For personal use only2018/09/07 · 6,250,000 Options exercisable by payment of $0.02 each on or...

ANNUAL REPORT 30 JUNE 2018

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OOKAMI LIMITED ABN 67 009 081 770


1

CONTENTS

Corporate Directory 1

Directors’ Report 2

Remuneration Report 10

Auditor’s Independence Declaration 20

Financial Report 21

Directors’ Declaration 55

Independent Auditor’s Report 56

Additional Shareholder Information 63

CORPORATE DIRECTORY

Directors Faldi Ismail Non-Executive Chairman Brendan de Kauwe Non-Executive Director Emilija Poposka Kardaleva Non-Executive Director

Company Secretary Shannon Coates

Registered office 108 Outram Street, West Perth, WA, 6005 Ph: +61 8 9486 7244

Auditor Pitcher Partners BA&A Pty Ltd Level 11, 12-14 The Esplanade Perth, WA, 6000

Bankers National Australia Bank Gateway Building Cnr Marmion & Davy Streets Booragoon, WA, 6154

Share Registry Automic Registry Services Level 2, 267 St Georges Terrace Perth, WA, 6000

Securities Exchange Listing Australian Securities Exchange Limited Level 40, Central Park 152-158 St Georges Terrace Perth, WA, 6000

ASX Code – OOK

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DIRECTORS’ REPORT

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Your Directors present their report, together with the financial statements of Ookami Limited (“the Company” or

“OOK”) and controlled entities (“the Group”) for the financial year ended 30 June 2018.

1. DIRECTORS

The names of Directors in office at any time during or since the end of the year are:

Name Status Appointed

Faldi Ismail Non-Executive Chairman Appointed 5 June 2015

Brendan de Kauwe Non-Executive Director Appointed 5 June 2015

Emilija Poposka Kardaleva Non-Executive Director Appointed 30 January 2018

Peter Wall Non-Executive Director Appointed 27 October 2015

Resigned 16 February 2018

2. COMPANY SECRETARY

The following person held the position of Company Secretary at the end of the financial year:

Shannon Coates

Ms. Coates was appointed as Company Secretary on 24 September 2015. Shannon completed a Bachelor of Laws

through Murdoch University and has since gained over 20 years’ in-house experience in corporate law and

compliance for public companies. She is a Chartered Secretary and an Associate Member of both the Institute of

Chartered Secretaries & Administrators and the Governance Institute of Australia. Ms Coates is currently director

of Evolution Corporate Services Pty Ltd, a company providing corporate advisory services and is also company

secretary to a number of public unlisted and ASX listed companies.

3. PRINCIPAL ACTIVITIES

The Company continued to develop its Akela proprietary financial services software platform which provides

Australian Financial Services Licence (AFSL) holders with a streamlined total managed solution to capital raisings

and distribution of public and private offerings. The Company also continued to evaluate complimentary business

acquisitions as part of the growth strategy outlined in the prospectus lodged with ASIC on 23 November 2015.

4. DIVIDENDS PAID OR RECOMMENDED

There were no dividends paid or recommended during the financial year ended 30 June 2018.

5. REVIEW OF OPERATIONS

5.1 Operation Review

During the year Ookami’s wholly owned Akela Platform continued to generate revenue and secure quality

offerings for its retail and sophisticated (s708) investors, including offerings in Vector Resources Limited (ASX:

VEC) and the prospectus capital raising for Jadar Lithium Limited (ASX: JDR) (formerly known as South East Asia

Resources), with both offers closing oversubscribed. Akela secured an allocation in the prospectus capital raising

for Raiden Resources Limited (ASX: RDN). In March 2018, Akela offered its clients the opportunity to participate

in Rafaella Resources Ltd’s Initial Public Offering (IPO). In June 2018 Akela secured an allocation in the IPO for both

Kleos Space SA and GeoCrystal Limited and looks forward to continuing to advance its revenue opportunities with

further quality offerings planned for its subscribers.

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DIRECTORS’ REPORT

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As announced on 11 December 2017, Ookami entered into an agreement to acquire a strategic equity holding of

18.23%, being 28,000 ordinary shares, in award-winning blockchain company, BronTech Pty Ltd (Brontech), for

A$933,240. Ookami shareholders approved the acquisition on 30 January 2018.

Brontech is a Sydney based company that is pioneering a blockchain backed platform for data exchange and

identity management. The Company is also building complementary proprietary applications to extract data from

various sources and pack them into anonymised data products that are sold to corporations and SMEs as insight

and research tools.

Following shareholder approval, Brontech Founder and CEO, Ms Emilija Poposka Kardaleva, was appointed to the

Board of Ookami as Non-Executive Director.

It is expected that the integration of Brontech’s technology in Akela Platform will:

- Provide an additional layer of verification utilising blockchain technology to Akela’s existing KYC/AML processes enabling the platform to confidently scale, as well as enter into new third-party partnership and product offering.

- Allow the verification of individual’s bank accounts, social media accounts and other professional and personal information data sets thereby allowing for up to 10,000 additional points per customer.

- Provide data portability compatible with the EU GDPR Directive and identify solution across the entire Akela ecosystem as well to third party clients and partners of Akela.

- Increase the Akela user base by providing a channel to access to the 10,000 current users and future users in the Brontech’s Ecosystem.

- Provide Akela unparalleled access to customer insight via the Brontech data marketplace. - Allow Brontech clients with verified bank accounts to be instantly verified for Akela and seamlessly

partake in offerings on the Akela platform. - Significantly enhance Akela’s marketing reach through Brontech’s smart marketing strategies and

analytics to acquire ‘look-alike’ customers from Linkedln, Facebook, and other social media platform, thus enabling better targeting of existing and new potential customers.

- Provide Akela the technology ‘know how’ and exposure to superior personal identity verification and management, advanced data analytics, as well as new revenue opportunity via access to purchasers within the data marketplace.

Ookami has entered into a formal agreement with Brontech to integrate its personal identity technology and solutions. This will be implemented via Brontech’s BronID API allowing clients such as Akela and NCX (and others) to onboard users in seamless manner by instantaneously extracting their identity information and verifying this information across different data sources for KYC/AML purposes. This is expected to strengthen the relationship between all stakeholders in Ookami’s ecosystem and further accelerate the growth of the ecosystem’s verified user base.

On 13 February 2018, the Company signed a collaboration agreement with Australian founded digital asset exchange National Currency Exchange Group Limited (NCX). Under the agreement, the parties will collaborate and share the intellectual property of their respective technologies, with a view to developing a “preferred” client model allowing members to seamlessly utilise technology and product offerings within the Ookami ecosystem. This model envisages that once fully verified, clients will have access to a digital wallet allowing Akela to be the first securities investment platform to integrate digital asset payment solutions for use in traditional equity offering.

On 16 February 2018, the Company announced that Non-Executive Director, Mr Peter Wall resigned from the Board.

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DIRECTORS’ REPORT

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5.1 Operation Review

As announced on 13 June 2018, the software architecture and business analysis scoping exercise for Payment

Gateway conducted with NCX was completed.

The Directors of Ookami and Akela, continue to consider technologies and solutions deemed complementary to

the Ookami ecosystem, and are continuing to explore such opportunities. Expansion of the portfolio remains a

key growth strategy for the Company and the Company continues to evaluate a number of complementary

business acquisitions to create additional shareholder value.

Some of the acquisitions may have the potential to increase the

Company’s Akela subscriber base.

It is Ookami management’s view that blockchain technologies

and cryptocurrencies will continue to become more mainstream

as governments, Tier 1 companies and regulators (such as the

ASX’s decision to move to blockchain settlements solution)

adopt the technologies. Consequently, Ookami expects

increasing acceptance of products and transactions in this space

and the implementation of appropriate regulatory regimes.

5.2 Financial Review

The financial statements have been prepared on a going concern basis, which contemplates the continuity of

normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of

business. The Group incurred a loss for the year of $1,132,424 (2017: $503,335 loss). The net assets of the Group

have decreased from $3,157,449 at 30 June 2017 to $3,023,847 at 30 June 2018.

As at 30 June 2018, the Group's cash and cash equivalents balance decreased by $1,413,795 to a balance at 30

June 2018 of $1,250,423 and had working capital of $1,231,575 (2017: $2,588,532).

Based on a cash flow forecast, the Group has sufficient working capital to fund its mandatory obligations for the

period ending 12 months from the date of this report.

6. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Refer to section 5, Review of operations.

7. EVENT SUBSEQUENT TO REPORTING DATE

On 4 September 2018, the Company announced the issue of 2,000,000 Performance Rights and 2,000,000 Unlisted Options to a non-executive director, Ms Emilija Poposka Kardaleva, subject to the following vesting conditions;

a) 1,000,000 Performance Rights will vest if the Company’s 10 day VWAP Share price meets or exceeds$0.06 at any time in the 18 months after the date of issue of the Performance Rights; and

b) 1,000,000 Performance Rights will vest if the Company’s 10 day VWAP Share price meets or exceeds$0.08 at any time in the 18 months after the date of issue of the Performance Rights.

On 4 September 2018, the Company announced the issue of 2,000,000 Unlisted Options exercisable at $0.03 each

on or before 3 September 2020 (“Expiry Date”) and vesting if the Company’s 10 day VWAP Share price increases

to $0.06 or higher at any time prior to the Expiry Date to a consultant as part consideration for investor relation

services.

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DIRECTORS’ REPORT

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7. EVENT SUBSEQUENT TO REPORTING DATE

No other matters or circumstances have arisen since the end of the reporting period which significantly affected

or may significantly affect the operation of the Group, the result of those operations, or the state of affairs of the

Group in the future financial years.

8. FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES

The Group’s principal continuing activity is the development and commercialisation of its Akela proprietary

financial services software platform. The Group future developments, prospects and business strategies are to

continue to evaluate complimentary business acquisitions as part of Group growth strategy.

9. INFORMATION ON DIRECTORS

The following information on Directors including the share and option holdings is current as at the date of this

report:

Mr Faldi Ismail Chairman (Non-Executive)

Qualifications Bachelor of Business (Accounting & Finance)

Experience Mr Ismail has significant experience working as a corporate advisor specialising in the restructure and recapitalisation of a wide range of ASX-listed companies. With many years of investment banking experience, his expertise covers a wide range of industry sectors. Mr Ismail is the founder and operator of Otsana Capital, a boutique advisory firm specialising in mergers & acquisitions, capital raisings and Initial Public Offerings (IPO’s) and is currently a director of several ASX-Listed companies.

Interest in Shares and Options at the date of this report

16,500,000 Ordinary Shares

6,250,000 Options exercisable by payment of $0.02 each on or before 3/9/2019

4,364,865 Options exercisable by payment of $0.03 each on or before 22/1/2019

Directorships held in other listed entities (last 3 years)

Asiamet Resources Limited (current)

Vysarn Limited (formerly MHM Metals Limited) (current)

Dotz Nano Limited (ceased 1 February 2018)

Flamingo Al Limited (ceased 27 June 2017)

Quantify Technology Holdings Limited (ceased 1 March 2017)

TV2U International Limited (ceased 21 October 2016)

Zenitas Health Ltd (ceased 6 April 2016)

Emergent Resources Limited (ceased 16 November 2015)

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DIRECTORS’ REPORT

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9. INFORMATION ON DIRECTORS (CONTINUED)

Mr Brendan de Kauwe Director (Non-Executive)

Qualifications BDSc (UWA), Grad Dip App Fin, Dip Music Industry

Experience Dr de Kauwe studied a Bachelor of Science and Bachelor of Dental Surgery from the University of Western Australia. He also holds a Post Graduate Diploma in Applied Finance, majoring in Corporate Finance, and is an ASIC compliant (RG146) Securities Advisor. Dr de Kauwe’s is a Director of Otsana Capital, a corporate advisory firm, with vast experience in corporate restructuring and recapitalisations, mergers and acquisitions, IPO/RTO and capital markets. Dr de

Kauwe’s corporate experience, coupled with his extensive technology, science and bio-medical background gives him an integral understanding in the evaluation and execution of projects and assets over a diverse range of sectors. He is also a Director of G Medical Innovations Holdings Ltd (ASX: GMV).




G Medical Innovations Holdings Limited (current)

Race Oncology Limited (ceased 4 April 2018)

e-Sense Lab Limited (ceased 9 February 2018)

Calidus Resources Limited (ceased 13 June 2017)

XPED Limited (ceased 24 March 2016)

Ms. Emilija Poposka Kardaleva

Director (Non-Executive)

Qualifications Master Degree in Computer Science

Master Degree in Business Administration (General Management)

Experience Ms Poposka Kardaleva has 10 years’ experience in technology and software development across different stages of the software development life cycle. During her career she has worked on several large-scale software projects for the public and private sector and taken up varied roles in the software development lifecycle, including project manager, programmer and QA engineer. Ms Poposka Kardaleva has consulted on major projects with international organisation including United Nations Development Program (UNDP), United States Agency for International Development (USAID) and The European Commission (EC).


Nil


Nil

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DIRECTORS’ REPORT

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9. INFORMATION ON DIRECTORS (CONTINUED)

Mr Peter Wall Director (Non-Executive) (Resigned 16 February 2018)

Qualifications LLB BComm MAppFin FFin

Experience Mr Wall is a corporate lawyer and has been a Partner at Steinepreis Paganin (Perth based corporate law firm) since July 2005. Peter graduated from the University of Western Australia in 1998 with a Bachelor of Laws and Bachelor of Commerce (Finance). He has also completed a Masters of Applied Finance and Investment with FINSIA. Peter has a wide range of experience in all forms of commercial and corporate law, with a particular focus on technology, equity capital markets and mergers and acquisitions. He also has significant experience in dealing in cross border transactions.

Interest in Shares and Options at the date of his resignation



MyFiziq Limited (current)

Activistic Limited (current)

Zyber Holdings Limited (current)

Sky and Space Global Limited (current)

Transcendence Technologies Limited (current)

Zinc of Ireland (ceased 22 July 2016)

TV2U International Limited (ceased 9 February 2016)

9. MEETINGS OF DIRECTORS

During the financial year, there was two meetings of directors (nil committee meetings of directors) held, with all

Directors attending the meeting. In addition, decisions at Board level were made via circular resolution of the

Directors.

10. INDEMNIFYING OFFICERS AND AUDITOR

Indemnification The Company indemnifies each of its Directors, Officers and Company Secretary. The Company indemnifies each

Director or officer to the maximum extent permitted by the Corporations Act 2001 from liability to third parties,

except where the liability arises out of conduct involving lack of good faith, and in defending legal and

administrative proceedings and applications for such proceedings.

The Company must use its best endeavours to insure a Director or officer against any liability, which does not arise

out of conduct constituting a wilful breach of duty or a contravention of the Corporations Act 2001. The Company

must also use its best endeavours to insure a Director or officer against liability for costs and expenses incurred in

defending proceedings whether civil or criminal.

To the extent permitted by law, the Company has agreed to indemnify its auditors, Pitcher Partners, as part of the

terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified

amount).

The Company has not entered into any agreement with its current auditors indemnifying them against any claims

by third parties arising from their report on the financial report.

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DIRECTORS’ REPORT

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10. INDEMNIFYING OFFICERS AND AUDITOR

Insurance Premium During the year the Company paid insurance premiums to insure Directors and Officers against certain liabilities

arising out of their conduct while acting as an officer of the Group. Under the terms and conditions of the

insurance contract, the nature of the liabilities insured against and the premium paid cannot be disclosed.

11. OPTIONS

Unissued shares under option

At the date of this report, the un-issued ordinary shares of Ookami Limited under option are as follows:

Grant Date Expiry Date Exercise

Price

Number of shares

under option

24 December 2015 22 January 2019 $0.03 39,979,730

24 December 2015 4 September 2019 $0.02 23,000,000

9 November 2017 3 September 2019 $0.02 2,500,000

8 August 2018 3 September 2020 $0.03 2,000,000

67,479,730

No person entitled to exercise the option has or has any right by virtue of the option to participate in any share

issue of any other body corporate. 4,520,270 shares were issued during the year on exercise of options

(2017: Nil).

Performance Rights

At the date of this report, the performance rights of Ookami Limited are as follows:

Grant Date

Performance

Right

Expiration dates Number of

rights issued

8 August 2018 Class D 4 March 2020 1,000,000

8 August 2018 Class E 4 March 2020 1,000,000

2,000,000

Class Milestone

Class D Performance Rights Upon volume weighted average price (VWAP) for 10 consecutive trading days of shares equals or exceeds 6 cents

Class E Performance Rights Upon volume weighted average price (VWAP) for 10 consecutive trading days of shares equals or exceeds 8 cents

The Performance Rights will vest and become capable of exercise into ordinary shares in the Company upon the

satisfaction of vesting conditions that are market based vesting conditions as disclosed above. 36,000,000

performance rights have been exercised during the year.

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DIRECTORS’ REPORT

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12. ENVIRONMENTAL REGULATIONS

The Company is subject to the environmental regulations under legislation of the Commonwealth of Australia.

The Company aims to comply with the identified regulatory requirements in each jurisdiction in which it operates.

There have been no known material breaches of the environmental regulations.

13. NON-AUDIT SERVICES

During the year, Pitcher Partners BA&A Pty Ltd consented to and was appointed as the Company’s auditors.

The Group may decide to employ the auditor on assignments additional to their statutory audit duties where the

auditor’s expertise and experience with the Company are important. Non-audit services were provided by

related entities to the Company’s current auditors, Pitcher Partners BA&A Pty Ltd as detailed below. The

Directors are satisfied that the provision of non-audit services is compatible with the general standard of

independence for auditors imposed by the Corporations Act 2001.

30 June 2018

$

30 June 2017

$

Amounts paid/ payable to Pitcher Partners BA&A Pty Ltd or related entities for non-audit services

Pitcher Partners (WA) Pty Ltd - Taxation 7,098 -

Total auditors remuneration for non-audit services 7,098 -

In the event that non-audit services are provided by Pitcher Partners, the Board has established certain procedures to ensure that the provision of non-audit services are compatible with, and do not compromise, the auditor independence requirements of the Corporations Act 2001. These procedures include:

• non-audit services will be subject to the corporate governance procedures adopted by the Company andwill be reviewed by the Board to ensure they do not impact the integrity and objectivity of the auditor;and

• ensuring non-audit services do not involve reviewing or auditing the auditor’s own work, acting in amanagement or decision making capacity for the Company, acting as an advocate for the Company orjointly sharing risks and rewards.

14. PROCEEDINGS ON BEHALF OF COMPANY

No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.

The Company was not a party to any such proceedings during the year.

15. AUDITOR’S INDEPENDENCE DECLARATION

The auditor’s independence declaration under section 307C of the Corporations Act 2001 (Cth) for the year ended 30 June 2018 has been received and can be found on page 20 of the Annual Report.

16. ROUNDING OF AMOUNTS

The Company has applied the relief available to it in ASIC Legislative Instrument 2016/191, and accordingly certain amounts included in this report and in the financial report have been rounded off to the nearest $1 (where rounding is applicable), under the option available to the Company under ASIC Corporations

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REMUNERATION REPORT (AUDITED)

This remuneration report for the year ended 30 June 2018 outlines the remuneration arrangements of the Group

in accordance with the requirements of the Corporations Act 2001 (Cth), as amended (the Act) and its regulations.

This information has been audited, as required by section 308(3C) of the Act.

The remuneration report is presented under the following sections:

1. Introduction2. Remuneration governance3. Executive remuneration arrangements4. Non-executive director fee arrangements5. Details of remuneration6. Additional disclosures relating to options and shares7. Loans to key management personnel (KMP) and their related parties8. Other transactions and balances with KMP and their related parties

Details of the nature and amount of each element of the remuneration of each of the Key Management Personnel (“KMP”) of the Company (the Directors and executive) for the year ended 30 June 2018 are set out in the following tables:

There were no cash bonuses paid during the year and there are no set performance criteria for achieving cash

bonuses.


Faldi Ismail Non-Executive Chairman Appointed 5 June 2015

Brendan de Kauwe Non-Executive Director Appointed 5 June 2015

Emilija Poposka Kardaleva Non-Executive Director Appointed 30 January 2018

Peter Wall Non-Executive Director Appointed 27 October 2015

Resigned 16 February 2018

The names of other KMP in office at any time during or since the end of the year are:


Zak Ismail Director of Akela Capital Pty Ltd Appointed 7 December 2009

Resigned 9 April 2018

1. Introduction

KMP have authority and responsibility for planning, directing and controlling the major activities of the Group.

KMP comprise the Directors of the Company and Mr Zak Ismail, who was a director of Akela Capital Pty Ltd, a

wholly owned subsidiary, and is engaged in an executive capacity by the Company. Mr Zak Ismail appointed Mr

Faldi Ismail and Mr Brendan de Kauwe to be director of Akela Capital Pty Ltd and resigned from his position of

Director of Akela Capital Pty Ltd on 9 April 2018.

Compensation levels for KMP are competitively set to attract and retain appropriately qualified and experienced

directors and executives. The Board may seek independent advice on the appropriateness of compensation

packages, given trends in comparative companies both locally and internationally and the objectives of the

Group’s compensation strategy.

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2. Remuneration governance

The Directors believe the Company is not currently of a size nor are its affairs of such complexity as to warrant the

establishment of a separate remuneration committee. Accordingly, all remuneration matters are considered by

the full Board of Directors, in accordance with a remuneration committee charter.

During the financial year, the Company did not engage any remuneration consultants.

3. Executive remuneration arrangements

The compensation structures are designed to attract suitably qualified candidates, reward the achievement of strategic objectives, and achieve the broader outcome of creation of value for shareholders. Compensation packages may include a mix of fixed compensation, equity-based compensation, as well as employer contributions to superannuation funds. Shares and options may only be issued to directors subject to approval by shareholders in a general meeting.

At this stage the Board does not consider the Group’s earnings or earnings related measures to be an appropriate key performance indicator (KPI). In considering the relationship between the Group’s remuneration policy and the consequences for the Company’s shareholder wealth, changes in share price are analysed as well as measures such as successful completion of business development and corporate activities.

When required the Company will formalise remuneration arrangements with executives in employment agreements.

4. Non-Executive Director fee arrangements

The Board policy is to remunerate Non-Executive Directors at a level to comparable Companies for time, commitment, and responsibilities. Non-executive Directors do not receive performance related compensation. Directors’ fees cover all main Board activities and membership of any committee. The Board has no established retirement or redundancy schemes in relation to Non-Executive Directors.

The Non-Executive Directors have been provided with performance rights that are meant to incentivise the Non-Executive Directors. These performance rights do not have any service conditions attached. The board determines payments to the Non-Executive Directors and reviews their remuneration annually based on market practice, duties, and accountability. Independent external advice will be sought when required.

The maximum aggregate amount of fees that can be paid to Non-Executive Directors is presently limited to an aggregate of $300,000 per annum and any change is subject to approval by shareholders at a General Meeting. Fees for Non-Executive Directors are not linked to the performance of the Company. However, to align Directors’ interests with shareholder interests, the Directors are encouraged to hold shares in the Company.

The key terms of the Non-Executive Director service agreements existing at reporting date are as follows:

Non-Executive Director Appointment – Faldi Ismail The Company has entered into an agreement with Mr Faldi Ismail in respect of his appointment as a Non-Executive Director and Chairman of the Company.

Mr Ismail will be paid a fee of $2,000 per month for his services as Non-Executive Director and Chairman from 5 June 2015 and will be reimbursed for all reasonable expenses incurred in performing his duties.

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REMUNERATION REPORT (AUDITED) 4. Non-Executive Director fee arrangements The appointment of Mr Ismail as Non-Executive Chairman is otherwise on terms that are customary for an appointment of this nature. Non-Executive Director Appointment – Brendan de Kauwe The Company has entered into an agreement with Mr Brendan de Kauwe in respect of his appointment as a Non-Executive Director of the Company. Mr de Kauwe will be paid a fee of $2,000 per month for his services as Non-Executive Director from 5 June 2015 and will be reimbursed for all reasonable expenses incurred in performing his duties. Non-Executive Director Appointment – Emilija Poposka Kardaleva The Company has entered into an agreement with Ms Emilija Poposka Kardaleva in respect of her appointment as a Non-Executive Director of the Company. Ms Poposka Kardaleva will be paid a fee of $2,000 per month for her services as Non-Executive Director from 30 January 2018 and will be reimbursed for all reasonable expenses incurred in performing her duties. The Company does not have a Director’s Retirement Scheme in place at present. Total fees for the Non-Executive Directors for the financial year were $73,000 (2017: $72,000) and cover main Board activities only. Non-Executive Directors may receive additional remuneration for other services provided to the Group. Performance Conditions Linked to Remuneration

The Group has established and maintains the Ookami Limited Performance Rights Plan (”Plan”) to provide ongoing

incentives to any full time or part time employee, consultant or any person nominated by the Board (including

Director or Company Secretary of the Company engaged by the Company on a full or part time basis) (“Eligible

Participants”) of the Company.

The Board adopted the Plan to allow Eligible Participants to be granted Performance Rights to acquire shares in the Company. The objective of the Plan is to provide the Company with a remuneration mechanism, through the issue of securities in the capital of the Company, to motivate and reward the performance of Eligible Participants in achieving specified performance milestones within a specified performance period. The Board will ensure that the performance milestones attached to the securities issued pursuant to the Plan are aligned with the successful growth of the Company’s business activities, which the company measures with reference to the company’s share price. The company’s share price at 30 June 2018 was $0.018 (2017: $0.014) and its loss after tax was $1,132,424 (2017: loss of $503,335).

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Details of Remuneration

The Key Management Personnel of Ookami Limited includes the Directors of the Company. Other than is set out below, there are no other Key Management Personnel as at 30 June 2018.

30 June 2018

Short Term

Salary, Fees &

Commissions

$

Post

Employment

Superannuation

$

Other

$

Share-

based

payments

$

Total

$

Performance

based

remuneration

%

Non-Executive Directors

Faldi Ismail 24,000 - - - 24,000 -

Brendan de Kauwe 24,000 - - - 24,000 -

Emilija Poposka

Kardaleva 10,000 - - - 10,000 -

Peter Wall1 15,000 - - - 15,000 -

Executive Management - - - -

Zak Ismail2 45,000 - - - 45,000 -

Total 118,000 - - - 118,000 -

30 June 2017

Short Term

Salary, Fees &

Commissions

$

Post

Employment

Superannuation

$

Other

$

Share-

based

payments

$

Total

$

Performance

based

remuneration

%

Non-Executive Directors

Faldi Ismail 24,000 - - - 24,000 -

Brendan de Kauwe 24,000 - - - 24,000 -

Peter Wall1 24,000 - - - 24,000 -

Executive Management

Zak Ismail2 60,000 60,000 -

Total 132,000 - - - 132,000

5. Additional disclosures relating to equity

Options awarded, vested and lapsed during the year

The table below discloses the number of share options granted, vested or lapsed during the year.

Share options do not carry any voting or dividend rights, and can only be exercised once the vesting conditions have been met, until their expiry date.

1 Peter Wall resigned from his position as Non-Executive Director of Ookami Limited on 16 February 2018. 2 Zak Ismail resigned from his position as Director of Akela Capital Pty Ltd on 9 April 2018.

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KMP Options holdings

The number of options over ordinary shares held by each KMP of the Group during the financial year is as follows:

30 June 2018

Balance at the

start of the year

Granted during

the year

Exercised during

the year

Other changes

during the year

Balance at the end

of the year

Vested and

exercisable

Vested and un-

exercisable

Faldi Ismail 10,614,865 - - - 10,614,865 - 10,614,865

Brendan de Kauwe - - - - - - -

Emilija Poposka

Kardaleva - - - - - - -

Peter Wall1 - - - - - - -

Zak Ismail2 16,547,059 - - - 16,547,059 - 16,547,059

Total 27,161,924 - - - 21,161,924 - 21,161,924

30 June 2017

Balance at the

start of the year

Granted during

the year

Exercised during

the year

Other changes

during the year

Balance at the end

of the year

Vested and

exercisable

Vested and un-

exercisable

Faldi Ismail 10,614,865 - - - 10,614,865 - 10,614,865

Brendan de Kauwe - - - - - - -

Peter Wall1 - - - - - - -

Zak Ismail2 16,547,059 - - - 16,547,059 - 16,547,059

Total 27,161,924 - - - 27,161,924 - 27,161,924

No shares were issued during the year on exercise of options (2017: Nil).

KMP performance rights holdings

The number of performance rights held by each KMP of the Group during the financial year is as follows:

30 June 2018

Balance at the

start of the year

Granted during

the year as

remuneration

Exercised during

the year

Other changes

during the year

Balance at the end

of the year

Vested and

exercisable

Vested and un-

exercisable

Faldi Ismail 9,000,000 - 9,000,000 - - - -

Brendan de Kauwe 9,000,000 - 9,000,000 - - - -

Emilija Poposka

Kardaleva3 - - - - - - -

Peter Wall1 9,000,000 - 9,000,000 - - - -

Total 27,000,000 - 27,000,000 - - - -

Includes options or shares held directly, indirectly and beneficially by KMP.

1 Peter Wall resigned from his position as Non-Executive Director of Ookami Limited on 16 February 2018. 2 Zak Ismail resigned from his position as Director of Akela Capital Pty Ltd on 9 April 2018. 3 Emilija Poposka Kardaleva was granted 2,000,000 performance rights subsequent to year end. Refer to note 23.

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DIRECTORS’ REPORT

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KMP performance rights holdings (Continued)

30 June 2017

Balance at the

start of the year

Granted during

the year as

remuneration

Exercised during

the year

Other changes

during the year

Balance at the end

of the year

Vested and

exercisable

Vested and un-

exercisable

Faldi Ismail 9,000,000 - - - 9,000,000 3,000,000 6,000,000

Brendan de Kauwe 9,000,000 - - - 9,000,000 3,000,000 6,000,000

Peter Wall1 9,000,000 - - - 9,000,000 3,000,000 6,000,000

Zak Ismail3 - - - - - - -

Total 27,000,000 - - - 27,000,000 9,000,000 18,000,000

27,000,000 shares were issued to KMP during the year on exercise of performance rights (2017: Nil).

KMP Shareholdings

The number of ordinary shares in Ookami Limited held by each KMP of the Group during the financial year is as follows:

30 June 2018

Balance at the start of

the year

Granted as

Remuneration during

the year

Issued on exercise of

options during the year

Other changes

during the year1

Other changes

during the year2

Balance at

end of Year

Faldi Ismail 7,000,000 - - 9,500,000 - 16,500,000

Brendan de Kauwe 1,250,000 - - 9,000,000 - 10,250,000

Emilija Poposka

Kardaleva - - - - - -

Peter Wall2 4,750,000 - - 9,000,000 (13,750,000) -

Zak Ismail3 15,047,059 - - - - 15,047,059

Total 28,047,059 - - 27,500,000 (13,750,000) 41,797,059

30 June 2017

Balance at the start of

the year

Granted as

Remuneration during

the year

Issued on exercise of

options during the year

Other changes

during the year

Balance at

end of Year

Faldi Ismail 5,500,000 - - 1,500,00 7,000,000

Brendan de Kauwe 1,250,000 - - - 1,250,000

Peter Wall2 4,750,000 - - - 4,750,000

Zak Ismail3 15,047,059 - - - 15,047,059

Total 26,547,059 - - 1,500,000 28,047,059

1 Other changes during the year includes the conversions of performance rights granted as remuneration on 16 February 2018 and on-market purchase of 500,000 ordinary shares.

2 Peter Wall resigned from his position as Non-Executive Director of Ookami Limited on 16 February 2018. 3 Zak Ismail resigned from his position as Director of Akela Capital Pty Ltd on 9 April 2018.

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DIRECTORS’ REPORT

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Performance Rights granted as remuneration

30 June 2018 Balance at start of the Year Exercised Lapsed

No. Value 1 No. Value No. Value Balance at End of

Year

$ $ $ No. Value

Group KMP $

Faldi Ismail 9,000,000 151,800 9,000,000 151,800 - - - -

Brendan de Kauwe 9,000,000 151,800 9,000,000 151,800 - - - -

Peter Wall2 9,000,000 151,800 9,000,000 151,800 - - - -

Chris Ntoumenopoulos2 9,000,000 151,800 9,000,000 151,800 - - - -

Emilija Poposka Kardaleva - - - - - - - -

Zak Ismail3 - - - - - - - -

36,000,000 607,200 36,000,000 607,200 - - - -

30 June 2017 Balance at start of the Year Exercised Lapsed

No. Value 1 No. Value No. Value Balance at End of

Year

$ $ $ No. Value

Group KMP $

Faldi Ismail 9,000,000 151,800 - - - - 9,000,000 151,800

Brendan de Kauwe 9,000,000 151,800 - - - - 9,000,000 151,800

Peter Wall2 9,000,000 151,800 - - - - 9,000,000 151,800

Chris Ntoumenopoulos 9,000,000 151,800 - - - - 9,000,000 151,800

Zak Ismail3 - - - - - - - -

36,000,000 607,200 - - - - 36,000,000 607,200

1 The fair value of performance rights granted as remuneration and as shown in the above table has been determined in accordance with Australian Accounting Standards. The expense for these rights has been recognised in full for the current period given there is no applicable service period. 2 In recognition of the service Mr. Ntoumenopolos has provided to the Company, the Board resolved to proceed with the proposed issue of 9,000,000 Performance Rights even though he resigned as Director on 26 November 2015.

3 Zak Ismail resigned from his position as Director of Akela Capital Pty Ltd on 9 April 2018.

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DIRECTORS’ REPORT

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Description of Performance Rights issued as remuneration

Grant Date Performance Right

Expiration dates Number of rights issued

Value per Right at Grant

Date ($)

Total Value

$

24 December 2015 Class A 25 January 2019 12,000,000 0.0177 212,400

24 December 2015 Class B 25 January 2019 12,000,000 0.0170 204,000

24 December 2015 Class C 25 January 2019 12,000,000 0.0159 190,800

36,000,000 607,200

Class Milestone

Class A Performance Rights Upon volume weighted average price (VWAP) for 10 consecutive trading days of shares equals or exceeds 3 cents

Class B Performance Rights Upon volume weighted average price (VWAP) for 10 consecutive trading days of shares equals or exceeds 4 cents

Class C Performance Rights Upon volume weighted average price (VWAP) for 10 consecutive trading days of shares equals or exceeds 5 cents

The Performance Rights will vest and become capable of exercise into ordinary shares in the Company upon the

satisfaction of vesting conditions that are market based vesting conditions as disclosed above. The Class A

Performance Rights vested on 29 March 2016, the remaining classes of performance rights vested when they were

issued due to there being no service conditions. During the year all the performance rights have been exercised.

No Performance Rights were granted as remuneration for the year ended 30 June 2018.

6. Loans to KMP and their related parties

There were no loans made to Key Management Personnel during the financial year.

7. Other transactions and balance with KMP and their related parties

Purchases from and sales to related parties are made on terms equivalent to those that prevail in arm’s length

transactions. The Group acquired the following services from entities that are controlled by members of the

Group’s KMP:

Some Directors or former Directors of the Group hold or have held positions in other companies, where it is

considered they control or significantly influence the financial or operating policies of those entities. During the

year, the following entities provided corporate services and rental to the Group. Transactions between related

parties are on normal commercial terms and conditions no more favourable than those available to other parties

unless otherwise stated.

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DIRECTORS’ REPORT

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7. Other transactions and balance with KMP and their related parties

Entity Nature of

transactions

Key

Management

Personnel

Total Revenue/(Expense) Payable Balance Receivables Balance

2018

$

2017

$

2018

$

2017

$

2018

$

2017

$

Adamantium

Holdings Pty

Ltd

Rental of office Faldi Ismail

(16,500) (19,500) (1,500) (1,500) - -

Otsana

Pty Ltd

AFSL Expense/

Capital raising

fees

Faldi Ismail

(44,821) (15,571) (18,000) (3,450) - -

Otsana

Pty Ltd

Revenue Faldi Ismail 60,300 94,796 - - - -

Steinepreis

Paganin

Legal fees Peter Wall (21,060) (9,028) - - - -

Rental of office space and registered office fees of $16,500 were paid to Adamantium Holdings Pty Ltd for the year ended 30 June 2018, refer to note 18 for additional details. Adamantium Holdings Pty Ltd is a company controlled by director Faldi Ismail. As announced on 11 December 2017, Ookami entered into an agreement to acquire a strategic equity holding of 18.23% in blockchain company, BronTech Pty Ltd (“Brontech”), for $933,240. Ookami shareholders approved the acquisition on 30 January 2018. BronTech Pty Ltd is a company controlled by director Emilija Poposka Kardaleva.

IT Consultancy fees of $45,000 were paid to Zak Ismail for the year ended 30 June 2018, which has been included in the remuneration table in section 5 above. Zak Ismail resigned from Akela Capital on 9 April 2018. The Company amended the consultancy agreement with Zak Ismail on the 25 January 2018. The Company will continue its information technology service agreement until either one of the party terminate the agreement. Nil loans for the year ended 30 June 2018 (2017: Nil). There were no share based payments to KMP and their related parties for the year ended 30 June 2018 (2017: Nil). During last financial year, on 21 April 2017, the Company’s wholly owned subsidiary Akela Capital Pty Ltd (Akela) entered into the Authorised Representative and Intellectual Property Agreement (Agreement) with Otsana Pty Ltd (Otsana), an entity controlled by director Faldi Ismail. Under the Agreement, Otsana will allow the Authorised Representatives of Akela to provide Authorised Specified Services under the Financial Services Licence (AFSL) held by Otsana. The Agreement is for a period of 24 months and for the year ended 30 June 2018 a total fee of $44,821 was paid to Otsana (2017: $15,571). During the year, the Group generated service revenue of $60,300 by providing fixed price service for Otsana (2017: $94,796), an entity controlled by director Faldi Ismail.

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DIRECTORS’ REPORT

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REMUNERATION REPORT (END) Signed in accordance with a resolution of the Board of Directors.

Faldi Ismail

Non-Executive Chairman

Dated 7 September 2018

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Pitcher Partners is an association of Independent firms Melbourne | Sydney | Perth | Adelaide | Brisbane | Newcastle

AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF OOKAMI LIMITED

20

In relation to the independent audit for the year ended 30 June 2018, to the best of my knowledge and belief there have been:

(i) No contraventions of the auditor independence requirements of the Corporations Act 2001; and

(ii) No contraventions of APES 110 Code of Ethics for Professional Accountants.

This declaration is in respect of Ookami Limited and the entity it controlled during the year.

PITCHER PARTNERS BA&A PTY LTD

PAUL MULLIGAN Executive Director Perth, 7 September 2018

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CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2018

21

Note 2018 2017

$ $

Revenue 2 107,475 94,796

Other Income 2 10,823 19,511

Director fees (73,000) (72,000)

Insurance expense (19,375) (25,025)

Software expense 3 (259,375) (297,957)

AFSL expense (28,000) (15,571)

Professional fees 3 (232,979) (106,867)

Share based payment expense 15 (405,160) -

Share register expense (37,405) (32,711)

Rent expense (16,500) (19,500)

Travel expense (75,998) (18,471)

Depreciation expense (254) -

Amortisation expense 10 (65,000) -

Other expenses (52,355) (29,541)

Gain on foreign exchange 14,679 -

Loss before income tax 3 (1,132,424) (503,335)

Income tax expense 4 - -

Loss for the year 3 (1,132,424) (503,335)

Other comprehensive income:

Other comprehensive loss for the year, net of tax - -

Total comprehensive loss for the year (1,132,424) (503,335)

Total comprehensive Loss and Loss attributable to:

Members of the parent entity (1,132,424) (503,335)

Basic loss per share (cents per share) 7 (0.41) (0.20)

Diluted loss per share (cents per share) 7 (0.41) (0.20)

The accompanying notes form part of these financial statements.

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2018

22

Note 2018 2017

$ $

CURRENT ASSETS

Cash and cash equivalents 8 a 1,250,423 2,664,218

Trade and other receivables 9 56,274 1,911

Other assets 15,110 63

TOTAL CURRENT ASSETS 1,321,807 2,666,192

NON-CURRENT ASSETS

Financial assets 11 1,203,937 -

Intangible assets 10 585,000 568,917

Property, plant and equipment 3,336 -

TOTAL NON-CURRENT ASSETS 1,792,273 568,917

TOTAL ASSETS 3,114,080 3,235,109

CURRENT LIABILITIES

Trade and other payables 12 90,233 77,660

TOTAL CURRENT LIABILITIES 90,233 77,660

TOTAL LIABILITIES 90,233 77,660

NET ASSETS 3,023,847 3,157,449

SHAREHOLDERS’ EQUITY

Issued capital 13 27,142,569 25,537,263

Reserves 14 814,314 1,420,798

Accumulated losses (24,933,036) (23,800,612)

TOTAL SHAREHOLDERS’ EQUITY 3,023,847 3,157,449

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2018

23

Issued Capital

Reserves

Accumulated Losses

Total

$ $ $ $

Balance at 1 July 2017 25,537,263 1,420,798 (23,800,612) 3,157,449

Loss for the year - - (1,132,424) (1,134,424)

Other comprehensive income - - - -

Total comprehensive loss for the year - - (1,132,424) (1,134,424)

Transactions with owners, recognised directly in equity

Equity issued during the year 854,000 - - 854,000

Options issued during the year 166,052 (50,444) - 115,608

Options exercised during the year

- 51,160 - 51,160

Conversion of performance rights

607,200 (607,200) - -

Capital raising costs (21,946) - - (21,946)

Balance at 30 June 2018 27,142,569 814,314 (24,933,036) 3,023,847

Balance at 1 July 2016 25,537,263 1,420,798 (23,297,277) 3,660,784

Loss for the year - - (503,335) (503,335)

Other comprehensive income - - - -

Total comprehensive loss for the year - - (503,335) (503,335)

Transactions with owners, recognised directly in equity

Equity issued during the year - - - -

Balance at 30 June 2017 25,537,263 1,420,798 (23,800,612) 3,157,449


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CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2018

24

Note 2018 2017

$ $

CASH FLOWS FROM OPERATING ACTIVITIES

Payments to suppliers and employees (540,599) (316,582)

Payments for software platform (264,225) (278,020)

Payments for website application (81,083) -

Interest received 10,823 19,511

Receipts from customers 60,475 97,481

Net cash used in operating activities 8 b (814,609) (447,610)

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for financial assets 11 (1,189,258) -

Payment for property, plant and equipment (3,590)

Net cash used in investing activities (1,192,848) -

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issue of shares and options 615,608 -

Capital raising costs (21,946) -

Net cash provided by financing activities 593,662 -

Net decrease in cash and cash equivalents (1,413,795) (447,610)

Cash and cash equivalents at the beginning of the financial year 2,664,218 3,141,828

Cash and cash equivalents at the end of the financial year 1,250,423 2,664,218


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ANNUAL FINANCIAL STATEMENTS 30 JUNE 2018

CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

25

These consolidated financial statements cover Ookami Limited (“the Company”) and its controlled entities as a consolidated entity (also referred to as “the Group”). Ookami Limited is a company limited by shares, incorporated and domiciled in Australia. The Group is a for-profit entity. The Group’s consolidated financial statements are presented in Australian dollars, which is also the Parent’s functional currency.

The financial statements were issued in accordance with a resolution by the Board of Directors on 7 September 2018 by the directors of the Company.

The following is a summary of the material accounting policies adopted by the consolidated entity in the preparation and presentation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

Basis of preparation of the financial report a) Statement of Compliance These financial statements are general purpose financial statements which have been prepared in accordance with Australian Accounting Standards (“AASBs”) (including Australian interpretations) adopted by the Australian Accounting Standard Board (“AASB”) and the Corporations Act 2001. The financial statements and notes of the Group comply with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial statements and notes comply with International Financial Reporting Standards. b) Basis of Preparation The accounting policies set out below have been consistently applied to all years presented. Reporting Basis and Conventions The financial statements have been prepared on an accruals basis and are based on historical costs. All amounts are presented in Australian dollars unless otherwise stated.

Going Concern

These financial statements have been prepared on the going concern basis, which contemplates the continuity of normal business activities and the realisation of assets and settlement of liabilities in the normal course of business. The Directors have assessed that the Group will meet its short term business objectives over the next 12 months. The Statement of Comprehensive income shows that the Group incurred a net loss of $1,132,424 during the year ended 30 June 2018 (2017: loss of $503,335). The Statement of Financial Position shows that the Group had cash and cash equivalents of $1,250,423 as at 30 June 2018 (2017: 2,664,218). The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, nor to amounts or classification of liabilities that might be necessary should the Group not be able to continue as a going concern.

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c) Principles of Consolidation

The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 30 June 2018. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:

• Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);

• Exposure, or rights, to variable returns from its involvement with the investee, and

• The ability to use its power over the investee to affect its returns. When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

• The contractual arrangement with the other vote holders of the investee,

• Rights arising from other contractual arrangements,

• The Group’s voting rights and potential voting rights.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of comprehensive income from the date the Group gains control until the date the Group ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income (“OCI”) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

A change in ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it:

• De-recognises the assets (including goodwill) and liabilities of the subsidiary

• De-recognises the carrying amount of any non-controlling interests

• De-recognises the cumulative translation differences recorded in equity

• Recognises the fair value of the consideration received

• Recognises the fair value of any investments retained

• Recognises any surplus or deficit in profit and loss

• Reclassifies the parent’s share of components previously recognised in OCI to profit or loss or retained earnings, as appropriate, as would be required if the Group had directly disposed of the related assets or liabilities

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d) Business combination

Business combinations occur where an acquirer obtains control over one or more businesses. A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The business combination will be accounted for from the date that control is attained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to certain limited exemptions). When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent consideration arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability is remeasured in each reporting period to fair value, recognising any change to fair value in profit or loss, unless the change in value can be identified as existing at acquisition date.

All transaction costs incurred in relation to business combinations are recognised as expenses in profit or loss when incurred. The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.

e) Income Tax

Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well unused tax losses. Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity. Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.

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e) Income Tax

Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

f) Leases

Leases are classified at their inception as either operating or finance leases based on economic substance of the agreement so as to reflect the risks and benefits incidental to ownership. Operating Leases The minimum lease payments made under operating leases are charged against profits in equal installments over the accounting periods covered by the lease term where the lessor effectively retains substantially all of the risks and benefits of ownership of the leased item. The cost of improvements to or on leased property is capitalized, disclosed as leasehold improvements and amortised. Finance leases Leases which effectively transfer substantially all of the risks and rewards incidental to ownership of the leased item to the Company are capitalised at the present value of the minimum lease payments and disclosed as property, plant and equipment under lease. A lease liability of equal value is also recognised. Capitalised lease assets are depreciated over the shorter of the estimated useful life of the assets and the lease term. Minimum lease payments are allocated between interest expense and reduction of the lease liability with the interest expense calculated using the interest rate implicit in the lease and recognised directly in net profit.

g) Financial Instruments

Initial recognition and measurement

Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity becomes a party to the contractual provisions of the instrument.

Financial instruments are initially measured at fair value plus transactions costs where the instrument is not classified as at fair value through profit or loss. Transaction costs related to instruments classified as at fair value through profit or loss are expensed to profit or loss immediately. Financial instruments are classified and measured as set out below.

Classification and subsequent measurement

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. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the assets or liability, assuming the market participants acts in their economic best interests.

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(i) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost.

Loans and receivables are included in current assets, except for those which are not expected to mature within 12 months after the end of the reporting period. (All other loans and receivables are classified as non-current assets).

(ii) Financial liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost. Gains or losses are recognised in profit and loss through the amortisation process and when the financial liability is derecognised.

(iii) Financial Assets

Financial assets are classified at “fair value through profit and loss” when they are held for trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying amount included profit or loss. The net gain or loss recognised in profit or loss includes any dividend or interest earned form the financial asset and is include in the face of the profit or loss and other comprehensive income.

Fair value measurement

The Group measures certain financial instruments such as unquoted equity investments at fair value at each balance date.

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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability 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 for the asset or liability

The principal or the most advantageous market must be accessible by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

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All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period). Derivative instruments The Group does not trade or hold derivatives. Financial guarantees The Group has no material financial guarantees.

Impairment At the end of each reporting period, the Group assesses whether there is objective evidence that a financial instrument has been impaired. An impairment exists if one or more events that has occurred since the initial recognition of the asset (an incurred ‘loss event’) has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtor or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

Derecognition

Financial assets are derecognised where the contractual rights to receipt of cash flow expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset.

Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.

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h) Impairment of non-financial assets

At the end of each reporting period, the Directors assess whether there is any indication that an asset may be impaired. The assessment will include the consideration of external and internal sources of information, including dividends received from subsidiaries deemed to be out of pre-acquisition profits. If any such indication exists, an impairment test is carried out on the asset by comparing the asset’s recoverable amount, being the higher of its fair value less costs to sell and its value in use, to the asset’s carrying amount. Any excess of the asset’s carrying amount over its recoverable amount is recognised immediately in profit or loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash generating unit to which the asset belongs.

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.

i) Intangible assets

Internally developed software

Research costs are expensed as incurred. Development expenditures on an individual project are recognised as

an intangible asset when the Group can demonstrate:

• The technical feasibility of completing the intangible asset so that the asset will be available for use or 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 asset

• The ability to measure reliably the expenditure during development

• The ability to use the intangible asset generated

Costs that are directly attributable include employee costs incurred on software development. Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when development is complete and the asset is available for use. It is amortised over the period of expected future benefits. During the year, intangible assets were considered to be available for use. When an intangible asset is disposed of, the gain or loss on disposal is determined as the difference between the proceeds and the carrying amount of the asset, and is recognised in profit or loss within other income or other expenses.

j) Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits available on demand with banks with original maturity of three months or less.

k) Revenue

Revenue is measured at the fair value of the consideration received or receivable.

Rendering of services

The Group primarily generates service revenue from the following activities:

- Platform listing fees, which are recognised when the customer signs the contract; and

- Capital raising fees, which are recognised at the completion of the Company’s allocated capital raise.

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k) Revenue

In the majority of cases the services are provided under fixed price service contract. Revenue recognition relating to the provision of services is determined with reference to the stage of completion (Akela’s allocated capital raise) of the transaction at the end of the reporting period, where outcome of the contract can be estimated reliably. Stage of completion is determined with reference to the services performed to date as a percentage of total anticipated services to be performed. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent that related expenditure is recoverable.

Interest revenue

Interest revenue is brought to account on an accruals basis using the effective interest rate method and, if not received at the end of the reporting period, is reflected in the statement of financial position as a receivable.

l) Operating expenses

Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin.

m) Goods and Services Tax (GST)

Revenues, expenses, and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office (ATO).

Receivable and payables are stated inclusive of the amount of GST receivable or payable. The net amount of the GST recoverable from, or payable to, the ATO is included with other receivables and payables in the statement of financial position. Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

n) Employee Benefits

Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be settled wholly within 12 months have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than 12 months have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wages increases and the probability that the employee may satisfy any vesting requirements. Those cash flows are discounted using market yields on corporate bonds with terms to maturity that match the expected timing of cash flows attributable to employee benefits.

Equity-settled compensation

The Group operates an employee share and option plan. Share-based payments to employees are measured at

the fair value of the instruments issued and amortised over the vesting periods. The fair value of performance

right options is determined using the satisfaction of certain performance criteria (Performance Milestones). The

number of shares option and performance rights expected to vest is reviewed and adjusted at the end of each

reporting period such that the amount recognised for services received as consideration for the equity

instruments granted is based on the number of equity instruments that eventually vest. The fair value is

determined using either a Black Scholes or Monte Carlo simulation model depending on the type of share-based

payment.

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o) Provisions

Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period.

p) Equity and reserves

Share capital represents the fair value of shares that have been issued. Any transaction costs associated with the issuing of shares are deducted from share capital, net of any related income tax benefits. The option reserve records the value of share-based payments.

q) Segment Information

Identification of reportable segments

The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (the chief operating decision makers) in assessing performance and in determining the allocation of resources. The operating segments were previously identified by management based on geographical location. In respect to the Group’s current operations, the financial information presented to the chief operating decision maker is consistent with that presented in the statement of profit or loss and other comprehensive income, statement of financial position and statement of cash flows. The Group now only has one segment being, the development of software and the location of the segments assets is in Western Australia. Accordingly, all significant operating disclosures are based upon analysis of the Group as one segment. The financial results from this segment are equivalent to the financial statements of the Group as a whole.

r) Earnings per share

Basic earnings per share is calculated by dividing:

• the profit attributable to member of the parent entity, 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 (if any).

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 additional ordinary shares that would have been outstanding assuming

the conversion of all dilutive potential ordinary shares.

s) Foreign currencies

The Group’s consolidated financial statements are presented in Australian dollars, which is also the parent company’s functional currency. For each entity, the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency.

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s) Foreign currencies

Transactions and balances Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot rates at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.

Differences arising on settlement or translation of monetary items are recognised in profit or loss.

t) Critical Accounting estimates and judgements The Directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group. Significant management judgement The following are significant management judgements in applying the accounting policies of the Group that have the most significant effect on the financial statements. Capit

For personal use only2018/09/07 · 6,250,000 Options exercisable by payment of $0.02 each on or...

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