,396
11,788
8,968
23,089
24,754
71,260
57,389
37,646
33,658
580,730
LiveTiles Annual Report 2021Consolidated Financial Statements
93
(c) Contingent payment on acquisition of Wizdom A/S
On 13 February 2019, LiveTiles acquired Wizdom A/S from Webtop Holding ApS. Because part of the total
amount payable to Webtop Holding ApS is contingent on the continued employment of key Wizdom staff,
such amount is deemed to be a share based payment for post combination services. The fair value has
been determined using the market price of LiveTiles shares, probability of contingencies being met
and an appropriate discount rate to reflect payment periods.
NOTE 24: CASH FLOW INFORMATION
(a) Reconciliation of cash flows used in operating activities with after tax loss
Loss after income tax expense
(30,140,950)
(31,604,441)
Cash flows excluded from loss attributable to operating activities:
2021 $
2020 $
Non-cash flows in loss:
– share based payments expense
– foreign exchange differences
– depreciation and amortisation
– deferred tax
Changes in assets and liabilities:
– (increase)/decrease in trade and other receivables
– increase/(decrease) in other non-current assets
– increase in trade and other payables
– (increase)/decrease in other liabilities
– increase in provisions
– net current assets of acquired entities
711,498
1,889,297
11,286,373
523,581
(838,056)
1,128,142
2,689,712
(286,369)
687,465
-
Cash flows used in operating activities
(12,349,307)
3,928,656
1,207,703
10,256,971
1,164,513
3,676,534
(235,761)
430,067
942,942
1,613,485
(631,125)
(9,250,456)
LiveTiles Annual Report 2021Consolidated Financial Statements
94
NOTE 25: RELATED PARTY TRANSACTIONS
The Group’s related parties are as follows:
Parent entity
LiveTiles Limited is the legal parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 19.
Key management personnel
Key management personnel are limited to those named in the Directors’ report. Those personnel have been
determined to have authority and responsibility for planning, directing and controlling the activities of the
entity and all payments related to their services have been included in the table below.
Payments to key management personnel for services:
Note
2021 $
2020 $
Short term employee benefits
Post-employment benefits
Share based payments
Total
(a) Share based payments
(a)
2,745,446
2,706,492
53,334
22,247
42,006
64,500
2,821,027
2,812,998
The share based payments relate to the shares issued under the Management Incentive Plan (refer to Note 23 (a)).
Receivables and payables to key management
personnel for services:
Current receivables (30 June 2020: Non-current):
Note
2021 $
2020 $
- Loans to key management personnel
(b)
1,165,974
697,381
Current payables:
- Accrued short term benefits to key management personnel
(132,004)
(45,274)
Net receivables to key management personnel
1,033,970
652,107
(b) Loans to key management personnel
The loans have been provided at arm’s length with a total capped amount of $475,000 per person. Interest
charged at 15% per annum and is capitalised annually. There have been no write-downs of balances owed
during the period. No provision is held in relation to the collection of these balances.
LiveTiles Annual Report 2021Consolidated Financial Statements
95
NOTE 26: FINANCIAL RISK MANAGEMENT
The Group’s principal financial instruments comprise receivables, payables and cash.
The Group manages its exposure to key financial risks, including interest rate, foreign currency, credit risk
and liquidity risk, with the objective of providing support to the delivery of the Group’s financial target while
protecting financial security.
The main risks arising from the Group’s financial instruments are credit risk, liquidity risk, interest rate risk
and foreign currency risk. The Group uses different methods to measure and manage different types of risk to
which it is exposed. These include analysis of aging reports to monitor and manage credit risk, analysis of future
rolling cash flow forecasts to monitor and manage liquidity risk, monitoring levels of exposure to interest rate
and foreign currency risk, and assessments of market forecasts for interest rate and foreign currency exchange
rate movement.
The Board reviews and agrees risk management strategies for managing each of the risk identified above.
Primary responsibility for identification and control of financial risks rests with Management under authority
of the Board.
Risks exposures and responses
(i) Interest rate risk
The Group’s exposure to interest rate risk is minimal given the Group has no borrowings.
The Group does not enter into any interest rate swaps, interest rate options or similar derivatives.
At the balance date, the Group had the following mix of financial assets and liabilities exposed to variable
interest rate risk that are not designated in cash flow hedges:
Financial assets
Cash and cash equivalents
Net exposure
2021 $
16,804,924
16,804,924
2020 $
37,791,314
37,791,314
(Loss)/profit – Higher/(lower)
Equity – Higher/(lower)
2021 $
2020 $
2021 $
2020 $
Judgements of reasonable possible movements
+0.50%
-0.50%
84,025
188,957
84,025
188,957
(84,025)
(188,957)
(84,025)
(188,957)
LiveTiles Annual Report 2021Consolidated Financial Statements
96
(ii) Foreign currency risk
The Group’s functional currency is Australian dollars (AUD) and the Group is exposed to transactional currency
exposures. Such exposures arise primarily as a result of sales and expenses of LiveTiles Corporation being
made in foreign currencies in addition to bank accounts being held in foreign entities. Foreign currency risk
is managed by holding the Group’s cash in a combination of USD, DKK, EUR, CHF and AUD. Management
also reviews the foreign currency product pricing structure on a quarterly basis.
At balance date, the Group had the following exposure to foreign currencies that is not designated
in cash flow hedges:
AUD
Cash and cash equivalents – USD
Cash and cash equivalents – EUR
Cash and cash equivalents – DKK
Cash and cash equivalents – CHF
Trade and other receivables – USD
Trade and other receivables – GBP
Trade and other receivables – EUR
Trade and other receivables – DKK
Trade and other receivables – CHF
Trade and other payables – USD
Trade and other payables – EUR
Trade and other payables – DKK
Trade and other payables – CHF
Net exposure
2021 $
7,756,061
5,587,286
1,088,738
445,932
2,108,250
195,707
1,057,443
944,297
497,694
(204,237)
(287,958)
(149,484)
(1,065,002)
17,974,727
2020 $
16,231,166
1,984,440
680,063
885,374
2,789,250
-
2,123,585
882,968
1,081,985
(507,015)
(55,002)
(122,097)
(396,672)
25,578,045
LiveTiles Annual Report 2021Consolidated Financial Statements 97
(ii) Foreign currency risk (continued)
The following sensitivity analysis is based on the foreign exchange rate exposures in existence at the balance
sheet date:
At the balance date, had the Australian dollar moved, with all other variables held constant, the loss for the year
and equity would have been affected as follows:
Post tax loss
Higher/(lower)
Equity
Higher/(lower)
2021 $
2020 $
2021 $
2020 $
Judgements of reasonable possible movements
AUD/USD +10%
AUD/USD -10%
AUD/GBP +10%
AUD/GBP -10%
AUD/EUR +10%
AUD/EUR -10%
AUD/DKK +10%
AUD/DKK -10%
AUD/CHF +10%
AUD/CHF -10%
1,006,855
1,851,340
1,006,855
1,851,340
(1,006,855)
(1,851,340)
(1,006,855)
(1,851,340)
19,571
(19,571)
693,269
-
-
19,571
(19,571)
-
-
405,302
693,269
405,302
(693,269)
(405,302)
(693,269)
(405,302)
218,252
144,093
218,252
144,093
(218,252)
(144,093)
(218,252)
(144,093)
200,863
157,069
200,863
157,069
(200,863)
(157,069)
(200,863)
(157,069)
The judgement of reasonable possible rate movement is based upon management’s current assessment
of the possible change in foreign currency exchange rates. This is based on regular review of current trends
and forecasts. There has been no change in assumptions and sensitivities from the previous year.
LiveTiles Annual Report 2021Consolidated Financial Statements
98
(iii) Liquidity risk
The following are the remaining contractual maturities of financial liabilities at the reporting date.
The amounts are gross and undiscounted, and include estimated interest payments.
Less than 6 months
6 to 12 months
1 to 5 years
Total
2021
Trade and other payables
7,863,233
-
-
7,863,233
Lease liabilities
430,989
430,989
2,365,036
3,227,014
Income tax payable
1,788,885
96,402
541,798
2,427,085
Total
2020
Trade and other payables
Lease liabilities
Income tax payable
Total
10,083,107
527,391
2,906,834
13,517,332
7,443,718
452,350
1,324,238
9,220,306
-
-
7,443,718
452,350
3,427,179
4,331,879
-
-
1,324,238
452,350
3,427,179
13,099,835
(iv) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the Group. The Group assesses the credit worthiness of the counterparty before entering into a sales
contract. Further mitigating this risk is the ability to turn off the customer’s software if a customer begins
to default on their contractual obligations. The maximum exposure to credit risk at the reporting date to
recognised financial assets is the carrying amount, net of any provisions for impairment to those assets,
as disclosed in the statement of financial position and notes to the financial statements.
(v) Fair value of financial instruments
Unless otherwise stated, the carrying value of financial instruments reflect their fair value. The carrying
amounts of trade receivables and trade payables are assumed to approximate their fair values due to their
short-term nature. The fair value of financial liabilities is estimated by discounting the remaining contractual
maturities at their current market interest rate that is available for similar financial instruments.
LiveTiles Annual Report 2021Consolidated Financial Statements
99
NOTE 27: OPERATING SEGMENTS
The consolidated entity has identified three operating segments based on the internal reports that are
reviewed and used by the Board of Directors & Chief Executive Officer (who is identified as the Chief Operating
Decision Makers (‘CODM’). The CODM is responsible for the allocation of resources to operating segments
and assessing their performance.
The operating results of the consolidated entity are currently reviewed by the CODM and decisions are based
on three operating segments which also represent the three reporting segments, as follows:
Americas
APAC
EMEA
Represents the revenue and operating expenses attributable to activities conducted
in United States of America, Canada, Central America & South America.
Represents the revenue and operating expenses attributable to activities conducted
in Australia, New Zealand & Asia.
Represents the revenue and operating expenses attributable to activities conducted
in Europe, Middle East & Africa.
The table below shows the segment information provided to the CODM for the reportable segments
for the financial years ending 30 June 2020 and 30 June 2021:
Consolidated
– 30 June 2020
APAC
Americas
EMEA
Unallocated
/Head Office
Total
Subscription revenue
5,761,792
12,602,189
19,426,422
-
37,790,403
Other revenue
4,525,109
1,723,704
66,284
362,983
6,678,080
Revenue
EBITDA
10,286,901
14,325,893
19,492,706
362,983
44,468,483
(2,193,869)
(8,234,355)
206,134
(9,669,403)
(19,891,493)
Depreciation & amortisation
(1,032,509)
(2,230,465)
(2,819,807)
(5,340,961)
(11,423,742)
Finance costs
(15,799)
(399,174)
(10,242)
-
(425,215)
Loss before income tax
expenses
(3,242,177)
(10,863,994)
(2,623,915)
(15,010,364)
(31,740,450)
Income tax expense
(158,644)
(1,137,196)
267,337
1,164,512
136,009
Loss after income tax
expenses
Consolidated
– 30 June 2020
Assets
(3,400,821)
(12,001,190)
(2,356,578)
(13,845,852)
(31,604,441)
APAC
Americas
EMEA
Unallocated
/Head Office
Total
Segment assets
3,705,484
22,105,609
10,886,378
97,501,482
134,198,953
Liabilities
Segment liabilities
(4,161,059)
(12,474,661)
(18,448,967)
(15,417,012)
(50,501,699)
LiveTiles Annual Report 2021Consolidated Financial Statements
100
Consolidated
– 30 June 2021
APAC
Americas
EMEA
Unallocated
/Head Office
Total
Subscription revenue
12,340,650
8,384,880
24,251,070
-
44,976,600
Other revenue
356
1,452,711
62,312
230,209
1,745,588
Revenue
EBITDA
12,341,006
9,837,591
24,313,382
230,209
46,722,188
(4,326,582)
(854,262)
6,212,733
(17,237,725)
(16,205,836)
Depreciation & amortisation
(1,048,810)
(1,474,814)
(3,814,401)
(4,948,348)
(11,286,373)
Finance costs
(2,981)
(319,017)
(53,978)
(1,693,499)
(2,069,475)
Loss before income tax
expenses
(5,378,373)
(2,648,093)
2,344,354
(23,879,572)
(29,561,684)
Income tax expense
(154,950)
(677,020)
(800,441)
1,053,145
(579,266)
Profit / (loss) after income
tax expenses
(5,533,323)
(3,325,113)
1,543,913
(22,826,427)
(30,140,950)
Consolidated
– 30 June 2021
Assets
APAC
Americas
EMEA
Unallocated
/Head Office
Total
Segment assets
6,318,957
11,042,896
11,527,364
74,349,800
103,239,017
Liabilities
Segment liabilities
(7,004,324)
(11,549,549)
(18,019,626)
(12,781,958)
(49,355,457)
The CODM uses underlying EBITDA as a measure to assess the performance of the segments. This excludes
the effects of significant items of income and expenditure which may have an impact on the quality of earnings
such as acquisition costs, legal expenses and impairments when the impairment is the result of an isolated,
non–recurring event. It also excludes the effects of equity-settled share-based payments, unrealised gains/
losses on financial instruments and amortisation of intangibles.
Interest income and expenditure are not allocated to segments, as this type of activity is driven by the central
treasury function, which manages the cash position of the Group.
NOTE 28: CONTINGENT LIABILITIES
There are no material contingent liabilities.
NOTE 29: EVENTS AFTER THE REPORTING PERIOD
There have been no significant events affecting the Group since the end of the financial year.
LiveTiles Annual Report 2021Consolidated Financial Statements
101
NOTE 30: COMPANY DETAILS
The registered office of the Company is:
LiveTiles Limited
2 Riverside Quay
Southbank VIC 3006
The principal places of business are:
Australia:
Level 14
77 King Street
Sydney, NSW 2000
USA:
137 W 25th Street
6th floor
New York NY 10001
Denmark:
Toldbodgade 18
Copenhagen
1253
Switzerland:
Malzgasse 7a,
Basel
4052
LiveTiles Annual Report 2021Consolidated Financial Statements
102
DIRECTORS DECLARATION
In accordance with a resolution of the directors of LiveTiles Limited, the directors of the company declare that:
1. the financial statements and notes, as set out on pages 52 to 101, are in accordance with the Corporations Act
2001 and:
a. comply with Australian Accounting Standards, which, as stated in the accounting policy Note 1 to the
financial statements, constitutes compliance with International Financial Reporting Standards as issued
by the International Accounting Standards Board; and
b. give a true and fair view of the financial position as at 30 June 2021 and of the performance for the year
ended on that date of the consolidated group;
2. in the directors’ opinion there are reasonable grounds to believe that the company will be able to pay
its debts as and when they become due and payable; and
3. the directors have been given the declarations required by s 295A of the Corporations Act 2001
from the Chief Executive Officer and Chief Financial Officer.
Director
Karl Redenbach
Dated this 26th day of August 2021
LiveTiles Annual Report 2021Directors’ Declaration 103
INDEPENDENT
AUDITOR’S
REPORT
LiveTiles Annual Report 2021 104
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret St
Sydney NSW 2000
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of LiveTiles Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of LiveTiles Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2021, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
LiveTiles Annual Report 2021Independent Auditor’s Report
105
Revenue recognition
Key audit matter
How the matter was addressed in our audit
Australian Accounting Standard AASB 15:
To determine whether revenue was appropriately accounted for
Revenue from Contracts with Customers
(‘AASB 15’) users a five step model to
and disclosed within the financial statements, we performed,
amongst others, the following audit procedures:
recognise revenue. A number of estimates
and judgements are made by management
in order to determine the point at which
performance obligations are met and
when revenue can be recognised.
•
Critically evaluated the revenue recognition policies for
all material sources of revenue and from our detailed
testing performed, ensured that revenue was being
recognised appropriately, in line with Australian
Accounting Standards and policies disclosed within the
Due to these factors and the overall
financial statements. This included ensuring that revenue
significance of revenue to the Group as a
was recognised in accordance with the requirements of
key performance indicator, we considered
AASB 15.
this area to be a key audit matter.
•
Selecting a sample of revenue transactions agreeing
revenue recognised to supporting documentation to
confirm the existence and accuracy of the revenue
recognised and to consider whether the transactions were
recorded in the correct period. Furthermore, we obtained
and inspected the deferred revenue schedules in order to
ensure that correct adjustments were recorded to
recognise the revenue in the appropriate reporting
period.
Carrying value of intangible assets
Key audit matter
How the matter was addressed in our audit
As at 30 June 2021, the Group recognised
Our audit procedures for assessing the carrying value of the
intangible assets with a carrying value of
Group’s intangible assets included, but were not limited to, the
$72,508,993 as disclosed in Note 12.
following:
The assessment of the carrying value of
intangible assets was considered a key
audit matter due to the significant value
of these assets in the Consolidated
Statement of Financial Position in addition
to the key estimates and judgements
applied by management in determining
the recoverable value of these assets
under Australian Accounting Standard
(AASB) 136 Impairment of Assets.
•
•
•
Evaluated the discounted cash flow models prepared by
management and challenged the assumptions and
judgements made. This included considering the
reliability of the cash generating units (‘CGU’) historical
performance in comparison to forecast future cash flows.
Together with BDO valuation specialists, assessed the
reasonableness of the discount rates applied by
management.
Performed sensitivity analysis on the key inputs applied to
the discounted cash flow models to assess the impact that
minor changes in the assumptions would make to the
recoverable value of the CGU.
LiveTiles Annual Report 2021Independent Auditor’s Report
106
•
•
Assessed the adequacy of the Group’s disclosures in
respect of intangible assets carrying values and
impairment assessment assumptions as disclosed in note
12 of the financial report.
Considered any additional impairment indicators as per
AASB 136 Impairment of Assets and the impact on
management’s assumptions.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Directors’ Report (excluding the audited Remuneration Report section) for the year
ended 30 June 2021, but does not include the financial report and the auditor’s report thereon, which
we obtained prior to the date of this auditor’s report, and the Annual Report to Shareholders, which is
expected to be made available to us after that date.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date
of this auditor’s report, we conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this regard.
When we read the Annual Report to Shareholders, if we conclude that there is a material misstatement
therein, we are required to communicate the matter to the directors and will request that it is
corrected. If it is not corrected, we will seek to have the matter appropriately brought to the
attention of users for whom our report is prepared.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
LiveTiles Annual Report 2021Independent Auditor’s Report
107
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report under the heading
‘Remuneration Report’ for the year ended 30 June 2021.
In our opinion, the Remuneration Report of LiveTiles Limited, for the year ended 30 June 2021,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit Pty Ltd
Martin Coyle
Director
Sydney, 26 August 2021
LiveTiles Annual Report 2021Independent Auditor’s Report
108
SHAREHOLDER
INFORMATION
LiveTiles Annual Report 2021 109
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
The following information is current as at 1 October 2021:
1 Shareholding
a. Distribution of Shareholders
Category (size of holding)
Ordinary Shares
% of Shares Listed
1-1000
1,001-5,000
5,001-10,000
10,001–100,000
100,001 and over
322,732
10,491,331
15,750,104
140,952,187
722,587,548
890,103,902
0.04%
1.18%
1.77%
15.84%
81.18%
100.00%
b. The number of shareholdings held in less than marketable parcels is 3,795
c. The names of the substantial shareholders listed in the holding company’s register are:
Shareholder
Karl Redenbach
Peter Nguyen-Brown
FIL Limited
Ordinary Shares
% of Shares Listed
90,982,547
78,232,547
48,352,274
10.08%
8.67%
5.36%
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.
LiveTiles Annual Report 2021Shareholder Information 110
e. 20 Largest Shareholders – Ordinary Shares
Name
Number of
Ordinary Fully
Paid Shares Held
% Held of
Issued Ordinary
Capital
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
148,094,549
16.64%
1
2
3
4
5
6
KARL REDENBACH
NATIONAL NOMINEES LIMITED
CITICORP NOMINEES PTY LIMITED
PETER NGUYEN-BROWN
JINLAND PTY LTD
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