2019 Annual Report
3P Learning Limited
ABN 50 103 827 836
www.3plearning.com
3P Learning Limited
Annual Report Contents
30 June 2019
A message from the Chairman and CEO
Directors’ report
Auditor's independence declaration
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Independent auditor's review report to the members of 3P Learning Limited
Shareholder information
Corporate directory
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5
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28
29
30
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71
76
78
1
A message from the Chairman and CEO
Dear Fellow Shareholders,
The end of this financial year marks the end of the three year strategic plan we set in 2017 which had an unwavering focus
on three strategic priorities: 1) strengthen the product portfolio, 2) create a scalable sales and marketing model and 3)
globalise the business. These strategies have laid the foundation for 3P Learning to realise its ambition to be a leading
global SaaS K-12 education brand and business.
2017-2019 Laying a foundation for growth
We start FY2020 with a stronger product portfolio having migrated to HTML5, strengthened our K-2 offering in Mathletics,
launched exciting student activities like Multiverse, improved our data and analytics around product efficacy as well as
embarked on the launch of our own literacy brand called Readiwriter.
The investments we have made over the past three years to develop a scalable sales and marketing model, mean 3P
Learning now has a world class sales and marketing automation platform, a rebuilt B2C customer experience, new web
assets and a powerful contract management and billing system. Combined, these investments position 3P Learning to be
a scalable SaaS business with a multi-product offering across a diverse array of countries and customers.
In all markets, including the important Americas region, we reset our sales model to use lower cost digital and telesales
resources to address transactional school by school sales and directed field sales to higher value contracts at the district
level. By resetting our cost structure in the Americas, implementing a new sales model and hiring some top American K-12
ed tech talent, the Americas region now makes a positive contribution to the Group and is poised for strong growth.
We now have a global operating model, having consolidated shared services like sales operations, marketing, people and
culture, technology and finance into global functions and implemented global processes and systems to drive efficiency and
effectiveness. We also reduced our real estate footprint and created three sales regions - APAC, the Americas and EMEA.
These actions generated significant savings which were in turn invested into our strategic priorities.
Importantly we start FY2020 with a strong balance sheet with $25.8M in cash and no debt.
Before outlining our 20:22 Accelerate Growth Plan here is a summary of our financial performance for the period ending
FY2019.
FY2019 Financial highlights
Key financial information
A$M (unless stated)
Revenue
Underlying core EBITDA
Underlying core NPAT
Net profit after tax
Earnings per share (cents)
Cash
FY2019
FY2018
Variation %
54.4
17.7
5.9
5.9
4.2
25.8
55.4
19.0
7.1
(18.7)
(13.4)
23.0
down 2%
down 7%
down 17%
up 132%
up 131%
up 12%
2
2020-2022 Accelerate growth
To achieve our growth ambition over the next 3 years 3P Learning will execute against 4 strategic priorities:
1) Leverage our expanded product portfolio and customer base
2) Accelerate profitable sales growth in the Americas
3) Enhance customer experience and improve retention
4) Continue to build a growth focussed, high performance culture.
Leverage our expanded product portfolio and customer base
We enter FY2020 with an expanded product portfolio including maths, literacy and science.
We will invest in our flagship Mathletics brand build upon our strong practice and fluency offering and we will introduce a
range of deeper learning resources which will help prepare students for the 21st century. We will launch Readiwriter Spelling
and, when it is combined with our already successful Reading Eggs product, we will offer the market a comprehensive
literacy offering.
In parallel, we will launch a learning framework, which we created in consultation with educators across the globe. We call
it ‘The 6Ms Learning Framework’ – magnify, motivate, model, master, maintain and meaningful feedback. It will be
embedded in our Mathletics and Readiwriter products and will provide teachers and students with superior navigation to
get the best out of our products.
We will also devote some of our innovation efforts to emerging areas like machine learning where students are presented
with true personalised learning pathways. We will do this through partnerships with industry leaders. But even as technology
evolves, our source of product differentiation remains constant. We will continue to put the teacher at the heart of our
products and creates highly engaging student experiences. That has been our source of difference from the very beginning
and holds true today.
We will also better link our products to the home, helping parents and caregivers support student growth. This new focus
will be supported by our intent to leverage our Mathletics and Readiwriter products to build out a strong B2C product portfolio
which will be sold through our renovated B2C customer experience. We will also increase cross-sell and up-sell
opportunities from within the product, making our products a sales channel and open the door for customers to trial and
purchase our entire suite autonomously.
Through our expanded product portfolio we will increase our installed base and revenue per customer.
Accelerate profitable sales growth in the Americas
We have reset our sales and marketing model, adapted our product to better suit the North American market, expanded
the product offering and hired an experienced US sales team. With a total addressable market of over 60 million students
in K-12 in North America and high rates of technology adoption, we are poised to continue the strong sales growth we
delivered in the latter part of FY2019.
3
Enhance the customer experience and improve retention
Retaining customers is more cost effective and profitable than acquiring new customers and to improve our retention rates
we’ll launch a range of improvements across every step of the customer life cycle. We will reposition our brand and our
digital assets to drive more meaningful customer engagement. Like other successful SaaS brands, our marketing focus will
be across each phase of the funnel. At the top of the funnel we will position the 3P Learning brand as an educational thought
leader and create a digital community where educators across the globe can connect with one another, including with our
own Education Team. We will nurture those interactions via digital channels and use internal salespeople, culminating in a
product sale at the bottom of the funnel. With our expanded product portfolio we’ll have even more opportunity to engage
with prospective and existing customers.
In summary, our ‘20:22 accelerate growth plan’ will be driven by product and customer expansion, accelerated profitable
sales growth in the Americas as well as an enhanced customer experience and retention. Underpinning all of this will be
our continued emphasis on our people and the 3P culture.
Continue to build a growth focussed, high performance culture
We have developed our people internally through investment in learning and development and brought in new talent in
critical areas such as digital, data and analytics, sales and product innovation. Coupled with that, every employee now has
some of their remuneration tied to company performance, with a focus on revenue growth. The team at 3P Learning are
ready and capable to lead our next phase of accelerated growth.
Thank you
Once again, we both want to say a heartfelt thank you to the extraordinary team at 3P Learning, each of whom has
contributed to the success, not only of our Company during the past 3 years, but also to help children all over the world
achieve their own potential. Our colleagues on the Board have provided exceptional support and leadership during this year
and we are more than grateful to them.
Finally, we are deeply appreciative of the support from our shareholders, schools, teachers, education administrators,
parents and students who place their confidence in 3P Learning.
Thank you.
Yours sincerely,
Samuel Weiss
Chairman
Rebekah O’Flaherty
CEO and Managing Director
4
3P Learning Limited
Directors’ report
30 June 2019
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'Group')
consisting of 3P Learning Limited (referred to hereafter as the 'Company' or 'parent entity') and the entities it controlled at the end of, or
during, the year ended 30 June 2019.
Directors
The following persons were directors of 3P Learning Limited during the whole of the financial year and up to the date of this report, unless
otherwise stated:
Samuel Weiss (Chairman)
Rebekah O’Flaherty (Chief Executive Officer)
Roger Amos
Claire Hatton
Mark Lamont
Principal activities
During the financial year the principal continuing activities of the Group consisted of developing, sales and marketing of online educational
programs to schools and parents of school-aged students. There was no significant change in the nature of these activities during the
year.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Operating and financial review
Business overview
The Group is a global leader in online education and adaptive and collaborative learning. Our suite of mathematics, literacy and science
products are designed to facilitate dynamic and engaging learning experiences for educator and learner alike to address the complex
challenges faced by teachers and students in the modern classroom. We engage with teachers to develop innovative products that
intuitively mirror the teacher’s workflow and day.
We have over 250 educators, engineers, product designers and other personnel around the world, servicing schools in more than 100
countries. Today we are trusted by 4.6 million students in over 17,400 schools across the world. Our mission is to create the teaching
moment that inspire learning.
Financial review
The profit for the Group after providing for income tax and non-controlling interest amounted to $5,911,000 (30 June 2018: loss
$18,688,000).
5
3P Learning Limited
Directors’ report
30 June 2019
A reconciliation of adjusted earnings before interest, tax, depreciation and amortisation ('Adjusted EDITDA') to statutory profit after tax for
the year is as follows:
Profit/(loss) attributable to owners of 3P Learning Limited
Non-controlling interest
Net profit/(loss) after income tax expense for the year
Non-cash loss on disposal of investments
Reduction in the United States of America tax rate
Underlying profit after income tax expense*
Income tax expense
Underlying profit before income tax expense**
Depreciation and amortisation expense
Interest income
Finance costs
Underlying core EBITDA***
Share of profits of associates
Adjusted EBITDA****
Consolidated
2019
$'000
2018
$'000
5,911
(18,688)
-
5
5,911
(18,683)
-
-
5,911
2,834
25,259
489
7,065
3,621
8,745
10,686
9,131
(267)
138
8,285
(23)
624
17,747
-
19,572
(567)
17,747
19,005
*
**
Underlying profit after income tax expense represents reported profit after income tax expense of the Group, excluding restructuring
costs, impairment expense, non-cash loss on disposal of investments and the tax impact of these items.
Underlying profit before income tax expense represents reported profit before income tax expense of the Group excluding
restructuring costs, impairment expenses and non-cash loss on disposal of investments.
*** Underlying core EBITDA represents earnings before interest, tax, depreciation and amortisation, excluding restructuring costs,
impairment expense and non-cash loss on disposal of investments.
**** Adjusted EBITDA represents earnings before interest, tax, depreciation and amortisation, excluding restructuring costs, impairment
expense, non-cash loss on disposal of investments and share of profit of associates.
The directors have provided adjusted EBITDA, underlying core EBITDA, underlying profit before income tax expense and underlying profit
after income tax expense (‘Underlying Information’) after careful consideration of the requirements and guidelines contained in ASIC’s
Regulatory Guide 230 Disclosing non-IFRS financial information. Underlying information, including this reconciliation to net profit after
income tax expense, has been provided in order to meet the demands from users of the financial reports for information to better
understand aspects of the Group’s performance. The directors believe that underlying profit after income tax expense is the most
appropriate measure of the maintainable earnings of the Group and thereby best reflects the core drivers of, and ongoing influences upon,
those earnings. For this reason, the impact of restructuring costs, one-off non-cash losses and one-off non-cash expenses are excluded
from the measurement of underlying profit after income tax expense.
Revenue
Total revenue for the year ended 30 June 2019 was $54,415,000 (30 June 2018: $55,367,000). The decrease was largely due to the
challenging economic conditions experienced because of Brexit in the EMEA segment and lower copyright fees received in APAC segment.
6
3P Learning Limited
Directors’ report
30 June 2019
Performance
The profit for the Group after providing for income tax and non-controlling interest amounted to $5,911,000 (30 June 2018: loss
$18,688,000).
Depreciation and amortisation expenses in the current year increased by $846,000 to $9,131,000. This increase was the result of the
accumulation of capitalised product development and higher capitalisation of customer contracts.
At 30 June 2019 the Group has $25,766,000 of cash and no debt. Surplus cash balances are put on term deposit with the Group’s bankers
to maximise interest income. Interest income in the current year was $267,000 compared to $23,000 for the previous year. The Group also
has a $10,000,000 working capital facility available with its bankers, which was undrawn at 30 June 2019.
In the prior year, a non-cash loss on disposal of investments of $25,259,000 was recorded on the sale of Learnosity Holdings Limited.
Segment Review
Segment review for the year is as follows:
APAC
Americas
EMEA
Total Revenue
Change
$'000
Change
%
2019
$'000
33,668
8,585
12,162
2018
$'000
34,361
7,996
13,010
54,415
55,367
(952)
(693)
589
(848)
(712)
(445)
(101)
(2.0)
7.4
(6.5)
(1.7)
(4.1)
24.3
(3.0)
(6.6)
Change
$'000
Change
%
Segment adjusted EBITDA (excluding share of profits of Associates) is as follows:
APAC
Americas
EMEA
2019
$'000
16,808
(2,273)
3,212
2018
$'000
17,520
(1,828)
3,313
Total Adjusted EBITDA
17,747
19,005
(1,258)
APAC segment
Revenue and other income in APAC has declined by $693,000 due to lower copyright licence fees and sponsorship revenue. Adjusted
EBITDA declined by $712,000 also due to the lower copyright licence fees and sponsorship revenue.
Americas segment
Revenue in Americas grew 7.4% to $8,585,000 driven by licence growth of 9.6% and favourable foreign exchange movements. Adjusted
EBITDA has declined by $445,000 due to an increase in sales staff and unfavourable foreign exchange movements.
EMEA segment
EMEA revenue has decreased by 6.5% as a result of continued political and economic challenges because of Brexit. Adjusted EBITDA
decreased 3.0% to $3,212,000 due to a reduction of non-revenue generating staff costs.
The Group has net assets of $24,624,000 (30 June 2018: $19,008,000) which have increased from the previous year due to the profit
for the year.
7
3P Learning Limited
Directors’ report
30 June 2019
Material Business Risks
The risk associated with the market in which the Group operates requires management to continually focus on product innovation and
change to keep pace with competitors and new entrants to the market who may develop new technologies that could impact the Group’s
performance. The Group invested $8,977,000 (30 June 2018: $9,716,000) in product development and software and this level of
investment is expected to continue in order to ensure the Group’s products remain in demand.
The material business risks faced by the Group that are likely to have an effect on the financial prospects of the Group are outlined below:
Competition risks: The Group operates in a highly competitive industry and there are a large number of online education participants
targeting the school K-12 segment, many with significant resources and access to capital.
Product risks: The Group has distribution rights to products owned by Blake ELearning Pty Limited (Reading Eggs, Reading Eggspress,
Wordflyers or Mathseeds) but does not own the intellectual property rights to them; however the contractual distribution rights enjoyed
by the Group do not expire.
Technology risks: The Group’s technology platforms and systems might be disrupted by new technologies or become obsolete, which
could affect the Group’s reputation, ability to generate income and financial performance.
Privacy and Data Security risks: As a technology-focused education business, compliance with privacy and data security legislation
relating to managing information security and safeguarding customer and student data is a complex and resource-hungry process.
Revenue risk: The global school K-12 market is driven by schools’ ability to fund the purchase of education technology for their students.
A significant decline in school funding in any market could result in reduced demand for the Group’s products.
Exchange rate risk: Volatility in exchange rates can impact the Group’s ability to maintain or grow margins. However, to a significant
extent the Group’s business currently enjoys natural hedges: the revenue that the Group obtains in a particular foreign currency closely
matches the expenses it incurs in that currency (such as the British pound). The Board believes that natural hedges presently mitigate
any exchange rate volatility risk for the Group to an economically acceptable level.
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
No matter or circumstance has arisen since 30 June 2019 that has significantly affected, or may significantly affect the Group’s operations,
the results of those operations, or the Group’s state of affairs in future financial years.
Likely developments and expected results of operations
The Group’s growth is expected to be supported by the continuing trend of more schools, teachers, parents and students seeking more
engaging and interactive online learning resources with proven pedagogical efficacy.
The Group expects to continue to focus its product development and distribution efforts on the core areas of mathematics, literacy and
science online education. The Group also expects to continue to invest in its scalable internal sales, marketing and operational systems
support its growth in both existing and new territories.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
8
3P Learning Limited
Directors’ report
30 June 2019
Information on directors
Name:
Samuel Weiss
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Independent Non-Executive Chairperson
AB, MS, FAICD
Significant experience as a Senior Executive and as a Non-Executive Director in education,
technology and consumer products companies in Australia, North America, Europe and Asia.
Chairman of Altium Limited (ASX: ALU) - Director since January 2007 and Non-Executive
Director of Citadel Group Limited (ASX: CGL) - since 15 May 2019.
Former directorships (last 3 years): Chairman of Ensogo Limited (ASX: E88) - Director from December 2013 to October 2016 and
Special responsibilities:
Interests in shares:
Surfstitch Group Limited (ASX: SRF) - from July 2016 to August 2017.
Member of the People and Culture Committee and Member of the Audit and Risk Committee
562,277 ordinary shares
Name:
Rebekah O’Flaherty
Title:
Qualifications:
Experience and expertise:
Chief Executive Officer
B.Ec., MBA, GAICD
Extensive experience in technology, digital, product development, sales, marketing and
distribution across Asia Pacific, Europe and United States gained over 12 years with Hewlett
Packard, Telstra and most recently Origin Energy.
None
Other current directorships:
Former directorships (last 3 years): None
None
Special responsibilities:
12,000 ordinary shares
Interests in shares:
7,527,575 options
Interests in options:
500,000 performance rights
Interests in rights:
Name:
Roger Amos
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Independent Non-Executive Director
FCA, FAICD
Over 35 years of experience in finance, business and accounting. Previously a partner at the
international accounting firm KPMG for 25 years.
Non-Executive Director of REA Group Limited (ASX: REA) - since July 2006, Non-Executive
Director of HT&E Limited (ASX: HT1) – since 30 November 2018 and Chairman of Contango Asset
Management Limited (ASX: CGA) - Director since November 2017.
Former directorships (last 3 years): Deputy Chairman of Enero Group Limited (ASX: EGG) - Director from November 2008 to October
Special responsibilities:
Interests in shares:
2018.
Chairman of the Audit and Risk Committee and Member of the People and Culture Committee
61,743 ordinary shares
Name:
Claire Hatton
Title:
Qualifications:
Experience and expertise:
Independent Non-Executive Director
BSc, MBA, GAICD
Over 20 years of global experience in strategy, sales, marketing and operations.
Significant experience in the digital and technology market. Previously held senior roles at Google,
Travelport and Zuji.com.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Chair of the People and Culture Committee and Member of the Audit and Risk Committee
31,000 ordinary shares
9
3P Learning Limited
Directors’ report
30 June 2019
Name:
Mark Lamont
Title:
Qualifications:
Experience and expertise:
Independent Non-Executive Director
BA., Dip Ed
Deep experience in the global education and EdTech sectors with particular expertise in technology
and internet applications for education, international markets and strategic planning. Previously held
roles with myinternet Ltd and Follett Corporation.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Member of the Audit and Risk Committee and Member of the People and Culture Committee
None
‘Other current directorships’ quoted above are current directorships for listed entities only and excludes directorships of all other types of
entities, unless otherwise stated.
‘Former directorships (last 3 years)’ quoted above are directorships held in the last 3 years for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
Company secretary
Ms. Marta Kielich (B.Com, LLB, AAICD, FGIA) was appointed as company secretary on 8 December 2017. Marta joined the Group in
November 2016 and has over 10 years’ experience in legal, regulatory and company secretariat roles in ASX listed companies, including
with Origin Energy and the Australian Securities Exchange.
Meetings of directors
The number of meetings of the Company’s Board of Directors (‘the Board’) and of each Board committee held during the year ended 30
June 2019, and the number of meetings attended by each director were:
Full Board
People and Culture
Committee*
Attended
Held
Attended
Held
Audit and Risk Committee
Held
Attended
Samuel Weiss
Rebekah O’Flaherty**
Roger Amos
Claire Hatton
Mark Lamont
9
9
9
9
9
9
9
9
9
9
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
Held: represents the number of meetings held during the time the director held office or was a member of the relevant committee.
*
**
Previously the Nomination and Remuneration Committee
Rebekah O’Flaherty attended the People and Culture Committee and Audit and Risk Committee meetings as an observer.
The Board held nine scheduled meetings, including a two-day strategic review meeting. There were five scheduled Audit and Risk
Committee meetings including a risk workshop.
10
3P Learning Limited
Directors’ report
30 June 2019
Shares under option
Unissued ordinary shares of 3P Learning Limited under option at the date of this report are as follows:
Grant date
Expiry date
Exercise price
02/09/2016
21/11/2016
31/08/2017
09/11/2017
23/08/2018
09/11/2018
19/11/2018
Total
02/09/2020
02/09/2020
31/08/2021
31/08/2021
23/08/2022
23/08/2022
23/08/2022
$1.26
$1.26
$1.42
$1.42
$1.75
$1.75
$1.75
Number
under
option
1,052,587
2,015,419
1,381,140
2,644,509
1,398,858
2,867,647
710,717
12,070,877
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the Company or
of any other body corporate.
Shares under performance rights
Unissued ordinary shares of 3P Learning Limited under performance rights at the date of this report are as follows:
Grant date
Expiry date
Exercise price
Number under rights
21/11/2016
21/11/2016
Total
01/09/2019
14/10/2019
$0.00
$0.00
100,000
400,000
500,000
No person entitled to exercise the performance rights had or has any right by virtue of the performance right to participate in any share
issue of the Company or of any other body corporate.
Shares issued on the exercise of options
There were no ordinary shares of 3P Learning Limited issued on the exercise of options during the year ended 30 June 2019 and up to
the date of this report.
Shares issued on the exercise of performance rights
There were no ordinary shares of 3P Learning Limited issued on the exercise of performance rights during the year ended 30 June 2019
and up to the date of this report.
Indemnity and insurance of officers
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a director or executive,
for which they may be held personally liable, except where there is a lack of good faith. During the financial year, the Company paid a
premium in respect of a contract to insure the directors and executives of the Company against a liability to the extent permitted by the
Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
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3P Learning Limited
Directors' report
30 June 2019
Indemnity and insurance of auditor
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of its audit engagement
agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify
Ernst & Young during the financial year and up to the date of this report.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the
Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the
Company for all or part of those proceedings.
Non-audit services
Details of the amounts paid or payable of $19,055 to the auditor for non-audit services provided during the financial year by the auditor
are outlined in note 25 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another person or firm
on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 25 to the financial statements do not compromise the external
auditor's independence requirements of the Corporations Act 2001 for the following reasons:
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the
auditor's own work, acting in a management or decision-making capacity for the Company, acting as advocate for the Company or jointly
sharing economic risks and rewards.
Officers of the Company who are former partners of Ernst & Young
There are no officers of the Company who are former partners of Ernst & Young.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments
Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to
the nearest thousand dollars, or in certain cases, the nearest dollar.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after
this directors' report.
Auditor
Ernst & Young continues in office in accordance with section 327 of the Corporations Act 2001.
12
3P Learning Limited
Directors' report
30 June 2019
Letter from the Chair of the People and Culture Committee
Dear Fellow Shareholder
On behalf of the Board, I am pleased to present our Remuneration Report for FY19. The scope of our role as a Board Committee is far
broader than Remuneration and Nominations and in recognition of that, we changed our name to the People & Culture Committee in
June 2019. As the People & Culture Committee, our focus is to ensure that our remuneration structure and our culture supports 3P
Learning’s business as it evolves globally, and that it appropriately recognises the critical role our people play in 3P Learning’s long-term
success.
We are proud of the progress we’ve made in building a strong foundation for our people with well communicated values and behaviours,
a clear leadership capability framework, global consistency and equity across our HR systems, benefits and processes and investment
in career development and tools. Our involvement in the “Great Place to Work” survey in prior years and now “Culture Amp”, which
facilitates real time and regular feedback insights from our employees, helped us understand what to prioritise and has given us a good
benchmark in order to work from.
In FY18 we refreshed our values and throughout FY19 we brought them to life through our “3Pea” mascots and global staff workshops.
Our values are at the heart of our culture, drive how we work and underpin our desire to maintain our fun and friendly culture with an
emphasis on becoming more agile and innovative for our customers. They are now embedded in our recruitment practices, onboarding,
employee and leadership development, employee recognition program, communication model and day to day practices in teams.
Our values are:
•
Love Learning - Learning every day is in our DNA! We are relentlessly curious and look for ways to learn in everything we do,
even when things don’t go as planned!
• Move Mountains - We are a tenacious and resilient bunch, we never give up but we also want to keep raising the bar for
ourselves, we aim to be unstoppable and to achieve amazing things.
• One Pod - We are one team. One global village. We count on each other. We are one pod.
•
See the Unseen - Creativity and innovation is at the heart of everything we do. We are open to new ideas (big and small) and
are always thinking about how we can be, and do, better.
Our People Priorities
With a focus on growth for FY20-22 we will accelerate our investment in our people, people technology stack as well as leveraging the
investments we’ve made in the foundations of our business over the last three years. From a people perspective we have three priorities
that will underpin our ability for our team to deliver on our strategy to “accelerate growth and position 3P Learning as a global SaaS brand
in collaborative and adaptive teaching and learning”. They are:
•
•
•
Accelerate our focus on a high performance, high energy culture driving both pace and successful strategy delivery
Invest in capability building for our team
Create a unique and compelling employee experience that attracts and retains great talent and powers productivity.
We have a number of investments planned this year to move these priorities forward which include the implementation of a new Learning
Management System to power our “3PYou” Learning & Development portal, evolving our agile performance management process to
leverage customer and employee feedback channels and to move to a more dynamic engagement and analytics partner with “Culture
Amp”.
Key People Changes
In November 2018, Jonathan Kenny our Chief Financial Officer left 3P Learning. As a consequence, his long term incentive share options
were forfeited. In November 2018 Simon Yeandle took over as Chief Financial Officer. Simon’s full remuneration details are outlined in
the Remuneration Report. He will be eligible to receive an annual short term incentive (STI) with a target STI of 35% of his fixed annual
remuneration, and a long term incentive package which may entitle him to receive an equity based award under the long term incentive
(LTI) plan with an ‘at target’ value equivalent to 35% of his fixed annual remuneration.
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Remuneration
We believe that 3P Learning’s remuneration approach provides good alignment between business objectives, shareholder returns and
executive remuneration which motivates and retains talented executives. We are, however, cognisant that aspects of our remuneration
strategy need to evolve as we increase our focus on growth and future ready technology and product innovation. In light of how critical it
is for the company to demonstrate it can grow after the work that we’ve done on our last three year strategic plan, your Board has changed
the short term incentive plan (STI) for Executives to place greater emphasis on revenue growth. We will achieve this by moving to a 70%
revenue : 30% EBITDA hurdle (to date the weighting has been 50% revenue : 50% EBITDA). Both hurdles are independent and will
stretch executives to achieve double digit revenue growth for FY20 and increase EBITDA.
We will continue the company-wide short term incentive for all employees that we implemented in FY18 (which means all employees
now have a portion of their remuneration linked to company performance).
Our Long Term Incentive Plan (LTI) will remain the same as in FY19 (as detailed in the Remuneration Report), however the vehicle will
change from share options to share rights. As we set out last year, your Board believes that the best way to align our Leadership Team
with the expectations of shareholders for capital appreciation is to create an “owner operator” culture with significant share incentives for
outstanding performance and long term commitment to the Company, hence our move from options to rights. We will continue to explore
alternatives that may better support 3P Learning as the business develops. We value feedback from all of our stakeholders.
The outcome of LTI option grants made in FY17, tested against performance hurdles based on our FY19 full year financial results, are
detailed in the Remuneration Report.
Diversity and Inclusion
Diversity and inclusion are central to who we are at 3P Learning. In 2017 the Board set an aggressive target of 50% gender diversity at
a Board and senior leadership team level as well as in aggregate across the organisation globally. At an aggregated level women
comprised 53% of our employees globally as at 30 June 2019. At a senior leadership team level 29% were female as at 30 June 2019
which is behind our target. We are actively trying to address this by asking our Executive Search firms to bring us female candidates for
our leadership roles, assessing our pipeline of internal female talent and regularly questioning ourselves and our teams on whether we
can do better, while not reducing the quality of our hires and promotions. We have carried out a pay equity review to ensure there is no
inherent bias in our rewards system.
As noted earlier, this year we partnered with “Culture Amp”, a global software company, which facilitates real time and regular feedback
insights from our employees. These insights will now underpin our employee engagement and experience roadmap, and the analytics,
that will build over time, will enable a much more robust approach to measuring and tracking employee engagement.
3P Learning’s business performance and future is underpinned by its people. As we move into a new three year strategy where growth
is our focus, our people become even more critical than they have been in the past. Your Board believes in a plan to invest in the areas
that will make a difference now and into the future. We are constantly reviewing our approach at 3P Learning and I welcome your feedback
so we can continue to evolve our remuneration and governance framework.
We thank you for your continued support of 3P Learning.
Yours sincerely
___________________________
Claire Hatton
Chair of the People and Culture Committee
22 August 2019
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Remuneration report (audited)
This remuneration report outlines the remuneration arrangements and outcomes for the key management personnel (‘KMP’) for the
financial year ended 30 June 2019 (‘FY19’). It has been prepared and audited against the disclosure requirements of the Corporations
Act 2001 and its Regulations.
The remuneration report is presented under the following headings:
•
Letter from the Chair of the People and Culture Committee (not audited)
•
People covered by the Remuneration Report
• Overview of 3P Learning remuneration policy
•
•
•
•
•
Details of senior executive remuneration structure
Non-executive directors’ remuneration
Service agreements
Share-based compensation
Additional disclosure relating to key management personnel.
People covered by the Remuneration Report
The KMP of the Group are those persons having authority and responsibility for planning, directing and controlling the activities of the
Group, directly or indirectly, including all directors, whether executive or non-executive. The people listed in the table below are the
individuals who have been determined to be KMP during the financial year.
Name
Position
Term as KMP
Non-Executive Directors (NEDs)
Samuel Weiss
Roger Amos
Claire Hatton
Mark Lamont
Executive Director
Independent Chairman
Independent Director
Independent Director
Independent Director
Rebekah O’Flaherty
Chief Executive Officer
Full year
Full year
Full year
Full year
Full year
Other KMP
Jonathan Kenny
Simon Yeandle
Chief Financial Officer (former executive)
Until 30 November 2018
Chief Financial Officer (newly appointed)
From 19 November 2018
Although the focus of the report is on the remuneration arrangements and outcomes for the KMP listed in the table above, this report
also outlines information about the remuneration policy and arrangements for the Group’s senior executive team more broadly.
The term ‘Executive KMP’ is a reference to the Executive Director plus Other KMP. The term ‘senior executives’ is a collective reference
to Executive KMP plus non-KMP members of the senior executive team.
Overview of 3P Learning remuneration policy
The People and Culture Committee (‘P&CC’) (previously the Nomination and Remuneration Committee) is responsible to develop, review,
make recommendations and provide assistance and advice to, the Board on the remuneration arrangements for the Company’s directors
and senior executives and in relation to key employment policies and practices. The performance of the Group depends on the quality of
its directors and senior executives. The Company’s remuneration philosophy is to attract, motivate and retain high performance and high
quality personnel.
The Group's senior executive reward framework is based on objectives to:
•
•
•
drive growth and profitability;
align senior executive rewards with achievement of strategic objectives and the delivery of shareholder value; and
provide competitive remuneration packages that recognise both individual and organisational performance.
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The remuneration framework, and any potential changes to that framework, are assessed based on the following guiding principles:
aligned to long term value creation
fair for all stakeholders
simple to understand and administer
•
•
•
• motivating to executives
•
explicitly encourage more executive ownership of the Company.
The P&CC and the Board have structured a senior executive remuneration framework that is market competitive, is designed to retain
and motivate the Company’s leadership team and sets a standard for transparency and good corporate governance.
The determination of non-executive director and executive remuneration is separate.
During the reporting period the P&CC engaged external advisors to provide insights on market practice for incentives structures and
alternate equity vehicles as well as structuring options for equity grants to non-KMP levels of management (i.e. separate to the LTI plan
used to incentivised executive level management, including KMP). The Group did not seek or receive any remuneration recommendations
within the definition of the Corporations Act.
FY19 Executive remuneration policy and structure and key changes for FY20
The senior executive remuneration structure has three key components stated below, including what the Board has agreed is the optimal
mix between fixed and ‘at risk’ components for the Chief Executive Officer and senior executives. Details for each of the individual
components in FY19, and changes implemented for FY20 are as follows:
Fixed
Variable or “At Risk” performance based
Year
Fixed remuneration
Attracts and retains high performance
talent
Short term incentive (‘STI’)
Rewards current year performance
Long term incentive (‘LTI’)
Rewards longer term sustainable
performance
FY19
•
•
Fixed salary set by reference to
appropriate benchmark
information and experience of
individuals
Includes superannuation and
salary-sacrifice non-monetary
benefits
•
•
•
•
25 - 50% of fixed remuneration
Annual cash incentive
12 month period
Targets linked to group
performance:
-
-
revenue (50%);
core underlying EBITDA (50%)
25 - 50% of fixed remuneration
•
• Grant of options
•
•
3 year performance period
Performance hurdles linked to
group performance:
revenue (50%);
-
EPS growth (50%)
-
FY20
•
No change to policy and
structure
Increased focus on revenue growth
•
• Weighting of group performance
targets changed to:
revenue (70%);
-
core underlying EBITDA (30%)
-
•
Encourage greater executive
ownership of the Company
• Grants of performance rights
(rather than options)
Executive remuneration
Fixed remuneration
The objective of fixed remuneration is to provide a base level of compensation appropriate to the senior executive’s role, responsibilities
and experience. Fixed remuneration is determined with reference to available market data including benchmarks, the scope of the role
and the qualifications and experience of the individual. Fixed remuneration includes base salary, non-monetary benefits, superannuation
and other statutory components such as long service leave.
Fixed remuneration is reviewed annually by the P&CC, based on individual and business unit performance, the overall performance of
the Group, and comparable market remuneration. Superannuation in excess of the concessional contribution cap is provided as cash
salary.
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Senior executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle benefits)
when it does not create any additional costs for the Group and provides additional value to the executive.
The fixed remuneration for the Chief Executive Officer is reviewed annually by the P&CC, with changes to be approved by the Board,
following consideration of her performance against her annual KPIs.
Performance based remuneration
The ‘at risk’ performance based remuneration components for senior executives align reward with the achievement of annual and longer
term objectives of the Group, and the optimisation of shareholder value over the short and long term.
The performance based components comprise a STI plan and a LTI plan, each of which is designed to link to key elements of the Group
business plan and strategy. Further information about the performance measures for the STI and LTI plan can be found in subsequent
sections of this remuneration report.
The table below shows the Group’s performance history, the Company’s share price and the effect on shareholder value since the IPO
in 2014.
Financial Year
2014
2015
2016
2017
2018
2019
Revenue ($m)
Underlying core EBITDA ($m)
EPS (cents)
Share Price ($) 30 June**
36.1
13.0
4.03
-
44.2
16.9
3.04
2.22
49.3
13.3
2.66
0.74
52.5
16.0
(5.11)
1.05
55.4
19.0
(13.42)
1.25
54.4
17.7*
4.24
0.98
* In this reporting period the result is the same as Statutory EBITDA
** The Company listed on the Australian Securities Exchange on 9 July 2014
Executive remuneration
Details of statutory remuneration (Australian Accounting Standards (‘AAS’)) for Executive KMP, for the years ended 30 June 2019 and
30 June 2018, are set out below:
Post
employment
benefits
(super-
annuation)
Accounting
value of LTI
awards and
additional
incentives**
Salary Cash STI*
Termination
payments***
Total
remuneration
Performance
related
Equity
based
$
$
$
$
$
$
%
%
R O’Flaherty (Chief Executive Officer)
2019
2018
625,000
220,312
585,000
331,168
25,000
25,000
(6,546)
83,888
S Yeandle (Chief Financial Officer)#
2019
2018
220,514
54,412
12,659
68,810
-
-
-
-
-
-
-
-
J Kenny (former Chief Financial Officer)#
2019
2018
113,787
-
8,798
(103,229)
18,367
363,000
210,644
25,000
89,235
-
37,723
687,879
17
863,766
1,025,056
25%
40%
-
8%
356,395
35%
19%
-
-
-
-
0%
44%
13%
3P Learning Limited
Directors' report
30 June 2019
# Jonathan Kenny ceased to be a member of the KMP effective 30 November 2018. Simon Yeandle became a member of the KMP,
effective 19 November 2018.
*Cash STI is physically paid after the end of the financial year to which it relates but is allocated to the earning year.
**LTI is that portion of the accounting value of LTI equity granted or to be granted for the current and prior periods attributable to the
reporting period and reflects the expected vesting outcome. The cumulative charge to profit or loss is calculated based on the grant date
fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period.
** Further information about Jonathan Kenny’s incentives are detailed in the sections entitled ‘Long term incentives’ and ‘Additional
Incentives’ below. Jonathan Kenny ceased to be a member of the KMP on 30 November 2018 and forfeited his LTI awards (options).
Any share-based payment expense previously recognised under AASB 2 in respect of the options has been reversed.
*** Jonathan’s termination payment reflects unused annual leave balances.
In line with general market practice a (non-AAS) presentation of pay with respect to the reporting period is provided below, to give
shareholders a more informative picture of actual remuneration outcomes.
Post
employment
benefits
(super-
annuation)
LTI and
additional
incentives
vested**
Salary Cash STI*
Termination
payments
Total
remuneration
$
$
$
R O’Flaherty (Chief Executive Officer)
2019
2018
625,000
220,312
585,000
331,168
25,000
25,000
S Yeandle (Chief Financial Officer)
220,514
54,412
12,659
-
-
J Kenny (former Chief Financial Officer)
-
-
2019
2018
2019
2018
$
-
-
$
-
-
-
-
$
870,312
941,168
287,585
-
265,952
704,644
113,787
8,798
125,000**
18,367***
363,000
210,644
25,000
106,000**
-
* Cash STI is physically paid after the end of the financial year to which it relates but is allocated to the earning year.
** Further information about Jonathan Kenny’s incentives are detailed in the sections entitled ‘Long term incentives’ and ‘Additional
Incentives’ below. The cash basis values these share-based payments as the market value of the shares on the relevant vesting date.
No LTI awards vested in FY19 or FY18. When Jonathan ceased to be a member of KMP he forfeited all outstanding and unvested LTI
options.
*** Jonathan’s termination payment reflects unused annual leave balances.
Short term incentives
What is the STI and who participates?
The remuneration of the Group’s senior executives is linked to the Company’s short term annual performance through a cash based STI.
The Group STI program is designed to deliver sustainable performance and continued growth by retaining talent and rewarding
performance. The key objectives of the STI program are to:
•
•
•
•
•
•
•
drive and reward outstanding performance against annual strategic financial and operational performance objectives
promote effective management of capital, in the short, medium and long term
position the Company to over achieve in future years
emphasise and reward team and Company performance outcomes
provide competitive and motivating reward opportunities
create a clear and transparent link between performance and rewards with minimum subjectivity
be simple to administer and easily understood.
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What are the performance measures?
Financial performance measures are set for senior executives based on profit and revenue targets. These targets are in turn derived
from the Company’s business plan and budget as the Board considers this to be the best way to ensure the aims of the business plan
and budget are met. Currently, the Company’s STI Plan does not include non-financial performance objectives. The performance
measures are as follows:
Performance measure
Weighting (FY19) Weighting (FY20)
Revenue
Underlying core EBITDA
50%
50%
70%
30%
Why were these performance measures chosen?
The Board considers the financial measures to be appropriate as they are aligned with the Group’s objective of delivering profitable
growth and improved shareholder returns. For FY20, the weighting of the performance measures has been adjusted to align with our
strategy focused on acceleration of revenue growth.
What is the amount senior executives can earn?
Financial measure – level of performance
% of target incentive award*
Below Threshold (i.e. <95% of Target)
At Threshold (95% of Target)
Target
Above Target (i.e. > 100% of Target)
* Pro-rata payment made between these points
0%
50%
100%
Up to 160%
When are the performance conditions tested?
Performance conditions are tested and incentive payments under the STI plan are determined after the approval and release of the
Company’s full year results in August.
STI for the 2019 financial year
The target STI opportunity for the financial year ended 30 June 2019 was an amount equal to 25%-50% of the senior executive’s fixed
remuneration (50% in the case of the Chief Executive Officer).
There were four senior executive participants in the STI program for FY19 (the CEO and three other C-level senior executives) and a
total of $426,223 will be paid to those senior executives as STI awards relevant to the FY19 period. Payment will be made after the
release of the financial results for FY19. Specific information relating to the STI payable to the Chief Executive Officer and Chief Financial
Officer for FY19 is set out below:
Executive KMP
Actual STI payment % of target STI payable
Chief Executive Officer
Chief Financial Officer
$220,312
$54,412
71%
71%
These payments are based on the following STI metrics for FY19:
Performance measure
FY19 – at target
FY19 performance
% of target
incentive award*
Weighting
Revenue
Underlying core EBITDA
$57,000,000
$18,000,000
$54,415,000
$17,747,000
55%
86%
50%
50%
*Based on the metrics outlined under “What is the amount senior executives can earn?” on the previous page and pro-rated for that
portion of the reporting period that the relevant executive was employed.
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Long term incentives
The objective of the LTI plan is to link the long term reward for senior executives with the creation of shareholder value through the
allocation of equity awards which are subject to specific performance conditions.
What are the objectives of the LTI?
The key objectives of the LTI program are to:
•
•
•
•
•
align executive performance with shareholder return
drive and reward outstanding performance against three year strategic financial and operational performance objectives
emphasise and reward senior executives for long term Company performance outcomes
provide competitive reward opportunities that motivate participants
create a clear and transparent link between long term performance and rewards with minimum subjectivity.
Who are the participants of the LTI?
The Chief Executive Officer and other C-level senior executives are eligible to participate in the LTI plan. As at 30 June 2019, there were
4 participants in the plan.
What are the performance measures?
Financial performance measures are set for grants of securities to senior executives. To date, all grants of securities under the LTI plan
have performance conditions based on revenue and EPS targets. The Board considers the combination of revenue and EPS hurdles an
appropriate balance to ensure that ‘top line’ growth is pursued over the medium to long term, whilst growth in earnings and a focus on
shareholder value is maintained. In particular, the revenue hurdle has been adopted in light of the Group’s desire to accelerate growth to
achieve national and international expansion. The Board has selected EPS as a performance measure because it provides a relevant
indicator of shareholder value and provides a clear target to drive and motivate senior executive performance.
Performance measure
Weighting
Revenue
EPS
50%
50%
The financial hurdles are independent of each other. One can be achieved without the other hitting threshold.
What is the amount that senior executives can earn?
Participants under the LTI plan can earn an ‘at target’ amount equal to a percentage of their annual fixed remuneration in the range of
25% - 50%. To date, awards under the plan have taken the form of options. The number of options awarded depends on the fair value
of an option at the time of the award. The number of performance rights that will be issued to each participant with respect to FY20 LTI
grants, will be calculated by dividing the ‘at target’ amount by the value of each right.
Performance level
% of target incentive
awarded
Below threshold
Threshold
Target
Stretch
0%
80%
100%
150%
What are the key terms of the award?
Awards may take the form of performance rights or options. An option represents a conditional right to acquire one share in the Company
on exercise by payment of an exercise price. A performance right represents the conditional contractual right to be allocated one share
in the Company at no cost. Options and performance rights do not carry a right to vote or to dividends.
Grants are made in August or September of each year, following finalisation of the 30 June financial statements, are subject to pre-
defined performance conditions and have a 3 year vesting (performance) period. Any awards which do not meet the performance
conditions at the end of the performance period will lapse.
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Cessation of employment, change of control and clawback
Awards may lapse in the event that the relevant performance conditions are not met. In addition, if the relevant employee resigns or is
dismissed, all unvested awards are forfeited. If an employee leaves for any other reason the Board may determine the number of awards
which will lapse or be retained. Awards may also be forfeited if a ‘claw back’ event occurs during the performance period. A claw back
event includes circumstances where a senior executive has engaged in fraud, dishonesty or gross misconduct, where the financial results
that led to the equity award are subsequently shown to be materially misstated, or where the behaviour of a senior executive brings the
Company into disrepute or impacts the Company’s long term financial strength. If a change of control event occurs, the Board has
discretion to determine whether the awards will vest or lapse.
2019 LTI Award (equity granted during the reporting period)
Awards granted in FY19 took the form of options. The exercise price of options granted in FY19 was set at a premium of 43% to the
Company’s share price on the date of grant. The options expire four years after the grant date, or earlier if the performance conditions
are not satisfied.
The number of options granted was determined by dividing the dollar award value by the value of the option at the time of grant (based
on a two week volume weighted average price (‘VWAP’) of the Company’s shares at that time).
The performance conditions for grants made during the year ending 30 June 2019 are based on the following:
•
•
50% of award to be tested based on compound annual growth in revenue; and
50% of award to be tested based on compound annual growth in EPS.
Each performance condition will be tested following finalisation of the annual financial results for the year ending 30 June 2021
(performance period).
The Board has chosen to offer significant incentive opportunity if senior executives can substantially increase the rate of growth in revenue
and EPS as the Board believes this is in the interest of the senior executive team and shareholders alike. The Board approved challenging
threshold, target and stretch growth rates in respect of both the revenue and EPS hurdles, which are based on the Company’s strategic
plan and are reflective of the Company’s growth objectives. The award schedule outlined on the heading “What is the amount that senior
executives can earn?” on the previous page applies to grants made in FY19.
Performance conditions and disclosure of targets
The publication of prospective Revenue and EPS targets for future performance periods would require the disclosure of commercially
sensitive information. Accordingly, the Company will not disclose prospective targets but will disclose historic targets and the Company’s
performance against those targets. The hurdles for the options granted in FY19 will be disclosed in August 2021 after the applicable
performance period.
2017 LTI Award – Performance condition outcomes based on FY19 results
The first grant of options under the Company’s LTI plan was made in FY17, with performance conditions to be tested with respect to the
audited FY19 full year results. Consequently, no LTI Awards vested during the reporting period. Based on the financial results for FY19,
the following outcomes are expected for LTI grants awarded in FY17:
Performance measure
FY19 at target
performance Outcome
incentive awarded Weighting
FY19
% of target
Revenue
EPS
$68,600,000
$54,415,000 Below threshold
0%
50%
$0.0496
$0.0424 Between threshold and target
86%
50%
The Chief Executive Officer is the only member of KMP that holds FY17 LTI Awards. Based on FY19 performance, it is expected that of
the 2,015,419 FY17 LTI options held by the Chief Executive Officer (which would have vested in full upon achievement of the 150%
Stretch performance level), 29% (577,750 options) will vest and become exercisable and 71% (1,437,669 options) will lapse as a result.
Options that vest during the FY20 reporting period have an exercise price of $1.256 and expire on 2 September 2020.
Additional incentives
As outlined in previous remuneration reports, as part of the remuneration package negotiated with Rebekah O’Flaherty when she joined
as Chief Executive Officer on 1 June 2016, Rebekah received an award of performance rights, which were subject to shareholder approval
at the 2016 Annual General Meeting.
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Those performance rights were issued during the financial year ended 30 June 2017, and include:
(1) 400,000 performance rights under the LTI plan which are subject to specific long term performance indicators:
a) where the VWAP of the Company's ordinary shares for the period of 60 consecutive days after the date of release of the
Company's annual results for the period ended 30 June 2019 is:
i) Less than $3.95, none of the performance rights will vest;
ii) Greater than $3.95 per share, 50% of the performance rights will vest;
iii) Greater than $4.45 per share, 75% of the performance rights will vest; and
iv) Greater than $5.70 per share, 100% of the performance rights will vest; and
b) any shares issued on vesting of any performance right shall be placed in escrow for a period of 12 months from the date of
vesting.
(2) 100,000 performance rights under the terms of the LTI plan which are subject to Rebekah remaining in the role of Chief Executive
Officer until 1 September 2019.
Performance rights that lapse or vest will be disclosed to the ASX in an Appendix 3Y.
Additionally, in recognition of Jonathan Kenny’s increased responsibilities and ongoing contributions to the Group as Interim Chief
Executive Officer during FY16, and in lieu of incentive payments with respect to FY16, it was determined that 300,000 ordinary shares
and a cash bonus of $194,000 were to be issued to Jonathan as a retention and reward bonus subject to continued employment. The
shares were issued in tranches of 100,000 and occurred on 15 September 2016, 15 September 2017 and 17 September 2018. The cash
bonus was paid in August 2017.
As part of the remuneration package negotiated with Simon Yeandle, Chief Financial Officer, it was agreed that Simon will receive
250,000 ordinary shares in the Company on the third anniversary of his commencement date (19 November 2021) subject to his
continued employment at that time.
Non-executive directors' remuneration
Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of, the directors. Non-
executive directors have not been granted or issued equity as part of their remuneration. To preserve independence and impartiality,
non-executive directors do not receive performance related compensation and are not eligible to participate in the Company’s equity
incentive plan.
Non-executive directors' fees and payments are reviewed annually by the P&CC. The Chairman's fees are determined independently to
the fees of other non-executive directors based on comparative roles in the external market.
ASX listing rules require the aggregate non-executive directors’ remuneration be determined periodically by a general meeting. The most
recent determination was in 2017 when shareholders set the aggregate remuneration at $900,000 per annum. Board and committee
fees, as well as statutory superannuation contributions made on behalf of the non-executive directors, are included in the aggregate fee
pool.
The table below shows the structure and level of non-executive director fees (exclusive of superannuation) for the financial years ended
30 June 2019 and 30 June 2018.
Fee applicable
Board
Audit and Risk Committee
People and Culture Committee
FY
2019
2018
2019
2018
2019
2018
Chair ($)
Member ($)
185,000
185,000
20,000
20,000
20,000
20,000
95,000
95,000
10,000
10,000
10,000
10,000
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3P Learning Limited
Directors' report
30 June 2019
Details of the remuneration for the Chairman and independent non-executive directors for the financial years ended 30 June 2019 and
30 June 2018 are set out in the table below.
Fees and
allowances
$
Post-employment
benefits
$
205,000
205,000
125,000
125,000
125,000
125,000
115,000
38,333
570,000
493,333
19,475
19,475
11,875
11,875
11,875
11,875
10,925
3,642
54,150
46,867
Total
$
224,475
224,475
136,875
136,875
136,875
136,875
125,925
41,975
624,150
540,200
Name
S Weiss (Chairman)
R Amos
C Hatton
M Lamont*
Total
FY
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
*Mark Lamont joined the Board on 1 March 2018.
Service agreements
Non-executive directors do not have fixed term contracts with the Company. On appointment to the Board, all non-executive directors
enter into a service agreement with the Company in the form of a letter of appointment. The letter summarises the Board policies and
terms, including compensation. Non-executive directors retire by whichever is the longer period: the third annual general meeting
following their appointment or the third anniversary date of appointment, but may then be eligible for re-election.
Remuneration and other terms of employment for executives are formalised in employment agreements. The Chief Executive Officer and
Chief Financial Officer do not have a fixed term contract with the Company. Details of the employment agreements as at 30 June 2019
are as follows:
Name:
Title:
Agreement commenced: 1 June 2016
Open ended
Term of agreement:
Rebekah O’Flaherty
Chief Executive Officer
Details:
Rebekah will receive a fixed annual remuneration of $650,000, inclusive of statutory superannuation. Rebekah
will be eligible to receive an annual short term incentive with a target STI of 50% of her fixed annual
remuneration, as determined by the Board. Payment of the cash bonus will depend on the Group’s
performance and Rebekah’s achievement of certain key performance indicators or at the discretion of the
Board. As part of a long term incentive package and subject to shareholder approval, Rebekah may be entitled
to receive an equity based award under the LTI plan with a value equivalent to 50% of her fixed annual
remuneration. Either party may terminate the employment contract by giving six months’ notice in writing. The
Company may terminate Rebekah’s employment contract by making a payment in lieu of notice. In the event
of serious misconduct or other specific circumstances warranting summary dismissal, the Company may
terminate Rebekah’s employment contract immediately by notice in writing and without payment in lieu of
notice.
23
3P Learning Limited
Directors' report
30 June 2019
Name:
Title:
Agreement commenced: 19 November 2018
Term of agreement:
Simon Yeandle
Chief Financial Officer
Open ended
Details:
Simon will receive annual fixed remuneration of $375,000 inclusive of statutory superannuation. Simon will
be eligible to receive an annual short term incentive with a target STI of 35% of his fixed annual remuneration,
as determined by the Board. Payment of the cash bonus will depend on the Group’s performance and Simon’s
achievement of certain key performance indicators or at the discretion of the Board. As part of a long term
incentive package Simon may be entitled to receive an equity based award under the LTI plan with a value
equivalent to 35% of his fixed annual remuneration. Either party may terminate the employment contract by
giving six months’ notice in writing. The Company may terminate Simon’s employment contract by making a
payment in lieu of notice. In the event of serious misconduct or other specific circumstances warranting
summary dismissal, the Company may terminate Simon’s employment contract immediately by written notice
and without payment in lieu of notice.
Share-based compensation
Issue of shares
Details of shares issued to directors and other key management personnel as part of compensation during the year ended 30 June
2019 are set out below:
Name
Date
Shares
Issue price
Value $
Jonathan Kenny
17 September 2018
100,000
$1.41
141,000
Further information is available under the ‘Additional Incentives’ section of this report.
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each director and other members of key management personnel
of the Group, including their personally related parties, is set out below:
Balance at the
start of the year
Received as part
of remuneration Additions
Disposals/
other
Balance at the
end of the year
Ordinary shares
Non-Executive Directors
Samuel Weiss
Roger Amos
Claire Hatton
Mark Lamont
Executive KMP
Rebekah O’Flaherty
Jonathan Kenny*
Simon Yeandle
526,508
61,743
31,000
-
-
-
-
-
-
-
348,100
100,000
-
-
35,769
-
-
-
12,000
-
-
Total
967,351
100,000
47,769
-
-
-
-
-
-
-
-
562,277
61,743
31,000
-
12,000
448,100
-
1,115,120
*Jonathan Kenny ceased to be a member of the KMP on 30 November 2018. The balance at the end of the year reflects the balance
of Jonathan’s holding as at 30 November 2018.
24
3P Learning Limited
Directors' report
30 June 2019
Other share-based holdings
The number of performance rights and options held during the financial year by each director and other members of key management
personnel of the Group, including their personally related parties, is set out below:
Holding
type
Balance at the
start of the year
Granted during
the year Vested
Expired/
forfeited
Balance at the
end of the year
Rebekah O’Flaherty
Options
Performance
Rights
Jonathan Kenny*
Options
4,659,928
2,867,647
500,000
2,964,019
-
-
Simon Yeandle*
Options
-
710,717
-
-
-
-
-
-
(2,964,019)
7,527,575
500,000
-
-
710,717
This concludes the remuneration report, which has been audited.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors.
___________________________
Samuel Weiss
Chairman
22 August 2019
25
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
26
3P Learning Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2019
Note
5
31
6
6
6
31
Revenue
Share of profits of associates accounted for using the equity method
Other income
Interest revenue calculated using the effective interest method
Expenses
Employee benefits expense
Depreciation and amortisation expense
Professional fees
Technology costs
Marketing expenses
Occupancy expenses
Administrative expenses
Operating profit
Finance costs
Loss on disposal of investments
Profit/(loss) before income tax expense
Income tax expense
Profit/(loss) after income tax expense for the year
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Profit/(loss) for the year is attributable to:
Non-controlling interest
Owners of 3P Learning Limited
Profit/(loss) for the year
Total comprehensive income for the year is attributable to:
Non-controlling interest
Owners of 3P Learning Limited
Total comprehensive income for the year
Basic earnings per share
Diluted earnings per share
35
35
Consolidated
2019
$'000
2018
$'000
54,415
55,367
-
195
267
567
81
23
(26,172)
(24,820)
(9,131)
(938)
(3,486)
(1,752)
(2,539)
(1,976)
(8,285)
(1,020)
(3,512)
(2,011)
(2,437)
(2,643)
8,883
11,310
(138)
-
8,745
(2,834)
(624)
(25,259)
(14,573)
(4,110)
5,911
(18,683)
(295)
(295)
2,908
2,908
5,616
(15,775)
-
5,911
5,911
-
5,616
5,616
Cents
4.24
4.24
5
(18,688)
(18,683)
5
(15,780)
(15,775)
Cents
(13.42)
(13.42)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
27
3P Learning Limited
Statement of financial position
As at 30 June 2019
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Income tax receivable
Other
Total current assets
Non-current assets
Other
Plant and equipment
Intangibles
Deferred tax asset
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Finance lease payable
Income tax payable
Provisions
Total current liabilities
Non-current liabilities
Contract liabilities
Provisions
Borrowings
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
Consolidated
2019
$'000
2018
$'000
8
9
7
10
11
12
7
13
14
7
15
16
17
18
19
20
25,766
9,000
-
1,812
36,578
17
1,042
19,551
5,031
25,641
23,014
4,649
183
1,966
29,812
6
926
18,386
5,960
25,278
62,219
55,090
7,288
24,310
14
389
1,479
33,480
3,356
755
4
4,115
5,671
25,958
12
766
1,324
33,731
1,556
777
18
2,351
37,595
36,082
24,624
19,008
34,374
8,049
(17,799)
34,233
8,485
(23,710)
24,624
19,008
The above statement of financial position should be read in conjunction with the accompanying notes
28
3P Learning Limited
Statement of changes in equity
For the year ended 30 June 2019
Issued
capital
$'000
Reserves
$'000
Retained
profits/
(accumulated
losses)
$'000
Non-
controlling
interest Total equity
$'000
$'000
Consolidated 2019
Balance at 1 July 2018
34,233
8,485
(23,710)
Profit after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
-
-
-
-
(295)
(295)
5,911
-
5,911
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 19)
141
(141)
-
Balance at 30 June 2019
34,374
8,049
(17,799)
-
-
-
-
-
-
19,008
5,911
(295)
5,616
-
24,624
Consolidated 2018
Balance at 1 July 2017
34,092
5,360
(4,946)
(99)
34,407
Profit/(loss) after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
-
-
-
-
(18,688)
2,908
-
2,908
(18,688)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 19)
141
Share-based payments (note 34)
Transactions with non-controlling interest
-
-
(141)
358
-
-
-
(76)
Balance at 30 June 2018
34,233
8,485
(23,710)
5
-
5
-
-
94
-
(18,683)
2,908
(15,775)
-
358
18
19,008
The above statement of changes in equity should be read in conjunction with the accompanying notes
29
3P Learning Limited
Statement of cash flows
For the year ended 30 June 2019
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest and other finance costs paid
Income taxes paid
Net cash inflow from operating activities
Cash flows from investing activities
Payments for plant and equipment
Payments for intangibles
Proceeds from disposal of investment in associates
Net cash (outflow)/inflow from investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Net cash (outflow) / inflow financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Note
Consolidated
2019
$'000
2018
$'000
33
63,192
(49,457)
230
(138)
(1,651)
12,176
(425)
(9,002)
-
(9,427)
64,133
(49,207)
23
(707)
(230)
14,012
(269)
(9,777)
24,896
14,850
-
(12)
(12)
13,500
(23,010)
(9,510)
2,737
19,352
23,014
3,287
15
375
Cash and cash equivalents at the end of the financial year
8
25,766
23,014
The above statement of cash flows should be read in conjunction with the accompanying notes
30
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 1. General information
The financial statements cover 3P Learning Limited as a Group consisting of 3P Learning Limited (the 'Company' or 'parent entity') and its
subsidiaries (collectively referred to as the ‘Group’). The financial statements are presented in Australian dollars, which is 3P Learning
Limited's functional and presentation currency.
3P Learning Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal
place of business is:
Level 18, 124 Walker Street
North Sydney NSW 2060
A description of the nature of the Group's operations and its principal activities are included in the directors' report, which is not part of the
financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 22 August 2019. The directors have
the power to amend and reissue the financial statements.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been
consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting
Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The following Accounting Standards and Interpretations adopted during the year are most relevant to the Group:
AASB 9 Financial Instruments
The Group has adopted AASB 9 from 1 July 2018. The standard introduced new classification and measurement models for financial
assets. A financial asset shall be measured at amortised cost if it is held within a business model whose objective is to hold assets in order
to collect contractual cash flows which arise on specified dates and that are solely principal and interest. A debt investment shall be
measured at fair value through other comprehensive income if it is held within a business model whose objective is to both hold assets in
order to collect contractual cash flows which arise on specified dates that are solely principal and interest as well as selling the asset on
the basis of its fair value. All other financial assets are classified and measured at fair value through profit or loss unless the entity makes
an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading or contingent
consideration recognised in a business combination) in other comprehensive income ('OCI'). Despite these requirements, a financial asset
may be irrevocably designated as measured at fair value through profit or loss to reduce the effect of, or eliminate, an accounting mismatch.
For financial liabilities designated at fair value through profit or loss, the standard requires the portion of the change in fair value that relates
to the entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch).
New simpler hedge accounting requirements are intended to more closely align the accounting treatment with the risk management
activities of the entity. New impairment requirements use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment is
measured using a 12-month ECL method unless the credit risk on a financial instrument has increased significantly since initial recognition
in which case the lifetime ECL method is adopted. For receivables, a simplified approach to measuring expected credit losses using a
lifetime expected loss allowance is available.
AASB 15 Revenue from Contracts with Customers
The Group has adopted AASB 15 from 1 July 2018. The standard provides a single comprehensive model for revenue recognition. The
core principle of the standard is that an entity shall recognise revenue to depict the transfer of promised goods or services to customers at
an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard
introduced a new contract-based revenue recognition model with a measurement approach that is based on an allocation of the transaction
31
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
price. This is described further in the accounting policies below. Contracts with customers are presented in an entity's statement of financial
position as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity's performance and the
customer's payment. Customer acquisition costs and costs to fulfil a contract can, subject to certain criteria, be capitalised as an asset and
amortised over the contract period.
Impact of adoption
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position
of the Group and therefore there was no impact on opening retained earnings.
The Group has adopted Accounting Standards AASB 9 and AASB 15 for the year ended 30 June 2019. AASB 15 was adopted using the
modified retrospective approach and as such comparatives have not been restated. The Group has applied AASB 9 retrospectively, with
the initial application date of 1 July 2018 and has adjusted the comparative information for the period beginning 1 July 2017.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities.
These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting
Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only. Supplementary information
about the parent entity is disclosed in note 29.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of 3P Learning Limited as at 30 June 2019
and the results of all subsidiaries for the year then ended.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the
activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-
consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated. Unrealised losses
are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries
have been changed where necessary to ensure consistency with the policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the
loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value
of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non- controlling interest in
the subsidiary together with any cumulative translation differences recognised in equity. The Group recognises the fair value of the
consideration received and the fair value of any investment retained together with any gain or loss in profit or loss.
32
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
Operating segments
Operating segments are presented on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM').
The CODM is responsible for the allocation of resources to operating segments and assessing their performance.
Foreign currency translation
The financial statements are presented in Australian dollars, which is 3P Learning Limited's functional and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The
revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which approximate
the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in other comprehensive
income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange for
transferring goods or services to a customer. For each contract with a customer, the Group: identifies the contract with a customer; identifies
the performance obligations in the contract; determines the transaction price which takes into account estimates of variable consideration
and the time value of money; allocates the transaction price to the separate performance obligations on the basis of the relative stand-
alone selling price of each distinct good or service to be delivered; and recognises revenue when or as each performance obligation is
satisfied in a manner that depicts the transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts, rebates and
refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates are determined using either
the 'expected value' or 'most likely amount' method. The measurement of variable consideration is subject to a constraining principle
whereby revenue will only be recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative
revenue recognised will not occur. The measurement constraint continues until the uncertainty associated with the variable consideration
is subsequently resolved. Amounts received that are subject to the constraining principle are initially recognised as deferred revenue in
the form of a separate refund liability.
Licence revenues from own intellectual property
The Group recognises revenue pursuant to software licence agreements upon the provision of access to its customers of the Group’s
intellectual property as it exists at any given time during the period of the licence. Revenue is therefore recognised over the duration of the
agreement or for as long as the customer has been provided access, when persuasive evidence of an arrangement exists, delivery has
occurred, the fee is fixed or determinable and collectability is probable.
Third party licence revenue
The Group recognises commission revenue pursuant to a distribution agreement at the point of time when it sells a third party’s online
products to customers which provide these customers with access to the third party’s intellectual property as it exists at any given time.
Revenue from the sale of third party products is recorded on a net basis when the performance obligations in relation to the online product
are completed, consistent with an agency relationship.
33
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
Copyright licence fee
Revenue is recognised in relation to copyright agency fees upon becoming entitled to compensation being at a time when the Group’s
materials and resources are reproduced by third parties.
Sale of workbooks
Revenue is recognised in relation to workbook materials sold to schools and students at the point of time, when persuasive evidence of
an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is probable.
Sponsorship revenue
Revenue is recognised in relation to sponsorship amounts provided by various external parties when the Group becomes entitled to the
benefit and all of its obligations have been fulfilled.
Interest
Revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a
financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
Sub-lease revenue
Sub-lease revenue is accounted for on a straight-line basis over the lease term and is recognised in the period in which the sub-lease
revenue is earned.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax
rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax
losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are
recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
•
when the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction that
is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or
when the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the
reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
•
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets
recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be
recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits
available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax
liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable
entity or different taxable entities which intend to settle simultaneously.
3P Learning Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under
the tax consolidation regime. The head entity and each subsidiary in the tax consolidated group continue to account for their own current
and deferred tax amounts. The tax consolidated group has applied the 'separate taxpayer within group' approach in determining the
appropriate amount of taxes to allocate to members of the tax consolidated group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets) and the deferred
tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax consolidated group.
34
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable from or
payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the intercompany charge equals the
current tax liability or benefit of each tax consolidated group member, resulting in neither a contribution by the head entity to the subsidiaries
nor a distribution by the subsidiaries to the head entity.
Research and development rebate
Research and development rebate are credited against tax expense and are not treated as revenue.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group's normal
operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or
the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the
reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held primarily for the
purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement
of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments
with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method,
less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30 days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. The
Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific
to the debtors and the economic environment.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Associates
Associates are entities over which the Group has significant influence but not control or joint control. Investments in associates are
accounted for using the equity method. Under the equity method, the share of the profits or losses of the associate is recognised in profit
or loss and the share of the movements in equity is recognised in other comprehensive income. Investments in associates are carried in
the statement of financial position at cost plus post-acquisition changes in the Group's share of net assets of the associate. Goodwill
relating to the associate is included in the carrying amount of the investment and is neither amortised nor individually tested for impairment.
Dividends received or receivable from associates reduce the carrying amount of the investment.
When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any unsecured long-term
receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.
The Group discontinues the use of the equity method upon the loss of significant influence over the associate and recognises any retained
investment at its fair value. Any difference between the associate's carrying amount, fair value of the retained investment and proceeds
from disposal is recognised in profit or loss.
35
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
Costs to obtain a contract
The Group has elected to apply the optional practical expedient for sales commissions paid to employees for contracts obtained from
external customers. This allows the Group to immediately expense sales commissions (included under employee benefits expenses)
because the amortisation period of the asset that the Group otherwise would have used is one year or less.
Plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is
directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of plant and equipment over their expected useful
lives as follows:
Furniture & fittings
Computer equipment
Office equipment
three to seven years
two to three years
three to five years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
An item of plant and equipment is derecognised upon disposal or when there is no future economic benefit to the Group. Gains and losses
between the carrying amount and the disposal proceeds are taken to profit or loss.
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement at inception date,
whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the
asset, even if that right is not explicitly specified in an arrangement.
A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all the risks and benefits
incidental to the ownership of leased assets, and operating leases, under which the lessor effectively retains substantially all such risks
and benefits.
Finance leases are capitalised. A lease asset and liability are established at the fair value of the leased assets, or if lower, the present
value of minimum lease payments. Lease payments are allocated between the principal component of the lease liability and the finance
costs, so as to achieve a constant rate of interest on the remaining balance of the liability.
Leased assets acquired under a finance lease are depreciated over the asset's useful life or over the shorter of the asset's useful life and
the lease term if there is no reasonable certainty that the Group will obtain ownership at the end of the lease term.
Group as a lessee
Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a straight-line basis over the
term of the lease.
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at the date of
the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible assets are not amortised and
are subsequently measured at cost less any impairment. Finite life intangible assets are subsequently measured at cost less amortisation
and any impairment. The gains or losses recognised in profit or loss arising from the derecognition of intangible assets are measured as
the difference between net disposal proceeds and the carrying amount of the intangible asset. The method and useful lives of finite life
intangible assets are reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for prospectively by
changing the amortisation method or period.
Internally generated intangible assets, excluding capitalised development costs, are not capitalised and an expense is recognised in the
statement of comprehensive income in the year in which the expenditure is incurred.
36
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for impairment, or more
frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment
losses. Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed.
Product development
Research costs are expensed in the period in which they are incurred. Development costs are capitalised when it is probable that the
project will be a success considering its commercial and technical feasibility; the Group is able to use or sell the asset; the Group has
sufficient resources and intent to complete the internal development and their costs can be measured reliably. Capitalised development
costs are amortised on a straight-line basis over the period of their expected benefit, being their finite useful life of three years. Amortisation
of the asset begins when development is complete and the asset is available for use.
Patents and trademarks
Significant costs associated with patents and trademarks are deferred and amortised on a straight-line basis over the period of their
expected benefit, being their finite useful life of three to ten years.
Customer contracts
Customer contracts include direct incremental costs of establishing a customer contract such as sales commissions for resellers. Customer
contracts are amortised over the period in which the related benefits are expected to be realised, being the customer contract period.
Software
Significant costs associated with software are deferred and amortised on a straight-line basis over the period of their expected benefit,
being their finite useful life of three years.
Impairment of non-financial assets
Goodwill is not subject to amortisation and is tested annually for impairment, or more frequently if events or changes in circumstances
indicate that they might be impaired. Other non-financial assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the present value of
the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the
asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and which are
unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are
usually paid within 30 days of recognition.
Contract liabilities
Contract liabilities represent the Group's obligation to transfer goods or services to a customer and are recognised when a customer pays
consideration, or when the Group recognises a receivable to reflect its unconditional right to consideration (whichever is earlier) before the
Group has transferred the goods or services to the customer.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently
measured at amortised cost using the effective interest method.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in
which they are incurred.
37
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is probable the
Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised
as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account
the risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted using a current pre-
tax rate specific to the liability. The increase in the provision resulting from the passage of time is recognised as a finance cost.
Employee benefits
Short-term employee benefits
Employee benefits expected to be settled within 12 months of the reporting date are measured at the amounts expected to be paid when
the liabilities are settled.
Other long-term employee benefits
Employee benefits not expected to be settled within 12 months of the reporting date are measured as the present value of expected future
payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method.
Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected
future payments are discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and
currency that match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of
services.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is determined using the binomial option pricing
model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected
price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with
non-vesting conditions that do not determine whether the Group receives the services that entitle the employees to receive payment. No
account is taken of any other vesting conditions.
The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over the vesting period. The
cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards
that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative
amount calculated at each reporting date less amounts already recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market conditions are considered
to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional
expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based
compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a cancellation. If
the condition is not within the control of the Group or employee and is not satisfied during the vesting period, any remaining expense for
the award is recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised
immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a
modification.
38
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based
on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at
the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal
market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in
their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation
techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value are used maximising
the use of relevant observable inputs and minimising the use of unobservable inputs.
Contributed equity
Ordinary shares are classified as equity
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the
proceeds.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of 3P Learning Limited, excluding any costs of
servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year,
adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income
tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of
shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from
the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or
payable to, the tax authority is included in other receivables or other payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are
recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments
Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to
the nearest thousand dollars, or in certain cases, the nearest dollar.
Comparatives
Comparatives in the statement of profit or loss and other comprehensive income, and the statement of financial position, and the statement
of cash flows have been realigned to current year presentation. There has been no effect on the profit for the year.
39
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 2. Significant accounting policies (continued)
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been
early adopted by the Group for the annual reporting period ended 30 June 2019. The Group's assessment of the impact of these new or
amended Accounting Standards and Interpretations, most relevant to the Group, are set out below.
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces AASB 117 'Leases'
and for lessees will eliminate the classifications of operating leases and finance leases.
Subject to exceptions, a 'right-of-use' asset will be capitalised in the statement of financial position, measured as the present value of the
unavoidable future lease payments to be made over the lease term. The exceptions relate to short-term leases of 12 months or less and
leases of low-value assets (such as personal computers and small office furniture) where an accounting policy choice exists whereby
either a 'right-of-use' asset is recognised or lease payments are expensed to profit or loss as incurred. A liability corresponding to the
capitalised lease will also be recognised, adjusted for lease prepayments, lease incentives received, initial direct costs incurred and an
estimate of any future restoration, removal or dismantling costs. Straight-line operating lease expense recognition will be replaced with a
depreciation charge for the leased asset (included in operating costs) and an interest expense on the recognised lease liability (included
in finance costs).
In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease expenses
under AASB 117. However, EBITDA (earnings before interest, tax, depreciation and amortisation) results will be improved as the operating
expense is replaced by interest expense and depreciation in profit or loss under AASB 16. For classification within the statement of cash
flows, the lease payments will be separated into both a principal (financing activities) and interest (either operating or financing activities)
component. For lessor accounting, the standard does not substantially change how a lessor accounts for leases. Based on leases in
existence at 30 June 2019, the pre-tax impact of adoption of this standard as at 1 July 2019, using the modified retrospective approach,
will include the recognition of a right-of-use asset of approximately $3,750,000, a lease receivable of approximately $2,230,000 and lease
liabilities of approximately $6,150,000, in respect of the Group’s operating lease over premises. After adjusting for amounts currently
recorded on the balance sheet (representing the difference between the cumulative lease expense recognised and cash paid on leases),
this results in an increase to retained earnings of approximately $16,000. The recognition of a right-of-use asset and increase in lease
liability will result in approximately $990,000 increase in depreciation, approximately $180,000 increase in interest expense, approximately
$75,000 in interest income, approximately $580,000 decrease in other revenue, and approximately $1,635,000 decrease in occupancy
expenses for the next financial year. Refer to note 27 for undiscounted commitments in relation to non-cancellable operating leases as at
30 June 2019.
New Conceptual Framework for Financial Reporting
A revised Conceptual Framework for Financial Reporting has been issued by the AASB and is applicable for annual reporting periods
beginning on or after 1 January 2020. This release impacts for-profit private sector entities that have public accountability that are required
by legislation to comply with Australian Accounting Standards and other for-profit entities that voluntarily elect to apply the Conceptual
Framework. Phase 2 of the framework is yet to be released which will impact for-profit private sector entities. The application of new
definition and recognition criteria as well as new guidance on measurement will result in amendments to several accounting standards.
The issue of AASB 2019-1 Amendments to Australian Accounting Standards – References to the Conceptual Framework, also applicable
from 1 January 2020, includes such amendments. Where the Group has relied on the conceptual framework in determining its accounting
policies for transactions, events or conditions that are not otherwise dealt with under Australian Accounting Standards, the Group may
need to revisit such policies. The Group will apply the revised conceptual framework from 1 July 2020 and is yet to assess its impact.
40
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported
amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities,
contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and
on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The
resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes)
within the next financial year are discussed below.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the
date at which they are granted. The fair value is determined by using a binomial model taking into account the terms and conditions upon
which the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-based payments would
have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and
equity.
Goodwill and other indefinite life intangible assets
The Group tests annually, or more frequently if events or changes in circumstances indicate impairment, whether goodwill and other
indefinite life intangible assets have suffered any impairment, in accordance with the accounting policy stated in note 2. The recoverable
amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of
assumptions, including estimated discount rates based on the current cost of capital and growth rates of the estimated future cash flows.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The Group assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets at each reporting
date by evaluating conditions specific to the Group and to the particular asset that may lead to impairment. If an impairment trigger exists,
the recoverable amount of the asset is determined. This involves fair value less costs of disposal or value-in-use calculations, which
incorporate a number of key estimates and assumptions.
Income tax
The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in determining the provision
for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax
determination is uncertain. The Group recognises liabilities for anticipated tax audit issues based on the Group's current understanding of
the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current
and deferred tax provisions in the period in which such determination is made.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is probable that future taxable
amounts will be available to utilise those temporary differences and losses.
Product development costs
The Group capitalises development costs for a project in accordance with the accounting policy. Initial capitalisation of costs is based on
management’s judgement that technological and economic feasibility is confirmed. In determining the amounts to be capitalised, as with
the nature of Software-as-a-Service delivery model, key judgement is required in determining whether incremental product enhancements
will provide additional future economic benefit.
Estimation of useful lives of capitalised product development
Capitalised product development is depreciated over its useful life. The actual lives of the assets are assessed annually and may vary
depending on a number of factors. In reassessing asset lives, factors such as technological innovation, product life cycles and maintenance
programmes are taken into account.
41
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 4. Operating segments
Identification of reportable operating segments
The Group is organised into geographic operating segments: Asia-Pacific ('APAC'), the United States of America, Canada and South
America ('Americas') and Europe, Middle-East and Africa ('EMEA'). These operating segments are based on the internal reports that are
reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing
performance and in determining the allocation of resources. There is no aggregation of operating segments.
The CODM reviews adjusted EBITDA (earnings before interest, tax, depreciation and amortisation, excluding restructuring costs,
impairment expense, loss on disposal of investments and share of profits of associates). The accounting policies adopted for internal
reporting to the CODM are consistent with those adopted in the financial statements.
The information reported to the CODM is on a monthly basis. The CODM does not regularly review segment assets and segment liabilities.
Refer to statement of financial position for assets and liabilities.
Intersegment transactions
Intersegment transactions were made at market rates and are eliminated on consolidation.
Major customers
There are no major customers that contributed more than 10% of revenue to the Group.
Operating segment information
Consolidated 2019
Revenue
Sales to external customers
Interest revenue
Total revenue
Adjusted EBITDA*
Depreciation and amortisation
Interest revenue
Finance costs
Profit before income tax expense
Income tax expense
Profit after income tax expense
APAC
$'000
Americas
$'000
EMEA
$'000
Total
$'000
33,668
249
33,917
16,808
8,585
12,162
-
18
54,415
267
8,585
12,180
54,682
(2,273)
3,212
17,747
(9,131)
267
(138)
8,745
(2,834)
5,911
*
Adjusted EBITDA is before interest revenue and after eliminating inter-segment royalty expense incurred by the Americas operating
segment of $2,664,000 and the EMEA operating segment of $4,175,000.
42
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 4. Operating segments (continued)
Consolidated 2018
Revenue
Sales to external customers
Interest revenue
Total revenue
Adjusted EBITDA*
Share of profit of associates
Depreciation and amortisation
Interest revenue
Finance costs
Loss on disposal of investments
Loss before income tax expense
Income tax expense
Loss after income tax expense
APAC
$'000
Americas
$'000
EMEA
$'000
Total
$'000
34,361
23
34,384
17,520
7,996
-
7,996
(1,828)
13,010
-
55,367
23
13,010
55,390
3,313
19,005
567
(8,285)
23
(624)
(25,259)
(14,573)
(4,110)
(18,683)
*
Adjusted EBITDA is before interest revenue and after eliminating inter-segment royalty expense incurred by the Americas operating
segment of $2,950,000 and the EMEA operating segment of $4,617,000.
Note 5. Revenue
Disaggregation of revenue
Revenue is disaggregated into the following categories:
Revenue from contracts with customers
Licence fees
Net commission revenue
Sale of workbooks
Copyright licence fees
Other revenue
Sponsorship revenue
Sub-lease revenue
Sub-lease revenue
Total revenue
Consolidated
2019
$'000
2018
$'000
40,210
10,872
27
2,525
189
-
43,018
8,479
50
3,052
68
166
53,823
54,833
592
534
54,415
55,367
Revenue from external customers by geographic regions is set out in note 4 operating segments. The relationship between the
disaggregated revenue information set out above and the segment information set out in note 4 operating segments is explained below.
43
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 5. Revenue (continued)
The Group’s main revenue-generating activity is the worldwide sale of online educational programs via licence fees and net commission
revenue. The Group generates revenue from both these categories in all operating segments (geographic regions). Sales of workbooks,
copyright licence fees, and sponsorship income are ancillary revenue streams and are generated only in the APAC operating segment.
Licence fees are recognised over time. All other revenue streams are recognised at a point in time.
Contract liabilities at the beginning of the period of $25,958,000 were recognised as revenue in the reporting period. Contract liabilities are
generally incurred at the beginning of the contract period. Refer to note 14 and note 16 for details on contract liabilities.
Note 6. Expenses
Profit/(loss) before income tax includes the following specific expenses:
Depreciation
Fixtures and fittings
Computer equipment
Office equipment
Total depreciation
Amortisation
Product development
Patents and trademarks
Customer contracts
Software
Total amortisation
Total depreciation and amortisation
Finance costs
Interest and finance charges paid/payable
Net foreign exchange gain
Net foreign exchange (gain)
Rental expense relating to operating leases
Minimum lease payments
Employee benefits expense:
Salaries and wages
Bonus and commission
Equity settled share-based payments
Superannuation
Total employee benefits expense
44
Consolidated
2019
$'000
2018
$'000
188
212
44
444
6,992
2
689
1,004
8,687
9,131
157
223
40
420
6,407
8
407
1,043
7,865
8,285
138
624
(599)
(67)
2,130
1,965
20,402
2,955
-
2,815
18,432
3,307
358
2,723
26,172
24,820
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 7. Income tax
Income tax expense
Current tax
Deferred tax - origination and reversal of temporary differences
Adjustments in respect of current income tax in the previous year
Aggregate income tax expense
Deferred tax included in income tax expense comprises:
Decrease in deferred tax assets
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit/(loss) before income tax expense
Tax at the statutory tax rate of 30%
Tax effect amounts which are not adjusted or deductible/(taxable) in calculating taxable income:
Non-deductible expenses
Unrecognised capital losses
Impact of foreign tax rate
Current year tax benefit not recognised
Tax losses and offsets derecognised
Research and development tax offset
Reduction in the United States of America tax rate
Adjustments in respect of current income tax for the previous year
Income tax expense
Tax losses not recognised relating to various tax jurisdictions
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit at statutory tax rates
Consolidated
2019
$'000
2018
$'000
1,839
929
66
2,834
1,738
1,825
547
4,110
929
1,825
8,745
2,624
48
-
9
576
-
(489)
-
2,768
66
(14,573)
(4,372)
113
7,124
(532)
666
75
-
489
3,563
547
2,834
4,110
44,015
38,874
11,449
10,513
Unrecognised tax benefits includes $8,398,000 of unused capital losses on disposal of investments (2018: $8,398,000).
45
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 7. Income tax (continued)
Deferred tax asset
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Tax losses
Accrued expenses
Contract liabilities
IPO costs
Royalty asset
Intangibles
Unrealised foreign exchange fluctuation
Plant and equipment
Research and development credits
Deferred tax asset
Movements:
Opening balance
Charged to profit or loss
Closing balance
Income tax receivable
Income tax receivable
Income tax payable
Income tax payable
Note 8. Current assets - cash and cash equivalents
Cash at bank and in hand
Short-term deposits
Total cash and cash equivalents
46
Consolidated
2019
$'000
2018
$'000
-
706
4,639
-
1,247
(3,987)
210
(56)
2,272
140
666
5,532
563
940
(3,592)
(10)
10
1,711
5,031
5,960
5,960
(929)
5,031
7,785
(1,825)
5,960
-
183
389
766
Consolidated
2019
$'000
2018
$'000
7,261
18,505
8,142
14,872
25,766
23,014
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 9. Current assets - trade and other receivables
Trade receivables
Less: Allowance for expected credit losses
Other receivables
Total trade and other receivables
Consolidated
2019
$'000
2018
$'000
8,959
(115)
8,844
156
4,567
(67)
4,500
149
9,000
4,649
Allowance for expected credit losses
The Group has recognised a loss of $64,000 (2018: $105,000) in profit or loss in respect of impairment of receivables for the year ended
30 June 2019.
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Consolidated
Not overdue
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
Total
Expected credit loss rate
2018
%
2019
%
Carrying amount
2019
$'000
2018
$'000
Allowance for expected
credit losses
2018
$'000
2019
$'000
0.11%
1.29%
32.67%
45.95%
0.10%
1.02%
31.12%
43.87%
8,146
531
230
52
8,959
4,206
183
129
49
4,567
9
7
75
24
115
4
2
40
21
67
Movements in the allowance for expected credit losses are as follows:
Opening balance
Additional provisions recognised
Receivables written off during the year as uncollectable
Unused amounts reversed
Closing balance
Consolidated
2019
$'000
2018
$'000
67
117
(16)
(53)
115
207
122
(245)
(17)
67
47
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 10. Current assets - other
Prepayments
Term deposits
Other deposits
Withholding tax credits
Total other
Note 11. Non-current assets – plant and equipment
Furniture & fittings - at cost
Less: Accumulated depreciation
Furniture & fittings – carrying amount
Computer equipment - at cost
Less: Accumulated depreciation
Computer equipment – carrying amount
Office equipment - at cost
Less: Accumulated depreciation
Office equipment – carrying amount
Total plant and equipment
Consolidated
2019
$'000
2018
$'000
1,785
27
-
-
1,812
1,532
15
8
411
1,966
1,862
(1,185)
1,532
(993)
677
539
2,748
(2,479)
2,521
(2,254)
269
304
(208)
96
1,042
267
281
(161)
120
926
Total
$'000
1,070
269
(5)
12
(420)
926
613
(70)
17
(444)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2017
Additions
Disposals
Exchange differences
Depreciation expense
Balance at 30 June 2018
Additions
Disposals
Exchange differences
Depreciation expense
Furniture
and fittings
$'000
Computer
equipment
$'000
Office
equipment
$'000
604
87
(2)
7
(157)
539
382
(70)
14
(188)
355
133
(1)
3
(223)
267
212
-
2
(212)
111
49
(2)
2
(40)
120
19
-
1
(44)
Balance at 30 June 2019
677
269
96
1,042
48
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 11. Non-current assets – plant and equipment (continued)
Property, plant and equipment secured under finance leases
Refer to note 27 for further information on property, plant and equipment secured under finance leases.
Note 12. Non-current assets – intangibles
Goodwill - at cost
Product development - at cost
Less: Accumulated amortisation
Product development – carrying amount
Patents and trademarks - at cost
Less: Accumulated amortisation
Patents and trademarks – carrying amount
Customer contracts - at cost
Less: Accumulated amortisation
Customer contracts – carrying amount
Software - at cost
Less: Accumulated amortisation
Software – carrying amount
Total intangibles
Consolidated
2019
$'000
2018
$'000
4,576
4,535
49,746
(36,767)
41,893
(29,775)
12,979
12,118
1,886
(1,802)
84
1,371
(1,106)
265
4,708
(3,061)
1,647
3,145
(3,083)
62
913
(769)
144
3,584
(2,057)
1,527
19,551
18,386
49
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 12. Non-current assets – intangibles (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2017
Additions
Exchange differences
Amortisation expense
Balance at 30 June 2018
Additions
Exchange differences
Amortisation expense
Goodwill
$'000
Product
development
$'000
Patents and
trademarks
$'000
Customer
contracts
$'000
Software
$'000
Total
$'000
4,558
-
(23)
-
4,535
-
41
-
9,947
8,578
-
(6,407)
12,118
7,853
-
(6,992)
112
463
(24)
1,432
1,138
-
(407)
(1,043)
144
820
(10)
(689)
1,527
1,124
-
16,058
10,240
(47)
(7,865)
18,386
9,821
31
(1,004)
(8,687)
9
61
-
(8)
62
24
-
(2)
84
Balance at 30 June 2019
4,576
12,979
265
1,647
19,951
Impairment testing for goodwill
Goodwill acquired through business combinations has been allocated to the following cash-generating units ('CGUs'):
CGU1: APAC
CGU2: EMEA
Total
Consolidated
2019
$'000
3,012
1,564
4,576
2018
$'000
3,012
1,523
4,535
The recoverable amount of each CGU is determined based on value-in-use calculations which require the use of assumptions. The
calculations use cash flow projections based on business plan approved by management covering a five year period. Cash flows beyond
the five year period are extrapolated using the estimated growth rates stated below. The following key assumptions were used in the
discounted cash flow model for the different CGUs:
a) Pre-tax discount rate: APAC 9.50% and EMEA 9.60% (2018: APAC 10.50% and EMEA 10.10%).
b) Operating cash flow projections are extracted from the most recent approved strategic plans or forecasts that relate to the existing
asset base. For each CGU, the cash flow projections for a five-year period have been determined based on expectations of future
performance. Key assumptions in the cash flows include sales volume growth and the costs of doing business. These assumptions
are based on expectations of market demand and operational performance. Cash flow projections are based on risk-adjusted
forecasts allowing for estimated changes in the business, the competitive trading environment, legislation and economic growth.
c) Terminal growth rate at 3% (2018: 3%).
For the financial year ended 30 June 2019, the recoverable amount of net assets for all CGUs is greater than the carrying value of the
assets and therefore, the goodwill is not considered to be impaired.
Sensitivity
As disclosed in note 3, management have made judgements and estimates in respect of impairment testing of goodwill. Should these
judgements and estimates not occur the resulting carrying amounts of assets may decrease.
For all CGUs, any reasonable change in the key assumptions on which the recoverable amount is based would not cause the CGU’s
carrying amount to exceed its recoverable amount.
50
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 13. Current liabilities - trade and other payables
Trade payables
Accrued expenses
Goods and services tax
Other payables
Total trade and other payables
Refer to note 22 for further information on financial instrument liabilities.
Note 14. Current liabilities – contract liabilities
Total current contract liabilities
Consolidated
2019
$'000
2018
$'000
1,942
4,098
975
273
7,288
1,879
3,500
71
221
5,671
Consolidated
2019
$'000
2018
$'000
24,310
25,958
Contract liabilities represent income received in advance from the contracts with customers pertaining to licence revenue which is
recognised over the period of time. The aggregate amount of the transaction price allocated to the performance obligations that are
unsatisfied at the end of the reporting period was $24,310,000 as at 30 June 2019 (2018: $25,958,000) and is expected to be recognised
as revenue as outlined above. There were no significant changes in the current contract liabilities balances during the year.
Note 15. Current liabilities - provisions
Employee benefits
Lease make good
Property related and other provisions
Total current provisions
Consolidated
2019
$'000
2018
$'000
1,418
1,209
-
61
48
67
1,479
1,324
Employee benefits
Employee benefits comprise of provisions for annual leave and current long service leave. Where an obligation is presented as current,
the Group does not have an unconditional right to defer settlement.
Lease make good
The provision represents the present value of the estimated costs to make good the premises leased by the Group at the end of the
respective lease terms.
Property related and other provisions
The provision represents redundancy, onerous lease and storage costs. The provision represents the present value of the estimated
termination costs.
51
3P Learning Limited
Notes to the financial statements
30 June 2019
16. Non-current liabilities – contract liabilities
Total non-current contract liabilities
Consolidated
2019
$'000
2018
$'000
3,356
1,556
Contract liabilities represent income received in advance from the contracts with customers pertaining to licence revenue which is
recognised over the period of time. The aggregate amount of the transaction price allocated to the performance obligations for non-current
contract liabilities that are unsatisfied at the end of the reporting period was $3,356,000 as at 30 June 2019 (2018: $1,556,000) and is
expected to be recognised as revenue as outlined above. There were no significant changes in the non-current contract liabilities balances
during the year.
Note 17. Non-current liabilities - provisions
Employee benefits
Lease make good
Property related and other provisions
Total non-current provisions
Employee benefits
Employee benefits comprise of provisions for long service leave.
Consolidated
2019
$'000
2018
$'000
257
349
149
755
264
353
160
777
Lease make good
The provision represents the present value of the estimated costs to make good the premises leased by the Group at the end of the
respective lease terms.
Property related and other provisions
The provision represents the present value of the estimated costs, net of any sub-lease revenue, that will be incurred until the end of the
lease terms where the obligation is expected to exceed the economic benefit to be received.
Consolidated - 2019
Carrying amount at the start of the year
Additional provisions recognised
Payments and unwinding of discount
Exchange differences
Unused amounts reversed
Carrying amount at the end of the year
52
Lease
make good
$'000
Property
related and
other
provisions
$'000
401
5
7
2
(66)
349
227
42
(68)
10
(1)
210
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 18. Non-current liabilities - borrowings
Lease liability
Total borrowings
Consolidated
2019
$'000
2018
$'000
4
4
18
18
Refer to note 22 for further information on financial instrument liabilities and note 27 for information on lease liabilities.
Bank loan facilities
The bank loan facilities were renegotiated during the year. The bank loan facilities are subject to variable interest rates, which are based
on the bank bill swap rate ('BBSY'), plus a margin. The banking facilities consist of a $10,000,000 bank loan and a $2,000,000 bank
guarantee that each mature on 30 June 2020. The banking facilities are secured by fixed and floating charges over the Group's assets.
Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
Lease liability
Consolidated
2019
$'000
2018
$'000
18
30
Assets pledged as security
The lease liabilities are effectively secured because the rights to the leased assets revert to the lessor in the event of default.
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Total facilities:
Bank loans
Bank guarantee and ancillary facility
Lease liability
Total
Used at the reporting date:
Bank loans
Bank guarantee and ancillary facility
Lease liability
Total
Unused at the reporting date:
Bank loans
Bank guarantee and ancillary facility
Lease liability
Total
53
Consolidated
2019
$'000
2018
$'000
10,000
2,000
18
12,018
-
1,798
18
1,816
20,000
2,000
30
22,030
-
1,777
30
1,807
10,000
20,000
202
-
223
-
10,202
20,223
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 19. Equity - issued capital
2019
Shares
Consolidated
2018
Shares
2019
$'000
2018
$'000
Ordinary shares - fully paid
139,334,170
139,234,170
34,374
34,233
Movements in ordinary share capital
Details
Balance
Issue of shares
Balance
Issue of shares
Balance
Date
Shares
$'000
1 July 2017
15 September 2017
139,134,170
100,000
30 June 2018
17 September 2018
139,234,170
100,000
34,092
141
34,233
141
30 June 2019
139,334,170
34,374
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the
number of shares held and amounts paid on those shares. The fully paid ordinary shares have no par value and the Company does not
have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have
one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The Group's objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can provide returns for
shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total
borrowings less cash and cash equivalents. In order to maintain or adjust the capital structure, the Group may adjust the amount of
dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group would look to
raise capital when an opportunity to invest in a business or company would be seen as value adding.
The Group is subject to certain financing arrangement covenants and meeting these is given priority in all capital risk management
decisions. There have been no events of default on the financing arrangements during the financial year.
The capital risk management policy remains unchanged from the 30 June 2018 Annual Report.
54
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 20. Equity - reserves
Foreign currency reserve
Acquisition reserve
Share-based payment reserve
Total reserves
Consolidated
2019
$'000
2018
$'000
370
(798)
8,477
8,049
665
(798)
8,618
8,485
Foreign currency reserve
The reserve is used to recognise exchange differences arising from translation of the financial statements of foreign operations to Australian
dollars.
Acquisition reserve
The reserve resulted from the acquisition of non-controlling interests in a subsidiary. The acquisition of non-controlling interest is not a
business combination but is an equity transaction between owners. Accordingly, the difference between consideration paid and identifiable
net assets of the non-controlling interest has been accounted for in the acquisition reserve.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remuneration, and other
parties as part of their compensation for services.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2017
Foreign currency translation
Share-based payments
Transfer to issued capital on issue of shares
Balance at 30 June 2018
Foreign currency translation
Transfer to issued capital on issue of shares
Foreign
currency
reserve
$'000
Acquisition
reserve
$'000
Share-based
payment
reserve
$'000
(2,243)
2,908
-
-
665
(295)
-
(798)
-
-
-
(798)
-
-
8,401
-
358
(141)
8,618
-
(141)
Total
$'000
5,360
2,908
358
(141)
8,485
(295)
(141)
Balance at 30 June 2019
370
(798)
8,477
8,049
55
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 21. Equity - dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Franking credits
Consolidated
2019
$'000
2018
$'000
Franking credits available for subsequent financial years based on a tax rate of 30%
86
199
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for franking credits that will
arise from the payment of the amount of the provision for income tax at the reporting date, franking debits that will arise from the payment
of dividends recognised as a liability at the reporting date and franking credits that will arise from the receipt of dividends recognised as
receivables at the reporting date.
Note 22. Financial instruments
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk and interest rate risk), credit risk
and liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the financial performance of the Group. The Group uses different methods to measure different types of risk
to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and ageing analysis for
credit risk.
The Board of directors have overall responsibility for the establishment and oversight of the risk management framework. The Board has
established an Audit and Risk Committee, which is responsible for managing risk. The committee reports to the Board of directors on its
activities.
Risk management processes are established to identify and analyse the risks faced by the Group, to analyse the risk exposure of the
Group and appropriate procedures, controls and risk limits. Risk management policies and systems are reviewed regularly to reflect
changes in market conditions and the Group’s activities.
The Audit and Risk Committee oversees how management monitors compliance with the Group’s risk management policies and
procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.
Market risk
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through foreign
exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated in
a currency that is not the entity's functional currency. The risk is measured using cash flow forecasting.
To a significant extent, the Group’s business currently enjoys natural hedges. The revenue that the Group obtains in a particular foreign
currency closely matches the expenses it incurs in that currency (such as the British pound). The Board believes that natural hedges
presently mitigate any exchange rate volatility risk for the Group to an economically acceptable level.
From time to time the Group enters into forward foreign exchange contracts to protect against exchange rate movements on significant
contracts with highly probable forecast cash flows.
56
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 22. Financial instruments (continued)
The carrying amount of the Group's foreign currency denominated financial assets and financial liabilities (unhedged) at the reporting date
were as follows:
Consolidated
US dollars
Euros
British pounds
Canadian dollars
Other currencies
Total
Assets
2019
$'000
697
141
409
672
126
2018
$'000
16,488
151
405
30
116
2,045
17,190
Liabilities
2019
$'000
2018
$'000
-
-
-
-
-
-
-
-
-
-
-
-
The Group had net assets denominated in foreign currencies of $2,045,000 (assets $2,045,000 less liabilities $Nil) as at 30 June 2019
(2018: $17,190,000 (assets $17,190,000 less liabilities $Nil). Based on this exposure, had the Australian dollar weakened by
10%/strengthened by 10% (2018: weakened by 10%/strengthened by 10%) against these foreign currencies with all other variables held
constant, the Group's profit before tax for the year would have been $205,000 higher/$205,000 lower (2018: loss before tax would have
been $1,719,000 lower/$1,719,000 higher). The percentage change is the expected overall volatility of the significant currencies, which is
based on management's assessment of reasonable possible fluctuations.
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group's main interest rate risk arises from its term deposits. Term deposits issued at variable rates expose the Group to interest rate
risk.
As at the reporting date, the Group had the following variable rate short term deposits:
Consolidated
Short term deposits
2019
2018
Weighted
average
interest rate
%
Weighted
average
interest rate
%
Balance
$'000
Balance
$'000
2.05
18,505
1.75
14,872
Net exposure to cash flow interest rate risk
18,505
14,872
An analysis of financial instrument liabilities by remaining contractual maturities is shown in 'liquidity and interest rate risk management'
below.
An official increase/decrease in interest rates of 50 (2018: 50) basis points would have an favourable/adverse effect on profit before tax
of $93,000 (2018: $74,000) per annum. The percentage change is based on the expected volatility of interest rates using market data
and analysts' forecasts.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The maximum
exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net of any provisions for impairment of
those assets, as disclosed in the statement of financial position and notes to the financial statements. The Group does not hold any collateral.
57
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 22. Financial instruments (continued)
The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables through the use of a
provisions matrix using fixed rates of credit loss provisioning. These provisions are considered representative across all customers of the
Group based on recent sales experience, historical collection rates and forward-looking information that is available.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the failure of a
debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual payments for a period greater than
one year.
The majority of schools pay upfront and the nature of the customer base has a low impact on the Group's credit risk exposure.
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash equivalents) and available
borrowing facilities to be able to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves by continuously monitoring actual and forecast cash flows and
matching the maturity profiles of financial assets and liabilities.
Financing arrangements
Unused borrowing facilities at the reporting date:
Bank loans
Bank guarantee and ancillary facility
Total
Consolidated
2019
$'000
2018
$'000
10,000
202
20,000
223
10,202
20,223
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables have been drawn up
based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be
paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these totals may
differ from their carrying amount in the statement of financial position.
Consolidated - 2019
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Interest bearing – fixed rate
Lease liability
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$'000
Between 1
and 2 years
$'000
Between 2
and 5 years Over 5 years
$'000
$'000
Remaining
contractual
maturities
$'000
-
-
4
4
-
-
-
-
-
-
-
-
1,942
273
20
2,235
-
-
7.40
1,942
273
16
2,231
58
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 22. Financial instruments (continued)
Consolidated – 2018
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Interest bearing – fixed rate
Lease liability
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$'000
Between 1
and 2 years
$'000
Between 2
and 5 years Over 5 years
$'000
$'000
Remaining
contractual
maturities
$'000
-
-
7.40
1,879
221
16
2,116
-
-
20
20
-
-
-
-
-
-
-
-
1,879
221
36
2,136
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above. The Group
may repay debt when cash is sufficiently available, and this may occur earlier than contractually disclosed above.
Note 23. Fair value measurement
The carrying amounts of trade and other receivables and trade and other payables approximate their fair values due to their short-term
nature. The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market interest
rate that is available for similar financial liabilities.
Note 24. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of key management personnel of the Group is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
Total
Consolidated
2019
$
2018
$
1,804,024
1,983,145
100,607
(40,965)
96,867
173,124
1,863,666
2,253,136
59
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 25. Remuneration of auditor
During the financial year the following fees were paid or payable for services provided by Ernst & Young, the auditor of the Company:
Audit services - Ernst & Young
Audit or review of the financial statements
Other services - Ernst & Young
Tax services
People advisory services
Total
Note 26. Contingencies
Consolidated
2019
$
2018
$
390,004
357,930
-
19,055
50,000
6,500
409,059
414,430
The bank has given bank guarantees as at 30 June 2019 of $1,798,000 (2018: $1,777,000) for merchant facility and operating leases.
Note 27. Commitments
Lease commitments
Unrestricted access was available at the reporting date to the following lines of credit:
Lease commitments - operating payable
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
More than five years
Total
Lease commitments - finance payable
Committed at the reporting date and recognised as liabilities, payable:
Within one year
One to five years
Total commitment
Less: future finance charges
Net commitment recognised as liabilities
Representing:
Lease liability - current
Lease liability - non-current (note 18)
Total
60
Consolidated
2019
$'000
2018
$'000
1,575
4,814
44
6,433
1,497
5,971
136
7,604
16
4
20
(2)
18
14
4
18
16
20
36
(6)
30
12
18
30
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 27. Commitments (continued)
Lease commitments – operating receivable
Committed at the reporting date and recognised as assets, receivables:
Within one year
One to five years
Total
Consolidated
2019
2018
$
$
592
1,820
2,412
555
2,225
2,780
Operating lease commitments includes contracted amounts for commercial leases under non-cancellable operating leases expiring within
one to six years with, in some cases, options to extend. The leases have various escalation clauses. On renewal, the terms of the leases
may be renegotiated.
Finance lease commitments include contracted amounts for various office equipment with a written down value of $15,000 (2018: $37,000)
under finance leases expiring within one to two years. Under the terms of the leases, the Group has the option to acquire the leased assets
for predetermined residual values on the expiry of the leases.
Commitments do not include onerous leases already provided for.
Note 28. Related party transactions
Parent entity
3P Learning Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 30.
Associates
Interests in associates are set out in note 31.
Key management personnel
Disclosures relating to key management personnel are set out in note 24 and the remuneration report included in the directors' report.
Transactions with related parties
The following transactions occurred with related parties:
Payment for other expenses:
Other expenses paid to associate - Licencing fee for the use of the Learnosity Assessment Software*
-
425,000
*The entity ceased to be a related party with effect from 25 May 2018.
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Consolidated
2019
$
2018
$
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
61
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 29. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax for the year
Total comprehensive income for the year
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Share-based payment reserve
Accumulated losses
Total (deficiency)/equity
Parent entity
2019
$
2018
$
(14,643)
(35,087)
(14,643)
(35,087)
32,967
37,814
60,524
65,960
72,998
63,854
73,402
64,195
34,374
8,477
(55,729)
34,233
8,618
(41,086)
(12,878)
1,765
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity and its Australian subsidiary are parties to a deed of cross guarantee under which each company guarantees the debts
of the others. No deficiencies of assets exist with the subsidiary. Refer to note 32 for further details.
Contingent liabilities
The bank has given bank guarantees as at 30 June 2019 of $1,798,000 (2018: $1,777,000) for merchant facility and operating leases.
Capital commitments - Plant and equipment
The parent entity had no capital commitments for plant and equipment as at 30 June 2019 and 30 June 2018.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2, except for investments in
subsidiaries which are accounted for at cost, less any impairment, in the parent entity, and dividends received from subsidiaries are
recognised as other income by the parent entity and its receipt may be an indicator of an impairment of the investment.
Net asset deficiency
As at 30 June 2019, the parent entity was in a net liability position of $12,878,000. The parent entity has an intercompany payable to 3P
Learning Australia Pty Limited of $52,120,000. Refer to note 32 for details on the deed of cross guarantee showing positive net assets of
$36,047,000. Accordingly, the financial statements continue to be prepared on a going concern basis.
62
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 30. Interest in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the
accounting policy described in note 2:
Name
3P Learning Australia Pty Limited
Into Science Pty Ltd
3P International Holdings Pty Ltd
3P Learning Limited
3P Learning Limited
3P Learning Inc.
3P Learning Canada Limited
Note 31. Interest in associates
Principal place of business/
country of incorporation
Ownership interest
2018
2019
Australia
Australia
Australia
New Zealand
United Kingdom
United States
Canada
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Interests in associates are accounted for using the equity method of accounting. Information relating to associates that are material to the
Group are set out below:
Name
Principal place of business/
country of incorporation
Investment in Learnosity Holdings Limited*
Ireland
* Entity involved in providing SaaS Assessment tools.
Ownership interest
2018
2019
-
-
On 25 May 2018, the Group sold its 40% interest in Learnosity Holdings Limited for total consideration of $24,896,000. The loss on disposal
of investments amounted to $25,259,000 and was recognised in the statement of profit or loss in the prior year.
Summarised financial information (up to the date of sale 25 May 2018)
Summarised statement of profit or loss and other comprehensive income
Revenue
Expenses
Profit before income tax
Other comprehensive income
Total comprehensive income
Reconciliation of the Group's carrying amount
Opening carrying amount
Share of profit after income tax
Exchange differences
Loss on disposal of investments adjusted for exchange differences
Proceeds from disposal of investments
Closing carrying amount
63
Investment in Learnosity
Holdings Limited
2018
$’000
2019
$’000
-
-
-
-
-
-
-
-
-
-
-
17,056
(15,638)
1,418
-
1,418
46,624
567
(2,158)
(20,137)
(24,896)
-
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 31. Interest in associates (continued)
Contingent liabilities
Share of contingent liabilities not recognised as liability as at 30 June 2019 $Nil (2018: $Nil).
Commitments
Share of commitments not recognised as liability as at 30 June 2019 $Nil (2018: $Nil).
Note 32. Deed of cross guarantee
On 15 June 2017, 3P Learning Limited (parent entity) and 3P Learning Australia Pty Ltd entered into a deed of cross guarantee under
which each company guarantees the debts of the other entities. By entering into the deed, the wholly-owned entities have been relieved
from the requirement to prepare financial statements and directors' report under Corporations Instrument 2016/785 issued by the Australian
Securities and Investments Commission. The above companies represent a 'Closed Group' for the purposes of the Corporations
Instrument, and as there are no other parties to the deed of cross guarantee that are controlled by 3P Learning Limited, they also represent
the 'Extended Closed Group'.
Set out below is a consolidated statement of profit or loss and other comprehensive income and statement of financial position of the
'Closed Group'.
Statement of profit or loss and other comprehensive income
Revenue
Share of profits of associates accounted for using the equity method
Other income
Employee benefits expense
Depreciation and amortisation expense
Professional fees
Technology costs
Marketing expenses
Occupancy expenses
Administrative expenses
Operating profit
Finance costs
Impairment of intercompany investments
Write-off of intercompany receivables
Loss on disposal of investments
Profit/(loss) before income tax expense for the year
Income tax expense
Profit/(loss) after income tax expense for the year
Other comprehensive income for the year, net of tax
2019
$’000
37,835
-
1,891
(15,209)
(8,350)
(882)
(3,364)
(776)
(1,094)
(923)
9,128
(138)
(1,490)
(4,824)
-
2,676
(864)
1,812
-
2018
$’000
39,205
567
1,626
(15,149)
(7,753)
(827)
(3,388)
(1,005)
(1,164)
(1,772)
10,340
(621)
(5,426)
-
(25,259)
(20,966)
(290)
(21,256)
-
Total comprehensive income for the year
1,812
(21,256)
Equity - accumulated losses
(Accumulated losses)/retained profits at the beginning of the financial year
Profit/(loss) after income tax expense for the year
Accumulated losses at the end of the financial year
(8,616)
1,812
12,640
(21,256)
(6,804)
(8,616)
64
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 32. Deed of cross guarantee (continued)
Statement of financial position
Current assets
Cash and cash equivalents
Trade and other receivables
Income tax receivable
Other
Total current assets
Non-current assets
Other financial assets
Plant and equipment
Intangibles
Deferred tax asset
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Contract liabilities
Finance lease payable
Income tax payable
Provisions
Total current liabilities
Non-current liabilities
Contract liabilities
Provisions
Borrowings
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
65
2019
$’000
22,681
8,042
-
-
2018
$’000
21,243
6,319
141
411
30,723
28,114
9,979
565
15,314
4,229
30,087
11,469
521
14,203
4,185
30,378
60,810
58,492
4,845
17,366
14
20
1,210
23,455
802
502
4
1,308
4,173
18,325
12
-
1,078
23,588
129
522
18
669
24,763
24,257
36,047
34,235
34,374
8,477
(6,804)
34,233
8,618
(8,616)
36,047
34,235
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 33. Cash flow information
Reconciliation of profit/(loss) after income tax to net cash from operating activities
Profit/(loss) after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Share of profit of associates
Share-based payments
Foreign exchange differences
Net loss on disposal of plant and equipment
Non-cash income
Non-cash customer contract
Net loss on disposal of investments
Change in operating assets and liabilities
Decrease/(increase) in trade and other receivables
Decrease in income tax refund due
Decrease in deferred tax assets
Increase in other operating assets
Increase/(decrease) in trade and other payables
Increase/(decrease) in provision for income tax
Increase/(decrease) in employee benefits
Decrease in other provisions
Increase/(decrease) in other operating liabilities
Net cash from operating activities
Non-cash investing and financing activities
Shares issued under employee share plan
Changes in liabilities arising from financing activities
Consolidated
Balance at 1 July 2017
Net cash used in financing activities
Balance at 30 June 2018
Net cash used in financing activities
Balance at 30 June 2019
Consolidated
2019
$’000
2018
$’000
5,911
(18,683)
9,131
-
-
(74)
-
(192)
(689)
-
(4,223)
-
981
(280)
518
(211)
203
(110)
1,211
8,285
(567)
358
257
5
(58)
(407)
25,259
1,405
1,298
1,825
(990)
(996)
1,168
(50)
(268)
(3,829)
12,176
14,012
Consolidated
2019
$'000
2018
$'000
141
141
Finance lease
payable
$'000
Bank loans
$'000
40
(10)
30
(12)
18
9,500
(9,500)
-
-
-
Total
$'000
9,540
(9,510)
30
(12)
18
66
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 34. Share-based payments
The share-based payment expense for the year was $Nil (2018: $358,000).
An equity incentive plan has been established by the Group, whereby the Group may, at the discretion of the Board, grant performance
rights and options over ordinary shares in the Company ('awards') to certain key management personnel and employees of the Group.
The awards are issued for nil consideration and are granted in accordance with performance guidelines established by the Board.
Set out below are summaries of options/awards granted under the plan:
2019
Grant date
Expiry date
Exercise price
02/09/2016
21/11/2016
31/08/2017
09/11/2017
23/08/2018
09/11/2018
19/11/2018
Total
02/09/2020
02/09/2020
31/08/2021
31/08/2021
23/08/2022
23/08/2022
23/08/2022
$1.26
$1.26
$1.42
$1.42
$1.75
$1.75
$1.75
Balance at
the start of
the year
2,334,525
2,015,419
3,063,221
2,644,509
-
-
-
-
-
-
-
1,398,858
2,867,647
710,717
10,057,674
4,977,222
Weighted average exercise price
$1.35
$1.75
Granted
Exercised
Expired/
forfeited/
other
Balance at the
end of the
year
-
-
-
-
-
-
-
-
-
(1,281,938)
-
(1,682,081)
-
-
-
-
1,052,587
2,015,419
1,381,140
2,644,509
1,398,858
2,867,647
710,717
(2,964,019)
12,070,877
$1.35
$1.40
2018
Grant date
Expiry date
Exercise price
Balance at the
start of the
year
Granted
Exercised
02/09/2016
21/11/2016
31/08/2017
09/11/2017
Total
02/09/2020
02/09/2020
31/08/2021
31/08/2021
$1.26
$1.26
$1.42
$1.42
2,334,525
2,015,419
-
-
-
-
3,704,081
2,644,509
4,349,944
6,348,590
Weighted average exercise price
$1.26
$1.42
Outstanding options/awards vested and exercisable as at 30 June 2019: Nil (2018: Nil).
-
-
-
-
-
-
Expired/
forfeited/
other
Balance at the
end of the year
-
-
(640,860)
-
2,334,525
2,015,419
3,063,221
2,644,509
(640,860)
10,057,674
$1.42
$1.35
The weighted average share price during the financial year was $1.14 (2018: $1.29). The weighted average remaining contractual life of
options/awards outstanding at the end of the financial year was 2.14 years (2018: 2.74 years).
Set out below are summaries of performance rights granted under the plan:
2019
Grant date
Expiry date
Exercise price
21/11/2016
19/11/2016
01/09/2019
14/10/2019
$0.00
$0.00
Total
Balance at
the start of
the year
100,000
400,000
500,000
67
Granted
Exercised
Expired/
forfeited/
other
Balance at the
end of the
year
-
-
-
-
-
-
-
-
-
100,000
400,000
500,000
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 34. Share-based payments (continued)
2018
Grant date
Expiry date
Exercise price
21/11/2016
19/11/2016
01/09/2019
14/10/2019
$0.00
$0.00
Total
Balance at the
start of the
year
100,000
400,000
500,000
Granted
Exercised
Expired/
forfeited/
other
Balance at the
end of the year
-
-
-
-
-
-
-
-
-
100,000
400,000
500,000
Performance rights vested and exercisable as at 30 June 2019 Nil (2018: Nil). The weighted average remaining contractual life of
performance rights outstanding at the end of the financial year was 0.27 years (2018: 1.27 years).
For the options granted during the current financial year, the valuation model inputs used to determine the fair value at the grant date, are
as follows:
Grant date
Expiry date
Share price at
grant date
Exercise
price
Expected
volatility
Dividend
yield
Risk-free
interest rate
Fair value at
grant date
23/08/2018
09/11/2018
19/11/2018
23/08/2022
23/08/2022
23/08/2022
$1.22
$1.13
$1.15
$1.75
$1.75
$1.75
30.00%
30.00%
30.00%
-
-
-
2.23%
2.24%
2.19%
$0.170
$0.128
$0.133
The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future
trends, which may not necessarily be the actual outcome.
Additional equity incentives
The share-based payment expense for the year includes the accounting expense associated with share-based incentives expected to be
issued in future periods as part of retention and reward arrangements with senior executives. On 25 February 2019 it was determined to
issue 50,000 fully paid ordinary shares on 20 February 2020 and on 5 September 2018 it was determined to issue 250,000 fully paid
ordinary shares on 19 November 2021, subject in each case, to the continued employment of the relevant senior executive on the proposed
issue date. The shares will be issued for nil consideration.
68
3P Learning Limited
Notes to the financial statements
30 June 2019
Note 35. Earnings per share
Profit/(loss) after income tax for the year
Non-controlling interest
Profit after income tax expense attributable to the owners of 3P Learning Limited
Consolidated
2019
$’000
2018
$’000
5,911
(18,683)
-
(5)
5,911
(18,688)
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
139,312,800
139,213,348
Adjustments for calculation of diluted earnings per share:
Options/rights over ordinary shares
143,259
-
Weighted average number of ordinary shares used in calculating diluted earnings per share
139,456,059
139,213,348
Basic earnings per share
Diluted earnings per share
Cents
Cents
4.24
4.24
(13.42)
(13.42)
Note 36. Events after the reporting period
No matter or circumstance has arisen since 30 June 2019 that has significantly affected, or may significantly affect the Group's operations,
the results of those operations, or the Group's state of affairs in future financial years.
69
3P Learning Limited
Directors' declaration
30 June 2019
In the directors' opinion:
•
•
•
•
•
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June 2019 and of
its performance for the financial year ended on that date;
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable; and
at the date of this declaration, there are reasonable grounds to believe that the members of the Extended Closed Group will be
able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee
described in note 32 to the financial statements.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Samuel Weiss
Chairman
22 August 2019
Sydney
70
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
71
►
►
►
►
►
►
►
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
72
►
►
►
►
►
►
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
73
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
74
(cid:120)
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
75
3P Learning Limited
Shareholder information
30 June 2019
The shareholder information set out below was applicable as at 17 July 2019.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total
Holding less than a marketable parcel
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
J P MORGAN NOMINEES AUSTRALIA LIMITED
NATIONAL NOMINEES LIMITED
MUTUAL TRUST PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMS PTY LTD
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS (NZ) LTD
NEWECONOMY COM AU NOMINEES PTY LIMITED
SARGON CT PTY LTD
MUTUAL APPRECIATION SOCIETY PTY LIMITED
MR JONATHAN CLAUDE KENNY
LEOPARD CAPITAL PTY LTD
MS KATHRYN PIKE
LCONE PTY LTD
MR KEI YAN CHENG
MATTHEW CHARLES GOODSON & DIANNA DAWN PERRON
COLENEW PTY LIMITED
MRS DENISE ANN QUINN
MAPTEK PTY LIMITED
Total
Number of
holders of
ordinary
shares
Number of
holders of
options over
ordinary
shares
409
415
179
178
34
1,215
246
-
-
-
-
4
4
-
Ordinary shares
Number held
% of total
shares issued
63,278,692
26,426,416
14,161,431
8,223,826
5,015,040
4,297,285
2,302,967
1,520,963
628,157
557,475
516,672
415,009
404,920
323,594
306,759
284,280
200,000
191,000
184,331
183,371
45.42
18.97
10.16
5.90
3.60
3.08
1.65
1.09
0.45
0.40
0.37
0.30
0.29
0.23
0.22
0.20
0.14
0.14
0.13
0.13
129,422,188
92.87
76
3P Learning Limited
Shareholder information
30 June 2019
Unquoted equity securities
Share options over ordinary shares
Performance rights over ordinary shares
Substantial holders
Substantial holders in the Company are set out below:
Viburnum Funds Pty Ltd
National Nominees Ltd ACF Australian Ethical Investment Ltd
Sterling Equity Pty Ltd
SmallCo Investment Manager Limited
Schroder Investment Management Australia Ltd
FIL Limited
Voting rights
The voting rights attached to ordinary shares are set out below:
Number on
issue
Number of
holders
12,070,877
500,000
4
1
Ordinary shares
Number held
% of total
shares issued
27,506,361
17,964,903
17,226,590
13,267,891
11,022,467
10,395,154
19.74
12.89
12.36
9.52
7.91
7.46
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have
one vote.
Options and performance rights
Options and performance rights carry no voting rights.
There are no other classes of equity securities.
77
3P Learning Limited
Corporate directory
30 June 2019
Directors
Samuel Weiss - Independent Non-Executive Chairman
Rebekah O’Flaherty - Chief Executive Officer
Roger Amos - Independent Non-Executive Director
Claire Hatton - Independent Non-Executive Director
Mark Lamont - Independent Non-Executive Director
Company secretary
Marta Kielich
Registered office and
Principal place of business
Share register
Auditor
3P Learning Limited
Level 18, 124 Walker Street
North Sydney NSW 2060
Head office telephone: 1300 850 331
The Registrar
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000
Share registry telephone: 1300 554 474
Ernst & Young
200 George Street
Sydney NSW 2000
Stock exchange listing
3P Learning Limited shares are listed on the Australian Securities Exchange
(ASX code: 3PL)
Website
http://www.3plearning.com/
Corporate Governance Statement Corporate governance statement which was approved at the same time as the Financial
Statements can be found at http://www.3plearning.com/investors/ governance/
78
the award-winning team behind
3P Learning
1300 850 331
1300 762 165
customerservice@3plearning.com.au
www.3plearning.com