Cover
Cover - shares | 12 Months Ended | |
Dec. 31, 2020 | Apr. 28, 2021 | |
Cover [Abstract] | ||
Document Type | 20-F | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2020 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2020 | |
Current Fiscal Year End Date | --12-31 | |
Entity Registrant Name | Integrated Media Technology Ltd | |
Entity Central Index Key | 0001668438 | |
Entity Incorporation, State or Country Code | C3 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 8,440,533 |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - AUD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash and bank balances | $ 2,194,084 | $ 735,724 |
Inventories | 187,401 | 749,173 |
Right of use assets | 682,119 | |
Trade and other receivables | 1,164,605 | 770,958 |
Other assets | 2,089,897 | 2,291,273 |
Total Current Assets | 5,635,987 | 5,229,247 |
Non-Current Assets | ||
Plant and equipment, net | 7,317,678 | 729,117 |
Intangible assets and goodwill | 9,950,803 | |
Right of use assets | 425,773 | |
Development projects | 3,611,336 | |
Total Non-Current Assets | 7,317,678 | 14,717,029 |
TOTAL ASSETS | 12,953,665 | 19,946,276 |
Current Liabilities | ||
Trade and other liabilities | 3,589,164 | 4,338,495 |
Provision for employee benefits | 64,135 | |
Amounts due to related companies | 237,674 | 6,101,850 |
Amount due to holding company | 532,718 | 582,832 |
Borrowings | 1,817,782 | |
Lease liabilities | 666,868 | |
Convertible bonds | 4,420,899 | |
Total Current Liabilities | 4,359,556 | 17,992,861 |
Non-current Liabilities | ||
Lease liabilities | 501,739 | |
Derivative financial instruments | 1,478,540 | |
Deferred tax liabilities | 13,668 | 1,372,653 |
Convertible promissory notes | 2,196,049 | |
Total Non-Current Liabilities | 3,688,257 | 1,874,392 |
TOTAL LIABILITIES | 8,047,813 | 19,867,253 |
NET CURRENT ASSETS / (LIABILTIES) | 1,276,431 | (12,763,614) |
NET ASSETS | 4,905,852 | 79,023 |
CAPITAL AND RESERVES | ||
Issued capital (no par value, 6,513,671 and 3,377,386 ordinary shares issued and outstanding as of December 31, 2020 and 2019, respectively) | 32,089,997 | 18,902,029 |
Foreign currency translation reserve | 883,878 | 735,213 |
Other reserves | 2,704,452 | 4,423,141 |
Accumulated losses | (34,102,300) | (25,786,912) |
Equity attributable to equity shareholders of Integrated Media Technology Limited | 1,576,027 | (1,726,529) |
Non-controlling interests | 3,329,825 | 1,805,552 |
TOTAL EQUITY | $ 4,905,852 | $ 79,023 |
CONSOLIDATED STATEMENTS OF FI_2
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Parenthetical) - AUD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of financial position [abstract] | ||
Issued capital | $ 32,089,997 | $ 18,902,029 |
CONSOLIDATED STATEMENTS OF PROF
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME - AUD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Profit or loss [abstract] | |||
Revenue, net | $ 1,744,629 | $ 1,275,425 | $ 1,324,406 |
Cost of sales | (1,311,566) | (1,008,821) | (723,711) |
Interest income | 6,197 | 115,762 | 21,409 |
(Loss) / gain on disposal of plant and equipment | 212,195 | ||
Gain on fair value change in derivative financial instruments | 2,312,197 | 127,551 | 709,543 |
Gain on disposal of subsidiaries | (28,990) | 608,995 | |
Other income | 82,561 | 807,831 | 469,660 |
Expenses | |||
Employee benefit expenses | (2,212,643) | (4,034,378) | (2,253,411) |
Depreciation and amortization expenses | (2,078,762) | (3,174,784) | (2,029,373) |
Professional and consulting expenses | (1,373,907) | (2,019,970) | (1,746,762) |
Travel and accommodation expenses | (40,895) | (281,895) | (384,184) |
Office expenses and supplies | (310,360) | (312,343) | (659,611) |
Rental costs | (126,382) | (637,321) | (674,112) |
Other operating expenses | (480,015) | (794,036) | (1,069,784) |
Finance costs | (2,100,272) | (1,561,625) | (1,383,399) |
Provision for impairment loss of goodwill | (4,486,301) | (9,953,311) | |
Provision for inventory obsolescence | 17,671 | (799,871) | (100,000) |
Provision for bad debt | 58,932 | 11,052 | 124,528 |
Plant and equipment written off | (110) | ||
Provision for impairment loss on intangible assets | (3,459,340) | ||
Development projects written off | (930,356) | ||
Exchange (loss) / gain | (194,383) | (10,296) | 493,365 |
Total expenses | (13,377,676) | (18,112,820) | (19,760,582) |
Loss before income tax | (10,543,658) | (16,582,877) | (17,350,280) |
Income tax (expense) / credit | (117,322) | 507,057 | |
Loss for the year | (10,543,658) | (16,700,199) | (16,843,223) |
Other comprehensive income / (loss) | |||
Exchange differences on translation of financial statements of overseas subsidiaries | 55,673 | 157,471 | 1,015,454 |
Other comprehensive income / (loss) for the year, net of tax | 55,673 | 157,471 | 1,015,454 |
Total comprehensive loss for the year | (10,487,985) | (16,542,728) | (15,827,769) |
Loss for the year attributable to: | |||
Equity shareholders of Integrated Media Technology Limited | (10,034,077) | (15,646,147) | (15,962,278) |
Non-controlling interests | (509,581) | (1,054,052) | (880,945) |
Total comprehensive loss for the year attributable to: | |||
Equity shareholders of Integrated Media Technology Limited | (9,885,412) | (15,540,317) | (15,119,876) |
Non-controlling interests | $ (602,573) | $ (1,002,411) | $ (707,893) |
Loss per share - Basic and Diluted | $ (2.33) | $ (4.63) | $ (5.93) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - AUD ($) | Issued Capital | (Accumulated Losses) / Retained Earnings | Foreign Currency Translation Reserve | Other Reserves | Non-controlling Interests | Total |
Balance at beginning at Dec. 31, 2017 | $ 10,410,279 | $ 5,285,565 | $ (251,659) | $ (53,851) | $ 15,390,334 | |
IfrsStatementLineItems [Line Items] | ||||||
Loss for the year | (15,962,278) | (880,945) | (16,843,223) | |||
Other comprehensive income for the year, net of tax | 842,402 | 173,052 | 1,015,454 | |||
Total comprehensive loss for the year | (15,962,278) | 842,402 | (707,893) | (15,827,769) | ||
Disposal of subsidiaries | 38,640 | 41,420 | 80,060 | |||
Issue of convertible bonds | 535,948 | 535,948 | ||||
Capital injection by non-controlling interests | 3,528,287 | 3,528,287 | ||||
Gain on deemed disposal of subsidiaries | 4,423,141 | 4,423,141 | ||||
Issuance of new ordinary shares - cash (Note 28(b)) | 491,750 | 491,750 | ||||
Issuance of new ordinary shares - conversion of debt (Note 28(b)) | 8,000,000 | 8,000,000 | ||||
Balance at end at Dec. 31, 2018 | 18,902,029 | (10,676,713) | 629,383 | 4,959,089 | 2,807,963 | 16,621,751 |
IfrsStatementLineItems [Line Items] | ||||||
Loss for the year | (15,646,147) | (1,054,052) | (16,700,199) | |||
Other comprehensive income for the year, net of tax | 105,830 | 51,641 | 157,471 | |||
Total comprehensive loss for the year | (15,646,147) | 105,830 | (1,002,411) | (16,542,728) | ||
Transfer convertible bond reserves (Note 29 (b)) | 535,948 | (535,948) | 0 | |||
Balance at end at Dec. 31, 2019 | 18,902,029 | (25,786,912) | 735,213 | 4,423,141 | 1,805,552 | 79,023 |
IfrsStatementLineItems [Line Items] | ||||||
Loss for the year | (10,034,077) | (509,581) | (10,543,658) | |||
Other comprehensive income for the year, net of tax | 148,665 | (92,992) | 55,673 | |||
Total comprehensive loss for the year | (10,034,077) | 148,665 | (602,573) | (10,487,985) | ||
Disposal of subsidiaries | (1,761,181) | (1,761,181) | ||||
Issuance of new ordinary shares - cash (Note 28(b)) | 7,121,283 | 7,121,283 | ||||
Issuance of new ordinary shares - conversion of debt (Note 28(b)) | 4,122,562 | 4,122,562 | ||||
Issuance of new ordinary shares - services (Note 28(b)) | 23,249 | 23,249 | ||||
Issuance of new ordinary shares - acquisition (Note 28(b)) | 2,060,000 | 2,060,000 | ||||
Legal expenses in respect of issuance of shares (Note 28(b)) | (139,126) | (139,126) | ||||
Balance at end at Dec. 31, 2020 | $ 32,089,997 | $ (34,102,300) | $ 883,878 | $ 2,704,452 | $ 3,329,825 | $ 4,905,852 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) | 12 Months Ended |
Dec. 31, 2019AUD ($) | |
Statement of changes in equity [abstract] | |
Transfer convertible bond reserves (Note 29 (b)) | $ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - AUD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | |||
Loss before income tax | $ (10,543,658) | $ (16,582,877) | $ (17,350,280) |
Adjustments to reconcile loss before income tax to net cash used in operating activities: | |||
Depreciation and amortization | (2,078,762) | (3,174,784) | (2,029,373) |
Write off of plant and equipment | 110 | 171,371 | |
Equity settled share based payment transaction | 491,750 | ||
Impairment loss of trade receivables | 58,932 | 11,052 | 124,528 |
Provision for inventories obsolescence | (17,671) | 799,871 | 100,000 |
Loss / (gain) on disposal of subsidiaries | (28,990) | 608,995 | |
Gain on disposal on plant and equipment | (212,195) | ||
Provision for impairment loss on intangible assets | (3,459,340) | ||
Development projects written off | (930,356) | ||
Provision for impairment loss of goodwill | 4,486,301 | 9,953,311 | |
Net cash (outflows) / inflows from changes in working capital | (2,186,276) | 1,783,050 | (1,596,164) |
Net cash used in operating activities | (6,191,115) | (6,540,014) | (6,685,106) |
Cash flows from investing activities | |||
Capital injection from minority shareholders | 1,920,153 | ||
Payments for acquisition of plant and equipment | (7,236,260) | (1,223,028) | (838,238) |
Payments for intangible assets | (7,283) | (587,864) | |
Payments for development projects | (125,520) | (598,306) | (1,884,172) |
Disposal of subsidiaries, net of cash disposed of | 855,506 | (9,494) | |
Net cash used in investing activities | (4,586,121) | (1,828,617) | (3,319,768) |
Cash flows from financing activities | |||
Advances from of amounts due to related companies | 840,509 | 3,954,640 | 1,806,044 |
Advance from other liabilities | 211,567 | 2,610,091 | |
Advance from / (repayment) to holding company | 501,343 | (4,782,610) | |
Fair value change in derivative financial instruments | (2,312,197) | (127,551) | (709,543) |
Interest income from ultimate holding company | (115,678) | ||
Interest received from ultimate holding company | 18,714 | ||
Interest accrued for lease liabilities | 32,526 | 109,675 | |
Finance costs for convertible bonds | 1,693,890 | 1,316,702 | 930,276 |
Interest paid for convertible bonds | (185,469) | (209,392) | (394,060) |
Proceeds from bank borrowings | 930,334 | 809,280 | |
Repayment of bank borrowings | (840,285) | (904,850) | |
Repayment for convertible bonds | (4,668,195) | ||
Payment of lease liabilities | (320,851) | (573,010) | (10,180) |
Proceeds from issuance of convertible promissory notes | 4,913,100 | ||
Proceeds from issuance of convertible bonds by a subsidiary | 3,769,470 | ||
Net Proceeds from issuance of ordinary shares | 13,187,968 | 7,951,428 | |
Net cash provided by financing activities | 13,392,848 | 7,575,583 | 8,638,582 |
Net increase / (decrease) in cash and cash equivalents | 2,615,612 | (793,048) | (1,539,619) |
Effect of exchange rate changes on cash and cash equivalents | (254,770) | 619,705 | 89,252 |
Cash and cash equivalents at the beginning of financial year | (166,758) | 619,705 | 2,070,072 |
Cash and cash equivalents at the end of financial year | 2,194,084 | (166,758) | 619,705 |
Cash and bank balances | 2,194,084 | 735,724 | 1,514,215 |
Bank overdraft | $ (902,482) | $ (894,510) |
NOTE 1. REPORTING ENTITY
NOTE 1. REPORTING ENTITY | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 1. REPORTING ENTITY | NOTE 1. REPORTING ENTITY The consolidated financial report covers the entity of Integrated Media Technology Limited ("IMTE") and its controlled entities for the years ended December 31, 2020, 2019 and 2018 which were authorized for issue by the Board of Directors on Apr 30, 2021. IMTE is a for-profit public company limited by shares, incorporated and domiciled in Australia whose shares are publicly traded on the NASDAQ Capital Markets. IMTE is an investment holding company and its subsidiaries carry out the business of the Group in Australia, Korea, Hong Kong and China. The Company and its subsidiaries are referred to as the "Group". Going Concern The Company's consolidated financial statements are prepared using International Financial Reporting Standards as issued by the International Accounting Standards Board applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. As of December 31, 2020, the Company had accumulated losses of A$34,102,300 and generated a net loss in 2020 of A$10,543,658 and used cash in operating activities in the amount of A$6,191,115. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease or reduce its operations. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Though year ended December 31, 2020, the Company was successful in raising a total of approximately US$13 million through debt and equity financing for the repayment of debts and working capital in the Company. Furthermore, the Company disposed of its research and development operation to reduce the overhead of the Group going forward and focus on the sale and marketing operations. The Company will need to continue to raise funds through the sale of its equity securities and issuance of debt instruments to obtain additional operating capital. The Company is and will continue to be dependent upon its ability, and will continue to attempt, to secure additional equity and/or debt financing until the Company can earn revenue and realize positive cash flow from its operations. There are no assurances that the Company will be successful in earning revenue and realizing positive cash flow from its operations. Without sufficient financing it would be unlikely that the Company will continue as a going concern. Based on the Company's current rate of cash outflows, cash on hand and proceeds from the recent sales of equity securities and convertible promissory notes, management believes that its current cash may not be sufficient to meet the anticipated cash needs for working capital for the next 12 months. The Company's plans with respect to its liquidity issues include, but are not limited to, the following: 1) Continue to raise financing through the sale of its equity and/or debt securities; 2) Continue developing its business, products and services and seek strategic partnerships and cooperative arrangement to grow our revenue and profitability. The Company is currently evaluating additional equity financing opportunities and may execute them when appropriate. However, there can be no assurances that the Company can consummate such a transaction, or consummate a transaction at favorable pricing. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and achieve profitable operations. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. The consolidated financial statements of the Group are presented in Australian Dollars ("A$"), unless otherwise stated. |
NOTE 2. BASIS OF ACCOUNTING
NOTE 2. BASIS OF ACCOUNTING | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 2. BASIS OF ACCOUNTING | NOTE 2. BASIS OF ACCOUNTING The consolidated financial statements present general purpose financial report that have been prepared in accordance with Australian Accounting Standards ("AASBs"), including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001 as appropriate for for-profit entities. The consolidated financial statements also comply with International Financial Reporting Standards ("IFRSs") as adopted by the International Accounting Standards Board. |
NOTE 3. SIGNIFICANT ACCOUNTING
NOTE 3. SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 3. SIGNIFICANT ACCOUNTING POLICIES | NOTE 3. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of the significant accounting policies adopted by the Group in the preparation of the consolidated financial statements. The accounting policies have been consistently applied, unless otherwise stated. (a) Basis of Preparation The consolidated financial statements have been prepared on the accrual basis and are based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied. (b) Principles of Consolidation The consolidated financial statements comprise the financial statements of IMTE and its subsidiaries as at December 31, 2020 (the "Group"). Subsidiaries are consolidated from the date on which control is transferred to the Group and are deconsolidated from the date that control ceases. A list of the controlled entities as at December 31, 2020 is disclosed in Note 26 to the consolidated financial statements. Other than, Cystar International Limited (Formerly know as Visumotion International Limited), Colour Investment Limited and GOXD International Limited, all other controlled entities have a December, 31 statutory financial year end. All inter-company balances and transactions between entities within the Group, including any unrealized profits or losses, have been eliminated upon consolidation. Non-controlling interest in the results and equity of subsidiaries are shown separately in the consolidated statements of profit or loss and other comprehensive income or loss and consolidated statements of financial position of the Group. (c) Business Combinations The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The consideration transferred by the Company to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the Company, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred, except if related to the issue of debt or equity securities. The Company recognizes identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognized in the acquiree's financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values. Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of: (a) fair value of consideration transferred, (b) the recognized amount of any non-controlling interest in the acquiree, and (c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. Any contingent consideration to be transferred by the acquirer is recognized at acquisition-date fair value. Subsequent adjustments to consideration are recognized against goodwill only to the extent that they arise from new information obtained within the measurement period (a maximum of 12 months from the acquisition date) about the fair value at the acquisition date. All other subsequent adjustments to contingent consideration classified as an asset or a liability are recognized in the consolidated statement of profit or loss. (d) Current and deferred income tax Income tax for the year comprises current tax and movements in deferred tax assets and liabilities. Current tax and movements in deferred tax assets and liabilities are recognised in profit or loss except to the extent that they relate to items recognised in other comprehensive income / loss or directly in equity, in which case the relevant amounts of tax are recognised in other comprehensive income or directly in equity, respectively. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the end of the reporting period, and any adjustment to tax payable in respect of previous years. Deferred tax assets and liabilities arise from deductible and taxable temporary differences respectively, being the differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. Deferred tax assets also arise from unused tax losses and unused tax credits. Apart from certain limited exceptions, all deferred tax liabilities, and all deferred tax assets to the extent that it is probable that future taxable profits will be available against which the asset can be utilised, are recognised. Future taxable profits that may support the recognition of deferred tax assets arising from deductible temporary differences include those that will arise from the reversal of existing taxable temporary differences, provided those differences relate to the same taxation authority and the same taxable entity, and are expected to reverse either in the same period as the expected reversal of the deductible temporary difference or in periods into which a tax loss arising from the deferred tax asset can be carried back or forward. The same criteria are adopted when determining whether existing taxable temporary differences support the recognition of deferred tax assets arising from unused tax losses and credits, that is, those differences are taken into account if they relate to the same taxation authority and the same taxable entity, and are expected to reverse in a period, or periods, in which the tax loss or credit can be utilised. The limited exceptions to recognition of deferred tax assets and liabilities are those temporary differences arising from goodwill not deductible for tax purposes, the initial recognition of assets or liabilities that affect neither accounting nor taxable profit (provided they are not part of a business combination), and temporary differences relating to investments in subsidiaries to the extent that, in the case of taxable differences, the Group controls the timing of the reversal and it is probable that the differences will not reverse in the foreseeable future, or in the case of deductible differences, unless it is probable that they will reverse in the future. The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and is reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the related tax benefit to be utilised. Any such reduction is reversed to the extent that it becomes probable that sufficient taxable profits will be available. Current tax balances and deferred tax balances, and movements therein, are presented separately from each other and are not offset. Current tax assets are offset against current tax liabilities, and deferred tax assets against deferred tax liabilities, if the Company or the Group has the legally enforceable right to set off current tax assets against current tax liabilities and the following additional conditions are met: (i) in the case of current tax assets and liabilities, the Group intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously; or (ii) in the case of deferred tax assets and liabilities, if they relate to income taxes levied by the same taxation authority on either: - the same taxable entity; or - different taxable entities, which, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered, intend to realize the current tax assets and settle the current tax liabilities on a net basis or realized and settle simultaneously. (e) Intangible Assets (i) Acquired both separately and from a business combination Purchased intangible assets are initially measured at cost. The cost of an intangible asset acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are measured at cost less any accumulated amortization and any accumulated impairment losses. Intangible assets with finite lives are amortized over the useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at each financial year end. (ii) Autostereoscopic 3D display technologies and knowhow The autostereoscopic 3D display technologies and knowhow acquired in the business combination is measured at fair value as at the date of acquisition. These costs are amortized over the estimated useful life of 8 years and are tested for impairment where an indicator of impairment exists. The useful lives are also examined on an annual basis and adjustments, where applicable, are made on a prospective basis. Please refer to Note 15 for impairment review of these autostereoscopic 3D display technologies and knowhow. (iii) Research and development costs Development projects in the consolidated statements of financial position represent the development costs directly attributable to and incurred for internal technology projects of the Group. An intangible asset arising from development expenditure on an internal technology project is recognised and included in development projects only when the Group can demonstrate the technical feasibility of completing the intangible asset or technology so that it will be available for application in existing or new products or for sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the development, the ability to measure reliably the expenditure attributable to the intangible asset during its development and the ability to use the tangible asset generated. For labour costs, all research and development member salaries that are directly attributable to the technology project are capitalised. Administrative staff and costs are recognised in the profit or loss instead of capitalising this portion of costs. Following the initial recognition of the development expenditure, the cost model is applied requiring the asset to be carried at cost less any accumulated impairment losses. The amortisation rate of these intangible assets was determined on the basis of the estimated useful life from the time that the relevant asset is taken into use. (iv) Intellectual property Expenditure incurred on patents, trademarks or licenses are capitalized from the date of application. They have a definite useful life and are carried at cost less accumulated amortization. They are amortized using the straight line method over their estimated useful lives for a period of 8 to 15 years. (v) Computer software Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortized over their estimated useful lives ranging (2-5 years). Costs associated with maintaining computer software are recognized as an expense when incurred. (f) Inventories Finished goods are stated at the lower of cost and net realizable value on a "first in first out" basis. Cost comprises direct materials and delivery costs, import duties and other taxes. Costs of purchased inventories are determined after deducting rebates and discounts received or receivable. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale. (g) Leases The Group has applied IFRS 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under IAS 17 and IFRIC 4. The details of accounting policies under IAS 17 and IFRIC 4 are disclosed separately. The policy applicable from 1 January 2019 At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease in IFRS 16. This policy is applied to contracts entered into, on or after 1 January 2019. As a lessee At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative and - - The Group recognises a right - - - - The right - - - - - - - - - The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased. Lease payments included in the measurement of the lease liability comprise the following: - fixed payments, including in - - variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date; - amounts expected to be payable under a residual value guarantee; and - the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early. The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group's estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in - When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right - - - - The Group presents right - - ‘ Short-term leases and leases of low-value assets The Group has elected not to recognise right - - - - Policy applicable before 1 January 2019 For contracts entered into before 1 January 2019, the Group determined whether the arrangement was or contained a lease based on the assessment of whether: fulfilment of the arrangement was dependent on the use of a specific asset or assets; and the arrangement had conveyed a right to use the asset. An arrangement conveyed the right to use the asset if one of the following was met: the purchaser had the ability or right to operate the asset while obtaining or controlling more than an insignificant amount of the output; the purchaser had the ability or right to control physical access to the asset while obtaining or controlling more than an insignificant amount of the output; or; amounts expected to be payable under a residual value guarantee; and facts and circumstances indicated that it was remote that other parties would take more than an insignificant amount of the output, and the price per unit was neither fixed per unit of output nor equal to the current market price per unit of output. As a lessee In the comparative period, where the Group acquires the use of assets under finance leases, the amounts representing the fair value of the leased asset, or, if lower, the present value of the minimum lease payments, of such assets are recognised as plant and equipment and the corresponding liabilities, net of finance charges, are recorded as obligations under finance leases. Depreciation is provided at rates which write off the cost or valuation of the assets over the term of the relevant lease or, where it is likely the Group will obtain ownership of the asset, the life of the asset, as set out in note 3(k). Impairment losses are accounted for in accordance with an accounting policy as set out in note 3(h). Finance charges implicit in the lease payments are charged to profit or loss over the period of the leases so as to produce an approximately constant periodic rate of charge on the remaining balance of the obligations for each accounting period. Contingent rentals are charged to profit or loss in the accounting period in which they are incurred. Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses on a straight line basis unless another method is more representative of the pattern to the users benefit. (h) Impairment of Assets Internal and external sources of information are reviewed at the end of each reporting period to identify indications that the following assets may be impaired or, except in the case of goodwill, an impairment loss previously recognised no longer exists or may have decreased: - property, plant and equipment (other than properties carried at revalued amounts); - intangible assets; and - goodwill. If any such indication exists, the asset's recoverable amount is estimated. In addition for goodwill, intangible assets that are not yet available for use and intangible assets that have indefinite useful lives, the recoverable amount is estimated annually whether or not there is any indication of impairment. (i) Calculation of recoverable amount The recoverable amount of an asset is the greater of its fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where an asset does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the smallest group of assets that generates cash inflows independently (i.e. a cash-generating unit). (ii) Recognition of impairment losses An impairment loss is recognized in profit or loss if the carrying amount of an asset, or the cash-generating unit to which it belongs, exceeds its recoverable amount. Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit (or group of units) and then, to reduce the carrying amount of the other assets in the unit (or group of units) on a pro rata basis, except that the carrying value of an asset will not be reduced below its individual fair value less costs of disposal (if measurable) or value in use (if determinable). (iii) Reversals of impairment losses In respect of assets other than goodwill, an impairment loss is reversed if there has been a favorable change in the estimates used to determine the recoverable amount. An impairment loss in respect of goodwill is not reversed. A reversal of an impairment loss is limited to the asset's carrying amount that would have been determined had no impairment loss been recognized in prior years. Reversals of impairment losses are credited to profit or loss in the year in which the reversals are recognized. (i) Investments and Other Financial Assets (i) Recognition Financial instruments are initially measured at costs on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below. (ii) Financial assets at fair value through profit and loss A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designed by management and within the requirements of IFRS 39: Recognition and Measurement of Financial Instruments. Derivatives are also categorized as held for trading unless they are designated as hedges. Realized and unrealized gains and losses arising from changes in the fair value of these assets are recognized in profit or loss in the period in which they arise. (iii) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determined payments that are not quoted in an active market and are stated at amortized costs using the effective interest rate methods. (iv) Financial liabilities Non-derivative financial liabilities are recognized at amortized costs, comprising original debt less principal payments and amortization. (v) Fair value Fair value is determined based on current bid prices for all quoted investments. (vi) Impairment At each reporting date, the Group assesses whether there is any objective evidence that a financial instrument has been impaired. Impairment losses are recognized in profit or loss. (j) Trade deposits Trade deposits are payments in advance to suppliers of equipment, products and services, which are initially recognized at fair value and thereafter stated at amortized cost using the effective interest method less impairment losses, except where the effect of discounting would be immaterial. (k) Plant and Equipment Items of plant and equipment are measured at cost less accumulated depreciation and impairment losses. The carrying amount of plant and equipment is reviewed annually by the directors to ensure it is not in excess of the recoverable amount from those assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset's employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. The depreciable amount of all fixed assets are depreciated over their estimated useful lives to the Group commencing from the time the assets is held ready for use. Depreciation is calculated on a straight-line basis to write the net cost of each item of plant and equipment over their expected useful lives. The depreciation rates used for each class of depreciable assets are generally as follows: Class of fixed assets Depreciation rate Leasehold Improvements lesser of 5 years or lease term Office Furniture and Equipment 5-12 years Machinery 5-12 years Gains and losses on disposal are determined by deducting the net book value of the assets from the proceeds of sale and are booked to the profit or loss in the year of disposal. (l) Foreign Currency Translation (i) Functional and presentation currency Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). The consolidated financial statements are presented in Australian Dollars ("A$"), which is the Group's presentation currency. (ii) Transactions and balances Foreign currency transactions during the year are translated at the foreign exchange rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the foreign exchange rates ruling at the end of the reporting period. Exchange gains and losses are recognized in profit or loss, except those arising from foreign currency borrowings used to hedge a net investment in a foreign operation which are recognized in other comprehensive income. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the foreign exchange rates ruling at the transaction dates. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated using the foreign exchange rates ruling at the dates the fair value was measured. (iii) Group companies The results of foreign operations are translated into Australian Dollars at the exchange rates approximating the foreign exchange rates ruling at the dates of the transactions. Statement of financial position items, are translated into Australian Dollars at the closing foreign exchange rates at the end of the reporting period. The resulting exchange differences are recognized in other comprehensive income and accumulated separately in equity in the exchange reserve. On disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation is reclassified from equity to profit or loss when the profit or loss on disposal is recognized. For years ended December 31, 2020 and 2019, the comprehensive income was A$883,878 and A$735,213 respectively which was mainly resulted from the translation of the foreign operations in Hong Kong (HK$), China (RMB) and United States (USA) into Australia dollars. The significant monetary items denominated in currencies other than Australia dollars include intangible assets and goodwill, due to related companies, amount due to ultimate holding company, borrowings, convertible bonds and derivative financial instruments. (m) Trade and Other Receivables Trade receivables are recognized at original invoice amounts less an allowance for uncollectible amounts and have repayment terms between 30 and 90 days. Collectability of trade receivables is assessed on an ongoing basis. Debts which are known to be uncollectible are written off. An allowance is made for doubtful debts where there is objective evidence that the Group will not be able to collect all amounts due according to the original terms. Objective evidence of impairment includes financial difficulties of the debtor, default payments or debts more than 30 days overdue. On confirmation that the trade receivable will not be collectible, the gross carrying value of the asset is written off against the associated provision. (n) Trade and Other Payables These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. The amounts are unsecured and are paid on normal commercial terms. (o) Provisions and Contingent Liabilities Provisions are recognized for other liabilities of uncertain timing or amount when the Group has a legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Where the time value of money is material, provisions are stated at the present value of the expenditure expected to settle the obligation. Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote. (p) Borrowings Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities, which are not an incremental cost relating to the actual draw-down of the facility, are recognized as an offset against the liability balance and amortized on a straight-line basis over the term of the facility. Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of the financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in other income or other expenses. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period. (q) Borrowing Costs Borrowing costs that are directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of that asset. Other borrowing costs are expensed in the period in which they are incurred. The capitalization of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or complete. (r) Convertible Bonds Convertible bonds that can be converted into ordinary shares at the option of the holder, where the number of shares to be issued is fixed, are accounted for as compound financial instruments, i.e. they contain both a liability component and an equity component. At initial recognition the liability component of the convertible bonds is measured at fair value based on the future interest and principal payments, discounted at the prevailing market rate of interest for similar non-convertible instruments. The equity component is the difference between the initial fair value of the convertible bonds as a whole and the initial fair value of the liability component. Transaction costs that relate to the issue of a compound financial instrument are allocated to the liability and equity components in proportion to the allocation of proceeds. The liability component is subsequently carried at amortised cost. Interest expense recognised in profit or loss on the liability component is calculated using the effective interest method. The equity component is recognised in the capital reserve until either the bonds are converted or redeemed. If the bonds are converted, the capital reserve, together with the carrying amount of the liability component at the time of conversion, is transferred to share capital and share premium as consideration for the shares issued. If the bonds are redeemed, the capital reserve is released directly to retained profits. (s) Derivative Financial Instruments Derivative financial instruments are recognised at fair value. At the end of each reporting period the fair value is remeasured. The gain or loss on remeasurement to fair value is recognised immediately in profit or loss. (t) Employee Benefits (i) Employee leave entitlements Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the date of the statement of financial position. Employee entitlements to sick leave and maternity leave are not recognised until the time of leave. (ii) Pension obligations Salaries, annual bonuses, paid annual leave, contributions to defined contribution retirement plans and the cost of non-monetary benefits are accrued in the year in which the associated services are rendered by employees. Where payment or settlement is deferred and the effect would be material, these amounts are stated at their present values. (iii) Termination benefits Termination benefits are recognised at the earlier of when the Group can no longer withdraw the offer of those benefits and when it recognises restructuring costs involving the payment of termination benefits. (u) Cash and Cash Equivalents Cash and cash equivalents include cash on hand and call deposits with banks or financial institutions and net of bank overdrafts. (v) Revenue Revenue is recognized in accordance with IFRS 15 Revenue from Contracts with Customers. The underlying principle is to recognize revenue when a customer obtains control of the promised goods at an amount that reflects the consideration that is expected to be received in exchange for those goods. It also requires increased disclosures including the nature, amount, timing, and uncertainty of revenues and cash flows related to contracts with customers. We adopted IFRS 15 Revenue from Contracts with Customers at the beginning of 2018, and implemented new accounting policies and internal controls necessary to support its requirements. The adoption of IFRS 15 did not have any impact on our revenue recognition. We recognize revenue upon transfer of control of the promised goods in a contract with a customer in an amount |
NOTE 4. REVENUE AND SEGMENT INF
NOTE 4. REVENUE AND SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 4. REVENUE AND SEGMENT INFORMATION | NOTE 4. REVENUE AND SEGMENT INFORMATION Consolidated December 31, A$ December 31, A$ December 31, A$ Development, sales and distribution of 3D autostereoscopic products and conversion equipment 1,427,157 1,273,921 1,262,066 Sales of software and technology solutions - 1,504 13,731 Sales and distribution of audio products - - 48,609 Sales of air- filter products 317,472 - - Total Revenue 1,744,629 1,275,425 1,324,406 Operating segments have been determined on the basis of reports reviewed by the executive director. The executive director is considered to be the chief operating decision maker of the Group. The executive director considers that the Group has assessed and allocated resources on this basis. The executive director considers that the Group has four operating segments for the year ended December 31, 2020 (2018: four and 2019: three), being (1) the development, sale and distribution of autostereoscopic 3D displays, conversion equipment, software and others, (2) Sales of air-filter products, (3) provision of consultancy services and (4) corporate. Revenue by geographic location The Group's operations are located in Korea, Hong Kong and China. The following table provides an analysis of the Group's sales by geographical markets based on locations of customers: Consolidated December 31, December 31, December 31, Hong Kong 1,366,200 1,195,150 326,943 China 60,956 80,275 997,463 Korea 315,034 - - Other 2,439 - - 1,744,629 1,275,425 1,324,406 Non-current assets by geographic location Consolidated December 31, 2020 A$ December 31, 2019 A$ December 31, 2018 A$ Australia - - 4,468,293 Hong Kong 262,626 13,136,585 14,534,313 China 2,139,605 1,580,444 1,030,154 Korea 4,915,447 - - 7,317,678 14,717,029 20,032,760 Major customers For the year ended December 31, 2020, the Group has four individual customers (2019 and 2018: 2 and 2 respectively) with revenues comprising more than 10% of Group's revenues and their respective receivables due from these customers are disclosed below: December 31, 2020 December 31, 2019 December 31, 2018 Percentage of Revenue Balance due A$ Percentage of Revenue Balance due A$ Percentage of Revenue Balance due A$ Customer A 16.23% - 41% - - - Customer B - - 13% 116,488 - - Customer C - - - - 44% 576,590 Customer D - - - - 28% 346,163 Customer E 41.23% 628,621 - - - - Customer F 18.05% 314,892 - - - - Customer G 10.87% 179,338 - - - - Segment information for the reporting period is as follows: For the year ended December 31, 2020 Development, sale and distribution of 3D displays, conversion equipment, software and others A$ Sales of air- filter products A$ Consultancy services A$ Corporate A$ Total A$ Revenue Revenue from operating activities 1,427,157 317,472 - - 1,744,629 Interest income 6,197 - - - 6,197 Fair value change in derivative financial instruments - - - 2,312,197 2,312,197 Other income 82,561 - - - 82,561 Segment revenue 1,515,915 317,472 - 2,312,197 4,145,584 Cost of sales 1,155,006 156,560 - - 1,311,566 Employee benefit expenses 1,570,626 - 241,914 400,103 2,212,643 Depreciation and amortization expenses 1,897,243 179,144 2,307 68 2,078,762 Professional and consulting expenses (116,977) - 634,186 856,698 1,373,907 Travel and accommodation expenses 24,436 - 2,246 14,213 40,895 Other operating expenses 734,523 1,196 40,476 334,945 1,111,140 Provision for bad debt 58,932 - - - 58,932 Provision for inventory obsolescence (17,671) - - - (17,671) Loss disposal of subsidiaries (22,206,347) - - 22,235,337 28,990 Plant and equipment written off - - - 110 110 Provision for impairment loss on intangible assets 3,459,340 - - - 3,459,340 Development projects written off 930,356 - - - 930,356 Finance costs 408,054 - - 1,692,218 2,100,272 Segment expenses (12,102,479) 336,900 921,129 25,533,692 14,689,242 Segment operating (loss) / profit 13,618,394 (19,428) (921,129) (23,221,495) (10,543,658) Segment assets 2020 2,070,047 6,529,733 2,337,630 2,016,256 12,953,666 Segment liabilities 2020 5,015,497 2,733,042 5,888,659 (5,589,384) 8,047,814 For the year ended December 31, 2019 Development, sale and distribution of 3D displays, conversion equipment, software and others A$ Sales and distribution of audio products* A$ Consultancy services A$ Corporate A$ Total A$ Revenue from operating activities 1,275,425 - - - 1,275,425 Interest income 115,707 - - 55 115,762 Fair value change in derivative financial instruments - - - 127,551 127,551 Other income 807,831 - - - 807,831 Gain on disposal of plant and equipment 212,195 - - - 212,195 Segment revenue 2,411,158 - - 127,606 2,538,764 Cost of sales 1,008,821 - - - 1,008,821 Employee benefit expenses 3,302,504 - 42,573 689,301 4,034,378 Depreciation and amortization expenses 3,166,643 - 7,375 766 3,174,784 Professional and consulting expenses 711,172 - 547,018 761,780 2,019,970 Travel and accommodation expenses 174,914 - 51,171 55,810 281,895 Other operating expenses 1,731,000 - 5,544 17,452 1,753,996 Provision for impairment loss of goodwill - - - 4,486,301 4,486,301 Provision for inventory obsolescence 799,871 - - - 799,871 Finance costs 1,561,625 - - - 1,561,625 Segment expenses 12,456,550 - 653,681 6,011,410 19,121,641 Segment operating (loss) / profit (10,045,392) - (653,681) (5,883,804) (16,582,877) Segment assets 2019 12,498,397 - 29,716 7,418,163 19,946,276 Segment liabilities 2019 16,209,166 - 3,004,589 653,498 19,867,253 * Discontinued in 2019 For the year ended December 31, 2018 Development, sale and distribution of 3D displays, conversion equipment, software and others A$ Sales and distribution of audio products A$ Consultancy services A$ Corporate A$ Total A$ Revenue Revenue from operating activities 1,275,797 48,609 - - 1,324,406 Interest income 21,343 1 - 65 21,409 Fair value change in derivative financial instruments - - - 709,543 709,543 Other income 469,660 - - - 469,660 Gain / (loss) on disposal of subsidiaries 521,042 (39,399) - 127,352 608,995 Segment revenue 2,287,842 9,211 - 836,960 3,134,013 Cost of sales 696,787 26,924 - - 723,711 Employee benefit expenses 2,154,015 - 32,025 67,371 2,253,411 Depreciation and amortization expenses 2,002,195 586 26,592 - 2,029,373 Professional and consulting expenses 1,273,595 - - 473,167 1,746,762 Travel and accommodation expenses 244,867 481 21,142 117,694 384,184 Other operating expenses 2,175,550 (446,085) 2,530 278,147 2,010,142 Provision for impairment loss of goodwill - - - 9,953,311 9,953,311 Finance costs 986,531 - - 396,868 1,383,399 Segment expenses 9,533,540 (418,094) 82,289 11,286,558 20,484,293 Segment operating (loss) / profit (7,245,698) 427,305 (82,289) (10,449,598) (17,350,280) Segment assets 2018 11,674,848 - 35,610 14,322,616 26,033,074 Segment liabilities 2018 2,797,393 - (688,268) 7,302,198 9,411,323 In presenting the geographic information, segment revenue has been based on the geographic location of customers and segment assets were based on the geographic location of the assets. |
NOTE 5. OTHER INCOME
NOTE 5. OTHER INCOME | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 5. OTHER INCOME | NOTE 5. OTHER INCOME Consolidated December 31, A$ December 31, A$ December 31, A$ Government grant 82,082 789,083 436,889 Sundry income 479 18,748 32,771 82,561 807,831 469,660 |
NOTE 6. FINANCE COSTS
NOTE 6. FINANCE COSTS | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 6. FINANCE COSTS | NOTE 6. FINANCE COSTS Consolidated December 31, December 31, A$ December 31, A$ Bank overdraft and borrowing interest 37,091 84,920 53,262 Interest on revolving loan 228,627 50,328 - Interest on finance lease liability 32,526 109,675 2,993 Interest on convertible bonds (Note 23) 109,811 1,316,702 930,276 Interest charged by the ultimate holding company - - 396,868 Interest on convertible promissory notes (Note 25) 1,692,217 - - 2,100,272 1,561,625 1,383,399 |
NOTE 7. LOSS BEFORE INCOME TAX
NOTE 7. LOSS BEFORE INCOME TAX | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 7. LOSS BEFORE INCOME TAX | NOTE 7. LOSS BEFORE INCOME TAX Consolidated December 31, A$ December 31, A$ December 31, A$ Employee benefit expenses: - Wages and salaries 1,482,072 3,352,495 2,752,041 - Defined contribution superannuation plan expenses 83,441 255,708 150,114 - Less: Labor cost allocated to development projects (133,702) (289,126) (716,115) 1,431,811 3,319,077 2,186,040 - Executive directors' remuneration 722,157 683,944 - - Non-executive directors' remuneration 58,675 31,357 67,371 780,832 715,301 67,371 Total employee benefit expenses 2,212,643 4,034,378 2,253,411 Depreciation and amortization of non-current assets: - Leasehold improvements 10,385 44,698 310,370 - Office furniture and equipment 179,140 504,447 115,123 - Motor vehicles - 18,757 9,813 - Machinery 172,982 - - - Right of use assets 299,981 488,520 - - Intangible assets 1,416,274 2,118,362 1,594,067 Total depreciation and amortization 2,078,762 3,174,784 2,029,373 Other Expenses: Allowances for bad debts 58,932 11,052 124,528 Rental expense on operating lease 126,382 637,321 674,112 Provision for inventory obsolescence (17,671) 799,871 100,000 Audit and review of financial statements: - statutory audit of the Group in Australia 25,000 55,157 62,794 - statutory audit of the Group in USA 76,780 435,899 - - auditors of the subsidiaries in Hong Kong and China - 14,246 9,175 - audit for other reporting purposes 18,822 - 69,110 Total audit and review fees 120,602 505,302 141,079 |
NOTE 8. INCOME TAX (EXPENSE) _
NOTE 8. INCOME TAX (EXPENSE) / CREDIT | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 8. INCOME TAX (EXPENSE) / CREDIT | NOTE 8. INCOME TAX (EXPENSE) / CREDIT Consolidated December 31, A$ December 31, A$ December 31, A$ Income tax over provision / (income tax expenses) - - 102,853 Deferred tax (expenses) / credit - (117,322) 404,204 Income tax (expenses) / credit - (117,322) 507,057 (a) The prima-facie tax on (loss) / profit before income tax is reconciled to the income tax credit /(expense) as follows: Consolidated December 31, A$ December 31, December 31, A$ Numerical reconciliation of income tax expense to prima facie tax payable Loss before income tax (10,543,548) (16,582,877) (17,350,280) Income tax credit / (expenses) on loss before income tax at 30% 3,163,064 4,974,863 5,205,084 Difference in overseas tax rates (148,299) (3,260,006) (830,805) Add / (less) the tax effect of: Reversal of over provision - - 102,853 Tax losses and temporary differences for the year for which no deferred tax is recognized (3,014,765) (1,832,179) (3,970,075) Income tax (expenses) / credit - (117,322) 507,057 (b) Deferred tax assets / (liabilities) arising from temporary differences and unused tax losses can be summarized as follows: Consolidated December 31, A$ December 31, A$ Balance brought forward (1,372,653) (1,244,814) Temporary differences derecognized - (117,322) Release of disposal of subsidiaries 1,380,402 - Exchange difference (21,417) (10,517) Total (13,668) (1,372,653) (c) There were no income tax payable in the consolidated statement of financial position in years 2019 and 2020. |
NOTE 9. DIVIDENDS
NOTE 9. DIVIDENDS | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 9. DIVIDENDS | NOTE 9. DIVIDENDS No dividends were declared and paid during the financial year ended December 31, 2020 (2019: Nil). |
NOTE 10. LOSS PER SHARE
NOTE 10. LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 10. LOSS PER SHARE | NOTE 10. LOSS PER SHARE Consolidated December 31, December 31, December 31, Loss after income tax attributable to shareholders A$ (10,034,077) A$ (15,646,147) A$ (15,962,278) Number of ordinary shares 6,513,671 3,377,386 3,377,386 Weighted average number of ordinary shares on issue 4,311,360 3,377,386 2,692,543 Basic and diluted (loss) / earnings per share A$ (2.33) A$ (4.63) A$ (5.93) |
NOTE 11. INVENTORIES
NOTE 11. INVENTORIES | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 11. INVENTORIES | NOTE 11. INVENTORIES Inventories consist of the following: Consolidated December 31, December 31, A$ Raw materials 296,472 843,686 Finished goods – displays and other products 529,080 789,984 Provision for inventories obsolescence (638,151) (884,497) Total 187,401 749,173 |
NOTE 12. TRADE AND OTHER RECEIV
NOTE 12. TRADE AND OTHER RECEIVABLES | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 12. TRADE AND OTHER RECEIVABLES | NOTE 12. TRADE AND OTHER RECEIVABLES Consolidated December 31, A$ December 31, A$ Trade receivables 1,233,709 892,488 Other receivables 1,689 2,390 1,235,398 894,878 Less: Allowances for doubtful debts (70,793) (123,920) 1,164,605 770,958 (a) Ageing Analysis The ageing analysis of trade receivables is as follows: Consolidated December 31, A$ December 31, A$ Current - - Past due: < 31 days 711,754 31,495 31 - 90 days 394,384 12,655 > 90 days 127,571 848,338 1,233,709 892,488 (b) Trade receivables which are past due but not impaired Included in the Group's trade receivable balances are debtors with an aggregate carrying amount of A$1,233,709 (2019: A$892,488) which are past due at the end of the reporting period for which the Group has made provision for impairment loss of A$70,793 (2019: A$123,920). The carrying value of trade receivables is considered reasonable approximation of fair value to the short term nature of the balance. The maximum exposure to credit risk at the reporting date is the fair value of each class of receivables in the consolidated financial statements. Refer to Note 31(e) for further details of credit risk management. |
NOTE 13. OTHER ASSETS
NOTE 13. OTHER ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 13. OTHER ASSETS | NOTE 13. OTHER ASSETS Consolidated December 31, December 31, Prepayments 50,382 311,710 Trade deposits 692,026 1,522,976 Other deposits 1,347,360 262,228 VAT receivable 129 194,359 2,089,897 2,291,273 |
NOTE 14. PLANT AND EQUIPMENT
NOTE 14. PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 14. PLANT AND EQUIPMENT | NOTE 14. PLANT AND EQUIPMENT Consolidated Leasehold Improvements A$ Fixtures and Equipment A$ Motor Vehicles Machinery A$ Total A$ At January 1, 2019 Cost 731,794 2,290,643 68,170 - 3,090,607 Accumulated depreciation (643,317) (1,710,235) (7,575) - (2,361,127) Net book amount at January 1, 2019 88,477 580,408 60,595 - 729,480 Year ended December 31, 2019 Opening net book amount 88,477 580,408 60,595 - 729,480 Additions 38,866 1,184,162 - - 1,223,028 Disposals - (636,587) - - (636,587) Transfer to right of use assets (Note 22(a)) - - (41,838) - (41,838) Depreciation expenses (44,698) (504,447) (18,757) - (567,902) Exchange difference 1,304 21,632 - - 22,936 Closing net book amount at December 31, 2019 83,949 645,168 - - 729,117 At December 31, 2019 Cost 826,997 2,888,508 - - 3,715,505 Accumulated depreciation (743,048) (2,243,340) - - (2,986,388) Net book amount at December 31, 2019 83,949 645,168 - - 729,117 Year ended December 31, 2020 Opening net book amount 83,949 645,168 - - 729,117 Additions 2,064 7,899 - 7,224,551 7,234,514 Disposals (80,581) (203,788) - - (284,369 ) Depreciation expenses (10,385) (172,979) - (179,144) (362,508) Exchange difference 4,953 (13,674) - 9,645 924 Closing net book amount at December 31, 2020 - 262,626 - 7,055,052 7,317,678 At December 31, 2020 Cost - 710,621 - 7,224,551 7,935,172 Accumulated depreciation - (447,995) - (169,499) (617,494) Net book amount at December 31, 2020 - 262,626 - 7,055,052 7,317,678 |
NOTE 15. INTANGIBLE ASSETS AND
NOTE 15. INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 15. INTANGIBLE ASSETS AND GOODWILL | NOTE 15. INTANGIBLE ASSETS AND GOODWILL Consolidated Goodwill A$ Autostereoscopic 3D Display Technologies and Knowhow A$ Patents and Trademark A$ Software and License A$ Total A$ Cost At January 1, 2019 14,421,604 14,710,435 1,288,146 518,165 30,938,350 Additions - - - 7,283 7,283 Exchange difference 157,103 169,887 (4,446) 6,023 328,567 At December 31, 2019 14,578,707 14,880,322 1,283,700 531,471 31,274,200 At January 1, 2020 14,578,707 14,880,322 1,283,700 531,471 31,274,200 Additions - 446,786 36,688 3,771 487,245 Disposal (14,578,707) 8,927,601 (976,692) (2,680) (24,485,680) Exchange difference - (181,683) (107,168) (45,698) (334,549) At December 31, 2020 - 6,217,824 236,528 486,864 6,941,216 Accumulated Amortization and Impairment Losses At January 1, 2019 (9,953,311) (4,248,763) (341,868) (71,241) (14,615,183) Amortization - (1,863,639) (130,221) (124,502) (2,118,362) Provision for impairment (4,486,301) - - - (4,486,301) Exchange difference (139,095) (45,470) 81,598 (584) (103,551) At December 31, 2019 (14,578,707) (6,157,872) (390,491) (196,327) (21,323,397) At January 1, 2020 (14,578,707) (6,157,872) (390,491) (196,327) (21,323,397) Amortization - (1,238,718) (82,474) (95,082) (1,416,274) Provision for impairment - (3,155,932) (81,875) (221,533) (3,459,340) Disposal 14,578,707 4,617,299 288,570 - 19,484,576 Exchange difference - ( 282,601) 29,742 26,078 (226,781) At December 31, 2020 - (6,217,824) (236,528) (486,864) (6,941,216) Carrying Amount At December 31, 2019 - 8,722,450 893,209 335,144 9,950,803 At December 31, 2020 - - - - - The technology and software applied to develop the autostereoscopic 3D display technologies was included with the acquisition of Marvel Digital Limited on September 30, 2015 and was revalued to fair value at that time by an independent valuer. As at December 31, 2020, based on the results of impairment review and value-in-use assessment, the management considered that the goodwill and intangible assets have suffered an impairment loss and provision of impairment for goodwill of A$4,486,301 has been made in 2019, which then impaired the full value of the goodwill of A$14,578,707. There was no reclassification of development costs to intangible assets in 2020. In 2019, development projects were reclassified as intangible asset only when the Group can demonstrate the technical feasibility of completing the intangible asset itself or technology so that it will be available for application in existing or new products or for sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the development, the ability to measure reliably the expenditure attributable to the intangible asset during its development and the ability to use the tangible asset generated. During the year 2020, the Group restructured of certain subsidiaries which had intangible assets. The details of these disposals are listed out in note 27. |
NOTE 16. DEVELOPMENT PROJECTS
NOTE 16. DEVELOPMENT PROJECTS | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 16. DEVELOPMENT PROJECTS | NOTE 16. DEVELOPMENT PROJECTS Consolidated December 31, A$ December 31, A$ As at January 1: Cost 3,611,336 2,980,113 Accumulated impairment losses - - Net book amount 3,611,336 2,980,113 A$ A$ Year ended December 31: Opening net book amount 3,611,336 2,980,113 Additions 125,520 598,649 Disposal (2,864,052) (687) Written off (930,356) - Exchange difference 57,552 33,261 Closing net book amount - 3,611,336 A$ A$ As at December 31: Cost - 3,611,336 Accumulated impairment losses - - Net book amount - 3,611,336 Development projects represent the development costs directly attributable to and incurred for several internal technology projects of the Group which are in cooperation with the universities and professional technology institutions in Hong Kong for developing innovative technology to be applied in the existing and new 3D related products of the Group. Cost model is applied for development projects which require these assets to be carried at cost less any accumulated impairment losses. The Group had performed an impairment review for the development projects at the reporting period end and management considered that the development projects had suffered impairment loss and have been written off accordingly. |
NOTE 17. TRADE AND OTHER LIABIL
NOTE 17. TRADE AND OTHER LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 17. TRADE AND OTHER LIABILITIES | NOTE 17. TRADE AND OTHER LIABILITIES Consolidated December 31, A$ December 31, Trade payables (Note 32 (diii)) 146,730 109,746 Accruals 385,888 328,071 Trade deposits received 630,523 900,740 Other borrowings (i) 211,567 1,761,308 Other payable 2,214,456 1,238,630 3,589,164 4,338,495 (i) The loan is unsecured, carry interest at 8% per annual, and repayable on December 31, 2020. |
NOTE 18. PROVISION FOR EMPLOYEE
NOTE 18. PROVISION FOR EMPLOYEE BENEFITS | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 18. PROVISION FOR EMPLOYEE BENEFITS | NOTE 18. PROVISION FOR EMPLOYEE BENEFITS Consolidated December 31, A$ December 31, 2019 Provision for employee benefits - 64,135 The provision for employee benefits represents the unpaid annual leave provision. |
NOTE 19. AMOUNTS DUE TO RELATED
NOTE 19. AMOUNTS DUE TO RELATED COMPANIES | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 19. AMOUNTS DUE TO RELATED COMPANIES | NOTE 19. AMOUNTS DUE TO RELATED COMPANIES Consolidated December 31, A$ December 31, A$ Current portion 237,674 6,101,850 Non-current portion - - 237,674 6,101,850 As at December 31, 2020, the amounts due to related companies are unsecured, non-interest bearing and repayable on demand. In 2018, a Group company entered into a loan agreement to borrow A$1,664,924 (HK$9,200,000) from a former related company, Oakridge (Hong Kong) Corporation Limited ("Oakridge"), a company owned and controlled by Dr. Herbert Ying Chiu LEE, the then controlling shareholder of the Company. The loan was non-interest bearing, unsecured and repayable on March 31, 2020 after an extension from the previous repayment date of September 30, 2019. During the year 2019, Oakridge advanced to the Group an additional A$3,478,140 (HK$19,000,000). These advances were non-interest bearing, non-secured and repayable on March 31, 2020. As at December 31, 2019, the Group owed Oakridge A$5,162,292 (HK$28,200,000) in respect of these loans. On March 31, 2020, the terms of the above said unsecured loans of A$5,162,292 (HK$28,200,000) was changed to interest bearing at an annual interest rate of 6.0% and the repayment date was extended to March 31, 2021. The loan was removed after disposal of subsidiaries. The datails of these disposals are listed out in note 27. |
NOTE 20. AMOUNT DUE TO HOLDING
NOTE 20. AMOUNT DUE TO HOLDING COMPANY | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 20. AMOUNT DUE TO HOLDING COMPANY | NOTE 20. AMOUNT DUE TO HOLDING COMPANY Consolidated December 31, A$ December 31, A$ Current portion 532,718 582,832 Non-current portion - - 532,718 582,832 In 2018, the Group entered into two loans with Marvel Finance Limited ("MFL") then ultimate holding company, where the Group lend approximately a total of A$2,117,349 (HK$11,700,000) to MFL. One loan of A$1,085,820 (HK$6,000,000) bears interest at 10% per annum and the second loan of A$1,031,529 (HK$5,700,000) bears interests at 5% per annum. Both loans are unsecured and repayable on September 30, 2019. During the year 2019, the Group earned interest income of A$115,678 (HK$637,301) from these two loans. As at December 31, 2020, the amounts due to ultimate holding company is unsecured non-interest bearing and repayable on demand. |
NOTE 21. BORROWINGS
NOTE 21. BORROWINGS | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 21. BORROWINGS | NOTE 21. BORROWINGS Consolidated December 31, A$ December 31, A$ Bank overdraft, unsecured - 902,482 Bank borrowings, unsecured - 915,300 - 1,817,782 During the year 2020, the Group restructured of certain subsidiaries which had the bank overdraft and bank borrowings. The details of these disposals are listed out in note 27. |
NOTE 22. LEASES
NOTE 22. LEASES | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 22. LEASES | NOTE 22. LEASES (a) Right of use assets The carrying amount of the Group's right of use assets and the movements during the year are as follows: Consolidated Lease Properties Motor Vehicles Total A$ A$ A$ As at January 1, 2019 1,106,486 - 1,106,486 Additions 1,267,476 - 1,267,476 Terminations (825,454) - (825,454) Transfer from plant and equipment - 41,838 41,838 Depreciation expenses (488,520) - (488,520) Exchange difference 4,998 1,068 6,066 As at December 31, 2019 & January 1, 2020 1,064,986 42,906 1,107,892 Depreciation expenses (287,557) (12,427) (299,984) Disposal (862,109) (3,887) (865,996) Exchange difference 84,680 (26,592) 58,088 As at December 31. 2020 - - - (b) Lease liabilities Consolidated December 31, A$ December 31, A$ Within one year - 666,868 Two to five years - 501,739 - 1,168,607 Less: Amount due within one year shown under current liabilities - (666,868) Amount due after one year - 501,739 Analyzed into: - 666,868 Current portion - 501,739 Non-current portion - 1,168,607 Obligations under finance leases carried an interest rate of 2.5% per annum. |
NOTE 23. CONVERTIBLE BONDS
NOTE 23. CONVERTIBLE BONDS | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 23. CONVERTIBLE BONDS | NOTE 23. CONVERTIBLE BONDS Consolidated December 31, A$ December 31, Face value of convertible bonds issued on 3 January 2018 - 3,769,470 Equity component - (535,948) Derivatives embedded in the convertible bonds issued (Note 24) - (772,112) Liability component on initial recognition at January 3, 2018 - 2,461,410 Interest accrued but not yet paid for the year ended 2018 - 536,216 Interest accrued at effective interest rate during the year (Note 6) - 1,316,702 Interest paid during the year - (209,392) Exchange difference - 315,963 Carrying value as at end of year - 4,420,899 On January 3, 2018, the Group entered into the following agreements in connection with the issue of HK$23 million (equivalent to approximately A$3.8 million) Convertible Bonds ("Convertible Bonds"): (i) Subscription Agreement between Marvel Digital Limited, a wholly-owned subsidiary of the Company (the "Issuer" or "MDL") and an independent third party entity ("Bondholder") for the Convertible Bonds, (ii) Deed of Guarantee between the Company and the Bondholder to guarantee the payment obligations under the Convertible Bonds and (iii) Put Option Deed between the Company and the Bondholder to repurchase any converted MDL Shares as described below. On the same date, pursuant to the Subscription Agreement, the Convertible Bonds were issued by MDL to the Bondholder as all the terms and conditions in respect of the subscription of the Convertible Bonds were complied with and fulfilled. Pursuant to the terms of the Convertible Bonds, the Convertible Bonds are convertible in the circumstances set out therein into 75,000 ordinary shares of MDL ("MDL Shares") at a conversion price of HK$306.67 per share, which is equivalent to 20% of the enlarged issued share capital of MDL as of the date of the above Subscription Agreement. The Bondholder will have the right to convert the whole of their Convertible Bonds into ordinary shares of MDL at any time during the period from January 3, 2018 to January 2, 2020. The period may be extended to a further 12 months subject to the mutual agreement among MDL, the Company and Bondholder. Unless previously redeemed or converted, the Convertible Bonds will be redeemed at 100% of their principal amount on the maturity date which is 2 years from the Convertible Bonds issue date. In connection with the Convertible Bonds, the Company also entered into a Deed of Guarantee to guarantee the due and punctual performance and observance by the Issuer of its payment obligations of the bond principal and interest under the Convertible Bonds until all the guaranteed obligations have been fully satisfied, discharged or paid in full. A Put Option Deed was also entered into between the Company and the Bondholder whereby the Bondholder can exercise an option, during the Put Option Exercise Period as defined in Note 24, to have IMTE repurchase the MDL Shares converted by the Bondholder at the principal amount of the converted Convertible Bonds. The estimated net proceeds from this bond issue, after deduction of commission and expenses, amount to approximately HK$21.5 million. On January 3, 2020 the Company was not able to pay the Convertible Bonds on the maturity date. On or about January 17, 2020, the Company and the Bondholder agreed to a payment schedule of paying HK$13 million or approximately A$2.4 million on January 17, 2020, and the remaining HK$10 million or approximately A$1.9 million to be paid in 4 equal monthly installments of HK$2.5 million or approximately A$475,000. Furthermore, the interest charged on the outstanding Convertible Bonds amount from January 3, 2020 was at 15% per annum. In 2020, the Group has fully repaid the installments and the accrued interests in full. |
NOTE 24. DERIVATIVE FINANCIAL I
NOTE 24. DERIVATIVE FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 24. DERIVATIVE FINANCIAL INSTRUMENTS | NOTE 24. DERIVATIVE FINANCIAL INSTRUMENTS Consolidated December 31, December 31, Derivative financial liabilities: Put option liability embedded in the convertible bonds issued (Note 23) - 126,095 Derivates related to convertible promissory note (Note 25) 3,790,737 - Fair value change in derivative financial instruments during the year (2,312,197) (127,551) Exchange difference - 1,456 Carrying value as at end of year 1,478,540 - In connection with the Convertible Bonds as disclosed in Note 23, a Put Option Deed was entered into between the Company and the Bondholder in 2018 whereby the Bondholder can exercise an option, during the Put Option Exercise Period (means the period of 7 days commencing from the day immediately after the date falling 2 years from the conversion date of the Convertible Bonds or such other date as agreed by the Company and the Bondholder in writing), to have the Company repurchase a former subsidiary MDL Shares converted by the Bondholder at the principal amount of the converted Convertible Bonds. As at December 31, 2019, the management has determined that the option was not going to be executed and wrote off this derivative financial instruments to the statement of profit and loss. In 2020, the Company entered into two convertible promissory notes as disclosed in Note 25. As at December 31, 2020, the derivatives related to these convertible promissory notes were revalued using the weighted average assumptions: volatility 102.3% and 91.80%, the weighted expected term of two years, a discount rate of 4.13% and a dividend yield of 0%. The Group departed from IFRS 9 for certain disclosures of the note issued January 20, 2020 as not doing so would be misleading to the readers of the consolidated financial statements as it would greatly inflate the activity on the 2020 consolidated statement of activity but have no effect on the consolidated balance sheet or on the net loss of the Group. As such the Group, determined it was appropriate to present the change in fair value of this derivative instrument, net of interest expense recorded at the time of issuance. |
NOTE 25. CONVERTIBLE PROMISSORY
NOTE 25. CONVERTIBLE PROMISSORY NOTES | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 25. CONVERTIBLE PROMISSORY NOTES | NOTE 25. CONVERTIBLE PROMISSORY NOTES Consolidated December 31, A$ December 31, Face value of convertible promissory note issued on January 20, 2020 2,621,360 - Face value of convertible promissory note issued on August 6, 2020 2 291,740 - Debt discount (3,790,737) - Liability component on initial recognition 1,122,363 - Interest accrued but not yet paid for the period (Note 6) 1,692,217 - Interest paid during the period (185,469) - Exchange differences (433,062) - Carrying value as at end of period 2,196,049 - On January 20, 2020, the Company entered into a Convertible Promissory Note Purchase Agreement ("the First CN Agreement"), with an independent third party ("First Noteholder"). Pursuant to First CN Agreement, the First Noteholder purchased from the Company a 10% convertible promissory note (the "First Note") in the principal amount of HK$14 million (equivalent to approximately A$2.6 million) maturing in two (2) years from the date of First CN Agreement. The First Noteholder has the right to convert the principal amount to shares in the Company at a fixed conversion price of US$5.00, subject to adjustment, per share over the term of the First Note. In October 2020, the Company settled the interest accrued of A$174,811 by issuing 46,741 shares to the First Noteholder. On August 6, 2020, the Company entered into a second Convertible Promissory Note Agreement ("the Second CN Agreement") with a third party ("Second Noteholder"). Pursuant to the Second CN Agreement, the holder invested USD 1,650,000 under a convertible note (the "Second Note") without interest, maturing in two years from the date of the Second Note. The Second Noteholder or the Company has the right to convert the principal into ordinary shares of the Company at a conversion price of USD 3.25 per share over the term of the Second Note. The conversion price is subject to downward adjustment and has a floor price of USD 1.50 if the Company sells ordinary shares below the conversion price within 12 months after the date of the Second Note. The Second Note cannot be prepaid. The Second Noteholder agreed to waive piggyback registration rights. The conversion feature in convertible promissory notes were derivative liability based on the fact the conversion into shares could result in a variable number of shares to be issued. |
NOTE 26. CONTROLLED ENTITIES
NOTE 26. CONTROLLED ENTITIES | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 26. CONTROLLED ENTITIES | NOTE 26. CONTROLLED ENTITIES As at December 31, 2020, the entities controlled by the Company are as follows: Name of Subsidiary Country of Incorporation Principal Activities Paid Up Capital Percentage Owned 2020 2019 CIMC Marketing Pty Ltd Australia Management Services & Investment holding A$1 100% 100% Colour Investment Limited Hong Kong Investment holdings HK$43,043,130 100% - Cystar International Limited Hong Kong Sales of software and provision of consultancy services HK$1 100% (Indirect) 95% (Indirect) Great Gold Investment Limited Hong Kong Administrative services HK$1 100% - GOXD International Limited Hong Kong Distribution of Digital Picture Frame HK$56,803,913 80% (Indirect) - Smart (Shenzhen) Technology Limited P.R.C. Marketing and distribution RMB 5,000,000 100% (Indirect) - Smartglass Limited Hong Kong Sales of distribution of switchable glass and consultancy services HK$8 100% 100% Sunup Holdings Limited Hong Kong Manufacturing of filter plates US$1,290 51% - Sunup Korea Limited Hong Kong Sale of filter plates and air filter products US$0.13 51% (Indirect) - Binario Limited British Virgin Islands Investment holding A$1 100% 100% Cystar International (Shenzhen) Limited P.R.C. Dormant RMB 379,141 100% (Indirect) - Digital Media Technology Limited Malaysia Dormant US$100 100% (Indirect) 100% (Indirect) Greifenberg Capital Limited* Hong Kong Dormant HK$1 60% (Direct) - *Acquired after year end |
NOTE 27. BUSINESS COMBINATIONS
NOTE 27. BUSINESS COMBINATIONS | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 27. BUSINESS COMBINATIONS | NOTE 27. BUSINESS COMBINATIONS (a) Disposal of subsidiaries During the year ended December 31, 2020, the Group sold 4 subsidiaries including: Marvel Digital Limited, Marvel Display Technology (Shenzhen) Limited, GOXD Technology Limited and GOXD Dongguan Limited. The detail of the net gain / (loss) on the disposals during the year are set out below: 2020 2019 2018 A$ A$ A$ Total disposal consideration 25,129 - 206,034 Carrying amount of net asset sold (note(i) below) (230,294) - 483,021 Gain on sales before income tax and reclassification of foreign currency translation reserve 255,423 - 689,055 Reclassification of foreign currency transaction reserve (26,871) - (38,640) Non-controlling interest (257,542) - (41,420) (Loss) / gain on disposal after income tax (28,990) - 608,995 (i) Net assets disposed of: 2020 2019 2018 A$ A$ A$ Plant and equipment 284,240 - 190,593 Development projects 2,864,052 - 120,715 Intangible assets 4,790,784 - - Right of use assets 865,996 - - Cash and bank balances 99,061 - 215,528 Inventories 400,806 - 550,906 Trade and others receivable 603,923 - 179,276 Other deposit and prepayment 1,664,343 - - Trade and other liabilities (912,580) - (677,397) Amount due to a related company (6,689,290) - (5,067) Bank overdraft (929,438) - - Bank loan (966,747) - - Lease liabilities (925,042) - - Income tax payables - - (992,343) Deferred tax liabilities (1,380,402) - (65,232) Obligation under finance lease (33,329) - - (230,294) - (483,021) (ii) Net cash flows from disposal of subsidiaries 2020 2019 2018 A$ A$ A$ Consideration received, satisfied in cash 25,129 - 206,034 Cash and cash equivalents of subsidiaries disposed of (included cash at bank and bank overdraft) 830,377 - (215,528) 855,506 - (9,494) (b) Acquisition of Subsidiaries On August 6, 2020, Integrated Media Technology Limited acquired 51% of the ordinary shares of Sunup Holdings Limited for the total consideration transferred of AUD 1,945,770 (USD 1,500,000). This is a nano-coat plated filter business and operates in the sales of air-filter products segment of the consolidated entity. The acquired business contributed loss after tax of AUD 177,829 to the consolidated entity for the period from August 6, 2020 to December 31, 2020. The values identified in relation to the acquisition of Sunup Holdings Limited are final as at December 31, 2020. Details of the acquisition are as follows: Fair value AUD Machinery, plant and equipment 5,084,946 Other assets 1,673 Other payables (1,271,713) Net assets acquired 3,814,906 Goodwill arising form the acquisition has been recognized as follow: Consideration 1,945,770 Non-controlling interest 1,869,304 Fair value of net asset acquired (3,814,906) Written off to other operating expenses (168) - |
NOTE 28. ISSUED CAPITAL
NOTE 28. ISSUED CAPITAL | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 28. ISSUED CAPITAL | NOTE 28. ISSUED CAPITAL (a) Share Capital December 31, 2020 December 31, 2019 December 31, 2018 Number of shares A$ Number of shares A$ Number of shares A$ Ordinary Shares fully paid 6,513,671 32,089,997 3,377,386 18,902,029 3,377,386 18,902,029 (b) Movements in ordinary share capital Number of Shares A$ January 1, 2018 2,643,611 10,410,279 Issue of shares during the year 2018 25,275 491,750 Issue of shares for conversion of debt 708,500 8,000,000 December 31, 2018 3,377,386 18,902,029 Issue of shares during the year 2019 - - December 31, 2019 3,377,386 18,902,029 Issuance of shares for cash 1,643,406 7,121,283 Issue of shares for conversion of debt 988,408 4,122,562 Issuance of shares for services 4,471 23,249 Issuance of shares for acquisition of shares in subsidiary companies 500,000 2,060,000 Legal expenses in respect of issuance of shares - (139,126) December 31, 2020 6,513,671 32,089,997 There is only one class of share on issue being ordinary fully paid shares. Holders of ordinary shares are treated equally in all respects regarding voting rights and with respect to the participation in dividends and in the distribution of surplus assets upon a winding up. The fully paid ordinary shares have no par value. During the year 2018, the details of shares movements are as below:- On July 17, 2018, the Company issued 25,275 ordinary shares at a share price of US$14.45 per share for a total subscription amount of US$365,224 (or about A$491,750). These 25,275 ordinary shares were issued for consultancy services payment. On December 12, 2018, the shareholders of the Company approved the conversion of A$8,000,000 of debt owed to Marvel Finance Limited, the then ultimate holding company by the issuance of 708,500 shares in the Company. During the year 2020, the details of shares movements are as below:- Issuance of shares for cash On February 24, 2020, the Company issued 158,730 shares at a share price of US$6.30 per share for a total subscription amount of US$1,000,000 (or about A$1,514,284). The proceeds from this sale of shares were used for repaying debts and working capital in the Company. On May 12, 2020, the Company issued 126,984 shares as a result of the exercise of the warrants referred to (d) below. On September 15, 2020, the Company issued 450,000 shares at a share price of US$3.00 per share for a total subscription amount of US$1,350,000 (or about A$1,845,000). The proceeds from this sale of shares were used for the Company's operations and working capital. On December 2, 2020, the Company issued 600,000 shares at a share price of US$3.00 per share for a total subscription amount of US$1,800,000 (or about A$2,442,000). The proceeds from this sale of shares are intended to be used for working capital purposes and development of existing and new business. On December 21, 2020, the Company issued 307,692 shares at a share price of US$3.25 per share for a total subscription amount of US$1,000,000 (or about A$1.319,999). The proceeds from this sale of shares were intended to be used for the new product design for the filter business. Issuance of shares on conversion of debt On July 25, 2020, the Company issued 700,000 shares at a share price of US$3.00 per share for payment of debt totaling HK$16,380,000 (equivalent to about US$2,100,000 or about A$2,940,000). On October 6, 2020, the Company issued 241,667 shares at a share price of US$3.90 per share for payment of debt totaling HK$5,655,000 (equivalent to about A$1,007,751). On October 6, 2020, the Company issued 46,741 shares for US$125,852 (equivalent to about A$174,811) in interest payment on the Convertible Notes. Issuance of shares for services On September 15, 2020, the Company issued 4,471 shares at a share price of US$3.81 per share for a total payment of US$17,035 (equivalent to about A$23,249) for technical support services. Issuance of shares for acquisition of subsidiary company On September 17, 2020, the Company issued a total of 500,000 shares at a price of US$3.00 per share for a total payment of US$1,500,000 (equivalent to about A$2,060,000) for the acquisition of 51% equity interest in Sunup Holdings Limited. (b) Movements in ordinary share capital (Continued) Subsequent to the year end to the date of this report, the details of shares movement are as below:- As announced in the Form 6K on February 1, 2021, on January 28, 2021, the Company entered into a into a conditional sale and purchase agreement ("Koala Agreement") to acquire 70% equity interests in Shenzhen Koala Wisdom Fire Engineering Co., Ltd. ("Shenzhen Koala"). Pursuant to the agreement, the vendors will sign up contracts for deployment of IoT Detection System of not less than RMB200,000 within 60 days from the date of the Agreement. IMTE shall purchase 70% equity interests in Shenzhen Koala for US$40,000 ("Initial Consideration") by the issuance of a total of 10,000 shares in the Company. The Company shall also pay a deferred consideration of the profits less the Initial Consideration. The deferred consideration shall be paid by the issuance of shares in the Company (to a maximum number of shares not equal or exceeding 20% of the then issued shares of the Company) at a price equal to 85% of the prior 15 days volume weighted average price (VWAP) of the Company's share price immediately prior to the date of the parties agreeing to the Profits and such date shall not be later than March 31, 2022. Profits is defined as the profits before taxation of Shenzhen Koala for the period from the Completion Date to December 31, 2021 and excluding any relevant gross profits from uncollected sales receipts. On February 2, 2021, the Company issued 17,744 ordinary shares at a share price of US$3.6125 per share for a total amount of US$64,100 (or about A$84,000) for performance remuneration. On February 5, 2021, the Company issued 2,768 ordinary shares at a share price of US$3.6125 per share for a total amount of US$10,000 (or about A$13,000) for provision of accounting and administrative services. As announced in the Form 6K on February 22, 2021, the Company entered into a Securities Purchase Agreement for the sale of 625,000 shares of the Company to an investor at a price of US$4.00 per share for US$2,500,000 (approximately A$3,162,500). The Company intends to use the net cash proceeds for working capital purposes and development of existing and new businesses. As announced in the Form 6K on March 8, 2021, on March 4, 2021, the Company entered into subscription agreements in a private placement with twelve investors outside the United States to subscribe a total of 573,350 shares in the Company at a price of US$4.00 per share for total proceeds of US$2,293,400 (approximately A$2,942,900). The use of the proceeds is to build out manufacturing infrastructure and working capital. As announced in the Form 6K on March 23, 2021, the Company entered into a Securities Purchase Agreement for the sale of 708,000 ordinary shares of, no par value, of the Company ("Ordinary Shares") to an accredited investor ("Investor") at a price of US$6.50 per share (the "Cash Offering"). The Cash Offering is for US$4,602,000 (approximately A$6,046,000) and will generate net cash proceeds of approximately US$4,577,000 (approximately A$6,013,000) after deducting estimated expenses in connection with the offering. The Company intends to use the net cash proceeds for developing its current businesses, corporate expenditures and general corporate purposes. (c) Convertible Notes During the year 2020, the details of convertible notes movements are as below:- On January 20, 2020, the Company entered into a convertible note purchase agreement with CIMB Limited, an independent third party. Pursuant to this agreement the holder of the note can convert this note for 2 years from the date of issuance to maturity on January 20, 2022 at a price of US$5.00 per shares, subject to adjustment, over the term of the note. The Company, at its sole option, may pay interests in ordinary shares based on 75% of the average of the closing price of its ordinary shares for the five trading days prior to each end-of-quarter interest due date. During the year, the Company paid a total of US$125,852 (or equivalent to about A$174,811) in interest by issuance of 46,741 shares in the Company. On August 11, 2020, the Company entered into a convertible note purchase agreement with Nextglass Technologies Inc. Pursuant to this agreement the holder of the note can convert this note for 2 years from the date of issuance to maturity on December 2022 at a price of US$3.0 per shares, subject to adjustment, over the term of the note. This note carries no interest. (d) Warrants On February 20, 2020, the Company entered into a Securities Purchase Agreement for the sale of 158,730 ordinary shares of the Company and warrants ("Warrants") to purchase up to 126,984 ordinary shares. The Warrants were exercisable for the period of 12 months from the date of issuance, at an exercise price of US$10.50 per share. If the volume weighted average price ("VWAP") of the Company's ordinary shares on the trading day immediately prior to the exercise date is less than US$10.50, then the Warrants may be exercised at such time by means of a cashless exercise where each Warrant exercised would receive one share without any cash payment to the Company. On May 12, 2020, all the Warrants were exercised by means of a cashless exercise. (e) Options The Company has no share options outstanding at the date of our Annual Report. In August 2020, an Employee Share Option Plan ("ESOP") was approved and established by the board. The ESOP is available to employee, consultants and eligible persons (as the case may be) of the Company as the board may in its discretion determine. The total number of the shares which may be offered by the Company under the ESOP shall not at any time exceed 5% of the Company's total issued shares when aggregated with the number of shares issued or that may be issued as a result of offers made at any time during the previous 3-year period. The shares are to be issued at a price determined by the board. The options are to be issued for no consideration. The exercise price, duration and other relevant terms of an option is to be determined by the board at its sole discretion. In September 2020, the Company approved a plan that is pending shareholder approval to grant options to subscribe up to 261,000 ordinary shares for employees, directors and consultants under the ESOP. The ESOP will be a two-year plan with a vesting schedule that 50% of the shares vest six months after the vesting commencement date and the balance of the shares vest on the first anniversary of the vesting commencement date. The exercise prices will range from US$3.50 to US$3.70 per share. Each option when exercised will entitle the option holder to one ordinary share in the Company. Options will be able to be exercisable on or before an expiry date, will not carry any voting or dividend rights and will not be transferable except on death of the option holder. |
NOTE 29. RESERVES
NOTE 29. RESERVES | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
Note 29. RESERVES | Note 29. RESERVES (a) The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations to Australian dollars. (b) In 2020, the other reserve represented the following: (i) On May 25, 2020, the movement in other reserves represents the release of the reserve to accumulated losses as a result of the disposal of the subsidiaries Marvel Digital Limited ("MDL") (Note 27). (ii) On September 17, 2020, the Company issued a total of 500,000 shares at a price of US$3.00 per share for a total payment of US$1,500,000 (equivalent to about A$2,060,000) for the acquisition of 51% equity interest in Sunup Holdings Limited, of which included the valuation of filter equipment for a total of A$2,011,000 attributable to the Company. In 2019, the other reserve represented the following: The movement in other reserves represents the release of the reserve to accumulated losses as a result of the redemption of the Convertible Bonds. |
NOTE 30. COMMITMENTS
NOTE 30. COMMITMENTS | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 30. COMMITMENTS | NOTE 30. COMMITMENTS (a) Non-cancellable operating leases The Group has entered into a one year commercial lease of total A$17,644 (2019:NIL) for rental accommodations. (b) License Agreement with Versitech Limited In September 2015, Versitech Limited ("Versitech") and a former subsidiary Marvel Digital Limited ("MDL") entered into a License Agreement in respect to the sharing of income arising from the intellectual property rights in the video encoding and transmission worldwide. The agreement provided MDL and its affiliates for the term an exclusive and royalty-bearing license under the patent rights owned by Versitech to develop, make, have made, use, sell, offer to sell, lease, import, export or otherwise dispose of licensed product in 3D video encoding and transmission worldwide and with the right to grant sublicense pursuant to the terms of the agreement. MDL shall pay an upfront payment in the amount of HK$100,000 and a running royalty of 3% of net sales ("3% Royalty") on licensed product and licensed process by MDL and its affiliates and sublicensee. Beginning in 2019, the royalty will be the greater of 3% Royalty and HK$200,000 each year. MDL shall also pay Versitech a total of 15% of all sublicense income received by MDL or any of its affiliates. In addition, there are milestone payments payable to Versitech Limited upon the event when cumulative gross revenue arising from the licensed products reaching certain levels with the maximum cumulative total milestone payments of HK$2,000,000. This project was originally derived from an earlier agreement entered into among the Government of the Hong Kong Special Administrative Region, MDL and the University of Hong Kong ("HKU") under the Innovation and Technology Fund University-Industry Collaboration Programme entitled "Content Generation and Processing Technologies for 3D/Multiview Images and Videos". Versitech is a wholly-owned subsidiary and the technology transfer arm of HKU. During the year 2020, there were royalty fee of HK$200,000 paid to Veritech (2019:Nil). There were no sublicense fee paid in both years. (c) Capital commitments As of December 31, 2020, the Group had internal capital commitments for the investments in two P.R.C. subsidiaries of RMB14,620,859 (approximately A$2,901,071) (2019: A$1,755,456). (d) Share commitments On April 29, 2019, the Company and Teko International Limited ("Teko") entered into a distribution rights agreement for the territory of Hong Kong and Guangzhou Province, China ("Territories") for a proprietary conductive film and 3rd generation Polymer Dispersed Liquid Crystal ("PDLC") film. Pursuant to the Agreement, the Company shall pay 50,000 IMTE shares upon the commissioning of one (1) lamination line, (ii) for each of the next 3 years after the commissioning of the manufacturing line, IMTE shall pay Teko 50,000 IMTE shares should the annual revenue reach US$10 million or 100,000 IMTE shares should the revenue reach US$20 million, and (iii) 50,000 IMTE shares for each additional lamination line installed. In addition, for managing the operations, the Company will pay to Teko 25% of the net profits from the sale of the PDLC film products and the lamination operations. Mr. Con Unerkov and Mr. Cecil Ho, both the CEO and CFO, respectively of IMTE, are directors and shareholders of Teko. |
NOTE 31. FINANCIAL RISK MANAGEM
NOTE 31. FINANCIAL RISK MANAGEMENT | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 31. FINANCIAL RISK MANAGEMENT | NOTE 31. FINANCIAL RISK MANAGEMENT (a) Financial risk management objectives The Group is exposed to financial risk through the normal course of their business operations. The key risks impacting the Group's financial instruments are considered to be interest rate risk, foreign currency risk, liquidity risk, credit risk and capital risk. The Group's financial instruments exposed to these risks are cash and short term deposits, receivables, trade payables and borrowings. The Group's chief executive officer for operations is Dr. Chang Yuen CHAN, who monitors the Group's risks on an ongoing basis and report to the Board. (b) Interest rate risk management The Group is exposed to interest rate risk (primarily on its cash and bank balances, amount due to ultimate holding company, and borrowings), which is the risk that a financial instrument's value will fluctuate as a result of changes in the market interest rates on interest-bearing financial instruments. The Group has adopted a policy of ensuring it maintains adequate cash and cash equivalents balances available at call. These accounts currently earn low interests. The sensitivity analyses below have been determined based on the exposure to interest rates at the reporting date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period. A 50 basis point increase or decrease represents management's assessment of the possible change in interest rates. At reporting date, if interest rates had increased/decreased by 50 basis points from the weighted average effective rate for the year, with other variables constant, the profit for the year would have been A$9,130 lower (2019: A$17,889 lower) / A$9,130 higher (2019: A$17,889 higher). The following table summarizes interest rate risk for the Group, together with effective interest rates as at the reporting date. Weighted average effective interest rate Floating interest rate Non-interest bearing A$ Total A$ 2020 Financial Assets Cash and bank balances 0.39% 2,037,502 156,582 2,194,084 Trade and other receivables - 1,164,605 1,164,605 Other assets - 2,089,897 2,089,897 Total Financial Assets 2,037,502 3,411,084 5,448,586 Financial Liabilities Trade and other payables 8% 211,567 2,747,074 2,958,641 Trade deposits received - 630,523 630,523 Amounts due to related companies - 237,674 237,674 Amount due to ultimate holding company - 532,718 532,718 Convertible promissory notes 10% 2,196,049 - 2,196,049 Total Financial Liabilities 2,407,616 4,147,989 6,555,605 Weighted average effective interest rate Floating interest rate Non-interest bearing A$ Total A$ 2019 Financial Assets Cash and bank balances 0.47% 40,860 694,864 735,724 Trade and other receivables - 770,958 770,958 Other assets - 2,291,273 2,291,273 Total Financial Assets 40,860 3,757,096 3,848,419 Financial Liabilities Trade and other payables 8% 1,761,308 1,676,447 3,437,755 Trade deposits received - 900,740 900,740 Amounts due to related companies - 6,101,850 6,101,850 Amount due to ultimate holding company - 582,832 582,832 Bank overdraft 4.62% 902,482 - 902,482 Bank borrowings 4.62% 915,300 - 915,300 Lease liability 2.5% 39,492 1,129,115 1,168,607 Convertible bonds 34.67% 4,420,899 - 4,420,899 Provisions 64,135 64,135 Total Financial Liabilities 8,039,481 10,455,119 18,494,600 (c) Foreign currency risk The Group has net assets denominated in certain foreign currencies as at December 31, 2020. Foreign currency denominated financial assets and liabilities which expose the Group to currency risk are disclosed below. The amounts are those reported to key management translated into AUD at the following closing rates, HK$0.16732, US$1.29718 and RMB1.18582: Short term exposure Long term exposure HK$ US$ RMB HK$ US$ RMB December 31, 2020 Financial assets - Cash and bank balances 156,753 2,029,569 65 - - - - Trade and other receivables 864,845 298,071 - - - - - Other assets 774,532 1,315,236 129 - - - Financial liabilities - Trade and other liabilities (1,219,242) (1,905,180) - - - - - Amounts due to related companies (4,592) (233,082) - - - - - Amount due to ultimate holding company (532,718) - - - - - - Convertible promissory notes - - - (981,459) (1,214,590) - - Derivates on financial statements - - - (438,286) (1,040,254) - Total exposure 39,578 1,504,614 194 (1,419,745) (2,254,844) - Short term exposure Long term exposure HK$ US$ RMB HK$ US$ RMB December 31, 2019 Financial assets - Cash and bank balances 583,524 29,989 116,085 - - - - Trade and other receivables 197,906 - 570,662 - - - - Other assets 1,726,881 - 564,392 - - - Financial liabilities - Trade and other liabilities (2,992,663) (202,448) (455,854) - - - - Provisions (64,135) - - - - - - Amounts due to related companies (6,101,850) - - - - - - Amount due to ultimate holding company (582,832) - - - - - - Bank overdraft (902,482) - - - - - - Borrowings (915,300) - - - - - - Convertible bonds (4,420,899) - - - - - - Derivates on financial statements - - - - - - - Lease liabilities (666,867) - - (501,740) - - Total exposure (14,138,717) (172,459) 795,285 (501,740) - - The following table illustrates the sensitivity of profit / (loss) and equity in regard to the Group's financial assets and financial liabilities and the HK$/AUD exchange rate, US$/AUD exchange rate and RMB/AUD exchange rate and assure ‘all other things being equal'. It assumes a +/- 5% change of the AUD/HK$ exchange rate for the year ended at December 31, 2020 (2019: 5%). A +/- 5% change is considered for the AUD/US$ exchange rate (2019: 5%). A +/- 10% change is considered for the AUD/RMB exchange rate (2019: 10%). These percentages have been determined based on the average market volatility in exchange rates in the previous twelve (12) months. The sensitivity analysis is based on the Group's foreign currency financial instruments held at each reporting date and also takes into account forward exchange contracts that offset effects from changes in currency exchange rates. If the AUD had strengthened against the HK$ by 5% (2019: 5%), the US$ by 5% (2019: 5%) and the RMB by 10% (2019: 10%) respectively then this would have had the following impact: Profit / (Loss) for the year Equity HK$ US$ RMB Total HK$ US$ RMB Total December 31, 2020 69,008 37,512 (19) 106,501 69,008 37,512 (19) 106,501 December 31, 2019 643,219 8,623 (79,529) 572,313 643,219 8,623 (79,529) 572,313 If the AUD had weakened against the HK$ by 5% (2019: 5%), the US$ by 5% (2019: 5%) and the RMB by 10% (2019: 10%) respectively then this would have had the following impact: Profit / (Loss) for the year Equity HK$ US$ RMB Total HK$ US$ RMB Total December 31, 2020 (69,008) (37,512) 19 (106,501) (69,008) (37,512) 19 (106,512) December 31, 2019 (643,219) (8,623) 79,529 (572,313) (643,219) (8,623) 79,529 (572,313) Exposures to foreign exchange rates vary during the year depending on the volume of overseas transactions. Nonetheless, the analysis above is considered to be representative of the Group's exposure to currency risk. (d) Liquidity risk management Prudent liquidity risk management implies maintaining sufficient cash and term deposits, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The following tables detail the Group's remaining contractual maturity for its non-derivative financial liabilities based on the agreed repayment terms or the earliest date on which the Group can be required to pay. The table has been drawn up based on the undiscounted cash flows of financial liabilities and include both interest and principal cash flows. 2020 Total contractual 0 - 30 days Carrying undiscounted or on 31 - 90 91 -365 Over amount cash flow demand days Days 1 year A$ A$ A$ A$ A$ A$ Trade and other liabilities 2,958,911 2,958,911 2,958,911 - - - Trade deposits received 630,523 630,523 630,523 - - - Amounts due to related companies 237,674 237,674 - - - 237,674 Amount due to ultimate holding company 532,718 532,718 532,718 - - - Convertible promissory notes 2,196,049 2,448,048 21,402 61,447 169,150 2,196,049 6,555,875 6,807,874 4,143,554 61,447 169,150 2,433,723 2019 Total contractual 0 - 30 days Carrying undiscounted or on 31 - 90 91 -365 Over amount cash flow demand days Days 1 year A$ A$ A$ A$ A$ A$ Trade and other liabilities 3,437,755 3,437,755 3,437,755 - - - Trade deposit received 900,740 900,740 900,740 - - - Provision for employee benefits 64,135 64,135 64,135 - - - Amounts due to related companies 6,101,850 6,101,850 - - - 6,101,850 Amount due to ultimate holding company 582,832 582,832 582,832 - - - Bank overdraft 902,482 902,482 902,482 - - - Bank borrowings 915,300 929,625 - - 929,625 - Lease liability 1,168,606 1,399,149 1,501 3,004 99,339 1,295,305 Convertible bonds 4,420,899 4,420,899 4,420,899 - - - 18,494,599 18,739,467 10,310,344 3,004 1,028,964 7,397,155 (e) Credit risk Credit risk refers to the risk that a counter-party will default on its contractual obligations resulting in a financial loss to the Group. The Group's potential concentration of credit risk consists mainly of cash deposits with banks and trade receivables with its customers. The Group's short term cash surpluses are placed with banks that have investment grade ratings. The Group considers the credit standing of counterparties and customers when making deposits and sales, respectively, to manage the credit risk. The Group does not have any material credit risk exposure to any single debtor or group of debtors under financial instruments entered into by the Group. Considering the nature of the business at current, the Group believes that the credit risk is not material to the Group's operations. The maximum exposure to credit risk, excluding the value of any collateral or other security, at the end of the reporting period, to financial assets, is represented by the carrying amount of cash and bank balances, trade and other receivables, net of any provisions for doubtful debts, as disclosed in the consolidated statement of financial positions and notes to the consolidated financial statements. (f) Fair value of financial instruments The following liability is recognized and measured at fair value on a recurring basis: - Derivative financial instruments Fair value hierarchy All assets and liabilities for which fair value is measured or disclosed are categorized according to the fair value hierarchy as follows: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs). Recognized fair value measurements The following table sets out the Group's assets and liabilities that are measured at fair value in the consolidated financial statements. Level 2 A$ Derivative financial instruments December 31, 2020 1,478,540 December 31, 2019 - The Group does not have any assets and liabilities that qualify for the level 1 category. There were no transfers between level 1, 2 and 3 during the year. An instrument is included in level 2 if the financial instrument is not traded in an active market and if the fair value is determined by using valuation techniques based on the maximum use of observable market data for all significant inputs. For the derivatives, the Group uses the estimated fair value of financial instruments determined by using available market information and appropriate valuation methods, including relevant credit risks. The estimated fair value approximates to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Specific valuation techniques used to value financial instruments include: • quoted market prices or dealer quotes for similar instruments; and • binomial options pricing models. The reconciliation of the opening and closing fair value balance of level 2 financial instruments is provided below: Put Option A$ At January 1, 2020 - Issuance of derivatives at fair value 3,790,737 Gain included in profit or loss on change in fair value (2,312,197) Foreign currency translation - At December 31, 2020 1,478,540 Disclosed fair values The Group also has assets and liabilities which are not measured at fair values, but for which fair values are disclosed in the notes to the consolidated financial statements. Due to their short term nature, the carrying amounts of trade receivables (refer to Note 12) and payables (refer to Note 17) are assumed to approximate their fair values because the impact of discounting is not significant. (g) Capital management risk The Group's objective when managing capital are to safeguard the Group's ability to continue as a going concern and to maintain a strong capital base sufficient to maintain future development of its business. In order to maintain or adjust the capital structure, the Group may return capital to shareholders, issue new shares or sell assets to reduce debts. The Group's focus has been to raise sufficient funds through equity to fund its business activities. There were no changes to the Group's approach to capital management during the year. Risk management policies and procedures are established with regular monitoring and reporting. Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements. The capital structure of the Group consists of equity attributable to equity holders of the parent, comprising issued capital, reserves and accumulated loss or retained earnings as disclosed in Notes 28 and 29 respectively. |
NOTE 32. RELATED PARTIES
NOTE 32. RELATED PARTIES | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 32. RELATED PARTIES | NOTE 32. RELATED PARTIES (a) Parent and ultimate controlling party On December 12, 2018, the shareholders of the Company approved the settlement of A$8,000,000 debt owed to Marvel Finance Limited ("MFL") by the issuance of 708,500 shares in the Company. As at December 31, 2018 2019 and 2020, MFL owned 2,201,412 shares, representing approximately 65.18%, 65.18% and 33.80%, respectively in the Company. MFL was the ultimate controlling party of the Group as at December 31, 2018 and 2019. However as at December 31, 2020 and the date of this report, MFL's shareholding in the Company decreased to 33.80% and 26.08% respectively and it is therefore not considered the ultimate controlling party of the Group. (b) Transactions with directors During the years ended December 31, 2020, 2019 and 2018, the remuneration of directors of the Company is as follows: Company December 31, A$ December 31, A$ December 31, A$ Short term benefits (1) 780,832 715,301 67,371 Post-employment benefits - - - Total 780,832 715,301 67,371 (1) (c) Other related party transactions During the years ended December 31, 2020, 2019 and 2018, the Group has the following material transactions with its related parties: Consolidated December 31, A$ December 31, A$ December 31, A$ Revenue received from related parties (1) 8,490 - 41,291 General consultancy and management fee paid to a related party (1) 282,971 571,519 595,645 Purchase of products from related parties (1) 29,794 22,588 - Interest charged by the ultimate holding company (1) - - 396,868 Interest income earned from the former ultimate holding company (1) - 115,678 - Purchase of plant and equipment from related parties (1) - - 512,561 Company Secretarial, taxation service and interim CFO fee paid to a related company (2) - 40,000 117,663 Company Secretarial, taxation service and CFO fee paid to a related company (3) 607,659 523,196 - Purchase of products from a related party (4) 274,417 501,062 - Sales to a related party (5) 315,034 (1) (2) (3) (4) (5) During the year, there were no interest income charged to MFL by the Group. For the year ended December 31, 2019, the Group charged MFL interest income for a total of A$115,678 charged in relation to 2 loans: (i) a loan of A$1,043,442 (HKD5,700,000) to Cystar International Limited (formerly known as Visumotion International Limited). This loan bears interest at 5% per annum, unsecured and payable on September 30, 2019. For the year ended December 31, 2019 the Company accrued interest income of A$76,533. This loan was repaid on September 30, 2019; and (ii) in 2018, a former Group company GOXD Technology Limited entered into a loan agreement to lend A$1,085,820 (HK$6,000,000) to Marvel Finance Limited, a company owned by the then controlling shareholder of the Company. The loan bears interest at 10% per annum, unsecured and payable on 30 September 2019. The Company accrued interest income of A$39,145 during the year ended December 31, 2019. This loan was repaid in September 30, 2019. During the year 2020, the Company used a 3,000 sq. feet administrative and accounting office in Hong Kong which was the Group was charged US$60,000 for the second half of the year (2019: Nil). This office belongs to the family of Dr. Herbert Ying Chiu Lee. There is no written lease agreement, but a general understanding that there will be a 3 months notice period to vacate this office. The Company moved to another office in January 2021. (d) Amounts due from / to related companies Other than the related party balances disclosed in Note 19 and 20, the other related party balances as of December 31, 2020 and 2019 are disclosed: (i) included in trade and other receivables in Note 12, there were amounts of A$14,245 (2019: A$15,585) in respect to trade and non-trade in nature respectively and were due from certain related companies in which our former director, Dr. Herbert Ying Chiu LEE has control. The amounts due from the related companies are unsecured, non-interest bearing and repayable on demand; (ii) included in other assets in Note 13, there was amount of A$603,600 (2019: A$650,183) in respect to trade in nature and was deposits paid to a related company in which our director, Mr. Michael Wuhua ZHANG has control. (iii) included in trade and other liabilities in Note 17, there was amount of A$5,329 (2019: A$91,463) in respect to trade in nature and was due to a related company in which our former director, Dr. Herbert Ying Chiu LEE has control. The amount due to the related company is unsecured, non-interest bearing and repayable on demand; and |
NOTE 33. CASH FLOW INFORMATION
NOTE 33. CASH FLOW INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 33. CASH FLOW INFORMATION | NOTE 33. CASH FLOW INFORMATION (a) Reconciliation of liabilities arising from financing activities Amounts due to related companies Other liabilities Bank borrowings, net Amount due to holding company Convertible promissory notes Convertible bonds by a subsidiary Lease liabilities Derivative embedded in convertible bonds issued Issue of shares Total A$ A$ A$ A$ A$ A$ A$ A$ A$ A$ Beginning balance as at 1 January 2020 6,101,850 1,761,309 915,300 582,832 - 4,420,899 1,168,607 - - 14,950,797 Cash flows from financing activities 840,509 211,567 - - 4,913,100 (4,668,195) (320,851) - 13,187,968 14,164,098 Non-cash movement: Settled by issuing convertible promissory note - (1,761,309) - - - - - - - (1,761,309) Fair value change - - - - - - - (2,312,197) - (2,312,197) Put option liabilities in convertible bonds issued (3,790,737) 3,790,737 - Interest - - - - 1,508,421 - - - - 1,508,421 Disposal of plant and equipment (6,689,290) - (966,747) - - - (925,042) - - (8,581,079) Foreign exchange movement (15,395) - 51,447 (50,114) (434,735) 247,296 77,286 - - (124,215) Ending balance as at 31 December 2020 237,674 211,567 - 532,718 2,196,049 - - 1,478,540 13,187,968 17,844,516 Amounts due to related companies Other liabilities Bank borrowings, net Amount due to holding company Obligation under finance lease Convertible bonds by a subsidiary Lease liabilities Derivative embedded in convertible bonds issued Total A$ A$ A$ A$ A$ A$ A$ A$ A$ Beginning balance as at 1 January 2019 2,130,368 - 814,365 172,773 - 3,280,744 1,163,778 126,095 7,688,123 Cash flows from financing activities 3,954,640 2,610,091 90,049 501,343 - - (573,010) - 6,583,113 Non-cash movement: Unpaid interest - - - - - 1,107,310 109,027 - 1,216,337 Interest - - - (96,965) - - 648 - (96,317) Inception of lease - - - - - - 458,990 458,990 Fair value change - - - - - - - (127,551) (127,551) Disposal of plant and equipment - (848,782) - - - - - (848,782) Foreign exchange movement 16,842 - 10,886 5,681 - 32,845 9,174 1,456 76,884 Ending balance as at 31 December 2019 6,101,850 1,761,309 915,300 582,832 - 4,420,899 1,168,607 - 14,950,797 Amounts due to related companies Bank borrowings, net Amount due to holding company Lease liabilities Convertible bonds by a subsidiary Derivative embedded in the convertible bonds issued Issue of shares of subsidiaries Total A$ A$ A$ A$ A$ A$ A$ A$ Beginning balance as at 1 January 2018 33,353 819,450 15,268,241 67,472 - - - 16,188,516 Cash flows from financing activities 1,806,044 (95,570) (4,782,610) (10,180) 3,769,470 - 7,951,428 8,638,582 Non-cash movement: Issue share for debt - - (8,000,000) - - - - (8,000,000) Debt assignment - - (3,562,962) - - - - (3,562,962) Other reserves - - - - (535,948) - (3,915,161) (4,451,109) Non-controlling interest - - - - - - (4,036,267) (4,036,267) Unpaid interest - - - - 536,216 - - 536,216 Put option liabilities in convertible bonds issued - - - - (772,112) 772,112 - - Fair value change - - - - - (709,543) - (709,543) Other changes 175,975 - - - - - 175,975 Foreign exchange movement 114,996 90,485 1,250,104 - 283,118 63,526 - 1,802,229 Ending balance as at 31 December 2018 2,130,368 814,365 172,773 57,292 3,280,744 126,095 - 6,581,637 (b) Net cash inflows / (outflows) from changes in working capital Consolidated December 31, A$ December 31, A$ December 31, A$ Cash flows from changes in working capital (Increase) / Decrease in assets: Trade and other receivables (1,016,464) (137,579) (1,526,651) Inventories 142,608 405,891 (151,883) Other assets (1,659,728) (361,676) (400,034) Increase / (Decrease) in liabilities: - Trade and other liabilities 347,308 1,876,414 488,490 Provisions - - 29 Obligations under finance lease - - (6,115) Net cash (outflows)/ inflows from changes in working capital (2,186,276) 1,783,050 (1,596,164) |
NOTE 34. KEY MANAGEMENT PERSONN
NOTE 34. KEY MANAGEMENT PERSONNEL DISCLOSURES | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 34. KEY MANAGEMENT PERSONNEL DISCLOSURES | NOTE 34. KEY MANAGEMENT PERSONNEL DISCLOSURES (UNAUDITED) (a) Remuneration The total remuneration paid or payable to the directors and senior management of the Group during the year are as follows: Consolidated December 31, A$ December 31, A$ December 31, A$ Short-term employee benefits 1,586,604 1,645,794 673,284 Post-employment benefits 5,124 7,703 10,794 Total 1,591,728 1,653,497 684,078 During the year 2020, included in short term benefits for directors and officers included payments of A$1,329,814 (US$920,004) to a service company owned by the CFO for the provision of Chief Executive Officer and Chief Financial Officer services during the period. In addition, the Company paid A$40,000 to BDO Administration (SA) Pty Ltd where Company's former interim CFO and Company Secretary is a director. (b) Loans to Key Management Personnel and their related parties Save as disclosed in Note 32(d), there were no other loans outstanding at the reporting date to Key Management Personnel and their related parties. Other transactions with Key Management Personnel Several key management persons, or their related parties, held positions in other entities that resulted in them having control or significant influences over the financials or operating policies of these entities. Transactions between related parties are in normal commercial terms and conditions unless otherwise stated in Notes 12, 17, 20 and 32. (c) Share Options – number of share options held by management There were no share options held outstanding held by the management. |
NOTE 35. PARENT ENTITY INFORMAT
NOTE 35. PARENT ENTITY INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 35. PARENT ENTITY INFORMATION | NOTE 35. PARENT ENTITY INFORMATION (UNAUDITED) Set out below is the supplementary information about the parent entity. Statement of Comprehensive Income Company December 31, 2020 A$ December 31, 2019 A$ December 31, 2018 A$ Loss after income tax 2,097,600 1,635,241 3,926,487 Other comprehensive income - - - Total comprehensive loss 2,097,600 1,635,241 3,926,487 Statement of Financial Position Company December 31, 2020 December 31, 2019 A$ A$ Total non-current assets 2,382 3 Total current assets 28,456,242 12,521,701 Total assets 28,458,624 12,521,704 Total current liabilities 5,931,676 1,085,124 Total liabilities 5,931,676 1,085,124 Total assets less liabilities 22,526,948 11,436,580 Equity Issued capital 32,089,997 18,902,029 Accumulated losses (9,563,049) (7,465,449) Total equity 22,526,948 11,436,580 Guarantees entered into by the parent entity in relation to the debts of its subsidiary Other than as disclosed in this Annual Report, the parent entity had not guarantee debts of its subsidiary companies. Contingent liabilities Other than as disclosed in this Annual Report, the parent entity had no contingent liabilities as at December 31, 2020 and December 31, 2019. Capital commitments – plant and equipment The parent entity has no capital commitments for plant and equipment as at December 31, 2020 and December 31, 2019. Significant accounting policies The accounting policies of the parent entity are consistent with those of the Group, as disclosed in Note 3, except for: - Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity, - Dividends received from subsidiaries are recognized as other income by the parent entity and its receipt may be an indicator of impairment. |
NOTE 36. PRIOR YEAR RECLASSIFIC
NOTE 36. PRIOR YEAR RECLASSIFICATIONS | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 36. PRIOR YEAR RECLASSIFICATIONS | NOTE 36. PRIOR YEAR RECLASSIFICATIONS |
NOTE 37. EVENTS OCCURRING AFTER
NOTE 37. EVENTS OCCURRING AFTER THE REPORTING DATE | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 37. EVENTS OCCURRING AFTER THE REPORTING DATE | NOTE 37. EVENTS OCCURRING AFTER THE REPORTING DATE Save as disclosed below, there is no other matter or circumstance arisen since December 31, 2020, which has significantly affected, or may significantly affect the operations of the Group, the result of those operations, or the state of affairs of the Group in subsequent financial years. (i) On January 15, 2021, the Company entered into two convertible debt agreements with a director and an officer of the Company to issue up to 401,939 shares in the Company at a price of US$3.61 for a total debt of US$1,451,000 (approximately A$1,878,800) subject to shareholders approval. (ii) As announced in the Form 6K on February 1, 2021, on January 28, 2021, the Company entered into a into a conditional sale and purchase agreement ("Koala Agreement") to acquire 70% equity interests in Shenzhen Koala Wisdom Fire Engineering Co., Ltd. ("Shenzhen Koala"). Pursuant to the agreement, the vendors will sign up contracts for deployment of IoT Detection System of not less than RMB200,000 within 60 days from the date of the Agreement. IMTE shall purchase 70% equity interests in Shenzhen Koala for US$40,000 ("Initial Consideration") by the issuance of a total of 10,000 shares in the Company. The Company shall also pay a deferred consideration of the profits less the Initial Consideration. The deferred consideration shall be paid by the issuance of shares in the Company (to a maximum number of shares not equal or exceeding 20% of the then issued shares of the Company) at a price equal to 85% of the prior 15 days volume weighted average price (VWAP) of the Company's share price immediately prior to the date of the parties agreeing to the Profits and such date shall not be later than March 31, 2022. Profits is defined as the profits before taxation of Shenzhen Koala for the period from the Completion Date to December 31, 2021 and excluding any relevant gross profits from uncollected sales receipts. (iii) As announced in the Form 6K on February 10, 2021, on February 5, 2021, the Company's wholly owned subsidiary company CIMC Marketing Pty Ltd. ("CIMC") into an Underwriting Agreement ("Agreement") with Xped Limited ("Xped"), a company listed on the Australian Securities Exchange. Pursuant to the Agreement, CIMC will underwrite for 500 million shares for any shortfall of acceptance from other shareholders ("Shortfall Shares") in Xped's rights issue announced on January 25, 2021 at the subscription price of A$0.001 per share. The total commitment by CIMC is A$500,000 or equivalent to approximately US$381,000. CIMC shall receive A$25,000 (approximately A$19,050) as an underwriter fee. As announced in the Form 6K on March 1, 2021, the Company took up the shortfall of acceptance of 500 million shares at a price of A$0.001 per share, representing approximately 15% of the total outstanding shares in Xped. (iv) As announced in the Form 6K on February 22, 2021, the Company entered into a Securities Purchase Agreement for the sale of 625,000 shares of the Company to an investor at a price of US$4.00 per share for US$2,500,000 (approximately A$3,162,500) The Company intends to use the net cash proceeds for working capital purposes and development of existing and new businesses. (v) As announced in the Form 6K on March 8, 2021, on March 4, 2021, the Company entered into subscription agreements in a private placement with twelve investors outside the United States to subscribe a total of 573,350 shares in the Company at a price of US$4.00 per share for total proceeds of US$2,293,400 (approximately A$2,942,900). The use of the proceeds is to build out of manufacturing infrastructure and working capital. (vi) As announced in the Form 6K on March 23, 2021, the Company entered into a Securities Purchase Agreement for the sale of 708,000 ordinary shares of, no par value, of the Company ("Ordinary Shares") to an accredited investor ("Investor") at a price of US$6.50 per share (the "Cash Offering"). The Cash Offering is for US$4,602,000 and will generate net cash proceeds of approximately US$4,577,000 after deducting estimated expenses in connection with the offering. The Company intends to use the net cash proceeds for developing its current businesses, corporate expenditures and general corporate purposes. |
NOTE 38. COMPANY DETAILS
NOTE 38. COMPANY DETAILS | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
NOTE 38. COMPANY DETAILS | NOTE 38. COMPANY DETAILS The registered office and principal place of business is: Level 7, 420 King William Street Adelaide SA 5000 |
NOTE 3. SIGNIFICANT ACCOUNTIN_2
NOTE 3. SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
(a) Basis of Preparation | (a) Basis of Preparation The consolidated financial statements have been prepared on the accrual basis and are based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied. |
(b) Principles of Consolidation | (b) Principles of Consolidation The consolidated financial statements comprise the financial statements of IMTE and its subsidiaries as at December 31, 2020 (the "Group"). Subsidiaries are consolidated from the date on which control is transferred to the Group and are deconsolidated from the date that control ceases. A list of the controlled entities as at December 31, 2020 is disclosed in Note 26 to the consolidated financial statements. Other than, Cystar International Limited (Formerly know as Visumotion International Limited), Colour Investment Limited and GOXD International Limited, all other controlled entities have a December, 31 statutory financial year end. All inter-company balances and transactions between entities within the Group, including any unrealized profits or losses, have been eliminated upon consolidation. Non-controlling interest in the results and equity of subsidiaries are shown separately in the consolidated statements of profit or loss and other comprehensive income or loss and consolidated statements of financial position of the Group. |
(c) Business Combinations | (c) Business Combinations The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The consideration transferred by the Company to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the Company, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred, except if related to the issue of debt or equity securities. The Company recognizes identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously recognized in the acquiree's financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values. Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of: (a) fair value of consideration transferred, (b) the recognized amount of any non-controlling interest in the acquiree, and (c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. Any contingent consideration to be transferred by the acquirer is recognized at acquisition-date fair value. Subsequent adjustments to consideration are recognized against goodwill only to the extent that they arise from new information obtained within the measurement period (a maximum of 12 months from the acquisition date) about the fair value at the acquisition date. All other subsequent adjustments to contingent consideration classified as an asset or a liability are recognized in the consolidated statement of profit or loss. |
(d) Current and deferred income tax | (d) Current and deferred income tax Income tax for the year comprises current tax and movements in deferred tax assets and liabilities. Current tax and movements in deferred tax assets and liabilities are recognised in profit or loss except to the extent that they relate to items recognised in other comprehensive income / loss or directly in equity, in which case the relevant amounts of tax are recognised in other comprehensive income or directly in equity, respectively. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the end of the reporting period, and any adjustment to tax payable in respect of previous years. Deferred tax assets and liabilities arise from deductible and taxable temporary differences respectively, being the differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. Deferred tax assets also arise from unused tax losses and unused tax credits. Apart from certain limited exceptions, all deferred tax liabilities, and all deferred tax assets to the extent that it is probable that future taxable profits will be available against which the asset can be utilised, are recognised. Future taxable profits that may support the recognition of deferred tax assets arising from deductible temporary differences include those that will arise from the reversal of existing taxable temporary differences, provided those differences relate to the same taxation authority and the same taxable entity, and are expected to reverse either in the same period as the expected reversal of the deductible temporary difference or in periods into which a tax loss arising from the deferred tax asset can be carried back or forward. The same criteria are adopted when determining whether existing taxable temporary differences support the recognition of deferred tax assets arising from unused tax losses and credits, that is, those differences are taken into account if they relate to the same taxation authority and the same taxable entity, and are expected to reverse in a period, or periods, in which the tax loss or credit can be utilised. The limited exceptions to recognition of deferred tax assets and liabilities are those temporary differences arising from goodwill not deductible for tax purposes, the initial recognition of assets or liabilities that affect neither accounting nor taxable profit (provided they are not part of a business combination), and temporary differences relating to investments in subsidiaries to the extent that, in the case of taxable differences, the Group controls the timing of the reversal and it is probable that the differences will not reverse in the foreseeable future, or in the case of deductible differences, unless it is probable that they will reverse in the future. The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and is reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the related tax benefit to be utilised. Any such reduction is reversed to the extent that it becomes probable that sufficient taxable profits will be available. Current tax balances and deferred tax balances, and movements therein, are presented separately from each other and are not offset. Current tax assets are offset against current tax liabilities, and deferred tax assets against deferred tax liabilities, if the Company or the Group has the legally enforceable right to set off current tax assets against current tax liabilities and the following additional conditions are met: (i) in the case of current tax assets and liabilities, the Group intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously; or (ii) in the case of deferred tax assets and liabilities, if they relate to income taxes levied by the same taxation authority on either: - the same taxable entity; or - different taxable entities, which, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered, intend to realize the current tax assets and settle the current tax liabilities on a net basis or realized and settle simultaneously. |
(e) Intangible Assets | (e) Intangible Assets (i) Acquired both separately and from a business combination Purchased intangible assets are initially measured at cost. The cost of an intangible asset acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are measured at cost less any accumulated amortization and any accumulated impairment losses. Intangible assets with finite lives are amortized over the useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at each financial year end. (ii) Autostereoscopic 3D display technologies and knowhow The autostereoscopic 3D display technologies and knowhow acquired in the business combination is measured at fair value as at the date of acquisition. These costs are amortized over the estimated useful life of 8 years and are tested for impairment where an indicator of impairment exists. The useful lives are also examined on an annual basis and adjustments, where applicable, are made on a prospective basis. Please refer to Note 15 for impairment review of these autostereoscopic 3D display technologies and knowhow. (iii) Research and development costs Development projects in the consolidated statements of financial position represent the development costs directly attributable to and incurred for internal technology projects of the Group. An intangible asset arising from development expenditure on an internal technology project is recognised and included in development projects only when the Group can demonstrate the technical feasibility of completing the intangible asset or technology so that it will be available for application in existing or new products or for sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the development, the ability to measure reliably the expenditure attributable to the intangible asset during its development and the ability to use the tangible asset generated. For labour costs, all research and development member salaries that are directly attributable to the technology project are capitalised. Administrative staff and costs are recognised in the profit or loss instead of capitalising this portion of costs. Following the initial recognition of the development expenditure, the cost model is applied requiring the asset to be carried at cost less any accumulated impairment losses. The amortisation rate of these intangible assets was determined on the basis of the estimated useful life from the time that the relevant asset is taken into use. (iv) Intellectual property Expenditure incurred on patents, trademarks or licenses are capitalized from the date of application. They have a definite useful life and are carried at cost less accumulated amortization. They are amortized using the straight line method over their estimated useful lives for a period of 8 to 15 years. (v) Computer software Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortized over their estimated useful lives ranging (2-5 years). Costs associated with maintaining computer software are recognized as an expense when incurred. |
(f) Inventories | (f) Inventories Finished goods are stated at the lower of cost and net realizable value on a "first in first out" basis. Cost comprises direct materials and delivery costs, import duties and other taxes. Costs of purchased inventories are determined after deducting rebates and discounts received or receivable. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale. |
(g) Leases | (g) Leases The Group has applied IFRS 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under IAS 17 and IFRIC 4. The details of accounting policies under IAS 17 and IFRIC 4 are disclosed separately. The policy applicable from 1 January 2019 At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease in IFRS 16. This policy is applied to contracts entered into, on or after 1 January 2019. As a lessee At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative and - - The Group recognises a right - - - - The right - - - - - - - - - The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased. Lease payments included in the measurement of the lease liability comprise the following: - fixed payments, including in - - variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date; - amounts expected to be payable under a residual value guarantee; and - the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early. The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group's estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in - When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right - - - - The Group presents right - - ‘ Short-term leases and leases of low-value assets The Group has elected not to recognise right - - - - Policy applicable before 1 January 2019 For contracts entered into before 1 January 2019, the Group determined whether the arrangement was or contained a lease based on the assessment of whether: fulfilment of the arrangement was dependent on the use of a specific asset or assets; and the arrangement had conveyed a right to use the asset. An arrangement conveyed the right to use the asset if one of the following was met: the purchaser had the ability or right to operate the asset while obtaining or controlling more than an insignificant amount of the output; the purchaser had the ability or right to control physical access to the asset while obtaining or controlling more than an insignificant amount of the output; or; amounts expected to be payable under a residual value guarantee; and facts and circumstances indicated that it was remote that other parties would take more than an insignificant amount of the output, and the price per unit was neither fixed per unit of output nor equal to the current market price per unit of output. As a lessee In the comparative period, where the Group acquires the use of assets under finance leases, the amounts representing the fair value of the leased asset, or, if lower, the present value of the minimum lease payments, of such assets are recognised as plant and equipment and the corresponding liabilities, net of finance charges, are recorded as obligations under finance leases. Depreciation is provided at rates which write off the cost or valuation of the assets over the term of the relevant lease or, where it is likely the Group will obtain ownership of the asset, the life of the asset, as set out in note 3(k). Impairment losses are accounted for in accordance with an accounting policy as set out in note 3(h). Finance charges implicit in the lease payments are charged to profit or loss over the period of the leases so as to produce an approximately constant periodic rate of charge on the remaining balance of the obligations for each accounting period. Contingent rentals are charged to profit or loss in the accounting period in which they are incurred. Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses on a straight line basis unless another method is more representative of the pattern to the users benefit. |
(h) Impairment of Assets | (h) Impairment of Assets Internal and external sources of information are reviewed at the end of each reporting period to identify indications that the following assets may be impaired or, except in the case of goodwill, an impairment loss previously recognised no longer exists or may have decreased: - property, plant and equipment (other than properties carried at revalued amounts); - intangible assets; and - goodwill. If any such indication exists, the asset's recoverable amount is estimated. In addition for goodwill, intangible assets that are not yet available for use and intangible assets that have indefinite useful lives, the recoverable amount is estimated annually whether or not there is any indication of impairment. (i) Calculation of recoverable amount The recoverable amount of an asset is the greater of its fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where an asset does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the smallest group of assets that generates cash inflows independently (i.e. a cash-generating unit). (ii) Recognition of impairment losses An impairment loss is recognized in profit or loss if the carrying amount of an asset, or the cash-generating unit to which it belongs, exceeds its recoverable amount. Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit (or group of units) and then, to reduce the carrying amount of the other assets in the unit (or group of units) on a pro rata basis, except that the carrying value of an asset will not be reduced below its individual fair value less costs of disposal (if measurable) or value in use (if determinable). (iii) Reversals of impairment losses In respect of assets other than goodwill, an impairment loss is reversed if there has been a favorable change in the estimates used to determine the recoverable amount. An impairment loss in respect of goodwill is not reversed. A reversal of an impairment loss is limited to the asset's carrying amount that would have been determined had no impairment loss been recognized in prior years. Reversals of impairment losses are credited to profit or loss in the year in which the reversals are recognized. |
(i) Investments and Other Financial Assets | (i) Investments and Other Financial Assets (i) Recognition Financial instruments are initially measured at costs on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below. (ii) Financial assets at fair value through profit and loss A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designed by management and within the requirements of IFRS 39: Recognition and Measurement of Financial Instruments. Derivatives are also categorized as held for trading unless they are designated as hedges. Realized and unrealized gains and losses arising from changes in the fair value of these assets are recognized in profit or loss in the period in which they arise. (iii) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determined payments that are not quoted in an active market and are stated at amortized costs using the effective interest rate methods. (iv) Financial liabilities Non-derivative financial liabilities are recognized at amortized costs, comprising original debt less principal payments and amortization. (v) Fair value Fair value is determined based on current bid prices for all quoted investments. (vi) Impairment At each reporting date, the Group assesses whether there is any objective evidence that a financial instrument has been impaired. Impairment losses are recognized in profit or loss. |
(j) Trade deposits | (j) Trade deposits Trade deposits are payments in advance to suppliers of equipment, products and services, which are initially recognized at fair value and thereafter stated at amortized cost using the effective interest method less impairment losses, except where the effect of discounting would be immaterial. |
(k) Plant and Equipment | (k) Plant and Equipment Items of plant and equipment are measured at cost less accumulated depreciation and impairment losses. The carrying amount of plant and equipment is reviewed annually by the directors to ensure it is not in excess of the recoverable amount from those assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset's employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. The depreciable amount of all fixed assets are depreciated over their estimated useful lives to the Group commencing from the time the assets is held ready for use. Depreciation is calculated on a straight-line basis to write the net cost of each item of plant and equipment over their expected useful lives. The depreciation rates used for each class of depreciable assets are generally as follows: Class of fixed assets Depreciation rate Leasehold Improvements lesser of 5 years or lease term Office Furniture and Equipment 5-12 years Machinery 5-12 years Gains and losses on disposal are determined by deducting the net book value of the assets from the proceeds of sale and are booked to the profit or loss in the year of disposal. |
(l) Foreign Currency Translation | (l) Foreign Currency Translation (i) Functional and presentation currency Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). The consolidated financial statements are presented in Australian Dollars ("A$"), which is the Group's presentation currency. (ii) Transactions and balances Foreign currency transactions during the year are translated at the foreign exchange rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the foreign exchange rates ruling at the end of the reporting period. Exchange gains and losses are recognized in profit or loss, except those arising from foreign currency borrowings used to hedge a net investment in a foreign operation which are recognized in other comprehensive income. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the foreign exchange rates ruling at the transaction dates. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated using the foreign exchange rates ruling at the dates the fair value was measured. (iii) Group companies The results of foreign operations are translated into Australian Dollars at the exchange rates approximating the foreign exchange rates ruling at the dates of the transactions. Statement of financial position items, are translated into Australian Dollars at the closing foreign exchange rates at the end of the reporting period. The resulting exchange differences are recognized in other comprehensive income and accumulated separately in equity in the exchange reserve. On disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation is reclassified from equity to profit or loss when the profit or loss on disposal is recognized. For years ended December 31, 2020 and 2019, the comprehensive income was A$883,878 and A$735,213 respectively which was mainly resulted from the translation of the foreign operations in Hong Kong (HK$), China (RMB) and United States (USA) into Australia dollars. The significant monetary items denominated in currencies other than Australia dollars include intangible assets and goodwill, due to related companies, amount due to ultimate holding company, borrowings, convertible bonds and derivative financial instruments. |
(m) Trade and Other Receivables | (m) Trade and Other Receivables Trade receivables are recognized at original invoice amounts less an allowance for uncollectible amounts and have repayment terms between 30 and 90 days. Collectability of trade receivables is assessed on an ongoing basis. Debts which are known to be uncollectible are written off. An allowance is made for doubtful debts where there is objective evidence that the Group will not be able to collect all amounts due according to the original terms. Objective evidence of impairment includes financial difficulties of the debtor, default payments or debts more than 30 days overdue. On confirmation that the trade receivable will not be collectible, the gross carrying value of the asset is written off against the associated provision. |
(n) Trade and Other Payables | (n) Trade and Other Payables These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. The amounts are unsecured and are paid on normal commercial terms. |
(o) Provisions and Contingent Liabilities | (o) Provisions and Contingent Liabilities Provisions are recognized for other liabilities of uncertain timing or amount when the Group has a legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Where the time value of money is material, provisions are stated at the present value of the expenditure expected to settle the obligation. Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote. |
(p) Borrowings | (p) Borrowings Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities, which are not an incremental cost relating to the actual draw-down of the facility, are recognized as an offset against the liability balance and amortized on a straight-line basis over the term of the facility. Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of the financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in other income or other expenses. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period. |
(q) Borrowing Costs | (q) Borrowing Costs Borrowing costs that are directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of that asset. Other borrowing costs are expensed in the period in which they are incurred. The capitalization of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or complete. |
(r) Convertible Bonds | (r) Convertible Bonds Convertible bonds that can be converted into ordinary shares at the option of the holder, where the number of shares to be issued is fixed, are accounted for as compound financial instruments, i.e. they contain both a liability component and an equity component. At initial recognition the liability component of the convertible bonds is measured at fair value based on the future interest and principal payments, discounted at the prevailing market rate of interest for similar non-convertible instruments. The equity component is the difference between the initial fair value of the convertible bonds as a whole and the initial fair value of the liability component. Transaction costs that relate to the issue of a compound financial instrument are allocated to the liability and equity components in proportion to the allocation of proceeds. The liability component is subsequently carried at amortised cost. Interest expense recognised in profit or loss on the liability component is calculated using the effective interest method. The equity component is recognised in the capital reserve until either the bonds are converted or redeemed. If the bonds are converted, the capital reserve, together with the carrying amount of the liability component at the time of conversion, is transferred to share capital and share premium as consideration for the shares issued. If the bonds are redeemed, the capital reserve is released directly to retained profits. |
(s) Derivative Financial Instruments | (s) Derivative Financial Instruments Derivative financial instruments are recognised at fair value. At the end of each reporting period the fair value is remeasured. The gain or loss on remeasurement to fair value is recognised immediately in profit or loss. |
(t) Employee Benefits | (t) Employee Benefits (i) Employee leave entitlements Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the date of the statement of financial position. Employee entitlements to sick leave and maternity leave are not recognised until the time of leave. (ii) Pension obligations Salaries, annual bonuses, paid annual leave, contributions to defined contribution retirement plans and the cost of non-monetary benefits are accrued in the year in which the associated services are rendered by employees. Where payment or settlement is deferred and the effect would be material, these amounts are stated at their present values. (iii) Termination benefits Termination benefits are recognised at the earlier of when the Group can no longer withdraw the offer of those benefits and when it recognises restructuring costs involving the payment of termination benefits. |
(u) Cash and Cash Equivalents | (u) Cash and Cash Equivalents Cash and cash equivalents include cash on hand and call deposits with banks or financial institutions and net of bank overdrafts. |
(v) Revenue | (v) Revenue Revenue is recognized in accordance with IFRS 15 Revenue from Contracts with Customers. The underlying principle is to recognize revenue when a customer obtains control of the promised goods at an amount that reflects the consideration that is expected to be received in exchange for those goods. It also requires increased disclosures including the nature, amount, timing, and uncertainty of revenues and cash flows related to contracts with customers. We adopted IFRS 15 Revenue from Contracts with Customers at the beginning of 2018, and implemented new accounting policies and internal controls necessary to support its requirements. The adoption of IFRS 15 did not have any impact on our revenue recognition. We recognize revenue upon transfer of control of the promised goods in a contract with a customer in an amount that reflects the consideration we expect to receive in exchange for those products. Transfer of control occurs once the customer has the contractual right to use the product, generally upon shipment or once delivery and risk of loss has transferred to the customer. We account for a contract with customer when we have approval and commitment from both parties, the rights of the parties and payment terms are identified, the contract has commercial substance and collectability of consideration is probable. We identify separated contractual performance obligations and evaluate each distinct performance obligation within a contract, whether it is satisfied at a point in time or over time. All of our performance obligations for the reported periods were satisfied at a point in time. Revenue is allocated among performance obligations in a manner that reflects the consideration that we expect to be entitled to for the promised goods based on standalone selling prices (SSP). SSP are estimated for each distinct performance obligation and judgment may be required in their determination. The best evidence of SSP is the observable price of the product when we sell the goods separately in similar circumstances and to similar customers. Until January 1, 2018, revenues from sales of products and services were recognized upon delivery provided that the collection of the resulting receivable was reasonably assured, there was persuasive evidence of an arrangement, no significant obligations remained and the price was fixed or determinable. The product warranties, which in the great majority of cases includes component and functional errors, are usually granted for a one year period from legal transfer of the product. For the customers, the specific warranty period and the specific warranty terms are part of the basis of the individual contract. Warranty provisions include only standard warranty, whereas services purchased in addition to the standard warranty are included in the services contracts. Interest Income Revenue is recognized as interest accrues using the effective interest method. |
(w) Sales Taxes | (w) Sales Taxes Revenues, expenses and assets are recognized net of the amount of goods and services tax ("GST") or valued-added tax ("VAT"), except where the amount of GST or VAT incurred is not recoverable from the Australian Taxation Office or taxation authorities in other jurisdictions. In these circumstances, the GST or VAT is recognized as part of the cost of acquisition of the assets or as part of an item of expense. Receivables and payables in the consolidated statement of financial position are shown inclusive of GST or VAT. Cash flows are included in the consolidated statement of cash flows on a gross basis and the GST or VAT component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows. |
(x) Earnings Per Share | (x) Earnings Per Share (i) Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year. (ii) Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. |
(y) Issued Capital | (y) Issued Capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration. |
(z) Related Party Transactions | (z) Related Party Transactions For the purpose of these consolidated financial statements, related party includes a person and entity as defined below: (i) A person, or a close member of that person's family, is related to the Group if that person: (i) has control or joint control over the Group; (ii) has significant influence over the Group; or (iii) is a member of the key management personnel of the Group or the Group's parent. (ii) An entity is related to the Group if any of the following conditions applies: (i) the entity and the Group are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others). (ii) one entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member). (iii) both entities are joint ventures of the same third party. (iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity. (v) the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group. (vi) the entity is controlled or jointly controlled by a person identified in (i). |
(aa) Government grants | (aa) Government grants Government grants are recognized at fair value where there is reasonable assurance that the grant will be received and all grant conditions will be met. Grants relating to expenses are recognised as income over the periods necessary to match grants to the costs are compensating. Grants relating to assets are credited to deferred income at fair value and are credited to income over the expected useful life of the assets on a straight line basis. |
(ab) Fair Value | (ab) Fair Value Fair values may be used for financial asset and liability measurement and for sundry disclosures. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It is based on the presumption that the transaction takes place either in the principal market for the asset or liability or, in the absence of a principal market, in the most advantageous market. The principal or most advantageous market must be accessible to, or by, the Group. Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their best economic interest. The fair value measurement of a non-financial asset takes into account the market participant's ability to generate economic benefits by using the asset at its highest and best use or by selling it to another market participant that would use the asset at its highest and best use. In measuring fair value, the Group uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. (ac) New, Revised or Amending Accounting Standards and Interpretations (i) The Group has applied the following standards and amendments for first time in their annual reporting period commencing January 1, 2020: Amendments to References to the Conceptual Framework in IFRS Standards The Group has adopted the amendments included in Amendments to References to the Conceptual Framework in IFRS Standards for the first time in the current year. The amendments include consequential amendments to affected Standards so that they refer to the new Framework. Not all amendments, however, update those pronouncements with regard to references to and quotes from the Framework so that they refer to the revised Conceptual Framework. Some pronouncements are only updated to indicate which version of the Framework they are referencing to (the IASC Framework adopted by the IASB in 2001, the IASB Framework of 2010, or the new revised Framework of 2018) or to indicate that definitions in the Standard have not been updated with the new definitions developed in the revised Conceptual Framework. The adoption of these amendments has not had a material impact on the Group. Amendments to IFRS 3 Definition of a Business The Group has adopted the amendments to IFRS 3 for the first time in the current year. The amendments clarify that while businesses usually have outputs, outputs are not required for an integrated set of activities and assets to qualify as a business. To be considered a business an acquired set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. The amendments remove the assessment of whether market participants are capable of replacing any missing inputs or processes and continuing to produce outputs. The amendments also introduce additional guidance that helps to determine whether a substantive process has been acquired. The amendments introduce an optional concentration test that permits a simplified assessment of whether an acquired set of activities and assets is not a business. Under the optional concentration test, the acquired set of activities and assets is not a business if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar assets. The amendments are applied prospectively to all business combinations and asset acquisitions for which the acquisition date is on or after 1 January 2020. The adoption of these amendments has not had a material impact on the Group. Amendments to IAS 1 and IAS 8 Definition of Material The Group has adopted the amendments to IAS 1 and IAS 8 for the first time in the current year. The amendments make the definition of material in IAS 1 easier to understand and are not intended to alter the underlying concept of materiality in IFRS Standards. The concept of 'obscuring' material information with immaterial information has been included as part of the new definition. The threshold for materiality influencing users has been changed from 'could influence' to 'could reasonably be expected to influence'. The definition of material in IAS 8 has been replaced by a reference to the definition of material in IAS 1. In addition, the IASB amended other Standards and the Conceptual Framework that contain a definition of 'material' or refer to the term ‘material' to ensure consistency. The adoption of these amendments has not had a material impact on the Group. (ii) New standards and interpretations not yet adopted A number of new standards, amendments to standards and interpretations issued by the IASB which are not yet mandatorily applicable to the Group have not been applied in preparing these consolidated financial statements. Those which may be relevant to the Group are set out as below and not expected to have a significant impact on the Group's consolidated financial statements. The Group does not plan to adopt these standards early. IFRS 17 Insurance Contracts IFRS 10 and IAS 28 (amendments) Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Amendments to IAS 1 Classification of Liabilities as Current or Non-current Amendments to IFRS 3 Reference to the Conceptual Framework Amendments to IAS 16 Property, Plant and Equipment - Proceeds before Intended Use Amendments to IAS 37 Onerous Contracts Cost of Fulfilling a Contract Annual Improvements to IFRS Standards 2018-2020 Cycle Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards, IFRS 9 Financial Instruments, IFRS 16 Leases and IAS 41 Agriculture |
(ad) Critical Accounting Judgments, Estimates and Assumptions | (ad) Critical Accounting Judgments, Estimates and Assumptions The preparation of the consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts in the consolidated financial statements. Management continually evaluates its judgments and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgments, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgments and estimates will seldom equal the related actual results. The judgments, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. (i) Goodwill and other intangible assets The goodwill included in the consolidated financial statements was derived from the acquisition of Marvel Digital Limited. Determining whether goodwill is impaired requires as estimation of the value in use of the cash generating unit ("CGU") to which goodwill have been allocated. The value in use calculation requires the Group to estimate the future cash flows expected to arise from the CGU and a suitable discount rate in order to calculate the present value. Where the actual future cash flows are less than expected, a material impairment loss may arise. At the end of the reporting year, the carrying amount of goodwill is A$Nil (2019: A$ Nil). Details of the recoverable amount calculations are disclosed in Note 15. (ii) Provision for impairment of receivables The provision for impairment of receivables assessment requires a degree of estimation and judgment. The level of provision is assessed by taking into account the recent sales experience, the ageing of receivables, historical collection rates and specific knowledge of the individual debtor's financial position. Refer to Note 12 for further details. (iii) Estimation of useful lives of assets The Group determines the estimated useful lives and related depreciation and amortization charges for its plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other events. The depreciation and amortization charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down. Please refer to Note 3(e) and 3(k) for further detail. (iv) Income tax The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgment is required in determining the provision for income tax and in assessing whether deferred tax assets and certain deferred tax liabilities are recognized in the consolidated statement of financial position. Deferred tax assets, including those arising from unrecouped tax losses, capital losses and temporary differences, are recognized only where it is considered more likely than not that they will be recovered, which is dependent on the generation of sufficient future taxable profits. Assumptions about the generation of future taxable profits depend on management's estimates of future cash flows. In addition, there are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Group recognizes liabilities for anticipated tax audit issues based on the Group's current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made. Judgements are also required about the application of income tax legislation. These judgements and assumptions are subject to risk and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities recognized in the statement of financial position and the amount of other tax losses and temporary differences not yet recognized. In such circumstances, some or all of the carrying amounts of recognized deferred tax assets and liabilities may require adjustments, resulting in a corresponding credit or charge to the consolidated statement of profit or loss and comprehensive income. (v) Capitalized technology development expenditure in intangibles In determining which technology development expenditure may be capitalized the Group applies judgement to distinguish those costs which have a direct relationship to the criteria for capitalization described in accounting policy Note 3(e), from those which should be expensed in the period incurred. This involves evaluating the nature of work performed by staff as well as universities, educational and professional institutions, third party consultants and contractors, and in many cases includes a judgmental apportionment of costs. (vi) Impairment of non-financial assets The Group assesses impairment of all assets (including intangible assets) at each reporting date by evaluating conditions specific to the Group and to the particular asset that may lead to impairment. These include product, technology, economic and political environments and future product expectations. If an impairment trigger exists the recoverable amount of the asset is determined. Given the current uncertain economic environment management considered that the indicators of impairment were significant enough and as such these assets have been tested for impairment in this financial period. Refer to Note 3(h) for details regarding the method and assumptions used. (vii) Fair value of convertible bonds The fair value of convertible bonds are determined using valuation techniques including reference to other instruments that are substantially the same, discounted cash flow analysis and option pricing model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. (viii) Fair value of derivative financial instruments The fair values of derivative financial instruments that are not quoted in active markets are determined by using valuation techniques. Valuation techniques used include discounted cash flows analysis and models with built-in functions available in externally acquired financial analysis or risk management systems widely used by the industry such as option pricing models. To the extent practical, the models use observable data. In addition, valuation adjustments may be adopted if factors such as credit risk are not considered in the valuation models. Management judgement and estimates are required for the selection of appropriate valuation parameters, assumptions and modeling techniques. (ix) Valuation of contingent consideration The contingent consideration to be transferred by the acquirer is recognized at acquisition-date fair value. The fair value of contingent consideration was based on an independent valuation which is determined by using the discounted cash flow method on the probability-weighted financial projection of MDL for the period from October 1, 2015 to September 30, 2017 and is under level 3 fair value adjustment which involve significant estimates and judgements from the management. There is no more contingent liabilities as at December 31, 2019 and 2020. |
(ae) Standards issued but not yet effective | (ae) Standards issued but not yet effective The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group's consolidated financial statements are disclosed below. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective. (i) IFRS 17 Insurance Contracts IFRS 17 establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts an supersedes IFRS 4 Insurance Contracts. IFRS 17 outlines a general model, which is modified for insurance contracts with direct participation features, described as the variable fee approach. The general model is simplified if certain criteria are met by measuring the liability for remaining coverage using the premium allocation approach. The general model uses current assumptions to estimate the amount, timing and uncertainty of future cash flows and it explicitly measures the cost of that uncertainty. It takes into account market interest rates and the impact of policyholders' options and guarantees. In June 2020, the IASB issued Amendments to IFRS 17 to address concerns and implementation challenges that were identified after IFRS 17 was published. The amendments defer the date of initial application of IFRS 17 (incorporating the amendments) to annual reporting periods beginning on or after 1 January 2023. At the same time, the IASB issued Extension of the Temporary Exemption from Applying IFRS 9 (Amendments to IFRS 4) that extends the fixed expiry date of the temporary exemption from applying IFRS 9 in IFRS 4 to annual reporting periods beginning on or after 1 January 2023. IFRS 17 must be applied retrospectively unless impracticable, in which case the modified retrospective approach or the fair value approach is applied. For the purpose of the transition requirements, the date of initial application is the start if the annual reporting period in which the entity first applies the Standard, and the transition date is the beginning of the period immediately preceding the date of initial application. This standard is not applicable to the Group. (ii) Amendments to IFRS 10 and IAS 28 – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture The amendments to IFRS 10 and IAS 28 deal with situations where there is a sale or contribution of assets between an investor and its associate or joint venture. Specifically, the amendments state that gains or losses resulting from the loss of control of a subsidiary that does not contain a business in a transaction with an associate or a joint venture that is accounted for using the equity method, are recognised in the parent's profit or loss only to the extent of the unrelated investors' interests in that associate or joint venture. Similarly, gains and losses resulting from the remeasurement of investments retained in any former subsidiary (that has become an associate or a joint venture that is accounted for using the equity method) to fair value are recognised in the former parent's profit or loss only to the extent of the unrelated investors' interests in the new associate or joint venture. The effective date of the amendments has yet to be set by the Board; however, earlier application of the amendments is permitted. The directors of the Company anticipate that the application of these amendments may have an impact on the Group's consolidated financial statements in future periods should such transactions arise. (iii) Amendments to IAS 1 – Classification of Liabilities as Current or Non-current The amendments to IAS 1 affect only the presentation of liabilities as current or non-current in the statement of financial position and not the amount or timing of recognition of any asset, liability, income or expenses, or the information disclosed about those items. The amendments clarify that the classification of liabilities as current or non-current is based on rights that are in existence at the end of the reporting period, specify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability, explain that rights are in existence if covenants are complied with at the end of the reporting period, and introduce a definition of ‘settlement' to make clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services. The amendments are applied retrospectively for annual periods beginning on or after 1 January 2023, with early application permitted. The effective date of the amendments has yet to be set by the Board; however, earlier application of the amendments is permitted. The directors of the Company anticipate that the application of these amendments may have an impact on the Group's consolidated financial statements in future periods should such transactions arise. (iv) Amendments to IFRS 3 – Reference to the Conceptual Framework The amendments update IFRS 3 so that it refers to the 2018 Conceptual Framework instead of the 1989 Framework. They also add to IFRS 3 a requirement that, for obligations within the scope of IAS 37, an acquirer applies IAS 37 to determine whether at the acquisition date a present obligation exists as a result of past events. For a levy that would be within the scope of IFRIC 21 Levies, the acquirer applies IFRIC 21 to determine whether the obligating event that gives rise to a liability to pay the levy has occurred by the acquisition date. Finally, the amendments add an explicit statement that an acquirer does not recognise contingent assets acquired in a business combination. The amendments are effective for business combinations for which the date of acquisition is on or after the beginning of the first annual period beginning on or after 1 January 2022. Early application is permitted if an entity also applies all other updated references (published together with the updated Conceptual Framework) at the same time or earlier. The effective date of the amendments has yet to be set by the Board; however, earlier application of the amendments is permitted. The directors of the Company anticipate that the application of these amendments may have an impact on the Group's consolidated financial statements in future periods should such transactions arise. (v) Amendments to IAS 16 – Property, Plant and Equipment—Proceeds before Intended Use The amendments prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced before that asset is available for use, i.e. proceeds while bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Consequently, an entity recognises such sales proceeds and related costs in profit or loss. The entity measures the cost of those items in accordance with IAS 2 Inventories. The amendments also clarify the meaning of ‘testing whether an asset is functioning properly'. IAS 16 now specifies this as assessing whether the technical and physical performance of the asset is such that it is capable of being used in the production or supply of goods or services, for rental to others, or for administrative purposes. If not presented separately in the statement of comprehensive income, the financial statements shall disclose the amounts of proceeds and cost included in profit or loss that relate to items produced that are not an output of the entity's ordinary activities, and which line item(s) in the statement of comprehensive income include(s) such proceeds and cost. The amendments are applied retrospectively, but only to items of property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after the beginning of the earliest period presented in the financial statements in which the entity first applies the amendments. The entity shall recognise the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at the beginning of that earliest period presented. The amendments are effective for annual periods beginning on or after 1 January 2022, with early application permitted. The effective date of the amendments has yet to be set by the Board; however, earlier application of the amendments is permitted. The directors of the Company anticipate that the application of these amendments may have an impact on the Group's consolidated financial statements in future periods should such transactions arise. (vi) Amendments to IAS 37 – Onerous Contracts—Cost of Fulfilling a Contract The amendments specify that the "cost of fulfilling" a contract comprises the "costs that relate directly to the contract". Costs that relate directly to a contract consist of both the incremental costs of fulfilling that contract (examples would be direct labour or materials) and an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract). The amendments apply to contracts for which the entity has not yet fulfilled all its obligations at the beginning of the annual reporting period in which the entity first applies the amendments. Comparatives are not restated. Instead, the entity shall recognise the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings or other component of equity, as appropriate, at the date of initial application. The amendments are effective for annual periods beginning on or after 1 January 2022, with early application permitted. The effective date of the amendments has yet to be set by the Board; however, earlier application of the amendments is permitted. The directors of the Company anticipate that the application of these amendments may have an impact on the Group's consolidated financial statements in future periods should such transactions arise. (vii) Annual Improvements to IFRS Standards 2018–2020 The amendments are effective for annual reporting periods beginning on or after 1 January 2022 with earlier application permitted. IFRS 1 First-time Adoption of International Financial Reporting Standards This amendment simplifies the application of IFRS 1 for a subsidiary that becomes a first-time adopter of IFRS Standards later than its parent, i.e. if a subsidiary adopts IFRS Standards later than its parent and applies IFRS 1:D16(a), then a subsidiary may elect to measure cumulative translation differences for all foreign operations at amounts included in the consolidated financial statements of the parent, based on the parent's date of transition to IFRS Standards. IFRS 9 Financial Instruments This amendment clarifies that - for the purpose of performing the "10 per cent test" for derecognition of financial liabilities - in determining those fees paid net of fees received, a borrower includes only fees paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other's behalf. IFRS 16 Leases The amendment removes the illustration of payments from the lessor relating to leasehold improvements. As currently drafted, this example is not clear as to why such payments are not a lease incentive. IAS 41 Agriculture This amendment removes the requirement to exclude cash flows for taxation when measuring fair value, thereby aligning the fair value measurement requirements in IAS 41 with those in IFRS 13 Fair Value Measurement The effective date of the amendments has yet to be set by the Board; however, earlier application of the amendments is permitted. The directors of the Company anticipate that the application of these amendments may have an impact on the Group's consolidated financial statements in future periods should such transactions arise. |