2019
ANNUAL REPORT
EXPERIENCECO.COM
1
EXPERIENCE CO LIMITED
ABOUT US
Experience Co (previously known as
Skydive the Beach Group Limited) was
listed on the ASX in March 2015.
Founded in 1999 Wollongong, Australia the
Group has grown to a diversified adventure
tourism business, that includes skydiving,
diving and snorkeling, white water rafting,
hot air ballooning and helicopter tours.
The Group’s operations are located
primarily on Australia’s eastern seaboard
from the Great Ocean Road to Tropical
North Queensland’s Port Douglas and New
Zealand operations are conducted in the
world-renowned Queenstown region on the
South Island.
At the core of our business is delivering
awesome experiences to our customers
every day of the year. Experience Co is well
positioned in one of the fastest growing
adventure tourism markets, with exposure
to both domestic and international markets.
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EXPERIENCE CO LIMITED
CONTENTS
About Us
Chairman and CEO Address
Information on Directors
Director's Report
Remuneration Report
Auditor’s Independence Declaration
Annual Financial Report
Independent Auditor’s Report
Additional Information for Listed Public Companies
Corporate Directory
2
4
6
9
22
37
38
102
108
110
3
EXPERIENCE CO LIMITED
CHAIRMAN AND CEO
ADDRESS
On behalf of the Experience Co Limited Board we
are pleased to present the 2019 Experience Co
Limited Annual Report for the year ended 30 June
2019
FY19 was a challenging year with results falling short
of expectations primarily as a result of weaker
tourism
the Far North
Queensland region. This was as a result of a decline
in airport arrivals, prolonged poor weather, and a
decrease in Great Barrier Reef visitation ex-Cairns.
trading conditions
in
Adventure
Experiences
The
operations,
predominately based in Cairns, were significantly
impacted by the softer market conditions and slower
than anticipated integration. This resulted in these
businesses not achieving expectations anticipated
at the time of the respective acquisitions.
The Group has commenced a strategic review of its
portfolio of assets and operations. This will take into
consideration the medium and long term growth
prospects for each of our operating businesses,
brands and key markets.
FY19 financial performance
Despite these challenges, the Group reported an
Underlying EBITDA of $27.2 million, and robust
operating cash flow conversion.
On a statutory basis, the Group reported a net loss of
$48.3 million driven by $62.5 million of non-cash
impairments in the Adventure Experiences segment.
As announced in August 2019, no dividend was
declared for FY19 allowing the business to focus on
capital management providing ongoing balance
sheet optionality and flexibility, in the short term.
This Annual Report also contains the Directors’
Report and audited financial statements, which
details the Group’s operations and financial results
across each of our business segments.
Our markets
The global adventure tourism market continues to
grow. In Australia, this trend continues to evolve in
each period, with consumer preferences, weather
conditions as well as domestic and international
tourism trends remaining key variables for our
businesses.
Testament to the quality of our product offering that
has been developed over 20 years of operations, we
have established market
in
Australia and New Zealand.
leading positions
Despite the weaker than anticipated performance in
our Far North Queensland skydiving operations,
skydiving performed reasonably well in FY19 with
over 192,000 tandem jumps in Australia and New
Zealand.
Adventure Experiences comprise a number of brands
and operations, predominately located in the Cairns
region in the Australian wet tropics.
This market has historically been a cyclical market,
influenced by aviation markets, weather conditions
and international tourism trends. Following strong
market conditions from FY16 to FY18, FY19 saw a
pronounced decline in airport arrivals which was
compounded by poor weather in late 2018 and early
2019. These softer conditions have continued into
FY20 and a key element of the strategic review will
be to consider the medium to long term growth
prospects of this market.
The way in which our customers, both direct and
agents, interact with us continues to change at a
rapid pace. To meet expectations, during the period
in our websites and booking
we have
engines, onboarded a number of new payment
options and increased the channels and media used
to communicate and share content.
invested
Safety, Environment and Community
The health and safety of our employees, customers
and suppliers are our highest priority in conducting
our business each day. We will continue to be
unwavering in our commitment to safety.
As an outdoor adventure company, we are acutely
aware of the environments in which we operate,
including the Great Barrier Reef which is one of the
world’s most precious ecological assets. Working
with regulators and key stakeholders is essential in
the operation of our business activities and we are
extremely proud of our reef education and marine
biology activities.
A highlight during the year was the launch of the
Company’s Dreamtime Dive & Snorkel adventure
experiences in Far North Queensland in November
2018. This is the Great Barrier Reef’s only indigenous
rangers
on water experience. Our
combine historical story telling with snorkeling and
diving. This initiative provides tourists with a unique
opportunity
indigenous cultural
experiences in Australia while exploring one of the
seven wonders of the world.
to engage
indigenous
in
Australian and New Zealand tandem skydiving
markets continue to be strong, cash generative
operating models.
We are delighted to be part of this initiative, and
importantly the opportunity to invest in Australia’s
indigenous culture and people providing ongoing
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EXPERIENCE CO LIMITED
employment opportunities as well as
training
programs to develop relevant industry skills for the
indigenous community in the region now and into the
future.
Our people
The year was a period of transition in the Board and
management. This commenced with the appointment
of the Chair in October 2018, and a transition in the
management leadership team in the second half of
the year.
in July 2019.
The Board welcomed the leadership appointments
made in 2H19, with the most recent appointment of
The senior
CEO, John O’Sullivan
management team led by John O’Sullivan places the
business in the best position to successfully execute
the Group’s future strategies. With this executive
now in place, our founder Anthony Boucaut has
role.
transitioned
Anthony is a genuine pioneer of the global skydiving
industry and we look forward to working with him in
this capacity.
to a Non-Executive Director
In its ongoing commitment to improved performance
and capability, the Board will continue to review its
composition, skills and expertise and that of
management to ensure the business delivers on its
key objectives and strategic direction.
Strategy and outlook
The Group operates in one of the fastest growing
tourism sectors in Australia and globally and our
customers are more than ever looking at unique
adventure experiences.
With this backdrop, the strategic review will examine
options and initiatives to address the recent share
price underperformance.
An update will be provided at the company’s Annual
General Meeting in November 2019.
thank our customers,
We
stakeholders for their ongoing support during FY19.
investors and all
finally, we
thank and acknowledge
And
the
contributions of the Board, Management and all
employees during the year and we look forward to
the year ahead.
Kerry Robert (Bob) East
Chairman
John O’Sullivan
Chief Executive Officer
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EXPERIENCE CO LIMITED
INFORMATION ON DIRECTORS
The following information is current as at the date of this report
KERRY (BOB) EAST
Independent Non-Executive Director (Chair of Board)
JOHN DIDDAMS
Independent Non-Executive Director (Deputy Chair)
Appointed as Non-Executive Director on 30 April 2018
Appointed as Non-Executive Director on
Appointed Chair of the Board on 26 October 2018
19 December 2013
In February 2019, following the resignation of Anthony
Ritter, Bob East assumed the role of Executive
Chairman until CEO John O’Sullivan joined the Group on
29 July 2019
Chair – Remuneration & Nomination Committee
Member – Audit & Risk Committee
Held the role of Acting Chair of the Board from
30 April 2018 until Bob East was appointed Chair on
26 October 2018
Chair – Audit & Risk Committee
Member – Remuneration & Nomination Committee
for
responsible
Bob has extensive leadership experience and more
than 25 years’ experience
in the tourism and
hospitality industries. Prior to joining Experience Co,
Bob was CEO of Mantra Group (ASX 200) where he
was
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. Bob was instrumental in and lead the
listing of the Mantra Group on the ASX in 2014 and in
May 2018 the
in
Australia – the acquisition of the Mantra Group by
Accor Hotels. Bob holds Non-Executive Director
roles in Gold Coast Football Club Ltd, Sydney Metro,
Tourism Australia (Chair) and Australia Venue
Company Pty Ltd (Chair).
largest hospitality transaction
John has over 30 years of financial and management
experience having held roles as CFO, CEO and
director of both private and public listed companies.
John is the principal of a CPA firm providing
corporate advisory services, including management
of equity raisings, due diligence processes and IPO’s,
to SME and mid-cap companies.
John holds a Bachelor of Commerce and is a Fellow
Member of both CPA Australia and the Australian
Institute of Company Directors.
Listed Company Directorships in last 3 years
Non-Executive Director – Volpara Health
Technologies Limited (ASX: VHT)
Non-Executive Director – Olivers Real Food Limited
(ASX: OLI) resigned 28 February 2019
Bob holds an MBA and is a Member of the Australian
Institute of Company Directors.
Listed Company Directorships in last 3 years
CEO and Executive Director - Mantra Group Limited
(ASX:MTR) resigned 31 May 2018
Interests in Shares (direct and indirect)
2,440,545 Fully Paid Ordinary Shares
1,500,000 Options over Ordinary Shares
354,467 Service Rights over Ordinary Shares
Interests in Shares
700,000 ordinary shares
1,059,272 Service Rights over Ordinary Shares
6
EXPERIENCE CO LIMITED
INFORMATION ON DIRECTORS (CONTINUED)
COLIN HUGHES
Independent Non-Executive Director appointed on
ANTHONY BOUCAUT
Appointed Non-Executive Director on
9 June 2016
2 September 2019
Member – Audit & Risk Committee and Remuneration
& Nomination Committee
Prior to transitioning to Non-Executive Director -
Managing Director appointed on 19 December
2013
Background
Colin has more than 40 years’ experience having held
senior executive roles across 4 international carriers
(including Cathay Pacific and QANTAS), International
Hotel Chain, and State and National Tourism
Organisations.
Previously Colin held Non-Executive Director roles at
Business Events Sydney (Chair), Motel Federation
Australia, Accommodation Association of Australia
(AAoA), Centrecom Call Centre Group and was a
member of Airline Advisory Group Aviation Online.
Colin is an advisory board member of CAPA aviation
and is a member of the Australian Institute of
Company Directors.
Listed Company Directorships in last 3 years
None
Interests in Shares
162,104 Service Rights over Ordinary Shares
Background
Anthony has over 20 years' experience in the
skydiving industry and over 25 years' experience
in the aviation industry. The Skydive the Beach
concept and vision was the result of Anthony's
passion for skydiving and love of sharing extreme
adventures with others. During his final year of
university, Anthony formed a business known as
Adrenalin Sports Skydiving, which became
Skydive the Beach, now known as Experience Co.
The first tandem skydives over North Wollongong
beach were conducted in July 1999.
Anthony holds a Bachelor of Science and is a
Member of Australia Parachute Federation and
the Australian Institute of Company Directors.
Listed Company Directorships in last 3 years
None
Interests in Shares (direct and indirect)
180,348,044 Fully Paid Ordinary Shares
3,000,000 Options over Ordinary Shares
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EXPERIENCE CO LIMITED
INFORMATION ON DIRECTORS (CONTINUED)
JOHN ‘OSULLIVAN
Executive Director – Chief Executive Officer
appointed on 29 July 2019
Background
John has over 25 years’ experience in the tourism
and related industries sector, having held senior
executive roles with Football Federation Australia
(Chief Commercial Officer), Events Queensland
(Chief Executive Officer), Fox Sports (Chief
Operating Officer) and for the last 5 years Managing
Director of Tourism Australia where he managed a
team of more than 200 staff in 13 locations,
including China, London and Germany, and led the
restructure of teams and people to improve
performance and to place increased investment
where required to achieve the best results.
John has extensive leadership capabilities and
experience in sales and marketing, event
management and digital technology on a local and
global stage.
John holds an Executive MBA and is a graduate
member of the Australian Institute of Company
Directors.
Listed Company Directorships in last 3 years
None
Interests in Shares
NIL
8
EXPERIENCE CO LIMITED
DIRECTOR’S REPORT
9
EXPERIENCE CO LIMITED
The Directors present their report on the Group (referred to herein as the Group) consisting of
Experience Co Limited and its controlled entities for the financial year ended 30 June 2019.
GENERAL INFORMATION
DIRECTORS
The following persons were directors of the Company during or since the end of the financial year
up to the date of this report:
DIRECTOR
OFFICE HELD
Kerry (Bob) East 1
Chair of Board (Non-Executive)
John Diddams
Deputy Chair (Non-Executive)
Colin Hughes
Director (Non-Executive)
Anthony Boucaut2
Director (Non-Executive)
John O’Sullivan3
Chief Executive Officer
Anthony Ritter4
Chief Executive Officer
1 Bob East was appointed as a Non-Executive Director on 30 April 2018. On 26 October 2018
he was appointed Chair of Board. Following Anthony Ritter’s resignation, Bob East assumed
the role of Executive Chair on 13 February 2019 until new CEO John O’Sullivan joined the Group
on 29 July 2019.
2 Anthony Boucaut transitioned to Non-Executive Director on 2 September 2019.
3 John O’Sullivan appointed on 29 July 2019.
4 Anthony Ritter resigned on 13 February 2019.
Details of each Director’s experience and qualifications are set out on pages 6 to 8 of the director
information report.
MEETINGS OF DIRECTORS
The number of Board meetings held (including Board Committee meetings) and the number of
meetings attended by each of the Directors of the Company, during the financial year are listed
below:
DIRECTOR
DIRECTORS
MEETINGS
Bob East
John Diddams
Colin Hughes
Anthony Boucaut
Anthony Ritter
A
20
20
20
20
13
B
20
20
20
20
14
AUDIT & RISK
COMMITTEE
MEETINGS
REMUNERATION &
NOMINATION
COMMITTEE
MEETINGS
A
3
3
3
NA
NA
B
3
3
3
NA
NA
A
3
3
3
NA
NA
B
3
3
3
NA
NA
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EXPERIENCE CO LIMITED
Anthony Ritter resigned on 13 February 2019
John O’Sullivan appointed on 29 July 2019
A:
B:
NA:
Number of meetings attended
Number of meetings held during the time the Director held office or was a member of the
Committee
Not a member of the relevant Committee
COMPANY SECRETARY
Fiona van Wyk was appointed Company Secretary on 10 September 2018 at which time John
Diddams and Anthony Ritter resigned as joint Company Secretaries. Fiona has over 20 years’
experience as a Company Secretary, most recently as company secretary of the Mantra Group
from August 2007 to May 2018. Fiona is a member of the Governance Institute of Australia and
the Australian Institute of Company Directors.
PRINCIPAL ACTIVITIES
The Group is a leading provider of adventure tourism and leisure experiences in key tourist
destinations in Australia and New Zealand which include tandem skydiving, Great Barrier Reef
snorkeling, helicopter and diving tours and experiences and hot air ballooning.
OPERATING ACTIVITIES
BUSINESS SEGMENT
SKYDIVING
ADVENTURE
EXPERIENCES
Operating location
Australia
New Zealand
Far North Queensland 1
Various adventure
experiences with a
prominence in Far North
Queensland (Cairns and
Port Douglas) Great
Barrier Reef based
experiences, from
snorkel and diving to
scenic helicopter flights
Other activities include
white water rafting, hot
air ballooning, Daintree
Rainforest tours and
canyoning
Customer base varies by
activity
Business overview
Tandem and solo
skydiving experiences
Tandem and solo
skydiving experiences
16 drop zones primarily
on the Eastern seaboard
of Australia
3 drop zones in the
Queenstown region of
New Zealand’s South
Island
Drop zone network
provides a diversified
geographic and
customer base
Primarily international
tourist customer base,
consistent with
Queenstown’s status as
a premier adventure
tourism hub
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EXPERIENCE CO LIMITED
BUSINESS SEGMENT
SKYDIVING
ADVENTURE
EXPERIENCES
Prominent Brands
Skydive Australia
Nzone Skydive
Reef Magic Cruises
Skydive the Beach
Skydive Wanaka
Big Cat Green Island Reef
Cruise
Skydive Southern Alps
Fitzroy Island Adventures
Dreamtime Dive &
Snorkel
Calypso Snorkel & Dive
Raging Thunder
Adventures
Cairns Hot Air Ballooning
Byron Bay Ballooning
Hunter Valley Ballooning
Great Barrier Reef
Helicopters
1 Predominately Far North Queensland, but also includes hot air ballooning operations in Byron Bay and the
Hunter Valley in NSW.
The Group has a team of over 1,000 employees and contractors to carry out Group activities.
COMMENTARY ON THE RESULTS
The Group reported a loss after income tax of $48.3 million (30 June 2018: profit $6.8 million). The loss
after income tax is substantially due to non-cash impairments ($62.5 million) and significant items ($7.9
million) which are discussed in the section titled Reconciliation of net profit after tax to non-Australian
Accounting Standard measures, below.
Underlying operating cash conversion improved on the prior year, reflecting the robust operating cash
generation of the business.
The impairment charge of $62.5 million was primarily the impairment of goodwill and other intangibles,
and other assets in the Adventure Experiences segment. The impairment of goodwill and other
intangibles is attributable to lower than anticipated benefits from integration of acquired businesses
and softer tourism trading conditions in the Tropical North Queensland region, which has contributed to
adverse impacts on projected cashflows.
Presented below is a summary of historical and current operating statistics and financial performance
information, including a comparison of actual results for the period ended 30 June 2019 against the
same period last year.
12
EXPERIENCE CO LIMITED
COMMENTARY ON THE RESULTS (CONTINUED)
CURRENCY: AUSTRALIAN DOLLARS
UNIT
JUN-19
JUN-18
Financial performance metrics
Sales revenue
EBITDA1
Net (loss)/profit before income taxes
Net (loss)/profit after income taxes
Underlying EBITDA2
Underlying EBITA3
Underlying operating cash flow4
Underlying operating cash flow conversion5
Operating metrics
Skydiving revenue6
Skydiving tandem jumps
Average revenue per tandem jump
Skydiving Underlying EBITDA margin7
Skydiving Underlying EBITA margin
Adventure Experiences revenue
Adventure Experiences Underlying EBITDA margin
Adventure Experiences Underlying EBITA margin
Capital metrics
Net debt
Gearing ratio8
Net debt to Underlying EBITDA
Net assets per share
Net tangible assets per share
NOTES
$million
$million
$million
$million
$million
$million
$million
161.3
19.3
(58.8)
(48.3)
27.2
16.6
27.2
135.3
27.4
10.3
6.8
30.2
19.8
25.8
%
100.2%
85.5%
$million
000s
$
%
%
$million
%
%
80.8
192.2
420
31.0%
25.8%
76.8
16.2%
8.3%
$million
%
29.5
20.7%
multiple
1.1
cents
cents
23.8
16.7
78.4
189.8
413
32.4%
25.4%
53.9
27.3%
19.5%
28.4
19.7%
0.9
32.5
17.2
1 Earnings before interest, tax, impairment, depreciation and amortization
2 EBITDA adjusted for significant items being specific non-cash or one-off items.
3 Underlying EBITA is Underlying EBITDA less depreciation and software amortisation.
4 Underlying operating cash flow is defined as operating cash flow before finance costs, income
taxes and significant items
5 Underlying operating cash flow divided by Underlying EBITDA
6 Skydiving revenue is based on the Sales revenue reported for the Skydiving segment, excluding
other sales (being sales not associated with skydiving jump activities)
7 Calculated based on Underlying EBITDA for the Skydiving segment divided by Skydiving revenue
(see Note 6 above)
8 Gearing ratio is net debt (gross borrowings less cash equivalents) as a % of total tangible assets
13
EXPERIENCE CO LIMITED
COMMENTARY ON THE RESULTS (CONTINUED)
GROUP FINANCIAL PERFORMANCE
Underlying EBITDA $27.2 million (30 June 2018: $30.1 million). The Group reported an increase in revenue
of 19% to $161.3 million, driven by the full year contribution from FY18 acquisitions, however challenges
experienced in these acquisitions arising from softer tourism trading conditions in the FNQ market saw
EBITDA impacted, a reflection of the fixed cost leverage in the businesses acquired.
Our core skydiving business performed reasonably well across Australia and New Zealand. However,
overall, FY19 was a challenging year for the Group. Our results were below initial guidance expectations,
principally attributable to the performance of the acquisitions in our Adventure Experiences segment
leading up to FY18 which have encountered adverse trading conditions, including:
Softer tourism conditions in Far North Queensland (‘FNQ’);
Prolonged poor weather, including record rainfalls; and
Slower than anticipated integration.
The Group has commenced a strategic review of the business, with a renewed focus on core activities,
simplifying the business and improving return on capital.
Skydiving
The Group continues to have a market leading position in Australia and New Zealand tandem skydiving
markets. FY18 saw the first fatalities in the Australian tandem skydiving industry in over 30 years.
Tandem jump volume, the key driver of Skydiving segment profitability, increased by 1.3% to 192,179 (30
June 2018: 189,784), with 131,915 tandem jumps in Australia (30 June 2018: 132,293) and 60,264 in New
Zealand (30 June 2018: 57,491). The Australian tandem jump volume decrease of 0.3% was principally
driven by the three Far North Queensland dropzones which represented 27.5% of FY19 Australian jump
volume, down by 12.9% on FY18. Excluding these Far North Queensland dropzones, the Australia volume
was up 5.5% on FY18, with strong year on year performance for key metropolitan drop zones.
In New Zealand, the growth was driven by the NZone operation in Queenstown, which experienced
favourable weather conditions and a stronger performance over the Chinese New Year period
compared to the prior year.
Adventure Experiences
The Adventure Experiences segment is primarily a Cairns, Far North Queensland based operation
located in the Australian wet tropics. The region experienced softer trading conditions in FY19,
demonstrated by a decrease in Cairns airport arrivals (particularly pronounced from September 2018
onwards), combined with record rainfalls in the region, with continued poor weather into 2H19.
FY19 was on the back of significant acquisition activity in the Adventure Experiences business in FY17
and FY18, and as a result the downturn in market conditions (relative to the trading highs of FY16 and
FY17) and slower than anticipated integration has had a material impact on Group earnings.
Great Barrier Reef visitation volume, ex-Cairns marina was down 8% on FY18. While at a portfolio level
our brands increased market share in terms of volume, it included a shift to lower yielding products.
Great Barrier Reef Helicopters had a challenging year, which included the loss of a key tourism customer
contract from 1 April 2019 which led to a rebalance to commercial work, including an investment in
additional helicopters and associated ancillary plant & equipment. FY19 also saw capital investment in
the helicopter fleet driven by time life component and overhaul requirements. Capital intensity and
asset management specialisation continue to be defining features of the Great Barrier Reef Helicopter
business and we are considering the strategic position of this business in the Group’s portfolio.
14
EXPERIENCE CO LIMITED
COMMENTARY ON THE RESULTS (CONTINUED)
The full year contribution of FY18 acquisitions, being Great Barrier Reef Helicopters, Big Cat Green Island
and Tropical Journeys (Calypso and Daintree Tours) was offset by the impact of the deterioration in
tourism trading conditions in the region in FY19.
CORPORATE
FY19 saw a transition in the Board and Management team. This included the appointment of Bob East as
Chairman in October 2018 with a number of key management leadership changes effected in 2H19, with
the recent appointment of CEO, John O’Sullivan and CFO, Owen Kemp and GM Corporate Development,
Ian Douglas earlier in the half.
CAPITAL MANAGEMENT
Due to the lower than anticipated earnings and cashflows in the period and considering the net debt
position of the Group at 30 June 2019 and trading momentum into the first quarter of FY20, the Directors
have decided that no dividend will be paid in relation to FY19. It is the Directors’ view that this is a
prudent measure in the short term and will facilitate balance sheet flexibility to retain optionality
through the strategic review process outlined below.
During the period the Group has continued to work closely with its incumbent lender, NAB, and has
extended the maturity of its corporate debt facilities by six months to October 2020. The Group remains
compliant with the debt covenants under the Multi Option Finance Facility, and is relatively lowly geared
with a net debt to Underlying EBITDA ratio of 1.1x
OUTLOOK AND STRATEGY
The Group has commenced a strategic review of the Group’s portfolio of assets and operations.
The strategic review will examine options and initiatives to address recent share price
underperformance. This will take into consideration the medium and long term growth prospects for
each of the Group’s operating businesses, brands and geographies.
The Group will keep shareholders informed of any relevant developments arising from the strategic
review and will provide an update at the company’s Annual General Meeting in November 2019.
15
EXPERIENCE CO LIMITED
RECONCILIATION OF NET PROFIT AFTER TAX TO NON-AAS MEASURES
NET PROFIT AFTER TAX
Depreciation and amortisation
Finance costs (net of interest revenue)
Income tax expense / (benefit)
Impairment of goodwill and other intangibles
Impairment of property, plant & equipment and other assets
Earnings before interest, taxes, depreciation, amortisation
(EBITDA)
Non-cash items:
Acquisition and consolidation adjustments
Onerous leases
Other asset write down
Share based payments
One-off items
Significant items subtotal
Underlying EBITDA1
Depreciation and software amortisation
Underlying EBITA2
30 June
2019
$’000
(48,257)
13,950
1,613
(10,575)
52,570
9,964
30 June
2018
$’000
6,785
13,492
1,722
3,531
-
1,746
19,265
27,411
4,776
833
569
233
1,507
7,918
-
-
-
-
2,761
2,761
27,183
30,172
(10,560)
(10,328)
16,623
19,844
NOTES
1 EBITDA adjusted for significant items being specific non-cash or one-off items.
2 Underlying EBITA is Underlying EBITDA less depreciation and software amortisation.
IMPAIRMENT OF GOODWILL AND OTHER INTANGIBLES
The impairment is attributable to lower than anticipated benefits from integration and softer tourism
trading conditions in the Tropical North Queensland region which has contributed to adverse impacts on
projected cashflows. The Group notes that as at the date of the calculations it has commenced a
strategic review of the Adventure Experiences segment that may lead to changes in the projected cash
flows but as no formal plans had been implemented and/or sufficiently progressed any initiatives to
improve future cash flows were not factored into the recoverable amount calculations.
IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT, AND OTHER ASSETS
Consists of assessment of specific assets with indicators of impairment (principally relating to the
Adventure Experiences segment) and the impact of the AASB 116 which requires fair value movements
for those asset classes carried at fair value (aircraft and helicopters) to be recognised on an individual
asset basis.
Fixed wing and rotary impairments of $5.4 million were recognised in Reported EBITDA, with $4.7 million
revaluation increment recognised below the line in other comprehensive income (i.e. a net impairment in
carrying value of $0.7 million).
The impairment charges recognised are non-cash in nature and have no impact on the Group’s
compliance with banking facility covenants.
16
EXPERIENCE CO LIMITED
RECONCILIATION OF NET PROFIT AFTER TAX TO NON-AAS MEASURES
(CONTINUED)
SIGNIFICANT ITEMS
Significant items in the financial year ending 30 June 2019 of $7.9 million comprised a number of one-off
items, predominately non-cash in nature. The non-cash significant items, totaling $6.4 million included:
Acquisitions and consolidation adjustments from prior years relating to the reconciliation of balance
sheet items, including the results of 30 June 2019 reconciliation review of assets and liabilities for
$4.8m
Initial recognition of provision in relation to onerous operating leases
Asset write-downs relate to an assessment of capitalised development costs
Share-based payments – non-cash recognition of share options expense
Other one-off items are those significant items that are non-recurring in nature and largely related to
the integration of acquisitions made in the 30 June 2018 financial year and the management transition
that occurred during the financial year. These one-off items included $0.7 million restructuring and
recruitment costs, $0.4 million legal & advisory costs for significant one-off projects and $0.4 million of
other one-off items.
Significant items in FY18 ($2.8 million) principally related to business acquisition due diligence and
advisory fees, rebranding project costs and office renovation expenses.
EBITDA and EBITA are financial measures which are not prescribed by Australian Accounting Standards
(“AAS”). EBITDA represents the profit under AAS adjusted for interest, income taxes, impairment,
depreciation and amortisation. The Directors consider EBITDA to reflect the operational earnings of the
Group. EBITA represents EBITDA less depreciation and software amortisation.
Underlying EBITDA and Underlying EBITA are financial measures not prescribed by AAS and represent
respectively the EBITDA and EBITA (as set out above) adjusted for significant items.
EVENTS AFTER THE END OF THE PERIOD
No matter or event has arisen since 30 June 2019 that has significantly affected the Group’s operations,
results or state of affairs.
OUTLOOK
FY20 has started with the leadership team, led by the new CEO, commencing a strategic review of the
business with a renewed focus on the core business, organic growth, driving improved operational and
revenue performance and achieving efficiencies in corporate support functions aimed at capitalising on
the ongoing growth in the overall tourism sector in our region and delivering shareholder value in FY20
and beyond.
17
EXPERIENCE CO LIMITED
DIVIDENDS
Dividends paid or declared for payment during the financial year are as follows:
On 28 September 2018, a fully franked dividend of $0.01 cent per share was paid out of retained
profits at 30 June 2018, amounting to $5,558,118.
A dividend for FY19 has not been declared with the Group adopting a prudent approach to capital
management to maintain balance sheet optionality in the short term.
OPTIONS & RIGHTS
Unissued ordinary shares of Experience Co Limited in respect of options or rights at the date of this
report are as follows:
SECURITY TYPE
GRANT DATE
EXERCISE
PRICE $
VESTING
DATE
Options over
shares
5 March 2015
0.25
Refer below1
EXPIRY
DATE
9 February
2025
NO OF RIGHTS
10,300,000
1 Options have vested
SECURITY TYPE
GRANT DATE
EXERCISE
PRICE $
VESTING
DATE
EXPIRY DATE
NO OF RIGHTS
Service Rights
over Shares
30 November
2018
nil
Service Rights
over Shares
Performance
Rights over
Shares
4 March 2019
nil
4 March 2019
nil
Refer
below1
4 March
2020
4 March
2020
Refer below1
1,120,029
31 March 2020 540,540
31 March 2020 360,360
1 Vesting is in three equal annual instalments commencing on 30 November 2019 and ending on 30
November 2021, with an expiry date 30 days after each vesting date.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
There no significant changes in the state of affairs of the Group in the period.
18
EXPERIENCE CO LIMITED
KEY RISKS
There are various risks that could impact the business and the nature and impact of these change over
time.
Key risks identified have been categorised into four categories being Operational, Commercial, Strategic
and Compliance. The key risks and responses are outlined below:
Risk Category
Responses
Operational
Safety of customers,
employees and suppliers
Condition and standard of
property, plant and
equipment
Operating footprint for key
operational activities
(operational sites, office
locations and retail
premises)
Commercial
Efficient financial
management, systems and
reporting
Ongoing compliance and training
Safety audits
Maintenance of equipment
Investment (capital and operational spend) in and management
of equipment maintenance and rejuvenation programs
Maintain adequate insurances
Manage renewal terms of key facilities agreements and
relationships with key industry suppliers
Monitor ongoing development approvals, infrastructure, policies
and changes to legislation
Develop contingency
Assessment of office locations across the business
Implement, maintain and manage adequate financial reporting
systems and processes
Keep up with technology in
rapidly changing
environment
Ensure IT environment and resourcing is appropriate for the
business and addresses the challenges of rapidly changing
trends and consumer behavior
Strategic
Ability to recruit and retain
key employees and
contractors
Monitor employment and contractor demand and supply trends
Assessment of key roles, including contingency, succession and
retention strategies
Growth and capital
management
Manage growth strategy including key criteria for investment
(organic and acquisition), and return on invested capital
Maintain relationships with financiers and investors
Implement appropriate capital structure
Slower than anticipated
market conditions in key
operating areas
Monitor market trends impacting the business or sectors of the
business
Implement strategies for flexibility to meet emerging market
demand conditions
19
EXPERIENCE CO LIMITED
Impact of the environment
on key tourist destinations
including the Great Barrier
Reef
Carry out activities in compliance with environmental permits and
regulations
Commitment to best practice operations to protect the Great
Barrier Reef and the environment as a whole, including
investment in reef and marine biology education to enhance
customer awareness and experience
Compliance
Risk of non-compliance with
laws and regulations
Manage within all relevant laws that govern all aspects of the
business and manage ongoing compliance
ENVIRONMENTAL
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. Compliance with existing
environmental regulations and new regulations are monitored annually. The Group continues to support
best practice operations with a focus on protection of the Great Barrier Reef and the environment as a
whole. This process includes procedures to be followed should an incident adversely impact the
environment. The directors are not aware of any material 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 30
September 2019 can be found on the Company’s website (www.experienceco.com).
INSURANCE OF OFFICERS & AUDITOR (AND AUDITOR INDEMNITY)
OFFICERS
The Company insures 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
as directors of the company, other than conduct involving a willful breach of duty in relation to the
Company. The premium payable for 2019, including statutory charges, is $249,397 (2018: $198,782) and
the Company has elected to pay this premium by instalments.
AUDITOR
The company has not, during or since the end of the financial year, indemnified or agreed to indemnify
the auditor of the company or any related entity against a liability incurred by the auditor. During the
financial year, the company has not paid a premium in respect of a contract to insure the auditor of the
company or any related entity
20
EXPERIENCE CO LIMITED
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:
-
-
The nature of the non-audit services provided do not materially 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 2019:
Taxation services
Other services
$
96,752
4,000
100,752
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 30 June 2019 has been received and
can be found on page 37 of the annual report.
ROUNDING OF AMOUNTS
The Company is of a kind referred to in Corporations Instruments 2016/191 issued by ASIC, relating to
(Rounding Off). Amounts in this report have been rounded off in accordance with that Corporations
Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
This Directors’ Report, incorporating the Remuneration Report, is signed in accordance with a resolution
of the Board of Directors.
______________________________
Kerry Robert (Bob) East
Chairman
Date: 30 September 2019
21
EXPERIENCE CO LIMITED
22
EXPERIENCE CO LIMITED
REMUNERATION REPORT
Dear Shareholder
On behalf of the Board, I am pleased to present the Experience Co Limited (EXP) FY19 Remuneration
Report.
Due to softer than anticipated trading performance in FY19, factors of which are referred to in the
directors’ report, FY19 KPI targets were not met and therefore no short-term incentives for FY19 were
awarded to Senior Executives including the KMP.
During FY19, the Board approved:
Implementation of a revised short-term incentive plan (STI) to provide Senior Executives with a
requirement that 30% of any STI award be in the form of Deferred Service Rights which convert to
ordinary shares following a further service requirement.
Grant of Service Rights to Non-Executive Directors (NEDs) facilitated by each NED sacrificing
Director fees in consideration for the grant of NED Service Rights, as a mechanism for NEDs to
increase their equity in the Company in order to better align their interests with those of
shareholders.
Grant of Service Rights to the Executive Chair in lieu of fixed remuneration for his additional
executive role while the search for a replacement Chief Executive Officer (CEO) took place.
A one-off grant of Performance Rights to the Chief Financial Officer (CFO) subject to performance
metrics, for additional contribution required, following the resignation of the Chief Executive Officer.
A new long-term incentive plan (LTI) to commence in FY20 for executive KMP.
At the 2019 Annual General Meeting, approval of the following will be sought:
The grant of Service Rights to the new CEO appointed in July 2019, in accordance with the terms of
his appointment.
The grant of Performance Rights to the CEO subject to long-term performance based vesting
conditions;
Details of the grants will be included in the Notice of Annual General Meeting.
Yours faithfully
Kerry Robert (Bob) East
Chairman
Nomination and Remuneration Committee
REMUNEEPORT
23
EXPERIENCE CO LIMITED
This Remuneration Report forms part of the Directors’ Report for the year ended 30 June 2019 and has
been audited in accordance with the Corporations Act 2001.
The report includes the following:
Remuneration policy and governance
Key Management Personnel
Remuneration framework
Remuneration outcomes for FY19
KMP remuneration schedules
Summary of KMP employment conditions
Key Changes to Remuneration for Financial Year 2020
Non-Executive Director remuneration
KMP Shareholdings
Transactions with related parties
REMUNERATION POLICY AND GOVERNANCE
The Remuneration and Nomination Committee reviews Senior Executive remuneration packages
annually with reference to the Group’s financial performance, the performance of the individual Senior
Executive and relevant comparable industry information. The Committee met 3 times during the year.
Members of the Committee during FY19 were:
Bob East (Chair) (Appointed August 2018)
John Diddams
Colin Hughes
The remuneration policy aims to ensure that the remuneration structures:
Are aligned to the business needs, goals and objectives
Are competitive and reasonable
Promotes long term sustainable growth in shareholder value
Enable the Company to attract and retain a high calibre of Senior Executives
During the year, the Remuneration and Nomination Committee engaged external remuneration
consultants Crichton and Associates (Crichton) to assist the Company with the implementation of a
remuneration structure appropriate for the Company and for advice in relation to grants in accordance
with the remuneration structure. Crichton was paid $48,018 for their services. In accordance with the
Corporations Act, 2001, Crichton has declared, and, on that basis, the Board is satisfied that their advice
has been provided free of any undue influence by any member of the KMP or Senior Executive.
In November 2018, the Company established a new EXP Employee Incentive Plan (EEIP) designed to
encourage employees to share in the ownership and promote the long-term success of the Company.
Employees under the EEIP include full-time or permanent part-time employees or officers and Directors1
of the Company or any related body corporate of the Company.
The EEIP is designed with flexibility to grant awards including Service Rights (subject to service based
vesting conditions) and Performance Rights (subject to long-term performance based vesting
conditions) as part of STIs and LTIs. Participation in the EEIP is at the Board’s discretion.
1 It is Company policy that Non-Executive Directors do not participate in performance-based remuneration
24
EXPERIENCE CO LIMITED
KEY MANAGEMENT PERSONNEL
The Key Management Personnel (KMP) for the Group for FY19, are those persons whose remuneration
must be disclosed in this report and includes Non-Executive Directors, Executive Directors and members
of the Senior Executive who have the authority and responsibility for planning, directing and controlling
the activities of the Group. As a result of the leadership changes during the year and the simplification
of the corporate structure, the Board reviewed the Group’s KMP’s in line with the above relevant criteria
and considered the following persons to be KMP of the Group in FY19.
KMP
POSITION
NON-EXECUTIVE DIRECTORS
Bob East1
John Diddams
Colin Hughes
EXECUTIVE DIRECTORS AND
SENIOR MANAGEMENT
Anthony Boucaut2
Owen Kemp3
Ian Douglas4
Anthony Ritter5
Philip Turner6
NOTE
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Managing Director
Chief Financial Officer
General Manager – Corporate Development
Chief Executive Officer
Chief Financial Officer
1 Bob East was appointed as a Non-Executive Director on 30 April 2018. On 26 October 2018
he was appointed Chair of Board. Following Anthony Ritter’s resignation, Bob East assumed
the role of Executive Chair on 13 February 2019 until new CEO John O’Sullivan joined the Group
on 29 July 2019.
2 Anthony Boucaut transitioned to Non-Executive Director on 2 September 2019.
3 Owen Kemp appointed on 11 February 2019.
4 Ian Douglas appointed on 4 March 2019.
5 Anthony Ritter resigned on 13 February 2019.
6 Philip Turner resigned on 25 September 2018.
Clark Scott and Steve O’Malley are no longer considered to be KMP of the Company – their
remuneration information is therefore only included in respect of FY18
VOTING AT THE COMPANY’S ANNUAL GENERAL MEETING
EXP received more than 94% of “yes” votes on its remuneration report for the 2018 financial year.
25
EXPERIENCE CO LIMITED
REMUNERATION FRAMEWORK
KEY COMPONENTS OF REMUNERATION: FINANCIAL YEAR 2019
FIXED REMUNERATION
COMPOSITION
Fixed remuneration comprises salary, superannuation and other fixed
elements of remuneration such as vehicle allowances
DETERMINATION
Fixed remuneration is determined based on market comparisons for similar
positions, taking into account the experience and skills of the manager
involved
REVIEW
Fixed remuneration is determined on appointment and reviewed annually
SHORT-TERM INCENTIVE (STI)
PURPOSE
Reward for annual performance using performance metrics that will drive
longer term shareholder value
PARTICIPATION
Executive KMP and other Senior Executives
OPPORTUNITY
PERFORMANCE
PERIOD
PERFORMANCE
MEASURES
PAYMENT
CLAWBACK
Maximum STI opportunity as a percentage of fixed remuneration is 50% for
the CEO, CFO and GM Corporate Development and 45% for other Senior
Executives
Performance is measured from 1 July to 30 June
STI awards are based on the Group achieving internal Group budgeted
EBITDA as well as specific Key Performance Indicators (KPIs) covering
financial or financial related metrics (up to 80% weight) and non-financial
(being the % balance) metrics relevant to the role and responsibility of the
respective Senior Executive aimed at ongoing improved operational
performance and growth and development of the business. Assessment and
payment of any incentive is based on the audited financial results for FY19
and remains at the discretion of the EXP Board
Any outcome from the STI is settled with 70% in cash and 30% in the form of
Deferred Service Rights (DFRs). Vesting of DFRs occurs two years from grant
date and KMPs and Senior Executives must remain employed until the
vesting date
An Executive Clawback Policy applies to Participants ensuring an alignment
of the remuneration outcomes of Senior Executives of the Company with the
experiences of the shareholders of the Company
ONE-OFF GRANT OF PERFORMANCE RIGHTS TO CFO
Given the changes in leadership during the year, in March 2019, the Board granted the CFO a one-off
grant of 360,360 Performance Rights determined by dividing $100,000 by $0.2775 (the 5-day VWAP of
EXP shares traded on the ASX calculated up to and including 26 February 2019). The Performance Rights
are subject to both performance and service conditions and reflect the additional duties undertaken
while the search for a new CEO was undertaken. Key features of the grant are:
26
EXPERIENCE CO LIMITED
KEY DETAILS OF THE
PERFORMANCE
RIGHTS GRANTED TO
THE CFO
No cash consideration is payable on the issue or exercise of the
Performance Rights
Each Performance Right entitles the CFO to receive, upon vesting and
exercise, one EXP Share
The Performance Rights will vest on 4 March 2020 subject to the CFO
meeting performance and service conditions as agreed on grant:
Supporting the Executive Chairman until appointment of the
new CEO;
Undertaking and completing a restructure of financial
systems, procedures and controls and completing the
implementation of new accounting and financial processes
and systems prior to 30 June 2019 to ensure improved
accuracy, efficiencies and timing of delivery of internal
management, Board and public reporting as required by the
business
Continued employment by the Group until the vesting date
The satisfactory completion of the performance hurdles will be
determined by the Chair of the Board. Performance Rights expire on
31 March 2020
LONG-TERM INCENTIVES
As a result of the leadership changes during the year, the Board decided not to make any LTI grants in
FY19. Refer to page 31 for details regarding the LTI which has been developed for FY20.
REMUNERATION OUTCOMES FOR FY19
FY19 PERFORMANCE LINKED TO REMUNERATION
EXP aims to align Senior Executive remuneration to objectives aimed at the creation of shareholder
value. Incentives for Senior Executives are based on achieving internal Group financial and non-financial
metrics. The table below shows the Group’s financial performance over the last five years as required
by the Corporations Act.
Sales revenue ($'000)
EBITDA ($'000)
2019
2018
2017
2016
2015
161,296 135,300
89,566
58,473 26,320
19,265 27,411
20,988
13,457
6,025
Underlying EBITDA ($'000)
27,183 30,172
20,988
13,457
6,025
Net profit/(loss) for the year ($'000)
(48,257)
6,785
9,482
7,158
2,468
Market capitalisation ($'000)
141,730 355,720 287,019 202,114
91,056
Dividends paid ($'000)
Earnings per share (cents)
Share price at financial year end ($)
Dividends paid (cents per share)
5,558
4,349
3,963
2,937
(8.68)
0.23
0.01
1.34
0.64
0.01
2.24
0.66
0.01
2.1
0.51
0.01
Total KMP Incentives as % of underlying EBITDA
0.0% 0.79%
2.12%
2.42%
-
1.13
0.31
-
-
27
EXPERIENCE CO LIMITED
STI PERFORMANCE OUTCOMES
Assessment and payment of STI is based on audited financial results. As internal Group EBITDA targets
were not met in FY19, no STIs were paid to executive KMP in FY19.
KMP REMUNERATION SCHEDULES
The following tables of benefits and payments represent 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 2019 AND
30 JUNE 2018
SHORT-TERM BENEFITS
POST
EMPLOYMENT
BENEFITS
LONG-TERM
BENEFITS
Salary, Fees
and Leave
$1
Profit Share
and
bonuses
$
Fringe
benefits Tax
$
Travel
Allowances
$
Pension and
superannuation
$
LSL
$
Total
$
185,685
22,831
161,000
161,000
110,538
109,589
-
166,375
457,223
459,795
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,315
2,169
-
-
9,462
10,411
-
-
23,777
12,580
-
-
-
-
-
-
-
-
-
-
200,000
25,000
161,000
161,000
120,000
120,000
-
166,375
481,000
472,375
NON-EXECUTIVE DIRECTORS
Kerry Robert (Bob) East
FY 2019
FY 2018
John Diddams
FY 2019
FY 2018
Colin Hughes
FY 2019
FY 2018
William Beerworth
FY 2019
FY 2018
Total Non-Executive Directors FY19
Total Non-Executive Directors FY18
1 Salary, Fees and Leave amounts relating to Bob East, Colin Hughes and John Diddams include amounts
sacrificed for the grant of Service Rights during the year
28
EXPERIENCE CO LIMITED
SHORT-TERM BENEFITS
POST EMPLOYMENT
BENEFITS
LONG-TERM
BENEFITS
TOTAL
$
EXECUTIVE DIRECTORS
Salary, Fees
and Leave
$
Profit Share
and bonuses
$
Fringe
benefits Tax
Travel
Allowances
$
Pension and
superannuation
$
LSL
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
408,565
334,615
289,748
444,446
144,940
-
101,267
-
-
238,208
-
336,527
150,901
228,764
1,095,421
1,582,560
Anthony Boucaut
FY 2019
FY 2018
Anthony Ritter1
FY 2019
FY 2018
Other KMP
Owen Kemp2
FY 2019
FY 2018
Ian Douglas3
FY 2019
FY 2018
Steve O'Malley4
FY 2019
FY 2018
Clark Scott4
FY 2019
FY 2018
Phillip Turner5
FY 2019
FY 2018
365,158
250,000
255,859
291,666
-
-
-
60,000
136,385
-
94,423
-
-
217,542
-
-
-
-
-
-
-
-
$
9,283
13,195
10,139
17,402
-
-
-
-
-
-
-
150,839
167,861
17,827
142,844
197,933
-
10,000
-
-
-
47,670
-
47,670
-
-
-
-
-
-
-
-
-
1,400
34,124
23,750
23,750
27,708
8,555
-
6,844
-
-
20,666
-
-
8,057
19,431
Total Executive Directors
and Other KMP FY19
Total Executive Directors
and Other KMP FY18
994,669
-
19,422
-
81,330
1,107,980
237,861
48,424
96,740
91,555
NOTE
1 Anthony Ritter resigned on 13 February 2019
2 Owen Kemp appointed on 11 February 2019
3 Ian Douglas appointed on 4 March 2019
4 Clark Scott and Steve O’Malley are no longer considered to be KMP of the Company – their
remuneration information is therefore only included in respect of FY18
5 Phillip Turner resigned on 25 September 2018
29
EXPERIENCE CO LIMITED
EQUITY-SETTLED SHARE BASED PAYMENTS
KMP
Bob East
Colin Hughes
John Diddams
Bob East
Owen Kemp
TYPE OF EQUITY
NED Service Rights
NED Service Rights
NED Service Rights
Service Rights
Performance Rights
FY19 EXPENSES $ 1
61,521
19,225
42,039
60,176
40,118
The above table represents the portion the rights issued during FY19 for Service Rights and
Performance Rights that were expensed in the current year as per independent valuation. Refer to page
35–36 of the annual report for the fair value and total number of rights that this current year expense
relates to.
SUMMARY OF EXECUTIVE KMP EMPLOYMENT CONDITIONS AS AT
30 JUNE 2019
KMP
Anthony
Boucaut1
TERM OF
AGREEMENT
NOTICE PERIOD
TERMINATION ENTITLEMENTS
No definite term
3 months
3 months
Owen Kemp
No definite term
6 months
During the first 12 (twelve) months of
Owen’s employment, if the Company has a
change of ownership structure and as a
result Owen’s role is terminated, the
Company will pay Owen the equivalent to
an additional 6 (six) months' notice
Ian Douglas
No definite term
3 months
3 months
1 Anthony Boucaut transitioned to Non-Executive Director on 2 September 2019.
30
EXPERIENCE CO LIMITED
KEY CHANGES TO REMUNERATION FOR FINANCIAL YEAR 2020
LONG TERM INCENTIVE (LTI)
The Directors understand that alignment of the longer term interests of Senior Executives with that of
shareholders promotes longer term growth of the Company. Therefore, a new long-term incentive plan
for Senior Executives has been developed. The Board has approved the award of Performance Rights to
key Senior Executives subject to long-term performance based vesting conditions aligned with general
market practice. The 2019 Notice of Annual General meeting will include details of the grant to Executive
Director and CEO, John O’Sullivan and it is expected that the Performance Rights will be issued shortly
after the Annual General Meeting. It is the Board’s intention that LTI Performance Rights will be granted
on an annual basis. Key details of the FY20 LTI are set out below;
PARTICIPATION
Executive KMP
OPPORTUNITY
LTI opportunity as a percentage of fixed remuneration is 50%
DELIVERY
Performance Rights
PERFORMANCE
MEASURES
PERFORMANCE
PERIOD
50% of the Performance Rights will vest subject to meeting targets based on
absolute Total Shareholder Return (TSR), and 50% of the Performance Rights
will vest subject to meeting targets based on Return on Invested Capital
(ROIC)
Performance will be measured over three years
SERVICE RIGHTS GRANTED TO CEO, JOHN O’SULLIVAN
As referred to in the ASX announcement on 6 May 2019, in accordance with the terms of the
appointment of the new CEO, the Board agreed to award to the CEO 439,560 Service Rights determined
by dividing $120,000 by $0.273 (the 5-day VWAP of EXP shares traded on the ASX calculated up to and
including 6 May 2019). The proposed grant provides the CEO with equity participation in the Company,
aligns the interests of the CEO with those of shareholders. The 2019 Notice of Annual General meeting
will include details of the terms of the grant of Service Rights and it is expected that the Service Rights
will be granted shortly after the 2019 Annual General Meeting.
NON-EXECUTIVE DIRECTOR REMUNERATION
The Board's policy is to remunerate Non-Executive Directors (NEDs) based on market related fees for
time, commitment and responsibilities as NEDs of the Company. The Remuneration and Nomination
Committee determines fees payable to NEDs and reviews their remuneration regularly, based on market
practice, duties and accountability.
A SUMMARY OF THE KEY REMUNERATION MATTERS FOR NED’S FOR THE FY19 YEAR ARE AS FOLLOWS:
Non-Executive Directors receive a director’s fee and fees (inclusive of Superannuation), for chairing or
participating on Board Committees, refer below. A portion of Director fees are sacrificed by each NED in
lieu of the grant of Service Rights.
31
EXPERIENCE CO LIMITED
BASE FEES INCLUSIVE OF SUPERANNUATION ARE AS FOLLOWS
ROLE
Chair of Board
Deputy Chair of Board
Other Non-Executive Directors
Chair of Committee
Member of Committee
FEE PER ANNUM
$200,000 *
$116,000
$85,000
$25,000
$20,000
*Includes fees for membership of the Audit & Risk Committee and Chair of the Remuneration and
Nomination Committee.
The maximum annual aggregate of the 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.
NED SERVICE RIGHTS
It is the Board’s view that alignment of the interests of shareholders with that of NEDs is in the best
interest of all stakeholders and that NEDs of the Company develop an “equity ownership position” in the
Company. In November 2018, the Board approved the grant of NED Service Rights to NEDs facilitated by
each NED sacrificing Director fees in consideration for the grant of NED Service Rights. The Service
Rights are not subject to performance conditions. Each NED elects to sacrifice between 15% and 30% of
their Director fees over a period of three years. The number of Service Rights granted to NEDs in
November 2018 was determined by dividing the amount elected by each NED by $0.347 (the 5-day
VWAP of EXP shares traded on the ASX calculated up to and including 29 November 2018).
NED SERVICE RIGHTS
NED
Bob East
John Diddams
Colin Hughes
% of NED Remuneration
received as NED Service
Rights
Amount Sacrificed $
NED Service Rights
issued
30%
25%
15%
180,000
123,000
56,250
518,732
354,467
162,104
KEY CRITERIA OF THE NED
SERVICE RIGHTS ISSUED
No cash consideration is payable on exercise of the Service
Rights.
Each Service Right entitles the NED to receive, upon vesting
and exercise, one EXP Share
The Service Rights will vest over three years. Should a NED
resign, Service Rights that vest will be in line with the amount
of Director fee sacrificed up to date of resignation. The
remaining Service Rights will lapse
32
EXPERIENCE CO LIMITED
SERVICE RIGHTS GRANTED TO EXECUTIVE CHAIRMAN (BOB EAST)
Bob East assumed the role of Executive Chairman during the search for a new CEO. The Board (excluding
Bob East) approved the grant of Service Rights to Bob, in lieu of fixed remuneration, based on a fair and
reasonable assessment of remuneration for an executive of Bob’s calibre and experience, for his role as
Executive Chairman of EXP. In March 2019, the Board granted the Executive Chair 540,540 Service
Rights determined by dividing $150,000 by $0.2775 (the 5-day VWAP of EXP shares traded on the ASX
calculated up to and including 26 February 2019). In addition, the grant of Service Rights serves to align
the interests of the Executive Chairman with that of shareholders of the Company.
KEY CRITERIA OF THE
SERVICE RIGHTS GRANTED
TO BOB EAST
No cash consideration is payable on the issue of the Service
Rights
Each Service Right entitles the Executive Chairman to
receive, upon vesting and exercise, one EXP Share
The Service Rights will vest on 4 March 2020
Each of the Service Rights expire on 31 March 2020
The above Services Rights have been granted without shareholder approval and therefore settlement of
vesting is restricted to ‘on market’ purchase only.
KMP SHAREHOLDINGS
ORDINARY SHARES
The table below shows the number of ordinary shares held in the Company by KMP during the year,
including their close family members and entities related to them.
The EXP Securities trading policy applies to all Directors and Senior Executives and restricts the dealing
in shares during certain periods.
KMP
Bob East
BALANCE AT
BEGINNING OF
YEAR
CHANGES DURING THE YEAR
BALANCE AT END OF
YEAR
-
700,000 (on market purchase)
700,000
John Diddams
2,340,545
100,000 (on market purchase)
2,440,545
Colin Hughes
-
-
-
Anthony Boucaut
180,048,044
300,000 (on market purchase)
180,348,044
Owen Kemp
Ian Douglas
Anthony Ritter1
Phillip Turner1
-
-
3,383,970
20,000
-
-
NA
NA
-
-
NA
NA
1 Anthony Ritter and Phillip Turner resigned during the year. Their shareholdings are therefore no
longer required to be provided.
John O’Sullivan appointed on 29 July 2019 therefore not included.
33
EXPERIENCE CO LIMITED
OPTIONS, SERVICE RIGHTS OR PERFORMANCE RIGHTS HELD BY KMP
The fair value of Options, Performance Rights and Service Rights granted as remuneration and as shown in the
below tables has been recognised in accordance with Australian Accounting Standards and have been
recognised as an expense over the relevant vesting period.
OPTIONS HELD BY KMP
KMP
Anthony
Boucaut
John
Diddams
Anthony
Ritter
OPENING
BALANCE
GRANTED
DURING THE
YEAR
EXERCISED
DURING THE
YEAR
CLOSING
BALANCE
EXERCISE
PRICE $
DATE OF EXPIRY
3,000,000
1,500,000
2,500,000
-
-
-
-
-
-
3,000,000
1,500,000
2,500,000
0.25
0.25
0.25
9 Feb 2025
9 Feb 2025
9 Feb 2025
All options have vested and therefore no further expense is recognised in FY19
No options were exercised during the year
Anthony Ritter resigned on 13 February 2019
PERFORMANCE RIGHTS GRANTED TO KMP
KMP
Owen
Kemp
OPENING
BALANCE
GRANTED
DURING
THE YEAR
EXERCISED
DURING THE
YEAR
CLOSING
BALANCE
FAIR
VALUE AT
GRANT
DATE $
FAIR
VALUE AT
GRANT
DATE PER
SHARE $
EXERCISE
PRICE $
VESTING
DATE
DATE
OF
EXPIRY
-
360,360
-
360,360
124,432
0.3453
nil
4 March
2020
31 Mar
2020
Details of Performance Rights granted are included on pages 26 of the annual report
No Performance Rights vested during the year
34
EXPERIENCE CO LIMITED
SERVICE RIGHTS GRANTED TO KMP
NON-EXECUTIVE DIRECTOR
SERVICE RIGHTS – BOARD FEES
SACRIFICED
KMP
OPENING
BALANCE
GRANTED
DURING
THE YEAR
EXERCISED
DURING THE
YEAR
CLOSING
BALANCE
FAIR
VALUE
AT
GRANT
DATE $
FAIR VALUE
AT GRANT
DATE PER
SHARE $
EXERCISE
PRICE $
VESTING
DATE
DATE OF
EXPIRY
Bob East
John
Diddams
Colin
Hughes
-
-
-
518,732
354,467
-
-
518,732
171,648
Refer below1
nil
354,467
117,293
Refer below1
nil
162,104
-
162,104
53,640
Refer below1
nil
Refer
below2
Refer
below2
Refer
below2
Refer
below2
Refer
below2
Refer
below2
NOTE
1 Fair value at grant date is $0.3403 for Tranche 1, $0.3308 for Tranche 2 and $0.3216 for Tranche 3
2 Vesting is in three equal annual instalments commencing on 30 November 2019 and ending on
30 November 2021, with an expiry date 30 days after each vesting date
Details of Service Rights granted are provided on pages 32 of this remuneration report
No Service Rights vested during the year
SERVICE RIGHTS – IN LIEU OF FIXED REMUNERATION FOR ROLE AS EXECUTIVE CHAIR OF BOARD
KMP
OPENING
BALANCE
GRANTED
DURING THE
YEAR
EXERCISED
DURING THE
YEAR
CLOSING
BALANCE
FAIR
VALUE AT
GRANT
DATE $
FAIR
VALUE AT
GRANT
DATE PER
SHARE $
EXERCISE
PRICE $
VESTING
DATE
DATE OF
EXPIRY
Bob East
-
540,540
-
540,540
186,648
0.3453 nil
4 Mar 19
31 Mar 20
Details of Service Rights granted are provided on pages 33 of this remuneration report
No Service Rights vested during the year
INFORMATION RELATING TO EQUITY BASED AWARDS SUBSEQUENT TO 30 JUNE 2019
There have been no other transactions involving equity instruments apart from those described in the tables
above relating to options, rights and shareholdings
35
EXPERIENCE CO LIMITED
TRANSACTIONS WITH RELATED PARTIES
LOANS TO KMP
The Group has unsecured loans to Boucaut Enterprises Pty Limited, a related entity associated with
Anthony Boucaut for loans totaling $1,275,694 of which the loans expire on 28 February 2021 and 30
June 2023 details of which can be found at note 29(c).
LOANS TO KEY MANAGEMENT PERSONNEL
Beginning of the year
Total Interest Adjustments during the year
Loans Advanced for the period
Cash Repayments for the period
Other Repayments for the period
Interest charged
End of year
2019
NON
CURRENT
$000
1,287,618
(50,401)
153,448
(135,000)
(320,981)
41,010
975,694
2019
CURRENT
2019
TOTAL
$000
300,000
300,000
$000
1,587,618
(50,401)
153,448
(135,000)
(320,981)
41,010
1,275,694
Note that during the 2019 financial year, the highest amount of KMP indebtedness from this entity was
$1,323,990.
OTHER TRANSACTIONS WITH KMP AND/OR THEIR RELATED PARTIES
Apart from those transactions disclosed in this Remuneration Report relating to equity, compensation
and loans, the only other transactions with related parties relates to operating leases which are set out
in further detail in in Note 29 to the Financial Report.
36
AUDITOR’S INDEPENDENCE DECLARATION
37
AUDITOR’S INDEPENDENCE DECLARATION
ANNUAL FINANCIAL REPORT
38
Experience Co Limited
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30 June 2019
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 and other assets
Impairment of intangible assets
Marketing, advertising and agents commission expenses
Repairs and maintenance expenses
Finance costs
Other expenses
(Loss)/profit before income tax
Tax benefits/(expense)
Net (loss)/profit for the year
Other comprehensive income/(loss):
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
2019
$000
2018
$000
NOTE
4
5
4
5
6
161,296
135,300
(98,077)
(79,647)
63,219
55,653
1,481
1,363
(29,525)
(3,746)
(13,950)
(9,964)
(52,570)
(2,970)
(1,281)
(1,778)
(7,748)
(22,730)
(3,520)
(13,492)
(1,746)
-
(2,786)
(553)
(1,857)
(16)
(58,832)
10,316
10,575
(3,531)
(48,257)
6,785
6c
5,127
(1,004)
463
(75)
5,590
(1,079)
Total comprehensive (loss)/income for the year
(42,667)
5,706
Earnings per share
From continuing operations:
Basic earnings per share (cents)
Diluted earnings per share (cents)
10
10
(8.68)
(8.68)
1.34
1.31
The accompanying notes form part of these financial statements.
39
EXPERIENCE CO LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 30 JUNE 2019
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
Deferred tax assets
Intangible assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Employee benefits
Contract liabilities
Total current liabilities
Non-current liabilities
Borrowings
Deferred tax liabilities
Employee benefits
Provisions
Total non-current liabilities
Total liabilities
Net assets
NOTE
2019
$000
2018
$000
11
12
13
12
14
16
20
17
18
19
21
22
19
21
23
4,803
5,645
4,964
4,119
3,170
22,701
7,171
8,385
4,710
317
1,979
22,562
976
1
118,868
9,535
29,986
159,366
182,067
1,803
1,560
121,539
-
84,968
209,870
232,432
9,653
2,955
3,033
1,733
17,374
9,630
3,305
2,834
1,158
16,927
31,198
-
263
833
32,294
49,668
132,399
32,230
2,429
454
-
35,113
52,040
180,392
EQUITY
Issued capital
(Accumulated losses)/retained earnings
Reserves
Total equity
24
25
168,860
(38,713)
2,252
132,399
168,860
14,644
(3,112)
180,392
The accompanying notes form part of these financial statements.
40
EXPERIENCE CO LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
Note
Issued
Capital
Retained
Earnings
Asset
Revaluation
Reserve
Common
Control
Reserve
Share
Option
Reserve
Foreign
Currency
Translation
Reserve
Total
Balance at 1 July 2017
84,321
12,208
2,386
(4,171)
18
(266)
94,496
$000
$000
$000
$000
$000
$000
$000
Comprehensive income
Profit for the year
Other comprehensive loss 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
-
-
-
6,785
-
-
(1,004)
6,785
(1,004)
24
9
86,946
(3,438)
1,031
-
-
-
-
(4,349)
84,539
(4,349)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,785
(75)
(1,079)
(75)
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
Balance at 1 July 2018
168,860 14,644
1,382
(4,171)
18
(341)
180,392
Transfer from asset revaluation
reserve to retained earnings
Comprehensive income
Loss for the year
Other comprehensive income for the
year
Total comprehensive loss for the
year
Transactions with owners, in their
capacity as owners, and other
transfers
Options issued during the year
Dividends paid during the year
Total transactions with owners and
other transfers
26
9
-
-
-
-
-
-
-
458
(458)
(48,257)
-
-
5,127
(48,257)
5,127
-
(5,558)
(5,558)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(48,257)
463
5,590
463
(42,667)
232
-
232
-
-
-
232
(5,558)
(5,326)
Balance at 30 June 2019
168,860 (38,713)
6,051
(4,171)
250
122
132,399
The accompanying notes form part of these financial statements.
41
EXPERIENCE CO LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2019
OPERATING ACTIVITIES
Receipts from customers (GST inclusive)
Payments to suppliers and employees (GST inclusive)
Finance costs
Income tax paid
NOTE
2019
$000
2018
$000
180,530
149,284
(153,497)
(128,044)
(1,778)
(1,680)
(6,732)
(4,718)
Net cash provided by operating activities
27
18,523
14,842
INVESTING ACTIVITIES
Sale of property, plant and equipment
Purchase of property, plant and equipment
Purchase of other non-current assets
2,625
-
(15,240)
(23,402)
-
(1,500)
Payments for investments in subsidiaries
15
(1,700)
(72,448)
Cash acquired in business acquisitions
Net cash (used in) investing activities
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 (used in)/provided by financing activities
Net decrease in cash held
Cash and cash equivalents at beginning of financial year
-
1,770
(14,315)
(95,580)
-
-
80,947
(3,439)
2,500
15,601
(3,518)
(9,690)
(5,558)
(4,349)
-
-
(951)
300
(6,576)
78,419
(2,368)
(2,319)
7,171
9,490
Cash and cash equivalents at end of financial year
11
4,803
7,171
The accompanying notes form part of these financial statements.
42
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
These consolidated financial statements and notes represent those of Experience Co Limited and its
controlled entities (the “Group”). Experience Co Limited is listed on the ASX (ASX: EXP) and is an
Australian based entity, established and domiciled in Australia. The registered office and principal place
of business for the Group is Level 1, 51 Montague Street, North Wollongong NSW 2500.
A description of the nature of the Group’s operations and principal activities are included in the
Director’s Report, which is not part of the financial statements.
The financial statements were authorised for issue on 30 September 2019 by the directors of the
Company.
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.
NEW OR AMENDED ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by
the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted. The following Accounting Standards and Interpretations are most relevant to the Group:
AASB 9 FINANCIAL INSTRUMENTS
The Group has adopted AASB 9 from 1 July 2018. The standard introduced new classification and
measurement models for financial assets. A financial asset shall be measured at amortised cost if it is
held within a business model whose objective is to hold assets in order to collect contractual cash flows
which arise on specified dates and that are solely principal and interest. A debt investment shall be
measured at fair value through other comprehensive income if it is held within a business model whose
objective is to both hold assets in order to collect contractual cash flows which arise on specified dates
that are solely principal and interest as well as selling the asset on the basis of its fair value. All other
financial assets are classified and measured at fair value through profit or loss unless the entity makes
an irrevocable election on initial recognition to present gains and losses on equity instruments (that are
not held-for-trading or contingent consideration recognised in a business combination) in other
comprehensive income ('OCI'). Despite these requirements, a financial asset may be irrevocably
designated as measured at fair value through profit or loss to reduce the effect of, or eliminate, an
accounting mismatch. For financial liabilities designated at fair value through profit or loss, the standard
requires the portion of the change in fair value that relates to the entity's own credit risk to be presented
in OCI (unless it would create an accounting mismatch). New simpler hedge accounting requirements
are intended to more closely align the accounting treatment with the risk management activities of the
entity. New impairment requirements use an 'expected credit loss' ('ECL') model to recognise an
allowance. Impairment is measured using a 12-month ECL method unless the credit risk on a financial
instrument has increased significantly since initial recognition in which case the lifetime ECL method is
adopted. For receivables, a simplified approach to measuring expected credit losses using a lifetime
expected loss allowance is available.
AASB 15 REVENUE FROM CONTRACTS WITH CUSTOMERS
The Group has adopted AASB 15 from 1 July 2018. The standard provides a single comprehensive model
for revenue recognition. The core principle of the standard is that an entity shall recognise revenue to
depict the transfer of promised goods or services to customers at an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those goods or services. The
standard introduced a new contract-based revenue recognition model with a measurement approach
that is based on an allocation of the transaction price. This is described further in the accounting
policies below. Credit risk is presented separately as an expense rather than adjusted against revenue.
Contracts with customers are presented in an entity's statement of financial position as a contract
liability, a contract asset, or a receivable, depending on the relationship between the entity's
performance and the customer's payment. Customer acquisition costs and costs to fulfil a contract can,
subject to certain criteria, be capitalised as an asset and amortised over the contract period.
43
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
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 financial assets and liabilities at fair value through profit or loss including
certain classes of property and plant and equipment.
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 Group '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
Group only. Supplementary information about the parent entity is disclosed in Note 34.
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 15].
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.
44
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 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".
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.
45
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 17 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.
a)
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.
46
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
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.
b) REVENUE RECOGNITION
The Group recognizes revenue as follows;
47
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to
be entitled in exchange for transferring goods or services to a customer. For each contract with a
customer, the Group: identifies the contract with a customer; identifies the performance obligations in
the contract; determines the transaction price which takes into account estimates of variable
consideration and the time value of money; allocates the transaction price to the separate performance
obligations on the basis of the relative stand-alone selling price of each distinct good or service to be
delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that
depicts the transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the
customer such as discounts, rebates and refunds, any potential bonuses receivable from the customer
and any other contingent events. Such estimates are determined using either the 'expected value' or
'most likely amount' method. The measurement of variable consideration is subject to a constraining
principle whereby revenue will only be recognised to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognised will not occur. The measurement
constraint continues until the uncertainty associated with the variable consideration is subsequently
resolved. Amounts received that are subject to the constraining principle are recognised as a refund
liability.
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of
the goods, which is generally at the time of delivery.
Interest
Interest revenue is recognised using the effective interest method.
Rent
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.
c) 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.
d) CURRENT AND NON CURRENT CLASSIFICATION
Assets and liabilities are presented in the statement of financial position based on current and non-
current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or
consumed in the Group 's normal operating cycle; it is held primarily for the purpose of trading; it is
expected to be realised within 12 months after the reporting period; or the asset is cash or cash
equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months
after the reporting period. All other assets are classified as non-current.
48
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
A liability is classified as current when: it is either expected to be settled in the Group 's normal operating
cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the
reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12
months after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
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 receivables are initially recognised at fair value and subsequently measured at amortised cost
using the effective interest method, less any allowance for expected credit losses. Trade receivables
are generally due for settlement within 30 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a
lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been
grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit 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)
INVESTMENTS AND OTHER FINANCIAL ASSETS
Investments and other financial assets are initially measured at fair value. Transaction costs are
included as part of the initial measurement, except for financial assets at fair value through profit or
loss. Such assets are subsequently measured at either amortised cost or fair value depending on their
classification. Classification is determined based on both the business model within which such assets
are held and the contractual cash flow characteristics of the financial asset unless, an accounting
mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been
transferred and the Group has transferred substantially all the risks and rewards of ownership. When
there is no reasonable expectation of recovering part or all of a financial asset, it's carrying value is
written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income
are classified as financial assets at fair value through profit or loss. Typically, such financial assets will
be either: (i) held for trading, where they are acquired for the purpose of selling in the short-term with an
intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where
permitted. Fair value movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which
the Group intends to hold for the foreseeable future and has irrevocably elected to classify them as
such upon initial recognition.
49
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial assets which are either
measured at amortised cost or fair value through other comprehensive income. The measurement of the
loss allowance depends upon the Group 's assessment at the end of each reporting period as to whether
the financial instrument's credit risk has increased significantly since initial recognition, based on
reasonable and supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-
month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime
expected credit losses that is attributable to a default event that is possible within the next 12 months.
Where a financial asset has become credit impaired or where it is determined that credit risk has
increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The
amount of expected credit loss recognised is measured on the basis of the probability weighted present
value of anticipated cash shortfalls over the life of the instrument discounted at the original effective
interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is
recognised within other comprehensive income. In all other cases, the loss allowance is recognised in
profit or loss.
i)
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.
Aircraft and Helicopters
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.
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.
50
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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
Other than Aircraft and Helicopter engines, which are depreciated over the numbers of hours in use,
depreciation is provided on a straight-line basis on all other 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:
PROPERTY, PLANT & EQUIPMENT CLASS DEPRECIATION RATE
RESIDUAL VALUE (%)
Aircraft frames
Aircraft engines
Helicopter frames
Helicopter engines
Motor vehicles
Leasehold improvements
Office equipment
Plant and equipment
Buildings
Vessel hulls and fixtures
Vessel engines
Floating docks
5%
Operating hours
8% - 12%
Operating hours
10%
2.5%
25%
25%
2.5%
5.5% - 10%
5.5% - 20%
6% - 20%
Specific to Aircraft
Specific to Aircraft
11% - 44%
0%
0%
0%
0%
0%
0%
30%
0%
30%
The useful life of the Aircraft engine in operating hours is determined by manufacturer specifications
and regulatory requirements and is typically denominated in flight operating hours since new, and/or
last overhaul. This varies across the aircraft fleet however is within a range of 2,000 to 8,000 hours for
fixed wing aircraft. For helicopters, each major component is depreciated individually. The total life
number of hours varies significantly between each part and within fleet model types.
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.
51
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
j)
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.
Trademarks
Trademarks are recognised at their fair value at the date of acquisition. Trademarks are indefinite life
intangible assets and are therefore not amortised. Trademarks are subsequently measured at cost less
any impairment.
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, being from 4 to 22 years.
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.
k)
IMPAIRMENT OF ASSETS
At the end of each reporting period, the Group assesses whether there is any indication that an asset
may be impaired. The assessment will include the consideration of external and internal sources of
information, including dividends received from subsidiaries, associates or joint ventures deemed to be
out of pre-acquisition profits. If such an indication exists, an impairment test is carried out on the asset
by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs
of disposal and value in use, to the asset’s carrying amount. Any excess of the asset’s carrying amount
over its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a
revalued amount in accordance with another Standard (eg in accordance with the revaluation model in
AASB 116: Property, Plant and Equipment). Any impairment loss of a revalued asset is treated as a
revaluation decrease in accordance with that other Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates
the recoverable amount of the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill, intangible assets with indefinite lives and
intangible assets not yet available for use.
52
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
n) EMPLOYEE BENEFITS
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.
53
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
o) PROVISIONS
Provisions are recognised when the group has a legal or constructive obligation, as a result of past
events, for which it is probable that an outflow of economic benefits will result and that outflow can be
reliably measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation at the
end of the reporting period.
p) CONTRACT LIABILITIES
Contract liabilities represent the Group 's obligation to transfer goods or services to a Group customer
and are recognised when a customer pays consideration, or when the Group recognises a receivable to
reflect its unconditional right to consideration (whichever is earlier) the Group has transferred the
goods or services to the customer.
q) 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.
r) 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. The Group has also considered any onerous lease
obligations in respect of operating leases and recognised a provision for future obligations in relation to
the relevant leases.
Lease incentives under operating leases are recognised as a liability and amortised on a straight-line
basis over the lease term.
54
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
s) 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.
t) DIVIDENDS
Dividends are recognised when paid during the financial year and no longer at the discretion of the
company.
u) FOREIGN CURRENCY TRANSACTIONS AND BALANCES
Functional and presentations 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;
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
income and expenses are translated at average exchange rates for the period; and
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.
v)
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.
55
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
As fair value is a market-based measure, the closest equivalent observable market pricing information is
used to determine fair value. Adjustments to market values may be made having regard to the
characteristics of the specific asset or liability. The fair values of assets and liabilities that are not
traded in an active market are determined using one or more valuation techniques. These valuation
techniques maximise, to the extent possible, the use of observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or
liability (i.e. the market with the greatest volume and level of activity for the asset or liability) or, in the
absence of such a market, the most advantageous market available to the entity at the end of the
reporting period (i.e. the market that maximises the receipts from the sale of the asset or minimises the
payments made to transfer the liability, after taking into account transaction costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant’s
ability to use the asset in its highest and best use or to sell it to another market participant that would
use the asset in its highest and best use.
The fair value of liabilities and the entity’s own equity instruments (excluding those related to share-
based payment arrangements) may be valued, where there is no observable market price in relation to
the transfer of such financial instruments, by reference to observable market information where such
instruments are held as assets. Where this information is not available, other valuation techniques are
adopted and, where significant, are detailed in the respective note to the financial statements.
w)
FINANCIAL INSTRUMENTS (applied until 30/06/2018)
Recognition and Initial Measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the
contractual provisions to the instrument. For financial assets, this is equivalent to the date that the
entity commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transactions costs except where the
instrument is classified ‘at fair value through profit or loss’ in which case transaction costs are
expensed to profit or loss immediately.
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 effective interest method 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.
56
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
I.
Financial assets at fair value 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.
Financial Liabilities
V.
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.
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.
57
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
x)
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.
58
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to
take into account the after income tax effect of interest and other financing costs associated with
dilutive potential ordinary shares and the weighted average number of shares assumed to have been
issued for no consideration in relation to dilutive potential ordinary shares.
y)
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.
z)
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.
aa)
COMPARATIVE FIGURES
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
ab) 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.
ac) 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 16: Leases
AASB 16 will replace the current accounting requirements for leases on 1 July 2019.
Leases are currently classified based on their nature as either finance leases, which are capitalised as
intangible assets (Note 17) in the Consolidated Statement of Financial Position, or operating leases,
which are expensed as rent on a straight-line basis.
Under AASB 16, the Group’s accounting for operating leases as a lessee will result in the recognition of a
right-of-use asset and an associated lease liability in the Consolidated Statement of Financial Position.
The lease liability represents the present value of future lease payments for the Group’s leases. An
interest expense will be recognised on the lease liabilities and an amortisation charge will be recognised
for the right of use asset.
59
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The Group’s accounting for leases as a lessor remains largely unchanged under AASB 16, with the
exception of certain leases whereby the Group acts as sub-lessor.
The Group will initially apply AASB 16 on 1 July 2019 using the modified retrospective approach, whereby
the cumulative effect of adopting AASB 16 will be recognised as an adjustment to the opening balance
of retained earnings at 1 July 2019. Comparatives will not be restated.
The Group has progressed an implementation project to identify leases that are affected by AASB 16 and
to recognised and measure the related assets and liabilities as required from that date.
The actual impact of applying AASB 16 will depend on a number of decisions and conditions that are yet
to be finalised, including the determination of the Group’s incremental cost of borrowing rate, the
composition of the lease portfolio, and the extent to which the Group will make use of the practical
expedients and recognition exemptions allowed by AASB 16, including in relation to the finance leases
that are currently recognised as assets by the Group and policy choices concerning short-term and low
value leases.
The Group will finalise its transition to the new standard in the financial statements for the half year
ended 31 December 2019.
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 4% 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 4%
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 have been estimated for each individual
cash generating unit.
Impairment recognised in relation to goodwill and other intangibles for the period is set out in Note 17.
60
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 2 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
(CONTINUED)
b) ESTIMATION OF USEFUL LIVES AND RESIDUAL ASSETS
The Group 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. For helicopter
engines, components are depreciated based upon total number of hours to be flown. Best available data
is used in applying the value of a given component. Aircraft engines are treated the same way but are
not broken down by component.
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.
c) CARRYING VALUE OF PROPERTY, PLANT AND EQUIPMENT
The Group revalued its aircraft at as at 30 June 2019. Changes in fair value are recognised in the
asset revaluation reserve in equity and impairment expenses in profit and loss. The Group engaged
independent valuations to assess the fair value of each aircraft and helicopter asset. 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 33. The
company has acquired a number of additional aircraft and vessels as part of acquisitions accounted
for as business combinations. There is a degree of judgement required in estimating the fair values
of assets acquired, and where appropriate, the Group has engaged professional valuers to assist in
determining values.
d)
INCOME TAX
The Group 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 Group recognises liabilities for anticipated tax audit issues based on
the Group 's current understanding of the tax law. Where the final tax outcome of these matters is
different from the carrying amounts, such differences will impact the current and deferred tax
provisions in the period in which such determination is made. There are no specific "uncertain tax
positions".
e) EMPLOYEE BENEFITS PROVISION
As discussed in note 1(n), 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) ALLOWANCE FOR EXPECTED CREDIT LOSSES
The allowance for expected credit losses assessment requires a degree of estimation and
judgement. It is based on the lifetime expected credit loss, grouped based on days overdue, and
makes assumptions to allocate an overall expected credit loss rate for each group. These
assumptions include recent sales experience and historical collection rates.
61
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 2 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
(CONTINUED)
g) 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 Group 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.
h) FAIR VALUE MEASUREMENT HIERARCHY
The Group 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.
NOTE 3 OPERATING SEGMENTS
IDENTIFICATION OF REPORTABLE OPERATING SEGMENTS
The Group has identified the following reportable operational segments:
Skydiving
Adventure Experiences
Corporate
The Group is organized into above three operating segments based on a combination of factors
including products and services, geographical areas and regulatory environment.
These operating segments are based on the internal reports that are reviewed and used by the
Directors, who are identified as the Chief Operating Decision Makers (CODM) in assessing performance
and in determining the allocation of resources. There is no aggregation of operating segments. The
CODM reviews EBITDA at the segment level. The accounting policies adopted for internal reporting to the
CODM are consistent with those adopted in the financial statements.
The Skydiving segment operations primarily comprises tandem skydive and related products, with
ancillary aircraft maintenance and leasing revenues. Adventure Experiences offers a range of customer
experiences primarily based out of Cairns and Port Douglas in Tropical North Queensland, including
Great Barrier Reef snorkel and dive, white water rafting, ballooning and helicopter tours. Corporate
comprises the centralised management and business administration services provided to the Group
operations.
EBITDA is used by the Group to evaluate the performance of the business before the impact of non-cash
charges such as depreciation, amortisation, impairment, fair value gains or losses, and before the
impact of financing and income tax expenses.
The Directors review the financial performance on an Underlying EBITDA basis, that is the reported
result for each measure adjusted for the impact of significant items, being non-cash or one-off items.
Underlying EBITDA is a non AAS measure that in the opinion of the Directors is relevant to reviewing the
financial performance of the Group.
62
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3 OPERATING SEGMENTS (CONTINUED)
Intersegment transactions
Intersegment transactions are generally made on an arm’s length basis at market rates. Intersegment
transactions are eliminated on consolidation.
Intersegment receivables, payables and loans
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.
Segment assets and liabilities
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.
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.
Operating segment information
30 JUNE 2019
Revenue
Sales to external customers
Sales revenue
Other income
Total Segment revenue
EBITDA
Depreciation and amortisation
Impairment
EBIT
Finance costs
Income Tax Expense
Net profit after tax
EBITDA
Significant items
Underlying EBITDA
SKYDIVING
$000
ADVENTURE
EXPERIENCES
$000
CORPORATE
$000
TOTAL
$000
84,461
84,461
315
84,776
22,879
(5,082)
(2,230)
15,567
76,835
76,835
1,000
77,835
-
-
-
-
10,211
(8,664)
(58,262)
(56,715)
(13,825)
(204)
(2,042)
(16,071)
22,879
3,278
26,157
10,211
2,199
12,410
(13,825)
2,441
(11,384)
161,296
161,296
1,315
162,611
19,265
(13,950)
(62,534)
(57,219)
(1,613)
10,575
(48,257)
19,265
7,918
27,183
During the period the Directors have reallocated what was previously disclosed as unallocated shared
services costs in the 30 June 2018 financial statements to the relevant operating segment.
63
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3 OPERATING SEGMENTS (CONTINUED)
Significant items in the financial year ending 30 June 2019 of $7,918,000 comprised a number of one-off
items, predominately non-cash in nature. The non-cash significant items totaled $6,413,000 and
included:
Acquisitions and consolidation adjustments from prior years relating to the reconciliation of balance
sheet items, including the results of 30 June 2019 reconciliation review of assets and liabilities for
$4.8m
Initial recognition of provision in relation to onerous operating leases
Asset write-downs relate to an assessment of capitalised development costs
Share-based payments – non-cash recognition of share options expense
One-off items totaling $1,507,000, being significant items that are non-recurring in nature related to the
integration of acquisitions from the prior year and the management transition in the period.
EBITDA is a financial measure which is not prescribed by Australian Accounting Standards (“AAS”).
EBITDA represents the profit under AAS adjusted for interest, income taxes, impairment, depreciation
and amortisation. The Directors consider EBITDA to reflect the operational earnings of the Group.
Underlying EBITDA is a financial measures not prescribed by AAS and represents EBITDA adjusted for
significant items.
30 JUNE 2018
Revenue
Sales to external customers
Sales revenue
Other income
Total Segment revenue
EBITDA
Depreciation and amortisation
Impairment
EBIT
Finance costs
Income Tax Expense
Net profit after tax
EBITDA
Significant items
Underlying EBITDA
SKYDIVING
ADVENTURE
EXPERIENCES
CORPORATE
TOTAL
$000
$000
$000
$000
81,380
81,380
238
81,618
24,787
(6,171)
(1,746)
16,870
-
-
135,300
135,300
114
114
1,363
136,663
53,920
53,920
1,011
54,931
12,358
(6,952)
(9,734)
(369)
5,406
(10,103)
27,411
(13,492)
(1,746)
12,173
(1,857)
(3,531)
6,785
24,787
1,609
26,396
12,358
2,358
(9,734)
(1,206)
27,411
2,761
14,716
(10,940)
30,172
Significant items in the financial year ending 30 June 2018 principally related to business acquisition due
diligence and advisory fees, rebranding project costs and office renovation expenses.
64
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 3 OPERATING SEGMENTS (CONTINUED)
SEGMENT ASSETS
$000
$000
$000
SKYDIVING
ADVENTURE
EXPERIENCES CORPORATE
TOTAL
$000
30 June 2019
Segment assets
30 June 2018
Segment assets
Segment liabilities
30 June 2019
Segment liabilities
30 June 2018
Segment liabilities
Geographical information
30 JUNE 2019
Revenue
119,036
59,938
3,093
182,067
117,563
109,167
5,702
232,432
12,649
5,706
31,313
49,668
19,331
10,680
22,029
52,040
AUSTRALIA
NEW
ZEALAND
$000
$000
TOTAL
$000
Sales to external customers
130,269
31,02 7
161,296
30 June 2018
Revenue
Sales to external customers
Non Current Segment Assets
30 June 2019
Non Current Segment assets
30 June 2018
Non Current Segment assets
106,207 29,093
135,300
Australia New Zealand
$000
27,237
$000
132,129
Total
$000
159,366
184,149
25,721
209,870
The geographic non-current assets above are exclusive of, where applicable, financial instruments and
deferred tax assets.
65
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 4 REVENUE AND OTHER INCOME
Sales revenue
Sale of goods
Timing of revenue recognition
Goods transferred at a point in time
Services transferred over time
Other income
Interest received
Other revenue
Total revenue
Interest revenue from:
- directors (Note 29 (c))
- Other persons
Total interest revenue on financial assets not at fair value through profit or loss
NOTE 5 PROFIT FOR THE YEAR
2019
$000
2018
$000
161,296
161,296
135,300
135,300
161,296
-
135,300
-
161,296
135,300
165
1,316
1,481
135
1,228
1,363
162,777
136,663
41
124
165
73
62
135
Profit before income tax from continuing operations includes the following specific expenses:
Cost of sales
Interest expense on financial liabilities not at fair value through profit or loss:
Unrelated parties
Total interest expense
Other finance costs
Total finance cost
Occupancy costs
Depreciation and amortisation expense
Impairment of property, plant and equipment
Impairment of other financial assets
Impairment of other assets
Impairment of intangibles
Foreign currency translation gains
Employee benefits expense
Expected credit losses - trade receivables
Superannuation expense
Loss on foreign exchange
2019
$000
2018
$000
98,077
79,647
1,743
1,743
35
1,778
3,746
13,950
7,922
1,500
542
52,570
20
48,930
139
3,184
20
1,708
1,708
149
1,857
3,520
13,492
1,746
-
-
-
5
38,947
25
2,293
1
66
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 6 TAX EXPENSE
(a) The components of tax (expense) income comprise:
Current tax
Deferred tax
Over provision of tax from prior years
(b) Prima facie tax on profit from ordinary activities (at
30%)
Tax effect of permanent differences:
Non-allowable items
Non-deductible impairment
Abnormal items
Recognition of transferred tax losses
Recognition of other deferred tax balances
Deductible acquisition costs
Variance in rate
2019
$000
2018
$000
2,506
(11,964)
(1,117)
(10,575)
4,151
(172)
(448)
3,531
(17,650)
3,095
137
5,335
1,253
(139)
(132)
-
(52)
(10,575)
34
11
-
-
151
240
-
3,531
Effective tax rate
18.7%
34.2%
(c) Tax effects relating to each component of other comprehensive income:
Consolidated Group
Revaluation of property, plant and
equipment
Exchange differences on translating foreign
operations (note 25)
2019
Before-
tax
amount
$000
Tax
(expense)
benefit
$000
Net-of-
tax
amount
$000
2018
Before-
tax
amount
$000
Tax
(expense)
benefit
$000
Net-of-
tax
amount
$000
5,127
(1,538)
3,589
(1,004)
301
(703)
463
5,590
(139)
(1,677)
324
3,913
(75)
(1,079)
23
324
(52)
(755)
67
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
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
2019
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
2019
$
1,471,314
105,107
-
-
-
1,576,421
2018
$
1,963,380
99,977
-
-
-
2,063,357
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.
NOTE 8 AUDITORS REMUNERATION
Remuneration of the auditor for:
Auditing the financial report
Taxation services
Due diligence services
NOTE 9 DIVIDENDS
Dividends paid
68
2019
$
2018
$
263,730
96,572
4,000
364,302
241,000
171,516
281,953
694,469
2019
$000
2018
$000
5,558
4,349
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 9 DIVIDENDS (CONTINUED)
(a) The Directors have not declared a dividend for the financial year ended 30 June 2019. The dividend
paid in the year ending 30 June 2019 relates to the final and fully franked dividend for the 30 June 2018
period of $0.01 per share, amounting to $5,558,000, paid on 28 September 2018.
(b) Balance of franking account at year end adjusted for franking credits arising from:
Balance of franking account on 30 June 2018
Income tax return adjustment 2018
Payment of provision for income tax
Payment of fully franked dividend
Balance of franking account on 30 June 2019
2019
$000
2018
$000
11,102
594
4,075
(2,382)
13,389
4,497
3,899
4,570
(1,864)
11,102
(c) Net balance in (b) above excludes franking credits arising from tax payments made subsequent to
30 June 2019.
The above amounts represent the balance of the franking account as at the end of the financial year,
adjusted for:
franking credits that will arise from the payment of the amount of the provision for income tax at the
reporting date
franking debits that will arise from the payment of dividends recognised as a liability at the reporting
date
franking credits that will arise from the receipt of dividends recognised as receivables at the
reporting date
NOTE 10 EARNINGS PER SHARE
(a) Earnings used to calculate basic and diluted EPS
(48,257)
6,785
2019
$000
2018
$000
(b) Weighted average number of ordinary shares
outstanding during the year used in calculating basic EPS
Weighted average number of dilutive options and rights
outstanding
Weighted average number of dilutive converting
preference shares on issue
Weighted average number of ordinary shares
outstanding during the year used in calculating dilutive
EPS
Basic earnings per share (cents)
Diluted earnings per share (cents)
69
No.
No.
555,811,840
506,008,037
11,247,324
10,300,000
-
-
567,059,164
516,308,037
(8.68)
(8.68)
1.34
1.31
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 11 CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short-term bank deposits
2019
$000
4,579
224
4,803
2018
$000
7,129
42
7,171
For the purpose of statement of cashflows, cash and cash equivalents comprise the above.
The effective interest rate on short-term bank deposits was 2.3% (2018: 2.4%); these deposits have an
average maturity of 365 days.
NOTE 12 TRADE AND OTHER RECEIVABLES
CURRENT
Trade receivables
Allowance for expected credit losses (a)
Other receivables
Amounts receivable from related parties
- director of parent entity (c)
Total current trade and other receivables
NON-CURRENT
Loan receivable (b)
Amounts receivable from related parties
- director of parent entity (c)
Total non-current trade and other receivables
(a) Expected Credit Loss
2019
$000
4,539
(140)
4,399
946
5,345
300
5,645
2018
$000
5,900
(25)
5,875
2,210
8,085
300
8,385
-
515
976
976
1,288
1,803
Set out below is the information about the credit risk exposure on the Group’s trade receivables and
contract assets using a provision matrix:
30 JUNE 2019
TRADE RECEIVABLES
DAYS PAST DUE
31-60
61-90
Expected credit loss rate
Estimated total gross carrying amount at default
Expected credit loss
Current <30 days
days
days
> 91 days
Total
$000
0.10%
3,531
4
$000
$000
$000
$000
$000
0.50%
2.00%
10%
25%
1,093
5
442
9
151
15
427
107
5,645
140
70
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 12 TRADE AND OTHER RECEIVABLES (CONTINUED)
Allowance for expected credit losses
Opening balance
Unused amounts reversed
Add year end provision
Add expected credit loss
CONSOLIDATED GROUP
2018
2019
$000
$000
-
25
-
(25)
25
-
140
-
140
25
(b) Loan to Trinity Software Pty Ltd
During the year, the loan to Trinity Software Australia Pty Ltd for $500,000 plus accrued interest was
written off.
(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 29).
(d) Collateral Pledged
A floating charge over trade receivables has been provided for certain debts. Refer to Note 19 for
further details.
NOTE 13 OTHER ASSETS
CURRENT
Prepayments
Deposit paid for leasehold land and buildings (Stuart Park Development) (i)
Other current assets
2019
$000
2018
$000
1,459
-
1,711
3,170
877
541
561
1,979
(i) The capitalisation of the Stuart Park development expenses were impaired during the year as
the project is not expected to advance in the near future.
Opening balance
Increase/ (decrease) in prepayments
Impairment of capitalized costs (Stuart Park)
Increase in other current assets
Deposits paid
Closing balance
1,979
582
(541)
1,150
-
3,170
3,705
(503)
-
332
(1,555)
1,979
71
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 14 OTHER FINANCIAL ASSETS
NON-CURRENT
Unlisted investments, at cost
— shares in other corporations
— unlisted investments (i)
Total unlisted investments
Opening balance
Unlisted Investments
Impairment
Closing balance
1
-
1
27
1,533
1,560
1,560
-
(1,559)
1
38
1,522
-
1,560
(i)
Investment of $1,533,000 in Trinity Software Australia Pty Ltd impaired to nil.
NOTE 15
INTERESTS IN SUBSIDIARIES
a)
Information about Principal Subsidiaries
The subsidiaries listed below have share capital consisting solely of ordinary shares 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
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
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
72
PRINCIPAL
PLACE OF
BUSINESS
OWNERSHIP
INTEREST
2019
2018
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
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%
100%
100%
100%
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
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.
Performance Helicopters Pty Ltd
Experience Marine Pty Ltd
Experience Co NZ Holdings Limited
Skydive Queenstown Limited
Ultimate Adventure Group Ltd
Parachute Adventure Queenstown Limited
Skydive Wanaka Limited
Performance Aviation (New Zealand) Limited
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
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%
b) Significant Restrictions
Other than banking covenants imposed as per note 19, 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 2019, Experience Co Limited made no acquisitions.
In 2019 financial year, Experience Co Limited paid an amount of $1.7m to vendors of GBR Helicopters
Pty Ltd. This payment was a fulfilment of an obligation in accordance with the sale and purchase
agreement for GBR Helicopters Pty Ltd, which was acquired on 01 November 2017.
d) Business Combinations
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:
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
73
30 JUN 2019
30 JUN 2018
12 months
12 months
12 months
12 months
12 months
11.5 months
12 months
9.5 months
12 months
8 months
12 months
7 months
12 months
6.5 months
12 months
6 months
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 16 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
Helicopters:
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
2019
$000
2018
$000
3,781
3,781
3,781
3,781
4,564
(181)
4,383
8,164
5,315
(181)
5,134
8,915
12,486
(5,306)
7,180
4,608
(1,158)
3,450
46,654
-
46,654
19,369
-
19,369
7,061
(2,382)
4,679
1,754
(1,150)
604
32,007
(5,017)
26,990
2,100
(322)
1,778
11,342
(3,621)
7,721
4,434
(890)
3,544
47,003
(1,676)
45,327
17,625
(1,037)
16,588
6,403
(1,571)
4,832
1,463
(920)
543
34,506
(2,111)
32,395
1,838
(164)
1,674
Total plant and equipment
Total property, plant and equipment
110,704
112,624
118,868
121,539
The Group's aircraft assets were revalued at 30 June 2019. Refer to note 33 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.
74
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 16 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
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.
Historical Cost
If aircraft were carried at historical cost, the estimated carrying amounts would be as follows:
Cost at 30 June 18
Accumulated depreciation at 30 June 18
Net book value at 30 June 18
Cost at 30 June 19
Accumulated depreciation at 30 June 19
Net book value at 30 June 19
AIRCRAFT
HELICOPTERS
$000
$000
TOTAL
$000
61,005
(10,506)
50,499
62,361
(13,168)
49,194
17,625
(1,037)
16,588
24,197
(3,266)
20,931
78.630
(11,543)
67,087
86,558
(16,434)
70,124
The Group's aircraft were revalued at 30 June 2019 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 33 for further information.
(a) Movements in Carrying Amounts
LAND BUILDINGS
PLANT &
EQUIPMENT
LEASEHOLD
IMPROV.
AIRCRAFT HELICOPTERS
MOTOR
VEHICLES
OFFICE
EQUIPMENT
VESSELS
FLOATING
DOCKS
TOTAL
Balance at 1 July 2017
646
3,473
7,342
1,370
43,105
-
3,119
531
9,151
1,633
70,370
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
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
51
40,662
2,185
808
1,880
1,806
10,697
3,251
1,431
182
2,414
131
24,785
-
-
-
-
-
-
-
-
-
-
(3)
-
-
-
(1,746)
(2,385)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,746)
- (2,385)
-
(3)
(112)
(1,316)
(274)
(4,344)
(1,037)
(671)
(272)
(1,977)
(141) (10,144)
-
(1,043)
-
-
-
471
-
572
-
-
Balance at 30 June 2018
3,781
5,134
7,721
3,544
45,327
16,588
4,832
543
32,395
1,674 121,539
Additions
Impairment
Revaluations
Disposals
Depreciation expense
Movement in foreign exchange
Transfer between asset classes
-
-
-
-
-
-
-
80
1,145
624
2,424
7,556
625
287
2,351
194
15,286
-
(758)
-
-
-
-
-
-
1,533
-
(3,440)
1,878
(984)
(268)
(448)
(1,716)
(72)
(1,357)
(271)
(2,403)
(2,229)
(1)
-
11
(72)
-
-
-
1,489
-
-
-
-
(129)
(716)
(5)
72
-
-
(1,202)
- (5,400)
-
-
3,411
(8)
(2,103)
72 (5,584)
(218)
(2,962)
(162) (10,390)
-
-
-
(1,489)
-
-
5
-
Balance at 30 June 2019
3,781
4,383
7,180
3,450
46,654
19,369
4,679
604
26,990
1,778 118,868
75
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 17 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 and impairment losses
Net carrying amount
Leases & Licences
Cost
Accumulated amortisation
Net carrying amount
Total intangibles
2019
$000
36,659
(23,483)
13,176
14,589
(5,351)
9,238
1,909
(1,147)
762
25,220
(20,137)
5,083
12,527
(10,801)
1,726
2018
$000
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
29,986
84,968
Movements in Carrying Amounts
Movements in carrying amounts for each class of intangibles between the beginning and the end of the
current financial year.
GOODWILL
TRADEMARKS
COMPUTER
SOFTWARE
CUSTOMER
RELATIONSHIP
S AND OTHER
LEASES &
LICENCES
TOTAL
$000
$000
$000
$000
$000
$000
Balance at 1 July 2017
Assets acquired in business
combinations
Other additions
Amortisation expense
Balance at 30 June 2018
Additions from business combinations
Other additions
Impairment
Disposals
Transfers to other asset classes
Amortisation expense
Movement in foreign exchange
Closing balance 30 June 2019
18,828
17,473
-
-
9,805
4,565
-
-
36,301
14,370
185
-
-
123
(23,483)
(5,351)
-
283
-
(110)
-
60
-
36
13,176
9,238
368
-
134
(184)
318
-
591
-
(20)
-
(127)
-
762
13,025
5,933
47,959
13,257
4,928
40,223
-
-
134
(1,858)
(1,306)
(3,348)
24,424
9,555
84,968
-
694
-
-
185
1,408
(15,953)
(7,783)
(52,570)
(365)
(2,109)
(1,632)
(57)
1,766
(442)
-
(1,713)
(3,472)
24
(42)
(92)
5,083
1,726
29,986
76
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 17 INTANGIBLE ASSETS (CONTINUED)
IMPAIRMENT DISCLOSURES
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.
Following the decline in financial performance in the financial year to 30 June 2019, management has
recalculated the recoverable amount of each of the Group’s CGUs as at 30 June 2019. The recoverable
amount of each of the Group’s CGUs have been determined based on value in use calculations.
The following key assumptions were used in the value-in-use calculations for each cash generating unit.
Australia Skydive: five year projections based on management budgets with annual EBITDA growth rate
from Year 2 to 5 of 4.0% (30 June 2018: 3.0%), terminal growth rate of 3.0% (30 June 2018: 3.0%) and a
pre-tax discount rate of 15.4% (30 June 2018: 12.1%).
New Zealand Skydive: five year projections based on managements budgets with annual EBITDA
growth rate from Year 2 to 5 of 4.0% (30 June 2018: 3.0%), terminal growth rate of 3.0% (30 June 2018:
3.0%) and a pre-tax discount rate of 16.6% (30 June 2018: 12.1%)
Adventure Experiences: five year projections based on managements budgets with annual EBITDA
growth rate of 4.0% from Year 2 to 5 (30 June 2018: 3.0%), terminal growth rate of 3.0% (30 June 2018:
3.0%) and a pre-tax discount rate of 15.4% (30 June 2018: 12.1%).
The recoverable amount of the Australia Skydive and New Zealand Skydive CGUs were estimated to be
higher than the carrying amount as at 30 June 2019 and accordingly no impairment was recognised.
The Adventure Experiences CGU recoverable amount was calculated to be significantly less than the
carrying value and as a result an impairment of $52,570,000 of goodwill and other intangibles has been
recognised.
The impairment is attributable to lower than anticipated benefits from integration and softer tourism
trading conditions in the Tropical North Queensland region which has contributed to adverse impacts on
projected cashflows. The Group notes that as at the date of the calculations it has commenced a
strategic review of the Adventure Experiences segment that may lead to changes in the projected cash
flows but as no formal plans had been implemented and/or sufficiently progressed any initiatives to
improve future cash flows were not factored into the recoverable amount calculations.
The impairment charge recognised is non-cash in nature and has no impact on the Group’s compliance
with banking facility covenants.
SENSITIVITIES AND SIGNIFICANT ESTIMATES
The value-in-use calculation used in assessing the recoverable amount of the CGUs is subject to
changes in assumptions which may result in additional impairment. Any future events that result in
adverse changes in assumptions may result in impairment. To illustrate the potential impact of changes
in key assumptions presented below is a summary of sensitivity changes to each of the CGUs and the
corresponding potential impact that may arise in impairment beyond that recognised in the 30 June
2019 balances above.
In each case, all other assumptions have been held constant.
Australia Skydive
Key assumption
Sensitivity
Sensitivity impact
Discount rate
+ 100 bps
Recognition of impairment of $0.5 million
Terminal growth
-100 bps
No impairment required
77
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 17 INTANGIBLE ASSETS (CONTINUED)
New Zealand Skydive
Key assumption
Sensitivity
Sensitivity impact
Discount rate
+ 100 bps
No impairment required
Terminal growth
-100 bps
No impairment required
Adventure Experiences
Key assumption
Sensitivity
Sensitivity impact
Discount rate
+ 100 bps
Additional impairment of $4.1 million
Terminal growth
-100 bps
Additional impairment of $2.6 million
Goodwill is allocated to cash-generating units which are based on the Group’s reporting segments.
Australia Skydiving operations
New Zealand Skydiving operations
Adventure Experiences operations
Total
2019
2019
2018
2018
GOODWILL TRADEMARKS GOODWILL TRADEMARKS
$000
$000
$000
$000
4,969
8,207
-
13,176
2,122
5,156
1,960
9,238
5,938
8,207
22,156
36,301
1,963
5,156
7,252
14,370
NOTE 18 TRADE AND OTHER PAYABLES
CURRENT
Trade payables
Sundry payables and accrued expenses
2019
$000
2,657
6,996
9,653
2018
$000
4,147
5,483
9,630
78
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 19 BORROWINGS
CURRENT
Secured liabilities
Bank loans
Finance lease liabilities
Total current borrowings
NON-CURRENT
Secured liabilities
Bank loans
Finance lease liabilities
Total non-current borrowings
Total borrowings
(a) Total current and non-current secured liabilities:
Bank loan
Finance lease liabilities
(b) Collateral provided
2019
$000
2018
$000
-
2,955
2,955
263
3,042
3,305
20,000
11,198
31,198
18,004
14,226
32,230
34,153
35,535
2019
$000
20,000
14,153
34,153
2018
$000
18,267
17,268
35,535
The Group entered into a Multi Option Facility Agreement with National Australia Bank Limited (NAB) in
May 2017. The Multi Option Facility expires on 20 October 2020.
NAB has made available to the Group the following facilities:
$25,000,000 Cash Advance Facility (30 June 2018: $20,000,000)
$15,000,000 Master Asset Finance Facility (30 June 2018: $20,000,000)
$500,000 Bank Guarantee Facility
$3,000,000 Foreign Exchange & Commodity Hedging Facility
Existing NAB finance leases were transferred to the NAB Master Asset Finance Facility and existing
finance leases with Westpac Banking Corporation remained in place.
As at 30 June 2019 $20,000,000 of the Cash Advance Facility had been utilised.
79
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 19 BORROWINGS (CONTINUED)
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%. Interest on the Cash
Advance Facility 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
Trade receivables
Total financial assets pledged
NOTE 20 DEFERRED TAX ASSETS AND LIABILITIES
2019
$000
4,803
4,399
9,202
2018
$000
7,171
5,875
13,046
NON CURRENT
Consolidated Group
Deferred Tax Assets /
(Liabilities)
Property, Plant & Equipment
Intangible Assets
Provisions
Capital Raising Costs
Other
Opening
Balance
Acquired
Business
Acquisitions
Charged to
Income
Charged
Directly to
Equity
Closing
Balance
$000
(2,720)
(3,477)
608
538
89
$000
-
(53)
-
-
-
$000
642
(546)
617
(673)
132
$000
1,382
-
-
1,032
-
$000
(696)
(4,076)
1,225
897
221
Balance at June 2018
(4,962)
(53)
172
2,414
(2,429)
Deferred Tax Assets /
(Liabilities)
Property, Plant & Equipment
Intangible Assets
Provisions
Capital Raising Costs
Other
(696)
(4,076)
1,225
897
221
-
-
-
-
-
958
9,188
(60)
(64)
979
963
-
-
-
-
1,225
5,112
1,165
833
1,200
Balance at June 2019
(2,429)
-
11,001
963
9,535
80
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 21 EMPLOYEE BENEFITS
CURRENT
Employee Benefits
Opening Balance
Amounts acquired in business combinations
Additional provisions
Amounts used
Reclass Non Current to Current
Closing Balance
NON CURRENT
Employee Benefits
Opening Balance
Change of estimate of long service leave
Amounts acquired in business combinations
Additional provisions
Amounts used
Reclass Non Current to Current
Closing Balance
Analysis of Total Employee Benefits
CURRENT
NON-CURRENT
Total
2019
$000
2018
$000
2,834
-
1,998
(1,818)
19
1,490
674
1,503
(833)
-
3,033
2,834
2019
$000
2018
$000
454
(137)
-
132
(167)
(19)
263
183
-
78
197
(4)
-
454
3,033
2,834
263
-
454
-
3,296
3,288
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.
81
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 21 EMPLOYEE BENEFITS (CONTINUED)
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
1,258
1,002
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).
NOTE 22 CONTRACT LIABILITIES
Opening balance
Transfer to revenue
Payments received in advance - performance not satisfied by 30 June 19
Closing balance
NOTE 23 PROVISIONS
Opening balance
Onerous leases
Closing balance
2019
$000
2018
$000
1,158
(1,158)
1,733
1,733
891
(891)
1,158
1,158
2019
$000
2018
$000
-
833
833
-
-
-
Onerous leases comprise amounts recognised in relation to lease payments in excess of market rates.
82
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 24 ISSUED CAPITAL
555,811,840 (June 2018: 555,811,840) fully paid ordinary shares
168,860
168,860
2019
$000
2018
$000
Ordinary Shares
At the beginning of the reporting period
168,860
84,321
555,811,840
434,877,669
2019
2018
$ 000'S
$ 000'S
2019
NO.
2018
NO.
Shares issued
- 10 October 2017
- 3 November 2017
- 13 December 2017
- 14 December 2017
- 29 December 2017
- Capital raising costs (net of deferred tax)
-
-
-
-
-
-
20,001
1,000
57,056
5,000
3,889
(2,407)
-
-
-
-
-
-
30,304,000
1,515,152
77,102,361
6,756,757
5,255,901
-
168,860
168,860
555,811,840
555,811,840
a) Ordinary shares
The fully paid ordinary shares have no par value.
b) Options & Rights
For information relating to share options issued during the financial year. Refer to Note 26:
Share-based Payments.
SECURITY TYPE
GRANT DATE
EXERCISE
PRICE $
VESTING
DATE
EXPIRY DATE
NO OF
RIGHTS
Options over
shares
30 Jan 2015
0.25
Refer
below1
9 Feb 2025
10,300,000
1 Options have vested
83
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 24 ISSUED CAPITAL (CONTINUED)
SECURITY TYPE
Service Rights
over Shares
Service Rights
over Shares
Performance
Rights over
Shares
GRANT
DATE
EXERCISE
PRICE $
30 Nov 18
nil
VESTING
DATE
Refer
below1
EXPIRY DATE
NO OF
RIGHTS
Refer below1
1,120,029
4 Mar 19
nil 4 Mar 20
31 Mar 20
540,540
4 Mar 19
nil 4 Mar 20
31 Mar 20
360,360
1 Vesting is in three equal annual instalments commencing on 30 November 2019 and ending on 30
November 2021, with an expiry date 1 month after each vesting date.
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
19
11
2019
$000
34,285
(4,803)
29,482
132,399
161,881
2018
$000
35,535
(7,171)
28,364
180,392
208,756
18.2%
13.6%
84
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 25 RESERVES
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.
d) Foreign Currency Translation Reserve
The foreign currency translation reserve records exchange differences arising on translation of a
foreign controlled subsidiary.
e) Analysis of items of other comprehensive income by each class of reserve
Asset Revaluation Reserve
Opening balance
Revaluation gain/(loss) on property, plant and
equipment
Option Reserve
Opening balance
Amount recognised in income statement for the
year
Common Control Reserve
Opening balance
Amount acquired during the year
Foreign currency translation reserve
Opening balance
Exchange differences on translation of foreign
operations
2019
2018
1,382
2,386
4,669
(1,004)
6,051
1,382
18
232
250
18
-
18
(4,171)
(4,171)
-
-
(4,171)
(4,171)
(341)
463
122
(266)
(75)
(341)
Total reserves
2,252
(3,112)
85
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 26 SHARE-BASED PAYMENTS
The expense recognised for employee services received during the year is shown in the following table:
Expense arising from equity-settled share-based payment
transactions
Expense arising from cash-settled share-based payment transactions
Total expense arising from share-based payment transactions
2019
$000
2018
$000
233
-
233
-
-
-
The above table represents the portion of rights granted during FY19 for Service Rights and
Performance Rights that were expensed in the current year as per independent valuation.
A summary of the movements of all Options & Rights issued is as follows:
Balance at 1 July 2017
Balance at 1 July 2018
Granted during year
Balance at 30 June 2019
OPTIONS
OUTSTANDING
AT 1 JULY 2018
PERFORMANCE
RIGHTS
GRANTED TO
KMP
SERVICE RIGHTS
GRANTED TO
KMP & OTHER
SERVICE
RIGHTS
GRANTED TO
CHAIR
TOTAL
10,300,0001
10,300,0001
-
10,300,000
-
-
360,3602
360,360
-
-
10,300,000
-
1,120,0292
1,120,029
-
540,5402
10,300,000
2,020,929
540,540
12,320,929
Options exercisable as at 30 June
2019:
Options exercisable as at 30 June
2018:
Weighted average exercise price:
Weighted average life of the option:
Expected share price volatility:
Risk-free interest rate:
10,300,000
10,300,000
$0.25
5 Years
30%
1.36%
-
-
nil
-
-
nil
10,300,000
10,300,000
-
-
nil
0.75 Years
1.42 Years
0.75 Years
30%
1.36%
30%
1.36%
30%
1.36%
1 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.
2 Vesting conditions other than market conditions are not taken into account when estimating the fair
value and any service requirement to be rendered is presumed to be received.
The fair value at grant is based on the market price of the shares reduced by the present value of
dividends expected to be paid during the vesting period.
Refer to remuneration report on p23 for details relating to Options & Rights
86
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 26 SHARE-BASED PAYMENTS (CONTINUED)
PERFORMANCE RIGHTS GRANTED TO KMP
OPENING
BALANCE
GRANTED
DURING THE
YEAR
EXERCISED
DURING THE
YEAR
CLOSING
BALANCE
FAIR VALUE
AT GRANT
DATE $
EXERCISE
PRICE $
VESTING
DATE
DATE OF
EXPIRY
FAIR VALUE
AT GRANT
DATE PER
SHARE $
-
360,360
-
360,360
124,432
0.3453
nil 4 March
2020
30 March
2020
Details of Performance Rights granted are included on page 26 of this annual report
No Performance Rights vested during the year
SERVICE RIGHTS GRANTED TO KMP & OTHER
NON-EXECUTIVE DIRECTOR
SERVICE RIGHTS – BOARD FEES
SACRIFICED
OPENING
BALANCE
GRANTED
DURING
THE YEAR
EXERCISED
DURING THE
YEAR
CLOSING
BALANCE
FAIR VALUE
AT GRANT
DATE $
-
1,120,029
-
1,120,029
342,581
FAIR VALUE
AT GRANT
DATE PER
SHARE $
refer
below1
EXERCISE
PRICE $
VESTING
DATE
DATE OF
EXPIRY
nil
refer
below2
refer below2
NOTE
1 Fair value at grant date is $0.3403 for Tranche 1, $0.3308 for Tranche 2 and $0.3216 for
Tranche 3
2 Vesting is in three equal annual instalments commencing on 30 November 2019 and ending on
30 November 2021, with an expiry date 30 days after each vesting date
Details of Service Rights granted are provided on page 35 of this remuneration report
No Service Rights vested during the year
SERVICE RIGHTS GRANTED TO CHAIR
SERVICE RIGHTS – IN LIEU OF FIXED REMUNERATION FOR ROLE AS EXECUTIVE CHAIR OF BOARD
OPENING
BALANCE
GRANTED
DURING
THE
YEAR
EXERCISED
DURING THE
YEAR
CLOSING
BALANCE
FAIR VALUE AT
GRANT DATE $
FAIR
VALUE AT
GRANT
DATE PER
SHARE $
EXERCISE
PRICE
VESTING
DATE
DATE OF
EXPIRY
-
540,540
-
540,540
186,648
0.3453
nil
4 Mar 19
30 Mar 20
Details of Service Rights granted are provided on page 33 of this remuneration report
No Service Rights vested during the year
87
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 27 CASH FLOW INFORMATION
Reconciliation of Cash Flows from Operating
Activities with Profit after Income Tax
(Loss) / Profit after income tax
Non-cash flows in profit
Depreciation and amortisation
Impairment
One off items - Non Cash
Net gain on sale of assets
Unrealised foreign currency exchange gains/(losses)
Changes in assets and liabilities, net of the effects of
purchase:
2019
$000
2018
$000
(48,257)
6,785
13,950
13,492
62,534
1,746
4,891
(284)
20
-
-
(77)
(Increase)/decrease in trade and other receivables
3,367
(950)
(Increase)/decrease in other current assets
(Increase) in inventories
Decrease in trade and other payables
Decrease in income taxes payable
Decrease in deferred taxes payable
Increase in provisions
Cash flows from operating activities
Changes in Liabilities arising from financing activities
(608)
(253)
(1,271)
(3,800)
(11,964)
55
(453)
(1,623)
(2,158)
(2,957)
198
982
18,523
14,842
Balance at 1 July 2017
Net cash used in financing activities
Balance at 30 June 2018
Net cash from / (used in) financing activities
Balance at 30 June 2019
BANK
LOANS
$000'S
LEASE
LIABILITY
$000'S
15,224
3,043
18,267
1,733
20,000
12,196
5,072
17,268
(3,115)
14,153
VENDOR
FINANCE
LOAN
$000'S
2,204
(2,204)
-
-
-
TOTAL
$000'S
29,624
5,911
35,535
(1,382)
34,153
88
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
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
2019
$000
2018
$000
3,630
3,895
12,120
15,809
-
-
15,750
19,704
(1,597)
(2,436)
14,153
17,268
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
2019
$000
2018
$000
1,659
3,043
2,063
6,765
1,204
2,407
169
3,780
With the introduction of AASB 16 there has been additional work done around classification of operating
lease commitments. During this process 19 leases have been identified in the current year that should
have been included in the prior year operating leases note. The 2018 comparative balance have been
updated to reflect this. In addition, there have also been six new leases in the current year.
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 2018 or 30 June 2019
89
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 29 RELATED PARTY TRANSACTIONS
RELATED PARTIES
a) The Group’s main related parties are as follows:
i.
ii.
iii.
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:
Persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including directors ( executive and non-
executive) of that entity. 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.
b) Transactions with related parties:
Transactions between related parties are on normal commercial terms and conditions no more
favourable than those available to other parties unless otherwise stated. The following transactions
occurred with related parties:
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
2019
$
2018
$
Total lease payments for the above properties (i)
692,458
452,661
(i) The total lease payments in the financial year ended 30 June 2019 was higher than the prior year
due to review of historical lease payments which identified certain shortfalls in rent from the 1 July
2015 to 30 September 2018 period. This resulted in a one-off retrospective adjustment of $222,798
in the financial year ended 30 June 2019
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.
90
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 29 RELATED PARTY TRANSACTIONS (CONTINUED)
Total fees paid for the above
76,199
76,199
Property lease payments to Celeste Ritter, being a related party to Anthony Ritter (former Chief
Executive Officer), for the property located at 3/15 Melbourne Street, Queenstown, NZ
2019
2018
$
$
Total fees paid for the above
c) Amounts outstanding from related parties
2019
$
2018
$
48,000
72,000
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
Total Interest Adjustments during the year
Loans Advanced for the period
Cash Repayments for the period
Other Repayments for the period
Interest charged
End of year
2019
$
2018
$
1,587,618
1,453,126
(50,401)
0
153,448
361,000
(135,000)
(300,000)
(320,981)
0
41,010
73,492
1,275,694
1,587,618
The outstanding related party loan balance as at 30 June 2019 comprises two unsecured loans to
Boucaut Enterprises Pty Limited as trustee for Boucaut Family Trust (‘the Borrower’), related entity,
associated with Anthony Boucaut (Executive Director). The first loan (‘First Loan Agreement’) of
$1,200,000 was entered into on 17 February 2015 and expires on 28 February 2021. The second loan
(‘Second Loan Agreement’) of $840,000 and expires on 30 June 2023. As at 30 June 2019 these loans
bear interest at a rate of 3.25% (30 June 2018: 3.50%), being 2% per annum over the Reserve Bank of
Australia’s cash rate at the time.
Under the terms of 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 lessor amount as represents
the then total amount of the Principal and accrued interest outstanding) on the anniversary of 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 the two loans shall terminate.
During the financial year ended 30 June 2019 there was a further loan agreement (‘Third Loan
Agreement’) with the Borrower for the amount of $450,000. This amount was repaid during the period.
91
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 30 EVENTS AFTER THE REPORTING PERIOD
No matters or circumstances has arisen since 30 June 2019 that has significantly affected, or may
significantly affect the Group 's operations, the results of those operations, or the Group 's state of
affairs in future financial years.
NOTE 31 CONTINGENT LIABILITIES AND CONTINGENT ASSETS
The Group has no contingent assets or contingent liabilities at 30 June 2019.
NOTE 32 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: Financial
Instruments: Recognition and Measurement 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)
Other financial assets
at fair value
- shares in other corporations (Note 14)
- unlisted investments (Note 14)
Total other financial assets
Total Financial Assets
Financial Liabilities
Financial liabilities at amortised cost
- Trade and other payables (Note 18)
- Borrowings (Note 19)
Total Financial Liabilities
2019
$000
4,803
6,621
-
1
-
1
11,425
2018
$000
7,171
10,188
27
1,533
1,560
18,919
9,653
34,153
43,806
9,630
35,535
45,165
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
The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and
market risk consisting of interest rate risk and foreign currency risk. There have been no substantive
changes in the types of risks the Group is exposed to, how these risks arise, or the Board’s objectives,
policies and processes for managing or measuring the risks from the previous period.
92
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 32 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
AA- Rated
Held-to-maturity securities
AA- Rated
b) Liquidity risk
2019
$000
2018
$000
4,579
7,129
224
4,803
42
7,171
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
93
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 32 FINANCIAL RISK MANAGEMENT (CONTINUED)
The following table details the Group'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
WITHIN 1 YEAR
1 TO 5 YEARS
OVER 5
YEARS
TOTAL
2019
$000
2018
$000
2019
$000
2018
$000
2019
$000
2018
$000
2019
$000
2018
$000
Financial liabilities due for payment
Bank loans
-
263
20,132
18,004
Trade and other payables
9,21
9,630
-
-
Finance lease liabilities
Total expected outflows
2,955
3,042
11,198
14,226
12,476
12,935
31,330
32,230
-
-
-
-
-
-
-
-
20,132
18,267
9,521
9,630
14,153
17,268
43,806
45,165
WITHIN 1 YEAR
1 TO 5 YEARS
OVER 5
YEARS
TOTAL
2019
$000
2018
$000
2019
$000
2018
$000
2019
$000
2018
$000
2019
$000
2018
$000
Financial Assets - cash flows realisable
Cash and cash equivalents
4,803
7,171
Trade and other receivables
Amounts receivable from related
parties
Other financial assets
Total anticipated inflows
Net (outflow) / inflow on financial
instruments
5,345
8,085
-
-
-
-
300
1
10,449
300
1,560
17,116
976
1,288
976
1,288
(2,027)
4,181
(30,354)
(30,942)
-
-
-
-
-
-
-
-
-
4,803
7,171
5,345
8,085
1,276
1
11,425
1,588
1,560
18,404
-
(32,381)
(26,761)
Financial assets pledges 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 19 for
further details.
c) Market Risk
i.
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 2019
approximately 41% (2018: 45%) of group debt is fixed.
94
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 32 FINANCIAL RISK MANAGEMENT (CONTINUED)
ii.
Foreign exchange risk
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial
instrument fluctuating due to movement in foreign exchange rates of currencies in which the
Group holds financial instruments which are other than the AUD functional currency of the
Group.
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 2019
+/- 2% in interest rates
Year ended 30 June 2018
+/- 2% in interest rates
PROFIT
$000
380
177
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 33
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.
95
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 32 FINANCIAL RISK MANAGEMENT (CONTINUED)
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:
- share in other corporations
- unlisted investments
Total other financial assets
Total financial assets
Financial liabilities
Trade and other payables
Finance lease liabilities
Bank debt
Total financial liabilities
2019
2018
NOTE
CARRYING
AMOUNT
FAIR
VALUE
CARRYING
AMOUNT
FAIR
VALUE
$000
$000
$000
$000
11
4,803
4,803
7,171
7,171
12
12
12
14
14
18
28
19
1,276
1,276
1,588
1,588
5,345
5,345
8,600
8,600
6,621
6,621
10,188
10,188
1
-
-
1
-
-
27
27
1,533
1,533
1,560
1,560
11,425
11,425
18,919
18,919
9,653
9,653
9,630
9,630
14,153
14,153
17,268
17,268
20,000
20,000
18,267
18,267
43,806
43,806
45,166
45,166
NOTE 33 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
LEVEL 2
LEVEL 3
Measurements based on
quoted prices
(unadjusted) in active markets
for indentical assets or
liabilities that the entity can
access at the measurement
date
Measurements bas on inputs
other than quoted prices
included in Level 1 that are
observable for the asset or
liability, either directly or
indirectly
Measurements based on
unobservable inputs for the
asset or liability
96
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 33 FAIR VALUE MEASUREMENTS (CONTINUED)
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
Helicopters
2019
LEVEL 1
LEVEL 2
LEVEL 3
TOTAL
NOTE
$000
$000
$000
$000
14
-
-
1
1
16
16
46,654
46,654
19,369
19,369
Total non-financial assets recognised at fair value on a non-recurring
basis
-
-
66,024 66,024
97
DESCRIPTION
Financial and Non-
financial assets
Unlisted
investments
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 33 FAIR VALUE MEASUREMENTS (CONTINUED)
FINANCIAL ASSETS
Unlisted investments
Recurring fair value measurements
Non-financial assets
Aircraft
2018
LEVEL 1
LEVEL 2
LEVEL 3
TOTAL
NOTE
$000
$000
$000
$000
14
-
-
1
1
16
45,327
45,327
Total non-financial assets recognised at fair value on a non-recurring
basis
-
-
63,448 63,448
b) Valuation techniques and inputs used to measure Level 3 fair values
FAIR VALUE ($)
AT 30 JUNE
2019
VALUATION TECHNIQUE(S)
INPUTS USED
1
Cost approach
Aircraft
46,654
Helicopters
19,369
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 or
helicopter frame, engines and
other key components,
maintenance status, damage
history
The fair value of aircraft equipment and helicopter equipment is expected to be determined at least
every two years based on valuations by an independent valuer, with the last revaluation being 30 June
2019. 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.
98
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 33 FAIR VALUE MEASUREMENTS (CONTINUED)
Level 3 assets and liabilities
Movements in level 3 assets and liabilities during the current and previous financial year are set out
below:
AIRCRAFT HELICOPTERS
UNLISTED
INVESTMENTS
TOTAL
$000
$000
$000
$000
Balance at 1 July 2017
Additions
43,105
-
-
43,105
10,697
17,625
1,533
29,855
Loss recognised in profit or loss
(1,746)
-
-
(1,746)
Depreciation expense
Balance at 30 June 2018
(6,729)
(1,037)
(7,766)
45,327
16,588
1,533
63,448
Additions
Disposals
2,424
7,556
-
9,980
(1,716)
(984)
-
(2,701)
Gain recognised in other comprehensive income
1,533
1,878
-
3,411
Loss recognised in profit or loss
-
(3,440)
(1,532)
(4,972)
Depreciation Expense
(2,403)
(2,229)
-
(4,632)
Transfer between Asset Classes
1,489
-
-
1,489
Balance at 30 June 2019
46,654
19,369
1
66,024
99
EXPERIENCE CO LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
NOTE 34 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
2019
$000
2018
$000
7,745
7,024
140,676
154,827
148,421
161,851
2,110
1,805
25,145
20,190
27,254
21,995
167,828
167,828
(47,003)
(28,081)
342
109
121,167
139,856
(10,012)
(6,932)
(10,012)
(6,932)
The Parent entity has entered into financial guarantees with NAB as disclosed at Note 19.
CONTINGENT LIABILITIES
The Parent entity had no contingent liabilities as at 30 June 2018 or 30 June 2019.
CONTRACTUAL COMMITMENTS
The Parent entity had no contractual commitments as at 30 June 2018 or 30 June 2019.
SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note
1, except for the following:
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and
its receipt may be an indicator of an impairment of the investment
100
EXPERIENCE CO LIMITED
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 Group; and
Comply with Australian Accounting Standards, including the Interpretations and Corporations
Regulations 2011.
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 2011;
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:
________________________
Kerry Robert (Bob) East
Chairman
Dated: 30 September 2019
101
EXPERIENCE CO LIMITED
INDEPENDENT AUDITOR’S REPORT
102
EXPERIENCE CO LIMITED
INDEPENDENT AUDITOR’S REPORT
103
EXPERIENCE CO LIMITED
INDEPENDENT AUDITOR’S REPORT
104
EXPERIENCE CO LIMITED
INDEPENDENT AUDITOR’S REPORT
105
EXPERIENCE CO LIMITED
INDEPENDENT AUDITOR’S REPORT
106
EXPERIENCE CO LIMITED
INDEPENDENT AUDITOR’S REPORT
107
EXPERIENCE CO LIMITED
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
The following information is current as at 12 September 2019.
1. Shareholding
a) Distribution of Shareholders
CATEGORY (SIZE OF HOLDING)
NUMBER ORDINARY
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,000 - and over
188
632
325
559
84
1,788
b) Shareholdings in less than marketable parcels
The number of shareholdings held in less than marketable parcels is 73.
c) Substantial shareholders
The names of the substantial shareholders listed in the holding company’s register are:
SHAREHOLDER
NUMBER OF
ORDINARY FULLY
PAID SHARES HELD
% HELD OF
ISSUED
ORDINARY
CAPITAL
BOUCAUT ENTERPRISES PTY LTD AND RELATED ENTITIES
180,388,044
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
NATIONAL NOMINEES LIMITED
UBS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
161,297,666
52,570,823
39,810,182
18,896,979
32.45%
29.02%
9.45%
7.16%
5.85%
d) Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary shares
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy,
is entitled to one vote, and upon a poll each share is entitled to one vote.
108
EXPERIENCE CO LIMITED
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
e) 20 Largest Shareholders – Ordinary Shares
NAME
BOUCAUT ENTERPRISES PTY LTD AND RELATED
ENTITIES
J P MORGAN NOMINEES AUSTRALIA PTY LTD
NATIONAL NOMINEES LIMITED
UBS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES
CITICORP NOMINEES PTY LIMITED
AUST EXECUTOR TRUSTEES LTD
MS ARIANE RADFORD
MIRRABOOKA INVESTMENTS LIMITED
MRS JOSEPHINE MARY WALLACE
MR JAMES DARROCH WALLACE
WHITFIELD INVESTMENTS PTY LTD
SARGON CT PTY LTD
MR CRAIG GRAEME CHAPMAN
MS CELESTE LINDA RITTER
MR WARWICK IAN PROWSE
MR KERRY ROBERT EAST
RADROB PTY LTD
RYMILL HOLDINGS PTY LTD
DAVIES WALLACE PTY LTD
NUMBER OF ORDINARY
FULLY PAID SHARES
HELD
% HELD OF
ISSUED
ORDINARY
CAPITAL
180,388,044
161,297,666
52,570,823
39,810,182
32,547,177
18,896,979
11,417,164
6,227,940
4,200,000
3,040,541
3,040,540
1,800,545
1,554,090
1,514,348
1,000,000
900,000
700,000
696,086
680,000
675,676
32.45%
29.02%
9.45%
7.16%
5.85%
3.40%
2.05%
1.12%
0.75%
0.54%
0.54%
0.32%
0.28%
0.27%
0.18%
0.16%
0.12%
0.12%
0.12%
0.12%
Total Securities of Top 20 Holdings
522,957,801
94.09%
2. The Company Secretary is Fiona Van Wyk
3. The address of the principle office in Australia is:
1/51 Montague Street, Wollongong NSW 2500.
Telephone 1300 663 634
4. 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.
109
EXPERIENCE CO LIMITED
CORPORATE DIRECTORY
Directors:
Kerry (Bob) East
John Diddams
Colin Hughes
Anthony Boucaut
John O’Sullivan
Company Secretary:
Fiona van Wyk
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 22, MLC Centre, 19 Martin Place, 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
110