SportsHero Limited
ACN 123 423 987
Annual Report
for the year ended
30 June 2019
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
CORPORATE DIRECTORY
Directors
Michael Higginson (Chairman)
Tom Lapping (Director and CEO)
Wayne Johnson (Non-Executive Director – appointed 28 November 2018)
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.live/
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 2019
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
16
17
18
19
20
21
51
52
55
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 27 September 2019.
The Directors have the power to amend and reissue the financial statements.
3
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
CHAIRMAN’S LETTER
Dear Shareholder
On behalf of the Board of Directors of SportsHero Limited, I am pleased to be able to present the 2019 Annual
Report of the Group.
The year certainly delivered a significant transformation for the Group, that culminated with the development
and launch on both the Apple App Store and Google Play of the white label Kita Garuda mobile application for
the Football Association of Indonesia (PSSI). PSSI being one of the world’s largest sports federations that
boasts of having an engaged fan base of 80 million, over 4 leagues and 128 teams.
On 25 March 2019, SportsHero executed an exclusive multi-revenue stream digital partnership agreement
with PSSI that resulted in SportsHero developing Kita Garuda, an intelligent, engaging sports prediction digital
platform that offers a broad range of revenue streams. The Indonesian market and the opportunity for the
Group to leverage PSSI’s significant fan base is an exciting opportunity, which both PSSI and SportsHero
intend to monetise.
Having developed a white label digital solution, the Group is now able to offer that digital solution across
multiple sports to sporting groups and other partners globally.
Importantly, the Group also has a partnership with one of the world's most popular sporting leagues, Spain's
LaLiga, as the exclusive Indonesian partner in the sports prediction category.
During the March 2019 quarter, the Group executed binding agreements with Cross Bet Holdings Pty Ltd
(CBH) for the purpose of enabling the granting of a Sports Bookmaker Licence (regulated by the Northern
Territory Racing Commission) to facilitate the Australian launch of a SportsHero pay-to-play sports prediction
platform. Conditional approval for the granting of the Licence, from the Department of the Attorney General
and Justice Licencing, has been received by CBH.
Subsequent to year end, the Group executed an underwriting agreement with Veritas Securities Pty Ltd for the
exercise of 30 million options each exercisable at AU$0.05 and expiring 31 August 2019. As a consequence
of that underwriting agreement, on 12 September 2019 the Group announced the raising of AU$1,862,500
following the exercise of 37.25 million options.
The securing of additional equity capital and the introduction of institutional investors to the Group’s register,
augers well for the Group as it seeks to fully capitalise on the company making opportunities that it has created
and developed throughout the year.
Whilst the past year has delivered many challenges, I very sincerely commend our laterally thinking and
resourceful CEO and his team for delivering what can only be described as significant opportunity and upside
for the Group. As a consequence, I very much look forward to the challenges and anticipated achievements
that await the Group during the coming year.
Yours sincerely
Michael Higginson
Chairman
4
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
OPERATIONS REPORT
SportsHero Limited has developed an intelligent, engaging sports prediction platform, designed to provide a
dynamic immersive social experience, coupled with both monetary and other prizes.
On 25 March 2019, SportsHero executed an exclusive multi-revenue stream digital partnership agreement
with the Football Association of Indonesia (PSSI), with over 80 million PSSI fans targeted for connection on a
newly developed digital platform offering a broad range of revenue streams and powered by SportsHero.
The Group also has a partnership with one of the world's most popular sporting leagues, Spain's LaLiga, as
the exclusive Indonesian partner in the sports prediction category.
Having developed a white label digital solution, the Group is now able to offer that digital solution across
multiple sports to sporting groups and other partners globally.
Kita Garuda and PSSI
Throughout the year, the Group undertook and delivered significant technical achievements, culminating in the
development and launch in June 2019 on the Apple App Store and Google Play of the white label mobile
application “Kita Garuda” for PSSI.
In accordance with a partnership agreement with PSSI, SportsHero has been appointed for a term of 3 years
(with the option to extend for 2 further periods of 3 years) as PSSI’s exclusive provider and partner to build
PSSI’s first official platform, including apps that incorporate SportsHero’s gamified sports prediction platform,
a ticketing platform, live streaming, social media, merchandise/e-commerce, game highlights and player
access.
Pursuant to the partnership agreement, the parties have agreed that net revenue from direct advertising will
be split 70/30% in favour of the party that introduces the advertiser. Included under the agreement revenue is
generated from:
• Direct advertising
• Brand sponsorship
• Competition revenue
• Video streaming
• eCommerce
• Match ticketing
• Gamification-related ticket sales – which are required to participate in weekly, monthly and season
long prediction competitions and PSSI promotions.
With respect to revenue generated from third party sponsorships, direct advertising and relevant competitions,
the party who introduces the revenue source will receive 70% of the revenue, less all applicable taxes and
deductions (the other party will receive 30%).
Throughout the term of the partnership agreement, PSSI will exclusively provide rich content, including access
to video footage of games, events and features of the Indonesian national teams and its players.
In addition, PSSI intends to use the app, built by SportsHero, to stream live and recorded matches to their
estimated 80 million fan base in Indonesia – thereby meaningfully expanding the potential advertising and
sponsorship revenue base through a wider audience and an extended app user engagement time.
The parties further intend that users will be offered the right to subscribe to exclusive access to premium
content, such as international match video highlights, live streaming of games and featured video stories and
education.
LaLiga Partnership Agreement
On 23 August 2018, the Group announced a landmark partnership with Spain’s top football division, LaLiga.
Pursuant to the partnership, SportsHero was appointed as LaLiga’s exclusive Indonesian partner in the sports
prediction app category.
5
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
OPERATIONS REPORT
Licensing Agreement with Linius Technologies
Subsequent to year end, on 1 July 2019 the Group announced a binding Agreement with leading hyper-
personalised video content provider, Linius Technologies Limited (“Linius”) (ASX: LNU), via their respective
wholly-owned subsidiaries.
Pursuant to the Agreement, SportsHero secured the rights to use the Linius technology in the SportsHero app
and other ‘white label’ solutions, including the mobile application ‘Kita Garuda’, developed for PSSI.
The Linius technology allows a user to customise a video to show only content that is relevant to the individual
requirements and viewing preferences of the user. For example, once integrated, a user of the PSSI app will
be able to search for and watch highlights of their favourite players, the best goals scored, or customise their
viewing content based on virtually any criteria, such as shots on target, goalkeeper saves, injuries,
substitutions, penalties, red cards and many more.
The integration of the Linius technology into the PSSI mobile app has the potential to significantly increase
user engagement and viewer numbers for the ‘Kita Garuda’ mobile app, which in turn is expected to result in
the generation of more substantive advertising revenue for both PSSI and SportsHero.
Sports Bookmaker License
During the March quarter, SportsHero executed binding agreements with Cross Bet Holdings Pty Ltd (CBH)
for the purpose of enabling the granting of a Sports Bookmaker Licence (regulated by the Northern Territory
Racing Commission) to facilitate the Australian launch of a SportsHero pay-to-play sports prediction platform.
Conditional approval for the granting of the Licence, from the Department of the Attorney General and Justice
Licencing, has been received by CBH.
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”.
6
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
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
2019.
Directors
(i)
Names, qualifications and experience
The names and details of the Group’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
Wayne Johnson
Christopher Green
Non-Executive Director and Chairman
Director and CEO
Non-Executive Director (appointed 28 November 2018)
Non-Executive Director (resigned 27 November 2018)
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 30
years, held numerous directorship and company secretarial roles with a number of public listed companies across
a range of industry sectors.
Mr Higginson is a director of Cape Range Limited and VIP Gloves Limited.
Tom Lapping – Director and CEO
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 a keen understanding of consumer behaviour and was
recognised as a 40under40 business entrepreneur award winner in Western Australia in 2003
Mr Wayne Johnson (Non-Executive Director) – Appointed 28 November 2018
Mr Johnson has over 30 years business and financial transaction experience gained in Australia, New Zealand,
Asia and North America. He has extensive experience in managing businesses, corporate advisory, governance
and compliance as a result of building, managing and directing public and private companies from start up to
established public corporations.
Mr Johnson’s hands on experience in business management and operations, often in markets undergoing
significant change, is a rare attribute not held by many corporate advisors. The knowledge and skills accumulated
through being at the helm of a range of successful enterprises has been at the core of his ability to drive many
merger and acquisition transactions, restructures and recapitalisations. Mr Johnson’s expertise spans a variety of
industries, including telecommunications, electronic payments, financial services and the resources sector.
Mr Johnson is the principal of Noblemen Ventures Pty Ltd, a Sydney based corporate and investment advisory
firm providing services to select public and private entities, primarily in the middle market. He also provides
services as a professional director to public companies. Mr Johnson is chairman of Cape Range Limited (ASX
code: CAG) and a non-executive director of VIP Gloves Limited (ASX code: VIP) and Enhanced Oil & Gas
Recovery Ltd (ASX code: EOR).
7
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
DIRECTORS REPORT
Christopher Green – Non Executive Director – Resigned 27 November 2018
Qualification: B.Sc (Applied Geology) and Grad Dip Computer Science
Mr Green has been working in the mining and IT industries for 41 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 41
years professional experience with the last 26 years almost exclusively within the practical application of IT and
IT innovation.
(ii)
Interests in the Shares and Options of the Group
As at the date of this report, the interest of the Directors in the shares and options of the Group are:
M Higginson
T Lapping
W Johnson
TOTAL
Number of
shares
20,834
11,782,143
-
11,802,977
Number of
options
-
-
-
-
16,714,286 options held of Tom Lapping at year end expired on 31 of August 2019 and were disposed of
unexercised. There are no options held by Tom Lapping as at the date of the report.
Company Secretary
Michael Higginson
Qualification: B.Bus Fin & Admin
Directors’ meetings
The number of meetings attended by each of the Directors of the Group during the financial year was:
Michael Higginson
Tom Lapping
Wayne Johnson
Christopher Green
Directors’ Meetings
(a)
3
3
3
-
(b)
3
3
3
-
(a) Number of meetings held and entitled to attend
(b) Number of meetings attended
Given the size of the Group 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.
For details of the Company’s controlled entities, please refer to note 27.
Nature of operations and principal activities
The principal activity of the Group during the year was the development of the Group’s sports gamification
platform.
8
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
Results of operations
DIRECTORS REPORT
The operating loss after income tax of the Group for the year ended 30 June 2019 was US$2,276,625 (2018:
US$4,335,566).
As set out in the Statement of Comprehensive Income, the two most significant expense categories for the
financial year were:
• Administration expenses, totalling US$1,259,352; and
• Employee and consulting expenses, totalling US$844,977.
Included within these two expense categories are the following items:
• Product development and maintenance - US$724,911 (100% of development expenditure being
expensed and not capitalized) of which US$247,468 is under Administration expenses and US$477,443
is under Employee and consulting expenses);
• Marketing and promotions – US$303,183, and
• Legal expenses – US$149,813.
Other factors that contributed to the US$2,276,625 loss included an impairment loss of US$146,738 as a result
of monies not received from Walletku (refer Significant changes in state of affairs) and share based payments to
non-related parties that totalled US$223,333.
The Group’s basic loss per share for the year was 0.93 US cents (2018: 1.84 US cents).
Dividends
No dividend has been paid during or is recommended for the financial year ended 30 June 2019 (2018: nil).
Review of operations
The principal activity of the Group during the financial year was the development of the Group’s 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 23 August 2018, the Group announced a landmark partnership with Spain’s top football division LaLiga.
Pursuant to the partnership, SportsHero was appointed as LaLiga’s exclusive Indonesian partner in the sports
prediction app category.
Following the launch of Version 3 of SportsHero’s app in September 2018 and the commencement of the LaLiga
Hero of the Month competitions in Indonesia, the Group commenced generating revenue through its joint venture
with Indonesia’s Walletku. As a consequence of Walletku withholding SportsHero’s share of the generated
revenue of US$146,738 for the period July 2018 to December 2018, SportsHero elected to stop all joint venture
activities with Walletku. On 31 May 2019, SportsHero received from Walletku a payment of US$32,030.
On 3 October 2018, the Group issued 3,582,500 shares at an issue price of AU$0.20 per share raising
AU$716,500 in working capital.
Following the resignation of Mr Christopher Green as a Director on 27 November 2018, on 28 November 2018
Mr Wayne Johnson was appointed as a Director.
On 10 January 2019, the Group announced that it had entered into a heads of agreement with Cross Bet Holdings
Pty Ltd (CBH) for the purpose of enabling SportsHero to launch its existing pay-to-play sports prediction platform
in Australia. Subsequent to the heads of agreement, the parties established a joint venture vehicle for the purpose
of securing the grant of a Sports Bookmaker Licence regulated by the Northern Territory Racing Commission.
9
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
DIRECTORS REPORT
On 8 February 2019, the Group issued 10,808,334 shares at an issue price of AU$0.10 per share raising
AU$1,080,833 (before costs) in working capital. In addition, the Group completed the raising of AU$175,417
pursuant to the issue of 3,508,334 shares following the exercise of 3,508,34 options each exercisable at AU$0.05
and expiring 31 August 2019.
On 25 March 2019, the Group announced that it had entered into an exclusive multi revenue stream digital
partnership with PSSI (refer Operations Report).
Future developments
Likely future developments in the operations of the Group are referred to in the Chairman’s Letter and Operations
Report. Other than as 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 1 July 2019, the Group announced a licensing agreement with Linius Technologies Limited whereby
SportsHero secured the rights to use the Linius video customisation technology. For further information, please
refer to the Operations Report.
On 24 July 2019, the Group issued 4,283,333 shares at an issue price of AU$0.10 per share raising AU$428,333
in working capital. In addition, the Group raised a further AU$2,682,717 (before costs) following the exercise of
53,654,334 options each exercisable at AU$0.05 and expiring 31 August 2019.
On 1 August 2019, the Group announced an extension of the partnership with PSSI for a term of 3 years, plus
the right to further extend for 2 further periods of 3 years (ie a total of 9 years).
On 21 August 2019, the Group announced that full exclusivity for Indonesia’s FIFA World Cup qualifying match
ticket sales, merchandise and other exclusive World Cup content had been secured for the Kita Garuda mobile
application.
On 12 September 2019, the Group completed the raising of AU$1,862,500 (before costs) pursuant to the issue
of 37,250,000 shares following the exercise of 37,250,000 options each exercisable at AU$0.05 and expiring 31
August 2019 and issued 20,000,000 options each exercisable at AU$0.10 and expiring 30 September 2021.
Financial position
The Group’s working capital, being current assets less current liabilities, was negative US$1,162,990 as at 30
June 2019 (2018: negative US$218,653).
In the Directors’ opinion there are reasonable grounds to believe that the Group will be able to pay its debts as
and when they become due and payable.
Proceedings on behalf of the Group
No person has applied for leave of court to bring proceedings on behalf of the Group or intervene in any
proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or
any part of those proceedings.
Additional information
The earnings of the consolidated entity for the five years to 30 June 2019 are summarised below:
Income
EBITDA
EBIT
Loss after income tax
2019
US$
2018
US$
2017
US$
2016
US$
2015
US$
463,791
(2,276,050)
(2,276,625)
(2,276,625)
16,841
9,113
(3,830,964) (3,410,171)
(4,335,566) (3,850,447)
(4,335,566) (4,266,614)
-
(151,228)
(151,260)
(151,260)
-
-
-
-
10
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
DIRECTORS REPORT
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 and diluted loss per share for continued
operations (US cents per share)
Basic diluted loss per share for discontinued
operations (US cents per share)
Basic loss per share (US cents per share)
2019
US
4.5
-
0.93
-
0.93
2018
US
5.91
-
1.55
0.29
1.84
2017
US
3.1
-
3.48
0.37
3.85
2016
US
-
-
-
-
-
2015
US
-
-
-
-
-
Remuneration report (Audited)
Details of Remuneration for the Year Ended 30 June 2019
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.
During the financial year ended 30 June 2019, the consolidated entity did not engage any external parties for a
review of remuneration practices.
At the 2018 Annual General Meeting, 99.98% of the eligible votes received supported the adoption of the
remuneration report for the year ended 30 June 2018. The Group 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.
11
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
DIRECTORS REPORT
The tables below show the 2019 and 2018 remuneration of the Directors and other key management personnel:
2019
Short-term
Post-
employment
Share-
based
payments
Value of
options as a
%
Salary & fees
US$
Cash
Bonus
US$
Superannuatio
n
US$
Shares
US$
Total
US$
Chairman
Michael
Higginson
Directors
Tom Lapping
Wayne Johnson*
Christopher
Green**
75,384
107,340
25,903
7,800
Total key
management
personnel
compensation
216,427
* Appointed on 28 November 2018
** Resigned on 27 November 2018
-
28,624
-
-
28,624
-
-
-
-
-
-
-
-
-
-
75,384
135,964
25,903
7,800
0%
0%
0%
0%
245,051
0%
2018
Short-term
Post-
employment
Share-based
payments
Salary & fees
US$
Superannuation
US$
Shares
US$
Chairman
Michael Higginson
Directors
Tom Lapping
Christopher Green
Total key management
personnel
compensation
74,982
81,733
19,384
176,099
-
-
-
-
-
-
-
-
Value of
options as a
%
Total
US$
74,982
81,733
19,384
0%
0%
0%
176,099
0%
Performance Shares as a Proportion of Total Remuneration
There were no performance shares issued to Directors during the year ended 30 June 2019 (2018: nil).
Ordinary Shares held by Directors
2019
Directors
M Higginson
C Green1
T Lapping
W Johnson2
Balance at
beginning of
year
20,834
-
11,782,143
-
11,802,977
Allotted during
the year
Purchased
during the
year
Sold during
the year
Balance at
end of year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20,834
-
11,782,143
-
11,802,977
1- Closing balance represents shareholding upon resignation as a Director on 27 November 2018
2- Opening balance represents shareholding upon appointment at 28 November 2018
12
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
DIRECTORS REPORT
2018
Directors
M Higginson
C Green
T Lapping
Balance at
beginning of
year
20,834
-
11,782,143
11,802,977
Allotted
during the
year
Purchased
during the
year
Sold during
the year
Balance at
end of year
-
-
-
-
-
-
-
-
20,834
-
-
-
- 11,782,143
- 11,802,977
Group 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 or performance rights to Directors
and executives to encourage the alignment of personal and shareholder interests.
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 Group 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 Group and to
continue to work to enhance the Group’s value.
Options Granted for the Year Ended 30 June 2019
2019
Directors
Balance at
beginning
of year
M Higginson
C Green1
T Lapping
W Johnson 2
Total
-
-
16,714,286
-
16,714,286
Option movements for the year
Granted as
Allotted
compensation Exercised
Expired
Other
changes
Balance
at end of
year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 16,714,286
-
-
- 16,714,286
1.Closing balance represents number of options held upon resignation as a Director on 27 November 2018.
2.Opening balance represents number of options held upon appointment at 28 November 2018.
2018
Directors
Balance at
beginning
of year
M
Higginson
T Lapping
C Green
Total
-
16,714,286
-
16,714,286
Option movements for the year
Granted as
Allotted
compensation Exercised
Expired
Other
changes
Balance
at end of
year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 16,714,286
-
-
- 16,714,286
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% (2018: 0%).
13
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
DIRECTORS REPORT
Employment Contracts of Directors and Senior Executives
As of 30 June 2019 there were no formal contracts for Non-Executive Directors.
Mr Johnson is paid fees at the rate of AU$60,000 per annum.
Mr Higginson, as Chair of the Group, is paid fees at the rate of AU$50,000 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
Group.
During the financial year, the Group paid Mr Lapping a bonus of AU$40,000. The Group has not paid bonuses to
any other Directors or executives.
End of remuneration report
Share options
At the date of this report, the unissued ordinary shares of the Group under option are as follows:
Grant date
7 February 2018
Date of Expiry
1 February 2021
Exercise Price Number Under Option
AU$0.20
1,000,000
Options granted but not issued
At the date of this report, the unissued options not yet granted are as follows:
Grant date
Date of Expiry
Exercise Price Number Under Option
28 February 20181
28 February 20181
28 February 2022
28 February 2023
AU$0.30
AU$0.30
1,000,000
1,000,000
2,000,000
Issue of options is subject to vesting conditions outlined in note 20(b). In current financial year these options were
forfeited as the vesting conditions were not met.
During the financial year ended 30 June 2019, 3,508,334 SportsHero Limited shares were issued following the
exercise of 3,508,334 options expiring 31 August 2019.
Performance rights
At the date of this report, the following unissued shares are subject to vesting conditions:
Grant date
Date of Expiry
27/3/17
27/3/17
8/12/17
1/04/20
1/04/20
8/12/19
Share price at
grant date US$
-
-
0.05
Performance rights
1,000,000
1,000,000
4,000,000
6,000,000
Since the end of the financial year 53,653,334 shares have been issued following the exercise of options.
Since the end of the financial year 20,000,000 options have been issued and 13,809,760 options lapsed.
No amounts are unpaid on any of the shares on issue.
14
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
DIRECTORS REPORT
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 Group did not pay premiums to insure the Directors and Company Secretary of the
Group.
Non-audit services
No fees for non-audit services were paid/payable to the Group’s auditors during year (2018:nil).
Auditor’s independence declaration
The auditor’s independence declaration for the year ended 30 June 2019 has been received and immediately
follows the Directors’ Report.
Officers of the Group who are former partners of RSM Australia Partners
There are no officers of the Group who are former partners of RSM Australia Partners.
Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of the
Group 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 Group’s website at: http://sportshero.live/
This report is made in accordance with a resolution of the Directors.
Michael Higginson
Chairman
15
RSM Australia Partners
Level 32, Exchange Tower
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 2019, I
declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
David Wall
Partner
RSM Australia Partners
Perth, WA
Dated: 27 September 2019
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 2019
STATEMENT OF FINANCIAL POSITION
As at 30 June 2019
Current assets
Cash and cash equivalents
Trade and other receivables
Assets associated with discontinued operations
Total current assets
Non-current assets
Plant and equipment
Investment accounted for using the equity method
Other assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Net (liabilities)/assets
Equity
Issued capital
Share based payments reserve
Foreign currency translation reserve
Accumulated losses
Total equity
Note
8
9
16
10
18
11
Consolidated
30 June
2019
US$
30 June
2018
US$
49,781
44,246
94,027
-
94,027
323,333
1,411
324,744
11,423
336,167
1,507
24,623
140,260
166,390
5,007
-
-
5,007
260,417
341,174
12
1,257,017
1,257,017
554,820
554,820
1,257,017
554,820
(996,600)
(213,646)
13
14
14
10,097,370
92,515
(156,390)
(11,030,095)
(996,600)
8,559,488
97,751
(117,415)
(8,753,470)
(213,646)
The above statement of financial position should be read in conjunction with the accompanying notes.
17
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2019
Continuing operations
Income
Revenue
Other revenue
Expenses
Administration expenses
Commission expense
Employee and consulting expenses
Depreciation and amortisation expense
Impairment of intangible assets
Impairment expense
Share based payments
Share of net loss of joint venture accounted for using equity
method
Loss before income tax expense
Income tax expense
Loss after tax expense for continuing operations
Loss from discontinued operations
Loss 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
Consolidated
2019
US$
2018
US$
Note
3
3
4a
4b
5
10
9
20
18
7
16
423,242
40,549
-
16,841
(1,259,352)
(990,340)
(243,364)
(844,977)
(575)
-
(158,161)
(223,333)
(10,654)
-
(477,875)
(504,602)
(1,063,889)
-
(624,340)
-
(2,276,625)
(3,644,205)
-
-
(2,276,625)
(3,644,205)
-
(691,361)
(2,276,625)
(4,335,566)
(38,975)
(150,009)
(2,315,600)
(4,485,575)
Basic and diluted loss per share for continued operations
(US cents per share)
Basic and diluted loss per share for discontinued operations
(US cents per share)
Basic and Diluted loss per share (US cents per share)
6
6
6
0.93
-
0.93
1.55
0.29
1.84
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
18
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2019
Issued
Capital
Share
Based
Payments
Reserve
Foreign
Currency
Translation
Reserve
Accumulated
Losses
Total
Equity
Note
US$
US$
US$
US$
US$
Consolidated
Balance at 01/07/2017
Comprehensive loss for the year
Exercise of options
Performance rights issued during
the year
Shares issued during the year
Share based payments
Transaction costs
13
14
13,14
20
13
7,209,342
-
39,922
-
782,800
544,940
(17,516)
16,682
-
-
32,594
(150,009)
-
445,235
(364,166)
-
-
-
-
-
-
(4,417,904)
(4,335,566)
-
-
-
-
-
2,840,714
(4,485,575)
39,922
445,235
418,634
544,940
(17,516)
Balance at 30/06/2018
8,559,488
97,751
(117,415)
(8,753,470)
(213,646)
Balance at 01/07/2018
Total comprehensive loss for the
year
Performance rights issued during
the year
Shares issued during the year
Share based payments
Transaction costs
8,559,488
97,751
(117,415)
(8,753,470)
(213,646)
-
-
(38,975)
(2,276,625)
(2,315,600)
14
13
20
13
117,035
1,397,136
111,534
(87,823)
(117,035)
-
111,799
-
-
-
-
-
-
-
-
-
-
1,397,136
223,333
(87,823)
Balance at 30/06/2019
10,097,370
92,515
(156,390)
(11,030,095)
(996,600)
The above statement of changes in equity should be read in conjunction with the accompanying notes.
19
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
STATEMENT OF CASH FLOWS
For the year ended 30 June 2019
Cash Flows from Operating Activities
Receipts from customers
Payments to suppliers
Interest received
Consolidated
2019
US$
2018
US$
Note
54,469
5,541
(1,910,731)
(1,839,497)
2,042
10,757
Net cash flows used in operating activities
15
(1,854,220)
(1,823,199)
Cash Flows from Investing Activities
Payments for plant and equipment (note 10)
Cash received as part of acquisition
Net cash flows used in investing activities
Cash Flows from Financing Activities
Issue of new share capital (note 13)
Share issue transaction costs
Net cash provided by financing activities
Net (decrease) / 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
Cash and cash equivalents at the end of the year
8
(2,086)
(35,277)
(37,363)
-
-
-
1,744,829
(87,823)
1,657,006
822,722
(17,516)
805,206
(234,577)
(1,017,993)
(38,975)
323,333
49,781
(148,340)
1,489,666
323,333
The above statement of cash flows should be read in conjunction with the accompanying notes
20
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
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 2019 was authorised for issue in accordance with a resolution of the Director’s
on 27 September 2019.
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
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting
period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted.
The following Accounting Standards and Interpretations are most relevant to the consolidated entity:
AASB 9 Financial Instruments
The Group has adopted AASB 9 from 1 July 2018. The standard introduced 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 that are solely principal and interest. A debt investment shall be
measured at fair value through other comprehensive income if it is held within a business model whose
objective is to both hold assets in order to collect contractual cash flows which arise on specified dates
that are solely principal and interest as well as selling the asset on the basis of its fair value. All other
financial assets are 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 or contingent consideration recognised in a business combination) in other
comprehensive income ('OCI'). Despite these requirements, a financial asset may be irrevocably
designated as measured at fair value through profit or loss to reduce the effect of, or eliminate, an
accounting mismatch. For financial liabilities designated at fair value through profit or loss, 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 use an 'expected credit loss' ('ECL') model to recognise an allowance.
Impairment is measured using 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. For
receivables, a simplified approach to measuring expected credit losses using a lifetime expected loss
allowance is available.
AASB 15 Revenue from Contracts with Customers
The Group has adopted AASB 15 from 1 July 2018. The standard provides a single comprehensive model
for revenue recognition. The core principle of the standard is that an entity shall recognise revenue to
depict the transfer of promised goods or services to customers at an amount that reflects the consideration
to which the entity expects to be entitled in exchange for those goods or services. The standard introduced
a new contract-based revenue recognition model with a measurement approach that is based on an
allocation of the transaction price. This is described further in the accounting policies below. Credit risk is
presented separately as an expense rather than adjusted against revenue. Contracts with customers are
presented in an entity's statement of financial position as a contract liability, a contract asset, or a
receivable, depending on the relationship between the entity's performance and the customer's payment.
Customer acquisition costs and costs to fulfil a contract can, subject to certain criteria, be capitalised as
an asset and amortised over the contract period.
21
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
Impact of adoption
AASB 9 and AASB 15 were adopted using the modified retrospective approach and as such comparatives
have not been restated. There was no impact of adoption.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are
not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period
ended 30 June 2019. The consolidated entity's assessment of the impact of these new or amended
Accounting Standards and Interpretations, most relevant to the consolidated entity, are set out below
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 at 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. For lessor
accounting, the standard does not substantially change how a lessor accounts for leases. The
consolidated entity has made an assessment and determined that the impact of this standard will not be
material to the financial statements.
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(y).
22
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
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, unless otherwise stated.
(b)
Going concern
These financial statements have been prepared on the going concern basis, which contemplates the
continuity of normal business activities and the realisation of assets and settlement of liabilities in the
normal course of business.
As disclosed in the financial statements, the consolidated entity incurred a net loss from continuing
operations of US$2,276,625, had net cash outflows from operating activities of US$1,854,220 and a net
cash outflow from investing activities of US$37,363 for the year ended 30 June 2019. As at that date, the
consolidated entity had net current liabilities of US$1,162,990 and net liabilities of US$996,600.
The Directors are of the view that there are reasonable grounds to believe that the consolidated entity will
continue as a going concern, after consideration of the following factors:
• As disclosed in note 25, AU$428,333 was raised following the issue of 4,283,333 shares on 24 July
2019 and a further AU$2,682,717 (before costs) was raised following the exercise of 53,654,334
options each exercisable at AU$0.05 and expiring 31 August 2019.
• The Group may reasonably expect to maintain continued support from shareholders and other
financiers that have supported the Group’s previous capital raisings to assist with future funding
needs.
• The Group has ability to curtail administrative, discretionary expenditure and overhead cash outflows
as and when required.
Accordingly, the Directors believe that the consolidated entity will be able to continue as a going concern
and that it is appropriate to adopt the going concern basis in the preparation of the financial report.
(c)
Statement of Compliance
The financial report complies with Australian Accounting Standards and International Financial Reporting
Standards.
Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of
SportsHero Limited as at 30 June 2019 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.
Associates and Joint venture entities are consolidated using the equity method. The initial recognition of
the investment in the joint venture has been recognised at cost, with the carrying amount increased or
decreased to recognise SportsHero Limited share of the profit or loss of the investee after the date of
acquisition. The share of the investee’s profit or loss is recognised in the investor’s profit or loss.
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.
23
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
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.
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 from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be
entitled in exchange for transferring goods or services to a customer. For each contract with a customer,
the Group: identifies the contract with a customer; identifies the performance obligations in the contract;
determines the transaction price which takes into account estimates of variable consideration and the
time value of money; allocates the transaction price to the separate performance obligations on the basis
of the relative stand-alone selling price of each distinct good or service to be delivered; and recognises
revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the
customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer
such as discounts, rebates and refunds, any potential bonuses receivable from the customer and any
other contingent events. Such estimates are determined using either the 'expected value' or 'most likely
amount' method. The measurement of variable consideration is subject to a constraining principle
whereby revenue will only be recognised to the extent that it is highly probable that a significant reversal
in the amount of cumulative revenue recognised will not occur. The measurement constraint continues
until the uncertainty associated with the variable consideration is subsequently resolved. Amounts
received that are subject to the constraining principle are initially recognised as deferred revenue in the
form of a separate refund liability.
Competition sales
Revenue from competitions is recognised at the point in time when the competition prize is drawn.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method
of calculating the amortised cost of a financial asset and allocating the interest income over the relevant
24
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
period using the effective interest rate, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
(g)
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.
(h)
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method, less any allowance for expected credit losses. Trade receivables are
generally due for settlement within 90 days. The Group has applied the simplified approach to measuring
expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit
losses, trade receivables have been grouped based on days overdue. Other receivables are recognised
at amortised cost, less any allowance for expected credit losses.
(i)
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.
(j)
Joint venture
Joint ventures are entities over which the consolidated entity has joint control. Investments in joint
ventures are accounted for using the equity method. Under the equity method, the share of the profits or
losses of the joint venture is recognised in profit or loss and the share of the movements in equity is
recognised in other comprehensive income. Investments in joint ventures are carried in the statement of
financial position at cost plus post-acquisition changes in the consolidated entity's share of net assets of
the joint venture. Dividends received or receivable from joint ventures reduce the carrying amount of the
investment.
When the consolidated entity's share of losses in an joint venture equals or exceeds its interest in the joint
venture, including any unsecured long-term receivables, the consolidated entity does not recognise
further losses, unless it has incurred obligations or made payments on behalf of the joint venture.
The consolidated entity discontinues the use of the equity method upon the loss of joint control and
significant influence over the joint venture and recognises any retained investment at its fair value. Any
25
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
difference between the joint venture's carrying amount, fair value of the retained investment and proceeds
from disposal is recognised in profit or loss.
(k)
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 recoverable amount of the cash-generating unit to which the asset belongs.
(l)
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included
as part of the initial measurement, except for financial assets at fair value through profit or loss. Such
assets are subsequently measured at either amortised cost or fair value depending on their classification.
Classification is determined based on both the business model within which such assets are held and the
contractual cash flow characteristics of the financial asset unless, an accounting mismatch is being
avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been
transferred and the consolidated entity has transferred substantially all the risks and rewards of
ownership. When there is no reasonable expectation of recovering part or all of a financial asset, it's
carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are
classified as financial assets at fair value through profit or loss. Typically, such financial assets will be
either: (i) held for trading, where they are acquired for the purpose of selling in the short-term with an
intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where
permitted. Fair value movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the
consolidated entity intends to hold for the foreseeable future and has irrevocably elected to classify them
as such upon initial recognition.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which
are either measured at amortised cost or fair value through other comprehensive income. The
measurement of the loss allowance depends upon the consolidated entity's assessment at the end of
each reporting period as to whether the financial instrument's credit risk has increased significantly since
initial recognition, based on reasonable and supportable information that is available, without undue cost
or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-
month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime
expected credit losses that is attributable to a default event that is possible within the next 12 months.
Where a financial asset has become credit impaired or where it is determined that credit risk has increased
significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of
expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is
recognised within other comprehensive income. In all other cases, the loss allowance is recognised in
profit or loss.
26
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
(m)
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.
(n)
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.
(o)
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.
27
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
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.
(p)
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.
(q)
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.
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.
28
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
(r)
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.
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.
(s)
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.
(t)
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the
Group.
(u)
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.
29
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
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.
(v)
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.
(w)
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.
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.
(x)
Comparative information
Where required by accounting standards comparative figures have been adjusted to conform to changes
in presentation for the current financial year.
(y)
Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management take judgements, estimates and
assumptions that affect the reported amounts in the financial statements. Management continually
30
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
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.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It
is based on the lifetime expected credit loss, grouped based on days overdue, and makes assumptions
to allocate an overall expected credit loss rate for each group. These assumptions include recent sales
experience and historical collection rates
Share-based payment transactions
The consolidated entity measures the cost of equity-settled transactions with employees by reference to
the fair value of the equity instruments at the date at which they are granted. The fair value is determined
by using either the Binomial or Black-Scholes model taking into account the terms and conditions upon
which the instruments were granted. The accounting estimates and assumptions relating to equity-settled
share-based payments would have no impact on the carrying amounts of assets and liabilities within the
next annual reporting period but may impact profit or loss and equity.
31
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
3. Revenue
Revenue from customers
Competition sales
Other revenue
Interest revenue
Other income
Consolidated
2019
US$
2018
US$
423,242
423,242
2,042
38,507
463,791
-
-
11,855
4,986
16,841
For the year ended 30 June 2019 and 30 June 2018, all revenue was recognised at a point in time once
the relevant performance obligation was met.
Administration expenses
4a.
Administration expenses include the following :
Advertising and marketing
Professional fees
Sports subscription services
Legal
4b. Commission expense
Consolidated
2019
US$
303,183
497,518
37,872
149,813
243,364
243,364
2018
US$
408,949
90,918
42,371
118,716
-
-
Commission was paid in relation to the revenue generated form the LaLiga Hero of the Month
competitions in Indonesia (please refer to “Significant changes in state of affairs”).
5.
Employee and consulting expenses
Salary and wages
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 year attributed to continued operations
Loss attributed to discontinued operations
Loss for the year attributable to ordinary shareholders
32
Consolidated
2019
US$
844,977
844,977
2018
US$
477,875
477,875
Consolidated
2019
US$
2018
US$
2,276,625
-
2,276,625
3,644,205
691,361
4,335,566
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
Weighted average number of shares
2019
No. of shares
2018
No. of shares
Weighted average number of ordinary shares for basic and
diluted loss per share
245,674,218
235,191,364
Loss per share
Basic and diluted loss per share for continued operations
(US cents)
Basic and diluted loss per share for discontinued operations
(US cents)
Basic and diluted loss per share (US cents)
0.93
-
0.93
1.55
0.29
1.84
(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 12, 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
2019
US$
2018
US$
Income tax recognised in profit or loss
Prima facie tax benefit on operating loss before income tax at
27.5%
(2018: 27.5%)
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
(626,072)
(1,174,798)
61,417
715,698
564,655
-
459,100
-
The consolidated entity has US$8,034,788 (2018: US$5,981,498) tax losses arising in Australia
that are available indefinitely for offset against future profit of the Group in which the losses arose.
The potential deferred tax asset of US$1,209,566 (2018: US$644,911), arising from tax losses and
temporary differences (as disclosed above), has not been recognised as an asset because
recovery of tax losses and temporary differences is not considered probable given the development
stage of the company’s app.
The potential deferred tax asset will only be obtained if:
•
•
the Group derives future assessable income of a nature and an amount sufficient to enable
the benefit to be realised;
the Group continues to comply with the conditions for deductibility imposed by tax legislation;
and
• no changes in tax legislation adversely affect the Group in realising the benefit from the
related deduction for the losses.
33
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
8. Cash and cash equivalents
Cash at bank
9. Trade and other receivables
Trade receivables
Less: allowance for expected credit losses
Other receivables
Consolidated
2019
US$
2018
US$
49,781
49,781
323,333
323,333
Consolidated
2019
US$
2018
US$
158,161
(158,161)
44,246
44,246
-
-
1,411
1,411
Allowance for expected credit losses
The consolidated entity has recognised a loss of US$158,161 (2018: nil) in profit or loss in respect of
the expected credit losses for the year ended 30 June 2019.
Movements in the allowance for expected credit losses are as follows:
Opening balance
Additional provisions recognised
Closing balance
Credit Risk
Consolidated
2019
US$
2018
US$
-
158,161
158,161
-
-
-
The maximum exposure to credit risk at balance date is the carrying amount (net of allowance for
expected credit losses) 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
Foreign exchange differences
Consolidated
2019
US$
2,086
(575)
(4)
1,507
2018
US$
13,806
(8,799)
-
5,007
34
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
Consolidated
Balance as at 1 July 2018
Additions
Disposals
Depreciation expense
Foreign exchange differences
Balance as 30 June 2019
Balance at 1 July 2017
Additions
Depreciation expense
Balance as 30 June 2018
11. Other assets
Equipment
US$
5,007
2,086
(5,007)
(575)
(4)
1,507
9,609
-
(4,602)
5,007
Other assets of US$140,260 is a bond paid to the Northern Territory Racing Commission (NTRC) for the
grant by the NTRC of a Sports Bookmakers Licence to Pay-to-Play Australia Pty Ltd. Other assets are
classified as non-current assets as the bond will remain for the term of the Licence. As at 30 June 2019
the application for the Sports Bookmakers Licence is being reviewed by the NTRC.
12. Trade and other payables
Current Payables
Trade payables
Receipts for shares not issued at year end
Accrued expenses
Other payables
Consolidated
2019
US$
497,640
455,144
47,147
257,086
1,257,017
2018
US$
137,806
-
165,836
251,178
554,820
(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.
35
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
13. Contributed Equity
(a) Share capital
2019
Number
2019
US$
2018
Number
2018
US$
Ordinary fully paid shares
270,269,397 10,097,370 249,370,229 8,559,488
(b) Movements in ordinary shares
Opening balance
Shares issued at US$0.063 per share ₁
Shares issued at US$0.039 per share ₂
Shares issued at US$0.039 per share ₂
Shares issued at US$0.038 per share ₂
Transaction cost on share issue
Shares issued at US$0.031 per share ₂
Shares issued at US$0.052 per share ₃
Shares issued at US$0.041 per share ₂
Shares issued at US$0.051 per share ₃
Shares issued at US$0.036 per share ₂
Shares issued at US$0.081 per share ₄
Shares issued at US$0.142 per share ₆
Shares issued at US$0.078 per share ₄
Shares issued at US$0.071 per share ₅
Shares issued at US$0.035 per share ₂
Shares issued at US$0.061 per share ₇
Transaction cost on share issue
(ii)
(iv)
(vi)
(viii)
(ii)
(i)
(iii)
(v)
(vii)
(vii)
(ix)
(x)
(xi)
(xii)
(xiii)
(xiv)
(xii)
249,370,229
-
-
-
-
-
-
-
-
-
-
1,000,000
3,582,500
1,500,000
10,808,334
3,508,334
500,000
-
8,559,488 222,841,657 7,209,342
782,800
12,500,000
8,446
214,286
27,146
700,000
4,330
114,286
(17,516)
-
108,010
3,500,000
232,491
4,500,000
82,204
2,000,000
51,190
1,000,000
71,045
2,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
81,224
508,213
117,035
764,797
124,125
30,311
(87,823)
270,269,397 10,097,370 249,370,229 8,559,488
₁ Issue price AU$0.08 translated to US$ at grant date
₅ Issue price AU$0.10 translated to US$ at grant date
₂ Issue price AU$0.05 translated to US$ at grant date
₆ Issue price AU$0.20 translated to US$ at grant date
₃ Issue price AU$$0.07 translated to US$ at grant date
₇ Issue price AU$0.085 translated to US$ at grant date
₄ Issue price AU$0.11 translated to US$ at grant date
(i) On 2 November 2017, 3,500,000 shares were issued to Mr Randhawa following the conversion of 3,500,000
performance rights.
(ii) On 10 January 2018, the Group issued 12,500,000 shares to IPV Capital at an issue price of AU$0.08 per share
(iii) On 10 January 2018 the Group issued the following shares;
• 1,500,000 shares to Mr Flintoft (500,000 shares in consideration for the engagement of Mr Flintoft and
1,000,000 shares following the conversion of 1,000,000 performance rights), and
3,000,000 shares in consideration for the engagement of Mr Tony Wee.
•
(iv) On 7 February 2018, the Group issued 214,286 shares following the exercise of 214,286 options each exercisable at
AU$0.05 and expiring 31 August 2019.
(v) On 7 February 2018, 2,000,000 shares were issued to Mr Tony Wee following the conversion of 2,000,000
performance rights.
(vi) On 2 March 2018, the Group issued 700,000 shares following the exercise of 700,000 options each exercisable at
AU$0.05 and expiring 31 August 2019.
(vii) On 2 March 2018, the Group issued the following shares
•
•
1,000,000 shares to Mr Chris Flintoft following the conversion of performance rights, and
2,000,000 shares to Mr Tony Wee following the conversion of 2,000,000 performance rights.
(viii) On 28 May 2018, the Group issued 114,286 shares following the exercise of 114,286 options each exercisable
at AU$0.05 and expiring 31 August 2019.
(ix) On 12 July 2018, the Group issued 1,000,000 ordinary shares and 1,500,000 performance rights in consideration for
the engagement of Mr Flintoft as the Group’s Chief Digital Officer.
36
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
(x) On 3 October 2018, the Group issued 3,582,500 ordinary shares at an issue price of AU$0.20 per share.
(xi) On 3 October 2018, 1,500,000 shares were issued to Mr Flintoft following the conversion of 1,500,000 performance
rights.
(xii) On 8 February 2019, the Group issued 10,808,334 ordinary shares at an issue price of AU$0.10 per share.
(xiii) On 8 February 2019, the Group issued 3,508,334 shares following the exercise of 3,508,334 options each exercisable
at AU$0.05 and expiring 31 August 2019.
(xiv) On 27 February 2019, the Group issued the following shares;
• 250,000 shares to Mr Giteau in consideration for being appointed as a SportsHero Rugby Ambassador, and
• 250,000 shares to Mr Mitchell in consideration for being appointed as a SportsHero Rugby Ambassador
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Group
in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no
par value and the Group does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon
a poll each share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
When managing capital, management’s objective is to ensure the entity continues as a going concern as well
as to maintain optimal returns to shareholders and benefits for other stakeholders. Management also aims to
maintain a capital structure that ensures the lowest cost of capital available to the entity.
In order to maintain or adjust the capital structure, the entity may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares, enter into joint ventures or sell assets.
The entity does not have a defined share buy-back plan.
No dividends were paid in 2019 (2018: nil) and no dividends are expected to be paid in 2020.
There is no current intention to incur debt funding on behalf of the Group
The Group is not subject to any externally imposed capital requirements.
14. Reserves
Reserves
Share-based payments reserve
As at 1 July 2018
Share based payments
Conversion of rights
As at 30 June 2019
Foreign currency reserve
As at 1 July 2018
Foreign currency translation
As at 30 June 2019
Nature and purpose of reserves
Share-based payment reserve
Consolidated
2019
US$
2018
US$
97,751
111,799
(117,035)
92,515
16,682
445,235
(364,166)
97,751
(117,415)
(38,975)
(156,390)
32,594
(150,009)
(117,415)
The share-based payments reserve records the value of share options and performance rights issued by the
Group.
37
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
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
Operating loss after tax
(2,276,625)
(4,335,566)
Consolidated
2019
US$
2018
US$
Add non-cash items:
Depreciation and amortisation
Loss on Disposal of property plant and equipment
Share-based payments expense
Impairment expense
Impairment of intangible assets
Changes in net assets and liabilities:
Movement in receivables
Movement in payables
Share of loss on joint venture
Net cash flow used in operating activities
(b) Non-cash financing and investing activities
Shares issued for provision of services
16. Discontinued Operations
575
5,007
223,333
158,161
-
504,602
-
624,340
-
1,063,889
(329,828)
354,503
10,654
(1,854,220)
(476)
320,012
-
(1,823,199)
Consolidated
2019
US$
228,570
228,570
2018
US$
-
-
On 29 June 2018, the consolidated Group terminated all employees of Sportshero Information
Technology (Shanghai) Co Limited and ceased operations. The subsidiary was reported as discontinued
operations in the financial statements for the year ending 30 June 2018. Financial information relating to
the discontinued operations for the period to the date of disposal is set out below.
(a) Financial performance for the disposal entity
The financial performance information is presented for the 12 months ended 30 June 2019 and the year
ended 30 June 2018.
38
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
Income
Other revenue
Expenses
Administration expenses
Employee and consulting expenses
Loss before income tax expense
Income tax expense
Loss after tax expense for discontinuing operations
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Total comprehensive loss for the year
(b) Carrying values of Assets and Liabilities in the disposal entity
Cash and cash equivalents
Other receivables
Total Assets
Net Assets
2019
US$
-
-
-
-
-
-
-
-
2019
US$
-
-
-
-
2018
US$
-
(165,246)
(526,115)
(691,361)
-
(691,361)
-
(691,361)
2018
US$
65
11,358
11,423
11,423
For the year ending 2018 liabilities of US$324,338 relating to discontinued operations were to be absorbed
by the parent entity and have not been included in the discontinued operations note.
17. Parent Information
ASSETS
Current assets
Non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
TOTAL LIABILITIES
Parent
2019
US$
2018
US$
59,700
247,266
164,883
224,583
-
247,266
1,221,183
460,912
1,221,183
460,912
NET (LIABILITIES)/ASSETS
(996,600) (213,646)
39
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
Loss for the year
Total comprehensive loss
7,597,370 6,059,488
(19,645)
(24,437)
(8,569,533)
(996,600)
(6,253,489)
(213,646)
(2,316,044)
(3,607,744)
(2,316,044)
(3,607,744)
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2019 (2018: US$91,461).
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment at as 30 June 2019
and 30 June 2018.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as
disclosed in note 2.
18. Details of Associates and Joint Venture entities
Name of associate / joint venture
Pay-to-Play Australia Pty Ltd
Group's aggregate share of associates and joint venture
entities' profit /(loss) (where material)
Profit/(loss) from ordinary activities before income tax
Income tax on operating activities
Reporting
entity's
percentage
holding
2019
%
2018
%
50%
-
Contribution to
profit/(loss)
(where material)
2018
2019
US$
US$
-
(10,654)
(10,654)
-
-
-
The above joint venture is accounted for using the equity method in the consolidated financial statements.
19. 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
W Johnson
C Green
Non-Executive Director and Chair
Director and CEO
Non-Executive Director
Non-Executive Director
All of the above persons were key management personnel during the year ended 30 June 2019.
40
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
(b) Key management personnel remuneration
Short-term employee benefits
Share based payments
(c) Payables to key management personnel
Amounts payable to Directors and Director related entities
at the end of the financial year, included in current
liabilities
(d) Other transactions with key management personnel
Consolidated
2019
US$
245,051
-
245,051
2018
US$
176,099
-
176,099
35,049
4,818
During the year the Group paid rent of US$4,293 (2018: US$4,264) to Mr Higginson for the provision
of the Group’s registered and principal office.
There were no other sale or purchase related transactions between the Group and key management
personnel during the year ended 30 June 2019 (2018: nil).
(e) Other transactions with related parties
During the year the Group reimbursed Noblemen Ventures Pty Ltd (an entity controlled by Mr
Johnson) for costs of US$21,466 (2018: Nil).
There were no other transactions with related parties throughout the year.
(f) Other Entities
There were no other transaction with other entities.
20. Share based payments
Recognised share-based payment expenses
Consolidated
2019
US$
2018
US$
Shares issued for services rendered
Performance rights vesting over period – issued in current year
111,534
117,035
179,105
-
Performance options vesting over period – issued in prior year
-
35,272
Forfeiture of performance options issued in prior year
Forfeiture of performance rights issued in prior year
Performance rights vesting over a period – issued in prior year
(42,586)
(24,429)
61,779
223,333
-
-
409,963
624,340
41
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
Employee share option plan
The Group has established an Employee Share Option Plan that allows for share options to be
granted to eligible employees and officers of the Group. 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 during the year at no consideration, do not have an exercise
price and will lapse if the vesting conditions are not met. Details of the performance rights issue
and their vesting conditions are set out below:
2019
i)
1,500,000 shares will be issued to Chief Digital Officer, Chris Flintoft for the re-design of the software and
upgrade of application to include new sports, such as cycling, AFL and rugby – vested on 30 September
2018,
2018
ii) 1,000,000 shares will be issued to the consultant (Mr Chris Flintoft) for the development of a
implementation plan and strategy for Version 3 SportsHero app which delivers an even better user
experience than improved Version 2.4 of the app – vested before 31 December 2017;
iii) 1,000,000 shares will be issued to the consultant (Mr Chris Flintoft) for the delivery on or before 7/2/18 of
an implementation plan and strategy for the introduction of a SportsHero cryptocurrency/coin – vested on
10 January 2018;
iv) 1,500,000 shares will be issued based on the consultant (Mr Chris Flintoft) for the successful release to
the market on or before 31.5.18 of Version 3 of the SportsHero app that delivers as per milestone 1 and
2 above – lapsed before 30 June 2018.
v) 2,000,000 shares will be issued to Mr Tony Wee based on the market capitalisation of the Group
increasing to $30,000,000.
vi) 2,000,000 shares will be issued to Mr Tony Wee based on the market capitalisation of the Group
increasing to $40,000,000.
vii) 2,000,000 shares will be issued to Mr Tony Wee based on the market capitalisation of the Group
increasing to $50,000,000.
viii) 2,000,000 shares will be issued to Mr Tony Wee based on the market capitalisation of the Group
increasing to $60,000,000.
Set out below are performance rights issued in current financial year
Grant
Date
12/07/18
Expiry
Date
30/09/18
Share price at
grant date ***
0.011
Rights
issued
1,500,000
FV at grant
date (US$)
117,035
Probability
100%
i
Following performance rights were issued in prior year
Grant
Date
8/12/17
8/12/17
8/12/17
8/12/17
8/12/17
8/12/17
8/12/17
Expiry
Date
31/12/17
7/2/18
31/5/18
8/12/19
8/12/19
8/12/19
8/12/19
Share price at
grant date ***
0.05
0.05
0.05
0.05
0.05
0.05
0.05
Rights
issued
1,000,000
1,000,000
1,500,000
2,000,000
2,000,000
2,000,000
2,000,000
FV at grant
date (US$)
51,173
51,173
76,759
80,853
71,022
62,803
56,135
Probability
100%
100%
-
N/A
N/A
N/A
N/A
ii
iii
iv *
v **
vi **
vii**
viii**
* Performance condition was not met and such the rights were forfeited.
** Rights are market-based condition and therefore no probability was assigned. On 7 February 2018, 2,000,000
shares were issued upon reaching the condition. The full expense was recognised in this period.
*** Share price has been converted to US$ at grant date.
42
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
(b) Performance options
The following performance options were issued in financial year 2018 for no consideration and will
lapse if the vesting conditions are not met. In current financial year these options were forfeited as
the vesting conditions were not met.
i)
1,000,000 options to be granted exercisable at AU$0.20 expiring on 1 February 2021 subject to
1,000,000 cycling users within 36 months.
The following performance options were granted but not issued in financial year 2018. In current
financial year these options were forfeited as the vesting conditions were not met. Details of the
option issues and their vesting conditions are set out below:
i)
ii)
1,000,000 options to be granted exercisable at AU$0.30 expiring on February 2022 subject to
2,000,000 users and US$4m revenue generated within 24 months; and
1,000,000 options to be granted exercisable at AU$0.30 expiring on February 2023 subject to
4,000,000 users and US$6m revenue generated within 36 months.
The following options were issued in the previous financial year:
Grant date
Type
Dividend yield (%)
Expected price volatility
Risk-free interest rate (%)
Expected life of options (years)
Option exercise price (AU$)
Option exercise price in AU$ translated to US$ at
grant date
Share price at grant date AU$
Share price in AU$ translated to US$ at grant date
Number of options issued
Probability
FV at grant date (AU$)
FV at grant date (US$)
1/2/18
Consultant
Tranche 1
-
100%
1.94%
3
0.20
0.16
0.19
0.15
1,000,000
65%
75,963
58,897
The following options were granted but not issued in the previous financial year:
Grant date
Type
Dividend yield (%)
Expected price volatility
Risk-free interest rate (%)
Expected life of options (years)
Option exercise price (AU$)
Option exercise price in AU$ translated to US$ at
grant date
Share price at grant date AU$
Share price in AU$ translated to US$ at grant date0
Number of options issued
Probability
FV at grant date (AU$)
FV at grant date (US$)
28/2/18
Consultant
Tranche 2
-
100%
2.11%
3
0.30
0.23
0.18
0.14
1,000,000
40%
94,415
73,204
28/2/18
Consultant
Tranche 3
-
100%
2.25%
4
0.30
0.23
0.18
0.14
1,000,000
70%
110,360
85,567
28/2/18
Consultant
Tranche 4
-
100%
2.38%
5
0.30
0.23
0.18
0.14
1,000,000
70%
122,819
95,227
43
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
2019
2018
Weighted
Average
Exercise
Price
US$
0.035
Number of
Options
71,971,428
-
-
(3,508,334)
68,463,094
-
-
-
-
At beginning of reporting year
Granted during the year
- Lapsed
- Early exercise of options expiring on
31 August 2019
Subtotal
- Lapsed
- Lapsed
- Lapsed
- Exercised
Balance the end of reporting year
Exercisable at end of reporting year
68,463,094
68,463,094
Weighted
Average
Exercise
Price
US$
0.16
0.79
0.96
0.77
0.038
Number of
Options
76,757,940
1,000,000
-
-
77,757,940
(30,000)
(30,000)
(4,697,940)
(1,028,572)
71,971,428
71,971,428
Not included in the total number of options are 3,000,000 performance options granted on 28 February
2018. These options have not been issued and have been forfeited in current financial year as the vesting
conditions as stated in Note 20(b) have not been met.
The following table sets out the movements in the number of options throughout the year:
Grant
date
Expiry
date
Balance
at start of
year
Number
issued
during
year
Number
exercised
during year
Number
expired
during
year
Balance
at end of
year
Number
exercisable
at end of
year
7 Feb 17 31 Aug 19 70,971,428
1,000,000
1 Feb 18 1 Feb 22
71,971,428
Total
-
-
-
(3,508,334)
-
(3,508,334)
- 67,763,094
- 1,000,000
- 68,763,094
67,763,094
1,000,000
68,763,094
21. Auditors’ Remuneration
Audit of the financial statements - RSM Australia Partners
Audit or review of financial 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
2019
US$
2018
US$
32,558
32,558
34,890
34,890
-
15,383
-
47,941
10,000
9,500
19,500
54,390
44
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
22.
Commitments
There were no outstanding commitments which are not disclosed in the financial statements
as at 30 June 2019 other than:
Office rental commitments
Within 1 year
After 1 year but not more than 5 years
Consolidated
2019
US$
73,660
25,843
99,503
2018
US$
-
-
-
23. 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.
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.
45
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
Floating
Interest
Rate
1 year or
less
US$
Over 1-
5 years
US$
Non-
interest
bearing
US$
Total
US$
0%
0%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
323,333
323,333
1,411
324,744
1,411
324,744
65
65
11,358
11,358
11,423
11,423
554,820
554,820
554,820
554,820
(230,076)
(230,076)
11,423
11,423
(218,653)
(218,653)
Floating
Interest
Rate
1 year or
less
US$
Over 1-
5 years
US$
Non-
interest
bearing
US$
Total
US$
Consolidated 2018
Note
8
9
16
16
12
Financial assets
Continuing operations
Cash and cash equivalents
Trade and other
receivables
Total financial assets for
continuing operations
Discontinuing operations
Cash and cash equivalents
Trade and other
receivables
Total financial assets
Financial liabilities
Continuing operations
Trade and other payables
Total financial liabilities
Net financial liabilities from
continuing operations
Net financial assets from
discontinuing operations
Net financial assets
Consolidated 2019
Note
Financial assets
Continuing operations
Cash and cash equivalents
Trade and other
receivables
8
9
0%
Total financial assets
Financial liabilities
Trade and other payables
12
Total financial liabilities
Net financial assets
46
-
-
-
-
-
-
-
-
-
-
49,781
49,781
44,246
44,246
94,027
94,027
1,257,017
1,257,017
1,257,017
(1,162,990)
1,257,017
(1,162,990)
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
Interest rate sensitivity
At 30 June 2019, 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 2018: Nil), as a result
of lower/higher interest income from cash and cash equivalents.
A sensitivity of 15% (15%: 2018) 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 2019 from around 1.50% to1.75% representing a 25 basis point decrease. Market
expectations are that interest rates in Australia are more likely to move down 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.
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
2019
US$
2018
US$
Note
12
544,787
303,642
The Group has cash and cash equivalents denominated in AU$ of US$22,299 (2018: US$284,189). At
30 June 2019, if USD/AUD rates had changed by 15% with all other variables held constant, loss for the
year and equity would have been US$3,345 lower/higher (30 June 2018: US$42,628), as a result of with
change in fair value of cash and cash equivalents.
A sensitivity of 15% (15%: 2018) 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.
24. 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
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.
47
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
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.
Consolidated - 2019
Revenue
Intersegment sales
Income
Total segment income
Intersegment eliminations
Total revenue
EBITDA
Profit before income tax expense
Income tax expense
Loss after income tax expense
Material items include:
Share based payments
Depreciation
Impairment
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Intersegment eliminations
Total liabilities
Consolidated - 2018
Revenue
Intersegment sales
Other revenue
Total segment revenue
Intersegment eliminations
Total revenue
EBITDA
Profit before income tax expense
Income tax expense
Loss after income tax expense
Material items include:
Share based payments
Impairment
Amortisation
Assets
Segment assets
Total assets
Australia
US$
Singapore China
US$
US$
Total
US$
-
463,168
463,168
-
463,168
-
623
623
-
623
(1,845,380)
(1,845,380)
-
(1,845,380)
(430,670)
(431,245)
-
(431,245)
223,333
-
158,161
-
557
-
224,583
224,583
35,834
35,834
-
-
-
-
-
-
-
-
-
-
-
-
-
-
463,791
463,791
-
463,791
(2,276,050)
(2,276,625)
-
(2,276,625)
223,333
557
158,161
260,417
260,417
1,093,044
-
1,093,044
2,196,522
(2,032,549)
163,973
-
-
-
3,289,566
(2,032,549)
1,257,017
Australia
US$
Singapore China
US$
US$
Total
US$
-
10,757
10,757
-
10,757
-
6,084
6,084
-
6,084
-
-
-
-
-
-
16,841
16,841
16,841
(1,560,684) (1,578,919) (691,361)
(1,560,684) (2,083,521) (691,361)
-
(1,560,684) (2,083,521) (691,361)
-
-
(3,830,964)
(4,335,566)
-
(4,335,566)
624,340
-
- 1,063,889
-
504,602
-
-
-
624,340
1,063,889
504,602
284,189
284,189
45,562
45,562
11,423
11,423
341,174
341,174
48
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
Liabilities
Segment liabilities
Intersegment eliminations
Total liabilities
25. Subsequent Events
80,140
-
80,140
1,820,888 1,040,470
(716,131)
324,339
(1,670,547)
150,341
2,941,498
(2,386,678)
554,820
On 1 July 2019, the Group announced a licensing agreement with Linius Technologies Limited whereby
SportsHero secured the rights to use the Linius video customisation technology. For further information,
please refer to the Operations Report.
On 24 July 2019, the Group issued 4,283,333 shares at an issue price of AU$0.10 per share raising
AU$428,333 in working capital. In addition, the Group raised a further AU$2,682,717 (before costs)
following the exercise of 53,654,334 options each exercisable at AU$0.05 and expiring 31 August 2019.
On 1 August 2019, the Group announced an extension of the partnership with PSSI for a term of 3 years,
plus the right to further extend for 2 further periods of 3 years (ie a total of 9 years).
On 21 August 2019, the Group announced that full exclusivity for Indonesia’s FIFA World Cup qualifying
match ticket sales, merchandise and other exclusive World Cup content had been secured for the Kita
Garuda mobile application.
On 12 September 2019, the Group completed the raising of AU$1,862,500 (before costs) pursuant to the
issue of 37,250,000 shares following the exercise of 37,250,000 options each exercisable at AU$0.05
and expiring 31 August 2019, and issued 20,000,000 options each exercisable at AU$0.10 and expiring
30 September 2021.
26. Contingent Liabilities and Contingent Assets
The Group does not have any contingent liabilities as at 30 June 2019.
For the prior financial year, the Group had following contingent liability:
During the period leading up to the 15 February 2017 ASX listing of SportsHero Limited, TradeHero Limited
incurred operational cost expenditure for and on behalf of SportsHero Limited. After considerable
negotiation and subject to SportsHero completing a further capital raising, SportsHero Limited agreed to
reimburse TradeHero an amount of US$91,461. This contingent liability was settled on 16 April 2019.
The Group does not have any contingent assets as at 30 June 2019 (2018: Nil).
27. 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
Country of
Incorporation
Principal Activities
Ownership
%
Australia
Parent
Australia
Singapore
Investment holding
Technology development &
marketing
100%
100%
49
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
NOTES TO THE FINANCIAL STATEMENTS
28. Company Details
The registered office and principal place of business of the Group is:
29 Brookside Place
Lota, QLD 4179
50
SPORTSHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
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 2019
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 Group 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 2019.
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 27th day of September 2019
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RSM Australia Partners
Level 32, Exchange Tower
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
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
To the Members of SportsHero limited
Opinion
We have audited the financial report of SportsHero Ltd (Company) and its subsidiaries (Group), which comprises
the consolidated statement of financial position as at 30 June 2019, 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 2019 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 (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 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
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
Going Concern
As disclosed in the financial statements, the Group
incurred a net loss of US$2,276,625 and had net cash
outflows from operating activities and investing activities
of US$1,854,220 and $37,363 respectively for the year
ended 30 June 2019. As at that date, the Group had net
current liabilities and net liabilities of US$1,162,990 and
US$996,600 respectively.
The Directors believe that it is reasonably foreseeable
that the Group will continue as a going concern and that
it is appropriate to adopt the going concern basis in the
preparation of the financial report.
The Directors’ assessment of the Group’s ability to
continue as a going concern is based on the factors
disclosed in Note 2(b) to the financial statements.
We determined this assessment of going concern to be
a key audit matter as it relies on the continued support
of shareholders to generate sufficient cashflows to
cover necessary expenditure.
Other information
How our audit addressed this matter
Our audit procedures included:
Assessing
the
and
mathematical accuracy of the cash flow budget
prepared by management;
appropriateness
Challenging
the
reasonableness of key
assumptions used, including the likelihood of
future capital raisings;
Considering potential downside scenarios and
the resultant impact on available funds;
Critically assessing the directors’ reasons of why
they believe it is appropriate to prepare the
financial report on a going concern basis; and
Assessing the adequacy of the going concern
disclosures in the financial report.
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 2019 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 2019.
In our opinion, the Remuneration Report of SportsHero Limited, for the year ended 30 June 2019, 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.
David Wall
Partner
RSM Australia Partners
Perth, Western Australia
27 September 2019
SPORTHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
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 9 September 2019.
Distribution schedules of security holders
Fully Paid
Shares
149
274
169
358
200
1 -1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Number of Holders
1,150
Holders of nonmarketable parcels
AU$ 0.20
Options
Expiring
1/02/21
-
-
-
-
1
1
There are 510 fully paid ordinary shareholders who hold less than a marketable parcel of shares.
Twenty largest shareholders
The names of the twenty largest shareholders are:
Number of
shares
60,000,000
16,650,000
12,500,000
11,535,762
8,357,143
6,798,671
6,405,511
5,757,143
5,396,156
5,142,156
5,076,099
5,018,310
5,000,000
4,400,000
4,242,857
4,000,000
4,000,000
4,000,000
3,885,510
3,425,000
181,591,019
% Held
20.62%
5.72%
4.30%
3.96%
2.87%
2.34%
2.20%
1.98%
1.85%
1.77%
1.74%
1.72%
1.72%
1.51%
1.46%
1.37%
1.37%
1.37%
1.34%
1.18%
62.41%
1 MyHero Limited
2
IPV Capital II HK Limited
3 Sunshore Holdings Pty Ltd
4 BNP Paribas Nominees Pty Ltd
5 TNL Lapping
6 Allgreen Holdings Pty Ltd
7 J & TW Dekker Pty Ltd
8 CJF Low
9 JP Morgan Nominees Australia Ltd
10 Timriki Pty Ltd
11 CJF Low
12 JG Lim
13 Kortana Pty Ltd
14 CJF Low
15 AS & NF Paul
16 One Managed Investment Funds Limited
17 One Managed Investment Funds Limited
18 L Kulisev
19 A Mehra
20 KM Lapping
55
SPORTHERO LIMITED
ANNUAL REPORT 30 JUNE 2019
SHAREHOLDER INFORMATION
Restricted securities
The Group has no Restricted Securities on issue.
Unquoted equity securities
Options to acquire fully paid shares at A$0.20 per share and expiring 1
February 2021
Performance rights to acquire fully paid shares
1,000,000
6,000,000
1
2
Number on
issue
Number of
holders
Substantial shareholders
MyHero Limited – as per Form 603 lodged with ASX on 10 Feb 2017
60,000,000
23.96%
IPV Capital II HK Limited – as per Form 603 lodged with ASX on 26 July
2019
16,650,000
5.72%
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 Group is treated as a public company for taxation purposes.
Franking credits
The Group has nil franking credits.
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