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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Wameja Limited | LSE:WJA | London | Ordinary Share | AU0000053472 | ORD NPV (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 7.90 | 7.80 | 8.00 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jan 2020 to Jan 2025
TIDMWJA
RNS Number : 1803U
Wameja Limited
31 March 2021
Wameja Limited
ABN 59 052 947 743
Full Year Statutory Accounts
for the year ended 31 December 2020
Full Year Statutory Accounts
for the year ended 31 December 2020
Contents
Results for announcement to the market 1
Directors' report
2
Auditor's independence declaration 11
Independent auditors report 12
Directors' declaration 16
Consolidated statement of profit or loss and other comprehensive income 17
Consolidated statement of financial position 18
Consolidated statement of changes in equity 19
Consolidated statement of cash flows 20
Notes to the consolidated financial statements 21
Results for announcement to the market
Hot Features
Premium
Results A$ '000
Loss after tax from ordinary activities
attributable to members down 31% to (9,159)
Loss after tax attributable to members down 31% to (9,159)
Dividends (distributions) Amount per Franked amount
security per security
Current period
Interim dividend declared Nil c 0%
Final dividend paid Nil c 0%
-------------------
Previous corresponding period (i)
Interim dividend declared Nil c 0%
Final dividend paid Nil c 0%
------------------ -------------
Record date for determining entitlements N/A
to the dividend.
Brief explanation of Key Information and Dividends
The Company is partnering with Mastercard to build the HomeSend
global payments hub. HomeSend enables cross-border transfer
between bank accounts, cards, mobile wallets, or cash outlets
from anywhere in the world. As a founding partner in the HomeSend
hub, Wameja helped conceive and bring the opportunity to market.
HomeSend is a joint venture of Wameja (35.68%) and Mastercard
(64.32%).
The net result of the consolidated entity from continuing operations
for the year ended 31 December 2020 was a loss after tax and
minority interest for the period of $9.159 million (2019: $13.2
million loss). Loss per share was 0.76 cents (2019: loss per
share 1.09 cents).
During the period, there was a net cash outflow of $3.366 million
(2019 year: net outflow of $15.5m) primarily resulting from
a net outflow from investing activities (mainly in relation
to investment to HomeSend) of $1.966 million. Cash at 31 December
2020 was $8.014 million.
On 10 September 2020, Wameja Limited entered into a Scheme Implementation
Agreement with Burst Acquisition Co. Pty Ltd, a company controlled
by Mastercard, for Burst Acquisition Co Pty Ltd to acquire all
of the issued capital of Wameja Limited for 0.08 per share by
way of a Scheme of Arrangement pursuant to Australian Law under
Part 5.1 of the Corporations Act ("the Scheme").
The Scheme has been delayed by the Notice of Potential Claim
issued by Seamless Distribution Systems AB referred to elsewhere
in this financial report ("the Notices"). The parties to the
Scheme Implementation Agreement are attempting to resolve the
issues raised by the Notices and are continuing to pursue completion
of the Scheme.
Directors' report
The Directors of Wameja Limited (the Company) submit herewith the financial report of Wameja Limited and its controlled entities (the Group) for the full year ended 31 December 2020. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows:
Directors
The names of the Directors who held office during or since the end of the year are:
John Conoley Non-executive Chairman James Brooke Non-executive Director Stephen Baldwin Non-executive Director James Hume Non-executive Director Thomas Rowe Company Secretary and non-executive Director
Company Secretary
Thomas Rowe has served as Company Secretary of Wameja Limited since 6 April 2011.
Principle activities
Together with Mastercard, Wameja Limited is a joint venture partner of the HomeSend global payment hub, enabling cross-border transfer between bank accounts, cards, mobile wallets, or cash outlets from anywhere in the world.
Review of Operations
This report is to be read in conjunction with other reports issued contemporaneously.
Wameja Limited is a public company listed on the Australian Securities Exchange (ASX:WJA) and the London Stock Exchange (AIM) (LSE:WJA).
The Company is partnering with Mastercard to build the HomeSend global payments hub. HomeSend enables cross-border transfer between bank accounts, cards, mobile wallets, or cash outlets from anywhere in the world. As a founding partner in the HomeSend hub, Wameja helped conceive and bring the opportunity to market. HomeSend is a joint venture of Wameja (35.68%) and Mastercard (64.32%).
The net result of the consolidated entity for the year ended 31 December 2020 was a loss after tax and minority interest of $9.159 million (2019: $13.2 million loss). Loss per share was 0.76 cents (2019: loss per share 1.1 cents).
During the period, there was a net cash outflow of $3.366 million primarily resulting from a net outflow from investing activities (mainly in relation to investment to HomeSend) of $1.966 million. Cash at 31 December 2020 was $8.014 million.
On 10 September 2020, Wameja Limited entered into a Scheme Implementation Agreement with Burst Acquisition Co. Pty Ltd, a company controlled by Mastercard, for Burst Acquisition Co Pty Ltd to acquire all of the issued capital of Wameja Limited for 0.08 per share by way of a Scheme of Arrangement pursuant to Australian Law under Part 5.1 of the Corporations Act ("the Scheme").
The Scheme has been delayed by the Notice of Potential Claim issued by Seamless Distribution Systems AB referred to elsewhere in this financial report ("the Notices"). The parties to the Scheme Implementation Agreement are attempting to resolve the issues raised by the Notices and are continuing to pursue completion of the Scheme.
Subsequent events
The impact of the Coronavirus (COVID 19) pandemic is ongoing and while COVID -- 19 has been financially neutral for the Group up to 31 December 2020, it is not practicable to estimate the extent of the potential impact, positive or negative, after the reporting date. The situation is rapidly developing and is dependent on measures imposed by the governments and authorities around the world, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided.
Based on the information available to the directors as at the date of this financial report, there are no significant factors identified which would impact on the carrying value of the Group's investment in associate due to COVID-19. However, the directors consider that prolonged general economic impacts arising from COVID-19 may have a negative impact on the operations of the Group's associate. This in turn may impact the recoverability of the Group's carrying value of the investment in associate going forward.
Directors' report
Subsequent events (continued)
On 18 March 2021, Wameja Limited subscribed for a further EUR1,784,118 of shares in HomeSend SCRL. The equity contribution is part of a EUR6,000,000 capital raise with Mastercard agreeing to contribute an additional EUR1,000,000 over and above its proportionate interest in HomeSend SCRL. The funds from the capital raise are to be used to support the operational expenses of the HomeSend 2021 business plan and its minimum equity requirements into H2 2021.
No other matter or circumstance has occurred subsequent to year end that has significantly affected, or may significantly affect, the operations of the Company, the results of those operations or the state of affairs of the entity in subsequent financial years.
Future developments
To the extent that the disclosure of information regarding likely developments in the operations of the Group in future financial years, and the expected results of those operations is likely to result in unreasonable prejudice to the consolidated entity, such information has not been disclosed in this report.
Environmental regulations
The consolidated entity operates primarily within the technology and telecommunication sector and conducts its business activities with respect for the environment while continuing to meet the expectations of shareholders, customers, employees and suppliers.
During the year under review, the Directors are not aware of any particular or significant environmental issues which have been raised in relation to the consolidated entity's operations.
Dividends
No dividends were declared or paid during the financial year (2019: nil).
Share Options
Wameja Limited Employee Share Option Plan
The Company has an ownership-based remuneration scheme for executive directors, key management personnel and employees. In accordance with the provisions of the scheme, executive directors and employees may be granted options to acquire ordinary shares in the Company. The exercise of any share options is not dependent on any performance criteria, however, is dependent on a period of service relative to the vesting dates.
Share options granted to directors and senior management
During the year and up to the date of this report the Company did not grant additional shares or options.
Details of unissued shares under option as at the date of this report are:
Number of
Issuing Entity shares Class of Exercise price Expiry date of
under option shares of option options
Wameja Limited 3,650,000 Ordinary $0.21 08 Aug 2021
Wameja Limited 6,000,000 Ordinary $0.21 13 Mar 2022
Wameja Limited 3,350,000 Ordinary $0.21 24 Nov 2022
Details of the options that have expired or lapsed during the financial year and up to the date of this report are:
Number of shares
Issuing Entity Option series under option Expiry date Date options expired/lapsed
of options
Wameja Limited Issued 07 Apr 3,000,000 14 Mar 2021 14 Mar 2021
2016
-------------------------- ------------------- ----------------- ------------- -----------------------------
Wameja Limited Issued 08 Aug 1,575,000 14 Mar 2021 14 Mar 2021
2016
-------------------------- ------------------- ----------------- ------------- -----------------------------
Wameja Limited Issued 15 Jun 15,000,000 30 Sep 2020 30 Sep 2020
2018
-------------------------- ------------------- ----------------- ------------- -----------------------------
Wameja Limited Issued 05 Sep 5,000,000 30 Sep 2020 30 Sep 2020
2019
-------------------------- ------------------- ----------------- ------------- -----------------------------
During the financial year and up to the date of this report, there were no options exercised (2019: nil).
Directors' report
Indemnification of officers and auditors
During the financial year, the Company paid a premium in respect of a contract insuring the directors of the company (as named above), the Company secretary, and all officers of the Company and of any related body corporate against any liability incurred as a director, secretary or officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability cover and the amount of the premium.
The Company has agreed to indemnify the directors of the Company for any liability incurred as a director or officer, to the extent permitted by the Corporations Act 2001.
The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate, against any liability incurred by such an officer or auditor.
Directors' attendance at Board and Committee meetings held during the financial year
Board of Directors Audit Committee Directors Held (*) Attended Held(*) Attended Stephen Baldwin 5 5 2 2 John Conoley 5 5 2 2 Tom Rowe 5 5 - - Jamie Brooke 5 5 - - James Hume 5 5 - -
Held during term of director's appointment to Board, Audit Committee. The Remuneration and Nominations Committee was disbanded in January 2020 when the company ceased to have any employees.
Non-audit services
The directors are satisfied that the provision of non-audit services, during the financial year, by the auditor (or by another person or firm on the auditor's behalf) is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
The Audit Committee assesses the provision of non-audit services by the auditors to ensure that the auditor independence requirements of the Corporations Act 2001 in relation to the audit are met.
Details of amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are outlined in Note 5 to the financial statements.
The directors are of the opinion that the services as disclosed in Note 5 to the financial statements do not compromise the external auditor's independence, based on advice received from the Audit Committee, for the following reasons:
-- all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and
-- none of the services undermine the general principles relating to auditor independence as set out in APES 110 'Code of Ethics for Professional Accountants' issued by the Accounting Professional & Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards.
Auditor's Independence Declaration
The lead auditor's independence declaration under s 307C of the Corporations Act 2001 is set out on page 11 for the year ended 31 December 2020.
Rounding of Amounts
The Consolidated Group has applied the relief available to it in ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191 and accordingly certain amounts in the financial report and the directors' report have been rounded off to the nearest $1,000.
Directors' report
Remuneration Report (Audited)
Determining remuneration policy for directors and key management personnel, and its relationship to Wameja's performance
The Company is listed on both the Australian Securities Exchange and the London Stock Exchange (AIM). It
is an international group which is faced with all of the market pressures that flow in such circumstances. It
must compete successfully with other international organisations that are substantially larger and which
have the ability to draw on enormous resources. Our employees are based in diverse parts of the globe and
regularly must travel to work in remote locations. The remuneration policies must be appropriate to these
circumstances.
In determining the appropriate remuneration policies for the Group, the Board believes that the salary
packages must be sufficient, in the international marketplace in which the Group operates, to attract, retain
and motivate high calibre, hard-working, dedicated employees, who have the knowledge and skills
appropriate for the business. In this regard, a component of the salary package for employees may be paid
after the results of a financial year are completed, and the entitlement is based primarily on the results
achieved by the Group. The Board's broad policy was implemented through its Remuneration and
Nominations Committee during the period that the Company had employees.
The Board had no executive management by 29 January 2020 (with all directors being non-executive from that date).
Director and other key management personnel details
The following persons acted as key management personnel of the Company and the Group during or since the end of the financial year:
-- John Conoley (Executive Chairman until 29 January 2020; now non-executive Chairman ) -- Stephen Baldwin (Non-executive director) -- Jamie Brooke (Non-executive director) -- Tom Rowe (Company Secretary and non-executive director)
-- James Hume (Chief Operational Officer until 29 January 2020; now non-executive director ) - appointed as a director on 23 October 2019
Except as noted, the named persons held their current positions for the whole of the financial year and since the end of the financial year.
Elements of key management personnel remuneration
Non-executive directors are paid directors' fees. The Board reviews the level of fees from time to time and sets individual non-executive directors fees based on the levels of fees for comparable listed companies in the appropriate parts of the world.
The non-executive directors are appointed by either the Board or shareholder vote and any appointment is subject to re-election on retirement required at Annual General Meetings.
Executive directors and other key management personnel remuneration comprise both Short Term Incentive (STI) and Long-Term Incentive (LTI) components. The STI takes the form of a cash bonus and the LTI comprises the issue of share options under the Wameja Limited Employee Share Option Plan.
a) No STI payments were made in 2020 or up to the date of this report.
b) The LTI (share option) component contains an element of reward to incentivise loyalty and continuity of
service to the Company through the vesting of options over a defined period with eligibility being dependent
on continued employment and performance of the Group.
Directors' report
Elements of remuneration which are dependent on Company performance
The performance options granted to the key management personnel are subject to the achievement of certain performance hurdles linked to the company's volume weighted average share price. These performance options have been granted to the Non-Executive Chairman and certain other management personnel and is in accordance with the Group's remuneration policy
The tables below set out summary information about the Group's earnings and movements in shareholder wealth for the five years to 31 December 2020.
$'000 $'000 $'000 $'000 $'000
31 December 31 December 31 December 31 December 31 December
2020 2019 2018 2017 2016
$'000 $'000 $'000 $'000 $'000
--------------- --------------------- --------------------- -------------------- ------------------ -------------------
Revenue * - 6,531 11,185 12,240 21,577
Net
profit/(loss)
after tax (9,159) (13,190) (19,747) (37,167) (21,742)
--------------- --------------------- --------------------- -------------------- ------------------ -------------------
* Continuing and discontinued operations 31 31
31
31 31 31 31 December 31
December December December 2017 December
2020 2019 2018 2016
Share price at start $0.08 $0.08 $0.19 $0.10 $0.12
of year
Share price at end $0.12 $0.08 $0.08 $0.19 $0.10
of year
Continuing and discontinued
operations:
Earnings/(loss)
per share
(cents) - Basic (0.76) (1.1)
and Diluted
(2.1) (5.5) (6.0)
Continuing operations:
Earnings/(loss) (0.76) (0.9)
per share (cents)
- Basic and Diluted
(0.9) n/a n/a
------------------- -------------------- -------------------- ---------------------- ------------------
(i) The Remuneration and Nominations Committee was disbanded in January 2020 when the company ceased to have any employees.
Directors' report
The group's key management personnel received, or will receive, the following amounts as compensation for their services as directors and key management personnel of the Group during the financial year:
Post
Employment Share based
Short-term employee benefits benefits payments
Bonus and
commission Percentage
(incl. of
variable Non- remuneration
2020 Salary pay monetary Superannuation Options Termination related to
& fees component) $ $ $ Benefits Total performance
$ $ $ $ %
------------------- ---------------------- ------------------- ----------------------------- ------------------------
Directors
S Baldwin 43,875 - - - - - 43,875 -
J Conoley (i) 92,512 - 17,280 2,014 116,973 4,777 233,556 -
T Rowe (ii) 251,303 - - - - - 251,303 --
J Hume (i) 67,363 - 12,598 - 16,678 - 96,639
J Brooke(i) 35,097 - 35,097
------------------- ---------------------- ------------------- ----------------------------- ------------------------ ----------------------- --------------- ---------------------------
Total 490,150 - 29,878 2,014 133,651 4,777 660,470
------------------- ---------------------- ------------------- ----------------------------- ------------------------ ----------------------- --------------- ---------------------------
(i) Paid in GBP and subject to foreign exchange fluctuations at Group level.
(ii) The fee disclosed relates to payments made to Capital Corporate Law ($251,303) where Tom Rowe has practised as a sole practitioner since 1 January 2017. The amount paid is for services provided by Tom Rowe in his capacity as company secretary, Non-executive Director and public officer of Wameja Limited, director and company secretary of Wameja Investments Pty Ltd and for legal services provided in Australia. Mr Rowe receives a non executive director fee, in accordance with the fees approved by the Board. All other services are invoiced on a time spent basis and on normal commercial terms. Fees for legal services comprise $96,240 of the total amount disclosed. A substantial amount of the non-legal fees relate to the management of various projects during the year.
Directors' report
The group's key management personnel received, or will receive, the following amounts as compensation for their services as directors and key management personnel of the Group during the financial year:
Post
Employment Share based
Short-term employee benefits benefits payments
Bonus and
commission Percentage
(incl. of
variable Non- remuneration
2019 Salary pay monetary Superannuation Options Termination related to
& fees component) $ $ $ Benefits Total performance
$ $ $ $ %
------------------- ---------------------- ------------------- ----------------------------- ------------------------
Directors
S Baldwin 62,791 - - - - - 62,791 -
J Conoley (i) 220,132 - 11,920 13,218 154,506 - 399,776 -
T Rowe (ii) 124,630 - - - - - 124,630 -
A Hayward (i) 144,575 - 7,009 7,260 71,017 37,635 267,496 -
J Brooke (i) 44,095 - - - - - 44,095 -
J Hume (i)(iii) 353,134 - 17,834 - 67,605 72,907 511,480 -
------------------- ---------------------- ------------------- ----------------------------- ------------------------ ----------------------- --------------- --------------------------
Total 949,357 - 36,763 20,478 293,128 110,542 1,410,268
------------------- ---------------------- ------------------- ----------------------------- ------------------------ ----------------------- --------------- --------------------------
(i) Paid in GBP and subject to foreign exchange fluctuations at Group level.
(ii) The fee disclosed relates to payments made to Capital Corporate Law ($124,630) where Tom Rowe has practised as a sole practitioner since 1 January 2017. The amount paid is for services provided by Tom Rowe in his capacity as company secretary, Non-executive Director and public officer of Wameja Limited, director and company secretary of Wameja Investments Pty Ltd and for legal services provided in Australia. Mr Rowe receives a non-executive director fee, in accordance with the fees approved by the Board. All other services are invoiced on a time spent basis and on normal commercial terms. Fees for legal services comprise $26,891 of the total fees disclosed.
(iii) Includes salary for January 2020 which was paid in December 2019 together with all entitlements
Directors' report
Directors' shareholdings
The following table sets out each director's or a related body corporate's relevant interest in shares of the Company or a related body corporate as at the end of the financial year.
Balance as at Received on Share issues Acquired on market Balance at
31 December exercise of during the year financial
No. options No. No. year end
No. No.
Year to 31
December 2020
Stephen Baldwin
John Conoley 1,695,634 - - - 1,695,634
Tom Rowe 2,626,692 - - - 2,626,692
Jamie Brooke - - - - -
James Hume
* - - - - -
922,459 - - - 922,459
-
James
-
--------------------------------- --------------------------- ----------------------- -------------------- ----------------------------
Year to 31
December 2019
Andrew Hayward(#)
Stephen Baldwin - - - - -
John Conoley 1,695,634 - - - 1,695,634
Tom Rowe 2,233,228 - - 393,464 2,626,692
Jamie Brooke - - - - -
James Hume
* - - - - -
922,459 - - - 922,459
James
-
--------------------------------- --------------------------- ----------------------- -------------------- ----------------------------
(#) Andrew Hayward resigned as a director on 25 July 2019.
*James Hume was appointed a director on 23 October 2019.
Share-based payments granted as compensation
During the financial year, the following share-based payment arrangements were in existence.
Grant date Expiry date Exercise price Grant date fair
of options value
Option series
Issued 07 Apr 2016
(i) 07-Apr-16 2021 $0.21 $0.0468
---------------- ---------------- ------------------- --------------------
Issued 08 Aug 2016
(ii) 08-Aug-16 2021 $0.21 $0.0383
---------------- ---------------- ------------------- --------------------
Issued 12th April
2017 (iii) 12-Apr-17 2022 $0.21 $0.0331
---------------- ---------------- ------------------- --------------------
Issued 24th November
2017 (iv) 24-Nov-17 2022 $0.21 $0.0538
---------------- ---------------- ------------------- --------------------
Issued 15th June
2018 (v) 15-Jun-18 2020 $0.16 $0.0268
---------------- ---------------- ------------------- --------------------
Issued 5(th) September
2019 (vi) 5-Sep-19 2020 $0.16 $0.0059
---------------- ---------------- ------------------- --------------------
(i) Options issued in this series are executive options which vested on 14 March 2018 and expired on 14 March 2021.
(ii) Options issued in this series are executive options which vested on 08 August 2018. 1,575,000 options expired on 14 March 2021 and the remaining 3,650,000 options expire on 08 August 2021 .
(iii) Options issued in this series are executive options which vested on 13 March 2019 and expire on 13 March 2022.
(iv) Options issued in this series are executive options which vested on 24 Nov 2019 and expire on 24 Nov 2022.
(v) Performance options issued are executive options which vest on the 'testing date', subject to achievement of certain performance conditions and
satisfaction of the tenure conditions. The testing date is the earlier of 30 September 2020 or the date determined by the Board within 30 days following
the occurrence of a change in control of the company or the sale of the substantial part of the business. These options expired on 30 September 2020 following their failure to vest under the terms and conditions.
(vi) Performance options issued are executive options which vest on the 'testing date', subject to achievement of certain performance conditions and
satisfaction of the tenure conditions. The testing date is the earlier of 30 September 2020 or the date determined by the Board within 30 days following
the occurrence of a change in control of the company or the sale of the substantial part of the business. These options expired on 30 September 2020 following their failure to vest under the terms and conditions.
Directors' report
Share-based payments granted as compensation (continued)
There has been no alteration of the terms and conditions of the above share-based payment arrangements since the grant date. There have been variations to the expiry date following the resignation or termination of employment of some option holders, in accordance with the rules of the scheme .
Options issued to directors and key management personnel
Key management personnel receiving options are entitled to the beneficial interest under the option only if they continue to be employed with the Group at the time the option vests. Any exposure in relation to the risk associated with the movement in the underlying share price rests with the key management personnel.
A total of 16,000,000 performance options granted to key management personnel expired during the year (2019: nil). No options vested during the year (2019: 8,500,000).
Balance Granted Exercised/ Share Balance Balance Vested Vested Vested
at 1 as Expired Issues at vested but and during
January compen- 31 December at 31 not exercisable the
sation December exercisable at report year
date
No. No. No. No. No. No. No. No. No.
------------ ------------------ ---------------------------- --------- -------------------------- --------------------------- ------------------- -------------------------- ----------------
Year to 31
December
2020 - (12,000,000) - 8,500,000 8,500,000 - 8,500,000 -
J Conoley - (4,000,000) - 4,150,000 4,150,000 - 4,150,000 -
J Hume 20,500,000
8,150,000
------------ ------------ ------------------ ---------------------------- --------- -------------------------- --------------------------- ------------------- -------------------------- ----------------
Year to 31
December
2019 20,500,000 - - - 20,500,000 8,500,000 - 8,500,000 3,500,000
J Conoley 5,500,000 - - - 5,500,000 2,500,000 - 2,500,000 2,500,000
A Hayward 4,150,000 4,000,000 - - 8,150,000 4,150,000 - 4,150,000 2,500,000
J Hume -
------------ ------------------ ---------------------------- --------- -------------------------- --------------------------- ------------------- -------------------------- ----------------
Each executive share plan option converts into one ordinary share of Wameja Limited when the option is exercised and the exercise price paid. When options are issued, no amounts are paid or payable by the recipient of the option (refer Note 4). Options may be exercised at any time from the date of vesting to the date of expiry.
Signed in accordance with a resolution of the directors made pursuant to s.298 (2) of the Corporations Act 2001.
On behalf of the Board
John Conoley
Chairman
31 March 2021
The Board of Directors Wameja Limited Level 2, Pier 8/9 23 Hickson Road, Millers Point NSW 2000
31 March 2021
Dear Board Members,
Auditor's Independence Declaration to Wameja Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Wameja Limited.
As lead audit partner for the audit of the financial report of Wameja Limited for the year ended 31 December 2020, 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.
Yours faithfully
DELOITTE TOUCHE TOHMATSU
Rajnil Kumar
Partner
Chartered Accountants
Independent Auditor's Report to the Members of
Wameja Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Wameja Limited (the "Company") and its subsidiaries (the "Group") which comprises the consolidated statement of financial position as at 31 December 2020, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial 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:
-- Giving a true and fair view of the Group's financial position as at 31 December 2020 and of its financial performance for the year then ended; and
-- 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 & Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for 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.
Key Audit Matter How the scope of our audit responded to the Key Audit Matter
Recoverability of the carrying value of equity Our audit procedures included, but were not limited to:
accounted investment in HomeSend SCRL * assessing whether there were indicators of
As at 31 December 2020, the carrying value of the impairment;
Group's equity accounted investment HomeSend
SCRL totaled $23.6 million as disclosed in Note 7.
For the year ended 31 December 2020, the Group has * enquiring of the directors as to the current
recognised an equity accounted share of performance of the associate and the budgeted revenue
the HomeSend SCRL loss of $7.8 million. growth and profitability;
Significant judgment is required in determining
whether the recoverable amount of the equity
accounted investment is in accordance with the * evaluating the actual performance of the associate
relevant accounting standards. compared to the budget; and
* assessing the implied fair value of the equity
accounted investment based on the Scheme
Implementation Agreement entered into by the Company
on 10 September 2020 and the latest capital raising
by HomeSend SCRL.
We also assessed the appropriateness of disclosures made in
Note 1(h), (i) and Note 7 to the
financial statements.
-----------------------------------------------------------------
Other Information
The directors are responsible for the other information. The other information comprises the information included in the Group's annual report for the year ended 31 December 2020 but does not include the financial report and our auditor's report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, 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 has 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.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
-- Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
-- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
-- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
-- Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.
-- Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.
-- Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group's audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 5 to 10 of the Directors' Report for the year ended 31 December 2020.
In our opinion, the Remuneration Report of Wameja Limited, for the year ended 31 December 2020, 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.
Deloitte Touche Tohmatsu
Rajnil Kumar
Partner
Chartered Accountants
Parramatta, 31 March 2021
Directors' declaration
The directors declare that:
1. in the directors' opinion, there are reasonable grounds
to believe that the company will be able to pay its
debts as and when they become due and payable,
2. in the directors' opinion, the attached financial statements
are in compliance with International Financial Reporting
Standards, as stated in Note 1 to the financial statements,
and
3. in the directors' opinion, the attached financial statements
and notes thereto are in accordance with the Corporations
Act 2001, including compliance with accounting standards
and giving a true and fair view of the financial position
and performance of the consolidated entity.
This declaration is made in accordance with a resolution of the Board of Directors pursuant to Section 295(5) of the Corporations Act 2001.
On behalf of the Directors
John Conoley
Executive Chairman
London, 31 March 2021
Consolidated statement of profit or loss and other comprehensive income
for the year ended 31 December 2020
Year Ended Year Ended
31 December 31 December
2020 $'000 2019 $'000
Continuing operations
Interest income 60 70
Foreign exchange gain/ (loss) (17) 157
Administration expenses (1,423) (2,789)
Restructure and transaction related
costs - (1,412)
Share of profit/(loss) of associate (7,779) (6,596)
------------- -------------
Loss before tax 2 (9,159) (10,570)
Income tax expense 8 - -
------------- -------------
Loss for the period from continuing
operations (9,159) (10,570)
------------- -------------
Discontinued operations
Loss for the year from discontinued
operations 2 - (2,620)
------------- -------------
Loss for the year (9,159) (13,190)
------------- -------------
Other comprehensive income, net of
tax
Items that may be reclassified subsequently
to profit or loss
Exchange differences arising on the
translation of foreign operations (nil
tax impact) (542) (135)
Items that have been reclassified to
profit or loss:
Transfer from foreign exchange reserve
on disposal of subsidiary - (891)
------------- -------------
Total comprehensive income/ (loss)
for the period (9,701) (14,216)
------------- -------------
Loss attributable to:
Equity holders of the parent (9,159) (13,190)
------------- -------------
Total comprehensive income attributable
to:
Equity holders of the parent (9,701) (14,216)
------------- -------------
Earnings/(Loss) per share:
From continuing and discontinued operations
* Basic (cents per share) 12 (0.76) (1.1)
* Diluted (cents per share) 12 (0.76) (1.1)
From continuing operations
- Basic (cents per share) (0.76) (0.9)
- Diluted (cents per share) (0.76) (0.9)
Notes to the Financial Statements are included on pages 21 to 43
Consolidated statement of financial position
as at 31 December 2020
31 December 31 December
Note 2020 $'000 2019 $'000
Current Assets
Cash and cash equivalents 15 8,014 11,636
Other financial assets 6 - 4,239
------------------------- -------------------------
Total Current Assets 8,014 15,875
------------------------- -------------------------
Non-Current Assets
Investment in associates 7 23,585 25,463
Total Non-Current Assets 23,585 25,463
------------------------- -------------------------
Total Assets 31,599 41,338
------------------------- -------------------------
Current Liabilities
Trade and other payables 100 271
Total Current Liabilities 100 271
------------------------- -------------------------
Non-Current Liabilities
Provisions 100 -
Total Liabilities 100 271
------------------------- -------------------------
Net Assets 31,499 41,067
========================= =========================
Equity
Issued capital 9 212,326 212,326
Reserves 10 4,513 4,922
Accumulated losses 11 (185,340) (176,181)
------------------------- -------------------------
Equity attributable to owners of
the parent 31,499 41,067
Total Equity 31,499 41,067
========================= =========================
Notes to the Financial Statements are included on pages 21 to 43
Consolidated statement of changes in equity
for the year ended 31 December 2020
Foreign Attributable
Currency Equity-settled to owners
Issued Translation benefits Accumulated of the Non controlling
Capital Reserve Reserve Losses parent Interest Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance at 1
January 2020 212,326 879 4,043 (176,181) 41,067 - 41,067
------------------- -------------------- ----------------- --------------------- -------------------- ----------------- --------------------
Loss for the
year - - - (9,159) (9,159) - (9,159)
Exchange differences
arising on translation
of foreign operations - (542) - - (542) - (542)
------------------- -------------------- ----------------- --------------------- -------------------- ----------------- --------------------
Total comprehensive
income/(loss)
for the period - (542) - (9,159) (9,701) - (9,701)
------------------- -------------------- ----------------- --------------------- -------------------- ----------------- --------------------
Equity settled
payments - - 133 - 133 - 133
------------------- -------------------- ----------------- --------------------- -------------------- ----------------- --------------------
Balance at 31
December 2020 212,326 337 4,176 (185,340) 31,499 - 31,499
------------------- -------------------- ----------------- --------------------- -------------------- ----------------- --------------------
Balance at 1
January 2019 212,326 1,905 3,748 (162,991) 54,988 120 55,108
------------------- -------------------- ----------------- --------------------- -------------------- ----------------- --------------------
Loss for the
year - - - (13,190) (13,190) - (13,190)
Exchange
differences
arising on
translation
of foreign
operations - (135) - - (135) - (135)
Transfer from
foreign
exchange
reserve on
disposal
of subsidiary - (891) - - (891) - (891)
------------------- -------------------- ----------------- --------------------- -------------------- ----------------- --------------------
Total
comprehensive
income/(loss)
for the year - (1,026) - (13,190) (14,216) - (14,216)
Derecognition
of
Non-Controlling
Interest on
disposal - - - - (120) (120)
Equity settled
payments - - 295 - 295 - 295
------------------- -------------------- ----------------- --------------------- -------------------- ----------------- --------------------
Balance at 31
December 2019 212,326 879 4,043 (176,181) 41,067 - 41,067
------------------- -------------------- ----------------- --------------------- -------------------- ----------------- --------------------
Notes to the Financial Statements are included on pages 21 to 43
Consolidated statement of cash flows
for the year ended 31 December 2020
Consolidated
Year Ended Year Ended
31 December 31 December
2020 2019
Note $'000 $'000
------------- -------------
Continuing and Discontinued Operations
Cash Flows from Operating Activities
Receipts from customers - 7,198
Payments to suppliers and employees (1,400) (10,705)
Tax (paid)/ refund - (1,316)
Net cash used in operating activities 15 (1,400) (4,823)
------------- -------------
Cash Flows from Investing Activities
Investment in HomeSend joint venture
Company (6,090) (6,480)
Payment for property, plant and
equipment - (78)
Cash flow from disposal of subsidiaries,
net of cash disposed - 1,485
Repayments from/(advances to)
HomeSend joint venture Company 4,124 (4,239)
Software development costs - (1,367)
------------- -------------
Net cash used in investing activities (1,966) (10,679)
------------- -------------
Cash Flows from Financing Activities
Payment of dividends - -
Net cash used in financing activities - -
------------- -------------
Net Decrease in Cash and Cash Equivalents (3,366) (15,502)
Cash at the beginning of the period 11,636 27,451
Effects of exchange rate changes on
the balance of cash held in foreign
currencies (256) (313)
------------- -------------
Cash and Cash Equivalents at the end
of the period 8,014 11,636
============= =============
Notes to the Financial Statements are included on pages 21 to 43
Notes to the consolidated financial statements
1. SUMMARY OF ACCOUNTING POLICIES
Statement of compliance
The financial statements are general purpose financial statements which have been prepared in accordance with the Corporations Act 2001, Australian Accounting Standards and Interpretations, and comply with other requirements of the law.
The financial statements include the consolidated financial statements of the Group, comprising Wameja Limited (the Company/ Parent) and the entities it controlled at the end of, or during, the year. For the purposes of preparing the consolidated financial statements the Company is a for-profit entity. A description of the nature of the Group's operations and its principal activities are included in the directors' report, which is not part of the financial statements.
Compliance with Australian Accounting Standards ensures that the financial statements and notes of the Group comply with International Financial Reporting Standards ('IFRS') as issued by the International Accounting Standards Board ("IASB"). The financial statements were authorised for issue by the directors on the date of the signing of the directors' declaration.
Basis of preparation
The financial statements have been prepared on the historical cost basis, unless otherwise stated below. Historical cost is based on the fair values of the consideration given in exchange for goods and services. All amounts are presented in Australian dollars, unless otherwise noted.
The Company is a Company of the kind referred to in ASIC Corporations (Rounding in Financial / Directors' Reports) Instrument 2016/191 dated 24 March 2016, and in accordance with this Corporations Instrument amounts in the directors' report and the financial statements are rounded off to the nearest thousand dollars, unless otherwise indicated.
The following significant accounting policies have been adopted in the preparation and presentation of the financial statements:
(a) Cash and cash equivalents
Cash and cash equivalents include cash on hand and in banks, deposits held at call with banks and financial institutions and investments in money market instruments with original maturities of three months or less from the date of acquisition.
(b) Financial assets
All recognised financial assets that are within the scope of AASB 9 are required to be measured subsequently at amortised cost or fair value on the basis of the entity's business model for managing the financial assets and the contractual cash flow characteristics of the financial assets.
Financial assets classified as held-to-maturity and loans and receivables under AASB 9 that were measured at amortised cost continue to be measured at amortised cost under AASB 9 as they are held within a business model to collect contractual cash flows and these cash flows consist solely of payments of principal and interest on the principal amount outstanding.
(c) Financial instruments issued by the Group
Debt and equity instruments
Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual arrangement. An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.
Notes to the consolidated financial statements
1. SUMMARY OF ACCOUNTING POLICIES ( CONTINUED)
Transaction costs on the issue of equity instruments
Transaction costs arising on the issue of equity instruments are recognised directly in equity as a reduction of the proceeds of the equity instruments to which the costs relate. Transaction costs are the costs that are incurred directly in connection with the issue of those equity instruments and which would not have been incurred had those instruments not been issued.
Other financial liabilities
Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost using the effective interest method, recognising interest expense on an effective yield basis.
Derecognition of financial liabilities
A financial liability is de-recognised when the obligation under the liability is discharged, cancelled, or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss and other comprehensive income.
Trade payables
Trade payables are initially measured at fair value including transaction costs and are subsequently measured at amortised cost.
(d) Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax ("GST"), except:
i. where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or
ii. for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.
Cash flows are included in the statement of cash flows on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.
(e) Foreign currencies
The individual financial statements of each group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each group entity are expressed in Australian dollars, which is the functional currency of the Company and the presentation currency for the consolidated financial statements.
In preparing the financial statements of each individual group entity, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing on the dates of the transactions. At the end of each reporting period, monetary items that are denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Notes to the consolidated financial statements
1. SUMMARY OF ACCOUNTING POLICIES ( CONTINUED)
Exchange differences on monetary items are recognised in profit or loss in the period in which they arise except for exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur in the foreseeable future (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income/(loss) and reclassified from equity to profit or loss on repayment of the monetary items.
For the purpose of presenting these consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated into Australian dollars using exchange rates prevailing at the end of the reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income/(loss) and accumulated in equity (and attributed to non-controlling interests as appropriate).
Goodwill and fair value adjustments to identifiable assets acquired and liabilities assumed through acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences arising are recognised in other comprehensive income/(loss).
(f) Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) (referred to as 'the Group' in these financial statements). Control is achieved when the Company:
-- has the power over the investee; -- is exposed, or has rights to variable returns from its involvement with the investee; and -- has the ability to use its power to affect the returns.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.
The results of subsidiaries acquired or disposed of during the year are included in consolidated profit or loss from the effective date of acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.
All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.
Non-controlling interest in the net assets (excluding goodwill) of consolidated subsidiaries are identified separately from the Group's equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling interest's share of changes in equity since the date of the combination. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.
When the Group loses control of a subsidiary, the gain or loss on disposal recognised in profit or loss is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), less liabilities of the subsidiary and any non-controlling interests. All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as required/permitted by applicable AASB Standards).
Notes to the consolidated financial statements
1. SUMMARY OF ACCOUNTING POLICIES ( CONTINUED)
(g) Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant. Fair value is measured by use of either a Black-Scholes or binomial model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest.
(h) Investments in associates
An associate is an entity over which the group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, investments in associates are carried in the consolidated statement of financial position at cost and adjusted for post-acquisition changes in the Group's share of the net assets of the associate, less any impairment in the value of individual investments.
Losses of an associate in excess of the group's interest in that associate (which includes any long-term interests that, in substance, form part of the group's net investment in the associate) are recognised only to the extent that the group has incurred legal or constructive obligations or made payments on behalf of the associate.
An investment in an associate is accounted for using the equity method from the date on which the investee becomes an associate. On acquisition of the investment in an associate, any excess of the cost of the investment over the Group's share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is included within the carrying amount of the investment. Any excess of the Group's share of the net fair value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is recognised immediately in profit or loss in the period in which the investment is acquired.
The requirements of AASB 9 Financial Instruments: Recognition and Measurement are applied to determine whether it is necessary to recognise any impairment loss with respect to the Group's investment in an associate. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with AASB 136 Impairment of Assets as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount, any impairment loss recognised forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised in accordance with AASB 136 to the extent that the recoverable amount of the investment subsequently increases.
(i) Critical accounting judgments and key sources of estimation uncertainty
The directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group.
The following is the key assumption concerning the future, and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year:
Notes to the consolidated financial statements
1. SUMMARY OF ACCOUNTING POLICIES ( CONTINUED)
Carrying value of equity accounted investment in HomeSend SCRL
The Group assesses impairment of investment in associate whenever the events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. Recoverable amount is measured at the higher of the fair value less cost of disposal or value in use.
Significant judgment is required in determining whether the recoverable amount of the equity accounted investment is in accordance with the relevant accounting standards.
In assessing the carrying value, the directors have considered the performance of HomeSend SCRL compared to the budget for the current financial year, the forecast future performance of the associate, and the indicative valuation based on the Scheme of Arrangement entered into by the Company on 10 September 2020.
Based on the directors' assessment there were no indication of impairment in the carrying value of the Group's investment in associate as at 31 December 2020.
(j) Going Concern
The consolidated statement of profit or loss and other comprehensive income for the financial year ended 31 December 2020 reflects a loss after tax of $9.159 million (2019: $13.19 million), and the consolidated statement of cash flows reflects net cash outflows from operations of $1.400 million (2019: $4.823 million). The cash and cash equivalents balance of $8.014 million (2019: $11.636 million).
The Directors have prepared the cash flow forecast for the period through to 31 March 2022. The cash flow forecast indicates that the Group will have sufficient funding to operate as a going concern during the forecast period, and on this basis the Directors have prepared the financial statements on the going concern basis.
(k) Segment Information
AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance.
The Group operates in a single segment being the telecommunications software solutions business. Accordingly, all reported information in the financial report relates to this single segment.
(l) Issuance, Repurchased and repayment of Securities
During the year, the Company did not issue any shares (2019: nil).
Notes to the consolidated financial statements
1. SUMMARY OF ACCOUNTING POLICIES ( CONTINUED)
(m) Income tax
Current tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the year. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by the reporting date. Current tax for current and prior year is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).
Deferred tax
Deferred tax is accounted for in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base of those items.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are only recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax offsets can be utilised.
However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from goodwill.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year(s) when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Current and deferred tax for the year
Current and deferred tax is recognised as an expense or income in profit or loss, except when it relates to items credited or debited to other comprehensive income (loss) or directly to equity, in which case the deferred tax is also recognised in other comprehensive income (loss) or directly in equity. Where it arises from the initial accounting for a business combination it is taken into account in the determination of goodwill.
Notes to the consolidated financial statements
1. SUMMARY OF ACCOUNTING POLICIES ( CONTINUED)
(n) New, revised or amending Accounting Standards and Interpretations adopted:
In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for the current annual reporting period. The adoption of these new and revised Standards and Interpretations did not significantly affect the financial statements of the Group.
AASB 2018-7 Amendments to Australian Accounting Standards - Definition of Material
These amendments are intended to address concerns that the wording in the definition of 'material' was different in the Conceptual Framework for Financial Reporting, AASB 101 Presentation of Financial Statements and AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors.
The amendments address these concerns by:
-- Replacing the term 'could influence' with 'could reasonably be expected to influence'.
-- Including the concept of 'obscuring information' alongside the concepts of 'omitting' and 'misstating' information in the definition of material.
-- Clarifying that the users to which the definition refers are the primary users of general purpose financial statements referred to in the Conceptual Framework.
-- Aligning the definition of material across IFRS Standards and other publications.
AASB 2019-1 Amendments to Australian Accounting Standards - References to the Conceptual Framework
Makes amendments to various Accounting Standards and other pronouncements to support the issue of the revised Conceptual Framework for Financial Reporting.
Some Accounting Standards and other pronouncements contain references to, or quotations from, the previous versions of the Conceptual Framework. This Standard updates some of these references and quotations so they refer to the Conceptual Framework issued by the AASB in June 2019, and also makes other amendments to clarify which version of the Conceptual Framework is referred to in particular documents.
AASB 2019-5 Amendments to Australian Accounting Standards - Disclosure of the Effect of New IFRS Standards Not Yet Issued in Australia
Amends AASB 1054 Australian Additional Disclosures to add a requirement for entities that intend to be compliant with IFRS standards to disclose the information required by AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors (specifically paragraphs 30 and 31) for the potential effect of each IFRS pronouncement that has not yet been issued by the AASB.
Notes to the consolidated financial statements
1. SUMMARY OF ACCOUNTING POLICIES ( CONTINUED)
(o) Standards and Interpretations in issue not yet adopted
At the date of authorisation of the financial statements, the Group has not applied the following new and revised Australian Accounting Standards, Interpretations and amendments that have been issued but are not yet effective:
Standard/Interpretation Effective for Expected to
annual reporting be initially
periods applied in
beginning on the financial
or after year ending
-------------------------------------------- ------------------ ---------------
AASB 2020-1 Amendments to Australian 1 January 2023 31 December
Accounting Standards - Classification 2023
of Liabilities as Current or Non-current
and AASB 2020-6 Amendments to Australian
Accounting Standards - Classification
of Liabilities as Current or Non-current
- Deferral of Effective Date
AASB 2020-8 Amendments to Australian 1 January 2021 31 December
Accounting Standards - Interest Rate 2021
Benchmark Reform - Phase 2
AASB 2020-3 Amendments to Australian 1 January 2022 31 December
Accounting Standards - Annual Improvements 2022
2018-2020 and Other Amendments
Notes to the consolidated financial statements
2 LOSS BEFORE TAX
Consolidated
Year Ended Year Ended
31 December 31 December
2020 2019
$'000 $'000
Loss before tax has been arrived
at after charging the following:
Restructure and transaction related
costs (continuing operations) - 1,412
Employee benefit expense (continuing
operations) - 2,398
Loss from discontinued operations - 2,620
3. KEY MANAGEMENT PERSONNEL COMPENSATION
Key management personnel compensation policy
The Remuneration and Nominations Committee reviews the remuneration packages of all key management on an annual basis and makes recommendations to the Board. The Board's approach on Remuneration Policies is set out in the Remuneration Report which forms part of the Directors' Report.
The aggregate compensation made to key management personnel of the Group is set out as follows:
Consolidated
31 December 2020 31 December
2019
Short-term employee benefits 520,028 986,120
Post-employment benefits 2,014 20,478
Termination benefits 4,777 110,542
Share-based payments 133,651 293,128
----------------- ------------
660,470 1,410,268
----------------- ------------
4. SHARE BASED PAYMENTS
Executive and Employee Equity-Settled Share Based Payments
The Group has an ownership-based remuneration scheme for executive directors, key management personnel and employees of the Group. In accordance with the provisions of the scheme, directors and employees may be granted options to acquire ordinary shares in the Company. The vesting of any share options is dependent on a period of service relative to the vesting dates, and in the case of performance options, it is also dependent on performance criteria.
Notes to the consolidated financial statements
4. SHARE BASED PAYMENTS (CONTINUED)
Under the Wameja Limited Employee Share Option Plan which was established 4 August 2000 to assist in the attraction, retention and motivation of employees and Directors of the Company and its related corporate bodies, as at 31 December 2020, certain key management personnel and employees (past and present) are entitled to purchase an aggregate of 17,575,000 (2019: 37,575,000) ordinary shares of the entity at an average exercise price of $0.21 (2019: $0.19) per ordinary share. The holders of such options do not have the right, by virtue of the option to participate in any share issue or interest issue of any other corporate body or scheme, and do not participate in any dividends declared. During the current year, no options had vested.
The following executive and employee share-based payment arrangements were in existence during the year:
Contractual
Number Vested life at
Exercise Price Fair value at at year end year end
Option Series Grant Date Expiry Date $ grant date (days)
-----------------
Issued 07 Apr
2016 (i) 07-Apr-16 2021 $0.21 $0.0468 3,000,000 73
-----------------
Issued 08 Aug
2016 (ii) 08-Aug-16 2021 $0.21 $0.0383 5,225,000 220
------------ ------------- --------------- ----------------- ----------------- --------------
Issued 12th Apr
2017 (iii) 12-Apr-17 2022 $0.21 $0.0331 6,000,000 437
------------ ------------- --------------- ----------------- ----------------- --------------
Issued 24th Nov
2017 (iv) 24-Nov-17 2022 $0.21 $0.0538 3,350,000 693
------------ ------------- --------------- ----------------- ----------------- --------------
Issued 15th Jun
2018 (v) 15-Jun-18 2020 $0.16 $0.0268 15,000,000 -
------------ ------------- --------------- ----------------- ----------------- --------------
Issued 5th Sep
2019 (vi) 05-Sep-19 2020 $0.16 $0.0059 5,000,000 -
------------ ------------- --------------- ----------------- ----------------- --------------
In accordance with the terms of the Employee Share Option Plan:
(i) Options issued in this series are executive options which vested on 14 March 2018 and expire on 14 March 2021.
(ii) Options issued in this series are executive options which vested on 08 August 2018. 1,575,000 options expire on 14 March 2021 and the remaining 3,650,000 options expire on 08 August 2021.
(iii) Options issued in this series are executive options which vested on 13 March 2019 and expire on 13 March 2022.
(iv) Options issued in the series are executive options which vested on 24 November 2019 and expire on 24 November 2022.
(v) and (vi) Performance options issued are executive options which vest on the 'testing date', subject to achievement of certain performance conditions and satisfaction of tenure conditions. The testing date is the earlier of 30 September 2020 or the date determined by the Board within 30 days following the occurrence of a change in control of the company or the sale of the substantial part of the business. These options expired on 30 September 2020 following their failure to vest under the terms and conditions.
Notes to the consolidated financial statements
4. SHARE BASED PAYMENTS (CONTINUED)
The following reconciles the outstanding share options granted under the executive share option plan at the beginning and the end of the financial year:
31 December 2020 31 December 2019
------------------------- ------------------------------
Weighted Weighted
average average
exercise exercise
Number of price price
Options $ Number of Options $
Balance at the beginning
of the financial year 37,575,000 0.19 32,575,000 0.219
Granted during the year - - 5,000,000 0.16
Expired/ lapsed during
the year (20,000,000) 0.16 - -
------------- ---------- ------------------ ----------
Balance at the end of
the financial year 17,575,000 0.21 37,575,000 0.19
------------- ---------- ------------------ ----------
Exercisable at the end
of the financial year 17,575,000 17,575,000
------------- ---------- ------------------ ----------
5. REMUNERATION OF AUDITORS
Consolidated
31 December 2020 31 December
2019
Auditor of the Parent Entity
Auditing or review of the financial
report 112,500 162,500
112,500 162,500
----------------- ------------
Other Auditors
Auditing or review of the financial 50,389 -
report
Other services 132,410 -
182,799 -
--------
The auditor of Wameja Limited is Deloitte Touche Tohmatsu in Australia. Other auditors are non-affiliated firms of Deloitte Touche Tohmatsu.
Fees paid to other auditors are charged in respective foreign currencies and are subject to exchange rate fluctuations
6. OTHER FINANCIAL ASSETS
Consolidated
31 December 2020 31 December
2019
$'000 $'000
Advances to HomeSend SCRL (i) - 4,239
(i) During the 2019 financial year, the Company entered into a loan facility agreement with HomeSend SCRL for the sole permitted purpose of funding the pre- payment timing gaps in HomeSend's settlement model (the "Facility"). Mastercard had entered into a similar loan facility agreement with HomeSend SCRL. The Facility was for a total of $31.16 million (EUR20 million) between the Company and Mastercard with the Company providing approximately $11.57 million (EUR7.1 million) in proportion to its shareholding in HomeSend SCRL.
The Facility was a revolving credit line providing HomeSend the ability to draw and re-draw the funds as required, with an obligation to return amounts drawn if not required, based on HomeSend's forecasts. The Facility was unsecured and interest was payable quarterly at 1.916% per annum on the amount drawn. There was no establishment or commitment fee. The Facility was fully repaid on 12 August 2020.
Notes to the consolidated financial statements
7. INVESTMENT IN ASSOCIATES
Details of the material investment in associates at the end of the reporting period are as follows:
Name of Principal activity Place of incorporation Proportion of ownership interest
associate and principal and voting rights held by
place of business the Group
31 December 31 December
2020 2019
HomeSend Provision of international
SRCL (a) mobile money services Brussels, Belgium 35.68% 35.68%
a) HomeSend SRCL was formed on 3 April 2014. The Directors have determined that the Group exercises significant influence over HomeSend SRCL by virtue of its 35.68% voting power in shareholders meetings and its contractual right to appoint two out of six directors to the board of Directors of that Company.
Reconciliation of the above summarised financial information to the carrying amount of the interest in HomeSend SCRL recognized in the consolidated financial statements:
31 December 31 December
2020 2019
Net assets of the associate ($'000) 66,103 71,364
Proportion of the Group's ownership interest
in HomeSend SCRL (%) 35.68% 35.68%
Closing balance ($'000) 23,585 25,463
------------ ------------
The associate is accounted for using the equity method in these condensed consolidated financial statements.
b) Reconciliation of the carrying amount of the investment in associate:
31 December 31 December
2020 2019
$000 $000
Opening balance 25,463 25,791
Investment in associate 6,090 6,480
Share of current period loss of the associate (7,779) (6,596)
Effects of foreign currency exchange movements (189) 212
------------ ------------
Closing balance 23,585 25,463
------------ ------------
During the year, the Company contributed EUR3.57 million (A$6.090 million) towards the total capital raise.
Summarised financial information in respect of HomeSend SCRL is set out below. The summarised financial information below represents amounts shown in the associate's financial statements prepared in accordance with Belgium GAAP, adjusted to align with the Australian Accounting Standards and to reflect other required notional equity accounting adjustments.
HomeSend SCRL 31 December 31 December
2020 2019
$000 $000
Current assets 73,683 44,067
------------ ------------
Non-current assets (i) 63,998 63,463
------------ ------------
Current liabilities (71,578) (36,166)
------------ ------------
Net assets 66,103 71,364
------------ ------------
(i) Includes notional intangible assets arising on acquisition.
Notes to the consolidated financial statements
7. INVESTMENT IN ASSOCIATES (CONTINUED)
HomeSend SCRL 31 December 31 December
2020 2019
$000 $000
Revenue 12,238 6,841
------------ ------------
Loss from continuing operations (21,803) (18,486)
------------ ------------
Loss for the year (21,803) (18,486)
------------ ------------
Total comprehensive loss for the year (21,803) (18,486)
------------ ------------
8. INCOME TAXES
Income tax recognized in profit/(loss) 31 December 31 December
2020 2019
$'000 $'000
The prima facie income tax expense on pre-tax
accounting profit/(loss)
from operations reconciles to the income tax
(benefit)/expense in the
financial statements as follows:
Loss from operations (9,159) (13,190)
------------ ------------
Income tax benefit calculated at 27.5% (2019:
27.5%) (2,519) (3,627)
Non-deductible expenses - 863
Deferred tax assets not recognised 2,519 2,764
------------ ------------
- -
------------ ------------
The tax rate used in the above reconciliation is the corporate tax rate of 27.5% payable by Australian corporate entities on taxable profits under Australian tax law. No income tax was recognised directly in equity or in other comprehensive income (loss) during the financial year.
9. ISSUED CAPITAL
31 December
31 December 2020 2019
$'000 $'000
1,210,850,662 fully paid ordinary
shares
(2019: 1,210,850,662) 212,326 212,326
----------------- ------------
31 December 2020 31 December 2019
No. '000 $'000 No. '000 $'000
---------- -------- ---------- --------
Fully Paid Ordinary Shares
Balance at the beginning of the
financial year 1,210,851 212,326 1,210,851 212,326
Balance at the end of the financial
year 1,210,851 212,326 1,210,851 212,326
---------- -------- ---------- --------
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Changes to the then Corporations Law abolished the authorised capital and par value concept in relation to share capital from 1 July 1998. Therefore, the Company does not have a limited amount of authorised capital and issued shares do not have a par value.
Share Options
All shares options have been cancelled. Details of the executive and employee share option plan are contained in Note 4 to the financial statements.
Notes to the consolidated financial statements
10. RESERVES
Consolidated
31 December 2020 31 December
2019
$'000 $'000
Employee equity-settled benefit
(a) 4,176 4,043
Foreign currency translation (b) 337 879
----------------------- ----------------
4,513 4,922
----------------------- ----------------
(a) Employee equity-settled benefit
Balance at beginning of financial
year 4,043 3,748
Employee equity-settled benefits
(i) 133 295
Balance at the end of the financial
year 4,176 4,043
------ ------
(i) The employee equity-settled benefits reserve arises on the grant of share options to key management personnel and employees under the executive and employee share option plan. Further information about equity-settled benefits is contained in Note 4 to the financial statements.
(b) Foreign currency translation
Balance at beginning of financial
year 879 1,905
Translation of foreign operations (542) (135)
Transfer from foreign exchange
reserve on disposal of subsidiary - (891)
Balance at the end of the financial
year 337 879
------ --------
11. ACCUMULATED LOSSES
Consolidated
31 December 31 December
2020 2019
$'000 $'000
Balance at beginning of the financial
year (176,181) (162,991)
Loss for the year attributable to equity
holders of the parent (9,159) (13,190)
------------ ------------
Balance at end of financial year (185,340) (176,181)
------------ ------------
Notes to the consolidated financial statements
12. EARNINGS PER SHARE
Consolidated
31 December 31 December
2020 2019
Basic earnings per share (cents per share) (0.76) (1.1)
------- ------
Diluted earnings per share (cents per share) (0.76) (1.1)
------- ------
Basic earnings per share
The earnings and weighted average number of ordinary shares
used in the calculation of basic earnings per share are as
follows:
31 December 31 December
2020 2019
$'000 $'000
Earnings - being the (loss)/profit
for the year attributable to equity
holders of the parent (9,159) (13,190)
----------------------- ------------
31 December
31 December 2020 2019
No'000 No'000
Weighted average number of ordinary
shares 1,210,851 1,210,851
----------------------- ------------
Diluted earnings per share
The earnings and weighted average number of ordinary and
potential ordinary shares used in the calculation of diluted
earnings per share are as follows:
31 December 31 December
2020 2019
$'000 $'000
Earnings - being the (loss)/profit
for the year attributable to equity
holders of the parent (9,159) (13,190)
----------------------- ------------
31 December
31 December 2020 2019
No'000 No'000
Weighted average number of ordinary
shares and potential ordinary shares
(a) 1,210,851 1,210,851
----------------------- ------------
(a) Weighted average numbers of ordinary shares and potential ordinary shares used in the calculation of diluted earnings per share reconciles to the weighted average number of ordinary shares used in the calculation of basic earnings per share as follows:
Weighted average number of ordinary
shares and potential ordinary shares
used in the calculation of basis
and diluted (loss)/earnings per share 1,210,851 1,210,851
---------- ----------
There are no instruments in the current or prior year that are considered dilutive.
Notes to the consolidated financial statements
13. SUBSIDIARIES
Details of the Group's material subsidiaries at the end of the reporting period are as follows:
Ownership Interest
and voting power
COUNTRY OF 31 December 31 December
INCORPORATION 2020 2019
% %
Parent Entity Australia
Wameja Limited
Material Subsidiary
Wameja Investments Pty
Limited Australia 100 100
Wameja UK Limited United Kingdom 100 100
Wameja Singapore Ltd Singapore 100 100
WamejaGlobal Netherlands 100 100
Wameja Hongkong Hong Kong 100 100
The Group's principal operating and administrative activities are carried out by Wameja Limited which is based in Australia. The Group's investment in its associate HomeSend SCRL is held by Wameja Limited (2019: Wameja Investments Pty Limited).
14. RELATED PARTY DISCLOSURES
a) Equity Interests in Related Parties
Equity Interests in Controlled Entities
Details of the percentage of ordinary shares held in material subsidiaries are disclosed in Note 13 to the financial statements.
b) Key management personnel compensation
Details of key management personnel compensation are disclosed in Note 3 to the financial statements.
c) Key management personnel equity and option holdings
Information on key management personnel interests in shares and options is detailed in the Directors' Report.
d) Other related party transactions
Consolidated
Year Ended Year Ended
31 December 31 December
2020 2019
$ $
Mr Rowe's Director's Fees, as detailed
in the Directors' Report, are paid
to him as a sole legal practitioner 251,303 124,630
Mr Baldwin's Director's Fees, as detailed
in the Directors' Report, are paid
to his private company 43,875 62,791
Mr Brooke's Director's Fees, as detailed
in the Directors' Report, are paid
to his private company 35,097 44,095
Mr Conoley's Director's Fees, as detailed
in the Directors' Report, are paid
to him 233,556 399,776
Mr Hume's Director's Fees, as detailed
in the Directors' Report, are paid
to his company. (i) 96,639 511,480
(i) Prior year amount includes remuneration as an employee to Mr. Hume.
Notes to the consolidated financial statements
14. RELATED PARTY DISCLOSURES (CONTINUED)
e) Parent Entities
The parent and ultimate parent entity in the Group is Wameja Limited.
15. NOTES TO THE STATEMENT OF CASH FLOWS
Consolidated
Year Ended Year Ended
31 December 31 December
2020 2019
$'000 $'000
a) Reconciliation of cash
For the purposes of the statement
of cash flows, cash and cash equivalents
includes cash on hand and in banks
and investments in money market instruments.
Cash at the end of the financial
year as shown in the statement of
cash flows is reconciled to the related
items in the statement of financial
position as follows:
Cash and cash equivalents 8,014 11,636
b) Reconciliation of loss for the year to net cash flows
from operating activities
Loss for the year (9,159) (13,190)
Amortisation of non-current assets - 1,367
Foreign exchange (gain)/loss, including
changes in foreign currency net assets
and liabilities and other non-cash
items 18 (1,043)
Equity settled share-based payments 133 295
Share of loss of associate 7,779 6,596
Impairment charge on re-measurement
of disposal group to fair value less
cost to sell - 2,814
Movements
Decrease in trade receivables and
contract assets - 382
Decrease in inventories - 28
Decrease in current tax assets - 37
Decrease in other current assets - 322
Decrease in deferred tax assets - (276)
Decrease in trade and other payables,
and provisions (171) (1,324)
(Decrease)/increase in current tax
payables - (1,046)
Increase/(decrease) in contract liabilities - 215
Net cash used in operating activities (1,400) (4,823)
------------- -------------
Notes to the consolidated financial statements
16. FINANCIAL INSTRUMENTS
a) Significant
Accounting Policies
Details of the significant accounting policies and methods adopted,
including the criteria for recognition, the basis of measurement
and the basis on which revenues and expenses are recognised,
in respect of each class of financial asset, financial liability
and equity instrument are disclosed in Note 1 to the financial
statements.
b) Capital Risk
Management
The Group manages its capital to ensure that entities in the
Group will be able to continue as a going concern while maximising
the return to stakeholders through the optimisation of the debt
and equity balance.
The capital structure of the Group includes cash and cash equivalents
and equity attributable to equity holders of the parent, comprising
issued capital, reserves and retained earnings. Operating cash
flows is used to maintain and expand the Group's assets as well
as to pay for operating expenses.
c) Financial Risk
Management
Objectives
The Group's activities expose it to a variety of financial risks:
market risk (including currency and interest rate risk), credit
risk and liquidity risk. The Group's overall risk management
program focuses on the unpredictability of financial and exchange
rate markets and seeks to minimise potential adverse effects
on the Group's performance. A risk management framework, including
the policy on use of financial derivatives is governed by the
Board of Directors. The Group does not enter into or trade financial
instruments, including derivative financial instruments, for
speculative purposes.
d) Market Risk
The Group's activities expose it primarily to the financial
risks of changes in foreign currency exchange rates and changes
in market interest rates. There has been no change to the Group's
exposure to market risks or the manner in which it manages and
measures the risks from the previous period.
e) Foreign Currency Risk Management
The Group undertakes certain transactions denominated in foreign currencies that are different
to the functional currency of the respective entities undertaking the transactions, hence
exposures to exchange rate fluctuations arise which are recorded in profit or loss. The group
may use foreign currency exchange contracts to hedge these risks. No such contracts were entered
into during the current year (2019: nil).
The material carrying amount of the Group's foreign currency denominated monetary assets and
monetary liabilities at the reporting date that are denominated in a currency that is different
to the functional currency of the respective entities holding the monetary assets and
liabilities
are as follows:
Assets Liabilities
31 December 31 December 31 December 2020 31 December 2019
2020 2019
$'000 $'000 $'000 $'000
External Group
Exposure
US Dollars - - - -
Euro (Functional
currency -
Australian Dollars) 6,624 15,706 - -
UK Pounds (Functional
currency -
Australian Dollars) 962 52 - -
Notes to the condensed consolidated financial statements
16. FINANCIAL INSTRUMENTS (CONTINUED)
Foreign currency sensitivity analysis
The following table details the Group's sensitivity to a 10% increase
and decrease in the functional currency against the relevant foreign
currencies, which represents management's assessment of the possible
change in foreign exchange rates. The sensitivity analysis includes
only outstanding foreign currency denominated monetary items (arising
from monetary assets and liabilities held at balance date in a
currency different to the functional currency of the respective
entities holding the assets or liabilities) and adjusts their
translation at year end for a 10% change in foreign currency rates.
Profit or loss
Consolidated
Currency 31 December 31 December
2020 2019
$'000 $'000
External Group Exposure
US Dollars - -
Euro 662 1,571
UK Pounds 96 -
The sensitivity includes external receivables and payables as
well as inter-company balances with foreign operations within
the Group where the denomination of the receivable or payable
is in a currency other than the functional currency of the respective
entity and the balance is expected to be repaid in the foreseeable
future.
For assets, a positive number indicates an increase in profit
with the functional currency weakening against the respective
currency. For a strengthening of the functional currency against
the respective currency there would be an equal and opposite impact
on the profit, and the amounts above would be negative. For liabilities,
the opposite would apply.
In management's opinion, the above sensitivity analysis reflects
the foreign currency risk changes as at reporting date.
In addition, the Group includes certain subsidiaries whose functional
currencies are different to the Group's presentation currency.
As stated in the Group's Accounting Policies Note 1(f), on consolidation
the assets and liabilities of these entities are translated into
Australian dollars at exchange rates prevailing on the balance
date. The income and expenses of these entities are translated
at the average exchange rates for the year. Exchange differences
arising are classified as equity and are transferred to a foreign
exchange translation reserve. The main operating entity outside
of Australia is based in France. The Group's future reported
profits could therefore be impacted by changes in rates of exchange
between the Australian Dollar and the Euro.
f) Interest Rate Risk Management
The Group's exposure to interest rate risk at 31 December 2020
is in respect of interest generated on deposits balances invested
during the course of the year. Cash deposits yielded a weighted
average interest rate of 0.001% for the financial year (2019:
0.001%).
Interest rate sensitivity analysis
The Group's net sensitivity to interest rate movements is not
considered to be material to the Group.
g) Liquidity Risk Management
Ultimate responsibility for liquidity risk management rests with
the board of directors, who have built an appropriate liquidity
risk management framework for the management of the Group's short,
medium and long-term funding and liquidity management requirements.
The Group manages liquidity risk by maintaining adequate cash
reserves and by continuously monitoring forecast and actual cash
flows and matching the maturity profiles of financial assets
and liabilities.
Notes to the condensed consolidated financial statements
16. FINANCIAL INSTRUMENTS (CONTINUED)
Liquidity and interest risk
tables
The following tables detail the Group's remaining contractual
maturity for its non-derivative financial liabilities. The tables
have been drawn up based on the undiscounted cash flows of financial
liabilities based on the earliest date on which the Group can
be required to pay. The table includes both principal and interest
cash flows.
Less than 3 months
1 month 1-3 months - 1 year 1-5 years
$'000 $'000 $'000 $'000
Consolidated
31 December 2020
Other payables -
Non-interest
bearing 100 - - -
Total 100 - - -
31 December 2019
Other payables -
Non-interest
bearing 271 - - -
Total 271 - - -
--------------------- ----------- ------------------------ ------------
The following tables detail the Group's expected maturity for
its non-derivative financial assets. The tables have been drawn
up based on the undiscounted contractual maturities of the financial
assets including interest that will be earned on those assets
except where the Group anticipates that the cash flow will occur
in a different period based on the earliest date on which the
Group can expect to receive payment. The table includes both
interest and principal cash flows.
Weighted
average
effective Less
interest than 1-3 3 months
rate Not 1 month months - 1 year 1-5 years 5+ years
% Overdue $'000 $'000 $'000 $'000 $'000
Consolidated
31 December
2020
Cash and cash
equivalents 0.001% - 8,014 - - - -
Total - 8,014 - - - -
----------- ---------- --------- ----------- ---------- ------------ ------------
31 December
2019
Cash and cash
equivalents 0.001% - 11,636 - - - -
Other
financial
assets 1.916% - - - 4,239 - -
----------- ---------- --------- ----------- ---------- ------------ ------------
Total - 11,636 - 4,239 - -
----------- ---------- --------- ----------- ---------- ------------ ------------
Notes to the condensed consolidated financial statements
16. FINANCIAL INSTRUMENTS (CONTINUED)
h) Credit Risk Management
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to
the Group. The Group has adopted the policy of dealing with creditworthy
counterparties, as a means of mitigating the risk of financial
loss from defaults. The Group does not have any financial asset
impaired by credit risk.
(i) Fair value of the Group's financial assets and financial liabilities that are measured at fair value on a recurring basis
None of the Group's other financial assets and financial liabilities are measured at fair value as at
31 December 2020 (31 December 2019: nil).
(ii) Fair value of financial assets and financial liabilities that are not measured at fair value on a recurring basis (but fair value disclosures are required)
The directors consider that the carrying amounts of the financial assets and financial liabilities recognised in the consolidated financial statements approximate their fair values.
17. PARENT ENTITY INFORMATION
(a) Financial position 31 December 31 December
2020 2019
$'000 $'000
Assets
Current assets 8,014 120
Non-current assets 23,585 41,218
------------ -------------
Total assets 31,599 41,338
------------ -------------
Liabilities
Current liabilities (100) (271)
Total liabilities (100) (271)
------------ -------------
Net Assets 31,499 41,067
------------ -------------
Equity
Issued capital 212,326 212,326
Accumulated losses (185,003) (175,302)
Reserves
Equity-settled benefits 4,176 4,043
Foreign currency translation - -
------------ -------------
Total equity 31,499 41,067
------------ -------------
(b) Financial performance 31 December 31 December
2020 2019
$'000 $'000
Loss for the period (10,038) (14,422)
Total comprehensive loss (10,038) (14,422)
------------ -------------
Notes to the condensed consolidated financial statements
17. PARENT ENTITY INFORMATION (CONTINUED)
(c) Guarantees entered into by the parent entity
Wameja Limited has not provided any guarantees in relation to any of its subsidiaries.
(d) Contingent liabilities of the parent entity
There are no contingent liabilities for the parent entity.
(e) Commitments for the acquisition of property, plant and equipment by the parent entity
There are no material commitments for the acquisition of property, plant and equipment by the parent entity.
18. CONTINGENT LIABILITIES
I. Notices of Potential Claim
In July 2019, Wameja Limited ("Wameja" or the "Company") sold all the issued capital of eServGlobal Holdings SAS and its subsidiaries ("eServGlobal") to Seamless Distribution Systems AB ("Seamless"). The sale comprised the effective sale of Wameja's operating business. The sale and purchase agreement ("SPA") included an indemnity under which Wameja agreed to indemnify and hold Seamless harmless against any direct loss, damage or liability related to the lack of renewed licences for eServGlobal's use of a specific third party's intellectual property ("the Indemnity"). The third party is the provider of software embedded in all deployments of eServGlobal's "Paymobile" platform, eServGlobal's primary product.
At the end of September 2020, Wameja received a notification of potential claim under the Indemnity from Seamless regarding an issue that had arisen between Botswana Telecommunications ("BTC") (an eServGlobal customer) and the third-party software supplier. Seamless subsequently issued another notice with their estimation of the exposure under the Indemnity across BTC and other eServGlobal clients.
An audit by the third-party software supplier of their intellectual property embedded in the Paymobile platform utilised by BTC commenced subsequent to year end. Based on the directors' assessment, the potential for a legitimate material claim under the indemnity in the SPA is unable to be determined at the date of this report.
At the date of this financial report, the directors consider there to be no present obligation or material exposure under the Indemnity on the basis that:
-- there has been no claim by the third-party software supplier against eServGlobal or Seamless arising from the non - renewal of licences, or any other matter, and
-- Seamless has not particularised the basis under the SPA upon which it believes that there is a potential claim under the Indemnity.
No provision has been recognised in the financial statements as at 31 December 2020.
II. Warranty claim
On 3 July 2020, the company received notification of a purported warranty claim from Seamless in relation to a French employee of eServGlobal SAS whose employment was terminated subsequent to completion of the sale of eServGlobal Holdings SAS to Seamless. The notification sought to claim EUR519,967 ($843,007) under the warranties contained within the SPA, being the amount including taxes, that the employee was seeking from eServGlobal SAS for compensation for loss of employment.
Notes to the condensed consolidated financial statements
18. CONTINGENT LIABILITIES (CONTINUED)
The directors have assessed and considered the purported warranty claim to be without merit and have advised Seamless as such, and rejected the suggestion that the liability to the employee is subject to the warranties in the SPA.
At the date of this financial report, there has been no further correspondence from Seamless on this matter and the directors maintain their position that the purported warranty claim is without merit.
19. SUBSEQUENT EVENTS
The impact of the Coronavirus (COVID 19) pandemic is ongoing and while COVID -- 19 has been financially neutral for the Group up to 31 December 2020, it is not practicable to estimate the extent of the potential impact, positive or negative, after the reporting date. The situation is rapidly developing and is dependent on measures imposed by the governments and authorities around the world, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided.
Based on the information available to the directors as at the date of the financial statements, there are no significant factors identified which would impact on the carrying value of the Group's investment in associate due to COVID-19. However, the directors consider that prolonged general economic impacts arising from COVID-19 may have a negative impact on the operations of the Group's associate. This in turn may impact the recoverability of the Group's carrying value of the investment in associate going forward.
On 18 March 2021, Wameja Limited subscribed for a further EUR1,784,118 of shares in HomeSend SCRL. The equity contribution is part of a EUR6,000,000 capital raise with Mastercard agreeing to contribute an additional EUR1,000,000 over and above its proportionate interest in HomeSend SCRL. The funds from the capital raise are to be used to support the operational expenses of the HomeSend 2021 business plan and its minimum equity requirements into H2 2021.
No other matter or circumstance has occurred subsequent to year end that has significantly affected, or may significantly affect, the operations of the Company, the results of those operations or the state of affairs of the entity in subsequent financial years.
20. ADDITIONAL COMPANY INFORMATION
Wameja Limited is a listed public company, incorporated in Australia and operating in Australia and Europe.
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Australia
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(END) Dow Jones Newswires
March 31, 2021 11:15 ET (15:15 GMT)
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