ACN 167 320 470
ANNUAL REPORT
FOR THE YEAR ENDED 30 JUNE 2017
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Annual Report
For The Year Ended 30 June 2017
Contents
Chairman's Letter
Joint MD/CEO Letter
Director's Report
Auditor's Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to The Financial Statements
Director's Declaration
Independent Auditor's Report
Additional Information for Listed Public Companies
Corporate Directory
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Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Chairman's Letter
Dear shareholders,
On behalf of the Board of Directors of Skydive the Beach Group Limited, I am delighted to present Skydive the Beach Group
Limited’s (“Group”) Annual Report for the 12 months ending 30 June 2017.
The Group achieved significant progress, and revenue and profit growth, both organically and through major acquisitions:
•
•
•
•
•
•
•
•
•
Revenue of $89.566M, an increase of 53% over the prior year.
Net Profit after tax of $9.482M, an increase of 33% over the prior year.
Earnings before interest, taxes, depreciation and amortisation of $20.988M an increase of 55.6% over the prior year.
Acquisition of Skydive Wanaka Limited, bringing the number of drop zones in New Zealand to three.
Acquisition of Performance Aviation Limited in New Zealand, allowing the Group to bring in-house all its Group aircraft
maintenance in New Zealand.
Two major acquisitions in Far North Queensland: Raging Thunder Pty Ltd and Reef Magic Cruises Pty Ltd, together
adding white water rafting, hot air ballooning, canyoning, sea kayaking, Great Barrier Reef cruises and associated reef
activities to the Group’s growing suite of tourism adventure activities.
Completion of an over-subscribed capital raising of $19.6M.
Execution of a Banking Facility Agreement with National Australia Bank Limited.
Payment of a fully franked dividend of $0.01 per share (totalling $3.963M) for the year ending 30 June 2016 and
declaration of a dividend of $0.01 per share (totalling $4.348M) for the year ending 30 June 2017.
Skydive’s achievements are a result of the commitment and enthusiasm of our wonderful staff and our partnerships with our
trading partners.
The significant expansion of the Group’s adventure tourism activities is to be recognised in the proposed change of the listed
company’s name to Experience Co. Limited (ASX: EXP).
We remain grateful to all our shareholders for their continued support and look forward to a continuation of the Group’s success
in FY2018.
Yours sincerely
William J Beerworth
Chairman
1
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Joint MD and CEO Letter
Dear shareholders,
FY2017 was a very exciting year, not just because of the Group’s outstanding financial success, but because we have made a
substantial strategic move beyond tandem skydiving into adventure tourism through the acquisition of Raging Thunder
Adventures and Reef Magic Cruises in Cairns. This followed the Group’s continued expansion into the New Zealand adventure
tourism market with the acquisition of Skydive Wanaka.
It has always been our ambition to capture a significant proportion of the domestic and international adventure tourism market
in Australia, New Zealand and beyond.
Our four key strategic priorities to drive future growth were and remain:
•••• Acquisitions
•••• Diversification
••••
••••
Synergy and Efficiency
Start-Ups
In addition to our financial success in FY2017, we are now well positioned in the adventure tourism segment, and this will
continue to be a major focus of our activities.
During the year, we also focussed on our internal organisation and human capital, and we now have an effective and efficient
group of executives, staff and partners committed to the next stage of our growth.
We recommend the adoption of the listed company’s proposed new name of Experience Co. Limited because it encapsulates
what the Group now provides our customers.
We are sincerely grateful to the large dedicated team of individuals in our organisation who have made the Group such a financial
and operational success this year.
We are also most grateful to our shareholders who provide the support and capital to propel our growth and momentum.
Yours sincerely
Anthony Boucaut
Managing Director
Anthony Ritter
Chief Executive Officer
2
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Directors Report
Your directors present their report on the consolidated entity (referred to herein as the Group) consisting of Skydive the Beach Group Limited and its controlled
entities for the financial year ended 30 June 2017.
General Information
Directors
The following persons were directors of Skydive the Beach Group Limited during or since the end of the financial year up to the date of this report:
William Beerworth
Anthony Boucaut
Anthony Ritter
John Diddams
Colin Hughes
Particulars of each Director's experience and qualifications are set out later in this report.
Principal Activities
The principal activities of the Group during the period was the provision of adventure tourism and leisure experiences to the public, predominantly tandem skydiving.
On 31 October 2016 the Group acquired Raging Thunder Adventures*, an adventure eco-tourism company, located in Far North Queensland, adding white water
rafting, hot air ballooning, canyoning, sea kayaking and tours to the Great Barrier Reef to the company's adventure tourism portfolio.
On 1 May 2017 the Group acquired Reef Magic Cruises Pty Ltd, an adventure eco-tourism company, located in Far North Queensland, adding outer Great Barrier Reef
experience, including snorkelling, diving, reef scenic helicopter flights, remedial massages, whale watching, glass bottom boat and semi-submersible tours, to the
company's adventure tourism portfolio.
There were no other significant changes in the nature of the consolidated group's principal activities during the financial year, other than as stated above.
* "Raging Thunder Adventures" is Raging Thunder Pty Ltd and its controlled entities.
Operating Results and Review of Operations
As at 30 June 2017, Skydive the Beach Group Limited operated 18 skydiving drop zones in Australia and 3 in New Zealand. In Australia, the skydiving drop zones are
across New South Wales, Queensland, Victoria and Western Australia. The three New Zealand skydiving drop zones are located in Queenstown, Glenorchy and
Wanaka.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) *
Less: Depreciation and amortisation
Less: Finance costs
Profit before tax
Income tax expense
Net profit for the year after tax
Year ended
30-Jun-17
$'000
Year ended
30-Jun-16
$'000
20,988
13,457
(6,165)
(3,599)
(1,255)
13,568
(669)
9,189
(4,086)
(2,031)
9,482
7,158
* EBITDA is a financial measure which is not prescribed by Australian Accounting Standards (“AAS”) and represents the profit under AAS adjusted for specific non-
cash and significant items. The directors consider EBITDA to reflect the core earnings of the consolidated entity. A reconciliation between EBITDA and profit after
income tax for the financial year ended 30 June 2017 is included above.
The EBITDA for the year ended 30 June 2017 increased by 56.0% when compared to the year ended 30 June 2016. When comparing the EBITDA for the 12 months
to 30 June 2017 set out below is the number of months trading from major acquisitions year on year:
Skydive Queenstown Limited and its associated entities purchased on 30 October 2015
Skydive Wanaka Limited purchased on 01 July 2016
Raging Thunder Adventures purchased on 31 October 2016
Reef Magic Cruises Pty Ltd purchased on 1 May 2017
30-Jun-17
30-Jun-16
12 months
8 months
12 months
8 months
2 months
NIL
NIL
NIL
3
Significant Changes in State of Affairs
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Directors Report
On 1 July 2016, the Group completed the acquisition of Skydive Wanaka Limited, being a skydiving operation in Wanaka, New Zealand. Consideration for the
acquisition was NZ$10.4 million (of which AUD 9.948M was paid as a deposit with the company's solicitors prior to 30 June 2016).
On 28 September 2016 the Group announced a fully underwritten accelerated non renounceable entitlement offer to raise $19.6M. As a result of this capital raise
37,742,986 shares were issued at $0.52 each on the basis of 2 shares for every 21 shares held.
On 3 October 2016, the Group acquired Performance Aviation Limited, an aircraft and helicopter maintenance business, based in Wanaka New Zealand. Consideration
for the acquisition was NZ$500,000.
On 31 October 2016 the Group acquired Raging Thunder Pty Ltd (and its associated subsidiaries), an adventure eco-tourism company, located in Far North
Queensland, adding white water rafting, hot air ballooning, canyoning, sea kayaking and tours to the Great Barrier Reef to the company's adventure tourism portfolio.
Consideration for the acquisition was $15.4M.
On 1 May 2017 National Australia Bank Limited ("NAB") executed with the Group a Banking Facility Agreement. NAB has made available to the Group a $20 million
Cash Advance Facility, a $20 million Master Asset Finance Facility, a $240,000 Bank Guarantee Facility, a $500,000 Business Card facility, and a $3 million Foreign
Exchange & Commodity Hedging Facility.
On 1 May 2017 the Group acquired Reef Magic Cruises Pty Ltd, an adventure eco-tourism company, located in Far North Queensland, adding snorkelling, diving, reef
scenic helicopter flights, remedial massages, whale watching, glass bottom boat and semi-submersible tours of the Great Barrier Reef, to the company's adventure
tourism portfolio. Consideration for the acquisition was $15M and $14.5M was funded through NAB.
On 1 May 2017 the Group acquired ILB Pty Ltd, an information technology implementation, maintenance and support business, which has provided services to the
Group for more than 10 years. Consideration for the acquisition was $850,000 and was paid through a combination of cash and scrip (833,333 shares were issued as
part consideration).
Dividends Paid or Recommended
Dividends paid or declared for payment during the financial year are as follows:
─
─
On 30 September 2016, a fully franked dividend of $0.01 per share was paid out of retained profits at 30 June 2016, amounting to $3,963,014.
The Directors have declared a final and fully franked dividend of $0.01 per share, amounting to $4,348,777, payable on 29 September 2017 out of retained
profits at 30 June 2017. For the purposes of determining any entitlement to the dividend, the record date has been set as 18 September 2017.
Information relating to Directors and Company Secretary
William Beerworth
Qualifications
Experience
Interest in Options
Special Responsibilities
Directorships held in other listed entities
during the three years prior to the
current year
Anthony Boucaut
Qualifications
Experience
Interest in Shares
Interest in Options
Anthony Ritter
Qualifications
Experience
Interest in Shares
Interest in Options
Special Responsibilities
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Independent Non-Executive Director and Chairman
BA LLB (Sydney), LLM SJD (Virginia), MCOM (NSW), MBA (Macquarie), member of the NSW Law Society, FAICD,
FCPA and CTA
An investment banker and corporate solicitor, Bill was educated in Australia and the United States and has a career
spanning more than 40 years. Bill held a number of senior positions before establishing Beerworth+Partners
Limited, a corporate advisory firm specialising in corporate strategy, M&A, and foreign investment.
500,000 options
Chairman of the Remuneration and Nomination Committee, member of the Audit and Risk Committee.
Redhill Education Limited (Chairman).
Founder, Executive Director, Managing Director
BSC, MAICD, APF
Anthony has over 20 years' experience in the skydiving industry and over 25 years' experience in aviation.
Anthony's aviation experience during his time in the military and his passion for skydiving played a critical role in
the establishment of the Skydive the Beach business in 1999. As a qualified pilot, Anthony not only oversees and
guides the business generally, but also overseas the aircraft and aircraft maintenance division within the business.
179,924,273 ordinary shares
3,000,000 options
Executive Director and Chief Executive Officer
BCOM, CA, MAICD
Anthony has over 20 years of financial, management and corporate governance experience in various senior
management roles in both private and not-for-profit entities. He has been involved with the Skydive the Beach
business since 2011 and has demonstrated strong strategic planning, analytical,
leadership and financial
management skills. He has also played an integral part in the successful growth of the Group by way of listing on
the ASX, acquisitions of additonal businesses, and in the organic growth of the underlying business.
3,383,970 ordinary shares
2,500,000 options
Joint Company Secretary.
4
Information relating to Directors and Company Secretary (continued)
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Directors Report
John Diddams
Qualifications
Experience
Interest in Shares
Interest in Options
Special Responsibilities
Directorships held in other listed entities
during the three years prior to the
current year
Colin Hughes
Qualifications
Experience
Interest in Shares and Options
Special Responsibilities
Company Secretary
—
—
—
—
—
—
—
—
—
—
—
—
Independent Non-Executive Director
BCOM, FCPA, FAICD
John has over 30 years of financial and management experience in various senior management positions in both
private and public companies. John is the principal of a CPA firm that provides corporate advisory services to SME
and mid-cap companies, including management of the process to raise equity capital, and the IPO due diligence
process.
3,090,545 ordinary shares
1,500,000 options
Joint Company Secretary, Chairman of
Nomination Committee.
the Audit and Risk Committee, member of
the Remuneration and
Volpara Health Technologies Limited (ASX:VHT), Olivers Real Food Limited (ASX:OLI), Martin Aircraft Company
Limited (resigned 03/03/2016), Indoor Skydive Australia Group Limited (resigned 30/10/2014).
Non-Executive Director
MAICD
Colin has more than 45 years of experience in Aviation, Tourism and Hospitality, having held Executive
Management positions at Cathay Pacific Airways in Hong Kong, Continental Airlines, Northwest Airlines and
QANTAS, lastly as Group GM International Operations. His current roles include independent director of BWA ( Best
Western Hotels Australasia), director of AAoA ( Accommodation Association of Australia),
Director Aviation online, and director of international call centre group, Centrecom.
Nil
Member of the Audit and Risk Committee and member of the Remuneration and Nomination Committee.
The following persons held the position of company secretary at the end of the financial year:
-
-
John Diddams, appointed 19 December 2013; and
Anthony Ritter, appointed 17 November 2014
Meetings of Directors
During the financial year, 12 meetings of directors (including committees of directors) were held.
Attendances by each director during the year were as follows:
William Beerworth
Anthony Boucaut
Anthony Ritter
John Diddams
Colin Hughes
Options
Directors' Meetings
Audit and Risk
Remuneration & Nomination
Number
eligible to attend
Number
attended
Number
eligible to attend
Number
attended
Number
eligible to attend
Number
attended
12
12
12
12
12
8
9
11
11
10
3
-
-
3
3
3
-
-
3
2
3
-
-
3
3
3
-
-
3
3
At the date of this report, the unissued ordinary shares of Skydive the Beach Group Limited under option are as follows
Grant Date
30 January 2015
30 January 2015
30 January 2015
30 January 2015
02 February 2015
Date of vesting
29 January 2016
29 January 2016
30 January 2017
30 January 2018
29 January 2016
Date of expiry
29 January 2025
29 January 2025
29 January 2025
29 January 2025
29 January 2025
Exercise price
$0.25
$0.25
$0.25
$0.25
$0.25
Number under option
2,000,000
2,666,666
2,666,666
2,666,668
300,000
10,300,000
Option holders do not have any rights to participate in any issues of shares or other interests in the company or any other entity.
There have been no options granted over unissued shares or interests of any controlled entity within the Group during or since the end of the reporting period.
For details of options issued to directors and executives as remuneration, refer to the Remuneration Report.
No person entitled to exercise the option had or has any right by virtue of the option to participate in any share issue of any other body corporate.
Events after the Reporting Period
On 2 August 2017, the Group acquired all the share capital and assets of Byron Bay Ballooning. Consideration for this acquisition was $800,000 ($80,000 of which
was paid as a deposit prior to 30 June 2017).
\
Environmental Issues
The Group's operations are not subject to significant environmental regulation under the law of the Commonwealth and State. The Group has established procedures
whereby compliance with existing environmental regulations and new regulations are monitored annually. This process includes procedures to be followed should an
incident adversely impact the environment. The directors are not aware of any breaches during the period covered by this report.
5
Corporate Governance Statement
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Directors Report
A copy of the Group's corporate governance statement can be found on the website www.skydive.com.au/investors in accordance with ASX Listing Rule 4.10.3.
Indemnifying Officers or Auditor
The company has paid premiums to insure all past, present and future directors against liabilities for costs and expenses incurred by them in defending legal
proceedings arising from their conduct while acting in the capacity of directors of the company, other than conduct involving a wilful breach of duty in relation to the
company. The contract of insurance prohibits disclosure of the nature of liability and the amount of the premium.
Proceedings on Behalf of Company
No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the
purpose of taking responsibility on behalf of the company for all or any part of those proceedings.
The company was not a party to any such proceedings during the year.
Non-Audit Services
The Board of Directors, in accordance with advice from the audit committee, are satisfied that the provision of non-audit services during the year is compatible with
the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the services disclosed below did not
compromise the external auditor’s independence for the following reasons:
─
─
all non-audit services are reviewed and approved by the audit committee prior to commencement to ensure they do not adversely affect the integrity and
objectivity of the auditor; and
the nature of the services provided does not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics
for Professional Accountants set by the Accounting Professional and Ethical Standards Board.
The following fees were paid or payable to RSM Australia for non-audit services provided during the year ended 30 June 2017:
Taxation services
Due diligence investigations on acquisitions
$
311,615
147,061
458,676
The tax services comprised mainly tax compliance, due diligence on acquisitions, an Office of State Revenue review, and advisory services in relation to the tax
consolidation.
Auditor’s Independence Declaration
The lead auditor’s independence declaration for the year ended 30 June 2017 has been received and can be found on page 10 of the financial report.
Rounding of Amounts
The company is of a kind referred to in Corporations Instruments 2016/191 issued by ASIC, relating to (rounding off). Amounts in this report have been rounded off
in accordance with that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
REMUNERATION REPORT
Remuneration policy
The remuneration policy of Skydive the Beach Group Limited has been designed to align key management personnel (KMP) objectives with shareholder and business
objectives by providing a fixed remuneration component and offering specific short-term and long-term incentives based on key performance areas affecting the
consolidated group’s financial results. The board of Skydive the Beach Group Limited believes the remuneration policy to be appropriate and effective in its ability to
attract and retain the high-quality KMP to run and manage the consolidated group, as well as create goal congruence between directors, executives and shareholders.
The Board’s policy for determining the nature and amount of remuneration for KMP of the consolidated group is as follows:
─
─
─
─
─
─
The remuneration policy is to be developed by the Remuneration and Nomination Committee and approved by the Board after professional advice is sought
from independent external consultants.
All KMP receive a base salary which is based on factors such as length of service, experience and level of involvement in the business.
Executive directors are also entitled to receive superannuation, fringe benefits, and performance incentives.
Performance incentives are generally only paid once predetermined key performance indicators (KPIs) have been met.
Incentives paid in the form of options are intended to align the interests of the directors and company with those of the shareholders. In this regard, KMP are
prohibited from limiting risk attached to those instruments by use of derivatives or other means.
The Remuneration and Nomination Committee reviews KMP packages annually by reference to the consolidated group’s performance, executive performance
and comparable information from industry sectors.
The performance of KMP is measured against criteria agreed annually with each executive and is based predominantly on the forecast growth of the consolidated
group’s profits and shareholders’ value. All bonuses and incentives must be linked to predetermined performance criteria. The Board may, however, exercise its
discretion in relation to approving incentives, bonuses and options, and can recommend changes to the committee’s recommendations. Any change must be justified
by reference to measurable performance criteria. The policy is designed to attract the highest calibre of executives and reward them for performance results leading
to long-term growth in shareholder wealth.
Executive directors receive a superannuation guarantee contribution required by the government, which is currently 9.5% and do not receive any other retirement
benefits. Individuals may choose to sacrifice part of their salary to increase payments towards superannuation.
All remuneration paid to KMP is valued at the cost to the company and expensed.
The Board's policy is to remunerate non-executive directors at market rates for time, commitment and responsibilities. The Remuneration and Nomination Committee
determines payments to non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external
advice was sought during the period. Fees for non-executive directors are not linked to the performance of the consolidated group. The maximum aggregate amount
of fees that can be paid to non-executive directors must not exceed $750,000 per annum as per the company's constitution and as approved at the 2016 Annual
General Meeting (AGM) held on 4 November 2016. This limit may be increased from time to time subject to approval by shareholders at a general meeting.
6
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Directors Report
REMUNERATION REPORT (continued)
Options granted under the Board's remuneration policy do not carry dividend or voting rights. Each option is entitled to be converted into one ordinary share once the
interim or final financial report has been disclosed to the public and is measured using the Binomial Approximation Option Pricing methodology.
KMP or closely related parties of KMP are prohibited from entering into hedge arrangements that would have the effect of limiting the risk exposure relating to their
remuneration.
In addition, the Board’s remuneration policy prohibits directors and KMP from using Skydive the Beach Group Limited shares as collateral in any financial transaction,
including margin loan arrangements.
Engagement of Remuneration Consultants
Crichton and Associates Pty Ltd was engaged as a remuneration consultant during the financial year.
Performance-based Remuneration
As part of the remuneration package of each of the executive directors, there is a performance-based component based on key performance indicators (KPI's) which
are set annually. The intention of this program is to facilitate goal congruence between key management personnel with that of the business and shareholders. The
measures are specifically tailored to the area each individual is involved in and has a level of control over. The KPIs target areas the Board believes hold greater
potential for group expansion and profit, covering financial and non-financial as well as short and long-term goals. The level set for each KPI is based on budgeted
figures for the Group and respective industry standards.
Performance in relation to the KPIs is assessed annually, with bonuses being awarded depending on the number and deemed difficulty of the KPIs achieved.
Following the assessment, the KPIs are reviewed by the Remuneration and Nomination Committee in light of the desired and actual outcomes, and their efficiency is
assessed in relation to the Group’s goals and shareholder wealth, before the KPIs are set for the following year.
In determining whether or not a KPI has been achieved, Skydive the Beach Group Limited bases the assessment on audited figures, including EBITDA.
Relationship between Remuneration Policy and Company Performance
The remuneration policy has been tailored to increase goal congruence between shareholders, directors and executives. Two methods have been applied to achieve
this aim, the first being a performance-based bonus based on KPI, and the second being the issue of options to the majority of directors and executives to encourage
the alignment of personal and shareholder interests. The company believes this policy will be effective in increasing shareholder wealth into the future.
The following table shows the gross revenue, EBITDA, profits and dividends for the last three years for the listed entity, as well as the market capitalisation, share
prices at the end of the respective financial years. Information is not available prior to the group's inception on 1 July 2014. Analysis of the actual figures shows an
increase in profits year on year as well as the payment of dividends paid to shareholders. The improvement in the company’s performance over the last two years has
been reflected in the company’s share price with an increase this year. The Board is of the opinion that these results can be attributed, in part, to the previously
described remuneration policy and is satisfied with the overall upwards trend in shareholder wealth over the past three years.
Sales revenue ($'000)
EBITDA ($'000)
Net profit for the year ($'000)
Market capitalisation ($'000)
Dividends paid ($'000)
Earnings per share (cents)
Share price at financial year end ($)
Dividends paid (cents per share)
2017
89,566
20,988
9,482
287,019
3,963
2.24
0.66
0.01
2016
58,473
13,457
7,158
202,114
2,937
2.10
0.51
0.01
2015
26,320
6,025
2,468
91,056
-
1.13
0.31
-
Performance Conditions Linked to Remuneration
The Group seeks to emphasise reward incentives for results and continued commitment to the Group through the provision of various short term and long term
incentive plans, specifically the incorporation of incentive payments based on the achievement of revenue targets, return on equity ratios, and continued employment
with the Group. The objective of the schemes is to both reinforce the short and long-term goals of the Group and provide a common interest between management
and shareholders.
The performance related proportions of remuneration based on these targets are included in the following table. The objective of the reward schemes is to both
reinforce the short and long-term goals of the Group and provide a common interest between management and shareholders. There has been no alteration to the
terms of the bonuses paid since grant date.
The satisfaction of the performance conditions is based on a review of the audited financial statements of the Group and publicly available market indices, as such
figures reduce any risk of contention relating to payment eligibility. The Board does not believe that performance conditions should include a comparison with any
other measures or factors external to the Group at this time.
Employment Details of Members of Key Management Personnel
The following table provides employment details of persons who were, during the financial year, members of KMP of the consolidated group. The table also illustrates
the proportion of remuneration that was performance and non-performance based and the proportion of remuneration received in the form of options.
Position Held as at 30 June 2017 and any change during the year
Group KMP
William Beerworth
Anthony Boucaut
Anthony Ritter
John Diddams
Colin Hughes
Phillip Turner
Independent Non-Executive Director and Chairman
Executive Director, Managing Director
Executive Director, Chief Executive Officer
Independent Non-Executive Director
Independent Non-Executive Director
Chief Financial Officer
Contract details (duration & termination)
Duration and termination unspecified.
Duration unspecified. Termination requires 3 months written notice.
Duration unspecified. Termination requires 3 months written notice.
Duration and termination unspecified.
Duration and termination unspecified.
Duration unspecified. Termination requires 3 months written notice.
7
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Directors Report
REMUNERATION REPORT (continued)
Employment Details of Members of Key Management Personnel (continued)
Group KMP
William Beerworth
Anthony Boucaut
Anthony Ritter
John Diddams
Colin Hughes
Phillip Turner
Proportions of Performance-related remuneration
Non-salary cash-
Shares/
based incentives
Units
%
%
Options
%
-
44%
42%
-
-
10%
-
-
-
-
-
-
-
-
-
-
-
-
Portion of Non-performance
Fixed Salary/Fees
%
100%
56%
58%
100%
100%
90%
Total
%
100%
100%
100%
100%
100%
100%
The employment terms and conditions of all KMP are formalised in contracts of employment.
Terms of employment for executive directors require a minimum of 3 months notice prior to termination of contract. Termination payments are payable in accordance
with relevant laws and regulations based on benefits accrued at the date of termination. Additional termination payments can be made at the discretion of the Board.
Changes in Directors and Executives Subsequent to Year-end
There have been no changes in directors or executives since 30 June 2017.
Remuneration Expense Details for the Years ended 2017 and 30 June 2016
The following table of benefits and payments represents the components of the current year and comparative year remuneration expenses for each member of KMP
of the consolidated group. Such amounts have been calculated in accordance with Australian Accounting Standards:
Table of Benefits and Payments for the Years ended 30 June 2017 and 30 June 2016
FY 2017
Group KMP
William Beerworth
Anthony Boucaut
Anthony Ritter
John Diddams *
Colin Hughes
Phillip Turner **
Short-term benefits
Post
Long-term
Equity-settled
Salary, Fees and
Leave
$
Profit Share and
bonuses
$
Non-monetary
$
Other
$
Pension and
superannuation
$
LSL
$
Options/Rights
$
Total
$
165,000
250,000
200,000
161,000
88,654
159,561
1,024,215
-
250,000
185,000
-
-
10,000
445,000
-
21,151
18,054
-
-
39,205
-
17,876
17,876
-
-
1,400
37,152
-
23,750
19,000
-
8,422
16,108
67,280
-
-
-
-
-
-
-
-
-
-
-
-
165,000
562,777
439,930
161,000
97,076
187,069
1,612,852
* For John Diddams, $161,000 includes $36,000 for Company Secretarial services.
** Phillip Turner commenced 25 July 2016.
FY 2016
Group KMP
William Beerworth
Anthony Boucaut
Anthony Ritter
John Diddams
Dr. Nigel Finch*
Timothy Radford**
Colin Hughes
Short-term benefits
Salary, Fees and
Leave
$
Profit Share and
bonuses
$
Non-monetary
$
Other
$
Post
Employment
Pension and
superannuation
$
Long-term
benefits
Equity-settled
share-based
LSL
$
Options/Rights
$
Total
$
165,000
239,582
191,666
156,000
62,500
193,786
-
1,008,534
-
125,000
100,000
-
-
100,000
-
325,000
-
31,726
18,084
-
-
10,046
-
59,856
105,000
-
-
63,000
-
-
-
168,000
-
34,635
27,708
-
-
27,524
-
89,867
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
270,000
430,943
337,458
219,000
62,500
331,356
-
1,651,257
* Resigned as a Director on 31 January 2016.
** Resigned as a Director on 09 June 2016.
Securities Received that are not Performance Related
No members of KMP are entitled to receive securities that are not performance-based as part of their remuneration package.
Cash Bonuses, Performance-Related Bonuses and Share-based Payments
There were no share-based payments granted as remuneration during the year.
Bonuses included in the table of benefits and payments above were paid to executive directors during the year as a reward for meeting KPI's set out by the Board.
8
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Directors Report
REMUNERATION REPORT (continued)
Options Granted to Key Management Personnel
William Beerworth
Anthony Boucaut
Anthony Ritter
John Diddams
Dr. Nigel Finch (Resigned as Director 31 January 2016)
Timothy Radford (Resigned as Director 9 June 2016)
Opening balance
500,000
3,000,000
2,500,000
1,500,000
300,000
2,500,000
10,300,000
Granted during the
year
Exercised during
the year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Closing balance
500,000
3,000,000
2,500,000
1,500,000
300,000
2,500,000
10,300,000
Date of expiry
29/01/2025
29/01/2025
29/01/2025
29/01/2025
29/01/2025
29/01/2025
Total Exercisable
500,000
2,000,000
1,666,666
1,500,000
300,000
1,666,666
7,633,332
Note 1
The fair value of options granted as remuneration and as shown in the above table has been determined in accordance with Australian accounting
standards and will be recognised as an expense over the relevant vesting period to the extent that conditions necessary for vesting are satisfied.
Note 2
There were no options exercised during the year.
KMP Shareholdings
The number of ordinary shares in Skydive the Beach Group Limited held by each KMP of the Group at the end of the financial year is as follows:
William Beerworth
Anthony Boucaut
Anthony Ritter
John Diddams
Colin Hughes
Phillip Turner
Balance at
Beginning of Year
-
179,924,273
3,383,970
3,250,545
-
-
186,558,788
Granted as
Remuneration
during the Year
Issued on Exercise
of Options during
the Year
Other Changes
during the Year
Balance at End of
Year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(160,000)
-
-
(160,000)
-
179,924,273
3,383,970
3,090,545
-
-
186,398,788
Other Equity-related KMP Transactions
There have been no other transactions involving equity instruments apart from those described in the tables above relating to options, rights and shareholdings.
Loans to KMP
The Group has unsecured loans to Boucaut Enterprises Pty Limited, a related entity associated with Anthony Boucaut for a total of $1,453,126 which expire on 28
February 2021 and 30 June 2023, details of which can be found at note 30(c).
Balance at beginning of the year
Loans advanced
Loan repayment received
Interest charged
Balance at end of the year
$'000
1,783
64
(457)
63
1,453
Other transactions with KMP and/or their related parties
There were no other transactions conducted between the Group and KMP or their related parties, apart from those disclosed above relating to equity, compensation
and loans, that were conducted other than in accordance with normal employee, customer or supplier relationships on terms no more favourable than those
reasonably expected under arm’s length dealings with unrelated persons.
END OF REMUNERATION REPORT
This Directors’ Report, incorporating the Remuneration Report, is signed in accordance with a resolution of the Board of Directors.
Anthony Boucaut
Managing Director
Dated:
4 September 2017
Anthony Ritter
Chief Executive Officer
9
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Skydive the Beach Group Limited and controlled entities for
the year ended 30 June 2017, I declare that, to the best of my knowledge and belief, there have been no
contraventions of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
G N SHERWOOD
Partner
Sydney, NSW
Dated: 4 September 2017
10
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30 June 2017
Consolidated Group
Note
2017
$000
2016
$000
Sales revenue
Cost of sales
Gross profit
Other income
Administrative and corporate expenses
Occupancy expenses
Depreciation and amortisation expenses
Marketing, advertising and agents commission
Repairs and maintenance expenses
Finance costs
Other expenses
Profit before income tax
Tax expense
Net profit for the year
Other comprehensive income:
Items that will not be reclassified subsequently to profit or loss:
Revaluation of property, plant and equipment, net of tax
Items that will be reclassified subsequently to profit or loss when specific conditions are met:
Exchange differences on translating foreign operations, net of tax
Other comprehensive income for the year
Total comprehensive income for the year
Earnings per share
From continuing operations:
Basic earnings per share (cents)
Diluted earnings per share (cents)
The accompanying notes form part of these financial statements.
4
4
5
6
6c
6c
10
10
89,566
(51,469)
58,473
(31,739)
38,097
26,734
1,021
(13,330)
(2,365)
(6,165)
(1,858)
(573)
(1,255)
(4)
13,568
1,262
(11,295)
(1,692)
(3,599)
(1,347)
(176)
(669)
(29)
9,189
(4,086)
(2,031)
9,482
7,158
-
(458)
(166)
(166)
(101)
(559)
9,316
6,599
2.24
2.18
2.10
2.04
11
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Consolidated Statement of Financial Position
as at 30 June 2017
Consolidated Group
2017
$000
2016
$000
Note
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
Total current assets
Non-current assets
Trade and other receivables
Other financial assets
Property, plant and equipment
Intangible assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Current tax liabilities
Provisions
Deferred revenue
Total current liabilities
Non-current liabilities
Borrowings
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Issued capital
Retained earnings
Reserves
Total equity
The accompanying notes form part of these financial statements.
11
12
13
14
12
15
17
18
19
21
22
23
20
21
22
23
24
25
9,490
4,340
2,525
3,705
20,060
1,153
38
70,370
47,959
119,520
12,819
2,483
1,486
11,999
28,787
1,495
27
39,503
17,996
59,021
139,580
87,808
6,596
5,692
1,338
1,490
891
16,007
23,932
4,962
183
29,077
2,662
2,049
3,078
606
202
8,597
8,297
793
74
9,164
45,084
17,761
94,496
70,047
84,321
12,208
(2,033)
94,496
65,231
6,689
(1,873)
70,047
12
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Consolidated Statement of Changes in Equity
for the year ended 30 June 2017
Note
Issued Capital
Retained
Earnings
Asset
Revaluation
Reserve
Common
Control
Reserve
$000
$000
$000
$000
Share
Option
Reserve
$000
Foreign
Currency
Translation
Reserve
$000
Total
$000
32,039
2,468
2,844
(4,171)
5
-
33,185
Consolidated Group
Balance at 1 July 2015
Comprehensive income
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Transactions with owners, in their capacity as
Shares issued during the year
Transaction costs
Dividends recognised for the year
Employee share options issued
Total transactions with owners and other transfers
25(e)
-
-
-
7,158
-
7,158
-
(458)
(458)
35,058
(1,866)
-
-
33,192
(2,937)
(2,937)
-
-
-
-
-
-
-
-
-
Balance at 30 June 2016
65,231
6,689
2,386
(4,171)
Balance at 1 July 2016
Comprehensive income
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Transactions with owners, in their capacity as owners,
and other transfers
Shares issued during the year
Transaction costs
Dividends recognised for the year
Employee share options issued
Total transactions with owners and other transfers
65,231
6,689
2,386
(4,171)
25(e)
9
-
-
-
20,126
(1,036)
-
-
19,090
9,482
-
9,482
-
-
(3,963)
-
(3,963)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8
8
13
13
-
-
-
-
-
-
5
5
-
(101)
(101)
-
-
-
-
-
7,158
(559)
6,599
35,058
(1,866)
(2,937)
8
30,263
(101)
70,047
(101)
70,047
-
(165)
(165)
9,482
(165)
9,317
-
-
-
-
-
20,126
(1,036)
(3,963)
5
15,132
Balance at 30 June 2017
84,321
12,208
2,386
(4,171)
18
(266)
94,496
The accompanying notes form part of these financial statements.
13
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Consolidated Statement of Cash Flows
for the year ended 30 June 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Finance costs
Income tax paid
Note
Consolidated Group
2017
$000
2016
$000
89,865
(70,524)
(1,255)
(5,446)
59,219
(48,268)
(669)
(853)
Net cash provided by operating activities
27(a)
12,640
9,429
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
Purchase of other non-current assets
Payments for investments in subsidiaries
Cash acquired in business acquisitions
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Transaction costs associated with share issue
Proceeds from borrowings
Repayment of borrowings
Dividends paid by parent entity
Loans to related parties
Loan repayments from related parties
Net cash provided by financing activities
Net increase in cash held
Cash and cash equivalents at beginning of financial year
16 (c) & 27 (b)
-
(18,754)
(1,259)
(31,539)
845
1060
(12,288)
-
(25,620)
243
(50,707)
(36,605)
20,126
(1,036)
20,791
(1,510)
(3,963)
(127)
457
34,522
(1,803)
2,335
(1,609)
(2,937)
(255)
507
34,738
30,760
(3,329)
3,584
12,819
9,235
Cash and cash equivalents at end of financial year
11
9,490
12,819
The accompanying notes form part of these financial statements.
14
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
These consolidated financial statements and notes represent those of Skydive the Beach Group Limited and Controlled Entities (the “consolidated group” or “group”). The principal
accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise
stated.
The financial statements were authorised for issue on 4 September 2017 by the directors of the company.
Note 1
Summary of Significant Accounting Policies
Basis of Preparation
These general purpose financial statements have been prepared in accordance with the Corporations Act 2001, Australian Accounting Standards and Interpretations of the Australian
Accounting Standards Board and International Financial Reporting Standards as issued by the International Accounting Standards Board. The Group is a for-profit entity for financial
reporting purposes under Australian Accounting Standards. Material accounting policies adopted in the preparation of these financial statements are presented below and have been
consistently applied unless stated otherwise.
Historical Cost Convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of available-for-sale financial assets, financial assets
and liabilities at fair value through profit or loss, investment properties, certain classes of property, plant and equipment and derivative financial instruments.
Critical Accounting Estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying
the consolidated entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
financial statements, are disclosed in Note 2.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is
disclosed in Note 3.
(a)
Principles of Consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the Skydive the Beach Group Limited and all of the subsidiaries (including any
structured entities). Subsidiaries are entities the parent company controls. The parent controls an entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the entity. A list of the subsidiaries is provided in Note 16(a).
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group from the date on which control is obtained by the Group.
The consolidation of a subsidiary is discontinued from the date that control ceases. Inter-company transactions, balances and unrealised gains or losses on transactions
between Group entities are fully eliminated on consolidation. Accounting policies of subsidiaries have been changed and adjustments made where necessary to ensure
uniformity of the accounting policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as ‘Non-controlling Interests’. The Group initially recognises non-controlling
interests that are present ownership interests in subsidiaries and are entitled to a proportionate share of the subsidiary’s net assets on liquidation at either fair value or at the
non-controlling interests’ proportionate share of the subsidiary’s net assets. Subsequent to initial recognition, non-controlling interests are attributed their share of profit or loss
and each component of other comprehensive income. Non-controlling interests are shown separately within the equity section of the statement of financial position and
statement of comprehensive income.
Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The business
combination will be accounted for from the date that control is obtained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities)
assumed is recognised (subject to certain limited exemptions).
When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent consideration arrangement is also included.
Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent
consideration classified as an asset or liability is remeasured each reporting period to fair value, recognising any change to fair value in profit or loss, unless the change in value
can be identified as existing at acquisition date.
All transaction costs incurred in relation to business combinations, other than those associated with the issue of a financial instrument, are recognised as expenses in profit or
loss when incurred.
The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.
Common Control Transaction "Pooling of Interest Method"
Where the combining entities are ultimately controlled by the same party both before and after the combination, the transaction is a “common control” transaction, outside the
scope of AASB 3 Business Combinations. Such a transaction is accounted for using the “pooling of interests” method resulting in the continuation of existing accounting values
that would have occurred if the assets and liabilities had already been part of the group.
It has been determined that the group reorganisation disclosed in note 25(c) was a common control transaction as the companies which formed part of the group following the
reorganisation were substantially owned by interests associated with the founder, Anthony Boucaut. As a result the accounting treatment under the "pooling of interest
method" has historically been applied as follows:
• the assets and liabilities of the combining entities are reflected at their carrying amounts;
• no “new” goodwill or other intangible assets are recognised as a result of the combination; and
• the income statement reflects the results of the combining entities for the full period, irrespective of when the combination took place; and
• the excess of the fair value of the purchase consideration over the carrying value of the assets and liabilities has been recorded as a "common control
reserve".
15
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 1
Summary of Significant Accounting Policies (continued)
(a)
Principles of Consolidation (continued)
Goodwill
Goodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the excess of the sum of:
(i) the consideration transferred;
(ii) any non-controlling interest (determined under either the full goodwill or proportionate interest method); and
(iii) the acquisition date fair value of any previously held equity interest;
over the acquisition date fair value of net identifiable assets acquired.
The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date fair value of any previously held equity interest shall form
the cost of the investment in the separate financial statements.
Fair value remeasurements in any pre-existing equity holdings are recognised in profit or loss in the period in which they arise. Where changes in the value of such equity
holdings had previously been recognised in other comprehensive income, such amounts are recycled to profit or loss.
The amount of goodwill recognised on acquisition of each subsidiary in which the Group holds less than 100% interest will depend on the method adopted in measuring the
non-controlling interest. The Group can elect in most circumstances to measure the non-controlling interest in the acquiree either at fair value (full goodwill method) or at the
non-controlling interest's proportionate share of the subsidiary's identifiable net assets (proportionate interest method). In such circumstances, the Group determines which
method to adopt for each acquisition and this is stated in the respective notes to these financial statements disclosing the business combination.
Under the full goodwill method, the fair value of the non-controlling interest is determined using valuation techniques which make the maximum use of market information
where available. Under this method, goodwill attributable to the non-controlling interest is recognised in the consolidated financial statements.
Refer to Note 18 for information on the goodwill policy adopted by the Group for acquisitions.
Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates.
Goodwill is tested for impairment annually and is allocated to the Group's cash-generating units or groups of cash-generating units, representing the lowest level at which
goodwill is monitored and not larger than an operating segment. Gains and losses on the disposal of an entity include the carrying amount of goodwill related to the entity
disposed of.
Changes in the ownership interests in a subsidiary that do not result in a loss of control are accounted for as equity transactions and do not affect the carrying amounts of
goodwill.
(b)
Income Tax
The income tax expense (income) for the year comprises current income tax expense (income) and deferred tax expense (income).
Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities (assets) are measured at the amounts expected to be paid to
(recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates to items that are recognised outside profit or loss.
Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset or liability, where there is no effect on accounting or taxable
profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled and their
measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. With respect to non-depreciable
items of property, plant and equipment measured at fair value and items of investment property measured at fair value, the related deferred tax liability or deferred tax asset is
measured on the basis that the carrying amount of the asset will be recovered entirely through sale.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available
against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised
where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of
the respective asset and liability will occur. Deferred tax assets and liabilities are offset where: (a) a legally enforceable right of set-off exists; and (b) the deferred tax assets
and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement
or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are
expected to be recovered or settled.
Tax Consolidation - Australia
Skydive the Beach Group Limited and its Australian wholly-owned subsidiaries have formed an income tax consolidated group under tax consolidation legislation. Each entity
within the group recognises its own current and deferred tax assets and liabilities. Such taxes are measured using the 'stand-alone taxpayer' approach to allocation. Current
tax liabilities/(assets) and deferred tax assets arising from unused tax losses and tax credits in the subsidiaries are immediately transferred to the head entity.
The Group notified the Australian Taxation Office (ATO) that it had formed an income tax consolidated group to apply from 1 July 2014. The tax consolidated group has also
entered into a tax funding arrangement whereby each company in the Group contributes to the income tax payable by the Group in proportion to their contribution to the
Group's taxable income. Differences between amounts of net assets and liabilities derecognised and the net amounts recognised pursuant to their funding arrangement are
recognised as either a contribution by, or distribution to the head entity.
16
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 1
Summary of Significant Accounting Policies (continued)
(b)
Income Tax (continued)
Tax Consolidation - New Zealand
Skydive (New Zealand) Limited and its New Zealand wholly-owned subsidiaries have formed an income tax consolidated group under tax consolidation legislation. Each entity
within the group recognises its own current and deferred tax assets and liabilities. Such taxes are measured using the 'stand-alone taxpayer' approach to allocation. Current
tax liabilities/(assets) and deferred tax assets arising from unused tax losses and tax credits in the subsidiaries are immediately transferred to the head entity.
The New Zealand group of companies notified the Inland Revenue Department (IRD) that it had formed an income tax consolidated group to apply from 30 October 2015.
The New Zealand tax consolidated group has also entered into a tax funding arrangement whereby each company in the Group contributes to the income tax payable by the
Group in proportion to their contribution to the Group's taxable income. Differences between amounts of net assets and liabilities derecognised and the net amounts
recognised pursuant to their funding arrangement are recognised as either a contribution by, or distribution to the head entity.
(c)
Revenue and Other Income
Revenue is measured at the fair value of the consideration received or receivable.
Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risks and rewards of ownership of the goods and the
cessation of all involvement in those goods.
Interest revenue is recognised using the effective interest method.
Revenue recognition relating to the provision of services is determined with reference to the stage of completion of the transaction at the end of the reporting period where
outcome of the contract can be estimated reliably. Stage of completion is determined with reference to the services performed to date as a percentage of total anticipated
services to be performed. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent that related expenditure is recoverable. The group
charges an initial administration fee at the time a booking is made, or a gift card is sold. Revenue in respect of this administration fee is recognised at the time the booking is
made, and the jump/activity revenue is recognised at the time the jump/activity is performed.
Rental income is recognised on a straight-line basis over the period of the lease term so as to reflect a constant periodic rate of return on the net investment.
All revenue is stated net of the amount of goods and services tax.
(d)
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use
or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
(e)
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits available on demand with banks, other short-term highly liquid investments with original maturities of 30 days or
less.
(f)
Trade and Other Receivables
Trade and other receivables include amounts due from customers for goods sold and services performed in the ordinary course of business. Receivables expected to be
collected within 12 months of the end of the reporting period are classified as current assets. All other receivables are classified as non-current assets.
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for
impairment. Refer to Note 1(j) for further discussion on the determination of impairment losses.
(g)
Inventories
Inventories are measured at the lower of cost and net realisable value. Costs are assigned on a weighted or specific item basis.
(h)
Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses.
Property
Freehold land and buildings are carried at their fair value (being the amount for which an asset could be exchanged between knowledgeable willing parties in an arm's length
transaction), based on periodic, but at least triennial, valuations by external independent valuers, less accumulated depreciation for buildings.
Increases in the carrying amount arising on revaluation of land and buildings are credited to a revaluation surplus in equity. Decreases that offset previous increases of the
same asset are recognised against revaluation surplus directly in equity; all other decreases are recognised in profit or loss.
Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of
the asset.
17
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 1
Summary of Significant Accounting Policies (continued)
(h)
Property, Plant and Equipment (continued)
Plant and equipment
Recognition and measurement
Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Items of property, plant and equipment are initially recorded
at cost, being the fair value of the consideration provided plus incidental costs directly attributable to the acquisition.
The cost of acquired assets includes the initial estimate at the time of installation of the costs of dismantling and removing the items and restoring the site on which they are
located, and changes in the measurement of existing liabilities recognised for these costs resulting from changes in the timing or outflow of resources required to settle the
obligation or from changes in the discount rate. The unwinding of the discount is treated as a finance charge.
Borrowing costs associated with the acquisition, construction or production of qualifying assets are recognised as part of the cost of the asset to which they relate.
Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.
Depreciation
Depreciation is provided on a straight-line basis on all items of property, plant and equipment. The depreciation rates of owned assets are calculated so as to allocate the cost
or valuation of an asset, less any estimated residual value, over the asset’s estimated useful life to the Group. Assets are depreciated from the date of acquisition or, with
respect to internally constructed assets, from the time an asset is completed and available for use. The costs of improvements to assets are depreciated over the remaining
useful life of the asset or the estimated useful life of the improvement, whichever is the shorter. Assets under finance lease are depreciated over the term of the relevant lease
or, where it is likely the Group will obtain ownership of the asset, the life of the asset.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Aircraft frames
Aircraft engines
Motor vehicles
Leasehold improvements
Office equipment
Plant and equipment
Buildings
Vessel hulls and fixtures
Vessel Engines
Floating Docks
Depreciation Rate
2.5% - 5%
Engine hours *
10.0%
2.5%
25.0%
25.0%
2.5%
10-15%
20.0%
14.5%
Residual Value (%)
20-40%
20-40%
0%
0%
0%
0%
0%
18-28%
0%
30%
* Engine hours vary depending on the type of engine, but useful lives are generally between 3600 to 7000 hours.
Useful lives and residual values are reviewed annually and reassessed having regard to commercial and technological developments, the estimated useful life of assets to the
Group.
The total estimated residual value for aircraft is estimated at $11.3 million and the total depreciation expense in future periods will therefore be reduced by the same amount
over the useful life of the aircraft. Similarly the total estimated residual values of the vessels and floating docks are $2.4M.
Maintenance and overhaul costs
An element of the cost of an acquired aircraft (owned and finance-leased aircraft) is attributed to its service potential, reflecting the maintenance condition of its engines and
airframe. This cost is depreciated over the shorter of the period to the remaining life of the asset.
The costs of subsequent major cyclical maintenance checks for owned aircraft are recognised and depreciated over the shorter of the remaining life of the aircraft or lease term
(as appropriate).
All other maintenance costs are expensed as incurred.
Modifications that enhance the operating performance or extend the useful lives of aircraft are capitalised and depreciated over the remaining estimated useful life of the asset
or remaining lease term (as appropriate). Labour costs in relation to employees who are dedicated to major modifications to aircraft are capitalised as part of the cost of the
modification to which they relate.
(i)
Intangibles Other than Goodwill
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at the date of the acquisition. Intangible assets
acquired separately are initially recognised at cost. Indefinite life intangible assets are not amortised and are subsequently measured at cost less any impairment. Finite life
intangible assets are subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising from the derecognition of
intangible assets are measured as the difference between net disposal proceeds and the carrying amount of the intangible asset. The method and useful lives of finite life
intangible assets are reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or
period.
18
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 1
Summary of Significant Accounting Policies (continued)
(i)
Intangibles Other than Goodwill (continued)
Patents and trademarks
Patents and trademarks are recognised at cost of acquisition. They have a finite life and are carried at cost less any accumulated amortisation and any impairment losses.
Patents and trademarks are amortised over their useful lives.
Trade names
Trade names acquired in a business combination are initially measured at their fair value at the date of acquisition and have an indefinite useful life.
Customer relationships
Customer relationships acquired in a business combination are amortised on a straight-line basis over the period of their expected benefit, being their finite life of 10-20 years.
Leases and Licences
Leases and Licences relate to right to use intangible assets acquired in business combinations and are amoritised over the period of the lease or licence term.
Software
Significant costs associated with software are deferred and amortised on a straight-line basis over the period of their expected benefit, being their finite life of 3 to 5 years.
(j)
Impairment of Assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired. The assessment will include the consideration of
external and internal sources of information, including dividends received from subsidiaries, associates or joint ventures deemed to be out of pre-acquisition profits. If such an
indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs of
disposal and value in use, to the asset’s carrying amount. Any excess of the asset’s carrying amount over its recoverable amount is recognised immediately in profit or loss,
unless the asset is carried at a revalued amount in accordance with another Standard (eg in accordance with the revaluation model
in AASB 116: Property, Plant and
Equipment). Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that other Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset
belongs.
Impairment testing is performed annually for goodwill, intangible assets with indefinite lives and intangible assets not yet available for use.
(k)
Investments in Associates
An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the
entity but is not control or joint control of those policies. Investments in associates are accounted for in the consolidated financial statements by applying the equity method of
accounting, whereby the investment is initially recognised at cost (including transaction costs) and adjusted thereafter for the post-acquisition change in the Group’s share of
net assets of the associate. In addition, the Group’s share of the profit or loss of the associate is included in the Group’s profit or loss.
The carrying amount of the investment includes, when applicable, goodwill relating to the associate. Any discount on acquisition, whereby the Group’s share of the net fair
value of the associate exceeds the cost of investment, is recognised in profit or loss in the period in which the investment is acquired.
Profits and losses resulting from transactions between the Group and the associate are eliminated to the extent of the Group’s interest in the associate.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group discontinues recognising its share of further losses unless it has
incurred legal or constructive obligations or made payments on behalf of the associate. When the associate subsequently makes profits, the Group will resume recognising its
share of those profits once its share of the profits equals the share of the losses not recognised.
(l)
Trade and Other Payables
Trade and other payables represent the liabilities for goods and services received by the entity that remain unpaid at the end of the reporting period. The balance is recognised
as a current liability with the amounts normally paid within 30 days of recognition of the liability.
(m)
Employee Benefits
Short-term employee benefits
Provision is made for the Group’s obligation for short-term employee benefits. Short-term employee benefits are benefits (other than termination benefits) that are expected
to be settled wholly before 12 months after the end of the annual reporting period in which the employees render the related service, including wages, salaries and sick leave.
Short-term employee benefits are measured at the (undiscounted) amounts expected to be paid when the obligation is settled.
The Group’s obligations for short-term employee benefits such as wages, salaries and sick leave are recognised as part of current trade and other payables in the statement of
financial position. The Group’s obligations for employees’ annual leave and long service leave entitlements are recognised as provisions in the statement of financial position.
Other long-term employee benefits
Provision is made for employees’ long service leave and annual leave entitlements not expected to be settled wholly within 12 months after the end of the annual reporting
period in which the employees render the related service. Other long-term employee benefits are measured at the present value of the expected future payments to be made
to employees.
Expected future payments incorporate anticipated future wage and salary levels, durations of service and employee departures and are discounted at rates determined by
reference to market yields at the end of the reporting period on government bonds that have maturity dates that approximate the terms of the obligations. Any
remeasurements for changes in assumptions of obligations for other long-term employee benefits are recognised in profit or loss in the periods in which the changes occur.
The Group’s obligations for long-term employee benefits are presented as non-current provisions in its statement of financial position, except where the Group does not have
an unconditional right to defer settlement for at least 12 months after the end of the reporting period, in which case the obligations are presented as current provisions.
19
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 1
Summary of Significant Accounting Policies (continued)
(m)
Employee Benefits (continued)
Defined contribution superannuation benefits
All employees of the Group other than those that receive defined benefit entitlements receive defined contribution superannuation entitlements, for which the Group pays the
fixed superannuation guarantee contribution (currently 9.5% of the employee’s average ordinary salary) to the employee’s superannuation fund of choice. All contributions in
respect of employees’ defined contribution entitlements are recognised as an expense when they become payable. The Group’s obligation with respect to employees’ defined
contribution entitlements is limited to its obligation for any unpaid superannuation guarantee contributions at the end of the reporting period. All obligations for unpaid
superannuation guarantee contributions are measured at the (undiscounted) amounts expected to be paid when the obligation is settled and are presented as current liabilities
in the Group’s statement of financial position.
Termination benefits
When applicable, the Group recognises a liability and expense for termination benefits at the earlier of: (a) the date when the Group can no longer withdraw the offer for
termination benefits; and (b) when the Group recognises costs for restructuring pursuant to AASB 137: Provisions, Contingent Liabilities and Contingent Assets and the costs
In either case, unless the number of employees affected is known, the obligation for termination benefits is measured on the basis of the
include termination benefits.
number of employees expected to be affected. Termination benefits that are expected to be settled wholly before 12 months after the annual reporting period in which the
benefits are recognised are measured at the (undiscounted) amounts expected to be paid. All other termination benefits are accounted for on the same basis as other long-
term employee benefits.
Equity-settled compensation
The Group operates an employee option plan. Share-based payments to employees are measured at the fair value of the instruments issued and amortised over the vesting
periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is
determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is
recorded to the option reserve. The fair value of options is determined using the Black–Scholes pricing model. The number of shares and options expected to vest is reviewed
and adjusted at the end of each reporting period such that the amount recognised for services received as consideration for the equity instruments granted is based on the
number of equity instruments that eventually vest.
(n)
Provisions
Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will
result and that outflow can be reliably measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period.
(o)
Deferred Revenue
Income relating to future periods is initially recorded as deferred revenue, and is then recognised as revenue at the time the service is rendered. Deferred revenue primarily
represents prepaid sales in respect of tandem skydives purchased in advance.
Included in all sales is a $100 (excluding GST) non-refundable administration fee which is
recognised at the time the booking is made. The sales excluding the $100 (excluding GST) booking fee are then released into revenue at the time the services are rendered
other than breakage which is recognised as per Note 2(h).
(p)
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently measured at amortised cost using
the effective interest method.
(q)
Leases
Leases of fixed assets, where substantially all the risks and benefits incidental to the ownership of the asset (but not the legal ownership) are transferred to entities in the
consolidated group, are classified as finance leases.
Finance leases are capitalised by recognising 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 as expenses in the periods in which they are incurred.
The group has considered any provisions for make good in respect of leases and determined them to be negligible and consequently, no provisions have been raised.
Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the lease term.
(r)
Issued Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the
proceeds.
20
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 1
Summary of Significant Accounting Policies (continued)
(s)
Dividends
Dividends are recognised when paid during the financial year and no longer at the discretion of the company.
(t)
Foreign Currency Transactions and Balances
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 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 profit or loss, except where deferred in equity as a qualifying cash flow or net investment
hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive income to the extent that the underlying gain or loss is
recognised in other comprehensive income, otherwise the exchange difference is recognised in the profit or loss.
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 exchange rates prevailing at the end of the reporting period;
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars are recognised in other comprehensive income and
included in the foreign currency translation reserve in the statement of financial position. The cumulative amount of these differences is reclassified into profit or loss in the
period in which the operation is disposed of.
(u)
Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending on the requirements of the applicable accounting
standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly (i.e. unforced) transaction between independent,
knowledgeable and willing market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used to determine fair value. Adjustments to market values may be
made having regard to the characteristics of the specific asset or liability. The fair values of assets and liabilities that are not traded in an active market are determined using
one or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or liability (i.e. the market with the greatest volume and level of activity
for the asset or liability) or, in the absence of such a market, the most advantageous market available to the entity at the end of the reporting period (i.e. the market that
maximises the receipts from the sale of the asset or minimises the payments made to transfer the liability, after taking into account transaction costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant’s ability to use the asset in its highest and best use or to sell it to another
market participant that would use the asset in its highest and best use.
The fair value of liabilities and the entity’s own equity instruments (excluding those related to share-based payment arrangements) may be valued, where there is no
observable market price in relation to the transfer of such financial instruments, by reference to observable market information where such instruments are held as assets.
Where this information is not available, other valuation techniques are adopted and, where significant, are detailed in the respective note to the financial statements.
(v)
Financial Instruments
Recognition and Initial Measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to
the date that the entity commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transactions costs except where the instrument is classified ‘at fair value through profit or loss’ in which case
transaction costs are expensed to profit or loss immediately.
21
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 1
Summary of Significant Accounting Policies (continued)
(v)
Financial Instruments (continued)
Classification and Subsequent Measurement
Financial instruments are subsequently measured at fair value, amortised cost using the effective interest method, or cost.
Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at initial recognition less principal repayments and any reduction for
impairment, and adjusted for any cumulative amortisation of the difference between that initial amount and the maturity amount calculated using the "effective interest
method".
The effectiveinterestmethod is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that discounts estimated future cash
payments or receipts (including fees, transaction costs and other premiums or discounts) over the expected life (or when this cannot be reliably predicted, the contractual
term) of the financial
liability. Revisions to expected future net cash flows will necessitate an
adjustment to the carrying amount with a consequential recognition of an income or expense item in profit or loss.
instrument to the net carrying amount of the financial asset or financial
The Group does not designate any interests in subsidiaries, associates or joint ventures as being subject to the requirements of Accounting Standards specifically applicable to
financial instruments.
(i)
Financial assets at fair value through profit or loss
Financial assets are classified at “fair value through profit or loss” when they are held for trading for the purpose of short-term profit taking, derivatives not held for
hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is
managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently
measured at fair value with changes in carrying amount being included in profit or loss.
(ii)
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at
amortised cost.
Gains or losses are recognised in profit or loss through the amortisation process and when the financial asset is derecognised.
(iii)
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Group’s intention to hold
these investments to maturity. They are subsequently measured at amortised cost.
Gains or losses are recognised in profit or loss through the amortisation process and when the financial asset is derecognised.
(iv)
Available-for-sale investments
Available-for-sale investments are non-derivative financial assets that are either not capable of being classified into other categories of financial assets due to their nature
or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or
determinable payments.
They are subsequently measured at fair value with any remeasurements other than impairment losses and foreign exchange gains and losses recognised in other
comprehensive income. When the financial asset is derecognised, the cumulative gain or loss pertaining to that asset previously recognised in other comprehensive
income is reclassified into profit or loss.
Available-for-sale financial assets are classified as non-current assets when they are not expected to be sold within 12 months after the end of the reporting period. All
other available-for-sale financial assets are classified as current assets.
22
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 1
Summary of Significant Accounting Policies (continued)
(v)
Financial Liabilities
Non-derivative financial liabilities other than financial guarantees are subsequently measured at amortised cost. Gains or losses are recognised in profit or loss through the
amortisation process and when the financial liability is derecognised.
Derivative instruments
The Group designates certain derivatives as either:
(i)
(ii)
hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge); or
hedges of highly probable forecast transactions (cash flow hedge).
At the inception of the transaction the relationship between hedging instruments and hedged items, as well as the group's risk management objective and strategy for
undertaking various hedge transactions is documented.
Assessments, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly
effective in offsetting changes in fair values or cash flows of hedged items are also documented.
(i)
(ii)
Fair value hedge
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss, together with any changes in the fair value of
hedged assets or liabilities that are attributable to the hedged risk.
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is deferred to a hedge reserve in equity. The gain or
loss relating to the ineffective portion is recognised immediately in profit or loss.
Amounts accumulated in the hedge reserve in equity are transferred to profit or loss in the periods when the hedged item affects profit or loss.
Impairment
A financial asset (or a group of financial assets) is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events (a “loss
event”) having occurred, which has an impact on the estimated future cash flows of the financial asset(s).
In the case of available-for-sale financial assets, a significant or prolonged decline in the market value of the instrument is considered to constitute a loss event. Impairment
losses are recognised in profit or loss immediately. Also, any cumulative decline in fair value previously recognised in other comprehensive income is reclassified into profit or
loss at this point.
In the case of financial assets carried at amortised cost, loss events may include: indications that the debtors or a group of debtors are experiencing significant financial
difficulty, default or delinquency in interest or principal payments; indications that they will enter bankruptcy or other financial reorganisation; and changes in arrears or
economic conditions that correlate with defaults.
For financial assets carried at amortised cost (including loans and receivables), a separate allowance account is used to reduce the carrying amount of financial assets impaired
by credit losses. After having taken all possible measures of recovery, if management establishes that the carrying amount cannot be recovered by any means, at that point
the written-off amounts are charged to the allowance account or the carrying amount of impaired financial assets is reduced directly if no impairment amount was previously
recognised in the allowance account.
When the terms of financial assets that would otherwise have been past due or impaired have been renegotiated, the Group recognises the impairment for such financial
assets by taking into account the original terms as if the terms have not been renegotiated so that the loss events that have occurred are duly considered.
Financial Guarantees
Where material, financial guarantees issued that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to
make payment when due are recognised as a financial liability at fair value on initial recognition.
The fair value of financial guarantee contracts has been assessed using a probability-weighted discounted cash flow approach. The probability has been based on:
– the likelihood of the guaranteed party defaulting during the next reporting period;
– the proportion of the exposure that is not expected to be recovered due to the guaranteed party defaulting; and
– the maximum loss exposure if the guaranteed party were to default.
Financial guarantees are subsequently measured at the higher of the best estimate of the obligation in accordance with AASB 137: Provisions, Contingent Liabilities and
Contingent Assets and the amount initially recognised less, when appropriate, cumulative amortisation in accordance with AASB 118: Revenue. Where the entity gives
guarantees in exchange for a fee, revenue is recognised in accordance with AASB 118.
Derecognition
Financial assets are derecognised when the contractual rights to receipt of cash flows expire or the asset is transferred to another party whereby the entity no longer has any
significant continuing involvement in the risks and benefits associated with the asset. Financial
liabilities are derecognised when the related obligations are discharged,
cancelled or have expired. The difference between the carrying amount of the financial liability extinguished or transferred to another party and the fair value of consideration
paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.
23
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 1
Summary of Significant Accounting Policies (continued)
(w)
Earnings Per Share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Skydive the Beach Group Limited, excluding any costs of servicing equity other than
ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the
financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other
financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to
dilutive potential ordinary shares.
(x)
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 relevant tax authority.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the relevant tax authority is
included with other receivables or payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the
relevant tax authority are presented as operating cash flows included in receipts from customers or payments to suppliers.
(y)
Operating Segments
Operating segments are presented using the 'management approach', where the information presented is on the same basis as the internal reports provided to the Chief
Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to operating segments and assessing their performance.
(z)
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.
Where the Group retrospectively applies an accounting policy, makes a retrospective restatement or reclassifies items in its financial statements, an additional (third) statement
of financial position as at the beginning of the preceding period in addition to the minimum comparative financial statement is presented.
(aa)
Rounding of Amounts
The company is of a kind referred to in Corporations Instruments 2016/191 issued by ASIC, relating to (rounding off). Amounts in this report have been rounded off in
accordance with that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
(ab) New Accounting Standards for Application in Future Periods
Accounting Standards issued by the AASB that are not yet mandatorily applicable to the Group, together with an assessment of the potential impact of such pronouncements
on the Group when adopted in future periods, are discussed below:
—
AASB 9: Financial Instruments and associated Amending Standards (applicable to annual reporting periods beginning on or after 1 January 2018).
The Standard will be applicable retrospectively (subject to the provisions on hedge accounting outlined below) and includes revised requirements for the classification and
measurement of financial instruments, revised recognition and derecognition requirements for financial instruments and simplified requirements for hedge accounting.
The key changes that may affect the Group on initial application include certain simplifications to the classification of financial assets, simplifications to the accounting of
embedded derivatives, upfront accounting for expected credit loss, and the irrevocable election to recognise gains and losses on investments in equity instruments that
are not held for trading in other comprehensive income. AASB 9 also introduces a new model for hedge accounting that will allow greater flexibility in the ability to hedge
risk, particularly with respect to hedges of non-financial items. Should the entity elect to change its hedge policies in line with the new hedge accounting requirements of
the Standard, the application of such accounting would be largely prospective.
Although the directors anticipate that the adoption of AASB 9 may have an impact on the Group’s financial instruments, including hedging activity, it is impracticable at
this stage to provide a reasonable estimate of such impact however it is unlikely the adoption of this standard will have a material impact on the financial statements.
—
AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods beginning on or after 1 January 2018, as deferred by AASB 2015-8:
Amendments to Australian Accounting Standards – Effective Date of AASB 15).
When effective, this Standard will replace the current accounting requirements applicable to revenue with a single, principles-based model. Except for a limited number of
exceptions, including leases, the new revenue model in AASB 15 will apply to all contracts with customers as well as non-monetary exchanges between entities in the
same line of business to facilitate sales to customers and potential customers. 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 the goods or
services. To achieve this objective, AASB 15 provides the following five-step process:
- identify the contract(s) with a customer;
- identify the performance obligations in the contract(s);
- determine the transaction price;
- allocate the transaction price to the performance obligations in the contract(s); and
- recognise revenue when (or as) the performance obligations are satisfied.
The transitional provisions of this Standard permit an entity to either: restate the contracts that existed in each prior period presented per AASB 108: Accounting Policies,
Changes in Accounting Estimates and Errors (subject to certain practical expedients in AASB 15); or recognise the cumulative effect of
retrospective application to
incomplete contracts on the date of initial application. There are also enhanced disclosure requirements regarding revenue.
Although the directors anticipate that the adoption of AASB 15 may have an impact on the Group's financial statements, it is impracticable at this stage to provide a
reasonable estimate of such impact. The total impact of AASB15 is not expected to have a material effect on the results of the group as a whole given that the deferred
revenue is only approximately $900,000 and the administration fee recognised in relation to deferred revenue is only approximately $500,000.
24
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 1
Summary of Significant Accounting Policies (continued)
(ab) New Accounting Standards for Application in Future Periods (continued)
—
AASB 16: Leases (applicable to annual reporting periods beginning on or after 1 January 2019).
When effective, this Standard will replace the current accounting requirements applicable to leases in AASB 117: Leases and related Interpretations. AASB 16 introduces a
single lessee accounting model that eliminates the requirement for leases to be classified as operating or finance leases.
The main changes introduced by the new Standard include:
- recognition of a right-to-use asset and liability for all leases (excluding short-term leases with less than 12 months of tenure and leases relating to low-value assets);
- depreciation of right-to-use assets in line with AASB 116: Property, Plant and Equipment in profit or loss and unwinding of the liability in principal and interest
components;
- variable lease payments that depend on an index or a rate are included in the initial measurement of the lease liability using the index or rate at the commencement
date;
- by applying a practical expedient, a lessee is permitted to elect not to separate non-lease components and instead account for all components as a lease; and
- additional disclosure requirements.
The transitional provisions of AASB 16 allow a lessee to either retrospectively apply the Standard to comparatives in line with AASB 108 or recognise the cumulative effect
of retrospective application as an adjustment to opening equity on the date of initial application.
The directors anticipate that the adoption of AASB 16 will impact the Group's financial statements with the effect being the likely inclusion of a right to use asset of
approximately $2.5M and corresponding liability.
—
AASB 2014-3: Amendments to Australian Accounting Standards – Accounting for Acquisitions of Interests in Joint Operations (applicable to annual reporting periods
beginning on or after 1 January 2016).
This Standard amends AASB 11: Joint Arrangements to require the acquirer of an interest (both initial and additional) in a joint operation in which the activity constitutes
a business, as defined in AASB 3: Business Combinations, to apply all of the principles on business combinations accounting in AASB 3 and other Australian Accounting
Standards except for those principles that conflict with the guidance in AASB 11; and disclose the information required by AASB 3 and other Australian Accounting
Standards for business combinations.
The application of AASB 2014-3 will result in a change in accounting policies for the above described transactions, which were previously accounted for as acquisitions of
assets rather than applying the acquisition method per AASB 3.
The transitional provisions require that the Standard should be applied prospectively to acquisitions of interests in joint operations occurring on or after 1 January 2016.
As at 30 June 2017, management is not aware of the existence of any such arrangements that would impact the financial statements of the entity going forward and as
such is not capable of providing a reasonable estimate at this stage of the impact on initial application of AASB 2014-3.
—
AASB 2014-10: AmendmentstoAustralianAccountingStandards–SaleorContributionofAssetsbetweenanInvestoranditsAssociateorJointVenture (applicable to
annual reporting periods beginning on or after 1 January 2018, as deferred by AASB 2015-10: Amendments to Australian Accounting Standards – Effective Date of
Amendments to AASB 10 and AASB 128).
This Standard amends AASB 10: ConsolidatedFinancialStatements with regards to a parent losing control over a subsidiary that is not a "business" as defined in AASB 3
to an associate or joint venture, and requires that:
●
●
●
a gain or loss (including any amounts in other comprehensive income (OCI)) be recognised only to the extent of the unrelated investor’s interest in that
associate or joint venture;
the remaining gain or loss be eliminated against the carrying amount of the investment in that associate or joint venture; and
any gain or loss from remeasuring the remaining investment in the former subsidiary at fair value also be recognised only to the extent of the unrelated
investor’s interest in the associate or joint venture. The remaining gain or loss should be eliminated against the carrying amount of the remaining investment.
The application of AASB 2014-10 will result in a change in accounting policies for transactions of loss of control over subsidiaries (involving an associate or joint venture)
that are businesses per AASB 3 for which gains or losses were previously recognised only to the extent of the unrelated investor’s interest.
The transitional provisions require that the Standard should be applied prospectively to sales or contributions of subsidiaries to associates or joint ventures occurring on or
after 1 January 2018. Although the directors anticipate that the adoption of AASB 2014-10 may have an impact on the Group's financial statements, it is impracticable at
this stage to provide a reasonable estimate of such impact, however it is not expected to have any material effect.
25
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 2
Critical Accounting Estimates and Judgements
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements.
Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements,
estimates and assumptions on historical experience and on other various factors, including expectations of future events that management believe to be reasonable under the
circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below.
(a)
Impairment - General
The Group assesses impairment at the end of each reporting period by evaluating conditions and events specific to the Group that may be indicative of impairment triggers.
Recoverable amounts of relevant assets are reassessed using value-in-use calculations which incorporate various key assumptions.
The impairment assessment uses forecast pre-tax EBITDA as an approximation of future cash flows which are based on the Group's latest financial forecast. Growth rates of
3% have been factored into valuation models for the next five years on the basis of management’s expectations regarding the Group’s continued ability to capture market
share from competitors. Cash flow growth rates of 3% subsequent to this period have been used as this reflects historical industry averages. The rates used incorporate an
allowance for inflation. Pre-tax discount rates of 10.9% have been used in all models.
No impairment has been recognised in respect of goodwill at the end of the reporting period.
(b)
(c)
Estimation of Useful Lives and Residual Values of Assets
The consolidated entity determines the estimated useful lives, residual values and related depreciation and amortisation charges for its property, plant and equipment and finite
life intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase
where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written
down. Residual values may also vary depending on market and other economic considerations.
Carrying Value of property, plant and equipment
The Group revalued its aircraft at as at 30 June 2015. Additions since then are carried at cost, with changes in fair value being recognised in the asset revaluation reserve in
equity. The Group engaged an independent valuation specialist to assess the fair value of the aircraft as at 30 June 2015. The valuation methodology was performed on a sight
unseen basis using market-based evidence, using comparable prices adjusted for specific market factors such as nature, location and condition of the assets. The key
assumptions used to determine the fair value of assets are provided in Note 34. The company has acquired a number of additional aircraft and vessels through its numerous
business combinations. There is a degree of judgement required in estimating the fair values of assets acquired, and where appropriate, Management engage professional
valuers to assist.
(d)
Income tax
The consolidated entity is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in determining the provision for income tax. There
are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The consolidated entity
recognises liabilities for anticipated tax audit issues based on the consolidated entity's current understanding of the tax law. Where the final tax outcome of these matters is
different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made.
(e)
Employee benefits provision
As discussed in note 1(m), the liability for employee benefits expected to be settled more than 12 months from the reporting date are recognised and measured at the present
value of the estimated future cash flows to be made in respect of all employees at the reporting date. In determining the present value of the liability, estimates of attrition
rates and pay increases through promotion and inflation have been taken into account.
(f)
Business combinations
As discussed in note 1(a), business combinations are initially accounted for on a provisional basis. The fair value of assets acquired, liabilities and contingent liabilities assumed
are initially estimated by the consolidated entity taking into consideration all available information at the reporting date. Fair value adjustments on the finalisation of the
business combination accounting is retrospective, where applicable, to the period the combination occurred and may have an impact on the assets and liabilities, depreciation
and amortisation reported.
The purchase price in respect of the acquisition of Australia Skydive Pty Limited is to be adjusted by a working capital allowance referred to as the "SCACL Adjustment". The
amount is currently being negotiated and the Director's have used their judgement to determine the amounts due in this regard. The final settlement of this amount may
differ to the amounts provided for, in which case the goodwill will be adjusted accordingly.
(g)
(h)
Fair value measurement hierarchy
The consolidated entity is required to classify all assets and liabilities, measured at fair value, using a three level hierarchy, based on the lowest level of input that is significant
to the entire fair value measurement, being: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date; Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3:
Unobservable inputs for the asset or liability. Considerable judgement is required to determine what is significant to fair value and therefore which category the asset or liability
is placed in can be subjective.
Deferred revenue and breakage
Revenue from the sale of prepaid tandem skydives is recognised when the services are provided, when a gift card has expired, or when the gift card of prepaid jump is no
longer expected to be redeemed. The key assumption in measuring the liability for unredeemed gift cards and prepaid bookings is the expected redemption rates by
customers, which are reviewed based on historical information. Any reassessment of expected redemption rates in a particular period impacts the revenue recognised. Any
foreseeable change in the estimate is unlikely to have a material impact on the financial statements.
26
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 3
Parent Information
The following information has been extracted from the books and records of the parent and has been prepared in accordance with Australian
Accounting Standards.
STATEMENT OF FINANCIAL POSITION
ASSETS
Current Assets
Non-current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Non-current Liabilities
TOTAL LIABILITIES
EQUITY
Issued Capital
Retained earnings
Capital profits reserve
Financial assets reserve
Revaluation surplus
Reserves
Option reserve
General reserve
TOTAL EQUITY
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Total profit
Total comprehensive income
Guarantees
No financial guarantees have been entered into by the parent entity.
Contingent liabilities
There were no contingent liabilities as at 30 June 2016 or 30 June 2017.
Contractual commitments
There were no contractual commitments as at 30 June 2016 or 30 June 2017.
Note 4
Revenue and Other Income
Sales revenue
—
sale of goods
Other revenue
—
—
interest received
other revenue
Total revenue
Interest revenue from:
directors
other persons
—
—
Total interest revenue on financial assets not at fair value through profit or loss
Note 5
Profit for the Year
Profit before income tax from continuing operations includes the following specific expenses:
Cost of sales
Interest expense on financial liabilities not at fair value through profit or loss:
—
—
related parties
Unrelated parties
Total interest expense
—
Other finance costs
Total finance cost
Foreign currency translation gains
Employee benefits expense
Bad and doubtful debts:
—
trade receivables
Total bad and doubtful debts
Rental expense on operating leases
minimum lease payments
—
Loss on disposal of property, plant and equipment
Depreciation and amortisation expense
27
2017
$000
2016
$000
45,531
39,007
84,538
2,120
14,524
16,644
84,321
(14,863)
-
-
-
109
-
-
69,567
(4,791)
(4,791)
51,739
10,650
62,389
3,269
24
3,293
65,231
(6,148)
-
-
-
13
-
-
59,096
(4,020)
(4,020)
Note
Consolidated Group
2017
$000
2016
$000
89,566
89,566
170
851
1,021
58,473
58,473
140
1,122
1,262
90,587
59,735
30(c)
63
107
170
70
70
140
51,469
31,739
-
1,074
1,074
181
1,255
31
-
637
637
32
669
47
21,041
11,637
-
-
197
197
1,429
1,563
-
117
6,165
3,599
22
2017
$000
2016
$000
4,021
428
(363)
4,086
2,970
(939)
-
2,031
4,070
2,757
259
12
32
55
(57)
4,371
(685)
496
8
(105)
4,086
30.1%
182
21
91
31
(63)
3,019
-
(937)
8
(59)
2,031
22.1%
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 6
Tax Expense
(a)
The components of tax (expense) income comprise:
Current tax
Deferred tax
Over provision of tax from prior years
(b)
The prima facie tax on profit from ordinary activities before income tax is reconciled to income tax as follows:
Prima facie tax payable on profit from ordinary activities before income tax at 30% (2016: 30%)
Add:
Tax effect of:
—
—
—
—
—
non-deductible depreciation and amortisation
non-allowable items
deductible acquisition costs
assessable income received in advance
deductible maintenance costs
Less:
Tax effect of:
—
—
—
—
Over provision of tax from prior years
recognition of deferred tax balances
impact of foreign exchange differences
impact of lower tax rates applicable to New Zealand
subsidiaries
Income tax attributable to entity
The applicable weighted average effective tax rates are as follows:
(c)
Tax effects relating to each component of other comprehensive income:
Consolidated Group
Revaluation of property, plant and equipment
Exchange differences on translating foreign
operations
Note
25
Note 7
Key Management Personnel Compensation
Before-tax
amount
$000
2017
Tax (expense)
benefit
$000
Net-of-tax
amount
$000
Before-tax
amount
$000
2016
Tax (expense)
benefit
$000
Net-of-tax
amount
$000
-
(166)
(166)
-
-
-
-
(166)
(166)
(654)
(101)
(755)
196
-
196
(458)
(101)
(559)
Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration paid or payable to each member of the Group’s key management personnel
(KMP) for the year ended 30 June 2017.
The totals of remuneration paid to KMP of the company and the Group during the year are as follows:
Short-term employee benefits
Post-employment benefits
Other long term benefits
Termination benefits
Share-based payments
Total KMP compensation
2017
$000
2016
$000
1,546
67
-
-
-
1,613
1,561
90
-
-
-
1,651
Short-term employee benefits
–
these amounts include fees and benefits paid to the non-executive chair and non-executive directors as well as all salary, paid leave benefits, fringe benefits and cash
bonuses awarded to executive directors and other key management personnel.
Post-employment benefits
–
these amounts are the current year’s estimated costs of providing for the Group's defined benefits scheme post-retirement, superannuation contributions made during the
year and post-employment life insurance benefits.
Other long-term benefits
–
these amounts represent long service leave benefits accruing during the year, long-term disability benefits, and deferred bonus payments.
Share-based payments
–
these amounts represent the expense related to the participation of KMP in equity-settled benefit schemes as measured by the fair value of the options, rights and shares
granted on grant date.
Further information in relation to KMP remuneration can be found in the Director’s Remuneration Report.
28
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 8
Auditor’s Remuneration
Remuneration of the auditor for:
—
—
—
auditing or reviewing the financial report
taxation services
due diligence services
Note 9
Dividends
Dividends paid
On 30 September 2016, a fully franked dividend of $0.01 per share was paid out of retained profits at 30 June 2016
Consolidated Group
2017
$000
2016
$000
221
312
147
680
182
193
101
476
$000
$000
3,963
2,937
(a)
The Directors have declared a final and fully franked dividend of $0.01 per share, amounting to $4,348,777, payable on 29 September 2017. For the purposes of determining
any entitlement to the dividend, the record date has been set as 18 September 2017.
(b)
Balance of franking account at year end adjusted for franking credits arising from:
—
payment of provision for income tax
Subsequent to year-end, the franking account would be reduced by the proposed dividend reflected per (a) as follows:
(c)
Net balance in (b) above excludes franking credits arising from tax payments made subsequent to 30 June 2017.
Note 10
Earnings Per Share
(a)
Earnings used to calculate basic and diluted EPS
(b)
Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS
Weighted average number of dilutive options outstanding
Weighted average number of dilutive converting preference shares on issue
Weighted average number of ordinary shares outstanding during the year used in calculating dilutive EPS
Basic earnings per share (cents)
Diluted earnings per share (cents)
Note 11
Cash and Cash Equivalents
Cash at bank and on hand
Short-term bank deposits
4,497
(1,864)
2,633
885
(1,698)
(813)
9,482
7,158
No.
No.
423,925,384
10,300,000
-
434,225,384
341,351,567
10,300,000
-
351,651,567
2.24
2.18
2.10
2.04
33
9,464
26
9,490
12,796
23
12,819
The effective interest rate on short-term bank deposits was 2.5% (2016: 3.7% p.a); these deposits have an average maturity of 365 days.
Reconciliation of cash
Cash 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 and cash equivalents
A floating charge over cash and cash equivalents has been provided for certain debts. Refer to Note 21 for further details.
Note 12
Trade and Other Receivables
9,490
9,490
12,819
12,819
CURRENT
Trade receivables
Provision for impairment
Other receivables
Amounts receivable from related parties
—
directors of parent entity
Total current trade and other receivables
NON-CURRENT
Amounts receivable from related parties:
—
directors of parent entity
Total non-current trade and other receivables
(a)
Provision For Impairment of Receivables
Movement in the provision for impairment of receivables is as follows:
Consolidated Group
Current trade receivables
Consolidated Group
Current trade receivables
29
Note
Consolidated Group
2017
$000
2016
$000
12a
30
30
2,917
-
2,917
1,123
4,040
300
4,340
1,229
(3)
1,226
969
2,195
288
2,483
1,153
1,153
1,495
1,495
Opening
Balance
01.07.15
$000
Charge for the
Year
Amounts Written
Off
$000
$000
Closing Balance
30.06.16
$000
16
16
197
197
(210)
(210)
3
3
Opening
Balance
01.07.16
$000
Charge for the
Year
Amounts Written
Off
$000
$000
Closing Balance
30.06.17
$000
3
3
-
-
(3)
(3)
-
-
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 12
Trade and Other Receivables (continued)
Credit risk
The Group has no significant concentration of credit risk with respect to any single counter party or group of counter parties other than those receivables specifically provided for and
mentioned within Note 12. The class of assets described as Trade and Other Receivables is considered to be the main source of credit risk related to the Group.
The following table details the Group’s trade and other receivables exposed to credit risk (prior to collateral and other credit enhancements) with ageing analysis and impairment
provided for thereon. Amounts are considered as ‘past due’ when the debt has not been settled with the terms and conditions agreed between the Group and the customer or
counter party to the transaction. Receivables that are past due are assessed for impairment by ascertaining solvency of the debtors and are provided for where there are specific
circumstances indicating that the debt may not be fully repaid to the Group.
The balances of receivables that remain within initial trade terms (as detailed in the table) are considered to be of high credit quality.
Consolidated Group
2017
Trade and term receivables
Other receivables
Total
Consolidated Group
2016
Trade and term receivables
Other receivables
Total
Gross Amount
$000
2,917
1,123
4,040
Past due and
impaired
$000
-
-
-
Gross Amount
$000
1,229
969
2,198
Past due and
impaired
$000
3
-
3
<30
$000
<30
$000
Past due but not impaired
(days overdue)
31-60
$000
61-90
$000
165
-
165
29
-
29
Past due but not impaired
(days overdue)
31-60
$000
61-90
$000
114
-
114
59
-
59
542
-
542
192
-
192
>90
$000
273
-
273
Within initial
trade terms
$000
1,908
1,123
3,031
>90
$000
Within initial
trade terms
$000
768
969
1,737
93
-
93
(b)
Amounts receivable from related parties
Amounts received from related parties represents unsecured loans to Boucaut Enterprises Pty Ltd as trustee for Boucaut Family Trust ("the Borrower"), a related entity
associated with Anthony Boucaut (Executive Director), the terms of which have been disclosed in Note 30).
(c)
Financial Assets Classified as Loans and Receivables
Trade and other Receivables
— Total current
— Total non-current
Total financial assets classified as loans and receivables
(d)
Collateral Pledged
A floating charge over trade receivables has been provided for certain debts. Refer to Note 21 for further details.
Note 13
Inventories
CURRENT
At cost:
Raw materials, spares and merchandise
Note 14
Other Assets
CURRENT
Prepayments
Deposits paid for business acquisitions not yet completed
Deposit paid for aircraft not delivered at 30 June 2017
Other current assets
Note
33
Consolidated Group
2017
$000
2016
$000
4,340
1,153
5,493
2,483
1,495
3,978
Note
Consolidated Group
2017
$000
2016
$000
2,525
1,486
1,380
80
1,475
770
3,705
1,693
9,948
-
358
11,999
On 1 July 2016, the Group acquired all the share capital and assets of Skydive Wanaka Limited, being a skydiving operation in Wanaka, New Zealand. Consideration for this
acquisition was NZ$10.4 million (of which AU$9.948 million was paid as a deposit with the company's solicitors prior to 30 June 2016).
On 2 August 2017, the Group acquired all the share capital and assets of Byron Bay Ballooning Pty Ltd. Consideration for this acquisition was $800,000 ($80,000 of which was paid
as a deposit prior to 30 June 2017).
Note 15
Other Financial Assets
NON-CURRENT
Available-for-sale financial assets
Total non-current assets
(a)
Available-for-sale financial assets
NON-CURRENT
Unlisted investments, at cost
shares in other corporations
—
Total available-for-sale financial assets
15a
33
38
38
38
38
27
27
27
27
30
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 16
Interests in Subsidiaries
(a)
Information about Principal Subsidiaries
The subsidiaries listed below have share capital consisting solely of ordinary shares or ordinary units which are held directly by the Group. The proportion of ownership interests
held equals the voting rights held by Group. Each subsidiary’s principal place of business is also its country of incorporation.
Ownership interest
Name of subsidiary
Aircraft Maintenance Centre Pty Ltd
Australia Skydive Pty Ltd
B & B No 2 Pty Ltd
Bill & Ben Investments Pty Ltd
Skydive Holdings Pty Ltd
Skydive the Beach and Beyond Airlie Beach Pty Ltd
Skydive the Beach and Beyond BB Pty Ltd
Skydive the Beach and Beyond Central Coast Pty Ltd
Skydive the Beach and Beyond Great Ocean Road Pty Ltd
Skydive the Beach and Beyond Hunter Valley Pty Ltd
Skydive the Beach and Beyond Melbourne Pty Ltd
Skydive the Beach and Beyond Newcastle Pty Ltd
SBB Trading Pty Ltd (formerly known as Skydive the Beach and Beyond Perth Pty Ltd)
Skydive the Beach and Beyond Sydney Wollongong Pty Ltd
Skydive the Beach and Beyond Yarra Valley Pty Ltd
Skydive.com.au Pty Ltd
STBAUS Pty Ltd
Skydive International Holdings Pty Ltd
Skydive Investments Pty Ltd
Skydive (New Zealand) Limited
Skydive Queenstown Limited
Skydive Glenorchy Limited
Parachute Adventure Queenstown Limited
Skydive Wanaka Limited
Performance Aviation Limited
Raging Thunder Pty Ltd
Fitzroy Island Ferries Pty Ltd
Fitzroy Island Pty Ltd
Martheno Pty Ltd
Raging Thunder Retail Pty Ltd
White Water Rafting Qld Pty Ltd
Raging Thunder Balloon Adventures Pty Ltd
Rescue Training Group Pty Ltd
ILB Pty Ltd
Reef Magic Cruises Pty Ltd
Principal place of business
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
2017
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2016
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Subsidiary financial
financial statements.
information used in the preparation of these consolidated financial statements has also been prepared as at the same reporting date as the Group’s
(b)
Significant Restrictions
Other than banking covenants imposed as per note 21, there are no significant restrictions over the Group’s ability to access or use assets, and settle liabilities, of the Group.
(c)
Acquisition of Controlled Entities
(i)
On 1 July 2016, Skydive (New Zealand) Limited, a wholly-owned subsidiary, acquired Skydive Wanaka Limited , being a company registered and trading within New Zealand,
for the consideration of NZ$10,400,000, including the purchase of loan accounts of NZ$ 1,699,607.
Fair value of purchase consideration:
Cash
Loans acquired
Assets and liabilities held at acquisition date:
- Current assets
- Non-current assets
- Current liabilities
- Non-current liabilities
Goodwill and other intangible assets
$000
10,095
(1,637)
8,458
316
2,780
(1,100)
(785)
1,211
7,247
(ii)
On 3 October 2016, Skydive (New Zealand) Limited, a wholly-owned subsidiary, acquired Performance Aviation Limited, being a company registered and trading within New
Zealand, for the consideration of NZ$500,000.
Fair value of purchase consideration:
Cash
Less:
- Current assets
- Non-current assets
- Current liabilities
- Non-current liabilities
Goodwill
31
482
120
68
-
-
188
294
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 16
Interests in Subsidiaries (continued)
(c)
Acquisition of Controlled Entities (continued)
(iii)
On 31 October 2016, Skydive the Beach Group Limited acquired Raging Thunder Adventures, being a company registered and trading within Australia, for the consideration of
$15,440,000, including the purchase of loan accounts of $3,300,000.
Fair value of purchase consideration:
Cash
Loans acquired
Assets and liabilities held at acquisition date:
- Current assets
- Non-current assets
- Current liabilities
- Non-current liabilities
Goodwill and other intangible assets
$000
15,440
(3,300)
12,140
1,344
3,854
(2,567)
(3,300)
(669)
12,809
(iv)
On 1 May 2017, Skydive the Beach Group Limited acquired Reef Magic Cruises Pty Ltd, being a company registered and trading within Australia, for the consideration of
$15,000,000, including the purchase of loan accounts of $1,279,000.
Fair value of purchase consideration:
Cash
Working Capital and other adjustments
Assets and liabilities held at acquisition date:
- Current assets
- Non-current assets
- Current liabilities
Goodwill and other intangible assets
15,000
1,493
16,493
2,551
10,547
(1,296)
11,801
4,692
(v)
On 1 May 2017 the Group acquired ILB Pty Ltd, an information technology implementation, maintenance and support business, which has provided services to the Group
for more than 10 years. Consideration for the acquisition was $850,000.
Fair value of purchase consideration:
Cash
Shares issued (Skydive The Beach Group Limited)
Goodwill and other intangible assets
(vi)
On 10 February 2017 the Group acquired Rescue Training Group, a marine rescue training business. Consideration for the acquisition was $120,000.
Fair value of purchase consideration:
Cash
Goodwill and other intangible assets
Total consideration in relation to business acquisitions
Less deposit for Skydive Wanaka paid in 2016 year (NZ $10.4M, AU$ 9.948M)
Total cash paid for business acquisitions
350
500
850
850
120
120
41,487
9,948
31,539
(d)
Subsequent Event
On 2 August 2017, the Group acquired all the share capital and assets of Byron Bay Ballooning. Consideration for this acquisition was $800,000 ($80,000 of which was paid as
a deposit prior to 30 June 2017).
32
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 16
Interests in Subsidiaries (continued)
(e)
Business Combinations
The EBITDA for the year ended 30 June 2017 increased by 56.0% when compared to the year ended 30 June 2016. When comparing the EBITDA for the 12 months to 30
June 2017 set out below is the number of months trading from major acquisitions year on year:
Skydive Queenstown Limited and its associated entities purchased on 30 October 2015
Skydive Wanaka Limited purchased on 01 July 2016
Raging Thunder Adventures purchased on 31 October 2016
Reef Magic Cruises Pty Ltd purchased on 1 May 2017
Revenue Contributed by New Acquisitions to the Group ($'000)
Profit Contributed by New Acquisitions to the Group ($'000)
Esimated Profit that would have been contributed by New Acquisitions to the Group if they were held from
the start of the year ($'000)
30-Jun-17
12 months
12 months
8 months
2 months
$21,497
$3,020
$5,875
30-Jun-16
8 months
NIL
NIL
NIL
-
-
-
The primary rationale for all acquisitions was to expand the company's market share and to become the leading adventure tourism business in the global marketplace. The
Wanaka acquisition was a business that had enjoyed sustainable organic growth for a number of years prior to completion, and also provided an opportunity for the Groups
existing Queenstown operation to take advantage of the historically kinder weather conditions experienced in Wanaka, by having the ability to transfer customers between
locations to reduce the risk exposure to adverse weather conditions. The Raging Thunder Adventures and Reef Magic Cruises acquisitions provided the first opportunity for the
Group to diversify its product offerings for customers into new markets, albeit still in adventure tourism. The acquisitions in Cairns provide an opportunity to leverage the
geographical concentration of tourists in North Queensland and to become one of the leading tourist operators in the region. Additional synergies are expected around the cost
reduction in marketing, administration and corporate costs for the Group.
Note 17
Property, Plant and Equipment
LAND AND BUILDINGS
Freehold land at:
At cost
Total land
Buildings at:
At cost
Accumulated depreciation
Total buildings
Total land and buildings
PLANT AND EQUIPMENT
Plant and equipment:
At cost
Accumulated depreciation
Leasehold improvements
At cost
Accumulated amortisation
Aircraft:
At revalued amounts and cost
Accumulated depreciation
Motor vehicles:
At cost
Accumulated depreciation
Office equipment:
At cost
Accumulated depreciation
Vessels:
At cost
Accumulated depreciation
Floating Docks:
At cost
Accumulated depreciation
Total plant and equipment
Total property, plant and equipment
Consolidated Group
2017
$000
2016
$000
646
646
3,542
(70)
3,473
4,119
9,647
(2,305)
7,342
1,986
(616)
1,370
48,773
(5,667)
43,105
4,019
(900)
3,119
1,179
(648)
531
9,285
(134)
9,151
1,656
(22)
1,633
340
340
844
(9)
835
1,175
6,367
(1,508)
4,859
1,029
(354)
675
34,135
(2,879)
31,256
1,788
(476)
1,312
696
(470)
226
-
-
-
-
-
-
66,251
38,328
70,370
39,503
* The Group's aircraft assets were revalued at 30 June 2015 by independent valuers. Refer to Note 34 for detailed disclosures regarding the fair value measurement of the Group's
assets.
33
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 17
Property, Plant and Equipment (continued)
(a)
Movements in Carrying Amounts
Movements in carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year.
Land
$000
Buildings
$000
Plant &
Equipment
$000
Leasehold
Improvements
$000
Aircraft
$000
Motor Vehicles
$000
Office
Equipment
$000
Vessels
$000
Floating Docks
$000
Total
$000
Consolidated
Balance at 1 July
2015
Acquisitions
through business
combinations
Additions
Revaluation
increments
Disposals
Depreciation
expense
Transfers between
asset classes
Balance at 30 June
2016
Acquisitions
through business
combinations
Additions
Revaluation
increments
Disposals
Depreciation
expense
Transfers between
asset classes
Balance at 30 June
2017
-
-
-
-
-
-
-
6,041
636
19,066
1,011
129
237
99
340
607
1,513
-
-
-
-
-
-
(9)
-
(677)
(162)
(1,363)
(592)
8
68
-
-
14
(51)
5,397
8,454
26
(552)
816
55
515
(71)
(30)
7
2
88
-
-
136
(1,951)
(175)
(129)
340
835
4,859
675
31,256
1,312
226
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
26,883
5,798
11,585
(722)
(744)
(399)
(2,898)
39,503
-
2,315
1,735
306
377
2,081
-
-
-
(68)
881
76
-
-
1,810
12,744
-
-
123
2,054
-
-
54
408
-
-
8,922
342
-
-
1,655
17,495
-
-
-
18,388
-
(68)
(57)
(1,264)
(260)
(2,705)
(370)
(157)
(113)
(22)
(4,948)
2
-
(2)
-
-
-
-
-
-
646
3,473
7,342
1,370
43,105
3,119
531
9,151
1,633
70,370
(b)
Historical Cost
If aircraft were carried at historical cost, the estimated carrying amounts would be as follows:
Cost
Accumulated depreciation
Net book value
Consolidated Group
2017
$000
2016
$000
47,781
(29,833)
17,948
33,077
(20,064)
13,013
The Group's aircraft were revalued at 30 June 2015 by independent valuers. Valuations were made using the price that would be received to sell the asset in an orderly
transaction between market participants at the measurement date. The revaluation surplus net of applicable deferred income taxes was credited to an asset revaluation
reserve in shareholders' equity. Refer to note 34 for further information.
Note 18
Intangible Assets
Goodwill
Cost
Accumulated impaired losses
Net carrying amount
Trademarks
Cost
Accumulated amortisation and impairment losses
Net carrying amount
Computer software
Cost
Accumulated amortisation and impairment losses
Net carrying amount
Customer relationships and other intangible assets
Cost
Accumulated amortisation
Net carrying amount
Leases & Licences
Cost
Accumulated amortisation
Net carrying amount
Total intangibles
18,828
-
18,828
9,805
-
9,805
1,207
(839)
368
14,073
(1,048)
13,025
6,131
(198)
5,933
7,911
-
7,911
5,344
-
5,344
813
(491)
322
4,815
(396)
4,419
-
-
-
47,959
17,996
34
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 18
Intangible Assets (continued)
Consolidated Group:
Balance at 1 July 2015
Assets acquired in business combinations
Additions
Opening revaluation adjustment
Transfers between asset classes
Amortisation charge
Balance at 30 June 2016
Assets acquired in business combinations
Additions
Opening revaluation adjustment
Transfers between asset classes
Amortisation charge
Closing value at 30 June 2017
Goodwill
$000
Trademarks
$000
Computer
Software
$000
Customer
Relationships
and other
$000
Leases & Licences
Total
$000
3,569
4,550
-
(208)
-
-
7,911
10,917
-
-
-
-
18,828
2,000
3,344
-
-
-
-
5,344
5,428
-
-
(967)
-
9,805
247
7
159
-
210
(301)
322
388
-
-
-
(342)
368
1,808
2,303
519
-
180
(391)
4,419
8,317
-
-
967
(678)
13,025
-
-
-
-
-
-
-
6,131
-
-
-
(198)
5,933
7,624
10,204
678
(208)
390
(692)
17,996
31,181
-
-
-
(1,217)
47,959
Intangible assets, other than goodwill and trademarks, have finite useful
amortisation expense per the statement of profit or loss. Goodwill and trademarks have an indefinite useful life.
lives. The current amortisation charges for intangible assets are included under depreciation and
Impairment disclosures
Goodwill is allocated to cash-generating units which are based on the group’s reporting segments.
Australia Skydiving operations
New Zealand Skydiving operations
Other Adventure Experiences operations
Total
2017
$000
2016
$000
4,760
8,208
5,860
18,828
3,361
4,550
-
7,911
The recoverable amount of each cash-generating unit above is determined based on value-in-use calculations. Value-in-use is calculated based on the present value of cash flow
projections over a 5 year period with the period extending beyond 2 years extrapolated using an estimated growth rate. The cash flows are discounted using a pre-tax rate of 10.9%.
The following key assumptions were used in the value-in-use calculations:
Australia Skydiving operations
New Zealand Skydiving operations
Other Adventure Experiences operations
Growth Rate
Year 1-2
3%
3%
3%
Year 3-5
3%
3%
3%
Terminal
2%
2%
2%
Discount Rate
10.9%
10.9%
10.9%
Management has based the value-in-use calculations on budgets for each reporting segment. These budgets use historical weighted average growth rates to project revenue. Costs
are calculated taking into account historical gross margins as well as estimated weighted average inflation rates over the period which are consistent with inflation rates applicable to
the locations in which the segments operate. Discount rates are pre-tax and are adjusted to incorporate risks associated with a particular segment.
Note 19
Trade and Other Payables
CURRENT
Unsecured liabilities
Trade payables
Sundry payables and accrued expenses
(a)
Financial liabilities at amortised cost classified as trade and other payables
Trade and other payables
— Total current
— Total non-current
Financial liabilities as trade and other payables
Note 20
Deferred Revenue
Income received in advance
Note
Consolidated Group
2017
$000
2016
$000
3,390
3,206
6,596
6,596
-
6,596
1,085
1,577
2,662
2,662
-
2,662
891
202
33
35
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 21
Borrowings
CURRENT
Secured liabilities
Bank loans
Finance lease liabilities
Vendor finance loan
Total current borrowings
NON-CURRENT
Secured liabilities
Bank loans
Finance lease liabilities
Vendor finance loan
Total non-current borrowings
Total borrowings
(a)
Total current and non-current secured liabilities:
Bank loan
Finance lease liabilities
Vendor finance loan
21a,b
21a,b
21a,b
21a,b
86
3,400
2,204
5,692
15,137
8,795
-
23,932
64
1,985
-
2,049
763
5,330
2,204
8,297
33
29,624
10,346
15,224
12,196
2,204
29,624
827
7,315
2,204
10,346
(b)
Collateral provided
In May 2017 The Group entered into a Facility Agreement with National Australia Bank Limited (NAB).
NAB has made available to the Group the following facilities:
- AUD 20M Cash Advance Facility
- AUD 20M Master Asset Finance Facility
- AUD 240,000 Bank Guarantee Facility
- AUD 500,000 Business Card Facility
- AUD 3M Foreign Exchange & Commodity Hedging Facility
Existing NAB finance leases were transferred to the NAB Master Asset Finance Facility and existing finance leases with Westpac Banking Corporation remained in place.
As at 30 June 2017 $14.5M of the Cash Advance Facility had been utilised (to partly fund the purchase of Reef Magic Cruises).
The Westpac Banking Corporation Finance leases are secured by a charge over the assets financed. The leases are for 1-5 year terms and are repayable on a monthly basis.
Interest rates on these finance leases generally range from 4% to 9%.
To secure the facilities with NAB, the Group and NAB have entered into a General Security Deed for both the Australian and New Zealand operations. NAB holds a security
interest in and over all the secured property that the Group, with the exception of the charge on the assets secured for the Westpac Banking Corporation Finance leases. The
NAB Finance leases are for 1-5 year terms and are repayable on a monthly basis. Interest rates on these leases currently range from 4% to 8%. The Cash Advance Facility of
$20M expires on 20 May 2020. Interest is payable quarterly and interest rates on this facility currently range from 3% to 4%.
With regards the NAB facilities, at the end of each December and June reporting period, the Group is required to calculate and submit to NAB a (i) Fixed Cover Charge Ratio
and (ii) a Gross Senior Leverage Ratio. The first ratios are due to be lodged after the December 17 reporting period.
(c)
Financial assets that have been pledged as part of the total collateral for the benefit of bank debt are as follows:
Cash and cash equivalents
Trade receivables
Total financial assets pledged
Note
Consolidated Group
11
12
2017
$000
9,490
2,917
12,408
2016
$000
12,819
1,226
14,045
(d)
The vendor finance loan is the subject of a loan agreement between Skydive the Beach and Beyond Sydney-Wollongong Pty Ltd and the vendor parties in the acquisition of
Australia Skydive Pty Ltd. Interest on the loan is 6% per annum payable monthly in arrears. The principle amount and any accrued interest are repayable no later than 31
March 2018. The loan is secured by a second ranking security interest over all assets and undertakings of Australia Skydive Pty Ltd and a second ranking security interest over
all ordinary shares in Australia Skydive Pty Ltd. This loan is also subject to certain adjustments pursuant to the Share Sale Deed which may increase or decrease the balance of
the loan as disclosed in note 2(f).
Note 22
Tax
CURRENT
Income tax payable
NON-CURRENT
Consolidated Group
Deferred tax liabilities
Property, plant and equipment
Intangible assets
Provisions
Capital raising costs
Future income tax benefits attributable to tax losses
Other
Balance at 30 June 2016
Property, plant and equipment
Intangible assets
Provisions
Capital raising costs
Future income tax benefits attributable to tax losses
Other
Balance at 30 June 2017
Consolidated Group
2017
$000
2016
$000
1,338
1,338
3,078
3,078
Opening Balance
$000
Acquired in
business
acquisitions
$000
Charged to
Income
$000
Charged directly
to Equity
$000
Closing Balance
$000
2,658
-
(204)
(497)
(31)
4
1,930
1,501
(94)
(185)
(358)
-
(71)
793
-
-
-
-
-
-
-
-
3,740
-
-
-
-
3,740
(1,354)
(94)
19
139
31
(75)
(1,334)
1,219
(31)
(423)
(180)
(18)
567
197
-
-
-
-
-
197
(138)
-
-
-
-
(138)
1,501
(94)
(185)
(358)
-
(71)
793
2,720
3,477
(608)
(538)
-
(89)
4,962
36
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 23
Provisions
CURRENT
Employee Benefits
Opening balance
Amounts acquired in business combinations
Additional provisions
Amounts used
Closing Balance
NON CURRENT
Employee Benefits
Opening balance
Amounts acquired in business combinations
Additional provisions
Closing Balance
Analysis of Total Provisions
Current
Non-current
Provision for Employee Benefits
Consolidated Group
2017
$000
2016
$000
606
535
1,385
(1,036)
1,490
74
59
50
183
1,490
183
1,673
391
49
559
(393)
606
33
-
41
74
606
74
680
Provision for employee benefits represents amounts accrued for annual leave and long service leave.
The current portion for this provision includes the total amount accrued for annual leave entitlements and the amounts accrued for long service leave entitlements that have vested
due to employees having completed the required period of service. Based on past experience, the Group does not expect the full amount of annual leave or long service leave
balances classified as current liabilities to be settled within the next 12 months. However, these amounts must be classified as current liabilities since the Group does not have an
unconditional right to defer the settlement of these amounts in the event employees wish to use their leave entitlement.
The non-current portion for this provision includes amounts accrued for long service leave entitlements that have not yet vested in relation to those employees who have not yet
completed the required period of service.
The probability of long service leave being taken is based on historical data. The measurement and recognition criteria relating to employee benefits have been included in Note 1(m).
Note 24
Issued Capital
434,877,669 (2016: 396,301,350) fully paid ordinary shares
84,321
65,231
The company has authorised share capital amounting to 434,877,669 ordinary shares.
(a)
Ordinary Shares
At the beginning of the reporting period
Shares issued during the year
—
—
—
—
—
—
—
—
20 October 2015
30 October 2015
2 November 2015
20 June 2016
6 October 2016
20 October 2016
29 May 2017
Capital raising costs
At the end of the reporting period
Consolidated Group
2017
2016
$ 000's
$ 000's
Consolidated Group
2017
No.
2016
No.
65,231
32,039
396,301,350
293,729,700
-
-
-
-
18,982
644
500
(1,036)
84,321
18,613
473
969
15,003
-
-
-
(1,866)
-
-
-
-
36,504,054
1,238,932
833,333
62,042,836
1,576,974
3,230,431
35,721,409
-
-
-
-
65,231
434,877,669
396,301,350
On 20 October 2015, 62,042,836 shares were issued at $0.30 each to shareholders and institutional investors on the basis of 2 shares for every 9 shares held.
On 30 October 2015, 1,576,974 shares were issued at $0.30 each as part of the acquisition of skydiving operations in New Zealand.
On 2 November 2015, 3,230,431 shares were issued at $0.30 each to retail shareholders on the basis of 2 shares for every 9 shares held.
On 20 June 2016, 35,721,409 shares were issued at $0.42 each to institutional shareholders and investors.
On 6 October 2016, 36,504,054 shares were issued at $0.52 each to institutional investors.
On 20 October 2016, 1,238,932 shares were issued at $0.52 each to retail investors.
On 29 May 2017, 833,333 shares were issued at $0.60 each as part of the ILB Pty Ltd acquisition.
Ordinary shareholders participate in dividends and the proceeds on winding-up of the parent entity in proportion to the number of shares held. At the 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
(i)
For information relating to the Skydive the Beach Group Limited employee option plan, including details of options issued, exercised and lapsed during the financial year
and the options outstanding at year-end. Refer to Note 26: Share-based Payments.
(ii)
For information relating to share options issued to key management personnel during the financial year. Refer to Note 26: Share-based Payments.
37
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 24
Issued Capital (continued)
(c)
Capital Management
Management controls the capital of the Group in order to maintain a sustainable debt to equity ratio, generate long-term shareholder value and ensure that the Group can fund
its operations and continue as a going concern.
The Group’s debt and capital include ordinary share capital, employee share options and financial liabilities, supported by financial assets.
The Group is not subject to any externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group's financial risks and adjusting its capital structure in response to changes in these risks and in the
market. These responses include the management of debt levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year.
Total borrowings
Less cash and cash equivalents
Net debt
Total equity
Total capital
Gearing ratio
Note 25
Reserves
Note
19, 21
11
Consolidated Group
2017
$000
36,220
(9,490)
26,730
94,496
121,226
2016
$000
13,008
(12,819)
189
70,047
70,236
22.0%
0.3%
a.
b.
Asset Revaluation Reserve
The revaluation reserve records revaluations of non-current assets. Under certain circumstances dividends can be declared from this reserve.
Option Reserve
The option reserve records items recognised as expenses on valuation of employee share options.
c.
Common Control Reserve
Skydive the Beach Group Limited was incorporated on 19 December 2013 to become the parent company to the Skydive The Beach Group of Companies ('STB Group') that
were substantially owned by interests associated with the founder, Anthony Boucaut.
On 1 July 2014, the STB Group was reorganised such that all the businesses and companies in the STB Group that owned and operated the 11 drop zones, together with the
companies that owned all of the operating assets, such as aircraft, parachutes, vehicles as well as operating leases, licences, web domains and business names, etc, transferred
those businesses and assets to the companies below in return for 166,751,620 shares for a total of $8,337,581 in the parent company, such that each became a wholly owned
subsidiary of the parent company. The value ascribed to the shares was supported by an independent valuation.
The common control reserve represents the excess purchase consideration over the carrying value of assets and liabilities acquired in the group reorganisation which occurred
on 1 July 2014.
Information in the financial statements for the periods prior to the combination under common control is not restated to reflect the results of the Group prior to the date.
Below is a summary of the carrying value of assets and liabilities as at 30 June 2014 that were transferred to Skydive the Beach Group Limited:
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Carrying value of net assets acquired in group reorganisation
Fair value of purchase consideration
Common control reserve
d.
Foreign Currency Translation Reserve
The foreign currency translation reserve records exchange differences arising on translation of a foreign controlled subsidiary.
e.
Analysis of items of other comprehensive income by each class of reserve
Asset Revaluation Reserve
Opening balance
Revaluation gain/(loss) on property, plant and equipment
Option Reserve
Opening balance
Amount recognised in income statement for the year
Common Control Reserve
Opening balance
Amount acquired during the year
Foreign currency translation reserve
Opening balance
Exchange differences on translation of foreign operations
30 June 2014
$000
3,319
10,914
14,233
4,329
5,737
10,066
4,167
(8,338)
(4,171)
2,844
(458)
2,386
5
8
13
(4,171)
-
(4,171)
-
(101)
(101)
2,386
-
2,386
13
5
18
(4,171)
-
(4,171)
(101)
(165)
(266)
Total reserves
(2,033)
(1,873)
38
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 26
Share-based Payments
(i)
(ii)
(iii)
In 2015, a total of 10,300,000 share options were granted to directors under the STB Share Option Plan to take up ordinary shares at an exercise price of $0.25 each. One
third of the remaining 8,000,000 options granted to executive directors vest on 29 January 2018. All options are exercisable on vesting. The last date for exercise is 29 January
2025. The options hold no voting or dividend rights and are not transferable.
Options granted to key management personnel have been disclosed in the remuneration report.
The company established the STB Share Option Plan in February 2015 as a long term incentive scheme to attract, reward, retain and incentivise eligible participants for
contributions to the performance and success of the STB group. Invitations to participate in the plan are made at the Board's discretion and may be subject to specific terms
and conditions as the Board deems appropriate. Vesting periods are set by the Board and are to be specified in the initial invitation to participate in the plan. The options are
carry no entitlements to voting rights or dividends of the Group. The number available to be granted is determined by the Board and is based on performance measures
determined appropriate by the Board. Any unvested options will lapse at the earliest of 10 years or otherwise specified in the invitation.
Options are forfeited 60 days after the holder ceases to be employed by the Group, unless the Board determines otherwise (this is usually only in the case of redundancy,
death or disablement).
A summary of the movements of all options issued is as follows:
Opening balance at 1 July 2015
Granted
Balance at 30 June 2016
Granted
Balance at 30 June 2017
Options exercisable as at 30 June 2017:
Options exercisable as at 30 June 2016:
Weighted average exercise price:
Weighted average life of the option:
Expected share price volatility:
Risk-free interest rate:
Consolidated Group
Number
-
10,300,000
10,300,000
-
10,300,000
7,633,332
4,966,666
$0.25
5 years
30%
2.01%
Historical share price volatility has been the basis for determining expected share price volatility as it is assumed that this is indicative of future volatility.
The life of the options is based on the historical exercise patterns, which may not eventuate in the future.
(iv)
There were no shares granted to key management personnel as share based payments during the year.
Included under finance costs in the statement of profit or loss and other comprehensive income is $3,891 (2016: $8,503) which relates to the amortisation of options issued.
Note 27
Cash Flow Information
(a)
Reconciliation of Cash Flows from Operating Activities with Profit after Income Tax
Profit after income tax
Non-cash flows in profit
Depreciation and amortisation
Share options expensed
Unrealised foreign currency exchange gains/losses
Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries:
(Increase)/decrease in trade and other receivables
(Increase)/decrease in other current assets
(Increase)/decrease in inventories
Increase/(decrease) in trade and other payables
Increase/(decrease) in income taxes payable
Increase/(decrease) in deferred taxes payable
Increase/(decrease) in provisions
Cash flows from operating activities
Consolidated Group
2017
$000
2016
$000
9,482
6,165
-
(265)
(242)
(1,510)
(812)
894
(1,724)
365
287
12,640
7,158
3,599
9
(101)
(348)
(1,528)
(112)
(683)
2,118
(940)
257
9,429
(b)
Acquisition of Entities
(i)
On 30 October 2015, Skydive (New Zealand) Ltd, a wholly-owned subsidiary, acquired all the shares in Skydive Queenstown Ltd, Skydive Glenorchy Ltd and Parachute
Adventure Queenstown Ltd, being companies registered and trading within New Zealand and collectively known and marketed as NZone Skydive.
Fair Value of purchase consideration:
— Cash consideration
— Shares issued
— Loans acquired
Total investment in subsidiary
Cash consideration
Amounts due under contract of sale
Cash outflow
Assets and liabilities held at acquisition date:
- Current assets
- Non-current assets
- Current liabilities
- Non-current liabilities
Goodwill and other intangible assets on consolidation
39
Consolidated Group
2017
$000
2016
$000
-
-
-
-
-
-
-
-
-
-
-
-
-
15,672
473
(1,922)
14,223
15,672
-
15,672
542
11,460
(521)
(1,822)
9,659
4,564
14,223
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5(cid:11)(cid:19) (cid:10)(cid:4)(cid:7)(cid:4) (cid:5)(cid:11) (cid:14)(cid:20)(cid:7)(cid:21)(cid:18)(cid:13)(cid:5)(cid:11)# (cid:7)(cid:18)(cid:12)(cid:7)(cid:12) (cid:18)(cid:21)(cid:7) (cid:6)(cid:18)(cid:21)(cid:5)(cid:14)(cid:10)(cid:12) (cid:11)(cid:14)(cid:11);(cid:19)(cid:18)(cid:11)(cid:19)(cid:7) (cid:18)(cid:26) (cid:7) (cid:20)(cid:21)(cid:14)(cid:20)(cid:7)(cid:21)(cid:13)(cid:3) (cid:7)(cid:18)(cid:12)(cid:7)(cid:12) (cid:15)(cid:5)(cid:13)(cid:22) (cid:28);(cid:27)(cid:24) (cid:3)(cid:7)(cid:18)(cid:21) (cid:13)(cid:7)(cid:21)(cid:17)(cid:12)3 (cid:15)(cid:5)(cid:13)(cid:22) (cid:21)(cid:7)(cid:11)(cid:13) (cid:20)(cid:18)(cid:3)(cid:18)(cid:26) (cid:7) (cid:17)(cid:14)(cid:11)(cid:13)(cid:22) (cid:3) (cid:5)(cid:11) (cid:18)(cid:4)(cid:6)(cid:18)(cid:11)(cid:19)(cid:7)0 ((cid:14)(cid:11)(cid:13)(cid:5)(cid:11)#(cid:7)(cid:11)(cid:13) (cid:21)(cid:7)(cid:11)(cid:13)(cid:18) (cid:20)(cid:21)(cid:14)(cid:6)(cid:5)(cid:12)(cid:5)(cid:14)(cid:11)(cid:12) (cid:15)(cid:5)(cid:13)(cid:22)(cid:5)(cid:11) (cid:13)(cid:22)(cid:7)
(cid:7)(cid:18)(cid:12)(cid:7) (cid:18)#(cid:21)(cid:7)(cid:7)(cid:17)(cid:7)(cid:11)(cid:13) (cid:21)(cid:7)>(cid:10)(cid:5)(cid:21)(cid:7) (cid:13)(cid:22)(cid:18)(cid:13) (cid:17)(cid:5)(cid:11)(cid:5)(cid:17)(cid:10)(cid:17) (cid:7)(cid:18)(cid:12)(cid:7) (cid:20)(cid:18)(cid:3)(cid:17)(cid:7)(cid:11)(cid:13)(cid:12) (cid:12)(cid:22)(cid:18) (cid:26)(cid:7) (cid:5)(cid:11)(cid:19)(cid:21)(cid:7)(cid:18)(cid:12)(cid:7)(cid:4) (cid:26)(cid:3) (cid:13)(cid:22)(cid:7) (cid:14)(cid:15)(cid:7)(cid:21) (cid:14)& (cid:13)(cid:22)(cid:7) (cid:19)(cid:22)(cid:18)(cid:11)#(cid:7) (cid:5)(cid:11) (cid:13)(cid:22)(cid:7) (cid:19)(cid:14)(cid:11)(cid:12)(cid:10)(cid:17)(cid:7)(cid:21) (cid:20)(cid:21)(cid:5)(cid:19)(cid:7) (cid:5)(cid:11)(cid:4)(cid:7)4 ,()5. (cid:14)(cid:21) (cid:23);(cid:29)H (cid:20)(cid:7)(cid:21) (cid:18)(cid:11)(cid:11)(cid:10)(cid:17)0 (cid:25)(cid:20)(cid:13)(cid:5)(cid:14)(cid:11)(cid:12) (cid:7)4(cid:5)(cid:12)(cid:13) (cid:13)(cid:14)
(cid:21)(cid:7)(cid:11)(cid:7)(cid:15)(cid:8)(cid:19)(cid:7)(cid:21)(cid:13)(cid:18)(cid:5)(cid:11)(cid:8) (cid:7)(cid:18)(cid:12)(cid:7)(cid:12)(cid:8)(cid:18)(cid:13)(cid:8)(cid:13)(cid:22)(cid:7)(cid:8)(cid:7)(cid:11)(cid:4)(cid:8)(cid:14)&(cid:8)(cid:13)(cid:22)(cid:7)(cid:8)(cid:13)(cid:7)(cid:21)(cid:17)(cid:8)&(cid:14)(cid:21)(cid:8)(cid:18)(cid:11)(cid:8)(cid:18)(cid:4)(cid:4)(cid:5)(cid:13)(cid:5)(cid:14)(cid:11)(cid:18) (cid:8)(cid:28);(cid:28)(cid:29)(cid:8)(cid:3)(cid:7)(cid:18)(cid:21)(cid:12)0
,(cid:19).
(cid:24)(cid:7)(cid:6)(cid:3)(cid:11)(cid:7)(cid:8)(cid:9)"'(cid:6)(cid:13)(cid:4)(cid:19)(cid:3)(cid:11)(cid:18)(cid:2)(cid:13)(cid:9)(cid:24)(cid:21)(cid:27)(cid:27)(cid:3)(cid:11)(cid:27)(cid:13)(cid:4)(cid:11)(cid:14)
((cid:18)(cid:20)(cid:5)(cid:13)(cid:18) (cid:8)(cid:7)4(cid:20)(cid:7)(cid:11)(cid:4)(cid:5)(cid:13)(cid:10)(cid:21)(cid:7)(cid:8)(cid:19)(cid:14)(cid:17)(cid:17)(cid:5)(cid:13)(cid:17)(cid:7)(cid:11)(cid:13)(cid:12)(cid:8)(cid:19)(cid:14)(cid:11)(cid:13)(cid:21)(cid:18)(cid:19)(cid:13)(cid:7)(cid:4)(cid:8)&(cid:14)(cid:21)1
) (cid:18)(cid:11)(cid:13)(cid:8)(cid:18)(cid:11)(cid:4)(cid:8)(cid:7)>(cid:10)(cid:5)(cid:20)(cid:17)(cid:7)(cid:11)(cid:13)(cid:8)(cid:14)(cid:21)(cid:4)(cid:7)(cid:21)(cid:7)(cid:4)(cid:8)(cid:18)(cid:11)(cid:4)(cid:8)(cid:11)(cid:14)(cid:13)(cid:8)(cid:3)(cid:7)(cid:13)(cid:8)(cid:21)(cid:7)(cid:19)(cid:7)(cid:5)(cid:6)(cid:7)(cid:4)
((cid:18)(cid:20)(cid:5)(cid:13)(cid:18) (cid:8)(cid:7)4(cid:20)(cid:7)(cid:11)(cid:4)(cid:5)(cid:13)(cid:10)(cid:21)(cid:7)(cid:8)(cid:20)(cid:21)(cid:14)G(cid:7)(cid:19)(cid:13)(cid:12)
((cid:21)(cid:11)(cid:13)(cid:9)2I
(cid:15)(cid:6)(cid:13)(cid:2)(cid:7)(cid:11)(cid:3)(cid:4)(cid:16)(cid:9)(cid:23)(cid:13)(cid:16)(cid:27)(cid:13)(cid:4)(cid:11)(cid:14)
(cid:23)(cid:13)(cid:16)(cid:27)(cid:13)(cid:4)(cid:11)(cid:9)(cid:3)(cid:4)(cid:22)(cid:21)(cid:2)(cid:27)(cid:7)(cid:11)(cid:3)(cid:21)(cid:4)
(cid:28)(cid:19)(cid:13)(cid:4)(cid:11)(cid:3)(cid:22)(cid:3)(cid:5)(cid:7)(cid:11)(cid:3)(cid:21)(cid:4)(cid:9)(cid:21)(cid:22)(cid:9)(cid:2)(cid:13)(cid:6)(cid:21)(cid:2)(cid:11)(cid:7))(cid:8)(cid:13)(cid:9)(cid:14)(cid:13)(cid:16)(cid:27)(cid:13)(cid:4)(cid:11)(cid:14)
;(cid:8)
;(cid:8)
;(cid:8)
(cid:8)(cid:23)3(cid:28)*(cid:29)(cid:8)
;(cid:8)
(cid:8)(cid:23)3(cid:28)*(cid:29)(cid:8)
$(cid:22)(cid:7) -(cid:21)(cid:14)(cid:10)(cid:20) (cid:22)(cid:18)(cid:12) (cid:5)(cid:4)(cid:7)(cid:11)(cid:13)(cid:5)&(cid:5)(cid:7)(cid:4) (cid:5)(cid:13)(cid:12) (cid:14)(cid:20)(cid:7)(cid:21)(cid:18)(cid:13)(cid:5)(cid:11)# (cid:12)(cid:7)#(cid:17)(cid:7)(cid:11)(cid:13)(cid:12) (cid:26)(cid:18)(cid:12)(cid:7)(cid:4) (cid:14)(cid:11) (cid:13)(cid:22)(cid:7) (cid:5)(cid:11)(cid:13)(cid:7)(cid:21)(cid:11)(cid:18) (cid:21)(cid:7)(cid:20)(cid:14)(cid:21)(cid:13)(cid:12) (cid:13)(cid:22)(cid:18)(cid:13) (cid:18)(cid:21)(cid:7) (cid:21)(cid:7)(cid:6)(cid:5)(cid:7)(cid:15)(cid:7)(cid:4) (cid:18)(cid:11)(cid:4) (cid:10)(cid:12)(cid:7)(cid:4) (cid:26)(cid:3) (cid:13)(cid:22)(cid:7) (cid:26)(cid:14)(cid:18)(cid:21)(cid:4) (cid:14)& (cid:4)(cid:5)(cid:21)(cid:7)(cid:19)(cid:13)(cid:14)(cid:21)(cid:12) (cid:5)(cid:11) (cid:18)(cid:12)(cid:12)(cid:7)(cid:12)(cid:12)(cid:5)(cid:11)# (cid:20)(cid:7)(cid:21)&(cid:14)(cid:21)(cid:17)(cid:18)(cid:11)(cid:19)(cid:7) (cid:18)(cid:11)(cid:4) (cid:5)(cid:11) (cid:4)(cid:7)(cid:13)(cid:7)(cid:21)(cid:17)(cid:5)(cid:11)(cid:5)(cid:11)# (cid:13)(cid:22)(cid:7)
(cid:18) (cid:14)(cid:19)(cid:18)(cid:13)(cid:5)(cid:14)(cid:11)(cid:8)(cid:14)&(cid:8)(cid:21)(cid:7)(cid:12)(cid:14)(cid:10)(cid:21)(cid:19)(cid:7)(cid:12)0(cid:8)
$(cid:22)(cid:7)(cid:8)-(cid:21)(cid:14)(cid:10)(cid:20)=(cid:12)(cid:8)&(cid:5)(cid:11)(cid:18)(cid:11)(cid:19)(cid:5)(cid:18) (cid:8)(cid:20)(cid:7)(cid:21)&(cid:14)(cid:21)(cid:17)(cid:18)(cid:11)(cid:19)(cid:7)(cid:8)(cid:5)(cid:12)(cid:8)(cid:7)4(cid:18)(cid:17)(cid:5)(cid:11)(cid:7)(cid:4)(cid:8)(cid:20)(cid:21)(cid:5)(cid:17)(cid:18)(cid:21)(cid:5) (cid:3)(cid:8)&(cid:21)(cid:14)(cid:17)(cid:8)(cid:18)(cid:11)(cid:8)(cid:18)(cid:19)(cid:13)(cid:5)(cid:6)(cid:5)(cid:13)(cid:5)(cid:7)(cid:12)(cid:8)(cid:20)(cid:7)(cid:21)(cid:12)(cid:20)(cid:7)(cid:19)(cid:13)(cid:5)(cid:6)(cid:7)(cid:8)(cid:18)(cid:11)(cid:4)(cid:8)(cid:14)(cid:20)(cid:7)(cid:21)(cid:18)(cid:13)(cid:5)(cid:11)#(cid:8)(cid:12)(cid:7)#(cid:17)(cid:7)(cid:11)(cid:13)(cid:12)(cid:8)(cid:22)(cid:18)(cid:6)(cid:7)(cid:8)(cid:13)(cid:22)(cid:7)(cid:21)(cid:7)&(cid:14)(cid:21)(cid:7)(cid:8)(cid:26)(cid:7)(cid:7)(cid:11)(cid:8)(cid:4)(cid:7)(cid:13)(cid:7)(cid:21)(cid:17)(cid:5)(cid:11)(cid:7)(cid:4)(cid:8)(cid:14)(cid:11)(cid:8)(cid:13)(cid:22)(cid:7)(cid:8)(cid:12)(cid:18)(cid:17)(cid:7)(cid:8)(cid:26)(cid:18)(cid:12)(cid:5)(cid:12)0
$(cid:22)(cid:7)(cid:8)-(cid:21)(cid:14)(cid:10)(cid:20)(cid:8)(cid:22)(cid:18)(cid:12)(cid:8)(cid:5)(cid:4)(cid:7)(cid:11)(cid:13)(cid:5)&(cid:5)(cid:7)(cid:4)(cid:8)(cid:13)(cid:22)(cid:7)(cid:8)&(cid:14) (cid:14)(cid:15)(cid:5)(cid:11)#(cid:8)(cid:21)(cid:7)(cid:20)(cid:14)(cid:21)(cid:13)(cid:18)(cid:26) (cid:7)(cid:8)(cid:14)(cid:20)(cid:7)(cid:21)(cid:18)(cid:13)(cid:5)(cid:14)(cid:11)(cid:18) (cid:8)(cid:12)(cid:7)#(cid:17)(cid:7)(cid:11)(cid:13)(cid:12)1
W
W
(cid:1)(cid:2)(cid:3)(cid:4)(cid:5)(cid:6)(cid:7)(cid:8)(cid:25)(cid:20)(cid:7)(cid:21)(cid:18)(cid:13)(cid:5)(cid:14)(cid:11)(cid:12)
(cid:25)(cid:13)(cid:22)(cid:7)(cid:21)(cid:8)%(cid:4)(cid:6)(cid:7)(cid:11)(cid:13)(cid:10)(cid:21)(cid:7)(cid:8)24(cid:20)(cid:7)(cid:21)(cid:5)(cid:7)(cid:11)(cid:19)(cid:7)(cid:12)
$(cid:22)(cid:7)(cid:8)&(cid:14) (cid:14)(cid:15)(cid:5)(cid:11)#(cid:8)(cid:5)(cid:12)(cid:8)(cid:18)(cid:11)(cid:8)(cid:18)(cid:11)(cid:18) (cid:3)(cid:12)(cid:5)(cid:12)(cid:8)(cid:14)&(cid:8)(cid:13)(cid:22)(cid:7)(cid:8)-(cid:21)(cid:14)(cid:10)(cid:20)=(cid:12)(cid:8)(cid:21)(cid:7)(cid:6)(cid:7)(cid:11)(cid:10)(cid:7)(cid:8)(cid:18)(cid:11)(cid:4)(cid:8)(cid:21)(cid:7)(cid:12)(cid:10) (cid:13)(cid:12)(cid:8)(cid:26)(cid:3)(cid:8)(cid:21)(cid:7)(cid:20)(cid:14)(cid:21)(cid:13)(cid:18)(cid:26) (cid:7)(cid:8)(cid:14)(cid:20)(cid:7)(cid:21)(cid:18)(cid:13)(cid:5)(cid:11)#(cid:8)(cid:12)(cid:7)#(cid:17)(cid:7)(cid:11)(cid:13)(cid:8)&(cid:14)(cid:21)(cid:8)(cid:13)(cid:22)(cid:7)(cid:8)(cid:20)(cid:7)(cid:21)(cid:5)(cid:14)(cid:4)(cid:8)(cid:10)(cid:11)(cid:4)(cid:7)(cid:21)(cid:8)(cid:21)(cid:7)(cid:6)(cid:5)(cid:7)(cid:15)1
,(cid:5). (cid:23)(cid:13)(cid:16)(cid:27)(cid:13)(cid:4)(cid:11)(cid:9)(cid:6)(cid:13)(cid:2)(cid:22)(cid:21)(cid:2)(cid:27)(cid:7)(cid:4)(cid:5)(cid:13)
01(cid:9)#(cid:18)(cid:4)(cid:13)(cid:9)2134
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(cid:25)(cid:13)(cid:22)(cid:7)(cid:21)(cid:8)(cid:21)(cid:7)(cid:6)(cid:7)(cid:11)(cid:10)(cid:7)
5(cid:11)(cid:13)(cid:7)(cid:21);(cid:12)(cid:7)#(cid:17)(cid:7)(cid:11)(cid:13)(cid:8)(cid:7) (cid:5)(cid:17)(cid:5)(cid:11)(cid:18)(cid:13)(cid:5)(cid:14)(cid:11)
,(cid:21)(cid:11)(cid:7)(cid:8)(cid:9)(cid:16)(cid:2)(cid:21)(cid:18)(cid:6)(cid:9)(cid:2)(cid:13)(cid:12)(cid:13)(cid:4)(cid:18)(cid:13)
(cid:17)(cid:13)(cid:5)(cid:21)(cid:4)(cid:5)(cid:3)(cid:8)(cid:3)(cid:7)(cid:11)(cid:3)(cid:21)(cid:4)(cid:9)(cid:21)(cid:22)(cid:9)(cid:14)(cid:13)(cid:16)(cid:27)(cid:13)(cid:4)(cid:11)(cid:9)(cid:2)(cid:13)(cid:14)(cid:18)(cid:8)(cid:11)(cid:9)(cid:11)(cid:21)(cid:9)(cid:16)(cid:2)(cid:21)(cid:18)(cid:6)(cid:9)(cid:4)(cid:13)(cid:11)(cid:9)(cid:6)(cid:2)(cid:21)(cid:22)(cid:3)(cid:11)(cid:9))(cid:13)(cid:22)(cid:21)(cid:2)(cid:13)(cid:9)(cid:11)(cid:7)'
(cid:1)(cid:7)#(cid:17)(cid:7)(cid:11)(cid:13)(cid:8)(cid:11)(cid:7)(cid:13)(cid:8)(cid:20)(cid:21)(cid:14)&(cid:5)(cid:13)(cid:8)&(cid:21)(cid:14)(cid:17)(cid:8)(cid:19)(cid:14)(cid:11)(cid:13)(cid:5)(cid:11)(cid:10)(cid:5)(cid:11)#(cid:8)(cid:14)(cid:20)(cid:7)(cid:21)(cid:18)(cid:13)(cid:5)(cid:14)(cid:11)(cid:12)(cid:8)(cid:26)(cid:7)&(cid:14)(cid:21)(cid:7)(cid:8)(cid:13)(cid:18)4
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@(cid:7)(cid:13)(cid:8)(cid:20)(cid:21)(cid:14)&(cid:5)(cid:13)(cid:8)(cid:26)(cid:7)&(cid:14)(cid:21)(cid:7)(cid:8)(cid:13)(cid:18)4(cid:8)&(cid:21)(cid:14)(cid:17)(cid:8)(cid:19)(cid:14)(cid:11)(cid:13)(cid:5)(cid:11)(cid:10)(cid:5)(cid:11)#(cid:8)(cid:14)(cid:20)(cid:7)(cid:21)(cid:18)(cid:13)(cid:5)(cid:14)(cid:11)(cid:12)
5(cid:11)(cid:19)(cid:14)(cid:17)(cid:7)(cid:8)(cid:13)(cid:18)4(cid:8)(cid:7)4(cid:20)(cid:7)(cid:11)(cid:12)(cid:7)
,(cid:21)(cid:11)(cid:7)(cid:8)(cid:9)(cid:6)(cid:2)(cid:21)(cid:22)(cid:3)(cid:11)(cid:9)(cid:7)(cid:22)(cid:11)(cid:13)(cid:2)(cid:9)(cid:11)(cid:7)'
(cid:15)(cid:11)(cid:25)(cid:13)(cid:2)(cid:9)
(cid:10)(cid:19)(cid:12)(cid:13)(cid:4)(cid:11)(cid:18)(cid:2)(cid:13)(cid:9)
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;(cid:8)
(cid:8)(cid:28)(cid:28)3(cid:23)(cid:29)8(cid:8)
;(cid:8)
;(cid:8)
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(cid:8)983(cid:29)!!(cid:8)
;(cid:8)
(cid:8)983(cid:29)!!(cid:8)
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;(cid:8)
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(cid:8)*83(cid:27)(cid:27)9(cid:8)
(cid:8)(cid:28)(cid:28)3(cid:23)(cid:29)8(cid:8)
(cid:8)8(cid:24)3(cid:29)9*(cid:8)
(cid:8)(cid:28)(cid:27)3!(cid:28)(cid:23)(cid:8)
(cid:8)(cid:28)(cid:27)3!(cid:28)(cid:23)(cid:8)
,(cid:23)39(cid:29)(cid:23).
(cid:8)93*!(cid:24)(cid:8)
(cid:8)8(cid:29)(cid:29)(cid:8)
(cid:8)8(cid:29)(cid:29)(cid:8)
,(cid:27)(cid:23):.
(cid:8)*(cid:27)(cid:28)(cid:8)
(cid:8)(cid:28)(cid:23)3(cid:29)!9(cid:8)
;(cid:8)
(cid:8)(cid:28)(cid:23)3(cid:29)!9(cid:8)
,:3(cid:24)9!.
(cid:8)83:9(cid:27)(cid:8)
(cid:19)(cid:25)
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 29
Operating Segments (continued)
30 June 2016
Revenue
Sales Revenue
Other revenue
Total group revenue
Reconciliation of segment result to group net profit before tax
Segment net profit from continuing operations before tax
Income tax expense
Total profit after tax
(ii) Segment assets
30 June 2017
Segment assets
Intersegment eliminations
30 June 2016
Segment assets
(iii) Segment liabilities
30 June 2017
Segment liabilities
Intersegment eliminations
30 June 2016
Segment liabilities
Other
Adventure
Experiences
$000
Skydiving
$000
Total
$000
58,473
1262
59,735
9,189
(2,031)
7,158
-
-
-
-
-
-
58,473
1,262
59,735
9,189
(2,031)
7,158
129,716
9,864
139,580
87,808
-
87,808
139,580
37,966
7,118
45,084
17,761
-
17,761
45,084
Identification of geographical segments
The Group has identified two geographical segments, Australia and New Zealand.
General Information
Identification of reportable segments
The Group has identified its geographic segments based on the internal reports that are reviewed and used by the board of directors (chief operating decision makers) in assessing
performance and in determining the allocation of resources.
The Group is managed primarily on the basis of geographical location. Operating segments are therefore determined on the same basis.
Basis of accounting for purposes of reporting by operating segments
(a)
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors, being the chief operating decision makers with respect to operating segments, are determined in
accordance with accounting policies that are consistent with those adopted in the annual financial statements of the Group.
(b)
Intersegment transactions
Corporate charges are allocated to reporting segments based on the segment's overall proportion of revenue generation within the Group. The Board of Directors believes this
is representative of likely consumption of head office expenditure that should be used in assessing segment performance and cost recoveries.
Intersegment loans payable and receivable are initially recognised at the consideration received/to be received net of transaction costs. If intersegment loans receivable and
payable are not on commercial terms, these are not adjusted to fair value based on market interest rates. This policy represents a departure from that applied to the statutory
financial statements.
(c)
Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of the economic value from the asset. In most instances,
segment assets are clearly identifiable on the basis of their nature and physical location.
(d)
Segment liabilities
Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of the segment. Borrowings and tax liabilities are
generally considered to relate to the Group as a whole and are not allocated. Segment liabilities include trade and other payables and certain direct borrowings.
The following is an analysis of the Group's revenue and non current assets per geographical segment for the period under review:
41
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 29
Operating Segments (continued)
(i) Segment performance
30 June 2017
Revenue
Sales to external customers
30 June 2016
Revenue
Sales to external customers
(ii) Non Current Segment Assets
30 June 2017
Non Current Segment assets
30 June 2016
Non Current Segment assets
Australia
New Zealand
Total
$000
$000
$000
62,972
26,594
89,566
62,972
26,594
89,566
48,293
10,180
58,473
48,293
10,180
58,473
91,889
27,631
119,520
91,889
27,631
119,520
Australia
New Zealand
Total
43,145
15,876
59,021
43,145
15,876
59,021
Note 30
Related Party Transactions
Related Parties
(a)
The Group's main related parties are as follows:
i.
ii.
Entities exercising control over the Group:
The ultimate parent entity that exercises control over the Group is Skydive the Beach Group Limited, which is incorporated in Australia.
Key Management Personnel:
Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether
executive or otherwise) of that entity are considered key management personnel.
For details of disclosures relating to key management personnel, refer to Note 7.
iii.
Other Related Parties
Other related parties include entities controlled by the ultimate parent entity and entities over which key management personnel have joint control.
(b)
Transactions with related parties:
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.
The following transactions occurred with related parties:
Consolidated Group
2017
$000
2016
$000
Key Management Personnel
Property lease payments to IGMAITB Pty Ltd atf IGMAITB Discretionary Trust, being an entity controlled by Anthony Boucaut (Managing
Director), for the property located at 3453 Spencers Brook Rd, York WA
Property lease payments to IGMAITB Pty Ltd atf IGMAITB Discretionary Trust, being an entity controlled by Anthony Boucaut (Managing
Director), for the property located at Belmont Airport, NSW
Property lease payments to IGMAITB Pty Ltd atf IGMAITB Discretionary Trust, being an entity controlled by Anthony Boucaut (Managing
Director), for the property located at 12 Air Whitsunday Rd, Flametree QLD
Property lease payments to Illawarra Hangar Pty Ltd atf Illawarra Hangar Unit Trust, being an entity controlled by Anthony Boucaut
(Managing Director), for the property located at Hangar 5, 32 Airport Rd, Albion Park Rail NSW
Total lease payments for the above properties
During the year, Companies associated with Executive Director Anthony Boucaut charged the Company a fee for historical guarantees
provided on behalf of Skydive The Beach Group Limited. Since listing on the ASX the charge was 1.5% of total debt funding that the
company had in place for which Anthony Boucaut stood as guarantor.
Property lease payments to Celeste Ritter, being a related party to Anthony Ritter (Chief Executive Officer), for the property located at 3/15
Melbourne Street, Queenstown, NZ
400
306
54
432
-
-
42
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 30
Related Party Transactions (continued)
(c)
Amounts outstanding from related parties
Trade and Other Receivables
Unsecured loans are made by the ultimate parent entity, subsidiaries, directors, key management personnel and other related parties on an arm’s length basis. Terms and
conditions are set for each loan in formalised loan agreements.
Loans to Key Management Personnel
Beginning of the year
Loans acquired in group reorganisation
Loans advanced
Net advances/repayments
Interest charged
End of the year
1,783
-
64
(457)
63
1,453
2,035
-
185
(507)
70
1,783
The loan balance above represents unsecured loans to Boucaut Enterprises Pty Limited as trustee for Boucaut Family Trust (‘the Borrower’), a related entity, associated with
Anthony Boucaut (Executive Director). The loan agreements for $1,200,000 and $840,000 expire on 28 February 2021 and 30 June 2023 respectively and bear interest at 2%
above the Reserve Bank of Australia cash rate per annum accrued daily.
The Borrower must pay to the Lender a minimum aggregate amount of $300,000 per annum (or such lesser amount as represents the then total amount of the Principal
outstanding and outstanding accrued interest), on the anniversary of the loans each year until the expiry dates. In the event that Anthony Boucaut ceases to control or
Boucaut Enterprises Pty Limited ceases to be the trustee of the Boucaut Family Trust the outstanding amount actually or contingently owing as at that date shall become
immediately due and payable to the lender and the obligations of the lender under this document shall terminate.
Note 31
Events After the Reporting Period
On 2 August 2017, the Group acquired all the share capital and assets of Byron Bay Ballooning. Consideration for this acquisition was $800,000 ($80,000 of which was paid as a
deposit prior to 30 June 2017).
The Directors have declared a final and fully franked dividend of $0.01 per share, amounting to $4,348,777, payable on 29 September 2017 out of retained profits at 30 June 2017.
For the purposes of determining any entitlement to the dividend, the record date has been set as 18 September 2017.
Note 32
Contingent Liabilities and Contingent Assets
The purchase price in respect of the acquisition of Australia Skydive Pty Limited is to be adjusted by a working capital allowance referred to as the "SCACL Adjustment". The amount
is currently being negotiated and the Director's have used their judgement to determine the amounts due in this regard. The final settlement of this amount may differ to the
amounts provided for, in which case the goodwill will be adjusted accordingly.
Other than that mentioned above, the Group has no contingent assets or contingent liabilities at 30 June 2017.
Note 33
Financial Risk Management
The Group’s financial instruments consist mainly of deposits with banks, local money market instruments, short-term investments, accounts receivable and payable, loans to and from
subsidiaries, bills, leases, preference shares and derivatives.
The totals for each category of financial instruments, measured in accordance with AASB 139: FinancialInstruments:RecognitionandMeasurement as detailed in the accounting
policies to these financial statements, are as follows:
Financial Assets
Cash and cash equivalents
Loans and receivables
Available-for-sale financial assets
—
at cost
— unlisted investments
Total available-for-sale financial assets
Total Financial Assets
Financial Liabilities
Financial liabilities at amortised cost
—
—
Trade and other payables
Borrowings
Total Financial Liabilities
Financial Risk Management Policies
Note
11
12c
15a
19
21
Consolidated Group
2017
$000
2016
$000
9,490
12,819
5,493
3,978
38
38
15,021
27
27
16,824
6,596
29,624
36,220
2,662
10,346
13,008
The Board of Directors are responsible for, among other issues, managing financial risk exposures of the Group. The Board monitors the Group’s financial risk management policies
and exposures and approves financial transactions within the scope of its authority. It also reviews the effectiveness of internal controls relating to currency risk, liquidity risk and
interest rate risk.
The overall risk management strategy seeks to assist the consolidated group in meeting its financial targets, while minimising potential adverse effects on financial performance. Its
functions include the review of the use of credit risk policies and future cash flow requirements.
Specific Financial Risk Exposures and Management
The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of interest rate risk and foreign currency risk. There
have been no substantive changes in the types of risks the Group is exposed to, how these risks arise, or the Board’s objectives, policies and processes for managing or measuring
the risks from the previous period.
43
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 33
Financial Risk Management (continued)
a.
Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss to the
Group.
Credit risk is managed through regular monitoring of customer accounts and payments. Such monitoring is used in assessing receivables for impairment.
Credit Risk Exposures
The maximum exposure to credit risk by class of recognised financial assets at the end of the reporting period, excluding the value of any collateral or other security held is
equivalent to the carrying amount and classification of those financial assets (net of any provisions) as presented in the statement of financial position. Credit risk also arises
through the provision of financial guarantees, as approved at Board level, given to parties securing the liabilities of certain subsidiaries.
There is no collateral held by the Group securing receivables.
The Group has no significant concentration of credit risk with any single counterparty or group of counterparties. Credit risk is limited to booking agents as almost all customers
pay for tandem jumps before the jump takes place.
Trade and other receivables that are neither past due or impaired are considered to be of high credit quality. Aggregates of such amounts are as detailed at Note 12.
Credit risk related to balances with banks and other financial institutions is managed by the Board. Generally, surplus funds are only invested with the major Australian banks.
The following table provides information regarding the credit risk relating to cash and money market securities based on Standard and Poor’s counterparty credit ratings.
Cash and cash equivalents
- AA Rated
Held-to-maturity securities
- AA Rated
b.
Liquidity risk
Consolidated Group
2017
$000
2016
$000
9,464
12,796
26
23
9,490
12,819
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The
Group manages this risk through the following mechanisms:
• preparing forward-looking cash flow analyses in relation to its operating, investing and financing activities;
• monitoring undrawn credit facilities;
• maintaining a reputable credit profile;
• managing credit risk related to financial assets;
• only investing surplus cash with major financial institutions; and
• comparing the maturity profile of financial liabilities with the realisation profile of financial assets
The following table details the consolidated entity's remaining contractual maturity for its financial
undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be paid.
instrument liabilities. The table has been drawn up based on the
Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual timing may therefore differ from that disclosed. The timing of
cash flows presented in the table to settle financial
liabilities reflect the earliest contractual settlement dates and do not reflect management’s expectations that banking
facilities will be rolled forward.
Financial liability and financial asset maturity analysis
Within 1 Year
1 to 5 years
Over 5 years
Total
2017
$000
2016
$000
2017
$000
2016
$000
2017
$000
2016
$000
2017
$000
2016
$000
Consolidated Group
Financial liabilities due for payment
Bank loans
Trade and other payables
Finance lease
liabilities
Vendor finance loan
Total expected
outflows
Consolidated Group
Financial Assets - cash flows realisable
86
6,596
3,400
2,204
64
15,137
2,662
-
1,985
8,795
-
-
12,286
4,711
23,932
763
-
5,329
2,204
8,296
-
-
-
-
-
Within 1 Year
1 to 5 years
Over 5 years
2017
$000
2016
$000
2017
$000
2016
$000
2017
$000
2016
$000
Cash and cash equivalents
9,490
12,819
Trade and other receivables
4,040
2,195
Amounts receivable from related parties
300
288
Total anticipated inflows
13,830
15,302
-
-
1,153
1,153
-
-
1,200
1,200
Net (outflow) / inflow on financial
instruments
1,544
10,591
(22,779)
(7,096)
-
-
-
-
-
44
-
-
-
-
-
-
-
15,223
6,596
12,195
2,204
827
2,662
7,314
2,204
36,218
13,007
Total
2017
$000
2016
$000
9,490
12,819
4,040
2,195
295
295
1,453
1,783
14,983
16,797
295
(21,235)
3,790
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 33
Financial Risk Management (continued)
Financial assets pledged as collateral
Certain financial assets have been pledged as security for debt and their realisation into cash may be restricted subject to terms and conditions attached to the relevant debt
contracts. Refer to Note 21(b) for further details.
c.
i.
Market Risk
Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period whereby a future change in interest rates will affect
future cash flows or the fair value of fixed rate financial instruments. The Group is also exposed to earnings volatility on floating rate instruments. The financial instruments
that primarily expose the Group to interest rate risk are borrowings and cash and cash equivalents.
Interest rate risk is managed using a mix of fixed and floating rate debt. At 30 June 2017 approximately 51% (2016: 92%) of group debt is fixed.
ii. Foreign exchange risk
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial
currencies in which the Group holds financial instruments which are other than the AUD functional currency of the Group.
instrument fluctuating due to movement in foreign exchange rates of
With instruments being held by overseas operations, fluctuations in the NZ Dollar may impact on the Group’s financial results.
There are currently no hedging arrangements in place to manage foreign currency risk.
Sensitivity Analysis
The following table illustrates sensitivities to the Group’s exposures to changes in interest rates, exchange rates and commodity and equity prices. The table indicates the impact of
how profit and equity values reported at the end of the reporting period would have been affected by changes in the relevant risk variable that management considers to be
reasonably possible.
These sensitivities assume that the movement in a particular variable is independent of other variables.
Year ended 30 June 2017
+/- 2% in interest rates
+/- 2% in $A/$NZ
Year ended 30 June 2016
+/- 2% in interest rates
+/- 2% in $A/$NZ
Consolidated Group
Profit
$000
Equity
$000
149
118
67
40
67
40
67
40
There have been no changes in any of the methods or assumptions used to prepare the above sensitivity analysis from the prior year.
Fair Values
Fair value estimation
The fair values of financial assets and financial liabilities are presented in the following table and can be compared to their carrying amounts as presented in the statement of financial
position. Refer to Note 34 for detailed disclosures regarding the fair value measurement of the group’s financial assets and financial liabilities.
Differences between fair values and carrying amounts of financial instruments with fixed interest rates are due to the change in discount rates being applied by the market since their
initial recognition by the Group. Most of these instruments, which are carried at amortised cost (i.e. term receivables, held-to-maturity assets, loan liabilities), are to be held until
maturity and therefore the fair value figures calculated bear little relevance to the Group.
Consolidated Group
Financial assets
Cash and cash equivalents
Trade and other receivables:
- related parties - loans and advances
- unrelated parties - trade and term receivables
Total trade and other receivables
Available-for-sale financial assets:
- at cost:
- unlisted investments
Total available-for-sale financial assets
Total financial assets
Financial liabilities
Trade and other payables
Vendor finance loan
Bank debt
Total financial liabilities
Note
11
12
12
12
15
19
21
21
2017
2016
Carrying
Amount
$000
Fair Value
$000
Carrying
Amount
$000
Fair Value
$000
9,490
9,490
12,819
12,819
1,453
4,040
5,493
38
38
15,021
6,596
2,204
15,224
24,024
1,453
4,040
5,493
38
38
15,021
6,596
2,204
15,224
24,024
1,783
2,195
3,978
27
27
16,824
2,662
2,204
8,142
13,008
1,783
2,195
3,978
27
27
16,824
2,662
2,204
8,142
13,008
45
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2017
Note 34
Fair Value Measurements
The Group measures and recognises the aircraft assets at fair value on a recurring basis after initial recognition.
The Group does not subsequently measure any liabilities at fair value on a non-recurring basis.
Fair value hierarchy
(a)
AASB 13: FairValueMeasurement requires the disclosure of fair value information by level of the fair value hierarchy, which categorises fair value measurements into one of
three possible levels based on the lowest level that an input that is significant to the measurement can be categorised into as follows:
Level 1
Measurements based on quoted prices (unadjusted) in active
markets for identical assets or liabilities that the entity can access at
the measurement date.
Level 2
Measurements based on inputs other than quoted
prices included in Level 1 that are observable for the
asset or liability, either directly or indirectly.
Level 3
Measurements based on unobservable inputs for
the asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation techniques. These valuation techniques maximise, to
the extent possible, the use of observable market data. If all significant inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one
or more significant inputs are not based on observable market data, the asset or liability is included in Level 3.
Valuation techniques
The Group elects to use external valuation experts where possible. The Group selects a valuation technique that is appropriate in the circumstances and for which sufficient
data is available to measure fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics of the asset or liability being measured.
The valuation techniques selected by the Group are consistent with one or more of the following valuation approaches:
●
●
●
Market approach: valuation techniques that use prices and other relevant information generated by market transactions for identical or similar assets or liabilities.
Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a single discounted present value.
Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service capacity.
Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing the asset or liability, including assumptions about risks.
When selecting a valuation technique, the Group gives priority to those techniques that maximise the use of observable inputs and minimise the use of unobservable inputs.
Inputs that are developed using market data (such as publicly available information on actual transactions) and reflect the assumptions that buyers and sellers would generally
use when pricing the asset or liability are considered observable, whereas inputs for which market data are not available and therefore are developed using the best
information available about such assumptions are considered unobservable.
The following tables provide the fair values of the Group’s assets and liabilities measured and recognised on a recurring basis after initial recognition and their categorisation
within the fair value hierarchy.
Recurring fair value measurements
Non-financial assets
Aircraft
Total non-financial assets recognised at fair value on a recurring basis
Total non-financial assets recognised at fair value
(b) Valuation techniques and inputs used to measure Level 2 fair values
Note
17
30 June 2017
Level 1
$000
Level 2
$000
Level 3
$000
Total
$000
-
-
-
-
-
-
43,105
43,105
43,105
43,105
43,105
43,105
Description
Non-financial assets
Aircraft equipment
Fair Value ($) at
30 June 2015
Valuation technique(s)
Inputs used
Market approach using recent observable market data
for similar assets
Make and model of aircraft frame, engines and
other key components, maintenance status,
damage history
-
-
The fair value of aircraft equipment is expected to be determined at least every three years based on valuations by an independent valuer. At the end of each intervening
period, the directors review the independent valuation and, when appropriate, update the fair value measurement to reflect current market conditions using a range of
valuation techniques, including recent observable market data.
There were no changes during the period in the valuation techniques used by the Group to determine Level 2 fair values.
Note 35
Preliminary Financial Report Reconciliation
An unaudited Preliminary Financial Report was released to the Australian Stock Exchange (ASX) on 23 August 2017. Subsequent to the release of this report an amended unaudited
Preliminary Financial Report was released to the Australian Stock Exchange (ASX) on 24 August 2017.
There are no reconciling items between the Annual Report and the Amended Preliminary Financial Report.
Note 36
Company Details
The registered office of the company is:
Skydive the Beach Group Limited
Level 1, 51 Montague Street, North Wollongong, NSW 2500
The principal place of business is:
Skydive the Beach Group Limited
Level 1, 51 Montague Street, North Wollongong, NSW 2500
46
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Directors' Declaration
The directors of the company declare that, in the opinion of the directors:
(a)
The attached financial statements and notes thereto are in accordance with the Corporations Act 2001; and
give a true and fair view of the financial position and performance of the consolidated entity; and
(i)
comply with Australian Accounting Standards, including the Interpretations and Corporations Regulations 2001;
(ii)
(b)
the financial statements and notes thereto also comply with International Financial Reporting Standards, as disclosed in
Note 1;
(c)
the directors have been given the declarations required by s.295A of the Corporations Act 2001: and
(d)
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and
payable.
Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the Corporations Act 2001.
On behalf of the Directors:
Anthony Boucaut
Managing Director
Anthony Ritter
Chief Executive Officer
Dated:
4 September 2017
47
INDEPENDENT AUDITOR’S REPORT
To the Members of Skydive the Beach Group Limited
Opinion
We have audited the financial report of Skydive the Beach Group Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2017, the
consolidated statement of comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies, and the directors' declaration.
In our opinion the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the Group's financial position as at 30 June 2017 and of its financial
performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.*
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
48
Key Audit Matter
Acquisitions
Refer to Note 16 in the financial statements
How our audit addressed this matter
During 2017 financial year the group completed
four acquisitions as follows:
Our audit procedures in relation to accounting for the
acquisitions included the following:
Reviewing the various Sale and Purchase
Agreements
an
order
understanding of the transaction and the
related accounting considerations.
obtain
to
in
Obtaining the Due Diligence reports obtained
by the Board in relation to the transaction to
impairments,
identify any potential asset
unrecorded liabilities, or any other unusual
risks that may have been associated with the
transactions could impact on the accounting
for the transactions or the related disclosures.
Critically evaluating the key assumptions used
by management in determining the proposed
accounting treatment having consideration of
and
the
agreements as well as the requirements of the
Australian Accounting Standards.
documents
various
related
Obtaining the valuation reports and related
clients models provided to support the fair
values of the assets and liabilities acquired as
part of the transactions and testing the
the assumptions and
reasonableness of
the
inputs used as well as
appropriateness of the valuation methodology
applied.
testing
the work
Reviewing
by
Management’s Experts with regards to the
valuation reports in respect of the intangible
assets identified in each of the acquisitions.
performed
Reviewing
and
appropriateness of
statement disclosures.
evaluating
related
the
the
financial
1.
2.
3.
4.
The Wanaka acquisition which was
completed on 1 July 2016 for a total
of
purchase
NZD$10,400,000 (AUD$9,948,000).
consideration
The Raging Thunder acquisition which
was completed on 31 October 2016 for a
total
of
purchase
AUD$15,440,000.
consideration
The Performance Aviation acquisition
which was completed on 3 October 2016
for a total purchase consideration of
NZD$500,000 (AUD$482,000).
The Reef Magic acquisition which was
completed on 1 May 2017 for a total
purchase
of
AUD$15,000,000.
consideration
These
This was considered a key audit matter because
the accounting for the transaction is complex and
involves significant judgments in applying the
accounting standards.
the
determination of whether the acquired entities
were businesses in accordance with AASB 3
Business Combinations, the identification and
valuation of
the
determination of the fair value of the tangible
assets acquired.
intangible assets, and
include
49
Goodwill and Other Intangible Assets
Refer to Note 18 in the financial statements
The acquisitions described above have resulted
in an increased balance of goodwill and other
intangible assets being held, which are now
carried at $47,959,000.
Goodwill and Trade Names have an indefinite
useful economic life. Therefore, they are not
amortised, but are subject to annual testing for
impairment
in accordance with AASB 136
Impairment.
We determined this area to be a key audit matter
due to the size of the intangible assets balance,
and because the directors’ assessment of the
‘value in use’ of each cash generating unit
(“CGU”) involves judgements about the future
underlying cash flows of the business and the
discount rates applied to them.
For the year ended 30 June 2017 management
have performed an impairment assessment over
the goodwill balance by:
Determining that the entity has 3 CGUs,
and allocating goodwill across the three
CGUs
expenses
calculating the value in use for each
CGU using a discounted cash flow
model. These models used cash flows
(revenues,
capital
expenditure) for the CGU for 5 years,
with a terminal growth rate applied to the
5th year. These cash flows were then
discounted to net present value using the
Company’s weighted average cost of
capital (WACC); and
and
comparing the resulting value in use of
each CGU to their respective book
values.
Management also performed a sensitivity
analysis over the value in use calculation, by
varying the assumptions used (growth rates,
terminal growth rate and WACC) to assess the
impact on the valuations.
Our audit procedures in relation to the valuation of
goodwill included the following:
Assessing management’s allocation of the
goodwill across the three CGUs, based on the
nature of the Group’s business and the
manner in which results are monitored and
reported
the
assumptions
and
Evaluating
methodologies used by the Company in
preparing the value in use calculation, in
particular those relating to the sales growth
rate, projected future expenditure, and pre-tax
discount rate.
The cash flow projections for each cash-
generating units have been assessed and
includes an
challenged by us, and
assessment of the historical accuracy of
management’s estimates and evaluation of
business plans.
Reviewing the sensitivity analysis prepared by
management, to ensure there is adequate
headroom for each cash generating unit.
Assessing the adequacy of the disclosures in
financial statement for Goodwill assumptions
to which the outcome of the impairment test is
most sensitive, that is, those that have the
most significant effect on the determination of
the recoverable amount of goodwill.
50
Revenue
Refer to Note 4 in the financial statements
The recognition of revenue and associated
unearned revenue liabilities is significant to the
audit, and is considered to be a key audit matter
due to the nature of the revenue, which is often
paid in advance of the services being rendered.
The group is therefore required to recognize such
receipts as deferred revenue until such time as
the services are rendered. There are potential
risks in relation to the following:
1.
Sales may be deliberately overstated as a
result of management override of internal
controls. The management of the Group
considers sales as a key performance
measure which could create an incentive
for sales to be recognized before the
services been provided.
In accordance with AASB118 Revenue,
Skydive the Beach Group is entitled to
recognize
variable
revenue
consideration, being
the probabilities
applied to gift card sales and advance
bookings in respect of management’s
assessment of the likelihood that the
advance bookings and gift vouchers will
result in a tandem jump occurring. This
increases the risk that sales could be
misstated due to errors in judgement or
the
estimation
these
assumptions used
judgments.
in making
uncertainty
around
from
2.
We obtained a detailed understanding of each of the
sources of revenue and
the related systems
processes for quantifying and recording revenue and
deferred revenue.
Our audit procedures
recognition and deferral included the following:
relation
to
in
revenue
Considering the adequacy of the Group’s
revenue recognition policies, and assessing
them
compliance with Australian
Accounting Standards
for
Where applicable,
the operating
effectiveness of key controls in relation to
bookings
testing
Performing predictive analytical techniques
with regards to revenue and jump numbers in
relation to the various drop zones.
Selecting a sample of entries in the sales
ledger accounts and testing that the amounts
recognized are consistent with cash banked.
Inspecting a sample of the monthly journals to
verify that monthly revenue is appropriately
into consideration
adjusted
the
deferred
respect payments
in
received in advance of the services being
rendered.
to
take
revenue
Selecting a sample of transactions in relation
to cash receipts and testing that the service
has in fact been provided by verifying that the
booking had been discharged as per the
customer booking systems or that the revenue
was correctly
the deferred
revenue balance
recorded
in
Inspecting that the balances reflected in the
deferred revenue accounts were properly
reconciled to the deferred revenue reports as
per the customer booking systems.
51
Property, Plant and Equipment
Refer to Note 17 in the financial statements
Skydive the Beach Group currently owns aircraft
and other operating equipment with a carrying
value of $61,231,000.
Our audit procedure in relation to property, plant and
equipment included following:
Residual Values
The more significant classes of property, plant
and equipment include following:
Aircraft with
$43,105,000
carrying
values
of
Vessel and floating docks with carrying
values of $9,151,000 and $1,633,000
respectively.
Plant and equipment with carrying values
of $7,342,000.
The accounting in respect of the property, plant
and equipment for Skydive the Beach is complex
and non-routine due to the nature of the
equipment and
in
determining useful lives, residual values, and the
valuation of the major components of the assets.
judgement required
the
the reasonableness of
internal
Assessing
evidence provided by management to support
the residual value of the assets by comparing it
to external evidence and historical sales values.
Assessing the adequacy of the disclosures in
financial statements for the critical accounting
estimates and judgements in the accounting
policy notes and ensure the disclosures are
consistent with the applied practices.
Assessing the reasonableness of the residual
values for the vessels having consideration for
the per ton scrap value of ships and the
geographical proximity of Australia to the
shipping scrap merchant dealers.
Asset Components
Assessing the reasonableness the split of the
main components of the aircraft being the
engine and fuselage having considerations for
verified past practices and other industry data
and evidence.
Useful lives
For newly acquired engine and
fuselage,
assessing the reasonableness of the useful
lives by comparing to similar planes and
engines in the Group fleet.
For existing engine and fuselage, assessing
reasonableness of the useful lives by reviewing
confirmations from external experts.
Testing the engine hours to log books and other
maintenance schedules.
Assessing the expected useful lives of the
newly acquired vessels and other operating
equipment by discussing with management
what their expectations are and where possible
comparing that to operators in the industry and
other externally available market data
52
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2017, but does not include the financial report and the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description
forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 6 to 9 of the directors' report for the year ended
30 June 2017.
In our opinion, the Remuneration Report of Skydive the Beach Group Limited., for the year ended 30 June 2017,
complies with section 300A of the Corporations Act 2001.
53
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
G N Sherwood
RSM Australia
Sydney 4 September 2017
54
SKYDIVE THE BEACH GROUP LIMITED ACN: 167 320 470
AND CONTROLLED ENTITIES
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
The following information is current as at : 14 August 2017
1.
Shareholding
a.
b.
c.
d.
Distribution of Shareholders
Category (size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
The number of shareholdings held in less than marketable parcels is 54.
The names of the substantial shareholders listed in the holding company’s register are:
Shareholder
Anthony Boucaut & Associated Companies
Paradice Investment Management
Perpetual Trustees
Bennelong Funds Management Group
IOOF Holdings
Number
Ordinary
75
127
93
218
47
560
Number
Ordinary
179,924,273
35,237,234
29,602,836
27,765,302
22,836,636
Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary shares
–
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy
has one vote on a show of hands.
e.
20 Largest Shareholders — Ordinary Shares
Name
Boucaut Enterprises Pty Ltd
1.
J P Morgan Nominees Australia
2.
HSBC Custody Nominees
3.
Citicorp Nominees Pty Ltd
4.
UBS Nominees Pty Ltd
5.
Skydive The Beach Pty Ltd
6.
National Nominees Limited
7.
Skydive Perth Pty Ltd
8.
Skydive The Beach Melbourne Pty Ltd
9.
Ms Ariane Radford
10.
HSBC Custody Nominees
11.
HSBC Custody Nominees
12.
Aust Executor Trustees Ltd
13.
Mirrabooka Investments Limited
14.
BNP Paribas Nominees Pty Ltd
15.
16.
Ms Celeste Linda Ritter
17. Whitfield Investments Pty Ltd
18.
19.
20.
Amcil Limited
BNP Paribas Noms Pty Ltd
BNP Paribas Nominees Pty Ltd
Number of Ordinary
Fully Paid Shares
Held
% Held
of Issued
Ordinary Capital
132,083,965
55,492,390
40,548,788
38,035,225
37,376,033
23,912,660
23,897,581
16,338,000
7,482,000
7,267,940
6,928,889
4,615,656
4,419,960
3,741,194
3,394,635
3,383,970
2,450,545
2,163,076
2,040,517
1,587,818
417,160,842
30.37%
12.76%
9.32%
8.75%
8.59%
5.50%
5.50%
3.76%
1.72%
1.67%
1.59%
1.06%
1.02%
0.86%
0.78%
0.78%
0.56%
0.50%
0.47%
0.37%
95.93%
55
2.
3.
4.
5.
6.
The company secretaries are Anthony Ritter and John Diddams.
The address of the principal registered office in Australia is:
1/51 Montague Street, Wollongong NSW 2500.
Telephone 1300 663 634.
Registers of securities are held at the following addresses
Boardroom Pty Ltd
Level 7, 207 Kent Street, Sydney NSW 2000
Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian Securities
Exchange Limited.
Unquoted Securities
Options over Unissued Shares
A total of 10,300,000 options are on issue. All options are on issue to directors and former directors under the Skydive the Beach
Group Limited employee option plan.
56
Skydive the Beach Group Limited and Controlled Entities
ACN: 167 320 470
Corporate Directory
Directors:
William (Bill) Beerworth, Non-Executive Chairman
Anthony Boucaut, Executive Director and Managing Director
Anthony Ritter, Executive Director and Chief Executive Officer
John Diddams, Non-Executive Director
Colin Hughes, Non-Executive Director
Company Secretaries:
Anthony Ritter and John Diddams
Registered Office:
Level 1, 51 Montague Street North Wollongong NSW 2500
Principal Place of Business:
Level 1, 51 Montague Street North Wollongong NSW 2500
Lawyers:
Auditors:
Share Registry:
Bankers:
Bird & Bird
Level 11, 68 Pitt Street Sydney NSW 2000
RSM Australia Partners
Level 13, 60 Castlereagh Street Sydney NSW 2000
Boardroom Pty Ltd
Level 12, 225 George Street Sydney NSW 2000
National Australia Bank Limited
118-126 Princes Highway Fairy Meadow NSW 2519
Westpac Banking Corporation
Suite 1, 104 Crown Street Wollongong NSW 2500
Stock Exchange Listing Code:
SKB
Website:
www.skydive.com.au
57