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