ABN 73 117 770 475
SKY AND SPACE GLOBAL LTD
(SUBJECT TO DEED OF COMPANY ARRANGEMENT)
ANNUAL REPORT
30 June 2020
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
ANNUAL REPORT
30 June 2020
Corporate directory
Current Directors
Meir Moalem
CEO & Managing Director (resigned on 21 July 2020)
Maya Glickman-Pariente
Non-executive Director (resigned on 21 July 2020)
Yonatan Shrama
Non-executive Director (resigned on 21 July 2020)
Xavier Kris
Non-executive Director (appointed 21 July 2020)
Stephen Gorenstein
Non-executive Director (appointed 21 July 2020)
Silvio Salom
Non-executive Director (appointed 21 July 2020)
Company Secretary
Rachel Kerr
Ian Pamensky
(resigned on 9 March 2020)
(appointed on 9 March 2020)
Registered Office
Share Registry
Street:
Barringtons House
Computershare Investor Services Pty Ltd
283 Rokeby Road
SUBIACO WA 6008
Street:
Level 11, 172 St Georges Terrace
PERTH WA 6000
Postal:
PO Box 1288
SUBIACO WA 6904
Telephone:
+61 (0)8 9426 0666
Facsimile:
+61 (0)8 9481 1947
Website:
www.skyandspace.global
Postal:
Telephone:
Website:
Auditors
Moore Australia Audit (WA)
Level 15 Exchange Tower
2 The Esplanade
PERTH WA 6000
Telephone:
+61 (0)8 9225 5355
Solicitors to the Company
Steinepreis Paganin
Level 4, The Read Buildings
16 Milligan Street
PERTH WA 6000
Securities Exchange
Australian Securities Exchange
Level 40, Central Park, 152-158 St Georges Terrace
Perth WA 6000
Telephone:
131 ASX (131 279) (within Australia)
Telephone:
+61 (0)2 9338 0000
Facsimile:
Website:
ASX Code
+61 (0)2 9227 0885
www.asx.com.au
SAS
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SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Contents
ANNUAL REPORT
30 June 2020
(cid:132)
(cid:132)
(cid:132)
(cid:132)
(cid:132)
(cid:132)
(cid:132)
(cid:132)
(cid:132)
(cid:132)
(cid:132)
Directors' report ................................................................................................................................................................... 1
Remuneration report ........................................................................................................................................................... 8
Auditor's independence declaration .................................................................................................................................. 16
Consolidated statement of profit or loss and other comprehensive income ..................................................................... 17
Consolidated statement of financial position .................................................................................................................... 18
Consolidated statement of changes in equity .................................................................................................................... 19
Consolidated statement of cash flows ............................................................................................................................... 20
Notes to the consolidated financial statements ................................................................................................................. 21
Directors' declaration ......................................................................................................................................................... 53
Independent auditor's report ............................................................................................................................................. 54
Additional Information for Listed Public Companies .......................................................................................................... 58
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SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Directors' report
ANNUAL REPORT
30 June 2020
Your directors present their report on the consolidated entity, consisting of Sky and Space Global Limited (Parent or the
Company) and its controlled entities (collectively the Group), for the financial year ended 30 June 2020.
SAS is listed on the Australian Securities Exchange.
Directors
The names of Directors in office at any time during or since the end of the year are:
(cid:132) Meir Moalem
(cid:132) Maya Glickman-Pariente
Managing Director (resigned 21 July 2020)
Non-executive Director (resigned 21 July 2020)
(cid:132)
(cid:132)
(cid:132)
(cid:132)
Yonatan Shrama
Non-executive Director (resigned 21 July 2020)
Xavier Kris
Executive Chairman (appointed 21 July 2020)
Stephen Gorenstein
Non-executive Director (appointed 21 July 2020)
Silvio Salom
Non-executive Director (appointed 21 July 2020)
Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. For additional
information of Directors including details of the qualifications of Directors please refer to the remuneration report on page 6 of
this Directors Report.
Company Secretary
During the year Rachel Kerr resigned as Company Secretary on 9 March 2020, the date on which Ian Pamensky was appointed
as Company Secretary.
Dividends paid or recommended
There were no dividends paid or recommended during the financial year ended 30 June 2020 (2019: nil).
Significant Changes in the state of affairs
There were no significant changes to the state of affairs of the Group.
Operating and financial review
Nature of Operations Principal Activities
Sky and Space Global Ltd is an ASX listed (SAS) nano-satellite, space technology company with European and Israeli centres of
aerospace, satellite and software industry experts. The Group’s core business is to construct and operate a communications
infrastructure based on nanosatellite technology and develop highly sophisticated software systems that will deploy, maintain
orbit control and handle the communication network in space to provide global coverage.
The Parent company entered into administration on 6 April 2020 and administrators were appointed to undertake a preliminary
review and assessment of the Group’s operations with a view to determine the extent to which the Company could be
recapitalised.
On 30 June 2020 the Administrators held a meeting of creditors, where it was resolved that the Deed of Company Arrangement
(‘DOCA’) proposal presented by Laika Capital Partners Pty Ltd (‘Laika’) be executed by the Company.
The Company is taking the relevant steps to allow the effectuation of the DOCA subject to Shareholder approval, and
recapitalisation of the Company, and following this, subject to ASX Approval, recommence trading on the exchange.
Upon recommencement of trading, the Group’s plan is to deliver on the business plan summarised in the Operations review
section below.
COVID-19
On 31 January 2020, the World Health Organisation (‘WHO’) announced a global health emergency because of a new strain of
coronavirus originating in Wuhan, China (COVID-19 outbreak) and the risks to the international community as the virus spreads
globally beyond its point of origin. Because of the rapid increase in exposure globally, on 11 March 2020, the WHO classified the
COVID-19 outbreak as a pandemic.
The impact of the COVID-19 outbreak continues to evolve at the date of this report. The company is therefore uncertain as to the
full impact that the pandemic will have on its financial condition, liquidity, and future results of operation during future years.
Management is actively monitoring the global situation and its impact on the Company’s financial condition, liquidity, operations,
suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb the
spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition
or liquidity in future years.
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SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Directors' report
ANNUAL REPORT
30 June 2020
Although the Company cannot estimate the length or gravity of the impact of the COVID-19 outbreak at this time, if the pandemic
continues, it may have a material adverse effect on the Company’s results of future operations, financial position, and liquidity
in future years.
Operations Review
The Company is currently taking the relevant steps to allow the effectuation of the DOCA subject to Shareholder approval, and
recapitalisation of the Company, and following this, subject to ASX Approval, recommence trading on the exchange.
The Company’s business operations going forward can be grouped into the following categories:
(a)
(b)
(c)
Professional Services: Software;
Professional Services: Infrastructure; and
Satellite Communication Services.
SAS will work to generate short, medium and long-term revenue opportunities to generate free cash flow. These operations will
enable the Group to pursue a scalable, cost-effective business-to-business methodology in its future market activities.
The Group’s new go-to-market plans have, to date, been welcomed by international space organisations seeking to leverage the
Group’s know-how to fast-track other new-space missions.
Professional Services: Software
In order to generate revenue in the short-term, the Group has commenced a campaign to engage with other organisations in the
new-space industry in order to provide its technology as a service to third parties in order to fast-track their operational and
commercial objectives. These technologies to be provided under licence to third parties include:
(cid:132)
(cid:132)
(cid:132)
the SAS proprietary communication protocol with embedded encryption and cyber security features;
state-of-the-art compression algorithms providing significant and material improvement on other comparable solutions;
and
the Group’s unique micro-gateway technology allowing terminals to be converted into gateways through correct
credentials and encryption keys.
data storage and forwarding between continents;
realtime instant messaging (including voice and image attachments);
realtime voice calls;
financial transactions;
IoT data transfer from sensors to customer servers; and
The above components combined with other proprietary infrastructure have enabled the Group to develop space tested and
proven capabilities for:
(cid:132)
(cid:132)
(cid:132)
(cid:132)
(cid:132)
(cid:132) worldwide S-band Spectrum monitoring and interference analysis.
The Group plans to enter into agreements with prospective partners for the development, licencing, testing, and associated third-
party consulting associated with the above technologies.
This strategy should not only generate revenue but also establish and develop key business-to-business relationships and
distribution channels for future revenue opportunities.
Professional Services: Infrastructure
The Group’s infrastructure services will focus on leveraging the Group’s existing satellite constellation, communication protocols,
compression algorithms and micro-gateway technology and inviting third parties to test their respective applications and
products using the Group’s existing infrastructure.
This is planned to be achieved through:
(cid:132) making the existing constellation and software suite available to third parties for testing and simulation purposes; and
(cid:132)
providing the software platform as a service on a per transaction basis to third party nanosatellite operators.
This approach will deliver benefits to the Group such as:
(cid:132)
(cid:132)
(cid:132)
enabling the Group to monetise a pent-up demand from third parties to test their technologies prior to launching their
own satellites;
allowing third parties to accelerate the deployment of their services through a space-proven infrastructure; and
acting as a test platform for prospective partners to assess the potential to engage the Group in the future.
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SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Directors' report
ANNUAL REPORT
30 June 2020
Satellite Communication Services
The Group will continue with its plans to launch commercial nanosatellites to create a flagship constellation of nanosatellites
with space proven capabilities and infrastructure (Direct Launch).
Whilst, initially, being more capital intensive than the Software and Infrastructure Services (as described above), the Direct
Launch operations will aid SAS in facilitating its indirect launch programs which will involve the deployment of a regional service
provision model with (i) third party telco and (ii) other satellite operators assisting the Group in fast tracking its constellation
deployment.
The new nanosatellite constellation will seek to include further technological breakthroughs including the development of a
multi-channel modem application which will enable greater terminal capture at each pass by increasing the number of channels;
thereby increasing satellite utilisation rates.
Financial Review
Operating results
For the 2020 financial year the Group delivered a net loss of $14,290,159 (2017: $30,395,706 loss).
The financial statements have been prepared on a going concern basis, which contemplates the continuity of normal business
activity and the realisation of assets and the settlement of liabilities in the ordinary course of business. Details of the Company's
assessment in this regard can be found in Note 1aii Statement of significant accounting policies: Going Concern on page 21.
Financial position
The net assets of the Group have decreased from 30 June 2020 by $12,552,892 to $(10,688,253) at 30 June 2020 (2019:
$1,864,639).
As at 30 June 2020, the Group's cash and cash equivalents decreased from 30 June 2019 by $1,860,747 to $74,308 at 30 June
2020 (2019: $1,935,055) and had a working capital deficit of $7,694,833 (2019: $1,649,277 working capital), as noted in Note
16d.
Events Subsequent to Reporting Date
The impact of the COVID-19 outbreak continues to evolve at the date of this report. The Group is therefore uncertain as to the
full impact that the pandemic will have on its financial condition, liquidity, and future results of operation during future years.
Management is actively monitoring the global situation and its impact on the Group’s financial condition, liquidity, operations,
supplied, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb the
spread, the Group is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition or
liquidity in future years.
Although the Company cannot estimate the length or gravity of the impact of the COVID-19 outbreak at this time, if the pandemic
continues, it may have a material adverse effect on the Group’s results of future operations, financial position, and liquidity in
future years.
In July 2020 and August 2020, the Group has entered into two convertible loans with Laika Capital Partners Pty Ltd totalling
A$575,000 to assist the Group in completing the necessary steps to allow the effectuation of the DOCA subject to Shareholder
and ASX approval to recapitalise the Company and recommence trading on the ASX.
In October 2020, the Company entered into a LSA Settlement Agreement with Virgin Orbit (“Settlement Agreement”) to
terminate a previous agreement dated 12 September 2016 (“LSA Agreement”). Virgin alleged that the Company still owed Virgin
A$55m under the LSA Agreement which the Company disputed. The parties entered into the LSA Settlement Agreement which
included full and final settlement of any alleged liabilities under the LSA Agreement as well as a future services agreement. The
total estimated consideration of the Settlement Agreement is $5,788,200 being $3,000,000 in cash paid quarterly in advance
over 3 years from 1 July 2021 plus 11,000,000 shares at A$0.20 per share and 7,000,000 options exercise price A$0.40 each and
an expiry date three years after issue.
There are no other significant after balance date events that are not covered in this Directors' Report or within the financial
statements at Note 25 Events subsequent to reporting date.
Future Developments, Prospects and Business Strategies
The Company is currently in the process of effectuating the DOCA subject to shareholder approval and ASX approval. Until the
Company has recommence trading on the ASX, likely developments, future prospects and business strategies of the operations
of the Group and the expected results of those operations have not been included in this report as the Directors believe that the
inclusion of such information would be likely to result in unreasonable prejudice to the Group.
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SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Directors' report
Environmental Regulations
ANNUAL REPORT
30 June 2020
The Group’s operations are subject to various environmental laws and regulations under the relevant Governments’ legislation.
Full compliance with these laws and regulations is regarded as a minimum standard for all operations to achieve. There have
been no significant known breaches by the group during the financial period.
Information relating to the directors
(cid:132) Meir Moalem
(cid:134) Managing Director (Appointed 12 May 2016 and resigned on 21 July 2020)
Experience and
qualifications
(cid:134) A jet fighter pilot, Lt. Col (Res.) of the IAF, has over 20 years of experience in management,
R&D and operation of state-of-the-art projects in Space Systems and Unmanned Aerial
Systems, among those acting as a deputy sq. commander and leading the MEIDEX experiment
on Space Shuttle Columbia (STS-107) as the project manager for Israel’s first astronaut flight,
Managing Israel’s satellite projects (such as Ofeq, Tecsar) and more.
Meir has a B.Sc. in Physics and computer sciences (with honours) and an M.A. from the
Diplomacy and National Security executive program (with honours). Currently he is working on
his PhD in national security and space programs in Tel Aviv University, Israel. Meir also received
the Israel National Defence award in 2009
Interest in Shares and
Options
(cid:134) Meir Moalem – 303,333,333 Ordinary Shares
MultiModis M.M.Ltd. (IL) – 27,337,334 Ordinary Shares
Meir Moalem – 3,333,333 options exercisable at $0.05 each expiring 21 May 2022
MultiModis M.M.Ltd. (IL) – 3,333,334 options exercisable at $0.05 each expiring 21 May 2022
MultiModis M.M.Ltd. (IL) – 1,251,000 options exercisable at $0.015 each expiring 31 May 2021
Directorships held in
other listed entities
(cid:134) None
(cid:132) Maya Glickman-Pariente (cid:134) Non-executive Director (Appointed 12 May 2016 and resigned on 21 July 2020)
Experience and
qualifications
(cid:134) Highly experienced and regarded as a global industry leader, Maya Glickman-Pariente is Sky
and Space Global (UK) Ltd’s Chief Constellation Officer and will lead the team on satellite
mission analysis, mission control software development, and operations management. Maya
is MASTER STK certified and was a Senior Satellite Engineer of communications satellite with
wide experience in satellite operations.
Maya was part of the AMOS-3 development team, LEOP and IOT missions as well as the
AMOS-1 end of life mission team. She designed and optimized several large scale
constellations for earth observation and communication use, and was involved in the
assembly, integration and testing of “Duchifat-1”, the first Israeli Nano-satellites. Maya has a
B.Sc. in Aerospace Engineering and M.E in System Engineering, both from the Technion
University, Aerospace faculty, and is also a graduate of the 2004 ISU summer session program
in Adelaide, Australia. Recently, Maya was nominated Associate Chair of the space
engineering department in the International Space University summer session program 2016.
Interest in Shares and
Options
(cid:134) Maya Glickman-Pariente – Nil
Meidad Pariente (Husband) – 301,666,666 Ordinary Shares
Spacecialist Ltd. (IL) – 18,000,000 Ordinary Shares
Meidad Pariente (Husband) – 1,666,666 options exercisable at $0.05 each expiring 21 May
2022
Directorships held in
other listed entities
(cid:134) None
(cid:132) Yonatan Shrama
(cid:134) Non-executive Director (Appointed 12 May 2016 and resigned on 21 July 2020)
Experience and
qualifications
(cid:134) Yonatan has over 13 years of experience in business development and entrepreneurship in
automotive technology systems, medical equipment and high technology security equipment.
Yonatan has extensive experience in managing teams and processes. Yonatan is currently the
chairman of Enigmo, a Cyber company, and VP Bizdev at Spacecialist.
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SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
ANNUAL REPORT
30 June 2020
Directors' report
Interest in Shares and
Options
(cid:134) Yonatan Shrama – 301,666,666 Ordinary Shares
Yonatan Shanan Ltd – 17,000,000 Ordinary Shares
Yonatan Shrama – 1,666,666 Options exercisable at $0.05 each expiring 21 May 2022
Directorships held in other
listed entities
(cid:134) None
(cid:132) Xavier Kris
(cid:134) Executive Chairman (Appointed 21 July 2020)
Experience and
qualifications
(cid:134) Senior leadership expertise over 20 years’ experience as a director of service-based
information technology, telecommunication, research and development and media businesses
in the UK, France, USA, South East Asia and Australia, Xavier specialises in providing acquisition,
integration and business development services for companies seeking to expand their
company operations internationally.
Xavier most recently served as Managing Director of Swift Media Limited (ASX:SW1), including
as Chairman for the last 6 months of his tenure. In addition, Xavier is a Director of PLUS 8, a
hospitality labour hire, management, business brokerage and consulting group, and the
founding partner of Boardroom Capital, a boutique corporate advisory firm based in Perth,
Western Australia.
Xavier holds an English Law and French Degree and a Master of Business Administration. Xavier
has also completed the ‘Company Directors Course’ conducted by the AICD and has obtained
the qualification of GAICD.
Interest in Shares and
Options
(cid:134) None
Directorships held in other
listed entities
(cid:134) Executive Director of OliveX Holdings Limited (NSX)
Non-executive Director of Cycliq Group Limited (ASX)
(cid:132) Stephen Gorenstein
(cid:134) Non-executive Director (Appointed 21 July 2020)
Experience and
qualifications
(cid:134) Over 20 years experience in public company and the capital markets including equity analyst
roles at both Goldman Sachs and Bank of America Merrill Lynch. He was formerly the Regional
Head of Asia Pacific Metals and Mining at Bank of America Merrill Lynch. As well as inhouse
M&A, Corporate Development Roles
He has extensive networks in the Australian capital markets and is an active participant in many
start-ups. He is well versed in cross border transactions particularly sourcing high quality
technology companies from offshore looking to establish themselves in Australia.
Interest in Shares and
Options
Directorships held in other
listed entities
(cid:134) 416,667 Ordinary Shares
(cid:134) Non-Executive Director Parazero Ltd (ASX)
Non-Executive Director WhiteRock Minerals Ltd (ASX)
(cid:132) Silvio Salom
(cid:134) Non-executive Director (Appointed 21 July 2020)
Experience and
qualifications
(cid:134) Over 30 years of international senior leadership experience at Board and company operations
level spanning some 40 countries across Europe, North America and Asia. Market sector
experience includes communications, defence, aerospace, media, environment, aviation, e-
commerce, manufacturing and entertainment with a focus on technology and business
development.
Silvio holds a Bachelor of Engineering and a Master of Fine Arts and is a Fellow of the Australian
Institute of Company Directors.
Interest in Shares and
Options
(cid:134) None
Directorships held in other
listed entities
(cid:134) Adacel Technologies Limited (ASX)
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SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Directors' report
Meetings of directors and committees
ANNUAL REPORT
30 June 2020
During the financial year fourteen meetings of Directors (including committees of Directors) were held. Attendances by each
Director during the year are stated in the following table.
DIRECTORS'
MEETINGS
REMUNERATION AND
NOMINATION COMMITTEE
FINANCE AND OPERATIONS
COMMITTEE
AUDIT
COMMITTEE
Number
eligible to
attend
Number
Attended
Meir Moalem
Maya Glickman-Pariente
Yonota Shrama
14
14
14
14
14
11
Number
Attended
Number
Attended
Number
eligible to
attend
Number
eligible to
attend
At the date of this report, the Remuneration, Audit, Nomination, and Finance and
Operations Committees comprise the full Board of Directors. The Directors believe
the Group is not currently of a size nor are its affairs of such complexity as to
warrant the establishment of these separate committees. Accordingly, all matters
capable of delegation to such committees are considered by the full Board of
Directors.
Number
eligible to
attend
Number
Attended
Indemnifying officers or auditor
During or since the end of the financial period, the Group has given an indemnity or entered into an agreement to indemnify, or
paid or agreed to pay insurance premiums as follows:
The Group has paid premiums to insure all of the Directors of the Group as named above, the Company secretary and all executive
officers of the Company against any liability incurred as such by a director, secretary or executive officer to the extent permitted
by the Corporations Act 2001. The contract of insurance prohibits disclosure of the notice of the liability and the amount of the
premium. The Group has not indemnified the auditor or paid any insurance premium on behalf of the auditor.
Options
Unissued shares under option
At the date of this report, the un-issued ordinary shares of Sky and Space Global Limited under option (listed and unlisted) are
as follows:
Grant Date
Date of Expiry
Exercise Price
21 May 2019
21 May 2022
27 December 2019
31 May 2021
$0.050
$0.015
Number under
Option
329,075,133
81,852,463
410,927,596
No person entitled to exercise the option has or has any right by virtue of the option to participate in any share issue of any other
body corporate.
Shares issued on exercise of options
11,000 ordinary shares were issued by the Company as a result of the exercise of options during the financial year but there have
been no exercises since the end of the financial year.
Non-audit services
The Board of Directors is satisfied that the provision of non-audit services during the period is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the services
disclosed below did not compromise the external auditor’s independence for the following reasons:
(cid:132) All non-audit services are reviewed and approved by the Board of Directors prior to commencement to ensure they do not
(cid:132)
adversely affect the integrity and objectivity of the auditor; and
The nature of the service provided do not compromise the general principles relating to auditor independence in
accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical
Standards Board.
Audit Appointment
Moore Australia were appointed as Auditor of the Group on 6 November 2020.
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SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Directors' report
Corporate Governance
ANNUAL REPORT
30 June 2020
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Sky and Space
Global Ltd support and have adhered to the principles of sound corporate governance. The Board recognises the
recommendations of the Australian Stock Exchange Corporate Governance Council and considers that the Company is in
compliance with those guidelines which are of importance to the commercial operation. During the financial period, shareholders
continued to receive the benefit of an efficient and cost-effective corporate governance policy for the Company. The Corporate
Governance Policies are available on the Company’s website.
https://www.skyandspace.global/corporate/corporate-governance/
During the 2020 financial year, the Company did not have two Australian resident non-executive directors since the resignations
of Mr Michael Malone and Ms Di Fulton in April 2019. This resulted in the voluntary suspension of the Company from the ASX on
9 April 2019. On 21 July 2020 the Company appointed two new Australian resident non-executive directors.
No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any proceedings to which
the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of those proceedings.
The Group was not a party to any such proceedings during the year.
Auditor's independence declaration
The lead auditor's independence declaration under section 307C of the Corporations Act 2001 (Cth) for the year ended
30 June 2020 has been received and can be found on page 16 of the annual report.
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SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Directors' Report
Remuneration report (audited)
ANNUAL REPORT
30 June 2020
The information in this remuneration report has been audited as required by s308(3C) of the Corporations Act 2001.
Key management personnel (KMP)
Yontan Shrama
KMP have authority and responsibility for planning, directing and controlling the activities of the Group. KMP comprise the
directors of the Company and key executive personnel:
(cid:132) Meir Moalem
(cid:132) Maya Glickman-Pariente
(cid:132)
(cid:132) Meidad Pariente
The objective of the Group’s executive reward framework is to ensure reward for performance is competitive and appropriate
for the results delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation
of value for shareholders and conforms with the market best practice for delivery of reward. The Board of Directors (the “Board”)
ensures that executive reward satisfies the following key criteria for good reward governance practices:
Managing Director
Non-executive Director
Non-executive Director
Chief Technical Officer
competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency
(cid:132)
(cid:132)
(cid:132)
(cid:132)
The reward framework is designed to align executive reward to shareholders’ interests. The Board have considered that it should
seek to enhance shareholders’ interests by:
(cid:132)
(cid:132)
having economic profit as a core component of plan design
focusing on sustained growth in shareholder wealth, consisting of growth in share price and delivering constant or
increasing return on assets as well as focusing the executive on key non-financial drivers of value
attracting and retaining high calibre executives
(cid:132)
Additionally, the reward framework should seek to enhance executives’ interests by:
(cid:132)
(cid:132)
(cid:132)
rewarding capability and experience
reflecting competitive reward for contribution to growth in shareholder wealth
providing a clear structure for earning rewards in accordance with best practice corporate governance, the structure of
non-executive director and executive remuneration are separate
Compensation packages are currently fully fixed, being an early stage business with no variable compensation or short or long-
term performance-based incentives.
The Board’s policy for determining the nature and amount of remuneration for key management personnel of the group is as
follows:
(cid:132)
(cid:132)
(cid:132)
The remuneration policy, setting the terms and conditions for the key management personnel, was developed and
approved by the Board
All key management personnel receive a base salary (which is based on factors such as length of service and experience)
and may include other benefits (including superannuation, fringe benefits, options and performance incentives)
The Board reviews key management personnel packages annually by reference to the Group’s performance, executive
performance and comparable information from industry sectors
Until the Group begins to generate revenue, the Board do not believe there is a basis to assess key management personnel
packages based on performance-based indices like on turnover growth, return on capital and changes in operating income.
The Board may, however, exercise its discretion in relation to approving incentives, bonuses and options. Any changes must be
justified by reference to measurable performance criteria.
The policy is designed to attract the highest calibre of executives and reward them for performance that results in long-term
growth in shareholder wealth.
Key management personnel are also entitled to participate in the employee share and option arrangements. All remuneration
paid to key management personnel is valued at the cost to the Group and expensed. Shares given to key management personnel
are valued as the difference between the market price of those shares and the amount paid by key management personnel.
Options are valued using the Black-Scholes or similar methodology.
P a g e | 8
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Directors' Report
Remuneration report (audited)
i. Non-executive director remuneration
ANNUAL REPORT
30 June 2020
The Board policy is to remunerate Non-Executive Directors at market rates for time, commitment and responsibilities. The
Board determines payments to the Non-Executive Directors and reviews their remuneration annually, based on market
practice, duties and accountability. Independent external advice is sought when required.
The chairman’s fees have been and will be determined independently to the fees of other non-executive directors based
on comparative roles in the external market. The chairman was and will not be present at any discussions relating to
determination of his own remuneration. Non-executive directors did not receive share options or other incentives as part
of their remuneration during the reporting period.
ASX listing rules require that the aggregate non-executive director remuneration shall be determined periodically by a
general meeting.
To align directors’ interests with shareholder interests, the Directors are encouraged to hold shares in the Company and
have in the past been issued with options and performance rights.
ii.
Executive remuneration
The Group aim to reward executives with a level and mix of remuneration based on their position and responsibility, which
is both fixed and variable.
The executive remuneration and reward framework has four components:
(cid:132) base pay, consultancy and non-monetary benefits
(cid:132) short-term performance incentives
(cid:132) share-based payments
(cid:132) other remuneration such as superannuation and long service leave
The combination of these comprises the executive’s total remuneration
iii.
v.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the
Remuneration Committee, based on individual and business unit performance, the overall performance of the consolidated
entity and comparable market remuneration.
At 30 June 2020 and during the financial year to 30 June 2020 the executive remuneration consisted of fixed remuneration
only, being an early stage business.
Consolidated entity performance and link to remuneration
The Group’s remuneration policy seeks to reward staff members for their contribution to achieving significant milestones
but there is no direct link between remuneration paid and growth in the Company’s share price or financial performance.
Services from remuneration consultants
During the current financial year, the Board did not engage the services of remuneration consultants.
In the future the Board and/ or Remuneration committee will consider the use of remunerations consultants, primarily to
review the amount and elements of the key management personnel remuneration and provide recommendations in
relation thereto and to provide other services including:
(cid:132) summarising the key terms and conditions of each contract for services to enable the remuneration committee to
assess whether the terms and conditions are consistent across different parts of the business;
(cid:132) advice in relation to the embodiment of risk in the assessment of performance for the vesting of remuneration
awards; and
(cid:132) expatriate compliance services.
v.
Key Management Personnel
The contracts for service between the Group and key management personnel are on a continuing basis, the terms of which
are not expected to change in the immediate future. Upon retirement key management personnel are paid employee
benefit entitlements accrued to date of retirement. Any options not exercised before or on the date of termination lapse.
All directors had contracts in place with the Group during the financial period as detailed below:
P a g e | 9
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Directors' Report
Remuneration report (audited)
Mr Meir Moalem, Managing Director
ANNUAL REPORT
30 June 2020
Letter of Appointment dated 21 March 2016 effective from acquisition of Sky and Space Global (UK) Ltd
- Fee from 1 July 2017 to 30 April 2019 was A$18,000 per month, from 1 May 2019 this fee was reduced to A$9,000
per month
Director Agreement with Sky and Space Global (UK) Ltd
- Fee from 1 July 2018 to 30 April 2019 was US$2,750 per month, from 1 May 2019 this fee was reduced to US$1,375
per month
Consultancy Agreement dated 1 December 2015 with Sky and Space Global (UK) Ltd
- Fee from 1 July 2018 to 31 December 2018, the date the agreement was terminated, was US$16,500 per month
Consultancy Agreement dated 1 January 2019 with Sky and Space Global (Israel) Ltd
- Fee from 1 January 2019 to 30 April 2019 was US$16,500 per month, from 1 May 2019 this fee was reduced to
US$8,250
Heads of Agreement dated 4 September 2020 with Sky and Space Global Limited
- A payment of AUD200,000 as in full and final settlement of all outstanding debts owed to Mr Meir Moalem.
- A payment of USD17,500 for services for the Month of August and USD$24,000 from 1 September 2020 to
effectuation of DOCA
- Fee from effectuation of the DOCA will be USD$24,000 as CEO of the SAS group including any directorships that may
be required from time to time including UK and Israel.
Mrs Maya Glickman-Pariente, Non-Executive Director
Letter of Appointment dated 21 March 2016 effective from acquisition of Sky and Space Global (UK) Ltd
- Fee from 1 July 2018 to 30 April 2019 was A$4,000 a month, from 1 May 2019 this fee was reduced to A$2,000 a
month
Consultancy Agreement dated 1 December 2015 with Sky and Space Global (UK) Ltd
- Fee from 1 July 2018 to 31 December 2018, the date the agreement was terminated, was US$16,500 per month
Consultancy Agreement dated 1 January 2019 with Sky and Space Global (Israel) Ltd
- Fee from 1 January 2019 to 30 April 2019 was US$16,500 per month, from 1 May 2019 this fee was reduced to
US$8,250
Deed of Variation 17 August 2020 with Sky and Space Global (UK) Limited
- Once of payment of $83,917.53 in full and final settlement of any and all debts owed to Mrs Maya Glickman-
Pariente until effectuation of DOCA
- Fee from effectuation of DOCA will be USD$10,416.66 per month
Mr Yonatan Shrama, Non-Executive Director
Letter of Appointment dated 21 March 2016 effective from acquisition of Sky and Space Global (UK) Ltd
- Fee from 1 July 2018 to 30 April 2019 was A$4,000 a month, from 1 May 2019 this fee was reduced to A$2,000 a
month
Director Agreement with Sky and Space Global (UK) Ltd
- Fee from 1 July 2018 to 30 April 2019 was US$2,750 per month; from 1 May 2019 this fee was reduced to US$1,375
per month
Consultancy Agreement dated 1 December 2015 with Sky and Space Global (UK) Ltd
- Fee from 1 July 2018 to 31 December 2018, the date the agreement was terminated, was US$16,500 per month
Consultancy Agreement dated 1 January 2019 with Sky and Space Global (Israel) Ltd
- Fee from 1 January 2019 to 30 April 2019 was US$16,500 per month, from 1 May 2019 this fee was reduced to
US$8,250
Termination agreement with a payment of $180,000 in full and final settlement of any and all debts owed to Yonatan
Shrama
Mr Meidad Pariente
Director Agreement with Sky and Space Global (UK) Ltd
- Fee from 1 July 2018 to 30 April 2019 was US$2,750 per month; from 1 May 2019 this fee was reduced to US$1,375
per month
Consultancy Agreement dated 1 December 2015 with Sky and Space Global (UK) Ltd
- Fee from 1 July 2018 to 31 December 2018, the date the agreement was terminated, was US$16,500 per month
Consultancy Agreement dated 1 January 2019 with Sky and Space Global (Israel) Ltd
- Fee from 1 January 2019 to 30 April 2019 was US$16,500 per month, from 1 May 2019 this fee was reduced to
US$8,250
Deed of Variation 17 August 2020 with Sky and Space Global (UK) Limited
- Once of payment of $83,917.53 in full and final settlement of any and all debts owed to Mr Meidad Pariente until
effectuation of DOCA
- Fee from effectuation of DOCA will be USD$17,916.66 per month
P a g e | 10
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Directors' Report
Remuneration report (audited)
ANNUAL REPORT
30 June 2020
Details of the remuneration of the Directors and KMP of the Group (as defined in AASB 124 Related Party Disclosures) are
set out in the following table.
2020 – Group
Group KMP
Short-term benefits
Salary, fees
and leave
$
Meir Moalem
160,042
Maya Glickman-
Pariente(1)
Yonatan Sharma
65,217
47,391
Meidad Pariente
(17,313)
255,337
Profit share
and bonuses
$
-
-
-
-
-
Non-
monetary
$
Consultancy
Services
$
-
-
-
-
-
400,550
336,120
255,522
336,120
1,328,312
(1) Maya Glickman-Pariente is the wife of Meidad Pariente
Post-
employment
benefits
Super-
annuation
Long-term
benefits
Termination
benefits
Equity-settled share-
based payments
Total
Other
Equity
Options
$
-
-
-
-
-
$
-
-
-
-
-
$
-
-
-
-
-
$
-
-
-
-
-
$
-
-
-
-
-
$
560,592
401,337
302,913
318,807
1,583,649
2019 – Group
Group KMP
Salary, fees
and leave
$
Meir Moalem
257,339
Brett Mitchell(1)
Peter Wall(2)
Michael Malone(3)
Di Fulton(4)
58,000
20,000
31,636
21,147
Yonatan Sharma
103,278
Maya Glickman-
Pareinte(5)
Meidad Pariente
44,000
59,318
594,718
Profit share
and bonuses
$
-
-
-
-
-
-
-
-
-
Short-term benefits
Non-
monetary
$
Consultancy
Services
$
Post-
employment
benefits
Super-
annuation
Long-term
benefits
Termination
benefits
Equity-settled share-
based payments
Total
Other
Equity
Options
$
-
-
-
-
2,009
-
-
-
270,371
-
-
-
-
260,590
261,814
270,441
-
-
-
-
-
-
-
-
-
1,063,216
2,009
$
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
$
527,710
58,000
20,000
31,636
23,156
363,868
305,814
329,759
1,659,943
(1) Resigned 31 October 2018
(2) Resigned 3 December 2018
(3) Appointed 1 November 2018 and resigned 8 April 2019
(4) Appointed 4 December 2018 and resigned 8 April 2019
(5) Maya Glickman-Pariente is the wife of Meidad Pariente
(cid:132)
Share-based compensation
No options were granted to the Directors during the year ended 30 June 2020 as part of their remuneration.
There were no equity instruments issued during the year to Directors as a result of options exercised that had previously
been granted as compensation.
a. Securities Received that are not performance-related
No members of KMP are entitled to receive securities that are not performance-based as part of their remuneration package.
b. Options and Rights Granted as Remuneration
No options or rights were granted as remuneration during 2020 (2019: nil).
P a g e | 11
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Directors' report
Remuneration report (audited)
(cid:132) KMP equity holdings
ANNUAL REPORT
30 June 2020
c. Fully paid ordinary shares of Sky and Space Global Limited held by each KMP
2020 – Group
Group KMP
Meir Moalem
Balance at
start of year
No.
325,666,667
Maya Glickman-Pariente(2)
-
Yonatan Shrama
Meidad Pariente
318,666,666
319,666,666
963,999,999
Received during
the year as
compensation
No.
Received during
the year on
the exercise of
options
No.
Received during
the year on
conversion of
performance
shares
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other changes/
resignation
during the year
No.(1)
Balance at
end of year
No.
5,004,000
330,670,667
-
-
-
-
318,666,666
319,666,666
5,004,000
969,003,999
(1) Other changes during the year relate to acquisitions and disposals for Directors and their related parties.
(2) Maya Glickman-Pariente is the wife of Meidad Pariente
Received during
the year as
compensation
No.
Received during
the year on
the exercise of
options
No.
Received during
the year on
conversion of
performance
shares
No.
Net
Other changes
No.(6)
Balance at
end of year
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,666,667
325,666,667
4,500,000
1,000,000
-
-
-
-
-
-
-
-
-
23,500,000(5)
7,000,000(5)
-(5)
-(5)
1,666,666
318,666,666
-
-
1,666,666
319,666,666
5,500,000
9,999,999
994,499,999
2019 – Group
Group KMP
Meir Moalem
Brett Mitchell(1)(8)
Peter Wall(2)(8)
Michael Malone(3)
Di Fulton(4)
Yonatan Sharma
Maya Glickman-Pariente(7)
Balance at
start of year
No.
319,000,000
19,000,000
6,000,000
-
-
317,000,000
-
Meidad Pariente
318,000,000
979,000,000
(1) Resigned 31 October 2018
(2) Resigned 3 December 2018
(3) Appointed 1 November 2018 and resigned 8 April 2019
(4) Appointed 4 December 2018 and resigned 8 April 2019
(5) Closing balance at date of resignation
(6) Net other changes are as a result of shares allotted on share issues and other movements due to changes in directors and directors’ related
Entities.
(7) Maya Glickman-Pariente is the wife of Meidad Pariente.
(8) Note Brett Mitchell and Peter Wall converted 4,500,000 and 1,000,000 performance rights respectively.
P a g e | 12
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Directors' report
Remuneration report (audited)
ANNUAL REPORT
30 June 2020
d. Performance shares in Sky and Space Global Limited held by each KMP
2020 – Group
Group KMP
Meir Moalem
Maya Glickman-
Pariente(1)
Yonatan Shrama
Meidad Pariente
Balance at
start of year
No.
Granted as
Remuneration
during the year
No.
Converted
during the year
No.
Other changes
during the year
No.
Balance at
end of year
No.
Vested and
convertible
No.
Not Vested
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1) Maya Glickman-Pariente is the wife of Meidad Pariente.
2019 – Group
Group KMP
Meir Moalem
Brett Mitchell(1)
Peter Wall(2)
Michael Malone(3)
Di Fulton(4)
Yonatan Sharma
Maya Glickman-
Pariente(5)
Meidad Pariente
Balance at
start of year
No.
-
4,500,000
1,000,000
-
-
-
-
-
5,500,000
(2) Resigned 31 October 2018
(3) Resigned 3 December 2018
Granted as
Remuneration
during the year
No.
Converted
during the year
No.
Other changes
during the year
No.
Balance at
end of year
No.
Vested and
convertible
No.
Not Vested
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(4,500,000)
(1,000,000)
-
-
-
-
-
(5,500,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(4) Appointed 1 November 2018 and resigned 8 April 2019
(5) Appointed 4 December 2018 and resigned 8 April 2019
(6) Maya Glickman-Pariente is the wife of Meidad Pariente.
e. Options in Sky and Space Global Limited held by each KMP
2020 – Group
Group KMP
Meir Moalem
Maya Glickman-
Pariente(1)
Yonatan Shrama
Meidad Pariente
Balance at
start of year
No.
6,666,667
-
1,666,666
1,666,666
9,999,999
Granted as
Remuneration
during the year
No.
Exercised
during the year
No.
Other changes/
resignation
during the year
No.
Balance at
end of year
No.
Vested and
Exercisable
No.
-
-
-
-
-
-
-
-
-
-
1,251,000
7,917,667
-
-
-
-
1,666,666
1,666,666
1,251,000
11,250,999
-
-
-
-
-
Not Vested
No.
7,917,667
-
1,666,666
1,666,666
11,250,999
(1) Maya Glickman-Pariente is the wife of Meidad Pariente.
P a g e | 13
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Directors' report
Remuneration report (audited)
ANNUAL REPORT
30 June 2020
2019 – Group
Group KMP
Meir Moalem
Brett Mitchell(1)
Peter Wall(2)
Michael Malone(3)
Di Fulton(4)
Yonatan Sharma
Maya Glickman-
Pariente(7)
Meidad Pariente
Balance at
start of year
No.
Granted as
Remuneration
during the year
No.
Exercised
during the year
No.
Other changes
during the year
No. (6)
Balance at
end of year
No.
Vested and
Exercisable
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,666,667
6,666,667
-
-
-
-
-(5)
-(5)
-(5)
-(5)
1,666,666
1,666,666
-
-
1,666,666
1,666,666
9,999,999
9,999,999
-
-
-
-
-
-
-
-
-
Not Vested
No.
6,666,667
-
-
-
-
1,666,666
-
1,666,666
9,999,999
(1) Resigned 31 October 2018
(2) Resigned 3 December 2018
(3) Appointed 1 November 2018 and resigned 8 April 2019
(4) Appointed 4 December 2018 and resigned 8 April 2019
(5) Closing balance at date of resignation
(6) Closing balance at date of resignation Net other changes are as a result of shares allotted on share issues and other movements due to
changes in directors and directors’ related entities.
(7) Maya Glickman-Pariente is the wife of Meidad Pariente.
e. Other Equity-related KMP Transactions
There have been no other transactions involving equity instruments other than those described in the tables above relating
to options, rights and shareholdings.
f. Other transactions with KMP and or their Related Parties
Refer to Note 20 Related party transactions for details of other transactions with KMP and their related parties.
END OF REMUNERATION REPORT
P a g e | 14
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Directors' report
ANNUAL REPORT
30 June 2020
This Report of the Directors, incorporating the Remuneration Report, is signed in accordance with a resolution of directors made
pursuant to s.298(2) of the Corporations Act 2001 (Cth).
XAVIER KRIS
Executive Chairman
Dated this Friday, 6 November 2020
P a g e | 15
AUDITOR’S INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF SKY AND SPACE GLOBAL LTD
Moore Australia Audit (WA)
Level 15, Exchange Tower,
2 The Esplanade, Perth, WA 6000
PO Box 5785, St Georges Terrace, WA 6831
T +61 8 9225 5355
F +61 8 9225 6181
www.moore-australia.com.au
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2020, there have
been:
a) no contraventions of the auditor independence requirements as set out in the Corporations Act
2001 in relation to the audit, and
b)
no contraventions of any applicable code of professional conduct in relation to the audit.
NEIL PACE
PARTNER
MOORE AUSTRALIA AUDIT (WA)
CHARTERED ACCOUNTANTS
Signed at Perth on the 6th day of November 2020.
Moore Australia Audit (WA) – ABN 16 874 357 907.
An independent member of Moore Global Network Limited - members in principal cities throughout the world.
Liability limited by a scheme approved under Professional Standards Legislation.
16
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
ANNUAL REPORT
30 June 2020
Consolidated statement of profit or loss and other comprehensive income
for the year ended 30 June 2020
Revenue
Other income
Operating costs
Professional and consultancy fees
Marketing expenses
Travel and subsistence costs
Corporate expenses
Directors’ fees
Employee benefits expense
Office and administration costs
Depreciation
Amortisation
Impairment loss
Finance costs
Other expenses
Loss before tax
Income tax expense
Net loss for the year
Other comprehensive income, net of income tax
(cid:132) Items that may be reclassified subsequently to profit or loss
(cid:134) Foreign currency movement gain/(loss)
Other comprehensive income for the year, net of tax
Note
2
2020
$
-
118,181
118,181
12
(5,788,200)
2019
$
-
20,411
20,411
-
(2,274,281)
(2,898,898)
(95,821)
(269,076)
(125,698)
(255,338)
(555,243)
(677,656)
(160,714)
(596,726)
(1,151,802)
(2,151,689)
(445,766)
(258,135)
(1,018,087)
(1,057,375)
-
(94,962)
(2,452,456)
(24,037,042)
(1,002,706)
(313,093)
(35,151)
(510,072)
3a
3b
3c
3d
3e
(14,314,191)
(33,773,204)
5
24,032
3,377,498
(14,290,159)
(30,395,706)
260,937
260,937
(2,871)
(2,871)
Total comprehensive loss attributable to members of the parent entity
(14,029,222)
(30,398,577)
Loss for the period attributable to:
(cid:132) Non-controlling interest
(cid:132) Owners of the parent
Total comprehensive income attributable to:
(cid:132) Non-controlling interest
(cid:132) Owners of the parent
Earnings per share:
Basic and diluted loss per share (cents per share)
(2,029)
19,097
(14,288,130)
(30,414,803)
(8,310)
19,933
(14,020,912)
(30,418,510)
(cid:3412)
(0.61)
6
(cid:3412)
(1.56)
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.
P a g e | 17
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Consolidated statement of financial position
as at 30 June 2020
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Plant and equipment
Intangible assets
Right of use assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Employee benefits
Borrowings
Current tax liabilities
Lease liability
Total current liabilities
Non-current liabilities
Trade and other payables
Lease liability
Total non-current liabilities
Total liabilities
Net assets / (liabilities)
Equity
Issued capital
Reserves
Accumulated losses
Equity attributable to equity holders of the parent
Non-controlling interest
Total equity / (deficiency)
ANNUAL REPORT
30 June 2020
Note
2020
$
2019
$
7
8
9
10
11
12a
13
14
5c
15a
12b
15b
74,308
253,596
1,935,055
3,015,659
327,904
4,950,714
118,388
215,362
-
415,283
533,671
-
-
215,362
861,575
5,166,076
5,391,870
1,545,099
52,940
70,236
2,349,442
1,570,152
82,512
145,973
115,950
-
8,022,737
3,301,437
3,000,000
527,091
3,527,091
-
-
-
11,549,828
3,301,437
(10,688,253)
1,864,639
16a
17
62,597,080
61,078,478
397,066
129,848
(73,715,936)
(59,385,534)
(10,721,790)
61,208,326
22
33,537
41,847
(10,688,253)
1,822,792
The consolidated statement of financial position is to be read in conjunction with the accompanying notes.
P a g e | 18
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Consolidated statement of changes in equity
for the year ended 30 June 2020
Note
ANNUAL REPORT
30 June 2020
Balance at 1 July 2018
Loss for the year
Other comprehensive income for
the period attributable owners of
the parent
Total comprehensive income for
the year attributable owners of the
parent
Transaction with owners, directly in
equity
Shares issued during the year
Transfer to issued capital
Transaction costs
Balance at 30 June 2019
16a
16c
16a
Balance at 1 July 2019
Initial application upon adoption of
AASB 16
Balance as at 30 June 2019
(restated)
Loss for the year
Other comprehensive income for
the year attributable owners of the
parent
Total comprehensive income for
the year attributable owners of the
parent
Transaction with owners, directly in
equity
Shares issued during the year, net
of costs
Share
Based
Payment
Reserve
Foreign
Currency
Translation
Reserve
Accumulated
Losses
Contributed
equity
$
$
$
$
Non-Controlling
Interest
$
Total
$
51,252,611
473,000
133,555
(28,970,731)
21,914
22,910,349
-
-
-
-
9,352,867
-
-
-
-
-
473,000
(473,000)
-
61,078,478
61,078,478
-
61,078,478
-
-
-
-
(30,414,803)
19,097
(30,395,706)
(3,707)
-
836
(2,871)
(3,707)
(30,414,803)
19,933
(30,398,577)
-
-
-
-
-
-
-
-
-
-
-
-
-
9,352,867
-
-
129,848
(59,385,534)
41,847
1,864,639
129,848
(59,385,534)
41,847
1,864,639
-
(42,272)
-
(42,272)
129,848
(59,427,806)
41,847
1,822,367
-
(14,288,130)
(2,029)
(14,290,159)
-
-
-
-
-
-
-
267,218
-
(6,281)
260,937
-
267,218
(14,288,130)
(8,310)
(14,029,222)
-
-
-
-
-
1,518,602
397,066
(73,715,936)
33,537
(10,688,253)
Balance at 30 June 2020
62,597,080
16a
1,518,602
The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.
P a g e | 19
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Consolidated statement of cash flows
for the year ended 30 June 2020
Cash flows from operating activities
Interest received
Payments to suppliers and employees
Net Income tax paid
Interest paid
Net cash used in operating activities
Cash flows from investing activities
Purchase of plant and equipment
R&D rebates and grants received
Payments for development expenditure
Net cash (used in)/provided by investing activities
Cash flows from financing activities
Proceeds from issue of shares and options
Payments for capital raising costs
Payments for lease liabilities
Net proceeds from borrowings
Net cash provided by financing activities
Net decrease in cash held
Cash and cash equivalents at the beginning of the year
Foreign exchange movement in cash
ANNUAL REPORT
30 June 2020
Note
2020
$
2019
$
959
20,411
(3,523,394)
(8,280,570)
(8,677)
(5,862)
(126,023)
-
7d
(3,657,135)
(8,266,021)
(1,191)
(1,322,235)
2,662,156
1,442,775
(2,513,648)
(9,375,556)
147,317
(9,255,016)
1,637,432
9,872,258
(118,830)
(544,747)
(70,525)
-
319,516
1,427,411
1,767,593
10,754,922
(1,742,225)
(6,766,115)
1,935,055
8,888,289
(118,522)
(187,119)
Cash and cash equivalents at the end of the year
-
7b
74,308
1,935,055
The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.
.
P a g e | 20
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
ANNUAL REPORT
30 June 2020
Statement of significant accounting policies
Note 1
These are the consolidated financial statements and notes of Sky and Space Global Limited (SAS or the Company) and controlled
entities (collectively the Group). The Company is a company limited by shares, domiciled and incorporated in Australia.
The financial statements were authorised for issue on 6 November 2020 by the directors of the Company.
a. Basis of preparation
The consolidated financial statements comprise the consolidated financial statements of the Group. For the purposes of
preparing the consolidated financial statements, the Group is a for-profit entity. Material accounting policies adopted in the
preparation of these financial statements are presented below. They have been consistently applied unless otherwise stated.
i. Statement of compliance
These financial statements are general purpose financial statements which have been prepared in accordance with
Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board (AAS Board) and
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), and
the Corporations Act 2001 (Cth).
Australian Accounting Standards (AASBs) set out accounting policies that the AAS Board has concluded would result in a
financial report containing relevant and reliable information about transactions, events and conditions to which they
apply. Compliance with AASBs ensures that the financial statements and notes also comply with IFRS as issued by the
IASB.
ii. Going concern
The financial report has been prepared on a going concern basis, which contemplates the continuity of normal business
activity and the realisation of assets and the settlement of liabilities in the ordinary course of business following the
effectuation of the DOCA.
The Group incurred a loss for the year of $14,290,159 (2019: $30,395,706 loss) and a net operating cash out-flow of
$3,657,135 (2019: $8,266,021 out-flow).
On 24 December 2019 the Company raised $1,637,432 net off costs as announced on 23 March 2020. During the 2020
financial year, the Group received $2,662,156 in R& D tax claims from 2019 and government grants. The Group expects
to continue to receive R & D tax claims and government grants in future years.
On 6 April 2020, the Company announced that it had appointed Voluntary Administrators of Sky and Space Global Limited
and were undertaking a preliminary review of the operations to determine if the Company can be recapitalised.
1 July 2020, the Company announced that it had entered into a Deed of Company Arrangement (“DOCA”) presented by
Laika Capital Partners Pty Ltd which was ultimately executed on 21 July 2020.
The ability of the Group to continue as a going concern is principally dependent upon the ability of the Company to
secure funds from capital raisings and manage its contractual and discretionary cash outflows in line with available
funds to enable the Group to meet both its current obligations and its committed future expenditure, as disclosed at
note 9 to the financial report.
Management has prepared a cash flow forecast, which includes anticipated proceeds from effectuation of the DOCA,
receipt of research and development tax claim from UK authorities, receipt of other grants from European grant providers
and conversion or restructure of existing loans. The directors are satisfied that the going concern basis of preparation of
the financial report is appropriate, on the basis of:
(cid:132)
(cid:132)
(cid:132)
(cid:132)
(cid:132)
Effectuation of the DOCA and subseqeuent capital raisings post effectuation;
Completed settlement agreement with GomSpace in January 2020;
Completed Settlement Agreement with Virgin Orbit in October 2020 terminating the LSA Agreement;
Company’s history of receiving research and development tax claims and grants; and
The ability of the Company to negotiate successfully with key suppliers to delay or renegotiate committed future
expenditure if required due to funds constraints.
P a g e | 21
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 1
Statement of significant accounting policies
ANNUAL REPORT
30 June 2020
The ability of the Company to raise sufficient funds to enable it to successfully launch the Group’s nano-satellites and to
meet its contractual expenditure commitments, represents a material uncertainty that may cast significant doubt on the
Group’s ability to continue as a going concern. Should the Company be unable to continue as a going concern it may be
required to realise its assets and extinguish its liabilities other than in the normal course of business and at amounts
different to those stated in the financial statements. The financial report of the Company does not include any
adjustments relating to the recoverability and classification of asset carrying amounts or to the amount and classification
of liabilities that might result should the Company be unable to continue as a going concern and meet its debts and
liabilities as and when they fall due.
Given the circumstances detailed above, the Directors have concluded that a going concern basis is appropriate for the
preparation of the financial statements.
iii. Use of estimates and judgments
The preparation of consolidated financial statements requires management to make judgements, estimates and
assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.
These estimates and associated assumptions are based on historical experience and various factors that are believed to
be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying
values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these
estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in any future periods affected.
Judgements made by management in the application of AASBs that have significant effect on the consolidated financial
statements and estimates with a significant risk of material adjustment in the next year are discussed in Note 1y.
iv. Comparative figures
Where required by AASBs comparative figures have been adjusted to conform with changes in presentation for the
current financial year.
Where the Group retrospectively applies an accounting policy, makes a retrospective restatement or reclassifies items in
its financial statements, an additional (third) statement of financial position as at the beginning of the preceding period
in addition to the minimum comparative financial statements is presented.
b. Accounting Policies
The Group has consistently applied the following accounting policies to all periods presented in the financial statements. The
Group has considered the implications of new and amended Accounting Standards applicable for annual reporting periods
beginning after 1 July 2020 but determined that their application to the financial statements is either not relevant or not material.
c. Principles of consolidation
As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the consolidated financial
statements as well as their results for the year then ended. Where controlled entities have entered (left) the Consolidated Group
during the year, their operating results have been included (excluded) from the date control was obtained (ceased).
i. Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on
which control is transferred to the Group. Control exists when the Group is exposed to variable returns from another
entity and has the ability to affect those returns through its power over the entity.
The Group measures goodwill at the acquisition date as:
(cid:132) the fair value of the consideration transferred; plus
(cid:132) the recognised amount of any non-controlling interests in the acquire; plus
(cid:132)
if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree;
less
(cid:132) the net recognised amount of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
The consideration transferred does not include amounts related to settlement of pre-existing relationships. Such
amounts are generally recognised in profit or loss.
P a g e | 22
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 1
Statement of significant accounting policies
ANNUAL REPORT
30 June 2020
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group
incurs in connection with a business combination are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration
is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes
to the fair value of the contingent consideration are recognised in profit or loss.
ii. Subsidiaries
Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated
financial statements from the date that control commences until the date that control ceases.
The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by
the Group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests
even if doing so causes the non-controlling interests to have a deficit balance.
A list of controlled entities is contained in Note 18 Controlled Entities of the financial statements.
iii. Loss of control
Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests
and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is
recognised in profit or loss. If the Group retains any interest in the previous subsidiary, than such interest is measured at
fair value at the date control is lost. Subsequently it is accounted for as an equity-accounted investee or as an available-
for-sale financial asset depending on the level of influence retained.
iv. Transactions eliminated on consolidation
All intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements.
d. Current and Non-Current classification
The group presents assets and liabilities in the statement of financial position based on current/non-current classification.
An asset is current when it is:
(cid:132) Expected to be realised or intended to be sold or consumed in the normal operating cycle;
(cid:132) Held primarily for the purpose of trading;
(cid:132) Expected to be realised within twelve months after the reporting period; or
(cid:132) A Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period.
All other assets are classified as non-current.
A liability is current when it is:
(cid:132) Expected to be settled in normal operating cycle;
(cid:132) Held primarily for the purpose of trading;
(cid:132)
(cid:132) There is no unconditional right to defer the settlement of the liability for at least twelve months after the
It is due to be settled within twelve months after the reporting period; or
reporting period.
The group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
e. Foreign currency transactions and balances
i. Functional and presentation currency
The functional currency of the Group is measured using the currency of the primary economic environment in which that
entity operates. The financial statements are presented in Australian dollars which is the Group’s functional and
presentation currency.
ii. Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of
the transaction. Foreign currency monetary items are translated at the period-end exchange rate. Non-monetary items
measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary
items measured at fair value are reported at the exchange rate at the date when fair values were determined.
P a g e | 23
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 1
Statement of significant accounting policies
ANNUAL REPORT
30 June 2020
Exchange differences arising on the translation of monetary items are recognised in the profit or loss except where
deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive
income to the extent that the gain or loss is directly recognised in other comprehensive income, otherwise the exchange
difference is recognised in the profit or loss.
iii. Group Companies
On consolidation, the assets and liabilities of foreign operations are translated into Australian dollars at the rate of
exchange prevailing at the reporting date and their statements of profit or loss are translated at exchange rates prevailing
at the dates of the transactions. The exchange differences arising on translation for consolidation purposes are
recognised in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive
income relating to that particular foreign operation is recognised in profit or loss.
Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of
assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated
at the spot rate of exchange at the reporting date.
f. Taxation
i.
Income tax
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable
income tax rates enacted, or substantially enacted, as at reporting date in countries where the Group’s subsidiaries and
associates operate and generate taxable income. The current income tax expense includes the amount due to the Group
in relation to the R&D claim filed by Sky and Space Global (UK) Limited in respect of qualifying R&D costs. Current tax
liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation
authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the
period as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates to
items recognised outside profit or loss.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have
been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial
recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable
profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset
is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their
measurement also reflects the manner in which management expects to recover or settle the carrying amount of the
related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures,
deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be
controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets
and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to
income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where
it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will
occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or
settled.
P a g e | 24
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 1
Statement of significant accounting policies
ii. Goods and services tax (GST)
ANNUAL REPORT
30 June 2020
Goods and services tax (GST) is the generic term for the broad-based consumption taxes that the Group is exposed to
such as:
(cid:132) Australia (Goods and Services Tax or GST);
(cid:132) United Kingdom (Value-added tax or VAT);
(cid:132) USA (Value-added tax or VAT);
(cid:132) Poland (Value-added tax or VAT); and
(cid:132)
Israel (Value-added tax or VAT)
hereafter collectively referred to as GST.
Revenues, expenses, and assets are recognised net of the amount GST), except where the amount of GST incurred is not
recoverable from the taxation authority. In these circumstances the GST is recognised as part of the cost of acquisition
of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are
shown inclusive of GST.
The net amount of GST recoverable from, or payable to, the Australian Taxation Office (or jurisdictional equivalent) is
included as a current asset or liability in the balance sheet.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and
financing activities, which are disclosed as operating cash flows.
g. Plant and equipment
i. Recognition and measurement
Items of plant and equipment are measured at cost less accumulated depreciation (see below) and impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets
includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working
condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they
are located, and an appropriate proportion of production overheads.
Where parts of an item of plant and equipment have different useful lives, they are accounted for as separate items of
plant and equipment.
Gains and losses on disposal of an item of plant and equipment are determined by comparing the proceeds from disposal
with the carrying amount of plant and equipment and are recognised net within “other income” in profit or loss.
The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess of the
recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows
that will be received from the assets employment and subsequent disposal. The expected net cash flows have not been
discounted to their present values in determining recoverable amounts.
ii. Subsequent costs
The cost of replacing part of an item of plant and equipment is recognised in the carrying amount of the item if it is
probable that the future economic benefits embodied within the part will flow to the Company and its cost can be
measured reliably. The costs of the day-to-day servicing of plant and equipment are recognised in the income statement
as an expense as incurred.
iii. Depreciation
Depreciation is charged to the income statement on a diminishing balance basis over the estimated useful lives of each
part of an item of plant and equipment, except to the extent that they are included in the carrying amount of another
asset as an allocation of production overheads.
Depreciation rates and methods are reviewed annually for appropriateness. The depreciation rates used for the current
and comparative period are:
2018%
(cid:132) Office equipment
(cid:132) Nano-satellite equipment
2020
3 – 5 years
3 – 5 years
2019
3 – 5 years
3 – 5 years
P a g e | 25
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 1
Statement of significant accounting policies
ANNUAL REPORT
30 June 2020
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is
greater than its estimated recoverable amount.
h. Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits
held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or
less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value,
and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position.
i.
Intangible assets
Intangible assets acquired as part of a business combination or asset acquisition, other than goodwill, are initially measured
at their fair value at the date of acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite
life intangible assets are not amortised and are subsequently measured at cost less any impairment. The gains and losses
recognised in profit or loss arising from the de-recognition of intangible assets are measured as the difference between net
disposal proceeds and the carrying amount of the intangible asset. The amortisation method and useful lives of finite life
intangible assets are reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for
prospectively by changing the amortisation method or period.
i. Research and software development costs
Research costs are expensed as incurred. Development expenditures constitute costs relating to the design and
development of software for satellites. The design costs are integral to the software being developed and therefore the
design and development costs are recognised together as one intangible asset under the heading software
development costs. These costs are recognised as an intangible asset where the Group can demonstrate:
(cid:132)
(cid:132)
(cid:132)
(cid:132)
(cid:132)
(cid:132)
the technical feasibility of completing the intangible asset so that it will be available for use or sale;
its intention to complete the intangible asset and use or sell it;
its ability to use or sell the intangible asset;
how the intangible asset will generate probable future economic benefits;
the availability of adequate technical , financial and other resources to complete the development and to use or
sell the intangible asset; and
its ability to measure reliably the expenditure attributable to the intangible asset during its development.
Following initial recognition of the software development costs as an asset, the asset is carried at cost less any
accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when development is
complete, and the asset is available for use. It is amortised over the period of expected future benefit. Amortisation is
recorded in administrative expenditure. During the period of development, the asset is assessed for impairment
annually.
The estimated useful lives are as follows:
2018%
(cid:132)
(cid:132)
Licences
Software development costs
2020
1 – 5 years
3 – 5 years
2019
1 – 5 years
3 – 5 years
j. Fair Value
i. Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending
on the requirements of the applicable AASB.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly
unforced transaction between independent, knowledgeable and willing market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used to
determine fair value. Adjustments to market values may be made having regard to the characteristics of the specific asset
or liability. The fair values of assets and liabilities that are not traded in an active market are determined using one or
more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market
data.
P a g e | 26
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 1
Statement of significant accounting policies
ANNUAL REPORT
30 June 2020
To the extent possible, market information is extracted from either the principal market for the asset or liability (i.e. the
market with the greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the
most advantageous market available to the entity at the end of the reporting period (i.e. the market that maximises the
receipts from the sale of the asset or minimises the payments made to transfer the liability, after taking into account
transaction costs and transport costs).
For non-financial assets, the fair value measurement also considers a market participant's ability to use the asset in its
highest and best use or to sell it to another market participant that would use the asset in its highest and best use.
The fair value of liabilities and the entity's own equity instruments (excluding those related to share-based payment
arrangements) may be valued, where there is no observable market price in relation to the transfer of such financial
instruments, by reference to observable market information where such instruments are held as assets. Where this
information is not available, other valuation techniques are adopted and, where significant, are detailed in the respective
note to the financial statements.
ii. Fair value hierarchy
AASB 13 Fair Value Measurement requires the disclosure of fair value information by level of the fair value hierarchy,
which categorises fair value measurements into one of three possible levels based on the lowest level that an input that
is significant to the measurement can be categorised into as follows:
Level 1
Level 2
Level 3
Measurements based on quoted prices
(unadjusted) in active markets for
identical assets or liabilities that the
entity can access at the measurement
date.
Measurements based on inputs other
than quoted prices included in Level 1
that are observable for the asset or
liability, either directly or indirectly.
Measurements based on unobservable
inputs for the asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation
techniques. These valuation techniques maximise, to the extent possible, the use of observable market data. If all
significant inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one or more
significant inputs are not based on observable market data, the asset or liability is included in Level 3.
iii. Valuation techniques
The Group selects a valuation technique that is appropriate in the circumstances and for which sufficient data is available
to measure fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics of
the asset or liability being measured. The valuation techniques selected by the Group are consistent with one or more of
the following valuation approaches:
(cid:132) Market approach: valuation techniques that use prices and other relevant information generated by market transactions
for identical or similar assets or liabilities.
(cid:132)
Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a single
discounted present value.
(cid:132) Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service
capacity.
Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing the
asset or liability, including assumptions about risks. When selecting a valuation technique, the Group gives priority to
those techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs that
are developed using market data (such as publicly available information on actual transactions) and reflect the
assumptions that buyers and sellers would generally use when pricing the asset or liability are considered observable,
whereas inputs for which market data is not available and therefore are developed using the best information available
about such assumptions are considered unobservable.
k.
Impairment of non-financial assets
The carrying amounts of the Group’s non-financial assets are reviewed at each reporting date to determine whether there is
any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated.
P a g e | 27
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 1
Statement of significant accounting policies
ANNUAL REPORT
30 June 2020
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable
amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent
from other assets and groups. Impairment losses are recognised in the income statement, unless the asset has previously
been revalued, in which case the impairment loss is recognised as a reversal to the extent of that previous revaluation with
any excess recognised through the income statement. Impairment losses recognised in respect of cash-generating units are
allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount
of the other assets in the unit on a pro rata basis.
The recoverable amount of an asset or cash-generating unit is the greater of its fair value less costs to sell and value in use.
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. For an asset that does
not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which
the asset belongs.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has
decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine
the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation and amortisation, if no impairment loss had been
recognised.
l. Financial instruments – assets
i. Classification
The Group classifies its financial assets in the following measurement categories:
(cid:132) those to be measured subsequently at fair value (either through OCI or through profit or loss), and
(cid:132) those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual terms of
the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in
equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable
election at the time of initial recognition to account for the equity investment at fair value through other
comprehensive income (FVOCI).
The Group reclassifies debt investments when and only when its business model for managing those assets changes.
ii. Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Group commits
to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial
assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of
ownership.
iii. Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss (FVTPL), transaction costs that are directly attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried at FVTPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows
are solely payment of principal and interest.
(1) Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and
the cash flow characteristics of the asset. There are three measurement categories into which the Group classifies
its debt instruments:
(cid:132) Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest are measured at amortised cost. Interest income from these financial assets is
included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is
recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and
losses. Impairment losses are presented as separate line item in the statement of profit or loss.
P a g e | 28
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 1
Statement of significant accounting policies
ANNUAL REPORT
30 June 2020
(cid:132) FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the
assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the
carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income
and foreign exchange gains and losses which are recognised in profit or loss. When the financial asset is
derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss
and recognised in other gains/(losses). Interest income from these financial assets is included in finance income
using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses)
and impairment expenses are presented as separate line item in the statement of profit or loss.
(cid:132) FVTPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVTPL. A gain or loss on a
debt investment that is subsequently measured at FVTPL is recognised in profit or loss and presented net within
other gains/(losses) in the period in which it arises.
(2) Equity instruments
(cid:132) The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected
to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair
value gains and losses to profit or loss following the derecognition of the investment. Dividends from such
investments continue to be recognised in profit or loss as other income when the Group’s right to receive payments
is established.
(cid:132) Changes in the fair value of financial assets at FVTPL are recognised in other gains/(losses) in the statement of profit
or loss as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at
FVOCI are not reported separately from other changes in fair value.
iv. Impairment
The Group assesses on a forward-looking basis, the expected credit losses associated with its debt instruments carried at
amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant
increase in credit risk.
For trade receivables, the Group applies the simplified approach permitted by AASB 9, which requires expected lifetime
losses to be recognised from initial recognition of the receivables.
m. Financial instruments - liabilities
i. Classification
The Group classifies its financial liabilities in the following measurement categories:
(cid:132) those to be measured subsequently at FVTPL, and
(cid:132) those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial liabilities and the contractual terms
of the cash flows.
For financial liabilities measured at FVTPL, gains and losses, including any interest expenses will be recorded in profit or
loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest
expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also
recognised in profit or loss.
For financial liabilities measured at amortised cost, the effective interest method is a method of calculating the amortised
cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the
rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an
integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life
of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability.
ii. Recognition and derecognition
Regular way purchases of financial liabilities are recognised on trade-date, the date on which the Group commits to
purchase the financial liability. Financial liabilities are derecognised when the Group’s obligations are discharged,
cancelled or have expired. The difference between the carrying amount of the financial liabilities derecognised and the
consideration paid and payable is recognised in profit or loss.
iii. Measurement
At initial recognition, the Group measures financial liabilities at its fair value plus, in the case of financial liabilities not at
fair value through profit or loss (FVTPL), transaction costs that are directly attributable to the acquisition of the financial
liabilities. Transaction costs of financial liabilities carried at FVTPL are expensed in profit or loss.
P a g e | 29
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 1
Statement of significant accounting policies
n. Finance income and expenses
ANNUAL REPORT
30 June 2020
The Group’s finance income and finance costs include interest income and interest expense.
Interest income or expense is recognised using the effective interest method.
All revenue is stated net of the amount of GST or Sales taxes (note 1f.ii Goods and services tax (GST)).
o. Employee benefits
i. Defined contribution superannuation funds
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions onto a
separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to
defined contribution superannuation funds are recognised as an expense in the income statement as incurred.
ii. Short-term benefits
Liabilities for employee benefits for wages, salaries and annual leave that are expected to be settled within 12 months of
the reporting date represent present obligations resulting from employees’ services provided to the reporting date and
are calculated at undiscounted amounts based on remuneration wage and salary rates that the Group expects to pay at
the reporting date including related on-costs, such as workers compensation insurance and payroll tax.
Non-accumulating non-monetary benefits, such as medical care, housing, cars and free or subsidised goods and services,
are expensed based on the net marginal cost to the Group as the benefits are taken by the employees.
iii. Other long-term benefits
The Group’s obligation in respect of long-term employee benefits other than definite benefit plans is the amount of
future benefit that employees have earned in return for their service in the current and prior periods plus related on-
costs; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. The
discount rate is the Reserve Bank of Australia’s cash rate at the report date that have maturity dates approximating the
terms of the Group’s obligations. Any actuarial gains or losses are recognised in profit or loss in the period in which they
arise.
iv. Other benefits
A provision is made for the Group’s liability for employee benefits arising from services rendered by employees to
reporting date. Employee benefits that are expected to be settled within one period have been measured at the amounts
expected to be paid when the liability is settled, plus related on-costs.
The Group has an auto-enrolment pension scheme for UK employees. Contributions are charged to the statement of
comprehensive income in the period they are payable.
p. Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is
probable that an outflow of economic benefits will result and that outflow can be reliably measured.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and, when appropriate, the risks specific to the liability.
q. Revenue from contracts with customers
Revenue is measured based on the consideration specified in a contract with a customer. The Group recognises revenue
when it transfers control over a good or service to a customer.
All revenue is stated net of the amount of GST (Note 1f.ii Goods and services tax (GST)).
r.
Interest revenue
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.
s. Segment reporting
An operating segment is a component of the consolidated group that engages in business activities from which it may earn
revenues and incur expenses. Including revenues and expenses that relate to transactions with any of the consolidated
group’s other components.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Board of Directors.
P a g e | 30
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 1
Statement of significant accounting policies
t. Contributed equity
ANNUAL REPORT
30 June 2020
Issued and paid up capital is recognised at the fair value of the consideration received by the Group. Any transactions costs
arising on the issue of ordinary shares are recognised directly in equity as a reduction of the proceeds received.
u. Share-based payments
Share-based compensation relating to share options are recognised at fair value. The fair value of the options is recognised
as an employee benefit expense in the statement of profit or loss and other comprehensive income, with a corresponding
increase in equity. The total amount to be expenses is determined by reference to the fair value of the options granted, which
includes any market performance conditions and the impact of any non-vesting conditions but excludes the impact of any
service and non-market performance vesting conditions.
The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions
are satisfied.
Upon exercise of share options, the proceeds received net of any directly attributable transaction costs are allocated to share
capital.
v. Government grants
Government grants are recognised when there is a reasonable assurance that the grant will be received, and all attached
conditions will be compiled with. When the grant relates to an expense item, it is recognised as income on a systematic basis
over the periods that the costs, which it is intended to compensate, are expensed. When the grant relates to an asset, it is
recognised as income in equal amounts over the expected useful life of the related asset.
w. Earnings per share
i. Basic earnings per share
Basic earnings per share is calculated by dividing the net profit or loss after income tax attributable to equity holders of
the Group, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the financial period, adjusted for bonus elements in ordinary shares issued during the period.
ii. Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary share and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
x. Parent entity financial information
The financial information for the parent entity, Sky and Space Global Limited, disclosed in note 26 has been prepared on
the same basis as the consolidated financial statements, except as set out below:
i.
Investments in subsidiaries, associates and joint ventures entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial statements of
Sky and Space Global Ltd.
Investments in subsidiaries remain impaired this year, see note 26 for further details.
y. Critical Accounting Estimates and Judgments
Management discusses with the Board the development, selection and disclosure of the Group's critical accounting policies
and estimates and the application of these policies and estimates. The estimates and judgements that have a significant risk
of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed
below.
i. Key Estimate – Taxation
The group has carried forward tax losses which have not been recognised as deferred tax assets as it is not considered
sufficiently probable that these losses will be recouped by means of future profits taxable in the relevant jurisdictions.
Refer Note 5 Income Tax.
ii. Key judgements and estimates – Software development costs
Work performed by certain employees and consultants relates specifically to the development and design of the nano-
satellite technology and is therefore capitalised once the criteria set out in Note 1i is met. Management continue to
review and assess the work performed by these employees and consultants and review the asset for impairment annually.
P a g e | 31
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 1
Statement of significant accounting policies
iii. Key judgements and estimates – Impairment
ANNUAL REPORT
30 June 2020
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is
the higher of its fair value less costs of disposal and its value in use.
iv. Key judgements and estimates – Contractual commitments
The Group has significant contracts and agreements in relation to the construction and launching of nano-satellites for
which estimates are made as to any potential liability. Management are reviewing these agreements on an ongoing basis
to assess whether the criteria are met to give rise to either a liability or commitment.
The estimated liability recorded as at 30 June 2020 in relation to the contract and agreements has increased in
comparison to that estimated as at 30 June 2019 based on the terms of Settlement Agreement of the Virgin Orbit Contract
disclosed in note 12 and variations to other contracts concluded subsequent to 30 June 2020.
z. New, revised or amending Accounting Standards and Interpretations adopted
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations (AASB) issued by the
Australian Accounting Standards Board (AASB Board) that are mandatory for the current reporting period.
Any new, revised or amending AASBs that are not yet mandatory have not been early adopted.
i. AASB 16: Leases (applicable to annual reporting periods commencing on or after 1 January 2019).
A number of new or amended standards become applicable for the current reporting period and the Group had to change
its accounting policies and make retrospective adjustments as a result of adopting AASB 16 Leases.
The Group has adopted AASB16 Leases retrospectively with the cumulative effect of initially applying AASB 16 recognised
at 1 July 2019. In accordance with AASB 16 the comparatives for the 2019 reporting period have not been restated.
The Group has recognised a lease liability and right-of-use asset for all leases (with the exception of short-term and low-
value leases) recognised as operating leases under AASB 117 Leases where the Group is a lessee.
Lease liabilities are measured at the present value of the remaining lease payments. The Group’s incremental borrowing
rate as at 1 July 2019 was used to discount the lease payments.
The right-of-use assets for remaining leases have been measured and recognised in the statement of financial position
as at 1 July 2019 by taking into consideration the lease liability and the prepaid and accrued lease payments previously
recognised as at 1 July 2019 (that are related to the lease).
The following practical expedients have been used by the Group in applying AASB 16 for the first time:
(cid:132) For a portfolio of leases that have reasonably similar characteristics, a single discount rate has been applied
(cid:132) Leases that have a remaining lease term of less than 12 months as at 1 July 2019 have been accounted for in the same
way as short-term leases
(cid:132) The use of hindsight to determine lease terms on contracts that have options to extend or terminate
(cid:132) Applying AASB 16 to leases previously identified as leases under AASB 117 and Interpretation 4: Determining whether
an arrangement contains a lease without reassessing whether they are, or contain, a lease at the date of initial
application.
(cid:132) Not applying AASB 16 to leases previously not identified as containing a lease under AASB 117
AASB16 related amounts recognise right-of-use assets relate to the following type of assets:
Assets
Leased buildings
Less: accumulated depreciation for the year
Total assets
Liabilities
Lease liability
P a g e | 32
1 July
2019
$
717,256
(167,360)
549,896
30 June
2020
$
732,853
(317,570)
415,283
592,168
673,064
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 1
Statement of significant accounting policies
Equity
Retained earnings
Loss after income tax
Total equity
ANNUAL REPORT
30 June 2020
(42,272)
-
(42,272)
(42,272)
(299,053)
(341,325)
(cid:132) the amount of the initial measurement of lease liability
(cid:132) any lease payments made at or before the commencement date less any lease incentives received
(cid:132) any initial directs costs; and
(cid:132) restoration costs
ii. AASB Interpretation 23: Uncertainty over income tax treatments (applicable to annual reporting periods commencing
on or after 1 January 2019)
AASB Interpretation 23 provides new guidance on the application of AASB 112 Income Taxes in situations where there is
uncertainty over the appropriate income tax treatment of a transaction or class of transactions, and about whether a
treatment will be accepted by a tax authority.
AASB Interpretation 23 applies to income taxes within the scope of AASB 112 only, which are those based on profits, such
as, company tax. Taxes that are not based on profits (for example GST) are outside the scope of this Interpretation. AASB
Interpretation 23 should be applied consistently to the recognition of both current and deferred taxes.
Adopting AASB Interpretation 23 has not impacted the Group.
aa. New Accounting Standards and Interpretations not yet mandatory or early adopted
A number of new standards, amendments to standards and interpretations issued by the AASB which are not yet mandatorily
applicable to the Group have not been applied in preparing these financial statements. The Group does not plan to adopt
these standards early.
P a g e | 33
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 2
Revenue and other income
a. Other income
Interest income
Note 3
Loss before income tax
a. Employee benefits expense
Salary and wages
Employer’s NI
Other employee related costs
b. Depreciation
Depreciation
c. Amortisation
Amortisation
d. Impairment loss
Impairment of plant and equipment
Impairment of intangible assets
Impairment of trade and other receivables
e. Finance costs
Finance costs
Note 4
Auditor's remuneration
Remuneration of the auditors of the Sky and Space Global Limited for:
(cid:132) Auditing or reviewing the financial reports – Group auditor
(cid:132) Auditing or reviewing the financial reports – Subsidiaries auditor
Note
(i)
(ii)
ANNUAL REPORT
30 June 2020
2020
$
118,181
118,181
2020
$
995,430
143,242
13,130
2019
$
20,411
20,411
2019
$
1,958,690
152,843
40,156
1,151,802
2,151,689
258,135
1,057,375
258,135
1,057,375
-
-
-
94,962
94,962
10,093,194
2,452,456
13,914,803
-
29,045
2,452,456
24,037,042
1,002,706
1,002,706
2020
$
49,500
-
35,151
35,151
2019
$
99,525
117,616
49,500
217,141
(i) Group auditor in the year to June 2020 was Moore Australia Audit (WA), in the year to June 2019 the group auditor was
KPMG.
(ii) Subsidiaries auditor in the year to June 2020 was Moore Australia Audit (WA), in the year to June 2019 the subsidiaries
auditor was KPMG UK
P a g e | 34
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 5
Income tax
a. Income tax expense
Current tax
Current year R&D rebate
Changes in estimate related to prior years R&D rebate
Deferred income tax expense included in income tax expense comprises:
(cid:132) Increase / (decrease) in deferred tax assets
(cid:132) (Increase) / decrease in deferred tax liabilities
ANNUAL REPORT
30 June 2020
Note
2020
$
2019
$
24,032
(67,059)
-
-
2,544,938
899,619
24,032
3,377,498
-
-
-
-
24,032
3,377,498
b. Reconciliation of income tax expense to prima facie tax payable
The prima facie tax payable / (benefit) on loss from ordinary activities before
income tax is reconciled to the income tax expense as follows:
Prima facie tax on operating loss at 27.5% (2019: 27.5%)
(3,936,403)
(9,287,631)
Add / (Less) tax effect of:
(cid:134) Non-allowance items - other
(cid:134) Non-allowable items – Impairment loss
(cid:134) Current year R&D rebate
(cid:134) Prior year R&D rebate
(cid:134) Current year non-deductible R&D expense
(cid:134) Effect of tax rates in foreign jurisdictions
(cid:134) Tax benefit through equity not recognised
(cid:134) DTA/DTL not recognised
(24,032)
674,425
-
-
-
310,403
(2,188)
2,953,763
164,628
6,607,172
(2,544,938)
(899,619)
1,426,245
537,500
(9,654)
628,799
Income tax expense / (benefit) attributable to operating loss
(24,032)
(3,377,498)
The applicable weighted average effective tax rates attributable to operating
profit are as follows
Balance of franking account at year end of the parent
c. Current tax liabilities
Income tax payable
d. Deferred tax assets / (liabilities) not brought to accounts
Tax losses: revenue
Temporary differences
e. Tax losses and deductible temporary differences
Unused tax losses and deductible temporary differences for which no
deferred tax asset has been recognised, that may be utilised to offset tax
liabilities:
P a g e | 35
%
0.61
$
nil
%
36.37
$
nil
82,512
82,512
115,950
115,950
9,998,448
8,640,408
(2,463,135)
(4,058,858)
7,535,313
4,581,550
15,877,944
14,519,904
15,877,944
14,519,904
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 5
Income tax (cont.)
ANNUAL REPORT
30 June 2020
Potential deferred tax assets attributable to tax losses have not been brought to account at 30 June 2020 because the directors
do not believe it is appropriate to regard realisation of the deferred tax assets as probable at this point in time. These benefits
will only be obtained if:
i.
the Group derives future assessable income of a nature and of an amount sufficient to enable the benefit from the
deductions for the loss to be realised;
ii. the Group continues to comply with conditions for deductibility imposed by law; and
iii. no changes in tax legislation adversely affect the Group in realising the benefit from the deductions for the loss.
Note 6
Earnings per share (EPS)
a. Reconciliation of earnings to profit or loss
Loss for the year
Note
2020
$
2019
$
(14,290,159)
(30,395,706)
Loss used in the calculation of basic and diluted EPS
(14,288,130)
(30,414,803)
b. Weighted average number of ordinary shares outstanding during the year
used in calculation of basic EPS
2,341,885,474
1,945,150,170
2020
No.
2019
No.
c. Earnings per share
Basic and diluted EPS (cents per share)
2020
(cid:3412)
2019
(cid:3412)
(0.61)
(1.56)
d. At the end of the 2020 financial year, the Group has 410,927,596 unissued shares under options (2019: 329,075,133) and no
performance shares on issue (2019: nil). The Group does not report diluted earnings per share on annual losses generated by the
Group. During the 2020 financial year the Group's unissued shares under option and partly-paid shares were anti-dilutive.
Note 7
Cash and cash equivalents
a. Current
Cash at bank
b. Reconciliation of cash
Cash at the end of the financial year as shown in the statement of cash flows
is reconciled to items in the statement of financial position as follows:
(cid:132) Cash and cash equivalents
Note
2020
$
2019
$
74,308
1,935,055
74,308
1,935,055
74,308
1,935,055
74,308
1,935,055
c. The Group's exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in Note 24
Financial risk management.
P a g e | 36
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 7 Cash and cash equivalents (cont.)
ANNUAL REPORT
30 June 2020
d. Cash Flow Information
Reconciliation of cash flow from operations to (loss)/profit after income tax
Note
2020
$
2019
$
Loss after income tax
(14,290,159)
(30,395,706)
Non-cash flows in (loss)/profit from ordinary activities:
(cid:132) Depreciation and amortisation
(cid:132) Impairment
(cid:132) Income tax
(cid:132) Interest expense
(cid:132) Foreign currency translation expense
258,135
1,152,337
2,452,456
24,037,042
(32,709)
(3,377,498)
876,683
-
36,572
44,725
Changes in assets and liabilities, net of the effects of purchase and disposal of
subsidiaries:
(cid:132) Increase/(decrease) in receivables and other receivables
(cid:132) (Increase)/decrease in trade and other payables
99,907
6,978,552
246,265
(9,758)
Cash flow from operations
-
(3,657,135)
(8,266,021)
e. Credit standby facilities
The Group has no credit standby facilities.
Note 8
Trade and other receivables
Other receivables
Prepayments
Deposits paid
R&D Tax rebate receivable
GST receivable
Note
(i)
(ii)
(iii)
2020
$
26,011
164,873
44,161
2019
$
2,513
239,022
63,735
-
2,544,934
18,551
165,455
253,596
3,015,659
(i) No other receivables have been impaired in the year (2019: $18,083).
(ii)
Includes prepayment of interest of $104,677. No prepayments have been impaired for the year (2019:$10,962)
(iii) No R&D tax rebate is receivable at 30 June 2020, however the Group expects to submit a research and development
tax credit submitted to UK tax authorities for the 2020 financial year.
(iv) The Group's exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in
Note 24 Financial risk management.
P a g e | 37
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 9
Plant, and equipment
Office equipment
Accumulated depreciation and impairment losses
3 Diamonds
Accumulated depreciation and impairment losses
Pearls
Accumulated depreciation and impairment losses
6U
Accumulated depreciation and impairment losses
Total plant and equipment
ANNUAL REPORT
30 June 2020
2020
$
573,792
(455,404)
118,388
2019
$
562,816
(347,454)
215,362
3,533,804
3,566,131
(3,533,804)
(3,566,131)
-
-
8,305,107
8,381,653
(8,305,107)
(8,381,653)
-
77,249
(77,249)
-
-
77,961
(77,961)
-
118,388
215,362
Movement in carrying amounts
Cost
Balance at 1 July 2018
Additions
Assets under construction
Total
$
Office
Equipment
$
389,851
164,824
3 Diamonds
$
Pearls
$
6U
$
3,729,722
7,413,407
-
11,532,980
-
863,821
77,961
1,106,606
Reclassification to intangible assets
-
(187,922)
-
Effects of movements in foreign exchange
rates
8,141
24,331
104,425
-
-
(187,922)
136,897
Balance at 30 June 2019
562,816
3,566,131
8,381,653
77,961
12,588,561
Accumulated depreciation and impairment
losses
Balance at 1 July 2018
Depreciation
Reclassification to intangible assets
82,038
1,127,074
113,974
-
943,401
(28,761)
-
-
-
-
-
-
1,209,112
1,057,375
(28,761)
Impairment loss
150,320
1,483,261
8,381,653
77,961
10,093,195
Effects of movements in foreign exchange
rates
1,122
41,156
-
-
42,278
Balance at 30 June 2019
CWV at 30 June 2019
347,454
3,566,131
8,381,653
77,961
12,373,199
215,362
-
-
-
215,362
P a g e | 38
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 9 Plant, and equipment (cont.)
ANNUAL REPORT
30 June 2020
Movement in carrying amounts
Cost
Balance at 1 July 2019
Additions
Effects of movements in foreign exchange
rates
Assets under construction
Total
$
Office
Equipment
$
3 Diamonds
$
Pearls
$
6U
$
562,816
3,566,131
8,381,653
77,961
12,588,561
1,191
9,785
-
-
-
1,191
(32,327)
(76,546)
(712)
(99,800)
Balance at 30 June 2020
573,792
3,533,804
8,305,107
77,249
12,489,952
Accumulated depreciation and impairment
losses
Balance at 1 July 2019
Depreciation
Effects of movements in foreign exchange
rates
347,454
107,925
3,566,131
8,381,653
77,961
12,373,199
-
-
-
107,925
25
(32,327)
(76,546)
(712)
118,388
Balance at 30 June 2020
2,176,780
14,135,216
33,220,428
308,996
-
CWV at 30 June 2020
118,388
-
-
-
118,388
Note 10
Intangible asset
Licences
Accumulated amortisation and impairment losses
Development costs
Accumulated amortisation and impairment losses
Total Intangible Assets
Movements
Cost
Balance at 1 July 2018
Additions
Reclassification from plant and equipment
Effects of movements in foreign exchange rates
2020
$
224,009
(224,009)
-
2019
$
227,154
(227,154)
-
16,178,392
13,777,769
(16,178,392)
(13,777,769)
-
-
Development
costs
$
-
-
Total
$
4,211,064
9,507,292
-
59,413
4,211,064
9,543,876
187,922
62,061
Licences
$
-
36,584
187,922
2,648
Balance at 30 June 2019
227,154
13,777,769
14,004,923
P a g e | 39
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 10 Intangible asset (cont.)
Movement in carrying amounts
Accumulated amortisation and impairment losses
Balance at 1 July 2018
Amortisation
Reclassification from plant and equipment
Impairment losses
Effects of movements in foreign exchange rates
Balance at 30 June 2019
CWV at 30 June 2019
Cost
Balance at 1 July 2019
Additions
ANNUAL REPORT
30 June 2020
Licences
$
-
94,962
28,761
137,034
(33,603)
Development
costs
$
-
-
-
Total
$
-
94,962
28,761
13,777,769
13,914,803
-
(33,603)
227,154
13,777,769
14,004,923
-
-
-
227,154
13,777,769
14,004,923
-
2,452,456
2,452,456
Effects of movements in foreign exchange rates
(3,145)
(51,833)
(54,978)
Balance at 30 June 2020
224,009
16,178,392
16,402,401
Accumulated amortisation and impairment losses
Balance at 1 July 2019
Amortisation
Impairment losses
227,154
13,777,769
14,004,923
-
-
-
-
2,452,456
2,452,456
Effects of movements in foreign exchange rates
(3,145)
(51,833)
(54,978)
Balance at 30 June 2020
CWV at 30 June 2020
Note 11 Right of use asset
Leased buildings
Less: Accumulated depreciation
Total Right of Use Assets
Movement in carrying amounts
Leased buildings:
Recognised on Initial application of AASB 16 (previously classified as operating
leases under AASB117)
Accumulated depreciation
Effects of movements in foreign exchange rates
(i) AASB 16 related amounts recognised in the statement of profit or loss
Depreciation charge related to right of use assets
Interest expense on lease liabilities
P a g e | 40
224,009
16,178,392
16,402,401
-
-
2020
$
732,853
(317,570)
415,283
717,256
(317,570)
15,597
415,283
150,210
148,843
299,053
-
2019
$
-
-
-
-
-
-
-
-
-
-
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 12
Trade and other payables
Unsecured
a. Current
Trade payables
Accruals
Other payables
b. Non-current
Accruals
ANNUAL REPORT
30 June 2020
Note
(i)
(ii)
2020
$
2019
$
1,680,756
3,256,417
454,697
862,452
313,100
369,547
5,391,870
1,545,099
(ii)
3,000,000
3,000,000
-
-
(i)
Trade payables are non-interest bearing and usually settled within the lower of terms of trade or 30 days.
(ii)
Subsequent to year end, the Group entered into a Settlement Agreement with Virgin Orbit to terminate the previous
LSA Agreement which contained disputed future commitments of A$55m. The total estimated consideration of the
new agreement is $5,788,200, being $3,000,000 in cash paid quarterly in advance over 3 years from 1 July 2021 plus
11,000,000 shares at A$0.20 per share and 7,000,000 options exercise price A$0.40 each and an expiry date three
years after issue This has been recognised in the financial statements for the year ended 30 June 2020.
The Group's exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in Note 24
Financial risk management.
Note 13
Employee benefits
Employee entitlements
Movement in carrying amounts
Balance at 1 July 2019
Additional provisions
Amounts used
Effects of movements in foreign exchange rates
Balance at 30 June 2020
Note 14 Borrowings
Loan – Telefox Ltd
Loan – CSS Alpha (BVI) Ltd
P a g e | 41
2020
$
52,940
52,940
Employee
entitlements
$
70,236
215,837
2019
$
70,236
70,236
Total
$
70,236
215,837
(232,550)
(232,550)
(583)
52,940
2020
$
(583)
52,940
2019
$
Note
(i)
(ii)
1,718,256
1,570,152
631,186
-
2,349,442
1,570,152
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 14 Borrowings (cont.)
ANNUAL REPORT
30 June 2020
(i)
In May 2019 the Group executed an unsecured convertible loan of USD$1.1m with Telefox Ltd (‘Telefox’). The loan bears
interest monthly at the rate of 2%, unless converted. The maturity date is 16 May 2020. On 5 May 2020, the Group entered
into a Heads of Agreement with Laika Capital Partners Pty Ltd to repay an agreed amount of USD$0.644m(A$0.898m) upon
effectuation of the DOCA. The balance of the loan will be issued into a new convertible note with the ability for Telefox to
convert the debt to equity 4 months after recommencement of trading on the ASX. The loan from 5 May 2020 will bear an
interest rate of 10% per annum.
(ii) In September 2019 the Group executed a short-term convertible loan of USD $550,000 with CSS Alpha (BVI) Limited (‘CSS’)
with an interest rate is 2% per month. The Group repaid USD $250,000 in the quarter ended 31 December 2019. The
repayment date of the loan is 29 February 2020. On 21 May 2020, the Group entered into a Heads of Agreement with Laika
Capital Partners Pty Ltd to repay an agreed amount of USD$0.233m(A$0.324m) upon effectuation of the DOCA. The balance
of the loan will be issued into a new convertible note with the ability for CSS to convert the debt to equity 4 months after
recommencement of trading on the ASX. The loan from 21 May 2020 will bear an interest rate of 10% per annum.
Note 15
Lease liability
a. Current
Lease liability
b. Non-current
Lease liability
Movement in carrying amounts
Recognised on Initial application of AASB 16 (previously classified as
operating leases under AASB117)
Accrued interest during the year
Lease payments made during the year
Effects of movements in foreign exchange rates
Note 16
Contributed equity
2020
No.
2019
No.
2020
$
145,973
145,973
527,091
527,091
673,064
592,168
148,843
(70,525)
2,578
673,064
2020
$
2019
$
-
-
-
-
-
-
2019
$
Fully paid ordinary shares at no par value
2,502,478,657
2,175,014,261
62,597,080
61,078,478
a. Ordinary shares
At the beginning of the period
2,175,014,261
1,840,439,128
61,078,478
51,252,611
Shares issued during the year:
(cid:132) Conversion of Milestone 3 Performance
Rights for the board on 20 July 18 at
$0.086
(cid:132) Share issue
(cid:132) Share issue
(cid:132) Share issue
(cid:132) Share issue
(cid:132) Options exercised at $0.015 each
Transaction costs relating to share issues
-
-
-
-
5,500,000
260,503,568
9,999,999
58,571,566
327,453,396
11,000
-
-
-
-
-
-
-
-
1,637,267
165
473,000
7,815,107
300,000
1,757,151
-
-
(118,830)
(519,391)
At reporting date
2,502,478,657
2,175,014,261
62,597,080
61,078,478
P a g e | 42
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 16 Contributed equity (cont.)
b. Performance shares
Performance shares
At beginning of the period
Conversion of performance shares
to issued capital
At reporting date
c. Options
Options
At the beginning of the period
Options issued/(lapsed) during the
year:
Options exercisable at $0.05 each
expiring 21.5.2022
Options exercisable at $0.015 each
expiring 31.5.2021
Options exercised
At reporting date
d. Capital Management
2020
No.
-
-
-
-
2019
No.
-
5,500,000
(5,500,000)
-
410,927,596
329,075,133
329,075,133
-
-
329,075,133
81,863,463
(11,000)
-
-
410,927,596
329,075,133
ANNUAL REPORT
30 June 2020
2020
$
2019
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The Directors' objectives when managing capital are to ensure that the Group can maintain a capital base so as to maintain
investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors
the availability of liquid funds in order to meet its short-term commitments.
The focus of the Group's capital risk management is the current working capital position against the requirements of the
Group in respect to its operations, software developments programmes, and corporate overheads. The Group's strategy is
to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating
appropriate capital raisings as required.
The working capital position of the Group were as follows:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Provisions
Borrowings
Current tax liabilities
Lease liability
Working capital position
Note
7
8
12
13
14
5c
15a
2020
$
74,308
253,596
2019
$
1,935,055
3,015,659
(5,391,870)
(1,545,099)
(52,940)
(70,236)
(2,349,442)
(1,570,152)
(82,512)
(145,973)
(115,950)
-
(7,694,833)
1,649,277
P a g e | 43
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 17 Reserves
Foreign currency translation reserve
Share-based payment reserve
ANNUAL REPORT
30 June 2020
2020
$
2019
$
(i)
(ii)
397,066
129,848
-
-
397,066
129,848
(i)
Foreign currency translation reserve
The foreign exchange reserve records exchange differences arising on translation of foreign controlled subsidiaries.
(ii)
Share-based payment reserve
The share-based payment reserve includes performance rights, service and deferred rights service. It arises on the
granting and vesting of equity instruments.
Note 18
Controlled entities
Parent entity: Sky and Space Global Limited
Sky and Space Global Limited
Subsidiaries of Sky and Space Global
Limited
Sky and Space Global (UK) Limited
Burleson Energy Holding Inc
Burleson Energy Inc
Burleson Energy Limited Partnership
Country of
Incorporation
Australia
Class of
Shares
Percentage Owned
2020
2019
UK
USA
USA
USA
Ordinary
Ordinary
Ordinary
Ordinary
100.0
100.0
100.0
100.0
75.0
100.0
100.0
100.0
100.0
100.0
75.0
100.0
Subsidiaries of Sky and Space Global (UK)
Limited
Sky and Space (Poland) Software Limited
Sky and Space (Israel) Limited
Poland
Israel
Ordinary
Ordinary
Investments in subsidiaries are accounted for at cost.
Note 19 Key Management Personnel compensation (KMP)
The names and positions of KMP are as follows:
Mr Meir Moalem
Non-executive Chairman
Ms Maya Glickman-Pariente Non-executive Director
Non-executive Director
Mr Yonatan Sharma
Mr Brett Mitchell
Mr Peter Wall
Mr Michael Malone
Mr Di Fulton
Non-executive Director (resigned 31 October 2018)
Non-executive Director (resigned 3 December 2018)
Non-executive Director (resigned 8 April 2019)
Non-executive Director (resigned 8 April 2019)
Mr Meidad Pariente
Chief Technical Officer
Information regarding individual directors and executives’ compensation and some equity instruments disclosures as required
by the Corporations Regulations 2M.3.03 is provided in the Remuneration report table on page 11.
Short-term employee benefits
Post-employment benefits
Total
P a g e | 44
Note
2020
$
2019
$
1,583,649
1,657,934
-
2,009
1,583,649
1,659,943
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
ANNUAL REPORT
30 June 2020
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 20 Related party transactions
Transactions
N
o
2020
t
$
e
Transactions between related parties are on normal commercial
terms and conditions no more favourable than those available to
other parties unless otherwise stated.
Balance at
2020
$
Transactions
2019
$
Balance at
2019
$
i) Transactions with Director related entities
a. Sibella Capital Pty Ltd, a company associated with Mr Brett
Mitchell for reimbursements made for corporate administration
costs and charges for director fees.
b. MGC Pharmaceuticals, a company associated with Mr Brett
Mitchell for reimbursements made to / (amounts owing to) for
corporate administration costs
c. Steinepreis Paganin Lawyers and Consultants, a company
associated with Mr Peter Wall for reimbursements made to /
(amounts owing to) for corporate legal costs
d. Multimodis M.M. Ltd, a company associated with Mr Meir
Moalem for reimbursements made to / (amounts owing to) for
corporate travel costs and charges for director and consultancy
fees
e. Spacecialist Ltd, a company associated with Ms Maya Glickman-
Pariente for reimbursements made to / (amounts owing to) for
corporate travel costs and charges for director and consultancy
fees
f. Chieftain Securities Pty Ltd, a company associated with Mr Brett
Mitchell for charges for corporate and capital raising fees
i. Yonatan Shanan Ltd, a company associated with Mr Yonatan
Sharma, for reimbursements made to / (amounts owing to) for
corporate travel costs
j. PHI Capital, a company associated with Mr Michael Malone, for
recharges made for travel costs and charges for director fees
-
-
-
-
-
-
58,056
2,826
7,650
-
-
-
461,946
(107,921)
527,710
(37,248)
832,144
(87,677)
635,573
(29,417)
-
-
-
-
22,630
-
363,867
(29,417)
290,748
(87,677)
32,035
-
Note 21
Commitments, contingent assets and contingent liabilities
Operating lease commitments due:
Not later than 12 months
Between 12 months and five years
Later than five years
Total operating lease commitments
Commitments for which no provisions were included in the financial statements
are as follows:
Not later than 12 months
Between 12 months and five years
2020
$
-
-
-
-
-
-
-
2019
$
178,857
-
-
178,857
9,064,680
148,544,986
157,609,666
The contractual commitments in 2019 related to the completion of the design, engineering, construction and supply of the
6U nano-satellites by GomSpace, the completion of a network management simulator, deployment services to be provided
by D-Orbit and four launches of nano-satellites by Virgin Orbit’s LauncherOne Vehicle.
In January 2020 the Company and GomSpace announced that they had agreed a full and final settlement and release of any
potential claims and commitments in connection with the original Pearls agreement from 2017 (as amended).
P a g e | 45
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 21 Commitments, contingent assets and contingent liabilities (cont.)
ANNUAL REPORT
30 June 2020
In October 2020, the Company entered into a LSA Settlement Agreement with Virgin Orbit (“Settlement Agreement”) to
terminate a previous agreement dated 12 September 2016 (“LSA Agreement”). Virgin alleged that the Company still owed
Virgin A$55m under the LSA Agreement which the Company disputed. The parties entered into the LSA Settlement
Agreement which included full and final settlement of any alleged liabilities under the LSA Agreement as well as a future
services agreement. The total estimated consideration of the Settlement Agreement is $5,788,200 being $3,000,000 in cash
paid quarterly in advance over 3 years from 1 July 2021 plus 11,000,000 shares at A$0.20 per share and 7,000,000 options
exercise price A$0.40 each and an expiry date three years after issue.
The Company has reviewed its remaining suppliers and services contracts relating to its planned future nano-satellite
construction and launch activities as at the date of this report. The Company is confident that they do not give rise to
substantial purchase obligations beyond the amounts recorded as liabilities as at 30 June 2020.
The commitments in the table shown above are nil because of the impact of the matters noted above.
Note 22 Non-controlling Interest
Opening balance
Foreign exchange movement
Share of loss for the year
Note 23 Operating segments
2020
$
41,847
(6,281)
(2,029)
33,537
2017
$
2019
$
21,914
836
19,097
41,847
2015
$
a.
Identification of reportable segments
The Group has identified its operating segment based on the internal reports that are reviewed and used by the Board of
Directors (Chief operating decision makers) in assessing performance and determining the allocation of resources.
The Group operates primarily in the deployment of nano-satellite constellations. The financial information presented in the
consolidated statement of comprehensive income and the consolidated statement of financial position is the same as that
presented to the chief operating decision maker.
Unless stated otherwise, all amounts reported to the Board of directors as the chief operating decision maker is in accordance
with accounting policies that are consistent to those adopted in the annual financial statements of the Group. During the
current period, the Group is considered to operate in one segment, being the deployment of nano-satellite constellations for
global communication infrastructure.
b. Assets by geographical location
Location of segment assets by geographical location of the assets is disclosed below:
Australia
Poland
U.K.
Israel
Total assets
Note 24
Financial risk management
a. Financial Risk Management Policies
2020
$
10,988
166,857
91,819
591,911
2019
$
908,011
2,806,915
156,660
1,294,490
861,575
5,166,076
This note presents information about the Group's exposure to each of the above risks, its objectives, policies and procedures
for measuring and managing risk, and the management of capital.
The Group's financial instruments consist mainly of deposits with banks, short-term investments, and accounts payable and
receivable.
The Group does not speculate in the trading of derivative instruments.
A summary of the Group's Financial Assets and Liabilities is shown below:
P a g e | 46
Financial Assets
(cid:134) Cash and cash equivalents
(cid:134) Other receivables
Total Financial Assets
Financial Liabilities
Financial liabilities at
amortised cost
(cid:134) Trade and other payables
(cid:134) Borrowings
(cid:134) Lease liability
Total Financial Liabilities
Net Financial
Assets/(Liabilities)
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
ANNUAL REPORT
30 June 2020
Fixed
Interest
Rate
$
-
-
-
Non-
interest
Bearing
$
2019
Total
$
1,065,658
1,935,055
3,015,659
3,015,659
4,081,317
4,950,714
Floating
Interest
Rate
$
74,308
-
74,308
Fixed
Interest
Rate
Non-
interest
Bearing
2020
Total
$
Floating
Interest
Rate
$
74,308
869,397
$
-
253,596
253,596
-
253,596
327,904
869,397
$
-
-
-
-
-
-
-
-
8,444,810
8,444,810
2,349,442
673,064
-
-
2,349,442
673,064
3,022,506
8,444,810
11,467,316
-
-
-
-
-
1,615,335
1,615,335
1,570,152
-
-
-
1,570,152
-
1,570,152
1,615,335
3,185,487
74,308
(3,022,506)
(8,191,214)
(11,139,412)
869,397
(1,570,152)
2,465,982
1,765,227
b. Specific Financial Risk Exposures and Management
The main risk the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting
of interest rate, foreign currency risk and equity price risk.
The Board of directors has overall responsibility for the establishment and oversight of the risk management framework. The
Board adopts practices designed to identify significant areas of business risk and to effectively manage those risks in
accordance with the Group's risk profile. This includes assessing, monitoring and managing risks for the Group and setting
appropriate risk limits and controls. The Group is not of a size nor is its affairs of such complexity to justify the establishment
of a formal system for risk management and associated controls. Instead, the Board approves all expenditure, is intimately
acquainted with all operations and discuss all relevant issues at the Board meetings. The operational and other compliance
risk management have also been assessed and found to be operating efficiently and effectively.
(i) Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract
obligations that could lead to a financial loss to the Group.
The Group does not have any material credit risk exposure to any single receivable or group of receivables under financial
instruments entered into by the Group.
P a g e | 47
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 24 Financial risk management (cont.)
ANNUAL REPORT
30 June 2020
The objective of the Group is to minimise the risk of loss from credit risk. Although revenue from operations is minimal,
the Group trades only with creditworthy third parties.
In addition, receivable balances are monitored on an ongoing basis with the result that the Group's exposure to bad debts
is insignificant. The Group's maximum credit risk exposure is limited to the carrying value of its financial assets as
indicated on the statement of financial position.
The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and
other receivables.
(cid:132) Credit risk exposures
The maximum exposure to credit risk is to its alliance partners and is limited to the carrying amount, net of any
provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the financial
statements.
Credit risk related to balances with banks and other financial institutions is managed by the Group in accordance with
approved Board’s policy. Such policy requires that surplus funds are only invested with financial institutions residing
in Australia, where ever possible.
(cid:132)
Impairment losses
The ageing of the Group's trade and other receivables at reporting date was as follows:
Gross
2020
$
Impaired
2020
$
Past due but not
impaired
2019
$
Net
2020
$
-
-
-
-
-
253,596
253,596
-
-
-
-
-
-
-
-
-
-
-
-
253,596
253,596
-
-
-
-
-
-
-
Trade receivables
Not past due
Past due up to 60 days
Past due 60 days to 90 months
Past due over 90 months
Other receivables
Not past due
Total
(ii) Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting
its obligations related to financial liabilities.
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring sufficient cash
and marketable securities are available to meet the current and future commitments of the Group.
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage
to the Group's reputation.
Typically, the Group ensures that it has sufficient cash to meet expected operational expenses for a period of 60 days,
including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot
reasonably be predicted, such as natural disasters.
P a g e | 48
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 24 Financial risk management (cont.)
ANNUAL REPORT
30 June 2020
The financial liabilities of the Group are confined to trade and other payables as disclosed in the statement of financial
position. All trade and other payables are non-interest bearing and due within 30 days of the reporting date.
(cid:132) Contractual Maturities
The following are the contractual maturities of financial liabilities of the Group:
Within 1 Year
Greater Than 1 Year
2020
$
2019
$
2020
$
2019
$
Total
2020
$
2019
$
Financial liabilities due for payment
Trade and other payables
Borrowings
Lease liability
5,444,810
2,349,442
145,973
1,615,335
1,570,152
3,000,000
-
527,091
Total contractual outflows
7,940,225
3,185,487
3,527,091
Financial assets
Cash and cash equivalents
Other receivables
74,308
253,596
1,935,055
3,015,659
Total anticipated inflows
327,904
4,950,714
-
-
-
Net (outflow)/inflow on financial
instruments
(7,612,321)
1,765,227
(3,527,091)
-
-
-
-
-
-
-
-
8,444,810
2,349,442
673,064
1,615,335
1,570,152
-
11,467,316
3,185,487
74,308
253,596
1,935,055
3,015,659
327,904
4,950,714
(11,139,412)
1,765,227
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier or at
significantly different amounts.
(iii) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will
affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management
is to manage and control market risk exposures within acceptable parameters, while optimising the return.
The Board meets on a regular basis and considers the Group's interest rate risk.
(1) Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting
period whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial
instruments. The Group is also exposed to earnings volatility on floating rate instruments.
Due to the low amount of debt exposed to floating interest rates, interest rate risk is not considered a high risk to
the Group. Movement in interest rates on the Group's financial liabilities and assets is not material.
(2) Foreign exchange risk
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial instrument fluctuating
due to movement in foreign exchange rates of currencies in which the Group holds financial instruments which are
other than the AUD functional currency of the Group.
The group operates internationally and is exposed to foreign exchange risk arising from various currency exposures,
primarily with respect to the British Pound (GBP £), the Euro (€), the United States Dollars (USD $), the Polish Zloty
(PLN zt) and the Israeli Shekel (ILS(cid:3403)).
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated
in a currency that is not the entity’s functional currency. The risk is measured using cash flow forecasting.
The Group has not entered into any derivative financial instruments to hedge such transactions and anticipated
future receipts or payments that are denominated in a foreign currency. The board manages the purchase of foreign
currency to meet operational requirements.
P a g e | 49
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 24
Financial risk management (cont.)
The Group’s exposure to foreign currency risk at the reporting date was as follows:
ANNUAL REPORT
30 June 2020
2020
$
2019
$
Loan denominated in USD
2,349,442
1,570,152
Trade payables in denomination currency
Trade payables – GBP
Trade payables – EUR
Trade payables – USD
Trade payables – PLN
Trade payables – ILS
Cash and cash equivalents held in denomination currency
Cash and cash equivalents – GBP
Cash and cash equivalents – EUR
Cash and cash equivalents – USD
Cash and cash equivalents – PLN
Cash and cash equivalents – ILS
Consolidated entity sensitivity
Exchange rates per AUD as at 30 June
GBP
USD
PLN
ILS
(3) Price risk
374,039
-
3,968
403,714
204,324
(10,734)
4,409
971
45,564
144,773
0.5341
0.6848
2.6572
2.3730
119,146
19,863
101,476
298,639
578,662
26,484
17,500
20,078
41,548
2,297,260
0.5530
0.7020
2.6213
2.5045
Price risk relates to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market prices. The Group does not presently hold material amounts subject to price risk. As such the
Board considers price risk as a low risk to the Group.
(iv) Sensitivity Analyses
The following table illustrates sensitivities to the Group's exposures to changes in interest rates. The table indicates the
impact on how profit and equity values reported at balance sheet date would have been affected by changes in the
relevant risk variable that management considers to be reasonably possible. These sensitivities assume that the
movement in a particular variable is independent of other variables. Foreign exchange risk relates solely to the translation
of the Group’s foreign subsidiary, and as such has no effect on profit.
P a g e | 50
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 24
Financial risk management (cont.)
(1) Interest rates
ANNUAL REPORT
30 June 2020
30 June 2020
30 June 2019
Profit
$
Equity
$
Profit
$
Equity
$
±100 basis points change in interest rates
± 743
± 743
± 8,694
± 8,694
(2) Foreign exchange
30 June 2020
30 June 2019
Profit
$
Year ended 30 June 2020
±10% of Australian dollar strengthening/weakening against the GBP
± 38,477
±10% of Australian dollar strengthening/weakening against the EUR
±10% of Australian dollar strengthening/weakening against the USD
± 441
± 300
Equity
$
± nil(i)
± nil(i)
± 9,266
± 236
± nil(i)
± 165,155
±10% of Australian dollar strengthening/weakening against the PLN
± 35,815
± nil(i)
± 25,709
±10% of Australian dollar strengthening/weakening against the ILS
± 5,955
± nil(i)
± 171,860
(i) No effect as this relates solely to the translation of the foreign entity.
Net Fair Values
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Profit
$
Equity
$
± nil(i)
± nil(i)
± nil(i)
± nil(i)
± nil(i)
Note 25
Events subsequent to reporting date
The impact of the COVID-19 outbreak continues to evolve at the date of this report. The Group is therefore uncertain as to the
full impact that the pandemic will have on its financial condition, liquidity, and future results of operation during future years.
Management is actively monitoring the global situation and its impact on the Group’s financial condition, liquidity, operations,
supplied, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb the
spread, the Group is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition or
liquidity in future years.
Although the Group cannot estimate the length or gravity of the impact of the COVID-19 outbreak at this time, if the pandemic
continues, it may have a material adverse effect on the Group’s results of future operations, financial position, and liquidity in
future years.
In July 2020 and August 2020, the Company has entered into two convertible loans with Laika Capital Partners Pty Ltd totalling
A$575,000 to assist the Group in completing the necessary steps to allow the effectuation of the DOCA subject to Shareholder
and ASX approval to recapitalise the Company and recommence trading on the ASX.
In October 2020, the Company entered into a LSA Settlement Agreement with Virgin Orbit (“Settlement Agreement”) to
terminate a previous agreement dated 12 September 2016 (“LSA Agreement”). Virgin alleged that the Company still owed Virgin
A$55m under the LSA Agreement which the Company disputed. The parties entered into the LSA Settlement Agreement which
included full and final settlement of any alleged liabilities under the LSA Agreement as well as a future services agreement. The
total estimated consideration of the Settlement Agreement is $5,788,200 being $3,000,000 in cash paid quarterly in advance
over 3 years from 1 July 2021 plus 11,000,000 shares at A$0.20 per share and 7,000,000 options exercise price A$0.40 each and
an expiry date three years after issue.
P a g e | 51
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Notes to the consolidated financial statements
for the year ended 30 June 2020
Note 26
Parent entity disclosures
Financial Position of Sky and Space Global Limited
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share based payment reserve
Accumulated losses
Total equity
Financial performance of Sky and Space Global Limited
Profit / (loss) for the year
Other comprehensive income
Total comprehensive income
ANNUAL REPORT
30 June 2020
2020
$
2019
$
10,987
2,000,000
-
-
10,987
2,000,000
846,905
846,905
242,199
242,199
(835,918)
1,757,801
93,918,934
92,400,333
2,282,930
2,282,930
(97,037,782)
(92,925,462)
(835,918)
1,757,801
(4,204,163)
(30,474,085)
-
-
(4,204,163)
(30,474,085)
Guarantees entered into by Sky and Space Global Limited for the debts of its subsidiaries
There are no guarantees entered into by Sky and Space Global Limited for the debts of its subsidiaries as at 30 June 2020 (2019:
none).
Note 27
Company details
The registered office of the Company is:
Street + Postal: Barringtons House
283 Rokeby Road
Subiaco WA 6008
+61 (0)8 6141 3394
+61 (0)8 6141 3101
Telephone:
Facsimile:
P a g e | 52
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Directors' declaration
The Directors of the Company declare that:
ANNUAL REPORT
30 June 2020
1. The financial statements and notes, as set out on pages 17 to 52, are in accordance with the Corporations Act 2001 (Cth)
and:
(a) comply with Accounting Standards;
(b) are in accordance with International Financial Reporting Standards issued by the International Accounting Standards
Board, as stated in Note 1 to the financial statements; and
(c) give a true and fair view of the financial position as at 30 June 2020 and of the performance for the year ended on that
date of the Group.
(d) the Directors have been given the declarations required by s.295A of the Corporations Act 2001 (Cth);
2.
in the directors' opinion there are reasonable grounds to believe that the Group will be able to pay its debts as and when
they become due and payable, based on the factors outlined in Note 1aii Going concern.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the
directors by:
XAVIER KRIS
Executive Chairman
Dated this Friday, 6 November 2020
P a g e | 53
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF SKY AND SPACE GLOBAL LTD
Moore Australia Audit (WA)
Level 15, Exchange Tower,
2 The Esplanade, Perth, WA 6000
PO Box 5785, St Georges Terrace, WA 6831
T +61 8 9225 5355
F +61 8 9225 6181
www.moore-australia.com.au
Opinion
We have audited the financial report of Sky and Space Global Limited (the Company) and its controlled
entities (the “Group”), which comprises the consolidated statement of financial position as at 30 June
2020, the consolidated statement of profit or loss and other comprehensive income, the consolidated
statement of changes in equity and the consolidated statement of cash flows for the year then ended,
and notes to the financial statements, including a summary of significant accounting policies, and the
directors’ declaration.
In our opinion:
a)
the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
i.
giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
financial performance for the year then ended; and
ii.
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (the “Code”) that are relevant
to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the time
of this auditor’s report.
Emphasis of Matter – Comparative Figures
The previous auditor, KPMG, issued an adverse opinion in relation to the financial position of the Group
as at 30 June 2019 and the financial performance of the Group for the year then ended. The basis for
their adverse opinion was that the financial report did not include a provision for contract termination
clauses contained within various supplier and services contracts which were assessed to represented
onerous contracts. Had the Group accounted for the provision in accordance with AASB 137 Provisions,
Contingent Liabilities and Contingent Assets an expense would have been recorded in the consolidated
statement of profit or loss and other comprehensive income for an amount estimated to be approximately
$118 million with the recognition of a current liability for the same amount.
Moore Australia Audit (WA) – ABN 16 874 357 907.
An independent member of Moore Global Network Limited - members in principal cities throughout the world.
Liability limited by a scheme approved under Professional Standards Legislation.
54
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF SKY AND SPACE GLOBAL LTD (CONTINUED)
Emphasis of Matter – Comparative Figures (continued)
Subsequent to 30 June 2020 a number of the supplier and services contracts referred to by KPMG have
been either terminated or renegotiated, as referred to in Note 1Y and Note 12 of the financial statements,
such that the estimated liability under those contracts has now been determined and recorded as an
estimate in the financial statements as at 30 June 2020. Any remaining contracts have been reviewed
by us and as a result we are satisfied that no material additional liabilities, in addition to that recorded
as at 30 June 2020, should arise pursuant to the termination or renegotiation of the contracts.
In our opinion, the adjustment to the amounts provided in respect of liabilities arising from the supplier
and services contracts referred to above represents a change in accounting estimates and not a
correction of errors. A change in accounting estimate is accounted for prospectively by including it in
profit or loss in the period of change, unlike a correction or prior period errors which would require a
restatement of comparative financial information.
Our audit report in relation to the comparative financial information is unqualified, which differs from the
opinion issued by the predecessor auditor, primarily for the reasons that subsequent information we
have been able to obtain has enabled us to conclude that the provision recorded as at 30 June 2020 for
such liabilities relating to the contracts referred to above is appropriate and that changes in these
liabilities recognised since 30 June 2019 represent a change in accounting estimates which are
appropriate to recognise in the statement of profit or loss and other comprehensive income for the year
ended 30 June 2020.
Our opinion is not modified in respect of this matter.
Emphasis of Matter – Material Uncertainty Regarding Going Concern
Without modification to our conclusion expressed above, we draw attention to Note 1(a)(ii) of the
financial statements which states that the financial statements have been prepared on a going concern
basis. The ability to continue as a going concern for at least the next twelve months will require the
Company to achieve various requirements, as set out in Note 1(a)(ii), including undertake capital
raisings post effectuation of the Deed of Company Arrangement. Should the Company be unable to
achieve the requirements outlined in Note 1(a)(ii), it may be required to realise its assets and extinguish
its liabilities other than in the normal course of business and at amounts other than as stated in the
financial report.
55
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF SKY AND SPACE GLOBAL LTD (CONTINUED)
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of our
audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Unrecorded Liabilities and Contractual Commitments
Refer to Notes 1(y), 12 & 21
For the year ended 30 June 2020, the Group has
recorded $14.432 million expenditure as well as
trade and other payables of $8.392 million, as
recorded in the Group’s statement of financial
position.
As at 30 June 2020, ongoing contractual
commitments are disclosed as $nil.
We considered this to be a key audit matter due
to the significance of contractual based liabilities
and commitments to the Group combined with the
inherent risk with underreporting
associated
expenditure and
liabilities and
commitments.
therefore
We also consider this to be a key audit matter as
it was the basis on which an adverse opinion was
issued by the previous auditor in the previous
financial year.
Our procedures included, amongst others:
• Tested a sample of subsequent period expenditure
payments by inspecting underlying documentation and
information, including supplier invoices and statements, to
assess the completeness of liabilities and expenditure
disclosed at the reporting date;
• Examined significant contracts, contract variations and
for existence of potential
settlement agreements
unrecorded liabilities and commitments as at reporting
date;
• Inquired with management as to the presence of any
liabilities or commitments
to significant
contracts. This was compared to the information provided
and our understanding from reviewing the terms of each
contract entered into;
in relation
• Assessed the appropriateness of disclosures contained in
the financial report, specifically in relation to settled
contractual commitments which were disclosed as
committed in the prior year. This assessment was
inclusive of our understanding obtained from our testing,
discussions with management,
review of ASX
announcements and minutes of meetings of Directors to-
date on the Group’s current activities.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Company’s annual report for the year ended 30 June 2020, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this regard.
56
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF SKY AND SPACE GLOBAL LTD (CONTINUED)
Directors’ Responsibility for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and
for such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the directors are responsible for assessing the ability of the Company
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the Company or to
cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibility for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at:
http://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
audit report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report as included in the directors’ report for the year ended
30 June 2020.
In our opinion, the Remuneration Report of Sky and Space Global Ltd, for the year ended 30 June 2020
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express
an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
NEIL PACE
PARTNER
MOORE AUSTRALIA AUDIT (WA)
CHARTERED ACCOUNTANTS
Signed at Perth this 6th day of November 2020.
57
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Additional Information for Listed Public Companies
ANNUAL REPORT
30 June 2020
The following additional information is required by the Australian Securities Exchange in respect of listed public companies and
is applicable as at 1 November 2020.
1
Capital
a. Ordinary share capital
2,502,478,657 ordinary fully paid shares held by 9,404 shareholders.
b. Options over Unissued Shares and Performance Shares
(cid:132) The Company has an additional 410,927,596 options on issue in accordance with the Directors' Report.
(cid:132) The Company has no performance shares on issue, in accordance with Note 16b Performance shares of the financial
statements.
c. Voting Rights
The voting rights attached to each class of equity security are as follows:
(cid:132) Ordinary shares: Each ordinary share is entitled to one vote when a poll is called, otherwise each member present
at a meeting or by proxy has one vote on a show of hands.
(cid:132) Unlisted Options: Options do not entitle the holders to vote in respect of that equity instrument, nor participate
in dividends, when declared, until such time as the options are exercised or performance shares convert and
subsequently registered as ordinary shares.
d. Distribution of Shareholders as at 1 November 2020.
Category (size of holding)
Total Holders
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
223
1,290
1,421
4,438
2,032
9,404
Number
Ordinary
50,576
4,560,658
11,273,166
178,416,950
2,308,177,307
2,502,478,657
% Held of Issued
Ordinary Capital
0.00
0.18
0.45
7.13
92.24
100.00
e. Unmarketable Parcels as at 1 November 2020
As at 1 November 2020 there were 5,183 fully paid ordinary shareholders holding less than a marketable parcel of
shares, comprising 59,204,652 shares.
f. On-Market Buy-Back
There is no current on-market buy-back.
g. Restricted Securities
The Company has no restricted securities on issue.
P a g e | 58
SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Additional Information for Listed Public Companies
ANNUAL REPORT
30 June 2020
h.
Rank Name
20 Largest Shareholders — Ordinary Shares as at as at 1 November 2020
Number of Ordinary
Fully Paid Shares Held
% Held of Issued Ordinary
Capital
1.
MR MEIR MOALEM
2.
MR MEIDAD PARIENTE
3.
YONATAN SHRAMA
4.
5.
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
6.
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
7.
8.
BRISPOT NOMINEES PTY LTD
MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) PTY
LIMITED
9.
MULTIMODIS M M LTD (IL)
10. MISS PINGZHEN LIU
11. UBS NOMINEES PTY LTD
12. SPACECIALIST LTD
13. YONATAN SHANAN LTD
14. BNP PARIBAS NOMINEES PTY LTD
15. MR PATRICK SHANNON PATTISON
16. EVANDON PTY LTD
17. MR ROBERT BRUCE SUTTON
18. EFFEX PTY LTD
19.
CS FOURTH NOMINEES PTY LTD < HSBC CUST NOM AU LTD 11
A/C>
20. J & J STUART PTY LTD
TOTAL
2
Unquoted Securities
303,333,333
301,666,666
301,666,666
57,924,728
41,563,658
36,032,139
34,768,166
29,132,071
27,337,334
24,242,541
19,449,756
18,000,000
17,000,000
10,872,665
10,714,284
9,861,457
9,300,921
9,000,000
8,001,840
8,000,000
12.12
12.05
12.05
2.31
1.66
1.44
1.39
1.16
1.09
0.97
0.78
0.72
0.68
0.43
0.43
0.39
0.37
0.36
0.32
0.32
1,277,868,225
51.04
As at 1 November 2020, the following unquoted securities are on issue:
(cid:132) 329,075,133 Options Expiring 21 May 2022 @ $0.05 – 456 holders
(cid:132) 81,852,463 Options Expiring 31 May 2021 @ $0.015 – 1,071 holders
a. Holders with more than 20%
Nil
3
4
The Company Secretary is Ian Pamensky.
Principal registered office
As disclosed in Note 27 Company details on page 52 of this Annual Report.
5
Registers of securities
As disclosed in the Corporate directory on page i of this Annual Report.
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SKY AND SPACE GLOBAL LIMITED
AND CONTROLLED ENTITIES
ABN 73 117 770 475
Additional Information for Listed Public Companies
6
Stock exchange listing
ANNUAL REPORT
30 June 2020
Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of the Australian
Securities Exchange Limited, As disclosed in the Corporate directory on page i of this Annual Report.
7
Use of funds
The Group has used its funds in accordance with its initial business objectives.
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