Nearmap
Annual Report 2017

Plain-text annual report

2 ERNUL NOS NOSTIA QUID Captured: 20/08/2013 Widgiemooltha WA Australia ABN 37 083 702 907 ERNUL NOS NOSTIA QUID 3 CONTENTS Chairman’s Letter CEO’s Report Directors’ Report Auditor’s Declaration Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements Directors’ Declaration Independent Auditor’s Report Shareholder Information Corporate Information 6 9 26 52 57 58 59 60 61 91 94 100 102 4 ERNUL NOS NOSTIA QUID Captured: 28/08/2016 Chadstone Shopping Centre, Melbourne VIC CONTENTS 5 CHAIRMAN’S LETTER MR PETER JAMES NON-EXECUTIVE CHAIRMAN Dear Shareholders It is a pleasure to present the Nearmap 2017 Annual Report. The 2017 financial year has been a year of significant progress for Nearmap, with a broader suite of market-leading products, an accelerating subscription base in the US and continued growth in Australia. Importantly we have put in place the building blocks to enable further sustainable growth, both in Australia and the US. This year marked the expansion of Nearmap’s product suite beyond traditional 2D imagery. With our development of proprietary, market-leading imaging technologies, we are now generating oblique imagery in our two key markets and deploying these to our customers. This brings to oblique imagery the same disruptive business model which Nearmap has already brought to 2D – incorporating all the elements of the value chain, including the camera systems, imagery capture, imagery processing software and content delivery. This capability puts Nearmap at the forefront of the global location content market. The combination of 2D and oblique imagery enables the delivery of richer content, including 3D. This addresses an increased set of use cases, significantly expanding the addressable market which we can serve. In FY17, our United States business has entered the growth stage of its development. The US business generated revenue of $4.3M in FY17 with accelerating growth in its subscription portfolio. Together with a strong operational base encompassing sales, marketing and survey operations, the US business is well positioned to take advantage of the growth opportunity which our expanded product suite brings. The Australian business demonstrated continued growth in FY17 with revenue (of $36.3M) up 22% and gross profit (of $32.8M) up 22% from the prior year. The continuing investment in strategic sales and marketing leadership has maintained this growth. With our continuing high retention rates, we look forward to the increased value our expanded product suite will bring to both our existing as well as new customers. Our balance sheet remains strong with no debt and a healthy cash balance of $28.3M as at year end. Our Australian business has continued to organically fund the US business as it scales, with the proceeds of our capital raising in FY17 deployed to accelerate the growth opportunities in our technology and both key markets. Our CEO Rob Newman has significantly strengthened his team with the addition of several new Executives in Australia, including CFO, Head of Sales, Head of Marketing, and Head of People and Culture. We have also continued to hire key personnel in the US, particularly in sales. At the Board level, we have appointed an additional Non-Executive Director, Sue Klose, who has significant experience in the digital Software as a Service space, both in the US and in Australia. We have spent time to better understand our Investor Relations activities and have significantly upgraded our communications to our valued investors, both retail and institutional alike. We have also taken on board feedback from the market and revised our Remuneration strategy across the Company – for Directors, Executives and staff alike. Details of these changes are outlined elsewhere in this report. Details on our performance for the year, including the CEO’s report and full set of financial results, can be found in the sections following and I encourage you to read them. In conclusion, I would like to thank our CEO, Rob Newman, together with his executive team of Andy Watt, Leah Rankin, Sue Steel, Shane Preston and Patrick Quigley and congratulate them on their success. We enter the new financial year confident that Nearmap is well positioned for continued growth. I would also like to thank my fellow Directors and our staff for their invaluable contributions to Nearmap in what has been a transformational year. I look forward to another exciting year ahead. PETER JAMES Chairman Sydney 12 October 2017 6 CHAIRMAN’S LETTER Captured: 24/06/2017 Seattle, WA, US CEO’S REPORT I am pleased to report that the 2017 financial year has been one of significant progress for Nearmap. The team at Nearmap has delivered on all its objectives for the year. Our investment in HyperCamera2 technology is now in production. Our US team and business is in its growth phase. And our Australian business continues to grow with strong operational and financial performance. Nearmap is positioned for continued growth as it disrupts the global location content market. First and foremost, the advances in our product and technology have taken us from a one product company to a multiple product company. Our high efficiency capture system is now deployed and delivering oblique imagery to our customers. This brings new use cases for our product and growth opportunities for the company, such as digital surface models, visualisations for virtual reality, point clouds and measurable obliques. The foundations established in the US in previous years have seen our US operations enter the next stage. The disruptive value of the product we deliver has been increasingly recognised in that important market, particularly by larger enterprise customers. Local leadership has delivered improved sales and marketing productivity, and we delivered oblique imagery and 3D products to our first US trial customers, setting us up for stronger growth in the US market. The Australian operations continue to demonstrate the success and value of our business model. Our portfolio continues to grow on all important metrics, such as revenue, annualised contract value (ACV), customer retention, customer numbers and free cash flow. We also strengthened our sales and marketing leadership, as oblique imagery and 3D products provide market expansion opportunities. Captured: 15/07/2017 Alice Springs Airport CEO’S REPORT 9 A FOCUS ON ACHIEVEMENT. These strong achievements can only occur when enabled by an effective underlying business organisation. The Nearmap team now consists of over 160 employees in two countries dedicated to achieving our objectives and positioning us for the growth opportunity ahead. I would like to take this opportunity to thank them for their efforts. I would also like to thank my Executive team for the leadership and guidance they have provided this year. We have continued to strengthen the executive team with key hires and have a team with the skill set which can support scalable growth. We also maintain our focus on growing the value for our shareholders. Nearmap has a strong balance sheet following our capital raise during the 2017 financial year. Operating leverage is highlighted in our cash-generative business model and we maintained disciplined cost management focussed on investment in capabilities which will continue to deliver top line growth. totas molorpossent omnihit hiciis eum sanihitatus, con conetur re dit qui ium simossit, coreped quundant que volum es est, nulpa sume re velia volendisinto tent moluptatem fugit delicaborpor recte et vero doluptatem fugiate ctoriat ventiis dis quis quaspietur sitat laces eum faceri aut re adiciis que quis plandam, veriberovid que lab ipsanimagnia ant, cusda dolore delit latem qui qui consed et quod quae is etum fuga. Ectur rendi ullam erum fuga. Oresende reratia corroris alibus, con con conet, sitae peri offic to est que sequi cum se vollation cuptaerferum cum veritate parupis ium quidebis ut rem et est, cus quam fuga. Ibus nis autem faceperatur sequam et audae nate ex earciatem rem neste eum nonsequ undene volorum facerunt quat fugit voluptatium volupta que cus doloren duciliquo quiam, ommosant pediasita que liquatem quundit a corem. Itas atium ut ut pa doloratquia cus, con prae quibus ullitio maxim dolore estis moluptae neturec tatemolum ab ipsum lam eria ilibus. A FOCUS ON ACHIEVEMENT. Exerum debissin placearupid magnimo luptatur? Qui cus rem quate es eaturessi coruptam ex est por alibus dessitame pa vid erehenimod et omnisciam velest lacero velest opta corrumquos eos cuption nimi, volorep uditas a illacerspe periae que cuptatus est, solut rempers pellacculla dolo volupis quatur rerferestet vella est ulparum, ium ulparum atem qui tempore volesectem etur rerum fuga. Magnatem aut ratur sequam et omnimolum quate nosantiam, etur sintemporum dolorro magnia doluptas illat ma vollore, ullor as rem re idus nonsere ritiae simi. A voluptatus anditis dem et vellat et iunt audam, ipidis nosto ea dipsandae vel ero ipitisquis simo minus nescias pelest que volum ipic tem nullitem coribus velibus andignam nobist, eicatio quat recus, te cone nonem ut quature sequiatus, qui natias et velendaes aut fugiae erenia dis eos ipis il ipsa qui diost qui cumquisita ped eicimenit ma volorro vita estrum liqui qui volecuptaere num intis eum utem explacc atatet, quatet alibea voluptatusam sim nus, od molessi nusandi consendae mo est, odis is ea nonsectia quias acessuntust laborror aut harchic atuscienis et undam dit litat int vendis aut quatur sitatur? Voloria netur, eatiis duciis voluptae voluptatium ium doluptatur aliti voluptatiam volupis coresequasim quature eum corisque inveliaepra ni sitatur secum aditatet ommo dolupitatur rent magnisi nusandi taturiat quatiat dolorupiet iur, omnimagnatur sitatet am que pra es ut am lautasp erorem restore sunt parum nobiscillam vitecup tiatem. Sam ipsanda ndendit atiorro doleniaes dolupta spelenimus. Iquaturem diciam dolorro quiam vel int lantota andae erumquam earum nime soluptasse corepel inctemos aut unt dolorrum fugias elit eos eum eiur magnat. Borum quo doluptaest ea inis magni doluptas nis es dolorio reniendia audaeped mi, quatium, utem at exeribust alitiunt volum aturere pudandisciis evenimp oriberciunt quas nis alis escider iatur, ut vendae il exces re voluptatum sunte porum et fugitat quidunt isquae nulpa estiorerat. Cus vendissi sitas sequis eatinve nihiliquis a porroreicia pe providu ciento eic totaqui comniet et lam nus inciundae re non eos descimpore, non et laborrum elecerovit apidundus. Aque incia simporibus, nima cuptae pere adia dolorernat pos doluptatur sa cori audae lanis maximin ctiatquam, se prehentet, inim quis ma voles de milluptate si volest, omnis dolorpo stemporeicim eaquo min re niaesequas velecto renduci dolorerio. Otatur? Busae doluptatiunt a consed experibust quam veliquias dolorem fugitate eicipsusania qui dunduntia quo omnistiatet alit, cusdand anistia peri dio bero est, nossunt emporer feriosam a voloreptas nos int etur? Ritatiam eum ium ut es et quidign imolorum fugita dis sae doles et voluptu scidun d antumquam, solupta tectem fugit auda voluptatur? Quibus demqui sequo veratur, con peri ipsa solo exerum, is ere, omnisin re dolo id quam voloraturi temquam, aceribus iuscium alistiusae es pro eum et, voluptaspit ea que conseque laci volorem el magnis modi sin enihili taturep erisquis eum quoditias et lantiae si rere pro volor aut voles molupiducit, cupturepudis ventiant. Velique pero omnimilignis voluptae sit aut quidis volestio que pera num, quissunt velestiam dollorum aliqui velles simus accus vollumquidus et volestion natur, iuscia di omnihit aborit eum et est ipis reperum et porepero et earcia dolorat eiuntia sinciis nis mod et estiorro cumqui officim quiatem re coreptate nectend eseque sed utem fuga. Et fuga. Omnit odi aut quassedicae vid quas excepudae numet facere liquiam endendus que odis vid quia impe exernam volupta doloreius. Udi blatiatioria volorem quia nonesti aliqui cuptas cum hil maximporum in nonsed que placeperum que molesed ma versper umendanimpor simusandiost as iust, que maio. Ciis ea dollore persperci quatemperiam lantissim facest everum hiliquod maximin velendit aut quam aligendiatia nimolestiam, 10 CEO’S REPORT Captured: 30/05/2017 Sun City, AZ, USA EXPANDED PRODUCT SUITE DRIVES NEW GROWTH OPPORTUNITIES. • Next generation HyperCamera2 systems manufactured, making oblique imagery available to customers • Delivery commenced of higher value 3D products from oblique imagery • Captured and published oblique content from 12 major US cities – from a target of 50% US population coverage and the six major metropolitan cities in Australia • Increased capture frequency and footprint in Australia and the US in response to customer demand • Enhanced product delivery platforms, improving the customer experience and providing a scalable platform for growth Captured: 04/03/2017 Hoover Dam, AZ, USA CEO’S REPORT 13 US ENTERED THE GROWTH STAGE. • Experienced local sales and marketing leadership generated increased productivity • ACV (Annualised Contract Value) portfolio more than tripled to US$5.3M, from a combination of upsell to existing customers and addition of new customers, including wins from our competitors • Diversified customer portfolio, with growth in subscription numbers and average revenue per subscription reflecting focus on larger enterprise customers • First trial sales of oblique and 3D imagery in advance of broader customer launch • Broadened distribution channel with addition of several partners who add value to our products in specific industry verticals 14 CEO’S REPORT Captured: 09/05/2017 Delray Beach, FL CONTINUED AUSTRALIAN GROWTH. • ACV portfolio grew 16% to $40.0M both through addition of new subscriptions and upsell to existing subscriptions • Growth in subscribers and average revenue per subscription • Diversified customer portfolio across a range of industries, use cases and subscription sizes, demonstrating the range of application of Nearmap’s content and the lack of reliance on any one economic sector • Customer retention increased as our products increasingly are part of our customers’ workflows • Strengthened sales and marketing leadership to bring increased focus and sophistication to our go-to-market strategy Captured: 16/01/2017 Sylåvania Waters NSW CEO’S REPORT 17 AN INVESTMENT IN PEOPLE, BUILDING A SKILL SET TO SUPPORT GROWTH. • Team of over 160 in Australia and the US, with world class experience in cloud based subscription businesses and geospatial technology • Increased sophistication and enhancement of Nearmap’s skill set, whether in sales and marketing, product and technology, or in our operations • Executive and senior management team strengthened to enable operational scalability and continued growth • Nearmap’s core values embedded across the organisation – We Own It, Work It, Tell It, Love It and Risk It NEARMAP SYDNEY OFFICE 18 CEO’S REPORT CEO’S REPORT 19 NEARMAP TYSONS OFFICE NEARMAP SALT LAKE CITY OFFICE 20 CEO’S REPORT CEO’S REPORT 21 NEARMAP EXECUTIVE TEAM CLOCKWISE FROM TOP LEFT DR ROB NEWMAN MR ANDY WATT MR PATRICK QUIGLEY MR SHANE PRESTON MS SUE STEEL MS LEAH RANKIN 22 CEO’S REPORT CEO’S REPORT 23 IN SUMMARY. The 2017 financial year demonstrates strong progress by Nearmap in the global location content market. Our business model has provided us with a leadership position in Australia and our disruption of the US market has entered the next stage. Our 2D product has already disrupted a growing market. Expanding our product set with oblique imagery now increases our strength in the Australian and US markets, with the opportunity for Nearmap to take a leadership position again through our unique subscription platform. Our 3D products created at the scale we are able to provide, and accessed through our subscription platform, will effectively see us create a new market in both the United States and Australia. Looking forward, we see continued innovation and increased value of our content with complementary data analytics. This will increase adoption by our business customers and further expand our overall market opportunity. ROB NEWMAN Managing Director & CEO Sydney 12 October 2017 24 CEO’S REPORT Captured: 31/07/2017 New York, NY DIRECTORS’ REPORT. NEARMAP BOARD OF DIRECTORS FROM LEFT TO RIGHT MR IAN MORRIS MS SUE KLOSE MR CLIFF ROSENBERG MR PETER JAMES MR ROSS NORGARD DR ROB NEWMAN 26 BOARD OF DIRECTORS Captured: 17/07/2017 Anaheim, CA, US DIRECTORS’ REPORT. DIRECTORS’ REPORT. MR PETER JAMES, BA, FAICD NON-EXECUTIVE CHAIRMAN Peter has extensive experience as Chair, Non-executive Director and Chief Executive Officer across a range of publicly listed and private companies particularly in emerging technologies and e-commerce. He recently completed 12 years as a Non Executive Director of ASX listed iiNet, chairing iiNet’s Strategy and Innovation Committee. iiNet was recently acquired by TPG Telecom for $1.56b. Peter is a successful investor in a number of Digital Media and Technology businesses in Australia and the US and travels extensively in reviewing innovation and consumer trends in the US and also Asia. Peter is an experienced and successful business leader with significant strategic and operational expertise. He is a Fellow of the Australian Institute of Company Directors and brings a strong record of corporate governance and stakeholder communication as well as over 20 years ASX listed Chairman/ NED and CEO experience. He holds a BA degree with Majors in Business and Computer Science and is a Member of the Australian Computer Society. CURRENT ASX LISTED COMPANY DIRECTORSHIPS: Nearmap Ltd (Since 21 December 2015) - Chairman Macquarie Telecom Ltd (ASX : MAQ) - Chairman Droneshield Limited (ASX: DRO) - Chairman Dreamscape Networks Limited (ASX: DN8) - Chairman UUV Aquabotix Ltd (ASX: UUV) - Chairman FORMER ASX LISTED COMPANY DIRECTORSHIPS IN THE LAST 3 YEARS: iiNet Limited (ASX: IIN – de-listed August 2015) SPECIAL DUTIES: Chair of the Audit and Risk Management Committee Member of the Nomination and Remuneration Committee DR ROB NEWMAN, B.ENG(1ST HONS), PH.D. CEO & MANAGING DIRECTOR Rob was appointed as CEO & Managing Director of Nearmap in October 2015, after having been a Non-executive Director of Nearmap (formerly Ipernica Limited) for almost 5 years. He established a unique track record as a successful Australian high technology entrepreneur in both Australia and the Silicon Valley. He has twice founded and built businesses based on Australian technology, both times successfully entering overseas markets. These businesses combined have established market values of over $200M. Rob is a trained engineer but has spent his career in marketing, business development and general management in Information Technology focusing on communications. Rob also spent ten years of his career as a venture capitalist co-founding Stone Ridge Ventures, and was previously an investment director for Foundation Capital. As a venture capitalist, Rob has extensive experience in identifying and helping grow companies with significant commercial potential, especially those addressing overseas markets. In the 1980s, Rob was the inventor and co-founder of QPSX Communications Pty Ltd. After founding the company, Rob provided the technical leadership and product strategy. Rob was instrumental in establishing QPSX as a worldwide standard for Metropolitan Area Networks and the company successfully sold products to telecommunication carriers in Australia, Europe, Asia and the US. Rob has been recognised with a number of awards including the Bicentennial BHP Pursuit of Excellence Award (Youth Category) and Western Australian Young Achiever of the Year 1987. CURRENT ASX LISTED COMPANY DIRECTORSHIPS: Nearmap Ltd (since 17 February 2011) - CEO & Managing Director Pointerra Limited (ASX: 3DP) - Non-executive Director FORMER ASX LISTED COMPANY DIRECTORSHIPS IN THE LAST 3 YEARS: None FROM TOP TO BOTTOM MR PETER JAMES DR ROB NEWMAN Your Directors submit their report on the consolidated entity consisting of Nearmap Ltd and the entities it controlled at the end of, or during, the year ended 30 June 2017. DIRECTORS The names and details of the Company’s Directors in office during the financial year and until the date of this report are as follows. Directors were in office for the entire year unless otherwise stated. NAMES, QUALIFICATIONS, EXPERIENCE, DIRECTORSHIPS AND SPECIAL RESPONSIBILITIES MR ROSS NORGARD, FCA NON-EXECUTIVE DIRECTOR In 1987, Ross became the founding Chairman of Nearmap Ltd. He held this role until 18 March 2016, at which point he moved into a non-executive role. Ross is a Fellow of the Institute of Chartered Accountants and former managing partner of Arthur Andersen and KMG Hungerfords and its successor firms in Perth, Western Australia. For over 30 years he has worked extensively in the fields of raising venture capital and the financial reorganisation of businesses. He has held numerous positions on industry committees including past Chairman of the Western Australian Professional Standards Committee of the Institute of Chartered Accountants, a former member of the National Disciplinary Committee, former Chairman of the Friends of the Duke of Edinburgh’s Award Scheme and a former member of the University of WA’s Graduate School of Management (MBA Program). Ross is also Western Australia’s Honorary Consul-General to Finland. Ross was the founding Chairman of Brockman Resources Ltd, and is now Non- executive Director of ASX and Hong Kong listed Brockman Mining Ltd. CURRENT ASX LISTED COMPANY DIRECTORSHIPS: Nearmap Ltd (since 1987) - Non-executive Director Brockman Mining Ltd (ASX: BCK) - Non-executive Director FORMER ASX LISTED COMPANY DIRECTORSHIPS IN THE LAST 3 YEARS: Ammtec Ltd (ASX: AEC) (acquired by ALS Limited in November 2010) SPECIAL DUTIES: Member of the Nomination and Remuneration Committee Member of the Audit and Risk Management Committee MR IAN MORRIS, MBA NON-EXECUTIVE DIRECTOR Ian has enjoyed a successful business career in the US technology sector. He brings this extensive and complementary experience to Nearmap at a time when the Company is accelerating its growth in the US. Ian served as the President and CEO of Market Leader for more than a decade, establishing the company as the leading provider of “Software-as-a-Service” solutions to the real estate industry. Under his leadership, Market Leader was ranked the 4th fastest growing technology company in North America, leading to a successful IPO in 2004 and the sale of the company to Trulia in 2013 for US$380M. Before joining Market Leader, Ian spent seven years at Microsoft where he led a number of the company’s early online marketing efforts and later served as the General Manager of Microsoft HomeAdvisor. Ian is a graduate of Bryant University, holds an MBA from Harvard Business School and serves as a strategic advisor and Board member with a number of leading US technology companies. CURRENT ASX LISTED COMPANY DIRECTORSHIPS: Nearmap Ltd (since 28 January 2016) - Non-executive Director FORMER ASX LISTED COMPANY DIRECTORSHIPS IN THE LAST 3 YEARS: None SPECIAL DUTIES: Member of the Nomination and Remuneration Committee FROM TOP TO BOTTOM MR ROSS NORGARD MR IAN MORRIS 28 DIRECTORS’ REPORT DIRECTORS’ REPORT 29 DIRECTORS’ REPORT. DIRECTORS’ REPORT. MS SUE KLOSE, B.SCI.ECON., MBA NON-EXECUTIVE DIRECTOR Sue is an experienced senior executive and board director, with a diverse background in Software as a Service businesses with a focus on digital strategy, corporate development, partnerships and business growth in Australia and the US. Sue was previously the Chief Marketing Officer of GraysOnline, where she was responsible for brand development, marketing operations and digital product strategy. In prior roles in consulting and global media companies including News Ltd, Sue led strategic planning and development and is passionate about helping teams continually seek new opportunities for growth and innovation. As Director of Digital Corporate Development for News Ltd, Sue screened hundreds of potential investments, leading multiple acquisitions, establishing the CareerOne and Carsguide joint ventures, and holding multiple board roles in high- growth digital and SaaS businesses. Sue has an MBA with honours in Finance, Strategy and Marketing from the JL Kellogg School of Management at Northwestern University Chicago, and a Bachelor of Science in Economics from the Wharton School of the University of Pennsylvania. With a strong interest in lifelong learning and development, Sue is currently a Non-executive Director of Aftercare, one of Australia’s largest mental health care providers, and is Board Chair for 10thousandgirl, a social enterprise focused on financial literacy for young women. CURRENT ASX LISTED COMPANY DIRECTORSHIPS: Nearmap Ltd (since 14 August 2017) - Non-executive Director FORMER ASX LISTED COMPANY DIRECTORSHIPS IN THE LAST 3 YEARS: None MR CLIFF ROSENBERG, B.BUS.SCI., M.SC. MANAGEMENT NON-EXECUTIVE DIRECTOR Cliff has a distinguished 20 year career in the digital space, both as an entrepreneur and executive. He was previously the Managing Director for LinkedIn South East Asia, Australia and New Zealand where he drove awareness and uptake of LinkedIn’s products, including talent solutions, marketing solutions and sales solutions. Since January 2010, Cliff set up offices for LinkedIn in Sydney, Melbourne and Perth, growing the local team to more than 250 staff, including sales, marketing and public relations personnel. Prior to joining LinkedIn, Cliff was the Managing Director of Yahoo! Australia and New Zealand where he was responsible for all aspects of the local operation for more than three years. He was also a Non-executive Director of Australia’s leading online restaurant booking platform, dimmi.com.au, which was sold to Tripadvisor in early 2015. Prior to joining Yahoo!, Cliff was the Founder and Managing Director of iTouch Australia and New Zealand, a leading wireless application service provider. He grew the Australian office to one of the largest mobile content and application providers in Australia with key partnerships with companies such as Ninemsn, Yahoo!, Telstra and Vodafone. Previously, Cliff was head of corporate strategy for Vodafone Australasia and also served as an international management consultant with Gemini Consulting and Bain Consulting. He earned a Master of Science degree in Management as well a Bachelor’s degree of Business Science in Economics and Marketing. CURRENT ASX LISTED COMPANY DIRECTORSHIPS: Nearmap Ltd (since 3 July 2012) - Non-executive Director Pureprofile Ltd (ASX: PPL) - Non-executive Director Afterpay Ltd (ASX: AFY) - Non-executive Director FORMER ASX LISTED COMPANY DIRECTORSHIPS IN THE LAST 3 YEARS: None SPECIAL DUTIES: Chair of the Nomination and Remuneration Committee Member of the Audit and Risk Management Committee FROM TOP TO BOTTOM MR CLIFF ROSENBERG MS SUE KLOSE DIRECTORS’ INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY As at the date of this report, the interests of the Directors in the shares and options of Nearmap Ltd were: P James R Norgard R Newman C Rosenberg I Morris S Klose ORDINARY SHARES OPTIONS OVER ORDINARY SHARES 282,000 50,076,295 6,000,000 2,301,000 - - 2,500,000 - 4,000,000 1,500,000 1,500,000 - CORPORATE STRUCTURE Nearmap Ltd is a company limited by shares incorporated and domiciled in Australia. NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES Nearmap’s strategy is to effectively monetise all of its content by providing convenient access to the content via desktop and mobile platforms, and through subscription models and value-add products supported by e-commerce facilities. The principal activity of the consolidated entity during the course of the financial year was online aerial photomapping via its 100% owned subsidiaries, Nearmap Australia Pty Ltd and Nearmap US Inc. The pivotal features underpinning t he success of the Nearmap business model are: • the frequency with which this data is updated; BUSINESS MODEL • the clarity (resolution) of the PhotoMaps; and • the availability of previous surveys on the same platform, allowing users to track changes at locations over time. Nearmap is an innovative online PhotoMap content provider that creates high quality current and changing maps. The Company generates revenues through licensing its content to a broad range of customers including government agencies and commercial enterprises of all sizes. Nearmap’s breakthrough technology has been designed to fully automate the process of creating high definition PhotoMaps of large areas such as cities rapidly and in a cost effective manner. The technology enables PhotoMaps to be updated more frequently than other providers, which can be months, if not years, out of date. 30 DIRECTORS’ REPORT DIRECTORS’ REPORT 31 DIRECTORS’ REPORT. DIRECTORS’ REPORT. CONSOLIDATED RESULT The consolidated entity’s result after provision for income tax was a loss of $5.3M (2016: loss of $7.1M). REVIEW AND RESULTS OF OPERATIONS For the year ended 30 June 2017, Nearmap reported total revenue of $41.1M, up 31% on corresponding prior year revenue of $31.3M, underpinned by continued customer retention and growth in the customer base. Nearmap’s balance sheet remains strong with no debt and a strong cash balance of $28.3M at year end. During the year ended 30 June 2017, Nearmap invested in sales and marketing in the US business, expanded Australian capture, and the HyperCamera2 system. Cash receipts from customers for the year were $48.0M compared to $37.3M for the previous year, an increase of $10.7M (29%). DIVIDENDS No dividends have been paid or proposed in respect of the current year (2016: nil). ENVIRONMENTAL REGULATION AND PERFORMANCE The current activities of Nearmap are not subject to any significant environmental regulation. However, the Board believes that Nearmap has adequate systems in place to manage its environmental obligations and is not aware of any breach of those environmental requirements as they apply to Nearmap. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS Significant changes in the state of affairs of Nearmap reflect an increase in contributed equity of $22,667,000 (from $28,779,000 to $51,446,000) as the result of a capital raising from institutional investors, a Share Purchase Plan and the exercise of options under the Nearmap Employee Share Option Plan. Details of the changes in contributed equity are disclosed in note 7 to the financial statements. Except for the above, in the opinion of the Directors there were no significant changes in the state of affairs of Nearmap that occurred during the financial year under review. SIGNIFICANT EVENTS SUBSEQUENT TO BALANCE DATE On 21 August 2017, Nearmap Australia Pty Limited entered into a contract for the lease of office premises located at Level 4, Tower One, International Towers Sydney, Barangaroo NSW 2000 from Lendlease (Millers Point) Pty Limited as trustee for Lendlease (Millers Point) Trust. On 14 August 2017, Nearmap appointed Ms Sue Klose as a Non-executive Director of the Company. Sue is an independent director pursuant to the ASX Corporate Governance Council’s definition of independence. Except for the above, no other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in future financial years. PROSPECTS FOR FUTURE YEARS The Directors believe that the business strategies put in place will ensure that the Group continues on its growth trajectory in the foreseeable future. Nearmap is primed to continue generating value to its shareholders in future years, subject to a stable macro-economic environment. The Group will continue to seek new opportunities to build scale and to broaden its customer base. The Group faces a number of risks, including availability and cost of funds, which may impact on its ability to achieve its revenue targets. INDEMNIFICATION AND INSURANCE OF DIRECTORS During the financial year, the Group paid a premium to insure the Directors and officers of the Group. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the Group, and any other payments arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the Company. It is not possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities. SHARE OPTIONS As at 30 June 2017 there were 34,300,921 unissued ordinary shares under option. Refer to note 5 of the financial statements for further details of the Share based payment plan. DIRECTORS’ MEETINGS The number of meetings of Directors (including meetings of committees of Directors) held during the financial year and the number of meetings attended by each Director was as follows: FULL BOARD MEETINGS AUDIT AND RISK COMMITTEE MEETINGS NOMINATION AND REMUNERATION COMMITTEE MEETINGS P James R Norgard R Newman C Rosenberg I Morris S Klose2 A 7 7 7 7 7 - B 7 7 7 6 7 - A 3 3 - 3 - - B 3 3 21 3 - - A 2 2 - 2 2 - B 2 2 - 1 1 - 1 Attended as an invitee. 2 Appointed 14 August 2017. A - Number of meetings held during the time the Director held office and the Director was eligible to attend. B - Number of meetings attended. ROUNDING OF AMOUNTS The Group is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 and in accordance with that instrument, amounts in the consolidated financial report and Directors’ report have been rounded off to the nearest thousand dollars, unless otherwise stated. 32 DIRECTORS’ REPORT DIRECTORS’ REPORT 33 DIRECTORS’ REPORT. DIRECTORS’ REPORT. REMUNERATION REPORT (AUDITED) INTRODUCTION FROM THE CHAIR OF THE NOMINATION AND REMUNERATION COMMITTEE A. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION On behalf of the Board I am pleased to present the Remuneration Report for the financial year ended 30 June 2017 (FY17). The Board is committed to ensuring our remuneration is structured and governed in a way that supports our business strategy and our ability to recruit and reward the best people to deliver results for our shareholders. In FY17 Nearmap increased the total revenue of the company by 31% by growing the customer base and through excellent customer retention. Ongoing strong performance will allow us to continue our investment in the Australian business, the US market and our products. To support these growth ambitions, the company has continued to strengthen the Board and management team. In this context, the Nomination and Remuneration Committee has completed a review of our approach to remuneration, taking into consideration input from external advisors, shareholders and other stakeholders. As a result, in FY18 we will make changes to the remuneration structures to ensure it supports our evolving business and remains adaptable to our future needs. The key changes for FY18 are: • Discontinuing option grants to Non-executive Directors (NEDs): we have taken on board feedback on this practice and from FY18 will compensate NEDs through cash fees (inclusive of superannuation) only. We will introduce fees for the sub- committee Chairs and members (other than the Board Chair) to recognise their additional responsibilities. • Better alignment of the short-term incentive plan (STI) to business objectives: a revenue growth gateway will be introduced for participating executives to provide a strong focus on the top-line growth required for the business to expand. The scorecard for assessing the STI will be more transparent, with executives assessed against a scorecard of financial (60%) and strategic (40%) measures. Subject to meeting the gateway, outperformance can result in higher than target payments, while underperformance will result in below target payments. • Simplifying and strengthening the long-term incentive (LTI) plan: recognising our evolution and considering external feedback, we will replace the premium priced option plan for executives with market priced options that are subject to a 20% CAGR absolute TSR hurdle. The awards will vest, subject to meeting the hurdle, after three years from grant. This is a simpler plan with clear alignment to long term shareholder value creation. Overall these changes for FY18 are designed to support Nearmap’s continuing evolution and align our reward structure with our business strategy and talent objectives to deliver sustainable shareholder returns. I trust you will find this report useful and informative. Cliff Rosenberg Chair – Nomination and Remuneration Committee This remuneration report outlines the remuneration arrangements in place for Directors and key management personnel of Nearmap Ltd (the Company) and the consolidated entity (the Group) during the financial year. The report is set out under the following main headings: A. Principles used to determine the nature and amount of remuneration B. Details of remuneration C. Employment contracts D. Share based compensation E. Transactions of key management personnel F. Additional information G. Shares under option The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001. REMUNERATION PHILOSOPHY The performance of the Company depends upon the quality of its Directors and executives. To prosper, the Company must attract, motivate and retain highly skilled Directors and executives. To this end, the Company embodies the following principles in its remuneration framework: • Provide competitive rewards to attract high calibre executives; • Link executive rewards to shareholder value; and • Establish appropriate, demanding performance hurdles in relation to variable executive remuneration. NOMINATION AND REMUNERATION COMMITTEE The Nomination and Remuneration Committee of the Board of Directors of the Company is responsible for determining and reviewing compensation arrangements for the Directors, the CEO & Managing Director and the senior management team and ensuring that the Board continues to operate within the established guidelines, including when necessary, selecting candidates for the position of Director. The Nomination and Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of Directors and key management personnel on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team. REMUNERATION STRUCTURE In accordance with best practice corporate governance, the structure of Non-executive Director and key management personnel remuneration is separate and distinct. Non-executive Director remuneration Objective The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract and retain Directors of the highest calibre, while incurring a cost which is acceptable to shareholders. Structure Each Non-executive Director receives a fee for being a Director of the Company. The Constitution and the ASX Listing Rules specify that the aggregate remuneration of Non-executive Directors shall be determined from time to time by a general meeting. An amount not exceeding the amount determined is then divided between the Directors as agreed. The latest determination was at the Annual General Meeting (AGM) held on 30 November 2015 when shareholders approved an aggregate remuneration of $500,000 per year. Further fees may be paid to Non-executive Directors where additional time commitment is required such as that required by the Chairman of the Company. A grant of Non- executive Director share options was made during the year ended 30 June 2016. No grants were made in the year ended 30 June 2017. The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned among Directors is reviewed annually. Services from remuneration consultants The Board periodically reviews the level of fees paid to Non-executive Directors, including seeking external advice. No change was made to fees during the year ended 30 June 2017 as the current level of fees was deemed appropriate. Voting and comments made at the Company’s 2016 Annual General Meeting The Company received 5.74% “no” votes on its remuneration report for the 2016 financial year. The Company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices. 34 DIRECTORS’ REPORT DIRECTORS’ REPORT 35 DIRECTORS’ REPORT. DIRECTORS’ REPORT. REMUNERATION REPORT (AUDITED) REMUNERATION REPORT (AUDITED) A. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION (CONT.) A. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION (CONT.) Key management personnel and executive Director remuneration Objective The Company aims to reward executives with a level and mix of remuneration commensurate with their position and responsibilities within the Company so as to: • Reward executives and individual performance against key performance indicators; • Align the interests of executives with those of shareholders; • Link reward with the strategic goals and performance of the Group; and • Ensure total remuneration is competitive by market standards. Structure Remuneration typically consists of the following key elements: • Fixed Remuneration • Variable Remuneration - Short Term Incentive (STI) and - Long Term Incentive (LTI) The proportion of fixed remuneration and variable remuneration (potential short term and long term incentives) is established for each key management personnel by the Nomination and Remuneration Committee. Fixed Remuneration Objective The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to the position and is competitive in the market. Fixed remuneration is reviewed annually by the Nomination and Remuneration Committee. The process consists of a review of individual performance, comparative remuneration in the market and internal and, where appropriate, external advice on policies and practices. The Board determined that the only change to the fixed remuneration of key management personnel in the 2017 financial year would be for Patrick Quigley, based on performance. No other increases were made to the fixed remuneration of the CEO & Managing Director and any other key management personnel as the current level of remuneration was considered appropriate. Structure Senior executives are given the opportunity to receive their fixed (primary) remuneration in a variety of forms including cash and fringe benefits such as motor vehicles and expense payment plans. It is intended that the manner of payment chosen will be optimal for the recipient without creating undue cost for the Company. Variable Remuneration — Short Term Incentive (STI) Objective The objective of the STI program is to link the achievement of the Company’s operational targets with the remuneration received by the employees charged with meeting those targets. The total potential STI where available is set at a level so as to provide sufficient incentive to employees to achieve the operational targets at a cost to the Company that is reasonable in the circumstances. Structure Actual STI payments granted to each employee depend on the extent to which specific operating targets set are met. The operational targets consist of a number of Key Performance Indicators (KPIs) covering both financial and non-financial measures of performance. Typically included are measures such as contribution to net profit after tax, customer management and leadership/team contribution. On an annual basis, after consideration of performance against KPIs, an overall performance rating for the Group and each individual’s performance is made and is taken into account when determining the amount, if any, of the short term incentive pool to be allocated to each employee. The aggregate of annual STI payments available for employees across the Group is subject to the approval of the Nomination and Remuneration Committee. Payments made are usually delivered as a cash bonus. However, STI payments are subject to discretion by the Board based on performance at the end of the year. Variable Remuneration – Long Term Incentive (LTI) Objective The objective of the LTI plan is to reward employees in a manner which aligns this element of remuneration with the creation of shareholder wealth. AUSTRALIAN EMPLOYEES Options are granted with a strike price of at least 143% of the share price prevailing at the time of the grant. Executives are therefore required to achieve a fixed increase in share price of more than 43% before any value attracts to the individual. The options have a 4 year term with the following service condition structures: • s ervice vesting condition of 1 year for 50% of each tranche granted and 2 years for the second 50% tranche, or • service vesting condition of 1 year for 33% of each tranche granted, 2 years for 33% of the next tranche and 3 years for the remaining 34% There are no performance related vesting conditions. The Board believes that this is a challenging fixed target in share price over the option term and is therefore an appropriate mechanism to align Company performance with that of the individual. An employee loan scheme arrangement exists should an employee elect to apply for a loan on exercise of options, which may be granted subject to Nomination and Remuneration Committee discretion. UNITED STATES EMPLOYEES Options are granted with a strike price of the share price prevailing at the time of the grant. The options have a 5 year term and a service vesting condition of 1 year for 25% of each tranche granted and then in equal tranches at 3 monthly intervals to 4 years for the remaining 75%. There are no performance related vesting conditions. The Board believes that this structure is necessary to attract and retain high calibre executives to deliver the Group’s strategy in the United States market. The Board ensures the alignment of Company performance with that of the individual through the STI program as documented above. Structure LTI grants to employees are delivered in the form of options and the amount is determined by the Nomination and Remuneration Committee having regard to: • the seniority of the relevant Eligible Person and the position the Eligible Person occupies within the Company; • the length of service of the Eligible Person with the Group; • the record of employment of the Eligible Person with the Group; • the potential contribution of the Eligible Person to the growth of the Group; • the extent (if any) of the existing participation of the Eligible Person (or any Permitted Nominee in relation to that Eligible Person) in the Plan; and • any other matters which the Board considers relevant. Group performance The overall level of executive reward takes into account the nature of the technology commercialisation business and realistic timeframes for generating profits. In particular, executive rewards recognise the commercialisation of the Nearmap business and future shareholder wealth contained therein and the progress that has been made in unlocking value to date. Executive performance of the Group has been reviewed over the past 5 years taking into account future shareholder wealth and profit performance. In considering the Group’s performance and benefits for shareholder wealth, the Nomination and Remuneration Committee has given regard to the following indices in respect of the current financial year over the last 5 financial years. Total revenue EBITDA (earnings before interest, tax, depreciation and amortisation)1 Change in share price 2017 $’000 41,065 6,017 $0.20 2016 $’000 31,289 632 ($0.18) 2015 $’000 26,124 944 $0.16 2014 $’000 20,069 3,384 $0.17 2013 $’000 12,766 752 $0.22 1 EBITDA also excludes R&D tax rebates, foreign currency differences and impairment adjustments 36 DIRECTORS’ REPORT DIRECTORS’ REPORT 37 DIRECTORS’ REPORT. DIRECTORS’ REPORT. REMUNERATION REPORT (AUDITED) REMUNERATION REPORT (AUDITED) REMUNERATION REPORT (AUDITED) A. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION (CONT.) B. DETAILS OF REMUNERATION This graph shows Nearmap’s closing share price since 1 July 2012 and the relative performance against the ASX All Ordinaries. DIRECTORS NEA AORD 1.00 0.90 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00 30/06/2012 30/12/2012 30/06/2013 30/12/2013 30/06/2014 30/12/2014 30/06/2015 30/12/2015 30/06/2016 30/12/2016 14,000 12,000 10,000 8,000 6,000 4,000 2,000 The following persons also had authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, during the financial year: P James R Norgard R Newman Non-executive Chairman Non-executive Director Chief Executive Officer C Rosenberg Non-executive Director I Morris Non-executive Director OTHER KEY MANAGEMENT PERSONNEL The following persons also had authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, during the financial year: L Rankin P Quigley A Watt S Steel S Preston G Beukes J Biviano P Lapstun Vice President of Product and Engineering Senior Vice President and General Manager North America Chief Financial Officer (appointed 12 December 2016) Vice President, People and Culture (appointed 1 February 2017) Vice President of Sales – Australia (appointed 20 March 2017) Chief Financial Officer and Chief Operating Officer (resigned 5 January 2017) Senior Vice President and General Manager Australia (resigned 16 March 2017) Chief Technology Officer (resigned 30 June 2017) 38 38 DIRECTORS’ REPORT DIRECTORS’ REPORT 39 DIRECTORS’ REPORT. DIRECTORS’ REPORT. REMUNERATION REPORT (AUDITED) REMUNERATION REPORT (AUDITED) B. DETAILS OF REMUNERATION (CONT.) B. DETAILS OF REMUNERATION (CONT.) Financial year 2017 performance is reflected in the outcome of the variable components of the remuneration framework: • STI payments were made to the CEO & Managing Director and other key management personnel based on the pro-rata attainment of management growth targets. • LTI was awarded to the CEO & Managing Director and other key management personnel: - Dr Newman received a grant of 2,000,000 premium-priced share options vesting in equal tranches over three years, as approved at the Company AGM on 30 November 2015; - Upon joining the Company Mr Watt, Mr Preston and Ms Steel received grants of 2,500,000, 775,032 and 697,530 premium- priced share options respectively, vesting in equal tranches over three years; - Ms Rankin received a grant of 516,690 premium-priced share options, vesting in equal tranches over three years, based on performance during the year. Details of the remuneration of the Directors and the key management personnel (as defined in AASB 124 Related Party Disclosures): SHORT-TERM LONG-TERM POST-EMPLOYMENT SALARY & FEES3 NON MONETARY2 CASH BONUS LONG SERVICE LEAVE SUPER- ANNUATION TERMINATION BENEFITS SHARE- BASED PAYMENT OPTIONS1 PERCENTAGE PERFORMANCE RELATED TOTAL NON-EXECUTIVE DIRECTORS P James P James R Norgard R Norgard C Rosenberg C Rosenberg I Morris I Morris 2017 2016 2017 2016 2017 2016 2017 2016 91,324 44,140 63,926 64,057 63,926 63,926 70,935 31,963 - - - - - - - - - - - - - - - - SUB-TOTAL NON-EXECUTIVE DIRECTORS - - - - - - - - 8,676 4,193 6,074 8,025 6,074 6,074 6,739 3,037 2017 2016 290,111 204,086 - - - - - - 21,329 EXECUTIVE DIRECTORS R Newman R Newman 2017 2016 500,692 356,971 18,000 42,896 132,683 184,080 334 133 19,616 19,308 - - - - - - - - - - - - - - - - - - - - 140,470 240,470 85,918 134,251 - - 70,000 72,082 70,938 140,938 60,699 130,699 115,731 193,405 59,072 94,072 327,139 644,813 205,689 431,104 314,978 986,303 121,399 724,787 13% 25% 1 AASB 2 accounting value determined at grant date, recognised over related vesting periods. The amount included as remuneration is not related to or indicative of the benefit (if any) that the individual key management personnel may ultimately realise should the equity instruments vest. The notional value of options as at the date of their grant has been determined in accordance with the accounting policy in note 5. 2 Non-monetary benefits include the cost to the Company of providing vehicle, living away from home benefits and accommodation. 3 Salary includes annual leave. ASX Listing Rule 10.17 states that ‘Directors’ fees’ constitutes fees, including superannuation, but excluding securities issued. The total directors’ fees paid to Non-executive Directors during the year ended 30 June 2017, excluding share based payments, was $317,674 which is within the amount determined at the AGM on 30 November 2015. SHORT-TERM LONG-TERM POST-EMPLOYMENT SALARY & FEES9 NON MONETARY2 CASH BONUS LONG SERVICE LEAVE SUPER- ANNUATION TERMINATION BENEFITS SHARE- BASED PAYMENT OPTIONS1 PERCENTAGE PERFORMANCE RELATED TOTAL OTHER KEY MANAGEMENT PERSONNEL (GROUP) L Rankin L Rankin P Quigley P Quigley A Watt3 S Steel4 S Preston5 2017 2016 2017 2016 2017 2017 2017 200,440 193,479 489,619 234,084 156,369 113,380 79,802 - - - - - - - 53,000 76,650 - - 40,917 21,781 39,561 1,027 129 - - 58 47 30 19,008 18,335 - - 11,345 10,564 4,904 SUB-TOTAL OTHER KEY MANAGEMENT PERSONNEL 155,259 76,650 1,162 129 45,821 18,335 - - - - - - - - - 117,009 390,484 44,370 332,963 222,933 712,552 87,778 321,862 221,054 429,743 18,998 164,770 21,109 145,406 601,103 132,148 654,825 2017 1,039,610 2016 427,563 FORMER KEY MANAGEMENT PERSONNEL (GROUP) G Beukes6 211,273 2017 G Beukes J Biviano7 J Biviano P Lapstun8 P Lapstun 2016 2017 2016 2017 2016 281,767 317,456 325,889 314,041 280,210 - - - - - - - - - 112,500 - 130,966 - - 7,437 - 170 - 150,000 3,046 10,218 19,308 19,616 19,308 19,616 19,308 75,000 (80,685) 215,806 - 351,184 772,196 269,050 (11,351) 594,771 - - - 269,913 746,246 (68,891) 264,766 351,507 804,071 14% 23% - - 10% 13% 27% - 15% - 18% - 19% TOTAL DIRECTORS AND KEY MANAGEMENT PERSONNEL 2017 2,673,183 2016 1,876,486 18,000 42,896 287,942 654,196 1,496 10,915 142,450 116,896 344,050 1,082,293 - 1,431,840 1 AASB 2 accounting value determined at grant date, recognised over related vesting periods. The amount included as remuneration is not related to or indicative of the benefit (if any) that the individual key management personnel may ultimately realise should the equity instruments vest. The notional value of options as at the date of their grant has been determined in accordance with the accounting policy in note 5. 2 Non-monetary benefits include the cost to the Company of providing vehicle, living away from home benefits and accommodation. 3 Mr Watt was appointed as Chief Financial Officer on 12 December 2016. 4 Ms Steel was appointed as Vice President, People and Culture on 1 February 2017. 5 Mr Preston was appointed as Vice President of Sales – Australia on 20 March 2017. 6 Mr Beukes resigned on 5 January 2017. 7 Mr Biviano resigned on 16 March 2017. 8 Mr Lapstun resigned on 30 June 2017. 9 Salary includes annual leave. 40 DIRECTORS’ REPORT DIRECTORS’ REPORT 41 DIRECTORS’ REPORT. DIRECTORS’ REPORT. REMUNERATION REPORT (AUDITED) REMUNERATION REPORT (AUDITED) B. DETAILS OF REMUNERATION (CONT.) C. EMPLOYMENT CONTRACTS Structure The key management personnel remuneration framework consists of the following components: • Fixed Remuneration • Variable Remuneration - Short Term Incentive (STI) and - Long Term Incentive (LTI) The proportion of fixed remuneration and potential variable remuneration is established for each key management personnel by the Nomination and Remuneration Committee. The proportion of fixed and potential at risk components for the key management personnel as a percentage of potential maximum total annual remuneration for the 2017 year, is shown below: FIXED REMUNERATION NON – EXECUTIVE DIRECTORS P James R Norgard C Rosenberg I Morris EXECUTIVE DIRECTORS R Newman OTHER KEY MANAGEMENT PERSONNEL L Rankin P Quigley A Watt S Steel S Preston FORMER OTHER KEY MANAGEMENT PERSONNEL G Beukes J Biviano P Lapstun SALARIES AND BENEFITS 2017 100% 100% 100% 100% 40% 52% 50% 27% 48% 52% 52% 50% 52% LTI1 2017 - - - - 40% 24% - 61% 30% 24% 24% 24% 24% AT RISK – STI 2017 - - - - - 20% 24% 50% 13% 22% 24% 24% 27% 24% 1 LTI awards have service related vesting conditions. See Section A for further detail on the remuneration structure of Directors and key management personnel. All executive employees and key management personnel are employed under contract. All executives have ongoing contracts and as such only have commencement dates and no expiry dates. Details of key management personnel contracts as at 30 June 2017 are: NAME R Newman A Watt S Steel S Preston L Rankin P Quigley NOTICE PERIOD FOR TERMINATION AT WILL 6 months 4 months 4 months 4 months 4 months 4 months • On resignation any unvested options are forfeited. Limited recourse loans (LRLs) are only granted to key management personnel in respect of vested options, therefore the loans are not subject to cancellation on resignation. • The Company may terminate an employment agreement by providing the respective written notice period or provide payment in lieu of the notice period (based on the fixed component of remuneration). On such termination by the Company, any LTI options that have vested, or will vest during the notice period will be required to be exercised within 180 days from termination date (unless agreed otherwise by the Company) or their options expiry date if earlier. LTI options that have not yet vested will be forfeited. • The Company may terminate an employment contract at any time without notice if serious misconduct has occurred. Where termination with cause occurs, the employee is only entitled to that portion of remuneration which is fixed, and only up to the date of termination. On termination with cause any unvested options will immediately be forfeited. • If an employee ceases to be employed by the Company (including by way of resignation, retirement, dismissal, etc) and has an outstanding LRL, the employee may elect to have the Company sell the loan shares and apply the net proceeds of the sale in repayment of the loan or repay the outstanding amount on the loan. This determination must generally be made within one month of the date of ceased employment. • There are no formal contracts between the Company and Non-executive Directors in relation to remuneration other than the letter of appointment that stipulates the remuneration as at the commencement date. 42 DIRECTORS’ REPORT DIRECTORS’ REPORT 43 DIRECTORS’ REPORT. DIRECTORS’ REPORT. REMUNERATION REPORT (AUDITED) REMUNERATION REPORT (AUDITED) LIMITED RECOURSE LOANS (LRLS) Nearmap’s Employee Share Option Plan includes an Employee Loan Scheme that permits Nearmap to grant financial assistance to employees by way of LRLs to enable them to exercise options and acquire shares. Interest on the loans is payable by key management personnel at loan maturity and accrues daily. The Company determines the rate of interest applicable to LRLs (currently the cash rate set by the Reserve Bank of Australia plus 20 basis points). Loans are repayable four years after the issue date subject to the total share value being greater than the loan’s principal plus accrued interest. D. SHARE BASED COMPENSATION OPTIONS A share option incentive scheme, the Nearmap Employee Share Option Plan, has been established whereby Directors and certain employees of the Group may be issued with options over the ordinary shares of the Company. In Australia, options are issued for nil consideration at an exercise price calculated with reference to prevailing market prices and a 43% premium in accordance with performance guidelines established by the Directors of the Company. The options are issued for terms of up to four years and are exercisable on various dates (usually in two or three equal annual tranches when vested) within four years from the grant date. In the US, options are issued for nil consideration at an exercise price equal to the prevailing market price. The options are issued for terms up to five years and are exercisable on various dates within five years from grant date. The options only vest under certain conditions, principally centred on the employee still being employed, or the Director still engaged, at the time of vesting (that is, once the service has been satisfied). The options cannot be transferred without the approval of the Company’s Board and are not quoted on the ASX. As a result, plan participants may not enter into any transaction designed to remove the “at risk” aspect of an option before it is exercised. Refer to the table on page 45 for details of the options that were issued to Directors and key management personnel during the year ended 30 June 2017. D. SHARE BASED COMPENSATION (CONT.) COMPENSATION OPTIONS: Each option entitles the holder to subscribe for one fully paid ordinary share in the Company at an exercise price determined at a 43% premium to the market price of the shares on the date of grant (Australia) or the market price on grant date (US). When an individual is granted a LRL to exercise their option, the effect is to extend the life of the original option. The exercise price includes interest accrued. 30 JUNE 2017 BALANCE AT 1 JULY GRANTED DURING THE PERIOD LAPSED OR FORFEITED DURING THE PERIOD EXERCISED DURING THE PERIOD BALANCE AT 30 JUNE VESTED DURING THE PERIOD UNVESTED AT BALANCE DATE GRANT DATE EXERCISE PRICE PER SHARE (OPTIONS)/ CURRENT PRICE PER SHARE (LOANS) $ VALUE PER OPTION/ SHARE AT GRANT DATE2 $ VALUE EXERCISED DURING THE PERIOD3 $ VESTING DATE EXPIRY DATE DIRECTORS P James - Options - Options - Options 833,333 833,333 833,334 R Newman - Options 1,000,000 - Options 1,000,000 - Options 1,000,000 - - - - - - - Options - Options - Options C Rosenberg - Options - Options - Options I Morris - Options - Options - Options - - - 666,666 666,667 666,667 500,000 500,000 500,000 500,000 500,000 500,000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 833,333 833,334 833,333 833,333 - Mar 16 0.1125 0.55 Mar 17 Mar 20 833,333 Mar 16 0.1125 0.55 Mar 18 Mar 20 833,334 Mar 16 0.1125 0.55 Mar 19 Mar 20 - 1,000,0001 - - Nov 15 0.1135 0.56 Nov 16 Nov 19 75,000 - 1,000,000 - 1,000,000 666,666 666,667 666,667 1,000,000 Nov 15 0.1135 0.56 Nov 17 Nov 19 1,000,000 Nov 15 0.1135 0.56 Nov 18 Nov 19 666,666 Dec 16 0.2428 1.06 Dec 17 Dec 20 666,667 Dec 16 0.2428 1.06 Dec 18 Dec 20 666,667 Dec 16 0.2428 1.06 Dec 19 Dec 20 - - - - - - - - 500,000 500,000 - Nov 15 0.1135 0.56 Nov 16 Nov 19 500,000 500,000 - - 500,000 Nov 15 0.1135 0.56 Nov 17 Nov 19 500,000 Nov 15 0.1135 0.56 Nov 18 Nov 19 500,000 500,000 - Mar 16 0.1547 0.40 Mar 17 Mar 20 500,000 500,000 - - 500,000 Mar 16 0.1547 0.40 Mar 18 Mar 20 500,000 Mar 16 0.1547 0.40 Mar 19 Mar 20 - - - - - - - - - - - - - - 44 DIRECTORS’ REPORT DIRECTORS’ REPORT 45 1 The exercise of these options was funded through the grant of a LRL under the Employee Loan Scheme. 2 AASB 2 accounting value determined at grant date. 3 Value determined based on the share price at exercise date less exercise price. DIRECTORS’ REPORT. DIRECTORS’ REPORT. REMUNERATION REPORT (AUDITED) REMUNERATION REPORT (AUDITED) D. SHARE BASED COMPENSATION (CONT.) COMPENSATION OPTIONS (CONT.) LAPSED OR FORFEITED DURING THE PERIOD GRANTED DURING THE PERIOD 30 JUNE 2017 BALANCE AT 1 JULY EXERCISED DURING THE PERIOD BALANCE AT 30 JUNE VESTED DURING THE PERIOD UNVESTED AT BALANCE DATE GRANT DATE VALUE PER OPTION/ SHARE AT GRANT DATE1 EXERCISE PRICE PER SHARE (OPTIONS)/ CURRENT PRICE PER SHARE (LOANS) VALUE EXERCISED DURING THE PERIOD2 VESTING DATE EXPIRY DATE OTHER KEY MANAGEMENT PERSONNEL A Watt - Options - Options - Options S Steel - Options - Options - Options S Preston - Options - Options - Options L Rankin - Options - Options - Options - Options - Options - Options - Options - Options - Options - Options - Options - - - - - - - - - 833,333 833,333 833,334 232,510 232,510 232,511 258,344 258,345 258,345 150,000 150,000 83,333 83,333 83,334 333,333 333,333 333,334 - - - - - - - - - - - 172,230 172,230 172,230 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 833,333 833,333 833,334 232,510 232,510 232,511 258,344 258,345 258,345 - - - - - - - - - 833,333 Dec 16 0.2480 833,333 Dec 16 0.2480 833,334 Dec 16 0.2480 0.93 0.93 0.93 Dec 17 Dec 20 Dec 18 Dec 20 Dec 19 Dec 20 232,510 Mar 17 0.1783 232,510 Mar 17 0.1783 232,511 Mar 17 0.1783 0.64 0.64 0.64 Mar 18 Mar 21 Mar 19 Mar 21 Mar 20 Mar 21 258,344 Mar 17 0.1783 258,345 Mar 17 0.1783 258,345 Mar 17 0.1783 0.64 0.64 0.64 Mar 18 Mar 21 Mar 19 Mar 21 Mar 20 Mar 21 150,000 150,000 - Dec 14 0.1608 150,000 - 150,000 Dec 14 0.1608 83,333 83,333 - Nov 15 0.1157 83,333 83,334 - - 83,333 Nov 15 0.1157 83,334 Nov 15 0.1157 0.85 0.85 0.56 0.56 0.56 Dec 16 Dec 18 Dec 17 Dec 18 Nov 16 Nov 19 Nov 17 Nov 19 Nov 18 Nov 19 333,333 333,333 - May 16 0.1532 0.68 May 17 May 20 333,333 333,334 172,230 172,230 172,230 - - - - - 333,333 May 16 0.1532 0.68 May 18 May 20 333,334 May 16 0.1532 0.68 May 19 May 20 172,230 Mar 17 0.1783 172,230 Mar 17 0.1783 172,230 Mar 17 0.1783 0.64 0.64 0.64 Mar 18 Mar 21 Mar 19 Mar 21 Mar 20 Mar 21 - - - - - - - - - - - - - - - - - - - - 1 AASB 2 accounting value determined at grant date. 2 Value determined based on the share price at exercise date less exercise price. D. SHARE BASED COMPENSATION (CONT.) COMPENSATION OPTIONS (CONT.) LAPSED OR FORFEITED DURING THE PERIOD GRANTED DURING THE PERIOD EXERCISED DURING THE PERIOD BALANCE AT 30 JUNE VESTED DURING THE PERIOD UNVESTED AT BALANCE DATE GRANT DATE VALUE PER OPTION/ SHARE AT GRANT DATE1 EXERCISE PRICE PER SHARE (OPTIONS)/ CURRENT PRICE PER SHARE (LOANS) VESTING DATE EXPIRY DATE VALUE EXERCISED DURING THE PERIOD2 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 375,000 375,000 93,750 93,750 - - Feb 16 0.1480 0.39 Feb 17 Jan 21 Feb 16 0.1480 0.39 May 17 Jan 21 93,750 93,750 375,000 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 - - - - - - - - - - - - - - - - - - - - - - - - 93,750 Feb 16 0.1480 93,750 Feb 16 0.1480 375,000 Feb 16 0.1480 93,750 Feb 16 0.1480 93,750 Feb 16 0.1480 0.39 0.39 0.39 0.39 0.39 Aug 17 Jan 21 Nov 17 Jan 21 Nov 17 Nov 21 Feb 18 Jan 21 Feb 18 Nov 21 93,750 Feb 16 0.1480 0.39 May 18 Jan 21 93,750 Feb 16 0.1480 0.39 May 18 Nov 21 93,750 Feb 16 0.1480 93,750 Feb 16 0.1480 93,750 Feb 16 0.1480 93,750 Feb 16 0.1480 93,750 Feb 16 0.1480 93,750 Feb 16 0.1480 0.39 0.39 0.39 0.39 0.39 0.39 Aug 18 Jan 21 Aug 18 Nov 21 Nov 18 Jan 21 Nov 18 Nov 21 Feb 19 Jan 21 Feb 19 Nov 21 93,750 Feb 16 0.1480 0.39 May 19 Jan 21 93,750 Feb 16 0.1480 0.39 May 19 Nov 21 93,750 Feb 16 0.1480 93,750 Feb 16 0.1480 93,750 Feb 16 0.1480 93,750 Feb 16 0.1480 93,750 Feb 16 0.1480 93,750 Feb 16 0.1480 0.39 0.39 0.39 0.39 0.39 0.39 Aug 19 Jan 21 Aug 19 Nov 21 Nov 19 Jan 21 Nov 19 Nov 21 Feb 20 Jan 21 Feb 20 Nov 21 93,750 Feb 16 0.1480 0.39 May 20 Nov 21 93,750 Feb 16 0.1480 93,750 Feb 16 0.1480 0.39 0.39 Aug 20 Nov 21 Nov 20 Nov 21 - - - - - - - - - - - - - - - - - - - - - - - - - - 30 JUNE 2017 BALANCE AT 1 JULY P Quigley - Options 375,000 - Options - Options - Options 93,750 93,750 93,750 - Options 375,000 - Options - Options - Options - Options - Options - Options - Options 93,750 93,750 93,750 93,750 93,750 93,750 93,750 - Options 93,750 - Options - Options - Options - Options - Options - Options - Options - Options - Options - Options - Options - Options - Options 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 93,750 1 AASB 2 accounting value determined at grant date. 2 Value determined based on the share price at exercise date less exercise price. 46 DIRECTORS’ REPORT DIRECTORS’ REPORT 47 DIRECTORS’ REPORT. DIRECTORS’ REPORT. REMUNERATION REPORT (AUDITED) REMUNERATION REPORT (AUDITED) D. SHARE BASED COMPENSATION (CONT.) D. SHARE BASED COMPENSATION (CONT.) COMPENSATION OPTIONS (CONT.) COMPENSATION OPTIONS (CONT.) E. TRANSACTIONS OF KEY MANAGEMENT PERSONNEL SHARES HELD IN THE COMPANY LAPSED OR FORFEITED DURING THE PERIOD GRANTED DURING THE PERIOD 30 JUNE 2017 BALANCE AT 1 JULY EXERCISED DURING THE PERIOD BALANCE AT 30 JUNE VESTED DURING THE PERIOD UNVESTED AT BALANCE DATE EXERCISED DURING THE PERIOD GRANT DATE VALUE PER OPTION /SHARE AT GRANT DATE1 EXERCISE PRICE PER SHARE (OPTIONS) /CURRENT PRICE PER SHARE (LOANS) VALUE EXERCISED DURING THE PERIOD2 VESTING DATE EXPIRY DATE FORMER OTHER KEY MANAGEMENT PERSONNEL G Beukes3 - Options 1,250,000 - Options 1,250,000 - Options 500,000 - Options 500,000 - Options 500,000 - Options 500,000 - Options 500,000 J Biviano4 - Options 1,000,000 - Options 1,000,000 - Options 1,000,000 - Options 500,000 - Options 500,000 - Options 500,000 P Lapstun5 - Options 1,250,000 - Options 1,250,000 - Options 500,000 - Options 500,000 - Options 500,000 - Options 500,000 - Options 500,000 - - - - - - - - - - - - - - - - - - - - 500,000 - 500,000 500,000 - 1,250,0001,250,000 - 1,250,0001,250,000 - - - - - 500,000 500,000 - - 500,000 500,000 - - - - - - - 1,000,0001,000,000 - 1,000,0001,000,000 1,000,000 - 500,000 500,000 - - - 500,000 - 500,000 500,000 - - - - - - 500,000 500,000 - - - - - 1,250,0001,250,000 - 1,250,0001,250,000 - - - - - 500,000 500,000 - - 500,000 500,000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Nov 13 0.2943 0.76 Nov 15 Nov 17 Nov 13 0.2943 0.76 Nov 16 Nov 17 Nov 14 0.2160 1.08 Nov 16 Nov 18 Nov 14 0.2160 1.08 Nov 17 Nov 18 Nov 15 0.1157 0.56 Nov 16 Nov 19 Nov 15 0.1157 0.56 Nov 17 Nov 19 Nov 15 0.1157 0.56 Nov 18 Nov 19 Mar 15 0.1453 0.79 Mar 16 Mar 19 Mar 15 0.1453 0.79 Mar 17 Mar 19 Mar 15 0.1453 0.79 Mar 18 Mar 19 Nov 15 0.1157 0.56 Nov 16 Nov 19 Nov 15 0.1157 0.56 Nov 17 Nov 19 Nov 15 0.1157 0.56 Nov 18 Nov 19 Nov 13 0.2943 0.76 Nov 15 Nov 17 Nov 13 0.2943 0.76 Nov 16 Nov 17 Nov 14 0.2160 1.08 Nov 16 Nov 18 Nov 14 0.2160 1.08 Nov 17 Nov 18 Nov 15 0.1157 0.56 Nov 16 Nov 19 Nov 15 0.1157 0.56 Nov 17 Nov 19 Nov 15 0.1157 0.56 Nov 18 Nov 19 - - - - - - - - - - - - - - - - - - - - 1 AASB 2 accounting value determined at grant date. 2 Value determined based on the share price at exercise date less exercise price. 3 Mr Beukes resigned on 5 January 2017. 4 Mr Biviano resigned on 16 March 2017. 5 Mr Lapstun resigned on 30 June 2017. BALANCE AT 1 JULY 2016 EXERCISE OF OPTIONS NET OTHER CHANGE BALANCE AT 30 JUNE 2017 BALANCE HELD NOMINALLY - - 1,000,000 - - - - - - - - - - 92,000 - - (600,000) 282,000 50,076,295 6,000,000 2,301,000 282,000 50,036,295 6,000,000 2,301,000 - - - - - - - - - - - - - - - n/a n/a n/a - - - - - - n/a n/a n/a 30 JUNE 2017 DIRECTORS P James R Norgard R Newman C Rosenberg I Morris OTHER KEY MANAGEMENT PERSONNEL L Rankin P Quigley A Watt S Steel S Preston 190,000 50,076,295 5,000,000 2,901,000 - - - - - - FORMER OTHER KEY MANAGEMENT PERSONNEL G Beukes1 5,755,000 J Biviano2 P Lapstun3 - 4,500,000 1 Mr Beukes resigned on 5 January 2017. 2 Mr Biviano resigned on 16 March 2017. 3 Mr Lapstun resigned on 30 June 2017. LOAN SHARES HELD IN THE COMPANY 30 JUNE 2017 BALANCE AT 1 JULY 2016 EXERCISE OF LRL REPAYMENTS BALANCE AT 30 JUNE 2017 BALANCE HELD NOMINALLY OTHER KEY MANAGEMENT PERSONNEL R Newman - 1,000,000 - 1,000,000 1,000,000 FORMER OTHER KEY MANAGEMENT PERSONNEL G Beukes1 5,000,000 P Lapstun2 2,500,000 1 Mr Beukes resigned on 5 January 2017. 2 Mr Lapstun resigned on 30 June 2017. - - (5,000,000) (2,500,000) - - - - Modification of Terms of Share-based Payment Transactions A modification to the terms of share-based payment transactions occurs when the Board accepts a key management personnel’s loan request to exercise fully vested options under the Employee Loan Scheme through a LRL in lieu of cash payment of the exercise price. Please refer to Section E, Financial assistance under the employee option plan, for details of the terms of the loans granted to these key management personnel. FINANCIAL ASSISTANCE UNDER THE EMPLOYEE SHARE OPTION PLAN LRLs advanced to key management personnel during the year ended 30 June 2017 amounted to $560,000 (2016: $2,317,500). Interest on the loans during the period has been accrued at rates of between 1.50% and 2.00%. 48 DIRECTORS’ REPORT DIRECTORS’ REPORT 49 DIRECTORS’ REPORT. REMUNERATION REPORT (AUDITED) F. ADDITIONAL INFORMATION The Company has applied the fair value measurement provisions of AASB 2 Share-based Payment for all options granted to Directors and employees. The fair value of such grants is being amortised and disclosed as part of Director and employee remuneration on a straight-line basis over the vesting period. Options granted as part of Director and employee remuneration have been valued using the Black-Scholes Option Pricing Model, which takes account of factors including the option exercise price, the current level and volatility of the underlying share price, the risk-free interest rate, expected dividends on the underlying share, current market price of the underlying share and the expected life of the option. G. SHARES UNDER OPTION All unissued ordinary shares of the Company under option (relating to key management personnel and other personnel) as at 30 June 2017: DATE OPTIONS GRANTED EXPIRY DATE EXERCISE PRICE OF OPTIONS NUMBER UNDER OPTION 30-Sep-13 21-Nov-13 24-Feb-14 21-Nov-14 8-Dec-14 6-Mar-15 30-Nov-15 30-Nov-15 1-Feb-16 1-Feb-16 18-Mar-16 18-Mar-16 20-May-16 20-Jul-16 4-Nov-16 2-Dec-16 14-Dec-16 30-Jun-17 2-Oct-17 21-Nov-17 24-Feb-18 21-Nov-18 11-Dec-18 6-Mar-19 30-Nov-19 30-Nov-20 31-Jan-21 30-Nov-21 18-Mar-20 18-Mar-20 20-May-20 28-Jun-21 11-Oct-21 2-Dec-20 12-Dec-20 20-Mar-21 $0.544 $0.761 $0.730 $1.080 $0.850 $0.790 $0.560 $0.400 $0.390 $0.390 $0.395 $0.551 $0.680 $0.405 $0.730 $1.060 $0.930 $0.640 200,000 5,000,000 1,350,000 1,000,000 2,350,000 2,000,000 7,111,666 400,000 1,500,000 1,500,000 1,500,000 2,500,000 1,000,000 200,000 200,000 2,000,000 2,500,000 1,989,255 34,300,921 This is the end of the audited remuneration report. LEAD AUDITOR’S INDEPENDENCE DECLARATION The lead auditor’s independence declaration is set out on page 52 and forms part of the Directors’ report for the financial year ended 30 June 2017. Signed in accordance with a resolution of the Directors. On behalf of the Board DR R NEWMAN CEO & Managing Director 22 August 2017 50 DIRECTORS’ REPORT Captured: 20/08/2013 Widgiemooltha WA Australia DIRECTORS’ REPORT 51 52 52 AUDITOR’S DECLARATION Captured: 13/06/2017 San Diego, CA, US 53 27KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.Liability limited by a scheme approved under ProfessionalStandards Legislation.Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of Nearmap Ltd I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended 30 June 2017 there have been: i.no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and ii.no contraventions of any applicable code of professional conduct in relation to the audit. KPMG Trent Duvall Partner Sydney 22 August 2017“ Nearmap is an essential tool for our development business. This product allows us to maintain current and historical records of construction progress, trouble shoot logistical site issues, … and monitor competitive activity… this product is a must have. Highly recommended!” Craig D’costa, Project Director, Sekisui House. Captured: 20/08/2013 Widgiemooltha WA Australia Captured: 20/08/2013 Widgiemooltha WA Australia Captured: 20/08/2013 Widgiemooltha WA Australia Captured: 20/08/2013 Widgiemooltha WA Australia CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2017. Revenue Other income TOTAL REVENUE Employee benefits expense Amortisation and depreciation Net foreign exchange differences Other operational expenses TOTAL EXPENSES LOSS BEFORE TAX Income tax expense LOSS AFTER TAX OTHER COMPREHENSIVE INCOME Items that may be reclassified to profit or loss Exchange differences on translation of foreign operations Unrealised loss on cash flow hedges Income tax associated with these items NOTES 3 3 4 4 6 CONSOLIDATED 2017 $’000 40,666 399 41,065 (22,741) (7,468) (475) (11,915) (42,599) (1,534) (3,770) (5,304) 4 (67) 20 2016 $’000 30,882 407 31,289 (20,303) (5,642) (90) (9,947) (35,982) (4,693) (2,442) (7,135) 1 (44) 13 TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO MEMBERS OF THE COMPANY (5,347) (7,165) LOSS PER SHARE ATTRIBUTABLE TO THE ORDINARY EQUITY HOLDERS OF THE COMPANY Basic loss per share (cents per share) Diluted loss per share (cents per share) 13 13 (1.41) (1.41) (2.01) (2.01) The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes. Captured: 20/03/2016 West Melbourne, VIC, Australia FINANCIAL REPORT 57 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2017. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2017. CURRENT ASSETS Cash and cash equivalents Trade receivables Other current receivables TOTAL CURRENT ASSETS NON-CURRENT ASSETS Plant and equipment Intangible assets Deferred tax assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Unearned income Employee benefits Other current liabilities Current tax liabilities TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Deferred tax liabilities Employee benefits TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity Reserves Profits reserve Accumulated losses TOTAL EQUITY CONSOLIDATED NOTES 2017 12 8 11 10 6 3 6 7 $’000 28,338 7,051 1,532 36,921 10,610 24,824 2,060 37,494 74,415 1,609 25,171 2,441 2,039 298 31,558 5,594 105 5,699 37,257 37,158 51,446 11,667 7,078 (33,033) 37,158 2016 $’000 12,189 4,273 1,774 18,236 6,167 17,240 2,624 26,031 44,267 1,339 18,908 1,731 1,005 123 23,106 2,525 143 2,668 25,774 18,493 28,779 10,365 7,078 (27,729) 18,493 CONTRIBUTED EQUITY ACCUMULATED LOSSES PROFITS RESERVE SHARE BASED PAYMENTS RESERVE OTHER RESERVES TOTAL EQUITY $’000 $’000 $’000 $’000 $’000 $’000 CONSOLIDATED AT 1 JULY 2016 Loss for the year Other comprehensive income: Changes in fair value of cash flow hedges Exchange differences on translation of foreign operations 28,779 - - - (27,729) (5,304) - - 7,078 10,657 - - - - - - TOTAL COMPREHENSIVE INCOME FOR THE YEAR 28,779 (33,033) 7,078 10,657 Transactions with owners of the Company: Share issue Loan share options exercised Share options exercised Share-based payment transactions AT 30 JUNE 2017 19,972 2,089 606 - - - - - - - - - 51,446 (33,033) 7,078 - - - 1,345 12,002 (292) - (47) 4 (335) - - - - 18,493 (5,304) (47) 4 13,146 19,972 2,089 606 1,345 (335) 37,158 CONTRIBUTED EQUITY ACCUMULATED LOSSES PROFITS RESERVES SHARE BASED PAYMENTS RESERVE OTHER RESERVE TOTAL EQUITY $’000 $’000 $’000 $’000 $’000 $’000 CONSOLIDATED AT 1 JULY 2015 Loss for the year Other comprehensive income: Changes in fair value of cash flow hedges Exchange differences on translation of foreign operations TOTAL COMPREHENSIVE INCOME FOR THE YEAR Transactions with owners of the Company: Loan share options exercised Share options exercised Share-based payment transactions AT 30 JUNE 2016 27,621 - - - - 1,139 19 - (20,594) (7,135) - - (7,135) - - - 7,078 8,737 - - - - - - - - - - - - - 1,920 10,657 (262) - (31) 1 (30) - - - 22,580 (7,135) (31) 1 (7,165) 1,139 19 1,920 (292) 18,493 28,779 (27,729) 7,078 The above consolidated statement of financial position should be read in conjunction with the accompanying notes. The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. 58 FINANCIAL REPORT FINANCIAL REPORT 59 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2017. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees1 Interest received Other receipts R&D refund received Income taxes (paid) / received NET CASH FROM OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Purchase of plant and equipment Payments for development costs Proceeds from sale of plant and equipment NET CASH USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from share offer Proceeds from exercise of share options Proceeds from exercise of loans share options Transfers to non cash trust deposits NET CASH FROM FINANCING ACTIVITIES NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at beginning of year Effect of movement in exchange rates on cash held CASH AND CASH EQUIVALENTS AT END OF YEAR NOTES 12 12 CONSOLIDATED 2016 $’000 37,286 (38,703) 454 - 1,828 420 1,285 (3,035) (4,427) 72 (7,390) - 19 1,139 (112) 1,046 (5,059) 17,169 79 12,189 2017 $’000 48,016 (44,741) 346 73 - (22) 3,672 (6,377) (3,750) 10 (10,117) 19,972 606 2,089 - 22,667 16,222 12,189 (73) 28,338 1 Includes capture costs in Australia and the US of $2,269,000 and $7,100,000 respectively (2016: $1,384,000 and $4,647,000). The notes include information which is required to understand the financial statements and is material and relevant to the operations, financial position and performance of the Group. The notes are organised into the following sections: A. BASIS OF PREPARATION 1. Reporting entity 2. Summary of significant accounting policies B. KEY FINANCIAL RESULTS 3. Segment results and revenue 4. Expenses 5. Share based payment plan 6. Income tax C. CAPITAL STRUCTURE AND FINANCIAL RISK MANAGEMENT 7. Contributed equity 8. Financial instruments – fair value and risk management 9. Dividends paid on ordinary shares D. INVESTING ACTIVITIES 10. Intangibles 11. Plant and equipment 12. Cash flow reconciliation E. OTHER 13. Earnings per share 14. Expenditure commitments 15. Parent entity information 16. Group entities 17. Auditor’s remuneration 18. Related parties 19. Contingent liabilities 20. Subsequent events A. BASIS OF PREPARATION IN THIS SECTION This section sets out the basis upon which the Group’s financial statements are prepared as a whole. Specific accounting policies are described in their respective notes to the financial statements. This section also shows information on new accounting standards, amendments and interpretations, and whether they are effective in 2017 or later years. We explain how these changes are expected to impact the financial position and performance of the Group. The financial report has been prepared on a going concern basis, based on the Group’s cash flows for the current year and estimated profits and cash flows for future years 1. REPORTING ENTITY Nearmap Ltd (the ‘Company’) is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange (ASX). The Company’s registered office is located at Level 6, 6-8 Underwood Street, Sydney NSW 2000. These consolidated financial statements as at 30 June 2017 comprise the Company and its subsidiaries (the ‘Group’). The Group is a for-profit entity and the nature of the operations and principal activities of the Group are described in the Directors’ report. The Group is primarily involved in the provision of online PhotoMap content via its 100% owned subsidiaries, Nearmap Australia Pty Ltd and Nearmap US Inc. The consolidated financial statements for the year ended 30 June 2017 were authorised for issue in accordance with a resolution of the Directors on 22 August 2017. The above consolidated statement of cash flows should be read in conjunction with the accompanying notes. 60 FINANCIAL REPORT FINANCIAL REPORT 61 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. A. BASIS OF PREPARATION 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Significant accounting policies appear within the respective note disclosure. Other relevant policies are in this section. a. Basis of accounting The consolidated financial statements are general purpose financial statements which have been prepared in accordance with Australian Accounting Standards (AASBs) issued by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated financial statements also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The consolidated financial statements have been prepared on a historical cost basis, except for the revaluation of certain financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted. The Group is of a kind referred to in ASIC Corporations (Rounding in Financial/ Directors’ Reports) Instrument 2016/191 and in accordance with that instrument, amounts in the consolidated financial report and Directors’ report have been rounded off to the nearest thousand dollars, unless otherwise stated. b. Changes in accounting policies and new standards and interpretations not yet adopted A number of new standards and amendments to standards are effective for financial years commencing on or after 1 July 2017. AASB 9 Financial Instruments was issued in December 2014 and includes revised guidance on the classification and measurement of financial instruments, including a new expected credit loss model for calculating impairment on financial assets, and the new general hedge accounting requirements. This standard becomes mandatory for the Group’s 30 June 2019 financial statements. The Group acknowledges that changes as a result of AASB 9 may result in earlier recognition of impairment losses on receivables. The Group currently applies AASB 139 to account for hedges of foreign exchange exposures, which the group predicts will qualify for hedge accounting under AASB 9. As a result, present hedge relationships are expected to continue to be treated as hedges. When adopted, the standard will not have a material impact on the financial statements. AASB 15 Revenue from Contracts with Customers was issued in December 2014 and provides a single comprehensive model for revenue recognition based on the satisfaction of performance and obligations and additional disclosures about revenue. It replaces AASB 118 Revenue and related interpretations. This standard becomes mandatory for the Group’s 30 June 2019 financial statements. The Group is assessing the new standard’s impact and currently does not anticipate a significant impact on the Group’s financial statements on initial application. AASB 16 Leases was issued in February 2016 and introduced changes to lessee accounting. It requires a lessee to recognise a right-of-use asset representing its rights to use the underlying lease asset and a lease liability representing its obligations to make lease payments other than short- term leases or leases of low-value assets on statement of financial position. This will replace the operating/finance lease distinction and accounting requirements prescribed in AASB 117 Leases. This standard becomes mandatory for the Group’s 30 June 2020 financial statements. The Group has completed a preliminary assessment of the potential impact on the consolidated financial statements resulting from the application of AASB 16 with respect to existing leases (primarily in relation to property and aviation service contracts) for continuing operations. The standard will have an impact on key financial measures such as EBITDA, EBIT and net assets, due to the standard replacing straight line operating lease expenses with a depreciation charge for the lease asset and interest expense for the lease liability. The extent of the impact is under evaluation. The Group does not plan to adopt these standards early. d. Significant accounting judgments, estimates and assumptions The carrying amount of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key judgments and estimates which are material to the financial report are found in the following notes: • Note 6: Income tax • Note 10: Intangibles e. Foreign currencies (I) FOREIGN CURRENCY TRANSACTIONS Both the functional and presentation currency of the Company and its Australian subsidiaries is Australian dollars (A$). Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. Foreign currency differences are generally recognised in profit or loss. However, foreign currency differences arising from the translation of qualifying cash flow hedges (to the extent that the hedges are effective) are recognised in OCI. (II) FOREIGN OPERATIONS The assets and liabilities of foreign operations are translated into Australian dollars at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into Australian dollars at the exchange rates at the dates of the transactions. Foreign currency differences are recognised in OCI and accumulated in the translation reserve. A. BASIS OF PREPARATION c. Basis of consolidation The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra-group transactions have been eliminated. Subsidiaries are entities controlled by the Company. The Company 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. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. When the Company ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, jointly controlled entity or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Company had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss. 62 FINANCIAL REPORT FINANCIAL REPORT 63 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. B. KEY FINANCIAL RESULTS IN THIS SECTION This section explains the results and performance of Nearmap Ltd and provides additional information about those individual line items in the financial statements that the Directors consider most relevant in the context of the operations of the entity, including: a) Accounting policies that are relevant for understanding the items recognised in the financial statements. b) Analysis of the Group’s result for the year by reference to key areas, including: segment results and revenue, operational expenses, personnel costs including share-based payments and income tax. 3. SEGMENT RESULTS AND REVENUE This note provides results by operating segment for the year ended 30 June 2017. Operating segments are reported in a manner that is consistent with the internal reporting provided to the Chief Operating : Decision Maker. The Chief Operating Decision Maker has been identified as the Nearmap Board who ultimately makes strategic decisions. This note also provides additional information on revenue, including types of revenue and the respective recognition criteria. (I) SEGMENT REPORTING An overview of the operating segments is provided below: SEGMENT Australia United States Corporate INFORMATION Responsible for all sales and marketing efforts in Australia. Responsible for all sales and marketing efforts in the United States. Holds all the IP and product “know-how” which allows Nearmap to deliver its product offering, being online aerial photomapping. The segment facilitates the day to day survey operations globally. Cost of revenue are all the costs directly attributable to the ongoing delivery of the subscription product, including amortisation of capture costs. General and administration costs for the Corporate segment represent all operating expenses and product design and uncapitalised development expenses. Sales and marketing costs include direct in-country costs. The assets and liabilities of the Group are reported and reviewed by the Chief Operating Decision Maker in total and not allocated by operating segment. Therefore, operating segment assets and liabilities are not disclosed. B. KEY FINANCIAL RESULTS (CONT.) YEAR ENDED 30 JUNE 2017 Total revenue Cost of revenue1 GROSS PROFIT Sales & marketing General & administration SEGMENT CONTRIBUTION Amortisation & depreciation2 FX loss Income tax expense LOSS AFTER TAX YEAR ENDED 30 JUNE 2016 Total revenue Cost of revenue1 GROSS PROFIT Sales & marketing General & administration SEGMENT CONTRIBUTION Amortisation & depreciation2 FX Gain Income tax expense LOSS AFTER TAX 1 Includes amortisation of capitalised capture costs. 2 Includes amortisation and depreciation of corporate assets. AUSTRALIA $’000 UNITED STATES $’000 CORPORATE $’000 36,292 (3,538) 32,754 (8,260) (3,620) 20,874 4,301 (4,578) (277) (8,578) (3,824) (12,679) 472 - 472 - (6,847) (6,375) AUSTRALIA $’000 UNITED STATES $’000 CORPORATE $’000 29,746 (2,828) 26,918 (7,774) (2,693) 16,451 1,002 (3,036) (2,034) (5,755) (4,151) (11,940) 541 - 541 - (6,660) (6,119) TOTAL $’000 41,065 (8,116) 32,949 (16,838) (14,291) 1,820 (2,881) (473) (3,770) (5,304) TOTAL $’000 31,289 (5,864) 25,425 (13,529) (13,504) (1,608) (2,995) (90) (2,442) (7,135) 64 FINANCIAL REPORT FINANCIAL REPORT 65 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. B. KEY FINANCIAL RESULTS (CONT.) ACCOUNTING POLICY – REVENUE RECOGNITION AND MEASUREMENT Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific revenue recognition criteria must also be met before revenue is recognised: On-demand revenue On-demand revenue is recognised in accordance with the percentage of completion method. The stage of completion is measured by reference to percentage area captured to date as a percentage of the total estimated capture area for each contract. Subscription revenue Subscription revenue is recognised over the life of the contract in line with when the significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, and the amount of revenue can be measured reliably. The timing of the transfer of risks and rewards varies depending on the individual terms of the subscription agreement. Royalty income Royalty income is earned through third parties who sell Nearmap imagery on behalf of the Group. It is recognised when the contract of sale between the parties has been signed. Grant income Grant income is the New South Wales payroll grant of $73,000 received from Office of State Revenue. It is recognised when incremental headcounts are hired for new jobs created. (II) TOTAL REVENUE AND OTHER INCOME Interest income Interest income is recognised as interest accrues using the effective interest method. Unearned revenue Prepaid amounts received from customers in advance are deferred to the relevant future subscription agreement periods. Unearned revenue comprises photo mapping subscription licence service fees charged, the revenue for which is primarily recognised in the profit or loss over the subscription period. Unearned revenue at 30 June 2017 was $25,171,000 (2016: $18,908,000). Subscription revenue On-demand revenue Royalty income Grant income Interest income Gain on disposal of assets CONSOLIDATED 2016 $’000 30,592 75 81 134 30,882 407 - 407 2017 $’000 40,351 162 80 73 40,666 389 10 399 TOTAL REVENUE AND OTHER INCOME 41,065 31,289 B. KEY FINANCIAL RESULTS (CONT.) 4. EXPENSES (I) EMPLOYEE BENEFITS EXPENSE Share based payment expense Defined contribution plan expense Other employee benefits expenses TOTAL EMPLOYEE BENEFITS EXPENSE (II) OTHER OPERATIONAL EXPENSES Servicing and storage costs Operating lease expenses Travel and office costs Audit, consulting and legal fees Insurance costs Marketing costs Subscription costs All other operating expenses TOTAL OTHER OPERATIONAL EXPENSES 2017 2016 CONSOLIDATED $’000 1,345 1,278 20,118 22,741 $’000 1,920 1,044 17,339 20,303 2017 2016 CONSOLIDATED $’000 2,221 982 1,882 1,912 365 2,170 1,346 1,037 11,915 $’000 1,790 917 1,560 1,652 304 1,532 1,128 1,064 9,947 66 FINANCIAL REPORT FINANCIAL REPORT 67 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. B. KEY FINANCIAL RESULTS (CONT.) 5. SHARE BASED PAYMENT PLAN An Employee Share Option Plan has been established whereby Directors and certain employees of the consolidated entity may be issued with options over the ordinary shares of the Company. The options, which are usually issued for nil consideration at an exercise price calculated with reference to prevailing market prices, are issued in accordance with terms established by the Directors of the Company. The options are generally issued for four years and are exercisable on various dates (usually in two or three equal annual tranches when vested) within four years from the issue date. The options cannot be transferred without the approval of the Company’s board and are not quoted on the ASX. Nearmap’s Employee Share Option Plan also includes an Employee Loan Scheme that permits Nearmap to grant financial assistance to employees by way of LRLs to enable them to exercise options and acquire shares. KEY ESTIMATES AND JUDGMENTS The Group estimates the fair value of equity- settled transactions (share options and LRLs at the date at which they are granted.) The fair value is determined using the Black- Scholes model and includes assumptions in the following areas: risk free rate, volatility and estimated service periods. The expected life of the options is based on historical data and not necessarily indicative of exercise patters that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily the actual outcome. No other features of options granted were incorporated into the measurement of fair value. There are no voting or dividend rights attached to the options. ACCOUNTING POLICY - RECOGNITION AND MEASUREMENT OF SHARE-BASED PAYMENTS In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of the Company (‘market conditions’) if applicable. The fair value of equity-settled transactions is recognised, together with the corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (‘vesting period’). The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity instruments that will ultimately vest. The profit or loss charge or credit for a period represents the movement in cumulative expense recognised at the beginning and end of that period. No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition. If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award. The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share. MOVEMENT IN SHARES OPTIONS - SHARE BASED PAYMENTS Number of options outstanding at the beginning of the year Options lapsed Options exercised – loans granted Options exercised – cash payments Options granted TOTAL NUMBER OF OPTIONS OUTSTANDING AT THE END OF THE YEAR 2017 37,445,000 (8,200,001) (1,033,333) (800,000) 6,889,255 34,300,921 2016 30,555,000 (14,005,000) (500,000) (250,000) 21,645,000 37,445,000 B. KEY FINANCIAL RESULTS (CONT.) RECONCILIATION OF OPTIONS ISSUED UNDER EMPLOYEE SHARE OPTION PLAN 30 JUNE 2017 BALANCE AT 1 JULY GRANTED LAPSED/ FORFEITED EXERCISED BALANCE AT 30 JUNE VESTED & EXERCISABLE 30 JUNE 17 Total number of options Weighted average price $ 30 JUNE 16 Total number of options Weighted average price $ 37,445,000 6,889,255 (8,200,001) (1,833,333) 34,300,921 16,117,072 0.64 0.86 0.70 0.49 0.68 0.71 30,555,000 21,645,000 (14,005,000) (750,000) 37,445,000 6,025,000 0.79 0.53 0.57 0.14 0.64 0.69 As at 30 June 2017, there were 34,300,921 options outstanding at exercise prices ranging from $0.39 to $1.08 and a weighted average remaining contractual life of 4.11 years. Expenses arising from share-based payment transactions during the year was $1,345,000 (2016: $1,920,000). The following table lists the options and LRLs granted and the inputs to the model used to measure their fair value for the years ended 30 June 2017 and 30 June 2016 to key management personnel: MODEL INPUTS TO SHARE OPTION AND LRL GRANTS 30 JUNE 2017 (KEY MANAGEMENT PERSONNEL) GRANT DATE EXPIRY DATE EXERCISE PRICE $ NUMBER OF OPTIONS / LRLS GRANTED FAIR VALUE AT GRANT DATE $ EXPECTED PRICE VOLATILITY % RISK FREE INTEREST RATE % EXPECTED LIFE (YEARS) 30-JUN-16 30-Nov-15 30-Nov-15 31-Jan-16 18-Mar-16 18-Mar-16 20-May-16 30-JUN-17 2-Dec-16 14-Dec-16 20-Mar-17 20-Mar-17 20-Mar-17 30-Nov-19 30-Nov-19 31-Jan-21 18-Mar-20 18-Mar-20 20-May-20 2-Dec-20 12-Dec-20 20-Mar-21 20-Mar-21 20-Mar-21 0.56 0.56 0.39 0.40 0.551 0.68 1.06 0.93 0.64 0.64 0.64 4,500,000 4,750,000 3,000,000 1,500,000 2,500,000 1,000,000 2,000,000 2,500,000 697,531 775,034 516,690 0.1135 0.1157 0.1486 0.1547 0.1125 0.1532 0.2428 0.2480 0.1783 0.1783 0.1783 53 53 53 53 53 58 66 65 67 67 67 2.19 2.19 1.89 1.89 2.05 1.73 2.12 2.09 2.14 2.14 2.14 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.5 1 These relate to grants of LRLs to key management personnel under the Employee Loan Scheme. 68 FINANCIAL REPORT FINANCIAL REPORT 69 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. B. KEY FINANCIAL RESULTS (CONT.) 6. INCOME TAX KEY ESTIMATES AND JUDGMENTS DEFERRED TAX Pursuant to AASB 112 Income Taxes, the Company has assessed its best estimate of the probability that future taxable profits will be available against which the Group can utilise its unused tax losses and deductible temporary differences in future periods. ACCOUNTING POLICY - RECOGNITION AND MEASUREMENT OF INCOME TAX Research and development tax incentive The Group accounts for the benefit of refundable research and development tax incentives as government grant income, which is recognised when there is reasonable assurance that the Group will comply with the conditions that attach to the incentive and that it will be received. The income is recognised in Other Income on a systematic basis over the periods in which the Group recognises the related research and development expense. The Group accounts for any non-refundable research and development tax credits as an income tax benefit. Income tax Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date. Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose. Deferred income tax liabilities are recognised for all taxable temporary differences: 70 FINANCIAL REPORT • except where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and • in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, except where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised: • except where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and • in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority. Income taxes relating to items recognised directly in equity are recognised in equity and not in the profit and loss. Tax consolidation The Company and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation. The head entity, Nearmap Ltd, and the controlled entities in the tax consolidated Group account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated Group continues to be a standalone taxpayer in its own right. In addition to its own current and deferred tax amounts, the Company also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated Group. B. KEY FINANCIAL RESULTS (CONT.) INCOME TAX EXPENSE Current tax expense Deferred tax expense NUMERICAL RECONCILIATION OF INCOME TAX EXPENSE TO PRIMA FACIE TAX PAYABLE Loss before income tax Tax at the Australian tax rate of 30% (2016:30%) Tax effect of amounts which are not deductible (taxable) in calculating taxable income: Effect of higher tax rate in the US R&D grant Shared based payments expense Entertainment expenses Recognition of previously unrecognised deductible temporary differences Current and prior year losses for which no deferred tax asset is recognised Over provision in the prior year Other 2017 $’000 (206) (3,564) (3,770) (1,534) 460 665 137 (404) (40) 801 (6,755) 1,366 - (3,770) CONSOLIDATED 2016 $’000 (869) (1,573) (2,442) (4,693) 1,408 600 266 (532) (79) - (4,320) 184 31 (2,442) The Group has an unrecognised deferred tax asset of $10,931K in respect of tax losses as at 30 June 2017. FINANCIAL REPORT 71 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. B. KEY FINANCIAL RESULTS (CONT.) C. CAPITAL STRUCTURE AND FINANCIAL RISK MANAGEMENT DEFERRED TAX BALANCES 2017 R&D credits carry forward Tax losses Unearned revenue Provisions and other accruals Plant and equipment Intangible assets Other Derivative instruments Unrealised foreign exchange Loss NET TAX ASSETS/(LIABILITIES) DEFERRED TAX BALANCES 2016 R&D credits carry forward Tax losses Unearned revenue Provisions and other accruals Plant and equipment Intangible assets Other Derivative instruments Unrealised foreign exchange Loss BALANCE AT 1 JULY $’000 RECOGNISED IN THE STATEMENT OF PROFIT OR LOSS $’000 CHANGE IN RECOGNISED AMOUNT $’000 BALANCE AT 30 JUNE $’000 ASSETS $’000 LIABILITIES $’000 1,359 1,957 427 749 782 (5,144) 40 38 (109) 99 (661) (1,957) 1,272 (48) (728) (1,578) (13) - 149 (3,564) (24) - - (65) - - - 20 - (69) 674 - 1,699 636 54 (6,722) 27 58 40 - - 1,699 362 (1) - - - - 674 - - 274 55 (6,722) 27 58 40 (3,534) 2,060 (5,594) BALANCE AT 1 JULY $’000 RECOGNISED IN THE STATEMENT OF PROFIT OR LOSS $’000 CHANGE IN RECOGNISED AMOUNT $’000 BALANCE AT 30 JUNE $’000 ASSETS $’000 LIABILITIES $’000 - 4,300 39 341 (52) (2,359) - 17 - 2,102 (1,875) - 240 (2) (1,947) 18 - (109) (1,573) (743) (468) 388 168 836 (838) 22 21 - (614) 1,359 1,957 427 749 782 (5,144) 40 38 (109) 99 - 1,957 427 255 (15) - - - - 2,624 1,359 - - 494 797 (5,144) 40 38 (109) (2,525) NET TAX ASSETS/(LIABILITIES) 2,286 IN THIS SECTION This section outlines how Nearmap manages its capital structure and discusses the Group’s exposure to various financial risks and how the Group manages these risks. Capital Risk Management The Group’s objective in managing capital is to safeguard its ability to continue as a going concern, so it can continue to commercialise intellectual property with the ultimate objective of providing returns to shareholders whilst maintaining an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure the Company may issue new shares, sell assets, consider joint ventures and may return capital in some form to shareholders. 7. CONTRIBUTED EQUITY Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Details in relation to share option movements and the share incentive scheme are contained in note 5. MOVEMENT IN SHARES ON ISSUE Balance at the beginning of the year Issue of shares during the year Issued from exercise of share options Issued from exercise of loans share options Repayment of loans BALANCE AT THE END OF THE YEAR 2017 2016 NUMBER OF SHARES $’000 NUMBER OF SHARES $’000 356,246,101 29,607,081 800,000 1,033,333 - 387,686,515 28,779 19,972 606 - 2,089 51,446 355,496,101 27,621 - 250,000 500,000 - 356,246,101 - 19 - 1,139 28,779 On 24 November 2016, the Company completed a $20M capital raising (before costs) through a fully underwritten institutional placement of 28,571,429 new fully paid ordinary shares at the offer price of $0.70. The Company incurred $753K in transaction costs, which have been recorded in equity, net of tax. On 3 January 2017, the Company completed a $725K share purchase plan through the issue of 1,035,652 new fully paid ordinary shares. During the year, total loans of $2,089K and accruing interest of $110K was repaid to the Company, thereby releasing 8,800,000 shares previously under holding lock. TERMS AND CONDITIONS OF CONTRIBUTED EQUITY Ordinary shares have the right to receive dividends as declared and in the event of winding up of the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on the shares held. 72 FINANCIAL REPORT FINANCIAL REPORT 73 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. C. CAPITAL STRUCTURE AND FINANCIAL RISK MANAGEMENT (CONT.) C. CAPITAL STRUCTURE AND FINANCIAL RISK MANAGEMENT (CONT.) 8. FINANCIAL INSTRUMENTS – FAIR VALUE AND RISK MANAGEMENT ACCOUNTING POLICY – FINANCIAL INSTRUMENTS CARRIED AT FAIR VALUE The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. The fair value of these instruments is categorised into different levels of the fair value hierarchy based on the inputs used in the valuation techniques as follows: • Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can assess 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 (as prices) or indirectly (derived from prices). • Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). The Group recognises transfers between levels of the fair value hierarchy as of the end of the reporting period which the transfer has occurred. ACCOUNTING POLICY – DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGE ACCOUNTING The Group holds derivative financial instruments to hedge its foreign currency risk exposures. These derivative instruments are designated as cash flow hedging instruments. The effective portion of changes in the fair value of the derivative is recognised in OCI and accumulated in the hedging reserve. Any ineffective portion of changes in the fair value of the derivatives is immediately recognised in profit or loss. The amount accumulated in equity is retained in OCI and reclassified to profit or loss in the same period or periods during which the hedged item affects profit or loss. The Group’s principal financial instruments comprise cash, short-term deposits and derivatives. The Group is primarily exposed to the following risks arising from financial instruments: • Market risk, particularly in relation to foreign currencies (see 8(ii)); • Credit risk (see 8(iii)). This note provides information about the Group’s exposure to the above risks and its objectives, policies and processes for measuring and managing those risks. (I) RISK MANAGEMENT FRAMEWORK The Company’s board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. The board of Directors have established the Audit and Risk Management Committee which is responsible for developing and monitoring the Group’s risk management policies. The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies are reviewed regularly to reflect changes in the market and the Group’s activities. (II) MARKET RISK Market risk is the risk that changes in market prices – such as foreign exchange rates and interest rates – will affect the Group’s income or the value of its holdings of financial instruments. The Group uses derivatives to manage market risk related to foreign currencies. All such transactions are carried out within the guidelines of the Group’s risk management policies. Currency Risk The Group’s functional currency is the Australian dollar (AUD) and it is exposed to currency risk on payments denominated in the United States dollar (USD). The Group uses forward exchange contracts to hedge its currency risk, all of which have a maturity of less than six months from the reporting date. The currency risk relating to payments denominated in USD have been fully hedged, with the forward exchange contracts maturing on the same dates that the forecast payments are expected to occur. These contracts are designated as cash flow hedges. In respect of other monetary assets and liabilities denominated in foreign currencies, the Group’s policy is to ensure the net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary. EXPOSURE TO FOREIGN CURRENCY RISK The summary quantitative data about the Group’s exposure to foreign currency risk is as follows: Cash and cash equivalents Receivables and other assets Payables and other liabilities GROSS EXPOSURE The following significant exchange rates applied during the year: 2017 USD’000 3,368 1,301 1,457 6,126 CONSOLIDATED 2016 USD’000 1,960 288 851 3,099 USD Sensitivity analysis A 10 percent strengthening or weakening of the Australian to US dollar exchange rate would have increased / (decreased) the net assets denominated in foreign currencies by the following amounts: +10% -10% AVERAGE RATE YEAR END SPOT RATE 2017 0.7545 2016 0.7283 2017 0.7692 2016 0.7426 CONSOLIDATED (380) 464 (171) 209 Interest Rate Risk The Group is exposed to changes in interest rates as it relates to the Company’s short- term deposits. The Company monitors changes in interest rates regularly to ensure the best possible return on deposits. Changes to interest rates in this context are not considered a significant financial risk. (III) CREDIT RISK Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers and forward exchange contracts. The Group trades primarily with recognised, creditworthy third parties. Trade And Other Receivables The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. Receivable balances are monitored on an ongoing basis, with the result that the Group’s exposure to bad debts is not significant. 74 FINANCIAL REPORT FINANCIAL REPORT 75 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. C. CAPITAL STRUCTURE AND FINANCIAL RISK MANAGEMENT (CONT.) C. CAPITAL STRUCTURE AND FINANCIAL RISK MANAGEMENT (CONT.) ACCOUNTING POLICY – TRADE AND OTHER RECEIVABLES Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Trade receivables are generally due for settlement within 7 – 60 days. The Group has no reliance on any major customers. Debts which are known to be uncollectible are written off by reducing the carrying amount directly. An allowance account for impairment is used when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms (such as significant financial difficulties of the debtor, probability of bankruptcy, etc). The amount of the impairment loss is recognised in profit or loss within other expenses. When a trade receivable for which an impairment allowance has been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in the income statement. Cash and cash equivalents The Group held cash and cash equivalents with bank and financial institution counterparties which are rated BBB or above based on Standards & Poors ratings. Derivatives The forward exchange contracts are entered into with bank institutions which are rated BBB or above based on Standards & Poors ratings and are authorised in accordance with our Foreign Exchange Risk Management Policy. The carrying amount of the Group’s financial assets represents maximum credit exposure and is as follows: AGEING PROFILE OF TRADE RECEIVABLES Current 31 to 60 days overdue Over 61 days overdue Over 90 days overdue Impairment loss CONSOLIDATED 2017 $’000 6,293 145 431 314 (132) 7,051 2016 $’000 4,119 33 68 225 (172) 4,273 Cash and cash equivalents Trade receivables PREPAYMENTS AND OTHER RECEIVABLES CONSOLIDATED 2017 $’000 28,338 7,051 1,532 2016 $’000 12,189 4,273 1,774 Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of its cash and funding requirements. The Group continually monitors forecast and actual cash flows and the maturity profiles of assets and liabilities to manage its liquidity risk. (IV) FAIR VALUES The fair values of other financial assets and financial liabilities, together with the carrying amounts in the consolidated statement of financial position, at 30 June 2017 and 30 June 2016 is detailed below. FINANCIAL LIABILITIES Forward exchange contracts used for hedging1 CARRYING AMOUNT FAIR VALUE CARRYING AMOUNT (193) (193) (126) 2017 $’000 2017 $’000 2016 $’000 2016 $’000 FAIR VALUE (126) 1 The forward exchange contracts are not quoted in active markets as they are not traded on a recognised exchange. Instead, the Group uses valuation techniques (present value techniques) which use both observable and unobservable market inputs. As these financial instruments use valuation techniques with unobservable inputs that are not significant to the overall valuation, these instruments are included in Level 2 of the fair value hierarchy. There were no transfers between levels of the fair value hierarchy during the year-ended 30 June 2017. The Group has not disclosed the fair values for financial instruments such as short-term trade receivables and payables because their carrying amounts are a reasonable approximation of fair values. 76 FINANCIAL REPORT FINANCIAL REPORT 77 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. CONSOLIDATED This section outlines Nearmap’s investment in intangible assets and property, plant and equipment as well as a broader discussion on the entity’s cash flows. D. INVESTING ACTIVITIES IN THIS SECTION C. CAPITAL STRUCTURE AND FINANCIAL RISK MANAGEMENT (CONT.) 9. DIVIDENDS PAID ON ORDINARY SHARES No dividends were paid or proposed for the year ending 30 June 2017 (2016: nil). FRANKING CREDIT BALANCE The amount of franking credits available for the subsequent financial year are: Franking account balance as at the beginning of the financial year at 30% (2016: 30%) Franking credits utilised through the receipt of R&D credits as at the end of the financial year 2017 $’000 - - - - 2016 $’000 - - - - Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the financial year but not distributed at reporting date. 10. INTANGIBLES KEY ESTIMATES AND JUDGMENTS Capture Costs Pursuant to AASB 138 Intangible Assets, the Company has assessed its best estimate of the probability that the expected future economic benefits attributable to the Group’s digital imagery will flow to the entity. As a result, capture costs directly attributable and necessary to create and upload digital imagery online have been recognised as an intangible asset. Historical usage patterns based on customer map tile requests were used to determine a period of five years over which to amortise the capitalised capture costs. Amortisation of capture costs has been included within ‘depreciation and amortisation expenses’ in the statement of profit or loss and other comprehensive income. Impairment Of Assets The Group assesses impairment at each reporting date by evaluation of conditions specific to the Group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates, including forecasting of profits, cash flows, and discount rates. ACCOUNTING POLICY - IMPAIRMENT OF ASSETS The Group assesses at each reporting period whether there is an indication that an asset (other than goodwill or intangibles with indefinite useful life) may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the assets value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash generating unit (CGU) to which it belongs. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset or CGU is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a revaluation decrease). An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in estimate used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised in the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life. 78 FINANCIAL REPORT FINANCIAL REPORT 79 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. D. INVESTING ACTIVITIES (CONT.) KEY ASSUMPTIONS USED FOR VALUE IN USE CALCULATIONS The Group’s CGUs have been identified according to the business segments. As the Corporate segment does not generate cash inflows independently of the Australia and United States CGUs, its cash flows have been allocated to these CGUs on a reasonable and consistent basis. The recoverable amount of a CGU is determined based on value in use calculations. These calculations use cash flow projections based on 2017 actual results, 2018 financial budgets and 2019 to 2022 financial projections approved by the Board. Discount rate (Australia) Discount rate (USA) Terminal growth rate The discount rate of 16.5% represents the pre-tax discount rate applied to the cash flow projections, based on a market- determined, risk adjusted, post-tax discount rate of 14.0%. The discount rate of 24.4% represents the pre-tax discount rate applied to the cash flow projections, based on a market- determined, risk adjusted, post-tax discount rate of 20.0%. The terminal growth rate of 3.0% represents the growth rate applied to extrapolate cash flows beyond the five year forecast period. The growth rate is based on management’s expectations of the CGUs’ long-term performance. The recoverable amount for the Australia CGU continues to exceed the carrying value. A deterioration in the key assumptions surrounding the USA CGU is likely to result in a value in use that is less than the carrying amount. GOODWILL Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business combination over the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities. Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate the carrying value may be impaired. All goodwill acquired through business combinations has been allocated to the Australian CGU. The recoverable amount of the Australian CGU has been determined based on a value-in-use calculation using cash flow projections based on board approved budgets and 4-year forecast period. No impairment was recognised at 30 June 2017 in relation to goodwill (2016: nil). D. INVESTING ACTIVITIES (CONT.) ACCOUNTING POLICY - RECOGNITION AND MEASUREMENT OF INTANGIBLES Research And Development Costs Intangible assets acquired separately are capitalised at cost and those arising from a business combination are capitalised at fair value as at the date of acquisition. Following initial recognition, the cost model is applied to intangible assets. The amortisation period and method for intangible assets is reviewed at least annually to determine if the useful lives remain appropriate. Where there is an expectation that the amortisation period or method does not match the consumption of the economic benefits embedded within the asset, the useful life of the asset will be adjusted to reflect this change. Intangible assets are tested for impairment where an indicator of impairment exists. Intangibles under development are tested at the cash-generating unit level for impairment annually or at each reporting period where an indicator of impairment exists. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the disposal proceeds received and the carrying amount of the asset and are recognised in the profit or loss when the asset is derecognised. Research costs and costs that do not meet the definition of development costs for the purpose of the Standard are expensed as incurred. An intangible asset arising from development expenditure on an internal project is recognised only when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the development and the ability to measure reliably the expenditure attributable to the intangible asset during its development. Following the initial recognition of the development expenditure, the cost model is applied requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses. Any expenditure so capitalised is amortised over the period of expected benefit from the related project. The carrying value of an intangible asset arising from development expenditure is tested for impairment annually when the asset is not yet available for use or more frequently when an indication of impairment rises during the reporting period. A summary of the amortisation applied to the Group’s intangible assets is as follows: Development Costs, Patents, Capture Costs And Licences Useful lives Finite (generally for a period of 5 – 20 years). Amortisation method used Amortised over the period of expected future benefit. The expected useful life is reviewed annually. Internally generated or acquired and internally generated. Impairment testing Annually as at 30 June for assets not yet available for use and more frequently when an indication of impairment exists. The patents and licences have been wgranted or are expected to be granted for a minimum of 20 years by the relevant government agency with the option of renewal without significant cost at the end of this period provided that the Group meets certain predetermined targets. Accordingly, the patents and licences have been determined to have finite useful lives. 80 FINANCIAL REPORT FINANCIAL REPORT 81 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. D. INVESTING ACTIVITIES (CONT.) GOODWILL $’000 RECONCILIATION OF CARRYING AMOUNT AS AT 30 JUNE 2017 Balance at the beginning of the year Additions Amortisation CLOSING BALANCE AT THE END OF THE YEAR AT 30 JUNE 2017 Cost Accumulated amortisation CLOSING NET BOOK AMOUNT 135 - - 135 135 - 135 GOODWILL $’000 RECONCILIATION OF CARRYING AMOUNT AS AT 30 JUNE 2016 Balance at the beginning of the year Additions Amortisation Transfers to plant and equipment (at net book value) CLOSING BALANCE AT THE END OF THE YEAR AT 30 JUNE 2016 Cost Accumulated amortisation CLOSING NET BOOK AMOUNT 135 - - - 135 135 - 135 DEVELOPMENT COSTS $’000 5,879 3,528 (3,188) 6,219 17,311 (11,092) 6,219 DEVELOPMENT COSTS $’000 5,358 3,872 (2,825) (526) 5,879 13,783 (7,904) 5,879 CAPTURE COSTS $’000 10,379 11,142 (3,643) 17,878 24,160 (6,282) 17,878 CAPTURE COSTS $’000 5,125 7,135 (1,913) 32 10,379 13,018 (2,639) 10,379 OTHER $’000 847 222 (477) 592 1,630 (1,038) 592 OTHER $’000 648 555 (363) 7 847 1,408 (561) 847 TOTAL $’000 17,240 14,892 (7,308) 24,824 43,236 (18,412) 24,824 TOTAL $’000 11,266 11,562 (5,101) (487) 17,240 28,344 (11,104) 17,240 D. INVESTING ACTIVITIES (CONT.) 11. PLANT AND EQUIPMENT ACCOUNTING POLICY – PLANT AND EQUIPMENT Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred. Depreciation is calculated over the estimated useful life of the assets, which is between two and 10 years, on a straight-line basis. The assets’ residual values, useful lives and depreciation methods are reviewed at each financial year end and adjusted if appropriate. Derecognition And Disposal An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected to be obtained from its use. Gains or losses arising from the derecognition of an asset (calculated as the difference between the proceeds received and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised. RECONCILIATION OF CARRYING AMOUNT AS AT 30 JUNE 2017 Balance at the beginning of the year Additions Disposals Depreciation CLOSING BALANCE AT THE END OF THE YEAR AT 30 JUNE 2017 Cost Accumulated depreciation CLOSING NET BOOK AMOUNT OFFICE EQUIPMENT & FURNITURE $’000 824 385 (8) (482) 719 2,219 (1,500) 719 CAMERA SYSTEMS $’000 5,343 5,992 (2) (1,442) 9,891 16,898 (7,007) 9,891 TOTAL $’000 6,167 6,377 (10) (1,924) 10,610 19,117 (8,507) 10,610 82 FINANCIAL REPORT FINANCIAL REPORT 83 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. D. INVESTING ACTIVITIES (CONT.) RECONCILIATION OF CARRYING AMOUNT AS AT 30 JUNE 2016 Balance at the beginning of the year Additions Disposals Depreciation Transfers from intangible assets (at net book value) CLOSING BALANCE AT THE END OF THE YEAR AT 30 JUNE 2016 Cost Accumulated depreciation CLOSING NET BOOK AMOUNT OFFICE EQUIPMENT & FURNITURE $’000 519 665 - (380) 20 824 1,844 (1,020) 824 CAMERA SYSTEMS $’000 3,862 2,390 (114) (1,262) 467 5,343 10,872 (5,529) 5,343 TOTAL $’000 4,381 3,055 (114) (1,642) 487 6,167 12,716 (6,549) 6,167 D. INVESTING ACTIVITIES (CONT.) 12. CASH FLOW RECONCILIATION Cash and short-term deposits in the Statement of Financial Position comprise cash at bank and on hand and short-term deposits with a maturity of three months or less. For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. Cash at bank and short term deposits earn interest at floating rates based on daily bank deposit rates. The Company had no financing facilities as at 30 June 2017 (2016: nil). RECONCILIATION OF NET LOSS TO NET CASH FLOWS FROM OPERATIONS Loss after tax ADJUSTMENT FOR NON-CASH ITEMS Amortisation and depreciation Capitalised amortisation and depreciation Net unrealised exchange differences Share based payment expense LOSS ON DISPOSAL OF NON-CURRENT ASSETS CHANGES IN ASSETS AND LIABILITIES Payables and other current liabilities Receivables Provision for employee benefits Other non-current assets Income tax NET CASH FROM OPERATING ACTIVITIES RECONCILIATION OF CASH Cash and cash equivalents comprises: Cash at bank and on hand Short term deposits at call CONSOLIDATED 2017 $’000 (5,304) 9,232 (1,764) 77 1,345 (10) 7,519 (2,534) 672 (9,369) 3,808 3,672 11,335 17,003 28,338 2016 $’000 (7,135) 6,747 (1,105) 10 1,920 42 2,806 1,809 (89) (6,030) 2,310 1,285 5,319 6,870 12,189 84 FINANCIAL REPORT FINANCIAL REPORT 85 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. E. OTHER IN THIS SECTION This section provides information on items which require disclosure to comply with Australian Accounting Standards and other regulatory pronouncements however are not considered critical in understanding the financial performance or position of the Group. 13. EARNINGS PER SHARE Basic earnings per share is calculated as net profit/loss attributable to shareholders, adjusted to exclude costs of servicing equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted for any bonus element. Diluted earnings per share is calculated as net profit attributable to shareholders, adjusted for: • costs of servicing equity (other than dividends); • the after-tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and • other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares, divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element. Net loss attributable to ordinary equity holders Net loss used in calculating diluted earnings per share CONSOLIDATED 2017 $’000 (5,304) (5,304) 2016 $’000 (7,135) (7,135) Weighted average number of ordinary shares on issue used in the calculation of basic profit per share Weighted average number of ordinary shares on issue used in the calculation of diluted profit per share NUMBER OF SHARES NUMBER OF SHARES 374,994,207 374,994,207 355,572,813 355,572,813 EARNINGS PER SHARE ATTRIBUTABLE TO THE ORDINARY EQUITY SHAREHOLDERS OF THE COMPANY: Basic loss per share (cents per share) Diluted loss per share (cents per share) (1.41) (1.41) (2.01) (2.01) The options granted to employees are considered to be ordinary shares and are included in the determination of diluted earnings per share to the extent to which they are dilutive. There have been no other conversions to, calls of, or subscriptions for ordinary shares or issues of potential ordinary shares since the reporting date and before the completion of these financial statements. E. OTHER (CONT.) 14. EXPENDITURE COMMITMENTS EXPENDITURE COMMITMENTS There are no capital expenditure commitments or hire purchase commitments contracted at 30 June 2017 (2016: nil). ACCOUNTING POLICY – LEASES The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset. Operating lease payments are recognised as an expense in the profit or loss on a straight-line basis over the lease term. Lease incentives are recognised in the income statement as an integral part of the total lease expense. OPERATING LEASE COMMITMENTS Minimum lease payments - Not later than one year - Later than one year and no later than five years AGGREGATE LEASE EXPENDITURE CONTRACTED FOR AT REPORTING DATE 2017 $’000 713 1,585 2,298 2016 $’000 1,176 2,076 3,252 Operating lease commitments relate primarily to commercial office premises and IT related leases. These leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are renegotiated. 86 FINANCIAL REPORT FINANCIAL REPORT 87 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. E. OTHER (CONT.) 15. PARENT ENTITY INFORMATION FINANCIAL POSITION INFORMATION RELATING TO THE COMPANY Current assets Total assets Current liabilities Total liabilities NET ASSETS Contributed equity Reserves Accumulated losses TOTAL SHAREHOLDER EQUITY TOTAL COMPREHENSIVE LOSS OF THE PARENT ENTITY 2017 $’000 16,984 39,900 (194) (3,011) 36,889 51,446 11,868 (26,425) 36,889 (9,389) 2016 $’000 22,240 22,454 (187) (188) 22,266 28,779 10,533 (17,046) 22,266 (1,914) INFORMATION RELATING TO THE COMPANY Commission. Please refer to note 16 for listing of subsidiaries. WHOLLY-OWNED GROUP TRANSACTIONS E. OTHER (CONT.) 16. GROUP ENTITIES The consolidated financial statements incorporate the assets, liabilities and equity of the following subsidiaries in accordance with the accounting policy described in note 2: NAME OF ENTITY Nearmap Australia Pty Ltd Ipernica Ventures Pty Ltd Nearmap Holdings Pty Ltd Nearmap USA Pty Ltd Nearmap Aerospace Inc. Nearmap US, Inc. Nearmap Remote Sensing US, Inc. COUNTRY OF INCORPORATION EQUITY HOLDING 2017 2016 Australia Australia Australia Australia United States United States United States % 100 100 100 100 100 100 100 % 100 100 100 100 100 100 100 17. AUDITOR’S REMUNERATION During the year, the following fees were paid or payable for services provided by the auditor of the Company and its related practices: The parent entity entered into a Deed of Cross Guarantee (the Deed) dated 31 May 2017 with its subsidiaries. Under the Deed each company guarantees the debts of the others. By entering into the Deed, the wholly owned entities have been relieved from the requirement to prepare a financial report and Directors’ report under Class Order 98/1418 (as amended) issued by the Australian Securities and Investments LOANS TO WHOLLY-OWNED SUBSIDIARIES Beginning of the year Loans advanced Provision Loan repayments END OF THE YEAR 88 FINANCIAL REPORT Details of the contingent liabilities of the Group are contained in note 19. There are no contingent liabilities of the parent entity. Details of the contractual commitments of the Group are contained in note 14. There are no contractual commitments of the parent entity. Loans made by the Company to and from wholly-owned subsidiaries are repayable on demand and unsecured. No interest is charged on the loans (2016: nil). AUDIT SERVICES PAID TO KPMG Remuneration paid to KPMG for audit or review of the financial statements of the entity NON-AUDIT SERVICES PAID TO KPMG - Other assurance matters for the entity and any other entity in the Group - Taxation advisory for the entity and any other entity in the Group - Other advisory for the entity and any other entity in the Group 2017 $’000 15,429 26,622 (4,960) (14,175) 22,916 2016 $’000 8,380 7,583 - (534) 15,429 CONSOLIDATED 2017 $ 110,025 - 17,600 39,850 57,450 2016 $ 92,300 17,500 88,976 53,547 160,023 FINANCIAL REPORT 89 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017. DIRECTORS’ DECLARATION. E. OTHER (CONT.) 18. RELATED PARTIES (A) COMPENSATION OF KEY MANAGEMENT PERSONNEL Short-term employee benefits Post-employment benefits Termination benefits Share-based payments (B) OTHER RELATED PARTY TRANSACTIONS Other than the loans granted to key management personnel under the employee loan scheme as disclosed in the Remuneration report, there have been no sales, purchases or other transactions with related parties during the year ended 30 June 2017 (2016: nil). 19. CONTINGENT LIABILITIES As at 30 June 2017, the Directors are not aware of any contingent liabilities in relation to the Company or the Group. 20. SUBSEQUENT EVENTS On 21 August 2017, Nearmap Australia Pty Limited entered into a contract for the lease of office premises located at Level 4, Tower One, International Towers Sydney, Barangaroo, NSW 2000 from Lendlease (Millers Point) Pty Limited as trustee for Lendlease (Millers Point) Trust. On 14 August 2017, Nearmap appointed Ms Sue Klose as a Non-executive Director of the Company. Sue is an independent director pursuant to the ASX Corporate Governance Council’s definition of independence. 2017 $’000 3,123 142 201 1,082 4,548 2016 $’000 3,097 148 251 1,508 5,004 Except for the above, no other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in future financial years. In accordance with a resolution of the Directors of the Company, I state that: In the opinion of the Directors: (a) the financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2017 and of its performance for the year ended on that date; and (ii) complying with Accounting Standards and Corporations Regulations 2001 and other mandatory professional reporting standards; and (b) the Company has included in the notes to the financial statements an explicit and unreserved statement of compliance with International Financial Reporting Standards; (c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and (d) the remuneration disclosures set out in the Directors’ report (as part of audited remuneration report) for the year ended 30 June 2017, comply with section 300A of the Corporations Act 2001.This declaration has been made after receiving the declarations required to be made to the Directors in accordance with sections 295A of the Corporations Act 2001 for the financial period ending 30 June 2017. On behalf of the Board Dr R Newman CEO & Managing Director Sydney 22 August 2017 90 FINANCIAL REPORT DIRECTORS’ DECLARATION 91 91 91 “ Before we used Nearmap, we struggled with outdated imagery that frankly missed the details. With Nearmap, we’ve reinvented the way we do business and it’s making all the difference.” CEO, US Engineering firm. Captured 04/05/2017 Point Cook, VIC, Australia 94 INDEPENDENT AUDITOR’S REPORT Captured 26/07/2017 Manorville, NY, US INDEPENDENT AUDITOR’S REPORT 95 96 INDEPENDENT AUDITOR’S REPORT Captured: 25/07/2017 Yabulu, QLD, Australia INDEPENDENT AUDITOR’S REPORT 97 WE CHANGE THE WAY PEOPLE VIEW THE WORLD SO THEY CAN PROFOUNDLY CHANGE THE WAY THEY WORK. Captured: 09/09/2017 Brisbane Qld Australia SHAREHOLDER INFORMATION. SHAREHOLDER INFORMATION. Additional information required by the Australian Securities Exchange and not shown elsewhere in this report is as follows. The information is current as at 6 September 2017. (A) DISTRIBUTION OF ORDINARY SHARES The number of shareholders, by size of holding, are: RANGE 1–1,000 1,001–5,000 5,001–10,000 10,001–100,000 100,001 and over TOTAL NO OF HOLDERS NO OF SHARES 703 2,996 1,882 2,921 317 8,819 519,410 8,885,485 15,024,444 89,369,073 274,671,436 388,469,848 The number of shareholders holding less than a marketable parcel of ordinary shares is: 278 (B) DISTRIBUTION OF UNQUOTED OPTIONS ESOP options exercisable at a range of prices between $0.39 and $1.08 expiring on various dates between 2 October 2017 and 30 November 2021 RANGE 1–1,000 1,001–5,000 5,001–10,000 10,001–100,000 100,001 and over TOTAL NO OF HOLDERS NO OF OPTIONS - - 54 133 54 241 - - 345,000 5,933,333 23,580,921 29,859,254 (C) TWENTY LARGEST SHAREHOLDERS The names of the twenty largest registered holders of quoted ordinary shares are: NAME 1 NATIONAL NOMINEES LIMITED 2 LONGFELLOW NOMINEES PTY LTD 3 J P MORGAN NOMIEES AUSTRALIA LIMITED 4 HSBC CUSTODY NOMIEES (AUSTRALIA) LIMITED 5 LONGFELLOW NOMINEES PTY LTD 6 CITICORP NOMIEES PTY LTD 7 CS FOURTH NOMINEES PTY LTD 8 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 9 BUTTONWOOD NOMINEES PTY LTD 10 MR JASON MAK 11 BNP PARIBAS NOMS PTY LTD 12 MR GRAHAM GRIFFITHS 13 VENTURE SKILLS PTY LTD 14 NETWEALTH INVESTMENTS LIMITED 15 AMP LIFE LIMITED 16 BNP PARIBAS NOMINEES PTY LTD 17 MRS ALISON FARRELLY 18 AUSTRALIAN EXECUTOR TRUSTEES LIMITED 19 ROAN INDUSTRIES PTY LTD 20 MR ANDREW JOHN MALONEY TOTAL NO OF SHARES % OF SHARES 46,680,128 38,155,167 21,110,758 13,158,519 11,881,128 7,816,382 5,884,769 5,249,525 5,000,000 3,972,941 3,230,096 3,197,179 3,145,000 2,981,821 2,662,546 2,516,221 2,295,000 2,266,784 2,100,060 2,010,000 11.76 9.82 5.43 3.39 3.06 2.01 1.51 1.35 1.29 1.02 0.83 0.82 0.81 0.77 0.69 0.65 0.59 0.58 0.54 0.52 184,314,024 47.45 (D) SUBSTANTIAL SHAREHOLDERS The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations Act 2001 are: NAME 1. Ross Norgard NO OF SHARES 50,076,295 % OF SHARES 12.89 (E) VOTING RIGHTS All ordinary shares carry one vote per share without restriction. No voting rights are attached to options. (F) SECURITIES EXCHANGE QUOTATION (G) CORPORATE GOVERNANCE STATEMENT The Company’s ordinary shares are listed on the Australian Securities Exchange (Code: NEA). The Home Exchange is Perth. The Company’s Corporate Governance Statement for the 2017 financial year can be accessed at: http://static.nearmap.com/ investors/governance/statement/Corporate_ Governance_Statement.pdf 100 SHAREHOLDER INFORMATION SHAREHOLDER INFORMATION 101 CORPORATE INFORMATION. NEARMAP LTD ABN 37 083 702 907 DIRECTORS Peter James (Non- executive Chairman) Ross Norgard (Non-executive Director) Ian Morris (Non-executive Director) Cliff Rosenberg (Non-executive Director) Sue Klose (Non-executive Director) Rob Newman (CEO & Managing Director) COMPANY SECRETARY Shannon Coates REGISTERED OFFICE Level 6, 6-8 Underwood Street Sydney NSW 2000 WEBSITE http://www.nearmap.com SOLICITORS DLA Piper BANKERS Commonwealth Bank of Australia Wells Fargo Westpac Banking Corporation SHARE REGISTRY Computershare Registry Services Pty Ltd Level 11, 172 St Georges’ Terrace Perth WA 6000 AUDITORS KPMG Australia Tower Three, International Towers Sydney 300 Barangaroo Avenue Sydney NSW 2000 102 CORPORATE INFORMATION Captured: 06/05/2017 Sydney. NSW 103 Cover image Captured: 23/07/2017 Kooragang NSW © Nearmap Ltd 2016 Design by Cal&Co. Printed by Optima Press nearmap.com 

Continue reading text version or see original annual report in PDF format above