Annual Report
for the year ended 30 June 2017
Pioneer Credit Limited ABN 44 103 003 505
Annual Report - 30 June 2017
Lodged with the ASX under Listing Rule 4.3A.
Contents
Results for announcement to the market
Financial Statements
i
22
These are the consolidated financial statements of Pioneer Credit Limited and its subsidiaries and are presented in
Australian currency. Pioneer Credit Limited is a Company limited by shares, incorporated and domiciled in Australia. Its
registered office is:
Level 6, 108 St Georges Terrace
Perth WA 6000
A description of the Company’s principal activities is included in the Review of Operations on page 3 and in the
Directors' Report on page 6 of this Annual Report, both of which are not part of these financial statements.
The financial statements were authorised for issue by the Board of Directors on 24 August 2017. The directors have the
authority to amend and reissue the financial statements.
Pioneer Credit Limited ABN 44 103 003 505
Appendix 4E
Preliminary Final Report
for the year ended 30 June 2017
(previous corresponding period 30 June 2016)
Results for announcement to the market
Key information
Revenue from ordinary activities
Profit from ordinary activities after tax attributable to
members
Net profit for the period attributable to members
Dividends per ordinary share / distributions
Final 2016 ordinary
Interim 2017 ordinary
Final 2017 ordinary
30 June
2017
$’000
30 June
2016
$’000
56,308
47,856
10,753
10,753
9,450
9,450
Change
$’000
8,452
1,303
1,303
%
17.66
13.79
13.79
Amount
per
security
(cents)
Franked
amount
per
security Record date
Paid /
Payable
date
6.20
4.22
5.28
100%
100%
100%
30/09/2016
31/03/2017
30/08/2017
31/10/2016
28/04/2017
04/10/2017
There is no provision for a final dividend in respect of the year ended 30 June 2017. 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
once the dividend has been declared.
A Dividend Reinvestment Plan (DRP) was in operation from the final dividend for 2015 and applies for all subsequent
dividends unless notice is given for its suspension or termination. The last date for receipt of an election notice for
participation in the Final 2017 ordinary DRP is 01 September 2017.
Financial Statements
Full commentary on the results for the period and other significant information is provided in the 2017 Media Release,
Results Presentation and Consolidated Financial Statements - 30 June 2017, released today which include:
•
•
•
•
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
Pioneer Credit Limited
30 June 2017
i
Key Ratios
Results for announcement to the market
Net tangible assets per fully paid ordinary share
Basic earnings per fully paid ordinary share
Entities over which control has been gained
30 June 2017
(cents)
30 June 2016
(cents)
149.87
20.77
127.42
20.36
Pioneer Credit Limited incorporated a 100% owned subsidiary, Pioneer Credit Solutions (NZ) Limited on 5 July 2016
and established the Pioneer Credit Limited Equity Incentive Plan Trust on 23 November 2016.
Investment in associate
Pioneer Credit Limited owns 11.28% of the ordinary shares in Goldfields Money Limited and its financial results are
equity accounted for in these Consolidated Financial Statements.
No audit dispute or qualification on the financial statements
The Consolidated Financial Statements at 30 June 2017 and accompanying notes have been audited and are not
subject to any qualifications. The Independent Auditor's Report has been provided with the statements released today.
Pioneer Credit Limited
30 June 2017
ii
Pioneer Credit Limited ABN 44 103 003 505
Annual Report
for the year ended 30 June 2017
Contents
Corporate Directory
Review of Operations
Directors’ Report
Corporate Governance Statement
Financial Statements
Independent Auditor’s Report to the Members
Shareholder Information
2
3
6
21
22
76
83
Pioneer Credit Limited
30 June 2017
1
Corporate Directory
Directors
Mr Michael Smith (Chairperson)
Mr Keith John
Mr Mark Dutton
Ms Andrea Hall
Company Secretary
Ms Susan Symmons
Notice of annual general meeting
Principal registered office in Australia
Share registrar
Auditor
Solicitors
Bankers
The annual general meeting of Pioneer Credit Limited
will be held at 10am on Friday 27 October 2017 at
Level 8, Exchange Tower
2 The Esplanade
Perth WA 6000
Level 6
108 St Georges Terrace
Perth WA 6000
Link Market Services Limited
Level 12
250 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
300 Murray Street
Perth WA 6000
+61 8 9369 5966
Westpac
109 St Georges Terrace
Perth WA 6000
+61 8 9426 2580
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 2017
2
Review of Operations
Review of Operations
Throughout FY17 Pioneer Credit Limited (“Pioneer” or “the Company”) was focused on driving increased discipline
throughout the organisation which contributed to record financial performance of 17.66% growth in revenue and 13.79%
growth in statutory profit after taxation.
Pioneer has been and continues to be well positioned to take advantage of the changes in its competitive landscape
which includes continued challenges in some competitors’ businesses, an increasing brand and customer focused
banking sector, and normalisation of price expectations. Pioneer has been and remains well positioned to continue
investing at competitive price points through its differentiated servicing capabilities, supported by an increasingly strong
underwriting capability within our growing expert credit risk analytics team.
Of the highlights during the year was the strengthening of Pioneer’s balance sheet with a $110m syndicated senior debt
facility and a $20m oversubscribed equity raising, the expansion of our portfolio acquisition programme into New
Zealand (with a subsidiary of a major Australian bank) and an increase in our customer service team by over 100
people, all of whom were recruited based on their alignment to our Leadership Principles and their strong fit to
Pioneer’s culture.
Operating and financial review
The statutory net profit after taxation for the year ended 30 June 2017 was $10.75 million, up 13.79% on 2016.
Key financial highlights for the year ended 30 June 2017 compared to the prior period equivalent are:
Cash receipts of $70.10m up 10.60%
Statutory net profit after taxation of $10.75m up 13.79%
EBITDA1 of $35.04m up 12.34%
EBIT of $17.44m up 13.24%
Purchased Debt Portfolios held at fair value of $164.46m up 48.02%
1 EBITDA is before Change in Value
PDP Investments
During the year Pioneer invested ~$55m in forward flow and traditional portfolios and in April 2017 completed an
inventory portfolio investment of ~$14m to close out our strongest year of investment yet at $69.62m. With the strong
pricing discipline observed for every investment opportunity this was a pleasing performance and evidence that vendors
continue to prefer Pioneer for their differentiated service offering.
Pioneer Credit Connect (‘Connect’)
2017 was Connect’s first full year of business with its management focused on broadening and strengthening the
operating model.
Pioneer Credit Limited
30 June 2017
3
Review of Operations
The foundation of the Connect business is to:
extend Pioneer’s relationship with our customers beyond the payment of their initial account;
provide customers with value based products and education to strengthen their financial health; and
attract new customers to Pioneer to expand our customer base.
Two core products are offered through Connect:
home loans under a traditional broking model or via our direct-to-lender business Switchmyloan; and
a white labelled personal loan in partnership with Goldfields Money Limited.
Connect has also established strong partnerships with a business loan and a car loan provider. These provide Connect
with alternatives to fully meet the diverse needs of our customers and deepen Pioneer’s expertise across a wider range
of products.
In November 2016 Credit Place was launched, providing a platform for customers to understand their credit worthiness
and financial health through a free credit score, which continues with our goal to educate and support customers and
strengthen their financial future.
Exceptional people providing exceptional customer service
The Leadership Principles are a values based framework by which the Company operates and embody the
expectations of our people. As a business differentiated through its servicing model, all new team members undertake a
robust training and development program which includes a ten-week induction, comprising two weeks in the classroom
and a further eight weeks under the direction of the Talent and Capability Team. Progress is measured, tested and
supported through this period to ensure that our customers will experience exceptional levels of service. Post induction
each person participates in monthly development (across technical and soft skills) including unique to Pioneer,
nationally accredited Certificate IV in Customer Engagement and Certificate IV in Leadership and Management
programs. For emerging leaders Pioneer has developed the Leadership Series, based on its Leadership Principles, for
our next generation of leaders.
The Company now employs close to 500 people across Australia and the Philippines with over 120 people joining our
teams during the year, significantly increasing our operational capacity so that we are better equipped to service our
customers at times that best suit them.
An important aspect of the disciplines across the Company is that we measure and report the outcomes achieved so
that we can continue to develop and improve both the corporate and operational strategies.
Annually the Pioneer People and Culture Survey is undertaken which measures employee engagement and alignment
of our people to our Leadership Principles.
With a participation rate of 90% during the year the highlights were:
98% of employees recommend Pioneer as a place to work; and
98% of our people agreed with the statement ‘Pioneer consistently delivers excellent service to its customers’.
Balancing the views of our people are those of our customers, which are measured through internal call excellence
audits and through the Net Promoter System, which is run by an independent third party provider and surveys
customers at three key stages in their journey with Pioneer;
1) at the completion of their first conversation with one of our people;
2) once a customer first agrees a payment arrangement, and
3) at the finalisation of a customer’s account with Pioneer.
Pioneer’s Net Promoter Score for the year is +13. The average across most financial services companies is a negative
score, clearly illustrating that Pioneer’s differentiated offering is both successful and valued by its customers.
Pioneer Credit Limited
30 June 2017
4
Review of Operations
Community Engagement
Pioneer continues to support the communities in which we operate and during the year expanded the reach of our
Pioneer Hearts programme. Our activities extended beyond ‘in kind’ support to partner groups through the provision of
contact centre services to support programmes run by them, to include volunteering for Starlight Foundation at
community events and for the first time through a corporate giving programme with the Australian Red Cross.
As a major sponsor of the ‘Tour de Cure’, a three day cycling event supporting cancer research, Pioneer provided
significant financial support, a cyclist and support crew members from our team to participate in the event over 280
kilometres through New South Wales. A number of additional events were also held including a ‘Spin Challenge’. Held
in our Perth customer service centre, over 95% of our Perth team participated by keeping four spin bikes in motion for
nine hours each, while our rider in the Tour de Cure was cycling each day. Our business partners were invited to take
part in this event and provided generous donations in their own right to supplement the contributions of Pioneer and its
people.
Our association with Toybox International continues to grow. For the second year our ‘Fill the Christmas Toybox’
initiative saw team members purchase gift tags for the Toybox which were then used to purchase a range of gifts for
those less fortunate to be shared at Christmas.
In the Philippines we helped fund the building of a shelter for the homeless, we visited the disadvantaged in an
outreach programme and we continued providing packs of essential everyday items, donated by our people, to those
less fortunate than ourselves.
Pioneer’s commitment to the communities in which we operate is very real, substantial, and an aspect of our Company
for which we are proud. We are committed to growing our community programmes and to building upon the work we do
with our more financially able and secure customers.
Capital Management
In December 2016 the Company agreed a three year $110m senior debt facility with Westpac Banking Corporation and
Bankwest and in April 2017 completed an equity raising of $20m through an oversubscribed $15m placement to
institutional and sophisticated investors and a $5m fully underwritten rights issue to existing shareholders.
The Company continues to manage its capital in a conservative manner. All covenants under its senior debt facility
were met during the year and at 30 June 2017 the Company had a loan to portfolio asset value ratio of 47.62%
compared to the covenant maximum of 55%, with an undrawn limit on the Facility of $26.26m. An interim dividend for
the first-half of the financial year of 4.22 cents per share was paid and a final dividend of 5.28 cents per share has been
declared, with a record date of 30 August 2017.
Outlook
The Company is pleased to affirm its guidance to the market for FY18 for portfolio investments of at least $70m and net
profit after taxation of at least $16m.
Pioneer Credit Limited
30 June 2017
5
Directors’ Report
The Board of Directors present their report on the Consolidated Entity (‘the Group’ or ‘the Company’) consisting of
Pioneer Credit Limited and the entities it controlled at or during the year ended 30 June 2017.
Directors
The following people were Directors of Pioneer Credit Limited during the financial year and at the date of this report:
Director’s report
Mr Michael Smith
Mr Keith John
Mr Mark Dutton
Ms Andrea Hall (appointed 7 November 2016)
Ms Anne Templeman-Jones (resigned 7 November 2016)
Mr Rob Bransby (resigned 31 March 2017)
Principal activities
Pioneer is a financial services provider which specialises in acquiring and servicing unsecured retail debt portfolios and
introducing brokered personal credit and loan products.
With more than 160,000 customers across Australia and New Zealand, in 2016 we expanded our product range to
include loans provided by our valued vendor and banking partners that will assist progressing our customers to achieve
financial independence and home ownership.
Dividends
Dividends or distributions paid to members during the year were as follows:
Ordinary shares – Declared and paid during the year 2017
Total
Date of payment
Dividend on fully paid ordinary shares held at 30 September 2016
Dividend on fully paid ordinary shares held at 31 March 2017
$3,070,926
$2,098,369
31/10/2016
28/04/2017
Since the end of the financial year the Directors have declared a final dividend of 5.28 cents per fully paid ordinary
share with a record date of 30 August 2017 to be paid on 4 October 2017.
Review of operations
The Review of Operations is set out on page 3 of this Annual Report.
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
No matter has arisen since 30 June 2017 that significantly affects the Group’s operations, results or state of affairs or
that may do so in future years.
Environmental regulation
The Company is not affected by any significant environmental regulations.
Pioneer Credit Limited
30 June 2017
6
Director’s report
Information on Directors
Mr Michael Smith
Independent Non-Executive Chairman
Experience and expertise
Listed Company Directorships
including those held at any time in
the previous 3 years
Special responsibilities
Mr Smith was appointed Chairman of Pioneer in February 2014.
Mr Smith is the Managing Director of strategic marketing consultancy Black
House, Non-Executive Chairman of 7-Eleven Stores Pty Ltd, Lionel Samson
Sadleir Group and Starbucks Australia Advisory Board and a Non-Executive
Director of Creative Partnerships Australia.
Mr Smith is a Fellow of AICD and a D. Litt. (Hon) from UWA for his
contribution to business and the arts.
Mr Smith’s previous roles include Deputy Chairman of Automotive Holdings
Group Limited and Chairman of iiNet Limited, Synergy, Verve, Perth
International Arts Festival, West Coast Eagles and Scotch College.
iiNet Limited
Automotive Holdings Group Ltd
19 Sep 2007 to 7 Sep 2015
6 May 2010 to 20 Nov 2015
Chairman of the Board
Chairman of Nomination Committee
Chairman of Remuneration Committee
Member of Audit and Risk Management Committee
Interests in shares and options
Ordinary Shares
Unlisted Options
Mr Keith John
Managing Director
350,455
300,000
Experience and expertise
Listed Company Directorships
including those held at any time in
the previous 3 years
Mr John has over 25 years experience in the financial services industry, is
the founder of Pioneer Credit and is widely regarded as an expert in the
impaired credit sector in Australia.
Mr John has a strong interest in philanthropy and through his business and
directorships supports numerous organisations across Australia.
Mr John is Director of Midbridge Investments Pty Ltd and a Non-Executive
Director of Goldfields Money Limited.
Goldfields Money Limited
from 27 May 2016
Special responsibilities
Managing Director
Member of Nomination Committee
Interests in shares and rights
Ordinary Shares
Indeterminate Rights
7,625,585
150,000
Pioneer Credit Limited
30 June 2017
7
Mr Mark Dutton
Independent Non-Executive Director
Experience and expertise
Mr Dutton was appointed a Director of Pioneer in May 2010.
Director’s report
The founder of Banksia Capital, Mr Dutton was previously a Director of
Mineral Resources Limited, Foundation Capital, BancBoston Capital, and a
partner at Navis Capital. Mr Dutton has also worked in Audit and Corporate
Finance at PricewaterhouseCoopers in the UK and Russia.
Mr Dutton is a chartered accountant and a member of the Institute of
Chartered Accountants of England & Wales. Mr Dutton holds an MA in
Management Studies and Natural Sciences from Cambridge.
Mineral Resources Limited
8 Nov 2007 to 20 Nov 2014
Listed Company Directorships
including those held at any time in
the previous 3 years
Special responsibilities
Member of Nomination Committee
Member of Remuneration Committee
Member of Audit and Risk Management Committee
Interests in shares
Ordinary Shares
112,145
Ms Andrea Hall
Independent Non-Executive Director
Experience and expertise
Ms Hall was appointed a Director of Pioneer in November 2016.
Ms Hall is a director of Tap Oil Ltd, Insurance Commission of WA, Lottery
West, Fremantle Dockers Football Club and C-Wise.
A chartered accountant, Ms Hall has a Bachelor of Commerce from UWA, a
Masters of Applied Finance, is a Fellow of the Institute of Chartered
Accountants Australia and New Zealand and a former chair of the WA Council
of Chartered Accountants Australia and New Zealand.
Ms Hall was a Risk Consulting Partner at KPMG and has over 20 years
experience in governance and risk management, financial management,
internal audit and external audit.
Tap Oil Limited
from 18 Oct 2016
Listed Company Directorships
including those held at any time in
the previous 3 years
Special responsibilities
Member of Nomination Committee
Member of Remuneration Committee
Chair of Audit and Risk Management Committee
Interests in shares
Ordinary Shares
Nil
Pioneer Credit Limited
30 June 2017
8
Meeting of Directors
The number of meetings held, and attended, by the Directors during the year ended 30 June 2017 was:
Name
Board Meetings
Committee Meetings
Audit and Risk
Remuneration
Nomination
Director’s report
Mr Michael Smith
Mr Keith John
Mr Mark Dutton
Ms Andrea Hall +++
Ms Anne Templeman-Jones ++
Mr Rob Bransby +
Attended Held Attended
16
16
5
Held
5
Attended
1
Held
1
Attended
2
Held
2
16
15
8
8
13
16
16
8
8
13
*
4
3
2
*
*
5
3
2
*
*
1
*
*
0
*
1
*
*
0
*
2
*
*
1
*
2
*
*
1
Held Number of meetings held during the year, during the time the Director held office or was a committee member
* Not a member of the committee
+ Mr Rob Bransby resigned 31 March 2017
++ Ms Ann Templeman-Jones resigned 7 November 2016
+++ Ms Andrea Hall appointed 7 November 2016
Company Secretary
Ms Susan Symmons joined Pioneer as General Counsel and Company Secretary on 1 October 2015. Ms Symmons
has over 25 years’ corporate experience including positions with Heytesbury Pty Ltd, Evans & Tate Limited, Automotive
Holdings Group Limited and Helloworld Limited. Ms Symmons holds a Bachelor of Commerce from Curtin University
and a Master of Business Law from UNSW and is a member of the Governance Institute of Australia.
Pioneer Credit Limited
30 June 2017
9
Remuneration Report
1
2
3
4
5
6
7
8
9
Overview
Remuneration Governance
Executive Remuneration
Non-Executive Director Arrangements
Statutory Remuneration Disclosures
Equity Instruments held by KMP
Terms and Conditions of Share-Based Payment Arrangements
Loans given to KMP
Other transactions with KMP
Director’s report
10
11
11
13
14
16
17
18
18
This Remuneration Report explains the Board’s approach to executive remuneration and the remuneration outcomes for
the Company’s Key Management Personnel for the year ended 30 June 2017.
1.
Overview
1.1.
Key Management Personnel (‘KMP’)
KMP includes all directors and executives who have responsibility for planning, directing and controlling material activities
of the Company. In this report ‘senior executives’ refers to KMP excluding Non-Executive Directors.
The information in this remuneration report has been audited under the Corporations Act 2001 S 308(3C).
List of KMP
Directors
Mr Michael Smith
Mr Keith John
Mr Mark Dutton
Ms Andrea Hall
Ms Anne Templeman-Jones
Mr Rob Bransby
Senior Executives
Ms Lisa Stedman
Mr Leslie Crockett
Mr Anthony Bird
Ms Susan Symmons
Independent Non-Executive Chairman
Managing Director
Independent Non-Executive Director
Independent Non-Executive Director (appointed 7 November 2016)
Independent Non-Executive Director (resigned 7 November 2016)
Independent Non-Executive Director (resigned 31 March 2017)
Chief Operating Officer
Chief Financial Officer
Chief Risk Officer
General Counsel and Company Secretary
1.2.
Remuneration Policy and Link to Performance
In executing the Company’s remuneration strategy, the Remuneration Committee makes recommendations which:
a) motivate senior executives to deliver long term sustainable growth within an appropriate control framework;
b)
c)
demonstrate a clear and strong correlation between performance and remuneration; and
align the interests of senior executives with those of the Company’s shareholders.
Pioneer Credit Limited
30 June 2017
10
Director’s report
2.
Remuneration Governance
2.1.
Role of the Remuneration Committee
The Remuneration Committee is a committee of the Board primarily responsible for providing recommendations on:
a)
b)
c)
d)
remuneration of Directors and senior executives;
incentive and equity-based remuneration plans;
key performance indicators to ensure remuneration is aligned to outcomes; and
the appropriateness of total payments proposed to Directors and senior executives.
The Corporate Governance Statement and the Remuneration Committee Charter provide further information on the role
of this committee. These documents are available on the Company’s website at:
http://corporate.pioneercredit.com.au/investor-centre/corporate-governance/.
The Committee reviews its remuneration strategy at least annually to ensure that the Company’s remuneration structures
are fair and support the attraction and retention of quality people who are aligned with the long term interests of its
stakeholders.
The Managing Director and senior executives do not participate in any decision relating to their own remuneration.
2.2.
Use of remuneration consultants
To ensure the Remuneration Committee is fully informed when making decisions it will periodically seek external advice.
Any appointment is made in accordance with the ASX Corporate Governance Principles and Recommendations and is
made free from influence from KMP.
2.3.
Pioneer Credit’s Securities Trading Policy
The Securities Trading Policy imposes trading restrictions on all employees, contractors and consultants who are
considered to be in possession of market sensitive information and restrictions in the form of closed periods for KMP who
are prohibited from trading in the Company’s securities, except in a 30 day trading window period commencing 7 days
after the release of the final and half yearly financial results and after the Annual General Meeting.
KMP are prohibited from entering into contracts to hedge their exposure to any securities held in the Company.
3.
Executive Remuneration
3.1.
Executive Remuneration Strategy
The Board recognises that satisfying appropriate remuneration expectations is important in attracting and retaining quality
people and does this through its remuneration strategy. During the year the Remuneration Committee completed a
comprehensive review of this strategy and changed it to ensure alignment to the tenure of the assets the Company
invests in.
During the year senior executives were not awarded a short term incentive (‘STI’) and rather were granted a Long Term
Incentive (‘LTI’) in the form of performance rights which vest over periods from 3 to 5 years principally as a retention
award. The Managing Director did not participate in this award.
From 1 July 2017 the Company will not use STIs for the Managing Director or for most senior executives and senior
managers. The Chief Operating Officer and her direct reports, and only those directly responsible for revenue outcomes,
will remain eligible to receive a STI, with strict conditions attaching to quality and the maintenance of the Company’s
exemplary compliance record. These executives and managers may also be eligible for performance rights.
As an acquirer of assets that typically liquidate over a period of up to 10 years, the Board recognises the importance of
incentivising employees so that they remain accountable for the most significant part of the life of the PDPs. Pioneer’s
updated remuneration strategy now rewards only long term sustainable business performance.
3.2.
Fixed Remuneration
Fixed remuneration consists of base salary and superannuation as per the Superannuation Guarantee (Administration)
Act 1992.
Pioneer Credit Limited
30 June 2017
11
Director’s report
The Managing Director reviews the performance of his senior executives by meeting each at least monthly to discuss
their performance and then separately assesses the performance of the executive team as a whole. The review process
is consultative in nature and contains a subjective assessment of the executive’s performance to their KPIs and
responsibilities and the updating and setting of future expectations.
The Managing Director's performance is reviewed by the Nomination Committee by roundtable discussions with him.
Remuneration for all senior executives is reviewed at least annually and there are no guaranteed increases in any
executive’s employment contract. Any remuneration reviews are determined independent of any performance review,
however will not contradict each other.
3.3.
Short Term Incentive
No STI was awarded to senior executives or senior managers of the Company for FY17 and the Remuneration
Committee has determined that, with the exception of the Chief Operating Officer and her direct reports, no STIs will be
awarded to senior executives in the future.
3.4.
Long-term incentives
3.4.1.
About Pioneer’s long term incentive
At the Annual General Meeting held on 29 October 2014, shareholders approved the Pioneer Credit Equity Incentive Plan
(‘the Plan’). The Company will seek shareholder approval to refresh the Plan at the 2017 Annual General Meeting.
Objective
The Plan provides eligible participants with an equity incentive that recognises ongoing contribution to the achievement
by the Company of its strategic goals and to provide a means of attracting and retaining skilled and experienced
employees.
Participation
Participation in the Plan is at the discretion of the Board.
Assessment of performance
The Board reviews and approves the performance assessment and LTI awards for the senior executives. The grant
approved in 2017 recognised performance and contribution of the participants in delivering shareholder value evidenced
by sustainable earnings growth through disciplined capital management and operational excellence in customer service.
Due to the nature of Pioneer’s business, as an acquirer of assets that typically liquidate over a period of up to 10 years,
the Board recognises the importance of appropriately incentivising employees such that they are accountable for the
most significant part of tenure of acquired assets. The performance assessment of management ensures a focus on
continuing to acquire appropriate assets at the optimal prices, rather than driving short term results.
Sustained performance is required by senior executives over the life of the assets the Company acquires and is
consistent with the Board’s commitment to maintaining an executive team that is focused on making decisions for the
long-term health and growth of the Company.
Payment method
LTI awards are provided in grants of Performance Rights which vest into Shares on the achievement of service
conditions. Indeterminate Rights exist where the Board, in their absolute and unfettered discretion, determine for the
rights to vest into Shares on the achievement of service conditions or to make a cash payment equivalent to the value of
vested rights.
Pioneer Credit Limited
30 June 2017
12
3.4.2.
Long term incentive awards in place during the year
An LTI award was made under the Plan on 1 July 2016 as follows:
Instrument
Quantum
Grant Date
Key performance measures
Performance period
Dividends
Fair Value, Vesting date and
Vesting period schedule
Performance rights for ordinary shares
200,000 performance rights
1 July 2016
Employment at vesting date
1 July 2016 to 1 July 2020
No dividends are paid on performance rights
$1.51
$1.42
$1.33
1 July 2018
1 July 2019
1 July 2020
The Managing Director did not participate in this award.
4.
Non-Executive Director Arrangements
Director’s report
28%
46%
26%
On appointment to the Board all Non-Executive Directors enter into an agreement with the Company which sets out the
policy to remunerate Non-Executive Directors at a fixed fee for time and responsibilities not linked to individual
performance.
Fees paid to Non-Executive Directors were considered during the year and it was agreed that they would remain
unchanged with the exception of the approval of an additional fee to the Chair of Audit and Risk Management Committee
of $8,500 per annum plus superannuation to reflect the additional time and work involved in chairing this Committee.
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.
Pioneer Credit Limited
30 June 2017
13
5.
Statutory Remuneration Disclosures
The following table details KMP remuneration in accordance with applicable accounting standards.
5.1.
Statutory Remuneration Tables
Director’s report
Non-executive Directors
Year
Cash
salary
Mr Michael Smith
2017
2016
120,461
120,923
Mr Mark Dutton
2017
2016
70,269
70,539
Ms Andrea Hall 1
2017
2016
51,327
-
Ms Anne Templeman-Jones 2
2017
2016
33,269
70,539
Mr Rob Bransby 3
2017
2016
52,769
70,539
Total
2017
2016
328,095
332,540
Executive Director
Year
Cash
salary
Mr Keith John
2017
2016
465,985
425,246
Fixed remuneration
Non-
monetary
benefits
Annual and
long
service
leave
Variable remuneration
Post-
employment
benefits
Cash
bonus
Post-
employment
benefits
Options
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11,444
11,488
-
-
-
-
-
-
-
-
6,676
6,701
4,876
-
3,161
6,701
5,013
6,701
-
-
31,170
31,591
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19,872
29,031
151,777
161,442
-
-
-
-
-
-
-
-
-
-
76,945
77,240
-
-
56,203
-
-
-
36,430
77,240
-
-
57,782
77,240
-
-
19,872
29,031
379,137
393,162
Fixed remuneration
Non-
monetary
benefits
Annual and
long
service
leave
Variable remuneration
Post-
employment
benefits
Cash
bonus
Post-
employment
benefits
Rights
Total
11,796
10,920
49,775
13,484
32,922
37,516
-
84,400
-
8,018
107,093
89,243
667,571
668,827
Pioneer Credit Limited
30 June 2017
14
Director’s report
Other Key Management Personnel
Year
Fixed remuneration
Cash
salary
Non-
monetary
benefits
Annual and
long
service
leave
Variable remuneration
Post-
employment
benefits
Cash
bonus
Post-
employment
benefits
Rights
Total
Ms Lisa Stedman
2017
2016
322,435
290,877
Mr Leslie Crockett
2017
2016
309,185
278,611
Mr Anthony Bird 4
2017
2016
274,050
108,000
Ms Susan Symmons 5
2017
2016
215,268
152,248
11,796
10,920
7,999
8,564
29,450
27,326
-
51,100
-
4,855
138,189
89,243
509,869
482,885
11,796
10,920
18,345
(624)
29,870
26,180
-
56,000
-
5,320
133,250
89,243
502,446
465,650
-
-
5,974
12,153
28,889
10,260
-
-
21,567
30,042
2,854
-
330,480
163,309
-
-
1,323
8,520
20,502
14,469
-
-
-
-
26,157
-
263,250
175,237
Total
2017
2016
1,586,923
1,254,982
35,388
32,760
83,416
42,097
141,633
115,751 221,542
-
-
21,047
426,256
267,729
2,273,616
1,955,908
Total KMP remuneration expensed
Year
Fixed remuneration
Cash
salary
Non-
monetary
benefits
2017
2016
1,915,018
1,587,522
35,388
32,760
Annual and
long
service
leave
83,416
42,097
Variable remuneration
Post-
employment
benefits
Cash
bonus
Post-
employment
benefits
Options -
Rights
Total
172,803
147,342 221,542
-
-
21,047
446,128
296,760
2,652,753
2,349,070
¹ Ms Andrea Hall was appointed as Director on 7 November 2016
² Ms Anne Templeman-Jones resigned as Director on 7 November 2016
³ Mr Rob Bransby resigned as Director on 31 March 2017
4 Mr Anthony Bird commenced in Perth as a member of KMP on 2 February 2016
5 Ms Susan Symmons commenced in Perth as a member of KMP on 1 October 2015
Pioneer Credit Limited
30 June 2017
15
Director’s report
5.2.
Proportion of fixed and variable remuneration
The following table shows the proportion of remuneration that is fixed and that which is linked to performance.
Name
Executive Director
Mr Keith John
Other Key Management Personnel
Ms Lisa Stedman
Mr Leslie Crockett
Mr Anthony Bird
Ms Susan Symmons
2017
2017
2017
2017
2017
Fixed remuneration
At risk – STI
At risk – LTI
85%
73%
73%
93%
90%
-
-
-
-
-
15%
27%
27%
7%
10%
5.3.
Contractual arrangements with senior executive
The terms of employment for the Company’s senior executives are formalised in service agreements. There are no
benefits payable to any executive on termination. The significant provisions of each service agreement during FY17 are
set out below.
Employee
Position
Salary
Mr Keith John
Managing Director
Ms Lisa Stedman
Chief Operating Officer
Mr Leslie Crockett
Chief Financial Officer
Mr Anthony Bird
Chief Risk Officer
Ms Susan Symmons
General Counsel and
Company Secretary
$464,200 per annum plus
superannuation
$321,200 per annum plus
superannuation
$308,000 per annum plus
superannuation
$273,000 per annum plus
superannuation
$210,000 per annum plus
superannuation
Term of agreement and
notice period
Continuing agreement with 12
months’ notice by either party
Continuing agreement with 6
months’ notice by either party
Continuing agreement with 6
months’ notice by either party
Continuing agreement with 6
months’ notice by either party
Continuing agreement with 3
months’ notice by either party
6.
Equity Instruments held by KMP
The tables below show the number of options over ordinary shares, performance rights or indeterminate rights; and
shares in the Company held during the financial year by KMP, including their close family members and entities related to
them.
There were no shares or options granted during the reporting period as compensation.
Option holdings
Name
Mr Michael Smith
Issued
balance at
the start
of the year
300,000
Granted as
compensation
Vested Exercised
-
300,000
-
Balance
at the
end of
the year
300,000
Vested and
exercise-
able
Unvested
300,000
-
Pioneer Credit Limited
30 June 2017
16
Director’s report
Performance rights or indeterminate rights
Name
Balance at the start
of the year
Other changes
during the year
Balance at the end
of the year
Held
nominally
Executive Director
Mr Keith John
Other Key Management Personnel
Ms Lisa Stedman
Mr Leslie Crockett
Mr Anthony Bird
Ms Susan Symmons
150,000
150,000
150,000
-
-
-
50,000
50,000
50,000
50,000
150,000
200,000
200,000
50,000
50,000
-
-
-
-
-
Shareholdings
Name
Balance at the start
of the year
Other changes
during the year
Balance at the end
of the year
Held
nominally
Non-Executive Directors
Mr Michael Smith
Mr Mark Dutton
Ms Andrea Hall
Executive Director
Mr Keith John
Other Key Management Personnel
Ms Lisa Stedman
Mr Leslie Crockett
Mr Anthony Bird
Ms Susan Symmons
332,002
312,723
-
18,453
(200,578)
-
350,455
112,145
-
350,455
112,145
-
8,454,571
(828,986)
7,625,585
7,625,585
70,000
163,984
24,750
-
(66,920)
5,433
30,830
22,516
3,080
169,417
55,580
22,516
-
14,684
52,500
8,304
7.
Terms and Conditions of Share-Based Payment Arrangements
7.1.
Performance Rights and Indeterminate Rights
Performance and Indeterminate Rights were issued on 1 September 2015 and the sum of $321,278 was recognised in
FY17 as a share based payment.
Performance Rights were issued to senior executives (excluding the Managing Director) on 1 July 2016 and the sum of
$104,979 was recognised in FY17 as a share based payment.
The key terms of the rights issued during FY17 are:
a)
b)
Vested rights will be converted on a one-for-one basis to ordinary shares in the Company at no cost; and
Rights will vest over years 3 to 5 from the grant date with the proportion vesting dependent on the deliverables of
each incentivised person.
7.2.
Unlisted Options
There are 300,000 vested options on issue for which in FY17 the sum of $19,872 has been recognised as a share based
payment.
The key terms (now existing) of the Options are:
Each Option entitles the holder to purchase one share for the exercise price (refer clause d));
a)
b) Options may be forfeited upon termination of the holder’s position as a Director of the Company;
c)
d)
e)
Unexercised options will expire two years after vesting;
The exercise price of each option is $1.92;
The holder may not sell, assign, transfer or otherwise deal with, or grant a security interest over an option except
with the written consent of the Company;
In the event of any reorganisation (including consolidation, sub-division, reduction, return or cancellation) of the
issued capital of the Company, the rights attaching to the options will be varied to comply with ASX Listing Rules;
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.
f)
g)
Pioneer Credit Limited
30 June 2017
17
Director’s report
8.
Loans given to KMP
No loans were made to KMP during the financial year.
9.
Other transactions with KMP
Leases entered into with related parties.
Mr Keith John is the Sole Director and Secretary of Avy Nominees Pty Limited, the trustee of The John Family Primary
Investments Trust (JFPIT). JFPIT is the owner of 190 Bennett Street, East Perth which is leased by the Company. The
lease expires on 1 January 2019, is at arm’s length terms and for the year ended 30 June 2017 the total amount of
$82,320 was paid to JFPIT in respect of the lease.
Shares issued on the exercise of options
No shares were issued during the reporting period on the exercise of options.
Insurance of officers
During the year the Company paid a premium of $45,833 to insure its Directors and Secretaries.
The exposures insured include legal costs that may be incurred in defending proceedings that may be brought against
people in their capacity as officers of the Group, and any other payments arising from liabilities incurred in connection
with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty or
the improper use of their position or of information to gain advantage for themselves or 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.
Indemnity of auditors
The Company 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 the
Company will meet the full amount of any such liabilities including a reasonable amount of legal costs.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
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.
Pioneer Credit Limited
30 June 2017
18
Director’s report
Non-audit services
The Company may decide to engage the auditor for matters additional to their statutory audit duties.
The Board has considered advice received from the Audit and Risk Management Committee, and 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 because:
a)
b)
all non-audit services have been reviewed by the Audit and Risk Management 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.
During the year the following fees were paid or payable for non-audit services.
Taxation services
PricewaterhouseCoopers Australia
Tax compliance services
Total remuneration for taxation services
Other services
PricewaterhouseCoopers Australia
Compliance and accounting advice
International Network firms of PricewaterhouseCoopers Australia
Payroll and registration services
Total remuneration for other services
Total remuneration for non-audit services
2017
$
2016
$
4,713
4,713
11,348
11,348
7,380
67,092
11,792
19,172
7,022
74,114
23,885
85,462
A copy of the Auditor’s Independence Declaration under section 307C of the Corporations Act 2001 is on page 20.
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations Instrument 2016/191 (Rounding in Financial/Directors’
Reports) relating to the ‘rounding off’ of amounts in the Directors’ Report. Amounts in the Directors’ Report have been
rounded off in accordance with that instrument 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
Managing Director
Perth
24 August 2017
Pioneer Credit Limited
30 June 2017
19
Auditor’s Independence Declaration
As lead auditor for the audit of Pioneer Credit Limited for the year ended 30 June 2017, I declare that
to the best of my knowledge and belief, there have been:
(a)
(b)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
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
24 August 2017
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.
20
Corporate Governance Statement
The Board of Directors is committed to achieving the highest standards of corporate governance and has reviewed its
corporate governance practices against the Corporate Governance Principles and Recommendations (3rd edition)
published by the ASX Corporate Governance Council.
The 2017 Corporate Governance Statement is dated 30 June 2017 and reflects the corporate governance practices in
place throughout the 2017 financial year and was approved by the Board on 26 July 2017. The Group's Corporate
Governance Statement can be viewed at: http://corporate.pioneercredit.com.au/investor-centre/corporate-governance/
Pioneer Credit Limited
30 June 2017
21
Financial Statements
Pioneer Credit Limited ABN 44 103 003 505
Annual Report - 30 June 2017
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
23
24
25
26
27
75
76
These are the consolidated financial statements of Pioneer Credit Limited and its subsidiaries and are presented in
Australian currency. Pioneer Credit Limited is a Company limited by shares, incorporated and domiciled in Australia. Its
registered office is:
Level 6, 108 St Georges Terrace
Perth WA 6000
The financial statements were authorised for issue by the Board of Directors on 24 August 2017. The Directors have
the authority to amend and reissue the financial statements.
Pioneer Credit Limited
30 June 2017
22
Consolidated statement of comprehensive income
Revenue from operations
Other income
Employee expenses
Rental expenses
Information technology and communications
Direct expenses
Professional expenses
Depreciation and amortisation
Travel and entertainment
Other expenses
Finance expenses
Share of net loss of associate accounted for using the equity method
Profit before income tax
Income tax expense
Profit for the period from continuing operations
Note
2
2
3
3
4
2017
$’000
56,266
42
56,308
(25,046)
(2,549)
(2,351)
(2,345)
(1,899)
(1,335)
(458)
(1,632)
(3,311)
(135)
15,247
(4,494)
10,753
2016
$’000
47,809
47
47,856
(21,191)
(2,549)
(2,121)
(1,703)
(1,120)
(1,184)
(383)
(1,444)
(2,412)
(22)
13,727
(4,277)
9,450
Total comprehensive income for the year is attributable to:
Owners of Pioneer Credit Limited
10,753
9,450
Earnings per share for profit attributable to the ordinary equity holders of the
Company:
Basic earnings per share
Diluted earnings per share
20(a)
20(b)
Cents
20.77
20.30
Cents
20.36
20.08
The consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
Pioneer Credit Limited
30 June 2017
23
Consolidated balance sheet
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Financial assets at fair value through profit or loss
Total current assets
Non-current assets
Investments accounted for using the equity method
Property, plant and equipment
Deferred tax assets
Intangible assets
Other non-current assets
Financial assets at fair value through profit or loss
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Current tax liabilities
Accruals and other liabilities
Total current liabilities
Non-current liabilities
Borrowings
Provisions and other liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Other reserves
Retained earnings
Capital and reserves attributable to the owners of Pioneer Credit Limited
Total equity
Note
2017
$’000
2016
$’000
5(a)
5(a)
5(b)
13
6(a)
6(b)
6(c)
5(a)
5(b)
5(c)
5(d)
5(c)
5(d)
7(a)
7(g)
7(h)
3,139
3,732
350
65,901
73,122
2,458
3,456
1,189
1,339
36
98,560
107,038
4,894
1,225
380
51,379
57,878
2,593
4,115
1,163
1,847
80
59,730
69,528
180,160
127,406
3,638
6,410
561
3,138
13,747
73,984
2,141
76,125
3,414
5,701
917
2,576
12,608
47,709
2,332
50,041
89,872
62,649
90,288
64,757
71,255
2,394
16,639
90,288
52,091
1,611
11,055
64,757
90,288
64,757
The consolidated balance sheet should be read in conjunction with the accompanying notes.
Pioneer Credit Limited
30 June 2017
24
Consolidated statement of changes in equity
Contributed
equity
$’000
Share based
payment
reserve
$’000
Note
Retained
earnings Total equity
$’000
$’000
Balance at 1 July 2016
52,091
1,611
11,055
64,757
Total comprehensive income for the year
-
-
10,753
10,753
Transactions with owners in their capacity as owners
Contributions of equity, net of transaction costs
Acquisition of treasury shares
Dividend reinvestment plan
Treasury shares and share based payments
Current tax and deferred tax through equity
Dividends declared and paid
7(a)
7(a)
7(a)
7(g)
11(b)
19,258
(1,105)
740
-
271
-
19,164
-
-
-
783
-
-
783
-
-
-
-
-
(5,169)
(5,169)
19,258
(1,105)
740
783
271
(5,169)
14,778
Balance at 30 June 2017
71,255
2,394
16,639
90,288
Balance at 1 July 2015
45,464
1,073
6,341
52,878
Total comprehensive income for the year
-
-
9,450
9,450
Transactions with owners in their capacity as owners
Contributions of equity, net of transaction costs
Dividend reinvestment plan
Treasury shares and share based payments
Current tax and deferred tax through equity
Dividends declared and paid
7(a)
7(a)
7(g)
11(b)
5,567
989
-
71
-
6,627
-
-
538
-
-
538
-
-
-
-
(4,736)
(4,736)
5,567
989
538
71
(4,736)
2,429
Balance at 30 June 2016
52,091
1,611
11,055
64,757
The consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Pioneer Credit Limited
30 June 2017
25
Consolidated statement of cash flows
Cash flows from operating activities
Receipts from liquidations of PDPs and services (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
Net cash inflow from operating 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
Payment for subsidiary, net of cash acquired
Proceeds from the sale of property, plant and equipment
Net cash outflow from investing activities
2
8(a)
6(c)
Cash flows from financing activities
Proceeds from issue of ordinary shares
Proceeds from issue of ordinary shares to employees
Transaction costs on issue of ordinary shares
Payments for shares acquired by the Pioneer Credit Limited Incentive Plan Trust
Proceeds from borrowings
Repayment of borrowings
Dividends paid to Company’s shareholders
Proceeds from issue of ordinary shares under dividend reinvestment plan
Treasury shares loan repayment
Net cash inflow from financing activities
7(a)
10(d)
10(d)
11(b)
7(a)
7(c)
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the year
Note
2017
$’000
2016
$’000
70,101
63,380
(36,835)
33,266
42
(2,026)
(4,605)
26,677
(88)
(27)
(68,711)
-
-
-
(68,826)
19,890
117
(904)
(1,105)
96,344
(69,560)
(5,169)
740
41
40,394
(1,755)
4,894
3,139
(31,050)
32,330
47
(1,719)
(4,520)
26,138
(412)
(354)
(43,410)
(293)
(150)
5
(44,614)
5,805
-
(238)
-
30,221
(10,884)
(4,736)
989
45
21,202
2,726
2,168
4,894
The consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Pioneer Credit Limited
30 June 2017
26
Contents of the notes to the consolidated financial statements
How numbers are calculated
1
2
3
4
5
6
7
8
Risk
9
10
11
Segment information
Revenue from operations
Other expense items
Income tax expense
Financial assets and financial liabilities
Non-financial assets and liabilities
Equity
Cash flow information
Critical accounting estimates and judgements
Financial risk management
Capital management
Group structure
12
13
Subsidiaries
Associates
Unrecognised items
14
15
16
Contingencies
Commitments
Events occurring after the reporting period
Other information
17
18
19
20
21
22
23
24
Related party transactions
Share-based payments
Remuneration of auditors
Earnings per share
Deed of cross guarantee
Assets pledged as security
Parent entity financial information
Summary of significant accounting policies
29
29
30
31
32
41
45
48
50
50
53
56
57
60
60
60
62
63
64
64
65
65
66
67
Pioneer Credit Limited
30 June 2017
27
How 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:
Notes to the consolidated financial statements
•
•
•
1
2
3
4
5
6
7
8
accounting policies that are relevant for an understanding of the items recognised in the financial statements;
analysis and sub-totals; and
information about estimates and judgements made in relation to particular items.
Segment information
Revenue from operations
Other expense items
Income tax expense
Financial assets and financial liabilities
Non-financial assets and liabilities
Equity
Cash flow information
29
29
30
31
32
41
45
48
Pioneer Credit Limited
30 June 2017
28
Notes to the consolidated financial statements
1.
Segment information
The Company is organised into one main business segment which is a financial services provider which specialises in
acquiring and servicing unsecured retail debt portfolios and introducing brokered personal credit and loan products.
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 Company operated in Australia and
New Zealand and 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 a new
subsidiary during the period.
2.
Revenue from operations
From continuing operations
Liquidations of PDPs
Change in value of PDPs
Net gain on financial assets from PDPs
Services
2017
$’000
2016
$’000
70,656
(16,268)
54,388
61,918
(14,610)
47,308
1,878
501
56,266
47,809
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable.
The Group recognises revenue when an amount can be reliably measured and it is probable that future economic
benefits will flow to it. 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.
Liquidations of purchased debt portfolios (PDPs)
Net gains on financial assets are disclosed in the consolidated statement of comprehensive income as liquidations of
PDPs, net of any change in fair value of the portfolios and are recognised to the extent that it is probable that a benefit
will flow to the Group and can be reliably measured. The Group recognises PDPs 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.
Services income
Revenue from services is recognised to the extent that it is probable that benefits will flow to the Group and can be
reliably measured.
Pioneer Credit Limited
30 June 2017
29
Notes to the consolidated financial statements
Other income
Interest income
Interest income is recognised using the effective interest method.
3.
Other expense items
This note provides a breakdown of specific costs included in profit before income tax.
Finance expenses
Bank fees and borrowing expenses
Interest and finance charges paid / payable for financial liabilities not at fair
value through profit and loss
Employee benefits expense
Options
Share based payments
Depreciation and amortisation
Depreciation
Amortisation
2017
$’000
2016
$’000
42
47
2017
$’000
2016
$’000
1,078
693
2,233
3,311
1,719
2,412
20
877
897
800
535
1,335
29
464
493
979
205
1,184
Pioneer Credit Limited
30 June 2017
30
Notes to the consolidated financial statements
4.
Income tax expense
This note provides an analysis of the Group’s income tax expense, 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
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:
Profit from continuing operations
Deferred income tax (revenue) expense included in income tax expense comprises:
Increase (decrease) direct to equity
Increase in deferred tax assets
Numerical reconciliation of income tax expense to prima facie tax payable
2017
$’000
2016
$’000
4,459
(27)
62
4,494
4,359
11
(93)
4,277
15,247
13,727
86
(24)
62
(59)
(34)
(93)
2017
$’000
2016
$’000
Profit from continuing operations before income tax expense
15,247
13,727
Tax at the Australian tax rate of 30.0% (2016 30.0%)
Non-deductible entertainment costs
Non-deductible provision for fringe benefits tax
Non-deductible share based payments
Employee share trust funding contribution
(Over) under provision for prior year taxation
Employee share scheme
Other non-deductibles and assessable income
Income tax expense
4,574
46
10
269
(332)
(27)
(46)
-
4,494
4,118
16
(10)
148
-
11
-
(6)
4,277
Pioneer Credit Limited
30 June 2017
31
Amounts recognised directly in equity
Notes to the consolidated financial statements
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 equity:
Current tax – credited directly to equity
Deferred tax –credited/(debited) directly to equity
Net current and deferred tax – credited directly to equity
2017
$’000
2016
$’000
185
86
271
130
(59)
71
5.
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; and
information on determining the fair value of instruments, including estimation uncertainty involved.
The Group holds the following financial instruments:
Financial assets
Note
Assets at
FVTPL
5(a)
5(b)
5(a)
5(b)
$’000
-
-
164,461
164,461
-
-
111,109
111,109
Financial
assets at
amortised
cost
$’000
3,139
3,732
-
6,871
4,894
1,225
-
6,119
Total
$’000
3,139
3,732
164,461
171,332
4,894
1,225
111,109
117,228
2017
Cash and cash equivalents
Trade and other receivables *
Financial assets at FVTPL 1
2016
Cash and cash equivalents
Trade and other receivables *
Financial assets at FVTPL 1
*excluding prepayments
1 fair value through profit and loss
Pioneer Credit Limited
30 June 2017
32
Financial liabilities
2017
Trade and other payables **
Borrowings
Accruals, provisions and other liabilities
2016
Trade and other payables **
Borrowings
Accruals, provisions and other liabilities
**excluding non-financial liabilities
Note
5(c)
5(d)
5(c)
5(d)
Notes to the consolidated financial statements
Financial
liabilities
$’000
Total
$’000
3,638 3,638
80,394 80,394
3,820 3,820
87,852 87,852
3,414 3,414
53,410 53,410
2,809 2,809
59,633 59,633
The Group’s exposure to risks associated with financial instruments is discussed in note 10. The maximum exposure to
credit risk at the end of the reporting period is the carrying amount of each class of the financial assets above.
5.a)
Trade and other receivables
2017
Non-
current
$’000
Current
$’000
Total
$’000
Current
$’000
2016
Non-
current
$’000
Total
$’000
Trade receivables
Other receivables
Prepayments
- 1,163
3,360
372
- 62
350 36 386 380 80 460
4,082 36 4,118 1,605 80 1,685
- 3,360 1,163
- 372 62
Classification as trade and other receivables
Trade receivables are amounts due 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 an amount is expected in one year or less it is classified as a current asset. If not, it is presented as a non-current
asset. Trade receivables are generally due 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 10(c) and 24(e)
respectively.
Fair value of trade and other receivables
Due to the short-term nature of the current receivables, their carrying amount is assumed to be the same as their fair
value and for the majority of the non-current receivables, the fair values are also not significantly different to their
carrying amounts.
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 10(a) to 10(c).
None of the receivables are impaired.
Pioneer Credit Limited
30 June 2017
33
5.b)
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include the following:
Notes to the consolidated financial statements
PDPs
Current
Non-current
Movement on financial assets at fair value is as follows:
Current and non-current
At beginning of period
Additions for the period
Liquidations of PDPs
Net gain on financial assets from PDPs
Note
2
2
2017
$’000
2016
$’000
65,901
98,560
164,461
51,379
59,730
111,109
2017
$’000
2016
$’000
111,109
69,620
(70,656)
54,388
164,461
81,922
43,797
(61,918)
47,308
111,109
i)
Classification of financial assets at fair value through profit or loss
The Company classifies PDPs 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 the Company designates PDPs acquired as at fair value through profit or loss;
• PDPs are managed and their performance regularly evaluated on a fair value basis in accordance with a
documented risk management and investment strategy;
• Management information about the PDPs is collated on a fair value basis and provided to KMP; and
•
this relevant information is reported 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. A documented investment strategy is maintained 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 focused on growth in its payment arrangement portfolios and
the total return to the Group measured as net profit after taxation. The documented and approved remuneration and
incentive strategy remains 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.
When management decisions are made with respect to an investment in the portfolio or the liquidation of the portfolio,
they are made from the point of view of the group of financial assets as a whole. Management reporting provides
information 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 growth.
PDPs 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 through profit or loss on the balance sheet, with transaction costs expensed
as incurred. Fair value can be best evidenced as a quoted market price in an active market. As there is not a quoted
market for PDPs, fair value is based on the present value of expected future cash flows or other valuation techniques
based on current market conditions. These valuation techniques rely on market observable inputs wherever possible
and otherwise maximise the use of relevant observable inputs and minimise the use of unobservable inputs.
Any fair value net gains or losses on financial assets are disclosed in the consolidated statement of comprehensive
income as Liquidations of PDPs net of any change in value. Liquidations of PDPs are the recognised flow of economic
benefits from the acquiring and servicing of PDPs including all cash-flow sources from each portfolio’s respective
purchase agreement.
Pioneer Credit Limited
30 June 2017
34
Notes to the consolidated financial statements
Note 5(b)(iv) below explains how the fair value of PDPs is determined including information regarding the key
assumptions used.
PDPs 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, for which the present value is classified as a current asset.
ii) 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) Risk exposure and fair value measurements
Information about the Group's exposure to price risk is provided in note 10. For information about the methods and
assumptions used in determining fair value of PDPs please refer to note 5(b)(v) below.
iv) Fair value and fair value measurements
a) Fair value hierarchy
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.
2017
Financial assets at FVTPL
2016
Financial assets at FVTPL
Level 1:
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
- - 164,461 164,461
-
- 111,109 111,109
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:
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:
If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.
b) Transfers between levels
There were no transfers between levels in 2017 or 2016.
c) Valuation 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.
Pioneer Credit Limited
30 June 2017
35
Notes to the consolidated financial statements
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. Inputs are derived and extrapolated where possible from observable characteristics that market
participants would take into account when pricing the asset at the measurement date. Assumptions used would be
those that market participants would use when pricing, assuming that market participants act in their economic best
interest. Inputs are calibrated against current market assumptions, historic transactions and economic models, where
available. Unobservable inputs are those for which market data is not available and that are developed using the best
information available about the assumptions that market participants would use when pricing the asset, as can be the
case for PDPs.
Model risk therefore arises due to the potential of key judgements impacting the appropriateness of model outputs and
reports used. Model risk is mitigated and controlled at its source through effective challenge and critical analysis by
objective parties qualified and experienced in the line of business in which the model is used. In addition, consistent
with recognised industry guidance, model validation intended to verify that models are performing as expected in line
with their design objectives and business uses has been performed to help ensure the models are sound.
Commensurate with model use, complexity and materiality, model validation by way of back testing, stability testing and
sensitivity analysis were performed and the results, outcomes and actions validated the conceptual soundness of the
models. Given that unobservable inputs are those where market data is not available, and the inherent limitations of
historic information predicting future liquidations, additional model risk mitigation is achieved through appropriate
cautious downward calibration of the expected future cash flows.
Where the fair value of financial instruments that are not traded in an active market is determined using present value of
expected future cash flows valuation techniques, these valuation techniques maximise the use of observable market
data where it is available and rely as little as possible on Group-specific estimates.
The valuation technique used is a discounted cash flow which incorporates, at least, the following variables:
•
•
•
•
•
Expected liquidation rate
Face value
Cash flow liquidation period
Discount rate
Cost
Expressed as a percentage of the face value over time.
Of the PDPs.
The period over which cash flows liquidate.
Factors in a risk free interest rate and appropriate credit
adjustment for risks not built into the expected cash flows.
Acquisition cost of acquired PDPs.
d) Fair value measurements using significant unobservable inputs
Continuous improvement in valuation techniques
Consistent with previous reporting periods, the Group has continued to use a discounted cash flow valuation model and
has continued to improve the valuation process based on maximising the use of observable statistical evidence. This
has included continued improvement in the use of characteristics analysis to ascertain the most informative
performance predictive indicators and applying logistic regression statistical techniques to generate the key
assumptions that determine the expected liquidation rate over time. The evolution of time and expansion of the
business has allowed for additional internally developed and externally obtained data to be included in the valuation
process. In addition independent expertise in analytics and model deployment has further developed the statistical
methodology incorporated. This allows the Group to benefit from an independent party with experience across multiple
analytics assignments. Prior reporting period improvements in the valuation process have previously supported the
cash flow liquidation period to a capped maximum of ten years and this cap has been maintained.
To ensure we continue to realise appropriate value across all of the portfolio, the Group has continued the journey of
exploring portfolio sale opportunities within the secondary sale market for portfolios of accounts where we believe the
value to be realised from a portfolio sale provides the greatest expected value. Where progressed the Group engages
experts in the financial services brokerage market to facilitate the sale process including, but not limited to, portfolio
valuation, issuer approval, sales execution and post sales processes.
The learnings obtained from the sales processes concluded have improved the ability to derive and extrapolate
valuation inputs where directly relevant, based on observable characteristics used by market participants, and where
possible these observable inputs have been applied in the fair value model resulting in improving the application of
valuation techniques.
Pioneer Credit Limited
30 June 2017
36
Valuation inputs and relationship to fair value
The following table summarises the quantitative impact on those elements of the PDPs that are sensitive to the
significant unobservable inputs used in Level 3 fair value measurements:
Notes to the consolidated financial statements
Fair
value
$’000
$164,461
Valuation
technique
Discounted
cash flow
and
validation
Unobservable
inputs
Expected
liquidation rate
Range of
inputs
1% change in
liquidation
rate
Description
Financial
Assets at
Fair Value
Through
Profit or
Loss
Expected
liquidation rate
3% change in
liquidation
rate
Cash flow
liquidation
period
Discount rate
Discount rate
Impact of an
eleven year
liquidation
period versus
a ten year
liquidation
period
Variance in
risk-adjusted
discount rate
by 100 bps
Variance in
risk-adjusted
discount rate
by 300 bps
Relationship to fair value
A reduction in liquidation rate by 1%
results in a decrease in fair value on
total estimated cash flows by $1.798m,
an increase results in an increase in fair
value on total estimated cash flows of
$1.761m.
A reduction in liquidation rate by 3%
results in a decrease in fair value on
total estimated cash flows by $5.510m,
an increase results in an increase in fair
value on total estimated cash flows of
$5.176m.
Results in an increase in fair value of
$0.716m.
The higher the risk-adjusted rate the
lower the fair value. A reduction in rate
by 100 bps results in an increase in fair
value by $3.288m, an increase results
in a decrease in fair value of $3.167m.
The higher the risk-adjusted rate the
lower the fair value. A reduction in rate
by 300 bps results in an increase in fair
value by $10.251m, an increase results
in a decrease in fair value of $9.160m.
It is noted that the weighted average discount rate for originated customer accounts, substantially comprising credit
cards and personal loans, has fluctuated within a range of 17.6% to 20.9% over the last four 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 using the effective interest rate method at amortised cost.
The difference between the carrying value under an interest rate method measurement approach and fair value is
expected to be within the reasonably possible ranges if the discount rate were to be varied as described in the table
above.
Pioneer Credit Limited
30 June 2017
37
Notes to the consolidated financial statements
v) Valuation Process
A key assumption in the valuation of the PDPs is in determining the expected liquidation rate. Assumptions about the
liquidation rate are based on customer, operational 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 process in which participants perform
their own due diligence and determine the price they are willing to pay. Existing internal 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 executives.
Subsequent to purchase, fair value adjustments are made in line with expected liquidations. An assessment of gross
nominal future cash flow is made over periods to a maximum of ten years depending on the level of liquidation history
and forecasting accuracy confidence based on observable evidence within a portfolio. Where the fair value of financial
instruments that are not traded in an active market is determined using present value of expected future cash flows
valuation techniques, these valuation techniques maximise the use of observable market data where it is available and
rely as little as possible on Group specific estimates. 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 PDPs requires estimation of:
the expected future cash flows;
the expected timing of receipt of those cash flows; and
a)
b)
c) a discount rate.
Under the effective interest rate method the valuation would, in contrast to using the discount rate in c), instead utilise
the original effective interest rate (nominated by the purchaser) extrapolated at investment date and this rate would not
change over time. The requirement to estimate cash flows and their timing is the same under both methods.
At the end of each reporting period, under the effective interest rate method, 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.
Similarly if expectations of future cash flows were to subsequently increase a gain would be recognised, up to the
original amortised cost, calculated by discounting these incremental cash flows at the original effective interest rate.
The Group has adopted the fair value basis as it considers this more relevant to the users of the financial statements.
The main inputs used by the Group in measuring the fair value of financial instruments are derived and evaluated as
follows:
•
Expected liquidation rate
•
•
•
Face value
Cash flow liquidation period
Discount rate
•
Cost
Product characteristics, liquidation history and management experience with
historic performance of comparable portfolios and market observable inputs
considered to be directly relevant based on observable characteristics used
by market participants in determining price.
Determined at the date the PDP was acquired.
Up to ten years depending on liquidation history. The weighted average
liquidation period is 2.7 years.
Incorporates a risk free rate and appropriate credit risk adjustment for risks
not built into the underlying expected cash flows. The weighted average
discount rate used to calculate fair value is 20.1%.
Acquisition cost of acquired PDPs.
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.
Pioneer Credit Limited
30 June 2017
38
Notes to the consolidated financial statements
2017
$’000
2016
$’000
3,638
340
2,798
6,776
3,414
196
2,053
5,663
5.c)
Trade and other payables
Current
Trade payables
Payroll tax and other statutory liabilities
Other payables
See note 6(d) for detail on current provisions.
Risk exposure
Information about the Group's exposure is provided in note 10.
Fair Value
The carrying amounts of trade and other liabilities are assumed to be the same as their fair values, due to their short
term nature.
5.d)
Borrowings
Secured
Bank loans
Lease liabilities
Other loans
Unsecured
Other loans
2017
Non-
current
$’000
Current
$’000
Total
$’000
Current
$’000
2016
Non-
current
$’000
-
384
5,934
6,318
73,543
441
-
73,984
73,543
825
5,934
80,302
-
508
5,129
5,637
47,046
663
-
47,709
Total
$’000
47,046
1,171
5,129
53,346
92
-
92
64
-
64
6,410
73,984
80,394
5,701
47,709
53,410
Secured liabilities and assets pledged as security
Security over all the assets and undertakings of each of Pioneer Credit Limited, Pioneer Credit Solutions Pty Limited,
Sphere Legal Pty Limited, Pioneer Credit (Philippines) Pty Limited, Pioneer Credit Connect Pty Ltd, Pioneer Credit
Broking Services Pty Ltd, Credit Place Pty Ltd and Switchmyloan Pty Ltd and unlimited cross guarantees and
indemnities from each of these entities.
All property of the Group comprises the Group total assets of $180,160,000 (2016 $127,406,000).
See note 10(d) for details of the financing arrangements available to the Group to which the security relates.
Pioneer Credit Limited
30 June 2017
39
Notes to the consolidated financial statements
Compliance with loan covenants
The Group has complied with the financial covenants of its borrowing facilities during FY17, see note 11(c) for details.
Fair Value
For all of the borrowings, the fair values are not materially different to their carrying amounts, since the interest payable
is either close to current market rates or the borrowings are of a short-term nature.
Risk exposure
Details of the Group’s exposure to risks arising from current and non-current borrowings are set out in note 10.
Finance lease
Commitments in relation to the finance lease are payable as follows:
Within one year
Later than one year but not later than two years
Later than two years
Minimum lease payments
Future finance charges
Total lease liabilities
The present value of finance lease liabilities is as follows:
Within one year
Later than one year but not later than two years
Later than two years
Minimum lease payments
2017
$’000
2016
$’000
394
476
-
870
(45)
825
384
441
-
825
526
394
345
1,265
(94)
1,171
508
361
302
1,171
Pioneer Credit Limited
30 June 2017
40
Notes to the consolidated financial statements
6.
Non-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; and
information about determining the fair value of the assets and liabilities, including judgements and estimation
uncertainty involved.
6.a)
Property, plant and equipment
At 1 July 2016
Cost
Accumulated depreciation
Net book amount
Year ended 30 June 2017
Opening net book amount
Additions
Depreciation charge
Closing net book amount
At 30 June 2017
Cost
Accumulated depreciation
Net book amount
At 1 July 2015
Cost
Accumulated depreciation
Net book amount
Year ended 30 June 2016
Opening net book amount
Additions
Depreciation charge
Disposals
Closing net book amount
At 30 June 2016
Cost
Accumulated depreciation
Net book amount
Plant and
equipment
$’000
Furniture,
fittings &
equipment
$’000
Leasehold
improvements
$’000
1,904
(1,110)
794
794
58
(288)
564
1,962
(1,398)
564
1,766
(904)
862
862
364
(427)
(5)
794
1,904
(1,110)
794
285
(107)
178
178
21
(43)
156
306
(150)
156
249
(92)
157
157
92
(71)
-
178
285
(107)
178
4,143
(1,000)
3,143
3,143
62
(469)
2,736
4,205
(1,469)
2,736
3,889
(573)
3,316
3,316
308
(481)
-
3,143
4,143
(1,000)
3,143
Total
$’000
6,332
(2,217)
4,115
4,115
141
(800)
3,456
6,473
(3,017)
3,456
5,904
(1,569)
4,335
4,335
764
(979)
(5)
4,115
6,332
(2,217)
4,115
Non-current assets pledged as security
Refer to note 5(d) for information on non-current assets pledged as security by the Group.
Pioneer Credit Limited
30 June 2017
41
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. Certain leasehold improvements and
leased plant and equipment are depreciated on a straight line basis over the term of the lease.
Notes to the consolidated financial statements
Plant and equipment
Furniture, fittings and equipment
Leasehold improvements
Lease incentive
15% - 66.7%
15% - 50%
20% - 50%
Over the term of the lease
See note 24(f) for the other accounting policies relevant to property, plant and equipment.
Lease incentive asset
The lease incentive received relates to operating leases entered into by the Company 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.
6.b)
Deferred tax balances
Deferred tax assets
The balance comprises temporary differences attributable to:
Employee benefits (annual leave)
Retirement obligations (superannuation payable)
Other
Other expenses (audit, accounting, payroll tax)
Share issue expenses
Other (formation costs, black hole costs)
Prepayments
Net deferred tax assets
Movements
At 1 July 2016
(Charged) / credited
- To profit or loss
- Directly to equity
At 30 June 2017
At 1 July 2015
(Charged) / credited
- To profit or loss
- Directly to equity
At 30 June 2016
Employee
benefits
$’000
Retirement
Benefit
Obligations
$’000
170
37
-
207
128
42
-
170
60
5
-
65
43
17
-
60
2017
$’000
2016
$’000
207
65
272
202
478
249
(12)
917
170
60
230
338
494
109
(8)
933
1,189
1,163
Other
$’000
Total
$’000
933
1,163
(102)
86
917
(60)
86
1,189
958
1,129
34
(59)
933
93
(59)
1,163
Pioneer Credit Limited
30 June 2017
42
6.c)
Intangible assets
At 1 July 2016
Cost
Accumulated amortisation
Net book amount
Year ended 30 June 2017
Opening net book amount
Additions
Amortisation charge
Closing net book amount
At 30 June 2017
Cost
Accumulated amortisation
Net book amount
At 1 July 2015
Cost
Accumulated amortisation
Net book amount
Year ended 30 June 2016
Opening net book amount
Additions
Amortisation charge
Closing net book amount
At 30 June 2016
Cost
Accumulated amortisation
Net book amount
Notes to the consolidated financial statements
Goodwill
$’000
Software and
licenses
$’000
140
-
140
140
-
-
140
140
-
140
-
-
-
-
140
-
140
140
-
140
2,099
(392)
1,707
1,707
27
(535)
1,199
2,126
(927)
1,199
571
(187)
384
384
1,528
(205)
1,707
2,099
(392)
1,707
Total
$’000
2,239
(392)
1,847
1,847
27
(535)
1,339
2,266
(927)
1,339
571
(187)
384
384
1,668
(205)
1,847
2,239
(392)
1,847
Amortisation methods and useful lives
The Group amortises intangible assets with a limited useful life using the straight-line method over:
Software and licenses
1-3 years
See note 24(g) for other accounting policies relevant to intangible assets and the policy regarding impairments.
Finance lease
See note 5(d) for information on the finance lease with respect to software licences acquired.
Goodwill
Goodwill is attributable to the acquisition of Switchmyloan Pty Limited in March 2016.
See note 12 for additional information on subsidiaries.
Pioneer Credit Limited
30 June 2017
43
6.d)
Provisions
Non-current
Employee benefits
Lease make good
Notes to the consolidated financial statements
2017
$’000
2016
$’000
345
337
682
248
312
560
Employee benefits - 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 recognised in the provision for employee benefits and
measured as the present value of expected future payments to be made 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 rates published in the ‘Group of 100
Discount Rate Report and Discount Curve’. 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.
No employee of the Group will be eligible to take long service leave within the next 12 months.
Lease make good
The Group is required to make good each of its leased premises to their original condition at the end of each lease. A
provision has been recognised for the present value of the estimated expenditure required. 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.
Movements in provisions
At 1 July 2016
Carrying amount at start of year
Charged to profit or loss
Capitalised to balance sheet
At 30 June 2017
At 1 July 2015
Carrying amount at start of year
Charged to profit or loss
Capitalised to balance sheet
At 30 June 2016
Employee
benefits
$’000
Lease make
good
$’000
Total
$’000
248
97
-
345
180
68
-
248
312
(10)
35
337
189
31
92
312
560
87
35
682
369
99
92
560
Pioneer Credit Limited
30 June 2017
44
7.
Equity
7.a)
Contributed equity
Share capital
Ordinary shares – fully paid
(Treasury shares see note 7(c))
Movements in ordinary share capital
Notes to the consolidated financial statements
2017
Shares
2016
Shares
2017
$’000
2016
$’000
58,950,198
48,971,621
71,255
52,091
Date
1 July 2016
30 June 2017
1 July 2015
30 June 2016
Opening balance
Capital raise and rights issue, net of transaction costs
Dividend reinvestment plan
Employee share scheme
Acquisition of treasury shares
Current tax and deferred tax through equity
Closing balance
Opening balance
Capital raise, net of transaction costs
Dividend reinvestment plan
Current tax and deferred tax through equity
Closing balance
Number of shares
$’000
48,971,621
9,944,877
384,253
159,447
(510,000)
-
58,950,198
44,973,990
3,415,031
582,600
-
48,971,621
52,091
18,986
740
272
(1,105)
271
71,255
45,464
5,567
989
71
52,091
7.b)
Ordinary shares
All authorised ordinary shares have been issued, 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 has one vote; and on a poll every shareholder
who is present 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 2017
45
7.c)
Treasury shares
Date
1 July 2016
30 June 2017
Opening balance
Receipt on treasury shares
Treasury shares acquired
Closing balance
1 July 2015
Opening balance
Receipt on treasury shares
30 June 2016 Closing balance
Notes to the consolidated financial statements
Number of shares
$’000
400,000
-
510,000
910,000
400,000
-
400,000
1,075
41
1,105
2,221
1,030
45
1,075
Treasury shares acquired in 2017 are shares in Pioneer Credit Limited that are held by the Pioneer Credit Limited
Equity Incentive Plan Trust for the purpose of issuing shares under the Pioneer Credit Limited Equity Incentive Plan.
Shares issued to employees are recognised on a first-in-first-out basis. The shares are acquired on market and are held
as treasury shares until such time as they are vested. Forfeited shares are reallocated in subsequent grants. Under the
terms of the trust deed, Pioneer Credit Limited is required to provide the trust with the necessary funding for the
acquisition of the shares.
7.d)
Employee share scheme
On 1 July 2016 the Company issued 159,447 fully paid ordinary shares to eligible employees under the $1,000 exempt
plan and the $5,000 salary sacrifice scheme.
90,830 ordinary shares were issued to eligible employees for no consideration and 68,617 ordinary shares were
acquired by eligible employees by way of salary sacrifice. The employee offer shares were valued at $1.71 each and
the shares issued for no consideration are an expense to the Company.
7.e)
Options
Information relating to Options is set out in note 18(a).
7.f)
Equity Incentive Plan
Scheme 1
At the Annual General Meeting on 29 October 2014, the Company approved an employee incentive plan whereby
certain eligible employees would be granted performance rights. Each Right entitles the holder to one fully paid ordinary
share for no consideration, subject to vesting conditions being met.
The performance conditions for these Rights were met on the 20 August 2015 and 780,000 Rights were granted on 1
September 2015 which will vest in accordance with the following schedule (each a ‘Vesting Date’):
• 1 July 2017: 60% Rights will vest;
• 1 July 2018: 25% Rights will vest; and
• 1 July 2019: 15% Rights will vest,
provided the holder of the Rights remains employed by the Group at the Vesting Date.
The terms of each tranche of Rights are summarised in the table below.
Fair value at grant date
Grant date
Share price at grant date
Expiration period (years)
Dividend yield
Vesting date
Exercise price
Tranche 1
$1.6009
1-Sep-15
$1.77
1.83
5.48%
1-Jul-17
Nil
Tranche 2
$1.5155
1-Sep-15
$1.77
2.83
5.48%
1-Jul-18
Nil
Tranche 3
$1.4347
1-Sep-15
$1.77
3.83
5.48%
1-Jul-19
Nil
Pioneer Credit Limited
30 June 2017
46
Notes to the consolidated financial statements
Scheme 2
On 1 July 2016, the Board approved a grant of Performance Rights with a tenure based vesting condition. Each Right
entitles the holder to one fully paid ordinary share for no consideration, subject to vesting conditions being met.
320,000 Performance Rights were granted on 1 July 2016 which will vest in accordance with the following schedule
(each a “Vesting Date”):
• 1 July 2018: 28% Rights will vest;
• 1 July 2019: 46% Rights will vest; and
• 1 July 2020: 26% Rights will vest,
provided the holder of the Rights remains employed by the Group at the Vesting Date.
The terms of each tranche of Rights are summarised in the table below.
Fair value at grant date
Grant date
Share price at grant date
Expiration period (years)
Dividend yield
Vesting date
Exercise price
7.g)
Other reserves
Tranche 1
$1.51
1-Jul-16
$1.71
2
6.2%
1-Jul-18
Nil
Tranche 2
$1.42
1-Jul-16
$1.71
3
6.2%
1-Jul-19
Nil
Tranche 3
$1.33
1-Jul-16
$1.71
4
6.2%
1-Jul-20
Nil
The following table shows a breakdown of the Statement of Changes in Equity line item Share Based Payments
Reserve and the movements in this reserve during the period under review. A description of the nature and purpose of
the reserve is provided below the table.
Share based payment reserve
At 1 July
Opening balance
Options
Share based payment expense
Treasury shares
At 30 June
2017
$’000
2016
$’000
1,611
20
722
41
2,394
1,073
29
464
45
1,611
Nature and purpose of the share-based payments reserve
The share based payments reserve is used to recognise:
•
•
the grant date fair value of options and rights issued but not exercised over the vesting period; and
the grant date fair value of shares issued over the vesting period.
Employee share trust funding
On 12 April 2017 the Company commenced funding the Pioneer Credit Limited Equity Incentive Plan Trust (‘the Trust’)
for the purpose of acquiring fully paid ordinary shares on market to satisfy rights that vest on or after 1 July 2017 under
the Pioneer Credit Limited Equity Incentive Plan. As at 30 June 2017 the Trust held 510,000 shares acquired at an
average price of $2.15 per share.
Pioneer Credit Limited
30 June 2017
47
7.h)
Retained earnings
Movements in retained earnings were as follows:
Balance 1 July
Net profit for the year
Dividends
Balance 30 June
8.
Cash flow information
Notes to the consolidated financial statements
2017
$’000
2016
$’000
11,055
10,753
(5,169)
16,639
6,341
9,450
(4,736)
11,055
8.a)
Reconciliation of profit after income tax to net cash inflow from operating activities
Profit for the period
Depreciation and amortisation
Non-cash employee benefits expense – share-based payments
Net profit on sale of assets
Share of loss of associate accounted for using the equity method
Change in value of PDPs
Non-cash financing amortisation
Change in operating assets and liabilities:
(Increase)/decrease in trade receivables
Increase in deferred tax assets through profit or loss
Decrease in trade payables
Decrease in income tax payable
Increase in accruals and other liabilities
Net cash flow inflow from operating activities
8.b)
Non-cash investing and financing activities
Make good provision
Lease incentive liability released
Lease incentive recognised
Finance lease
Note
3
18(c)
2
2017
$’000
10,753
1,335
897
-
135
16,268
194
(2,433)
(26)
(679)
(85)
318
26,677
2016
$’000
9,450
1,184
493
(5)
22
14,610
-
961
(33)
(1,138)
(210)
804
26,138
2017
$’000
2016
$’000
35
(282)
18
-
92
(280)
260
1,171
Pioneer Credit Limited
30 June 2017
48
Notes to the consolidated financial statements
Risk
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.
Critical accounting estimates and judgements
Financial risk management
9
10
11 Capital management
50
50
53
Pioneer Credit Limited
30 June 2017
49
Notes to the consolidated financial statements
9.
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 Group 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 exercises judgement in applying the Group’s accounting policies.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal 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
The fair value of financial instruments that are not traded in a sufficiently active market are determined using valuation
techniques. The Group uses judgement to select valuation methods and make assumptions, including considering
market conditions existing at the end of each reporting period and as to the allocation of PDPs between current and
non-current asset allocations. For details of the key assumptions used and the impact of changes to these assumptions
see note 5(b).
Investment in associate
The Group’s assessment is that the investment in Goldfields Money Limited represents an investment in an associate,
to be accounted for using the equity method of accounting and that there is no objective evidence that this investment is
impaired.
Goldfields Money Limited is a publically traded entity. Management has exercised judgement in determining the share
of equity income or loss from this associate.
See note 13 for more information on the investment in associate.
10.
Financial risk management
The Group's activities expose it to a variety of risks and its 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 which include sensitivity
analysis 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 PDP.
Risk management is the responsibility of KMP. Policies approved by the Board ensure that total risk exposure is
consistent with the Group strategy, is in line with covenants and is within internal risk tolerance guidelines. To manage
interest rate and credit risk arising from the investment in PDPs, the Group undertakes pricing analysis prior to
committing to any investment. This analysis includes consideration of information supplied under due diligence, as well
as macro and micro economic elements to which senior executives’ experience and judgement is applied. In many
instances there is knowledge of the performance of portfolios with similar characteristics. PDPs are 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 exposure to the above risks or the manner in
which these risks are managed or measured.
Pioneer Credit Limited
30 June 2017
50
10.a)
Summarised sensitivity analysis – interest rate risk
The following table summarises the sensitivity of the Group's financial assets and financial liabilities to interest rate risk,
which is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates.
Notes to the consolidated financial statements
At 30 June 2017
Financial liabilities
Borrowings
At 30 June 2016
Financial liabilities
Borrowings
Carrying
amount
$’000
-100 bps
Profit
$’000
+100 bps
Profit
$’000
73,543
623
(623)
47,046
399
(399)
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.
10.b)
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
New Zealand operations expose the Group to foreign exchange risk. This may result in the fair value of financial assets
and liabilities fluctuating due to movements in exchange rates. Fluctuations in the New Zealand dollar relative to the
Australian dollar may impact the Group’s financial results, though the impact of any fluctuations are not expected to be
material.
Cash flow and fair value interest rate risk
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
30 June 2017
Weighted average
interest rate %
Balance
$’000
30 June 2016
Weighted average
interest rate %
Balance
$’000
Bank overdrafts and bank loans
3.57%
73,543
4.28%
47,046
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
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 PDPs.
Pioneer Credit Limited
30 June 2017
51
Notes to the consolidated financial statements
10.c)
Credit risk
Credit risk arises from cash and cash equivalents, credit exposure to customers, including outstanding receivables and
committed transactions.
Risk management
Credit risk is managed on a Group basis. For corporate customers management assesses the credit quality of the
customer. Individual risk limits are set by the Board.
There are no significant concentrations of credit risk, whether through exposure to individual customers, specific
industry sectors and / or regions. The Group is exposed to investment credit risk from the significant investment in
PDPs. Risk limits are set based on internal ratings in accordance with limits set by the Board which is regularly
monitored by management.
Impaired trade receivables
As at 30 June 2017 no trade receivables were impaired or overdue.
10.d)
Liquidity risk
Prudent liquidity risk management requires maintaining sufficient cash reserves and debt funding to meet obligations
when due and through maintaining a reputable credit profile.
Management monitors 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.
Financing arrangements
In December 2016 the Group entered into a new cash advance facility of $100,000,000 with Bankwest and Westpac
Banking Corporation.
The Group had access to a Senior Debt Facility of $110,000,000 at the end of the financial year comprising a cash
advance facility to fund the acquisition of PDPs, 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 2017 and the undrawn limit on the cash advance facility was $26,258,435.
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 30 November 2019 and the Group has no reason to believe that the facility will not be renewed and
/ or extended beyond this date.
Pioneer Credit Limited
30 June 2017
52
Maturities of financial liabilities
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 the Group’s expectation that the facilities will be extended.
Notes to the consolidated financial statements
Within 1 year
$’000
Between
1 and 2
years
$’000
Between
2 and 5
years
$’000
Carrying
amount
$’000
3,638
9,195
3,138
15,971
3,414
7,732
2,249
13,395
-
3,110
-
3,110
-
47,611
-
47,611
-
74,839
682
75,521
-
345
560
905
3,638
80,394
3,820
87,852
3,414
53,410
2,809
59,633
At 30 June 2017
Trade payables
Borrowings
Accruals, provisions and other liabilities
At 30 June 2016
Trade payables
Borrowings
Accruals, provisions and other liabilities
11.
Capital management
11.a)
Risk management
The Group's objectives when managing capital are to:
•
safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders;
and
• maintain an optimal capital structure to reduce the cost of capital.
11.b)
Dividends
Ordinary shares
2H16 dividend on fully paid ordinary shares held on 30 September 2016 of 6.20 cents
per share paid on 31 October 2016
1H17 dividend on fully paid ordinary shares held on 31 March 2017 of 4.22 cents per
share paid on 28 April 2017
Dividends not recognised at the end of the reporting period
Since year end the Directors have recommended the payment of a final fully franked
dividend of 5.28 cents per fully paid ordinary share. The aggregate amount of the
proposed dividend expected to be paid on 4 October 2017, but not recognised as a
liability at year end is
2017
$’000
3,071
2,098
5,169
2016
$’000
3,085
1,651
4,736
2017
$’000
2016
$’000
3,219
3,071
Pioneer Credit Limited
30 June 2017
53
Franking dividends
The franked portions of the final dividends recommended after 30 June 2017 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 2018.
Notes to the consolidated financial statements
2017
$’000
2016
$’000
Franking credits available for subsequent reporting periods on a tax rate of 30.0%
7,386
5,005
The above amounts are calculated from the balance of the franking account as at the end of the reporting period.
11.c)
Capital risk management
Although the Group is not subject to any externally imposed regulatory requirement with respect to its capital position, it
maintains a conservative and proactive capital management strategy which includes taking 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.
The Board 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 financiers are in place to ensure that there is sufficient undrawn credit available to meet
reasonably 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 are met.
Details of financing facilities are set out in note 10(d).
Pioneer Credit Limited
30 June 2017
54
Notes to the consolidated financial statements
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.
12 Subsidiaries
13 Associates
56
57
Pioneer Credit Limited
30 June 2017
55
Notes to the consolidated financial statements
12.
Subsidiaries
Significant investments in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 24(b).
Name of entity
Country of
incorporation
Class of
shares
Equity holding
2017
%
2016
%
Pioneer Credit Solutions Pty Limited
Sphere Legal Pty Limited
Pioneer Credit (Philippines) Pty Limited
Pioneer Credit Connect Pty Limited
Pioneer Credit Broking Services Pty Limited
Switchmyloan Pty Limited
Credit Place Pty Limited
Pioneer Credit Acquisition Services (UK) Limited
Pioneer Credit Solutions (NZ) Limited
Australia
Australia
Australia
Australia
Australia
Australia
Australia
United Kingdom
New Zealand
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
1
2
3
4
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
1 Switchmyloan Pty Limited was acquired on 2 March 2016
2 Credit Place Pty Limited was incorporated on 9 June 2016 and has not conducted any business since
inception to the date of this report
3 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
4 Pioneer Credit Solutions (NZ) Limited was incorporated in New Zealand on 5 July 2016
Pioneer Credit Limited
30 June 2017
56
Notes to the consolidated financial statements
13.
Associates
Investment in associate
Set out below is the investment in an associate of the Group as at 30 June 2017. The associate has share capital
consisting solely of ordinary shares, which are held directly by the Group and the proportion of ownership interest is the
same as the proportion of voting rights held.
Name of entity
Place of
business /
country of
incorporation
% of ownership
interest
Nature of
relationship
Measurement
method
30 June
2017
30 June
2016
Goldfields Money Limited (GMY)
Australia
11.28
14.10
Associate
Equity method
The Group acquired the shareholding in GMY in 2015. At 30 June 2017, the Group’s share of the quoted market value
of GMY was $2.553m while the carrying value, inclusive of transaction costs and equity method accounting is $2.458m.
The Australian Prudential Regulation Authority (APRA) imposes a 15% cap on any one’s individual equity holding in an
Authorised Deposit-taking Institution. There are no restrictions on the Group’s ability to dispose of its holding in GMY
and 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 significant transactions with the associate during the financial year and the Group is not aware of any
contingent liabilities that may or may not exist within Goldfields Money at 30 June 2017.
Pioneer Credit Limited
30 June 2017
57
Summarised financial information for the associate
GMY is a publically traded entity.
Summarised statement of financial position
Total assets
Total liabilities
Net assets
Movement in net assets
Opening net assets
Loss for the period
Other comprehensive income
Capital raise
Equity raising costs
Movement in reserves
Closing net assets
Group’s share of net assets in %
Group’s share of net assets in $
Summarised statement of comprehensive income
Interest revenue
Interest expense
Non-interest revenue
Other expenses
Income tax benefit
Loss from continuing operations
Other comprehensive income
Total comprehensive loss
Dividends received from associates
Summarised commitments
Capital 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
Notes to the consolidated financial statements
2017
$’000
2016
$’000
215,201
(194,994)
20,207
156,414
(139,546)
16,868
16,868
(996)
147
4,288
(187)
87
20,207
14,907
(95)
-
2,106
(50)
-
16,868
11.28%
2,279
14.10%
2,378
2017
$’000
2016
$’000
6,546
(3,789)
1,476
(5,569)
340
(996)
147
(849)
6,723
(3,613)
508
(3,835)
122
(95)
-
(95)
-
-
2017
$’000
141
14,306
956
2016
$’000
-
10,745
657
69
82
151
47
168
215
Pioneer Credit Limited
30 June 2017
58
Notes to the consolidated financial statements
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.
14 Contingencies
15 Commitments
16 Events occurring after the reporting period
60
60
60
Pioneer Credit Limited
30 June 2017
59
14.
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
15.
Commitments
15.a)
Non-cancellable operating leases
The Group leases various offices under non-cancellable operating leases expiring within seven 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 operating leases are payable as follows:
Within one year
Later than one year but not later than five years
Later than five years
2017
$’000
2016
$’000
2,109
8,968
2,408
13,485
2,031
8,727
4,734
15,492
Some lease agreements include a financial incentive which is generally used to fund premise fitouts. The assets
acquired under these incentives 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.
15.b)
Service contract
The Group has a services contract for the operation of its Philippines facility that ends August 2019. The minimum
contractual commitments resulting from this agreement are outlined below.
Commitments for minimum service payments in relation to non-
cancellable contracts are payable as follows:
Within one year
Later than one year but not later than five years
2017
$’000
2016
$’000
1,592
1,944
3,536
324
-
324
16.
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 2017
60
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.
Notes to the consolidated financial statements
17 Related party transactions
18 Share-based payments
19 Remuneration of auditors
20 Earnings per share
21 Deed of cross guarantee
22 Assets pledged as security
23 Parent entity financial information
24 Summary of significant accounting policies
62
63
64
64
65
65
66
67
Pioneer Credit Limited
30 June 2017
61
17.
Related party transactions
17.a)
Parent entity
The Parent entity within the Group is Pioneer Credit Limited.
17.b)
Subsidiaries
Interests in subsidiaries are set out in note 12.
17.c)
Associates
Interests in associates are set out in note 13.
17.d)
Key Management Personnel
Short-term employee benefit
Post-employment benefits
Long-term benefits
Share-based payments
Notes to the consolidated financial statements
2017
$
2016
$
1,950,406
172,803
83,416
446,128
2,652,753
1,841,824
168,389
42,097
296,760
2,349,070
Detailed remuneration disclosures are provided in the Remuneration Report on pages 10 to 18.
17.e)
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
2017
$
2016
$
82,320
223,062
64,092
77,125
921,045
960,460
Pioneer Credit Limited
30 June 2017
62
Notes to the consolidated financial statements
17.f)
Loans from related parties
There were no loans from or loan repayments to related parties in either 2017 and 2016.
17.g)
Terms and conditions
See note 7(b) for general terms and conditions on ordinary shares.
18.
Share-based payments
18.a)
Options
On 7 February 2014, the Company established a share option scheme that entitles the holder to purchase 300,000
shares in the Company at an exercise price of $1.92.
The Options have been fully expensed by the Company at 30 June 2017.
Fair value at grant date
Expected IPO price at grant date
Exercise price
Date vested
Vesting expiry date (2 years after vesting)
18.b)
Equity Incentive Plan
Tranche 1
Tranche 2
$0.28
$1.60
$1.92
4 April 2016
4 April 2018
$0.31
$1.60
$1.92
4 April 2017
4 April 2019
On 1 July 2016 the Company issued 159,477 fully paid ordinary shares to eligible employee under the $1,000 exempt
plan and the $5,000 salary sacrifice scheme. See note 7(f) for details of the Equity Incentive Plan.
18.c)
Expenses arising from share-based payment transactions
Total expenses arising from share-based payments recognised during the period were:
Options
Share based payments
2017
$’000
2016
$’000
20
877
897
29
464
493
Pioneer Credit Limited
30 June 2017
63
19.
Remuneration of auditors
During the year the following fees were paid or are payable for services provided by the auditor of the Group, its related
practices and non-related audit firms:
Notes to the consolidated financial statements
PricewaterhouseCoopers Australia
Audit and other assurance services
Audit and review of financial statements
Total remuneration of PricewaterhouseCoopers Australia
Network firms of PricewaterhouseCoopers Australia
Other services
Other compliance and accounting advice
Total remuneration of Network firms of PricewaterhouseCoopers Australia
Non-PricewaterhouseCoopers Australia related audit firms
Other services
Other tax, compliance and accounting advice
Total remuneration of non-PricewaterhouseCoopers Australia related firms
2017
$
2016
$
278,316
278,316
341,209
341,209
23,885
23,885
85,462
85,462
148,174
148,174
113,940
113,940
450,375
540,611
Amounts disclosed for auditor’s remuneration are inclusive of GST that is not recoverable from the tax authority. See
note 24 (n).
20.
Earnings per share
20.a)
Basic earnings per share
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
20.b)
Diluted earnings per share
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
2017
Cents
2016
Cents
20.77
20.36
20.77
20.36
2017
Cents
2016
Cents
20.30
20.08
20.30
20.08
Pioneer Credit Limited
30 June 2017
64
Notes to the consolidated financial statements
20.c)
Reconciliation of earnings used in calculating earnings per share
2017
$’000
2016
$’000
Basic earnings per share
Profit attributable to the ordinary equity holders of the Company used in calculating
basic earnings per share:
From continuing operations
10,753
9,450
Diluted earnings per share
Profit from continuing operations attributable to the ordinary equity holders of the
Company
Used in calculating diluted earnings per share
10,753
9,450
20.d)
Weighted average number of shares used as the denominator
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
2017
Number
2016
Number
51,772,980
46,407,084
52,982,569
47,054,953
21.
Deed of cross guarantee
Pioneer Credit Limited, Pioneer Credit Solutions Pty Limited, Sphere Legal Pty Limited, Pioneer Credit (Philippines) Pty
Limited, Pioneer Credit Connect Pty Limited, Switchmyloan Pty Limited, Pioneer Credit Broking Services Pty Limited
and Credit Place Pty Limited are parties to a deed of cross guarantee, entered into on 25 June 2015. Credit Place Pty
Limited was joined to this deed of cross guarantee on 26 June 2017. Under the deed each Company guarantees the
debts of the others. By entering into the deed, these 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 12.
Pioneer Credit Solutions (NZ) Limited and Pioneer Credit Acquisition Services (UK) Limited are not party to the deed of
cross guarantee. They are stand-alone wholly-owned companies. The Directors have determined that Pioneer Credit
Solutions (NZ) Limited and Pioneer Credit Acquisition Services (UK) Limited are not reporting entities.
As at 30 June 2017:
• Pioneer Credit Solutions (NZ) Limited has assets of $2.633m, liabilities of $2.416m of which $2.319m relates to
amounts due to Group entities and contributed $0.311m to Group profit before income tax; and
• Pioneer Credit Acquisition Services (UK) Limited has assets of $6 and no liabilities. The UK entity generates no
revenue.
22.
Assets pledged as security
The carrying amount of assets pledged as security is disclosed in note 5(d).
Pioneer Credit Limited
30 June 2017
65
Notes to the consolidated financial statements
23.
Parent entity financial information
23.a)
Summary financial information
The individual financial statements for the Parent entity show the following aggregate amounts:
Balance sheet
Current assets
Total assets
Current liabilities
Total liabilities
Shareholders’ equity
Issued capital
Share based payment reserve
Accumulated profits
Profit for the year
Total comprehensive income
2017
$’000
2016
$’000
370
93,538
402
73,548
4,850
7,393
5,781
8,776
72,360
1,289
12,496
86,145
6,592
6,592
52,088
1,611
11,073
64,772
10,095
10,095
23.b)
Guarantees entered into by the Parent entity
The Parent entity is bound by an unlimited guarantee and indemnity as part of the Group, with security held over all
property.
23.c)
Contingent liabilities of the Parent entity
The Parent entity did not have any contingent liabilities as at 30 June 2017.
23.d)
Contractual commitments for the acquisition of property, plant or equipment
The Parent entity has no contractual commitments for the acquisition of property, plant or equipment at 30 June 2017.
Pioneer Credit Limited
30 June 2017
66
Notes to the consolidated financial statements
24.
Summary of significant accounting policies
This note provides a list of all significant accounting policies adopted in the preparation of these consolidated financial
statements and have been consistently applied to all the years presented, unless otherwise stated.
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
Impairment of assets
p)
q)
Leases
r) Foreign currency translation
68
69
70
71
71
71
71
72
72
72
72
73
73
73
73
73
74
74
Pioneer Credit Limited
30 June 2017
67
Notes to the consolidated financial statements
24.a)
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
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).
Basis of measurement
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
The consolidated financial statements are presented in Australian dollars.
Critical accounting estimates
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires the
Board 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 9.
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. The comparative information has been reclassified accordingly.
New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2017
reporting periods and have not been early adopted by the Group. The Group’s assessment, including known or
reasonably estimable information relevant to assessing the possible impact of standards not yet adopted and being
introduced for future financial years and interpretations is set out below.
AASB 9 Financial Instruments
AASB 9 Financial Instruments will replace AASB 139 Financial Instruments: Recognition and Measurement and
introduces changes in three key areas:
Classification, measurement and derecognition of financial assets and financial liabilities
All financial assets that do not meet certain restrictive conditions are measured at fair value through profit and
loss, and investments in equity instruments will be measured at fair value.
If the relevant restrictive conditions are met, financial assets are measured at either amortised cost or fair value
through other comprehensive income.
Determination of classification of financial assets will be based on the:
•
•
assessment of whether the contractual cash flows solely represent the payment of principal and interest; and
objective of the entity’s business model for managing the financial assets.
The accounting for financial liabilities remains largely unchanged.
Pioneer Credit Limited
30 June 2017
68
Notes to the consolidated financial statements
Impairment
Where a financial asset is measured at either amortised cost or fair value through other comprehensive income, an
entity shall recognise an allowance for expected credit losses.
Impairment of these types of financial assets will be based on an expected loss model that requires entities to
recognise expected credit losses based on unbiased forward looking information replacing the existing incurred loss
model which only recognises impairment if there is objective evidence that a loss has incurred. The new standard
outlines a ‘three-stage’ model for impairment based on changes in credit quality since initial recognition.
Hedge accounting
Preliminary assessment under the new standard is that the standard introduces a more principles-based approach
to hedge accounting. The new standard also introduces expanded disclosure requirements and changes in
presentation. The Group does not currently utilise hedge arrangements and the impact to the existing financial
statements of the new standard is considered low.
AASB 9 Financial Instruments is applicable to annual reporting periods commencing on or after 1 January 2018, and
would be effective for the 30 June 2019 year end. The Group does not currently intend, as is permitted, to early adopt
the new standard but has commenced a preliminary review program to thoroughly assess the requirements of the new
standard and ensure that new provisions are complied with.
Currently there is no further known or reasonably estimable information relevant to assessing the possible
the new standard in the period of initial application.
impact of
AASB 15 Revenue from Contracts with Customers
AASB 15 Revenue from Contracts with Customers is applicable to annual reporting periods commencing on or after 1
January 2018, and unless early adopted would be effective for the 30 June 2019 year end. The Group does not
currently intend to early adopt the new standard.
The new standard replaces AASB 118 Revenue and introduces a single model for the recognition of revenue based on
the satisfaction of performance obligations. It does not apply to financial instruments. Whilst it is not yet practical to
reliably estimate the financial impact on the financial statements in the period of initial application it is not currently
considered to be significant.
AASB 16 Leases
AASB 16 Leases amends the accounting for leases and will replace AASB 117 Leases. Lessees will be required to
bring both operating and finance leases on balance sheet as a right of use asset along with the associated lease
liability. Interest expense will be recognised in profit or loss using the effective interest rate method, and the right of use
asset will be depreciated. The standard is applicable to annual reporting periods commencing on or after 1 January
2019, and unless early adopted would be effective for the 30 June 2020 year end. The Group has not yet determined
whether to early adopt the new standard.
The potential financial impacts of the above to the Group have not yet been determined.
24.b)
Principles of consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Pioneer Credit Limited
as at 30 June 2017. Pioneer Credit Limited and its subsidiaries together are referred to in this financial report as the
Group or the Company.
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.
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.
Pioneer Credit Limited
30 June 2017
69
Notes to the consolidated financial statements
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 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
Under the equity method of accounting, 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 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 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 investee 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 may also be 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 24(p).
24.c)
Income tax
The income tax expense for the period is the tax payable on the current period's 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.
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.
The Group has implemented the tax consolidation legislation and its 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.
Pioneer Credit Limited
30 June 2017
70
Notes to the consolidated financial statements
24.d)
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 four
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.
24.e)
Trade and 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 any 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.
24.f)
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 6(a).
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 and 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.
24.g)
Intangible assets
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
Refer to note 6(c) for details about amortisation methods and periods used by the Group for intangible assets.
Pioneer Credit Limited
30 June 2017
71
Notes to the consolidated financial statements
Goodwill
Goodwill is measured as described in note 6(c). Goodwill on acquisitions of subsidiaries is included in intangible assets.
Goodwill is not amortised but it is tested for impairment annually or more frequently if events or changes in
circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and
losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those
cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in
which the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored for
internal management purposes.
24.h)
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 and 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.
24.i)
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 borrowings and interest are measured at amortised cost
using the effective interest rate 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.
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.
24.j)
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.
24.k)
Employee benefits
Short term obligations
Liabilities for wages and salaries, including non-monetary benefits such as annual 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 is recognised in the provision for employee benefits. All other
short-term employee benefit obligations are presented as payables.
Share-based payments
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.
Pioneer Credit Limited
30 June 2017
72
Notes to the consolidated financial statements
24.l)
Contributed equity
Ordinary shares are classified as equity.
Where Pioneer Credit Limited purchases the Company’s equity instruments as a result of a share-based payment plan,
the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from
equity attributable to the owners of Pioneer Credit Limited as treasury shares. Shares held in Pioneer Credit Limited
Equity Incentive Plan Trust are disclosed as treasury shares and deducted from contributed equity.
24.m)
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.
•
24.n)
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 which 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.
24.o)
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191 relating to the ‘rounding off’ of amounts in the financial statements. Amounts in the financial statements have
been rounded off in accordance with that Instrument to the nearest thousand dollars, or in certain cases, the nearest
dollar.
24.p)
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.
Pioneer Credit Limited
30 June 2017
73
Notes to the consolidated financial statements
24.q)
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 as described in note 15. 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.
24.r)
Foreign Currency translation
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the
primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial
statements are presented in Australian dollar, which is the Group’s functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are
generally recognised in profit or loss. They are deferred in equity if they relate to qualifying cash flow hedges and
qualifying net investment hedges or are attributable to part of the net investment in a foreign operation.
Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss, within
finance costs. All other foreign exchange gains and losses are presented in the statement of profit or loss on a net basis
within other income or other expenses.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the
date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are
reported as part of the fair value gain or loss.
Group companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation currency are translated into the presentation currency as
follows:
•
assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that
balance sheet;
•
•
income and expenses for each statement of profit or loss and statement of comprehensive income are
translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of
the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates
of the transactions); and
all significant resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities and of
borrowings and other financial instruments designated as hedges of such investments are recognised in other
comprehensive income.
Pioneer Credit Limited
30 June 2017
74
Directors’ declaration
In the Directors' opinion:
a)
the financial statements and notes set out on pages 23 to 74 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 2017 and of its
performance for the year ended on that date; and
b)
c)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable; and
at the date of this declaration, there are reasonable grounds to believe that the members of the extended
closed Group identified in note 21 will be able to meet any obligations or liabilities to which they are, or may
become, liable by virtue of the deed of cross guarantee described in note 21.
Note 24(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.
Keith John
Managing Director
Perth
24 August 2017
Pioneer Credit Limited
30 June 2017
75
Independent auditor’s report
To the shareholders of Pioneer Credit Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Pioneer Credit Limited (the Company) and its controlled entities
(together the Group or Pioneer Credit) is in accordance with the Corporations Act 2001, including:
(a)
giving a true and fair view of the Group's financial position as at 30 June 2017 and of its
financial performance for the year then ended
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
the consolidated balance sheet as at 30 June 2017
the consolidated statement of comprehensive income for the year then ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the notes to the consolidated financial statements, which include a summary of significant
accounting policies
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant
to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities
in accordance with the Code.
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.
76
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Materiality
For the purpose of our audit we used overall Group materiality of $761,000, which represents approximately
5% of the Group’s profit before tax.
We applied this threshold, together with qualitative considerations, to determine the scope of our audit and
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the
financial report as a whole.
We chose profit before tax as the benchmark because, in our view, it is the metric against which the
performance of the Group is most commonly measured, and is a generally accepted benchmark. We selected
5% based on our professional judgement noting that it is within the range of commonly accepted quantitative
thresholds for audit purposes.
Audit Scope
Our audit focused on where the Group made subjective judgements; for example, significant accounting
estimates involving assumptions and inherently uncertain future events.
The Group is a financial services provider which specialises in acquiring and servicing unsecured retail debt
portfolios and introducing brokered personal credit and loan products. The accounting processes are
performed by a group finance function at the head office in Perth. We performed most of our audit
procedures at the Group head office.
We ensured the audit team included the appropriate skills and competencies required for the audit. We also
used specialists in tax and valuation of assets and experts in actuarial modelling in the course of the audit.
77
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the
Audit and Risk Committee.
Key audit matter
How our audit addressed the key audit matter
As explained in note 5.b) of the financial report the Group’s
method for estimating fair value at 30 June 2017 was
tailored for different components of the PDP asset. The two
methods were:
a) statistical regression analysis and discounted cash flow
modelling, and
b) price paid at acquisition date less cash payments
received to reporting date (the cost method)
In the prior year there was one additional method for
estimating fair value. ‘Comparable market rate analysis’
method is no longer used and these components of the
PDP asset are now valued using the statistical regression
analysis approach due to a broader depth of historical data
available upon which to predict the future cash flows of
these portfolios.
Our audit procedures differed depending on the valuation
method used and are described below.
1. Estimating the fair value of purchased
debt portfolios (PDPs)
As explained in note 5.b) of the financial report,
Pioneer Credit have a policy to account for PDPs at
fair value, with movements in fair value recognised
in the consolidated statement of comprehensive
income.
Complexity arises in estimating the fair value of
PDPs due to the following reasons:
the nature of unsecured retail debt portfolios,
which have many factors impacting value, such
as: how the debt was originated and by which
financial institution; the quality and depth of
information on the customer; how much time
has elapsed since a payment was made against
the account; amount due; the time elapsed since
the PDP was acquired; the personal
circumstances and character of the customer;
the current and forecast economic environment;
and the quality of the operational model and
servicing platform; and
the lack of quoted market prices meaning there
is a need to use alternative techniques, including
sophisticated models, to estimate fair value.
The estimation of fair value of PDPs has a material
impact on the profit and balance sheet and is
inherently subjective, meaning it is a key audit
matter.
1a. Statistical regression analysis and
discounted cash flow modelling
The focus of our audit procedures, assisted by PwC
actuarial experts and valuations specialists, included:
This valuation approach is used for PDPs where
liquidation is expected to be through the receipt of
cash from the original customers. Pioneer Credit
engaged an external consultancy firm with expertise
in statistical regression and predictive analysis
modelling to assist them in developing the models
used for 30 June 2017.
As explained in note 5.b) of the financial report, the
models use regression analysis to predict the timing
and amount of future uncertain cash flows across
PDPs based on analysis of historic data.
While there was no fundamental change in the
underlying methodology – using historic data to
predict future cash flows and discounting back to
Model design – whether the structure of the models is
appropriate for determining the fair value of the PDPs
Model inputs – testing the accuracy and completeness
of the information used within the models
Evaluating model outputs – tested the accuracy of the
model output and considered whether the fair value
met our expectations.
Our detailed procedures included:
Model design
We performed the following procedures, amongst others:
understood, critically assessed and independently re-
performed the statistical and actuarial analysis used by
78
Key audit matter
How our audit addressed the key audit matter
present value, the detailed valuation approach and
methodology for these PDPs at 30 June 2017
differed to 30 June 2016 due to the use of a new
suite of models.
The output from Pioneer Credit’s statistical
regression analysis model is a series of estimated
future monthly cash flows from each category of
customer. The estimated cash flows are calculated
based on a customer’s statistically determined
likelihood of making payments.
These cash flows are then adjusted for the Group’s
assessment of modelling risk before being
discounted to present value to determine the fair
value of the PDP portfolio.
Modelling risk is explained in note 5.b) to the
financial report. It is significant to the Group due to
the inherent uncertainty of predicting future cash
flows based on limited historic information.
The key judgements involved in estimating fair
value under this method are the discount rate and
the timing and amount of cash flows from
customers.
the Group to determine the construction of the cash
flow models
considered if the model design appropriately included
the factors that impact the amounts and timing of cash
flows from customers
re-performed a selection of mathematical calculations
in the models
considered the adequacy of the scope of work of the
external consultant who assisted in the design of the
models and whether the external consultant was
appropriately qualified to perform the work.
Model input
We performed the following procedures, amongst others:
tested whether the assumptions and predictive factors
within the models were consistent with historical
experience and wider economic trends
tested a sample of customer characteristics, such as
days since last payment and personal information,
within the models to source documentation or systems
information
assessed whether the discount rate used reflected the
risks of the PDPs, including comparison of the discount
rates used to externally available interest rates for
similar products (e.g personal loans, credit cards).
performed sensitivity analysis on assumptions and
challenged the Group on the assumptions that had a
significant impact on the valuations such as expected
liquidations and discount rate.
Evaluating model output
These procedures were performed to evaluate the models
outputs, subsequent to the Group’s risk adjustments. We
performed the following procedures, amongst others:
considered if the movement in fair value of the PDPs
over the year was consistent with our knowledge of the
business and industry
compared the fair value at 30 June 2017 using the
superseded models used by Pioneer Credit, to the fair
value calculated by the current period model. We
analysed key differences to identify if there were other
factors that should be taken into account for the 30
June 2017 model or process, and if the movements
were consistent with our understanding of the different
approaches used in the current and previous models.
compared the fair value of PDPs to recent PDP
purchases and sale values. Where there were
differences in value, determined whether the reasons
were consistent with our knowledge of the business and
the industry.
The models remain sensitive to the inherent uncertainty of
predicting future cash flows based on limited historical
information.
79
How our audit addressed the key audit matter
We agreed the recorded cost and purchase date of this
portfolio through to the original purchase contract, and
assessed if the contract resulted from a competitive tender
process.
We also considered the performance of the portfolio since
acquisition date by assessing the level of cash receipts
versus the PDP portfolio average as a whole and
considered whether there were any indications that the
carrying value of the investment was not appropriate.
We obtained confirmations from the Group’s banks for all
borrowings to test the amounts recorded in the financial
statements.
We read the most up-to-date agreements between Pioneer
Credit and its financiers to obtain an understanding of the
terms associated with the facilities and the amount of
facility available for drawdown.
Where debt is regarded as non-current, we tested the
Group’s assessment that they had the unconditional right
to defer payment such that there were no repayments
required within 12 months from the balance date.
Key audit matter
1b. Cost method
The Group determined that one material portfolio
of PDPs, which was purchased within 3 months
prior to 30 June 2017, had some different product
characteristics to Pioneer’s existing portfolio base.
Fair value for this portfolio was estimated by the
Group using the price paid for the PDPs at the
acquisition date less cash receipts received to
reporting date (the cost method).
The key area of judgement for this portfolio’s fair
value is whether there has been any significant
changes in the period after acquisition to 30 June
2017 that would impact fair value.
At 30 June 2016, all PDPs purchased within 3
months relating to personal loans and credit card
related debts used the cost method to determine fair
value. As explained in note 5.b) of the financial
report, most recently purchased PDPs now estimate
fair value using the modelling approach referred to
in 1a) above.
2. Borrowings
The purchase of new PDPs is typically funded
through a combination of available cash generated
through operations, capital raising and borrowings
from financial institutions.
At 30 June 2017, Pioneer Credit had a borrowing
liability (current and non-current) of $80.39
million representing 89% of total liabilities.
Borrowings as a percentage of the total PDP asset is
48.88% at 30 June 2017. Pioneer Credit refinanced
the banking facilities during the year, replacing the
old facility with a new facility from 2 separate
lenders. The terms and conditions of the
borrowings are detailed in note 10.d) of the
financial report. The borrowing agreements contain
financial covenants that Pioneer must comply with.
The refinancing of borrowings was a significant
event during the year. Further, borrowings is a key
number in the balance sheet and will remain an
important funding mechanism for continued
growth. Therefore, in our view, borrowings is
important to the readers understanding of the
financial report. As a result of these items we
consider accounting for borrowings to be a key
audit matter at 30 June 2017.
Other information
The directors are responsible for the other information. The other information comprises the Results
for announcement to the market, Corporate Directory, Review of operations and activities, Director's
report, Corporate Governance Statement and Shareholder information included in the Group’s annual
report for the year ended 30 June 2017 but does not include the financial report and our auditor’s
report thereon.
80
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and Corporations Act 2001 and
for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our
auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 10 to 18 of the directors’ report for the
year ended 30 June 2017.
In our opinion, the remuneration report of Pioneer Credit Limited for the year ended 30 June 2017
complies with section 300A of the Corporations Act 2001.
81
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
William P R Meston
Partner
Perth
24 August 2017
82
Shareholder information
Shareholder information
The shareholder information set out below was applicable as at 2 August 2017.
Distribution of securities
a)
Analysis of numbers of equity security holders by size of holding
Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Holders
528
731
349
540
67
2,215
Ordinary shares
254,120
2,045,848
2,719,211
15,499,840
40,446,778
60,965,797
There were zero holders of less than a marketable parcel of ordinary shares.
b)
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted securities are:
Name
Avy Nominees Pty Ltd
JP Morgan Nominees Australia Limited
Wroxby Pty Ltd
National Nominees Limited
HSBC Custody Nominees (Australia) Limited
BNP Paribas Nominees Pty Ltd
BNP Paribas Noms Pty Ltd
Citicorp Nominees Pty Limited
Midbridge Investments Pty Ltd
Citicorp Nominees Pty Limited
BNP Paribas Nominees Pty Ltd
RBC Investor Services Australia Nominees Pty Limited
Coolah Holdings Pty Ltd
Niribi Pty Limited
Sharlin Nominees Pty Limited
Hoperidge Enterprises Pty Limited
Carole Vines
James Arthur Singh & Kristy Nicole Milward
Bernard Owen Stephens & Erin Josephine Stephens
Midbridge Investments Pty Ltd
Ordinary shares
Number held
5,860,656
5,193,784
2,689,298
2,450,108
2,168,450
1,897,414
1,863,864
1,773,272
1,023,171
937,942
839,647
760,982
725,000
698,629
611,791
545,000
450,574
450,425
400,000
366,145
Percentage of
issued shares
9.61%
8.52%
4.41%
4.02%
3.56%
3.11%
3.06%
2.91%
1.68%
1.54%
1.38%
1.25%
1.19%
1.15%
1.00%
0.89%
0.74%
0.74%
0.66%
0.60%
Pioneer Credit Limited
30 June 2017
83
c)
Unquoted equity securities
Name
Mr Michael Smith
Name
Mr Keith R John
Name
Employee Incentive Plan
d)
Substantial holders
Substantial holders in the Company are set out below:
Name
Mr Keith R John
OC Funds Management
Celeste Funds Management Limited
Securities subject to voluntary escrow
Escrow ends
6 July 2018
18 July 2018
6 July 2019
18 July 2020
e)
Voting rights
Shareholder information
Options
Number held
300,000
Number of
holders
1
Indeterminate rights
Number held
60,000
Number of
holders
1
Performance rights
Number held
1,742,000
Number of
holders
15
Number held
7,625,585
4,419,000
3,247,941
Percentage of
issued shares
12.51%
7.25%
5.33%
Class
Ordinary shares
Ordinary shares
Ordinary shares
Ordinary shares
Number of
shares
65,684
45,487
70,906
60,112
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 2017
84