annual
report 2018
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annual report 2018 For personal use only 2
Skyfii Limited
ABN 20 009 264 699
Financial report for the year ended 30 June 2018
For personal use only Table of Contents
Chairman & CEO address
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 annual report 2018 For personal use only Chairman & CEO address
Dear Shareholders,
We are pleased to present Skyfii Limited’s (ASX: SKF) Annual Report for the year ended 30 June 2018 and are delighted to foreshadow what
we expect will be an exceptionally strong financial performance and outlook for Skyfii in FY2019.
Here are some of the key achievements from FY2018:
• Operating revenue growth of 92% to $6.17million
•
•
•
Recurring revenue growth of 68% to $3.4 million
First positive EBITDA of $0.067 million
52% increase in share price during the reporting period
Demonstrating consistent performance
In FY2018, the management team were tasked with driving the business forward on all fronts to achieve our stated FY2018 objective of
accelerating revenue. Following the execution of numerous new customer contracts, completion of two asset acquisitions and efforts to
broaden our service offering to existing and new customers, Skyfii almost doubled its business size in revenue terms to $6.17 million from
$3.2 million, while stringently maintaining its cost base, set against tight internal budgetary targets. The result has been delivery of a maiden
positive EBITDA.
“The market can place confidence in the Skyfii management team’s ability to deliver on our aspirations to lead this industry which shows enormous
growth potential.
We have demonstrated consistent annual delivery of strong revenue growth for some years, and in FY2018, showed profitable growth for the first
time, in conjunction with scaling the business. I commend the entire team for this terrific result, and in particular, call out Finance Director, Koreen
White for her tireless efforts throughout the period,” commented Skyfii’s Chairman, James Scott.
New customers and acquisitions driving growth
Operating a lean team of 35 employees, we work hand in hand with select channel partners and hardware vendors around the globe, to
drive cost effective scale and reach. Through these relationships with quality partners such as Aruba Networks, we successfully secured
material new contract wins during the year with high profile brands, including Precision Group, Lewis Land Group, Versace, Nuffield Health,
HSBC and Nando’s.
These contracts are centred around our Software as a Service (SaaS) data analytics and marketing services ‘IO platform’, which delivers long
term recurring revenues through a mix of products and services.
Two scrip-based asset acquisitions complemented our top-line growth during FY2018.
Wicoms was acquired in July 2017 with a mostly European footprint of large shopping centres. The Wicoms acquisition represented a
significantly de-risked opportunity to acquire and novate customer contracts and associated footprint, while being immediately value
accretive to Skyfii. So too was Causely, acquired in February 2018 which has allowed us to build a strategic foothold in the US market while
facilitating swift entry into new verticals of Gyms, Churches and access to the Quick Service Restaurants.
“Skyfii’s first two acquisitions illustrate our ability to not only identify attractive assets in the market, but to cost effectively integrate them into the
Skyfii business for significant gains. In both cases, we were able to enhance the experience of acquired customers by making the Skyfii ‘IO platform’
and consulting services available to them, which has led to a marked increase in the billing value of those customers,” commented Skyfii’s CEO,
Wayne Arthur.
Services offering expansion
Strategically, our services offering expanded and was solidified during the FY2018 year. Our ‘IO platform’ now coexists alongside Data
Consulting Services and Marketing Services provisions that have already demonstrated revenue contributions. The enhanced offering
leverages insights and drives tangible value around the use of data.
Data Consulting Services was conceived following customer demand which originated in the real estate vertical and is increasingly being
adopted by our customers in other sectors. Skyfii’s Head of Data, JP Talbot, has been instrumental in growing the data science team and
capability.
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For personal use only One of our proudest achievements is that Skyfii has experienced zero enterprise customer contract churn, with many customer contracts
actually growing in revenue terms through their use of additional Skyfii products and services.
We believe two key factors are responsible for this outcome, our exceptionally competitive service offering alongside our nimble in-house
product development team who are highly responsive to customers’ needs. Our ‘IO platform’ continues to be enhanced both in terms of
new data source ingestion and richer analytics capability. Second, our Data Consulting Services and Marketing Services offering is proving
to be a highly sought after wraparound service to the ‘IO platform’. As a result, our depth of commercial engagement has increased
markedly during this past year, and is noticeably differentiated from our peers.
Data security
During the year, Skyfii adopted the European conceived General Data Protection Regulation (GDPR) data privacy guideline across all of its
operations globally. Foreseeing the emergence of governance around data privacy and security, the Board took a front foot approach and
established an internal working group to develop compliance well ahead of the European standard taking effect in May of this year. As a
result, Skyfii is positioned as a trustworthy and reliable data partner for our customers and prospects.
Entering a new phase of growth
A solid pipeline and strong existing customer and partner relationships underpin our belief that the strong growth trajectory delivered to
date will continue into FY2019. Careful management of capital will remain important to the Company’s achievement of on-going top line
growth, while we remain focused on maintaining our profitability and continuing to deliver value from our resource base.
Skyfii is extremely well poised for continued and accelerated growth and no longer requires capital injections to sustain its current operating
level. In addition, FY2019 leverages a strong baseline of multiyear contracted revenues established in prior years, with over $5.9 million
already booked into the year ahead.
Following a consistent and demonstrated track record, Skyfii expects to drive for further organic business growth and will continue to
evaluate accretive acquisition growth prospects in FY2019.
On behalf of our fellow Directors, we thank all of our shareholders – old and new, and particularly those who have backed the business
since its infancy.
Sincerely,
James Scott
Wayne Arthur
Chairman and Non-Executive Director
CEO and Executive Director
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SKYFII LIMITED annual report 2018 For personal use only
Review of Operations
Skyfii Business Model
Skyfii (or the Company) is a data analytics and marketing services
technology company providing a cloud-based SaaS (Software as a
Service) solution called ‘IO’. The IO platform is comprised of three
core product modules; IO Connect (data collection), IO Insight
(data analytics) and IO Engage (marketing tools). The IO platform is
charged on a monthly recurring revenue basis, dependent upon the
subscription level and services provisioned. The delivery of the IO
platform services are typically contracted on 1, 3 and 5 year terms.
In addition to the IO platform, Skyfii provides a suite of professional
services through its Data Consulting Services and Marketing Services
teams. These services assist the company to acquire, retain and grow
our diversified customer base. Our service offering acts as a key
differentiator in the pre and post sales cycle and underpins our go-to-
market strategy in key regions.
Since the company was founded in 2012, Skyfii has grown to provide
services to over 4,500 venues, culminating in the collection of +18.7
million unique registered users by our customers.
During FY2018, the company introduced new categorisations of how it generates revenues, defined as recurring, non-recurring and services
revenues.
Recurring Revenues
Services Revenues
The Company’s core revenue base is derived from subscriptions to
its SaaS IO platform, comprised of three modules. Modules can be
purchased packaged, as a combination or in isolation.
Non-recurring Revenues
Non-recurring revenues are one-off revenues generated from the
deployment of hardware and infrastructure, implementations and
upfront setup fees relating the deployment of wireless and people
counting infrastructure in physical venues, which are the precursor
and underpin recurring revenues generated from subscriptions to
the IO platform.
Services revenues are revenues generated from professional
services extended to our growing customer base. Revenues are
generated from the payment of projects undertaken by both
the Data Consultancy and Marketing Services team and includes
revenues generated
from the Causely business. Revenues
generated from services are received as either recurring or fixed fee
projects and typically support the sell-through of the IO platform.
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FY18 Key Highlights
Financial highlights:
• First positive EBITDA at $0.067 million
•
Operating revenue growth of 92% to $6.17m, when compared
to FY2017 revenues of $3.2 million
• Recurring revenue growth of 68% to $3.4m
•
•
•
•
Recurring revenues of $1 million+ per quarter and continuing to
build
+4,500 venues now deployed across our global footprint of
customers
Annualised reduction of $1 million in operating expenditure
when compared to FY2017
254% reduction in net cashburn year on year to an average of
$130,000 per month in FY2018 from $330,000 per month in
FY2017
Operating highlights:
•
•
Successful completion of 2 x all scrip value accretive asset
acquisitions
Significant growth in a diversified revenue offering, including
services revenues
• Zero enterprise customer contract churn during the period
•
Successful growth within new target verticals of Healthcare,
Convenience, Cultural centres, Quick service restaurants
Acquisitions
Wicoms Wireless, United Kingdom
In July 2017, Skyfii acquired the portfolio of customers of Wicoms
Wireless, a UK based Wifi Technology platform. The acquisition
of Wicoms portfolio of customers saw the Company expand its
international retail sector footprint within key overseas geographies
of North America and Europe. The asset acquisition enabled
Skyfii to leverage an existing revenue generating footprint and
subsequently upsell the Wicoms’ retail mall customers.
Following the announcement of the Wicoms Wireless asset
acquisition, Skyfii reached an agreement to deliver their marquee
client - McArthurGlen Designer Outlets, a greater level of data
analytics and marketing services than what was provisioned under
Wicoms’ own technology platform.
The new agreement signed with McArthurGlen represented a
significant multiple on the value of the scrip only acquisition of
Wicoms by Skyfii, and also delivers additional value to the shopping
centre group. The value of the new three year contract is greater
than three times the value of the original Wicoms acquisition, which
was paid using $247,000 worth of Skyfii ordinary shares (scrip).
Causely, North America
In February 2018, Skyfii acquired assets from the North American
based marketing services company Causely, a loyalty and charitable
rewards marketing platform, which enables the SME venues
to contribute to various charitable causes via their customers
check-ins to social media.
With an existing customer portfolio of over 1,850 venues, including
600 religious congregations, 1000+ gym and wellness venues and a
progressed pipeline of quick service restaurant (QSR) groups - the
acquisition is providing a significant opportunity for Skyfii to upsell
its existing SaaS IO platform services to the Causely customer
portfolio.
The deal included its portfolio of existing contracts in an all scrip
transaction, issuing 25 million new ordinary shares in Skyfii Limited
at $0.14 per share, valuing the transaction at AU$3.5 million. As part
of the acquisition by Skyfii, the sale of the asset by the incumbent
Causely investors (sellers) has an underwriting agreement in place
to guarantee a minimum net profit (defined as being revenue less
costs, before taxes) of US$1.625 million over a three year period.
Services Development
Data Consulting Services and Marketing Services
As a critical component of Skyfii’s go to market strategy, the Data
Consulting Services and Marketing Services teams’ enable upsell
and sell-through opportunities, with the IO platform not required
for engagement. These teams continue to find growing success
amongst existing and new clients, working closely with a number of
Skyfii’s major retail property clients domestically and internationally.
Projects undertaken by Skyfii’s Data Consulting Services or
Marketing Services team occur as either a once-off or retainer
based (recurring revenues) engagement. The teams work to
support our customers in both strategic and operational decision
making needed to improve venue performance. Project examples
undertaken by the team include, data strategy consultation, retailer
performance assessments, audience segmentation, campaign
optimisation and delivering data-driven marketing strategies.
Revenues generated from Data Consulting Services and Marketing
Services, in the June quarter were $746k, up 33% on the previous
quarter, positively influenced by the integration of the Causely
business
the period
(consolidated from February 2018). During FY2018, Skyfii generated
$1.4m in services revenue.
(marketing services), acquired during
Channel Partners
A core focus for Skyfii’s global sales strategy is to sell our suite of
product and services via strategic channels partners. This allows the
business to scale its salesforce and build its reach cost effectively.
The company places importance on ensuring it identifies and
recruits the right partners within market.
Channel partners are categorised as follows in order of strategic
priority:
Solution partners:
Solution partners enable delivery of Skyfii’s solutions or increase
our capabilities using a “better together” go-to-market approach.
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SKYFII LIMITED annual report 2018 For personal use only Review of Operations continued
Managed service providers (MSPs):
MSPs purchase direct from Skyfii, retain title and provide a fully
managed solution to customers that may also be bundled with a
managed WiFi solution (using a third party WiFi provider). MSPs
can provide critical go-to-market capabilities such as technical
assistance centre (TAC) support, managed network operations
centres (NOC), proof of concept support and enterprise customer
deployment capabilities.
Value added resellers (VARs):
VARs provide a route to market for SMB opportunities. They
provide varying degrees of professional services (e.g. design,
installation, integration) but many have limited capabilities to
provide NOC and TAC support services.
During the year Skyfii welcomed a number of new channel
partners, including but not limited to:
Dimension Data (South Africa)
Dimension Data are a global systems integrator and manager
service provider for hybrid IT. Dimension Data offer consulting,
support and technical services to enhance digital business.
Telcomms Multimedia Solutions (Italy)
Telcomms are a value-added distributor of solutions focused on
Broadband Wireless Access and backhauling technologies.
AM Networks (United Kingdom)
AM Networks are an accredited IT service provider, AM Networks
is a United Kingdom based business providing services such as
managed IT, networking, cabling and cloud IT solutions.
Ultima (United Kingdom)
Ultima are a United Kingdom based reseller, providing IT solutions
and managed services. In 2017 Ultima was awarded CRN’s Reseller
of the Year.
Acuative (USA)
Founded in 1984, Acuative are an American based reseller and
managed service provider.
Unified Technologies (USA)
Unified Technologies is a communications technology company
and managed service provider with locations in Louisville and
Lexington, KY.
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New Verticals
The Company continued to successfully grow its addressable
market during FY2018 - aligning with the Company’s announced
strategy to extend its reach into new verticals. This resulted in a
number of new contract wins within, the petrol convenience,
health and wellness, cultural centres (museums), hospital, financial
services and grocery and quick service restaurant (QSR) verticals.
In addition to growing its addressable market , Skyfii continued to
consolidate its position as the leading provider to the retail property
industry in Australia, highlighted by a number of new contract wins
within the industry during FY2018.
New Material Customer Contracts
A list of announced contracts during FY2018 can be found below,
however, please note this list is non-exhaustive and does not reflect
the entirety of contracts secured during FY2018.
Aventus Property Group - Australia
A three year contract was signed with Aventus Property Group
to deploy the ‘IO’ platform services across an initial four Aventus
Shopping centres. The signed contract will provide Aventus access
to Skyfii’s ‘IO Connect’ and ‘IO Insight’ products over three year
contract terms. The signed contract represents another successful
execution in the retail property vertical for Skyfii, reinforcing the
Company’s position as a leading service provider to the Australian
retail industry.
McArthurGlen Designer Outlets - UK & Europe (announced as
Major Shopping Centre Group, 25th November 2017)
Following the asset acquisition of Wicoms Wireless, Skyfii acquired
contracts to deliver services to Wicoms’ portfolio of customers
including McArthurGlen Designer Outlets. Deploying across 22
shopping centres, the signed contract value is greater than three
times the value of the original Wicoms acquisition, which was paid
using $247,000 worth of Skyfii scrip. Skyfii’s Data Consulting Services
has been contracted across the term of the agreement.
Leading Supermarket Chain - Italy
As a five year contract term across 295 supermarkets, the signed
contract with the leading supermarket chain marks the first contract
in the Italian market. The contract replaces a former incumbent and
was won in partnership with an Italian distributor, Telcomms and
their value added partner, Tecnosistemi a strategic partner for the
region.
Skyfii signs Master Services Agreement with HSBC, Australia
(16th of January 2018)
Representing Skyfii’s first customer in the Banking and Financial
sector, the Master Services Agreement (MSA) with HSBC, provisions
the deployment of Skyfii’s entire suite of ‘IO platform’ services
across HSBC’s entire Australian branch network, on a three-year
contract term.
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Skyfii signs contract with Nuffield Health, United Kingdom
(28th of March 2018)
Nuffield Health operate 31 hospitals and 111 Health and Wellbeing
gyms across the United Kingdom. The three year contract will see
the deployment of Skyfii’s IO Connect and IO Insight solutions within
an initial 70 venues across the Nuffield portfolio. The contract was
delivered in partnership with infrastructure and security company
Ampito Group.
Nando’s Australia and Skyfii Sign Multi-year Contract
(19th of June 2018)
Skyfii signed a Master Services Agreement to cover Australian
corporate owned and franchised owned restaurants. The initial
contract will provision access to ‘IO Connect’ and ‘IO Insight’ on a
two-year contract for Nando’s 120 Australian corporate owned
restaurants, with an option to extend services to an additional 100
franchise owned restaurants.
Skyfii Signs Multi-year contract with Precision Group,
Australia (11th of April 2018)
The Precision Group signed a three year contract term for the
deployment of Skyfii’s full suite of ‘IO platform’ services across five
shopping centres. In addition to subscribing to the IO platform
services, Precision Group have provisioned Marketing Services to
accelerate and support the application of their digital and data
strategy, a core focus for the organisation’s long term competitive
advantage.
Skyfii Delivers Smart Cities Solution to Covington, USA
(26th of June 2018)
Following initial success with the city of Cincinnati, Skyfii and
Cincinnati Bell will deliver a Smart Cities solution to Covington,
Kentucky, USA. The three-year agreement will see Skyfii provide
a local area marketing and communications platform for events,
advertising, and business to promote their good and services
throughout Covington central business district.
Key operating highlights
Skyfii Signs Multi-year contract with Lewis Land Group,
Australia (18th of April 2018)
Skyfii has signed a three year contract with Lewis Land Group. Lewis
Land Group own two large open plan shopping centres, Harbour
Town Adelaide and Harbour Town Gold Coast that have been
heralded by the the Australian Tourism Awards for excellence in
specialised tourism services.
Skyfii Signs Contract with Luxury Fashion Brand Versace
(15th of May 2018)
The agreement includes Skyfii ‘IO Connect’ product across 45
Versace retail venues in Europe on an initial one year contract,
replacing an incumbent provider. Upon completion of the initial
12-month contract, Versace has expressed their intent to move to
a multi-year contract term.
Skyfii Doubles Deployment with Nuffield Health in the UK
(17th of May 2018)
Having already successfully contracted Nuffield Health for the
deployment of ‘IO platform’ services across 70 venues, the contract
extension added an additional 72 sites to the agreement, taking the
total number of hospital and gym venues deployed to 142 across
the UK.
Skyfii Signs Leading Service Station Group in Italy
(13th of June of 2018)
Representing Skyfii’s first customer in the petrol convenience retail
vertical, the signed contract with the Italian national service station
group, will see Skyfii deploy its services across 210 venues.
The contract is being delivered in partnership with Skyfii’s Italian
based distributor, Telcomms and system integrator, Tecnosistemi -
reseller of Skyfii’s products and services across Europe.
Total registered user base increased by +12.6% qoq
from 16.6 million to 18.7 million
Quarterly customer visits increased by 13.3% qoq
from 188 million to 213 million.
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SKYFII LIMITED annual report 2018 For personal use only Review of Operations continued
Existing Customer Contract Renewal
In addition to the new contracts signed in FY2018 and the growth
into new verticals, Skyfii also boasts an extremely high retention
rate, which is demonstrated by contract renewals of its existing
customer base.
Overview of financial performance
The Company delivered a full year FY2018 total operating revenues
of $6.17m, representing a 92% improvement when compared to
FY2017. This places the Company in a very strong financial position
for FY2019, with additional highlights including:
The GPT Group (Australia)
One of Skyfii’s first enterprise customers, originally contracted
in 2015, The GPT Group renewed its long-term Master Services
Agreement (MSA) with Skyfii across 18 of GPT Group’s retail and
commercial premises for a further three years during the quarter.
The agreement will broaden Skyfii’s scope of work, including the
provision of Data Consultancy Services, in addition to the previously
provided full suite of analytics and marketing services provided
through the ‘IO’ platform.
The GPT Group is one of the largest diversified property groups and
a top 50 ASX listed company by market capitalisation. GPT owns
and manages a $20 billion portfolio of office, logistics, business
parks and prime shopping centres across Australia.
•
•
•
•
+4,500 venues now deployed across our global footprint of
customers
Annualised reduction of $1.0m in operating expenditure when
compared to FY2017
A 254% reduction in net cashburn year on year to an average of
$130k per month in FY2018 from $330k per month in FY2017
Quarterly recurring revenue run rate in final quarter of FY2018
(Q4 FY2018) of $1 million
The growth in revenue is the result of the Company’s focus on
delivering high margin, multi-year, recurring revenue contracts
and growth in our services offering to our customer base, both
domestically and internationally across a growing number of
industry verticals.
The Company has also benefited from the acquisition of Wicoms
Wireless (July 2017) in the United Kingdom and the more recent
acquisition of Causely in North America (Feb 2018) with both
acquisitions having delivered income accretive results for the
Company.
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Product Development
The product underwent significant product research and
development within FY2018. Development has focused on the
following key areas:
Outlook for FY19 and beyond
Following a very strong year of financial results in FY2018, Skyfii
enters the FY2019 year with $5.9m in contracted revenues that will
be recognised over the FY2019 year.
GDPR
The platform was modified to support the EU based privacy
legislation, GDPR. This includes revised privacy policy, data retention
practices and data-subject self service portal.
Omni-Channel Campaign Tools
The Skyfii IO Engage module was enhanced to deliver targeted
campaigns using more sophisticated triggering rules and third
party channels.
Vendor Support
Skyfii continued its support of data category and vendor agnostic
sources with the introduction of new Wi-Fi, 2D / 3D Camera, CRM
and SMS providers.
Data Privacy
Skyfii treats data protection, privacy and security very seriously.
How data is collected, stored and used is of the utmost importance
to our business, including supporting our customers’ compliance
with the General Data Protection Regulation (GDPR).
As part of this continued commitment to data privacy, Skyfii
ensured its compliance with GDPR, which came into effect on the
25th May 2018.
Skyfii also takes a number of steps to ensure our data remains
secure at every stage. This includes storing data securely in ISO
27001, SOC III, PCI DSS certified data centres. Data is kept within
jurisdictional boundaries. Data is transmitted and stored using
multiple levels of encryption that enforce the industry’s most secure
algorithms, such as 256 bit AES.
In addition to the IO platform recurring revenues, there is a very
strong undercurrent of services revenues, which continue to
supplement and support the Company’s IO platform sales and
provide a clear differentiator for Skyfii globally.
We expect Skyfii’s international markets to continue to deliver
strong growth, following an increase in reported contracts from
international operations in FY2018, across a growing number of
industry verticals. Skyfii’s network of channel partners and resellers
continues to grow, particularly in our international operations,
which is allowing the Company to continue delivering new business
whilst running capital prudent operations.
The Company expects to further consolidate its market leading
position within the ANZ retail property vertical and expects to
see an increased revenue contribution from its international
operations. In the US, following a year of building awareness and
establishing a credible presence in the North America region, the
Company predicts strong traction in the region during the mid-part
of FY2019.
The Company continues to focus efforts on building long term,
sustainable growth within
in FY2019,
anticipating another very strong year of accelerated topline revenue
growth, with an emphasis on investing for top line growth.
its organic business
In addition to the underlying organic growth potential for Skyfii in
FY2019, the Company will continue to evaluate accretive acquisition
growth prospects.
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SKYFII LIMITED annual report 2018 For personal use only Directors’ Report
Your Directors submit the financial report of Skyfii Limited (Skyfii or the Company) for the year ended 30 June 2018. In order to comply
with the provisions of the Corporations Act 2001, the Directors report as follows.
Directors
The names and particulars of the Directors of the Company during or since the end of the financial year (Directors) are:
Name, independence
status and qualifications
Experience, interests in shares,
special responsibilities and other directorships
James Scott
Independent Non-Executive
Chairman from 21 April 2016..
• Mr Scott has 22 years’ experience in digital technology, network and IT business, including network
computing, server virtualisation, digital enablement and mobility solutions. He is Managing Director
at Accenture Digital Australia and New Zealand. In 2004 Mr Scott also held the position of Partner &
Managing Director APAC at Accenture.
Independent Non-Executive
Director until 20 April 2016
(appointed 20 November
2014)
• Prior to Mr Scott’s current position at Accenture. Mr Scott was a Partner in KPMG’s Business
Performance and Technology division and Group Executive Director of Technology & Innovation at
Seven Group Holdings.
• Member of the Audit and Risk Committee and Member of the Nomination and Remuneration
BEng. (Hons)
FIE Aust
CP Eng
GAICD
Andrew Johnson
Independent Non-Executive
Director (appointed 27
November 2014)
BComm., M Sc.
Committee.
• Holds a relevant interest in 3,007,646 shares and 3,250,000 options over an equivalent number of
unissued shares.
• No other listed company directorships.
• Mr Johnson, a highly experienced and successful telecommunications industry executive, is currently
Chairman of Kumul Telikom Holdings Ltd, a telecommunications company in South Pacific region and
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.
• Member of the Nomination and Remuneration Committee and Member (Chairman) of the Audit and
Risk Committee.
• Holds a relevant interest in 3,357,869 shares and 1,750,000 options over an equivalent number of
unissued shares.
• No other listed company directorships.
Shaun Bonett
• Mr Bonett is the founder and CEO of Precision Group, one of Australia and New Zealand’s most
Independent Non-Executive
Director (appointed 22
November 2017)
successful private property investment companies. He brings an exceptional wealth of experience to
the Skyfii board from not only the retail and property sector, but also through his extensive experience
in working with the finance sector, including the Chinese banking sector, particularly with the Bank of
China.
• Member (Chairman) of the Nomination and Remuneration Committee and Member of the Audit and
Risk Committee
• Holds a relevant interest in 22,015,874 shares as Precision Group Pty Ltd
• Listed company directorships at iSelect Independent Non-Executive Director
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For personal use only
Name, independence
status and qualifications
Experience, interests in shares,
special responsibilities and other directorships
Lincoln Brown
Independent Non-Executive
Director (appointed 27 April
2018)
• Mr Brown, is the founder and chairman of Causley and a sophisticated technology entrepreneur who
recently sold his mobile technology business to Zynga in a very successful exit. He brings expertise in
mobile tech, data science and machine learning and a wealth of US based contacts to the Skyfii board
and will assist in Skyfii’s North America expansion.
• Holds a relevant interest in nil shares
• No other listed company directorships.
Wayne Arthur
• Mr Arthur, a co-founder of Skyfii, built a long standing career in the outdoor media sector in senior
Chief Executive Officer/
Executive Director (appointed
20 November 2014)
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.
• Holds a relevant interest in 11,626,211 shares and 3,075,000 ESP shares.
BComm.
• No other listed company directorships.
Roger Hatem
• Mr Hatem, is the Chief Technology Officer at Precision Group.
Alternate Non-Executive
Director to Shaun Bonett
(appointed 12 February 2018)
• Roger holds a Bachelor of Arts degree in Mathematics and Statistics (Macquarie University), a Master of
Science in Operations Research
• (University of Technology Sydney), and is a Microsoft Certified Systems Engineer.
• Holds a relevant interest in 396,825 shares as Qad Investments Pty Ltd
• No other listed company directorships.
Company Secretary
Koreen White
• Ms White has 21 years’ experience in listed and unlisted, Australian and US-based corporate entities
Company Secretary
(appointed 4 August 2017)
CPA Australia
BBus(Acc)
having worked across the technology, media and telecommunications (TMT) sector.
• Holds a relevant interest in 50,000 shares and 1,400,000 ESP shares.
• No other listed company directorships.
13
SKYFII LIMITED annual report 2018 For personal use only
Directors’ Report continued
Meetings of Directors
During the financial year, 11 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 to attend Attended
Eligible to attend Attended
Eligible to attend Attended
James Scott
Andrew Johnson
11
11
Shaun Bonett/Roger Hatem(1) 6
Lincoln Brown
Wayne Arthur
2
11
11
11
5
2
11
2
2
-
-
-
2
2
-
-
-
(1) Roger Hatem attended 5 board meetings on behalf of Shaun Bonett
2
2
1
-
-
2
2
1
-
-
Principal activities
The principal activity of the Group during the financial year was the
provision of data analytics services.
Review of operations
The consolidated entity’s loss attributable to equity holders of the
Company, after providing for income tax, amounted to $2,009,719
(2017 loss: $4,911,715). Refer to the commentary in the Review
of Operations.
Dividends paid or recommended
In respect of the financial year ended 30 June 2018, there have
been no dividends paid or provided for (2017: nil).
Significant changes in state of affairs
There are no significant changes in the state of affairs of the parent
entity during the financial year.
Subsequent events
There are no matters or circumstances that have arisen since
30 June 2018 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.
14
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.
The Company has previously 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.
For personal use only
Non-audit services
Amounts paid or payable to the auditor for non-audit services
provided during the year by the auditor amounted to $7,663 (FY17:
$18,506).
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 21
of this report and forms part of the Directors’ Report for the year
ended 30 June 2018.
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.
15
SKYFII LIMITED annual report 2018 For personal use only 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:
•
James Scott – Non-Executive Chairman
• Andrew Johnson – Non-Executive Director
• Shaun Bonett – Non-Executive Director
• Lincoln Brown – Non-Executive Director
• Wayne Arthur – Chief Executive Officer
•
Roger Hatem – Alternate Non – Executive Director to Shaun
Bonett
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:
•
•
•
John Rankin – Managing Director, Australia and Chief Operating
Officer
Jason Martin – Chief Technology Officer
Koreen White – Finance Director and Company Secretary
(effective from 4 August 2017)
• Michael Walker – Chief Information Officer
•
Ian Robinson – Sales Director
1. 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.
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.
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 based bonuses, is at the discretion of the Nomination and
Remuneration Committee.
16
For personal use only
2. 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.
Short-term benefits
Directors’ fees
$
Salary and fees Other
$
$
Post employment benefits
Superannuation
$
Share based payments
Options
$
Shares
$
Total
$
25,000
25,000
FY 2018
Directors:
J. Scott
A. Johnson
S. Bonett (1)
L. Brown (2)
W. Arthur
R.Hatem (3)
Other KMP:
J. Martin
J. Rankin
I. Robinson
M. Walker
K. White
210,000
19,950
6,667
32,000
189,000
210,000
207,500
207,500
186,128
17,955
19,950
19,713
19,713
17,682
50,000
50,000
29,167
25,000
36,976
29,785
86,061
32,350
32,350
9,784
75,000
75,000
29,167
25,000
266,926
243,407
348,011
259,563
259,563
213,594
Total
50,000
1,210,128
38,667
114,963
381,473
-
1,795,231
FY 2017
Directors:
J. Scott
A. Johnson
W. Arthur
Other KMP:
J. Martin
J. Rankin
I. Robinson
B. Roze (4)
M. Walker
K. White
Total
205,000
184,500
195,443
191,250
171,436
203,750
20,538
19,475
17,528
18,567
18,169
14,852
19,356
1,951
50,000
50,000
21,263
67,384
55,247
18,719
16,197
18,719
39,408
21,219
89,408
71,219
245,738
269,412
269,257
228,138
202,485
241,825
22,490
-
1,171,918
-
109,897
297,529
60,627 1,639,971
The remuneration of key management personnel in the years ended 30 June 2018 and 30 June 2017 were 100% fixed, and there is no link
between remuneration and the market price of the Company’s shares.
Notes:
(1) Represents the remuneration commencing on the 22 November 2017, being the date upon which the individual commenced to be a KMP
(2) Represents the remuneration commencing on the 27 April 2018, being the date upon which the individual commenced to be a KMP.
(3) There is no remuneration payable for this appointment commencing on 12 February 2018.
(4) Represents the remuneration up until 22 June 2017, being the date upon which the individual ceased to be a KMP.
17
SKYFII LIMITED annual report 2018 For personal use only
Remuneration report continued
Ordinary shares
Details of ordinary shares in the Company held directly, indirectly or beneficially, by KMP including their related parties, is as follows:
Balance at
start of year
Received as part
of remuneration
Purchase
of shares
Transfer/Sale
of shares
Balance at
end of year
FY 2018
Directors:
J. Scott
A. Johnson
S. Bonett (1)
L. Brown (2) -
W. Arthur
R. Hatem (3)
Other KMP:
J. Martin
J. Rankin
I. Robinson
M. Walker
K. White
Total
Notes:
1,624,054
2,083,266
--------
-------
11,626,211
649,350
817,460
11,307,848
4,553,710
--------
32,661,899
714,286
714,286
-
489,855
669,306
560,317
22,015,874
-------
396,825
-
(396,825)
50,000
3,007,646
3,357,869
22,015,874
-------
11,626,211
396,825
649,350
1,307,315
10,911,023
4,553,710
50,000
1,918,427
23,692,322
(396,825)
57,875,823
(1) Represents the ordinary share movements commencing on the 22 November 2017, being the date upon which the individual commenced
to be a KMP
(2) Represents the ordinary share movements commencing on the 27 April 2018, being the date upon which the individual commenced to
be a KMP.
(3) Represents the ordinary share movements commencing on the 12 February 2018, being the date upon which the individual commenced
to be a KMP.
18
For personal use only
ESP shares
Details of ESP shares in the Company held directly, indirectly or beneficially, by KMP including their related parties, is as follows:
Balance at Granted / Released from Forfeited /
cancelled
restrictions
start of year
issued
FY 2018
Directors:
W. Arthur
Other KMP:
J. Martin
J. Rankin
1,775,000
1,300,000
1,450,000
1,000,000
2,025,000
1,100,000
I. Robinson
1,675,000
1,000,000
M. Walker
1,675,000
1,000,000
K. White
Total
--------
1,400,000
8,600,000
6,800,000
FY 2017
Directors:
W. Arthur
Other KMP:
J. Martin
J. Rankin
550,000
1,225,000
450,000
1,000,000
--------
2,025,000
I. Robinson
450,000
1,225,000
M. Walker
450,000
1,225,000
K. White
Total
--------
1,900,000
6,700,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at
Balance of
Balance of
end of year vested ESP shares unvested ESP shares
3,075,000
585,750
2,489,250
2,450,000
3,125,000
2,675,000
2,675,000
1,400,000
478,500
668,250
552,750
552,750
--------
1,971,500
2,456,750
2,122,250
2,122,250
1,400,000
15,400,000
2,838,000
12,562,000
1,775,000
181,500
1,593,500
1,450,000
2,025,000
1,675,000
1,675,000
-------- -
8,600,000
148,500
-
148,500
148,500
------- -
627,000
1,301,500
2,025,000
1,526,500
1,526,500
-------
7,973,000
Options
Details of options over unissued ordinary shares in the Company held directly, indirectly or beneficially, by KMP including their related
parties, is as follows:
Balance at
start of year
Received as part
of remuneration
Purchase
of options
Sale
of options
Balance at
end of year
FY 2018
Directors:
J. Scott
A. Johnson
Total
FY 2017
Directors:
J. Scott
A. Johnson
Total
3,250,000
1,750,000
5,000,000
-
-
-
3,250,000
1,750,000
5,000,000
-
-
-
-
-
-
-
-
-
-
-
-
3,250,000
1,750,000
5,000,000
3,250,000
1,750,000
5,000,000
19
SKYFII LIMITED annual report 2018 For personal use only
Remuneration Report continued
Loans to Directors and KMP
The following loan balances are outstanding at the reporting date in relation to remuneration arrangements with Executive Directors and
KMP in respect of shares issued under the Employee Share Plan (ESP).
As the ESP is considered in substance to be an option, the ESP shares issued and corresponding loan receivable are not recognised by the
Group in its financial statements. The ESP shares will not be considered issued to participants until the corresponding loan has been repaid,
at which time there will be an increase in the issued capital and increase in cash. Further information relating to the ESP is set out in Note
23 to the financial statements.
2018 $
2017 $
Directors:
W. Arthur
Other KMP:
J. Martin
J. Rankin
I. Robinson
M. Walker
K. White
Total
198,001
161,025
161,385
175,086
178,575
178,575
9,784
901,406
131,600
141,225
146,225
146,225
-------
726,300
Other transactions with KMP and/or their related parties
During the full year ended 30 June 2018, the Company incurred $6,719 (FY17: $118,934) of expenses relating to outsourced software
development services provided by Simple Machines Pty Ltd, a company associated with Jason Martin (CTO).
During the full year ended 30 June 2018, the Company recognised revenue $4,500 (FY17: $23,400) for services rendered for DSI Engineering
& Management Services, a company associated with Andrew Johnson (Director) and $57,262 (FY17:$0) for services rendered for Precision
Group Pty Ltd, a company associated with Shaun Bonett (Director).
These services were provided under normal commercial terms and conditions. Further information in relation to related parties can be
found in Note 23 to the financial statements.
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: $210,000 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
James Scott, Chairman. 31 August 2018
20
For personal use only
Auditor’s Independence Declaration
21
SKYFII LIMITED annual report 2018 For personal use only 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.
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 30 June 2018 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.io.
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
22
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 Committee is currently
comprised of three independent Directors, Messrs Scott, Johnson
and Bonett. The Board requires this Committee to undertake
appropriate checks on potential Board candidates. The number of
times the Nomination and Remuneration Committee met, and the
attendance at those meetings, is set out in the Directors’ Report.
The Nomination and Remuneration Committee Charter is available
on the Company’s website, www.skyfii.io.
All Directors and senior executives have entered into written
appointment agreements with the Company, setting out the terms
and conditions of their appointment.
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 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 Board performance evaluation was not undertaken during
the 2018 financial year. The Board will consider conducting a formal
performance evaluation during the 2019 financial year.
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.
For personal use only Given the size and nature of the Company, the Board determined
not to establish measurable objectives for achieving diversity for
the 2018 financial year. Establishing measurable objectives for
achieving diversity will be reconsidered on an annual basis.
As at 30 June 2018, the proportion of women employed by the
Group was as follows:
• Board of Directors: 0%
• Senior Executive positions: 17%
• Total Group workforce: 15%
The Diversity Policy is available on the Company’s website,
www.skyfii.io.
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 three independent Directors,
Messers Scott, Johnson and Bonett. Mr Bonett acts as Chairperson.
The Board regularly assesses the independence of each Director in
light of the interests disclosed by them. That assessment is made
at each Board meeting in relation to matters under consideration
at the meeting, 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.
A majority of the Board (comprising the Chairperson of the Board
James Scott, Andrew Johnson, Shaun Bonett and Lincoln Brown) are
considered to be independent Directors. Wayne Arthur, Managing
Director and CEO, and a major founding shareholder of the
Company, is not considered to be an independent Director.
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.
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.io.
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.io.
The number of times the Audit and Risk Committee met, and the
attendance at those meetings, is set out in the Directors’ Report.
The Committee is comprised of three independent Directors,
Messrs Scott, Bonett and Johnson. Mr Johnson acts as Chairperson.
The Board has
implemented a process to receive written
assurances from its Chief Operations Officer and Finance Director
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.
Principle 5 – Make timely and balanced disclosure
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.io.
23
SKYFII LIMITED annual report 2018 For personal use only
Corporate Governance Statement continued
Principle 6 – Respect the rights of security holders
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. 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.io.
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 windows.
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, is comprised of three
Johnson.
independent Directors, Messrs Scott, Bonett and
Mr Johnson acts as Chairperson.
The Company has adopted an Audit and Risk Committee Charter
which is available on the Company’s website, www.skyfii.io.
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 2015 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 as part of the Company’s
interim and end the financial year reporting periods.
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.
24
For personal use only Consolidated statement of profit or loss
and other comprehensive income For the financial year ended 30 June 2018
Revenue and other income
Revenue
Other income
Total revenue
Expenses
Direct costs of services
Employee benefits expense
Contractor and consultant expenses
Marketing and promotion expenses
Data hosting expenses
Travel and accommodation expenses
Office and other expenses
Directors’ fees
Share option expense
Share based payments expense
Depreciation and amortisation expenses
Finance costs
Loss before tax
Income tax expense
Loss for the year
Note
2018
$
2017
$
5
5
6
6
6
7
6,171,120
3,211,007
958,345
868,360
7,129,465
4,079,367
(1,357,890)
(825,358)
(3,007,968)
(4,033,752)
(75,340)
(235,247)
(514,224)
(361,354)
(111,339)
(304,140)
(511,158)
(444,872)
(1,022,657)
(1,085,772)
(204,167)
-
(282,523)
(100,000)
(60,627)
(355,064)
(2,026,486)
(1,139,780)
(1,023)
(1,845)
(1,959,414)
(4,894,338)
(50,305)
(17,377)
(2,009,719)
(4,911,715)
Other comprehensive income
Items that will be reclassified to profit or loss when specific conditions are met:
Exchange differences on translation of foreign operations
(115,220)
15,884
Total comprehensive loss for the period
(2,124,939)
(4,895,831)
Earnings per share
Basic earnings per share
Diluted earnings per share
29
29
Cents
Cents
(0.72)
(0.71)
(2.3)
(2.3)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
25
SKYFII LIMITED annual report 2018 For personal use only
Consolidated statement of financial position
As at 30 June 2018
Revenue and other income
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
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
Deferred revenue
Total current liabilities
Non-Current liabilities
Deferred revenue
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Total equity
Note
2018
$
2017
$
8
9
10
11
12
13
14
15
16
16
17
18
1,464,907
2,280,860
3,684,489
2,239,156
-
1,901
377,449
142,605
5,526,845
4,664,522
137,824
177,634
6,677,768
3,289,065
6,815,592
3,466,699
12,342,437
8,131,221
811,635
233,981
1,781,683
824,510
181,246
771,262
2,827,299
1,777,018
1,117,044
1,117,044
-
-
3,944,343
1,777,018
8,398,094
6,354,203
26,739,453
22,774,553
409,656
320,948
(18,751,015)
(16,741,297)
8,398,094
6,354,203
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
26
For personal use only
Consolidated statement of changes in equity
For the financial year ended 30 June 2018
Note
Contributed
equity
$
Share
based
payments
reserve
$
Balance at 1 July 2016
17,987,101
60,492
Loss for the year
Exchange differences on
translation of foreign operations
Total comprehensive
loss for the year
Transactions with owners
in their capacity as owners:
Issue of ordinary shares
Capitalised equity raising costs
(net of tax)
Share based payments
Issue of options
17
17
18
17
-
-
-
4,946,766
(159,315)
-
-
-
-
-
Share
option
reserve
$
-
-
-
-
-
-
Foreign
currency
translation
reserve
$
Accumulated
losses
Total
equity
$
$
3,588
(11,829,582)
6,221,599
-
(4,911,715)
(4,911,715)
12,296
-
12,296
12,296
(4,911,715) (4,899,419)
-
-
-
4,946,766
-
(159,315)
183,945
60,627
-
183,945
60,627
Balance at 30 June 2017
22,774,553
244,437
60,627
15,884
(16,741,297)
6,354,203
Note
Contributed
equity
$
Share
based
payments
reserve
$
Share
option
reserve
$
Foreign
currency
translation
reserve
$
Accumulated
losses
Total
equity
$
$
Balance at 1 July 2017
22,774,553
244,437
60,627
15,884
(16,741,297)
6,354,204
Loss for the year
Exchange differences on
translation of foreign operations
Total comprehensive
loss for the period
Transactions with owners
in their capacity as owners:
Issue of ordinary shares
Equity raising costs (net of tax)
Share based payments
Issue of options
-
-
-
17
17
18
18
3,964,900
-
-
-
-
-
-
-
-
203,928
-
-
-
-
-
-
-
-
-
(2,009,719) (2,009,719)
(115,220)
-
(115,220)
(115,220)
(2,009,719) (2,124,939)
-
-
-
-
-
-
-
-
3,964,900
-
203,928
-
Balance at 30 June 2018
26,739,453
448,365
60,627
(99,336)
(18,751,016)
8,398,094
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
27
SKYFII LIMITED annual report 2018 For personal use only
Consolidated statement of cash flows
For the financial year ended 30 June 2018
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Receipts from other income
Receipts from government tax incentives & government grants
Interest received
Interest paid
Note
2018
$
2017
$
6,081,006
3,859,900
(6,970,373)
(7,127,655)
-
942,824
10,158
(1,023)
27,990
851,069
17,291
(1,845)
Net cash (outflow) from operating activities
28
62,592
(2,373,250)
Cash flows from investing activities
Payments for plant and equipment
Payments for intangible assets
Payments for other assets
Refund / (Payment) for security deposits
Receipts from security deposits
Net cash (outflow) from investing activities
Cash flows from financing activities
Proceeds from issue of shares
Capital raising costs
Net cash inflow from financing activities
(6,626)
(57,164)
(1,621,752)
(1,581,084)
-
4,057
-
(54,477)
(10,450)
-
(1,624,321)
(1,703,175)
745,775
3,904,177
-
(159,315)
745,775
3,744,862
Net (decrease) in cash
(815,954)
(331,562)
Cash at the beginning of the year
Cash at the end of the year
2,280,861
2,612,422
8
1,464,907
2,280,860
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
28
For personal use only
Notes to the financial statements
For the financial year ended 30 June 2018
Contents of the notes to the consolidated financial statements
Note Contents
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
Reporting entity ................................................................................................................30
Basis of preparation ........................................................................................................30
Significant accounting policies ......................................................................................30
Operating segments ........................................................................................................37
Revenue ..............................................................................................................................37
Expenses ............................................................................................................................38
Income tax .........................................................................................................................39
Cash and cash equivalents ............................................................................................40
Trade and other receivables .........................................................................................40
Inventories .........................................................................................................................40
Other assets ......................................................................................................................40
Plant and equipment .......................................................................................................41
Intangible assets ...............................................................................................................42
Trade and other payables ..............................................................................................43
Provisions ...........................................................................................................................43
Deferred Revenue ............................................................................................................43
Contributed equity ...........................................................................................................44
Equity – reserves ..............................................................................................................45
Financial risk management ............................................................................................46
Remuneration of auditors ..............................................................................................48
Contingent liabilities ........................................................................................................48
Commitments for expenditure .....................................................................................48
Share based payments ...................................................................................................49
Related parties ..................................................................................................................52
Parent entity information ...............................................................................................53
Interests in controlled entities ......................................................................................53
Events occurring after the reporting date .................................................................54
Reconciliation of loss after tax to net cash from operating activities .................54
Earnings per share (EPS) ................................................................................................54
29
SKYFII LIMITED annual report 2018 For personal use only Notes to the financial statements
For the year ended 30 June 2018
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 Level 2, 100 William Street, Woolloomooloo NSW 2011.
The consolidated financial statements of the Company as at and
for the year ended 30 June 2018 comprise the Company and its
subsidiaries (together referred to as the Group and individually as
Group entities). The Group is a for-profit entity for financial reporting
purposes under Australian Accounting Standards. 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 31st August 2018 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
30
year ended 30 June 2018 the Group incurred a loss after tax of
$2,009,719. At 30 June 2018, the Group had a surplus in net current
assets of $2,699,546 and a surplus in net assets of $8,398,094.
Management have prepared cash flow projections that support
the Group’s ability to continue as a going concern. This forecast
acknowledges that the Group will not require to raise additional
capital funding for its daily operations.
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 further
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 26.
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).
For personal use only (b) Business combinations
Business combinations occur where an acquirer obtains control
over one or more businesses.
The measurement of deferred tax reflects the tax consequences
that would follow the manner in which the
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).
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
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.
31
SKYFII LIMITED annual report 2018 For personal use only Notes to the financial statements continued
For the year ended 30 June 2018
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 – 10 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.
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%.
Customer contracts
Customer contracts acquired are carried at their fair value at date
of acquisition, less accumulated amortisation. They are amortised
on a straight-line basis over the period of their expected benefit,
being their finite useful life between 2 – 6 years.
Brand Names
Brand Names acquired are carried at their fair value at date of
acquisition, less accumulated amortisation. They are amortised on
a straight-line basis over the period of their expected benefit, being
their finite useful life of 5 years.
Software
Software acquired are carried at their fair value at date of
acquisition, less accumulated amortisation. They are amortised on
a straight-line basis over the period of their expected benefit, being
their finite useful life of 4 years.
32
(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.
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.
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.
(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.
(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
initially at fair value and
Trade receivables are recognised
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
For personal use only 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 and rendering of services 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 and R&D tax incentives are recognised at
fair value where there is reasonable assurance that the grant/tax
incentive will be received and all grant/tax incentive conditions will
be met.
All revenue is stated net of the amount of goods and services tax
(GST).
(n) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount
of GST, except where the amount of GST incurred is not recoverable
from the 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:
•
•
•
Assets and liabilities are translated at year end exchange rates
prevailing at that reporting date.
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.
33
SKYFII LIMITED annual report 2018 For personal use only Notes to the financial statements continued
For the year ended 30 June 2018
(p) Earnings per share
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
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.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed
or determinable payments that are not quoted in an active market
and are subsequently measured at amortised cost. Gains or losses
are recognised in profit or loss through the amortisation process
and when the financial asset is derecognised.
Financial liabilities
Non-derivative financial liabilities other than financial guarantees
34
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 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
For personal use only asset’s carrying value over its recoverable amount is recognised
immediately in the profit and loss.
Impairment testing
intangible assets with indefinite lives.
is performed annually for goodwill and
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
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 are performed
in assessing recoverable amounts which incorporate a number of
key estimates.
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 2018 of $6,877,768.
R&D tax incentive
The Group has established a precedent for entitlement to the
R&D tax incentive in prior periods. This experience supports the
assumption that eligibility for the tax incentive 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.
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.
(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 2018).
(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.
–
–
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 have assessed that the adoption of AASB 9
will 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, as deferred by AASB 2015-8: Amendments to Australian
Accounting Standards – Effective Date of AASB 15).
35
SKYFII LIMITED annual report 2018 For personal use only
Notes to the financial statements continued
For the year ended 30 June 2018
a single lessee accounting model that eliminates the
requirement for leases to be classified as operating or
finance leases.
– The main changes introduced by the new Standard include:
•
•
•
•
recognition of a right-to-use asset and liability for all
leases (excluding short-term leases with less than 12
months of tenure and leases relating to low-value assets);
depreciation of right-to-use assets in line with AASB
116: Property, Plant and Equipment in profit or loss
and unwinding of the liability in principal and interest
components;
variable lease payments that depend on an index or a
rate are included in the initial measurement of the lease
liability using the index or rate at the commencement
date;
by applying a practical expedient, a lessee is permitted to
elect not to separate non-lease components and instead
account for all components as a lease; and
• additional disclosure requirements.
–
–
The transitional provisions of AASB 16 allow a lessee to
either retrospectively apply the Standard to comparatives
in line with AASB 108 or recognise the cumulative effect
of retrospective application as an adjustment to opening
equity on the date of initial application.
Although the directors anticipate that the adoption of AASB
16 will impact the Group’s financial statements, it is impracticable
at this stage to provide a reasonable estimate of such impact
given the Company’s current lease agreement expires on 30
December 2019 prior to the adoption of AASB 16
–
–
–
When effective, this Standard will replace the current
accounting requirements applicable to revenue with a
single, principles-based model. Except for a limited 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
obligations are satisfied.
(or as) the performance
The transitional provisions of this Standard permit an
entity to either: restate the contracts that existed in each
prior period presented per AASB 108: Accounting Policies,
Changes in Accounting Estimates and Errors (subject to
certain practical expedients in AASB 15); or recognise the
cumulative effect of retrospective application to incomplete
contracts on the date of initial application. There are also
enhanced disclosure requirements regarding revenue.
–
The Directors have conducted an assessment of the impact
of adopting AASB15 and have assessed that the impact will
not be significant.
•
AASB 16: Leases (applicable to annual reporting periods
beginning on or after 1 January 2019).
–
When effective, this Standard will replace the current
accounting requirements applicable to leases in AASB 117:
Leases and related Interpretations. AASB 16 introduces
36
For personal use only
4. Operating segments
The Group operates predominantly in two geographical segments, being the development and commercialisation of data analytics,
marketing and advertising services to its customers in Australia and Internationally. 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.
Revenue
Other income
Australia
International
Total
3,783,885
2,387,235
6,171,120
956,853
1,492
958,345
Total segment revenue
4,740,738
2,388,727
7,129,465
Segment net profit
3,400,267
1,857,084
5,257,351
Reconciliation of segment result to loss before tax
Employee benefits expense
Depreciation and amortisation expenses
Other Expenses
Finance Costs
Loss before tax
Income tax expense
Loss for the year
5. Revenue
Revenue from operations
Other income
Government R&D tax incentive
Export market development grant
Other government grants
Interest income
Total other income
(3,007,968)
(2,026,486)
(2,181,288)
(1,023)
(1,959,414)
(50,305)
(2,009,719)
2018
$
2017
$
6,171,120
3,211,007
828,232
110,955
9000
10,158
823,229
-
27840
17,291
958,345
868,360
Note
Total revenue
7,129,465
4,079,367
37
SKYFII LIMITED annual report 2018 For personal use only
Notes to the financial statements continued
For the year ended 30 June 2018
6. Expenses
Employee
Note
2018
$
2017
$
Salaries and related expenses (including superannuation)
Other employment costs
Total employee benefits expense
2,369,222
3,810,253
638,746
223,499
3,007,968
4,033,752
Depreciation and amortisation
Plant and equipment
Software development amortisation
Total depreciation and amortisation expenses
Rental expense relating to operating leases
Minimum lease payments
Rent recovery from sub-lease agreements
Net rental expense relating to operating leases
Net foreign exchange losses
Finance costs
Interest expense
12
13
46,437
43,903
1,980,049
1,095,876
2,026,486
1,139,780
237,741
298,088
(131,517)
(101,652)
106,224
196,436
142,778
20,093
1,023
1,845
38
For personal use only
7. Income tax
(a) Income tax
Current tax
Income tax (benefit)
Note
2018
$
2017
$
50,305
50,305
17,377
17,377
(b) Numerical reconciliation of income tax benefit to prima facie income tax payable
Loss from ordinary activities before income tax
Tax at the Australian rate of 27.5%
(1,959,414)
(3,390,876)
(538,839)
(932,491)
Tax effect amounts which are not deductible / (taxable) in calculating taxable income:
Difference in tax rates
Accounting for R&D expenditure
Benefit of tax losses/ timing difference not recognised
Other non-allowable items
Income tax (benefit)
(c) Income tax receivable
R&D tax incentive receivable
Franking credits
(18,067)
(2,530)
296,059
294,089
190,768
556,348
120,384
101,961
50,305
17,377
(828,232)
(823,229)
Franking credits available at the reporting date based on a tax rate of 27.5%
-
-
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: $2,486,491 (2017: ($2,019,310)
tax losses: operating losses $10,564,149 (2017: $10,392,961)
tax losses: capital losses $16,911 (2017: $16,911)
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).
39
SKYFII LIMITED annual report 2018 For personal use only
Notes to the financial statements continued
For the year ended 30 June 2018
8. Cash and cash equivalents
Current
Cash at bank and on hand
Total cash and cash equivalents
9. Trade and other receivables
Current
Trade receivables
R&D tax incentive receivable
Other debtors (1)
Total current trade and other receivables
(a) Ageing of trade receivables
1-30 days
31-60 days
61-90 days
90+ days
Total trade receivables net of provision for impairment
2018
$
2017
$
1,464,907
2,280,860
1,464,907
2,280,860
2018
$
2017
$
1,146,853
828,593
1,709,043
638,318
765,983
834,855
3,684,489
2,239,156
1,086,042
568,626
29,272
6,916
24,623
23,766
40,361
5,565
1,146,853
638,318
(1) Includes $1,210,000 USD outstanding balance as part of $1,625,000 USD profit guarantee payment receivable in accordance with the
Causley acquisition agreement. $415,000 USD has been received as at 30 June 2018 with the remaining $1,210,000 USD classified as
deferred revenue see Note 16.
There was no impairment of trade receivables. Amounts past due but not impaired $31,539 (2017: $45,926).
10. Inventories
Current
Equipment – at cost
Total inventories
2018
$
2017
$
-
-
1,901
1,901
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
Other
Total current other assets
40
2018
$
2017
$
328,575
129,680
-
48,874
4,057
8,868
377,449
142,605
For personal use only
12. Plant and equipment
Non-current
Office and computer equipment – at cost
Accumulated depreciation
Carrying value of office and computer equipment
2018
$
2017
$
265,250
(127,427)
258,826
(81,192)
137,824
177,634
Total carrying value of plant and equipment
137,824
177,634
Reconciliations
Reconciliations of the carrying amount of plant and equipment at the beginning and end of the current financial year are set out below:
Balance at 1 July 2016
Additions
Depreciation
Balance at 30 June 2017
Balance at 1 July 2017
Additions
Depreciation
Balance at 30 June 2018
Office and
Computer
equipment
$
164,374
57,054
(43,794)
Total $
164,374
57,054
(43,794)
177,634
177,634
177,634
6,627
177,634
6,627
(46,437)
(46,437)
137,824
137,824
41
SKYFII LIMITED annual report 2018 For personal use only
Notes to the financial statements continued
For the year ended 30 June 2018
13. Intangible assets
Non-current
Software development – at cost
Accumulated amortisation
Carrying value of software development
Customer Contracts
Accumulated amortisation
Carrying value of customer contracts
Brand Names
Accumulated amortisation
Carrying value of brand names
Software
Accumulated amortisation
Carrying value of software
2018
$
2017
$
6,442,136
4,820,384
(3,075,299)
(1,531,319)
3,366,837
3,289,065
853,000
(138,736)
714,264
198,000
(16,500)
181,500
2,696,000
(280,833)
2,415,167
-
-
-
-
-
-
-
-
-
Total carrying value of intangible assets
6,677,768
3,289,065
Intangible assets excluding software development costs were acquired as follows:
1) On 26 July 2017, the Company acquired customer contracts from Wicoms Wireless for an all scrip transaction of 3,800,000 new ordinary
shares issued at $0.065 per share at a valuation of $247,000.
2) On 5 February 2018, the Company acquired identifiable intangible assets from Causely for an all scrip transaction of 25,000,000 new
ordinary shares issued at $0.14 per share at a valuation of $3,500,000. An independent valuation was conducted by Pitcher Partners
for the acquisition of the Causely assets. Based on this valuation the $3,500,000 was allocated as follows; customer contracts $606,000,
brand names $198,000 and software $2,696,000.
Reconciliations
Reconciliations of the carrying amount of intangible assets at the beginning and end of the current and previous financial year are set out
below:
Software
Development
Customer
Contracts
Brand
Names
Software
$
Total
$
Balance at 1 July 2016
Additions
Amortisation
Balance at 30 June 2017
Balance at 1 July 2017
Additions
Amortisation
2,803,857
1,581,084
(1,095,876)
3,289,065
3,289,065
1,621,752
(1,543,980)
-
-
-
-
-
853,000
(138,736)
198,000
(16,500)
-
-
-
-
-
2,696,000
2,803,857
1,581,084
(1,095,876)
3,289,065
3,289,065
5,368,752
(280,833)
(1,980,049)
Balance at 30 June 2018
3,366,837
714,264
181,500
2,415,167
6,677,768
42
For personal use only
14. Trade and other payables
Current
Trade payables
Sundry payables and accruals
Total trade and other payables
15. Provisions
Current
Employee benefits
Total provisions
16. Deferred Revenue
Current
Deferred Revenue
Non-Current
Deferred Revenue
Total Deferred Revenue
2018
$
2017
$
729,806
81,829
802,011
22,498
811,635
824,509
2018
$
2017
$
233,981
181,246
233,981
181,246
2018
$
2017
$
1,781,683
771,262
1,117,044
2,898,727
771,262
Deferred revenue includes $1,210,000 USD outstanding balance relating to the profit guarantee payment receivable in accordance with the
Causley acquisition agreement as disclosed in Note 9. The deferred revenue is split as follows; current deferred revenue of
$595,000 USD and non-current deferred revenue of $615,000 USD. Balances have been converted to Australian dollars using the spot rate
as at 30 June 2018.
43
SKYFII LIMITED annual report 2018 For personal use only
Notes to the financial statements continued
For the year ended 30 June 2018
17. Contributed equity
(a) Share capital
Ordinary shares
264,618,194
261,118,194
26,739,453
22,774,553
30-Jun-18
Number
30-Jun-17
Number
30-Jun-18
$
30-Jun-17
$
Reconciliation to 30 June 2017:
Balance at 1 July 2016
Capitalised equity raising costs (net of tax)
Movements in ordinary shares:
Issue of ESP shares
Issued in settlement of various liabilities
Issued in settlement of Directors Fees
Share placement
Share placement
Issue of ESP shares
Share purchase plan
Issued in settlement of various liabilities
Date
Number
Unit price
$
168,265,551
21-Sep-16
21-Sep-16
1,825,000
1,685,065
20-Dec-16
1,587,301
20-Dec-16
40,043,922
10-Feb-17
26,379,052
10-Feb-17
13,000,000
14-Feb-17
7,793,643
16-May-17
538,660
17,987,101
(159,315)
-
129,750
100,000
2,522,767
1,661,880
-
491,000
41,370
$0.077
$0.077
$0.063
$0.063
$0.063
$0.065
$0.063
$0.077
Balance at 30 June 2017
261,118,194 22,774,553
Reconciliation to 30 June 2018:
Balance at 1 July 2017
Equity raising costs (net of tax)
Movements in ordinary shares:
Issued for purchase of Wicoms Acquisition
Issued in settlement of various liabilities
Issue of ESP shares
Issued in settlement of Directors Fees
Issue of ESP shares
Issued for purchase of Causely Acquisition
Issued in settlement of various liabilities
Conversion of ESP shares to ordinary shares
Issue of ESP shares
Issue of ESP shares
Conversion of ESP shares to ordinary shares
Conversion of ESP shares to ordinary shares
261,118,194
22,774,553
1-Aug-17
3,800,000
25-Aug-17
12-Oct-17
289,857
800,000
24-Nov-17
1,428,572
11-Dec-17
6,000,000
7-Feb-18
25,000,000
8-Feb-18
22-Mar-18
6-Apr-18
8-Jun-18
29-Jun-18
29-Jun-18
488,168
115,500
1,000,000
1,000,000
66,000
115,500
$0.065
$0.069
$0.058
$0.070
$0.073
$0.140
$0.161
$0.065
$0.156
$0.147
$0.065
$0.065
247,000
20,000
-
100,000
-
3,500,000
78,595
7,508
-
-
4,290
7,508
Balance at 30 June 2018
301,221,791
26,739,454
44
For personal use only
(b) Ordinary shares
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.
(c) Employee Share Plan (ESP)
Information relating to the Employee Share Plan, including details of shares issued under the plan, is set out in Note 23.
(d) Options over unissued ordinary shares
The Company granted the following options to Directors, convertible into the same number of ordinary shares in the Company, on the basis
of shareholder approval granted on 30 November 2016:
Number of options
Option consideration
Expiry date
Exercise price per option
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
$0.00
$0.00
$0.00
$0.00
$0.00
30 November 2019
30 November 2019
30 November 2019
30 November 2019
30 November 2019
$0.100
$0.125
$0.150
$0.200
$0.300
The fair value of the options over the shares is recognised as an employee benefit expense with a corresponding increase in equity. The fair
value is measured and recognised at grant date, being 30 November 2016.
The fair value at grant date is determined using the Black-Scholes option pricing model that takes into account the exercise price, the term
of the options, the impact of dilution, the non-tradeable nature of the options, the share price at grant date and expected price volatility of
the underlying shares, the expected dividend yield and the risk-free interest rate for the term of the options.
18. Equity – reserves
(a) Movements
Share based payment reserve movements
Balance at the beginning of the year
Share based payment expense
Balance at the end of the year
Share option reserve movements
Balance at the beginning of the year
Share option expense
Balance at the end of the year
Foreign currency translation reserve movements
Balance at the beginning of the year
Currency translation differences arising during the year
Balance at the end of the year
Total reserves
2018
$
2017
$
244,437
203,928
60,492
183,945
448,365
244,437
60,627
-
60,627
-
60,627
60,627
15,884
(115,220)
(99,336)
3,588
12,296
15,884
409,656
320,948
45
SKYFII LIMITED annual report 2018 For personal use only
Notes to the financial statements continued
For the year ended 30 June 2018
(b) Nature and purpose of reserves
Share based payments reserve
The share based payments reserve represents the value of the ESP share grants to employees under the Company’s Employee Share Plan.
Share option reserve
The share option reserve represents the fair value of options granted over unissued ordinary shares in the Company.
Foreign currency translation reserve
The foreign currency translation reserve records exchange differences arising on translation of foreign controlled subsidiaries.
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
Total financial assets
Financial Liabilities
Trade and other payables
Total financial liabilities
Note
8
9
2018
$
2017
$
1,464,907
2,280,860
3,684,489
2,239,156
5,149,396
4,520,016
14
811,635
824,509
811,635
824,509
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. Foreign currency is translated using the average exchange rates at the dates of transactions each month and at the end of each month
the balance sheet is restated using the end of month spot rate. To minimise risk the Group’s policy is, when available to hold a natural hedge
on any foreign currency, being that any receipts paid to the Group will held in the same foreign currency and then later used to settle any
expenditure in those foreign entities.
Interest rate risk
The Group is not exposed to any significant interest rate risk.
46
For personal use only
(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 (2017: 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.
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 table includes 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.
FY 2018
Non-derivatives
Trade and other payables
FY 2017
Non-derivatives
Trade and other payables
1 year or less
$
1 to 2 years
$
2 to 5 years Over 5 years
$
$
811,635
824,509
-
-
-
-
-
-
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.
47
SKYFII LIMITED annual report 2018 For personal use only
Notes to the financial statements continued
For the year ended 30 June 2018
20. Remuneration of auditors
During the year the following fees were accrued or 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
Tax compliance services
Total
21. Contingent liabilities
There are no other contingent liabilities as at 30 June 2018:
22. Commitments for expenditure
(a) Non-cancellable operating leases
2018
$
2017
$
62,198
7,663
55,500
18,506
69,861
74,006
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. Future minimum rentals payable under non-cancellable operating leases as at 30 June
2018 are as follows:
(a) Non-cancellable operating leases
Not later than one year
Later than one year
Total operating lease commitments
(b) Sub-lease arrangements
2018
$
308,498
267,905
2017
$
79,762
46,363
576,403
126,125
The Group has entered into sub-lease arrangements with respect to the Group’s head office. Rentals paid to the Group under sub-lease
arrangements are reflected as a reduction in rental expense in the profit or loss statement on a straight line basis over the period of the
sub-lease arrangements. Future minimum rentals receivable under sub-lease arrangements as at 30 June 2018 are as follows:
(b) Sub-lease arrangements
Not later than one year
Total sub-lease commitments
2018
$
13,200
13,200
2017
$
1,100
1,100
48
For personal use only
23. Share based payments
(a) Employee Share Plan (ESP)
During the year ended 30 June 2016, the Company established a share based payment plan, the Employee Share Plan (ESP) to assist the
Company in retaining and attracting current and future employees by providing them with the opportunity to own shares in the Company.
The key terms of the ESP are as follows:
•
•
•
the Board may invite a person who is employed or engaged by or holds an office with the Group (whether on a full or part-time basis) and
who is declared by the Board to be eligible to participate in the ESP from time to time (Eligible Employee) to apply for fully paid ordinary
shares under the plan from time to time (ESP Shares);
invitations to apply for ESP Shares are to be made on the basis of the market price per share defined as the volume weighted average
price at which the Company’s shares have traded during the 30 days immediately preceding the date of the invitation;
invitations to apply for ESP Shares under the ESP will be made on a basis determined by the Board (including as to the conditionality on
the achievement of any key performance indicators) and notified to Eligible Employees in the invitation, or if no such determination is
made by the Board, on the basis that ESP Shares will be subject to a 3 year vesting period, with:
–
–
–
33% of ESP Shares applied for vesting on the date that is the first anniversary of the issue date of the ESP Shares;
33% of ESP Shares applied for vesting on the date that is the second anniversary of the issue date of the ESP Shares; and
34% of ESP Shares applied for vesting on the date that is the third anniversary of the issue date of the ESP Shares.
•
Eligible Employees who accept an invitation (ESP Participants) may be offered an interest free loan from the Company to finance the
whole of the purchase of the ESP Shares they are invited to apply for (ESP Loan). ESP Loans will have a term of 5 years and become
repayable in full on the earlier of:
– the fifth anniversary of the issue date of the ESP Shares; and
–
if the ESP Participant ceases to be an Eligible Employee, either:
•
•
the fifth anniversary of the issue date of the ESP Shares, if the Eligible Employee is a good leaver (as defined in the ESP); or
that date of cessation, if the Eligible Employee is a bad leaver (as defined in the ESP).
•
•
•
•
•
if the ESP Participant does not repay the outstanding ESP Loan, or it notifies the Company that it cannot, then such number of ESP Shares
that equal by value (using the price at which the ESP Shares were issued) the outstanding amount of the ESP Loan will become the
subject of a buy-back notice from the Company which the ESP Participant must accept. The buy-back of such number of ESP Shares will
be considered full and final satisfaction of the ESP Loan and the Company will not have any further recourse against the ESP Participant;
any dividends received by the ESP Participant whilst the whole or part of the ESP Loan remains outstanding must be applied to the
repayment of the ESP Loan;
the maximum number of ESP Shares for which invitations may be issued under the ESP together with the number of ESP Shares still to
be issued in respect of already accepted invitations and that have already been issued in response to invitations in the previous 5 years
(but disregarding ESP Shares that are or were issued following invitations to non-residents, that did not require a disclosure document
under the Corporations Act, or that were issued under a disclosure document under the Corporations Act) must not exceed 10% of the
total number of ordinary shares on issue in the Company at the time the invitations are made;
in the event of a corporate reconstruction, the Board will adjust, subject to the Listing Rules (if applicable), any one or more of the maximum
number of shares that may be issued under the ESP (if applicable), the subscription price, the buy-back price and the number of ESP
Shares to be vested at any future vesting date (if applicable), as it deems appropriate so that the benefits conferred on ESP Participants
after a corporate reconstruction are the same as the benefits enjoyed by the ESP Participants before the corporate reconstruction. On
conferring the benefit of any corporate reconstruction, any fractional entitlements to shares will be rounded down to the nearest whole
share;
ESP Participants will continue to have the right to participate in dividends paid by the Company despite some or all of their ESP Shares
not having vested yet or being subject to an ESP Loan. If an ESP Loan has been made to the ESP Participant, then any dividend due must
first be applied to reducing any outstanding ESP Loan amount applicable to the ESP Shares on which the dividend is paid;
•
ESP Shares which have not vested and/or are subject to repayment of the ESP Loan will be restricted (escrowed) from trading;
49
SKYFII LIMITED annual report 2018 For personal use only
Notes to the financial statements continued
For the year ended 30 June 2018
•
the Company may buy-back at the issue price any ESP Shares which:
–
have not vested, or are incapable of vesting at any time (including as a result of the ESP Participant failing to meet any key performance
indicators on which vesting of ESP Shares is conditional); or
–
remain in escrow and/or are the subject of an ESP Loan, on the occurrence of:
• the ESP Participant ceasing to be an Eligible Employee (unless the Board, in its sole and absolute discretion determines otherwise,
subject to any conditions that it may apply, including the repayment of any outstanding ESP Loan); or
• the expiration of the term of the ESP Loan.
•
•
•
•
any bonus securities issued in relation to ESP Shares which remain unvested or are subject to an ESP Loan which becomes repayable in
full will be the subject of a buy-back by the Company at the issue price for no consideration;
on the death or permanent disability of an ESP Participant, all ESP Shares held by the ESP Participant or their estate will immediately vest
subject to the repayment of any outstanding ESP Loan by the curator, executor or nominated beneficiary(ies) (as the case may be) within
30 days of their appointment (or such longer period as the Company in its discretion may allow). Failing such repayment, the Company
will buy-back all ESP Shares in respect of which there is an outstanding ESP Loan;
the rules of the ESP and any amendment to the rules of the ESP must be in accordance with the Listing Rules and the Corporations Act;
if, while the Company’s shares are traded on the ASX or any other stock exchange, there is any inconsistency between the terms of the
ESP and the Listing Rules, the Listing Rules will prevail; and
•
the ESP is governed by the laws of the State of New South Wales, Australia.
(b) ESP share grants
Set out below are summaries of ESP shares granted and issued under the plan:
Issue
price
Balance at
start of year
Granted/
issued
Released
from
restrictions
Forfeited /
cancelled
Balance at
end of year
Balance of
vested ESP
shares
Balance of
unvested
ESP
shares
Grant date
FY 2018
23-Dec-15
$0.148
2,786,667
21-Sep-16
$0.077
1,525,000
10-Feb-17
$0.065
12,100,000
-
-
-
-
-
(297,000)
12-Oct-17
$0.058
11-Dec-17
$0.073
6-Apr-18
$0.156
8-Jun-18
$0.147
-
-
-
-
800,000
6,000,000
1,000,000
1,000,000
-
-
-
-
Total
16,411,667
8,800,000
(297,000)
-
-
-
-
-
-
-
-
2,786,667
1,379,400
1,407,267
1,525,000
503,250
1,021,750
11,803,000
3,894,990
7,908,010
800,000
6,000,000
1,000,000
1,000,000
-
-
-
-
800,000
6,000,000
1,000,000
1,000,000
24,914,667
5,777,640
19,137,027
FY 2017
23-Dec-15
$0.148
4,405,000
-
21-Sep-16
$0.077
10-Feb-17
$0.065
-
-
1,825,000
13,000,000
-
-
-
(225,000)
4,180,000
1,379,400
2,786,667
(300,000)
1,525,000
(900,000)
12,100,000
-
-
1,525,000
12,100,000
Total
4,405,000
14,825,000
-
(1,425,000)
17,805,000
1,379,400
16,411,667
50
For personal use only
All Eligible Employees who accepted an offer of ESP shares were given an interest free loan from the Company to finance the whole of the
purchase of the ESP shares they were invited to apply for (ESP Loan).
The ESP Loans are provided to participants on a non-recourse basis and upon vesting must be repaid in order to remove trading restrictions
on vested ESP shares. The term of the ESP Loan is five years; however, participants may forfeit their ESP shares if they do not repay the ESP
Loan or leave the Company. As the ESP removes the risk to participants from decreases in the share price by limiting the maximum loan
amount repayable to the value of the ESP shares disposed and waiving the ESP Loan should the participant forfeit their ESP shares, whilst
still allowing participants the rewards of any increase in share price, the Company has effectively granted the participants an option to the
ESP shares due to the ESP Loans being non-recourse. As such, this arrangement is accounted for under AASB 2.
The assessed weighted average fair value at grant date of the effective share options granted during the financial year is $0.09 per option
(2017: $0.069). Options were priced using a Black-Scholes option pricing model that takes into account the exercise price, the term of the
option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield
and the risk-free interest rate for the term of the option. The expected volatility of the Company’s shares is based on the historical volatility
of the Company’s shares and other ASX listed companies considered to be comparable to Skyfii Limited.
The model inputs for the share option grants outstanding during the year ended 30 June 2018 include:
• Weighted average exercise price: various 30 day VWAP at time of issue
• Weighted average life of the option: 5 years
• Expected share price volatility: 61%
• Risk-free interest rate: 1.90%
(c) Other share based payments
Issue Date
Creditor
Purpose
Valuation
No. of shares
Value per
share
Total
$
FY 2018
Directors:
24-Nov-17
24-Nov-17
Total
FY 2017
Directors:
21-Dec-16
21-Dec-16
Total
J. Scott
Director’s fees
Value of services
A. Johnson
Director’s fees
Value of services
714,286
714,286
1,428,572
$0.07
$0.07
$0.07
50,000
50,000
100,000
J. Scott
Director’s fees
Value of services
A. Johnson
Director’s fees
Value of services
793,651
793,650
1,587,301
$0.063
$0.063
$0.063
50,000
50,000
100,000
51
SKYFII LIMITED annual report 2018 For personal use only
Notes to the financial statements continued
For the year ended 30 June 2018
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 26.
(c) Key management personnel compensation
Short-term benefits
Share based employee benefits
Other long term benefits
Total benefits
2018
$
2017
$
1,298,795
381,473
114,963
1,171,918
358,156
109,897
1,795,231
1,639,971
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 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
Related party entity
Transaction
Jason Martin Simple Machines Pty Ltd
Outsourced sofware
development services
Transaction value
2017
$
2018
$
Balance outstanding
2017
$
2018
$
6,719
118,934
-
-
Other payable transactions with directors and key management personnel
At 30 June 2018 the payable balance outstanding with directors and key management personnel relating to expense reimbursements for
supplier payments and business expenses was $0 (2017: $8100).
(e) Receivable transactions with directors and key management personnel
KMP
Related party entity
Transaction
Andrew Johnson DSI Engineering &
Management Services
Data Science
Consultancy
Transaction value
2017
$
2018
$
Balance outstanding
2017
$
2018
$
4,500
23,400
-
23,400
Shaun Bonett
Precision Group
Analytics and
Data Science Services
57,262
-
57,262
-
Other receivable transactions with directors and key management personnel
At 30 June 2018, the receivable balance outstanding with directors and key management personnel relating to employee debit and credit
card advances utilised for the sole purpose of supplier payments and business expenses was $16,706 (2017: $42,242).
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.
52
For personal use only
25. Parent entity information
Set out below is information about the legal parent entity, Skyfii Limited
Statement of comprehensive income
Loss after tax
Total comprehensive income
Statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Net assets
Contributed equity
Reserves
Accumulated losses
Total equity
2018
$
2017
$
97,382
97,382
(104,275)
(104,275)
17,918,752
15,326,356
17,310,931
14,000,000
35,229,683
29,326,356
1,847,831
210,715
1,847,831
210,715
33,381,852
29,115,642
70,526,041
66,561,141
742,992
539,064
(37,887,181)
(37,984,563)
33,381,852
29,115,642
Contingent liabilities
The parent entity had no contingent liabilities at 30 June 2018 and 30 June 2017.
Capital commitments – plant and equipment
The parent entity had no capital commitments for plant and equipment as at 30 June 2018 and 30 June 2017.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in Note 3.
26. 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
Subsidiaries:
Skyfii Group Pty Ltd
Skyfii International Pty Ltd
Skyfii Brasil Inteligência, Mídia e Tecnologia Mobile Ltda.
Skyfii South Africa (Pty) Ltd
Skyfii UK Operations Limited
Skyfii US Operations, LLC.
Country of
incorporation
Australia
Australia
Australia
Brazil
Republic of South Africa
United Kingdom
United States of America
Ownership interest
2017
2018
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
53
SKYFII LIMITED annual report 2018 For personal use only
Notes to the financial statements continued
For the year ended 30 June 2018
27. Events occurring after the reporting date
There are no matters or circumstances that have arisen since 30 June 2018 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.
28. Reconciliation of loss after tax to net cash from operating activities
Loss for the year
Cash flows included in loss:
Non-cash items in operating loss:
Depreciation and amortisation
R&D tax incentive receivable
Share based payments
Share option expense
Changes in operating assets and liabilities:
Decrease / (increase) in trade and other receivables
Decrease / (increase) in inventories
Decrease / (increase) in prepayments and other assets
Increase / (decrease) in trade and other payables
Increase / (decrease) in provisions and employee benefits
Increase / (decrease) in deferred revenue
Net cash used in operating activities
29. 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
2018
$
2017
$
(2,009,719)
(4,911,715)
2,026,486
1,139,780
(828,593)
-
282,523
455,064
-
60,627
(1,394,349)
1,901
72,546
8,543
(100,787)
(48,676)
(83,672)
210,370
41,337
35,874
2,127,465
604,337
62,592
(2,373,250)
2017
Cents per share Cents per share
2018
(0.72)
(0.71)
(2.3)
(2.3)
(c) Weighted average number of shares used as the denominator
Number
Number
Weighted average number of ordinary shares used in calculating basic EPS 279,869,553
210,951,238
Weighted average number of dilutive options outstanding
5,000,000
2,904,110
Weighted average number of ordinary shares used in calculating diluted EPS
284,869,553
213,855,347
(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 (2,009,719)
(4,911,715)
54
For personal use only
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 2018
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
James Scott
Chairman
31 August 2018
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SKYFII LIMITED annual report 2018 For personal use only 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 during the financial year ended 30 June 2018.
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 20 August 2018.
Substantial shareholders
The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations Act are:
Substantial shareholder
Socialbon Inc
Precision Management Corporation Pty Ltd
Jagafii Pty Ltd
Birketu Pty Ltd
The Elsie Cameron Foundation Pty Ltd
Date of
Notice
Number of
shares
5-Mar-18
23-Nov-17
21-Nov-17
12-Feb-18
14-Feb-17
25,000,000
22,015,874
18,589,512
18,027,835
17,009,380
Top 20 shareholders as at 20 August 2018
Rank Name
Number of ordinary % of ordinary
shares held
shares held
SOCIALBON INC
PRECISION MANAGEMENT CORPORATION PTY LTD
JAGAFII PTY LTD
BIRKETU PTY LTD
THE ELSIE CAMERON FOUNDATION PTY LTD
AVENUE C PTY LTD
KARIBU PTY LTD
BONDUFFMEX PTY LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
MONTELLA INVESTMENTS PTY LTD
INVICTUS SUPER NOMINEES PTY LTD
SHANDERLAY INVESTMENTS PTY LTD
BOLLINGER INVESTMENTS LIMITED
BIRKETU PTY LTD
DEVERO HOLDINGS PTY LTD
THE CHIMES PRIVATE FOUNDATION
AUSTER CAPITAL PARTNERS LLC
JBWERE (NZ) NOMINEES LIMITED <50645 A/C>
ALTERAC PTY LTD
MR ANDREW JOHNSON
Total top 20 holders
Total remaining holders
25,000,000
22,015,874
18,589,512
18,027,835
17,009,380
15,859,945
11,496,211
10,911,023
9,918,377
7,581,715
7,167,508
6,935,972
5,285,713
5,240,921
4,553,710
4,548,450
3,800,000
2,960,853
4,620,465
1,916,666
9.15%
8.06%
6.80%
6.60%
6.22%
5.80%
4.21%
3.99%
3.63%
2.77%
2.62%
2.54%
1.93%
1.92%
1.67%
1.66%
1.39%
1.08%
1.69%
0.70%
203,440,130
69,837,389
74.44%
25.56%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
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Distribution of ordinary shareholders as at 20 August 2018
Name
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Number of
Shareholders
Number of
shares
639
85
75
9,630
294,298
620,938
300
12,623,167
172
259,729,486
1,271
273,277,519
At the closing market price of $0.18 per share on 20 August 2018, there were 634 shareholders with less than a marketable parcel of shares
($500).
Option holders as at 20 August 2018
Rank Name
1
2
Mr James Scott
Mr Andrew Johnson
Total
Restricted securities as at 20 August 2018
Number of
% of
options held options held
3,250,000
1,750,000
5,000,000
65.00%
35.00%
There are no restricted securities on issue for the purpose of the ASX Listing Rules. There are ordinary shares on issue that are subject to
escrow in accordance with voluntary escrow arrangements, as set out in the table below:
Class of restricted securities
Nature of restriction
Unquoted ESP shares
Various dates ending no later than 8-Jun-21
Total shares subject to escrow
Number of shares
27,983,000
27,983,000
30. 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.
31. On-market Buy Back
There is no current on-market buy back.
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Corporate directory
Chairman, Non-Executive Director
Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Alternate Non-Executive Director to Mr Shaun Bonett
Company Directors
Mr James Scott
Mr Wayne Arthur
Mr Andrew Johnson
Mr Shaun Bonett
Mr Lincoln Brown
Mr Roger Hatem
Company Secretary
Ms Koreen White
Registered Office
Level 2
100 William Street
Woolloomooloo NSW 2011
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)
Website
www.skyfii.io
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