Annual
Report
2017
CLASS LIMITED
ACN 116 802 058
Table of contents
Financial highlights
Chairman’s letter
CEO’s report
Financial report 2017
Shareholder information
Corporate directory
Class Annual Report 2017 1
2
4
5
9
63
67
2 Class Annual Report 2017
Financial highlights
Year ended 30 June 2017
$29.20m 28%
REVENUE GROWTH
IN 2017
+6.47m from $22.73m
$13.97m 39%
EBITDA*
GROWTH
IN 2017
+3.92m from $10.05m
* All references are before one-off expenses relating to the initial public offering. They are non-IFRS measures and are used internally by
management to assess the performance of the business and have been extracted or derived from the full year financial report.
Class Annual Report 2017 3
$11.7m
NPBT*
36%
+3.1m from $8.6m
$8.0m
NPAT*
37%
+2.2m from $5.8m
6.8c
BASIC EPS*
6.7c
DILUTED EPS*
31%
+1.6c from 5.2c
31%
+1.6c from 5.1c
5.0c
DIVIDEND
34%
+1.25c from 3.75c
* All references are before one-off expenses relating to the initial public offering. They are non-IFRS measures and are used internally by
management to assess the performance of the business and have been extracted or derived from the full year financial report.
4 Class Annual Report 2017
Chairman’s letter
Dear Shareholder
On behalf of my fellow directors, I am pleased to present our annual report for the year ended 30 June 2017 and to
announce net profit after tax of $7.988 million, up 37%1 on the prior year.
In addition to increased profit and a record 31,503 new accounts added to the platform, we have set the company
up to deliver further growth in coming years. With over 140,000 SMSFs now administered on the Class platform,
our market share has increased from 19% to 24% of the estimated 594,000 SMSFs.
Continued investment in product development has been rewarded with significant industry recognition, including
the Investment Trends SMSF Software Award, the third year in a row we have received this honour. We also
received the SMSF Adviser SMSF Software Provider of the Year Award for the fourth year running.
As well as significant investment in the Class Super product, we continue to invest in Class Portfolio with additional
staff and resources allocated to its development. Class Portfolio accounts grew by 78%, with 26% of Class Super
subscribers now also using Class Portfolio.
We are moving from quarterly to six monthly dividends in line with our financial reporting periods and you will
receive the equivalent of an extra quarter dividend in September to provide an orderly transition.
I would like to thank our shareholders for your continued support and we look forward to seeing you at the Annual
General Meeting on 16 October 2017.
We would also like to thank our 1,164 subscribers, and to reconfirm our ongoing commitment to further developing
our products to make your businesses more streamlined and profitable.
To Class employees, congratulations on another record-breaking year and thank you for your dedication to the
company.
Yours sincerely
Matthew Quinn
Chairman
1 Reference is before one-off expenses relating to the initial public offering. This is a non-IFRS measure and is used internally by
management to assess the performance of the business and has been extracted or derived from the full year financial report.
Class Annual Report 2017 5
CEO’s report
I would like to join the Chairman in welcoming shareholders to the annual report for the year ending 30 June 2017, our
first full year as a publicly listed company.
In a year where the industry experienced the most significant reforms in a decade, Class has continued to increase
market share and deliver record results.
Financial Results
Class Limited (Class) has posted a 37%2 increase in profit to $7.988 million for the full year ended 30 June 2017, driven
by a record increase in accounts.
The increase is compared to the FY16 numbers prior to one-off costs in relation to the company’s Initial Public Offering
(IPO) in that year. Earnings before interest, tax, depreciation and amortisation (‘EBITDA’) grew 39% to $13.973 million.
Operating revenue grew by 28% to $28.893 million. This was primarily driven by an increase in accounts which grew by
a record 31,503 in the last 12 months.
Expenses excluding amortisation and depreciation increased by $2.350 million, of which $1.274 million was in
relation to employee costs. This was driven by continued investment in the Class Super product, Class Portfolio
product and customer acquisition with the expansion and restructuring of the sales team and additional marketing
and implementations staff.
The Super Reforms had a major impact on the Class Super product and required an immediate and significant
investment in product development. The increased costs required have been spread across the FY17 and
FY18 years.
While the reforms are time consuming for the industry in the short-term, they have increased the need for Class
software and we expect they will be a positive impact in the longer-term.
Accounts and Market Share
At 30 June 2017, Class had a total of 143,944 accounts (30 June 2016: 112,441) including 140,690 Self Managed Super
Funds (SMSFs) on the Class Super product. Class Super’s share of the SMSF market at 30 June 2017 was 23.7%
(estimated total market 594,000 SMSFs).
SMSF Software Market Share
By estimated number of SMSFs administered on each system3
DIY unchanged
at 15%
Excel down
from 15% to 13%
Class up from
19% to 24%
Other SMSF
Software down
from 51% to 48%
2 Reference is before one-off expenses relating to the initial public offering. This is a non-IFRS measure and is used internally by management to
assess the performance of the business and has been extracted or derived from the full year financial report.
3 Estimated from company announcements and various Investment Trends surveys of SMSF Investors, Planners and Accountants in 2016 and
2017. DIY = SMSFs administered directly by investors. Excel = SMSFs administered by accountants on Excel and general accounting software.
6 Class Annual Report 2017
6 Class Annual Report 2017
CEO’s report continued
Class Portfolio subscriptions continue to grow. At 30 June 2017, there was a total of 3,254 investment accounts
(30 June 2016: 1,827), a 78% increase over the period.
Quarterly Net Account Growth
s
t
n
u
o
c
c
A
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
September
December
March
June
FY 14
FY 15
FY 16
FY 17
Operational Highlights
Class’ flagship product, Class Super, has once again received significant industry recognition this year, winning the
2017 Investment Trends Highest Overall Client Satisfaction: SMSF Software Award4 for the third year running. The
award recognises that Class Super users were the most satisfied with their SMSF software compared with all other
providers.
Class Super scored above average for all industry features in the Investment Trends awards again this year. These
features included the product’s level of automation, smartphone/tablet functionality, data feeds, integration with
actuarial and other document providers, timeliness of reporting, ease of generating tax returns, value for money,
quality of training for software, and technical support.
More Class Super users were able to cite new features, processes and innovations than users of any other SMSF
software provider. In the past 12 months, these improvements included improved client access functionality,
changes to customised reporting, increased availability of feeds and greater automation.
In addition to the 2017 Investment Trends award, Class also won the 2017 SMSF Adviser SMSF Software Provider of
the Year Award, for the fourth year running.
As well as industry recognition, our Customer Service Satisfaction surveys continue to show that accountants and
advisers rate Class very highly, particularly in the areas of ease of use, efficiency, support, staff satisfaction with
Class, implementation and transitions.
These high ratings continue to be reflected in our retention rate, which has remained above 99% in terms of
accounts.
4 Source: Investment Trends 2017 SMSF Accountant Report.
Class Annual Report 2017 7
Retention of Accounts (%)
98.9%
99.3%
99.8%
99.8%
99.4%
s
e
t
a
R
n
o
i
t
n
e
t
e
R
100%
99%
98%
97%
96%
95%
2013
2014
2015
2016
2017
Retention Rates
Financial Year
Retention Rate = (Accounts for the period less Accounts lost due to subscriber terminations) / Accounts for the period
Accounts = billable accounts, accounts lost = the maximum number of accounts the subscriber had during the year
Class has previously advised the market that AMP’s SuperIQ business has provided notice on their licence
agreement which covers over 5,000 SMSFs (of the approximate 11,000 SMSFs on Class Super under AMP’s various
licenses). We have also advised that we expected AMP to transfer all of the affected SMSFs onto its own SMSF
platform by early November 2017; this is no longer the case.
Class and AMP’s SuperConcepts business are finalising the consolidation of the various Class licences that
SuperConcepts hold into one standard contract covering all the SuperConcepts’ brands.
As a result of this change there is no longer a set end-date for the migration of the SuperIQ SMSFs off the Class
platform. SuperConcepts does however retain the right, under the new agreement, to provide a standard 90 days’
notice of termination which is the same as a typical Class customer.
Class onboarded a record number of SMSFs over the past 12 months. Since 1 July 2016, the total number of
accounts on Class Super has grown by 27.2%. This growth was again driven by the expansion in our sales team,
increased marketing efforts and an increase in the rate of cloud adoption by accountants.
Innovation
Class has twice been nominated as one of Australia’s most innovative companies by The Australian Financial
Review. Innovation is key to how our business is structured and is what sets us apart from our competitors.
Class Super underwent significant development during the year to help accountants and SMSF administrators
manage the Super Reforms. New functionality includes bulk commutation of pension accounts, Capital Gains Tax
relief report for proportionate funds and new data filters on the member console.
Class made an investment of $5.217 towards development this period, an increase of 17.3%, which included a
significant commitment towards innovation.
8 Class Annual Report 2017
CEO’s report continued
As well as these improvements, more new features were added to Class Super during the year. A couple are
listed below:
Consolidated Reporting – accountants and advisers can now administer and report on investors’ SMSF and
non-SMSF wealth using one software platform. They can easily report back to investors on their total investment
performance and process transactions for all their accounts without moving between different platforms.
Investor communication tools – new communication channels for the timely, secure exchange of financial
information, including documents; two-way messaging between accountants and investors; a dedicated mobile
app for investors; and document management enhancements to facilitate simpler document exchange.
Innovation doesn’t only relate to our software, it is embedded as a key part of our culture. Our internal Change
Champion awards are awarded to staff annually in recognition of significant contribution to innovation and change
within the business.
Thank you
The Class journey has been an exciting one so far and we are positive about the opportunities that lie ahead for
further growth and success. We will continue to provide shareholders with regular updates throughout the year.
On behalf of the executive team I would like to thank all our shareholders, subscribers, partners and employees for
your continued support.
Kevin Bungard
Chief Executive Officer and Managing Director
Financial
report 2017
10 Class Annual Report 2017
Class Limited
Directors' report
30 June 2017
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter
as the 'Group') consisting of Class 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 2017.
Directors
The following persons were directors of Class Limited during the whole of the financial year and up to the date of this
report, unless otherwise stated:
Matthew Quinn - Chairman
Kevin Bungard
Anthony Fenning
Kathryn Foster
Rajarshi Ray
Nicolette Rubinsztein (appointed on 1 April 2017)
Barry Lambert (resigned on 9 February 2017)
Roderick Kibble (resigned on 15 December 2016)
Principal activities
During the financial year the principal continuing activities of the Group were to develop and distribute cloud-based
accounting, investment reporting and administration software, namely Class Super and Class Portfolio.
Review of operations
Sales revenue
Cost of undertaking business
EBITDA*
Interest revenue
Depreciation and amortisation
Tax expense*
Net profit after tax*
One-off IPO expenses**
Statutory net profit after tax
2017
$'000
2016
$'000
Change
$'000
Change
%
28,893
(14,920)
13,973
313
(2,584)
(3,714)
7,988
-
7,988
22,563
(12,512)
10,051
168
(1,631)
(2,761)
5,827
(617)
5,210
6,330
(2,408)
3,922
145
(953)
(953)
2,161
617
2,778
28%
19%
39%
86%
58%
35%
37%
(100%)
53%
*
**
All references are before one-off initial public offering ('IPO') expenses. They are non-IFRS measures and are used
internally by management to assess the performance of the business and have been extracted or derived from the
financial report.
One-off IPO expenses net of tax benefits.
Basic Earnings per share before one-off IPO expenses amounted to [6.82] cents (2016: 5.19 cents).
Basic Earnings per share after one-off IPO expenses amounted to [6.82] cents (2016: 4.64 cents).
Refer to Chairman's letter and CEO's report for further commentary on the results
Class Limited
Directors' report
30 June 2017
Dividends
Dividends paid during the financial year were as follows:
Final dividend for the year ended 30 June 2016 of 1 cent per ordinary share
(2016: 0.75 cents)
Interim dividend for the year ended 30 June 2017 of 1 cent per ordinary share
(2016: 0.75 cents)
Interim dividend for the year ended 30 June 2017 of 1 cents per ordinary share
(2016: 1 cent)
Interim dividend for the year ended 30 June 2017 of 1 cents per ordinary share
(2016: 1 cent)
Class Annual Report 2017 11
Consolidated
2017
$'000
2016
$'000
1,168
1,168
1,168
1,176
835
835
1,168
1,168
4,680
4,006
On 15 August 2017, the directors declared a fully franked final dividend for the year ended 30 June 2017 of 2 cents per
ordinary share with payment date of 5 September 2017 to eligible shareholders on the register as at 17 August 2017. This
equates to a total distribution of $2,350,000, based on the number of ordinary shares on issue as at 30 June 2017. The
financial effect of dividends declared after the reporting date is not reflected in the 30 June 2017 financial statements and
will be recognised in subsequent financial reports.
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
Apart from the dividend declared as discussed above, no other matter or circumstance has arisen since 30 June 2017 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
Information on likely developments in the operations of the Group and the expected results of those operations are
contained in the Chairman's letter and CEO’s report.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
12 Class Annual Report 2017
Class Limited
Directors' report
30 June 2017
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Matthew Quinn
Non-Executive Chairman
First Class Honours Degree in Chemistry & Management Science. Chartered
Accountant.
Mr. Quinn joined the Board in July 2015. He was formerly managing director of
Stockland, an ASX top 50 company, from 2000 to 2013. He has an extensive
background in commercial, retail, industrial and residential property investment and
development. He is now a Non-Executive Director of CSR Limited and Urban Growth
NSW, a state owned corporation and is Chairman of Carbonxt Group Limited and
mPort Ltd. He was National President of the Property Council of Australia from 2003
to 2005 and a director of the Business Council of Australia in 2012. Mr Quinn is
involved in a number of not-for-profits and is on the board of the Australian Business
and Community Foundation.
Non-executive director CSR Limited (ASX: CSR)
Member of the Nomination Remuneration and Human Resources Committee
60,000
Other current directorships:
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Name:
Title:
Experience and expertise:
Kevin Bungard
Chief Executive Officer and Managing Director ('CEO')
Mr Bungard is a highly regarded industry expert in cloud technology systems, with
more than 30 years’ experience developing software solutions and applying
technology in the Australian financial services and superannuation administration
industries.
Mr Bungard joined the Group in 2008 as Chief Operating Officer and has overseen
the commercialisation, launch and rapid growth of Class Super. In April 2014, Mr
Bungard was appointed Chief Executive Officer and has continued to play an
instrumental role in driving and delivering key innovation and successes for the
Group. Mr Bungard also has responsibility, together with the Company Secretary, for
human resource issues within the Group.
Prior to joining the Group, Mr Bungard was a General Manager at the IQ Group where
he managed the delivery of technology and business process outsourcing solutions
to Australia’s largest superannuation funds and their administrators. Significant
projects included the development, sale and commercialisation of enterprise
software solutions to Bravura and Australian Unity. Prior to his role at IQ Group, Mr
Bungard was involved in major projects with Westfield, AMP, Macquarie and many of
Australia’s largest financial institutions.
Other current directorships:
None
Former directorships (last 3 years): None
Interests in shares:
Interests in options:
1,905,572
975,860
Name:
Title:
Qualifications:
Experience and expertise:
Anthony Fenning
Non-Executive Director
Bachelor of Economics (BEc), Bachelor of Laws (LLB) and an MBA in Management at
the Australian Graduate School of Management.
Mr Fenning joined the Board in July 2015. He is the former Chief Executive Officer of
Shadforth Financial Group (SFG), a leading financial and business advisory firm.
Appointed in 2006, he took on the role of Managing Director of SFG Australia Ltd
from 2011 to 2014, before the acquisition in 2014 of the business by IOOF. Previously,
he was the Chief Executive Officer at Tynan Mackenzie and before that had a career
in law and banking.
None
Other current directorships:
Former directorships (last 3 years): SFG Australia Ltd
Special responsibilities:
Interests in shares:
Member of the Audit and Risk Committee
None
Class Annual Report 2017 13
Class Limited
Directors' report
30 June 2017
Experience and expertise:
Name:
Title:
Qualifications:
Kathryn Foster
Non-Executive Director
Bachelor of Science (BSc) - International Marketing from Oregon State University,
Associate of Science (ASc) - Computer Science and Information Systems from
Shoreline Community University.
Ms Foster joined the Class Board in July 2015. Ms Foster has over 20 years’
experience creating and running large internet based businesses. Prior to becoming a
professional director, Ms Foster was Senior Director of Microsoft Store online where
she managed the sales and merchandising team for Microsoft Store online across 232
geographies. As the Senior Director, she was responsible for an annual revenue
budget in the low billions of dollars. As Senior Director of e-commerce strategy in
Supply Chain, and prior to that, for the inception of the Xbox Games Marketplace, Ms
Foster set business vision, strategy and drove the technical execution around digital
and physical supply chain technology and operations to enable Xbox’s billion-dollar
business globally.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Chairperson of the Nomination Remuneration and Human Resources Committee
522,208
Experience and expertise:
Name:
Title:
Qualifications:
Rajarshi Ray
Non-Executive Director
Bachelor of Information Technology and Graduate Diploma in Accounting. Fellow of
Chartered Accountants Australia and New Zealand. Graduate Diploma from the
Financial Services Institute of Australia. Graduate of the Australian Institute of
Company Directors.
Mr Ray joined the Board in 2008. He is a former Director / Executive at American
Express and Coopers & Lybrand.
In addition to Class, he is Chairman, Venus Shell Systems; and Non-Executive
Director, Heffron and is also involved in a number of not-for-profits.
He holds post graduate qualifications in Information Technology, Accounting and
Finance. He is a Fellow of the Institute of Chartered Accounts, a Member of the
Financial Institute of Australia and a Graduate of the Australian Institute of Company
Directors.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Chairman of the Audit and Risk Committee
1,248,848
Experience and expertise:
Name:
Title:
Qualifications:
Nicolette Rubinsztein
Non-Executive Director
Qualified actuary, an executive MBA from the Australian Graduate School of
Management and a graduate of the Australian Institute of Company Directors.
Ms Rubinsztein joined the Board in April 2017. Ms Rubinsztein is a non-executive
director of UniSuper, OnePath Insurance, SuperEd and the Actuaries Institute. In her
executive career, she held senior roles at CBA / Colonial First State, BT Funds
Management and Towers Perrin. Ms Rubinsztein was also a director of the
Association of Superannuation Funds of Australia (ASFA) for eight years and chair of
its Super System Design Council.
None
Other current directorships:
Former directorships (last 3 years): None
Special responsibilities:
Member of the Audit and Risk Committee and member of the Nomination
Remuneration and Human Resources Committee
None
Interests in shares:
'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.
14 Class Annual Report 2017
Class Limited
Directors' report
30 June 2017
Chief financial officer and company secretary
Glenn Day joined the Group in September 2008. Mr Day holds a Bachelor of Business, majoring in Accounting and is a
member of CPA Australia.
Mr Day is responsible for the financial management of the Group, its corporate affairs and company secretarial matters. Mr
Day also has responsibility, with the Chief Executive Officer, for human resources issues within the Group. Prior to joining
the Group, Mr Day was the Head of Finance of an ASX-listed entity and has more than 15 years' experience in the financial
services and superannuation industries.
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 2017, and the number of meetings attended by each director were:
Matthew Quinn
Kevin Bungard
Anthony Fenning
Kathryn Foster
Rajarshi Ray
Nicolette Rubinsztein
Barry Lambert
Roderick Kibble
Full Board
Attended
9
10
9
10
10
3
6
5
Held
10
10
10
10
10
3
6
5
Audit and Risk Committee
Attended
3
-
4
-
4
1
-
-
Held
3
-
4
-
4
1
-
-
Nomination Remuneration
and Human Resources
Committee (‘NRHRC’)
Held
5
-
-
5
1
2
2
1
Attended
5
-
-
5
1
2
2
-
Remuneration report (audited)
This remuneration report provides a summary of the Group’s remuneration policy and practices during the past financial
year as they apply to the Group’s directors and executives.
The remuneration report has been prepared in accordance with the requirements of section 300A of the Corporations Act
2001 and Corporations Regulation 2M.3.03 and has been audited by the Group’s external auditor.
The report contains an overview which is intended to provide a ‘plain English’ explanation for shareholders of the key
management personnel (KMP) and senior executives’ actual remuneration outcomes for the year ended 30 June 2017
(FY17) and the remuneration framework including proposed changes for the financial year ended 30 June 2018 (FY18).
Key management personnel (KMP) and senior executives
KMP, as defined by the Accounting Standard AASB 124 Related Party Disclosures (AASB 124), for the year ended 30 June
2017 are detailed in the table below.
The Group’s KMP are the non-executive directors, the chief executive officer/managing director and the chief financial
officer. This is consistent with the assessment performed for last year.
Key management personnel
Name
Non-executive directors (NEDs)
Matthew Quinn
Anthony Fenning
Kathryn Foster
Rajarshi Ray
Nicolette Rubinsztein
Barry Lambert
Roderick Kibble
Executive KMP
Kevin Bungard
Glenn Day
Position
Chairman
Director
Director
Director
Director
Director
Director
Chief Executive Officer & Managing Director (CEO)
Chief Financial Officer
Term as KMP
Full year
Full year
Full year
Full year
Appointed 3 April 2017
Resigned 9 February 2017
Resigned 15 December 2016
Full year
Full year
Overview of remuneration approach and framework
The Nomination, Remuneration and Human Resources Committee (NRHRC) is responsible for determining and reviewing
remuneration arrangements for directors and executives. The performance of the Group depends on the quality of its
directors and executives.
Class Annual Report 2017 15
Class Limited
Directors' report
30 June 2017
The Group’s remuneration framework is based on the principles that remuneration is performance driven, aligns with
shareholder interests and provides market competitive remuneration opportunities. The key features of the Group’s
executive remuneration and non-executive remuneration frameworks are outlined below, with further details provided in
the body of the report.
Remuneration type
The following are non-IFRS measures that are used to provide shareholders with a clear and transparent view of the
remuneration structure and how remuneration was paid to the executive KMP for the year ended 30 June 2017.
Fixed Remuneration
Short Term Incentive Consists of a cash bonus under the Group's 'Short Term Incentive Plan', and related
Consists of cash salary, fees and related superannuation contributions.
Long Term Incentive
superannuation contributions.
Consists of the value of LTIs that have vested and become unrestricted during the year, calculated
based on the number of options valued using the five-day volume weighted average price
(VWAP) prior to the latter of the vesting of the options, or removal of disposal restrictions.
Excludes the value of unvested or restricted LTIs at 30 June 2017.
The Group’s executive remuneration framework
Feature
Market positioning
Fixed and variable pay
mix
Short term incentive
(STI) plan
Long term incentive
(LTI) plan
Explanation
Fixed remuneration is positioned at the market median against the appropriate services index
for roles of comparative size, or relative to their counterparts in related industries.
Variable remuneration provides executives the opportunity to earn upper quartile total
remuneration for exceptional performance.
Total remuneration is comprised of fixed plus variable (or ‘at risk’) remuneration.
A significant proportion of the total remuneration opportunity for senior executives is variable
and ‘at risk’ based on performance.
The STI plan provides rewards to executives for achievement of business financial performance
metrics (60% weighting) and individual performance goals (40% weighting).
Weightings of 50% financial and 50% individual performance goals may apply to lower job
grades.
The Employee Share Option Plan (ESOP) provides the Group’s executives with grants of
options based on the recommendations of the NRHRC, having considered the individual’s
contribution to the Group’s performance. The board may specify vesting conditions for any
option granted and may, at its discretion, waive or vary these conditions in regard to any
option at any time.
The exercise price is based on a 10% compounding annual growth in the share price to the last
vesting date.
Non-executive director remuneration framework
Feature
Market comparison
Fee pool
Explanation
Non-executive directors are paid a base fee for service to the board.
The NRHRC may, from time to time, receive advice from independent remuneration
consultants to ensure the chairman and other non-executive directors' fees and payments are
appropriate and in line with the market for companies of a similar size and complexity.
The fee pool is currently $500,000 per annum including superannuation.
Actual Remuneration
Actual remuneration disclosure has been prepared to provide shareholders with a clear and transparent view of the
remuneration structure and how remuneration was paid to the executive KMP for FY17.
Actual remuneration received by executive KMP is set out in the table below. The remuneration disclosure is prepared on
the basis summarised under remuneration types above. No termination benefits were paid to executive KMP during the
year.
Actual remuneration received by executive KMP FY17
Fixed
remuneration
Kevin Bungard 308,198
223,795
Glenn Day
-
-
* There were no vested options that became unrestricted during the year
Short term
incentive
30,660
33,569
Long term
incentive
- *
- *
Other benefits
Total
338,858
257,364
Given the flat organisational structure of the Group and following a review of senior executives against the criteria for
determining executive KMP, only the CEO and chief financial officer qualify as executive KMP.
16 Class Annual Report 2017
Class Limited
Directors' report
30 June 2017
Remuneration framework changes
The board continually reviews the remuneration framework to ensure it supports the overall business strategy, is aligned
with shareholder interests, is competitive with market practices and is simple for both participants and shareholders to
understand. There were no significant changes to the remuneration framework as a consequence of the review undertaken
for FY17.
Remuneration Policy
Remuneration governance
The Group’s remuneration governance framework is set out below. Whilst the board retains ultimate responsibility, the
Group’s remuneration policy is implemented through the NRHRC. The composition and functions of the NRHRC, which
oversees remuneration issues and human resources matters, are set out in the charter available from the Class website.
The charter is reviewed each year.
Class Annual Report 2017 17
Class Limited
Directors' report
30 June 2017
The Group’s remuneration governance framework
The Group’s Board
•
Overall responsibility for the remuneration strategy and outcomes for executives and
non-executive directors.
•
Reviews and, as appropriate, approves recommendations from the Group’s NRHRC.
Nomination, Remuneration & Human Resources Committee (NRHRC)
Management and Board remuneration policy
Human Resources, Talent Management and
Diversity
Monitors, recommends and reports to the board
on:
Monitors, recommends and reports to the board
on:
•
•
•
•
•
•
•
Alignment of remuneration
incentive
policies and guidelines for executive
managers and senior employees with
long-term growth and
shareholder
value.
Superannuation arrangements.
Employee share plans.
Recruitment, retention and termination
policies and procedures
for senior
management.
Board remuneration including the terms
and conditions of appointment and
retirement, non-executive remuneration
within
by
shareholders.
aggregate
approved
induction of new non-
Overseeing
executive directors and evaluation of
board performance.
The remuneration of the CEO and senior
executives.
•
•
•
•
•
•
The adequacy of talent pools for senior
management succession.
policies and
The effectiveness of
diversity
including an annual assessment
performance against measurable
objectives
and
proportion of women at all levels.
the
the Group’s
initiatives,
of
relative
Management development frameworks
and individual development progress for
key talent.
Monitoring surveys conducted by the
Group in relation to the culture of the
organisation.
Initiatives to improve and drive a strong
performance culture.
Assessing performance against
Group’s
reporting requirements.
compliance with
the
external
CEO and Chief Financial Officer
External advisors
Makes recommendations to the NRHRC on:
•
•
•
•
Incentive targets and outcomes.
Remuneration policy for all employees.
Long term incentive participation.
Individual remuneration and contractual
arrangements for executives.
•
•
Provide independent advice, information
and
to
remuneration decisions.
recommendations
relevant
Throughout the year, the NRHRC and
management received information from
external provider Boyden ANZ Pty Ltd
related to remuneration market data and
director recruitment.
18 Class Annual Report 2017
Class Limited
Directors' report
30 June 2017
Remuneration strategy
The core elements of the Group’s remuneration strategy for the executive KMP and executives are outlined below.
Performance driven
Alignment with shareholder
interests
Market competitive remuneration
opportunities
Total target executive remuneration
Fixed
Fixed remuneration
Fixed remuneration is targeted at the
median of the market for
jobs of
comparable size and responsibility.
•
•
•
Base salary
Superannuation
Other short-term benefits
At risk
Group’s
Short term incentive
executives
The
participate
in an STI plan.
Typically, the STI plan is weighted
60% to financial metrics and 40%
to individual performance metrics.
Long term incentive
LTIs are provided through the ESOP and
are
linked to performance with an
exercise based on a 10% compounding
annual growth in the share price to the
last vesting date.
•
Cash
•
Equity
The key principles on which the Group’s executive remuneration policy is based are outlined below.
Key principles of the Group’s executive remuneration policy
Objective
Performance driven
Market competitive
remuneration
opportunities
Alignment with
shareholder interests
Explanation
Remuneration should reward executives based on annual performance against business
plans and longer-term shareholder returns. The variable components of remuneration
(both short term and long term) are driven by challenging targets focused on both
external and internal measures of financial and non-financial performance.
A significant proportion of executive remuneration is ‘at risk’.
Remuneration opportunities, including those elements which can be earned subject to
performance, are set at competitive levels that will attract, motivate and retain high
quality executives.
Executive remuneration is reviewed annually. The Group aims to provide market-
competitive remuneration against jobs of comparable size and responsibility as follows:
•
•
fixed remuneration for executives is targeted at market median; and
variable remuneration (through STI and LTI) provides the opportunity to earn
total remuneration (fixed remuneration plus variable remuneration) that reaches
the top quartile of the market for exceptional performance.
Executives’ remuneration is aligned with shareholder interests through a significant
emphasis on variable remuneration. Incentive plans and performance measures are
aligned with the Group’s short and long-term success.
Ownership of the Company’s shares is encouraged through the use of equity as the
vehicle for the LTI plan for executive KMP and senior executives.
Composition of remuneration
The components of the fixed and variable or ‘at risk’ remuneration (STI and LTI) are detailed below.
(i)
Fixed remuneration
Fixed remuneration is made up of base salary, superannuation and other short-term benefits provided by the Group.
As outlined above, fixed remuneration is targeted at the median of the market for jobs of comparable size and
responsibility. In some cases, superior performance or strong market demand for specific job categories may justify
above-median fixed remuneration.
Base salary is reviewed annually. There are no guaranteed base salary increases included in any executives’ contracts.
Class Annual Report 2017 19
Class Limited
Directors' report
30 June 2017
Details of the short-term incentive plan
(ii) At risk remuneration – short term incentive plan
Purpose
Frequency and
timing
Financial
measures
Individual
objectives used
(and rationale)
Assessment of
performance
against measures
To drive individual and team performance to deliver annual business objectives and increase
shareholder value.
Awards are determined on an annual basis with performance measured over the reporting period.
Payment is normally made in August following the end of the performance year.
The quantum of the STI pool is determined by the board. Typically, the STI plan is weighted 60%
to financial metrics and 40% to individual performance metrics.
The financial targets are set each year by the CEO, in consultation with the executives and are
approved by the board. The CEO’s targets are set each year by the board.
A financial performance gateway has been set by the board, below which no financial component
can be paid.
Individual objectives are set for each participant and are aligned to the business plan. These
objectives include customer satisfaction, leadership and development of people, sales targets,
operational improvement, product targets, growth and other personally attributable goals.
At the end of the Group’s performance period, each participant’s performance is assessed based
on financial results for the Group and individual objectives. A review by the CEO is undertaken to
determine performance against the relevant individual objectives for each senior executive.
The NRHRC makes recommendations to the board regarding KMP and senior executive STIs and
the overall STI pool in aggregate. STI assessments and recommendations are made by the
participant’s immediate manager, as he or she is best placed to assess the individual’s
performance. All recommendations for non-executive staff are reviewed and approved by the
senior executives, the chief financial officer and the CEO.
Payment for the individual component is normally dependent on the business financial result.
Should the Group fail to reach the financial performance gateway set by the board, then any
payment for the individual component will be at the discretion of the board.
(iii) At risk remuneration – long term incentive plan
• The Group’s LTI program aims to:
• drive performance and deliver strategic objectives that create long-term shareholder value;
• provide executives with the opportunity to build their interests in the Group’s equity; and
•
attract, motivate and retain the necessary talent to deliver and sustain business performance and increase returns
to shareholders.
All securities referred to in this report are granted by Class Limited.
Features of the long-term incentive plan – summary of the Employee Share Option Plan (ESOP)
Participation
Grant frequency
Type of award
Vesting and
performance
period
CEO, direct reports and selected key roles are eligible, subject to approval by the board.
Grants are made on an annual basis.
Grants of options are subject to service requirements and performance vesting criteria. If
performance conditions are met, the Company will either issue new shares or shares will be
purchased on market and transferred to participants. Refer to ‘Vesting and performance period’
below for more detail.
As at 30 June 2017, all unvested options were subject to a three-year vesting period.
Future options will vest in annual instalments.
All options are subject to disposal restrictions being the earlier of three years from grant date or
cessation of employment.
(iv) Other equity incentive plans
To provide employees, other than directors and senior executives, with the opportunity to own shares in the
company, the Group established the Class Limited Employee Share Plan (ESP). The ESP enables the Group to
issue shares to qualifying employees on a non-discriminatory basis. Each year, the board approves the issue of
shares up to a maximum of $1,000 in value (being the limit of the tax exemption) for each eligible participant.
Shares vest immediately upon acquisition by participants. The shares can only be sold three years after the date of
grant, unless the participant ceases employment prior.
The plans are designed to encourage share ownership for employees and therefore do not have any performance
conditions attached. Participants are entitled to dividends and other distributions and have full voting rights.
20 Class Annual Report 2017
Class Limited
Directors' report
30 June 2017
Linking remuneration to performance
A key underlying principle of the Group’s executive remuneration strategy is the link between company performance and
executive reward.
(i)
STI and LTI financial measures
STI payments are based on a variety of performance metrics, both financial and non-financial.
The key financial measure in FY17 for determining the value of STI payments was NPBT.
Building on the strong financial performance in FY16, the FY17 NPBT performance of the Group improved
significantly, increasing by 36% to $11.702 million (or increasing by 52% when the significant costs of the IPO are
considered for FY16). The improvements in financial performance and specifically NPBT results moderately exceeded
the NPBT target for STIs set by the board.
LTIs have been linked to company performance as follows:
• the value of options (under the ESOP) ultimately depends on share price performance; and
• the exercise price is based on a 10% compounding annual growth in the share price to the last vesting date.
The following table summarises the clear link between company performance and incentives awarded to executive KMP,
senior executives and other eligible employees:
Summary of financial performance and STIs and LTIs awarded
Financial Performance
STI
Year Revenue
(‘000)
NPBT
(‘000)
Earnings
Per Share
(cents)
Dividends
Per Share
(cents)
Share
price
($)
Executive
KMP ($)
LTI
All eligible
employees
STI as a %
of NPBT
FY17
FY16
FY15
28,893
22,563
15,598
11,702
8,588
5,186
6.82
5.19
3.17
5.00
3.75
2.25
$3.00
$3.30
N/A
64,229
43,800
40,515
5.2%
4.8%
4.9%
Vested &
unrestricte
d value –
Executive
KMP
N/A
N/A
N/A
Vested &
unrestricted
value – All
eligible
employees ($)
1,120,716
N/A
N/A
1. NPBT and EPS are calculated before significant items (FY16 STI as % of NPBT after significant items totals 5.2%).
2. Closing share price at 30 June.
3. Represents approved and expensed STI for FY17 but at the time of writing this report, this amount has not yet
been paid.
4. Represents the value of ESOPs which became vested and unrestricted in the period, valued using the VWAP for
the five days prior, less the exercise price.
5. STI excludes any sales commission paid/ payable, but includes superannuation paid on bonus payments and the
value of the shares issued under the ESP.
Class Annual Report 2017 21
Class Limited
Directors' report
30 June 2017
(ii) STI non-financial measures
For FY17, payments approved by the board for the non-financial component of the STI averaged across executive
KMP and senior executives were above target. The following table provides some examples of key performance
measures used in FY17 to assess executive performance in the non-financial component of the STI.
Non-financial measures and FY17 performance
Performance
area
People and
Culture
Measure
Culture
Leadership Development
Succession
Diversity
Innovation and
Growth
Product Development
Growth from New Business
Operational improvement
Customer
Customer Service
Customer focused culture
Performance
Above target
The Group takes part in the annual Great Place to Work® Trust
Index© Employee Survey which is carried out by Great Place to
Work® Australia. Over 95% of staff completed the survey this
year with no significant variance in engagement levels between
genders.
Overall employee satisfaction rating increased to 89 (2016: 86)
with the company scoring extremely high in the areas of
diversity including age (95), race (96), gender (97) and sexual
orientation (97).
Female participation in the business has remained stable overall
at approximately 40% with significant increases at board and
management level.
The Group provides regular compulsory training to staff and
management to promote appropriate behaviour in the office.
On target
The business has targets to develop and introduce new
products and services. Over the period new features were
added to Class Super including consolidated reporting and
investor communication tools and a dedicated mobile app for
investors.
The Group commenced the business transformation program to
accelerate innovation, growth and operational improvements.
Above target
The Group monitors a range of customer service metrics during
the year.
Class Super won the 2017 Investment Trends Highest Overall
Client Satisfaction: SMSF Software Award for the third year
running as well as the SMSF Adviser Software Provider of the
Year Award, for the fourth year running.
Specific customer objectives are now included in the FY18 STI
plan.
These all provide greater certainty, visibility and improved
service for our customers
22 Class Annual Report 2017
Class Limited
Directors' report
30 June 2017
Use of remuneration consultants
During the financial year ended 30 June 2017, the Group engaged Boyden ANZ Pty Limited ('Boyden') to recruit a Non-
Executive Director. Boyden also provided recommendations on the level of remuneration for the Group’s Directors. These
services were performed at no additional cost. The recommendations made by Boyden were reviewed by the NRHRC
which recommended an increase in Director remuneration effective 1 April 2017. Total director fees were kept within the
limits previously approved by shareholders.
Voting and comments made at the Company's 2016 Annual General Meeting ('AGM')
At the 2016 AGM, shareholders voted to approve the adoption of the remuneration report for the year ended 30 June
2016.
The Company did not receive any specific feedback at the AGM regarding its remuneration practices.
Details of statutory remuneration
Amounts of statutory remuneration
Details of the statutory remuneration of KMP of the Group are set out in the following tables.
The KMP of the Group consisted of the directors of Class Limited and the chief financial officer.
Details of remuneration
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
and fees
$
Cash
bonus
$
Non-
Super-
monetary annuation
$
$
Long
service
leave
$
Equity-
settled
options
$
Total
$
81,625
65,000
65,000
65,000
20,000
55,125
27,581
-
-
-
-
-
-
-
305,623
28,000
204,836
889,790
30,657
58,657
-
-
-
-
-
-
-
-
-
-
7,754
6,175
6,175
6,175
1,900
5,237
2,620
-
-
-
-
-
-
-
-
-
-
-
-
-
-
89,379
71,175
71,175
71,175
21,900
60,362
30,201
19,616
10,607
98,844
462,690
19,616
75,268
7,776
18,383
64,800
163,644
327,685
1,205,742
2017
Non-Executive Directors:
Matthew Quinn
Anthony Fenning
Kathryn Foster
Rajarshi Ray
Nicolette Rubinsztein*
Barry Lambert**
Roderick Kibble**
Executive Directors:
Kevin Bungard***
Other Key Management
Personnel:
Glenn Day***
*
**
Represents remuneration from the date of appointment as KMP for Nicolette Rubinsztein on 1 April 2017.
Represents remuneration up to the date of resignation as KMP for Barry Lambert on 9 February 2017 and Roderick
Kibble on 15 December 2016.
*** Kevin Bungard and Glenn Day achieved bonuses of 50% and 75% respectively of the potential STI for the period. No
STI was deferred or forfeited during the period.
Class Annual Report 2017 23
Class Limited
Directors' report
30 June 2017
2016
Non-Executive Directors:
Barry Lambert
Roderick Kibble
Rajarshi Ray
Kathryn Foster
Matthew Quinn
Anthony Fenning
Executive Directors:
Kevin Bungard
Other Key Management
Personnel:
Glenn Day
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
and fees
Cash
Non-
Super-
bonus*
monetary annuation
$
$
$
$
Long
service
leave
$
Equity-
settled
$
Total
$
90,000
60,000
60,000
60,000
60,000
60,000
-
-
-
-
-
-
261,863
15,000
206,158
858,021
25,000
40,000
-
-
-
-
-
-
-
-
-
8,550
5,700
5,700
5,700
5,700
5,700
-
-
-
-
-
-
-
-
-
-
-
-
98,550
65,700
65,700
65,700
65,700
65,700
27,639
8,509
93,044
406,055
21,410
86,099
7,936
16,445
79,215
172,259
339,719
1,172,824
Non-Executive Directors' salaries are 100% fixed. The fixed proportion and the proportion of remuneration linked to
performance of Executive Directors and KMP are as follows:
Name
Executive Directors:
Kevin Bungard
Other Key Management Personnel:
Glenn Day
Fixed
remuneration
2017
At risk - STI
2017
At risk - LTI
2017
73%
6%
21%
71%
9%
20%
Service agreements
Non-Executive Directors do not have fixed term contracts with the Group. On appointment to the Board, all
Non-Executive Directors enter into a service agreement with the Group 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 from the date of
appointment, but may then be eligible for re-election.
24 Class Annual Report 2017
Class Limited
Directors' report
30 June 2017
Remuneration and other terms of employment for Executives are formalised in service agreements. Details of these
agreements are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Kevin Bungard
Chief Executive Officer and Managing Director ('CEO')
8 October 2015
Ongoing
The terms of employment and remuneration of the CEO
in a
tailored service agreement. The agreement is not of a fixed duration and may be
terminated by either party, providing a notice period of 3 months is given. The
agreement entitles the individual to a base salary and superannuation contributions,
as well as eligibility to participate in the Executive Incentive Plan (EIP). The Board
retains absolute discretion relating to the EIP, it's continuance and whether any
payments will be made in any given year. Upon termination, the individual is bound
by restraint clauses spanning a period of up to 12 months and no less than 3 months,
dependant on the circumstances surrounding the termination.
is detailed
Glenn Day
Chief Financial Officer and Company Secretary ('CFO')
8 October 2015
Ongoing
The terms of employment and remuneration of the CFO are detailed in a
tailored service agreement. The agreement is not of a fixed duration and may be
terminated by either party, providing a notice period of 3 months is given. The
agreement entitles the individual to a base salary and superannuation contributions,
as well as eligibility to participate in the EIP. The Board retains absolute discretion
relating to the EIP, it's continuance and whether any payments will be made in any
given year. Upon termination, the individual is bound by restraint clauses spanning a
period of up to 12 months and no less than 3 months, dependant on the
circumstances surrounding the termination.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Share-based compensation
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during the year
ended 30 June 2017.
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other key
management personnel in this financial year or future reporting years are as follows:
Grant date
Particulars
Expiry date
Exercise price at grant date
30/09/2015
30/09/2015
30/09/2015
30/09/2015
29/06/2016
29/06/2016
Kevin Bungard: 495,860 options
Glenn Day: 484,377 options
Kevin Bungard: 280,000 options
Glenn Day: 120,000 options
Kevin Bungard: 200,000 options
Glenn Day: 90,000 options
30/09/2019
30/09/2019
30/09/2020
30/09/2020
30/06/2021
30/06/2021
$1.10
$1.10
$1.33
$1.33
$3.81
$3.81
$0.197
$0.197
$0.168
$0.168
$0.661
$0.661
Options granted under ESOP carry no dividend or voting rights. Vesting is subject to continuity of service and there are
no performance conditions.
Fair value
per option
Class Annual Report 2017 25
Class Limited
Directors' report
30 June 2017
The number of options over ordinary shares granted to and vested in directors and other key management personnel as
part of compensation are set out below:
Name
Kevin Bungard
Rajarshi Ray
Glenn Day
Number of
Number of
Number of
Number of
options
granted
options
granted
options
vested
options
vested
during the
during the
during the
during the
year
2017
year
2016
year
2017
year
2016
-
-
-
1,235,860
-
948,356
495,860
-
484,377
1,140,000
240,000
613,979
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:
Ordinary shares
Matthew Quinn
Kevin Bungard
Kathryn Foster
Rajarshi Ray
Barry Lambert*
Roderick Kibble**
Glenn Day
Balance at
the start of
the year
Received
as part of
remuneration Additions
Disposals/
other
Balance at
the end of
the year
50,000
2,305,572
783,312
1,450,740
2,047,318
19,664,320
402,500
26,703,762
-
-
-
-
-
-
-
-
10,000
-
-
-
-
-
-
-
(400,000)
(261,104)
(201,892)
(2,047,318)
(19,664,320)
(100,000)
10,000 (22,674,634)
60,000
1,905,572
522,208
1,248,848
-
-
302,500
4,039,128
*
**
Disposal/others represents disposal of 447,318 shares during the period and 1,600,000 shares held at resignation
date.
Disposal/others represents disposal of 2,250,000 shares during the period and 17,414,320 shares held at resignation
date.
Option holding
The number of options over ordinary 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:
Options over ordinary shares
Kevin Bungard
Glenn Day
Options over ordinary shares
Kevin Bungard
Glenn Day
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
975,860
694,377
1,670,237
-
-
-
-
-
-
-
-
-
975,860
694,377
1,670,237
Vested and
exercisable
Vested and
unexercisable
495,860
484,377
980,237
-
-
-
This concludes the remuneration report, which has been audited.
26 Class Annual Report 2017
Class Limited
Directors' report
30 June 2017
Shares under option
Unissued ordinary shares of Class Limited under option at the date of this report are as follows:
Grant date
30/09/2015
30/09/2015
29/06/2016
24/07/2017
Expiry date
30/09/2019
30/09/2020
30/06/2021
15/03/2022
Exercise
price
Number
under option
$1.10
$1.33
$3.81
$3.99
1,948,991
1,058,506
1,058,202
1,168,000
5,233,699
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 issued on the exercise of options
The following ordinary shares of Class Limited were issued during the year ended 30 June 2017 and up to the date of this
report on the exercise of options granted:
Date options granted
30/09/2015
Exercise
price
Number of
shares issued
$1.10
675,093
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.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the
Company or any related entity.
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 to the auditor for non-audit services provided during the financial year by the
auditor are outlined in note 22 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.
Class Annual Report 2017 27
Class Limited
Directors' report
30 June 2017
The directors are of the opinion that the services as disclosed in note 22 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 Grant Thornton
There are no officers of the Company who are former partners of Grant Thornton.
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
Grant Thornton continues in office in accordance with section 327 of the Corporations Act 2001.
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
Matthew Quinn
Chairman
15 August 2017
Sydney
Kevin Bungard
Chief Executive Officer and Managing Director
28 Class Annual Report 2017
Level 17, 383 Kent Street
Sydney NSW 2000
Correspondence to:
Locked Bag Q800
QVB Post Office
Sydney NSW 1230
T +61 2 8297 2400
F +61 2 9299 4445
E info.nsw@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of Class Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor
for the audit of Class Limited for the year ended 30 June 2017, I declare that, to the best of my
knowledge and belief, there have been:
a
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b
no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
Matthew Leivesley
Partner - Audit & Assurance
Sydney, 15 August 2017
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
Class Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2017
Revenue
Expenses
Employee benefits expense
Depreciation and amortisation expense
Selling and marketing expenses
Occupancy expenses
Technology and data costs
Transaction costs on initial public offering
Other expenses
Profit before income tax expense
Income tax expense
Class Annual Report 2017 29
Note
Consolidated
2017
$'000
2016
$'000
5
6
29,206
22,731
(11,130)
(2,584)
(1,206)
(524)
(940)
-
(1,120)
(9,813)
(1,631)
(834)
(309)
(738)
(882)
(818)
11,702
7,706
7
(3,714)
(2,496)
Profit after income tax expense for the year attributable to the owners of Class
Limited
Other comprehensive income for the year, net of tax
7,988
5,210
-
-
Total comprehensive income for the year attributable to the owners of Class
Limited
Basic earnings per share
Diluted earnings per share
7,988
5,210
Cents
Cents
29
29
6.82
6.72
4.64
4.59
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
30 Class Annual Report 2017
Class Limited
Statement of financial position
As at 30 June 2017
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other
Total current assets
Non-current assets
Property, plant and equipment
Intangibles
Deferred tax asset
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Income tax provision
Provisions
Total current liabilities
Non-current liabilities
Deferred tax
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
Note
Consolidated
2017
$'000
2016
$'000
8
9
10
11
12
7
13
7
14
7
15
16
17
19,413
3,120
732
23,265
835
5,025
-
5,860
15,179
2,318
496
17,993
604
3,571
307
4,482
29,125
22,475
2,384
1,765
547
4,696
682
344
1,026
2,268
666
434
3,368
-
313
313
5,722
3,681
23,403
18,794
24,994
1,126
(2,717)
24,260
559
(6,025)
23,403
18,794
The above statement of financial position should be read in conjunction with the accompanying notes
Class Annual Report 2017 31
Class Limited
Statement of changes in equity
For the year ended 30 June 2017
Consolidated
Issued
capital
$'000
Profit
reserve
$'000
Other
reserves
$'000
Retained
earnings
$'000
Total equity
$'000
Balance at 1 July 2015
16,152
2,553
94
(9,782)
9,017
Profit after income tax expense for the year
Other comprehensive income for the year, net
of tax
Total comprehensive income for the year
Transactions with owners in their capacity
as owners:
Contributions of equity, net of transaction
costs (note 16)
Share-based payments (note 30)
Transfer from profit reserve
Dividends paid (note 18)
-
-
-
-
-
-
-
-
-
5,210
5,210
-
-
5,210
5,210
8,108
-
-
-
-
-
(2,553)
-
-
465
-
-
-
-
2,553
(4,006)
8,108
465
-
(4,006)
Balance at 30 June 2016
24,260
-
559
(6,025)
18,794
Consolidated
Issued
capital
$'000
Profit
reserve
$'000
Other
reserves
$'000
Retained
earnings
$'000
Total equity
$'000
Balance at 1 July 2016
24,260
Profit after income tax expense for the year
Other comprehensive income for the year, net
of tax
Total comprehensive income for the year
Transactions with owners in their capacity
as owners:
Contributions of equity, net of transaction
costs (note 16)
Share-based payments (note 30)
Dividends paid (note 18)
Balance at 30 June 2017
-
-
-
734
-
-
24,994
-
-
-
-
-
-
-
-
559
(6,025)
18,794
-
-
-
7,988
7,988
-
-
7,988
7,988
-
567
-
-
-
(4,680)
734
567
(4,680)
1,126
(2,717)
23,403
The above statement of changes in equity should be read in conjunction with the accompanying notes
32 Class Annual Report 2017
Class Limited
Statement of cash flows
For the year ended 30 June 2017
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Income taxes refunded/(paid)
Note
Consolidated
2017
$'000
2016
$'000
31,013
(17,155)
280
(1,626)
24,168
(14,661)
168
(1,549)
Net cash from operating activities
28
12,512
8,126
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangibles
Payments for term deposits
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from treasury shares on vesting of loan funded share plan
Share issue transaction costs
Dividends paid
Net cash from/(used in) financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
(578)
(3,691)
(63)
(318)
(2,627)
(54)
(4,332)
(2,999)
734
-
-
(4,680)
5,429
2,943
(264)
(4,006)
(3,946)
4,102
4,234
15,179
9,229
5,950
18
Cash and cash equivalents at the end of the financial year
8
19,413
15,179
The above statement of cash flows should be read in conjunction with the accompanying notes
Class Annual Report 2017 33
Class Limited
Notes to the financial statements
30 June 2017
Note 1. General information
These financial statements represent the consolidated financial statements of the Group consisting of Class Limited (the
Company) and its subsidiaries. The financial statements are presented in Australian dollars, which is the Company's
functional and presentation currency.
Class Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and
principal place of business is:
Class Limited
Level 3, 228 Pitt Street
Sydney, NSW 2000
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 15 August 2017. 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 either in the respective
notes or 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. The adoption of these
Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of
the Group.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
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 26.
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.
34 Class Annual Report 2017
Class Limited
Notes to the financial statements
30 June 2017
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.
Provision for impairment of receivables
The provision for impairment of receivables assessment requires a degree of estimation and judgement. The level of
provision is assessed by taking into account the recent sales experience, the ageing of receivables, historical collection
rates and specific knowledge of the individual debtor's financial position.
Capitalised software development costs
Distinguishing the research and development phases of a new customised software project and determining whether the
recognition requirements for the capitalisation of development costs are met requires judgement. After capitalisation,
management monitors whether the recognition requirements continue to be met and whether there are any indicators
that capitalised costs may be impaired.
Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its property, plant
and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical
innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less
than previously estimated. Technically obsolete or non-strategic assets that have been abandoned or sold will be written
off or written down.
Impairment of non-financial assets
The Group assesses impairment of non-financial 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 and losses only if the Group considers it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
Class Annual Report 2017 35
Class Limited
Notes to the financial statements
30 June 2017
Note 4. Operating segments
The Group's 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.
The Directors have determined that there is one operating segment identified and located in Australia. The information
reported to the CODM is the consolidated results of the Group.
The segment results are as shown in the statement of profit or loss and other comprehensive income. Refer to statement
of financial position for segment assets and liabilities.
Accounting policy for operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same
basis as the internal reports provided to the CODM. The CODM is responsible for the allocation of resources to operating
segments and assessing their performance.
Note 5. Revenue
Sales revenue
Software licence fees
Service fees
Commission and partner fees
Other revenue
Interest
Revenue
Consolidated
2017
$'000
2016
$'000
27,454
233
1,206
28,893
21,432
252
879
22,563
313
168
29,206
22,731
Accounting policy for revenue recognition
Revenue is recognised when it is probable that the economic benefit will flow to the Group and the revenue can be
reliably measured. Revenue is measured at the fair value of the consideration received or receivable.
Software licence fees
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 license. Revenue is 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.
Service fees
Fees for the provision of services are recognised as revenue as the services are rendered, in accordance with the terms
and conditions of the service agreement.
Commission and partner fees
The Group recognises commission and partner fees pursuant to an agreement when it sells a third party’s products to
customers which provides these customers with access to products and services.
Interest
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.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
36 Class Annual Report 2017
Class Limited
Notes to the financial statements
30 June 2017
Note 6. Expenses
Profit before income tax includes the following specific expenses:
Depreciation
Leasehold improvements
Furniture and fittings
Computer equipment
Office equipment
Total depreciation
Amortisation
Website tools development
Software development
Computer software
Total amortisation
Total depreciation and amortisation
Rental expense relating to operating leases
Minimum lease payments
Superannuation expense
Defined contribution superannuation expense
Consolidated
2017
$'000
2016
$'000
66
21
214
46
347
40
2,179
18
32
12
139
11
194
52
1,360
25
2,237
1,437
2,584
1,631
483
282
1,425
1,058
Class Annual Report 2017 37
Class Limited
Notes to the financial statements
30 June 2017
Note 7. Income tax
Income tax expense
Current tax
Deferred tax - origination and reversal of temporary differences
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 before income tax expense
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Entertainment expenses
Share-based payments
Non allowable deductions
Income tax expense
Deferred tax asset/(liability)
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Tax losses
Employee benefits
Accrued expenses
Software development - Research and Development
Other
Amounts recognised in equity:
Transaction costs on share issue
Deferred tax asset/(liability)
Movements:
Opening balance
Charged to profit or loss
Closing balance
Consolidated
2017
$'000
2016
$'000
2,725
989
1,692
804
3,714
2,496
989
804
11,702
7,706
3,511
2,312
14
170
19
15
150
19
3,714
2,496
Consolidated
2017
$'000
2016
$'000
-
250
288
(1,480)
32
596
202
206
(1,030)
29
(910)
3
228
(682)
307
(989)
(682)
304
307
1,111
(804)
307
38 Class Annual Report 2017
Class Limited
Notes to the financial statements
30 June 2017
Note 7. Income tax (continued)
Provision for income tax
Provision for income tax
Consolidated
2017
$'000
2016
$'000
1,765
666
Accounting policy for 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.
Class Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income tax consolidated
group under the tax consolidation regime with effect from 1 July 2014. 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.
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.
Class Limited
Notes to the financial statements
30 June 2017
Note 8. Current assets - cash and cash equivalents
Cash on hand and at bank
Class Annual Report 2017 39
Consolidated
2017
$'000
2016
$'000
19,413
15,179
Accounting policy for 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.
Note 9. Current assets - trade and other receivables
Trade receivables
Less: Provision for impairment of receivables
Accrued revenue
Consolidated
2017
$'000
2016
$'000
3,099
(12)
3,087
2,307
(8)
2,299
33
19
3,120
2,318
Impairment of receivables
The Group has recognised a loss of $4,000 (2016: $5,000) in profit or loss in respect of impairment of receivables for the
year ended 30 June 2017.
The ageing of the impaired receivables provided for above are as follows:
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
Movements in the provision for impairment of receivables are as follows:
Opening balance
Additional provisions recognised
Closing balance
Consolidated
2017
$'000
2016
$'000
-
5
7
12
Consolidated
2017
$'000
2016
$'000
8
4
12
4
4
-
8
3
5
8
Past due but not impaired
Customers with balances past due but without provision for impairment of receivables amount to $46,000 as at 30 June
2017 ($28,000 as at 30 June 2016).
40 Class Annual Report 2017
Class Limited
Notes to the financial statements
30 June 2017
Note 9. Current assets - trade and other receivables (continued)
The Group did not consider a credit risk on the aggregate balances after reviewing the credit terms of customers based
on recent collection practices.
The ageing of the past due but not impaired receivables are as follows:
0 to 3 months overdue
3 to 6 months overdue
Consolidated
2017
$'000
2016
$'000
22
24
46
28
-
28
Accounting policy for 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 provision for impairment. Trade receivables are generally due for settlement within 30 and 90
days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written
off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised when there is
objective evidence that the Group will not be able to collect all amounts due according to the original terms of the
receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial
reorganisation and default or delinquency in payments (more than 120 days overdue) are considered indicators that the
trade receivable may be impaired. The amount of the impairment allowance is the difference between the asset's carrying
amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows
relating to short-term receivables are not discounted if the effect of discounting is immaterial.
Other receivables are recognised at amortised cost, less any provision for impairment.
Note 10. Current assets - other
Prepayments
Term deposits*
Consolidated
2017
$'000
2016
$'000
528
204
732
355
141
496
*Includes term deposit which is held as security for lease of office premises $204,000 (2016: $141,000).
Class Limited
Notes to the financial statements
30 June 2017
Note 11. Non-current assets - property, plant and equipment
Leasehold improvements - at cost
Less: Accumulated depreciation
Furniture and fittings - at cost
Less: Accumulated depreciation
Computer equipment - at cost
Less: Accumulated depreciation
Office equipment - at cost
Less: Accumulated depreciation
Class Annual Report 2017 41
Consolidated
2017
$'000
2016
$'000
338
(174)
164
289
(50)
239
940
(555)
385
127
(80)
47
835
156
(107)
49
133
(29)
104
722
(341)
381
105
(35)
70
604
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 2015
Additions
Depreciation expense
Balance at 30 June 2016
Additions
Depreciation expense
Balance at 30 June 2017
Leasehold
improvement
s
$'000
Furniture and Computer
Office
fittings
$'000
equipment
$'000
equipment
$'000
Total
$'000
81
-
(32)
49
181
(66)
164
100
16
(12)
104
156
(21)
239
233
287
(139)
381
218
(214)
385
66
15
(11)
70
23
(46)
47
480
318
(194)
604
578
(347)
835
Accounting policy for property, 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 property, plant and equipment
over their expected useful lives as follows:
Leasehold improvements
Furniture and fittings
Computer equipment
Office equipment
3-5 years
3-20 years
3-5 years
3-10 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting
date.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the assets,
whichever is shorter.
42 Class Annual Report 2017
Class Limited
Notes to the financial statements
30 June 2017
Note 11. Non-current assets - property, plant and equipment (continued)
An item of property, 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.
Note 12. Non-current assets - intangibles
Website tools development - at cost
Less: Accumulated amortisation
Trademarks and domain names - at cost
Software development - at cost
Less: Accumulated amortisation
Computer software - at cost
Less: Accumulated amortisation
Consolidated
2017
$'000
2016
$'000
157
(141)
16
46
15,828
(10,909)
4,919
100
(56)
44
157
(101)
56
36
12,185
(8,730)
3,455
76
(52)
24
5,025
3,571
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 2015
Additions
Amortisation expense
Balance at 30 June 2016
Additions
Amortisation expense
Balance at 30 June 2017
Website tools
development
$'000
Trademarks
and domain
names
$'000
Software
development
$'000
Computer
software
$'000
Total
$'000
106
2
(52)
56
-
(40)
16
36
-
-
36
10
-
46
2,200
2,615
(1,360)
3,455
3,643
(2,179)
4,919
39
10
(25)
24
38
(18)
44
2,381
2,627
(1,437)
3,571
3,691
(2,237)
5,025
Accounting policy for 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.
Class Annual Report 2017 43
Class Limited
Notes to the financial statements
30 June 2017
Note 12. Non-current assets - intangibles (continued)
Website tool and software 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 the costs incurred
can be measured reliably. These capitalised costs are amortised commencing from the time the asset's development
reaches the condition necessary for it to be capable of operation in the manner intended by management. Amortisation is
on a straight-line basis over the period of the asset's expected benefit, being its finite useful lives of three years.
Trademarks and domain names
Significant costs associated with trademarks and domain names are capitalised. Such assets are not amortised on the
basis that they are deemed to have an indefinite life. This assumption is reassessed every year. Instead, trademarks and
domain names are tested annually for impairment, or more frequently if events or changes in circumstances indicate that
they might be impaired. They are carried at cost less accumulated impairment losses.
Computer software
Software purchased from third parties are capitalised and amortised on a straight-line basis over the period of their
expected benefit of between three to five years.
Note 13. Current liabilities - trade and other payables
Trade payables
Accrued expenses
BAS payable
Consolidated
2017
$'000
2016
$'000
405
1,385
594
517
1,303
448
2,384
2,268
Refer to note 19 for further information on financial instruments.
Accounting policy for 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.
Note 14. Current liabilities - provisions
Annual leave
Long service leave
Deferred lease incentives
Consolidated
2017
$'000
2016
$'000
458
72
17
547
387
-
47
434
Deferred lease incentives
The provision represents operating lease incentives received. The incentives are allocated to profit or loss in such a
manner that the rent expense is recognised on a straight-line basis over the lease term.
44 Class Annual Report 2017
Class Limited
Notes to the financial statements
30 June 2017
Note 14. Current liabilities - provisions (continued)
Accounting policy for employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled. The liability for annual leave not expected to be settled within 12 months of the reporting date but for which
employees have a current entitlement is 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 (refer to the
accounting policy in note [15] for further details). Such amounts are presented as current liabilities as the Group does not
have an unconditional right to defer settlement. However, based on past experience, the Group does not expect all
employees to take the full amount of accrued leave or require payment within the next 12 months.
Note 15. Non-current liabilities - provisions
Long service leave
Deferred lease incentives
Lease make good
Consolidated
2017
$'000
2016
$'000
300
21
23
344
285
28
-
313
Movements in provisions
Movements in each class of provision (current and non-current) during the current financial year, other than employee
benefits, are set out below:
Consolidated - 2017
Carrying amount at the start of the year
Additional provisions recognised
Amounts used
Carrying amount at the end of the year
Deferred
lease
incentives
$'000
Lease make
good
$'000
75
50
(87)
38
-
23
-
23
Accounting policy for other long-term employee benefits
The liability for long service leave not expected to be settled within 12 months of the reporting date is 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. Pursuant to this method, consideration is given to expected future wage and
salary levels, past experience of employee departures and periods of service. Expected future payments are discounted
using market yields at the reporting date on corporate bonds with terms to maturity and currency that match, as closely
as possible, the estimated future cash outflows.
Note 16. Equity - issued capital
Ordinary shares - fully paid
117,515,849
116,820,283
24,994
24,260
Consolidated
2017
Shares
2016
Shares
2017
$'000
2016
$'000
Class Annual Report 2017 45
Class Limited
Notes to the financial statements
30 June 2017
Note 16. Equity - issued capital (continued)
Movements in ordinary share capital
Details
Date
Shares
$'000
Balance
Exercise price transferred on vesting of loan funded
share plan
Issuance of shares at $1.00 per share
Issuance of shares in the employee offer
Issuance of shares at $1.00 per share
Share issue transaction costs, net of tax
1 July 2015
111,350,680
18,715
8 December 2015
14 December 2015
14 December 2015
24 December 2015
-
5,318,603
41,000
110,000
-
380
5,319
-
110
(264)
Balance
Issuance of shares under Tax Exempt Employee Share Plan for nil
consideration
Issuance of shares at $1.10 per share on exercise of options
Issuance of shares at $1.10 per share on exercise of options
30 June 2016
116,820,283
24,260
20 December 2016
28 February 2017
7 March 2017
20,473
484,377
190,716
-
527
207
Balance
30 June 2017
117,515,849
24,994
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 and amounts paid on the shares held. 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 is 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 and
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 was seen as value adding
relative to the current Company's share price at the time of the investment.
The Group has complied with the capital requirements prescribed under its Australian Financial Service Licence.
The capital risk management policy remains unchanged from the 30 June 2016 Annual Report.
Accounting policy for issued capital
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.
46 Class Annual Report 2017
Class Limited
Notes to the financial statements
30 June 2017
Note 17. Equity - reserves
Share-based payments reserve
Acquisition reserve
Consolidated
2017
$'000
2016
$'000
1,179
(53)
1,126
612
(53)
559
Profit reserve
The reserve was previously used to transfer profits from retained earnings for the purpose of distributing dividends.
Dividends are now distributed out of retained earnings.
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.
Acquisition reserve
The reserve resulted from the acquisition of non-controlling interests in a subsidiary. The acquisition of non-controlling
interests is not a business combination but is an equity transaction between owners. Accordingly, the difference between
consideration paid and fair value of identifiable net assets of the non-controlling interest has been accounted for in the
acquisition reserve.
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 2015
Transfer to retained earnings
Share based payment
Balance at 30 June 2016
Share based payment
Balance at 30 June 2017
Profit
reserve
$'000
Share-based
payment
reserve
$'000
Acquisition
reserve
$'000
Total
$'000
2,553
(2,553)
-
-
-
-
147
-
465
612
567
1,179
(53)
-
-
(53)
-
(53)
2,647
(2,553)
465
559
567
1,126
Class Limited
Notes to the financial statements
30 June 2017
Note 18. Equity - dividends
Dividends
Dividends paid during the financial year were as follows:
Final dividend for the year ended 30 June 2016 of 1 cent per ordinary share
(2016: 0.75 cents)
Interim dividend for the year ended 30 June 2017 of 1 cent per ordinary share
(2016: 0.75 cents)
Interim dividend for the year ended 30 June 2017 of 1 cents per ordinary share
(2016: 1 cent)
Interim dividend for the year ended 30 June 2017 of 1 cents per ordinary share
(2016: 1 cent)
Class Annual Report 2017 47
Consolidated
2017
$'000
2016
$'000
1,168
1,168
1,168
1,176
835
835
1,168
1,168
4,680
4,006
On 15 August 2017, the directors declared a fully franked final dividend for the year ended 30 June 2017 of 2 cents per
ordinary share with payment date of 5 September 2017 to eligible shareholders on the register as at 17 August 2017. This
equates to a total distribution of $2,350,000, based on the number of ordinary shares on issue as at 30 June 2017. The
financial effect of dividends declared after the reporting date is not reflected in the 30 June 2017 financial statements and
will be recognised in subsequent financial reports.
Franking credits
Consolidated
2017
$'000
2016
$'000
Franking credits available for subsequent financial years based on a tax rate of 30%
2,753
1,454
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
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date
Accounting policy for dividends
Dividends are recognised when declared during the financial year and are no longer at the discretion of the Company.
Note 19. Financial instruments
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price 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 other price risks and ageing analysis for credit risk.
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors
('the Board'). These policies include identification and analysis of the risk exposure of the Group and appropriate
procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within the Group's operating
units.
Market risk
Foreign currency risk
The Group is not exposed to any significant foreign currency risk.
48 Class Annual Report 2017
Class Limited
Notes to the financial statements
30 June 2017
Note 19. Financial instruments (continued)
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group's exposure to interest rate risk is limited to cash at bank and short term deposits.
An official increase/decrease in interest rates of 50 (2016:50) basis points would have an adverse/favourable effect on
profit before tax of $98,000 (2016: $77,000) 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 Group has a strict code of credit, including obtaining agency credit information, confirming references and
setting appropriate credit limits. The Group obtains guarantees where appropriate to mitigate credit risk. 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.
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash
equivalents) 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.
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 - 2017
Non-derivatives
Non-interest bearing
Trade payables
Total non-derivatives
Consolidated - 2016
Non-derivatives
Non-interest bearing
Trade payables
Total non-derivatives
1 year or less
$'000
Between 1
and 2 years
$'000
Between 2
and 5 years
$'000
Over 5 years
$'000
Remaining
contractual
maturities
$'000
405
405
-
-
-
-
-
-
405
405
1 year or less
$'000
Between 1
and 2 years
$'000
Between 2
and 5 years
$'000
Over 5 years
$'000
Remaining
contractual
maturities
$'000
517
517
-
-
-
-
-
-
517
517
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Class Annual Report 2017 49
Class Limited
Notes to the financial statements
30 June 2017
Note 20. Fair value measurement
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. 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.
Accounting policy for 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.
Note 21. 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
Long-term benefits
Share-based payments
Note 22. Remuneration of auditors
Consolidated
2017
$
2016
$
948,447
75,268
18,383
163,644
898,021
86,099
16,445
172,259
1,205,742
1,172,824
During the financial year the following fees were paid or payable for services provided by Grant Thornton, the auditor of
the Company:
Audit services - Grant Thornton
Audit or review of the financial statements
Other services - Grant Thornton
Due diligence
Tax compliance services
Taxation advisory services
Consolidated
2017
$
2016
$
79,118
67,950
-
24,420
15,400
40,000
15,750
108,775
39,820
164,525
118,938
232,475
50 Class Annual Report 2017
Class Limited
Notes to the financial statements
30 June 2017
Note 23. Contingent liabilities
The Group has given bank guarantees as at 30 June 2017 of $204,000 (2016: $141,000) to various landlords.
Note 24. Commitments
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
Consolidated
2017
$'000
2016
$'000
638
653
517
1,253
1,291
1,770
Operating lease commitments relate to leases of office premises under non-cancellable operating leases expiring within
one and three years with no options to extend. The leases have various escalation clauses. On renewal, the terms of the
leases are renegotiated.
Note 25. Related party transactions
Parent entity
Class Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 27.
Key management personnel
Disclosures relating to key management personnel are set out in note 21 and the remuneration report included in the
directors' report.
Transactions with related parties
Rajarshi Ray, a director of the Company is also a director of Heffron Consulting Pty Ltd, a major customer of the Group.
Heffron Consulting Pty Ltd also provides actuarial certificates to the customers of the Group. Mr Ray is not a shareholder
of Heffron, is one of three directors and is not related to any of the other directors. Transactions between Heffron
Consulting Pty Ltd and the Group are at arm's length and on normal commercial terms.
Barry Lambert, a former director of the Company is also a director of Countplus Limited, a major customer of the Group.
Barry Lambert is one of five Directors and is not related to any of the other directors. Transactions between Countplus
Limited and the Group are at arm's length and on normal commercial terms.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Class Limited
Notes to the financial statements
30 June 2017
Note 26. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Profit after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Share-based payments reserve
Retained earnings
Total equity
Class Annual Report 2017 51
Parent
2017
$'000
2016
$'000
5,479
4,442
5,479
4,442
Parent
2017
$'000
2016
$'000
14,850
12,849
26,798
23,526
3,505
2,987
4,455
3,300
24,994
1,179
(3,830)
24,260
612
(4,646)
22,343
20,226
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2017 and 30 June 2016.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2017 and 30 June 2016.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2017 and 30 June 2016.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2, except for the
following:
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
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.
52 Class Annual Report 2017
Class Limited
Notes to the financial statements
30 June 2017
Note 27. Interests 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
Principal place of business /
Country of incorporation
Class Super Pty Limited
Class Investment Reporter Pty Ltd
Super IP Incentive Pty Ltd
Australia
Australia
Australia
Ownership interest
2016
2017
%
%
100%
100%
100%
100%
100%
100%
Note 28. Reconciliation of profit after income tax to net cash from operating activities
Profit after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Share-based payments
Change in operating assets and liabilities:
Increase in trade and other receivables
Decrease in deferred tax assets
Increase in prepayments
Increase in trade and other payables
Increase in provision for income tax
Increase in deferred tax liabilities
Increase in employee benefits
Decrease in other provisions
Consolidated
2017
$'000
2016
$'000
7,988
5,210
2,584
567
(802)
307
(173)
116
1,099
682
158
(14)
1,631
465
(651)
804
(177)
653
143
-
95
(47)
Net cash from operating activities
12,512
8,126
Note 29. Earnings per share
Consolidated
2017
$'000
2016
$'000
Profit after income tax attributable to the owners of Class Limited
7,988
5,210
Weighted average number of ordinary shares used in calculating basic earnings per share
Adjustments for calculation of diluted earnings per share:
Options over ordinary shares
Number
Number
117,054,948
112,336,128
1,806,985
1,114,769
Weighted average number of ordinary shares used in calculating diluted earnings per share
118,861,933
113,450,897
Basic earnings per share
Diluted earnings per share
Cents
Cents
6.82
6.72
4.64
4.59
Class Annual Report 2017 53
Class Limited
Notes to the financial statements
30 June 2017
Note 29. Earnings per share (continued)
Accounting policy for earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Class 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.
Note 30. Share-based payments
The Group has established the Class Limited Tax Exempt Employee Share Plan ('Tax Exempt ESP') to assist the Group in
rewarding employees by providing them with the opportunity to own shares in the Company. The Tax Exempt ESP
enables the Group to issue shares to qualifying employees on a non-discriminatory basis so as to permit the application of
section 83A-35 of the Income Tax Assessment Act 1997.
The Group also has a long term incentive plan ('LTIP'), Class Limited Employee Share Option Plan ('ESOP') to assist the
Group in retaining and attracting current and future employees by providing them with the opportunity to allow them to
acquire options or rights as part of the remuneration for their services. The ESOP is by invitation of the Board (or a
committee of the Board).
The share-based payment expense for the year was $567,000 (2016: $465,000). No options were granted during the year
ended 30 June 2017 (2016: 6,281,708).
Set out below summary of the options granted under the plan:
2017
Grant date
Expiry date
30/09/2015
30/09/2015
29/06/2016
30/09/2019
30/09/2020
30/06/2021
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
$1.10
$1.33
$3.81
2,624,084
1,058,506
1,168,202
4,850,792
-
-
-
-
(675,093)
-
-
(675,093)
-
-
(110,000)
(110,000)
1,948,991
1,058,506
1,058,202
4,065,699
Weighted average exercise price
$1.78
$0.00
$1.10
$3.81
$1.87
2016
Grant date
Expiry date
03/12/2013
28/04/2014
30/06/2014
17/08/2015
30/09/2015
30/09/2015
29/06/2016
02/06/2017
26/10/2017
28/12/2017
16/06/2017
30/09/2019
30/09/2020
30/06/2021
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other**
Balance at
the end of
the year
$0.61
$0.59
$0.75
$0.69
$1.10
$1.33
$3.81
2,400,000
400,000
400,000
-
-
-
-
3,200,000
-
-
-
1,375,916
2,624,084
1,113,506
1,168,202
6,281,708
(2,400,000)
(400,000)
(400,000)
(1,375,916)
-
-
-
(4,575,916)
-
-
-
-
-
(55,000)
-
(55,000)
-
-
-
-
2,624,084
1,058,506
1,168,202
4,850,792
Weighted average exercise price
$0.62
$1.54
$0.64
$1.33
$1.78
54 Class Annual Report 2017
Class Limited
Notes to the financial statements
30 June 2017
Note 30. Share-based payments (continued)
The weighted average share price during the financial year was $3.26 (2016:$2.29).
The weighted average remaining contractual life of options outstanding at the end of the financial year was 3 years (2016:
4 years).
2,624,084 options outstanding as at 30 June 2017 are vested and exercisable (30 June 2016: Nil).
Accounting policy for 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 either the
Binomial or Black-Scholes 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.
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.
Note 31. Events after the reporting period
Apart from the dividend declared as disclosed in note 18, no other matter or circumstance has arisen since 30 June 2017
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.
Class Annual Report 2017 55
Class Limited
Notes to the financial statements
30 June 2017
Note 32. Other accounting policies
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Class Limited ('Company'
or 'parent entity') as at 30 June 2017 and the results of all subsidiaries for the year then ended. Class Limited and its
subsidiaries together are referred to in these financial statements as the 'Group'.
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 interests 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.
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.
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and
requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets
and the arrangement conveys a right to use the asset.
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.
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.
56 Class Annual Report 2017
Class Limited
Notes to the financial statements
30 June 2017
Note 32. Other accounting policies (continued)
Impairment of non-financial assets
Other intangible assets that have an indefinite useful life are not subject to amortisation and are 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.
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.
Comparatives
Comparatives in the statement of profit or loss and other comprehensive income have been realigned to current year
presentation. There has been no effect on the profit for the year.
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 2017. 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 9 Financial Instruments
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces all
previous versions of AASB 9 and completes the project to replace IAS 39 ‘Financial Instruments: Recognition and
Measurement’. AASB 9 introduces new classification and measurement models for financial assets. New hedge accounting
requirements are intended to more closely align the accounting treatment with the risk management activities of the
entity. New impairment requirements will use an ‘expected credit loss’ (‘ECL’) model to recognise an allowance. The Group
will adopt this standard from 1 July 2018 but the impact of its adoption is not expected to be material.
AASB 15 Revenue from Contracts with Customers
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard provides a
single standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue to
depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the
entity expects to be entitled in exchange for those goods or services. The Group expects to adopt this standard from 1
July 2018.
Adoption of AASB 15 is not expected to significantly impact the recognition of revenue on the basis that all of the Group's
revenue is recognised at the time of transfer of services to the customer which represents the satisfaction of the primary
performance obligation. The main impact of adopting AASB 15 is expected to be in relation to contract acquisition costs
and contract fulfilment costs directly incremental to the obtaining of a new contract. These will be recorded as an asset
and then amortised on a systematic basis that is consistent with the entity’s transfer of the related services to the
customer. This will be a change in practice as the Group currently expenses these costs as they are incurred. The full
impact is not yet known as the Group is in the process of undertaking an exercise to quantify the expected impact on the
financial statements on initial adoption.
Class Annual Report 2017 57
Class Limited
Notes to the financial statements
30 June 2017
Note 32. Other accounting policies (continued)
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. For lessee accounting, the
standard eliminates the ‘operating lease’ and ‘finance lease’ classification required by AASB 117 ‘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 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). 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) components. For lessor accounting, the standard does not
substantially change how a lessor accounts for leases. The Group will adopt this standard from 1 July 2019 but the impact
of its adoption is yet to be assessed by the Group.
58 Class Annual Report 2017
Class Limited
Directors' declaration
30 June 2017
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
2017 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
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
Matthew Quinn
Chairman
15 August 2017
Sydney
Kevin Bungard
Chief Executive Officer and Managing Director
Level 17, 383 Kent Street
Sydney NSW 2000
Correspondence to:
Locked Bag Q800
QVB Post Office
Sydney NSW 1230
T +61 2 8297 2400
F +61 2 9299 4445
E info.nsw@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of Class Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Class Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2017, the
consolidated statement of profit or loss and other comprehensive income, consolidated statement
of changes in equity and consolidated statement of cash flows for the year then ended, and notes
to the consolidated financial statements, including a summary of significant accounting policies,
and the directors’ declaration.
In our opinion, the accompanying financial report of Class Limited is in accordance with the
Corporations Act 2001, including:
a Giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its
performance for the year ended on that date; and
b Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have
also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report of the current period. These matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
Class Annual Report 2017 59
Level 17, 383 Kent Street
Sydney NSW 2000
Correspondence to:
Locked Bag Q800
QVB Post Office
Sydney NSW 1230
T +61 2 8297 2400
F +61 2 9299 4445
E info.nsw@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of Class Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Class Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2017, the
consolidated statement of profit or loss and other comprehensive income, consolidated statement
of changes in equity and consolidated statement of cash flows for the year then ended, and notes
to the consolidated financial statements, including a summary of significant accounting policies,
and the directors’ declaration.
In our opinion, the accompanying financial report of Class Limited is in accordance with the
Corporations Act 2001, including:
a Giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its
performance for the year ended on that date; and
b Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have
also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report of the current period. These matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
60 Class Annual Report 2017
Key audit matter
How our audit addressed the key audit matter
Measurement and recognition of capitalised
development costs – Note 12 Non-current assets -
intangibles
Capitalised software development costs had a net
carrying value of $4,919,000 at 30 June 2017.
AASB 138 Intangible Assets sets out the specific
requirements to be met in order to capitalise
development costs. Intangible assets should be
amortised over their useful economic lives in
accordance with AASB 138.
The process to measure the amount of development
costs to capitalise involves significant management
judgement in assessing whether costs meet the
development phase criteria described in AASB 138
and in relation to the estimate of the assets’ useful
lives.
Our procedures included, amongst others:
•
agreeing a sample of internal salary costs and
external contractor invoices capitalised to
supporting documentation and assessing those
amounts against the recognition criteria of AASB
138;
•
assessing the company’s accounting policy for
software development costs for adherence to
AASB 138;
•
considering the reasonableness of useful lives
During the year, the Company capitalised $3,643,000
of software development costs. The capitalised
software development costs are being amortised over
3 years.
•
This area is a key audit matter due to subjectivity and
management judgement applied in the assessment of
whether costs meet the development phase criteria
described in AASB 138.
applied; and
assessing the adequacy of disclosures included
in the financial report for adherence to AASB
138.
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company's annual report for the year ended 30 June 2017, but does
not include the financial report and our auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors’ for the Financial Report
The Directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the Directors determine is necessary to enable the
preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the Directors either intend to liquidate the Group or
to cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with the Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_files/ar2.pdf. This description forms part of our auditor’s report.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 14 to 25 of the directors’ report for
Opinion on the Remuneration Report
the year ended 30 June 2017.
In our opinion, the Remuneration Report of Class Limited, for the year ended 30 June 2017,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
Matthew Leivesley
Partner - Audit & Assurance
Sydney, 15 August 2017
Class Annual Report 2017 61
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with the Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_files/ar2.pdf. This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 14 to 25 of the directors’ report for
the year ended 30 June 2017.
In our opinion, the Remuneration Report of Class Limited, for the year ended 30 June 2017,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
Matthew Leivesley
Partner - Audit & Assurance
Sydney, 15 August 2017
62 Class Annual Report 2017
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Shareholder
information
64 Class Annual Report 2017
Class Limited
Shareholder information
30 June 2017
The shareholder information set out below was applicable as at 1 August 2017.
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
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:
68
504
794
2,543
1,604
5,513
-
Number
of holders
of ordinary
shares
Number
of holders
of options
over
ordinary
shares
6
27
7
-
-
40
-
TRONCELL PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LTD
MR JOSEPH CHARLES CAMUGLIA & MRS KIRSTEN INGRET CAMUGLIA
CITICORP NOMINEES PTY LIMITED
ARMELEK PTY LTD
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMS PTY LTD
CANEMOON INVESTMENTS PTY LTD
MR KEITH FINKELDE & MRS ANNE FINKELDE & MR WAYNE FINKELDE
MR PETER DORIAN KIBBLE & MRS LORRAINE LESTER
MR RODERICK KIBBLE & MRS MICHELLE KIBBLE
MR KEVIN BUNGARD
ONE MANAGED INVESTMENT FUNDS LIMITED
PROFITOUS PTY LTD
KAPITAL SUPER FUND P/L
MR RAJARSHI MANU RAY
FYLPANE PTY LTD
CITICORP NOMINEES PTY LIMITED
Ordinary shares
% of total
Number held
shares
issued
15,005,700
11,635,875
7,939,518
7,105,094
3,593,000
3,460,692
3,300,000
2,837,977
2,818,708
2,764,888
2,404,650
2,054,528
2,001,652
2,001,652
1,160,912
1,068,447
1,044,175
1,007,592
1,000,000
990,000
934,419
12.77
9.90
6.76
6.05
3.06
2.94
2.81
2.41
2.40
2.35
2.05
1.75
1.70
1.70
0.99
0.91
0.89
0.86
0.85
0.84
0.80
75,195,060
63.99
Class Limited
Shareholder information
30 June 2017
Unquoted equity securities
Options over ordinary shares
Substantial holders
Substantial holders in the Company are set out below:
TRONCELL PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LTD
Voting rights
The voting rights attached to ordinary shares are set out below:
Class Annual Report 2017 65
Number on
Number of
issue
holders
5,233,699
40
Ordinary shares
% of total
Number held
shares
issued
15,005,700
11,635,875
7,939,875
7,105,094
12.77
9.90
6.76
6.05
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.
There are no other classes of equity securities.
Restricted securities
Class
Ordinary shares
Ordinary shares
Ordinary shares
Expiry date
13 October 2018 or the day after the date which the
shareholder ceases to be an employee
14 December 2018 or the day after the date which
the shareholder ceases to be an employee
20 December 2019 or the day after the date which
the shareholder ceases to be an employee
Number
of shares
190,716
30,000
17,697
238,413
66 Class Annual Report 2017
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Corporate
directory
68 Class Annual Report 2017
Corporate directory 30 June 2017
Auditor
Grant Thornton Audit Pty Ltd
Level 17
383 Kent Street
Sydney NSW 2000
Ph: 02 8297 2400
Solicitors
Addisons
Level 12
60 Carrington Street
Sydney NSW 2000
Ph: 02 8915 1000
Stock exchange listing
Class Limited shares are listed on the Australian
Securities Exchange (ASX code: CL1)
Website
www.class.com.au
Corporate Governance Statement
The Corporate Governance Statement which was
approved at the same time as the Annual Report can be
found at https://investors.class.com.au/Investors/
Directors
Matthew Quinn
Kevin Bungard
Anthony Fenning
Kathryn Foster
Rajarshi Ray
Nicolette Rubinsztein
Company Secretary
Glenn Day
Notice of Annual General Meeting
The details of the Annual General Meeting
of Class Limited are:
Hilton Sydney
Level 1, 488 George Street
Sydney NSW 2000
Monday 16 October 2017 at 3:00pm
Registered office
Level 3
228 Pitt Street
Sydney NSW 2000
Ph: 1300 851 057
Principal place of business
Level 3
228 Pitt Street
Sydney NSW 2000
Ph: 1300 851 057
Share register
Link Market Services
Level 12
680 George Street
Sydney NSW 2000
Ph: 02 8280 7100
class.com.au