EXPERIENCE CO LIMITED — Annual Report 2018

Aug 28, 2018

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ACN 167 320 470

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APPENDIX 4E - PRELIMINARY FINAL REPORT

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FOR THE YEAR ENDED 30 JUNE 2018

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Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470

Appendix 4E - Preliminary Final Report For The Year Ended 30 June 2018

Contents

Appendix 4E

Appendix 4E 1 Consolidated Statement of Profit or Loss and Other Comprehensive Income 3 Consolidated Statement of Financial Position 4 Consolidated Statement of Changes in Equity 5 Consolidated Statement of Cash Flows 6 Notes to The Financial Statements 7 - 16

Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited)

ACN: 167 320 470

Appendix 4E - Preliminary Final Report for the year ended 30 June 2018

Results for announcement to the market

	Year ended	Year ended
	30 June 2018	30 June 2017	Variance
	$'000	$'000	%
Revenue from ordinary activities	135,300	89,566	51.1%
Earnings before interest, taxes, depreciation, amortisation and impairment (EBITDAI)*	27,411	20,988	30.6%
Net profit after tax **	6,785	9,482	-28.4%
Profit after tax attributable to members of the parent entity	6,785	9,482	-28.4%
Earnings per share (cents)
- Basic	1.34	2.24	-40.0%
- Diluted	1.31	2.18	-39.8%
Cash and cash equivalents	7,171	9,490	-24.4%

• EBITDAI is a financial measure which is not prescribed by Australian Accounting Standards (“AAS”) and represents the profit under AAS adjusted for specific non-cash and significant items. The directors consider EBITDAI to reflect the core earnings of the consolidated entity.

** Includes a revaluation write-down of $1,746,000 (2017: nil) of property, plant and equipment, and amortisation of customer relationships, leases and licences of $3,164,000 (2017: $876,000).

Dividends

On 29 September 2017, a fully franked dividend of $0.01 per share was paid out of retained profits at 30 June 2017, amounting to $4,349,000.

The Directors have declared a final and fully franked dividend of $0.01 per share, amounting to $5,558,000, payable on 28 September 2018 out of retained profits at 30 June 2018. For the purposes of determining any entitlement to the dividend, the record date has been set as 17 September 2018.

Significant Events

On 6 September 2017 the name of the Company was changed from Skydive the Beach Group Limited to Experience Co Limited.

On 10 October 2017 30,304,000 shares were issued at $0.66 each to institutional investors and on 3 November 2017 1,515,152 shares were issued at $0.66 each, both share issues were to fund the acqusition part of the GBR Helicopters Pty Ltd.

On 13 December 2017, 77,102,361 shares were issued at $0.74 each to institutional investors, and on 29 December 2017, 5,255,901 shares were issued at $0.74 each to retail investors on the basis of 3 shares for every 17 shares held. Both share issues were to fund the acquisitions of Big Cat Green Island Cruises and Tropical Journeys.

Experience Co Limited acquired the following adventure businesses from 1 July 2017 to 30 June 2018:

• 21 July 2017 acquired 100% of the ordinary shares in Byron Bay Ballooning Pty Ltd.

• 18 September 2017 acquired 100% of the ordinary shares in Air Vistas Pty Ltd trading as Wine Country Ballooning.

• 1 November 2017 acquired 100% of the ordinary shares in GBR Helicopters Pty Ltd and GBRH Holdings Pty Ltd.

• 28 November 2017 acquired 100% of the ordinary shares in Blue Ocean Productions Pty Ltd.

• 13 December 2017 acquired 100% of the ordinary shres in J & J Wallace (Projects) Pty Ltd trading as Big Cat Green Island Reef Cruises.

• 19 December 2017 acquired 100% of the ordinary shares in Calypso Reef Charters Pty Ltd and Experience Daintree Pty Ltd trading as Tropical Journeys.

Commentary on the Results

As at 30 June 2018, Experience Co Limited operated 18 skydiving drop zones in Australia and 3 in New Zealand. In Australia, the skydiving drop zones are located across New South Wales, Queensland, Victoria and Western Australia, while the three New Zealand skydiving drop zones are located in Queenstown, Glenorchy and Wanaka.

As at 30 June 2018 in addition to Tandem Skydiving, the Group operated a number of adventure tourism companies, located throughout Australia, predominantly in Far North Queensland. The company offers experiences of white water rafting, hot air ballooning, canyoning, sea kayaking, boat and helicopter scenic tours to the Great Barrier Reef, and personalised tours to the Daintree Rainforest.

A reconciliation between EBITDAI and profit after income tax for the financial year ended 30 June 2018 is included below.

Less: Depreciation, amortisation and impairment Less: Finance costs Profit before tax Income tax expense Net profit for the year after tax Earnings before interest, taxes, depreciation, amortisation and impairment (EBITDAI)	Year ended Year ended 30 June 2018 30 June 2017 $'000 $'000 27,411 20,988 (15,238) (6,165) (1,857) (1,255)
	10,316 13,568 (3,531) (4,086)
	6,785 9,482

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Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited)

ACN: 167 320 470

Appendix 4E - Preliminary Final Report for the year ended 30 June 2018

The EBITDAI for the year ended 30 June 2018 increased by 31% when compared to the year ended 30 June 2017. When comparing the EBITDAI for the 12 months to 30 June 2018 set out below is the number of months trading from major acquisitions year on year:

	30 June 2018	30 June 2017
Raging Thunder Adventures purchased on 31 October 2016.	12 months	8 months
Reef Magic Cruises purchased on 1 May 2017.	12 months	2 months
Byron Bay Ballooning purchased on 21 July 2017.	11.5 months	NIL
Wine Country Ballooning acquired 18 September 2017.	9.5 months	NIL
GBR Helicopters purchased on 01 November 2017.	8 months	NIL
Blue Ocean Productions acquired on 28 November 2017.	7 months	NIL
Big Cat Green Island Reef Cruises purchased on 13 December 2017.	6.5 months	NIL
Tropical Journeys purchased on 19 December 2017.	6 months	NIL
Net Tangible Assets
	30 June 2018	30 June 2017
Net Assets (cents per share)	0.36	0.22
Net Tangible Assets (cents per share)	0.19	0.11

Events After the End of the Period

No matter or event has arisen since 30 June 2018 that has significantly affected the Group’s operations, results or state of affairs.

Preliminary Final Report

The preliminary final report of Experience Co Limited for the year ended 30 June 2018 is attached.

Audit Status

The report is based on accounts that are in the process of being audited. It is not expected that the report is likely to contain an independent audit report that is subject to a modified opinion.

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Anthony Boucaut Managing Director

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Anthony Ritter Chief Executive Officer

28 August 2018

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Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470

Consolidated Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2018

Note Sales revenue 1 Cost of sales 2 Gross profit Other income 1 Administrative and corporate expenses Occupancy expenses Depreciation and amortisation expenses Impairment of property, plant and equipment Marketing, advertising and agents commission expenses Repairs and maintenance expenses Finance costs 2 Other expenses Profit before income tax Tax expense 3 Net profit for the year Other comprehensive income: Items that will not be reclassified subsequently to profit or loss: Revaluation of property, plant and equipment, net of tax Exchange differences on translating foreign operations, net of tax Other comprehensive income for the year Total comprehensive income for the year Earnings per share From continuing operations: Basic earnings per share (cents) 5 Diluted earnings per share (cents) 5 Items that will be reclassified subsequently to profit or loss when specific conditions are met:	2018 2017 $000 $000 135,300 89,566 (79,647) (51,469) Consolidated Group
	55,653 38,097 1,363 1,021 (22,730) (13,330) (3,520) (2,365) (13,492) (6,165) (1,746) - (2,786) (1,858) (553) (573) (1,857) (1,255) (16) (4)
	10,316 13,568 (3,531) (4,086)
	6,785 9,482
	(1,004) - (75) (166)
	(1,079) (166)
	5,706 9,316
	1.34 2.24 1.31 2.18

The accompanying notes form part of these financial statements.

3

Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470 Consolidated Statement of Financial Position for the year ended 30 June 2018

Note ASSETS Current assets Cash and cash equivalents 6 Trade and other receivables 7 Inventories 8 Current tax asset 3 Other assets 9 Total current assets Non-current assets Trade and other receivables 7 Other financial assets 10 Property, plant and equipment 12 Intangible assets 13 Total non-current assets Total assets LIABILITIES Current liabilities Trade and other payables 14 Borrowings 16 Current tax liabilities 3 Provisions 17 Deferred revenue 15 Total current liabilities Non-current liabilities Borrowings 16 Deferred tax liabilities 3 Provisions 17 Total non-current liabilities Total liabilities Net assets EQUITY Issued capital 18 Retained earnings Reserves Total equity	2018 2017 $000 $000 7,171 9,490 8,385 4,340 4,710 2,525 317 - 1,979 3,705 Consolidated Group
	22,562 20,060
	1,803 1,153 1,560 38 121,539 70,370 84,968 47,959
	209,870 119,520
	232,432 139,580
	9,630 6,596 3,305 5,692 - 1,338 2,834 1,490 1,158 891
	16,927 16,007
	32,230 23,932 2,429 4,962 454 183
	35,113 29,077
	52,040 45,084
	180,392 94,496
	168,860 84,321 14,644 12,208 (3,112) (2,033)
	180,392 94,496

The accompanying notes form part of these financial statements.

4

Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470 Consolidated Statement Changes in Equity for the year ended 30 June 2018

Note Consolidated Group Balance at 1 July 2016 Comprehensive income Profit for the year Other comprehensive income for the year Total comprehensive income for the year Transactions with owners, in their capacity as owners, and other transfers Shares issued during the year 18 Capital raising costs Dividends paid during the year 4 Employee share options issued Total transactions with owners and other transfers Balance at 30 June 2017 Balance at 1 July 2017 Comprehensive income Profit for the year Other comprehensive income for the year Total comprehensive income for the year Transactions with owners, in their capacity as owners, and other transfers Shares issued during the year 18 Capital raising costs Deferred tax on capital raising costs Dividends paid during the year 4 Total transactions with owners and other transfers Balance at 30 June 2018	Issued Capital Retained Earnings Asset Revaluation Reserve Common Control Reserve Share Option Reserve Foreign Currency Translation Reserve Total $000 $000 $000 $000 $000 $000 $000 65,231 6,689 2,386 (4,171) 13 (101) 70,047 - 9,482 - - - - 18,963 - - - - - (166) (166)
	- 9,482 - - - (166) 18,797
	20,126 - - - - - 20,126 (1,036) - - - - - (1,036) - (3,963) - - - - (3,963) - - - - 5 - 5
	19,090 (3,963) - - 5 - 15,132
	84,321 12,208 2,386(4,171) 18(267) 94,496
	84,321 12,208 2,386 (4,171) 18 (266) 94,496 - 6,785 - - - - 6,785 - - (1,004) - - (75) (1,079)
	- 6,785 (1,004) - - (75) 5,706
	86,946 - - - - - 86,946 (3,438) - - - - - (3,438) 1,031 - - - - - 1,031 - (4,349) - - - - (4,349)
	84,539 (4,349) - - - - 80,190
	168,860 14,644 1,382 (4,171) 18 (341) 180,392

The accompanying notes form part of these financial statements.

5

Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470 Consolidated Statement of Cash Flows for the year ended 30 June 2018

ACN: 167 320 470 Consolidated Statement of Cash Flows for the year ended 30 June 2018
Note CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers (GST inclusive) Payments to suppliers and employees (GST inclusive) Finance costs Income tax paid Net cash provided by operating activities 20 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment Purchase of other non-current assets Payments for investments in subsidiaries 11 Cash acquired in business acquisitions Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares Capital raising costs Proceeds from borrowings Repayment of borrowings Dividends paid by parent entity Loans to related parties Loan repayments from related parties Net cash provided by financing activities Net decrease in cash held Cash and cash equivalents at beginning of financial year Cash and cash equivalents at end of financial year 6	2018 2017 $000 $000 149,284 89,865 (128,044) (70,524) (1,680) (1,255) (4,718) (5,446) Consolidated Group
	14,842 12,640
	(23,402) (18,754) (1,500) (1,259) (72,448) (31,539) 1,770 845
	(95,580) (50,707)
	80,947 20,126 (3,439) (1,036) 15,601 20,791 (9,690) (1,510) (4,349) (3,963) (951) (127) 300 457
	78,419 34,738
	(2,319) (3,329) 9,490 12,819
	7,171 9,490

The accompanying notes form part of these financial statements.

6

Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470

Notes to the Consolidated Financial Statements for the year ended 30 June 2018

Note 1 Revenue and Other Income

- - - Note 2 Profit for the Year Interest expense on financial liabilities not at fair value through profit or loss: - Unrelated parties - Depreciation and amortisation expense Impairment of property, plant and equipment Note 3 Tax Expense (a) (b) - - - - - - - - - impact of lower tax rates applicable to New Zealand subsidiaries Income tax attributable to entity deductible acquisition costs assessable income received in advance deductible maintenance costs Less: Tax effect of: Over provision of tax from prior years non-allowable items Current tax Deferred tax Over provision of tax from prior years The prima facie tax on profit from ordinary activities before income tax is reconciled to income tax as follows: recognition of deferred tax balances impact of foreign exchange differences Profit before income tax from continuing operations includes the following specific expenses: Cost of sales Prima facie tax payable on profit from ordinary activities before income tax at 30% (2017: 30%) Add: Tax effect of: non-deductible depreciation and amortisation Total interest expense Other finance costs Total finance cost The components of tax (expense) income comprise: Occupancy costs Total revenue other revenue Sales revenue sale of goods Other revenue interest received	2018 2017 $000 $000 135,300 89,566 Consolidated Group
	135,300 89,566
	135 170 1,228 851
	1,363 1,021
	136,663 90,587
	79,647 51,469 1,708 1,074
	1,708 1,074 149 181
	1,857 1,255
	3,520 2,365 13,492 6,165 1,746 - 4,152 4,021 (173) 428 (448) (363)
	3,531 4,086
	3,095 4,070 11 259 34 12 240 32 - 55 - (57)
	3,380 4,371 (448) (685) 813 496 (91) 8 (123) (105)
	3,531 4,086

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Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470 Notes to the Consolidated Financial Statements for the year ended 30 June 2018

Note 4 Dividends

Dividends paid

2018		2017
$000		$000
	4,349		3,963

On 29 September 2017, a fully franked dividend of $0.01 per share was paid out of retained profits at 30 June 2017, amounting to $4,349,000.

The Directors have declared a final and fully franked dividend of $0.01 per share, amounting to $5,558,000, payable on 28 September 2018. For the purposes of determining any entitlement to the dividend, the record date has been set as 17 September 2018.

Note 5 Earnings Per Share (a) (b) Note 6 Cash and Cash Equivalents Note 7 Trade and Other Receivables — — Total non-current trade and other receivables Total current trade and other receivables NON-CURRENT Loan receivable (i) Amounts receivable from related parties director of parent entity Other receivables Amounts receivable from related parties director of parent entity CURRENT Trade receivables Provision for impairment Reconciliation of cash Cash at the end of the financial year as shown in the statement of cash flows is reconciled to items in the statement of financial position as follows: Cash and cash equivalents Basic earnings per share (cents) Diluted earnings per share (cents) Cash at bank and on hand Short-term bank deposits Weighted average number of ordinary shares outstanding during the year used in calculating dilutive EPS Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS Weighted average number of dilutive options outstanding Weighted average number of dilutive converting preference shares on issue Earnings used to calculate basic and diluted EPS	2018 2017 6,785 9,482
	No. No. 506,008,037 423,925,384 10,300,000 10,300,000 - -
	516,308,037 434,225,384
	1.34 2.24 1.31 2.18 2018 2017 $000 $000 7,129 9,464 42 26 Consolidated Group
	7,171 9,490
	7,171 9,490
	7,171 9,490
	5,900 2,917 (25) -
	5,875 2,917 2,210 1,123
	8,085 4,040 300 300
	8,385 4,340
	515 - 1,288 1,153
	1,803 1,153

(i) The loan is unsecured, bears interest at 5% per annum and has a term of 10 years.

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Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470

Notes to the Consolidated Financial Statements for the year ended 30 June 2018

Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470 Notes to the Consolidated Financial Statements for the year ended 30 June 2018
Note 8 Inventories Note 9 Other Assets Note 10 Other Financial Assets — unlisted investments Total unlisted investments Deposit paid for aircraft not delivered at 30 June 2018 Deposit paid for leasehold land and buildings (Stuart Park redevelopment) Other current assets NON-CURRENT Unlisted investments, at cost — shares in other corporations CURRENT Prepayments Deposits paid for business acquisitions not yet completed Raw materials, spares and merchandise At cost: CURRENT	2018 2017 $000 $000 4,710 2,525 Consolidated Group
	877 1,380 - 80 - 1,475 541 541 561 229
	1,979 3,705
	27 38 1,533 -
	1,560 38

Note 11 Interests in Subsidiaries

(a) Information about Principal Subsidiaries

The subsidiaries listed below have share capital consisting solely of ordinary shares or ordinary units which are held directly by the Group. The proportion of ownership interests held equals the voting rights held by Group. Each subsidiary’s principal place of business is also its country of incorporation.

	Principal place of	Ownership	interest
Name of subsidiary	business	2018	2017
Aircraft Maintenance Centre Pty Ltd	Australia	100%	100%
Australia Skydive Pty Ltd	Australia	100%	100%
B & B No 2 Pty Ltd	Australia	100%	100%
Bill & Ben Investments Pty Ltd	Australia	100%	100%
Skydive Holdings Pty Ltd	Australia	100%	100%
Skydive the Beach and Beyond Airlie Beach Pty Ltd	Australia	100%	100%
Skydive the Beach and Beyond BB Pty Ltd	Australia	100%	100%
Skydive the Beach and Beyond Central Coast Pty Ltd	Australia	100%	100%
Skydive the Beach and Beyond Great Ocean Road Pty Ltd	Australia	100%	100%
Skydive the Beach and Beyond Hunter Valley Pty Ltd	Australia	100%	100%
Skydive the Beach and Beyond Melbourne Pty Ltd	Australia	100%	100%
Skydive the Beach and Beyond Newcastle Pty Ltd	Australia	100%	100%
SBB Trading Pty Ltd (formerly known as Skydive the Beach and Beyond Perth Pty Ltd)	Australia	100%	100%
Skydive the Beach and Beyond Sydney Wollongong Pty Ltd	Australia	100%	100%
Skydive the Beach and Beyond Yarra Valley Pty Ltd	Australia	100%	100%
Skydive.com.au Pty Ltd	Australia	100%	100%
STBAUS Pty Ltd	Australia	100%	100%
Skydive International Holdings Pty Ltd	Australia	100%	100%
Skydive Investments Pty Ltd	Australia	100%	100%
Experience Co NZ Holdings Limited (formerly Skydive (New Zealand) Limited)	New Zealand	100%	100%
Skydive Queenstown Limited	New Zealand	100%	100%
Ultimate Adventure Group Ltd (formerly Skydive Glenorchy Limited)	New Zealand	100%	100%
Parachute Adventure Queenstown Limited	New Zealand	100%	100%
Skydive Wanaka Limited	New Zealand	100%	100%
Performance Aviation (New Zealand) Limited	New Zealand	100%	100%
Raging Thunder Pty Ltd	Australia	100%	100%
Fitzroy Island Ferries Pty Ltd	Australia	100%	100%
Fitzroy Island Pty Ltd	Australia	100%	100%
Martheno Pty Ltd	Australia	100%	100%
Raging Thunder Retail Pty Ltd	Australia	100%	100%
White Water Rafting Qld Pty Ltd	Australia	100%	100%
Raging Thunder Balloon Adventures Pty Ltd	Australia	100%	100%
Rescue Training Group Pty Ltd	Australia	100%	100%
ILB Pty Ltd	Australia	100%	100%
Reef Magic Cruises Pty Ltd	Australia	100%	100%
Byron Bay Ballooning Pty Ltd	Australia	100%	0%
Air Vistas Pty Ltd	Australia	100%	0%
GBR Helicopters Pty Ltd	Australia	100%	0%
GBRH Holdings Pty Ltd	Australia	100%	0%
Blue Ocean Productions Pty Ltd	Australia	100%	0%
Calypso Reef Charters Pty Ltd	Australia	100%	0%
Fish for Fish Investments Pty Ltd	Australia	100%	0%

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Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470

Notes to the Consolidated Financial Statements for the year ended 30 June 2018

Note 11 Interests in Subsidiaries (continued)

(b) Acquisition of Controlled Entities

	Principal place of	Ownership	interest
Name of subsidiary	business	2018	2017
Experience Daintree Pty Ltd	Australia	100%	0%
J & J Wallace (Holdings) Pty. Ltd.	Australia	100%	0%
J & J Wallace (Projects) Pty Ltd	Australia	100%	0%
J & J Wallace (Tours) Pty Ltd	Australia	100%	0%
J & J Wallace (Permits) Pty. Ltd.	Australia	100%	0%

During the year ended 30 June 2018, Experience Co. Limited entered into the following acquisitions:

(i) On 21 July 2017, Experience Co Limited acquired Byron Bay Ballooning Pty Ltd, being a company registered and trading within Australia, for the consideration of $800,000.

Fair value of purchase consideration: Cash Assets and liabilities held at acquisition date: - Current assets - Non-current assets - Current liabilities Goodwill and other intangible assets	$000 800
	6 52 (126)
	(68)
	868

(ii) On 18 September 2017 Experience Co Limited acquired Air Vistas Pty Ltd (trading as Wine Country Ballooning), being a company registered and trading in Australia, for the consideration of $350,000.

Fair value of purchase consideration: Cash Assets and liabilities held at acquisition date: - Current assets - Non-current assets - Current liabilities - Non-current liabilities Goodwill and other intangible assets	$000 350
	10 70 - (40)
	40
	310

(iii) On 1 November 2017, Experience Co Limited, acquired GBR Helicopters Pty Ltd and GBRH Holdings Pty Ltd, being two companies registered and trading within Australia, for the consideration of $19,600,000.

Fair value of purchase consideration: Cash Shares issued in Experience Co limited Deferred Consideration Working Capital Adjustment Assets and liabilities held at acquisition date: - Current assets - Non-current assets - Current liabilities - Non-current liabilities Goodwill and other intangible assets	$000 16,600 1,000 2,000 611
	20,211
	3,241 16,487 (2,648) (38)
	17,042
	3,169

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Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470

Notes to the Consolidated Financial Statements for the year ended 30 June 2018

Note 11 Interests in Subsidiaries (continued)

(b) Acquisition of Controlled Entities (continued)

On 28 November 2017 Experience Co Limited acquired Blue Ocean Productions Pty Ltd, a company registered in Australia. Consideration for the acquisition (iv) was $350,000.

		Fair value of purchase consideration:	$000
		Cash	350
			350
		Assets and liabilities held at acquisition date:
		- Non-current assets	25
		- Current and non-current liabilities	-
			25
		Goodwill and other intangible assets	325
(v)	On	13 December 2017, Experience Co Limited acquired J & J Wallace (Projects) Pty Ltd (trading as Big Cat Green Island Reef Cruises), being a company
	registered and trading within Australia, for the consideration of $38,070,000.
		Fair value of purchase consideration:	$000
		Cash	33,070
		Shares issued in Experience Co limited	5,000
		Working Capital Adjustment	858
			38,928
		Assets and liabilities held at acquisition date:
		- Current assets	2,669
		- Non-current assets	10,993
		- Current liabilities	(1,611)
		- Non-current liabilities	-
			12,051
		Goodwill and other intangible assets	26,877
(vi)	On	19 December 2017, Experience Co Limited acquired Calypso Reef Charters Pty Ltd and Experience Daintree Pty Ltd (trading as Tropical Journeys), a
	business trading within Australia, for the consideration of $18,000,000.
		Fair value of purchase consideration:	$000
		Cash	18,000
		Working Capital Adjustment	(201)
			17,799
		Assets and liabilities held at acquisition date:
		- Current assets	1,070
		- Non-current assets	11,999
		- Current liabilities	(1,091)
		- Non-current liabilities	-
			11,978
		Goodwill and other intangible assets	5,821

(vii) In 2018 financial year, Experience Co Limited paid an amount of $1,232,000 to vendors of Reef Magic Cruises Pty Ltd. This payment was a fulfillment of an obligation in accordance with the sale and purchase agreement for Reef Magic Cruises Pty Ltd, which was acquired on 1 May 2017.

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Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470

Notes to the Consolidated Financial Statements for the year ended 30 June 2018

Note 12 Property, Plant and Equipment Total plant and equipment Total property, plant and equipment At cost Accumulated depreciation Vessels: At cost Accumulated depreciation Floating Docks: Office equipment: At cost Accumulated depreciation Accumulated depreciation Motor vehicles: At cost Aircraft: At revalued amounts and cost Accumulated depreciation Leasehold improvements At cost Accumulated amortisation Total land and buildings PLANT AND EQUIPMENT Plant and equipment: At cost Accumulated depreciation Total buildings At cost Accumulated depreciation Total land Buildings at: At cost LAND AND BUILDINGS Freehold land at:	2018 2017 $000 $000 3,781 646 Consolidated Group
	3,781 646
	5,315 3,542 (181) (70)
	5,134 3,473
	8,915 4,119
	11,342 9,647 (3,621) (2,305)
	7,721 7,342
	4,434 1,986 (890) (616)
	3,544 1,370
	64,628 48,773 (2,713) (5,667)
	61,915 43,105
	6,403 4,019 (1,571) (900)
	4,832 3,119
	1,463 1,179 (920) (648)
	543 531
	34,506 9,285 (2,111) (134)
	32,395 9,151
	1,838 1,656 (164) (22)
	1,674 1,633
	112,624 66,251
	121,539 70,370

(a) Movements in Carrying Amounts

Movements in carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year.

Disposals Depreciation expense Transfers between asset classes Balance at 30 June 2018 Transfers between asset classes Balance at 30 June 2017 Acquisitions through business combinations Additions Revaluation decreases Balance at 1 July 2016 Acquisitions through business combinations Additions Disposals Depreciation expense Consolidated Group:	Land Buildings Plant & Equipment Leasehold Improvements Aircraft Motor Vehicles Office Equipment Vessels Floating Docks Total $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 340 835 4,859 675 31,256 1,312 226 - - 39,503 - 2,315 1,735 881 1,810 123 54 8,922 1,655 17,495 306 377 2,081 76 12,744 2,054 408 342 - 18,388 - - (68) - - - - - - (68) - (57) (1,264) (260) (2,705) (370) (157) (113) (22) (4,948) - 2 - (2) - - - - - -
	646 3,473 7,342 1,370 43,105 3,119 531 9,151 1,633 70,370
	950 965 861 642 14,374 482 102 22,235 51 40,662 2,185 808 1,880 1,806 13,948 1,431 182 2,414 131 24,785 - - - - (4,131) - - - - (4,131) - - (3) - - - - - - (3) - (112) (1,316) (274) (5,381) (671) (272) (1,977) (141) (10,144) - - (1,043) - - 471 - 572 - -
	3,781 5,134 7,721 3,544 61,915 4,832 543 32,395 1,674 121,539

12

Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470

Notes to the Consolidated Financial Statements for the year ended 30 June 2018

Note 13 Intangible Assets Cost Net carrying amount Total intangibles Customer relationships and other intangible assets Accumulated amortisation Net carrying amount Leases & Licences Cost Accumulated amortisation Accumulated amortisation and impairment losses Net carrying amount Computer software Cost Accumulated amortisation and impairment losses Net carrying amount Goodwill Cost Accumulated impaired losses Net carrying amount Trademarks Cost	2018 2017 $000 $000 36,301 18,828 - - Consolidated Group
	36,301 18,828
	14,370 9,805 - -
	14,370 9,805
	1,338 1,207 (1,020) (839)
	318 368
	26,976 14,073 (2,552) (1,048)
	24,424 13,025
	10,860 6,131 (1,305) (198)
	9,555 5,933
	84,968 47,959

Consolidated Group:

Consolidated Group:
Assets acquired in business combinations Amortisation charge Closing value at 30 June 2018 Transfers between asset classes Amortisation charge Balance at 30 June 2017 Additions Balance at 1 July 2016 Assets acquired in business combinations	Goodwill Trademarks Computer Software Customer Relationships and other Leases & Licences Total $000 $000 $000 $000 $000 7,911 5,344 322 4,419 - 17,996 10,917 5,428 388 8,317 6,131 31,181 - (967) - 967 - - - - (342) (678) (198) (1,217)
	18,828 9,805 368 13,025 5,933 47,959
	17,473 4,565 - 13,257 4,928 40,223 - - 134 - - 134 - - (184) (1,858) (1,306) (3,348)
	36,301 14,370 318 24,424 9,555 84,968

Note 14 Trade and Other Payables

Note 14 Trade and Other Payables
Note 15 Deferred Revenue Income received in advance CURRENT Unsecured liabilities Trade payables Sundry payables and accrued expenses	2018 2017 $000 $000 4,147 3,390 5,483 3,206 Consolidated Group
	9,630 6,596
	1,158 891

13

Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470 Notes to the Consolidated Financial Statements for the year ended 30 June 2018

Note 16 Borrowings

Note 17 Provisions CURRENT Note 18 Issued Capital (a) — — — — — — — — — At the end of the reporting period 3 November 2017 13 December 2017 29 December 2017 14 December 2017 Capital raising costs (net of deferred tax) At the beginning of the reporting period Shares issued 6 October 2016 20 October 2016 29 May 2017 10 October 2017 555,811,840 (June 2017: 434,877,669) fully paid ordinary shares The company has authorised share capital amounting to 555,811,840 ordinary shares. Ordinary Shares Employee Benefits NON CURRENT Employee Benefits Total non-current borrowings Total borrowings Finance lease liabilities Secured liabilities Bank loans Total current borrowings NON-CURRENT Secured liabilities Bank loans Finance lease liabilities Vendor finance loan CURRENT	2018 2017 $000 $000 263 86 3,042 3,400 - 2,204 3,305 5,692 18,004 15,137 14,226 8,795 32,230 23,932 35,535 29,624 2,834 1,490 454 183 168,860 84,321 2018 2017 2018 2017 $ 000's $ 000's No. No. 84,321 65,231 434,877,669 396,301,350 - 18,982 - 36,504,054 - 644 - 1,238,932 - 500 - 833,333 20,001 - 30,304,000 - 1,000 - 1,515,152 - 57,056 - 77,102,361 - 5,000 - 6,756,757 - 3,889 - 5,255,901 - (2,407) (1,036) - - Consolidated Group Consolidated Group Consolidated Group	2018 2017 $000 $000 263 86 3,042 3,400 - 2,204 Consolidated Group
		3,305 5,692
		18,004 15,137 14,226 8,795
		32,230 23,932
		35,535 29,624
		2,834 1,490
		454 183
		168,860 84,321
	168,860 84,321 555,811,840 434,877,669

Note 19 Share-based Payments

A summary of the movements of all options issued is as follows:

A summary of the movements of all options issued is as follows:
	Consolidated Group
	Number
Opening balance at 1 July 2016	10,300,000
Granted	-
Balance at 30 June 2017	10,300,000
Granted	-
Balance at 30 June 2018	10,300,000
Options exercisable as at 30 June 2018:	10,300,000
Options exercisable as at 30 June 2017:	7,633,332
Weighted average exercise price:	$0.25

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Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470

Notes to the Consolidated Financial Statements for the year ended 30 June 2018

Note 20 Cash Flow Information

Impairment of property, plant and equipment Increase/(decrease) in income taxes payable Increase/(decrease) in deferred taxes payable Increase/(decrease) in provisions Cash flows from operating activities Unrealised foreign currency exchange gains/losses Changes in assets and liabilities, net of the effects of purchase: (Increase)/decrease in trade and other receivables (Increase)/decrease in other current assets (Increase)/decrease in inventories Increase/(decrease) in trade and other payables Reconciliation of Cash Flows from Operating Activities with Profit after Income Tax Profit after income tax Non-cash flows in profit Depreciation and amortisation

2018 2017 $000 $000 6,785 9,482 13,492 6,165 1,746 - (77) (265) (950) (242) 55 (1,510) (453) (812) (1,623) 894 (2,158) (1,724) (2,957) 365 982 287 Consolidated Group

14,842 12,640

Note 21 Operating Segments

Segment information

Identification of reportable segments

The Group has identified its operating segments based on the internal reports that are reviewed and used by the board of directors in assessing performance and in determining the allocation of resources.

The Group's financial performance is examined primarily from an activities perspective and operating segments have therefore been determined on the same basis.

The Group has identified the following reportable operational segments:

• Skydive Operations

• Other Adventure Experiences

• The following is an analysis of the Group's revenue and results by reportable operating segment for the period under review:

• (i) Segment performance

30 June 2018	Skydiving Other Adventure Experiences Intersegment eliminations / unallocated $000 $000 $000	Total $000
Revenue Sales Revenue Inter-segment sales Total sales revenue Other income Total revenue EBITDAI Depreciation Impairment Finance costs Net profit before tax (before shared services costs) Unallocated items: Shared services costs Net profit before tax*	69,279 66,021 - - - -	135,300 -
	69,279 66,021 -	135,300
	238 1,011 114	1,363
	69,517 67,032 114	136,663
	24,787 12,358 - (9,344) (3,779) - (1,746) - - (894) (11) -	37,145 (13,123) (1,746) (905)
	12,803 8,568 -	21,371 (11,055)
		10,316

30 June 2017	Skydiving Other Adventure Experiences Intersegment eliminations / unallocated Total $000 $000 $000 $000
Revenue Sales Revenue Inter-segment sales Total sales revenue Other income Total revenue	78,207 11,359 - 89,566 - - - -
	78,207 11,359 - 89,566
	811 - 210 1,021 - - - -
	811 - 210 1,021

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Experience Co Limited and Controlled Entities (formerly Skydive the Beach Group Limited) ACN: 167 320 470

Notes to the Consolidated Financial Statements for the year ended 30 June 2018

Note 21 Operating Segments (continued)

30 June 2017	Skydiving Other Adventure Experiences Intersegment eliminations / unallocated $000 $000 $000	Total $000
EBITDAI Depreciation Finance costs Net profit before tax (before shared services costs) Unallocated items: Shared services costs Net profit before tax*	27,727 1,709 - (5,246) (727) - (543) (27) -	29,436 (5,973) (570)
	21,938 955 -	22,893 (9,325)
		13,568

Shared services costs are primarily head office costs borne by the group that are not allocated to operating segments as they are deemed costs that can not be accurately allocated. They include head office payroll costs, sales & marketing costs, travel expenses, acquisition costs and advisory fees.

• EBITDAI is a financial measure which is not prescribed by Australian Accounting Standards (“AAS”) and represents the profit under AAS adjusted for specific non-cash and significant items. The directors consider EBITDAI to reflect the core earnings of the consolidated entity.

(ii) (iii)	Segment assets 30 June 2018	Skydiving Other Adventure Experiences Total $000 $000 $000
	Segment assets 30 June 2017	209,019 23,413 232,432
	Segment assets Segment liabilities 30 June 2018	129,716 9,864 139,580
	Segment liabilities 30 June 2017	38,302 13,738 52,040
	Segment liabilities	37,966 7,118 45,084

Identification of geographical segments

Identification of reportable segments

The Group has identified its geographic segments based on the internal reports that are reviewed and used by the board of directors (chief operating decision makers) in assessing performance and in determining the allocation of resources.

The Group is managed primarily on the basis of geographical location. Operating segments are therefore determined on the same basis. The Group has identified two geographical segments, Australia and New Zealand.

The following is an analysis of the Group's revenue and non current assets per geographical segment for the period under review:

(i) (ii)	Segment performance Australia New Zealand Total $000 $000 $000 30 June 2018
	Revenue Sales to external customers 106,207 29,093 135,300 30 June 2017
	Revenue Sales to external customers 62,972 26,594 89,566 Non Current Segment Assets Australia New Zealand Total $000 $000 $000 30 June 2018
	Non Current Segment assets 184,149 25,721 209,870 30 June 2017
	Non Current Segment assets 91,889 27,631 119,520

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