SportsHero Limited
(Formerly Nevada Iron Limited)
ACN 123 423 987
Annual Report
for the year ended
30 June 2017
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
CORPORATE DIRECTORY
Directors
Michael Higginson (Chairman)
Tom Lapping (Director – appointed 10 April 2017; CEO – appointed 4 September 2017)
Christopher Green (Non-Executive Director)
Company Secretary
Michael Higginson
Registered Office and
Principal Place of Business
29 Brookside Place
Lota, QLD 4179
Telephone: +61 (7) 3901 0751
Facsimile: +61 (7) 3901 0751
Website: http://sportshero.mobi/
Auditor
RSM Australia Partners
Level 32/2 The Esplanade
Perth WA 6000
Share Registry
Advanced Share Registry Services Limited
110 Stirling Highway
Nedlands WA 6009
Telephone: +61 (8) 9389 8033
Facsimile: +61 (8) 9262 3723
Stock Exchange Listing
Australian Securities Exchange
ASX Code: SHO
2
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
CONTENTS
PAGE
CHAIRMAN’S LETTER
OPERATIONS REPORT
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
STATEMENT OF FINANCIAL POSITION
STATEMENT OF COMPREHENSIVE INCOME
STATEMENT OF CHANGES IN EQUITY
STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
SHAREHOLDER INFORMATION
General information
4
5
7
15
16
17
18
19
20
43
44
48
The financial statements cover SportsHero Limited as a consolidated entity consisting of SportsHero Limited and its
subsidiaries. The financial statements are presented in US dollars, which is SportsHero Limited’s functional and
presentation currency.
SportsHero Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered
office and principal place of business is:
29 Brookside Place
Lota, QLD 4179
Telephone: +61 (7) 3901 0751
Facsimile: +61 (7) 3901 0751
A description of the nature of the consolidated entity's operations and its principal activities are included in the Directors'
Report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 29 September 2017.
The Directors have the power to amend and reissue the financial statements.
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SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
CHAIRMAN’S LETTER
Dear Shareholder
On behalf of the Board of Directors of SportsHero Limited, I am very pleased to be able to present the 2017 Annual
Report of the Company.
As approved by Shareholders on 30 November 2016, the Company completed the sale of the Buena Vista Iron Project
on 7 February 2017.
On that same date, the Company also completed the acquisition of the SportsHero business and the raising of
AUD3,202,000 (before costs) pursuant to the issue of 64,040,000 fully paid ordinary shares at an issue price of AUD0.05
per share.
Following the acquisition of the SportsHero business, the Company’s securities were re-instated to trading by ASX on 15
February 2017, ending a protracted 9 month suspension period.
During the period since re-instatement, the Company has been tirelessly working towards upgrading both the SportsHero
team and the monetisation potential of the Company’s unique sports gamification platform, which offers users a robust
sports prediction platform across football (soccer) and cricket.
The Company is now looking to build a very large and hyper-engaging community of sports fans around its gamification
platform. In so doing, we have a set an ambitious goal to become the first sports prediction app to grow a community size
of one billion people by December 2017. We have labelled this goal “Project 1 Billion”.
Project 1 Billion is looking to combine the communities from all of SportsHero’s affiliates (social platforms, B2B & B2C
brands, professional sports teams) to create a large community of sports fans who come together to play sports games,
consume content and interact with ambassadors and personalities. The model is designed to grow the SportsHero
community exponentially and is only limited by the number of SportsHero affiliates that are partnered.
The Company’s soon to be released Project 1 Billion monetisation model is being built around the existing Prediction
Model, plus Fantasy Sports and eGaming.
With the imminent launch of the upgraded app, we are positioning SportsHero to become a significant player in the very
rapidly expanding global games market, which we expect will deliver both growth and opportunity for your Company.
Finally, throughout this period of transformation and change, it would be remiss of me not to sincerely thank all staff and
consultants (both past and present) for their contributions throughout the year.
Yours sincerely
Michael Higginson
Chairman
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SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
OPERATIONS REPORT
During the year the Company sold its 100% interest in the Buena Vista Iron Project (located in Nevada USA) and
acquired a 100% interest in the SportsHero business.
SportsHero is a sports gaming platform that currently boasts a robust prediction program across football (soccer) and
cricket.
Precise details of events and activities undertaken throughout the year are as set out in the Directors’ Report under the
heading “Significant changes in state of affairs” and “Subsequent events” (refer pages 9 and 10).
Following the receipt of shareholder approval on 30 November 2016, on 7 February 2017 the Company sold its 100%
interest in the Buena Vista Iron Project for the following consideration:
the assumption of debt totalling not less than AUD800,000;
a cash payment of AUD100,000;
a cash payment of:
(i)
(ii)
(iii)
USD250,000 on commencement of iron ore production at 1Mtpa or greater from the existing Buena Vista
claims (Production Payment);
USD250,000 on the first anniversary of the Production Payment (First Anniversary Payment), subject to
production having been continuous during the period between the Production Payment and the First
Anniversary Payment; and
USD250,000 on the second anniversary of the Production Payment (Second Anniversary Payment),
subject to production having been continuous during the period between the Production Payment and
Second Anniversary Payment,
Also on 7 February 2017, the Company completed the following:
the raising of AUS3,202,000 (before costs) pursuant to the issue of 64,040,000 fully paid ordinary shares at an
issue price of AUD0.05 per share, pursuant to the Company’s prospectus dated 21 November 2016
(Prospectus);
the issue of 60,000,000 fully paid ordinary shares to MyHero Ltd in consideration for the acquisition by Sportz
Hero Pty Ltd of an additional 83.33% of the issued share capital of Sportshero Enterprise Pte Ltd; and
the issue of 36,000,000 fully paid ordinary shares and 72,000,000 options each exercisable at AUD0.05 and
expiring 31 August 2019 to the shareholders of Sportz Hero Pty Ltd in consideration for the acquisition of 100%
of the issued share capital of Sportz Hero Pty Ltd.
The issue of the 60,000,000 shares to MyHero Limited and the 36,000,000 shares and 72,000,000 options to the
shareholders of Sportz Hero Pty Ltd resulted in the Company acquiring the SportsHero business. The corporate structure
of the Company following the acquisition of the SportsHero business and the sale of the Buena Vista Project is as set out
below:
SportsHero Limited
Sportz Hero Pty Ltd
SportsHero Enterprise Pte Ltd
SportsHero Information
Technology (Shanghai) Co Ltd
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SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
OPERATIONS REPORT
On 12 May 2017, the Company announced the establishment of a strategic partnership with Spartan Sporting Goods
(Spartan). In accordance with the partnership, Spartan was appointed as the Company’s official sports equipment
partner.
Since the re-instatement of the Company to the official list of 15 February 2017, the Company has been upgrading the
monetisation potential of the SportsHero app, with the Company now set to embark on building a very large and hyper-
engaging community of sports fans around its gamification platform. In so doing, the Company has set an ambitious goal
to become the first sports prediction app to grow a community size of one billion people by December 2017. We have
labelled this goal “Project 1 Billion”.
Project 1 Billion is looking to combine the communities from all of SportsHero’s affiliates (social platforms, B2B & B2C
brands, professional sports teams) to create a large community of sports fans who come together to play sports games,
consume content and interact with ambassadors and personalities. The model is designed to grow the SportsHero
that are partnered.
community exponentially and
the number of SportsHero affiliates
limited by
is only
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SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ REPORT
The Directors present their report together with the consolidated financial report for SportsHero Limited (“SportsHero” or
the “Company”) and its controlled entities (collectively the “Group”), for the year ended 30 June 2017.
Directors
(i)
Names, qualifications and experience
The names and details of the Company’s Directors in office at any time during the financial period and until the date of
this report are as follows:
Michael Higginson
Tom Lapping
Christopher Green
Mick McMullen
Howard Dawson
Non-Executive Director (appointed 21 June 2016) and Chair (appointed 29 June 2017)
Non -Executive Director (appointed 10 April 2017)
Non-Executive Director (appointed 21 June 2016)
Chair & Managing Director (resigned 23 January 2017)
Director (appointed 23 January 2017 – retired 10 April 2017)
Messrs Higginson and Green were Directors for the entire period. Messrs Lapping, McMullen and Dawson were
Directors for the period detailed above.
Michael Higginson – Chairman
Qualification: B.Bus Fin & Admin
Mr Higginson is the holder of a Bachelor of Business Degree with majors in both Finance and Administration.
Mr Higginson is a professional director and company secretary with extensive experience in public company
administration, ASX Listing Rules, the Corporations Act, capital raisings, corporate governance, financial reporting and
due diligence.
Mr Higginson was formerly an executive officer with the Australian Securities Exchange and has, over the last 29 years,
held numerous company secretarial and directorship roles with a number of public listed companies across a range of
industry sectors.
Mr Higginson is a director of Cape Range Limited.
Tom Lapping – Director (appointed 10 April 2017) and CEO (appointed 4 September 2017)
Mr Lapping is highly experienced across the securities and media sectors. Since 2016, he has played an integral role
within SportsHero and was a key member of the team during the transition of the SportsHero business from a
Singaporean unlisted entity to an ASX listed public company in February 2017.
Tom is a successful entrepreneur who has accumulated extensive experience leading both established and early stage
ventures in the Asia-Pacific region. Tom has keen understanding of consumer behaviour and was recognised as a
40under40 business entrepreneur award winner in Western Australia in 2003
Christopher Green – Non Executive Director
Qualifications: B.Sc (Applied Geology) and Grad Dip Computer Science
Mr Green has been working in the mining and IT industries for 40 years, in the areas of exploration and mining as a
geologist, and in the areas of software development as a programmer, technical analyst, IT Manager and as a Manager
of Innovation.
With his professional qualifications in Geology, Computer Science and Complexity Theory, Chris has over 40 years
professional experience with the last 25 years almost exclusively within the practical application of IT and IT innovation.
Mick McMullen – Chairman & Managing Director (resigned 23 January 2017)
Qualifications: B.Sc (Geology), Member AusIMM
Mr McMullen is a geologist with a BSc (Geology) from the University of Newcastle, Australia and has in excess of 20
years’ experience in exploration, financing, development and operation of mining projects. He was the Managing Director
and a co-founder of Northern Iron (ASX: NFE), an ASX listed iron ore mining company with assets in Norway, and the
President and CEO of Stillwater Mining Company, a New York Stock Exchange listed company with operating PGM
mines in Montana.
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SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ REPORT
Howard Dawson – Director (appointed 23 January 2017 and retired 10 April 2017)
Qualifications: Bachelor of Science (Geology) SFFINSIA, MAIG
Mr Dawson had an 11 year career as a geologist before entering the securities industry as a research analyst in 1987.
Over the subsequent 22 years he fulfilled a number of complementary roles within the securities industry including
research, corporate advisory, business development and management for firms including Hartley Poynton, McIntosh
Securities, Merrill Lynch and ABN AMRO Morgan’s Limited.
Mr Dawson is a director of Discovery Capital Limited.
(ii)
Interests in the Shares and Options of the Company
As at the date of this report, the interest of the Directors in the shares and options of the Company are:
M Higginson
T Lapping
C Green
TOTAL
Number of
shares
20,834
11,782,143
-
11,802,977
Number of
options
-
16,714,286
-
16,714,286
Company Secretary
Michael Higginson
Qualification: B.Bus Fin & Admin
Directors’ meetings
The number of meetings attended by each of the Directors of the Company during the financial year was:
Michael Higginson
Tom Lapping
Christopher Green
Mick McMullen
Howard Dawson
Board Meetings
(b)
(a)
5
5
1
1
5
5
3
3
1
1
(a) Number of meetings held and entitled to attend
(b) Number of meetings attended
Given the size of the Company and current level of activities, the Board has assumed the duties and responsibilities
typically delegated to an audit committee, risk committee, remuneration committee and nomination committee.
Corporate structure
SportsHero Limited is a company limited by shares that is incorporated and domiciled in Australia.
On 7 February 2017, the Company disposed of its 100% owned Australian subsidiary Nevada Iron Holdings Pty Limited,
which owned 100% of Nevada Iron LLC (incorporated in the state of Nevada USA) and 100% of Iron Horse
Transportation LLC ( incorporated in the state of Nevada USA).
On 7 February 2017, the Company acquired 100% of Australian incorporated Sportz Hero Pty Limited, which in turn (as
of 7 February 2017) owned 100% of Singaporean company SportsHero Enterprise Pte Ltd. SportsHero Enterprise Pte
Ltd is the 100% owner of Chinese incorporated SportsHero Information Technology (Shanghai) Co Limited.
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SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ REPORT
Nature of operations and principal activities
The principal activity of the Group during the year was the acquisition and development of a sports gamification platform.
Results of operations
The operating loss after income tax of the Group for the year ended 30 June 2017 was USD4,266,644 (2016:
USD151,260).
The Group’s basic loss per share for the year was 3.85 US cents (2016: nil).
Dividends
No dividend has been paid during or is recommended for the financial year ended 30 June 2017 (2016: nil).
Employees
The Group had 10 employees as at 30 June 2017 (30 June 2016: 9), other than the Chairman and two non-executive
Directors.
Review of operations
The principal activity of the Group during the financial year was the acquisition and development of a sports gamification
platform.
An overview of the Group’s operations during the financial year is set out in the Operations Report.
Significant changes in state of affairs
On 22 July 2016, the Company raised AUD273,395 in working capital pursuant to the issue of 10,389,500 fully paid
ordinary shares at an issue price of AUD0.01 per share and the issue of 16,950,000 convertible notes also at an issue
price of AUD0.01 per convertible note (note: the shares and convertible notes were issued pre a 1 for 2 consolidation of
the Company’s share capital).
On 27 September 2016, the Company announced that it had executed the following agreements in relation to the
acquisition of 100% of the SportsHero business (Acquisition):
Share Purchase Agreement - for the acquisition of 100% of the issued share capital of Sportz Hero Pty Limited
(SPA);
Share Sale Agreement – whereby SPA acquires an additional 83.33% of SportsHero Enterprise Pte Ltd (SPS),
making SPS a 100% owned subsidiary of SPA. SPS is a company incorporated in Singapore and owner of the
SportsHero business
Sale of Buena Vista Iron Project
As announced on 20 May 2016, the Company agreed to enter into a sale agreement for the sale of 100% of the
Company’s interest in the Buena Vista Iron Project.
In that regard, on 27 September 2016 the Company executed a Binding Heads of Agreement for the sale of 100% of the
issued share capital of Nevada Iron Holdings Pty Limited (NVH) to New Nevada Resources LLC and Rhodes Investment
Limited.
NVH is an Australian incorporated company and via two 100% owned US subsidiaries is the owner of the Buena Vista
Iron Project.
The consideration for the sale of NVH was as follows:
the assumption of debt held by NVH’s US subsidiaries which total not less than AUD800,000;
a cash payment of AUD100,000 at settlement;
a cash payment of:
(iv)
(v)
USD250,000 on commencement of iron ore production at 1Mtpa or greater from the existing Buena Vista
claims (Production Payment);
USD250,000 on the first anniversary of the Production Payment (First Anniversary Payment), subject to
production having been continuous during the period between the Production Payment and the First
Anniversary Payment; and
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SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ REPORT
(vi)
USD250,000 on the second anniversary of the Production Payment (Second Anniversary Payment),
subject to production having been continuous during the period between the Production Payment and
Second Anniversary Payment.
On 30 November 2016, shareholders approved, inter alia, the sale of the Buena Vista Iron Project, the Acquisition and 1
for 2 consolidation of the Company’s share capital (Consolidation).
On 16 December 2016, the Consolidation was completed.
On 23 January 2017, Mr McMullen resigned as a Director and Mr Howard Dawson was appointed as a Director.
On 7 February 2017, the Company disposed of its 100% interest in the Buena Vista Iron Project and acquired 100% of
the SportsHero business.
In addition, the Company raised AUD3,202,000 pursuant to the issue of 64,040,000 ordinary shares at an issue price of
AUD0.05 per share, all convertible notes on issue were converted into 8,475,000 ordinary shares and 12,500,000
ordinary shares were issued to Sunshore Holdings Pty Limited.
On 29 March 2017, the Company announced the appointment of Australian cricketing legend, Mr Ian Chappell as the
Company’s cricket ambassador. Pursuant to the appointment, the Company issued 1,000,000 ordinary fully paid shares
and 4,000,000 performance rights.
On 10 April 2017, Mr Tom Lapping was appointed as a Director following the retirement of Mr Howard Dawson.
On 27 April 2017, the Company announced the appointment of Mr Dharpan Randhawa as the Company’s Commercial
Strategy Advisor. Pursuant to the appointment, the Company issued 500,000 ordinary fully paid shares and 4,000,000
performance rights.
On 27 April 2017, 1,000,000 shares were issued Mr Ian Chappell.
On 12 May 2017, the Company announced the establishment of a strategic partnership with Spartan Sporting Goods
(Spartan). In accordance with the partnership, Spartan was appointed as the Company’s official sports equipment
partner.
On 9 June 2017, 500,000 shares were issued following the conversion of 500,000 performance rights held by Mr
Randhawa.
On 29 June 2017, Mr Higginson was appointed as Chair of the Company.
Future developments
Likely future developments in the operations of the Group are referred to in the Chairman’s Letter and Operations
Report. Other than that referred to in this report, further information as to likely developments in the operations of the
Group and expected results of those operations would, in the opinion of the Directors, be speculative and prejudicial to
the interests of the Group and its shareholders.
Subsequent events
On 4 September 2017, Mr Tom Lapping was appointed as the Company’s CEO.
On 26 September 2017, the Company announced the forming of a strategic partnership with YuuZoo Corporation
(YuuZoo), whereby YuuZoo has been appointed as SportsHero Limited’s Official African Marketing Partner. This
partnership gives SportsHero access to in excess of 100 million African football (soccer) fans.
In Africa, YuuZoo has signed on dominant Nigerian broadcaster, the Nigerian Television Authority (NTA), as a
collaboration partner. NTA runs the largest television network in Nigeria with stations in several parts of the country. NTA
and YuuZoo air a prime time television show every Wednesday and will use this medium to promote African continent
competitions on SportsHero Limited’s platform. This powerful broadcast platform, combined with the popularity of the
show will help drive engagement and new users on the SportsHero platform.
All revenues generate from the YuuZoo partnership will be shared equally between YuuZoo and SportsHero Limited.
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SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ REPORT
Financial position
The Group’s working capital, being current assets less current liabilities, was USD1,267,216 as at 30 June 2017 (2016:
USD347,631).
In the Directors’ opinion there are reasonable grounds to believe that the Group will be able to pay its debts as and when
they become due and payable.
Proceedings on behalf of the Group
No person has applied for leave of court to bring proceedings on behalf of the Group or intervene in any proceedings to
which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of those
proceedings.
Additional information
The earnings of the consolidated entity for the five years to 30 June 2017 are summarised below:
Sales revenue
EBITDA
EBIT
Profit after income tax
2017
USD
2016
USD
2015
USD
2014
USD
2013
USD
9,113
(3,823,784)
(4,264,060)
(4,266,644)
-
(151,228)
(151,260)
(151,260)
-
-
-
-
-
-
-
-
-
-
-
-
The factors that are considered to affect total shareholders return are summarised below:
Share price at financial year end (US cents)
Total dividends declared (US cents per share)
Basic loss per share (US cents per share)
3.1
-
3.85
-
-
-
-
-
-
-
-
-
-
-
-
2017
2016
2015
2014
2013
No audited information exists prior to the 2016 financial year due to the changes in the controlled entities as a result of the
reverse acquisition that occurred in the 2017 financial year.
Remuneration report (Audited)
Details of Remuneration for the Year Ended 30 June 2017
Details of the remuneration for each Director and the key management personnel of the Group during the year are set
out in the following tables.
The Board’s policy for determining the nature and amount of remuneration for Directors and senior executives of the
Group is as follows:
All executives receive a base salary (which is based on factors such as length of service and experience).
The Board reviews executive packages annually by reference to the Group’s performance, executive
performance and comparable information from industry sectors.
All remuneration paid to Directors and executives is valued at the cost to the Group and expensed. Options are
valued using the Black-Scholes methodology.
Remuneration of non-executive Directors at market rates for time, commitment and responsibilities.
The Board determines payments to the non-executive Directors and reviews their remuneration annually, based on
market practice, duties and accountability. Independent external advice is sought if required.
At the 2016 Annual General Meeting, 90% of the eligible votes received supported the adoption of the remuneration
report for the year ended 30 June 2016. The Company did not receive any specific feedback at the Annual General
Meeting regarding its remuneration practices.
The key management personnel of the Group include the Directors and Company Secretary. There were no other
persons considered key management personnel as defined in AASB 124 Related Party Disclosures.
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SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ REPORT
The tables below show the 2016 and 2017 remuneration of the Directors and other key management personnel:
2016
Short-term
Post-
employment
Share-based
payments
Salary & fees
Superannuation
Shares
Total
Chairman
Mick McMullen1
Non-Executive Directors
Christopher Green
Andrew Brice2
Taj Singh2
Heath Rushing2
Donald Pattalock2
Arden Morrow2
Total key management
personnel compensation
136,556
-
-
-
-
-
-
136,556
-
-
-
-
-
-
-
-
45,519
182,075
-
6,373
6,373
6,373
6,373
6,373
-
6,373
6,373
6,373
6,373
6,373
77,384
213,940
Value of
options
as a %
0%
-
0%
0%
0%
0%
0%
0%
1 USD45,519 was settled through the issuance of shares at an issue price of AUD0.05 per share on 27 October
2015. The balance of USD136,556 remained unpaid as at 30 June 2016
2 USD6,373 was settled through the issuance of shares at an issue price of AUD0.05 per share on 27 October
2015.
2017
Short-term
Post-
employment
Share-based
payments
Salary & fees
Superannuation
Shares
Total
Chairman
Michael Higginson
Directors
Christopher Green
Tom Lapping
Mick McMullen
Howard Dawson
Total key management
personnel compensation
79,432
17,642
18,296
-
11,318
126,688
-
-
-
-
-
-
-
-
-
-
-
-
79,432
17,642
18,296
-
11,318
126,688
Value of
options
as a %
0%
0%
0%
0%
0%
0%
Performance Shares as a Proportion of Total Remuneration
There were no performance shares issued during the year ended 30 June 2017 (2016: nil).
Ordinary Shares held by Directors
Ordinary Shares
2017
Directors
M McMullen
M Higginson
C Green
T Lapping
H Dawson
Balance at
beginning of
year
5,710,000
41,668
-
-
50,789
5,802,457
1 for 2
consolidation
Allotted during
the year
Purchased
during the year
Sold during the
year
Balance at
end of year
(2,855,000)
(20,834)
-
(1,300,000)
(25,395)
(4,201,229)
-
-
-
13,082,143
2,057,142
15,139,285
-
-
-
-
260,000
260,000
(2,855,000)
-
(25,394)
(2,880,394)
-
20,834
-
11,782,143
2,317,142
14,120,119
Company Performance, Shareholder Wealth and Director and Executive Remuneration
The remuneration policy has been tailored to increase goal congruence between shareholders, Directors and executives.
The achievement of this aim has been through the issue of options to Directors and executives to encourage the
alignment of personal and shareholder interests.
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SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ REPORT
Executive and non-executive Directors and other key management personnel may be granted options or performance
rights over ordinary shares.
The recipients of options or performance rights are responsible for growing the Company and increasing shareholder
value. If they achieve this goal the value of the options or performance rights granted to them will also increase.
Therefore, the options or performance provide an incentive to the recipients to remain with the Company and to continue
to work to enhance the Company’s value.
Options Granted as Part of Remuneration for the Year Ended 30 June 2017
2017
Directors
Balance at
beginning of
year
Granted as
Allotted
compensation Exercised
Expired
Other
changes
Balance at
end of
year
Option movements for the year
M McMullen
M Higginson
C Green
T Lapping
H Dawson
Total
20,834
41,667
-
-
-
62,501
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(20,834)
(41,667)
-
-
-
(62,501)
-
-
-
-
-
-
-
-
-
-
-
-
Performance Options as a Proportion of Total Remuneration
The value of performance options issued during the year to key management personnel as a percentage of the total
remuneration paid to key management personnel was 0% (2016: 0%).
Employment Contracts of Directors and Senior Executives
As of 30 June 2017 there were no formal contracts for Non-Executive Directors.
Messrs Lapping and Green are paid fees at the rate of AUD25,000 per annum.
Mr Higginson, as Chair of the Company, is paid fees at the rate of AUD50,000 per annum.
Share-based compensation
The issue of options and/or performance rights to Directors and executives is to encourage the alignment of personal
and shareholder returns. The intention is to align the objectives of Directors and executives with that of the business and
shareholders. In addition, all Directors and executives are encouraged to hold shares in the Company.
The Group has not paid bonuses to Directors or executives to date.
End of remuneration report
Share options
At the date of this report, the unissued ordinary shares of the Company under option are as follows:
Date of Expiry
Exercise Price
Number Under Option
31 Dec 2017
31 Dec 2017
30 Sept 2017
31 August 2019
AUD1.02
AUD1.24
AUD0.20
AUD0.05
30,000
30,000
4,697,940
72,000,000
During the financial year ended 30 June 2017, no SportsHero Limited shares were issued on the exercise of options
granted.
Since the end of the financial year no shares have been issued following the exercise of options.
Since the end of the financial year no options have been issued.
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SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ REPORT
No amounts are unpaid on any of the shares on issue.
No person entitled to exercise an option had or has any right by virtue of the option to participate in any share issue of
any other body corporate.
Indemnification
During the financial year, the Company did not pay premiums to insure the Directors and Company Secretary of the
Group.
Non-audit services
Fees amounting to USD31,748 (2016: nil) for non-audit services were paid/payable to the Group’s auditors during year.
Auditor’s independence declaration
The auditor’s independence declaration for the year ended 30 June 2017 has been received and immediately follows the
Directors’ Report.
Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of the
Company support and have adhered to the principles of sound corporate governance.
The Board recognises the recent recommendations of the Australian Securities Exchange Corporate Governance
Council, and considers that SportsHero Limited is in compliance with those guidelines which are of importance to the
commercial operation of a small cap company. The Group’s corporate governance statement and disclosures are
contained on the Company’s website at: http://sportshero.mobi/
This report is made in accordance with a resolution of the Directors.
Michael Higginson
Chairman
14
RSM Australia Partners
Level 32, 2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of SportsHero Limited for the year ended 30 June 2017, I
declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
(ii)
The auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
Any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 29 September 2017
DAVID WALL
Partner
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
STATEMENT OF FINANCIAL POSITION
As at 30 June 2017
Current assets
Cash and cash equivalents
Prepayments and other receivables
Total current assets
Non-current assets
Plant and equipment
Intangible asset
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share based payments reserve
Foreign currency translation reserve
Accumulated losses
Total equity
Consolidated
30 June
30 June
2017
USD
2016
USD
1,489,666
12,226
1,501,892
436,666
14,367
451,033
9,609
1,109
1,563,889
2,000,000
1,573,498
2,001,109
3,075,390
2,452,142
234,676
234,676
103,402
103,402
234,676
103,402
2,840,714
2,348,740
7,209,342
2,500,000
16,682
32,594
-
-
(4,417,904)
(151,260)
2,840,714
2,348,740
8
9
10
11
12
13
14
14
The above statement of financial position should be read in conjunction with the accompanying notes.
16
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2017
Consolidated
Period
from
9/03/2016
to
30/06/2016
USD
2017
USD
9,113
-
Note
3
4
5
(873,401)
(1,028,045)
(440,276)
(2,584)
16(d)
(1,931,224)
(227)
(76,951)
(74,277)
(32)
-
-
-
Income
Other revenue
Expenses
Administration expenses
Employee and consulting expenses
Depreciation and amortisation expense
Interest expense
Restructuring expense
Foreign exchange loss
Loss before income tax expense from continuing operations
(4,266,644)
(151,260)
Income tax expense
Loss after income tax expense from continuing operations
Loss after income tax expense for the year
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Total comprehensive loss for the year
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
7
6
6
6
-
-
(4,266,644)
(4,266,644)
(151,260)
(151,260)
32,594
-
(4,234,050)
(151,260)
(3.85)
(3.85)
-
-
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
17
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2017
Issued
Capital
Share
Based
Payments
Reserve
Foreign
Currency
Translation
Reserve
Accumulated
Losses
Total
Equity
USD
USD
USD
USD
USD
Consolidated
Note
Balance at 9/3/2016
Total comprehensive loss for the period
Performance rights issued during the
period
Shares issued during the period
Options issued during the period
Transaction costs
-
-
13
2,500,000
-
-
Balance at 30/06/2016
2,500,000
Balance at 01/07/2016
Total comprehensive loss for the year
Share issue for acquisition of subsidiary
Performance rights issued during the year
Shares issued during the year
Share based payments
Transaction costs
Balance at 30/06/2017
14
13
14
13
13
13
2,500,000
-
1,852,605
-
16,682
2,456,254
539,418
(138,935)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(151,260)
(151,260)
-
2,500,000
-
-
-
-
-
-
-
(151,260)
2,348,740
(151,260)
2,348,740
32,594
(4,266,644)
(4,234,050)
-
-
-
-
-
-
-
1,852,605
16,682
2,456,254
539,418
(138,935)
7,209,342
16,682
32,594
(4,417,904)
(2,840,714)
The above statement of equity should be read in conjunction with the accompanying notes.
18
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
STATEMENT OF CASH FLOWS
For the year ended 30 June 2017
Cash Flows from Operating Activities
Receipts from customers
Payments to suppliers
Interest received
Note
Consolidated
Period from
9/03/2016 to
30/06/2016
USD
-
2017
USD
612
(1,463,406)
(104,751)
8,501
-
Net cash flows used in operating activities
15
(1,454,293)
(104,751)
Cash Flows from Investing Activities
Payments for plant and equipment (note 10)
Cash received as part of acquisition
Net cash flows received / (used) in investing activities
Cash Flows from Financing Activities
Issue of new share capital (note 13)
Net movements in amounts due to related companies
Share issue transaction costs
Net cash provided by financing activities
Net increase in cash and cash equivalents
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the beginning of the year
(12,665)
78,629
65,964
2,456,254
-
(82,957)
2,373,297
984,968
68,032
436,666
(1,141)
-
(1,141)
500,000
42,558
-
542,558
436,666
-
-
Cash and cash equivalents at the end of the year
8
1,489,666
436,666
The above statement of cash flows should be read in conjunction with the accompanying notes
19
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
1. CORPORATE INFORMATION
The financial report of SportsHero Limited and its controlled entities (the “Group” or “consolidated entity”) for the
year ended 30 June 2017 was authorised for issue in accordance with a resolution of the Director’s on 29
September 2017.
SportsHero Limited (“SportsHero” or the “Company”) is a company limited by shares, incorporated in Australia, and
whose securities are publicly traded on the Australia Securities Exchange.
The nature of the operations and principal activities of the Group are described in the Director’s Report.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the material accounting policies adopted by the Group in the preparation of the
financial report. The accounting policies have been consistently applied, unless otherwise stated.
(a)
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act
2001, as appropriate for for-profit oriented entities. These financial statements also comply with International
Financial Reporting Standards as issued by the International Accounting Standards Board.
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of available-for-sale financial assets, financial assets and liabilities at fair value through profit or loss,
investment properties, certain classes of property, plant and equipment and derivative financial instruments.
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The
areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are
significant to the financial statements are disclosed in note 2(cc).
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated
entity only. Supplementary information about the parent entity is disclosed in note 17.
The report is presented in US dollars.
Acquisition accounting
On 7 February 2017, SportsHero Limited (formerly Nevada Iron Limited) completed the legal acquisition of
Sportshero Enterprise Pte Ltd (company incorporated in Singapore). The acquisition did not meet the definition of a
business combination in accordance with AASB 3 Business Combinations, with SportsHero Enterprise Pte Ltd
deemed to be the accounting acquirer. The acquisition has been treated using the principles of reverse acquisition
accounting. Effectively SportsHero Enterprise Pte Ltd has acquired the net assets and listing status of SportsHero
Limited.
Accordingly the financial statements of the SportsHero Limited have been prepared as a continuation of the
business and operations of SportsHero Enterprise Pte Ltd and the transaction measured at the fair value of the
equity instruments that would have been given by the controlled entity, SportsHero Enterprise Pte Ltd, to have
exactly the same percentage holding in the new structure at the date of acquisition.
The implications of the acquisition on the preliminary financial statements are as follows;
Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash flow.
The 30 June 2017 statements comprise 12 months of SportsHero Enterprise Pte Ltd and its subsidiaries
and the period from 7 February 2017 to 30 June 2017 for SportsHero Limited.
The 30 June 2016 comparative statements comprises the period from 9 March 2016 to 30 June 2016 of
SportsHero Enterprise Pte Ltd only.
20
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
Statement of Financial Position
The preliminary statement of financial position as at 30 June 2017 comprises of SportsHero Limited,
SportsHero Enterprise Pte Ltd and the other controlled entities listed in note 26.
The comparative statement of financial position at 30 June 2016 comprises SportsHero Enterprise Pte Ltd.
(b)
Statement of Compliance
The financial report complies with Australian Accounting Standards and International Financial Reporting
Standards.
(c)
Adoption of New and Revised Accounting Standards
The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board that are mandatory for the current reporting period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted.
Any significant impact on the accounting policies of the consolidated entity from the adoption of these Accounting
Standards and Interpretations are disclosed below. The adoption of these Accounting Standards and Interpretations
did not have any significant impact on the financial performance or position of the consolidated entity.
The following Accounting Standards and Interpretations are most relevant to the consolidated entity:
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces
AASB 117 'Leases' and for lessees will eliminate the classifications of operating leases and finance leases. Subject
to exceptions, a 'right-of-use' asset will be capitalised in the statement of financial position, measured as the
present value of the unavoidable future lease payments to be made over the lease term. The exceptions relate to
short-term leases of 12 months or less and leases of low-value assets (such as personal computers and small
office furniture) where an accounting policy choice exists whereby either a 'right-of-use' asset is recognised or lease
payments are expensed to profit or loss as incurred. A liability corresponding to the capitalised lease will also be
recognised, adjusted for lease prepayments, lease incentives received, initial direct costs incurred and an estimate
of any future restoration, removal or dismantling costs. Straight-line operating lease expense recognition will be
replaced with a depreciation charge for the leased asset (included in operating costs) and an interest expense on
the recognised lease liability (included in finance costs). In the earlier periods of the lease, the expenses associated
with the lease under AASB 16 will be higher when compared to lease expenses under AASB 117. However
EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results will be improved as the operating
expense is replaced by interest expense and depreciation in profit or loss under AASB 16. For classification within
the statement of cash flows, the lease payments will be separated into both a principal (financing activities) and
interest (either operating or financing activities) component. The consolidated entity is progressing with the
assessment to determine the impact of this standard on the financial performance and position of the consolidated
entity. The operating leases will be capitalised and corresponding lease liabilities and right to use assets will be
recorded on the statement of financial position.
AASB 15 Revenue from Contracts with Customers
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard provides
a single standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue
to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to
which the entity expects to be entitled in exchange for those goods or services. The standard will require: contracts
(either written, verbal or implied) to be identified, together with the separate performance obligations within the
contract; determine the transaction price, adjusted for the time value of money excluding credit risk; allocation of the
transaction price to the separate performance obligations on a basis of relative stand-alone selling price of each
distinct good or service, or estimation approach if no distinct observable prices exist; and recognition of revenue
when each performance obligation is satisfied. Credit risk will be presented separately as an expense rather than
adjusted to revenue. For goods, the performance obligation would be satisfied when the customer obtains control of
the goods. For services, the performance obligation is satisfied when the service has been provided, typically for
promises to transfer services to customers. For performance obligations satisfied over time, an entity would select
an appropriate measure of progress to determine how much revenue should be recognised as the performance
obligation is satisfied. Contracts with customers will be presented in an entity's statement of financial position as a
21
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
contract liability, a contract asset, or a receivable, depending on the relationship between the entity's performance
and the customer's payment. Sufficient quantitative and qualitative disclosure is required to enable users to
understand the contracts with customers; the significant judgments made in applying the guidance to those
contracts; and any assets recognised from the costs to obtain or fulfil a contract with a customer. The consolidated
entity will adopt this standard from 1 July 2018. The consolidated entity has made an assessment and determined
that this standard will not have significant impact on the financial performance or position of the Company.
AASB 9 Financial Instruments
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces
all previous versions of AASB 9 and completes the project to replace IAS 39 'Financial Instruments: Recognition
and Measurement'. AASB 9 introduces new classification and measurement models for financial assets. A financial
asset shall be measured at amortised cost, if it is held within a business model whose objective is to hold assets in
order to collect contractual cash flows, which arise on specified dates and solely principal and interest. All other
financial instrument assets are to be classified and measured at fair value through profit or loss unless the entity
makes an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not
held-for-trading) in other comprehensive income ('OCI'). For financial liabilities, the standard requires the portion of
the change in fair value that relates to the entity's own credit risk to be presented in OCI (unless it would create an
accounting mismatch). New simpler hedge accounting requirements are intended to more closely align the
accounting treatment with the risk management activities of the entity. New impairment requirements will use an
'expected credit loss' ('ECL') model to recognise an allowance. Impairment will be measured under a 12-month ECL
method unless the credit risk on a financial instrument has increased significantly since initial recognition in which
case the lifetime ECL method is adopted. The standard introduces additional new disclosures. The consolidated
entity will adopt this standard from 1 July 2018. The Company has made an assessment and determined that this
standard will have little to no impact on the entity as it does not have any financial instruments
Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of SportsHero Limited
as at 30 June 2017 and the results of all subsidiaries for the year then ended.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an
entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries
are fully consolidated from the date on which control is transferred to the consolidated entity. They are de-
consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated
entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the
impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership
interest, without the loss of control, is accounted for as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the non-controlling interest acquired is recognised
directly in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or
loss and other comprehensive income, statement of financial position and statement of changes in equity of the
consolidated entity. Losses incurred by the consolidated entity are attributed to the non-controlling interest in full,
even if that results in a deficit balance.
(d)
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is current when: it is expected to be realised or intended to be sold or consumed in normal operating
cycle; it is held primarily for the purpose of trading; it is expected to be realised within twelve months after the
reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a
liability for at least twelve months after the reporting period. All other assets are classified as non-current.
22
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
A liability is current when: it is expected to be settled in normal operating cycle; it is held primarily for the purpose of
trading; it is due to be settled within twelve months after the reporting period; or there is no unconditional right to
defer the settlement of the liability for at least twelve months after the reporting period. All other liabilities are
classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
(e)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker is responsible for allocating resources and assessing
performance of any operating segments.
(f)
Revenue
Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent it is
probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following
specific recognition criteria must also be met before revenue is recognised.
(g)
Interest revenue
Revenue is recognised as interest accrued using the effective interest method. This is a method of calculating the
amortised costs of a financial asset and allocating the interest revenue 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.
All revenue is stated net of Goods and Services Tax.
(h)
Service revenue
Revenue from rendering of services that are not significant transactions is recognised as the services
are provided or when the significant acts have been completed.
(i)
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank and short-term deposits
with an original maturity of three months or less that are readily convertible to known amounts of cash and which
are subject to an insignificant risk of changes in value.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents
as defined above. The Group does not have any bank overdraft facilities.
(j)
Trade and other receivables
Trade and other receivables are recognised and carried at original invoice amount less an allowance for
impairment. Trade receivables are non-interest bearing.
(k)
Plant and equipment
Plant and equipment is stated at historical cost less depreciation and any accumulated impairment losses.
Historical cost includes expenditure that is directly attributable to the acquisition of these items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of
the item can be measured reliably. All other repairs and maintenance are charged to the statement of
comprehensive income during the financial period in which they are incurred.
Depreciation is calculated using the straight-line method to allocate their cost over their estimated useful lives. The
expected useful lives are.
-
Equipment - 3 years
The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at
each financial year end.
23
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
(l)
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair
value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite
life intangible assets are not amortised and are subsequently measured at cost less any impairment. Finite life
intangible assets are subsequently measured at cost less amortisation and any impairment. The gains or losses
recognised in profit or loss arising from the derecognition of intangible assets are measured as the difference
between net disposal proceeds and the carrying amount of the intangible asset. The method and useful lives of
finite life intangible assets are reviewed annually. Changes in the expected pattern of consumption or useful life are
accounted for prospectively by changing the amortisation method or period.
Software
Significant costs associated with software are deferred and amortised on a straight-line basis over the period of
their expected benefit, being their finite life of 2 years.
(m)
Impairment of assets
At each reporting date, the Consolidated Entity reviews the carrying values of its tangible and intangible assets to
determine whether there is any indication that those assets have been impaired. If such an indication exists, the
recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is
compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is
expensed to the statement of comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the Consolidated Entity
estimates
the cash-generating unit
recoverable amount of
the asset belongs.
to which
the
(n)
Financial instruments
Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the
related contractual rights or obligations exist. Subsequent to initial recognition, these instruments are measured as
set out below.
At each reporting date, the directors assess whether there is objective evidence that a financial instrument has
income.
been
the statement of comprehensive
losses are
Impairment
recognised
impaired.
in
(o)
Derecognition and disposal
An item of plant and equipment is derecognised upon disposal or when no further future economic benefits are
expected from its use.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are
included in the statement of comprehensive income. When revalued assets are sold, it is Group policy to transfer
the amounts included in other reserves in respect of those assets to retained earnings.
(p)
Trade and other payables
Trade payables and other payables are carried at the transaction price minus principal repayments. They represent
liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and
arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and
services.
(q)
Provisions
Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of
a past event, it is probable the consolidated entity will be required to settle the obligation, and a reliable estimate
can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the
consideration required to settle the present obligation at the reporting date, taking into account the risks and
uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted using a
current pre-tax rate specific to the liability. The increase in the provision resulting from the passage of time is
recognised as a finance cost.
24
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
(r)
Employee entitlements
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to
be settled within 12 months of the reporting date are recognised in current liabilities in respect of employees'
services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are
settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting
date are recognised in non-current liabilities, provided there is an unconditional right to defer settlement of the
liability. The liability is measured as the present value of expected future payments to be made in respect of
services provided by employees up to the reporting date using the projected unit credit method. Consideration is
given to expected future wage and salary levels, experience of employee departures and periods of service.
Expected future payments are discounted using market yields at the reporting date on national government bonds
with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares that are provided to employees in
exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services,
where the amount of cash is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently
determined using an appropriate option pricing model that takes into account the exercise price, the term of the
option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the
expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions
that do not determine whether the consolidated entity receives the services that entitle the employees to receive
payment. No account is taken of any other vesting conditions.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the
cancelled and new award is treated as if they were a modification.
(s)
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement
and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific
asset or assets and the arrangement conveys a right to use the asset.
(t)
Income tax
The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax
expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using
applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax
liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant
taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during
the year as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or
loss when the tax relates to items that are credited or charged directly to equity.
25
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where
amounts have been fully expensed but future tax deductions are available. No deferred income tax will be
recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no
effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the
asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of the
reporting period. Their measurement also reflects the manner in which management expects to recover or settle the
carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it
is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be
utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint
ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary
difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that
net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred
tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and
liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different
taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective
asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are
expected to be recovered or settled.
Tax consolidation
SportsHero Limited and its wholly-owned subsidiaries have not formed an income tax consolidated group under tax
consolidation legislation.
(u)
Equity based payments
The Group provides benefits to its Directors and employees in the form of share-based payments, whereby
Directors and employees render services in exchange for options to acquire shares or rights over shares (equity-
settled transactions).
The cost of these equity-settled transactions is measured by reference to the fair value to the Group of the equity
instruments at the date at which they were granted. The fair value is determined using the Black-Scholes model,
taking into account the terms and conditions upon which the options were granted.
The cost of equity-settled transactions is recognised as an expense, together with a corresponding increase in
equity, on a straight-line basis, over the period in which the vesting and/or service conditions are fulfilled (the
vesting period), ending on the date on which the relevant Directors and employees become fully entitled to the
options (the vesting date).
At each subsequent reporting date until vesting, the cumulative charge to the statement of comprehensive income
reflects:
a.
b.
c.
the grant date fair value of the options;
the current best estimate of the number of options that will ultimately vest, taking into account such
factors as the likelihood of employee turnover during the vesting period and the likelihood of vesting
conditions being met, based on best available information at balance date; and
the extent to which the vesting period has expired.
The charge to the statement of comprehensive income for the period is the cumulative amount as calculated above
less the amounts already charged in previous periods. There is a corresponding entry to equity.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not
been modified. An additional expense is recognised for any modification that increases the total fair value of the
share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of
modification.
26
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
If an equity-settled award is cancelled, it is treated as if it has vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately. However, if a new award is substituted for the
cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new
award are treated as if they were a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of diluted
earnings per share.
(v)
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net
of tax, from the proceeds.
(w) Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the company.
(x)
Earnings per share
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any
costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average
number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:
-
-
-
costs of servicing equity (other than dividends);
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have
been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the
dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and
dilutive potential ordinary shares, adjusted for any bonus element.
(y)
Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
- where the GST incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of
the expense item as applicable; and
receivables and payables are stated with the amount of GST included.
-
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows
arising from investing and financial activities, which are recoverable from, or payable to, the taxation authority, are
classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
(z)
Foreign currency transactions and balances
The financial statements are presented in US dollars, which is SportsHero Limited's functional and presentation
currency.
Foreign currency transactions
Foreign currency transactions are translated into US dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in profit or loss.
27
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
Foreign operations
The assets and liabilities of foreign operations are translated into US dollars using the exchange rates at the
reporting date. The revenues and expenses of foreign operations are translated into US dollars using the average
exchange rates, which approximate the rate at the date of the transaction, for the period. All resulting foreign
exchange differences are recognised in other comprehensive income through the foreign currency reserve in
equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed
of.
(aa) Comparative information
The comparative financial information presented as of and for the period from 9 March 2016 to 30 June 2016 is for
SportsHero Enterprise Pte Ltd, prior to the reverse acquisition that occurred on 7 February 2017.
Where required by accounting standards comparative figures have been adjusted to conform to changes in
presentation for the current financial year. The comparative financial information presented as of and for period
from 9 March 2016 to 30 June 2016 is for SportsHero Enterprise Pte Ltd, prior to the reverse acquisition that
occurred on 7 February 2017.
(bb) Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts in the financial statements. Management continually evaluates its judgements and
estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its
judgements, estimates and assumptions on historical experience and on other various factors, including
expectations of future events, management believes to be reasonable under the circumstances. The resulting
accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities (refer to the respective notes) within the next financial year are discussed below.
Estimation of useful lives of assets
The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges for
its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a
result of technical innovations or some other event. The depreciation and amortisation charge will increase where
the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have
been abandoned or sold will be written off or written down.
Impairment of non-financial assets and intangible assets
The consolidated entity assesses impairment of non-financial assets and intangible assets at each reporting date
by evaluating conditions specific to the consolidated entity and to the particular asset that may lead to impairment. If
an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value less costs
of disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions.
3. Other revenue
Interest revenue
Sundry income
4.
Administration expenses
Administration includes the following expenses:
Advertising and marketing
Professional fees
Rent
Sports subscription services
28
Consolidated
Period from
9/03/2016 to
30/06/2016
USD
-
-
-
2017
USD
8,501
612
9,113
179,376
62,015
57,443
38,710
36,143
74,277
3,457
10,500
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
5.
Employee and consulting expenses
Employee and consulting includes the following expenses:
Salary and wages
Share based payments to consultants
Performance rights issued
6.
Loss per share
The following reflects the loss used in the basic and diluted loss per
share computations.
Loss used in calculating earnings per share
For basic and diluted earnings per share:
Loss for the year attributable to ordinary shareholders
Weighted average number of shares
Consolidated
Period from
9/03/2016 to
30/06/2016
2017
471,945
539,418
16,682
1,028,045
74,277
-
-
74,277
4,266,644
151,260
2017
No. of shares
2016
No. of shares
Weighted average number of ordinary shares for basic and diluted loss
per share
110,723,534
6,000,000
Loss per share
Basic loss per share (US cents)
Diluted loss per share (US cents)
3.85
3.85
2.52
2.52
(i) Anti-dilutive options on issue are excluded from the dilutive earnings per share calculation.
(ii) Other than the issue of the securities disclosed in note 13, there has been no other transactions
involving ordinary shares or potential ordinary shares that would significantly change the number of
ordinary shares or potential ordinary shares outstanding between the reporting date and the date of
completion of these financial statements.
7.
Income taxes
Consolidated
2017
USD
2016
USD
(a)
Income tax recognised in profit or loss
Prima facie tax benefit on operating loss before income tax at 27.5%
(2016: 28.5%)
(1,173,327)
(43,109)
Tax effect of amounts which are not deductible (taxable) in
calculating taxable income:
Other non-deductible items
Unrecognised deferred tax asset attributable to tax losses and
temporary differences
Income tax attributable to operating loss
688,180
43,109
485,187
-
-
-
The consolidated entity has USD5,686,914 (2016: USD5,201,767) tax losses arising in Australia that are
available indefinitely for offset against future profit of the company in which the losses arose.
The potential deferred tax asset of USD1,811,401 (2016: USD1,430,486), arising from tax losses and
temporary differences (as disclosed above), has not been recognised as an asset because recovery of tax
losses and temporary differences is not considered probable given the development stage of the Company’s
app.
29
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
The potential deferred tax asset will only be obtained if:
the Group derives future assessable income of a nature and an amount sufficient to enable the benefit
to be realised;
the Group continues to comply with the conditions for deductibility imposed by tax legislation; and
no changes in tax legislation adversely affect the Group in realising the benefit from the related
deduction for the losses.
In addition, the subsidiary SportsHero Enterprise Pte Ltd has tax losses that are a potential deferred tax
asset of USD141,858 SportsHero Enterprise Pte Ltd will be taxed independently in Singapore.
8.
Cash and cash equivalents
Cash at bank
9.
Trade and other receivables
Other receivables
Credit Risk
Consolidated
2017
USD
1,489,666
1,489,666
2016
USD
436,666
436,666
12,226
12,226
14,367
14,367
The maximum exposure to credit risk at balance date is the carrying amount (net of provision of doubtful debts) of
those assets as disclosed in the statement of financial position and notes to the financial statements. The Group
has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where
appropriate, as a means of mitigating the risk of financial loss from defaults. The Group’s exposure and the credit
ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded are
spread amongst approved counterparties.
10. Property, plant and equipment
Equipment – at cost
Less: Accumulated depreciation
Consolidated
Balance as at 9 March 2016
Additions
Depreciation expense
Balance as 30 June 2016
Balance at 1 July 2016
Additions
Depreciation expense
Balance as 30 June 2017
30
Consolidated
2017
USD
13,806
(4,197)
9,609
2016
USD
1,141
(32)
1,109
Equipment
USD
-
1,141
(32)
1,109
1,109
12,665
(4,165)
9,609
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
11.
Intangible assets
Software – at cost
Additions –Software rights
Less: Accumulated amortisation
Consolidated
Balance as at 9 March 2016
Additions
Amortisation expense
Balance as 30 June 2016
Balance at 1 July 2016
Additions
Amortisation expense
Balance as 30 June 2017
Consolidated
2017
USD
2,000,000
-
(436,111)
2016
USD
-
2,000,000
-
1,563,889
2,000,000
Software
USD
-
2,000,000
-
2,000,000
2,000,000
-
(436,111)
1,563,889
The intangible assets represent the “SportsHero” app, an internally developed real-time fantasy sports and social
prediction platform mobile application, which was acquired in the prior year from MyHero Limited.
12. Trade and other payables
Current Payables
Trade payables
Accrued expenses
2017
USD
198,046
36,630
2016
USD
42,558
60,844
234,676
103,402
(i) Due to the short term nature of these payables, their carrying value is assumed to approximate their fair
value.
(ii) Trade payables are non-interest bearing.
31
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
13. Contributed Equity
(a) Share capital
2017
Number
2017
USD
2016
Number
2016
USD
Ordinary fully paid shares
222,841,657 7,209,342
6,000,000
2,500,000
(b) Movements in ordinary shares
Opening balance
Subscribers shares issued at USD0.50
per share
Shares issued at USD0.40 per share
Deemed consideration
Issue of public offering
Transaction cost on share issue
Share-based payments
Shares issued at USD0.038 per share *
Shares issued at USD 0.03 per share **
Shares issued at USD0.03 per share **
Shares issued at USD0.03 per share **
Total share-based payments
(i)
(ii)
(iii)
(iv)
(iv)
(v)
(vi)
(vii)
(viii)
6,000,000 2,500,000
-
-
-
-
-
-
33,826,657 1,852,605
168,515,000 2,456,254
(138,935)
-
1,000,000
5,000,000
-
-
-
500,000
2,000,000
-
-
-
12,500,000
1,000,000
500,000
500,000
479,438
29,940
14,970
15,070
14,500,000
539,418
-
-
-
-
-
-
-
-
-
-
222,841,657
7,209,342
6,000,000
2,500,000
* Issue price AUD0.05 translated to USD at grant date
** Issue price AUD0.04 translated to USD at grant date
(i) On 9 March 2016, being the date of incorporation, Sportshero Enterprise Pte Ltd issued 1,000,000 shares at
USD0.50 per share.
(ii) During the period ended 30 June 2016, 5,000,000 ordinary shares of no par value were issued at USD0.40 per
share in consideration for the acquisition of intangible assets pertaining to the SportsHero business from MyHero
Limited.
(iii) On 7 February 2017, the Company acquired all of the issued capital of SportsHero Enterprise Pte Ltd (note 16).
(iv) On 7 February 2017, the Company issued a total of 168,515,000 ordinary shares as follows:
64,040,000 ordinary shares, at an issue price of AUD0.05 per share, to raise AUD3,202,000 (before
costs);
96,000,000 ordinary shares in consideration for the acquisition of 100% of the issued share capital of
Sportz Hero Pty Limited and SportsHero Enterprise Pte Ltd; and
8,475,000 ordinary shares to convert 8,475,000 convertible notes.
(v) On 7 February 2017, the Company issued 12,500,000 ordinary shares at an issue price of AUD0.05 per share to
Sunshore Holdings Pty Limited.
(vi) On 27 April 2017, the Company issued 1,000,000 ordinary shares at AUD0.04 per share as a share-based payment
to an external consultant.
(vii) On 27 April 2017, the Company issue 500,000 ordinary shares at AUD0.04 per share per share as a share-based
payment to an external consultant.
(viii) On the 9 June 2017, the Company issue 500,000 ordinary shares at AUD0.04 per share following the conversion of
500,000 performance rights.
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and
the Company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
When managing capital, management’s objective is to ensure the entity continues as a going concern as well as to
maintain optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain a
capital structure that ensures the lowest cost of capital available to the entity.
32
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
In order to maintain or adjust the capital structure, the entity may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares, enter into joint ventures or sell assets.
The entity does not have a defined share buy-back plan.
No dividends were paid in 2017 (2016: nil) and no dividends are expected to be paid in 2018.
There is no current intention to incur debt funding on behalf of the Group
The Group is not subject to any externally imposed capital requirements.
14. Reserves
Reserves
Share-based payments reserve
As at 1 July 2017
Share based payments
Expired options
As at 30 June 2017
Foreign currency reserve
As at 1 July 2017
Foreign currency translation
As at 30 June 2017
Nature and purpose of reserves
Share-based payment reserve
Consolidated
2017
USD
2016
USD
-
16,682
-
16,682
-
32,594
32,594
-
-
-
-
-
-
-
The share-based payments reserve records the value of share options and performance rights issued by the Group.
Foreign currency reserve
The reserve is used to recognise exchange differences arising from translation of the financial statements of international
operations to US dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign
operations.
15. Notes to Statement of Cash Flows
(a) Reconciliation of net cash used in operating activities to operating loss after income tax
Consolidated
2017
USD
Period from
9/03/2016 to
30/06/2016
USD
Operating loss after tax
(4,266,644)
(151,260)
Add non-cash items:
Depreciation and amortisation
Share-based payments expense
Restructuring costs
Changes in net assets and liabilities:
Decrease / (increase) in receivables
(Increase)/decrease in payables
Net cash flow used in operating activities
440,276
556,100
1,931,224
2,141
(117,390)
(1,454,293)
32
-
-
(14,367)
60,844
(104,751)
33
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
(b) Non-cash financing and investing activities
Share based payment in lieu of directors fees
Shares issued for provision of services
16. Acquisition and Restructuring cost
Consolidated
2017
USD
-
556,100
556,100
2016
USD
-
-
-
On 7 February 2017, SportsHero Limited issued 96,000,000 fully paid ordinary shares and 72,000,000 free and
attaching options to the shareholders of Sportz Hero Pty Ltd and SportsHero Enterprise Pte Ltd pursuant to an
agreement to acquire the entire issued capital of SportsHero Enterprise Pte Ltd (incorporated in Singapore).
Under the Australian Accounting Standards, SportsHero Enterprise Pte Ltd was deemed to be the accounting
acquirer in this transaction. The acquisition has been accounted for as a share based payment by which
SportsHero Enterprise Pte Ltd acquires the net assets and listing status of SportsHero Limited.
(a) Deemed Consideration
The purchase consideration comprised the issue of 96,000,000 shares and 72,000,000 free and attaching options
in SportsHero Limited (legal parent) to the shareholders of Sportz Hero Pty Ltd and SportsHero Enterprise Pte Ltd.
Quoted share price on 7 February 2017
Shares on issue at acquisition date
Deemed consideration
Deemed Consideration - translated to USD at acquisition date
(b) Deemed SportsHero Limited Issued Capital
SportsHero Limited share capital on issue at acquisition date
Elimination of SportsHero Limited issued capital
Deemed consideration as per note (a)
Acquired share capital of Sportz Hero Pty Ltd and SportsHero Enterprise Pte Ltd
Shares issued to Sunshore Holdings Pty Ltd
Capital raising
Total SportsHero Limited share capital on 7 February 2017
(c) Fair value of Assets and Liabilities Acquired
Cash and cash equivalents
Total Assets
Trade and Other payables
Total Liabilities
Net liabilities
(d) Restructuring Expense
Deemed consideration
Less: net liabilities of SportsHero Limited on acquisition date – 7 February 2017
Excess of consideration provided over net assets at acquisition date – 7 February
2017, being restructuring expenses
34
AUD0.05
48,301,657
AUD2,415,083
1,852,605
USD
33,087,744
(33,087,744)
1,852,605
2,456,254
479,438
(138,935)
4,649,362
USD
2,590,861
2,590,861
2,669,480
2,669,480
(78,619)
(1,852,605)
(78,619)
(1,931,224)
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
17.
Parent Information
ASSETS
Current assets
Non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
TOTAL LIABILITIES
Parent
2017
USD
2,092,945
-
2,092,945
2016
USD
187,389
173,576
360,965
47,322
47,322
487,158
487,158
NET ASSETS/ (LIABILITIES)
2,045,623
(126,193)
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
Loss for the year
Total comprehensive loss
4,709,342
(17,974)
(2,645,745)
28,226,627
182,096
(28,534,917)
2,045,623
(126,194)
(2,645,745)
(4,446,315)
(2,645,745)
(4,446,315)
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2017 and 30 June 2016.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment at as 30 June 2017 and 30
June 2016.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed
in note 2.
35
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
18. Related Party Transactions
(a) Directors and Specified Executives
The names and positions held by key management personnel in office at any time during the year are:
M Higginson
T Lapping
C Green
M McMullen
H Dawson
Non-Executive Director (appointed 21 June 2016) and Chair (appointed 29 June 2017)
Non-Executive Director (appointed 10 April 2017)
Non-Executive Director
Chairman (resigned 23 January 2017)
Non-Executive Director (appointed 23 January 2017, retired 10 April 2017)
All of the above persons were key management personnel during the year ended 30 June 2017.
(b) Key management personnel remuneration
Short-term employee benefits
Share based payments
(c) Payables to key management personnel
Consolidated
Period from
9/03/2016 –
30/06/2016
USD
22,500
-
22,500
2017
USD
126,688
-
126,688
Amounts payable to directors and director related entities at
the end of the financial year, included in current liabilities
6,833
-
(d) Other transactions with key management personnel
During the year the Company paid rent of USD1,433 (AUD1,900) to Mr Higginson for the provision of the
Company’s registered and principal office.
During the year, the Company paid rent of USD10,587 (AUD14,033) to Discovery Capital Limited (a
company related to Mr Dawson) for the provision of an operations office. In addition, on 21 November
2016, Discovery Capital Limited lent the Company USD53,466 (AUD72,974) at an interest rate of 0.75%
per month.
On 17 February 2017, the Company repaid the loan, plus interest of USD1,187 (AUD1,574).During the
year, the Company incurred the following fees to the following Director related entity for the provision of
consulting services: Howard Dawson – Discovery Capital Limited USD11,317 (AUD15,000)
There were no other sale or purchase related transactions between the Group and key management
personnel during the year ended 30 June 2017 (2016: nil).
(e) Other transactions with related parties
There were no other transactions with related parties through the year.
Other Entities
There were no other transaction with other entities.
36
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
19. Equity-based payments
Recognised share-based payment expenses
Share based payments for services rendered
Performance rights issued (a)
Consolidated
2017
USD
2016
USD
539,418
16,682
556,100
-
-
-
Employee share option plan
The Company has established an Employee Share Option Plan that allows for share options to be granted
to eligible employees and officers of the Company. The number of share options that can be issued under
the plan cannot exceed 5% of the total number of shares on issue. The terms and conditions of the share
option issued under the plan are at the discretion of the Board, however, the maximum term of the share
option is five years.
(a) Performance rights
The performance rights were granted at no consideration, do not have an exercise price and will lapse if the
vesting conditions are not met. The 2 vesting conditions are:
i)
ii)
iii)
iv)
v)
Issue of 1,000,000 shares will be issued based on the consultant engaged as an ambassador and
SportsHero Limited achieving 500,000 active users on or before 12 months
the
commencement date ( 1 April 2017)
Issue of 1,000,000 shares will be issued based on the consultant engaged as an ambassador and
SportsHero Limited achieving 1,000,000 active users on or before 24 months from the
commencement date ( 1 April 2017)
Issue of 1,000,000 shares will be issued based on the consultant engaged as an ambassador and
SportsHero Limited achieving 1,500,000 active users on or before 36 months from the
commencement date ( 1 April 2017)
Issue of 1,000,000 shares will be issued based on the consultant engaged as an ambassador as at
1 April 2020
Issue of 500,000 shares upon execution of an acceptable agreement with the ambassador or
200,000 shares upon agreement with each tier 2 sponsorship company (up to 4,000,000 shares)
from
Set out below are performance rights granted
Performance rights
i
ii
iii
iv
v
Number
Grant Date
Expiry Date
1,000,000
1,000,000
1,000,000
1,000,000
4,000,000*
1/4/2017
1/4/2017
1/4/2017
1/4/2017
27/3/2017
1/4/2018
1/4/2019
1/4/2020
1/4/2020
27/3/2019
Share price at grant date ** USD0.03
USD0.03
USD0.03
USD0.03
USD0.03
*500,000 performance rights were exercised on 9 June 2017
**Share price of AUD0.04 translated into USD at grant date
If all the performance rights ultimately vest upon the satisfaction of both of the performance conditions, the
consolidated entity will recognise a total expense of AUD184,000 (expensed proportionately over the vesting
period).
37
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
(b) Options
In the prior year equity based payments were issued to key management personal, company secretary and
strategic consultants. In the current year 72,000,000 free and attaching options were issued to the
shareholders of Sportz Hero Pty Ltd.
2017
Weighted
Average
Exercise
Price
USD
-
1.01
0.144
0.038
Number of
Options
9,815,882
-
(300,002)
9,515,880
(4,757,940)
72,000,000
76,757,940
At beginning of reporting year
Granted during the year
- 1 for 2 attaching options
- Lapsed
Subtotal
1 for 2 consolidation of capital
- Part consideration for acquisition of
the SportsHero business
Balance the end of reporting year
Exercisable at end of reporting year
76,757,940
2016
Weighted
Average
Exercise
Price
USD
0.0758
1.27
Number of
Options
10,345,535
9,395,880
(9,925,533)
-
-
-
9,815,882
9,815,882
The following table sets out the movements in the number of options on throughout the year:
Grant date Expiry date
Balance at
start of year
1 for 2
consolidation
Number
issued
during year
Number
exercised
during year
Number
expired
during year
Balance at
end of year
Number
exercisable
at end of
year
24 Dec 13
6 Jan 15
6 Jan 15
27 Oct 15
7 Feb 17
Total
31 Oct 16
31 Dec 17
31 Dec 17
30 Sept 17
31 Aug 19
300,002
60,000
60,000
9,395,880
-
9,815,882
-
(30,000)
(30,000)
(4,697,940)
-
(4,757,940)
-
-
-
-
72,000,000
72,000,000
-
-
-
-
-
(300,002)
-
-
-
(300,002)
-
30,000
30,000
4,697,940
72,000,000
76,757,940
-
30,000
30,000
4,697,940
72,000,000
76,757,940
The following tables set out the assumptions made in determining the fair value of the options granted:
Grant date
Type
6 Jan 2015
Employee
and
Consultant
6 Jan 2015
Employee
and
Consultant
27 Oct 2015
Free
attaching
options
7 Feb 2017
Free
attaching
options
Dividend yield (%)
Expected price volatility
Risk-free interest rate (%)
Expected life of options (years)
Option exercise price AUD
Option exercise price in AUD translated to
USD at grant date
Share price at grant date AUD
Share price in AUD translated to USD at
grant date
Number of options issued
-
1.00
2.50%
2.99
$1.02
$0.83
$0.14
$0.11
-
1.00
2.50%
2.99
$1.24
$1.01
$0.14
$0.11
-
1.00
2.5%
1.93
$0.20
$0.144
$0.06
$0.04
-
1
2.5%
2.15
$0.05
$0.038
$0.05
$0.038
30,000
30,000
4,697,940
72,000,000
38
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
20. Auditors’ Remuneration
Audit of the financial statements - RSM Australia Partners
Audit or review of financial reports
Other services - RSM Australia Pty Ltd
Independent expert reports
Audit services - Network firms
Audit or review of the financial statements - Ruihua Certified Public
Accountants
Audit or review of the financial statements - RSM Chio Lim LLP
Consolidated
2017
Period
from
9/03/2016
to
30/06/2016
USD
USD
33,259
33,259
10,617
10,617
31,748
31,748
10,000
11,596
21,596
86,603
-
-
-
8,901
8,901
19,518
21.
Commitments
There were no outstanding commitments, which are not disclosed in the financial statements as at 30
June 2017 other than:
Office rental commitments
Within 1 year
After 1 year but not more than 5 years
USD
38,067
-
38,067
USD
43,328
-
24,000
22. Financial Risk Management Objectives and Policies
The Group’s principal financial instruments comprise cash and short-term deposits.
The main purpose of these financial instruments is to finance the Group’s operations. The Group has various
other financial assets and liabilities such as trade receivables and trade payables, which arise directly from
its operations. It is, and has been throughout the entire year under review, the Group’s policy that no trading
in financial instruments shall be undertaken.
The main risks arising from the Group’s financial instruments are cash flow interest rate risk and equity price
risk. Other minor risks are either summarised below or disclosed at note 9 in the case of credit risk and note
13 in the case of capital risk management. The Board reviews and agrees policies for managing each of
these risks.
Cash Flow Interest Rate Risk
The Group’s exposure to the risks of changes in market interest rates relates primarily to the Group’s short-
term deposits with a floating interest rate. These financial assets with variable rates expose the Group to
cash flow interest rate risk. All other financial assets and liabilities in the form of receivables and payables
are non-interest bearing. The Group does not engage in any hedging or derivative transactions to manage
interest rate risk.
The following tables set out the carrying amount by maturity of the Group’s exposure to interest rate risk and
the effective weighted average interest rate for each class of these financial instruments.
39
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
The Group has not entered into any hedging activities to cover interest rate risk. In regard to its interest rate
risk, the Group does not have a formal policy in place to mitigate such risks.
Floating
Interest
Rate
1 year or
less
USD
Over 1-5
years
USD
Non-
interest
bearing
USD
Notes
Total
USD
8
9
12
0%
1,244,421
-
1,244,421
-
-
1,244,421
-
-
-
-
-
245,245
1,489,666
12,226
12,226
257,471
1,501,892
234,676
234,767
234,676
22,795
234,767
1,267,216
Floating
Interest
Rate
1 year or
less
USD
Over 1-5
years
USD
Non-
interest
bearing
USD
Notes
Total
USD
Consolidated
2017
Financial assets
Cash and cash
equivalents
Trade and other
receivables
Total financial assets
Financial liabilities
Trade and other
payables
Total financial liabilities
Net financial assets
Consolidated
2016
Financial assets
Cash and cash
equivalents
Trade and other
receivables
8
9
0%
-
14,367
14,367
-
-
-
-
-
436,666
436,666
-
14,367
436,666
451,033
-
103,402
103,402
14,367
-
333,264
103,402
103,402
347,631
Total financial assets
Financial liabilities
Trade and other payables
12
Total financial liabilities
Net financial assets
Interest rate sensitivity
At 30 June 2017, if interest rates had changed by 15% during the entire year with all other variables held
constant, income for the year and equity would have been nil lower/higher (30 June 2016: Nil), as a result of
lower/higher interest income from cash and cash equivalents.
A sensitivity of 15% (15%: 2016) has been selected as this is considered reasonable given the current level of
both short term and long term Australian interest rates. A 15% sensitivity would move short term interest rates
at 30 June 2017 from around 1.50% to1.75% representing a 25 basis point increase. Market expectations are
that interest rates in Australia are more likely to move up than down in subsequent periods.
Based on the sensitivity analysis only interest revenue from variable rate deposits and cash balances are
impacted resulting in a decrease or increase in overall income.
40
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
Liquidity risk
The Group manages liquidity risk by maintaining sufficient cash reserves and marketable securities, and
through the continuous monitoring of budgeted and actual cash flows.
Contracted maturities of payables at 30 June
Payable
- less than 6 months
Foreign exchange risk
Consolidated
2017
USD
2016
USD
Notes
12
234,676
103,402
The Group has cash and cash equivalents denominated in AUD of USD1,489,666 (2016: USD433,666). At 30
June 2017, if USD/AUD rates had changed by 15% with all other variables held constant, loss for the year and
equity would have been USD223,450lower/higher (30 June 2016: USD65,050), as a result of with change in
fair value of cash and cash equivalents.
A sensitivity of 15% (15%: 2016) has been selected as this is considered reasonable given the current level of
volatility in the USD/AUD rate.
Net fair values
For financial assets and liabilities, the net fair value approximates their carrying value. No financial assets and
financial liabilities are readily traded on organised markets in standardised form, other than listed investments.
The consolidated entity has no financial assets where carrying amount exceeds net fair values at balance
date.
23.
Segment Information
For management purposes the group is organised into two strategic units:
- corporate head office in Australia
-
technology development and marketing based in Singapore and China
Such structural organisation is determined by the nature of risks and returns associated with each business
segment and define the management structure as well as the internal reporting system. It represents the
basis on which the Group reports its primary segment information to the Board.
The operating segment analysis presented in these financial statements reflects operations analysis by
business. It best describes the way the group is managed and provides a meaningful insight into the business
activities of the Group.
The following table presents details of revenue and operating loss by business segment as well as
reconciliation between the information disclosed for reportable segments and the aggregated information in
the financial statements. The information disclosed in the table below is derived directly from the internal
financial reporting system used by the Board of Directors to monitor and evaluate the performance of our
operating segments separately.
Year ended 30 June 2016
Revenue from external customers
Inter-segment revenue
Reportable segment (loss) before tax
Australia
USD
Singapore
USD
China
USD
Total
USD
-
-
-
-
-
(151,260)
-
-
-
(151,260)
41
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS
Year ended 30 June 2017
Revenue from external customers
Inter-segment revenue
Reportable segment (loss) before tax
8,764
-
350
-
-
-
9,113
-
(2,648,383)
(1,204,537)
(413,724)
(4,266,644)
Reportable segments assets at 30 June 2016
Reportable segments assets at 30 June 2017
-
2,452,142
-
-
1,320,262
1,743,668
11,460
3,075,390
24. Subsequent Events
On 4 September 2017 Mr Tom Lapping was appointed as CEO of the Company.
On 26 September 2017, the Company announced the forming of a strategic partnership with YuuZoo Corporation
(YuuZoo), whereby YuuZoo has been appointed as SportsHero Limited’s Official African Marketing Partner.
This partnership giving SportsHero Limited access to in excess of 100 million African football (soccer) fans.
In Africa, YuuZoo has signed on dominant Nigerian broadcaster, the Nigerian Television Authority (NTA), as a
collaboration partner. NTA runs the largest television network in Nigeria with stations in several parts of the country.
NTA and YuuZoo air a prime time television show every Wednesday and will use this medium to promote African
continent competitions on SportsHero Limited’s platform. This powerful broadcast platform, combined with the
popularity of the show will help drive engagement and new users on the SportsHero Limited platform.
All revenues generate from the YuuZoo partnership will be shared equally between YuuZoo and SportsHero
Limited.
25. Contingent Liabilities and Contingent Assets
The Group does not have any contingent liabilities or assets at 30 June 2017 (2016: nil).
26. Investment in Controlled Entities
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly-
owned subsidiaries in accordance with the accounting policy described in note 1:
Parent entity
SportsHero Limited
Name of Controlled Entity
Sportz Hero Pty Limited
SportsHero Enterprise Pte Ltd
SportsHero Information Technology
(Shanghai) Co Limited.
Country of
Incorporation
Principal Activities
Ownership
%
Australia
Parent
Australia
Singapore
China
Investment holding
Technology development &
marketing
Technology development
100%
100%
100%
27. Company Details
The registered office and principal place of business of the Company is:
29 Brookside Place
Lota, QLD 4179
42
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ DECLARATION
In accordance with a resolution of the Directors of SportsHero Limited, I state that:
In the opinion of the Directors:
(a) the financial statements and notes of the consolidated entity are in accordance with the Corporations Act
2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2017 and of its
performance for the year ended on that date; and
(ii) complying with
the Australian Accounting Standards (including
the Australian Accounting
Interpretations) and Corporations Regulations 2001; and
(b) the financial statements and notes also comply with International Financial Reporting Standards as
disclosed in note 2; and
(c)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
This declaration has been made after receiving the declarations required to be made to the Directors in
accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2017.
Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act
2001.
On behalf of the Board
Michael Higginson
Chairman
Dated this 29th day of September 2017
43
RSM Australia Partners
Level 32, 2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
SPORTSHERO LIMITED
Opinion
We have audited the financial report of SportsHero Ltd. (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 30 June 2017, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash
flows for the year then ended, and notes to the financial statements, 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 2017 and of its financial
performance for the year then ended; 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 auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We 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.
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Pty Ltd is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Pty Ltd ACN 009 321 377 atf Birdanco Practice Trust ABN 65 319 382 479 trading as RSM
Liability limited by a scheme approved under Professional Standards Legislation
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.
We have determined the matters described below to be the key audit matters to be communicated in our report.
Key audit matter
How our audit addressed this matter
Impairment of intangibles
Refer to Note 11 in the financial statements
The Group has an intangible non-current asset with a
carrying value of US$1,563,889 being the SportsHero
gamified social sports prediction platform.
Our audit procedures in relation to the Group’s
impairment assessment of the SportsHero platform
non-current asset included:
Reviewing management’s assessment of the
indicators of impairment and challenging the
significant assumptions used in their review;
internal
financial modelling
Involving our
specialists to assess the integrity of the model,
reasonableness of the Group’s assumptions,
including assessed market size and future
demand, probabilities such as discount rates
and
product
development and operating costs;
streams,
revenue
future
Performing
analysis
sensitivity
the
SportsHero asset, including the consideration of
the available headroom in the discounted cash
flow model and assessing whether
the
assumptions had been applied on a consistent
basis across each scenario; and
on
Assessing the adequacy of the disclosures in
Note 11.
Recoverability of the SportsHero platform non-current
asset is dependent on:
Macro-economic assumptions about global sports
betting market size, future engagement and cross
fertilization of the product users and associated
sports merchandise retail markets and discount
rates; and
Internal assumptions related to revenue streams,
the success of the brand ambassador programme,
future product development,
innovation and
operating costs.
These are all factors which heightened the risk of
impairment associated with the SportsHero intangible
asset.
As at 30 June 2017, management identified that
impairment indicators were present and therefore
performed an impairment assessment using a value in
use model based on estimated future cash flows.
These estimates are significant due to the assumed
future SportsHero demand, user engagement, success
of the sports merchandise strategy and the uncertainty
around
the brand ambassador
programme. We determined this to be a key audit matter
due the risk that the outcome of the impairment
assessment could vary significantly
if different
assumptions are applied.
the realisation of
Key audit matter
How our audit addressed this matter
Acquisition of Sportshero Enterprise Pte Ltd
Refer to Note 16 in the financial statements
On 7 February 2017, the Company completed the
acquisition of Sportshero Enterprise Pte Ltd pursuant to
a share purchase agreement and a share sale
agreement by issue of 96 million shares at AU5 cents
and 72 million free and attaching options with an
exercise price of AUD5 cents.
When the transaction was completed, the shareholders
of Sportshero Enterprise Pte Ltd held 66.53% in the
combined entity. Therefore, the Company determined
that it was the accounting acquiree and Sportshero
Enterprise Pte Ltd was the accounting acquirer. The
Company did not meet the definition of a business under
AASB 3 Business Combinations as at the date of the
transaction. Therefore, the transaction was accounted
for using the principles of reverse acquisition accounting
by analogy.
The acquisition accounting for this transition involves
significant judgment by the Company for purchase price
allocation and in identifying the acquiring entity.
We identified the acquisition of Sportshero Enterprise
Pte Ltd as a key audit matter due to the technical
complexity of the accounting treatment, the significant
management judgment required in determining the
acquiring entity and the fair value of consideration paid
and whether
the
definition of a business under AASB 3 Business
Combinations.
the accounting acquiree meets
Our audit procedures in relation to the Company’s
accounting
the acquisition of Sportshero
for
Enterprise Pte Ltd included:
Reviewing
the share sale and purchase
agreement in order to obtain an understanding
of the transaction and the related accounting
considerations;
Critically
evaluating
management’s
determination that Sportshero Enterprise Pte Ltd
was the acquiring entity and that the acquired
entity did not meet the definition of a business;
Evaluating the timing and appropriateness of the
accounting treatment and the consideration of
the acquisition based on
the contractual
agreements; and
Assessing
the compliance of
the
disclosures with
Australian
financial
the
Accounting
presentation
requirements
Standards.
and
of
Other information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2017, but does not include the financial report and the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
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 have no realistic
alternative but to do so.
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 at: http://www.auasb.gov.au/auditors_responsibilities/ar1.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 within the directors' report for the year ended 30 June 2017.
In our opinion, the Remuneration Report of SportsHero Limited, for the year ended 30 June 2017, 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.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 29 September 2017
DAVID WALL
Partner
SPORTHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
SHAREHOLDER INFORMATION
Additional information required by Australian Securities Exchange Limited and not shown elsewhere in this Annual
Report is as follows. The information is made up to 7 September, 2017.
Distribution schedules of security holders
Fully Paid
Shares
AUD1.02
Options
expiring
31/12/17
AUD1.024
Options
expiring
31/12/17
AUD0.20
Options
expiring
30/09/17
AUD0.05
Options
Expiring
31/08/19
1 -1,000
1,001 - 5,000
5,001 -
10,000
10,001 -
100,000
100,001 and
over
Number of
Holders
143
146
39
198
123
649
-
-
-
1
-
1
Holders of nonmarketable parcels
-
-
-
1
-
1
-
-
-
2
12
14
-
-
-
2
8
10
There are 306 fully paid ordinary shareholders who hold less than a marketable parcel of shares.
Twenty largest shareholders
The names of the twenty largest shareholders are:
1 MyHero Limited
2 Citicorp Nominees Pty Ltd
3 Sunshore Holdings Pty Ltd
4 FD Reis
5 TNT Lapping
6 Allgreen Holdings Pty Ltd
7 BNP Paribas Nominees Pty Ltd
8 Timriki Pty Ltd
9 AS & NF Paul
10 A Mehra
11 KM Lapping
12 CJ Barnett
13 Allnorth Nominees Pty Ltd
14 Athelstan Holdings Pte Ltd
15 Hawera Pty Ltd
16 HSBC Custody Nominees (Australia) Limited
17 Allgreen Holdings Pty Ltd
18 LS Vidovich
19 Timriki Pty Ltd
20 Boveri Limited
48
Number of
shares
60,000,000
16,556,836
12,500,000
8,357,143
8,357,143
6,214,286
5,781,584
5,142,857
4,242,857
3,885,510
3,425,000
3,415,000
3,214,286
3,150,000
2,800,000
2,766,376
2,697,953
2,195,500
2,125,000
2,125,000
158,952,831
% Held
26.925%
7.430%
5.609%
3.750%
3.750%
2.789%
2.594%
2.308%
1.904%
1.744%
1.537%
1.533%
1.442%
1.414%
1.256%
1.241%
1.211%
0.985%
0.954%
0.954%
71.330%
SPORTHERO LIMITED
ANNUAL REPORT 30 JUNE 2017
SHAREHOLDER INFORMATION
Restricted securities
The Company has the following Restricted Securities on issue.
Number
Class
74,557,142
Fully paid ordinary shares (held in ASX imposed escrow for 24 months from 13 February 2017).
33,942,858
4,114,286
67,885,714
Fully paid ordinary shares (held in ASX imposed escrow for 12 months to 7 February 2018).
Options each exercisable at AUD0.05 and expiring 31 August 2019 (held in ASX imposed
escrow for 24 months from 3 February 2017).
Options each exercisable at AUD0.05 and expiring 31 August 2019 (held in ASX imposed
escrow for 12 months to 7 February 2018).
Unquoted equity securities
Number on
issue
Number of
holders
Options to acquire fully paid shares at USD0.83 (AUD1.02) per share and
expiring 31 December 2017
Options to acquire fully paid shares at USD1.01 (AUD1.24) per share and
expiring 31 December 2017
Options to acquire fully paid shares at USD0.144 (AUD0.20) per share and
expiring 30 September 2017
Options to acquire fully paid shares at USD0.38(AUD0.05) per share and
expiring 31 August 2019
Performance rights to acquire fully paid shares
30,000
30,000
4,697,940
72,000,000
7,500,000
1
1
14
10
2
Substantial shareholders
MyHero Limited – as per Form 603 lodged with ASX on 10 Feb 2017
60,000,000
27.17%
Two Trees Capital Limited – as per Form 603 lodged with ASX on 10 Feb 2017
12,780,000
5,79%
Sunshore Holdings Pty Ltd – as per Form 603 lodged with ASX on 8 Feb 2017
5,710,000
5.66%
No. of Shares
Held
% of Shares
Held
On-market buy-back
There is no current on-market buy-back.
Acquisition of voting shares
No issues of securities have been approved for the purposes of Item 7 of section 611 of the Corporations Act 2001.
Voting Rights
Ordinary fully paid shares – on a show of hands, every member present in person or by proxy shall have one vote
and upon a poll, each member shall have one vote per share.
Tax status
The Company is treated as a public company for taxation purposes.
Franking credits
The Company has nil franking credits.
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