Real-World Annual Reports

This assignment is divided into four main parts:

Part 1: Introduction to Company Annual Report and Financial Statements

Part II: Financial Statements

Part III: Financial Statement Analysis Tools

Part IV: Comparative analysis essay

Attention:

1. Parts 1-3, all serve the purpose of Part 4. In this assignment, I need you not only to submit the report for Part 4 to me, but also to send me a separate document with the completed contents of the previous three parts. (The answers given to me for the previous three parts can be generalized)

2. references need to be 13-15

3. make graphs and charts in your essay when necessary.

4. the document contains: a detailed request (important!)

Reports of four different companies for the years 2021-2023 and financial data corresponding to one copy for each company (4*3+4*1=16)

2021
Annual Report
3P Learning Limited
Appendix 4E
Preliminary final report
1. Company details
Name of entity:
ABN:
Reporting period:
Previous period:
3P Learning Limited
50 103 827 836
For the year ended 30 June 2021
For the year ended 30 June 2020
2. Results for announcement to the market
$’000
Revenues from ordinary activities
up
4.5% to
57,448
Loss from ordinary activities after tax attributable to the owners of 3P
Learning Limited
down
1912.2% to
(9,369)
Loss for the year attributable to the owners of 3P Learning Limited
down
1912.2% to
(9,369)
In accordance with International Financial Reporting Standards Interpretations Committee (‘IFRIC’) clarification, the Group
retrospectively changed the accounting policy in relation to ‘Software as a Service (SaaS)’ arrangements. Refer to note 4 of
the financial statement for further details.
Dividends
There were no dividends paid, recommended or declared during the current financial year.
Comments
The loss for the Group after providing for income tax and non-controlling interest amounted to $9,369,000 (restated 30
June 2020: profit of $517,000).
Refer to ‘Review of operations’ in the Directors’ Report for detailed commentary.
3. Net tangible assets
Reporting
period
Cents
Net tangible assets per ordinary security
(5.22)
Previous
period
Cents
(Restated)
3.27
Net tangible assets calculations exclude right-of-use assets and include lease receivables and lease liabilities.
4. Control gained over entities
On 28 May 2021, the Group acquired 100% of the shares in Blake eLearning Pty Ltd and its controlled entities (collectively
‘Blake’). Refer to note 33 ‘Business combinations’ of the financial statements for further details.
5. Audit qualification or review
The financial statements have been audited and an unmodified opinion has been issued.
6. Attachments
The Annual Report of 3P Learning Limited for the year ended 30 June 2021 is attached.
3P Learning Limited
Appendix 4E
Preliminary final report
7. Signed
As authorised by the Board of Directors
Signed
Matthew Sandblom
Executive Chairman
Sydney
Date: 25 August 2021
Chairman’s Letter to Shareholders
I have a long history with 3PL as I was one of the co-founders of the business along with Shane Hill and Tim Power. It was a
great company to be involved in because it made students really excited about maths and grew very quickly.
Now that I’m back as chairman and largest shareholder of 3PL (I was chairman prior to the IPO), growing the company and
getting students engaged and excited by learning will again be my main areas of focus.
The most significant event in the FY21 year was obviously the merger with Blake eLearning (BeL), a company I had been
building for the last 13 years.
There was talk before the 3PL IPO to merge BeL in, but terms could not be agreed so I’m pleased we have finally managed
to make this happen.
There is even more logic in these two companies being together now than there was 7 years ago. BeL has a proven track
record of developing new programs and product innovation, things that 3PL has struggled to do since the IPO. It also has a
fast-growing consumer market to complement 3PL’s expertise in selling to schools. There were also obvious cost synergies
that we are well on the way to fully realising.
Bringing these two companies together means the annual billings is almost $100m, which is a significant milestone that few
EdTech businesses have achieved. We also expect to have a healthy profit in the FY2022 year which means we can fund
further growth initiatives both in terms of product development and geographic market expansion.
The potential growth sources that I’m most excited about are:
• The direct-to-consumer space where we are targeting billings growth of 25% from $27.9M to $35.1M, with a focus on
the UK, US and smaller high-growth markets like South Africa and Canada.
• Negotiating Ministry of Education level multi-million-dollar deals in a variety of geographic areas, helped by having the
BeL product range available.
• We have done quite a bit of work laying the foundations in the Indian market with our distribution partner Ratna Sagar
over the last 12 months and we expect this to pay off over the next couple of years.
• Targeted bolt-on acquisitions that will help fill gaps in our offerings to schools and help grow average revenue per user.
We aim to make the accounts as transparent and as simple to read as possible. In particular, we are focused on our product
development and will only capitalise eligible product development costs that generate future economic benefits. We expect
these projects will generally be new revenue producing products that have not been released to the market.
Our strategy is to focus on our hero products of Mathletics, Reading Eggs and Mathseeds, and to sunset Readiwriter.
Readiwriter has not delivered new sales to justify the investment made resulting in a decision to fully impair Readiwriter. Hero
products are the ones we can generate tens of millions of dollars of revenue from.
The other significant items to note in the accounts were the legal, accounting and consulting costs associated with the 3 major
possible deals 3PL considered in the FY2021 year (IXL, BYJU’s, BeL) which amounted to $5.5m. There were also
$2.4m costs associated with staff restructuring and integration.
My overall business philosophy is about achieving long term profitable growth by producing products that really engage,
excite and educate. My preference is for organic growth unless an acquisition can really speed up either our time to market or
access to a market. Our core mission is to be a market leader, in major English-speaking markets, in literacy and numeracy
PreK-10.
I would also like to welcome on board our two new directors Kathy Ostin and Allan Brackin. Kathy has excellent accounting,
audit and listed board experience while Allan has been involved in multiple tech companies, about our size, and grown them
significantly either as a director or CEO.
And finally I would like to congratulate Jose Palmero on his appointment as CEO of 3PL. Jose was already interim CEO but the
board has now made this his permanent role. Jose and I have a very productive and close working relationship for over 15
years and we have complementary skills sets. The board has also agreed to change my title to Executive Chairman to reflect
my greater involvement in the business than is typical for a chairman.
Yours sincerely
Matthew Sandblom
Executive Chairman
A message from the CEO
It’s been a challenging year for 3PL, with two unsuccessful takeover approaches from IXL and BYJU’s resulting in
shareholder, management, and staff uncertainty for most of FY2021.
As mentioned in our Chairman’s Letter to Shareholders, this was ultimately resolved with a third proposition – an all-scrip
deal that received 99.9% shareholder support and enabled 3PL’s acquisition of Blake eLearning on 28 May 2021 to start
writing a new and exciting chapter in 3PL’s history.
Having successfully completed the acquisition and taken on the role of CEO, I’m pleased to report that in the 3 months since
then we have achieved the following:
1. Product Positioning – Focus on hero products
We have reviewed our product strategy and decided to concentrate on investing more in products that perform well in
numeracy and literacy across B2B and B2C globally, but particularly in our larger markets (Australia/NZ, US/Canada, UK),
and sunset products that do not have consistently high sales and high retention rates.
The greater focus will be on hero products in numeracy and literacy (Mathletics, Mathseeds and Reading Eggs). These
represent $52.5m and 97.5% of our current licence revenue. We will continue servicing existing customer obligations, but
only with basic resourcing, for ReadiWriter, STEMscopes, Gooseberry Planet and WordFlyers until they sunset naturally.
2. Simplify business processes – Align with demonstrable business growth
Our more focused product strategy has resulted in immediate flow-on benefits for sales, marketing and support functions.
Effort saved in these areas has been redirected towards selling and marketing Mathletics, Mathseeds and Reading Eggs to
further improve revenue, conversion rates and retention.
We have streamlined product development to deliver features relevant to our larger markets, where our products currently
hold established positions, but will also support initiatives in emerging markets with demonstrable business growth
opportunities.
We have reviewed business systems for further simplification, and have already moved HR, Payroll, and accounting, into a
single system. Our technology stacks will take a bit longer, as we want to manage the transition with minimum disruption.
3. Synergy savings
Since completion date we have achieved synergies worth $9.1M in annual savings, without affecting revenue potential.
These savings directly represent the simplified product and business process strategy, with $4.6M from discontinuing
ReadiWriter and related external product development teams.
Sales and marketing savings were $3.4M, mostly as a result of reducing headcount in the US while we work on improving
the product/market fit for Mathletics with additional features.
(1) Expected time to achieve annual run-rate cost savings.
(2) Annualised savings enacted in FY21 as announced on 30 June 2021.
(3) Costs incurred in FY21 to enact savings include $1.7M for employee restructure costs and $0.7M for termination of other services.
A message from the CEO
Key initiatives for FY22 – Unlocking value
The future for 3PL looks bright, with combined annual revenue of over $92M, healthy EBIT and cashflow in FY22 to allow us
to invest in product, organic growth and modest, targeted acquisitions.
We have completed most of the organizational restructure and synergies work in our first 100 days, so we are now ready to
start unlocking value.
Our key initiatives for FY22 and beyond are:
1. B2C expansion
B2C has been growing consistently and we will continue to invest in marketing and product development for this market.
For FY22, we expect more success in EMEA and AMER than in APAC, given the already high penetration of our combined
products in the APAC B2B market. We also see further opportunities in South Africa, Ireland and India and will increase
our investment as these markets grow.
B2C is a market that needs constant data and marketing optimization to achieve lower cost of acquisition (CAC) and
improve conversion rates and lifetime value (LTV).
Our approach will focus on mobile apps, user experience, and growing our B2C subscriber base. The volume and impact
of word-of-mouth marketing together with our strong advertising spend will generate a digital marketing virtuous circle
that further improves optimisation.
2. B2B existing business
Although overall revenue growth in the B2B numeracy market is likely to continue for FY22, we need to add motivation
and engagement features to Mathletics to further improve sales and retention. Mathseeds is currently offsetting the lower
renewal rates for Mathletics in the US, but this needs improvement in the short to medium term.
Our B2B Literacy products should to continue to perform well in FY22, particularly Reading Eggs.
Improving Mathletics for the B2B market is therefore our highest product priority and we expect this to go on for the better
part of FY22. The work will be done in-house which, together with our synergy savings, will result in higher profitability for
3PL.
A message from the CEO
3. B2B emerging markets and targeted new investment – Planting seeds for future growth
We see our core effort in English-speaking markets and will pursue those as a priority, but we will also take calculated risks
in emerging markets such as India, Middle East and Latin America with potential enterprise and government deals.
We are in active negotiations in the EMEA, North America, and Asia regions where discussions are progressing well.
These deals are complex and typically harder to get so we will continue engaging, but we will recognise revenue and
allocate further resources only when the deals are signed, and cash received.
During the year we’ll be investing in a standalone mobile B2C numeracy app, which we think is a market that offers
opportunities for expansion.
We are builders and our preference is to grow company value organically, but we will also explore modest, targeted
acquisitions where we identify options to either gain entry to complementary markets or speed up our development
efforts to get to those markets more quickly.
I served as Director on the 3PL Board from 2009 until its IPO in 2014, so I’m thrilled to now lead the company in this new
chapter.
Together with our strong, entrepreneurial, and result-focused team we will continue to deliver our company mission, Better
Ways to Learn, to students and educators around the world.
Yours sincerely
Jose Palmero
Chief Executive Officer
3P Learning Limited
ABN 50 103 827 836
Annual Report – 30 June 2021
3P Learning Limited
Contents
30 June 2021
Directors’ report
Directors’ report – remuneration report
Auditor’s independence declaration
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors’ declaration
Independent auditor’s report to the members of 3P Learning Limited
Shareholder information
Corporate directory
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2
10
26
27
28
29
30
31
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75
81
83
3P Learning Limited
Directors’ report
30 June 2021
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the ‘Group’) consisting of 3P Learning Limited (referred to hereafter as the ‘Company’ or ‘parent entity’) and the entities it
controlled at the end of, or during, the year ended 30 June 2021.
Directors
The following persons were directors of 3P Learning Limited during the whole of the financial year and up to the date of this
report, unless otherwise stated:
Matthew Sandblom Non-Executive Chairman (appointed on 28 May 2021); Executive Chairman (appointed on 24 August
2021, effective on 25 August 2021)
Samuel Weiss (Non-Executive Chairman – until 28 May 2021)
Claire Hatton
Mark Lamont
Katherine Ostin (appointed on 6 August 2021)
Allan Brackin (appointed on 6 August 2021)
Rebekah O’Flaherty (resigned on 9 April 2021)
Roger Amos (resigned on 28 May 2021)
Principal activities
The Group operates within the education technology sector. During the financial year, the principal continuing activities of
the Group consisted of the development, sales and marketing of educational software and ebooks to schools and to
parents of school-aged students, delivered via a software-as-a-service subscription model.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Significant changes in the state of affairs
On 14 August 2020, IXL Learning Inc (‘IXL’) proposed to acquire 100% of the issued shares of the Company for a cash
price of $1.35 per share by way of a Scheme of Arrangement. The shareholders of the Company did not approve the
proposal on 20 November 2020. The agreement with IXL was subsequently terminated on 24 November 2020.
On 12 November 2020, Think and Learn Private Limited (‘BYJU’) proposed to acquire 100% of issued shares of the
Company for a cash price of $1.45 per share. A revised offer was later received from BYJU on 18 November 2020 for an
increased cash price of $1.50 per share. After completion of their due diligence towards the end of 2020, BYJU did not
provide a firm proposal for the Group’s consideration.
On 28 May 2021, the Group acquired 100% of the equity in Blake eLearning Pty Ltd and its controlled entities (collectively
‘Blake’) for the total consideration transferred of $182,221,000. The consideration was fully settled by the issuance of 137
million ordinary shares in the Company. Refer to note 33 of the financial statements for further details.
There were no other significant changes in the state of affairs of the Group during the financial year.
Review of operations
Business overview
The Group is a global leader in online education and adaptive and collaborative learning. The Group’s suite of mathematics
and literacy products are designed to facilitate dynamic and engaging learning experiences for educator and learner alike to
address the complex challenges faced by teachers and students in the modern classroom and at home.
The Group has over 350 educators, engineers, product designers and other personnel around the world, servicing schools
and parents in more than 100 countries. Today, the Group is trusted by almost 6 million students in over 17,000 schools
across the world. The Group’s mission is to create and deliver better ways to learn for students and educators.
Financial review
The loss for the Group after providing for income tax and non-controlling interest amounted to $9,369,000 (restated 30 June
2020: profit of $517,000).
2
3P Learning Limited
Directors’ report
30 June 2021
A reconciliation of earnings before interest, tax, depreciation and amortisation (‘EBITDA’) to statutory profit after tax for the
year is as follows:
Consolidated
30 June 2021 30 June 2020
$’000
$’000
(Loss)/profit attributable to owners of 3P Learning Limited
Add: Non-controlling interest
Add: Income tax (benefit)/expense
(9,369)
(1)
(2,408)
517
965
(Loss)/profit before income tax (benefit)/expense
(11,778)
1,482
Depreciation and amortisation expense
Impairment expense
Interest income
Finance costs
Corporate advisory costs
Restructure and integration costs
9,329
4,818
(115)
237
5,476
2,450
7,783
(270)
284
197
–
Underlying EBITDA**
10,417
9,476
*
Underlying EBITDA represents earnings before interest, tax, depreciation and amortisation, excluding impairment
expense, corporate advisory costs, and restructure and integration costs.
The directors have provided underlying EBITDA after careful consideration of the requirements and guidelines contained in
ASIC’s Regulatory Guide 230 ‘Disclosing non-IFRS financial information’. Underlying information, including this
reconciliation to net profit after income tax expense, has been provided in order to meet the demands from users of the
financial reports for information to better understand aspects of the Group’s performance. The directors believe that
underlying EBITDA is the most appropriate measure of the maintainable earnings of the Group and thereby best reflects the
core drivers of, and ongoing influences upon, those earnings.
Revenue
Total revenue for the year ended 30 June 2021 was $57,448,000 (30 June 2020: $54,955,000). The acquisition of Blake
eLearning Pty Ltd contributed revenue of $3,453,000 for the period between 28 May 2021 to 30 June 2021.
Performance
The loss for the Group after providing for income tax and non-controlling interest amounted to $9,369,000 (restated 30 June
2020: profit of $517,000).
The Group has changed the accounting policy retrospectively to account for customisation and configuration costs incurred
in relation to Software-as-a-Service (‘SaaS’) arrangements as an expense. This has led to depreciation and amortisation
expenses in the current year decreasing by $1,546,000 to $9,329,000.
Following a product strategy reset to focus on ‘hero products’, impairment expense of $4,818,000 was recognised on the
Readiwriter product suite which will be sunset.
Corporate advisory costs of $5,476,000 relating to the corporate activity experienced during the year were recognised. In
addition, $2,450,000 of restructure and integration costs on incorporating Blake eLearning Pty Ltd into the Group were
recorded during the year ended 30 June 2021.
As at 30 June 2021, the Group has $24,906,000 of cash and cash equivalents and no debt. Surplus cash balances are put
on term deposit with the Group’s bankers to maximise interest income.
3
3P Learning Limited
Directors’ report
30 June 2021
Segment review
Segment revenue for the year is as follows:
30 June 2021 30 June 2020
$’000
$’000
Asia-Pacific (‘APAC’)
Americas
Europe, Middle-East and Africa (‘EMEA’)
Total Revenue
35,469
8,972
13,007
57,448
33,612
9,132
12,211
54,955
Change
$’000
1,857
(160)
796
2,493
Change
%
5.5%
(1.8%)
6.5%
4.5%
Segment Underlying EBITDA is as follows:
30 June 2021 30 June 2020
$’000
$’000
APAC
Americas
EMEA
Total Underlying EBITDA
8,559
(1,273)
3,131
10,417
9,549
(2,756)
2,683
9,476
Change
$’000
(990)
1,483
448
941
Change
%
(10.4%)
(53.8%)
16.7%
9.9%
APAC segment
Revenue and other income in APAC has increased by $1,857,000. The acquisition of Blake eLearning Pty Ltd contributed
revenue of $3,453,000. This was offset by a change in revenue recognition on Blake products sold to schools from the date
of acquisition, 28 May 2021. Revenue recognition from this date was recorded on a straight-line basis over the service
period consistent with licence revenue, whereas previously it was recorded at the point of sale consistent with net
commission revenue. The segment did not continue to benefit from high volume demand from Coronavirus (COVID-19)
pandemic in the Financial Year 2021 (‘FY21′). Underlying EBITDA has decreased by $990,000 driven by lower capitalisation
rates, and an increase in bonus expense.
Americas segment
Revenue in Americas declined by 1.8% to $8,972,000 driven by unfavourable exchange rates movements. Underlying
EBITDA has increased by $1,483,000 benefiting from a reduction in sales and marketing resources until the Mathletics
product is improved to meet the market needs. There has also been a reduction in travel expenses due to COVID-19
pandemic.
EMEA segment
EMEA revenue has increased by 6.5% as a result of increase in new business and high retention of the existing business,
offset by unfavourable exchange rate movements. Underlying EBITDA increased by 16.7% due to the improved revenue
contribution and a reduction in selling costs and general administration costs.
The Group has net assets of $194,842,000 (restated 30 June 2020: $21,610,000) which have increased from the previous
year due to acquisition of Blake eLearning Pty Ltd at consideration of $182,210,000 by issuance of 137,000,000 shares at
$1.33 per share.
Material Business Risks
The material business risks faced by the Group that are likely to have an effect on the financial prospects of the Group are
outlined below:
Competition risks: The Group operates in a highly competitive industry and there are a large number of online education
participants targeting the school K-12 segment, many with significant resources and access to capital.
Technology risks: The Group’s technology platforms and systems might be disrupted by new technologies or become
obsolete, which could affect the Group’s reputation, ability to generate income and financial performance.
4
3P Learning Limited
Directors’ report
30 June 2021
Privacy and Data Security risks: As a technology-focused education business, compliance with privacy and data security
legislation relating to managing information security and safeguarding customer and student data remains a paramount key
consideration and impacts the way the Group approaches everything it does and the decisions it makes. The Group takes
the storage of this data incredibly seriously and place the highest priority on ensuring its security.
Revenue risk: The K-12 market is driven by the schools’ ability to fund the purchase of education technology for their
students. A significant decline in school funding, changes to schools’ purchasing decision processes, or education
regulatory changes in any market could result in reduced demand for the Group’s products. Sales made directly to
consumers may also be impacted by general economic performance of a region or any regulatory changes which impact
online education or online sales.
Commercial contractual risk: The Group has entered into an agreement with a National Ministry of Education customer in
the Middle East region. As this is a material contract with a foreign government body, there are increased liability risk
through events such as breach of contract, claims, disputes or litigation and increased business risks such as failure to
build strong relationships or failure to meet contractual objectives.
Exchange rate risk: Volatility in exchange rates can impact the Group’s ability to maintain or grow margins, however, to a
significant extent the Group’s business currently enjoys natural hedges: the revenue that the Group obtains in a particular
foreign currency closely matches the expenses it incurs in that currency (such as the British Pound). The Board believes
that natural hedges presently mitigate any exchange rate volatility risk for the Group to an economically acceptable level.
Matters subsequent to the end of the financial year
No matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect the
Group’s operations, the results of those operations, or the Group’s state of affairs in future financial years.
Likely developments and expected results of operations
The Group’s growth is expected to be supported by the continuing trend of schools, teachers, parents and students
seeking more engaging and interactive online learning resources with proven pedagogical efficacy.
The Group expects to continue to focus its product development and distribution efforts on the core areas of mathematics
and literacy. The Group also expects to continue to invest in its scalable internal sales and marketing to support its growth
in both existing and new territories.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
Information on directors
Name:
Title:
Matthew Sandblom
Non-Executive Chairman (appointed on 28 May 2021); Executive Chairman
(appointed on 25 August 2021)
Qualifications:
BA Economics
Experience and expertise:
Matthew is an education entrepreneur with over 30 years of experience building
successful companies. He started his first company, Pascal Press, in 1989 to publish
school workbooks and study guides. Since then he has founded or co-founded many
successful companies including Blake education, ClickView, 3P Learning and
Blake eLearning. Matthew is driven by the idea of producing resources for
students that deliver on the promise that they provide better ways to learn than other
products. He was a major shareholder of 3P Learning until its IPO in 2014.
Other current directorships:
None
Former directorships (last 3 years): None
Interests in shares:
137,220,000
5
3P Learning Limited
Directors’ report
30 June 2021
Name:
Title:
Qualifications:
Experience and expertise:
Samuel Weiss
Independent Non-Executive Director (Non-Executive Chairman until 28 May 2021)
AB, MS, FAICD
Significant experience as a Senior Executive and as a Non-Executive Director in
education, technology and consumer products companies in Australia, North
America, Europe and Asia.
Other current directorships:
Chairman of Altium Limited (ASX: ALU) – Director since January 2007
Former directorships (last 3 years): Non-Executive Director of Citadel Group Limited (ASX: CGL) – from 15 May 2019 to
31 October 2019
Special responsibilities:
Member of the People and Culture Committee and Member of the Audit and Risk
Committee (appointed Interim Chair on 28 May 2021)
Interests in shares:
637,277 ordinary shares
Name:
Title:
Qualifications:
Experience and expertise:
Claire Hatton
Independent Non-Executive Director
BSc, MBA, GAICD
Over 20 years of global experience in strategy, sales, marketing and operations.
Significant experience in the digital and technology market. Previously held senior
roles at Google, Travelport and Zuji.com.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Chair of the People and Culture Committee and Member of the Audit and Risk
Committee
Interests in shares:
41,526 ordinary shares
Name:
Title:
Qualifications:
Experience and expertise:
Mark Lamont
Independent Non-Executive Director
BA., Dip Ed
Deep experience in the global education and EdTech sectors with particular expertise
in technology and internet applications for education, international markets and
strategic planning. Previously held roles with myinternet Ltd and Follett Corporation.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Member of the Audit and Risk Committee and Member of the People and Culture
Committee
Interests in shares:
None
Name:
Title:
Qualifications:
Experience and expertise:
Katherine Ostin
Non-Executive Director (appointed on 6 August 2021)
B.Com, GAICD, Chartered Accountant
Diverse and deep experience in audit and risk management, having previously been
an audit partner at KPMG between 2005 and 2017, during which time she established
and led KPMG’s New South Wales Health, Ageing and Human Services Practice.
Katherine is on the Board and committee at eftpos Payments Australia, where she is
the Chair and member of various committees.
Other current directorships:
Non-Executive Director of Swift Media Ltd (ASX: SW1) since 1 October 2019; NonExecutive Director of Capral Limited (ASX: CAA) since 17 June 2020 and NonExecutive Director of Dusk Group Ltd (ASX: DSK) since 16 September 2020.
Former directorships (last 3 years): None
Special responsibilities:
Member of the Audit and Risk Committee and Member of the People and Culture
Committee
Interests in shares:
None
6
3P Learning Limited
Directors’ report
30 June 2021
Name:
Title:
Qualifications:
Experience and expertise:
Allan Brackin
Non-Executive Director (appointed on 6 August 2021)
Bachelor of Applied Science
Over 35 years of experience in the technology industry and has a proven track record
as a business builder and adviser, with experience in business strategy, sales and
marketing, process re-engineering, change management, financial management and
merger and acquisition activity along with governance. Previously was the CEO and
Managing Director of Volante Group Ltd, founder and CEO of AAG Technology
Services, Chair of Opticomm Ltd, and Chair of GBST Ltd.
Other current directorships:
Non-Executive Director of Sovereign Cloud Holdings Limited (ASX: SOV) since 16
October 2020 and Non-Executive Director of Integrated Research Limited (ASX: IRI)
since 1 February 2021.
Former directorships (last 3 years): Non-Executive Director of GBST Holdings Limited (ASX: GBT) – delisted on 7
November 2019; Chairman of RPMGlobal Holdings Limited (ASX: RUL) – resigned on
30 June 2020; Chairman of Sensera Limited (ASX: SE1) – resigned on 20 October
2020 and Chairman of OptiComm Ltd (ASX: OPC) – delisted on 23 November 2020.
Special responsibilities:
Member of the Audit and Risk Committee and Member of the People and Culture
Committee
Interests in shares:
None
Name:
Title:
Qualifications:
Experience and expertise:
Rebekah O’Flaherty (resigned on 9 April 2021)
Chief Executive Officer
B.Ec., MBA, GAICD
Extensive experience in technology, digital, product development, sales, marketing
and distribution across Asia Pacific, Europe and United States gained over 12 years
with Hewlett Packard, Telstra and most recently Origin Energy.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
None
Interests in shares:
112,000 ordinary shares
Interests in options:
2,867,647 options
Interests in rights:
509,175 performance rights
Name:
Title:
Qualifications:
Experience and expertise:
Roger Amos (resigned on 28 May 2021)
Independent Non-Executive Director
FCA, FAICD
Over 35 years of experience in finance, business and accounting. Previously a
partner at the international accounting firm KPMG for 25 years.
Other current directorships:
Non-Executive Director of REA Group Limited (ASX: REA) – since July 2006, NonExecutive Director of HT&E Limited (ASX: HT1) – since 30 November 2018 and
Chairman of Contango Asset Management Limited (ASX: CGA) – Director since
November 2017.
Former directorships (last 3 years): Deputy Chairman of Enero Group Limited (ASX: EGG) – Director from November
2008 to October 2018
Special responsibilities:
Chairman of the Audit and Risk Committee and Member of the People and Culture
Committee
Interests in shares:
83,970 ordinary shares
‘Other current directorships’ quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
‘Former directorships (last 3 years)’ quoted above are directorships held in the last 3 years for listed entities only and
excludes directorships of all other types of entities, unless otherwise stated.
Company secretary
Elizabeth Wang (B. Com, LLB, GradDipACG, MAICD) is the company secretary and legal counsel since 16 July 2020.
Elizabeth is an experienced company secretary and lawyer and has held various similar positions in the listed space for the
past decade.
7
3P Learning Limited
Directors’ report
30 June 2021
Dimitri Aroney, the Chief Financial Officer, was appointed as the company secretary for the period from 15 June 2020 to 16
July 2020.
Meetings of directors
The number of meetings of the Company’s Board of Directors (‘the Board’) and of each Board committee held during the
year ended 30 June 2021, and the number of meetings attended by each director were:
People and Culture
Committee
Attended
Held
Full Board
Attended
Held
Matthew Sandblom*
Samuel Weiss
Claire Hatton
Mark Lamont
Rebekah O’Flaherty**
Roger Amos***
2
21
21
21
16
19
2
21
21
21
17
19
1
3
3
3
3
3
Audit and Risk Committee
Attended
Held
1
3
3
3
3
3
4
4
4
4
4
4
4
4
4
4
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
*
**
***
Matthew Sandblom attended the People and Culture Committee meeting as an invitee.
Rebekah O’Flaherty attended the People and Culture Committee and Audit and Risk Committee meetings as an
observer. Rebekah was granted a medical leave of absence from one Board meeting prior to her resignation as a
director on 9 April 2021.
Roger Amos resigned as a director of the Company and stepped down from his committee positions on 28 May 2021.
The Board held 21 meetings over the course of the financial year. The increased frequency of meetings was due to
corporate activity, COVID-19 and careful monitoring to ensure continuous disclosure obligations were fulfilled. There were
also 4 scheduled Audit and Risk Committee meetings and 3 People and Culture Committee meetings held during the
financial year.
Shares under option
Unissued ordinary shares of 3P Learning Limited under option at the date of this report are as follows:
Grant date
Expiry date
23/08/2018
09/11/2018
23/08/2022
23/08/2022
Exercise
price
$1.75
$1.75
Number
under option
691,562
2,867,647
3,559,209
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of
the Company or of any other body corporate.
Shares under performance rights
Unissued ordinary shares of 3P Learning Limited under performance rights at the date of this report are as follows:
Grant date
Expiry date
22/11/2019
21/12/2020
06/09/2022
31/08/2023
Exercise
price
$0.00
$0.00
Number
under rights
641,760
293,989
935,749
No person entitled to exercise the performance rights had or has any right by virtue of the performance right to participate
in any share issue of the Company or of any other body corporate.
8
3P Learning Limited
Directors’ report
30 June 2021
Shares issued on the exercise of options
There were no ordinary shares of 3P Learning Limited issued on the exercise of options during the year ended 30 June
2021 and up to the date of this report.
Shares issued on the exercise of performance rights
There were no ordinary shares of 3P Learning Limited issued on the exercise of performance rights during the year ended
30 June 2021 and up to the date of this report.
Indemnity and insurance of officers
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a
director or executive, for which they may be held personally liable, except where there is a lack of good faith. During the
financial year, the Company paid a premium in respect of a contract to insure the directors and executives of the Company
against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the
nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of its audit
engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has
been made to indemnify Ernst & Young during the financial year and up to the date of this report.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
Non-audit services
Details of the amounts paid or payable of $12,875 (2020: $Nil) to the auditor for non-audit services provided during the
financial year by the auditor are outlined in note 27 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor’s behalf), is compatible with the general standard of independence for auditors imposed by
the Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 27 to the financial statements do not compromise the
external auditor’s independence requirements of the Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity
of the auditor; and
●
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants (including Independence Standards) issued by the Accounting Professional
and Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or
decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and
rewards.
Officers of the Company who are former partners of Ernst & Young
There are no officers of the Company who are former partners of Ernst & Young.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to ’rounding-off’. Amounts in this report have been rounded off in accordance with that
Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this directors’ report.
9
3P Learning Limited
Directors’ report – remuneration report
30 June 2021
Letter from the Chair of the People and Culture Committee
Dear Fellow Shareholder
On behalf of the Board, I am pleased to present our Remuneration Report for the financial year ended 30 June 2021
(‘FY21’). I think it’s important to acknowledge that we received a “first strike” for FY20 with 38.87% of shareholders recording
a “no’ vote against the adoption of the prior year’s Remuneration Report. This was a disappointing outcome for us, and one
that we have intended to rectify and learn from, to ensure we regain shareholders’ support this year. Feedback received
from shareholders and their advisors indicated that they were open to a change in the corporate structure of the Company
including in its leadership and that the progress of the Company’s strategic growth may have fallen short of some of the
shareholders’ expectations. Consequently, in FY21, 3P Learning underwent significant corporate activity which culminated
with the acquisition of Blake eLearning Pty Ltd (‘Blake’). As part of the acquisition and partly to address shareholder
concerns, the Board also initiated a number of changes to its composition and to the executive leadership team.
Managing Director and Chief Executive Officer transition
On 9 April 2021, Rebekah O’Flaherty, resigned as Managing Director and Chief Executive Officer (‘CEO’) of 3P Learning.
She stayed on until 10 June to assist with the integration/transition period. Rebekah left the business as a good leaver and
details of her termination payment is set out in the Remuneration Report. The Board has determined that Rebekah’s long
term incentive arrangements which existed prior to her termination will remain on-foot and will be tested and vest on their
original vesting date to the extent that their applicable vesting conditions have been met.
After the Company completed the acquisition of Blake, the Board appointed Jose Palmero to the role of Interim CEO upon
completion of the acquisition. On 24 August 2021, the Board determined that Jose Palmero, has given the Board confidence
that he is the best candidate for the CEO position. This combined with Jose’s longstanding working history with the
Executive Chairman, led the Board to resolve that Jose’s period as Interim CEO be waived and effective 25 August 2021,
Jose will become CEO on an ongoing basis. From FY22, Jose will be eligible to receive an annual short-term incentive
(‘STI’) cash payment with an ‘at target; value equivalent of 50% of his fixed annual remuneration, and a long-term incentive
(‘LTI’) equity package with an ‘at target’ value equivalent to 50% of his fixed annual remuneration.
Board changes
Matthew Sandblom was appointed as Chairman and Non-executive Director effective on 28 May 2021 and then
subsequently appointed Executive Chairman on 24 August 2021, to take effect from 25 August 2021 onwards due to his
involvement in the day-to-day operations of the Company. In relation to his appointment as Non-executive Chairperson,
Matthew requested that he receive a nominal fee of $1. Subsequent to his appointment as Executive Chairman effective 25
August 2021, the Company additionally entered into a Consultancy Agreement with Matthew for him to provide ad-hoc
strategic advisory services to the Company on an agreed hourly retainer basis up to a cap of $100,000 over the 12-month
fixed period of his consultancy. The Board will consider the appointment of a Senior Independent Director to lead the Board
in the absence of the Chair should a matter that triggers a conflict need to be addressed by the Board.
Roger Amos, resigned as a Non-executive Director and Chair of the Audit and Risk Committee, effective 28 May 2021.
Previous Chair, Sam Weiss, continues as Non-executive Director as well as Chair of the Audit and Risk Committee.
On 6 August 2021, the Board announced the appointment of two new Non-executive Directors to boost the Board’s skillset:
Allan Brackin, an experienced CEO and Chairman with a strong track record in scaling technology companies and Kathy
Ostin who has strong financial, audit and risk advisory background as well as an impressive track record of enabling
strategic and superior business outcomes. Following the release of the 30 June 2021 financial statements, your Board
intends that Kathy will become Chair of the Audit and Risk Committee moving forward. Your Board believes that these
independent director changes reflect a mix of skills, experience and personal attributes which enable it to fulfil its role
effectively.
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3P Learning Limited
Directors’ report – remuneration report
30 June 2021
Remuneration
We believe that 3P Learning’s remuneration approach provides good alignment between business objectives, shareholder
returns and executive remuneration which motivates and retains talented executives. Like most companies this year, our
business continued to face unprecedented complexities and challenges as a result of the COVID-19 pandemic, with multi
layered challenges globally including employee productivity, wellbeing, business continuity and motivation. On top of this,
the team at 3P Learning also experienced a year of transaction activity, and the consequential uncertainty that this entails.
In order to facilitate business and leadership continuity through a significant period of integration and next phase of growth
for the Company, the Board determined to pay retention bonuses to a number of executives. These cash retention bonuses
are conditional upon certain criteria being met. These included the Blake acquisition proceeding to completion and their staff
continuous employment. As the first criteria was met on 28 May 2021, the expense in connection with the retention
payments will be recognised over a 12-month period following the completion of the transaction, with the first tranche
vesting in November 2021 and the second tranche vesting in May 2022, subject to the relevant executives meeting certain
service criteria. The retention bonus awarded to KMP is set out in the Remuneration Report.
With the competitive nature of the labour market and the acquisition of Blake, we continue to sharpen our Remuneration
Philosophy which is as follows:
● equal to market for base salary – comparable to what an employee could receive in the market. Market to be determined
by securing relevant benchmarking data for each job family and location, and to be based on the 50th percentile as the
average base salary for a competent job holder;
● above market rates for short and long-term variable incentive compensation. Various incentives are the vehicle for
driving and rewarding performance and will be reviewed annually and compared to relevant market vehicles and
quantum.
● short-term incentives, based on annual Revenue and Earnings Before Interest, Tax, Depreciation and Amortisation
(‘EBITDA’) performance, and tied to an ambitious but achievable target and gated at 95% achievement of target; and
● Long-term incentives tied to Revenue and Earnings Per Share (‘EPS’) performance and tied to aspirational targets
which are greater than STI targets. Set over a three-year period and rewarded in the form of equity grants and gated at
95% of achievement of target. LTI awards range from 25-50% of base remuneration and are offered to senior
executives only.
In FY22 we plan to make changes in our Incentive Plans which include:
● the continued review of STI hurdles to ensure they are appropriately stretched as well as achievable. We plan to use the
hurdles of Revenue and Earnings Before Interest and Tax (‘EBIT’) and will move the weighting back to 50% Revenue
(from 70% weighting) and 50% EBITDA (from 30% weighting) to have an increased focus on profitable growth. The
other change will be that the threshold will increase from 95% to 100% of target;
● the continued improvement to the incentive structure for our Sales teams; and
● the structure of the LTI to remain unchanged. However, the Board will continue to assess options to increase share
ownership to a broader cohort of employees.
In FY21, the Company shifted to more flexible work arrangements as all staff became virtual, working from home across the
globe. The successful transition to working from home led the Company to fast track flexibility initiatives which has led to a
reassessment of how we utilise our office space, which has in turn, led to a reduction in our office footprint. With the Blake
eLearning acquisition, the ‘all roles flexible’ policy which we introduced from FY21, with everyone now having the ability to
work from anywhere and to work flexible hours in any one day, is currently under review as the business learns how to
optimise flexible working and ensure the wellbeing of all of our employees.
Diversity and inclusion
Diversity and inclusion are central to who we are at 3P Learning. In 2017, the Board set an aggressive target of 50% gender
diversity at a Board and senior leadership team level as well as in aggregate across the organisation globally. At an
aggregated level, women comprised 56% of our employees globally as at 30 June 2021. At year end at the Board level, due
to changes in the Board composition as a result of the Blake acquisition, 25% were female. At the senior leadership team
level (reporting directly to the CEO) and in the extended leadership team 50% and 54% are female respectively. We are
pleased to see that at least 50% of our internal promotions into leadership positions in FY21 have been female, which is a
reflection of our focus on building diversity in the leadership pipeline. Increasingly our focus is not purely on gender diversity
but also diversity of ethnicity, thought, experience and background to ensure we reflect our global customer base.
As we did last year, we partnered with ‘Culture Amp’, a global software company, which facilitates real time and regular
feedback insights from our employees. These insights underpin our employee engagement and experience roadmap, and
the analytics are already enabling a much more robust approach to measuring and tracking employee engagement. These
insights have already been critical to steer our approach to change management as a result of the integration of the 3P
Learning and Blake teams, as well as the important decisions we continue to address with the ongoing uncertainty
associated with the coronavirus in all of our markets.
11
3P Learning Limited
Directors’ report – remuneration report
30 June 2021
3P Learning’s business performance and future is underpinned by its incredible people and we can’t thank them enough for
their commitment and passion for the business. As we integrate 3P Learning with Blake and create a bigger, more scalable
business and navigate the challenges of a changing work world, aligning and adapting our people strategy, values, and
culture, is critical. Your Board believes in our plan to invest in the areas that will make a difference now and into the future.
We constantly review our approach at 3P Learning and I welcome your feedback so we can continue to evolve our
remuneration and governance framework.
We thank you for your continued support of 3P Learning.
Claire Hatton
Chair of People and Culture Committee
25 August 2021
Sydney
12
3P Learning Limited
Directors’ report – remuneration report
30 June 2021
Remuneration report (audited)
Overview
1. “First strike” on FY20 Remuneration Report
At the 30 June 2020 (‘FY20’) Annual General Meeting, 3P Learning Limited (‘3P Learning’, ‘3PL’ or the ‘Company’) recorded
a no vote of 38.87% on the resolution to adopt the FY20 Remuneration Report resulting in a “first strike”. Feedback received
from shareholders and their advisors indicated that they were open to a change in leadership and that the progress of the
Company’s strategic growth may have fell out of alignment with some of the shareholders’ expectations. Consequently, in
FY21, 3PL underwent significant corporate activity which culminated with the acquisition of Blake eLearning Pty Ltd (‘Blake’)
on 28 May 2021 to create a larger scale educational technology company which combined 3PL’s direct to school go-tomarket with Blake’s direct to consumer marketing as well as control of Blake’s intellectual property rights to its suite of
numeracy and literacy products. As part of the acquisition and partly to address shareholder concerns, the Board also
initiated a number of changes to its composition and to the executive leadership team of which are set out in more detail in
this report.
2. Preparation of Remuneration Report
The Directors of 3P Learning present the Remuneration Report (the ‘Report’) for the Company and its controlled entities (the
‘Group’) for the year ended 30 June 2021 (‘FY21’). This Report forms part of the Directors’ Report and has been audited in
accordance with section 300A of the Corporations Act 2001.
The Report details the remuneration arrangements for the Company’s key management personnel (‘KMP’) comprised of:
• Non-executive Directors (‘NEDs’)
• Executive directors and certain senior executives (collectively the ‘executives’).
3. Key management personnel (‘KMP’) changes
The KMP of the Group are those persons who, directly or indirectly, have authority and responsibility for planning, directing
and controlling the major activities of the Company and Group. The table below outlines the KMP of the Group and their
movements during the financial year.
Name
Non-executive Directors
Samuel Weiss
Roger Amos
Claire Hatton
Mark Lamont
Executive Director
Matthew Sandblom
Rebekah O’Flaherty
Position
Term as KMP
Non-executive Chairman (until 28
May 2021)
Non-executive Director (from 28 May
2021) *
Full financial year
Non-executive Director
Non-executive Director
Non-executive Director
Ceased 28 May 2021
Full financial year
Full financial year
Executive Chairman
Non-executive Chairman from 28 May
2021 to 24 August 2021
Ceased on 9 April 2021
Managing Director (‘MD’)/ Chief
Executive Officer (‘CEO’)
Other KMP
Jose Palmero
Chief Executive Officer (‘CEO’)
Dimitri Aroney
Chief Financial Officer (‘CFO’)
Interim CEO from 28 May 2021 to 24
August 2021
Full financial year
* As a result of Rebekah O’Flaherty resigning as Managing Director and CEO of 3PL, from 9 April 2021 to 28 May 2021, Samuel Weiss worked with the
senior executives to ensure that 3PL had strong management and leadership continuity until the completion of the acquisition of Blake. Whilst there
was no formal appointment of an interim CEO until acquisition, the Chairman acted in that capacity regarding all matters of corporate governance and
fiduciary responsibility.
13
3P Learning Limited
Directors’ report – remuneration report
30 June 2021
3PL appointed Jose Palmero as its new Interim CEO effective 28 May 2021, following Rebekah O’Flaherty’s resignation.
Jose was with the Pascal Press Group since 2006. During his time there he played a key role in growing and scaling the
Pascal Press Group, which includes Pascal Press, Blake Education, Blake Publishing, Video Education Australia, ClickView,
3PL (until its IPO in 2014) and Blake. He was a member of the 3PL Board from 2009 to 2014 prior to its IPO and has a
proven track record in the educational content, intellectual property and EdTech industries. Prior to Blake, Jose spent 10
years at the Copyright Agency Limited as the Group General Manager – Business Development and Strategic Planning,
Financial Controller.
On 24 August 2021, the Board determined that Jose Palmero remained the best candidate for the CEO position within the
business. Combined with his former longstanding working history with the Executive Chairman, the Board resolved that
Jose’s period as Interim CEO be waived. Effective 25 August 2021, Jose will become CEO on an ongoing basis subject to
termination by either party with six months’ notice (other than where the employment is terminated by 3PL for cause). No
other changes were made to his executive service agreement.
The focus of this Report is on the remuneration arrangements and outcomes for the KMP listed in the table above. It also
outlines information about the remuneration policy and arrangements for the Group’s senior executive team more broadly.
4. Overview of executive remuneration
Overview of 3P Learning remuneration policy and structures
The People and Culture Committee (‘P&CC’) is responsible for developing, reviewing, making recommendations and
providing assistance and advice to, the Board on the remuneration arrangements for the Company’s directors, its executives
and in relation to key employment policies and practices. The performance of the Group depends on the quality of its
directors and senior executives. The Company’s remuneration philosophy is to attract, motivate and retain high performance
and high quality talent.
The Group’s executive reward framework is based on objectives to:
• accelerate growth and profitability;
• align senior executive rewards with achievement of strategic objectives and the delivery of shareholder value; and
• provide competitive remuneration packages that recognise both individual and organisational performance.
The remuneration framework, and any potential changes to that framework, are assessed on the following guiding
principles:
• alignment to long term value creation;
• fairness for all stakeholders;
• simple to understand and administer;
• motivating to executives; and
• encouraging of executive ownership and accountability to the Company and its stakeholders.
The P&CC and the Board have structured an executive remuneration framework that is market competitive, that is designed
to retain and motivate the Company’s leadership team and sets a standard for transparency and good corporate
governance.
The determination of non-executive director and executive remuneration is separately addressed below.
During the reporting period the P&CC engaged external advisors, Ernst & Young, to provide advice on potential equity
grants to non-KMP levels of management as well as advice on retention payments made to certain executives as a result of
corporate activity. The total incurred cost for remuneration-related advice throughout the financial period was $12,875.
An agreed set of protocols were put in place to ensure that the recommendations would be free from undue influence from
KMP. The Board is satisfied that these protocols were followed and as such there was no undue influence.
Executive remuneration policy and structures
The Group’s compensation policy is designed to attract, retain and motivate executives. To accomplish this goal, executives
receive fixed remuneration and variable remuneration consisting of short-and long-term incentives. Executive remuneration
levels are reviewed annually by the P&CC and agreed by the Board to determine the optimal mix between fixed and ‘at risk’
incentive components for the CEO and other executives.
14
3P Learning Limited
Directors’ report – remuneration report
30 June 2021
The executive remuneration structure has three key components stated below, including what the Board has agreed is the
optimal mix between fixed and ‘at risk’ components for the CEO and other executives. Details for each of the individual
components in both FY20 and FY21 were as follows:
Variable or ‘At Risk’ Performance Based
Fixed
•
•
Fixed remuneration
Short-term incentive (‘STI’)
Attracts and retains high performance talent
Rewards current year performance
Fixed salary set by reference to
appropriate benchmark information
and experience of individuals
Includes superannuation and salarysacrifice non-monetary benefits
Long-term incentive (‘LTI’)
Rewards longer term sustainable
performance
•
25 – 50% of fixed remuneration at
target STI
•
25 – 50% of fixed
remuneration at target LTI
•
Increased focus on revenue
growth
•
Grant of performance rights
•
Weighting of group performance
targets:
revenue (70%);
underlying EBITDA (30%)
•
Encourage greater executive
ownership of the Company
Elements of executive remuneration
Fixed remuneration
The fixed remuneration component consists of base salary, superannuation and other non-monetary benefits and is
designed to reward the executives for their role and responsibilities, their skills, experience and qualification and individual
and group performance.
It is also determined with reference to available market data including benchmarks to comparable roles in similar companies
and is reviewed annually by the P&CC.
The fixed remuneration for the CEO is reviewed annually by the P&CC, with changes to be approved by the Board, following
consideration of performance against annual key performance indicators set at the start of the financial period.
Performance based remuneration
The ‘at risk’ performance-based remuneration components for executives align reward with the achievement of annual and
longer term objectives of the Group, and the optimisation of shareholder value over the short and long-term.
Short-term incentive (‘STI’)
The STI plan provides eligible executives with the opportunity to earn an annual incentive award which is delivered in cash.
The key objectives of the STI program are to drive and reward outstanding performance against annual strategic financial
and operational performance objectives, promote effective management of capital and position the Company to continuously
achieve in future years.
How is it paid?
100% of an STI award is paid in cash after the assessment of annual
performance.
How much can an eligible
executive earn?
Eligible executives have a target STI opportunity of up to 25% of fixed
remuneration while the CEO has a target STI opportunity of up to 50% of fixed
remuneration.
Target STI is designed to deliver sustainable performance and continued growth
by retaining talent and rewarding performance and is set in the beginning of the
financial period. Participants have the opportunity to earn up to 160% of the STI
target for achieving stretch performance (that is, above target performance against
the financial performance measures.
The STI award is gated at 95% achievement of the STI target (for example, where,
in the event of 95% of the defined target being achieved, half of the incentive will
be paid. Additionally, if more than 100% of the target is achieved, the executives
will be awarded a payment of more than 100% of the incentive).
15
3P Learning Limited
Directors’ report – remuneration report
30 June 2021
A summary of the target incentives is as follows:
Financial measure – level of performance
Below Threshold ( 100% of Target)
% of Target incentive
award*
0%
50%
100%
Up to 160%
* Pro-rata payments are made between these points
How is performance measured?
Financial performance measures are set for eligible executives based solely on
profit and revenue targets. The Board considers the financial measures to be
appropriate as they are aligned with the Group’s objective of delivering profitable
growth and improved shareholder returns.
For FY21, the weighting of the performance measures remains unchanged and is
aligned with our continued strategy to accelerate revenue growth and therefore
are closely tied to financial performance objectives.
A summary of the performance measures and weightings in the two prior years
are as follows:
Revenue
70%
70%
70%
CEO
KMP
Non-KMP executives
Underlying EBITDA
30%
30%
30%
When is it paid?
The STI award is determined after the release of the Company’s full financial year
results in August following a review of performance over the year against the STI
financial performance measures by the CEO (and in the case of the CEO, by the
Board). The Board approves the final STI award based on this assessment of
performance. The STI award is wholly paid in cash within four months after the
end of the performance period.
Deferral terms
Payment of STI is not deferred.
Long-term incentive (‘LTI’)
The objective of the LTI plan is to link the long-term reward for eligible executives with the creation of shareholder value
through the allocation of an equity award which are subject to specific performance conditions.
How is it paid?
Eligible executives may receive performance rights, which are governed by the
Company’s equity incentive plan rules. Once vesting conditions have been met,
ordinary shares will be issued to eligible executives.
How much can an eligible executive
earn?
An eligible executive has a target LTI opportunity of up to 25% of fixed
remuneration while the CEO has a target LTI opportunity of up to 50% of fixed
remuneration.
How is performance measured?
To date, all grants of performance rights have been weighted equally: revenue
and Earnings Per Share (‘EPS’). The Board considers the combination of
revenue and EPS thresholds an appropriate balance to ensure that ‘top line’
growth is pursued over the medium to long term, whilst growth in earnings and a
focus on shareholder value is maintained. Additionally:
• the revenue threshold has been adopted in light of the Group’s desire to
accelerate growth to achieve national and international expansion; and
• the EPS threshold provides a relevant indicator of shareholder value and a
clear target to drive and motivate senior executive performance.
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3P Learning Limited
Directors’ report – remuneration report
30 June 2021
Participants in the LTI plan can earn an LTI amount equal to a percentage of
their annual fixed remuneration in the range of 25% – 50%. The number of
performance rights awarded is calculated by dividing the dollar value of LTI
award opportunity by the value per right. The value per right is determined on a
face value basis using a 20-day VWAP.
A summary of the proportion of performance rights that may be awarded on
financial performance is determined based on the following schedule:
Performance level
% of target incentive
awarded
Below threshold
0%
Threshold
80%
Target
100%
Stretch
150%
When is it paid?
Performance rights granted under the LTI plan will only vest upon satisfaction of
certain vesting conditions. The performance thresholds are defined by the Board
and grants are made in August or September of each year following the end of
the financial year. Once the performance rights vest, subject to the terms of the
plan, the Company will issue or allocate the performance rights to the executives.
All performance rights have a three-year vesting (‘performance’) period. Any
awards which do not meet the performance conditions at the end of the
performance period will lapse.
All performance shares issued at the end of the three-year period will rank
equally in all respects with other ordinary shares in the Company (except in
regard to any rights attaching to such other shares by reference to a record date
prior to the date of their allocation or transfer).
Deferral terms
All performance rights will vest at the end of the three-year vesting period subject
to certain vesting conditions being met.
What happens if an eligible
executive leaves?
If an eligible executive ceases to be an employee of the Company before the
vesting date of the performance right by reason of resignation, dismissal, or any
other circumstance determined by the Board to be a ‘Bad Leaver’, all unvested
performance rights lapse on the date of cessation.
If an eligible executive ceases to be an employee of the Company before the
performance rights vest for any reason other than as a Bad Leaver (which may
include redundancy, retirement, death or total and permanent disability), the
Board may, in its discretion, determine that all or a portion of unvested
performance rights vest immediately or at some future time. If the Board does not
make a determination, performance rights will remain on-foot and are tested and
vest on the original vesting date to the extent that the applicable vesting
conditions have been met.
Is there a clawback provision?
Yes. Awards may also be forfeited if a ‘claw back’ event occurs during the
performance period. A claw back event includes circumstances where an
executive has engaged in fraud, dishonesty or gross misconduct, where the
financial results that led to the equity award are subsequently shown to be
materially misstated, or where the behaviour of a senior executive brings the
Company into disrepute or impacts the Company’s long term financial strength.
What happens if there is a change of
control?
Where a change of control event occurs prior to the performance rights vesting,
the Board may, in its discretion, determine whether all or a number of the
performance rights lapse at the time of the change of control event or at a future
point in time, or vest at the time of the change of control event or at a future point
in time.
Are eligible executives entitled to
dividends?
Performance rights do not carry a right to vote or to dividends or, in general, a
right to participate in other corporate actions such as bonus issues.
17
3P Learning Limited
Directors’ report – remuneration report
30 June 2021
5. Performance and executive remuneration outcomes in FY21
The actual remuneration earned by executives in FY21 against the prior year is set out below. This provides shareholders
with a view of the remuneration actually paid to executives for performance in FY21 and the value of the LTIs that vested
during the period.
Overview of company performance
The table below shows the Group’s performance history, the Company’s share price and the effect on shareholder value
over the past five financial years. Those results are not fully comparable due to changes in accounting standards and
change of accounting policy over that period. Results from FY19 and FY20 are restated due to change of accounting policy
regarding customisation and configuration costs incurred in relation to Software-as-a-Service arrangements. These
arrangements which were previously capitalised were restated and recognised as an expense in profit or loss. AASB 16
‘Leases’ was adopted on 1 July 2019 and effective for the FY20 year, and as such, results from FY16 to FY19 are not
prepared on the same basis.
Financial Year
2017
2018
2019
2020
2021
Revenue ($m)
Underlying EBITDA ($m)^
EPS (cents)
Share Price ($) 30 June
52.5
16.0
(5.11)
1.05
55.4
19.6
(13.42)
1.25
54.4
12.5*
1.69
0.98
55.0
9.5
0.37
0.86
57.4
10.4
(6.15)
1.31
* In this reporting period the result is the same as Statutory EBITDA
^ Underlying EBITDA is earning before interest, tax, depreciation and amortisation, impairment expense, restructure and integration costs, corporate advisory costs.
Executive remuneration
Details of statutory remuneration (Australian Accounting Standards (‘AAS‘)) for executive KMP, for the years ended 30 June
2021 and 30 June 2020, are set out below:
Executive KMP
Salary
Cash
STI
Other#
Post
employment
benefits
(Superannuation)
Accounting
value of LTI
awards and
additional
incentives
Termination
Payments
Other longterm benefit#
Total
Performance
related
Equity
based
$
$
$
$
$
$
%
$
%
%
2021
43,715
–
33,900
1,964
–
–
36,998
116,577
–
–
2020
–
–
–
–
–
–
–
–
–
–
–
1,441,957
13%
(9%)
920,017
25%
25%
J Palmero (CEO)**
R O’Flaherty (Former CEO)*
2021
594,551
325,000^
(21,342)
25,000
(131,252)
650,000^^
2020
625,000
–
37,617
25,000
232,400
–
D Aroney (Chief Financial Officer)
2021
265,684
28,865***
20,421
24,957
77,908###
–
7,717
425,552
11%
5%
2020##
87,291
–
7,909
8,293
–
–
4,631
108,124
–
–
*
Rebekah O’ Flaherty resigned as Managing Director and CEO on 9 April 2021. She stayed with the Company until 10 June 2021 to assist with the integration period
following the acquisition of Blake. Rebekah’s existing LTI entitlements remain on foot and will be tested and vest on their original vesting date. An FY21 LTI was not
recognised for Rebekah on the basis that this was not approved at the Group’s FY20 AGM. The reversal in the table above reflects lapsed of FY17 LTI.
** Jose Palmero was appointed interim CEO on 28 May 2021 upon the completion of the Blake acquisition and his remuneration reflects a pro-rata of his annual fixed
remuneration received during the financial period. On 24 August 2021, the Board waived the interim period and noted that effective 25 August 2021, Jose would be CEO on
an ongoing basis.
*** $28,865 has been accrued for Dimitri Aroney in relation to his potential FY21 STI award. At the time that this Remuneration Report is released, the Board is determining the
appropriate STI award given the impact of the acquisition of Blake to the FY21 STI hurdles.
^
In accordance with her executive service agreement at the time, Rebekah O’Flaherty received $325,000, being the value of her unpaid award under the Company’s shortterm incentive plan as a result of the Scheme Meeting being convened in relation to IXL Learning Inc. on 20 November 2021.
^^ Termination benefits included pay in lieu of notice.
#
Represents the net movement of annual leave and long service leave entitlement respectively.
##
Dimitri Aroney became a member of the KMP, effective 27 February 2020.
###
It includes accounting value of LTI awards of $19,159 and pro-rate of retention incentive $58,749.
In line with general market practice a (non-AAS) presentation of pay with respect to the FY21 and FY20 reporting periods
are provided in the table below, to give shareholders a more informative picture of actual remuneration outcomes that have
actually vested within the financial year.
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3P Learning Limited
Directors’ report – remuneration report
30 June 2021
Salary
Cash STI
Post
employment
benefits
(Superannuation)
$
$
$
$
$
$
2021
43,715
–
1,964
–
–
45,649
2020
–
–
–
–
–
–
2021
787,821*
325,000^
25,000
–
650,000^^
1,787,821
2020
625,000
–
25,000
71,000
–
721,000
265,684
–
24,957
–
–
290,641
87,291
–
8,293
–
–
95,584
LTI and
additional
incentives
vested
Termination
payments
Total
remuneration
J Palmero (CEO)##
R O’Flaherty (CEO) #
D Aroney (Chief Financial Officer)
2021
2020
#
##
^
^^
^
*
^
Rebekah O’ Flaherty resigned as Managing Director and CEO on 9 April 2021. She stayed with the Company until 10 June 2021 to assist with the integration period
following the acquisition of Blake eLearning. Rebekah’s existing LTI entitlements remain on foot and will be tested and vest on their original vesting date.
Jose Palmero was appointed interim CEO on 28 May 2021 upon the completion of the Blake eLearning acquisition and his remuneration reflect a pro-rata of his annual
fixed remuneration received during the financial period. On 24 August 2021, the Board waived the interim period and noted that effective 25 August 2021, Jose would be
CEO on an ongoing basis.
In accordance with her executive service agreement at the time, Rebekah O’Flaherty received $325,000, being the value of her unpaid award under the Company’s short
term incentive plan as a result of the Scheme Meeting being convened in relation to IXL Learning Inc. on 20 November 2021.
Termination benefits included pay in lieu of notice.
Dimitri Aroney became a member of the KMP effective 27 February 2020.
Salary included unused annual leave and unused long service leave
Short term incentives
STI for the 2021 financial year
The target STI opportunity for the financial year ended 30 June 2021 was an amount equal to 25% for eligible executives’
fixed remuneration and 50% in the case of the CEO.
Who are the participants of the STI?
There were four senior executive participants in the STI program for FY21 (then CEO, Rebekah O’Flaherty, CFO, Dimitri
Aroney, and two other C-level senior executives). Due to the acquisition on 28 May 2021, the Board are determining the
appropriate exercise of discretion to ensure that STI participants are not subject to a material disadvantage or obtain a
windfall gain as a result of the Blake transaction which may have impacted the appropriateness of the original STI hurdles.
Accordingly, at the time of this Report, nil amounts were paid to KMP with the exception of the former CEO who received
100% of her FY21 STI, in accordance with the terms of her employment agreement, as a result of the Scheme Meeting
being convened in relation to IXL Learning Inc., on 20 November 2021. Specific information relating to the STI component to
the CEO and CFO for FY21 is set out below.
Executive KMP
Position/title
Actual/accrued STI
payment
$325,000
Accrued STI
payment
% of Target
Incentive Award*
54.8%
0%
Rebekah O’Flaherty
Dimitri Aroney
CEO
CFO
Performance measure
FY21 – At Target
FY21 Performance
Revenue
Underlying EBITDA**
$60,170,000
$15,602,000
$57,448,000
$10,417,000
$28,865
% of target STI
payable
100%
0-38%
Weighting
70%
30%
* Based on the metrics outlined under ‘How much can an eligible executive earn?‘ above and pro-rated for that portion of the reporting period that the relevant executive was
employed.
** Underlying EBITDA represents earnings before interest, tax, depreciation, and amortisation, excluding corporate advisory costs, impairment expense, restructure and
integration costs.
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3P Learning Limited
Directors’ report – remuneration report
30 June 2021
Long term incentives
Who are the participants of the LTI?
The CEO and other C-level senior executives are eligible to participate in the LTI plan. The FY21 LTI plan for former
Managing Director and CEO, Rebekah O’Flaherty, did not receive shareholder approval at the 2020 Annual General
Meeting held on 21 January 2021. Subsequently, no LTI plan was granted to Ms O’Flaherty for the FY21 period. Jose
Palmero, who joined the Company on 28 May 2021 is eligible to participate in the FY22 LTI plan.
The Board determined that Rebekah’s cessation of employment constituted a ‘good leaver’ and that her long-term incentive
arrangements which existed prior to her termination remained on-foot and would be tested and vest on their original vesting
date to the extent that their applicable vesting conditions have been met.
As at 30 June 2021, there were four participants in the plan.
Performance conditions and disclosure of targets
The publication of prospective Revenue and EPS targets for future performance periods would require the disclosure of
commercially sensitive information. Accordingly, the Company will not disclose prospective targets but will disclose historic
targets and the Company’s performance against those targets. The hurdles for the options granted in FY20 will be disclosed
in August 2022 after the applicable performance period.
2019 LTI Award – Performance condition outcomes based on FY21 results
The first grant of options under the Company’s LTI plan was made in FY19, with performance conditions to be tested with
respect to the audited FY21 full year results. Based on the financial results for FY21, no LTI Awards vested during the
reporting period and the following outcomes are expected for LTI grants awarded in FY19:
Performance measure
Revenue
EPS
FY21
At Target
$73,000,000
$0.0640
FY21
Performance
Outcome
% of Target
Incentive Awarded
Weighting
$57,448,000
($0.0522)
Below threshold
Below threshold
0%
0%
50%
50%
The CEO and one other senior executive were the only executives that held FY19 LTI awards. Consequently, it is expected
that all of the 3,559,209 FY19 LTI options held by the two executives will lapse as a result of the FY21 performance
thresholds not being reached.
Additional payments awarded in FY21
During FY21, the Company completed the acquisition of Blake which effectively doubled the market capitalisation of the
Company. The Board appointed Jose Palmero to the role of CEO upon completion of the acquisition. In order to facilitate
business and leadership continuity through a significant period of integration and next phase of growth for the Company, the
Board determined to pay retention bonuses to certain executives. These cash retention bonuses were conditional upon
certain criteria being met. These included the Blake acquisition proceeding to completion and continuous employment. As
the first criteria was met on 28 May 2021, these retention payments will now vest over a 12-month period following the
completion of the transaction with the first tranche vesting in November 2021 and the second tranche vesting in May 2022,
subject to the relevant executives meeting certain service criteria. The retention bonus awarded to KMP is set out in the
table below:
Details of retention bonuses awarded to KMP in FY21
Name
Dimitri Aroney
Role
CFO
Total retention bonus
$300,000
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3P Learning Limited
Directors’ report – remuneration report
30 June 2021
6. Non-executive directors’ remuneration
Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of, the
directors. Non-executive directors have not been granted or issued equity as part of their remuneration. To preserve
independence and impartiality, non-executive directors do not receive performance related compensation and are not
eligible to participate in the Company’s equity incentive plan.
Non-executive directors’ fees and payments are reviewed annually by the P&CC. The Chairman’s fees are determined
independently to the fees of other non-executive directors based on comparative roles in the external market.
ASX listing rules require the aggregate non-executive directors’ remuneration be determined periodically by a general
meeting. The most recent determination was in 2017 when shareholders set the aggregate remuneration at $900,000 per
annum. Board and committee fees, as well as statutory superannuation contributions made on behalf of the non-executive
directors, are included in the aggregate fee pool.
The table below shows the structure and level of non-executive director fees (exclusive of superannuation) for the financial
years ended 30 June 2021 and 30 June 2020.
Fee applicable
Board
Audit and Risk Committee
People and Culture Committee
FY
Chair ($)
Member ($)
2021
2020
2021
2020
2021
185,000
185,000
20,000
20,000
95,000
95,000
10,000
10,000
20,000
10,000
2020
20,000
10,000
Details of the remuneration for the Chairman and independent non-executive directors for the financial years ended 30 June
2021 and 30 June 2020 are set out in the table below.
Name
Fees and
allowances
$
Postemployment
benefits
$
Total
$
M Sandblom (Non-executive Chairman from 28 May
2021 to 24 August 2021; Executive Chairman from 25
August 2021)*
2021
2020
1
–
–
1
–
S Weiss (Non-executive Chairman until 28 May
2021)**
2021
248,333
23,592
271,925
2020
205,000
19,475
224,475
R Amos
2021
114,583
10,885
125,468
2020
125,000
11,875
136,875
2021
125,000
11,875
136,875
2020
125,000
11,875
136,875
2021
115,000
10,925
125,925
2020
115,000
10,925
125,925
2021
2020
602,916
570,000
57,277
54,150
660,193
624,150
#
C Hatton
M Lamont
Total
* As an incoming substantial shareholder of the Company, Mr Sandblom requested that he receive a nominal fee of $1 in relation to his appointment as
Chairman and Non-executive Director effective from his commencement on 28 May 2021.
** In mid-May 2021, the Board (excluding Mr Weiss) approved a one-off additional payment of $50,000 to Mr Weiss to reflect his significant
responsibilities and duties leading up to the completion of the Blake acquisition and for the period in which he acted in the capacity of an interim CEO
between 12 April 2021 to 28 May 2021 as a result of Ms Rebekah O’Flaherty’s resignation on 9 April 2021. The additional payment was made on 15
June 2021.
#
Mr Amos resigned on the 28 May 2021.
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3P Learning Limited
Directors’ report – remuneration report
30 June 2021
7. Service agreements
Non-executive directors do not have fixed term contracts with the Company. On appointment to the Board, all non-executive
directors enter into a service agreement with the Company in the form of a letter of appointment. The letter summarises the
Board policies and terms, including compensation. Non-executive directors retire by whichever is the longer period: the third
annual general meeting following their appointment or the third anniversary date of appointment but may then be eligible for
re-election.
Subsequent to 30 June 2021, the Board determined that the Chairman, Matthew Sandblom, has an active role in the day-today management of the Company particularly in the areas of Strategy and Product. Consequently, the Board agreed that
Matthew’s title be changed to ‘Executive Chairman’ on 24 August 2021 as this better reflects his current roles and
responsibilities. Details of Matthew’s service agreement is provided below:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Matthew Sandblom
Educational Technology Strategic Advisor
25 August 2021
12 months with option to extend
Matthew will receive a fee of $300 per hour plus GST up to $100,000 per annum
The fee is in consideration for providing company strategy, product strategy and
education technology strategy advice. Either party may terminate the service
agreement by giving 60 days’ notice in writing or earlier termination for a material
breach of contract.
Remuneration and other terms of employment for executives are formalised in employment agreements. The CEO and CFO
do not have a fixed term contract with the Company. Details of the CEO’s and CFO’s employment agreements as at 30
June 2021 are as follows:
Name:
Jose Palmero
Title:
Interim CEO (from 28 May 2021 to 24 August 2021; CEO from 25 August 2021
onwards)*
Agreement commenced:
28 May 2021
Term of agreement:
Open ended
Details:
Jose will receive a fixed annual remuneration of $525,000, inclusive of statutory
superannuation. Jose will be eligible to receive an annual STI package with a target
STI of 50% of his fixed annual remuneration, as determined by the Board. Payment
of the cash bonus will depend on the Group’s performance and Jose’s achievement
of certain key performance indicators or at the discretion of the Board. As part of a
LTI package, Jose may be entitled to receive an equity-based award under the LTI
plan with a value equivalent to 50% of his fixed annual remuneration. Either party
may terminate the employment contract by giving six months’ notice in writing. The
Company may terminate Jose’s employment contract by making a payment in lieu
of notice. In the event of serious misconduct or other specific circumstances
warranting summary dismissal, the Company may terminate Jose’s employment
contract immediately by notice in writing and without payment in lieu of notice.
Name:
Title:
Agreement commenced:
Term of agreement:
Details:

Dimitri Aroney
CFO
1 April 2020
Open ended
Dimitri will receive an annual fixed remuneration of $307,500 inclusive of statutory
superannuation. Dimitri will be eligible to receive an annual STI with a target STI of
25% of his fixed annual remuneration, as determined by the Board. Payment of the
cash bonus will depend on the Group’s performance and Dimitri’s achievement of
certain key performance indicators or at the discretion of the Board. As part of a LTI
package Dimitri may be entitled to receive an equity-based award under the LTI
plan with a value equivalent to 25% of his fixed annual remuneration. Either party
may terminate the employment contract by giving three months’ notice in writing.
The Company may terminate Dimitri’s employment contract by making a payment in
lieu of notice. In the event of serious misconduct or other specific circumstances
warranting summary dismissal, the Company may terminate Dimitri’s employment
contract immediately by written notice and without payment in lieu of notice.
On 24 August 2021, the Board resolved that Jose period as Interim CEO be waived and that effective 25 August 2021, he would become CEO on an
ongoing basis subject to termination by either party with six months’ notice (other than where the employment is terminated by 3PL for cause).
22
3P Learning Limited
Directors’ report – remuneration report
30 June 2021
8. Share-based compensation
Issue of shares
No shares were issued to directors or any other key management personnel as part of compensation during the year
ended 30 June 2021.
Options
No options were issued to KMP as part of compensation during the year ended 30 June 2021. No non-executive directors
held options during the year. No options (comprising of former year option plans) vested with nil intrinsic value during the
financial year ended 30 June 2021. The Company note that 2,644,509 options lapsed during the financial year ended 30
June 2021.
Performance rights
The Company issued 93,281 new performance rights to KMP during the year ended 30 June 2021 and no additional
performance rights have been granted to any KMP since the end of the reporting period. No performance rights have
been issued to non-executive directors to date.
Accounting
Accounting
Name
Number
Exercise price
Vesting date
Expiry date
grant date
fair value
10 December
Dimitri Aroney
93,281
$1.31
$0
August 2023
August 2023
2020
9. Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each director and other members of key
management personnel of the Group, including their personally related parties, is set out below:
Balance at the
start of the year
Received as
part of
remuneration
Samuel Weiss
637,277
–
Claire Hatton
41,526
–
Mark Lamont
–
–
Disposals
/other
Balance at the
end of the yea
–
637,277
–
–
41,526
–
–
Additions
Ordinary shares
Non-executive Directors
Executive KMP
Matthew Sandblom

220,000
137,000,000
137,220,000
Jose Palmero*
–
–
–
–
Dimitri Aroney
7,121
–
–
–
7,121
905,924
–
137,000,000
–
137,905,924
Jose Palmero became a KMP on 28 May 2021. Although Jose’s interests do not trigger the disclosure thresholds required for the above table, the
Company notes that Jose is a beneficiary and also acts as trustee of a trust which is a 50% unitholder in BEL Unit Trust. Pascal Education Services
Pty Ltd as trustee for the BEL Unit Trust is a shareholder of 13,700,000 ordinary shares of 3PL (issued as consideration to the vendors of Blake
eLearning Pty Ltd (‘Blake’) in connection with the Company’s acquisition of Blake on 28 May 2021). For transparency, Jose has an economic
interest in 6,850,000 3PL shares.
23
3P Learning Limited
Directors’ report – remuneration report
30 June 2021
Other share-based holdings
The number of performance rights and options held during the financial year by each director and other members of key
management personnel of the Group, including their personally related parties, is set out below:
Rebekah**
O’Flaherty
Dimitri Aroney

**
Options
Performance
rights
Options
Performance
rights
Balance at the
start of the
year
Granted
during the
year
Vested
Expired /
forfeited /
lapsed
Balance at the
end of the
year
5,512,156
–
–
(2,644,509)*
2,867,647
509,175
–
–
–
509,175
–
–
–
–
–
–
93,381
–
–
93,381
2,644,509 options lapsed in FY21 with respect to FY18 LTI plan.
Rebekah O’Flaherty ceased to be a member of KMP 9 April 2021
10. Other transactions with KMP and their related parties
Payment for publishing and distribution services
The Group entered into a Publishing and Distribution Agreement with Kalaci Pty Ltd (trading as Pascal Press) (‘Kalaci’), a
company which both Matthew Sandblom and Jose Palmero have a beneficial economic interest. Under the agreement,
Kalaci receives a share of the net receipts received by Blake from orders placed by Blake customers and Blake receives a
share of the net receipts received by Kalaci from its sales of various Blake products to Kalaci customers. The terms of the
agreement were negotiated on arm’s length terms at the time of the Blake acquisition and is subject to normal
publishing terms and conditions. $11,076 is payable as at 30 June 2021.
Payment for transition services
The Group entered into a Transition Services Agreement with Kalaci, as part of the acquisition of Blake for a period of up
to 12 months for the purpose of sharing common administrative costs for a limited period of time following completion of
the Blake acquisition. The monthly costs under the agreement are $49,733. Any additional costs incurred are allocated on
a pro-rata basis. The agreement provides for an option to extend further if required to prevent any material disruption to
the business. $67,884 is payable as at 30 June 2021.
Lease of office premise from Matthew Sandblom
The Group leases an office premise at 655 Parramatta Road, Leichhardt NSW 2040, from Matthew Sandblom. The lease
term is 12 months with an option to renew for a further year. The terms of the lease were negotiated on arm’s length terms
at the time of the Blake acquisition and is subject to normal commercial terms and conditions. An independent valuation
was completed at the time to determine the market rent of $350,000 per annum (excluding monthly outgoings) and further
ensures the lease is on arm’s length terms and at comparable market rate. $33,167 was paid in June 2021.
Payment for software licence fees
The Group has a commercial agreement with ClickView, a company that operates a video technology platform and of
which Matthew Sandblom is a shareholder. Under the agreement, the Group is granted a licence to use ClickView’s video
storage, management, and delivery technology to deliver 3PL products. This arrangement was on foot prior to the
acquisition and remain ongoing on normal commercial terms and conditions. $15,732 is accrued as at 30 June 2021 for
usage between 1 April 2021 and 30 June 2021.
Payment for consultancy services from Matthew Sandblom
The Group has a consultancy agreement with Pascal Educational Services Pty Limited, a company which Matthew
Sandblom is a director and shareholder. Under the consultancy agreement, the Group will pay an hourly retainer of $300
per hour up to a cap of $100,000 for strategic advisory services over the consultancy period. This agreement came into
effect on 25 August 2021 and will be for a period of 12 months.
This concludes the remuneration report, which has been audited.
24
3P Learning Limited
Directors’ report – remuneration report
30 June 2021
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
Matthew Sandblom
Executive Chairman
25 August 2021
Sydney
25
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Auditor’s Independence Declaration to the Directors of 3P Learning Limited
As lead auditor for the audit of the financial report of 3P Learning Limited for the financial year ended
30 June 2021, I declare to the best of my knowledge and belief, there have been:
a.
No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b.
No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of 3P Learning Limited and the entities it controlled during the financial
year.
Ernst & Young
Renay Robinson
Partner
25 August 2021
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
26
3P Learning Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2021
Consolidated
Note 30 June 2021 30 June 2020
$’000
$’000
(Restated)*
6
57,448
54,955
115
148
270
(34,971)
(2,450)
(9,329)
(4,818)
(5,476)
(1,139)
(3,656)
(2,534)
(654)
(4,077)
(237)
(35,010)
(7,783)
(197)
(1,136)
(3,701)
(2,066)
(1,061)
(2,653)
(284)
(11,778)
1,482
2,408
(965)
(9,370)
517
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
596
(213)
Other comprehensive income for the year, net of tax
596
(213)
Total comprehensive income for the year
(8,774)
304
(Loss)/profit for the year is attributable to:
Non-controlling interest
Owners of 3P Learning Limited
(1)
(9,369)
517
(9,370)
517
(1)
(8,773)
304
(8,774)
304
Revenue
Other income
Interest revenue calculated using the effective interest method
Expenses
Employee benefits expenses
Employee benefits expenses – restructure and integration
Depreciation and amortisation expenses
Impairment of assets
Professional fees – corporate advisory costs
Professional fees – other
Technology costs
Marketing expenses
Occupancy expenses
Administrative expenses and foreign exchange
Finance costs
7
7
7
7
(Loss)/profit before income tax benefit/(expense)
Income tax benefit/(expense)
8
(Loss)/profit after income tax benefit/(expense) for the year
Other comprehensive income
Total comprehensive income for the year is attributable to:
Non-controlling interest
Owners of 3P Learning Limited
Cents
Basic earnings per share
Diluted earnings per share
37
37
Cents
(6.15)
(6.15)
* Refer to note 4 for detailed information on Restatement of comparatives.
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
27
0.37
0.37
3P Learning Limited
Statement of financial position
As at 30 June 2021
Consolidated
Note 30 June 2021 30 June 2020 1 July 2019
$’000
$’000
$’000
(Restated)* (Restated)*
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Lease receivables
Other assets
Total current assets
9
10
24,906
11,655
282
739
2,163
39,745
27,083
9,520
565
1,591
38,759
25,766
9,000
515
1,812
37,093
652
207,653
1,612
538
352
5,304
216,111
651
14,213
2,841
1,193
48
6,753
25,699
1,042
14,374
3,886
1,716
17
6,584
27,619
255,856
64,458
64,712
16
17
18
19
8
20
11,874
35,631
1,627
2,038
4,323
55,493
8,181
23,877
1,615
161
1,778
35,612
7,046
24,310
14
1,574
389
1,479
34,812
17
3,170
1,497
854
5,521
3,292
3,229
715
7,236
3,356
4
4,717
755
8,832
Total liabilities
61,014
42,848
43,644
Net assets
194,842
21,610
21,068
216,589
8,450
(30,207)
194,832
10
34,494
7,954
(20,838)
21,610
–
34,374
8,049
(21,355)
21,068
–
194,842
21,610
21,068
11
12
Non-current assets
Plant and equipment
Intangibles
Right-of-use assets
Lease receivables
Other assets
Deferred tax
Total non-current assets
13
14
15
11
12
8
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Lease liabilities
Income tax payable
Provisions
Total current liabilities
Non-current liabilities
Contract liabilities
Borrowings
Lease liabilities
Provisions
Total non-current liabilities
19
20
Equity
Issued capital
Reserves
Accumulated losses
Equity attributable to the owners of 3P Learning Limited
Non-controlling interest
21
22
Total equity
* Refer to note 4 for detailed information on Restatement of comparatives.
The above statement of financial position should be read in conjunction with the accompanying notes
28
3P Learning Limited
Statement of changes in equity
For the year ended 30 June 2021
Consolidated
Balance at 1 July 2019
Issued
capital
$’000
(17,799)
–
24,624
–
–
68
–
68
–
–
(3,624)
–
(3,624)
34,374
8,049
(21,355)
–
21,068
–
–
517
–
517
–
(213)
–
–
(213)
–
(213)
517
–
304
120
–
(71)
189
–
–
49
189
34,494
7,954
(20,838)
–
21,610
NonAccumulated controlling
losses
interest
$’000
$’000
Total equity
$’000
Total comprehensive income for the year restated
Balance at 30 June 2020
Total equity
$’000
8,049
Profit after income tax expense for the year
Other comprehensive income for the year,
net of tax -restated
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction costs
(note 21)
Share-based payments (note 36)
Reserves
$’000
34,374
Adjustment on initial adoption of AASB 16
‘Leases’
Adjustment for change in accounting policy
(note 4)
Balance at …