ABN: 66 000 375 048
ANNUAL REPORT
For the financial year ended
30 June 2016
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ASPERMONT LIMITED AND CONTROLLED ENTITIES 30 JUNE 2016
Annual Report
Table of Contents
Corporate Directory
Chief Executive Officer’s Report
Directors’ Report
Corporate Governance Report
Auditor’s independence report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional Information for Listed Public Companies
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Annual Report
CORPORATE DIRECTORY
Directors
Andrew Leslie Kent
John Stark
Colm O’Brien
Alex Kent
Rhoderic Whyte
Company Secretary
David Straface
Key Management Personnel
Alex Kent – Managing Director
Nishil Khimasia – Chief Financial Officer, Group
Robin Booth – General Manager Publishing
Ajit Patel – Chief Operating Officer, Group
Chris Maybury - Executive Chairman Beacon Events
Registered Office
613-619 Wellington St
Perth WA 6000
Telephone: (08) 6263 9100
Facsimile: (08) 6263 9148
Postal Address
PO Box 78
Leederville WA 6902
Solicitors
Stephen Roy Webster
11/37 Blight Street
Sydney NSW 2000
Auditors
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008
Share Registry
Advanced Share Registry Services
110 Stirling Hwy
Nedlands WA 6009
Bankers
ANZ Banking Group Limited
7/77 St Georges Terrace
Perth WA 6000
Australian Stock Exchange Limited
ASX Code: ASP
Website
www.aspermont.com
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Key points for the financial year:
FY16 Overview
FY16 has been a turnaround year for the business, reversing a four-year downtrend in Group
EBITDA. We confronted adverse market conditions which saw revenues continue to be challenged in
several areas whilst at the same time completing a large scale restructuring and cost centralization
program. Despite which we also continued to invest in our technology platform and human capital.
During this year and in line with our long term strategy, our business finally crossed over from ‘old’
media. This comes at a juncture in which many of our competitors continue to struggle in breaching
that same divide. Print is now repositioned as a premium add-on product and Aspermont is now
truly a ‘digital first’ organisation.
Continued technology investment has stimulated further improvements in our processes and
upgraded our core business model. These advances are the primary catalyst for growth in
subscription revenues to drive the underlying business model of the group.
New technology has also facilitated new product development in advertising solutions. The content
hub model launched with Caterpillar in May is a breakthrough for our business in the client
marketing global solutions packages we can offer. Our multi-platform capabilities provide the
framework for our future revenue streams in advertising.
FY16 has been a year in which our business has achieved much from extremely limited working
capital and restricted non-financial resources. The business intends to end Q1 of FY17 having
successfully completed a major capital raising which will transform the statement of financial position
and return financial stimulus to the business that is required to nurture the next set of product
innovations.
Key points to the year include:
EBITDA loss pre group adjustments of $1.1m (excluding one-off restructuring charges of $0.7m)
compared to a loss of $2.7m in FY15. Please refer to page 16 for the EBITDA reconciliation.
Group revenues reduced by circa $7.7m due to disposal of some non-core products, continued
decline in print revenues and market sensitivity on Mines and Money.
Despite revenues being 26% lower, gross margins pre overheads and group adjustments (as
shown in segment results) improved to 10% from 7% in the prior year reflecting benefits from
the digital platform and productivity improvements.
Overall digital advertising revenue was flat although all products retained by the business and
successfully moved onto the company’s new Project Horizon platform showed double digit
revenue growth.
Subscription revenues overall increased 2% despite a number of brands being discontinued and
significant disruptions in the transition process as retained products were moved onto the new
platform. As with digital advertising, all products that successfully moved on to the Project
Horizon stack exhibited double digit subscription growth.
FY16 marks the crossing point in which the speed and quantum of decline in print advertising
revenues was positively offset by the speed and quantum of growth in digital and subscriptions
revenues. With print now falling below 20% of overall group revenues, the long years of trying to
mitigate the revenue chasms left by structural decline in print are behind us.
As part of the Group’s product rationalisation strategy we disposed of our non-resources titles in
construction, environment and waste management. The brands were our last print dominated
asset base. By exiting from them we extinguished a long term debt obligation whilst also
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Chief Executive Officer’s Report
liberating considerable operational capacity. Capacities that can now be used for more productive
core product development.
Over $5.5m in run rate costs were taken out of the business this year. Those savings were
achieved through reductions in corporate overheads, back office reorganisation, process
optimisation, digital efficiencies and improved key supplier contracts.
The annual results include a prudent $6.2m intangible impairment charge related to the goodwill
recorded for the print and conferencing business.
The company is in the process of completing an aggregate $10m capital raising that will see $5m
of new cash injected, $5m of related party debt converted and the introduction of more than 100
new shareholders.
o A $3m rights issue was completed in June having 77% shareholder participation. All
directors took up their full entitlements and the 23% shortfall was fully taken up by an
underwriter
o A $2m placement to sophisticated investors is fully committed with $660K already
received; the balance being subject to approval at the forthcoming EGM
o Circa $6m related party debt conversion has also been agreed subject to shareholder
approval at the forthcoming EGM
For the first time since FY13 the company is no longer in breach of any of its debt covenants
with ANZ. The bank is supportive of the company’s capital raising and debt conversion activities.
The company’s Beacon Events subsidiary remains within an arbitration process in Hong Kong
with the minority shareholder Gainwealth. We anticipate being able to provide a further update
on this at the end of Q2.
Aspermont continues to invest in and successfully implement, new product roll outs on the Project
Horizon platform. All group publishing assets have now migrated to the new subscription systems
and further products will be rolled into the new CMS system in the first half year of next fiscal year.
All products that were transferred onto the new platform have seen strong growth in digital
advertising and subscription revenues. The latter being the key growth and engagement driver for
all the company’s other revenue streams.
We are conscious of the need to balance the forward investment requirements of new digital
products with ongoing working capital demands. We anticipate a much better cash flow
environment from a deleveraged, near debt free, business with further reductions in operational
costs and improved forward bookings over the next fiscal year resulting in improved gross profit
margins.
We are confident that the development of new digital products and tight cost controls will then
leverage our unique global products and databases to better serve the global mining community.
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Comparative year on year results for the business for the year ended 30 June 2016:
Outlook for the upcoming 2016/2017 year:
While Aspermont’s long-term business model is not necessarily tied to the mining sector, our
current revenue composition is still largely dependent on it. In terms of market expectations for this
year, the business has not budgeted for improved market conditions despite the improving picture
we are seeing in Q1. Our current revenue composition means that Aspermont is a highly leveraged
play on an upturn in the mining market. With digital cost advantages and efficiencies implemented
in FY16, market driven revenue gains will convert well to EBITDA.
The business looks to an exciting year ahead from the development of new client global marketing
products and services. Innovation and re-engineering of the subscriptions model was central to us
last year; we expect continued development in that area with a transition of focus to advertising
products this year.
Alongside product innovation the business intends to invest further in our content proposition. New
data products are set for launch this year with further expansion in the breadth and depth of our
North American coverage. Mines and Money Americas in Toronto in September is an exciting step
forward for a business that has been in the region for 200 years.
Beyond organic growth and new product development, the business will continue to focus time and
investment into knowledge capital and the organisational skills sets of the Group. Investment in
some backend infrastructure will bring further cost savings/optimisations over the year as well.
The outlook for trading conditions has different characteristics for the two business units:
Publishing
Subscriptions revenues will see further growth through process optimisation and the roll out of
our new systems.
Digital sponsorship should see further growth from product investments already undertaken and
also from the development of new content marketing solutions for our client base.
Print advertising will likely see further revenue decline as we manage the ongoing transition of
revenue to digital.
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20162015 $000$000RevenueAdvertising - Digital2,926 3,010 Advertising - Print6,544 9,820 Subscriptions4,458 4,416 Conferencing & other revenue8,608 13,012 Total segment revenue22,536 30,258 ResultSegment result2,299 2,058 Segment margin10.20%6.80%For personal use only
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Overall we expect Publishing to deliver single digit growth in 2016/17 reversing the last 3 years
of revenue contraction. This coupled with continued cost reduction should see Publishing moving
to positive EBITDA in 2016/17
o Note: - Publishing includes all of the company’s Group and Corporate costs in its
EBITDA figures
Conferencing
Events will see expansion in revenues and EBITDA from launching the inaugural Mines and
Money event in Toronto, coupled with the launch of new smaller events including Mines &
Technology which would see roll-out of this event in other regions if inaugural event in London is
successful.
Overall we anticipate a return to positive EBITDA within a range of $0.8m to $1.2 million for the
2016/17 fiscal year. This shows a significant improvement over 2015/16 EBITDA losses. We have
not budgeted for any improvement in market conditions in 2016/17.
Yours sincerely,
Alexander Kent
Managing Director
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Director’s Report
The Directors present their report on the consolidated entity (referred to hereafter as the Group)
consisting of Aspermont Limited and the entities it controlled at the end of, or during, the year
ended 30 June 2016.
Directors
The following persons were directors of Aspermont Limited during the financial year and up to the
date of this report:
Andrew L. Kent
J Stark
C O’Brien
Alex Kent
R Whyte
Principal activities
The Group’s principal activities during the year were to provide market specific content across the
Resources sectors through a combination of print, digital media channels and face to face
networking channels.
Operating results
The consolidated operating loss after tax was $6.8 million (2015: loss $9.8 million).
Dividends
No dividend has been declared for the year (2015: no dividend).
Review of operations
A review of the operations of the Group during the financial year has been set out in pages 4 to 7 of
this report.
Going Concern Disclosure and Modification to Audit Report
The group auditor has also included two qualifications in the Audit Report, a qualification in the
Report on the Remuneration Report and an emphasis of matter. The details of these matters are
as follows:
Emphasis of Matter
The Directors believe it is appropriate to prepare the financial statements on a going concern
basis as there are no matters existing to indicate that the group will be unable to manage the
matters referred to above in the next 12 months.
The group’s auditor has included an emphasis of matter paragraph within the Audit Report in
respect of the going concern. The directors’ disclosure on going concern is located in Note 2.
Recoverability of intangible assets
The group’s auditor has issued a qualification on the recoverability of $15.217m of intangible
assets. Details of this assessment are included in Note 11 and the qualification in the Audit
Report.
Disclosure of key management personnel remuneration
The Directors of the company are in dispute over the approval of remuneration to a key
management person of a $72,887 retirement fund expense. This has not been included in
post-employment benefits as disclosed in Note 21(a). Therefore, the auditor has included a
qualification on this matter in the Audit Report and Report on the Remuneration Report.
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The Directors believe it is appropriate to prepare the financial statements on a going concern basis
as there are no matters existing to indicate that the consolidated entity will be unable to manage
the matters referred to in Note 2 and above in the next 12 months.
The Group Auditor has included an emphasis of matter paragraph within the audit report in respect
of the going concern located in Note 2.
Significant changes in the state of affairs
The significant changes in the state of affairs of the Group during the financial year are outlined in
the preceding review of operations.
Events subsequent to the end of the financial year
As announced to the ASX on 18 January 2016, the Company has entered into arbitration
proceedings in this regard against Gainwealth Group Limited, the non-controlling interest
holder in Beacon Events Limited. The findings from the arbitration is expected in the second
quarter of the of the 2017 financial year.
A rights issue was completed during the financial year with gross proceeds to the Company of
$3 million from the issue of ordinary shares. In August 2016, the shortfall was placed with the
underwriter with the issue of a further 686.2 million shares and further gross proceeds of
$0.664 million.
As announced to the ASX on 23 August 2016, the Company completed a private placement of
66.4 million ordinary shares and gross proceeds of $0.66 million and on 30 September
received from shareholders further approval to increase placement by $1.3m. The company
also received approval for the conversion of related party and convertible debt to Equity
totalling $5.3 million on 30 September 2016.
Likely developments and expected results of operations
The upcoming year is expected to be one of further development in our Technology base and
business models, alongside a return to profitability for the Group.
Environmental regulations
Environmental regulations do not have any impact on the Group, and the Group is not required to
report under the National Greenhouse and Energy Reporting Act 2007.
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Information on directors
A.L Kent, AAICD Chairman and executive director
Experience and expertise
Mr Kent is an experienced business manager and corporate advisor with over 30 years of
experience in international equities and media. Mr Kent was the CEO of Aspermont Limited
from 2000 to 2005 and holds considerable knowledge of its products and the market
landscape. Mr Kent joined the Board in 1998.
Other current directorships
Mr Kent holds directorships in Magyar Mining Ltd (since 2008). Mr Kent is a member of the
Australian Institute of Company Directors.
Former directorships in last 3 years
New Guinea Energy Ltd (resigned 2014)
Special responsibilities
Chairman of the Board
Interest in shares and options
566,780,087 ordinary shares in Aspermont Limited
J Stark, AAICD Non-executive director
Experience and expertise
Mr Stark is an experienced business manager with experience and interests across various
listed and unlisted companies. Mr Stark has been a member of the Board since 2000.
Other current directorships
None
Former directorships in last 3 years
None
Special responsibilities
Member of Remuneration Committee
Member of Audit & Risk Committee
Interest in shares and options
108,044,917 ordinary shares in Aspermont Limited
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C O’Brien, BCL (Hons), AAICD Non-executive director
Experience and expertise
Mr O’Brien has in-depth management consulting and banking experience through previous
roles. At Aspermont he held the position of Group CEO from October 2005 until March 2015
and has a detailed knowledge of the products, strategy and media landscape. Mr O’Brien
joined the Board in January 2010.
Other current directorships
Magyar Mining Plc
Special responsibilities
Member of Remuneration Committee
Former directorships in last 3 years
None
Interest in shares and options
10,130,349 ordinary shares in Aspermont Limited
Alex Kent, BSc (Double Honours), Economics Accounting & Business Law Managing Director
Experience and expertise
Mr Alex Kent has over 13 years’ experience in technology and digital publishing through
previously held roles at Microsoft Corp and across the Aspermont Group. Mr Kent has been a
member of the board since 2014.
Other current directorships
Magyar Mining Ltd
Special responsibilities
Managing Director
Former directorships in last 3 years
None
Interest in shares and options
803,604 ordinary shares
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R Whyte, B.Ec., BA Independent Non-executive Director
Experience and expertise
Mr Whyte has had extensive involvement in a wide range of mining and natural resource
companies, emerging markets and the media sector over four decades, Mr Whyte was a
founding shareholder in Aspermont Limited and joined the board in 2014.
Other current directorships
Executive Chairman of EastWest Timber A.S.
Non-executive director of Valgold Resources Ltd.
Special responsibilities
None
Former directorships in last 3 years
None
Interest in shares and options
11,767,439 ordinary shares in Aspermont Limited
The above directors have been in office since the start of the financial year to the date of this report
unless otherwise stated.
Company secretary
The Company Secretary is Mr David Straface. Mr Straface was appointed to the position of
Company Secretary in July 2016. Mr Straface is a company director, advisor and lawyer with over
15 years of experience in the corporate finance industry. He is a Fellow of the Financial Services
Institute of Australasia.
Meetings of directors
The number of meetings of the Company’s Board of Directors and of each Board committee held
during the year ended 30 June 2016, and the number of meetings attended by each director were:
Full meetings of
Directors
Meetings of committees
Audit & Risk
Remuneration
A
8
8
9
9
8
B
9
9
9
9
9
A
#
#
#
#
#
B
#
#
#
#
#
A
**
0
0
**
**
B
**
0
0
**
**
A.L Kent
J Stark
C O’Brien
R Whyte
A Kent
A Number of meetings attended
B Number of meetings held during the time the director held office or was a member of the committee during the year
** Not a member of the relevant committee
# Audit matters were addressed by the entire board
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Remuneration report (Audited)
The information provided in this remuneration report has been audited as required by section 308
(3C) of the Corporations Act 2001.
The remuneration report is set out under the following main headings:
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
A
B
C
D
E-H Additional information
A) Principles used to determine the nature and amount of remuneration
The objective of the Group’s executive reward framework is to ensure reward for performance is
competitive and appropriate for the results delivered. The framework aligns executive reward with
achievement of strategic objectives and the creation of value for shareholders, and conforms with
market practice for delivery of reward. The Board ensures that executive reward satisfies the
following criteria for good reward governance practices:
competitiveness and reasonableness;
acceptability to shareholders;
performance linkage/ alignment of executive compensation;
transparency.
Alignment to shareholders’ interests:
has economic profit as a core component of plan design;
focuses on sustained growth in shareholder wealth, consisting of dividends and growth in
share price, and delivering constant return on assets as well as focusing the executive on key
non-financial drivers of value;
attracts and retains high calibre executives.
Alignment to program participants’ interests:
rewards capability and experience;
reflects competitive reward for contribution to growth in shareholder wealth;
provides a clear structure for earning rewards;
provides a recognition for contribution.
The Board has established a Remuneration Committee which provides advice on remuneration and
incentive policies and practices, and specific recommendations on remuneration packages and other
terms of employment for executive directors, other senior executives and non-executive directors.
Directors’ fees
The base remuneration was reviewed in the year and after considering the current financial
environment, the Company eliminated the directors’ fees for the current year:
Base Fees
Executive Chairman
Non-executive directors
Executive pay
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2015
nil
nil
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The executive pay and reward framework has three components. The combination of these
comprises an executive’s total remuneration.
Base Pay
This is structured as a total employment cost package which may be delivered as a combination of
cash and prescribed non-financial benefits at the executives’ discretion.
Executives are offered a competitive base pay that comprises the fixed component of pay and
rewards. External remuneration consultants provide analysis and advice to ensure base pay is set
to reflect the market for a comparable role.
Base pay for executives is reviewed annually to ensure the executive’s pay is competitive with the
market. An executive’s pay is also reviewed on promotion.
There is no guaranteed base pay increases in an executive’s contract.
Benefits
Executives receive benefits including health insurance, car parking and allowance and financial
planning services.
Superannuation
Executives are paid the statutory contribution of 9.50%. Executives may elect to sacrifice base pay
into superannuation at their discretion.
Short-term incentives (STI)
The STI annual payment is reviewed annually against a combination of earnings before interest,
taxes, depreciation and amortisation (“EBITDA”) profit targets, strategic and operational objectives.
Each executive STI is tailored to the achievement of objectives under that executive’s direct sphere
of influence. The use of profit targets ensures variable reward is only available when value has been
created for shareholders and when profit is consistent with the business plan. The annual bonus
payments are approved by the Remuneration Committee. During the current year N Khimasia
received a bonus as detailed in the remuneration table. No other executives received STI.
The Group currently does not have a policy to limit “at risk” remuneration for executives.
Long-term incentives
Long-term incentives are provided to certain employees to incentivise long-term objectives and
tenure via share options. Share options provide a non-cash incentive that aligns directors and
employees interests with those of the shareholders and are granted to motivate and retain directors
and employees over a multi-year tenure.
There were no long-term incentives issued during the current year or the prior year.
B) Details of remuneration
Amounts of remuneration
Details of the remuneration of the directors and key management personnel of the Group (as
defined in AASB 124 Related Party Disclosures) of Aspermont Limited and the Aspermont Limited
Group are set out in the following tables.
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The key management personnel of the Group are the following:
Andrew Leslie Kent – Chairman and Executive Director
Alex Kent – Managing Director
John Stark – Non-Executive Director
Rhoderic Charles Whyte – Independent Non-Executive Director
Colm O’Brien – Non-Executive Director
Ajit Patel – Chief Operating Officer, Group
Nishil Khimasia – Chief Financial Officer (appointed November 2015)
Robin Booth – General Manager Publishing
C Maybury – Executive Director Beacon Events
The following table demonstrates the Group’s performance over shareholder value during the last
five years:
The table below illustrates the link between the Group’s financial performance and the incentive
compensation amounts (including the value of share options in long term incentives) for the key
management personnel:
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20162015201420132012Profit attributable to owners of the company(6,468,480) (10,557,709) (1,117,144) 2,509,216 (258,393) Dividends paid- - - - - Share price at 30 June$0.01$0.01$0.04$0.07$0.11Return on capital employed(574.8%)(132.6%)(11.0%)23.3%(1.7%)For personal use only
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The Group has historically focused its performance measurement on the Group earnings before
interest, taxes, depreciation and amortisation and share option expense (“EBITDA”) as this best
reflects the underlying cash generating performance of the business. The reconciliation of statutory
earnings to EBITDA is as follows:
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20162015 $000$000(6,788) (10,886) Add back:Interest1,960 860 Depreciation and amortisation544 880 Impairment of receivables203 118 Impairment or gain loss of investments6,165 8,646 Operating expense for investment activities- 12 Subtract:Re-estimation of Beacon put option liability(3,387) (1,339) Other income(502) (279) Foreign exchange(363) - Net profit attributable non-controlling interest (excluding preferred dividend)359 (754) (1,809) (2,742) Profit from continuing operations before income tax expenseEBITDAConsolidatedFor personal use only
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Key management personnel of the Group and other executives of the Company and the Group:
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2016Share based paymentsLong-term employee benefitsPost employment benefitsNameCash salary or feesBonusNon monetary benefitsOptionsLong service leaveSuper-annuationTotalExecutive directorsA.L Kent (Chairman)- - - - - - - A Kent (1)305,691 - - - - - 305,691 Sub-total305,691 - - - - - 305,691 Non executive directorsJ Stark- - - - - - - C O'Brien (4)43,390 13,152 - 2,137 3,983 62,662 R Whyte- - - - - - - Sub-total43,390 - 13,152 - 2,137 3,983 62,662 Other key management personnelR Booth (1)244,553 - - - - 17,119 261,672 N Khimasia (1) (3)135,863 33,966 - - - - 169,829 A Patel (1)305,691 - - - - 30,569 336,260 C Maybury (2)310,619 - 310,619 Sub-total996,726 33,966 - - - 47,688 1,078,380 Total (Group)1,345,807 33,966 13,152 - 2,137 51,671 1,446,733 4. Non-monetary benefits comprise of vehicle and health insurance allowances. Became non-executive in Sept 2015.5. Part-time position.Short-term employee benefits1. UK executive remuneration, paid in British Pounds, have been converted to Australian Dollars at the average exchange rate over the twelve months ending 30 June 2016.2. Hong Kong executive remuneration, paid in HKD, have been converted to Australian Dollars at the average exchange rate over the twelve months ending 30 June 2016. Amount of $72,887 is in dispute in respect of post employment benefits3. Appointed November 2015.For personal use only
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Key management personnel of the Group and other executives of the Company and the Group
(continued):
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2015Share based paymentsLong-term employee benefitsPost employment benefitsNameCash salary or feesBonusNon monetary benefitsOptionsLong service leaveSuper-annuationTotalExecutive directorsA.L Kent (Chairman)97,170 - - - - 9,231 106,401 C O'Brien 282,288 - 28,573 - 5,892 26,591 343,344 A Kent (3)230,507 - - - - - 230,507 Sub-total609,965 - 28,573 - 5,892 35,822 680,252 J Stark19,054 - - - - 2,138 21,192 L.G Cross21,863 - - - - 2,077 23,940 C Nader 48,512 - - - - 4,609 53,121 R Whyte15,852 - - - - - 15,852 Sub-total105,281 - - - - 8,824 114,105 Other key management personnelR Booth (1)198,083 - - - - 15,847 213,930 M Howes (1) (3)89,208 - - - - - 89,208 J Detwiler (5)130,544 - 3,642 - - 12,098 146,284 A Patel (1)282,975 - - - - 28,298 311,273 C Maybury (2)271,850 7,923 - - - 62,425 342,198 Sub-total972,660 7,923 3,642 - - 118,668 1,102,893 Total (Group)1,687,906 7,923 32,215 - 5,892 163,314 1,897,250 4. Non-monetary benefits comprise of vehicle and health insurance allowances.5. Non-monetary benefits comprise of health insurance allowance.3. Paid to an entity on behalf of the executive.2. Hong Kong executive remuneration, paid in HKD, have been converted to Australian Dollars at the average exchange rate over the twelve months ending 30 June 2015.Short-term employee benefits1. UK executive remuneration, paid in British Pounds, have been converted to Australian Dollars at the average exchange rate over the twelve months ending 30 June 2015.For personal use only
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The relative proportions of remuneration that are linked to performance and those that are fixed
are as follows:
C) Service agreements
On appointment to the Board, all directors enter into a service agreement with the Company in the
form of a letter of appointment. The letter summarises the Board policies and terms, including
compensation, relevant to the office of the director.
Remuneration and other terms of employment for the Managing Director and other key
management personnel are formalised and reviewed by the Remuneration Committee. Each of
these agreements provides for the provision of performance-related cash bonuses, other benefits
including certain expenses and allowances. Other major provisions of the agreements relating to
remuneration are set out below.
All contracts with executives may be terminated early by either party subject to termination
payments as detailed below
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Fixed remunerationAt risk - STIAt risk - LTIName201620162016Executive directorsA.L Kent (Chairman)100%n/an/aC O'Brien - n/an/aA Kent100%n/an/aNon executive directorsJ Stark100%n/an/aR Whyte100%n/an/aOther key management personnelR Booth 100%- - N Khimasia 80%20%- A Patel 100%- n/aC Maybury 100%- n/aFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES 30 JUNE 2016
Director’s Report
A Kent Managing Director
Base compensation inclusive of salary and superannuation for the year ended 30 June 2016
is GBP 150,000 (AUD $305,691).
A Patel Chief Operating Officer
Term of agreement – ongoing commencing 23 January 2013.
Base compensation, inclusive of salary, pension contribution, benefits and certain expenses,
for the year ending 30 June 2016 of GBP 165,000. (AUD $336,260). This amount to be
reviewed annually by the remuneration committee.
Payment of a benefit on early termination by the Company, other than for gross misconduct,
equal to 6 months’ base salary.
C. Maybury Executive Director Beacon Events
Term of agreement – ongoing, commencing 21 August 2012.
Base compensation, includes salary of USD $285,000, and certain expenses from Beacon.
Other benefits including Pension arrangements are in dispute currently
R. Booth General Manager Publishing
Term of agreement – ongoing, commencing 14 April 2014.
Base compensation, inclusive of salary, pension contribution and insurance benefits for the
year ending 30 June 2016 of GBP 128,400 (AUD $261,672). This amount is to be reviewed
annually by the remuneration committee.
Payment of a benefit on termination by the Company, other than for gross misconduct,
equal to 3 months’ base salary.
N. Khimasia Chief Financial Officer
Term of agreement – ongoing, commencing November 2015.
Base compensation, bonus, inclusive of salary, pension contribution and insurance benefits
for the year ending 30 June 2016 of GBP 116,667 (AUD $169,829). This amount is to be
reviewed annually by the remuneration committee.
20
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ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES 30 JUNE 2016
Director’s Report
D) Bonus Payments
Bonuses disclosed in the table for 2016 for N Khimasia related to specific performance targets of
which 50% was achieved and the remaining not achieved forfeited. No other bonuses have been
approved for performance related to the 2016 fiscal year.
E) Options and rights held by directors and key management personnel
The numbers of options over ordinary shares in the Company held during the financial year by each
director and other key management personnel, including their personally related parties, are set
out below. All outstanding options were fully vested on the date of grant.
No other options or rights were exercised or lapsed in Aspermont Limited in 2015 and 2016.
F) Number of shares held by directors and key management personnel
The number of shares in the Company held during the financial year by each director and other key
management personnel, including their personally related parties, are set out below. There were no
shares issued during the year for the exercise of options.
No other shares were issued to key management personnel and other executives of the Company
and the Group during 2016.
21
2016Balance1 July 2015Received as RemunerationExercisedForfeitedBalance30 June 2016DirectorsA.L Kent and beneficial interests 16,000,000 - - (16,000,000) - C O’Brien and beneficial interests 4,000,000 - - (4,000,000) - ExecutivesC Maybury and beneficial interests 5,000,000 - - - 5,000,000 2016Balance1 July 2015DisposedAcquiredBalance30 June 2016DirectorsA.L Kent and beneficial interests399,924,135 - 166,855,952 566,780,087 J Stark and beneficial interests77,387,000 - 30,657,917 108,044,917 C O’Brien and beneficial interests7,150,834 - 2,979,515 10,130,349 A Kent567,250 - 236,354 803,604 R Whyte 9,306,428 (1,000,000)3,461,011 11,767,439 For personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES 30 JUNE 2016
Director’s Report
G) Loans from directors related entities
Loans to Mr A.L Kent, Mr J Stark, Mr C O’Brien and Mr C Nader and entities related to them are set
out below. The loans from Mr Stark are unsecured and the loan term expired 30 September 2014.
The liabilities are unsecured and subordinate to the secured loans from ANZ. A liability of $74,894
(2015: $75,000) is owed to a company associated with C Maybury.
22
20162,015 Andrew L. KentBeginning of year(21,114) (2,104,304) Loan repayments/ (advances)(320,685) 2,176,994 Loan conversion to ordinary shares150,000 - Interest charged (9.5% ; 2015: 9.5%)- (93,804) End of year(191,799) (21,114) J StarkBeginning of year(2,813,693) (2,708,042) Loan repayments136,631 181,988 Interest charged (9.5% ; 2015: 9.5%)(304,057) (287,639) End of year(2,981,119) (2,813,693) C NaderBeginning of year- (74,591) Loan repayments/ (advances)- 76,751 Loan conversion to ordinary shares- - Interest charged (nil ; 2015: 8.5%)- (2,160) End of year- - C O'BrienBeginning of year- - Loan repayments/ (advances)(158,082) - Loan conversion to ordinary shares- - Interest charged (nil ; 2015: nil)- - End of year(158,082) - Total End of year(3,331,000) (2,834,807) ConsolidatedFor personal use only
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Director’s Report
Convertible notes to Mr A.L Kent and Mr R Whyte and entities related to them are set out
below. The liabilities are unsecured and subordinate to the secured loans from ANZ.
Due to the activation of the ratchet feature in the convertible debt, an additional finance cost
of $1.01 million and $13 thousand on A. Kent and R Whyte was recognised. This was a total
of $1.02 million.
23
20162,015 R WhyteBeginning of year- - Loan repayments/ (advances)(18,499) - Loan conversion to ordinary shares- - Interest charged (10% ; 2015: nill)(1,665) - End of year(20,164) - Alex L. KentBeginning of year(1,389,997) - Loan repayments/ (advances)(24,409) (1,389,997) Loan conversion to ordinary shares- - Interest charged (10% ; 2015: nill)(155,414) - End of year(1,569,820) (1,389,997) Finance cost(1,026,547) Total End of year(2,616,531) (1,389,997) ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES 30 JUNE 2016
Director’s Report
H) Other transactions with directors and key management personnel
A number of directors, or their related parties, hold positions in other entities that result in them
having control or joint control over the financial or operating policies of those entities.
These entities transacted with the Group during the year. The terms and conditions of the
transactions with directors and their related parties were no more favourable than those available,
or which might reasonably be expected to be available, on similar transactions to non-key
management personnel related entities on an arm’s length basis.
The Group leases its principal office facility from Ileveter Pty Ltd, a company associated with a
director, Mr A.L Kent. The rent paid was at market rates at the time of lease inception and
amounted to $613,047 for the current year (2015: $547,000). The lease agreement has a term of
five years expiring 30 September 2017.
Magyar Mining Ltd (“Magyar”), Lahoca Resources Pte Ltd (“Lahoca”) and Mekong Mining Limited
(“Mekong”) are companies associated with Mr A. L. Kent. The consolidated entity has made
investments in Magyar, LaHoca and Mekong and those investments have been passed to Nomad
Limited Partnership in exchange for an unsecured loan. The consolidated entity has pre-paid certain
start-up and exploration expenses on behalf of Lahoca, Mekong and other unrelated projects
between 2012 and 2015. These assets were converted into an unsecured loan with Nomad Limited
Partnership in 2013. The loan amount as at 30 June 2016 is as follows
At 30 June 2016 the Company owed $46,402 (2015: $46,402) in unpaid Director Fees to current
Directors of the Company.
Remuneration Consultants
During the financial year the Group’s remuneration committee did not meet nor engage the
services of a remuneration consultant.
During the 2015 AGM a total of 1.13% voted in favour and nil voted against the remuneration
report.
This is the end of the Audited Remuneration Report.
Shares under option
Unissued ordinary shares of Aspermont Limited under option at the date of this report are as
follows:
Date of Issue
Date of Expiry
Exercise Price
31-Oct-12
30-Oct-16
15c
Number of
Options
5,000,000
24
20162015 $000$000Opening balance - - Expenses paid93 123 Impairment(93) (123) Closing balance- - ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES 30 JUNE 2016
Director’s Report
Insurance of officers
During the financial year, Aspermont Limited paid a premium to insure the directors and officers of
the Company and its Australian-based controlled entities.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings
that may be brought against the officers in their capacity as officers of entities in the Group, and
any other payments arising from liabilities incurred by the officers in connection with such
proceedings. Not included are such liabilities that arise from conduct involving a wilful breach of
duty by the officers or the improper use by the officers of their position or of information to gain
advantage for themselves or someone else to cause detriment to the Company. It is not possible to
apportion the premium between amounts relating to the insurance against legal costs and those
relating to other liabilities.
Indemnity of auditors
The Company has not, during or since the end of the financial year, given an indemnity or entered
into an agreement to indemnify, or paid insurance premiums in respect of the auditors of the
Group.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to
bring proceedings on behalf of the Company, or to 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 part
of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the
Court under section 237 of the Corporations Act 2001.
Non-audit services
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 and/or the Group are
important.
The Board of Directors has considered the position and, in accordance with advice received from
the audit committee, is satisfied that the provision of the non-audit services is compatible with the
general standard of independence for auditors imposed by the Corporations Act 2001.
The directors are satisfied that the provision of non-audit services by the auditor, as set out below,
did not compromise the auditor independence requirements of the Corporations Act 2001 for the
following reasons:
All non-audit services have been reviewed by the audit committee to ensure they do not
impact the impartiality and objectivity of the auditor.
None of the services undermine the general principles relating to auditor independence as
set out in APES 110 Code of Ethics for Professional Accountants.
During the year the following fees were paid or payable for non-audit services provided by the
auditor of the parent entity, its related practices and non-related audit firms:
25
20162015 Non-assurance services$$Tax compliance - BDO UK and HKG 6,643 7,074 Total non-assurance remuneration 6,643 7,074 For personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES 30 JUNE 2016
Director’s Report
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the
Corporations Act 2001 is set out on page 28.
This report of the directors incorporating the remuneration report is made in accordance with a
resolution of the Board of Directors.
A. Kent
Managing Director
Perth
30 September 2016
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ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES 30 JUNE 2016
Corporate Governance Report
Corporate Governance
The primary role of the Aspermont Board (the “Board”) is the protection and enhancement of long-
term shareholder value. The Board is accountable to shareholders for the performance of the
Group. It directs and monitors the business and affairs of the Group on behalf of shareholders and
is responsible for the Group’s overall corporate governance.
The company is committed to a governance framework using the Australian Securities Exchange’s
(ASX) “Principles of Good Governance and Best Practice Recommendations”.
Diversity disclosures regarding the proportion of women in the Aspermont workforce at
30 June 2016:
27
Directors andTotalTotalWomenEmployeesMenWomen%Board5 - 0.0%Senior Management5 1 16.7%Department Head9 5 35.7%Employees43 39 47.6%Total62 45 42.1%For personal use only
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY PHILLIP MURDOCH TO THE DIRECTORS OF ASPERMONT LIMITED
As lead auditor of Aspermont Limited for the year ended 30 June 2016, I declare that, to the best of
my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Aspermont Limited and the entities it controlled during the year.
Phillip Murdoch
Director
BDO Audit (WA) Pty Ltd
Perth, 30 September 2016
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN
77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK
company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under
Professional Standards Legislation, other than for the acts or omissions of financial services licensees.
For personal use only ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Consolidated Income Statement for the year ended 30 June 2016
The accompanying notes form part of these consolidated financial statements.
29
20162015 Note$000$000Revenue from continuing operations422,536 30,258 Cost of sales(12,014) (15,351) Gross profit10,522 14,907 Distribution expenses(972) (1,225) Marketing expenses(2,924) (3,255) Occupancy expenses(1,810) (1,888) Corporate and administration(5,723) (7,933) Finance costs(1,960) (860) Other expenses(2,545) (3,604) Change in fair value of investments(85) (72) Re-estimation of Beacon put option53,387 1,339 Other income41,690 279 Impairment of loan receivable5(203) (118) Impairment of intangible assets11(6,165) (8,456) Loss from continuing operations before income tax expense(6,788) (10,886) Income tax benefit/(expense) relating to continuing operations6(41) 1,082 Net loss for the year from continuing operations(6,829) (9,804) Profit/(loss) attributable to:Net profit/(loss) attributable to non-controlling interest(359) 754 Net profit/(loss) attributable to equity holders of the parent entity(6,470) (10,558) Basic and diluted loss per share attributable to the members of Aspermont Ltd24(0.89) (1.95) ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Consolidated Statement of Comprehensive Income for the year ended 30 June
2016
The accompanying notes form part of these consolidated financial statements.
30
20162015 Note$000$000Net loss after tax for the year(6,829) (9,804) Other comprehensive income/(loss)(Items that will be reclassified to profit or loss)Foreign currency translation differences for foreign operations (2,283) 2,707(Items that will not be reclassified to profit or loss)Net change in fair value of equity instruments measured at fair value through other comprehensive income- (2) Income tax benefit/(expense) relating to other comprehensive income- 1Other comprehensive income/ (loss) for the period net of tax(2,283) 2,706Total comprehensive loss for the year (net of tax)(9,112) (7,098) Total comprehensive loss for the period attributable to:Non-controlling interest(517) 154 Owners of Aspermont Limited(8,595) (7,252) ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Consolidated Statement of Financial Position as at 30 June 2016
The accompanying notes form part of these consolidated financial statements.
31
20162015 Note$000$000CURRENT ASSETSCash and cash equivalents201,795 1,645 Trade and other receivables73,734 4,303 Financial assets8- 3 TOTAL CURRENT ASSETS5,529 5,951 NON-CURRENT ASSETSFinancial assets868 68 Property, plant and equipment10155 171 Deferred tax assets63,137 2,850 Intangible assets and goodwill1117,729 25,808 TOTAL NON-CURRENT ASSETS21,089 28,897 TOTAL ASSETS26,618 34,848 CURRENT LIABILITIESTrade and other payables127,235 6,706 Income in advance135,788 5,554 Borrowings145,141 5,585 Income tax payable6373 257 TOTAL CURRENT LIABILITIES18,537 18,102 NON-CURRENT LIABILITIESBorrowings143,120 1,482 Deferred tax liabilities63,129 3,019 Provisions1595 196 Other liabilities16562 4,087 TOTAL NON-CURRENT LIABILITIES6,906 8,784 TOTAL LIABILITIES25,443 26,886 NET ASSETS 1,175 7,962 EQUITYIssued capital1756,433 54,158 Reserves(10,150) (6,862) Accumulated losses(43,905) (38,649) Parent entity interest2,378 8,647 Non-controlling interest19(1,203) (685) TOTAL EQUITY 1,175 7,962 ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Consolidated Statement of Changes in Equity for the year ended 30 June 2016
The accompanying notes form part of these consolidated financial statements.
32
Consolidated Issued Capital Accumulated Losses Other Reserves Share Based Reserve Currency Translation Reserve Financial Assets Reserve Sub-Total Non- Controlling Interest Total $000 $000 $000 $000 $000 $000 $000 $000 $000 Balance at 1 July 201449,292 (28,091) (8,053) 1,458 (3,298) (275) 11,033 (839) 10,194 Profit/(loss) for the year- (10,558) - - - - (10,558) 754 (9,804) Other comprehensive incomeForeign currency translation differences for foreign operations- - - - 3,307 - 3,307 (600) 2,707 Financial assets reserve movement- - - - - (2) (2) - (2) Income tax relating to components of other comprehensive income- - - - - 1 1 - 1 Total comprehensive income- (10,558) - - 3,307 (1) (7,252) 154 (7,098) Transactions with owners in their capacity as owners:Shares issued (net of issue cost)4,866 - - - - - 4,866 - 4,866 Balance at 30 June 201554,158 (38,649) (8,053) 1,458 9 (276) 8,647 (685) 7,962 Balance at 1 July 201554,158 (38,649) (8,053) 1,458 9 (276) 8,647 (685) 7,962 Profit/(loss) for the year- (6,470) - - - - (6,470) (359) (6,829) Other comprehensive incomeForeign currency translation differences for foreign operations- - - - (2,125) - (2,125) (158) (2,283) Total comprehensive income- (6,470) - - (2,125) - (8,595) (517) (9,112) Transactions with owners in their capacity as owners:Shares issued (net of issue cost)2,275 - - - - - 2,275 - 2,275 Transfer of option reserve on vested options- 1,214 - (1,163) - - 51 - 51 Balance at 30 June 201656,433 (43,905) (8,053) 295 (2,116) (276) 2,378 (1,203) 1,175 For personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Consolidated Statement of Cash Flows for the year ended 30 June 2016
The accompanying notes form part of these consolidated financial statements.
33
20162015 Note$000$000Cash flows from operating activitiesCash receipts from customers24,889 29,433 Cash payments to suppliers and employees(24,550) (31,745) Interest and other costs of finance paid(496) (635) Interest received2 6 Income tax paid359 (52) Net cash (used in)/ from operating activities20 (b)204 (2,993) Cash flows from investing activitiesPayments for investments(691) (137) Proceeds from sale of equity investments7 - Payments for plant and equipment(85) (28) Payment for intangible assets(125) (66) Net cash used in investing activities(894) (231) Cash flows from financing activitiesProceeds from issue of shares1,879 2,686 Share issue transaction costs(63) (88) Proceeds of borrowings512 1,697 Repayment of borrowings(950) (788) Net cash from/ (used in) financing activities1,378 3,507 Net increase/ (decrease) in cash held688 283 Cash at the beginning of the year1,645 1,416 Effects of exchange rate changes on the balance of cash held in foreign currencies(538) (54) Cash at the end of the year 20 (a)1,795 1,645 ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
1. General information
Aspermont Limited (the “Company”) is a company limited by shares incorporated in Australia
whose shares are publicly traded on the Australian Stock Exchange. The consolidated
financial statements of Aspermont Limited and it’s controlled entities (the “Group”) comprises
the Company and its subsidiaries and the consolidated entity’s interests in associates and
jointly controlled entities.
These financial statements were approved for issue by the Board of Directors on 30
September 2016.
Aspermont Limited’s registered office and its principal place of business are as follows:
Principal place of
business and registered
office
613-619 Wellington Street
PERTH WA 6000
Principal place of business
Hong Kong
Principal place of business
United Kingdom
20/F Siu On Centre
188 Lockhart Road
Wanchai, Hong Kong
Level 4, Vintners Place
68 Upper Thames Street
London, UK EC4V 3BJ
Tel: +61 8 6263 9100
Tel: +852 2219 0112
Tel: +44 (0) 207 216 6060
2. Significant accounting policies
Statement of compliance
These financial statements are general purpose financial statements that have been prepared
in accordance with Australian Accounting Standards, including Australian Accounting
Interpretations, other authoritative pronouncements of the Australian Accounting Standards
Board and the Corporations Act 2001. The Group is a for-profit entity for the purposes of
preparing the financial statements.
The financial report covers the consolidated group of Aspermont Limited and controlled
entities. Separate financial statements of Aspermont Limited, as an individual entity, are no
longer presented as a consequence of a change to the Corporations Act 2001. Financial
information for Aspermont Limited as an individual entity is included in note 3.
The financial report of Aspermont Limited and controlled entities comply with all International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board (IASB).
Basis of preparation
The financial report has been prepared on an accruals basis and is based on historical costs
modified by the revaluation of selected financial assets for which the fair value basis of
accounting has been applied.
The accounting policies set out below have been consistently applied to all years presented,
unless otherwise stated.
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ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
2. Significant accounting policies (continued)
Basis of preparation (continued)
Going concern
As at 30 June 2016, the Group had a net current liability position of $13.008 million and for
the year then ended had a loss of $6.829m and cash operating cash outflows of $204
thousand. The Group had cash on hand of $1.794 million. Included in current liabilities
$18.537 million as at 30 June 2016 are amounts owed to related parties $3.331 million, ANZ
debt of $1.565 million.
The ability of the entity to continue as a going concern is dependent on securing
additional funding through equity raising, successful conversion of the related parties
debts to equity and the re-financing of the ANZ debt in order for the Group to continue to
fund its operational activities and pay its debts as and when they fall due in the next 12
months. This will also allow the provision of working capital to invest in new products and
services to accelerate the repositioning of the business.
These conditions indicate a material uncertainty that may cast a significant doubt about the
entity’s ability to continue as a going concern and, therefore, that it may be unable to realise
its assets and discharge its liabilities in the normal course of business.
The Directors believe there are sufficient funds to meet the entity’s working capital
requirements as at the date of this report. Subsequent to 30 June 2016 a further $0.686m
was received from the rights issue and $0.66m from a private placement and external debt
was reduced by $0.435m.
The financial statements have been prepared on the basis that the entity is a going concern,
which contemplates the continuity of normal business activity, realisation of assets and
settlement of liabilities in the normal course of business for the following reasons:
Shareholder approval received on 30 September for converting all convertible debentures
of $3.129 million to equity
Shareholder approval to convert all related party debt of $3.331 million to equity.
Shareholder approval to approve $1.3 million share placement
Successful restructure of ANZ debt of $1.565 million. This will be achieved through re-
finance with ANZ or another financial institution.
Active working capital management
Achievement of positive operating cashflows from cost reduction initiatives
Continued Director support through reduction in fees or loans
The Directors believe it is appropriate to prepare the financial statements on a going
concern basis as there are no matters existing to indicate that the consolidated entity will be
unable to manage the matters referred to above in the next 12 months.
Should the entity not be able to continue as a going concern, it may be required to realise its
assets and discharge its liabilities other than in the ordinary course of business, and at
amounts that differ from those stated in the financial statements and that the financial report
does not include any adjustments relating to the recoverability and classification of recorded
asset amounts or liabilities that might be necessary should the entity not continue as a going
concern.
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ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
2. Significant accounting policies (continued)
(a) Basis of consolidation
The consolidated accounts comprise the accounts of Aspermont Limited and all of its
controlled entities, the “Group”. A controlled entity is any entity that Aspermont is
exposed to, or has the rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over the entity. The
financial statements of controlled entities are included in the consolidated accounts from
the date on which control commences until the date on which control ceases.
A list of controlled entities is contained in note 18 to the financial statements.
All inter-company balances and transactions between entities in the consolidated group,
including any unrealised profits or losses, have been eliminated on consolidation.
Where controlled entities have entered or left the economic entity during the year, their
operating results have been included from the date control was obtained or until the
date control ceased.
Non-controlling interests in the equity and results of the entities that are controlled are
shown as a separate item in the consolidated financial report.
In the parent entity the investments in the subsidiaries are carried at cost, less
impairment.
Changes in ownership interests
The Group treats transactions with non-controlling interests that do not result in a loss
of control as transactions with equity owners of the Group. A change in ownership
interest results in an adjustment between the carrying amounts of the controlling and
non-controlling interests to reflect their relative interests in the subsidiary. Any
difference between the amount of the adjustment to non-controlling interests and any
consideration paid or received is recognised in a separate reserve within equity
attributable to owners of Aspermont Limited.
When the Group ceases to have control, joint control or significant influence, any
retained interest in the entity is remeasured to its fair value with the change in carrying
amount recognised in the Statement of Profit or Loss and Other Comprehensive Income.
The fair value is the initial carrying amount for the purposes of subsequently accounting
for the retained interest as an associate, jointly controlled entity or financial asset. Any
amounts previously recognised in other comprehensive income in respect of that entity
are accounted for as if the Group had directly disposed of the related assets or liabilities.
This may mean that amounts previously recognised in other comprehensive income are
reclassified to profit or loss.
If the ownership interest in a jointly-controlled entity or an associate is reduced but joint
control or significant influence is retained, only a proportionate share of the amounts
previously recognised in other comprehensive income are reclassified to the Statement
of Profit or Loss and Other Comprehensive Income where appropriate.
(b) Cash and cash equivalents
For the purpose of the statement of cash flows, cash includes:
i. cash on hand and at call deposits with banks or financial institutions, net of bank
overdrafts; and
ii. investments in money market instruments with less than 14 days to maturity.
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ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
2. Significant accounting policies (continued)
(c) Plant and equipment
Each class of plant and equipment is carried at cost less accumulated depreciation and
impairment.
The carrying amount of plant and equipment is reviewed annually by directors to ensure
it is not in excess of the recoverable amount from these assets. An asset’s carrying
amount is written down immediately to its recoverable amount if the carrying amount is
greater than the estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying
amount. These gains and losses are included in the Statement of Profit or Loss and
Other Comprehensive Income. When revalued assets are sold, amounts included in the
revaluation reserve relating to that asset are transferred to retained earnings.
The depreciable amounts of all plant and equipment are depreciated on a diminishing
value basis over their useful lives to the economic entity commencing from the time an
asset is held ready for use.
The depreciation rates used for depreciable assets are:
Class of Fixed Asset
Plant and equipment
Depreciation Rate
13.5% - 40%
(d) Employee benefits
Provision is made for the Group’s liability for employee entitlements arising from
services rendered by employees to reporting date. Employee entitlements expected to
be settled within one year together with entitlements arising from wages and annual
leave, which will be settled after one year, have been measured at their nominal
amount. Other employee entitlements payable later than one year has been measured
at the present value of the estimated future cash outflows to be made for those
entitlements. Contributions are made by the Group to employee superannuation funds
and are charged as expenses when incurred.
(e) Financial instruments
Recognition
The Group recognises receivables on the date that they are originated. All other
financial assets are recognised initially on the trade date at which the Group becomes a
party to the contractual provisions of the instrument.
Financial assets are classified based on the objective of the Group’s business model for
managing the financial assets and the characteristics of the contractual cash flows.
The Group derecognises a financial asset when the contractual cash flows from the
asset expires, or it transfers the rights to receive the contractual cash flows such that
substantially all the risks and rewards of ownership of the financial asset are
transferred.
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ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
2. Significant accounting policies (continued)
(e) Financial instruments (continued)
The Group has the following financial assets:
Financial assets at fair value
Financial assets at fair value are non-derivative financial assets.
Financial assets at fair value are measured initially at fair value which includes
transaction costs directly attributable to the acquisition of the financial asset. They are
measured subsequently at fair value with movements in fair value being recognised in
the profit or loss, unless:
The financial asset is an equity investment, and
The Group has made an irrevocable election to present gains and losses on the
financial asset in other comprehensive income. This election has been made on an
individual equity basis.
Dividends from equity investments are included in the profit or loss regardless of
whether the election has been made to recognise movements in fair value in other
comprehensive income.
Profit or loss arising on the sale of equity investments is recognised in the profit or loss
unless the election has been made to recognise fair value movements in other
comprehensive income.
Impairment
Impairment losses on financial assets at fair value are recognised in profit or loss,
unless the election has been made to recognise movements in fair value in other
comprehensive income, in which case impairment losses are recognised in other
comprehensive income.
(f) Income Tax
The charge for current income tax expense is based on the profit for the year adjusted
for any non-assessable or disallowed items. It is calculated using the tax rates that have
been enacted or are substantially enacted by the statement of financial position date.
Deferred tax is accounted for using the balance sheet liability method in respect of
temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements. 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 is
calculated at the tax rates that are expected to apply to the period when the asset is
realised or liability is settled.
Deferred tax is credited in the statement of profit and loss and other comprehensive
income except where it relates to items that may be credited directly to equity, in which
case the deferred tax is adjusted directly against equity. Deferred income tax assets are
recognised to the extent that it is probable that future tax profits will be available
against which deductible temporary differences can be utilised.
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ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
2. Significant accounting policies (continued)
(f) Income Tax (continued)
The amount of benefits brought to account or which may be realised in the future is
based on the assumption that no adverse change will occur in income taxation
legislation and the anticipation that the economic entity will derive sufficient future
assessable income to enable the benefit to be realised and comply with the conditions of
deductibility imposed by the law.
The current income tax charge is calculated on the basis of the tax laws enacted or
substantively enacted at the end of the reporting period in the countries where the
company’s subsidiaries and associates operate and generate taxable
income.
Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts expected to be paid to the tax
authorities.
Deferred tax liabilities and assets are not recognised for temporary differences between
the carrying amount and tax bases of investments in controlled entities where the
parent entity is able to control the timing of the reversal of the temporary differences
and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to
offset current tax assets and liabilities and when the deferred tax balances relate to the
same taxation authority. Current tax assets and tax liabilities are offset where the entity
has a legally enforceable right to offset and intends either to settle on a net basis, or to
realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it
relates to items recognised in other comprehensive income or directly in equity. In this
case, the tax is also recognised in other comprehensive income or directly in equity,
respectively.
Aspermont Limited and its wholly-owned Australian subsidiaries have formed an income
tax consolidated group under the Tax Consolidation System. Aspermont Limited is
responsible for recognising the current and deferred tax assets and liabilities for the tax
consolidated group. The Group notified the ATO in April 2004 that it had formed an
income tax consolidated group to apply from July 2002.
Tax consolidation
Aspermont and its wholly-owned Australian subsidiaries are a tax consolidated group. As
a consequence, as the head entity in the tax consolidated group, Aspermont will
recognise current and deferred tax amounts relating to transactions, events and
balances of the wholly-owned Australian controlled entities in the Group in future
financial statements as if those transactions, events and balances were its own, in
addition to the current and deferred tax balances arising in relation to its own
transactions, events and balances. These tax amounts are measured as if each entity in
the tax consolidated group continues to be a standalone taxpayer in its own right.
39
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ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
2. Significant accounting policies (continued)
(g) Foreign currency
Functional and Presentation Currency
The functional currency of each of the Group’s entities is measured using the currency
of the primary economic environment in which that entity operates. The consolidated
financial statements are presented in Australian dollars which is the parent entity’s
functional and presentation currency.
Transaction and Balances
Foreign currency transactions are translated into functional currency using the exchange
rates prevailing at the date of the transaction. Foreign currency monetary items are
translated at the year-end exchange rate. Non-monetary items measured at historical
cost continue to be carried at the exchange rate at the date of the transaction. Non-
monetary items measured at fair value are reported at the exchange rate at the date
when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the
Statement of Profit or Loss or Other Comprehensive Income, except where deferred in
equity as a qualifying cash flow or net investment hedge, in which case they are
included in other comprehensive income.
Group Companies
The financial results and position of foreign operations whose functional currency is
different from the Group’s presentation currency are translated as follows:
Assets and liabilities are translated at year-end exchange rates at that reporting date.
Income and expenses are translated at average exchange rates for the period.
All resulting exchange differences arising on translation of foreign operations are
transferred directly to the Group’s foreign currency translation reserve in the
statement of financial position through other comprehensive income.
On consolidation, exchange differences arising from the translation of any net
investment in foreign entities, are recognised in other comprehensive income. When a
foreign operation is sold or any borrowings forming part of the net investment are
repaid, the associated exchange differences are reclassified to profit or loss, as part of
the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are
treated as assets and liabilities of the foreign operation and translated at the closing
rate.
(h) Investment in associates
Associates are all entities over which the Group has significant influence but not control
or joint control, generally accompanying a shareholding of between 20% and 50% of
the voting rights. Investments in associates are accounted for in the parent entity
financial statements using the cost method and in the consolidated financial statements
using the equity method of accounting, after initially being recognised at cost. The
Group’s investment in associates includes goodwill (net of any accumulated impairment
loss) identified on acquisition (refer to note 9).
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ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
2. Significant accounting policies (continued)
(h) Investment in associates (continued)
The Group’s share of its associates’ post-acquisition profits or losses is recognised in the
statement of comprehensive income, and its share of post-acquisition movements in
reserves is recognised in other comprehensive income. The cumulative post-acquisition
movements are adjusted against the carrying amount of the investment. Dividends
receivable reduce the carrying amount of the investment.
When the Group’s share of losses in an associate equals or exceeds its interest in the
associate, including any other unsecured long-term receivables, the Group does not
recognise further losses, unless it has incurred obligations or made payments on behalf
of the associate.
Unrealised gains on transactions between the Group and its associates are eliminated to
the extent of the Group’s interest in the associates. Unrealised losses are also
eliminated unless the transaction provides evidence of an impairment of the asset
transferred. Accounting policies of associates have been changed where necessary to
ensure consistency with the policies adopted by the Group.
(i) Intangible Assets
Goodwill
Goodwill and goodwill on consolidation are initially recorded at the amount by which the
purchase price for a business exceeds the fair value attributed to its net assets at date
of acquisition. Goodwill is tested annually for impairment and carried at cost less
accumulated impairment losses. Goodwill on acquisitions of subsidiaries is included in
intangible assets. Goodwill on acquisition of associates is included in investments in
associates.
Mastheads
Mastheads acquired separately are capitalised at cost and from a business combination
are capitalised at fair value as at the date of acquisition. Following initial recognition,
the cost model is applied to the class of intangible assets.
Mastheads are tested for impairment annually by the directors and where an indicator of
impairment exists ensuring that it is not in excess of the recoverable amount.
IT development and software
Costs incurred in developing products or systems and costs incurred in acquiring
software and licenses that will contribute to future period financial benefits through
revenue generation and/or cost reduction are capitalised to software and systems. Costs
capitalised include direct payroll and payroll related costs of employees time spent on
the project. Amortisation is calculated on a diminishing value basis over periods
generally ranging from 3 to 5 years.
IT development costs include only those costs directly attributable to the development
phase and are only recognised following completion of technical feasibility and where
the Group has an intention and ability to use the asset.
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ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
2. Significant accounting policies (continued)
(i) Intangible Assets (continued)
Intangible assets acquired as part of an acquisition
Intangible assets acquired as part of an acquisition of a business are capitalised
separately from goodwill if the asset is separable or arises from contractual or legal
rights, and the fair value can be measured reliably on initial recognition. Purchased
intangible assets are initially recorded at cost and finite life intangible assets are
amortised over their useful economic lives on a straight line basis.
Where amortisation is calculated on a straight line basis, the following useful lives have
been determined for classes of intangible assets:
Trademarks:
Customer & subscription contracts/relationships:
10 years
5 years
(j) Subscriptions in advance
Print magazine and internet news subscriptions are received in advance for the
subscription period applied for. Subscriptions received during the financial year for
issues expected to be published and news services to be provided after reporting date
have been deferred and will be brought to account and recognised in the accounting
period in which the respective magazines or news services subscribed for are published.
(k) Revenue and other income
Advertising and subscription revenue is brought to account and recognised in the
accounting period in which the respective magazines or news sites containing the
booked advertisements are published or displayed. All revenue is stated net of the
amount of goods and services tax (GST).
Conference revenue is brought to account and recognised in the accounting period in
which the respective event occurs. Interest revenue is recognised on a proportional
basis taking into account the interest rates applicable to the financial assets.
The Company’s share of profit from associated companies has been recognised in
accordance with AASB 128 Investments in Associates.
(l) Impairment of assets
At each reporting date, the Group reviews the carrying values of its tangible and
intangible assets to determine whether there is any indication that those assets have
been impaired. If such an indication exists, the recoverable amount of the asset, being
the higher of the asset’s fair value less costs to sell and value in use, is compared to the
asset’s carrying value. Any excess of the asset’s carrying value over its recoverable
amount is expensed to the Statement of Profit or Loss.
Impairment testing is performed annually for goodwill and intangible assets with
indefinite lives. 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.
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ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
2. Significant accounting policies (continued)
(m) Leases
Leases of fixed assets, where substantially all the risks and benefits incidental to the
ownership of the assets (but not the legal ownership), are classified as finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the
amounts equal to the fair value of the leased property or the present value of the
minimum lease payments, including any guaranteed residual values. Lease payments
are allocated between the reduction of the lease liability and the lease interest expense
for the period. Leased assets are depreciated on a straight-line basis over the shorter of
their estimated useful lives or the lease term.
Lease payments for operating leases, where substantially all the risks and benefits
remain with the lessor, are recognised on a straight line basis over the lease term.
(n) Rounding of amounts
The parent entity has applied the relief available to it under Legislative Instrument
2016/191 and accordingly, amounts in the financial statements have been rounded off
to the nearest thousand dollars, unless otherwise stated.
(o) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred.
Borrowings are subsequently measured at amortised cost. Fees paid on the
establishment of loan facilities are recognised as transaction costs of the loan to the
extent that it is probable that some or all of the facility will be drawn down. Borrowing
costs incurred for the construction of any qualifying asset are capitalised during the
period of time that is required to complete and prepare the asset for intended use or
sale. Other borrowing costs are expensed.
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 reporting date.
(p) 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. In these
circumstances, the GST is recognised as part of the cost of acquisition of the asset or as
part of an item of the expense. Receivables and payables in the statement of financial
position are shown inclusive of GST.
(q) Share-based payment transactions
The Group provides benefits to employees (including directors) whereby a component of
remuneration includes the issue of share options. The cost of these transactions with
employees is measured by reference to the fair value at the date at which they are
granted. The fair value at grant date is determined using a Black Scholes Merton option
pricing model which requires estimated variable inputs. In particular, the expected
share price volatility is estimated using the historic volatility (using the expected life of
the option), adjusted for any expected changes to future volatility. Information relating
to share based payments is set out in note 17.
The cost is recognised together with a corresponding increase in equity, over the period
in which the performance conditions are fulfilled, ending on the date on which the
relevant employees become fully entitled to the award (vesting date).
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ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
2. Significant accounting policies (continued)
(r) Critical accounting estimates and judgments
The directors evaluate estimates and judgments incorporated into the financial report
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.
Key Estimates — Impairment
The Group assesses impairment at each reporting date by evaluating conditions specific
to the Group that may lead to impairment of assets. Where an impairment trigger exists,
the recoverable amount of the asset is determined.
Value-in-use calculations performed in assessing recoverable amounts incorporate a
number of key estimates. Key assumptions used for value-in-use calculations are
disclosed in note 11(b).
Key Estimates — Useful lives
The Group assesses the useful lives at each reporting date in respect of assets within
indefinite useful lives such as the Mastheads. The assets are assessed utilising conditions
specific to the Group. This requires judgement and consideration of the assets utilisation
and continued use within the Group as well as any impairment indicators or triggers
indicating whether the recoverable amount of the Mastheads are lower than the carrying
value.
The assessment is done using value-in-use calculation and assessment regarding the
recoverable amount incorporating a number of key estimates and assumptions. Refer to
Note 11 (d) for further information.
Key Estimates — Re-estimation of put option
The amortised value is calculated based on the present value of the future estimated
liability for the purchase of the remaining 40% interest in Beacon Events Limited
("Beacon") from Gainwealth Group Limited. The principal US dollar estimated liability is
determined based on a gross profit formula of the Beacon business in fiscal 2017. The
2017 estimated liability is discounted to the present using the original discount rate (at
inception) at the reporting date and adjusted for any foreign exchange movements
between the underlying US dollar liability and the Australian dollar. The key assumption
used in the present value calculation is the estimated gross profit of the Beacon business
in fiscal 2017.
Key Estimates — Income tax
The Aspermont Group operates in multiple jurisdictions which have applicable taxation
laws. During any given year Aspermont seeks independent taxation advice and records
the impact of that advice and any tax applicable. Should there be a change to the
taxation position as a result of past transactions this may give rise to an income tax
liability or asset.
(s) Business combinations
The acquisition method of accounting is used to account for all business combinations,
including business combinations involving entities or businesses under common control,
regardless of whether equity instruments or other assets are acquired. The consideration
transferred for the acquisition of a subsidiary comprises the fair values of the assets
transferred, the liabilities incurred and the equity interests issued by the Group. The
consideration transferred also includes the fair value of any contingent consideration
arrangement and the fair value of any pre-existing equity interest in the subsidiary.
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Notes to the Consolidated Financial Statements for the year ended 30 June
2016
Acquisition-related costs are expensed as incurred. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business combination are, with limited
exceptions, measured initially at their fair values at the acquisition date. On an
acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the
acquiree either at fair value or at the non-controlling interest’s proportionate share of
the acquiree’s net identifiable assets.
The excess of the consideration transferred, the amount of any non-controlling interest
in the acquiree, and the acquisition-date fair value of any previous equity interest in the
acquiree over the fair value of the Group’s share of the net identifiable assets acquired is
recorded as goodwill. If those amounts are less than the fair value of the net identifiable
assets of the subsidiary acquired and the measurement of all amounts has been
reviewed, the difference is recognised directly in the statement of profit and loss and
other comprehensive income as a bargain purchase.
2. Significant accounting policies (continued)
(s) Business combinations (continued)
Where settlement of any part of cash consideration is deferred, the amounts payable in
the future are discounted to their present value as at the date of exchange. The discount
rate used is the entity’s incremental borrowing rate, being the rate at which a similar
borrowing could be obtained from an independent financier under comparable terms and
conditions.
(t) Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
the profit attributable to owners of the Group, 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 entitlements in ordinary shares issued during the year and
excluding treasury shares.
(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 additional ordinary shares that would have been
outstanding assuming the conversion of all dilutive potential ordinary shares.
(u) Trade receivables
Trade receivables are recognised at fair value and are generally due for settlement
within 30 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are
known to be uncollectable are written off by reducing the carrying amount directly. An
allowance account (provision for impairment of trade receivables) is used when there is
objective evidence that the Group will not be able to collect all amounts due according to
the original terms of the receivables. Significant financial difficulties of the debtor,
probability that the debtor will enter bankruptcy or financial reorganisation, and default
or delinquency in payments are considered indicators that the trade receivable is
impaired.
The amount of impairment loss is recognised in profit or loss within other expenses.
When a trade receivable for which an impairment allowance had been recognised
becomes uncollectible in a subsequent period, it is written off against the allowance
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ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
account. Subsequent recoveries of amounts previously written off are credited against
other expenses in profit or loss.
(v) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to
the end of financial year which are unpaid. The amounts are unsecured and are usually
paid within 30 days of recognition.
(w) Contributed equity
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.
2. Significant accounting policies (continued)
(x) Accounting standards adopted
The Group has adopted the following new accounting standards that have previously
been assessed for their impact on the Group’s financial report. There have been no
changes in the previous assessment of their impact which is not material to the Group:
AASB 2012-3
Assets and Financial Liabilities
Amendments to Australian Accounting Standards – Offsetting Financial
AASB 2013-3
Assets
Amendments to AASB 136 – Recoverable Disclosures for Non-Financial
AASB 2014-1
Amendments to Australian Accounting Standards (Parts A to C)
AASB 9
Financial Instruments
(y) Accounting standards issued not yet effective
Australian Accounting Standards and Interpretations that have recently been issued or
amended but are not yet mandatory, have not been early adopted by the consolidated
entity for the annual reporting period ended 30 June 2016. The consolidated entity's
assessment of the impact of these new or amended Accounting Standards and
Interpretations, most relevant to the consolidated entity, are set out below
AASB 15 Revenue from Contracts with Customers
This standard is applicable to annual reporting periods beginning on or after 1 January
2017. The standard provides a single standard for revenue recognition. The core
principle of the standard is that an entity will recognise revenue to depict the transfer of
promised goods or services to customers in an amount that reflects the consideration to
which the entity expects to be entitled in exchange for those goods or services. This
means that revenue will be recognised when control of goods or services is transferred,
rather than on transfer of risks and rewards as is currently the case under AASB 118
revenue. The consolidated entity will adopt this standard from 1 July 2017 but the
impact of its adoption is yet to be assessed by the consolidated entity.
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January
2019. AASB 16 introduces a single lessee accounting model and requires a lessee to
recognise assets and liabilities for all leases with a term of more than 12 months,
unless the underlying asset is of low value. A lessee is required to recognise a right-of-
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ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
use asset representing its right to use the underlying leased asset and a lease liability
representing its obligations to make lease payments. The consolidated entity will adopt
this standard from 1 July 2019 but the impact of its adoption is yet to be assessed by
the consolidated entity.
(z) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting
provided to the chief operating decision maker. The chief operating decision maker, who
is responsible for allocating resources and assessing performance of the operating
segments, has been identified as the Chief Executive Officer who makes strategic
decisions.
(aa) Convertible note
Convertible notes issued by the Group comprise convertible notes that can be converted
to share capital at the option of the holder or at the option of the issuer in certain
circumstances. The notes include embedded derivatives (call and/ or put options or
ratchet option) relating to the convertible note represents the option to convert to
variable number of shares in the parent entity. The company had elected upon initial
recognition of the convertible notes (including its embedded derivatives) to recognise
the whole instrument as a financial liability carried at fair value through profit or loss. On
initial recognition the fair value of the convertible note (including the fair value of facility
costs as discussed below) will equate to the proceeds received as no gain or loss on
initial recognition can be recognised per the requirements of the accounting standards
AASB139. The financial liability will subsequently be measured at fair value at each
reporting period or until settlement and fair value movements will be recognised in the
profit or loss as finance cost.
Included in the convertible note contracts entered into by the company/group are costs
associated with entering the facility such as commencement options and shares, royalty
options and collateral shares. These costs of not recognised as a share based payment
but rather as a financial liability carried at fair value through profit or loss (if it results in
variable number of shares to be issued) or equity (if number of shares to be issued is
fixed) and their value on initial recognition has been included as part of the convertible
note proceed above. Subsequently these financial liabilities will be fair valued at each
reporting period up until settlement and movements in the fair value is recognised in the
profit or loss as finance cost. Amounts recognised initially under equity will not be
remeasured subsequently.
The fair value of the financial liabilities carried at fair value through profit or loss (ie the
convertible note portion) is calculated based on the present value of estimated cashflows
taking into account credit risk profile of the company, market interest rates and share
price of the company.
The fair value for the facility costs which are the commencement options and collateral
shares are computed using an option pricing model. These valuation methodologies
take into account the exercise price, the term of the option, the Company’s share price
at reporting period and simulated future price, the expected volatility of the underlying
share price and the risk-free interest rate (based on government bonds). The expected
volatility is based upon historic volatility (based on the remaining life of the options)
adjusted for abnormal movements in the Company’s share price.
The fair value of commencement shares is based on the company share price at the date
of issue.
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Notes to the Consolidated Financial Statements for the year ended 30 June
2016
3. Parent Entity Information
The following details relate to the parent entity, Aspermont Limited, at 30 June 2016. The
information presented here has been prepared using consistent accounting policies as
presented in note 2.
All of the companies of the Group including the parent are a party to the ANZ loan
described in note 14.
48
20162015 $000$000Current assets1,118 1,624 Non-current assets20,312 28,210 Total assets21,430 29,834 Current liabilities13,364 16,586 Non-current liabilities6,891 7,251 Total liabilities20,255 23,837 Contributed equity56,433 54,158 Accumulated losses(54,318) (45,060) ReservesShare based payment reserve1,458 1,458 Financial asset reserves(276) (276) Other reserves(1,777) (3,938) Currency Translation Reserve(345) (345) Total equity1,175 5,997 Loss for the year(6,361) (763) Other comprehensive income/ (loss) for the year(2,881) 2,706 Total comprehensive income/ (loss) for the year(9,242) 1,943 For personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
4. Revenue
Amounts contained within other income is income generated through non-core activities
such as the disposal of non-core assets or entities.
5. Expenses
Profit/ (loss) before income tax includes the following specific expenses:
49
20162015 $000$000Continuing operations:Sales revenue – subscriptions and advertising13,367 17,246 Conferencing revenue9,169 13,012 22,536 30,258 Other income:Interest 3 6 Exchange gain363 - Other income1,324 273 1,690 279 ConsolidatedConsolidated20162015 $000$000(a)Expenses:Bad debts written off(15) 104 Consulting and accounting services1,024 1,063 Depreciation and amortisation of plant, equip. and intangible assets544 880 Directors’ fees12 264 Employee benefits expense8,399 14,486 Defined employee retirement contribution608 867 Foreign exchange gains/(losses)- 204 Convertible debt finance costs- - Interest expense1,919 585 Legal costs282 174 Rental expense on operating leases 1,679 1,747 Impairment of intangible assets6,165 8,646 Write-down of loan receivable203 118 20,820 29,138 Change in the amortised cost of the Beacon Put Option: Foreign exchange movements355 580 Change in estimated value(3,742) (1,919) (3,387) (1,339) Imputed interest expense13 275 (b)Remuneration of auditors of the parent entity for:Auditing or reviewing the accounts - BDO WA107 110 Auditing or reviewing the accounts - BDO HKG and UK80 61 ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
6. Taxation
50
20162015 $000$000(a)Income tax expense/ (benefit)The components of tax expense/ (revenue) comprise: Current tax(5) 14 Deferred tax46 (1,602) Derecognise capital losses- 590 Prior year adjustments- (84) 41 (1,082) The prima facie tax on profit/ (loss) before tax is reconciled to the income tax as follows:Profit/ (loss) from operations(6,788) (10,886) Income tax expense calculated at 30%(2,036) (3,266) Tax effect of permanent differences:Increase in income tax expense due to:Non-deductible expenditure2,270 1,378 Tax losses not recognised843 3,154 Write-down to recoverable amounts- - Prior year adjustments- 3 Reversal of previously recognised temporary difference866 - Decrease in income tax expense due to:Temporary difference not recognised- - Difference in overseas tax ratesDerecognise capital lossesNon-assessable income(1,759) (2,486) Effect of different tax rates of foreign operations(110) 135 Income tax expense/ (benefit) attributable to profit from ordinary activities74 (1,082) Effective tax rate-1%10%Income tax payableOpening balance257 343 Charged to income359 (71) Payments(239) (51) Currency movements(4) 36 373 257 ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
6. Taxation (continued)
51
20162015 $000$000(b)Deferred taxDeferred income tax at 30 June relates to the following:LiabilitiesIntangible assets in relation to business combinations3,129 3,010 Other- 9 Total3,129 3,019 AssetsProvisions319 362 Future benefit of carried forward losses2,766 2,292 Fair value gain adjustments52 196 Other- - Closing balance3,137 2,850 Consolidated(c)ReconciliationsIntangible assets relating to business combinationsOtherTotal$000$000$000Balance at 1 July 20143,169 38 3,207 Credited/(charged):- to profit or loss(597) (31) (628) - to equity- - - Currency movements438 2 440 Balance at 30 June 20153,010 9 3,019 Credited/(charged):- to profit or loss- (9) (9) - to equity121 - 121 Currency movements(2) - (2) Balance at 30 June 20163,129 (0) 3,129 The movement in deferred tax liabilities for each temporary difference during the year is as follows:For personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
6.
Taxation (continued)
Tax consolidation
Aspermont and its wholly-owned Australian subsidiaries are a tax consolidated group. The
accounting policy in relation to this legislation is set out in note 2 (f).
On adoption of the tax consolidation legislation, the entities in the tax consolidated group
entered into a tax sharing agreement which limits the joint and several liability of the wholly-
owned entities in the case of a default by the head entity, Aspermont Limited.
Tax losses
Unused tax losses have not been recognised as a deferred tax asset as the future recovery
of those losses is subject to the Group satisfying the requirements imposed by the regulatory
taxation authorities. The amount of unrecognised carry forward tax losses is based on
management’s assessment of their ability to meet the same business or the modified
continuity of ownership test. The benefits of these deferred tax assets not brought to
account will only be brought to account if:
future assessable income is derived of a nature and of an amount sufficient to enable
the benefit to be realised;
the conditions for deductibility imposed by tax legislation continue to be complied
with; and
no changes in tax legislation adversely affect the Company in realising the benefit.
52
Provisions Future benefit of carried forward lossesFair value gain adjustmentsTotal$000$000$000$000Balance at 1 July 2014454 1,314 700 2,468 Credited/(charged):- to profit or loss(94) 978 (502) 382 - to equity- - (2) (2) Currency movements2 - - 2 Balance at 30 June 2015362 2,292 196 2,850 Credited/(charged):- to profit or loss(43) 474 (130) 301 - to equity- - (14) (14) Currency movements- - - - Balance at 30 June 2016319 2,766 52 3,137 20162015 $000$000(d)Amounts recognised directly in equityAggregate current and deferred tax arising in the reporting period and not recognised in the statement of comprehensive income but directly debited or credited to equity:Net deferred tax - credited directly to equity107 (2) (e)Tax expense/ (income) relating to items of other comprehensive incomeFinancial assets reserve107 (2) ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
7. Receivables
Information about the Group’s exposure to interest rate risk and credit risk is provided
in note 22.
(a)
Impaired trade receivables
As at 30 June 2016 current trade receivables of the Group with a nominal value of $45,694
(2015 – $142,292) were impaired. The individually impaired receivables mainly relate to
customers who are in unexpectedly difficult economic situations.
The ageing of these receivables is as follows:
53
20162015 $000$000CurrentTrade receivables2,186 3,054 Allowance for impairment(46) (142) Other receivables604 290 2,744 3,202 Non-currentTrade receivables- - Loan - Nomad Limited Partnership1,894 1,801 Loan - Impairment(1,894) (1,801) - - Consolidated20162015 $000$000 1 to 3 months2 49 Over 3 months43 93 46 142 ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
7. Receivables (continued)
(a) Impaired trade receivables (continued)
Movements in the allowance for the impairment of receivables are as follows:
The creation and release of the allowance for impaired receivables has been included in
“other expenses” in the Statement of Profit or Loss. Amounts charged to the provision are
generally written off when there is no expectation of recovering additional cash.
(b) Past due but not impaired
As at 30 June 2016, trade receivables of $1,209,000 (2014: $1,494,000) were past due but
not impaired. Trade receivables include revenues deferred, particularly in the Events and to
a lesser degree the Publishing business. The ageing analysis of these trade debtors is as
follows:
The other classes within trade and other receivables do not contain impaired assets and are
not past due. Based on the credit history of these other classes, it is expected that these
amounts will be received when due. The Group does not hold any collateral in relation to
these receivables. Due to the nature of the Events business amounts which are greater
than 3 months are still considered recoverable until there is no expectation of recovering
the amounts.
Information about the Group’s exposure to foreign currency risk and interest rate risk in
relation to trade and other receivables is provided in note 22.
Due to the short term nature of these receivables, their carrying amount is assumed to
approximate their fair value. The maximum exposure to credit risk at the end of the
reporting period is the carrying amount of each class of receivable mentioned above.
54
20162015 $000$000 At 1 July142 128 Allowance for impairment(42) 42 Foreign exchange movement(14) - Receivables written off(40) (28) 46 142 Consolidated20162015 $000$000 1 to 3 months754 927 Over 3 months455 567 1,209 1,494 ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
8. Other financial assets
Fair value hierarchy
AASB 13 Fair Value Measurement requires disclosure of fair value measurements by level of
the following fair value measurement hierarchy:
Level 1 – the instrument has quoted prices (unadjusted) in active markets for identical
assets or liabilities,
Level 2 – a valuation technique is used which takes into account inputs other than quoted
prices included within level 1 that are observable for the asset or liability, either directly
(i.e. as prices), or indirectly (i.e. derived from prices), and
Level 3 – a valuation technique is used which takes into account inputs that are not based
on observable market data (unobservable inputs).
Valuation techniques used to derive level 3 fair values
The amount due in respect of convertible debentures per note 14 is classified as a liability
at fair value through profit or loss. The fair value of convertible notes not traded in an
active market and is determined using an internally prepared valuation utilising a
combination of inputs such as the current share price and unobservable inputs such as the
discount rate of 10% to calculate the present value of estimated future cash flows. The
Group has determined that there is a relationship between the unobservable inputs
(discount rate) and the fair value, but do not consider it to be material unless there is a
change in the terms and conditions of the convertible note. During the financial year, the
ratchet feature embedded in the convertible note was activated due to the capital raising.
This change in the value of the note was calculated by using a black-scholes model. A key
input was the use of the volatility of 84%. The liability is classified as level 3 in the fair
value hierarchy due to the use of unobservable inputs.
Transfers
During the year ended 30 June 2016, there were no transfers of financial instruments
between level 1 and 2 of the fair value hierarchy. There were also no transfers into or out
of level 3 during the period.
Fair value of financial instruments not measured at fair value.
Due to their short-term nature, the carrying amounts of current receivables, current trade
and other payables and current interest-bearing liabilities is assumed to approximate their
fair value.
Information about the Group’s exposure to price risk is provided in note 22.
55
20162015 $000$000CurrentListed equity shares at fair value through profit or loss (i) #- 3 - 3 Non – currentListed equity shares at fair value through other comprehensive income (i) #- - Unlisted equity shares at fair value through other comprehensive income (ii) #- - Unlisted equity shares at fair value through other comprehensive income (iii) #68 68 68 68 ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
8. Other financial assets (continued)
9. Other assets
(a)
56
Equity investments held at year end:20162015 $000$000Fair Value - Level 1Excalibur Mining Ltd- 3 - 3 Fair Value - Level 2- - - - Fair Value - Level 3 (1)Private Media Group Pty Ltd68 68 68 68 (1) Cost approximates fair valueConsolidated20162015 $000$000Prepayments990 1,101 990 1,101 ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
9. Other assets (continued)
(b) Investments accounted for using the equity method
Summarised financial information of associates
The Group’s share of the results of its principal associates and its aggregated assets
(including goodwill) and liabilities are as follows:
* In June 2014 an exit agreement was signed to wind up the joint venture. 100% of the
investment in the joint venture has been written down.
10. Plant and equipment
57
OwnershipInterest Assets Liabilities Revenues Profit/ (Loss) $000$000$000$0002016Kondinin Rural Joint Venture50%- - - - - - - - 2015Kondinin Rural Joint Venture*50%- - - (117) - - - (117) 20162015 $000$000Plant and equipment – at cost1,840 2,202 Accumulated depreciation(1,687) (2,033) 153 169 Equipment under finance lease – at cost105 105 Accumulated depreciation(103) (103) 2 2 Total plant and equipment155 171 ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
10. Plant and equipment (continued)
(b) Movements in carrying amounts
Movement in the carrying amounts for each class of property, plant and equipment
between the beginning and the end of the current financial year.
58
ConsolidatedPlant and equipmentLeased plant and equipmentTotal$000$000$000Gross carrying amountBalance at 1 July 20141,852 105 1,957 Additions29 - 29 Currency movements72 - 72 Disposals- - - Balance at 30 June 20151,953 105 2,058 Additions87 - 87 Currency movements(9) - (9) Acquisition of subsidiary- - - Disposals(191) - (191) Balance at 30 June 20161,840 105 1,945 Accumulated DepreciationBalance at 1 July 2014(1,609) (101) (1,710) Depreciation expense(111) (2) (113) Currency movements(64) - (64) Acquisition of subsidiary- - - Disposals- - - Balance at 30 June 2015(1,784) (103) (1,887) Depreciation expense(93) - (93) Currency movements7 - 7 Acquisition of subsidiary- - - Disposals183 - 183 Balance at 30 June 2016(1,687) (103) (1,790) Net book valueAs at 30 June 2015169 2 171 As at 30 June 2016153 2 155 For personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
10. Plant and equipment (continued)
(c) Leased plant and equipment
The parent entity leases assets under a number of finance lease agreements. At 30 June
2016, the net carrying amount of leased plant and equipment was $2,000 (2015: $3,956).
The leased equipment secures lease obligations.
11. Intangible assets
During the year an analysis was performed in respect of the Purchased Mastheads. It was
noted that due to the brand recognition and reorganisation of the Print and Online divisions
that the Purchased Mastheads are an integral part of the restructured position. As a
consequence of the restructure and appraisal of the organisation that the previous
impairment was no longer applicable in and has been reversed.
59
ConsolidatedPurchased mastheadsOther acquired assets$000$000$000$000$000Gross carrying amountBalance at 1 July 201418,635 3,044 10,582 2,388 34,649 Additions- 68 - - 68 Currency movements2,764 104 983 - 3,851 Balance at 30 June 201521,399 3,216 11,565 2,388 38,568 Additions- 125 - - 125 Currency movements(1,443) (107) (1,005) - (2,555) Disposals- - (5) (1,113) (1,118) Balance at 30 June 201619,956 3,234 10,555 1,275 35,020 Accumulated AmortisationBalance at 1 July 2014- (2,104) - (1,344) (3,448) Amortisation expense(345) (423) (768) Impairment(6,132) - (1,990) (334) (8,456) Currency movements- (86) (2) - (88) Balance at 30 June 2015(6,132) (2,535) (1,992) (2,101) (12,760) Amortisation expense- (250) - (201) (451) Impairment(8,047) - - - (8,047) Reversal of impairment- - 1,882 - 1,882 Currency movements761 106 110 (5) 972 Disposals- - - 1,113 1,113 Balance at 30 June 2016(13,418) (2,679) - (1,194) (17,291) Net book valueAs at 30 June 201515,267 681 9,573 287 25,808 As at 30 June 20166,538 555 10,555 81 17,729 GoodwillSoftwareTotalFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
11. Intangible assets (continued)
(a) Impairment tests for intangible assets
In the light of current global economic circumstances and as a result of the continuing
decline in revenue for the Group in both the Publishing and Conferencing segments of the
business, the Company has reviewed the Intangible assets for impairment.
Intangible assets are allocated to the Group’s cash generating units (CGUs) identified
according to business segment. The recoverable amount of each CGU is based on value-in-
use calculations using business plans and estimated terminal values for each CGU.
The Print and Online CGUs previously identified for the allocation of Intangible Assets have
in the current reporting period combined into the Publishing CGU. This is in line with the
ongoing development and strategy of the Group’s business following the restructure during
the year.
60
20162015TotalTotal$000$000GoodwillConferencing5,661 5,660 Conferencing impairment(4,049) (1,401) Publishing (print & online)16,118 16,118 Publishing impairment (print)(9,374) (4,731) Foreign exchange reserve(1,818) (379) 6,538 15,267 SoftwareCost 3,233 3,216 Accumulated amortisation (2,678) (2,535) 555 681 Purchased mastheads Mastheads (print & online)12,279 12,285 Mastheads impairment (print)- (1,992) Foreign exchange reserve(1,724) (720) 10,555 9,573 Other Intangible AssetsAcquired intangible assets1,275 2,388 Acquired intangible assets impairment(100) (334) Accumulated amortisation(1,094) (1,767) Segment transfer- - 81 287 Total Intangible Assets17,729 25,808 For personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
11. Intangible assets (continued)
Intangibles are allocated to the CGU’s as follows:
(b) Key assumptions used for value-in-use calculations
Cash flow forecasts were used based on the EBITDA for each Cash Generating Unit as per
the Group’s latest five-year business plan approved by the board on the following basis:
Year 1 cash flows - Based on current management forecast in line with current
trending.
Year 2-5 cash flows:
A revenue decline has been assumed for printed products businesses as
management expect a cyclical downturn and structural change to continue.
Assumptions have been made in line with past performance and management’s
expectation of market development,
Revenue growth of 10% is assumed in the digital businesses based on market
maturity of established products, continued roll-out and introduction of new
products and services through product extensions and continued channel
development,
61
20162015TotalTotal$000$000Publishing28,450 32,269 Cumulative impairment(13,233) (11,349) 15,217 20,920 Conferencing6,561 6,290 Cumulative impairment(4,049) (1,401) 2,512 4,888 Total Intangible Assets17,729 25,808 20162015Discount rate Discount rate Conferencing8.7%8.7%Publishing13.9%11.3%For personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
Continued growths in subscriptions – these assumptions are in line with current
industry trends and management’s expectation of market
performance,
development.
A lower expense growth as a result of the digital platform relative to the growth
in revenues as the business continues to scale,
Expansion in Conferencing revenues from launch of Mines & Money events in
new geographies as well as seeding smaller new events
Expenses expected to decrease by $2.027m in year 1 before stabilising in year 2
based on restructuring initiatives which have already produced a cost saving
trend. Future savings are expected to continue in line with the current trend. The
cut in costs are the driver for the cash flow forecast growth in EBITDA
Long Term Growth Rate – a terminal value of growth into perpetuity of year 5 cash flows
equivalent to 7 times multiple for Publishing and 4 times for Conferencing using the
discount rate.
Each of the above factors is subject to significant judgement about future economic
conditions and the ongoing structure of the publishing and digital industries. Specifically,
the Directors note that the extent and duration of the structural change in print advertising
is difficult to predict. The Directors have applied their best estimates to each of these
variables but cannot warrant their outcome.
The discount rates used reflect specific risks relating to the relevant segments and the
countries in which they operate. The increase in the rate for Publishing in this financial
year reflects the change in capital mix in that segment.
These assumptions have been used for the analysis of each CGU within the business
segment. Management determined budgeted EBITDA margin based on past performance
and its expectations for the future. If any of these assumptions were to change this could
affect the carrying amounts of the intangible assets.
Impact of a reasonably possible change in key assumptions
The calculations are sensitive to changes in key assumptions as set out below:
Publishing
The recoverable amount of the CGU would equal the carrying amount if the key
assumptions were to change as follows:
Discount rate – increase from 13.9% to 16.9%,
Year 1 to 5 cash flow forecasts – reduction of 11% EBITDA year on year,
Terminal value – reduction of 16%.
Costs – If costs are not cut by $1.3m in year 1 and $1.3m in year 2
Conferencing
The recoverable amount of the CGU would equal the carrying amount if the key
assumptions were to change as follows:
Discount rate – increase from 8.7% to 29.9%,
Year 1 to 5 cash flow forecasts – reduction of 47% EBITDA year on year,
Terminal value – No terminal value.
62
For personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
(c) Amortisation charge
The amortisation charge for the business combinations of Kondinin Information Services Pty
Ltd (Kondinin) was $200,554 during 2016 (2015: $422,985) and Waste Management and
Environment Media Pty Ltd (WME) was disposed of during the year for no cash
consideration in lieu of the payable to the directors of WME for $200K. The total gain for
the disposal included in other income totals $510,000 included in Note 4.
(d) Mastheads
The Mastheads support the brand acquired which has been publishing for a significant
period of time (circa 100 years) and although content is distributed both in print and digital
format, both content is driven off the mastheads which have not changed and the same
brand content is marketed. There is no reason for these mastheads not be used
indefinitely given the brand recognition and market position.
12. Trade and other payables
Information about the Groups’ exposure to risk is provided in note 22.
Due to the short-term nature of these payables, their carrying value is assumed to
approximate their fair value.
13. Income in advance
63
20162015 Current$000$000Unsecured LiabilitiesTrade payables2,348 2,245 Sundry creditors and accrued expenses4,771 4,187 Annual leave payable116 274 7,235 6,706 Consolidated20162015 $000$000CurrentOpening balance5,554 7,194 Net movement during the year234 (1,640) 5,788 5,554 Non-CurrentOpening balance- 267 Net movement during the year- (267) - - ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
Current income in advance relates to subscription, advertising and event revenue received
prior to services rendered. Non-current income in advance relates to long term grant
funding received in advance.
64
For personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
14. Borrowings
The carrying amount of the Group's current and non-current borrowings approximates the fair
value.
a) The current external party loan is with the Australian and New Zealand Banking
Corporation (ANZ) and is secured by registered company charges and fixed and floating
charges over the assets of the consolidated entity. The terms of the current facility
expire on the next annual review date which is 31 March 2017.
The Company is in regular communications with ANZ to restructure the facility. The
bank is supportive of the Company’s capital raising activities. There are no matters
existing to indicate that the Company will be unable to successfully restructure the
facility. The Company is no longer in breach of its covenants with the bank and is a
significant improvement when covenants were in breach over the last few years.
Refer to Note 22(c) for details on liquidity risk.
b) Finance lease liabilities are secured by the asset leased.
c) Loans from related parties are unsecured at interest rates of 9.5%. Repayment of these
loans is subject to limitations and subordinated to the ANZ facility debt.
d) Non – Current loans represent the liability in respect of convertible debentures issued
during the year. The principal terms of the convertible debentures include:
The debentures mature in June 2020,
The debentures carry annual interest at the higher of 10% or BBSW + 5%,
Holders have the option, after December 2015, to exchange a debenture for:
o an ordinary share in the Company for a price of the lower of $0.0175 or the share
issue price for any future capital raising before the maturity of the debentures, and
o an additional option with each share obtained in the conversion, to acquire an
ordinary share in the Company at $0.03 within five years from the debenture
conversion date.
During the year, the convertible loans were revalued reflecting the recent rights issue
price at $0.01 and the revaluation resulted in an increase of $1.2m in value of the
loan and associated $1.2m expense was taken into the Statement of Profit or Loss for
the year.
e) Information about the Groups’ exposure to interest rate risk is provided in note 22.
65
20162015 $000$000CurrentUnsecured loans from external parties245 - Secured loans from external parties1,565 2,285 Loans from related parties (see note 21(b))3,331 2,908 Payable for acquisition of WME- 392 5,141 5,585 Non - CurrentSecured LiabilitiesLoans advanced for convertible debt (see note 14 (d))3,120 1,482 3,120 1,482 ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
15. Provisions
16. Other liabilities
A put and call option was entered into with the non-controlling shareholder of Beacon Events
Limited covering their 40% interest. The future discounted amount adjusted for foreign
currency is estimated at $562 thousand (2015: $ 4.01 million) which is recorded as a liability
of the Group and a provision for purchase of the non-controlling interest in the equity section.
The liability is discounted using the Aspermont bank loan rate of 7.62% and for the duration
of the option the interest will be amortised until the option is extinguished. For the year
ended 30 June 2016 interest of $12,705 (2015: $275,057) was recognised.
The liability for the purchase of the minority interest in Beacon is calculated based on a US
dollar gross profit formula for the estimated fiscal 2017 gross margin of the Beacon
business. This amount is then discounted to the current reporting date using the Aspermont
borrowing rate and adjusted for any foreign exchange movements between the underlying US
dollar liability and the Australian dollar. This is due for settlement 1 July 2017. The reduction
in the value is attributed to the performance of the conferencing business in the current year.
66
20162015 $000$000CurrentLong service leave entitlements- - Non - CurrentLong service leave entitlements95 196 Consolidated20162015 $000$000Liability in respect of Beacons put and call optionOpening balance 3,937 5,000 Imputed interest expense13 275 Foreign exchange movements354 1,187 Change in estimated value(3,742) (2,525) Closing balance of the liability562 3,937 Other non-current liabilities- 150 Total non-current liabilities562 4,087 ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
17. Issued capital
Ordinary shares participate in dividends and the proceeds on winding up of the parent
entity in proportion to the number of shares held. At shareholders’ meetings each ordinary
share is entitled to one vote when a poll is called, otherwise each shareholder has one vote
on a show of hands.
(b) Options
The establishment of the Executive Option Plan was approved by the directors in April
2000. The Executive Option Plan is designed to retain and attract skilled and experienced
board members and executives and provide them with the motivation to make the Group
successful. Participation in the plan is at the Board’s discretion.
The exercise price of options issued will be not less than the greater of the minimum value
set by the ASX Listing Rules and the weighted average closing sale price of the Company's
shares on the ASX over the five days immediately preceding the day of the grant, plus a
premium determined by the directors.
When shares are issued pursuant to the exercise of options, the shares will rank equally
with all other ordinary shares of the Company.
No options were granted under the plan during the year. The table below summaries
options in issue for the Consolidated and parent entity:
67
20162015 20162015 ##$000$000Fully paid ordinary shares 958,700,907 724,918,019 56,433 54,158 Ordinary sharesAt the beginning of the reporting period724,918,019 238,710,493 54,158 49,292 Shares issued during the year:Rights issue233,782,888 238,710,493 2,368 2,387 Shares issued as part of debt/equity conversion (see note 21(b))226,748,700 - 2,268 Private placement of fully paid ordinary shares20,748,333 - 299 Share issue costs- - (93) (88) At reporting date958,700,907 724,918,019 56,433 54,158 ConsolidatedConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
17. Issued capital (continued)
Of the above options, 21,250,000 expired on 30 October 2015 and the remaining
5,000,000 expire 30 October 2016.
The weighted average share price during the financial year was 0.9 cents (2015:
2.11cents).
The weighted average remaining contractual life of options outstanding at the end of the
financial year was 0.33 years (2015: 0.53 years).
(c) Reserves
The nature and purpose of the reserves are as follows:
Share based reserve
The share-based payments reserve is used to recognise the grant date fair value of options
issued to employees but not yet exercised.
Currency translation reserve
Exchange differences arising on translation of the foreign controlled entity are taken to the
currency translation reserve, as described in note 2. The reserve is recognised in profit or
loss when the net investment is disposed of.
Financial assets reserve
The financial assets reserve recognises the gains and losses in fair value for those financial
assets not held for trading and wherein an irrevocable election has been made to recognise
fair value changes in other comprehensive income.
Other reserve
The put and call option reserve represents a provision for the purchase on the non-
controlling interest in Beacon Events Limited.
(d) Capital risk management
The Group’s objectives when managing capital are to safeguard their ability to continue as
a going concern, so that they can continue to provide returns for shareholders and benefits
for other stakeholders and to maintain an optimal capital structure to reduce the cost of
capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of
dividends paid to shareholders, return capital to shareholders, issue new shares or sell
assets to reduce debt.
68
Balance at start of the year NumberGranted during the year NumberExercised during the year NumberLapsed during the year NumberBalance at end of the yearNumberVested and exercisable at end of the year NumberWeighted Average Exercise Price201626,250,000 - - (21,250,000) 5,000,000 5,000,000 15c201526,900,000 - - (650,000) 26,250,000 26,250,000 15cFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
17. Issued capital (continued)
(d) Capital risk management (continued)
The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net
debt (borrowings and trade and other payables less cash and cash equivalents) divided by
total capital (equity). Further information regarding the liquidity and capital risk maintained
by the Group is disclosed in Note 22 (c).
The gearing ratios at 30 June 2016 and 2015 were as follows:
69
20162015 $000$000Total borrowings15,496 13,773 Less: cash and cash equivalents(1,795) (1,645) Net debt13,701 12,128 Total equity 1,175 7,962 Total capital14,876 20,090 Gearing ratio92%60%ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
18. Particulars in relation to controlled entities
70
Name of entity20162015%%Parent entity:Aspermont LimitedNSWControlled entities:Resourceful Events Pty Ltd NSWOrd100100Corporate Intelligence & Communications Pty LtdWAOrd100100Kondinin Information Services Pty LtdWAOrd100100Aspermont Media LimitedUKOrd100100Aspermont (Hong Kong) LtdHKGOrd100100Aspermont Brazil LtdBrazilOrd100100Beacon Events LimitedBVIOrd6060Beacons Events LtdHKGOrd6060Resourceful Events LtdBVIOrd6060Resourceful Events LtdHKGOrd6060Resourceful Events LtdUKOrd6060Resourceful Australia Pty LtdNSWOrd6060Ethical Beacon LtdBVIOrd6060Ethical Beacon LtdHKGOrd6060Aspermont Beacon Live Events LtdBVIOrd6060Aspermont UK Limited UKOrd6060Mines and Money Events LimitedCaymanOrd6060Beacon Conference & Exhibition Services (Beijing) LtdPRCOrd6060Economic Entity InterestPlace of Incorp.Class of shareFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
19. Non-controlling interests
The Group’s subsidiary Beacon Events Limited has a material non-controlling interest (NCI)
as disclosed in note 18. The following table summarises information relating to that non-
controlling interest, before any intra-group eliminations:
71
20162015 $000$000NCI percentage40%40%Summarised statement of financial positionCurrent assets2,549 2,596 Non-current assets10,728 10,692 Current liabilities(5,764) (5,702) Non-current liabilities(5,735) (4,776) Net Assets1,778 2,810 Revenue8,485 11,806 Profit after income tax expense(636) 304 Other comprehensive income(396) (1,500) (1,032) (1,196) Summarised statement of cash flowsCash flows from operating activities585 (637) Cash flows from investing activities(34) 321 Cashflows from financing activities (excluding NCI dividends)- - NCI dividends paid- - Net increase/ (decrease) in cash and cash equivalents551 (316) Other financial informationNet profit/(loss) attributable to non-controlling interest(359) 754 Accumulated non-controlling interest(1,203) (685) Loans to/(from) non-controlling interest- (73) Consolidated Beacon Events LimitedSummarised statement of profit or loss and other comprehensive incomeFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
20. Cash flow information
Non-cash investing and financing activities was immaterial during the year ended 30
June 2016 and 30 June 2015.
72
20162015 $000$000(a)Reconciliation of cash and cash equivalentsCash at the end of the financial year as shown in the Statement of Cash Flows is reconciled to items in the Statement of Financial Position as follows:Cash at bank and on deposit1,795 1,645 1,795 1,645 (b)Reconciliation of operating profit/ (loss) after tax to net cash from operating activitiesProfit/ (loss) after income tax(6,829) (9,804) Non-cash flows in profit/ (loss)Depreciation543 880 Impairment of loan receivable- 118 Impairment of intangible assets6,165 8,456 Unrealised gain on disposal of investments768 72 Non-cash movement on put option liability(3,375) (1,064) Non cash items1,441 (630) Change in assets and liabilities:Decrease in receivables(397) 1,918 Increase in creditors and accruals268 205 (Decrease) in unearned revenue658 (2,422) (Decrease)/ Increase in provisions(208) (25) (Decrease) in income taxes payable119 (125) (Decrease) in deferred taxes payable1,051 (572) Net cash (used in)/ from operating activities 204 (2,993) ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
Key management personnel and related parties disclosures
(a) Key management personnel compensation
Detailed remuneration disclosures are provided in the audited remuneration report on
pages 12 to 23 of the Directors’ Report.
(b) Liabilities and loans from director related entities
Detailed loan movements are disclosed in the audited remuneration report on pages 12 to
23 of the Directors’ Report. Conversion of debt into ordinary shares is further disclosed at
note 17.
(c) Convertible debt with key management personnel and director related entities
Detailed convertible debt movements are disclosed in the audited remuneration
report on pages 13 to 24 of the Directors’ Report. Conversion of debt into ordinary
shares is further disclosed at note 17.
73
20162015 Short-term employee benefits1,392,925 1,728,044 Post-employment benefits51,671 163,314 Long-term employee benefits2,137 5,892 Share based payments- - 1,446,733 1,897,250 Consolidated20162015 Unsecured loansBeginning of year2,834,807 4,886,938 Loan advances1,928,800 1,128,162 Loan repayments(1,586,664) (1,296,159) Loan conversion to ordinary shares(150,000) (2,267,736) Interest charged at 9.5% (2015: 9.5%)304,057 383,603 End of year3,331,000 2,834,807 Consolidated20162015 Unsecured loansBeginning of year1,389,997 - Loan advances222,409 1,389,997 Loan repayments(179,501) - Loan conversion to ordinary shares- - Interest charged at 10% (2014: nil)157,079 - Finance charge arising from ratchet feature1,026,547 End of year2,616,530 1,389,997 ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
21. Key management personnel and related parties disclosures (continued)
(d) Other transactions with key management personnel and director related entities
Transactions between key management personnel are on normal commercial terms and
conditions no more favourable than those available to other parties unless otherwise
stated.
The Group leases its principal office facility from Ileveter Pty Ltd, a company associated
with a director, Mr A.L Kent. The rent paid was at market rates at the time of lease
inception. The lease agreement has a term of five years expiring 30 September 2017.
Magyar Mining Ltd (“Magyar”), Lahoca Resources Pte Ltd (“Lahoca”) and Mekong Mining
Limited (“Mekong”) are companies associated with Mr A. L. Kent. The consolidated entity
has made investments in Magyar, LaHoca and Mekong and those investments have been
passed to Nomad Limited Partnership in exchange for an unsecured loan. The consolidated
entity has pre-paid certain start-up and exploration expenses on behalf of Lahoca, Mekong
and other unrelated projects between 2012 and 2015. These assets were converted into an
unsecured loan with Nomad Limited Partnership in 2013. The loan has now been fully
impaired at 30 June 2015. See note 7 and the table below:
The consolidated entity has loaned Magyar $93,000 impairing $93,000 during 2016 (2015:
$67,920).
The minority shareholder in Beacon Events Limited is Gainwealth Group Limited
(“Gainwealth”). Mr Maybury and Mr Kirwin are Directors of Gainwealth and have declared
no controlling or beneficial interest in Gainwealth.
At 30 June 2016 the Company owed $46,402 (2015: $46,402) in unpaid Director Fees to
current Directors of the Company.
74
20162015 Rental expense for principal offices613,047 547,295 Consolidated20162015 $000$000Opening balance - - Expenses paid93 123 Impairment(93) (123) Closing balance- - ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
22. Financial risk management
In the normal course of its operations, the consolidated entity is exposed to a variety of
financial risks, including market risk, credit risk and liquidity risk.
The consolidated entity’s overall risk management focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects on the financial
performance of the business. The consolidated entity does not use derivative financial
instruments such as foreign exchange contracts to hedge certain risk exposures. The
consolidated entity uses different methods to measure different types of risk to which it is
exposed. These methods include sensitivity analysis in the case of interest rate, foreign
exchange and other price risks and ageing analysis for credit risk.
Risk management is carried out by the management team within the parameters thought
prudent by the Audit & Risk Committee of the Board.
(a) Market risk
(i) Foreign exchange risk
The consolidated entity operates internationally and is exposed to foreign exchange risk
arising from various currency exposures, primarily with respect to the Hong Kong dollar,
United Kingdom pound and US dollar and to a lesser extent the Euro.
Foreign exchange risk arises from future commercial transactions and recognised assets
and liabilities that are denominated in a currency that is not the consolidated entity’s
functional currency. The risk is measured using sensitivity analysis and cash flow
forecasting.
The consolidated entity has approximately 28% of its revenues and business activities in
Hong Kong and 21% in the United Kingdom pound functional currency entities. The
remainder is in Australian dollar functional currencies. The United Kingdom, Hong Kong and
Australian operations have small amounts of US Dollar, Euro and Brazilian Real revenue and
expense transactions in their operations. The United Kingdom pound and Hong Kong dollar
results are then translated into the Australian dollar for consolidated reporting in Australian
dollars.
Management has instituted a policy requiring group companies to manage their foreign
exchange risk against their functional currency. The group companies are required to bring
significant foreign currency transactions to the attention of the central finance function for
evaluation, if they occur.
In July 2012 the Group contributed its worldwide events business to Beacon Events Limited
(“Beacon”) in exchange for 60% of the equity interest in Beacon. The agreement includes
an option for the non-controlling shareholders of Beacon to sell their 40% interest in
Beacon to Aspermont in 1 July 2017 based on a formula of gross profit. This liability is in
US dollars and therefore the Australian dollar value of the liability rises and falls with the
underlying value of the US dollar.
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ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
22. Financial risk management (continued)
A 10% strengthening/weakening of the Australian dollar against the following currencies at
30 June 2016 and 2015 would have increased/(decreased) profit and loss by the amounts
shown in the following table. The analysis assumes that all other variable, in particular
interest rate remain constant.
(a) Market risk
The consolidated entity has revenues and resulting trade and other receivables in non-
functional currencies as follows:
(i) Foreign exchange risk
Based on the financial instruments held by the consolidated entity as at the reporting date,
the sensitivity of the consolidated entity’s profit/(loss) after tax for the year and equity at
the reporting date to movements in the Australian dollar to US dollar and Australian dollar
to Euro exchange rates was:
Had the Australian dollar weakened/strengthened by 5% against the US dollar with all
other variables remaining constant, the consolidated entity’s profit after tax would have
been $288,529 lower/higher (2015: $134,000 lower/higher).
Had the Australian dollar weakened/strengthened by 5% against the Euro with all other
variables remaining constant, the consolidated entity’s profit after tax would have been
$31,479 lower/higher (2015: $28,000 lower/higher).
(ii) Equity price risk
The consolidated entity is not exposed to a material equity securities price risk arising from
investments classified on the statement of financial position as financial assets measured at
fair value. Investments in equity securities are approved by the Board on a case-by-case
basis.
76
20162015$000$000GBP(156) (55) HKD(64) 30 USD56 394 Profit or LossUSDEURUSDEUR$000$000$000$000Financial assets661 83 334 74 661 83 334 74 20162015Trade and other receivablesFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
22. Financial risk management (continued)
(iii) Cash flow and interest rate risk (continued)
The consolidated entity’s main interest rate risk arises from short and long-term
borrowings.
Borrowings at variable rates expose the consolidated entity to cash flow interest rate risk
and borrowings at fixed interest rates expose the consolidated entity to fair value interest
rate risk.
The consolidated entity’s secured bank borrowings as well as finance lease liabilities and
related party loans are all currently at fixed interest rates.
The following table summarises the variables underlying the sensitivity of the consolidated
entity’s financial assets and liabilities to interest rate risk:
The consolidated entity has and intends to continue to reduce its borrowings, so cash
balances are not accumulated and there is little sensitivity to cash deposit rates. As the
current interest rates are fixed, increases/ decreases to interest rates have no immediate
impact on the consolidated entity’s profit after tax.
(b) Credit Risk
Credit risk is the risk that a counterparty will not complete its obligations under a financial
instrument resulting in a financial loss for the consolidated entity. Credit risk is managed
co-operatively by the finance function and operations for customers, including receivables
and committed transactions and at the consolidated entity level for credit risk arising from
cash and cash equivalents, deposits with banks and financial institutions.
The consolidated entity does not generally obtain collateral or other security to support
financial instruments subject to credit risk. As the profile of the revenue comprises a very
large number of small customers, the Group accepts some amount of credit risk but has
historically experienced no significant loss.
77
Consolidated entityWeighted average interest rateBalanceWeighted average interest rateBalance$000$000Financial assets0.12%1,795 0.39%1,645 Financial liabilitiesBank loan7.00%1,565 7.50%2,285 9.50%3,331 9.50%2,908 Finance lease liabilities- 245 0.00%- Put and call option7.68%562 7.62%3,937 Convertible notes10.00%- 10.00%- 20162015Cash and cash equivalentsRelated party borrowingsFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
22. Financial risk management (continued)
(b) Credit Risk (continued)
All cash balances are on deposit with banks that have S&P Long Term credit ratings of A+
in the UK and Hong Kong and AA- in Australia.
The consolidated entity’s total capital is defined as the shareholders’ net equity plus net
borrowings, and amounted to $10.0 million at 30 June 2016 (2015: $15.0 million). The
objectives when managing the economic entity’s capital is to safeguard the business as a
going concern, to maximise returns to shareholders and to maintain an optimal capital
structure in order to reduce the cost of capital.
The consolidated entity’s total capital is defined as the shareholders’ net equity plus net
borrowings, and amounted to $10.0 million at 30 June 2016 (2015: $15.0 million). The
objectives when managing the economic entity’s capital is to safeguard the business as a
going concern, to maximise returns to shareholders and to maintain an optimal capital
structure in order to reduce the cost of capital.
(c) Liquidity and capital risk
The consolidated entity does not have a target debt/equity ratio, but has a policy of
maintaining a flexible financing structure so as to be able to take advantage of investment
opportunities when they arise.
The consolidated entity’s liquidity position is managed to ensure sufficient liquid funds are
available to meet its financial obligations in a timely manner. The consolidated entity
manages liquidity risk by continuously monitoring forecast and actual cash flows and
ensuring that the consolidated entity has the ability to access required funding. The
consolidated entity has historically maintained backup liquidity for its operations and
currently maturing debts through its financial asset portfolio.
The Group contributed its worldwide events business to Beacon Events Limited (“Beacon”)
in exchange for 60% of the equity interest in Beacon in July 2012. The agreement includes
an option for the non-controlling shareholders of Beacon to sell their 40% interest in
Beacon to Aspermont in 2017 based on a formula of gross profit. The current estimate of
that discounted future amount is $0.6 million (adjusted for foreign currency movements)
which is recorded as a liability of the Group (see note 16) and a provision for purchase of
the non-controlling interest in the equity section.
The consolidated entity reported on two financial covenants relating to the bank financing
facility. There were a Debt to EBITDA (earnings before interest, taxes, depreciation and
amortisation) ratio and an Interest Cover Ratio tested on a rolling twelve-month basis (see
note 14). The consolidated entity was in breach of its covenants throughout the financial
year up until a deed of forbearance was signed on 30 June 2016. This agreement does not
include covenant compliance requirements. However, the facility of $1.565 million is due
and payable by March 2017.
The following tables analyse the consolidated entity’s financial liabilities into maturity
groupings based on the remaining period from the reporting date to the contractual
maturity date. As amounts disclosed in the table are the contractual undiscounted cash
flows including future interest payments, these balances will not necessarily agree with the
amounts disclosed on the statement of financial position.
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ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
22. Financial risk management (continued)
(c) Liquidity and capital risk (continued)
Consolidated entity as at 30 June 2016:
The proportion of borrowings is expected to be repaid through the conversion of related
party loans. Refer to Note 26 on expected conversion of related party debt.
Consolidated entity as at 30 June 2015:
Interest payments are included in the borrowing amounts above and are projected using
interest rates applicable at 30 June 2016 and 2015. As the bank borrowings are subject to
fixed interest rates, future interest payments will not be affected by market changes.
79
Less than 6 months6 to 12 monthsBetween 1 and 2 yearsBetween 2 and 5 yearsTotal Contractual CashflowsCarryingAmount$000$000$000$000$000$000Non-derivatives5,342 - - - 5,342 5,342 Borrowings7,607 654 - - 8,261 8,261 Put and call option- - 562 - 562 562 12,949 654 562 - 14,165 14,165 Trade and other payablesLess than 6 months6 to 12 monthsBetween 1 and 2 yearsBetween 2 and 5 yearsTotal Contractual CashflowsCarryingAmount$000$000$000$000$000$000Non-derivatives4,766 - - - 4,766 4,766 Borrowings754 6,313 - - 7,067 7,067 Put and call option- - - 4,565 4,565 3,937 5,520 6,313 - 4,565 16,398 15,770 Trade and other payablesFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June
2016
22.
Financial risk management (continued)
(d) Financial assets and liabilities by category
The financial instruments consist mainly of deposits with banks, accounts receivable and
payable, bank loans, related party loans and leases. Investments accounted for using the
equity method are excluded from the information provided below:
The fair value of cash and cash equivalents, trade and other receivables and trade and
other payables is considered to be a reasonable approximation of their fair value due to
their short-term nature. The fair value of borrowings as at the reporting date is considered
to be a reasonable approximation of their fair value.
80
Consolidated entityWeighted average interest rateBalanceWeighted average interest rateBalance$000$000Financial assets0.12%1,795 0.39%1,645 Financial liabilitiesBank loan7.00%1,565 7.50%2,285 9.50%3,331 9.50%2,908 Finance lease liabilities- 245 0.00%- Put and call option7.68%562 7.62%3,937 Convertible notes10.00%- 10.00%- 20162015Cash and cash equivalentsRelated party borrowingsFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June 2016
23. Segment information
The economic entity primarily operates in the media publishing industry as well as in
conferencing and investments, within Australia and in the United Kingdom.
Segment Reporting:
81
2016PublishingConferencingInvestmentsTotal$’000$’000$’000$’000RevenueAdvertising - Digital2,926 - - 2,926 Advertising - Print6,544 - - 6,544 Subscriptions4,458 - - 4,458 Conferencing & other revenue- 8,608 - 8,608 Total segment revenue13,928 8,608 - 22,536 ResultSegment result1,475 823 - 2,299 Impairment of intangible assets(3,603) (2,562) - (6,165) Corporate overheads(7,874) (7,874) Unallocated items:Depreciation(306) (36) - (342) Amortisation(201) - - (201) Other income2,149 Re-estimation of Beacon put option3,387 Interest(41) Loss for year before income tax(6,788) Segment assets15,217 2,512 - 17,729 Unallocated assets:Cash1,794 Deferred tax asset3,137 Other assets3,958 Total assets26,618 Liabilities11,796 5,004 - 16,800 Unallocated liabilities:Provision for income tax373 Deferred tax liabilities3,129 Borrowings5,141 Total liabilities25,443 For personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June 2016
82
2015PublishingConferencingInvestmentsTotal$’000$’000$’000$’000RevenueAdvertising - Digital3,010 - - 3,010 Advertising - Print9,820 - - 9,820 Subscriptions4,416 - - 4,416 Conferencing & other revenue6 13,006 - 13,012 Total segment revenue17,252 13,006 - 30,258 ResultSegment result1,516 542 2,058 Impairment of intangible assets(7,055) (1,401) - (8,456) Corporate overheads(3,027) (3,027) Depreciation(425) (33) - (458) Amortisation(423) - - (423) Unallocated items:Other income279 Interest(860) Loss for year before income tax(10,886) 30 June 2015Segment assets23,303 7,050 - 30,353 Unallocated assets:Cash1,645 Deferred tax asset2,850 Total assets34,848 Liabilities8,004 4,602 3,937 16,543 Unallocated liabilities:Provision for income tax257 Deferred tax liabilities3,019 Borrowings7,067 Total liabilities26,886 For personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June 2016
Segment information (continued)
Reconciliation of reportable segment profit or loss:
Description of segments:
Operating segments are reported in a manner consistent with the internal reporting provided to
the chief operating decision maker. The chief operating decision maker has been identified as
the Chief Executive Officer who makes strategic decisions.
In line with the ongoing development and strategy of the Group’s trading business, the
reporting segments have in the current reporting period has been reduced into two broad global
categories, being Publishing (a combination of the Print and Digital segments used previously)
and Conferencing.
The segments derive revenue from the following products and services:
The Publishing segment derives subscription, advertising and sponsorship revenues from
traditional print publications across a number of trade sectors including the mining, contracting,
energy and resources sector as well as from internet based media which includes the
development and maintenance of websites and daily news services covering various sectors
including mining, energy, construction and mining longwalls.
The Conferencing segment derives revenues from running events and holding conferences in
various locations and across a number of sectors. Advisory fees, general investment income,
fair value gains/losses on share investments held are disclosed under the Investments
segment.
Segment revenue and expenses:
Segment revenue and expenses are accounted for separately and are directly attributable to the
segments.
Inter-segment transfers:
There are no significant inter-segment transactions at this time.
Segment revenue arising country of domicile and other geographic locations are:
83
20162015 $000$000RevenueAustralia8,660 11,407 All other geographical locations13,876 18,851 Total segment revenue22,536 30,258 For personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June 2016
24. Earnings/ (loss) per share (EPS)
84
20162015 $000$000(a)Basic loss per share (cents per share)(0.89) (1.95) (b) Diluted loss per share (cents per share) (0.89) (1.95) (c)Loss used in calculating earnings per shareLoss attributable to the ordinary equity holders of the company used in calculating basic and diluted earnings per share(6,470) (10,558) (d)Weighted average number of shares used as the denominatorWeightedaveragenumberofordinarysharesoutstandingduringtheyearusedincalculationofbasicanddilutedearningspershare726,839,522 541,245,799 Options- - Weightedaveragenumberofordinarysharesoutstandingduringthe year used in calculation of diluted earnings per share726,839,522 541,245,799 Optionsgrantedtoemployeesundertheemployeeoptionschemeareconsideredtobepotentialordinarysharesandareincludedinthedeterminationofdilutedearningspersharetotheextenttheyaredilutive.Detailsrelatingtotheoptionsareset out in note 17. ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Notes to the Consolidated Financial Statements for the year ended 30 June 2016
25. Capital and leasing commitments
The Group has operating lease commitments relating to offices in Perth, Sydney, London
and Hong Kong with these expiring within six months to three years. The other operating
lease commitment is expiring in three years and is for photocopier equipment in Perth.
26. After reporting date events
As announced to the ASX on 18 January 2016, the Company has entered into arbitration
proceedings in this regard against Gainwealth Group Limited, the non-controlling interest
holder in Beacon Events Limited. The findings from the arbitration is expected in the
second quarter of the of the 2017 financial year.
A rights issue was completed during the financial year with gross proceeds to the
Company of $3 million from the issue of ordinary shares. In August 2016, the shortfall was
placed with the underwriter with the issue of a further 686.2 million shares and further
gross proceeds of $0.664 million.
As announced to the ASX on 23 August 2016, the Company completed a private
placement of 66.4 million ordinary shares and gross proceeds of $0.66 million and on 30
September received from shareholders further approval to increase placement by $1.3m.
The company also received approval for the conversion of related party and convertible
debt to Equity totalling $5.3 million on 30 September 2016.
27. Contingent Liabilities
The Group is not aware of any other contingent liabilities and unrecorded commitments at
the date of this report that would significantly affect the operations or state of affairs of
the Group.
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20162015 $000$000Finance lease commitmentsPayable – Minimum lease payments Not later than 12 months- - Between 12 months and 5 years- - - - Minimum lease payments- - Less future lease charges- - Present value of minimum lease payments- - Operating lease commitmentsNon-cancellable operating leases contracted for but not capitalised in the financial statements : Not later than 12 months1,480 1,844 Between 12 months and 5 years151 966 1,631 2,810 ConsolidatedFor personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES 30 JUNE 2016
Directors’ Declaration
In the directors’ opinion:
1. the financial statements and notes set out on pages 34 to 85 are in accordance with
the Corporations Act 2001, including:
a) complying with Australian Accounting Standards, the Corporations Regulation
2001 and other mandatory professional reporting requirements; and
b) giving a true and fair view of the consolidated entity’s financial position as at 30
June 2016 and of its performance for the financial year ended on that date; and
2. there are reasonable grounds to believe that the Company will be able to pay its debts
as and when they become due and payable; and
Note 2 confirms that the financial statements also comply with International Financial
Reporting Standards as issued by the International Accounting Standards Board.
The directors have been given the declarations by the chief executive officer and chief
financial officer required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
A. Kent
Director
Perth
30 September 2016
86
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Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR’S REPORT
To the members of Aspermont Limited
Report on the Financial Report
We have audited the accompanying financial report of Aspermont Limited, which comprises the
consolidated statement of financial position as at 30 June 2016, the consolidated income statement,
the consolidated statement of comprehensive income, the consolidated statement of changes in equity
and the consolidated statement of cash flows for the year then ended, notes comprising a summary of
significant accounting policies and other explanatory information, and the directors’ declaration of the
consolidated entity comprising the company and the entities it controlled at the year’s end or from
time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101
Presentation of Financial Statements, that the financial statements comply with International
Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the company’s
preparation of the financial report that gives a true and fair view in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by the directors, as
well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our qualified audit opinion.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for
the acts or omissions of financial services licensees
For personal use only
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which
has been given to the directors of Aspermont Limited, would be in the same terms if given to the
directors as at the time of this auditor’s report.
Basis for Qualified Opinion
Recoverability of intangible assets
Included in Aspermont Limited’s consolidated statement of financial position as at 30 June 2016 are
intangible assets of $17,729,298. Of this amount $15,217,070 is attributable to the Publishing cash
generating unit upon which an impairment assessment has been undertaken in accordance with AASB
136 Impairment of Assets. The details of this assessment are included in Note 11. This assessment
relies on the forecast of future cash flows which we have been unable to assess the reasonableness of.
Due to the change in Aspermont Limited’s business model and the significance of a number of key
assumptions used in the impairment assessment, we were unable to satisfy ourselves as to the
appropriateness and reliability of the forecast of future cash flows that was included in the impairment
model as at 30 June 2016. Therefore, we were unable to obtain sufficient appropriate audit evidence
about the carrying value of the intangible assets attributable to the publishing cash generating unit.
Consequently, we were unable to determine whether adjustments, if any, to the carrying value of
intangible assets in the statement of financial position and associated impairment loss in the income
statement are necessary. Our audit opinion has been modified accordingly.
Disclosure of key management personnel remuneration
The Directors of the company are in dispute over the approval of remuneration to a key management
person of a $72,887 retirement fund expense. This has not been included in post-employment benefits
as disclosed in Note 21(a). Due to the dispute, we were unable to obtain sufficient appropriate
evidence to verify the completeness or existence of this remuneration.
Consequently, we were unable to determine whether adjustments, if any, to key management
personnel disclosures are necessary. Our audit opinion has been modified accordingly.
Qualified Opinion
In our opinion, except for the possible effects of the matters described in the Basis for Qualified
Opinion paragraphs:
(a)
the financial report of Aspermont Limited is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2016
and its performance of the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b)
the financial report also complies with International Financial Reporting Standards as disclosed
in Note 2.
For personal use only
Emphasis of Matter
Without modifying our opinion further, we draw attention to Note 2 in the financial report which
describes the conditions which give rise to the existence of a material uncertainty that may cast
significant doubt about the consolidated entity’s ability to continue as a going concern and therefore
the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal
course of business.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 13 to 24 of the directors’ report for the
year ended 30 June 2016. The directors of the company are responsible for the preparation and
presentation of the Remuneration Report in accordance with section 300A of the Corporations Act
2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit
conducted in accordance with Australian Auditing Standards.
Basis for Qualified Opinion
The Directors of the company are in dispute with a key management person over the approval of a
$72,887 retirement fund contribution as disclosed in the 30 June 2016 Remuneration Report. This
amount has not been included in the remuneration disclosure in the Remuneration Table for the year
ended 30 June 2016. Due to the dispute we were unable to obtain sufficient appropriate evidence to
verify the completeness or existence of this remuneration.
Consequently we were unable to determine whether adjustments, if any, to a key management
person’s remuneration as disclosed in the Remuneration Report are necessary. Our audit opinion has
been modified accordingly.
Qualified Opinion
In our opinion, except for the possible effects of the matter described in the Basis of Qualified Opinion
paragraph, the Remuneration Report of Aspermont Limited for the year ended 30 June 2016 complies
with section 300A of the Corporations Act 2001.
BDO Audit (WA) Pty Ltd
Phillip Murdoch
Director
Perth, 30 September 2016
For personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Additional Information for Listed Public Companies (as at 21 September 2016)
The following additional information is required by the Australian Securities Exchange
Limited in respect of listed companies:
a) Shareholding
Ordinary Share Capital
958,700,907 (2015: 724,918,019) shares are held by 455 (2015: 353) individual
holders. All issued ordinary shares carry one vote per share.
Distribution of Shareholders Number
Category (size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
0
Ordinary shares
2016
2015
47
19
54
98
137
355
48
20
58
97
130
353
The number of shareholdings held with less than marketable parcel is 189 (2015:192).
b) Share Options (Unquoted)
Number of
Options
5,000,000
Number of
Holders
1
Exercise
Price
15c
Date of Expiry
30 October 2016
c) Company Secretary
The name of the Company Secretary is Mr David Straface.
d) Principal Registered Office
The address of the principal registered office in Australia is
613-619 Wellington Street, Perth, WA 6000
Ph +61 8 6263 9100
e) Register of Securities
The register of securities is held at the following address:
Advanced Share Registry
110 Stirling Highway, Nedlands, WA 6009
89
For personal use only
ASPERMONT LIMITED AND ITS CONTROLLED ENTITIES
Additional Information for Listed Public Companies (as at 21 September 2016)
f) Stock Exchange Listing
Quotation has been granted for all of the ordinary shares of the Company on all
Member Exchanges of the Australian Securities Exchange Limited under the
symbol ASP.
g) Substantial Shareholders
Name
Number of Ordinary
fully paid shares held
% Held of
Issued Ordinary
Capital
1 Mr. Andrew Kent and
beneficial interests
2 Mr. John Stark and beneficial
interests
566,780,087
59.10%
108,044,917
11.15%
h) 20 Largest Shareholders – Ordinary shares
90
NameNumber of Ordinary Fully Paid Shares Held% Held of Issued Ordinary Capital1DRYSDALE INVESTMENTS LIMITED 325,329,709 33.93 2ILEVETER PTY LTD 146,224,275 15.25 3BLUE SEA INVESTMENT HOLDINGS PTY LTD 81,679,228 8.50 4ALLAN DALE REAL ESTATE PTY LTD 71,959,584 7.51 5MR JOHN STARK & MRS JULIE STARK 25,857,000 2.70 6GINGA PTY LTD 24,083,334 2.51 7BLACKCOURT (NSW) PTY LTD 21,250,000 2.22 8GLACIER MEDIA INC 17,274,634 1.80 9YARANDI INVESTMENTS PTY LTD 15,846,316 1.65 10ANNIS TRADING LIMITED 13,546,875 1.41 11DEBUSCEY PTY LTD 11,739,368 1.22 12CITICORP NOMINEES PTY LIMITED 10,917,512 1.14 13UCAN NOMINEES PTY LTD 10,067,712 1.05 14NPV (WA) SECURITIES PTY LTD 7,675,100 0.80 15ALLAN DALE REAL ESTATE PTY LTD 7,083,333 0.74 16A & C GAL INVESTMENTS PTY LIMITED 7,007,225 0.73 17MR ROBERT MILLER 6,962,706 0.73 18AUSTRALIAN EXECUTOR TRUSTEES LIMITED 6,464,418 0.67 19B F A PTY LTD 5,000,000 0.52 20J P MORGAN NOMINEES AUSTRALIA LIMITED 4,823,307 0.50 820,791,636 85.59% For personal use only