ACN 167 320 470
ANNUAL REPORT
FOR THE YEAR ENDED 30 JUNE 2018
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Annual Report
For The Year Ended 30 June 2018
Contents
Chairman's Letter
Joint Managing Director / Chief Executive Officer 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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63
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Chairman's Letter
Dear Shareholder,
On behalf of the Board of Directors of Experience Co Limited (“EXP” or “Group”), I hereby present the Annual Report for the 12 months ended 30 June 2018.
FY2018 was a successful but challenging year, and the highlights include:
• The change of name from Skydive the Beach Group Limited (ASX: SKB) to Experience Co Limited (ASX: EXP) to better reflect the evolving and disparate nature
and strategic value of the Group’s expanded operations;
• The acquisition of the following businesses as part of that strategic direction, each of which are expected to contribute to the future profitability of the Group:
o Byron Bay Ballooning
o Wine Country Ballooning
o GBR Helicopters
o Blue Ocean Productions
o Big Cat Green Island Reef Cruises
o Tropical Journeys, and
• Following the North Queensland acquisitions, the Group has consolidated all operational, sales and administration functions of all the adventure tourism
businesses in that area under one roof “Adventure House”, with attendant savings and synergies, and are all performing well and as forecast;
• Our NZ drop zones have continued to perform well, with jump numbers and profitability up on last year;
• The Australian skydiving jumps were down when compared to FY17, due to a combination of factors, including a decline in bookings as a result of the incident at
Mission Beach, and the adverse rain event in H2. The revenue from skydiving was up slightly compared to FY17 due to the 3% increase in average revenue per
jump, including photography products.
• Unfortunately, there were two incidents, resulting in fatalities in Mission Beach FNQ and Queenstown NZ, and our thoughts remain with the families and friends
of those affected by these tragedies. The relevant authorities conducted a thorough review of the Group’s equipment, processes, procedures and the personnel
involved and, in both cases, found they were all in good order such that both drop zones recommenced operations within a week. Safety in all things we do has
always been of paramount importance to the Group and will continue to be, with a continuous review of operations and equipment and changes made where deemed
appropriate for improvement;
• The Directors have reviewed the underlying assumptions for FY2019 and are confident that, barring unforeseen circumstances, year on year increases in
Revenue and EBITDA can be achieved;
The Board is very pleased to welcome Bob East to the EXP Board as a Non-executive Director, and subject to his re-election at the 2018 AGM, it is the Board’s
intention to elect him as Chairman of the Board at that time.
I would like to thank the Group executives and staff for all their efforts in what has been another exciting year. I look forward to their continued efforts to help EXP
grow into the enterprise we all know it can be, that is; a leading, well respected and profitable, adventure tourism and leisure company.
Lastly, I would like to thank the shareholders for their continued support, without which none of this would be possible.
Yours faithfully,
John Diddams
Acting Chairman
3
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Joint MD & CEO Letter
Dear Shareholder,
FY2018 has been a challenging, however successful year for the Group having completed the acquisition of strategically aligned businesses which enhance the portfolio and
facilitate growth of the business for FY2019 and beyond.
Whilst the business has benefitted from the full 12 months of acquisitions completed in late FY2017, a number of significant acquisitions were completed during this year and
the benefit therefore is expected to flow into FY2019 and beyond. These acquisitions provide our customers with more choice in a broader range of experiences in key
locations throughout Australia and New Zealand. The acquisitions help grow our customer and repeat customer bases, which increases shareholder value.
Key Highlights include:
The GBR Helicopters acquisition strengthens the company’s position offering world class experiences for our customers in Far North Queensland with scenic helicopter flights
over the Great Barrier Reef and Daintree Rainforest.
The Big Cat Green Island Cruises acquisition offers full day and half day cruises to Green Island, a coral cay on the Great Barrier Reef which is a tropical island paradise, and is
approximately 16 nautical miles from Cairns marina.
The Tropical Journeys and the Calypso Reef Charter Businesses add sophisticated Great Barrier Reef experiences to the portfolio through highly respected and well recognised
brands from Port Douglas, North Queensland. The businesses also offers' diversification to the Group, offering personalised tours through the Daintree National Park via
Daintree Tours.
Other acquisitions such as Byron Bay Balloons, Wine Country Balloons, and Blue Ocean Productions all form part of the strategy to form adventure hubs at our locations where
the business can offer more than one adventure tourism experience in each location, together with the opportunity to purchase a photo or video package to capture the
experience.
The Group delivered results in line with guidance issued on 30 April 2018 of total revenue of $135,000,000 representing a 51% increase on FY2017, and EBITDAI of
$27,411,000 representing a 31% increase on FY2017.
The Group now employs over 700 full time and part time employees and in FY2018 conducted approximately 500,000 adventure experiences throughout the business.
FY2019 Outlook and Strategy
With a commitment to drive ongoing growth and deliver shareholder value in FY2019, we will continue to deliver on the following to achieve our key strategies:
· Consolidate the businesses acquired during the year with a focus on synergies, efficiencies and enhanced operating processes and systems gained from the acquisitions.
· Grow the customer base as a result of additional and enhanced experiences options and locations.
· Capitalise on the well respected and recognised brands.
· Where appropriate and feasible, acquire complementary businesses offering increased experience options to customers aimed at growth and development.
· Take advantage of the growth in domestic and international tourism including initiatives to capture the growing Asian market.
· Increase capability to capture growth in trends towards online bookings.
· Ongoing focus on human capital to achieve the next growth stage of the business.
We thank our customers, investors and all our stakeholders for their ongoing support of Group during FY2018.
We are sincerely grateful to the large dedicated team of people in our organisation who have continued to help grow the company, and to those people that have joined the
company as a result of acquisitions or our organic growth. The vision of Experience Co is to become the largest and most respected adventure tourism company in the world,
and we are well positioned to achieve this largely due to the quality people we have that make up our team.
We look forward to continuing to build on the growth and successes of the Group in the year ahead.
Anthony Boucaut Anthony Ritter
Managing Director Chief Executive Officer
4
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Directors Report
Your directors present their report on the consolidated entity (referred to herein as the Group) consisting of Experience Co Limited (formerly Skydive the Beach
Group Limited) and its controlled entities for the financial year ended 30 June 2018.
The Company has changed its name from Skydive the Beach Group Limited to Experience Co Limited with effect from 9 October 2017.
General Information
Directors
The following persons were directors of Experience Co Limited during or since the end of the financial year up to the date of this report:
John Diddams - Independent Non-Executive Director and Acting Chair of the Board
Colin Hughes - Independent Non-Executive Director
Kerry (Bob) East - Independent Non-Executive Director (appointed 30 April 2018)
Anthony Boucaut - Executive Director and Managing Director
Anthony Ritter - Executive Director and Chief Executive Officer
William Beerworth - Independent Non-Executive Director and Chair of the Board (resigned 30 April 2018)
Particulars of each Director's experience and qualifications are set out on page 6 and 7 of this report.
Company Secretaries
John Diddams and Anthony Ritter held the position of joint Company Secretaries for the duration of the year.
The Directors appointed Fiona Van Wyk as Company Secretary on 10 September 2018 at which time the two incumbent joint Company Secretaries resigned.
Principal Activities
The principal activities of the Group during the period was the provision of adventure tourism and leisure experiences to the public, including tandem skydiving in
Australia and New Zealand, white water rafting, canyoning, helicopter and boat tours, snorkeling and diving in the Great Barrier Reef, rainforest tours in the
Daintree in North Queensland and hot air ballooning in New South Wales.
During the year the group expanded its offering of activities and experiences by acquiring strategically aligned businesses. These are more fully disclosed at Note 16
of this report.
Operating Results and Review of Operations
The Group is a leading adventure tourism and activities business offering customers adventure activities and experiences throughout Australia and New Zealand. As
at 30 June 2018, adventure activities and experiences operated from the following locations:
-
-
-
18 skydiving locations in Australia and New Zealand
A leading eco-tourism adventure hub in Cairns Far North Queensland, offering customers white water rafting, hot air ballooning, canyoning, sea kayaking,
helicopter and boat tours to the Great Barrier Reef and Daintree Forest Tours.
2 Hot Air ballooning locations in New South Wales - Byron Bay and Hunter Valley.
The Group operates under a number of recognised and respected brands including: Skydive the Beach, Skydive Australia, NZone Skydive, Skydive Wanaka, Raging
Thunder Adventures, Reef Magic Cruises, Byron Bay Balloons, Great Barrier Reef Helicopters, Big Cat Green Island Reef Cruise, Tropical Journeys and Calypso Reef
Tours.
The Group has a team of more than 700 full and part time employees who manage the Group's activities. The Group provided approximately 500,000 experiences to
its customers during the year.
The operating results for the year are summarised as follows:
Earnings before interest, taxes, depreciation, amortisation and impairment (EBITDAI) *
Less: Depreciation, amortisation and impairment
Less: Finance costs
Profit before tax
Income tax expense
Net profit for the year after tax
Year ended
30 June 2018
$'000
Year ended
30 June 2017
$'000
27,411
(15,238)
(1,857)
10,316
(3,531)
6,785
20,988
(6,165)
(1,255)
13,568
(4,086)
9,482
* EBITDAI 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 EBITDAI to reflect the core earnings of the consolidated entity. A reconciliation between EBITDAI and profit after
income tax for the financial year ended 30 June 2018 is included above.
The EBITDAI for the year ended 30 June 2018 increased by 31% when compared to the year ended 30 June 2017. When comparing the year on year EBITDAI for
the 12 months to 30 June 2018 the number of months trading from the significant acquisitions completed during the year should be considered:
Raging Thunder Adventures purchased on 31 October 2016.
Reef Magic Cruises purchased on 1 May 2017.
Byron Bay Ballooning purchased on 21 July 2017.
Wine Country Ballooning acquired 18 September 2017.
GBR Helicopters purchased on 1 November 2017.
Blue Ocean Productions acquired on 28 November 2017.
Big Cat Green Island Reef Cruises purchased on 13 December 2017.
Tropical Journeys purchased on 19 December 2017.
30 June 2018
30 June 2017
12 months
12 months
11.5 months
9.5 months
8 months
7 months
6.5 months
6 months
8 months
2 months
NIL
NIL
NIL
NIL
NIL
NIL
5
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Directors Report
Significant Changes in State of Affairs
On 9 October 2017 the name of the Company was changed from Skydive the Beach Group Limited to Experience Co Limited.
On 10 October 2017 30,304,000 shares were issued at $0.66 each to institutional investors and on 3 November 2017 1,515,152 shares were issued at $0.66 each,
both share issues were part of the GBR Helicopters Pty Ltd acquisition.
On 13 December 2017, 77,102,361 shares were issued at $0.74 each to institutional investors, and on 29 December 2017, 5,255,901 shares were issued at $0.74
each to retail investors on the basis of 3 shares for every 17 shares held. Both share issues were to fund the acquisitions of Big Cat Green Island Cruises and
Tropical Journeys.
Experience Co Limited acquired the following adventure businesses from 1 July 2017 to 30 June 2018:
- 21 July 2017 acquired 100% of the ordinary shares in Byron Bay Ballooning Pty Ltd
- 18 September 2017 acquired 100% of the ordinary shares in Air Vistas Pty Ltd trading as Wine Country Ballooning
- 1 November 2017 acquired 100% of the ordinary shares in GBR Helicopters Pty Ltd and GBRH Holdings Pty Ltd
- 28 November 2017 acquired 100% of the ordinary shares in Blue Ocean Productions Pty Ltd
- 13 December 2017 acquired 100% of the ordinary shares in J & J Wallace (Projects) Pty Ltd trading as Big Cat Green Island Reef Cruises
- 19 December 2017 acquired 100% of the ordinary shares in Calypso Reef Charters Pty Ltd and Experience Daintree Pty Ltd trading as Tropical Journeys
As at the date of this report there were a total of 555,811,840 fully paid ordinary shares on issue, all of which were quoted on the ASX except for 6,756,757 shares
under restriction until 14 December 2018.
Dividends Paid or Recommended
Dividends paid or declared for payment during the financial year are as follows:
-
-
On 29 September 2017, a fully franked dividend of $0.01 per share was paid out of retained profits at 30 June 2017, amounting to $4,438,777.
The Directors have declared a final and fully franked dividend of $0.01 per share, amounting to $5,558,118, payable on 28 September 2018 out of retained
profits at 30 June 2018. For the purposes of determining any entitlement to the dividend, the record date has been set as 17 September 2018.
Information relating to Directors and Company Secretary
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
Directorships held in other listed
entities during the three years prior to
the current year
Kerry (Bob) East
Qualifications
Experience
Interest in Shares and Options
Special Responsibilities
Directorships held in other listed
entities during the three years prior to
the current year
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Independent Non-Executive Director, Acting Chairman
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.
2,340,545 ordinary shares
1,500,000 options
Chairman of the Audit and Risk Committee, member of the Remuneration and Nomination Committee.
Volpara Health Technologies Limited (ASX:VHT), Olivers Real Food Limited (ASX:OLI).
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.
Nil
Independent Non-Executive Director (appointed 30 April 2018)
MBA, MAICD
Bob has more than 20 years' experience in the tourism and hospitality industry. Most recently as the CEO of
Mantra Group Ltd. For the past 12 years, Bob was responsible for the consolidation and strengthening of the
Mantra Group brands and the growth of the business into one of the leading accommodation providers and
operators in Australasia as well as operations in Indonesia and Hawaii. Bob was instrumental
in the listing of
Mantra Group on the ASX in 2014 and in May 2018 the largest hospitality transaction in Australia - the $1.3b
acquisition of the Group by AccorHotels.
Nil
Member of the Audit and Risk Committee and Chair of the Remuneration and Nomination Committee.
Mantra Group Limited (ASX: MTR) (resigned 31 May 2018). Chair of Tourism Australia.
6
Information relating to Directors and Company Secretary (continued)
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Directors Report
Anthony Boucaut
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
Anthony Ritter
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
William Beerworth
Qualifications
Experience
Interest in Options
Special Responsibilities
Directorships held in other listed
entities during the three years prior to
the current year
Company Secretary
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
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 Experience Co business (when established as Skydive the Beach business in 1999). As a
qualified pilot, Anthony also oversees the aircraft and aircraft maintenance division within the business.
179,941,268 ordinary shares
3,000,000 options
Nil
Nil
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 public, private and not-for-profit entities. He has been involved with the Experience Co
leadership and financial
business since 2011 and has demonstrated strong strategic planning, analytical,
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 additional businesses, and in the organic growth of the underlying business.
3,383,970 ordinary shares
2,500,000 options
Nil
Nil
Independent Non-Executive Director and Chairman (resigned 30 April 2018)
BA LLB (Sydney), LLM SJD (Virginia), MCOM (NSW), MBA (Macquarie), member of the NSW Law Society, FAICD,
FCPA and CTA
spanning more than 40 years.
An investment banker and corporate solicitor, Bill was educated in Australia and the United States and has a
career
senior positions before establishing
Beerworth+Partners Limited, a corporate advisory firm specialising in corporate strategy, M&A, and foreign
investment.
500,000 options
None
Bill held a number of
Redhill Education Limited (ASX: RDH) (Chairman).
Fiona van Wyk was appointed as company secretary on 10 September 2018. Fiona has over 20 years’ experience as a company secretary, most recently as
company secretary of the Manta Group from 2007 to May 2018.
Fiona is a member of the Governance Institute of Australia and the Australian Institute of
Company Directors.
Meetings of Directors
During the financial year, 18 meetings of directors (including Board Committee Meetings) were held.
Attendances by each director during the year were as follows:
John Diddams
Colin Hughes
Kerry (Bob) East
Anthony Boucaut
Anthony Ritter
William Beerworth
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
18
18
2
18
18
16
18
18
2
14 **
18
9 **
4
4
-
-
-
4
4
4
-
-
-
2 **
2
2
-
-
-
2
2
2
-
-
-
1 **
** directors were excused from attendance at meetings during this time due to prolonged ill health.
Options
At the date of this report, the unissued ordinary shares of Experience Co 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
No matter or event has arisen since 30 June 2018 that has significantly affected the Group’s operations, results or state of affairs.
7
Environmental Issues
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Directors Report
The Group holds relevant and valid permits under regulatory bodies such as the Great Barrier Reef Marine Park Authority (GBRMPA) and Queensland Parks and
Wildlife Service (QPWS) and the Group carries out its activities within the guidelines prescribed by such regulators. 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.
Corporate Governance Statement
The Group and the Directors are committed to achieving and demonstrating a high standard of corporate governance. A copy of the Group's corporate governance
statement current as at 28 August 2018 can be found on the website www.experienceco.com/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 willful breach of duty in relation to
the Company. The premium payable for FY2018 is $47,160 and the Company has elected to pay this premium by instalments and as at the date of this report all
instalments due have been paid.
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 or the Board 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 2018:
Taxation planning and compliance
OSR compliance and review
Research and Development lodgements
Due diligence investigations on acquisitions
$
132,791
18,725
20,000
281,953
453,469
The tax services comprised mainly tax compliance, an Office of State Revenue review and advisory services in relation to the tax consolidation of the Group.
The services also included financial and tax due diligence on a number of acquisitions completed during the year
Auditor’s Independence Declaration
The lead auditor’s independence declaration for the year ended 30 June 2018 has been received and can be found on page 13 of the financial report.
8
Rounding of Amounts
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Directors Report
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 Experience Co Limited has been designed to align the objectives of senior executives with the Group's strategy and business objectives
aimed at driving ongoing shareholder value. The Group provides a fixed remuneration and offers short-term and long-term incentives based on areas of
performance affecting the Group's financial performance and other factors key to ongoing growth and development of the business. The Board of Experience Co
Limited believes the remuneration policies are appropriate and effectively attract and retain high-quality and motivated senior executives to manage the Group's
business, as well as create goal congruence between directors, senior executives and shareholders.
The Board’s policy for determining the nature and amount of remuneration for senior executives of the Group is as follows:
─
─
─
─
─
─
The remuneration policy is developed by the Remuneration and Nomination Committee and approved by the Board seeking professional advice from
independent external consultants, as required from time to time
All senior executives receive a base salary which is based on factors such as length of service, experience and level of involvement in the business
All senior executives are entitled to receive superannuation, fringe benefits and performance incentives
Performance incentives are only paid once predetermined key performance indicators (KPIs) have been met. The total amount attributed to STI's is
represented as a target % of fixed remuneration of between 20% and 50%
Incentives paid in the form of options or performance rights may be issued which are intended to align the interests of the senior executives of the business
In this regard, senior executives are prohibited from limiting risk attached to those instruments by use of derivatives or other
directors and shareholders.
means
The Remuneration and Nomination Committee reviews senior executive remuneration packages annually with reference to the Group’s financial performance,
senior executive performance and comparable industry information.
The performance of senior executives is measured against criteria agreed annually with each senior executive aimed at driving a culture based on achieving the
Group's financial performance targets and growth strategies to deliver ongoing shareholder value. All bonuses and incentives are linked to predetermined
performance criteria. The Directors may, however, exercise their discretion in relation to approving incentives, bonuses and issue of options. Any such discretion
must be justified by reference to measurable performance criteria. The policy is designed to attract the highest calibre of senior executives and reward them
appropriately for performance resulting in long-term growth.
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.
Non-Executive Director remuneration arrangements
The Board's policy is to remunerate Non-Executive Directors based on market related fees for time, commitment and responsibilities. The Remuneration and
Nomination Committee determines fees payable to Non-Executive Directors and reviews their remuneration annually, based on market practice, duties and
accountability. Independent external advice was sought during the period.
Non-Executive Directors receive a Board fee and fees for chairing or participating on board committees per below:
Base fees inclusive of superannuation
Chair of Board - $120,000 per annum
Other Non-Executive Directors - $80,000 per annum
Chair of Committee - $25,000 per annum
Member of Committee - $20,000 per annum
The maximum annual aggregate of Director's fee pool is $750,000. Any change to this aggregate annual amount is required to be approved by Shareholders.
All Non-Executive Directors enter into a service agreement with the Company in the form of a letter of appointment.
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.
Engagement of Remuneration Consultants
During the year, the Remuneration and Nomination Committee engaged independent external remuneration consultants, Crichton and Associates Pty Ltd (Crichton)
to review the Company’s remuneration policies and frameworks. During the year Crichton were paid $11,145 for their services. All advice from Crichton is carefully
considered by the Nomination and Remuneration Committee and the Board. In accordance with the Corporations Act, 2001, Crichton has declared that their advice
has been provided free of any undue influence by any member of the KMP or senior executive and on that basis the Board is satisfied that all advice received from
Crichton has been provided free from any undue influence by any member of the KMP or senior executive.
Performance-based Remuneration
Part of the remuneration packages of the executive directors and senior executives has a performance-based component (STI bonus) based on key performance
indicators (KPIs) which are set annually. The intention is to create goal congruence between senior executives with that of the business' long-term growth and
shareholders. The performance measures are specifically tailored to each individual and their area of responsibility.
The KPIs target areas of the business 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 levels set are based on the Group's agreed annual targets and annual financial budgets for the Group.
Performance in relation to the KPIs is assessed annually, with bonuses being awarded depending on the level of achievement of the KPI’s by the respective senior
executive.
Following assessment, the KPIs are reviewed by the Remuneration and Nomination Committee prior to being awarded and before the KPIs are set for the following
year.
In determining whether a KPI has been achieved, an assessment is based on final year-end audited results, including EBITDAI performance.
9
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Directors Report
Relationship between Remuneration Policy and Company Performance
The remuneration policy has been tailored to increase goal congruence between senior executives, executive directors and shareholders. The methods applied to
achieve this are:
- a performance-based bonus based on achieving KPI targets; and
- the issue of options or performance rights aimed at aligning the interests of senior executives with growing shareholder value.
The following table shows the gross revenue, EBITDAI, profits and dividends for the last four 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 EBITDAI year on year as well as the payment of dividends to shareholders. The Board is of the opinion that these results can be attributed, in part, to
the previously described remuneration policy.
Sales revenue ($'000)
EBITDAI ($'000)
Net profit for the year ($'000)
Market capitalisation ($'000)
Dividends paid ($'000)
Earnings per share (cents)
Share price at financial year end ($)
Dividends paid (cents per share)
2018
135,300
27,411
6,785
355,720
4,349
1.34
0.64
0.01
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 short-term and long-term incentive
plans based on the achievement of KPIs such as revenue targets and continued employment with the Group. The objective of the schemes is to reinforce the short
and long-term goals of the business in alignment with the common interests of senior executives and shareholders.
No performance based bonuses or remuneration based on these performance targets were paid or accrued in FY2018 in relation to the MD and CEO of the
Company.
The satisfaction of the performance conditions is based on a review of the audited financial statements of the Group and publicly available market indices.
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 2018 and any change during the year
Group KMP
John Diddams
Colin Hughes
Kerry (Bob) East **
Anthony Boucaut
Anthony Ritter
Phillip Turner
Steve O'Malley
Clark Scott
William Beerworth *
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Executive Director, Managing Director
Executive Director, Chief Executive Officer
Chief Financial Officer
Group General Manager (NQ) Commercial
General Manager (New Zealand)
Independent Non-Executive Director and Chairman
Contract details (duration & termination)
Duration and termination unspecified.
Duration and termination unspecified.
Duration and termination unspecified.
Duration unspecified. Termination requires 3 months written notice.
Duration unspecified. Termination requires 3 months written notice.
Duration unspecified. Termination requires 3 months written notice.
Duration unspecified. Termination requires 6 months written notice.
Duration unspecified. Termination requires 3 months written notice.
Duration and termination unspecified.
* Bill Beerworth resigned 30 April 2018.
** Bob East appointed 30 April 2018.
Group KMP
John Diddams
Colin Hughes
Kerry (Bob) East
Anthony Boucaut
Anthony Ritter
Phillip Turner
Steve O'Malley
Clark Scott
William Beerworth
Proportions of Performance-related
Shares/
Units
%
Non-salary cash-
based incentives
%
Options
%
-
-
-
-
13%
4%
-
50%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Portion of Non-performance
Fixed
Salary/Fees
%
100%
100%
100%
100%
87%
96%
100%
50%
100%
Total
%
100%
100%
100%
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. Termination payments are payable in accordance with
relevant laws and regulations based on benefits accrued at the date of termination.
10
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Directors Report
Changes in Directors and Executives Subsequent to Year-end
The changes in directors or executives since 30 June 2018 are disclosed on page 5.
Remuneration Expense Details for the Years ended 2018 and 30 June 2017
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 group. Such amounts have been calculated in accordance with Australian Accounting Standards:
Table of Benefits and Payments for the Years ended 30 June 2018 and 30 June 2017
Short-term benefits
Post
Long-term
Equity-settled
Fringe benefits
Tax
Travel Allowances
$
Pension and
superannuation
$
LSL
$
Options/Rights
$
Total
$
FY 2018
Group KMP
John Diddams **
Colin Hughes
Kerry (Bob) East ***
Anthony Boucaut
Anthony Ritter
Phillip Turner
Steve O'Malley
Clark Scott
William Beerworth *
Salary, Fees and
Leave
$
Profit Share and
bonuses
$
161,000
120,000
25,000
250,000
291,666
197,933
217,542
150,839
166,375
1,580,355
-
-
-
-
60,000
10,000
-
167,861
-
237,861
$
-
-
-
13,195
17,402
-
17,827
-
48,424
* Bill Beerworth resigned 30 April 2018.
** For John Diddams, $161,000 includes $36,000 for Company Secretarial services.
*** Kerry (Bob) East commenced 30 April 2018.
Short-term benefits
-
-
-
47,670
47,670
1,400
-
-
-
96,740
-
-
-
23,750
27,708
19,431
20,666
-
-
99,977
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
161,000
120,000
25,000
334,615
444,446
228,764
238,208
336,527
166,375
2,063,357
FY 2017
Group KMP
John Diddams *
Colin Hughes
Anthony Boucaut
Anthony Ritter
Phillip Turner **
William Beerworth
Salary, Fees and
Leave
$
Profit Share and
bonuses
$
Fringe benefits
Tax
Travel Allowances
$
Post
Employment
Pension and
superannuation
$
Long-term
benefits
Equity-settled
share-based
LSL
$
Options/Rights
$
Total
$
161,000
88,654
250,000
200,000
159,561
165,000
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
-
8,422
23,750
19,000
16,108
-
67,280
-
-
-
-
-
-
-
-
-
-
-
-
-
-
161,000
97,076
562,777
439,930
187,069
165,000
1,612,852
* For John Diddams, $161,000 includes $36,000 for company Secretarial services.
** Phillip Turner commenced on 25 July 2016.
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 FY2018 table of benefits and payments for Anthony Ritter, Phillip Turner and Clark Scott relate to FY2017 KPI's achieved.
Bonuses included in the FY2017 table of benefits and payments for executive directors above relate to FY2016 bonuses paid to executive directors during FY2017,
having achieved FY2016 KPI's set by the Board.
Bonuses included in the FY2017 table of benefits and payments for Phillip Turner relate to FY2017 bonuses paid to Phillip Turner during FY2017, having achieved
FY2017 KPI's.
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.
Options Granted to Key Management Personnel
William Beerworth (resigned 30 April 2018)
Anthony Boucaut
Anthony Ritter
John Diddams
Dr. Nigel Finch (Resigned as Director 31 January 2016)
Timothy Radford (Resigned as Director 9 June 2016)
Colin Hughes
Kerry (Bob) East (appointed 30 April 2018)
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
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Date of expiry
29/01/2025
29/01/2025
29/01/2025
29/01/2025
29/01/2025
29/01/2025
Closing balance
500,000
3,000,000
2,500,000
1,500,000
300,000
2,500,000
-
-
10,300,000
Note 1
The fair value of options granted as remuneration and as shown in the above table above was recognised in accordance with Australian Accounting
Standards and was recognised as an expense over the relevant vesting period to the extent that conditions necessary for vesting were satisfied.
Note 2
All options have vested, so no further expense is recognised in 2018 (2017: $3,891).
Note 3
There were no options exercised during the year.
11
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Directors Report
KMP Shareholdings
The number of ordinary shares in Experience Co Limited held by each KMP of the Group, including their close family members and entities related to them, at the
end of the financial year is as follows:
John Diddams
Colin Hughes
Kerry (Bob) East
Anthony Boucaut
Anthony Ritter
Phillip Turner
Steve O'Malley
Clark Scott
William Beerworth
Balance at
Beginning of Year
3,090,545
-
-
179,924,273
3,383,970
-
-
-
-
186,398,788
Granted as
Remuneration
during the Year
Issued on Exercise
of Options during
the Year
Other Changes
during the Year
( on market)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(750,000)
-
-
16,995
-
20,000
-
-
-
(713,005)
Balance at End of
Year
2,340,545
-
-
179,941,268
3,383,970
20,000
-
-
-
185,685,783
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 loans totalling $1,588,000 of which the
loans expire on 28 February 2021, 30 June 2023 and 5 October 2018, 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
Further details on all KMP are disclosed at Note 30.
$'000
1,453
362
(300)
73
1,588
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:
Anthony Ritter
Chief Executive Officer
12
19 September 2019 AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Experience Co Limited and controlled entities for the year
ended 30 June 2018, I declare that, to the best of my knowledge and belief, there have been no contraventions
of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
G N SHERWOOD
Partner
Sydney, NSW
Dated: 19 September 2018
13
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30 June 2018
Consolidated Group
Note
2018
$000
2017
$000
Sales revenue
Cost of sales
Gross profit
Other income
Administrative and corporate expenses
Occupancy expenses
Depreciation and amortisation expenses
Impairment of property, plant and equipment
Marketing, advertising and agents commission expenses
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
6
6c
6c
10
10
135,300
(79,647)
55,653
1,363
(22,730)
(3,520)
(13,492)
(1,746)
(2,786)
(553)
(1,857)
(16)
10,316
(3,531)
6,785
89,566
(51,469)
38,097
1,021
(13,330)
(2,365)
(6,165)
-
(1,858)
(573)
(1,255)
(4)
13,568
(4,086)
9,482
(1,004)
-
(75)
(1,079)
5,706
1.34
1.31
(166)
(166)
9,316
2.24
2.18
14
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Consolidated Statement of Financial Position
for the year ended 30 June 2018
Consolidated Group
Note
2018
$000
2017
$000
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax asset
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
22
14
12
15
17
18
19
21
22
23
20
21
22
23
24
25
7,171
8,385
4,710
317
1,979
22,562
1,803
1,560
121,539
84,968
209,870
232,432
9,630
3,305
-
2,834
1,158
16,927
32,230
2,429
454
35,113
52,040
180,392
168,860
14,644
(3,112)
180,392
9,490
4,340
2,525
-
3,705
20,060
1,153
38
70,370
47,959
119,520
139,580
6,596
5,692
1,338
1,490
891
16,007
23,932
4,962
183
29,077
45,084
94,496
84,321
12,208
(2,033)
94,496
15
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Consolidated Statement Changes in Equity
for the year ended 30 June 2018
Consolidated Group
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
Capital raising costs
Dividends paid during the year
Employee share options issued
Total transactions with owners and other transfers
Balance at 30 June 2017
Balance at 1 July 2017
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
Capital raising costs
Deferred tax on capital raising costs
Dividends paid during the year
Total transactions with owners and other transfers
Note
Issued Capital
Retained
Earnings
Asset
Revaluation
Reserve
Common
Control
Reserve
Share
Option
Reserve
Foreign
Currency
Translation
Reserve
Total
$000
$000
$000
$000
$000
$000
$000
65,231 6,689 2,386 (4,171) 13
(101) 70,047
25
9
25
9
-
-
-
9,482
-
9,482
20,126
(1,036)
-
-
19,090
-
-
(3,963)
-
(3,963)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5
5
-
(165)
(165)
9,482
(165)
9,317
-
-
-
-
-
20,126
(1,036)
(3,963)
5
15,132
84,321 12,208 2,386 (4,171) 18
(266) 94,496
84,321
12,208
2,386
(4,171) 18 (266) 94,496
-
-
-
6,785
-
6,785
-
(1,004)
(1,004)
86,946
(3,438)
1,031
-
84,539
-
-
-
(4,349)
(4,349)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(75)
(75)
6,785
(1,079)
5,706
-
-
-
-
-
86,946
(3,438)
1,031
(4,349)
80,190
Balance at 30 June 2018
168,860
14,644
1,382
(4,171)
18
(341)
180,392
The accompanying notes form part of these financial statements.
16
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Consolidated Statement of Cash Flows
for the year ended 30 June 2018
Note
2018
$000
2017
$000
Consolidated Group
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers (GST inclusive)
Payments to suppliers and employees (GST inclusive)
Finance costs
Income tax paid
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
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
Capital raising costs
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 decrease in cash held
Cash and cash equivalents at beginning of financial year
27
16
Cash and cash equivalents at end of financial year
11
The accompanying notes form part of these financial statements.
149,284
(128,044)
(1,680)
(4,718)
14,842
(23,402)
(1,500)
(72,448)
1,770
(95,580)
80,947
(3,439)
15,601
(9,690)
(4,349)
(951)
300
78,419
(2,319)
9,490
7,171
89,865
(70,524)
(1,255)
(5,446)
12,640
(18,754)
(1,259)
(31,539)
845
(50,707)
20,126
(1,036)
20,791
(1,510)
(3,963)
(127)
457
34,738
(3,329)
12,819
9,490
17
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
These consolidated financial statements and notes represent those of Experience Co 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 19 September 2018 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 Experience Co 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".
18
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
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
Experience Co 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.
19
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
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 cost, 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.
Aircraft
Aircraft assets are measured under the revaluation model and accounted for at their fair value, being the amount for which the asset could be exchanged between knowledgeable
willing parties in an arm’s length transaction, based on periodic valuations by external independent valuers or director valuations, less subsequent depreciation.
Increases in the carrying amount arising on revaluation of aircraft assets are credited to a revaluation reserve in equity. Decreases that offset previous increases of the same
assets are charged against fair value reserves directly in equity; all other decreases are charged to the statement of comprehensive income. 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.
20
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
Note 1 Summary of Significant Accounting Policies (continued)
(h)
Property, Plant and Equipment (continued)
All other classes of fixed assets
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%
30%
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.
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.
21
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
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 amortised 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,PlantandEquipment). 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.
22
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
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
include termination benefits.
In either case, unless the number of employees affected is known, the obligation for termination benefits is measured on the basis of the 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)
(p)
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 skydiving 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).
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.
23
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
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
instruments, by reference to observable market information where such instruments are held as assets. Where this
market price in relation to the transfer of such financial
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
transaction costs are expensed to profit or loss immediately.
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
24
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
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 instrument to the net carrying amount of the financial asset or 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.
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, 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.
(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.
25
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
Note 1 Summary of Significant Accounting Policies (continued)
(v)
Financial Instruments (continued)
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.
(w)
Earnings Per Share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Experience Co 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.
26
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
Note 1 Summary of Significant Accounting Policies (continued)
(z)
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.
(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 the directors believe 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,
retrospective application to
Changes in Accounting Estimates and Errors (subject to certain practical expedients in AASB 15); or recognise the cumulative effect of
incomplete contracts on the date of initial application. There are also enhanced disclosure requirements regarding revenue.
The consolidated entity will adopt this standard from 1 July 2018, resulting in an expected decrease in revenue of $478,560, an increase in deferred revenue of $478,560,
deferred tax balances to change accordingly.
-
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 million and corresponding liability of a similar amount. There is not expected to be any material impact on the consolidated statement of profit or loss.
27
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
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 12.1% have been used in all models.
No impairment has been recognised in respect of goodwill at the end of the reporting period.
(b)
(c)
(d)
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 2018. Changes in fair value are recognised in the asset revaluation reserve in equity and impairment expenses in profit and loss.
The Group engaged an independent valuation specialist to assess the fair value of some of it's aircraft as at 30 June 2018 and some aircraft were valued by management. 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 in determining "at acquisition" values.
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. There are no specific "uncertain tax
positions".
(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)
(g)
(h)
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.
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.
28
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
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
Reserves
TOTAL EQUITY
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Total profit
Total comprehensive income
Guarantees
The Parent entity has entered into financial guarantees with NAB as disclosed at Note 21.
Contingent liabilities
There were no contingent liabilities as at 30 June 2017 or 30 June 2018.
Contractual commitments
There were no contractual commitments as at 30 June 2017 or 30 June 2018.
Note 4
Revenue and Other Income
Sales revenue
-
sale of goods and provision of services
Other revenue
-
-
interest received
other revenue
Total revenue
Interest revenue from:
-
-
directors (Note 30 (c))
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:
2018
$000
2017
$000
7,024
154,827
161,851
1,805
20,190
21,995
167,828
(28,081)
109
139,856
45,531
39,007
84,538
2,120
14,524
16,644
84,321
(16,536)
109
67,894
(6,932)
(4,791)
(6,932)
(4,791)
Consolidated Group
2018
$000
2017
$000
135,300
135,300
135
1,228
1,363
136,663
73
62
135
89,566
89,566
170
851
1,021
90,587
63
107
170
Cost of sales
79,647
51,469
Interest expense on financial liabilities not at fair value through profit or loss:
-
Unrelated parties
Total interest expense
-
Other finance costs
Total finance cost
29
1,708
1,708
149
1,857
1,074
1,074
181
1,255
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
Note 5
Profit for the Year (continued)
Foreign currency translation gains
Employee benefits expense
Bad and doubtful debts:
-
trade receivables
Depreciation and amortisation expense
Impairment of property, plant and equipment
Note 6
Tax Expense
(a)
The components of tax (expense) income comprise:
Current tax
Deferred tax (Note 22)
Over provision of tax from prior years
Consolidated Group
2018
$000
2017
$000
5
31
38,947
21,041
25
-
13,492
6,165
1,746
-
2018
$000
2017
$000
4,152
(173)
(448)
3,531
4,021
428
(363)
4,086
(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% (2017: 30%)
3,095
4,070
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
11
34
240
-
-
259
12
32
55
(57)
3,380
4,371
(448)
813
(91)
(123)
3,531
(685)
496
8
(105)
4,086
The applicable weighted average effective tax rates are as follows:
34.2%
30.1%
(c)
Tax effects relating to each component of other comprehensive income:
Before-tax amount
2018
Tax (expense)
benefit
Net-of-tax amount
Before-tax amount
Tax (expense) benefit
Net-of-tax amount
2017
Consolidated Group
$000
$000
$000
$000
$000
$000
Revaluation of property,
plant and equipment
Exchange differences on
translating foreign
operations (note 25(d))
(1,004)
(75)
(1,079)
-
-
-
(1,004)
(75)
(1,079)
-
(166)
(166)
-
-
-
-
(166)
(166)
30
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
Note 7
Key Management Personnel Compensation
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 2018.
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
2018
$000
2017
$000
1,963
100
-
-
-
1,546
67
-
-
-
2,063
1,613
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.
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
Consolidated Group
2018
$000
2017
$000
241
172
282
694
221
312
147
680
2018
$000
2017
$000
On 29 September 2017, a fully franked dividend of $0.01 per share was paid out of retained profits at 30 June 2017
4,349
3,963
(a)
(b)
(c)
The Directors have declared a final and fully franked dividend of $0.01 per share, amounting to $5,558,118, payable on 28 September 2018. For the purposes of
determining any entitlement to the dividend, the record date has been set as 14 September 2018.
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:
11,102
(2,382)
8,720
4,497
(1,864)
2,633
Net balance in (b) above excludes franking credits arising from tax payments made subsequent to 30 June 2018.
31
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
Note 10 Earnings Per Share
(a)
Earnings used to calculate basic and diluted EPS
6,785
9,482
(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
No.
506,008,037
No.
423,925,384
10,300,000
10,300,000
-
-
Weighted average number of ordinary shares outstanding during the year used in calculating dilutive EPS
516,308,037
434,225,384
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
The effective interest rate on short-term bank deposits was 2.4% (2017: 2.5%); 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
CURRENT
Trade receivables
Provision for impairment (a)
Other receivables and prepayments
Amounts receivable from related parties
—
director of parent entity (Note 30)
Total current trade and other receivables
NON-CURRENT
Loan receivable (b)
Amounts receivable from related parties
—
director of parent entity (Note 30)
Total non-current trade and other receivables
1.34
1.31
7,129
42
7,171
2.24
2.18
9,464
26
9,490
7,171
7,171
9,490
9,490
Consolidated Group
2018
$000
2017
$000
5,900
(25)
5,875
2,210
8,085
300
8,385
515
1,288
1,803
2,917
-
2,917
1,123
4,040
300
4,340
-
1,153
1,153
(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
Opening Balance
Charge for the Year
Amounts Written Off
Closing Balance
1 July 2016
$000
$000
$000
$000
3
3
-
-
(3)
(3)
-
-
30 June 2017
Opening Balance
Charge for the Year
Amounts Written
Off
1 July 2017
Closing Balance
30 June 2018
$000
$000
$000
$000
-
-
25
25
-
-
25
25
(b) The loan is unsecured, bears interest at 5% per annum and has a term of 10 years.
32
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
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 33. 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
2018
Trade and term receivables
Other receivables
Total
Consolidated Group
2017
Trade and term receivables
Other receivables
Total
Gross
Amount
$000
5,875
2,210
8,085
Gross
Amount
$000
2,917
1,123
4,040
Past due
and
impaired
$000
(25)
-
(25)
Past due
and
impaired
$000
<30
$000
1,235
-
1,235
Past due but not impaired
(days overdue)
31-60
$000
61-90
$000
>90
$000
659
-
659
453
-
453
Past due but not impaired
(days overdue)
<30
$000
31-60
$000
61-90
$000
>90
$000
-
-
-
542
-
542
165
-
165
29
-
29
Within initial
trade terms
$000
3,060
2,210
5,270
Within initial
trade terms
$000
1,908
1,123
3,031
493
-
493
273
-
273
(c)
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).
(d)
Financial Assets Classified as Loans and Receivables
Trade and other Receivables
— Total current
— Total non-current
Total financial assets classified as loans and receivables (note 33)
(e)
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 2018
Deposit paid for leasehold land and buildings (Stuart Park redevelopment)
Other current assets
Note 15 Other Financial Assets
NON-CURRENT
Unlisted investments, at fair value
— shares in other corporations
— unlisted investments (i)
Total unlisted investments (Note 33)
Consolidated Group
2018
$000
2017
$000
8,385
1,803
10,188
4,340
1,153
5,493
4,710
2,525
877
-
-
541
561
1,979
27
1,533
1,560
1,380
80
1,475
541
229
3,705
38
-
38
(i)
On 3rd November 2017, Fish for Fish Investments Pty Ltd, a wholly owned subsidiary of Experience Co Limited, acquired a 10% shareholding in Trinity
Holdings (Qld) Pty Ltd (ACN 104 494 215) and Trinity Software Australia Pty Ltd (ACN 089 902 643) (“Trinity”) at an investment of $1,000,000.
On 30th May 2018, Fish for Fish Investments Pty Ltd, a wholly owned subsidiary of Experience Co Limited, acquired a 5% shareholding in Trinity Holdings
(Qld) Pty Ltd (ACN 104 494 215) and Trinity Software Australia Pty Ltd (ACN 089 902 643) (“Trinity”) at an investment of $500,000.
Trinity own and operate a booking reservations platform called Respax, a system that all Experience Co products use. In addition to the investment the
company has loaned Trinity $500,000 as disclosed in Note 12 (b).
33
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
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.
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
Experience Co NZ Holdings Limited (formerly Skydive (New Zealand) Limited)
Skydive Queenstown Limited
Ultimate Adventure Group Ltd (formerly Skydive Glenorchy Limited)
Parachute Adventure Queenstown Limited
Skydive Wanaka Limited
Performance Aviation (New Zealand) 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
Byron Bay Ballooning Pty Ltd
Air Vistas Pty Ltd
GBR Helicopters Pty Ltd
GBRH Holdings Pty Ltd
Blue Ocean Productions Pty Ltd
Calypso Reef Charters Pty Ltd
Fish for Fish Investments Pty Ltd
Experience Daintree Pty Ltd
J & J Wallace (Holdings) Pty Ltd
J & J Wallace (Projects) Pty Ltd
J & J Wallace (Tours) Pty Ltd
J & J Wallace (Permits) 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
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Ownership interest
2018
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%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
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%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Subsidiary financial information used in the preparation of these consolidated financial statements has also been prepared as at the same reporting date as
the Group’s financial statements.
(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
During the year ended 30 June 2018, Experience Co. Limited entered into the following acquisitions:
(i)
On 21 July 2017, Experience Co Limited acquired Byron Bay Ballooning Pty Ltd, being a company registered and trading within Australia, for the
consideration of $800,000.
Fair value of purchase consideration:
Cash
Assets and liabilities held at acquisition date:
- Current assets
- Non-current assets
- Current liabilities
Goodwill and other intangible assets
34
$000
800
6
52
(126)
(68)
868
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
Note 16
Interests in Subsidiaries (continued)
(b)
Acquisition of Controlled Entities (continued)
(ii)
On 18 September 2017 Experience Co Limited acquired Air Vistas Pty Ltd (trading as Wine Country Ballooning), being a company registered and trading in
Australia, for the consideration of $350,000.
Fair value of purchase consideration:
Cash
Assets and liabilities held at acquisition date:
- Current assets
- Non-current assets
- Current liabilities
- Non-current liabilities
Goodwill and other intangible assets
$000
350
10
70
-
(40)
40
310
(iii)
On 1 November 2017, Experience Co Limited, acquired GBR Helicopters Pty Ltd and GBRH Holdings Pty Ltd, being two companies registered and trading
within Australia, for the consideration of $19,600,000.
Fair value of purchase consideration:
Cash
Shares issued in Experience Co limited
Deferred Consideration
Working Capital Adjustment
Assets and liabilities held at acquisition date:
- Current assets
- Non-current assets
- Current liabilities
- Non-current liabilities
Goodwill and other intangible assets
$000
16,600
1,000
2,000
611
20,211
3,241
16,487
(2,648)
(38)
17,042
3,169
(iv)
On 28 November 2017 Experience Co Limited acquired Blue Ocean Productions Pty Ltd, a company registered in Australia. Consideration for the acquisition
was $350,000.
Fair value of purchase consideration:
Cash
Assets and liabilities held at acquisition date:
- Non-current assets
- Current and non-current liabilities
Goodwill and other intangible assets
$000
350
350
25
-
25
325
(v)
On 13 December 2017, Experience Co Limited acquired J & J Wallace (Projects) Pty Ltd (trading as Big Cat Green Island Reef Cruises), being a company
registered and trading within Australia, for the consideration of $38,070,000.
Fair value of purchase consideration:
Cash
Shares issued in Experience Co Limited
Working Capital Adjustment
Assets and liabilities held at acquisition date:
- Current assets
- Non-current assets
- Current liabilities
- Non-current liabilities
Goodwill and other intangible assets
35
$000
33,070
5,000
858
38,928
2,669
10,993
(1,611)
-
12,051
26,877
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
Note 16
Interests in Subsidiaries (continued)
(c)
(vi)
Acquisition of Controlled Entities (continued)
On 19 December 2017, Experience Co Limited acquired Calypso Reef Charters Pty Ltd and Experience Daintree Pty Ltd (trading as Tropical Journeys), a
business trading within Australia, for the consideration of $18,000,000.
Fair value of purchase consideration:
Cash
Working Capital Adjustment
Assets and liabilities held at acquisition date:
- Current assets
- Non-current assets
- Current liabilities
- Non-current liabilities
Goodwill and other intangible assets
Total consideration paid in relation to business acquisitions
$000
18,000
(201)
17,799
1,070
11,999
(1,091)
-
11,978
5,821
70,438
(vii)
In 2018 financial year, Experience Co Limited paid an amount of $1,232,000 to vendors of Reef Magic Cruises Pty Ltd. This payment was a fulfillment of an
obligation in accordance with the sale and purchase agreement for Reef Magic Cruises Pty Ltd, which was acquired on 1 May 2017.
Working capital payment - Australia Skydive
Working capital payment - Reef Magic
Total consideration paid in relation to business acquisitions
778
1,232
72,448
During the year ended 30 June 2017, Experience Co. Limited entered into the following acquisitions:
(viii)
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
Goodwill
$000
482
120
68
188
294
(ix)
On 31 October 2016, Experience Co 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
(x)
On 1 May 2017, Experience Co 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
36
$000
15,000
1,493
16,493
2,551
10,547
(1,296)
11,801
4,692
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
Note 16
Interests in Subsidiaries (continued)
(c)
Acquisition of Controlled Entities (continued)
(xi)
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 (Experience Co Limited)
Goodwill and other intangible assets
$000
350
500
850
850
(xii)
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
(d)
Business Combinations
$000
120
120
41,487
9,948
31,539
When comparing the results for the 12 months to 30 June 2018 the number of months of trading from major acquisitions year on year is set out below:
30 June 2018
30 June 2017
Raging Thunder Adventures purchased on 31 October 2016
Reef Magic Cruises Pty Ltd purchased on 1 May 2017
Byron Bay Ballooning purchased on 21 July 2017.
Air Vistas Pty Ltd acquired 18 September 2017.
GBR Helicopters Pty Ltd purchased on 01 November 2017
Blue Ocean Productions Pty Ltd acquired on 28 November 2017.
Big Cat Green Island Pty Ltd purchased on 13 December 2017
Tropical Journeys (the business) and Calypso Reef Charters Pty Ltd purchased
on 19 December 2017
12 months
12 months
11.5 months
9.5 months
8 months
7 months
6.5 months
6 months
8 months
2 months
NIL
NIL
NIL
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 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.
37
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
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
Consolidated Group
2018
$000
2017
$000
3,781
3,781
5,315
(181)
5,134
8,915
11,342
(3,621)
7,721
4,434
(890)
3,544
64,628
(2,713)
61,915
6,403
(1,571)
4,832
1,463
(920)
543
34,506
(2,111)
32,395
1,838
(164)
1,674
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
Total plant and equipment
Total property, plant and equipment
112,624
121,539
66,251
70,370
* The Group's aircraft assets were revalued at 30 June 2018. Refer to Note 34 for detailed disclosures regarding the fair value measurement of the Group's assets.
The aircraft were valued by independent valuers and management depending on the age, type, and condition of the aircraft.
At the date of revaluation, the carrying amount of aircraft is adjusted to the revalued amount. The accumulated depreciation is eliminated against the gross carrying
amount of the asset.
38
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
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.
Buildings
Plant &
Equipment
Leasehold
Improveme
nts
$000
$000
$000
Land
$000
Aircraft
$000
Motor
Vehicles
$000
Office
Equipment
Vessels
Floating Docks
$000
$000
$000
Total
$000
Consolidated Group:
Balance at 1 July 2016
Acquisitions through business
combinations
Additions
Revaluation increment
Disposals
Depreciation expense
Transfers between asset classes
340
835
4,859
675
31,256
1,312
-
2,315
1,735
881
1,810
123
306
377
2,081
76
12,744
2,054
-
-
-
-
-
-
-
(68)
-
-
-
-
-
-
(57)
(1,264)
(260)
(2,705)
(370)
2
-
(2)
-
-
Balance at 30 June 2017
646
3,473
7,342
1,370
43,105
3,119
226
54
408
-
-
(157)
-
531
-
8,922
342
-
-
(113)
-
-
39,503
1,655
17,495
-
-
-
(22)
-
18,388
-
(68)
(4,948)
-
9,151
1,633
70,370
Acquisitions through business
combinations
Additions
Impairment
Revaluation decrement
Disposals
Depreciation expense
Transfers between asset classes
950
965
861
642
14,374
482
102
22,235
2,185
808
1,880
1,806
13,948
1,431
182
2,414
-
-
-
-
-
-
-
-
-
-
(3)
-
-
-
(1,746)
(2,385)
-
(112)
(1,316)
(274)
(5,381)
-
(1,043)
-
-
-
-
-
(671)
471
-
-
-
-
-
-
51
131
-
-
-
40,662
24,785
(1,746)
(2,385)
(3)
(272)
(1,977)
(141)
(10,144)
-
572
-
-
Balance at 30 June 2018
3,781
5,134
7,721
3,544
61,915
4,832
543
32,395
1,674
121,539
(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
2018
$000
2017
$000
61,729
(35,214)
26,515
47,781
(29,833)
17,948
The Group's aircraft were revalued at 30 June 2018 by independent valuers and management. 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. 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
36,301
-
36,301
14,370
-
14,370
1,338
(1,020)
318
26,976
(2,552)
24,424
10,860
(1,305)
9,555
18,828
-
18,828
9,805
-
9,805
1,207
(839)
368
14,073
(1,048)
13,025
6,131
(198)
5,933
39
84,968
47,959
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
Note 18
Intangible Assets (continued)
Consolidated Group:
Balance at 1 July 2016
Assets acquired in business combinations
Transfers between asset classes
Amortisation charge
Balance at 30 June 2017
Assets acquired in business combinations
Additions
Amortisation charge
Closing value at 30 June 2018
Goodwill
Trademarks
Computer
Software
Customer
Relationships
and other
Leases & Licences
$000
$000
$000
$000
7,911
10,917
-
-
18,828
17,473
-
-
5,344
5,428
(967)
-
9,805
4,565
-
-
36,301
14,370
322
388
-
(342)
368
-
134
(184)
318
4,419
8,317
967
(678)
13,025
13,257
-
(1,858)
24,424
-
6,131
-
(198)
5,933
4,928
-
(1,306)
9,555
Total
$000
17,996
31,181
-
(1,217)
47,959
40,223
134
(3,348)
84,968
Intangible assets, other than goodwill and trademarks, have finite useful lives. The current amortisation charges for intangible assets are included under depreciation
and amortisation expense per the statement of profit or loss. Goodwill and trademarks have an indefinite useful life.
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
2018
$000
5,937
8,208
22,156
36,301
2017
$000
4,760
8,208
5,860
18,828
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 12.1%.
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
3%
3%
3%
Discount Rate
12.1%
12.1%
12.1%
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 33)
Note 20 Deferred Revenue
Income received in advance
40
Consolidated Group
2018
$000
2017
$000
4,147
5,483
9,630
3,390
3,206
6,596
9,630
6,596
-
-
9,630
6,596
1,158
891
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
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 (Note 33)
(a)
Total current and non-current secured liabilities:
Bank loan
Finance lease liabilities
Vendor finance loan
(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:
- $20,000,000 Cash Advance Facility
- $20,000,000 Master Asset Finance Facility
- $240,000 Bank Guarantee Facility
- $500,000 Business Card Facility
- $3,000,000 Foreign Exchange & Commodity Hedging Facility
Consolidated Group
2018
$000
2017
$000
263
3,042
-
3,305
18,004
14,226
-
32,230
86
3,400
2,204
5,692
15,137
8,795
-
23,932
35,535
29,624
18,267
17,268
-
35,535
15,224
12,196
2,204
29,624
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 2018 $18,000,000 of the Cash Advance Facility had been utilised.
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 $20,000,000 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 ratios were lodged during the reporting period and the company is compliant with all these
ratios.
(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 (Note 11)
Trade receivables (Note 12)
Total financial assets pledged
Consolidated Group
2018
$000
7,171
5,875
13,046
2017
$000
9,490
2,917
12,407
41
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
Note 22
Tax
CURRENT
Income tax receivable / (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 2017
Property, plant and equipment
Intangible assets
Provisions
Capital raising costs
Other
Balance at 30 June 2018
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
Amounts used
Closing Balance
Analysis of Total Provisions
Current
Non-current
Consolidated Group
2018
$000
2017
$000
317
317
(1,338)
(1,338)
Opening
Balance
Acquired in
business
acquisitions
Charged to
Income
Charged directly
to Equity
Closing Balance
$000
$000
$000
$000
$000
1,501
(94)
(185)
(358)
-
(71)
1,930
2,720
3,477
(608)
(538)
(89)
4,962
-
3,740
-
-
-
-
1,219
(31)
(423)
(180)
(18)
-
(1,334)
-
53
-
-
-
53
(642)
546
(617)
673
(132)
(172)
(138)
-
-
-
-
197
(1,382)
-
-
(1,032)
-
(2,414)
2,720
3,477
(608)
(538)
-
(89)
4,962
696
4,076
(1,225)
(897)
(221)
2,429
Consolidated Group
2018
$000
2017
$000
1,490
674
1,503
(833)
2,834
183
78
197
(4)
454
606
535
1,385
(1,036)
1,490
74
59
50
-
183
2,834
454
3,288
1,490
183
1,673
Provision for Employee Benefits
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 following amounts reflect leave that is not expected to be taken within the next 12 months:
Employee benefits obligation expected to be settled after 12 months
1,002
148
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 (n).
42
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
Note 24
Issued Capital
Consolidated Group
2018
$000
2017
$000
555,811,840 (June 2017: 434,877,669) fully paid ordinary shares
168,860
84,321
The company has authorised share capital amounting to 555,811,840 ordinary shares.
(a)
Ordinary Shares
At the beginning of the reporting period
Shares issued
—
—
—
—
—
—
—
—
—
6 October 2016
20 October 2016
29 May 2017
10 October 2017
3 November 2017
13 December 2017
14 December 2017
29 December 2017 *
Capital raising costs
Consolidated Group
Consolidated Group
2018
2017
$ 000's
$ 000's
2018
No.
2017
No.
84,321
65,231
434,877,669
396,301,350
-
-
-
20,001
1,000
57,056
3,889
5,000
(2,407)
18,982
644
500
-
-
-
-
-
(1,036)
-
-
-
30,304,000
1,515,152
77,102,361
5,255,901
6,756,757
-
36,504,054
1,238,932
833,333
-
-
-
-
-
-
At the end of the reporting period
168,860
84,321
555,811,840
434,877,669
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.
* 6,756,757 fully paid ordinary shares are restricted and will remain unquoted until 14 December 2018.
(b) Options
(i)
For information relating to the Experience Co 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.
(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
21
11
Consolidated Group
2018
$000
35,535
(7,171)
28,364
180,392
208,756
2017
$000
29,624
(9,490)
20,134
94,496
114,630
13.6%
17.6%
a.
Asset Revaluation Reserve
The revaluation reserve records revaluations of non-current assets. Under certain circumstances dividends can be declared from this reserve.
b.
Option Reserve
The option reserve records items recognised as expenses on valuation of employee share options.
c.
Common Control Reserve
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.
43
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
Note 25
Reserves (continued)
Below is a summary of the carrying value of assets and liabilities as at 30 June 2014 that were transferred to Experience Co 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 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
Total reserves
Note 26
Share-based Payments
$000
3,319
10,914
14,233
4,329
5,737
10,066
4,167
(8,338)
(4,171)
Consolidated Group
2018
$000
2017
$000
2,386
(1,004)
1,382
18
-
18
(4,171)
-
(4,171)
(266)
(75)
(341)
2,386
-
2,386
13
5
18
(4,171)
-
(4,171)
(101)
(165)
(266)
(3,112)
(2,033)
(i)
(ii)
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 vested 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.
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 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.
(iii)
Options granted to key management personnel have been disclosed in the remuneration report.
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 2016
Granted
Balance at 30 June 2017
Granted
Balance at 30 June 2018
44
Consolidated Group
Number
10,300,000
-
10,300,000
-
10,300,000
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
Note 26
Share-based Payments (continued)
Options exercisable as at 30 June 2018:
Options exercisable as at 30 June 2017:
Weighted average exercise price:
Weighted average life of the option:
Expected share price volatility:
Risk-free interest rate:
Consolidated Group
Number
10,300,000
7,633,332
$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 or options 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 $nil (2017: $3,891) which relates to the amortisation of options
issued.
Note 27
Cash Flow Information
Reconciliation of Cash Flows from Operating Activities with Profit after Income Tax
Profit after income tax
Non-cash flows in profit
Depreciation and amortisation
Impairment of property, plant and equipment
Unrealised foreign currency exchange gains/losses
Changes in assets and liabilities, net of the effects of purchase:
Increase in trade and other receivables
Decrease/(increase) in other current assets
Increase in inventories
(Decrease)/increase in trade and other payables
Decrease in income taxes payable
(Decrease)/increase in deferred taxes payable
Increase in provisions
Cash flows from operating activities
Consolidated Group
2018
$000
2017
$000
6,785
9,482
13,492
1,746
(77)
(950)
55
(453)
(1,623)
(2,158)
(2,957)
982
6,165
-
(265)
(242)
(1,510)
(812)
894
(1,724)
365
287
14,842
12,640
45
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
Note 28
Capital and Leasing Commitments
(a)
Finance Lease Commitments
Payable — minimum lease payments
—
—
—
not later than 12 months
between 12 months and five years
later than five years
Minimum lease payments
Less future finance charges
Present value of minimum lease payments
Consolidated Group
2018
$000
2017
$000
3,895
15,809
-
19,704
(2,436)
17,268
3,954
9,758
-
13,712
(1,516)
12,196
21
Included in finance leases are hire purchase liabilities, commercial loans and goods mortgages which are secured by a charge over the assets financed.
The leases are for 1-5 year terms and are repayable on a monthly basis.
(b)
Operating Lease Commitments
Non-cancellable operating leases contracted for but not recognised in the financial statements
Payable — minimum lease payments
—
—
—
not later than 12 months
between 12 months and five years
later than five years
Consolidated Group
2018
$000
2017
$000
832
1,011
31
1,874
1,154
1,133
230
2,517
Included in operating leases are various non-cancellable property leases with 1-20 year terms, with rent payable monthly in advance. Contingent rental
provisions within the lease agreement require that minimum lease payments shall be increased by the lower of the change in the consumer price index
(CPI) or 3-5% per annum. Options exist to renew certain leases at the end of the term for an additional 1-15 years.
(c)
Capital Expenditure Commitments
There were no capital expenditure commitments as at 30 June 2017 or 30 June 2018.
Note 29 Operating Segments
Segment information
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the board of directors in assessing performance and in
determining the allocation of resources.
The Group's financial performance is examined primarily from an activities perspective and operating segments have therefore been determined on the same basis.
The Group has identified the following reportable operational segments:
●
●
(i)
Skydive Operations
Other Adventure Experiences
The following is an analysis of the Group's revenue and results by reportable operating segment for the period under review:
Segment performance
30 June 2018
Revenue
Sales Revenue
Inter-segment sales
Total sales revenue
Other income
Total revenue
EBITDAI *
Depreciation and amortisation
Impairment
Finance costs
Net profit before tax (before shared services costs)
Unallocated items:
Shared services costs
Net profit before tax
46
Other
Adventure
Experiences
Intersegment
eliminations /
unallocated
Skydiving
$000
$000
$000
81,380
-
53,920
-
81,380
53,920
238
1,011
81,618
54,931
24,787
(6,171)
(1,746)
(894)
15,976
12,358
(6,952)
-
(11)
5,395
-
-
-
114
114
-
-
-
-
-
Total
$000
135,300
-
135,300
1,363
136,663
37,145
(13,123)
(1,746)
(905)
21,371
(11,055)
10,316
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
Note 29 Operating Segments (continued)
30 June 2017
Revenue
Sales Revenue
Inter-segment sales
Total sales revenue
Other income
Total revenue
EBITDAI
Depreciation and amortisation
Finance costs
Net profit before tax (before shared services costs)
Unallocated items:
Shared services costs
Net profit before tax
Other
Adventure
Experiences
Intersegment
eliminations /
unallocated
Skydiving
$000
$000
$000
Total
$000
78,207
-
78,207
811
11,359
-
11,359
-
79,018
11,359
27,727
(5,246)
(543)
21,938
1,709
(727)
(27)
955
-
-
-
210
210
-
-
-
-
89,566
-
89,566
1,021
90,587
29,436
(5,973)
(570)
22,893
(9,325)
13,568
Shared services costs are primarily head office costs borne by the group that are not allocated to operating segments as they are deemed costs that can
not be accurately allocated. They include head office payroll costs, sales & marketing costs, travel expenses, acquisition costs and advisory fees.
* EBITDAI 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 EBITDAI to reflect the core earnings of the consolidated entity. This figure is calculated
before shared services costs which cannot be allocated to a specific segment.
(ii)
Segment assets
30 June 2018
Segment assets
30 June 2017
Segment assets
(iii)
Segment liabilities
30 June 2018
Segment liabilities
30 June 2017
Segment liabilities
Identification of geographical segments
General Information
Other
Adventure
Experiences
Skydiving
$000
$000
Total
$000
209,019
23,413
232,432
129,716
9,864
139,580
38,302
13,738
52,040
37,966
7,118
45,084
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. The Group has identified two
geographical segments, Australia and New Zealand.
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.
47
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
Note 29 Operating Segments (continued)
(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:
(i)
Segment performance
30 June 2018
Revenue
Sales to external customers
30 June 2017
Revenue
Sales to external customers
(ii)
Non Current Segment Assets
30 June 2018
Non Current Segment assets
30 June 2017
Non Current Segment assets
Note 30
Related Party Transactions
Related Parties
(a)
The Group's main related parties are as follows:
Australia
New Zealand
$000
$000
Total
$000
106,207
29,093
135,300
62,972
26,594
89,566
Australia
New Zealand
$000
$000
Total
$000
184,149
25,721
209,870
91,889
27,631
119,520
i.
ii.
iii.
(b)
Entities exercising control over the Group:
The ultimate parent entity that exercises control over the Group is Experience Co 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.
Other Related Parties
Other related parties include entities controlled by the ultimate parent entity and entities over which key management personnel have joint control.
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
2018
$000
2017
$000
Key Management Personnel
Property lease payments and utility costs to IGMAITB Pty Ltd, as trustee for ('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 and utility costs to Mornington Waters atf Jaspers Brush Property Trust, being an entity
controlled by Anthony Boucaut (Managing Director), for the property located at Lot1, DP813335, Swamp Rd, Jaspers
Brush, NSW
Property lease payments and utility costs 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 and utility costs 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 and utility costs 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 Experience Co 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
48
453
400
76
72
306
54
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
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 advanced
Net advances/repayments
Interest charged
End of the year
1,453
362
(300)
73
1,588
1,783
64
(457)
63
1,453
Part of the loan balance above represents an unsecured loan to Boucaut Enterprises Pty Limited as trustee for Boucaut Family Trust (‘the Borrower’), a
related entity, associated with Anthony Boucaut (Executive Director). The original loan agreements $1,200,000 ("First Loan Agreement") and $840,000
("Second Loan Agreement") expire, on 28 February 2021 and 30 June 2023 respectively and as at 30 June 2018 bears interest at 5.25% (being 2% per
annum over the Reserve Bank of Australia's cash rate at that time).
Persuant to the First Loan Agreement and the Second Loan Agreement, 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. The Company has entered into a third loan agreement, with the Borrower
("Third Loan Agreement") for the sum of $450,000, of which $135,000 is outstanding at balance date, on substantly the same terms as set out above,
provided the repayment in full of that amount is required by 5 October 2018. To support this repayment obligation the Borrower had provided a direction
to the Company to deduct any outstanding amount over the Third Loan Agreement from any dividend payment the Company may make to the Borrower
and, further, timely repayment is guaranteed personally by Anthony Boucaut.
Note 31
Events After the Reporting Period
No matters or circumstances has arisen since 30 June 2018 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of
those operations, or the consolidated entity's state of affairs in future financial years.
Note 32 Contingent Liabilities and Contingent Assets
The Group has no contingent assets or contingent liabilities at 30 June 2018.
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 (Note 11)
Loans and receivables (Note 12 (c))
Other financial assets
—
at cost
— shares in other corporations (Note 15)
— unlisted investments (Note 15)
Total other financial assets
Total Financial Assets
Financial Liabilities
Financial liabilities at amortised cost
Trade and other payables
Borrowings
—
—
Total Financial Liabilities
Consolidated Group
2018
$000
2017
$000
7,171
10,188
9,490
5,493
27
1,533
1,560
38
-
38
18,919
15,021
19
21
9,630
35,535
45,165
6,596
29,624
36,220
Financial Risk Management Policies
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
instruments are credit risk, liquidity risk and market risk consisting of interest rate risk and foreign
The main risks the Group is exposed to through its financial
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.
49
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
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
Consolidated Group
2018
$000
2017
$000
7,129
9,464
42
7,171
26
9,490
b.
Liquidity risk
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 instrument liabilities. The table has been drawn up
based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be paid.
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
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
Cash and cash equivalents
Trade and other receivables
Amounts receivable from related parties
Within 1 Year
2018
2017
$000
$000
1 to 5 years
Over 5 years
2018
$000
2017
$000
2018
$000
2017
$000
Total
2018
$000
2017
$000
263
86
18,004
15,137
9,630
6,596
-
-
3,042
3,400
14,226
8,795
-
2,204
-
-
12,935
12,286
32,230
23,932
-
-
-
-
-
Within 1 Year
2018
2017
$000
$000
1 to 5 years
Over 5 years
2018
$000
2017
$000
2018
$000
2017
$000
7,171
8,085
300
9,490
4,040
300
-
-
1,288
-
-
1,153
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18,267
9,630
17,268
-
45,165
15,223
6,596
12,195
2,204
36,218
Total
2018
$000
2017
$000
7,171
8,085
1,588
9,490
4,040
1,453
16,844
14,983
(28,321)
(21,235)
Total anticipated inflows
15,556
13,830
1,288
1,153
Net (outflow) / inflow on financial instruments
2,621
1,544 (30,942)
(22,779)
50
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
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 2018 approximately 45% (2017: 48%) 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
exchange rates of 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
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 2018
+/- 2% in interest rates
+/- 2% in $A/$NZ
Year ended 30 June 2017
+/- 2% in interest rates
+/- 2% in $A/$NZ
Consolidated Group
Profit
Equity
$000
177
124
149
118
$000
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
Other financial assets:
- at cost:
- unlisted investments
Total other financial assets
Total financial assets
Financial liabilities
Trade and other payables
Vendor finance loan
Bank debt
Total financial liabilities
2018
2017
Note
Carrying
Amount
Fair Value
$000
$000
Carrying
Amount
$000
Fair Value
$000
11
12
12
12
15
19
21
21
7,171
7,171
9,490
9,490
1,588
8,600
1,588
8,600
10,188
10,188
1,560
1,560
1,560
1,560
1,453
4,040
5,493
38
38
1,453
4,040
5,493
38
38
18,919
18,919
15,021
15,021
9,630
-
18,268
9,630
-
18,268
27,898
27,898
6,596
2,204
15,224
24,024
6,596
2,204
15,224
24,024
51
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
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.
(a)
Fair value hierarchy
AASB 13: Fair Value Measurement 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.
Financial assets
Unlisted investments
Recurring fair value measurements
Non-financial assets
Aircraft
Total financial and non-financial assets recognised at fair value
(b)
Valuation techniques and inputs used to measure Level 3 fair values
Level 1
Level 2
Note
$000
$000
Level 3
$000
Total
$000
30 June 2018
15
17
-
-
-
-
-
-
1,533
1,533
61,915
63,448
61,915
63,448
Description
Financial and Non-financial assets
Unlisted investments
Aircraft
Fair Value ($) at
30 June 2018
Valuation technique(s)
Inputs used
1,533
61,915
Cost approach
Market approach using recent
observable market data for similar
assets
Unlisted investments have been valued using a
discounted cash flow model
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, with the last
revaluation being 30 June 2018. 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 3 fair values.
52
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
Note 34 Fair Value Measurements (continued)
(b)
Valuation techniques and inputs used to measure Level 3 fair values (continued)
Level 3 assets and liabilities
Movements in level 3 assets and liabilities during the current and previous financial year are set out below:
Balance at 1 July 2016
Additions
Loss recognised in profit or loss
Balance at 30 June 2017
Additions
Loss recognised in other comprehensive income
Loss recognised in profit or loss
Balance at 30 June 2018
Note 35 Company Details
The registered office and principal place of business of the company is:
Experience Co Limited
Level 1, 51 Montague Street, North Wollongong, NSW 2500
Aircraft
$000
Unlisted
investments
$000
Total
$000
31,256
14,554
(2,705)
43,105
28,322
(1,746)
(7,766)
-
-
-
-
31,256
14,554
(2,705)
43,105
1,533
29,855
-
-
(1,746)
(7,766)
61,915
1,533
63,448
53
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
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
(i)
(ii)
give a true and fair view of the financial position and performance of the consolidated entity; and
comply with Australian Accounting Standards, including the Interpretations and Corporations Regulations 2001;
(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
Dated:
Anthony Ritter
Chief Executive Officer
54
19 September 2018 INDEPENDENT AUDITOR’S REPORT
To the Members of Experience Co Limited
Opinion
We have audited the financial report of Experience Co Limited (the Company) and its subsidiaries (the Group),
which comprises the consolidated statement of financial position as at 30 June 2018, 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 2018 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.
55
Key Audit Matter
Acquisitions
Refer to Note 16 in the financial statements
During 2018 financial year the group completed
various acquisitions as follows:
• GBR Helicopters - completed on 1 November
2017 for $19,600,000
• Big Cat Green Island Cruises - completed on
13 December 2017 for $38,070,000
• Tropical Journeys
- completed on 19
December 2017 for $18,000,000
• Various other smaller acquisitions
The acquisition resulted in additions to goodwill
and other intangible assets of $40,223,000.
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
the
valuation of
determination of the fair value of the tangible
assets acquired.
intangible assets, and
include
How our audit addressed this matter
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
performed
the work
Reviewed
by
management’s experts with regard to the
valuation reports in respect of the tangible and
intangible assets identified in each of the
acquisitions having consideration of
the
requirements of ASA 500, Audit Evidence,
which establishes mandatory requirements
and provides application and explanatory
material on using the work of a management's
expert as audit evidence.
Reviewing
and
appropriateness of
statement disclosures.
evaluating
related
the
financial
the
•
•
•
•
•
•
56
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 $84,968,000.
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 2018 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 five years,
with a terminal growth rate applied to the
fifth 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 and other intangible assets 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
Evaluating
and
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 unit has been assessed and
challenged by us, and
includes an
assessment of the historical accuracy of
management’s estimates and evaluation of
business plans.
Reviewing the sensitivity analysis prepared by
management, to assess the headroom in
each cash generating unit.
financial
Assessing the adequacy of the disclosures in
the
for Goodwill
statements
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.
•
•
•
•
•
57
Revenue
Refer to Note 4 in the financial statements
The recognition of revenue and the associated
deferred revenue 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 recognise such
receipts as deferred revenue until such time as
the services are rendered. There are potential
risks in relation to the following:
•
•
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 recognised before the
services have been provided.
from
is entitled
In accordance with AASB118 Revenue,
Experience Co Group
to
recognise
variable
revenue
the probabilities
consideration, being
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
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 passenger
to various services
numbers
offered.
in relation
Selecting a sample of entries in the sales
ledger accounts and testing that the amounts
recognised are consistent with cash banked
Inspecting a sample of the monthly journals to
verify that monthly revenue is appropriately
adjusted
the
deferred revenue in respect of payments
received in advance of the services being
rendered.
into consideration
take
to
Selecting a sample of transactions of 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 recorded in the deferred revenue
balance.
Inspecting that the balances reflected in the
deferred revenue accounts were properly
reconciled to the deferred revenue reports as
per the customer booking systems.
Reviewing the actual historical breakage rates
and comparing them to the percentages used
in calculating breakage revenue on gift cards.
•
•
•
•
•
•
•
•
58
Property, Plant and Equipment
Refer to Note 17 in the financial statements
Experience Co Group currently owns aircraft
and other operating equipment with a carrying
value of $121,539,000.
Our audit procedure in relation to property, plant and
equipment included following:
Acquisition Cost
The more significant classes of property, plant
and equipment include following:
•
•
•
•
Aircraft with
$61,915,000.
Vessels with
$32,395,000.
carrying
values
of
carrying
values of
Plant and Equipment with carrying
values of $7,721,000.
The accounting in respect of the property, plant
and equipment for Experience Co Group is
complex and non-routine due to the nature of
the equipment and the judgement required in
determining useful lives, residual values, and
the valuation of the major components of the
assets.
•
•
On a sample basis, test the cost of the
acquisitions to supporting documentation and
evaluate the reasonableness of any costs
incurred to bring the item to the location and
condition necessary for it to be capable of
operating
intended by
the manner
in
management.
through
For significant assets acquired
business combinations test that the assigned
values are consistent with the independent
external valuations obtained by the Board.
For less significant assets acquired at fair value
through business combinations, assess the
reasonableness of the assigned values in
relation to other similar assets, and other
market data.
The company also completed 3 major
acquisitions in the year under review resulting
in the acquisition of $40,662,000 in tangible
assets. These are acquired at deemed fair
value which requires judgment and involves
estimation uncertainty
the
determination of acquisition fair values.
relation
to
in
In addition, aircraft were revalued in the current
year as part of the 3 year review cycle.
Residual Values
•
•
•
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 other
market data.
Asset Components
Assessing the reasonableness of the split of the
main components of the aircraft being the
engine and fuselage having consideration for
verified past practices and other industry data
and evidence.
Assessing the reasonableness of the split of the
main components of vessels between hull and
engine, agreeing to valuation reports provided
by external experts and review of independent
•
•
59
expert valuation reports having consideration of
the requirements of ASA500, Audit Evidence
and the requirements with regard to the reliance
on information to be used as audit evidence that
has been prepared using the work of a
management's expert.
Useful lives
•
•
•
•
For newly-acquired engine and
fuselage,
assessing the reasonableness of the useful
lives by comparing to similar planes and
engines in the Groups fleet.
For existing engine and fuselage, assessing
reasonableness of the useful lives by reviewing
confirmations
from external experts or
consistency with other aircraft in the fleet.
Testing the engine hours to log books and other
maintenance schedules.
Assessing the expected useful lives of the
newly acquired vessels and other operating
discussing management
equipment
expectations and where possible comparing to
operators in the industry and other externally
available market data.
by
Fair Values
•
A number of fair values were determined in the
period under review including the acquisition
fair values of significant assets acquired in
business combinations as well as the aircraft
which were revalued as at 30 June 2018.
Where valuations have been prepared by a
management's expert, we have performed the
following:
➢
Evaluate the competence, capabilities
and objectivity of that expert;
➢
Obtain an understanding of the work of
that expert; and
➢
Evaluate the appropriateness of that
expert's work as audit evidence for the
relevant assertion.
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.
60
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 2018, 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 9 to 12 of the directors' report for the year ended
30 June 2018.
In our opinion, the Remuneration Report of Experience Co Limited, for the year ended 30 June 2018, complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM Australia Partners
G N Sherwood
Partner
Sydney, 19 September 2018
61
Experience Co Limited and Controlled Entities
(formerly 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 : 19 September 2018
1.
a.
b.
c.
d.
Shareholding
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
J P Morgan Nominees Australia Limited
Citicorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
National Nominees Limited
Number
Ordinary
227
709
331
395
56
1,718
Number
Ordinary
132,083,965
102,474,364
58,356,732
49,650,281
44,177,965
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
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Boucaut Enterprises Pty Ltd
J P Morgan Nominees Australia
Citicorp Nominees Pty Ltd
HSBC Custody Nominees
National Nominees Limited
UBS Nominees Pty Ltd
Skydive The Beach Pty Ltd
Skydive Perth Pty Ltd
BNP Paribas Nominees Pty Ltd
HSBC Custody Nominees
Aust Executor Trustees Ltd
Skydive The Beach Melbourne Pty Ltd
Ms Ariane Radford
AMP Life Limited
Mirrabooka Investments Limited
BNP Paribas Noms Pty Ltd
Ms Celeste Linda Ritter
Mrs Josephine Mary Wallace
Mr James Darroch Wallace
Aust Executor Trustees Ltd
Number of Ordinary Fully
Paid Shares Held
% Held
of Issued
Ordinary Capital
132,083,965
102,474,364
58,356,732
49,650,281
44,177,965
25,180,543
23,912,660
16,338,000
11,793,813
9,041,677
7,994,712
7,482,000
6,227,940
5,712,263
5,207,269
4,876,418
3,383,970
3,040,541
3,040,540
2,058,064
522,033,717
23.76%
18.44%
10.50%
8.93%
7.95%
4.53%
4.30%
2.94%
2.12%
1.63%
1.44%
1.35%
1.12%
1.03%
0.94%
0.88%
0.61%
0.55%
0.55%
0.37%
93.92%
2.
3.
4.
The Company Secretary is Fiona Van Wyk.
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 12, 225 George Street, Sydney NSW 2000
5.
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.
6.
Unquoted Securities
6,756,757 fully paid ordinary shares are restricted and will remain unquoted until 14 December 2018.
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 Experience Co Limited employee
option plan.
62
Experience Co Limited and Controlled Entities
(formerly Skydive the Beach Group Limited)
ACN: 167 320 470
Corporate Directory
Directors:
John Diddams - Independent Non-Executive Director and Acting Chairman
Colin Hughes - Independent Non-Executive Director
Kerry (Bob) East - Independent Non-Executive Director (appointed 30 April 2018)
Anthony Boucaut - Executive Director and Managing Director
Anthony Ritter - Executive Director and Chief Executive Officer
Company Secretary:
Fiona Van Wyk (appointed 10 September 2018)
Anthony Ritter and John Diddams (resigned 10 September 2018)
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
Level 22, 255 George Street Sydney NSW 2000
Westpac Banking Corporation
Level 1, 25 Atchison Street, Wollongong NSW 2500
Stock Exchange Listing Code:
EXP
Website:
www.experienceco.com
63