SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
ANNUAL REPORT
FOR THE YEAR ENDED
30 JUNE 2018
SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
Contents
Chairman’s report
Directors’ report
Auditor’s independence declaration
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors’ declaration
Independent audit report
Shareholder information
Corporate governance statement
Corporate directory
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SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
CHAIRMAN’S REPORT
Dear Fellow Shareholder,
I am pleased to be writing to you following a year of diversification and importantly, rapid growth.
Our company has seen year on year growth of 31% in revenue, driving a 168% uplift in underlying (non IFRS) earnings before
interest, tax, depreciation and amortisation (EBITDA) in the year ended 30 June 2018 (FY18).
We have achieved this whilst behind the scenes, we integrated the newly acquired VOD business, we released new functionality
to keep our offering fresh and current, reinvigorated our digital media presence, and initiated projects to improve internal
efficiency such as the deployment of NetSuite’s ERP system.
Our performance and achievements are a credit to the passion and dedication of Xavier and his team.
Increasing our market reach
In FY18, Swift devoted much effort to extending its market reach by developing relationships with notable resellers to give us
global presence. This saw us cement relationships with the likes of Telstra, AST, DXC and Tripleplay, which brought customer
wins such as the 3,000 international rooms with AST and the significant oil and gas deployment via DXC.
Increasing our market opportunity
We have maintained our market leading position in the mining and resources sector, but have made significant gains in
hospitality, aged care and lifestyle, and other sectors including hospitals and government establishments. The net result is that
from a starting point of mining and resources operators comprising some 70% of our customer base last year, non-resources
clients now account for 36% of our expanding customer base. This is in line with diversifying our customer base as we said we
would do in last year’s Annual Report.
In FY19, we will embark upon a trial to include hostels and backpacker establishments with a view to capturing a share of the 2
million plus nights spent by backpackers each year across Australia.
Increasing our customer attractiveness
Increasing our market share and the size of our target market goes hand in hand with our maintaining an outstanding library of
content. Our Hollywood content, our global content partnerships and our premium channels are second to none.
A further feather in our cap is the recently announced partnership with Future TV, a subsidiary of CCTV, China Central Television.
This is a first in Australia, allowing us to provide high-quality content to the increasingly mobile and important Chinese outbound
tourist market.
Financial discipline
It is worthwhile noting that in July 2017, the company assumed a debt facility of $3 million from Bankwest to go towards the
funding of the VOD acquisition which took place in September 2017.
In May 2018, the company repaid the outstanding debt ahead of schedule, leaving it entirely debt free.
Swift finished the financial year with an underlying (non IFRS) EBITDA margin of 12%, a 168% uplift on the previous year, cash in
hand of $3.2 million, an uplift of 43% on the previous year, and annualised contracted (recurring) revenues of $15.7 million, an
uplift of 44% on last year.
2
SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
Looking forward
We are strongly positive about Swift as we look to the future. The initiatives undertaken, the relationships forged, and the talent
recruited make us highly confident of and excited about Swift’s long-term prospects.
As I said at the beginning of this statement, what we achieve is down to our exceptional colleagues, as well as a supportive
board, our increasingly valuable partners, our encouraging customers and of course, our loyal shareholders.
Carl Clump
Chairman
31 August 2018
3
SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
DIRECTORS’ REPORT
Your Directors present their report together with the financial statements of the Group, being Swift Networks Group Limited (the
Company) and its controlled entities, for the financial year ended 30 June 2018.
CHAIRMAN AND DIRECTORS
Name
Position
Mr Carl Clump
Non-Executive Chairman
Mr Xavier Kris
Chief Executive Officer
Mr Paul Doropoulos
Non-Executive Director
Mr Robert Sofoulis
Non-Executive Director
Mr Ryan Sofoulis
Executive Director
PRINCIPAL ACTIVITIES
The principal activities of the consolidated Group during the financial year were the provision of fully integrated
digital entertainment solutions for the resources, hotel, government, lifestyle village and aged care sectors.
REVIEW OF OPERATIONS AND FINANCIAL REVIEW
Review of Operations
The Company has delivered another year of stellar operational and financial performance through the continued execution of its
strategic growth plan articulated at the time of listing in June 2016. Through a combination of organic and inorganic growth
initiatives Swift has continued to deliver exceptional financial and operational growth. At reporting date Swift had over 63,000
contracted subscribers, an increase of 84% from 30 June 2017, with its system now installed in 334 sites in Australia and across
the globe.
Acquisition of Video On Demand (VOD)
In September 2017, Swift completed its acquisition of digital entertainment provider VOD which boosted Swift’s footprint by
more than 20,000 new rooms and 114 new sites, at the time of acquisition, representing 75% growth in the number of sites with
Swift services installed. VOD had a network of multinational clients and system integrators across Swift’s target markets of
hospitality, resources, student accommodation, hospitals and aged care.
Technology
In 2018 the Company continued to invest in its core product with the addition of several new technologies aimed at maintaining
Swift’s competitive advantage and adding new and exciting product offerings to its growing customer base. Swift has developed
smart television and hotel property management system integration capabilities, as well as Bring Your Own Device (“BYOD”)
capabilities allowing users to access the Swift Entertainment app via Android and IOS smart phones and tablets. These new
technology advancements have allowed Swift to offer its services to a growing number of different market verticals.
4
SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
DIRECTORS’ REPORT
REVIEW OF OPERATIONS AND FINANCIAL REVIEW (Continued)
Reselling agreements
During FY 2018, Swift signed several reseller agreements with strategic partners to provide Swift with a sizeable pipeline of new
business opportunities in several of its identified target markets both in Australia and across the globe.
Swift signed a reseller agreement with DXC Technology (NYSE: DXC), a leading independent, end-to-end IT services company, via
its subsidiary DXC Connect. DXC Technology is a major international provider of IT solutions with 6,000 clients in private and
public sectors across 70 countries. Under the agreement, Swift became DXC Connect’s preferred vendor for the provision of
digital entertainment systems, content and services to complement DXC Connect’s system integration solutions and add further
value to their existing client base. Swift’s reselling agreement with DXC saw the Company sign its largest revenue deal since
listing – a five-year deal to provide services to between 2,500 and 4,600 rooms annually in onshore and offshore locations
through Australia’s Northwest.
Swift also signed a reseller agreement with global satellite communications provider AST Australia to offer Swift’s full suite of
services to AST clients over three years. AST Australia provides satellite services and equipment to a global base of more than
2,000 clients in the maritime (commercial and cruise), resources, government, energy and utilities sectors.
Swift’s reseller agreement with Telstra has also delivered several key contracts in the resources and aged care markets which are
detailed below.
Resources
In 2018 Swift further enshrined its position as the dominant market leader in the provision of fully integrated digital
entertainment solutions in the resources sector, with new client wins during the year including the following:
OZ Minerals Ltd (ASX: OZL). OZ signed a three-year contract for Swift to provide its services at the 550-bed Carrapateena camp in
South Australia, providing entertainment on demand and online connectivity, with movies on demand, free-to-air TV, 24x7
support and capability for wireless internet as well as information, messaging and alerting direct to workers in-room.
In WA, Swift won multi-year contracts to provide telecommunications services and entertainment content to new clients Pilbara
Minerals Ltd (ASX: PLS), Talison Lithium and Altura Mining Ltd (ASX: AJM).
At Pilbara Minerals, Swift upgraded the digital entertainment and connectivity services at its 300-room Pilgangoora Camp in
WA’s Pilbara region. Under the contract, Swift designed, rolled out and provided a range of services to Pilbara Minerals for an
initial period of three years. In addition to scheduled movies from Swift’s extensive content library, Swift recommissioned the
optical network at Pilgangoora and enhanced the camp’s free-to-air TV service. Swift also provided Wi-Fi capability and internet
user management services, all supported 24x7 across the contract term.
Talison Lithium chose Swift to provide content and services to its new North Greenbushes camp, south of Perth in WA.
Contracting via MSP Engineering, Swift designed, constructed and supported a world-class in-room entertainment service for the
camp’s 200 rooms, with the contract having an initial period of 24 months. Swift is providing movies on demand, wireless
internet, free-to-air TV and 24x7 support across the contract term.
Altura Mining Ltd (ASX: AJM) selected Swift for an initial 12-month term to provide digital entertainment and movie content to
Altura’s 325-room camp at Pilgangoora in the Pilbara.
5
SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
REVIEW OF OPERATIONS AND FINANCIAL REVIEW (Continued)
DIRECTORS’ REPORT
Through its partnership with Telstra, Swift won a contract with St Barbara to upgrade its digital entertainment and connectivity
services at its 329-man camp in Leonora, WA. Swift and Telstra worked together to install network infrastructure to deliver
wireless internet to each room and upgrade the existing internet link to a fibre-based solution, and following this, commenced
provision of ongoing telecommunication services for an initial period of 36 months. Swift is also directly providing its
entertainment and crew welfare system, including pay TV, wireless internet, free-to-air TV and 24x7 support, across the contract
term.
Post-year end, Swift announced contract wins with NT Link, Iluka Resources Ltd (ASX: ILU), Tronox Management Pty Ltd,
AngloGold Ashanti (ASX: AGG) and Ausco, representing both new and returning clients in the resources sector.
In its first contract with Iluka, and second with Tronox, Swift is completing onsite infrastructure works and deploying its market
leading communications and digital entertainment solution to a total of 416 rooms across two camps at Cataby, WA.
Swift won a 12-month contract extension to provide services to 662 rooms at AngloGold Ashanti’s Tropicana facility in WA. The
contract was expanded to include 160 additional rooms.
Ausco engaged Swift to refit a 200-room fly camp adjacent to the 500-room Amrun Village camp at Weipa, Queensland where
Swift is already under contract.
Aged Care and Lifestyle Villages
Swift continues to make significant inroads into the high growth aged care market, with Swift clients currently representing 18%
of the total residential Aged Care rooms in Australia. With this number set to grow in the coming years as Australia’s population
continues to age, Swift has a growing pipeline of opportunities to deploy its services. These new client wins have already seen
Swift’s revenue from the Aged Care sector grow by 62% year on year.
In October 2017, Swift announced a three-year contract to provide its services to not-for-profit aged care and retirement living
provider Baptcare. Swift deployed its services at The Orchards, Baptcare’s facility in Doncaster, Victoria, and is the planned
provider for Baptcare’s three greenfield sites set for development during the contract. Swift is also Baptcare’s preferred supplier
of digital entertainment and connectivity services as it standardises its offering across its 13 sites that comprise 1,800 rooms.
Swift further extended its reach in the retirement lifestyle sector, signing a contract with IRT (Illawarra Retirement Trust), one of
Australia’s largest community-owned seniors’ lifestyle and care providers. Swift is deploying its digital entertainment services to
IRT’s new lifestyle community facilities over three years, initially to a facility with 75 apartments. It also became the preferred
supplier of services to existing IRT Lifestyle Communities, which total more than 30 sites. IRT has more than 8,000 clients in
lifestyle communities, care centres and receiving in-home care through NSW, Queensland and the ACT.
Through its partnership with Telstra, Swift won a three-year contract with residential aged care provider Craigcare. Swift and
Telstra jointly installed the Swift system at three Craigcare sites totalling 315 rooms, with the intent to deploy the solution to all
other Craigcare sites over the next 24 months. Craigcare residents benefit from Swift’s My Family and My Community
applications as well as a range of bespoke aged care content, movies and pay TV.
Hospitality
Swift services are now deployed into over 18,000 hotel rooms in Australia and abroad through its reseller partners with its
services installed at tier one hotel groups such as the Hilton (Sydney), Westin (Perth) and across several of the QT hotels in the
Rydges group.
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SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
DIRECTORS’ REPORT
REVIEW OF OPERATIONS AND FINANCIAL REVIEW (Continued)
Government & Defence
Under its agreement with AST, Swift won a contract to provide its content and communication system to support 3,000 defence
personnel located in multiple international locations. The contract has an initial term of two years with the option to extend for
a further two years.
Maritime
Under an existing reseller agreement with Tripleplay, Swift won a material contract to provide Swift’s premium content services
to approximately 1,000 rooms across 10 oil rigs in the Gulf of Mexico and the Persian Gulf via a leading global satellite
communication provider. The contract has an initial period of five years with potential for significant expansion.
Content
During FY 2018 Swift continued to expand its library of high quality, tailored content securing a content agreement with Future
TV Co. Ltd, owned by CCTV.com, which was launched by China Central Television - a national media institution owned by the
Government of the People’s Republic of China. Swift is the first company to obtain the rights to provide Chinese entertainment
content from Future TV to the Australian market. Future TV has a library of more than 2.6 million hours of high-quality content,
including news, sport, documentaries, kids’ entertainment, education, variety shows and exclusive series, and from 1 April 2018,
Swift commenced curating this content for its clients in the hospitality and student accommodation sectors. This enabled Swift
to execute on its strategy to address the needs of Chinese residents and travellers abroad.
Share Registry
Responsibility for the maintenance of the SW1 share register transferred to Link Market Services effective from 18 June 2018.
Financial overview
The consolidated net loss after tax for the Group is $7,728,812 (2017: loss of $1,364,198).
In 2018 the Group achieved an operating revenue of $22,279,804 (2017: $17,005,143) which represents growth of
31% year on year. Swift’s annualised contracted (recurring) revenue increased 44% year-on-year to $15.7 million. The
Group successfully implemented a reseller and partnership strategy in FY18 which delivered 43% of Swift’s new sales
during the year, with this expected to accelerate further in FY19.
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SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
REVIEW OF OPERATIONS AND FINANCIAL REVIEW (Continued)
DIRECTORS’ REPORT
In 2018 the Group continued to deliver strong earnings growth delivering underlying non IFRS Earnings Before
Interest, Tax, Depreciation Amortisation (“EBITDA”) of $2,694,814. A reconciliation of non IFRS EBITDA is provided
below:
Net loss after tax
Income tax expense
Interest costs (net)
A$
(7,728,812)
Description
Refer to the Consolidated Statement of Profit
or loss and Other Comprehensive Income
169,253 Refer to Note 5
81,382 Refer to Notes 3 & 4
Depreciation & amortisation expenses
1,066,744
Incurred in the ordinary course of business
Amortisation expenses
1,514,426 Attributable to the amortisation of intangibles
Fair valuation loss on financial liability
recognised as part of the acquisitions made
5,683,333 Non-cash year end adjustment to the fair value
of financial liabilities in respect of various
performance shares (refer to Note 14)
Share based payments
1,715,492 Share based payments issued to the executive
management team (refer to Note 18)
Other expenses
192,996 Acquisition
related
restructuring costs (refer to Note 4)
integration
and
Underlying EBITDA*
2,694,814
*EBITDA is non IFRS financial information
The Company’s cash balance at 30 June 2018 was $3,201,819 with the Company recorded cash receipts of $20,803,518, a 29%
increase year on year. Cash receipts have now grown every quarter since listing on the ASX in June 2016.
The record cash generation allowed the Company to fully repaid ahead of schedule its Commercial Advance Facility held with
Bankwest from existing cash reserves. Swift had taken out this facility in July 2017 to part-fund its acquisition of Video on
Demand. Having repaid this, Swift is debt free and well-funded to support immediate growth plans.
In addition, Bankwest increased an existing multi-option working capital facility from $865,000 to $3,000,000. This undrawn
facility will allow Swift to accelerate growth as opportunities arise.
OUTLOOK
The Company will continue to draw upon its leading technology and strategic relationships it has created with content suppliers
and resellers to deploy its fully integrated digital entertainment solutions service across multiple sectors and geographies
operating in an ever-growing number of closed loop environments.
Additionally, the Company has recently signalled its intention to utilise intelligent analytics technologies to create new revenue
streams in advertising. The Company currently has pilots underway and hopes to achieve first revenues before the end of the
2018 calendar year.
Based on the Directors’ growth expectations it has been assumed that certain performance milestones attached to
performance shares issued to the former owners of Swift Networks Pty Ltd may vest within twelve months of the date of this
report. The associated financial liabilities, which are 100% equity settled, have been disclosed in the Company’s Consolidated
Statement of Financial Position as a Current Liability.
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SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
REVIEW OF OPERATIONS AND FINANCIAL REVIEW (Continued)
DIRECTORS’ REPORT
SIGNIFICANT CHANGE IN STATE OF AFFAIRS
There has been no significant change in the state of affairs of the company during the financial year.
EVENTS SINCE THE END OF THE FINANCIAL YEAR
There have been no significant events since the end of the financial year.
DIVIDENDS PAID OR RECOMMENDED
No dividends were paid or recommended during the year (2017: nil).
9
SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
DIRECTORS’ REPORT
INFORMATION ON THE DIRECTORS
Carl Clump – Non-Executive Chairman
Carl Clump has experience of being the CEO of a public listed company on the London Stock Exchange, an AIM listed company, a
private equity backed company and two start-ups, as well as being Group Managing Director for a VC backed entity. He holds a
number of Non-Executive and advisory roles. Until July 2014, he was the Chairman of the cards and payment division of a European
Private Bank.
He is a special advisor to Jacanda Capital, a boutique advisory company headquartered in Sydney. He has been working with an
Asia-Pacific organization on the launch of a specialist payment product, and working with other companies in Singapore, Malaysia,
and UK. In 2000, Carl founded Retail Decisions, an international card issuing and fraud prevention company, with many of the
world’s leading brands as customers. Its customers include Banks, Payment Service Providers, Retailers and Airlines. He was the
Chief Executive from 2000 until 2011. The Company was listed on the London Stock Exchange until 2006, when Carl took the
company private. He retired as the company’s Group Chairman in March 2013.
Prior to Retail Decisions, Carl was the Chief Executive of Card Clear plc., an AIM listed company involved in payments, card issuing,
loyalty, currency exchange and fraud prevention. From 1993 to 1998, he served as the Group Managing Director of the Harpur
Group, an issuer of specialist payment cards. Based in France, he was the President- Directeur General of TEPAR a consortium of
European card issuing companies from 1989 to 1993. He spent some 13 years with Texaco, where he served as European Marketing
Coordinator, Manager of the UK’s Marketing and Planning Division, as well as a series of roles in Retail Management, Logistics and
Finance and Economics.
Carl has an MBA from the Cranfield School of Management, a post-graduate diploma in Management Studies and a University of
London Degree in Physics.
Directorships held in other listed companies in the past 3 years: None
Special responsibilities include member of the Remuneration committee.
Xavier Kris – Executive Director and Chief Executive Officer
Xavier Kris is an accomplished and innovative, international C-level executive with early experience as a Chief Executive and a
proven track record in building global businesses and delivering results. With over 22 years’ experience as a Director of service
based information technology businesses in the UK, France, USA, South East Asia and Australia, Xavier specialises in providing
acquisition, integration and business development services for companies seeking to expand their operations internationally.
Xavier has led multiple international businesses within transactional processing companies, the Harpur Group and International
Card Services followed by Motorcharge Australia. In 2001, he joined the data and information technology firm, Retail Decisions
Ltd, a company listed on the London Stock Exchange as part of the small executive management team as Head of Global Business
Development based in London and subsequently Chief Executive Officer of the Americas based in Palo Alto, California.
In addition to being a director of PLUS 8, a hospitality labour hire and management consulting group, Xavier is a founding partner
of Boardroom Capital, a boutique corporate advisory firm based in Perth, Western Australia. Xavier holds an English Law and French
Degree and a Master of Business Administration.
Directorships held in other listed companies in the past 3 years: None
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SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
INFORMATION ON THE DIRECTORS (continued)
DIRECTORS’ REPORT
Paul Doropoulos – Non-Executive Director (resigned as Chief Financial Officer on 30 June 2017)
Paul Doropoulos has approximately 22 years’ combined experience in an Executive Consultant capacity to ASX listed companies in
the oil and gas and mining services sectors. Further has an understanding of business fundamentals through multiple start-ups in
the hospitality industry. Instrumental in overseeing the successful ASX listing of junior gold explorer Metaliko Resources Ltd in 2010
and Kinetiko Energy Limited in 2011. In addition, he also held simultaneously the position of Chief Financial Officer in both
companies. Paul is a founding participant to the establishment of the philanthropic Jackman Furness Foundation for the Performing
Arts in Western Australia. Established and oversees financial aspects of Cirrena Pty Ltd a software solutions business with offices
in Perth and Manila in the role of Chief Financial Officer. Paul also advises to the Board of Ageus Limited an enterprise developer.
Paul was appointed in 2014 as an Executive Advisor to Boardroom Capital, a boutique corporate advisory firm based in Perth,
Western Australia. Paul holds a Bachelor of Business Degree with Finance.
During the year ended 30 June 2017 Paul Doropoulos gave the Company notice of resignation as Chief Financial Officer effective
30 June 2017. He will remain a Non-Executive Director of the Company.
Directorships held in other listed companies in the past 3 years: None
Special responsibilities include member of the Remuneration committee.
Ryan Sofoulis – Executive Director
Ryan has spent the last 13 years working within the various companies owned by the Sofoulis family. Ryan worked in the accounts
department with the ASTIB Group until it was sold in 2011, at which time he became the Company Secretary of Swift Networks. In
2012, Ryan became the Company Secretary of the newly created EITS Global Group and oversaw the establishment of an
international structure spanning over the US, UK, Ireland and Australia.
Directorships held in other listed companies in the past 3 years: None
Robert Sofoulis – Non-Executive Director
Robert is the founder of Swift Networks and Wizzie TV. Robert has an engineering background in instrumentation and worked in
the mining and oil and gas industries for 20 years before becoming an entrepreneur in 1995.
Initially concentrating in the two-way radio rental business, Robert soon expanded the business to include sales and engineering
services and created ASTIB Group, consisting of various radio and communications subsidiaries. Most of the ASTIB Group was
divested in January 2011 for approximately $50 million to CSE Global, a multinational organisation of the Singapore Exchange.
Directorships held in other listed companies in the past 3 years: None
Special responsibilities include member of the Remuneration committee.
Stephen Hewitt-Dutton – Company Secretary
Mr Hewitt-Dutton has over 24 years of experience in corporate finance, accounting and company secretarial matters. He is an
Associate Director of Trident Capital and holds a Bachelor of Business from Curtin University, and is an affiliate of the Institute of
Chartered Accountants and a Senior Associate of FinSIA.
Before joining Trident Capital, Mr Hewitt-Dutton was an Associate Director of Carmichael Corporate where he assisted clients by
providing equity market, IPO and M&A advice and assistance. He has also held Financial Controller and Company Secretary
positions for both public and private companies for in excess of 17 years.
11
SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
DIRECTORS’ INTERESTS
DIRECTORS’ REPORT
The interests of each Director in the shares and options of the Group as notified by the Directors to the ASX in accordance with
s205G(1) of the Corporations Act 2001 as at the 30 June 2018 were as follows:
Director
Mr C Clump
Mr X Kris*
Mr P Doropoulos*
Mr Ryan Sofoulis
Ordinary shares
1,803,689
4,805,300
2,568,670
54,000
Mr Robert Sofoulis**
30,185,000
Options
260,000
820,000
715,000
-
-
Performance Shares
-
2,047,006
468,522
-
33,333,334
*includes all performance rights and options issued under Swift’s Executive Incentive Plan (refer to Note 18)
**includes performance shares pertaining to share sale agreement of Swift Networks Pty Ltd and Wizzie Pty Ltd (refer to Note
14)
DIRECTORS’ MEETINGS
The number of meetings (including meetings of Board committees) of the Company’s Board of Directors held during the year
ended 30 June 2018 and the number of meetings attended by each Director was:
Director
Mr C Clump
Mr X Kris
Mr P Doropoulos
Mr Ryan Sofoulis
Mr Robert Sofoulis
Board
Remuneration Committee
Number eligible to
attend
Number Attended
Number eligible
to attend
Number Attended
14
12
14
14
14
14
12
14
13
14
3
-
3
-
3
3
-
3
-
3
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
Additional comments on expected results of operations of the Group are included in this report under the review of operations
and significant changes in the state of affairs.
12
SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
DIRECTORS’ REPORT
REMUNERATION REPORT - AUDITED
Introduction
This Remuneration Report (“The Report”) has been prepared in accordance with section 300A of the Corporations Act and
associated regulations. The Remuneration Report has been audited by the Group’s Auditor.
The Report provides details of the remuneration arrangements for the following Key Management Personnel of the Group and
the Company for the 2018 financial year:
Executive Chairman, Non-Executive Directors and Key Personnel
Name
Mr C Clump
Mr X Kris
Mr P Doropoulos
Mr Robert Sofoulis
Mr Ryan Sofoulis
Mr G Nicholls
Position
Non-Executive Chairman
Executive Director – Chief Executive Officer
Non-Executive Director
Non-Executive Director
Executive Director
Chief Financial Officer
Key Management Personnel are those Directors and executives with authority and responsibility for planning, controlling and
directing the affairs of Swift Networks Group Limited.
Remuneration Policy
Compensation levels for key management personnel and secretaries of the Company and key management personnel of the Group
are competitively set to attract and retain appropriately qualified and experienced Directors and executives.
The compensation structures explained below are designed to attract suitably qualified candidates, reward the achievement of
strategic objectives, and achieve the broader outcome of creation of value for shareholders. The compensation structures take
into account:
the capability and experience of the key management personnel
the key management personnel’s ability to control the relevant segment’s performance
There is direct relationship between key management personnel remuneration and performance. The Board engaged an
independent remuneration consultant (Godfrey Remuneration Group) to advise on a compensation packages that will include a
mix of fixed and variable compensation, and short- and long-term performance-based incentives.
Fixed compensation
Fixed compensation consists of base compensation (which is calculated on a total cost basis), as well as employer contributions
to superannuation funds.
Compensation levels are reviewed annually by the Board through a process that considers individual, segment and overall
performance of the Group.
Remuneration governance
The Board has Remuneration and Nomination Committee consisting of independent Chairman Carl Clump and non-executive
Directors Robert Sofoulis and Paul Doropoulos.
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SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
REMUNERATION REPORT – AUDITED (CONTINUED)
Statutory Performance Indicators
DIRECTORS’ REPORT
Below table shows measures of the group’s financial performance over the last 5 years as required by the Corporations Act 2001.
Loss after income tax
Basic earnings (cents per share)
Increase/ (decrease) share price (%)
Dividend payments
2018
(7,728,812)
(6.9)
24
-
2017
(1,364,198)
(1.6)
34
-
2016
(5,249,924)
(22.3)
-
-
2015
2014
-
-
-
-
-
-
-
-
Key Management Personnel Remuneration
The key management personnel of the Company are the Directors and the Chief Financial Officer. There are no other executives,
other than Directors, who have the authority and responsibility for planning, directing and controlling the activities of the
Company.
The emoluments for each director and key management personnel of the Company for the year ended 30 June 2018 are as follows:
Short Term
Employee Benefits
Post-Employment
Salary & Fees1
(Cash)
Share
Based
Payments2
(Cash settled)
Share
Based
Payments2
$
$
$
Non-Cash3
Super-
annuation
Total
%
Performance
Related
Mr C Clump
Mr X Kris4
Mr P
Doropoulos5
Mr Ryan
Sofoulis
Mr Robert
Sofoulis6
Mr G Nicholls7
Total
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
49,000
48,000
436,000
351,886
37,000
164,262
136,000
120,308
137,500
150,917
180,625
70,833
976,125
906,206
-
-
829,138
-
192,073
-
$
$
4,103
3,660
4,103
3,660
4,103
3,660
-
-
3,420
3,420
3,515
3,420
$
53,103
51,660
1,272,661
358,966
256,791
171,342
-
-
4,103
3,660
12,920
11,429
153,023
135,397
-
-
-
-
20,100
-
-
-
-
-
-
-
20,100
-
-
-
73,473
-
1,094,684
-
4,103
3,660
-
-
20,515
18,300
36,000
35,218
17,159
6,729
73,014
60,216
177,603
189,795
271,257
77,562
2,184,438
984,722
1 Salary & Fees are inclusive of annual leave provision (no long service leave provisions during the year).
2 Refer to the below table and Note 18 for further details.
3 Non-Cash benefits include the provision of Directors and Officers liability insurance.
4 Share based payments for Mr Xavier Kris include $647,522 for FY 2017 and $181,616 for FY 2018
5 Mr Doropoulos resigned as Chief Financial Officer on 30 June 2017, share based payments relate to FY 2017.
6 Fees paid to Mr Robert Sofoulis is in relation to a related party service contract that ceased in June 2018.
7 Mr Nicholls commenced employment on 16 January 2017 and became a KMP from 1 July 2017.
-
-
65%
-
82%
-
-
-
-
-
27%
-
-
-
14
SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
REMUNERATION REPORT – AUDITED (CONTINUED)
Details of Share Based Payments
DIRECTORS’ REPORT
Remuneration Type
Grant Date
Mr G Nicholls
Performance Shares (STIPs) 14 December 2017
Mr X Kris
Mr P
Doropoulos
Performance Rights (A)
Performance Rights (B)
Share Appreciation Rights
Deferred Options
Performance Shares (STIPs)
Performance Rights (A)
Performance Rights (B)
Share Appreciation Rights
Cash Settled
5 September 2017
5 September 2017
5 September 2017
5 September 2017
14 December 2017
5 September 2017
5 September 2017
5 September 2017
N/A
Number
Granted
205,232
452,841
452,841
452,841
181,176
507,307
156,174
156,174
156,174
-
Grant Value
($)
73,473
168,046
184,483
204,405
90,588
181,616
57,955
63,624
70,494
20,100
2017 EXECUTIVE INCENTIVE PLAN
The issue of Deferred Options, Performance Rights and Share Appreciation Rights under an Executive Incentive Plan (EIP) to Swift
directors Mr Kris and Mr Doropoulos and other selected senior executives was approved by shareholders at the Group’s Annual
General Meeting (AGM) held on 27 October 2017.
As part of the 2017 EIP, Mr Doropoulos elected a short-term incentive cash settlement option of $20,100.
Deferred Options
Entitle holders to receive one share for each option exercised. No consideration is payable on the exercise of the options. Under
the EIP, Deferred Options form part of the bonus pool which may be paid in cash, deferred options or a combination of both, as
determined at the discretion of the Board. Deferred Options vest immediately.
Performance rights
Are rights to receive shares in the event that certain Vesting Conditions are met, and the Performance Rights are exercised.
The company’s performance period is 3 years from 1 July 2016 to 30 June 2019. The vesting date is 1 July 2019 subject to the
satisfaction of the following vesting conditions:
Class A Performance Rights
Class B Performance Rights
If the Company achieves compound annual growth in Baseline
EBITDA of 268%, then 50% of the PR’s will vest. Management
have attributed a 100% probability of rights vesting.
If the Company’s relative Total Shareholder Return (TSR)
ranking is between P50th of the Small Industrials Index (XSI),
0% of the PR’s will vest
If the Company achieves compound annual growth in Baseline
EBITDA above 268% but less than 532%, then between 50% and
100% of the PR’s will vest. Management have attributed a
100% probability of rights vesting.
If the Company achieves compound annual growth in Baseline
EBITDA above 532%, then 100% of the PR’s will vest.
Management have attributed a 0% probability of rights vesting.
If the Company’s relative Total Shareholder Return (TSR)
ranking is P50th of the XSI, 50% of the PR’s will vest
If the Company’s relative Total Shareholder Return (TSR)
ranking is between P50th and P75th of the XSI, between 50%
and 100% of the PR’s will vest
If the Company’s relative Total Shareholder Return (TSR)
ranking is above P75th of the XSI, 100% of the PR’s will vest
15
SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
REMUNERATION REPORT – AUDITED (CONTINUED)
Share Appreciation Rights (SAR)
DIRECTORS’ REPORT
Are rights to receive the value equal to the increase in the value of the Share above the applicable grant price in the event that
certain vesting conditions are met and the Share Appreciation Rights are exercised.
The company’s performance period is 3 years from 1 July 2016 to 30 June 2019. The vesting date is 1 July 2019 subject to the
satisfaction of the following vesting conditions:
Share Appreciation Rights
If cumulative growth in the grant price is less than 106%, no SARs will vest
If cumulative growth in the grant price is 106%, 50% of the SARs will vest
If cumulative growth in the grant price is above 106% but less than 170%, then between 50% and 100% of SARs will
vest on a pro rata basis
If cumulative growth in the grant price is 170% or above, 100% of the SARs will vest
Valuation
The fair value of these share-based instruments was calculated as follows:
Class A Performance
Rights
Deferred Options
Class B
Performance
Rights
Share Appreciation
Rights
Method
Spot price
Strike price
Time to maturity
Volatility
Risk free rate
Probability of vesting
Fair value per unit (cents)
Black Scholes
50 cents
0 cents
5 years
75.00%
2.28%
N/a
50.0000
*This is the weighted average of probability
Monte Carlo
50 cents
0 cents
3 years
75.00%
1.87%
75.00%*
37.1093
Hybrid ESO
50 cents
0 cents
5 years
75.00%
1.87%
N/a
40.7390
Hybrid ESO
50 cents
0 cents
5 years
75.00%
1.87%
N/a
45.1383
The Company engaged an independent expert to provide the valuations, which are summarised below:
Recipient
Deferred options
Class A Performance
Rights
Class B Performance
Rights
Share Appreciation
Rights
Total
Number $ Total
Number
fair
value
Number
$ Total
fair
value
$ Total
fair
value
Number
$ Total
fair
value
$ Total
fair
value
Xavier Kris
181,176
90,588
452,841
168,046
452,841
184,483
452,841
204,405
647,522
Paul
Doropoulos*
-
-
156,174
57,955
156,174
63,624
156,174
70,494
192,073
Total
181,176
90,588
609,015
226,001
609,015
248,107
609,015
274,899
839,595
*Paul Doropoulos resigned as Chief Financial Officer on 30 June 2017 but remains a Non-Executive Director of the Company.
16
SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
REMUNERATION REPORT – AUDITED (CONTINUED)
2018 EXECUTIVE INCENTIVE PLAN
DIRECTORS’ REPORT
In December 2017 The Company approved the 2018 Executive Incentive Plan and issued Participation Offer for its Short-Term
Incentive Plan (STIP). Long Term Incentive Plans (LTIPs) will be subject to board and shareholder approval at the time of the 2018
AGM. As per the rules of the STIP, awards may be paid in cash or Rights, or a combination of both, as determined at the
discretion of the Board. For each participant the Company will select Key Performance Indicators (KPI’s) by applying the
following steps:
-
-
-
Identifying broad assessment areas that a relevant to the participants
Identifying Key Results Areas (KRA) (for example, EBITDA, strategic objectives, individual contribution)
Selecting KPIs for each KRA
Performance goals are then set at three levels below:
-
-
-
Threshold is achievement of Budgeted non IFRS EBITDA
Target is 20% outperformance of non IFRS Budgeted EBITDA
Stretch is 150% outperformance of Budgeted non IFRS EBITDA
Valuation
At 30 June 2018 the value of individual awards based on the Company’s STIP have been calculated by an independent expert
assessment as at reporting date and are summarised below:
Recipient
Mr X Kris
Mr G Nicholls*
Total
Threshold
Award
($)
Exceeded
Exceeded
Target
Award
($)
Exceeded
Exceeded
Stretch Award
($)
No of
Rights
Exceeded
Exceeded
507,307
205,232
715,539
Total
Awarded
($)
181,616
73,473
255,089
Total
Opportunity
($)
200,000
80,910
280,910
Awarded
(%)
91
91
-
*Mr Nicholls was appointed as Chief Financial Officer on 1 July 2017 at which time he became a Key Management Personnel.
The actual value of these awards has been determined by reference to the volume weighted price at which the Company’s
shares were traded on the ASX over the 10 trading days up to and including 30 June 2018.
Current service agreements
The current service agreements in place between the Company and its Directors and Key Management Personnel set out below:
(i)
The Company has entered into letter agreements for Director Fees as follows:
Carl Clump
Xavier Kris
$60,000 per annum plus statutory superannuation
$36,000 per annum plus statutory superannuation
Paul Doropoulos
$48,000 per annum plus statutory superannuation
Ryan Sofoulis
$36,000 per annum plus statutory superannuation
Robert Sofoulis
$48,000 per annum plus statutory superannuation
The letter agreements were last amended in June 2018.
(ii)
The Company has entered into an employment agreement with Ryan Sofoulis, whereby the base remuneration, exclusive
of superannuation entitlements, for services provided by Mr Sofoulis as the Head of Finance of the Company is $100,000
per annum. The term of the employment agreement commenced on 19 May 2016 until such time as the agreement is
terminated in accordance with the terms of the agreement. The Company or Mr Sofoulis may terminate the employment
agreement at any time by giving to the other not less than 9 months’ written notice.
17
SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
REMUNERATION REPORT – AUDITED (CONTINUED)
DIRECTORS’ REPORT
(iii)
(iv)
In August 2017 the Company amended its existing service agreement (originally signed on 19 May 2016) with Xavier Kris,
for the provision of corporate consultancy services as Chief Executive Officer. The Company has agreed to pay a base
remuneration of $33,333 per month ($400,000 per annum).
The Company or Mr Kris may terminate the amended agreement with 3 months’ written notice by either party at any time.
The Company has entered into an employment agreement with George Nicholls, whereby the base remuneration, exclusive
of superannuation entitlements, for services provided by Mr Nicholls as the Chief Financial Officer of the Company is
$185,000 per annum. The term of the employment agreement commenced on 16 January 2017 until such time as the
agreement is terminated in accordance with the terms of the agreement. The Company or Mr Nicholls may terminate the
employment agreement at any time by giving to the other not less than 3 months’ written notice.
Shareholdings of key management personnel
The movement during the reporting period in the number of ordinary shares of Swift Networks Group Limited held directly,
indirectly or beneficially, by each specified Director and key management personnel, including their related entities, is as follows:
Ordinary
Shares Held
at 30 June
2017
No.
1,259,879
3,580,833
2,456,437
39,000
30,120,000
-
Directors
Mr C Clump
Mr X Kris
Mr P Doropoulos
Mr Ryan Sofoulis
Mr Robert Sofoulis
Mr G Nicholls
Received during
the year on the
exercise of options
Other changes
during the
year
Ordinary Shares
Held at
30 June 2018
No.
480,000
1,160,000
80,000
-
-
-
63,810
64,467
32,233
15,000
65,000
-
1,803,689
4,805,300
2,568,670
54,000
30,185,000
-
Rights to deferred shares of key management personnel
The movement during the reporting period in the number of deferred shares of Swift Networks Group Limited held directly,
indirectly or beneficially, by each specified Director and key management personnel, including their related entities, is as follows:
Held at 30 June
2017
No.
Performance Rights
granted during the
year
Held at
30 June 2018
No.
-
-
-
-
-
-
-
1,412,989
312,348
-
-
205,232
-
1,412,989
312,348
-
-
205,232
Directors
Mr C Clump
Mr X Kris
Mr P Doropoulos
Mr Ryan Sofoulis
Mr Robert Sofoulis
Mr G Nicholls
18
SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
REMUNERATION REPORT – AUDITED (CONTINUED)
DIRECTORS’ REPORT
Held at 30 June
2017
No.
Share Appreciation
Rights granted during
the year
Held at
30 June 2018
No.
Directors
Mr C Clump
Mr X Kris
Mr P Doropoulos
Mr Ryan Sofoulis
Mr Robert Sofoulis
Mr G Nicholls
Directors
Mr C Clump
Mr X Kris
Mr P Doropoulos
Mr Ryan Sofoulis
Mr Robert Sofoulis
Mr G Nicholls
-
-
-
-
-
-
-
452,841
156,174
-
-
-
-
452,841
156,174
-
-
-
Held at 30 June
2017
No.
Deferred Options
granted during the
year
Held at
30 June 2018
No.
-
-
-
-
-
-
-
181,176
-
-
-
-
-
181,176
-
-
-
-
Option holdings of key management personnel
The movement during the reporting period in the number of issued options of Swift Networks Group Limited held directly,
indirectly or beneficially, by each specified Director and key management personnel, including their related entities, is as follows:
Held at
30 June 2017
No.
Exercised
during the
year
Granted as
compensation
Held at
30 June 2018
No.
Options vested
& exercisable at
year end
Directors
Mr C Clump
Mr X Kris
Mr P Doropoulos
Mr Ryan Sofoulis
Mr Robert Sofoulis
Mr G Nicholls
740,000
1,980,000
795,000
-
-
-
480,000
1,160,000
80,000
-
-
-
Loans with key management personnel
Loans
-
-
-
-
-
-
260,000
820,000
715,000
-
-
-
260,000
820,000
715,000
-
-
-
During the year, the Company advanced the following funds to the Directors and their related parties:
Funds owed by Xavier Kris1
Closing balance
2018
$
275,000
275,000
2017
$
-
-
1The unsecured loan was drawn on 30 April 2018 and repayable by no later than 30 April 2019. It is subject to an arm’s length
interest rate, payable within 5 business days of the last day of the month. $4,663 interest paid during the year. Prior to the date
of this report the loan was repaid in full.
19
SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
REMUNERATION REPORT – AUDITED (CONTINUED)
Other transactions with key management personnel
DIRECTORS’ REPORT
Transactions with key management personnel related parties are on normal commercial terms and conditions no more favourable
than those available to other parties unless otherwise stated.
2018
$
2017
$
433,538
473,360
(i) Payments made to Wenro Holdings Pty Ltd, a company of which
Robert Sofoulis is a Director and Ryan Sofoulis is associated with,
for provision of office premises, pursuant to operating lease.
(ii) Payments received from Wenro Holdings Pty Ltd, a company of
which Robert Sofoulis is a director and Ryan Sofoulis is
associated with, as an incentive for the renewal of an operating
lease
(iii) Payments received from Wenro Holdings Pty Ltd, a company of
which Robert Sofoulis is a director and Ryan Sofoulis is
associated with, for Project Management Services provided by
the Company in relation to renovation of office premises
Amounts outstanding at reporting date
Aggregate amount payable to Key Management Personnel and
their related entities at reporting date.
Payables
Receivables
439,523
71,500
57,543
275,000
2018
$
2017
$
Transactions with other related parties
Entities managed by Key Management personnel
Share based payments to KMP and other non KMP - non-cash
Share based payments to KMP and other non KMP - cash
settled
Total share-based payments
1,695,392
20,100
1,715,492
No other transactions or loans existed during the year and as at reporting date between the Company and with key management
personnel.
Use of remuneration consultants
Godfrey Remuneration Group (GRG) were engaged by the Remuneration Committee during the financial year to provide
independent advice to the Committee on incentive plan consideration, which the Board will consider adopting ahead of the next
Annual General Meeting. GRG were paid a total of $27,000 for these services by the Company for the 2018 financial year.
Voting and comments made at the Company’s 2017 Annual General Meeting
The approval of the remuneration report was passed as indicated in the results of the Annual General Meeting dated 27 October
2017. The Company did not receive specific feedback at the AGM or throughout the year on its remuneration practices.
This is the end of the Audited Remuneration Report.
20
188,205
-
-
-
-
SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
DIRECTORS’ REPORT
SHARES UNDER ISSUE
Unissued ordinary shares of Swift Networks Group Limited under option at the date of this report are:
Grant date
19 May 2016 PY
31 May 2017 PY
31 May 2017 PY
Expiry date
Exercise Price
Number
19 May 2021
31 May 2021
31 May 2021
$0.15
$0.35
$0.42
6,833,333
1,000,000
1,000,000
8,833,333
9,250,000 options exercised during the financial year (refer to Note 15).
INDEMNIFICATION AND INSURANCE OF DIRECTORS
During the financial year, Swift Networks Group Limited paid a premium of $20,515 to insure the Directors and Officers of the
Company and its wholly owned subsidiaries.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against
the officers in their capacity as officers of any entity in the Group, and any other payments arising from liabilities incurred by the
officers in connection with such proceedings, other than where such liabilities arise out of conduct involving a wilful breach of the
duty by the officers or the improper use by the officers of their position or of information to gain an advantage for themselves or
someone else to cause detriment to the Company. It is not possible to apportion the premium between amounts relating to the
insurance against legal costs and those relating to other liabilities.
NON-AUDIT SERVICES
BDO Audit (WA) Pty Ltd is the Group’s auditor. During the year, BDO Tax services were performed for other services in addition to
their statutory duties. In the future the Group may decide to employ the auditor on assignments additional to their statutory audit
duties where the auditor’s expertise and experience with the Company is important.
Details of the amount paid to the auditors are disclosed in Note 22 to the financial statements.
AUDITORS’ INDEPENDENCE DECLARATION
A copy of the Auditors’ Independence Declaration as required under Section 307C of the Corporations Act 2001 is set out on page
23.
21
SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
DIRECTORS’ REPORT
ENVIORNMENTAL REGULATIONS
The Directors have considered compliance with the National Greenhouse and Energy Reporting Act 2007 which requires entities
to report greenhouse gas emissions and energy use. For the measurement period 1 July 2017 to 30 June 2018 the directors have
assessed that there are no current reporting requirements, but the Group may be required to do so in the future.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which
the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
Dated at Perth this 31st day of August 2018
This report is made in accordance with a resolution of the Directors:
Carl Clump
Chairman
22
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY DEAN JUST TO THE DIRECTORS OF SWIFT NETWORKS GROUP
LIMITED
As lead auditor of Swift Networks Group Limited for the year ended 30 June 2018, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Swift Networks Group Limited and the entities it controlled during the
period.
Dean Just
Director
BDO Audit (WA) Pty Ltd
Perth, 31 August 2018
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN
77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK
company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under
Professional Standards Legislation, other than for the acts or omissions of financial services licensees.
SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR
ENDED 30 JUNE 2018
Continuing Operations
Revenue
Cost of Sales
Gross Profit
General & administration expenses
Other Income
Depreciation and amortisation expenses
Other expenses
Finance costs
Loss before income tax expense
Income tax (expense)/benefit
Loss after income tax expense
Other comprehensive loss for the year
Items that may be reclassified to profit or loss
Other comprehensive loss for the year
Note
Consolidated
2018
$
2017
$
3
22,279,804
17,005,143
(13,017,786)
(11,610,317)
9,262,018
5,394,826
4
3
(6,567,204)
(4,388,981)
31,474
12,521
(2,581,170)
(1,121,925)
4
(7,591,821)
(2,256,483)
(112,856)
(5,913)
(7,559,559)
(2,365,955)
5
(169,253)
1,001,757
(7,728,812)
(1,364,198)
-
-
-
-
Total comprehensive loss for the year
(7,728,812)
(1,364,198)
Loss per share attributable to the members of Swift Networks
Group Limited:
Basic loss per share
Diluted loss per share
28
28
(6.9)
(6.9)
(1.6)
(1.6)
Cents
Cents
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in
conjunction with the accompanying notes.
24
SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2018
Note
Consolidated
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventory
Other current assets
Total Current Assets
Non Current Assets
Trade and other receivables
Property, plant and equipment
Deferred tax assets
Intangible assets
Total Non Current Assets
Total Assets
Current Liabilities
Trade and other payables
Unearned revenue
Provisions
Financial liabilities
Deferred tax liabilities
Total Current Liabilities
Non Current Liabilities
Provisions
Financial liabilities
Unearned Revenue
Total Non Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
2018
$
3,201,819
3,447,658
1,062,177
605,529
2017
$
2,237,906
2,189,478
666,631
191,012
8,317,183
5,285,027
1,079,985
1,886,519
826,217
13,167,992
16,960,713
-
1,086,747
1,406,658
6,702,105
9,195,509
25,277,896
14,480,537
5,923,342
3,448,098
254,930
72,643
9,350,000
318,225
222,399
-
-
64,890
15,919,140
3,735,387
290,593
-
937,500
270,400
1,498,493
17,417,633
4,604,167
-
4,604,167
8,339,554
7,860,263
6,140,983
38,437,650
30,768,966
2,470,044
774,652
(33,047,431)
(25,402,635)
7,860,263
6,140,983
6
7
8
7
9
5
10
11
12
14
5
12
14
15
16
17
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
25
SWIFT NETWORKS GROUP LIMITED AND CONTROLLED ENTITIES
ABN 54 006 222 395
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT 30 JUNE 2018
Issued Capital
Reserves
Accumulated
losses
$
$
$
Total
$
30,768,966
774,652
(25,402,635)
6,140,983
(7,728,812)
(7,728,812)
5,724,000
2,307,500
(362,816)
1,695,392
84,016
-
84,016
38,437,650
2,470,044
(33,047,431)
7,860,263
28,727,663
650,652
(24,038,437)
5,339,878
(1,364,198)
(1,364,198)
-
-
-
-
1,695,392
-
5,724,000
2,307,500
(362,816)
-
-
-
2,175,000
-
-
-
124,000
(133,697)
-
-
-
-
-
-
-
-
For the year ended 30
June 2018
At the beginning of the
year
Total comprehensive loss
for the year
Transactions with
shareholders in their
capacity as shareholders:
- Placement of shares
- Options exercised
- Share issue costs (net of
tax)
Share based payments
Prior year tax effect
adjustment
At the end of the year
For the year ended 30
June 2017
At the beginning of the
year
Total comprehensive loss
for the year
Transactions with
shareholders in their
capacity as shareholders:
- Placement of shares
- Options granted
- Share issue costs
At the end of the year
30,768,966
774,652
(25,402,635)
The above Consolidated Statement of Changes in Equity should be read in conjunction with the
accompanying notes.
2,175,000
124,000
(133,697)
6,140,983
26
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2018
Cash Flows from Operating Activities
Cash receipts in the course of operations
Cash payments in the course of operations
Finance costs
Interest received
Note
Consolidated
2018
$
2017
$
20,803,518
16,179,792
(18,079,477)
(16,316,481)
(112,856)
31,474
(5,913)
12,521
Net cash inflows/ (outflows) from operating activities
19
2,642,659
(130,081)
Cash Flows from Investing Activities
Purchase of property, plant and equipment
Payment for acquisition of business, net of cash acquired
29
Payment for development and new subscribers
Net cash outflows for investing activities
Cash Flows from Financing Activities
Proceeds from issue of shares
Payment of share issue costs
Proceeds from borrowings
Repayments of borrowings
Net cash inflows from financing activities
(1,265,779)
(5,557,257)
(272,009)
(399,130)
(1,300,394)
(1,064,866)
(8,123,430)
(1,736,005)
6,807,500
2,000,000
(362,816)
(195,052)
3,000,000
-
(3,000,000)
(909,309)
6,444,684
895,640
Net increase/(decrease) in cash and cash equivalents
Cash at the beginning of the year
Cash at the end of the year
963,913
(970,446)
2,237,906
3,208,352
6
3,201,819
2,237,906
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying
notes.
27
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
1.
Reporting entity
Swift Networks Group Limited (the ‘Company’) is a Company domiciled in Australia and a for-profit entity for
the purpose of preparing financial statements. The consolidated financial statements and notes represent
those of the Swift Networks Group Limited and controlled entities (the “consolidated Group” or “Group”).
The separate financial statements of the parent entity, Swift Networks Group Limited, have not been presented
within this financial report as permitted by the Corporations Act 2001
2.
Statement of Significant accounting policies
Basis of Preparation
The financial statements are general purpose financial statements that have been prepared in accordance with
Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements
of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in
financial statements containing relevant and reliable information about transactions, events and conditions.
Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply
with International Financial Reporting Standards as issued by the IASB. Material accounting policies adopted
in the preparation of these financial statements are presented below and have been consistently applied unless
otherwise stated.
The financial statements have been prepared on an accruals basis and are based on historical costs, modified,
where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial
liabilities.
Going Concern
As at 30 June 2018, the Group had a working capital deficiency of $7,601,957 with cash and cash equivalents
of $3,201,819 and a net loss of $7,728,812 with cash inflows from operating activities for the year of
$2,642,659.
The Group’s net current liability position at year end is due to financial liabilities of $9.35M relating to issue of
performance shares as partial deferred consideration for the acquisition of the respective business which is
expected to be converted to equity pursuant to the respective acquisition agreement.
Therefore, the Directors are satisfied the Group is a going concern and therefore have prepared the financial
statements on the basis the Group will continue to meet its commitments and can therefore continue normal
business activities and realise its assets and settle liabilities in the normal course of the business.
The consolidated financial statements were approved by the Board of Directors on the 31st of August 2018.
(a) Principles of Consolidation
The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by
Swift Networks Group Limited at the end of the reporting period. A controlled entity is any entity over which
Swift Networks Group Limited has the ability and right to govern the financial and operating policies so as to
obtain benefits from the entity’s activities. Control will generally exist when the parent owns, directly or
indirectly through subsidiaries, more than half of the voting power of an entity. In assessing the power to
govern, the existence and effect of holdings of actual and potential voting rights are also considered.
Where controlled entities have entered or left the Group during the year, the financial performance of those
entities are included only for the period of the year that they were controlled. A list of controlled entities is
contained in Note 27 to the financial statements.
28
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2.
Statement of Significant accounting policies (continued)
(a) Principles of Consolidation (continued)
In preparing the consolidated financial statements, all inter-Group balances and transactions between entities
in the consolidated Group have been eliminated in full on consolidation. Accounting policies of subsidiaries
have been changed where necessary to ensure consistency with those adopted by the parent entity.
Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent,
are reported separately within the Equity section of the Consolidated Statement of Financial Position and
Statement of Profit or Loss and Other Comprehensive Income. The non-controlling interests in the net assets
comprise their interests at the date of the original business combination and their share of changes in equity
since that date.
Subsidiaries
Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly
or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its
activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken
into account. The financial statements of subsidiaries are included in the consolidated financial statements
from the date that control commences until the date that control ceases.
Investments in subsidiaries are carried at amortised cost in the Company’s financial statements.
Transactions eliminated on consolidation
Intra-Group balances, and any unrealised gains and losses or income and expenses arising from intra-Group
transactions are eliminated in preparing the consolidated financial statements.
(b) Income Tax
The income tax expense / (benefit) for the year comprises current income tax expense (income) and deferred
tax expense / (benefit).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using
applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current
tax liabilities / (assets) are therefore measured at the amounts expected to be paid to / (recovered from) the
relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances
during the year as well unused tax losses.
Current and deferred income tax expense / (benefit) is charged or credited directly to equity instead of the
profit or loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result
where amounts have been fully expensed but future tax deductions are available. No deferred income tax will
be recognised from the initial recognition of an asset or liability, excluding a business combination, where there
is no effect on accounting or taxable profit or loss.
29
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2.
Statement of Significant accounting policies (continued)
(b) Income Tax (continued)
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of
the reporting period. Their measurement also reflects the manner in which management expects to recover
or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent
that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset
can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint
ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the
temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable
future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended
that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur.
Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax
assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable
entity or different taxable entities where it is intended that net settlement or simultaneous realisation and
settlement of the respective asset and liability will occur in future periods in which significant amounts of
deferred tax assets or liabilities are expected to be recovered or settled.
(c) Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but
not the legal ownership that is transferred to entities in the consolidated Group, are classified as finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair
value of the leased property or the present value of the minimum lease payments, including any guaranteed
residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest
expense for the period.
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the
lease term.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are
charged as expenses in the periods in which they are incurred.
Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over
the life of the lease term.
30
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2.
Statement of Significant accounting policies (continued)
(d) Financial Instruments
Recognition and Initial measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual
provisions to the instrument. For financial assets, this is equivalent to the date that the Company commits
itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is
classified ‘at fair value through profit or loss’, in which case transaction costs are expensed to profit or loss
immediately.
Classification and subsequent measurement
Finance instruments are subsequently measured at either of fair value, amortised cost using the effective
interest rate method, or cost. Fair value represents the amount for which an asset could be exchanged or a
liability settled, between knowledgeable, willing parties. Where available, quoted prices in an active market
are used to determine fair value. In other circumstances, valuation techniques are adopted.
Amortised cost is calculated as:
(a) the amount at which the financial asset or financial liability is measured at initial recognition;
(b) less principal repayments;
(c) plus or minus the cumulative amortisation of the difference, if any, between the amount initially
recognised and the maturity amount calculated using the effective interest method; and
(d) less any reduction for impairment.
The effective interest method is used to allocate interest income or interest expense over the relevant period
and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees,
transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably
predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or
financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying
value with a consequential recognition of an income or expense in profit or loss.
The Group does not designate any interests in subsidiaries, associates or joint venture entities as being subject
to the requirements of accounting standards specifically applicable to financial instruments.
i. Financial assets at fair value through profit or loss
Financial assets are classified at ‘fair value through profit or loss’ when they are either held for trading for the
purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as
such to avoid an accounting mismatch or to enable performance evaluation where a Group of financial assets
is managed by key management personnel on a fair value basis in accordance with a documented risk
management or investment strategy. Such assets are subsequently measured at fair value with changes in
carrying value being included in profit or loss.
31
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2.
Statement of Significant accounting policies (continued)
(d) Financial Instruments (continued)
Classification and subsequent measurement (continued)
ii. Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market and are subsequently measured at amortised cost.
Loans and receivables are included in current assets, except for those which are not expected to mature within
12 months after the end of the reporting period. (All other loans and receivables are classified as non-current
assets.)
iii. Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be classified
into other categories of financial assets due to their nature, or they are designated as such by management.
They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or
determinable payments.
Available-for-sale financial assets are included in non-current assets, except for those which are expected to
mature within 12 months after the end of the reporting period. (All other financial assets are classified as
current assets.)
Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are
applied to determine the fair value for all unlisted securities, including recent arm’s length transactions,
reference to similar instruments and option pricing models.
Impairment
At the end of each reporting period, the Group assesses whether there is objective evidence that a financial
instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in
the value of the instrument is considered to determine whether impairment has arisen. Impairment losses are
recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income. Also, any
cumulative decline in fair value previously recognised in other comprehensive income is classified to profit or
loss at this point.
De-recognition
Financial assets are de-recognised where the contractual rights to receipt of cash flows expires or the asset is
transferred to another party whereby the entity no longer has any significant continuing involvement in the
risks and benefits associated with the asset. Financial liabilities are de-recognised where the related obligations
are discharged, cancelled or expired. The difference between the carrying value of the financial liability
extinguished or transferred to another party and the fair value of consideration paid, including the transfer of
non-cash assets or liabilities assumed, is recognised in profit or loss.
32
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2.
Statement of Significant accounting policies (continued)
(e) Impairment of Assets
At each the end of each reporting period, the Group assesses whether there is any indication that an asset may
be impaired. The assessment will include the consideration of external and internal sources of information
including dividends received from subsidiaries, associates or jointly controlled entities deemed to be out of
pre-acquisition profits. If such an indication exists, an impairment test is carried out on the asset by comparing
the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use,
to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed
to the Consolidated Statement of Profit or Loss and Other Comprehensive Income unless the asset is carried at
a relevant amount in accordance with another standard (e.g. in accordance with the revaluation model in AASB
116). Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that other
standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
(f) Functional and presentation currency
These consolidated financial statements are presented in Australian dollars, which is the Company’s functional
currency and the functional currency of the majority of the Group.
(g) Employee Benefits
Wages, salaries and annual leave
Liabilities for wages and salaries and annual leave are recognised and are measured as the amount unpaid at
the reporting date at current pay rates in respect of employees’ services up to that date.
Superannuation
Contributions to employee superannuation plans are charged as an expense as the contributions are paid or
become payable.
(h) Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for
which it is probable that an outflow of economic benefits will result, and that outflow can be reliably measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of
the reporting period.
(i) Cash and Cash Equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on
demand and form an integral part of the Group’s cash management are included as a component of cash and
cash equivalents for the purpose of the statement of cash flows. Cash held on reserve to meet collateral
requirements, lease bonds and for regulatory purposes are not included in cash and cash equivalents, but
classified as cash deposits not available for use by the Group.
33
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2.
Statement of Significant accounting policies (continued)
(j) Trade and Other Receivables
Trade receivables, which generally have 30-60 day terms, are recognised and carried at original invoice amount
less an allowance for any uncollectible amounts.
An allowance for doubtful debts is made when there is objective evidence that the Company will not be able
to collect the debts. Bad debts are written off when identified.
(k) Revenue Recognition
Revenues are recognised at fair value of the consideration received net of the amount of goods and services
tax (GST) payable to the taxation authority. Exchanges of goods or services of the same nature and value
without any cash consideration are not recognised as revenues. Revenue is recognised on an accruals basis in
accordance with the timing in which services are rendered.
The gross proceeds of non-current asset sales are recognised as revenue at the date control of the asset passes
to the buyer, usually when an unconditional contract of sale is signed.
The gain or loss on disposal is calculated as the difference between the carrying amount of the asset at the
time of disposal and the net proceeds on disposal (including incidental costs).
Interest revenue is recognised using the effective interest rate method.
Management fees are recognised once all conditions have been satisfied to recognise the services provided.
Where uncertainty exists as to the recoverability of the management fees that have been earned an
impairment of the amount due will be taken to Consolidated Statement of Profit or Loss and Other
Comprehensive Income.
(l) Inventories
Inventories are measured at the lower of coast and net realisable value. The cost of manufactured products
includes direct materials, direct labour and an appropriate portion of variable and fixed overheads. Overheads
are applied on the basis of normal operating capacity. Costs are assigned on the basis of weighted average
costs.
(m) Property, Plant & Equipment
Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any
accumulated depreciation. The carrying amount of plant and equipment is reviewed annually by directors to
ensure it is not in excess of the recoverable amount from these assets.
Depreciation
The depreciable amount of all fixed assets is depreciated on a diminishing value basis over their useful lives to
the Group commencing from the time the asset is held ready for use. The depreciation rates used for each class
of depreciable assets are:
Motor Vehicles
Software
Office Equipment, Fit Out & Furniture
Test Equipment & Tools
Rental Equipment – DES
25%
25% - 66.66%
10% - 100%
10% - 66.66%
20% - 100%
34
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2. Statement of Significant accounting policies (continued)
(n) Business combinations
The acquisition method of accounting is used to account for all business combinations, regardless of whether
equity instruments or other assets are acquired. The consideration transferred for the acquisition of a
subsidiary comprises the
fair values of the assets transferred
liabilities incurred to the former owners of the acquired business
equity interests issued by the group
fair value of any asset or liability resulting from a contingent consideration arrangement, and
fair value of any pre-existing equity interest in the subsidiary
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are,
with limited exceptions, measured initially at their fair values at the acquisition date. The group recognises
any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or
at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
The excess of the
consideration transferred,
amount of any non-controlling interest in the acquired entity, and
acquisition-date fair value of any previous equity interest in the acquired entity
over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than
the fair value of the net identifiable assets of the subsidiary acquired, the difference is recognised directly in
profit or loss as a bargain purchase.
(o) Intangibles
Goodwill
Goodwill represents the excess of the purchase consideration over the fair value of the identifiable net assets
at the time of acquisition of a combination. When the excess is negative (bargain purchase), it is recognised
immediately in profit or loss.
Goodwill is not amortised. Instead, Goodwill is tested for impairment at each reporting date or more
frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less
accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of
Goodwill relating to the entity sold.
Goodwill is allocated to each of the cash-generating units for the purpose of impairment testing. Impairment
is determined by assessing the recoverable amount of the cash- generating unit to which the goodwill relates
(refer note 10). Impairment losses on goodwill cannot be reversed.
Identifiable intangible assets
Intangible assets acquired separately or in a business combination are initially measured at the lower of cost
or fair value cost at the time of acquisition when it is probable that the future economic benefits arising as a
result of the costs incurred will flow to the Group. The Group assesses identifiable intangible assets as having
either finite or indefinite useful lives.
35
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2.
Statement of Significant accounting policies (continued)
(o) Intangibles (continued)
Intangible assets with finite lives are amortised over the useful life and assessed for impairment at least twice
a year or whenever there is an indication that the intangible asset may be impaired. The amortisation period
and amortisation method are reviewed at least each financial year end. Changes in the expected useful life or
flow of economic benefits intrinsic in the asset are an accounting estimate. The amortisation charge on
intangible assets with finite lives is recognised in the statement of profit or loss and other comprehensive
income.
Customer contracts
Customer contracts acquired as part of a business combination are recognised separately from goodwill. The
customer contracts are carried at their fair value at the date of acquisition less accumulated amortisation and
any impairment losses. Where customer contracts useful lives are assessed as finite, the customer contracts
are amortised over their estimated useful lives of 1 to 2 years
Subscriber acquisition costs
Subscriber acquisition costs in relation to customer contracts are recognised as an asset when it is probable
that the future economic benefits arising as a result of the costs incurred will flow to the Group. Other
subscriber acquisition costs that do not meet these criteria are recognised as an expense as incurred.
Amortisation is calculated using the straight-line method to allocate the cost of intangible over its estimated
useful life (contract life) commencing when the intangible is available for use. The carrying value of an
intangible asset arising from subscriber acquisition costs is tested for impairment when an indication of
impairment arises during the period.
Note: historically all expenses relating to activities undertaken to acquire new subscribers have been
expensed as incurred, however no adjustment has been made to prior year comparatives as at the time of
the acquisition organisational structure in place prior to the date of acquisition whereby fixed resources were
allocated to the business as a whole, therefore the costs incurred to win new subscribers could not be easily
separately identified nor measured reliably and accordingly no adjustment has been made in the prior year
comparatives to recognise an Intangible for deferred subscriber acquisition costs
Research and development costs
Research costs are expensed as incurred. Costs incurred on development projects are recognised as
intangible assets when it is probable that the project will, after considering its commercial and technical
feasibility, be completed and generate future economic benefits and its costs can be reliably measured.
Expenditure capitalised comprises all directly attributable costs including costs of materials, services and
direct labour. Other development expenditure that do not meet these criteria are recognised as an expense
as incurred. Amortisation is calculated using the straight-line method to allocate the cost of intangible over its
estimated useful life (1-5 years) commencing when the intangible is available for use. The carrying value of an
intangible asset arising from development expenditure is tested for impairment when an indication of
impairment arises during the period.
36
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2. Statement of Significant accounting policies (continued)
(p) Trade and Other Payables
Trade and other payables represent the liability outstanding at the end of the reporting period for goods and
services received by the Group during the reporting period which remains unpaid. The balance is recognised
as a current liability with the amount being normally paid within 30 days of recognition of the liability.
(q) Borrowing Costs
Borrowing costs are recognised in the profit or loss in the period in which they are incurred.
(r) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Tax Office. In these circumstances, the GST is recognised as part of the
cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement
of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of
investing and financing activities, which are disclosed as operating cash flows.
(s) 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 the profit or loss over the period of the borrowings using the effective
interest method. Fees paid on the establishment of loan facilities, which are not incremental costs relating to
the actual draw-down of the facility, are recognised as prepayments and amortised on a straight-line basis over
the term of the facility.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement
of the liability for at least 12 months after the reporting date.
(t) Fair value of assets and liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis,
depending on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an
orderly (i.e. unforced) transaction between independent, knowledgeable and willing market participants at
the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used
to determine fair value. Adjustments to market values may be made having regard to the characteristics of
the specific asset or liability. The fair values of assets and liabilities that are not traded in an active market are
determined using one or more valuation techniques. These valuation techniques maximise, to the extent
possible, the use of observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or
liability (i.e. the market with the greatest volume and level of activity for the asset or liability) or, in the
absence of such a market, the most advantageous market available to the entity at the end of the reporting
period (i.e. the market that maximises the receipts from the sale of the asset or minimises the payments
made to transfer the liability, after taking into account transaction costs and transport costs).
37
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2.
Statement of Significant accounting policies (continued)
(t) Fair value of assets and liabilities (continued)
For non-financial assets, the fair value measurement also takes into account a market participant's ability to
use the asset in its highest and best use or to sell it to another market participant that would use the asset in
its highest and best use.
The fair value of liabilities and the entity's own equity instruments (excluding those related to share- based
payment arrangements) may be valued, where there is no observable market price in relation to the transfer
of such financial instruments, by reference to observable market information where such instruments are
held as assets. Where this information is not available. other valuation techniques are adopted and, where
significant, are detailed in the respective note to the financial statements.
(u) Contributed Equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
(v) Earnings Per Share
Basic earnings per share is calculated as a net profit attributable to members, adjusted to exclude any costs of
servicing equity (other than dividends) and preference share dividends, divided by the weighted average
number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members, adjusted for:
costs of servicing equity (other than dividends) and preference share dividends;
the after-tax effect of dividends and interest associated with dilutive potential ordinary shares that
have been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the
dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and
dilutive potential ordinary shares, adjusted for any bonus element.
(w) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
When the Group applies an accounting policy retrospectively, makes a retrospective restatement or reclassifies
items in its financial statements, a statement of financial position as at the beginning of the earliest
comparative period will be disclosed.
(x) Critical Accounting Estimates and Judgments
The Directors evaluate estimates and judgments incorporated into the financial statements based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future events
and are based on current trends and economic data, obtained both externally and within the Group.
38
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2.
Statement of Significant accounting policies (continued)
Key Estimates
Share based payment transactions
Employees and Directors
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of
the equity instruments at the date at which they are granted. The fair value is determined by an internal
valuation using Black-Scholes option pricing model, Monte Carlo performance rights model and Hybrid ESO,
taking into account the terms and conditions upon which the instruments were granted.
External Consultants
The Group measures the cost of equity-settled transactions with external consultants through the issuance of
Options which could not be valued due to the fact that they represented consideration for past and future
services provided by the broker to the Company. The fair value is determined by an internal valuation using the
up and in share price barrier model taking into account the terms and conditions upon which the instruments
were granted.
Significant Judgement
Deferred tax assets
Deferred tax assets and liabilities have been brought to account in 2018 after considering the level of tax losses
carried forward and available to the Company against future taxable profits and the probability within the
future that taxable profits will be available against which the benefits of the deductible temporary difference
can be claimed. The Company believes that it is probable that sufficient future taxable profits will be available
against which unused tax losses can be utilised.
Goodwill – impairment testing
Goodwill is tested for impairment annually. The Board has determined the most appropriate method for
determining the recoverable amount of the goodwill by assessing the carrying value through a value in use
model. Refer Note 10 for details of the assumptions used in these calculations.
Sensitivity to possible changes in key assumptions
Management have made judgements and estimates in respect of impairment testing of goodwill which
management deem to be best estimates. Should the judgements and estimates not occur, the resulting
goodwill may vary in carrying amount. The key assumptions are as follows (refer note 10 for further detail):
- Growth rate
- Discount rate
-
-
Terminal value long term growth rate
Capital spend
No impairment has been recognised in respect of goodwill at the end of the reporting period.
Contingent consideration
The Directors have assessed the likelihood of reaching various performance share milestones at reporting date
(refer to Note 14) based on internal budgeting and information regarding contracts related to rooms and
revenues.
39
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2.
Statement of Significant accounting policies (continued)
Business combinations
As discussed in note (n), business combinations are initially accounted for on a provisional basis. The fair value
of assets acquired, liabilities and contingent liabilities assumed are initially estimated by the consolidated entity
taking into consideration all available information at the reporting date. Fair value adjustments on the
finalisation of the business combination accounting is retrospective, where applicable, to the period the
combination occurred and may have an impact on the assets and liabilities, depreciation and amortisation
reported.
(y) Segment Information
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the Chief Executive Officer.
(z) Government Grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the
grant will be received and the Group satisfies all attached conditions.
When the grant relates to an expense item, it is recognised as income over the periods necessary to match the
grant on a systematic basis to the costs that it is intended to compensate.
When the grant relates to an asset, the fair value is credited against the asset and is released to the Statement
of Profit or Loss and Other Comprehensive Income over the expected useful life of the relevant asset by equal
annual instalments.
Where a grant is received in relation to the tax benefit of research and development costs, the grant shall be
credited to income tax expense in the Statement of Profit or Loss and Other Comprehensive Income in the year
of receipt.
(aa) New, revised or amending Accounting Standards and Interpretations not yet adopted
The Group 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.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not
been early adopted.
Any significant impact on the accounting policies of the Company from the adoption of these Accounting
Standards and Interpretations are disclosed below. The adoption of these Accounting Standards and
Interpretations did not have any significant impact on the financial performance or position of the Company.
The following Accounting Standards and Interpretations are most relevant to the Company (not yet adopted).
AASB 9 Financial Instruments – Recognition and Measurement (Effective 1 January 2018)
40
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2.
Statement of Significant accounting policies (continued)
(aa) New, revised or amending Accounting Standards and Interpretations not yet adopted (continued)
AASB 9 introduces new requirements for the classification and measurement of financial assets and liabilities.
Financial assets that are debt instruments will be classified based on (i) the objective of the entity’s
business model for managing the financial assets; and (ii) the characteristics of the contractual cash
flows.
Allows an irrevocable election on initial recognition to present gains and losses on investments in
equity instruments that are not held for trading in other comprehensive income (instead of in profit
or loss). Dividends in respect of these investments that are a return on investment can be recognised
in profit or loss and there is no impairment or recycling on disposal of the instrument.
Financial assets can be designated and measured at fair value through profit or loss at initial
recognition if doing so eliminates or significantly reduces a measurement or recognition inconsistency
that would arise from measuring assets or liabilities, or recognising the gains and losses on them, on
different bases.
Where the fair value option is used for financial liabilities the change in fair value is to be accounted
for as follows:
- The change attributable to changes in credit risk are presented in other comprehensive income
(OCI);
- The remaining change is presented in profit or loss.
Otherwise, the following requirements have generally been carried forward unchanged from AASB 139 into
AASB 9:
- Classification and measurement of financial liabilities; and
- De-recognition requirements for financial assets and liabilities.
AASB 9 requirements regarding hedge accounting represent a substantial overhaul of hedge accounting that
will enable entities to better reflect their risk management activities in the financial statements.
Consequential amendments arising from AASB 9 are contained in AASB 2010-7 Amendments to Australian
Accounting Standards arising from AASB 9 (December 2010), AASB 2010-10 Further Amendments to Australian
Accounting Standards – Removal of Fixed Dates for First-time Adopters, AASB 2012-6 Amendments to
Australian Accounting Standards – Mandatory Effective Date of AASB 9 and Transition Disclosures, AASB 2013-
9 Amendments to Australian Accounting Standards – Conceptual Framework, Materiality and Financial
Instruments and AASB 2014-1 Amendments to Australian Accounting Standards.
From 1 July 2018, the Group will assess expected credit losses associated on a forward looking basis.
For trade receivables, the Group will apply the simplified approach permitted by AASB 9, which requires
expected lifetime losses to be recognised from initial recognition of the receivables.
The introduction of AASB 9 is not expected to have a significant impact on the operations of the Group when
implemented.
41
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2.
Statement of Significant accounting policies (continued)
(aa) New, revised or amending Accounting Standards and Interpretations not yet adopted (continued)
AASB 15 Revenue from Contracts with Customers (Effective 1 January 2018)
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard
provides a single standard for revenue recognition. The core principle of the standard is that an entity will
recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects
the consideration to which the entity expects to be entitled in exchange for those goods or services. The
standard will require: contracts (either written, verbal or implied) to be identified, together with the separate
performance obligations within the contract; determine the transaction price, adjusted for the time value of
money excluding credit risk; allocation of the transaction price to the separate performance obligations on a
basis of relative stand-alone selling price of each distinct good or service, or estimation approach if no distinct
observable prices exist; and recognition of revenue when each performance obligation is satisfied. Credit risk
will be presented separately as an expense rather than adjusted to revenue. For goods, the performance
obligation would be satisfied when the customer obtains control of the goods. For services, the performance
obligation is satisfied when the service has been provided, typically for promises to transfer services to
customers. For performance obligations satisfied over time, an entity would select an appropriate measure of
progress to determine how much revenue should be recognised as the performance obligation is satisfied.
Contracts with customers will be presented in an entity's statement of financial position as a contract liability,
a contract asset, or a receivable, depending on the relationship between the entity's performance and the
customer's payment. Sufficient quantitative and qualitative disclosure is required to enable users to
understand the contracts with customers; the significant judgments made in applying the guidance to those
contracts; and any assets recognised from the costs to obtain or fulfil a contract with a customer. The impact
of this adoption is currently in the process of being assessed by the Group, however the impact has yet to be
quantified. The Group will adopt this standard from 1 July 2018.
AASB 16 Leases (Effective 1 January 2019)
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard
replaces AASB 117 'Leases' and for lessees will eliminate the classifications of operating leases and finance
leases. Subject to exceptions, a 'right-of-use' asset will be capitalised in the statement of financial position,
measured as the present value of the unavoidable future lease payments to be made over the lease term. The
exceptions relate to short-term leases of 12 months or less and leases of low-value assets (such as personal
computers and small office furniture) where an accounting policy choice exists whereby either a 'right-of-use'
asset is recognised or lease payments are expensed to profit or loss as incurred. A liability corresponding to the
capitalised lease will also be recognised, adjusted for lease prepayments, lease incentives received, initial direct
costs incurred and an estimate of any future restoration, removal or dismantling costs. Straight-line operating
lease expense recognition will be replaced with a depreciation charge for the leased asset (included in
operating costs) and an interest expense on the recognised lease liability (included in finance costs). In the
earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when
compared to lease expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation
and Amortisation) results will be improved as the operating expense is replaced by interest expense and
depreciation in profit or loss under AASB 16. For classification within the statement of cash flows, the lease
payments will be separated into both a principal (financing activities) and interest (either operating or financing
activities) component. For lessor accounting, the standard does not substantially change how a lessor accounts
for leases. The impact of this adoption is currently in the process of being assessed by the Group, however the impact has
yet to be quantified. The Group will adopt this standard from 1 July 2018.
42
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 3. Revenue
(a) Revenue from continuing operations
Sales revenue
(b) Other income
Interest
Note 4. Expenses
(a) General & administration expenses
Employment costs
Occupancy costs
Professional fees
General and administration expenses
(b) Other expenses
Impairment of available for sale assets
Share based payments
Fair value loss on financial liability (refer Note 14)
Other expenses
Consolidated
2018
$
2017
$
22,279,804
17,005,143
22,279,804
17,005,143
31,474
31,474
12,521
12,521
Consolidated
2018
$
2017
$
(4,162,101)
(2,364,945)
(606,620)
(334,603)
(583,293)
(424,695)
(1,463,880)
(1,016,048)
(6,567,204)
(4,388,981)
-
(83,350)
(1,715,492)
(192,182)
(5,683,333)
(1,929,167)
(192,996)
(51,784)
(7,591,821)
(2,256,483)
43
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 5. Taxation
(a) Income tax benefit
Major components of income tax expense are:
Current tax
Deferred tax
Under/Over
Impact of provisional accounting
Income tax expense/ (benefit) reported in the income
statement
(b) Numerical reconciliation
The prima facie tax on loss from ordinary activities before income tax
is reconciled to the income tax as follows:
Prima facie tax payable on loss from ordinary activities before income
tax at 27.5% (2017: 30%)
- Non deductible share based payments
- Fair value loss on financial liability
- Goodwill amortisation
- Other
Changes to income tax expense due to:
- Under/over
- Impact of provisional accounting
- Research and Development benefit recorded against asset
- Effect of enacted tax rate reduction to 27.5% (on carried forward tax
losses only)
- Movement in unrecognised timing differences
- Impairment of available-for-sale-assets
- Change in corporate tax rate from prior year
- Unused tax losses recognised as a deferred tax asset
Income tax expense/ (benefit) attributable to entity
Consolidated
2018
$
2017
$
-
163,075
6,178
-
-
(879,860)
(250,415)
128,518
169,253
(1,001,757)
(7,559,559)
(2,365,955)
(2,078,879)
(709,786)
471,760
1,562,917
-
-
57,655
578,750
35,476
801
(44,202)
(37,105)
6,178
(250,415)
-
128,518
112,409
-
25,052
27,330
(41,998)
-
111,814
195,167
25,005
-
-
(1,090,256)
169,253
(1,001,757)
44
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 5. Taxation (continued)
(c) Deferred tax asset balances
Provisions, accruals and section 40-880 deductions
Carried forward tax losses
Other
Changes to income statement:
Share issue costs
(d) Deferred tax liabilities balances
Intangibles
Consolidated
2018
$
2017
$
221,466
167,215
447,908
1,090,256
-
2,927
156,843
146,260
826,217
1,406,658
318,225
318,225
64,890
64,890
(e) Amounts recognised directly in equity
Aggregate current and deferred tax arising in the reporting period and not recognised in net profit or
loss or other comprehensive income but directly debited or credited to equity.
Current tax
Net deferred tax
Note 6. Cash and cash equivalent
Cash at bank on hand
84,016
84,016
57,299
57,299
Consolidated
2018
$
2017
$
3,201,819
2,237,906
3,201,819
2,237,906
45
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 7. Trade and other receivables
Current
Trade receivables
Other receivables
Non Current
Trade receivables
Consolidated
2018
$
2017
$
3,401,497
1,975,087
46,161
214,391
3,447,658
2,189,478
1,079,985
1,079,985
-
-
Trade and other receivables are non-interest bearing and are generally on 30-60 day terms. An allowance
for doubtful debts is made when there is objective evidence that a trade receivable is impaired. None of
the above receivables are past due or impaired. Refer to Note 21 Financial Risk Management for risk
exposure analysis for Trade and other receivables.
Note 8. Inventory
Inventory
- Finished goods
- Work in progress
Consolidated
2018
$
2017
$
345,701
716,476
1,062,177
220,901
445,730
666,631
46
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 9. Property, Plant & Equipment
Motor
Software Office fit out
Test
Rental
Vehicles
& Equipment
Equipment
Equipment
Total
$
$
$
$
$
$
Year ended 30 June 2018
Opening net book amount
45,621
11,444
Additions
Acquired upon acquisition of
subsidiaries
Disposals
Depreciation expense & impairment
charges
-
-
-
3,059
2,699
-
495,801
276,480
122,220
-
31,657
502,224
1,086,747
7,496
978,744
1,265,779
-
-
-
-
124,919
-
(11,405)
(11,562)
(127,364)
(16,383)
(424,210)
(590,924)
Closing net book amount
34,216
5,640
767,137
22,770
1,056,757
1,886,519
At 30 June 2018
Cost
Accumulated depreciation and
impairment
91,143
148,713
1,446,198
178,061
4,198,025
6,062,140
(56,927)
(143,073)
(679,061)
(155,293)
(3,141,267)
(4,175,621)
Net book amount
34,216
5,640
767,137
22,769
1,056,758
1,886,519
Year ended 30 June 2017
Opening net book amount
60,828
36,849
545,910
50,071
692,146
1,385,804
Additions
Acquired upon acquisition of
subsidiaries
Disposals
Depreciation expense & impairment
charges
-
-
-
1,600
29,954
-
-
-
-
-
-
-
240,455
272,009
-
-
-
-
(15,207)
(27,005)
(80,063)
(18,414)
(430,377)
(571,066)
Closing net book amount
45,621
11,444
495,801
31,657
502,224
1,086,747
At 30 June 2017
Cost
Accumulated depreciation and
impairment
91,143
142,955
1,047,497
170,566
3,219,281
4,671,442
(45,522)
(131,511)
(551,696)
(138,909)
(2,717,057)
(3,584,695)
Net book amount
45,621
11,444
495,801
31,657
502,224
1,086,747
47
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 10. Intangible Assets
Goodwill
Development
Costs
Subscriber
Acquisition
Costs
Brand Loyalty /
Customer Contracts
Supplier
Contracts
Other
Total
Year ended 30 June 2018
Opening net book amount
Additions
Acquired upon acquisition of VOD
Adjustment upon PY acquisition of subsidiaries
Amortisation and impairment charge
Closing net book amount
Cost
5,539,187
-
4,975,354
(315,000)
-
10,199,741
10,199,741
548,470
741,834
650,000
(369,614)
1,570,690
1,982,432
228,107
520,507
-
(230,618)
517,996
819,865
216,304
-
1,271,523
450,000
-
-
123,610
170,036
38,083
-
(1,230,863)
(103,008)
(56,092)
706,965
2,370,434
20,602
123,610
151,997
212,963
6,702,105
1,300,394
7,020,687
135,000
(1,990,194)
13,167,992
15,709,046
Accumulated amortisation and impairments
-
(411,741)
(301,869)
(1,663,470)
(103,008)
(60,966)
(2,541,054)
Closing net book amount
10,199,741
1,570,690
517,996
706,965
20,602
151,997
13,167,992
Year ended 30 June 2017
Opening net book amount
Additions
Acquired upon acquisition of subsidiaries
Amortisation and impairment charge
Closing net book amount
4,036,187
-
1,503,000
-
5,539,187
-
590,598
-
(42,127)
548,470
Cost
5,539,187
590,598
Accumulated amortisation and impairments
-
(42,127)
Closing net book amount
5,539,187
548,470
-
299,358
-
(71,251)
228,107
299,358
(71,251)
228,107
648,911
-
-
(432,607)
216,304
648,911
(432,607)
216,304
-
-
-
-
-
-
-
-
-
174,910
-
(4,874)
170,036
4,685,098
1,064,866
1,503,000
(550,859)
6,702,105
174,910
7,252,964
(4,874)
(550,859)
170,036
6,702,105
48
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 10. Intangible Assets (continued)
In 31 August 2017 the Group acquired VOD Pty Ltd and Goodwill of $4,975,354 and identifiable Customer Contracts
of $1,271,523, Supplier Contracts of $123,610 and Product Development of $650,000 were recognised on
acquisition. Goodwill is recognised initially as the excess over the aggregate of the consideration transferred, the fair
value of any non-controlling interests, and the acquisition date fair value of the acquirer’s previously held equity
interests, less than fair value of the identifiable assets acquired and liabilities consumed.
Development costs consists of amounts spent developing product enhancements to the Group's "On Demand"
digital entertainment system to allow smart television and hotel property management system integration
capabilities, as well as Bring Your Own Device (“BYOD”) capabilities allowing user to access the Swift Entertainment
app via Android and IOS smart phones and tablets. These new technology advancements will allow Swift to derive
additional revenue streams from a growing number of different market verticals. Development costs are amortised
over five years.
Subscriber acquisition costs consists of amounts spent obtaining and retaining new contracts. Subscriber acquisition
costs are amortised over the life of the individual contract.
Customer Contracts consists of existing fixed term customer contracts inherited as part of acquisition. Customer
Contracts are amortised over three years from date of acquisition.
Other intangible assets include costs incurred in order to establish content agreements with suppliers, which the
company will offer to customers as part of its entertainment content offering. These costs are amortised over the
average term of the supplier content agreements.
Assessment of carrying value
The aggregate carrying amount of intangibles allocated to the Group’s separably identifiable cash-generating units
(CGU) is
Swift Networks
Web2TV
Living Networks
2018
$
2017
$
13,167,992
5,199,105
-
-
953,000
550,000
13,167,992
6,702,105
For the purpose of impairment testing, intangibles are allocated to one (2017: three) consolidated cash-generating
unit (CGU). Due to the change in business view after the successful integration of the businesses acquired, the
focus is now solely on consolidated profit rather than business unit profit, effective 30 June 2018, the four existing
segments were integrated under one consolidated reporting segment. The CGU and aggregate carrying amounts
are structured to fall in line with the Group operations and cash flows. The VOD Pty Ltd operations became part of
the Group from 31 August 2017, please refer to note 29 Business Combinations for further details.
During the year ending 30 June 2018, there is no impairment of the CGU (2017: nil). The recoverable amount of
the CGU is determined based on value-in-use calculations. Value-in-use calculations use cash flow projections
based on financial budgets covering a projected five-year period and then estimating a terminal value. The cash
flow for 2019 is based on the 2019 budget adopted by the Board. The cash flows are discounted using a pre-tax
discount rate of 13.04%.
49
$
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 10. Intangible Assets (continued)
Significant estimate: key assumptions used for value-in-use calculations
The following table sets out the key assumptions for CGU value-in-use calculations:
2018
Pre-tax discount rate
Growth rate
Terminal value long term growth rate
Capital spend1
Swift
Networks
13.04%
2.5%
0%
1%
1FY 19 spend is in line with FY 19 Budget (5% of revenue) whilst FY20 to FY23 has been estimated as 1% of revenue.
Management has determined the values assigned to each of the above key estimates as follows:
Assumption
Approach used to determine values
Growth rate
Capital spend
Growth rates have been determined with reference to external sources including
industry specific forecasts, adjusted for management’s best estimate of growth
achievable in the current economic and competitive environment.
at Expected costs to maintain assets in current condition.
Sensitivity to change in assumptions
The Directors and management have considered and assessed reasonably possible changes to key assumptions that
result in a
change to the recoverable amount for each CGU. With regard to the assessment, management
recognises that the actual time value of money may vary from the estimated and the discount rate used.
Estimated reasonably possible changes in the key assumptions would have the following approximate impact on
impairment of the CGU as at 30 June 2018:
Pre-tax discount rate
Growth rate
Terminal growth rate
Capital outlay
Reasonable
possible change
+10%/-10%
+10%/-10%
+10%/-10%
+10%/-10%
Swift Networks
Nil
Nil
Nil
Nil
Each of the sensitivities above assumes that the specific assumption moves in isolation, whilst all other
assumptions are held constant.
50
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 11. Trade Payables
Current
Trade Payables
Other payables and accruals
Note 12. Provisions
Current
Lease Incentives for 1 Watts Place Bentley (Transfer from non
current Provisions)
Non Current
Lease Incentives
Note 13. Borrowings
Unsecured – Current
Loans payable
Consolidated
2018
$
2017
$
3,751,485
2,171,857
2,533,303
914,795
5,923,342
3,448,098
Consolidated
2018
$
2017
$
72,643
72,643
290,593
290,593
Consolidated
2018
$
2017
$
-
-
-
-
-
-
-
-
In September 2017 the Group secured a loan of $3,000,000 from Bankwest to fund the purchase of VOD Pty Ltd. The
loan is secured via a general Security Interest (GSI) over Swift Networks Group Limited, Swift Networks Pty Ltd and
Wizzie Pty Ltd. In May 2018 the loan was repaid in full. The Group extended its Multi-purpose facility from $865,000
to $3,000,000. At 30 June 2018 there was no drawn debt and contingent liabilities of $313,711 (Refer Note 30).
The Group is in compliance with its bank covenants and expects to continue to meet all covenants at the next review
on 30 June 2019.
51
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 14. Financial Liability – at Fair Value
Current
Opening balance
Transfer from non current liabilities
Closing balance
Non Current
Opening balance
Amount due under contract of sale - at acquisition
Add: Fair value through the P&L
Transfer to current
Closing balance
Consolidated
2018
$
2017
$
-
9,350,000
9,350,000
-
-
-
4,604,167
1,900,000
-
775,000
5,683,333
1,929,167
(9,350,000)
-
937,500
4,604,167
The above liability relates to the potential issue of ordinary shares in Swift Network Group Limited to the vendors of
Swift Networks Pty Ltd and Wizzie Pty Ltd, Living Networks and Web 2 TV pursuant to the respective acquisition
agreement.
(a) Acquisition of Swift Networks Pty Ltd and Wizzie Pty Ltd on 19 May 2016
Under the agreement, a total of 33,333,334 shares could be issued upon the satisfaction of the following milestones:
Milestone 1 – 16,666,667 Performance Shares
The earlier to occur of:
i.
ii.
the Company reaching 44,000 rooms with a revenue generating service from Swift Networks; and
the Company reaching consolidated revenue of $24,000,000 in any rolling 12-month period commencing
after completion.
Milestone 2 – 16,666,667 Performance Shares
The earlier to occur of:
i.
ii.
the Company reaching 53,000 rooms with a revenue generating service from Swift Networks; and
the Company reaching consolidated revenue of $29,000,000 in any rolling 12-month period commencing
after completion.
Note: only new business won as a direct result of providing a Swift product or service can be counted towards these
performance milestones.
(b) Acquisition of Living Networks on 10 November 2016
Under the agreement with vendors of Living Networks up to $500,000 in cash and shares in the Group in equal
proportions in the first three years after completion upon satisfaction of the following milestones:
i.
ii.
a payment of $300,000 upon $800,000 gross revenue; and
a payment of $200,000 upon $1,100,000 gross revenue
52
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 14. Financial Liability – at Fair Value (continued)
(c) Acquisition of Web 2 TV on 16 November 2016
Under the agreement with vendors of Web 2 TV up to $1,500,000 in cash and shares in the Group in equal
proportions in the first five years after completion upon satisfaction of the following milestones:
i.
ii.
payment of $500,000 upon $2,000,000 gross revenue;
Eight (8) payments of $125,000 each upon every additional $500,000 of gross revenue up to a total of
$6,000,000
Significant Judgement
(a)
Based on internal budgeting and information regarding contracts signed relating to rooms and revenue the
Directors have assessed the likelihood of reaching these milestones to be as follows:
Entity
Swift Networks Pty Ltd /
Wizzie Pty Ltd
Living Networks
At initial
recognition
Milestone 1 – 20%
Milestone 2 – 15%
At 30 June 2017
At 30 June 2018
Milestone 1 – 50%
Milestone 2 – 30%
Milestone 1 – 90%
Milestone 2 – 75%
Fair value at 30
June 20181
$9,350,000
Milestone 1 – 50%
Milestone 2 – 50%
Milestone 1 – 50%
Milestone 2 – 50%
Milestone 1 – 50%
Milestone 2 – 50%
$250,000
Web 2 TV
Milestone 1 – 50%
Milestone 2 – 45%
Milestone 3 – 40%
Milestone 4 – 35%
Milestone 5 – 30%
Milestone 6 – 25%
Milestone 7 – 20%
Milestone 8 – 15%
Milestone 9 – 10%
1 Measured under cash consideration, share price and managements’ probability
Milestone 1 – 75%
Milestone 2 – 60%
Milestone 3 – 50%
Milestone 4 – 40%
Milestone 5 – 30%
Milestone 6 – 25%
Milestone 7 – 20%
Milestone 8 – 15%
Milestone 9 – 10%
Milestone 1 – 75%
Milestone 2 – 60%
Milestone 3 – 50%
Milestone 4 – 40%
Milestone 5 – 30%
Milestone 6 – 25%
Milestone 7 – 20%
Milestone 8 – 15%
Milestone 9 – 10%
$687,500
(b)
The financial liability is a level 3 financial instrument. The Following summarises quantitative information
about the significant unobservable inputs:
Entity
Description
Swift
Networks Pty
Ltd / Wizzie
Pty Ltd
Living
Networks
Contingent
consideration
Contingent
consideration
Web 2 TV
Contingent
consideration
Unobservable
inputs
Probability of
achieving
Milestones
disclosed above
Probability of
achieving
Milestones
disclosed above
Probability of
achieving
Milestones
disclosed above
Range of inputs
Milestone 1 – 90%
Milestone 2 – 75%
Milestone 1 – 50%
Milestone 2 – 50%
Milestone 1 – 75%
Milestone 2 – 60%
Milestone 3 – 50%
Milestone 4 – 40%
Milestone 5 – 30%
Milestone 6 – 25%
Milestone 7 – 20%
Milestone 8 – 15%
Milestone 9 – 10%
Relationship of inputs to fair
value
If the probability of achieving each
milestone was 10% higher (or
lower) the fair value would
increase (decrease) by $1,133,333
If the probability of achieving each
milestone was 10% higher (or
lower) the fair value would
increase (decrease) by $50,000
If the probability of achieving each
milestone was 10% higher (or
lower) the fair value would
increase (decrease) by $150,000
53
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 15. Issued capital
Issued capital
Movement in Ordinary Share Capital:
At the beginning of the period
Placements:
- 8 November 2016
- 12 July 2017
- 18 August 2017
Living Networks acquisition (16
November 2016)
Advisor offer (24 May 2017)
Movie Source/VOD acquisition (31
August 2017)
Options exercised during the period
Share issue costs
(a) Movie Source/VOD acquisition
Consolidated
2018
$
2017
$
38,437,650 30,768,966
30 June 2018
No.
90,212,903
30 June
2017
No.
80,825,054
30 June 2018
$
30,768,966 28,727,663
30 June
2017
$
-
8,695,653
-
2,000,000
8,818,000
9,182,000
-
2,204,500
2,295,500
-
-
-
-
407,997
284,199
3,600,000
9,250,000
-
-
-
-
-
-
100,000
75,000
1,224,000
2,307,500
-
-
(362,816)
(133,697)
121,062,903
90,212,903
38,437,650 30,768,966
Under the terms of the Swift Networks acquisition, the Group issued 3,600,000 shares as part of the
consideration paid to the vendors for the acquisition of Movie Source Pty Ltd and VOD Pty Ltd on 31 August
2017.
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, shall have one vote
and upon a poll each share shall have one vote.
54
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 15. Issued capital (continued)
Options
At 30 June 2018, there were 8,883,333 options (30 June 2017 – 18,373,333) available for exercise.
Exercise price
Expiry date
Opening balance
25 cents
15 cents
35 cents
42 cents
Total
30-Apr-18
19-May-21
31-May-21
31-May-21
9,440,000
6,933,333
1,000,000
1,000,000
Issued during the year
Expired during the year
-
(240,000)
-
-
Exercised during the year
(9,200,000)
(50,000)
-
-
-
-
-
-
Closing balance
-
6,883,333
1,000,000
1,000,000
18,373,333
-
(240,000)
(9,250,000)
8,883,333
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it
can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure
to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell to reduce debt.
The Group will look to raise capital when an opportunity to make investments is seen as value adding relative to the
current parent entity’s share price at the time of the investment.
The Group is not subject to externally imposed capital requirements.
The capital risk management policy remains unchanged from the 2017 Annual Financial Statement.
55
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 16. Reserves
Options reserves
Opening balance
Options issued (Refer Note 18)
Closing balance
Options reserve
The reserve is used to recognise the fair value of options granted.
Note 17. Accumulated losses
Accumulated losses at the beginning of the financial year
Profit / (loss) after income tax expense for the year
Tax effect adjustment relating to prior year
Accumulated losses at the end of the financial year
Note 18. Share based payments
2017 EXECUTIVE INCENTIVE PLAN
Consolidated
2018
$
2017
$
774,652
1,695,392
2,470,044
650,652
124,000
774,652
Consolidated
2018
$
2017
$
(25,402,635)
(24,038,437)
(7,728,812)
(1,364,198)
84,016
-
(33,047,431)
(25,402,635)
The issue of Deferred Options, Performance Rights and Share Appreciation Rights under an Executive Incentive Plan
(EIP) to Swift directors Xavier Kris and Paul Doropoulos and other selected senior executives was approved by
shareholders at the Group’s Annual General Meeting (AGM) held on 27 October 2017.
As part of the 2017 EIP, Paul Doropoulos elected a short term incentive cash settlement option of $20,100.
Deferred Options
Entitle holders to receive one share for each option exercised. No consideration is payable on the exercise of the
options. Under the EIP, Deferred Options form part of the bonus pool which may be paid cash, deferred options or
a combination of both, as determined at the discretion of the Board. Deferred Options vest immediately.
Performance rights
Are rights to receive shares in the event that certain Vesting Conditions are met and the Performance Rights are
exercised.
The company’s performance period is 3 years from 1 July 2016 to 30 June 2019. The vesting date is 1 July 2019
subject to the satisfaction of the following vesting conditions:
56
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 18. Share based payments (continued)
Class A Performance Rights
Class B Performance Rights
If the Company achieves compound annual growth in
Baseline EBITDA of 268%, then 50% of the PR’s will
vest. Management have attributed a 100%
probability of rights vesting.
If the Company achieves compound annual growth in
Baseline EBITDA above 268% but less than 532%,
then between 50% and 100% of the PR’s will vest.
Management have attributed a 100% probability of
rights vesting.
If the Company achieves compound annual growth in
Baseline EBITDA above 532%, then 100% of the PR’s
will vest. Management have attributed a 0%
probability of rights vesting.
If the Company’s relative Total Shareholder Return (TSR)
ranking is between P50th, 0% of the PR’s will vest
If the Company’s relative Total Shareholder Return (TSR)
ranking is P50th, 50% of the PR’s will vest
If the Company’s relative Total Shareholder Return (TSR)
ranking is between P50th and P75th, between 50% and 100%
of the PR’s will vest
If the Company’s relative Total Shareholder Return (TSR)
ranking is above P75th, 100% of the PR’s will vest
Share Appreciation Rights (SAR)
Are rights to receive the value equal to the increase in the value of the Share above the applicable grant price in the
event that certain vesting conditions are met and the Share Appreciation Rights are exercised.
The company’s performance period is 3 years from 1 July 2016 to 30 June 2019. The vesting date is 1 July 2019 subject
to the satisfaction of the following vesting conditions:
Share Appreciation Rights
If cumulative growth in the grant price is less than 106%, no SARs will vest
If cumulative growth in the grant price is 106%, 50% of the SARs will vest
If cumulative growth in the grant price is above 106% but less than 170%, then between 50% and 100% of SARs will
vest on a straight-line basis
If cumulative growth in the grant price is 170% or above, 100% of the SARs will vest
57
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 18. Share based payments (continued)
The fair value of these share-based instruments was calculated as follows:
Deferred Options
Class A Performance
Rights
Date
Method
Spot price
Strike price
Time to maturity
Volatility
Risk free rate
Probability of vesting
Fair value per unit (cents)
5th Sept 2017
Black Scholes
50 cents
0 cents
5 years
75.00%
2.28%
N/a
50.0000
*This is the weighted average of probability
5th Sept 2017
Monte Carlo
50 cents
0 cents
3 years
75.00%
1.87%
75.00%*
37.1093
Class B
Performance
Rights
5th Sept 2017
Hybrid ESO
50 cents
0 cents
5 years
75.00%
1.87%
N/a
40.7390
Share Appreciation
Rights
5th Sept 2017
Hybrid ESO
50 cents
0 cents
5 years
75.00%
1.87%
N/a
45.1383
The Company engaged an independent expert to provide the valuations, which are summarised below:
Class A Performance
Rights
Class B Performance
Rights
Share Appreciation
Rights
Deferred options
Recipient
Total
Number
$ Total
fair
value
Number
Number
$ Total
fair
value
Number
$ Total
fair
value
$ Total
fair
value
$ Total fair
value
Xavier Kris
181,176
90,588
452,841
168,046
452,841
184,483
452,841
204,405
647,522
Paul
Doropoulos*
Other
Total
-
-
156,174
57,955
156,174
63,624
156,174
70,494
192,073
77,647
38,824
130,391
48,347
130,391
53,120
130,391
58,856
199,147
258,823
129,412
739,406
274,348
739,406
301,227
739,406
333,755
1,038,742
*Paul Doropoulos resigned as Chief Financial Officer on 30 June 2017 but remains a Non-Executive Director of the
Company.
Settled in equity - KMP
Settled in equity - non KMP
Settled in Profit & Loss- KMP
Closing balance
2018
$
1,094,684
600,708
20,100
1,715,492
58
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 18. Share based payments (continued)
2018 EXECUTIVE INCENTIVE PLAN
In December 2017 The Company approved the 2018 Executive Incentive Plan and issued Participation Offer for its
Short-Term Incentive Plan (STIP). Long Term Incentive Plans (LTIPs) will be subject to board and shareholder
approval at the time of the 2018 AGM. As per the rules of the STIP, awards may be paid in cash or Rights, or a
combination of both, as determined at the discretion of the Board. For each participant the Company will select Key
Performance Indicators (KPI’s) by applying the following steps:
-
-
-
Identifying broad assessment areas that a relevant to the participants
Identifying Key Results Areas (KRA) (for example, EBITDA, strategic objectives, individual contribution)
Selecting KPIs for each KRA
Performance goals are then set at three levels being Threshold, Target and Stretch.
Valuation
At 30 June 2018, the value of individual awards based on the Company’s STIP have been calculated by an
independent expert assessment as at reporting date and are summarised below:
Recipient
Xavier Kris
George Nicholls*
Other non-KMP
Total
Threshold Award
($)
Exceeded
Exceeded
Exceeded
Target Award
($)
Exceeded
Exceeded
Exceeded
Stretch Award
($)
170,000
68,774
375,841
614,615
Total
($)
181,616
73,473
401,521
656,610
*George Nicholls was appointed as Chief Financial Officer on 1 July 2017 at which time he became a Key
Management Personnel.
The actual value of these awards will be determined by reference to the volume weighted price at which the
Company’s shares are traded on the ASX over the 10 trading days up to and including 30 June 2018.
Total expenses arising from share-based payment transactions recognised during the period were as follows:
Issue of share
Cash settled -KMP
Issue of options -KMP
Issue of options - Other
Closing balance
Consolidated
2018
$
2017
$
-
68,182
20,100
1,094,684
600,708
1,715,492
-
-
124,000
192,182
59
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 19. Cash flow information
Consolidated
2018
$
2017
$
(a) Reconciliation of net profit/(loss) after tax to net cash flows from operations:
(Loss) after tax
(a) Non-cash flows in profit:
Depreciation expenses and assets written off
Net fair value movement off available for sale financial assets
Share based payments (settled in equity)
Fair value loss on financial liability
Income tax expense/(benefit)
(7,728,812)
(1,364,198)
2,581,170
1,121,925
-
1,695,392
83,350
192,182
5,683,333
1,929,167
169,253
(1,001,757)
2,400,336
960,669
(b) Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries
Change in trade and other receivables
Change in inventories
Change in other current assets
Change in trade and other payables
Change in unearned revenue
Change in provisions
Cash flow provided from operations
(566,387)
(774,032)
(476,872)
(215,057)
(293,033)
2,008,946
(533,736)
4,846
327,497
151,708
103,405
(585,712)
2,642,659
(130,081)
(b) Non-cash financing and investing activities
Issue of 407,997 shares at $0.23 upon acquisition of Living Networks
Liability raised for the possible future issue of ordinary shares pursuant to the
acquisition of Living Networks and Web 2 TV
Issue of 3,600,000 shares at $0.34 upon acquisition of VOD Pty Ltd (refer to
Note 29)
-
-
100,000
775,000
1,224,000
-
1,224,000
875,000
60
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 20. Segment information
Activities in the operating segments are identified by management based on the manner in which resources are
allocated, the nature of the resources provided and the identity of service line manager and area of income and
expenditure. Discrete financial information about each of these areas is reported to the executive management team
on a monthly basis. Up to 31 December 2017, Board of Directors (Board) monitored the operating results of the
Group distinct business segments, being Swift Pty Ltd, VOD Pty Ltd, Living Networks and Web2TV separately for the
purposes of making decisions about resource allocation and performance assessment. Due to the change in business
view, with focus solely on consolidated profit rather than business unit profit, the four existing segments were
integrated under one consolidated reporting segment, being the provision of digital entertainment services in
Australia. This internal reporting framework is the most relevant to assist the Board with making decisions regarding
the company and its ongoing activities.
Revenue from external sources
Reportable segment loss
Reportable segment assets
Reportable segment liabilities
Reconciliation of reportable segment loss
Reportable segment loss
Other revenue
Unallocated
- Share based payments
- Fair value loss on financial liability
- Other
Loss before tax
Reconciliation of reportable segment assets
Reportable segment assets
Unallocated
Total assets
Reconciliation of reportable segment liabilities
Reportable segment liabilities
Unallocated
- Trade and other payables
Total liabilities
Consolidated
2018
$
2017
$
22,279,804
17,005,143
(212,308)
(173,777)
25,277,896
14,480,537
(17,417,634)
(8,339,555)
(212,308)
(173,777)
31,474
12,521
(1,695,392)
(192,182)
(5,683,333)
(1,929,167)
-
(83,350)
(7,559,559)
(2,365,955)
25,277,896
14,480,537
-
-
25,277,896
14,480,537
(17,417,634)
(8,339,555)
-
-
(17,417,634)
(8,339,555)
61
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 21. Financial risk management
Introduction and overview
The Group activities expose it to various types of risk that are associated with the financial instruments and markets
in which it invests. The most important types of financial risk to which the Group is exposed are market risk, credit risk
and liquidity risk.
Risk management framework
(a) Market risk
Market risk is analysed as market price risk, interest rate risk and currency risk.
(i) Market price risk
Market price risk is the risk that changes in market prices (other than changes due to currency or interest rate
risk) will affect the Group’s income or value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures.
As at balance date the exposure to market price risk related to financial instruments was considered to be
immaterial.
(ii)
Interest rate risk
Interest rate risk consists of cash flow interest rate risk (the risk that future cash flows of a financial instrument
will vary due to changes in market interest rates) and fair value interest rate risk (the risk that the value of a
financial instrument will vary due to changes in market interest rates).
Management of interest rate risk
Interest rate risk is the risk of financial loss and / or increased costs due to adverse movements in the values of
the financial assets and liabilities as a result of changes in interest rates.
Exposure to interest rate risk
As at the reporting date the interest rate risk was considered to be immaterial.
(iii) Currency risk
Currency risk is the risk that the value of assets and liabilities denominated in a foreign currency will fluctuate
due to adverse movements in exchange rates.
As at 30 June 2018, the Group has exposure to currency risk relating to an operating lease and contractual
commitments denominated in $US. A 10% movement in exchange rate would not have a material impact for
the Group.
(c)
Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails
to meet its contractual obligations.
Management of credit risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.
62
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 21. Financial risk management (continued)
Exposure to credit risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s
maximum exposure to credit risk at the reporting date was:
Carrying amount
Cash and cash equivalents
Trade and other receivables
Consolidated
2018
$
2017
$
3,201,819
2,237,906
4,527,643
2,189,478
7,729,462
4,427,384
Trade and other receivables that are neither past due nor impaired are considered to be of high credit quality.
Credit risk related to balances with banks and other financial institutions is managed in accordance with
approved board policy. Such policy requires that surplus funds are only invested with counterparties with a
Standard & Poor’s rating of at least A-.
(d)
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
Management of liquidity risk
The Group’s policy is to ensure that, as far as possible, it will always have sufficient liquidity to meet its financial
liabilities when due, under both normal and stressed conditions.
Exposure to liquidity risk
As at reporting date the Group had sufficient cash reserves to meet its requirements. The Group has no access
to credit standby facilities or arrangements for further funding or borrowings in place.
The financial liabilities the Group had at reporting date were trade payables incurred in the normal course of
the business. These were non-interest bearing and were due within the normal 30-60 days terms of creditor
payments.
The following table sets out the carrying amounts, by maturity, of the financial instruments including exposure
to interest rate risk:
63
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 21. Financial risk management (continued)
Carrying
Weighted
average
Maturity
amount
interest
rate
6 months or
less
6-12
months
1-2 years
$
%
$
$
$
More
than 2
years
$
Total
Contractual
cash flows
$
Consolidated - 2018
Financial assets
Cash and cash
equivalents
3,201,819
1.25%
3,201,819
-
-
-
3,201,819
Trade receivables
4,481,482
46,161
7,729,462
3,751,485
2,171,857
363,236
10,287,500
16,574,078
-
-
-
-
-
-
-
3,153,684
247,993
275,560
804,245
4,481,482
46,161
-
-
-
46,161
6,401,664
247,993
275,560
804,245
7,729,462
3,751,485
2,171,857
72,643
9,350,000
-
-
-
-
-
-
290,593
937,500
-
-
-
3,751,485
2,171,857
363,236
- 10,287,500
15,345,985
- 1,228,093
- 16,574,078
2,237,906
1.25%
1,832,878
1,975,087
214,391
4,427,384
2,533,303
914,795
-
4,604,167
8,052,265
-
-
-
-
-
-
-
1,975,087
214,391
4,022,356
2,533,303
914,795
-
-
3,448,098
-
-
-
-
-
-
-
-
-
190,028
215,000
2,237,906
-
-
-
-
1,975,087
214,391
190,028
215,000
4,427,384
-
-
-
-
-
-
2,533,303
914,795
-
- 4,604,167
4,604,167
- 4,604,167
8,052,265
64
Other receivables
Closing net book
amount
Financial liabilities
Trade payables
Other payable and
accruals
Provisions
Financial liability
Closing net book
amount
Consolidated - 2017
Financial assets
Cash and cash
equivalents
Trade receivables
Other receivables
Financial liabilities
Trade payables
Other payable and
accruals
Loan
Financial liability
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 21. Financial risk management (continued)
The Group maintains cash flow forecasts for the next 12 months on a rolling basis. This takes into consideration all
projected debt payments.
Fair value of financial assets and liabilities
The fair value of cash and cash equivalents and non-interest bearing monetary financial assets and financial liabilities
of the Group approximates their carrying amounts.
The fair value of other monetary financial assets and financial liabilities is based upon market prices where a market
exists or by discounting the expected future cash flows by the current interest rates for assets and liabilities with
similar risk profiles. Non-interest bearing related party receivables and loans are repayable on demand, thus face value
equates to fair value.
Equity investments traded on organised markets have been valued by reference to market prices prevailing at balance
date. For non-traded equity investments, the fair value is an assessment by the Directors based on the underlying net
assets, future maintainable earnings and any special circumstances pertaining to a particular investment.
The carrying amounts of financial assets and liabilities equates to their fair values at balance date.
Note 22. Auditors’ Remuneration
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:
Auditors of the Company
BDO Audit (WA) Pty Ltd
Audit and review of financial statements
Non-audit services provided (BDO Tax)
Non-audit services provided (BDO Reward)
Consolidated
2018
$
2017
$
106,068
90,558
5,000
-
-
23,500
Total remuneration for audit and non-audit services
111,068
114,058
65
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 23. Parent entity
(a) Statement of Profit or Loss and other comprehensive income
The individual financial statements for the parent entity show the following
aggregate amounts:
Net loss attributable to equity holders of the Company
(8,702,446)
(3,322,085)
Parent entity
2018
$
2017
$
(b) Statement of financial position
ASSETS
Total current assets
Total non-current assets
Total assets
LIABILITIES
Total current liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Share capital
Other reserves
Accumulated losses
Total equity
The Parent has not entered into any Guarantees on behalf of the Group as at 30 June 2018.
The Parent has Contingent Assets or Contingent Liabilities as at 30 June 2018.
The Parent has no contractual obligations on behalf of the Group as at 30 June 2018.
17,266
-
14,548,220
9,915,915
14,565,486
9,915,915
-
-
(10,287,500)
(4,604,167)
(10,287,500)
(4,604,167)
4,277,986
5,311,748
38,305,351
30,636,667
849,652
849,652
(34,877,017)
(26,174,571)
4,277,986
5,311,748
66
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 24. Commitments
Operating lease commitments
Office premises
The Group leases office premises under an operating lease
expiring in five years. Minimum commitments under the lease are
as follows:
Not later than 1 year
Later than 1 year and not later than 2 years
Later than 2 years and not later than 5 years
ERP implementation commitments
ERP implementation costs and license fees
The Group entered in a three year payment plan for ERP costs.
Minimum commitments under the lease are as follows:
Not later than 1 year
Later than 1 year and not later than 2 years
Later than 2 years and not later than 5 years
Consolidated
2018
$
2017
$
525,863
420,691
533,745
1,650,123
-
-
2,709,731
420,691
121,200
121,200
121,200
363,600
-
-
-
-
Note 25. Key management personnel compensation disclosures
Refer to the Remuneration Report contained in the Directors' Report for details of the remuneration paid or payable
to each member of the Company's Key Management Personnel (KMP) for the year ended 30 June 2018.
Short term employee benefits
Share based payments – cash
Share based payments – non cash
Post-employment benefits
Consolidated
2018
$
2017
$
976,125
853,673
20,100
1,094,684
-
-
93,529
53,847
2,184,438
907,160
67
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 26. Related party transactions
Key management personnel
Disclosures relating to key management personnel are set out in the remuneration report of the Directors' report.
Transactions with related parties
Transactions with key management personnel related parties are on normal commercial terms and conditions no
more favourable than those available to other parties unless otherwise stated.
Payments made to Wenro Holdings Pty Ltd, a company of which
Robert Sofoulis is a Director and Ryan Sofoulis is associated with, for
the provision of office premises, pursuant to operating lease
Consolidated
2018
$
2017
$
433,538
472,360
Payments received from Wenro Holdings Pty Ltd, a company of which
Robert Sofoulis is a director and Ryan Sofoulis is associated with, as an
incentive for the renewal of an operating lease
Payments received from Wenro Holdings Pty Ltd, a company of which
Robert Sofoulis is a director and Ryan Sofoulis is associated with, for
Project Management Services provided by the Company in relation to
renovation of office premises
439,523
71,500
Loans from related parties
Opening balance
Funds repaid to directors and related parties
Closing balance
Loans to related parties
Opening balance
Funds loaned to Xavier Kris1
Funds repaid
Closing balance
-
-
-
-
275,000
-
275,000
-
-
909,308
(909,308)
-
-
-
-
-
1 The unsecured loan was subject to an arm’s length interest rate and repayable by no later than 30 April 2019. Prior
to the date of this report the loan was repaid in full.
68
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 26. Related party transactions (continued)
Amounts outstanding at reporting date
(i) Payables
(ii) Receivables
Transactions with other related parties
Entities managed by Key Management personnel
Share based payments to KMP and other non KMP - non cash
Share based payments to KMP and other non KMP - cash
settled
Consolidated
2018
$
2017
$
57,543
188,205
275,000
1,695,392
20,100
-
-
-
Total share-based payments
1,715,492
188,205
No other transactions or loans existed during the year and as at reporting date between the Company and with key
management personnel.
Note 27. Group entity
Ultimate parent entity
The ultimate parent entity in the wholly owned Group is Swift Networks Group Limited.
Name of entity
Parent entity
Swift Networks Group Limited
Controlled entities
Swift Networks Pty Ltd
VOD Pty Ltd
Movie Source Pty Ltd
Wizzie Pty Ltd
Stanfield Funds Management Limited
Country of
residence /
establishment
Ownership interest
30 June 2018
%
30 June 2017
%
Australia
100%
100%
Australia
Australia
Australia
Australia
Hong Kong
100%
100%
100%
100%
100%
100%
0%
0%
100%
100%
Of the controlled entities, only Swift Networks Pty Ltd and VOD Pty Ltd were operating during the
financial year.
69
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 28. EPS
Consolidated
2018
$
2017
$
Net profit / (loss) from continuing operations for the year
(7,728,812)
(1,364,198)
Weighted average number of ordinary shares for the purpose of basic
earnings per share
112,000,798
86,690,176
No.
No.
Basic earnings / (loss) per share (cents)
Diluted earnings / (loss) per share (cents)
Note 29. Business Combination
(6.9)
(6.9)
(1.6)
(1.6)
(a) Summary of acquisition - Movie Source Pty Ltd and VOD Pty Ltd
On 31 August 2017 the Group acquired 100% of the issued share capital of Movie Source Pty Ltd and VOD Pty Ltd. The
Group has provisionally recognised the fair values of the assets and liabilities based on the best available information
available at reporting date. Details of the purchase consideration and the net assets acquired are as follows:
Purchase consideration:
Cash paid
Ordinary shares issued (3,600,000 shares at F.V of $0.34/share
on 31 August 2017)
Adjustment payment to Vendor (paid in cash)
Total Purchase Consideration
The assets and liabilities recognised as a result of the acquisition are as follows:
Cash
Inventory
Trade and other receivables
Other assets
Plant & equipment
Intangibles - Customer Contracts(iii)
Intangibles – Supplier Contracts
Intangibles – Product Development)
Intangibles – Other
Trade & other payables
Provisions
Unearned Income
Deferred tax liabilities
$
5,100,000
1,224,000
457,257
6,781,257
255
38,673
1,748,028
1,485
122,220
1,271,523
123,610
650,000
2,699
(441,552)
(259,831)
(836,667)
(614,540)
70
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Note 29. Business Combination (continued)
Net identifiable assets
Add: Goodwill
Net assets acquired
1,805,903
4,975,354
6,781,257
(i) The goodwill is attributable to the forecast profitability of the acquired business. It will not be deductible for tax
purposes.
(ii) The directors believe the receivables are fully recoverable and no provision for impairment is required.
(iii) Revenue and net profit before tax of Movie Source Pty and VOD Pty Ltd included in the consolidated statement of
profit or loss and other comprehensive income from the acquisition date of 1 September 2017 to 30 June 2018
were $2,310,725 and ($625,192).
Significant accounting estimates and judgements
The fair value of acquired assets was determined using the following key assumptions:
Customer contracts: assumed level of future revenue and assumed EBITDA margin
At 30 June 2017, provisional accounting was applied to the fair value at identifiable assets and liabilities of Web2TV
and Living Networks. At 31 Dec 2017, an adjustment has been made to recognise an intangible asset for customer
contracts of $250,000 and $200,000 for Web2TV and Living Networks respectively, with a comparative net decrease
in Goodwill of $175,000 and $140,000.
Note 30. Contingencies
Liabilities under guarantees
Total Contingent liabilities
2018
$
2017
$
313,711
313,711
-
-
Note 31. Events subsequent to reporting date
There are no other matters or circumstances that have arisen since 30 June 2018 that have or may significantly affect
the operations, results, or state of affairs of the Group in future financial periods.
Note 32. Company details
The registered office and principal place of business of the Company is:
Swift Networks Group Limited
1 Watts Place
BENTLEY WA 6102
Australia
71
SWIFT NETWORKS GROUP LIMITED
AND CONTROLLED ENTITIES
ABN 54 006 222 395
Directors’ declaration
The Directors of the Company declare that the financial statements and notes, as set out on pages 24 to 71 are in
accordance with the Corporations Act 2001 and:
a.
b.
c.
d.
e.
comply with Accounting Standards, which as stated in accounting policy Note 2 to the financial
statements, constitutes explicit and unreserved compliance with International Financial Reporting
Standards (IFRS); and
give a true and fair view of the financial position as at 30 June 2018 and of the performance for the year
ended on that date of the consolidated Group;
the financial records of the Company for the financial year have been properly maintained in
accordance with s 286 of the Corporations Act 2001;
the financial statements and notes for the financial year comply with the Accounting Standards; and
the financial statements and notes for the financial year give a true and fair view;
in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as
and when they become due and payable as disclosed in Note 2 to the financial statements.
This declaration is made in accordance with a resolution of the Board of Directors.
Chairman
Carl Clump
Dated this 31st day of August 2018
72
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Swift Networks Group Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Swift Networks Group Limited (the Company) and its
subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30
June 2018, the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the year
then ended, and notes to the financial report, including a summary of significant accounting policies
and the directors’ declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN
77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK
company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under
Professional Standards Legislation, other than for the acts or omissions of financial services licensees.
Recoverability of intangible assets
Key audit matter
How the matter was addressed in our audit
Note 10 to the financial report discloses the
individual intangible assets and the
assumptions used by the Group in testing
these assets for impairment.
This was determined to be a key audit matter
as management’s assessment of the
recoverability of the intangible assets is
supported by a value in use cash flow forecast
which requires estimates and judgements
about future performance. These include
judgements and estimates over the
expectation of future revenues, anticipated
gross profit margin, growth rates expected
and the discount rate applied.
Our procedures included, but were not limited to
the following:
·
·
·
Assessing the appropriateness of the
Group’s categorisation of Cash Generating
Units (CGUs)and the allocation of assets to
the carrying value of CGUs based on our
understanding of the Group’s business and
the Group’s internal reporting;
Evaluating management’s ability to
accurately forecast cash flows by assessing
the precision of the prior year forecasts
against actual outcomes;
Challenging key inputs used in the
discounted cash flows calculations
including the following:
o In conjunction with our valuation
specialist, comparing the discount
rate utilised by management to an
independently calculated discount
rate;
o Comparing growth rates with
historical data and economic and
industry growth forecast;
o Comparing the Group’s forecast
cash flows to the board approved
budget;
o Performing sensitivity analysis on the
revenue, growth rates and gross
profit margins and discount rates;
and
·
Evaluating the adequacy of related
disclosures in the financial report.
2
Accounting for business combinations (Movie Source Pty Ltd and VOD Pty Ltd)
Key audit matter
How the matter was addressed in our audit
On 31 August 2017, the Group acquired 100%
of the issued share capital of Movie Source
Pty Ltd and VOD Pty Ltd. The Group had
provisionally recognised the fair value of the
assets and liabilities based on the best
available information available at the
reporting date.
The accounting for business combinations was
a key audit matter given the acquisition was
material to the Group and involved significant
judgements made by the Group, including:
(cid:127) Determination of the amount of the
purchase consideration for the
acquisition; and
(cid:127) Estimation of the fair value of assets and
liabilities acquired.
Our procedures included, but were not limited to
the following:
· Reviewing the acquisition agreement to
understand the key terms and conditions,
and confirming our understanding of the
transaction with management;
· Obtaining an understanding of the
transaction including an assessment of the
accounting acquirer and whether the
transaction constituted a business or an
asset acquisition;
· Comparing the assets and liabilities
recognised on acquisition against the
executed agreements and the historical
financial information of the acquired
businesses;
· Evaluating the assumptions and
methodology in management's
determination of the fair value assets and
liabilities acquired; and
· Assessing the appropriateness of the Group's
disclosures in respect of the acquisitions
(Refer Note 29).
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2018, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
3
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
http://www.auasb.gov.au/auditors_files/ar2.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 13 to 20 of the directors’ report for the
year ended 30 June 2018.
In our opinion, the Remuneration Report of Swift Networks Group Limited, for the year ended 30 June
2018, complies with section 300A of the Corporations Act 2001.
4
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Dean Just
Director
Perth, 31 August 2018
5
Shareholder information
A.
Substantial Shareholders
The following have a relevant interest (>5%) in the capital of Swift Networks Group Limited as at 30 August
2018
Substantial ordinary shareholders
No. of ordinary shares
held
Percentage held of
Issued Ordinary
Capital
MR ROBERT NICHOLAS SOFOULIS & RELATED
ENTITIES
30,185,000
24.88%
B.
Distribution of Equity Securities
(i)
Analysis of numbers of equity security holders by size of holding as at 30 August 2018
Category (Size of Holdings)
Number of Holders
Unlisted Options
Ordinary Shares
1
1,001
5,001
10,001
100,001
-
-
-
-
-
1,000
5,000
10,000
100,000
and over
62
537
224
528
141
1,492
-
-
-
12
14
26
78
Shareholder information (continued)
C.
Equity Security Holders
Twenty largest quoted equity security holders (30 August 2018)
SOFOULIS HOLDINGS PTY LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR JOHN COLIN LOOSEMORE & MRS SUSAN MARJORY
LOOSEMORE
1
2
3
4
5
6
7
SUETONE PTY LTD
ARADHIPPOU GROVE PTY LTD
TRI-NATION HOLDINGS PTY LTD
JAMES FLORIAN PEARSON
PAUL DOROPOULOS
BNP PARIBAS NOMS PTY LTD
NATIONAL NOMINEES LIMITED
TRI-NATION HOLDINGS PTY LTD
8
9
10
11
12
13 MR RUSSELL NEIL CREAGH
14
BOTSIS HOLDINGS PTY LTD
14
BURRWOOD INVESTMENTS PTY LTD
15
16 MR JAMES FLORIAN PEARSON
17
18
TRI-NATION HOLDINGS PTY LTD
SHARIC SUPERANNUATION PTY LTD
19
20
BOND STREET CUSTODIANS LTD
BNP PARIBAS NOMINEES PTY LTD
Total
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
Ordinary shares
Number
held
30,000,000
4,949,400
4,850,824
4,200,000
3,880,000
3,162,386
2,408,889
2,222,223
2,128,889
2,085,518
1,350,875
1,080,000
1,025,777
1,000,000
1,000,000
984,193
971,125
850,000
825,572
818,860
792,045
70,586,576
Percentage
of issued
shares
24.73
4.08
4.00
3.46
3.20
2.61
1.99
1.83
1.75
1.72
1.11
0.89
0.85
0.82
0.82
0.81
0.80
0.70
0.68
0.67
0.65
58.19
79
Shareholder information (continued)
D.
Voting Rights
The voting rights, upon a poll, are one vote for each share held.
E.
Unquoted securities
Securities
Options exercisable at $0.15 on or before
19 May 2021
Options exercisable at $0.35 on or before
31 May 2021
Options exercisable at $0.42 on or before
31 May 2021
Class A Performance Shares
Class B Performance Shares
Deferred Options
Class A Performance Rights
Class B Performance Rights
Share appreciation rights
Number of
Options
Number of
Holders
Holders with more
than 20%
6,633,333
24
1,000,000
1,000,000
16,666,667
16,666,667
258,823
739,406
739,406
739,406
1
1
1
1
2
3
3
3
-
1
1
1
1
2
3
3
3
Details of Performance Shares
Each Performance Shares converts to one (1) fully paid ordinary share upon satisfaction of the relevant
milestone on or before 15 November 2020. The milestones in relation to the Performance Shares are:
Milestone 1 – 16,666,667 Performance Shares
The earlier to occur of:
(i)
the Company reaching 44,000 rooms with a revenue generating service from Swift Networks; and
(ii) the Company reaching consolidated revenue of $24,000,000 in any rolling 12-month period
commencing after completion.
Milestone 2 – 16,666,667 Performance Shares
The earlier to occur of:
(i)
the Company reaching 53,000 rooms with a revenue generating service from Swift Networks; and
the Company reaching consolidated revenue of $29,000,000 in any rolling 12-month period
(ii)
commencing after completion.
No Performance Shares were converted or cancelled during the period.
No performance milestones were met during the period.
F.
On-market buyback
There is no current on-market buy-back
G.
Stock Exchange listing
Quotation has been granted for the Company’s Ordinary Shares.
80
Shareholder information (continued)
H.
Securities subject to escrow
The following securities are currently subject to escrow:
Securities
Escrow Period
Release Date
Number
Fully Paid Shares
12 months from quotation
1 September 2018
2,700,000
I.
Statement in relation to Listing Rule 4.10.19
The Directors of Swift Networks Group confirm in accordance with ASX Listing Rule 4.10.19 that during the
period from reinstatement to official quotation to 30 June 2018, the Company has used its cash, and assets
that are readily convertible to cash, in a way consistent with its business objectives.
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CORPORATE GOVERNANCE STATEMENT
Recommendation 1.2
The Company undertakes appropriate checks before appointing a person or putting forward to shareholders a
candidate for election as a director and provides shareholders with all material information in its possession
relevant to a decision on whether or not to elect a director.
The checks which are undertaken, and the information provided to shareholders, are set out in the Company’s
Remuneration and Nomination Committee Charter.
Recommendation 1.3
The Company has a written agreement with each of the Directors and senior executives setting out the terms of
their appointment. The material terms of any employment, service or consultancy agreement the Company, or any
of its child entities, has entered into with its Chief Executive Officer, any of its directors, and any other person or
entity who is a related party of the Chief Executive Officer or any of its directors will be disclosed in accordance with
ASX Listing Rule 3.16.4 (taking into consideration the exclusions from disclosure outlined in that rule).
Recommendation 1.4
The Company Secretary is accountable directly to the Board, through the Chair, on all matters to do with the proper
functioning of the Board. The Company Secretary is responsible for the application of best practice in corporate
governance and also supports the effectiveness of the Board by:
ensuring a good flow of information between the Board, its committees, and Directors;
(a)
(b) monitoring policies and procedures of the Board;
(c)
(d)
advising the Board through the Chairman of corporate governance policies; and
conducting and reporting matters of the Board, including the despatch of Board agendas, briefing papers
and minutes.
Recommendation 1.5
The Company has a Diversity Policy, the purpose of which is:
(a)
(b)
to outline the Company’s commitment to creating a corporate culture that embraces diversity and, in
particular, focuses on the composition of its Board and senior management; and
to provide a process for the Board to determine measurable objectives and procedures which the Company
will implement and report against to achieve its diversity goals.
As at 30 June 2018 there is one woman in senior executive positions in the Company, and 9 women employees
across the Company, representing 17% of the whole organisation. There are no women on the Board at this time.
The Board maintains full transparency of board processes, reviews and appointments and encourages gender
diversity.
Given the Company’s size the Board does not consider it appropriate to set quantitative objectives regarding gender
diversity at this time. As the operations grow, the Board will give consideration to the setting of such objectives and
their achievement through the appointment of appropriate candidates to the Board and senior executive positions
as they become available
Recommendation 1.6
The Chair will be responsible for evaluating the performance of the Board, Board committees and individual
directors in accordance with the process disclosed in the Company’s Board performance evaluation policy.
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CORPORATE GOVERNANCE STATEMENT
This policy is to ensure:
(a)
(b)
(c)
individual Directors and the Board as a whole work efficiently and effectively in achieving their functions;
the executive Directors and key executives execute the Company’s strategy through the efficient and
effective implementation of the business objectives; and
committees to which the Board has delegated responsibilities are performing efficiently and effectively in
accordance with the duties and responsibilities set out in the board charter.
This policy will be reviewed annually.
During the current reporting period, the Company has not conducted an evaluation of the Board, its committees
and individual directors. The Board is currently in the process of conducting its evaluation for the 2018 year.
Recommendation 1.7
The Chief Executive Officer will be responsible for evaluating the performance of the Company’s senior executives
in accordance with the process disclosed in the Company’s Process for Performance Evaluations, which is currently
being developed by the Board.
The Chair will be responsible for evaluating the performance of the Company’s Chief Executive Officer in accordance
with the process disclosed in the Company’s Process for Performance Evaluations, which is currently being
developed by the Board.
During the current reporting period, the Company has not conducted an evaluation of its Chief Executive Officer.
The Board has committed to conducting an evaluation during the December quarter 2018.
Principle 2: Structure the board to add value
Recommendation 2.1
The Board has Remuneration and Nomination Committee consisting of independent Chairman Carl Clump and non-
executive Directors Paul Doropoulos and Robert Sofoulis.
The duties of the committee are set out in the Company’s Remuneration and Nomination Committee Charter which
is available on the Company’s website.
The Board has adopted a Remuneration and Nomination Committee Charter which describes the role, composition,
functions and responsibilities of a Nomination Committee and is disclosed on the Company’s website.
The attendance of the members of the Remuneration and Nomination Committee is shown in the Directors' Report
Recommendation 2.2
The mix of skills and diversity which the Board is looking to achieve in its composition is:
(a)
(b)
a broad range of business experience; and
technical expertise and skills required to discharge duties.
Recommendation 2.3
The Board considers the independence of directors having regard to the relationships listed in Box 2.3 of the
Principles and Recommendations.
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CORPORATE GOVERNANCE STATEMENT
Currently the Board is structured as follows:
(a)
(b)
(c)
(d)
(e)
Carl Clump (Independent Chairman, appointed 6 October 2014);
Xavier Kris (Chief Executive Officer, appointed 6 October 2014);
Paul Doropoulos (Non-Executive Director, appointed 6 October 2014);
Ryan Sofoulis (Executive Director, appointed 19 May 2016); and
Robert Sofoulis (Non-Executive Director, appointed 19 May 2016).
Recommendation 2.4
Currently, the Board considers that membership weighted towards relevant expertise is appropriate at this stage
of the Company’s operations. Accordingly, the Board does not have a majority of independent directors.
Recommendation 2.5
Mr Carl Clump is an independent Chairman.
Recommendation 2.6
It is a policy of the Company, that new Directors undergo an induction process in which they are given a full briefing
on the Company.
In order to achieve continuing improvement in Board performance, all Directors are encouraged to undergo
continual professional development. Specifically, Directors are provided with the resources and training to address
skills gaps where they are identified.
Principle 3: Act ethically and responsibly
Recommendation 3.1
The Company is committed to promoting good corporate conduct grounded by strong ethics and responsibility. The
Company has established a Code of Conduct (Code), which addresses matters relevant to the Company’s legal and
ethical obligations to its stakeholders. It may be amended from time to time by the Board, and is disclosed on the
Company’s website.
The Code applies to all Directors, employees, contractors and officers of the Company.
The Code will be formally reviewed by the Board each year.
Principle 4: Safeguard integrity in corporate reporting
Recommendation 4.1
Due to the size of the Board, the Company does not have a separate Audit Committee. The roles and responsibilities
of an audit committee are undertaken by the Board.
The full Board in its capacity as the audit committee is responsible for reviewing the integrity of the Company’s
financial reporting and overseeing the independence of the external auditors. The duties of the full Board in its
capacity as the audit committee are set out in the Company’s Audit Committee Charter which is available on the
Company’s website.
When the Board meets as an audit committee it carries out those functions which are delegated to it in the
Company’s Audit Committee Charter. Items that are usually required to be discussed by an Audit Committee are
marked as separate agenda items at Board meetings when required.
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CORPORATE GOVERNANCE STATEMENT
The Board is responsible for the initial appointment of the external auditor and the appointment of a new external
auditor when any vacancy arises. Candidates for the position of external auditor must demonstrate complete
independence from the Company through the engagement period. The Board may otherwise select an external
auditor based on criteria relevant to the Company's business and circumstances. The performance of the external
auditor is reviewed on an annual basis by the Board.
The Board has adopted an Audit Committee Charter which describes the role, composition, functions and
responsibilities of the Audit Committee and is disclosed on the Company’s website.
Recommendation 4.2
Before the Board approves the Company financial statements for each financial period it will receive from the Chief
Executive Officer and the Chief Financial Officer or equivalent a declaration that, in their opinion, the financial
records of the Company for the relevant financial period have been properly maintained and that the financial
statements for the relevant financial period comply with the appropriate accounting standards and give a true and
fair view of the financial position and performance of the Company and the consolidated entity and that the opinion
has been formed on the basis of a sound system of risk management and internal control which is operating
effectively.
Recommendation 4.3
Under section 250RA of the Corporations Act, the Company’s auditor is required to attend the Company’s annual
general meeting at which the audit report is considered, and does not arrange to be represented by a person who
is a suitably qualified member of the audit team that conducted the audit and is in a position to answer questions
about the audit. Each year, the Company will write to the Company’s auditor to inform them of the date of the
Company’s annual general meeting. In accordance with section 250S of the Corporations Act, at the Company’s
annual general meeting where the Company’s auditor or their representative is at the meeting, the Chair will allow
a reasonable opportunity for the members as a whole at the meeting to ask the auditor (or its representative)
questions relevant to the conduct of the audit; the preparation and content of the auditor’s report; the accounting
policies adopted by the Company in relation to the preparation of the financial statements; and the independence
of the auditor in relation to the conduct of the audit. The Chair will also allow a reasonable opportunity for the
auditor (or their representative) to answer written questions submitted to the auditor under section 250PA of the
Corporations Act.
Principle 5: Make timely and balanced disclosure
Recommendation 5.1
The Company is committed to:
(a)
(b)
(c)
ensuring that shareholders and the market are provided with full and timely information about its activities;
complying with the continuous disclosure obligations contained in the Listing Rules and the applicable
sections of the Corporations Act; and
providing equal opportunity for all stakeholders to receive externally available information issued by the
Company in a timely manner.
The Company has adopted a Disclosure Policy, which is disclosed on the Company’s website. The Disclosure Policy
sets out policies and procedures for the Company’s compliance with its continuous disclosure obligations under the
ASX Listing Rules, and addresses financial markets communication, media contact and continuous disclosure issues.
It forms part of the Company’s corporate policies and procedures and is available to all staff.
The Chief Executive Officer manages the policy. The policy will develop over time as best practice and regulations
change and the Company Secretary will be responsible for communicating any amendments. This policy will be
reviewed by the Board annually.
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CORPORATE GOVERNANCE STATEMENT
Principle 6: Respect the rights of security holders
Recommendation 6.1
information about
The Company provides
its website at
http://www.swiftnetworks.com.au. The Company is committed to maintaining a Company website with general
information about the Company and its operations and information specifically targeted at keeping the Company’s
shareholders informed about the Company. In particular, where appropriate, after confirmation of receipt by ASX,
the following will be posted to the Company website:
its governance to
investors via
itself and
relevant announcements made to the market via ASX;
investment updates;
(a)
(b) media releases;
(c)
(d)
(e)
(f)
Company presentations and media briefings;
copies of press releases and announcements for the preceding three years; and
copies of annual and half yearly reports including financial statements for the preceding three years.
Recommendation 6.2
The Company has a Shareholder Communication and Investor Relations Policy which aims to ensure that
Shareholders are informed of all major developments of the Company. The policy is disclosed on the Company’s
website.
Information is communicated to Shareholders via:
(a)
(b)
(c)
(d)
reports to Shareholders;
ASX announcements;
annual general meetings; and
the Company website.
This Shareholder Communication and Investor Relations policy will be formally reviewed by the Board each year.
While the Company aims to provide sufficient information to Shareholders about the Company and its activities, it
understands that Shareholders may have specific questions and require additional information. To ensure that
Shareholders can obtain all relevant information to assist them in exercising their rights as Shareholders, the
Company has made available a telephone number and relevant contact details (via the website) for Shareholders
to make their enquiries.
Recommendation 6.3
The Board encourages full participation of Shareholders at meetings to ensure a high level of accountability and
identification with the Company’s strategies and goals.
However, due to the size and nature of the Company, the Board does not consider a policy outlining the policies
and processes that it has in place to facilitate and encourage participating at meetings of shareholders to be
appropriate at this stage.
Recommendation 6.4
Shareholders are given the option to receive communications from, and send communication to, the Company and
its share registry electronically. To ensure that shareholders can obtain all relevant information to assist them in
exercising their rights as shareholders, the Company has made available a telephone number and relevant contact
details (via the website) for shareholders to make their enquiries.
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CORPORATE GOVERNANCE STATEMENT
Principle 7: Recognise and manage risk
Recommendation 7.1
Due to the size of the Board, the Company does not have a separate Risk Committee. The Board is responsible for
the oversight of the Company’s risk management and control framework.
When the Board meets as a risk committee is carries out those functions which are delegated to it in the Company’s
Audit Committee Charter. Items that are usually required to be discussed by a Risk Committee are marked as
separate agenda items at Board meetings when required.
The Board has adopted an Audit Committee Charter which describes the role, composition, functions and
responsibilities in relation to the risk management system of the Audit Committee and is disclosed on the
Company’s website.
The Board has adopted a Risk Management Policy, which is disclosed on the Company’s website. Under the policy,
responsibility and control of risk management is delegated to the appropriate level of management within the
Company with the Chief Executive Officer having ultimate responsibility to the Board for the risk management and
control framework.
The risk management system covers:
(a)
(b)
(c)
(d)
operational risk;
financial reporting;
compliance / regulations; and
system / IT process risk.
A risk management model is also being developed and will provide a framework for systematically understanding
and identifying the types of business risks threatening the Company as a whole, or specific business activities within
the Company.
Recommendation 7.2
The Board will review the Company’s risk management framework annually to satisfy itself that it continues to be
sound, to determine whether there have been any changes in the material business risks the Company faces and to
ensure that the Company is operating within the risk appetite set by the Board.
Arrangements put in place by the Board to monitor risk management include, but are not limited to:
(a) monthly reporting to the Board in respect of operations and the financial position of the Company; and
(b)
quarterly rolling forecasts prepared;
Recommendation 7.3
The Company does not have, and does not intend to establish, an internal audit function. To evaluate and
continually improve the effectiveness of the Company’s risk management and internal control processes, the Board
relies on ongoing reporting and discussion of the management of material business risks as outlined in the
Company’s Risk Management Policy.
Recommendation 7.4
Given the speculative nature of the Company’s business, it will be subject to general risks and certain specific risks.
The Company will identify those economic, environmental and/or social sustainability risks to which it has a material
exposure, and disclose how it intends to manage those risks in each of its corporate governance statements.
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CORPORATE GOVERNANCE STATEMENT
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1
The Board has Remuneration and Nomination Committee consisting of independent Chairman Carl Clump and non-
executive Director Robert Sofoulis. Due to the size of the Board, the Company has not appointed a third member
to the committee.
The duties of the committee are set out in the Company’s Remuneration and Nomination Committee Charter which
is available on the Company’s website
The Board has adopted a Remuneration and Nomination Committee Charter which describes the role, composition,
functions and responsibilities of the Remuneration Committee and is disclosed on the Company’s website.
The attendance of the members of the Remuneration and Nomination Committee is shown in the Directors' Report.
Recommendation 8.2
Details of the Company’s policies on remuneration will be set out in the Company’s” Remuneration Report” in each
Annual Report published by the Company. This disclosure will include a summary of the Company’s policies
regarding the deferral of performance-based remuneration and the reduction, cancellation or clawback of the
performance-based remuneration in the event of serious misconduct or a material misstatement in the Company’s
financial statements.
Recommendation 8.3
The Company’s Security Trading Policy includes a statement on the Company’s policy on prohibiting participants in
the Company’s Employee Incentive Plan entering into transactions (whether through the use of derivatives or
otherwise) which limit the economic risk of participating in the Employee Incentive Plan.
Security Trading Policy
In accordance with ASX Listing Rule 12.9, the Company has adopted a trading policy which sets out the following
information:
(a)
(b)
(c)
closed periods in which directors, employees and contractors of the Company must not deal in the
Company’s securities;
trading in the Company’s securities which is not subject to the Company’s trading policy; and
the procedures for obtaining written clearance for trading in exceptional circumstances.
The Company’s Security Trading Policy is available on the Company’s website.
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Corporate Directory
Directors
Carl Clump
Chairman
Xavier Kris
Executive Director – Chief Executive
Officer
Paul Doropoulos
Non-Executive Director
Robert Sofoulis
Non-Executive Director
Ryan Sofoulis
Executive Director
Company Secretary
Stephen Hewitt-Dutton
Chief Financial Officer
George Nicholls
Corporate Details
Auditor
Swift Networks Group Limited
ACN: 006 222 395
ABN: 54 006 222 395
www.swiftnetworks.com.au
Registered Office
1 Watts Place
BENTLEY WA 6102
Telephone: +61 8 6103 7595
+61 8 6103 7594
Facsimile:
BDO Audit (WA) Pty Ltd
38 Station Street
SUBIACO WA 6008
Bankers
Bank West Ltd
Bank West Place
300 Murray Street
WA 6000
Share Registry
Link Group
Level 12
QV1 Building
PERTH WA 6000
T: +61 8 9211 6650
F: +61 8 9211 6670
W : linkmarketservices.com.au
Stock Exchange Listings
The ordinary shares of Swift Networks
Group Limited are listed on the Australian
Stock Exchange
(Code: SW1)
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