Send, spend and manage your money - ChimpChange · and manage their money more effectively. We...
Transcript of Send, spend and manage your money - ChimpChange · and manage their money more effectively. We...
CHIMPCHANGELIMITED
ANNUALREPORTFORTHEYEARENDED30JUNE2016
Send, spend and manage your money
CORPORATEDIRECTORY
DirectorsPeterClare(Non-ExecutiveChairman)AshleyShilkin(ManagingDirector)IanLeijer(ExecutiveDirectorandCFO)BenjaminHarrison(Non-ExecutiveDirector)
CompanySecretaryDuncanCornish
RegisteredOfficeCorporateAdministrationServicesPtyLtdLevel10,110MaryStreetBRISBANEQLD4000Telephone:+61732126255Fax:+61732126250Email:[email protected]:www.chimpchange.me
PostalAddressChimpchangeLimitedGPOBox2676BRISBANEQLD4001
AustralianCompanyNumber150762351
AustralianBusinessNumber34150762351
AuditorsPitcherPartnersLevel30345QueenStreetBRISBANEQLD4000Telephone:+61732228444Fax:+61732217779Website:www.pitcher.com.au
ShareRegistryLinkMarketServicesLimitedTelephone:1300554474Website:www.linkmarketservices.com.au
Websitewww.chimpchange.me
ASXCodeCCA
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TABLEOFCONTENTS
CHAIRMAN’SLETTER 4
MANAGINGDIRECTOR’SREPORT 5
DIRECTORS'REPORT 6
AUDITOR’SINDEPENDENCEDECLARATION 21
CORPORATEGOVERNANCESTATEMENT 22
FINANCIALREPORT 29
NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS 35
DIRECTORSDECLARTIONS 51
INDEPENDENTAUDITORSREPORT 52
ASXADDITIONALDISCLOSURE 54
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CHAIRMAN’SLETTERDearFellowShareholder,
Itgivesmegreatpleasuretopresentthe2016AnnualReportforChimpchangeLimited,ourfirstsincelistingonASX,amilestoneweachievedon30June2016.
ChimpChangeoffersconsumerssecure,low-cost,feature-richmobilemoneybankaccounts.WeaimtoprovideChimpChangeuserswithadigitalbankingexperiencethatisaffordable,personalised,funandfrictionless.
Severalyearsago,theCompanyidentifiedanopportunitytoservicetheMillennialdemographicintheUnitedStates–peopleagedbetween18to35years–whichisafragmentedandcost-riddenbankingenvironment.ThishaspresentedChimpChangewithareadilyaddressableandrapidlyexpandingmarketofcustomerswhoaredemandinganeasier,cheaperandmorereliablewayofmanagingtheirpersonalfinancialaffairs.
AstheCompanyattractsmoreandmorecustomerstoitsplatform,ChimpChangeisplayingitsparttochangethelandscapeofthebankingsector.
ThepastyearhasbeenatransformationaloneforourCompany.Afterfouryearsofdevelopment,welaunchedourdigitalbankingplatformintheUSduringthefirsthalfoftheyear,facilitatedbytwosuccessfulroundsofprivatefundingthatraisedA$8million.
Thesecondhalfoftheyearwasvitaltoourdevelopmentaswesetaboutexecutingonanumberofkeystrategies:
- RaisingA$15million(beforecosts)andlistingontheASX;- Transitioningtoanewexperiencedandinnovativesponsorbank;and- Re-negotiatingtransactioncoststosignificantlyreduceourcostofgoodssoldanddeliverapositivegross
margin.
ItwasverypleasingthatwewereabletoachieveallofthesegoalsandthencommenceatargetedmarketingcampaignaimedatattractingnewcustomersinJune.IampleasedtoseeChimpChangehaspostre-launchwithournewsponsorbankcontinueditsstrongcustomeracquisitiongrowthintoFY2017.
Overthecomingyear,weexpecttofurtherbolstertheChimpChangeplatformanddriveanewlevelofengagementasweintroduceseveralnewfrequently-requestedfeatures.TheCompany’soutlookforplatformdevelopmentandcustomeracquisitionremainsverypositive.
ChimpChangehasbuiltaboardandmanagementteamwithstrongexperienceinbanking,technologyandrisk–ourfounderandManagingDirectorAshShilkinhelpedgrowCO2AustraliaLimitedfromaA$30millioncompanytoaA$300milliononeduringhistimeasChiefFinancialOfficer.IbringtotheCompanymorethan20yearsofexperienceinthebankingindustry,mostrecentlyasCEOofWestpacNewZealandLimited.
IwouldliketothankmyfellowdirectorsandtheChimpChangemanagementteamfortheircontributions,aswellasourstafffortheireffortsoverthepastyear,particularlythoseinvolvedwiththeCompany’slistingonASX.
IwouldalsoliketothankourShareholdersforyoursupportandbeliefinourabilitytoachieveourgoalsandlookforwardtokeepingyouupdatedonourprogressoverthenext12months.
PeterClare
Non-ExecutiveChairman
ChimpchangeLimited
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MANAGINGDIRECTOR’SREPORTFinancialyear2016wasatransformationalyearforChimpChange.
IfoundedChimpChangetorespondtotherapidlychanginglandscapeofbanking,drivenbytechnologicaladvancement,smartphoneadoptionandevolvingconsumerexpectationsanddemographics.
TheCompany’svisionistochangethewaypeoplebankbyofferinganinnovative,feature-rich,digitalbankingalternativethatincludesboththeexistingfunctionalityexpectedoftraditionalbankswiththeadditionofnewfeaturesthataddvaluetothebankingexperience.
ChimpChangeisleadingwithtwocorevaluepropositions.ThefirstisprovidingfreeorlowcosttransactionalbankaccountstothetensofmillionsofAmericanswhoarecurrentlypayingmonthlyfeesandoverdraftfeesforabasicbankaccount.Thesecondvaluepropositionistobuildfinancialtechnologytoolstohelpcustomersunderstandtheirmoneyandmanagetheirmoneymoreeffectively.WecurrentlyhavethefirstvaluepropositioninplaceandwillhavemadesignificantprogressonthesecondvaluepropositionbytheendofH1FY2017.
TheCompanybelievesthatcurrenttrendsintheglobalbankingsectorpointtoanincreasingadoptionofalternativebankingsolutions.Nowwith100,000customersign-upsChimpChangeisacrediblealternativetotraditionalbanksandtheirlegacypractices.
Wehaveoverthelast12monthsimplementedanumberofimprovementsfromastrategic,operationalandtechnologyplatformstandpoint.AlltheseinitiativesplacetheCompanyinastrongpositionasitcontinuesitscustomergrowthinFY2017andbeyond.
OneofourstrategicinitiativescompletedduringthefinancialyearwasourIPOontheASX.TheIPOprovideduswithcapacitytocontinueexecutingongrowthobjectives,underpinnedbyA$15millionofnewcapitalandthesupportofnew,highqualityinvestorsaddedtotheregister.
TheIPOprovidedaclearchanneltoattractnewinvestorsasthebusinessexpandsonthebackofnewfeaturereleases,executionofmarketingprogramsandtransactionspendingfromagrowingcustomerbase.WehavealreadyhadthefortuneofbeingabletoupdateshareholdersmorerecentlyonoursolidprogresssofarinFY2017.
WhileequitymarketsforAustraliatechnologycompanieshaverecentlybeensoft,theseismicshiftinconsumerandinvestordemandfordigitalbankingproductshasnotchangedcourse.Anumberofourinternationalcomparableshavebeenthesubjectoflargecorporatetransactions.InJune2016,Europeanbaseddigitalbank,Number26,raisedUS$40millionprivately.Number26hasgrownto200,000customersafterlaunchingin2015.Inaddition,twoEuropeandigitalbanks(HolviandFidor)wereacquiredbylargetraditionalbanks.Fidor,themorerecent,wasonlyacquiredinAugustofthisyearbyFrance’ssecondlargestbankBPCE.Icontinuetobelievethatthedigitalbankingsectorwillexperiencecorporateactivityastraditionalbankslooktoacquiredigitalplatformsandinvestorslookatwaystogainexposuretothisexcitingspace.
Inclosing,IbelievetheCompanyhasneverbeeninabetterposition.Wearewellfunded,haveagreatteaminplace,grossmarginpositiveandarepoisedtoaddsignificantshareholdervalue.Ilookforwardtoprovidingyouallwithupdatesoverthenext12months.
AshleyShilkin
FounderandManagingDirector
ChimpchangeLimited
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DIRECTORS'REPORTTheDirectorspresenttheirreporttogetherwiththefinancialstatementsofChimpchangeLimited(ChimpChangeorCompany)consistingofChimpchangeLimitedandtheentitiesitcontrolledattheendoforduringtheyearended30Jun2016(Group).
DirectorsThefollowingpersonswereDirectorsofChimpchangeLimitedduringthewholeofthefinancialyearanduptothedateofthisreportunlessotherwisestated:PeterClareAshleyShilkinIanLeijerBenHarrison
PrincipalactivitiesTheGroup'sprincipalcontinuingactivityduringtheyearwasprovidingmobilebankingservicesthroughtheChimpChangemobileapplication.
BackgroundonCompanyandReviewofOperationsOverviewChimpChangecurrentlyoperatesintheUSbankingandfinancialservicesmarket.UnliketheAustralianbankinglandscape,whichcentresaroundasmallnumberoffinancialinstitutionswithreadilyadoptedonlinepaymentmethods,theUSmarketishighlyfragmented,expensiveandremainsheavilyreliantoncheque-basedtransactions.
Electronicpaymentmethods,facilitatedbysmartphonesandotherwirelesstechnologies,aregainingglobalmarketacceptance.Thisislargelydrivenbyadvancementsintechnologycoupledwithchangesindemographicandsocialbehaviours.
DigitaldisruptioninthebankingandfinancialservicesmarketwithintheUSandacrosstheworldwillevolveasdigitalbankingproductslikeChimpChange’splatformbecomecommonplaceandsupersedetraditionalbankingproductsandserviceofferingsfromincumbentretailinstitutions.
WhiletheCompany’scurrentgeographicfootprintonlyencompassestheUSmarket,theChimpChangeplatformhaspotentialapplicationtootherglobaljurisdictions,particularlythosemarketswhicharesupportiveofdigitaldisruption.
BankingisPrimeforDisruptionTheadoptionofdigital–includingmobile,socialmedia,webandwearables–isincreasing.Inthelastfewyearstechnologyhasrapidlyevolved,withbigdata,cloudcomputing,smartphonesandhighbandwidthallnowcommonplace.Asaconsequenceoftheserapiddevelopments,theretailbankingandfinancialserviceslandscapeisgoingthroughatransformationintheformofadigitaldisruptionwherebylow-costdigitalentrantsaretakingmarketsharebyrespondingtocustomerneedsandbankingbehaviours.
Technologicaladvanceshaveenabledbankingtobelargelyconductedonline,andcustomers’expectationsareevolvingintandem.Customersgenerallywanttotransactattheirconvenience,withinformationandadviceattheirfingertips.
Thistrendisposingasignificantchallengetolaggingbankingpractices,asdisruptivenewtechnologycompaniesarealteringthetraditionalvaluechaintoprovidecustomer-centricinnovationandrevampedalternativeproductofferings.
CustomersareTransitioningtoDigitalBankingAstechnologyenableseveryaspectofbankingtogomobile,andascashasapaymentmechanismdeclines,highfixed-costtraditionalbankingmodelsarecomingunderincreasingpressurefromindependentonlineofferings.Banking’slong-standingbarrierstoentry(includingpersonalrelationshipswithcustomers,locationscaleeconomiesandareputationfor
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security)areincreasinglylosingtheirvalue.Increasingsmartphoneadoptionmeanscompetitivereachisnolongerdeterminedsolelyby‘brickandmortar’branchnetworks.
Onerecentsurveyfoundthatmorethanoneinfourcustomerswouldlikelyconsiderabranchlessdigitalbankiftheyweretoswitchfromtheircurrentbank(seefigbelow).Thisisparticularlytrueamongyoungercustomers,whoarelessinterestedinconvenientbranchlocationsandmoreinterestedinaccessingdigitalservicesatthetimeandplaceoftheirchoosing.Ithasbeenestimatedthatmobile-onlyusersmakeupabout15%ofatypicalfinancialinstitution’smobilebankinguserbase.Inaddition,afurthersurveyfoundthatover70%ofMillennialssurveyedwouldlikelybankwithacompanythattheycurrentlydobusinesswithbutdonotcurrentlyofferbankingservices,withexamplesbeingtrusteddigitalbrands.
Thereisadditionalevidencethatdigitalusage(viasmartmobileapps,tabletappsoronlinetools)foraffluentcustomersintheUScorrelatescloselywithcustomerloyalty.
Digitalandself-servicechannels–includingmobilebanking–haveaccordinglyriseninpopularityforconsumerslookingtoconductroutinefinancialtransactionsontheirsmartphone,suchascheckingtheiraccountbalances,payingbillsorfindingaconvenientlocationtowithdrawcash.Forthesetransactions,speed,convenienceandeaseofusearetheprimaryconsumerconsiderations.
Followingthattrend,recentyearshavebeencharacterisedbytheriseofcontactlesspayments,theconsequentdeclineincashandcheques,growthindebitcardusage,andtheemergenceofmobileanddigitalpayments(referfigbelow).
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ItisanticipatedthatthetransitionfromincumbentbanksandtraditionalpaymentmethodswillcontinueintheUSasdisruptivenewentrantsintheformofdigitalstart-ups(lessencumberedbylegacysystems)seektoredefinethebankingexperiencebyofferingseamless,moreefficient,engagingandsimplersolutions.
AddressableMarketChimpChangeprimarilytargetstheMillennialandbroaderUnderbankeddemographicintheUS.Millennialsaretypically‘tech-savvy’andnotonlyembracebutdemanddigitaldisruptionacrossallfacetsoftheirlives,includinginthebankingandfinancialservicessector.
WhileChimpChangerecognisesthatMillennialsaremostlikelytoembraceitsmobilebankingplatform,ChimpChange’ssolutionwouldsuitanycustomerwhosimilarlyembracesgreaterflexibilityandconveniencefortheirday-to-daybankingordesireslowerornotransactionandaccountmanagementfees.
TheCompanydefinesMillennialsasallindividualsagedbetween15and35(bornbetween1981and2000).MillennialsarethelargestdemographicintheUSwith92.2millionpeople,followedbytheBabyBoomers(agedbetween51and70)with77.3millionpeopleandGenerationX(agedbetween36and50)with61.3millionpeople(seefigbelow).
Source:GoldmanSachs“MillennialsComingofAge”
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OperatingandFinancialReviewTheGrouphasreportedalossfortheyearaftertaxationof$7,655,000(2015:lossof$2,166,000).Financialyear2016wasatransformationalyearfortheCompany.AftertwoyearsofdevelopmentChimpChangelauncheditsdigitalbankingplatformintheUSAduringthe1sthalfoftheperiod.Tofacilitatethelaunch,theCompanywasabletosuccessfullyraisetwoprivatefundingroundsduringthefirsthalftotaling$5.9million(A$8million).Duringthe2ndhalftheCompanyexecutedonanumberofkeystrategicinitiativestopositiontheCompanyforthefuture,theseincluded:
• Raising$11.1million(A$15million)beforecostsandlistingonASX;• Transitioningtoanewexperiencedandinnovativesponsorbank;and• Re-negotiatingtransactioncostswhichresultedinasignificantreductioninourcostofgoodssold(COGS)and
deliveredapositivegrossmargin.Oneofthekeyfocusesduringthelastfewmonthsoftheperiodwasonretainingexistingcustomersthroughtransitiontoournewsponsorbankandfollowingre-launch(inmid-June),commencingahighlytargetedmarketingcampaign.TheCompanyrecentlyreportedthatsincethere-launchinmid-Junetoplinecustomeracquisitionhadoutperformingourinitialacquisitiontargets.WearepleasedtoseecustomeracquisitiongrowthcontinueintotheearlypartofFY2017.
SignificantchangesinthestateofaffairsContributedequityincreasedby$16,800,000asaresultofcapitalraisedthroughtheyear.Detailsofthechangesincontributedequityaredisclosedinnote15tothefinancialstatements.
MatterssubsequenttotheendofthefinancialyearNomatterorcircumstancehasarisensince30June2016thathassignificantlyaffectedtheGroup'soperations,resultsorstateofaffairs,ormaydosoinfutureyears.
LikelydevelopmentsandexpectedresultsofoperationsRefertotheReviewofOperationsforfurtherdetails.
InformationondirectorsPeterClare(Non-ExecutiveChairman)
ExperienceandexpertiseMrClarehasbeeninthebankingindustrysince1995,includingmostrecentlyastheChiefExecutiveOfficerofWestpacNewZealandLimited,adivisionofWestpacBankingCorporationLimited,from2012to2014.MrClarehascompletedanMBA(MacquarieUniversity,1990)andaBCominAccounting,FinanceandSystems(UniversityofNewSouthWales,1986).HeisamemberoftheAustralianInstituteofCompanyDirectorsandtheGovernanceInstituteofAustralia,andafellowofCPAAustraliaandFinancialServicesInstituteofAustralasia(FINSIA).
OthercurrentASXdirectorshipsReffindLtd–ChairmanScottishPacificGroupLimitedRubikFinancialLimited
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FormerASXdirectorshipsinlast3yearsNoneSpecialresponsibilitiesMemberoftheAudit&RiskManagementCommittee.Interestsinsharesandoptions200,000sharesinChimpchangeLimited.750,000optionsinChimpchangeLimited.AshleyShilkin(ManagingDirector)
ExperienceandexpertiseMrShilkinisthefounderandManagingDirectorofChimpChange,basedinLosAngeles,California.At26hewastheyoungestChiefFinancialOfficerofaA$30millioncompanylistedontheASX(CO2AustraliaLimited).WhileatCO2GroupthecompanygrewtooverA$300millioninmarketcapitalisationinashortperiodoftime.WhileatCO2GrouphetookonanumberofDirectorships.OnebeingDirector/ChiefOffsettingSuperheroofYonderr.com,afreshweb-basedcarbonoffsetcompany.ThesecondwasanappointmenttotheboardofCO2NewZealand;thecompanythatfacilitatedthefirst
meaningfulinternationalexpansionofCO2Group,whichresultedinmillionsofdollarsofadditionalrevenueforthegroup.MrShilkinhasaMastersinCommercialLawandaBachelorofCommercewithdoublemajorsinInvestmentFinanceandInternationalBusinessEconomics.OthercurrentASXdirectorshipsNoneFormerASXdirectorshipsinlast3yearsNoneSpecialresponsibilitiesMemberoftheAudit&RiskManagementCommitteeInterestsinsharesandoptions11,901,965sharesinChimpchangeLimited.3,500,000optionsinChimpchangeLimited.IanLeijer(ExecutiveDirector)
ExperienceandexpertiseMrLeijerhasbeencloselyinvolvedwithChimpChangesinceitsinception.MrLeijerisaCharteredAccountantwithover25years’experienceinfinancialanalysis,corporatetransactions,businessstrategyandbusinessmanagement.HewasCFOandCompanySecretaryforover10yearsofformerASXlistedcompanyAvatarIndustriesLimitedwhichoperatedgloballyinanumberofdiverseindustriesincludingminingservices,electronicsdistribution,fabricationofbuildingproductsandprinting.MrLeijerstartedhiscareerwithPriceWaterhousespecialisingincorporatetransactionsandvaluationsbeforejoiningaboutiqueinvestmentbank.
MrLeijercurrentlyworkswithanumberofentitiesonbusinessanalysis,capitalraising(debt&equity)andgeneralmanagement.MrLeijeralsoholdsaBachelorofEconomicsfromtheUniversityofSydney,Australia.
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OthercurrentASXdirectorshipsNilFormerASXdirectorshipsinlast3yearsNilSpecialresponsibilitiesNilInterestsinsharesandoptions2,872,529sharesinChimpchangeLimited.250,000optionsinChimpchangeLimited.BenHarrison(Non-ExecutiveDirector)
ExperienceandexpertiseMrHarrisonhas10years’experienceinadvisingandinvestingincompanies.Hespent5yearsworkingforaleadingmidcapcorporateadvisoryhousewhereheexecutedcapitalmarketandM&Atransactions.Heiscurrentlyinvolvedintheprivateequityandventurecapitalsector.MrHarrisonhasbeeninvolvedatboardlevelinanumberofinvesteecompaniesonbehalfofinvestors.HisexperienceextendsbeyondfinancingandM&Ainto;investment,strategy,financialmanagement,corporaterestructuring,corporategovernanceandgeneralmanagement.
MrHarrisonholdsaBachelorofScienceandMastersofAppliedFinanceandInvestment.OthercurrentASXdirectorshipsNoneFormerASXdirectorshipsinlast3yearsDarkHorseResourcesLtd(formerlyNavahoGoldLtd)(ceasedtobedirector24February2014)AusTinMiningLtd(ceasedtobedirector24February2014)LanewayResourcesLtd(ceasedtobedirector2October2014)SpecialresponsibilitiesChairmanoftheAudit&RiskManagementCommittee.Interestsinsharesandoptions43,668sharesinChimpchangeLimited.950,000optionsinChimpchangeLimited.CompanysecretaryTheCompanysecretaryisMrDuncanCornish.MrCornishhashadmanyyears’commercialandfinanceexperience,providingcompanysecretarialservicestopubliclylistedcompanies.
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MeetingsofdirectorsThenumbersofmeetingsoftheCompany'sboardofDirectorsandofeachboardcommitteeheldduringtheyearended30Jun2016,andthenumbersofmeetingsattendedbyeachDirectorwere: Fullmeetingsofdirectors Audit&RiskCommittee
meetings
A B A B
PeterClare 10 11 1 1
AshelyShilkin 11 11 1 1
IanLeijer1 10 11 1 1
BenHarrison 11 11 1 1
1MrLeijerattendedtheAudit&RiskCommitteemeetingbyinvitationA=NumberofmeetingsattendedB=NumberofmeetingsheldduringthetimetheDirectorheldofficeorwasamemberofthecommitteeduringtheyear
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Remunerationreport(audited)TheDirectorsarepleasedtopresentyourCompany's2016remunerationreportwhichsetsoutremunerationinformationforChimpchangeLimited'snon-executiveDirectors,executiveDirectorsandotherkeymanagementpersonnel.Non-executivedirectorremunerationpolicyTheshareholdersofChimpchangeLimitedon11August2015approved,forthepurposesoftheASXListingRulesandtheGroup’sConstitution,anincreaseinthemaximumaggregateannualnon-executivedirectors’feesto$500,000,withsuchfeestobeallocatedtothenon-executivedirectorsastheboardofdirectorsmaydetermine.TheRemunerationCommitteedeterminestheremunerationofallnon-executivedirectors,noneofwhomhaveservicecontractswiththecompany.ExecutiveremunerationpolicyandframeworkTheobjectiveoftheGroup’sexecutiverewardframeworkistoensurerewardforperformanceiscompetitiveandappropriatefortheresultsdelivered.Theframeworkalignsexecutiverewardwithachievementofstrategicobjectivesandthecreationofvalueforshareholders,andconformswithmarketpracticefordeliveryofreward.Theboardensuresthatexecutiverewardsatisfiesthefollowingkeycriteriaforgoodrewardgovernancepractices:
• competitiveandreasonable,enablingthecompanytoattractandretainkeytalent;• alignedtothecompany’sstrategicandbusinessobjectivesandthecreationofshareholdervalue;• performancelinkage/alignmentofexecutivecompensation;• transparent;• acceptabletoshareholders;• alignmenttoshareholders'interests;• attractsandretainshighcalibreexecutives;• alignmenttoprogramparticipants'interests;• rewardscapabilityandexperience;and• providesrecognitionforcontribution.
Theexecutiveremunerationandrewardframeworkhastwocomponents:
§ basepayandbenefits,includingsuperannuation;and§ longtermincentives.
(a) ElementsofremunerationBasepayandbenefitsExecutivesareofferedacompetitivebasepaythatcomprisesthefixedcomponentofpayandrewards.Basepayforexecutivesisreviewedannuallytoensuretheexecutive'spayiscompetitivewiththemarket.Anexecutive'spayisalsoreviewedonpromotion.Therearenoguaranteedbasepayincreasesincludedinanyexecutives'contracts.(b) DetailsofremunerationDetailsoftheremunerationofthedirectors,thekeymanagementpersonneloftheGroup(asdefinedinAASB124RelatedPartyDisclosures)ofChimpchangeLimitedandtheGrouparesetoutinthefollowingtables.ThekeymanagementpersonnelofChimpchangeLimitedincludesthedirectorsaslistedbelow:
• PeterClare(Chairman)• AshelyShilkin(ManagingDirector)• IanLeijer(ExecutiveDirector&CFO)• BenHarrison(Non-ExecutiveDirector)
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InadditiontothedirectorsthefollowingexecutivesthatreportdirectlytotheBoardarekeymanagementpersonnel:
• ClaytonFossett(ChiefOperatingOfficer)• NickRoberts(ChiefMarketingOfficer)
ThefollowingtableshowsdetailsoftheremunerationexpenserecognisedfortheGroup'sexecutivekeymanagementpersonnelforthecurrentandpreviousfinancialyearmeasuredinaccordancewiththerequirementsoftheaccountingstandards.2016Name ShortTermBenefits Post
EmploymentBenefits
Longterm
benefit
Sharebased
payments
Total
Cashsalaryandfees
Cash Bonus
NonMonetaryBenefits
US$ US$ US$ US$ US$ US$ US$
Non-executivedirectors PeterClare 40,144 - - - - 115,055 155,199BenHarrison 86,324 - - - - 63,919 150,243Subtotal 126,468 - - - - 178,974 305,442 Executivedirectors AshleyShilkin 180,769 596,000 10,000 5,000 - 455,418 1,247,187IanLeijer 35,114 89,460 - - 100,978 225,552Subtotal 215,883 685,460 10,000 5,000 - 556,396 1,472,739 KeyManagement ClaytonFossett 154,616 - - - - 55,037 209,653NickRoberts 150,994 - - - - 15,870 166,864Subtotal 305,610 - - - - 70,907 376,517 Total 647,961 685,460 10,000 5,000 - 806,277 2,154,698
MrShilkinreceivedabonusof$596,000(A$820,000)inJanuary2016asacashpaymentonthebasisoftheCompanyachieving7,000Customerregistrations.Thebonusisfundedbytheexerciseof1,175,000optionshavingavalueof$292,000(A$411,250)andbythefuturerepaymentoftheloanmadetoMrShilkinorhisassociatesundertheLoanFundedSharePlan(LFSP).UnimainPtyLimited,anentityassociatedwithMrLeijer,receivedasuccessfeeof$89,460inJanuary2016ascashpaymentonthebasisoftheCompanyachieving7,000Customerregistrations.Thesuccessfeeisfundedbytheexerciseof180,000optionshaveavalueof$44,730(A$63,000)andbythefuturerepaymentofaloanmadetoMrLeijerorhisassociatesundertheLoanFundedSharePlan.Theamountforsharebasedpaymentsrepresentstheexpenserecognisedinthecurrentfinancialyearforoptionsgrantedasremunerationinthecurrentandprioryears.Setoutbelowinsectiond(i)arethedetailsofoptionsissuedasremunerationinthecurrentfinancialyear.
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2015Name ShortTermBenefits Post
EmploymentBenefits
Longterm
benefit
Sharebased
payments
Total
Cashsalaryandfees
Cash Bonus
NonMonetaryBenefits
US$ US$ US$ US$ US$ US$ US$
Non-executivedirectors PeterClare 6,315 - - - - 32,704 39,019BenHarrison 54,259 - - - - 92,040 146,299Subtotal 60,574 - - - - 124,744 185,318 Executivedirectors AshleyShilkin 156,988 - - - - 687,454 844,442IanLeijer 39,905 - - - - 147,028 186,933Subtotal 196,893 - - - - 834,482 1,013,375 KeyManagement ClaytonFossett 81,238 - - - - 18,949 100,187NickRoberts - - - - - - Subtotal 81,238 - - - - 18,949 100,187 Total 338,705 - - - - 978,175 1,316,880
(c) ServiceagreementsPeterClare(Non-ExecutiveChairman)
• ServicesprovidedthroughSharedRunwayPtyLtd(SharedRunway);• Termofagreement–nofixedterm;• SharedRunwayreceivesanannualfeeofA$70,000forservicesprovidedbyMrClarepayablemonthlyonpro
ratabasis;and• SharedRunwayisentitledtoreimbursementofspecifiedexpensesincurredinprovidingservices.
AshelyShilkin(ManagingDirector)
• Termofagreement–nofixedterm;• Basesalaryis$180,000perannumreviewedannually;• Annual$10,000superannuationand$10,000carallowance;• Entitledtoreimbursementofspecifiedexpensesincurredinhisemployment;• CanparticipateundertheCompanyESOP;• Employmentcanbeterminatedgivingsixmonth’snoticeinwriting;and• MrShilkinisemployedunderthelawsoftheStateofCalifornia,US.
IanLeijer(ExecutiveDirectorandCFO)
• ServicesprovidedthroughUnimainPtyLtd(Unimain);• Termofagreement–6monthsunlessterminatedgivenonemonth’snotice,automaticallyextendedfor
additionalperiodsofonemontheachuntilterminatedoranewagreementisenteredinto.UnimainreceivesaconsultingfeeofA$2,000perdayforservicesprovidedbyMrLeijer;and
• Unimainisentitledtoreimbursementofspecifiedexpensesincurredinprovidingservices.BenHarrison(Non-ExecutiveDirector)
• ServicedprovidedthroughRiverfireCapitalVenturesPtyLtd(Riverfire);• Termofagreement–12monthsunlessterminatedgivenonemonth’snotice,automaticallyextendedfor
additionalperiodsofonemontheachuntilterminatedoranewagreementisenteredinto.;• RiverfirereceivesafeeofA$1,500perdayforservicesprovidedbyMrHarrison;and• Riverfireisentitledtoreimbursementofspecifiedexpensesincurredinprovidingservices.
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ClaytonFossett(COO)
• Termofagreement–nofixedterm;• Basesalaryisreviewedannually;• Entitledtoreimbursementofspecifiedexpensesincurredinhisemployment;• CanparticipateundertheCompanyESOP;• Employmentcanbeterminatedgivingonemonth’snoticeinwriting;and• MrFossettisemployedunderthelawsoftheStateofCalifornia,US.
NickRoberts(CMO)
• Termofagreement–nofixedterm;• Basesalaryisreviewedannually;• Entitledtoreimbursementofspecifiedexpensesincurredinhisemployment;• CanparticipateundertheCompanyESOP;• Employmentcanbeterminatedgivingtwomonth’snoticeinwriting;• IfMrRobertsemploymentisterminatedwithinthefirst12monthsofemploymentwithoutcause,thecompany
mustgiveMrRobertsthreemonths’notice(orpaymentinlieu)andallow50,000optionstovest;and• MrRobertsisemployedunderthelawsoftheStateofCalifornia,US.
(d) Equityinstrumentdisclosuresrelatingtokeymanagementpersonnel(i) OptionsissuedtoKeyManagementPersonnelasremunerationThefollowingoptionswereissuedaslongtermincentivestoKeyManagementPersonnelasremunerationduringthefinancialperiod.Name Number Strike
PriceExpiryDate4
ValueatGrantDate
$
TotalVested
Vested%
TotalNumberExercised
VestingConditions
Directors
PeterClare 450,000 A$1.00 31Dec18 115,055 450,000 100% - Nil
AshleyShilkin 1,000,000 A$1.00 31Dec18 255,677 1,000,000 100% - Nil
AshleyShilkin 1,000,000 A$1.50 18Apr21 299,234 - 0% - Note1
AshleyShilkin 1,500,000 A$2.25 18Apr21 362,388 - 0% - Note2
IanLeijer 250,000 A$1.00 31Dec18 63,919 250,000 100% - Nil
BenHarrison 250,000 A$1.00 31Dec18 63,919 250,000 100% - Nil
Keymanagement
ClaytonFossett 100,000 A$1.00 18Apr19 27,068 100,000 100% - Nil
NickRoberts 600,000 A$1.00 18Apr19 162,408 - 0% - Note3
Note1 TheoptionsvestwhenthevolumeweightedsharepriceofChimpChangeover10daysexceedsA$2.00Note2 TheoptionsvestwhenthevolumeweightedsharepriceofChimpChangeover10daysexceedsA$3.00Note3 100,000optionswillvestoneachanniversaryofthecommencementofhisemploymentwithChimpChangefor3years–total
300,000options.Afurther300,000optionswillvestsubjecttomeetingvarioushurdleswithrespecttothenumberofdepositcustomersreached.
Note4 OptionsmayexpireearlierthantheExpirydateifapersonceasestobeadirectororanemployeeoftheCompany.
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(ii) OptionHoldingsThenumbersofoptionsintheCompanyheldduringthefinancialyearbyeachDirectorofChimpchangeLimitedandotherkeymanagementpersonneloftheGroup,includingtheirpersonallyrelatedparties,aresetoutbelow.2016Name Balanceat
thestartoftheperiod
Grantedduringthe
year
Exercisedduringthe
year
Balance atthe end oftheperiod
TotalVestedat30Jun16
Exercisableat30June16
Unexercis-ableat
30June2016 Directors
PeterClare 300,000 450,000 - 750,000 750,000 750,000 -
AshleyShilkin 6,183,303 3,500,000 6,183,303 3,500,000 1,000,000 1,000,000 2,500,000
IanLeijer 1,322,440 250,000 1,322,440 250,000 250,000 250,000 -
BenHarrison 700,000 250,000 - 950,000 950,000 950,000 -
Keymanagement
ClaytonFossett 300,000 100,000 - 400,000 200,000 200,000 200,000
NickRoberts - 600,000 - 600,000 - - 600,000
2015Name Balanceat
thestartoftheperiod
Grantedduringthe
year
Exercisedduringthe
year
Balance atthe end oftheperiod
TotalVestedat30Jun15
Exercisableat30June15
Unexercis-ableat
30June2015 Directors
PeterClare - 300,000 - 300,000 300,000 300,000 -
AshleyShilkin - 6,183,303 - 6,183,303 6,183,303 6,183,303 -
IanLeijer - 1,322,440 - 1,322,440 1,322,440 1,322,440 -
BenHarrison - 700,000 - 700,000 700,000 700,000 -
Keymanagement
ClaytonFossett - 300,000 - 300,000 50,000 50,000 250,000
NooptionholderhasanyrightundertheoptionstoparticipateinnewissuesofsecuritiesintheCompanymadebytheCompanytoitsshareholdersgenerally.IntheeventofareconstructionofthecapitaloftheCompanyoranissueofBonussharestheoptionstrikepriceand/orthenumberofoptionswillbeadjustedsuchthatnobenefitisgainedorlostbyoptionholdersasaresultofthatreconstructionorbonusshareissue.
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(iii) ShareholdingsThenumbersofsharesintheCompanyheldduringthefinancialyearbyeachDirectorofChimpchangeLimitedandotherkeymanagementpersonneloftheGroup,includingtheirpersonallyrelatedparties,aresetoutbelow.Therewerenosharesgrantedduringthereportingperiodascompensation.Yearto30June2016
Balanceatthestartoftheperiod
Receivedduringtheyearonexerciseof
options
Otherchangesduringtheperiod
Balanceattheendoftheperiod
DirectorsofChimpchangeLimited
PeterClare 100,000 - 100,000 200,000
AshleyShilkin 5,718,662 6,183,303 11,901,965
IanLeijer 1,550,089 1,322,440 - 2,872,529
BenHarrison 43,668 - - 43,668
OtherkeymanagementpersonneloftheGroup
ClaytonFossett - - - -
NickRoberts - - - -
Duringthefinancialyear6,183,303optionswithanexercisepriceofA$0.35eachwereexercisedbyMrShilkinandhisassociates.TheCompanyofferedaloantoMrShilkinundertheLFSPofA$1,752,906tofacilitatetheissueof5,008,303LoanFundedSharestoMrShilkinorhisnominee.Thisofferwasacceptedand5,008,303optionsheldbyMrShilkinwereexercisedandthatnumberofLoanFundedShareswereissuedtoanassociatedentityofMrShilkin.1,175,000optionswereexercisedandsettledwithcash.Duringthefinancialyear1,322,440optionswithanexercisepriceofA$0.35eachwereexercisedbyMrLeijerandhisassociates.TheCompanyofferedaloantoMrLeijerundertheLFSPofA$399,854tofacilitatetheissueof1,142,440LoanFundedSharestoMrLeijerorhisnominee.Thisofferwasacceptedand1,142,440optionsheldbyanassociateofMrLeijerwereexercisedandthatnumberofLoanFundedShareswereissuedtoanassociatedentityofMrLeijer.180,000optionswereexercisedandsettledwithcash.Yearto30June2015
Balanceatthestartoftheperiod
Receivedduringtheyearon
exerciseofoptions
Otherchangesduringtheperiod
Balanceattheendoftheperiod
DirectorsofChimpchangeLimited
PeterClare - - 100,000 100,000
AshleyShilkin 5,718,662 - - 5,718,662
IanLeijer 1,450,089 - 100,000 1,550,089
BenHarrison - - 43,668 43,668
OtherkeymanagementpersonneloftheGroup
ClaytonFossett - - - -
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(e) Loanstokeymanagementpersonnel
TheCompanyhasadoptedtheChimpChangeExecutiveDirectorLoanFundedSharePlan(LFSP)whichwasapprovedbyShareholdersattheAprilEGM.DuringthefinancialyeartheCompanyofferedloansundertheLFSPtoMrShilkinandMrLeijerofA$1,752,906andA$399,854respectively.Theseofferswereacceptedtheproceedsofwhichwereusedtoexercise5,008,303and1,142,440optionsrespectively.Theseloansremainoutstandingatyearend.Thetermoftheloansis7yearsandinterestontheseloansispayableattherateforeachfinancialyearasdeterminedunderDivision7AoftheIncomeTaxAssessmentAct1936.TheloansarelimitedrecourseandtheCompanyhasalienoverthesharesissuedundertheLSFPwhilsttheloanremainsunpaid.TheLoanFundedShareswillbeforfeitediftheLoanisnotrepaidwhendue.
EndofRemunerationReportSharesunderoption
GrantDate Expiry StrikePrice VestingConditions Number
1Dec2014 1Dec2017 A$0.49 No 1,487,136
31Dec2014 31Dec2019 A$0.40 No 1,500,000
1Apr2015 1Apr2018 A$0.49 No 50,000
1Apr2015 20Oct2018 A$0.49 Yes 50,000
1Apr2015 20Oct2019 A$0.49 Yes 100,000
1Apr2015 20Oct2020 A$0.49 Yes 100,000
18Apr2016 31Dec2018 A$1.00 No 2,100,000
18Apr2016 18Apr2021 A$1.50 No 1,000,000
18Apr2016 18Apr2021 A$2.35 No 1,500,000
18Apr2016 18Apr2019 A$1.00 Yes 1,870,000
18Apr2016 18Apr2019 A$1.00 Yes 1,000,000
20Apr2016 20Apr2019 A$1.00 No 1,500,000
4May2016 30Jun2017 A$0.52 No 510,595
TOTAL 12,767,731
IndemnityandInsuranceofofficersInsuranceofofficersDuringthefinancialyear,theGrouppaidapremiuminrespectofacontractinsuringthedirectorsofthecompany(asnamedabove),thecompanysecretary,andallexecutiveofficersofthecompanyandofanyrelatedbodycorporateagainstaliabilityincurredassuchadirector,secretaryorexecutiveofficertotheextentpermittedbytheCorporationsAct2001.Thecontractofinsuranceprohibitsdisclosureofthenatureoftheliabilityandtheamountofthepremium.TheGrouphasnototherwise,duringorsincethefinancialyear,excepttotheextentpermittedbylaw,indemnifiedoragreedtoindemnifyanofficerorauditorofthecompanyorofanyrelatedbodycorporateagainstaliabilityincurredassuchanofficerorauditor.
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Non-auditservicesTheCompanymaydecidetoemploytheauditoronassignmentsadditionaltotheirstatutoryauditdutieswheretheauditor'sexpertiseandexperiencewiththeCompanyand/ortheGroupareimportant.Detailsofamountspaidorpayabletotheauditorfornon-auditservicesprovidedduringtheyearareoutlinedatnote27tothefinancialstatements.BasedonadviceprovidedbytheAuditandRiskManagementCommittee,theDirectorshaveformedtheviewthattheprovisionofnon-auditservicesiscompatiblewiththegeneralstandardofindependenceforauditors,andthatthenatureofnon-auditservicesmeansthatauditorindependencewasnotcompromised.RoundingThecompanyisofakindreferredtoinASICCorporations(RoundinginFinancial/Directors’Reports)Instrument2016/191,relatedtothe'roundingoff'ofamountsinthefinancialstatements.AmountsinthefinancialstatementshavebeenroundedoffinaccordancewiththatLegislativeInstrumenttothenearestthousanddollars,orincertaincases,thenearestdollar.Dividends-ChimpchangeLimitedTheDirectorsofChimpchangeLimiteddonotrecommendthepaymentofadividendfortheyearending30Jun2016(2015:Nil).Auditor'sindependencedeclarationAcopyoftheauditor'sindependencedeclarationasrequiredundersection307CoftheCorporationsAct2001issetoutonpage21.
AuditorPitcherPartnerscontinuesinofficeinaccordancewithsection327oftheCorporationsAct2001.ThisreportismadeinaccordancewitharesolutionofDirectors,pursuanttosection298(2)oftheCorporationsAct2001.30September2016
AshleyShilkin
FounderandManagingDirector
ChimpchangeLimited
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AUDITOR’SINDEPENDENCEDECLARATION
The Directors
ChimpChange Ltd
C/- 110 S Fairfax Avenue
#A11-177
Los Angeles CA 90036
Auditor’s Independence Declaration
As lead auditor for the audit of ChimpChange Ltd for the year ended 30 June 2016, I
declare that, to the best of my knowledge and belief, there have been:
(i) no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the
audit.
This declaration is in respect of ChimpChange Ltd and the entities it controlled during the
period.
PITCHER PARTNERS
J. J. EVANS
Partner
Brisbane, Queensland
30 September 2016
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CORPORATEGOVERNANCESTATEMENTTheCompanyiscommittedtoimplementingandmaintaininggoodcorporategovernancepolicies.Chimpchange Limited’s CorporateGovernance Statement has been adoptedand structuredwith referencetotheAustralian Securities Exchange (ASX) Corporate Governance Council - Corporate Governance Principles andRecommendations, 3rd Edition(CGCRecommendations).The Company’s practices are largely consistent with the CGC recommendations, and the Board has madeappropriate statements reporting on the adoption of the recommendations. Where the Company’s corporategovernancepracticesdonotcorrelatewiththepracticesrecommendedbythe CGC,theCompanyisworkingtowardscompliance;howeveritdoesnotconsiderthatallpracticesare currently appropriate for the Company due to thesize and scale of its operations. The Board has offeredfulldisclosureandreasons for theadoptionofCompanypracticesandthesearesummarisedinthisCorporateGovernanceStatement.TheBoardisoftheviewthatwiththeexceptionofthedeparturesfromtheASXGuidelinesnotedbelowitotherwisecomplieswithalloftheASXGuidelines.Theinformationinthisstatementiscurrentasat30September2016andhasbeenapprovedbytheBoard.Principle1–LaysolidfoundationsformanagementandoversightFunctions,powers&responsibilitiesoftheBoardThe Board of Directors is pivotal in the relationship between shareholders and management and the role andresponsibilitiesoftheBoardunderpincorporategovernance.TheBoardiscommittedtoadministeringthepoliciesandprocedureswithopennessandintegrity,pursuingthetruespiritofcorporategovernancecommensuratewiththeGroup’sneeds.Generally,thepowersandobligationsoftheBoardaregovernedbytheCorporationsActandthegenerallaw.Withoutlimitingthosematters,theBoardexpresslyconsidersitselfresponsibleforthefollowing:• ensuringcompliancewiththeCorporationsAct,ASXListingRules(whereappropriate)andallotherrelevantlaws;
• providingleadershipanddeveloping,implementingandmonitoringstrategicoperationalandfinancialobjectivesfortheCompanyandtheoverallperformanceoftheCompany;
• appointingappropriatestaff,consultantsandexpertstoassistintheCompany'soperations;• ensuringappropriatefinancialandriskmanagementcontrolsareimplemented;• setting,monitoring and ensuring appropriate accountability and a framework for remuneration ofDirectors and
executiveofficers;• establishing and overseeing the Company’s process for making timely and balanced disclosure of all material
informationinaccordancewiththeASXListingRules;• implementingappropriatestrategiestomonitorperformanceoftheBoardinimplementingitsfunctionsandpowers;• implementingandoverseeingtheCompany’sriskmanagementframeworktoenablerisktobeidentified,assessed
andmanagedandtosettheriskappetitetheBoardexpectsManagementtooperatewithin;• appointingtheChairperson;• appointingandremovingtheChiefExecutiveOfficerandCompanySecretary;• approvingtheappointmentand,whereappropriate,removalofmembersofManagement;• contributingtoandapprovingManagement'sdevelopmentofcorporatestrategyandperformanceobjectives;• monitoring Management's implementation of strategy and performance generally, and ensuring appropriate
resourcesareavailabletoManagement;• monitoringtheeffectivenessoftheCompany’sgovernancepractices;• approving andmonitoring the progress of major capital expenditure, capital management and acquisitions and
divestitures;• approvingtheannualbudget;• liaisingwiththeCompany'sexternalauditors;• approvingandmonitoringfinancialandotherreportingsystemsoftheCompany(includingexternalaudit)andthe
integrityofthesesystems;and• appointingandoverseeingCommitteeswhereappropriatetoassistintheabovefunctionsandpowers.
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TheBoardhasdelegatedtotheManagingDirectordaytodayresponsibilityforrunningtheaffairsoftheCompanyandtoimplementthepoliciesandstrategysetbytheBoard.TheBoardalsodelegatestoseniormanagementtheresponsibilitiesfortheday-to-dayactivitiesleadingtowardachievementoftheCompany’sstrategicdirectionwithinagreedboundariesandauthoritylimitations.StructureoftheBoard
Thepolicy andprocedures for the selectionandappointmentofnewDirectors is that candidatesare consideredandselected by reference to a number of factors which include, but are not limited to, their relevant experience andachievements,compatibilitywithotherBoardmembers,andcredibilitywithintheCompany’sscopeofactivities.DirectorsareinitiallyappointedbythefullBoardsubjecttoelectionbyshareholdersatthenextAnnualGeneralMeeting.TheCompanyhasappropriateproceduresinplacetoensurethatmaterialinformationrelevanttoadecisiontoelectorre-electaDirector(includingwhetherDirectorssupporttheelectionorre-election)isdisclosedinthenoticeofmeetingprovidedtoshareholders.AteachAnnualGeneralMeetingthefollowingDirectorsautomaticallyretireandareeligibleforre-appointment:• anyDirectorwhohasbeenelectedintheofficeforaperiodinexcessofthreeconsecutiveyearsoruntilthethird
annualgeneralmeetingfollowingher/hisappointment,whicheverislonger,withoutsubmittinghim/herselfforre-election;
• anyDirectorwhowasappointedbytheDirectorsduringtheyeartofillacasualvacancyorasanadditiontotheexistingDirectors;
• one-thirdof theDirectorsor, if theirnumber isnotamultipleof three, thenthegreatestofoneor thenumbernearesttobutnotexceedingone-third.
Directorandseniorexecutiveagreements
NewDirectors receive the letterof their appointment andadeedof indemnity, insuranceandaccess.Non-executiveDirectorsarenotappointed for fixed terms.ExecutiveDirectorshavewrittenagreements,which setout thematerialtermsofengagement, includingadescriptionofpositionandduties, reporting lines, remunerationarrangementsandterminationrightsandentitlements.Eachseniorexecutiveentersintoanagreementwhichsetsoutthematerialtermsofengagement,includingadescriptionofpositionandduties, reporting lines, remunerationarrangementsand termination rightsandentitlements.Contractdetailsofseniorexecutives,whicharekeymanagementpersonnel,aresummarizedintheRemunerationReportintheAnnualReport.
CompanySecretary
The Company Secretary is accountable directly to the Board (through the Chairman) for facilitating the Company’scorporategovernanceprocessesandtheproperfunctioningoftheBoard.EachDirectorisentitledtoaccesstheadviceandservicesoftheCompanySecretary.InaccordancewiththeCompany’sConstitution,theappointmentandremovaloftheCompanySecretaryisamatterfortheBoardasawhole.AcopyoftheConstitutionisavailableontheCompanywebsiteunderCorporateGovernanceandthedetailsoftheCompanySecretaryaresetoutintheDirectors’ReportcontainedwithintheAnnualReport.
Diversity
TheBoardhasnotadoptedaformalDiversityPolicyatthisstage.TherecruitmentandselectionprocessesadoptedbytheCompanyensurethatstaffandmanagementareselectedinanon-discriminatorymannerbasedonmerit.TheCompanyrespectsandvaluesthecompetitiveadvantageofdiversity(whichincludesbutisnotlimitedtogender,age,disability,ethnicity,marital or family status religious or cultural background), and the benefit of its integration throughout theCompany in order to improve corporate performance, increase shareholder value and maximise the probability ofachievementoftheCompany’sgoals.However,theBoardofDirectorsdoesnotbelievethattheCompanyiscurrentlyofasufficientsizetojustifytheestablishmentofformalandmeasureableobjectives,havingregardtothenatureandscaleofitsactivities.
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Boardreviews
TheBoarddid not conduct a performance evaluationduring the last 12months andhas not adopted a performanceevaluationpolicy.The Company believes that the small size of the Board and the current scale of the Company’s activitiesmakes theestablishment of a formal performance evaluation procedure unnecessary. Performance evaluation is a discretionarymatter for consideration by the entire Board. In the normal course of events the Board reviews performance of themanagement,DirectorsandtheBoardasawhole.Achievementofgoalsandbusinessdevelopmentandcomplianceissuesareevaluatedregularlyonaninformalbasis.TheBoardisprovidedwiththeinformationitneedstodischargeitsresponsibilitieseffectively.AllDirectorshaveaccesstocorporategovernancepoliciesandmaterialcontractsenteredintobytheCompany.TheDirectorsalsohaveaccesstotheCompanySecretaryforallBoardandgovernance-relatedissues.
Managementreviews
TheBoarddidnotconductaperformanceevaluationofseniorexecutivesduringthelast12monthsandhasnotadoptedaperformanceevaluationpolicy.TheCompanybelievesthatthesmallsizeoftheexecutiveteamandthecurrentscaleoftheCompany’sactivitiesmakestheestablishmentofaformalperformanceevaluationprocedureunnecessary.Performanceevaluationisadiscretionarymatter for consideration by the entire Board. In the normal course of events the Board reviewsperformance of themanagement,DirectorsandtheBoardasawhole.Achievementofgoalsandbusinessdevelopmentandcomplianceissuesareevaluatedregularlyonaninformalbasis.
PRINCIPLE2–STRUCTURETHEBOARDTOADDVALUE
Nominationcommittee
TheBoardhasnotformallyestablishedaNominationsCommitteeastheDirectorsconsiderthattheCompanyisnotofasizenorareitsaffairsofsuchcomplexityastojustifytheformationofthisCommittee.TheBoardconsidersthatitisableto deal efficiently and effectively with Board composition and succession issues without establishing a separateNomination Committee and in doing so, the Boardwill be guided by the Charter which is set out in the Company’sCorporate Governance Charter and can be accessed on the Company’s website under Corporate Governance. TheCompanywillreviewthispositionannuallyanddeterminewhetheraNominationsCommitteeneedstobeestablished.
SkillsandexperienceDetailsofthecurrentDirectors,theirskills,experienceandqualificationsissetoutintheProspectus.Thesedetails,plusarecordofattendanceatmeetings,willbeincludedintheDirectors’ReportwithintheAnnualReportinfuture.AtthisstageoftheCompany’sdevelopmenttheBoardbelievesthereisanappropriatemixofskills,experienceanddiversityontheBoard.HowevertheBoardwillcontinuetomonitoritscompositionwithaviewtoensuringishasanappropriatemixofskillsanddiversity.
IndependenceandlengthofserviceTheCompany’sBoardiscomprisedofPeterClare,BenjaminHarrison,IanLeijerandAshleyShilkin.ThelengthofserviceofeachDirectorissetoutbelowandcanbefoundintheDirectors’ReportwithintheAnnualReport.Name Appointmentdate Lengthofservice
PeterClare 16April2015 19months
BenjaminHarrison 16January2015 22months
IanLeijer 16January2015 22months
AshleyShilkin 6May2011 5yearsand6months
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PresentlyundertheASXGuidelinesitisconsideredthatthereisonlyoneindependentDirector,beingMrClare.ThetablebelowdetailsthereasonswhytheremainingDirectorsarenotconsideredtobeindependent:Name Position Reasonfornon-compliance
BenjaminHarrison Non-ExecutiveDirector DirectorwasemployedinanexecutivecapacityintheleaduptotheCompany’sIPO(ie.withinthelastthreeyears)
IanLeijer FinanceDirectorandCFO Directorisemployedinanexecutivecapacity
AshleyShilkin ManagingDirector DirectorisemployedinanexecutivecapacityandisasubstantialsecurityholderoftheCompany
BasedonASXGuidelinestheBoardisoftheviewthattheChairman,MrClareisindependent.HowevertheBoardisofthe view that it does not consist of amajority of independent Directors. The Boardwill consider appointing furtherindependentDirectorsinthefuture,whentheCompanyisofsufficientsizeandhavingregardtothescaleandnatureofitsactivities.Inthemeantime,theCompanybelievesthatgiventhesizeandscaleofitsoperations,non-compliancebytheCompanywiththisrecommendationwillnotbedetrimentaltotheCompanyoritsshareholders.Principle3–Actethicallyandresponsibly
Codeofconduct
TheCompanyhasestablishedaCorporateCodeofConductandCorporateEthicsPolicyfortheBoard,managementandemployeesoftheCompany.TheCodesrequirethatDirectors,managementandemployeesmaintainhighstandardsofintegritybyensuringthatallbusinessactivitiesareconductedlegallyandethicallyincompliancewiththeletterandspiritof both the lawandCompanypolicies. TheCodeof Conduct andEthics Policy is set out in theCompany’s CorporateGovernanceCharterandcanbeaccessedontheCompany’swebsiteunderCorporateGovernance.
PRINCIPLE4–SAFEGUARDINTEGRITYINCORPORATEREPORTING
AuditCommitteeTheBoardhasestablishedanAuditandRiskManagementCommittee.TheCommitteeis:
• MrBenjaminHarrison–Non-ExecutiveDirector(ChairmanoftheCommittee)• MrPeterClare–Non-Executive(Independent)Director• MrAshleyShilkin–ManagingDirector
CGCrecommendation4.1statesthattheauditcommitteeshouldconsistofamajorityofindependentDirectorsandallbenon-executiveDirectors.MessrsHarrisonandShilkinarenotconsideredtobeindependentasdetailedinsection2.3andMr Shilkin is an Executive Director. The Company believes that given the size and scale of its operations, non-compliancebytheCompanywillnotbedetrimentaltotheCompany.TheexperienceandqualificationsofmembersoftheAuditandRiskManagementCommitteearedetailedintheAnnualReport.DetailsofCommitteemembers’attendanceatAuditandRiskManagementCommitteemeetingswillalsobeabletobeaccessedintheDirectors’ReportwithintheAnnualReport.The Company has adopted an Audit and RiskManagement Committee Charter setting out the Committee aswell asreportingrequirements.TheCharterwillbereviewedannuallytodeterminewhetheranychangesarenecessary.AcopyoftheCharter is includedintheCorporateGovernanceCharterandcanbeaccessedontheCompany’swebsiteunderCorporateGovernance.
TheresponsibilitiesoftheAuditandRiskManagementCommitteewithrespecttoauditareto:• reviewandmakerecommendationstotheBoardinrelationtowhethertheCompany’sfinancialstatementsreflect
theunderstandingofthemembersoftheCommittee,andotherwiseprovideatrueandfairviewofthefinancialpositionandperformanceoftheCompany;
• reviewandmakerecommendationstotheBoardinrelationtotheappropriatenessoftheaccountingjudgmentsorchoicesexercisedbyManagementinpreparingtheCompany’sfinancialstatements;
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• ensurethatthequalityoffinancialcontrolsisappropriateforthebusinessoftheCompany;• reviewthescope,resultsandadequacyofexternalandinternalaudits;• requiretheexternalauditorstoreporttotheCommittee;• monitorcorporateconductandbusinessethicsandongoingcompliancewithlawsandregulations;• maintainopenlinesofcommunicationbetweentheBoard,Managementandtheexternalauditors,thusenabling
informationandpointsofviewtobefreelyexchanged;• reviewmattersofsignificanceaffectingthefinancialwelfareoftheCompany;• ensurethatsystemsofaccountingandreportingoffinancialinformationtoshareholders,regulatorsandthegeneral
publicareadequateandmakingrecommendationsinthisregard;• reviewtheCompany'sinternalfinancialcontrolsystem;• considerandmakerecommendationsregardingtheappointmentandremovaloftheexternalauditorandapproving
theremunerationandtermsofengagementoftheexternalauditor;• monitor and review the external auditor's independence, objectivity andeffectiveness, taking into consideration
relevantprofessionalandregulatoryrequirementsandtheperformanceoftheexternalauditor;and• developandimplementpolicyontheengagementoftheexternalauditortosupplynon-auditservices,takinginto
accountrelevantethicalguidanceregardingtheprovisionsofnon-auditservicesbytheexternalauditfirmandmakerecommendationsonanyproposalbytheexternalauditortoprovidenon-auditservices;
Externalauditor
Pitcher Partnerswas appointed as the Company’s external auditor by shareholders at aGeneralMeeting held on 30November2015.PitcherPartnershasadvisedtheCompanythattheirpolicyofauditpartnerrotationrequiresachangeintheleadengagementpartnerandreviewpartnerafteraperiodoffiveyears.RepresentativesofPitcherPartnersattendtheAnnualGeneralMeetingandareavailabletoanswershareholderquestionsregardingtheauditortheindividualstatements.ManagingDirectorandCFOcertificationoffinancialstatements.
PriortotheapprovaloftheGroup’sfinancialstatementseachyear,theManagingDirectorandtheChiefFinancialOfficerconfirminwritingtotheBoardthatthefinancialreportsoftheCompanyforthefinancialyear:
• presentatrueandfairview,inallmaterialrespects,oftheCompany’sfinancialconditionandoperationalresultsandareinaccordancewithrelevantaccountingstandards;
• thestatementgiveninaccordancewithsection295AoftheCorporationsActisfoundedonasoundsystemofriskmanagementandinternalcomplianceandcontrolwhichimplementsthepoliciesadoptedbytheBoard;and
• theCompany’sriskmanagementandinternalcomplianceandcontrolsystemisoperatingefficientlyandeffectivelyinallmaterialrespectsinrelationtofinancialreportingrisks.
PRINCIPLE5–MAKETIMELYANDBALANCEDDISCLOSURE
DisclosureandCommunicationsPolicyTheCompanyhasadoptedaContinuousDisclosurePolicywithinitsCorporateGovernanceChartertoensurecompliancewiththecontinuousdisclosurerequirementsoftheASXListingRulesandtheCorporationsAct2001(oncetheCompanyislistedontheASX).ThepolicysetsouttherulesandproceduresforASXinformationdisclosure,theresponsibilityoftheBoard,SeniorExecutivesandstafftoensurethatpricesensitiveinformationisidentified,reviewedbymanagementanddisclosedtotheASXinatimely,clearandobjectivemannerandthatallinformationprovidedtotheASXispostedontheCompany’swebsiteassoonaspossibleafteritsdisclosuretoASX.The Company Secretary will manage the Company’s compliance with its continuous disclosure obligations and isresponsibleforcommunicationswith,andcoordinatingdisclosureofinformationtotheASX.DirectorswillreceivecopiesofallannouncementsreleasedtotheASXandcopiesofannouncements,includingrelatedinformation,suchasfinancialstatementsandpublicpresentations,andareawareofandaccountablefortheCompany’scompliancewithregardtocontinuousdisclosure.
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RESPECTTHERIGHTSOFSECURITYHOLDERSShareholderCommunication
TheCompanyiscommittedtoinformingshareholdersofallmajordevelopmentsaffectingtheoperationsoftheCompanyandthestateofitsaffairs.Communicationswithshareholdersinclude:
• Theannualreportwhichisdistributed,orotherwisemadeavailable,toallshareholders;
• Thequarterlyactivitiesreport;
• Thehalf-yearfinancialreport;
• TheAnnualGeneralMeetingandothergeneralmeetingscalledtoobtainshareholderapprovalforsignificantcorporateactions,asappropriate;
• Companyannouncements;and
• AlloftheinformationavailableontheCompany’swebsitewww.chimpchange.me
TheCompanywelcomesquestionsfromshareholdersatanytimeandtheseareansweredpromptlyunlesstheinformationrequestedismarketsensitiveandnotinthepublicdomain.AllannouncementstobemadebytheCompanytotheASX(exceptdisclosuresofaroutinecomplianceoradministrativenature)willbepostedtotheCompany’swebsite.InformationabouttheCompanyanditsoperationsincludinginformationabouttheCompany’scorporategovernancepoliciesislocatedat:www.chimpchange.meFacilitateparticipationatmeetingsofsecurityholders.
TheCompanyencouragesshareholderparticipationatitsAGM’sincludingbymakingnoticesofmeetingsavailableonitswebsite.ChimpChange’sexternalauditorattendstheCompany’sAGMsandisavailabletoansweranyquestionswhichshareholdersmayhaveabouttheconductoftheexternalauditfortherelevantfinancialyearandthepreparationandcontentoftheauditreport.
ShareholderswhoareunabletoattendmeetingsoftheCompanyareencouragedtoparticipateinmeetingsbywayofappointmentofaproxy.
PRINCIPLE7–RECOGNISEANDMANAGERISKRiskcommittee
TheBoardhasestablishedanAuditandRiskManagementCommitteethemembersofwhicharesetintheAuditsectionunderPrincipal4andtheresponsibilitiesofwhicharesetoutintheAuditandRiskManagementCommitteeCharter.TheCharterwillbereviewedannuallytodeterminewhetheranychangesarenecessary.AcopyoftheCharterisincludedintheCorporateGovernanceCharterandcanbeaccessedontheCompany’swebsiteunderCorporateGovernance.TheresponsibilitiesoftheAuditandRiskManagementCommitteewithrespecttoriskareto:
• review and make recommendations to the Board in relation to the adequacy of the Company’s processes formanagingrisks,including:
(a) inrelationtoanyincidentinvolvingfraudorotherbreakdownoftheCompany’sinternalcontrols;
(b) inrelationtotheCompany’sinsuranceprogram,havingregardtotheCompany’sbusinessandtheinsurablerisksassociatedwiththebusiness;
• ensure the development of an appropriate risk management policy framework that will provide guidance toManagement in implementing appropriate risk management practices throughout the Company's operations,practicesandsystemsandtooverseethisframework;
• defineandperiodicallyreviewriskmanagementasitappliestotheCompanyandclearlyidentifyingallstakeholders;
• ensuretheCommitteeclearlycommunicatestheCompany'sriskmanagementphilosophy,policiesandstrategiestoDirectors,Management,employees,contractorsandappropriatestakeholders;
• ensurethattheBoardandManagementestablishariskawareculturewhichreflectstheCompany'sriskpoliciesandphilosophies;
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• reviewmethodsofidentifyingbroadareasofriskandsettingparametersorguidelinesforbusinessriskreviews;
• make informed decisions regarding business risk management, internal control systems, business policies andpracticesanddisclosures;and
• considercapitalraising,treasuryandmarkettradingactivitieswithparticularemphasisonrisktreatmentstrategies,productsandlevelsofauthorities.
The responsibility for undertaking and assessing risk management and internal control effectiveness is delegated tomanagementundertheguidanceoftheCommittee.Internalaudit
TheCompanydoesnothaveaninternalauditfunctionduetoitscurrentsize.TheAuditandRiskManagementCommitteegainssufficientassurancefrommanagementundertakingongoingevaluationoftheCompany’sinternalcontrolandriskmanagementprocesses.Sustainabilityrisks
Asadigitalbankingcompany,ChipmChangefacesinherentrisksinitsactivities,primarilyfinancial,operatingandsystemrisksbutalsoincludingeconomic,environmentalandsocialsustainabilityrisks.TheBoarddoesnotconsiderthatithasmaterialexposuretoeconomic,environmentalandsocialsustainabilityrisksotherthanitsexposuretogeneraleconomicconditionsinthemarketsinwhichitoperates.The Board regularlymonitors the operational and financial performance of the Company’s activities. Itmonitors andreceivesadviceonareasofoperationandfinancialriskandconsidersstrategiesforappropriateriskmanagement.
Reviewofriskmanagementframework
TheAudit&RiskManagementCommitteewasestablishedinApril2016didnotconductaformalreviewoftheCompany’sriskmanagementframeworkinthe2016financialyear.Duringthe2016financialyeartheidentificationandevaluationofrisksandthedevelopmentandimplementationofriskmitigationplanswasundertakenbymanagementwithoversightfromtheBoard.
PRINCIPLE8–REMUNERATEFAIRLYANDRESPONSIBLYRemunerationcommittee.
TheBoardhasnotformallyestablishedaRemunerationCommitteeastheBoardconsidersthattheCompanyisnotofasizenorareitsaffairsofsuchcomplexityastojustifytheformationofthisCommittee.TheBoardofDirectorsisresponsiblefordeterminingandreviewingcompensationarrangementsfortheDirectorsandtheExecutiveteam.TheBoardassessestheappropriatenessofthenatureandamountofremunerationofsuchofficerson a periodic basis by reference to relevant employment market conditions with the overall objective of ensuringmaximumstakeholderbenefitfromtheretentionofahighqualityBoardandExecutiveteam.DisclosureofExecutiveandNon-ExecutiveDirectorRemunerationpolicy
TheConstitutionoftheCompanyprovidesthattheNon-ExecutiveDirectorsareentitledtoremunerationasdeterminedbytheCompanyingeneralmeetingtobepaidastoafixedamountforeachDirector.Additionally,Non-ExecutiveDirectorsareentitledtobereimbursedforproperlyincurredexpenses.AllDirectorshavetheopportunitytoqualifyforparticipationintheCompany’sshareoptionplan,subjecttotheapprovalofshareholders.Details of the Company’s remuneration arrangements for Non-Executive Directors, Executive Directors and seniorExecutivesincludingfeeratesaresetoutintheRemunerationReportintheAnnualReport.ShareTradingPolicy.
TheCompany’sShareTradingPolicyspecificallyprohibitsDirectorsandseniorExecutives fromengaging inshort-termtrading in theCompany’ssecurities.ThePolicyalsostipulates thatDirectorsandseniorExecutivesandclosely relatedpartiesnotenterintotransactionswhichlimittheeconomicriskrelatingtounvestedoptionsheldbyDirectorandSeniorExecutives. The Share Trading Policy is included in the Corporate Governance Charter and can be accessed on theCompany’swebsiteunderCorporateGovernance.
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FINANCIALREPORTThesefinancialstatementsaretheconsolidatedfinancialstatementsoftheconsolidatedentityconsistingofChimpchangeLimitedanditssubsidiaries.ThefinancialstatementsarepresentedintheUnitedStatescurrency.ChimpchangeLimitedisacompanylimitedbyshares,incorporatedanddomiciledinAustralia.Itsregisteredofficeis:CorporateAdministrationServicesPtyLtdLevel10,110MaryStreetBRISBANEQLD4000Itsprincipalplaceofbusinessis:ChimpchangeLLC7083HollywoodBoulevard,Level1,Hollywood,CA90028AsummaryoftheGroup’soperationsanditsprincipalactivitiesisincludedinthedirectors'reportonpage6,whichisnotpartofthesefinancialstatements.ThefinancialstatementswereauthorisedforissuebytheDirectorson30September2016.TheDirectorshavethepowertoamendandreissuethefinancialstatements.Throughtheuseoftheinternet,wehaveensuredthatourcorporatereportingistimelyandcomplete.Allpressreleases,financialreportsandotherinformationareavailableatourShareholders'Centreonourwebsite:www.chimpchange.me
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CONSOLIDATEDSTATEMENTOFPROFITORLOSS 2016 2015
Note US$000s US$000s
Revenue 4 180 -
Employeebenefitsexpense (2,840) (1,256)
Advertising&marketingexpense (1,129) (62)
Programexpenses (983) (147)
Consulting (1,459) (291)
Travelexpense (126) (61)
Financecosts - (1)
Depreciation&amortisationexpense 5 (275) (2)
Legalexpenses (332) (30)
Insurance (82) (13)
TechnologyExpense (165) (56)
Otherexpense (444) (247)
Profit(loss)beforetax (7,655) (2,166)
Incometaxexpense 6 - -
Profit(loss)fromcontinuingoperations (7,655) (2,166)
Basiclosspershare(UScentspershare) (22.9) (10.6)
Dilutedlosspershare(UScentspershare) (22.9) (10.6)
Theconsolidatedstatementsaboveshouldbereadinconjunctionwiththeaccompanyingnotes.
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CONSOLIDATEDSTATEMENTOFCOMPREHENSIVEINCOME 2016 2015
US$000s US$000s
Lossoftheyear (7,655) (2,166)
Othercomprehensiveincome
Itemsthatmaybereclassifiedtoprofitandloss
Exchangedifferencesontranslationofparentoperations 50 (63)
Profit(loss)fromcontinuingoperations (7,605) (2,229)
Theconsolidatedstatementsaboveshouldbereadinconjunctionwiththeaccompanyingnotes.
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CONSOLIDATEDSTATEMENTOFFINANCIALPOSITION Notes 2016 2015
US$000s US$000s
Currentassets
Cash 7 10,878 753
Otherreceivables 8 107 35
Othercurrentassets 9 15 2
Totalcurrentassets 11,000 790
Non-currentassets
Property,plant&equipment 10 31 17
Intangibleassets 11 811 626
Totalnon-currentassets 842 643
TOTALASSETS 11,842 1,433
Currentliabilities
Tradeandotherpayables 12 359 48
Provisions 13 101 21
Othercurrentliabilities 14 22 768
Totalcurrentliabilities 482 837
NETASSETS 11,360 596
Equity
Contributedequity 15 18,714 1,914
Reserves 16 3,290 1,671
Retainedearnings (10,644) (2,989)
TOTALEQUITY 11,360 596
Theconsolidatedstatementsaboveshouldbereadinconjunctionwiththeaccompanyingnotes.
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CONSOLIDATEDSTATEMENTOFCHANGESINEQUITY Contributed Reserves Retained Total
Equity Earnings Equity
US$000s US$000s US$000s US$000s
Balanceat30June2014 1,102 26 (823) 305
Profit(loss)fortheyear (2,166) (2,166)
Exchangedifferencesontranslationofthe
parentoperation (63) (63)
Totalcomprehensiveincomefortheyear - (63) (2,166) (2,229)
Transactionswithownersintheircapacityasowners
Optionsissued 1,708 1,708
Contributions 812 812
Totalcomprehensiveincomefortheyear 812 1,708 - 2,520
Balanceat30June2015 1,914 1,671 (2,989) 596
Profit(loss)fortheyear (7,655) (7,655)
Exchangedifferencesontranslationofthe
parentoperation 50 50
Totalcomprehensiveincomefortheyear - 50 (7,655) (7,065)
Transactionswithownersintheircapacityasowner
Optionsissued 1,569 1,569
Contributions 16,800 16,800
Totalcomprehensiveincomefortheyear 16,800 1,569 - 18,369
Balanceat30June2016 18,714 3,290 (10,644) 11,360
Theconsolidatedstatementsaboveshouldbereadinconjunctionwiththeaccompanyingnotes.
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CONSOLIDATEDSTATEMENTOFCASHFLOWS Notes 2016 2015
US$000s US$000s
Cashflowfromoperatingactivities
Receiptsfromcustomers 178 -
Paymentstosuppliersandemployees (5,457) (1,103)
Interestreceived 2 -
Netcashusedinoperatingactivities (5,277) (1,103)
Cashflowfrominvestingactivities
Paymentforproperty,plant&equipment (24) (15)
Paymentforsoftwaredevelopment (394) (460)
Netcashusedininvestingactivities (418) (475)
Proceedsfromfinancingactivities
Proceedsfromshareissue 15,825 2,263
Netcashprovidedbyfinancingactivities 15,825 2,263
Netincrease(decrease)incashheld 10,130 685
Reconciliationofcash
Cashatthebeginningofthefinancialyear 753 78
Netincrease(decrease)incashheld 10,130 685
Foreignexchangedifferenceoncashholding (5) (10)
Netcashusedinoperatingactivities 10,878 753
Theconsolidatedstatementsaboveshouldbereadinconjunctionwiththeaccompanyingnotes.
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NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS
1. SummaryofSignificantAccountingPolicies
TheseconsolidatedfinancialstatementsrelatetoChimpchangeLimitedandtheentitiesitcontrolledattheendof,orduring,theyearended30June2016andhadbeenpreparedinaccordancewithrule4.3AoftheASXListingRules(Appendix4E).TheprincipalaccountingpoliciesadoptedinpreparingthefinancialreportoftheCompanyanditsconsolidatedentities(ConsolidatedEntityorGroup)fortheyearended30June2016arestatedtoassistinageneralunderstandingofthefinancialreport.ForthepurposesofpreparingthefinancialreporttheCompanyisaforprofitentity.ChimpchangeLimitedisacompanylimitedbysharesincorporatedinAustraliawhosesharesarepubliclytradedontheAustralianSecuritiesExchange.
(a) CompliancewithIFRS
TheConsolidatedFinancialReportofChimpchangeLimitedcomplieswithInternationalFinancialReportingStandards(IFRS)asissuedbytheInternationalAccountingStandardsBoard(IASB).
(b) HistoricalCostConvention
TheConsolidatedFinancialReportofChimpchangeLimitedhasbeenpreparedunderthehistoricalcostconventionwiththeexceptionofthesharebasedpaymentsreservethatismeasuredatfairvalue.
(c) PrinciplesofConsolidation
Theconsolidatedfinancialstatementsarethoseoftheconsolidatedentity("thegroup"),comprisingthefinancialstatementsoftheparententityandalloftheentitiestheparentcontrols.Thegroupcontrolsanentitywhereithasthepower,forwhichtheparenthasexposureorrightstovariablereturnsfromitsinvolvementwiththeentity,andforwhichtheparenthastheabilitytouseitspowerovertheentitiestoaffecttheamountofitsreturns.Thefinancialstatementsofsubsidiariesarepreparedforthesamereportingperiodastheparententity,usingconsistentaccountingpolicies.Adjustmentsaremadetobringintolineanydissimilaraccountingpolicieswhichmayexist.Allinter-companybalancesandtransactions,includinganyunrealisedprofitsorlosseshavebeeneliminatedonconsolidation.Subsidiariesareconsolidatedfromthedateonwhichcontrolistransferredtothegroupandarede-recognisedfromthedatethatcontrolceases. Non-controllinginterestsintheresultofsubsidiariesareshownseparatelyintheconsolidatedstatementofcomprehensiveincomeandconsolidatedstatementoffinancialpositionrespectively.
(d) ForeignCurrencyTranslationsandBalances
PresentationcurrencyThefinancialstatementsofeachentitywithintheconsolidatedentityaremeasuredusingthecurrencyoftheprimaryeconomicenvironmentinwhichthatentityoperates(thefunctionalcurrency).TheconsolidatedfinancialstatementsarepresentedinUSdollarswhichistheconsolidatedentity’sfunctionalandpresentationcurrency. TransactionsandbalancesTransactionsinforeigncurrenciesofentitieswithintheconsolidatedgrouparetranslatedintofunctionalcurrencyattherateofexchangerulingatthedateofthetransaction.
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Foreigncurrencymonetaryitemsthatareoutstandingatthereportingdate(otherthanmonetaryitemsarisingunderforeigncurrencycontractswheretheexchangerateforthatmonetaryitemisfixedinthecontract)aretranslatedusingthespotrateattheendofthefinancialyear. Non-monetaryitemsthataremeasuredintermsofhistoricalcostinaforeigncurrencyarenotretranslatedExceptforcertainforeigncurrencyhedges,allresultingexchangedifferencesarisingonsettlementorre-statementarerecognisedasrevenuesandexpensesforthefinancialyear. • Currentassetsandliabilitiesaretranslatedattheclosingrateonreportingdate;• Non-currentassetsaretranslatedathistoricalcost• Incomeandexpensesaretranslatedatactualexchangeratesoraverageexchangeratesfortheperiodwhere
appropriate;and• Allresultingexchangedifferencesarerecognisedinothercomprehensiveincome.
(e) RevenueProvidingservicesRevenueismeasuredatthefairvalueoftheconsiderationreceivedorreceivabletotheextentthatitisprobablethattheeconomicbenefitwillflowtotheCompanyandtherevenuecanbereliablymeasured.RevenueisderivedfromearningashareofinterchangerevenuederivedfrompurchasesmadeusingtheChimpChangebrandedprepaidcardsandfromearningfeeschargedtocustomers.InterestincomeInterestrevenueisrecognisedonaproportionalbasisusingtheeffectiveinterestmethodtakingintoaccounttheinterestratesapplicabletothefinancialassets. (f) IncometaxCurrentincometaxexpenseorrevenueisthetaxpayableonthecurrentperiod'staxableincomebasedontheapplicableincometaxrateadjustedbychangesindeferredtaxassetsandliabilities.Deferredtaxassetsandliabilitiesarerecognisedfortemporarydifferencesattheapplicabletaxrateswhentheassetsareexpectedtoberecoveredorliabilitiesaresettled.Deferredtaxliabilitiesarenotrecognisediftheyarisefromtheinitialrecognitionofgoodwill.Deferredincometaxisalsonotaccountedforifitarisesfrominitialrecognitionofanassetorliabilityinatransactionotherthanabusinesscombinationthatatthetimeofthetransactionaffectsneitheraccountingnortaxableprofitorloss. Deferredtaxassetsarerecognisedfordeductibletemporarydifferencesandunusedtaxlossesonlyifitisprobablethatfuturetaxableamountswillbeavailabletoutilisethosetemporarydifferencesandlosses.Currentanddeferredtaxbalancesattributabletoamountsrecogniseddirectlyinequityarealsorecogniseddirectlyinequity.(g) FinancialInstrumentsNonderivativefinancialinstruments Non-derivativefinancialinstrumentsconsistofinvestmentsinequityanddebtsecurities,tradeandotherreceivables,cashandcashequivalents,loansandborrowings,andtradeandotherpayables.Non-derivativefinancialinstrumentsareinitiallyrecognisedatfairvalue,plusdirectlyattributabletransactioncosts(ifany),exceptforinstrumentsrecordedatfairvaluethroughprofitorloss.Afterinitialrecognition,non-derivativefinancialinstrumentsaremeasuredasdescribedbelow.
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FinancialliabilitiesFinancialliabilitiesincludetradepayables,othercreditorsandloansfromthirdpartiesincludinginter-companybalancesandloansfromorotheramountsduetodirector-relatedentities.
Non-derivativefinancialliabilitiesarerecognisedatamortisedcost,comprisingoriginaldebtlessprincipalpaymentsandamortisation. Financialliabilitiesareclassifiedascurrentliabilitiesunlessthegrouphasanunconditionalrighttodefersettlementoftheliabilityforatleasttwelvemonthsafterthereportingperiod.
(h) Property,plant&equipment
Eachclassofplantandequipmentiscarriedatcostorfairvalueless,whereapplicable,anyaccumulateddepreciationandanyaccumulatedimpairmentlosses. PlantandequipmentPlantandequipmentismeasuredonacostbasis.DepreciationThedepreciableamountofallproperty,plantandequipmentisdepreciatedovertheirestimatedusefullivescommencingfromthetimetheassetisheldreadyforuse.Landandthelandcomponentofanyclassofproperty,plantandequipmentisnotdepreciated.
Classoffixedasset Depreciationrates DepreciationbasisMotorvehiclesunderlease 12.5% StraightlineOfficeequipment 25% StraightlineComputerequipment 25% Straightline
(i) Softwaredevelopment
Softwaredevelopmentcostsarecapitalisedwhenitisprobablethattheprojectwillbeasuccessconsideringitscommercialandtechnicalfeasibility;theentityisabletouseorselltheasset;thesoftwarewillgenerateprobablefutureeconomicbenefits;theentityhassufficientresourceandintenttocompletethedevelopmentanditscostscanbemeasuredreliably.Capitalisedsoftwaredevelopmentexpenditureisstatedatcostlessaccumulatedamortisation.Amortisationiscalculatedusingthestraight-linemethodtoallocatethecostoverthreeyears.Theassetcarryingvalueisreviewedforimpairmentannuallyandamountsarewrittenofftotheextentthatrealisablefuturebenefitsareconsideredtobenolongerprobable.
(j) Impairmentofnon-financialassets
Intangibleassetsaretestedannuallyforimpairment,ormorefrequentlyifeventsorchangesincircumstancesindicatethattheymightbeimpaired Animpairmentlossisrecognisedwherethecarryingamountoftheassetexceedsitsrecoverableamount.Therecoverableamountofanassetisdefinedasthehigherofitsfairvaluelesscoststosellandvalueinuse.
(k) Employeebenefits
ShorttermemployeebenefitobligationsLiabilitiesarisinginrespectofwagesandsalaries,annualleaveandanyotheremployeebenefitsexpectedtobesettledwhollywithintwelvemonthsofthereportingdatearemeasuredattheirnominalamountsbasedonremunerationrateswhichareexpectedtobepaidwhentheliabilityissettled.Theexpectedcostofshort-termemployeebenefitsintheformofcompensatedabsencessuchasannualleaveisrecognisedintheprovisionforemployeebenefits.Allothershort-termemployeebenefitobligationsarepresentedaspayables.
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LongtermemployeebenefitobligationsLiabilitiesarisinginrespectoflongserviceleaveandannualleavewhichisnotexpectedtobesettledwhollywithintwelvemonthsofthereportingdatearemeasuredatthepresentvalueoftheestimatedfuturecashoutflowtobemadeinrespectofservicesprovidedbyemployeesuptothereportingdate.Employeebenefitobligationsarepresentedascurrentliabilitiesinthebalancesheetiftheentitydoesnothaveanunconditionalrighttodefersettlementforatleasttwelvemonthsafterthereportingdate,regardlessofwhentheactualsettlementisexpectedtooccur.
(l) Goodsandservicestax(GST)
Revenues,expensesandpurchasedassetsinAustraliaarerecognisednetoftheamountofGST,exceptwheretheamountofGSTincurredisnotrecoverablefromtheTaxOffice.InthesecircumstancestheGSTisrecognisedaspartofthecostofacquisitionoftheassetoraspartofanitemoftheexpense.ReceivablesandpayablesintheconsolidatedstatementoffinancialpositionareshowninclusiveofGST.Cashflowsarepresentedintheconsolidatedstatementofcashflowsonagrossbasis,exceptfortheGSTcomponentofinvestingandfinancingactivities,whicharedisclosedasoperatingcashflows.
(m) Rounding
ThecompanyisofakindreferredtoinASICCorporations(RoundinginFinancial/Directors’Reports)Instrument2016/191,relatedtothe'roundingoff'ofamountsinthefinancialstatements.AmountsinthefinancialstatementshavebeenroundedoffinaccordancewiththatLegislativeInstrumenttothenearestthousanddollars,orincertaincases,thenearestdollar.
(n) Cashandcashequivalents
Forcash-flowpresentationpurposes,cashandcashequivalentsincludescashonhand,depositsheldatcallwithfinancialinstitutions,othershort-term,highlyliquidinvestmentswithoriginalmaturitiesofthreemonthsorlessthatarereadilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue.
(o) StandardsandInterpretationsOnIssueNotYetAdopted
TheDirectorshavereviewedallnewStandardsandInterpretationsthathavebeenissuedbutarenotyeteffectivefortheyearended30June2016.AsaresultofthisreviewtheDirectorshavedeterminedthatthereisnomaterialimpactofthenewandrevisedStandardsandInterpretationsontheGroupand,therefore,nochangeisnecessarytoGroupaccountingpolicies.
2. CriticalAccountingJudgements
Estimatesandjudgementsarecontinuallyevaluatedandarebasedonhistoricalexperienceandotherfactors,includingexpectationsoffutureeventsthatmayhaveafinancialimpactontheentityandthatarebelievedtobereasonableunderthecircumstances.TheGroupmakesestimatesandassumptionsconcerningthefuture.Theresultingaccountingestimateswill,bydefinition,seldomequaltherelatedactualresults.Theestimatesandassumptionsthathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyeararediscussedbelow.
Estimatedimpairmentofgoodwillandothernon-currentassetsDeterminingwhethernon-currentassetsareimpairedrequiresanestimationofthevalueinuseofthoseassets.ThevalueinusecalculationrequiresthedirectorstoestimatethefuturecashflowsexpectedtoarisefromtheGroupandasuitablediscountrateinordertocalculatepresentvalue.Wheretheactualfuturecashflowsarelessthanexpected,amaterialimpairmentlossmayarise.
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Share-basedpaymentstransactionsTheGroupmeasuresthecostofequitysettledtransactionsbyreferencetothefairvalueoftheequityinstrumentsatthedateatwhichtheyaregranted.ThefairvalueisdeterminedbyusingeithertheBlackandScholesorBinomialmodeltakingintoaccountthetermsandconditionsuponwhichtheinstrumentsweregranted.Theaccountingestimatesandassumptionsrelatingtoequity-settledshare-basedpaymentswouldhavenoimpactonthecarryingamountsofassetsandliabilitieswithinthenextannualreportingperiodbutmayimpactprofitorlossorequity.
3. OperatingSegments
TheGroupisorganisedintoasingleoperatingsegmentbeingtheprovisionofmobilebankingservicesthroughtheChimpChangemobileapplicationdevelopedbytheCompany.
4. Revenue
2016 2015
US$000 US$000
Revenuefromservices 178 -
Interestincome 2 -
Totalrevenue 180 -
5. Expenses 2016 2015
US$000 US$000
Lossbeforeincometaxhasbeendeterminedafter:
Amortisationanddepreciation
Depreciationofproperty,plant&equipment 10 2
Amortisationofsoftwaredevelopmentcosts 265 -
Sharebasedpayments
Optionsissuedtodirectors,companysecretary&employees 970 1,018
Optionsissuedtoserviceproviders 599 -
Sharesissuedtoanadvisor 207 -
Employeebenefits
Employeebenefitssuperannuation/retirementplan 17 3
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6. IncomeTaxExpense
2016 2015
US$'000 US$'000
Reconciliationofincometaxexpenseandtaxatthestatutoryrate
Lossbeforeincometaxexpense (7,655) (2,166)
TaxattheAustraliantaxrateof30%(2015:30%) (2,296) (650)
Differencesinoverseastaxrates (468) (90)
Taxeffectofamountswhicharenotdeductible/(taxable)incalculating
taxableincome
Sharebasedpaymentsexpense 471 305
Other 26 (2)
Currentyeartaxlossesnotrecognised 2,267 437
Incometaxexpense - -
Deferredtaxassetsof$2,884,000(2015:$617,000)inrespectoftemporarydifferencesandtaxlosseshavenotbeenrecognized.
7. Currentassets-Cashandcashequivalents
2016 2015
US$000s US$000s
CashatBank 10,878 753
8. Currentassets–Receivables
2016 2015
US$000s US$000s
Otherreceivables 107 35
9. Currentassets–Otherassets
2016 2015
US$000 US$000
PrepaymentsOthercurrentassets
132
-2
Totalothercurrentassets 15 2
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10. Property,plantandequipment
2016 2015
US$000s US$000s
Motorsvehiclesunderlease 6 5
Accumulateddepreciation (1) -
Closingcarryingvalue 5 5
Officeequipmentatcost 38 15
Accumulateddepreciation (12) (3)
Closingcarryingvalue 26 12
Totalproperty,plant&equipment 31 17
ReconciliationofmovementReconciliationofthecarryingamountsofproperty,plant&equipmentatthebeginningandendofthefinancialyear
Motorvehicle Office Total
underlease Equipment
US$000s US$000s US$000s
2015
Openingcarryingamount 5 12 17
Additions 1 23 24
Depreciationexpense (1) (9) (10)
Closingcarryingamount 5 26 31
2014
Openingcarryingamount - 4 4
Additions 5 10 15
Depreciationexpense - (2) (2)
Closingcarryingamount 5 12 17
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11. Intangibleassets
2016 2015
US$000 US$000
Softwaredevelopmentatcost 1,076 626
Accumulatedamortisationandimpairment (265) -
Totalsoftwaredevelopment 811 626
Movementsincarryingamounts
Openingcarryingamount 626 229
Additions 394 460
Amortisationexpense (265) -
Netforeigncurrencymovement 56 (63)
Closingcarryingamount 811 626
12. Tradeandotherpayables
2016 2015
US$000 US$000
Unsecuredliabilities
Accountspayable 359 48
TheGrouphasfinancialriskmanagementpoliciesinplacetoensurethatallpayablesarepaidwithinthecredittimeframe.
13. Provisions
2016 2015
US$000s US$000s
Employeeleaveprovisions 101 21
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14. Othercurrentliabilities
2016 2015
US$000 US$000
Sharesubscriptionfundsreceivedinadvanceofshareissue - 768
Otherliabilities 22 -
Totalothercurrentliabilities 22 768
15. Issuedcapital(i) ShareCapital
2016 2015
US$000 US$000
57,330,640fullypaidordinaryshares1(30June201523,415,530) 18,714 1,914
1Thisamountexcludes6,150,743sharesissuedundertheLoanFundedSharePlan(LFSP).TheseshareswillberecognisedinShareCapitalwhentheloanadvancedundertheLFSPtoacquirethosesharesisrepaid.Totalfullypaidsharesonissueis63,481,383.
(ii) Movementsinordinarysharecapital
Number US$000
Balanceat30June2014 3,517 1,102
Shareplacement-19November2014 400 468
Sharesplit-19Jan2015 19,996,083 -
SharePlacement-16February2015 3,415,530 1,067
Transactionfees (723)
Balanceat30June2015 23,415,530 1,914
ShareplacementA$0.55pershare–31July2015 5,559,926 2,265
ShareplacementA$0.70pershare–21December2015 7,890,184 4,033
ExerciseofoptionsatA$0.35pershare–1February2016 1,355,000 337
IssueofsharesforadvisoryservicesatA$0.75pershares–20April2016
360,000 207
SharesissuedpursuanttoaninitialpublicofferingatA$0.80pershare–30June2016
18,750,000 11,139
Transactionfees (1,181)
Balanceat30June20161 57,330,640 18,714
1Thisamountexcludes6,150,743sharesissuedundertheLoanFundedSharePlan(LFSP).TheseshareswillberecognisedinShareCapitalwhentheloanadvancedundertheLFSPtoacquirethosesharesisrepaid.Totalfullypaidsharesonissueis63,481,383.
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OrdinarysharesentitletheholdertoparticipateinthedividendsandtheproceedsonwindingupoftheCompanyinproportiontothenumberofandamountspaidonthesharesheld.Onashowofhandseveryholderofordinarysharespresentatameetinginpersonorbyproxyisentitledtoonevoteanduponapolleachisshareisentitledtoonevote.CapitalManagementManagementcontrolsthecapitaloftheCompanyinordertoensuretheCompanycanfunditsoperationsandcontinueasagoingconcern.
16. Reserves
2016 2015
US$000 US$000
Sharebasedpaymentsreserve 3,291 1,722
Foreigncurrencytranslationreserve (1) (51)
Closingcarryingamount 3,290 1,671
(a) MovementinSharebasedpaymentreserve
Openingbalance 1,722 14
Optionsissued 1,569 1,708
Balanceat30June2016 3,291 1,722
(b) MovementinForeigncurrencytranslationreserve
Openingbalance (51) 12
Exchangedifferencesarisingontranslationofparentoperation 50 (63)
Balanceat30June2016 (1) (51)
SharebasedpaymentreserveThereserveisusedtorecognisethevalueofoptionsissuedtoemployers,directorsandotherpartiesaspartoftheirremunerationofaspartoftheircompensationforservicesprovidedtotheGroup.
ForeigncurrencytranslationreserveThereserveisusedtorecogniseexchangedifferencesarisingfromthetranslationofthefinancialstatementsoftheholdingcompanytoUnitedStatesdollars.
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17. Reconciliationofprofitafterincometaxtonetcashinflowfromoperatingactivities
2016 2015
US$000 US$000
Lossfortheyear (7,655) (2,166)
Depreciationandamortisation 275 2
Sharebasedpayments 1,776 1,018
Decrease(increase)incurrentreceivables (84) (37)
Increase(decrease)incurrentliabilities 411 80
Netcashusedinoperatingactivities (5,277) (1,103)
18. Earningspershare
2016 2015
US$000 US$000
LossattributabletoordinaryequityholdersofChimpchangeLimited (7,655) (2,166)
Weightedaveragenumberofordinarysharesusedasadenominator
incalculatingbasicearningspershares 33,424,881 20,455,590
Weightedaveragenumberofordinarysharesanddilutivepotentialordinarysharesusedasadenominatorcalculatingdilutedearnings
pershare 33,424,881 20,455,590
19. DividendTherewenodividendspaid,recommendedordeclaredduringthecurrentorpreviousperiod.
20. Eventsoccurringafterthereportingperiod
Nomattersorcircumstanceshavearisensincetheendofthefinancialyearwhichsignificantlyaffectstheoperationsoftheconsolidatedgroup,theresultsofthoseoperationsofthestateofaffairsoftheconsolidatedgroupgoingforward.
21. Financialriskmanagement
TheGroup'sactivitiesmayexposeittoavarietyoffinancialrisks:marketrisk(includingcurrencyrisk,interestrateriskandpricerisk),creditriskandliquidityrisk.TheGroup'soverallriskmanagementprogramfocusesontheunpredictabilityoffinancialmarketsandseekstominimisepotentialadverseeffectsonthefinancialperformanceoftheGroup.RiskmanagementiscarriedoutbyseniormanagementinconsultationwiththeBoardofDirectors.TheBoardprovidesprinciplesforoverallriskmanagement,aswellasdirectioninspecificareas.
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MarketRiskForeigncurrencyriskTheGrouphastransactionalcurrencyexposures.SuchexposuresarisefromtransactionsbytheGroupincurrenciesotherthanthefunctionalcurrency.Atbalancedate,theGrouphadthefollowingexposurestoAustraliandollars(AUD)thatarenotdesignatedcashflowhedges.
Asat30June 2016 2015
A$000 AS$000
Cashatbank 14,006 157
Currentassets 94 45
Currentliabilities (335) (33)
Netmonetaryassets/liabilitiesdesignatedinAUD 13,765 169
TheCompanyreceivedproceedsofA$13,974,207on30June2016fromtheinitialpublicofferingofA$15,000,000netofbrokermanagementfees.ImmediatelyfollowingyearendtheCompanytransferredcashintoUSDdenominatedaccountsandtookoutforwardexchangecontractsinordertomatchthecurrencyexposureofcashholdingandforwardcontractswiththecurrencyofexpectedcashrequirements.
InterestrateriskInterestrateriskisconsideredimmaterialastheGroup’sonlyexposuretointerestrateriskiscashatbank.PriceriskTheGroupisnotexposedtoanysignificantpricerisk.
CreditRisk
CreditriskreferstotheriskthatacounterpartywilldefaultonitscontractualobligationsresultinginafinanciallosstotheGroup.TheGroupdeemeditscreditrisktobeminimalasitsfinancialassetsaremainlycashheldatBankwestwhichisasubsidiaryofCommonwealthBankofAustralia.
LiquidityRisk
TheGroupmanagesliquidityriskbymaintainingadequatecashbalancesandbycontinuouslymonitoringforecastsandactualcashflowsmatchingmaturityprofilesoffinancialassetsandliabilities.FinancingarrangementsTheGroupdoesnothaveaccesstoanyundrawnborrowingfacilitiesattheendofthereportingperiod.MaturitiesoffinancialliabilitiesAtperiodendtheGrouphadaccountspayableof$359,000(2015:$48,000)allofwhichhaveamaturityoflessthan6months.TheGrouphasnootherfinancialliabilities.
22. Share-basedpayments
Director&Employeeoptions
1,870,000optionswereissuedtoemployeesduringthefinancialyearpursuanttotheEmployeeShareOptionPlan.Theseoptionshaveastrikepricesof$1.00andexpireon18April2018.Theoptionshavevariousvestingconditionsparticulartoeachemployee.
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1,100,000optionswereissuedtosomedirectorsandthecompanysecretaryduringthefinancialyear.Theseoptionshaveastrikepriceof$1.00andexpireon31December2018.Theoptionsvestedimmediately.3,500,000optionswereissuedtotheManagingDirectorwithtermsasfollows:
StrikePrice Numberofoptions ExpiryDate VestingCondition
A$1.00 1,000,000 31Dec2018 Nil
A$1.50 1,000,000 18Apr2021 SharepricereachesA$2.001
A$2.25 1,500,000 18Apr2021 SharepricereachesA$3.001
110dayVWAPTheoptionsissuedtodirectorsandemployeeswithnovestingconditionswerevaluedusingtheBlack-Scholesmethodologyandexpensedatgrantdate.TheoptionsissuedtothedirectorandtheemployeeswithvestingconditionswerevaluedusingtheBinomialOptionPricingModelandwillbeexpensedovertermsofthevestingperiods.Forthepurposeofvaluingtheseoptionsthefollowingadditionalinputswereused.(i) Sharepriceatgrantdate-$0.80;(ii) Volatility–75%(iii) Riskfreerate–1.96%(iv) Expecteddividendyield–0%
Thetotalexpenseforthe2016financialyearforoptionsissuedtodirectors,thecompanysecretaryandtheemployeeswas$969,802.Thisincludesexpenseof$238,304relatingtooptionsissuedpriortothe2016financialyear.ThisexpenseisincludedwithintheEmployeeBenefitsandConsultantsexpenseclassificationswithintheStatementofProfitandLoss.
Optionsissuedtoserviceproviders
3,010,595optionswereissuedtoserviceprovidersduringtheyearasfollows:
StrikePrice Numberofoptions ExpiryDate VestingConditions
A$1.00 510,595 30Jun2017 Nil
A$1.00 1,000,000 18Apr2019 Various
A$1.00 1,500,000 20Apr2019 Nil
SharesissuedtoserviceprovideswereissuedaspartofthecompensationforservicesprovidedtotheCompany.Theoptionswerevaluedatthefairvalueoftheservicesprovided.Theoptionswithnovestingconditionswereexpensedatgrantdate.Theoptionswithvestingconditionswillbeexpensedoverthelifeoftheoptions.Theexpenseforthe2016financialyearwas$598,959andisincludedwithintheConsultantsexpenseclassification.Sharesissuedtoadvisor
360,000shareswereissuedtoanadvisoroftheCompanyforcapitalmarketsadvisoryservices.Theshareswereissuedatthefairvalueofservicesprovidedof$207,000andexpensedatissueddate.ThisexpenseisincludedwithintheConsultantsexpenseclassification.
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23. Subsidiaries
Theconsolidatedfinancialstatementsincludetheassets,liabilitiesandresultsofthefollowingsubsidiaries:NameofEntity Countryof Holding Equity Holding
Incorporation 2016 2015
% %
ChimpchangeLLC USA Membershipunits 100 100
ChangeLabsNZPtyLtd Australia OrdinaryShares 100 -
24. AccumulatedLosses
Asat30June 2016 2015
US$000 US$000
Openingbalanceofaccumulatedlosses (2,989) (823)
Lossfortheperiod (7,655) (2,166)
Closingbalanceofaccumulatedlosses (10,644) (2,989)
25. ParententityfinancialinformationTheindividualfinancialstatementsfortheParententityshowthefollowingaggregateamounts:Asat30June 2016 2015
A$000 A$000
Currentassets 10,471 155
Non-currentassets 7,137 2,555
Totalassets 17,608 2,710
Currentliabilities 249 793
Totalliabilities 249 793
NetAssets 17,359 1,917
Shareholders’equity
IssuedCapital 18,714 1,194
Reserves 3,290 1,671
RetainedEarnings (4,645) (1,668)
Totalshareholders’equity 17,359 1,917
Lossfortheperiod (2,977) (1,253)
Totalcomprehensiveloss (2,927) (1,316)
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26. Keymanagementpersonneldisclosures
Directors
ThefollowingpersonsweredirectorsofChimpchangeLimitedduringthefinancialyear:Non-executivedirectorsPeterClare–ChairmanBenHarrisonExecutiveDirectorsAshleyShilkin–ManagingDirectorIanLeijer–ChiefFinancialOfficerOtherkeymanagementpersonnel
Thefollowingpersonsalsohadresponsibilityforplanning,directingandcontrollingtheactivitiesoftheGroup,directlyorindirectly,duringthefinancialyear.TheyareemployedbyChimpchangeLLCClaytonFossett-ChiefOperatingOfficerNickRoberts–ChiefMarketingOfficerKeymanagementpersonnelcompensation
2016 2015 US$000 US$000
Shorttermemployeebenefits 1,344 339
Post-employmentbenefits 5 -
Sharebasedpayments 806 978
Total 2,155 1,317
Detailedremunerationdisclosuresareprovidedintheremunerationreport.
27. Remunerationofauditors
TheauditorofChimpchangeLimitedisPitcherPartners
Asat30June 2016 2015
US$ US$
Amountsreceivedordueandreceivableforcurrentauditors:
Anauditorreviewofthefinancialreportoftheentityandanyotherentityintheconsolidatedgroup 43,632 31,080
OtherservicesinrelationtotheentityandanyotherentityintheconsolidatedGroup–taxcompliance,taxstructuring,independentexpertreportfortheinitialpublicoffering
38,224 -
Total 81,856 31,080
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28. RelatedPartyTransactionsTransactionswithrelatedpartiesThefollowingtransactionsoccurredwithrelatedparties.
2016 2015
US$ US$
Paymentforgoodsandservices
PaymentstoSharedRunwayPtyLtdassociatedwithPeterClare 40,144 6,315
PaymentstoRiverfireCapitalPtyLtdassociatedwithBenHarrison 86,324 54,259
PaymentstoUnimainPtyLtdassociatedwithIanLeijer 124,574 39,905
LoanstoDirectorsandtheirrelatedentities
LFSP1loantoMrShilkin(A$1,752,906) 1,301,708 -
LFSP1toentityassociatedwithMrLeijer(A$399,854) 296,932 -
1LoanFundedSharePlans
Optionsissuedtodirectorsanddirectorrelatedentities 735,370 959,227
SubscriptionsfornewordinarysharesbyKMPasaresultofexerciseofoptionsandsettledwithcash 336,730 -
29. Contingentliabilities
TheGroupasnocontingentliabilitiesasat30June2016.
30. CommitmentsTheGroupasnocommitmentsasat30June2016.
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DIRECTORSDECLARTIONS Intheopinionofthedirectors:(a) thefinancialstatementsandnotessetoutonpages30to50areinaccordancewiththeCorporationsAct2001,
including:(i) complyingwithAustralianAccountingStandardsandtheCorporationsRegulations2001andothermandatory
professionalreportingrequirements;and(ii) givingatrueandfairviewofthegroup’sfinancialpositionasat30June2016andofitsperformanceforthe
financialyearendedonthatdate;and
(b) therearereasonablegroundstobelievethatthegroupwillbeabletopayitsdebtsasandwhentheybecomedueandpayable;and
Note1(a)confirmsthatthefinancialstatementsalsocomplywithInternationalFinancialReportingStandardsasissuedbytheInternationalAccountingStandardsBoard.Thedirectorshavebeengiventhedeclarationsbythemanagingdirectorandchieffinancialofficerrequiredbysection295AoftheCorporationsAct2001.Thisdeclarationismadeinaccordancewitharesolutionofthedirectors.30September2016
AshleyShilkin
FounderandManagingDirector
ChimpchangeLimited
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INDEPENDENTAUDITORSREPORT
Independent Auditor’s Report To the Members of ChimpChange Ltd
We have audited the accompanying financial report of ChimpChange Ltd, which comprises the consolidated statement of financial position as at 30 June 2016, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
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Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
Opinion In our opinion,
(a) the financial report of ChimpChange Limited is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the consolidated entity’s financial position as at
30 June 2016 and of its performance for the year ended on that date; and (ii) complying with Australian Accounting Standards and the Corporations
Regulations 2001; and (b) the financial report also complies with International Financial Reporting Standards
as disclosed in Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 13 to 19 of the directors’ report for the year ended 30 June 2016. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
Opinion
In our opinion the Remuneration Report of ChimpChange Limited for the year ended 30 June 2016 complies with Section 300A of the Corporations Act 2001.
PITCHER PARTNERS J. J. EVANS Partner Brisbane, Queensland 30 September 2016
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ASXADDITIONALDISCLOSURE
Top20ShareholdersRank Name Numberof %ofIssued
Shares Capital
1 ASHLEYSHILKIN 11,901,965 18.75%2 AVATARINDUSTRIESPTYLTD 10,762,463 16.95%3 BARTPROPERTIESPTYLTD 3,052,143 4.81%4 ALTORPRIVATEEQUITYPTYLTD* 2,837,662 4.47%5 NAREENENPTYLTD 2,672,529 4.21%6 BONDSTREETCUSTODIANSLIMITED* 1,455,000 2.29%
7 CITICORPNOMINEESPTYLIMITED 1,348,343 2.12%8 MRROSSALLENMCDONALD 1,069,262 1.68%9 PERSHINGAUSTRALIANOMINEESPTYLTD 900,000 1.42%10 NATIONALNOMINEESLIMITED* 891,250 1.40%11 ABNAMROCLEARINGSYDNEYNOMINEESPTYLTD 716,136 1.13%12 JPMORGANNOMINEESAUSTRALIALIMITED 629,545 0.99%
13 FALCASTLEPTYLTD 589,000 0.93%14 WSDOBSONPTYLTD 556,753 0.88%15 PINNACLESUPERANNUATIONPTYLIMITED 500,000 0.79%16 MRDAVIDFREDERICKOAKLEY 434,286 0.68%17 BLUEFLAGINVESTMENTSPTYLTD 428,571 0.68%18 BONNIPPTYLTD 377,500 0.59%
19 CSFOURTHNOMINEESPTYLIMITED 376,521 0.59%20 CHELMEREPTYLTD 366,589 0.58%
Top20Total 41,865,518 65.95% TotalSharesonIssue 63,481,383
ShareholdingDistributionRange Securities Numberof Holders
1to1,000 18,650 341,001to5,000 500,143 1485,001to10,000 1,175,033 15710,001to50,000 6,614,442 272
50,001to100,000 4,717,185 62100,001andOver 50,455,930 74
Total 63,481,383 747 UnmarketableParcels 9,650 25