S K Y F I I L I M I T E D
Formally known as RKS Consolidated Limited | ABN 20 009 264 699
2 0 1 5 A N N U A L R E P O R T
T A B L E O F C O N T E N T S
Chairman’s Letter
Review of Operations
Directors’ Report
Remuneration Report
Auditor’s Independence Declaration
Corporate Governance Statement
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional ASX Information
Corporate Directory
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SkyFii Limited 2015 Annual Report Chairman’s Letter
Dear Shareholder,
The Board is pleased to present to shareholders
SkyFii’s inaugural Annual Report for the year ended 30
June 2015 (FY15).
The Company experienced a phenomenal year of
positive momentum in FY15 and I’d like to take
this opportunity to highlight some of the notable
milestones the Company has achieved, and in doing so,
acknowledge the valued support of our shareholders,
staff, customers and technology partners in helping us
along this exceptional journey to date.
Our journey over the past 12 months has been nothing
short of remarkable. The Company converted several
large and significant beachhead contracts across
multiple continents. The Company experienced an
extremely strong conversion rate of prospects to
pilots and ultimately to master services agreements
with major retail property groups. By year end, the
Company had delivered its data analytics services into
17 large mall venues with a number of retail property
groups and a further roll-out pipeline of 41 large
venues.
The Company continued to invest heavily in the
product development of its cloud-based Big Data
analytics platform with a number of key feature
enhancements, which will provide the opportunity to
unlock new significant revenue channels from content
delivery and transactional based advertising.
The Company has continued to grow its team in
order to service the increasing market demand for
SkyFii’s data analytics services, in particular from retail
property groups, and to invest building out its Software
as a Service (SaaS) product to unlock new data and
advertising services revenues in the future. SkyFii’s
team grew from 15 to 25 staff in FY15, representing
growth across all functions of the business including
product management and development, project and
account management, data science and corporate.
Thank you
The Board and myself would like to thank our
shareholders for the tremendous support and
confidence they have shown in the Company since
listing on the ASX. We would also like to thank and
acknowledge the support of all our employees,
customers and technology partners, and we look
forward to continuing this journey with you.
Yours Faithfully,
Gary Flowers
Chairman
SkyFii Limited
SkyFii set out to be a technology leader within the Big
Data and data services sectors, to provide a market
leading solution, to set an industry benchmark and
to continuously lead the market with innovation. The
global retail sector has experienced an unprecedented
transformation over recent years with the rapid
consumer shift towards online retailing, online and
mobile consumption of media and advertising and
the proliferation of mobile payments, all technological
advancements built to improve efficiencies.
In order to compete within the new retail sector
paradigm, traditional bricks and mortar retailers have
had to re-invent themselves, to increase their focus on
customer experience to drive in-store engagement,
loyalty and sales, and to connect their in-store
experiences with the online habits of their customers.
At SkyFii, we have been creating the tools to equip
bricks and mortar retailers and property owners to
adapt to this new retail paradigm, by helping them
to better understand their customers’ behaviours,
preferences and desires and use these critical insights
to provide a more personalised, engaging and relevant
in-store shopping experience.
SkyFii’s data analytics services convert bricks and
mortar retailers’ Big Data into actionable data,
providing insights previously only available to
e-commerce retailers – we are helping retailers to
bridge the divide between online and physical retail
environments. The insights derived from the SkyFii
platform help retailers drive customer loyalty and retail
sales, which in turn helps retail property owners to
maximise their rental yields and property values. There
is a massive global opportunity for SkyFii’s Big Data
services, to capture a share of the potential efficiencies
to retailers which are estimated to be worth $3.8
billion1 in Australia alone.
It is with unwavering passion and relentless desire
to provide a global solution that has provided the
momentum to deliver what we consider to be the
market leading real time wireless analytics, data
services and content delivery platform for retailers.
Having successfully won competitive tenders for
3 premium retail groups globally and having been
adopted as the preferred wireless analytics platform
provider to some of the most respected brands in
retail, we believe we have earned this reputation.
Note:
1. PricewaterhouseCoopers estimate, Big Data – The next frontier for innovation (October 2012).
3
www.skyfii.com | /SkyFii | /company/skyfii Review of Operations
SkyFii’s business model
SkyFii’s target markets
The Company derives its revenue through 3 key channels:
Analytics; Advertising; and Data Services.
The Company’s analytics revenues are derived from
providing its cloud-based Big Data analytics platform as
a Software as a Service (SaaS) to retail and other venue
customers. The Company’s SaaS contracts are structured
with initial implementation fees and recurring monthly fees
with typical contract terms of between 12 and 60 months.
Analytics fees vary depending on the size of each venue,
relative to the amount of data captured, processed and
analysed by the Company’s proprietary analytics platform.
For example, recurring analytics fees for large public venues
such as retail malls typically range between $1,200 - $5,500
per mall per month, varying depending on the size of each
venue, the overall portfolio size secured by a master services
agreement and the term of contract secured.
It is this revenue channel which is driving SkyFii’s
rapid footprint growth and is currently the Company’s
predominant source of revenue.
As the Company’s footprint grows, the addressable
audience of registered users and potential retailer partners
and sponsors grows. As such, over time, the Company’s
advertising revenues will become more significant, from the
monetisation of its content delivery and other marketing
products enabled on and by the Company’s analytics
platform (E.g., email marketing tools, SMS tools and mobile
push notifications).
The Company’s data services refers to all of the additional
products SkyFii is beginning to create and implement
through its Big Data engine, which is expected to provide
significant value to the Company in line with the Company’s
growing footprint and data sets.
SkyFii’s ability to deliver globally, scalably and via numerous
distribution channels
As a cloud-based, wireless hardware vendor agnostic
software platform provider, the opportunity for SkyFii is truly
borderless. The Company is able to scalably deploy its data
analytics services remotely via the cloud and meet the data
processing requirements for any venue size and type in any
market globally.
In addition to the scalability of SkyFii’s product offering, the
Company’s international growth and sales strategy is to sell
through key reseller and distribution partners with whom
those partners already have existing customer relationships,
sales teams and operational know-how to deploy wireless
networks and value added services such as the SkyFii
platform. This strategy is allowing SkyFii’s sales process to
be low touch whilst unlocking global distribution channels. In
FY15 the Company has been successful in securing reseller
and distribution relationships with:
• Telecommunications providers;
•
Internet service providers;
• Wireless services providers;
• Systems integrators;
• Authorised hardware vendor resellers;
• Media agencies; and
• Advertising vendors
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Malls
Retailers
QSR
Cafés
Pubs
Airports
Transport hubs
Retail
Transit
Hotels
Healthcare
Hospitals
Medical centres
Municipal venues
Parks
Beaches
City projects
Education
Universities
Stadia
Size of the retail mall market globally
UK
650
retail malls
USA
110,000
retail malls
South East
Asia
1,100
retail malls
South Africa
211
retail malls
Brazil
184
retail malls
Australia &
New Zealand
1,500
retail malls
Based on SkyFii’s current retail mall pricing model for
recurring analytics services fees, the Company has the
potential to break-even on its current fixed cost base by
capturing less than 0.5% of the global retail mall market
presented above. This represents just one target vertical
out of many which are applicable to SkyFii’s product, as
outlined above.
SkyFii Limited 2015 Annual Report R E V I E W O F O P E R A T I O N S
Key performance highlights
Having made a significant investment in FY14 on its initial platform development and the deployment of multiple proof of
concept networks across various target verticals including pubs, quick service restaurants, cafes, supermarkets, retailers and
retail malls, the Company commenced FY15 with the strategic aim of positioning its competitive advantage in the retail mall
segment.
With this strategic focus in FY15 and the continued investment in product development and staff, the Company experienced an
incredibly strong conversion rate of prospects to pilots and ultimately to master services agreements with major retail property
groups, resulting in strong growth across all key operating metrics.
Significant growth in key operating metrics in FY15
In line with the Company’s growth in pilots and contract deployments in FY15 all key operating metrics have experienced
significant growth.
Total User Registrations (millions)
Monthly Customer Visits (millions)
1.0
0.5
0.0
0.7
0.35
0.0
12.0
6.0
0.0
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Monthly Wi-Fi Sessions (millions)
Monthly Data Transfer (Terabytes)
18.0
9.0
0.0
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www.skyfii.com | /SkyFii | /company/skyfii
R E V I E W O F O P E R A T I O N S
Key operating highlights
Australia & New Zealand
In FY15, following a competitive tender process, an
Australian Telco-led consortium including SkyFii, was
selected for a pilot with a Premium Australian Mall Operator,
which commenced in December 2014 and ran into the early
part of 2015.
Following the successful pilot, the consortium was appointed
by the Premium Australian Mall as its partner to roll-out
wireless services including the SkyFii’s wireless data analytics
services to a minimum of 21 malls across Australia, which is
currently well underway.
In addition, the Company was selected as the wireless data
analytics partner to Federation Centres (formerly Centro
Group) for an initial trial, following a competitive tender
process. The Company commenced a trial at the Karingal
Hub Shopping Centre in Victoria in November 2014 and
following the successful delivery of its services, the Company
rolled-out its services to an additional two malls (Warnbro
Centre, Western Australia and Cranbourne Park, Victoria).
In February 2015, the Company secured a master services
agreement with the New Zealand Retail Property Group
(NZRPG), the largest privately owned property management
group in New Zealand, with a current portfolio of 4 retail
malls in New Zealand and an additional mall, Westlakes,
which is currently under development and slated to be the
largest retail hub in the southern hemisphere. The Company
is currently providing its wireless data analytics services at
NZRPG’s Milford Centre in Auckland’s North Shore.
After successfully delivering its wireless network and
data analytics services at two pilot sites (Rouse Hill Town
Centre and the MLC Centre in New South Wales) the
Company secured contracts for the above assets and a
master services agreement with The GPT Group (GPT) in
June 2015 which will govern the roll-out of its services to
up 19 retail and office property assets across Australia. The
Company has already commenced the roll-out of its services
at two additional GPT retail venues (Melbourne Central, in
Melbourne’s CBD and Casuarina Square, in Darwin).
With the significant momentum of pilot conversions
and contracts with these major retail property groups,
particularly during the second half of FY15, the Company
has materially advanced its discussions with other major
listed and unlisted retailers and property groups in Australia,
providing a significant qualified pipeline of opportunities to
pursue in the coming financial year.
For example, by the end of FY15, and subsequent, the
Company has entered into trial services agreements with the
Precision property group, the Hawaiian property group, Top
Ryde Shopping Centre (currently owned by the Blackstone
Group), Barangaroo’s South precinct and the Merivale
Hospitality Group. These groups alone provide a pipeline of
up to 78 large retail venues.
International
The Company operates internationally, with small teams now
based in Brazil and South Africa, and reseller and distribution
partnerships providing access to South East Asia, including
Indonesia and Thailand. In addition, the Company is pursuing
discussions with potential partners in the UK, Spain, USA and
the Middle East.
In April 2015, following a competitive tender process and
successful pilot at its flagship Market Place retail mall in São
Paulo, the Company was selected as the preferred wireless
data analytics partner and entered into a master services
agreement with Iguatemi Empresa de Shopping Centers S.A
(Iguatemi), one of Brazil’s leading shopping centre groups.
The master services agreement with Iguatemi is a 5 year
contract governing the potential roll-out to up to 17 retail
mall venues. The Company has now deployed its services
into 3 of Iguatemi’s shopping centres.
In line with the Company’s scalable international growth
strategy, the Company progressed its discussions with a
number of strategic parties, including telecommunications
providers and ISPs, wireless service providers, systems
integrators, hardware vendor resellers, media agencies and
advertising vendors, in order to establish strategic reseller
and distribution partnerships which the Company expects
will provide greater access to markets in South East Asia,
Europe and North America.
FY15 Year End Retail Mall Pipeline for Analytics Services
Retail Malls Billing under Contract
17
Total Retail Malls under Contract
(assuming full roll-out) 1
62
Total Qualified Retail Mall Pipeline
Potential Break-Even Point 2
(from recurring Analytics Services)
450
400
500
0
100
200
300
400
500
600
Number of Retail Mall Venues
Notes:
1. Assumes all retail malls currently under master services contracts are rolled out.
2. Subject to current expectations of aggregate market pricing, average venue size and gross operating margins.
6
SkyFii Limited 2015 Annual Report
R E V I E W O F O P E R A T I O N S
Product development highlights
The last year has been an exciting and rewarding time for
SkyFii’s product and development team releasing over
one hundred (100) new platform enhancements during
the financial year. With continual updates to its analytics,
guest WiFi and campaign components and a range of
improvements to the platform’s user experience, the SkyFii
product suite has progressed to become one of the most
complete and advanced solutions currently available on
the market. Alongside the continual work on the core
analytics platform, SkyFii’s product development team has
also worked towards supporting even more WiFi hardware
vendors, including the release of SkyOS, a proprietary
firmware for consumer grade WiFi routers.
Overview of financial performance
The Company achieved revenues of $0.7 million in FY15,
representing 13% growth on the previous corresponding
period (FY14: $0.6 million). The growth in revenues from
FY14 to FY15 reflected a considerable change in composition:
•
•
from non-recurring fees earned in FY14 from the
deployment of advertising sponsored and other proof
of concepts and trials in small venue networks including
quick service restaurants, cafés and pubs;
to network implementation, recurring data analytics
service fees and associated advertising revenues
associated with the Company’s retail mall network in
FY15.
Underlying this result was a 175% growth in revenues from
the retail mall segment.
As at 30 June 2015, the Company held cash and equivalents
of $2.7 million. In addition, the Company expects to receive
an R&D tax incentive rebate of $0.8 million in FY16 relating
to research and development expenditures undertaken in
FY15.
Successful listing and capital raisings in FY15
In July 2014, SkyFii Group Pty Ltd entered into an
Acquisition Agreement with RKS Consolidated Limited (now
SkyFii Limited), a shell company listed on the Australian
Securities Exchange. Concurrent with the reverse acquisition,
the Company closed an oversubscribed capital raising of
$3.5 million (before costs) through a public offering at $0.20
per share.
In May 2015, the Company conducted a private placement to
raise an additional $2.8 million (before costs) from existing
new sophisticated shareholders in order to:
• enable the Company to fund the delivery of existing and
future contract wins in Australia and internationally;
• allow the Company to expand its sales, development and
operations teams to support identified and new growth
opportunities; and
• provide additional working capital and balance sheet
strength.
The placement was conducted at a price of $0.22 per share,
representing a 10% premium to the Company’s listing price,
and an 18.9% premium to the then trading price of SkyFii’s
shares, representing the significant support and confidence
in the Company’s strategy and execution.
Source of SkyFii’s revenues
Outlook for FY16
SkyFii expects to continue to show strong growth across all
operational metrics as it continues to build out its footprint
globally.
SkyFii is committed to continuing to lead the market in
the delivery of wireless data analytics and content delivery
services to the retail sector globally.
As a category agnostic data platform the opportunity is
far greater than just retail and as such, the Company also
intends to work towards penetrating additional verticals
such as Healthcare, Education, Transit, Municipal and
Hospitality.
Key areas of focus in FY16 and beyond will include:
• Continued roll-out of new and existing contracts
• Continued focus on converting mall pipeline prospects
into trials and full service contracts
• Continued focus on new verticals outside of retail malls
• Securing further distribution and reseller agreements
globally
• Continued product development focus on marketing
automation and associated media/advertising
partnerships
• Development of new data source integrations and data
services products
Retail Malls
Other Sources
)
s
0
0
0
$
(
800
600
400
200
0
FY14
FY15
In line with the Company’s continued investment to support
the future growth and roll-out of its services internationally,
the Company reported an operating net loss after tax of $2.0
million (FY14: $1.6 million loss) and operating loss before
interest, tax, depreciation and amortisation of $2.8 million
(FY13 Operating EBITDA: $2.1 million loss).
Reported net loss after tax of $4.8 million in FY15 (FY14
NPAT: $1.6 million loss) included a tax benefit of $0.8
million and one-off expenses totalling $2.8 million, including
corporate advisory services, acquisition costs and the
impairment of intangible assets including goodwill arising
from the reverse acquisition of RKS Consolidated Limited
(now SkyFii Limited).
Net operating cash outflows in FY15 were $2.0 million (FY14:
$1.8 million outflow), including the receipt of an R&D tax
incentive rebate of $0.5 million (FY14: nil).
During the year, the Company also spent and capitalised
$1.4 million on development activities relating to its Big Data
analytics platform.
7
www.skyfii.com | /SkyFii | /company/skyfii R E V I E W O F O P E R A T I O N S
Case study: Platypus Shoes
SkyFii helps to drives customers into the Market City
Platypus Shoes Store resulting in an increases of sales
in 60% over the budget during the campaign period!
Campaign
20% OFF Voucher to Spend in Store on Shoes
Media Package Solus EDM + Free Public WiFi Sponsorship
Location
Timing
Platypus Shoes – Market City
27 April 2015 – 3 May 2015
Background
SkyFii awarded Platypus Shoes with a free hyper-local
marketing campaign valued at $10,500 at the Market
City Retailer Awards Night 2014.
Execution
Platypus Shoes sponsored Market City’s public WiFi
network for a week, offering a 20% off voucher
through SkyFii’s dedicated media channels.
A highly localised promotion drove customers to
Platypus Shoes in Market City to redeem the offer,
increasing sales and generating traffic.
Media Package
Visitors in the Centre:
Guest WiFi Campaign
Welcome Page
Landing Page
Users register with the free WiFi
network via email or social media
Once signed in, users are
redirected to the Platypus offer
8
SkyFii Limited 2015 Annual Report
R E V I E W O F O P E R A T I O N S
Visitors out of the Centre:
Email Marketing
Users previously registered with SkyFii who met Platypus
Shoes’ target audience received a 20% voucher offer via
email to be redeemed in the store.
Activity
Guest WiFi campaign summary
Email Marketing campaign summary
new people registered in the network
during the campaign period
unique people saw the offer on the
Free public Guest WiFi
impressions were recorded
1,158
3,858
11,577
Sales results
under budget the week prior to the
SkyFii campaign
1%
60%
39% over budget the month of the
over budget the week of the
SkyFii campaign
SkyFii campaign
19,662
3,155
278
53%
of people who
clicked the offer
were seen in &
around the store
emails delivered
unique opens (16.0%)
unique clicks (8.8%)
132
redemptions of
the offer were
tracked in store
9
www.skyfii.com | /SkyFii | /company/skyfii Directors’ Report
Your Directors submit the financial report of SkyFii Limited (formerly known as RKS Consolidated Limited) (SkyFii or the
Company) for the Company and its controlled entities (the Group) for the year ended 30 June 2015. For the purposes of the
financial statements, the Group is reflected as the continuation of SkyFii Group Pty Ltd, which was considered the accounting
acquirer in the acquisition of RKS Consolidated Limited.
Current Directors
The names and particulars of the Directors of the Company who held office at the date of this report are:
Name, independence
status & qualifications
Experience, interests in shares, special responsibilities
and other directorships
Gary Flowers
Independent
Non-Executive
Chairman
BComm., LLB, FAICD
• Mr Flowers is Chairman of Mainbrace Constructions Pty Limited and a Director of Sparke Helmore
Lawyers. Since 2007, he has been an Independent Non-Executive Director, Chairman of the Audit
Committee and a Member of the Remuneration Committee of DataDot Technology Limited. He
is also Chairman of DataDot subsidiary companies, DataTraceDNA Pty Limited and DataDot
Technology (Australia) Pty Limited. A former senior executive with the Mirvac Group, Mr Flowers
was COO from 2008 to 2013 and also held the positions of Chairman of the Mirvac Hotels Group
and Mirvac Funds Management Ltd. Other former roles include Managing Director and CEO
of Australian Rugby Union, CEO of SANZAR and a Council Member of the International Rugby
Board, and national Managing Partner of Sparke Helmore Lawyers.
• Appointed as a Director of the Company on 27 November 2014.
• No Committee Memberships.
• Holds a relevant interest in 544,000 shares.
• Director of Datadot Technology Limited.
Wayne Arthur
Chief Executive
Officer/Executive
Director
BComm.
• Mr Arthur, a co-founder of SkyFii, built a long standing career in the outdoor media sector in
senior managerial roles for companies such as Titan Media Group and EYE Corp. His experience in
these roles has spanned three international markets. He has been responsible for the delivery of
key contracts and partnerships to the SkyFii business to date, including the set-up of SkyFii’s key
international partnerships in Indonesia, South Africa and Brazil.
• Appointed as a Director of the Company on 20 November 2014, and a director of SkyFii Group
Pty Ltd (appointed 5 August 2013).
• No Committee Memberships.
• Holds a relevant interest in 8,819,836 shares.
• No other listed company directorships.
Anthony Dunlop
Independent
Non-Executive Director
•
BEc., GAICD
Mr Dunlop has over 20 years of banking, corporate advisory and investment in Australia, the USA,
Hong Kong and mainland China. Beginning his career with ABN AMRO he has extensive executive
and board experience in with private and ASX listed companies across a diverse range of industry
sectors including investment and finance, mobile technology, resources and technical services. He
continues to advise private and public companies on debt and equity capital funding, technology
commercialisation and product development.
• Appointed as a Director of the Company on 11 February 2014.
• Member of the Nomination and Remuneration Committee.
• Holds a relevant interest in 250,000 shares.
•
Director of ASX listed technology investment company Chapmans Limited (ASX:CHP).
Andrew Johnson
Independent
Non-Executive Director
BComm., M Sc.
• Mr Johnson, a highly experienced and successful telecommunications industry executive, is
currently Chairman of bmobile-Vodafone, a mobile service provider for Papua New Guinea
and the Solomon Islands and a Director of Dataco, the PNG national transmission company.
He is also Managing Partner of Delta Systems International, a designer and builder/operator
of telecommunications and defence systems. His prior roles include Divisional Manager for
Computer Science Corporation’s Australian and NZ Communications and Defence Division,
CEO of Tenix (formerly Transfield) Defence Systems, which grew to become Australia’s largest
Defence company during his tenure, and Managing Director of Telstra’s Data and Online Division.
• Appointed as a Director of the Company on 27 November 2014.
• Chairman of the Audit and Risk Committee.
• Holds a relevant interest in 250,000 shares.
• No other listed company directorships.
10
SkyFii Limited 2015 Annual Report D I R E C T O R S ’ R E P O R T
Name, independence
status & qualifications
Experience, interests in shares, special responsibilities
and other directorships
James Scott
Independent
Non-Executive Director
BEng. (Hons)
• Mr Scott has 20 years’ experience in digital technology, network and IT business, including
network computing, server virtualisation, digital enablement and mobility solutions. He is Chief
Operating Officer at Seven Group Holdings and has responsibility for the strategies and execution
of technology, processes and systems across its operating companies including WesTrac. Prior to
Seven Group Holdings, Mr Scott was a Partner in KPMG’s Business Performance and Technology
division and has also held the position of Partner & Managing Director APAC in Accenture where
he worked for 14 years
• Appointed as a Director of the Company on 20 November 2014.
• Member of the Audit and Risk Committee.
• Holds a relevant interest in 613,150 shares.
• No other listed company directorships.
Chris Taylor
Independent
Non-Executive Director
• Mr Taylor has a longstanding career spanning both digital and traditional media within
Australasia, and is currently the Vice President of International Television for NBC Universal. He
served as Director of Media for Telstra Corporation, where he headed up its online and mobile
digital publishing business and spearheaded the launch of Telstra’s IPTV services, the first of their
kind in Australia. Prior to this, Mr Taylor held numerous executive roles in the Television industry,
and immediately prior to his role with NBC Universal, he served as the Chief Executive Officer of
Quickflix Limited.
• Appointed as a Director of the Company on 27 November 2014, previously a director of SkyFii
Group Pty Ltd (appointed 5 August 2013; resigned 5 June 2015).
• Chairman of the Nomination and Remuneration Committee.
• Holds a relevant interest in nil shares.
• No other listed company directorships.
Heath Roberts
Company Secretary
DipLaw (SAB), Grad.
Dip Legal Practice
• Mr Roberts is a commercial solicitor with 18 years’ ASX listed company experience. He has
particular strength in corporate operations and compliance, asset due diligence and acquisitions
and equity/debt funding, focussed on the IT, resources and healthcare sectors. As Company
Secretary and subsequently Executive Director of WPG Resources Ltd (2005 – 2013), Mr Roberts
played a pivotal role in the acquisition of WPG’s iron ore assets in South Australia, project
permitting/funding then sale to Arrium Ltd for $320 million in 2011. He has acted as a Company
Secretary and director for numerous ASX listed and private companies and was previously
Secretary of the Sydney Kings Basketball team.
• Appointed as Company Secretary on 20 November 2014.
• Holds a relevant interest in nil shares.
• No other listed company directorships.
Former Directors - SkyFii Limited
The names of Directors who held office from 1 July 2014 and resigned prior to the date of this report are:
• Peter Dykes (resigned 20 November 2014)
• Robert Spano (resigned 20 November 2014)
• Suyin Chi (resigned 20 November 2014)
Company Secretary
Mr Heath Roberts held the position of Company Secretary at the end of the financial year (appointed 20 November 2014). Peter
Dykes held the position of Company Secretary from 1 July 2014 to 27 November 2014.
11
www.skyfii.com | /SkyFii | /company/skyfii D I R E C T O R S ’ R E P O R T
Meetings of Directors
During the financial year 13 meetings of Directors were held. Other matters arising during the year were resolved by circulating
resolutions.
The following persons were Directors of the Company during the financial year, with attendances to meetings of Directors as
follows:
Directors’ meetings
Audit and Risk Committee
meetings
Nomination and Remuneration
Committee meetings
Eligible
Attended
Eligible
Attended
Eligible
Attended
SkyFii Limited (from 20 November 2014 to 30 June 2015)
8
Gary Flowers
8
Wayne Arthur
8
Anthony Dunlop
8
Andrew Johnson
8
James Scott
8
Chris Taylor
8
8
7
7
5
7
-
-
-
1
1
-
RKS Consolidated Limited (from 1 July 2014 to 19 November 2014)
Anthony Dunlop
Peter Dykes
Robert Spano
Suyin Chi
5
5
5
5
5
5
5
5
-
-
-
-
-
-
-
1
1
-
-
-
-
-
-
-
2
-
-
2
-
-
-
-
-
-
2
-
-
2
-
-
-
-
Principal activities
The principal activity of the Group during the financial year
was the provision of data analytics services. The Group
ceased seeking out business opportunities in the exploration
and development of coal tenements and other investments
which were previously the principal activities of RKS
Consolidated Limited.
Review of operations
The consolidated entity’s loss attributable to equity holders
of the Company, after providing for income tax, amounted to
$4,789,482 (2014 loss: $1,624,776). Refer to the commentary
in the Review of Operations.
Dividends paid or recommended
In respect of the financial year ended 30 June 2015, there
have been no dividends paid or provided for (2014: nil).
Significant changes in state of affairs
The following significant changes in the state of affairs of the
parent entity occurred during the financial year:
• Prior to the commencement of the financial year, the
Company, having undertaken a process of reviewing new
business acquisition opportunities, announced on 19 June
2014 a binding letter of intent to acquire SkyFii Group
Pty Ltd.
• On 31 July 2014, the Company announced that it had
signed an agreement (the Acquisition Agreement) to
acquire SkyFii Group Pty Ltd on the following terms:
•
•
•
•
•
the Company would implement a 10 to 1
consolidation of existing capital;
the Company would issue $14,000,000 in ordinary
shares at $0.20 (Initial Consideration);
the Company would issue ordinary shares up to a
maximum value of $16,500,000 by way of earn out
(Earn Out Consideration). The total amount of the
Earn Out Consideration will be based on the revenue of
the Company during the 2016 Calendar year;
the Company would undertake a capital raising
of at least $2,500,000 by way of a public offer at
an issue price of $0.20 per ordinary share under a
prospectus;
the Company would issue ordinary shares to its
advisors valued at $500,000 in consideration for
advisory services;
•
•
the Company would be required to re-comply with
the ASX admission requirements; and
the name of the Company would be changed to
SkyFii Limited.
• On 9 July 2014, 15,000,000 ordinary shares in the
Company were issued at $0.02 each to raise working
capital.
• On 19 September 2014, the Company’s shareholders
approved the acquisition of SkyFii Group Pty Ltd, the
consolidation of capital and the change of name to SkyFii
Limited.
• On 1 October 2014, the Company completed the
consolidation of its share capital on a 10 to 1 basis.
• On 17 November 2014, the Company changed its name to
SkyFii Limited and issued 17,500,000 ordinary shares on
14 November 2014 and issued 72,500,000 shares on 17
November 2014, in each case pursuant to the Acquisition
Agreement.
•
In late November 2014, the Board of Directors of the
Company was changed significantly to reflect the new
direction of the Company.
• On 20 November 2014, the Company acquired 100% of
the issued capital of SkyFii Group Pty Ltd.
• On 21 November 2014, the Company’s securities
were reinstated to official quotation of the Australian
Securities Exchange (ASX). Subsequently, the Company
has carried out the activities set out in the replacement
prospectus dated and released to ASX on 15 October
2014.
• On 19 May 2015, the Company issued an additional
12,727,276 ordinary shares at $0.22 each.
Other than those disclosed above, there are no other matters
or circumstances that have arisen since 30 June 2015 that
have significantly affected, or may significantly affect:
•
•
•
the Group’s operations in the future financial years,
the results of those operations in future financial years,
or
the Group’s state of affairs in the future financial years.
12
SkyFii Limited 2015 Annual Report
Subsequent events
Non-audit services
D I R E C T O R S ’ R E P O R T
Amounts paid or payable to the auditor for non-audit
services provided during the year by the auditor amounted
to $36,000.
The Directors are satisfied that the provision of non-audit
services in the form of tax compliance services, during
the year, by the auditor (or another person or firm on the
auditors’ behalf) is compatible with the general standard of
independence for auditors imposed by the Corporations Act.
The Directors are of the opinion that the services as
disclosed in Note 20 to the financial statements do not
compromise the external auditor’s independence, based on
advice received from the Audit and Risk Committee, for the
following reasons:
• all non-audit services have been reviewed and approved
to ensure that they do not impact the integrity and
objectivity of the auditor; and
• none of the services undermine the general principles
relating to auditor independence as set out in Code
of Conduct APES 110 Code of Ethics for Professional
Accountants issued by the Accounting Professional &
Ethical Standards Board, including reviewing or auditing
the auditors own work, acting in a management or
decision making capacity for the Company, acting as
advocate for the Company or jointly sharing economic
risks and rewards.
Officers of the Company who are former audit partners of
Hall Chadwick
There are no officers of the Company who are former audit
partners of Hall Chadwick.
Auditor’s Independence Declaration
The auditor’s independence declaration is included on page
18 of this report and forms part of the Directors’ Report for
the year ended 30 June 2015.
Proceedings on behalf of Company
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.
On 10 July 2015, the Company held a general meeting at
which shareholders ratified and approved the allotment
and issue of 12,727,276 ordinary shares at $0.22 per share
to existing and new sophisticated investors which occurred
on 19 May 2015 for the purposes of Listing Rule 7.4 and the
issue of 200,000 ordinary shares at $0.22 per share to a
non-executive director, Gary Flowers.
On 29 July 2015, the Company incorporated a wholly-owned
subsidiary in the Republic of South Africa, SkyFii South
Africa (Pty) Ltd, for the purposes of conducting operations
in that country.
On 31 July 2015, the Group entered into various commercial
agreements for the leasing of new commercial office
premises expected to commence in October 2015. In
addition to an agreement to lease commercial office
property with a minimum lease period of 2 years, the Group
entered into an occupational license agreement with another
party in order to sub-let a quarter of the premises on back to
back terms.
Other than the above matters, there are no other matters or
circumstances that have arisen since 30 June 2015 that have
significantly affected, or may significantly affect:
•
•
•
the Group’s operations in the future financial years, or
the results of those operations in future financial years, or
the Group’s state of affairs in the future financial affairs.
Future developments
Disclosure of information regarding likely developments in
the operations of the consolidated entity in future financial
years and the expected results of those operations is
likely to result in unreasonable prejudice to the Company.
Accordingly, this information has not been disclosed in this
report.
Environmental regulations
The Group’s operations are not involved in any activities
that have a marked influence on the environment. As such,
the Directors are not aware of any material issues affecting
the Group or its compliance with the relevant environment
agencies or regulatory authorities.
Indemnification of officers and auditors
During the financial year, the Company paid premiums
based on normal commercial terms and conditions to insure
all Directors, officers and employees of the Group against
claims brought against the individual while performing
services for the Group. The premium paid has not been
disclosed as it is subject to the confidentiality provisions of
the insurance policy. Except as noted below, the Company
has not otherwise, during or since the financial year, except
to the extent permitted by law, indemnified or agreed to
indemnify an officer or auditor of the Company or of any
related body corporate against a liability incurred as such an
officer or auditor.
During the financial year the Company entered into a Deed
of Indemnity, Insurance and Access with each of its current
Directors. The purpose of the Deed is to:
• confirm the indemnity provided by the Company in
favour of Directors under the Company’s Constitution;
•
include an obligation upon the Company to maintain
adequate Directors and Officers liability insurance; and
• confirm the right of access to certain documents under
the Corporations Act.
13
www.skyfii.com | /SkyFii | /company/skyfii Remuneration Report
The Remuneration Report, which has been audited, details
the nature and amount of remuneration for each Director
and the Executives.
Key management personnel (KMP) include:
•
the following persons who were directors of SkyFii
Limited during the financial year, including directors of
SkyFii Group Pty Ltd prior to the reverse acquisition of
SkyFii Limited (previously known as RKS Consolidated
Limited):
• Gary Flowers – Chairman
• Wayne Arthur – Chief Executive Officer
• Anthony Dunlop – Non-Executive Director
Non-Executive Director remuneration
Fees and payments to Non-Executive Directors reflect the
demands which are made of the Directors in fulfilling their
responsibilities. Non-Executive Director fees are reviewed
annually by the Board. The constitution of the Company
provides that the Non-Executive Directors of the Company
are entitled to such remuneration, as determined by the
Board, which must not exceed in aggregate the maximum
amount determined by the Company in a general meeting.
The most recent determination was at a general meeting
held on 3 December 2012 where the shareholders approved
a maximum aggregate remuneration of $500,000. Annual
Non-Executive Directors’ fees currently agreed to be paid by
the Company are $290,450 inclusive of superannuation.
• Andrew Johnson – Non-Executive Director
Executive and Executive Director remuneration
Fixed remuneration consists of base remuneration (which
is calculated on a total cost basis and includes any fringe
benefits tax charges related to employee benefits), as well as
employer contributions to superannuation funds.
Executive and Executive Director remuneration levels are
reviewed annually by the Nomination and Remuneration
Committee through a process that considers the overall
performance of the Group. Executive Directors are not paid
any director fees in addition to their fixed remuneration as
Executives.
Performance based remuneration
Performance based remuneration, which may take the
form of cash or equity bonuses, is at the discretion of the
Remuneration and Nomination Committee.
• James Scott – Non-Executive Director
• Chris Taylor – Non-Executive Director
• Ben White – Non-Executive Director (resigned 12
September 2014)
•
the following persons also had the authority and
responsibility for planning, directing and controlling the
major activities of the Group, directly or indirectly, during
the financial year:
• Jason Martin – Chief Technology Officer
(commenced 7 October 2014)
• Brone Roze – Chief Financial Officer (commenced 16
March 2015)
• Michael Walker – Chief Operating Officer
•
Ian Robinson – Sales Director
• George Yeoh – former Chief Financial Officer (ceased
10 February 2014)
Remuneration policy
The performance of the Group depends upon the quality of
its directors and executives. The Group recognises the need
to attract, motivate and retain highly skilled directors and
executives.
The Board of Directors, through its Nomination and
Remuneration Committee, accepts responsibility for
determining and reviewing remuneration arrangements
for the Directors and Executives. The Nomination and
Remuneration Committee assesses the appropriateness of
the nature and amount of remuneration of Directors and
Executives on a periodic basis by reference to relevant
employment market conditions, giving due consideration to
the overall profitability and financial resources of the Group,
with the objective of ensuring maximum stakeholder benefit
from the retention of a high quality Board and executive
team.
14
SkyFii Limited 2015 Annual Report Remuneration of Directors and Executives
Remuneration shown below relates to the period in which the Director or Executive was a member of key management
personnel. Amounts below have either been paid out or accrued in the period.
R E M U N E R A T I O N R E P O R T
Short-term benefits
Post employment
benefits
Share based
payments
Directors’ fees
$
Salary & fees
$
Other
$
Superannuation
$
Shares
$
Total
$
FY15
Directors
G. Flowers
W. Arthur
A. Dunlop
A. Johnson
C. Taylor
J. Scott
B. White
35,000
-
-
-
70,309
-
-
-
170,684
-
-
-
-
-
Director total
105,309
170,684
Other KMP
J. Martin
I. Robinson
B. Roze
M. Walker
G. Yeoh
Other KMP total
FY15 total
FY14
Directors
W. Arthur
C. Taylor
B. White
Director total
Other KMP
I. Robinson
M. Walker
G. Yeoh
Other KMP total
FY14 total
-
-
-
-
-
-
105,309
-
-
-
-
-
-
-
-
-
133,249
155,342
45,974
170,684
37,418
542,667
713,351
124,658
-
-
124,658
124,658
124,658
23,100
272,416
397,074
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,325
16,215
-
-
6,679
-
-
12,167
-
30,417
30,417
-
30,417
-
50,492
186,899
30,417
30,417
76,988
30,417
-
26,219
103,418
405,630
12,658
14,757
4,367
16,215
-
47,997
74,216
11,531
-
-
11,531
11,531
11,531
-
23,062
34,593
-
-
-
-
-
-
103,418
-
-
-
-
-
-
-
-
-
145,907
170,099
50,341
186,899
37,418
590,664
996,294
136,189
-
-
136,189
136,189
136,189
23,100
295,478
431,667
The remuneration of key management personnel in the years ended 30 June 2014 and 2015 were 100% fixed, and there is no link
between remuneration and the market price of the Company’s shares.
15
www.skyfii.com | /SkyFii | /company/skyfii R E M U N E R A T I O N R E P O R T
Ordinary shares
Details of ordinary shares in the Company held directly, indirectly or beneficially, by key management personnel (KMP),
including their related parties, is as follows:
Balance at
start of year
Issued to SGPL
Vendors1
Received as part
of remuneration2
Purchase of
shares
Sale of shares
Balance at end
of year
FY15
Directors
G. Flowers
W. Arthur
A. Dunlop
A. Johnson
C. Taylor
J. Scott
B. White
Director total
Other KMP
J. Martin
I. Robinson
B. Roze
M. Walker
G. Yeoh
Other KMP total
FY15 total
Notes:
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,699,836
-
-
-
363,150
11,623,743
100,000
-
250,000
250,000
-
250,000
-
444,000
120,000
-
-
-
-
1,746,364
-
-
-
-
-
-
-
544,000
8,819,836
250,000
250,000
-
613,150
13,370,107
20,686,729
850,000
2,310,364
-
23,847,093
-
7,956,690
877,232
2,941,546
-
11,775,468
32,462,197
-
-
-
-
-
-
-
-
-
125,000
-
125,000
850,000
2,435,364
-
-
-
-
-
-
-
-
7,956,690
877,232
2,941,546
125,000
11,900,468
35,747,561
1. On 20 November 2014, the Company (formerly RKS Consolidated Limited) acquired 100% of the issued capital of SkyFii
Group Pty Ltd (SGPL) by issuing 70,000,000 ordinary shares in the Company to existing shareholders of SGPL (SGPL
Vendors).
2. On 10 December 2014, the Company issued 850,000 to Directors in lieu of cash payment of their annual Director fees.
Those shares were subject to voluntary trading restrictions as between the Company and each relevant Director. One
quarter of the total number of those shares issued to Directors as part of their remuneration became or will become free
trading on the following dates: 11 March 2015, 11 June 2015, 11 September 2015 and 11 December 2015. As at 30 June 2015,
425,000 of those shares remain under trading restrictions.
Earn-out Shares
On 20 November 2014, the Company (formerly RKS Consolidated Limited) acquired 100% of the issued capital of SkyFii
Group Pty Ltd (SGPL). As part of the Acquisition Agreement, the Company agreed to issue to those shareholders who were
shareholders of SGPL as at the acquisition date (SGPL Vendors) additional ordinary shares subject to the gross revenue
performance of the Company in the 2016 calendar year (Earn-out Shares).
Details of the maximum number of Earn-out Shares in the Company which may be issued directly, indirectly or beneficially, to
key management personnel (KMP), including their related parties, is as follows:
• W. Arthur – 10,253,379 ordinary shares
• J. Scott – 427,999 ordinary shares
• B. White – 13,699,411 ordinary shares
• M. Walker – 3,466,821 ordinary shares
•
I. Robinson – 9,377,528 ordinary shares
• B. Roze – 1,033,881 ordinary shares
Further information in relation to the Earn-out Shares can be found in Note 18 to the financial statements.
Other transactions with KMP and/or their related parties
During the full year ended 30 June 2015, the Company incurred $499,101 of expenses relating to outsourced software
development services provided by Simple Machines Pty Ltd, a company associated with Jason Martin (CTO). These services
were provided under normal commercial terms and conditions.
On 17 November 2014, the Company issued 1,250,000 ordinary shares at an issue price of $0.20 per share to Chapmans
Corporate Advisory Pty Ltd, a company associated with Anthony Dunlop (Non-Executive Director), as part of consideration for
the provision of corporate services in relation to the capital raising under the replacement Prospectus dated 15 October 2014
and associated promotional activities.
Further information in relation to related parties can be found in Note 24 to the financial statements.
16
SkyFii Limited 2015 Annual Report R E M U N E R A T I O N R E P O R T
Executive service agreements
The employment terms and conditions of KMP and Group executives are formalised in service agreements.
Position
Key terms of service agreements
Chief Executive Officer
• Base salary: $200,000 excluding superannuation.
• Term: unspecified.
• Base remuneration: Reviewed annually by the Nomination and Remuneration
Committee.
• Bonus entitlements: Determined annually by the Nomination and Remuneration.
Committee.
• Termination notice period: 12 weeks’ notice (or 13 weeks’ notice after two years’ service
and is over the age of 45 at the time the notice is given), or without notice in the event
of serious misconduct.
• Restraint of trade period: up to 6 months.
Other Executives
Other Executives are employed under individual executive services agreements. These
establish amongst other things:
•
total compensation;
• bonus entitlements;
• variable notice and termination provisions of up to 12 weeks, or by the Group without
notice in the event of serious misconduct; and
•
restraint and confidentiality provisions.
This concludes the Remuneration Report, which has been audited.
The Directors’ Report is signed in accordance with a resolution of the Directors made pursuant to s298(2) of the Corporations
Act 2001.
On behalf of the Directors
Gary Flowers
Chairman
21 August 2015
17
www.skyfii.com | /SkyFii | /company/skyfii Auditor’s Independence Declaration
SKYFII LIMITED
ACN 009 264 699
AND CONTROLLED ENTITIES
AUDITOR’S INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF SKYFII LIMITED
AND CONTROLLED ENTITIES
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2015
there have been no contraventions of:
i.
ii.
the auditor independence requirements as set out in the Corporations Act 2001 in
relation to the audit; and
any applicable code of professional conduct in relation to the audit.
HALL CHADWICK
Level 40, 2 Park Street
SYDNEY NSW 2000
GRAHAM WEBB
Partner
Dated: 21 August 2015
18
SkyFii Limited 2015 Annual Report
Corporate Governance Statement
The Company’s Board of Directors is responsible for the
Corporate Governance of the Company and its controlled
entities. The Board guides and monitors the business
and affairs of the group on behalf of the shareholders by
whom they are elected and to whom they are accountable.
The governance practices adopted by the Company
are structured with reference to the 3rd Edition of the
ASX Corporate Governance Council’s Principles and
Recommendations (ASX CGPR).
The Board is committed to improving its corporate
governance practices and embracing the principles
published by the ASX Corporate Governance Council,
however the Board is of a view that the adoption of the
practices and principles should be considered in line with
the size, stage and nature of the business and the industry in
which it operates.
The Board aims to achieve all of the Principles and
Recommendations in stages as the Company grows and
its circumstances change over time. As reported in the
Company’s 2014 Annual Report, the Company had been
concentrating its efforts in the previous year on restoring
the financial position of the Company and had not had
sufficient resources to improve its corporate governance
practices significantly. However, as a result of the acquisition
of SkyFii Group Pty Ltd in late 2014 and the concomitant
recapitalisation and re-quotation of the Company on ASX,
significant progress in the improvement of the Company’s
Corporate Governance practices has been achieved.
The information provided below summarises how the
Company presently complies with the ASX CGPR, and how
it intends to comply with each of the current Principles and
Recommendations going forward. This statement is current
as at 30 June 2015 and has been approved by the Board of
Directors of the Company.
Principle 1 – Lay solid foundations for
management and oversight
The Company has adopted a Board Charter clearly setting
out the respective roles and responsibilities of the Board
and management. The Board Charter is available on the
Company’s website, www.skyfii.com.
The key responsibilities of the Board include:
(a) setting the long-term strategy and annual business plan
including objectives and milestones to be achieved;
(b) monitoring the performance of the Company against
the financial objectives and operational goals set by
the Board and reviewing the implementation of Board
approved strategies;
(c) assessing the appropriateness of the skill sets and the
levels of experience of the members of the Board,
individually and as a whole and selecting new members
to join the Board when a vacancy exists;
(d) appointing, removing and determining the terms of
engagement of the Directors, Chief Executive Officer
and Company Secretary;
(e) overseeing the delegation of authority for the day to day
management of the Company;
(f) ensuring that the risk management systems, financial
reporting and information systems, personnel, policies
and procedures are all operating efficiently and
effectively by establishing a framework of internal
controls and compliance;
(g) approving the capital structure and major funding
requirements of the Company;
(h) approving the Company’s half year and full year reports
to the shareholders, ASX and ASIC; and
(i) ensuring that recruitment, retention, termination,
remuneration, performance review and succession
planning policies and procedures are in place and
complied with.
The Company has established a Nomination and
Remuneration Committee to identify and make
recommendations to the Board for the appointment of new
Board candidates, having regard to their skills, experience
and expertise. The Nomination and Remuneration Committee
Charter is available on the Company’s website,
www.skyfii.com.
The Board requires this Committee to undertake appropriate
checks on potential Board candidates.
The Nomination and Remuneration Committee met twice
during the financial year and engaged the services of an
external, independent consultant to assist it and provide
advice on a range of remuneration related issues.
All Directors and senior executives have entered into written
appointment agreements with the Company. Specifically
the Non-Executive Directors have each executed a letter of
appointment setting out the terms and conditions of their
appointment.
The Company Secretary is accountable directly to the Board,
through the Chairperson, on all matters to do with the
proper functioning of the Board. The Board Charter sets out
the Company Secretary’s responsibilities, which include:
(a) coordinating the timely completion and dispatch of
Board and committee papers;
(b) ensuring the business at Board and committee meetings
is accurately captured in the minutes;
(c) monitoring and ensuring the Board and committee
policy and procedures are followed; and
(d) advising the Board and its committees on governance
matters.
The Board has established a Diversity Policy, which
recognises diversity to encompass ethnicity, gender, sexual
orientation, age, physical abilities, family status, religious
beliefs or other ideologies, and is committed to creating and
maintaining an inclusive and collaborative workforce. The
Company understands that encouraging diversity is not just
a socially responsible necessity, but that it is essential to the
Company’s continued growth and vital to a successful future.
Given the size and nature of the Company, the Board
determined not to establish measurable objectives for
achieving diversity for the 2015 financial year. Establishing
measureable objectives for achieving diversity will be
reconsidered on an annual basis.
As at 30 June 2015, the proportion of women employed by
the Group was as follows:
• Board of Directors: 0%
• Senior Executive positions: 0%
• Total Company workforce: 12%
The Diversity Policy is available on the Company’s website,
www.skyfii.com.
Under the Board Charter, each Director’s performance is
assessed when standing for re-election. Before each Annual
General Meeting, the Chairperson of the Board assesses the
performance of any Director standing for re-election and the
Board will determine their recommendation to shareholders
19
www.skyfii.com | /SkyFii | /company/skyfii Principle 3 – Act ethically and responsibly
The Board has adopted a Code of Conduct which sets out
the values, commitments, ethical standards and policies
of the Company and outlines the standards of conduct
expected of the Company’s business and people, taking into
account the Company’s legal and other obligations to its
stakeholders.
The Code of Conduct applies to all Directors, as well as all
officers, employees, contractors, consultants, other persons
that act on behalf of the Company.
The Code of Conduct is available on the Company’s website,
www.skyfii.com.
Principle 4 – Safeguard integrity in
corporate reporting
The Board has established an Audit and Risk Committee.
This Committee is responsible for, amongst other things,
appointing the Company’s external auditors and overseeing
the integrity of the Company’s financial reporting systems
and financial statements.
The Company has adopted an Audit and Risk Committee
Charter which is available on the Company’s website,
www.skyfii.com.
The Company will disclose the number of times the Audit
and Risk Committee met, and the attendance at those
meetings, at the end of each relevant reporting period.
The Committee is comprised of two independent Directors,
one of whom acts as chairperson. The Audit and Risk
Committee does not meet the recommended minimum
of three members. The Board is of the view that given the
Company’s size and stage of operations, two independent
Directors as members of the Audit and Risk Committee
is sufficient to perform the relevant responsibilities of the
Committee.
The Board has implemented a process to receive written
assurances from its Chief Executive Officer and Chief
Financial Officer that the declarations that will be provided
under section 295A of the Corporations Act 2001 (Cth)
are founded on a system of risk management and internal
control and that the system is operating in all material
respects in relation to financial reporting risks. The Board
seeks these assurances prior to approving the annual
financial statements for all half year and full year results that
follow.
Representatives from the Company’s external auditor, Hall
Chadwick, are present at the Annual General Meeting to
answer questions that shareholders might have about the
scope and conduct of the audit, the preparation and content
of the auditor’s report, the accounting policies adopted by
the Company and the independence of the auditor.
The Company has adopted a formal Disclosure and
Communication Policy, where there is an express
requirement that the external auditor will attend the Annual
General Meeting and be available to answer questions about
the conduct of the audit and the preparation and content of
the auditor’s report.
C O R P O R A T E G O V E R N A N C E S T A T E M E N T
on the re-election of the Director (in the absence of the
Director involved). The Board (excluding the Chairperson),
will conduct the review of the Chairperson.
Under the Board Charter, senior executives’ performance
will be considered by the Nomination and Remuneration
Committee on at least an annual basis. The Chairperson is
responsible for ensuring these meetings take place.
A formal performance evaluation was not undertaken
during the 2015 financial year. The Board of the Company
was re-constituted in late November 2014 as a result of
the acquisition of SkyFii Group Pty Ltd, and as a result
the incumbent Board was, as at 30 June 2015, in place for
approximately seven months. As a result of the short period
of tenure of the incumbent Board, a formal performance
evaluation has been deferred to the following 2016 financial
year.
During the financial year, the Nomination and Remuneration
Committee commissioned an external and independent
review of remuneration of the Company’s Board and
executives. The recommendations of this review are
expected to be implemented in the next financial year.
Given the short tenure of the Company’s Board, no formal
performance evaluation of senior executives was undertaken
in relation to the previous financial year.
Principle 2 – Structure the board to add
value
The Nomination and Remuneration Committee has the
authority and power to exercise the roles and responsibilities
granted to it under the Nomination and Remuneration
Committee Charter.
The Committee is comprised of two independent Directors,
one of whom acts as chairperson. The Company’s
Nomination and Remuneration Committee does not meet
the recommended minimum of three members. The Board
is of the view that given the Company’s size and stage of
operations, two independent Directors as members of the
Nomination and Remuneration Committee is sufficient to
perform the relevant responsibilities of the committee.
The Board has not, at this time, adopted a board skills matrix
given the Company’s size and stage of operations. The
Board aims to attract and maintain a Board which has an
appropriate mix of skills, experience, expertise and diversity.
For the names and particulars of the Directors of the
Company during or since the end of the financial year, refer
to the Directors’ Report.
The Board regularly assesses the independence of each
Director in light of the interests disclosed by them. That
assessment is made at least annually at, or around the time
that the Board considers candidates for election to the
Board, and each independent Director is required to provide
the Board with all relevant information for this purpose. If the
Board determines that a Director’s independent status has
changed, that determination will be disclosed to the market
in a timely fashion.
The Chairperson of the Board, Gary Flowers, is an
independent director, and the remainder of the Board
consists of a majority of independent directors, including
Anthony Dunlop, Andrew Johnson, James Scott and Chris
Taylor who are each considered to be independent Directors.
Under the Board Charter, the Directors are expected to
participate in any induction or orientation programs on
appointment, and any continuing education or training
arranged for them. The Company Secretary assists in
organising and facilitating the induction and professional
development of Directors.
20
SkyFii Limited 2015 Annual Report Principle 5 – Make timely and balanced
disclosure
The Company has adopted an Audit and Risk Committee
Charter which is available on the Company’s website,
www.skyfii.com.
C O R P O R A T E G O V E R N A N C E S T A T E M E N T
The Company ensures that it complies with the requirements
of ASX listing rules and the Corporations Act in providing
information to shareholders. Consistent with the Board’s
commitment to improving its disclosure policy, the Board
has adopted a Disclosure and Communication Policy, which
sets out the Company’s commitment to the objective
of promoting investor confidence and the rights of
shareholders by:
(a) complying with the continuous disclosure obligations
imposed by law;
(b) ensuring that company announcements are presented in
a factual, clear and balanced way;
(c) ensuring that all shareholders have equal and timely
access to material information concerning the Company;
and
(d) communicating effectively with shareholders and
making it easy for shareholders to participate in general
meetings.
The Disclosure and Communication Policy is available on the
Company’s website, www.skyfii.com.
Principle 6 – Respect the rights of security
holders
The Company recognises the rights of its shareholders
and other interested stakeholders to have easy access to
balanced, understandable and timely information concerning
the operations of the Company. Information concerning the
Company and its governance practices are made available
on its website and addressed in detail in each years’ Annual
Report.
The Board has adopted a Disclosure and Communication
Policy which supports its commitment to effective
communication with its shareholders. In addition, the
Company intends to communicate with its shareholders:
(a) by making timely market announcements;
(b) by posting relevant information on to its website;
(c) by inviting shareholders to make direct inquiries to the
Company; and
(d) through the use of general meetings.
The Board encourages participation of shareholders at the
Annual General Meeting or any other shareholder meetings
to ensure a high level of accountability and identification
with the Company’s strategy and goals.
The Company’s shareholders may elect to receive
information from the Company and its registry electronically.
Otherwise, the Company and its registry will communicate
by post with shareholders who have not elected to receive
information electronically.
Principle 7 – Recognise and manage risk
The Board has established an Audit and Risk Committee
to ensure the Company has an effective risk management
system in place and to manage key risk areas.
The Company’s Audit and Risk Committee, which has two
members, does not meet the recommended minimum of
three members. The Board is of the view that given the
Company’s size and stage of operations, two independent
Directors as members of the Audit and Risk Committee
is sufficient to perform the relevant responsibilities of the
Committee.
Under the Board Charter, the Board ensures that the
Company has in place an appropriate risk management
framework. A risk management framework was developed
during the financial year by the Audit and Risk Committee,
and approved by the Board. The Board will review, at least
annually, the Company’s risk management framework in
order to satisfy itself that it continues to be sound. A risk
review was undertaken at the end of the financial year.
For the purposes of ASX CGPR 7.4, the Company has not
identified any material exposures to specific economic,
environmental and social sustainability risks.
The Audit and Risk Committee is responsible for ensuring
that the Company has appropriate internal audit systems
and controls in place, and for overseeing the effectiveness of
these internal controls. The Committee is also responsible for
conducting investigations of breaches or potential breaches
of these internal controls.
Principle 8 – Remunerate fairly and
responsibly
The Company’s Nomination and Remuneration Committee
is responsible for developing, reviewing and making
recommendations on:
(a) the remuneration framework for Directors, including the
process by which any pool of Directors fees approved
by security holders is allocated to Directors;
(b) the remuneration packages to be awarded to senior
executives;
(c) equity based remuneration plans for senior executives
and other employees; and
(d) superannuation arrangements for Directors, senior
executives and other employees.
The Company’s remuneration policy is disclosed in the
Directors’ Report which forms part of the Annual Report.
The policy has been set out to ensure that the performance
of Directors, key executives and staff reflect each person’s
accountabilities, duties and their level of performance, and
to ensure that remuneration is competitive in attracting,
motivating and retaining staff of the highest quality. A
program of regular performance appraisals and objective
setting for key executives and staff is in place. These
annual reviews take into account individual and company
performance, market movements and expert advice, if
required.
The Constitution permits Directors, senior executives and
other officers of the Company to trade in Company shares
as long as they comply with the Company’s Share Trading
Policy. The Share Trading Policy is a code that is designed
to minimise the potential for intentional and unintentional
insider trading violations. The Company’s Share Trading
Policy is available on the Company’s website,
www.skyfii.com.
Directors must notify the Chairman of the Board, before they
buy or sell shares in the Company. The details of the share
trading must be given to the Company Secretary who must
lodge such details of such changes with the ASX.
Senior executives must give prior notice to the Chief
Executive Officer, while other officers must notify the
Company Secretary, before trading in the Company shares
and details of all such transactions must be given, in writing,
to the Company Secretary within 5 business days.
Any changes in substantial shareholding of the Directors,
senior executives or other officers must be reported to the
ASX within 2 business days of such trading. The policy also
recommends that trading in the Company shares only occur
in certain trading regulated windows.
21
www.skyfii.com | /SkyFii | /company/skyfii Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the financial year ended 30 June 2015
Revenue and other income
Revenue
Other income
Total revenue
Expenses
Direct costs and implementation expenses
Employee benefits expense
Contractor and consultant expenses
Marketing and promotion expenses
Data hosting expenses
Travel and accommodation expenses
Office and other expenses
Directors’ fees
Acquisition costs
Corporate advisory services
Impairment of goodwill and domain names
Depreciation and amortisation expenses
Finance costs
Loss before tax
Income tax benefit
Loss for the period
Other comprehensive income
Total comprehensive loss for the period
Earnings per share
Basic earnings per share
Diluted earnings per share
Note
5
5
6
13
6
6
7
30
30
Consolidated
2015
$
2014
$
658,237
86,234
744,471
640,336
-
640,336
(547,605)
(1,561,427)
(48,296)
(140,652)
(162,238)
(212,289)
(681,381)
(208,726)
(443,931)
(150,000)
(2,157,841)
(10,903)
(393)
(330,468)
(1,348,440)
(502,331)
(52,988)
(41,890)
(142,907)
(324,494)
-
-
-
-
(831)
(1,757)
(5,581,211)
(2,105,770)
791,729
480,994
(4,789,482)
(1,624,776)
-
-
(4,789,482)
(1,624,776)
Cents
(7.1)
(7.1)
Cents
(26.4)
(26.4)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
22
SkyFii Limited 2015 Annual Report
Consolidated Statement of Financial Position
As at 30 June 2015
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Income tax receivable
Inventories
Other assets
Total current assets
Non-current assets
Plant and equipment
Intangible assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Provisions
Borrowings
Deferred revenue
Total current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Accumulated losses
Total equity
Note
Consolidated
2015
$
2014
$
8
9
7
10
11
12
13
15
16
17
18
2,684,548
169,292
791,729
43,500
114,265
33,175
200,485
480,994
-
22,000
3,803,334
736,654
24,740
1,419,984
1,444,724
9,807
65,000
74,807
5,248,058
811,461
414,920
67,465
-
88,770
571,155
442,555
39,749
453,333
-
935,637
571,155
935,637
4,676,903
(124,176)
11,091,161
(6,414,258)
1,500,600
(1,624,776)
4,676,903
(124,176)
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
23
www.skyfii.com | /SkyFii | /company/skyfii
Consolidated Statement of Changes in Equity
For the financial year ended 30 June 2015
Consolidated
Note
Balance on incorporation
Loss for the year
Total comprehensive loss for the year
Transactions with owners in their capacity as owners:
Issue of ordinary shares
18
Balance at 30 June 2014
Consolidated
Note
Balance at 1 July 2014
Loss for the year
Total comprehensive loss for the year
Contributed
equity
$
-
-
-
Accumulated
losses
$
-
Total
equity
$
-
(1,624,776)
(1,624,776)
(1,624,776)
(1,624,776)
1,500,600
1,500,600
-
(1,624,776)
Contributed
equity
$
1,500,600
Accumulated
losses
$
(1,624,776)
1,500,600
(124,176)
Total
equity
$
(124,176)
-
-
(4,789,482)
(4,789,482)
(4,789,482)
(4,789,482)
Transactions with owners in their capacity as owners:
Issue of ordinary shares
Capitalised equity raising costs (net of tax)
18
18
Balance at 30 June 2015
10,710,158
(1,119,597)
-
-
11,091,161
(6,414,258)
10,710,158
(1,119,597)
4,676,903
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
24
SkyFii Limited 2015 Annual Report
Consolidated Statement of Cash Flows
For the financial year ended 30 June 2015
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Receipts from other income
Receipts from government R&D tax incentive
Interest received
Interest paid
Net cash (outflow) from operating activities
Cash flows from investing activities
Payments for plant and equipment
Payments for intangible assets
Payments for other assets
Payments for acquisition costs
Net cash (outflow) from investing activities
Cash flows from financing activities
Proceeds from issue of shares
Repayment of loans from shareholders
Payments for loans to shareholders
Capitalised capital raising costs
(Repayment) / drawdown of borrowings
Net cash inflow from financing activities
Net (decrease) / increase in cash held
Note
Consolidated
2015
$
2014
$
834,775
(3,393,872)
64,125
480,994
22,109
(393)
442,229
(2,271,659)
-
-
-
(1,757)
29
(1,992,262)
(1,831,187)
(25,836)
(1,419,984)
(3,884)
(443,931)
(1,893,635)
(10,638)
(65,000)
(13,933)
-
(89,571)
4,450,090
71,667
(71,667)
(260,274)
(453,333)
1,500,600
-
-
-
453,333
3,736,483
1,953,933
(149,414)
33,175
Cash at the beginning of the financial year
Cash at acquisition of RKS Consolidated Limited
Cash at the end of the financial year
33,175
2,800,787
2,684,548
-
-
33,175
8
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
25
www.skyfii.com | /SkyFii | /company/skyfii
Notes to the Financial Statements
For the financial year ended 30 June 2015
Contents to the notes to the consolidated financial statements
1. Reporting entity
2. Basis of preparation
3. Significant accounting policies
4. Operating segments
5. Revenue
6. Expenses
7. Income tax
8. Cash and cash equivalents
9. Trade and other receivables
10. Inventories
11. Other assets
12. Plant and equipment
13. Intangible assets
14. Net tangible asset backing
15. Trade and other payables
16. Provisions
17. Borrowings
18. Contributed equity
19. Financial risk management
20. Remuneration of auditors
21. Contingent liabilities
22. Commitments for expenditure
23. Share based payments
24. Related parties
25. Parent entity information
26. Business combinations
27. Interests in controlled entities
28. Events occurring after the reporting date
29. Reconciliation of loss after tax to net cash from operating activities
30. Earnings per share (EPS)
26
27
27
27
32
33
33
33
34
34
34
34
34
35
36
36
36
36
37
38
39
39
40
40
40
41
42
42
43
43
44
SkyFii Limited 2015 Annual Report N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
1. Reporting entity
SkyFii Limited (the Company) is a company domiciled in
Australia. The address of the Company’s registered office
and principal place of business is Suite 3, Level 2, 118
Devonshire Street, Surry Hills, NSW, 2010. The consolidated
financial statements of the Company as at and for the
year ended 30 June 2015 comprise the Company and
its subsidiaries (together referred to as the Group and
individually as Group entities). The Group is a for-profit
entity and primarily is involved in providing data analytics
services. The separate financial statements of the parent
entity, SkyFii Limited, have not been presented within this
financial report as permitted by the Corporations Act 2001.
The financial statements were authorised for issue on 21
August 2015 by the Directors of the Company.
2. Basis of preparation
(a) Compliance with International Financial Reporting
Standards
These general purpose financial statements have been
prepared in accordance with the Corporations Act 2001,
Australian Accounting Standards and Interpretations of the
Australian Accounting Standards Board and International
Financial Reporting Standards as issued by the International
Accounting Standards Board. Material accounting policies
adopted in the preparation of these financial statements are
presented below and have been consistently applied unless
stated otherwise.
(b) Historical cost convention
The consolidated financial statements have been prepared
on the historical cost basis unless otherwise stated in the
notes. Except for the cash flow information, the financial
statements have been prepared on an accrual basis,
modified, where applicable, by the measurement at fair value
of selected non-current assets, financial assets and financial
liabilities.
(c) Functional and presentation currency
These consolidated financial statements are presented in
Australian dollars, which is the Company’s functional currency.
(d) Critical accounting estimates
The preparation of financial statements requires the use
of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of
applying the Group’s accounting policies. The areas involving
a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial
statements are disclosed in Note 3(w).
(e) Going concern
The financial statements of the Group have been
prepared on a going concern basis, which contemplates
the continuation of normal business operations and the
realisation of assets and settlement of liabilities in the normal
course of business.
The Group is in the research, development and
commercialisation stage of its data analytics technology
and services. During the year ended 30 June 2015 the Group
incurred a loss after tax of $4,789,482, which included a one-
off impairment of goodwill and domain names amounting
to $2,157,841 and incurred cash outflows from operating
activities of $1,992,262 for the year. At 30 June 2015, the
Group had a surplus in net current assets of $3,232,179 and a
surplus in net assets of $4,676,903.
The Group has to date been successful in raising equity
capital since the Company’s re-listing in November 2014,
having undertaken a private placement to new and existing
sophisticated investors of $2,800,000 in May 2015.
Management have prepared cash flow projections that
support the Group’s ability to continue as a going concern,
after expected future capital raisings. This forecast
acknowledges that the Group is in the early stages of
development and assumes that the Directors will be able to
raise at least $5,000,000 in the next financial year and that
the Group will continue to grow sales of its products and
services and successfully exploit the Group’s technology.
The Directors of the Company consider that the cash flow
projections and assumptions will be achieved, and in the
longer term, significant revenues will be generated from the
commercialisation of intellectual property, and accordingly,
the Group will be able to continue as a going concern.
In the event that the Group cannot continue as a going
concern, it may not be able to realise its assets and settle
its liabilities in the normal course of operations and at the
amounts stated in the financial statements.
3. Significant accounting policies
(a) Principles of consolidation
The consolidated financial statements incorporate all of
the assets, liabilities and results of SkyFii Limited and all
subsidiaries. Subsidiaries are all entities over which the
Group has control. The Group controls an entity when it
is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect
those returns through its power to direct the activities of the
entity. A list of the subsidiaries is provided in Note 27.
The assets, liabilities and results of all subsidiaries are fully
consolidated into the financial statements of the Group
from the date on which control is obtained by the Group.
The consolidation of a subsidiary is discontinued from
the date that control ceases. Intercompany transactions,
balances and unrealised gains or losses on transactions
between group entities are fully eliminated on consolidation.
Accounting policies of subsidiaries have been changed and
adjustments made where necessary to ensure uniformity of
the accounting policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or
indirectly, to the Group are presented as “non-controlling
interests”. The Group initially recognises non-controlling
interests that are present ownership interests in subsidiaries
and are entitled to a proportionate share of the subsidiary’s
net assets on liquidation at either fair value or at the non-
controlling interests’ proportionate share of the subsidiary’s
net assets. Subsequent to initial recognition, non-controlling
interests are attributed their share of profit or loss and each
component of other comprehensive income. Non-controlling
interests are shown separately within the equity section
of the statement of financial position and statement of
comprehensive income.
The consolidated financial statements have been prepared
using reverse acquisition accounting. In reverse acquisition
accounting, the cost of the business combination is deemed
to have been incurred by the legal subsidiary SkyFii Group
Pty Ltd. (the acquirer for accounting purposes) in the form of
equity instruments issued to the owners of the legal parent,
SkyFii Limited (the acquiree for accounting purposes).
(b) Business combinations
Business combinations occur where an acquirer obtains
control over one or more businesses.
A business combination is accounted for by applying the
acquisition method, unless it is a combination involving
entities or businesses under common control. The business
combination will be accounted for from the date that
control is attained, whereby the fair value of the identifiable
assets acquired and liabilities (including contingent
liabilities) assumed is recognised (subject to certain limited
exceptions).
27
www.skyfii.com | /SkyFii | /company/skyfii N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
When measuring the consideration transferred in the
business combination, any asset or liability resulting from
a contingent consideration arrangement is also included.
Subsequent to initial recognition, contingent consideration
classified as equity is not remeasured and its subsequent
settlement is accounted for within equity. Contingent
consideration classified as an asset or liability is remeasured
each reporting period to fair value, recognising any change
to fair value in profit or loss, unless the change in value can
be identified as existing at acquisition date.
All transaction costs incurred in relation to the business
combination are expensed to the statement of profit or loss
and comprehensive income.
The acquisition of a business may result in the recognition of
goodwill or a gain from a bargain purchase.
(c) Income tax
The income tax expense or revenue for the period is the tax
payable on the current period’s taxable income based on the
applicable tax rate for each jurisdiction adjusted by changes
in deferred tax assets and liabilities attributable to temporary
differences and to unused tax losses.
The current income tax charge is calculated on the basis
of the tax laws enacted or substantively enacted at the
end of the reporting period in the countries where the
Company’s subsidiaries operate and generate taxable
income. Management periodically evaluates positions taken
in tax returns with respect to situations in which applicable
tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Deferred tax is recognised in respect of temporary
differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts
used for taxation purposes. Deferred tax is not recognised
for:
•
•
temporary differences on the initial recognition of
assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor
taxable profit or loss;
temporary differences related to investments in
subsidiaries, associates and jointly controlled entities to
the extent that the Group is able to control the timing
of the reversal of the temporary differences and it is
probable that they will not reverse in the foreseeable
future; and
•
taxable temporary differences arising on the initial
recognition of goodwill.
The measurement of deferred tax reflects the tax
consequences that would follow the manner in which the
Group expects, at the end of the reporting period, to recover
or settle the carrying amount of its assets and liabilities.
Deferred tax is measured at the tax rates that are expected
to be applied to temporary differences when they reverse,
using tax rates enacted or substantively enacted at the
reporting date.
Deferred tax assets and liabilities are offset if there is a
legally enforceable right to offset current tax liabilities
and assets, and they relate to taxes levied by the same tax
authority on the same taxable entity, or on different tax
entities, but they intend to settle current tax liabilities and
assets on a net basis or their tax liabilities and assets will be
realised simultaneously.
A deferred tax asset is recognised for unused tax losses,
tax credits and deductible temporary differences, to the
extent that it is probable that future taxable profits will be
available against which they can be utilised. Deferred tax
assets are reviewed at each reporting date and are reduced
to the extent that it is no longer probable that the related tax
benefit will be realised.
In determining the amount of current and deferred tax
the Group takes into account the impact of uncertain tax
positions and whether additional taxes and interest may be
due. This assessment relies on estimates and assumptions
and may involve a series of judgements about future events.
New information may become available that causes the
Group to change its judgement regarding the adequacy
of existing tax liabilities; such changes to tax liabilities
will impact the tax expense in the period that such a
determination is made.
The Company and its wholly-owned Australian resident
entities are part of a tax consolidated group. As a
consequence, all members of the tax consolidated group
are taxed as a single entity. SkyFii Limited became the head
entity within the tax consolidated group on 20 November
2014 (previously SkyFii Group Pty Ltd).
Where the Group receives the Australian Government’s
R&D tax incentive, the Group accounts for the refundable
tax offset under AASB 112. Funds are received as a rebate
through the parent company’s income tax return and
disclosed as such in Note 7.
(d) Inventories
Inventories are measured at the lower of cost and net
realisable value. Costs of inventories are determined on a
first-in, first-out basis. Net realisable value represents the
estimated selling price for inventories less all estimated costs
of completion and costs necessary to make the sale.
(e) Plant and equipment
Plant and equipment is stated at historical cost less
depreciation, amortisation and impairment losses. Historical
cost includes expenditure that is directly attributable to the
acquisition of the items.
The carrying amount of plant and equipment is reviewed
annually 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 asset’s employment and
subsequent disposal. The expected net cash flows have not
been discounted in determining recoverable amounts.
Depreciation of all fixed assets is calculated using the
straight-line method to allocate their cost, net of their
residual values, over their estimated useful lives, as follows:
• Office and computer equipment: 3 years.
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.
Gains and losses on disposals are determined by comparing
proceeds with the carrying amount. These gains or losses are
recognised in the profit and loss in the period in which they
arise. When revalued assets are sold, amounts included in
the revaluation surplus relating to that asset are transferred
to retained earnings.
(f) Intangibles
Software development
Costs relating to research and development of new software
products are expensed as incurred until technological
feasibility has been established. Costs incurred in developing
new software are recognised as intangible assets only when
technological feasibility studies identify that it is probable
that the project will deliver future economic benefits and
these benefits can be measured reliably. The expenditure
capitalised comprises all directly attributable costs, including
costs of materials, services, licenses and direct labour.
28
SkyFii Limited 2015 Annual Report Capitalised development costs have a finite useful life
and are carried at cost less accumulated amortisation
and impairment losses. Amortisation is calculated on a
systematic basis based on the future economic benefits over
the useful life of the project as follows: Year 1: 0%; Year 2:
40%; Year 3: 40%; Year 4: 20%.
Domain names
Domain names are valued at cost of acquisition. Domain
names are tested for impairment annually or more frequently
if events or changes in circumstances indicate that it might
be impaired, either individually or at the cash generating unit
level. Useful lives are also examined on an annual basis and
adjustments, where applicable, are made on a prospective
basis.
Goodwill
Goodwill is initially recorded at the amount by which the
purchase price for a business combination exceeds the
fair value attributed to the interest in the net fair value
of identifiable assets, liabilities and contingent liabilities
acquired at date of acquisition. Goodwill is not amortised.
Instead, goodwill is tested for impairment annually or
more frequently if events or changes in circumstances
indicate that it might be impaired, and is carried at cost less
accumulated impairment losses.
(g) Employee benefits
Short-term obligations
Employee benefits that are expected to be settled within 12
months have been measured at the amounts expected to be
paid when the liabilities are settled, plus related on-costs.
The liability for annual leave is recognised in the provision
for employee benefits. All other short-term employee benefit
obligations are presented as payables.
Other long–term employee benefit obligations
Employee benefits payable later than 12 months have been
measured at the present value of the estimated future cash
outflows to be made for those benefits. In determining the
liability, consideration is given to employee wages increases
and the probability that the employee may satisfy any
vesting requirements. Those cash flows are discounted using
market yields on national government bonds with terms
to maturity that match the expected timing of cash flows
attributable to employee benefits.
Short term incentive plans
The Group recognises a liability and an expense for bonuses
payable under short term incentive plans. Short term
incentive plans are based on the achievement of targeted
performance levels that may be set at the beginning of each
financial year. The Group recognises a liability to pay out
short term incentives when contractually obliged based on
the achievement of the stated performance levels, or where
there is a past practice that has created a constructive
obligation.
(h) Borrowing costs
All borrowing costs are recognised in profit and loss in the
period in which they are incurred.
(i) 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
recognised represent the best estimate of the amounts
required to settle the obligation at reporting date.
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
(j) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits
held at call with banks, 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.
(k) Trade receivables
Trade receivables are recognised initially at fair value
and subsequently measured at amortised cost using the
effective interest method, less provision for impairment. This
provision includes amounts that are not considered to be
recoverable from debtors and amounts that are expected
to be credited to debtors. Trade receivables are generally
due for settlement no more than 30 days from the date of
recognition. They are presented as current assets unless
collection is not expected for more than 12 months after the
reporting date.
Collectability of trade receivables is reviewed on an ongoing
basis. A provision for impairment of trade receivables is
established when there is objective evidence that the Group
will not be able to collect all amounts due according to
the original terms of the receivables. Significant financial
difficulties of the debtor, probability that the debtor will
enter bankruptcy or financial reorganisation, and default
or delinquency in payments are considered indicators
that the trade receivable is impaired. In addition, the trade
receivables balances are considered for credit notes that
are expected to be raised against individual and collective
balances.
(l) Trade and other payables
These amounts represent liabilities for goods and services
provided to the Group at the end of financial year which are
unpaid. The amounts are unsecured and are payable as and
when they are due. Trade and other payables are presented
as current liabilities unless payment is not due within 12
months from the reporting date.
(m) Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable after taking into account any trade
discounts and volume rebates allowed. When the inflow
of consideration is deferred, it is treated as the provision
of financing and is discounted at a rate of interest that is
generally accepted in the market for similar arrangements.
The difference between the amount initially recognised and
the amount ultimately received is interest revenue.
Revenue from the sale of goods is recognised at the point
of delivery as this corresponds to the transfer of significant
risks and rewards of ownership of the goods and the
cessation of all involvement in those goods.
Revenue for installation projects are recognised on the
basis of that portion of total estimated costs that have been
incurred to date in the completion of a particular project.
Interest revenue is recognised using the effective interest
method.
Government grants are recognised at fair value where there
is reasonable assurance that the grant will be received and
all grant conditions will be met.
Government R&D tax incentives are recognised as credit to
income tax.
All revenue is stated net of the amount of goods and
services tax (GST).
29
www.skyfii.com | /SkyFii | /company/skyfii N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
(n) Goods and Services Tax (GST)
(p) Earnings per share
Revenues, expenses and assets are recognised net of the
amount of GST, except where the amount of GST incurred
is not recoverable from the Australian Tax Office (ATO). 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 are stated inclusive of
the amount of GST receivable or payable. The net amount
of GST recoverable from, or payable to, the ATO is included
with other receivables or payables in the statement of
financial position.
Cash flows are presented in the cash flow statement on a
gross basis. The GST components of cash flows arising from
investing or financing activities which are recoverable from,
or payable to, the ATO are presented as operating cash
flows included in receipts from customers or payments to
suppliers.
(o) Foreign currency transactions and balances
Functional and presentation currency
The functional currency of each of the Group entities is
measured using the currency of the primary economic
environment in which that entity operates. The consolidated
financial statements are presented in Australian dollars, which
is the parent entity’s functional and presentation currency.
Transactions 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.
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 underlying
gain or loss is recognised in other comprehensive income,
otherwise the exchange difference is recognised in profit or
loss.
Group companies
The financial results and position of foreign operations
whose functional currency is different from the Group’s
presentation currency is translated as follows:
Basic earnings per share
Basic earnings per share is calculated by dividing:
•
the profit attributable to owners of the Company,
excluding any costs of servicing equity other than
ordinary shares
• by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus
elements in ordinary shares issued during the year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into
account:
•
•
the after income tax effect of interest and other financing
costs associated with dilutive potential ordinary shares,
and
the weighted average number of shares assumed to have
been issued for no consideration in relation to dilutive
potential ordinary shares.
(q) Financial instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when
the entity becomes a party to the contractual provisions of
the instrument. For financial assets, this is equivalent to the
date that the Group commits itself to either purchase or sell
the asset (i.e. trade date accounting is adopted).
Financial instruments are initially measured at fair value
plus transaction costs, except where the instrument is
classified “at fair value through profit or loss”, in which case
transaction costs are expensed to profit or loss immediately.
Classification and subsequent measurement
Financial instruments are subsequently measured at fair
value, amortised cost using the effective interest method, or
cost.
Amortised cost is calculated as the amount at which the
financial asset or financial liability is measured at initial
recognition less principal repayments and any reduction for
impairment, and adjusted for any cumulative amortisation of
the difference between that initial amount and the maturity
amount calculated using the effective interest method.
The Group does not designate any interests in subsidiaries,
associates or joint venture entities as being subject to the
requirements of Accounting Standards specifically applicable
to financial instruments.
Assets and liabilities are translated at year end exchange
rates prevailing at that reporting date.
Loans and receivables
Income and expenses are translated at average exchange
rates for the year.
Retained earnings are translated at the exchange rates
prevailing at the date of the transaction.
Exchange differences arising on translation of foreign
operations with functional currencies other than the
Australian dollar are recognised in other comprehensive
income and included in the foreign currency translation
reserve in the statement of financial position. The cumulative
amount of these differences is reclassified into profit or loss
in the period in which the operation is disposed of.
Loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted
in an active market and are subsequently measured at
amortised cost. Gains or losses are recognised in profit or
loss through the amortisation process and when the financial
asset is derecognised.
Financial liabilities
Non-derivative financial liabilities other than financial
guarantees are subsequently measured at amortised cost.
Gains or losses are recognised in profit or loss through
the amortisation process and when the financial liability is
derecognised.
Impairment
At the end of each reporting period, the Group assesses
whether there is objective evidence that a financial asset
has been impaired. A financial asset (or a group of financial
assets) is deemed to be impaired if, and only if, there is
30
SkyFii Limited 2015 Annual Report N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
objective evidence of impairment as a result of one or more
events (a “loss event”) having occurred, which has an impact
on the estimated future cash flows of the financial asset(s).
In the case of financial assets carried at amortised cost, loss
events may include: indications that the debtors (or a group
of debtors) are experiencing significant financial difficulty,
default or delinquency in interest or principal payments;
indications that they will enter bankruptcy or other financial
reorganisation; and changes in arrears or economic
conditions that correlate with defaults.
For financial assets carried at amortised cost (including
loans and receivables), a separate allowance account is used
to reduce the carrying amount of financial assets impaired
by credit losses. After having taken all possible measures
of recovery, if management establishes that the carrying
amount cannot be recovered by any means, at that point
the written-off amounts are charged to the allowance
account, or the carrying amount of impaired financial assets
is reduced directly if no impairment amount was previously
recognised in the allowance account.
When the terms of financial assets that would otherwise
have been past due or impaired have been renegotiated, the
Company recognises the impairment for such financial assets
by taking into account the original terms as if the terms
have not been renegotiated so that the loss events that have
occurred are duly considered.
Derecognition
Financial assets are derecognised when the contractual
rights to receipt of cash flows expire or the asset is
transferred to another party whereby the entity no longer
has any significant continuing involvement in the risks and
benefits associated with the asset. Financial liabilities are
derecognised when the related obligations are discharged,
cancelled or have expired. The difference between the
carrying amount of the financial liability extinguished
or transferred to another party and the fair value of
consideration paid, including the transfer of non-cash assets
or liabilities assumed, is recognised in profit or loss.
(r) Impairment of assets
At the end of each reporting date, the Group reviews
the carrying values of its tangible and intangible assets
to determine whether there is any indication that those
assets have been impaired. If such an indication exists,
the recoverable amount of the asset, being the higher of
the asset’s fair value less costs to sell and value in use,
is compared to the asset’s carrying value. Any excess of
the asset’s carrying value over its recoverable amount is
recognised immediately in the profit and loss.
Impairment testing is performed annually for goodwill and
intangible assets with indefinite lives.
Where it is not possible to estimate the recoverable amount
of an individual asset, the Group estimates the recoverable
amount of the cash generating unit to which the asset
belongs.
(s) Leases
Leases in which a significant portion of the risks and
rewards of ownership are not transferred to the Group as
lessee are classified as operating leases. Leases are made
up of operating leases of property. Payments made under
operating leases (net of any incentives received from the
lessor) are charged to the consolidated income statement
on a straight-line basis over the period of the lease. Benefits
that are provided to the Group as an incentive to enter into a
lease arrangement are recognised as a liability and amortised
on a straight-line basis over the life of the lease.
(t) Comparative figures
When required by Accounting Standards, comparative
figures have been adjusted to conform to changes in
presentation for the current financial year.
Where the Group has retrospectively applied an accounting
policy, made a retrospective restatement or reclassified
items in its financial statements, an additional statement
of financial position as at the beginning of the earliest
comparative period will be disclosed.
The comparative information presented in the financial
report represents the consolidated statement of profit
or loss and other comprehensive income, consolidated
statement of financial position, consolidated statement of
changes in equity and consolidated statement of cash flows
of SkyFii Group Pty Ltd from its date of incorporation being
5 August 2013 to 30 June 2014.
(u) Contributed equity
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares, are shown in
equity as a deduction, net of tax, from the proceeds.
(v) Segment reporting
Operating segments are reported in a manner consistent
with the internal reporting provided to the chief operating
decision maker. These include items directly attributable
to a segment as well as those that can be allocated on
a reasonable basis. Unallocated items comprise mainly
corporate assets (primarily the Company’s headquarters),
head office expenses, and income tax assets and liabilities.
The chief operating decision maker has been identified as
the Board of Directors.
(w) Critical accounting estimates and judgments
The directors evaluate estimates and judgements
incorporated into the financial report based on historical
knowledge and best available current information. Estimates
assume a reasonable expectation of future events and are
based on current trends and economic data, obtained both
externally and within the Group. The resulting accounting
estimates will, by definition, seldom equal the related actual
results. 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.
Business combinations
Following the guidance in AASB 3: Business Combinations,
the Group has made assumptions and estimates to
determine the purchase price of businesses acquired as
well as its allocation to acquired assets and liabilities. To
do so, the Group is required to determine at the acquisition
date the fair value of the identifiable net assets acquired,
including intangible assets such as brand, customer
relationships and liabilities assumed. Goodwill is measured as
the excess of the fair value of the consideration transferred
including the recognised amount of any non-controlling
interest over the net recognised amount of the identifiable
assets and liabilities.
The assumptions and estimates made by the Group have
an impact on the asset and liability amounts recorded in
the financial statements. In addition, the estimated useful
lives of the acquired amortisable assets, the identification of
intangible assets and the determination of the indefinite or
finite useful lives of intangible assets acquired will have an
impact on the Group’s future profit or loss.
31
www.skyfii.com | /SkyFii | /company/skyfii number of exceptions, including leases, the new
revenue model in AASB 15 will apply to all contracts
with customers as well as non-monetary exchanges
between entities in the same line of business to
facilitate sales to customers and potential customers.
• The core principle of the Standard is that an entity
will recognise revenue to depict the transfer of
promised goods or services to customers in an
amount that reflects the consideration to which the
entity expects to be entitled in exchange for the
goods or services. To achieve this objective, AASB 15
provides the following five-step process:
•
•
identify the contract(s) with a customer;
identify the performance obligations in the
contract(s);
• determine the transaction price;
• allocate the transaction price to the
performance obligations in the contract(s);
and
•
recognise revenue when (or as) the
performance obligations are satisfied.
• This Standard will require retrospective restatement,
as well as enhanced disclosures regarding revenue.
• Although the directors anticipate that the adoption
of AASB 15 may have an impact on the Group’s
financial statements, it is impracticable at this stage
to provide a reasonable estimate of such impact.
4. Operating segments
The Group operates predominantly in one industry and
one geographical segment, being the development
and commercialisation of data analytics, marketing and
advertising services to its customers in Australia. At this
stage the Group’s overseas operations are in start-up phase
and not significant to the Group. The Group has identified
its operating segments 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.
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
Impairment of intangible assets
The Group assesses impairment at each reporting date by
evaluating conditions specific to the Group that may lead to
impairment of assets. Where an impairment trigger exists,
the recoverable amount of the asset is determined. Value-in-
use calculations performed in assessing recoverable amounts
incorporate a number of key estimates.
During the year ended 30 June 2015, the Group recognised
a loss of $2,157,841 in respect of an impairment of the entire
goodwill arising from the acquisition of RKS Consolidated
Limited by SkyFii Group Pty Ltd (in accordance with reverse
acquisition accounting) and the impairment of intangible
domain name assets recognised by SkyFii Group Pty Ltd in
the financial year ended 30 June 2014.
Should the software development expenditure not meet
the requirements set out in Note 3(f), an impairment loss
would be recognised up to the maximum carrying value of
intangible assets at 30 June 2015 of $1,419,984.
R&D tax incentive
The Group has established a precedent for entitlement to
grant income from the R&D tax incentive in prior periods.
This experience supports the assumption that eligibility for
the grant will continue on the same basis, and accordingly,
it is appropriate to recognise entitlement to the receivable
in the current period. The value of the R&D tax incentive
entitlement is determined by notional deductions based on
eligible R&D expenditures.
(x) New Accounting Standards for application in future
periods
Accounting Standards and Interpretations issued by the
AASB that are not yet mandatorily applicable to the Group,
together with an assessment of the potential impact of such
pronouncements on the Group when adopted in future
periods, are discussed below:
• AASB 9: Financial Instruments and associated Amending
Standards (applicable to annual reporting periods
beginning on or after 1 January 2017).
• The Standard will be applicable retrospectively
(subject to the provisions on hedge accounting
outlined below) and includes revised requirements
for the classification and measurement of financial
instruments, revised recognition and derecognition
requirements for financial instruments and simplified
requirements for hedge accounting.
• The key changes that may affect the Group on initial
application include certain simplifications to the
classification of financial assets, simplifications to
the accounting of embedded derivatives, upfront
accounting for expected credit loss, and the
irrevocable election to recognise gains and losses
on investments in equity instruments that are not
held for trading in other comprehensive income.
AASB 9 also introduces a new model for hedge
accounting that will allow greater flexibility in the
ability to hedge risk, particularly with respect to
hedges of non-financial items. Should the entity elect
to change its hedge policies in line with the new
hedge accounting requirements of the Standard,
the application of such accounting would be largely
prospective.
•
The directors anticipate that the adoption of AASB
9 does not have a significant impact on the Group’s
financial statements.
• AASB 15: Revenue from Contracts with Customers
(applicable to annual reporting periods commencing on
or after 1 January 2018).
• When effective, this Standard will replace the current
accounting requirements applicable to revenue with
a single, principles-based model. Except for a limited
32
SkyFii Limited 2015 Annual Report 5. Revenue
Revenue from operations
Other income
Government grants
Interest income
Total other income
Total revenue
6. Expenses
Employee benefits expense
Salaries and related expenses (including superannuation)
Other employment costs
Total employee benefits expense
Depreciation and amortisation expenses
Plant and equipment
Total depreciation and amortisation expenses
Net foreign exchange losses
Rental expense on operating leases
Finance costs
Interest expense
7. Income tax
(a) Income tax
Current tax
Income tax benefit
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
Consolidated
2015
$
658,237
2014
$
640,336
64,125
22,109
86,234
-
-
-
744,471
640,336
Consolidated
2015
$
2014
$
1,452,927
108,500
1,287,925
60,515
1,561,427
1,348,440
10,903
10,903
16,736
81,218
831
831
826
56,273
393
1,757
Consolidated
2015
$
2014
$
(791,729)
(480,994)
(791,729)
(480,994)
(b) Numerical reconciliation of income tax benefit to prima facie income tax payable
Loss from ordinary activities before income tax expense
Tax at the Australian rate of 30%
(5,581,210)
(1,674,363)
(2,105,770)
(631,731)
Tax effect amounts which are not deductible / (taxable) in calculating taxable income:
R&D tax incentive
Goodwill impairment
Accounting for R&D expenditure
Accounting for reverse acquisition
Deferred tax assets not recognised
Other non-allowable items
Income tax benefit
(c) Income tax receivable
R&D tax incentive receivable
Income tax receivable
Franking credits
Franking credits available at the reporting date based on a tax rate of 30%
(791,729)
647,352
546,020
(122,262)
577,325
25,928
(480,994)
-
320,663
-
310,230
838
(791,729)
(480,994)
791,729
791,729
480,994
480,994
-
-
33
www.skyfii.com | /SkyFii | /company/skyfii
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
The amount of deductible temporary differences and unused tax losses for which no deferred tax assets have been brought to
account in the period are as follows:
•
•
•
temporary differences: $52,994 (2014: $63,036)
tax losses: operating losses $4,649,757 (2014: $976,505)
tax losses: capital losses $16,911 (2014: $5,000)
The benefits of the above temporary differences and unused tax losses will only be realised if the conditions for deductibility
set out in Note 3(c) occur. These amounts have no expiry date.
SkyFii Limited and its wholly-owned Australian entities elected to form an income tax consolidated group as of 20 November
2014. The accounting policy on implementation of the income tax consolidation legislation is set out in Note 3(c).
8. Cash and cash equivalents
Current
Cash at bank and on hand
Term deposits
Total cash and cash equivalents
9. Trade and other receivables
Current
Trade receivables
Other debtors
Total current trade and other receivables
(a) Ageing of trade receivables
1-30 days
31-60 days
61-90 days
90+ days
Provision for impairment
Total trade receivables net of provision for impairment
10. Inventories
Current
Equipment – at cost
Total inventories
Consolidated
2015
$
2,679,548
5,000
2,684,548
Consolidated
2015
$
110,339
58,953
169,292
45,101
42,908
22,330
-
-
110,339
2014
$
33,175
-
33,175
2014
$
198,107
2,378
200,485
188,637
3,970
-
5,500
-
198,107
Consolidated
2015
$
43,500
43,500
2014
$
-
-
Inventories include servers and other networking equipment which the Group sells to its customers in order to deliver data
analytics services.
11. Other assets
Current
Prepayments
Security deposits
Total current other assets
12. Plant and equipment
Non-current
Office and computer equipment – at cost
Accumulated depreciation
Carrying value of office and computer equipment
Consolidated
2015
$
104,598
9,667
114,265
Consolidated
2015
$
36,474
(11,734)
24,740
2014
$
10,445
11,555
22,000
2014
$
10,638
(831)
9,807
Total carrying value of plant and equipment
24,740
9,807
34
SkyFii Limited 2015 Annual Report Reconciliations
Reconciliations of the carrying amount of plant and equipment at the beginning and end of the current financial year are set out
below:
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
Balance on incorporation
Additions
Depreciation
Balance at 30 June 2014
Balance at 1 July 2014
Additions
Depreciation
Balance at 30 June 2014
13. Intangible assets
Non-current
Software development – at cost
Accumulated amortisation
Carrying value of software development
Domain names – at cost
Accumulated impairment
Carrying value of domain names
Goodwill – at cost
Accumulated amortisation and impairment
Carrying value of goodwill
Office and computer equipment
$
10,638
(831)
9,807
9,807
25,836
(10,903)
24,740
Total
$
10,638
(831)
9,807
9,807
25,836
(10,903)
24,740
Consolidated
2015
$
2014
$
1,419,984
-
1,419,984
65,000
(65,000)
-
2,092,841
(2,092,841)
-
-
-
-
65,000
-
65,000
-
-
-
Total carrying value of intangible assets
1,419,984
65,000
Reconciliations
Reconciliations of the carrying amount of intangible assets at the beginning and end of the current financial year are set out
below:
Software development
$
Domain names
$
Goodwill
$
Balance on incorporation
Additions
Amortisation
Balance at 30 June 2014
Balance at 1 July 2014
Additions
Impairment
Amortisation
Balance at 30 June 2015
-
-
-
-
-
1,419,984
-
-
1,419,984
-
65,000
-
65,000
65,000
-
(65,000)
-
-
Total
$
-
65,000
-
65,000
-
-
-
-
-
2,092,841
(2,092,841)
-
-
65,000
3,512,825
(2,157,841)
-
1,419,984
During the year ended 30 June 2015, the Group recognised a loss of $2,157,841 in respect of an impairment of the entire
goodwill arising from the acquisition of RKS Consolidated Limited by SkyFii Group Pty Ltd (in accordance with reverse
acquisition accounting) and the impairment of domain name assets recognised by SkyFii Group Pty Ltd in the financial year
ended 30 June 2014.
35
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
14. Net tangible asset backing
Net tangible asset backing per share
Net assets per share
15. Trade and other payables
Current
Trade payables
Sundry payables
Total trade and other payables
16. Provisions
Current
Employee benefits
Total provisions
17. Borrowings
Current
Convertible notes
Total borrowings
Consolidated
2015
Cents per share
2.86
4.11
2014
Cents per share
(2.52)
(1.66)
Consolidated
2015
$
395,937
18,983
414,920
2014
$
442,555
-
442,555
Consolidated
2015
$
67,465
67,465
2014
$
39,749
39,749
Consolidated
2015
$
-
-
2014
$
453,333
453,333
Pursuant to a convertible note facility agreement entered into by SkyFii Group Pty Ltd on 24 April 2014, the convertible notes
outstanding converted to 530,463 ordinary shares in SkyFii Group Pty Ltd on 22 July 2014 upon the completion of a capital
raising that was conducted by way of a private placement of ordinary shares.
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SkyFii Limited 2015 Annual Report
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
18. Contributed equity
(a) Share capital
Ordinary shares
Total share capital
(b) Movements in ordinary share capital
Reconciliation to 30 June 2014:
Balance on incorporation
Movements in ordinary shares:
Issued for cash
Issued for cash
Issued for cash
Balance at 30 June 2014
Reconciliation to 30 June 2015:
Balance at 1 July 2014
Capitalised equity raising costs (net of tax)
Movements in ordinary shares:
Issued for cash
Issued for cash
Conversion of convertible notes to ordinary shares
Issued in settlement of a liability
Issued in settlement of a liability
Public share offer
Issued in settlement of a liability
Issue of shares to former shareholders of SkyFii Group Pty Ltd
Elimination of SkyFii Group Pty Ltd shares on issue on acquisition
Shares of SkyFii Limited (formerly RKS Consolidated Limited) on
acquisition
Issued in settlement of a liability
Issued in settlement of a liability
Share placement
Issued in settlement of a liability
Balance at 30 June 2015
(c) Ordinary shares
2015
Number
113,768,522
2014
Number
7,500,000
2015
$
11,091,161
2014
$
1,500,600
11,091,161
1,500,600
Date
Number
Unit price
-
$
-
5 Aug 2013 6,000,000
19 Dec 2013 1,000,000
500,000
15 Jan 2014
$0.0001
$1.0000
$1.0000
600
1,000,000
500,000
7,500,000
-
1,500,600
7,500,000
-
900,000
22 Jul 2014
1,224,746
22 Jul 2014
530,463
22 Jul 2014
58,507
22 Jul 2014
22 Jul 2014
112,500
14 Nov 2014 17,500,000
17 Nov 2014 2,500,000
17 Nov 2014 70,000,000
20 Nov 2014 (10,326,216)
20 Nov 2014 10,000,337
10 Dec 2014
16 Feb 2015
19 May 2015
4 Jun 2015
850,000
100,000
12,727,276
90,909
113,768,522
1,500,600
(1,119,597)
90
1,046,668
453,333
50,000
150,000
3,500,000
500,000
2,000,067
-
-
170,000
20,000
2,800,000
20,000
11,091,161
$0.0001
$0.8546
$0.8546
$0.8546
$1.3333
$0.2000
$0.2000
-
-
-
$0.2000
$0.2000
$0.2200
$0.2200
Ordinary shares have the right to receive dividends as declared, and, in the event of winding up the Company, to participate in
the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary
shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
(d) Earn-out Shares
On 20 November 2014, the Company (formerly RKS Consolidated Limited and referred to in this note as RKS) acquired 100%
of the issued capital of SkyFii Group Pty Ltd (SGPL). As part of the Acquisition Agreement entered into between RKS and the
shareholders of SGPL, the Company agreed that on or after the fifth business day following 16 March 2017, it will issue to those
shareholders who were shareholders of SGPL as at the acquisition date (SGPL Vendors), additional ordinary shares to the value
of the lesser of a) $30,000,000 or b) three times the Company’s gross revenue for the year ending 31 December 2016 minus
$13,500,000, at an issue price of $0.20 per share (Earn-out Shares).
The minimum number of Earn-out Shares which may be issued is nil, and the maximum number is 82,500,000.
37
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
19. Financial risk management
Financial risk management objectives
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk), credit risk and liquidity risk.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Risk
management policies are established to identify and analyse the risks faced by the Group to set appropriate risk limits and
controls, and to monitor risks and adhere to limits. Risk management is carried out by senior executives under policies approved
by the Board of Directors. These policies include identification and analysis of the risk exposure of the Group and appropriate
procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within the Group’s operating units.
The Group holds the following financial instruments:
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Total financial assets
Financial liabilities
Trade and other payables
Borrowings
Total financial liabilities
Note
8
9
11
15
17
Consolidated
2015
$
2014
$
2,684,548
169,292
114,265
2,968,105
33,175
200,485
22,000
255,660
414,920
-
414,920
442,555
453,333
895,888
The carrying value of the assets and liabilities disclosed in the table above closely approximates or equals their fair value. The
carrying amounts of trade receivables and trade and other payables are assumed to approximate their fair values due to their
short-term nature.
(a) Market risk
Foreign currency risk
Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
foreign exchange rates. The Group has an insignificant exposure to foreign currency risk as the overseas operations are in start-
up phase.
Interest rate risk
The Group is not exposed to any significant interest rate risk.
(b) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Group’s receivables from customers.
Other credit risk arises from cash and cash equivalents, deposits with banks and other financial institutions, security deposits,
other receivables and GST receivable from the ATO.
The maximum exposure to credit risk at the reporting date to recognised financial assets is 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. The Group does not hold any collateral.
Credit risk is managed by a risk assessment process for all customers and counterparties, which takes into account past
experience.
There have been no impairment losses recognised during the year (2014: nil).
(c) Liquidity risk
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, where possible, that it will always have sufficient liquidity to meet its liabilities when due.
Ultimate responsibility for liquidity management rests with the Directors. The Group ensures that, where possible, it has
sufficient cash on demand to meet expected net cash outflows, including the servicing of financial obligations; this excludes the
potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.
The Group manages liquidity risk by maintaining adequate cash reserves by continuously monitoring actual and forecast cash
flows and matching the maturity profiles of financial assets and liabilities.
Financing arrangements
The Group does not have any borrowing facilities in place at the reporting date.
38
SkyFii Limited 2015 Annual Report
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
Maturities of financial liabilities
The following table details the Group’s remaining contractual maturity for its financial instrument liabilities. The table has been
drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities
are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities
and therefore these totals may differ from their carrying amount in the statement of financial position.
1 year or less
$
1 to 2 years
$
2 to 5 years
$
Over 5 years
$
2015
Non-derivatives
Trade and other payables
2014
Non-derivatives
Trade and other payables
Borrowings
414,920
442,555
453,333
-
-
-
-
-
-
-
-
-
Trade and other payables are payable as and when they are due. The cash flows in the maturity analysis above are not expected
to occur significantly earlier than disclosed.
(d) Capital management
The Board’s aim is to maintain a strong capital base so as to maintain investor, creditor and market confidence to sustain future
development of the business and increase shareholder value. The Board ensures the Group has sufficient capital as required for
working capital purposes. There were no changes to the Group’s approach to capital management during the year. The Group is
not subject to externally imposed capital requirements.
20. Remuneration of auditors
During the year the following fees were paid for services provided by the auditor of the parent entity, its related practices and
non-related audit firms:
Hall Chadwick
Audit and review of financial reports
Taxation services
Total
21. Contingent liabilities
(a) Earn-out Shares
Consolidated
2015
$
40,342
36,000
76,342
2014
$
-
-
-
On 20 November 2014, the Company (formerly RKS Consolidated Limited and referred to in this note as RKS) acquired 100%
of the issued capital of SkyFii Group Pty Ltd (SGPL). As part of the Acquisition Agreement entered into between RKS and the
shareholders of SGPL, the Company agreed that on or after the fifth business day following 16 March 2017, it will issue to those
shareholders who were shareholders of SGPL as at the acquisition date (SGPL Vendors), additional ordinary shares to the value
of the lesser of a) $30,000,000 or b) three times the Company’s gross revenue for the year ending 31 December 2016 minus
$13,500,000, at an issue price of $0.20 per share (Earn-out Shares).
No value has been attributed to the Earn-out Shares at this stage as their value cannot accurately be measured and the
probability of this revenue hurdle being achieved at this early stage of the Company’s development is insufficiently certain.
(b) Other contingent liabilities
There are no other contingent liabilities as at 30 June 2015.
39
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
22. Commitments for expenditure
The Group has entered into a commercial lease for office property. Rentals paid under operating leases are charged to the
income statement on a straight line basis over the period of the lease.
Non-cancellable operating lease commitments
Future minimum rentals payable:
Not later than one year
Later than one year, not later than two years
Later than two years
Total operating lease commitments
Other contractual capital expenditure commitments
Estimated capital expenditure under firm contracts:
Less than one year
Later than one year
Total capital expenditure commitments
Total commitments for expenditure
23. Share based payments
Consolidated
2015
$
2014
$
12,227
-
-
12,227
3,878
-
3,878
118,382
12,227
-
130,609
-
33,710
-
33,710
16,105
164,319
Issue date
Creditor
Purpose
Valuation
No. of
shares1
Value per
share1
Total
$
Directors:
22 Jul 2014
10 Dec 2014
10 Dec 2014
10 Dec 2014
10 Dec 2014
Karibu Pty Ltd (a company
associated with W. Arthur)
G. Flowers
A. Dunlop
A. Johnson
J. Scott
Ordinary creditors:
22 Jul 2014
22 Jul 2014
22 Jul 2014
22 Jul 2014
22 Jul 2014
17 Nov 2014
Avenue C Pty Ltd
Jagafii Pty Ltd
R. McLaren
Ma Duck & Me Pty Ltd
K. McCabe
Chapmans Corporate
Advisory Pty Ltd
1001 Investments Pty Ltd
S3 Consortium Pty Ltd
M. Teperson
17 Nov 2014
16 Feb 2015
4 Jun 2015
Total
Note:
Services
Value of services
14,627
$0.8546
12,500
Director’s fees
Director’s fees
Director’s fees
Director’s fees
Value of services
Value of services
Value of services
Value of services
Services
Services
Advisory services
Advisory services
Advisory services
Capital raising services
Value of services
Value of services
Value of services
Value of services
Value of services
Value of services
100,000
250,000
250,000
250,000
21,940
21,940
37,500
37,500
37,500
1,250,000
$0.2000
$0.2000
$0.2000
$0.2000
$0.8546
$0.8546
$1.3333
$1.3333
$1.3333
$0.2000
Capital raising services
Services
Consulting services
Value of services
Value of services
Value of services
1,250,000
100,000
90,909
$0.2000
$0.2000
$0.2200
20,000
50,000
50,000
50,000
18,750
18,750
50,000
50,000
50,000
250,000
250,000
20,000
20,000
910,000
1. Prior to those shares issued on 17 November 2014, the number of shares refer to ordinary shares in SkyFii Group Pty Ltd,
being the parent entity at the time.
24. Related parties
(a) Parent and ultimate controlling party
SkyFii Limited became the parent and ultimate controlling party of the Group on 20 November 2014. Prior to that date the
parent and ultimate controlling party of the Group was SkyFii Group Pty Ltd.
(b) Subsidiaries
Interests in subsidiaries are set out in Note 27.
(c) Key management personnel compensation
Short-term employee benefits, including contractor fees
Share based employee benefits
Total benefits
40
Consolidated
2015
$
892,876
103,418
996,294
2014
$
431,667
-
431,667
SkyFii Limited 2015 Annual Report
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
Short-term employee benefits
These amounts include fees and benefits paid to Directors as well as all salary, paid leave benefits and fringe benefits awarded
to other KMP.
Share based employee benefits
These amounts represent the expense related to ordinary shares issued in lieu of payments for liabilities in cash as measured by
the fair value of the shares issued or liabilities extinguished.
Further information in relation to KMP remuneration can be found in the Remuneration Report.
(d) Payable transactions with directors and key management personnel
The aggregate value of payable transactions and outstanding balances relating to director and key management personnel and
entities over which they have control or significant influence were as follows:
KMP
Jason Martin
Anthony
Dunlop & Peter
Dykes
Wayne Arthur
& Ian Robinson
Related party
entity
Simple Machines
Pty Ltd
Chapmans
Corporate
Advisory Pty Ltd
SkyFii Pty Ltd
Transaction
Outsourced software development
services
Promoter shares issued in consideration
for corporate services and promotional
activities
Asset purchase of equipment and
intangible assets
Transaction value
Balance outstanding
2015
$
499,101
2014
$
480,349
2015
$
-
2014
$
115,000
250,000
-
-
74,662
-
-
-
-
The terms and conditions of the transactions with these entities were no more favourable than those available, or which might
reasonably be expected to be available, on similar transactions to non-key management personnel related entities on an arm’s
length basis.
(e) Receivable transactions with directors and key management personnel
At 30 June 3015 the receivables balance outstanding with directors and key management personnel was $8,150 (2014: $2,378)
relating to employee debit and credit card advances utilised for the sole purpose of supplier payments and business expenses.
25. Parent entity information
Set out below is information about the legal parent entity, SkyFii Limited (previously known as RKS Consolidated Limited).
Statement of comprehensive income
Loss after tax
Total comprehensive income
Statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Contributed equity
Reserves
Accumulated losses
Total equity
Contingent liabilities
Parent
2015
$
2014
$
(577,545)
(577,545)
(849,273)
(849,273)
6,171,271
6,171,271
63,026
63,026
43,145
43,145
320,831
320,831
6,108,245
40,877,749
234,000
(35,003,504)
(277,686)
33,909,273
234,000
(34,420,959)
6,108,245
(277,686)
Other than the contingent earn-out obligation, as discussed in Note 21, the parent entity had no contingent liabilities at 30 June
2015 and 30 June 2014.
Capital commitments – plant and equipment
The parent entity had no capital commitments for plant and equipment as at 30 June 2015 and 30 June 2014.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in Note 3.
41
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
26. Business combinations
On 20 November 2014, the Company (formerly RKS Consolidated Limited and referred to in this note as RKS) acquired 100%
of the issued capital of SkyFii Group Pty Ltd (SGPL), a retail focussed technology company that captures and utilises big data
to drive customer loyalty and sales for retailers. The acquisition was seen as an opportunity to use the existing listed company
structure of the Company and provide existing shareholders of RKS the opportunity to participate in the significant future
opportunities of SGPL.
The acquisition was achieved following the RKS 10 to 1 share consolidation by issuing 70,000,000 ordinary shares in RKS to
existing shareholders of SGPL. Following completion, the previous shareholders of RKS held 12.5% and shareholders of SGPL
held 87.5% of the Group respectively. As a consequence of this and other factors, for accounting purposes the acquisition is
accounted for as a reverse acquisition.
Consideration paid
Less:
Fair value of net assets at acquisition date
Goodwill
Fair value of net assets:
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Net assets
$
2,000,067
(92,774)
2,092,841
Carrying amount
$
2,862,846
500
2,863,346
2,956,120
2,956,120
(92,774)
The acquisition resulted in goodwill of $2,092,841 which has been written off in the year ended 30 June 2015. Goodwill
represents the value to SGPL of having an immediate ASX listed company status with all of the capital raising avenues available
to this type of company.
Receivables and payables have been included at their fair value. Directors were of the opinion that these were fully recoverable
and that no impairment of these was required.
Since the date of acquisition, RKS has contributed losses of $577,545 to the comprehensive loss of the Group. Had RKS been
part of the Group for the whole of the year, it would have contributed losses of $687,633 to the comprehensive loss of the
Group.
Acquisition costs of $443,931 have been expensed in the year. Capital raising costs of $973,072 associated with the acquisition
and associated public offering have been deducted from the amount of capital raised.
As part of the Acquisition Agreement entered into between RKS and the shareholders of SGPL, the Company agreed that on or
after the fifth business day following 16 March 2017, it will issue to those shareholders who were shareholders of SGPL as at the
acquisition date (SGPL Vendors), additional ordinary shares to the value of the lesser of a) $16,500,000 or b) three times the
Company’s gross revenue for the year ending 31 December 2016 minus $13,500,000, at an issue price of $0.20 per share (Earn-
out Shares).
No value has been attributed to the Earn-out Shares at this stage as their value cannot accurately be measured and the
probability of this revenue hurdle being achieved at this early stage of the Company’s development is insufficiently certain.
27. Interests in controlled entities
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described in Note 3:
Parent entity
SkyFii Limited
Country of Incorporation
Australia
Subsidiaries
SkyFii Group Pty Ltd
SkyFii International Pty Ltd
(incorporated 3 November 2014)
SkyFii Brasil Inteligência, Mídia e Tecnologia Mobile
Ltda. (incorporated 24 February 2015)
SkyFii South Africa (Pty) Ltd
(incorporated 29 July 2015)
Australia
Australia
Brazil
Republic of South Africa
SkyFii Group Pty Ltd became a wholly-owned subsidiary of SkyFii Limited on 20 November 2014.
Ownership interest
2015
2014
100%
100%
100%
100%
-
-
-
-
42
SkyFii Limited 2015 Annual Report
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
28. Events occurring after the reporting date
On 10 July 2015, the Company held a general meeting at which shareholders ratified and approved the allotment and issue of
12,727,276 ordinary shares at $0.22 per share to existing and new sophisticated investors which occurred on 19 May 2015 for
the purposes of Listing Rule 7.4 and the issue of 200,000 ordinary shares at $0.22 per share to a non-executive director, Gary
Flowers.
On 29 July 2015, the Company incorporated a wholly-owned subsidiary in the Republic of South Africa, SkyFii South Africa
(Pty) Ltd, for the purposes of conducting operations in that country.
On 31 July 2015, the Group entered into various commercial agreements for the leasing of new commercial office premises
expected to commence in October 2015. In addition to an agreement to lease commercial office property with a minimum lease
period of 2 years, the Group entered into an occupational license agreement with another party in order to sub-let a quarter of
the premises on back to back terms.
Other than the above matters, there are no other matters or circumstances that have arisen since 30 June 2015 that have
significantly affected, or may significantly affect:
•
•
•
the consolidated entity’s operations in the future financial years, or
the results of those operations in future financial years, or
the consolidated entity’s state of affairs in the future financial affairs.
29. Reconciliation of loss after tax to net cash from operating activities
Loss for the year
Investment cash flows included in comprehensive loss:
Payments for acquisition costs
Non-cash items in operating loss:
Depreciation and amortisation
Impairment of goodwill and domain names
Acquisition costs paid by RKS Consolidated Limited prior to acquisition
R&D tax incentive receivable
Share based payments
Changes in operating assets and liabilities:
Decrease / (increase) in trade and other receivables
Decrease / (increase) in prepayments
Decrease / (increase) in trade and other payables
Decrease / (increase) in provisions and employee benefits
Decrease / (increase) in deferred revenue
Decrease / (increase) in inventories
Decrease / (increase) in other assets
Net cash used in operating activities
Consolidated
2015
$
(4,789,482)
2014
$
(1,624,776)
443,931
-
10,903
2,157,841
344,882
(791,729)
235,000
517,958
(94,153)
(58,871)
(11,812)
88,770
(43,500)
(2,000)
831
-
-
(480,994)
-
(198,107)
(10,445)
442,555
39,749
-
-
-
(1,992,262)
(1,831,187)
43
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S
30. Earnings per share (EPS)
(a) Basic earnings per share
Basic EPS attributable to ordinary equity holders of the Company
(b) Diluted earnings per share
Diluted EPS attributable to ordinary equity holders of the Company
(c) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used in calculating basic EPS
Weighted average number of ordinary shares used in calculating diluted EPS
Consolidated
2015
Cents per share
2014
Cents per share
(7.1)
(26.4)
(7.1)
(26.4)
Number
67,579,606
67,579,606
Number
6,164,384
6,164,384
(d) Reconciliation of earnings used in calculating earnings per share
Loss attributable to the ordinary equity holders of the Company used in calculating basic EPS
$
(4,789,482)
$
(1,624,776)
44
SkyFii Limited 2015 Annual Report
Directors’ Declaration
In the Directors’ opinion
•
•
•
•
the attached financial statements and notes thereto comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes thereto comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board as described in Note 2 to the financial statements;
the attached financial statements and notes thereto give a true and fair view of the consolidated entity’s financial position as
at 30 June 2015 and of its performance for the year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable.
The Directors have been given the declarations required by section 259A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors made pursuant to section 295(5) of the Corporations Act 2001.
On behalf of the Directors
Gary Flowers
Chairman
21 August 2015
45
www.skyfii.com | /SkyFii | /company/skyfii Independent Auditor’s Report
SKYFII LIMITED
ACN 009 264 699
AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
SKYFII LIMITED AND CONTROLLED ENTITIES
Report on the Financial Report
We have audited the accompanying financial report of SkyFii Limited, which comprises the
consolidated statement of financial position as at 30 June 2015, 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, notes comprising a
summary of significant accounting policies and other explanatory information and the directors’
declaration of the consolidated entity comprising the company and the entities it controlled at
the year’s end or from time to time during the financial year.
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 is free from material misstatement, whether
due to fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard
AASB 101: Presentation of Financial Statements, that the financial statements comply with
International Financial Reporting Standards (IFRS).
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards. Those standards require
that we comply with relevant ethical requirements relating to audit engagements and plan
and perform the audit to obtain reasonable assurance whether the financial report is free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s judgement,
including the assessment of the risks of material misstatement of the financial report, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation and fair presentation of the financial report in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the
Corporations Act 2001.
46
SkyFii Limited 2015 Annual Report I N D E P E N D E N T A U D I T O R ’ S R E P O R T
Auditor’s Opinion
In our opinion:
(a) the financial report of SkyFii Limited is in accordance with the Corporations Act 2001,
including:
i. giving a true and fair view of the consolidated entity’s financial position as at 30 June
2015 and of its performance for the year ended on that date; and
ii. complying with Australian Accounting Standards and the Corporations Regulations
2001; and
(b) the financial report also complies with International Financial Reporting Standards as
disclosed in Note 2.
Emphasis of Matter
Without modifying our opinion, we draw attention to Note 2(e) in the financial report which
indicates that the Group has incurred a net loss after tax of $4,789,482 and net cash outflows
from operating activities of $1,992,262. These conditions, along with other matters as set
forth in Note 2(e) indicate the existence of a material uncertainty that may cast significant
doubt about the company’s ability to continue as a going concern and therefore, the
company may be unable to realise its assets and discharge its liabilities in the normal course
of business and at the amounts stated in the financial report.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 14 to 17 of the Directors’
Report for the year ended 30 June 2015. The Directors of the Company are responsible for
the preparation and presentation of the Remuneration Report in accordance with s 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.
Auditor’s Opinion
In our opinion the Remuneration Report of SkyFii Limited for the year ended 30 June 2015
complies with s 300A of the Corporations Act 2001.
HALL CHADWICK
Level 40, 2 Park Street
SYDNEY NSW 2000
GRAHAM WEBB
Partner
Dated: 21 August 2015
47
www.skyfii.com | /SkyFii | /company/skyfii Additional ASX Information
Use of cash & cash equivalents
In accordance with ASX Listing Rule 4.10.19, the Board has determined that the Company has used the cash and equivalents
that it had at the time of its re-admission to the ASX in a way consistent with its business objectives, from the period of its re-
admission to the ASX on 21 November 2014 to 30 June 2015.
Shareholder information
Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in this
report. This additional information was applicable as at 14 August 2015.
Substantial shareholders
The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations Act
are:
Substantial shareholder
Birketu Pty Ltd
Avenue C Pty Ltd
Jagafii Pty Ltd
Karibu Pty Ltd
Bonduffmex Pty Ltd
Montella Investments Pty Ltd
Shanderlay Investments Pty Ltd
Top 20 shareholders as at 14 August 2015
#
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Name
Jagafii Pty Ltd
Avenue C Pty Ltd
Birketu Pty Ltd
Karibu Pty Ltd
Bonduffmex Pty Ltd
Montellay Investments Pty Ltd
Shanderlay Investments Pty Ltd
Alterac Pty Ltd
Yellow Monkey Holdings Pty Ltd
Devero Holdings Pty Ltd
JP Morgan Nominees Australia Limited
Mr Marco Betelli
Adgemis Holdings Pty Ltd
Mr Martin Eric Robinson
Bantry Holdings Pty Ltd
Capella Trust Investments Limited
Chapmans Corporated Advisory Pty Ltd
1001 Investments Pty Ltd
The Chimes Private Foundation
The Elsie Cameron Foundation
Total top 20 holders
Total remaining holders
Distribution of ordinary shareholders as at 14 August 2015
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Date of notice
25-May-15
17-Apr-15
17-Apr-15
21-Nov-14
17-Apr-15
17-Apr-15
17-Apr-15
Number of shares
10,784,284
12,123,743
11,439,243
8,699,836
7,956,690
5,737,514
5,737,514
Number of
ordinary shares held
13,711,971
13,370,107
10,784,284
8,819,836
7,956,690
5,964,787
5,737,514
3,783,055
3,158,950
2,941,546
2,732,459
1,983,055
1,503,036
1,452,500
1,378,410
1,335,000
1,250,000
1,250,000
1,222,100
1,136,364
91,471,664
22,296,858
% of
ordinary shares held
12.05%
11.75%
9.48%
7.75%
6.99%
5.24%
5.04%
3.33%
2.78%
2.59%
2.40%
1.74%
1.32%
1.28%
1.21%
1.17%
1.10%
1.10%
1.07%
1.00%
80.40%
19.60%
Number of shareholders
641
75
60
186
85
Number of shares
7,044
263,180
503,546
7,114,676
105,880,076
1,047
113,768,522
At the closing market price of $0.18 per share on 14 August 2015, there were 664 shareholders with less than a marketable
parcel of shares ($500).
48
SkyFii Limited 2015 Annual Report Restricted securities as at 14 August 2015
There are ordinary shares on issue that are subject to escrow in accordance with the ASX Listing Rules. The table below sets
out the number of shares subject to escrow together with the escrow end dates:
A D D I T I O N A L A S X I N F O R M A T I O N
SGPL Vendor shares subject to escrow1
Promotor shares subject to escrow2
Total shares subject to voluntary escrow
Notes:
1.
Shares issued as consideration to the SGPL Vendors.
End date(s)
21 Nov 2015
21 Nov 2016
21 Nov 2015
Number of shares
61,300,164
8,699,836
2,500,000
72,500,000
2. Shares issued as part of consideration for the provision of corporate services in relation to the capital raising under the
Replacement Prospectus dated 15 October 2014 and associated promotional activities.
3.
In addition to the above ordinary shares that are subject to escrow in accordance with the ASX Listing Rules, 425,000
shares issued to Directors on 10 December 2014 in lieu of cash payment of their annual Director fees remain under
voluntary trading restrictions as between the Company and each relevant Director. Of those shares which remain under
voluntary trading restrictions, 212,500 shares will become free trading each on 11 September 2015 and 11 December 2015.
Top 21 shareholders subject to escrow as at 14 August 2015
#
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Name
Avenue C Pty Ltd
Jagafii Pty Ltd
Karibu Pty Ltd
Bonduffmex Pty Ltd
Montellay Investments Pty Ltd
Shanderlay Investments Pty Ltd
Birketu Pty Ltd
Yellow Monkey Holdings Pty Ltd
Devero Holdings Pty Ltd
Mr Marco Betelli
Alterac Pty Ltd
Chapmans Corporated Advisory Pty Ltd
1001 Investments Pty Ltd
Bmr Securities Pty Ltd
Glenmaress Pty Ltd
Ms Alice Klara Senn
The Chimes Private Foundation
Ms Rachel Scott
Mr Richard McClaren
Ma Duck & Me Pty Ltd
Ms Kerry McCabe
Top 21 shareholders subject to escrow
Total shares subject to escrow
Number of
ordinary shares held
11,623,743
11,439,243
8,699,836
7,956,690
5,737,514
5,737,514
3,966,102
3,158,950
2,941,546
1,983,055
1,983,055
1,250,000
1,250,000
877,232
846,144
794,618
472,100
363,150
254,207
254,207
254,207
71,843,113
72,500,000
%
16.03%
15.78%
12.00%
10.98%
7.91%
7.91%
5.47%
4.36%
4.06%
2.74%
2.74%
1.72%
1.72%
1.21%
1.17%
1.10%
0.65%
0.50%
0.35%
0.35%
0.35%
99.09%
Voting rights
The voting rights attaching to ordinary shares, set out in the Company’s Constitution are:
(a) at meetings of members, each member is entitled to vote in person or by proxy, attorney or representative; and
(b) on a show of hands, every person present who is a member has one vote, and on a poll every member present has a vote
for each fully paid share owned.
There are no voting rights attached to unlisted ordinary shares or unlisted options, voting rights will be attached to unlisted
ordinary shares once issued and to options upon exercise.
On-market Buy Back
There is no current on-market buy back.
49
www.skyfii.com | /SkyFii | /company/skyfii Corporate Directory
Company Directors
Mr Gary Flowers
Chairman
Mr Wayne Arthur
Managing Director
Mr Anthony Dunlop
Non-Executive Director
Mr Andrew Johnson
Non-Executive Director
Mr James Scott
Non-Executive Director
Mr Chris Taylor
Non-Executive Director
Company Secretary
Mr Heath Roberts
Registered Office
Suite 3 Level 2
118 Devonshire Street
Surry Hills NSW 2010
Telephone: +61 2 8188 1188
Share Registry
Boardroom Limited
Level 7
207 Kent Street
Sydney NSW 2000
Auditors
Hall Chadwick
Level 40
2 Park Street
Sydney NSW 2000
Securities exchange listing
SkyFii Limited shares are listed on the Australian Securities Exchange (Listing code: SKF)
Former Name
RKS Consolidated Limited changed its name to SkyFii Limited on 17 November 2014.
Website
www.skyfii.com
50
SkyFii Limited 2015 Annual Report