CONTENTS 
 
 
Strategic Report 
01 Key Strengths 
02  Highlights  
03  Chairman’s Statement 
04 Chief Executive’s Review 
06 Market Overview 
06 Key Performance Indicators  
07 Our Business Model and Strategy 
07 Outlook 
08 Financial Review 
11 Sustainability 
Governance 
13 Board of Directors  
14 Chairman’s Introduction to Governance 
15 Corporate Governance Report 
19 Audit Committee Report 
20 Nominations Committee Report  
21 Technical Committee Report 
22 Remuneration Committee Report 
25 Report of the Board of Directors 
27 Statement of Directors’ responsibilities 
Financial Statements 
28 Independent Auditor’s Report 
29 Consolidated Income Statement 
30  Consolidated Statement of Financial Position  
31 Company Statement of Financial Position 
32  Consolidated and Company Statement of Cash Flows  
33 Consolidated and Company Statement of Changes in Equity 
34 Notes to the Accounts 
   STRATEGIC REPORT 
KEY STRENGTHS 
 
 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
1
 
1. Quality 
Our network mirrors the quality of service  
that terrestrial communications offer. We have 
market beating Service Level Agreements and 
no in-country coverage gaps. 
 
2. Flexibility 
Avanti has a unique Cloud-based customer 
interface that provides a single point of co-
ordination and control, allowing partners to 
become virtual network operators without the 
need to deploy their own capital or expertise. 
 
3. Innovation 
We’ve developed proprietary and patented 
technology which is deployed throughout  
our network. 
 
 
4. Very high throughput 
The HYLAS fleet uses Ka-band which enables 
our High Throughput Satellites (“HTS”) to 
transmit over 10 times more data per satellite 
than legacy systems. 
 
5. High speed 
Our network can provide download speeds  
of up to 380Mbps, no matter how challenging 
the location. 
 
 
6. Affordability 
Ka-band HTS services are far cheaper than 
traditional and HTS Ku-band systems. 
 
 
  STRATEGIC REPORT 
HIGHLIGHTS 
2 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
 Revenue of $82.8m for the full year (2015: $85.2m)  
 Revenue from capacity, services & equipment up 24% to $74.5m (2015: $60.1m) 
 Contract wins with key target customers including Everything Everywhere 
 Cash at year end $56.4m (2015: $122.2m) 
 Net debt
1 
at year-end of $588.9m (2015: $406.2m) 
 Loss for the year $69.2m (2015: $73.3m) 
 Top-20 Customer Bandwidth Revenue Growth
2
 of 50% (2015: 54%)  
 Year-end fleet utilisation
2
 up to the 25% to 30% band (2015: 20% to 25%) 
 Pro-forma current fleet utilisation
3 
was 35% to 40% (2015: 20% to 25%) 
1
 Net debt comprises current and non-current loans and borrowings less cash and cash equivalents 
2
 Top-20 Customer Bandwidth Revenue Growth and Year-end fleet utilisation are defined on page 6  
3 
Including full pro forma impact of future contracted customer ramps on the current fleet as described on page 6 
  STRATEGIC REPORT 
CHAIRMAN’S STATEMENT 
 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
3
 
Avanti made good progress in winning new key 
accounts in its Carrier and Government business, and 
the reduction in competition in both Europe and Africa 
has helped the broadband business. 
As announced in July 2016, the economic backdrop for the year 
was challenging and both currency depreciation and credit terms 
impacted on the Group’s working capital position. Post period end, 
Avanti’s financial position es suffered disruption when the additional 
debt facilities sought were not forthcoming on suitable terms the 
provider of launch finance for HYLAS 4 effectively withdrew its 
offer of essential finance at the last minute in the aftermath of the 
EU referendum vote.  
However, after a period of very hard work, our existing bondholders 
long term investors have supported the Company with commitments 
for the proposed refinancing transaction as announced on 
20 December 2016 (the “Refinancing Transaction”) which, subject 
to completion of a the proposed Refinancing Transaction process 
expected to complete in January, Avanti will have the runway it 
needs to launch HYLAS 4 and realise its ambition to fill its fleet.  
Notwithstanding this unwelcome distraction, Avanti’s business 
made some good progress in 2016 in developing its markets. 
The network continues to perform at a very high level, meaning 
that customers are pleased with quality of service, and the 
Company is able to solve customer issues and requirements 
to a standard that competitors are not able to meet. 
The best example of this was the landmark contract win with 
Everything Everywhere (EE). As part of the Home Office’s Emergency 
Services Network programme, Avanti is providing to EE satellite 
connectivity at almost 1,000 base stations in the UK in a seven-
year contract to help deliver a ubiquitous nationwide 4G service. 
We believe this is the largest satellite 4G backhaul project of its 
kind in the world. It clearly demonstrates Avanti’s pioneering 
service in changing the role that satellite technology plays in 
the telecoms market.  
We have now invested over $1.2bn in developing a business that 
can meet the huge latent demand for affordable connectivity in 
high growth markets across EMEA. Africa is expected to be the 
fastest growing data market in the world and with the majority of 
its capacity dedicated to Africa, Avanti is playing an important 
role and has developed strong partnerships with the largest telcos 
in our core markets. A successful conclusion to the proposed 
Refinancing Transaction will provide the capital for Avanti to meet 
its business plan and I look forward to putting a turbulent year 
behind us and resuming our focus on growth. 
During the year John Brackenbury and Matthew O’Connor left the 
board and I would like to thank them for their long years of service.  
I would also like to thank our employees, customers, suppliers and 
investors for their ongoing support. 
 
Paul Walsh 
Chairman 
  STRATEGIC REPORT 
CHIEF EXECUTIVE’S REVIEW 
4 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
Our satellites provide high performance, affordable 
connectivity to governments, businesses and 
individuals across EMEA either directly through 
satellite dishes installed at the user location, or by 
providing backhaul connectivity to mobile networks.  
Avanti reaches end users through national and international Service 
Providers and we count many of the biggest and best telecoms 
network operators as core customers. 
We made encouraging progress in each of our target market 
sectors this year.  
In Broadband, we won significant new business in Europe, in deals 
to migrate over 15,000 end user customers away from competitor 
networks as well as winning new subscribers. Spain and Italy are 
markets that showed strong improvement in the year. The sale by a 
competitor of its Ka-band satellite for use in other markets resulted 
in new broadband customers joining our network. Prospective 
competition also decreased in Africa when one of two competing 
Ka-band satellites for West Africa failed. The launch of a new 30Mb 
service is also now making a positive impact on growth in the UK 
and Germany. In Africa, we are deploying a broadband product 
called ECO (“Every Child Online”) which provides a very low cost 
broadband service, whilst also providing connectivity to schools. 
ECO is a wi-fi hot spot hosted by the school. Community users can 
use a proprietary Avanti app which works on low cost smart phones 
to buy, or trade, peer to peer credits which enable them to buy very 
small units of broadband access. We have won contracts to deploy 
this in over 2,500 schools and expect growth in 2017. 
In Government, we had an encouraging year. Our defence business 
grew significantly, with several country-contract customers now 
signed up for sizeable secure services applications. In civil, we 
are providing large scale connectivity to government offices in all 
of our core markets in Africa. The market for connectivity in schools 
is expected to grow strongly and we won several national schools 
projects (for simple connectivity, not just ECO). 
In Enterprise, our network providing digital transmission to  
cinemas is now in over 300 venues. We won new business in  
Africa to support remote mining and energy sites, and machine to 
machine communications – the “internet of things” – is becoming  
a significant market.  
In Carrier Services, our contract with EE is a landmark transaction. 
As part of the British Government’s Emergency Services Network, 
Avanti is providing 4G backhaul services to almost 1,000 mobile 
towers. Connecting a 4G network to a satellite network is highly 
sophisticated engineering and Avanti was the only company in 
Europe capable of delivering the services. It is a valuable multi year 
contract but also provides Avanti with a major marketing advantage 
around the EMEA region. 
During the year our distribution strategy evolved, mainly in 
Broadband and Enterprise. We are seeing welcome consolidation 
in our distribution channels, as large service providers buy the 
customer bases of smaller ones. In some regions we are actively 
encouraging this as it generates an economy of scale benefit for 
Avanti in servicing fewer service providers who make larger 
commitments. In some cases we have, and will continue to offer 
Master Distribution or quasi exclusive status to Service Providers 
who can buy substantially all of the capacity in a beam or territory 
and several such deals are under negotiation. 
An example of this in 2016 was the purchase by Eurona Wireless 
Telecom (“Eurona”), a Spanish based ISP, of the exclusive rights  
in perpetuity to sell capacity on any Avanti platform in Iberia 
specifically for use in the consumer broadband market. Eurona 
have a very large and well established customer base in the 
region and this arrangement provided them with an opportunity 
to strengthen their position in their local market and segment. 
Following this deal, Eurona have acquired one of their main regional 
competitors and a number of smaller players. This arrangement 
was the first step for Avanti in securing Eurona as a significant new 
partner and lays strong foundations to making significant headway 
in the Iberian market.  
To win volume in certain markets where end-customers are highly 
price sensitive – such as broadband in Europe - we adjusted our 
prices during the year. Our products are sold as Mb or managed 
accounts or as fully integrated projects but we calculate the Price, 
or Yield, per MHz per month. Yield was in the $1,600-$1,800 band 
during 2016 (2015: $1,800-$2,000).  
Demand is growing from an increasingly high quality customer 
base and a demand and supply balance is emerging.  
Net working capital increased during the year with receivables 
increasing to $79.5m (2015: $35.5m) and payables increasing to 
$82.8m (2015: $31.9m). The receivables balance increased mainly 
as a result of contracts reaching milestones at the end of the final 
quarter which resulted in invoicing or revenue accruals. Of the 
receivables balance, $27.7m was accounted for by accrued 
income (2015: $10.6m), $16.4 m of which was due from investment 
grade counter parties, either Government customers or large 
corporate customers where the underlying customer is a 
Government.  
As announced in July 2016, the economic backdrop for the year 
was challenging and both currency depreciation and credit terms 
impacted on the Group’s working capital position. Post period end, 
Avanti’s financial position suffered disruption when the additional 
debt facilities sought were not forthcoming on suitable termsin the 
aftermath of the EU referendum vote.  
   STRATEGIC REPORT 
CHIEF EXECUTIVE’S REVIEW CONTINUED 
 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
5
 
However, after a period of very hard work, our existing bondholders 
have supported the Company with commitments for the proposed 
refinancing transaction as announced on 20 December 2016 (the 
“Refinancing Transaction”). Subject to completion of the proposed 
Refinancing Transaction process expected to complete in January, 
Avanti will have the runway it needs to launch HYLAS 4 and realise 
its ambition to fill its fleet.  
The financial uncertainty of 2016 has impacted Avanti’s short term 
growth rate but with strong support from long term investors, on 
completion of the financial restructuring, we will have what we need 
to realise our ambitions.  
Finally, our founder Director Alan Foster, who retired in 2015, 
passed away this year. He is greatly missed. 
David Williams  
Chief Executive  STRATEGIC REPORT 
MARKET OVERVIEW 
 
6 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
Satellites provide data communications and 
broadcasting services around the world. Satellites 
are used versus terrestrial infrastructure in situations 
where they can provide superior economics to 
customers or where other forms of communication 
are not available.  
Avanti operates in the fixed data communications part of the 
satellite market. Avanti has pioneered the use of Ka-band 
technology, which enables us to service this market at a lower 
cost than legacy operators.  
In turn, this vastly increases the addressable market for satellite 
data communications. Particularly in the high growth geographies 
where Avanti’s capacity is focused, but also closer to home where 
Avanti can offer universal superfast broadband across Europe.  
In these areas, dispersed populations and huge land areas make 
terrestrial communications uneconomic to deploy. For example, 
Africa has the same land mass as Europe, USA, China and India 
combined, yet a population the same as just India alone.  
As a result of this low population density, fibre will not be deployed 
in European equivalent scale in the local loop during the lifetime of 
our satellites and so Africa is moving directly to wireless. In wireless 
technology, Ka-band HTS satellite is the best way to deliver high 
capacity, low cost, data services.  
We estimate that the addressable market for our HTS services 
across the EMEA region, defined as users who both need satellite 
connectivity and have the ability to pay for it, is over 1,000 Gbps. 
Avanti’s HYLAS satellite fleet will provide up to 200 Gbps of data 
throughput. According to Cisco, Africa and Middle East is the 
fastest growing data market in the World with an anticipated growth 
rate of 402% to 2020, and therefore Avanti is well placed to serve 
this growth. 
 
 
 
 
 
KEY PERFORMANCE INDICATORS 
 
 
The Top-20 Customer Bandwidth Revenue Growth metric helps to 
track Avanti’s growth trajectory from core service sales. It is 
calculated by comparing the revenues from current leading 
customers on a last 12 month and constant currency basis, to the 
12 months preceding that. Revenues from this customer group 
were 50% higher in the 2016 financial year ($32.4m) versus 2015 
($21.5m).  
The Fleet Utilisation metric helps to track capacity uptake and  
gives an indication of revenue potential when Avanti’s fleet is 
mature. It is calculated by expressing utilised capacity as a 
percentage of total available capacity for the fleet of HYLAS 1 
(3 GHz), HYLAS 2 (11 GHz) and ARTEMIS (1 GHz). Avanti’s Fleet 
Utilisation was within the 25% to 30% band at the end of 2016, 
having increased from the 20% to 25% range in 2015. Fleet 
utilisation would be in the 35% to 40% range when the impact 
of contracted capacity that customers will ramp up to over the 
next 12-18 months is taken into account. 
 
Top-20 Customer Bandwidth Revenue Growth 
Tracks Avanti’s growth trajectory 
from core service sales, excluding 
non-recurring items 
50% 
2015: 54% 
Fleet Utilisation 
Tracks capacity uptake and gives 
an indication of revenue potential 
when Avanti’s fleet is mature 
25%-30% 
2015: 20%-25%  STRATEGIC REPORT 
OUR BUSINESS MODEL AND STRATEGY 
 
 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
7
 
Our business model  
Avanti generates revenue from the commercial exploitation of its 
space and network assets. These assets include its spectrum 
rights, satellites, intellectual property and ground station assets.  
Avanti generates revenue by charging its Service Provider 
customers for the use of its network and other assets. It charges in 
a number of ways: broadband packages, managed capacity, fully 
integrated project fees, raw capacity, pure spectrum and a number 
of other product categories and charging models to suit customer 
and market circumstances.  
Avanti connects people wherever they are – in their homes, 
businesses, in government and on mobiles. Through the HYLAS 
satellite fleet serving service providers in 118 countries, the network 
provides ubiquitous internet service to a quarter of the world’s 
population. Avanti delivers the level of quality and flexibility that 
the most demanding telecoms customers seek.  
Avanti’s technology platform is made up of three operational 
satellites in orbit, two under construction, a shared payload which 
launched service in 2016 and a ground segment infrastructure 
delivering comprehensive coverage of Europe, the Middle East 
and Sub-Saharan Africa.  
These assets are turned into a virtual network service accessible  
by our Service Provider customers. This is done using the Avanti 
Cloud, a software based control system that allows all parts of the 
Avanti network to be controlled and configured online.  
Avanti has developed proprietary and patented technology which  
is deployed throughout its network. This technology has been 
developed in house by its employees, who are amongst the  
most experienced in the industry.  
Avanti uses the high frequency Ka-band spectrum. This enables 
our High Throughput Satellites to transmit over 10 times more data 
per satellite than legacy systems, significantly reducing end-user 
costs and creating a larger addressable market.  
A combination of the efficiencies that are inherent in the use of  
Ka-band and Avanti’s high-powered network design also make our 
systems significantly more efficient than the emerging Ku-band high 
throughput networks.  
Our network can provide download speeds of up to 380Mbps and 
we can offer customers price reductions versus legacy Ku-band 
systems of up to 80%. 
Avanti’s business model is differentiated from those of legacy 
satellite operators primarily by its use of Ka-band technology and 
the Avanti Cloud. The Avanti Cloud enables the sale of satellite 
capacity as a service, rather than as an infrastructure purchase.  
Like other infrastructure companies, Avanti’s business model 
involves significant upfront capital expenditure to launch services 
and a largely fixed operating cost base. This is expected to result 
in initial cash outflows being followed by strong cash inflows as the 
business grows.  
The satellite industry has very high barriers to entry. These include 
the intellectual capital that is needed to design and run a satellite 
network and the requirement for orbital slots and spectrum. Avanti 
believes that terrestrial wireless services are rapidly consuming all 
of the available spectrum globally and recent industry debates 
show that there is great pressure on spectrum. Thus Avanti’s estate 
of spectrum rights should provide secure long term value to the 
business.  
Avanti seeks to lease and sell spectrum rights to third parties where 
opportunities arise and to commercially exploit its satellite and 
ground station assets outside of the operation of its own satellites, 
for example through satellite interim missions, consultancy projects, 
engineering services, satellite control services and ground station 
operation services.  
The risks to Avanti’s business model through technological change 
are low, primarily due to the very long lead times needed to develop 
and launch new satellite technologies. 
Our strategy  
Avanti’s strategy is founded on the assumptions that data usage will 
continue to grow strongly for the foreseeable future; that terrestrial 
infrastructure will not satisfy demand; and that high growth markets 
offer the highest returns.  
Avanti sells a managed service for fixed data connectivity. The go 
to market strategy is to sell to telecoms companies and specialist 
Service Providers for use in the Broadband, Enterprise, Government 
and Carrier Services verticals.  
The Group sells mainly through direct field sales with strong 
engineering pre-sales support. 
Outlook 
As described in the Chief Executive’s Statement, the business 
suffered from financial uncertainty in 2016 slowing its growth rate 
but over the medium term it expects to generate constant currency 
continuing business growth rate
1
 of at least 35% against a base of 
the current financial year’s total revenue of $82.8m.  
Avanti has a largely fixed cash cost base. There will be a modest 
increase in costs in 2017 as further investments are made in sales 
and marketing and ground operations ahead of the launches of 
HYLAS 3 and HYLAS 4.  
Management expects that the combination of revenue growth and 
largely fixed cash cost base will lead to strong operating cash flows 
in the medium-term. 
1
 Constant currency continuing business growth rate is a measure which refers 
to revenue for the year, excluding any large, infrequently occurring items with 
non-USD components of revenue figures for each year in question calculated 
at the most recent relevant foreign exchange rate.  STRATEGIC REPORT 
FINANCIAL REVIEW  
 
 
8 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
Going Concern and post balance sheet events 
On 7 July 2016, the Company announced that it was probable that 
additional funding would be required in order to ensure that the 
Group had sufficient liquidity to complete and launch HYLAS 4 in 
FY17. Avanti had based its funding plan on cash to be generated 
from the business which had grown more slowly than expected.  
On 11 July 2016, the Company announced the undertaking of a 
strategic review (the “Strategic Review”) to consider all financial 
and strategic options. As part of this exercise, Avanti conducted an 
in-depth review of its business plan, financial position and strategic 
options, including various routes to strengthen the Company's 
balance sheet. 
The output of the strategic review and the additional liquidity 
that is expected to be forthcoming from a proposed Refinancing 
Transaction has allowed the Directors to prepare the accounts 
on a Going Concern basis. This is explained in further detail in 
note 2 on page 34. 
In summary, the Directors have concluded that based on the 
Group’s expectation that the Consent Solicitation for the proposed 
Refinancing Transaction will be successful, in addition to the 
forecasts and launch of HYLAS 4, the Directors believe that the 
Group will be able to have sufficient liquidity and comply with the 
financial covenants under the amended and new Notes, and will be 
able to meet its obligations as they fall due, and accordingly have 
formed the judgement that it is appropriate to prepare the financial 
statements on a going concern basis. There can, however, be no 
certainty that the required consents will be received or that the 
proposed Refinancing Transaction will be successfully completed. 
Accordingly, successful completion of the proposed Refinancing 
Transaction and the substantial achievement of cash flow forecasts 
to enable the settlement of certain interest payments by the issue of 
Notes represent a material uncertainty that may cast significant 
doubt on the Group and the parent company’s ability to continue as 
a going concern. 
Revenue 
 Year ended  
30 June  
2016  
$'m 
Year ended  
30 June  
2015  
$'m 
Revenue     
Capacity, services & equipment 74.5 60.1 
Spectrum coordination – 25.1 
Sale of exclusivity rights 8.3 – 
Total Revenue 82.8 85.2 
Revenue in the year decreased 3% to $82.8m (2015: $85.2m). 
Revenue from capacity, services and equipment increased by 24% 
to $74.5m (2015: $60.1m). There was no revenue recognised from 
Spectrum co-ordination in the year (2015: $25.1m) and $8.3m from 
the sale of exclusivity rights (2015: $nil). 
On a constant currency basis total revenue fell by less than 1% to 
$82.8m ($83.1m), (i.e. translating 2015 non-USD revenues at the 
average rate for 2016). 
Costs 
Cash costs increased to $77.0m (2015: $71.3m). The costs of the 
business are largely fixed irrespective of the amount of capacity 
sold on the satellites. Costs will increase when a new satellite is 
launched when new ground infrastructure is brought online. Most of 
the staff costs and other operating expenses are incurred in pounds 
Sterling but reported in US Dollars, which can lead to some 
variation from period to period. 
The cost of sub-contractors required to deliver value-added 
services to Government customers fell from $11.4m to $7.8m as 
a result of the nature of projects undertaken during the year. This 
movement was broadly offset by an increase in costs related to the 
purchase of equipment for resale from $6.8m in 2015 to $13.5m in 
2016 as a result of higher levels of equipment sales, for example 
as a result of the initial roll-out of the Group’s operations with EE.  
EBITDA  
Earnings before interest, tax, depreciation and amortisation 
(“EBITDA”) fell to $7.3m (2015: $15.3m) as a result of the mix of 
revenue and increases in other operating expenditures to $16.3 m 
(2015: $13.3m). 
Loss 
The loss for the year reduced marginally to $69.2m (2015: $73.3m). 
Despite positive EBITDA in both 2016 and 2015 the income 
statement is still materially affected by the depreciation charge, 
primarily from the satellites of $47.3m (2015: $47.9m) and finance 
charges arising from the high level of debt of $40.9m (2015: 
$40.5m). 
With the launch of HYLAS 4 in 2017 the depreciation charge will 
increase. Similarly, the finance expense will also increase as the 
interest capitalised during construction will fall to the income 
statement.  
Loss per share  
Loss attributable to shareholders of $68.7m (2015: $73.1m), which 
included a net interest expense of $27.0m (2015: $40.5m), results in 
a loss per share of 49.27 cents (2015: loss per share of 61.5 cents).   STRATEGIC REPORT 
FINANCIAL REVIEW continued 
 
 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
9
 
Cash flow  
Net cash outflow from operating activities during the year ended 
June 30, 2016 was $92.3m as compared to $62.5m during the year 
ended June 30, 2015. The increase of $29.8m primarily relates to 
changes in working capital and in particular deferred payment 
terms on contracts closed in the final quarter. It is also relevant 
that the consideration received for sale of spectrum rights in 2015 
was a payload (HYLAS-2B) as opposed to cash.  
Net cash used in investing activities during the year ended June 30, 
2016 was $93.5m as compared with $96.7m during the year ended 
June 30, 2015. The decrease of $3.2m is due to lower capital 
milestones during the current year. 
Net cash flow from financing activities during the year ended 
June 30, 2016 was $121.4m as compared with $85.2m during the 
year ended June 30, 2015. The increase of $36.2m is as a result of 
the proceeds from the bond and equity issues in the year ($125.7m) 
compared to the $90.6m raised in the prior year. 
Balance sheet  
Total equity fell to $201.5m (2015: $304.7m) as a result of the loss 
for the year of $69.2m, the issue of share capital ($10.7m) and 
foreign exchange losses ($45.1m) arising from the re-translation 
of quasi-equity intercompany balances. 
Total assets increased to $942.3m (2015: $881.8m) primarily as 
a result of investments in satellite and ground assets. 
Net working capital increased during the year with trade and 
other receivables increasing to $79.5m (2015: $35.5m) and trade 
and other payables increasing to $82.8m (2015: $31.9m). The 
receivables balance increased mainly as a result of contracts 
reaching milestones at the end of the final quarter which resulted in 
invoicing or revenue accruals. Of the receivables balance $27.7m 
was accounted for by accrued income (2015: $10.6m), $16.4m of 
which was due from investment grade counter parties, either 
Government customers or large corporate customers where the 
underlying customer is a Government.  
Insurance  
Avanti maintains a full suite of insurance policies covering not only 
space assets, but also business interruption associated with the 
failure of its ground earth stations. The HYLAS 1in orbit insurance 
policy was renewed in November 2015 with an insured value of 
£112m and the HYLAS 2 policy was renewed in August 2015 for 
$306m. Artemis is insured for $30m. 
Backlog  
Our backlog comprises our customers’ committed contractual 
expenditure under existing contracts for the sale of bandwidth, 
satellite services, consultancy services and equipment sales over 
their current terms. Backlog does not include the value arising from 
potential renewal beyond a contract’s current term or projected 
revenue from framework contracts. We do include projected 
revenue from consultancy services provided to government 
customers at the rate of $3.3m per year, based on the average 
revenue generated by these services for the last five fiscal years. 
Our backlog totalled $290.4m as of June 30, 2016. 
Our backlog by end market as of June 30, 2016 was as follows  
(in millions, except percentages): 
End Market 
Amount ($’m) Percent 
Enterprise 107.2 37% 
Broadband 54.4 19% 
Carrier Services 27.0 9% 
Government 101.8 35% 
Total 290.4 100% 
Principal risks and uncertainties 
The Group faces a number of risks and uncertainties that may 
adversely affect our business, operations, liquidity, financial 
position or future performance, not all of which are wholly within our 
control or known to us. Some such risks may currently be regarded 
as immaterial and could turn out to be material. We accept risk is 
an inherent part of doing business, and we manage the risks 
based on a balance of risk and reward determined through careful 
assessment of both the potential likelihood and impact as well as 
risk appetite. The Group faces a number of ongoing operational 
risks including credit and foreign exchange risk.  
Global economy 
The global economy remains fragile and it continues to be difficult 
to predict customer demand. Avanti is susceptible to decreased 
growth rates within high growth markets and/or continued economic 
and market downturn in developing markets. The effects could lead 
to a decline in demand and deteriorating financial results, which in 
turn could result in the Group not realising its financial targets.  
   STRATEGIC REPORT 
FINANCIAL REVIEW continued 
 
 
 
10 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
Foreign exchange risk 
We operate internationally and are exposed to foreign exchange 
risk arising from various currency exposures, primarily with respect 
to the pound Sterling and the Euro. In order to hedge the foreign 
currency risk we enter into forward contracts or natural hedges as 
considered appropriate. These risks are assessed on a continual 
basis. Our reported results of operations and financial condition are 
affected by exchange rate fluctuations due to both transaction and 
translation risks. 
Interest rate risk 
We borrow in US Dollars and pounds Sterling at fixed rates 
of interest and do not seek to mitigate the effect of adverse 
movements in interest rates. Cash and deposits earn interest at 
fixed rates based on banks’ short-term treasury deposit rates. 
Short-term trade and other receivables are interest free. 
Credit risk 
Credit risk is the risk of financial loss arising from a counterparty’s 
inability to repay or service debt in accordance with contractual 
terms. Credit risk includes the direct risk of default and the risk of 
deterioration of creditworthiness. We believe we currently have no 
significant concentrations of credit risk. We assess the credit quality 
of major customers before trading commences, taking into account 
customers’ financial position, past experience and other factors. 
Generally when a balance becomes more than 90 days past its due 
date, we consider that the amount will not be fully recoverable. 
Liquidity risk 
Liquidity risk is the risk that we may have difficulty in obtaining 
funds in order to be able to meet both our day-to-day operating 
requirements and our debt servicing obligations. We manage our 
exposure to liquidity risk by regularly monitoring our liabilities. 
Cash and cash forecasts are monitored on a daily basis, and our 
cash requirements are met by a mixture of short term cash 
deposits, debt and finance leases. 
Future liquidity is also affected by the rate at which we fill the 
satellites and the yield achieved. 
See the going concern and post balance sheet section of this 
financial review in addition to the going concern accounting policy 
in Note 2 for a discussion of the planned financial restructuring and 
commentary of the Group’s medium term funding that this will 
provide on completion.  
 
Nigel Fox  
Group Finance Director STRATEGIC REPORT 
SUSTAINABILITY 
 
 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
11
 
Our approach to sustainability  
Avanti recognises that the long term sustainability of the Group 
is secured by managing the current impacts of its operations and 
products, and anticipating the future global business environment. 
Avanti’s sustainability strategy is designed to ensure that we have 
in place the following:  
 Responsible business practices to underpin business activities 
and support employees in making the right decisions to drive 
business performance;  
 A safe work environment for employees; and  
 A diverse range of talented employees with a broad range 
of skills and capabilities to deliver against global 
customer requirements.  
The Chief Executive, supported by the Board, has overall 
responsibility for the Group’s ongoing commitment to sustainability 
to ensure that there are appropriate policies, systems, reporting 
structures and metrics in place to achieve the Group’s sustainability 
objectives. All of Avanti employees also have some responsibility 
for sustainability, whether it is in their interactions with Service 
Providers or making efficiencies to support our environmental aims. 
The effectiveness of policies and processes is monitored and 
reviewed on an ongoing basis and risks or opportunities are 
assessed and managed. 
Avanti uses targets and metrics to measure our performance and to 
enhance future performance by learning from our past successes 
and challenges. Avanti evaluates possible sustainability issues 
based on their relevance to our current operations and the potential 
future impact on the business in order to ascertain our priorities. 
Priorities may change as the business develops and as we receive 
feedback from our stakeholders, and we therefore review these on 
a regular basis. For areas identified as having a high importance, 
we have either already developed strategies and have controls in 
place and are reporting on performance, or we are developing 
more detailed strategies within our existing systems to focus on 
specific aspects. By monitoring our performance in this way we will 
also get valuable feedback for use in the continual improvement of 
our policies, processes and procedures. Stakeholder engagement 
is important to Avanti.  
Talent/Avanti people  
To have a sustainable business, Avanti must attract, develop and 
retain talent and manage it across the business. Avanti contributes 
to the wider community through the course of its business by 
creating employment, offering work experience and graduate 
training opportunities to young people and by investing in good 
causes that are relevant to the business. 
Attract and retain  
Like many companies operating in the technology industry in the 
UK, Avanti has concerns about current and future talent shortages 
in the technology and engineering sectors. This is a particular issue 
as the labour market becomes more fluid. Maximising the available 
talent pool is at the heart of our recruitment strategy and Avanti 
uses a diverse range of recruitment methods to achieve this; 
including utilising social media and our own database of interested 
candidates, harnessing our employees’ networks, online advertising 
and building relationships with universities and other groups.  
The measure of voluntary employee turnover provides insight into 
retention at Avanti. Avanti monitors this on a monthly basis and 
regular feedback ensures that any potential issues are identified 
and dealt with. Avanti’s target for voluntary turnover (over a 
12 month period) is under 15%. This level reflects the current 
average levels of turnover experienced in London-based 
commercial businesses, with an appropriate level of churn 
to refresh the talent base.  
To improve retention, Avanti has developed internal 
communications and benefits and implemented a more structured 
development strategy. These changes have had a positive impact 
on retention. In the UK currently only 6% of the engineering 
workforce is female. Avanti continues to buck this trend. Engineers 
make up 60% of Avanti’s workforce and of those 11.6% are female. 
At Avanti we continue to actively promote the industry to young 
people and women through work with universities and colleges 
and to promote fair and open recruitment and selection practices. 
Avanti employs people from 33 countries speaking more than 27 
languages. Through encouraging diversity within our workforce, 
Avanti aims to reflect better the diversity of our customer base and 
in order to respond better to its demands.  
Working with young people  
Avanti aims to encourage the workforce of the future by supporting 
science, technology and engineering education through building 
links with local colleges and universities, in particular through 
involvement with the National Space Centre. Avanti also offers 
internships and voluntary work experience placements as well as 
providing expert technical talks to universities. Avanti’s graduate 
scheme attracted over 300 enquiries this year and provides bright 
graduates with training and hands on experience of technical roles 
within the satellite communications industry. Now in its fourth year, 
the graduate scheme provides the business with a strong pipeline 
of committed and competent engineers from a range of technical 
backgrounds.  STRATEGIC REPORT 
SUSTAINABILITY continued 
 
 
 
12 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
Avanti key behaviours  
Avanti’s key behaviours set out the principles and standards 
of business conduct expected of all employees wherever they 
operate and in whatever role. These behaviours are embedded 
into our induction and performance review processes. Avanti’s key 
behaviours play a large role in ensuring that the strong values of the 
Company are maintained as it grows in size. Avanti’s culture is an 
important factor in driving quality and flexibility for customers and 
other stakeholders in the business.  
Human rights  
Avanti requires that its business be conducted with honesty and 
integrity, and in full compliance with all applicable laws. Company 
policies establish clear ethical standards and guidelines for how 
we do business and establish accountability. The Company has 
clear accountability mechanisms in place to monitor and report on 
compliance with these directives. Additionally, Avanti supports and 
upholds the elimination of discriminatory practices with respect to 
employment and occupation, and promotes and embraces diversity 
in all aspects of its business operations. 
Developing talent  
Robust appraisal and performance management processes are 
in place to ensure that Avanti is able to deliver quality and flexibility 
throughout all areas of work by identifying and developing skills 
and knowledge within the business and empowering employees 
to suggest improvements and innovation. Avanti offers development 
opportunities across the business in technical and management 
skills to ensure that our workforce is ready to adapt to changes 
in technology and markets. In the 12 months leading up to July, 
Avanti provided over 400 training sessions for employees and the 
development activity is paying off. Avanti is proud of its record of 
developing talent and promoting from within; in the last year, 18% 
of all vacancies were filled by internal promotion.  
Key next steps  
Avanti continues to develop and diversify its recruitment practices 
and grow its links with relevant universities and other groups to 
promote engineering and the satellite industry. We also continue 
to review and improve our practices and policies to ensure that 
we remain an attractive employer as the labour market is predicted 
to become more challenging, and that our workforce is flexible and 
able to adapt quickly to change and growth. 
Health and safety  
Avanti wants employees to work in a safe, healthy environment. 
To achieve this we continue to review and update our policies, 
procedures and practices to assess and mitigate against any 
risks. Avanti has a robust health and safety audit and improvement 
process, and encourages employees to report potential issues 
and suggest improvements.  
Environment  
At Avanti we feel an environmental responsibility to both our 
Service Providers and their wider communities. Fortunately, our 
technology enables us and our Service Providers to behave in an 
environmentally responsible way. Services and applications such 
as teleworking, video conferencing, distance learning and e-
commerce allow Service Providers to exchange information and 
ideas without actually travelling, saving energy and reducing 
pollution. Today, Service Providers can use our wireless services to 
make the distribution of goods more efficient; help reduce energy 
use in workshops, offices and homes; and take advantage of 
telemedicine and distance learning. Measuring the environmental 
impact Avanti encourages all employees to avoid all unnecessary 
travel by providing full telephone or video conferencing in meeting 
rooms at Avanti sites. Employees are expected to consider the 
necessity of their journeys and to use alternative methods of 
communication where possible, such as remote accreditation of 
partners and supporting partners via video conferencing. We also 
carefully monitor energy usage and waste in our head office in 
London, and hope to roll out this monitoring across other sites in 
the near future. 
Stakeholders  
Avanti’s principal stakeholders include investors, employees, 
partners, suppliers, government and non-government organisations 
and the communities in which it operates. Avanti aims to 
communicate openly with stakeholders about its business in order 
to better understand their views and concerns, and explain the 
Company’s approach.  
Organisational departments  
The structure at Avanti is designed to promote flexibility and 
excellent customer service by encouraging accountability and 
allowing for focused working. This is achieved by grouping the 
functions whose main purposes are customer facing (the partner 
support, deployment and logistics teams), sales and revenue 
generation (marketing, sales and pre-sales) and technical 
operations and innovation (procurement, satellite operations, 
ground operations and networks). Interdepartmental working 
is encouraged through the use of project teams and regular 
meetings of the management team, as well as regular cross-
Company training. 
The Strategic Report on pages 2 to 12 was approved by the Board 
of Directors on 20 December 2016 and signed on its behalf by: 
David Williams    Nigel Fox 
Chief Executive    Group Finance Director 
  GOVERNANCE 
BOARD OF DIRECTORS 
 
 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
13
 
Paul Walsh+ • Δ  
Chairman  
Paul Walsh is the former CEO of Diageo Plc. He is also Chairman  
of Compass Group, Non-Executive Director of Unilever Plc, FedEx 
Corporation and HSBC PLC. Paul became Chairman of Avanti in 
March 2014. 
Paul is the Chairman of the Nominations Committee. 
David Williams  
Chief Executive   
David is a co-founder of the Company. Prior to this, he spent 
10 years working in the City financing telecommunications projects 
with Chase Manhattan, CIBC and Babcock and Brown. He 
graduated from Leeds with a degree in Economics and Politics. 
David Bestwick†  
Technical Director  
David is a co-founder of the Company. He graduated from 
the University of Leicester in 1987 with a BSc in Physics with 
Astrophysics. Following three years at Marconi Research Centre, 
he joined VEGA Group plc in 1990 where he worked on a wide 
range of satellite applications projects.  
David is responsible for all new technology and project 
developments. 
Nigel Fox  
Group Finance Director  
Nigel is a Fellow of the Institute of Chartered Accountants in 
England and Wales and has held various senior finance roles 
before joining Avanti Communications in 2007, including Chief 
Financial Officer of Climax Group; Group Financial Controller at 
ARC International; Finance Director of Ruberoid Building Products; 
and Group Financial Controller of Ruberoid plc.  
Nigel is responsible for all aspects of Finance and Administration  
of the Group. 
Professor Michael Walker OBE FREng†  
Non-Executive Director  
Michael has spent more than 25 years in industry, the last 10 years 
of which, until his retirement in September 2009, he was Group 
Research and Development Director for the Vodafone Group of 
companies, with responsibility for the Group’s research activities, 
intellectual property and technology standards worldwide.  
Michael also led technology innovation and managed engagement 
with start-up companies for Vodafone, and was a member of 
the Board of Vodafone Ventures, the venture capital arm of the 
company. He is a Vodafone Fellow and an Executive Technical 
Advisor to the company. He is Chairman of the Board of the 
European Telecommunications Standards Institute. He holds 
the Vodafone Chair in Telecommunications at Royal Holloway, 
University of London, as a part-time professor, and is a visiting 
professor at the University of Surrey. 
Michael was awarded an OBE in June 2009 for his services to the 
telecommunications industry. 
Michael is the Chairman of the Technical Committee. 
Richard Vos+ • †  
Non-Executive Director  
Richard is a telecommunications and satellite professional, with 
international experience, gained over 40 years working in the 
industry. His previous positions include Chairman of SatCom Group 
Holdings plc, Inmedia Communications Ltd and Inmarsat Ventures 
plc, and Head of Satellite Investments for BT, serving as Governor 
and Chairman for the UK and Ireland on the Board of INTELSAT.  
He is a Non-Executive Director at One Horizon Group Inc. In July 
2014, Richard was appointed Director of Tawsat Holdings Limited 
and Tawsat Limited. Both are satellite IP development and licensing 
companies, registered in Ireland.  
Richard is the Chairman of the Remuneration Committee. 
Paul Johnson+  
Non-Executive Director  
Paul is a Fellow of the Institute of Chartered Accountants in England 
and Wales. He spent 24 years as a Partner in KPMG working with 
companies in a variety of different industries in both the listed and 
private sectors. For the last 12 years he was Chairman of KPMG’s 
London Region and a member of KPMG’s UK Markets Executive.  
Paul is the Chairman of the Audit Committee. 
Charmaine Eggberry†  
Non-Executive Director  
Charmaine is a Non-Executive Director on the Boards of GB  
Group plc and Blue Prism Plc, Chairperson of Buzzmove, CEO  
of Plan B Consulting and a Board member and trustee of The 
Marketing Academy.  
Previously, Charmaine was Global Senior Vice President at Nokia 
and Managing Director & Vice President, EMEA at Research In 
Motion (BlackBerry). She also led Wayra, the digital accelerator, 
and was a Non-Executive Director of Wayra UnLtd, a joint venture 
between the UK Government and Telefónica. 
Andy Green• Δ  
Non-Executive Director  
Andy is Chairman of IG Group, DockOn, Inc. and the Digital 
Catapult. Until 2012, he was CEO of Logica plc.  
Prior to joining Logica, Andy was a Board member at BT plc. He is 
also co-Chair of the UK Space Leadership Council and a member 
of the Information Economy Council. 
+ Audit  
• Remuneration  
Δ Nomination  
† Technical GOVERNANCE 
CHAIRMAN’S INTRODUCTION TO GOVERNANCE  
 
 
14 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
Avanti firmly supports the upholding of good principles 
of corporate governance, not only because it is 
required for compliance purposes but because effective 
corporate governance serves to ensure that the 
business is run properly and in the interests of all  
of its stakeholders. 
The Board of Directors (the “Board”) recognises that it is 
accountable to shareholders for the Company’s activities and that 
it is responsible for the effectiveness of corporate governance 
practices. It remains committed to maintaining high standards of 
corporate governance and, whilst the Company is AIM listed and 
therefore not required to comply with the UK Corporate Governance 
Code (the “Code”), the Board seeks to comply with the Code in all 
material respects wherever it is practical and appropriate to do so 
having regard to the size of the Company and the resources 
available to it.  
As a Board, we monitor closely for developments in legislation, 
regulation and industry guidelines to ensure that our corporate 
governance policies are kept up to date and that the Board 
committees take into account all of the latest guidance in their 
areas of activity.  
The Board takes all appropriate measures to ensure that no conflict 
of interest can exist between members of the Board and other 
stakeholders in the Company.  
Throughout the year ended 30 June 2016, the Board considers that 
the Company complied in all material respects with those parts of 
the Code that it considers appropriate. This Corporate Governance 
Report, the Report of the Board and the Remuneration Report detail 
how the Company has applied the main principles of the Code. 
Paul Walsh 
Chairman  GOVERNANCE  
CORPORATE GOVERNANCE REPORT 
 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
15
 
Role of the Board  
The Board has a collective duty to promote the long term success 
of Avanti (the “Company”) for its shareholders. The Board sets the 
Company’s strategy and ensures that the necessary resources are 
in place to achieve the strategic priorities.  
In determining the long term strategy and objectives of the 
Company, the Board takes into account its duties and responsibilities 
not just to its shareholders but also to customers, employees and 
other stakeholders and makes its decisions objectively. It reviews 
management and financial performance, monitors the delivery of 
strategy and achievement of objectives and works within a rigorous 
framework of internal controls and risk management. The Board 
develops and promotes the collective vision of the Company’s 
purpose, objectives, values and key behaviours.  
Composition of the Board  
The Board comprises a Non-Executive Chairman, five other Non-
Executive Directors and three Executive Directors. During the year, 
John Brackenbury retired as a Non-Executive Director and Matthew 
O’ Connor retired as an Executive Director. The balance of the 
Board, together with the advice sought from other members of 
senior management and the Company’s external advisors, 
ensures that no individual has unfettered powers of decision. 
Chairman and the Chief Executive  
The Board is chaired by Paul Walsh who provides leadership that 
demonstrates the values and behaviours of the Company. The 
Chairman is responsible for creating the conditions for overall 
Board and individual Director effectiveness. He ensures that both 
Executive Directors and Non-Executive Directors make available 
sufficient time to execute their duties in an appropriate manner, that 
all Directors receive sufficient financial and operational information 
and that there is proper debate at Board meetings. He is also 
responsible, in consultation with the Chief Executive and the 
Company Secretary, for setting the agenda for the Board’s 
meetings.  
David Williams is the Chief Executive and, supported by the Group 
Finance Director and the Technical Director, he is responsible 
for the day-to-day management of the Company. He provides 
leadership to the Company to successfully plan and execute the 
objectives and strategy agreed by the Board. The roles of the 
Chairman and Chief Executive are separate with each having 
clearly defined duties and responsibilities. 
Non-Executive Directors  
The Company benefits from the extensive experience of the Non-
Executive Directors in areas critical to the long term future success 
of the Company, encompassing a deep understanding of the 
industry, technology, corporate strategy, finance and investment. 
The Non-Executive Directors help the Executive Directors by 
contributing independent challenge and rigour to the Board’s 
deliberations and assisting in the development of the Company’s 
strategy. In addition, they are responsible for monitoring the 
performance of the Executive Directors against agreed goals and 
objectives. Their views are essential in overseeing the performance 
of the Company.  
Induction and ongoing training  
All Directors have access to advice from the Company Secretary 
and independent professionals at the Company’s expense. Training 
is available for Directors as necessary. New Directors receive an 
induction programme and all the Directors are encouraged to 
continue professional education programmes.  
Matters reserved for the Board  
The Board recognises that, to ensure the long term success of 
the Company, certain specific matters should be reserved for 
the consideration and decision of the Board alone. Decisions 
specifically reserved for approval by the Board are formally 
recorded and include:  
• Annual and interim accounts and Financial Statements;  
• Dividend policy;  
• Board appointments;  
• Company strategy and annual operating budget;  
• Changes to the Company’s capital structure;  
• Changes to the Company’s management and control structure;  
• Major capital expenditure, acquisitions and disposals;  
• Treasury policies;  
• Risk management strategy;  
• Company corporate governance policy; and  
• Environmental, health and safety and sustainability policies.   GOVERNANCE 
CORPORATE GOVERNANCE REPORT CONTINUED 
 
16 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
Board meetings  
The Board met on seven occasions during the year. The Board also maintained an open dialogue throughout the year and contact by 
telephone occurred whenever necessary. 
Board attendance for the financial year  
1 July 2015 to 30 June 2016   Attended 
Chairman  Paul Walsh  7/7 
Executive Directors  David Williams  7/7 
 David Bestwick  7/7 
 Nigel Fox  7/7 
 Matthew O’ Connor (Resigned 31 March 2016) 4/4 
Non-Executive Directors  Richard Vos  6/7 
 Michael Walker 6/7 
 Paul Johnson  7/7 
 Charmaine Eggberry 7/7 
 Andy Green 7/7 
 John Brackenbury (Resigned 31 March 2016)  4/4 
 
During the year, the Chairman continued the practice of maintaining 
a 12 month agenda for Board and committee meetings. Agenda 
items included permanent items such as progress reports from the 
Executive Directors and the Company Secretary, as well as periodic 
items such as updates from the Board committees, review of the 
risk register and internal controls, strategy and succession 
planning.  
In advance of each meeting, the Board is provided with 
management reports and other relevant information in a timely 
manner and in a form and quality that it considers appropriate.  
The Chairman and the Board have confidence that the way in which 
the Board meetings are conducted ensures that they cover all the 
matters required to be discussed and that sufficient time is allowed 
for discussion of each matter at the most appropriate meeting in the 
year, enabling the members of the Board to discharge their duties 
as Directors effectively.  
The Company Secretary attends all Board meetings and is available 
to advise on any corporate governance issues that may arise.  
Re-appointment of Directors 
All Directors are required to retire every three years and may offer 
themselves for re-appointment, which is not automatic. As a 
Company with a long-term growth strategy, it is appropriate for 
Directors to serve on the Board for more than a single term, subject 
to continuing satisfactory performance.  
The Board is satisfied that all the Directors standing for re-election 
continue to perform effectively and demonstrate commitment to 
their roles, including commitment of time for Board and Board 
committee meetings as well as any other duties which may be 
undertaken by them from time to time.  
 
Board Committees  
The Board has established a number of committees to assist in the 
discharge of its responsibilities. The principal committees are the 
Audit Committee, the Nominations Committee, the Remuneration 
Committee and the Technical Committee. The responsibilities of 
each of these Board committees are set out in their individual Terms 
of Reference. The roles and responsibilities of the committees are 
discussed further below.  
Committee meetings are held independently of Board meetings  
and invitations to attend are extended by the committee Chairman 
to other Directors, the Company’s advisors and management  
as appropriate. 
Audit Committee  
The Audit Committee is comprised of three Non-Executive 
Directors: Paul Johnson, Richard Vos and Paul Walsh. The 
Committee is chaired by Paul Johnson. Through their other 
business activities, each member of the Committee has significant 
experience in financial matters. The Company considers that the 
composition of the Audit Committee is in accordance with the Code. 
Further information on the activities of the Committee is set out in 
the Audit Committee Report on page19.  
Nominations Committee  
The Nominations Committee is comprised of two Non-Executive 
Directors: Paul Walsh and Andy Green. It is chaired by Paul Walsh. 
For further information on the activities of the Committee please 
refer to page 20.  GOVERNANCE 
CORPORATE GOVERNANCE REPORT continued  
 
 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
17
 
Remuneration Committee  
The Remuneration Committee is comprised of three Non-Executive 
Directors: Richard Vos, Paul Walsh and Andy Green. It is chaired  
by Richard Vos.  
Executive Directors and senior management attend Remuneration 
Committee meetings at the invitation of the Committee  
Chairman only.  
The Remuneration Committee meets according to the Company’s 
requirements at least twice a year.  
The Remuneration Committee determines, within agreed Terms of 
Reference, specific remuneration packages for the Chairman, the 
Executive Directors and the officers of the Company. This includes 
implementation of Company share incentive plans. In accordance 
with the Committee’s Terms of Reference, no Director may 
participate in discussions relating to his or her own terms and 
conditions of service or remuneration.  
With regard to the remuneration policy, the Committee considers:  
 The pay scales applied to each Director’s package;  
 The proportion of the different types of reward within 
each package;  
 The period within which performance related elements  
become payable;  
 What proportion of rewards should be related to measurable 
performance or enhanced shareholder value, and the balance 
between short and long-term performance elements; and  
 Transparency of Directors’ remuneration in the annual  
Financial Statements.  
Further information on the activities of the Committee is set out  
in the Remuneration Committee Report on pages 22 to 24. 
Technical Committee  
The Technical Committee is comprised of three Non-Executive 
Directors, Michael Walker, Richard Vos and Charmaine Eggberry, 
the Technical Director and other senior technical management 
of the Company. It is chaired by Michael Walker. For further 
information on the activities of the Committee, please refer to 
page 21.  
Relations with shareholders  
The Board recognises the importance of establishing and 
maintaining good relationships with all of the Company’s 
shareholders. During the period under review, various Directors 
have met with analysts and institutional shareholders to keep 
them informed of significant developments and report to the 
Board accordingly on the views of these stakeholders.  
The Interim Report and the Annual Report and Accounts are 
the primary means used by the Board for communication during 
the year with all of the Company’s shareholders. The Board also 
recognises the importance of the internet as a means of 
communicating widely, immediately and cost effectively and a 
Company website (www.avantiplc.com) is maintained to facilitate 
communications with shareholders. 
Information available online includes copies of the full and half 
year Financial Statements, press releases and Company news, 
corporate governance information and key dates in the 
financial calendar.  
The Board is committed to the constructive use of the Annual 
General Meeting (“AGM”) as a forum to meet with shareholders 
and to hear their views and answer their questions. The 2016 AGM 
will be held on 29 December 2016 at 10.00 am.  
Shareholders are encouraged to attend the AGM and to participate 
in proceedings by asking questions during the formal part of the 
meeting, voting on resolutions put to the meeting and providing 
Board members with their views in informal discussions after 
the meeting. Notice of the AGM has been sent to shareholders 
and it is also available to download on the Company’s website.  
Financial reporting  
At the half year and the year end, all operating Group companies 
are required to produce Financial Statements to comply with local 
accounting regulations and to produce sufficient information 
to enable the central finance team to produce IFRS-compliant 
Consolidated Financial Statements. 
The Board presents a balanced and understandable assessment 
of the Company’s position and prospects in all interim and price 
sensitive public reports whilst also reporting to regulators all 
information required to be presented by statutory requirements.  GOVERNANCE 
CORPORATE GOVERNANCE REPORT continued  
 
 
18 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
Internal control and risk management  
The Board has overall responsibility for the Company’s system of 
internal control to safeguard Company assets and shareholders’ 
investments. The risk management process and systems of internal 
control are designed to manage rather than eliminate the risk of 
failure to achieve the Company’s objectives.  
The Board has reviewed the effectiveness of the system of internal 
control for the year ended 30 June 2016 and up to the date of the 
signing of the Annual Report and Accounts. The Board will continue 
to develop and implement internal control procedures appropriate 
to the Company’s nature and scale.  
The Company does not have an internal audit function due to the 
small size of the Company’s administrative function and the high 
level of Director review and authorisation of transactions. The Audit 
Committee believes that these internal controls are adequate for 
the Group’s current size and does not feel that a separate internal 
audit function is currently warranted. This situation is kept under 
regular review.  
The Board recognises that an essential part of its responsibility 
is the effective safeguarding of assets, the proper recognition of 
liabilities and the accurate reporting of results. The Company has 
a comprehensive system for regular reporting to the Board. This 
includes an annual planning and budgeting system with budgets 
approved by the Board.  
The financial reporting system compares against budget and prior 
year, and reconsiders its financial year forecast on a monthly basis.  
The Board has established a formal policy of authorisation setting 
out matters which require its approval and certain authorities 
delegated to the Executive Directors. 
The key features of the Group’s system of internal control are 
as follows:  
 Management responsibility and accountability: There are clearly 
defined management responsibilities, reporting lines and limits 
of authority. The Chief Executive and the Group Finance Director 
meet regularly with the Executive Directors and other members 
of senior management to review progress on financial, 
commercial, operational, supply chain, HR, health, safety and 
environmental issues as well as regulatory and legal compliance 
matters.  
 Strategy and planning: The Group updates its strategic plan 
each year and this is approved by the Board.  
 Budgeting and reporting: Detailed management accounts are 
prepared each month, consolidated and reviewed in detail with 
senior management.  
 Expenditure approval: Authorisation and control procedures 
are in place for capital expenditure and other major projects. 
There is also a process to review capital expenditure projects 
post completion to highlight any issues and improve future 
projects. Authorisation procedures for operating costs and 
contractual commitments are reviewed regularly.  
 
 Independence of the finance function: The finance function is 
encouraged to act independently of general management in the 
course of its preparation of monthly accounts and exercising of 
control procedures.  
 Insurance and risk management policies: This includes a formal 
annual risk review report to the Board. Regular meetings are 
held with insurance and risk advisors to assess the risks 
throughout the Group.  
 Documented policies: There are documented policies for a 
range of areas including HR matters, expenditure, treasury 
and financial reporting.  
 Cash: The cash and debt position at Group and operational level 
is monitored daily and any variances from forecast levels are 
investigated thoroughly. Working capital balances are reviewed 
on a monthly basis at Group level, and any significant variances 
are analysed and investigated.  
 Effectiveness: The Board continually reviews the effectiveness of 
the systems of internal control and risk management procedures 
throughout the year. 
 
Ethics  
The Group prides itself on carrying out its business in a fair, honest 
and open manner, ensuring that it complies with all relevant laws 
and regulations.  
Under the Companies Act 2006, a Director of a company must 
avoid a situation in which he or she has, or can have, a direct or 
indirect interest that conflicts or may possibly conflict with the 
interests of the company. The Company has a formal procedure in 
place to manage the disclosure consideration and, if appropriate, 
the authorisation of any such possible conflict. Directors are aware 
of the requirement to notify the Board as soon as they become 
aware of any possible future conflict or a material change to an 
existing authorisation. Only Directors who have no interest in the 
matter being considered are able to take the relevant decision. 
None of the Non-Executive Directors has any material business 
or other relationship with the Company or its management.  
Details of the Directors’ service contracts, emoluments, the interests 
of the Directors in the share capital of the Company and options to 
subscribe for shares in the Company are provided in the 
Remuneration Report on pages 22 to 24.  
Bribery Act 2010  
The Board performs an ongoing assessment of the risk environment 
and has implemented a framework to ensure that the Group trades 
in compliance with the UK Bribery Act 2010 and all other relevant 
anti-bribery and corruption legislation. GOVERNANCE 
AUDIT COMMITTEE REPORT  
 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
19
 
All members of the Audit Committee are independent Non-
Executive Directors. The Board is confident that the collective 
experience of the Audit Committee members enables them, 
as a group, to act as an effective Committee.  
By invitation, the meetings of the Audit Committee may be attended 
by the Chief Executive and Group Finance Director. The KPMG LLP 
audit engagement partner is present at the Audit Committee 
meetings to ensure full communication of matters relating to the 
audit. The Chairman of the Audit Committee meets regularly with 
the Group Finance Director and external Auditor.  
The Audit Committee has particular responsibility for monitoring the 
financial reporting process, the adequacy and effectiveness of the 
operation of internal controls and risk management and the integrity 
of the Financial Statements. This includes a review of significant 
issues and judgements, policies and disclosures. Its duties include 
keeping under review the scope and results of the audit and its cost 
effectiveness, consideration of management’s response to any 
major external audit recommendations and the independence 
and objectivity of the external Auditor.  
During the year to 30 June 2016 the Audit Committee reviewed 
and endorsed, prior to submission to the Board, half year and full 
year Financial Statements, interim management statements and 
results announcements. It considered internal management reports 
and risk management updates, agreed external audit plans, received 
updates on management responses to audit recommendations 
and approved the review of accounting policies. Progress on 
implementation of processes to meet the requirements of the 
UK Bribery Act 2010 was also provided to the Committee. 
Following the issue of high yield bonds in October 2013, the 
Company commenced limited quarterly reporting and the Audit 
Committee additionally required KPMG to carry out reviews on 
revenue recognition and analytical reviews of the quarterly 
Financial Statements with management. 
Going Concern 
As more fully explained in note 1 to the financial statements, in 
determining the appropriate basis of preparation of the financial 
statements, the Directors are required to consider whether the 
Group can continue in operational existence for the foreseeable 
future. 
In assessing the Group’s ability to meet its obligations as they fall 
due, management prepared cash flow forecasts based on the 
business plan for a period in excess of 24 months. Management 
considered various scenarios to test the Group’s resilience against 
operational risks including: 
 Adverse movements in Sterling and Euro exchange rates against 
US Dollar 
 Delays in the launch of HYLAS 4 
 Lower yield on capacity 
 Slower build in fleet / satellite utilisation 
Management reported to the Committee the results of the going 
concern assessment, noting to the committee that the Group’s 
Capital Structure after the planned debt facilities amendments and 
new money notes, together with the ability, conditional on certain 
cash flow forecasts, to PIK certain interest coupons, provides 
sufficient headroom to cushion against downside operational risks 
and reduces the risk of breaching the new debt covenants. 
The Committee challenged management on the key assumptions 
used in the cash projections and sensitivities applied to arrive at 
a downside scenario. The Committee was satisfied that the key 
assumptions had been appropriately scrutinised, stress tested and 
were sufficiently robust. The Committee was further satisfied that 
the going concern disclosures in the financial statements were 
appropriate and that an appropriate basis of preparation of the 
financial statements had been arrived at. However, the need for 
a successful completion of the financial restructuring (announced 
on 20 December 2016) is conditional upon the Consent Solicitation 
process and this, in addition to the substantial achievement of cash 
flow forecasts to enable settlement of certain interest payments 
by the issue of Notes represent a material uncertainty about the 
Group’s ability to continue as a going concern as explained in 
note 2 to the financial statements. 
The auditor explained their audit procedures on management’s 
going concern assessment and considered the Group’s disclosure 
on the subject. On the basis of their audit work, the auditor 
considered that the going concern basis of preparation of the 
financial statement is appropriate and included an emphasis of 
matter in relation to the material uncertainty regarding the need for 
a successful completion of the financial restructuring and the 
substantial achievement of cash flow forecasts to enable the 
settlement of certain interest payments by the issue of Notes. Refer 
to the auditor’s report on page 28 for the auditor’s opinion on the 
going concern assumption. 
External Auditor  
Auditor objectivity and independence is safeguarded through 
a variety of mechanisms. To ensure the Auditor’s independence, 
the Committee annually reviews the Company’s relationship with 
KPMG. Following the review in 2015, the Company concluded that 
it continues to have an objective and professional relationship with 
KPMG and that there are sufficient controls and processes in place 
to ensure the required level of independence. In addition, the 
Auditor is required to review and confirm its independence to the 
Committee on a regular basis.  
Non-audit services  
The Company’s Auditor may also be employed where, as a result  
of its position as Auditor, it either must, or is best placed to, perform 
the work in question. 
Paul Johnson 
Audit Committee Chairman  GOVERNANCE  
NOMINATIONS COMMITTEE REPORT  
 
20 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
The Nominations Committee comprises independent Non-Executive 
Directors. The Nominations Committee meets as and when 
necessary and details of the membership of the Committee are 
shown on page 20. The Nominations Committee has responsibility 
for nominating to the Board candidates for appointment as 
Directors, bearing in mind the need for diversity and a broad 
representation of skills across the Board.  
The Nominations Committee will also make recommendations 
to the Board concerning the re-appointment of any independent 
Non-Executive Director at the conclusion of his or her specified 
term, the election and re-election of any Director by shareholders 
and changes to senior management, including Executive Directors.  
Another area of activity, which the Committee debated, and which 
was also discussed with the full Board, related to Board diversity 
and agreement to the issue of a statement of how the Board 
considers diversity as part of its succession planning. Gender is 
one element of the considerations made in appointing senior 
management, Board appointees and as part of general recruitment 
practices across the Company. The Nominations Committee gives 
full consideration to succession planning in the course of its work, 
taking into account the challenges and opportunities facing the 
Company, how to take account of diversity, including gender, and 
what skills and expertise are needed on the Board and from senior 
management in the future. 
Paul Walsh 
Nominations Committee Chairman 
  GOVERNANCE 
TECHNICAL COMMITTEE REPORT 
 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
21
 
The Board of Avanti has established a Technical Committee  
to report on progress by the Company with all aspects of the 
technology that underpins its business.  
The activities of the Committee include: 
1. Reviewing progress on the development, deployment and 
operation of the technology that supports Avanti’s business  
on an ongoing basis;  
2. Monitoring all technological risks identified in the Company  
risk register;  
3. Assisting the Company with the resolution of technology 
problems and the realisation of technology opportunities;  
4. Assessing whether the technology employed is the best fit for 
the Avanti business, and that the technology team is strong 
enough to develop, deliver, operate and maintain it in the best 
interests of the business;  
5. Bringing to the attention of the Board any issues with technology, 
including disruptive technology which might have a significant 
impact on the business of the Company; and  
6. Preparing and maintaining a Technology Strategy for the 
Company which is continuously updated.  
The Technical Committee is chaired by Professor Michael Walker, 
with support from Richard Vos, Charmaine Eggberry, David 
Bestwick and senior executives from within the Company.  
This year the Technical Committee has focused its work on three 
main topics:  
1. Plotting a course to enable the Company to benefit from the 
integration of satellite technologies with future 5G terrestrial 
services;  
2. Overseeing the managed transition of the control of Avanti’s 
satellite fleet to in-house operations; and  
3. Providing realistic assessments of the potential competitive 
threat that the more speculative new satellite and terrestrial 
systems might actually pose.  
Overall the Technical Committee is pleased with the progress the 
Company has made in continuing to build on its technological base 
which is well adapted for the Company’s future growth. 
Professor Michael Walker OBE FREng 
Technical Committee Chairman  GOVERNANCE 
REMUNERATION COMMITTEE REPORT 
 
22 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
The Remuneration Committee comprises independent Non-Executive Directors only. The Committee, on behalf of the Board, meets as and 
when necessary to review and approve, as appropriate, the remuneration of the Executive Directors and senior management and major 
remuneration plans for the Company.  
The Committee consists of Richard Vos (Chairman), Paul Walsh and Andrew Green, who replaced John Brackenbury in March 2016. 
The Committee thanks John Brackenbury for his knowledgeable contribution over the past several years 
During the year, the Remuneration Committee met four times.  
Remuneration policy  
The Company’s policy on remuneration of Directors is to attract, retain and motivate the best people, recognising the input they make to 
the ongoing success of the business. Consistent with this policy, the remuneration and benefits package awarded to Directors is intended 
to be competitive and comprises a mix of performance related and non-performance related elements designed to incentivise Directors in 
the short and longer term, and align their interests with those of shareholders. Their remuneration accordingly consists of base pay, annual 
bonus, Long Term Incentive Plan (“LTIP”), share options, pension contributions and other benefits such as health care.  
Under the Company’s LTIP which came into operation in July 2013, shares will vest if specific targets are met after a fixed period of years 
after they are allocated. The targets set by the Remuneration Committee reflect the desired performance of the Company as it develops 
from a “start-up” to a more mature business.  
The above represents no change from the Company’s existing remuneration policy and no further change is anticipated in the coming 
year.  
Remuneration 2016  
The remuneration of the Directors for the year is set out below, the previous year’s figures being shown for comparison. Remuneration  
is paid in Sterling , but reported in US Dollars, the exchange rates used being USD 1.47 in 2016 and USD 1.57 in 2015. 
For the year ended 30 June 2016 
 
Salaries 
$ 
Bonus 
$ 
Other  
benefits 
$ 
Post-
employment 
benefits 
$ 
Total  
2016 
$ 
Total  
GBP 
£ 
Executive       
D J Williams  639,529   –   85,156   60,581   785,266   538,865  
D J Bestwick  475,242  –   57,247   88,955   621,444   424,031  
N A D Fox  366,386  –   42,335   49,157   457,877   313,305  
M J O'Connor (Resigned 31 March 2016)  263,771  –   26,189   26,588   316,549   215,156  
Non-Executive       
F E J G Brackenbury CBE  
(Resigned 31 March 2016)  76,300   –   10,655   –   86,955   58,325  
M Walker OBE FREng  106,174  –   –  –   106,174   72,089  
P Walsh  291,295  –  –  –   291,295   198,030  
C R Vos  66,769  –  –  –   66,769   46,103  
P R Johnson  90,421   –  –  –   90,421   61,470  
C Eggberry  73,681  –  –   1,324   75,005   50,991  
A Green  73,681  –  –  –   73,681   50,091  
Total  2,523,249  –   221,582   226,605   2,971,436   2,028,457 
 
   GOVERNANCE 
REMUNERATION COMMITTEE REPORT continued  
 
 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
23
 
For the year ended 30 June 2015  
 
Salaries 
$ 
Bonus 
$ 
Other  
benefits 
$ 
Post 
employment 
benefits 
$ 
Total  
2015 
$ 
Total  
GBP 
£ 
Executive 
      
D J Williams  564,788   484,651   105,006  –   1,154,445   734,333  
D J Bestwick  414,185   355,417   68,600  –   838,202   533,174  
N A D Fox  328,707   235,678   50,514   50,120   665,019   423,013  
M J O'Connor (Resigned 31 March 2016)  288,616   119,424   32,566   36,232   476,838   303,313  
Non-Executive       
P Walsh  275,119  –  –  –   275,119   175,000  
F E J G Brackenbury CBE  
(Resigned 31 March 2016) 
 189,161  –   12,652  –   201,813   128,372  
C R Vos  86,466  –  –  –   86,466   55,000  
M Walker OBE FREng  82,536  –  –  –   82,536   52,500  
P R Johnson  86,466  –  –  –   86,466   55,000  
C Eggberry (appointed 27 November 2014)  40,567  –  –  –   40,567   25,804  
A Green (appointed 27 November 2014)  40,567  –  –  –   40,567   25,804  
D A Foster (retired 31 March 2015)  62,235      62,235   39,587  
W P Wyatt (retired 27 November 2014)  30,524      30,524   19,416  
Total  2,489,937   1,195,170   269,338   86,352   4,040,797   2,570,316 
Basic salary  
Base salary is set by the Committee and reviewed annually, taking into account an individual’s performance and experience measured  
by appraisal and market practice. The Executive Directors received no increase for the year ended 30 June 2016.  
Pension  
The Company does not operate a specific pension scheme for the Executive Directors. The Executives are entitled to a Company 
contribution to their private pensions equal to 12.5% of their base salary. All Directors are entitled to participate in the Group workplace 
pension scheme.  
Cash bonus  
Bonus awards, which are not pensionable, are made to the Executive Directors based on Group financial and individual performance. 
Bonus payments are only payable if the Group meets a specific target threshold. As this was not achieved for 2016, no bonus payments 
were made to the Executive Directors. Personal performance is appraised against the achievement of challenging objectives set at the 
start of each financial year, and is linked to the Group’s strategic and operational performance.  
Save As You Earn  
During the year, one Executive Director made contributions into the Avanti Save As You Earn (“SAYE”) schemes. Nigel Fox made monthly 
contributions of £250 into the November 2013 SAYE scheme.  
   GOVERNANCE 
REMUNERATION COMMITTEE REPORT continued  
 
24 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
Directors’ share interests 
The following Directors held interests in the share capital of the Company: 
 
Fully paid Ordinary  
Shares of 1p each 
 
30 June  
2016 
30 June  
2015 
D J Williams  1,714,848   1,709,414  
D J Bestwick  1,301,954   1,301,954  
N A D Fox  134,580   134,580  
M J O'Connor (Resigned 31 March 2016)  203,961   203,961  
P Walsh  230,000   205,000  
F E J G Brackenbury (Resigned 31 March 2016)  516,432   516,432  
C R Vos  21,030   21,030  
P R Johnson  10,000   10,000  
A Green  21,888  –  
Directors’ Long Term Incentive Plans  
LTIPs have been established by the Group with approval of the Remuneration Committee and with the advice and assistance of Deloitte 
Touche Tohmatsu Limited to reward and incentivise the Executive Directors and senior managers of the Group.  
All unvested shares are held in the Employee Benefit Trust (“EBT”). The LTIP allocations are in separate sub funds within the EBT and are 
subject to automatic revocation if certain criteria are not met and continue to be revocable for the entire Trust period.  
The total allocation to the executive is subject to specific performance criteria, which must be met a fixed number of years after the grant. 
Currently, the criteria are twofold:  
Two thirds of an award – “the Revenue Part” – or a proportion thereof will vest if specific revenue targets are achieved or bettered. 
Revenue will be based on the Group’s audited Financial Statements for the relevant financial year. The Revenue Part will lapse to the 
extent it does not vest.  
One third of an award – “the Share Price Part” – or a proportion thereof will vest if the three-month average share price to 30 June is equal 
to or above a specified amount. In the event of any variation in the share capital of the Company by way of capitalisation or rights issue, 
consolidation, subdivision or reduction or otherwise, the Remuneration Committee shall make an appropriate adjustment to the share price 
targets to reflect this.  
The Share Price Part will lapse to the extent it does not vest in accordance with the schedule. 
In 2016, the Remuneration Committee determined that the criteria for the 2016 awards had not been met and that the awards should 
therefore lapse. The Committee decided to review the relevance of the current LTIP scheme to the Group’s longer-term ambitions prior 
to consideration of any further LTIP award. Accordingly, no LTIP awards have been made in 2016. 
Current allocations are as set out below: 
Outstanding allocations 
Potentially  
vesting  
2015 
Potentially  
vesting  
2016 
Potentially  
vesting  
2017 
Potentially  
vesting  
2018 Total 
David Williams  153,427   329,869   338,116   355,022   1,176,434  
David Bestwick  117,270   252,129   258,432   271,354   899,185  
Nigel Fox  44,954   96,731   99,149   104,106   344,940  
Total  315,651   678,729   695,697   730,482   2,420,559 
Richard Vos 
Remuneration Committee Chairman  GOVERNANCE 
REPORT OF THE BOARD OF DIRECTORS 
 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
25
 
The Directors have pleasure in presenting their Annual Report 
together with the audited Financial Statements for the year ended 
30 June 2016. 
Principal activities  
The principal activity of the Group is the provision of communication 
services and it is expected to be so for the foreseeable future 
Avanti generates revenue from the commercial exploitation of its 
space and network assets. These assets include its spectrum 
rights, satellites, intellectual property and ground station assets. 
Avanti’s first satellite, HYLAS 1, was launched in November 2010 
and brought into commercial service in April 2011. The second 
satellite, HYLAS 2, was successfully launched on 2 August 2012 
and came into commercial service in October 2012. ARTEMIS was 
acquired from the European Space Agency (‘‘ESA’’) on 31 
December 2013. Two further satellites are under construction. 
HYLAS 3 is a payload on ESA’s EDRS-C satellite and construction 
on HYLAS 4 commenced in August 2014. Both HYLAS 3 and 
HYLAS 4 are scheduled for launch in 2017.  
A review of the Group’s business and developments during the 
year is included in the Chairman’s Statement and the Chief 
Executive’s Review within the Strategic Report.  
Going Concern 
In determining the appropriate basis for preparation of the financial 
statements, the Directors are required to consider if it is appropriate 
to adopt the going concern basis of accounting. 
Full disclosure of the Directors deliberations to determine whether 
it is appropriate to adopt the going concern basis of accounting 
is provided in note 2 to the financial statements on page 34. 
In summary, the Directors have concluded that based on the Group’s 
expectation that the Consent Solicitation for a financial restructure will 
be successful, in addition to the forecasts and launch of HYLAS 4, the 
Directors believe that the Group will be able to have sufficient liquidity 
and comply with the financial covenants under the amended and 
new Notes, and will be able to meet its obligations as they fall due, 
and accordingly have formed the judgement that it is appropriate 
to prepare the financial statements on a going concern basis. There 
can, however, be no certainty that the required consents will be 
received or that the refinancing will be successfully completed. 
Accordingly, successful completion of the refinancing and the 
substantial achievement of cash flow forecasts to enable the 
settlement of certain interest payments by the issue of Notes represent 
a material uncertainty that may cast significant doubt on the Group 
and the parent company’s ability to continue as a going concern. 
Business review and key performance indicators  
Avanti operates two key performance indicators in order to give 
investors better insight into the progress that the business is 
making. The first performance indicator is Top-20 Customer 
Bandwidth Revenue Growth, which helps to track Avanti’s growth 
trajectory from core service sales, and is calculated by comparing 
the revenues from Avanti’s current leading customers on a last 
12 month basis, to the 12 months preceding that.  
The second performance indicator is Fleet Utilisation, which helps 
to track satellite capacity uptake and gives an indication of revenue 
potential when Avanti’s fleet is mature, and is calculated by dividing 
utilised capacity by total available capacity for the fleet of HYLAS 1 
(3 GHz), HYLAS 2 (11 GHz) and ARTEMIS (1 GHz).  
A review of the Group’s business and developments during the 
year is included in the Chairman’s Statement and the Chief 
Executive’s Review within the Strategic Report.  
 
Results and dividends  
The results for the year ended 30 June 2016 are shown on page 29. 
No equity dividend was paid in the year ended 30 June 2016 (2015: 
$nil). No final dividend is proposed at the year-end (2015: $nil). The 
loss for the year transferred to the shareholders’ funds was $68.7m 
(2015: loss of $73.1m). The net asset position at year end is 
$201.5m (2015: $304.7m).  
Share capital  
The Company issued 3,593,000 new Ordinary Shares and 
2,000,000 new Ordinary Shares into the EBT during the year ended 
30 June 2016 (2015: 30,066,720 new shares). Details of the 
Company’s share capital are given in Note 24 to the Consolidated 
Financial Statements. 
Qualitative and quantitative disclosures about interest, 
foreign exchange, credit and liquidity risks  
A discussion of the Group’s financial risk management objectives 
and policies and the exposure of the Group to interest rate, foreign 
exchange, credit and liquidity risk is included on pages 58 to 61 in 
Note 23 to the Consolidated Financial Statements.  
Research and development  
The Group continues to invest in new services and technology 
through its research and development programmes which can lead 
to profitable exploitation of Avanti’s satellite capacity. These include 
pure research into new products as well as developing those 
services which have been demonstrated to have a profitable 
business case.  
Directors  
The Directors who served during the year and were in office up to 
the date of signing were as follows:  
P Walsh  
D J Williams  
D J Bestwick  
N A D Fox  
M J O’Connor (resigned 31 March 2016) 
F E J G Brackenbury CBE (resigned 31 March 2016) 
C R Vos  
M Walker OBE FREng  
P R Johnson  
C Eggberry  
A Green  
  GOVERNANCE 
REPORT OF THE BOARD OF DIRECTORS 
26 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
A biography for each Director is provided on page 13. 
In accordance with the Company’s Articles of Association, all 
Directors offer themselves for re-election every three years.  
The Board believes that the members of the Board continue  
to be effective and to demonstrate commitment to their roles,  
the Board and the Company. The Board therefore recommends  
the re-appointment of both Directors who are up for re-election  
at the AGM.  
Directors’ emoluments  
Remuneration Policy  
The Company’s policy on remuneration of Directors is to attract, 
retain and motivate the best people, recognising the input they 
have to the ongoing success of the business. Consistent with this 
policy, the benefit package awarded by Avanti Communications 
Group plc to its Directors is intended to be competitive. It 
comprises a mix of performance related and non-performance 
related remuneration designed to incentivise the Directors and align 
their interest with those of shareholders and consists of base pay, 
annual bonus, LTIP, pension contributions and other benefits such 
as healthcare. 
Major shareholders  
At 9 December 2016, the Company had been notified, pursuant  
to the Financial Conduct Authority’s Disclosure & Transparency 
Rules, of the following notifiable voting rights in the Company’s 
issued Ordinary Share capital.  
9 December 2016:  
M & G Investment Management  18.56%  
Solus Alternative Asset Management   16.55%  
Mast Capital Management   10.06%  
PAR Investment Partners   5.77%  
Avanti Communications EBT 4.87% 
Caledonia Investments   4.20%  
Capital Group   3.29% 
Directors & Employees 2.33% 
 
Employees  
The Group employed 240 people at 30 June 2016 (2015: 213 
people). 
Employees are key to the Group’s success and we rely on the 
workforce being committed to helping us achieve our business 
objectives.  
Employees are regularly updated about market and industry 
developments.  
Communication between the Board and employees at all levels 
is highly valued and this is achieved through regular staff 
presentations given by the Chief Executive and regular email 
communication.  
 
The Company believes in equal opportunities for all employees and 
prospective employees irrespective of nationality, ethnicity, religion, 
age, gender, sexuality or disability. The Company has zero 
tolerance of discrimination in any form. 
Political donations  
During the year the Company made no political donations  
(2015: $nil).  
Corporate Governance  
The Corporate Governance Report is provided on pages 14  
to 18 and includes reports from the Board’s Audit, Nominations, 
Remuneration and Technical Committees.  
Notice of Annual General Meeting  
The notice of the Company’s AGM was sent to shareholders  
on 5 December 2016. 
Disclosure of information to the auditors  
Each of the persons who is a Director at the date of approval of this 
report confirms that:  
1. So far as the Director is aware, there is no relevant audit 
information of which the Company’s auditor is unaware.  
2. The Director has taken all steps that they ought to have taken as 
a Director in order to make themselves aware of any relevant audit 
information and to ensure that the Company’s auditor is aware of 
that information.  
This confirmation is given and should be interpreted in accordance 
with the provisions of section 418 of the Companies Act 2006. 
Directors’ and Officers’ liability insurance  
The Company maintains appropriate insurance to cover Directors’ 
and Officers’ liability for itself and its subsidiaries. At the date upon 
which this report was approved and for the year ended 30 June 
2016, the Company provided an indemnity in respect of all of 
the Company’s Directors in respect of all losses arising out of 
or in  connection with the execution of their powers, duties and 
responsibilities as Directors to the extent permitted by the 
Companies Act 2006 and the Company’s Articles of Association. 
Patrick Willcocks 
Company Secretary 
  GOVERNANCE  
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT,  
THE DIRECTORS AND THE FINANCIAL STATEMENTS 
 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
27
 
The directors are responsible for preparing the Strategic Report, 
Directors’ Report and the financial statements in accordance with 
applicable law and regulations.  
Company law requires the directors to prepare group and parent 
company financial statements for each financial year. As required 
by the AIM Rules of the London Stock Exchange they are required 
to prepare the group financial statements in accordance with 
IFRSs as adopted by the EU and applicable law and have 
elected to prepare the parent company financial statements 
on the same basis. 
Under company law the directors must not approve the financial 
statements unless they are satisfied that they give a true and fair 
view of the state of affairs of the group and parent company and 
of their profit or loss for that period. In preparing each of the group 
and parent company financial statements, the directors are 
required to:  
 select suitable accounting policies and then apply them 
consistently;  
 make judgements and estimates that are reasonable and 
prudent;  
 state whether they have been prepared in accordance with 
IFRSs as adopted by the EU; and  
 prepare the financial statements on the going concern basis 
unless it is inappropriate to presume that the group and the 
parent company will continue in business.  
The directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the parent company’s 
transactions and disclose with reasonable accuracy at any time the 
financial position of the parent company and enable them to ensure 
that its financial statements comply with the Companies Act 2006. 
They have general responsibility for taking such steps as are 
reasonably open to them to safeguard the assets of the group 
and to prevent and detect fraud and other irregularities.  
The directors are responsible for the maintenance and integrity of 
the corporate and financial information included on the company’s 
website. Legislation in the UK governing the preparation and 
dissemination of financial statements may differ from legislation 
in other jurisdictions.  
David Williams 
Chief Executive  INDEPENDENT AUDITOR’S REPORT 
TO THE MEMBERS OF AVANTI COMMUNICATIONS GROUP PLC  
 
We have audited the financial statements of Avanti Communications Group plc for the year ended 30 June 2016 set out on pages 29 to 71. 
The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting 
Standards (IFRSs) as adopted by the EU and, as regards the parent company financial statements, as applied in accordance with the 
provisions of the Companies Act 2006.  
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. 
Our  audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in 
an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone 
other than the company and the company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.  
28 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
Respective responsibilities of directors and auditor  
As explained more fully in the Directors’ Responsibilities Statement 
set out on page 27, the directors are responsible for the preparation 
of the financial statements and for being satisfied that they give a 
true and fair view. Our responsibility is to audit, and express an 
opinion on, the financial statements in accordance with applicable 
law and International Standards on Auditing (UK and Ireland). 
Those standards require us to comply with the Auditing Practices 
Board’s Ethical Standards for Auditors.  
Scope of the audit of the financial statements  
A description of the scope of an audit of financial statements is 
provided on the Financial Reporting Council’s website at 
www.frc.org.uk/auditscopeukprivate.  
Opinion on financial statements  
In our opinion:  
 the financial statements give a true and fair view of the state of 
the group’s and of the parent company’s affairs as at 30 June 
2016 and of the group’s loss for the year then ended;  
 the group financial statements have been properly prepared 
in  accordance with IFRSs as adopted by the EU;  
 the parent company financial statements have been properly 
prepared in accordance with IFRSs as adopted by the EU and 
as applied in accordance with the provisions of the Companies 
Act 2006; and the financial statements have been prepared in 
accordance with the requirements of the Companies Act 2006.  
  
Emphasis of matter – Going concern  
In forming our opinion on the financial statements, which is not 
modified, we have considered the adequacy of the disclosure 
made in note 2 to the financial statements concerning the group’s 
and the parent company’s ability to continue as a going concern, 
in particular the successful completion of the financial restructuring 
(to be announced on 20 December 2016) is conditional upon the 
Consent Solicitation process, which is expected to commence on 
21 December and will run for a maximum of twenty business days 
and the substantial achievement of cash flow forecasts to enable 
the settlement of certain interest payments by the issue of Notes. 
These conditions, along with the other matters explained in note 2 
to the financial statements, indicate the existence of a material 
uncertainty which may cast significant doubt on the group’s and 
the parent company’s ability to continue as a going concern. The 
financial statements do not include the adjustments that would 
result if the group and the parent company were unable to continue 
as a going concern.  
Opinion on other matters prescribed by the Companies 
Act 2006  
In our opinion the information given in the Strategic Report and the 
Directors’ Report for the financial year for which the financial 
statements are prepared is consistent with the financial statements. 
Matters on which we are required to report by 
exception 
We have nothing to report in respect of the following matters where 
the Companies Act 2006 requires us to report to you if, in our 
opinion:  
 adequate accounting records have not been kept by the parent 
company, or returns adequate for our audit have not been 
received from branches not visited by us; or  
 the parent company financial statements are not in agreement 
with the accounting records and returns; or  
 certain disclosures of directors’ remuneration specified by law 
are not made; or  
 we have not received all the information and explanations we 
require for our audit.  
Tudor Aw (Senior Statutory Auditor)  
for and on behalf of KPMG LLP, Statutory Auditor  
Chartered Accountants  
15 Canada Square 
London 
E14 5GL 
20 December 2016  FINANCIAL STATEMENTS 
CONSOLIDATED INCOME STATEMENT 
Year ended 30 June 2016 
 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
29
 
 Notes 
Year ended  
30 June  
2016 
$’m 
Year ended  
30 June  
2015 
$’m 
Revenue    
Capacity, services & equipment 4 74.5 60.1 
Spectrum coordination
1
 4 – 25.1 
Sale of exclusivity rights
1
 4 8.3 – 
Total Revenue  82.8 85.2 
Cost of sales – capacity, services & equipment (excluding satellite depreciation)  (40.9) (38.0) 
Staff costs 7 (19.8) (20.0) 
Other operating expenses 5 (16.3) (13.3) 
Other operating income 8 1.5 1.4 
EBITDA
2
  7.3 15.3 
Depreciation and amortisation  (47.3) (48.1) 
Operating loss  (40.0) (32.8) 
Finance income 9 13.9 – 
Finance expense  9 (40.9) (40.5) 
Loss before taxation  (67.0) (73.3) 
Income tax 10 (2.2) – 
Loss for the year  (69.2) (73.3) 
    
Loss attributable to:    
Equity holders of the parent  (68.7) (73.1) 
Non-controlling interests  (0.5) (0.2) 
Basic loss per share (cents) 11 (49.27c) (61.50c) 
Diluted loss per share (cents) 11 (49.27c) (61.50c) 
1
 There were no directly attributable costs related to the sale of spectrum rights or exclusivity rights.  
2
  Earnings before interest, tax, depreciation and amortisation  
The Notes on pages 34 to 71 are an integral part of these Consolidated Financial Statements. 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 
Year ended 30 June 2016 
 
 
Year ended  
30 June  
2016 
 $’m 
Year ended  
30 June  
2015 
$’m 
Loss for the year (69.2) (73.3) 
Other comprehensive income   
Exchange differences on translation of foreign operations and investments that may be recycled  
to the Income Statement:   
Foreign currency translation differences on foreign operations 13.8 0.1 
Monetary items that form part of the net investment in a foreign operation (58.9) (22.7) 
Total comprehensive loss for the year (114.3) (95.9) 
Attributable to:   
Equity holders of the parent (113.8) (95.7) 
Non-controlling interests (0.5) (0.2) 
The Notes on pages 34 to 71 are an integral part of these Consolidated Financial Statements.  FINANCIAL STATEMENTS 
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 
As at 30 June 2016 
30 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
 Notes 
30 June 
 2016 
$’m 
30 June 
 2015 
 $’m 
ASSETS    
Non-current assets    
Property, plant and equipment 13 775.1 691.0 
Intangible assets 14 10.8 11.0 
Deferred tax assets 19 18.6 19.5 
Total non-current assets  804.5 721.5 
Current Assets    
Inventories 17 1.9 2.6 
Trade and other receivables 18 79.5 35.5 
Cash and cash equivalents 20 56.4 122.2 
Total current assets   137.8 160.3 
Total assets  942.3 881.8 
    
LIABILITIES AND EQUITY    
Current liabilities    
Trade and other payables 21 82.8 31.9 
Loans and other borrowings  22 3.3 4.7 
Total current liabilities   86.1 36.6 
Non-current liabilities    
Trade and other payables 21 12.7 16.8 
Loans and other borrowings  22 642.0 523.7 
Total non-current liabilities   654.7 540.5 
Total liabilities   740.8 577.1 
Equity    
Share capital  24 2.5 2.4 
EBT shares 24 (0.1) (0.1) 
Share premium 24 515.9 505.3 
Retained earnings  (252.7) (184.4) 
Foreign currency translation reserve  (61.5) (16.4) 
Total parent shareholders’ equity   204.1 306.8 
Non-controlling interests  (2.6) (2.1) 
Total equity   201.5 304.7 
Total liabilities and equity  942.3 881.8 
The Financial Statements of company number 6133927 on pages 29 to 71 were approved by the Board of Directors on 20 December 2016 
and signed on its behalf by: 
Nigel Fox 
Group Finance Director 
  FINANCIAL STATEMENTS 
COMPANY STATEMENT OF FINANCIAL POSITION 
As at 30 June 2016 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
31
 
 Notes 
30 June  
2016 
 $’m 
30 June 
 2015 
 $’m 
ASSETS    
Non-current assets    
Investments 15 148.7 148.7 
Loan receivable 18 642.5 917.6 
Deferred tax assets 19 0.5 0.5 
Total non-current assets  791.7 1,066.8 
Current Assets    
Trade and other receivables 18 390.7 93.3 
Total current assets  390.7 93.3 
Total assets  1,182.4 1,160.1 
LIABILITIES AND EQUITY    
Current liabilities    
Trade and other payables 21 46.2 154.8 
Loans and other borrowings 22 2.8 2.7 
Total current liabilities  49.0 157.5 
Non-current liabilities    
Loans and other borrowings 22 632.2 514.3 
Total liabilities  681.2 671.8 
Equity    
Share capital 24 2.5 2.4 
EBT shares 24 (0.1) (0.1) 
Share premium 24 515.9 505.3 
Retained earnings  (1.2) (3.4) 
Foreign currency translation reserve   (15.9) (15.9) 
Total shareholders’ equity  501.2 488.3 
Total liabilities and equity  1,182.4 1,160.1 
The financial statements of company number 6133927 on pages 29 to 71 were approved by the Board of Directors on 20 December 2016 
and signed on its behalf by: 
Nigel Fox 
Group Finance Director  FINANCIAL STATEMENTS 
CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS 
Year ended 30 June 2016 
32 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
  
Group Company 
 Notes 
Year ended  
30 June  
2016 
$’m 
Year ended 
 30 June  
2015 
$’m 
Year ended  
30 June  
2016 
$’m 
Year ended  
30 June  
2015 
$’m 
Cash flow from operating activities      
Cash (absorbed)/generated by operations 30 (31.8) (10.2) (121.1) (93.0) 
Interest paid  (60.5) (52.3) (60.5) (52.3) 
Interest received  – – 63.0 55.6 
Net cash (absorbed)/generated by operating activities  (92.3) (62.5) (118.6) (89.7) 
Cash flows from investing activities      
Payments for other financial assets and investments  – – (5.0) (3.4) 
Payments for property, plant and equipment  (95.7) (102.0) – – 
Proceeds from sale and leaseback  2.2 5.3 2.2 5.3 
Net cash used in investing activities  (93.5) (96.7) (2.8) (3.4) 
Cash flows from financing activities      
Proceeds from bond issue  115.0 – 115.0 – 
Proceeds from share issue  10.7 90.6 10.7 90.6 
Payment of finance lease liabilities  (4.1) (5.3) (4.1) (2.7) 
Debt issuance costs  (0.2) (0.1) (0.2) (0.1) 
Net cash received from financing activities  121.4 85.2 123.6 93.1 
Effects of exchange rate on the balances of cash and  
cash equivalents  (1.4) 0.9 – – 
Net (decrease)/increase in cash and cash equivalents  (65.8) (73.1) – – 
Cash and cash equivalents at the beginning of the  
financial year  122.2 195.3 – – 
Cash and cash equivalents at the end of the  
financial year 20 56.4 122.2 – – 
      
The Notes on pages 34 to 71 are an integral part of these Consolidated Financial Statements.  FINANCIAL STATEMENTS 
CONSOLIDATED AND COMPANY STATEMENT OF CHANGES IN EQUITY 
Year ended 30 June 2016 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
33
 
Consolidated 
 Notes 
Share  
capital 
$’m 
Employee 
benefit trust 
(EBT) 
$’m 
Share  
premium 
$’m 
Retained 
earnings 
$’m 
Foreign 
currency 
translation 
reserve 
$’m 
Non-controlling 
interests 
$’m 
Total  
equity 
$’m 
2015         
At 1 July 2014  2.0 (0.1) 415.1 (112.0) 6.2 (1.9) 309.3 
Loss for the year  – – – (73.1) – (0.2) (73.3) 
Other comprehensive 
income 
 – – – – (22.6) – (22.6) 
Issue of share capital  0.4  90.2    90.6 
Share based payments 25 – – – 0.7 – – 0.7 
At 30 June 2015  2.4 (0.1) 505.3 (184.4) (16.4) (2.1) 304.7 
         
2016         
At 1 July 2015  2.4 (0.1) 505.3 (184.4) (16.4) (2.1) 304.7 
Loss for the year  – – – (68.7) – (0.5) (69.2) 
EBT issue  – – – – – – – 
Other comprehensive 
income 
 – – – – (45.1) – (45.1) 
Issue of share capital  0.1 – 10.6 – – – 10.7 
Share based payments 25 – – – 0.4 – – 0.4 
At 30 June 2016  2.5 (0.1) 515.9 (252.7) (61.5) (2.6) 201.5 
Company 
 Notes 
Share  
capital 
$’m 
Employee 
benefit trust 
(EBT) 
$’m 
Share  
premium 
$’m 
Retained 
earnings 
$’m 
Foreign 
currency 
translation 
reserve 
$’m 
Total  
equity 
$’m 
2015        
At 1 July 2014  2.0 (0.1) 415.1 (3.1) (15.9) 398.0 
Loss for the year  – – – (0.3) – (0.3) 
Issue of share capital  0.4 – 90.2 – – 90.6 
Share based payments 25 – – – – – – 
At 30 June 2015  2.4 (0.1) 505.3 (3.4) (15.9) 488.3 
        
2016        
At 1 July 2015  2.4 (0.1) 505.3 (3.4) (15.9) 488.3 
Profit for the year  – – – 1.8 – 1.8 
Issue of share capital  0.1 – 10.6 – – 10.7 
Share based payments 25 – – – 0.4 – 0.4 
At 30 June 2016  2.5 (0.1) 515.9 (1.2) (15.9) 501.2  FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS 
 
34 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
1. General information 
The consolidated financial statements of Avanti Communications Group plc (the 'Group') for the year ended 30 June 2016 were authorised 
for issue in accordance with a resolution of the directors on 20 December 2016. 
Avanti Communications Group plc (the ‘Company’ or together with its subsidiaries, the ‘Group’) is a company incorporated in the United 
Kingdom and domiciled in England and Wales. The address of its registered office is Cobham House, 20 Black Friars Lane, London, EC4V 
6EB. The nature of the Group’s operations and its principal activities are set out in the revenue recognition accounting policy in note 2. 
The Company is a public limited company, which is listed on the Alternative Investment Market (“AIM”) and trades under the ticker “AVN.L” 
on the London Stock Exchange. 
2. Principal accounting policies 
The principal accounting policies applied in the preparation of these Financial Statements are set out below. These policies have been 
consistently applied to all the years presented, unless otherwise stated. 
Basis of preparation 
The Group and Company Financial Statements have been prepared in accordance with International Financial Reporting Standards as 
adopted by  
the EU (”IFRSs”), International Financial Reporting Interpretations Committee Interpretations, and the Companies Act 2006 applicable to 
companies preparing their accounts under IFRS. The financial statements have been prepared under the historical cost convention except 
for certain financial instruments that have been measured at fair value, as described later in these accounting policies.  
The Group has chosen to amend the presentation of the Consolidated Income Statement in the 2016 year-end Financial Statements.  
These changes have been applied to the 2015 comparatives and include showing revenue categories separately on the face of the 
Income Statement when such presentation is relevant to an understanding to the Group’s financial performance. In addition costs of sale 
and operating expenditure have been presented together with the removal of the gross profit sub-total and addition of a line item showing 
earnings before interest, taxation, depreciation and amortisation (“EBITDA”). Depreciation and amortisation of non-current assets are 
shown separately after the EBITDA sub-total which, given the relatively fixed costs of the business, we believe provides more useful 
information to the readers of the Financial Statements. 
The Company has taken the exemption under section 408 of the Companies Act 2006 to not present the parent Company Income 
Statement or Statement of Comprehensive Income. 
Going concern 
The financial statements have been prepared on a going concern basis. In reaching their assessment, the Directors have considered a 
period extending at least 12 months from the date of approval of these financial statements. This assessment has focused on the status 
of the financial restructuring announced by the Group on 20 December as well as those factors considered on an annual basis such as 
forecast trading performance of the Group for the foreseeable future, key assumptions, sensitivities and available cash balances and 
facilities. As at the date of approval of these financial statements, the successful completion of the financial restructuring is conditional 
upon the Consent Solicitation process and while the Directors believe that this process will be completed successfully, there remains a 
material uncertainty until the remaining consents have been received. 
On 7 July 2016, the Company announced that it was probable that additional funding would be required in order to ensure that the 
Group had sufficient liquidity to complete and launch HYLAS 4 in the 2017 financial year. Avanti had based its funding plan on cash to 
be generated from the business which had grown more slowly than expected. On 11 July 2016, the Company announced the undertaking 
of a strategic review (the “Strategic Review”) to consider all financial and strategic options. As part of this exercise, Avanti conducted 
an in-depth review of its business plan, financial position and strategic options, including various routes to strengthen the Company's 
balance sheet. 
On 17 October 2016, the Company announced the result of a successful consent solicitation process ("September Consent Solicitation") 
as the first step in its two-phase funding strategy. The Company received consents from holders of 89.5% of its Senior Secured Notes to 
permit paying the interest due on 1 October 2016 in respect of consenting holders’ Senior Secured Notes in the form of additional Senior 
Secured Notes on the same terms as the existing Senior Secured Notes in lieu of cash. In order to further support the strategic review 
process, the Company also entered into binding agreements with certain suppliers to defer approximately $39m of capital expenditure 
payments relating to HYLAS 4 to the third quarter of the fiscal year ending 30 June 2017. 
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
35
 
2. Principal accounting policies continued 
Going concern continued 
Following completion of the September Consent Solicitation, the Company continued negotiations with the manufacturer of HYLAS 4, 
Orbital Sciences ("Orbital"), and its largest holders of Senior Secured Notes regarding phase 2 of the funding strategy. The second phase 
of the planned restructuring of the Company’s outstanding indebtedness is to seek a long-term solution to its working capital needs and 
to ensure that the Company can continue to operate as a going concern in the future. The major components of the planned restructuring 
which provide the Group with substantial additional liquidity are: 
1. New Money Notes - Issue of up to $132.5m of Senior Secured Notes in three tranches by the Company to provide additional funds for 
the Group. $82.5m will be issued on closing of the restructuring with the ability to issue a further $15m on 30 June 2017 and $35m on 
30 November 2017.  
2. Amended Existing Notes - Amendments to the Existing notes, which are described in more detail in Note 31, which include capitalising 
(i.e settling through the issue of further Notes rather than cash) the April 2017 coupon and the ability to capitalise the October 2017 
coupon for the $685m of Amended Existing Notes conditional on certain cash forecast targets. In addition the amendments allow for the 
ability to capitalise the April 2018 coupon for approximately $485m of the Amended Existing Notes conditional on certain cash forecast 
targets and extended maturity dates which range between October 2021 and October 2022. 
The restructuring, which is described in more detail in note 31, culminated on 20 December 2016 when a Restructuring Agreement was 
signed by the Company with a group of its largest holders of Senior Secured Notes ("Initial Consenting Creditors"). The Company and 
the Initial Consenting Creditors, representing approximately 73% of the aggregate principal amount of the existing Senior Secured Notes 
("Existing Notes"), entered into the Restructuring Agreement on 20 December 2016 pursuant to which the Initial Consenting Creditors 
contractually agreed to approve the Existing Notes restructuring by delivering Consents in connection with the Solicitation, tendering 
their Existing Notes in the Exchange Offer and voting in favour of the Scheme. 
The Company and the Initial Consenting Creditors also entered into the Backstop Purchase Agreement on 20 December 2016 pursuant to 
which the Initial Consenting Creditors committed to fund up to the entirety of the New Money Offer, subject to reduction for the level of pro 
rata participation by the remaining Existing Note holders that elect to participate in the New Money Offer. 
The Consent Solicitation is expected to commence on 21 December 2016 and will run for a maximum of 20 business days. This process 
will result in one of the three following outcomes:  
1. Receipt of consents from note holders equating to at least 90% of the Existing Notes by number and value. This will result in the terms 
of the restructuring being approved and applied to 100% of the Existing Notes. The Initial Consenting Creditors are contractually 
committed to providing their consents and equate to 73% of the Existing Notes.  
2. Receipt of consents greater than or equal to 75% but less than 90%. In this case, the consenting Existing Noteholders will enter into a 
Scheme of Arrangement with the Company whereby they agree to the terms of the restructuring being applied to their Existing Notes. 
In addition, with 75% or more acceptance, the $132.5m new money component of the restructuring and the restructured notes would 
be approved. The terms of the non-consenting Existing Note holders would remain unchanged. 
3. Consents will be received amounting to less than 75% of the Existing Noteholders. This is considered extremely unlikely given that the 
Initial Consenting Creditors are contractually committed to providing their consents and equate to 73% of the Existing Notes. In this 
scenario, the restructuring would fail and the Group would need to successfully complete an alternative restructuring or raise new 
money in order to have sufficient resources to continue in operational existence for the foreseeable future. 
Following the signing of the Restructuring Agreement, which is the platform for a successful Consent Solicitation and which will in turn 
complete the Group's funding strategy, and in order to prepare and approve these Financial Statements, the Directors have assessed 
forecast future cash flows for the foreseeable future. In assessing the Group’s ability to meet its obligations as they fall due, management 
prepared cash flow forecasts based on the business plan for a period in excess of 24 months. Management considered various downside 
scenarios to test the Group’s resilience against operational risks including: 
 Adverse movements in Sterling and Euro exchange rates against US Dollar 
 Delays in the launch of HYLAS 4 
 Lower yield on capacity 
 Slower build in fleet/ satellite utilisation 
Management concluded that the Group’s Capital Structure after the planned debt facilities amendments and new money notes, together 
with the ability to PIK certain interest coupons, conditional on certain cash flow forecasts, provides sufficient headroom to cushion against 
downside operational risks and reduces the risk of breaching the new debt covenants.  FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
36 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
2. Principal accounting policies continued 
Going concern continued 
In summary, the Directors have concluded that, based on the group’s expectation that the Consent Solicitation for a financial restructure 
will be successful, in addition to the forecasts and launch of HYLAS 4, the Directors believe that the Group will be able to have sufficient 
liquidity and comply with the financial covenants under the amended and new Notes, and will be able to meet its obligations as they fall 
due, and accordingly have formed the judgement that it is appropriate to prepare the financial statements on a going concern basis. 
There can, however, be no certainty that the required consents will be received or that the refinancing will be successfully completed. 
Accordingly, successful completion of the refinancing and the substantial achievement of cash flow forecasts to enable settlement of 
certain interest payments by the issue of Notes represent a material uncertainty that may cast significant doubt on the group and the 
parent company’s ability to continue as a going concern. The group and the parent company may, therefore, be unable to continue 
realising their assets and discharging their liabilities in the normal course of business, but the financial statements do not include any 
adjustments that would result if the going concern basis of preparation is inappropriate. 
Basis of accounting 
The consolidated financial statements are presented in US Dollars, the functional currency of the Company and most of the Group’s 
subsidiaries. The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates 
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance 
sheet date and the reported amounts of revenue and expenses during the year. Although these estimates are based on management’s 
best estimate of the amount, event or actions, the actual results ultimately may differ from these estimates. Further discussion on these 
estimates and assumptions are disclosed in note 3. 
Accounting policy changes 
New and amended accounting standards adopted by the Group  
There are no new IFRS or IFRIC Interpretations that are effective for this financial year that have had a material impact on the Group.  
New and amended accounting standards that have been issued but are not yet effective and have not been early adopted  
IFRS 15 ‘Revenue from contracts with customers’ will be effective for periods beginning on or after 1 January 2018. The standard sets out 
the requirements for recognising revenue from contracts with customers, and will supersede the current revenue recognition guidance 
including IAS 18 ‘Revenue’, IAS 11 ‘Construction Contracts’ and the related interpretations. IFRS 15 will require the Group to apportion 
revenue earned from contracts to each deliverable that qualifies as a ‘performance obligation’. The transaction price receivable from 
customers must be allocated to each performance obligation on a relative stand-alone selling price basis, based on a five-step model. 
The Group is currently assessing the impact of this standard on the financial statements. 
IFRS 16 ‘Leases’ will be effective for periods beginning on or after 1 January 2019, subject to endorsement by the EU. The standard sets 
out requirements for recognising assets and liabilities in respect of leases, and will supersede the existing accounting guidance in IAS 17 
‘Leases’ and the related interpretations. IFRS 16 will require the Group, where it is the lessee, to recognise assets and liabilities for most 
leases, however there is little change to IAS 17 where the Group is the lessor. The Group is currently assessing the impact of this standard 
on the financial statements.  
IFRS 9 ‘Financial Instruments’ will be effective for periods beginning on or after 1 January 2018, subject to endorsement by the EU.  
The standard will impact the classification and measurement of financial instruments and will supersede IAS 39 ‘Financial Instruments: 
Recognition and Measurement’. While the Group has not finalised its assessment of this standard, it does not expect the changes to have 
a material impact on the financial statements. There are no other IFRS or IFRIC Interpretations that are not yet effective that would be 
expected to have a material impact on the Group. 
Basis of consolidation 
The consolidated financial statements comprise the financial statements of the Company and its controlled undertaking (“subsidiaries”), 
after the elimination of all material inter-company transactions. Subsidiaries are consolidated from the date the Company obtains control 
until such time as control ceases. Acquisitions of subsidiaries are accounted for using the purchase method of accounting. The financial 
statements of subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. Adjustments 
are made to bring into line any dissimilar accounting policies that may exist. For details regarding the subsidiaries included in the 
consolidated financial statements see Note 16.  
Non-controlling interests in the net assets of consolidated subsidiaries which consist of the amounts of those interests at the date of the 
original business combination and the non-controlling interests’ share of changes in equity since the date of the combination, are not 
material to the Group’s financial statements.  FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
37
 
2. Principal accounting policies continued 
Business combinations 
Business combinations are accounted for using the acquisition method. When the Group acquires a business, it identifies the assets 
and liabilities of the acquiree at the date of acquisition and measures them at fair value. Only separately identifiable intangible assets 
are recognised. 
Consideration is the fair value at the acquisition date of the assets transferred and liabilities incurred in acquiring the business.  
Acquisition-related costs are expensed as incurred and included in operating costs.  
Goodwill is initially measured at cost as the difference between the fair value of the consideration for the acquisition and fair value of the 
net identifiable assets acquired, including any intangible assets other than goodwill. If the assessment of goodwill results in an excess of 
the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in the income statement. 
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, 
goodwill is allocated to each of the Group’s cash-generating units (CGUs) that are expected to benefit from the business combination, 
irrespective of whether other assets or liabilities of the acquiree are assigned to those units. 
The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the  
non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets. 
Revenue recognition  
Business Model 
The Group's business model is the commercial exploitation of its space assets, namely its spectrum rights, satellites, intellectual property 
and ground station assets. The Group generates its revenues from the commercialisation of these assets either directly or through the 
Group's extensive partner base using product categories and charging models to suit customer and market circumstances. 
This gives rise to the following primary revenue streams:  
 Capacity - Sale of satellite broadband packages and capacity to customers 
 Services - Sale of services in addition to satellite broadband capacity, typically to Government customers 
 Equipment - Sale of terminals and other satellite communications equipment 
 Spectrum coordination - Sale and leasing of spectrum rights 
 Exclusivity rights – Sale of exclusivity rights across a region or product type  
Additional product categories and charging models which generate revenue include, and are not limited to, satellite interim missions, 
consultancy projects, engineering services, satellite control services and ground station operation services.  
Capacity, Services & Equipment 
Revenue for satellite broadband communications services are recognised for Avanti’s three main products as follows: 
 Pure – Raw bandwidth – Customers have exclusive use of a defined number of MHz in specific beams – The proportion of the total 
contract value recognised as revenue in a period equates to the proportion of the total contracted capacity provided in that period. 
 Custom – Managed IP service – Customers have exclusive use of a defined number of Mb in specific beams – The proportion of the 
total contract value recognised as revenue in a period equates to the proportion of the total contracted capacity provided in that period. 
 Select – Packaged broadband – Customers buy individual broadband user accounts, which are managed and defined by Avanti – 
Revenues are recognised in the period that the service is delivered based on the number of user accounts and contracted prices  
per account. 
 
Capacity revenue includes the sale of transponders in addition to the sale of indefeasible rights of use where the revenue recognition 
criteria are met. 
Revenue from services sold as a fully integrated package with satellite capacity, consultancy and other services contracts connected  
with the utilisation of the Group's space assets are recognised by reference to the stage of completion of the contract activity at the 
reporting date.  
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
38 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
2. Principal accounting policies continued 
Revenue recognition continued 
Capacity, Services & Equipment continued 
The contracts are broken down into separable elements which are all judged individually on a percentage of completion basis in order 
to  ascertain the completeness of an overall project. By its nature these projects require a certain element of judgement by management. 
Contract costs are recognised as an expense in the period they are incurred. Where Avanti is judged to be the prime partner, revenues 
are recognised on a gross basis in line with the risks and rewards of the contract. 
Revenue from the sale of terminals and other satellite communication equipment is recognised when the risks and rewards of ownership 
have transferred to the customer. 
Spectrum Coordination 
Revenue from spectrum co-ordination agreements is typically recognised on a straight-line basis over the period where spectrum is leased 
or immediately where the Group sells spectrum assets in perpetuity.  
Exclusivity Rights 
Revenue from the sale of exclusive distribution rights across a region or product type for a fixed term are recognised over the period of the 
agreement. Revenue from the sale of exclusive distribution rights in perpetuity are recognised immediately where the revenue recognition 
criteria are met. Specifically that the sale is for a fixed, non-refundable fee under a non-cancellable agreement and there is no significant 
further managerial involvement required.  
Policies Applicable to All Revenue Streams  
The Group offers certain products and services as part of multiple deliverable arrangements. Multi-deliverable arrangements are divided 
into separate units of accounting provided: 1) the deliverable has a stand-alone value to the customer if it is sold separately, and 2) the fair 
value of the item can be objectively and reliably determined. Consideration for these items is measured and allocated to each separate 
unit based on their relative fair values or using the fair value of the undelivered components (residual value method) and the relevant 
revenue recognition policies are applied to them. 
Where goods or services are provided in exchange for dissimilar goods or services, the revenue is measured at the fair value of the goods 
or services received where these can be reliably measured, otherwise at the fair value of the goods or services given up, adjusted by the 
amount of cash or cash equivalents received. 
The Group discloses the amount of each significant category of revenue recognised during the year in a note to the Financial Statements. 
The Group presents revenue from a given transaction or revenue stream separately on the face of the Income Statement when such 
presentation is relevant to an understanding of the Group's financial performance. Factors including the nature and function of items 
of revenue are considered in determining the appropriate presentation.  
Accrued income represents the excess of revenue recognised over amounts invoiced. Deferred income represents any unearned 
balances remaining from amounts received from customers pursuant to prepaid contracts. 
Indefeasible rights of use 
Where the Group enters into an arrangement which constitutes an indefeasible right of use (“IRU”), the arrangement is reviewed to 
establish whether the IRU is a lease, a service contract or a sale of goods. Whether an arrangement contains a lease is assessed by 
considering whether the provision of a service depends on the use of one or more specific assets and whether the agreement conveys 
a right to use those assets. 
Once it has been determined that an IRU is or contains a lease, then the arrangement is accounted for in accordance with the leased 
assets accounting policy. 
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
39
 
2. Principal accounting policies continued 
Leased assets 
The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement and requires  
an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and whether the 
arrangement conveys the right to use the asset. 
Leases of property, plant and equipment where the Group holds substantially all the risks and rewards of ownership are classified as 
finance leases. Assets acquired under hire purchase or a finance lease are capitalised in the Statement of Financial Position. Those held 
under hire purchase and finance lease contracts are depreciated over the shorter of either their estimated useful lives or the term of the 
lease. The interest element of these obligations is charged to the Income Statement over the relevant period. The capital element of the 
future payments is treated as a liability. 
Leases where a significant portion of the risks and rewards are held by the lessor are classified as operating leases. Rentals are charged 
to the Income Statement on a straight line basis over the period of the lease. 
Interest income and expense 
Borrowing costs incurred for the construction of the satellite assets are capitalised during the period of time required to complete and 
prepare the assets for their intended use, in accordance with IAS 23 “Borrowing Costs”. Other borrowing costs are expensed in the 
Income Statement. 
Interest income on cash deposits is recognised on an effective interest rate methodology, taking into account the principal amounts 
outstanding and the interest rates applicable. 
Foreign currency 
Transactions entered into by the Group entities in a currency other than the currency of the primary economic environment in which it 
operates (the “functional currency”) are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and 
liabilities are translated at the rate ruling at the reporting date. Exchange differences arising on the retranslation of unsettled monetary 
assets and liabilities are recognised immediately in the Income Statement. 
The presentational currency of the Group is US Dollars. 
On consolidation, assets and liabilities of foreign undertakings are translated into US Dollars at year end exchange rates. The results  
of foreign undertakings are translated into US Dollars at average rates of exchange for the year (unless this average is not a reasonable 
approximation of the cumulative effects of the rates prevailing on the transaction dates, in which case income and expenses are translated 
at the dates of the transactions). Foreign exchange differences arising on retranslation are recognised directly in a separate component  
of equity, the foreign currency translation reserve. 
In the event of the disposal of an undertaking with assets and liabilities denominated in a foreign currency, the cumulative translation 
difference associated with the undertaking in the translation reserve is charged or credited to the gain or loss on disposal recognised  
in the Income Statement. 
Pension schemes 
Employees have the option to participate in the Group’s defined contribution pension scheme or to establish their own pension scheme to 
which the Group will match employee contributions up to a maximum amount. There is no ongoing liability to the Group beyond the period 
that the contributions are made. The costs of such contributions are charged to the Income Statement when incurred. 
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
40 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
2. Principal accounting policies continued 
Share based payments 
The Group operates a number of equity settled share based payment arrangements, under which the Group receives services from 
employees as consideration for equity instruments (share options and shares) of the Group. Equity settled share based payments are 
measured at fair value (excluding the effect of non-market based vesting conditions) at the date of grant, but include any market based 
performance criteria and the impact of vesting conditions. The fair value determined at the grant date is recognised on a straight line 
basis over the vesting period, based on the Group’s estimate of the options or shares that will eventually vest and adjusted for the effect 
of non-market based vesting conditions. 
Fair value is measured using either the Binomial options pricing model, the Black-Scholes model or Monte Carlo simulations, whichever  
is most appropriate to the award. 
Service and performance conditions are vesting conditions. Any other conditions are non-vesting conditions which have to be taken into 
account to determine the fair value of equity instruments granted. In the case that an award or option does not vest as a result of a failure 
to meet a non-vesting condition that is within the control of either counterparty, this is accounted for as a cancellation. Cancellations must 
be treated as accelerated vesting and all remaining future charges are immediately recognised. As the requirement to save under an 
employee share save arrangement is a non-vesting condition, employee cancellations must be treated as an accelerated vesting. 
Current tax 
The charge for taxation is based on taxable profits for the year. Taxable profit differs from profit as reported in the Income Statement 
because it excludes items of income and expenses that are taxable or deductible in other years and it further excludes items that are 
never taxable or deductible. 
The tax expense for the period comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent  
that it relates to items recognised in other comprehensive income or directly in equity. In this case the tax is also recognised in other 
comprehensive income or directly in equity respectively. 
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities based  
on tax rates that have been enacted or substantially enacted by the reporting date. 
Deferred tax 
Deferred tax is recognised on differences between the carrying amount of assets and liabilities in the Financial Statements and the 
corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method.  
Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are generally recognised  
for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible 
temporary differences can be utilised. 
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable  
that sufficient taxable profits will be available to allow all or part of the asset to be recovered. 
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or 
the asset realised, based on tax rates that have been enacted or substantively enacted by the reporting date. The measurement of the 
deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the 
reporting date, to recover or settle the carrying amount of its assets and liabilities. 
Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and 
the deferred tax assets and liabilities relate to taxes levied by the same taxation authority on either the same taxable Group company; or 
different Group entities which intend either to settle current tax assets and liabilities on a net basis, or to realise the assets and settle the 
liability simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be settled  
or recovered. 
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
41
 
2. Principal accounting policies continued 
Property, plant and equipment 
Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is 
provided so as to write off the cost of assets, other than assets under construction, over their estimated useful lives using the straight line 
method. Depreciation on satellite assets commences once in orbit testing has been completed and the satellite is available for use. 
Cost includes the original purchase price of the asset and the costs directly attributable to bringing the asset to its working condition  
for its intended use. Property, plant and equipment is depreciated using the straight line method based on the following useful lives: 
Motor vehicles 25% per annum    Plant and machinery 25% per annum 
Network assets 20-25% per annum   Leasehold improvements 25% per annum 
Fixtures and fittings 25% per annum    Satellite in construction Nil 
Satellite in operation 6.67% per annum 
The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in 
estimate accounted for on a prospective basis. The gain or loss arising on the disposal of assets is charged to the Income Statement 
account and is calculated as the difference between the disposal proceeds and the carrying amount of the assets.  
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, 
the term of the relevant lease. 
Satellites in construction assets relate to costs (including employee related costs) directly attributable to the construction of the HYLAS 
satellites. Once the satellites become operational and placed into service, the assets are transferred to a space asset category and 
depreciated over the life of the satellites. 
Where the conditions are not met the costs are expensed through the Income Statement. 
Intangible assets 
Intangible assets are stated at cost less accumulated amortisation and any accumulated impairment losses. Amortisation is provided  
so as to write off the cost of assets, other than assets under construction, over their estimated useful lives using the straight line method.  
The amortisation rate on computer software is 25%. Newly acquired intangible assets as part of the business combination, customer lists 
and trade name are amortised over 15 and 5 years respectively. 
Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its 
intended use. 
The estimated useful lives, residual values and amortisation method are reviewed at each year end, with the effect of any changes in 
estimate accounted for on a prospective basis. The gain or loss arising on the disposal of assets is charged to the Income Statement  
and is calculated as the difference between the disposal proceeds and the carrying amount of the assets. 
Research and development costs in relation to the satellites are capitalised if they meet the conditions set out in IAS 38 “Intangible Assets” 
which are that development costs are only capitalised once a business case has been demonstrated as to the technical feasibility and 
commercial viability. Capitalised development costs are amortised over the expected useful life of the assets. 
Impairment of non-financial assets 
Assets that have an indefinite useful life, for example goodwill or intangible assets not ready for use, are not subject to amortisation and will 
be tested annually for impairment. 
Assets that are subject to amortisation and depreciation are reviewed for impairment when events or changes in circumstances indicate 
that the carrying amount may not be fully recoverable. The impairment review comprises a comparison of the carrying amount of the fixed 
asset with its recoverable amount, which is the higher of fair value less costs to sell and value in use. 
Fair value less costs to sell is calculated by reference to the amount at which the asset could be disposed of. Value in use is calculated by 
discounting the expected future cash flows obtainable as a result of the asset’s continued use, including those resulting from its ultimate 
disposal, at a market based discount rate on a pre-tax basis. 
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
42 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
2. Principal accounting policies continued 
Impairment of non-financial assets continued 
An impairment loss is recognised in the Income Statement whenever the carrying amount of an asset exceeds its recoverable amount. 
The carrying amount will only be increased where an impairment loss recognised in a previous period for an asset either no longer  
exists or has decreased, up to the amount that it would have been had the original impairment not occurred.  
For the purpose of conducting impairment reviews, CGUs are identified as groups of assets and liabilities that generate cash flows that  
are largely independent of other cash flow streams. The assets and liabilities include those directly involved in generating the cash flows 
and an appropriate proportion of corporate assets. For the purposes of impairment, individual satellites are treated as individual CGUs. 
For the purpose of impairment testing of goodwill, goodwill is allocated to a group of CGUs (being subsidiaries acquired in each 
acquisition). Such group of CGUs represent the lowest level within the Group for which the goodwill is monitored for internal  
management purposes. 
Investments 
Investments are recorded at cost. Investments are reviewed for impairment when events or changes in circumstances indicate that the 
carrying amount may not be fully recoverable. 
Investments in subsidiaries are stated at cost and reviewed for indicators of impairment on an annual basis. 
Grant funding 
Other grant income which has capital expenditure and job creation/safeguarding targets is recognised on a straight line basis over the 
relevant period irrespective of cash and claims, and is disclosed as other operating income. 
Inventories 
Inventories are stated at the lower of cost and net realisable value. Cost comprises all costs of purchase, cost of conversion and other 
costs incurred in bringing the inventories to their present location and condition. 
Cost is determined by the first-in first-out method. 
Net realisable value is based on estimated selling price less any further costs expected to be incurred to completion and disposal. 
Equity instruments 
Equity instruments issued by the Company are recorded at the proceeds received, net of directly attributable issue costs. 
Trade receivables and other financial assets 
Trade and loan receivables are measured at initial recognition at fair value and are subsequently measured at amortised cost using the 
effective interest rate method where the time value of money is material. Appropriate allowances for estimating irrecoverable amounts are 
recognised in the Income Statement where there is evidence that the asset is impaired. This impairment would be recognised within 
operating expenses. 
Appropriate allowances for estimated irrecoverable amounts are recognised as expenses when there is objective evidence that trade 
receivables are impaired. 
Cash and cash equivalents 
Cash and cash equivalents in the Statement of Financial Position are comprised of cash in hand and demand deposits, and other short 
term highly liquid investments that are readily convertible into known amounts of cash and are subject to an insignificant risk of change in 
value. For the purpose of the Consolidated Cash Flow Statement, cash and cash equivalents are stated net of outstanding bank overdrafts. 
Provisions 
Provisions are recognised when the Group has a legal or constructive obligation to transfer economic benefits arising from past events 
and the amount of the obligation can be estimated reliably. Provisions are not recognised unless the outflow of economic benefits to settle 
the obligation is more likely than not to occur. 
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
43
 
2. Principal accounting policies continued 
Borrowings 
Interest-bearing bank loans and overdrafts are measured initially at fair value, net of transaction costs incurred. Borrowings are 
subsequently stated at amortised cost; any difference between the proceeds and the redemption value is recognised in the Income 
Statement over the period of the borrowings using the effective interest method. 
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least  
12 months after the reporting date. 
Trade payables 
Trade payables are initially measured at fair value, and are subsequently measured at amortised cost amortised cost. 
Derivative financial instruments 
Financial assets and financial liabilities are recognised on the Group’s Statement of Financial Position when the Group becomes a party  
to the contractual provisions of the instrument. 
The Group uses derivative financial instruments mainly to reduce exposure to foreign exchange risks. The Group does not hold or issue 
derivative financial instruments for trading purposes. Derivatives are recognised at fair value on the date a contract is entered into and  
are subsequently remeasured at their fair value. Fair value is measured using the closing bank rate compared with the contract rate. 
Hedge accounting is currently not applied. Changes in fair value of derivative financial instruments are recognised in the Income 
Statement as they arise. 
Segment reporting 
Operating segment(s) are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.  
The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segment(s), 
has been identified as the Avanti Executive Board who make the strategic decisions. 
3. Critical accounting estimates and management judgement 
The presentation of Financial Statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires 
management to exercise its judgement in the process of applying the Group’s accounting policies. 
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and 
liabilities within the next financial year are addressed below. 
(a) Revenue recognition 
The Group uses the percentage of completion method in accounting for its Government services projects. Use of the percentage of 
completion method requires the Group to estimate the services performed to date as a proportion of the total services to be performed. 
The Group assesses the level of completion at the balance sheet date by reference to a combination of time or cost incurred to date 
compared to the forecast total required to deliver each service and project.  
Should the service completion take substantially more or less time to complete post year-end, then the revenue recognised in the current 
and future financial period would in hindsight be misstated. 
The estimates and judgements made by management in accounting for the sale of exclusivity rights in the current year and the sale of 
spectrum rights in the comparative financial year are disclosed in Note 4 and Note 13. 
(b) HYLAS 1 satellite impairment review 
The carrying amount of HYLAS 1 of $118.5m is dependent on the Group’s ability to sell sufficient capacity on the satellite over its 
remaining useful economic life. Management remains confident that cash flows from existing customers in addition to growth in cash flows 
from existing customers and sales to new customers will continue to underpin the carrying value of the satellite. As a result the HYLAS 1 
impairment review showed that no impairment was required as at 30 June 2016. The estimates and judgements made by management 
in undertaking this impairment review are disclosed in Note 13. 
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
44 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
3. Critical accounting estimates and management judgement continued 
(c) Filiago goodwill impairment review 
Goodwill with a carrying value at 30 June 2016 of $9.7m on the balance sheet relates to the Filiago business combination. The goodwill 
on acquisition of Filiago is not subject to amortisation and so is required to be reviewed annually for impairment. Filiago’s forecast cash 
flows, which have been supplemented by the HYLAS-2B payload coming on-line in Q2 of FY17, continue to support the carrying value 
of goodwill. The estimates and judgements made by management in undertaking this impairment review are disclosed in Note 14. 
(d) Deferred tax 
The recognition of deferred tax assets is based upon whether it is more likely than not that sufficient and suitable taxable profits will be 
available in the future against which the reversal of temporary differences can be deducted. To determine the future taxable profits, 
reference is made to the latest available profit forecasts. Where the temporary differences are related to losses, relevant tax law is 
considered to determine the availability of the losses to offset against the future taxable profits.  
Recognition therefore involves judgement regarding the future financial performance of the particular legal entity or tax group in which the 
deferred tax asset has been recognised. Significant items on which the Group has exercised accounting judgement include recognition of 
deferred tax assets in respect of losses and accelerated capital allowances in the United Kingdom.  
The amounts recognised in the consolidated financial statements in respect of each matter are derived from the Group’s best estimation 
and judgement as described above. However the inherent uncertainty regarding the outcome of these items means eventual resolution 
could differ from the accounting estimates and therefore impact the Group’s results and cash flows. See note 19 to the consolidated 
financial statements. 
(e) Trade and other receivables 
The Group has trade and other receivables of $79.5m (2015: $35.5m) on the balance sheet at the year-end date. The receivables balance 
increased mainly as a result of contracts reaching milestones at the end of the final quarter which resulted in invoicing or revenue 
accruals. Of the receivables balance, $27.7m was accounted for by accrued income (2015: $10.6m), $16.4 m of which was due from 
investment grade counter parties, either Government customers or large corporate customers where the underlying customer is a 
Government. Management made an estimate of the recoverability of all trade and other receivables in preparing the year-end financial 
results which could differ from the accounting estimates and therefore impact the Group’s results and cash flows. 
4. Revenue 
As stated in Note 2, the Group generates its revenues from the commercial exploitation of its space assets, namely its spectrum rights, 
satellites, intellectual property and ground station assets. These revenues include, inter alia, the sale of satellite broadband capacity, the 
sale of services, typically to Government customers, the sale of terminals and other satellite communications equipment and the sale and 
leasing of spectrum rights.  
The Avanti Executive Board, which is the chief operating decision-maker in the Group’s corporate governance structure, manage the 
business and the allocation of resources on the basis of the utilisation of its space assets, resulting in one segment. Revenue generated 
for the year was as follows: 
 
30 June  
2016  
$’m 
30 June  
2015  
$’m 
Capacity, services & equipment revenue 74.5 60.1 
Spectrum coordination – 25.1 
Exclusivity rights 8.3 – 
   
Total revenue 82.8 85.2 
The majority of total revenue for the year represents the sale of satellite broadband capacity, related services and the sale of terminals and 
other satellite communications equipment to external customers. Of this $13.2m (2015: $5.7m) relates to the sale of terminals and other 
satellite communications equipment.  
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
45
 
4. Revenue continued 
Sale of exclusivity rights 
$8.3m was recognised during the financial year from the sale of exclusivity rights. 
During the financial year, the Group entered into an agreement with Eurona Wireless Telekom SA ("Eurona"), a Spanish based Internet 
Service Provider, under which Eurona were sold the exclusive rights in perpetuity to the provision of services to the consumer broadband 
market in Spain and Portugal ("Iberia") from any existing or future Avanti Satellite.  
Eurona are required to pay a fixed, non-refundable fee of €7.5m ($8.3m) under a non-cancellable agreement in consideration for the 
rights. As a result, Eurona have sole rights to sell capacity directed over Iberia on any Avanti satellite for use in delivering service to the 
consumer broadband market. 
The exclusivity right does not convey or include any satellite capacity, which must be purchased separately. 
At the same time, Eurona entered into an agreement to purchase substantial initial capacity over Iberia with a value of €17.2m over a  
10 year period. The provision of capacity commenced in the 2017 financial year and as a result no capacity revenue was recognised 
in these financial statements. The sale of €2.5m of satellite communications equipment was recognised during the financial year and 
is included within revenue from the sale of capacity, services and equipment. 
The agreement with Eurona was assessed under the Group's accounting policy for multiple deliverable arrangements. An assessment  
was made over whether the sale of exclusivity rights, capacity and equipment represented separate units of account. This assessment 
concluded that each component was separable on the basis that each deliverable has stand-alone value to Eurona and the fair-value  
of the item can be objectively and reliably determined. 
The fair value of the undelivered components (residual value method) was used to assess the fair value of the exclusivity rights.  
This assessment led to the conclusion that there was no material difference between the contractual value of $8.3m (€7.5m) and the 
fair value of the exclusivity component. 
Spectrum revenue 
In June 2015, the Group entered into an agreement to sell, in perpetuity, certain spectrum rights related to geographic markets in which 
the Group does not seek to operate. The indefeasible right to use (“IRU”) a 3 GHz Ka-band payload over its estimated remaining life of  
13 years was received in consideration. The IRU arrangement has a fixed cost payable per annum and a variable cost based on the 
capacity of the payload that is sold. The payload can be directed over the Group’s core market of Europe, the Middle East and Africa and 
increased the Group’s current satellite capacity by approximately 20%. Revenue of $Nil (2015: $25.1m) was recognised for this transaction 
related to the utilisation of the Group’s space assets. 
The revenue recognised was based on the fair value of the consideration received, in this case the IRU of the Ka-band payload. The IRU 
was valued on a replacement cost basis which took into account the cost of building and launching a comparable payload with equivalent 
capacity and a 13 year remaining life. The Group used the costs that it has experienced in constructing and launching its existing satellite 
fleet, including those under construction, as a benchmark to reach this accounting estimate. The IRU valuation also takes into account the 
fixed cost payable per annum under the IRU agreement discounted at the Group’s estimated cost of capital of 10%. 
The Group derived $19.9m (2015: $36.5m) of its turnover from European countries outside the United Kingdom, $39.7m (2015: $27.2m) 
from countries outside Europe and $23.2m (2015: $21.5m) from the United Kingdom. 
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
46 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
5. Operating expenses 
Loss from operations for the year is stated after charging the following: 
 
30 June  
2016  
$’m 
30 June  
2015  
$’m 
Cost of sales:   
Recognition of ESA grant income  (1.2) (1.4) 
Satellite services 15.4 13.4 
Materials purchased 13.5 6.8 
Sub-contractors 
 
7.8 11.4 
Operating expenses:   
Employee benefit expense 19.8 20.0 
Operating lease expenses 2.3 2.3 
 
Depreciation and amortisation: 
  
Space asset depreciation 45.1 45.8 
Depreciation of property, plant and equipment 2.0 2.1 
Amortisation of intangible assets 0.2 0.2 
6. Auditor remuneration 
Remuneration payable to the Group’s auditor, KPMG LLP and its associates in the year is analysed below: 
 
30 June  
2016  
$’m 
30 June  
2015  
$’m 
Audit fees:   
Annual audit of the Company 0.2 0.2 
Annual audit of subsidiary companies – – 
Total audit fees 0.2 0.2 
Audit related assurance services – – 
Total audit and audit-related fees 0.2 0.2 
Tax compliance services – – 
Total non-audit services – – 
Total auditor’s remuneration 0.2 0.2 
 
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
47
 
7. Employee benefit costs 
The aggregate remuneration of all employees comprised: 
 
30 June  
2016  
$’m 
30 June  
2015  
$’m 
Wages and salaries 20.9 20.8 
Social security costs 2.4 2.0 
Pension costs 0.6 0.5 
Share based payment expense 0.4 0.7 
 24.3 24.0 
Less: costs capitalised as satellite in construction (4.5) (4.0) 
 19.8 20.0 
Employee numbers 
The average monthly number of people (including the Executive Directors) employed during the year by category of employment: 
 
30 June  
2016  
No. 
employees 
30 June  
2015  
No. 
employees 
Operations 56 49 
Sales and marketing 71 58 
Development and engineering 64 50 
Administration and executive 42 35 
 233 192 
8. Other operating income 
 
30 June  
2016  
$’m 
30 June  
2015  
$’m 
Other grant income 1.5 1.4 
Other grant income relates to a Regional Growth Fund grant linked to capital expenditure and job creation/safeguarding targets in the 
South West of the UK and is recognised on a straight line basis over 6 years.  
9. Finance income and expense 
 
30 June  
2016  
$’m 
30 June  
2015  
$’m 
Finance income   
Foreign exchange gain 13.9 – 
 13.9 – 
   
Finance expense   
Interest expense on loans and other borrowings (67.4) (54.4) 
Foreign exchange loss – (1.0) 
Finance lease expense (1.8) (0.1) 
Less: interest capitalised to satellite in construction 28.3 15.0 
 (40.9) (40.5) 
   
Net finance expense (27.0) (40.5) 
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
48 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
10. Income tax charge 
 
30 June  
2016  
$’m 
30 June  
2015  
$’m 
Current tax   
Current tax expense – – 
Overseas tax 0.1 – 
Adjustment in respect of prior periods 0.1 – 
Total current tax 0.2 – 
Deferred tax   
Origination and reversal of temporary differences (4.2) 1.6 
Adjustment in respect of prior periods 4.1 (1.4) 
Impact of change in UK tax rate 2.1 (0.2) 
Total deferred tax 2.0 – 
Total income tax 2.2 – 
The tax on the Group’s loss before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable 
to profits of the consolidated entities as follows: 
 
30 June  
2016  
$’m 
30 June  
2015  
$’m 
Loss before tax (67.2) (73.3) 
Tax credit at the UK corporation tax rate of 20.00% (2015: 20.75%) (13.4) (15.2) 
Tax effect of non-deductible expenses – 0.1 
Adjustment in respect of prior periods 4.2 (1.4) 
Effect of tax rates in foreign jurisdictions 1.0 (0.9) 
Impact of change in UK tax rate 2.1 (0.2) 
Temporary differences for which no deferred tax asset has been recognised 14.1 17.6 
Recognition of previously unrecognised temporary differences (5.8) – 
Income tax charge recognised in the Income Statement 2.2 – 
The standard rate of corporation tax in the UK fell from 21% to 20% with effect from 1 April 2015. Accordingly, the Group's profits for this 
accounting period are taxed at an effective rate of 20% (2015: 20.75%). 
The income tax charge of $2.2m (2015: nil) equates to an effective tax rate of (3)% (2015: 0%). This effective rate differs from the standard 
rate of corporation tax of 20% due to a number of items shown above. The rate is primarily driven by the Group not recognising a credit in 
respect of tax losses arising in the year due to the unpredictability of future profit streams against which these losses can 
be offset. 
Factors that may affect future tax charges  
Changes to the UK corporation tax rates were announced in the Chancellor’s Budget on 16 March 2016. The change announced is to 
reduce the main rate to 17% from 1 April 2020. Changes to reduce the UK corporation tax rate to 19% from 1 April 2017 and to 18% from  
1 April 2020 had already been substantially enacted on 26 October 2015. As the change to 17% had not been substantively enacted at 
the balance sheet date its effect is not included in these financial statements. The deferred tax balance as at the year-end has been 
recognised at 18% (2015: 20%). 
Tax losses  
At the balance sheet date the Group has unrecognised deferred tax assets of $37.2m (2015: $30.9m) available for offset against future 
profits. A deferred tax asset has been recognised in respect of $28.1m (2015: $30.5m). No deferred tax asset has been recognised in 
respect of the remaining losses and other temporary differences due to the unpredictability of future profit streams against which these 
losses could be offset. Under present tax legislation, these losses and other temporary differences may be carried forward indefinitely.  
In the future when these assets are recognised there will be a positive impact to the Group's effective tax rate.   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
49
 
11. Loss per share 
 
30 June  
2016  
cents 
30 June  
2015  
cents 
Basic and diluted loss per share (49.27) (61.50) 
The calculation of basic and diluted loss per share is based on the earnings attributable to ordinary shareholders divided by the weighted 
average number of shares in issue during the year. 
 
30 June  
2016 
30 June  
2015 
Loss for the year attributable to equity holders of the parent Company $(68.7)m $(73.1)m 
Weighted average number of ordinary shares for the purpose of basic earnings per share  139,428,427 118,975,177 
12. Profit of the parent Company 
As permitted by section 408 of the Companies Act 2006, the Income Statement of the parent Company is not presented as part of these 
accounts. The profit of the parent Company after tax for the year ended 30 June 2016 amounted to $1.8m (2015: $0.3m loss). 
13. Property, plant and equipment 
 
Leasehold 
improvement 
$’m 
Network  
assets 
$’m 
Fixtures and 
fittings 
$’m 
Satellites in 
operation 
$’m 
Satellites in 
construction 
$’m 
Group  
total 
$’m 
Cost       
Balance at 30 June 2014 2.0 14.1 2.4 667.3 44.4 730.2 
Additions – 0.7 0.3 39.5 110.6 151.1 
Transfer – – – 5.6 (5.6) – 
Disposals – (0.2) – (1.7) (1.4) (3.3) 
Effect of movements in exchange rates (0.2) (1.6) (0.1) (19.7) (3.4) (25.0) 
Balance at 30 June 2015 1.8 13.0 2.6 691.0 144.6 853.0 
Additions – 2.8 0.4 0.5 167.2 170.9 
Disposals – – – 0.2 (8.0) (7.8) 
Effect of movements in exchange rates (0.2) (3.1) (0.4) (34.7) (7.1) (45.5) 
Balance at 30 June 2016 1.6 12.7 2.6 657.0 296.7 970.6 
       
Accumulated depreciation       
Balance at 30 June 2014 0.9 9.6 1.5 107.4 – 119.4 
Charge for the year 0.3 1.4 0.4 45.8 – 47.9 
Disposals – – – – – – 
Effect of movements in exchange rates (0.1) (0.9) – (4.3) – (5.3) 
Balance at 30 June 2015 1.1 10.1 1.9 148.9 – 162.0 
Charge for the year 0.3 1.4 0.4 45.1 – 47.2 
Disposals – – – – – – 
Effect of movements in exchange rates (0.2) (2.1) (0.3) (11.1) – (13.7) 
Balance at 30 June 2016 1.2 9.4 2.0 182.9 – 195.5 
Net book value       
Balance at 30 June 2016 0.4 3.3 0.6 474.1 296.7 775.1 
Balance at 30 June 2015 0.7 2.9 0.7 542.1 144.6 691.0 
 
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
50 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
13. Property, plant and equipment continued 
Property, plant and equipment under finance lease  
At 30 June 2016, the Group held assets under finance lease agreements with a net book value of $47.8m (2015: $46.7m). A depreciation 
charge for the year of $1.7m (2015: $1.3m) has been provided on these assets. These assets are included in satellites in operation and 
network assets. 
Satellites in operation 
Satellites in operation include the following: 
 HYLAS 1 – Came into service on 1 April 2011 
 HYLAS 2 – Came into service on 1 October 2012 
 HYLAS 2B – Payload received as consideration on 24 June 2015 and came into service on 7 November 2016 
 ARTEMIS – Acquired on 31 December 2013 
All 4 satellites and their related ground infrastructure have been depreciated from the date that they came into operational service. 
HYLAS-2B 
Satellites in operation includes a Ka-band payload that the Group operates under an indefeasible right of use (“IRU”) agreement entered 
into in June 2015 for the estimated remaining useful life of the payload of 13.5 years. This payload is known as HYLAS-2B and Note 4 
provides more detail on the transaction through which this payload was received. The IRU agreement is accounted for as a finance lease 
and a Net Book Value (“NBV”) of $35.1m is included within satellites in operation and also within the assets held under finance lease 
disclosure provided above. 
The IRU of HYLAS-2B was initially recognised at its fair value of $35.1m. This asset value will subsequently be depreciated over the life 
of the IRU agreement from the date it commences operational service. The IRU was valued on a depreciated replacement cost basis. 
This was determined to be the most appropriate valuation technique as it had the most observable inputs into the model. Under this 
approach, the fair value was calculated as the cost of constructing and bringing into service an asset that could provide equivalent 
capacity. The fair value was reached by aggregating the estimated fair value of the cost to build the payload and the cost of launching 
the payload, including insuring the launch, in addition to the cost of designing and managing the procurement of the asset. Each of the 
four inputs have been classified as level 2 inputs within the fair value hierarchy. The Group obtained third party quotations for some 
elements and applied rates known from the existing fleet of satellites for other elements. 
Satellite in construction 
The satellites in construction assets of $296.7m relate to HYLAS 3 and HYLAS 4 (2015: $144.6m in relation to HYLAS 3 and HYLAS 4). 
Capitalised finance costs 
Included in the satellites in operation and satellites in construction are capitalised finance costs of $97.4m (2015: $72.0m) related to the 
HYLAS 2 and HYLAS 4 satellites. 
HYLAS 1 satellite impairment review 
HYLAS 1 is a 3 GHz Ka-band High Throughput Satellite that came into operational service on 1 April 2011. An impairment review was 
conducted and disclosed in the prior year as a result of growth in revenues being slower than forecast. 
Significant and long term new business was won during FY16 on HYLAS 1. Nevertheless, an impairment review was conducted on the 
HYLAS 1 satellite and associated network infrastructure (“HYLAS 1”), together representing the cash-generating unit ("CGU"), at 30 June 
2016 to update this assessment. The review showed that the carrying value of the assets is supported and therefore no impairment has 
been recorded. 
The recoverable amount of the CGU is determined using value in use, which is calculated by using the discounted cash flow method. 
This method considers the forecast cash flows of the HYLAS 1 satellite and associated network infrastructure over the remaining useful 
economic life of the CGU of 11 years. 
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
51
 
13. Property, plant and equipment continued 
HYLAS 1 satellite impairment review continued 
Estimates of future cash flows originate from the detailed budget for the year to 30 June 2017 as reviewed and approved by the Board. 
Forecasts for the subsequent periods assume a ramp-up of satellite capacity sold over the remaining useful life of the CGU, derived from 
a  combination of contractual ramps, development of existing customer relationships, and a modest underlying growth assumption in 
utilisation in addition to those factors of approximately 1.5% per annum. When the ramps with signed contracts mature over the coming  
12-18 months, the HYLAS 1 satellite will be approximately 60% utilised. Further growth from new and existing customers is expected in 
addition to this and has been included within the forecast cash flows. The present value of cash flows is calculated by discounting the 
cash flow at 10%. 
The estimate of future cash flows resulted in significant headroom over the carrying value of the CGU. Sensitivity analysis was carried out 
by management over assumptions made in the impairment model relating to yield, growth in utilisation and the discount factor applied. 
It was identified that, all other assumptions being consistent, headroom would be eliminated by a:  
 70% increase in discount factor applied; or 
 40% decrease in forecast yield ($/MHz per month); or 
 scenario in which uncontracted capacity is sold at a significantly slower rate than forecast. 
The above scenarios are not considered likely and the risks that they represent are considered to have been appropriately included in the 
impairment review. 
There are no indicators of impairment for any other assets within Property, plant and equipment. As a part of management’s assessment 
of the presence of any indicators of impairment, consideration was given to the current market capitalisation of the Group in addition to 
the financial restructuring process underway to support the construction of HYLAS 4. Management noted that the estimated enterprise 
value of the Group was well in excess of the carrying value of its assets and that the current value of the equity represented by the market 
capitalisation differed from the enterprise value, primarily due to the debt funding on the Group balance sheet in addition to a risk element 
that would be present until the restructuring is completed.  
14. Intangible assets 
 
Computer 
software 
$’m 
Brand  
name 
$’m 
Customer  
lists 
$’m 
Goodwill 
$’m 
Group  
total 
$’m 
Cost      
Balance at 30 June 2014  0.6   0.3   2.3   12.0   15.2  
Effect of movements in exchange rates  –  (0.1) (0.4) (2.3) (2.8) 
Balance at 30 June 2015  0.6   0.2   1.9   9.7   12.4  
Effect of movements in exchange rates  –  – – – – 
Balance at 30 June 2016 0.6 0.2 1.9 9.7 12.4 
      
Accumulated amortisation      
Balance at 30 June 2014  0.6   0.2   0.4   –   1.2  
Charge for the year  –   –   0.2   –   0.2  
Balance at 30 June 2015  0.6   0.2   0.6   –   1.4  
Charge for the year  –   –  0.2   –   0.2  
Balance at 30 June 2016 0.6 0.2 0.8 – 1.6 
Net book value      
Balance at 30 June 2016 – – 1.1 9.7 10.8 
Balance at 30 June 2015 – – 1.3 9.7 11.0 
 
The goodwill and intangible assets arose from the Group obtaining control of Filiago GmbH & Co (“Filiago”) on 1 November 2011 and 
resulted in the initial recognition of $12.1m of goodwill and $2.7m of intangible assets, representing the Filiago brand name and customer 
lists. Filiago is a German based Internet Service Provider specialising in the sale of satellite broadband services to consumer and 
enterprise customers. 
The Filiago operation is considered a Cash Generating Unit ("CGU").  FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
52 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
14. Intangible assets continued 
The Filiago goodwill is not subject to amortisation and so is required to be reviewed annually for impairment. Filiago’s goodwill impairment 
review showed that no impairment was required as at 30 June 2016. 
The recoverable amount of the Filiago CGU was determined using the value in use approach. The value in use was estimated by 
preparing a discounted cash flow forecast for Filiago over a six year period with a terminal value forecast into perpetuity after that period. 
Forecast cash flows originate from the detailed budget for the year to 31 December 2016, as reviewed and approved by the Board. 
Underlying the forecast cash flow is revenue growth as a result of Avanti's HYLAS-2B payload coming into operational service in Q2 FY17. 
This launch has transformed Filiago's product offering through the availability of a coherent territory wide solution to enterprise and 
residential users in Germany and improved quality of service. The launch also offers Filiago dedicated coverage over large portions of new 
territories including Poland & Austria. With an existing brand presence it is expected the Filiago business will deliver strong and consistent 
growth for the foreseeable future. 
Sensitivity analysis was carried out by management over assumptions, with revenue growth and the extent to which Filiago's operating 
base could be absorbed into the Avanti business being the two key variables. While management do not consider there is a significant risk 
to the achievement of revenue targets, the sensitivity considered was that if revenues only grew by 3% over the forecast period as a result 
of inflation on a steady end user base and Filiago's operating base was largely absorbed into the Avanti business then there would be 
€5.9m of headroom over the carrying value of goodwill at 30 June 2016.  
The present value of the forecast cash flows was calculated using the Group’s estimated pre-tax cost of capital of approximately 12.5% 
and is not considered to have a significant impact on the impairment conclusions. 
The brand names acquired in the course of the Filiago business combination of $0.3m are amortised on a straight line basis over a period 
of five years. At the year end the NBV of the brand names is $Nil (2015: $0.03m), after charging $0.03m (2015: $0.06m) of amortisation in 
the year. 
The customer lists acquired in the course of the Filiago business combination of $2.4m are amortised on a straight line basis over a period 
of 15 years. At the year end the carrying amount of the customer lists is $1.1m (2014: $1.3m) after charging $0.2m (2015: $0.2m) of 
amortisation in the year. 
15. Investments 
Company 
Shares in subsidiary undertakings 
 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
Beginning and end of the year  148.7   148.7  
The Directors believe that the carrying value of the investments is supported by the underlying net assets recorded on the balance sheet 
of those subsidiaries, the value of spectrum rights that have no corresponding balance sheet asset and the future forecast cash flows of 
those subsidiaries. 
A full list of the Company’s subsidiaries is disclosed in Note 16. 
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
53
 
16. Subsidiaries 
As at the end of the year the Group and Company held the following investments in subsidiary companies: 
Name of subsidiary Nature of business Place of incorporation 
Avanti Communications Limited Satellite services England & Wales 
Avanti Space Limited  Satellite services  England & Wales 
Avanti Local TV Services Limited* Satellite services  England & Wales 
Avanti Space 3 Limited* Satellite services  England & Wales 
Avanti Launch Services Limited  Management services Isle of Man 
Avanti Broadband Limited Satellite services  England & Wales 
Avanti Broadband (Ire) Limited* Satellite services  England & Wales 
Avanti HYLAS 2 Limited Satellite services  England & Wales 
Avanti HYLAS 2 Launch Services Limited Management services Isle of Man 
Avanti Communications Infrastructure Limited* Holding company England & Wales 
Avanti Employee Benefit Trust Employee benefit trust England & Wales 
Avanti HYLAS 2 Cyprus Limited Satellite services  Cyprus 
Avanti HYLAS Services Limited Project management services  Cyprus 
Avanti Communications Marketing Services Limited Sales and marketing England & Wales 
Avanti Communications Germany GmbH Satellite services  Germany 
Avanti Communications Sweden AB Satellite services  Sweden 
Avanti Turkey Uydu Telekomunikasyon Limited Sirketi Satellite services  Turkey 
Avanti Communications South Africa Pty Limited Satellite services  South Africa 
Hybeam Limited Satellite services  England & Wales 
Avanti Communications Kenya Limited Satellite services  Kenya 
Avanti Communications Africa Infrastructure Limited Holding company England & Wales 
Avanti Communications Africa 1 Infrastructure Limited Holding company England & Wales 
Avanti Communications Africa 2 Infrastructure Limited Holding company England & Wales 
Avanti Satellite Communications Services CC Limited Satellite services Nigeria 
* Company was dormant in the year ending 30 June 2016. 
The Company holds 100% ownership interest and voting power in all the above entities. 
On 1 November 2011 (the “date of control”) the Group took effective control of Filiago by enhancing the security over its loans with Filiago. 
The terms of the enhanced security gave the Group power over Avanti through Board control, continued exposure to variable returns of the 
loans provided to Filiago and the ability for Avanti to use its power over Filiago to affect the Group’s returns.  
Since the date of control, Filiago has been accounted for as a subsidiary in the Consolidated Financial Statements because of the control 
now held but, because the Group has not purchased any equity shares in the Company, a 100% non-controlling interest is recognised on 
the Statement of Financial Position.   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
54 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
17. Inventories 
Group 
 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
Finished goods 1.9 2.6 
Finished goods represent customer premises equipment which includes dishes, modems and outdoor unit transceivers. 
The cost of inventories recognised as an expense during the period was $13.5m (2015: $6.8m). 
There have been no write-downs of inventory during the year. 
18. Trade and other receivables 
 Group Company 
 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
Trade receivables 45.8 22.2 0.1 – 
Less provision for impairment of trade receivables (6.5) (4.4) – – 
Net trade receivables 39.3 17.8 0.1 – 
Accrued income 27.7 10.6 – – 
Prepayments 10.3 5.5 5.2 7.5 
Amounts due from Group companies – – 385.4 85.6 
Other receivables 2.2 1.6 – 0.3 
 79.5 35.5 390.7 93.3 
Net trade receivables and accrued income increased mainly as a result of contracts reaching milestones at the end of the final quarter 
which resulted in invoicing or revenue accruals. Of the accrued income balance of $27.7m, $16.4m was due from investment grade 
customers who are either Government’s or very well established corporations whose underlying customer is a government. The credit 
terms associated with the components within accrued income are largely consistent to the Group’s trade receivables which are in the 
range of 30 to 90 days. 
Included in the Group’s trade receivables balance at 30 June 2016 is a long term receivable of $7.2m (2015: $8.5m). 31% of the original 
balance has already been collected, with the remainder payable in instalments due every three months such that the receivable will be 
fully repaid by 30 June 2019. In addition to the instalments payable, interest is payable at 5.25% per annum.  
For discussion of credit risk, refer to Note 23(b). 
The Company has non-current trade and other receivables of $642.5.m (2015: $917.6m) relating to amounts due from Group companies. 
The Directors believe that the carrying value of the intercompany balances is supported by the underlying net assets recorded on the 
balance sheet of those subsidiaries, the value of spectrum rights that have no corresponding balance sheet asset and the future forecast 
cash flows of those subsidiaries.   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
55
 
19. Deferred taxation 
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset tax assets against tax liabilities and 
when the deferred income taxes relate to the same fiscal authority. The offset amounts are as follows: 
 Group Company 
 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
Deferred tax assets 28.0 30.5 0.5 0.5 
Deferred tax liabilities (9.4) (11.0) – – 
 18.6 19.5 0.5 0.5 
The gross movement on the deferred income tax account is as follows:     
Balance at beginning of year 19.5 21.1 0.5 0.5 
Income tax recognised in the income statement (1.9) – – – 
Tax (credited)/charged directly to equity – – – – 
Effects of movements in exchange rates 1.0 (1.6) – – 
Balance at end of year 18.6 19.5 0.5 0.5 
Group 
 
Opening 
balance  
$’m 
Credited/ 
(charged) to 
the Income 
Statement  
$’m 
(Credited)/ 
charged  
to equity 
 $’m 
Effects of 
movements  
in exchange 
rates  
$’m 
Closing 
balance  
$’m 
30 June 2016      
Tax assets      
Unused tax losses  25.7 3.0 – (2.8) 25.9 
Provisions and deferred income 3.7 (1.0) – (0.6) 2.1 
Share based payment 1.1 (1.2) – 0.1 – 
Total tax assets 30.5 0.8 – (3.3) 28.0 
Tax liabilities      
Property, plant and equipment (11.0) (2.7) – 4.3 (9.4) 
Total tax liabilities (11.0) (2.7) – 4.3 (9.4) 
Net deferred tax asset 19.5 (1.9) – 1.0 18.6 
Group 
 
Opening 
balance  
$’m 
Credited/ 
(charged) to  
the Income 
Statement  
$’m 
(Credited)/ 
charged  
to equity  
$’m 
Effects of 
movements  
in exchange 
rates  
$’m 
Closing  
balance  
$’m 
30 June 2015      
Tax assets      
Unused tax losses  26.1 1.6 – (2.0) 25.7 
Provisions and deferred income 3.7 – – 0.1 3.8 
Share based payment 1.0 – – – 1.0 
Total tax assets 30.8 1.6 – (1.9) 30.5 
Tax liabilities      
Property, plant and equipment (9.7) (1.6) – 0.3 (11.0) 
Total tax liabilities (9.7) (1.6) – 0.3 (11.0) 
Net deferred tax asset 21.1 – – (1.6) 19.5 
 
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
56 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
19. Deferred taxation continued 
Company 
 
Opening 
balance  
$’m 
Credited/ 
(charged) to 
the Income 
Statement  
$’m 
(Credited)/ 
charged  
to equity  
$’m 
Effects of 
movements  
in exchange 
rates  
$’m 
Closing 
balance  
$’m 
30 June 2016      
Tax assets      
Share based payment 0.1 – – – 0.1 
Unused tax losses  0.4 – – – 0.4 
Total tax assets 0.5 – – – 0.5 
Company 
 
Opening 
balance  
$’m 
Credited/ 
(charged) to  
the Income 
Statement  
$’m 
(Credited)/ 
charged  
to equity  
$’m 
Effects of 
movements  
in exchange 
rates  
$’m 
Closing  
balance  
$’m 
30 June 2015      
Tax assets      
Share based payment 0.1 – – – 0.1 
Unused tax losses  0.4 – – – 0.4 
Total tax assets 0.5 – – – 0.5 
At 30 June 2016: 
 none of the deferred tax asset of $28.0m (2015: $30.5m) is expected to be recovered in the next 12 months  
 none of the deferred tax liability of $9.4m (2015: $11.0m) is expected to be settled in the next 12 months 
 the total unrecognised deferred tax asset totalled $37.2m (2015: $30.9m). This is made up of unused tax losses of $37.2m  
(2015: $24.9m) and other temporary differences of $Nil (2015: $6.0m). 
 
The recognition of deferred tax assets is based upon whether it is more likely than not that sufficient and suitable taxable profits will  
be available in the future against which the reversal of temporary differences can be deducted. To determine the future taxable profits, 
reference is made to the latest available profit forecasts. Where the temporary differences are related to losses, relevant tax law is 
considered to determine the availability of the losses to offset against the future taxable profits.  
Recognition therefore involves judgement regarding the future financial performance of the particular legal entity or tax group in which the 
deferred tax asset has been recognised.  
Significant items on which the Group has exercised accounting judgement include recognition of deferred tax assets in respect of losses 
and accelerated capital allowances in the United Kingdom.  
The amounts recognised in the consolidated financial statements in respect of each matter are derived from the Group’s best estimation 
and judgement as described above. The inherent uncertainty regarding the outcome of these items means eventual resolution could 
differ from the accounting estimates and therefore impact the Group’s results and cash flows. The nature of the evidence supporting the 
recognition of the deferred tax asset included contracted revenue that will be recognised in future periods, revenue from new business 
signed in FY17, forecast revenue in future periods from opportunities in the pipeline and taxable temporary differences of an appropriate 
type that reverse in an appropriate period,  
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
57
 
20. Cash and cash equivalents 
Cash and cash equivalents at the end of the financial year as shown in the Statement of Financial Position and the Cash Flow Statement  
is shown in the table below. The Group has no bank overdrafts. 
Group 
 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
Cash and bank balances 55.0 120.6 
Short-term deposits 1.4 1.6 
Net cash and cash equivalents 56.4 122.2 
21. Trade and other payables 
 Group Company 
 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
Current     
Trade payables 49.5 3.9 0.1 – 
Social security and other taxes 0.7 0.7 – – 
Other payables 3.8 1.1 – – 
Accruals  22.0 23.5 16.2 13.1 
Deferred income  6.8 2.7 – - 
Amounts due to Group companies – – 29.9 141.8 
 82.8 31.9 46.2 154.8 
     
Non-current     
Deferred income 12.7 16.8 – – 
 12.7 16.8 – – 
Accruals above include the interest accrued in the Company of $16.1m (2015: $13.0m) in relation to the High Yield Bonds. See Note 22 
Loans & Borrowings for further details. 
22. Loans and other borrowings 
 Group current Group non-current 
 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
Secured at amortised cost     
High yield bonds – – 629.5 510.3 
Finance lease liabilities
(i)
 3.3 4.7 12.5 13.4 
 3.3 4.7 642.0 523.7 
 Company current Company non-current 
 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
Secured at amortised cost     
High yield bonds – – 629.5 510.3 
Finance lease liabilities
(i)
 2.8 2.7 2.7 4.0 
 2.8 2.7 632.2 514.3 
(i)
 Finance lease obligations are secured by retention of title to the related assets. The borrowings are on fixed interest rate debt with repayment periods between 3 and 
13.5 years. See Note 26 for more details.  FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
58 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
22. Loans and other borrowings continued 
High yield bonds 
The Company issued 10% Senior Secured Notes of $370.0m, $150.0m and $125.0m on 1 October 2013, 17 June 2014 and 17 August 
2015 respectively.  
Issuer Original notional value Description of instrument Due 
Avanti Communications Group plc $645.0M 10% Senior Secured Notes 1 October 2019 
The high yield bonds are disclosed in non-current loans and borrowings as detailed below: 
 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
High yield bonds 645.0 520.0 
Add: Amortised issue premium  4.6 6.0 
Less: Amortised issue discount (7.8) – 
Less: Amortised debt issuance costs (12.3) (15.7) 
 629.5 510.3 
The fair value of the High Yield Bonds, which are listed on the Irish Stock Exchange (Level 1 in the fair value hierarchy), at 30 June 2016 
was $0.75 for each bond with a face value of $1(2015: $0.95). See Note 31 for details of a restructuring of the existing Senior Secured 
Notes after the balance sheet date and the issue of new Senior Secured Notes. 
23. Financial instruments and risk management 
Group 
The Group’s principal financial instruments comprise High Yield Bonds, finance leases and cash and short-term deposits. The main 
purpose of these financial instruments is to provide finance for the Group’s operations. The Group has various other financial assets 
and liabilities such as trade receivables and payables which arise directly from operations.  
The Group is subject to the risks arising from adverse movements in interest rates and foreign currency. Credit risk and liquidity risk 
also arise from the Group’s financial instruments. The managing of these risks, along with the day-to-day managing of treasury activities, 
is performed by the finance team.  
All financial instruments have been measured at amortised cost. As such, financial assets being cash & cash equivalents and trade and 
other receivables are classified as “Loans and Receivables” and financial liabilities being trade and other payables and interest-bearing 
liabilities have been classified as “Other Financial Liabilities”. 
a) Market risk 
i) Foreign exchange risk management 
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect 
to GBP and the Euro. In order to mitigate the foreign currency risk the Group monitors the level to which natural hedges occur and 
continually reviews the need to enter into forward contracts in order to mitigate any material forecast exposure.  
At 30 June 2016, if the Euro had weakened/strengthened against the US Dollar by 5% with all other variables held constant, post tax loss 
would have worsened by $0.4m or improved by $0.4m (2015: post tax loss would have worsened by $0.4m or improved by $0.4m). 
At 30 June 2016, if Sterling had weakened/strengthened against the US Dollar by 5% with all other variables held constant, post tax loss 
would have improved by $0.7m or worsened by $0.7m (2015: post tax loss would have improved by $0.8m or worsened by $0.8m). 
The Group has a presentational currency of US Dollars. Whilst a number of companies within the Group have a functional currency that is 
also US Dollars, certain trading subsidiaries have a functional currency of Sterling or Euro’s. As a result, the Group experiences translation 
foreign exchange risk of assets and liabilities of non US Dollar subsidiaries on consolidation in addition to the translation of US Dollar  
inter-company loans to non US Dollar functional currency subsidiaries that are accounted for as akin to equity. These two factors drive 
the foreign exchange movements disclosed in the Consolidated Statement of Other Comprehensive Income.  
The average volatility of rates during the year compared to the year-end exchange rate was 5.2% and therefore management believes that 
a 5% sensitivity rate provides a reasonable basis upon which to assess expected changes in foreign exchange rates.  FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
59
 
23. Financial instruments and risk management continued 
Group continued 
a) Market risk continued 
ii) Interest Risk Management 
The Group borrows in pounds Sterling and US Dollars at fixed rates of interest and does not seek to mitigate the effect of adverse 
movements in interest rates. Cash and deposits earn interest at fixed rates based on banks’ short term treasury deposit rates. Short-term 
trade and other receivables are interest free. 
b) Credit risk management 
The Group’s principal financial assets are cash and short term deposits and trade and other receivables. Cash and cash equivalents are 
deposited with high-credit quality financial institutions with a minimum rating of A+. The Group has no significant concentrations of credit 
risk. Trade receivables are principally from Government customers and well established corporations. The increase in trade receivables 
at 30 June 2016 is due to contracts reaching milestones at the end of the final quarter which resulted in invoicing to such Government 
customers and well established corporations. The credit quality of major customers is assessed before trading commences taking into 
account its financial position, past experience and other factors. 
 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
Trade receivables 39.3 17.8 
Total 39.3 17.8 
The ageing of trade receivables and other financial assets which have not been impaired was as follows: 
 
Not past due 
 $’m 
1-30 days  
$’m 
31-60 days 
 $’m 
60+ days 
$’m 
Total 
$’m 
30 June 2016 29.5 5.4 1.0 3.4 39.3 
30 June 2015 12.7 1.7 0.7 2.7 17.8 
Movements in the provision for impairment of trade receivables are as follows: 
 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
At 1 July 2015 4.4 4.6 
Allowances made in the period 2.4 1.7 
Amounts used and reversal of unused amounts (0.3) (1.9) 
At 30 June 2016 6.5 4.4 
The provision of $6.5m (2015: $4.4m) has been raised against gross trade receivables of $45.8m (2015: $22.2m). Every major customer 
is assessed on an individual basis and we provide for bad debts when an impairment has been identified. 
In addition to trade receivables, the year-end balance sheet includes $27.7m of accrued income (2015: $10.6m). $16.4m of accrued 
income was due from investment grade counter parties, either Government customers or large corporate customers where the underlying 
customer is a Government. The credit terms associated with the components within accrued income are largely consistent to the Group’s 
trade receivables which are in the range of 30 to 90 days. 
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
60 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
23. Financial instruments and risk management continued 
Group continued 
c) Liquidity risk management 
Liquidity risk is the risk that we may have difficulty in obtaining funds in order to be able to meet both our day-to-day operating 
requirements and our debt servicing obligations. We manage our exposure to liquidity risk by regularly monitoring our liabilities. 
Cash and cash forecasts are monitored on a daily basis and our cash requirements are met by a mixture of short term cash deposits, 
debt and finance leases. 
The following table analyses the Group’s financial liabilities into relevant maturity groupings based on the expected undiscounted 
cash flows. 
 
Within  
1 year 
$’m 
1-2 years 
$’m 
2-5 years 
$’m 
5+ years 
$’m 
Contractual 
amount 
$’m 
Carrying 
 amount 
$’m 
30 June 2016       
High yield bonds – – 645.0 – 645.0 629.5 
Finance leases 4.7 3.3 6.9 11.6 26.5 15.8 
Trade payables 49.5 – – – 49.5 49.5 
30 June 2015       
High yield bonds – – 520.0 – 520.0 510.3 
Finance leases 5.8 4.6 7.0 12.4 29.8 18.1 
Trade payables 3.9 – – – 3.9 3.9 
Interest is payable on the high yield bonds at 10% per annum over the three year remaining life of the bonds. See Note 31 for  
a post year-end financial restructuring which has extended the maturity of the high yield bonds. 
In addition, the Company has net intercompany receivables carried at $355.4m (2015: net receivables carried at $861.4m). 
The contractual amount is the carrying amount. 
d) Capital risk management 
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide 
returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. 
The capital structure of the Group consists of debt, which includes borrowings (Note 22), cash and cash equivalents (Note 20) and equity 
attributable to equity holders of the parent, comprising Ordinary Share capital, share premium, other reserves and retained earnings. 
We endeavour to maximise earnings and minimise risk through an appropriate balance of debt and equity. 
e) Financial instruments by category 
Group 
Assets as per balance sheet 
Loans and 
receivables 
$’m 
Total 
$’m 
30 June 2016   
Trade and other receivables (excl prepayments) 69.2 69.2 
Cash and cash equivalents 56.4 56.4 
 125.6 125.6 
30 June 2015   
Trade and other receivables (excl prepayments) 30.0 30.0 
Cash and cash equivalents 122.2 122.2 
 152.2 152.2 
 
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
61
 
23. Financial instruments and risk management continued  
Group continued 
e) Financial instruments by category continued 
Liabilities as per balance sheet 
Other financial 
liabilities at 
amortised cost 
$’m 
Total 
$’m 
30 June 2016   
Borrowings (excl finance lease liabilities) 629.5 629.5 
Finance lease liabilities 15.8 15.8 
Trade and other payables (excl non-financial liabilities) 94.9 94.9 
 740.2 740.2 
30 June 2015   
Borrowings (excl finance lease liabilities) 510.3 510.3 
Finance lease liabilities 18.1 18.1 
Trade and other payables (excl non-financial liabilities) 48.0 48.0 
 576.4 576.4 
Company 
Assets as per balance sheet 
Loans and 
receivables 
$’m 
Total 
$’m 
30 June 2016   
Trade and other receivables (excl prepayments) 385.5 385.5 
 385.5 385.5 
30 June 2015   
Trade and other receivables (excl prepayments) 85.8 85.8 
 85.8 85.8 
 
Liabilities as per balance sheet 
Other financial 
liabilities at 
amortised cost 
$’m 
Total 
$’m 
30 June 2016   
Borrowings (excl finance lease liabilities) 629.5 629.5 
Finance lease liabilities 5.5 5.5 
Trade and other payables (excl non-financial liabilities) 46.2 46.2 
 681.2 681.2 
30 June 2015   
Borrowings (excl finance lease liabilities) 510.3 510.3 
Finance lease liabilities 6.7 6.7 
Trade and other payables (excl non-financial liabilities) 154.8 154.8 
 671.8 671.8 
The Group has no financial instruments carried at fair value through profit or loss. All financial liabilities are carried at amortised cost and 
all loans and receivables are measured at initial recognition at fair value and are subsequently measured at amortised cost using the 
effective interest rate method where the time value of money is material. Appropriate allowances for estimating irrecoverable amounts 
are recognised in the Income Statement where there is evidence that the asset is impaired. 
Company 
Overall interest rate risk, foreign exchange risk, market risk, credit risk and liquidity risk are managed on a Group wide basis. Any derivatives, 
of which there are none at 30 June 2016 (2015: None) are measured at fair value and intercompany balances and accruals are measured 
at amortised cost. All intercompany balances are repayable on demand and accruals and derivatives mature in less than 1 year. 
There is no provision for impairment against any of the Company’s financial assets.  FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
62 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
24. Share capital – issued and fully paid 
 
Number of 
shares  
‘000 
Group and 
Company 
ordinary  
Shares  
$’m 
EBT  
shares  
$’m 
Group and 
company  
share  
premium  
$’m 
At 1 July 2015 141,803 2.4 (0.1) 505.3 
Shares issued 3,593 0.1 – 10.6 
Issue of treasury shares to EBT 2,000 – – – 
At 30 June 2016 147,396 2.5 (0.1) 515.9 
On 18 August 2015, the Group issued 3,592,781 of ordinary shares at £2.01 per share. On 16 October 2015, the Group issued 2,000,000 
shares to the EBT at £0.01 per share.  
25. Share based payments 
The fair value of share based payments charged to the Income Statement in the period was $0.5m (2015: $0.7m). The full fair value of 
these share based payments are recognised over their respective vesting periods. All share based payment plans are equity settled and 
details of these plans are set out below. 
The Company has established 18 share based payment schemes: 
 Enterprise Management Incentives scheme (“EMI”) 
 Long Term Incentive Plan (“LTIP”) 
 Unapproved share option plan (2007) 
 Unapproved share option plan (March 2010) 
 Unapproved share option plan (July 2010) 
 Unapproved share option plan (October 2010) 
 Unapproved share option plan (April 2011) 
 Unapproved share option plan (July 2011) 
 Unapproved share option plan (October 2011) 
 Unapproved share option plan (October 2011) key management personnel 
 Save As You Earn scheme (“SAYE”) (November 2011) 
 Unapproved share option plan (March 2012) 
 Unapproved share option plan (April 2012) 
 Long Term Incentive Plan (“LTIP”) (July 2013) 
 Unapproved share option plan (October 2013) 
 Save As You Earn scheme (“SAYE”) (November 2013) 
 Unapproved share option plan (May 2014) 
 Unapproved share option plan (May 2015) 
 
The 2016 charges for each of the significant plans above were as follows: 
 
2016  
charge  
$’m 
2015  
charge  
$’m 
LTIP schemes  –  0.1  
Unapproved schemes  0.4   0.6  
  0.4   0.7  
To date all options (with exception of the SAYE scheme) have been granted with a strike price of 1 pence. The strike price on the 
SAYE scheme 2011 is £3.09, and £2.10 on the SAYE scheme 2013. 
In July 2007 an Employee Benefit Trust (“EBT”) was established. The EBT is managed by Bedell Trustees in Jersey. The results of the 
EBT have been consolidated into the Group’s results. 
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
63
 
25. Share based payments continued 
The table below sets out the number and weighted average exercise prices (“WAEP”) of, and movements in, the share schemes during 
the year: 
 
2016  
No. 
2016  
WAEP 
2015  
No. 
2015  
WAEP 
EMI     
Outstanding at the beginning of the year  126,344   £0.01  131,078  £0.01  
Granted during the year – – – –  
Forfeited in the year – – (2,066)  £0.01  
Exercised during the year (8,000) £0.01 (2,668)  £0.01  
Outstanding at the end of the year 118,344  £0.01  126,344  £0.01  
     
Unapproved schemes     
Outstanding at the beginning of the year  1,218,162  £0.01 884,691  £0.01  
Granted during the year  11,000  £0.01 445,000  £0.01  
Forfeited in the year (91,000) £0.01 (111,529)  £0.01  
Exercised during the year (91,000) £0.01 – –  
Cancelled in the year –  – (485,162)  £0.01  
Reissued in the year –  – 485,162  £0.01  
Outstanding at the end of the year 1,047,162 £0.01 1,218,162  £0.01  
     
SAYE schemes     
Outstanding at the beginning of the year  96,015  £2.10 209,669  £2.70  
Granted during the year –  – – –  
Forfeited in the year – – (113,654)  £3.09  
Exercised during the year – – – – 
Outstanding at the end of the year 96,015 £2.10 96,015  £2.10  
The weighted average share price for the year ended 30 June 2016 was £1.56 (2015: £2.24). 118,344 (2015: 126,344) of the EMI options 
were exercisable at 30 June 2016. 
The exercise price of the share based payments outstanding at 30 June 2016 was £0.01 and the weighted average remaining contractual 
life was 8.5 years (2015: 9.4 years). 
Each scheme has slightly different exercise criteria and therefore separate valuation models were used. 
EMI Scheme 
The EMI scheme was used to issue share based payments to staff on 24 July 2007 at an exercise price of 1p. The new share based 
payments were issued for 10 years with 25% vesting at the end of years 3, 4, 5 and 6. Those staff who had previously held unvested share 
based payments in the former parent Company at the time of the de-merger were given a shorter vesting period for these new share 
based payments. There are no performance criteria associated with these options and they are exercisable as long as the option holder 
remains an employee of the Company. 
The weighted average inputs to the Black-Scholes model are as follows: 
Share price at date of grant   £2.16 
Fair Value    £2.04 
Expected volatility    35% 
Weighted average exercise price  £0.01 
Expected life    4 years 
Expected dividend yield   1% 
Risk-free interest free   5.5% 
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
64 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
25. Share based payments continued 
EMI Scheme continued 
Expected volatility was determined by calculating the actual volatility of the Group’s share price since flotation. The expected life used  
in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and 
behavioural considerations. 
Long Term Incentive Plan 
The LTIP was established by the Company with approval from the Remuneration Committee to reward and incentivise the Executive 
Directors and senior managers of the Company. 
The LTIP allocations are in separate sub funds within the EBT and are subject to a discretionary Trust. The shares are subject to automatic 
revocation if certain criteria (set out below) are not met and continue to be revocable for the entire Trust period. 
The allocations into the LTIP vary for each executive. The total remaining allocation to each executive falls into the following tranches: 
i) The Core Tranche 
This element of the grant became exercisable in seven equal instalments. The first instalment was exercisable on grant and the second 
on 30 June 2008. The remaining five were exercisable yearly thereafter. 
ii) The Exceptional Achievement Tranche 
This element of the grant was amended during 2010. Originally, these options were only exercisable if the average market value of the 
share exceeded £5.00 for a consecutive period of six months prior to 30 June 2010. Given the unprecedented market conditions over  
the previous year, the Remuneration Committee considered that whilst the executives had performed well and that the share price had 
outperformed the FTSE 100 and AIM All Share Index since the LTIPs were granted, the target set in the LTIP rules may still not be 
achieved. 
In May 2010 the Remuneration Committee agreed to extend the target date to 31 December 2010 and that the six month average target 
price should be increased £5.50. The benchmark for this tranche of LTIP was satisfied in November 2010. 
iii) The Extraordinary Achievement Tranche  
This element of the grant was only exercisable if the market value of a share exceeded £10.00 for a consecutive period of six months 
before 30 June 2013. At 30 June 2013, the criteria of the extraordinary achievement tranche had not been met, therefore the outstanding 
shares were returned to the EBT. 
 
Executive  
directors  
No. 
Senior  
managers  
No. 
Original allocations:   
Core  1,192,960   125,000  
Exceptional  679,570   62,500  
Extraordinary  679,213   62,500  
Additional grant July 2010  400,000  –  
Total allocation  2,951,743   250,000  
Core vested (1,192,960) (107,143) 
Exceptional vested (679,570) (62,500) 
Unvested balance returned to the EBT (1,079,213) (62,500) 
Outstanding balance 30 June 2015 –   17,857  
   
Movements in year ended 30 June 2016:   
Core vested –  (17,857) 
Outstanding balance at 30 June 2016 –  –  
 
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
65
 
25. Share based payments continued 
Long Term Incentive Plan continued 
iv) The Share Award Tranche  
The share award LTIP 2015 was issued 30 July 2013 to 30 June 2015. Two-thirds of the award was based on revenue performance for 
the year ending 30 June 2015. One-third of the award was based on the share price as at 30 June 2015. 
In 2015, the Remuneration Committee determined that 50% of the 2015 award should be made but that, in the longer term interests of the 
Company, vesting should be made subject to the achievement of an additional criterion that the share price should remain at or above 
a certain level for three consecutive months. This amended award shall lapse if this is not achieved by 30 June 2020. 
A second LTIP award was issued on 14 January 2014 to 30 June 2016. As consistent with the earlier LTIP, two-thirds of the award is based 
on revenue performance for the year ending 30 June 2016. Therefore there is no charge relating to that part of the LTIP. One-third of the 
award is based on the share price as at 30 June 2016. The revenue performance and share price criteria were not met as at 30 June 2016. 
However, the Remuneration Committee determined that, in the longer term interests of the Company, the award should remain extant but 
vesting should be made subject to the achievement of an additional criterion that the share price should remain at or above a certain level 
for three consecutive months. This amended award shall lapse if this is not achieved by 30 June 2020. 
A third LTIP award was issued on 5 November 2014 to 30 June 2017. As consistent with the earlier LTIP awards, two-thirds of the award is 
based on revenue performance for the year ending 30 June 2017. Therefore there is no charge relating to that part of the LTIP. One-third 
of the award is based on the share price as at 30 June 2017. 
A fourth LTIP award was issued on 9 October 2015 to 30 June 2018. As consistent with the earlier LTIP awards, two-thirds of the award 
is based on revenue performance for the year ending 30 June 2018. Therefore there is no charge relating to that part of LTIP. One-third 
of the award is based on a share price as at 30 June 2018. 
The total number of options issued under the awards was as follows: 
 
 
 30 June 2015  30 June 2016 
 
   
Amended 
award 
  Total award  Two-thirds One-third 
 
   
Dependent on 
share price   
Dependent on 
revenue 
performance 
Dependent on 
share price 
Executive directors   315,651  678,729 452,486 226,243 
Senior managers   104,773  221,289 147,526 73,763 
   420,424  900,018 600,012 300,006 
 
 
 
 30 June 2017  30 June 2018 
   Total award  Two-thirds One-third   Total award  Two-thirds One-third 
 
  
Dependent on 
revenue 
performance 
Dependent on 
share price   
Dependent on 
revenue 
performance 
Dependent on 
share price 
Executive directors   695,697 463,798 231,899  730,482 486,988 243,494 
Senior managers   304,877 203,251 101,626  318,097 212,065 106,032 
   1,000,574 667,049 333,525  1,048,579 699,053 349,526 
 
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
66 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
25. Share based payments continued 
Unapproved Schemes 
At 30 June 2016, there were 13 unapproved schemes in place, established at various dates since 2007.  
Under each scheme, the options are issued for 10 years with 33% vesting at the end of years 3, 4 and 5.  
Prior to 1 May 2015, nine of the schemes (noted below) required the market value of the shares to be £10.00 or more per share for a 
consecutive period of six months in order for the vesting conditions to be met. On 1 May 2016, the remaining options in these schemes 
were cancelled, and reissued where the option holder continued to be employed by the Group. The reissued options require the market 
value of the shares to be £5.00 or more per share for a consecutive period of six months in order for the vesting conditions to be met. 
Other terms remained the same. 
Unapproved schemes reissued with £5.00 share price vesting criteria: 
 Unapproved share option plan (March 2010) 
 Unapproved share option plan (October 2010) 
 Unapproved share option plan (April 2011) 
 Unapproved share option plan (July 2011) 
 Unapproved share option plan (October 2011) 
 Unapproved share option plan (March 2012) 
 Unapproved share option plan (April 2012) 
 Unapproved share option plan (July 2013) 
 Unapproved share option plan (May 2014) 
 
In addition, one new unapproved scheme was established in the year ended 30 June 2015, also with £5.00 share price vesting criteria: 
 Unapproved share option plan (May 2015) 
 
For all other schemes, there are no performance criteria and the options are exercisable as long as the time vesting criteria are met and 
the option holder remains with the company. 
Save as you earn (“SAYE”) schemes 
The SAYE schemes were established in November 2011 and November 2013 and were open to all employees of the Company at the time. 
SAYE is an HMRC approved all employee savings-related share option scheme under which employees save up to a limit of £250.00 on 
a four weekly basis with an option to buy shares in the Company at the end of a three year period at a discount of up to 20% of the market 
value on the grant date. Options are not subject to performance conditions. All options are exercisable from three years from the date of 
grant. All options expire six months from their exercise date. 
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
67
 
26. Obligations under finance leases 
Leasing arrangements 
Finance leases relate to capital equipment with typical lease terms of three to five years. The Group has the option to purchase the 
equipment for a nominal value at the conclusion of the lease agreement. The Group’s obligations under finance leases are secured 
by the lessor’s title to the leased assets. 
Also included under finance leases is the 13.5 year IRU agreement described in Note 4. The IRU was assessed as constituting a lease 
on the basis that: 
 the Ka-band payload that the Group has the right to use is judged as being a specific, identifiable and physically separate asset that 
is not capable of substitution under the agreement 
 the Group has the right to direct others how to operate the asset 
 the Group has obtained all of the asset’s output 
 
The lease was assessed as a finance lease on the basis that the lease transfers substantially all the risks and rewards incidental to 
ownership, including: 
 Avanti have full control over the commercialisation of the payload.  
 Avanti carry substantially all of the risk associated with lack of sales from the payload 
 Avanti carry all of the risk associated with any deterioration, including complete failure, of the payload’s performance over the 
lease term 
Further supporting the conclusion that the lease is a finance lease is the fact that the lease is for the remainder of the assets useful 
economic life. 
The minimum lease payments comprise the annual fixed costs payable over the life of the IRU agreement. The minimum lease payments 
exclude the variable cost payable per month based on the capacity of the payload that is sold as this is considered to be a contingent 
payment. The variable cost is expensed within cost of sales in the period that it relates to. 
The present value of the minimum lease payments in relation to this agreement and included below is $10.5m of which $0.4m is current 
and $10.1m is non-current. 
Finance lease liabilities 
 
Group 
Minimum lease payments 
Group  
Present value of lease payments 
 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
No later than 1 year 4.7 5.8 3.3 4.7 
Later than 1 year no later than 5 years 10.2 11.6 5.4 7.3 
Later than 5 years 11.6 12.4 7.1 6.1 
 26.5 29.8 15.8 18.1 
Less future finance charge (10.7) (11.7) – – 
 15.8 18.1 15.8 18.1 
 
 
Company 
Minimum lease payments 
Company  
Present value of lease payments 
 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
No later than 1 year 3.1 3.0 2.8 2.7 
Later than 1 year no later than 5 years 3.8 5.4 2.7 4.0 
 6.9 8.4 5.5 6.7 
Less future finance charge (1.4) (1.7) – – 
 5.5 6.7 5.5 6.7  FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
68 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
26. Obligations under finance leases continued 
Finance lease liabilities continued 
Included in the Financial Statements as: 
 Group Company 
 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
Current borrowings 3.3 4.7 2.8 2.7 
Non-current borrowings 12.5 13.4 2.7 4.0 
Present value of minimum lease payments 15.8 18.1 5.5 6.7 
 
27. Obligations under operating leases  
The Group’s future aggregate minimum lease payments under non-cancellable operating leases are as follows: 
 
30 June  
2016 
30 June 
 2015 
 
Land & 
Buildings  
$’m 
Land & 
Buildings 
 $’m 
No later than one year 1.8 2.0 
Later than 1 year no later than 5 years 6.9 10.1 
After 5 years 20.4 23.9 
 29.1 36.0 
Operating lease commitments principally relate to leased office space of the Group’s head office. The Group entered in a 20 year lease 
on the property on 6 May 2013, with annual rent of $1.7m. 
28. Capital commitments 
As at 30 June 2016 the Group has contracted but not provided for capital commitments of $42.7m in relation to the procurement of  
HYLAS 3 (2015: $45.2m) and $82.3m in relation to the procurement of HYLAS 4 (2015: $nil). As at 30 June 2015, the Group had not  
been contractually committed to any future payments related to the construction of HYLAS 4. 
29. Related party transactions and directors’ emoluments 
Transactions with Directors 
Details of the Directors’ remuneration are set out below in aggregate for each of the categories specified in the Companies Act 2006. 
 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
Salaries and other short term employee benefits  2.7   2.8  
Bonus –   1.2  
  2.7   4.0  
Payments into defined contribution schemes  0.2  0.1  
  2.9   4.1  
Pension contributions amounting to $0.2m (2015: $0.1m) were made into personal pension schemes in respect of four (2015: two)  
of the Directors. 
No Non-Executive directors exercised share options in the period.  
 
  FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
69
 
29. Related party transactions and directors’ emoluments continued 
Transactions with Directors continued 
The emoluments of the highest paid Director totalled $0.8m (2015: $1.2m), made up of: 
Total emoluments 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
Salaries and other short term employee benefits  0.7   0.7  
Bonus  –   0.5  
Payments into defined contribution schemes 0.1  –  
Total emoluments  0.8   1.2  
 
Transactions with Directors and key management personnel – Group and Company  
Details of the remuneration of Directors and key management personnel are set out below in aggregate for each of the categories 
specified in IAS 24 “Related Party Disclosures”. 
Key management personnel are considered to be the Board (executive and non-executive), the general counsel, the head of regulatory, 
and the managing director of the Government division. 
 Group Company 
Total emoluments 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
Salaries and other short term employee benefits  3.1   4.0   0.4   0.6  
Bonus  0.1   1.8  – –  
Payments into defined contribution schemes  0.3   0.1   – –  
  3.5   5.9   0.4   0.6  
Other related party transactions 
Subsidiaries 
Intra-Group transactions are eliminated on consolidation and are not reported in the Group accounts. The Company charged the following 
management fees to its subsidiaries: 
 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
Avanti Communications Limited  2.9   3.1  
Avanti Broadband Limited  4.6   3.6  
Avanti Space Limited  1.6   1.3  
Avanti HYLAS 2 Limited  1.9   1.8  
  11.0   9.8  
The parent Company had the following intercompany balances outstanding at the year-end: 
 
30 June  
2016 
$’m 
30 June 
 2015 
$’m 
Avanti Communications Limited – 52.8 
Avanti Space Limited 9.6 19.6 
Avanti Broadband Limited – 6.5 
Avanti HYLAS 2 Limited 612.6 782.4 
Avanti Communications Infrastructure Limited 375.8 – 
 998.0 861.4 
Intercompany balances are unsecured and repayable on demand.   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
70 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
 
30. Cash absorbed by operations 
 
Group  
30 June  
2016  
$’m 
Group  
30 June  
2015  
$’m 
Company  
30 June  
2016  
$’m 
Company  
30 June  
2015  
$’m 
(Loss)/profit before taxation (67.2) (73.3) 1.7 (0.3) 
Interest receivable – – (67.7) (55.6) 
Interest payable 38.8 37.7 63.2 52.3 
Amortised bond issue costs 2.4 1.8 2.4 2.1 
Foreign exchange loss/(gain) (13.6) 1.0 (1.5) (0.5) 
Depreciation and amortisation of non-current assets 47.3 48.1 – – 
Provision for doubtful debts 1.5 1.0 – – 
Share based payment expense 0.4 0.7 0.4 0.7 
Sale of Spectrum rights (Note 2) – (25.1) – – 
Decrease in stock 0.6 (0.9) – – 
Decrease/(increase) in debtors (50.9) 1.6 (0.1) (96.0) 
(Decrease)/increase in trade and other payables 10.6 (2.8) (119.5) 4.9 
Effects of exchange rate on the balances of working capital (1.5) – –  
Cash absorbed by operations (31.8) (10.2) (121.1) (93.0) 
   FINANCIAL STATEMENTS 
NOTES TO THE ACCOUNTS CONTINUED 
 
Avanti Communications Group plc  
Annual Report and Accounts 2016 
71
 
31. Post balance sheet events 
As described in the going concern accounting policy in Note 2, on 7 July 2016, the Company announced that it was probable that 
additional funding would be required in order to ensure that the Group had sufficient liquidity to complete and launch HYLAS 4 in the 2017 
financial year. Avanti had based its funding plan on cash to be generated from the business which had grown more slowly than expected. 
On 11 July 2016, the Company announced the undertaking of a strategic review (the “Strategic Review”) to consider all financial and 
strategic options. As part of this exercise, Avanti conducted an in-depth review of its business plan, financial position and strategic 
options, including various routes to strengthen the Company's balance sheet. 
On 17 October 2016, the Company announced the result of a successful consent solicitation process ("September Consent Solicitation") 
as the first step in its two-phase funding strategy. The Company received consents from holders of 89.5% of its Senior Secured Notes to 
permit paying the interest due on 1 October 2016 in respect of consenting holders’ Senior Secured Notes in the form of additional Senior 
Secured Notes on the same terms as the existing Senior Secured Notes in lieu of cash. The cash coupon of $3.4m was paid to the 10.5% 
of holders from whom consent was not received in October 2016. In order to further support the strategic review process, the Company 
also entered into binding agreements with certain suppliers to defer approximately $39m of capital expenditure payments relating to 
HYLAS 4 to the third quarter of the fiscal year ending 30 June 2017. 
Following completion of the September Consent Solicitation, the Company continued negotiations with the manufacturer of HYLAS 4, 
Orbital Sciences ("Orbital"), and its largest holders of Senior Secured Notes regarding phase 2 of the funding strategy. The second phase 
was a restructuring of the Company’s outstanding indebtedness in order to seek a long-term solution to its working capital needs and to 
ensure that the Company could continue to operate as a going concern in the future.  
The restructuring drew towards its conclusion on 20 December 2016 when a Restructuring Agreement was signed by the Company with 
a group of its largest holders of Senior Secured Notes ("Initial Consenting Creditors"). The Company and the Initial Consenting Creditors, 
representing approximately 73% of the aggregate principal amount of the existing Senior Secured Notes ("Existing Notes"), entered into 
the Restructuring Agreement on 20 December 2016 pursuant to which the Initial Consenting Creditors contractually agreed to approve the 
Existing Notes restructuring by delivering Consents in connection with the Solicitation, tendering their Existing Notes in the Exchange Offer 
and voting in favour of the Scheme.  
The Company and the Initial Consenting Creditors also entered into the Backstop Purchase Agreement on 20 December 2016 pursuant 
to which the Initial Consenting Creditors committed to fund up to the entirety of the New Money Offer, subject to reduction for the level 
of pro rata participation by the remaining Existing Note holders that elect to participate in the New Money Offer. 
The major components of the restructuring, which will provide the Group with substantial additional liquidity, are: 
1. New Money Notes - Issue of up to $132.5m of Senior Secured Notes in three tranches by the Company to provide additional funds for 
the Group. $82.5m will be issued on closing of the restructuring with the ability to issue a further $15m on 30 June 2017 and $35m on 
30 November 2017.  
2. Amended Existing Notes - Amendments to the Existing notes which include capitalising the April 2017 coupon and the ability to 
capitalise the October 2017 coupon for the $685m of Amended Existing Notes based on certain cash forecast targets. In addition the 
amendments allow for the ability to capitalise the April 2018 coupon for approximately $485m of the Amended Existing Notes based 
on certain cash forecast targets and extended maturity dates which range between October 2021 and October 2022.