CHANGE FINANCIAL LIMITED
ANNUAL REPORT
FOR THE YEAR ENDED 30 JUNE 2018
For personal use only
CORPORATE DIRECTORY
Directors
Teresa Clarke
(Executive Chair)
Peter Clare
(Chairman – Resigned 31, August 2018)
Ashley Shilkin
(Executive Director)
Ian Leijer
(Executive Director)
Andrew Pipolo
(Non-Executive Director)
Company Secretary
Gillian Nairn
Registered Office
Level 12, 680 George Street,
Sydney NSW 2000
Telephone: +61 2 8280 7355
Fax: +61 2 9287 0350
Email: investors@chimpchange.me
Postal Address
Change Financial Limited
PO Box 20547
World Square NSW 2002
Australian Company Number
150 762 351
Australian Business Number
34 150 762 351
Auditors
Pitcher Partners
Level 38
345 Queen Street
BRISBANE QLD 4000
Telephone: +61 7 3222 8444
Fax: +61 7 3221 7779
Website: www.pitcher.com.au
Share Registry
Link Market Services Limited
Telephone: 1300 554 474
Website: www.linkmarketservices.com.au
Website
www.changefinancial.com
ASX Code
CCA
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
TABLE OF CONTENTS
CORPORATE DIRECTORY
TABLE OF CONTENTS
CHAIRMAN’S LETTER
DIRECTORS' REPORT
AUDITOR’S INDEPENDENCE DECLARATION
CORPORATE GOVERNANCE STATEMENT
FINANCIAL REPORT
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DIRECTORS DECLARATION
INDEPENDENT AUDITORS REPORT
ASX ADDITIONAL DISCLOSURE
2
3
4
5
18
19
27
28
29
30
31
32
33
51
52
57
Page 3 of 58
For personal use only Change Financial Limited
Annual Report
For year ended 30 June 2018
CHAIR’S LETTER
Dear Shareholders,
While the fiscal year ended June 30, 2018 was solid, the past six weeks have been tough. We hired a new
CEO who started on August 1, and before the end of the month, he resigned. Our board chair also resigned
in August, and since then, our share price hit a 52-week low reflecting these significant departures. In early
September, I took on the short term role of executive chair to lead the company through this tumultuous
time.
The CCA board has responded to these developments with a deep resolve to steer the company through this
critical chapter of its lifecycle. This letter is being written while we are in the midst of much needed strategic
reviews of all of our lines of business. We recognize the need to get objective, expert counsel as inputs to
our decision making, and have hired world class strategic management consultants with deep expertise in
mobile banking, payment processing, and block chain technology, in order to assist us in charting the most
promising course for each of these businesses in which the company either has operations or a significant
investment.
As tough as these last many weeks have been, I stand in awe of our staff – the people who create the value at
CCA. They are highly qualified, self –driven, and maintain absolute commitment and purpose towards
achieving goals and improving results. It is because of them that I remain optimistic about the future of this
company.
Over the last year, transaction volume for our mobile banking product reached US$152.7 million, up 107 per
cent on last year’s recorded $73.6 million. Deposits grew to US$75.5 million, which is a 137 per cent increase
on the previous year.
As activity across the ChimpChange mobile banking platform ramped up, the Company was unable to scale
revenues at the same pace relative to this growth of customers and transactions for two primary various
reasons: [1) lack of adoption as customer’s primary banking relationship; and 2) not capturing the full value
of a banking customer through the offering of a range of lending and other products.
The company is on the path towards diversifying its revenue sources through its investment in serving
enterprise clients and banks. We are now close to being awarded certification by Mastercard of our payment
processor, one of approximately 16 processors to achieve this level of accreditation in the United States,
which will unlock our ability to start generating revenue from this long term investment in development.
After year-end, in July 2018, we completed a US$2.62 million placement to fund tech development,
marketing and business development and working capital primarily for the payment processing platform. Of
the funds raised, US$0.25 million was allocated for the possible exercise of a call option to acquire the
remaining 66.6% equity interest in Ivy Koin – a block chain technology company.
We expect to have completed the strategic review of the company by mid-October, and to make a set of
comprehensive announcements at the end of October as to the company’s way forward.
We have a lot of work to do to in the months ahead, but the board and the staff are working with all
deliberate speed to sift through our options and take deliberate actions to maximize shareholder value.
We look forward to being in touch in late October 2018 with additional insights on the business.
If you have any questions or comments, please do not hesitate to contact me or any of the members of our
board of directors.
Teresa Clarke
Executive Chair
Page 4 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
DIRECTORS' REPORT
The Directors present their report together with the financial statements of Change Financial Limited
(Change Financial or Company) consisting of Change Financial Limited and the entities it controlled at the
end of or during the year ended 30 Jun 2018 (Group).
Directors
The following persons were Directors of Change Financial Limited during the whole of the financial year and
up to the date of this report unless otherwise stated:
Peter Clare (resigned 31 August 2018)
Teresa Clarke
Ashley Shilkin
Ian Leijer
Andrew Pipolo (appointed 1 August 2017)
Ben Harrison (resigned 28 November 2017)
Principal activities
The Group's principal continuing activity during the year was providing mobile banking services through the
ChimpChange mobile application.
Background on Company and Review of Operations
Change Financial Limited (Company) (ASX: CCA) is a US-focused, fin-tech payments platform disrupting the way
people, businesses and financial institutions pay each other in traditional currencies and digital assets, through
its range of innovative, globally scalable payments’ services. This includes the award winning, ChimpChange
digital banking platform.
Financial year 2018 continued to show growth for the Company. The Company maintained consistent results
across existing products and increased its probability of success by diversifying the platform’s capability to
service enterprise clients. In addition, during the year the Company made a strategic investment to begin the
exploration and integration of technologies to allow blockchain based digital assets to transact easier through
existing infrastructure. The expansion of the business to service enterprise clients and integrate blockchain
into the platform was based on the need to amplify the revenue growth for the company and build a unique
value proposition in the market.
The growth in customer numbers and transaction values demonstrate that the current platform has the
breadth and depth to service specific demographics in the US market through technology. During financial year
2018, ChimpChange won Banking CIO’s award for Top 10 Mobile Banking for 2018, representing further
external validation that the product serves a critical demographic in the U.S. Furthermore, the table below
highlights ChimpChange’s results:
Metric (USD)
Transaction Volume
Deposits
Purchases
Revenue From Services
FY18
$152.7M
$75.5M
$52.0M
$828K
FY17
$73.6M
$31.9M
$22.0M
$409K
Growth
107%
137%
136%
103%
Page 5 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
While the product is leading edge and the business grew from a customer and transaction perspective, the
underlying revenue metrics and profitability have struggled to scale. As such a strategic review of the consumer
division will be undertaken to determine the best strategy for this business going forward.
The experience and knowledge gained through the consumer banking product have presented the Company
with the opportunity to invest in additional technology to service another niche that has been underserved. By
building a payments transaction processor, certified by Mastercard, the company will enhance the value
proposition to our current customers and also expand the reach of the platform by allowing the Company to
serve corporate clients as well as other financial institutions that are looking to expand their digital offerings.
Furthermore, the work done in Financial Year 2018 has set up the Company to diversify the revenue base.
On the corporate front, the Company realized significant benefits from its strategic investment in Ivy Koin.
Options exercised
During the year 1,720,469 shares were issued during the Financial Year pursuant to the exercise of options.
Matters subsequent to the end of the financial year
In July 2018 the Company (i) entered into an option to acquire the remaining shares in Ivy Koin LLC and Ivy
Blockchain Pty Ltd (“Ivy Entities”); and (ii) raised A$3.5m in a placement of shares (A$3.2m net of fees). More
details of these transactions are set out in Note 30 of the Financial Statements.
Likely developments and expected results of operations
Refer to the Review of Operations for further details.
Information on directors
Teresa Clarke (Executive Chair)
Experience and expertise
Teresa Clarke is Harvard Business School (MBA), Harvard Law School (JD) and
Harvard University (Economics) Graduate. Ms Clarke had an esteemed 12-year
career in investment banking at Goldman Sachs; including performing the role
of Managing Director and Vice President.
One of her major contributions was to play a key role in launching the firm's
Global Markets Institute. She later moved back into the investment banking
division where she led mergers and acquisitions, and corporate finance
transactions for Fortune 500 companies in the US and Europe.
Ms Clarke is a California native who now spends her time between New York and South Africa; working on
eCommerce website Africa.com, which she Founded in 2010.
Special responsibilities
None
Other current ASX directorships
None
Page 6 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
Former ASX directorships in last 3 years
None
Interests in shares and options
250,000 options in Change Financial Limited.
Ashley Shilkin (Executive Director)
Experience and expertise
Mr Shilkin is the founder and Executive Director of Change Financial, based in
Los Angeles, California.
He is former Chief Financial Officer of CO2 Australia Limited. While at CO2
Group the company grew to over A$300 million in market capitalisation in a
short period of time. While at CO2 Group he took on a number of
Directorships. One being an appointment to the board of CO2 New Zealand;
the company that facilitated the first meaningful international expansion of
CO2 Group, which resulted in millions of dollars of additional revenue for the group.
Mr Shilkin has a Masters in Commercial Law and a Bachelor of Commerce with double majors in Investment
Finance and International Business Economics.
Other current ASX directorships
None
Former ASX directorships in last 3 years
None
Special responsibilities
Member of the Audit & Risk Management Committee
Interests in shares and options
11,901,965 shares in Change Financial Limited.
3,500,000 options in Change Financial Limited.
Ian Leijer (Executive Director)
Experience and expertise
Mr Leijer has been closely involved with Change Financial since its inception.
Mr Leijer is a Chartered Accountant with over 25 years’ experience in financial
analysis, corporate transactions, business strategy and business management.
He was CFO and Company Secretary for over 10 years of former ASX listed
company Avatar Industries Limited which operated globally in a number of
diverse industries including mining services, electronics distribution,
fabrication of building products and printing. Mr Leijer started his career with
Price Waterhouse specialising in corporate transactions and valuations before
joining a boutique investment bank.
Mr Leijer currently works with a number of entities on business analysis, capital raising (debt & equity) and
general management. Mr Leijer also holds a Bachelor of Economics from the University of Sydney, Australia.
Other current ASX directorships
None
Former ASX directorships in last 3 years
None
Page 7 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
Special responsibilities
None
Interests in shares and options
2,872,529 shares in Change Financial Limited.
250,000 options in Change Financial Limited.
Andrew Pipolo (Non-Executive Director)
Experience and expertise
Andrew Pipolo was Managing Director of both PayPal Australia and then
PayPal Japan during their international expansion. Andrew was the first PayPal
employee in the Asia Pacific region and during his time Andrew successfully
scaled PayPal to the point of being one of the most widely used payment
systems in both countries.
During the five years Andrew was growing PayPal, PayPal Australia was the
fastest growing operation within the PayPal Group.
Since leaving PayPal in 2011 Andrew has owned, operated and consulted for companies in the FinTech space,
with a particular focus on payments. Most recently Andrew was a key member of LoopPay, a unique mobile
wallet solution. LoopPay was ultimately acquired by Samsung Pay in 2015.
Prior to PayPal Andrew was at Mastercard in the position of Head of eCommerce, Acceptance and Cross
Border Acquiring. During his seven years at Mastercard Andrew was responsible for establishing and then
expanding eCommerce and Merchant Acceptance Divisions throughout continental Europe and the UK.
Special responsibilities
None
Other current ASX directorships
None
Former ASX directorships in last 3 years
BPS Technology Ltd
Interests in shares and options
250,000 options in Change Financial Limited.
Company secretary
The Company secretary is Ms Gillian Nairn. Ms Nairn was appointed to the position of Company secretary on
1 July 2018.
Page 8 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
Meetings of directors
The numbers of meetings of the Company's board of Directors and of each board committee held during the
year ended 30 Jun 2018, and the numbers of meetings attended by each Director were:
Peter Clare
Ashley Shilkin
Ian Leijer 1
Ben Harrison
Teresa Clarke 1
Andrew Pipolo
Full meetings of directors
Audit & Risk Committee
meetings
A
15
15
15
2
14
12
B
15
15
15
4
15
14
A
1
1
1
1
1
0
B
1
1
1
1
1
0
1 Mr Leijer and Ms Clarke attended the Audit & Risk Committee meeting by invitation
A = Number of meetings attended
B = Number of meetings held during the time the Director held office or was a member of the committee during the year
Remuneration report (audited)
The Directors are pleased to present your Company's 2018 remuneration report which sets out remuneration
information for Change Financial Limited's non-executive Directors, executive Directors and other key
management personnel.
Non-executive director remuneration policy
The shareholders of Change Financial Limited on 11 August 2015 approved, for the purposes of the ASX
Listing Rules and the Group’s Constitution, an increase in the maximum aggregate annual non-executive
directors’ fees to $500,000, with such fees to be allocated to the non-executive directors as the board of
directors may determine.
Executive remuneration policy and framework
The objective of the Group’s executive reward framework is to ensure reward for performance is competitive
and appropriate for the results delivered. The framework aligns executive reward with achievement of
strategic objectives and the creation of value for shareholders and conforms with market practice for delivery
of reward.
The board ensures that executive reward satisfies the following key criteria for good reward governance
practices:
•
•
•
•
•
•
•
•
•
•
competitive and reasonable, enabling the company to attract and retain key talent;
aligned to the company’s strategic and business objectives and the creation of shareholder value;
performance linkage / alignment of executive compensation;
transparent;
acceptable to shareholders;
alignment to shareholders' interests;
attracts and retains high calibre executives;
alignment to program participants' interests;
rewards capability and experience; and
provides recognition for contribution.
Page 9 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
The executive remuneration and reward framework has two components:
base pay and benefits, including superannuation; and
long term incentives.
(a) Elements of remuneration Base pay and benefits
Executives are offered a competitive base pay that comprises the fixed component of pay and rewards. Base
pay for executives is reviewed annually to ensure the executive's pay is competitive with the market. An
executive's pay is also reviewed on promotion.
There are no guaranteed base pay increases included in any executives' contracts.
(b) Details of remuneration
Details of the remuneration of the directors, the key management personnel of the Group (as defined in
AASB 124 Related Party Disclosures) of Change Financial Limited and the Group are set out in the following
tables.
The key management personnel of Change Financial Limited includes the directors as listed below:
•
•
•
•
•
Peter Clare (Chairman) (resigned from Board on 31 August 2018)
Teresa Clarke (Executive Chair) (from 1 September 2018)
Ashley Shilkin (Executive Director)
Ian Leijer (Executive Director)
Ben Harrison (Non-Executive Director) (resigned 28 November 2017)
In addition to the directors the following executives that report directly to the Board are key management
personnel:
•
•
Clayton Fossett (Chief Operating Officer)
Young Lee (Chief Financial Officer)
The following table shows details of the remuneration expense recognised for the Group's executive key
management personnel for the current and previous financial year measured in accordance with the
requirements of the accounting standards.
Page 10 of 58
For personal use only Change Financial Limited
Annual Report
For year ended 30 June 2018
2018
Name
Non-executive directors
Peter Clare
Ben Harrison
Teresa Clarke
Andrew Pipolo
Subtotal
Executive directors
Ashley Shilkin
Ian Leijer
Subtotal
Key Management
Clayton Fossett
Young Lee
Subtotal
Total
2017
Name
Short Term Benefits
Cash salary
and fees
Cash
Bonus
US$
US$
Non
Monetary
Benefits
US$
Post
Employment
Benefits
Long
term
benefit
Share
based
payments
Total
US$
US$
US$
US$
54,178
41,081
39,996
33,131
168,386
214,796
68,253
283,049
167,358
160,070
327,428
778,863
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19,579
-
19,579
10,000
-
10,000
-
-
-
-
-
-
19,579
10,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
33,262
33,262
133,741
-
133,741
10,035
10,035
20,070
54,178
41,081
39,996
66,393
201,648
378,116
68,253
446,369
177,393
170,105
347,498
187,073
995,515
Short Term Benefits
Cash salary
and fees
Cash
Bonus
US$
US$
Non
Monetary
Benefits
US$
Post
Employment
Benefits
Long
term
benefit
Share
based
payments
Total
US$
US$
US$
US$
Non-executive directors
Peter Clare
Ben Harrison
Teresa Clarke
Subtotal
Executive directors
Ashley Shilkin
Ian Leijer
Subtotal
Key Management
Clayton Fossett
Young Lee
Nick Roberts
Subtotal
Total
52,795
60,956
40,208
153,959
183,461
63,348
246,809
163,137
142,885
134,685
440,707
841,475
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,000
-
10,000
13,077
-
13,077
-
-
-
-
-
-
-
-
10,000
13,077
-
-
-
-
-
-
-
-
-
-
-
-
-
-
27,495
27,495
130,365
-
130,365
25,026
38,537
62,917
126,480
52,795
60,956
67,703
181,454
336,903
63,348
400,251
188,163
181,422
197,602
567,187
284,340
1,148,892
The value of options issued to directors and employees as remuneration is expensed over the vesting period
which may be a number of years. Therefore the amount for share based payments is not a cash expense and
represents the expense recognised in that financial year for options granted as remuneration in that year and
prior years. In the 2018 financial year the amount shown for share based payments for Ashley Shilkin,
Clayton Fossett and Young Lee is the expense recognised for options issued in the 2016 and 2017 financial
years. There were no options issued to Key Management and Executive Directors in the 2018 financial year.
Page 11 of 58
For personal use only Change Financial Limited
Annual Report
For year ended 30 June 2018
(c) Service agreements
Peter Clare (Non-Executive Chairman) (resigned from Board on 31 August 2018)
•
•
•
•
Services provided through Shared Runway Pty Ltd (Shared Runway);
Term of agreement – no fixed term;
Shared Runway receives an annual fee of A$70,000 for services provided by Mr Clare payable
monthly on pro rata basis; and
Shared Runway is entitled to reimbursement of specified expenses incurred in providing services.
Teresa Clarke (Executive Chairman) (Executive Chair from 1 September 2018)
Term of agreement – no fixed term;
Annual fee of US$40,000 payable monthly on pro rata basis; and
Reimbursement of specified expenses incurred in undertaking the role
•
•
•
• Monthly consulting fee of US$50,000 per month.
Ashley Shilkin (Executive Director)
Term of agreement – no fixed term;
Base salary is $210,000 per annum reviewed annually;
Annual $10,000 superannuation and $10,000 car allowance;
Entitled to reimbursement of specified expenses incurred in his employment;
Can participate under the Company ESOP;
Employment can be terminated giving six months’ notice in writing; and
•
•
•
•
•
•
• Mr Shilkin is employed under the laws of the State of California, US.
Ian Leijer (Executive Director)
•
•
•
Services provided through Unimain Pty Ltd (Unimain);
Term of agreement – 6 months unless terminated given one month’s notice, automatically extended
for additional periods of one month each until terminated or a new agreement is entered into.
Unimain receives a consulting fee of A$2,000 per day for services provided by Mr Leijer; and
Unimain is entitled to reimbursement of specified expenses incurred in providing services.
Andrew Pipolo (Non-Executive Director) appointed 1 August 2017
•
•
•
Term of agreement – no fixed term;
Annual fee of A$50,000 payable monthly on pro rata basis; and
Reimbursement of specified expenses incurred in undertaking the role.
Ben Harrison (Non-Executive Director) (resigned 28 November 2017)
•
•
•
•
Serviced provided through Riverfire Capital Ventures Pty Ltd (Riverfire);
Term of agreement – 12 months unless terminated given one month’s notice, automatically
extended for additional periods of one month each until terminated or a new agreement is entered
into;
Riverfire receives an annual fee of A$40,000 for services provided by Mr Harrison payable monthly
on pro rata basis, which took effect from January 2017. Prior to that Riverfire received a consulting
fee of $1,500 per day.; and
Riverfire is entitled to reimbursement of specified expenses incurred in providing services.
Page 12 of 58
For personal use only Change Financial Limited
Annual Report
For year ended 30 June 2018
Clayton Fossett (COO)
Term of agreement – no fixed term;
•
• Base salary is reviewed annually;
•
•
•
• Mr Fossett is employed under the laws of the State of California, US.
Entitled to reimbursement of specified expenses incurred in his employment;
Can participate under the Company ESOP;
Employment can be terminated giving one month’s notice in writing; and
Young Lee (CFO)
Term of agreement – no fixed term;
•
• Base salary is reviewed annually;
•
•
•
• Mr Lee is employed under the laws of the State of California, US.
Entitled to reimbursement of specified expenses incurred in his employment;
Can participate under the Company ESOP;
Employment can be terminated giving one month’s notice in writing; and
(d) Equity instrument disclosures relating to key management personnel
(i)
Options issued to Key Management Personnel as remuneration
The following options were issued as long-term incentives to Key Management Personnel as remuneration
during the financial period. All options are exercisable upon vesting until the expiry date.
Name
Number
Grant
Date
Strike
Price
Expiry
Date2
Fair Value
at Grant
Date A$
Total
Number
Vested
Vested
%
Total
Number
Exercised
Vesting
Conditions
Directors
Andrew Pipolo
250,000
1 Dec 18
A$1.00
30 Jun 20
42,660
250,000
100%
-
Nil
Note 1
Options may expire earlier than the Expiry date if a person ceases to be a director or an employee of the Company.
Page 13 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
(ii)
Option Holdings
The numbers of options in the Company held during the financial year by each Director of Change Financial
Limited and other key management personnel of the Group, including their personally related parties, are set
out below.
2018
Name
Balance at
the start of
the period
Granted
during the
year
Exercised
during the
year
Balance at
the end of
the period
Total Vested
at 30 Jun 18
Exercisable
at 30 June 18
Unexercis-
able at
30 June 2018
-
-
-
-
-
-
-
-
Directors
Peter Clare
750,000
Ashley Shilkin
3,500,000
Ian Leijer
Teresa Clarke
Andrew Pipolo
Key
management
250,000
250,000
-
250,000
300,000
450,000
450,000
450,000
-
-
-
-
-
3,500,000
1,000,000
1,000,000
2,500,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
250,000
-
-
-
Clayton Fossett
650,000
Young Lee
500,000
-
-
100,000
550,000
383,334
383,334
166,666
-
500,000
183,334
183,334
316,666
2017
Name
Balance at
the start of
the period
Granted
during the
year
Exercised
during the
year
Balance at
the end of
the period
Total Vested
at 30 Jun 17
Exercisable
at 30 June 17
Unexercis-
able at
30 June 2017
Directors
Peter Clare
750,000
Ashley Shilkin
3,500,000
250,000
950,000
-
250,000
Ian Leijer
Ben Harrison
Teresa Clarke
Key
management
Clayton Fossett
400,000
250,000
Young Lee
250,000
250,000
Nick Roberts
600,000
200,000
-
-
-
-
-
-
-
-
750,000
750,000
750,000
-
3,500,000
1,000,000
1,000,000
2,500,000
250,000
250,000
250,000
950,000
950,000
950,000
250,000
250,000
250,000
-
-
-
650,000
341,667
341,667
308,333
500,000
91,667
91,667
408,333
800,000
133,333
133,333
666,667
No option holder (Key Management Personnel or otherwise) has any right under the options to participate in
new issues of securities in the Company made by the Company to its shareholders generally. In the event of
a reconstruction of the capital of the Company or an issue of Bonus shares the option strike price, and/or the
number of options will be adjusted such that no benefit is gained or lost by option holders as a result of that
reconstruction or bonus share issue.
Page 14 of 58
For personal use only Change Financial Limited
Annual Report
For year ended 30 June 2018
(iii)
Share holdings
The numbers of shares in the Company held during the financial year by each Director of Change Financial
Limited and other key management personnel of the Group, including their personally related parties, are set
out below. There were no shares granted during the reporting period as compensation.
Year to 30 June 2018
Balance at the
start of the
period
Received during the
year on exercise of
options
Other changes
during the
period
Balance at the
end of the period
Directors of Change Financial Limited
Peter Clare
Ashley Shilkin
Ian Leijer
Teresa Clarke
Andrew Pipolo
Other key management personnel of the Group
Clayton Fossett
Young Lee
Year to 30 June 2017
200,000
300,000
11,901,965
2,872,529
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
500,000
11,901,965
2,872,529
-
-
-
-
Balance at the
start of the
period
Received during the
year on exercise of
options
Other changes
during the
period
Balance at the
end of the period
Directors of Change Financial Limited
Peter Clare
Ashley Shilkin
Ian Leijer
Ben Harrison
Teresa Clarke
Other key management personnel of the Group
Clayton Fossett
Young Lee
200,000
11,901,965
2,872,529
43,668
-
-
-
End of Remuneration Report
-
-
-
-
-
-
-
-
-
-
200,000
11,901,965
2,872,529
28,500
72,168
-
-
-
-
-
-
Page 15 of 58
For personal use only Change Financial Limited
Annual Report
For year ended 30 June 2018
Shares under option
Grant Date
Expiry
Strike Price
Vesting Conditions
Number
31 Dec 2014
1 Apr 2015
1 Apr 2015
18 Apr 2016
18 Apr 2016
18 Apr 2016
18 Apr 2016
20 Apr 2016
18 Jan 2017
2 Dec 2017
18 Jan 2018
TOTAL
31 Dec 2019
20 Oct 2019
20 Oct 2020
31 Dec 2018
18 Apr 2021
18 Apr 2021
18 Apr 2019
20 Apr 2019
20 Jan 2018
30 Jun 2020
31 Jan 2021
Indemnity and Insurance of officers
A$0.40
A$0.49
A$0.49
A$1.00
A$1.50
A$2.35
A$1.00
A$1.00
A$0.657
A$1.00
A$0.92
No
Yes
Yes
No
No
No
Yes
No
Yes
No
Yes
1,500,000
100,000
100,000
2,100,000
1,000,000
1,500,000
1,270,000
1,500,000
1,450,000
250,000
790,000
11,560,000
Insurance of officers
During the financial year, the Group paid a premium in respect of a contract insuring the directors of the
company (as named above), the company secretary, and all executive officers of the company and of any
related body corporate against a liability incurred as such a director, secretary or executive officer 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.
The Group has not otherwise, during or since the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify an officer or auditor of the company or of any related body corporate
against a liability incurred as such an officer or auditor.
Non-audit services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties
where the auditor's expertise and experience with the Company and/or the Group are important.
Details of amounts paid or payable to the auditor for non-audit services provided during the year are
outlined at note 27 to the financial statements. Based on advice provided by the Audit and Risk Management
Committee, the Directors have formed the view that the provision of non-audit services is compatible with
the general standard of independence for auditors, and that the nature of non-audit services means that
auditor independence was not compromised.
Dividends - Change Financial Limited
The Directors of Change Financial Limited do not recommend the payment of a dividend for the year ending
30 Jun 2018 (2017: Nil).
Page 16 of 58
For personal use only Change Financial Limited
Annual Report
For year ended 30 June 2018
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 on page 18.
Auditor
Pitcher Partners 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) of the
Corporations Act 2001.
Dated 28 September 2018
Teresa Clarke
Executive Chair
Page 17 of 58
For personal use only The Directors
Change Financial Ltd
C/- 110 S Fairfax Avenue
#A11-177
Los Angeles CA 90036
Auditor’s Independence Declaration
As lead auditor for the audit of Change Financial Ltd for the year ended 30 June 2018, I declare that, to the
best of my knowledge and belief, there have been:
(i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in
relation to the audit; and
(ii) no contraventions of APES 110 Code of Ethics for Professional Accountants.
This declaration is in respect of Change Financial Ltd and the entities it controlled during the period.
PITCHER PARTNERS
J. J. EVANS
Partner
Brisbane, Queensland
28 September 2018
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
CORPORATE GOVERNANCE STATEMENT
The Company is committed to implementing and maintaining good corporate governance policies.
Change Financial Limited’s Corporate Governance Statement has been adopted and structured with
reference to the Australian Securities Exchange (ASX) Corporate Governance Council - Corporate
Governance Principles and Recommendations, 3rd Edition (CGC Recommendations). This statement
reports against the CGC Recommendations.
The Company’s practices are largely consistent with the CGC recommendations. Where the
Company’s corporate governance practices do not correlate with the CGC Recommendations, the
Company is working towards compliance; however, the Board does not consider that all CGC
Recommendations are currently appropriate for the Company due to the current size and scale and
circumstances of its operations. The Board has offered full disclosure and reasons for the adoption of
alternative Company practices and these are summarised in this Corporate Governance Statement.
The Board is of the view that with the exception of the departures from the CGC Recommendations noted
below it otherwise complies with the CGC Recommendations.
The information in this statement is current as at 27 September 2018 and has been approved by the Board.
Principle 1 – Lay solid foundations for management and oversight
Functions, powers & responsibilities of the Board
The Board of Directors is pivotal in the relationship between shareholders and management and the role
and responsibilities of the Board underpin the Company’s corporate governance framework. Generally, the
powers and obligations of the Board are governed by the Corporations Act and the general law.
Without limiting those matters, the Board expressly considers itself responsible for the following:
•
•
•
•
•
•
•
•
•
•
•
•
ensuring compliance with the Corporations Act, ASX Listing Rules (where appropriate) and all other
relevant laws;
providing leadership and developing, implementing and monitoring strategic operational and financial objectives
for the Company and the overall performance of the Company;
appointing appropriate staff, consultants and experts to assist in the Company's operations;
ensuring appropriate financial and risk management controls are implemented;
setting, monitoring and ensuring appropriate accountability and a framework for remuneration of
Directors and executive officers;
establishing and overseeing the Company’s process for making timely and balanced disclosure of all
material information in accordance with the ASX Listing Rules;
implementing appropriate strategies to monitor performance of the Board in implementing its functions
and powers;
implementing and overseeing the Company’s risk management framework to enable risk to be
identified, assessed and managed and to set the risk appetite the Board expects Management to
operate within;
appointing the Chairperson;
appointing and removing the Chief Executive Officer and Company Secretary;
approving the appointment and, where appropriate, removal of members of Management;
contributing to and approving Management's development of corporate strategy and performance
objectives;
• monitoring Management's implementation of strategy and performance generally, and ensuring
appropriate resources are available to Management;
Page 19 of 58
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Change Financial Limited
Annual Report
For year ended 30 June 2018
• monitoring the effectiveness of the Company’s governance practices;
•
approving and monitoring the progress of major capital expenditure, capital management and
acquisitions and divestitures;
approving the annual budget;
liaising with the Company's external auditors;
approving and monitoring financial and other reporting systems of the Company (including external
audit) and the integrity of these systems; and
appointing and overseeing Committees where appropriate to assist in the above functions and powers.
•
•
•
•
The Board has delegated to the Executive Chair day to day responsibility for running the affairs of the
Company and to implement the policies and strategy set by the Board. The Board also delegates to senior
management the responsibilities for the day-to-day activities leading toward achievement of the Company’s
strategic direction within agreed boundaries and authority limitations.
Structure of the Board
The policy and procedures for the selection and appointment of new Directors is that candidates are
considered and selected by reference to a number of factors which include, but are not limited to, their
relevant experience and achievements, and credibility within the Company’s scope of activities. Directors
are initially appointed by the full Board subject to election by shareholders at the next Annual General
Meeting.
The Company has procedures in place to ensure that all material information in its possession relevant to a
decision to elect or re-elect a Director (including whether Directors support the election or re-election) is
disclosed in the notice of meeting provided to shareholders.
At each Annual General Meeting the following Directors automatically retire and are eligible for re-
appointment:
•
•
•
any Director who has been elected in the office for a period in excess of three consecutive years or
until the third annual general meeting following her/his appointment, whichever is longer, without
submitting him/herself for re-election;
any Director who was appointed by the Directors during the year to fill a casual vacancy or as an
addition to the existing Directors;
one-third of the Directors or, if their number is not a multiple of three, then the greatest of one or the
number nearest to but not exceeding one-third.
Director and senior executive agreements
New Directors receive a letter of their appointment setting out the material terms of their engagement and
a deed of indemnity, insurance and access. Non-executive Directors are not appointed for fixed terms. All
senior executives, including Executive Directors, also have written agreements, which set out the material
terms of engagement, including a description of position and duties, reporting lines, remuneration
arrangements and termination rights and entitlements.
Contract details of senior executives, which are key management personnel, are summarized in the
Remuneration Report in the Annual Report.
Company Secretary
The Company Secretary is accountable directly to the Board (through the Chairman) for facilitating the
Company’s corporate governance processes and the proper functioning of the Board. Each Director is
entitled to access the advice and services of the Company Secretary.
Page 20 of 58
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Change Financial Limited
Annual Report
For year ended 30 June 2018
In accordance with the Company’s Constitution, the appointment and removal of the Company Secretary is a
matter for the Board as a whole. A copy of the Constitution is available on the Company website under
Corporate Governance and the details of the Company Secretary are set out in the Directors’ Report
contained within the Annual Report.
Diversity
The Board has not adopted a formal Diversity Policy at this stage. The recruitment and selection processes
adopted by the Company ensure that staff and management are selected in a non-discriminatory manner
based on merit. The Company respects and values the competitive advantage of diversity (which includes
but is not limited to gender, age, disability, ethnicity, marital or family status religious or cultural
background), and the benefit of its integration throughout the Company in order to improve corporate
performance, increase shareholder value and maximise the probability of achievement of the Company’s
goals. However, the Board of Directors does not believe that the Company is currently of a sufficient size to
justify the establishment of formal and measurable objectives, having regard to the nature and scale of its
activities.
Board reviews
The Company does not have a formal process for evaluating the performance of the Board, its committees
and individual directors. Due to the Company’s limited resources during the reporting period, no formal
performance evaluation of the Board or its Committees was undertaken during the period.
In the normal course of events the Board informally reviews the performance of Directors and the Board as
a whole.
The Board is provided with the information it needs to discharge its responsibilities effectively. All Directors
have access to corporate governance policies and material contracts entered into by the Company. The
Directors also have access to the Company Secretary for all Board and governance-related issues.
Management reviews
The Company did not during the reporting period have a formal process for periodically evaluating the
performance of its senior executives and the Board did not conduct a formal performance evaluation of
senior executives during the reporting period. The Board regularly informally reviews the performance of
the Company’s senior executives and assesses the achievement of goals and business development and
evaluates compliance issues.
PRINCIPLE 2 – STRUCTURE THE BOARD TO ADD VALUE
Nomination committee
The Board has not formally established a Nominations Committee as the Directors consider that the Board is
not of a size nor are its affairs of such complexity as to justify the formation of this Committee. The Board
considers that it is able to deal efficiently and effectively with Board composition and succession issues
without establishing a separate Nomination Committee and in doing so, the Board will be guided by the
Nomination Charter which is set out in the Company’s Corporate Governance Charter and can be accessed
on the Company’s website under Corporate Governance. The Company will review this position annually and
determine whether a Nominations Committee needs to be established.
Skills and experience
Details of the current Directors, their skills, experience and qualifications plus a record of attendance at
meetings is included in the Directors’ Report within the Annual Report.
Page 21 of 58
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Change Financial Limited
Annual Report
For year ended 30 June 2018
The Company has established a Board Skills Matrix.
At this stage of the Company’s development the Board believes there is an appropriate mix of skills,
experience and diversity on the Board. However the Board will continue to monitor its composition with a
view to ensuring is has an appropriate mix of skills and diversity to enable it to discharge its responsibilities
effectively.
Independence and length of service
The Company’s Board is comprised of Teresa Clarke, Andrew Pipolo, Ashley Shilkin and Ian Leijer.
From 1 August 2017 (the day Mr Pipolo was appointed) until 31 August 2018 the Company had a majority of
independent directors. Following the resignation of Mr Clare and the appointment of Mrs Clarke as an
Executive Chair on 1 September 2018, the Board no longer consists of a majority of independent Directors.
The Company believes that short term non-compliance by the Company with this recommendation will not
be detrimental to the Company or its shareholders. Nevertheless, the Company will seek to redress the
imbalance of executive and non-executive directors.
The length of service of each Director as at the date of this financial report is set out below and can be found
in the Directors’ Report within the Annual Report.
Name
Peter Clare
Ian Leijer
Ashley Shilkin
Teresa Clarke
Appointment date
Length of service
16 April 2015
40 months
16 January 2015
44 months
6 May 2011
7 years and 5 months
14 October 2016
23 months
Andrew Pipolo
1 August 2017
14 months
Based on the factors listed in the CGC Recommendations as being relevant to assessing independence, the
Board considers Andrew Pipolo to be the sole independent Director on the Board as at 27 September 2018.
The table below details the reasons why the remaining Directors are not considered to be independent:
Name
Ian Leijer
Position
Reason for non-compliance
Executive Director
Director is employed in an executive capacity
Ashley Shilkin
Executive Director
Director is employed in an executive capacity and is a
substantial security holder of the Company
Teresa Clarke
Executive Chair
Director is employed in an executive capacity
Principle 3 – Act ethically and responsibly
Code of conduct
The Company has established a Corporate Code of Conduct and Corporate Ethics Policy,. The Codes require
that Directors, management and employees maintain high standards of integrity and ensurethat all business
activities are conducted legally and ethically in compliance with the letter and spirit of both the law and
Company policies. The Code of Conduct and Ethics Policy is set out in the Company’s Corporate Governance
Charter and can be accessed on the Company’s website under Corporate Governance.
Page 22 of 58
For personal use only Change Financial Limited
Annual Report
For year ended 30 June 2018
PRINCIPLE 4 – SAFEGUARD INTEGRITY IN CORPORATE REPORTING
Audit Committee
CGC recommendation 4.1 states that the audit committee should consist of a majority of independent
Directors and all be non-executive Directors.
Given the small size of the Board, the Board did not have a separate Audit and Risk Management
Committee during 2018. The Board as a whole, discharged the responsibilities normally undertaken by the
Audit Committee as set out in the Audit and Risk Committee Charter.
The Company believes that given the size and scale of its operations, non-compliance by the Company will
not be detrimental to the Company.
The Company has adopted an Audit and Risk Management Committee Charter setting out the Committee’s
responsibilities once a Committee is re-established as well as reporting requirements. A copy of the Charter
is included in the Corporate Governance Charter and can be accessed on the Company’s website under
Corporate Governance.
The responsibilities of the Audit and Risk Management Committee, once re-established, with respect to
audit are to:
•
•
review and make recommendations to the Board in relation to whether the Company’s financial
statements reflect the understanding of the members of the Committee, and otherwise provide a true
and fair view of the financial position and performance of the Company;
review and make recommendations to the Board in relation to the appropriateness of the accounting
judgments or choices exercised by Management in preparing the Company’s financial statements;
ensure that the quality of financial controls is appropriate for the business of the Company;
review the scope, results and adequacy of external and internal audits;
require the external auditors to report to the Committee;
•
•
•
• monitor corporate conduct and business ethics and ongoing compliance with laws and regulations;
• maintain open lines of communication between the Board, Management and the external auditors, thus
•
•
•
•
enabling information and points of view to be freely exchanged;
review matters of significance affecting the financial welfare of the Company;
ensure that systems of accounting and reporting of financial information to shareholders, regulators
and the general public are adequate and making recommendations in this regard;
review the Company's internal financial control system;
consider and make recommendations regarding the appointment and removal of the external auditor
and approving the remuneration and terms of engagement of the external auditor;
• monitor and review the external auditor's independence, objectivity and effectiveness, taking into
•
consideration relevant professional and regulatory requirements and the performance of the external
auditor; and
develop and implement policy on the engagement of the external auditor to supply non-audit services,
taking into account relevant ethical guidance regarding the provisions of non-audit services by the
external audit firm and make recommendations on any proposal by the external auditor to provide
non-audit services.
Page 23 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
External auditor
Pitcher Partners was appointed as the Company’s external auditor by shareholders at a General Meeting
held on 30 November 2015. Pitcher Partners has advised the Company that their policy of audit partner
rotation requires a change in the lead engagement partner and review partner after a period of five years.
Representatives of Pitcher Partners attend the Annual General Meeting and are available to answer
shareholder questions regarding the audit or the individual statements.
Chief Executive Officer and Chief Financial Officer certification of financial statements.
Prior to the approval of the Group’s financial statements each year, the Chief Executive Officer and the
Chief Financial Officer confirm in writing to the Board that the financial reports of the Company for the
financial year:
•
•
•
present a true and fair view, in all material respects, of the Company’s financial condition and
operational results and are in accordance with relevant accounting standards;
the statement given in accordance with section 295A of the Corporations Act is founded on a sound
system of risk management and internal compliance and control which implements the policies
adopted by the Board; and
the Company’s risk management and internal compliance and control system is operating efficiently
and effectively in all material respects in relation to financial reporting risks.
Principle 5 – Make timely and balanced disclosure
Disclosure and Communications Policy
The Company has adopted a Continuous Disclosure Policy within its Corporate Governance Charter to
ensure compliance with the continuous disclosure requirements of the ASX Listing Rules and the
Corporations Act 2001. The policy sets out the rules and procedures for ASX information disclosure, the
responsibility of the Board, Senior Executives and staff to ensure that price sensitive information is
identified, reviewed by management and disclosed to the ASX in a timely, clear and objective manner and
that all information provided to the ASX is posted on the Company’s website as soon as possible after its
disclosure to ASX.
The Company Secretary is responsible for communications with, and coordinating disclosure of information
to, the ASX.
Directors will receive copies of all announcements released to the ASX and copies of announcements,
including related information, such as financial statements and public presentations, and are aware of and
accountable for the Company’s compliance with regard to continuous disclosure.
Respect the rights of security holders
Shareholder Communication
The annual report which is distributed, or otherwise made available, to all shareholders;
The Company is committed to informing shareholders of all major developments affecting the
operations of the Company and the state of its affairs. Communications with shareholders include:
•
•
•
•
The Annual General Meeting and other general meetings called to obtain shareholder approval
for significant corporate actions, as appropriate;
The quarterly activities report;
The half-year financial report;
Company announcements; and
•
• All of the information available on the Company’s website www.changefinancial.com
Page 24 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
The Company welcomes questions from shareholders at any time and these are answered unless the
information requested is market sensitive and not in the public domain. All announcements to be made by
the Company to the ASX (except disclosures of a routine compliance or administrative nature) will be posted
to the Company’s website.
Information about the Company and its operations including information about the
Company’s corporate governance policies is located at: www.changefinancial.com
Facilitate participation at meetings of security holders.
The Company encourages shareholder participation at its AGMs including by making notices of meetings
available on its website. The Company’s external auditor attends the Company’s AGMs and is available to
answer any questions which shareholders may have about the conduct of the external audit for the relevant
financial year and the preparation and content of the audit report.
Shareholders who are unable to attend meetings of the Company are encouraged to participate in meetings
by way of appointment of a proxy.
Principle 7 – Recognise and manage risk
Risk committee
The Board as a whole has undertaken the responsibilities of the Audit and Risk Management Committee
which are set out in the Audit and Risk Management Committee Charter. A copy of the Charter is included in
the Corporate Governance Charter and can be accessed on the Company’s website under Corporate
Governance.
The responsibilities of the Board with respect to risk management are to:
•
review the adequacy of the Company’s processes for managing risks, including:
(a)
(b)
in relation to any incident involving fraud or other break down of the Company’s internal controls;
in relation to the Company’s insurance program, having regard to the Company’s business and the
insurable risks associated with the business;
ensure the development of an appropriate risk management policy framework that will provide
guidance to Management in implementing appropriate risk management practices throughout the
Company's operations, practices and systems and to oversee this framework;
define and periodically review risk management as it applies to the Company and clearly identifying all
stakeholders;
ensure the Board clearly communicates the Company's risk management philosophy, policies and
strategies to Directors, Management, employees, contractors and appropriate stakeholders;
ensure that the Board and Management establish a risk aware culture which reflects the Company's risk
policies and philosophies;
review methods of identifying broad areas of risk and setting parameters or guidelines for business risk
reviews;
•
•
•
•
•
• make informed decisions regarding business risk management, internal control systems, business
policies and practices and disclosures; and
•
consider capital raising, treasury and market trading activities with particular emphasis on risk
treatment strategies, products and levels of authorities.
The responsibility for undertaking and assessing risk management and internal control effectiveness is
delegated to management under the guidance of the Committee.
Page 25 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
Internal audit
The Company does not have an internal audit function due to its current size. The Board gains sufficient
assurance from management undertaking ongoing evaluation of the Company’s internal control and risk
management processes.
Sustainability risks
As a digital banking company, Change Financial faces inherent risks in its activities, primarily financial,
operating and system risks but also including economic, environmental and social sustainability risks. The
Board does not consider that it has material exposure to economic, environmental and social sustainability
risks other than its exposure to general economic conditions in the markets in which it operates.
The Board regularly monitors the operational and financial performance of the Company’s activities. It
monitors and receives advice on areas of operation and financial risk and considers strategies for
appropriate risk management.
Review of risk management framework
The Board did not conduct a formal review of the Company’s risk management processes in the 2018
financial year. During the 2018 financial year the identification and evaluation of risks and the development
and implementation of risk mitigation plans was undertaken by management with oversight from the Board.
Principle 8 – Remunerate fairly and responsibly
Remuneration committee.
The Board has not formally established a Remuneration Committee due to the small size of the Board.
The Board of Directors is responsible for determining and reviewing compensation arrangements for the
Directors and the Executive team. The Board assesses the appropriateness of the nature and amount of
remuneration of such officers on a periodic basis by reference to relevant employment market conditions
with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality
Board and Executive team.
Disclosure of Executive and Non-Executive Director Remuneration policy
The Constitution of the Company provides that the Non-Executive Directors are entitled to remuneration as
determined by the Company in general meeting to be paid as to a fixed amount for each Director.
Additionally, Non-Executive Directors are entitled to be reimbursed for properly incurred expenses. All
Directors have the opportunity to qualify for participation in the Company’s share option plan, subject to the
approval of shareholders.
Details of the Company’s remuneration arrangements for Non-Executive Directors, Executive Directors and
senior Executives including fee rates are set out in the Remuneration Report in the Annual Report.
Share Trading Policy.
The Company’s Share Trading Policy specifically prohibits Directors and senior executives from engaging in
short-term trading in the Company’s securities. The Policy also stipulates that Directors and senior
executives and closely related parties not enter into transactions which limit the economic risk relating to
unvested options held by Directors and Senior Executives. The Share Trading Policy is included in the
Corporate Governance Charter and can be accessed on the Company’s website under Corporate
Governance.
Page 26 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
FINANCIAL REPORT
These financial statements are the consolidated financial statements of the consolidated entity consisting of
Change Financial Limited and its subsidiaries.
The financial statements are presented in the United States currency.
Change Financial Limited is a company limited by shares, incorporated and domiciled in Australia. Its
registered office is:
Level 12, 680 George Street,
Sydney NSW 2000
Its principal place of business is:
Chimpchange LLC
6922 Hollywood Blvd, Suite 922,
Hollywood, CA 90028
A summary of the Group’s operations and its principal activities is included in the directors' report on page 5,
which is not part of these financial statements.
The financial statements were authorised for issue by the Directors on 28 September 2018. The Directors
have the power to amend and reissue the financial statements.
Through the use of the internet, we have ensured that our corporate reporting is timely and complete. All
press releases, financial reports and other information are available at our Shareholders' Centre on our
website: www.changefinancial.com
Page 27 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
Year ended 30 June
Revenue
Employee benefits expense
Advertising & marketing expense
Program Expenses
Professional services & insurance
Consulting
Technology & Hosting
Note
2018
US$
2017
US$
4
1,076,868
601,192
(3,631,036)
(3,047,785)
(1,899,480)
(2,845,529)
(1,977,616)
(1,191,603)
(662,997)
(445,778)
(538,285)
(432,865)
(361,758)
(297,206)
Depreciation & amortisation expense
5
(521,451)
(425,923)
Other expense
Profit (loss) before tax
Income tax (expense) benefit
Profit (loss) for the financial period
(532,214)
(681,045)
(9,047,969)
(8,766,542)
-
-
(9,047,969)
(8,766,542)
Basic loss per share (US cents per share)
Diluted loss per share (US cents per share)
19
19
(12.4)
(12.4)
(13.5)
(13.5)
The consolidated statements above should be read in conjunction with the accompanying notes.
Page 28 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 30 June
Note
2018
US$
2017
US$
Loss of the year
(9,047,969)
(8,766,542)
Other comprehensive income
Items that may be reclassified to profit and loss
Exchange differences on translation of parent operations
(82,157)
209,720
Total comprehensive income/(loss) for the financial period
(9,130,126)
(8,556,822)
The consolidated statements above should be read in conjunction with the accompanying notes.
Page 29 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June
Notes
Current assets
Cash
Other receivables
Other current assets
Total current assets
Non-current assets
Property, plant & equipment
Intangible assets
Investment in associate
Total non-current assets
TOTAL ASSETS
Current liabilities
Trade and other payables
Provisions
Other current liabilities
Total current liabilities
NET ASSETS
Equity
Contributed equity
Reserves
Retained earnings
TOTAL EQUITY
7
8
9
10
11
16
12
13
14
15
17
2018
US$
2017
US$
1,665,967
9,467,512
109,660
69,847
85,449
85,135
1,845,474
9,638,096
86,341
104,701
956,869
1,170,786
99,999
-
1,143,209
1,275,487
2,988,683
10,913,583
237,164
192,363
262,466
691,993
234,837
179,219
122,652
536,708
2,296,690
10,376,875
26,607,205
25,921,031
4,147,507
3,865,897
(28,458,022)
(19,410,053)
2,296,690
10,376,875
The consolidated statements above should be read in conjunction with the accompanying notes.
Page 30 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Contributed
Reserves
Retained
Equity
US$
Earnings
US$
US$
Total
Equity
US$
Balance at 30 June 2016
18,713,801
3,290,025
(10,643,511)
11,360,315
Profit (loss) for the year
Exchange differences on translation of the
parent operation
Total comprehensive income for the year
Transactions with owners in their capacity as owners
Options issued
Contributions
Total
-
-
-
-
-
-
209,720
(8,766,542)
(8,766,542)
-
-
-
209,720
209,720
(8,766,542)
(8,556,822)
-
366,152
7,207,230
-
7,207,230
366,152
-
-
-
366,152
7,207,230
7,573,382
Balance at 30 June 2017
25,921,031
3,865,897
(19,410,053)
10,376,875
Balance at 1 July 2017
25,921,031
3,865,897
(19,410,053)
10,376,875
Profit (loss) for the year
Exchange differences on translation of the
Parent operation
Total comprehensive income for the year
Transactions with owners in their capacity as owner
Options issued
Contributions
Total
-
-
-
-
(9,047,969)
(9,047,969)
(82,157)
-
(82,157)
(82,157)
(9,047,969)
(9,130,126)
-
363,767
686,174
686,174
363,767
-
-
-
363,767
686,174
1,049,941
Balance at 30 June 2018
26,607,205
4,147,507
(28,458,022)
2,296,690
The consolidated statements above should be read in conjunction with the accompanying notes.
Page 31 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 30 June
Notes
Cash flow from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
R&D tax offset
2018
US$
2017
US$
948,927
431,079
(9,314,410)
(8,592,167)
24,490
112,590
79,240
79,253
Net cash used in operating activities
18
(8,261,753)
(7,968,975)
Cash flow from investing activities
Payment for property, plant & equipment
Payment for software development
Payment for investment in Ivy Koin and tokens
Net cash used in investing activities
Proceeds from financing activities
Proceeds from share issue
Net cash provided by financing activities
(15,838)
(97,038)
(273,893)
(761,382)
(100,000)
-
(389,731)
(858,420)
686,176
7,207,230
686,176
7,207,230
Net increase (decrease) in cash held
(7,965,308)
(1,620,165)
Reconciliation of cash
Cash at the beginning of the financial year
Net increase (decrease) in cash held
Foreign exchange difference on cash holding
9,467,512
10,878,455
(7,965,308)
(1,620,165)
163,763
209,222
Cash and cash equivalents at end of the year
7
1,665,967
9,467,512
The consolidated statements above should be read in conjunction with the accompanying notes.
Page 32 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
Summary of Significant Accounting Policies
These consolidated financial statements relate to Change Financial Limited and the entities it controlled
at the end of, or during, the year ended 30 June 2018 and have been prepared in accordance with rule
4.3A of the ASX Listing Rules (Appendix 4E).
The principal accounting policies adopted in preparing the financial report of the Company and its
consolidated entities (Consolidated Entity or Group) for the year ended 30 June 2018 are stated to
assist in a general understanding of the financial report. For the purposes of preparing the financial
report the Company is a for profit entity.
Change Financial Limited is a company limited by shares incorporated in Australia whose share are
publicly traded on the Australian Securities Exchange.
(a) Compliance with IFRS
The Consolidated Financial Report of Change Financial Limited complies with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
(b) Historical Cost Convention
The Consolidated Financial Report of Change Financial Limited has been prepared under the historical
cost convention.
(c) Principles of Consolidation
The consolidated financial statements are those of the consolidated entity, comprising the financial
statements of the parent entity and all of the entities the parent controls. The Group controls an entity
where it has the power, for which the parent has exposure or rights to variable returns from its
involvement with the entity, and for which the parent has the ability to use its power over the entities
to affect the amount of its returns.
The financial statements of subsidiaries are prepared for the same reporting period as the parent
entity, using consistent accounting policies. Adjustments are made to bring into line any dissimilar
accounting policies which may exist.
All inter-company balances and transactions, including any unrealised profits or losses have been
eliminated on consolidation. Subsidiaries are consolidated from the date on which control is transferred
to the Group and are de-recognised from the date that control ceases.
Non-controlling interests in the result of subsidiaries are shown separately in the consolidated
statement of comprehensive income and consolidated statement of financial position respectively.
(d) Foreign Currency Translations and Balances
Presentation currency
The financial statements of each entity within the consolidated entity are measured using the currency
of the primary economic environment in which that entity operates (the functional currency). The
consolidated financial statements are presented in US dollars which is the consolidated entity’s
functional and presentation currency.
Page 33 of 58
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Change Financial Limited
Annual Report
For year ended 30 June 2018
Transactions and balances
Transactions in foreign currencies of entities within the consolidated group are translated into
functional currency at the rate of exchange ruling at the date of the transaction.
Foreign currency monetary items that are outstanding at the reporting date (other than monetary
items arising under foreign currency contracts where the exchange rate for that monetary item is fixed
in the contract) are translated using the spot rate at the end of the financial year.
Non-monetary items that are measured in terms of historical cost in a foreign currency are not
retranslated
Except for certain foreign currency hedges, all resulting exchange differences arising on settlement or
re- statement are recognised as revenues and expenses for the financial year.
•
•
•
•
Current assets and liabilities are translated at the closing rate on reporting date;
Non-current assets are translated at historical cost
Income and expenses are translated at actual exchange rates or average exchange rates for the
period where appropriate; and
All resulting exchange differences are recognised in other comprehensive income.
(e)
Revenue
Providing services
Revenue is measured at the fair value of the consideration received or receivable to the extent that it is
probable that the economic benefit will flow to the Company and the revenue can be reliably
measured. Revenue is derived from earning a share of interchange revenue derived from purchases
made using the ChimpChange branded prepaid cards and from earning fees charged to customers.
Interest income
Interest revenue is recognised on a proportional basis using the effective interest method taking into
account the interest rates applicable to the financial assets.
(f)
Income tax
Current income tax expense or revenue is the tax payable on the current period's taxable income based
on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities.
Deferred tax assets and liabilities are recognised for temporary differences at the applicable tax rates
when the assets are expected to be recovered or liabilities are settled. Deferred tax liabilities are not
recognised if they arise from the initial recognition of goodwill.
Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in
a transaction other than a business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss.
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.
Current and deferred tax balances attributable to amounts recognised directly in equity are also
recognised directly in equity.
Page 34 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
(g)
Financial Instruments
Non-derivative financial instruments
Non-derivative financial instruments consist of investments in equity and debt securities, trade and
other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.
Non-derivative financial instruments are initially recognised at fair value, plus directly attributable
transaction costs (if any), except for instruments recorded at fair value through profit or loss. After
initial recognition, non-derivative financial instruments are measured as described below.
Financial liabilities
Financial liabilities include trade payables, other creditors and loans from third parties including inter-
company balances and loans from or other amounts due to director-related entities.
Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less
principal payments and amortisation.
Financial liabilities are classified as current liabilities unless the Group has an unconditional right to
defer settlement of the liability for at least twelve months after the reporting period.
(h) Property, plant & equipment
Plant and equipment
Plant and equipment Is carried at cost less accumulated depreciation and, where applicable, any
accumulated impairment losses.
Depreciation
The depreciable amount of all property, plant and equipment is depreciated over their estimated useful
lives commencing from the time the asset is held ready for use. Land and the land component of any
class of property, plant and equipment is not depreciated.
Class of fixed asset
Motor vehicles under lease
Office equipment
Office fit-out
(i) Software development
Depreciation rates
12.5%
25%
10%
Depreciation basis
Straight line
Straight line
Straight line
Software development costs are capitalised when it is probable that the project will be a success
considering its commercial and technical feasibility; the entity is able to use or sell the asset; the
software will generate probable future economic benefits; the entity has sufficient resource and intent
to complete the development and its costs can be measured reliably.
Capitalised software development expenditure is stated at cost less accumulated amortisation.
Amortisation is calculated using the straight-line method to allocate the cost over three years. The asset
carrying value is reviewed for impairment annually and amounts are written off to the extent that
realisable future benefits are considered to be no longer probable.
(j)
Impairment of non-financial assets
Intangible assets are tested annually for impairment, or more frequently if events or changes in
circumstances indicate that they might be impaired.
Page 35 of 58
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Change Financial Limited
Annual Report
For year ended 30 June 2018
An impairment loss is recognised where the carrying amount of the asset exceeds its recoverable
amount. The recoverable amount of an asset is defined as the higher of its fair value less costs to sell
and value in use.
(k) Employee benefits
Short term employee benefit obligations
Liabilities arising in respect of wages and salaries, annual leave and any other employee benefits
expected to be settled wholly within twelve months of the reporting date are measured at their
nominal amounts based on remuneration rates which are expected to be paid when the liability is
settled. The expected cost of short- term employee benefits in the form of compensated absences such
as annual leave is recognised in the provision for employee benefits. All other short-term employee
benefit obligations are presented as payables.
Long term employee benefit obligations
Liabilities arising in respect of long service leave and annual leave which is not expected to be settled
wholly within twelve months of the reporting date are measured at the present value of the estimated
future cash outflow to be made in respect of services provided by employees up to the reporting date.
Employee benefit obligations are presented as current liabilities in the balance sheet if the entity does
not have an unconditional right to defer settlement for at least twelve months after the reporting date,
regardless of when the actual settlement is expected to occur.
(l) Goods and services tax (GST)
Revenues, expenses and purchased assets in Australia are recognised net of the amount of GST, except
where the amount of GST incurred is not recoverable from the Tax Office. In these circumstances the
GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables in the consolidated statement of financial position are shown inclusive of
GST.
Cash flows are presented in the consolidated statement of cash flows on a gross basis, except for the
GST component of investing and financing activities, which are disclosed as operating cash flows.
(m) Rounding
The company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191, related to the 'rounding off' of amounts in the financial statements. Amounts in
the financial statements have been rounded off in accordance with that Legislative Instrument to the
nearest dollar, unless otherwise indicated.
(n) Intangible digital assets
The company has elected to measure its digital assets at cost in accordance with AASB138 Intangible
Assets as market volume to date does not demonstrate an active market.
(o) Ongoing operations
These financial statements have been prepared on a going concern basis which contemplates the
continuity of normal business activity and the realisation of assets and the settlement of liabilities in
the normal course of business.
At 30 June 2018 the Group had net current assets of $1,153,481 including $1,665,967 of cash and cash
equivalents. During July 2018 the Company raised A$3,269,000 (net of fees) through a private
Page 36 of 58
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Change Financial Limited
Annual Report
For year ended 30 June 2018
placement. For the year ended 30 June 2018 the Group incurred an operating cash outflow of
$8,261,753 and a net loss for the period of $9,047,969.
As set out in the Chair’s letter the Company’s Consumer Banking business has been unable to scale
revenues at the same pace as transaction volume and the development of the processor that is at the
core of the Enterprise business has taken longer than originally planned when the Company first
embarked on this strategy.
Without additional capital the Group will be unable to continue to invest in both businesses at the
current rate.
At the date of this report the Directors have implemented plans to address this issue including
undertaking a strategic assessment of each of those business units and considering what core
operational and development strategies represent the best business opportunities for the Group in
light of a potentially reduced capacity to fund investment in those businesses. Additionally, the
Directors have received term sheets with alternative quasi equity investors that will provide the Group
with sufficient short-term funding to ensure development operations, as revised, are maintained. The
Directors will also review other capital raising options and strategic partnerships.
As a result, the Directors have concluded that these events and conditions are subject to material
uncertainty that may cast significant doubt over the Group’s ability to continue as a going concern and,
therefore, it may be unable to realise its assets and discharge its liabilities in the normal course of
business.
The Board will continue to monitor and pursue the development of fund raising opportunities and
assess its commitment to ongoing expenditure requirements to achieve a sustainable business model.
The Directors believe that the company will be successful in carrying out its plans described above,
therefore, these financial statements have been prepared on a going concern basis.
No adjustments have been made to the financial report relating to the recoverability and classification
of the asset carrying amounts or the amounts and classification of liabilities that might be necessary
should the Group not continue as going concerns.
(p) Investment in Associates
Associates are those entities over which the Group is able to exert significant influence but which are
not subsidiaries.
Investments in associates are accounted for using the equity method. The carrying amount of the
investment in associates is increased or decreased to recognise the Group’s share of the profit or loss
and other comprehensive income of the associate, adjusted where necessary to ensure consistency
with the accounting policies of the Group.
Unrealised gains and losses on transactions between the Group and its associates are eliminated to the
extent of the Group’s interest in those entities. Where unrealised losses are eliminated, the underlying
asset is also tested for impairment.
(q) Cash and cash equivalents
For cash-flow presentation purposes, 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.
Page 37 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
(r) Standards and Interpretations on Issue Not Yet Adopted
The Directors have reviewed all new Standards and Interpretations that have been issued but are not
yet effective for the year ended 30 June 2018. As a result of this review the Directors have determined
that there is no material impact of the new and revised Standards and Interpretations on the Group
and, therefore, no change is necessary to Group accounting policies.
(s) Leases
Lease payments for operating leases, where substantially all the risks and benefits remain with the
lessor, are recognised as expenses on a straight-line basis over the lease term.
2.
Critical Accounting Judgements
Estimates and judgements are continually evaluated and are based on historical experience and other
factors, including expectations of future events that may have a financial impact on the entity and that
are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates
will, by definition, seldom equal the related actual results. The estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below.
Estimated impairment of intangible assets and other non-current assets
Determining whether non-current assets are impaired requires an estimation of the value in use of
those assets. The value in use calculation requires the directors to estimate the future cash flows
expected to arise from the Group and a suitable discount rate in order to calculate present value.
Where the actual future cash flows are less than expected, a material impairment loss may arise.
Share- based payments transactions
The Group measures the cost of equity settled transactions by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using either the
Black-Scholes or Binomial model taking into account the terms and conditions upon which the
instruments were granted. The accounting estimates and assumptions relating to equity-settled share-
based payments would have no impact on the carrying amounts of assets and liabilities within the next
annual reporting period but may impact profit or loss or equity.
Digital Assets
At the date of preparation of these financial statements, no Accounting Standard has been developed
that specifically addresses the issue of accounting for digital assets. In the opinion of the directors, the
accounting approach that most aligns with the existing suite of Accounting Standards is to recognise
digital asset holdings as intangible assets. The Company has elected to measure its digital assets at cost
in accordance with Accounting Standard AASB138 Intangible Assets.
3.
Operating Segments
The Group is organised into a single operating segment being the provision of digital banking services.
Page 38 of 58
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Change Financial Limited
Annual Report
For year ended 30 June 2018
4.
Revenue
Revenue from services
Interest revenue
Revenue from admin/bookkeeping services
Research & development tax refund
Total Revenue
5.
Expenses
Profit / loss before income tax has been determined after:
Amortisation and depreciation
Depreciation of property, plant & equipment
Amortisation of software development costs
Share based payments
Options issued to employees, directors & company secretary
Options issued to service providers and advisors
6.
Income Tax Expense
Reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the Australian tax rate of 30% (2017: 30%)
Differences in overseas tax rates
Tax effect of amounts which are not deductible/(taxable) in calculating
taxable income
Share based payments expense
Other
Current year tax losses not recognised
Income tax expense
2018
US$
828,138
24,490
145,000
79,240
1,076,868
2017
US$
409,079
112,590
-
79,523
601,192
2018
US$
2017
US$
33,639
487,812
23,456
402,466
363,767
-
409,278
(43,126)
2018
US$
2017
US$
(9,047,969)
(8,766,542)
(2,713,391)
(2,629,963)
384,448
(736,312)
109,130
(5,117)
109,846
(35,054)
2,224,930
3,291,483
-
-
Deferred tax assets of $8,234,432 (2017: $6,009,501) in respect of temporary differences and tax losses have not
been recognized.
Page 39 of 58
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Change Financial Limited
Annual Report
For year ended 30 June 2018
7.
Current assets - Cash and cash equivalents
Cash at Bank
1,665,967
9,467,512
2018
US$
2017
US$
8.
Current assets – Receivables
2018
US$
2017
US$
Other receivables
109,660
85,449
9.
Current assets – Other assets
2018
US$
2017
US$
Prepayments
69,847
85,135
10.
Property, plant and equipment
Motor vehicles under lease
Accumulated depreciation
Closing carrying value
Office fit-out at cost
Accumulated depreciation
Closing carrying value
Office equipment at cost
Accumulated depreciation
Closing carrying value
2018
US$
6,302
(1,870)
4,432
51,605
(7,735)
43,870
98,419
(60,380)
38,039
2017
US$
6,302
(1,252)
5,050
51,605
(2,574)
49,031
83,140
(32,520)
50,620
Total property, plant & equipment
86,341
104,701
Page 40 of 58
For personal use only Change Financial Limited
Annual Report
For year ended 30 June 2018
Reconciliation of movement
Reconciliation of the carrying amounts of property, plant & equipment at the beginning and end of the
financial year
Motor vehicle
under lease
US$
Office
Fit Out
US$
Office
Total
Equipment
US$
US$
2018
Opening carrying amount
Additions
Depreciation expense
Closing carrying amount
2017
Opening carrying amount
Additions
Depreciation expense
Closing carrying amount
11.
Intangible assets
Patents, trademarks & licenses at costs
ivyKoin tokens at cost
Software development at cost
Accumulated amortisation
Total intangible assets
5,050
-
(618)
4,432
5,668
-
(618)
5,050
49,031
-
(5,161)
43,870
-
51,605
(2,574)
49,031
50,620
15,279
(27,860)
38,039
24,952
45,932
(20,264)
50,620
104,701
15,279
(33,639)
86,341
30,620
97,537
(23,456)
104,701
Note
1(n)
2018
US$
1,131
1
2017
US$
1,131
-
2,110,914
1,837,020
(1,155,177)
(667,365)
956,869
1,170,786
Page 41 of 58
For personal use only Change Financial Limited
Annual Report
For year ended 30 June 2018
Patents,
trademarks &
IvyKoin
Software
Total
licenses
Tokens
Development
US$
US$
US$
US$
2018
Opening carrying amount
Additions
Amortisation expense
Closing carrying amount
2017
1,131
-
-
1,131
Opening carrying amount
1,131
Additions
Amortisation expense
Net foreign currency movement
-
-
-
Closing carrying amount
1,131
12. Trade and other payables
Unsecured liabilities
Accounts payable
-
1
-
1
-
-
-
-
-
1,169,655
1,170,786
273,893
(487,812)
955,737
273,894
(487,812)
956,869
810,001
761,382
811,132
761,382
(402,466)
(402,466)
738
738
1,169,655
1,170,786
2018
US$
2017
US$
237,164
234,837
The Group has financial risk management policies in place to ensure that all payables are paid within the credit time
frame.
13. Provisions
Unsecured liabilities
Employee leave provisions
14. Other current liabilities
2018
US$
2017
US$
192,363
179,219
2018
US$
2017
US$
Other liabilities
262,466
122,652
Page 42 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
15.
Issued capital
(i)
Share Capital
As at 30 Jun
2018
US$
2017
US$
73,564,879 fully paid ordinary shares1 (30 June 2017: 71,844,410)
26,607,205
25,921,031
1 This amount excludes 6,036,457 shares (30 June 2017– 6,036,457) issued under the Loan Funded Share Plan (LFSP). These shares will be
recognised in Share Capital when the loan advanced under the LFSP to acquire those shares is repaid.
Ordinary shares entitle the holder to participate in the dividends and the proceeds on winding up of the
Company in proportion to the number of and amounts paid on the shares held. On a show of hands
every holder of ordinary shares present at a meeting in person or by proxy is entitled to one vote and
upon a poll each is share is entitled to one vote.
(ii) Movements in ordinary share capital
Number
US$
Balance at 30 June 20161
Shares issued pursuant to a placement at A$0.72 per share – May
2017
Transaction fees in respect of the placement – May 2017
Exercise of options – June 2017
Shares recognised under the Loan Funded Share Plan – June 2017
Balance at 30 June 20171
Exercise of options – 2018
Balance at 30 June 20181
57,330,640
13,888,889
-
510,595
114,286
71,844,410
1,720,469
73,564,879
18,713,801
7,450,000
(447,000)
204,230
-
25,921,031
686,174
26,607,205
1 Excludes shares issued under the Loan Funded Share Plan (LFSP). These shares are recognised in Share Capital when the loan advanced under the
LFSP to acquire those shares is repaid. At 30 June 2018 6,036,457 such shares were excluded (2017: 6,036,457). Total fully paid shares on issue at
30 June 2018 was 79,601,336 (2017: 77,880,867).
Ordinary shares entitle the holder to participate in the dividends and the proceeds on winding up of the
Company in proportion to the number of and amounts paid on the shares held. On a show of hands
every holder of ordinary shares present at a meeting in person or by proxy is entitled to one vote and
upon a poll each is share is entitled to one vote.
Capital Management
Management controls the capital of the Company to ensure the Company can fund its operations and
continue as a going concern.
Page 43 of 58
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Change Financial Limited
Annual Report
For year ended 30 June 2018
16.
Investment in associates
2018
US$
2017
US$
Investment in associates
99,999
-
Investment in Associates represents a 33.34% investment in ivyKoin LLC (“Ivy”). Ivy is not controlled by
Change Financial Limited (“CFL”) at year end, however is subject to significant influence. Ivy is in the
process of developing the ivyKoin Network, which will enable KYC, KYT, and AML data supporting
transactions to be captured using a blockchain-based cryptocurrency. It will be optimally designed for
transactions with financial institutions, embedding more compliance and transaction audit information
than incumbent payment networks.
Prior to year-end, Ivy received $17m in proceeds from a token pre-sale that occurred in February 2018,
raised in connection with the issuance of Ivy’s White Paper. Subsequent to the pre-sale, ivyKoin tokens
were issued pursuant to a token generation event in April 2018. The token pre-sale proceeds consisted
of $12m in cash receipts and $5m in digital assets. The proceeds are being used to develop the IvyKoin
Network.
In accordance with CFL’s accounting policies, the proceeds of the token pre-sale would be recorded as
deferred revenue pending the development of the ivyKoin Network. Costs incurred by Ivy to date would
be recorded either as capitalised intangible assets, where they meet the requirements for recognition
on the Statement of Financial Position, or as expenditure in the Statement of Financial Performance.
Under equity accounting principles, the carrying value of CFL’s investment in Associates should be
adjusted annually to reflect CFL’s proportionate share of the annual net income or loss of Ivy. In
accordance with the principles of materiality, the carrying value of the Investment in Associates has not
been adjusted at 30 June 2018 as the directors do not believe that any adjustment arising from CFL’s
proportion of the net loss reported by Ivy for the year would have a material effect on the financial
statements.
The financial records of Ivy are unaudited and have not been subject to either a review or an audit for
the year to 30 June 2018.
In addition to the above, CFL subscribed for 130m tokens in the Ivy pre-sale event. Refer to Note 11 for
further details of the carrying amount of this intangible asset.
On 4 July 2018, CFL signed a Call Option Agreement to acquire the remaining 66.66% of membership
units in Ivy. Refer to Post Balance Date Events Note 31 for further details. At the date of this financial
report, the option to acquire the remaining units had not been executed.
Page 44 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
17. Reserves
Share based payment reserve
Foreign currency translation reserve
Total reserves
(a)
Share based payment reserve
Balance at the start of the period
Options issued / vested
Closing balance
(b)
Foreign currency translation reserve
Opening balance
Exchange differences on translation of parent operation
Closing balance
2018
US$
2017
US$
4,020,832
3,657,065
126,675
208,832
4,147,507
3,865,897
3,657,065
3,290,913
363,767
366,152
4,020,832
3,657,065
208,832
(82,157)
126,675
(888)
209,720
208,832
Share based payment reserve
The reserve is used to recognise the value of options issued to employers, directors and other parties as
part of their remuneration of as part of their compensation for services provided to the Group.
Foreign currency translation reserve
The reserve is used to recognise exchange differences arising from the translation of the financial
statements of the holding company to United States dollars.
18.
Reconciliation of profit after income tax to net cash inflow from operating
activities
Loss for the year
Depreciation and amortisation
Share based payments
Decrease (increase) in current receivables
Increase (decrease) in current liabilities
Net cash used in operating activities
2018
US$
2017
US$
(9,047,969)
(8,766,542)
521,451
425,922
363,767
366,152
(138,889)
(44,619)
39,887
50,112
(8,261,753)
(7,968,975)
Page 45 of 58
For personal use only Change Financial Limited
Annual Report
For year ended 30 June 2018
19. Earnings per share
2018
US$
2017
US$
Loss attributable to ordinary equity holders of Change Financial Limited
(9,047,969)
(8,766,542)
Weighted average number of ordinary shares used as a denominator
in calculating basic earnings per share
72,782,544
64,862,437
Weighted average number of ordinary shares and dilutive potential ordinary shares
used as a denominator calculating diluted earnings per share
72,782,544
64,862,437
20. Dividend
There were no dividends paid, recommended or declared during the current or previous period.
21. Financial risk management
The Group's activities may expose it to a variety of financial risks: market risk (including currency risk,
interest rate risk and price 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.
Risk management is carried out by senior management in consultation with the Board of Directors. The
Board provides principles for overall risk management, as well as direction in specific areas.
Market Risk
Foreign currency risk
The Group has transactional currency exposures. Such exposures arise from transactions by the Group in
currencies other than the functional currency.
At balance date, the Group had the following exposures to Australian dollars (A$) that are not designated
cash flow hedges.
As at 30 June
Cash at bank
Current assets
Current liabilities
Net monetary assets / liabilities designated in AUD
2018
A$
841,599
92,974
(96,333)
838,240
2017
A$
4,770,803
78,609
(163,927)
4,685,485
Interest rate risk
Interest rate risk is considered immaterial as the Group’s only exposure to interest rate risk is cash at
bank.
Price risk
The Group is not exposed to any significant price risk.
Page 46 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
Credit Risk
Credit risk refers to the risk that a counterparty will default on it contractual obligations resulting in a
financial loss to the Group. The Group deemed its credit risk to be minimal as its financial assets are
mainly cash held at BankWest which is a subsidiary of Commonwealth Bank of Australia. No financial
assets are past due and none are impaired.
Liquidity Risk
The Group manages liquidity risk by maintaining adequate cash balances and by continuously
monitoring forecasts and actual cash flows matching maturity profiles of financial assets and liabilities.
Financing arrangements
The Group does not have access to any undrawn borrowing facilities at the end of the reporting period.
Maturities of financial liabilities
At period end the Group had accounts payable of $237,164 (2017: $234,837) all of which have a
maturity of less than 6 months. The Group has no other financial liabilities.
22. Subsidiaries
The consolidated financial statements include the assets, liabilities and results of the following
subsidiaries:
Name of Entity
Country of
Incorporation
Equity Type
Holding
Holding
Chimpchange LLC
US
Membership units
Change Labs NZ Pty Ltd
Australia
Ordinary Shares
23. Accumulated Losses
As at 30 June
Opening balance of accumulated losses
Loss for the period
Closing balance of accumulated losses
2018
%
100
100
2018
US$
2017
%
100
100
2017
US$
(19,410,053)
(10,643,511)
(9,047,969)
(8,766,542)
(28,458,022)
(19,410,053)
Page 47 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
24. Parent entity financial information
The individual financial statements for the Parent entity show the following aggregate amounts:
As at 30 June
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Net Assets
Shareholders’ equity
Issued Capital
Reserves
Retained Earnings
Total shareholders’ equity
Loss for the period
Total comprehensive loss
2018
US$
2017
US$
1,514,498
7,729,825
22,030,562
16,155,230
23,545,060
23,885,055
150,441
150,441
126,093
126,093
23,394,619
23,758,962
26,607,205
25,921,031
4,147,507
3,865,897
(7,360,093)
(6,027,965)
23,394,619
23,758,962
(1,332,128)
(1,374,754)
(1,332,128)
(1,374,754)
25. Key management personnel disclosures
Directors
The following persons were directors of Change Financial Limited during the financial year:
Non-executive directors
Peter Clare – Chairman (resigned 31 August 2018)
Teresa Clarke
Ben Harrison (resigned 27 November 2017)
Andrew Pipolo
Executive Directors
Ashley Shilkin – Executive Director
Ian Leijer – Executive Director
Other key management personnel
The following persons also had responsibility for planning, directing and controlling the activities of the
Group, directly or indirectly, during the financial year. They are employed by Chimpchange LLC
Clayton Fossett – Chief Operating Officer
Young Lee – Chief Financial Officer
Page 48 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
Key management personnel compensation
Short term employee benefits
Post employment benefits
Share based payments
Total
Detailed remuneration disclosures are provided in the remuneration report.
26. Remuneration of auditors
The auditor of Change Financial Limited is Pitcher Partners
As at 30 June
Amounts received or due and receivable for current auditors:
An audit or review of the financial report of the entity and any other
entity in the consolidated group
Other services in relation to the entity and any other entity in the consolidated
group – tax compliance, tax structuring, independent expert report for the initial
public offering
2018
US$
808,442
10,000
187,073
2017
US$
851,475
13,077
284,340
1,005,515
1,148,892
2018
US$
2017
US$
58,020
56,589
31,657
14,064
Total
89,677
70,653
27. Related Party Transactions
Transactions with related parties
Compensation paid to some directors were paid to director related entities with further details set out
in the Remuneration Report. In addition, the following transactions occurred with related parties.
As at 30 June
2018
US$
2017
US$
Loans to (Repayments from) Directors and their related entities
LFSP1 to entity associated with Mr Leijer (A$30,738)
-
(30,768)
1 Loan Funded Share Plans
Options issued to directors and director related entities
33,262
157,869
Subscriptions for new ordinary shares by KMP as a result of exercise of options
and settled with cash
-
-
28. Contingent liabilities
The Group has no contingent liabilities.
Page 49 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
29. Commitments
The Group has a property lease commitment relating to the occupancy of the group’s current premise. This lease
was entered into on 1 August 2016 for a 65 month term. The group has future lease payments which are
contracted but not capitalized in the financial statements.
Chimpchange LLC has a commitment to pay minimum monthly fees under its Gateway Services agreement with
Mastercard for the period from 1 July 2018 to 31 December 2024.
Payments contracted for but not recognised in the financial statements:
Not later than 12 months
Later than 12 months but not later than five years
Later than years
2018
US$
338,090
1,577,264
150,000
2017
US$
149,900
580,354
-
30. Post Balance Date Events
Ivy call option agreement
Change Financial Limited entered into a call option to acquire the remaining stake in Ivy Koin LLC and
Ivy Blockchain Pty Ltd (“Ivy Entities”) in July of 2018. The purchase of the call option for US$250,000
affords the right for Change Financial Limited to acquire the remaining equity in the Ivy Entities for the
following consideration:
• US$8m in CCA shares based on a price per share of A$0.80 equating to approximately 13.5m
shares; and
• US$1.75m Cash.
Shares issued
Change Financial Limited raised $3,269,000 in a placement of shares in the first week of July 2018, net
of fees.
Page 50 of 58
For personal use only
Change Financial Limited
Annual Report
For year ended 30 June 2018
DIRECTORS DECLARATION
In the opinion of the directors:
(a)
the financial statements and notes set out on pages 27 to 50 are in accordance with the Corporations Act
2001, including:
(i) complying with Australian Accounting Standards and the Corporations Regulations 2001 and other
mandatory professional reporting requirements; and
(ii) giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its performance
for the financial year ended on that date; and
(b)
there are reasonable grounds to believe that the Group will be able to pay its debts as and when they
become due and payable.
Note 1(a) confirms that the financial statements also comply with International Financial Reporting Standards
as issued by the International Accounting Standards Board.
The directors have been given the declarations by the Executive Chair and chief financial officer required by
section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
Executive Chair
Los Angeles, California
28 September 2018
Page 51 of 58
For personal use only Independent auditor’s report to the members of Change Financial Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Change Financial Limited “the Company” and its controlled entities “the
Group”, which comprises the consolidated statement of financial position as at 30 June 2018, the consolidated
statement of comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group 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 2018 and of its financial
performance for the year then ended; 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 auditor 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 confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1(o) in the financial report which indicates that as at 30 June 2018 the Group has
$1,665,967 (2017: $9,467,512) in cash and cash equivalents. The Group also incurred a loss after tax of
$9,047,969 (2017: $8,766,542 loss) and a net cash outflow from operating activities of $8,261,753 (2017:
$7,968,975 outflow) for the year then ended. The continuing cash outflows from operating activities have
reduced the Group’s cash and net working capital position. This may reduce the Group’s ability to invest in the
consumer and enterprise businesses which may limit the development of near term revenue streams to
sustain the current level of operating cash outflow.
For personal use only As stated in Note 1(o), these events or conditions, along with other matters as set forth in Note 1(o), indicate
that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
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.
Key audit matter
How our audit addressed the matter
Going Concern
Refer to Notes 1(o) in the Annual Report
The Group remains in the growth phase with respect
to its consumer banking product, whilst in the
development phase of its enterprise and blockchain
solutions. Revenue from the consumer banking
product continued to grow during the year, however
the underlying revenue metrics and profitability have
proved difficult to scale and as a result, the Group has
recorded operating
losses and operating cash
outflows for a number of years.
The Directors have continued to adopt the going
concern basis of preparation in preparing the Group
Financial Statements, having taken account of the
capital raising completed during July 2018 to raise an
additional $3,269,000 (net of fees), and having
prepared detailed cash flow forecasts that are subject
material uncertainty as to whether the Group will
have sufficient cash resources to pay its forecast
liabilities for a period of at least 12 months from the
date these Financial Statements were approved.
The Director’s assessment of the Group’s going
concern ability was an area of focus as it requires
significant
the key
assumptions supporting the expected future cash
flows, including but not limited to:
in determining
judgement
product
banking
consumer
forecast
revenues;
forecast development expenditure on
enterprise and blockchain solutions; and
forecast operating expenses.
Our procedures included, amongst others:
Checking to satisfy ourselves that the cash flow
forecast prepared by the Directors is consistent
with that approved by the Board and that it has
been subject to the appropriate review and
approval processes and controls;
Inspecting existing consumer banking product
the Directors’
challenging
revenue
assumptions on forecast consumer banking
product revenues. This included assessing the
reliability of historical forecasts;
and
Discussing with those charged with governance
their funding, business and cash flow strategies
for a period of at least 12 months from date of
signing the financial report;
Obtaining supporting documentation in relation
to alternative funding strategies and options that
management is considering;
Understanding the Directors’ assumptions for
forecast cash outflows during the period under
review for the purpose of concluding on the
reasonableness of the estimated cash outflows.
This included, amongst others, assessing the
consistency of forecast expenses with prior year
expenditure; and
Assessing the appropriateness of the disclosures
included in the financial report when events or
conditions have been identified and material
uncertainty exists.
For personal use only Key audit matter
How our audit addressed the matter
Accounting for Investment in Associates
Refer to Note 16: Investment in Associates
The Group acquired 33% of the issued units in
IvyKoin LLC during the year. This investment has
been classified and measured as an investment in an
associate using the equity accounting methodology.
We have focused on this area because there is
currently no accounting standard specifically
addressing how to account for the proceeds derived
from cryptocurrency generation, and therefore the
resulting measurement of the Group’s equity
accounted investment post acquisition required
significant accounting judgement.
Our procedures included, amongst others:
associated with
Obtaining an understanding of the relevant
accurate
the
controls
measurement of equity investments;
Reviewing the White Paper of ivyKoin LLC (“the
investee”) to determine the stated purpose /
application of the token raise, and assessing the
investee’s current performance against those
stated objectives;
Critically evaluating the Group’s assessment of
token
the
generation proceeds, resulting in the Group’s
classification of the proceeds as deferred
revenue; and
Assessing the adequacy of the disclosure in the
financial report.
investee’s accounting
the
for
Other Information
The directors are responsible for the other information. The other information comprises the Corporate
Directory, Directors’ Report, Corporate Governance Practices & Conduct and ASX Additional Information which
was obtained as at the date of our audit report, and any additional other information that will be included in the
Group’s annual report for the year ended 30 June 2018, 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 identified
above 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.
When we read the additional other information in the Annual Report not yet received, if we conclude that there
is a material misstatement therein, we are required to communicate the matter to the directors and use our
professional judgment to determine the appropriate action to take.
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 ability of the Group 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 has no realistic
alternative but to do so.
For personal use only 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.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the
direction, supervision and performance of the Group audit. We remain solely responsible for our audit
opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
For personal use only Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 9 to 15 of the Directors’ Report for the year ended
30 June 2018. In our opinion, the Remuneration Report of Change Financial Limited, for the year ended 30 June
2018, 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.
PITCHER PARTNERS
JASON EVANS
Partner
Brisbane, Queensland
28 September 2018
For personal use only Change Financial Limited
Annual Report
For year ended 30 June 2018
ASX ADDITIONAL DISCLOSURE
Shareholder information at 27 September 2018
Shareholding Distribution and Unmarketable Parcels
% of Issued
Number of
% of Holders
Size of Shareholder
100,001 and Over
50,001 to 100,000
10,001 to 50,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Number of
Shares
58,531,728
7,864,687
13,312,484
2,994,321
2,583,635
348,864
85,635,719
Capital
68.35
9.18
15.55
3.50
3.02
0.41
100.00
Holders
112
99
545
375
920
495
2,546
Unmarketable Parcels
2,148,040
2.51
1,255
4.40
3.89
21.41
14.73
36.14
19.44
100.00
49.29
Top 20 Shareholders
Rank
Name
1
2
3
4
5
6
7
8
8
10
11
12
13
14
15
16
17
18
19
20
ASHLEY SHILKIN
AVATAR INDUSTRIES PTY LTD
BART PROPERTIES PTY LTD
NAREENEN PTY LTD
LEMEURICE PTY LTD
BOND STREET CUSTODIANS LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
AURISCH INVESTMENTS PTY LTD
BOND STREET CUSTODIANS LIMITED
MR DAVID FREDERICK OAKLEY
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR KIRIL BOITCHEFF & MRS SUZANNE JANET BOITCHEFF
FALCASTLE PTY LTD
MR ROSS ALLEN MC DONALD
WS DOBSON PTY LTD
MR RICHARD HOPETOUN BITCON
CSWSG PTY LTD
BOND STREET CUSTODIANS LIMITED
SAFARI SMSF PTY LTD
CITICORP NOMINEES
Top 20 Total
Total Shares on Issue
Number of
% of Issued
Shares
11,901,965
10,312,463
3,407,388
2,672,529
1,310,000
1,255,000
1,191,640
1,000,000
1,000,000
785,000
721,763
700,000
683,500
658,239
556,753
550,000
500,000
485,000
450,000
446,494
40,507,091
85,635,719
Capital
13.90%
11.95%
3.98%
3.12%
1.53%
1.47%
1.39%
1.17%
1.17%
0.92%
0.84%
0.82%
0.80%
0.77%
0.65%
0.64%
0.58%
0.57%
0.53%
0.52%
56.80%
100.00%
Page 57 of 58
For personal use only Change Financial Limited
Annual Report
For year ended 30 June 2018
Unquoted Options
Option ex price and expiry
Options @ $1.00 expiry 31‐Dec‐2018
Options @ $1.00 expiry 18‐Apr‐19
Options @ $1.00 expiry 20‐Apr‐19
Options @ $0.49 expiry 20‐Oct‐19
Options @$0.40 expiry 31‐Dec‐19
Options @$0.657 expiry 31‐Jan‐20
Options @$1.00 expiry 30‐Jun‐20
Options @$0.49 expiry 20‐Oct‐20
Options @$0.92 expiry 31‐Jan‐21
Options @$1.50 expiry 18‐Apr‐2021
Options @$2.35 expiry 18‐Apr‐2021
Total
Substantial Shareholders
Number of
Number of
Options
Holders
2,100,000
1,270,000
1,500,000
100,000
1,500,000
1,450,000
250,000
100,000
790,000
1,000,000
1,500,000
11,560,000
4
7
1
1
1
8
1
1
7
1
1
33
Substantial holders as disclosed in substantial holder notices given to the Company were as follows:
Name of substantial shareholder
Number of shares over which
% of issued
Ashely Shilkin
Avatar Industries Pty Limited
the relevant interest is held
11,901,965
10,312,463
capital
13.90
16.95
Page 58 of 58
For personal use only