SUPERLOOP
ANNUAL
REPORT
2016
www.superloop.com
Superloop Limited | ABN 96 169 263 094
CONTENTS
1. Report from Executive Chairman / Chief Executive Officer
2. Business Overview
3. Directors’ Report
4. Auditor’s Independence Declaration
5. Corporate Governance Statement
6. Financial Report
7. Notes to the Consolidated Financial Report
8. Directors' Declaration
9.
Independent Auditor’s Report
10. Shareholder Information
Report from Executive Chairman / Chief Executive Officer
Dear Shareholders,
On behalf of the Board of Directors of Superloop Limited, it is my pleasure to present our second Annual Report.
Having worked in the telecommunications industry for many years and having built several successful telecommunications
businesses, I am excited by the opportunities I see for Superloop. The industry within which we operate has strong structural growth
drivers. We expect to benefit from the growth in transmission and storage of data including increased bandwidth requirements from
the rise in cloud computing, video on demand and the increase in internet connected devices. The Asia Pacific region is predicted
to overtake North America as the largest generator of cloud traffic in the world and Hong Kong and Singapore have become the
established hubs for data centres and international submarine cable capacity in the region.
The past financial year to 30 June 2016, our first full year as a listed entity, has seen significant growth and accelerating
development in the organisation. We have expanded the Group through the acquisition of two strategic, profitable and growing
businesses, APEXnetworks and CINENET Systems, launched fibre optic networks in Australia and Singapore, commenced the
construction of our network in Hong Kong and achieved a number of sales and product milestones.
For the year to 30 June 2016, we have achieved the following significant outcomes:
•
•
•
•
•
•
•
•
Booked revenue and gains from customers of $7.0 million
Achieved gross profit break-even in Australia and Singapore
Increased customer base to 160 active customers
Installed over 190 km of fibre, taking total installed fibre to 378 km
Connected 15 additional data centres and cable landing stations, with 52 on-net at 30 June 2016
Connected 19 additional enterprise buildings, with 22 on-net at 30 June 2016
Signed additional contracted recurring revenue of over $10 million, taking the contracted revenue base to over
$11.9 million
Grown unweighted sales pipeline to over $41.0m of new client opportunities.
With our Australian and Singapore networks live from October 2015, we have already started to generate initial returns on our
investment. Pleasingly, we have seen exceptional optical performance on our Singapore network and to date have delivered
network services that have exceeded International Telegraph Union Telecommunication Standardization Sector (ITU.T)
specifications, enabling customers to leverage the advantages of our state of the art, low loss and low latency solutions.
We continue to invest in the expansion of our networks where customer demand exists. In Singapore, we are adding strategic
locations to the network including the Singapore Exchange, iO and NTT data centres, with pre-committed orders ensuring the
expanded loop will be profitable and will generate high annual gross yield at very low utilisation levels. As utilisation increases,
additional revenue translates directly to increased margin and yield.
In addition, as the Company owns its duct network in Singapore which has significant spare capacity available, Superloop has the
ability to substantially expand available capacity in the future by installing additional fibre cables, at significantly lower incremental
cost than the initial investment.
We are looking forward to the launch of our network in Hong Kong where Superloop is building a significant asset. Currently
expected to be practically competed by December 2016, the initial network of 110 kilometres will connect the first 30 strategic data
centre and enterprise buildings.
Our network traverses the major business, financial and technology districts of Hong Kong and will be significantly enhanced when
Superloop completes TKO Express, our new domestic submarine cable providing the most direct and lowest latency path between
our core network in the data centre campuses of Chai Wan (on Hong Kong Island) and Tseung Kwan O (TKO) Industrial Estate tech
hub on the mainland. TKO Industrial Estate is the new major hub for financial, media, technology and data centre companies in
Hong Kong with 13 data centres existing or under construction, including the Hong Kong Stock Exchange data centre. TKO is also
becoming a major hub for submarine cable landing stations providing direct access to international internet connectivity.
Across the Asia Pacific region, we are building our own dedicated networks, offering customers the latest low-loss fibre technology
designed for terabit network connectivity requirements. This technology combined with a network designed and installed in the
most direct paths between strategic locations allows for ultra-low latency connectivity, a feature important for many enterprise and
financial clients. With the development of two new layer 2 products (Wavelength and Ethernet Backhaul) Superloop now provides
more flexible solutions to our customer base.
Over the past 12 months the Group successfully completed and integrated two strategic acquisitions adding customers, revenue,
intellectual property, network capability and talent.
The acquisition of APEXnetworks has allowed Superloop to rapidly deploy a managed services capability for our wholesale and
channel customers via APEXN’s IT and product platforms. APEXN’s platform incorporates service qualification tools as well as
systems to manage ordering, provisioning, billing, support and network management. This platform becomes more valuable as
Superloop expands its operations further across Singapore and Hong Kong.
The acquisition of CINENET Systems has provided Superloop an opportunity to quickly extend our network capabilities into the
fast-growing digital media vertical, bringing a specialised high-speed network that interconnects media businesses in Brisbane,
Sydney, Melbourne, Adelaide and Los Angeles via dedicated international capacity. CINENET expands our customer base to include
a broad portfolio of screen and broadcast media customers and provides a platform for further expansion into the vertical across
the Asia Pacific region.
3
Superloop Limited and controlled entities
After raising $17.5 million at IPO, we have raised further equity capital of $84.6 million (before costs) to fund strategic expansion
opportunities. At 30 June 2016, we held cash and term deposits of $45.9 million, sufficient funds for upcoming planned projects.
In February of this year, I was apointed as the Company's Interim Chief Executive Officer, allowing our previous CEO, Mr Daniel
Abrahams, to focus on the execution of company critical infrastructure projects including the completion of our Hong Kong network,
the construction of the TKO Express submarine cable and the expansion of our Singapore network to meet customer requirements.
As Chief Executive, Daniel led the Group through the IPO process and oversaw the completion of the Singapore and Australian
networks. He has recently stated that he will not be standing for re-election as a Director at our upcoming 2016 Annual General
Meeting so I take this opportunity to thank him for his tremendous contribution in leading Superloop and for his stewardship as
a fellow board member. I look forward to his continued involvement in his executive capacity as the Group’s Chief Infrastructure
Officer.
During the year we strengthened our executive team in order to support the rollout and continued rapid growth of Superloop,
appointing:
•
Steve Bond as General Manager, Sales and Marketing. He is a former IBM executive with significant experience in building
and leading technology businesses in the Asia Pacific region
Paul Jobbins as General Manager, Corporate and Strategy. He has previously worked in senior executive roles withseveral
ASX listed companies including NEXTDC Limited, Reverse Corp Limited and Sunshine Gas Limited
Ryan Crouch (Co-founder of APEXN) as Chief Technology Officer
Matthew Gregg (Co-founder of APEXN) as General Manager, Customer Experience
•
•
•
Through the acquisition of APEXnetworks in October 2015, Ryan and Matthew joined our executive team. Both have developed and
grown a successful telecommunications business with a broad customer base and a sophisticated and robust technology platform.
Looking ahead, Superloop is on track to complete the construction of its Hong Kong network by December 2016, and Hong Kong's
TKO Express submarine cable by January 2017. Throughout the 2017 financial year and beyond, we will continue to invest in our
networks in Singapore and Hong Kong by adding strategic sites to meet customer demand.
With the integration of APEXnetworks and CINENET complete, each acquisition will bring further benefits across the Group in terms
of revenue growth, product offering and systems capabilities. The management team is focussed on the execution of key strategic
sales opportunities and the continued development of products, leveraging our established infrastructure to achieve EBITDA
breakeven as quickly as possible.
With expanding networks in place across Australia, Singapore and Hong Kong, the Group will have established a platform to
leverage our core infrastructure assets and drive further growth and customer acquisition. Superloop continues to pursue its vision
to become a leading independent owner and provider of connectivity services in the Asia Pacific region.
The 2016 financial year has been challenging and rewarding for the Superloop Team. I would like to thank my fellow Board members
and all of those on the Superloop team for their dedication and effort.
Lastly, I would like to express my gratitude to our shareholders for your ongoing support of the Company. We hope that you are
able to join us at the 2016 Annual General Meeting.
Bevan Slattery
Executive Chairman/Chief Executive Officer
Superloop Limited
29 August 2016
4
Superloop Annual Report 2016
Business Overview
Vision Statement
“To become the leading independent
provider of connectivity services
across the Asia Pacific Region”
Superloop’s Dark Fibre infrastructure is highly scalable and generates a high return on investment.
High return
on investment
Highly scalable
infrastructure
Networks
break-even at
low utilisation
Low risk
of customer
churn
Strong
management
team
Valuable
infrastructure
assets created
5
Superloop Limited and controlled entities Why Singapore
Singapore is home to more than 80 of the top 100 software and services companies. Many of them, including the top 15 software
companies, have regional or Asia Pacific headquarters in the region. As a major global data management hub it features 15
international submarine cable systems and >50% of commercial carrier & carrier neutral data centre space in South East Asia. 136
km of Superloop fibre is installed and 10 data centres and 14 strategic commercial enterprise buildings are now connected.
International
Trade
#1
International
Competitiveness
#4
Why Hong Kong
As one of the world’s leading international financial centres and densely populated, enterprise-rich regions, Hong Kong is an
ideal target for high density fibre optic cable deployment. The Hong Kong Stock Exchange is the seventh largest in the world and
manages approximately 22% of all global IPOs, making it the largest centre of IPOs in the world. Hong Kong has recently overtaken
Singapore as number one for international competitiveness and ranked number five for ‘ease of doing business’ by World Bank
Group in 2016.
International
Competitiveness
#1
International
Trade
#2
Hong Kong will represent Superloop's largest deployment to date. The network is established in campuses to allow for short-paths
and diversity between local clusters of facilities and buildings, connected together with a diverse ring backbone. Hong Kong is
Superloop's newest network with construction expected to be completed by December 2016.
6
Superloop Annual Report 2016 Expansion Through Strategic Acquisitions
Superloop completed the acquisition of two significant businesses, APEXnetworks and CINENET Systems, which have been
completely integrated into current operations. The acquisitions of these profitable and growing businesses has expanded our
capabilities, added customers, revenue, intellectual property and talent to the Superloop group.
The acquisition of APEXnetworks has allowed Superloop to rapidly deploy a managed services capability for our wholesale and
channel customers via APEXN’s IT and product platforms. The acquisition of CINENET expands our customer base to include a
broad portfolio of screen and broadcast media customers and provides a platform for further expansion into the vertical across the
Asia Pacific region.
Superloop’s Competitive Advantage
●
●
●
●
●
●
The most advanced fibre technology with the lowest latency offering a multi jurisdiction, single global MSA
Market leading service level agreements
Superloop’s own dedicated network with diversity
Customer centric focus – flexibility to build customer dedicated solutions quickly
Superior customer experience: “360” customer provisioning + network management portal
An agile network with the shortest routes, designed specifically for our customers
Products
We have expanded our product set with the launch of two new layer 2 products over our fibre Wavelength and Ethernet Backhaul.
These products offer customers different networking solutions that are tailored to their needs. The Superloop team are continuing
the development of additional products including Metro Ethernet Access and Superloop 360 for network management.
SINGAPORE
HONG
KONG
AUSTRALIA
Superloop owns a secure duct
and fibre optic cable network in
Singapore. When capacity on the
initial cable approaches saturation,
the incremental cost to increase
capacity with an additional cable
through Superloop’s duct network
is significantly lower than the initial
investment including the duct.
Superloop is the only operator to
connect the traditional carrier hotels
located in Chai Wan (Hong Kong
Island) and the data centre campus
located at Hong Kong Science and
Technology Park’s Tseung Kwan O
Industrial Estate, providing much
needed physical diversity and a lowest
latency path between Hong Kong’s
major finance and technology hubs.
Superloop offers the most direct
routes while connecting many
strategic locations at competitive
pricing. Customers select Superloop
for the experienced team, path
diversity and level of service.
7
Superloop Limited and controlled entities DIRECTORS’
Report
The Directors present their report
on the consolidated entity (referred
to hereafter as ‘Superloop’ or ‘the
Group’) consisting of Superloop
Limited and the entities it controlled
at the end of, or during, the year
ended 30 June 2016.
8
Superloop Annual Report 2016 The Directors present their report on the consolidated
entity (referred to hereafter as ‘Superloop’ or ‘the Group’)
consisting of Superloop Limited and the entities it controlled
at the end of, or during, the year ended 30 June 2016.
Superloop Limited was incorporated on 28 April 2014 and
gained admission to the ASX on 4 June 2015. This report
covers the year ending 30 June 2016. The prior period in these
financial statements covers the period 28 April 2014 to 30
June 2015 as it was the first reporting period for the Group.
In order to comply with the provisions of the Corporations
Act 2001, the Directors report as follows:
DIRECTORS
The following persons were Directors of the Group during the year:
• Bevan Slattery
• Daniel Abrahams
• Greg Baynton
• Louise Bolger
• Michael Malone
• Richard Clark (appointed 23 December 2015)
Directors have been in office since the start of the financial
year to the date of this report unless stated otherwise.
PRINCIPAL ACTIVITIES
The Superloop Group is a leading independent provider
of connectivity services in the Asia Pacific region. During
the year, the principal activities of the Group consisted of
the development and operation of independent dark fibre
telecommunications infrastructure throughout the Asia
Pacific region. Following the Group’s recent acquisitions,
principal activities now extend to the provision of complete
high-performance network solutions capability.
REVIEW OF OPERATIONS
During the year, Superloop continued to build upon the
foundations established that will enable it to become a leading
provider of connectivity services in the Asia Pacific region.
Specific achievements over the past year include:
• Completing the networks in Melbourne, Brisbane, Sydney
and the construction of the initial 117km fibre optic
network in Singapore;
•
Provisioning the first customer services on the Australian
and Singapore networks;
•
Launching Project Red Lion, an initiative to extend the
Singapore network to some of Singapore’s most strategic
commercial buildings, with 14 buildings connected at year
end and 21 buildings at the date of this report;
• Completing the acquisition of APEXN Pty Ltd, which
provides networking solutions and managed services
focused on supporting wholesale and channel partners;
• Completing the acquisition of CINENET Systems
Pty Ltd, which operates a specialised high-speed
international data network catering specifically for the
needs of screen and broadcast media industries;
Directors' Report
•
•
•
•
•
Integration of APEXN, CINENET and Superloop to realise
the synergy benefits that were targeted by the Group;
The continued expansion of the Singapore network,
driven by both strategic opportunities as well as customer
demand for services, with approximately 136km of
fibre installed and 10 data centres and cable landing
stations connected to the network at year end;
Entered into an agreement to establish a 110km fibre
optic network and operations in Hong Kong, with the
Group holding a 25 year indefeasible right of use over
the infrastructure, with two (2) further five (5) year
options to extend the length of the agreement;
Announced TKO Express, a new domestic submarine
cable crossing project to provide a new low-
latency and fully diverse route between Hong Kong
Island and the TKO Industrial Estate; and
Launched new product initiatives including Superloop
Wavelength and Superloop Ethernet Backhaul.
FINANCIAL PERFORMANCE AND POSITION
As at 30 June 2016, the Group had net assets of $119.7m (FY15
$53.8m). The Group made an operating loss before tax of $7.2m
for the year, consistent with the early stage of the Group’s
development.
Revenue and gains from transactions with customers for the
year was $7.0m, including a gain on sale of a small number
of fibre cores. Superloop’s core networks in Australia and
Singapore went live during the first half of the year and
commenced generating revenue from customers. The Group
also completed the acquisitions of APEXN and CINENET
Systems in the first half. Revenue in the second half grew by
160% compared to the first half of the year.
Profit after direct network operating expenses for the year
was $1.9m. Both the Australian and Singapore networks grew
revenue over the year and as a result both networks are now
operating on a positive basis with customer revenue exceeding
direct network costs.
The Group made an operating loss before tax of $7.2m, with an
underlying EBITDA loss of $5.6m, which is consistent with the
early stage of the Group’s development. Operating expenses
for the year were $7.6m, largely made up employee expenses
of $4.2m, office and administrative expenses of $1.8m, and
professional fees of $1.3m.
Depreciation and amortisation was $1.9m for the year, which
increased over the year as network assets were completed
and placed into operation, and includes the depreciation of the
network assets $1.2m and amortisation of the Group’s IRU’s of
$0.3m.
The Company also realised foreign exchange gains of $0.4m
during the year.
9
Superloop Limited and controlled entities Directors' Report
At 30 June 2016, the Group had $45.9m in cash and
cash equivalents. The primary assets of the Group are
property, plant and equipment of $66.9m including network
infrastructure assets of $39.6m. Also included in property,
plant and equipment is capital work in progress of $27.0m,
which includes the Group’s progress towards the completion
of the Hong Kong Network, as well as other network
expansion projects currently underway in Singapore.
The Group had intangible assets of $12.4m which includes the
value of the Group’s Australian IRU contracts of $4.2m, software
assets obtained through the acquisition of APEXN Pty Ltd of
$1.6m and goodwill arising from business combinations of $6.0m.
FUNDING
As at 30 June 2016, the Group was funded via equity contributions
from shareholders (refer note 21), with no interest bearing debt.
The Group undertook two capital raisings during the year.
The first capital raising occurred during December
2015 via a share placement and share purchase plan,
which raised $49.4m in additional shareholder capital to
principally fund the investment in the Hong Kong network
and the next phase of Project Red Lion in Singapore.
The second capital raising was undertaken in June 2016 via
an entitlement offer, raising $35.3m (with the retail component
of $12.8m completed in July 2016), principally to provide
funding for the TKO Express project in Hong Kong, expansion
in Hong Kong to connect the network to additional buildings,
Singapore network expansion including the IO/SGX loop,
further expansion of project Red Lion in Singapore, other
customer led expansion and general working capital.
BUSINESS STRATEGIES AND PROSPECTS
FOR FUTURE FINANCIAL YEARS
Superloop intends to :
• Complete the installation of the Hong Kong core
network and TKO Express submarine cable (subject to
final regulatory approval);
•
•
•
Expand access networks to major commercial
buildings in Singapore and Hong Kong;
Execute key strategic sales opportunities in each
market to leverage the current strategic network
assets;
Increase product development that leverages existing
infrastructure and relationships for a greater share of
wallet;
• Continue to evaluate new markets and potential
acquisitions that the Company believes are of strategic
value;
•
Focus on achieving EBITDA breakeven as quickly as
possible;
• Review alternate funding sources for future network
expansion and possible M&A activity; and
• Deliver further transaction synergies from APEXN and
CINENET acquisitions.
10
BUSINESS RISKS
The material business risks faced by the Group that are
likely to have an effect on its financial prospects include:
•
CUSTOMER DEMAND – Superloop’s growth strategy
incorporates commitment of substantial operational and
financial resources to design, construct and maintain fibre
optic telecommunications infrastructure and to expand
existing infrastructure. Development or expansion of dark
fibre networks does not necessarily require commitments
from customers prior to commencement, and as such,
sufficient demand may not exist post-completion. A
lack of customer demand, or oversupply of fibre optic
telecommunications infrastructure in the market, could
have negative implications on the Group’s ability to achieve
desired rates of return on investment, and have a material
adverse effect on the growth prospects and/or financial
position of the Group which may cause the Group to require
further funding.
•
•
•
•
•
PLANNING, DEVELOPMENT AND CONSTRUCTION RISKS –
Any delay or unexpected costs associated with planning,
construction and development activities may harm growth
prospects, future operating results and financial conditions.
Superloop requires access to both public and non-public
spaces to install and deliver services. Superloop must
negotiate access to areas that it cannot rely on its carrier
powers to access. The terms of access may be such that
the build is not economically viable (in the opinion of the
Board and management) or access may not be able to be
negotiated.
FUNDING - Superloop’s business is capital intensive in
nature, and the continued growth of the Group relies
on the acquisition and development of new fibre optic
telecommunications infrastructure and ongoing maintenance
of existing fibre optic telecommunications infrastructure.
Superloop requires sufficient access to debt and equity
capital to fund this expenditure. Failure to obtain capital
on favourable terms may hinder Superloop’s ability to
expand and pursue growth opportunities, which may reduce
competitiveness and have an adverse effect on the financial
performance, position and growth prospects of the Group.
Superloop’s continued ability to implement its business
plans effectively over time may depend in part on its ability
to raise future funds. There is no assurance that additional
funds will be available in the future and/or be secured on
reasonable commercial terms.
REGULATORY RISK – There is a risk that Government Policy
could directly affect the product offerings and competitive
landscape, particularly in markets where the Government
have significant investment in telecommunications assets.
Superloop also requires certain licences to operate in its
various jurisdictions and any modifications or cancellation of
any of these licences may impact its ability to operate in that
jurisdiction.
NETWORK DAMAGE – Any accidental damage from civil
works (cable cuts), intentional damage from vandalism or
terrorism and acts of God such as earthquakes or other
natural disasters may result in outages and damage to
Superloop’s network.
FOREIGN EXCHANGE RISK – Superloop operates in foreign
jurisdictions and as a result, fluctuations in applicable
Superloop Annual Report 2016
exchange rates could have an impact on the financial
position and performance of the Group.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs that occurred during the
year include:
• The acquisition on 16 October 2015 of APEXN Pty Ltd which
expanded the Group’s solutions in Australia through the pro-
vision of networking solutions and managed services focused
on supporting wholesale and channel partners;
• The acquisition of CINENET Systems Pty Ltd on 30 Novem-
ber 2015, which operates a specialised high-speed inter-
national data network catering specifically for the needs of
screen and broadcast media industries;
• Expansion into Hong Kong via an agreement to establish a
110km fibre optic network and operations in Hong Kong, with
the Group holding a 25 year indefeasible right of use over
the infrastructure, with two (2) further five (5) year options to
extend the length of the agreement;
• The development and launching of new product initiatives
including Superloop Wavelength and Superloop Ethernet
Backhaul.
MATTERS SUBSEQUENT TO THE END OF THE
FINANCIAL PERIOD
After balance date, on 13 July 2016, 725,814 options were issued
under the Group’s Executive Option Plan, consistent with the
resolution approved by shareholders on 21 June 2016, and on
13 July 2016, 196,068 performance rights were issued under the
Group’s Employee Rights plan.
On 15 July 2016, the Group completed the retail component of
the Entitlement Offer launched in June 2016, issuing an additional
6,109,637 shares for $12,830,238.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
OF OPERATIONS
The continued growth in transmission and storage of data should
underpin a likely demand for services provided by the Company,
including the Hong Kong network which is scheduled to be
operational during FY17.
The Board continues to evaluate potential investment and
network expansion opportunities in the Asia Pacific region,
based on underlying market dynamics and customer demand for
connectivity services.
DIVIDENDS
Dividends were neither paid nor declared during the year.
ENVIRONMENTAL REGULATION
The Group is not subject to any significant environmental laws.
INDEMFICATION OF OFFICERS
The Group has entered into standard deeds of indemnity and
insurance with the Directors. Pursuant to those deeds, the Group
Directors' Report
has undertaken, consistent with the Corporations Act 2001, to
indemnify each Director in certain circumstances and to maintain
directors and officers insurance cover in favor of the Director
for seven years after the Director has ceased to be a Director.
During the year, the Group paid a premium of $37,381
(2015 $33,118) to insure the directors and officers of the
Group against a liability incurred as a director or officer,
to the extent permitted by the Corporations Act 2001.
NON-AUDIT SERVICES
The Group may decide to employ the auditor (Deloitte) on assign-
ments additional to their statutory audit duties where the auditor's
expertise and experience with the Group are important. Details of
the amounts paid during the year to the Group’s external auditor,
Deloitte Australia, for non-audit services are set out in note 26 to
the financial statements.
The Board of Directors has considered the position and, in accor-
dance with advice received from the Audit and Risk Management
Committee, is satisfied that the provision of the non audit services
is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001. The directors are
satisfied that the provision of non audit services by the auditor,
as set out below, did not compromise the auditor independence
requirements of the Corporations Act 2001 for the following
reasons:
• all non audit services have been reviewed by the Audit and
Risk Management Committee to ensure they do not impact
the impartiality and objectivity of the auditor
• none of the services undermine the general principles relating
to auditor independence as set out in APES 110 Code of
Ethics for Professional Accountants..
PROCEEDINGS ON BEHALF OF THE GROUP
No person has applied to the Court under section 237 of the
Corporations Act 2001 for leave to bring proceedings on behalf of
the Group, or to 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 part of those proceedings.
No proceedings have been brought or intervened in on behalf
of the Group with leave of the Court under section 237 of the
Corporations Act 2001.
ROUNDING OF AMOUNTS
The Group is of a kind referred to in Class Order 98/100, issued
by the Australian Securities and Investments Commission, relating
to the ''rounding off'' of amounts in the financial report. Amounts
in the financial report have been rounded off in accordance with
that Class Order to the nearest dollar.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under
section 307C of the Corporations Act 2001 is set out on page 29.
11
Superloop Limited and controlled entities Information on Directors
BEVAN SLATTERY
DANIEL ABRAHAMS
Executive Chairman & Chief Executive Officer
Executive Director & Chief Infrastructure Officer
Appointed: 28 April 2014
Appointed Executive Director: 2 April 2015
EXPERIENCE AND EXPERTISE
EXPERIENCE AND EXPERTISE
Bevan Slattery is the Executive Chairman and CEO. Bevan
has a background in building successful Australian IT and
telecommunications companies and an earlier career in
administration in local and state government.
Prior to establishing Superloop, Bevan founded Megaport
in 2013 with the aim of becoming a global leader in the fast
growing elastic interconnection services market. The Company
successfully listed on the ASX in December 2015.
In 2010, Bevan founded NEXTDC, with a vision to become
Australia’s largest independent datacentre provider. As the
inaugural CEO of NEXTDC, Bevan oversaw its listing on the ASX,
overall design of its initial facilities and its initial facility rollout.
In 2002, Bevan co-founded PIPE Networks which grew to become
Australia’s largest Internet Exchange and Australia’s third largest
metropolitan fibre network provider with over 1,500km of fibre
in 5 cities connecting 80 data centres, 250 Telstra exchanges
and over 1000 buildings. In 2009, PIPE Networks completed
construction of Pipe Pacific Cable 1 (PPC-1), a $200 million
submarine cable system linking Sydney to Guam. PIPE Networks
was sold to TPG for an enterprise value of $420m in May 2010.
Bevan holds a Master of Business Administration (Hon.) from
Central Queensland University
OTHER CURRENT ASX DIRECTORSHIPS
Bevan is a director on the Board of Swimming Australia
Megaport Limited (ASX: MP1) – appointed 27 July 2015.
FORMER ASX DIRECTORSHIPS
NEXTDC Limited (ASX:NXT) - resigned 30 October 2013
Asia Pacific Data Centre Group Limited (ASX:AJD) - resigned 30
June 2014.
SPECIAL RESPONSIBILITIES
• Chairman
• Member of the Remuneration and Nomination Committee
INTERESTS IN SHARES AND OPTIONS
60,007,894 fully paid ordinary shares
725,814 share options
Daniel Abrahams is the Chief Infrastructure Officer of Superloop
and is also an Executive Director.
Daniel was formerly the Vice President & Chief Risk Officer at
Aurizon. Aurizon operates the world’s largest coal supply chain
in Central Queensland in addition to haulage interests in iron ore,
bulk commodities and freight across Australia.
Daniel brings a strong commercial approach and expertise across
strategy, finance, governance and risk management.
Daniel was the former Group Financial Controller at Energex
responsible for the preparation of the annual audited accounts
and commercial and financial advice. His prior roles with Suncorp
in audit, risk and capital management equipped him with a strong
focus on risk taking to generate returns for shareholders. He
also worked at Toyota (Tsusho) for 5 years in a variety of roles,
including as the Group’s Business Review Manager and as part of
the finance leadership team with APAC responsibilities.
Daniel completed a Bachelor of Business degree (Central
Queensland University) and has completed the CPA Program
and Graduate Diploma in Applied Corporate Governance with
the Governance Institute of Australia. He has been conferred
with FCPA and FGIA in recognition of his strong governance
experience.
OTHER CURRENT ASX DIRECTORSHIPS
Nil
FORMER ASX DIRECTORSHIPS
Nil
SPECIAL RESPONSIBILITIES
• Member of the Audit and Risk Committee
INTERESTS IN SHARES AND OPTIONS
1,162,000 fully paid ordinary shares
12
Superloop Annual Report 2016 Information on Directors
GREG BAYNTON
Independent Non-Executive Director
LOUISE BOLGER
Independent Non-Executive Director
Appointed: 28 April 2014
Appointed: 27 April 2015
EXPERIENCE AND EXPERTISE
EXPERIENCE AND EXPERTISE
Greg Baynton is the founder and Managing Director of Orbit
Capital, an investment and advisory company and holder of an
Australian Financial Services Licence. He has a background in
investment banking, infrastructure investment, and new projects
and has experience in IPOs and other capital raisings, mergers
and acquisitions, investor relations and corporate governance.
Louise Bolger is an experienced in-house telecommunications,
media and technology lawyer and company secretary.
Currently Louise is General Counsel and Company Secretary for
the ASX listed pre-paid cards issuer Emerchants Limited, and prior
to that was General Counsel and Company Secretary at Southern
Cross Media Group Limited and PIPE Networks.
He has considerable experience as a director of ASX-listed
companies. Among those, Greg is a former Director of Asia
Pacific Data Centre Limited, NEXTDC and of PIPE Networks.
Greg holds a Master of Business Administration (QUT),
a Master of Economic Studies (UQ), a Postgraduate
Diploma in Applied Finance & Investment (SIA),
and Bachelor of Business (Accountancy).
OTHER CURRENT ASX DIRECTORSHIPS
Graphitecorp Limited (ASX:GRA) – appointed 05 April 2012
Louise commenced her career in private legal practice before
continuing on to in-house roles with Telstra, Logica and Bank of
Queensland.
Louise holds a Bachelor of Laws (Hons) and a Bachelor of Arts
(Modern Asian Studies) from Griffith University.
OTHER CURRENT ASX DIRECTORSHIPS
Nil
FORMER ASX DIRECTORSHIPS
FORMER ASX DIRECTORSHIPS
Nil
COALBANK LIMITED (ASX:CBQ) – resigned 22 November 2013
Asia Pacific Data Centre Group Limited (ASX:AJD) – resigned 04
February 2015
NEXTDC Limited (ASX:NXT) – resigned 30 April 2014
Lamboo Resources Limited (ASX:LMB) – resigned 11
September 2014
SPECIAL RESPONSIBILITIES
• Chair of the Audit and Risk Committee
• Member of the Remuneration and Nomination Committee
INTERESTS IN SHARES AND OPTIONS
812,331 fully paid ordinary shares
SPECIAL RESPONSIBILITIES
• Chair of the Remuneration and Nomination Committee
INTERESTS IN SHARES AND OPTIONS
66,165 fully paid ordinary shares
13
Superloop Limited and controlled entities Information on Directors
MICHAEL MALONE
Independent Non-Executive Director
Appointed: 27 April 2015
EXPERIENCE AND EXPERTISE
Michael Malone is the former CEO of iiNet Limited, having founded
the company in 1993. During his tenure, iiNet became the second
largest broadband DSL ISP in Australia.
Michael has been recognised with a raft of industry accolades. In
2009 Michael was CEO of the Year in the Australian Telecom Awards
and National Customer Service CEO of the Year in the CSIA’s
Australian Service Excellence Awards. Michael was named a finalist
for WA Citizen of the Year and in 2011 he won the Ernst & Young
Entrepreneur of the Year Award. In April 2016 Michael was appointed
to the Board of NBN Co Limited.
OTHER CURRENT ASX DIRECTORSHIPS
NBN Co Limited – appointed 20 April 2016
Seven West Media Limited (ASX:SWM) - appointed 24 June
2015
SpeedCast International Limited (ASX:SDA) – appointed 14 July
2014
FORMER ASX DIRECTORSHIPS
iiNet Limited (ASX:IIN) – resigned 21 March 2014
SPECIAL RESPONSIBILITIES
• Member of the Audit and Risk Committee
INTERESTS IN SHARES AND OPTIONS
632,894 fully paid ordinary shares
RICHARD ANTHONY (TONY) CLARK
Independent Non-Executive Director
Appointed: 23 December 2015
EXPERIENCE AND EXPERTISE
Tony is an Emmy Award-winning Cinematographer as well
as co-founder and Director of Rising Sun Pictures (RSP) and
Cospective, and co-founder of CINENET Systems Pty Ltd.
Tony has a wealth of industry knowledge and experience
in digital media. His credits as a VFX Supervisor for RSP
include Alfonso Cuarón’s Gravity, Pirates of the Caribbean:
On Stranger Tides, The Sorcerer’s Apprentice, The Last
Mimzy, The Core and Harry Potter & the Goblet of Fire.
Tony is a 2010 recipient of an Academy Award for Scientific
& Technical Achievement as creator of the remote
collaboration tool cineSync. His deep understanding of
digital film became the foundation for the technology
spin-off Rising Sun Research (now Cospective).
Tony has served as a board member on the South Australian
Film Corporation, is currently on the board of Ausfilm and is
an active member of both AMPAS, the Academy of Motion
Picture Arts, and Sciences and the Visual Effects Society.
OTHER CURRENT ASX DIRECTORSHIPS
Nil
FORMER ASX DIRECTORSHIPS
Nil
SPECIAL RESPONSIBILITIES
Nil
INTERESTS IN SHARES AND OPTIONS
396,343 fully paid ordinary shares
14
Superloop Annual Report 2016 Information on Company Officers
PAUL JOBBINS
Joint Company Secretary
GREGORY BRYANT
Joint Company Secretary
Paul Jobbins is the Group’s General Manager, Corporate and
Strategy with responsibility for the Group’s corporate functions
including Finance, Legal, Talent and Culture and Investor Relations
as well as driving the Group’s corporate strategy.
Paul has previously worked in senior executive roles with several
ASX listed companies including NEXTDC Limited, Reverse Corp
Limited and Sunshine Gas Limited.
Paul holds a Bachelor of Business (Accountancy) from QUT, a
Graduate Diploma in Applied Finance and Investments from Finsia,
a Masters in Applied Finance from Macquarie University and is a
Chartered Accountant.
Gregory Bryant is the Chief Financial Officer of Superloop
Limited.
Gregory is a senior finance executive with over 20 years
experience in the financial services industry where he held
several executive management positions including Chief
Financial Officer for Suncorp Bank. Gregory has also worked
in senior finance roles for AMP Bank, the Australian National
Credit Union, and with a leading consultancy firm specialising in
Asset & Liability management.
Gregory holds a Bachelor of Commerce (Accountancy
Major) from the University of Wollongong, a Masters
in Applied Finance from Macquarie University and is
a CPA.
15
Superloop Limited and controlled entities Information on Directors
MEETING OF DIRECTORS
The number of meetings of the Group's Board of Directors and of each board committee held during the year, and the number of meetings
attended by each Director are as follows:
Meetings of committees
Meetings
of Directors
Audit and
Risk Management
Remuneration
and Nomination
A
18
18
18
18
14(1)
8
B
18
18
18
18
18
8
A
#N/A
5
5
B
#N/A
5
5
#N/A
#N/A
5
5
#N/A
#N/A
A
1
B
1
#N/A
#N/A
1
1
#N/A
#N/A
1
1
#N/A
#N/A
Bevan Slattery
Daniel Abrahams
Greg Baynton
Louise Bolger
Michael Malone
Richard Clark
A = Number of meetings attended
B = Number of meetings held during the time the Director held office or was a member of the committee during the year
N/A = Not applicable. Not a member of the relevant committee
(1) A number of special meetings of Directors were held for items requiring specific approvals at short notice during the year, and as a result Mr. Malone was unable to attend
some of these meetings.
16
Superloop Annual Report 2016 Remuneration
Report
CONTENTS
Message from the Chair of the Remuneration and Nomination Committee
1. Persons Covered by this Report
2. Overview of Remuneration Governance Framework
3. Director Remuneration
4. Executive Remuneration
5. Loans to Key Management Personnel
6. Employment terms for Key Management Personnel
7. Remuneration for FY16
8. Performance Outcomes for FY16
9. Summary of shares held by Key Management Personnel
10. Other transactions with Key Management Personnel
PAGE
18
19
20
20
20
21
22
23
24
27
27
The Remuneration Report, which forms part of the Directors’ Report,
sets out the remuneration arrangements for Directors and other Key
Management Personnel (KMP) of Superloop for the year ended 30
June 2016 (FY16), and is prepared in accordance with section 300A
of the Corporations Act 2001 (Corporations Act). The information in
this report has been audited as required by section 308(3C) of the
Corporations Act.
17
Superloop Limited and controlled entities Directors’ Report
Remuneration Report
MESSAGE FROM THE CHAIR OF THE REMUNERATION AND NOMINATION COMMITTEE
Dear Shareholders,
Welcome to the Superloop Group’s Remuneration Report for 2016, for which we seek your support.
Superloop was listed on the Australian Securities Exchange in June 2015 with the 2016 year
representing the Company’s first full financial year as a listed entity. Throughout the year a number
of strategically important milestones have been achieved.
Superloop’s vision, to be “a leading independent provider of connectivity services across the
Asia Pacific region”, is designed to support the creation of long term shareholder value. Pivotal to
Superloop’s success in the execution of this vision is the ability to attract and retain appropriate
people to lead the Company as we progress to being fully operational, and to help set the
foundation for sustainable and long term growth. The Company is in the process of establishing
a comprehensive remuneration policy, including at-risk short term and long term incentives, to
support the Group’s vision and strategy.
The role of the Remuneration and Nomination Committee is to assist the Board and make
recommendations on remuneration and related policies and practices including the remuneration
of senior management and non-executive Directors. A key principle which the Committee operates
by is to ensure that the remuneration framework is transparent, competitive and reasonable. The
Committee is overseeing the development of an appropriate remuneration policy designed to
ensure alignment between shareholder returns and performance related remuneration, including
designing a remuneration structure that ensures there is a direct link between remuneration and
performance, both Company and individual, that is ultimately aligned to shareholder interest.
We welcome your feedback on the development of our remuneration practices and reporting. We
thank you for your continued support and hope that you find this report useful.
Louise Bolger
Chair - Remuneration and Nomination Committee
Superloop Limited
18
Superloop Annual Report 2016 Remuneration Report
1. THE PERSONS COVERED BY THIS REPORT
Key Management Personnel (“KMP”) include Directors of the Group and Senior Executives. The term “Senior Executives” refer to the
Executive Chairman, CEO and those executives with responsibility for planning, directing and controlling the activities of the Group,
directly or indirectly.
NON-EXECUTIVE DIRECTORS
Name
Position
Greg Baynton
Louise Bolger
Michael Malone
Independent Non-Executive Director
Chair of the Audit and Risk Committee
Member of the Remuneration and Nomination Committee
Independent Non-Executive Director
Chair of the Remuneration and Nomination Committee
Independent Non-Executive Director
Member of the Audit and Risk Committee
Richard Anthony Clark
Independent Non-Executive Director
SENIOR EXECUTIVES
Name
Position
Bevan Slattery
Daniel Abrahams
Paul Jobbins
Steve Bond
Ryan Crouch
Executive Chairman
Chief Executive Officer (CEO)
Member of the Remuneration and Nomination Committee
Executive Director
Cheif Infastructure Officer (CIO)
Member of the Audit and Risk Committee
General Manager, Corporate and Strategy
Joint Company Secretary
General Manager, Sales and Marketing
Chief Technology Officer (CTO)
Matthew Gregg
General Manager, APEXNetworks and Customer Experience
Except as noted elsewhere in this report the named persons held their position for the whole financial year.
CHANGES SINCE THE END OF THE REPORTING PERIOD
There have been no changes to Key Management Personnel since the end of the reporting period.
19
Superloop Limited and controlled entities Remuneration Report
2. OVERVIEW OF REMUNERATION GOVERNANCE
FRAMEWORK
3. DIRECTOR REMUNERATION
3.1 DIRECTOR REMUNERATION POLICY
2.1 REMUNERATION AND NOMINATION
COMMITTEE CHARTER
The purpose of the Committee is to assist the Board in the
development and implementation of policies and practices
in relation to the appointment and remuneration of senior
management and non-executive Directors. This includes making
recommendations to the Board about the appointment of
new Directors (both executive and non-executive) and senior
management.
The committee’s functions include:
• development of criteria (including skills, qualifications and
experience) for Board candidates;
•
•
•
•
•
•
•
•
•
identification and consideration of possible candidates and
recommendation to the Board;
ensuring appropriate induction and continuing professional
development programs are implemented for Directors;
review of processes for succession planning for the Board,
CEO and other senior executives;
establishment of procedures, and recommendations to
the Chairman, for the proper oversight of the Board and
management;
ensuring the performance of each Director, and of
review and evaluation of market practices and trends on
remuneration matters;
recommendations to the Board about the Group’s
remuneration policies and procedures;
oversight of the performance of senior management and
non-executive Directors;
recommendations to the Board about remuneration of
senior management and non-executive Directors;
reviewing the Group’s reporting and disclosure practices
in relation to the remuneration of Directors and senior
executives.
Meetings are held at least once a year and more often as
required.
A copy of the Committee’s charter, which forms part of the
Corporate Governance Charter, is available on Superloop’s
website at www.superloop.com/investor.
2.2 SECURITIES TRADING POLICY
A securities trading policy (Trading Policy) has been adopted
by the Board to provide guidance to Directors, employees of
Superloop, and other parties who may have access to price
sensitive information, who may be contemplating dealing in
Superloop’s securities or the securities of entities with whom
Superloop may have dealings.
The Trading Policy is designed to ensure that any trading
in Superloop’s securities is in accordance with the law. Any
non-compliance with the Trading Policy will be regarded as an
act of serious misconduct. The Trading Policy is available on
Superloop’s website at www.superloop.com/investor.
20
Superloop’s Director remuneration policy is to
provide fair remuneration that is sufficient to attract
and retain non-executive Directors with appropriate
experience, knowledge, skills and judgment.
The Directors decide the total amount paid to each Director
as remuneration for their services. Under the Listing Rules,
the total amount paid to all non-executive Directors must
not exceed in any financial year the amount fixed in a
general meeting of Superloop. This amount is currently
$750,000. Non-executive Directors fees include base fees
and fees for membership of board committees, and where
relevant are inclusive of superannuation contributions.
Non-executive Directors may be paid such additional
or special remuneration where a Director performs
extra work or services which are not conducted in
their capacity as a Director of Superloop.
Actual fees for non-executive Directors in FY16
were $251,129 (FY15 $24,583, paid from the
Company’s ASX listing date of 04 June 2015).
There are no retirement benefit schemes for Directors
other than statutory superannuation contributions.
3.2 NON-EXECUTIVE DIRECTOR FEES
The current director fees per annum, including statutory
superannuation, are:
Base Fees
•
•
•
Chairman
Non-executive Director
Committee member
$75,000
$60,000
$10,000
To preserve independence, non-executive Directors do not
receive incentive or performance based remuneration.
Non-executive Directors are entitled to be reimbursed for travel
and other expenses incurred while carrying out their duties as a
director.
4. EXECUTIVE REMUNERATION
4.1 SENIOR EXECUTIVE REMUNERATION POLICY
Superloop’s executive remuneration policy is under development,
including the development of at-risk short term and long
term incentives. As the policy is developed, Superloop will
ensure that the remuneration framework will be transparent,
competitive and reasonable. Development of an appropriate
remuneration policy will strengthen the alignment between
shareholder returns and performance related remuneration,
ensuring that the final remuneration structure contains a direct
link between remuneration and performance (both Company and
individual) that is ultimately aligned to shareholder interest. The
remuneration framework consists of three key components:
•
•
•
Short term incentives
Long term incentives
Fixed remuneration
Superloop Annual Report 2016
Remuneration Report
Executive Option Plan
At a general meeting of shareholders held on 21 June 2016,
shareholders approved an Executive Option Plan.
The Executive Option Plan is open for participation by Directors,
executives and senior management. The Directors of Superloop
believe an Executive Option Plan is an important part of a
comprehensive remuneration strategy. The grant of options to
participants under the Executive Option Plan further aligns the
interests of the Company’s senior management and shareholders
and helps preserve the Company’s cash funds.
The Directors are empowered to operate the Executive Option
Plan and grant options to Eligible Participants in accordance with
the Listing Rules and on the terms and conditions summarised in
the Schedule. The Executive Option Plan is administered by the
Board, which has an absolute discretion to determine appropriate
procedures for its administration and resolve questions of fact
or interpretation and formulate special terms and conditions in
addition to those set out in the plan.
All options are to be offered to Participants for no consideration.
The offer must be in writing and specify, amongst other things,
the number of options for which the Participants may accept,
the year within which the options may be exercised and any
conditions to be satisfied before exercise, the option expiry
date (as determined by the Board) and the exercise year for the
options.
The options shall lapse upon the earlier of the date specified by
the Board or events contained in the Executive Option Plan rules,
including termination of employment or resignation, redundancy,
death or disablement.
At 30 June 2016, no options had been issued.
After balance date, on 13 July 2016, 725,814 options were issued,
consistent with the resolution approved by shareholders on 21
June 2016
5. LOANS TO KEY MANAGEMENT PERSONNEL
Certain key management personnel were eligible to participate
in a loan scheme provided by a related party to enable them to
acquire shares as part of a private capital raising undertaken
by the Group in FY15, prior to listing on the Australian
Securities Exchange (“ASX”). The terms and conditions of the
loan agreement are commercial in nature, including a market
based interest rate. Under the terms and conditions of the loan
agreement, if an employee resigns or leaves the Group before the
end of the original loan term, the loan plus any accrued interest is
repayable immediately. The loans are unsecured.
The Group does not guarantee or have any obligations with
respect to the loan agreement between the employee and the
related party.
As at 30 June 2016, Executive Director, Mr Daniel Abrahams,
owed $400,000 to the related party.
During the year, shareholders approved two longterm incentive plans,
During the year, shareholders approved two long term incentive plans,
being the Executive Option Plan and the Employee Rights Plan.
being the Executive Option Plan and the Employee Rights Plan.
4.2 SHORT TERM INCENTIVE
POLICY AND PROCEDURE
The Group has not yet implemented a formal short term incentive
policy or scheme. However, certain individuals have individual
performance incentives linked to specific strategic objectives.
4.3 LONG TERM INCENTIVE POLICY AND
PROCEDURE
During the year, the shareholders approved two long term
incentive plans. The objectives of the long term incentive plans
are to:
a. establish a method by which Eligible Participants
can participate in the future growth and profitability of
the Company;
b. provide an incentive and reward for Eligible Participants
for their contributions to the Company; and
c. attract and retain a high standard of managerial and
technical personnel for the benefit of the Company.
The Company’s Securities Trading Policy prohibits executives
from entering into transactions which limit the economic risk
related to equity-based remuneration schemes without written
clearance.
Employee Rights Plan
At the 2015 Annual General Meeting held on 24 November 2015,
shareholders approved an Employee Rights Plan. The Directors
are empowered to operate the Employee Rights Plan and grant
Performance Rights to Eligible Participants in according with the
Listing Rules and on the terms and conditions summarised in the
plan.
The Board may offer any number of Performance Rights to an
Eligible Participant on the terms the Board decides, subject to the
Employee Rights Plan rules and any applicable law or the Listing
Rules. An Offer is required to set out details such as the total
number of Performance Rights being offered, the vesting date
and vesting conditions, any disposal restrictions, and other terms
attaching to the Performance Rights.
A Participant is not required to pay for the grant of any
Performance Rights or the issue of Superloop Shares on vesting.
Once the Performance Rights vest, the Participant will be issued
Superloop Shares, unless Superloop decides to provide a cash
payment in lieu of Superloop Shares. A Participant does not have
the right to participate in dividends on Superloop Shares until
Superloop Shares are issued after vesting of the Performance
Rights. A Participant does not have the right to vote in respect of
a Performance Right.
At 30 June 2016, no performance rights had been issued.
After balance date, on 13 July 2016, 196,068 performance rights
were issued.
21
Superloop Limited and controlled entities
Remuneration Report
6. EMPLOYMENT TERMS FOR KEY MANAGEMENT
PERSONNEL
6.1 DIRECTORS
On appointment to the Board, all non-executive Directors enter
into agreements with the Company in the form of a letter of
appointment. The agreements summarise the key terms of
engagement including compensation relevant to the office of
director.
Each appointment has no initial term, has no notice period and is
not subject to any termination benefits.
Subject to ASX Listing Rules, directors must retire from office
at the conclusion of the third annual general meeting after the
Director was last elected and will be eligible for re-election at that
annual general meeting.
Upon cessation of a Director’s appointment, the Director will be
paid his or her Director’s fees on a pro-rata basis, to the extent
that they are unpaid, up to the date of cessation.
6.1 EXECUTIVE CHAIRMAN AND
CEO REMUNERATION
6.2 SENIOR EXECUTIVES
Remuneration and other terms of employment for other senior
executives are formalised in employment agreements. Key terms of
those employment agreements are as follows:
Name
Duration of
Contract
Notice
Period
Termination
payments (1)
Daniel
Abrahams
Paul Jobbins
3 years to
March 2018
The shorter of 6
months, or the
remaining term
The shorter of 6
months, or the
remaining term
No fixed term
6 months
6 months
Steve Bond
No fixed term
3 months
3 months
Ryan Crouch
No fixed term
3 months
3 months
Matthew Gregg
No fixed term
3 months
3 months
Mr Slattery is the Chairman of the Board and CEO of the
Superloop Group. Mr Slattery commenced employment as CEO
for the Group on 23 February 2016.
(1) Base salary payable if the Company terminates the executive without notice or
without cause.
Mr Slattery’s remuneration package consists of:
• Chairman of the Board fee of $75,000;
• Committee membership fee of $10,000;
•
•
an annual salary via a service agreement (including
superannuation) of $120,000;
incentive payments via an options package that was
approved by shareholders at a general meeting held on 21
June 2016.
The options package consists of two components:
• CEO package: 395,898 options which vest and
•
are exercisable on 1st March 2017 representing part
remuneration as CEO, which at the time of approval were
valued at $180,000;
Incentive arrangement: 329,916 options which vest
and are exercisable on 1st March 2017 subject to the
meeting of performance hurdles. At the time of approval,
the options were valued at $150,000.
The performance hurdles for the incentive arrangement are
as follows:
• EBITDA positive based on contracted recurring revenue
including Hong Kong costs by 31 December 2016;
• Secure a corporate debt facility on terms and parameters
•
•
satisfactory to the Board by 31 August 2016;
Initial net promoter system in place by 30 June 2016; and
Following the recent acquisitions of APEXN and CINENET
Systems, complete integration of companywide system for
provisioning, billing and accounting by 30 June 2016.
22
Superloop Annual Report 2016
Remuneration Report
7. REMUNERATION FOR FY16
The tables below outline the remuneration received by Key Management Personnel (KMP) during the year.
This information is disclosed in accordance with the Corporations Act 2001 and the Australian Accounting Standards.
DIRECTORS
Fees and remuneration received by the Directors:
Short term employee benefits
Salary/
Fees
$
Other
Benefits
$
STI
$
Total
$
Post
employ-
ment
benefits
Super-
annua-
tion
$
Long-term
emplyee benefits
Long
Service
Leave
$
LTI
$
Total
Remuration
package
(TRP)
$
% of TRP
linked to
perfor-
mance
%
-
-
-
-
N/A
N/A
Executive Directors
Bevan
Slattery(1)
Daniel
Abrahams(2)
2016
178,082
2015
14,840
2016
273,978
2015
68,495
Non-Executive Directors
-
-
-
-
-
-
178,082
16,918
14,840
1,410
3,240
277,218
26,028
810
69,305
6,507
Michael
Malone
Louise
Bolger
Gregory
Baynton
Richard
Anthony
Clark(3)
2016
70,000
N/A
2015
5,833
N/A
2016
63,927
N/A
2015
5,327
N/A
2016
80,000
N/A
2015
6,667
N/A
2016
28,428
N/A
2015
N/A
N/A
-
-
-
-
-
-
-
-
70,000
5,833
-
-
63,927
6,073
N/A
5,327
506
N/A
80,000
6,667
-
-
N/A
N/A
28,428
2,701
N/A
N/A
-
N/A
TOTAL
2016
694,415
TOTAL
2015
101,162
-
-
3,240
697,655
51,720
810
101,972
8,423
-
-
(1) On 23 February 2016, Mr Slattery became the CEO
(2) On 23 February 2016, Mr Abrahams' role changed from CEO to Chief Infrastructure Officer
(3) Mr Clark commenced as a Director of Superloop on 23 December 2015
-
-
-
-
-
-
-
-
-
-
-
-
-
-
195,000
16,250
303,246
75,812
70,000
5,833
70,000
5,833
80,000
6,667
31,129
N/A
749,375
110,395
-
-
-
-
-
-
-
-
-
-
-
-
-
-
23
Superloop Limited and controlled entities Remuneration Report
KEY MANAGEMENT PERSONNEL
Fees and remuneration received by the Key Management Personnel:
Short term employee benefits
Long-term emplyee
benefits
Salary/
Fees
$
Other
Benefits
$
STI
$
53,981
N/A
20,999
N/A
-
N/A
-
N/A
-
N/A
-
N/A
Post
employment
benefits
Super
annuation
$
4,455
N/A
1,758
N/A
Total
$
53,981
N/A
20,999
N/A
Total
Remur-
ation
package
(TRP)
$
% of TRP
linked
to
perfor-
mance
%
Long
Service
Leave
$
-
58,436
N/A
-
N/A
N/A
22,757
N/A
-
N/A
-
N/A
LTI
$
-
N/A
-
N/A
114,158
100,000
-
214,158
10,845
-
30,708
255,711
39.1%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
114,158
100,000
-
214,158
10,845
-
30,708
255,711
39.1%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Senior Executives
Paul
Jobbins(1)
Steven
Bond(2)
Ryan
Crouch(3)
Matthew
Gregg(3)
2016
2015
2016
2015
2016
2015
2016
2015
Former Senior Executives
Matthew
Whitlock(4)
Gregory
Bryant(5)
Michael
Glynn(6)
Murray
Hankinson(7)
TOTAL
TOTAL
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
144,282
150,000
45,874
179,522
55,322
48,439
42,501
187,821
-
-
-
-
-
-
-
-
294,282
45,874
2,548
182,070
810
56,132
48,439
42,501
-
-
-
13,707
4,358
17,055
5,256
4,602
4,038
-
-
-
-
-
-
-
307,989
48.7%
-
-
-
-
-
-
50,232
199,125
61,388
53,041
46,539
-
-
-
-
-
-
187,821
17,843
-
205,664
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
863,360
350,000
2,548
1,215,908
143,697
-
810
144,507
81,110
13,652
-
-
61,416
1,358,434
25.8%
-
158,159
-
1) Mr Jobbins commenced employment with Superloop on 12 April 2016
(2) Mr Bond commenced employment with Superloop on 30 May 2016
(3) Mr Crouch & Mr Gregg commenced employment with Superloop on 16 October 2015, following the Group's acquisition of APEXN Pty Ltd
(4) Mr Whitlock commenced employment with Superloop on 10 April 2015. Following an internal management re-organisation on 12 April 2016, Mr Whitlock as Chief
Operating Officer, reports to Chief Infrastructure Officer, Mr Daniel Abrahams, and for the purpose of this report is no longer considered Key Management Personnel
(5) Mr Bryant commenced employment with Superloop on 26 March 2015. Following an internal management re-organisation on 12 April 2016, Mr Bryant as Chief Financial
Officer, reports to GM, Corporate & Strategy, Mr Paul Jobbins, and for the purpose of this report is no longer considered Key Management Personnel
(6) Mr Glynn joined following the acquisition of Superloop (Australia) Pty Ltd on 27 March 2015, and ceased to be a Senior Executive on 12 October 2015 following the
appointment of Mr Hankinson
(7) Mr Hankinson was employed for the period 12 October 2015 to 23 June 2016
8. PERFORMANCE OUTCOMES FOR FY16
The following table outlines the performance of the Company over the 2016 financial year and the previous period since the
company was incorporated. Since listing in June 2015, with an IPO share price of $1.00, Superloop Limited’s share price has risen
to $2.35 at 30 June 2016.
24
Superloop Annual Report 2016 Year ended
30 June
Net loss
Dividends paid
Share price at start of year
Share price at end of year
Remuneration Report
2015*
($1,193,442)
-
$1.00
$1.94
2016
($7,164,110)
-
$1.94
$2.35
* 2015 includes the period from 28 April 2014 to 30 June 2015. Share price at start of the year refers to the issue price of shares in the Company’s Initial Public Offering in
June 2015.
The 2016 financial year was the Company’s first full financial year since listing. Consistent with the early stage of the Company’s
development, key strategic objectives for the year included the establishment and provisioning of the Group’s dark fibre
infrastructure networks in Australia and Singapore, the development of core operating systems and the recruitment of key personnel
able to pursue these objectives. Superloop has invested in the establishment of administrative, customer service, sales, marketing,
engineering and networking functions which will allow the Company to leverage the significant opportunities available in the Asia
Pacific region.
With the provisioning of the Australian and Singapore networks from September 2015, the Group has been able to generate revenue
from its initial customers. The acquisitions of APEXN Pty Ltd in October 2015 and CINENET Systems Pty Ltd in November 2015
added significant earning capacity through those companies’ existing customer bases, infrastructure, intellectual property and
talent. The Group also began the strategic expansion of Superloop’s network into Hong Kong, with an agreement entered into in
December 2015 for the construction of and access to a 110km fibre optic network. A platform has now been established from which
earnings will grow.
Ongoing strategic objectives for the Group continue to relate to the construction and provisioning of core infrastructure assets
in Singapore, Hong Kong and Australia. In addition, utilisation of the networks by generating sales to key industry segments of
financial services, digital media and telecommunications providers, will deliver an increasing return on the Group’s investment.
Future performance outcomes will depend on the achievement of these strategic objectives. The remuneration framework being
developed will support that achievement for future financial years, leading to the continued creation of shareholder value.
During the year, the following short-term incentives arrangements were in place:
Name
Grant
date
Performance
Criteria
Ryan
Crouch
16 October
2015
Retention of
employment post
acquisition of
APEXN Pty Ltd
Matthew
Gregg
16 October
2015
Matthew
Whitlock
10
November
2015
Retention of
employment post
acquisition of
APEXN Pty Ltd
Seven key project
milestones
in relation to
construction,
installation, rollout
and commissioning
of the Group’s
network assets
Contribution
to strategic
objectives
To ensure an
orderly transition
of ownership of
APEXN Pty Ltd
and successful
integration into the
Superloop Group
To ensure an
orderly transition
of ownership of
APEXN Pty Ltd
and successful
integration into the
Superloop Group
Development of
the Group’s core
infrastructure
assets being the
initial networks
strategically
positioned to
capitalise on market
demand dynamics
Measurements
Form of
Incentive
Amount
Percentage of
grant paid
Executive to remain
actively employed and
in compliance with the
Group’s policies and
procedures
Executive to remain
actively employed and
in compliance with the
Group’s policies and
procedures
Development of
the Group’s core
infrastructure assets
being the initial
networks strategically
positioned to capitalise
on market demand
dynamics
Cash bonus
$100,000
100%
Cash bonus
$100,000
100%
Cash bonus
$200,000
75%
(25% subject
to future dated
performance
milestones)
Mr Whitlock is eligible for short term cash incentive payments of up to a further $50,000 during the 2017 financial year subject to
achieving project milestones in relation to the on-net connection of enterprise buildings in Singapore and the construction of the
Company’s Hong Kong fibre network. Following an internal management reorganisation on 12 April 2016, he is no longer considered
Key Management Personnel.
There have been no alterations to any of the terms or conditions of the grants since grant date.
25
Superloop Limited and controlled entities Remuneration Report
In addition to the incentive arrangement described above for Mr Slattery, refer section 6.2, the following short term incentive
arrangements are currently in place for the 2017 financial year:
Name
Grant
date
Performance
Criteria
Contribution
to strategic
objectives
Measurements
Form of
Incentive
Amount
Percentage of
grant paid
Paul
Jobbins
12 April
2016
Meeting group
earnings targets and
funding targets as
well as completion
of specific projects
Meeting earnings
and funding targets
allows the Company
to expand and
pursue growth
opportunities
Executive to remain
actively employed and
in compliance with the
Group’s policies and
procedures
Cash bonus Nil
$35,000
Steven
Bond
30 May
2016
Meeting specific
sales targets,
developing product
and marketing plans
and development of
sales team
Meeting sales targets
and the successful
development
of product and
marketing plans
leads to the
generation of
earnings in line with
budgets and market
expectations
Successful
achievement of
objectives
Cash bonus Nil
$100,000
After the reporting period, on 13 July 2016, Performance Rights were issued in accordance with the Employee Rights Plan to senior
executives. The Performance Rights outlined in the table below are considered long term incentive arrangements provided as part of
the senior executive’s remuneration for the 2017 financial year and beyond:
Name
Date of
issue
No. of Rights
granted/ to be
issued
No. of
Rights
vested
Issue price of
shares
Fair value of right
at grant date ($)
Vesting date
Expiry date
of rights
13 July 2016
4,150
13 July 2016
4,149
Paul
Jobbins
13 July 2016
13,227
13 July 2016
13,228
13 July 2016
13,227
13 July 2016
13,228
Steven
Bond
Ryan
Crouch
Matthew
Gregg
13 July 2016
4,150
13 July 2016
4,149
13 July 2016
4,150
13 July 2016
4,149
13 July 2016
4,150
13 July 2016
4,149
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2.41
2.41
2.41
2.41
2.41
2.41
2.41
2.41
2.41
2.41
2.41
2.41
15 September
2017
15 September
2017
15 September
2018
15 September
2018
15 April 2017
15 April 2017
15 April 2018
15 April 2018
15 April 2019
15 April 2019
15 April 2020
15 April 2020
15 September
2017
15 September
2017
15 September
2018
15 September
2018
15 September
2017
15 September
2017
15 September
2018
15 September
2018
15 September
2017
15 September
2017
15 September
2018
15 September
2018
26
Superloop Annual Report 2016 Remuneration Report
9. SUMMARY OF SHARES HELD BY KEY MANAGEMENT PERSONNEL
The tables below outlines the movement in shareholdings by Key Management Personell during the year.
Opening
Balance
30 June 2015
Balance
at date of
appointment
Received
as part of
Remuneration
Additions
Disposals
Other
Movements
Closing
Balance
30 June 2016
Directors
Bevan Slattery
60,000,000
Daniel Abrahams
1,050,000
Gregory Baynton
Louise Bolger
Michael Malone
Richard Anthony
Clark(1)
Executives
Paul Jobbins
Steven Bond
Ryan Crouch
Matthew Gregg
695,000
50,000
625,000
-
-
-
-
-
Former Key Management Personnell
Matt Whitlock (5)
120,000
Michael Glynn (5)
100,000
Gregory Bryant(5)
31,250
-
-
-
-
-
338,906
5,000
5,000
448,833
448,833
-
-
-
TOTAL
62,671,250
1,246,572
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,894
7,894
15,788
7,894
7,894
7,894
2,484
-
7,894
-
-
-
7,894
73,530
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
60,007,894
1,057,894
710,788
57,894
632,894
346,800
7,484
5,000
456,727
448,833
(120,000)
(100,000)
(39,144)
-
-
-
(259,144)
63,732,208
(1) Mr Clark commenced as a Director of Superloop on 23 December 2015
(2) Mr Jobbins commenced employment with Superloop on 12 April 2016
(3) Mr Bond commenced employment with Superloop on 30 May 2016
(4) Mr Crouch & Mr Gregg commenced employment with Superloop on 16 October 2015, following the Group's acquisition of APEXN Pty Ltd
(5) The other movements are not due to disposal of shares, but are as a result of these individuals no longer considered Key Management Personnel for the purpose of
this report.
10. OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
There were no other transactions with key management personnel not otherwise disclosed in the report.
27
Superloop Limited and controlled entities Directors' Report
SHARES UNDER OPTION OR PERFORMANCE RIGHTS
Details of unissued shares or interest under option at the date of this report are:
Date of Issue
No. of shares
under option
Class of shares
Exercise price of
option
Vesting date
Expiry date of
options
13 July 2016
13 July 2016
395,898
Ordinary
$2.00
1 March 2017
1 March 2018
329,916
Ordinary
$2.00
1 March 2017(1)
1 March 2018
(1) These share options can only be execerised once certain performance hurdles are met.
The options are subject to the terms and conditions as set out in the Executive Option Plan. The holder of these options does not have
the right, by virtue of the option, to participate in any share issue or interest issue of the company.
Details of unissued shares or interest under performance rights at the date of this report are:
Date of issue
13 July 2016
13 July 2016
13 July 2016
13 July 2016
13 July 2016
13 July 2016
Number of Rights
granted / to be
issued
Class of
shares
Issue price of
shares
Vesting
date
Expiry date of
rights
13,227
71,599
13,228
71,559
13,227
13,228
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
-
-
-
-
-
-
15 April 2017
15 April 2017
15 September 2017
15 September 2017
15 April 2018
15 April 2018
15 September 2018
15 September 2018
15 April 2019
15 April 2019
15 April 2020
15 April 2020
Performance Rights are subject to the terms and conditions as set out in the Employee Rights Plan. The holders of the Rights are
not entitled, by virtue of the Performance Right, to participate in any share issue or interest issue of the company. Each Performance
Right entitles the holder, upon vesting, to be issued one Ordinary share. The participant must be an eligible employee on the vesting
date to for the rights to vest.
This report is made in accordance with a resolution of the Board of Directors, in accordance with section 298(2) of the Corporations
Act 2001.
On behalf of the Directors
Bevan Slattery
Executive Chairman & Chief Executive Officer
29 August 2016
28
Superloop Annual Report 2016 Deloitte Touche Tohmatsu
ABN 74 490 121 060
Riverside Centre
Level 25
123 Eagle Street
Brisbane QLD 4000
GPO Box 1463
Brisbane QLD 4001 Australia
Tel: +61 7 3308 7000
Fax: +61 (0) 3308 7004
www.deloitte.com.au
The Board of Directors
Superloop Limited
Level 17
333 Ann Street
Brisbane
Queensland
4000
29 August 2016
Dear Board Members
Superloop Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of Superloop Limited.
As lead audit partner for the audit of the financial statements of Superloop Limited for the
financial year ended 30 June 2016, I declare that to the best of my knowledge and belief, there
have been no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
R G Saayman
Partner
Chartered Accountant
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
29
Corporate Governance Statement
CORPORATE GOVERNANCE PRINCIPLES – OVERVIEW
The following statement sets out the corporate governance framework adopted by the Board of Directors (“the Board”) of Superloop
Limited. The Board is dedicated to ensuring its policies and procedures in the critical area of corporate governance meet high levels of
disclosure and compliance.
As a Company listed on the Australia Securities Exchange (“ASX”), Superloop is required either to apply the recommendations
contained within the ASX Corporate Governance Council’s (“ASX CGC”) Corporate Governance Principles and Recommendations with
2010 Amendments (3rd Edition) (“ASX 3rd Edition Recommendations”) or disclose any differences to them. The Board has reported
against ASX 3rd Edition Recommendations for the financial year ended 30 June 2016.
Principle 1 - Lay solid foundations for managment
and oversight
Compiles
Note
1.1 Companies should disclose the roles and
responsibilities of its board and management, and those
which are expressly reserved to the board and those
delegated to senior management
a
The Board is responsible for the overall corporate
governance of the Company.
The role of the Board and delegation to management have
been formalised in the Corporate Governance Charter
(“Charter”) which outlines the main corporate governance
practices in place for the Company and to which the Board
and each Director are committed. The conduct of the Board
is also governed by the Company’s constitution, and where
there is inconsistency with that document, the constitution
prevails to the extent of the inconsistency. The Charter will
be reviewed and amended from time to time as appropriate
taking into consideration practical experience gained in
operating as a listed company.
The Company completes police checks, insolvency and
banned director searches in relation before appointing
directors.
Material information relevant to a decision to elect or re-
elect a director, including biographical details and relevant
qualifications and skills brought to the Board, is disclosed
in the notice of meeting provided to shareholders for each
Annual General Meeting.
The Company has entered into written agreements with each
director and senior executive.
This is consistent with the Charter and corporate structure of
the Company.
The Company Secretary has a direct relationship with the
Board in relation to these matters.
The Company does not have a diversity policy. The Board
is committed to fostering a corporate culture that embraces
diversity, however the Board considers that because of the
size and the nature of the Company it is not appropriate at
this time to set measurable objectives to achieve gender
diversity.
At year end, the respective proportions of men and women
across the organisation was as follows:
Board: 5 men, 1 woman
Senior executives: 5 men, 0 women
Whole organisation: 36 men, 14 women
The Board has adopted a charter establishing the
requirements to undertake performance reviews at least
annually. Board performance has been evaluated during the
2016 financial year.
1.2 Undertake appropriate checks before appointing
a person as a director or putting forward a candidate
for election, and provide shareholders with all material
information relevant to a decision on whether or not to
elect or re-elect a director.
1.3 Have a written agreement with each director
and senior executive setting out the terms of their
appointment
1.4 The company secretary should be accountable
directly to the Board, through the chair, on all matters to
do with the proper functioning of the board.
1.5 Establish a diversity policy and disclose the policy
or a summary of that policy. The policy should include
requirements to establish measurable objectives for
achieving gender diversity and to assess annually both
the objectives and progress in achieving them, for
reporting against in each reporting period.
Disclose at the end of each reporting period the
measurable objectives for achieving gender diversity
and progress towards achieving them
a
a
a
Does not
comply
1.6 Have a process for periodically evaluating the
performance of the Board, its committees and individual
directors, and disclose that process and, at the end
of each reporting period, whether such performance
evaluation was undertaken in that period.
a
30
Superloop Annual Report 2016 Corporate Governance Statement
1.7 Have a process for periodically evaluating the
performance of the company’s senior executives, and
disclose that process and, at the end of each reporting
period, whether such performance evaluation was
undertaken in that period.
a
The Board’s broad function is to formulate strategy
and set financial targets for the Company, monitor the
implementation and execution of strategy and performance
against financial targets, appoint and oversee the
performance of executive management, and generally take
an effective leadership role in relation to the Company.
The Chairman, with assistance from the Remuneration and
Nomination Committee, annually assesses the performance
of Directors and senior executives, and the Chairman’s
performance is assessed by at least 2 independent non-
executive Directors.
Principle 2 - Structure of the board to add value
Compiles
Note
2.1 The Board should have a nomination committee,
which has at least three members, a majority of
independent directors and is chaired by an independent
director. The Company should disclose the charter of
the committee, the members of the committee and the
number of times the committee met throughout the
period with the individual attendances of the members
at those meetings.
a
A Remuneration and Nomination Committee has been
established with its own Charter. A copy of the Committee’s
charter, which forms part of the Corporate Governance
Charter, is available on Superloop’s website at www.
superloop.com/investor.
2.2 Have and disclose a board skills matrix, setting out
what the board is looking to achieve in its membership.
Partially
2.3 Disclose the names of the directors that the
Board considers to be independent directors, and an
explanation of why the Board is of that opinion if a factor
that impacts on independence applies to a director, and
disclose the length of service of each director.
2.4 A majority of the Board should be independent
a
a
2.5 The chair of the Board should be an independent
director and should not be the CEO.
Does not
comply
The committee consists of:
- Ms Louise Bolger (committee Chair), Independent non-
executive Director,
- Mr Greg Baynton, Independent non-executive Director, and
- Mr Bevan Slattery, Executive Chairman and CEO.
Refer to the Directors’ Report for the number of meetings
held during the year and the attendance of the members at
those meetings.
The Company has established a charter for the
Remuneration and Nomination Committee which sets out the
Committee’s responsibility with respect to the mix of skills,
expertise and experience of current and proposed Board
members.
Together, the current Directors have a broad range of
experience, expertise, skills, qualifications and contacts
relevant to the Company and its business. However at this
stage the Company has not disclosed a board skills matrix.
Ms Louise Bolger (appointed 27 April 2015)
Mr Michael Malone (appointed 27 April 2015)
Mr Greg Baynton (appointed 28 April 2014)
Mr Richard Clark (appointed 23 December 2015)
While Mr Baynton has had a long business relationship with
Mr Slattery, as co-directors and investors of PIPE Networks
Limited and NEXTDC Limited, the Board does not believe
that those relationships influence Mr Baynton to extent that
he ought not be classified as independent.
The Company currently has a six member Board, of whom
four (Ms Louise Bolger, Mr Greg Baynton, Mr Michael
Malone and Mr Richard Clark) are independent non-
executive Directors.
The Chairman and CEO, Mr Bevan Slattery, is an Executive
Director, and is not independent.
The Board believes that the non-independence of the
Chairman and CEO does not impede proper oversight,
particularly having regard to the fact that a majority of the
Board are independent non-executive Directors.
2.6 There should be a program for inducting new
directors and providing appropriate professional
development opportunities for directors to develop and
maintain the skills and knowledge needed to perform
their role as a director effectively.
a
This is consistent with the Board Charter and processes
implemented by Superloop.
31
Superloop Limited and controlled entities Corporate Governance Statement
Principle 3 - Act ethical and responsibly
3.1 Have a code of conduct for the Board, senior
executives and employees, and disclose that code or a
summary of that code.
Compiles
a
Note
The Company has adopted a Code of Conduct, which sets
out a framework to enable Directors to achieve the highest
possible standards in the discharge of their duties and to
give a clear understanding of best practice in corporate
governance.
The Code of Conduct forms part of the Corporate
Governance Charter and is available at the Company’s
website at www.superloop.com/investor
Principle 4 - Safeguard integrity in corporate
reporting
Compilies
Note
Partially
An Audit and Risk Committee has been established with its
own Charter. A copy of the Committee’s charter, which forms
part of the Corporate Governance Charter, is available on
Superloop’s website at www.superloop.com/investor.
4.1 The Board should have an audit committee, which
consists of only non-executive directors, a majority of
independent directors, is chaired by an independent
chairman who is not chairman of the Board, and has
at least three members. The Company should disclose
the charter of the committee, the relevant qualifications
and experience of members of the committee and the
number of times the committee met throughout the
period with the individual attendances of the members
at those meetings.
The committee consists of:
- Mr Greg Baynton, (committee Chair) Independent non-
executive Director,
- Mr Michael Malone, Independent non-executive Director,
and
- Mr Daniel Abrahams, Executive Director and CIO.
The relevant qualifications and experience for each
committee member are disclosed in the Directors’ Report.
The Company notes that Mr Abrahams has significant
experience in audit, governance and risk management.
The number of meetings held during the year and the
attendance of the members at those meetings is also
disclosed in the Directors’ Report.
This is consistent with the approach to be adopted by the
Audit & Risk Management Committee and Board.
Superloop’s auditor will be requested to attend the AGM and
shareholders will be entitled to ask questions in accordance
with the Corporations Act and these Guidelines.
4.2 The Board should, before approving financial
statements for a financial period, receive a declaration
from the CEO and CFO that, in their opinion, the
financial records have been properly maintained
and that the financial statements comply with the
appropriate accounting standards and give a true and
fair view of the financial position and performance of the
Company, formed on the basis of a sound system of risk
management and internal controls, operating effectively.
4.3 The Company’s auditor should attend the AGM and
be available to answer questions from security holders
relevant to the audit.
a
a
Principle 5 - Make timely and balanced disclosure
Complies
Note
5.1 Have a written policy for complying with continuous
disclosure obligations under the Listing Rules, and
disclose that policy or a summary of it.
a
Superloop has a written Continuous Disclosure Policy that is
designed to ensure that all material matters are appropriately
disclosed in a balanced and timely manner and in
accordance with the requirements of the ASX Listing Rules.
The policy is available at the Company’s website at www.
superloop.com/investor
Principle 6 - Respect the rights of security holders
Complies
Note
6.1 Provide information about the Company and its
governance to investors via its website.
6.2 Design and implement an investor relations program
to facilitate effective two-way communication with
investors.
a
a
The Board Charter and other applicable policies are available
on the Company’s website. All market releases and reports
are also made available on the Company’s website.
The Company aims to ensure that all Shareholders are well
informed of all major developments affecting the Company.
The Board Charter sets out the Company’s obligations with
respect to investor relations and the Company has adopted
a Continuous Disclosure Policy.
32
Superloop Annual Report 2016 Corporate Governance Statement
6.3 Disclose the policies and processes in place to
facilitate and encourage participation at meetings of
security holders.
6.4 Give security holders the option to receive
communications from, and send communications to, the
Company and its share registry electronically.
a
a
The Company facilitates effective participation at general
meetings, as well as the ability to submit written questions
ahead of the meetings. The Company adopts appropriate
technologies to facilitate the effective communication and
conduct of general meetings.
The Company, via its shareholder website and its share
registry, provides security holders the option to receive and
send electronic communications.
Principle 7- Recognise and manage risk
Complies
Notes
7.1 The Board should have a risk committee which
is structured so that it consists of a majority of
independent directors, is chaired by an independent
director, and has at least three members. The Company
should disclose the charter of the committee, the
members of the committee and the number of times the
committee met throughout the period with the individual
attendances of the members at those meetings.
7.2 The Board or a committee of the Board should
review the entity’s risk management framework with
management at least annually to satisfy itself that it
continues to be sound, and disclose, in relation to each
reporting period, whether such a review has taken place.
7.3 Disclose if the Company has an internal audit
function, how the function is structured and what role it
performs, or if it does not have an internal audit function,
that fact and the processes the Company employs for
evaluating and continually improving the effectiveness of
its risk management and internal control processes.
7.4 Disclose whether the Company has any material
exposure to economic, environmental and social
sustainability risks and, if so, how it manages those
risks.
a
a
a
a
The Company has a combined Audit and Risk Committee.
The functions and operations of the Committee are
established under the Charter.
The Audit and Risk Management Committee consists of two
non-executive Directors and one Executive Director. A non-
executive Director chairs the committee.
Refer principle 4.1 for additional disclosures.
The Committee continues to develop and enhance its risk
management framework.
Reviews of the risk management framework and risk register
are undertaken at least annually. In addition, the Board is
provided and reviews detailed risk assessments of material
projects on an ongoing basis.
A review of the risk management framework was undertaken
during the financial year.
The Company does not have an internal audit function due
to the Company’s limited number of employees and the
relative nature and scale of its operations. The Company
has an external auditor and the Audit and Risk Management
Committee monitors and evaluates material or systemic
risks.
The Board believes it and the Audit and Risk Management
Committee have appropriate oversight of existing operations
and risks.
The Board has disclosed what it believes are the material
risks faced by the business in the Directors’ Report.
Principle 8- Remunerate fairly and responsibly
Complies
Notes
8.1 The Board should have a remuneration committee
which is structured so that it consists of a majority of
independent directors, is chaired by an independent
director, and has at least three members. The Company
should disclose the charter of the committee, the
members of the committee and the number of times the
committee met throughout the period with the individual
attendances of the members at those meetings.
8.2 The policies and practices regarding the
remuneration of non-executive directors, and the
remuneration of executive directors and other senior
executives, should be separately disclosed
8.3 If the Company has an equity-based remuneration
scheme, it should have a policy on whether participants
are permitted to enter into transactions (whether
through the use of derivatives or otherwise) which limit
the economic risk of participating in the scheme, and
disclose that policy or a summary of it.
a
a
a
The Board has established a Remuneration and
Nomination Committee to assist the Board to discharge
its responsibilities in relation to remuneration and
issues relevant to remuneration policies and practices,
including those for senior management and Directors. The
remuneration committee consists of three Directors, a
majority of whom are independent, non-executive Directors
and is chaired by an independent, non-executive Director
who is not the Chairman. The composition and role of the
Remuneration and Nomination Committee is set out in the
Remuneration and Nomination Committee Charter.
Refer principle 2.1 for additional disclosures.
The Company’s remuneration report within the Annual
Report sets out the policies and practices for the
remuneration of non-executive directors, executive directors
and senior executives.
No director or senior executive is involved directly in
deciding their own remuneration.
In accordance with the Company's Securities Trading Policy,
participants are not permitted to enter into transactions
which limit economic risk related to equity-based
remuneration scheme without written clearance.
33
Superloop Limited and controlled entities Financial Report
These financial statements are the consolidated financial statements of the consolidated entity
consisting of Superloop Limited (ABN 96 169 263 094) and its controlled entities.
Superloop Limited is a company limited by shares, incorporated and domiciled in Australia. The
financial statements are presented in the Australian currency.
Superloop’s registered office and principal place of business is Level 17, 333 Ann Street, Brisbane
QLD 4000.
A description of the nature of the consolidated entity’s operations and its principal activities is
included in the Directors’ Report on page 9, which is not part of these financial statements.
The financial statements were authorised for issue by the Directors on 29 August 2016. The
Directors have the power to amend and reissue the financial statements.
CONTENTS
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Report
PAGE
35
36
37
38
39
34
Superloop Annual Report 2016 Consolidated Statement of Comprehensive Income
RESULTS FROM CONTINUING OPERATIONS
Revenue
Other gains from transactions with customers
Direct network costs
PROFIT AFTER DIRECT NETWORK COSTS
OPERATING EXPENSES
Employee benefits expense
Professional fees
Marketing costs
Office and administrative expenses
Bad debt expense
TOTAL OPERATING EXPENSES
EARNINGS BEFORE INTEREST-PAID, TAX, DEPRECIATION, AMORTISATION AND
FOREIGN EXCHANGE GAINS/LOSSES (EBITDA)
Depreciation and amortisation expense
Interest on loans
Foreign exchange gains
LOSS BEFORE INCOME TAX
Income tax expense
LOSS FOR THE YEAR AFTER TAX FROM CONTINUING OPERATIONS
OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX
Items that may be reclassified subsequently to profit or loss:
Exchange differences arising from translation of foreign operations
Net fair value loss on hedging transactions entered into the cash flow hedge reserve
TOTAL OTHER COMPREHENSIVE INCOME, NET OF INCOME TAX
For the year ended 30 June 2016
Note
30 June 2016
28 April 2014 to
30 June 2015
$
$
5
6
7
8
9
6,248,753
745,617
7,217
-
(5,063,806)
(290,048)
1,930,564
(282,831)
(4,168,141)
(1,135,390)
(1,312,789)
(1,730,000)
(300,903)
(1,764,748)
(20,990)
(70,207)
(329,060)
-
(7,567,571)
(3,264,657)
(5,637,007)
(3,547,488)
(1,881,969)
-
(589,777)
(475,874)
354,866
3,419,697
(7,164,110)
(1,193,442)
-
-
(7,164,110)
(1,193,442)
457,999
(368,560)
145,592
-
89,439
145,592
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
(7,074,671)
(1,047,850)
LOSS FOR THE YEAR ATTRIBUTABLE TO:
> Owners of Superloop Limited
TOTAL COMPREHENSIVE LOSS FOR THE YEAR ATTRIBUTABLE TO:
(7,164,110)
(1,193,442)
> Owners of Superloop Limited
(7,074,671)
(1,047,850)
Loss per share for loss attributable to the ordinary equity holders of the Group:
Basic loss per share
Diluted loss per share
The notes following the financial statements form part of the financial report
Note
33
33
Cents
Cents
(6.81)
(6.81)
(3.55)
(3.55)
35
Superloop Limited and controlled entities
Consolidated Statement of Financial Position
Note
30 June 2016
$
30 June 2015
$
As at 30 June 2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Other non-current assets
Intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Provisions
Deferred revenue
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provisions
Deferred revenue
Interest-bearing borrowings
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Other equity
Accumulated losses
TOTAL EQUITY
10
11
12
13
12
14
16
18
19
18
19
17
21
22
23
The notes following the financial statements form part of the financial report
36
45,854,135
1,397,290
471,550
47,722,975
66,850,737
17,180
12,363,209
79,231,126
126,954,101
6,579,093
342,124
204,314
7,125,531
69,303
22,458
-
91,761
7,217,292
18,011,900
190,867
360,201
18,562,968
33,576,396
-
4,300,000
37,876,396
56,439,364
2,585,677
83,777
-
2,669,454
-
-
-
-
2,669,454
119,736,809
53,769,910
131,186,364
235,031
(3,327,034)
(8,357,552)
119,736,809
58,144,794
145,592
(3,327,034)
(1,193,442)
53,769,910
Superloop Annual Report 2016
Consolidated Statement of Changes in Equity
For the year ended 30 June 2016
Note
Contributed equity
$
Reserves
$
Other equity
$
Accumulated
losses
$
Total eq-
uity
$
BALANCE AT 1 JULY 2015
58,144,794
145,592
(3,327,034)
(1,193,442)
53,769,910
Loss for the year
Other comprehensive income for
the year
Total comprehensive loss for the
year
Issue of ordinary share capital
Share issue costs
23
21
21
-
-
-
75,306,005
(2,264,435)
-
89,439
89,439
-
-
-
-
-
-
-
(7,164,110)
(7,164,110)
-
89,439
(7,164,110)
(7,074,671)
-
-
75,306,005
(2,264,435)
BALANCE AT 30 JUNE 2016
131,186,364
235,031
(3,327,034)
(8,357,552)
119,736,809
Note
Contributed equity
BALANCE AT 28 APRIL 2014
Loss for the period
Other comprehensive income for
the period
Total comprehensive loss for the
year
Common control transactions
Issue of ordinary share capital
Share issue costs
23
34
21
21
$
1
-
-
-
-
58,800,141
(655,348)
Reserves
$
Other equity
$
-
-
145,592
145,592
-
-
-
-
Accumulated
losses
$
Total equity
$
-
1
(1,193,442)
(1,193,442)
-
145,592
(1,193,442)
(1,047,850)
-
-
-
(3,327,034)
-
-
-
-
-
(3,327,034)
58,800,141
(655,348)
BALANCE AT 30 JUNE 2015
58,144,794
145,592
(3,327,034)
(1,193,442)
53,769,910
The notes following the financial statements form part of the financial report
37
Superloop Limited and controlled entities Consolidated Statement of Cash Flows
For the year ended 30 June 2016
Note
30 June 2016
$
28 April 2014 to
30 June 2015
$
OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
NET CASH OUTFLOW FROM OPERATING ACTIVITIES
INVESTING ACTIVITIES
Interest Received
Payments for property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for intangible assets
Net cash outflow on acquisition of subsidiaries
Transaction costs associated with the acquisition of subsidiaries
Non-current deposits
NET CASH INFLOW / (OUTFLOW) FROM INVESTING ACTIVITIES
FINANCING ACTIVITIES
Proceeds from issues of shares
Transaction costs paid in relation to issue of shares
Payment of pre-acquisition financing
Loan from related parties
Loan repaid to related parties
NET CASH (OUTFLOW) / INFLOW FROM FINANCING ACTIVITIES
Net (decrease) / increase in cash and cash equivalents
FX movement in cash
Cash and cash equivalents at the beginning of the year
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
30
5
37
21
21
29
10
10
6,445,063
(12,775,358)
(6,330,295)
-
(2,697,565)
(2,697,565)
50,700
7,217
(30,645,996)
(31,919,735)
755,719
(204,530)
(4,648,685)
(55,164)
(17,180)
-
-
-
-
-
(34,765,136)
(31,912,518)
71,806,005
(1,943,679)
(518,134)
-
-
69,344,192
28,248,761
(406,526)
18,011,900
57,500,000
(655,348)
-
4,277,331
(8,500,000)
52,621,983
18,011,900
-
-
45,854,135
18,011,900
The notes following the financial statements form part of the financial report
38
Superloop Annual Report 2016
Notes to the
Consolidated Financial Report
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.
30.
31.
32.
33.
34.
35.
36.
37.
Summary of significant accounting policies
Application of new and revised accounting standards
Critical accounting estimates and judgements
Segment information
Revenue
Other gains and losses
Interest on loans
Foreign exchange gains
Income tax expense
Cash and cash equivalents
Trade and other receivables
Other assets
Property, plant and equipment
Intangible assets
Deferred tax assets
Trade and other payables
Interest-bearing loans and borrowings
Provisions
Deferred revenue
Deferred tax liabilities
Contributed equity
Reserves
Accumulated losses
Dividends
Key management personnel disclosures
Remuneration of auditors
Operating lease arrangements
Commitments and contingencies
Related party transactions
Reconciliation of loss after income tax to net cash flow from operating activities
Non-cash transactions
Financial risk management
Earnings per share
Subsidiaries and transactions with non-controlling interests
Events occurring after the reporting period
Parent entity financial information
Controlled entities acquired or disposed
39
Superloop Limited and controlled entities Notes to the Consolidated Financial Report
1. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
(C) PRINCIPLE OF CONSOLIDATION
(i) Subsidiaries
The principal accounting policies adopted in the preparation of
these consolidated financial statements are set out below. These
policies have been consistently applied to all years presented, unless
otherwise stated. The financial statements are for the consolidated
entity consisting of Superloop Limited and its subsidiaries.
Superloop is a public company limited by shares, incorporated and
domiciled in Australia.
(A) REPORTING PERIOD AND
COMPARATIVE INFORMATION
Subsidiaries are all entities (including structured entities) over which
the group has control. The group controls an entity when the group
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. Subsidiaries are fully
consolidated from the date on which control is transferred to the
group. They are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for
business combinations by the group.
Intercompany transactions, balances and unrealised gains on
transactions between group companies are eliminated. Unrealised
losses are also eliminated unless the transaction provides evidence
These financial statement cover the year 1 July 2015 to 30 June
of an impairment of the transferred asset. Accounting policies
2016. As this is the second set of financial statements prepared by
of subsidiaries have been changed where necessary to ensure
the Company, the prior period covers 28 April 2014 to 30 June 2015.
consistency with the policies adopted by the group.
(ii) Business Combinations under Common Control.
A business combination involving entities or businesses under
common control is a business combination in which all of the
combining entities or businesses are ultimately controlled by
the same party or parties both before and after the business
combination, and that the control is not transitory. Please refer to
note 34 for further information in relation to the common
control transactions.
Where an entity within the Superloop group acquires an entity under
common control, the acquirer consolidates the carrying values of the
acquired entity’s assets and liabilities from the date of acquisition.
No fair value adjustments are made to the acquired entities assets
and liabilities at the date of acquisition. The consolidated financial
statements of the Superloop group include the acquired entity’s
income and expenses from the date of acquisition onwards.
Any difference between the fair value of the consideration paid /
transferred by the acquirer and the net assets / (liabilities) of the
acquired entity are taken to the common control reserve within
other equity.
(D) SEGMENT REPORTING
Operating segments are reported in a manner consistent with the
operations of the Company and the internal reporting provided to the
chief operating decision maker.
(B) BASIS OF PREPARATION
These general purpose financial statements have been prepared
in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board
and the Corporations Act 2001. Superloop Limited is a for-profit
entity for the purpose of preparing the financial statements.
(i) Compliance with IFRS
The consolidated financial statements of the Superloop Group also
comply with International Financial Reporting Standards (IFRS) as
issued by the International Accounting Standards Board (IASB).
(ii) New and amended standards adopted by the Group
Superloop has adopted all of the new, revised or amending
Accounting Standards and interpretations issued by the Australian
Accounting Standards Board (‘AASB’) that are mandatory for the
current reporting period. None of the new, revised or amended
standards had a material impact on in the current period or any
prior period and are not likely to affect future periods.
(iii) Early adoption of standards
The Group has not elected to apply any pronouncements
before their operative date in the annual reporting year
beginning 1 July 2015.
(iv) Historical cost convention
These financial statements have been prepared under the
historical cost convention.
(v) 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.
40
Superloop Annual Report 2016 Notes to the Consolidated Financial Report
(E) REVENUE RECOGNITION
Revenue is measured at the fair value of the consideration received
or receivable. Amounts disclosed as revenue are net of returns, trade
allowances, rebates and amounts collected on behalf of third parties.
The Group recognises revenue when the amount of revenue can
be reliably measured, it is probable that future economic benefits
will flow to the entity and specific criteria have been met for each of
the activities as described below. The Group bases its estimates on
historical results, taking into consideration the type of customer, the
type of transaction and the specifics of each arrangement.
Revenue is recognised for the major business activities as follows:
(i) Customer Revenue
Revenue on services is recognised when the service has been
provided, the amount of revenue can be measured reliably and
it is probable that the economic benefits associated with the
transaction will flow to the Group.
Upfront discounts provided to customers are amortised over the
life of the customer contract.
Installation fees charged where there is no direct expenditure for the
establishment of services are brought to account as revenue over the
effective life of the customer contracts. Installation fees charged as a
recovery of direct operational expenditure are brought to account as
revenue at the time of the transaction.
(ii) Other Revenue
Interest income is recognised using the effective interest method.
(F) CASH AND CASH EQUIVALENTS
For the purpose of presentation in the Consolidated Statement of
Cash Flows, cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions and term deposits 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. Bank overdrafts, if applicable, are shown
within borrowings in current liabilities in the consolidated statement
of financial position.
(G) TRADE RECEIVABLES
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less provision for impairment. Trade receivables
are generally due for settlement within 30 days. They are presented
as current assets unless collection is not expected for more than 12
months after the reporting date.
Collectability of trade receivables is reviewed on an ongoing basis.
Debts which are known to be uncollectible are written off by reducing
the carrying amount directly. An allowance account (provision for
impairment of trade receivables) is used 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 (more than 90 days overdue) are considered indicators
that the trade receivable is impaired. The amount of the impairment
allowance is the difference between the asset’s carrying amount
and the present value of estimated future cash flows, discounted
at the original effective interest rate. Cash flows relating to short-
term receivables are not discounted if the effect of discounting is
immaterial.
The amount of the impairment loss is recognised in the Consolidated
Statement of Comprehensive Income within operating expenses.
When a trade receivable for which an impairment allowance had
been recognised becomes uncollectible in a subsequent period, it is
written off against the allowance account. Subsequent recoveries of
amounts previously written off are credited against other expenses in
profit or loss.
(H) CONSUMPTION TAXES
Revenues, expenses and assets are recognised net of the amount of
associated consumption tax per jurisdiction, unless the consumption
based tax incurred is not recoverable from the taxation authority.
In this case it is recognised as part of the cost of acquisition of the
asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of
consumption based tax receivable or payable. The net amount of
the consumption based tax recoverable from, or payable to, the
taxation authority is included with other receivables or payables in
the consolidated statement of financial position.
Cash flows are presented on a gross basis. The consumption based
tax components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the taxation
authority, are presented as operating cash flows.
(I) Income tax
The income tax expense or revenue for the year is the tax payable
on the current year's taxable income based on the applicable
income tax rate in 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 year in each jurisdiction. 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 income tax is provided in full, using the liability method,
on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial
statements. However, deferred tax liabilities are not recognised if
they arise from the initial recognition of goodwill. Deferred income
tax is also not accounted for if it arises from initial recognition
of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither
accounting nor taxable profit or loss. Deferred income tax is
determined using tax rates (and laws) that have been enacted or
substantially enacted by the end of the reporting year and are
expected to apply when the related deferred income tax asset is
realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary
differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary
differences and losses.
Deferred tax assets and liabilities are offset when there is
a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same
41
Superloop Limited and controlled entities Notes to the Consolidated Financial Report
taxation authority. Current tax assets and tax liabilities are
offset where the Group has a legally enforceable right to offset
and intends either to settle on a net basis, or to realise the asset
and settle the liability simultaneously.
reliably. The carrying amount of any component accounted for as a
separate asset is derecognised when replaced. All other repairs and
maintenance are charged to profit or loss during the reporting year
in which they are incurred.
Depreciation on other assets is calculated using the straight-line
method to allocate their cost, net of their residual values, over their
estimated useful lives or, in the case of leasehold improvements and
certain leased plant and equipment, the lease term (if shorter) as
follows:
Category
Network assets
Fibre optic cable
Useful life
25-40 years
15-25 years
Network communications equipment
3-5 years
Computer equipment
Office furniture and equipment
Leasehold improvements
3-5 years
3-10 years
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 carrying amount. These are
included in the Consolidated Statement of Comprehensive Income.
(L) ASSETS IN THE COURSE OF CONSTRUCTION
Assets in the course of construction are shown at historical cost.
Historical cost includes directly attributable expenditure on dark
fibre infrastructure which at reporting date, has not yet been
finalised and/or ready for use. Assets in the course of construction
are not depreciated.
Assets in the course of construction are transferred to property,
plant and equipment upon successful testing and commissioning.
Current and deferred tax is recognised in profit or loss, except
to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax
is also recognised in other comprehensive income or directly in
equity, respectively.
(J) INVESTMENTS AND OTHER FINANCIAL ASSET
Loans and receivables classification
Loans and receivables are non derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except for those
with maturities greater than 12 months after the reporting
period which are classified as non current assets. Loans and
receivables are included in trade and other receivables (note
11) in the consolidated statement of financial position.
Measurement
At initial recognition, the Group measures a financial asset at its fair
value plus, in the case of a financial asset not at fair value through
profit or loss, transaction costs that are directly attributable to the
acquisition of the financial asset.
Loans and receivables are subsequently carried at amortised cost
using the effective interest method.
Impairment
The Group assesses at the end of each reporting year whether there
is objective evidence that a financial asset or group of financial
assets is impaired. A financial asset or a group of financial assets
is impaired and impairment losses are incurred only if there is
objective evidence of impairment as a result of one or more events
that occurred after the initial recognition of the asset (a ‘loss event’)
and that loss event (or events) has an impact on the estimated future
cash flows of the financial asset or group of financial assets that can
be reliably estimated.
Assets carried at amortised cost
For loans and receivables, the amount of the loss is measured as
the difference between the asset’s carrying amount and the present
value of estimated future cash flows (excluding future credit losses
that have not been incurred) discounted at the financial asset’s
original effective interest rate. The carrying amount of the asset is
reduced and the amount of the loss is recognised in the Consolidate
Statement of Comprehensive Income.
If, in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an
event occurring after the impairment was recognised (such as
an improvement in the debtor’s credit rating), the reversal of
the previously recognised impairment loss is recognised in the
Consolidated Statement of Comprehensive Income. Impairment
testing of trade receivables is described in note 1(G).
(K) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at historical cost less
depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Subsequent costs are included in the asset's carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured
42
Superloop Annual Report 2016 Notes to the Consolidated Financial Report
(M) INTANGIBLE ASSETS
The useful lives of intangible assets are assessed to be either
finite or indefinite. Intangible assets with finite useful lives are
amortised over the useful life and assessed for impairment
whenever there is an indication that the intangible asset may be
impaired. The amortisation year and the amortisation method
for an intangible asset with a finite useful life are reviewed at
least at each financial year-end. Changes in the expected useful
life or the expected pattern of consumption of future economic
benefits embodied in the asset are accounted for by changing the
amortisation year or method, as appropriate, which is a change in
accounting estimate.
Intangible assets with indefinite useful lives are tested for
impairment annually, either individually or at the cash generating
unit level. Such intangibles are not amortised.
The useful life of an intangible asset with an indefinite useful
life is reviewed each reporting year to determine whether the
indefinite useful life assessment continues to be supportable. If
not, the change in useful life assessment from indefinite to finite is
accounted for as a change in an accounting estimate and is thus
accounted for on a prospective basis.
Indefeasible Rights to Use (‘IRUs’)
IRUs of capacity are intangible assets amortised on a straight-line
basis over the remaining life of the contracts.
Goodwill
Goodwill acquired in a business combination is initially measured
at cost of the business combination being the excess of the
consideration transferred over the fair value of the Group’s net
identifiable assets acquired and liabilities assumed. Goodwill
has an indefinite useful life and as such, is not amortised. The
carrying value is assessed at each reporting date against the value
of the cash generating units to which it is assigned.
Software
On the acquisition of a company, internally developed software
and systems are valued and brought to account as intangible
assets. The software is valued at its amortised replacement cost.
Software is amortised on a straight-line basis over the period of its
expected benefit, being its finite life of between 3 to 5 years.
Other intangibles
Other intangibles are amortised on a straight-line basis over the
period of their expected benefit.
(N) LEASES
Leases of property, plant and equipment where the Group, as
lessee, has substantially all the risks and rewards of ownership
are classified as finance leases. Finance leases are capitalised
at the lease's inception at the fair value of the leased property
or, if lower, the present value of the minimum lease payments.
The corresponding rental obligations, net of finance charges, are
included in other short-term and long-term borrowings. Each lease
payment is allocated between the liability and finance cost. The
finance cost is charged to the profit or loss over the lease period so
as to produce a constant periodic rate of interest on the remaining
balance of the liability for each period. The property, plant and
equipment acquired under finance leases is depreciated over the
asset's useful life or over the shorter of the asset's useful life and
the lease term if there is no reasonable certainty that the Group will
obtain ownership at the end of the lease term.
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. Payments made under operating leases (net of any
incentives received from the lessor) are charged to profit or loss on a
straight-line basis over the period of the lease.
(O) IMPAREMENT OF ASSETS
Intangible assets that have an indefinite useful life are not subject
to amortisation and are tested annually for impairment, or more
frequently if events or changes in circumstances indicate that they
might be impaired. Other assets are tested for impairment whenever
events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised
for the amount by which the asset's carrying amount exceeds
its recoverable amount. The recoverable amount is the higher of
an asset's fair value less costs to sell and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash inflows which
are largely independent of the cash inflows from other assets or
groups of assets (cash-generating units). Non-financial assets other
than goodwill that suffered impairment are reviewed for possible
reversal of the impairment at the end of each reporting period.
(P) TRADE AND OTHER PAYABLES
These amounts represent liabilities for goods and services provided
to the Group prior to the end of financial year which are unpaid.
The amounts are unsecured and are usually paid within 30 days
of recognition. Trade and other payables are presented as current
liabilities unless payment is not due within 12 months from the
reporting date. They are recognised initially at their fair value and
subsequently measured at amortised cost using the effective
interest method.
(Q) BORROWINGS
Borrowings are initially recognised at fair value, net of transaction
costs incurred. Borrowings are subsequently measured at amortised
cost. Any difference between the proceeds (net of transaction costs)
and the redemption amount is recognised in profit or loss over
the period of the borrowings using the effective interest method.
Fees paid on the establishment of loan facilities are recognised as
transaction costs of the loan to the extent that it is probable that
some or all of the facility will be drawn down. In this case, the fee
is deferred until the draw down occurs. To the extent there is no
evidence that it is probable that some or all of the facility will be
drawn down, the fee is capitalised as a prepayment for liquidity
services and amortised over the period of the facility to which it
relates.
(R) EMPLOYEE BENEFITS
(i) Short-term obligations
Liabilities for wages and salaries, including non monetary benefits
and annual leave expected to be settled within 12 months after the
end of each reporting period in which the employees render the
related service are recognised in respect of employees’ services up
to the end of the reporting period and are measured at the amounts
expected to be paid when the liabilities are settled. The liability for
annual leave is recognised in payables.
43
Superloop Limited and controlled entities Notes to the Consolidated Financial Report
(ii) Other long term employee
benefit obligations
The liability for long service leave and annual leave which is not
expected to be settled within 12 months after the end of the
reporting year in which the employees render the related service is
recognised in the provision for employee benefits and measured
as the present value of expected future payments to be made in
respect of services provided by employees up to the end of the
reporting year using the projected unit credit method. Consideration
is given to expected future wage and salary levels, experience
of employee departures and periods of service. Expected future
payments are discounted using market yields at the end of the
reporting year on high quality corporate bonds with terms to maturity
and currency that match, as closely as possible, the estimated future
cash outflows.
(iii) Retirement benefit obligations
Except for the statutory superannuation guarantee charge, the
Group does not have any other retirement benefit obligations.
(V) EARNINGS PER SHARE
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
•
the profits/loss attributable to owners of the Group, excluding
any costs of servicing equity other than ordinary shares
•
by the weighted average number of ordinary shares outstanding
during the financial period, adjusted for bonus elements in
ordinary shares issued during the period (note 33).
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account:
•
the after income tax effect of interest and other financing costs
associated with dilutive potential ordinary shares, and
•
the weighted average number of additional ordinary shares that
would have been outstanding assuming the conversion of all
dilutive potential ordinary shares.
(iv) Share-based Payments
Equity-settled share-based payments to employees and others
providing similar services are measured at the fair value of the
equity instruments at the grant date. This fair value is expensed on
a straight-line basis over the vesting period with a corresponding
increase in equity.
(W) ROUNDING OF AMOUNTS
The Company is of a kind referred to in Class Order 98/100, issued
by the Australian Securities and Investments Commission, relating to
the ‘rounding off’ of amounts in the financial statements. Amounts in
the financial statements have been rounded off in accordance with
that Class Order to the nearest dollar.
(S) BORROWING COSTS
Borrowing costs incurred for the construction of any qualifying asset
are capitalised during the period of time that is required to complete
and prepare the asset for its intended use or sale. Other borrowing
costs are expensed.
(T) 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.
(U) FOREIGN EXCHANGE
The financial statements are presented in Australian dollars,
which is the Group’s presentation currency.
Foreign Currency Transactions
Foreign currency transactions are translated into the functional
currency of the entity using the exchange rates prevailing at the
date of the transactions.
Foreign Operations
The assets and liabilities of foreign operations are translated into
the presentation currency (Australian dollars) using the exchange
rates as at the reporting date. The revenues and expenses of the
foreign operations are translated into the presentation currency
using the average exchange rates, which approximate the rate
at the date of the transaction. All resulting foreign exchange
differences are recognised in other comprehensive income
through the foreign currency reserve in equity.
(X) HEDGING
Hedging of risk exposure can be carried out using derivatives or
physical instruments. Derivatives are initially recognised at fair
value at the date the derivative contract is entered into and are
subsequently remeasured to their fair value at the end of each
reporting period. The resulting gain or loss is recognised in profit or
loss immediately unless the derivative is designated and effective as
a hedging instrument, in which event the timing of the recognition in
profit or loss depends on the nature of the hedge relationship.
(Y) HEDGE ACCOUNTING
Superloop designates certain hedging instruments as either fair
value hedges or cash flow hedges. Hedges of foreign exchange risk
on firm commitments are accounted for as cash flow hedges.
(i) Cash flow hedge
The effective portion of changes in the fair value of financial
instruments that are designated and qualify as cash flow hedges is
recognised in other comprehensive income and accumulated under
the heading of cash flow hedging reserve. The gain or loss relating to
the ineffective portion is recognised immediately in profit or loss, and
is included in the ‘other gains and losses’ line item.
44
Superloop Annual Report 2016 Notes to the Consolidated Financial Report
(ii) Fair value hedge
Changes in the fair value of financial instruments that are
designated and qualify as fair value hedges are recognised in
profit or loss immediately, together with any changes in the
fair value of the hedged asset or liability that are attributable
to the hedged risk. The change in the fair value of the hedging
instrument and the change in the hedged item attributable to
the hedged risk are recognised in profit or loss in the line item
relating to the hedged item.
(Z) PARENT ENTITY FINANCIAL INFORMATION
The financial information for the parent entity, Superloop
Limited, disclosed in note 36 has been prepared on the same
basis as the consolidated financial statements.
2. APPLICATION OF NEW AND REVISED
ACCOUNTING STANDARDS
Certain new accounting standards and interpretations have
been published that are not mandatory for 30 June 2016
reporting periods and have not been early adopted by the
Group. The Group’s assessment of the impact of these
STEP 4: Allocate the transaction price to the performance
obligations in the contract
STEP 5: Recognise revenue when (or as) the entity satisfies a
performance obligation
Under AASB 15, an entity recognises revenue when (or as)
a performance obligation is satisfied, i.e. when ‘control’ of
the goods or services underlying the particular performance
obligation is transferred to the customer.
The assessment of the impact on the Company is still ongoing.
AASB 16 Leases
AASB 16 will replace AASB117 Leases, and provides a
comprehensive model for the identification of lease arrangements
and their treatment in the financial statements of both lessees and
lessors. The new Standard introduces three main changes:
•
•
•
Enhanced guidance on identifying whether a contract
contains a lease;
A completely new leases accounting model for lessees
that require lessees to recognise all leases on balance
sheet, except for short-term leases and leases of low
value assets; and
Enhanced disclosures.
new standards and interpretations is set out below.
Lessor accounting will not significantly change.
The assessment of the impact on the Company is still ongoing.
There are no other standards that are not yet effective and that
are expected to have a material impact on the entity in the current
or future reporting periods and on foreseeable future transactions.
AASB 9 Financial Instruments
AASB 9 addresses the classification, measurement and
derecognition of financial assets and financial liabilities. The
standard was issued in December 2009 and introduced new
requirements for the classification and measurement of financial
assets. AASB 9 was subsequently amended in December 2010
to include requirements for the classification and measurement
of financial liabilities and for derecognition, and in December
2013 to include new requirements for general hedge accounting.
Another revised version of AASB 9 was issued in December
2014 mainly to include a) impairment requirements for financial
assets and b) limited amendments to the classification and
measurement requirements by introducing a ‘fair value through
other comprehensive income (FVTOCI) measurement category
for certain simple debt instruments.
The assessment of the impact on the Company is still ongoing.
AASB 15 Revenue from Contracts
with Customers
AASB 15 establishes a single comprehensive model for entities
to use in accounting for revenue arising from contracts with
customers.
The core principle of AASB 15 is that an entity should 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 those goods or
services. Specifically, the Standard introduces a 5-step approach
to revenue recognition:
STEP 1: Identify the contract(s) with a customer
STEP 2: Identify the performance obligations in the contract
STEP 3: Determine the transaction price
45
Superloop Limited and controlled entities
Notes to the Consolidated Financial Report
Deferred taxation
Deferred tax assets are recognised where it is considered
probable that they will be recovered in the future and, as such,
are subjective. Superloop has not recognised any deferred tax
assets in the statement of financial position as at 30 June 2016. A
significant portion of the deferred tax assets relates to tax credits
for tax losses (refer to note 15).
Impairment of assets analysis
The Group assesses whether its assets have suffered any
impairment on an annual basis. This assessment includes
forecasting growth in the various regions, and the use of cash flow
projections. The cash flows include estimated growth rates and
estimated discount rates. Management’s assessment is based on
a reasonable estimate of growth plans as there is no significant
historical trend to assess. The impairment assessment is directly
related to the effectiveness of the strategy in each market.
3. CRITICAL ACCOUNTING ESTIMATES AND
JUDGEMENTS
Estimates and judgements are continually evaluated and are
based on historical experience and other factors, including
expectations of future events that may have a financial impact
on the entity and that are believed to be reasonable under the
circumstances. This note provides an overview of the areas
that involved a higher degree of judgement or complexity, and
of items which are more likely to be materially adjusted due to
estimates and assumptions turning out to be wrong.
Useful life of assets
The economic life of property, plant and equipment, which
includes network infrastructure is a critical accounting estimate,
with the ranges outlined in note 1(K). The useful economic
life is the Board’s and management’s best estimate based on
historical experiences and industry knowledge. The Group
will review the estimated useful lives of property, plant and
equipment including network infrastructure at the end of
each annual reporting period. Should the actual lives of these
component parts be significantly different this would impact the
depreciation charge arising.
Intangible assets
The Group has allocated portions of the costs of acquisitions
to customer contracts, software and brand assets. These
calculations require the use of assumptions including customer
retention rates, revenue growth, cash flows and weighted-average
cost of capital. The Company engaged a specialist firm to assist
in the development of the methodology and assumptions used in
determining these estimates.
Goodwill and other indefinite life intangible
assets
Whether goodwill and other indefinite life intangible assets have
suffered any impairment are tested annually, or more frequently
if circumstances indicate impairment, in accordance with
accounting policy. The recoverable amounts of cash-generating
units have been determined based on a value in use calculation.
These calculations require the use of assumptions, including
estimated discount rates based on the current cost of capital and
growth rates of estimated future cash flows.
Income taxes
The Group is subject to income taxes in each jurisdiction that it
operates. Estimation is required in determining the provision for
income taxes. There are certain transactions and calculations
undertaken during the ordinary course of business for which the
ultimate tax determination is uncertain. The Group estimates its
tax liabilities based on the Group’s understanding of the tax law.
Where the final tax outcome of these matters is different from the
amounts that were initially recorded, such differences will impact
the current and deferred income tax assets and liabilities in the
year in which such determination is made.
46
Superloop Annual Report 2016 Notes to the Consolidated Financial Report
4. SEGMENT INFORMATION
(A) Description of segments
Superloop is focused on becoming a leading independent provider of connectivity services in the Asia Pacific region.
During the period, the principal activities of the Group consisted of the development and operation of independent dark
fibre infrastructure throughout the Asia Pacific region, and the Group’s recent acquisitions expanded its principle activities
to include complete network services. Superloop operates in three strategic markets of Australia, Singapore and Hong
Kong and the operations of the Group are reported in these segments to Superloop’s executive management team (chief
operating decision maker). Items not specifically related to an individual segment are classified as Corporate, refer below
for details of material items. The accounting policies of the segments are the same as the Group (refer to note 1).
(B) Segment information provided to management
The segment information provided to management for the reportable segments is as follows:
Australia
$
Singapore
$
Hong Kong
$
Total
Segments
$
Corporate
$
30 JUNE 2016
Revenue
5,463,378
738,006
Other gains and losses
-
745,617
-
-
Direct network costs
(3,950,895)
(927,328)
(185,583)
(5,063,806)
6,201,384
47,369
745,617
-
-
Total
$
6,248,753
745,617
(5,063,806)
PROFIT AFTER DIRECT
NETWORK COSTS
1,512,483
556,295
(185,583)
1,883,195
47,369
1,930,564
Employee benefits expense
(1,951,090)
(685,307)
(251,868)
(2,888,265)
(1,279,876)
Other expenses
Bad debt expense
(890,118)
(247,941)
(285,232)
(1,423,291)
(1,955,149)
(20,990)
-
-
(20,990)
-
(4,168,141)
(3,378,440)
(20,990)
EBITDA
(1,349,715)
(376,953)
(722,683)
(2,449,351)
(3,187,656)
(5,637,007)
Depreciation and amorti-
sation
Foreign exchange gains /
(losses)
LOSS BEFORE INCOME
TAX
(526,770)
(1,097,455)
-
(1,624,225)
(257,744)
(1,881,969)
(7,844)
(239,527)
11,316
(236,055)
590,921
354,866
(1,884,329)
(1,713,935)
(711,367)
(4,309,631)
(2,854,479)
(7,164,110)
Significant items excluded from segments, and classified as corporate are:
•
•
Employee benefits expenses which relate to corporate head office staff.
Other expenses which relate to office expenses and travel associated with corporate head office activities.
Australia
$
Singapore
$
Hong Kong
$
Total
Segments
$
Corporate
$
Total
$
30 JUNE 2016
SEGMENT ASSETS
Cash and cash equivalents
940,244
5,206,150
16,212,721
22,359,115
23,495,020
45,854,135
Other current assets
934,985
740,655
37,217
1,712,857
155,983
1,868,840
Property, plant & equipment
3,095,414
40,167,113
23,588,210
66,850,737
-
66,850,737
Intangible assets
11,762,570
576,818
Other non-current assets
7,180
-
-
-
12,339,388
23,821
12,363,209
7,180
10,000
17,180
TOTAL ASSETS
16,740,393
46,690,736
39,838,148
103,269,277
23,684,824
126,954,101
Significant items excluded from segments, and classified as corporate are:
•
•
Cash and cash equivalents held by the parent entity, which are available for use by the segments as required.
Current assets which include prepayments and other receivables associated with corporate head office activities.
47
Superloop Limited and controlled entities
Notes to the Consolidated Financial Report
Australia
$
Singapore
$
Hong Kong
$
Total
Segments
$
Corporate
$
Total
$
30 JUNE 2015
Revenue
-
-
Direct network costs
(75,900)
(214,148)
PROFIT AFTER DIRECT NET-
WORK COSTS
(75,900)
(214,148)
-
-
-
-
7,217
7,217
(290,048)
-
(290,048)
(290,048)
7,217
(282,831)
Employee benefits expense
(296,426)
(204,397)
(221,485)
(722,308)
(413,082)
(1,135,390)
Other expenses
Bad debt expense
(364,192)
(454,821)
(8,348)
(827,361)
(1,301,906)
(2,129,267)
-
-
-
-
-
-
EBITDA
(736,518)
(873,366)
(229,833)
(1,839,717)
(1,707,771)
(3,457,488)
Depreciation and amortisation
(78,976)
(510,801)
-
(589,777)
Finance charge
(13,821)
(459,800)
(2,251)
(475,872)
-
(2)
(589,777)
(475,874)
Foreign exchange gains /
(losses)
(718)
87,778
25,698
112,758
3,306,939
3,419,697
LOSS BEFORE INCOME TAX
(830,033)
(1,756,189)
(206,386)
(2,792,608)
1,599,166
(1,193,442)
Significant items excluded from segments, and classified as corporate are:
•
•
Employee benefits expenses which relate to corporate head office staff.
Other expenses which relate to office expenses and travel associated with corporate head office activities.
Australia
$
Singapore
$
Hong Kong
$
Total
Segments
$
Corporate
$
Total
$
30 JUNE 2015
SEGMENT ASSETS
Cash and cash equivalents
411,583
8,076,434
-
8,488,017
9,523,883
18,011,900
Other current assets
73,731
354,566
22,348
450,645
100,423
551,068
Property, plant & equipment
621,286
32,947,308
7,802
33,576,396
Intangible assets
TOTAL ASSETS
4,300,000
-
-
4,300,000
5,406,600
41,378,308
30,150
46,815,058
9,624,306
56,439,364
-
-
33,576,396
4,300,000
Significant items excluded from segments, and classified as corporate are:
•
•
Cash and cash equivalents held by the parent entity, which are available for use by the segments as required.
Current assets which include prepayments and other receivables associated with corporate head office activities.
48
Superloop Annual Report 2016
Notes to the Consolidated Financial Report
5. REVENUE
From continuing operations
Customer revenue
Other revenue
Interest income
Other income
TOTAL REVENUE
30 June 2016
$
30 June 2015
$
6,197,637
-
50,700
416
6,248,753
7,217
-
7,217
6. OTHER GAINS FROM TRANSACTIONS WITH CUSTOMERS
Gain on disposal of property, plant and equipment
TOTAL OTHER GAINS FROM TRANSACTIONS WITH CUSTOMERS
Note
(A)
30 June 2016
$
30 June 2015
$
745,617
745,617
-
-
(A) During the year the Group sold a small number of fibre cores between two points of interconnection to a customer. The transaction
has been accounted for as a disposal of an asset, and the revenue has been recognised as a gain on disposal of property, plant
and equipment. In addition to the sale, the Group has entered into an operation and maintenance agreement with the customer. The
fee payable under the operation and maintenance agreement is payable monthly and will be recognised on a monthly basis as the
operations and maintenance services are provided.
7. INTEREST ON LOANS
Interest on loans
TOTAL INTEREST ON LOANS
(A) INTEREST ON LOANS
Note
(A)
30 June 2016
$
30 June 2015
$
-
-
(475,874)
(475,874)
The Company’s initial operations, including the acquisition of the Singapore duct network, were funded by loans from the Founding
Shareholder. Interest on those loans was charged at the Reserve Bank of Australia cash rate (from time to time) plus 1%. Refer to
Note 29 for related party transactions.
49
Superloop Limited and controlled entities Notes to the Consolidated Financial Report
8. FOREIGN EXCHANGE GAINS
Foreign exchange gains
TOTAL FOREIGN EXCHANGE GAINS
(A) FOREIGN EXCHANGE GAINS
Note
(A)
30 June 2016
$
30 June 2015
$
354,866
354,866
3,419,697
3,419,697
Foreign exchange gains for the current year arose as a result of favourable exchange rate movements in the ordinary course of
business. During the previous year the Group realised foreign exchange gains. This included a significant one-off gain associated
with the acquisition of the duct network in Singapore, which was initially funded via a loan from the Company’s Founding
Shareholder. The gain arose due to the time between the Group borrowing the funds and the settlement of the acquisition.
9. INCOME TAX EXPENSE
(a) Current tax
In respect of the current year
in respect of prior years
TOTAL
Deferred income tax revenue included in income tax credit comprises:
- Decrease / (increase) in deferred tax assets (Note 15)
- (Decrease) / increase in deferred tax liabilities (Note 20)
TOTAL
30 June 2016
$
30 June 2015
$
-
-
-
-
-
-
-
-
-
-
-
-
(b) Numerical reconciliation of income tax credit to prima facie tax payable
Loss from continuing operations before income tax expense
(7,164,110)
(1,193,442)
Tax credit at the Australian tax rate of 30%
Effect of income that is exempt from taxation @ 30%
Effect of different tax rates of subsidiaries operating in other jurisdictions
Effect of current year tax losses for which no deferred tax asset has been recognised
Effect of current year timing differences for which no deferred tax asset has been recognised
INCOME TAX EXPENSE / (BENEFIT)
(c) Deferred Tax Assets from Tax losses
Deferred tax assets from current tax losses which have not been recognised
Deferred tax assets from prior tax losses which have not been recognised
Change in prior year loss estimate
TOTAL DEFERRED TAX ASSETS FROM LOSSES NOT RECOGNISED
2,149,233
223,685
(389,234)
(1,860,502)
(123,182)
-
1,860,502
915,934
(69,123)
2,707,313
358,033
991,633
(324,746)
(827,768)
(197,152)
-
827,768
88,166
-
915,934
The tax rate used for the 2016 and 2015 reconciliations above is the corporate tax rate of 30% payable by Australian corporate entities on taxable profits under
Australian tax law.
50
Superloop Annual Report 2016 Notes to the Consolidated Financial Report
10. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Note
30 June 2016
30 June 2015
$
$
44,819,436
17,046,020
Deposits with a term of 3 months or shorter
(A)
1,034,699
965,880
TOTAL CASH AND CASH EQUIVALENTS
45,854,135
18,011,900
(A) DEPOSITS WITH A TERM OF 3 MONTHS OR SHORTER
At 30 June 2016, the Group held $1,034,699 of deposits which had a term of 3 months or shorter (30 June 2015: $965,880).
The Group has pledged SGD1m (held as a term deposit) as security for a bank guarantee facility (refer note 17)
11. TRADE AND OTHER RECEIVABLES
Trade receivables
Provision for impairment
Net trade receivables
Consumption tax receivable
Receivables– related parties
TOTAL
Note
Current
Non-
Current
(A)
(B)
(C)
1,263,033
(20,990)
1,242,043
155,071
176
1,397,290
Note
Current
Non-
Current
Trade receivables
Provision for impairment
Net trade receivables
-
-
-
Consumption tax receivable
(C)
190,483
Other receivables
Receivables– related parties
TOTAL
355
29
190,867
-
-
-
-
-
-
-
-
-
-
-
-
-
30 June 2016
$
TOTAL
1,263,033
(20,990)
1,242,043
155,071
176
1,397,390
30 June 2015
$
TOTAL
-
-
-
190,483
355
29
190,867
51
Superloop Limited and controlled entities Notes to the Consolidated Financial Report
(A) PAST DUE BUT NOT IMPAIRED
Trade receivables disclosed above include amounts (see below for aged analysis) that are past due at the end of the reporting
period for which the Group has not recognised an allowance for doubtful debts because there has not been a significant change in
credit quality and the amounts are still considered recoverable.
Age of Trade Receivables that are past due but not impaired
60-90 days
90 days plus
TOTAL DAYS DUE BUT NOT IMPAIRED
30 June 2016
30 June 2015
$
61,661
20,661
82,322
$
-
-
-
(B) IMPAIRED TRADE RECEIVABLES
As at 30 June 2016, the Group had one impaired receivable in Australia, for which it has raised a provision of $20,990 through the
consolidatied statement of comprehensive income representing the full outstanding amount.
Age of Impaired Trade Receivables
0-60 days
60-90 days
90 days plus
TOTAL DAYS DUE AND IMPAIRED
Movement in Provision for Impairment
Balance at beginning of the year
Impairment losses recognised on receivables
BALANCE AT THE END OF THE YEAR
30 June 2016
30 June 2015
$
$
6,600
6,600
7,790
20,990
30 June 2016
30 June 2015
$
$
-
20,990
20,990
-
-
-
-
-
-
-
(C) CONSUMPTION TAX RECEIVABLE
These amounts generally arise from consumption tax paid by the Group in the respective tax jurisdictions in which the Group
operates and where a consumption tax exists. Ordinarily these amounts are offset against the consumption tax collected by the
Group as part of its sales and the net amount remitted to the local tax authorities, however where the amount of consumption tax
paid by the Group per jurisdiction is greater than the amount collected from sales to customers in that jurisdiction, a receivable is
raised.
12. OTHER ASSETS
CURRENT
Prepayments
TOTAL OTHER ASSETS – CURRENT
NON-CURRENT
Other non-current assets
TOTAL OTHER ASSETS – NON-CURRENT
52
30 June 2016
30 June 2015
$
$
471,550
471,550
17,180
17,180
360,201
360,201
-
-
Superloop Annual Report 2016 Notes to the Consolidated Financial Report
13. PROPERTY, PLANT AND EQUIPMENT
Carrying amounts of:
Assets in the course of construction
Network assets
Fibre Optic Cable
Computer equipment
Office furniture and equipment
Leasehold improvements
TOTAL
30 June 2016
30 June 2015
$
$
27,047,827
5,654,845
36,498,075
27,910,760
3,102,595
42,679
148,760
10,801
-
10,791
-
-
66,850,737
33,576,396
Assets
in the
course of
construction
Network
assets
Fibre optic
cable
Computer
equipment
Office
furniture
and
equipment
Leasehold
improve
-ments
Total
$
$
$
$
$
$
$
Cost or Valuation
OPENING BALANCE AS AT
28 APRIL 2014
Additions
Transfers
-
-
5,856,150
28,222,788
(201,305)
201,305
BALANCE AT 30 JUNE 2015
5,654,845
28,424,093
Additions
33,201,161
31,184
Additions through business
combinations (note 37)
-
226,820
Movement in foreign exchange
181,037
964,988
-
-
-
-
-
-
-
-
(7,245)
(5,524)
Disposals
Transfers
-
14,499
-
14,499
13,186
-
497
-
-
-
-
-
6,396
-
-
-
-
-
- 34,093,437
-
-
- 34,093,437
- 33,251,927
-
-
-
226,820
1,146,522
(12,769)
(11,989,216)
8,524,364
3,190,838
32,373
230,840
10,801
-
BALANCE AT 30 JUNE 2016
27,047,827
38,164,204
3,185,314
60,555
237,236
10,801 68,705,937
53
Superloop Limited and controlled entities Notes to the Consolidated Financial Report
Assets in the
course of
construction
$
Network
assets
$
Fibre optic
cable
$
Computer
equipment
$
Office
furniture
and
equipment
$
Leasehold
improvements
$
Total
$
Accumulated depreciation
OPENING BALANCE AS AT
28 APRIL 2014
Depreciation charge (YTD)
Movement in foreign exchange
BALANCE AT 30 JUNE 2015
Depreciation charge (YTD)
Disposals
Movement in foreign exchange
BALANCE AT 30 JUNE 2016
-
-
-
-
-
-
-
-
-
(511,167)
(2,166)
(513,333)
-
-
-
-
-
(3,610)
(98)
(3,708)
-
-
-
-
(1,126,635)
(82,030)
(13,962)
(88,454)
81
(26,242)
74
(763)
-
(206)
-
(22)
(1,666,129)
(82,719)
(17,876)
(88,476)
-
-
-
-
-
-
-
-
-
(514,777)
(2,264)
(517,041)
(1,311,081)
155
(27,233)
(1,855,200)
CARRYING VALUE 2016
27,047,827
36,498,075
3,102,595
CARRYING VALUE 2015
5,653,845
27,910,760
-
42,679
10,791
148,760
10,801
66,850,737
-
-
33,576,396
Assets in the course of construction:
Superloop has entered into an agreement with a leading corporation to establish a fibre optic telecommunications network in Hong
Kong. The fibre optic telecommunications network will have a 14-month construction timeline and will comprise an initial network of
approximately 110 kilometers across Hong Kong’s key data center campuses and enterprise buildings, when completed. Superloop
will hold a 25 year indefeasible right of use over the infrastructure, with two (2) further five (5) year options to extend the length
of the agreement. As at the date of this report, Superloop had made the first installment payments due under the agreement of
$22.8m. These initial payments have been recognised as an asset in the course of construction within the Statement of Financial
Position. The remaining payments of $21m are linked to performance milestones associated with the construction timeline and are
included in Note 28 of this report.
14. INTANGIBLE ASSETS
Carrying amounts of:
Development costs
Rights and licences
Software
Customer relationships, brands and trademarks
Goodwill
TOTAL
54
30 June 2016
30 June 2015
$
23,820
4,185,744
1,576,957
551,246
6,025,442
$
-
4,300,000
-
-
-
12,363,209
4,300,000
Superloop Annual Report 2016 Notes to the Consolidated Financial Report
Movements
Development
costs
Rights and
licences
Software
Customer,
brand and
trademarks
Goodwill
Total
Cost or valuation
OPENING BALANCE AS AT 28 APRIL 2014
Additions – externally acquired
BALANCE AS AT 30 JUNE 2015
Additions through business combinations
(refer note 36)
$
-
-
-
-
$
-
4,375,000
4,375,000
$
$
$
-
-
-
-
-
-
$
-
4,375,000
4,375,000
-
-
-
-
1,720,487
581,000
6,025,442
8,326,929
Other additions
23,820
185,784
91,289
Movements in foreign exchange
-
6,365
-
-
-
-
-
300,893
6,365
BALANCE AS AT JUNE 2016
23,820
4,567,149
1,811,766
581,000
6,025,442
13,009,187
Accumulated amortisation
OPENING BALANCE AS AT 28 APRIL 2014
Accumulated amortisation
BALANCE AS AT 30 JUNE 2015
Accumulated amortisation
Movements in foreign exchange
BALANCE AS AT JUNE 2016
-
-
-
-
-
-
-
(75,000)
(75,000)
-
-
-
-
-
-
(306,315)
(234,819)
(29,754)
(90)
-
-
(381,405)
(234,819)
(29,754)
-
-
-
-
-
-
-
(75,000)
(75,000)
(570,888)
(90)
(645,978)
CARRYING VALUE 2016
23,820
4,185,744
1,576,957
551,246
6,025,442
12,363,209
CARRYING VALUE 2015
-
4,300,000
-
-
-
4,300,000
Goodwill has been allocated for impairment testing purposes to the following cash-generating units:
APEXN Pty Ltd
CINENET Systems Pty Ltd
TOTAL INTANGIBLE ASSETS - GOODWILL
30 June 2016
30 June 2015
$
3,197,845
2,827,597
6,025,442
$
-
-
-
An impairment loss is recognised for the amount by which the carrying amount exceeds its recoverable amount. The recoverable
amount for the cash-generating units is determined based on a value in use calculation which is based on the present value of
future forecast cash earnings, as measured by earnings before interest expense, taxes, depreciation and amortisation (EBITDA).
The forecast earnings are based on financial budgets approved by the Board covering a two-year period with the earnings beyond
the two-year period being extrapolated using a per annum growth rate. A pre-tax discount rate of 12.5% has been assumed,
representing the long term average and includes a risk-premium given the early nature of the Group’s business venture.
For both cash-generating units, impairment testing has indicated that the carrying amount will not exceed the recoverable amount,
therefore no impairment loss on goodwill has been identified.
55
Superloop Limited and controlled entities Notes to the Consolidated Financial Report
15. DEFERRED TAX ASSETS
DEFERRED TAX ASSETS ATTRIBUTABLE TO:
Employee benefits
Expenses deductible in future years
Tax credits from tax losses
TOTAL DEFERRED TAX ASSETS
Set-off of deferred tax liabilities pursuant to set-off provisions (Note 20)
30 June 2016
30 June 2015
$
$
100,265
71,245
2,707,313
2,878,823
(48,329)
14,778
226,701
915,934
1,157,413
(44,328)
Deferred tax assets not recognised
(2,830,494)
(1,113,085)
DEFERRED TAX ASSETS NOT RECOGNISED IN THE STATEMENT OF FINANCIAL POSITION
-
-
16. TRADE AND OTHER PAYABLES
Trade payables
Other payables
Accrued expenses
TOTAL TRADE AND OTHER PAYABLES
17. INTEREST-BEARING LOANS AND BORROWINGS
The Company had no debt outstanding as at 30 June 2016.
30 June 2016
30 June 2015
$
2,803,428
94,745
3,680,920
6,579,093
$
903,041
16,859
1,665,777
2,585,677
The Company had a Bank Guarantee Facility at 30 June 2016 of $900,000, with $295,606 drawn as security against the Group’s
lease commitments for its corporate office located at 333 Ann Street, Brisbane.
In the prior year the Company had a Bank Guarantee drawn as a performance bond of SGD260,000 as security against the
Company’s FBO licence obligation in Singapore to install at least 80kms of fibre optic cable by 30 June 2015. The Company met
this obligation and the Bank Guarantee was released.
Bank guarantee facility- available
Bank guarantee facility- utilised
18. PROVISIONS
Current - employee benefits
Non-current - employee benefits
TOTAL PROVISIONS
30 June 2016
30 June 2015
$
604,394
295,606
$
624,951
275,049
30 June 2016
30 June 2015
$
342,124
69,303
411,427
$
83,777
-
83,777
The provision for employee benefits represents annual leave and long service leave entitlements accrued.
56
Superloop Annual Report 2016 Notes to the Consolidated Financial Report
19. DEFERRED REVENUE
Deferred IRU revenue
Deferred installation fees
TOTAL DEFERRED REVENUE
Current
Non-current
TOTAL DEFERRED REVENUE
20. DEFERRED TAX LIABILITIES
Deferred tax liabilities attributable to:
Prepayments
Amortisation of intangible assets
TOTAL DEFERRED TAX LIABILITIES
Set-off of deferred tax liabilities pursuant to set-off provisions (Note 15)
DEFERRED TAX LIABILITIES RECOGNISED IN THE STATEMENT OF
FINANCIAL POSITION
21. CONTRIBUTED EQUITY
(A) SHARE CAPITAL
30 June 2016
30 June 2015
$
195,432
31,340
226,772
204,314
22,458
226,772
$
-
-
-
-
-
-
30 June 2016
30 June 2015
$
$
3,803
44,526
48,329
(48,329)
-
44,328
-
44,328
(44,328)
-
Note
30 June 2016
Number of Shares
30 June 2015
Number of Shares
30 June 2016
$
30 June 2015
$
Fully paid ordinary shares
(C)
128,243,301
90,000,000
134,106,147
58,800,142
TOTAL SHARE CAPITAL
Less: issue costs
CONTRIBUTED EQUITY
128,243,301
90,000,000
134,106,147
(2,919,783)
58,800,142
(655,348)
128,243,301
90,000,000
131,186,364
58,144,794
57
Superloop Limited and controlled entities
Notes to the Consolidated Financial Report
(B) Movements in ordinary share capital
Date
Details
28-Apr-14
Opening Balance
15-Sep-14
New share issue
27-MAR-15
SHARE SPLIT
27-Mar-15
Director loan conversion
27-Mar-15
Purchase of Superloop (Australia) Pty Ltd
02-Apr-15
Private placement
26-May-15
Initial public offering
30-JUN-15
BALANCE
16-Oct-15
Partial consideration for acquisition of APEXN Pty Ltd (i)
30-Nov-15
Partial consideration for acquisition of CINENET Systems
Pty Ltd (i)
11-Dec-15
Share placement
30-Dec-15
Share purchase plan
29-Jun-16
Entitlement offer (institutional component) (ii)
Number of
Shares
Issue Price
$
1
141
20,875,000
37,500,000
1,625,000
12,500,000
17,500,000
90,000,000
897,666
677,812
22,045,000
3,937,118
10,685,705
1.00
1.00
0.00
0.80
0.80
0.80
1.00
2.23
2.21
1.90
1.90
2.10
Value
$
1
141
142
30,000,000
1,300,000
10,000,000
17,500,000
58,800,142
2,000,000
1,500,000
41,885,500
7,480,524
22,439,981
30-JUN-16
BALANCE
128,243,301
134,106,147
(i) These share issues were non-cash transactions (refer to Note 31).
(ii) The retail component of the Entitlement Offer was completed on 15 July 2016 with 6,109,637 shares issued on 21 July 2016 at $2.10 per share.
(C) ORDINARY SHARES
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Group in proportion to the
number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person
or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote. Ordinary shares have no par value and the
Group does not have a limited amount of authorised capital.
(D) DIVIDEND REINVESTMENT PLAN
The Group does not have a dividend reinvestment plan in place.
(E) CAPITAL MANAGEMENT
The Group’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that is can continue
to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the
cost of capital. In future, the Directors may pursue other funding options such as debt, sale and leaseback of assets, additional
equity and various other funding mechanisms as appropriate in order to undertake its projects and deliver optimum shareholders’
return. The Group intends to maintain a gear ratio appropriate for a company of its size and position of development.
Total borrowings (as per note 17)
Less: cash and cash equivalents
NET DEBT / (SURPLUS CASH)
TOTAL EQUITY
GEARING RATIO
58
30 June 2016
30 June 2015
$
-
$
-
45,854,135
18,011,900
(45,854,135)
(18,011,900)
119,736,809
53,769,910
(38.3%)
(33.5%)
Superloop Annual Report 2016
Notes to the Consolidated Financial Report
The Group plans to manage its capital structure by reviewing its gearing ratio to ensure it maintains an appropriate level of gearing
within any potential facility covenants. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total
interest bearing financial liabilities and derivatives financial instruments, less cash and cash equivalents. Total capital is calculated
as equity, as shown in the statement of financial position, plus net debt.
22. RESERVES
Opening balance
Cash flow hedge reserve (1)
Foreign currency translation reserves(2)
TOTAL RESERVES
30 June 2016
30 June 2015
$
145,592
(368,560)
457,999
235,031
$
-
-
145,592
145,592
(1) The cash flow hedge reserve represents the cumulative effective portion of gains or losses arising from changes in fair value of
hedging instruments entered into as cash flow hedges. The cumulative gain or loss arising from changes in fair value of the hedging
instruments that are recognised and accumulated in the cash flow hedge reserve will be reclassified to profit or loss only when the
hedged transaction affects the profit or loss, or is included in the carrying value of a fixed asset where the purpose of the hedge was
to minimise the exposure on a contractual commitment to acquire or construct a fixed asset.
(2) The assets and liabilities of foreign operations are translated into the presentation currency (Australian dollars) using the
exchange rates as at the reporting date. The revenues and expenses of the foreign operations are translated into the presentation
currency using the average exchange rates, which approximate the rate at the date of the transaction. All resulting foreign exchange
differences are recognised in other comprehensive income through the foreign currency reserve.
23. ACCUMULATED LOSSES
Movements
Opening balance
Loss for the year
TOTAL ACCUMULATED LOSSES
30 June 2016
$
(1,193,442)
30 June 2015
$
-
(7,164,110)
(1,193,442)
(8,357,552)
(1,193,442)
24. DIVIDENDS
No dividends were paid or were declared payable by the Group during the year ended 30 June 2016.
25. KEY MANAGEMENT PERSONNEL DISCLOSURES
(A) KEY MANAGEMENT PERSONNEL COMPENSATION
Short-term employee benefits
Post-employment benefits
Long-term employee benefits
Share-based payments
30 June 2016
$
30 June 2015
$
1,913,563
132,830
61,416
-
246,479
22,075
-
-
TOTAL KEY MANAGEMENT PERSONNEL COMPENSATION
2,107,809
268,554
Detailed remuneration disclosures are provided in the Remuneration Report.
59
Superloop Limited and controlled entities Notes to the Consolidated Financial Report
(B) LOANS TO KEY MANAGEMENT PERSONNEL
Certain key management personnel were eligible to participate in a loan scheme provided by a related party to enable them to
acquire shares as part of the private place capital raising undertaken by the Group. Under the terms and conditions of the loan
scheme the full principal and interest due at the end of the term. If the employee resigns or leaves the Group before the end of the
original loan term, the loan plus any accrued interest is repayable immediately.
The Group does not guarantee or have any obligations with respect to the loan agreement between the employee and the related
party. Details of the loan terms and conditions are provided in the Remuneration Report.
(C) OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
There were no other transactions with key management personnel during the period not otherwise disclosed in the report.
26. REMUNERATION OF AUDITORS
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices
and non-related audit firms:
(A) DELOITTE TOUCHE TOHMATSU
Parent Entity Auditor
(i) Audit, review of financial statements
(ii) Audit, review of subsidiary statutory reports
Network Firm of the Parent Entity Auditor
(iii) Audit, review of subsidiary statutory reports
TOTAL REMUNERATION OF DELOITTE
30 June 2016
30 June 2015
$
$
107,670
14,500
24,432
146,602
47,250
-
-
47,250
The Group may decide to employ the auditor (Deloitte) on assignments additional to their statutory audit duties where the auditor’s
expertise and experience with the Group are important. Details of the amounts paid or payable to the auditor for audit and non-audit
services provided during the year are set out above.
The Board of Directors has considered the position and, in accordance with advice received from the Audit and Risk Management
Committee, is satisfied that the provision of the non-audit services is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the auditor,
as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following
reasons:
• all non-audit services have been reviewed by the Audit and Risk Management Committee to ensure they do not impact the
impartiality and objectivity of the auditor
• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics
for Professional Accountants.
(B) RELATED PRACTICES OF DELOITTE TOUCHE TOHMATSU
The following fees were paid for services provided by Deloitte Corporate Finance Pty Ltd, a related practice of Deloitte Touche.
30 June 2016
30 June 2015
$
-
-
$
47,820
47,820
Investigating accountant for the listing of Superloop on the ASX
TOTAL REMUNERATION OF DELOITTE TOHMATSU RELATED PRACTICES
(C) NON-DELOITTE AUDIT FIRMS
Superloop Limited did not engage with any other non-Deloitte audit firms.
60
Superloop Annual Report 2016
Notes to the Consolidated Financial Report
27. OPERATING LEASE ARRANGEMENTS
Operating leases relate to the leasing of office premises and network communication equipment, which were existing leases
acquired through the acquisition of APEXN Pty Ltd.
The Group has entered lease terms for office space of up to four years in length. During the year the Group entered into a lease
arrangement for office space in Singapore. Recently the Group entered into new arrangements for office space in Brisbane,
Melbourne and Hong Kong that commence in the 2017 financial year. The office space in Singapore and Brisbane are longer term
leases which both include options to renew the leases for further terms, and the Brisbane lease includes an annual fixed percentage
increase in the lease payments. The Melbourne and Hong Kong leases are less than 12 months in initial duration and have been
entered into to accommodate staff on a short-term basis as the business develops.
For the year ended 30 June 2016, the Group made operating lease payments for its office premises in Singapore and the network
communication equipment.
Payments recognised as an expense under operating leases are as follows:
Minimum lease payments
TOTAL OPERATING LEASE ARRANGEMENTS
Non-cancellable operating lease rentals are payable as follows:
Not later than 1 year
Later than 1 year and not later than 5 years
Later than 5 years
TOTAL NON-CANCELLABLE OPERATING LEASE COMMITMENTS
28. COMMITMENTS AND CONTINGENCIES
(A) CAPITAL COMMITMENTS
30 June 2016
30 June 2015
$
137,817
137,817
$
-
-
30 June 2016
30 June 2015
$
574,050
1,199,262
-
1,773,312
$
-
-
-
-
Capital expenditure contracted for at the end of each reporting year but not recognised as liabilities is as follows:
Property, plant and equipment
TOTAL CAPITAL COMMITMENTS
30 June 2016
30 June 2015
$
$
24,953,584
2,123,575
24,953,584
2,123,575
Capital commitments disclosed above relate to contracted capital commitments associated with network expansion including a
total of $21.4m to complete payment for the Hong Kong network, $3m committed to the Singapore network and $0.5m across other
networks.
Non-cancellable operating lease commitments are disclosed in note 27 to the financial statements.
(B) CONTINGENT ASSETS
The Group did not have any contingent assets during the year or as at the date of this report.
(C) CONTINGENT LIABILITIES
The Group did not have any contingent liabilities during the year or as at the date of this report.
61
Superloop Limited and controlled entities Notes to the Consolidated Financial Report
29. RELATED PARTY TRANSACTIONS
The following is a summary of the transactions with related parties and/or companies under the control of the founding shareholder.
Shared services agreement
The Group has entered into a shared services agreement with Capital B Pty Ltd ACN 162 622 282 (Capital B), a company controlled
by the Founder. Under the agreement, Capital B provides certain services to the Group (e.g. administrative and information
technology services) and a right to use Capital B’s premises at 14-16 Church Street, Fortitude Valley, Queensland. The services
are charged on the basis of the actual cost to Capital B, allocated on the time Capital B employees spend providing services to
the Group. The right to use the premises is based on a proportion of the lease expenses (between Bevan Slattery as trustee for the
Church Street Trust and Capital B), associated with the Group’s use of the premises. The head lease is on arm’s length terms. The
obligations on Capital B under the agreement are typical for a services agreement, and require that Capital B provide the services
with due care, skill and judgment, comply with the law in providing the services and effect appropriate insurance. Capital B may
seek reimbursement for certain expenses incurred in connection with the provision of services under the agreement. Either party
may terminate the agreement for convenience on 60 days’ written notice.
Prior to the end of the financial year, the Group entered into a revision of the agreement with Capital B which provides for, in
addition to certain services provided by Capital B to the Group, certain administrative services to be also provided by Superloop to
Capital B as well as the right for Capital B to occupy a portion of the Group’s premises at Level 17, 333 Ann Street, Brisbane. The
services, and the right to occupy the premises, are provided on arm’s length terms.
Customer agreement with Megaport
Superloop, via its operating subsidiaries, has entered into customer agreements for the provision of connectivity services with
Megaport Limited ACN 607 301 969 and its operating subsidiaries (Megaport). The Founder and significant shareholder of
Superloop is also the Founder and significant shareholder of Megaport. Under the agreements, the customer (Megaport) issues a
service order form to the Superloop operating entity (as applicable) which sets out the nature of and the applicable monthly fees for
the connectivity services. The master services agreements are on the same terms as other master services agreements between
Superloop and unrelated customers (with some variance to the master services agreement with Megaport SG to reflect Singaporean
law) and the fees in each current service order form are at competitive market rates.
Common control business combinations
Refer to note 34 for information on common control business combinations.
Interest to the Founding Shareholder’s Loans
The Company’s initial operations in the prior year, including the acquisition of the Singapore duct network, were funded by loans from
the Founding Shareholder. In the prior year, the majority of the loans were converted to equity at $0.80 per share, with a portion repaid
from the proceeds of a private placement capital raising (refer note 21). Interest on those loans was charged at the Reserve Bank of
Australia cash rate (from time to time) plus 1%.
Loans to key Management Personnel
Certain key management personnel were eligible to participate in a loan scheme provided by a related party to enable them to acquire
shares as part of the private placement capital raising undertaken by the Group in the prior year.
PROVISION OF SERVICES TO/FROM RELATED PARTIES
SALES OF GOODS / SERVICES
Revenue earned from related parties
PROVISION OF SERVICES TO SUPERLOOP
30 June 2016
30 June 2015
$
260,143
$
-
Payments to related parties for provision of shared services and rent
1,023,689
842,156
Balance outstanding at year end
Receivables
Trade and other payables
62
260,143
41,171
-
421,099
Superloop Annual Report 2016
Notes to the Consolidated Financial Report
LOANS TO/FROM RELATED PARTIES
Beginning of the year
Interest charged
Loans received from related parties
Loans acquired as part of the purchase of subsidiaries
Foreign exchange (gain) / loss
Amounts converted to equity
Amounts repaid to related parties
END OF THE YEAR
30 June 2016
$
30 June 2015
$
-
-
-
-
-
-
-
-
-
475,874
34,232,343
7,085,344
(3,293,561)
(30,000,000)
(8,500,000)
-
30. RECONCILIATION OF LOSS AFTER INCOME TAX TO NET CASH FLOW FROM OPERATING ACTIVITIES
Loss for the year after income tax
Adjust for:
Interest income
Depreciation and amortisation
Interest expense
Foreign exchange gain / (losses)
Proceeds from the sale of property, plant and equipment
Transaction costs associated with the acquisition of subsidiaries
SUBTOTAL
Change in operating assets and liabilities
Increase in prepayments and other current assets
(Increase) / decrease in consumption tax
Decrease in trade creditors
Increase in employee entitlements
30 June 2016
$
30 June 2015
$
(7,164,110)
(1,193,442)
(50,700)
1,881,969
-
(754,899)
(755,719)
55,164
(7,217)
589,777
475,874
(3,300,490)
-
-
(6,788,295)
(3,435,498)
(775,810)
82,250
927,935
223,625
50,424
303,752
316,678
67,079
NET CASH OUTFLOW USED IN OPERATING ACTIVITIES
(6,330,295)
(2,697,565)
31. NON-CASH TRANSACTIONS
Current year, the group entered into the following non-cash investing and financing activities which are not reflected in the
consolidated statement of cash flows:
Current year:
•
the Group acquired 100% of APEXN Pty Ltd (APEXnetworks) which included non-cash consideration of $2.0 million in
Superloop Limited shares issued at $2.228; and
the Group acquired 100% of CINENET Systems Pty Ltd which included non-cash consideration of $1.5 million in Superloop
Limited shares issued at $2.213.
•
Refer to Note 37 for additional information on these transactions.
Prior year:
•
the Group acquired 100% of Superloop (Australia) Pty Ltd which included consideration of $1.3 million in Superloop Limited
shares issued at $0.80 (refer to note 34).
63
Superloop Limited and controlled entities
Notes to the Consolidated Financial Report
32. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks: market risk (including interest rate risk and price risk), credit risk
and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the financial performance of the Group.
The Group holds the following financial instruments:
Financial assets
Cash and cash equivalents
Term deposits
Trade and other receivables
Other non-current assets
TOTAL FINANCIAL ASSETS
Financial liabilities
Trade and other payables
Interest-bearing borrowings
TOTAL FINANCIAL LIABILITIES
30 June 2016
$
30 June 2015
$
44,819,436
17,046,020
1,034,699
1,370,090
17,180
965,880
190,867
-
47,241,405
18,202,767
6,579,093
2,585,677
-
-
6,579,093
2,585,677
(A) MARKET RISK
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
prices. Market risk comprises three types of risk: foreign exchange risk, price risk and interest rate risk.
(i) Foreign exchange risk
Superloop is exposed to exchange rate movements, in particular movements in the A$/US$ rate, A$/S$ and S$/US$. Because a
proportion of Superloop’s payments for inventory and construction work are made or are expected to be made in foreign currency,
primarily US dollars, movements in exchange rates impact on the amount paid for assets, inventory and construction work. Also,
because a proportion of Superloop’s revenues and profits are likely to be earned in Singapore, movements in exchange rates impact
on the translation of account balances in Superloop’s Singapore operations. Therefore, movements in exchange rates, particularly
the A$/US$ rate, the A$/S$ and the S$/US$ rate, may have an impact on Superloop’s financial position and performance.
During the year the Group entered into a contract for the establishment of a Hong Kong network. The payment terms and conditions
are expressed in USD, with the payment dates linked to performance milestones related to the completion of various stages of the
network. The Group funded this commitment via an AUD equity raising completed in December 2015. The Group elected to mitigate
a large portion of the AUD / USD exchange rate risk arising from the commitment by converting AUD to USD and holding it in a
USD bank account. The Group has designated this transaction as a hedging transaction and accounted for it as per the Group’s
accounting policy (refer note 1(y)). At 30 June 2016, the value of the hedging funds were USD12.5m. The hedge is expected to fully
mature within the next financial year, when the performance milestones for the contractual payments for the establishment of the
Hong Kong network are achieved.
(ii) Price risk
The Group is not exposed to any equity securities price risk or commodity price risk.
(iii) Cash flow and fair value interest rate risk
Interest rate risk refers to the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate
due to changes in market interest rates.
The Group’s main interest rate risk arises from its cash at bank and term deposits (refer Note 10).
(iv) Sensitivity
At 30 June 2016, if interest rates had increased by 100 or decreased by 100 basis points from the year end rates, and the cash
balances remain constant for the year along with all other variables, profit before tax for the year would be impacted $456,955
higher / $456,955 lower.
64
Superloop Annual Report 2016
Notes to the Consolidated Financial Report
(B) CREDIT RISK
Credit risk arises from cash and cash equivalents, trade receivables, other receivables and loans receivable.
(i) Cash and cash equivalents
Deposits are placed with Australian banks.
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if
available) or to historical information about counterparty default rates:
Cash at Bank and Short-Term Deposits
AA rated
A+ rated
BBB+ rated
TOTAL
30 June 2016
30 June 2015
$
$
45,854,135
18,011,900
-
-
-
-
45,854,135
18,011,900
In determining the credit quality of the financial assets, Superloop has used the long-term rating from Standard & Poor’s as of July
2016.
(i) Trade receivables
Customer credit risk is managed by performing a credit assessment of customers. The Group’s standard payment terms are 30
days, but the Group may agree to longer payment terms. The Group does not require collateral in respect of financial assets.
Outstanding customer receivables are monitored regularly.
The Group aims to minimise concentration of credit risk by undertaking transactions with a large number of customers. In addition,
receivable balances are monitored on an ongoing basis with the intention that the Group’s exposure to bad debts is minimised. As
at 30 June 2016, the Group had $1,263,033 customer trade receivables (refer note 11).
(ii) Loans to related parties
Loans to related parties are not provided within the Group’s normal operating activities. Loans to related parties are only provided
on commercial terms after a risk assessment has been performed and only with approval from the Board of Directors. The Group’s
maximum exposure to credit risk in respect of loans to related parties is its carrying value. The Group does not require collateral in
respect of loans to related parties.
(C) LIQUIDITY RISK
Superloop’s business is capital intensive in nature, and the continued growth of the Company relies on the acquisition
and development of new fibre optic telecommunications infrastructure and ongoing maintenance of existing fibre optic
telecommunications infrastructure. Superloop requires sufficient access to debt and equity capital to fund this expenditure.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding
through an adequate amount of committed credit facilities to meet obligations when due. Failure to obtain capital on favorable
terms may hinder Superloop’s ability to expand and pursue growth opportunities, which may reduce competitiveness and have an
adverse effect on the financial performance, position and growth prospects of the Company.
As at 30 June 2016, the Group had cash at bank of $44,819,436 and term deposits of $1,034,699, which the Group believes is
sufficient working capital to complete the initial networks, operate and maintain those networks, hire additional sales professionals
and evaluate new growth opportunities. As at 30 June 2016, the Group has no outstanding interest-bearing borrowings.
Within 12
months
$
Between
1 and 5 years
$
Over
5 years
$
Total
contractual
cash flows
$
Carrying
Amount
$
Contractual Maturities of
Financial Liabilities
2016
Trade payables
Interest-bearing borrowings
TOTAL NON-DERIVATIVES
6,579,093
6,579,093
-
-
-
-
-
-
-
6,579,093
6,579,093
-
-
6,579,093
6,579,093
65
Superloop Limited and controlled entities Notes to the Consolidated Financial Report
Contractual Maturities of
Financial Liabilities
2015
Trade payables
Interest-bearing borrowings
TOTAL NON-DERIVATIVES
2,585,677
(D) FAIR VALUE MEASUREMENTS
Within 12
months
$
Between
1 and 5 years
$
Over
5 years
$
Total
contractual
cash flows
$
Carrying
Amount
$
2,585,677
-
-
-
-
-
-
-
2,585,677
2,585,677
-
-
2,585,677
2,585,677
(i) Trade and other receivables
Due to the short-term nature of the trade and other receivables, their carrying amount is assumed to be the same as their fair value.
(ii) Trade and other payables
Due to the short-term nature of the trade and other payables, their carrying amount is assumed to be the same as their fair value.
33. EARNINGS PER SHARE
(A) LOSSES PER SHARE
Total basic losses per share attributable to the ordinary equity holders of the Group
(6.81)
(3.55)
30 June 2016
Cents
30 June 2015
Cents
(B) DILUTED LOSSES PER SHARE
Total diluted losses per share attributable to the ordinary equity holders of the Group
(6.81)
(3.55)
(C) RECONCILIATIONS OF EARNINGS USED IN CALCULATING EARNINGS PER SHARE
30 June 2016
Cents
30 June 2015
Cents
Basic Earnings Per Share
Loss attributable to the ordinary equity holders of the Group used in calculating basic losses per share
(7,164,110)
(1,193,442)
30 June 2016
$
30 June 2015
$
Diluted Earnings Per Share
Loss from continuing operations attributable to the ordinary equity holders of the Group:
(7,164,110)
(1,193,442)
(D) WEIGHTED AVERAGE NUMBER OF SHARES USED AS THE DENOMINATOR
Weighted average number of ordinary shares used as the denominator in calculating basic earnings
per share
Plus potential ordinary shares
Weighted average number of ordinary shares and potential ordinary shares used as the denominator
in calculating diluted earnings per share
30 June 2016
Number of
Shares
30 June 2015
Number of
Shares
105,191,913
33,589,661
-
-
105,191,913
33,589,661
66
Superloop Annual Report 2016
Notes to the Consolidated Financial Report
34. SUBSIDIARIES AND TRANSACTIONS WITH NON-CONTROLLING INTERESTS
Name of entity
Superloop (Australia) Pty Ltd(1)(2)
Superloop (Singapore) Pte Ltd(2)
Superloop (Hong Kong) Limited(2)
APEXN Pty Ltd(1)
CINENET Systems Pty Ltd(1)
Country of incorporation
Class of shares
30 June 2016
%
30 June 2015
%
Australia
Singapore
Hong Kong
Australia
Australia
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100%
100%
100%
100%
100%
100%
100%
100%
0%
0%
(1) These wholly-owned subsidiaries are members of the Australian tax-consolidated group.
(2) These acquisitions completed in the prior year, were of commonly-controlled entities, which have been accounted for at their carrying amounts (refer note 1(c). Assets and
liabilities at the time of the acquisition are measured at their book values. The net impact of the common control transactions are recognised in other equity.
Details of prior year common control transactions
Name of entity
Superloop (Australia) Pty Ltd
Superloop (Singapore) Pte Ltd
Superloop (Hong Kong) Limited
TOTAL NET LIABILITIES AT DATE OF ACQUISITION
Consideration
TOTAL COMMON CONTROL TRANSACTIONS
Date Acquired
Net Liabilities at date
of Acquisition
27 March 2015
1 September 2014
7 October 2014
1,355,603
467,266
204,024
2,026,833
1,300,141
3,327,034
35. EVENTS OCCURRING AFTER THE REPORTING PERIOD
After balance date, on 13 July 2016, 725,814 options were issued under the Group’s Executive Option Plan, consistent with the
resolution approved by shareholders on 21 June 2016, and on 13 July 2016, 196,068 performance rights were issued under the
Group’s Employee Rights plan.
On 15 July 2016, the Group completed the retail component of the Entitlement Offer launched in June 2016, issuing an additional
6,109,637 shares for $12,830,238 on 21 July 2016.
36. PARENT ENTITY FINANCIAL INFORMATION
The accounting policies of the parent entity, which have been applied in determining the financial information shown below, are
the same as those applied in the consolidated financial statements, except as set out below. Refer to note 1 for a summary of the
significant accounting policies relating to the Group.
Tax Consolidation
During the year, the Company and its wholly-owned Australian resident entities have formed a tax-consolidated group with effect
from 23 March 2015 and are therefore taxed as a single entity from that date. The head entity within the tax-consolidated group
is Superloop Limited. The members of the tax-consolidated group are identified in note 34. The Company is in the process of
implementing tax funding and tax sharing agreements.
Tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences of the members of the tax-
consolidated group are recognised in the separate financial statements of the members of the tax-consolidated group using the
‘separate taxpayer within group’ approach by reference to the carrying amounts in the separate financial statements of each entity
and the tax values applying under tax consolidation.
Deferred tax assets are recognised where it is considered probable that they will be recovered in the future and, as such, are
subjective. Superloop has not recognised any deferred tax assets in the statement of financial position as at 30 June 2016.
67
Superloop Limited and controlled entities Notes to the Consolidated Financial Report
Financial Position
Total cash & cash equivalents
Total current assets
Total non-current assets
TOTAL ASSETS
Total current liabilities
TOTAL LIABILITIES
NET ASSETS
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
Financial Performance
Loss for the year after tax
Total comprehensive loss for the period
30 June 2016
30 June 2015
$
$
39,696,183
46,449,062
43,944,847
9,523,883
46,752,782
1,300,141
130,090,092
57,576,806
638,016
638,016
56,491
56,491
129,452,076
57,520,315
131,186,364
58,144,794
(368,560)
(1,365,728)
-
(624,478)
129,452,076
57,520,315
(483,505)
(483,505)
(624,478)
(624,478)
(A) GUARANTEES ENTERED INTO BY THE PARENT ENTITY IN RELATION TO THE DEBTS OF ITS SUBSIDIARIES
As at 30 June 2016, Superloop Limited did not have any guarantees in relation to the debts of subsidiaries
(B) CONTINGENT LIABILITIES OF SUPERLOOP LIMITED (PARENT ENTITY)
As a 30 June 2016, Superloop Limited did not have any contingent liabilities.
37. CONTROLLED ENTITIES ACQUIRED OR DISPOSED
During the year Superloop Limited acquired the following entities:
APEXN Pty Ltd
16 October 2015
CINENET Systems Pty Ltd
30 November 2015
If both entities had been acquired at 1 July 2015, the Group would have generated total revenue of $8,387,228 and a Net Loss after
Tax (NPAT) of ($7,670,486) for the full financial year to 30 June 2016, based on unaudited financial information provided by each
entity prior to the date of acquisition.
Goodwill arose in the acquisitions of APEXN Pty Ltd and CINENET Systems Pty Ltd because the consideration paid for the
respective subsidiaries included amounts in relation to the benefit of expected synergies, revenue growth, enhanced capability,
future market development and the assembled workforce of APEXN Pty Ltd. These benefits are not recognised separately from
goodwill because they do not meet the recognition criteria for identifiable intangible assets.
APEXN Pty Ltd (trading as APEXnetworks)
On 16th October 2015, Superloop Limited acquired 100% of APEXN Pty Ltd (APEXnetworks) for a total consideration of $5.8
million, paid as $3.8 million in cash and $2.0 million in Superloop Limited shares issued at $2.228, with the cash component funded
from cash reserves. APEXnetworks allows Superloop to rapidly deploy a managed services capability for wholesale and channel
customers via APEXnetworks’ IT and product platforms. The goodwill of $3,197,845 represents the residual value of the purchase
price over the fair value of the identifiable assets acquired and liabilities assumed shown below. The acquired business contributed
revenues of $3,289,535 and Net Profit after Tax (NPAT) of $124,684 for the 8.5 months since acquisition to 30 June 2016.
68
Superloop Annual Report 2016
Notes to the Consolidated Financial Report
Details of the acquisition are as follows:
Identifiable assets acquired and liabilities assumed
Fair Value $
Cash
Customer receivables
Network equipment: net cost
Payables – accounts
Payables – other
Annual leave liability
Tax liability
Software
Customer relationships
Brand name and trademarks
Net identifiable assets acquired
Consideration transferred
Cash paid
Shares
Total consideration
Goodwill on acquisition
Consideration transferred
Less net identifiable assets acquired
Goodwill on acquisition
Net cash outflow on acquisition
Consideration paid in cash
Less cash and cash equivalent balances acquired
Net cash outflow on acquisition
280,394
292,814
63,487
(99,156)
(95,140)
(104,025)
(18,219)
1,701,000
481,000
100,000
2,602,155
3,800,000
2,000,000
5,800,000
5,800,000
2,602,155
3,197,845
3,800,000
280,394
3,519,606
Transaction costs of $37k related to the acquisition have been expensed during the year.
CINENET Systems Pty Ltd
On 30th November 2015, Superloop Limited acquired 100% of CINENET Systems Pty Ltd for a total consideration of $3 million,
paid as $1.5 million in cash and $1.5 million in Superloop Limited shares issued at $2.213, with the cash component funded from
cash reserves. CINENET Systems provides Superloop an opportunity for the Group to expand its network capabilities into the digital
media vertical. The goodwill of $2,827,597 represents the residual value of the purchase price over the fair value of the identifiable
assets acquired and liabilities assumed shown below. The acquired business contributed revenues of $1,044,158 and NPAT of
$240,743 for the seven months since acquisition to 30 June 2016.
69
Superloop Limited and controlled entities Notes to the Consolidated Financial Report
Details of the acquisition are as follows:
Identifiable assets acquired and liabilities assumed
Fair Value $
Cash
Customer receivables
Network equipment: net cost
Software
Payables – accounts
Payables – other
GST liabilities
Income tax liabilities & provision
Net identifiable assets acquired
Consideration transferred
Cash paid
Shares
Total consideration
Goodwill on acquisition
Consideration transferred
Less net identifiable assets acquired
Goodwill on acquisition
Net cash outflow on acquisition
Consideration paid in cash
Less cash and cash equivalent balances acquired
Net cash outflow on acquisition
370,921
284,413
163,333
19,487
(72,360)
(518,441)
(22,476)
(52,474)
172,403
1,500,000
1,500,000
3,000,000
3,000,000
172,403
2,827,597
1,500,000
370,921
1,129,079
Transaction costs of $13k related to the acquisition have been expensed during the year.
The values identified in relation to the acquisition of CINENET Systems Pty Ltd are provisional as at the reporting date 30 June
2016.
Total net cash outflow on acquisition of subsidiaries
Net cash outflow on acquisitions
Consideration paid in cash
Less cash and cash equivalent balances acquired
Net cash outflow on acquisitions (refer statement of cash flows)
Total goodwill recognised on acquisition of subsidiaries
Goodwill arising from the aquistion of APEXN Pty Ltd
Goodwill arising from the aquistion of CINENET Systems Pty Ltd
Total goodwill recognised on acquisition of subsidiaries (refer note 14)
70
5,300,000
651,315
4,648,685
3,197,845
2,827,597
6,025,442
Superloop Annual Report 2016
Directors’ Declaration
In the Directors’ Opinion:
The financial statements and notes set out on pages 34 to 70 are in accordance with the
Corporations Act 2001, including:
1.
2.
complying with Accounting Standards, the Corporations Regulations
2001 and other mandatory professional reporting requirements, and
giving a true and fair view of the Group's financial position as at 30 June 2016
and of its performance for the year ended on that date, and
At the date of this declaration, there are reasonable grounds to believe that the Group
will be able to pay its debts as and when they become due and payable. Note 1(a)
confirms that the financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board. The directors
have been given the declarations by the chief executive officer and chief financial officer
required by 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors as per section
295(5) of the Corporations Act 2001.
Bevan Slattery
Executive Director and Chief Executive Officer
Brisbane
29 August 2016
71
Superloop Limited and controlled entities
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Riverside Centre
Level 25
123 Eagle Street
Brisbane QLD 4000
GPO Box 1463
Brisbane QLD 4001 Australia
Tel: +61 7 3308 7000
Fax: +61 (0) 3308 7004
www.deloitte.com.au
Independent Auditor’s Report
to the Members of Superloop Limited
Report on the Financial Report
We have audited the accompanying financial report of Superloop Limited, which comprises the
statement of financial position as at 30 June 2016, the statement of comprehensive income, the
statement of cash flows and the statement of changes in equity for the year ended on that date, notes
comprising a summary of significant accounting policies and other explanatory information, and the
directors’ declaration of the consolidated entity, comprising the company and the entities it controlled
at the year-end or from time to time during the financial year as set out on pages 34 to 71.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101
Presentation of Financial Statements, that the financial statements comply with International Financial
Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control, relevant to the company’s
preparation of the financial report that gives a true and fair view, in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by the directors, as
well as evaluating the overall presentation of the financial report.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
72
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Auditor’s Independence Declaration
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001,
which has been given to the directors of Superloop Limited, would be in the same terms if given to the
directors as at the time of this auditor’s report.
Opinion
In our opinion:
(a) the financial report of Superloop Limited is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2016
and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) the financial statements also comply with International Financial Reporting Standards as disclosed
in Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 17 to 27 of the directors’ report for the
year ended 30 June 2016. The directors of the company are responsible for the preparation and
presentation of the Remuneration Report in accordance with section 300A of the Corporations Act
2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit
conducted in accordance with Australian Auditing Standards.
Opinion
In our opinion the Remuneration Report of Superloop Limited for the year ended 30 June 2016,
complies with section 300A of the Corporations Act 2001.
DELOITTE TOUCHE TOHMATSU
R G Saayman
Partner
Chartered Accountants
Brisbane, 29 August 2016
73
The names of the twenty largest holders of quoted equity securities are listed below:
Name
Number held
Shareholder Information
The following shareholder information was applicable as at 31 July 2016.
(A) DISTRIBUTION OF EQUITY SECURITIES
Holding
100,001 and over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
TOTAL
Unmarketable parcels
(B) EQUITY SECURITY HOLDERS
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
BEVAN ANDREW SLATTERY
J P MORGAN NOMINEES AUSTRALIA LIMITED
RBC INVESTOR SERVICES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
SCM CAPITAL PTY LTD
UBS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO EDA
HACKETT CP NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
BLUE STAMP COMPANY PTY LTD
MR DANIEL ABRAHAMS
ALLEGRO CAPITAL NOMINEES PTY LTD
MJG APEXN PTY LTD
INVESTRC PTY LTD
ROCKET SCIENCE PTY LTD
BNP PARIBAS NOMS PTY LTD
HUME CLARK PTY LTD
DANKIM ABRAHAMS
DR DAVID JOHN RITCHIE & DR GILLIAN JOAN RITCHIE
(C) SUBSTANTIAL HOLDERS
Name
1
BEVAN ANDREW SLATTERY
Number of investors
Number of securities
66
1,114
947
1,228
338
3,693
75
60,007,894
10,872,029
4,031,326
2,389,723
1,437,594
1,075,213
1,128,571
999,999
840,743
644,025
593,416
603,500
565,788
547,909
506,727
489,911
458,651
396,343
370,350
362,858
97,759,903
25,773,534
6,930,735
3,722,903
165,863
134,352,938
1,340
Percentage of
issued shares
44.66
8.09
3.00
1.78
1.07
0.80
0.84
0.74
0.63
0.48
0.44
0.45
0.42
0.41
0.38
0.36
0.34
0.30
0.28
0.27
Number held
Percentage of
issued shares
60,007,894
44.66
(D) VOTING RIGHTS
The voting rights attaching to each class of equity securities are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have
one vote.
74
Superloop Annual Report 2016 Corporate Directory
DIRECTORS
• Bevan Slattery
Executive Chairman & CEO
• Daniel Abrahams
Executive Director & Chief Infrastructure Officer
• Greg Baynton
Non-executive Director
•
Louise Bolger
Non-executive Director
• Michael Malone
Non-executive Director
• Richard Anthony (Tony) Clark
Non-executive Director
COMPANY SECRETARIES
•
Paul Jobbins
GM, Corporate & Strategy
• Gregory Bryant
Chief Financial Officer
REGISTERED OFFICE
Superloop Limited
Level 17, 333 Ann Street
Brisbane QLD 4000
Tel: +61 (7) 3088 5999
COMPANY WEBSITE
www.superloop.com
AUDITOR
Deloitte Touche Tohmatsu
Level 25, Riverside Centre
123 Eagle Street
Brisbane QLD 4000
www.deloitte.com/au
SOLICITORS
McCullough Robertson
Level 11, Central Plaza Two
66 Eagle Street
Brisbane QLD 4000
www.mccullough.com.au
SHARE REGISTER
Link Market Services Limited
Level 15, 324 Queen Street
Brisbane QLD 4000
www.linkmarketservices.com.au
STOCK EXCHANGE LISTING
Superloop Limited shares are listed on the Australian
Securities Exchange (ASX) under code SLC
76
Superloop Annual Report 2016