INDOOR SKYDIVE AUSTRALIA GROUP LIMITED

ABN: 39 154 103 607

==> picture [428 x 842] intentionally omitted <==

CONTENT

Chairman’s letter Directors’ Report Remuneration Report (Audited) Auditor’s Independence Declaration Financial Report

Shareholder Information Corporate Directory

04 07 13 22 23 67 70

==> picture [221 x 842] intentionally omitted <==

CHAIRMAN’S LETTER

==> picture [163 x 193] intentionally omitted <==

Ken Gillespie Chairman

Dear Valued Shareholder

I am pleased to present to you the 2015 Annual Report.

This past year has been exciting and successful. We have: confirmed the strength of our operations concept; matured operations at our Penrith facility; and continued our advertised expansion plans with a facility under construction in Queensland and a facility about to commence construction in Western Australia. Our ongoing expansion was made possible by strong shareholder support and the very successful capital raising conducted early in the year. In March 2015, our Penrith Indoor Skydiving Facility celebrated 12 months of operations. This was an important milestone as it enabled us to confirm and fine-tune a number of aspects underpinning our robust business model.

SOME HIGHLIGHTS

Penrith operations were profitable and remained cash flow positive from our initial opening.

Our state of the art vertical wind tunnel met all expectations. It has been proven to be an aerodynamically stable, robust and low maintenance system. This gives great confidence as we expand our facilities and bring the simulation of free fall parachuting in a safe, all weather environment to more centres across Australia.

Group systems and processes have been evolved, tested and proven including throughout high tempo operational periods. Our target market segments; first timers, professional skydivers, education and corporate groups have been proven.

In December we achieved our highest sales in a single month. This exceeded $1 million and was driven by the high utilisation of the Penrith facility during school holidays. As expected, a trend of high utilisation during school holiday periods has been established. We have also built a significant following of professional indoor skydivers and our children’s program, Junior iFLY, is successfully developing the next generation of indoor skydive specialists.

Military utilisation has stabilised and the Australian Defence Force now formally incorporates wind tunnel use its free fall training programs.

In August 2015 47 teams competed in Australia’s first Indoor Skydiving Championship at our Penrith facility. We anticipate this will be the first of many such competitions as indoor skydiving increasingly becomes an Australian sport in its own right.

AUSTRALIAN TUNNEL ROLL OUT

Building on the foundations of the Penrith success, we are continuing to deliver the Australia tunnel roll out

==> picture [337 x 197] intentionally omitted <==

----- Start of picture text -----

Penrith’s indoor skydiving facility
----- End of picture text -----

4 2015 Annual Report |

==> picture [596 x 29] intentionally omitted <==

program. Work on our Gold Coast facility, located within easy walking distance of the heart of Surfers Paradise, is well advanced and will be completed later this year.

Our Perth facility, located 5 kms from the Perth CBD and on the strategic commuter highway between the CBD and the domestic and international airports, is also progressing well. The site has been cleared and the design phase is almost complete. Underground works are due to commence shortly. The Perth facility is on track for completion in mid 2016.

LOOKING FORWARD

The Group continues to identify, and act on, opportunities for additional indoor skydiving facilities across Australia. We do this both in our own right and also through our strategic relationship with the US manufacturing company and tunnel operator SkyVenture. Our relationship with SkyVenture has previously been announced and is governed through our Exclusive Territory Development Agreement. The first development by SkyVenture under this Agreement has commenced early works at Essendon, Victoria.

Meanwhile, ISA Group is continuing to research further growth potential. We are investigating the commercial potential for an Adelaide facility. We are also conducting site feasibility and development discussions are being conducted in relation to further potential sites in Melbourne and Sydney.

While we continue to deliver on our Australian tunnel roll out program, and the potential to expand this program, we are very mindful of commercial opportunities in South East Asia and Hong Kong. We are currently working hard to understand the region and these markets. In the short term we will look to develop appropriate business and operating models, identify potential regional partners and determine options for potential growth into this exciting region.

OUR RESULTS

The ISA Group results are detailed in the Financial Report and I encourage you to read them. They are an excellent result taking into account we have one operational tunnel and two tunnels in the process of development.

Looking forward, we believe:

there will be continued growth of indoor skydiving, as a sport and professional skydiving simulation tool both nationally and internationally;
there are good prospects for additional indoor skydiving facilities throughout Australia and potentially into South East Asia and Hong Kong;
ongoing benefits will accrue from corporate overhead absorption as new tunnels become operational;
Australian sales are necessarily dependent on overall domestic economic prospects;
A weaker Australian dollar adds to imported major equipment costs, however, it supports domestic sales through tourism substitution and higher inbound tourist activity.

We thank you for your ongoing commitment to the success of our company and look forward to continuing to increase shareholder value.

Ken Gillespie Chairman

BUILDING THE DREAM OF FLIGHT Market Analysis will it work here? 1 Finding & securing the right site 2 Securing all the applications 3 Digging the deep foundations 4 Inserting the technical kit 5 Commissioning & Test Flying 6 Customers FLYING 7

| 2015 Annual Report

BOARD OF DIRECTORS

==> picture [546 x 358] intentionally omitted <==

From left to right:

David Murray AO Non-Executive Director

Ken Gillespie AC, DSC, CSM Chairman

Malcolm Thompson

Alternative Director for Stephen Baxter

Danny Hogan MG Director & Chief Operations Officer

Wayne Jones Director & Chief Executive Officer

Stephen Baxter Non-Executive Director

6 2015 Annual Report |

==> picture [297 x 842] intentionally omitted <==

DIRECTORS’ REPORT

In compliance with the provisions of the Corporations Act 2001 ( Corporations Act ), the Directors of Indoor Skydive Australia Group Limited ( ISA Group or the Company ) submit the following report for the Company and its controlled entities for the financial year ended 30 June 2015.

DIRECTORS

The following individuals were Directors of ISA Group at all times during the year and at the date of this Directors’ Report, unless otherwise stated:

Ken Gillespie AC, DSC, CSM Chairman Appointed 18 October 2012

One of Australia’s most distinguished career soldiers, Lieutenant General (retired) Ken Gillespie, AC, DSC, CSM, is the Chairman of ISA Group. He is Chair of the Remuneration & Nomination Committee and a member of the Audit & Risk Committee. Ken is also on the Board of Directors of leading local defence manufacturer, Airbus Asia Pacific Group, and the ASX listed, Senetas Limited. He is also a council member of the Australian Strategic Policy Institute, an internationally recognised and Canberra based think tank. Ken, who served with the Australian Defence Force for over 43 years, was appointed Chief of Army in July 2008, a position he held until his retirement in June 2011. Previously he had served as Land Commander Australia and Vice Chief of the Australian Defence Force.

Wayne Jones

Director & Chief Executive Officer Appointed 4 November 2011

Wayne served for 21 years in the Australian Defence Force and was part of the highly acclaimed Special Air Service Regiment for the last 14 years of his career. Wayne holds various senior instructor qualifications and has been at the forefront of Australian Military Freefall development and training over the past 10 years. He is still involved in the training of special forces troops and he continues to participate in the sport of skydiving at the highest levels. Wayne is a member of the Australian Institute of Company Directors.

Danny Hogan MG

Director & Chief Operations Officer Appointed 4 November 2011

Danny enlisted in the Australian Regular Army in 1991, and in 1997 was selected for further service within the Special Air Service Regiment. He has been recognised and awarded for his actions and leadership during his 21 year military career including the Medal for Gallantry. He was selected and completed a two year military exchange in the USA with two of the USA’s elite Special Forces Commands. While in the USA he gained his freefall parachuting qualifications and he developed a very strong background in the use of vertical wind tunnel simulation training. Danny is a highly qualified senior dive instructor within the Special Air Service Regiment. Danny is a member of the Australian Institute of Company Directors.

Stephen Baxter

Non-Executive Director

Appointed 13 August 2012

Former Regular Army electronics technician turned successful entrepreneur, Steve is the founder of early Internet Provider SE Net and co-founder of telecommunications infrastructure company, Pipe Networks Ltd. In 2008 he moved to the USA and joined Google Inc deploying high speed telecommunication infrastructure, before returning to Australia. He is a director of Vocus Communications Limited and Other Levels Limited. He is the founder of Brisbane based not-for-profit River City Labs - an early stage and start-up coworking space for tech and creative companies. He is a member for the ISA Group Remuneration & Nomination Committee and Chairman of the Audit & Risk Committee.

David Murray AO

Non-Executive Director Appointed 3 February 2014

Former Chief Executive Officer of Commonwealth Bank of Australia and Chairman of the Australian Government Future Fund, David has over 40 years’ experience in banking and financial services. He was appointed an Officer of the Order of Australia in 2007 for services to the finance sector nationally and internationally through strategic leadership and policy development, to education through fostering relations between educational institutions, business and industry, and to the community as a supporter and fundraiser. David is Chairman of the Butterfly Foundation.

8 2015 Annual Report |

==> picture [596 x 29] intentionally omitted <==

Malcolm Thompson

Alternative Director for Stephen Baxter Appointed 13 February 2013

An accountant and governance specialist by training, Malcolm has over 24 years’ experience across technology, telecommunications, R&D and aerospace industries in senior roles, including chief financial officer, company secretary and director roles. He has been instrumental in setting up governance, financial and operational aspects for listed companies and has assisted a local subsidiary of Airbus NV (EPA:EAD) relating to $6B construction and maintenance contracts for advanced military helicopters. Working with Stephen Baxter, he is currently Chief Investment Officer for Transition Level Investments targeting optimisation of angel and start-up investment success. He is also an alternative director for Stephen Baxter for Other Levels Limited.

John Diddams

Former Non-executive Director Appointed 27 July 201 Resigned 3 October 2014

John has over thirty five years of financial and management experience as Chief Financial Officer, Chief Executive Officer and director of both private and public listed companies. Prior to his resignation John was a member of the ISA Group Audit & Risk Committee.

COMPANY SECRETARY

Fiona Yiend

General Counsel & Company Secretary Appointed 16 October 2013

Fiona has over 6 years listed company secretarial experience. She holds a Bachelor of Arts, Bachelor of Laws (Hons), Graduate Diploma in Applied Finance and Investments, Graduate Diploma in International Law and a Graduate Diploma in Applied Corporate Governance. She is also a member of the Australian Corporate Lawyers Association (ACLA).

DIRECTORS’ MEETINGS

The number of Directors’ meetings which Directors were eligible to attend (including meetings of Board Committees) and the number of meetings attended by each Director during the year were:

			Audit and Risk	Audit and Risk	Remuneration and	Remuneration and
	Board		Committee		Nomination Committee
	Eligible to	Attended	Eligible to	Attended	Eligible to	Attended
	Attend		Attend		Attend
Kenneth Gillespie	10	9	2	1	1	1
Wayne Jones	10	10
Danny Hogan	10	10
Stephen Baxter	10	9	2	2	1	1
David Murray	10	10
Malcolm Thompson	1	1
John Diddams	3	3	1	1

| 2015 Annual Report

DIRECTORS’ REPORT Continued

**DIRECTORS’

SHAREHOLDINGS**

The
following
table
sets
out
each
Director’s
relevant
interest
in
shares
and
options
in
shares
of
ISA
Group
as
at the
date
of
this
report.
No
Director
has
any
relevant
interest
in
shares
or
options
in
shares
of
a
related
body corporate
of
ISA
Group
as
at
the
date
of
this
report.

Director		Number of Shares and Nature of Interest
Kenneth Gillespie		Indirect interest in 396,668 shares held by Sector West Pty Ltd ATF Gillespie Family Trust
Wayne Jones		Indirect interest in 16,060,000 shares held by Excalib-air Pty Ltd, indirect interest in 200,000 shares held by Project Flight Pty Ltd ATF Wayne Jones Superannuation Fund, indirect interest in 14,000 shares held by Project Gravity Pty Ltd, indirect interest in 1,575,568 shares and 228,554 Performance Rights held by Project Gravity Pty Ltd ATF Jones Family Trust
Danny Hogan		Indirect interest in 16,060,000 shares held by Excalib-air Pty Ltd, indirect interest in 200,000 shares held by Hogan Superannuation Fund, indirect interest in 1,175,568 shares and 228,554 Performance Rights held by Australian Indoor Skydiving Pty Ltd ATF Hogan Family Trust
Stephen Baxter		Indirect interest in 17,000,001 shares held by Birkdale Holdings (QLD) Pty Ltd
David Murray		Indirect interest in 2,521,667 shares held by Lyndcote Holdings Pty Ltd
Malcolm Thompson		Indirect interest in 400,000 shares held by Lucapac Consulting Pty Ltd

DIVIDENDS

The
Penrith
indoor
skydiving
facility
celebrated
its first
full
year
of
operation
in
March
2015
and
was operational
throughout
the
period.
The
facility, the
most
modern
of
its
type,
performed
very
well during
the
period
and
was
supported
by
each
of the
key
target
market
sectors.
As
expected,
a trend
of
high
utilisation
during
school
holiday periods
has
been
established.

No
dividends
were
declared
during
the
period.

**PRINCIPAL

ACTIVITIES**

The
principal
activities
of
ISA
Group
during
the year
were
the
operation
and
development
of indoor
skydiving
facilities.
The
operational activities
were
focused
on
the
Company’s
first indoor
skydiving
facility
located
at
Penrith
NSW. The
development
activities
focused
on
delivering the
Company’s
Australian
tunnel
roll
out
including the
construction
of
the
Company’s
indoor skydiving
facilities
at
the
Gold
Coast,
Qld
and Perth,
WA
and
the
early
development
stages (including
site
identification)
of
additional
sites
in Australia
and,
potentially,
Asia.

The
development
activities
of
the
Company
have been
focused
on
the
construction
of
our
second indoor
skydiving
facility
at
the
Gold
Coast
and
the planning,
design
and
development
stages
of
our third
facility
in
Perth.
The
Gold
Coast
facility
is expected
to
be
operational
by
the
end
of
2015, while
the
Perth
facility
will
be
operational
in
mid 2016.
Work
also
continues
on
the
early
stages
of development
for
facility
options
in
Adelaide, Melbourne
and
Sydney
and
potentially
other locations
throughout
the
region
including
South East
Asia
and
Hong
Kong.

**REVIEW

OF
OPERATIONS**

ISA
Group
is
currently
focused
on
two
lines
of operation;
firstly
the
operation
of
our
existing indoor
skydiving
facility
at
Penrith
NSW
and secondly
the
continued
development
of
additional indoor
skydiving
facilities
under
the
Australian tunnel
roll
out
plan
and
beyond.

10 2015 Annual Report |

==> picture [596 x 29] intentionally omitted <==

For the year ended 30 June 2015, ISA Group reported earnings before interest, tax, depreciation and amortisation excluding share based payments of $589,536 (2014: ($2,067,584)). As noted in the half year results, share based payments heavily impacted the results with the ISA Group reporting a loss before interest, tax, depreciation and amortisation (including share based payments) of $833,586 (2014: $3,311,336).

ISA Group also reported a net loss after tax of $1,749,988 ($2014: $2,714,016). This is an excellent result taking into account we have one operational facility and two facilities in the process of development. To fully understand our results, please refer to the full financial statements included in this Annual Report.

CHANGES IN THE STATE OF AFFAIRS

There were no significant changes in the state of affairs of the Company during the financial year.

SUBSEQUENT EVENTS

With the exception of performance rights which are discussed in detail in the Remuneration Report, ISA Group did not have any options on issue as at 30 June 2015 (2014: nil).

ENVIRONMENTAL REGULATION

ISA Group is not subject to any significant environment regulation under any law of the Commonwealth or of a State or Territory.

DIRECTORS’ AND OFFICERS’ INSURANCE

During the financial year, ISA Group has paid premiums to insure all Directors and Officers against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of a director or officer of the Company, other than conduct involving a wilful breach of duty in relation to the Company. In accordance with common commercial practice, the insurance policy prohibits disclosure of the nature of the liability insured against and the amount of the premium.

No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the consolidated group, the results of those operations or the state of affairs of the consolidated group in future financial years.

FUTURE DEVELOPMENTS

The Directors and Company Secretary of ISA Group are also party to a deed of access and indemnity.

The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or auditor of the Company or any related body corporate against a liability incurred by such an officer or auditor.

ISA Group has previously announced its intention to continue with the Company’s focus on the Australian tunnel roll-out plan and the initial planning for the development of indoor skydiving facilities in South East Asia and Hong Kong. In the opinion of the Directors, disclosure of any further information regarding business strategies and future development of ISA Group would be unreasonably prejudicial to the Company.

REMUNERATION REPORT (AUDITED)

PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied to the court under section 237 of the Corporations Act 2001 for leave to bring, or intervene in, proceedings on behalf of any entity within ISA Group.

AUDITOR

RSM Bird Cameron Partners continues in office as auditor in accordance with section 327 of the Corporations Act 2001.

The Remuneration Report is set out at page 13 and forms part of this Directors’ Report.

INTERESTS IN ISA GROUP SECURITIES

Details of the ISA Group securities issued during the year and the number of ISA Group securities on issue as at 30 June 2015 are detailed in Note 14 of the Financial Statements and form part of this Directors’ Report.

| 2015 Annual Report

DIRECTORS’ REPORT Continued

**NON-‐AUDIT

SERVICES**

The
Directors,
in
accordance
with
advice
from
the Audit
&
Risk
Committee,
are
satisfied
that
the provision
of
non-‐audit
services
during
the
year
is compatible with the general standard of independence
for
auditors
imposed
by
the Corporations
Act
2001.
The
Directors
are
satisfied that
the
services
disclosed
below
did
not compromise
the
external
auditor’s
independence for
the
following
reasons: - all
non-‐audit
services
are
reviewed
and approved
by
the
Audit
&
Risk
committee prior
to
commencement
to
ensure
they do
not
adversely
affect
the
integrity
and objectivity
of
the
auditor;
and - the
nature
of
the
services
provided
does not
compromise
the
general
principles relating
to
auditor
independence
in accordance
with
APES
110:
Code
of
Ethics for
Professional
Accountants
set
by
the Accounting
Professional
and
Ethical Standards
Board.

all
non-‐audit
services
are
reviewed
and approved
by
the
Audit
&
Risk
committee prior
to
commencement
to
ensure
they do
not
adversely
affect
the
integrity
and objectivity
of
the
auditor;
and

The
fees
paid
or
payable
to
RSM
Bird
Cameron Partners
for
non-‐audit
services
provided
during the
year
ended
30
June
2015
were
$9,840.

**AUDITOR’S

INDEPENDENCE
DECLARATION**

The
Auditor’s
independence
declaration
is
set
out at
page
22
and
forms
part
of
this
Directors’
Report.

**ROUNDING

OF
AMOUNTS**

ISA
Group
is
not
an
entity
to
which
ASIC
class
order 98/100
applies.
Accordingly,
amounts
in
the financial
statements
and
annual
reports
have
been rounded
to
the
nearest
dollar
not
the
nearest thousand
dollars.

**BUY

BACK**

ISA
Group
does
not
currently
have
any
on-‐market buy-‐back
of
shares.

This
Directors’
Report
is
made
in
accordance
with
a
resolution
of
the
directors
made
pursuant
to
section
298(2) of
the
Corporations
Act.

On
behalf
of
the
Board

==> picture [155 x 97] intentionally omitted <==

Ken
Gillespie Chairman 25
August
2015 Sydney

==> picture [142 x 63] intentionally omitted <==

Wayne
Jones Director
&
Chief
Executive
Officer

12 2015 Annual Report |

==> picture [175 x 842] intentionally omitted <==

REMUNERATION REPORT (AUDITED)

REMUNERATION REPORT (Audited)

Dear
Shareholder

I
am
pleased
to
present
ISA
Group’s
remuneration
report
for
the
2015
financial
year
for
which
we
seek
your support.

In
2014
ISA
Group
commenced
a
staged
restructuring
of
our
remuneration
strategy
in
line
with
the
Company’s transition
into
an
operating
entity.
Under
this
restructuring
we
have
been
bringing
fixed
remuneration
to acceptable
market
levels
based
on
our
size,
position
and
operating
structure.
Similarly
we
have
been increasing
the
proportion
of
‘at
risk’
remuneration
and
reducing
our
reliance
on
performance
rights
as
a short/medium
term
retention
tool.

In
this
report
you
will
see
the
results
of
this
staged
approached.
Fixed
remuneration
of
our
executives
has been
brought
closer
to
market
levels.
We
anticipate
all
executives
other
than
the
Founding
Directors,
will
be remunerated
at
an
acceptable
market
level
for
the
2016
financial
year.
We
consider
this
important
to
attract and
then
retain
the
highest
calibre
individuals.
At
the
same
time
“at
risk”
remuneration
has
been
amended
to better
align
shareholder
interests
and
the
Company’s
budget
goals.

You
will
also
see
the
impact
of
share
based
incentives
entered
into
at
the
time
of
initial
employment
set
out
in this
report.
The
main
share
based
incentives
were
entered
into
with
our
Founding
Directors
in
October
2012 prior
to
listing
on
the
ASX.
These
incentives
have
taken
the
form
of
performance
rights
and
were
approved
by shareholders
at
the
2013
Annual
General
Meeting.

The
Performance
Rights
issued
to
the
Founding
Directors
were
separated
into
two
different
tranches.
Each tranche
matured
only
upon
the
successful
completion
of
a
number
of
significant
performance
hurdles
shaped to
establish
and
develop
the
Group.
The
first
tranche
related
to
the
establishment
of
Australia’s
first
indoor skydiving
facility
and
its
initial
operating
performance.
The
second
tranche
was
utilised
to
focus
and
task
the Founding
Directors
to
implement
the
step
change
from
a
single
facility
to
a
multi-‐facility
operation. Performance
hurdles
here
were
focused
on
the
key
milestones
necessary
to
bring
an
additional
facility
into operation.
Where
the
performance
hurdles
are
not
met,
the
performance
rights
lapse
and
the
Founding Directors
receive
no
benefit.
The
Board
considers
this
approach
to
be
an
appropriate
method
to
drive
the outcomes
needed
to
meet
performance
and
growth
expectations
and
increase
shareholder
value.

As
ISA
Group
will
become
a
multi-‐facility
operation
over
the
course
of
the
next
12
months,
the
initial Performance
Rights
issue
to
the
Founding
Directors
will
have
fulfilled
their
purpose.
We
will
look
now
to transition
to
a
longer
term
share
based
incentive
with
lower
levels
of
performance
rights
being
issued.

I
trust
that
the
Company’s
remuneration
strategy
will
receive
your
support.
We
welcome
your
feedback.

Yours
sincerely

==> picture [138 x 86] intentionally omitted <==

Ken
Gillespie Chairman
of
the
Board
and Remuneration
&
Nomination
Committee

14 2015 Annual Report |

==> picture [596 x 29] intentionally omitted <==

Introduction

This
remuneration
report
for
the
year
ended
30 June
2015
( FY2015 ),
which
forms
part
of
the Directors’
Report,
outlines
the
remuneration arrangements
of
ISA
Group
in
accordance
with
the requirements
of
the
Corporations
Act.
The information
in
this
report
has
been
audited.

**Remuneration

Summary**

ISA
Group’s
remuneration
structure
has
been evolving
to
reflect
the
transition
of
the
Company from
its
initial
start-‐up
and
construction
phase
to an
operating
entity
with
an
aggressive
growth strategy.
ISA
Group’s
remuneration
practices
are reflective
of
this
transition
with
the
highlights noted
below:

ISA
Group
has
transitioned
it’s remuneration
practices
from
focusing
on attracting
high
calibre,
experienced employees
to
providing
a
more
traditional mix
of
fixed
and
‘at
risk’
remuneration;
Share
based
incentives
entered
into
initial employment
contracts
are
being completed
and
replaced
with
longer
term share
based
incentives
in
the
form
of performance
rights
more
aligned
to shareholder
interests;
Total
fixed
remuneration
for
Executive Key
Management
Personnel
( KMP ) increased
by
10-‐15%
bringing remuneration
packages
more
in
line
with market
and
reducing
the
reliance
on share
based
incentives.

**Key

Management
Personnel**

This
report
sets
out
the
remuneration
details
of KMP,
which
includes
those
individuals
with authority
and
responsibility
for
planning,
directing and
controlling
the
activities
of
ISA
Group.

ISA
Group
has
defined
its
KMP
to
include
directors (executive
and
non-‐executive)
and
those executives
who
drive
and
are
responsible
for
the principal
business
activities
of
the
Company ( Executives )

The
KMP
for
ISA
Group
during
and
since
the
end
of FY2015
include:

Directors: Ken
Gillespie Chairman Wayne
Jones Executive
Director
& Chief
Executive
Officer Danny
Hogan Executive
Director
& Chief
Operations
Officer Stephen
Baxter Non-‐executive
Director David
Murray Non-‐executive
Director Malcolm
Thompson Alternative
Director John
Diddams Non-‐executive
Director (resigned
3
October
2014)

Executives: Stephen
Burns Chief
Financial
Officer Brett
Sheridan Chief
Marketing
Officer Fiona
Yiend General
Counsel
&

Company
Secretary

**Remuneration

Governance**

Remuneration
&
Nomination
Committee (Committee): The
role
of
the
Committee
is
to assist
and
advise
the
Board
on
matters
relating
to the
appointment
and
remuneration
of
directors, Executives
and
where
appropriate,
other employees
of
ISA
Group.
The
Committee
operates under
the
Remuneration
&
Nomination Committee
Charter
that
is
available
on
the
ISA Group
website:
www.indoorskydive.com.au.

The
Committee
consists
of
Ken
Gillespie
who
is
an independent
non-‐executive
and
chair
of
the Committee
and
Stephen
Baxter
who
is
not
an independent
non-‐executive.

Remuneration
Consultants: As
appropriate
ISA Group
has
engaged
independent
external remuneration
consultants
to
provide
advice
and assistance
in
relation
to
ISA
Group’s
remuneration practices.
In
the
2014
financial
year
ISA
Group engaged
Windrose
Consulting
to
provide
advice, benchmarking
and
recommendations
in
relation
to executive
remuneration
(including
the
Founding Directors).
Based
on
the
recommendations
of
the Windrose
Consulting
report,
ISA
Group
has implemented
a
staged
remuneration
strategy
to transition
the
Company’s
remuneration
practices to
include
a
higher
percentage
of
‘at
risk’ remuneration
and
align
fixed
remuneration
with market
levels.

| 2015 Annual Report

REMUNERATION REPORT (Audited) Continued

As
the
strategy
based
off
the
Windrose
Consulting report
spans
a
number
of
years,
ISA
Group
did
not consider
it
appropriate
to
engage
further remuneration
consultants
during
FY2015.

2014
Annual
General
Meeting
(AGM ) : At
the Company’s
AGM
in
November
2014,
78.05%
of votes
received
were
in
favour
of
adopting
the remuneration
report.

Hedging
of
Remuneration: In
accordance
with
the provisions
of
the
Corporations
Act,
KMP
and
their closely
related
parties
are
prohibited
from
hedging any
element
of
their
remuneration
that
is unvested
(due
to
time
or
other
conditions)
or
is vested
but
subject
to
restrictions
on
disposal.

**Director

Remuneration**

Remuneration
Policy
and
Structure: ISA
Group’s non-‐executive
director
remuneration
policy
is
to provide
fair
remuneration
that
is
sufficient
to attract
and
retain
non-‐executive
Directors
with
the experience,
knowledge,
skills
and
judgment
to steward
the
Company’s
success.

Non-‐executive
Directors
are
paid
fees
for
their services
to
the
Company.
Non-‐executive
director fees
consist
of
base
fees
and
fees
for
membership on
board
committees.

To
preserve
impartiality,
non-‐executive
Directors do
not
receive
incentive
or
performance
based remuneration,
nor
are
they
entitled
to
retirement or
termination
benefits.

Non-‐executive
Director
Fees: Actual
fees
paid
to non-‐executive
Directors
in
FY2015
totalled $218,850
which
is
significantly
less
than
the
prior period
due
to
the
change
in
board
composition following
the
resignation
of
John
Diddams
and
the performance
of
services
by
management
which were
previously
provided
by
John
on
a
consultancy basis.

There
was
no
increase
in
the
fees
paid
to
non-‐ executive
Directors
in
FY2015.

Executive
Director
Remuneration: The
Founding Directors
receive
a
mix
of
fixed
and
variable remuneration
which
is
determined
on
the
same basis
as
the
executive
remuneration.
Please
see the
executive
remuneration
section
for
details
of the
Founding
Directors’
remuneration.

**Executive

Remuneration**

Remuneration
Policy
and
Structure: Executive remunerations
consists
of
fixed
remuneration
and variable
remuneration.

Fixed
remuneration
is
comprised
of
cash
salary and
superannuation and
other
limited
non-‐ monetary
benefits.
The
levels
are
set
to
attract and
retain
qualified,
skilled
and
experienced executives
and
are
determined
based
on comparable
market
data.

Variable
(or
‘at
risk’)
remuneration
is
comprised
of a
short
term
incentive
( STI )
and
a
long
term incentive
( LTI ).
Incentives
are
set
to
reward executives
for
achievement
of
financial, operational
and
strategic
objectives,
and
are designed
to
align
executive
interests
with shareholder
interests.

In
2013
ISA
Group
conducted
a
review
of
executive remuneration
in
relation
to
a
comparator
group
of ASX
listed
companies
of
comparable
operational scope
and
size
to
ISA
Group.
This
review
indicated that
ISA
Group’s
remuneration
levels
were
below market
and
needed
to
be
adjusted
to
remain effective
in
retaining
and
motivating
key employees.
Following
this
review
ISA
Group implemented
a
staged
remuneration
strategy
to bring
its
remuneration
structure
more
in
line
with its
comparator
group.
Details
of
the
changes
are set
out
below.

Remuneration
Mix: Variable
remuneration
for Executive
KMP
is
structured
with
a
mix
of
STI
and LTI
incentives
calculated
based
on
a
percentage
of base
salary.
The
percentage
varies
between Executives
and
is
determined
based
on
the
extent to
which
they
are
in
a
position
to
directly
influence Company
performance.

For
example:

==> picture [201 x 126] intentionally omitted <==

----- Start of picture text -----

Remunerapon
Mix
Base
Salary
Max
STI
Max
LTI
----- End of picture text -----

based
on
achieving
maximum
amount
of
STI
and LTI.

16 2015 Annual Report |

==> picture [596 x 29] intentionally omitted <==

Fixed
Remuneration: The
review
of
remuneration undertaken
in
2013
established
that
ISA
Group’s fixed
remuneration
was
below
market
levels.
As
a result
ISA
Group
undertook
to
progressively increase
Executive
fixed
remuneration
to
bring
it more
into
line
with
the
practices
of
the
Company’s comparator
group.
At
the
same
time
reliance
on share
based
remuneration
is
being
reduced
and longer
term
performance
hurdles
are
being implemented.
In
accordance
with
this
strategy
in FY2015
the
fixed
remuneration
of
Executive
KMP was
increased
by
between
10-‐15%.

Short
Term
Incentive
Plan
(STI
Plan): The
key features
of
ISA
Group’s
STI
Plan
are
outlined below:

From of Grant Performance Period Maximum Award Performance Measures	Cash payment 12 months (annual) Each Executive may earn up to a pre-determined fixed amount. The maximum award varies between Executives and is dependent upon role and responsibilities. The STI award paid depends on the extent to which Executives meet pre-determined targets (KPIs). The KPIs are set following finalisation of the Company’s budget and strategic objectives for the new financial year. The KPIs for FY2015 comprised Company Revenue and Company EBITDA.
Performance Assessment	Executive performance is assessed following determination of Company annual results for the preceding financial year and is subject to the Board taking into account qualitative matters.

Termination An
Executive
must
be
an employee
and
not servicing
out
a
notice period
when
the payment
of
an
STI
is made.

For
FY2015,
the
STI
Plan
KPIs
were
not
met. Accordingly
all
Executives
forfeited
100%
of
their STI
award.

Long
Term
Incentive
Plan
(LTI
Plan): At
the
time of
employing
each
Executive,
ISA
Group
agreed
to provide
a
pre-‐determined
amount
of
performance rights
subject
to
certain
performance
hurdles being
met.
For
all
Executives
other
than
the Founding
Directors
the
performance
hurdles related
to
continuity
of
performance.
The
final award
under
these
agreements
relates
to
the FY2015
year
and
are
detailed
below.

For
the
Founding
Directors
the
performance hurdles
are
milestone
based
related
to
establishing the
Company’s
initial
indoor
skydiving
facility
and then
transitioning
the
Company
into
a
multi-‐facility operation.
The
Company
anticipates
that
the
final awards
under
the
performance
rights
entered
into with
the
Founding
Directors
will
occur
in
FY2016.

The
key
driver
of
the
agreements
to
provide performance
rights
under
employment agreements
was
to
compensate
for
lower
than market
fixed
remuneration
and
to
provide
the Company
with
stability
via
the
retention
of
key employees
during
the
Company’s
establishment phases.
As
the
Company
has
now
commenced operations
and,
during
the
course
of
the
next financial
year,
will
become
a
multi-‐facility operation
the
LTI
Plan
going
forward
has performance
hurdles
of
longer
duration
and
lower performance
rights
awards.

| 2015 Annual Report 17

REMUNERATION REPORT (Audited) Continued

The
key
features
of
the
LTI
Plan
are
outlined
below:

Form of Grant	Performance Rights are granted for no consideration and, if the performance hurdles are satisfied vest. On vesting the Performance Rights may be exercised and entitle the Executive to one share in the Company for each Performance Right exercised.
Vesting Date	Upon expiry of the performance period
Performance Period	From employment to 30 June 2015
Performance Measure	Continuous service to 30 June 2015
Termination	If an executive ceases employment for any reason the Performance Rights will not vest and will lapse.

**Remuneration

Outcomes
for
FY2015**

This
section
provides
details
of
the
remuneration
of
KMP
for
FY2015
and
a
summary
of
the
key
financial
results for
ISA
Group
since
its
establishment.

ISA
Group’s
Financial
Performance: The
table
below
sets
out
ISA
Group’s
earnings
and
movements
in shareholder
wealth
since
establishment.

	2012	2013	2014	2015
Revenue	-	-	1,212,643	6,431,444
Net Profit/Loss after Tax	(206,116)	(914,571)	(2,714,016)	(1,749,988)
Share price at 30 June	*	0.43	0.68	0.45

ISA
Group
listed
on
the
ASX
on
18
January

18 2015 Annual Report |

==> picture [596 x 29] intentionally omitted <==

FY2015
Remuneration
Details The
tables
in
this
section
detail
the
remuneration
received
by
KMP
during FY2015.
This
information
is
disclosed
in
accordance
with
the
Corporations
Act
and
the
Australian
Accounting Standards.

Directors

The
fees
and
remuneration
received
by
non-‐executive
Directors
in
FY2015
are
set
out
below,
including
a comparison
with
FY2014.
The
amounts
received
by
the
Founding
Directors
is
included
in
the
information concerning
Executives.

	Financial Year	Salary and Fees	Bonus	Share based payments	Total
Kenneth Gillespie	2015	75,000	-	-	75,000
	2014	75,000	-	-	75,000
Stephen Baxter	2015	45,000	-	-	45,000
	2014	45,000	-	-	45,000
David Murray	2015	30,000	-	-	30,000
	2014	12,500	-	-	12,500
Malcolm Thompson*	2015	-	-	-	-
	2014	-	-	-
John Diddams**	2015	23,750	-	45,100	68,850
	2014	95,000	-	107,052	202,052

As
an
alternative
director
Malcolm
Thompson
does
not
receive
any
fees
or
remuneration
from
ISA
Group. **
John
Diddams
resigned
as
a
director
on
3
October
During
the
2014
financial
year
John
provided financial
advisory
and
consulting
services
and
was
company
secretary
to
16
October
During
the
2015 financial
year
John
continued
to
provide
financial
advisory
and
consulting
services
up
to
his
resignation.
The fees
payable
for
these
services
are
in
addition
to
directors
fees
and
are
included
in
the
table
above.

| 2015 Annual Report 19

REMUNERATION REPORT (Audited) Continued

Executives

The
remuneration
received
by
Executives
in
FY2015
is
set
out
below,
including
a
comparison
with
FY2014.

		Short Term Benefits	Short Term Benefits	Short Term Benefits	Post Employment Benefits	Long Term Benefits	Other	Share Based Payments
KMP	Year	Salary $	STI $	Non Mone- tary $	Super- annuation $	Long Service Leave $	Term- ination $	Rights $	Total $
Wayne Jones CEO	2015 2014	189,465 165,000	- 20,000	8,151 -	18,000 16,956	- -	- -	445,240 493,259	660,856 695,215
Danny Hogan COO	2015 2014	189,465 165,000	- 20,000	8,887 -	18,000 16,956	- -	- -	445,240 493,259	661,592 695,215
Stephen Burns CFO	2015	145,961	-	-	13,866	-	-	39,950	199,777
	2014	-	-	-	-	-	-	-	-
Brett Sheridan CMO	2015 2014	164,827 150,000	- -	3,721 -	15,659 13,875	- -	- -	- 105,300	184,207 272,118
Fiona Yiend GC/CS	2015 2014	164,827 110,337	- -	- -	15,659 10,278	- -	- -	57,392 -	237,878 120,615

Performance rights holdings of KMP

Non-‐executive
Directors
do
not
hold
performance
rights.
Details
of
the
performance
rights
holdings
of
other KMP
are
set
out
below:

30 June 2014	Balance at 1 July 2014	Granted as remuneration	Rights exercised	Balance at 30 June 2015
Wayne Jones	0	1,175,568	1,175,568	0
Danny Hogan	0	1,175,568	1,175,568	0
Brett Sheridan	0	135,000	0	135,000
Stephen Burns	0	0	0	0
Fiona Yiend	0	85,000	0	85,000
John Diddams	0	260,000	260,000	0

20 2015 Annual Report |

==> picture [596 x 29] intentionally omitted <==

Shareholdings of KMP

The
shareholding
of
the
Directors
including
Founding
Directors
is
set
out
on
page
10
of
the
Directors’
Report. The
holdings
of
the
remaining
KMP
are
as
follows:

Employee	Role
Brett Sheridan	Chief Marketing Officer	415,000
Stephen Burns	Chief Financial Officer	210,000
Fiona Yiend	General Counsel & Company Secretary	92,555

STI Outcomes

Key
performance
Indicators
are
set
at
the
commencement
of
each
financial
year
and
are
objective
and measurable.
Following
a
review
of
performance
for
FY2015
it
was
determined
that
the
KPIs
were
not
met. Each
Executive
forfeited
100%
of
the
STI
for
FY2015.

LTI Outcomes

Details
of
the
Performance
Rights
holdings
of
KMP
at
30
June
2015
are
set
out
in
the
table
above.
Since
30 June
2015,
performance
rights
have
been
issued
to,
and
exercised
by
senior
managers
including
KMP.
On
13 July
2015,
435,000
shares
were
issued
in
relation
to
vested
and
exercised
performance
rights.
Also
on
13
July 2015,
1,158,457
Performance
Rights
were
issued
to
senior
managers
including
KMP
under
the
Indoor
Skydive Australia
Group
Limited
Performance
Rights
Plan
as
part
of
ISA
Group’s
long
term
incentive
program.

**Employment

Agreements**

The
following
key
terms
are
contained
in
employment
agreements
for
the
Executives
including
the
Founding Directors:

Duration of Agreement	All		From employment for no fixed term
Period of notice required to terminate agreement (by the relevant KMP)	Founding Directors Chief Financial Officer, Chief Marketing Officer and General Counsel & Company Secretary		6 Months 6 weeks
Termination Payments	Founding Directors Chief Financial Officer Chief Marketing Officer and General Counsel & Company Secretary		6 months’ notice for termination by Employer and legislative entitlements on redundancy. 6 weeks’ notice for termination by Employer and legislative entitlements on redundancy. 6 weeks’ notice for termination by Employer and 6 months on redundancy.

Termination
payments
are
calculated
based
on
the
total
fixed
remuneration
at
the
date
of
termination.
No payment
is
payable
in
the
event
of
summary
dismissal.

**Related

party
Transaction**

No
related
party
transactions
were
entered
into
with
KMP
during
FY2015.

| 2015 Annual Report

AUDITOR’S INDEPENDENCE DECLARATION

==> picture [501 x 708] intentionally omitted <==

22 2015 Annual Report |

FINANCIAL REPORT

==> picture [297 x 842] intentionally omitted <==

CONSOLIDATED STATEMENT

of Profit or Loss and other Comprehensive Income For the year ended 30 June 2015

	Note	Consolidated Group	Consolidated Group
Revenue		2015 $	2014 $
Sales revenue	3	6,431,444	1,212,643
Interest income		137,763	106,028
Foreign exchange fair value gain		19,358	-
Total revenue		6,588,565	1,318,671
Expenses
Depreciation and amortisation		888,115	540,831
Cost of sales		1,316,002	358,003
Administration expenses		374,739	199,485
Accounting and audit fees		76,690	73,307
Professional fees		66,088	295,193
Legal fees		3,920	43,247
Share registry and ASX fees		87,425	75,406
Advertising and marketing expense		447,501	251,352
Insurance		116,032	99,347
Occupancy expenses		199,927	90,298
Employee expenses		3,000,696	1,517,224
Directors fees		158,750	167,500
Share based payments	18	1,423,122	1,243,779
Foreign exchange fair value loss		-	121,687
Finance costs		244,629	253,513
Travel and entertainment		151,259	94,206
Total expenses		8,554,895	5,424,378
Loss before income tax		(1,966,330)	(4,105,707)
Income tax benefit	4	216,342	1,391,691
Net loss for the year		(1,749,988)	(2,714,016)
Other comprehensive income
Other comprehensive income for the year		-	-
Total comprehensive loss for the year		(1,749,988)	(2,714,016)
Earnings per share
From continuing operations:
– basic earnings per share (cents)	22	(1.63)	(3.45)
– diluted earnings per share (cents)	22	(1.63)	(3.45)
The accompanying notes form part of these financial statements.

24 2015 Annual Report |

of Financial Position As at 30 June 2015

CONSOLIDATED STATEMENT

Note Assets *Current Assets* Cash and cash equivalents 5 Term deposits Trade receivables and other assets 6 *Total Current Assets* *Non-Current Assets* Deferred tax asset 4 Property, plant and equipment 7 Intangible asset 9 *Total Non-Current Assets* Total Assets Liabilities *Current Liabilities* Trade and other payables 10 Provisions 11 Deferred revenue 12 Borrowings 13 *Total Current Liabilities* *Non-Current Liabilities* Provision for site restoration 1(r)(ii) *Total Non-Current Liabilities* Total Liabilities Net Assets EQUITY Issued capital 14 Share based payments reserve 18 Accumulated losses Total Equity		Consolidated Group 2015 2014 $ $ 4,321,619 1,117,249 1,325,556 300,278 826,165 323,320
		6,473,340 1,740,847
		1,608,033 1,391,691 23,881,098 17,227,529 710,630 1,184,384
		26,199,761 19,803,604
		32,673,101 21,544,451
		2,042,848 1,149,006 109,683 65,187 1,280,530 905,497 - 1,500,000
		3,433,061 3,619,690
		- 2,197,897
		- 2,197,897
		3,433,061 5,817,587
		29,240,040 15,726,864
		33,639,681 18,467,998 1,185,050 1,093,569 (5,584,691) (3,834,703)
		29,240,040 15,726,864

The
accompanying
notes
form
part
of
these
financial
statements

| 2015 Annual Report 25

CONSOLIDATED STATEMENT

of Changes in Equity For the year ended 30 June 2015

Consolidated Group	Issued Capital	Share based payments reserve	Accumulated losses	Total
	$	$	$	$
Balance at 1 July 2014	18,467,998 1,093,569 (3,834,703) 15,726,864 15,785,388 - - 15,785,388 (613,705) - - (613,705) - 91,481 - 91,481
Shares issued during the year
Share issue costs
Employee share based payment performance rights
Loss for the year	-	-	(1,749,988)	(1,749,988)
Balance at 30 June 2015	33,639,681	1,185,050	(5,584,691)	29,240,040

Balance at 1 July 2013	6,974,490 - (1,120,687) 5,853,803
Shares issued during the year	12,071,083	-	-	12,071,083
Share issue costs	(577,575)	-	-	(577,575)
Employee share based payment performance rights	-	1,093,569	-	1,093,569
Loss for the year	-	-	(2,714,016)	(2,714,016)
Balance at 30 June 2014	18,467,998	1,093,569	(3,834,703)	15,726,864

The
accompanying
notes
form
part
of
these
financial
statements.

26 2015 Annual Report |

of Cash Flows For the year ended 30 June 2015

CONSOLIDATED STATEMENT

Note Cash Flows From Operating Activities Receipts from customers Payments to suppliers and employees Finance costs Interest received Net cash inflows / (outflows) from operating activities 16 Cash Flows From Investing Activities Purchase of property, plant and equipment Purchases of foreign exchange contracts Deposits for tunnel equipment Purchase of term deposits Net cash inflows / (outflows) from investing activities Cash Flows From Financing Activities Proceeds from issue of shares Repayment of convertible note 13 Share issue costs Net cash inflows / (outflows) from financing activities Net increase/(decrease) in cash held Cash and cash equivalents at beginning of financial year Effects of exchange rate changes Cash and cash equivalents at end of financial year 5	Consolidated Group 2015 $ 2014 $ 7,037,772 2,277,161 (6,207,107) (2,783,112) (270,943) (182,262) 123,513 106,028
	683,235 (582,185)
	(8,767,648) (11,657,638) (88,499) (96,764) - (806,994) (1,025,278) (300,278)
	(9,881,425) (12,861,674)
	14,453,746 10,416,183 (1,500,000) (500,000) (613,705) (577,576)
	12,340,041 9,338,607
	3,141,851 (4,105,252) 1,117,249 5,222,501 62,519 -
	4,321,619 1,117,249

The
accompanying
notes
form
part
of
these
financial
statements.

| 2015 Annual Report 27

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

These
consolidated
financial
statements
and
notes
represent
those
of
Indoor
Skydive
Australia
Group Limited
and
Controlled
Entities
(the Consolidated
Group or Group ).

The
separate
financial
statements
of
the
parent
entity,
Indoor
Skydive
Australia
Group
Limited
have
not been
presented
within
this
financial
report
as
permitted
by
the Corporations
Act
2001 .

The
financial
statements
were
authorised
for
issue
on
25
August
2015
by
the
Directors
of
the
Company.

**NOTE

1:
SUMMARY
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
and
the Corporations
Act 2001 .
The
Group
is
a
for-‐profit
entity
for
financial
reporting
purposes
under
Australian
Accounting Standards.

Australian
Accounting
Standards
set
out
accounting
policies
that
the
Australian
Accounting
Standards Board
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
International
Accounting
Standards
Board.

Material
accounting
policies
adopted
in
the preparation
of
these
financial
statements
are
presented
below
and
have
been
consistently
applied unless
stated
otherwise.

Except
for
cash
flow
information,
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.

**a. Principles

of
Consolidation**

The
consolidated
financial
statements
incorporate
the
assets,
liabilities
and
results
of
entities controlled
by
Indoor
Skydive
Australia
Group
Limited
at
the
end
of
the
reporting
period.
A controlled
entity
is
any
entity
over
which
Indoor
Skydive
Australia
Group
Limited
has
the
ability and
right
to
govern
the
financial
and
operating
policies
so
as
to
obtain
benefits
from
the
entity’s activities.

Where
controlled
entities
have
entered
or
left
the
Group
during
the
year,
the
financial performance
of
those
entities
is
included
only
for
the
period
of
the
year
that
they
were controlled.
A
list
of
controlled
entities
is
contained
in
Note
8
to
the
financial
statements.

In
preparing
the
consolidated
financial
statements,
all
intragroup
balances
and
transactions between
entities
in
the
consolidated
group
have
been
eliminated
in
full
on
consolidation.
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
statements
showing
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.

28 2015 Annual Report |

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

1:
SUMMARY
OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT)**

_**Business

Combinations**_

Business
combinations
occur
where
an
acquirer
obtains
control
over
one
or
more
businesses.

A
business
combination
is
accounted
for
by
applying
the
acquisition
method,
unless
it
is
a combination
involving
entities
or
businesses
under
common
control.
The
business
combination will
be
accounted
for
from
the
date
that
control
is
attained,
whereby
the
fair
value
of
the identifiable
assets
acquired
and
liabilities
(including
contingent
liabilities)
assumed
is
recognised (subject
to
certain
limited
exemptions).

When
measuring
the
consideration
transferred
in
the
business
combination,
any
asset
or
liability resulting
from
a
contingent
consideration
arrangement
is
also
included.
Subsequent
to
initial recognition,
contingent
consideration
classified
as
equity
is
not
remeasured
and
its
subsequent settlement
is
accounted
for
within
equity.
Contingent
consideration
classified
as
an
asset
or liability
is
remeasured
in
each
reporting
period
to
fair
value,
recognising
any
change
to
fair
value in
profit
or
loss,
unless
the
change
in
value
can
be
identified
as
existing
at
acquisition
date.

All
transaction
costs
incurred
in
relation
to
business
combinations,
other
than
those
associated
with the
issue
of
a
financial
instrument,
are
recognised
as
expenses
in
profit
or
loss
when
incurred.

The
acquisition
of
a
business
may
result
in
the
recognition
of
goodwill
or
a
gain
from
a
bargain
purchase.

Goodwill

Goodwill
is
carried
at
cost
less
any
accumulated
impairment
losses.
Goodwill
is
calculated
as
the excess
of
the
sum
of:

(i) the
consideration
transferred;

(ii) any
non-‐controlling
interest
(determined
under
either
the
full
goodwill
or proportionate
interest
method);
and

(iii) the
acquisition
date
fair
value
of
any
previously
held
equity
interest, over
the
acquisition
date
fair
value
of
net
identifiable
assets
acquired.

The
acquisition
date
fair
value
of
the
consideration
transferred
for
a
business
combination
plus the
acquisition
date
fair
value
of
any
previously
held
equity
interest
shall
form
the
cost
of
the investment
in
the
separate
financial
statements.

Fair
value
remeasurements
in
any
pre-‐existing
equity
holdings
are
recognised
in
profit
or
loss
in the
period
in
which
they
arise.
Where
changes
in
the
value
of
such
equity
holdings
had
previously been
recognised
in
other
comprehensive
income,
such
amounts
are
recycled
to
profit
or
loss.

The
amount
of
goodwill
recognised
on
acquisition
of
each
subsidiary
in
which
the
Group
holds less
than
a
100%
interest
will
depend
on
the
method
adopted
in
measuring
the
non-‐controlling interest.
The
Group
can
elect
in
most
circumstances
to
measure
the
non-‐controlling
interest
in the
acquiree
either
at
fair
value (full
goodwill
method) or
at
the
non-‐controlling
interest's proportionate
share
of
the
subsidiary's
identifiable
net
assets (proportionate
interest
method) .
In such
circumstances,
the
Group
determines
which
method
to
adopt
for
each
acquisition
and
this
is stated
in
the
respective
notes
to
these
financial
statements
disclosing
the
business
combination.

Under
the
full
goodwill
method,
the
fair
value
of
the
non-‐controlling
interests
is
determined using
valuation
techniques
which
make
the
maximum
use
of
market
information
where
available. Under
this
method,
goodwill
attributable
to
the
non-‐controlling
interests
is
recognised
in
the consolidated
financial
statements.

| 2015 Annual Report 29

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

1:
SUMMARY
OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT)**

Goodwill
on
acquisition
of
subsidiaries
is
included
in
intangible
assets.
Goodwill
on
acquisition
of associates
is
included
in
investments
in
associates.

Goodwill
is
tested
for
impairment
annually
and
is
allocated
to
the
Group's
cash-‐generating
units or
groups
of
cash-‐generating
units,
representing
the
lowest
level
at
which
goodwill
is
monitored being
not
larger
than
an
operating
segment.
Gains
and
losses
on
the
disposal
of
an
entity
include the
carrying
amount
of
goodwill
related
to
the
entity
disposed
of.

Changes
in
the
ownership
interests
in
a
subsidiary
that
do
not
result
in
a
loss
of
control
are accounted
for
as
equity
transactions
and
do
not
affect
the
carrying
amounts
of
goodwill.

**b. Income

Tax**

The
income
tax
expense/(benefit)
for
the
year
comprises
current
income
tax
expense/(benefit) and
deferred
tax
expense/(benefit).

Current
income
tax
expense
charged
to
profit
or
loss
is
the
tax
payable
on
taxable
income. Current
tax
liabilities/(assets)
are
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
as
unused
tax
losses.

Current
and
deferred
income
tax
expense/(benefit)
is
charged
or
credited
outside
profit
or
loss when
the
tax
relates
to
items
that
are
recognised
outside
profit
or
loss.

Except
for
business
combinations,
no
deferred
income
tax
is
recognised
from
the
initial recognition
of
an
asset
or
liability,
where
there
is
no
effect
on
accounting
or
taxable
profit
or
loss.

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
and
their
measurement
also
reflects
the manner
in
which
management
expects
to
recover
or
settle
the
carrying
amount
of
the
related asset
or
liability.
With
respect
to
non-‐depreciable
items
of
property,
plant
and
equipment measured
at
fair
value
and
items
of
investment
property
measured
at
fair
value,
the
related deferred
tax
liability
or
deferred
tax
asset
is
measured
on
the
basis
that
the
carrying
amount
of the
asset
will
be
recovered
entirely
through
sale.

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.

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)
a
legally enforceable
right
of
set-‐off
exists;
and
(b)
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.

30 2015 Annual Report |

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

1:
SUMMARY
OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT)**

_**Tax

Consolidation
-‐
Australia**_

The
Company
and
its
wholly-‐owned
Australian
resident
entities
have
formed
a
tax
consolidated group
with
effect
from
1
November
2011
and
will
therefore
be
taxed
as
a
single
entity
from
that date.
The
Company
is
the
head
entity
within
the
tax-‐consolidated
group.

Current
tax
expense/income,
deferred
tax
liabilities
and
deferred
tax
assets
arising
from temporary
differences
of
the
members
of
the
tax-‐consolidated
group
are
recognised
in
the separate
financial
statements
of
the
members
of
the
tax-‐consolidated
group
using
a
modified stand-‐alone
tax
allocation
methodology.

Any
current
tax
liabilities
(or
assets)
and
deferred
tax
assets
arising
from
unused
tax
losses
of
the controlled
entities
are
assumed
by
the
head
entity
in
the
tax-‐consolidated
group
and
are recognised
as
amounts
payable
(receivable)
to
(from)
other
entities
in
the
tax-‐consolidated
group in
conjunction
with
any
tax
funding
arrangements.

The
Company
recognises
deferred
tax
assets
arising
from
unused
tax
losses
of
the
tax-‐ consolidated
group
to
the
extent
that
it
is
probable
that
future
taxable
profits
of
the
tax-‐ consolidated
group
will
be
available
against
which
the
asset
can
be
utilised.

Any
subsequent
period
adjustments
to
deferred
tax
assets
arising
from
unused
tax
losses
as
a result
of
revised
assessments
of
the
probability
of
recoverability
is
recognised
by
the
head company
only.

**c. Property,

Plant
and
Equipment**

Each
class
of
property,
plant
and
equipment
is
carried
at
cost
or
fair
value
as
indicated
less, where
applicable,
any
accumulated
depreciation
and
impairment
losses.

_**Plant

and
Equipment**_

Plant
and
equipment
are
measured
on
the
cost
basis
and
therefore
carried
at
cost
less accumulated
depreciation
and
any
accumulated
impairment.
In
the
event
the
carrying
amount
of plant
and
equipment
is
greater
than
the
estimated
recoverable
amount,
the
carrying
amount
is written
down
immediately
to
the
estimated
recoverable
amount
and
impairment
losses
are recognised
either
in
profit
or
loss
or
as
a
revaluation
decrease
if
the
impairment
losses
relate
to
a revalued
asset.
A
formal
assessment
of
recoverable
amount
is
made
when
impairment
indicators are
present
(refer
to
Note
1(i)
for
details
of
impairment).

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.
The
recoverable
amount
is
assessed
on the
basis
of
the
expected
net
cash
flows
that
will
be
received
from
the
asset’s
employment
and subsequent
disposal.

Subsequent
costs
are
included
in
the
asset’s
carrying
amount
or
recognised
as
a
separate
asset, as
appropriate,
only
when
it
is
probable
that
future
economic
benefits
associated
with
the
item will
flow
to
the
Group
and
the
cost
of
the
item
can
be
measured
reliably.
All
other
repairs
and maintenance
are
recognised
as
expenses
in
profit
or
loss
during
the
financial
period
in
which
they are
incurred.

| 2015 Annual Report 31

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

1:
SUMMARY
OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT)**

Depreciation

The
depreciable
amount
of
all
fixed
assets
including
buildings
and
capitalised
lease
assets,
but excluding
freehold
land,
is
depreciated
on
a
straight-‐line
basis
over
the
asset’s
useful
life
to
the consolidated
group
commencing
from
the
time
the
asset
is
held
ready
for
use.
Leasehold improvements
are
depreciated
over
the
shorter
of
either
the
unexpired
period
of
the
lease
or
the estimated
useful
lives
of
the
improvements.

The
depreciation
rates
used
for
each
class
of
depreciable
assets
are:

Class
of
Fixed
Asset Useful
Life Office
equipment 3
years Furniture
and
fittings 5
years IT
equipment 5
years Vertical
wind
tunnel
building
infrastructure 40
years
(2014:
20
years) Vertical
wind
tunnel
equipment 20
years

The
assets’
residual
values
and
useful
lives
are
reviewed,
and
adjusted
if
appropriate,
at
the
end of
each
reporting
period.

An
asset’s
carrying
amount
is
written
down
immediately
to
its
recoverable
amount
if
the
asset’s carrying
amount
is
greater
than
its
estimated
recoverable
amount.

Gains
and
losses
on
disposals
are
determined
by
comparing
proceeds
with
the
carrying
amount. These
gains
and
losses
are
recognised
in
profit
or
loss
in
the
period
in
which
they
arise.
When revalued
assets
are
sold,
amounts
included
in
the
revaluation
surplus
relating
to
that
asset
are transferred
to
retained
earnings.

d. Leases

Leases
of
fixed
assets,
where
substantially
all
the
risks
and
benefits
incidental
to
the
ownership
of the
asset
–
but
not
the
legal
ownership
–
are
transferred
to
entities
in
the
consolidated
group, are
classified
as
finance
leases.

Finance
leases
are
capitalised
by
recognising
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
recognised
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
lease
term.

32 2015 Annual Report |

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

1:
SUMMARY
OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT)**

e. Foreign
Currency
Transactions
and
Balances

_**Functional

and
Presentation
Currency**_

The
functional
currency
of
each
of
the
Group’s
entities
is
measured
using
the
currency
of
the primary
economic
environment
in
which
that
entity
operates.
The
consolidated
financial statements
are
presented
in
Australian
dollars,
which
is
the
parent
entity’s
functional
currency.

_**Transactions

and
Balances**_

Exchange
differences
arising
on
the
translation
of
monetary
items
are
recognised
in
profit
or
loss, except
where
deferred
in
equity
as
a
qualifying
cash
flow
or
net
investment
hedge.

Exchange
differences
arising
on
the
translation
of
non-‐monetary
items
are
recognised
directly
in other
comprehensive
income
to
the
extent
that
the
underlying
gain
or
loss
is
recognised
in
other comprehensive
income;
otherwise
the
exchange
difference
is
recognised
in
profit
or
loss.

**f. Cash

and
Cash
Equivalents**

Cash
and
cash
equivalents
include
cash
on
hand,
deposits
available
on
demand
with
banks
and bank
overdrafts.
Bank
overdrafts
are
reported
within
short-‐term
borrowings
in
current
liabilities in
the
statement
of
financial
position.

**g. Trade

and
Other
Payables**

Trade
and
other
payables
represent
the
liabilities
for
goods
and
services
received
by
the
entity that
remain
unpaid
at
the
end
of
the
reporting
period.
Payables
expected
to
be
settled
within
12 months
of
the
end
of
the
reporting
period
are
classified
as
current
liabilities.
All
other
liabilities are
classified
as
non-‐current
liabilities.

**h. Goods

and
Services
Tax
(GST)**

Revenues,
expenses
and
assets
are
recognised
net
of
the
amount
of
GST,
except
where
the amount
of
GST
incurred
is
not
recoverable
from
the
Australian
Taxation
Office
( ATO ).

Receivables
and
payables
are
stated
inclusive
of
the
amount
of
GST
receivable
or
payable.
The net
amount
of
GST
recoverable
from,
or
payable
to,
the
ATO
is
included
with
other
receivables
or payables
in
the
statement
of
financial
position.

Cash
flows
are
presented
on
a
gross
basis.
The
GST
components
of
cash
flows
arising
from investing
or
financing
activities
which
are
recoverable
from,
or
payable
to,
the
ATO
are
presented as
operating
cash
flows
included
in
receipts
from
customers
or
payments
to
suppliers.

| 2015 Annual Report 33

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

1:
SUMMARY
OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT)**

**i. Impairment

of
Assets**

At
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.
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
amount.
Any
excess
of
the
asset’s
carrying amount
over
its
recoverable
amount
is
recognised
immediately
in
profit
or
loss,
unless
the
asset is
carried
at
a
revalued
amount
in
accordance
with
another
Standard
(e.g.
in
accordance
with
the revaluation
model
in
AASB
116:
Property,
Plant
and
Equipment).
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,
intangible
assets
with
indefinite
lives
and intangible
assets
not
yet
available
for
use.

**j. Employee

Benefits**

Provision
is
made
for
the
Group’s
liability
for
employee
benefits
arising
from
services
rendered
by employees
to
the
end
of
the
reporting
period.
Employee
benefits
that
are
expected
to
be
settled within
a
year
have
been
measured
at
the
amounts
expected
to
be
paid
when
the
liability
is settled.
Expenses
for
non-‐accumulating
sick
leave
are
recognised
when
the
leave
is
taken
and
are measured
at
the
rates
paid
or
payable.
Liabilities
for
long
service
leave
are
recognised
when employees
reach
a
qualifying
period
of
continuous
service.
Liabilities
and
expenses
for
bonuses are
recognised
where
contractually
obliged
or
where
there
is
a
past
practice
that
has
created
a constructive
obligation.

**Share-‐based

Payments**

Share-‐based
compensation
benefits
are
provided
to
certain
employees
(including
key management
personnel)
via
the
Indoor
Skydive
Australia
Group
Limited
Performance
Rights
Plan. The
fair
value
is
measured
at
grant
date
and
is
recognised
over
the
period
the
services
are received,
which
is
the
expected
vesting
period
during
which
the
employees
would
become entitled
to
exercise
the
performance
rights.

Non-‐market
vesting
conditions
are
included
in
assumptions
about
the
number
of
options
that
are expected
to
become
exercisable.
Estimates
are
subsequently
revised
if
there
is
any
indication that
the
number
of
share
options
expected
to
vest
differs
from
previous
estimates.
Any cumulative
adjustment
prior
to
vesting
is
recognised
in
the
current
period.
No
adjustment
is made
to
any
expense
recognised
in
prior
periods
if
share
options
ultimately
exercised
are different
to
that
estimated
on
vesting.

The
fair
value
of
performance
rights
granted
for
rights
with
non-‐market
based
performance criteria
are
measured
using
the
binomial
option
pricing
methodology
which
is
the
approach typically
used
for
valuing
rights
which
may
be
exercised,
once
vested,
at
any
time
up
until
expiry.

Upon
exercise
of
share
options,
the
proceeds
received
net
of
any
directly
attributable
transaction costs
are
allocated
to
contributed
equity.

34 2015 Annual Report |

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

1:
SUMMARY
OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT)**

k. 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.

**l. Revenue

and
Other
Income**

Revenue
is
measured
at
the
fair
value
of
the
consideration
received
or
receivable
after
taking
into account
any
trade
discounts
and
volume
rebates
allowed.
When
the
inflow
of
consideration
is deferred,
it
is
included
in
the
Statement
of
Financial
Position
as
a
current
liability.

Revenue
from
the
sale
of
goods
and
services
is
recognised
at
the
point
of
delivery
as
this corresponds
to
the
transfer
of
significant
risks
and
rewards
of
ownership
and
the
cessation
of
all involvement
in
those
goods
and
services.

Interest
revenue
is
recognised
on
an
accruals
basis
using
the
effective
interest
method.

**m. Deferred

Revenue**

Income
relating
to
future
periods
is
initially
recorded
as
deferred
revenue,
and
is
then
recognised as
revenue
over
the
relevant
periods
of
admission
or
rendering
of
other
services.

**n. Trade

and
Other
Receivables**

Trade
and
other
receivables
include
amounts
due
from
customers
for
goods
sold
and
services performed
in
the
ordinary
course
of
business.

Receivables
expected
to
be
collected
within
12 months
of
the
end
of
the
reporting
period
are
classified
as
current
assets.
All
other
receivables are
classified
as
non-‐current
assets.

Trade
and
other
receivables
are
initially
recognised
at
fair
value
and
subsequently
measured
at amortised
cost
using
the
effective
interest
method,
less
any
provision
for
impairment.
Refer
to Note
1(i)
for
further
discussion
on
the
determination
of
impairment
losses.

o. Inventories

Inventories
are
valued
at
the
lower
of
cost
and
net
realisable
value.
Cost
is
determined
using
the weighted
average
cost
method,
after
deducting
any
purchase
settlement
discount
and
including logistics
expenses
incurred
in
bringing
the
inventories
to
their
present
location
and
condition.

**p. Borrowing

Costs**

Borrowing
costs
directly
attributable
to
the
acquisition,
construction
or
production
of
assets
that necessarily
take
a
substantial
period
of
time
to
prepare
for
their
intended
use
or
sale
are
added to
the
cost
of
those
assets,
until
such
time
as
the
assets
are
substantially
ready
for
their
intended use
or
sale.

All
other
borrowing
costs
are
recognised
in
profit
or
loss
in
the
period
in
which
they
are
incurred.

| 2015 Annual Report 35

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

1:
SUMMARY
OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT)**

**q. Comparative

Figures**

When
required
by
Accounting
Standards,
comparative
figures
have
been
adjusted
to
conform
to changes
in
presentation
for
the
current
financial
year.

Where
the
Group
has
retrospectively
applied
an
accounting
policy,
made
a
retrospective restatement
or
reclassified
items
in
its
financial
statements,
an
additional
statement
of
financial position
as
at
the
beginning
of
the
earliest
comparative
period
will
be
disclosed.

**r. Critical

Accounting
Estimates
and
Judgements**

_**i. Useful

lives,
Residual
Values
and
Classification
of
Property,
Plant
and
Equipment**_

There
is
a
degree
of
judgement
required
in
estimating
the
residual
values
and
useful
lives
of
the Property,
Plant
and
Equipment.
There
is
also
a
degree
of
judgement
required
in
terms
of
the classification
of
such
Property,
Plant
and
Equipment.
The
Group’s
main
assets
at
present comprise
the
Vertical
Wind
Tunnel
( VWT )
Equipment
and
its
related
Building
Infrastructure.
The construction
of
these
assets
are
typically
foreseen
in
the
lease
agreements,
however
the
Board has
exercised
their
judgement
in
determining
that
the
nature
of
these
assets
are
that
of
buildings and
equipment,
rather
than
leasehold
improvements.
On
23
June
2015,
the
Group
entered
into
a Deed
of
Restatement
and
Amended
( Deed )
with
the
Penrith
Landlord
which
clarified
the application
of
certain
terms
of
the
lease
and
changed
the
agreement
from
4
consecutive
5
year sub-‐leases
to
a
single
20
year
lease,
with
two
option
terms
of
10
years
each
extending
the
full term
of
the
lease
to
40
years.
To
this
extent,
in
determining
the
useful
life
of
the
property
plant and
equipment
the
directors
have
increased
their
estimates
in
relation
to
the
building infrastructure
from
20
years
to
40
years
reflecting
the
updated
useful
life
of
the
facility.

36 2015 Annual Report |

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

1:
SUMMARY
OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT)**

_**ii. Provision

for
Site
Restoration
of
VWT
Equipment
and
Building
Infrastructure**_

Provisions
for
site
restoration
obligations
are
recognised
when
the
Group
has
a
present
legal
or constructive
obligation
as
a
result
of
past
events,
it
is
probable
that
an
outflow
of
resources
will be
required
to
settle
the
obligation
and
the
amount
has
been
reliably
estimated.
Provisions
are not
recognised
for
future
operating
losses.

Where
there
are
a
number
of
similar
obligations,
the
likelihood
that
an
outflow
will
be
required in
settlement
is
determined
by
considering
the
class
of
obligations
as
a
whole.
A
provision
is recognised
even
if
the
likelihood
of
an
outflow
with
respect
to
any
one
item
included
in
the
same class
of
obligations
may
be
small.

Provisions
are
measured
at
the
present
value
of
management's
best
estimate
of
the
expenditure required
to
settle
the
present
obligation
at
the
end
of
the
reporting
period.
The
discount
rate used
to
determine
the
present
value
is
a
pre-‐tax
rate
that
reflects
current
market
assessments
of the
time
value
of
money
and
the
risks
specific
to
the
liability.
The
increase
in
the
provision
due
to the
passage
of
time
is
recognised
as
interest
expense.

For
the
prior
corresponding
period,
the
Group
assumed
it
would
be
required
to
remove
all building
works
on
expiry
of
the
lease.
To
this
extent,
an
estimate
of
the
cost
to
remove
the
VWT and
its
related
Building
Infrastructure
was
provided
for
amounting
to
$2,144,290
escalated
by 2.5%
to
$2,197,897
and
was
capitalised
into
the
cost
of
the
building
infrastructure
in
the accounting
records.
The
estimate
to
remove
the
infrastructure
and
equipment
was
based
on current
costs
using
existing
technology
at
current
prices.
These
costs
were
projected
forward
at
a 2.5%
inflationary
escalation
and
then
discounted
back
at
2.5%
after
consideration
of
the
risks associated
with
the
project
and
were
depreciated
over
20
years.
The
unwinding
of
the
effect
of discounting
on
the
site
restoration
provision
was
included
within
finance
costs
in
the
statement of
comprehensive
income.

The
terms
of
the
Lease
were
negotiated
with
the
signing
of
the
new
Deed
with
the
landlord, Penrith
Rugby
League
Club
Limited.

Management
and
the
Directors
have
considered
the
new terms
of
the
lease
and
have
exercised
their
judgement
in
determining
that
the
landlord
is
unlikely to
exercise
their
rights
to
require
the
Company
to
make
good
the
facility
in
Penrith. Consequently,
the
existing
provision
has
been
reversed
and
the
prior
year
accumulated
unwind of
make
good
liability
and
accumulated
depreciation
of
the
make
good
asset
have
been
reversed in
the
current
year.

_**iii. Deferred

Tax**_

Once
the
additional
facilities
are
operational,
the
Group
is
expecting
to
generate
a
taxable income.
As
it
is
therefore
considered
probable
that
the
unused
tax
losses
will
be
recouped,
the directors
have
recognised
a
deferred
tax
asset
to
the
extent
of
the
tax
losses
and
deductible temporary
differences.

| 2015 Annual Report 37

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

1:
SUMMARY
OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT)**

_**iv. Exclusive

Territory
Development
Agreement
Recognition
and
Amortisation**_

On
20
December
2013
an
Exclusive
Territory
Development
Agreement
was
entered
into
between the
Company
and
iFly
Australia
Pty
Ltd
( iFly )
to
exclusively
develop
projects
in
Australia
and
New Zealand
for
which
iFly
would
receive
2,500,000
shares
in
the
company
(IDZ.ASX).
iFly
is
the Australian
subsidiary
of
SkyVenture
International,
our
vertical
wind
tunnel
supplier.
The agreement
has
created
an
intangible
asset
which
is
expected
to
create
a
future
economic
benefit. This
intangible
asset
must
be
initially
valued
at
cost,
in
accordance
with
AASB
138.
The
cost
is calculated
as
$1,500,000,
being
the
fair
value
of
the
shares
granted
to
iFly,
at
the
IDZ
close
price of
$0.60
at
20
December
2013.

The
term
of
the
agreement
is
limited,
and
the
asset
is
therefore
classified
as
a
finite
life
intangible asset.
An
intangible
asset
with
a
finite
life
is
to
be
amortised
over
its
useful
life.
The
amortisation method
selected
should
reflect
the
pattern
over
which
the
asset’s
future
economic
benefit
is expected
to
be
consumed.
If
that
pattern
cannot
be
determined
reliably,
the
straight-‐line
method is
to
be
used.
The
amortisation
period
and
method
for
an
intangible
asset
with
a
finite
useful
life are
to
be
reviewed
at
least
at
the
end
of
each
annual
reporting
period.
If
the
expected
useful
life or
expected
pattern
of
consumption
of
the
future
economic
benefit
is
different
from
previous estimates,
the
period
or
method
is
to
be
revised.
As
at
the
reporting
date,
there
is
no
change
to the
previous
estimates.

An
accelerated
amortisation
rate
of
40%
has
been
used
against
this
intangible
asset.
This
reflects the
expected
consumption
of
benefits
under
the
agreement.
Although
it
is
conceivable
that
the agreement
could
run
to
the
full
term
of
20
years,
management
expect
that
the
majority
of
the benefit
will
be
achieved
over
an
initial
period
of
four
years
through
the
delivery
of
the
four tunnels
for
which
deposits
have
been
paid
to
SkyVenture
International.

38 2015 Annual Report |

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

1:
SUMMARY
OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT)**

**s. New

Accounting
Standards
for
Application
in
Future
Periods**

The
AASB
has
issued
a
number
of
new
and
amended
Accounting
Standards
and
Interpretations
that
have mandatory
application
dates
for
future
reporting
periods,
some
of
which
are
relevant
to
the
Group.
The
Group
has decided
not
to
early
adopt
any
of
the
new
and
amended
pronouncements.
The
Group’s
assessment
of
the
new and
amended
pronouncements
that
are
relevant
to
the
Group
but
applicable
in
future
reporting
periods
is
set
out below:

below:
Reference	Title	Summary	Application date (financial years beginning)	Expected Impact
AASB 2015-3	Amendments to Australian Accounting Standards arising from the Withdrawal of AASB 1031 Materiality	The Standard completes the AASB’s project to remove Australian guidance on materiality from Australian Accounting Standards.	1 July 2015	Not yet known
AASB 2014-3	Amendments to Australian Accounting Standards – Accounting for Acquisitions of Interests in Joint Operations	This Standard amends AASB 11 to provide guidance on the accounting for acquisitions of interests in joint operations in which the activity constitutes a business.	1 January 2016	None
AASB 2014-4	Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of Depreciation and Amortisation	This Standard amends AASB 116 and AASB 138 to establish the principle for the basis of depreciation and amortisation as being the expected pattern of consumption of the future economic benefits of an asset, and to clarify that revenue is generally presumed to be an inappropriate basis for that purpose.	1 January 2016	None
AASB 2014-9	Amendments to Australian Accounting Standards – Equity Method in Separate Financial Statements	This amending standard allows entities to use the equity method of accounting for investments in subsidiaries, joint ventures and associates in their separate financial statements.	1 January 2016	None

| 2015 Annual Report 39

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

NOTE
1:
SUMMARY
OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT)

Reference	Title	Summary	Application date (financial years beginning)	Expected Impact
AASB 2014-10	Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture	This amending standard requires a full gain or loss to be recognised when a transaction involves a business (even if the business is not housed in a subsidiary), and a partial gain or loss to be recognised when a transaction involves assets that do not constitute a business (even if those assets are housed in a subsidiary).	1 January 2016	None
AASB 2015-1	Amendments to Australian Accounting Standards – Annual Improvements to Australian Accounting Standards 2012- 2014 Cycle	The Standard makes amendments to various Australian Accounting Standards arising from the IASB’s Annual Improvements process, and editorial corrections.	1 January 2016	None
AASB 2015-2	Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101	The Standard makes amendments to AASB 101 Presentation of Financial _Statements_arising from the IASB’s Disclosure Initiative project.	1 January 2016	Disclosures Only
AASB 15	Revenue from Contracts with Customers	This Standard establishes principles (including disclosure requirements) for reporting useful information about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers.	1 January 2017	None
AASB 2014-5	Amendments to Australian Accounting Standards arising from AASB 15	Consequential amendments arising from the issuance of AASB 15.	1 January 2017	None

40 2015 Annual Report |

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

NOTE
1:
SUMMARY
OF
SIGNIFICANT
ACCOUNTING
POLICIES
(CONT)

Reference	Title	Summary	Application date (financial years beginning)	Expected Impact
AASB 9	Financial Instruments	This Standard supersedes both AASB 9 (December 2010) and AASB 9 (December 2009) when applied. It introduces a “fair value through other comprehensive income” category for debt instruments, contains requirements for impairment of financial assets, etc.	1 January 2018	None
AASB 2014-7	Amendments to Australian Accounting Standards arising from AASB 9 (December 2014)	Consequential amendments arising from the issuance of AASB 9	1 January 2018	None

| 2015 Annual Report 41

For the year ended 30 June 2015

FINANCIAL STATEMENTS

NOTE 2: PARENT INFORMATION The following information has been extracted from the books and records of the parent and has been prepared in accordance with Australian Accounting Standards. Statement of Financial Position Assets Current assets Non-current assets Total Assets Liabilities Current liabilities Non-current liabilities Total Liabilities Equity Issued capital Share based payments reserve Retained earnings Total Equity Statement of Profit or Loss and Other Comprehensive Income Total profit/(loss) before tax Total comprehensive income	2015 $ 2014 $ 6,314,769 2,202,175 20,607,847 17,763,874
	26,922,616 19,966,049
	401,990 2,343,286 - 2,197,897
	401,990 4,541,183
	33,639,481 18,467,798 1,185,050 1,093,569 (8,303,905) (4,136,501)
	26,520,626 15,424,866
	(4,167,404) (2,917,383)
	(4,167,404) (2,917,383)

42 2015 Annual Report |

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

2:
PARENT
INFORMATION
(CONT)**

Guarantees

The
parent
entity
does
not
have
any
guarantees
as
at
30
June
2015.

**Contingent

liabilities**

The
parent
entity
does
not
have
any
contingent
liabilities
as
at
30
June
2015.

**Contractual

commitments**

Other
than
amounts
disclosed
in
the
financial
statements,
the
parent
entity
has
no
additional contractual
commitments
as
at
30
June
2015
(2014:
nil).

NOTE 3: SALES REVENUE	NOTE 3: SALES REVENUE	NOTE 3: SALES REVENUE
	2015 $	2014 $
VWT revenue
Other sales
	6,431,444	1,212,643

| 2015 Annual Report 43

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

4:
INCOME
TAX
EXPENSE**

A
reconciliation
of
income
tax
expense
applicable
to
accounting
loss
before
income
tax
at
the
statutory income
tax
rate
to
income
tax
expense
at
the
company’s
effective
income
tax
rate
for
the
period
ended 30
June
2015
and
30
June
2014
is
as
follows:

NOTE 4: INCOME TAX EXPENSE
A reconciliation of income tax expense applicable to accounting loss before income tax at the statutory income tax rate to income tax expense at the company’s effective income tax rate for the period ended 30 June 2015 and 30 June 2014 is as follows:
			2015 $		2014 $
Accounting loss before income tax			(1,966,330)		(4,105,707)

At the statutoryincome tax rate of 30%(2014: 30%)			(589,899)		(1,231,712)
Permanent differences			571,966		469,565
Tax effect on temporary and timing differences not brought to account			(169,939)		(296,548)
Income tax benefit not brought to account			(28,470)		(332,996)
Income Tax Benefit		(216,342) (1,391,691)

Deferred tax assets(timingdifference)comprises of:
Black hole expenditure			314,991		238,265
Unrealisedgain and losses
Provisions and others
Deferred tax asset(timingdifference)brought to account			434,945		406,475
Deferred tax asset (tax losses) brought to account			1,173,088		985,216
Total deferred tax bought into account			1,608,033		1,391,691
NOTE 5: CASH AND CASH EQUIVALENTS	2015 $			2014 $
Cash at bank and on hand			4,321,619	1,117,249
			4,321,619	1,117,249
The above cash balance excludes term deposits of $1,325,556 held as at 30 June 2015 (2014: $300,278).

44 2015 Annual Report |

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

OTES TO THE FINANCIA	TEMEN	TEMEN	For the year ended 30 June 2015 TS	For the year ended 30 June 2015 TS
NOTE 6: TRADE RECEIVABLES AND OTHER ASSETS	2015 $		2014 $
Trade receivables	59,375		46,795
Inventory	44,927		-
Other receivables	501,959		172,325
Prepaid expenses	219,904		104,200
	826,165		323,320

NOTE 7: PROPERTY, PLANT AND EQUIPMENT
VWT Equipment and Building Infrastructure (Operational)	2015 $		2014 $
At cost	15,075,915		14,501,459
Accumulated depreciation	(694,276)		(118,000)
Total VWT Equipment and Building Infrastructure	14,381,639		14,383,459

Provision for Site Restoration of the VWT Equipment and Building Infrastructure on Termination of Lease
At cost		-		2,144,290
Accumulated depreciation		-		(107,214)
Total Provision for Site Restoration of the VWT Equipment and Building Infrastructure		-		2,037,076

The terms of the lease agreement on the Penrith facility were renegotiated with the signing of the new Deed with the landlord, Penrith Rugby League Club Limited. Management and Directors have considered the proposed terms of the new lease and have exercised their judgement in determining that the landlord is unlikely to exercise their rights to require the Company to make good the facility in Penrith. Consequently, the existing provision was reversed upon the renegotiation of the lease and the prior year accumulated unwind of make good liability and accumulated depreciation of the make good asset have been reversed in the current year. This resulted in a reduction in depreciation of $107,214, and finance costs of $53,607 during the period, in addition to the removal of the make good asset and make good liability.

| 2015 Annual Report 45

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

7:
PROPERTY,
PLANT
AND
EQUIPMENT
(CONT)**

NOTE 7: PROPERTY, PLANT AND EQUIPMENT (CONT)	NOTE 7: PROPERTY, PLANT AND EQUIPMENT (CONT)	NOTE 7: PROPERTY, PLANT AND EQUIPMENT (CONT)	NOTE 7: PROPERTY, PLANT AND EQUIPMENT (CONT)	NOTE 7: PROPERTY, PLANT AND EQUIPMENT (CONT)	NOTE 7: PROPERTY, PLANT AND EQUIPMENT (CONT)	NOTE 7: PROPERTY, PLANT AND EQUIPMENT (CONT)	NOTE 7: PROPERTY, PLANT AND EQUIPMENT (CONT)	NOTE 7: PROPERTY, PLANT AND EQUIPMENT (CONT)	NOTE 7: PROPERTY, PLANT AND EQUIPMENT (CONT)
VWT Construction Work in Progress
VWT equipment and building infrastructure under construction
VWT deposits paid
Total Construction Work in Progress						9,499,459		806,994
As construction commences on a facility, the balance is transferred from VWT deposits paid to VWT Equipment and Building Infrastructure under construction.
Total						2015 $ 24,574,374 (694,276)		2014 $ 17,452,743 (225,214)
At cost
Accumulated depreciation
Total						23,881,098		17,227,529

a.	Movements in Carrying Amounts
				VWT Equipment Building Infrastructure	Provision for Site Restoration of VWT Equipment and Building Infrastructure		VWT Construction Work In Progress		Total
Consolidated Group:				$	$		$		$
Balance at 1 July 2013				2,830,917	2,144,290		-		4,975,207
Additions				11,670,542	-		806,994 12,477,536 - (225,214)
Depreciation expense				(118,000)	(107,214)
Balance at 1 July 2014				14,383,459	2,037,076		806,994 17,227,529 8,692,465 9,492,135
Additions				799,670	-
Write back for site restoration				-	(2,144,290)		- (2,144,290)
Depreciation expense			(801,490) 107,214 - (694,276)
Balance at June 2015		30		14,381,639	-		9,499,459		23,881,098

46 2015 Annual Report |

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

NOTE 8: CONTROLLED ENTITIES
Subsidiaries of Indoor Skydive Australia Group	Country of Incorporation	2015	2014
		%	%
Indoor Skydiving Penrith Holdings Pty Ltd	Australia	100	100
Indoor Skydiving Penrith Pty Ltd	Australia	100	100
Indoor Skydiving Gold Coast Pty Ltd	Australia	100	100
Indoor Skydiving Adelaide Pty Ltd	Australia	100	100
Indoor Skydiving Perth Pty Ltd	Australia	100	100
ISAG Holdings D Pty Ltd	Australia	100	100
upRAW Café & Juice Bar Pty Ltd *	Australia	100	100
* Changed to ISAG Café Pty Ltd on 21 July 2015

| 2015 Annual Report 47

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

9:
INTANGIBLE
ASSET**

OTES TO THE FINANCIAL STATEMENTS ended	OTES TO THE FINANCIAL STATEMENTS ended	OTES TO THE FINANCIAL STATEMENTS ended	OTES TO THE FINANCIAL STATEMENTS ended
NOTE 9: INTANGIBLE ASSET
		2015 $	2014 $
Exclusive Territory Development Agreement	1,500,000 1,500,000 (789,370) (315,616)
Accumulated amortisation


Movements in Carrying Amounts
Opening written down value
Addition: Exclusive Territory Development Agreement
Amortisation
Closing written down value		710,630	1,184,384
The intangible asset was acquired during the 2014 year and is valued at cost. The fair value of $1,500,000 represents the value of the shares granted to iFly Australia Pty Limited under the Exclusive Joint Territory Agreement, being 2,500,000 shares at a close price of $0.60 on grant date (20 December 2013). An accelerated amortisation rate of 40% has been used against this intangible asset, amortised from 20 December 2013. An accelerated method has been used to reflect the expected consumption of benefits under the agreement.

**NOTE

10:
TRADE
AND
OTHER
PAYABLES**

Trade payables Other payables and accruals	2015 $ 2014 $ 1,602,493 601,450 440,355 547,556
	2,042,848 1,149,006

During
the
period,
iFly
Australia
Pty
Ltd
exercised
their
rights
under
the
Exclusive
Territory Development
Agreement
to
invest
up
to
$1,000,000
in
a
subsidiary
of
the
Company,
Indoor
Skydiving Gold
Coast
Pty
Ltd.
The
investment
has
been
agreed
to
be
set
off
against
amounts
owed
to
iFly Australia
Pty
Ltd
for
the
purchase
of
equipment.
As
shares
in
the
subsidiary
have
not
yet
been
issued
a non-‐controlling
interest
in
the
Group
has
not
been
recognised
in
the
Group
balance
sheet
as
at
the reporting
date
and
is
included
in
trade
payables
above.

48 2015 Annual Report |

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

11:
PROVISIONS
-‐
CURRENT**

NOTE 11: PROVISIONS - CURRENT
Provision for Employee Benefits Opening balance Additional provisions Amounts used Closing balance – Provision for employee entitlements	2015 $ 2014 $ 65,187 10,911 233,225 87,659 (188,729) (33,383)
	109,683 65,187

Provisions
for
employee
benefits
represent
amounts
accrued
for
annual
leave.

The
current
portion
for
this
provision
includes
the
total
amount
accrued
for
annual
leave
entitlements
that
have
vested due
to
employees
having
completed
the
required
period
of
service.
Based
on
past
experience,
the
Group
does
not
expect the
full
amount
of
annual
leave
balances
classified
as
current
liabilities
to
be
settled
within
the
next
12
months.
However, these
amounts
must
be
classified
as
current
liabilities
since
the
Group
does
not
have
an
unconditional
right
to
defer
the settlement
of
these
amounts
in
the
event
employees
wish
to
use
their
leave
entitlement.

NOTE 12: DEFERRED REVENUE
	2015 $	2014 $
Deferred revenue	1,280,530	905,497
	1,280,530	905,497

Deferred revenue primarily represents prepaid sales in respect of flight time purchased in advance. The sales will be released to revenue at the time the services are rendered.

**NOTE

13:
BORROWINGS**

**Convertible

Note
Facility**

The
Convertible
Note
Finance
Facility
( Facility )
between
the
Company
and
Birkdale
Holdings
(Qld)
Pty
Ltd
as
trustee
for the
Baxter
Family
Trust
( Birkdale )
was
fully
repaid
on
13
November
2014,
prior
to
the
conversion
date
of
10
December 2014.
Pursuant
to
the
ASX
announcement
dated
11
June
2015,
the
facility
expired
on
10
June
2015
without
conversion.

Interest
was
paid
quarterly
at
10%
pa
on
the
drawn
amount
of
the
Facility
and
a
2%
line
fee
was
paid
on
the
undrawn portion.
An
amount
of
$244,402
is
included
in
finance
expenses
for
the
period
in
relation
to
this
Facility.

| 2015 Annual Report

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

NOTE 14 ISSUED CAPITAL 118,974,294 (2014: 87,305,666) fully paid ordinary shares Share issue costs a. Ordinary Shares At the beginning of the reporting period: Shares issued during the year - Share issues - Share based payments At the end of the reporting period	2015 $ 2014 $ 35,289,996 19,504,608 (1,650,315) (1,036,610)
	33,639,681 18,467,998
	2015 No. 2014 No. 87,305,666 58,810,833 28,907,492 28,262,333 2,761,136 232,500
	118,974,294 87,305,666

During
the
year,
the
Company
undertook
a
rights
issue
to
raise
additional
capital.
The
issue
included
an institutional
component
of
22,124,845
shares
and
a
retail
component
of
6,782,647
shares.
The institutional
component
was
completed
on
3
November
2014,
and
the
retail
component
was
completed on
27
November
2014.

b. Performance Rights At the beginning of the reporting period: Performance rights issued during the year Performance rights lapsed during the year Performance rights exercised during the year At the end of the reporting period	2015 $ 2014 $ 4,962,264 - 350,000 4,962,264 (783,710) - (2,611,136) -
	1,917,418 4,962,264

If
all
of
the
above
performance
rights
vested
at
the
same
time,
they
would
represent
1.6%
of
the
total
issued capital
of
the
Company.

As
disclosed
in
the
2014
report,
during
the
year
150,000
conditional
rights
were
also
issued
to
senior
employees.

50 2015 Annual Report |

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

14
ISSUED
CAPITAL
(CONT)**

Performance
rights
are
provided
to
certain
employees
(including
key
management
personnel)
via
the
Indoor Skydive
Australia
Group
Limited
Performance
Rights
Plan.
The
fair
value
is
measured
at
grant
date
and
is recognised
over
the
period
the
services
are
received,
which
is
the
expected
vesting
period
during
which
the employees
would
become
entitled
to
exercise
the
performance
rights.

**c. Capital

Management**

The
Board
controls
the
capital
of
the
Group
in
order
to
generate
long-‐term
shareholder
value
and
to
ensure
that
the Group
can
fund
its
operations
and
continue
as
a
going
concern.

The
Board
assesses
the
Group’s
capital
requirements based
on
the
Company’s
stage
of
operations,
having
regard
to
available
debt
funding
and
equity
funding
and
seek
to maintain
a
capital
structure
based
on
the
lowest
cost
of
capital
available
to
the
Group.
The
Board
achieves
this
through the
management
of
debt
levels,
distributions
and
share
issues.

The
Group
is
not
subject
to
any
externally
imposed
capital
requirements.

There
have
been
no
changes
in
the
strategy
adopted
by
the
Company
to
manage
the
capital
of
the
Group
since
the
prior year.
The
Group
does
not
currently
have
a
specific
strategy
in
respect
of
the
Group’s
gearing.

**NOTE

15:
CAPITAL
AND
LEASING
COMMITMENTS**

a.
Operating Lease Commitments

Non-cancellable operating leases contracted for but not
recognised in the financial statements

Payable – minimum lease payments:

–
not later than 12 months

–
between 12 months and five years

–
later than five years

b.
Capital Commitments

Subsidiary capital commitments contracted for but not
recognised in the financial statements

SkyVenture (USD 1,862,500)

2015
$
2014
$

580,793
85,350
3,015,074
200,000
11,461,155
750,000
15,057,022
1,035,350

2015
$
2014
$

2,425,130
-
2,425,130
-

| 2015 Annual Report 51

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

16:
CASH
FLOW
INFORMATION**

Reconciliation of Cash Flow from Operations with Loss after
Income Tax
Loss after income tax
Non-cash flows in loss:
–
Share based payments
–
Gain/loss on FX revaluation
-
Unwind of make good discount
-
Depreciation expense
-
Amortisation expense
Changes in assets and liabilities:
–
(increase)/decrease in trade and term receivables
–
(increase)/decrease in prepaid expenses
-
(increase)/decrease in deferred tax asset
–
increase/(decrease) in trade payables and accruals
–
increase/(decrease) in unearned revenue
–
increase/(decrease) in provisions
Cash flow used in operations

2015
$
2014
$
(1,749,988)
(2,714,016)

1,423,122
1,243,779
(62,519)
70,259
(53,607)
53,607
467,968
225,214
473,754
315,616

(666,185)
(77,811)
104,200
(79,960)
216,342
(1,391,691)
106,158
813,046
379,493
905,497
44,497
54,275

683,235
(582,185)

**NOTE

17:
RELATED
PARTY
TRANSACTIONS**

**a.

The
Group’s
main
related
parties
are
as
follows:**

(i) Entities
exercising
control
over
the
Group:

There
is
no
ultimate
parent
entity
that
exercises
control
over
the
Group.

52 2015 Annual Report |

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

17:
RELATED
PARTY
TRANSACTIONS
(CONT)**

(ii) _Key

management
personnel:_

Any
person(s)
having
authority
and
responsibility
for
planning,
directing
and
controlling
the
activities
of the
entity,
directly
or
indirectly,
including
any
director
(whether
executive
or
otherwise)
of
that
entity, are
considered
key
management
personnel.

For
details
of
disclosures
relating
to
key
management
personnel,
refer
to
the
Remuneration
Report.

(iii) _Entities

subject
to
significant
influence
by
the
Group:_

An
entity
that
has
the
power
to
participate
in
the
financial
and
operating
policy
decisions
of
an
entity, but
does
not
have
control
over
those
policies,
is
an
entity
which
holds
significant
influence.
Significant influence
may
be
gained
by
share
ownership,
statute
or
agreement.
There
are
no
such
entities
in
the Group.

(iv) _Other

related
parties:_

Other
related
parties
include
entities
controlled
by
the
ultimate
parent
entity
and
entities
over
which key
management
personnel
have
joint
control.

Birkdale
Holdings
(Qld)
Pty
Ltd
is
trustee
for
the
Baxter
Family
Trust
( Birkdale )
which
executed
a Convertible
Note
Deed
on
10
December
The
facility
expired
on
10
June
2015
without conversion.
Birkdale
is
a
company
associated
with
Stephen
Baxter,
a
Director
of
the
Company.
The
entities
disclosed
in
Note
8
are
100%
owned
subsidiary
companies
of
the
parent
entity.

**b

Transactions
with
related
parties:**

Balances
and
transactions
between
the
Company
and
its
subsidiaries,
which
are
related
parties
of
the Company,
have
been
eliminated
on
consolidation
and
are
not
disclosed
in
this
Note.
Details
of
transactions between
the
Group
and
other
related
parties
are
disclosed
below.

Transactions
between
related
parties
are
on
normal
commercial
terms
and
conditions
no
more
favourable
than those
available
to
other
parties
unless
otherwise
stated.

The
following
table
provides
the
total
amount
of transactions
that
have
been
entered
into
with
related
parties
for
the
financial
year:

Associates		Payments to related parties	Amounts owed to related parties
Birkdale Holdings (Qld) Pty Ltd	2015	244,402	-
	2014	199,261	1,500,000

The
amounts
outstanding
are
unsecured
and
will
be
settled
in
cash.
No
guarantees
have
been
given
or
received. No
expense
has
been
recognised
in
the
current
or
prior
periods
for
bad
or
doubtful
debts
in
respect
of
the amounts
owed
to
related
parties.
See
Note
13
for
other
terms
in
respect
of
the
amounts
owed
to
related
parties.

| 2015 Annual Report 53

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

18:
SHARE
BASED
PAYMENTS**

NOTE 18: SHARE BASED PAYMENTS
The following Share Based Payments were expensed during the period:	2015 $	2014 $
– Net amounts credited to the share based payment reserve (in respect of performance rights) – Gailyon Investments Pty Ltd(i) 73,125 FPO shares	1,423,122 -	1,198,869 33,683
– Bruce McLeary (ii) 24,375 FPO shares	-	11,227
	1,423,122	1,243,779

i. A
company
associated
with
Michael
Gordon
of
Gordon
Capital,
Financial
Advisor ii. Associate
of
Gordon
Capital,
Financial
Advisor

On
27
November
2013
shareholders
approved
the
Indoor
Skydive
Australia
Group
Limited
Performance
Rights Plan
( Plan ) at
the
2013
Annual
General
Meeting.
The
Plan
allows
for
the
grant
of
performance
rights
to Directors
and
employees
as
part
of
the
Company’s
remuneration
strategy.
The
performance
rights
carry neither
rights
to
dividends,
nor
voting
rights
and
may
be
exercised
at
any
time
from
the
date
of
vesting
to
the date
of
their
expiry.

**Measurement

of
fair
values**

_**(i) Equity-‐Settled

Share-‐Based
Payment
Arrangements**_

The
fair
value
of
equity
instruments
granted
under
the
Plan
has
been,
where
appropriate,
calculated using
a
binominal
approximation
option
pricing
model.
Service
and
non-‐market
performance conditions
attached
to
the
approvals
or
grants
were
not
taken
into
account
in
determining
the
fair value.

Where
performance
rights
that
were
immediately
exercised
were
granted,
the
fair
value
of
the
equity instrument
was
calculated
with
reference
to
the
5
day
VWAP
of
IDZ
shares
on
the
transaction
date.

The
inputs
used
in
the
calculation
of
the
fair
value
at
grant
(or
approval)
date
of
the
Equity-‐settled share-‐based
payments
were
as
follows:

	27 November 2013	27 November 2013	7 July 2014
Fair Value at grant/approval date (weighted average)	$0.59	$0.59	$0.68
Share Price at grant/approval date	$0.59	$0.59	$0.68
Exercise Price	$0.00	$0.00	$0.00
Expected Volatility	50%	50%	50%
Expected life (weighted average number of days)	956	307	358
Expected dividends	0%	0%	0%
Risk-free rate (weighted average)	2.95%	2.69%	2.58%
5 day VWAP	N/A	N/A	$0.68

54 2015 Annual Report |

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

18:
SHARE
BASED
PAYMENTS
(CONT)**

**Reconciliation

of
outstanding
share
options**

The
number
and
weighted-‐average
exercise
prices
of
equity
instruments
granted
under
the
Plan
were
as
follows:

	Number of rights	Weighted-average exercise price
Outstanding at 30 June 2014	4,962,264	0
Granted during the year	350,000	0
Forfeited during the year	(783,710)	0
Exercised during the year	(2,611,136)	0
Outstanding as at 30 June 2015	1,917,418	0

**NOTE

19:
SEGMENT
INFORMATION**

**General

Information**

_**Identification

of
reportable
segments**_

The
Group’s
operations
are
in
one
business
segment
being
the
construction
and
operation
of
indoor
skydiving facilities.
The
Group
operates
in
one
geographical
segment
being
Australia.
All
subsidiaries
in
the
Group
operate within
the
same
segment.

**Types

of
Products
and
Services
by
Segment**

The
products
and
services
will
include
a
number
of
indoor
skydiving
facilities
allowing
human
flight
within
a
safe environment
used
by
tourists,
enthusiasts
and
military.

**Basis

of
Accounting
for
Purposes
of
Reporting
by
Operating
Segments**

_**Accounting

policies
adopted**_

Unless
stated
otherwise,
all
amounts
reported
to
the
Board
of
Directors,
being
the
chief
operating
decision
makers with
respect
to
operating
segments,
are
determined
in
accordance
with
accounting
policies
that
are
consistent with
those
adopted
in
these
financial
statements.

**NOTE

20:
FINANCIAL
RISK
MANAGEMENT**

**Financial

Risk
Management
Policies**

The
Audit
and
Risk
Committee
( A&RC )
has
been
delegated
responsibility
by
the
Board
of
Directors
for,
among other
issues,
managing
financial
risk
exposures
of
the
Group.
The
A&RC
monitors
the
Group’s
financial
risk management
policies
and
exposures
and
approves
financial
transactions
within
the
scope
of
its
authority.
It
also reviews
the
effectiveness
of
internal
controls
relating
to
commodity
price
risk,
counterparty
credit
risk,
currency risk,
liquidity
risk
and
interest
rate
risk.
The
A&RC
meets
on
a
regular
basis
and
minutes
of
the
A&RC
are
reviewed by
the
Board.

The
A&RC’s
overall
risk
management
strategy
seeks
to
assist
the
Group
in
meeting
its
financial
targets,
while minimising
potential
adverse
effects
on
financial
performance.
Its
functions
include
the
review
of
the
use
of hedging
derivative
instruments,
credit
risk
policies
and
future
cash
flow
requirements.

| 2015 Annual Report 55

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

20:
FINANCIAL
RISK
MANAGEMENT
(CONT)**

**Specific

Financial
Risk
Exposures
and
Management**

The
main
risks
the
Group
is
exposed
to
through
its
financial
instruments
are
credit
risk,
liquidity
risk
and
market risk
consisting
of
interest
rate
risk,
foreign
currency
risk
and
other
price
risk
(commodity
and
equity
price
risk).

There
have
been
no
substantive
changes
in
the
types
of
risks
the
Group
is
exposed
to,
how
these
risks
arise,
or
the Board’s
objectives,
policies
and
processes
for
managing
or
measuring
the
risks
from
the
previous
period.

**a. Credit

risk**

Exposure
to
credit
risk
relating
to
financial
assets
arises
from
the
potential
non-‐performance
by
counter parties
of
contract
obligations
that
could
lead
to
a
financial
loss
to
the
Group.

Risk
is
also
minimised
through
investing
surplus
funds
in
financial
institutions
that
maintain
a
high
credit rating,
or
in
entities
that
the
A&RC
has
otherwise
assessed
as
being
financially
sound.

_Credit

risk
exposures_

The
maximum
exposure
to
credit
risk
by
class
of
recognised
financial
assets
at
the
end
of
the
reporting period
excluding
the
value
of
any
collateral
or
other
security
held,
is
equivalent
to
the
carrying
amount
and classification
of
those
financial
assets
(net
of
any
provisions)
as
presented
in
the
statement
of
financial position.

No
collateral
is
held
by
the
Group
securing
receivables.

The
Group
only
has
significant
concentrations
of
credit
risk
with
any
single
counterparty
in
the
form
of
its bankers,
and
therefore
significant
credit
risk
exposures
to
Australia.
USD
amounts
under
purchase
contracts are
expected
to
be
settled
after
the
reporting
period.

There
are
no
trade
and
other
receivables
that
are
past
due
nor
impaired.

Credit
risk
related
to
balances
with
banks
and
other
financial
institutions
is
managed
by
the
A&RC
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
AA–.

The
following
table
provides
information
regarding
the
credit
risk
relating
to
cash
and
term
deposits
based on
Standard
&
Poor’s
counterparty
credit
ratings.

Cash and Term Deposits: Cash at bank and on hand Term deposits AA- rated	2015 $ 2014 $ 4,321,619 1,117,249 1,325,556 300,278
	5,647,175 1,417,527

56 2015 Annual Report |

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

20:
FINANCIAL
RISK
MANAGEMENT
(CONT)**

**b. Liquidity

risk**

Liquidity
risk
arises
from
the
possibility
that
the
Group
might
encounter
difficulty
in
settling
its
debts
or otherwise
meeting
its
obligations
related
to
financial
liabilities.
The
Group
manages
this
risk
through
the following
mechanisms:

preparing
forward-‐looking
cash
flow
forecasts
in
relation
to
its
operating,
investing
and
financing activities;
using
derivatives
that
are
only
traded
in
highly
liquid
markets;
monitoring
undrawn
credit
facilities;
obtaining
funding
from
a
variety
of
sources;
maintaining
a
reputable
credit
profile;
managing
credit
risk
related
to
financial
assets;
only
investing
surplus
cash
with
major
financial
institutions;
and
comparing
the
maturity
profile
of
financial
liabilities
with
the
realisation
profile
of
financial
assets.

The
Group’s
policy
is
to
ensure
that
it
will
always
have
sufficient
cash
to
allow
it
to
meet
it
liabilities
when they
become
due.

The
table
below
reflects
an
undiscounted
contractual
maturity
analysis
for
financial
liabilities.

Cash
flows
realised
from
financial
assets
reflect
management’s
expectation
as
to
the
timing
of
realisation. Actual
timing
may
therefore
differ
from
that
disclosed.
The
timing
of
cash
flows
presented
in
the
table
to settle
financial
liabilities
reflects
the
earliest
contractual
settlement
dates
and
does
not
reflect management’s
expectations
that
banking
facilities
will
be
rolled
forward.

| 2015 Annual Report 57

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

20:
FINANCIAL
RISK
MANAGEMENT
(CONT)**

Financial
liability
and
financial
asset
maturity
analysis
for
the
Consolidated
Group.

Financial liabilities due for payment Borrowings Trade and other payables Total contractual outflows Total expected outflows Financial assets – cash flows realisable Cash and cash equivalents Term deposits Trade and other receivables Total anticipated inflows Net inflow on financial instruments	Financial liabilities due for payment Borrowings Trade and other payables Total contractual outflows Total expected outflows Financial assets – cash flows realisable Cash and cash equivalents Term deposits Trade and other receivables Total anticipated inflows Net inflow on financial instruments	Within 1 Year 1 to 5 Years Over 5 Years Total 2015 2014 2015 2014 2015 2014 2015 2014 $ $ $ $ $ $ $ $ - 1,500,000 - - - - - 1,500,000 1,042,848 1,149,006 - - - - 1,042,848 1,149,006
		1,042,848 2,649,006 - - - - 1,042,848 2,649,006
		1,042,848 2,649,006 - - - - 1,042,848 2,649,006

		4,321,619 1,117,249 - - - - 4,321,619 1,117,249 1,325,556 300,278 - - - 1,325,556 300,278 826,165 219,120 - - - 826,165 219,120
		6,473,340 1,636,647 - - - - 6,473,340 1,636,647
		5,430,492 (1,012,359) - - - - 5,430,492 (1,012,359)

**c. Market

risk**

(i) Interest
rate
risk

Exposure
to
interest
rate
risk
arises
on
financial
assets
and
financial
liabilities
recognised
at
the end
of
the
reporting
period
whereby
a
future
change
in
interest
rates
will
affect
future
cash flows
or
the
fair
value
of
fixed
rate
financial
instruments.
The
Group
is
not
exposed
to
earnings volatility
on
floating
rate
instruments.

The
financial
instruments
that
primarily
expose
the
Group
to
interest
rate
risk
are
borrowings, cash
and
cash
equivalents
and
term
deposits.

Interest
rate
risk
is
managed
using
a
mix
of
fixed
and
floating
rate
debt,
if
required.
At
30
June 2015,
the
group
is
free
of
all
funding
related
debt.

58 2015 Annual Report |

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

20:
FINANCIAL
RISK
MANAGEMENT
(CONT)**

(ii) Foreign
exchange
risk

Most
of
the
Group’s
transactions
are
carried
out
in
AUD.
Exposures
to
currency
exchange
rates primarily
arise
from
the
purchase
of
vertical
wind
tunnel
equipment
from
SkyVenture International,
which
is
denominated
in
US
dollars.
Further,
the
Group
has
USD
cash,
which
is used
to
fund
the
purchase
of
vertical
wind
tunnel
equipment
in
the
United
States.

To
mitigate
the
Group’s
exposure
to
foreign
currency
risk,
non-‐AUD
cash
flows
are
monitored and
forward
exchange
contracts
are
entered
into
in
accordance
with
the
Group’s
risk management
policies.
Forward
exchange
contracts
are
mainly
entered
into
for
significant
long-‐ term
foreign
currency
exposures
that
are
not
expected
to
be
offset
by
other
currency transactions.
Exposure
to
foreign
exchange
risk
may
result
in
the
fair
value
or
future
cash
flows of
a
financial
instrument
fluctuating
due
to
movement
in
foreign
exchange
rates
of
currencies
in which
the
Group
holds
financial
instruments
which
are
other
than
the
AUD
functional
currency of
the
Group.

(iii) Other
price
risk

Other
price
risk
relates
to
the
risk
that
the
fair
value
or
future
cash
flows
of
a
financial instrument
will
fluctuate
because
of
changes
in
market
prices
largely
due
to
demand
and
supply factors
(other
than
those
arising
from
interest
rate
risk
or
currency
risk)
for
commodities.

The
Group
is
not
exposed
to
commodity
price
risk.
The
Group
is
not
exposed
to
securities
price risk
on
investments
held
for
trading
over
the
medium
to
longer
terms.

_Sensitivity

analysis_

The
following
table
illustrates
sensitivities
to
the
Group’s
exposures
to
changes
in
interest
rates, and
exchange
rates.
In
respect
of
the
exchange
rates,
the
table
summarises
the
sensitivity
of
the balance
of
financial
instruments
held
at
the
reporting
date
to
movement
in
the
exchange
rate
of the
US
dollar
to
the
Australian
dollar,
with
all
other
variables
held
constant.
The
table
indicates the
impact
on
how
profit
and
equity
values
reported
at
the
end
of
the
reporting
period
would have
been
affected
by
changes
in
the
relevant
risk
variable
that
management
considers
to
be reasonably
possible.

These
sensitivities
assume
that
the
movement
in
a
particular
variable
is
independent
of
other variables.

| 2015 Annual Report 59

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

TES TO THE FINANCIAL S	TATEMENT	S For the ended 3
NOTE 20: FINANCIAL RISK MANAGEMENT (CONT)	Profit	Equity
Year ended 30 June 2015	$	$
+/–1% in interest rates	56,472	56,472
+/–10% in devaluation of the AUD	24	24
Year ended 30 June 2014
+/–1% in interest rates	14,175	14,175
+/–10% in devaluation of the AUD	86,762	86,762

There
have
been
no
changes
in
any
of
the
methods
or
assumptions
used
to
prepare
the
above
sensitivity
analysis from
the
prior
year.
These
movements
are
considered
to
be
reasonably
possible
based
on
observation
of
current market
conditions.

**Fair

Values**

_**Fair

value
estimation**_

The
fair
values
of
financial
assets
and
financial
liabilities
are
presented
in
the
following
table
and
can
be
compared to
their
carrying
amounts
as
presented
in
the
statement
of
financial
position.
Fair
value
is
the
amount
at
which
an asset
could
be
exchanged,
or
a
liability
settled,
between
knowledgeable,
willing
parties
in
an
arm’s
length transaction.

Fair
values
derived
may
be
based
on
information
that
is
estimated
or
subject
to
judgment,
where
changes
in assumptions
may
have
a
material
impact
on
the
amounts
estimated.

Areas
of
judgement
and
the
assumptions have
been
detailed
below.
Where
possible,
valuation
information
used
to
calculate
fair
value
is
extracted
from
the market,
with
more
reliable
information
available
from
markets
that
are
actively
traded.
In
this
regard,
fair
values for
listed
securities
are
obtained
from
quoted
market
bid
prices.

Where
securities
are
unlisted
and
no
market quotes
are
available,
fair
value
is
obtained
using
discounted
cash
flow
analysis
and
other
valuation
techniques commonly
used
by
market
participants.

Differences
between
fair
values
and
carrying
amounts
of
financial
instruments
with
fixed
interest
rates
are
due
to the
change
in
discount
rates
being
applied
by
the
market
since
their
initial
recognition
by
the
Group.

Most
of
these
instruments,
which
are
carried
at
amortised
cost
(i.e.
term
receivables,
held-‐to-‐maturity
assets,
loan liabilities),
are
to
be
held
until
maturity
and
therefore
the
fair
value
figures
calculated
bear
little
relevance
to
the Group.

60 2015 Annual Report |

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

20:
FINANCIAL
RISK
MANAGEMENT
(CONT)**

Consolidated Group Note Financial assets Cash and cash equivalents (i) Term deposits (i) Trade and other receivables (i) Total financial assets Financial liabilities Trade and other payables (i) Borrowings (iii) Total financial liabilities	2015 2014 Carrying Amount $ Fair Value $ Carrying Amount $ Fair Value $ 4,321,619 4,321,619 1,117,249 1,117,249 1,325,556 1,325,556 300,278 300,278 826,165 826,165 219,120 219,120 6,473,340 6,473,340 1,636,647 1,636,647 2,042,848 2,042,848 1,149,006 1,149,006 - - 1,500,000 1,500,000
	2,042,848 2,042,848 2,649,006 2,649,006

The
fair
values
disclosed
in
the
above
table
have
been
determined
based
on
the
following
methodologies:

(i) Cash
and
cash
equivalents,
term
deposits,
trade
and
other
receivables,
and
trade
and
other payables
are
short-‐term
instruments
in
nature
whose
carrying
amount
is
equivalent
to
fair value.
Trade
and
other
payables
exclude
amounts
provided
for
annual
leave,
which
is
outside the
scope
of
AASB
(ii) Convertible
Note
Finance
Facility
fair
value
approximates
carrying
amount.

**NOTE

21:
AUDITOR’S
REMUNERATION**

NOTE 21: AUDITOR’S REMUNERATION
Remuneration of the auditor for: – Audit fees – Half year review – Taxation compliance – Other advisory services	2015 $ 2014 $ 45,000 40,000 22,000 18,807 7,500 - 2,340 2,400
	76,840 61,207

| 2015 Annual Report 61

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

22:
EARNINGS
PER
SHARE**

Earnings per share (cents per share) From continuing operations: - basic earnings per share - diluted earnings per share a. Reconciliation of earnings to profit or loss: Profit Earnings used to calculate basic EPS Earnings used in the calculation of dilutive EPS b. Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS Weighted average number of dilutive performance rights outstanding Weighted average number of ordinary shares outstanding during the year used in calculating dilutive EPS	2015 Cents 2014 Cents (1.63) (3.45) (1.63) (3.45) 2015 $ 2014 $ (1,749,988) (2,714,016)
	(1,749,988) (2,714,016)
	(1,749,988) (2,714,016)
	No. No. 107,101,112 78,666,583 - -
	107,101,112 78,666,583

During
the
year,
350,000
performance
rights
were
granted
to
employees
(including
key
management
personnel) under
the
performance
rights
plan.
These
rights
are
considered
to
be
potential
ordinary
shares,
and
have
not
been included
in
the
determination
of
basic
earnings
per
share.
The
performance
rights
have
not
been
included
in
the diluted
earnings
per
share
calculation
as
they
are
considered
to
be
contingently
issuable
potential
ordinary
shares and
their
issue
is
contingent
upon
specified
conditions
in
addition
to
the
passage
of
time.
Details
relating
to
the performance
rights
are
set
out
in
Note
15.

**NOTE

23:
EVENTS
AFTER
REPORTING
DATE**

No
matters
or
circumstances
have
arisen
since
the
end
of
the
financial
year
which
significantly
affected
or
may significantly
affect
the
operations
of
the
consolidated
group,
the
results
of
those
operations,
or
the
state
of
affairs of
the
consolidated
group
in
future
financial
years.

62 2015 Annual Report |

For the year ended 30 June 2015

NOTES TO THE FINANCIAL STATEMENTS

**NOTE

24:
CONTINGENT
LIABILITIES**

As
disclosed
in
Note
1(r)
(ii)
and
Note
7,
the
terms
of
the
Penrith
Lease
were
negotiated
with
the
signing
a
the
new Deed
with
the
landlord,
Penrith
Rugby
League
Club
Limited.
The
requirement
to
make
good
the
premises
is
now subject
to
Landlord's
discretion.
Management
and
the
Directors
have
considered
the
new
terms
of
the
lease
and have
exercised
their
judgement
in
determining
that
the
landlord
is
unlikely
to
exercise
their
rights
to
require
the Company
to
make
good
the
facility
in
Penrith.
For
the
prior
corresponding
period,
the
Group
had
an
obligation
to remove
all
building
works
on
expiry
of
the
lease.
To
this
extent,
an
estimate
of
the
cost
to
remove
the
VWT
and
its related
Building
Infrastructure
was
determined
to
be
$2,144,290
for
the
year
ended
30
June
2014.
This
liability
is now
contingent
on
the
Landlord
exercising
their
rights
and
requiring
the
Group
to
make
good
the
premises.

The
Group
does
not
have
any
other
contingent
liabilities
at
the
reporting
date.

| 2015 Annual Report 63

For the year ended 30 June 2015

DIRECTORS’ DECLARATION

In
accordance
with
a
resolution
of
the
directors
of

Indoor
Skydive
Australia
Group
Limited,
the
Directors
of
the Company
declare
that:

The
financial
statements
and
notes,
as
set
out
on
pages
23
to
63,
are
in
accordance
with
the Corporations Act
2001 and:
a. comply
with
Australian
Accounting
Standards,
which,
as
stated
in
accounting
policy
Note
1
to
the financial
statements,
constitutes
compliance
with
International
Financial
Reporting
Standards
(IFRS); and
b. give
a
true
and
fair
view
of
the
financial
position
as
at
30
June
2015
and
of
the
performance
for
the year
ended
on
that
date
of
the
consolidated
group;
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;
and
The
Directors
have
been
given
the
declarations
required
by
s
295A
of
the Corporations
Act
2001 .

==> picture [124 x 77] intentionally omitted <==

Ken
Gillespie Chairman 25
August
2015 Sydney

==> picture [150 x 67] intentionally omitted <==

Wayne
Jones Director
&
Chief
Executive
Officer

64 2015 Annual Report |

INDEPENDENT AUDITORS REPORT

==> picture [501 x 708] intentionally omitted <==

| 2015 Annual Report 65

INDEPENDENT AUDITORS REPORT

==> picture [501 x 708] intentionally omitted <==

66 2015 Annual Report |

ADDITIONAL INFORMATION

The
following
information
is
current
as
at 11
August
2015 :

**1. Shareholder

Information**

**Distribution

of
Shareholders**

Category (size of holding): 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over	Number Ordinary Shares 37 23,381 124 326,674 86 731,933 258 8,460,744 59 109,866,562
	564 119,409,294

The
number
of
shareholdings
held
in
less
than
marketable
parcels
is
47.

The
names
of
the
substantial
shareholders
listed
in
the
holding
company’s
register
are:

Shareholder:	Number Of Shares	% of Issued Capital
Birkdale Holdings (QLD) Pty Ltd	17,000,001	14.48
Excalib-Air Pty Ltd	16,060,000	13.68
Acorn Capital Limited	10,000,000	9.04
Greencape Capital Pty Ltd and Challenger Limited	9,648,000	8.22
LHC Capital Partners Pty Ltd	7,370,000	6.66
Paradice Investment Management Pty Ltd	7,462,929	6.25

**Voting

Rights**

ISA
Group
only
has
ordinary
shares
on
issue.
The
voting
rights
attached
to
each
ordinary
share
is
one vote
per
share
when
a
poll
is
called,
otherwise
each
member
present
at
a
meeting
or
by
proxy
has
one vote
on
a
show
of
hands.

| 2015 Annual Report 67

ADDITIONAL INFORMATION

20 Largest Shareholders – Ordinary Shares	20 Largest Shareholders – Ordinary Shares
Name		Number of Ordinary Fully Paid Shares Held	% Held of Issued Ordinary Capital
	NATIONAL NOMINEES LIMITED	19,173,192	16.06%
	BIRKDALE HOLDINGS (QLD) PTY LTD	17,000,001	14.24%
	EXCALIB-AIR PTY LTD	16,060,000	13.45%
	J P MORGAN NOMINEES AUSTRALIA LIMITED	12,693,727	10.63%
	HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	7,097,280	5.94%
	UBS NOMINEES PTY LTD	6,844,761	5.73%
	QUAD INVESTMENTS PTY LTD	2,916,667	2.44%
	BNP PARIBAS NOMS PTY LTD	2,863,843	2.40%
	CITICORP NOMINEES PTY LIMITED	2,684,812	2.25%
	LYNDCOTE HOLDINGS PTY LTD	2,521,667	2.11%
	IFLY AUSTRALIA PTY LIMITED	2,500,000	2.09%
	PROJECT GRAVITY PTY LTD	1,575,568	1.32%
	HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED COMNWLTH SUPER CORP A/C> 1,271,219 CITICORP NOMINEES PTY LIMITED STATE INV A/C> 1,189,137 AUSTRALIAN INDOOR SKYDIVING PTY LTD FAMILY A/C> 1,175,568 R & K HOOD INVESTMENTS PTY LIMITED P/L S/F A/C> 1,000,000		1.07% 1.00% 0.98% 0.84%
	SABRE ONE INVESTMENTS PTY LTD 961,803		0.81%
	MR GREGORY KENNETH JACK	850,000	0.71%
	NULIS NOMINEES (AUSTRALIA) LIMITED MAST PLAN SETT A/C>	757,000	0.63%
	MR BRETT AARAN SHERIDAN	415,000	0.35%
		101,551,245	85.05%

The
name
of
the
company
secretary
is
Fiona
Yiend.

68 2015 Annual Report |

ADDITIONAL INFORMATION

The
address
of
the
principal
registered
office
in
Australia
is
Level
2,
201
Miller
Street
North Sydney
NSW
Telephone
02
9325
Registers
of
securities
are
held
at
Grosvenor
Place,
Level
12,
225
George
Street,
Sydney
NSW 2000.
Stock
Exchange
Listing

Quotation
has
been
granted
for
all
119,409,294
ordinary
shares
of
the
company
on
all
Member Exchanges
of
the
Australian
Securities
Exchange
Limited.

Unquoted
Securities

The
Company
has
on
issue
1,158,457
Performance
Rights
under
the
Indoor
Skydive
Australia Group
Limited
Performance
Rights
Plan.

There
are
no
options
over
unissued
shares.

| 2015 Annual Report 69

CORPORATE DIRECTORY

Directors	Kenneth GILLESPIE	Kenneth GILLESPIE
	Wayne JONES
	DannyHOGAN
	Stephen BAXTER
	David MURRAY
	Malcolm THOMPSON (alternate for Stephen Baxter)
Company Secretary	Fiona YIEND

Registered Office	Indoor Skydive Australia GroupLtd
	Level 2 201 Miller Street
	North SydneyNSW 2060

Principleplace of business	Indoor Skydive Australia GroupLtd
	Level 2 201 Miller Street
	North SydneyNSW 2060

Share register	Boardroom Pty Limited Level 12 225 George Street SydneyNSW 2000

Auditor	RSM Bird Cameron Partners
	Level 12 60 Castlereagh St
	SydneyNSW 2000

Bankers	National Australia Bank

Stock exchange listing code:	IDZ


Website		www.indoorskydive.com.au

70 2015 Annual Report |

==> picture [532 x 842] intentionally omitted <==

Indoor Skydive Australia Group Ltd Level 2, 201 Miller Street North Sydney NSW 2060

www.indoorskydiveaustralia.com.au

AI assistant

XREALITY GROUP LTD — Annual Report 2015

66105_rns_2015-08-24_109dbf14-b7d8-4296-b6fb-a15f070e2f04.pdf

CONTENT

Dear Valued Shareholder

SOME HIGHLIGHTS

AUSTRALIAN TUNNEL ROLL OUT

LOOKING FORWARD

OUR RESULTS

Malcolm Thompson

DIRECTORS’ REPORT

DIRECTORS

Ken Gillespie AC, DSC, CSM Chairman Appointed 18 October 2012

Wayne Jones

Danny Hogan MG

Stephen Baxter

Non-Executive Director

David Murray AO

Malcolm Thompson

John Diddams

COMPANY SECRETARY

Fiona Yiend

DIRECTORS’ MEETINGS

**DIRECTORS’

DIVIDENDS

**PRINCIPAL

**REVIEW

CHANGES IN THE STATE OF AFFAIRS

SUBSEQUENT EVENTS

ENVIRONMENTAL REGULATION

DIRECTORS’ AND OFFICERS’ INSURANCE

FUTURE DEVELOPMENTS

REMUNERATION REPORT (AUDITED)

PROCEEDINGS ON BEHALF OF THE COMPANY

AUDITOR

INTERESTS IN ISA GROUP SECURITIES

**NON-­‐AUDIT

**AUDITOR’S

**ROUNDING

**BUY

REMUNERATION REPORT (AUDITED)

REMUNERATION REPORT (Audited)

Introduction

**Remuneration

**Key

**Remuneration

REMUNERATION REPORT (Audited) Continued

**Director

**Executive

REMUNERATION REPORT (Audited) Continued

**Remuneration

Directors

Executives

Performance rights holdings of KMP

Shareholdings of KMP

STI Outcomes

LTI Outcomes

**Employment

**Related

CONSOLIDATED STATEMENT

CONSOLIDATED STATEMENT

CONSOLIDATED STATEMENT

CONSOLIDATED STATEMENT

**NOTE

**Basis

**a. Principles

**NOTE

_**Business

Goodwill

**NOTE

**b. Income

**NOTE

_**Tax

**c. Property,

_**Plant

**NOTE

Depreciation

d. Leases

**NOTE

_**Functional

XREALITY GROUP LTD Annual Report 2015

**NON-‐AUDIT

**Share-‐based

_**(i) Equity-‐Settled