Annual Report
for the year ended 30 June 2015
Pioneer Credit Limited ABN 44
Pioneer Credit Limited ABN 44 103103103103 003003003003 505505505505
Pioneer Credit Limited ABN 44
Pioneer Credit Limited ABN 44
30 June 2015
Annual Report ---- 30 June 2015
Annual Report
30 June 2015
30 June 2015
Annual Report
Annual Report
with the ASX under Listing Rule 4.3A.
Lodged with the ASX under Listing Rule 4.3A.
Lodged
with the ASX under Listing Rule 4.3A.
with the ASX under Listing Rule 4.3A.
Lodged
Lodged
Contents
Contents
Contents
Contents
Results for announcement to the market
Financial Statements
i
33
These financial statements are the consolidated financial statements of the Consolidated Entity consisting
of Pioneer Credit Limited and its subsidiaries. The financial statements are presented in the Australian
currency.
Pioneer Credit Limited is a Company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business is:
Pioneer Credit Limited
Level 6, 108 St Georges Terrace
Perth WA 6000
A description of the nature of the Consolidated Entity's operations and its principal activities is included in
the review of operations and activities on page 3 of the Annual Report and in the Directors' report on
page 10 of the Annual Report, both of which are not part of these financial statements.
The financial statements were authorised for issue by the Directors on 20 August 2015. The Directors
have the power to amend and reissue the financial statements.
Pioneer
ABN 44 103 003 505
Credit Limited ABN 44 103 003 505
Pioneer Credit Limited
ABN 44 103 003 505
ABN 44 103 003 505
Credit Limited
Credit Limited
Pioneer
Pioneer
Appendix 4E
Appendix 4E
Appendix 4E
Appendix 4E
Preliminary Final Report
Preliminary Final Report
Preliminary Final Report
Preliminary Final Report
for the year ended 30 June 2015
for the year ended 30 June 2015
for the year ended 30 June 2015
for the year ended 30 June 2015
(previous corresponding period 30 June 2014)
(previous corresponding period 30 June 2014)
(previous corresponding period 30 June 2014)
(previous corresponding period 30 June 2014)
Results for announcement to the market
Results for announcement to the market
Results for announcement to the market
Results for announcement to the market
Key information
Key information
Key information
Key information
Revenue from ordinary activities
Net profit after taxation for the period attributable
to members
Operating profit after taxation *
30 June
30 June
30 June
30 June
2015
2015
2015
2015
$’000
$’000
$’000
$’000
38,788
7,441
30 June
30 June
30 June
30 June
2014201420142014
$’000
$’000
$’000
$’000
25,761
1,047
Change
Change
Change
Change
$’000
$’000
$’000
$’000
13,027
6,394
%%%%
51%
611%
7,808
4,587
3,221
70%
*
Operating profit after taxation is a financial measure which is not prescribed by Australian Accounting Standards (“AAS”)
and represents the profit under AAS adjusted for specific non-cash and significant items.
/ distributions
Dividends per ordinary share / distributions
Dividends per ordinary share
/ distributions
/ distributions
Dividends per ordinary share
Dividends per ordinary share
Final 2014 ordinary
Interim 2015 ordinary
Final 2015 ordinary
Amount per
Amount per
Amount per
Amount per
(cents)
security (cents)
security
(cents)
(cents)
security
security
3.10
1.75
6.80
Franked
Franked
Franked
Franked
Amount per
Amount per
Amount per
Amount per
security
security
security
security
100%
100%
100%
Record Date
Record Date
Record Date
Record Date
30/09/2014
31/03/2015
30/09/2015
/ Payable
PaidPaidPaidPaid / Payable
/ Payable
/ Payable
DateDateDateDate
17/10/2014
17/04/2015
30/10/2015
There is no provision for a final dividend in respect of the year ended 30 June 2015. Provisions for
dividends to be paid by the Company are recognised in the Consolidated Balance Sheet as a liability and a
reduction in retained earnings when the dividend has been declared.
Full commentary on the figures presented above and on the results for the period and other significant
information is provided in the 2015 Media Release and Results Presentation and Consolidated Financial
Statements - 30 June 2015, released today.
Included in the Consolidated Financial Statements - 30 June 2015 released today are the following;
• Consolidated Statement of Comprehensive Income together with notes to the statement
• Consolidated Balance Sheet together with notes to the balance sheet
• Consolidated Statement of Changes in Equity, showing movements
• Consolidated Statement of Cash Flows together with notes to the statement
Key Ratios
Key Ratios
Key Ratios
Key Ratios
Net tangible assets per fully paid ordinary share
Basic Earnings per fully paid ordinary share
30 June 2015
30 June 2015
30 June 2015
30 June 2015
(cents)
(cents)
(cents)
(cents)
115.69
16.40
30 June 2014
30 June 2014
30 June 2014
30 June 2014
(cents)
(cents)
(cents)
(cents)
104.55
7.97
The Consolidated Financial Statements at 30 June 2015 and accompanying notes for Pioneer Credit
Limited have been audited and are not subject to any qualifications. The Independent Auditor's Report has
been provided with the Statements released today.
i
Pioneer Credit Limited ABN 44 103 003 505
Pioneer Credit Limited ABN 44 103 003 505
Pioneer Credit Limited ABN 44 103 003 505
Pioneer Credit Limited ABN 44 103 003 505
Annual Report
Annual Report
Annual Report
Annual Report
for the year ended 30 June 2015
for the year ended 30 June 2015
for the year ended 30 June 2015
for the year ended 30 June 2015
Contents
Contents
Contents
Contents
Corporate Directory
Review of operations and activities
Directors’ report
Corporate Governance Statement
Financial Statements
Independent auditor’s report to the members
Shareholder information
2
3
10
32
33
95
97
Corporate Directory
Corporate Directory
Corporate Directory
Corporate Directory
Directors
Mr Michael Smith (Chairperson)
Mr Keith John
Mr Rob Bransby
Mr Mark Dutton
Ms Anne Templeman-Jones (appointed 23 September 2014)
Company Secretary
Mr Leslie Crockett
Notice of annual general meeting
The annual general meeting of Pioneer Credit Limited
will be held at 11am on Thursday 29 October 2015
K&L Gates
Level 32
44 St Georges Terrace
Perth WA 6000
Principal registered office in Australia
Share register
Auditor
Solicitors
Bankers
Level 6
108 St Georges Terrace
Perth WA 6000
Link Market Services Limited
Ground Floor
178 St Georges Terrace
Perth WA 6000
+61 1300 554 474
PricewaterhouseCoopers
Brookfield Place
125 St Georges Terrace
Perth WA 6000
+61 8 9238 3000
K&L Gates
Level 32
44 St Georges Terrace
Perth WA 6000
+61 8 9216 0900
BankWest
Level 12B BankWest Place
300 Murray Street
Perth WA 6000
+61 8 9369 6952
Stock exchange listings
Pioneer Credit Limited shares are listed on the
Australian Securities Exchange (ASX).
Website
www.pioneercredit.com.au
Pioneer Credit Limited
30 June 2015
Page 2
operations and activities
Review of operations and activities
Review of
operations and activities
operations and activities
Review of
Review of
Pioneer Credit has had a very successful first full year of trading on the Australian Securities Exchange
since listing in May 2014.
As well as achieving growth and strong financial results, the Company has made significant progress in
preparing for the next phase in its development, readying for the launch of new products during FY16.
The listing advanced a range of opportunities for the Company, as a result of the raising of additional
capital that has facilitated the continued growth of the business. The capital enabled the Company to
expand its core business through an increased investment in debt portfolios as well as providing the
financial strength required to properly grow our customer service and administrative teams and to secure
additional office premises in order to accommodate that growth.
As a result of the investments made during the year, the Board is pleased to report an operating profit
after taxation that out-performed the Company’s Prospectus forecast by 18.3%.
Operating and financial review
Operating and financial review
Operating and financial review
Operating and financial review
The statutory net profit after taxation for the year ended 30 June 2015 was $7.441m (2014: $1.047m). The
operating profit after taxation was $7.808 m (2014: $4.587m).
Operating profit after taxation is a financial measure which is not prescribed by Australian Accounting
Standards (“AAS”) and represents the profit after taxation under AAS adjusted for specific non-cash and
significant items.
The Directors consider operating profit after taxation to reflect the core earnings of the Group.
The following table summarises the key reconciling items between statutory profit after taxation and
operating profit after taxation.
The operating profit after taxation information in the table has not been subject to any specific audit
procedures by the Group’s auditor and has been extracted from the notes referenced below from the
accompanying financial statements for the year ended 30 June 2015, which have been subject to an
audit; refer to page 95 for the auditor’s opinion on the financial statements.
Key information
Key information
Key information
Key information
Financial
Financial
Financial
Financial
Statement
Statement
Statement
Statement
NoteNoteNoteNote
30 June
30 June
30 June
30 June
2015
2015
2015
2015
$’000
$’000
$’000
$’000
30 June
30 June
30 June
30 June
2014
2014
20142014
$’000
$’000
$’000
$’000
attributable to the owners
ation attributable to the owners
Statutory profit after taxation
Statutory profit after tax
attributable to the owners
attributable to the owners
ation
ation
Statutory profit after tax
Statutory profit after tax
7,441
1,047
cash and significant items:
Specific non----cash and significant items:
Specific non
cash and significant items:
cash and significant items:
Specific non
Specific non
Finalisation of indirect taxation, relating to prior years
Costs associated with the IPO charged to the consolidated statement
of comprehensive income
Share based payment expense arising on modification of share based
payment arrangement under the pre-IPO equity structure
Interest on preference shares incurred while classified as borrowings
under the pre-IPO equity structure
Correction of income taxation relating to prior years
Finalisation of settlement of pre-IPO commercial claim
Tax effect:
Tax effect:
Tax effect:
Tax effect:
Tax effect on the adjustments outlined above that are deductable for
income tax purposes
after taxation
Operating profit after taxation
Operating profit
after taxation
after taxation
Operating profit
Operating profit
4
4
5
5
6
4
355
-
-
-
(8)
181
312
2,058
744
520
175
648
(161)
(917)
7,808
7,808
7,808
7,808
4,587
4,587
4,587
4,587
Pioneer Credit Limited
30 June 2015
Page 3
Review of operations and activities
Review of operations and activities
Review of operations and activities
Review of operations and activities
Key financial highlights for the year ended 30 June 2015
Key financial highlights for the year ended 30 June 2015
Key financial highlights for the year ended 30 June 2015
Key financial highlights for the year ended 30 June 2015
• Cash receipts of $55.6m (2014 $35.8m) an increase of 55.5% over prior period equivalent
•
Statutory net profit after taxation of $7.441m (2014 $1.047m) 12.7% up on Prospectus forecast of
$6.600m
• Operating profit after taxation of $7.808m (2014 $4.587m) 18.3% up on Prospectus forecast
• Operating EBIT of $12.076m (2014 $ 7.282m) 65.8% up on prior year
• Operating EBIT margin of 31.2% (2014 28.3%)
• Underlying Earnings per share of 17.21 cents 70.2% over the prior period equivalent
• Net tangible assets per share 115.69c 10.7% over the prior period equivalent
• Operating cash flow of $28.176m (2014 $13.642m) 106.5% over the prior period equivalent
Capital Management
Capital Management
Capital Management
Capital Management
There were no changes to contributed equity during the year.
The Group paid a dividend for the first half of the financial year of 1.75 cents per share. A final dividend of
6.80 cents per share has been declared with a record date of 30 September 2015, to be paid on
30 October 2015.
The Group has also today announced the introduction of a dividend reinvestment plan to provide
shareholders the opportunity to reinvest their dividends into the continued growth of the Group.
The Group aims to optimise its capital structure in a conservative manner. All facility covenants were met
throughout the year. At 30 June 2015 the Group had a loan to portfolio asset value ratio of 36.6%
compared to the covenant of 45%.
The undrawn limit on the senior debt facility was $18.791m and the overdraft facility was unused at
30 June 2015.
Customer Payments and Financial Performance
Customer Payments and Financial Performance
Customer Payments and Financial Performance
Customer Payments and Financial Performance
Underlying Pioneer’s Prospectus forecast (which includes the period ended 30 June 2015) was an
18 month performance period projected using a range of assumptions developed in early 2014.
The nature of Pioneer Credit’s business means the Company has a high degree of visibility of its expected
financial performance and through the Prospectus period it anticipated a range of initiatives which would
contribute to the level of future customer payments.
Consistent with Pioneer Credit’s long-standing approach of working towards a complete understanding
of the characteristics of the customer portfolios we purchase, and to ensure we manage and realise the
appropriate value from those portfolios, Pioneer in FY15 commenced exploration of the secondary sale
market. Pioneer has always seen the potential in this secondary sale market and has provided
shareholders with a high degree of disclosure on the contribution of portfolio sales to the Company’s
overall performance.
The first successful sale (a small test of the market process and strength) was concluded in December
2014 and during the second half of FY15, Pioneer completed a further two successful sales of portfolios
of customer accounts, generating cash in excess of $3.5m. The portfolio sales conducted are significant
to Pioneer and we anticipate similar portfolio sales will be a regular feature of the Company’s operations.
Pioneer Credit Limited
30 June 2015
Page 4
ctivities
Review of operations and activities
Review of operations and a
ctivities
ctivities
Review of operations and a
Review of operations and a
Pioneer has demonstrated that it holds financial assets to manage value over the long term with an
element of contribution arising due to liquidation on customer accounts over time, and when an
opportunity arises, can and will, sell financial assets to re-invest the cash in financial assets with a higher
anticipated return. The sales were portfolios of Part IX accounts (also commonly referred to as bankruptcy
compromised accounts) that do not align with Pioneer’s business model and where no further value can
be added by Pioneer through its customer service strategies to the customer.
The Company anticipates making two portfolio sales in FY16. For context we anticipate these sales will be
approximately $750,000 each (gross, before Pioneers portfolio expensing charge).
Pioneer continues to focus on value management, portfolio value creation and efficiency to maximise
margins. Pioneer has done that successfully this year, slightly ahead of expectations, and against a
backdrop where significant progress was made and expense incurred in the development of our new
financial products to come to market in FY16.
From an operational perspective, the Company is pleased to provide the following commentary on the
year just completed:
Premises
Premises
Premises
Premises
Continued growth led to Pioneer expanding into a second floor in the Company’s Perth CBD premises in
November 2014. This is a continuation of the state of the art facility it commenced building earlier in that
year. This accommodation provides additional space for new customer facing team members, along with
quality training facilities to ensure our people are well equipped with the vital knowledge and skills
required to service our customers and excel in their roles.
In early July 2015 a third floor was opened, enabling our corporate and administrative offices to be
relocated into the same location as the operations teams. This shift will result in the decommissioning of
other less efficient leased properties, and a consolidation of our real estate footprint, as those
commitments expire in late 2015.
The new facilities have been secured on favourable terms as a result of changes in Perth’s leasing market,
and deliver numerous financial and operational benefits to the business. By securing centrally located,
quality premises we have been able to attract a larger pool of high quality talent, not only in our customer
service teams, but importantly in our corporate and administrative teams. Likewise we have seen
continued improvement in our employee retention rate, which we expect will result in better productivity
as team members continue to become more skilled and therefore build momentum over time. Pioneer
has also reduced its per sqm employee impact on the environment as a result of leveraging improved
efficiencies in the new premises, technology and infrastructure. Increased staff awareness has also lead to
more engagement with our key environmental initiatives and Pioneer expects to see continued
improvements and further endorsement of our environmental performance and resource management in
the periods ahead.
People
People
People
People
Throughout the year, Pioneer continued to expand its employee numbers. While this growth was most
significant within the operations area, the Company recruited experienced administrative and corporate
staff to bolster and improve the quality of the business and the programmes running within it.
In line with our long-standing approach, a key priority through this expansion is Pioneer’s investment in
training and development which assists our new customer service team members to become more
productive and effective. Our focus remains on building a high quality team which is culturally aligned,
highly skilled and knowledgeable, and empowered to deliver exceptional customer service.
Pioneer Credit Limited
30 June 2015
Page 5
Review of operations and activities
Review of operations and activities
Review of operations and activities
Review of operations and activities
The growth in employee numbers required significant investment by the Company which impacted the
financial result for the first half of FY15. Simultaneously, we also noticed the changing dynamics in a
rapidly evolving employment market in Western Australia and at this point chose to reschedule some
recruitment into 2H15 to take advantage of an increased labour pool. We are pleased that we made this
decision, and while it certainly had the effect of dampening the immediate top line growth, the decision
has led to Pioneer securing better quality candidates that are now making meaningful and sustainable
productive gains within our business. We expect to see this increase in value to flow through our business
in FY16 and beyond.
A continued focus on people development and retention led to the launch of a Certificate IV in Customer
Contact to the business. In FY15, this initiative enabled employees to enter into a fully subsidised Training
Contract to commence the Nationally Accredited Qualification over an 18 month timeframe. The
qualification has been customised by the external training provider to not only meet our exacting
standards but in addition, be authentic to Pioneer’s principle driven culture and customer service
philosophy. Before release this qualification was tested on a sample from the leadership group in order to
validate its currency and alignment to the business. This course supplements the pre-existing Leadership
Development Program which has been created, reviewed and evolved over the past three years. This is
offered to all employees in order to further expand on the leadership principles which our culture is built
upon and to set the benchmark for outstanding leadership and improved performance across all
functions within the Company.
In March 2015, Pioneer engaged an independent group to assess our corporate culture and our level of
employee engagement. This assessment, which included a comprehensive survey of all staff, is regarded
as an essential part of our internal performance review process. The results enabled us to ensure that
while we continue to grow, the foundations that enabled that growth are not only maintained but are
cultivated from within. Notably 81% of our employees completed the survey. Of those over 97% of staff
would recommend Pioneer as a place to work and over 98% believed we consistently delivered excellent
service to our customers.
Certainly the number of unsolicited customer testimonials we receive supports that statistic. We share this
type of information with our vendor partners (to continue to reinforce the value Pioneer brings to their
businesses) on a regular basis and to recognise outstanding service at our end-of-month and year-end
celebrations.
Good culture drives great performance
Good culture drives great performance
Good culture drives great performance
Good culture drives great performance
Across the business, Pioneer continues to underpin every action and decision with its Leadership
Principles. The business acknowledges that this foundation has created the engaged customer service
culture that we celebrate today and in turn enables our success by empowering our people to proactively
seek suitable and value based solutions to help Pioneer customers get their finances back on track.
By continuing to recruit people who share our passion for outstanding customer service and by providing
world class development programs and a high quality compliance program that everyone is responsible
to uphold, Pioneer is proudly able to reaffirm its unique record of no negative ombudsman complaints
and no regulatory enforceable undertakings ever. Pioneer is the only participant of any significance in the
market that can make these statements.
Very importantly, our record in this regard resonates with our vendor partners as they seek to continue to
differentiate themselves from a fast changing financial sector through good corporate behaviour and
strong, reliable and collaborative partnerships.
Pioneer Credit Limited
30 June 2015
Page 6
Review of operations and activities
Review of operations and activities
Review of operations and activities
Review of operations and activities
By assigning the contractual rights of their customer base to Pioneer, our vendor partners ensure that
they are aligned to an organisation that is clearly customer focused and who values not only their own
brand but also the brands of those around them. Given the majority of our customers have recently been
through a major life event such as divorce, loss of job or sickness, and are understandably experiencing
varying degrees of distress, their smooth transition to Pioneer becomes even more pertinent.
Pioneer continues to be very selective in terms of who we partner with and the manner in which we
acquire customer accounts. Pioneer does not acquire telecommunications or utility accounts, we do not
acquire loans that were originated as ‘bad credit’ loans and we do not acquire pay day lending accounts
of any type.
Debt acquisition
Debt acquisition
Debt acquisition
Debt acquisition
Against the backdrop of our stringent acquisition standards, Pioneer has grown its purchasing base during
the financial year and now has forward flow (fixed term) agreements in place with three of the four major
banks in Australia and is currently progressing discussions with the other of those banks. Additionally
Pioneer’s exposure to regional banks is maintained and it also continues a long term partnership with one
of Australia’s leading consumer leasing businesses.
There has been considerable commentary recently regarding the price cycle in the purchased debt sector
in Australia and about the potential for rising prices as the market becomes more competitive.
Pioneer remains committed to providing price transparency to its shareholders and to providing price
certainty to its vendor partners. Pioneer has not experienced the apparent price increases in the market
that others have reported. This is a business that remains committed to applying discipline to every aspect
of its operations, including its investment activities.
Pioneer has continued to demonstrate that price is not the key determinant of a vendor’s decision to sell
a debt portfolio. Pioneer, through our purchasing programme, our discipline, our exemplary compliance
record, our price transparency, our proactive and transparent partnership mentality, our corporate culture
and our customer engagement strategies continues to deliver tangible benefits to our vendor partners
and this continues to be recognised through us having access to a consistent flow of quality customers to
acquire at an appropriate price point.
That discipline also applies to gearing and to the carrying value of the Company’s assets.
Our discipline in ensuring our portfolio is cautiously valued on the balance sheet is fundamental to our
capital management programme. Against a cautiously valued asset we have some debt, but a very
manageable and conservative amount which at 30 June 2015 represented 36.6% of that asset for a total
drawn position of $28.210m and undrawn capacity of $18.791m. Our facilities continue to operate well
inside our very conservative covenants.
Against this, Pioneer has very strong free cash flow of circa $28m in FY15 and a forecast of over $30m in
FY16 before investments.
Pioneer Credit Limited
30 June 2015
Page 7
Review of operations and activities
Review of operations and activities
Review of operations and activities
Review of operations and activities
Goldfields Money Limited
Goldfields Money Limited
Goldfields Money Limited
Goldfields Money Limited
During the period Pioneer acquired a ~14% equity position in Goldfields Money Limited (GMY) following
an exhaustive process which was overseen independently by the Board and resulted from a unanimous
decision (with the Managing Director abstaining).
The equity was acquired at a Net Tangible Asset (NTA) value of $0.94 and well below the independent fair
value valuation independently provided to the Board. The Board engaged the services of an independent
corporate advisory firm to review the strategy for the acquisition and provide a recommendation on that
strategy to ensure that the reasoning for such an investment was sound. The independent adviser also
concluded that the acquisition price was well within fair market value estimates.
By way of background, GMY is the smallest listed Authorised Deposit-taking Institution in Australia. In the
Board’s view the acquisition of our equity stake was at a price well below its realistic value, and at a price
point that was very near to NTA. Following the acquisition, Pioneer was able to appoint a nominee the
Board of Directors of GMY.
This investment provides a number of benefits to the Group, including:
1. capital discipline and credit risk protection - by making this investment in GMY we have secured a
partner where we have the ability to influence how customer appropriate products are developed
and then do that in a way where the credit risk, the balance sheet risk, is borne by that partner,
under the oversight of the Australian Prudential Regulatory Authority (APRA).
2. operational upside - as Pioneer Credit prepares to launch debit and credit cards to its customers
during FY16, our ability to manage customer relationships is a unique advantage against other
white label offerings for credit cards and lending products. Our arrangement with Goldfields
Money facilitates this
in a manner that recognises Pioneer’s unique customer service
competency.
3. corporate optionality - this investment provides Pioneer with a relatively low cost and near capital-
covered investment that provides the Company with access to capital to grow our new credit
cards business. The acquisition provides a range of options not readily available elsewhere in the
market whereby in future periods we can either keep our risk off balance sheet with GMY, we can
spread that relationship to other funders or when we become comfortable with the risk we can
shift it on balance sheet to Pioneer for extra margin.
We have little doubt that this investment will deliver value for shareholders over future years.
Corporate
Corporate
Corporate
Corporate
The Company has been fortunate to gain the services of Anne Templeman-Jones, a highly qualified and
respected Independent Non-Executive Director, who joined the Board in late 2014. Anne is based in New
South Wales and has extensive relationships throughout the financial and professional services
community. Anne is the Chairperson of the Audit and Risk Management Committee and her full
biography can be viewed on page 13 of this Annual Report.
Pioneer Credit Limited
30 June 2015
Page 8
Review of operations and activities
Review of operations and activities
Review of operations and activities
Review of operations and activities
Dividend
Dividend
Dividend
Dividend
Pioneer's intention is to distribute dividends representing 50% of profit after taxation to shareholders each
year, subject to the Directors reviewing and approving such payment in the context of the capital
requirements of the business.
Consistent with the strong performance of the Company in FY15 the Board is pleased to declare a
dividend of 6.80 cents per share. This takes the total dividends for FY15 to 8.55 cents per share, well
ahead of Prospectus forecast and consensus expectations.
The Board is also aware of the support of shareholders and the desire of many to continue to invest in the
growth of the Company. The Board is pleased to advise that it has resolved to introduce a Dividend
Reinvestment Plan (DRP) and in time for the dividend declared today. Full details of the DRP are released
separately to the market and are available on the Pioneer website.
The record date for the dividend is 30 September 2015 and the dividend will be paid to shareholders on
30 October 2015.
Outlook
Outlook
Outlook
Outlook
The Company is pleased to provide guidance to the market as follows:
Portfolio Investments at least $42.0m
at least $ 8.8m
Profit after Taxation
Pioneer Credit Limited
30 June 2015
Page 9
Directors’ report
Directors’ report
Directors’ report
Directors’ report
Your Directors present their report on the Consolidated Entity consisting of Pioneer Credit Limited and
the entities it controlled at the end of, or during, the year ended 30 June 2015. Throughout the report, the
Consolidated Entity is referred to as the Group.
Directors
Directors
Directors
Directors
The following persons were Directors of Pioneer Credit Limited during the whole of the financial year and
up to the date of this report:
Mr Michael Smith
Mr Keith John
Mr Rob Bransby
Mr Mark Dutton
Ms Anne Templeman-Jones was appointed as a Director on 23 September 2014 and continues in office
at the date of this report.
Principal activities
Principal activities
Principal activities
Principal activities
Pioneer is an Australian financial services provider, specialising in acquiring and servicing unsecured retail
debt portfolios.
These portfolios consist of people with financial obligations to Pioneer. These people become the
cornerstone of Pioneer’s business and are our customers.
We work closely with our customers who – for a range of reasons – have found themselves in financial
difficulty. In the great majority of cases this has come about through a significant life event such as loss of
job, serious health issues, marriage breakdown or domestic violence.
A key goal at Pioneer, as we work with our customers, is to see them achieve financial recovery and
evolve as a ‘new consumer’.
There was no significant change in the nature of these activities during the year.
Dividends
Dividends
Dividends
Dividends
Dividends or distributions paid to members during the year were as follows:
Declared and paid during the year 2015
Ordinary shares –––– Declared and paid during the year 2015
Ordinary shares
Declared and paid during the year 2015
Declared and paid during the year 2015
Ordinary shares
Ordinary shares
Dividend on fully paid ordinary shares held at 30 September 2014
Dividend on fully paid ordinary shares held at 31 March 2015
Total
Total
Total
Total
$$$$
$1,406,593
$794,045
Date of payment
Date of payment
Date of payment
Date of payment
17/10/2014
17/04/2015
Since the end of the financial year the Directors have declared the payment of a final dividend of 6.80
cents per fully paid ordinary share with a record date of 30 September 2015 to be paid on 30 October
2015.
Pioneer Credit Limited
30 June 2015
Page 10
Directors’ report
Directors’ report
Directors’ report
Directors’ report
operations
Review of operations
Review of
operations
operations
Review of
Review of
Information on the operations and financial position of the Group and its business strategies and
prospects is set out in the Review of operations and activities on page 3 of this Annual Report.
Significant changes in the state of affairs
Significant changes in the state of affairs
Significant changes in the state of affairs
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the Group during the financial year.
Events since the end of the financial year
Events since the end of the financial year
Events since the end of the financial year
Events since the end of the financial year
No matter or circumstance has arisen since 30 June 2015 that has significantly affected the Group’s
operations, results or state of affairs, or may do so in future years.
Environmental regulation
Environmental regulation
Environmental regulation
Environmental regulation
Pioneer Credit Limited is not affected by any significant environmental regulations in respect of its
operations.
Information on Directors
Information on Directors
Information on Directors
Information on Directors
Mr Michael Smith
Experience and expertise
Listed Company Directorships including
those held at any time in the previous 3
years
Special responsibilities
Interests in shares and options
Non-Executive Chairperson
A highly experienced company director and executive, Michael was
appointed Non-Executive Chairperson of Pioneer Credit in February
2014.
In addition to his role as Managing Director of strategic marketing
consultancy firm Black House, Michael is the Chairperson of iiNet
Limited, the Lionel Samson Sadleir Group, National Chairperson of the
Australian
Institute of Company Directors, Deputy Chairperson of
Automotive Holdings Group Ltd and 7-Eleven Stores Pty Ltd, and a board
member of Creative Partnership Australia.
Michael is a fellow of the Australian Institute of Company Directors and
holds a Doctor of Letters (Hon) from the University of Western Australia
for his contribution to business and the arts.
iiNet Limited
Automotive Holdings Group Ltd
(since 19 September 2007)
(since 6 May 2010)
Chairperson of the Board
Chairperson of Nomination Committee
Chairperson of Remuneration Committee
Member of Audit and Risk Management Committee
Ordinary Shares
Unlisted Options
62,500
300,000
Pioneer Credit Limited
30 June 2015
Page 11
Mr Keith John
Experience and expertise
Managing Director
Mr John has over 25 years’ experience in the financial services industry,
both in Australia and in Asia, and is the founder of Pioneer Credit.
Directors’ report
Directors’ report
Directors’ report
Directors’ report
Mr John has a strong interest in philanthropy and through his business
and directorships supports numerous charitable organisations across
Australia. An industry leader, Mr John serves on a number of industry
bodies.
In addition to his role as Managing Director of Pioneer Credit, Keith is
Director of Midbridge Investments Pty Ltd.
None
Managing Director
Ordinary Shares
8,213,216
Non-Executive Director
Mr Bransby is the Managing Director of HBF Health Limited and a
Director of HealthGuard Health Benefits Pty Ltd.
Prior to working at HBF, Mr Bransby enjoyed a successful career in
including Corporate Finance Manager,
banking, holding positions
Corporate Banking Western Australia and Head of Business Financial
Services in New South Wales during 25 years at the National Australia
Bank Ltd.
Mr Bransby is President of Private Healthcare Australia (PHA), Deputy
Chairperson of Members Own Health Funds and a Director of Goldfields
Money Ltd and Synergy. He is also a Member of the International
Federation of Health Plans’ (iFHP) Council of Management.
(since 10 May 2012)
Goldfields Money Limited
Resigned 16 September 2014, Re-
appointed 20 February 2015
Listed Company Directorships including
those held at any time in the previous 3
years
Special responsibilities
Interests in shares and options
Mr Rob Bransby
Experience and expertise
Listed Company Directorships including
those held at any time in the previous 3
years
Special responsibilities
Member of Nomination Committee
Member of Remuneration Committee
Interests in shares and options
Ordinary Shares
35,000
Mr Mark Dutton
Experience and expertise
Non-Executive Director
Mr Dutton has served as a Non-Executive Director of Pioneer Credit since
May 2010.
The founder and director of Banksia Capital, Mr Dutton was previously a
partner at Navis Capital and a director at Foundation Capital and at
BancBoston Capital. Prior to embarking on his private equity career, Mr
Dutton worked
at
in
PricewaterhouseCoopers in the UK and Russia.
Corporate
Finance
Audit
and
Listed Company Directorships including
those held at any time in the previous 3
years
Special responsibilities
Interests in shares and options
Mr Dutton is a chartered accountant and a member of the Institute of
Chartered Accountants of England & Wales. Mr Dutton also holds an MA
in Management Studies and Natural Sciences from the University of
Cambridge.
Mineral Resources Limited
(from 8 November 2007 to
20 November 2014)
Member of Nomination Committee
Member of Remuneration Committee
Member of Audit and Risk Management Committee
Ordinary Shares
306,483
Pioneer Credit Limited
30 June 2015
Page 12
Ms Anne Templeman-Jones
Experience and expertise
Non-Executive Director
Ms Templeman-Jones joined the Board in September 2014.
Directors’ report
Directors’ report
Directors’ report
Directors’ report
Ms Templeman-Jones is a highly regarded professional non-executive
director who also serves on the boards of APN News & Media Limited,
GUD Holdings Limited and Cuscal Limited, chairing the Audit and Risk
Committees, Remuneration Committee
and Risk Committees
respectively.
In a career spanning over 30 years, Ms Templeman-Jones has worked for
a number of leading organisations including PwC, ANZ and Westpac,
where over the last seven year period until 2013 she held the positions of
Head of Private Bank in NSW and ACT, Head of Strategy and Risk for the
Pacific Bank operations, Director Group Risk Reward and Director
Strategy in Westpac’s Institutional Bank.
Listed Company Directorships including
those held at any time in the previous 3
years
Special responsibilities
Interests in shares and options
A chartered accountant, Ms Templeman-Jones has a Bachelor of
Commerce from UWA, an Executive MBA from AGSM and a Masters in
Risk Management from the University of NSW. She is a Fellow of the
Australian Institute of Company Directors and a member of the Australian
Institute of Chartered Accountants.
Cuscal Limited
APN News & Media Limited
GUD Holdings
Chairperson of Audit and Risk Management Committee
Member of Nomination Committee
Member of Remuneration Committee
Ordinary Shares
(since 20 March 2013)
(since 4 June 2013)
(since 1 August 2015)
Nil
Pioneer Credit Limited
30 June 2015
Page 13
Meeting of Directors
Meeting of Directors
Meeting of Directors
Meeting of Directors
Directors’ report
Directors’ report
Directors’ report
Directors’ report
The number of meetings of the Company's Board of Directors and of each Board committee held during
the year ended 30 June 2015, and the number of meetings attended by each Director were:
Name
Name
NameName
Board Meetings
Board Meetings
Board Meetings
Board Meetings
Committee Meetings
Committee Meetings
Committee Meetings
Committee Meetings
Audit and Risk
Audit and Risk
Audit and Risk
Audit and Risk
Remuneration
Remuneration
Remuneration
Remuneration
Nomination
Nomination
Nomination
Nomination
Attended
Attended
Attended
Attended
HeldHeldHeldHeld
Attended HeldHeldHeldHeld
Attended HeldHeldHeldHeld Attended
Attended HeldHeldHeldHeld Attended
Attended
Attended
Attended
Attended
Attended
Attended
Attended
Mr Michael Smith
Mr Keith John*
Mr Rob Bransby
Mr Mark Dutton
Ms Anne Templeman-Jones+
11
11
11
10
5
11
11
11
11
11
2
*
1
1
1
2
*
1
2
1
2
*
2
2
*
2
*
2
2
*
1
*
1
1
*
1
*
1
1
*
Held
*
+
Number of meetings held during the year and during the time the Director held office or was a member of the committee
Not a member of the relevant committee
Ms Anne Templeman-Jones was appointed a Non-Executive Director on 23 September 2014 and was elected Chairperson
of the Audit and Risk Management Committee on 29 October 2014.
Company Secretary
Company Secretary
Company Secretary
Company Secretary
Leslie Crockett joined Pioneer Credit as Chief Financial Officer in December 2012, and in early 2013 was
appointed Company Secretary.
A chartered accountant, Leslie has experience working across a range of industries including financial
services, property development, construction, retail and manufacturing covering jurisdictions in Europe,
the United Kingdom, Africa, the USA and the Caribbean.
Prior to joining Pioneer Credit he was a divisional finance executive for an ASX100 listed group.
Leslie qualified as a chartered accountant with Deloitte, where he provided audit, consulting, financial
advisory, risk management and tax services. He holds a Bachelor of Accounting from the University of
South Africa and business qualifications from Melbourne Business School.
Pioneer Credit Limited
30 June 2015
Page 14
Remuneration Report
Remuneration Report
Remuneration Report
Remuneration Report
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
k)
l)
Key Management Personnel covered in this report
Remuneration policy and link to performance
Remuneration expenses for KMP
Contractual arrangements with executive KMP
Non-executive director arrangements
Non-executive director remuneration for 2015
Relative proportions of fixed vs variable remuneration expense
Performance based remuneration granted and forfeited during the year
Terms and conditions of share-based payment arrangements
Equity instruments held by Key Management Personnel
Loans given to Key Management Personnel
Other transactions with Key Management Personnel
a)a)a)a) Key Management Personnel covered in this report
Key Management Personnel covered in this report
Key Management Personnel covered in this report
Key Management Personnel covered in this report
Non-Executive and executive directors
Directors’ report
Directors’ report
Directors’ report
Directors’ report
15
15
21
23
23
24
24
24
25
26
27
27
Mr Michael Smith
Mr Keith John
Mr Rob Bransby
Mr Mark Dutton
Ms Anne Templeman-Jones
Other key management personnel
Independent Non-Executive Chairperson
Non-Independent Executive Managing Director
Independent Non-Executive Director
Non-Independent Non-Executive Director
Independent Non-Executive Director appointed on
23 September 2014
Ms Lisa Stedman
Mr Leslie Crockett
Chief Operating Officer
Chief Financial Officer and Company Secretary
b)b)b)b) Remuneration policy and link to performance
Remuneration policy and link to performance
Remuneration policy and link to performance
Remuneration policy and link to performance
The Remuneration Committee is a Committee of the Board comprising:
Mr Michael Smith (Chairperson);
Mr Rob Bransby; and
Mr Mark Dutton.
All three members of the Remuneration Committee are Non-Executive Directors, the majority are
Independent and the Chairperson of this Committee is an Independent Non-Executive Director.
The function of the Remuneration Committee is to assist the Board in fulfilling its corporate governance
responsibilities with respect to remuneration by reviewing and making appropriate recommendations to
the Board on:
•
•
•
remuneration packages for Directors and senior executives;
incentive and equity-based remuneration plans for executive Directors and senior executives;
appropriate performance hurdles and other key performance indicators to ensure remuneration is
aligned to shareholder expectations; and
• The appropriateness of total payments proposed to Directors and senior executives
Pioneer Credit Limited
30 June 2015
Page 15
Directors’ report
Directors’ report
Directors’ report
Directors’ report
The Committee’s objective is to ensure that remuneration policies and structures are fair to both the
Company and its employees and competitive in the marketplace such that the Company continues to be
able to attract and retain quality individuals and so that those individuals are aligned with the long-term
interests of the Company’s shareholders.
The Remuneration Committee charter, on Pioneer’s corporate web-site, provides further information on
the role of this committee.
The Committee reviews and determines remuneration policy and structure annually to ensure it remains
aligned to business needs and meets our remuneration principles. From time to time, the committee also
engages external remuneration consultants to assist with this review, see note i) below for further
information.
In particular, the board aims to ensure that remuneration practices are:
aligned to the Company’s strategic and business objectives;
• competitive and reasonable, enabling the Company to attract and retain quality talent;
•
• developed for creation of long term shareholder value;
•
•
transparent and easily understood by all stakeholders; and
acceptable to shareholders.
In considering the Company’s Remuneration Policy and its levels of remuneration for executives, the
Remuneration Committee makes recommendations which:
• motivate executive Directors and senior executives to ensure the long term sustainable growth of the
Company within an appropriate control framework;
• demonstrates a clear correlation between senior executives’ performance and remuneration;
•
aligns the interests of key leadership with the long-term interests of the Company’s shareholders; and
• prohibits executives from entering into transactions or arrangements which limit the economic risk of
participating in unvested entitlements.
The executive remuneration framework has three components:
• base salary and benefits, including superannuation;
•
•
short-term incentives; and
long-term incentives.
i)i)i)i)
Use of remuneration consultants
Use of remuneration consultants
Use of remuneration consultants
Use of remuneration consultants
To ensure the Remuneration Committee is fully informed when making remuneration decisions, the
Remuneration Committee will periodically seek external remuneration advice.
Given that the Company listed shortly prior to the commencement of the reporting period the
Remuneration Committee thought it appropriate to independently review all executive employment
agreements and engaged Kelsen Human Resources Pty Ltd (Kelsen) to conduct that review.
Kelsen has confirmed by way of written declaration to the Remuneration Committee that their review was
conducted independent of any persons within the Company. The review was undertaken using the
Company’s 2014 Annual Report, a substantial range of other publically available data and a relative
assessment of ASX listed companies of similar revenue scale, profitability and industry. The Kelsen review
and recommendations were delivered independently to the Remuneration Committee.
On this basis, the Board is satisfied that the recommendations were made free from undue influence from
any members of the Key Management Personnel.
Pioneer Credit Limited
30 June 2015
Page 16
Directors’ report
Directors’ report
Directors’ report
Directors’ report
In responding to the findings reported by Kelsen on 18 December 2014, the Remuneration Committee
recommended to the Board of the Company increases in fixed remuneration for its senior executives.
The fixed remuneration increases were in the 25th percentile of the acceptable range of fixed
remuneration. These recommendations were presented to and approved by the Board of the Company
at its meeting on 18 December 2014.
The Board is desirous of moving all key executives to the 50th percentile over the course of the next two
reporting periods on the basis that the executives continue to deliver at least appropriate value to the
Company and that the Company continues to meet its financial and other goals.
Kelsen recommended that the fees paid to the Chairperson of the Board and the other Non-Executive
Directors of the Company remain unchanged.
Kelsen was paid $17,028 for their services.
ii)ii)ii)ii)
term performance
term and long----term performance
Balancing shortttt----term and long
Balancing shor
term performance
term performance
term and long
term and long
Balancing shor
Balancing shor
To ensure that executive remuneration is aligned to Company performance, a reasonable portion of the
executives’ target pay is “at risk”. Executives receive their base salary and benefits structured as a total
employment cost package. Base salary is reviewed at least annually or on promotion or where there is a
significant change in role responsibilities and is benchmarked against market data for comparable roles in
the market.
There is no guaranteed base salary increase included in any executives’ contracts.
Retirement benefits are delivered under the Superannuation Guarantee (Administration) Act 1992.
The short term incentive provided as part of an executive’s remuneration is awarded based on an
assessment of key performance indicators (KPI’s). These KPI’s are agreed between the Remuneration
Committee and the executive prior to the commencement of each reporting period. The KPI’s are
structured differently for each executive with a common focus on key value drivers in the business. These
include Profit after Taxation, compliance performance and a peer and direct report assessment of
alignment to and conduct displayed in and of Pioneer’s Leadership Principles. Other role specific KPI’s are
also assessed for each executive.
The Company also recognises the need to appropriately incentivise its executives through a long term
incentive plan. At its Annual General Meeting on 29 October 2014 the Pioneer Credit Equity Incentive and
Indeterminate Rights Plans were approved by shareholders. Subject to the achievement of the
Performance Condition, participants are granted Performance Rights and Indeterminate Rights as
approved by the Board. As the Performance Conditions are not able to be met within the reporting period
there were no grants made during this financial year.
Front of mind in the development of the Company’s incentive plans is the delivery of earnings growth and
the contribution to long term sustainable shareholder value through the creation and delivery of value in
all aspects of the Company. The incentive plans recognise and support this value creation by encouraging
and rewarding not just exemplary and leading good corporate behaviour, but also the development of a
service focussed and high performing culture. The success of this is measured through customer
feedback, employee engagement results and ultimately through the increase in fair value measured on
the Companies balance sheet (representing the improvement in value created from the point of
investment in Purchase Debt Portfolios) and the earning per share the Company reports each period.
The Company listed in May 2014 and published an eighteen month forecast. The performance hurdles of
the incentive plans have focussed on the delivery of the forecast result and with the limited public
company history, a four year historical analysis of performance is not considered meaningful in this
context.
Pioneer Credit Limited
30 June 2015
Page 17
iii)iii)iii)iii)
Relationship between remuneration and Pioneer Credit Limited performance
Relationship between remuneration and Pioneer Credit Limited performance
Relationship between remuneration and Pioneer Credit Limited performance
Relationship between remuneration and Pioneer Credit Limited performance
Directors’ report
Directors’ report
Directors’ report
Directors’ report
Remuneration framework
Element
Element
Element
Element
Fixed remuneration (FR)
Short-term incentive (STI)
Long-term incentive (LTI)
Purpose
Purpose
Purpose
Purpose
Provide base salary
benchmarked to the
recommended median
including
superannuation, and
non-monetary benefits
Rewards Executives for
their contribution
based on assessment
of performance
against Key
Performance
Indicators
Rewards Executives for
their contribution to
the creation of
shareholder value
Performance Metrics
Performance Metrics
Performance Metrics
Performance Metrics
Nil
Potential Value
Potential Value
Potential Value
Potential Value
Benchmarked to 25th
percentile of the
recommended median
25% of fixed
remuneration
Grant of Performance
Rights and
Indeterminate Rights in
the case of the
Managing Director of up
to 150,000 ordinary
shares for each
executive. Vesting
occurs over 3 to 5 years
from the base date of 1
July 2014
Key Performance
Indicators provide a basis
for evaluation of financial
performance on a total
return basis and include a
related measurement
against the Leadership
Principles and
contribution to strategic
and quality management
goals
Target 1 (50% of the
Target 1 (50% of the
Target 1 (50% of the
Target 1 (50% of the
Performance Condition)
Performance Condition):
Performance Condition)
Performance Condition)
the financial performance
of the Company for the 12
month financial period
ending 30 June 2015 of a
$6,600,000 operating
profit after taxation as
approved by the Board for
release to the ASX (in the
form of audited financial
results)
Target 2 (50% of the
Target 2 (50% of the
Target 2 (50% of the
Target 2 (50% of the
Performance Condition)
Performance Condition):
Performance Condition)
Performance Condition)
individual assessment
against the Company’s
‘Leadership Principles’
Target 1 and Target 2
comprise the total
“Performance Condition”
and are co-dependent
Pioneer Credit Limited
30 June 2015
Page 18
iv)iv)iv)iv)
term incentives
Short----term incentives
Short
term incentives
term incentives
Short
Short
Directors’ report
Directors’ report
Directors’ report
Directors’ report
Feature
Max Max Max Max
opportunity
opportunity
opportunity
opportunity
Performance
Performance
Performance
Performance
metrics
metrics
metrics
metrics
Description
MD and KMP: 25% of fixed remuneration
MD and KMP: 25% of fixed remuneration
MD and KMP: 25% of fixed remuneration
MD and KMP: 25% of fixed remuneration
Key Performance Indicators are aligned to our strategic priorities of shareholder value, evaluation
of financial performance on a total return basis, operational excellence, risk management and
appropriate long term strategic goals
MetricMetricMetricMetric
Leadership and
Growth Initiatives
Weight
Target
Weight Target
Target
Target
Weight
Weight
Board’s assessment of
30%
leadership and strategy
delivery
Management of value,
operating profit and
customer payments
performance
10-20% Regulatory compliance
30-
60%
Reason for selection
Reason for selection
Reason for selection
Reason for selection
Long term strategic growth and
building of a culture of excellence
through the Leadership Principles
Sustainable management of value
and delivery of optimal financial
performance
Differentiation through
compliance excellence and
appropriate management of risk
Financial
Performance on a
total return basis
Risk and
Compliance
Delivery of STI
Delivery of STI The STI is paid on release of the audited financial year results
Delivery of STI
Delivery of STI
Board
Board
Board
Board
discretion
discretion
discretion
discretion
The Board reserves the right to amend, vary or revoke the terms of any incentive plan from time
to time, at its sole and absolute discretion
v)v)v)v)
term incentives
Long----term incentives
Long
term incentives
term incentives
Long
Long
At the Annual General Meeting held on 29 October 2014, shareholders approved the Pioneer Credit
Equity Incentive Plan (the “Plan”).
Subject to the achievement of performance conditions, participants may be entitled to be granted
Performance Rights and Indeterminate Rights as approved by the Board.
The number of rights which are granted to any participant will be determined by reference to
achievement of both Target 1 and Target 2 (together the Performance Condition) as described below.
Target 1 (50% of the Performance Condition):
The financial performance of the Company for the 12 month financial period ended 30 June 2015 of a
$6,600,000 operating profit after taxation as approved by the Board for release to the ASX (in the form of
audited financial results).
Target 2 (50% of the Performance Condition):
Individual assessment against the Company’s ‘Leadership Principles’. There are six Leadership Principles as
follows:
1. Technical Competence
2. Clear Communication
3. Unwavering Passion
4. Fearless Vision
5. Unlimited Accessibility
6. Selfless Loyalty
In respect of assessing an individual’s performance, there is a binary determination in respect of each of
the six principles (i.e. the Company’s expectation has either been met or not been met).
Pioneer Credit Limited
30 June 2015
Page 19
Directors’ report
Directors’ report
Directors’ report
Directors’ report
Assessment of the Managing Director’s performance against the Leadership Principles will be reviewed by
the Remuneration Committee and will be reported to the Board for its approval. Assessment of the Chief
Financial Officer’s and Chief Operating Officer’s performance against the Leadership Principles will be
reviewed by the Remuneration Committee or its delegate.
Together, Target 1 and Target 2 comprise the total “Performance Condition” and are co-dependent.
• Target 1 acts as the “first gate” in respect of the Award – i.e. Target 1 must be met prior to any Rights
being granted.
• Target 2 acts as the “second gate” in respect of the FY2015 Managing Director’s Award in that the
Participant must also meet the Company’s expectation on four or more of the Leadership Principles
against which he is assessed prior to any Rights being granted.
• Target 1 and Target 2 have an equal weighting as follows:
o Achievement of Target 1 (and subject to meeting Target 2 conditions): 50% of the Total
Available Rights will be granted.
o Achievement of Target 2 (and subject to meeting Target 1 conditions): up to 50% of the Total
Available Rights will be granted.
Rights will vest in accordance with the following schedule (each a “Vesting Date”):
• base Date plus 3 years whereby 60% Rights will vest;
• base Date plus 4 years whereby 25% Rights will vest; and
• base Date plus 5 years whereby 15% Rights will vest,
where the Base Date is 1 July 2014 (collectively “Vesting Conditions”) and provided the Participant remains
employed by the Group at a respective Vesting Date.
Pioneer Credit Limited
30 June 2015
Page 20
c)c)c)c) Remuneration expenses for KMP
Remuneration expenses for KMP
Remuneration expenses for KMP
Remuneration expenses for KMP
The following table shows details of the remuneration expense recognised for the Group’s Non-
Executive, and Executive Directors and Key Management Personnel for the current and previous financial
year measured in accordance with the requirements of accounting standards.
Directors’ report
Directors’ report
Directors’ report
Directors’ report
executive Directors
NonNonNonNon----executive Directors
executive Directors
executive Directors
Fixed remuneration
Fixed remuneration
Fixed remuneration
Fixed remuneration
Variable remuneration
Variable remuneration
Variable remuneration
Variable remuneration
Cash
Cash
Cash
Cash
salary
salary
salary
salary
NonNonNonNon----
monetary
monetary
monetary
monetary
benefits
benefits
benefits
benefits
Annual
Annual
Annual
Annual
and long
and long
and long
and long
service
service
service
service
PostPostPostPost----
employment
employment
employment
employment
benefits
benefits
benefits
benefits
Cash
Cash
Cash
Cash
bonus
bonus
bonus
bonus
PostPostPostPost----
employment
employment
employment
employment
Options
benefits Options
benefits
Options
Options
benefits
benefits
Year
Year
YearYear
Total
Total
Total
Total
Mr Michael Smith +
2015
2014
120,461
42,000
Mr Rob Bransby +
2015
2014
70,269
24,500
Mr Mark Dutton
2015
2014
70,269
8,615
Ms Anne Templeman-Jones ++
2015
2014
Total
2015
2015
2015
2015
2014
54,115
-
315,114
315,114
315,114
315,114
75,115
-
-
-
-
-
-
-
-
----
-
-
-
-
-
-
-
-
-
----
-
11,444
3,885
6,676
2,266
6,676
797
5,141
-
29,937
29,937
29,937
29,937
6,948
-
-
-
-
-
-
-
-
----
-
-
-
-
-
-
-
-
-
----
-
30,068
161,973
12,528
58,413
-
-
-
-
-
-
76,945
26,766
76,945
9,412
59,256
-
30,068
30,068
30,068
30,068
375,119
375,119
375,119
375,119
12,528
94,591
Pioneer Credit Limited
30 June 2015
Page 21
Directors’ report
Directors’ report
Directors’ report
Directors’ report
Executive Directors
Executive Directors
Executive Directors
Executive Directors
Fixed remuneration
Fixed remuneration
Fixed remuneration
Fixed remuneration
Variable remuneration
Variable remuneration
Variable remuneration
Variable remuneration
Cash
Cash
Cash
Cash
salary
salary
salary
salary
NonNonNonNon----
monetary
monetary
monetary
monetary
benefits
benefits
benefits
benefits
Annual
Annual
Annual
Annual
and long
and long
and long
and long
service
service
service
service
PostPostPostPost----
employment
employment
employment
employment
benefits
benefits
benefits
benefits
Cash
Cash
Cash
Cash
bonus
bonus
bonus
bonus
PostPostPostPost----
employment
employment
employment
employment
Options
benefits Options
benefits
Options
Options
benefits
benefits
Year
Year
YearYear
Mr Keith John
2015
361,685
5,280
32,321
28,794
94,950
2014
300,000
4,800
17,289
27,750
150,000
Mr James Singh +++
2015
2014
-
54,991
-
-
-
-
-
5,087
-
-
9,020
13,875
-
-
-
-
-
-
Total
Total
Total
Total
532,050
513,714
-
60,078
Personnel
Other Key Management Personnel
Other Key Management
Personnel
Personnel
Other Key Management
Other Key Management
Fixed remuneration
Fixed remuneration
Fixed remuneration
Fixed remuneration
Variable remuneration
Variable remuneration
Variable remuneration
Variable remuneration
Cash
Cash
Cash
Cash
salary
salary
salary
salary
NonNonNonNon----
monetary
monetary
monetary
monetary
benefits
benefits
benefits
benefits
Annual
Annual
Annual
Annual
and long
and long
and long
and long
service
service
service
service
PostPostPostPost----
employment
employment
employment
employment
benefits
benefits
benefits
benefits
Cash
Cash
Cash
Cash
bonus
bonus
bonus
bonus
PostPostPostPost----
employment
employment
employment
employment
Options
benefits Options
benefits
Options
Options
benefits
benefits
Year
Year
YearYear
Total
Total
Total
Total
Ms Lisa Stedman
2015
2014
246,415
10,560
153,692
9,540
1,577
686
23,409
58,400
5,548
-
345,909
14,217
22,275
2,060
162,000
364,470
Mr Leslie Crockett
2015
265,846
2014
229,923
Total
Total
Total
Total
5,280
4,800
6,312
(466)
25,255
63,000
5,985
-
371,678
21,993
43,750
4,047
136,500
440,547
2015
2015
2015
2015
873,946
873,946
873,946
873,946
21,120
21,120
21,120
21,120
40,210
40,210
40,210
40,210
77,458
77,458
77,458
77,458
216,350
216,350
216,350
216,350
20,553
20,553
20,553
20,553
----
1,249,637
1,249,637
1,249,637
1,249,637
2014
738,606
19,140
17,509
69,047
216,025
19,982
298,500
1,378,809
Total KMP remuneration expensed
Total KMP remuneration expensed
Total KMP remuneration expensed
Total KMP remuneration expensed
2015
2015
2015
2015
1,189,060
1,189,060
1,189,060
1,189,060
21,120
21,120
21,120
21,120
40,210
40,210
40,210
40,210
107,395
107,395
107,395
107,395
216,350
216,350
216,350
216,350
20,553
20,553
20,553
20,553
30,068
30,068
30,068
30,068
1,624,756
1,624,756
1,624,756
1,624,756
2014
813,721
19,140
17,509
75,995
216,025
19,982
311,028
1,473,400
+
++
+++
Mr Michael Smith and Mr Rob Bransby were appointed Directors on 7 February 2014
Ms Anne Templeman-Jones was appointed a Director on 23 September 2014
Mr James Singh resigned as a Director on 7 March 2014. Mr Singh retained his executive position within the Group
There was no increase in the base salary for Non-Executive Directors during the year. Executive Directors
and other KMP’s base salaries increased on 1 January 2015.
Pioneer Credit Limited
30 June 2015
Page 22
d)d)d)d) Contractual arrangements with e
xecutive KMP
Contractual arrangements with executive KMP
xecutive KMP
xecutive KMP
Contractual arrangements with e
Contractual arrangements with e
The terms of employment for Company executives are formalised in individual service agreements. The
Service Agreements specify remuneration, benefits and notice period. Participation in any STI or LTI plan
as previously disclosed is subject to the Board’s discretion. There are no benefits payable to any executive
on termination. Significant provisions of each Service Agreement are set out below.
Directors’ report
Directors’ report
Directors’ report
Directors’ report
Employee
Employee
Employee
Employee
Position
Position
Position
Position
Salary
Salary
Salary
Salary
Mr Keith John
Managing Director
Ms Lisa Stedman
Chief Operating
Officer
Mr Leslie Crockett
Chief Financial Officer
$422,000 per annum plus
superannuation (currently
9.5%) to a maximum of
$30,000 per annum
$292,000 per annum plus
superannuation (currently
9.5%) to a maximum of
$30,000 per annum
$280,000 per annum plus
superannuation (currently
9.5%) to a maximum of
$30,000 per annum
Term of agreement
Term of agreement
Term of agreement
Term of agreement
and notice period
and notice period
and notice period
and notice period
Continuing agreement
with 12 months’ notice
by either party to the
Employment Agreement
Continuing agreement
with 6 months’ notice
by either party to the
Employment Agreement
Continuing agreement
with 6 months’ notice
by either party to the
Employment Agreement
e)e)e)e) NonNonNonNon----executive director arrangements
executive director arrangements
executive director arrangements
executive director arrangements
Mr Michael Smith (Chairperson), Mr Rob Bransby and Mr Mark Dutton were re-elected to the Board at the
Annual General Meeting of the Company on 29 October 2014 and continue in their appointments to the
Board as Non-Executive Directors.
Ms Anne Templeman-Jones was appointed to the Board on 23 September 2014.
Pioneer Credit Limited’s policy is to remunerate Non-Executive Directors at a fixed fee for time,
commitment and responsibilities. Remuneration for Non-Executive Directors is not linked to individual
performance.
On appointment to the Board all Non-Executive Directors enter into a Service Agreement with the
Company in the form of a letter of appointment summarising the Boards policies and the appointment
terms including remuneration relevant to the office of Director. A copy of the policy and procedure for
selection and (re)appointment of Directors can be found on our Corporate Governance website.
Pioneer Credit Limited
30 June 2015
Page 23
f)f)f)f) NonNonNonNon----executive director remuneration for 2015
executive director remuneration for 2015
executive director remuneration for 2015
executive director remuneration for 2015
Directors’ report
Directors’ report
Directors’ report
Directors’ report
Name
Name
NameName
Mr Michael Smith
Mr Rob Bransby
Mr Mark Dutton
Ms Anne Templeman-Jones
Fixed remuneration
Fixed remuneration
Fixed remuneration
Fixed remuneration
120,000
70,000
70,000
70,000
Superannuation
Superannuation
Superannuation
Superannuation
11,400
6,650
6,650
6,650
Total
Total
Total
Total
131,400
76,650
76,650
76,650
A Non-Executive Director is not entitled to receive performance based remuneration. They may be
entitled to fees or other amounts, as the Board determines, where they perform duties outside the scope
of the ordinary duties of a Director. They may also be reimbursed for out of pocket expenses incurred.
No such payments were made during the reporting period.
Fees will be reviewed annually by the Remuneration Committee taking into account comparable roles
and independently generated market data.
From time to time the Company may grant equity based incentives to Non-Executive Directors. The grant
of an equity based incentive is designed to attract and retain suitably qualified Non-Executive Directors.
On his appointment on 7 February 2014, the Company issued Mr Michael Smith 300,000 Unlisted
Options, the terms and conditions of which are set out below.
g)g)g)g) Relative proportions of
fixed vs variable remuneration expense
Relative proportions of fixed vs variable remuneration expense
fixed vs variable remuneration expense
fixed vs variable remuneration expense
Relative proportions of
Relative proportions of
The following table shows the relative proportions of remuneration that are linked to performance and
those that are fixed, based on the amounts disclosed as statutory remuneration expense.
Name
Name
NameName
Executive Directors
Executive Directors
Executive Directors
Executive Directors
Mr Keith John 2015
Other Key Management Personnel
Other Key Management Personnel
Other Key Management Personnel
Other Key Management Personnel
Ms Lisa Stedman 2015
Mr Leslie Crockett 2015
remuneration
Fixed remuneration
Fixed
remuneration
remuneration
Fixed
Fixed
At risk –––– STISTISTISTI
At risk
At risk
At risk
80%
82%
81%
20%
18%
19%
h)h)h)h) Performance based remuneration granted and forfeited during the year
Performance based remuneration granted and forfeited during the year
Performance based remuneration granted and forfeited during the year
Performance based remuneration granted and forfeited during the year
The table below shows for each KMP how much of their STI cash bonus was awarded and how much
was forfeited.
Name
Name
NameName
Mr Keith John
Ms Lisa Stedman
Mr Leslie Crockett
Total opportunity
Total opportunity
Total opportunity
Total opportunity
$$$$
105,500
73,000
70,000
Awarded
Awarded
Awarded
Awarded
%%%%
90%
80%
90%
Forfeited
Forfeited
Forfeited
Forfeited
%%%%
10%
20%
10%
Pioneer Credit Limited
30 June 2015
Page 24
i)i)i)i) Terms and conditions of share
based payment arrangements
Terms and conditions of share----based payment arrangements
based payment arrangements
based payment arrangements
Terms and conditions of share
Terms and conditions of share
Directors’ report
Directors’ report
Directors’ report
Directors’ report
Performance Rights and Indeterminate Rights
Performance Rights and Indeterminate Rights
Performance Rights and Indeterminate Rights
Performance Rights and Indeterminate Rights
There is no share based compensation recognised in the 2015 financial year as there have been no rights
granted under the Pioneer Credit Equity Incentive Plan.
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
Pioneer has 300,000 options on issue with respect to the 2014 grant to Mr Michael Smith. The sum of
$30,072 (2014 $12,530) has been recognised as a share based payment with respect to these options.
The key terms and conditions of the Options are:
a) Each Option will entitle the Option holder to purchase one Share for the exercise price (refer clause e
below) subject to satisfaction of the vesting conditions (refer clause (b) below).
b) The vesting conditions are as follows
i) 50,000 Options vest on the second anniversary of the Offer; and
ii) 250,000 Options vest on the third anniversary of the Offer.
c) Options may be forfeited upon termination of Mr Smith’s position as a Director of Pioneer.
d) Unexercised Options will expire two years after vesting.
e) The exercise price of each Option is 20% greater than the Offer Price. The Offer Price is the price of
the securities sold by Pioneer in its Initial Public Offer. The price was $1.60 per share; the exercise
price of each Option is $1.92.
f) The Option holder may not sell, assign, transfer or otherwise deal with, or grant a Security Interest
over an Option except with the written consent of Pioneer
g) Vested Options that have not expired may be exercised by paying the exercise price (refer clause e
above) to or as directed by Pioneer. Upon vesting the Options may not be exercised until the first
business day following that time which the Fair Market Value of the underlying Share exceeds the
exercise price.
h) The Board may declare that all or a specified number of any unvested Options which have not
expired immediately vest if, in the opinion of the Board a Change of Control has occurred, or is likely
to occur.
The Board may declare that all or a specified number of any unvested Options which have not expired
immediately vest if in the opinion of the Board any person or corporation has a relevant interest (as
defined in the Corporations Act) in more than 90% of the Shares.
The Board may in its absolute discretion declare the vesting of an Option during such period as the Board
determines where:
i) Pioneer passes a resolution for the voluntary winding up of Pioneer;
ii) an order is made for the compulsory winding up of Pioneer; or
iii) Pioneer passes a resolution in accordance with Listing Rule 11.2 to dispose of its main undertaking.
If there is any internal reconstruction, reorganisation or acquisition of Pioneer which does not involve a
significant change in the identity of the ultimate shareholders of Pioneer, this clause applies to any Option
which has not vested by the day the reconstruction takes effect. The Board may declare in its sole
discretion whether and to what extent Options will vest.
Pioneer Credit Limited
30 June 2015
Page 25
Directors’ report
Directors’ report
Directors’ report
Directors’ report
i)
In the event of any reorganisation (including consolidation, sub-division, reduction, return or
cancellation) of the issued capital of Pioneer, the rights attaching to the Options will be varied to
comply with ASX Listing Rules.
j) An Option holder is not entitled to participate in any new issue of securities of Pioneer as a result of
holding the Options.
k) Subject to the terms of the Options and the ASX Listing Rules, the Board may at any time by written
instrument, amend all or any of the provisions of terms of the Options.
Any amendment to the provisions of these terms must not materially reduce your rights before the date
of the amendment, unless the amendment is introduced primarily:
i)
ii)
for the purpose of complying with or conforming to present or future State, Territory or
Commonwealth legislation, the ASX Listing Rules or the constitution of Pioneer; or
to correct any manifest error, or mistake.
Subject to these terms, any amendment made under this rule may be given retrospective effect as
specified in the written instrument by which the amendment is made.
For the purposes of this section, the following terms have the meaning set out below:
Change of Control means:
i)
ii)
iii)
in the case of a takeover bid (as defined in section 9 of the Corporations Act), an offer or who
previously had voting power of less than 50% in Pioneer obtains voting power of more than 50%;
a Court approves under section 411(4)(b) of the Corporations Act, a proposed compromise or
arrangement for the purposes of or in connection with a scheme for the reconstruction of Pioneer
or its amalgamation with any other company or companies;
any person becomes bound or entitled to acquire shares in Pioneer under:
a) section 414 of the Corporations Act (compulsory acquisition following a scheme or contract);
b) Chapter 6A of the Corporations Act (compulsory acquisition of securities); or
c) a selective capital reduction is approved by shareholders of Pioneer pursuant to section
256C(2) of the Corporations Act which results in a person who previously had voting power of
less than 50% in Pioneer obtaining voting power of more than 50%; or
l)
in any other case, a person obtains voting power in Pioneer which the Board (which for the
avoidance of doubt will comprise those Directors holding office immediately prior to the person
acquiring that voting power) determines, acting in good faith and in accordance with their fiduciary
duties, is sufficient to control the composition of the Board.
Fair Market Value means the last price at which the underlying Shares traded on the ASX during a regular
trading session.
Security Interest means a mortgage, charge, pledge, lien or other encumbrance of any nature.
j)j)j)j) Equity instruments held by Key Management Personnel
Equity instruments held by Key Management Personnel
Equity instruments held by Key Management Personnel
Equity instruments held by Key Management Personnel
The tables below show the number of:
• options over ordinary shares in the Company;
•
shares in the Company,
that were held during the financial year by Key Management Personnel of the Group, including their close
family members and entities related to them.
Pioneer Credit Limited
30 June 2015
Page 26
There were no shares granted during the reporting period as compensation. No options have been
granted to any Director or executives since the end of the financial year.
Directors’ report
Directors’ report
Directors’ report
Directors’ report
Option holdings
Option holdings
Option holdings
Option holdings
Name
Name
NameName
Mr Michael Smith
Share holdings
Share holdings
Share holdings
Share holdings
Issued
Issued
Issued
Issued
balance at
balance at
balance at
balance at
the start
the start
the start
the start
of the
of the
of the
of the
year
year
year
year
300,000
Granted as
Granted as
Granted as
Granted as
compensation
compensation
compensation
compensation
-
Vested
Vested
Vested
Vested
-
Exercised
Exercised
Exercised
Exercised
-
Balance
Balance
Balance
Balance
at the
at the
at the
at the
end of
end of
end of
end of
the year
the year
the year
the year
300,000
Vested
Vested
Vested
Vested
and
and
and
and
Exercis----
Exercis
Exercis
Exercis
ableableableable
-
Unvested
Unvested
Unvested
Unvested
300,000
Name
Name
NameName
Balance at the start
Balance at the start
Balance at the start
Balance at the start
of the year
of the year
of the year
of the year
Other changes
Other changes
Other changes
Other changes
during the year
during the year
during the year
during the year
Balance at the end
Balance at the end
Balance at the end
Balance at the end
of the year
of the year
of the year
of the year
Held
Held
Held Held
nominally
nominally
nominally
nominally
NonNonNonNon----EEEExecutive Directors
xecutive Directors
xecutive Directors
xecutive Directors
Mr Michael Smith
Mr Rob Bransby
Mr Mark Dutton
Ms Anne Templeman Jones
Executive Directors
Executive Directors
Executive Directors
Executive Directors
Mr Keith John
Other Key management Personnel
Other Key management Personnel
Other Key management Personnel
Other Key management Personnel
Ms Lisa Stedman
Mr Leslie Crockett
62,500
35,000
306,483
-
-
-
-
-
62,500
35,000
306,483
-
62,500
-
306,483
-
8,113,216
100,000
8,213,216
8,213,216
275,000
163,984
-
-
275,000
163,984
125,000
13,984
k)k)k)k) Loans given to Key Management Personnel
Loans given to Key Management Personnel
Loans given to Key Management Personnel
Loans given to Key Management Personnel
No loans were made to Key Management Personnel during the financial year.
l)l)l)l) Other transactions with Key Management Personnel
Other transactions with Key Management Personnel
Other transactions with Key Management Personnel
Other transactions with Key Management Personnel
i)i)i)i)
Leases entered into with related parties
Leases entered into with related parties
Leases entered into with related parties
Leases entered into with related parties
The Managing Director, Mr Keith John is a beneficiary of the John Family Primary Investments Trust and
the sole Director and Secretary of Avy Nominees Pty Limited, which is trustee of the John Family Primary
Investments Trust (JFPIT).
JFPIT is the owner of three premises which are leased by the Company. The premises, the subject of the
leases, are situated at 118 Royal Street, East Perth, 188 Bennett Street, East Perth and 190 Bennett Street,
East Perth. The lease contracts are at arm’s length.
For the year ended 30 June 2015 the total amount of $330,000 has been paid to JFPIT in respect of the
leases.
The leases for 118 Royal Street, East Perth and 188 Bennett Street, East Perth expire on 31 December 2015
and are not expected to be renewed. The lease for 190 Bennett Street, East Perth expires on 31
December 2015 and is expected to be renewed.
Pioneer Credit Limited
30 June 2015
Page 27
Directors’ report
Directors’ report
Directors’ report
Directors’ report
ii)ii)ii)ii)
Design consulting agreement
Design consulting agreement
Design consulting agreement
Design consulting agreement
The Managing Director, Mr Keith John is a beneficiary of the John Family Building and Design Trust and
the sole Director and Secretary of Avy Nominees Pty Limited, which is trustee of the John Family Building
and Design Trust trading as Alana John Design (AJD).
The Company and AJD are parties to an agreement for design and project management services for the
commercial fit-out of the Company’s office premises. The agreement commenced on 1 November 2013
and continues on a monthly basis until terminated by either party on one month’s notice.
For the year ended 30 June 2015 the total amount of $160,917 has been paid for the services.
Following completion of the fit-out of the Company’s premises the agreement with AJD was finalised on
31 July 2015.
iii)iii)iii)iii)
ssociate
Investment in associate
Investment in a
ssociate
ssociate
Investment in a
Investment in a
At a meeting of the Board of the Company on 26 March 2015, the Board (with Mr Keith John abstaining)
approved the Company presenting an offer to Midbridge Investments Pty Ltd (MB) to acquire all of its
shareholding in ASX listed Goldfields Money Limited in an off-market transaction at a price of $1.04 per
share. The shareholding represented approximately 14.1% of the issued equity in Goldfields Money Ltd.
MB is a private investment vehicle of the Company’s Managing Director Mr Keith R John.
On the 8 April 2015 the Company formally presented its offer to MB which was accepted.
The offer was for an amount of $2,302,972.88. The sum was paid by instalments and settled in full during
the reporting period. Neither MB, Mr Keith John or any associate of those parties received any interest,
financial accommodation or benefit as a result of being paid by instalment.
Shares under option
Shares under option
Shares under option
Shares under option
Unissued ordinary shares of Pioneer Credit Limited under option at the date of the report are as follows:
Name
Name
NameName
Mr Michael Smith
Mr Michael Smith
Date options granted
options granted
Date
options granted
options granted
Date Date
7 February 2014
7 February 2014
Expiry date
Expiry date
Expiry date
Expiry date
1 May 2018
1 May 2019
Issue price
Issue price
Issue price
Issue price
$1.92
$1.92
Number under option
Number under option
Number under option
Number under option
50,000
250,000
Shares issued on the exercise of options
Shares issued on the exercise of options
Shares issued on the exercise of options
Shares issued on the exercise of options
No shares were issued in the reporting period on the exercise of options.
Insurance of officers
Insurance of officers
Insurance of officers
Insurance of officers
During the financial year, Pioneer Credit Limited paid a premium of $43,833 (2014 $21,043) to insure the
Directors and Secretaries of the Company and its Australian-based controlled entities. The insurance
premium increased significantly once Pioneer was admitted to the official list of the Australian Stock
Exchange on 1 May 2014.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that
may be brought against the officers in their capacity as officers of entities in the Group, and any other
payments arising from liabilities incurred by the officers in connection with such proceedings. This does
not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or the
improper use by the officers of their position or of information to gain advantage for themselves or
Pioneer Credit Limited
30 June 2015
Page 28
someone else or to cause detriment to the Company. It is not possible to apportion the premium
between amounts relating to the insurance against legal costs and those relating to other liabilities.
Directors’ report
Directors’ report
Directors’ report
Directors’ report
Indemnity of auditors
Indemnity of auditors
Indemnity of auditors
Indemnity of auditors
Pioneer Credit Limited has agreed to indemnify its auditors, PricewaterhouseCoopers, to the extent
permitted by law, against any claim by a third party arising from its breach of their audit engagement
agreement. The indemnity stipulates that Pioneer Credit Limited will meet the full amount of any such
liabilities including a reasonable amount of legal costs.
ompany
Proceedings on behalf of the Company
Proceedings on behalf of the C
ompany
ompany
Proceedings on behalf of the C
Proceedings on behalf of the C
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.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court
under section 237 of the Corporations Act 2001.
audit services
NonNonNonNon----audit services
audit services
audit services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties
where the auditor’s expertise and experience with the Company and / or the Group are important.
Details of the amounts paid or payable to the auditor (PricewaterhouseCoopers Australia) for non-audit
services provided during the year are set out below.
The Board of Directors has considered the position and, in accordance with advice received from the
audit committee, is satisfied that the provision of the non-audit services is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied
that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor
independence requirements of the Corporations Act 2001 for the following reasons:
•
all non-audit services have been reviewed by the Audit Committee to ensure they do not impact the
impartiality and objectivity of the auditor; and
• none of the services undermine the general principles relating to auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants.
Pioneer Credit Limited
30 June 2015
Page 29
During the year the following fees were paid or payable for non-audit services provided by the auditor of
the parent entity, its related practices and non-related audit firms
Directors’ report
Directors’ report
Directors’ report
Directors’ report
Other assurance services
Other assurance services
Other assurance services
Other assurance services
Network firms of PricewaterhouseCoopers Australia
Network firms of PricewaterhouseCoopers Australia
Network firms of PricewaterhouseCoopers Australia
Network firms of PricewaterhouseCoopers Australia
Special Purpose Review Half Year
Total remuneration for other assurance services
Total remuneration for other assurance services
Total remuneration for other assurance services
Total remuneration for other assurance services
Taxation services
Taxation services
Taxation services
Taxation services
PricewaterhouseCoopers Australia
PricewaterhouseCoopers Australia
PricewaterhouseCoopers Australia
PricewaterhouseCoopers Australia
International tax consulting
Tax compliance services
Total remuneration for taxation services
Total remuneration for taxation services
Total remuneration for taxation services
Total remuneration for taxation services
Other services
Other services
Other services
Other services
International Network firms of PricewaterhouseCoopers Australia
International Network firms of PricewaterhouseCoopers Australia
International Network firms of PricewaterhouseCoopers Australia
International Network firms of PricewaterhouseCoopers Australia
Payroll services
ervices
other services
Total remuneration for other s
Total remuneration for
ervices
ervices
other s
other s
Total remuneration for
Total remuneration for
audit services
Total remuneration for non----audit services
Total remuneration for non
audit services
audit services
Total remuneration for non
Total remuneration for non
2015
2015
2015
2015
$$$$
2014
2014
20142014
$$$$
-
----
62,943
62,943
62,943
62,943
62,943
34,526
134,528
169,054
169,054
169,054
169,054
12,500
13,464
25,964
25,964
25,964
25,964
2,137
2,137
-
-
171,191
171,191
171,191
171,191
88,907
88,907
88,907
88,907
A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations
Act 2001 is set out on page 31.
Rounding of amounts
Rounding of amounts
Rounding of amounts
Rounding of amounts
The Company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and
Investments Commission, relating to the ‘rounding off’ of amounts in the Directors’ report. Amounts in
the Directors’ report have been rounded off in accordance with that Class Order to the nearest thousand
dollars, or in certain cases, to the nearest dollar.
This report is made in accordance with a resolution of Directors.
Keith
John
Keith John
John
John
Keith
Keith
Managing Director
Perth
20 August 2015
Pioneer Credit Limited
30 June 2015
Page 30
Auditor’s Independence Declaration
As lead auditor for the audit of Pioneer Credit Limited for the year ended 30 June 2015, I declare that
to the best of my knowledge and belief, there have been:
a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Pioneer Credit Limited and the entities it controlled during the period.
William P R Meston
Partner
PricewaterhouseCoopers
Perth
20 August 2015
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Page 31
Corporate Governance Statement
Corporate Governance Statement
Corporate Governance Statement
Corporate Governance Statement
Pioneer Credit Limited and the Board are committed to achieving and demonstrating the highest
standards of corporate governance. Pioneer Credit Limited has reviewed its corporate governance
practices against the Corporate Governance Principles and Recommendations (3rd edition) published by
the ASX Corporate Governance Council.
The 2015 corporate governance statement is dated as at 30 June 2015 and reflects the corporate
governance practices in place throughout the 2015 financial year. The 2015 corporate governance
statement was approved by the board on 20 August 2015. A description of the Group's current corporate
governance practices is set out in the Group's corporate governance statement which can be viewed at
http://www.pioneercredit.com.au/corporate/investor-centre/corporate-governance-statement/
Pioneer Credit Limited
30 June 2015
Page 32
Financial Statements
Financial Statements
Financial Statements
Financial Statements
Pioneer Credit Limited ABN 44
Pioneer Credit Limited ABN 44 103103103103 003003003003 505505505505
Pioneer Credit Limited ABN 44
Pioneer Credit Limited ABN 44
30 June 2015
Annual report ---- 30 June 2015
Annual report
30 June 2015
30 June 2015
Annual report
Annual report
Contents
Contents
Contents
Contents
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated statement of cash flows
Contents of the notes to the consolidated financial statements
Directors’ declaration
Independent auditor’s report to the members
34
35
36
37
38
94
95
These financial statements are the consolidated financial statements of the Consolidated Entity consisting
of Pioneer Credit Limited and its subsidiaries. A list of subsidiaries is included in note 14. The financial
statements are presented in the Australian currency.
Pioneer Credit Limited is a Company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business is:
Pioneer Credit Limited
Level 6, 108 St Georges Terrace
Perth WA 6000
The financial statements were authorised for issue by the Directors on 20 August 2015. The Directors
have the power to amend and reissue the financial statements.
Pioneer Credit Limited
30 June 2015
Page 33
Consolidated statement of comprehensive income
Consolidated statement of comprehensive income
Consolidated statement of comprehensive income
Consolidated statement of comprehensive income
NoteNoteNoteNote
Revenue from operations
Revenue from operations
Revenue from operations
Revenue from operations
Other income
Employee expenses
Rental expenses
Direct expenses
Information technology and communications
Professional expenses
Depreciation and amortisation
Travel and entertainment
Other expenses
Finance expenses
Share of profit of associate accounted for using the equity method
Profit before income tax
Profit before income tax
Profit before income tax
Profit before income tax
Income tax expense
Profit from continuing operations
Profit from continuing operations
Profit from continuing operations
Profit from continuing operations
Total comprehensive income for the year
Total comprehensive income for the year
Total comprehensive income for the year
Total comprehensive income for the year
Total comprehensive income for the year is attributable to:
Total comprehensive income for the year is attributable to:
Total comprehensive income for the year is attributable to:
Total comprehensive income for the year is attributable to:
Owners of Pioneer Credit Limited
Earnings per share for profit attributable to the ordinary equity holders of
Earnings per share for profit attributable to the ordinary equity holders of
Earnings per share for profit attributable to the ordinary equity holders of
Earnings per share for profit attributable to the ordinary equity holders of
the Company:
the Company:
the Company:
the Company:
Basic earnings per share
Diluted earnings per share
3
3
5
5
6
22
22
2015
2015
2015
2015
$’000
$’000
$’000
$’000
2014
2014
20142014
$’000
$’000
$’000
$’000
38,697
38,697
38,697
38,697
91919191
38,788
38,788
38,788
38,788
25,694
67
25,761
(16,893)
(16,893)
(16,893)
(16,893)
(2,059)
(2,059)
(2,059)
(2,059)
(1,846)
(1,846)
(1,846)
(1,846)
(1,772)
(1,772)
(1,772)
(1,772)
(1,169)
(1,169)
(1,169)
(1,169)
(938)
(938)
(938)
(938)
(469)
(469)
(469)
(469)
(1,425)
(1,425)
(1,425)
(1,425)
(1,513)
(1,513)
(1,513)
(1,513)
8888
10,712
10,712
10,712
10,712
(3,271)
(3,271)
(3,271)
(3,271)
7,441
7,441
7,441
7,441
7,441
7,441
7,441
7,441
(11,718)
(1,294)
(2,747)
(1,320)
(2,908)
(379)
(570)
(1,054)
(1,412)
-
2,359
(1,312)
1,047
1,047
7,441
7,441
7,441
7,441
1,047
Cents
Cents
Cents
Cents
Cents
16.40
16.40
16.40
16.40
16.40
16.40
16.40
16.40
7.97
7.97
The above consolidated statement of comprehensive income should be read in conjunction with the
accompanying notes.
Pioneer Credit Limited
30 June 2015
Page 34
Consolidated balance sheet
Consolidated balance sheet
Consolidated balance sheet
Consolidated balance sheet
ASSETS
ASSETS
ASSETS
ASSETS
Current assets
Current assets
Current assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Current tax receivables
Financial assets at fair value through profit or loss
Total current assets
Total current assets
Total current assets
Total current assets
NonNonNonNon----current assets
current assets
current assets
current assets
Property, plant and equipment
Intangible assets
Investments accounted for using the equity method
Other non-current assets
Deferred tax assets
Financial assets at fair value through profit or loss
current assets
Total non----current assets
Total non
current assets
current assets
Total non
Total non
Total assets
Total assets
Total assets
Total assets
LIABILITIES
LIABILITIES
LIABILITIES
LIABILITIES
Current liabilities
Current liabilities
Current liabilities
Current liabilities
Trade and other payables
Borrowings
Current tax liabilities
Accruals, provisions and other liabilities
liabilities
Total current liabilities
Total current
liabilities
liabilities
Total current
Total current
liabilities
current liabilities
NonNonNonNon----current
liabilities
liabilities
current
current
Borrowings
Provisions and other liabilities
current liabilities
Total non----current liabilities
Total non
current liabilities
current liabilities
Total non
Total non
Total liabilities
Total liabilities
Total liabilities
Total liabilities
Net assets
Net assets
Net assets
Net assets
EQUITY
EQUITY
EQUITY
EQUITY
Contributed equity
Other reserves
Retained earnings
Capital and reserves attributable to the owners of Pioneer Credit Limited
9(a)
9(f)
9(g)
Total equity
Total equity
Total equity
Total equity
NoteNoteNoteNote
30 June 2015
2015
30 June
2015
2015
30 June
30 June
$’000
$’000
$’000
$’000
30 June 2014
2014
30 June
20142014
30 June
30 June
$’000
$’000
$’000
$’000
7(a)
7(a)
7(b)
8(a)
8(c)
8(b)
7(b)
7(c)
7(d)
7(d)
2,168
2,168
2,168
2,168
2,190
2,190
2,190
2,190
411411411411
----
32,576
32,576
32,576
32,576
37,345
37,345
37,345
37,345
4,335
4,335
4,335
4,335
384384384384
2,321
2,321
2,321
2,321
45454545
1,129
1,129
1,129
1,129
49,346
49,346
49,346
49,346
57,560
57,560
57,560
57,560
94,905
94,905
94,905
94,905
3,851
3,851
3,851
3,851
11,874
11,874
11,874
11,874
1,199
1,199
1,199
1,199
1,888
1,888
1,888
1,888
18,812
18,812
18,812
18,812
20,999
20,999
20,999
20,999
2,216
2,216
2,216
2,216
23,215
23,215
23,215
23,215
42,027
42,027
42,027
42,027
52,878
52,878
52,878
52,878
45,464
45,464
45,464
45,464
1,01,01,01,073737373
6,341
6,341
6,341
6,341
52,878
52,878
52,878
52,878
52,878
52,878
52,878
52,878
4,458
2,570
246
327
29,183
36,784
2,537
161
-
61
1,198
29,560
33,517
70,301
11,352
5,376
-
2,599
19,327
2,012
1,360
3,372
22,699
47,602
45,464
1,037
1,101
47,602
47,602
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
Pioneer Credit Limited
30 June 2015
Page 35
changes in equity
Consolidated statement of changes in equity
Consolidated statement of
changes in equity
changes in equity
Consolidated statement of
Consolidated statement of
Contributed
Contributed
Contributed
Contributed
equity
equity
equity
equity
$’000
$’000
$’000
$’000
Convertible
Convertible
Convertible
Convertible
Redeemable
Redeemable
Redeemable
Redeemable
Preference
Preference
Preference
Preference
Shares
Shares
Shares
Shares
$’000
$’000
$’000
$’000
Share
Share
Share
Share
Based
Based
Based
Based
Payment
Payment
Payment
Payment
Reserve
Reserve
Reserve
Reserve
$’000
$’000
$’000
$’000
Balance at 1 July 2013
Balance at 1 July 2013
Balance at 1 July 2013
Balance at 1 July 2013
3,674
5,417
Total comprehensive income for
the year
Transactions with owners in theiriririr
Transactions with owners in the
Transactions with owners in the
Transactions with owners in the
capacity as owners
capacity as owners
capacity as owners
capacity as owners
Contributions of equity, net of transaction
costs
CRPS B&C conversion to contributed
equity
CRPS A conversion to contributed equity
Current and deferred tax through equity
Treasury shares issued and share based
payments
Employee share scheme
Return of Capital and Dividend Paid
Balance at 30 June 2014
Balance at 30 June 2014
Balance at 30 June 2014
Balance at 30 June 2014
-
38,543
7,754
5,413
656
403
91
(11,070)
41,790
45,464
-
-
-
(5,413)
(4)
-
-
-
(5,417)
Retained
Retained
Retained
Retained
earnings
earnings
earnings
earnings
$’000
$’000
$’000
$’000
Total
Total
Total
Total
equity
equity
equity
equity
$’000
$’000
$’000
$’000
3,984
13,075
1,047
1,047
-
-
-
-
-
38,543
7,754
-
652
1,440
-
(3,930)
(3,930)
91
(15,000)
33,480
-
-
-
-
-
-
1,037
-
-
1,037
NoteNoteNoteNote
Contributed
Contributed
Contributed
Contributed
equity
equity
equity
equity
$’000
$’000
$’000
$’000
45,464
Balance at 1 July 2014
Balance at 1 July 2014
Balance at 1 July 2014
Balance at 1 July 2014
Total comprehensive income for
the year
in theiriririr
Transactions with owners in the
Transactions with owners
in the
in the
Transactions with owners
Transactions with owners
capacity of owners
capacity of owners
capacity of owners
capacity of owners
Treasury shares and share based
payments
Dividends declared and paid
9(f)
13(b)
Balance at 30 June 2015
Balance at 30 June 2015
Balance at 30 June 2015
Balance at 30 June 2015
45,464
-
1,037
1,101
47,602
Convertible
Convertible
Convertible
Convertible
Redeemable
Redeemable
Redeemable
Redeemable
Preference
Preference
Preference
Preference
Shares
Shares
Shares
Shares
$’000
$’000
$’000
$’000
Share
Share
Share
Share
Based
Based
Based
Based
Payment
Payment
Payment
Payment
Reserve
Reserve
Reserve
Reserve
$’000
$’000
$’000
$’000
Retained
Retained
Retained
Retained
earnings
earnings
earnings
earnings
$’000
$’000
$’000
$’000
Total
Total
Total
Total
equity
equity
equity
equity
$’000
$’000
$’000
$’000
-
-
-
-
-
-
1,037
1,101
47,602
-
7,441
7,441
36
-
36
-
36
(2,201)
(2,201)
(2,201)
(2,165)
1,073
6,341
52,878
-
-
-
-
The above consolidated statement of changes in equity should be read in conjunction with the
accompanying notes.
Pioneer Credit Limited
30 June 2015
Page 36
Consolidated statement of cash flows
Consolidated statement of cash flows
Consolidated statement of cash flows
Consolidated statement of cash flows
NoteNoteNoteNote
30 June 2015
2015
30 June
2015
2015
30 June
30 June
$’000
$’000
$’000
$’000
30 June 2014
2014
30 June
20142014
30 June
30 June
$’000
$’000
$’000
$’000
Cash flows from operating activities
Cash flows from operating activities
Cash flows from operating activities
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)
Payments to suppliers and employees (inclusive of goods and services tax)
Interest received
Interest paid
Net income taxation paid
activities
Net cash inflow from operating activities
Net cash inflow from operating
activities
activities
Net cash inflow from operating
Net cash inflow from operating
Cash flows from investing activities
Cash flows from investing activities
Cash flows from investing activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for intangible assets
Acquisitions of financial assets at fair value through profit or loss
Payment for investment in associate
Proceeds of loans from related parties
Repayment of loans from related parties
Proceeds from the sale of property, plant and equipment
investing activities
Net cash outflow from investing activities
Net cash outflow from
investing activities
investing activities
Net cash outflow from
Net cash outflow from
Cash flows from financing activities
Cash flows from financing activities
Cash flows from financing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Dividends paid to Company’s shareholders
Proceeds from issue of ordinary shares
Return of capital
Capital raising costs
Treasury shares loan repayment
Proceeds from issues of convertible redeemable preference shares
activities
Net cash inflow from financing activities
Net cash inflow from financing
activities
activities
Net cash inflow from financing
Net cash inflow from financing
Cash flows from financing activities
Cash flows from financing activities
Cash flows from financing activities
Cash flows from financing activities
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
the year
Cash and cash equivalents at the end of the year
Cash and cash equivalents at the end of
the year
the year
Cash and cash equivalents at the end of
Cash and cash equivalents at the end of
10(a)
8(a)
8(c)
15
13(b)
9(a)
9(a)
9(a)
9(c)
55,629
55,629
55,629
55,629
(24,949)
(24,949)
(24,949)
(24,949)
30,680
30,680
30,680
30,680
91919191
(919)
(919)
(919)
(919)
(1,676)
(1,676)
(1,676)
(1,676)
28,176
28,176
28,176
28,176
(1,599)
(1,599)
(1,599)
(1,599)
(345)
(345)
(345)
(345)
(49,433)
(49,433)
(49,433)
(49,433)
(2,313)
(2,313)
(2,313)
(2,313)
----
----
8888
(53,682)
(53,682)
(53,682)
(53,682)
37,076
37,076
37,076
37,076
(11,665)
(11,665)
(11,665)
(11,665)
(2,201)
(2,201)
(2,201)
(2,201)
----
----
----
6666
----
23,216
23,216
23,216
23,216
(2,290)
(2,290)
(2,290)
(2,290)
4,458
4,458
4,458
4,458
2,168
2,168
2,168
2,168
35,779
(18,295)
17,484
67
(708)
(3,201)
13,642
(701)
(226)
(22,314)
-
1,567
(1,621)
-
(23,295)
26,061
(35,222)
(3,930)
41,120
(11,070)
(4,233)
319
99
13,144
3,491
967
4,458
The above consolidated statement of cash flows should be read in conjunction with the accompanying
notes.
Pioneer Credit Limited
30 June 2015
Page 37
Contents of the notes to the consolidated financial statements
Contents of the notes to the consolidated financial statements
Contents of the notes to the consolidated financial statements
Contents of the notes to the consolidated financial statements
period
reporting period
current reporting
changes inininin thethethethe current
Significant changes
Significant
period
period
reporting
reporting
current
current
changes
changes
Significant
Significant
1 Significant changes in the current reporting period
39
calculated
numbers areareareare calculated
HoHoHoHowwww numbers
calculated
calculated
numbers
numbers
Individually significant items
2 Segment information
3 Revenue from operations
4
5 Other expense items
6
Income tax expense
7 Financial assets and financial liabilities
8 Non-financial assets and liabilities
9 Equity
10 Cash flow information
RiskRiskRiskRisk
11 Critical accounting estimates and judgements
12 Financial risk management
13 Capital management
Group structure
Group structure
Group structure
Group structure
14 Subsidiaries
15 Associates
Unrecognised items
Unrecognised items
Unrecognised items
Unrecognised items
16 Contingencies
17 Commitments
18 Events occurring after the reporting period
Other information
Other information
Other information
Other information
19 Related party transactions
20 Share-based payments
21 Remuneration of auditors
22 Earnings per share
23 Deed of cross guarantee
24 Assets pledged as security
25 Parent entity financial information
26 Summary of significant accounting policies
41
41
42
43
44
45
56
60
63
65
65
69
72
73
76
76
76
78
80
82
83
84
84
84
85
Pioneer Credit Limited
30 June 2015
Page 38
1)1)1)1) Significant changes in the current reporting period
Significant changes in the current reporting period
Significant changes in the current reporting period
Significant changes in the current reporting period
Significant events and transactions that have affected the Group’s financial position and performance
during the period under review are as follows:
statements
otes to the consolidated financial statements
NNNNotes to the consolidated financial
statements
statements
otes to the consolidated financial
otes to the consolidated financial
Additional Revenue Stream
Additional Revenue Stream
Additional Revenue Stream
Additional Revenue Stream
Consistent with our long-standing approach of working towards a complete understanding of the
characteristics of the customer portfolios we purchase, and to ensure we realise the appropriate value
from those portfolios, the Group has successfully entered the secondary sale market for portfolios of
accounts that we believe:
• will not meet our requirements for the customers to evolve into the ‘new consumer’ (Part IX
customers and customers we are unable to secure realistic payment arrangements with), and
• where the value to be realised from a portfolio sale provides the greatest expected value to the
Group.
The Group will continue to manage value on an ongoing basis and make decisions about whether long
term liquidation or selling financial assets is expected to maximise the return on the portfolio.
Investment in Associate
Investment in Associate
Investment in Associate
Investment in Associate
As outlined in our 2014 Prospectus and updates to the market since listing on the ASX, the Group is
working towards the expansion of its revenue streams through the offering of financial products in the
2015 calendar year.
An equity stake in Goldfields Money Limited (ASX: GMY) was acquired during the financial year.
Goldfields Money Limited (Goldfields) is the only ASX listed Western Australian based Authorised Deposit-
taking Institution. The Group entered into a Memorandum of Understanding with Goldfields for the
development of banking products. This agreement is a significant step towards the Group’s long term
goal of offering a wide range of financial products to our customers.
See note 15 for additional information on the investment in Goldfields Money Limited.
Pioneer Credit Limited
30 June 2015
Page 39
otes to the consolidated financial statements
NNNNotes to the consolidated financial statements
otes to the consolidated financial statements
otes to the consolidated financial statements
ow numbers are calculated
HHHHow numbers are calculated
ow numbers are calculated
ow numbers are calculated
This section provides additional information about those individual line items in the financial statements
that the Directors consider most relevant in the context of the operations of the entity, including:
•
•
•
accounting policies that are relevant for an understanding of the items recognised in the financial
statements. These cover situations where the accounting standards either allow a choice or do not
deal with a particular type of transaction
analysis and sub-totals
information about estimates and judgements made in relation to particular items.
Individually significant items
2 Segment information
3 Revenue from operations
4
5 Other expense items
6
Income tax expense
7 Financial assets and financial liabilities
8 Non-financial assets and liabilities
9 Equity
10 Cash flow information
41
41
42
43
44
45
56
60
63
Pioneer Credit Limited
30 June 2015
Page 40
the consolidated financial statements
otes to the consolidated financial statements
NNNNotes to
the consolidated financial statements
the consolidated financial statements
otes to
otes to
2)2)2)2) Segment information
Segment information
Segment information
Segment information
For management purposes, the Company is organised into one main business segment, which is the
provision of financial services, specialising in acquiring and servicing unsecured retail debt portfolios in
Australia and more recently the sale of certain portfolios. All of the Company’s activities are interrelated,
and each activity is dependent on the others. Accordingly, all significant operating decisions are based
upon analysis of the Company as one segment. The financial results from this segment are equivalent to
the financial statements of the Company as a whole. The Company operated in one geographical
segment being Australia. The Company does not have any major customers which comprise more than
10% of revenue.
The Company continues to monitor the appropriateness of segment reporting particularly with the
introduction of the investment in associate during the period under review. Segment reporting may be
appropriate for future reporting periods.
3)3)3)3) Revenue from operations
Revenue from operations
Revenue from operations
Revenue from operations
From continuing operations
From continuing operations
From continuing operations
From continuing operations
Operating revenues
Operating revenues
Operating revenues
Operating revenues
Liquidation of cash flows from purchased debt portfolios
Proceeds from the sale of purchased debt portfolios
Change in value of purchased debt portfolios
Net gain on financial assets – purchased debt portfolios
Services
Revenue recognition
Revenue recognition
Revenue recognition
Revenue recognition
2015
2015
2015
2015
$’000
$’000
$’000
$’000
2014
2014
20142014
$’000
$’000
$’000
$’000
51,707
51,707
51,707
51,707
3,526
3,526
3,526
3,526
(16,702)
(16,702)
(16,702)
(16,702)
38,531
38,531
38,531
38,531
166166166166
38,697
38,697
38,697
38,697
37,230
-
(11,814)
25,416
278
25,694
Revenue is measured at the fair value of the consideration received or receivable.
The Group recognises revenue when the amount of revenue can be reliably measured, 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 bases its estimates on historical results, taking into
consideration the type of customer, the type of transaction and the specifics of each arrangement.
Revenue is recognised for the major business activities using the methods outlined below.
Customer payments, Debt purchase income
Customer payments, Debt purchase income
Customer payments, Debt purchase income
Customer payments, Debt purchase income
Net gains on financial assets are disclosed in the consolidated statement of comprehensive income as
cash flows from purchased debt portfolios net of any change in fair value of the portfolios. The Group
recognises purchased debt portfolios as financial assets at fair value through profit or loss.
The net gain on these assets is disclosed as revenue in the consolidated statement of comprehensive
income.
Net gains or losses on financial assets measured at fair value are recognised as they accrue.
Pioneer Credit Limited
30 June 2015
Page 41
otes to the consolidated financial statements
NNNNotes to the consolidated financial statements
otes to the consolidated financial statements
otes to the consolidated financial statements
Sale of purchased debt portfolios
Sale of purchased debt portfolios
Sale of purchased debt portfolios
Sale of purchased debt portfolios
Revenue from the sale of purchased debt portfolios is recognised to the extent that it is probable that the
revenue benefits will flow to the Group and the revenue can be reliably measured.
Services Income
Services Income
Services Income
Services Income
Revenue from rendering services is recognised to the extent that it is probable that revenue benefits will
flow to the Group and the revenue can be reliably measured.
Other income
Other income
Other income
Other income
Interest income
Other income recognition
Other income recognition
Other income recognition
Other income recognition
Interest income
Interest income
Interest income
Interest income
2015
2015
2015
2015
$’000
$’000
$’000
$’000
91919191
2014
2014
20142014
$’000
$’000
$’000
$’000
67
Interest income is recognised using the effective interest method.
4)4)4)4)
items
Individually significant items
Individually significant
items
items
Individually significant
Individually significant
The following items are significant to the financial performance of the Group, and so are listed separately
here. These specific costs have been included in profit before income tax.
Initial Public Offering Costs
Initial Public Offering Costs
Initial Public Offering Costs
Initial Public Offering Costs
Costs incurred to list on the stock exchange
Costs apportioned to capital raising
Commercial Claim
Commercial Claim
Commercial Claim
Commercial Claim
Settlement and settlement provision
Legal costs
Indirect Taxation
Indirect Taxation
Indirect Taxation
Indirect Taxation
Finalisation of prior periods indirect taxation position
Professional costs
2015
2015
2015
2015
$’000
$’000
$’000
$’000
----
----
----
166166166166
15151515
181181181181
169169169169
186186186186
355355355355
2014
2014
20142014
$’000
$’000
$’000
$’000
4,233
(2,175)
2,058
420
228
648
312
-
312
Pioneer Credit Limited
30 June 2015
Page 42
otes to the consolidated financial statements
NNNNotes to the consolidated financial statements
otes to the consolidated financial statements
otes to the consolidated financial statements
Initial Public Offering Costs
Initial Public Offering Costs
Initial Public Offering Costs
Initial Public Offering Costs
Pioneer Credit Limited was admitted to the official list of ASX Limited on Thursday 1 May 2014. Consistent
with the requirements of Australian Accounting Standards, the incremental costs that are directly
attributable to issuing new shares have been deducted from equity (net of any income tax benefit), and
costs that related to the stock market listing, or were otherwise not incremental and directly attributable
to issuing new shares, were recorded as an expense in the consolidated statement of comprehensive
income.
The nature of this cost item is that it will not recur in the future.
Commercial Claim
Commercial Claim
Commercial Claim
Commercial Claim
The prior period outstanding commercial dispute claim was finalised during the period under review. An
additional cost over and above the initial provision has been recognised. The full claim has now been
settled, with additional legal costs.
This claim has been settled and there is no future liability which could arise in this matter.
Indirect Taxation
Indirect Taxation
Indirect Taxation
Indirect Taxation
A previously uncertain interpretation of an indirect taxation position has been finalised in the period under
review with the assistance of professional advice.
The nature of this cost item is that it will not recur in the future.
5)5)5)5) Other expense items
Other expense items
Other expense items
Other expense items
This note provides a breakdown of specific costs included in profit before income tax.
Finance expenses
Finance expenses
Finance expenses
Finance expenses
Bank fees and borrowing expenses
Interest and finance charges paid / payable for financial liabilities
not at fair value through profit and loss
Interest on Convertible Redeemable Preference Shares
Employee benefits expense inclusive of on
costs
Employee benefits expense inclusive of on----costs
costs
costs
Employee benefits expense inclusive of on
Employee benefits expense inclusive of on
Share based payment modification
Share based payments
Chairman options
Depreciation and
amortisation
Depreciation and amortisation
amortisation
amortisation
Depreciation and
Depreciation and
Depreciation
Amortisation
2015
2015
2015
2015
$’000
$’000
$’000
$’000
2014
2014
20142014
$’000
$’000
$’000
$’000
594594594594
919919919919
----
1,513
1,513
1,513
1,513
----
----
30303030
30303030
816816816816
122122122122
938938938938
184
708
520
1,412
744
95
14
853
314
65
379
Pioneer Credit Limited
30 June 2015
Page 43
otes to the consolidated financial statements
NNNNotes to the consolidated financial statements
otes to the consolidated financial statements
otes to the consolidated financial statements
6)6)6)6)
Income tax expense
Income tax expense
Income tax expense
Income tax expense
This note provides an analysis of the Group’s income tax expense, shows what amounts are recognised
directly in equity and how the tax expense is affected by non-assessable and non-deductible items. It also
explains significant estimates made in relation to the Group’s tax position.
Income tax expense
Income tax expense
Income tax expense
Income tax expense
Current tax
Current tax
Current tax
Current tax
Current tax on profits for the year
Adjustments for current tax of prior periods
Deferred income tax
Total current tax expense
Income tax is attributable to:
Income tax is attributable to:
Income tax is attributable to:
Income tax is attributable to:
Profit from continuing operations
Deferred income tax (revenue) expense included in income tax expense comprises:
(Decrease) increase direct to equity
Decrease (increase) in deferred tax assets
facie tax payable
Numerical reconciliation of income tax expense to prima facie tax payable
Numerical reconciliation of income tax expense to prima
facie tax payable
facie tax payable
Numerical reconciliation of income tax expense to prima
Numerical reconciliation of income tax expense to prima
Profit from continuing operations before income tax expense
Profit from continuing operations before income tax expense
Profit from continuing operations before income tax expense
Profit from continuing operations before income tax expense
Tax at the Australian tax rate of 30.0% (2014 – 30.0%)
Non-deductible entertainment costs
Non-deductible provision for fringe benefits tax
Non-deductible CRPS interest
Non-deductible share based payments
(Over)under provision for prior year taxation
Share of net profits of associate
Other non-deductibles
expense
Income tax expense
Income tax
expense
expense
Income tax
Income tax
Amounts recognised directly in equity
Amounts recognised directly in equity
Amounts recognised directly in equity
Amounts recognised directly in equity
Aggregate current and deferred tax arising in the reporting period and not recognised in
Aggregate current and deferred tax arising in the reporting period and not recognised in
Aggregate current and deferred tax arising in the reporting period and not recognised in
Aggregate current and deferred tax arising in the reporting period and not recognised in
net profit or loss or other comprehensive income but directly debited or
credited to
net profit or loss or other comprehensive income but directly debited or credited to
credited to
credited to
net profit or loss or other comprehensive income but directly debited or
net profit or loss or other comprehensive income but directly debited or
equity:
equity:
equity:
equity:
Current tax – credited directly to equity
Net deferred tax – (debited) / credited directly to equity
2015
2015
2015
2015
$’000
$’000
$’000
$’000
3,327
3,327
3,327
3,327
(8)
(8)
(8)
(8)
(48)
(48)
(48)
(48)
3,271
3,271
3,271
3,271
2014
2014
20142014
$’000
$’000
$’000
$’000
1,672
175
(535)
1,312
10,712
10,712
10,712
10,712
2,359
(117)
(117)
(117)
(117)
69696969
(48)
(48)
(48)
(48)
460
(995)
(535)
2015
2015
2015
2015
$’000
$’000
$’000
$’000
2014
2014
20142014
$’000
$’000
$’000
$’000
10,712
10,712
10,712
10,712
2,359
3,214
3,214
3,214
3,214
20202020
19191919
----
12121212
(8)
(8)
(8)
(8)
(2)
(2)
(2)
(2)
16161616
3,271
3,271
3,271
3,271
708
29
1
156
243
175
-
-
1,312
2015
2015
2015
2015
$’000
$’000
$’000
$’000
2014
2014
20142014
$’000
$’000
$’000
$’000
117117117117
(117)
(117)
(117)
(117)
----
192
460
652
Pioneer Credit Limited
30 June 2015
Page 44
otes to the consolidated financial statements
NNNNotes to the consolidated financial statements
otes to the consolidated financial statements
otes to the consolidated financial statements
7)7)7)7)
Financial assets and financial liabilities
Financial assets and financial liabilities
Financial assets and financial liabilities
Financial assets and financial liabilities
This note provides information about the Group’s financial instruments, including:
•
•
•
•
an overview of all financial instruments held by the Group
specific information about each type of financial instrument
accounting policies
information about determining the fair value of the instruments, including judgements and estimation
uncertainty involved.
The Group holds the following financial instruments:
Financial assets
Financial assets
Financial assets
Financial assets
NoteNoteNoteNote
Assets at FVTPL
Assets at FVTPL
Assets at FVTPL
Assets at FVTPL
$’000
$’000
$’000
$’000
Financial
Financial
Financial
Financial
assets at
assets at
assets at
assets at
amortised cost
amortised cost
amortised cost
amortised cost
$’000
$’000
$’000
$’000
2015
2015
2015
2015
Cash and cash equivalents
Trade and other receivables * 7(a)
Financial assets at FVTPL 7(b)
2014
2014
20142014
Cash and cash equivalents
Trade and other receivables * 7(a)
Financial assets at FVTPL 7(b)
*excluding prepayments
Financial liabilities
Financial liabilities
Financial liabilities
Financial liabilities
-
-
81,922
81,922
-
-
58,743
58,743
2,168
2,190
-
4,358
4,458
2,570
-
7,028
Financial
Financial
Financial
Financial
liabilities at
liabilities at
liabilities at
liabilities at
amortised
amortised
amortised
amortised
cost
cost
cost
cost
$’000
$’000
$’000
$’000
NoteNoteNoteNote
2015
2015
2015
2015
Trade and other payables ** 7(c)
Borrowings
7(d)
Accruals, provisions and other liabilities
2014201420142014
Trade and other payables **
Borrowings
Accruals, provisions and other liabilities
**excluding non-financial liabilities
7(c)
7(d)
3,851
32,873
1,993
38,717
11,352
7,388
2,524
21,264
Total
Total
Total
Total
$’000
$’000
$’000
$’000
2,168
2,190
81,922
86,280
4,458
2,570
58,743
65,771
Total
Total
Total
Total
$’000
$’000
$’000
$’000
3,851
32,873
1,993
38,717
11,352
7,388
2,524
21,264
The Group’s exposure to various risks associated with the financial instruments is discussed in note 12.
The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each
class of financial assets mentioned above.
Pioneer Credit Limited
30 June 2015
Page 45
a)a)a)a) Trade and other receivables
Trade and other receivables
Trade and other receivables
Trade and other receivables
otes to the consolidated financial statements
NNNNotes to the consolidated financial statements
otes to the consolidated financial statements
otes to the consolidated financial statements
Trade receivables
Other receivables
Prepayments
2015
2015
2015
2015
NonNonNonNon----
current
current
current
current
$’000
$’000
$’000
$’000
Total
Total
Total
Total
$’000
$’000
$’000
$’000
Current
$’000
----
----
45454545
45454545
1,247
1,247
1,247
1,247
943943943943
456456456456
2,646
2,646
2,646
2,646
876
1,694
246
2,816
2014
Non-
current
$’000
-
-
61
61
Total
$’000
876
1,694
307
2,877
Current
Current
Current
Current
$’000
$’000
$’000
$’000
1,247
1,247
1,247
1,247
943943943943
411411411411
2,601
2,601
2,601
2,601
Further information relating to loans to related parties and Key Management Personnel is set out in note
19.
lassification as trade and other receivables
CCCClassification as trade and other receivables
lassification as trade and other receivables
lassification as trade and other receivables
Trade receivables are amounts due from customers for services performed in the ordinary course of
business. Other receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market. If recovery of the amounts is expected in one year or less they are
classified as current assets. If not, they are presented as non-current assets. Trade receivables are
generally due for settlement within 30 days and therefore are all classified as current. The Group’s
impairment and other accounting policies for trade and other receivables are outlined in notes 12(c) and
26(e) respectively.
Other receivables
Other receivables
Other receivables
Other receivables
These amounts generally arise from transactions outside the usual operating activities of the Group.
e of trade and other receivables
Fair value of trade and other receivables
Fair valu
e of trade and other receivables
e of trade and other receivables
Fair valu
Fair valu
Due to the short-term nature of the current receivables, their carrying amount is assumed to be the same
as their fair value. For the majority of the non-current receivables, the fair values are also not significantly
different to their carrying amounts.
Impairment and risk exposure
Impairment and risk exposure
Impairment and risk exposure
Impairment and risk exposure
Information about the impairment of trade and other receivables, their credit quality and the Group’s
exposure to credit risk, foreign currency risk and interest rate risk can be found in note 12(a) to 12(c).
None of the non-current receivables are impaired or past due but not impaired.
Pioneer Credit Limited
30 June 2015
Page 46
b)b)b)b) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include the following:
otes to the consolidated financial statements
NNNNotes to the consolidated financial statements
otes to the consolidated financial statements
otes to the consolidated financial statements
Purchased debt portfolios
Purchased debt portfolios
Purchased debt portfolios
Purchased debt portfolios
Current
Non-current
Movement on financial assets at fair value is as follows:
Movement on financial assets at fair value is as follows:
Movement on financial assets at fair value is as follows:
Movement on financial assets at fair value is as follows:
Current and
current
Current and nonnonnonnon----current
current
current
Current and
Current and
At beginning of period
Additions for the period, net of recourse *
Liquidation of cash flows from purchased debt portfolios
Sale of purchased debt portfolios
Net gain on financial assets – purchased debt portfolios
2015
2015
2015
2015
$’000
$’000
$’000
$’000
2014
2014
20142014
$’000
$’000
$’000
$’000
32,576
32,576
32,576
32,576
49,346
49,346
49,346
49,346
81,922
81,922
81,922
81,922
29,183
29,560
58,743
2015
2015
2015
2015
$’000
$’000
$’000
$’000
2014
2014
20142014
$’000
$’000
$’000
$’000
58,743
58,743
58,743
58,743
39,881
39,881
39,881
39,881
(51,707)
(51,707)
(51,707)
(51,707)
(3,526)
(3,526)
(3,526)
(3,526)
38,531
38,531
38,531
38,531
81,922
81,922
81,922
81,922
38,931
31,626
(37,230)
-
25,416
58,743
*
Recourse relates to PDP accounts returned, at cost, to the vendor partners per the terms of the debt purchasing arrangement
where the underlying account facility does not meet the contractual terms of the purchase arrangement.
i)i)i)i) Classification of financial assets at fair value through profit or loss
Classification of financial assets at fair value through profit or loss
Classification of financial assets at fair value through profit or loss
Classification of financial assets at fair value through profit or loss
Pioneer Credit Limited classifies purchased debt portfolios (PDP’s) at fair value through profit and loss
(FVTPL) as per AASB 139 Financial Instruments: Recognition and Measurement, paragraph 9 part (b) (ii)
because;
•
at initial recognition Pioneer designates PDP’s acquired as at fair value through profit or loss;
• Pioneer manages the PDPs and regularly evaluates their performance on a fair value basis in
accordance with a documented risk management or investment strategy;
• Pioneer has information on that basis about the PDPs and provides the information internally to the
Company's Key Management Personnel;
• Pioneer reports this relevant information in the comprehensive disclosures provided.
The strategy is to provide an overall return on the Company’s portfolio of investments, as opposed to any
particular individual customer contract. The Company maintains a documented investment strategy for
PDPs and under the Risk Management Policy the management and measurement of its PDPs is properly
documented in its Risk Register.
The performance management emphasis of the Group is on a total return basis focusing on growth in its
payment arrangement portfolios and the total return to the Group measured as operating profit after
taxation. The evaluation of performance on a total return basis is clearly required by the documented and
approved Key Performance Indicators under which the Group’s performance is evaluated.
Pioneer Credit Limited
30 June 2015
Page 47
otes to the consolidated financial statements
NNNNotes to the consolidated financial statements
otes to the consolidated financial statements
otes to the consolidated financial statements
When management decisions are made with respect to an investment in the portfolios or the liquidation
of cash flows, they are made from the point of view of the group of financial assets as a whole, as
opposed to on an individual asset basis. Monthly management reporting reports on returns expressed in
terms of overall portfolio return multiples on investment and internal rate of return. An important factor in
the investment strategy is to manage a reasonable level of volatility of returns in expectation of overall
long term value growth.
Purchased debt portfolios are initially recorded at acquisition cost, which on the basis of the transaction
being at arm’s length is considered to be fair value, and thereafter at fair value in the balance sheet, with
transaction costs expensed as incurred. In the absence of a sufficiently active market, the fair value of any
particular portfolio is determined based on a valuation technique. The valuation is based on the present
value of expected future cash flows. Note (iv) below explains how the fair value of purchased debt
portfolios is determined, including information regarding the key assumptions used.
The fair value gains or losses on financial assets are disclosed in the consolidated statement of
comprehensive income as part of cash flows from purchased debt portfolios net of any change in value.
Purchased debt portfolios are included as non-current assets, except for the amount of the portfolio that
is expected to be realised within 12 months of the balance sheet date, which is classified as a current
asset.
ii)ii)ii)ii) Amounts recognised in profit or loss
Amounts recognised in profit or loss
Amounts recognised in profit or loss
Amounts recognised in profit or loss
Changes in the fair value of financial assets at fair value through profit or loss are recorded as part of
revenue.
iii)iii)iii)iii) Risk exposure and fair value measurements
Risk exposure and fair value measurements
Risk exposure and fair value measurements
Risk exposure and fair value measurements
Information about the Group's exposure to price risk is provided in note 12. For information about the
methods and assumptions used in determining fair value please refer to note 7(v) below.
iv)iv)iv)iv) Fair value and fair value measurements
Fair value and fair value measurements
Fair value and fair value measurements
Fair value and fair value measurements
a)a)a)a) Fair value hierarchy
Fair value hierarchy
Fair value hierarchy
Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial
instruments that are recognised and measured at fair value in the financial statements. To provide an
indication about the reliability of the inputs used in determining fair value, the Group has classified its
financial instruments into the three levels prescribed under the accounting standards. An explanation of
each level follows underneath the table.
30 June 2015
30 June 2015
30 June 2015
30 June 2015
Financial assets
Financial assets at FVTPL
30 June 2014
30 June 2014
30 June 2014
30 June 2014
Financial assets
Financial assets at FVTPL
Level 1
Level 1
Level 1
Level 1
$’000
$’000
$’000
$’000
Level 2
Level 2
Level 2
Level 2
$’000
$’000
$’000
$’000
Level 3333
Level
Level
Level
$’000
$’000
$’000
$’000
Total
Total
Total
Total
$’000
$’000
$’000
$’000
----
----
----
81818181,,,,922922922922
81,922
----
58,743
58,743
58,743
58,743
58,743
Pioneer Credit Limited
30 June 2015
Page 48
otes to the consolidated financial statements
NNNNotes to the consolidated financial statements
otes to the consolidated financial statements
otes to the consolidated financial statements
Level 1:
Level 1:
Level 1:
Level 1:
The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and
trading and available-for-sale securities) is based on quoted market prices at the end of the reporting
period.
Level 2:
Level 2:
Level 2:
Level 2:
The fair value of financial instruments that are not traded in an active market (for example,
over-the-counter derivatives) is determined using valuation techniques which maximise the use of
observable market data and rely as little as possible on entity specific estimates. If all significant inputs
required to fair value an instrument are observable, the instrument is included in Level 2.
Level 3:
Level 3:
Level 3:
Level 3:
If one or more of the significant inputs is not based on observable market data, the instrument is included
in Level 3.
b)b)b)b) Transfers between levels
Transfers between levels
Transfers between levels
Transfers between levels
There were no transfers between levels in 2014 or 2015.
c)c)c)c) VVVValuation techniques used to derive fair values
aluation techniques used to derive fair values
aluation techniques used to derive fair values
aluation techniques used to derive fair values
The objective of valuation techniques is to arrive at a fair value measurement that reflects the price that
would be received to sell the asset or paid to transfer the liability in an orderly transaction between market
participants at the measurement date.
Level 3
Level 3
Level 3
Level 3
If one or more of the significant inputs is not based on observable market data (unobservable inputs), the
instrument is included in Level 3. Unobservable inputs are those not readily available in an active market
due to market illiquidity or complexity of the product. This is the case for PDPs for which there is not
considered to be a sufficiently active secondary market.
Consistent with the long-standing approach of working towards a complete understanding of the
characteristics of the customer portfolios the Group purchases, and to ensure Pioneer manage and
realise the appropriate value from those portfolios, Pioneer in FY15 commenced exploration of the
secondary sale market for portfolios of accounts that:
• will not meet our requirements for the customers to evolve into the ‘new consumer’ (i.e Part IX
customers and customers we are unable to secure realistic payment arrangements with); and
• where the value to be realised from a portfolio sale provides a better than expected value to the
Group.
The first successful sale of a small test portfolio was concluded in December 2014 and during the second
half of the financial year Pioneer completed additional successful sales of portfolios of customer
accounts.
The second half sales were of portfolios of Part IX accounts (also commonly referred to as bankruptcy
compromised accounts).
Pioneer Credit Limited
30 June 2015
Page 49
otes to the consolidated financial statements
NNNNotes to the consolidated financial statements
otes to the consolidated financial statements
otes to the consolidated financial statements
Pioneer engaged experts in the financial services brokerage market to facilitate the sale process including,
but not limited to, portfolio valuation, issuer approval, and sales execution and post sales processes.
The fair value of financial instruments that are not traded in an active market, the PDPs, is determined
using valuation techniques. These valuation techniques maximise the use of observable market data
where it is available and rely as little as possible on entity specific estimates.
The specific valuation technique used to determine the fair value of financial instruments is a Discounted
Cash Flow (DCF) which incorporates, at least, the following material variables:
• Expected liquidation rate
• Face value
• Cash flow liquidation period
• Discount rate
• Cost
Expressed as a percentage of the face value over time.
Of purchased debt portfolios.
The period over which cash flows liquidate.
Factors in a risk free interest rate and appropriate credit
adjustment for risks not built into the underlying expected
cash flows.
Acquisition cost of acquired PDPs.
d)d)d)d) Fair value measurements using significant unobservable
inputs
Fair value measurements using significant unobservable inputs
inputs
inputs
Fair value measurements using significant unobservable
Fair value measurements using significant unobservable
Analysis of change in fair value for the year ended 30 June 2015
Analysis of change in fair value for the year ended 30 June 2015
Analysis of change in fair value for the year ended 30 June 2015
Analysis of change in fair value for the year ended 30 June 2015
Actual versus forecast cash flow
Change in future forecast cash flows
Changes in valuation techniques
Changes in valuation techniques
Changes in valuation techniques
Changes in valuation techniques
2015
2015
2015
2015
$’000
$’000
$’000
$’000
11,003
27,528
38,531
There were no significant changes made to the discounted cash flow valuation applied in the current and
prior financial year. Within the valuation model there were improvements made based on observable
statistical evidence.
Pioneer Credit Limited
30 June 2015
Page 50
Valuation inputs and relationship to fair value
Valuation inputs and relationship to fair value
Valuation inputs and relationship to fair value
Valuation inputs and relationship to fair value
The following table summarises the quantitative impact on those elements of the purchased debt
portfolios that are sensitive to the significant unobservable inputs used in Level 3 fair value measurements:
nancial statements
otes to the consolidated financial statements
NNNNotes to the consolidated fi
nancial statements
nancial statements
otes to the consolidated fi
otes to the consolidated fi
Description
Description
Description
Description
Financial
Assets at Fair
Value
Through
Profit or Loss
Fair value
Fair value
Fair value
Fair value
$’000
$’000
$’000
$’000
Valuation
Valuation
Valuation
Valuation
technique
technique
technique
technique
Unobservable
Unobservable
Unobservable
Unobservable
inputs
inputs
inputs
inputs
Range of inputs
Range of inputs
Range of inputs
Range of inputs
Relationship to Fair
Relationship to Fair
Relationship to Fair
Relationship to Fair
Value
Value
Value
Value
81,922
Discounted
Cash
and
Validation
Flow
Expected
liquidation rate
1%
change
liquidation rate
in
Expected
liquidation rate
3%
change
liquidation rate
in
Cash
flow
liquidation
period
Discount rate
Impact of a seven
year
liquidation
period versus a six
year
liquidation
period
Variance
risk-
adjusted discount
rate by 100 bps
in
Discount rate
in
Variance
risk-
adjusted discount
rate by 300 bps
A reduction in liquidation
rate by 1% results in a
decrease in fair value on
cash
estimated
total
flows by $0.706m, an
increase
in an
results
increase in fair value on
total
cash
estimated
flows of $0.706m.
A reduction in liquidation
rate by 3% results in a
decrease in fair value on
cash
estimated
total
flows by $2.118m, an
increase
in an
results
increase in fair value on
total
cash
estimated
flows of $2.118m.
Results in an increase in
fair value of $1.611m.
fair
the
value.
The higher
risk-
adjusted rate the lower
the
A
reduction in rate by 100
bps results in an increase
in fair value by $1.230m,
an increase results in a
decrease in fair value of
$1.186m.
The higher
risk-
adjusted rate the lower
the
A
reduction in rate by 300
bps results in an increase
in fair value by $3.831m,
an increase results in a
decrease in fair value of
$3.434m.
value.
the
fair
A reasonably possible change in liquidation rates and discount rates has been determined to be plus or
minus 3%. A 1% change in liquidation rates and discount rates has also been disclosed for comparison
purposes only.
Pioneer Credit Limited
30 June 2015
Page 51
otes to the consolidated financial statements
NNNNotes to the consolidated financial statements
otes to the consolidated financial statements
otes to the consolidated financial statements
It is noted the weighted average discount rate for originated customer accounts, substantially comprising
credit cards and personal loans, have fluctuated within a range of 17.6% to 20.9% over the last two years
forming the basis of the above sensitivity range. In determining the weighted average discount rate the
key input is the current market rate for originated loans and advances with similar characteristics, for
example credit card or personal loan rates, appropriately risk adjusted.
For subsequent measurement, under AASB 139 Financial Instruments: Recognition and Measurement, the
other potential method for recognition and measurement is, if the prescribed definition is met, “Loans and
receivables” measured at amortised cost.
The difference between the carrying value under an amortised cost measurement approach and fair value
is expected to be within the reasonably possible range if the discount rate were to be varied as described
in the table above.
Historical aggregate debt purchases weighted by face value and investment
Face value acquired $843m with investment cost (not fair value) of $123m.
Pioneer Credit Limited
30 June 2015
Page 52
otes to the consolidated financial statements
NNNNotes to the consolidated financial statements
otes to the consolidated financial statements
otes to the consolidated financial statements
v)v)v)v) Valuation Process
Valuation Process
Valuation Process
Valuation Process
A key assumption in the valuation of the purchased debt portfolios is in determining the expected
liquidation rate. Assumptions about the
liquidation rate are based on originator and product
characteristics, payment history, market conditions and management experience.
At the time of purchase, the price paid is generally determined by an open market tender process in
which participants perform their own due diligence and determine the price they are willing to pay.
Existing in-house knowledge of the portfolio under offer or similar equivalents is utilised along with a
consideration of macro and micro economic factors assessed using the experience of senior
management.
Subsequent to purchase, fair value adjustments are made in line with expected customer payment
liquidations. An assessment of gross nominal future cash flow is made over periods varying from six to ten
years depending on the level of liquidation history and forecasting accuracy confidence based on
observable historical evidence within a portfolio. Discount rates used to present value the gross nominal
future cash flows incorporate a risk free rate and appropriate credit adjustment for risks not built into the
underlying cash flows, noting that the cash flows to which the rates are applied are appropriately risk
adjusted.
The valuation of a PDP requires estimation of:
a) the expected future cash flows;
b) the expected timing of receipt of those cash flows; and
c) the current discount rate.
Under amortised cost the valuation would in contrast to using the discount rate in c) instead utilise the
original effective interest rate extrapolated at investment date (nominated by the purchaser) and this rate
would not change over time. The estimation of cash flows and the estimation of their timing is broadly
the same as used in the fair value measurement.
At the end of each reporting period, under amortised cost, an entity shall assess whether there is any
objective evidence of impairment. If any such evidence exists, the entity shall determine the amount of
any impairment loss. Similarly if expectations of future cash flows were to subsequently increase a gain
would be recognised, calculated by discounting these incremental cash flows at the original effective
interest rate.
Pioneer has adopted the fair value basis as it considers this more relevant to the users of the financial
statements.
Pioneer Credit Limited
30 June 2015
Page 53
The main inputs used by the Group in measuring the fair value of financial instruments are derived and
evaluated as follows:
onsolidated financial statements
otes to the consolidated financial statements
NNNNotes to the c
onsolidated financial statements
onsolidated financial statements
otes to the c
otes to the c
•
•
•
•
Expected liquidation rate
Face value
Cash flow liquidation period
Discount rate
•
Cost
Product characteristics, payment and liquidation history and
management experience with historic performance of
comparable portfolios.
Determined at the date the PDP was acquired.
Periods range from six to ten years depending on liquidation
history. Weighted average liquidation period is 2.6 years (2014:
2.1 years) indicating the majority of liquidation occurs in the
earlier years.
free rate and appropriate credit risk
Incorporate a risk
adjustment for risks not built into the underlying cash flows
expected to be recovered. The weighted average discount rate
used to calculate fair value is 20.9% (2014: 19.7%) noting that
further risk adjustment is not required as the cash flows to
which the rates are applied are appropriately risk adjusted.
Recently acquired PDPs may be valued at cost, where it is
considered to approximate fair value.
Consistent with the manner in which the Group’s purchased debt portfolios are managed, performance is
evaluated on a fair value basis. Separate validation of a discounted cash flow approach to fair value is also
undertaken. The validation comprises a review of key elements contributing to movements in value
including an analysis of the quantum, tenure and qualitative characteristics of the payment arrangements
portfolio as well as an assessment of the performance of other key observable portfolio characteristics.
c)c)c)c) Trade and other payables
Trade and other payables
Trade and other payables
Trade and other payables
2015
2015
2015
2015
NonNonNonNon----
current
current
current
current
$’000
$’000
$’000
$’000
Total
Total
Total
Total
$’000
$’000
$’000
$’000
Current
$’000
----
----
----
----
3,851
3,851
3,851
3,851
195195195195
1,430
1,430
1,430
1,430
5,476
5,476
5,476
5,476
11,352
276
1,885
13,513
2014
Non-
current
$’000
-
-
-
-
Total
$’000
11,352
276
1,885
13,513
Current
Current
Current
Current
$’000
$’000
$’000
$’000
3,851
3,851
3,851
3,851
195195195195
1,430
1,430
1,430
1,430
5,476
5,476
5,476
5,476
Trade payables
Payroll tax & other statutory liabilities
Other payables
See note 8(d) for detail on current provisions.
Trade payables at 30 June 2014 included $10.2m owing on purchased debt portfolios, consistent with the
terms of their acquisition. The amount of this trade payable is unusual when compared to the current
period. It was paid, in the normal course of business, during the first half of the financial year.
Risk exposure
Risk exposure
Risk exposure
Risk exposure
Information about the Group's exposure to foreign exchange risk is provided in note 12.
The carrying amounts of trade payables and payroll tax and other statutory liabilities are assumed to be
the same as their fair values, due to their short-term nature.
Pioneer Credit Limited
30 June 2015
Page 54
d)d)d)d) Borrowings
Borrowings
Borrowings
Borrowings
Secured
Secured
Secured
Secured
Bank loans
Other loans
Unsecured
Unsecured
Unsecured
Unsecured
Other loans
otes to the consolidated financial statements
NNNNotes to the consolidated financial statements
otes to the consolidated financial statements
otes to the consolidated financial statements
2015
2015
2015
2015
NonNonNonNon----
current
current
current
current
$’000
$’000
$’000
$’000
Current
Current
Current
Current
$’000
$’000
$’000
$’000
Total
Total
Total
Total
$’000
$’000
$’000
$’000
Current
$’000
2014
2014
20142014
Non-
current
$’000
7,7,7,7,063063063063
4,741
4,741
4,741
4,741
11,804
11,804
11,804
11,804
20,999
20,999
20,999
20,999
----
20,999
20,999
20,999
20,999
28,062
28,062
28,062
28,062
4,741
4,741
4,741
4,741
32,803
32,803
32,803
32,803
804
4,471
5,275
2,012
-
2,012
Total
$’000
2,816
4,471
7,287
70707070
11,874
11,874
11,874
11,874
----
20,999
20,999
20,999
20,999
70707070
32,873
32,873
32,873
32,873
101
5,376
-
2,012
101
7,388
Further information relating to loans related to related parties and Key Management Personnel is set out in
note 19.
Secured liabilities and assets pledged as security
Secured liabilities and assets pledged as security
Secured liabilities and assets pledged as security
Secured liabilities and assets pledged as security
Security over all the assets and undertakings of each of Pioneer Credit Limited, Pioneer Credit Acquisition
Services Pty Limited, Sphere Legal Pty Limited, Pioneer Credit (Philippines) Pty Limited and Pioneer Credit
Financial Services Pty Ltd and unlimited cross guarantees and indemnities from each of these entities.
All property of the Group comprises the Group total assets of $94,905,000 (2014: $70,301,000)
See note 12(d) for details of the financing arrangements available to the Group to which the security
relates.
Compliance with loan covenants
Compliance with loan covenants
Compliance with loan covenants
Compliance with loan covenants
Pioneer Credit Limited has complied with the financial covenants of its borrowing facilities during the
2015 and 2014 reporting periods, see note 13 for details.
Fair Value
Fair Value
Fair Value
Fair Value
For the majority of the borrowings, the fair values are not materially different to their carrying amounts,
since the interest payable on those borrowings is either close to current market rates or the borrowings
are of a short-term nature.
Risk exposures
Risk exposures
Risk exposures
Risk exposures
Details of the Group’s exposure to risks arising from current and non-current borrowings are set out in
note 12.
Pioneer Credit Limited
30 June 2015
Page 55
otes to the consolidated financial statements
NNNNotes to the consolidated financial statements
otes to the consolidated financial statements
otes to the consolidated financial statements
8)8)8)8) NonNonNonNon----financial assets and liabilities
financial assets and liabilities
financial assets and liabilities
financial assets and liabilities
This note provides information about the Group's non-financial assets and liabilities, including:
•
•
•
specific information about each type of non-financial asset and non-financial liability
accounting policies
information about determining the fair value of the assets and liabilities, including judgements and
estimation uncertainty involved.
a)a)a)a) Property, plant and equipment
Property, plant and equipment
Property, plant and equipment
Property, plant and equipment
At 1 July 2014
At 1 July 2014
At 1 July 2014
At 1 July 2014
Cost
Accumulated depreciation
Net book amount
Year ended
Year ended
Year ended
Year ended
30 June 2015
30 June 2015
30 June 2015
30 June 2015
Opening net book amount
Additions
Make good provision
Depreciation charge
Disposals
Lease incentive
Closing net book amount
At 30 June 2015
At 30 June 2015
At 30 June 2015
At 30 June 2015
Cost
Accumulated depreciation
Net book amount
At 1 July 2013
At 1 July 2013
At 1 July 2013
At 1 July 2013
Cost
Accumulated depreciation
Net book amount
Year ended
Year ended
Year ended
Year ended
30 June 2014
30 June 2014
30 June 2014
30 June 2014
Opening net book amount
Additions
Depreciation charge
Lease incentive
Closing net book amount
At 30 June 2014
At 30 June 2014
At 30 June 2014
At 30 June 2014
Cost
Accumulated depreciation
Net book amount
Plant and
and
Plant
and
and
Plant
Plant
equipment
equipment
equipment
equipment
$’000
$’000
$’000
$’000
1,187
(510)
677677677677
677
579
-
(394)
-
-
862862862862
1,766
(904)
862862862862
702
(296)
406406406406
406
485
(214)
-
677677677677
1,187
(510)
677677677677
Furniture,
Furniture,
Furniture,
Furniture,
fittings &
fittings &
fittings &
fittings &
equipment
equipment
equipment
equipment
$’000
$’000
$’000
$’000
Machinery
Machinery
Machinery
Machinery
& vehicles
& vehicles
& vehicles
& vehicles
Leasehold
Leasehold
Leasehold
Leasehold
improvements
improvements
improvements
improvements
Total
Total
Total
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
145
(38)
107107107107
107
104
-
(54)
-
-
157157157157
249
(92)
157157157157
111
(16)
95959595
95
34
(22)
-
107107107107
145
(38)
107107107107
41
(30)
11111111
11
-
-
(2)
(9)
-
----
-
-
----
41
(28)
13131313
13
-
(2)
-
11111111
41
(30)
11111111
1,949
(207)
1,742
1,742
1,742
1,742
3,322
(785)
2,537
2,537
2,537
2,537
1,742
916
189
(366)
-
835
3,316
3,316
3,316
3,316
2,537
1,599
189
(816)
(9)
835
4,335
4,335
4,335
4,335
3,889
(573)
3,316
3,316
3,316
3,316
5,904
(1,569)
4,335
4,335
4,335
4,335
332
(131)
201201201201
1,186
(471)
715715715715
201
182
(76)
1,435
1,742
1,742
1,742
1,742
1,949
(207)
1,742
1,742
1,742
1,742
715
701
(314)
1,435
2,537
2,537
2,537
2,537
3,322
(785)
2,537
2,537
2,537
2,537
Pioneer Credit Limited
30 June 2015
Page 56
otes to the consolidated financial statements
NNNNotes to the consolidated financial statements
otes to the consolidated financial statements
otes to the consolidated financial statements
current assets pledged as security
NonNonNonNon----current assets pledged as security
current assets pledged as security
current assets pledged as security
Refer to note 7(d) for information on non-current assets pledged as security by the Group.
Depreciation methods and useful lives
Depreciation methods and useful lives
Depreciation methods and useful lives
Depreciation methods and useful lives
Depreciation of property, plant and equipment is calculated using the diminishing balance method to
allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives.
Leasehold improvements and certain leased plant and equipment are depreciated on a straight line basis
over the term of the lease.
-
-
-
-
-
Plant and equipment
Furniture, fittings and equipment
Machinery and vehicles
Leasehold improvements
Lease incentive
15 - 66.7%
15 - 50%
25%
20 - 50%
9 years, being the term of the lease
See note 26(f) for the other accounting policies relevant to property, plant and equipment.
Lease incentive asset
Lease incentive asset
Lease incentive asset
Lease incentive asset
The lease incentive received relates to leasehold improvements in general received as an incentive to take
on rental operating leases and has been accounted for as such, with a corresponding liability recognised
in Other Liabilities. The lease incentive liability will be released on a straight line basis over the lease term
and reduce the “rental expense” on the consolidated statement of comprehensive income.
b)b)b)b) Deferred tax balances
Deferred tax balances
Deferred tax balances
Deferred tax balances
Deferred tax assets
Deferred tax assets
Deferred tax assets
Deferred tax assets
The balance comprises
temporary differences attributable to:
The balance comprises temporary differences attributable to:
temporary differences attributable to:
temporary differences attributable to:
The balance comprises
The balance comprises
Employee benefits (annual leave)
Retirement benefit obligations (superannuation payable)
Other
Other expenses (audit, accounting, payroll tax)
Share issue expenses
Other (formation costs, blackhole costs)
Prepayments
Sub-total other
Net deferred tax assets
2015
2015
2015
2015
$’000
$’000
$’000
$’000
2014
2014
20142014
$’000
$’000
$’000
$’000
128128128128
43434343
269269269269
657657657657
43434343
(11)
(11)
(11)
(11)
958958958958
86
28
182
888
14
-
1,084
1,129
1,129
1,129
1,129
1,198
Pioneer Credit Limited
30 June 2015
Page 57
Movements
Movements
Movements
Movements
At 1 July 2014
At 1 July 2014
At 1 July 2014
At 1 July 2014
(Charged)/ credited
-
To profit or loss
- Directly to equity
At 30 June 2015
At 30 June 2015
At 30 June 2015
At 30 June 2015
At 1 July 2013
At 1 July 2013
At 1 July 2013
At 1 July 2013
(Charged)/ credited
-
To profit or loss
- Directly to equity
At 30 June 2014
At 30 June 2014
At 30 June 2014
At 30 June 2014
c)c)c)c)
Intangible assets
Intangible assets
Intangible assets
Intangible assets
At 1 July 2014
At 1 July 2014
At 1 July 2014
At 1 July 2014
Cost
Accumulated amortisation
Net book amount
Year ended
Year ended
Year ended
Year ended
30 June
2015
30 June 2015
2015
2015
30 June
30 June
Opening net book amount
Additions
Amortisation charge
Closing net book amount
At 30 June 2015
At 30 June 2015
At 30 June 2015
At 30 June 2015
Cost
Accumulated amortisation
Net book amount
Year ended
Year ended
Year ended
Year ended
30 June 2014
30 June 2014
30 June 2014
30 June 2014
Opening net book amount
Additions
Amortisation charge
Closing net book amount
At 30 June 2014
At 30 June 2014
At 30 June 2014
At 30 June 2014
Cost
Accumulated amortisation
Net book amount
otes to the consolidated financial statements
NNNNotes to the consolidated financial statements
otes to the consolidated financial statements
otes to the consolidated financial statements
Employee
Employee
Employee
Employee
benefits
benefits
benefits
benefits
$’000
$’000
$’000
$’000
Retirement
Retirement
Retirement
Retirement
Benefit
Benefit
Benefit
Benefit
Obligation
Obligation
Obligation
Obligation
$’000
$’000
$’000
$’000
OtherOtherOtherOther
$’000
$’000
$’000
$’000
Total
Total
Total
Total
$’000
$’000
$’000
$’000
86868686
42424242
----
128128128128
62626262
24242424
----
86868686
28
1,084
1,198
15
-
43
40
(12)
-
28
(9)
(117)
958
48
(117)
1,129
101
203
523
460
1,084
535
460
1,198
Software
Software
Software
Software
$’000
$’000
$’000
$’000
226226226226
(65)
(65)
(65)
(65)
161161161161
161161161161
345345345345
(122)
(122)
(122)
(122)
384384384384
571571571571
(187)
(187)
(187)
(187)
384384384384
----
226226226226
(65)
(65)
(65)
(65)
161161161161
226226226226
(65)
(65)
(65)
(65)
161161161161
Pioneer Credit Limited
30 June 2015
Page 58
otes to the consolidated financial statements
NNNNotes to the consolidated financial statements
otes to the consolidated financial statements
otes to the consolidated financial statements
Amortisation methods and useful lives
Amortisation methods and useful lives
Amortisation methods and useful lives
Amortisation methods and useful lives
The Group amortises intangible assets with a limited useful life using the straight-line method over the
following periods:
-
Software
1-3 years
See note 26(g) for the other accounting policies relevant to intangible assets, and the Group’s policy
regarding impairments.
d)d)d)d) Provisions
Provisions
Provisions
Provisions
Employee benefits
Lease make good
Commercial claim
2015
2015
2015
2015
NonNonNonNon----
current
current
current
current
$’000
$’000
$’000
$’000
Current
Current
Current
Current
$’000
$’000
$’000
$’000
Total
Total
Total
Total
$’000
$’000
$’000
$’000
Current
$’000
----
----
----
----
180180180180
189189189189
----
369369369369
180180180180
189189189189
----
369369369369
-
-
279
279
2014
2014
20142014
Non-
current
$’000
84
-
-
84
Total
$’000
84
-
279
363
Information about individual provisions and significant estimates
Employee benefits
Employee benefits
Employee benefits
Employee benefits
Long service leave
Long service leave
Long service leave
Long service leave
The liabilities for long service leave are not expected to be settled wholly within 12 months after the end
of the period in which the employees render the related service. They are therefore recognised in the
provision for employee benefits and measured as the present value of expected future payments to be
made in respect of services provided by employees up to the end of the reporting period using the
projected unit credit method. Consideration is given to expected future wage and salary levels,
experience of employee departures and periods of service. Expected future payments are discounted
using market yields at the end of the reporting period of government bonds with terms and currencies
that match, as closely as possible, the estimated future cash outflows. Re measurement as a result of
experience adjustments and changes in actuarial assumptions are recognised in profit or loss.
The obligations are presented as current liabilities in the consolidated balance sheet if the entity does not
have an unconditional right to defer settlement for at least 12 months after the reporting date, regardless
of when the actual settlement is expected to occur.
Pioneer Credit Limited
30 June 2015
Page 59
otes to the consolidated financial statements
NNNNotes to the consolidated financial statements
otes to the consolidated financial statements
otes to the consolidated financial statements
Lease make good
Lease make good
Lease make good
Lease make good
Pioneer Credit Limited is required to restore the leased premises of 108 St Georges Terrace, Perth WA
6000, to their original condition at the end of the respective lease terms. A provision has been recognised
for the present value of the estimated expenditure required to remove any leasehold improvements.
These costs have been capitalised as part of the cost of leasehold improvements and are amortised over
the shorter of the term of the lease or the useful life of the assets.
Commercial claim
Commercial claim
Commercial claim
Commercial claim
See note 4 for details of the provision raised and subsequently settled during the reporting period relating
to the commercial claim.
Movements in provisions
Movements in provisions
Movements in provisions
Movements in provisions
At 1 July 2014
At 1 July 2014
At 1 July 2014
At 1 July 2014
Carrying amount at start of year
Charged to profit or loss
Capitalised to balance sheet
Amounts used during the year
At 30 June 2015
At 30 June 2015
At 30 June 2015
At 30 June 2015
At 1 July 2013
At 1 July 2013
At 1 July 2013
At 1 July 2013
Carrying amount at start of year
Charged to profit or loss
Amounts used during the year
At 30 June 2014
At 30 June 2014
At 30 June 2014
At 30 June 2014
Employee
Employee
Employee
Employee
benefits
benefits
benefits
benefits
$’000
$’000
$’000
$’000
84
96
-
-
180180180180
-
84
-
84848484
Lease
Lease
Lease
Lease
make make make make
good
good
good
good
$’000
$’000
$’000
$’000
-
-
189
-
189189189189
-
-
-
----
Commercial
Commercial
Commercial
Commercial
claimclaimclaimclaim
$’000
$’000
$’000
$’000
279
166
-
(445)
----
-
420
(141)
279279279279
Total
Total
Total
Total
$’000
$’000
$’000
$’000
363
262
189
(445)
369369369369
-
504
(141)
363363363363
settled within 12 months
Amounts not expected to be settled within 12 months
Amounts not expected to be
settled within 12 months
settled within 12 months
Amounts not expected to be
Amounts not expected to be
No employee of the Group will be eligible to take long service leave within the next 12 months.
9)9)9)9) Equity
Equity
Equity
Equity
a)a)a)a) Contributed equity
Contributed equity
Contributed equity
Contributed equity
Share capital
Share capital
Share capital
Share capital
fully paid
Ordinary shares –––– fully paid
Ordinary shares
fully paid
fully paid
Ordinary shares
Ordinary shares
44,973,990
44,973,990
44,973,990
44,973,990
44,973,990
45,464
45,464
45,464
45,464
45,464
2015
2015
2015
2015
Shares
Shares
Shares
Shares
2014
2014
20142014
Shares
Shares
Shares
Shares
2015
2015
2015
2015
$’000
$’000
$’000
$’000
2014
2014
20142014
$’000
$’000
$’000
$’000
Pioneer Credit Limited
30 June 2015
Page 60
Movements in ordinary share capital
Movements in ordinary share capital
Movements in ordinary share capital
Movements in ordinary share capital
otes to the consolidated financial statements
NNNNotes to the consolidated financial statements
otes to the consolidated financial statements
otes to the consolidated financial statements
DateDateDateDate
Details
Details
Details
Details
Number of shares
Number of shares
Number of shares
Number of shares
$’000
$’000
$’000
$’000
1 July 2014
1 July 2014
1 July 2014
1 July 2014
Opening balance
Opening balance
Opening balance
Opening balance
30 June 2015
30 June 2015
30 June 2015
30 June 2015
Closing balance
Closing balance
Closing balance
Closing balance
1 July 2013
1 July 2013
1 July 2013
1 July 2013
30 June 2014
30 June 2014
30 June 2014
30 June 2014
Opening balance
Opening balance
Opening balance
Opening balance
Deferred tax through equity
CRPS A Re-investment
CRPS B Conversion (net of transaction costs)
CRPS C Conversion (net of transaction costs)
Management options
Return of capital
Employee offering
Initial Public Offering
Transaction costs arising on share issue
Closing balance
Closing balance
Closing balance
Closing balance
b)b)b)b) Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
All authorised ordinary shares have been issued.
44,973,990
45,464
44,973,990
45,464
11,904,596
-
591,742
3,419,035
3,623,917
300,000
-
134,700
25,000,000
-
44,973,990
9,091
652
592
3,406
4,349
403
(11,070)
216
40,000
(2,175)
45,464
Ordinary shares have no par value and the Company does not have a limited amount of authorised
capital.
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the
Company in proportion to the number of and amounts paid on the shares held.
At a general meeting of shareholders; every shareholder entitled to vote may vote in person or by proxy,
attorney or representative; on a show of hands every shareholder who is present in person or by proxy,
attorney or representative has one vote; and on a poll every shareholder who is present in person or by
proxy, attorney or representative has one vote for every share held, but, in respect of partly-paid shares,
shall have a fraction of a vote for each partly-paid share.
Shares acquired under the Employee Offer are held under a trading lock. Shares in the Employee Offer
otherwise carry the same rights and entitlements of fully paid ordinary Shares, including dividend and
voting rights.
Pre-initial public offering shareholders, which includes management share holders, have entered into
voluntary escrow arrangements in respect of the shares they held on listing on the Australian Stock
Exchange. The escrow period is the same for all escrowed shareholders, being the period from 1 May
2014 to 10 trading days after the date on which Pioneer releases to the ASX its results for the full financial
year ending 30 June 2015.
During the escrow period, the escrowed shareholders may deal in any of their shares to the extent the
dealing is required by applicable law (including an order of court of competent jurisdiction). The
restriction on ‘disposing’ is broadly defined and includes, among other things, selling, assigning,
transferring or otherwise disposing of any interests in the Shares, encumbering or granting a security
interest over the Shares, doing or omitting to do, any act if the act or omission would have the effect of
transferring effective ownership or control of any of the Shares or agreeing to do any of those things.
Pioneer Credit Limited
30 June 2015
Page 61
c)c)c)c) Treasury shares
Treasury shares
Treasury shares
Treasury shares
otes to the consolidated financial statements
NNNNotes to the consolidated financial statements
otes to the consolidated financial statements
otes to the consolidated financial statements
DateDateDateDate
Details
Details
Details
Details
Number of shares
Number of shares
Number of shares
Number of shares
$’000
$’000
$’000
$’000
1 July 2014
1 July 2014
1 July 2014
1 July 2014
2015
30 June 2015
30 June
2015
2015
30 June
30 June
Opening balance
Opening balance
Opening balance
Opening balance
Receipt on treasury shares
Closing balance
Closing balance
Closing balance
Closing balance
1 July 2013
1 July 2013
1 July 2013
1 July 2013
30 June 2014
30 June 2014
30 June 2014
30 June 2014
Opening balance
Opening balance
Opening balance
Opening balance
Management options
Closing balance
Closing balance
Closing balance
Closing balance
d)d)d)d) Employee share scheme
Employee share scheme
Employee share scheme
Employee share scheme
400,000
400,000
-
400,000
400,000
1,024
1,024
1,024
1,024
6666
1,030
1,030
1,030
1,030
----
1,024
1,024
1,024
1,024
1,024
1,024
1,024
1,024
Information relating to the employee share scheme of the previous financial year, including details of
shares issued under the scheme, is set out in note 20.
No new employee shares were issued during the period under review.
e)e)e)e) Options
Options
Options
Options
Information relating to the Chairman's Options and Management Options, including details of options
issued, exercised and lapsed during the financial year and options outstanding at the end of the financial
year, is set out in note 20.
f)f)f)f) Other reserves
Other reserves
Other reserves
Other reserves
The following table shows a breakdown of the balance sheet line item ‘other reserves’ and the
movements in these reserves during the period under review. A description of the nature and purpose of
each reserve is provided below the table.
Share based payments
Share based payments
Share based payments
Share based payments
At 1 July 2014
At 1 July 2014
At 1 July 2014
At 1 July 2014
Opening balance
Chairman’s options
Treasury shares
At 30 June 2015
At 30 June 2015
At 30 June 2015
At 30 June 2015
At 1 July 2013
At 1 July 2013
At 1 July 2013
At 1 July 2013
Opening balance
Chairman’s options
Management options
At 30 June 2014
At 30 June 2014
At 30 June 2014
At 30 June 2014
1,037
30
6
1,073
1,073
1,073
1,073
-
13
1,024
1,037
1,037
1,037
1,037
based payments
Nature and purpose of other reserves share----based payments
Nature and purpose of other reserves share
based payments
based payments
Nature and purpose of other reserves share
Nature and purpose of other reserves share
The share-based payments reserve is used to recognise:
•
•
the grant date fair value of options issued to employees but not exercised over the vesting period
the grant date fair value of shares issued to employees over the vesting period
Pioneer Credit Limited
30 June 2015
Page 62
g)g)g)g) Retained earnin
Retained earningsgsgsgs
Retained earnin
Retained earnin
Movements in retained earnings were as follows:
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Balance 1 July
Balance 1 July
Balance 1 July
Balance 1 July
Net profit for the year
Dividends
Balance 30 June
Balance 30 June
Balance 30 June
Balance 30 June
2015
2015
2015
2015
$’000
$’000
$’000
$’000
1,101
1,101
1,101
1,101
7,441
7,441
7,441
7,441
(2,201)
(2,201)
(2,201)
(2,201)
6,341
6,341
6,341
6,341
10)10)10)10) Cash flow information
Cash flow information
Cash flow information
Cash flow information
a)a)a)a) Reconciliation of profit
after income tax to net cash inflow from operating activities
Reconciliation of profit after income tax to net cash inflow from operating activities
after income tax to net cash inflow from operating activities
after income tax to net cash inflow from operating activities
Reconciliation of profit
Reconciliation of profit
Profit for the period
Depreciation and amortisation
Non-cash employee benefits expense – share-based payments
Net profit on sale of assets previously written off
Share of profit of associate accounted or using the equity method
Accrued interest on convertible redeemable preference shares
Change in value of purchased debt portfolios
Capital raising costs disclosed in financing activities
Change in operating assets and liabilities:
- Decrease (increase) in trade receivables
- (Increase) decrease in deferred tax assets through profit or loss
- Increase (decrease) in trade payables
- Increase (decrease) in provision for income taxes payable
- (Decrease) Increase in accruals and other liabilities
Net cash flow inflow from operating activities
b)b)b)b) NonNonNonNon----cash investing and
financing activities
cash investing and financing activities
financing activities
financing activities
cash investing and
cash investing and
Non-cash investing and financing activities
Employee share scheme
Make good provision
Lease incentive liability released
Lease incentive recognised
2014
2014
20142014
$’000
$’000
$’000
$’000
3,984
1,047
(3,930)
1,101
2014
2014
20142014
$’000
$’000
$’000
$’000
1,047
379
808
-
-
520
11,814
2,058
(1,729)
(535)
(609)
(1,354)
1,243
13,642
2015
2015
2015
2015
$’000
$’000
$’000
$’000
7,441
7,441
7,441
7,441
938938938938
30303030
(8)
(8)
(8)
(8)
(8)
(8)
(8)
(8)
----
16,702
16,702
16,702
16,702
----
240240240240
(48)
(48)
(48)
(48)
2,125
2,125
2,125
2,125
1,643
1,643
1,643
1,643
(879)
(879)
(879)
(879)
28,176
28,176
28,176
28,176
2015
2015
2015
2015
$’000
$’000
$’000
$’000
----
189189189189
(159)
(159)
(159)
(159)
835835835835
2014
2014
20142014
$’000
$’000
$’000
$’000
91
-
-
1,435
Pioneer Credit Limited
30 June 2015
Page 63
RiskRiskRiskRisk
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
This section of the notes discusses the Group’s exposure to various risks and shows how these could
affect the Group’s financial position and performance.
11 Critical accounting estimates and judgements
12 Financial risk management
13 Capital management
65
65
69
Pioneer Credit Limited
30 June 2015
Page 64
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
11)11)11)11) Critical accounting estimates and judgements
Critical accounting estimates and judgements
Critical accounting estimates and judgements
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other
factors, including expectations of future events that may have a financial impact on the entity and that are
believed to be reasonable under the circumstances.
The preparation of financial statements requires the use of accounting estimates which, by definition, will
seldom equal the actual results. Management also needs to exercise judgement in applying the Group’s
accounting policies.
Critical accounting estimates and assumptions
Critical accounting estimates and assumptions
Critical accounting estimates and assumptions
Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates
will, by definition, seldom equal the related actual results. The estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year are discussed below.
Fair value measurement of financial instruments
Fair value measurement of financial instruments
Fair value measurement of financial instruments
Fair value measurement of financial instruments
The fair value of financial instruments that are not traded in a sufficiently active market is determined
using valuation techniques. The Group uses its judgement to select a variety of methods and make
assumptions, including considering market conditions existing at the end of each reporting period. The
Group uses its judgement and makes assumptions as to the allocation of purchased debt portfolios
between current and non-current asset allocations. For details of the key assumptions used and the
impact of changes to these assumptions see note 7(b).
Investment in associate
Investment in associate
Investment in associate
Investment in associate
The Group’s assessment is that the investment in Goldfields Money Limited represents an investment in
associate, to be accounted for using the equity method of accounting, as the Group can demonstrate
significant influence. The Group’s assessment at the end of the reporting period is that there is no
objective evidence that this equity-accounted investment is impaired.
Goldfields Money Limited is a publically traded entity and at the time of approval of this Annual Report,
publically available information as at 30 June 2015 was not available on Goldfields Money Limited.
Management has exercised judgement in determining the share of equity income from this associate.
Selected information has been presented based on information readily available to the Group.
See note 15 for more information on the Investment in associate.
12)12)12)12) Financial risk
management
Financial risk management
management
management
Financial risk
Financial risk
The Group's activities expose it to a variety of financial risks: market risk; credit risk; and liquidity risk.
The Group's overall risk management programme focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the financial performance of the Group.
The Group uses different methods to measure the different types of risk to which it is exposed.
These methods include sensitivity analysis in the case of interest rates, preparation and review of ageing
analysis for credit risk and projected cash flow analysis across the portfolio to manage the risk associated
with the purchased debt portfolio.
Pioneer Credit Limited
30 June 2015
Page 65
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Risk management is the responsibility of Key Management Personnel. Policies under approval by the
Board of Directors ensure that the total risk exposure of the Group is consistent with the Group strategy,
is in line with Group covenants and is within the risk tolerance guidelines of the Group. To manage
interest rate and credit risk arising from the investment in purchased debt portfolios, the Group
undertakes pricing analysis at tender stage. Pricing is determined by a bidding process in a tender market
place with each purchaser relying on their own analysis. Analysis by the Group includes consideration of
information supplied under due diligence at tender stage, as well as macro and micro economic
elements to which senior management experience and judgement is applied. In many cases there exists
in-house knowledge of the performance of portfolios with similar characteristics and in other cases data
analysis is restricted to the information supplied at due diligence. Purchased debt portfolios are
subsequently managed and performance is evaluated on a fair value basis.
The Group periodically considers the need to make use of derivative financial instruments and hedging
arrangements to manage interest rate risk. There are currently no such arrangements in place.
During the year under review, there has been no change to the Group’s exposures to the above risks or
the manner in which these risks are managed and measured.
a)a)a)a) Summarised sensitivity analysis
interest rate risk
Summarised sensitivity analysis –––– interest rate risk
interest rate risk
interest rate risk
Summarised sensitivity analysis
Summarised sensitivity analysis
The following table summarises the sensitivity of the Group's financial assets and financial liabilities to
interest rate risk. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market interest rates.
At 30 June 2015
At 30 June 2015
At 30 June 2015
At 30 June 2015
Financial liabilities
Borrowings
At 30 June 2014
At 30 June 2014
At 30 June 2014
At 30 June 2014
Financial liabilities
Borrowings
Carrying
Carrying
Carrying
Carrying
amount
amount
amount
amount
$’000
$’000
$’000
$’000
----100 bps
100 bps
100 bps
100 bps
Profit
Profit
Profit
Profit
$’000
$’000
$’000
$’000
+100 bps bps bps bps
+100
+100
+100
Profit
Profit
Profit
Profit
$’000
$’000
$’000
$’000
28,210
199
(199)
3,039
136
(136)
Financial assets sensitive to interest rate risk comprise cash and cash equivalents only and their sensitivity
to interest rate risk has not been included as the expense is not significant.
b)b)b)b) Market risk
Market risk
Market risk
Market risk
This is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market prices. This comprises;
Foreign exchange risk
Foreign exchange risk
Foreign exchange risk
Foreign exchange risk
The Group has no financial instruments exposed to foreign currencies and as such there is no risk
associated with fluctuations in foreign exchange rates.
Pioneer Credit Limited
30 June 2015
Page 66
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
e risk
and fair value interest rate risk
ash flow and fair value interest rat
CCCCash flow
e risk
e risk
and fair value interest rat
and fair value interest rat
ash flow
ash flow
The Group’s main interest rate risk arises from long-term loans and borrowings issued at variable interest
rates. The Group’s fixed rate borrowings and receivables are carried at amortised cost and not subject to
interest rate risk.
As at the end of the reporting period the Group had the following variable rate loans and borrowings
outstanding:
Instruments used by the Group
Instruments used by the Group
Instruments used by the Group
Instruments used by the Group
Bank overdrafts and bank loans
30 June 2015
30 June 2015
30 June 2015
30 June 2015
Weighted
Weighted
Weighted
Weighted
average
average
average
average
interest rate
interest rate
interest rate
interest rate
%%%%
4.56%
Balance
Balance
Balance
Balance
$’000
$’000
$’000
$’000
28,210
30 June 2014
30 June 2014
30 June 2014
30 June 2014
Weighted
Weighted
Weighted
Weighted
average
average
average
average
interest rate
interest rate
interest rate
interest rate
%%%%
5.13%
Balance
Balance
Balance
Balance
$’000
$’000
$’000
$’000
3,039
The Group analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking
into consideration refinancing, renewal of existing positions and alternative financing. Based on these
scenarios, the Group calculates the impact on profit or loss of a defined interest rate shift. The scenarios
are run only for liabilities that represent the major interest-bearing positions. The simulation is done on a
half yearly basis to verify that the maximum loss potential is within the limit given by management.
Price risk
Price risk
Price risk
Price risk
The Group has no financial instruments exposed to market prices and as such there is no risk associated
with fluctuations in market prices. Financial assets at fair value through profit and loss relate entirely to the
purchased debt portfolio.
c)c)c)c) Credit risk
Credit risk
Credit risk
Credit risk
Credit risk arises from cash and cash equivalents, credit exposures to customers, including outstanding
receivables and committed transactions.
Risk management
Risk management
Risk management
Risk management
Credit risk is managed on a Group basis. For banks and financial institutions, only independently rated
parties with a minimum rating of ‘A’ are accepted. For customers, management assesses the credit quality
of the customer, taking into account its financial position, past experience and other factors. Individual
risk limits are set based on internal or external ratings in accordance with limits set by the management.
The compliance with credit limits by corporate customers is regularly monitored by management.
There are no significant concentrations of credit risk, whether through exposure to individual customers,
specific industry sectors and / or regions.
The Group is also exposed to investment credit risk from the significant investment in purchased debt
portfolios. Risk limits are set based on internal ratings in accordance with limits set by management. The
compliance with investment credit limits on the purchased debt portfolios is regularly monitored by
management.
Pioneer Credit Limited
30 June 2015
Page 67
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Impaired trade receivables
Impaired trade receivables
Impaired trade receivables
Impaired trade receivables
As at 30 June 2015, no current trade receivables of the Group were impaired, nor overdue.
d)d)d)d) Liquidity risk
Liquidity risk
Liquidity risk
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding
through an adequate amount of committed credit facilities to meet obligations when due. Due to the
dynamic nature of the business, management maintains flexibility in funding by maintaining availability
under committed credit lines.
Management monitors rolling forecasts of the Group’s liquidity reserve on the basis of expected cash
flow. Cash flow is forecast on a day-to-day basis to ensure that sufficient funds are available to meet
requirements on the basis of expected cash flows. Liquidity risk is further managed through maintaining a
reputable credit profile.
Financing arrangements
Financing arrangements
Financing arrangements
Financing arrangements
The Group had access to a Senior Debt Facility of $54,060,000 at the end of the financial year (2014:
$54,060,000). The facility comprises a cash advance facility to fund the acquisition of purchased debt
portfolios, a bank guarantee facility, an overdraft facility, a direct debit authority facility and a credit card
facility.
The overdraft facility was unused at 30 June 2015 and the undrawn limit on the cash advance facility was
$18,791,000 at 30 June 2015 (2014: $43,963,000). The facility is subject to the Group meeting a number
of financial undertakings, all of which have been met to date. The facility will expire on 31 July 2017.
Management has no reason to believe that the facility will not be renewed and / or extended beyond this
date.
The Group is required to keep the finance provider fully informed of relevant details of the Group as they
arise.
cial liabilities
Maturities of financial liabilities
Maturities of finan
cial liabilities
cial liabilities
Maturities of finan
Maturities of finan
The following table reflects an undiscounted contractual maturity analysis for financial liabilities. The
timing of cash flows represented in the table to settle financial liabilities reflects the earliest contractual
settlement dates and does not reflect management’s expectation that the facilities will be extended.
At 30 June 2015
At 30 June 2015
At 30 June 2015
At 30 June 2015
Trade payables
Borrowings
Accruals, provisions and other liabilities
At 30 June 2014
At 30 June 2014
At 30 June 2014
At 30 June 2014
Trade payables
Borrowings
Accruals, provisions and other liabilities
Within 1
Within 1
Within 1
Within 1
year
year
year
year
$’000
$’000
$’000
$’000
3,851
13,002
1,624
18,477
11,352
5,479
2,440
19,271
Between
Between
Between
Between
1 and 2
1 and 2
1 and 2
1 and 2
years
years
years
years
$’000
$’000
$’000
$’000
Between
Between
Between
Between
2 and 5
2 and 5
2 and 5
2 and 5
years
years
years
years
$’000
$’000
$’000
$’000
Carrying
Carrying
Carrying
Carrying
amount
amount
amount
amount
$’000
$’000
$’000
$’000
-
7,935
-
7,935
-
812
-
812
-
14,558
369
14,927
-
1,514
84
1,598
3,851
32,873
1,993
38,717
11,352
7,388
2,524
21,264
Trade payables at 30 June 2014 included $10.2m owing on purchased debt portfolios, consistent with the
terms of their acquisition. The amount of this trade payable is unusual when compared to the current
period. It was paid, in the normal course of business, during the first half of the financial year.
Pioneer Credit Limited
30 June 2015
Page 68
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
13)13)13)13) Capital management
Capital management
Capital management
Capital management
a)a)a)a) Risk management
Risk management
Risk management
Risk management
The Group's objectives when managing capital are to;
•
safeguard their ability to continue as a going concern, so that they can continue to provide returns for
shareholders and benefits for other stakeholders, and
• maintain an optimal capital structure to reduce the cost of capital.
b)b)b)b) Dividends
Dividends
Dividends
Dividends
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Special dividend on fully paid ordinary shares held on 30 April 2014 of 19.415 cents per
share paid on 16 June 2014
2H FY14 dividend on fully paid ordinary shares held on 30 September 2014 of 3.10
cents per share paid on 17 October 2014
1H FY15 dividend on fully paid ordinary shares held on 31 March 2015 of 1.75 cents per
share paid on 17 April 2015
Return of capital
Return of capital
Return of capital
Return of capital
2015
2015
2015
2015
$’000
$’000
$’000
$’000
2014
$’000
-
3,930
1,407
1,407
1,407
1,407
794794794794
2,201
2,201
2,201
2,201
-
-
3,930
2015
2015
2015
2015
$’000
$’000
$’000
$’000
2014
$’000
Return of capital on fully paid ordinary shares held on 30 April 2014 of 54.698 cents per
share paid on 17 June 2014
-
11,070
Dividends not recognised at the end of the reporting period
Dividends not recognised at the end of the reporting period
Dividends not recognised at the end of the reporting period
Dividends not recognised at the end of the reporting period
Since year end the Directors have recommended the payment of a final dividend of
6.80 cents per fully paid ordinary share (2014 – 3.10), fully franked based on tax paid at
30%. The aggregate amount of the proposed dividend expected to be paid on
30 October 2015 out of retained earnings at 30 June 2015, but not recognised as a
liability at year end is
Franking dividends
Franking dividends
Franking dividends
Franking dividends
2015
2015
2015
2015
$’000
$’000
$’000
$’000
2014
$’000
3,03,03,03,085858585
1,407
The franked portions of the final dividends recommended after 30 June 2015 will be franked out of
existing franking credits or out of franking credits arising from the payment of income tax in the year
ended 30 June 2016.
Franking credits available for subsequent reporting periods based on a tax rate of 30.0%
(2014 – 30.0%)
2,408
2,408
2,408
2,408
1,454
2015
2015
2015
2015
$’000
$’000
$’000
$’000
2014
$’000
Pioneer Credit Limited
30 June 2015
Page 69
The above amounts are calculated from the balance of the franking account as at the end of the
reporting period, adjusted for franking credits and debits that will arise from the settlement of liabilities or
receivables for income tax and dividends after the end of the year.
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
c)c)c)c) Capital risk management
Capital risk management
Capital risk management
Capital risk management
Although the Group is not subject to any externally imposed regulatory requirement, it has adopted a
conservative and proactive capital management strategy. The Group has taken a prudent approach to
gearing with the significant sources of funding being supplied by shareholder equity and variable rate
financier borrowings, as well as appropriate trade working capital arrangements. All major capital related
initiatives require Board approval.
The Group is well funded at balance date and into the foreseeable future.
Management monitor key balance sheet ratios as part of the strategy as well as to demonstrate
compliance with the financier covenant requirements. Three year rolling capital forecast analysis is
regularly reviewed to assess the impact of growth and future opportunity on funding requirements with a
focus on determining adequacy of short to medium term requirements.
Arrangements with the Group's financier are in place to ensure that there is sufficient undrawn credit
available to meet unforeseen circumstances should they arise. Financing facilities are renegotiated on a
regular basis to ensure that they are sufficient for the Group’s projected growth.
As far as possible, asset purchases are funded from operational cash flow, allowing undrawn balances to
be maintained. Cash is monitored on a daily basis to ensure that immediate and short term requirements
can be met. By maintaining a balance of undrawn funds, the Company reduces the risk of liquidity and
going concern issues.
Details of financing facilities are set out in note 12(d).
Under the terms of the Senior Debt Facility, the Group is required to comply with financial covenants at all
times, tested monthly.
The Group has met all covenant obligations of the financier at all times during the current and prior years.
Pioneer Credit Limited
30 June 2015
Page 70
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Group Structure
Group Structure
Group Structure
Group Structure
This section provides information which will help users understand how the Group structure affects the
financial position and performance of the Group as a whole.
14 Subsidiaries
15 Associates
72
73
Pioneer Credit Limited
30 June 2015
Page 71
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
14)14)14)14) Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries
Significant investments in subsidiaries
Significant investments in subsidiaries
Significant investments in subsidiaries
Significant investments in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following
principal subsidiaries in accordance with the accounting policy described in note 26(b).
Name of entity
Name of entity
Name of entity
Name of entity
Country of
Country of
Country of
Country of
incorporation
incorporation
incorporation
incorporation
Class of
Class of
Class of
Class of
shares
shares
shares
shares
Pioneer Credit Acquisition Services Pty Limited
Sphere Legal Pty Limited
Pioneer Credit (Philippines) Pty Limited
Pioneer Credit Financial Services Pty Limited*
Pioneer Credit Broking Services Pty Limited**
Pioneer Credit Acquisition Services (UK) Limited***
Australia
Australia
Australia
Australia
Australia
United Kingdom
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Equity holding
Equity holding
Equity holding
Equity holding
2014
2014
2015
2015
20142014
2015
2015
%%%%
%%%%
100
100
100
100
100
100
-
100
-
100
100
100
*
**
***
Pioneer Credit Financial Services Pty Limited was incorporated on 1 April 2015 and holds the Investment in associate.
Pioneer Credit Broking Services Pty Limited was incorporated on 28 May 2015 and has not conducted any business since
inception to the date of this report.
Pioneer Credit Acquisition Services (UK) Limited is an entity incorporated in the United Kingdom and has not conducted
any business since inception to the date of this report.
The principal activities of the other subsidiaries listed above is the same as that of the holding Company,
namely, specialising in acquiring and servicing unsecured retail debt portfolios.
Pioneer Credit Limited
30 June 2015
Page 72
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
15)15)15)15) AAAAssociates
ssociates
ssociates
ssociates
in associate
Investment in associate
Investment
in associate
in associate
Investment
Investment
Set out below is the investment in an associate of the Group as at 30 June 2015. The entity listed below
has share capital consisting solely of ordinary shares, which are held directly by the Group. The country of
incorporation or registration is also the principal place of business, and the proportion of ownership
interest is the same as the proportion of voting rights held.
Name of entity
Name of entity
Name of entity
Name of entity
Place of business/ country
Place of business/ country
Place of business/ country
Place of business/ country
of incorporation
of incorporation
of incorporation
of incorporation
% of ownership
% of ownership
% of ownership
% of ownership
interest
interest
interest
interest
Nature of
Nature of
Nature of
Nature of
relationship
relationship
relationship
relationship
Measurement
Measurement
Measurement
Measurement
method
method
method
method
Goldfields Money
Limited
Australia
30 June
30 June
30 June
30 June
2015
2015
2015
2015
14.13
30 June
30 June
30 June
30 June
2014
2014
20142014
-
Associate
Equity method
Goldfields Money Limited (GMY) is an ASX listed Authorised Deposit-taking Institution (ADI) and offers a
variety of loan products including home, personal and commercial loans with various features to the
public. GMY also offers a variety of savings and investments, including transaction and saving accounts
and term deposits. Historically, GMY focused on providing financial services for individuals and businesses
within the Goldfields region.
The Group acquired the holding during the last quarter of the financial year. At 30 June 2015, the Group’s
share of the quoted market value of GMY was $1.882m while the carrying value, inclusive of transaction
costs and equity method accounting is $2.321m.
The Australian Prudential Regulation Authority (APRA) imposes a 15% cap on any one’s individual equity
holding in an ADI. The Group’s holding is near that limit. There are no restrictions on the Group’s ability to
dispose of its holding in GMY.
The Group acquired this associate holding as part of the strategic growth strategy of the Group.
The Group’s assessment at the end of the reporting period is that there is no objective evidence that the
equity-accounted investment is impaired.
There were no transactions with the associate during the financial year.
The Group is not aware of any contingent liabilities that may or may not exist within Goldfield Money at
30 June 2015.
Pioneer Credit Limited
30 June 2015
Page 73
Summarised financial information for the associate
Summarised financial information for the associate
Summarised financial information for the associate
Summarised financial information for the associate
Goldfields Money is a publically traded entity and at the time of approval of this annual report, publically
available information as at 30 June 2015 for Goldfields Money was not available.
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Summarised statement of financial position
Summarised statement of financial position
Summarised statement of financial position
Summarised statement of financial position
Total assets
Total liabilities
Net assets
Movement in net assets
Opening net assets
Profit / (loss) for the period
Equity raising costs
Other comprehensive income
Closing net assets
Group’s share of net assets in %
Group’s share of net assets in $
Summarised statement of comprehensive income
Summarised statement of comprehensive income
Summarised statement of comprehensive income
Summarised statement of comprehensive income
Interest revenue
Interest expense
Non-interest revenue
Other expenses
Income tax benefit
Profit from continuing operations
Other comprehensive income
Total comprehensive income
Dividends received from associates
Summarised commitments
Summarised commitments
Summarised commitments
Summarised commitments
Outstanding loan commitments
Outstanding overdraft commitments
Lease commitments
Due not later than one year
Due later than one year and not later than five years
30 June 2015
30 June 2015
30 June 2015
30 June 2015
$’000
$’000
$’000
$’000
30 June 2014
$’000
158,
158,984984984984
158,
158,
144,077
144,077
144,077
144,077
14,907
14,907
14,907
14,907
14,838
14,838
14,838
14,838
140140140140
(71(71(71(71))))
----
14,907
14,907
14,907
14,907
14.13%
14.13%
14.13%
14.13%
2,102,102,102,106666
143,067
128,229
14,838
14,683
190
(71)
36
14,838
-
-
30 June 2015
30 June 2015
30 June 2015
30 June 2015
$’000
$’000
$’000
$’000
30 June 2014
$’000
7,259
7,259
7,259
7,259
(4,319)
(4,319)
(4,319)
(4,319)
404404404404
(3,2(3,2(3,2(3,254545454))))
50505050
140140140140
----
140140140140
----
6,196
(3,612)
392
(2,817)
30
190
36
226
-
30 June 2015
30 June 2015
30 June 2015
30 June 2015
$’000
$’000
$’000
$’000
30 June 2014
$’000
10,185
10,185
10,185
10,185
449449449449
53535353
58585858
111111111111
9,025
586
87
29
116
Pioneer Credit Limited
30 June 2015
Page 74
Unrecognised items
Unrecognised items
Unrecognised items
Unrecognised items
This section of the notes provides information about items that are not recognised in the financial
statements as they do not satisfy the recognition criteria.
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
16 Contingencies
17 Commitments
18 Events occurring after the reporting period
76
76
76
Pioneer Credit Limited
30 June 2015
Page 75
16)16)16)16) Contingencies
Contingencies
Contingencies
Contingencies
The Directors are of the opinion that no contingent liabilities or contingent assets exist as at the date of
this report.
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
17)17)17)17) Commitments
Commitments
Commitments
Commitments
a)a)a)a) NonNonNonNon----cancellable operating leases
cancellable operating leases
cancellable operating leases
cancellable operating leases
The Group leases various offices under non-cancellable operating leases expiring within one to eight
years. The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the
leases are renegotiated.
Commitments for minimum lease payments in relation to non
cancellable
Commitments for minimum lease payments in relation to non----cancellable
cancellable
cancellable
Commitments for minimum lease payments in relation to non
Commitments for minimum lease payments in relation to non
operating leases are payable as
follows:
operating leases are payable as follows:
follows:
follows:
operating leases are payable as
operating leases are payable as
Within one year
Later than one year but not later than five years
Later than five years
2015
2015
2015
2015
$’000
$’000
$’000
$’000
2014
$’000
2,025
2,025
2,025
2,025
8,340
8,340
8,340
8,340
7,053
7,053
7,053
7,053
17,418
17,418
17,418
17,418
1,347
5,075
5,628
12,050
The agreement includes a lease incentive. The assets obtained by the Group have been recognised as
Leasehold Improvements and are depreciated over the shorter of their useful life or the lease term. The
lease incentive is presented as part of the lease liabilities and is reversed on a straight line basis over the
lease term.
b)b)b)b) Service contract
Service contract
Service contract
Service contract
The Group has entered into a services contract ending in August 2016, with an option to extend for a
further three years.
cancellable
Commitments for minimum service payments in relation to non----cancellable
Commitments for minimum service payments in relation to non
cancellable
cancellable
Commitments for minimum service payments in relation to non
Commitments for minimum service payments in relation to non
are payable as follows:
contracts are payable as follows:
contracts
contracts
are payable as follows:
are payable as follows:
contracts
Within one year
Later than one year but not later than five years
2015
2015
2015
2015
$’000
$’000
$’000
$’000
2014
$’000
1,551
1,551
1,551
1,551
204204204204
1,755
1,755
1,755
1,755
1,483
1,770
3,253
18)18)18)18) Events occurring after the reporting period
Events occurring after the reporting period
Events occurring after the reporting period
Events occurring after the reporting period
No matter or circumstance has occurred subsequent to year end that has significantly affected, or may
significantly affect, the operations of the Group, the results of those operations or the state of affairs of
the Group or economic entity in subsequent financial years.
Pioneer Credit Limited
30 June 2015
Page 76
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Other information
Other information
Other information
Other information
This section of the notes includes other information that must be disclosed to comply with the
accounting standards and other pronouncements, but that is not immediately related to individual line
items in the financial statements.
Related party transactions
19
Share-based payments
20
Remuneration of auditors
21
22
Earnings per share
23 Deed of cross guarantee
24
25
26
Assets pledged as security
Parent entity financial information
Summary of significant accounting policies
78
80
82
83
84
84
84
85
Pioneer Credit Limited
30 June 2015
Page 77
to the consolidated financial statements
Notes to the consolidated financial statements
Notes
to the consolidated financial statements
to the consolidated financial statements
Notes
Notes
19)19)19)19) Related party transactions
Related party transactions
Related party transactions
Related party transactions
a)a)a)a) Parent entity
Parent entity
Parent entity
Parent entity
The Parent entity within the Group is Pioneer Credit Limited.
b)b)b)b) Subsidiaries
Subsidiaries
Subsidiaries
Subsidiaries
Interests in subsidiaries are set out in note 14.
c)c)c)c) Associates
Associates
Associates
Associates
Interests in associates are set out in note 15. There were no transactions with associates in the current
period.
d)d)d)d) Key Management Personnel
Key Management Personnel
Key Management Personnel
Key Management Personnel
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
2015
2015
2015
2015
$$$$
2014
$
1,426,530
1,426,530
1,426,530
1,426,530
127,948
127,948
127,948
127,948
40,210
40,210
40,210
40,210
30,068
30,068
30,068
30,068
1,624,756
1,624,756
1,624,756
1,624,756
1,048,886
95,977
17,509
311,028
1,473,400
Detailed remuneration disclosures are provided in the Remuneration Report on pages 15 to 28.
e)e)e)e) Transactions with other related parties
Transactions with other related parties
Transactions with other related parties
Transactions with other related parties
The following transactions occurred with related parties:
Rental expenses and other services
Other related parties
Superannuation contributions
Contributions to superannuation funds on behalf of Directors
Other transactions
Remuneration paid to Directors of the ultimate Australian parent entity
2015
2015
2015
2015
$$$$
2014
$
490,917
490,917
490,917
490,917
382,842
67,751
67,751
67,751
67,751
53,660
801,817
801,817
801,817
801,817
592,635
Pioneer Credit Limited
30 June 2015
Page 78
f)f)f)f) Loans from related parties
Loans from related parties
Loans from related parties
Loans from related parties
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Beginning of the year
Loans from related parties
Loan repayments to related parties
2015
2015
2015
2015
$$$$
----
----
----
----
2014
$
(54,055)
(1,566,843)
1,620,898
-
During the previous financial year, the Group benefited from a short term rolling credit facility from a
related party. This was unsecured and did not accrue interest.
g)g)g)g)
Investment in associate
Investment in associate
Investment in associate
Investment in associate
At a meeting of the Board of the Company on 26 March 2015, the Board (with Mr Keith John abstaining)
approved the Company presenting an offer to Midbridge Investments Pty Ltd (MB) to acquire all of its
shareholding in ASX listed Goldfields Money Limited in an off-market transaction at a price of $1.04 per
share. The shareholding represented approximately 14.1% of the issued equity in Goldfields Money
Limited.
MB is a private investment vehicle of the Company’s Managing Director Mr Keith John.
On the 8th April 2015 the Company formally presented its offer to MB which was accepted.
The offer was for an amount of $2,302,972.88. The sum was paid by instalments and settled in full during
the reporting period. Neither MB, Mr Keith John or any associate of those parties received any interest,
financial accommodation or benefit as a result of being paid by instalment.
h)h)h)h) Contributed capital held by related parties
Contributed capital held by related parties
Contributed capital held by related parties
Contributed capital held by related parties
The movements during the reporting period in the value of ordinary shares in the Parent entity held
directly, indirectly or beneficially by Key Management Personnel, including their related parties are:
Ordinary shares acquired
Modification of employee share option scheme
Conversion of convertible redeemable preference shares
2015
2015
2015
2015
$$$$
2014
$
----
----
----
----
405,869
189,000
12,320,215
12,915,084
i)i)i)i) Convertible redeemable preference shares held by related parties
Convertible redeemable preference shares held by related parties
Convertible redeemable preference shares held by related parties
Convertible redeemable preference shares held by related parties
There are and were no convertible redeemable preference shares held by related parties during the
financial year.
In the previous financial year, the Company was admitted to the official list of the ASX Limited and
completed on the conversion of all classes of convertible redeemable preference shares and
reclassification to fully paid ordinary shares.
Pioneer Credit Limited
30 June 2015
Page 79
Prior to this conversion and reclassification, the movements during the reporting period in the value of
convertible redeemable preference shares in the Parent entity held directly, indirectly or beneficially by
Key Management Personnel, including their related parties are:
olidated financial statements
Notes to the consolidated financial statements
Notes to the cons
olidated financial statements
olidated financial statements
Notes to the cons
Notes to the cons
2015
2015
2015
2015
$$$$
2014
$
----
----
----
562,307
41,781
604,088
CRPS A
CRPS B
j)j)j)j) Terms and conditions
Terms and conditions
Terms and conditions
Terms and conditions
See note 9(b) for general terms and conditions on ordinary shares.
20)20)20)20) Share
based payments
Share----based payments
based payments
based payments
Share
Share
a)a)a)a) Chairman’s options
Chairman’s options
Chairman’s options
Chairman’s options
At both 30 June 2015, and 30 June 2014, the Company had the following share-based payment
arrangement.
On 7 February 2014, the Company established a share option scheme that entitles the Chairman to
purchase 300,000 shares (50,000 shares vest in April 2016 and 250,000 vest in April 2017) in the
Company at an exercise price of $1.92. Under the scheme, each share option which vests converts to
one ordinary share of Pioneer on payment of the exercise price.
fair value at grant dateateateate
Fair value of options granted –––– fair value at grant d
Fair value of options granted
fair value at grant d
fair value at grant d
Fair value of options granted
Fair value of options granted
The fair value of the Chairman's share options has been measured using a binomial pricing model. Service
conditions attached to the transactions were not taken into account in measuring grant date fair value.
Fair value at grant date
Expected IPO price at grant date
Exercise price
Expected volatility (weighted-average)
Expected life (weighted-average)
Expected dividend yield
Risk-free interest rate (based on government bonds)
Tranche 1
Tranche 1
Tranche 1
Tranche 1
Tranche 2
Tranche 2
Tranche 2
Tranche 2
$0.28
$0.28
$0.28
$0.28
$1.60
$1.60
$1.60
$1.60
$1.92
$1.92
$1.92
$1.92
35%35%35%35%
4.224.224.224.22 years
years
years
years
4.5%4.5%4.5%4.5%
3.041%
3.041%
3.041%
3.041%
$0.31
$1.60
$1.92
35%
5.22 years
4.5%
3.266%
Expected volatility has been based on an evaluation of the historical volatility of the share price of similar
entities, particularly over the historical period commensurate with the expected term. The expected term
of the instruments has been based on historical experience and general option holder behaviour.
Pioneer Credit Limited
30 June 2015
Page 80
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
b)b)b)b) Management options
Management options
Management options
Management options
No management options were granted or vested during the financial year.
During the previous financial year, in advance of the completion of the Initial Public Offer, and in
recognition of certain eligible employees’ performance since joining the Company up to and including
the date of admission to the ASX on 1 May 2014, the Board determined that all 700,000 unvested options
would vest. 300,000 options were recognised at $1.43 on 19 March 2014 and 400,000 options were
recognised at $1.26 on 19 March 2014, the then respective grant dates, as there were no further vesting
conditions to be met.
The eligible employees immediately exercised the vested options to acquire Non-Ordinary Management
(NOM) Shares, that were funded through a non-recourse loan. The NOM were ultimately converted to
Ordinary Shares.
The non-recourse loans end on the earlier of seven years from draw down date or the date the
employee’s employment with the lender is terminated. Interest is payable at a rate of 0% between draw
down date and 30 June 2014, and thereafter at the benchmark interest rate (Indicator Interest Rate - Bank
variable housing interest rate last published by the Reserve Bank of Australia before the start of each of the
Lender’s year of income), calculated daily.
This scheme was accounted for as a ‘share option scheme’, accordingly the non-recourse loans are not
recognised in the financial statements and shares not yet fully paid are recognised as Treasury Shares.
At both the current and previous balance date, three non-recourse loans remained outstanding.
c)c)c)c) Employee Share Scheme
Employee Share Scheme
Employee Share Scheme
Employee Share Scheme
There was no Employee Share Scheme in the current financial year.
During the previous financial year, to encourage broad based employee share ownership through the
period up to Initial Public Offer, the Company completed an Employee Offer which allowed eligible
employees of the Company to be gifted up to $1,000 worth of Shares and/or to acquire $5,000 worth of
Shares on a tax-deferred basis.
Through participation in the Employee Offer, 56,575 ordinary shares were issued to eligible employees for
no cash consideration and 78,125 ordinary shares were issued to eligible employees by way of salary
sacrifice. The Employee Offer shares issued were valued at $1.60 each. The shares issued for no
consideration are an expense to the Company.
Key Management Personnel and other senior management were not eligible to participate in the
Employee Offer.
A participant in the Employee Offer may not sell, transfer or create a security interest or otherwise deal in
the Shares acquired under the Employee Offer until the earlier of:
•
•
•
In respect of the up to $1,000 offer, the end of three years from the time the Shares are acquired by
the participant;
In respect of the $5,000 salary sacrifice offer, two years after the Shares have been granted; or in
either case,
the time when the participant ceases to be employed by Pioneer.
Shares acquired under the Employee Offer are held under a trading lock, but otherwise carry the same
rights and entitlements of fully paid ordinary Shares, including dividend and voting rights.
Pioneer Credit Limited
30 June 2015
Page 81
lidated financial statements
Notes to the consolidated financial statements
Notes to the conso
lidated financial statements
lidated financial statements
Notes to the conso
Notes to the conso
d)d)d)d) Expenses arising from share
based payment transactions
Expenses arising from share----based payment transactions
based payment transactions
based payment transactions
Expenses arising from share
Expenses arising from share
Total expenses arising from share-based payment transactions recognised during the period as part of
employee benefit expense were as follows:
Chairman’s options
Management options
Employee share scheme
21)21)21)21) Remuneration of auditors
Remuneration of auditors
Remuneration of auditors
Remuneration of auditors
2015
2015
2015
2015
$’000
$’000
$’000
$’000
2014
$’000
30303030
----
----
30303030
13
704
91
808
During the year the following fees were paid or payable for services provided by the auditor of the
Parent entity, its related practices and non-related audit firms:
a)a)a)a)
PricewaterhouseCoopers Australia
PricewaterhouseCoopers Australia
PricewaterhouseCoopers Australia
PricewaterhouseCoopers Australia
i)
Audit and other assurance services
Audit and other assurance services
Audit and other assurance services
Audit and other assurance services
Audit and review of financial statements
Total remuneration of PricewaterhouseCoopers Australia
Total remuneration of PricewaterhouseCoopers Australia
Total remuneration of PricewaterhouseCoopers Australia
Total remuneration of PricewaterhouseCoopers Australia
i)
b)b)b)b) Network firms of PricewaterhouseCoopers Australia
Network firms of PricewaterhouseCoopers Australia
Network firms of PricewaterhouseCoopers Australia
Network firms of PricewaterhouseCoopers Australia
Audit and other assurance services
Audit and other assurance services
Audit and other assurance services
Audit and other assurance services
Initial Public Offering professional services
Other services
Other services
Other services
Other services
Other compliance and accounting advice
ii)
Network firms of PricewaterhouseCoopers Australia
Total remuneration of Network firms of PricewaterhouseCoopers Australia
Total remuneration of
Network firms of PricewaterhouseCoopers Australia
Network firms of PricewaterhouseCoopers Australia
Total remuneration of
Total remuneration of
i)
c)c)c)c) NonNonNonNon----PricewaterhouseCoopers Australia related audit firms
PricewaterhouseCoopers Australia related audit firms
PricewaterhouseCoopers Australia related audit firms
PricewaterhouseCoopers Australia related audit firms
Audit and other assurance services
Audit and other assurance services
Audit and other assurance services
Audit and other assurance services
Initial Public Offering professional services
Other services
Other services
Other services
Other services
Other tax, compliance and accounting advice
ii)
PricewaterhouseCoopers Australia related firms
Total remuneration of non----PricewaterhouseCoopers Australia related firms
Total remuneration of non
PricewaterhouseCoopers Australia related firms
PricewaterhouseCoopers Australia related firms
Total remuneration of non
Total remuneration of non
2015
2015
2015
2015
$$$$
2014
$
255,914
255,914
255,914
255,914
194,743
255,914
255,914
255,914
255,914
194,743
----
62,943
171,191
171,191
171,191
171,191
171,191
171,191
171,191
171,191
25,964
88,907
----
324,469
117,179
117,179
117,179
117,179
117,179
117,179
117,179
117,179
544,284
544,284
544,284
544,284
89,909
414,378
698,028
Pioneer Credit Limited
30 June 2015
Page 82
22)22)22)22) Earnings per share
Earnings per share
Earnings per share
Earnings per share
a)a)a)a) Basic earnings per share
Basic earnings per share
Basic earnings per share
Basic earnings per share
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
From continuing operations attributable to the ordinary equity holders of the Company
Total basic earnings per share attributable to the ordinary equity holders of the Company
b)b)b)b) Diluted earnings per
share
Diluted earnings per share
share
share
Diluted earnings per
Diluted earnings per
From continuing operations attributable to the ordinary equity holders of the Company
Total diluted earnings per share attributable to the ordinary equity holders of the
Company
c)c)c)c) Reconciliation
of earnings used in calculating earnings per share
Reconciliation of earnings used in calculating earnings per share
of earnings used in calculating earnings per share
of earnings used in calculating earnings per share
Reconciliation
Reconciliation
Basic earnings per share
Basic earnings per share
Basic earnings per share
Basic earnings per share
Profit attributable to the ordinary equity holders of the Company used in calculating basic
earnings per share:
From continuing operations
Diluted earnings per share
Diluted earnings per share
Diluted earnings per share
Diluted earnings per share
Profit from continuing operations attributable to the ordinary equity holders of the
Company
Used in calculating diluted earnings per share
d)d)d)d) Weighted average number of shares used as
the denominator
Weighted average number of shares used as the denominator
the denominator
the denominator
Weighted average number of shares used as
Weighted average number of shares used as
2015
2015
2015
2015
Cents
Cents
Cents
Cents
16.40
16.40
16.40
16.40
16.40
16.40
16.40
16.40
2014
Cents
7.97
7.97
2015
2015
2015
2015
Cents
Cents
Cents
Cents
16.40
16.40
16.40
16.40
16.40
16.40
16.40
16.40
2014
Cents
7.97
7.97
2015
2015
2015
2015
$’000
$’000
$’000
$’000
2014
$’000
7,441
7,441
7,441
7,441
1,047
7,441
7,441
7,441
7,441
1,047
Weighted average number of ordinary shares used as the denominator in
calculating basic earnings per share
Weighted average number of ordinary and potential shares used as the
denominator in calculating diluted earnings per share
2015
2015
2015
2015
Number
Number
Number
Number
2014
Number
45,373,990
45,373,990
45,373,990
45,373,990
13,129,482
45,373,990
45,373,990
45,373,990
45,373,990
13,129,482
Pioneer Credit Limited
30 June 2015
Page 83
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
23)23)23)23) Deed of cross guarantee
Deed of cross guarantee
Deed of cross guarantee
Deed of cross guarantee
Pioneer Credit Limited, Pioneer Credit Acquisition Services Pty Limited, Sphere Legal Pty Limited, Pioneer
Credit (Philippines) Pty Limited, Pioneer Credit Financial Services Pty Limited and Pioneer Credit Broking
Services Pty Limited parties to a deed of cross guarantee, entered into on 25 June 2015, under which
each Company guarantees the debts of the others. By entering into the deed, the wholly-owned entities
have been relieved from the requirement to prepare a financial report and Directors' report under Class
Order 98/1418 (as amended) issued by the Australian Securities and Investments Commission.
The consolidated financial statements of Pioneer Credit Limited include the subsidiaries as set out in note
14 to these consolidated financial statements. Of these, Pioneer Credit Acquisition Services (UK) Limited is
the only subsidiary that is not party to the deed of cross guarantee that is not dormant. In addition the
Directors have determined that Pioneer Credit Acquisition Services (UK) Limited is not a reporting entity.
At 30 June 2015, Pioneer Credit Acquisition Services (UK) Limited has total assets of $6.00 and generated
no revenue. Costs incurred are insignificant and relate to regulatory reporting requirements in the United
Kingdom.
24)24)24)24) Assets pledged as security
Assets pledged as security
Assets pledged as security
Assets pledged as security
The carrying amount of assets pledged as security is disclosed in note 7(d).
25)25)25)25) Parent
entity financial information
Parent entity financial information
entity financial information
entity financial information
Parent
Parent
a)a)a)a) Summary financial information
Summary financial information
Summary financial information
Summary financial information
The individual financial statements for the Parent entity show the following aggregate amounts:
Balance sheet
Balance sheet
Balance sheet
Balance sheet
Current assets
Total assets
Current liabilities
Total liabilities
Shareholders’ equity
Shareholders’ equity
Shareholders’ equity
Shareholders’ equity
Issued capital
Share based payment reserve
Accumulated profits (losses)
Profit (loss) for the year
Total comprehensive income
2015
2015
2015
2015
$’000
$’000
$’000
$’000
1,205
1,205
1,205
1,205
61,247
61,247
61,247
61,247
6,711
6,711
6,711
6,711
9,001
9,001
9,001
9,001
45,445,445,445,459595959
1,073
1,073
1,073
1,073
5,714
5,714
5,714
5,714
52,246
52,246
52,246
52,246
8,968
8,968
8,968
8,968
8,968
8,968
8,968
8,968
2014
$’000
2,297
48,613
1,810
3,170
45,459
1,037
(1,053)
45,443
6,313
6,313
Pioneer Credit Limited
30 June 2015
Page 84
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
b)b)b)b) Guarantees entered into by the Parent entity
Guarantees entered into by the Parent entity
Guarantees entered into by the Parent entity
Guarantees entered into by the Parent entity
The Parent entity is bound under an unlimited commercial guarantee and indemnity as part of the Group,
with security held over all property.
c)c)c)c) Contingent liabilities of the Parent entity
Contingent liabilities of the Parent entity
Contingent liabilities of the Parent entity
Contingent liabilities of the Parent entity
The Parent entity did not have any contingent liabilities as at 30 June 2015 or 30 June 2014.
d)d)d)d) Contractual commitments for the acquisition of property, plant or e
quipment
Contractual commitments for the acquisition of property, plant or equipment
quipment
quipment
Contractual commitments for the acquisition of property, plant or e
Contractual commitments for the acquisition of property, plant or e
The Parent entity has no contractual commitments for the acquisition of property, plant or equipment at
30 June 2015 (2014: Nil)
26)26)26)26) Summary of significant accounting policies
Summary of significant accounting policies
Summary of significant accounting policies
Summary of significant accounting policies
This note provides a list of all significant accounting policies adopted in the preparation of these
consolidated financial statements. These policies have been consistently applied to all the years
presented, unless otherwise stated. The financial statements are for the Group consisting of Pioneer
Credit Limited and its subsidiaries.
Contents of the summary of significant accounting policies
Contents of the summary of significant accounting policies
Contents of the summary of significant accounting policies
Contents of the summary of significant accounting policies
Income tax
Intangible assets
a) Basis of preparation
b) Principles of consolidation
c)
d) Cash and cash equivalents
e) Trade & other receivables
f) Property, plant and equipment
g)
h) Trade and other payables
i) Borrowings
j) Provisions
k) Employee benefits
l) Contributed equity
m) Earnings per share
n) Goods and Services Tax (GST)
o) Rounding of amounts
p)
Impairment of assets
q) Leases
86
87
88
89
89
89
90
90
90
91
91
92
92
92
92
93
93
Pioneer Credit Limited
30 June 2015
Page 85
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
a)a)a)a) Basis of preparation
Basis of preparation
Basis of preparation
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian
Accounting Standards and interpretations issued by the Australian Accounting Standards Board and the
Corporations Act 2001. Pioneer Credit Limited is a for-profit entity for the purpose of preparing the
financial statements.
Compliance with IFRS
Compliance with IFRS
Compliance with IFRS
Compliance with IFRS
The consolidated financial statements of the Pioneer Credit Limited Group also comply with International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
measurement
Basis of measurement
Basis of
measurement
measurement
Basis of
Basis of
The consolidated financial statements have been prepared on an accruals basis and are based on
historical costs modified, where applicable, by the measurement at fair value of selected financial assets
and financial liabilities. The consolidated financial statements have been prepared on a going concern
basis.
Functional and presentation currency
Functional and presentation currency
Functional and presentation currency
Functional and presentation currency
The consolidated financial statements are presented in Australian dollars, which is Pioneer Credit Limited's
functional and presentation currency.
Critical accounting estimates
Critical accounting estimates
Critical accounting estimates
Critical accounting estimates
The preparation of financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the Group's accounting
policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions
and estimates are significant to the financial statements are disclosed in note 11.
Changes to presentation
Changes to presentation
Changes to presentation
Changes to presentation
Certain classifications on the consolidated statement of comprehensive income, consolidated balance
sheet and consolidated statement of cash flows have been reclassified. The Group believes that this will
provide more relevant information to stakeholders as it is more in line with common practice in the
industry the Group is operating in. The comparative information has been reclassified accordingly.
ew and amended standards adopted by the Group
NNNNew and amended standards adopted by the Group
ew and amended standards adopted by the Group
ew and amended standards adopted by the Group
The Group has applied the following standard and amendment for the first time for their annual reporting
period commencing 1 July 2014:
• AASB 2014-1 Amendments to Australian Accounting Standards
The adoption of this standard did not have any impact on the current period or any prior period and is not
likely to affect future periods. The adoption of these standards only affected the disclosures in the notes
to the financial statements.
Pioneer Credit Limited
30 June 2015
Page 86
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
New standards and interpretations not yet adopted
New standards and interpretations not yet adopted
New standards and interpretations not yet adopted
New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30
June 2015 reporting periods and have not been early adopted by the Group. The Group’s assessment of
the impact of these new standards and interpretations is set out below.
Mandatory application date/ Date
Mandatory application date/ Date
Mandatory application date/ Date
Mandatory application date/ Date
of adoption by Group
of adoption by Group
of adoption by Group
of adoption by Group
Must be applied for financial years
commencing on or after 1 January
2018. Based on the transitional
provisions in the completed IFRS 9,
early adoption in phases was only
permitted for annual reporting
periods beginning before 1 February
2015. After that date, the new rules
must be adopted in their entirety.
Mandatory for financial years
commencing on or after 1 January
2017. Expected date of adoption by
the Group: 1 July 2018.
Impact
Impact
Impact
Impact
The potential
financial impact to
the Group, if any,
has not yet been
assessed or
determined.
Management is
currently assessing
the impact of the
new rules, and at
this stage the
Group does not
anticipate there
will be any
significant impact.
Title of
Title of
Title of
Title of
standard
standard
standard
standard
AASB 9
Financial
Instruments
AASB 15
Revenue from
Contracts
with
Customers
Nature of change
Nature of change
Nature of change
Nature of change
AASB 9 addresses the classification,
measurement and de recognition of
financial assets and financial liabilities
and introduces new rules for hedge
accounting. In December 2014, the
AASB made further changes to the
classification and measurement rules
and also introduced a new impairment
model. These latest amendments now
complete the new financial instruments
standard.
The AASB has issued a new standard for
the recognition of revenue. This will
replace AASB 118 which covers
contracts for goods and services and
AASB 111 which covers construction
contracts. The new standard is based
on the principle that revenue is
recognised when control of a good or
service transfers to a customer – so the
notion of control replaces the existing
notion of risks and rewards. The
standard permits a modified
retrospective approach for the
adoption. Under this approach entities
will recognise transitional adjustments
in retained earnings on the date of
initial application (eg 1 July 2017), ie
without restating the comparative
period. They will only need to apply the
new rules to contracts that are not
completed as of the date of initial
application.
There are no other standards that are not yet effective and that are expected to have a material impact on
the entity in the current or future reporting periods and on foreseeable future transactions.
b)b)b)b) Principles of consolidation
Principles of consolidation
Principles of consolidation
Principles of consolidation
aries
Subsidiaries
Subsidi
aries
aries
Subsidi
Subsidi
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Pioneer
Credit Limited ('Company' or 'Parent entity') as at 30 June 2015 and the results of all subsidiaries for the
year then ended. Pioneer Credit Limited and its subsidiaries together are referred to in this financial report
as the Group or the Consolidated Entity.
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group
controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power to direct the activities of the
entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They
are de-consolidated from the date that control ceases.
Pioneer Credit Limited
30 June 2015
Page 87
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
The acquisition method of accounting is used to account for business combinations undertaken by the
Group. Intercompany transactions, balances and unrealised gains on transactions between Group
companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence
of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the Group.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are
de-consolidated from the date that control ceases.
Associates
Associates
Associates
Associates
Associates are all entities over which the Group has significant influence but not control or joint control.
This is generally the case where the Group holds between 20% and 50% of the voting rights or otherwise
demonstrates significant influence. Investments in associates are accounted for using the equity method
of accounting (described below), after initially being recognised at cost.
Equity method
Equity method
Equity method
Equity method
Under the equity method of accounting, the investments are initially recognised at cost and adjusted
thereafter to recognise the Group’s share of the post-acquisition profits or losses of the investee in profit
or loss, and the Group’s share of movements in other comprehensive income of the investee in other
comprehensive income. Dividends received or receivable from associates and joint ventures are
recognised as a reduction in the carrying amount of the investment.
When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the
entity, including any other unsecured long-term receivables, the Group does not recognise further losses,
unless it has incurred obligations or made payments on behalf of the other entity.
Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated
to the extent of the Group’s interest in these entities. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset transferred. Accounting policies of equity
accounted investees have been changed where necessary to ensure consistency with the policies
adopted by the Group.
The Group assesses at the end of each reporting period whether there is any objective evidence that the
equity-accounted investment is impaired. Objective evidence of impairment for an investment in an
equity instrument includes information about significant changes with an adverse effect that have taken
place in the technological, market, economic or legal environment in which the issuer operates, and
indicates that the cost of the investment in the equity instrument may not be recovered. A significant or
prolonged decline in the fair value of an investment in an equity instrument below its cost is also objective
evidence of impairment. Where there is objective evidence based on observable data that there may be
an impairment, the carrying amount of the equity-accounted investment is tested in accordance with the
policy described in note 26(p).
c)c)c)c)
Income tax
Income tax
Income tax
Income tax
The income tax expense or revenue for the period is the tax payable on the current period's taxable
income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted
at the end of the reporting period. Management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions
where appropriate on the basis of amounts expected to be paid to the tax authorities.
Pioneer Credit Limited
30 June 2015
Page 88
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Deferred income tax is provided in full, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial
statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of
goodwill. Deferred income tax is also not accounted for if it arises from the initial recognition of an asset
or liability in a transaction other than a business combination, that at the time of the transaction affects
neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws)
that have been enacted or substantially enacted by the end of the reporting period and are expected to
apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
Pioneer Credit Limited and its wholly-owned Australian controlled entities have implemented the tax
consolidation legislation. As a consequence, these entities are taxed as a single entity and the deferred tax
assets and liabilities of these entities are set off in the consolidated financial statements.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in
other comprehensive income or directly in equity, respectively.
d)d)d)d) Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash
on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with
original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are
shown within borrowings in current liabilities in the balance sheet.
e)e)e)e) Trade & other receivables
Trade & other receivables
Trade & other receivables
Trade & other receivables
Trade receivables are recognised initially at fair value, less provision for impairment. Trade receivables are
generally due for settlement within 30 days. They are presented as current assets unless collection is not
expected for more than 12 months after the reporting date.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be
uncollectible are written off by reducing the carrying amount directly. An allowance account (provision
for impairment of trade receivables) is used when there is objective evidence that the Group will not be
able to collect all amounts due according to the original terms of the receivables. Significant financial
difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and
default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade
receivable is impaired. The amount of the impairment allowance is the difference between the asset's
carrying amount and the present value of estimated future cash flows, discounted at the original effective
interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting
is immaterial.
The amount of the impairment loss is recognised in profit or loss within other expenses. When a trade
receivable for which an impairment allowance had been recognised becomes uncollectible in a
subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts
previously written off are credited against other expenses in profit or loss.
f)f)f)f) Property, plant and equipment
Property, plant and equipment
Property, plant and equipment
Property, plant and equipment
All property, plant and equipment acquired are stated at historical cost less depreciation. Historical cost
includes expenditure that is directly attributable to the acquisition of the items.
The depreciation methods and periods used by the Group are disclosed in note 8(a).
Pioneer Credit Limited
30 June 2015
Page 89
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to
the Group and the cost of the item can be measured reliably. The carrying amount of any component
accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are
charged to profit or loss during the reporting period in which they are incurred.
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are
included in profit or loss. When revalued assets are sold, it is Group policy to transfer any amounts
included in other reserves in respect of those assets to retained earnings.
g)g)g)g)
gible assets
Intangible assets
Intan
gible assets
gible assets
Intan
Intan
Software
Software
Software
Software
Costs incurred in acquiring software and licenses that will contribute to future period financial benefits
through revenue generation and/or cost reduction are capitalised to software and systems.
Amortisation methods and periods
Amortisation methods and periods
Amortisation methods and periods
Amortisation methods and periods
Refer to note 8(c) for details about amortisation methods and periods used by the Group for intangible
assets.
h)h)h)h) Trade and other payables
Trade and other payables
Trade and other payables
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of
financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of
recognition. Trade and other payables are presented as current liabilities unless payment is not due within
12 months from the reporting date.
i)i)i)i) Borrowings
Borrowings
Borrowings
Borrowings
All borrowings are initially recognised at fair value which is usually their principal amount, net of directly
attributable transaction costs incurred. Subsequent to initial recognition they are measured at amortised
cost using the effective interest rate method. Interest is recognised using the effective interest method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the
extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred
until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the
facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over
the period of the facility to which it relates.
Convertible redeemable preference shares (CRPS) comprise of two components, the financial liability in
respect of the principal raised and the dividend earned, and an equity instrument. This classes them as
compound financial instruments. AASB 132 requires that the liability component be measured first and the
difference between the proceeds of the issue and the fair value of the liability is assigned to the equity
component. Under the current terms of the shares, there is no residual element to be assigned as an
equity component and the full amount of the proceeds of the issue is carried as a liability.
Pioneer Credit Limited
30 June 2015
Page 90
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
The dividends on these preference shares are recognised in profit or loss as finance costs, and where
payable in arrears, is accrued over the period it becomes due, recorded at the contracted rate as part of
borrowings.
Borrowings are removed from the balance sheet when the obligation specified in the contract is
discharged, cancelled or expired. Borrowings are classified as current liabilities unless the Group has an
unconditional right to defer settlement of the liability for at least 12 months after the reporting period.
j)j)j)j) Provisions
Provisions
Provisions
Provisions
Provisions for legal claims and make good obligations are recognised when the Group has a present legal
or constructive obligation as a result of past events, it is probable that an outflow of resources will be
required to settle the obligation and the amount has been reliably estimated. Provisions are not
recognised for future operating losses.
Provisions are measured at the present value of management's best estimate of the expenditure required
to settle the present obligation at the end of the reporting period. The discount rate used to determine
the present value is a pre-tax rate that reflects current market assessments of the time value of money
and the risks specific to the liability. The increase in the provision due to the passage of time is recognised
as an interest expense.
k)k)k)k) Employee benefits
Employee benefits
Employee benefits
Employee benefits
Short term obligationsnsnsns
Short term obligatio
Short term obligatio
Short term obligatio
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick
leave expected to be settled within 12 months after the end of the period in which the employees render
the related service are recognised in respect of employees’ services up to the end of the reporting period
and are measured at the amounts expected to be paid when the liabilities are settled. The liability for
annual leave and accumulating sick leave is recognised in the provision for employee benefits. All other
short-term employee benefit obligations are presented as payables.
Chairman’s Options
based payments –––– Chairman’s Options
Share----based payments
Share
Chairman’s Options
Chairman’s Options
based payments
based payments
Share
Share
The grant date fair value of equity-settled share-based payment awards granted to employees is generally
recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards.
The amount recognised as an expense is adjusted to reflect the number of awards for which the related
service conditions are expected to be met, such that the amount ultimately recognised is based on the
number of awards that meet the related service conditions at the vesting date.
Management Options
based payments –––– Management Options
Share----based payments
Share
Management Options
Management Options
based payments
based payments
Share
Share
The grant-date fair value of share-based payment awards granted to employees is recognised as an
employee expense, with a corresponding increase in equity, over the period that the employees become
unconditionally entitled to the awards. The amount recognised as an expense is adjusted to reflect the
number of awards for which the related service and non-market performance conditions are expected to
be met, such that the amount ultimately recognised as an expense is based on the number of awards that
meet the related service and non-market performance conditions at the vesting date. For share-based
payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is
measured to reflect such conditions and there is no true-up for differences between expected and actual
outcomes.
For share-based payment awards structured as a share purchase arrangement, which include a limited
recourse feature, shares rights issued to employees are treated as treasury shares and no loan receivable
from employees is recognised until the right is exercised.
Pioneer Credit Limited
30 June 2015
Page 91
Notes to the consolidated financial statementsmentsmentsments
Notes to the consolidated financial state
Notes to the consolidated financial state
Notes to the consolidated financial state
The fair value of the share-based payment awards granted to employees is measured using inputs
including share price on measurement date, exercise price of the instrument, expected volatility, weighted
average expected life of the instruments, expected dividends, and the risk-free interest rate (based on
government bonds). Service and non-market performance conditions attached to the transactions are not
taken into account in determining grant date fair value.
l)l)l)l) Contributed equity
Contributed equity
Contributed equity
Contributed equity
Ordinary shares are classified as equity.
m)m)m)m) Earnings per share
Earnings per share
Earnings per share
Earnings per share
Basic earnings per share
Basic earnings per share
Basic earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing:
•
the profit attributable to owners of the Company, excluding any costs of servicing equity other than
ordinary shares
• by the weighted average number of ordinary shares outstanding during the financial year, adjusted for
bonus elements in ordinary shares issued during the year and excluding treasury shares.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take
into account:
•
•
the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares, and
the weighted average number of additional ordinary shares that would have been outstanding
assuming the conversion of all dilutive potential ordinary shares.
n)n)n)n) Goods and Services Tax (GST)
Goods and Services Tax (GST)
Goods and Services Tax (GST)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of
acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net
amount of GST recoverable from, or payable to, the taxation authority is included with other receivables
or payables in the consolidated balance sheet.
Cash flows are presented on a gross basis.
o)o)o)o) Rounding of amounts
Rounding of amounts
Rounding of amounts
Rounding of amounts
The Company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and
Investments Commission, relating to the 'rounding off' of amounts in the financial statements. Amounts in
the financial statements have been rounded off in accordance with that Class Order to the nearest
thousand dollars, or in certain cases, the nearest dollar.
Pioneer Credit Limited
30 June 2015
Page 92
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
p)p)p)p)
Impairment of assets
Impairment of assets
Impairment of assets
Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are
tested annually for impairment or more frequently if events or changes in circumstances indicate that
they might be impaired. Other assets are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of
assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are
reviewed for possible reversal of the impairment at the end of each reporting period.
q)q)q)q) Leases
Leases
Leases
Leases
Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and
rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease's
inception at the fair value of the leased property or, if lower, the present value of the minimum lease
payments. The corresponding rental obligations, net of finance charges, are included in other short-term
and long-term payables. Each lease payment is allocated between the liability and finance cost. The
finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each period. The property, plant and equipment
acquired under finance leases is depreciated over the asset's useful life or over the shorter of the asset's
useful life and the lease term if there is no reasonable certainty that the Group will obtain ownership at
the end of the lease term.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the
Group as lessee are classified as operating leases (note 17). Payments made under operating leases (net of
any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the
period of the lease.
Pioneer Credit Limited
30 June 2015
Page 93
Directors’ declaration
Directors’ declaration
Directors’ declaration
Directors’ declaration
In the Directors' opinion:
a)
the financial statements and notes set out on pages 33 to 93 are in accordance with the
Corporations Act 2001, including:
i)
ii)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements, and
giving a true and fair view of the Consolidated Entity's financial position as at 30 June 2015 and of
its performance for the year ended on that date, and
b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable, and
c) at the date of this declaration, there are reasonable grounds to believe that the members of the
extended closed Group identified in note 23 will be able to meet any obligations or liabilities to which
they are, or may become, subject by virtue of the deed of cross guarantee described in note 23.
Note 26(a) confirms that the financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board.
The Directors have been given the declarations by the managing director and chief financial officer
required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of Directors.
John
Keith John
Keith
John
John
KeithKeith
Managing Director
Perth
20 August 2015
Pioneer Credit Limited
30 June 2015
Page 94
Independent auditor’s report to the members of
Pioneer Credit Limited
Report on the financial report
We have audited the accompanying financial report of Pioneer Credit Limited (the company), which
comprises the consolidated balance sheet as at 30 June 2015, the consolidated statement of
comprehensive income, consolidated statement of changes in equity and consolidated statement of
cash flows for the year ended on that date, a summary of significant accounting policies, other
explanatory notes and the directors’ declaration for Pioneer Credit Limited (the consolidated entity).
The consolidated entity comprises the company and the entities it controlled at year’s end or from time
to time during the financial year.
Directors’ responsibility for the financial report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards, the Corporations Act 2001
and Report on the Remuneration Report and for such internal control as the directors determine is
necessary to enable the preparation of the financial report that is free from material misstatement,
whether due to fraud or error. In Note 26 (a), the directors also state, in accordance with Accounting
Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with
International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the consolidated
entity’s preparation and fair presentation of the financial report 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. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the directors, as well
as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001.
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Page 95
Auditor’s opinion
In our opinion:
(a)
the financial report of Pioneer Credit Limited is in accordance with the Corporations Act 2001,
including:
(i)
(ii)
giving a true and fair view of the consolidated entity's financial position as at 30 June
2015 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards (including the Australian Accounting
Interpretations), the Corporations Regulations 2001 and Report on the Remuneration
Report.
(b)
the financial report and notes also comply with International Financial Reporting Standards as
disclosed in Note 26 (a).
Report on the Remuneration Report
We have audited the remuneration report included in pages 15 to 28 of the directors’ report for the
year ended 30 June 2015. 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.
Auditor’s opinion
In our opinion, the remuneration report of Pioneer Credit Limited for the year ended 30 June 2015
complies with section 300A of the Corporations Act 2001.
Matters relating to the electronic presentation of the audited
financial report
This auditor’s report relates to the financial report and remuneration report of the Pioneer Credit
Limited for the year ended 30 June 2015, which are available on Pioneer Credit Limited ’s web site.
The company’s directors are responsible for the integrity of Pioneer Credit Limited ’s web site. We
have not been engaged to report on the integrity of this web site. The auditor’s report refers only to the
financial report and remuneration report named above. It does not provide an opinion on any other
information which may have been hyperlinked to/from the financial report or the remuneration
report. If users of this report are concerned with the inherent risks arising from electronic data
communications they are advised to refer to the hard copy of the audited financial report and
remuneration report to confirm the information included in the audited financial report and
remuneration report presented on this web site.
PricewaterhouseCoopers
William P R Meston
Partner
Perth
20 August 2015
Page 96
Shareholder information
Shareholder information
Shareholder information
Shareholder information
The shareholder information set out below was applicable as at 31 July 2015.
a)a)a)a) Distribution of equity securities
Distribution of equity securities
Distribution of equity securities
Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
Holding
Holding
Holding
Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Holders
Holders
Holders
Holders
205
249
140
283
48
925
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
114,541
734,988
1,116,107
8,702,841
34,705,513
45,373,990
There were zero holders of less than a marketable parcel of ordinary shares.
b)b)b)b) Equity security
holders
Equity security holders
holders
holders
Equity security
Equity security
Twenty largest quoted equity security holders
Twenty largest quoted equity security holders
Twenty largest quoted equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
Name
Name
NameName
Alana Natasha John
Banksia Management Pty Limited
National Nominees Limited
BC Fund II Pty Limited
RBC Investor Services Australia Nominees Pty Limited
Citicorp Nominees Pty Limited
J P Morgan Nominees Australia Limited
BNP Paribas Nominees Pty Limited
Bernard Jocelyn Patrick Prefumo
Niribi Pty Limited
HSBC Custody Nominees (Australia) Limited
Sharlin Nominees Pty Limited
Avy Nominees Pty Limited
James Arthur Singh & Kristy Nicole Milward
Hoperidge Enterprises Pty Limited
Escor Investments Pty Limited
Mr Stephen James Lambert & Mrs Ruth Lynette Lambert &
Mr Simon Lee Lambert
Coolah Holdings Pty Limited
Midbridge Investments Pty Limited
Sandini Pty Limited
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Number held
Number held
Number held
Number held
7,168,186
5,612,634
5,053,012
2,033,915
1,167,177
1,144,701
1,028,830
910,000
903,706
593,872
546,750
519,558
450,574
436,887
425,000
412,500
400,000
350,000
337,470
310,000
Percentage
Percentage
Percentage
Percentage
of issued shares
of issued shares
of issued shares
of issued shares
15.80
12.37
11.14
4.48
2.57
2.52
2.27
2.01
1.99
1.31
1.20
1.15
0.99
0.96
0.94
0.91
0.88
0.77
0.74
0.68
Pioneer Credit Limited
30 June 2015
Page 97
Unquoted equity securities
Unquoted equity securities
Unquoted equity securities
Unquoted equity securities
Name
Name
NameName
Michael Smith
c)c)c)c) Substantial holders
Substantial holders
Substantial holders
Substantial holders
Substantial holders in the Company are set out below:
Options
Options
Options
Options
Number held
Number held
Number held
Number held
300,000
Percentage
Percentage
Percentage
Percentage
of issued options
options
of issued
options
options
of issued
of issued
100
Name
Name
NameName
Alana Natasha John
Banksia Management Pty Limited & BC Fund II Pty Limited
Discovery Asset Management Pty Limited
Number held
Number held
Number held
Number held
8,213,216
7,646,549
3,769,408
Percentage
Percentage
Percentage
Percentage
18.10%
16.85%
8.31%
d)d)d)d) Securities subject to voluntary escrow
Securities subject to voluntary escrow
Securities subject to voluntary escrow
Securities subject to voluntary escrow
Escrow ends
Escrow ends
Escrow ends
Escrow ends
10 days after release to ASX of 30 June 2015 results
1 May 2016
1 May 2017
ClassClassClassClass
Ordinary shares
Ordinary shares
Ordinary shares
Number of shares
Number of shares
Number of shares
Number of shares
20,239,290
62,500
39,380
e)e)e)e) Voting rights
Voting rights
Voting rights
Voting rights
At a general meeting of shareholders; every shareholder entitled to vote may vote in person or by proxy,
attorney or representative; on a show of hands every shareholder who is present in person or by proxy,
attorney or representative has one vote; and on a poll every shareholder who is present in person or by
proxy, attorney or representative has one vote for every share held, but, in respect of partly-paid shares,
shall have a fraction of a vote for each partly-paid share.
Pioneer Credit Limited
30 June 2015
Page 98