2019
ANNUAL REPORT
COMPANY SECRETARY
Mr Andrew Whitten
AUDITOR
Stantons International Audit & Consulting Pty Ltd
Level 2, 22 Pitt Street
Sydney NSW 2000
CORPORATE GOVERNANCE
www.janison.com/investors/
ANNUAL GENERAL MEETING
Janison will hold its 2019 Annual General Meeting at
Level 5,126 Phillip Street, Sydney NSW 2000
at 4pm, 21 November 2019.
CORPORATE DIRECTORY
COMPANY
Janison Education Group Limited
ASX CODE
JAN
REGISTERED OFFICE
c/-Automic Registry Services
Level 5/126 Phillip St,
Sydney, NSW 2000
TELEPHONE
+61 2 8072 1400
WEB SITE
www.janison.com
www.ltctesting.com.au
SHARE REGISTRY
Automic Registry Services
Level 5, 126 Philip Street
Sydney, NSW 2000
BOARD OF DIRECTORS
Mr Mike Hill, Non-Executive Chairman
Mr Brett Chenoweth, Non-Executive Director
Mr David Willington, Non-Executive Director
Ms Allison Doorbar, Non-Executive Director
Mr Tom Richardson, CEO and Managing Director
Mr Wayne Houlden, Commercial Director
CONTENTS
2019 Highlights
3
4 Chairman’s Letter
6 Chief Executive Officer’s Letter
8 Board of Directors
11 Directors’ Report
22 Remuneration Report
37 Financial Report
68 Directors’ Declaration
69 Auditor’s Independence Declaration
70 Independent Auditor’s Report
76 Additional Information
Our purpose is
to transform how
people learn
WE HAVE FOUR KEY
PRIORITIES TO RAPIDLY
GROW THE BUSINESS
1 NURTURE existing clients
2 BUILD innovative world class products
3 TARGET high growth segments
4 INTENSIFY our sales and marketing spend
www.janison.com
JANISON ANNUAL REPORT 2019
3
Chairman’s
Letter
DEAR SHAREHOLDERS
Janison develops education technology
that transforms the way people learn. A true
pioneer in delivering innovative learning and
assessment solutions, Janison has enjoyed
another year of success, penetrating key
areas of the education market.
The group continues to deliver timely
solutions that meet the growing demand
for quality, reliable online assessment. The
world-wide appetite for such technology
is increasing as student numbers rise, and
more and more schools and higher education
institutions phase out pen-and-paper
assessments and transition to online testing.
Meanwhile, as configurable, enterprise-grade
online learning technology builds the skills
of the future, the Janison Academy platform
is successfully gaining global market share in
the education technology sector.
In FY19, Janison grew its total revenue by
30% to exceed $22 million and increase
its penetration of the key sectors in the
expanding education market, with schools
(K-12) revenue increasing by 44% and higher
education by 45%.
We are pleased to announce that the
established leadership team has successfully
transformed Janison into a product-focused
business in the past 12 months, increasing
Annualised Recurring Revenue (ARR) by 12%
in FY19. As a product business with Software-
as-a-Service (SaaS)-based recurring revenue,
high customer retention, increasing gross
margins, low capital to scale and global
market opportunity, we see this revenue
growth as the key indicator of success and
ultimate driver of value of the business.
The team is delivering on its plan to nurture
existing clients by retaining 97.5% in FY19,
increasing Average Revenue per Customer
(ARPC) and driving an increase in customer
lifetime value.
In FY19, Janison also successfully acquired
and integrated the Language and Testing
Consultants (“LTC”) business and we are
optimistic about our plan to help digitise the
57 clients newly acquired as a result of this
move, in the coming years.
Overall, the client base for the group is now
less concentrated and less dependent on the
success of a handful of clients.
During the past 12 months, Janison has
welcomed more world-class talent to the
company and bolstered its quality leadership
team based in Sydney.
Internationally, Janison continued its
expansion in FY19 with 20% of all revenue
derived from international clients and
the signing of an agreement with the
Organisation for Economic Cooperation
and Development (OECD) to become the
exclusive provider of the PISA-based test
for schools. The most recent announcement
includes the signing of an agreement to
deliver this digital assessment to schools in
Brazil, with many more countries expected to
follow this year and throughout FY20.
Janison has focused on two market segments
in which to expand: for Assessment, on
30%
GROWTH IN
REVENUE
4
JANISON ANNUAL REPORT 2019 schools (K-12) using Janison Insights; and for Learning,
on corporations using Janison Academy for the workplace.
The business plan is to deepen the penetration of these two
segments whilst targeting growth in adjacent areas.
We are surrounded by expansion opportunities for the
Janison Insights platform. Firstly, on the back of the
acquisition of LTC, we plan to accelerate our efforts to
expand online assessment into the higher education and
workplace sectors. Secondly, as customers increasingly
move from using traditional testing methods to online
assessment, our longer-term plan is to work with them and
their data to evaluate their education systems, including
organisational best practice and teaching/assessment
efficiencies.
With our powerful combined suite of digital assessment,
data capture and efficiency reporting offerings, we plan
to continue to transform the way teachers, faculty and
administrators learn in schools and higher education, using
the Janison Academy platform.
Having enjoyed a full year EBITDA run rate at June 2019
of $4 million, Janison generates sufficient free cash flow
to fund organic growth but is also considering selective
acquisitions aligned with these growth priorities.
On behalf of the Board, we would like to thank all our
stakeholders for believing in Janison’s ability to deliver
strong recurring revenue growth rates. We remain
committed to the growth strategy and expect continued
success in this immense global market.
I would also like to thank all Janison staff for their hard work
and fantastic achievements throughout the year, and look
forward to an exciting 2020 and beyond for the company.
Sincerely,
Mike Hill
Chairman
GROSS PROFIT BY SEGMENT
$7.9M
GROSS PROFIT
Assessment
$3.5 million
Learning
$4.4 million
TOTAL GROSS PROFIT
$millions
2017
2018
2019
$6.3
$6.7
$7.9
TOTAL OPERATING REVENUE
$millions
2017
2018
2019
$14.3
$17.3
$22.5
TOTAL ANNUALISED RECURRING REVENUE
$millions
$12.0
$10.3
FY17
$10.7
FY18
FY19
5
JANISON ANNUAL REPORT 2019 CEO’s Letter
AT JANISON OUR PURPOSE IS TO TRANSFORM HOW PEOPLE
LEARN. OUR GROWTH IS FUELLED BY FOCUSING ON THE
DIGITISATION OF EDUCATION AND A SHIFT TO PRODUCTISATION.
The global education market continues to grow. By 2025, half a billion more students are
expected to be in schools and universities, and the education spend per student is increasing
year on year.
Digital spend in this industry is currently only 2.6% of the total spend. As this rises amid
increasing broadband and mobile device penetration, the global education technology market
is expected to double to $340billion by 2025.
Our plan over the past two years has been to establish Janison as a trusted guide to the
leading clients in this market thereby capturing our share of this growth and building a solid
foundation for future sustainable recurring revenue and profits.
We are pleased to report that in FY19 Janison grew revenue 30% to exceed $22 million and
increase its penetration of the three key sectors in the expanding education market.
Operating Revenue by Market Sector
Year ending 30 June
Schools (K-12)
Higher Education
Workplace
2019
2018
Change
$9.3m
$6.5m
$3.5m
$2.4m
$9.7m
$8.4m
+44%
+45%
+15%
Total operating revenue
$22.5m
$17.3m
+30%
We have now transformed the business from one which delivered customised software
development projects, to one which predominantly sells out-of-the-box configurable products
that generate higher-value annual recurring revenue streams.
By selling our Assessment platform (Janison Insights) and our Learning platform (Janison
Academy) to all three sectors we have increased Annualised Recurring Revenue (ARR) from
$8.1million in FY16 to $12.0million in FY19.
ANNUALISED RECURRING REVENUE
$M
$10.3M
$10.7M
$8.1M
$12.0M
Total ARR1
JUNE 2016
JUNE 2017
JUNE 2018
JUNE 2019
1 “Total ARR” includes all contracted platform and content revenue, it excludes one-off revenue such as Project
Services and exam management revenue.
12%
ANNUALISED RECURRING
REVENUE GROWTH
SINCE 2018
6
JANISON ANNUAL REPORT 2019 In accordance with our plan to nurture existing clients we retained 97.5% of our customers in FY19 and increased our underlying
Average Revenue per Customer (ARPC) to $247,0001. We also welcomed another 57 customers during the year. This decreased
customer concentration thereby mitigating a risk previously identified in the prospectus.
THE FOUR GROWTH PRIORITIES
1
Nurture
existing clients
2
Build
innovative world
class products
3
Target
high growth
segments
4
Intensify
our sales and
marketing spend
In FY19 we successfully acquired and integrated the Language and Testing Consultants (“LTC”) business with a plan to digitise
its offering using Janison’s proprietary Digital Transformation Roadmap.
We also continued to attract world-class talent to the business and established our leadership team based in the Sydney
head office.
We forged ahead with our international expansion in FY19 by signing an agreement with the OECD to become the exclusive
provider of the PISA-based test for schools internationally. This partnership began in April 2019 with the signing of an
agreement to deliver the digital assessment to schools in Brazil with many more countries expected to follow throughout FY20.
During FY19, revenue originating from international clients represented 20% of total revenue.
To supplement our core business of Assessment in schools and Learning in the workplace, we are focused on these additional
target growth segments in FY20:
1
2
3
Build on the success of Janison’s assessment software (Janison Insights)
in schools and our acquisition of LTC to expand online assessment of skills
and knowledge into the global higher education and workplace sectors.
Use data science and the assessment data collected through Janison Insights to
evaluate education systems, including institutions and teaching practices, and
to answer critical questions to inform the transformation agenda.
Transfer the way teachers, faculty and administrators learn and train in
the schools and higher education sectors to our Learning Experience Platform
(Janison Academy)
The full year EBITDA run rate at June 2019 was $4m and we are now generating sufficient free cash flow to fund our own
organic growth and continue to invest in SaaS based products in our target sectors.
We are excited about the year ahead and thank our valued clients for their trust, our partners for their collaboration, and
our staff, contractors and their extended families for choosing Janison each day. I also thank the leadership team for their
commitment to our vision and the Board for their guidance. Finally, I would like to thank our investors for their support as we
continue on our mission to transform the way people learn.
Tom Richardson
Chief Executive Officer
1 Underlying ARPC refers to the average revenue per client for the Janison Assessment and Learning business, excluding the impact of LTC which was
acquired on 1 April 2019.
7
JANISON ANNUAL REPORT 2019 s
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8
JANISON ANNUAL REPORT 2019
MIKE HILL
Experience and Expertise
Formally a Partner of Ernst & Young, Mike has been involved in working with management
teams and boards across a number of companies and industries for more than 20 years. He
was an Investment Partner with Ironbridge, a private equity investment fund which invested
$1.5bn. Mike has served as Chairman of multiple ASX-listed companies over the past six years.
He is a member of the Institute of Chartered Accountants in Australia.
BRETT CHENOWETH
Experience and Expertise
Brett brings a wealth of major international experience across media, technology,
entertainment, investment and telecommunications. Brett is Chairman of Madman
Entertainment, Chairman of The Advisory Board of HRL Morrison & Co., a Founder of the
Bombora Group, an Independent Board Director at Surfing Australia, Chairman of Canberra
Data Centres (CDC) and Chairman of Creative Enterprises Australia (CEA). Brett has formerly
served as Chief Executive Officer and Managing Director of APN News and Media and has
held senior executive roles at the New York investment firm The Silverfern Group, Telecom
New Zealand, Publishing & Broadcasting Limited, ecorp, ninemsn and Village Roadshow.
DAVID WILLINGTON
Experience and Expertise
David has over 25 years’ experience in corporate finance and investment banking, and during
his career has primarily advised companies in the technology, media and telecommunications
industry. David is the Co-founder of Bombora Investment Management. Previously, David
was a Partner at Deloitte Corporate Finance and prior to that was an investment banker with
NM Rothschild and Citi. David has a Bachelor of Commerce, is a member of the Institute of
Chartered Accountants in Australia and is a Fellow of the Financial Services Institute of Australia.
ALLISON DOORBAR
Experience and Expertise
Allison is Managing Partner at EduWorld, a company that provides market research and strategic
consulting services to the education sector. She has spent most of her career working with education
providers globally helping them to develop and implement their marketing strategies. This includes
working with many of the World’s leading universities, major global providers as well as many government
departments and agencies.
TOM RICHARDSON
Experience and Expertise
Tom has successfully led the growth of Janison for the past 4 years and has over 15 years of experience
in the online learning industry. He was the founder of the Deloitte Leadership Academy and the CEO of
Latitude Learning Academy before joining Janison in 2015. Tom was a Partner at Deloitte for over 10 years
focused specifically on digital disruption, innovation and business growth. He was a consultant for two
years at Bain International and a manager at Arthur Andersen advising Australia’s leading organisations
on performance improvement. Tom also spent two years with investment banks in London working for
Merrill Lynch, Salomon Brothers and Rothchilds. Tom has a Bachelor of Business, a Master of Business
Administration (MBA) from the Australian Graduate School of Management and is a Certified Practicing
Accountant and a member of the Australian institute of Company Directors (AICD).
WAYNE HOULDEN
Experience and Expertise
Wayne founded Janison in 1998. Wayne is seen as a market shaper in the global world of education
technology and has been involved in the development of a number of award winning and innovative
online learning applications including national education portals, online learning management systems,
professional development learning portals and award-winning assessment systems.
Wayne’s focus is now on helping Janison to grow as an international education platform used by many
countries for strategic assessment projects. He is working actively with many of Janison’s international
partners to achieve this goal.
Wayne has a truly global vision for the Business and has strong relationships in the education technology
industry around the world. Previous to Janison, Wayne worked as an IT leader in Citibank and also has
a teaching background in information technology. Wayne has a Bachelor of Science degree from the
University of New South Wales and a Diploma of Teaching from Sydney University of Technology.
JANISON ANNUAL REPORT 2019 9
2019
FINANCIAL REPORT
CONTENTS
11 Directors’ Report
22 Remuneration Report
37 Financial Statements
Statement of Profit or Loss
Statement of Financial Position
Statement of Cash Flows
Statement of Changes in Equity
42 Notes to Financial Statements
68 Directors’ Declaration
69 Auditor’s Independence Declaration
70 Independent Auditor’s Report
76 Additional Information
Directors’
Report
The following commentary should be read in conjunction with the Yearly financial statements and the related notes in this
report. Some sections of this commentary include Non-International Financial Reporting Standards (IFRS) financial measures as
the Company believes they provide useful information for readers to assist in understanding the Group’s financial performance.
Non-IFRS financial measures do not have standardised meaning and should not be viewed in isolation or considered as
substitutes for amounts reported in accordance with Australian Financial Reporting Standards. These measures have not been
independently audited or reviewed.
REVIEW OF OPERATIONS
Year ended 30 June
Recurring revenue
Exam management revenue
Project services
Total operating revenues
Cost of sales
Gross Profit
Gross Profit %
Operating expense
R&D tax incentive credit income
Trading EBITDA
Trading EBITDA %
Non-operating expense
EBITDA
Depreciation and amortisation
Financial (revenue) / expense
Loss before Income Tax
Income tax
Net Loss
39%
(3.5) ppt
2019
($’000s)
2018
($’000s)
11,533
10,616
2,523
8,440
22,496
14,608
7,887
35%
6,975
(1,075)
1,987
9%
1,756
231
963
(100)
(632)
650
-
6,689
17,305
10,625
6,680
4,899
(1,397)
3,177
18%
23,893
(20,716)
324
42
(21,083)
795
(1,283)
(21,878)
Change
9%
NM
26%
30%
37%
18%
42%
(23)%
(37)%
(9.5) ppt
(93)%
(101)%
197%
(336)%
(97)%
(18)%
(94)%
The growth in operating revenues during the year ended 30 June 2019 was driven by a 9% increase in recurring revenue
assisted by the growth in large, existing assessment clients such as UNSW Global and the Department of Education. Operating
revenue was also driven higher in FY19 by a 26% growth in project services revenue as a result of large development projects
for new clients such as Roads and Maritime Services NSW to build its new Driver Knowledge Test, and significant development
work for the Singapore Examinations and Assessment Board (SEAB).
Gross profit was 35% of total revenue for the current period compared to 39% in the prior year reflecting higher hosting costs
during the period and a higher mix of services and implementation revenue versus platform revenue as Janison invested in its
product for greater future recurring revenue.
Trading EBITDA (a non-IFRS measure) decreased 37% when compared to the prior corresponding year reflecting the Group’s
strategy to:
• accelerate the development of new products including Janison Insights for higher education institutions;
• support the implementation phase of a number of new customer contracts to deliver significant recurring platform revenue in
FY20 and beyond; and,
• enhance the executive leadership team and expand sales and marketing.
11
JANISON ANNUAL REPORT 2019 Directors’
Report
The board believes this a worthwhile investment to allow the Group to penetrate its key market sectors, identified previously,
ahead of its competition.
In FY18, non-trading, transaction expenses of $23.3m relating to the Janison Solutions acquisition and capital raising
significantly impacted the net result for that period. As a result, the net loss for the year ended 30 June 2018 was $21.9 million.
PRINCIPAL ACTIVITIES
The Group operates within the education technology sector. Principal activities include software development and the provision
of Software-as-a-Service.
CAPITAL RAISING AND ACQUISITIONS
In October 2018 the Group completed a $5m (before costs) capital raising via a share placement with new and existing
institutional shareholders and sophisticated investors. As a result 12.275m new, fully-paid ordinary shares were issued at $0.40
per share. The proceeds of the capital raise were invested in the Group’s products and to support future growth in the higher
education sector.
In addition, the Group’s current year results include the impact of the 23 April 2018 purchase, from Ascender Learn Pty Ltd,
assets and liabilities related to a bespoke e-learning content generation business unit for $272,000 which now forms part of the
Group’s Learning segment. The revenues generated from this acquisition to-date are project services and relate to the creation
of custom content for any major Australian corporate or financial institution. This acquisition is part of Janison’s strategy to
provide a complete integrated learning solution for Australia’s leading companies.
In March 2019 the Group completed a $6m (before costs) capital raising via a share placement with new and existing
institutional shareholders and sophisticated investors. As a result, approximately 18.2m new, fully-paid ordinary shares were
issued at $0.33 per share. The proceeds of the capital raise were used to assist with the funding of the acquisition of LTC
Holdco Pty Ltd.
On 1 April 2019, the Group acquired 100% of the shares in LTC Holdco Pty Ltd (the parent company of Language and Testing
Consultants Pty Ltd) for a consideration of $4.5m in the form of cash, a working capital adjustment of $484,767, $2.0m paid
in the form of fully-paid ordinary shares in the Group’s shares, a deferred consideration of $1.5m to be paid on the 1 year
anniversary of completion, and an earn-out payment of 5.715 times the FY19 adjusted EBITDA for LTC in excess of $1.65 million–
payable as to 50% in cash and 50% in the Group’s shares. All shares issued as consideration carry a 12 month escrow period
from the date of issue.
LTC is Australia’s largest examination services business and facilitates outsourced, end-to-end exam management services on
behalf of large universities, colleges, and professional certification bodies. The acquisition of LTC represents a significant move
in Janison’s strategic expansion into the assessment market. It provides an opportunity for Janison to transition LTC’s clients
from traditional paper-based examinations to the Janison digital assessment platform – Janison Insights. The current year
results for the Group include the impact of this acquisition for the period from 1 April 2019 to 30 June 2019.
12
JANISON ANNUAL REPORT 2019 EARNINGS BEFORE, INTEREST, TAX, DEPRECIATION AND AMORTISATION (EBITDA)
EBITDA disclosures (which are non-IFRS financial measures) have been included as the Group believe they provide useful
information for readers to assist in understanding the Group’s financial performance. EBITDA is calculated by adding back
depreciation, amortisation, net interest expense and tax expense to net results.
Year ended 30 June
Net Loss
Add back: net interest (revenue) / expense
Add back: depreciation and amortisation
Add back: income tax expense
EBITDA
Percentage of operating revenue
NM stands for not meaningful
2019
($’000s)
2018
($’000s)
(1,283)
(21,878)
Change
(94)%
(338)%
197%
(18)%
42
324
795
(20,717)
(101)%
NM
NM
(100)
963
650
231
1%
Trading EBITDA excluding the impact of non-trading items is also provided as we believe it provides readers with relevant
information to analyse trends in the Group’s financial results.
Year ended 30 June
EBITDA
Add back: transaction costs
Add back: non-cash share-based compensation
Add back: other non-operating costs
Trading EBITDA
Percentage of operating revenue
2019
($’000s)
231
51
1,292
413
1,987
9%
2018
($’000s)
(20,717)
23,312
560
22
3,177
18%
Change
(101)%
(100)%
131%
1822%
(37)%
(9.5) ppt
OPERATING REVENUE
• Licence and hosting revenue consists of recurring revenue for the right to use the Janison platform.
• Content licence revenue consists of recurring revenue for the right to use third-party content distributed via Janison’s learning
platform or customers’ proprietary learning platforms.
• Platform maintenance revenue represents recurring revenue for platform maintenance and support services over a specific
period of time (usually one year).
• Exam management revenue consists of revenue to facilitate and supervise in-person examination events. This is a new
revenue component introduced with the acquisition of LTC in April 2019.
• Project services revenue consists of platform customisation, implementation, configuration, and customer staff
training activities.
13
JANISON ANNUAL REPORT 2019 Directors’
Report
OPERATING REVENUE BY COMPONENT
Year ended 30 June
Licence and hosting revenue
Content revenue
Platform maintenance revenue
Total recurring revenue
Exam management revenue
Project services revenue
Total Operating Revenue
Number of recurring revenue customers during period
Average recurring revenue per customer (thousands)
Number of total customers during period
Average total revenue per customer (thousands)
2019
($’000s)
2018
($’000s)
Change
18%
(28)%
0%
9%
NM
26%
30%
8,853
1,129
1,551
7,481
1,577
1,558
11,533
10,616
2,523
8,440
-
6,689
22,496
17,305
69
$167
81(1)
71
$150
86
$247(1)
$201
(1) Total 2019 customer numbers and revenue per customer figures have been normalised to allow for a consistent comparison
with the prior year. The figures in the table above exclude all revenue and customers from the LTC acquisition.
OPERATING REVENUE BY MARKET SECTOR
Year ended 30 June
Schools (K-12)
Higher Education
Workplace
Total Operating Revenue
2019
($’000s)
2018
($’000s)
9,314
3,517
9,665
6,487
2,425
8,393
22,496
17,305
Change
44%
45%
15%
30%
Revenue reported by Market Sector reflects a significant increase in revenue generated across all market sectors. The growth in
the Higher Education sector was assisted by the acquisition of LTC in April 2019.
OPERATING REVENUE BY GEOGRAPHY
Year ended 30 June
Australia and New Zealand
Asia
Rest of World
Total Operating Revenue
2019
($’000s)
2018
($’000s)
18,014
13,348
3,154
1,328
2,484
1,473
22,496
17,305
Change
35%
27%
(10)%
30%
International revenue as percentage of total
20%
23%
(2.9) ppt
ppt stands for percentage point
International revenue as a percentage of total revenue decreased from 23% in the prior year to 20% for the year ended 30 June
14
JANISON ANNUAL REPORT 2019 2019, largely due to the acquisition of LTC with a dominant Australian and New Zealand client base. The Group’s strategy to
expand into international markets has taken a large step forward with the partnership agreement (signed April 2019) between
Janison and the Organisation for Economic Co-operation and Development (OECD) to provide its PISA-based test for schools
(PBTS) to schools globally.
GROSS PROFIT
Gross Profit represents operating revenue minus Cost of sales. Cost of sales consists of personnel expenses directly associated
with the supply of Janison’s platforms and services to clients, including customer support. Cost of sales also includes hosting
and third-party content licensing fees. Cost of sales excludes depreciation, amortisation and overheads which are reported as
operating expenses on the Statement of Profit or Loss.
Year ended 30 June
Total operating revenue
Cost of sales
Gross profit
Percentage of operating revenue
EMPLOYEES
Year ended 30 June
Total full-time equivalent (FTE) employees
2019
($’000s)
2018
($’000s)
22,496
14,608
7,887
35%
17,305
10,625
6,680
Change
30%
37%
18%
39%
(3.5) ppt
2019
131
2018
85
Change
54%
The number of FTE employees increased at 30 June 2019 primarily as a result of the April 2019 acquisition of LTC, an exam
management business (with 9 permanent staff and a casual base of up to 500 - an average of 32 FTE casuals was calculated and
included in the 2019 FTE count above). The Group utilises a mix of employees and contractors to meet its service obligations to
customers. The data above does not include contractors or non-executive directors.
CASH FLOWS
Summarised cash flow data accumulated on the same basis as the Statement of Cash Flows is presented below.
Year ended 30 June
Receipts from customers
Payments to suppliers and employees
Income taxes refunded
Other (Interest (paid) / received, and grant income)
Total cash flows from operating activities
Investing activities
Effect of exchange rate changes
Financing activities
Net change in cash
Closing cash at end of year
2019
($’000s)
2018
($’000s)
21,647
16,561
(21,781)
(16,245)
238
167
270
468
58
842
(8,269)
(4,029)
(41)
10,445
2,406
6,025
-
5,448
2,261
3,619
Change
31%
34%
(54)%
188%
(68)%
105%
NM
92%
6%
66%
15
JANISON ANNUAL REPORT 2019 Directors’
Report
Cash flows used in investing activities totaled $8.3 million for the year ended 30 June 2019, including $5.0 million of net cash
outflows to complete the purchase of LTC. Investing activities also related to software design and development costs which
increased to $3.2 million from $1.6 million in the prior year as a result of the Group’s investment in product development.
Cash provided by financing activities during the year ended 30 June 2019 was approximately $10.5 million reflecting the net
proceeds from two capital raising transactions completed in October 2018 and March 2019.
SEGMENT INFORMATION
Operating revenues are recorded to a segment depending on the platform and products sold. Cost of sales includes the same
components as the consolidated financial statements (personnel costs, hosting expenses and third-party content licences).
Costs that can be directly attributed to a segment are recorded to that segment. Cost of sales and expenses that cannot be
directly attributed to a segment are allocated on the basis of either revenue, labour or hosting costs.
ASSESSMENT
Year ended 30 June
Licence and hosting revenue
Platform maintenance revenue
Total recurring revenue
Exam management revenue
Project services revenue
Total segment revenue
Cost of sales
Segment gross profit
Gross profit percentage of assessment segment revenue
Operating expense
Segment trading EBITDA
EBITDA percentage of assessment segment revenue
2019
($’000s)
2018
($’000s)
Change
4,678
1,122
5,800
2,523
5,660
13,983
10,504
3,479
25%
4,148
(669)
(5)%
3,318
1,185
4,503
-
5,200
9,703
7,437
2,266
23%
2,468
(202)
(2)%
41%
(5)%
29%
NM
9%
44%
41%
54%
1.5 ppt
68%
232%
(2.7) ppt
1
$80
0
$176
Number of Assessment recurring revenue customers during period
Average Assessment recurring revenue per customer (thousands)
Number of total customers during period
Average total revenue per customer (thousands)
10
9
$580
$500
10
10
$1,146
$970
The number of customers and revenue per customer figures in the table above all exclude the acquisition of LTC customers and revenue.
Assessment
The significant increase in platform revenue reflects the progression of clients such as UNSW and RMS from the build and
configuration stage of these contracts to the operational licensing phase during the year ended 30 June 2019.
Gross Profit for the year ended 30 June 2019 was $3.5million, while Trading EBITDA was negative $669 thousand. Both metrics
are in-line with management expectations given the assessment product, Insights, is still in the early stages of its commercial
life cycle.
16
JANISON ANNUAL REPORT 2019 LEARNING
Year ended 30 June
Licence and hosting revenue
Content licence revenue
Platform maintenance revenue
Total recurring revenue
Project services revenue
Total segment revenue
Cost of sales
Segment gross profit
Gross profit percentage of learning segment revenue
Operating expense
Segment trading EBITDA
EBITDA percentage of learning segment revenue
Number of Learning recurring customers during period
Average Learning recurring revenue per customer (thousands)
Number of total customers during period
2019
($'000s)
2018
($'000s)
4,175
1,129
429
5,733
2,780
8,513
4,105
4,409
52%
1,752
2,657
31%
59
$97
71
4,163
1,577
373
6,113
1,489
7,602
3,189
4,413
58%
1,034
3,379
62
$99
76
Change
-
(28)%
15%
(6)%
87%
12%
29%
(0)%
(6.3) ppt
69%
(21)%
(3)
$(1)
(5)
$20
44%
(13.2) ppt
Average total revenue per customer (thousands)
$120
$100
Learning
Segment revenue for the year ended 30 June 2019 grew by 12% overall reflecting an 87% increase in project service revenues
mainly driven by an increase in content development revenue and a decrease of 6% in recurring revenue.
Gross Margin as a percentage of operating revenue was 52% and Trading EBITDA as a percentage of operating revenue was
31% for the year ended 30 June 2019.
DIVIDENDS
No dividend has been declared for the financial year ended 30 June 2019 (2018: $1.0 million paid to former shareholders of
Janison Solutions Pty Ltd).
17
JANISON ANNUAL REPORT 2019 Directors’
Report
DIRECTORS
The following persons were Directors of the Group during or
since the end of the financial year:
Name
Mr Mike Hill
Mr Brett Chenoweth
Mr David Willington
Mr Tom Richardson
Mr Wayne Houlden
Ms Allison Doorbar
Particulars
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Executive Director and CEO
Executive Director
Non Executive Director
INFORMATION ON THE DIRECTORS
Mike Hill
Experience and Expertise
Formally a Partner of Ernst & Young, Mike has been involved
in working with management teams and boards across a
number of companies and industries for more than 20 years.
He was an Investment Partner with Ironbridge, a private
equity investment fund which invested $1.5bn. Mike has
served as Chairman of multiple ASX-listed companies over the
past six years. He is a member of the Institute of Chartered
Accountants in Australia.
Other Current Directorships
AHAlife Holdings Limited (ASX:AHL) (Non-executive
Chairman)
Acrow Formwork and Construction Limited (ASX:ACF)
(Non-Executive Director)
Pacific Knowledge Systems Limited (ASX:PKS)
(Non-executive Chairman)
Former Directorships in the Last Three Years
Rhipe Limited (ASX:RHP) (Non-executive Chairman, resigned
26 March 2019)
LiveTiles Limited (ASX:LVT) (Non-Executive Director, resigned
on 5 September 2017)
JustKapital Limited (ASX:JKL) (Non-Executive Director,
resigned on 27 November 2017)
Prime Media Group Limited (Non-Executive Director, resigned
on 22 August 2016)
Special Responsibilities
Chairperson
Chairperson Audit and Risk Committee
Member Remuneration and Nominations Committee
18
Interests in Shares and Options
• 1,306,475 fully paid ordinary shares (590,737 escrowed),
• 600,000 loan-funded shares funded by way of a 5-year
limited recourse, non-interest bearing loan from the
Company. The vesting subject to continuous employment
and when the 5-day VWAP of the Company’s shares
exceeds $0.60 for more than 30 days.
• 500,000 performance rights to receive one fully paid share.
Rights vested in August 2019 but are yet to be converted to
ordinary shares as at the date of this report.
• 105,000 unlisted and unvested options exercisable at
$0.3333 per option, expires on 8 October 2019.
Brett Chenoweth
Experience and Expertise
Brett brings a wealth of major international experience
across media, technology, entertainment, investment
and telecommunications. Brett is Chairman of Madman
Entertainment, Chairman of The Advisory Board of HRL
Morrison & Co., a Founder of the Bombora Group, an
Independent Board Director at Surfing Australia, Chairman
of Canberra Data Centres (CDC) and Chairman of Creative
Enterprises Australia (CEA). Brett has formerly served as Chief
Executive Officer and Managing Director of APN News and
Media and has held senior executive roles at the New York
investment firm The Silverfern Group, Telecom New Zealand,
Publishing & Broadcasting Limited, ecorp, ninemsn and
Village Roadshow.
Other Current Directorships
None
Former Directorships in the Last Three Years
Acrow Formwork and Construction Limited (ASX:ACF) (Non-
Executive Director, resigned 27 March 2018)
Special Responsibilities
Chairperson Remuneration and Nominations Committee
Interests in Shares and Options
• 984,875 fully paid ordinary shares (467,437 escrowed),
• 600,000 loan-funded shares funded by way of a 5-year
limited recourse, non-interest bearing loan from the
Company. The vesting subject to continuous employment
and when the 5-day VWAP of the Company’s shares
exceeds $0.60 for more than 30 days.
• 500,000 performance rights to receive one fully paid share.
Rights vested in August 2019 but are yet to be converted to
ordinary shares as at the date of this report.
• 105,000 unlisted and unvested options exercisable at
JANISON ANNUAL REPORT 2019 0.3333 per option, expires 8 October 2019.
None.
David Willington
Experience and Expertise
David has over 25 years’ experience in corporate finance
and investment banking, and during his career has
primarily advised companies in the technology, media and
telecommunications industry.
David is the Co-founder of Bombora Investment Management.
Previously, David was a Partner at Deloitte Corporate
Finance and prior to that was an investment banker with NM
Rothschild and Citi.
David has a Bachelor of Commerce, is a member of the
Institute of Chartered Accountants in Australia and is a Fellow
of the Financial Services Institute of Australia.
Other Current Directorships
Vamp Pty Limited (Chairman)
Former Directorships in the Last Three Years
None
Special Responsibilities
Member Audit & Risk Committee
Interests in Shares and Options
• 316,667 fully paid ordinary shares,
• 600,000 loan-funded shares funded by way of a 5-year
limited recourse, non-interest bearing loan from the
Company. The vesting subject to continuous employment
and when the 5-day VWAP of the Company’s shares
exceeds $0.60 for more than 30 days.
• 500,000 performance rights to receive one fully paid share.
Rights vested in August 2019 but are yet to be converted to
ordinary shares as at the date of this report.
Allison Doorbar
Experience and Expertise
Allison is Managing Partner at EduWorld, a company
that provides market research and strategic consulting
services to the education sector. She has spent most of
her career working with education providers globally
helping them to develop and implement their marketing
strategies. This includes working with many of the World’s
leading universities, major global providers as well as many
government departments and agencies.
Other Current Directorships
EduWorld Pty Ltd (Executive Director)
23A Pty Ltd (Executive Director)
Former Directorships in the Last Three Years
Special Responsibilities
Member Remuneration and Nominations Committee
Interests in Shares and Options
• 600,000 loan-funded shares funded by way of a 5-year
limited recourse, non-interest bearing loan from the
Company. The vesting subject to continuous employment
and when the 5-day VWAP of the Company’s shares
exceeds $0.60 for more than 30 days.
• 500,000 performance rights to receive one fully paid share.
Rights vested in August 2019 but are yet to be converted to
ordinary shares as at the date of this report.
Tom Richardson
Experience and Expertise
Tom has successfully led the growth of Janison for the past
3 years and has over 15 years of experience in the online
learning industry.
He was the founder of the Deloitte Leadership Academy
and the CEO of Latitude Learning Academy before joining
Janison in 2015. Tom was a Partner at Deloitte for over 10
years focused specifically on digital disruption, innovation and
business growth.
He was a consultant for 5 years at Bain International and a
manager at Arthur Andersen advising Australia’s leading
organisations on performance improvement. Tom also spent
two years with Investment Banks in London working for Merrill
Lynch, Salomon Brothers and Rothschilds.
Tom has a Bachelor of Business, a Master of Business
Administration (MBA) from the Australian Graduate School of
Management, is a Certified Practicing Accountant and a member
of the Australian Institute of Company Directors (AICD).
Other Current Directorships
LTC Language and Testing Consultants Pty Ltd (Executive
Director since 1 April 2019).
Former Directorships in the Last Three Years
None.
Special Responsibilities
CEO and Managing Director
Interests in Shares and Options
• 15,599,251 fully paid ordinary shares (7,799,625 escrowed)
• 2,400,000 loan-funded shares funded by way of a 5-year
limited recourse, non-interest bearing loan from the
Company. The vesting subject to continuous employment
and when the 5-day VWAP of the Company’s shares
exceeds $0.60 for more than 30 days.
19
JANISON ANNUAL REPORT 2019 Directors’
Report
• 2,000,000 performance rights to receive one fully paid
share. Rights vested in August 2019 but are yet to be
converted to ordinary shares as at the date of this report.
Remuneration and Nominations Committee.
Interests in Shares and Options
Wayne Houlden
Experience and Expertise
Wayne founded Janison in 1998. Wayne is seen as a market
shaper in the global world of education technology and has
been involved in the development of a number of award
winning and innovative online learning applications including
national education portals, online learning management
systems, professional development learning portals and
award winning assessment systems.
Wayne’s focus is now on helping Janison to grow as an
international education platform used by many countries for
strategic assessment projects. He is working actively with
many of Janison’s international partners to achieve this goal.
Wayne has a truly global vision for the Business and has strong
relationships in the education technology industry around the
world. Previous to Janison, Wayne worked as an IT leader in
Citibank and also has a teaching background in information
technology. Wayne has a Bachelor of Science Degree from
University of New South Wales and a Diploma of Teaching
from Sydney University of Technology.
Other Current Directorships
None.
Former Directorships in the Last Three Years
None.
Special Responsibilities
Member of the Audit and Risk Committee and the
Directors’ meetings
• 66,067,416 fully paid ordinary shares (33,033,708 escrowed)
• 1,200,000 loan-funded shares funded by way of a 5-year
limited recourse, non-interest bearing loan from the
Company. The vesting subject to continuous employment
and when the 5-day VWAP of the Company’s shares
exceeds $0.60 for more than 30 days.
• 1,000,000 performance rights to receive one fully paid
share. Rights vested in August 2019 but are yet to be
converted to ordinary shares as at the date of this report.
Company Secretary
Andrew Whitten holds the position of Company Secretary.
Experience and Expertise
Andrew is an admitted solicitor and an Executive Director of
Automic Group of Companies, Australia’s only professional
service provider that delivers a complete and integrated
ecosystem of Registry, Company Secretarial, Legal, CFO and
Accounting services.
Andrew is currently the company secretary for a number of
publicly listed companies. He has been involved in numerous
corporate and investment transactions including IPOs on the
ASX and NSX, corporate reconstructions, reverse mergers and
takeovers for two decades.
Andrew holds a Bachelor of Arts (Economics, UNSW);
Master of Law and Legal Practice (Corporate Finance and
Securities Law, UTS); Graduate Diploma in Applied Corporate
Governance from the Governance Institute and is an elected
Associate of that institute.
The following table sets out the number of Directors Meetings held during the financial year and the number of meetings
attended by each Director (while they were in office):
Full Directors Meetings
Audit/Risk
Remuneration &
Nominations
Name of Directors
Held
Attended
Held
Attended
Held
Attended
Michael Hill, Chairman
Brett Chenoweth
David Willington
Tom Richardson
Wayne Houlden
Allison Doorbar
8
8
8
8
8
8
8
8
8
8
8
8
2
–
2
–
2
–
2
–
2
–
2
–
1
1
–
–
1
–
1
1
–
–
1
–
All other business was conducted via circular resolution.
20
JANISON ANNUAL REPORT 2019 Equity Instruments
As at the date of signing this report, there were 13,440,840 unissued ordinary shares in the following equity instruments which
are exercisable as follows:
Date of Grant
Security
8-Oct-14
Options
15-Dec-17
Advisor Options & Rights
15-Dec-17
Employee Options
21-Dec-17
Loan Funded Shares
21-Dec-17
Performance Rights
14-Nov-18
Loan Funded Shares
14-Nov-18
Performance Rights
3-Dec-18
Loan Funded Shares
3-Dec-18
Performance Rights
19-Dec-18
Loan Funded Shares
19-Dec-18
Performance Rights
TOTAL
Number
Date of
Expiry
Conversion
Price $
607,500
8-Oct-19
240,000
15-Dec-20
843,340
21-Dec-19
5,400,000
14-Dec-22
4,500,000
15-Dec-19
600,000
14-Nov-23
500,000
11-Mar-21
150,000
3-Dec-23
150,000
11-Mar-21
300,000
19-Dec-23
150,000
11-Mar-21
13,440,840
$0.33
$0.30
nil
$0.30
nil
$0.45
nil
$0.45
nil
$0.45
nil
Insurance of Directors and Officers
Proceedings on behalf of the Company
During the financial year the Group paid insurance premiums
in respect of directors and officers liability insurance so as to
insure the Directors of the Group, the Company Secretary,
and all executive officers of the Group and of any related
body corporate against a liability incurred as such as Director,
secretary or executive officer to the extent permitted by the
Corporation Act 2001. The amount paid during the year was
$71 thousand (2018: $50 thousand).
Auditor Independence
The auditor’s independence declaration as required under
section 307C of the Corporations Act 2001 is set out on page
69 of this annual report.
Non-audit services
Stantons International Audit and Consulting Pty Ltd (Stantons
International) are the appointed auditors of the Group. The
auditor has not been indemnified under any circumstance.
There were no non-audit services provided in the 2019
financial year (2018: $29,143).
No person has applied to the Court under section 237 of the
Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings
to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or part of
those proceedings.
Rounding of Amounts
The Company is an entity to which ASIC Legislative instrument
2016/191 applies, and accordingly amounts in the financial
statements and directors’ report have been rounded to the
nearest thousand dollars.
Corporate Governance Statement
The Directors of the Company support and adhere to
the principles of corporate governance, recognising the
need for the highest standard of corporate behaviour and
accountability to the corporate governance statement dated
15 August 2019 released to the ASX and posted on the
Company’s website: www.janison.com/investors.
The directors are satisfied that the provision of non-
audit services is compatible with the general standard of
independence for auditors imposed by the Corporations Act
2001. The nature and scope of each type of non-audit service
provided means that auditor independence has not
been compromised.
Mike Hill
Chairman
21
JANISON ANNUAL REPORT 2019 Remuneration
Report
1
Scope of the Remuneration Report and
Individuals Classed as KMP
The Remuneration Report sets out the prescribed key
management personnel (KMP) remuneration information and
details of Janison Education Group Limited in accordance
with section 300A of the Corporations Act 2001 (the Act)
and associated regulations, including policies, procedures,
governance, and factual practices as required.
In accordance with the Act, this report covers the
Remuneration of KMP legally appointed in the Company (the
listed entity).
Janison Education Group Limited (the “Group” or the
“Company”) has decided to set out such further information
as shareholders may require for them to obtain an accurate
and complete understanding of the Company’s approach to
the remuneration of Key Management Personnel (KMP).
KMP are the non-executive directors, the executive directors
and employees who have authority and responsibility for
planning, directing and controlling the activities of the
consolidated entity. On that basis, the following roles/
individuals are addressed in this report:
Non-executive Directors (NEDs) of Janison Education as
at the end of FY 2019
• Mr Michael Hill, independent non-executive director since
(7 July 2014)
– Chairman of the Board since (26 November 2014)
– Chairman of the Audit Committee since (15 December 2017),
– Member of the Remuneration Committee since (15
December 2017),
– Member of the Risk Committee since (15 December 2017),
– Member of the Nomination Committee since (15
December 2017),
– Member of the (Remuneration and Nominations
Committee) since (24 July 2018),
Senior Executives of Janison Education Classified as KMP
During the Reporting Period
• Mr Tom Richardson, Chief Executive Officer & Managing
Director (CEO) since 1 July 2015,
• Mr Wayne Houlden, Executive Director since 25 January 2000,
• Ms Diane Fuscaldo, Chief Financial Officer (CFO) since 15
December 2017, resigned 12 April 2019,
• Mr Stuart Halls, Chief Financial Officer (CFO) since 3
December 2018.
2
Context of Remuneration for FY19
2.1 Relevant Context for Remuneration
Governance during FY19
The KMP remuneration structures that appear in this report
are required to reflect the arrangements applicable to
Financial Year 2019, however, where appropriate, comments
regarding future considerations or changes are made to
provide additional context that may be helpful to shareholders
in understanding remuneration governance and practices
applicable to key management personnel remuneration within
Janison Education.
The following outlines important context for the decisions that
were made in relation to remuneration for/during Financial
Year 2019, the outcomes of which are presented in this report.
• As at the 30 June 2019, being the end of the reporting
period, the market capitalisation was $48.1m, an 18%
increase on the previous year, indicating the market is
recognising the value of the Company business model, and
the ability of the KMP to deliver the strategy,
• The Company is focused on delivering the prospectus
commitments to increase value for all shareholders and
implementing the strategy as communicated including:
• Mr Brett Chenoweth, independent non-executive director
since (7 July 2014),
– Investments in sales, marketing and business
development resources to drive growth,
– Member of the Remuneration Committee since (15
December 2017),
– Member of the Nomination Committee since (15
December 2017),
• Mr David Willington, independent non-executive director
since (15 September 2017),
– Member of the Audit Committee since (15 December 2017),
– Member of the Risk Committee since (15 December 2017),
• Ms Allison Doorbar, independent non-executive director
since (20 June 2018),
– Delivering on existing high-profile customer projects
critical to the Group’s reputation and growth strategy,
– Implementation of the Group’s product roadmap via
investments in developing new features and projects that
can be marketed to new and existing customers,
– Establishing a meaningful presence internationally
with the goal to increase the proportion of the Group’s
revenues coming from international customers,
– Targeted acquisitions to acquire complementary
businesses with a focus on securing new clients.
22
JANISON ANNUAL REPORT 2019 3 Overview of Remuneration Governance
Framework & Strategy
3.1 Transparency and Engagement
The Company seeks input regarding the governance of KMP
remuneration from a wide range of sources, including:
• Shareholders and other stakeholders,
• Remuneration Committee Members,
• External remuneration consultants (ERCs),
• Other experts and professionals such as tax advisors and
lawyers, and
3.3 Executive Remuneration Policy
The Company’s executive remuneration policy may be
summarised as follows:
• Remuneration for senior executives should be composed of:
– Base Package (inclusive of superannuation, allowances,
benefits and any applicable fringe benefits tax (FBT)),
– Variable remuneration, the purpose of which is to create a
strong link between performance and reward,
• Which is partly at-risk; an opportunity for the Company to
pay less than the planned remuneration when performance
expectations have not been met,
• Company management to understand roles and issues
• Which is partly an incentive to reward executives for
facing the Company.
meeting or exceeding expectations,
The following outlines a summary of the Company’s
Remuneration Framework. Shareholders can access a number
of the related documents by visiting the investor portal on the
Company website www.janison.com/investors/.
• Which considers outcomes of the short term, via the Short
Term Incentive (STI) or Bonus opportunity which provides a
reward for performance against annual objectives, and
3.2 Remuneration Committee Charter
The Remuneration Committee Charter (the Charter)
governs the operation of the Remuneration Committee
(the Committee). It sets out the Committee’s role and
responsibilities, composition, structure and membership
requirements. The purpose of the Committee is to assist the
board by:
• Establishing appropriate processes regarding the review of
the performance of directors, committees and the Board,
and implementing them,
• Reviewing and making recommendations to the Board in
relation to the remuneration packages of Senior Executives
and non-executive directors, equity-based incentive plans
and other employee benefit programs,
• Developing policies, procedures and practices that will
allow the Company to attract, retain and motivate high
calibre executives, and
• Ensuring a framework for a clear relationship between key
executive performance and remuneration.
The Committee has the authority to obtain outside legal or
other professional advice or assistance on any matters within
its terms of reference.
The Company recognises the importance of ensuring that
any recommendations given to the Committee provided
by remuneration consultants are provided independently
of those to whom the recommendations relate. Further
information about the parameters under which external
remuneration consultants are engaged is provided below.
• Which considers long-term outcomes, via the Long Term
Incentive (LTI) which provides an equity-based reward for
performance against indicators of shareholder benefit or
value creation, over a multi-year period,
– In total the sum of the elements will constitute a total
remuneration package (TRP).
• Both internal relativities and external market factors should
be considered,
• Total remuneration packages (TRPs, which include Base
Package and incentives) should be structured with reference
to market practices, the practices of competitors for talent,
and the circumstances of the Company at the time.
Changes to fixed remuneration resulting from annual reviews
should generally be determined in relation to:
• external benchmarking, and/or market movements,
• whether current remuneration for the incumbent is above
or below the policy midpoint/benchmark – those below the
midpoint will tend to receive higher increases,
• the competence of the incumbent in fulfilling their role
which determines their positioning within the policy range
– higher calibre incumbents are intended to be positioned
higher in the range, and
• any changes to internal relativities related to role/
organisation design that have occurred since the previous
review.
3.4 Short Term Incentive/Bonus Policy
The short term incentive policy of the Company is that an
annual component of executive remuneration should be:
23
JANISON ANNUAL REPORT 2019 Remuneration
Report
• at-risk, which allows the Company to vary the cost of
– Committee fees,
employing executives, to align with individual and Company
performance, which incentivise our performance targets,
• paid in cash and deferral do not apply since there is a
separate component of remuneration (the LTI) which is
intended to address long term outcomes, and which is
weighted sufficiently to ensure that the risk of short-termism
is appropriately managed, and
• Short-term awards are linked to the main drivers of value
creation at the group, business unit or individual level, as may be
appropriate to the role and subject to Board discretion.
Non-executive directors are excluded from participation.
A termination of employment will trigger a forfeiture of
some or all unearned STI entitlements depending upon the
circumstances of the termination. The Board retains discretion
to trigger or accelerate payment or vesting of incentives
provided the limitation on termination benefits as outlined in
the Corporations Act are not breached.
3.5 Long Term Incentive Policy
The Board has designed the long-term incentive policy of the
Company such that executive remuneration is:
• at-risk, producing down-side remuneration outcomes for
executives when expectations are not met,
• linked to equity in the Company to ensure that the interests
of executives are aligned with those of shareholders,
• appropriately configured to offset the risk of short-termism
that can arise due to short term incentives, and
• targeted around expectations but inclusive of opportunities to
earn additional remuneration when expectations are exceeded.
• The LTI is based on Performance Rights or Options (which
may include share purchase loan plan arrangements – LFSP),
• A termination of employment will trigger a forfeiture of
some or all of the long-term incentives held by an executive
in respect of which performance conditions and hurdles
have not yet been met, depending upon the circumstances
of the termination. The Board retains discretion to trigger
or accelerate payment or vesting of incentives provided
the limitation on termination benefits as outlined in the
Corporations Act are not breached.
3.6 Non-executive Director Remuneration Policy
The Non-executive Director remuneration policy applies
to non-executive directors (NEDs) of the Company in their
capacity as directors and as members of committees, and may
be summarised as follows:
• Remuneration may be composed of:
– Superannuation,
– Other benefits, and
– Equity (if appropriate at the time, such as in the lead-up
to the RTO).
• Remuneration will be managed within the aggregate fee
limit (AFL) or fee pool approved by shareholders of the
Company as part of the listing, of $500,000 (excluding the
salaries of executive Directors),
• The Board may seek adjustment to the AFL in the case of
the appointment of additional NEDs, or should the AFL
become insufficient to attract or retain the appropriate
calibre of NEDs,
• Remuneration should be reviewed annually,
• Committee fees may be used to recognise additional
contributions to the work of the Board by members of
committees in circumstances that the workload of the Board
is not equally shared,
• The Board Chair fee will be set as a multiple of the fees
payable to other NEDs, in recognition of the additional
workload associated with this role.
3.7 Securities Trading Policy
The Company’s Securities Trading Policy applies to Directors
and executives classified as KMP (including their relatives
and associates), those employees working closely with KMP,
employees nominated by the Board, or any other employee
holding inside information. It sets out the guidelines for
dealing in any type of Company Securities by persons
covered by the policy, and the requirement for the Company
to be notified within 2 business days of any dealing. It also
summarises the law relating to insider trading which applies to
everyone at all times. Under the current policy, those covered
by the policy may not trade during a “blackout period” or
when they hold inside information (subject to exceptional
circumstances arrangements, see the policy on the Company
website). The following periods in a year are “blackout
periods” as defined in the policy:
• 2 weeks prior to the release of the Company’s quarterly
results or half year results,
• From the financial year balance date until 24 hours following
the release of the Company’s preliminary full year results
(Appendix 4E) as long as such results are audited,
• Within 24 hours of release of price sensitive information to the
market, and another date as declared by the Board (“ad-hoc”).
– Board fees,
24
JANISON ANNUAL REPORT 2019 3.8 Variable Executive Remuneration – The Short Term Incentive Bonus Plan of Janison Education Group
Short Term Incentive Plan (STIP)
Aspect
Purpose
Plan, Offers and Comments
The short term incentive bonus plan’s purpose is to give effect to an element of
remuneration that is partly at-risk and partly an incentive. This element of remuneration
reinforces a performance focused culture, encourages teamwork and co-operation among
executive team members and maintains a stable executive team by helping retain key
talent. These objectives aim to be achieved by a simple plan that rewards participants for
their performance during a 12 month period.
Measurement Period
The Company’s financial year (12 months).
Award Opportunities
Performance Assessment
Award/Payment
The CEO was offered an opportunity of up to $150,000 or approximately 43% of Base
Package. Other Senior Executives who are KMP were offered an opportunity of between
20% and 30% of their Base Package.
Around the beginning of each year the Board sets the conditions that will be assessed
under the executive STI, in consultation with the CEO. Performance assessments relate
to the business plans, budgets and strategic priorities identified in respect of a given
year. The awards are driven by financial outcomes, and take into account individual
contributions.
For FY19 short-term incentive awards were based on a number of measures including
EBITDA, revenue growth and engagement. The outcome for these measures has yet to be
agreed as at the date of this report.
Assessments and award determinations are performed following the end of the
Measurement Period and the auditing of Company accounts. Awards will generally be
paid in cash within a reasonable period of time following the end of the Measurement
Period. They are to be paid through payroll with PAYG tax and superannuation remitted as
appropriate.
Short-term incentive deferral into equity does not apply to the STI plan since the LTI is of a
sufficiently high weighting and structured to mitigate short-termism.
Cessation of Employment During
a Measurement Period
In the event of a termination of employment, the following applies to STI opportunities for
the financial year:
• If the Participant is not employed on the date of payment, all award opportunities are
forfeited unless otherwise determined by the Board,
• If the termination due to dismissal for cause, all award opportunities are forfeited unless
otherwise determined by the Board,
• If the termination is due to resignation, all entitlements in relation to the Measurement
Period are forfeited, unless the termination is classified as “good leaver” in the discretion
of the Board,
• In the case of a good leaver, the Board may make an award at the time of the termination
(which would be classified as a termination payment), or assess outcomes at the normal
time, following the termination.
In the event of a Change of Control including a takeover the Board has discretion regarding
the treatment of short term incentive bonus opportunities, having regard to the portion of
the Measurement Period elapsed, and pro-rata performance to the date of the assessment.
If the Board forms the view that a Participant has committed fraud, defalcation or gross
misconduct in relation to the Company then all entitlements in relation to the Measurement
Period will be forfeited by that participant.
25
Change of Control
Fraud, Gross Misconduct etc.
JANISON ANNUAL REPORT 2019
Remuneration
Report
3.9 Variable Executive Remuneration – Long Term Incentive Plan (LTIP)
Long Term Incentive Plan (LTIP) Performance Rights, Options and Loan Funded Share Plan (LFSP)
Aspect
Purpose
Plan, Offers and Comments
The long term incentive plan’s primary purpose is to give effect to an element of
remuneration that is partly at-risk and partly an incentive. This element of remuneration
reinforces a performance focused culture, encourages teamwork and co-operation among
key executives and directors, and maintains a stable leadership team by helping retain
key talent. These objectives aim to be achieved by a series of equity-based remuneration
opportunities that reward participants for their performance during a multi-year period.
Other purposes of the LTI program include:
• to assist key management personnel and others selected by the Board to become
Shareholders,
• to provide a component of remuneration to enable the Company to compete effectively
for the calibre of talent required for it to be successful and to help retain employees,
thereby minimising turnover and stabilising the workforce, and
• facilitating variable remuneration cost outcomes so that in periods of poor performance
the cost is lesser (applies to non-market measures under AASB2).
Currently the Company operates Performance Rights, Options and Loan Funded Shares
Plans for the purposes of the LTIP.
Form of Equity
The current plan includes the ability to grant the following to Eligible Employees which
includes Directors, employees and service providers or advisors as nominated by the Board:
• Performance Rights, which are subject to performance related vesting conditions, and
which may be settled upon exercise by new issues or on market purchase of ordinary fully
paid Shares,
• Share Purchase Loans, whereby the Company provides a limited-recourse, interest free
loan to Participants to acquire fully paid ordinary shares, with an associated obligation
to repay the lesser of the loan amount and the value of the Shares at the end of the term
of the loan. This functions effectively the same as an Option, however participants hold
Shares at an earlier stage, and
• Options which are subject to an exercise price, creating an incentive to increase Share
price and grow shareholder value. The Options may be settled as “Cashless Exercise” in
which case on exercise of the Options the Company will only allot and issue or transfer
that number of Plan Shares to the Participant that are equal in value to the difference
between the Exercise Price otherwise payable in relation to the Options and the then
market value of the Plan Shares as at the time of the exercise. Options may also be
subject to performance related vesting conditions.
No dividends accrue to unvested Rights or Options, and no voting rights are attached,
however dividends do accrue to LFSP Shares (along with voting entitlements) which must
be put towards repayment of the Loan if any amount is outstanding.
The target or expected value of grants of equity is included in assessments of
remuneration benchmarking and policy positioning. No amount is payable by participants
for grants of Performance Rights or Options.
An Acquisition Price will apply in respect of grants of LFSP Shares (with an accompanying
loan) and may also apply to grants of Share Awards, which may or may not have Vesting
Conditions. Any loan must be repaid prior to the end of the Loan Term, up to the Market
Value of the Loan Funded Shares (limited-recourse).
Amount Payable for Grants
26
JANISON ANNUAL REPORT 2019 Long Term Incentive Plan (LTIP) Performance Rights, Options and Loan Funded Share Plan (LFSP)
Aspect
Plan Limit
Grant Values
Exercise of Grants
Plan, Offers and Comments
Unless prior Shareholder Approval is obtained, the number of Awards which may be
granted under this Plan (assuming all Options and Performance Rights were exercised)
must not at any time exceed in aggregate 10% of the total Issued Capital of the Company
at the date of any proposed new Awards.
The Board retains discretion to determine the value of LTI to be offered each year, subject to
shareholder approval in relation to Directors, when the Rights are to be settled in the form
of a new issue of Company shares. The Board may also seek shareholder approval for grants
to Directors in other circumstances, at its discretion. The Board determines the amount to be
offered to each Participant with consideration of market competitive remuneration packages,
and the quantum and mix of other remuneration elements intended to be available to the
Participant.
FY19 Invitations
In July 2018, Allison Doorbar was invited to participate in a grant of LTI as follows:
• a grant of 600,000 Loan Funded Shares with a performance hurdle of 5-day VWAP to
exceed 90 cents for more than 30 consecutive days.
• a grant of 500,000 subject to a vesting condition as described below.
In December 2018, the Chief Financial Officer was invited to participate in a grant LTI as
follows:
• a grant of 150,000 Loan Funded Shares with a performance hurdle of 5-day VWAP to
exceed 90 cents for more than 30 consecutive days.
• a grant of 150,000 Performance Rights, subject to a vesting condition as described
below.
The Board has discretion to set the terms and conditions of offers each year.
Comments
The performance hurdles were selected because they were linked to delivery of the
prospectus (Performance Rights) and wealth creation for shareholders, which were the long
term objectives that the Board views as most critical for the KMP to focus on at the time of
the grant.
Note: The assumptions used to determine the market value of FY19 invitations can be found in the notes to
the financial statements.
LFSP Shares do not require exercise, as they are issued/transferred to the Participant up-
front, however they may not be dealt with until the performance and vesting conditions
are met, and are subject to repayment of any outstanding loan amount at the time of the
disposal or the elapsing of the Term of the loan.
Performance Rights will be automatically exercised on the date of the Vesting Notification
which will be issued if, and when, the performance conditions and hurdles are met.
Participants will be required to submit an Exercise Notice in respect of Options, in order
to convert them to Shares, as well as the payment of the Exercise Price in respect of each
Option exercised. All Employee Options have vested as at the date of this report.
27
JANISON ANNUAL REPORT 2019 Remuneration
Report
Long Term Incentive Plan (LTIP) Performance Rights, Options and Loan Funded Share Plan (LFSP)
Aspect
Plan, Offers and Comments
Disposal Restrictions etc.
Cessation of Employment
Change of Control of the
Company (CoC)
Fraudulent or Dishonest Actions
Performance Rights and options granted under the Plan may not be assigned, transferred,
encumbered with a Security Interest in or over them, or otherwise disposed of by a
Participant, unless the consent of the Board is obtained, or due to the force of law in the
case of the death of a Participant. The Board has discretion to determine the disposal
restrictions attaching to Shares.
In the event of cessation of employment in the circumstances of a “Bad Leaver” (resignation
or termination for cause), all unvested entitlements will be forfeited. In other circumstances,
the treatment of unvested awards will be dealt with as determined by the Board.
If in the opinion of the Board a change of control event has occurred, or is likely to occur;
a) Performance Rights granted will vest to the extent that the performance period has
elapsed, and to the extent performance conditions have been met (may involve a pro-
rata calculation), with the remainder lapsing,
b) Options may be subject to accelerated vesting in the sole discretion of the Board, and
c) Share Awards or Loan Funded Shares which do not vest will automatically be
surrendered by the Participant, and any that do not lapse and which are subject to an
outstanding loan will be subject to the requirement of the loan being repaid by the date
of the CoC.
If the Board takes the view that a Participant has acted fraudulently, dishonestly, or willfully
breaches their duties to the group, the Board has discretion to determine that unvested or
unexercised awards are forfeited.
5.1 Performance Outcomes for FY19 Including STI and LTI
The following outlines the performance of the Company over the FY19 period in accordance with the requirements of the
Corporations Act.
FY End Date
30-Jun-19
30-Jun-18
Revenue ($m)
Loss After
Tax ($m)
Share Price
Change in
Share Price
Dividends
22.5
17.3
(1.3)
(21.9)
0.29
0.46
(0.17)
0.16
-
-
Short Term Change in
Shareholder Value Over 1
Year
Amount
$
7.4
22.0
%
18%
56%
Total Shareholder Return (TSR) is calculated as the return to shareholders between the start and the end of measurement
period, composed of the sum of the change in the share price and dividends over the period (assumed to be reinvested in
Company Shares), as a percentage of the Share price at the start of the measurement period.
The introductory sections of this report include an outline of the major strategic achievements and other activities that created
shareholder value during the reporting period.
5.2 Links Between Performance and Reward Including STI and LTI Determinations
The remuneration of executive KMP is intended to be composed of three parts as outlined earlier, being:
• Base Package, which is not intended to vary with performance but which is benchmarked to the scale of the Company (i.e.
increases tend to follow increases in market capitalisation which is most commonly driven by value creation for shareholders),
28
JANISON ANNUAL REPORT 2019 • STI which is intended to vary with indicators of annual Company and individual performance, and
• LTI which is also intended to deliver a variable reward based on long-term measures of Company performance.
If it is agreed by the remuneration committee that an STI is achieved in relation to the FY19 period then it will be paid within a
reasonable period after the end of the period (i.e. during FY20). The awards outlined below are considered appropriate by the
Board, under the STI scheme in place for FY19, in light of the performance during the year:
FY19 KPI Summary
Name
Position
KPI Summary
Target Award
$
Tom Richardson
Chief Executive Officer
Trading EBITDA
100,000
Diane Fuscaldo
Chief Financial Officer
Trading EBITDA
Stuart Halls
Chief Financial Officer
Trading EBITDA
32,850
56,000
Achievement
% $ Awarded
30%
Nil
54%
30,000
Nil
30,000
Award Outcomes
FY19 Paid in
FY20
Total STI Award
$
30,000
Nil
30,000
Although the Group Trading EBITDA Margin is a fixed result, common to all Participants, the Board also considers individual
role performance factors and therefore each Participant will receive a differing percentage of their Target award due to this
factor.
Following the end of the Measurement Period (the financial year), the Company accounts were audited and reports on the
Company’s activities during the year were prepared for the Board. The Board then assessed the extent to which operating
profitability expectations had been met or exceeded in relation to the Company and each role, to calculate the total award
payable.
The Board takes the view that revenue, profit and strategy implementation aligned with the prospectus are the main drivers of
value creation for shareholders at this time.
During the reporting period, all Employee Options vested on 21 December 2018.
During the reporting period grants of equity were made in relation to long-term incentive arrangements as part of remuneration
for FY19, but did not vest due to the presence of the vesting conditions and hurdles that are yet to be fulfilled. The plans and
terms of the grants are described elsewhere in this report.
In relation to the completed reporting period for FY19, no grants of equity vested, i.e. there has been no vesting during FY19 in
relation to hurdles/conditions fulfilled during FY19.
5.3 Links Between Company Strategy and Remuneration
The Company intends to attract the superior talent required to successfully implement the Company’s strategies at a
reasonable and appropriately variable cost by:
• positioning Base Packages (the fixed element) around relevant market data benchmarks when they are undertaken,
• supplementing the Base Package with at-risk remuneration and incentives that motivate executive focus on:
– short to mid-term objectives linked to the strategy via annual performance assessments, and
– long term value creation for shareholders by linking a material component of remuneration to those factors that
shareholders have expressed should be the long term focus of executives and the Board, such as share price appreciation.
To the extent appropriate, the Company links strategic implementation and measures of success of the strategy, directly to
incentives in the way that performance is assessed.
29
JANISON ANNUAL REPORT 2019 Remuneration
Report
6
Changes in KMP Held Equity
The following table outlines the changes in the amount of equity held by executives of Janison Education over the financial year:
Granted FY19
Date
Granted
Number
Forfeited
Number
Vested
Number*
Purchased
Number
Balance
End of Year
Number
Escrowed
Number
Balance
Beginning
of Year 30-
Jun-18
15,599,251
2,400,000
2,000,000
66,067,416
1,200,000
1,000,000
33,333
3,333
15,000
Name
Instrument
Tom
Richardson
Ordinary
Shares
Loan Funded
Shares
Performance
Rights
Wayne
Houlden
Ordinary
Shares
Loan Funded
Shares
Performance
Rights
Options
Gift Shares
Ordinary
Shares 3
Loan Funded
Shares
Performance
Rights
Diane
Fuscaldo 1
Stuart
Halls 2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 3-Dec-18 150,000
- 3-Dec-18 150,000
-
-
-
-
-
15,599,251
7,799,625
-
2,400,000
- 2,000,000
-
2,000,000
-
-
-
-
-
66,067,416
33,033,708
-
1,200,000
- 1,000,000
-
1,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
33,333
3,333
15,000
-
150,000
-
150,000
-
-
-
-
-
-
-
-
-
TOTAL
88,318,333
300,000
- 3,000,000
- 88,618,333 40,833,333
*All vested performance rights above had not yet been converted to ordinary shares as at the date of this report.
1 Resigned 12 April 2019
2 Appointed 3 December 2018
3 Shares do not have any vesting conditions
30
JANISON ANNUAL REPORT 2019 The following table outlines the changes in the amount of equity held by non-executive directors of Janison Education over the
financial year:
Granted FY19
Date
Granted
Number
Forfeited
Number
Vested
Number (1)
Purchased
Number
Balance
End of Year
Number
Escrowed
Number
Balance
Beginning
of Year 30-
Jun-18
600,000
500,000
1,181,475
105,000
600,000
500,000
934,875
105,000
600,000
500,000
266,667
Name
Instrument
Mike Hill
Loan Funded
Shares
Performance
Rights
Ordinary
Shares 2
Options
Brett
Chenoweth
Loan Funded
Shares
Performance
Rights
Ordinary
Shares 2
Options
David
Willington
Loan Funded
Shares
Performance
Rights
Ordinary
Shares 2
Allison
Doorbar
Loan Funded
Shares
Performance
Rights
-
-
-
600,000
-
500,000
-
500,000
-
-
125,000
1,306,475
590,737
-
-
-
-
-
-
-
-
-
-
-
-
-
105,000
-
600,000
-
105,000
-
600,000
-
500,000
-
500,000
50,000
984,875
467,437
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
500,000
-
500,000
-
-
-
-
50,000
316,667
-
600,000
- 11-Mar-19
600,000
- 11-Mar-19
500,000
-
500,000
-
500,000
-
-
-
-
-
-
-
-
-
TOTAL
5,893,017
1,100,000
- 2,000,000
225,000 7,218,017
1,058,174
1 All performances rights are vested at the reporting date but not yet converted to ordinary shares
2 Shares do not have any vesting conditions
31
JANISON ANNUAL REPORT 2019 Remuneration
Report
The following table outlines the value of equity granted to executives and NEDs in respect of Janison Education during the
2018 and 2019 financial years:
Name
Role
Tranche
Total Value
at Grant
$
Value
Expensed in
FY19
Max Value to
be Expensed
in Future
Years
Min Value to
be Expensed
in Future
Years
Tom Richardson
Chief Executive
Officer and Managing
Director
Loan Funded Shares
288,000
141,114
60,696
60,696
Performance Rights
420,000
254,416
31,802
31,802
Wayne Houlden
Executive Director
Loan Funded Shares
144,000
70,557
30,348
30,348
Diane Fuscaldo 1
Stuart Halls 2
Chief Financial
Officer
Chief Financial
Officer
Performance Rights
210,000
127,208
15,901
15,901
Options
Gift Shares
5,562
1,000
4,438
-
-
-
-
-
Loan Funded Shares
28,057
8,183
19,874
19,874
Performance Rights
36,000
13,263
22,737
22,737
Mike Hill
Non Executive Chairman Loan Funded Shares
72,000
35,279
15,174
15,174
Performance Rights
105,000
63,604
7,951
7,951
Ordinary Shares
100,000
-
-
-
Brett Chenoweth Non Executive
Loan Funded Shares
72,000
35,279
15,174
15,174
Director
Performance Rights
105,000
63,604
7,951
7,951
Ordinary Shares
96,863
-
-
-
David Willington Non Executive
Loan Funded Shares
72,000
35,279
15,174
15,174
Director
Allison Doorbar
Non Executive
Director
TOTAL
1 Resigned 12 April 2019
2 Appointed 3 December 2018
Performance Rights
105,000
63,604
7,951
7,951
Loan Funded Shares
107,288
53,644
53,644
53,644
Performance Rights
124,500
124,500
-
-
2,092,270
1,093,973
304,376
304,376
Note: The assumptions used to value equity grants can be found in the Notes to the financial statements.
32
JANISON ANNUAL REPORT 2019 7 NED Fee Policy Rates for FY19, and Fee Limit
Non-executive director fees are managed within the current annual fees limit (AFL or fee pool) of $500,000 which was approved
by shareholders as part of the constitution of the Company during the RTO. The NED fee policy rates for the main Board that
were applicable as at the end of FY19, and which will apply to FY20 unless a review is conducted during the year were $70,000
fee (including super) for members and $90,000 fee (including super) for the chair:
Currently the Board does not pay committee fees, as the duties involved in committee work are shared between the NEDs in an
evenly distributed manner. The foregoing fee rates ignore the value of equity granted to NEDs, and such grants. It was deemed
appropriate to grant equity to NEDs on similar terms to executives, as part of the RTO process, and to ensure that all KMP had
aligned interests linked to the delivery of the prospectus.
8
Remuneration Records for FY19 – Statutory Disclosures
8.1 Senior Executive Remuneration
The following table outlines the remuneration received by Senior Executives of Janison Education during the financial year
ended 30 June 2019, prepared according to statutory disclosure requirements of the Corporations Act:
Base Package
Super
Contribution
$
Other
Benefits
$ (3)
Salary
$
Year
STI 1
LTI 2
Amount
$
% of
TRP
Amount
$
% of
TRP
Amount
$
% of
TRP
Total
Package
(TRP)
$
2019 339,677
20,531
-
360,208 46%
30,000
4% 395,531 50%
785,739
2018 187,558
11,170
17,766
216,494 44%
77,500 16% 194,532 40%
488,526
Name
Tom
Richardson
Role
CEO
Wayne
Houlden
Executive
Director
2019 151,986
14,439
77,495
243,920 55%
2018
89,597
8,226
50,001
147,824 60%
CFO
2019 155,669
15,326
17,654
188,649 98%
-
-
-
-
-
197,765 45%
441,685
97,266 40%
245,090
4,438
2%
193,087
2018
80,769
7,673
CFO
2019 161,538
11,931
2018
-
-
-
-
-
88,442 66% 38,325 29%
6,562
5%
133,329
173,469 77%
30,000 13%
21,446 10%
224,916
-
-
-
-
-
-
-
2019 808,871
62,227
95,149 966,247 59% 60,000
4% 619,180 38% 1,645,427
2018 357,924
27,069
67,767
452,760 52% 115,825 13% 298,360 34% 866,945
Diane
Fuscaldo 4
Stuart
Halls 5
TOTAL
TOTAL
1 The FY19 STI value reported in this table is the STI to be paid during FY20, being the award earned during FY19.
2 The LTI value reported in this table is the amortised accounting charge of all grants that have not lapsed or vested as at the start of the reporting period.
Where a market-based measure of performance is used such as TSR or Share Price, no adjustments can be made to reflect actual LTI outcomes. Where
conditions include only non-market hurdles (effectively anything other than Share price or TSR), LTI amortisation may increase, or even be written back, based
on the expected outcome during each year of the amortisation period (and may include negative values).
3 Included in “Other Benefits” are: Living Away from Home Allowances and termination payments including accrued leave balances.
4 Resigned 12 April 2019
5 Appointed 3 Dec 2018
33
JANISON ANNUAL REPORT 2019 Remuneration
Report
8.2 NED Remuneration
Remuneration received by non-executive directors of Janison Education Group during the financial year ended 30 June 2019
and 2018 is disclosed below:
Board Fees
$
Committee
Fees
$
Super-
annuation
$
Equity Grant
$
Total
$
Name
Role(s)
Mike Hill
Non Executive Chairman
Brett Chenoweth
Non Executive Director
David Willington
Non Executive Director
Allison Doorbar 1
Non Executive Director
Year
2019
2018
2019
2018
2019
2018
2019
2018
82,192
47,945
70,237
40,833
63,927
37,291
77,496
-
TOTAL
TOTAL
2019
293,852
2018
126,069
-
-
-
-
-
-
-
-
-
-
7,808
98,883
188,883
4,555
148,633
201,133
-
-
98,883
169,120
145,496
186,329
6,073
98,883
168,883
3,543
48,633
89,467
-
-
178,144
255,640
-
-
13,881
474,792
782,525
8,098
342,762
476,929
1 Includes additional consulting services of $7,500 plus GST for a Company strategy planning session conducted during FY19. Refer to Note 21 for
information on Related Party Transactions.
34
JANISON ANNUAL REPORT 2019 9
Employment Terms for Key Management Personnel
9.1 Service Agreements
A summary of contract terms in relation to executive KMP as at the end of FY 2019 is presented below noting that under the
FY19 arrangements, the STI is scaled to the target amount, and the LTI is reported at the accounting value as of the date
of grant since the vesting conditions attaching to the long-term incentive are binary, either achieved or not achieved, and
therefore have either the grant date accounting value shown, or will not have a value.
Period of Notice
Base
Package
Including
Super
STI Opportunity
LTI Opportunity
Position
Held
From
Company
From
KMP
Amount
$
Target
% of
Base
Pkg
Fixed
%
TRP
Target
STI
Amount
$
% of STI
Subject
to
Deferral
Target
% of
Base
Pkg
STI
%
TRP
Target LTI
Amount
$
LTI
%
TRP
Total
Remuneration
Package
at Target
Performance
CEO
3 mths
3 mths
350,000
30%
29% 100,000 9%
0% 202% 708,000 61%
1,158,000
Name
Tom
Richardson
Wayne
Houlden
Executive
Director
3 mths
3 mths
150,000
30%
-
-
-
Diane
Fuscaldo
CFO 1
4 weeks 4 weeks
164,250
83%
20%
32,850 17%
Stuart Halls CFO 2
3 mths
3 mths
280,000
83%
20%
56,000 17%
TOTAL
1 Resigned 12 April 2019
2 Appointed 3 Dec 2018
Note:
944,250 43%
20% 188,850 9%
-
-
-
-
236% 354,000 70%
504,000
-
-
-
-
-
-
197,100
336,000
112% 1,062,000 48%
2,195,100
• Employing company is Janison Education Group Limited, except Diane Fuscaldo and Stuart Halls, for which the employing
company is Janison Solutions, Pty Ltd.
• All contracts have an open ended duration.
• Under the terms of the STI arrangements in place, the maximum STI opportunity is 150% of the target STI opportunity.
• During FY19, Wayne Houlden was located in London on behalf of the Company. To cover the higher cost of living in
London, the Company agreed to increase Wayne Houlden’s remuneration above his contracted rate by $12,190 monthly to
include additional base salary and a monthly living away from home allowance. The above listed contractual base package
remuneration, excludes these additional amounts.
• Base package includes an entitlement of five weeks annual leave per year of service and the compulsory supperannuation
contributions as per the Superannuation Guarantee.
35
JANISON ANNUAL REPORT 2019 Remuneration
Report
Maximum termination payments under the above contracts are up to the amount specified under the Corporations Act (1
x average Base Salary) unless shareholder approval is obtained. The treatment of incentives in the case of termination is
addressed in separate sections of this report that give details of incentive design.
On appointment to the Board, all non-executive directors enter into an agreement with the Company in the form of a letter of
appointment, including an outline of duties, and the following features:
• Open ended term, subject to ongoing approval by the Company’s shareholders,
• The initial fees payable to the person,
• The terms on which the Company may terminate the appointment (e.g. resignation, bankruptcy etc.),
• The initial granting of equity as outlined elsewhere in this report (only one grant specified in the agreement), and
• The agreement does not include any entitlement to termination payments, however under the equity grant arrangements,
payments which may be classified as termination payments could theoretically arise, in which case the Board will exercise its
discretion to determine the appropriate outcome.
10 Other Remuneration Related Matters
The following outlines other remuneration related matters that may be of interest to stakeholders, in the interests of
transparency and disclosure:
• Other than in the case of grants of Loan Funded Shares, there were no loans to Directors or other KMP at any time during the
reporting period,
• Other related party transactions involving Wayne Houlden and Tom Richardson are described in notes to the Consolidated
Financial Statements. There were no relevant material transactions involving KMP other than compensation and transactions
concerning shares, performance rights and options etc. as discussed in this report.
11 External Remuneration Consultant Advice
During the reporting period, the Board did not engage any external remuneration consultant (ERC) to provide KMP
remuneration recommendations.
36
JANISON ANNUAL REPORT 2019 FINANCIAL
REPORT
37
JANISON ANNUAL REPORT 2019 Financial
Statements
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
Notes
2019
($’000s)
2018
($’000s)
11,533
10,616
2,523
8,440
22,496
14,608
7,887
526
5,215
(67)
1,302
6,975
(1,075)
51
1,292
963
(100)
368
46
(632)
650
-
6,689
17,305
10,625
6,680
1,079
3,399
(83)
504
4,899
(1,397)
23,312
560
324
42
-
22
(21,083)
795
3
4
5
6
7
5
8
9
10
(1,283)
(21,878)
-
9
-
2
(1,274)
(21,876)
29
(0.88)
(25.08)
Year ended 30 June
Platform revenue
Exam management revenue
Project services revenue
Total operating revenue
Cost of sales
Gross Profit
Product development labour costs
General and administrative
Other operating income and expenses, net
Business development expenses
Total operating expenses
Research and development tax credit income
Capital raising and acquisition expenses
Share-based compensation
Depreciation and amortisation
Net financial (revenue) / expense
Other non operating expenses
Foreign exchange gains and losses
Loss before income tax
Income tax expense
Net Loss
Other comprehensive Income
Foreign currency translation, net of income tax
Total Comprehensive Loss
Basic loss per share (cents)
The accompanying notes form an integral part of these financial statements.
38
JANISON ANNUAL REPORT 2019 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June
Assets
Cash and cash equivalents
Trade and other receivables
Prepaid expenses
Total current assets
Plant and equipment
Intangible assets
Deferred tax asset
Total non-current assets
Total Assets
Liabilities
Trade and other payables
Employee entitlements current
Income in advance
Income Tax Payable
Total current liabilities
Employee entitlements non-current
Deferred Tax Liability
Total non-current liabilities
Total Liabilities
Net assets
Equities
Share capital
Reserves
Accumulated losses
Total Equity
The accompanying notes form an integral part of these financial statements.
Notes
2019
($’000s)
2018
($’000s)
11
12
13
10
14
15
10
15
10
18
18
6,025
7,347
629
14,001
633
18,448
5,402
24,482
38,483
7,616
1,271
1,719
525
3,619
5,059
648
9,327
557
2,495
5,146
8,197
17,524
1,851
940
1,917
-
11,131
4,708
107
2,038
2,145
71
-
71
13,276
4,779
25,207
12,745
47,549
1,949
35,104
649
(24,291)
(23,008)
25,207
12,745
39
JANISON ANNUAL REPORT 2019 Financial
Statements
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 30 June
Receipts from customers
Payments to suppliers and employees
Interest paid and received, net
Income taxes refunded
Other
Net cash flows from operating activities
Acquisition consideration paid to Janison shareholders, net
Acquisition transaction costs
Purchase of Ascender
Purchase of LTC
Investment in internally generated software
Proceeds from the sale of plant and equipment
Purchase of plant and equipment
Proceeds from term deposit
Proceeds from sale of marketable securities
Net cash used in investing activities
Proceeds from capital raising ($11 million), net of costs
Repayment of shareholder loans
Net repayments on financing obligation
Dividends paid
Net cash from financing activities
Effect of exchange rate changes
Net change in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
The accompanying notes form an integral part of these financial statements.
40
Notes
2019
($’000s)
2018
($’000s)
21,647
16,561
(21,781)
(16,245)
6
28
7
22
13
12
18
16
17
100
238
67
270
-
(51)
-
(4,985)
(3,153)
-
(80)
-
(8,269)
10,445
-
-
-
10,445
(41)
2,406
3,619
6,025
(42)
468
100
842
(1,304)
(1,282)
(99)
-
(1,570)
153
(74)
147
-
(4,029)
9,343
(2,500)
(395)
(1,000)
5,448
-
2,261
1,358
3,619
JANISON ANNUAL REPORT 2019 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended 30 June
Balance at 1 July 2018
Net loss
Other comprehensive income
Total comprehensive loss
Issue of shares
Share-based payments-other
Share-based payments-employee share options
Total transactions with owners
Balance at 30 June 2019
Year ended 30 June
Balance at 1 July 2017
Net Loss
Other comprehensive income
Total comprehensive loss
Issue of shares
Share-based payments-advisers rights and options
Share-based payments-Directors
Share-based payments-employee share options
Dividends paid
Total transactions with owners
Balance at 30 June 2018
The accompanying notes form an integral part of these financial statements.
Share
Capital
($’000s)
Accumulated
Losses
($’000s)
Reserves
($’000s)
35,104
(23,008)
649
-
-
-
(1,283)
-
(1,283)
12,445
-
-
12,445
-
-
-
-
47,549
(24,291)
Share
Capital
($’000s)
Accumulated
Losses
($’000s)
880
(130)
-
-
-
(21,878)
-
(21,878)
34,224
-
-
-
-
-
-
-
-
-
9
9
-
1,187
104
1,292
1,949
Reserves
($’000s)
-
-
2
2
-
38
438
171
Total
Equity
($’000s)
12,745
(1,283)
9
(1,274)
12,445
1,187
107
13,739
25,207
Total
Equity
($’000s)
750
(21,878)
2
(21,876)
34,224
38
438
171
(1,000)
-
(1,000)
34,224
(1,000)
35,104
(23,008)
647
649
33,871
12,745
41
JANISON ANNUAL REPORT 2019 Notes to Financial
Statements
NOTE 1: SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
1.1 General Information and Nature of
Operations
These financial statements include the Janison Education
Group Limited (JEG) a publicly listed company incorporated
and domiciled in Australia and its subsidiaries (collectively
referred to as the Group).
The Group’s principal activities include the software
development, hosting and licensing of e-learning and student
assessment software platforms for schools, institutes of higher
learning and corporations, and as at April 1 2019, with the
purchase of LTC, the Group also provides exam management
services. A description of the Group’s operations is provided
in the Director’s Report, which is not part of the
financial statements.
1.2 Capital Raising and Acquisition
In October 2018 the Group completed a $5m (before costs)
capital raising via a share placement with new and existing
institutional shareholders and sophisticated investors. As a
result, 12.275m new, fully-paid ordinary shares were issued
at $0.40 per share. The proceeds of the capital raise were
invested in the Group’s products and to support future growth
in the higher education sector.
On 1 April 2019 the Group completed the acquisition of LTC
Hold Co Pty Limited and its subsidiary. The acquisition has
been accounted for under AASB 3 (Business Combinations)
as a business combination. As required under AASB 3,
management fair valued the assets and liabilities acquired. As
a result of this process a fair value of $7.8m has been ascribed
to the client relationships acquired. The booking of the $7.8m
in client relationships resulted in a deferred tax liability which
will unwind in line with the life of client relationships. The
expected life of these assets/liabilities is five years.
AASB 3 allows a measurement period after a business
combination to provide the acquirer a reasonable time to
obtain the information necessary to identify and measure all
of the various components of the business combinations as of
the acquisition date. The period cannot exceed one year.
To assist with the funding of this acquisition, the Group
undertook a capital raising of $6m (before costs) in March
2019. The capital raising took place via a share placement with
new and existing institutional shareholders and sophisticated
investors. As a result, approximately 18.2m new, fully-paid
ordinary shares were issued at $0.33 per share.
Australian Accounting Standards Board and International
Financial Reporting Standards as issued by the International
Accounting Standards Board. The Group’s financial year ends
on 30 June and the financial statements are denominated in
Australian dollars.
The financial statements have been prepared on an accruals
basis and are based on historical costs modified, where
applicable, by the revaluation of selected non-current assets
for which the fair value basis of accounting has been applied.
The following is a summary of the material accounting policies
adopted by the Group in the preparation of the financial
statements. The accounting policies have been consistently
applied, unless otherwise stated.
The Group is of a kind referred to in ASIC Instrument
2016/191, issued by the Australian Securities and Investments
Commission, relating to the “rounding off” of amounts in the
financial reports. Amounts in this financial report have been
rounded off in accordance with that Class Order to the nearest
thousand dollars, or in certain cases, to the nearest dollar.
The consolidated financial statements incorporate the
assets and liabilities of all subsidiaries of Janison Education
Group Limited as of 30 June 2019 and the results of all
subsidiaries with the exception of LTC for which the results are
incorporated into the Group from 1 April 2019.
For the year ended 30 June 2018, the consolidated group
comprises Janison for the full year and Janison Education
Group from 15 December 2017 to 30 June 2018.
1.4 Accounting Policies
The financial statements have been prepared using the
consistent accounting policies and methods of computation
in all periods presented. The Group’s accounting policies are
described below.
1.4.1 Income Tax
The income tax expense / (benefit) for the year comprises
current income tax expense / (income) and deferred tax
expense / (income). Current and deferred income tax
expense / (income) is charged or credited directly to other
comprehensive income instead of the profit or loss when the
tax relates to items that are credited or charged directly to
other comprehensive income.
Current tax – Current income tax expense charged to the
profit or loss is the tax payable on taxable income calculated
using applicable income tax rates enacted, or substantially
enacted, as at reporting date. Current tax liabilities/ (assets)
are therefore measured at the amounts expected to be paid
to / (recovered from) the relevant taxation authority.
1.3 Basis of Presentation
These general purpose financial statements have been
prepared in accordance with the Corporations Act 2001,
Australian Accounting Standards and Interpretations of the
Current tax assets and liabilities are offset where a legally
enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the
respective asset and liability will occur.
42
JANISON ANNUAL REPORT 2019 Deferred tax – Deferred income tax expense reflects
movements in deferred tax asset and deferred tax liability
balances during the year as well as unused tax losses.
Deferred tax assets and liabilities are ascertained based on
temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial
statements. Deferred tax assets also result where amounts have
been fully expensed but future tax deductions are available.
No deferred income tax will be recognised from the initial
recognition of an asset or liability, excluding a business
combination, where there is no effect on accounting or
taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax
rates that are expected to apply to the period when the
asset is realised or the liability is settled, based on tax rates
enacted or substantively enacted at the reporting date. Their
measurement also reflects the manner in which management
expects to recover or settle the carrying amount of the related
asset or liability.
Depreciation is calculated by applying the following methods
and useful lives:
Category
Method
Useful Life
Computer Equipment
Diminishing Value
4 to 5 years
Office Furnishings
& Equipment
Diminishing Value 4 to 15 years
Leasehold Improvements
Straight-Line
15 years
Purchased Intangibles
Straight-Line
1-5 years
Leasehold improvements are depreciated over the shorter
of either the unexpired period of the lease or the estimated
useful lives of the assets.
Gains and losses on disposals are determined by comparing
proceeds with the carrying amount. These gains or losses
are included in the statement of profit or loss and other
comprehensive income.
Deferred tax assets relating to temporary differences and
unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against
which the benefits of the deferred tax asset can be utilised.
1.4.3 Leases
Lease payments under operating leases, where substantially
all the risks and benefits remain with the lessor, are charged as
expenses in the periods in which they are incurred.
Deferred tax assets and liabilities are offset where a legally
enforceable right of set-off exists, the deferred tax assets and
liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different
taxable entities where it is intended that net settlement or
simultaneous realisation and settlement of the respective
asset and liability will occur in future periods in which
significant amounts of deferred tax assets or liabilities are
expected to be recovered or settled.
The income tax expense / (benefit) for the year comprises
current income tax expense / (income) and deferred tax
expense / (income). Current and deferred income tax
expense / (income) is charged or credited directly to other
comprehensive income instead of the profit or loss when the
tax relates to items that are credited or charged directly to
other comprehensive income.
1.4.2 Fixed Assets
Fixed assets including identifiable intangibles are measured
at cost less depreciation and impairment losses. The carrying
amount of plant and equipment and an assets residual values
are reviewed as required, but at least annually.
Lease incentives under operating leases are recognised as a
liability and amortised on a straight-line basis over the life of
the lease term.
1.4.4 Impairment of Assets
At each reporting date, the Group reviews the carrying values
of its tangible and intangible assets to determine whether
there is any indication that those assets have been impaired.
If such an indication exists, the recoverable amount of the
asset, being the higher of the asset’s fair value less costs to
sell and value in use, is compared to the asset’s carrying value.
In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value
of money and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted.
Any excess of the asset’s carrying value over its recoverable
amount is expensed to the statement of profit or loss and
other comprehensive income.
Impairment testing is performed annually for intangible assets
with indefinite lives and intangible assets not yet available for
use. Where it is not possible to estimate the recoverable amount
of an individual asset, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
43
JANISON ANNUAL REPORT 2019 Notes to Financial
Statements
1.4.5 Intangible Assets
Internally Developed Software – Expenditure on the research
phase of projects to develop new software systems and
products is expensed as incurred.
Costs that are directly attributable to the development phase
of new Janison software products or costs that enhance the
capabilities and features of existing products are recognised
as intangible assets, and are amortised over 3 years once
complete, provided they meet the following
recognition requirements:
• the development costs can be measured reliably
• the project is technically and commercially feasible
• the Group intends to and has sufficient resources to
complete the project
• the Group has the ability to use or sell the software; and
• the software will generate probable future economic
benefits
Development costs not meeting these criteria for
capitalisation are expensed as incurred.
Directly attributable costs include employee costs incurred on
software development along with an appropriate portion of
direct overheads.
Any capitalised internally developed software that is not
yet complete is not amortised, but is subject to impairment
testing. Goodwill arises on the acquisition of a business.
Goodwill is not amortised, instead, goodwill is tested annually
for impairment.
Subsequent measurement – All internally developed
software is accounted for using the cost model whereby
capitalised costs are amortised on a straight-line basis over
their estimated useful lives, as these assets are considered
finite. Residual values and useful lives are reviewed at each
reporting date. In addition, they are subject to impairment
testing as described in Note 1.4.4.
1.4.6 Employee Benefits
Short-term employee benefits are benefits, other than
termination benefits, that are expected to be settled wholly
within twelve (12) months after the end of the period in which the
employees render the related service. Examples of such benefits
include wages and salaries, and accumulating annual leave.
The Group’s liabilities for long service leave are included
in other long-term benefits as they are not expected to be
settled wholly within twelve (12) months after the end of the
period in which the employees render the related service.
They are measured at the present value of the expected
future payments to be made to employees. The expected
future payments incorporate anticipated future wage and
salary levels, experience of employee departures and periods
of services, and are discounted at rates determined by
reference to market yields at the end of the reporting period
on high quality corporate bonds that have maturity dates that
approximate the timing of the estimated future cash outflows.
Any re-measurements arising from experience adjustments
and changes in assumptions are recognised in profit and loss
in the periods in which the changes occur.
The Group presents employee benefit obligations as current
liabilities in the statement of financial position if the Group does
not have an unconditional right to defer settlement for at least
twelve (12) months after the reporting period, irrespective of
when the actual settlement is expected to take place.
1.4.7 Cash and Cash Equivalents
Cash comprises cash on hand and demand deposits. Cash
equivalents are short-term, highly liquid investments that are
readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.
Bank overdrafts are shown within short-term borrowings in
current liabilities on the statement of financial position.
1.4.8 Revenue Recognition
The Group has applied AASB 15: Revenue from Contracts
with Customers in all periods in determining the amount
of revenue recognised in each reporting period. Using the
guidance provided in AASB 15, the Group uses a 5-step
approach to analysing customer contracts and recording
revenue:
Step 1: Identify the contract(s) involved in the arrangement
with the customer
Step 2: Identify the performance obligations under
the arrangement
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the
performance obligations
Step 5: Calculate revenue to be recognised in each
reporting Period
Revenue is recognised and measured at the fair value of the
consideration received or receivable excluding sales taxes. The
Group recognises revenue when the amount of revenue can
be reliably measured and it is probable that future economic
benefits will flow to the entity and specific criteria have been
met for each of the Group’s activities as described below.
The Group provides customers Software as a Service
(“SaaS”). Customers include corporates, schools, tertiary and
governmental agencies.
The Group’s revenue is separable into its components for
each of these operating segments and recognised as follows:
44
JANISON ANNUAL REPORT 2019 a) Platform Licensing and Hosting Revenue
The Group’s products include a learning platform and
a student assessment platform. Revenue related to
the licensing of these platforms is recognised on the
completion of performance obligations of the licenced
software under an agreement between the Group and the
customer and in the case of period based fees recognised
over the licence period.
Cloud-based hosting services revenue is recognized
over the period that the services are performed. Post-
implementation licence support revenue includes fees for
ongoing upgrades, minor software revisions and helpline
support and is recognized as revenue over the contract
period in which the services are performed.
b) Exam Management Revenue
Exam management revenue includes fees related to the
physical supervision of exams for clients. The is a new
revenue type introduced by the purchase of the LTC
business. Revenue is recognised in the period when exams
are completed.
c) Learning Content Revenue
Content revenue includes fees for sourcing third party
content and in some cases fees for generating custom
designed content. Content services fees are recognised as
revenue over the period that the services are provided.
d) Software Development Project Revenue
Software development project revenue includes fees
related to the creation of custom designed software
systems and configuration and implementation services
linked to installing a Janison platform. Revenue related to
software development and major configuration projects
is recognised in proportion to the stage of completion,
typically in accordance with the achievement of contract
performance obligations and/or the percentage of
completion
to the principal outstanding and at the effective interest
rate applicable, which is the rate that exactly discounts
estimated future cash receipts through the expected life
of the financial asset to that asset’s net carrying amount.
Grant income for Export Market Development Grants
(EMDG) and Regional Jobs Grants are recognised at the
point when the Group is notified of successful application.
1.4.9 Borrowing Costs
Borrowing costs are recognised in the statement of profit or
loss and other comprehensive income in the period in which
they are incurred.
1.4.10 Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the
amount of GST, except where the amount of GST incurred is
not recoverable from the Australian Taxation 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 statement of financial
position are shown inclusive of GST.
Cash flows are presented in the 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.
1.4.11 Critical Accounting Estimates and Judgements
The following are significant management judgements in
applying the accounting policies of the Group that have the
most significant effect on the financial statements.
Internally developed software and research costs –
Management monitors progress of internal research and
development projects by using a project management
system. Significant judgement is required in distinguishing
research from the development phase. Development costs are
recognised as an asset when all the criteria are met, whereas
research costs are expensed as incurred.
e) Income in Advance
Contractual amounts received from customers in advance
of the start of the licence or hosting period or the provision
of services are accounted for as a current liability called
Income in Advance.
Management also monitors whether the recognition
requirements for development costs continue to be met.
This is necessary as the economic success of any product
development is uncertain and may be subject to future
technical problems after the time of recognition.
f) Earned and Unbilled Revenue
Revenues recorded for fees not yet invoiced to customers
are accounted for as an asset called Unbilled Revenue.
These amounts have met the revenue recognition criteria of
the Group, but have not reached the payment milestones
contracted with customers.
g) Other Income
Research and development tax incentive credit income is
recognised when the Group is entitled to the incentive. The
amount is recorded as Other Income in the period in which
the related research and development costs were incurred.
Interest revenue is accrued on a time basis, by reference
Deferred tax assets – The assessment of the probability
of future taxable income in which deferred tax assets can
be utilised is based on the Group’s latest approved budget
forecast, which is adjusted for significant non-taxable income
and expenses and specific limits to the use of any unused tax
loss or credit. If a positive forecast of taxable income indicates
the probable use of a deferred tax asset, especially when it
can be utilised without a time limit, that deferred tax asset
is usually recognised in full. The recognition of deferred tax
assets that are subject to certain legal or economic limits or
uncertainties is assessed individually by management based
on the specific facts and circumstances.
45
JANISON ANNUAL REPORT 2019
Notes to Financial
Statements
Estimation uncertainty – When preparing the financial
statements management undertakes a number of
judgements, estimates and assumptions about recognition
and measurement of assets, liabilities, income and expenses.
The actual results may differ from the judgements, estimates
and assumptions made by management, and will seldom
equal the estimated results. Information about significant
judgements, estimates and assumptions that have the most
significant effect on recognition and measurement of assets,
liabilities, income and expenses is provided below.
Revenue – The Group recognises revenue on long-term
software development projects based upon the percentage
of completion against the contract performance obligation
method which relies upon estimates of the total cost to
complete a project at each reporting date.
Impairment – An impairment loss is recognised for the
amount by which the assets’ or cash-generating unit’s carrying
amount exceeds its recoverable amount. To determine the
recoverable amount, management estimates expected future
cash flows from each cash-generating unit and determines a
suitable interest rate in order to calculate the present value of
those cash flows. In the process of measuring expected future
cash flows management makes assumptions about future
operating results. These assumptions relate to future events
and circumstances. The actual results may vary, and may
cause significant adjustments to the Group’s assets within the
next financial year.
In most cases, determining the applicable discount rate
involves estimating the appropriate adjustment to market risk
and the appropriate adjustment to asset-specific risk factors.
Useful lives of depreciable assets – Management reviews
the useful lives of depreciable assets at each reporting
date, based on the expected utility of the assets to the
Group. Actual results, however, may vary due to technical
obsolescence, particularly relating to software and IT
equipment.
Fair value of financial instruments – Management uses
valuation techniques to determine the fair value of financial
instruments (where active market quotes are not available) and
non-financial assets. This involves developing estimates and
assumptions consistent with how market participants would
price the instrument.
Management bases its assumptions on observable data as
far as possible but this is not always available. In that case
management uses the best information available. Estimated
fair values may vary from the actual prices that would be
achieved in an arm’s length transaction at the reporting date.
Provisions – Long service leave – As discussed in Note 1.4.6,
the liability for long service leave is recognised and measured
at the present value of the estimated future cash flows to be
made in respect of all employees at the reporting date. In
determining the present value of the liability, attrition rates
and pay increases through promotion and inflation have been
taken into account.
1.4.12 New Accounting Standards Not Yet Adopted
A number of new standards, amendments to standards and
interpretations are effective for annual periods beginning
after 1 July 2019, and have not been applied in preparing
these financial statements.
None of these are expected to have a significant effect on the
Group’s financial statements:
• AASB 16 Leases, which becomes mandatory for the Group’s
2020 financial statements. This standard will ultimately
result in a portion of the Group’s operating leases to be
accounted for on the balance sheet as a “right to use asset”
and “lease liability” upon adoption of the standard on 1
July 2019. The standard will also result in reclassification
of operating lease expense into depreciation and finance
expenses, and a reclassification of certain cash flows from
operating into financing activities.
Estimated impact of AASB 16 on the Group (or Company)
when the standard is applied
Due to the adoption of AASB 16, the Group’s (or Company’s)
EBITDA will improve, while its interest and Amortisation
(Depreciation) expense will increase. This is due to the change
in the accounting for expenses of leases that were classified
as operating leases under AASB 117. The current liabilities will
increase which could reduce the net working capital of the Group
At the 30 June 2019 the Group expects the following impact if
the standard was adopted
Statement of Financial Position
The right of Lease Asset
Lease Liability – Current
Lease Liability – Non Current
Retained Earnings
$614,078
$142,610
$582,610
$111,325
The Group expects the impact to reduce profit before tax
for 30 June 2019 of $6,544 and that operating cashflows will
increase by $215,334.
The Group does not plan to early adopt the above
named standard.
46
JANISON ANNUAL REPORT 2019 NOTE 2: SEGMENT REPORTING
The Group identifies its operating segments based on the internal reports that are reviewed and used by the Board of
Directors in assessing performance and determining the allocation of resources. (Refer to Note 3 for information on the revenue
components and their definition).
The Group’s activities are organised into two operating segments: the Assessment Segment and the Learning Segment. The
Assessment Segment implements and operates a leading global platform for the provision of digital exam authoring, testing
and marking which is sold to national education departments, tertiary institutions and independent educational institutions in
Australia and around the globe.
The Learning Segment operates a learning management platform that manages the content and learning programs for major
corporate and government clients, as well as providing content development services.
2.1 Segment Contribution
Year ended 30 June 2019
Licence and hosting revenue
Platform maintenance revenue
Content licence revenue
Total recurring revenue
Exam management revenue
Project services revenue
Total segment revenue
Cost of sales
Segment gross profit
Operating expense
Segment trading EBITDA
Assessment
($’000s)
Learning
($’000s)
Total
($’000s)
4,678
1,122
-
5,800
2,523
5,660
13,983
10,504
3,479
4,148
(669)
4,175
429
1,129
8,853
1,551
1,129
5,733
11,533
-
2,780
8,513
4,105
4,409
1,752
2,657
2,523
8,440
22,496
14,608
7,887
5,900
1,987
For the prior year comparative period, segment revenue by component is provided below:
Year ended 30 June 2018
Licence and hosting revenue
Platform maintenance revenue
Content licence revenue
Total recurring revenue
Project services revenue
Total segment revenue
Cost of sales
Segment gross profit
Operating expense
Segment trading EBITDA
Assessment
($’000s)
Learning
($’000s)
Total
($’000s)
3,318
1,185
-
4,503
5,200
9,703
7,437
2,266
2,468
(202)
4,163
373
1,577
6,113
1,489
7,602
3,189
4,413
1,034
3,379
7,481
1,558
1,577
10,616
6,689
17,304
10,625
6,679
3,502
3,177
47
JANISON ANNUAL REPORT 2019 Notes to Financial
Statements
2.2 Reconciliation from Segment Contribution to Net Loss after Tax
Year ended 30 June
Assessment
Learning
Segment Trading EBITDA
Capital raising and acquisition costs
Share-based compensation
Foreign exchange losses
Other non current expense
Net interest expense
Depreciation and amortisation
Income tax expense
Net Loss after tax
2.3 Revenue by Market Sector
Year ended 30 June
Schools (K-12)
Higher Education
Workplace
Total operating revenue
2.4 Revenue by Geographic Location
Year ended 30 June
Australia and New Zealand
Asia
Rest of World
Total operating revenue
48
2019
($’000s)
2018
($’000s)
(669)
2,657
1,987
51
1,292
46
368
(100)
963
650
(202)
3,379
3,177
23,312
560
22
0
42
324
795
(1,283)
(21,878)
2019
($’000s)
2018
($’000s)
9,314
3,517
9,665
6,487
2,425
8,393
22,496
17,305
2019
($’000s)
2018
($’000s)
18,014
13,348
3,154
1,328
2,484
1,473
22,496
17,305
JANISON ANNUAL REPORT 2019 NOTE 3: CONSOLIDATED TRADING REVENUE
The Group’s revenues by component are presented below:
Year ended 30 June
Licence and hosting revenue
Platform maintenance revenue
Content licence revenue
Total recurring revenue
Exam management revenue
Project services revenue
Total operating revenue
2019
($’000s)
2018
($’000s)
8,853
1,551
1,129
7,481
1,558
1,577
11,533
10,616
2,523
8,440
-
6,689
22,496
17,305
Platform revenue includes three components:
• Licence and hosting revenue comprises recurring revenue for the right to use the platform,
• Platform maintenance revenue represents recurring revenue for maintenance and support services over a specific period of
time (usually one year),
• Content licence revenue comprises recurring revenue for the right to use third-party content distributed via Janison’s learning
platform or customers’ proprietary learning platforms.
Exam management revenue comprises revenue for the facilitation and supervision of examination events. This is a new revenue
component introduced with the acquisition of LTC in April 2019.
Project services revenue includes revenues generated by platform customisation, implementation, configuration and customer
training activities.
NOTE 4: COST OF SALES
Year ended 30 June
Personnel costs
Third party contractors
Total direct labour
Hosting costs
Exam management costs
Content licence fees
Total cost of sales
2019
($’000s)
2018
($’000s)
5,698
5,300
10,997
2,522
323
767
4,612
3,446
8,058
1,649
-
918
14,608
10,625
Personnel costs includes wages and employee benefits for staff servicing customers including segment heads, software
developers, testers, system operations engineers, and project and account managers.
49
JANISON ANNUAL REPORT 2019 Notes to Financial
Statements
NOTE 5: GENERAL AND ADMINISTRATIVE EXPENSES
Year ended 30 June
Personnel costs
Personnel costs-share based compensation
Unallocated employee costs
Office facility expenses
Travel
Software licences
Professional services
Telecommunications
Other
General and administrative expenses
Less: Share-based compensation classified as non-trading
Total general and administrative expenses
2019
($’000s)
1,894
1,292
757
662
568
433
594
73
234
6,506
1,292
5,215
2018
($’000s)
1,185
611
542
427
579
214
226
66
109
3,959
560
3,399
Personnel costs include the salaries, benefits and bonuses of the Group’s board, human resources and finance functions.
Unallocated employee costs include primarily Australian state payroll tax levies, staff training and other employee related
expenses not allocated by department.
NOTE 6: OTHER OPERATING INCOME AND EXPENSE, NET
Other operating income and expense is comprised of grant income.
In 2019, the Group received $67 thousand for Export Market Development Grant (EMDG) from the Australian government.
During financial year 2018, the group received a $100 thousand grant from the government of NSW under a jobs grant program.
Gains and losses on the sale or disposal of plant and equipment has been reclassified in 2019 annual report to other non-
operating expense. (2018: $17 thousand)
50
JANISON ANNUAL REPORT 2019 NOTE 7: CAPITAL RAISING AND ACQUISITION EXPENSES
The expenses associated with completing the Capital Raising and Acquisition Transaction described in Note 1.2 are
summarised below:
Year ended 30 June
Legal fees
Consulting fees
Accounting and expert reports
Other
Total Transaction costs
Deemed consideration to Janison shareholders, net of fair value of acquired assets
Conversion shares to HJB shareholders
Share-based payments to employees and advisors
Total Share-based acquisition expenses
Deferred taxation (benefit)/cost
2019
($’000s)
2018
($’000s)
14
37
-
-
51
-
-
-
-
-
532
548
163
39
1,282
25,841
315
104
26,260
(4,230)
Total capital raising and acquisition expenses
51
23,312
NOTE 8: DEPRECIATION AND AMORTISATION EXPENSE
Year ended 30 June
Office and computer equipment
Leasehold improvements
Intangible assets
Depreciation and amortisation expense
NOTE 9: NET FINANCIAL (REVENUE) / EXPENSE
Year ended 30 June
Interest expense
Interest income
Net financial (revenue) / expense
2019
($’000s)
2018
($’000s)
93
46
824
963
61
49
214
324
2019
($’000s)
2018
($’000s)
-
(100)
(100)
83
(40)
42
51
JANISON ANNUAL REPORT 2019 Notes to Financial
Statements
NOTE 10: INCOME TAXES
All calculations are subject to review by the ATO upon filing of the financial year 2019 tax return.
10.1 Components of Income Tax Expense
Year ended 30 June
Current tax expense
Deferred tax expense / (benefit)
Income Tax Expense
10.2 Reconciliation of Prima Facie Tax Expense to Income Tax Expense
Year ended 30 June
Profit (loss) before income tax
Tax rate
Prima facie tax (expense) benefit
Adjusted for:
Non-deductible research and development expenditure
Revaluation of deferred tax asset due to reduction in tax rate/Temporary timing differences
Over-provision of prior year taxes
Franking credit offset
Non-deductible acquisition costs
Permanent timing difference
Income tax expense
Income tax - foreign subsidiary
Total Income Tax Expense
10.3 Deferred Tax Assets and Liabilities
Year ended 30 June
Intellectual property valuation difference
Employee entitlements accrual
Leasehold improvements amortisation
Capital raising and acquisition transaction costs
Non-refundable R&D tax credit / franking credit offset
Other
Deferred Tax Asset
Client relationships acquired
Deferred Tax Liability
52
2019
($’000s)
2018
($’000s)
(86)
737
650
1,444
(648)
795
2019
($’000s)
2018
($’000s)
(632)
(21,083)
27.5%
30.0%
(174)
(6,325)
483
429
(78)
(30)
-
-
630
20
650
532
-
-
-
6,578
11
795
-
795
2019
($’000s)
2018
($’000s)
3,638
4,138
411
60
331
883
79
477
56
465
-
10
5,402
5,146
2,038
2,038
-
-
JANISON ANNUAL REPORT 2019 10.4 Income Tax (Payable) / Refund Receivable
Year ended 30 June
Income tax refund receivable - estimated R&D credit
Income tax - foreign subsidiary
Income tax payable - estimated current tax*
Franking deficit tax refund receivable against future tax profits
Income Tax (payable) refund receivable
* The income tax payable is the amount owed by LTC at the time of acquisition.
In 2018 the income tax receivable was recorded within Trade and other receivables.
NOTE 11: TRADE AND OTHER RECEIVABLES
Year ended 30 June
Trade receivables
Unbilled project revenue accruals
Income tax refund receivable (refer to Note 10.4)
Trade and other receivables
2019
($’000s)
2018
($’000s)
-
1,397
(20)
(504)
-
(525)
-
(1,444)
178
131
2019
($’000s)
2018
($’000s)
4,304
3,043
-
7,347
2,367
2,562
131
5,059
Unbilled project revenue relates to amounts accrued for the Group’s performance obligations under customer contracts in
accordance with AASB 15.
The aging of the Group’s trade and other receivables, net of bad debt provisions, at the reporting date is:
Year ended 30 June
Current*
Under 30 days
30-60 days
60-90 days
More than 90 days**
Total trade receivables
*LTC peak period of operations spans May and June which saw an increase in trade receivables of $1.6 million.
** Amounts of more than 90 days contains a long-standing client who has agreed to a repayment plan with the Group.
As at 30 June 2019 $1,153 thousand of the above trade receivables were past due but not impaired.
The directors believe that the above stated balances are fully recoverable.
2019
($'000s)
2018
($'000s)
3,151
1,699
198
565
69
321
320
210
42
97
4,304
2,367
53
JANISON ANNUAL REPORT 2019 Notes to Financial
Statements
NOTE 12: PLANT AND OTHER EQUIPMENT
Year ended 30 June
Historical cost
Assets acquired as part of business combination (Note 22)
Accumulated depreciation
Total Computer and Office Equipment
Historical cost
Accumulated depreciation
Total Leasehold Improvements
Historical cost
Accumulated depreciation
Total Motor Vehicles
Total plant and equipment
2018
($'000s)
Additions
($'000s)
Deductions
($'000s)
2019
($'000s)
548
-
(386)
162
701
(306)
395
-
-
-
557
80
131
(91)
120
-
(46)
(46)
13
(2)
11
85
(115)
-
106
(9)
-
-
-
-
-
-
514
131
(371)
274
701
(352)
349
13
(2)
11
(9)
633
54 JANISON ANNUAL REPORT 2019
55
JANISON ANNUAL REPORT 2019 Notes to Financial
Statements
NOTE 13: INTANGIBLE ASSETS
The roll-forward of intangible asset balances is presented below for the year ended 30 June 2019:
Year ended 30 June
Historical cost
Accumulated depreciation
Total Capitalised Software Costs
Historical cost / acquired as part of business combination
Accumulated depreciation
Total Other Intangibles
Historical cost
Impairment
Total Goodwill
2018
($’000s)
Additions
($’000s)
Deductions
($’000s)
2019
($’000s)
1,858
(73)
1,785
882
(402)
480
230
-
230
3,379
(239)
3,140
7,800
(585)
7,215
5,599
-
5,599
-
-
-
-
-
-
-
-
-
-
5,237
(312)
4,925
8,681
(987)
7,694
5,829
5,829
18,448
Total intangible assets
2,495
15,954
During financial year 2019, the Group capitalised $3.4 million of software development costs relating to new features to be
included in future versions of the Assessment and Learning platforms. Once in use these assets will be amortised over a three-
year period.
Other intangibles include identifiable intangibles related to the purchase of Latitude Learning Academy in financial year 2016 in
the amount of $650 thousand and purchased intellectual property acquired as a result of the purchase of the Ascender content
generation business as well as client relationships acquired when LTC was purchased in April 2019 (see Note 22).
Impairment testing for intangible assets
Intangible assets have been allocated to the following cash-generating units (‘CGUs’):
Year ended 30 June
CGU1: Assessment
CGU2: Learning
CGU3: LTC
Total intangible assets
2018
($’000s)
2019
($’000s)
1,523
972
-
4,199
1,240
13,009
2,495
18,448
1. The recoverable amount of each CGU is determined based on value-in-use calculations which require the use of
assumptions. The calculations use cash flow projections based on business plan approved by management covering a three
year period. Cash flows beyond the three year period are extrapolated using the estimated growth rates stated below. Pre-
tax discount rate: 10%.
2. Operating cash flow projections are extracted from the most recent approved strategic plans or forecasts that relate to
the existing asset base. For each CGU, the cash flow projections for a three-year period have been determined based
on expectations of future performance. Key assumptions in the cash flows include sales volume growth and the costs of
doing business. These assumptions are based on expectations of market demand and operational performance. Cash flow
projections are based on risk-adjusted forecasts allowing for estimated changed in the business, the competitive trading
environment, legislation and economic growth.
3. Terminal growth rate at 3%.
56
JANISON ANNUAL REPORT 2019 For the financial year ended 30 June 2019, the recoverable amount of net assets for all CGUs is greater than the carrying value
of the assets and therefore the goodwill and other intangible assets are not considered impaired.
Sensitivity
Management have made judgements and estimates in respect of impairment testing of goodwill. Should these judgements and
estimates not occur the resulting carrying amounts of assets may decrease.
For all CGUs, any reasonable change in the key assumptions (growth rate and discount rate) on which the recoverable amount
is based would not cause the CGU’s carrying amount to exceed its recoverable amount. At the point when the discount rate
increases to 24% or the growth rate falls by 10% the Assessment intangible assets would be impaired. Should the discount rate
increase to 144% or the growth rate fall by 20%, the Learning intangible assets would be impaired. If the discount rate increases
to 19% or the growth rates fall by 11%, the LTC client relationships will be impaired.
NOTE 14: TRADE AND OTHER PAYABLES
Year ended 30 June
Trade payables
Employee related and withholdings payable
Sundry accrued expenses*
Trade payables and other accruals
*LTC acquisition payable - see note 22
2019
($’000s)
2018
($’000s)
587
1,156
5,873
7,616
1,003
617
231
1,851
The Company has a $1 million bank over-draft facility with National Australia Bank that bears interest at a variable rate when drawn.
NOTE 15: EMPLOYEE ENTITLEMENTS ACCRUAL
Year ended 30 June
Current employee leave entitlements accrual
Non-Current employee leave entitlements accrual
2019
($’000s)
2018
($’000s)
1,271
107
940
71
NOTE 16: SHAREHOLDER LOANS
There are currently no outstanding shareholder loans, prior to the RTO in the 30 June 2018 financial year the company repaid all
outstanding shareholder loans to the value of $2.5million.
NOTE 17: DIVIDENDS
There were no dividends paid in the year ended 30 June 2019, prior to the RTO in the 30 June 2018 financial year the company
paid a dividend of $1million.
57
JANISON ANNUAL REPORT 2019 Notes to Financial
Statements
NOTE 18: SHARE CAPITAL AND RESERVES
The table below details the movements in share capital and reserves for the two years ended 30 June 2019:
Details
Balance
Date
1 July 2017
Elimination of shares upon acquisition
Share-based Acquisition payment
Share Conversion (3 JAN for 100 HJB)
Conversion Offer to HJB shareholders
Capital Raising
Employee Gift Offer Shares
Loan Funded Shares
Performance Rights
Nil Priced Options
Advisor Options and Rights
Foreign Currency Translation
Share Capital
Reserves
($’000s)
No. Shares
($’000s)
No. Units
880
-
89
(89)
24,500
81,666,667
-
9,356,304
315
1,050,001
9,343
33,333,333
66
219,978
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,400,000
175
5,400,000
-
-
-
-
263
4,500,000
171
946,676
38
2
240,000
-
Balance
1 July 2018
35,104 131,026,283
649
11,086,676
Capital raise: placement
4 October 2018
4,910
12,275,000
Share issue transaction costs, net of tax
4 October 2018
(231)
-
New shares issued to advisors & directors
13 December 2018
90
225,000
New shares issued to employees and advisors Various
Employee options exercised
11 March 2019
-
-
900,000
36,668
Capital raise: placement
29 March 2019
6,000
18,181,818
Share issue transaction costs, net of tax
29 March 2019
(324)
-
Share based acquisition payment for LTC
1 April 2019
2,000
6,060,606
Employee options exercised
3 June 2019
Loan Funded Shares
Performance Rights
Nil Priced Options
Foreign Currency Translation
Various
Various
-
-
-
-
-
-
-
46,667
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
393
1,050,000
794
800,000
104
9
-
-
Balance
30 June 2019
47,549 168,752,042
1,949
11,386,676
1 Reserves as at 30 June 2019 contains $1,941 thousand in share based premium reserves and $9 thousand in foreign currency
translation reserve.
58
JANISON ANNUAL REPORT 2019 18.1 Capital Raising and Acquisition transaction
In October 2018 the Group completed a $5m (before costs) capital raising via a share placement with new and existing
institutional shareholders and sophisticated investors. As a result, 12.275m new, fully-paid ordinary shares were issued at $0.40
per share. The proceeds of the capital raise were invested in the Group’s products and to support future growth in the higher
education sector.
On 1 April 2019 the Group completed the acquisition of LTC Hold Co Pty Limited and its subsidiary. The acquisition has been
accounted for under AASB 3 (Business Combinations) as a business combination. As required under AASB 3, management
fair valued the assets and liabilities acquired. As a result of this process a fair value of $7.8m has been ascribed to the client
relationships acquired. The booking of the $7.8m in client relationships resulted a deferred tax liability which will unwind in line
with the life of client relationships. The expected life of these assets is five years.
AASB 3 allows a measurement period after a business combination to provide the acquirer a reasonable time to obtain the
information necessary to identify and measure all of the various components of the business combinations as of the acquisition
date. The period cannot exceed one year.
To assist with the funding of this acquisition, the Group undertook a capital raising of $6m (before costs) in March 2019. The
capital raising took place via a share placement with new and existing institutional shareholders and sophisticated investors. As
a result, approximately 18.2m new, fully-paid ordinary shares were issued at $0.33 per share.
18.2 Share-based compensation
During the year ended 30 June 2019, share-based compensation was provided to Board members and employees as follows:
Loan Funded Shares are fully paid ordinary shares of the Group issued to board members and employees. The shares are
funded by way of a 5-year limited recourse, non-interest bearing loan from the Group. The shares are also subject to continuous
employment and a performance hurdle defined as the point at which the 5-day Volume Weighted Average Price (VWAP) of the
Group’s shares exceeds the amounts set out below for more than 30 days. The values ascribed below will be recorded to share-
based entitlements expense over 24 months or the actual vesting period, whichever is shorter.
Date Issued
14-Nov-18
19-Dec-18
3-Dec-18
Total
No. of Loan
Funded
Shares
Subscription
Price Per
Share
5-day VWAP
Performance
Hurdle
Expected
Volatility
Expected
Dividend
Yield
Risk Free
Interest Rate
Value
600,000
300,000
150,000
1,050,000
$0.45
$0.45
$0.45
$0.90
$0.60
$0.90
52%
57%
56%
-
-
-
2.34%
$107,288
2.08%
$55,939
2.27%
$28,057
$191,284
Performance Rights were issued to the Group’s board members and employees under a long-term incentive plan. Each
performance right provides a right to receive one fully paid share upon vesting. The grant price and exercise price for the
rights issued was nil. The market price of the shares on the date of grant is set out below. The performance rights are subject
to continuous employment and performance hurdles. The rights expire if unvested two years from the date of grant. The value
of the rights will be expensed to share-based entitlements expense over the 24 months vesting period or the actual vesting
period, whichever is shorter.
Date Issued
14-Nov-18*
19-Dec-18*
3-Dec-18**
Total
No. of
Performance
Rights
Share Price
on Date of
Issue
500,000
150,000
150,000
800,000
$0.42
$0.41
$0.40
Probability
Volatility
Value
60%
60%
60%
60%
NA
$124,500
NA
NA
$36,450
$36,000
NA
$196,950
*Vesting condition: Operational EBITDA for the Group exceeding the Board approved budget by 10% for the year ended 30 June 2019. These
performance rights vested in August 2019 but are yet to be converted to ordinary shares at the date of this report.
**Vesting condition: Operational EBITDA for the Group exceeding the Board approved budget by 10% for the year ended 30 June 2020.
59
JANISON ANNUAL REPORT 2019 Notes to Financial
Statements
During the year ended 30 June 2018, share-based compensation was provided to Board members, employees and advisors as
follows:
• Loan Funded Shares are fully paid ordinary shares of the Group issued to executive board members. The subscription price was
$0.30 (share price on date of grant) and was funded by way of a 5-year limited recourse, non-interest bearing loan from the Group.
The shares are subject to continuous employment and a performance hurdle defined as the point at which the 5-day Volume
Weighted Average Price (VWAP) of the Group’s shares exceeds $0.60 for more than 30 days. The shares have been valued at $629
thousand and will be recorded to share-based entitlements expense over 24 months or the actual vesting period, whichever is
shorter.
• Performance Rights were issued to the Group’s board members under a long-term incentive plan. Each performance right provides
a right to receive one fully paid share upon vesting. The grant price and exercise price for the rights issued was nil. The market
price of the shares on the date of grant was $0.30. The performance rights are subject to continuous employment and performance
hurdles. The rights expire if unvested two years from the date of grant. The rights are valued at $945 thousand and will be expensed
over to share-based entitlements expense over the 24 months vesting period or the actual vesting period, whichever is shorter.
• Nil Priced Options were issued to employees. The nil priced options were issued with a grant and exercise price of nil. The
share price on the date of grant was $0.30. The options are subject to continuous employment and vest on 21 December 2018. If
unexercised one year from the vesting date, the options expire. The options are valued at $312 thousand and will be amortised over
the 12-month vesting period.
• Advisor Options and Rights – Advisor options give the holder the right to subscribe for one share per option held. The options
have an exercise price of $0.30 per option (share price on the date of grant) and expire 3-years from the date of grant if unvested or
unexercised. The options are subject to a performance hurdle defined as the point at which the 5-day VWAP of the Group’s shares
exceeds $0.60 for more than 30 days.
Each advisor right represents the right to receive one fully paid share upon vesting. The grant price and exercise price for the
rights issued was nil. The advisor performance rights are subject to performance hurdles. The rights expire if unvested two
years from the date of grant.
The model inputs for the securities granted during the year ended 30 June 2018 included:
Expected price volatility:
Expected dividend yield
Risk free interest rate
Year ended 30 June
As of 1 July 2017
Average exercise price in dollars
Units granted during the year
Units exercised during the year
Units forfeited during the year
As of 1 July 2018
Average exercise price in dollars
Units granted during the year
Units exercised during the year
Units forfeited during the year
As of 30 June 2019
75%
-
1.94%
Advisor
Options &
Rights
-
$0.30
Loan Funded
Shares
Performance
Rights
Nil Priced
Options
-
$0.30
-
Nil
-
Nil
5,400,000
4,500,000
1,040,010
240,000
-
-
-
-
-
(93,334)
-
-
5,400,000
4,500,000
946,676
240,000
$0.32
Nil
1,050,000
800,000
Nil
-
-
-
5,150,000
103,336
-
-
Nil
-
-
-
6,450,000
150,000
946,676
240,000
Weighted average life of: loan funded shares = 3.59 years, Performance Rights = 0.65 years, Nil Priced Options = 1.48 years,
Advisor Options and Rights = 1.46 years.
60
JANISON ANNUAL REPORT 2019 NOTE 19: CONTINGENT LIABILITIES
There are no contingent liabilities as of 30 June 2019.
NOTE 20: KEY MANAGEMENT PERSONNEL DISCLOSURES
The following individuals were key management personnel of Janison Education Group during Financial Year 2019:
Mike Hill
Non-executive Chairman
Brett Chenoweth
Non-executive Director
David Willington
Non-executive Director
Allison Doorbar
Non-executive Director
Tom Richardson
Chief Executive Officer and Managing Director
Wayne Houlden
Commercial and Executive Director
Diane Fuscaldo
Chief Financial Officer (Resigned 12 April 2019)
Stuart Halls
Chief Financial Officer (Appointed 3 December 2018)
The aggregate compensation made to key management personnel during Financial Year 2019 is set out below:
Year ended 30 June
Short-term employee benefits
Share-based payments
Total compensation
2019
($’000s)
2018(1)
($’000s)
1,334
1,094
2,361
968
637
1,605
(1) Includes amounts paid prior to RTO which are excluded from the remuneration report.
Detailed disclosures relating to the key management personnel can be found in the Remuneration Report section of the
Director’s Report.
NOTE 21: RELATED PARTY TRANSACTIONS
On 15 September 2011, the Company entered into a 5 year lease for its Coffs Harbour office facility with Houlden Properties,
Ltd., owned by Wayne and Jacquie Houlden, (Wayne Houlden is a current executive Director). The lease was renewed in 2016
for an additional 7-year period with an option to renew for a further 7 year period. During financial year 2019, the Company paid
$233 thousand, ($220 thousand in financial year 2018) as rent under the terms of the contract. The rental fees under the contract
were established on the basis of a rental appraisal.
The Company sources content to service some of its Learning Division customers from Execast Pty. Ltd., a company wholly
owned by Thomas Richardson, the Company’s CEO and executive director.
During financial year 2019, the Company incurred $40 thousand in licence fees to Execast Pty. Ltd for content ($69 thousand in
financial year 2018).
The Group engages with the company EduWorld Pty Ltd, owned by Allison Doorbar, a Non-Executive Director of the Company,
for consulting and strategic services. During the financial year 2019, the Company incurred $5,500 in consulting services from
EduWorld Pty Ltd (nil in financial year 2018).
61
JANISON ANNUAL REPORT 2019 Notes to Financial
Statements
NOTE 22: ACQUISITIONS
On 1 April 2019, Janison Education Group Limited, acquired 100% of the ordinary shares of LTC Holdco Pty Ltd (the parent
entity of Language and Testing Consultants Pty Ltd “LTC”) for the total consideration of $11,890,767. LTC is an exams
management business providing invigilation services to Australian and international universities and professional associations.
AASB 3 Business Combinations allows a measurement period for business combinations to provide the acquirer a reasonable time
to obtain the information necessary to identify and measure all the various components of the business combination as of acquisition
date. As at the 30 June 2019 the acquisition accounting for the earn out element of the total consideration remains provisional.
Details of the acquisition are as follows:
Cash and cash equivalents
Trade receivables
Other assets
Property Plant and Equipment
Client Relationships
Trade and other payables
Deferred Tax Liability
Net assets acquired
Goodwill
Acquisition-date fair value of the total consideration transferred
Representing:
Cash paid to vendor
Shares of the Group issued to vendor
Deferred payment
Estimated Earn-out payment
Total
Acquisition costs expensed to profit or loss
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
Less: shares issued by the Group as part of consideration
Less: deferred and earn out consideration
Net cash used
62
Fair value
$’000
129
1,257
118
140
7,800
(502)
(2,145)
6,797
5,094
11,891
$’000
4,985
2,000
1,575
3,331
11,891
51
$’000
11,891
(2,000)
(4,906)
4,985
JANISON ANNUAL REPORT 2019 NOTE 23: LEASE COMMITMENTS
Year ended 30 June
Within one year
One to five years
After five years
Total lease commitments
2019
($’000s)
2018
($’000s)
440
710
-
208
832
-
1,150
1,040
As of June 2019 the above commitments related to leases for buildings located at 394A Harbour Drive, Coffs Harbour NSW 2450,
and Wentworth Park Sporting Complex, Level 3 Wentworth Park Rd, Glebe NSW 2037.
NOTE 24: FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to several financial risks as described below. The Group’s overall risk management program
seeks to minimise potential adverse effects on the financial performance of the Group. To date, the Group has not had the need
to utilise derivative financial instruments such as foreign exchange contracts or interest rate swaps to manage any risk exposures
identified.
The totals for each category of financial instruments, measured in accordance with AASB 139 Financial Instruments as detailed
in the accounting policies to these financial statements, are as follows:
Year ended 30 June
Cash and cash equivalents
Trade and other receivables
Pre-paid expenses
Total Financial Assets
Trade and other accruals
Total Financial Liabilities
Net Financial Assets
Year ended 30 June
Cash and cash equivalents
Trade and other receivables
Pre-paid expenses
Total Financial Assets
Trade and other accruals
Total Financial Liabilities
Net Financial Assets
Interest Rate
Floating
Interest
($’000s)
Fixed
Interest
($’000s)
Non-interest
Bearing
($’000s)
2019 Total
($’000s)
1.5%
6,025
-
-
6,025
-
-
6,025
-
-
-
-
(1,500)
(1,500)
(1,500)
-
7,347
629
7,975
(6,116)
(6,116)
1,860
6,025
7,347
629
14,001
(7,616)
(7,616)
6,385
Interest Rate
Floating
Interest
($’000s)
Fixed
Interest
($’000s)
Non-interest
Bearing
($’000s)
2018 Total
($’000s)
1.1%
3,466
-
-
3,466
-
-
3,466
-
-
-
-
-
-
-
153
5,059
648
5,860
(1,851)
3,619
5,059
648
9,326
(1,851)
(1,851)
(1,851)
4,009
7,475
The fair value of financial assets and liabilities equate to their carrying value.
63
JANISON ANNUAL REPORT 2019 Notes to Financial
Statements
24.1 Credit risk
The maximum exposure to credit risk by class of recognised financial assets at the end of the reporting period is equivalent to
the carrying value and classification of those financial assets (net of any provisions) as presented in the table above.
Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Group’s receivables from customers.
Credit risk related to balances with banks and other financial institutions is managed by management in accordance with
approved Board policy.
24.2 TRADE AND OTHER RECEIVABLES
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However,
management also considers the factors that may influence the credit risk of its customer base, including the default risk of the
industry and country in which customers operate. Refer to the table below for the concentration of revenue.
During FY19, the number of Group clients increased by 52 as a result, customer concentration has improved. The three largest
clients in FY19 represent 31% of the total revenue (when annualising LTC revenue).
Trade and other receivables (refer to Note 11) that are neither past due nor impaired are considered to be of high credit quality:
Year ended 30 June
Australia
United Kingdom
Singapore
New Zealand
Other
Total
24.3 Market risk
2019
($’000s)
2018
($’000s)
4,723
105
1,917
158
444
2,911
157
1,918
63
10
7,347
5,059
Foreign exchange risk
The Group is exposed to material foreign exchange risk due to debtors with overseas clients and customers as presented in the
table above. The Group also incurs expenses and regularly purchases services denominated in US dollars, Singaporean dollars
and New Zealand dollars. As of 30 June 2019, the Group had $272 thousand dollars outstanding in trade payables denominated
in US dollars.
As at 30 June 2019 the Group held $1,194 thousand in a Singaporean dollar bank account.
64
JANISON ANNUAL REPORT 2019 24.4 Liquidity risk
The liquidity position of the Group is managed to ensure sufficient liquid funds are available to meet the Group’s expected
financial commitments in a timely and cost effective manner.
The Group manages this risk through the following mechanisms:
• preparing forward-looking cash flow analysis in relation to its operational, investing and financing activities;
• managing credit risk related to financial assets; and
• only investing surplus cash with major financial institutions.
The material liquidity risk for the Group is the ability to raise equity or debt financing in the future. As of 30 June 2019, Financial
Liabilities and their maturities were as follows:
Year ended 30 June 2019
Trade and other payables
Other liabilities
Non-Interest Bearing:
Loan and borrowings
Total Interest Bearing:
Total Non-Derivatives
Rate* 1 year or less
Between 2
and 5 years
-
-
-
-
-
-
7,816(1)
-
7,816
-
-
7,816
-
-
-
-
-
-
(1) Includes a deferred consideration and earn out payable for the purchase of LTC of $5 million.
Year ended 30 June 2018
Trade and other payables
Other liabilities
Non-Interest Bearing:
Loans and borrowings
Total Interest Bearing:
Total Non-Derivatives
* Weighted Average Interest Rate.
Rate* 1 year or less
Between 2
and 5 years
-
-
-
-
-
-
1,851
-
1,851
-
-
1,851
-
-
-
-
-
-
Total
7,816
-
7,816
-
-
7,816
Total
1,851
-
1,851
-
-
1,851
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
24.5 Interest rate risk
The Group’s main interest rate risk arises from cash and cash equivalents. The Group’s exposure to interest rate risk, which is
the risk that a financial instrument’s value will fluctuate as a result of changes in market rates and the effective weighted average
interest rates on financial liabilities is not material.
65
JANISON ANNUAL REPORT 2019 Notes to Financial
Statements
NOTE 25: PARENT ENTITY DISCLOSURES
The parent entity has no contingent liabilities nor has it entered into guarantees with subsidiaries.
Year ended 30 June
Result of parent entity
Loss for the year
Total Comprehensive Loss for the year
Adjusted for:
Current Assets
Non current Assets
Total Assets
Current liabilities
Total Liabilities
Total net assets of the parent entity
Share capital
Reserves
Accumulated losses
Total Equity
2019
($’000s)
2018
($’000s)
-
-
(2,267)
(2,267)
(28,737)
(28,737)
2,746
22,357
25,103
7,214
7,214
17,889
75,573
2,026
1,914
4,590
6,504
85
85
6,419
63,128
734
(59,710)
(57,443)
17,889
6,419
The parent company had no guarantees, contingent liabilities or commitments other than what was disclosed in Notes 19 and 23.
NOTE 26: INTERESTS IN SUBSIDIARIES
Janison Education Group Limited is the legal head of the consolidated group. Janison Education Group owns 100% of Janison
Solutions Pty Ltd, LTC Holdco and LTC Language & Testing Consultants Pty Ltd.
Janison Solutions Pty Ltd has a 50% equity interest in Janison Asia Pte. Ltd. incorporated in Singapore. Janison Solutions has a
beneficial 100% interest in the subsidiary therefore no minority interest existed as of 30 June 2019 or 2018.
NOTE 27: AUDITOR’S REMUNERATION
Stantons International performed the audit of the financial statements for the years ended 30 June 2019 and 2018.
Remuneration paid or to be paid to the Company’s auditors with respect to the Financial Year 2019 audit and review of the
financial statements was $73 thousand ($66 thousand in Financial Year 2018). Remuneration for non-audit services with respect
to Financial Year 2019 was Nil ($29,143 in Financial Year 2018).
66
JANISON ANNUAL REPORT 2019 NOTE 28: RECONCILIATION OF NET (LOSS) INCOME TO OPERATING CASH FLOWS
The following table reconciles cash flow from Operations as reported on the Statement of Cash Flows to the Net Income (Loss):
Year ended 30 June
Net loss after tax
Depreciation and amortisation
Losses on disposal of plant and equipment
Non-cash deferred tax benefit
Capital raisings
Cash-based transaction costs reported as investing activities
Non-cash share-based compensation post-acquisition
Total operating items not requiring cash outlays
Trade receivables and other
Pre-paid expenses
Trade payables and accruals
Employee entitlements accrual
Income in advance
Deferred tax
Income tax
Other
Changes in working capital items
Net cash provided by operating activities
2019
($’000s)
2018
($’000s)
(1,283)
(21,878)
963
9
-
-
51
1,292
2,315
(650)
196
(14)
71
(198)
(363)
151
46
(762)
270
324
17
26,260
(4,230)
1,282
611
24,265
(1,874)
(170)
1,015
23
84
(648)
-
27
(1,543)
842
Non-cash financing and investing activities: during the year the Company issued $2.0 million in shares as part of the acquisition
of LTC.
NOTE 29: EARNINGS PER SHARE
Year ended 30 June
Loss after income tax
Weighted average number of ordinary shares used in calculating basic loss per share
Basic loss per share
2019
($’000s)
2018
($’000s)
(1,283)
(21,878)
Number
‘000s
146,252
Cents
(0.88)
Number
‘000s
87,245
Cents
(25.08)
The group is in a loss position therefore the share-based incentive plans do not affect the diluted earnings per share calculation
as potential ordinary shares will be treated as dilutive when, and only when, their conversion to ordinary shares would decrease
earnings per share or increase loss per share from continuing operations.
NOTE 30: EVENTS AFTER THE REPORTING DATE
There have been no significant events between the balance sheet date and the date these financial statements were authorised for issue.
67
JANISON ANNUAL REPORT 2019 Directors’
Declaration
In accordance with a resolution of the Directors of Janison Education Group Limited, I state that:
1. In the directors’ opinion:
a) the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporate Regulations 2001 and other mandatory professional reporting requirements;
i. the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 1.3 to the financial statements; and
ii. the attached financial statements and notes give a true and fair view of the Group’s financial position as at 30 June 2019
and of its performance for the financial year ended on that date; and.
2. There are reasonable grounds to believe that the Company will be able to pay its debts as when they become due and
payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
Tom Richardson
Chief Executive Officer and Director
Dated: 22 August 2019
68
JANISON ANNUAL REPORT 2019 Auditor’s Independence
Declaration
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
22 August 2019
Board of Directors
Janison Education Group Limited
C/ Level 5,126 Philip Street
Sydney NSW 2000
Dear Directors
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Level 2, 22 Pitt Street
Sydney, NSW 2000
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
RE:
JANISON EDUCTION GROUP LIMITED
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of Janison Education Group Limited.
As Audit Director for the audit of the financial statements of Janison Education Group Limited for the year
ended 30 June 2019, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
Yours sincerely
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Samir Tirodkar
Director
Liability limited by a scheme approved
under Professional Standards Legislation
69
JANISON ANNUAL REPORT 2019
Independent Auditor’s
Report
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
JANISON EDUCATION GROUP LIMITED
Report on the Audit of the Financial Report
Opinion
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Level 2, 22 Pitt Street
Sydney NSW 2000
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
We have audited the financial report of Janison Education Group Limited (“the Company”) and its subsidiaries (“the
Group”), which comprises the consolidated statement of financial position as at 30 June 2019, 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:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its financial
performance for the year then ended; and
(ii)
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 Company 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Liability limited by a scheme approved
under Professional Standards Legislation
70
JANISON ANNUAL REPORT 2019
Key Audit Matters
We have determined the matters described below to be Key Audit Matters to be communicated in our report.
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 Matters
How the matter was addressed in the audit
Carrying Value of Intangible Assets
As at 30 June 2019, Intangible Assets totalled
$18,448,000 (refer to Note 13 of the financial
report).
The carrying value of Intangible Assets is a key
audit matter due to:
The significance of the Intangible Assets
representing 48% of total assets;
to assess management’s
The necessity
application of
the
requirements of
the
accounting standards, in light of any indicators
of impairment that may be present; and
The assessment of significant judgements
made by management in relation to the
internally generated assets.
Inter alia, our audit procedures
following:
included
the
i.
ii.
iii.
We evaluated the Group’s accounting
policy and compliance with AASB 138
(Intangible Assets);
Vouched a sample of the expenses
capitalised to supporting documentation
and ensured appropriate to capitalise;
Requested the Group complete an
impairment review in line with AASB
138 and Impairment of Assets (AASB
136), reviewed their assumptions for
reasonableness and satisfied ourselves
that no impairment was necessary; and
iv.
Reviewed the disclosures included in
the annual report.
71
JANISON ANNUAL REPORT 2019
Independent Auditor’s
Report
Key Audit Matters
How the matter was addressed in the audit
Inter alia, our audit procedures
following:
included
the
i. Examining the contract for the acquisition of
LTC Hold Co Pty Ltd;
ii. Reviewing and assessing the determination
made by
the
transaction is an asset acquisition or a business
combination;
the Group as
to whether
iii. Assessing the fair value of consideration paid
for the acquisition of LTC Hold Co Pty Ltd;
iv. Assessing the fair value of the net assets
acquired of LTC Hold Co Pty Ltd (including
Language & Testing
subsidiary
Consultants Pty Limited) as at the date of
acquisition together with the resultant goodwill;
and
LTC
v. Considering the adequacy of the financial
report disclosures contained in Note 22 in
relation to AASB 3.
Inter alia, our audit procedures
following:
included
the
i. Discussion with the Group’s tax advisors and
review of the Group’s taxation schedules;
ii. Ensuring that Deferred Tax liability arising
recent business combination
the
from
accounted for correctly.
iii. Reviewed
the Group’s compliance with
AASB 112 (Income Taxes) including an
assessment of the recovery of the deferred
tax assets; and
iv. We reviewed the disclosures included in the
they were
report and whether
annual
appropriate.
Business Combination – Acquisition of LTC
Holdco Pty Ltd.
During the year, the Company acquired 100% of the
issued capital of LTC Hold Co Pty Ltd which holds
a 100% interest in LTC Language & Testing
Consultants Pty Limited.
The acquisition has been disclosed in Note 22 to the
financial report and was considered a key audit
matter due to:
The significance of the transaction; and
The judgement required in the application
of
the Accounting Standard AASB 3
Business Combinations (“AASB 3”).
if
the
AASB 3 Business Combinations required the Group
to determine,
is an asset
acquisition or a business combination and the fair
value of considerations
the
identifiable assets and liabilities acquired as part of
the acquisition.
transferred and
transaction
Taxation
At 30 June 2019 the Group had Deferred tax assets
of $5.4m and Deferred tax liabilities of $2m. These
are significant balances.
This area is a key audit matter due to the inherent
subjectivity that is involved in the Group making
judgements in relation to the ultimate recovery of
deferred tax assets.
72
JANISON ANNUAL REPORT 2019
Key Audit Matters
How the matter was addressed in the audit
Revenue Recognition
Revenue recognition is a key audit matter due to the
material amounts and significant audit effort
required by us.
to
the
into and
address
unique
the
These
included,
individualised contract
circumstances of
arrangements
the
the Group enters
complexities associated with unbundling single
service contracts with a customer for multiple
services. The significance of
the Group’s
judgements relating to the point in time at which
revenue is recorded, in particular those relating to
the satisfaction of performance obligations and
transfer of control of assets.
Inter alia, our audit procedures
following:
included
the
i. We assessed
the Group’s
revenue
recognition policy against the requirements
of AASB 15 (Revenue from Contracts with
Customers) which the Group has early
adopted in prior years;
ii. We tested a sample of significant customer
contracts and read the terms and conditions
of sale
features
distinguishing the revenue elements vis.
performance obligations and
revenue
recognition,
to understand
the
We focused on these revenue items as a key audit
matter due to these conditions leading to increased
risk of incorrect revenue recognition.
iii. We
obtained management’s written
assessments and discussed with
the
management about the compliance of the
performance obligations and
revenue
recognition within these significant contracts
including accrued and deferred revenue.
Other Information
The directors are responsible for the other information. The other information comprises the information included in
the Group’s annual report for the year ended 30 June 2019, 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 opinion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true and
fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the 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.
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JANISON ANNUAL REPORT 2019
Independent Auditor’s
Report
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 Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the financial report.
The procedures selected depend on the auditor's judgement, including the assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation of the financial report that gives a true and fair view in
order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity's internal control.
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.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.
We 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.
We 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.
We 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.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements.
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 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.
74
JANISON ANNUAL REPORT 2019
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 22 to 36 of the directors’ report for the year ended 30
June 2019.
In our opinion, the Remuneration Report of Janison Education Group Limited for the year ended 30 June 2019
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.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Samir Tirodkar
Director
West Perth, Western Australia
22 August 2019
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JANISON ANNUAL REPORT 2019
Additional
Information
NUMBER OF HOLDERS
As at 14 August 2019
Number of Holders of Equity Securities - Ordinary Shares: 131,026,290 fully paid ordinary shares held by 701
individual shareholders.
Unquoted Securities
There are 64 holders of 1,570,840 unquoted options.
There are 9 holders of 5,450,000 performance rights.
DISTRIBUTION OF FULLY PAID ORDINARY SHAREHOLDERS
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 9,999,999,999
Total
Unmarketable Parcels
SUBSTANTIAL HOLDERS
Name
DIPTOE PTY LTD
TENTICKLES PTY LTD
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
No. of Holders
of Fully Paid
Ordinary Shares
No. of Holders of
Options
No. of Holders
of Performance
Rights
206
147
59
262
68
742
224
-
-
35
23
5
63
-
-
-
-
-
8
8
-
Shares
% of Issued
Capital
33,033,708
33,033,708
25,266,115
14,346,720
8,438,571
19.57
19.57
14.97
8.50
5.00
76
JANISON ANNUAL REPORT 2019 Additional
Information
TOP 20 HOLDERS
As at 14 August 2019
Rank
Name
1
1
2
3
4
5
6
7
8
9
10
11
11
12
13
14
15
15
15
16
17
18
19
20
DIPTOE PTY LTD
TENTICKLES PTY LTD
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
LENROC INVESTMENTS PTY LIMITED
LENROC INVESTMENTS PTY LIMITED
CASSOWARY NO1 PTY LTD
THOMAS RICHARDSON
BREBEC PTY LTD
GINGA PTY LTD
LENROC INVESTMENTS PTY LIMITED
LENROC INVESTMENTS PTY LIMITED
WAYNE HOULDEN
BNP PARIBAS NOMINEES PTY LTD
JARUMITO PTY LIMITED
DAVID WILLINGTON
MR WILLIAM JOHN LAUKKA & MRS ELIZABETH ANNE LAUKKA
MS ALLISON DOORBAR
MR WILLIAM JOHN LAUKKA & MRS ELIZABETH ANNE LAUKKA
BNP PARIBAS NOMINEES PTY LTD
DMX CAPITAL PARTNERS LIMITED
UNITED EQUITY PARTNERS PTY LTD
HOLLOWAY COVE PTY LTD
Total
Balance of Register
Grand total
14 Aug 19
33,033,708
33,033,708
25,266,115
14,346,720
8,438,571
6,338,952
6,338,951
5,943,614
2,400,000
1,584,875
1,556,060
1,460,674
% of Issued
Capital
19.57
19.57
14.97
8.50
5.00
3.76
3.76
3.52
1.42
0.94
0.92
0.87
1,460,674
0.87
1,200,000
950,000
866,762
600,000
0.71
0.56
0.51
0.36
600,000
0.36
600,000
0.36
577,397
0.34
512,204
487,689
458,630
450,000
148,505,304
20,253,412
0.30
0.29
0.27
0.27
88.00
12.00
168,758,716
100.00
77
JANISON ANNUAL REPORT 2019 78 JANISON ANNUAL REPORT 2019
JANISON ANNUAL REPORT 2019
79
www.janison.com