RECKON LIMITED - Annual Report 2017

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ABN 14 003 348 730

Reckon Limited Annual Report

for the Financial Year Ended 31 December 2016

4 Message to Shareholders from the Chairman and Group CEO
6 Directors’ Report
16 Remuneration Report
46 Auditor’s Independence Declaration
47 Independent Auditor’s Report
52 Directors’ Declaration
53 ��
54 ��
55 Consolidated Statement of Financial Position
56 Consolidated Statement of Changes in Equity
58 Consolidated Statement of Cash Flows
59 Notes to the Financial Statements
96 Additional Information as at 15 March 2017

Message from the Chairman and Group CEO

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To repeat what was articulated last year, we committed to three pillars of strategy:

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expanding products and territory, and
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Non IFRS
Group 2016 2015 Amount Change % Change
�� 7%
Underlying EBITDA �� 3%
Underlying NPAT �� 8%
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In the Reckon APS part of our Practice Management Group we continue to add to our list of blue chip accounting ��

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Shareholders are urged to refer to our roadshow slides which we presented to the market in early February for the detail ��

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At the date of that announcement it was proposed to de-merge Reckon’s Document Management segment ��

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It is our opinion that this opportunity can help to:

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Ian Ferrier Chairman

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Clive Rabie Group CEO

Directors’ Report

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Ian Ferrier AM FCA

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Greg Wilkinson

��

�� appointed to the position of Deputy Chairman in February 2006 and became a member of the board of the listed ��

Christopher Woodforde B Comm LLB

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Clive Rabie

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Directors’ Report (continued)

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�� larger sized businesses and personal wealth management software branded as Reckon One and Reckon Accounts ��

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Business Group

�� Alongside cloud, hosted and desktop accounting software the range includes a payroll and point of sale solution, as ��

��

Document Management Group

��

�� source and automatically enter it into their practice management system for accounts and tax return preparation ��

The Reckon Elite product suite includes tax return preparation tools, practice management tools and related solutions ��

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Directors’ Report (continued)

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Results of Operations

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2016 2015
$m $m
IFRS EBITDA ��
New market expenditure ��
EBITDA - Underlying business ��
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2016 2015
$m $m
IFRS NPAT
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attributable to owners of the parent
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NPAT - Underlying business ��
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Directors’ Report (continued)

Revenue Drivers

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�� across the Reckon APS suite and good growth in large size customers in both Reckon APS and Reckon nQueue in ��

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Cash Flow

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Dividends

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Directors’ Report (continued)

�� for Future Financial Years

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�� business the company announced on 17 March 2017 a proposal to de-merge Reckon’s Document Management ��

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On 17 March 2017 the company announced a proposal regarding the de-merger of the Document Management ��

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Remuneration Report (Audited)

1 Introduction

�� also be noted that externally fuelled speculation about the Company and its future during the late FY15 year led to ��

�� Report and of the Company’s remuneration practices, which are seen to be causing the strikes, as it did in the prior �� to split the role of Chairman of the Board from Chair of the Remuneration Committee and hence Mr Ferrier, the �� through the new Chair has spent time understanding the concerns of external stakeholders including shareholder �� current circumstances and future needs of the Company, to gain a complete understanding of the issues that need ��

�� communication to the market regarding the setting of performance conditions in the Company’s circumstances, as ��

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Non-executive Directors

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Chairman of the Board since 1 July 2015
Mr Greg Wilkinson, director since 19 July 1999
Deputy Chairman since 1 February 2006
Risk and Audit Committee member since 1 February 2010
Remuneration Committee member since 1 December 2011
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Remuneration Committee Chair since 1 January 2016
��

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�� February 2006
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The following outlines important context for the decisions that were made during FY15 to determine remuneration for ��

Remuneration Report (Audited) (continued)

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�� parts of the Company, it is acknowledged that it must be a consideration when communicating with stakeholders,
�� important,
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��

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Following the 2015 AGM it was brought to the attention of the Remuneration Committee that some stakeholders, ��

�� for KMP:

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�� common market practices,
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�� standard, and tailored practices, so as to best meet the needs of the Company in its current circumstances, ��
�� relation to Reckon’s Remuneration Report disclosure,
The consultant recognised that there were many areas of the Company’s Remuneration Report that were ��
�� the Company’s remuneration policies, procedures, and practices with more clarity, and
�� changes to disclosure,

��
��
- ��
- ��
�� response to stakeholder feedback,
��
- ��
  - One tranche with a Measurement Period from 1 January 2016 to 31 December 2016, linked to the EPSG measure only, and
  - One tranche with a Measurement Period from 1 January 2017 to 31 December 2018, linked to EPSG, and
  - One tranche with a Measurement Period from 1 January 2017 to 31 December 2018, linked to the ��
    - ��
    - Refer to the diagram on page 27,
- �� phasing out through FY16 and FY17 it was deemed necessary to modify the Measurement Periods ��

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Remuneration Report (Audited) (continued)

4 Overview of Reckon’s Remuneration Governance Framework ��

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Remuneration Committee Members,
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Authority for remuneration matters rests with the Remuneration Committee which reports to the board and makes ��

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As at the end of FY16 the Remuneration Committee was composed of:

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The Remuneration Committee operated substantially in accordance with the aims and aspirations of Principle 8 of ��

�� remuneration policies are in place which are designed to meet the needs of the Company and to enhance corporate ��

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�� insider trading restrictions that are a legal requirement under the Corporations Act, as well as conditions associated ��

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Remuneration should be composed of:
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TRPs ought to be structured with reference to market practices and the circumstances of the Company at the time,
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�� the short and long term,
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Exceptions will be managed separately such as when particular talent needs to be retained or there are ��
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Remuneration Report (Audited) (continued)

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�� capacity as directors and as members of committees, and may be summarised as follows:

Remuneration may be composed of:
��
��
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Committee fees do not form part of the NED remuneration policy because at present the workload of the Board is shared equitably amongst its members,
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During the FY16 reporting period the following fees were applicable:

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Function Role Fee Including Super
Chair $123,188
Main Board
Member ��
Chair ��
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Member ��
Chair ��
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Member ��
Chair ��
Other Committee
Member ��
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As at the commencement of FY17, the following fees apply:

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Function Role Fee Including Super
Chair $126,651
Main Board
Member ��
Chair ��
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Member ��
Chair ��
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Member ��
Chair ��
Other Committee
Member ��
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STI should be settled in part or whole in the form of cash, and if appropriate at the time, a portion may be ��
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If part of the STI is to be settled in the form of equity,
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Further:

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The Measurement Period should be three years,
�� This is necessary to align the Company’s future equity practices with accepted market practice in a way ��
��
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�� response to stakeholder feedback,

Remuneration Report (Audited) (continued)

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�� rights in the form of cash is unusual, it is trusted that shareholders understand the need to do so in these limited cases,
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Short Term Incentive (STI)
Aspect ��
Purpose ��
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Measurement
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Period
Award ��
Opportunities ��
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10% and 21% of the Base Package for target performance with a stretch opportunity of up to
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Comments
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Comments
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Weighting and ��
Performance • ��
Goals • EBITDA,
• EPS,
• ��
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Comments
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Award Calculations are performed following the end of the Measurement Period and the audit of
Determination and ��
Payment
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Cessation of ��
Employment ��
During a
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Measurement
��
Period
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Change of Control The Board has discretion to terminate the STI for the Measurement Period and make pro-rata
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allow the plan to continue for the Measurement Period or make no interim awards and allow the
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Plan Gate and ��
Board Discretion ��
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that such discretion will only be applied in future when it would be substantially inappropriate not
to do so, due to an anomaly during the Measurement Period, or because of exceptional
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Remuneration Report (Audited) (continued)

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Fraud, Gross ��
�� misconduct in relation to the Company then all entitlements in relation to the Measurement
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Long Term Incentive (LTI)
Aspect ��
Purpose ��
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to create alignment with the interests and experiences of shareholders and to modulate the cost
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Measurement
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Period
Form of Equity ��
• ��
• ��
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�� by an absolute number of shares only based on the Remuneration Committee’s intention to ��

Measurement Period

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A diagram showing the transition arrangements follows:

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Weighting FY16 FY17 FY18
Tranches <- Start of performance period ��
50% Tranche 1 Tranche 1 EPSG measurement period
Tranche 2 EPSG
25% Tranche 2
measurement period
Tranche 3 EPSG
25% Tranche 3
measurement period
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Comments

��

Remuneration Report (Audited) (continued)

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Except as indicated below, a participant must remain employed by the Company during the ��

�� tranche 1 vesting in relation to earnings per share growth (EPSG) , and tranche 2 and tranche 3 vesting in relation to EPSG and relative TSR ��

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Performance Level Annualised EPS Growth Vesting
Below Threshold < Budget 0%
Threshold = Budget 75%
Between Threshold and Target �� Pro-rata
Target 110% of Budget 100%
Relative TSR of the
Company as % of the S&P
/ ASX 300 Accumulation
Performance Level Index Vesting
Below Threshold < Index 0%
Threshold �� 75%
Between Threshold and Target �� Pro-rata
Target 110% of Index 100%
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Comments

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While ranked TSR was considered, it was not possible to identify a comparator group of
companies that was statistically robust enough to be meaningful and the Board was concerned
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For FY17 the weighting upon the TSR measure and the weighting upon EPS will be 50% and 50%
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Retesting The Plan Rules do not contemplate retesting and therefore retesting is not a feature of the
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Discretion ��
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Amount Payable for ��
Performance
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Rights
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Performance ��
Rights form of ordinary Company shares, except where the participant necessarily participates in the
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Dealing ��
Restrictions on ��
Shares
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Remuneration Report (Audited) (continued)

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Cessation of ��
Employment ��
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Change of Control ��
of the Company ��
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It is the Remuneration Committee’s belief that the addition of these performance shares has added to the balance ��

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�� according to statutory disclosure requirements and applicable accounting standards:

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Base Package STI LTI
Total
Superannuation Other
Name Role(s) Year Salary Remuneration
Contributions ��
% of % of % of Package (TRP)
Amount Amount Amount
TRP TRP TRP
2016 $786,250 $35,000 $0 $821,250 76% $297,580 27% �� 3% $1,086,479
��
��
Rabie
2015 $747,925 $35,000 $0 $782,925 61% $303,899 24% $188,784 15% $1,275,608
Group 2016 $452,275 $35,000 $0 $487,275 71% $137,395 20% $65,329 9% $689,999
Mr Chris CFO
�� Group 2015 $435,850 $34,400 $0 $470,250 72% $139,909 21% $43,387 7% $653,546
CFO
General
�� 2016 $360,000 $34,200 $0 $394,200 72% $91,497 17% $62,998 11% $548,695
Mr Myron CoSec
�� General
�� 2015 $350,000 $33,250 $0 $383,250 75% $92,664 18% $33,505 7% $509,419
CoSec
�� 2016 $408,000 $30,000 $5,632 $443,632 75% $91,639 16% $50,855 9% $586,126
Mr Sam
Allert
�� 2015 $375,150 $30,000 $6,833 $411,983 77% $93,693 18% $19,332 4% $525,008
COO 2016 $250,000 $23,750 $0 $273,750 80% $28,950 8% $41,518 12% $344,218
Mr Daniel
Rabie
COO 2015 $215,000 $20,425 $0 $235,425 87% $28,837 11% $5,465 2% $269,727
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�� Remuneration Report to assist shareholders to obtain a more complete understanding of remuneration as it relates ��

��

Remuneration Report (Audited) (continued)

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Board Committee Other Equity Termination
Name Role(s) Year Superannuation Total
Fees Fees �� Grant ��
Independent,
�� 2016 $112,500 $0 $10,688 $0 $0 $0 $123,188
Mr Ian Chairman
Ferrier Independent,
�� 2015 $104,000 $0 $9,880 $0 $0 $0 $113,880
Chairman
��
Director and
2016 $107,500 $0 $10,212 $0 $0 $0 $117,712
Deputy
Mr Greg Chairman
Wilkinson ��
Director and
2015 $104,000 $0 $9,880 $0 $0 $0 $113,880
Deputy
Chairman
Independent
�� 2016 $95,000 $0 $9,025 $0 $0 $0 $104,025
Mr Chris Director
Woodforde Independent
�� $45,000 $0 $4,275 $0 $0 $0 $49,275
Director
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The disclosures required under the Corporations Act and prepared in accordance with applicable accounting ��

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STI LTI
Total
Base
Fixed STI LTI Remuneration
Package
Position Incumbent % Target % Target % Target % Target % Package at
Including TRP of Base STI TRP of Base LTI TRP Target
Super Package Amount Package Amount Performance
��
�� $821,250 62% 39% $324,000 24% 23% $189,000 14% $1,334,250
Rabie
Mr Chris
Group CFO $487,275 68% 31% $151,500 21% 17% $81,500 11% $720,275
��
General
Mr Myron
�� $394,200 72% 25% $98,000 18% 13% $53,000 10% $545,200
��
CoSec
MD
�� Mr Sam
$443,632 77% 23% $100,000 18% 8% $35,000 6% $578,632
Accounting Allert
��
Mr Daniel
COO $273,750 88% 11% $30,000 10% 2% $5,000 2% $308,750
Rabie
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Remuneration Report (Audited) (continued)

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Grant Value of
Non-deferred
Base Package STI Awarded for Deferred cash Previous Equity Actual Total
Including Super the Financial STI paid out for Grants that Remuneration
the FY Vested for the
Name Role(s) Year Year Package
FY
(TRP)
% of % of % of % of
Amount Amount Amount Amount
TRP TRP TRP TRP
�� 2016 $821,250 72% $189,997 17% $129,259 11% $0 0% $1,140,506
��
Rabie
2015 $782,925 72% $180,963 17% $116,617 11% $12,747 1% $1,093,252
Mr Chris Group CFO 2016 $487,275 73% $81,930 12% $64,390 10% $34,890 5% $668,485
�� Group CFO 2015 $470,250 72% $78,034 12% $59,361 9% $44,744 7% $652,389
General
�� 2016 $394,200 77% $53,280 10% $43,086 9% $22,690 4% $513,256
CoSec
Mr Myron
��
General
�� 2015 $383,250 76% $50,746 10% $40,751 8% $29,098 6% $503,845
CoSec
MD
��
2016 $443,632 79% $80,422 14% $19,149 3% $14,984 3% $558,187
Accounting
��
Mr Sam
Allert
MD
��
2015 $411,983 78% $76,598 15% $15,041 3% $19,215 4% $522,837
Accounting
��
Mr Daniel COO 2016 $273,750 89% $25,132 8% $4,787 2% $2,142 1% $305,811
Rabie
COO 2015 $235,425 89% $23,937 9% $5,014 2% $0 0% $264,376
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�� accordance with the requirements of the Corporations Act:

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Date Revenue ($m) owners of the parent attributable to Share Price Change in Share Price Dividends
($m)
31-Dec-16 ��
31-Dec-15 ��
31-Dec-14 ��
31-Dec-13 ��
31-Dec-12 ��
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Remuneration Report (Audited) (continued)

The table below sets out the comparison between internal targets set by the company compared to consensus ��

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Financial Year Operating Consensus Operating EBITDA Consensus
Revenue Revenue EBITDA Achieved
(FY) Target Average Achieved Target Average
2010 ��
2011 ��
2012 ��
2013 ��
2014 ��
2015 ��
2016 ��
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��

��
�� component to encourage retention and
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The STI paid during the FY16 period related to performance during the FY15 period and was paid in cash on 15 ��

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Award
Position FY15 Company Level KPI Summary Outcomes
Name Held at
Year End KPI Total
Weighting Target Achievement
Summary Award
�� 40% �� 98%
�� EBITDA 40% �� 94% $180,963
EPS 20% �� 95%
�� 40% �� 98%
Mr Chris
Group CFO EBITDA 40% �� 94% $78,034
��
EPS 20% �� 95%
�� 40% �� 98%
General
Mr Myron
�� EBITDA 40% �� 94% $50,746
��
CoSec
EPS 20% �� 95%
�� 40% �� 98%
MD Business
Mr Sam Allert �� EBITDA 40% �� 94% $76,598
��
EPS 20% �� 95%
�� 40% �� 98%
Mr Daniel
COO EBITDA 40% �� 94% $23,937
Rabie
EPS 20% �� 95%
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Remuneration Report (Audited) (continued)

�� of STI included:

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Award
Position FY16 Company Level KPI Summary Outcomes
Name Held at
Year End KPI Total
Weighting Target Achievement
Summary Award
�� 40% �� 96%
�� EBITDA 40% $35m 101% $189,997
EPS 20% �� 110%
�� 40% �� 96%
Mr Chris
Group CFO EBITDA 40% $35m 101% $81,930
��
EPS 20% �� 110%
�� 40% �� 96%
General
Mr Myron
�� EBITDA 40% $35m 101% $53,280
��
CoSec
EPS 20% �� 110%
�� 40% �� 96%
MD Business
Mr Sam Allert �� EBITDA 40% $35m 101% $80,422
��
EPS 20% �� 110%
�� 40% �� 96%
Mr Daniel
COO EBITDA 40% $35m 101% $25,132
Rabie
EPS 20% �� 110%
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Target LTI Number of
Number of
Value (at Performance % of Shares or
Shares
Incumbent Role grant January Tranche Weighting Against Grant Appreciation
Eligible to
2014) to Vest Vest for FY16 Target Vested Rights
for FY16 Vested
�� $189,000 TSR 100% 0 �� 0% 0
Partially
�� Group CFO $69,780 TSR 100% 37,760 50% 18,880
Completed
General
Partially
�� $45,380 TSR 100% 24,556 50% 12,278
Completed
CoSec
MD
�� Partially
Mr Sam Allert $29,968 TSR 100% 16,216 50% 8,108
Accounting Completed
��
Partially
Mr Daniel Rabie COO $4,284 TSR 100% 2,318 50% 1,159
Completed
TOTAL $338,412 80,850 40,425
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The Company intends to attract and retain the superior talent required to successfully implement the Company’s ��

�� undertaken,
��
�� imposing of deferral periods for part of STI awards, and
��

��

Remuneration Report (Audited) (continued)

��

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Period of Notice
Position Held Duration of Termination
Name at Close of Contract Payments
FY16
From
From KMP
Company
�� Up to 12
�� Open ended 1 month 1 month
Rabie ��
Mr Chris Up to 12
Group CFO �� Open ended 3 months 3 months
��
Mr Myron General Up to 12
�� Open ended 1 month 1 month
��
��
Mr Sam Up to 12
Accounting �� Open ended 1 month 1 month
Allert ��
��
Mr Daniel Up to 12
COO �� Open ended 1 month 1 month
Rabie ��
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Period of Notice
Position Held at Close of Employing Duration of Termination
Name
FY16 Company Contract From From Payments
Company KMP
Mr Ian �� Reckon
Open ended None None None
Ferrier Chairman ��
Mr Greg �� Reckon
Open ended None None None
Wilkinson Director and Deputy Chairman ��
Mr Chris �� Reckon
Open ended None None None
Woodforde Director ��
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Number Held Granted Purchased / Number Held
Forfeited Vested
at Open 2016 FY16 DRP at Close 2016
Name Instrument
Number Number Number Number Number Number
Shares 10,758,000 0 0 0 472,189 11,230,189
��
Rabie Share
Appreciation 1,337,661 300,000 590,625 0 0 1,047,036
Rights
Shares 473,655 0 0 18,880 61,303 553,838
Mr Chris
��
Performance
187,774 100,000 18,879 18,880 0 250,015
Shares
Shares 184,092 0 0 12,278 0 196,370
Mr Myron
��
Performance
175,702 100,000 12,278 12,278 0 ��
Shares
Shares 8,571 0 0 8,108 0 16,679
Mr Sam
Allert
Performance
85,548 100,000 8,108 8,108 0 169,332
Shares
Shares 0 0 0 1,159 100,000 101,159
Mr Daniel
Rabie
Performance
25,079 100,000 1,158 1,159 0 122,762
Shares
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Remuneration Report (Audited) (continued)

�� year:

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Number Held at Open Granted Purchased Number Held
Forfeited Vested
2016 FY16 / DRP at Close 2016
Name Instrument
Dates
Number Number Number Number Number Number
Granted
Shares 100,000 na na na 2,159 102,159
Mr Ian
Ferrier ��
na na na na na na
Options
Shares 7,450,000 na na na 569,374 8,019,374
Mr Greg
Wilkinson ��
na na na na na na
Options
Shares 20,000 na na na 25,432 45,432
Mr Chris
Woodforde ��
na na na na na na
Options
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Max Value to Min Value to
Value
Total Value at be Expensed be Expensed
2016 Equity Grants Tranche Expensed in
Grant in Future in Future
FY16
Years Years
Name Role
TSR $113,000 $37,667 $113,000 ��
�� EPS $226,000 $75,333 $113,000 ��
�� Must be employed at end of performance period
TSR $37,667 $12,556 $37,667 ��
Mr Chris
Group CFO EPS $75,333 $25,111 $37,667 ��
��
�� Must be employed at end of performance period
TSR $37,667 $12,556 $37,667 ��
General
Mr Myron
�� EPS $75,333 $25,111 $37,667 ��
��
CoSec
�� Must be employed at end of performance period
TSR $37,667 $12,556 $37,667 ��
MD Business
Mr Sam Allert �� EPS $75,333 $25,111 $37,667 ��
��
�� Must be employed at end of performance period
TSR $37,667 $12,556 $37,667 ��
Mr Daniel
COO EPS $75,333 $25,111 $37,667 ��
Rabie
�� Must be employed at end of performance period
TOTALS $791,000 $263,667 $527,333 $0.00
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11 Other Remuneration Related Matters

The following outlines other remuneration related matters that may be of interest to stakeholders, in the interests of transparency and disclosure:

�� and
��

12 External Remuneration Consultant Advice

�� work that led to their recommendations are listed below:

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----- Start of picture text -----

Godfrey Remuneration �� $18,000
Group Pty Limited ��
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��

==> picture [422 x 42] intentionally omitted <==

----- Start of picture text -----

��
Godfrey Remuneration $19,000
��
Group Pty Limited ��
��
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��

��
��
��

�� the policy for engaging external remuneration consultants is being adhered to and is operating as intended, the ��

��

In addition, Rule 12 of the company’s Constitution obliges the company to indemnify on a full indemnity basis and to ��

��

Directors’ Meeting

��

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----- Start of picture text -----

Reckon Limited – Attendance Tables
Directors Meeting
Board Audit & Risk Committee Remuneration Committee
A B A B A B
Ian Ferrier 10 10 2 2 4 4
Chris
10 10 2 2 4 4
Woodforde
Greg
10 9 2 2 4 4
Wilkinson
�� 10 10 ��
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��

A - number of meetings eligible to attend

B - number of meetings attended

Non-Audit Fees

��

�� following reasons:

��
��

On behalf of the directors

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Mr I Ferrier Chairman Sydney 23 March 2017

Deloitte Touche Tohmatsu ABN 74 490 121 060

�� 225 George Street Sydney NSW 2000 �� Sydney NSW 1220 Australia

��

The Board of Directors �� 65 Berry Street North Sydney NSW 2060

23 March 2017

Dear Board Members

��

Yours sincerely

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Deloitte Touche Tohmatsu

==> picture [102 x 55] intentionally omitted <==

�� Partner Chartered Accountants

��

Deloitte Touche Tohmatsu ABN 74 490 121 060

�� 225 George Street Sydney NSW 2000 �� Sydney NSW 1220 Australia

��

Independent Auditor’s Report to the Members of Reckon Limited

Report on the Audit of the Financial Report

Opinion

�� comprises the Consolidated Statement of Financial Position as at 31 December 2016, the Consolidated Statement �� Statement of Changes in Equity and the Consolidated Statement of Cash Flows for the year then ended, and notes ��

�� including:

��
��

Basis for Opinion

�� are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the ��

��

��

��

��

��

��

Auditor’s Report (continued)

Key Audit Matters

��

Key Audit Matter

How the scope of our audit responded to the Key Audit Matter

Capitalisation and carrying value of development costs

As at 31 December 2016, the Group has capitalised ��

The Group capitalises certain costs that are directly ��

�� in assessing whether the criteria set out in the Australian Accounting Standards for capitalisation of such costs, has been met, particularly in determining:

�� the appropriateness of the costs that can be capitalised and whether these costs were directly ��
��

Our procedures included, but were not limited to:

�� feasibility of the products at 31 December 2016,
Obtaining an understanding of the key controls in �� qualifying costs to be capitalised,
Assessing the appropriateness of costs capitalised with reference to internal documentation, including, on a sample basis, agreeing payroll costs capitalised to supporting payroll and time records, and cost allocation calculations, and
��

We also assessed the appropriateness of the related ��

Key Audit Matter

How the scope of our audit responded to the Key Audit Matter

Impairment of goodwill

As at 31 December 2016 the Group has recognised ��

�� which the goodwill has been allocated, and
�� In estimating the future growth rates, nominal ��

��

Assessing the Group’s categorisation of CGU’s and �� CGU’s based on our understanding of the Group’s business,
Challenging management’s ability to accurately �� the prior year forecasts against actual outcomes,
��
Comparing the discount rate utilised by management to an independently calculated ��
��
��

We also assessed the appropriateness of the related ��

Revenue recognition in respect of multiple element arrangements

As at 31 December 2016 the Group has reported Sales ��

In multiple element arrangements where goods and ��

��

Our procedures included but were not limited to:

��
Assessing the appropriateness of the Group’s �� element arrangements and their compliance with ��
��
�� used by Management in the underlying ��
�� been properly extracted from underlying data ��
�� Creating an independent expectation of the margin to be applied, and comparing this to ��

We also assessed the appropriateness of the related ��

Auditor’s Report (continued)

Other Information

�� Chairman and Group CEO, the Directors’ Report and the Additional Information as at 15 March 2017, but does not ��

��

Directors’ Responsibilities for the Financial Report

�� accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as ��

�� going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic ��

Auditor’s Responsibilities for the Audit of the Financial Report

��

��
��
��
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on ��

��

��
��

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and ��

�� independence, and to communicate with them all relationships and other matters that may reasonably be thought to ��

�� in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely ��

Report on the Remuneration Report

Opinion on the Remuneration Report

��

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in ��

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��

==> picture [102 x 56] intentionally omitted <==

�� Partner Chartered Accountants Sydney, 23 March 2017

Directors’ Declaration

The directors of the company declare that:

�� Act 2001, and:
��
��
��
��
��
��
��
That this opinion has been formed on the basis of a sound system of risk management and internal control ��
��

��

On behalf of the directors

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Mr I Ferrier Chairman Sydney, 23 March 2017

��

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Note Consolidated
2016 2015
$’000 $’000
Restated [1]
Continuing operations
Revenue 3 97,759 91,448
Product costs 3 ��
��
Share-based payments expenses 3 ��
Marketing expenses ��
Premises and establishment expenses ��
Depreciation and amortisation of other non-current assets 3 ��
Telecommunications ��
��
��
Other expenses ��
�� 13,666 18,795
Income tax expense 6 ��
�� 10,992 15,081
��
Owners of the parent 10,992 14,577
Non-controlling interest - 504
10,992 15,081
Earnings per share Cents Cents
Basic Earnings per Share 22 ��
Diluted Earnings per Share 22 ��
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��

�� and Other Comprehensive Income

��

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Note Consolidated
2016 2015
$’000 $’000
�� 10,992 15,081
Other comprehensive income, net of income tax
��
�� 21 �� 1,626
�� 21 309 69
Total other comprehensive income/(loss), net of income tax (4,411) 1,695
Total comprehensive income for the year 6,581 16,776
��
Owners of the parent 6,581 16,272
Non-controlling interest - 504
6,581 16,776
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��

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Note Consolidated
2016 2015
$’000 $’000
ASSETS
Current Assets
�� 26 1,715 1,641
�� 8 10,340 9,327
Financial assets 14 632 -
�� 2,791 2,471
�� 287 2,032
Other assets 9 2,602 2,156
Total Current Assets 18,367 17,627
Non-Current Assets
�� 8 113 168
Financial assets 14 133 -
Property, plant and equipment 10 2,452 2,485
Deferred tax assets 11 948 193
Intangible assets 12 95,557 89,303
Other assets 9 2,154 1,367
Total Non-Current Assets 101,357 93,516
Total Assets 119,724 111,143
LIABILITIES
Current Liabilities
Trade and other payables 7,266 6,113
Borrowings 13 936 -
�� 15 3,215 3,048
�� 11,712 10,653
Total Current Liabilities 23,129 19,814
Non-Current Liabilities
Borrowings 13 51,618 49,900
�� 14 - 176
Deferred tax liabilities 17 7,418 6,678
�� 15 841 659
Total Non-Current Liabilities 59,877 57,413
Total Liabilities 83,006 77,227
Net Assets 36,718 33,916
Equity
Issued capital 20 18,707 16,929
�� 21 ��
Retained earnings 65,159 59,754
Total Equity 36,718 33,916
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��

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Acquisition
Foreign Share- of non Attributable
Share currency based Swap controlling to owners
Issued buyback translation payments hedging Retained interest of the
capital reserve reserve reserve reserve earnings reserve parent
Consolidated $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Balance at
16,929 (42,018) 4,941 638 (176) 59,754 (6,152) 33,916
1 January 2016
– – – – – –
�� 10,992 10,992
Other
��
income:
Exchange
��
– – – – – –
��
translation of
foreign operations
��
�� – – – – 309 – 309
interest rate swap
Total
�� – – �� – 309 10,992 – 6,581
income
Share based
– – – 126 – – – 126
payments expense
�� – – – – – –
��
��
��
– – – – –
�� 1,682 1,682
��
Treasury shares 96 – – �� – – – –
��
Balance at
31 December 18,707 (42,018) 221 668 133 65,159 (6,152) 36,718
2016
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��

�� (continued)

��

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----- Start of picture text -----

Acquisition
Foreign Share- of non- Attributable
Share currency based Swap controlling to owners Non-
Issued buyback translation payments hedging Retained interest of the controlling
capital reserve reserve reserve reserve earnings reserve parent interest Total
Consolidated $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Balance at
17,036 (42,018) 3,315 582 (245) 55,187 (3,788) 30,069 – 30,069
1 January 2015
�� – – – – – 14,577 – 14,577 504 15,081
the year
Other
��
income:
Exchange
��
on translation – – 1,626 – – – – 1,626 – 1,626
of foreign
operations
��
�� – – – – 69 – – 69 – 69
on interest
rate swap
Total
�� – – 1,626 – 69 14,577 – 16,272 504 16,776
income
Share based
payments – – – 164 – – – 164 – 164
expense
�� – – – – – – –
��
��
Treasury shares – – – – – – –
��
acquired
Treasury shares 108 – – �� – – – – – –
��
Transfer to
acquisition of – – – – – – 504 504 �� –
non-controlling
��
Remeasurement
�� – – – – – – �� – ��
option liability
Balance at
31 December 16,929 (42,018) 4,941 638 (176) 59,754 (6,152) 33,916 – 33,916
2015
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��

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----- Start of picture text -----

Consolidated
Note ��
2016 2015
$’000 $’000
Cash Flows From Operating Activities
Receipts from customers 105,963 101,138
Payments to suppliers and employees ��
�� 30 43
Interest paid ��
Income taxes paid ��
�� 29,698 33,539
Cash Flows From Investing Activities
–
Payment for buyout of non-controlling interest ��
–
Payments for purchase of business ��
Proceeds on sale of business 1,250 –
��
Payment for capitalised internal systems costs ��
�� 1,384 1,627
Proceeds from security deposits – 39
Payment for property, plant and equipment ��
�� (28,260) (29,747)
Cash Flows From Financing Activities
�� 1,863 6,424
–
��
–
Payment for treasury shares ��
�� 27 ��
�� (2,042) (4,475)
Net Increase / (Decrease) in cash and cash equivalents (604) (683)
�� 1,641 2,248
�� 76
�� 924 1,641
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��

Basis of preparation

��

(a) Basis of consolidation

��

��
��
��

Income and expense of subsidiaries acquired or disposed of during the year are included in the consolidated ��

��

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control are accounted ��

��(continued)

��

(b) Business Combinations

�� assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity ��

��

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling �� exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the ��

Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the ��

Where the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair ��

��

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the ��

(c) Depreciation and Amortisation

�� amortisation:

Plant and equipment 3 - 5 years
��

��

Transaction costs arising on the issue of equity instruments are recognised directly in equity as a reduction of the ��

��

Functional and presentation currency

��

Transactions and balances

��

Group companies

�� currency of the consolidated entity as follows:

��
��
��

��(continued)

��

(g) Intangible assets

Goodwill

Goodwill arising on an acquisition of a business is carried at cost as established at the date of the acquisition of the ��

��

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently ��

��

Intellectual Property

Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised ��

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are ��

��

Research and development costs

��

�� been demonstrated:

��
��
��
��
��
��

��

(h) Income Tax

��

Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly ��

��

�� determination of the allocation of income tax liabilities between the entities should the head entity default on its tax �� is that each member’s liability for tax payable by the tax consolidated group is limited to the amount payable to the ��

(i) Inventories

��

��(continued)

��

�� formula that takes into consideration the ranking of total shareholder return measured against a comparator group ��

��

(l) Receivables

��

(m) Impairment of assets

�� they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation ��

��

(n) Revenue Recognition

Sale of Goods and Disposal of Assets

��

Rendering of Services

��

Interest and Other Revenue

��

(o) Deferred Revenue

��

(p) Earnings per share

��

(r) Borrowings

��

��(continued)

��

(u) Government Grants

��

(v) Hedge Accounting

��

At the inception of the hedge relationship, the entity documents the relationship between the hedging instrument and ��

��

�� income and accumulated in equity are transferred from equity and included in the initial measurement of the cost of ��

��

The carrying amount of certain assets and liabilities are often determined based on estimates and assumptions of �� carrying amounts of certain assets and liabilities are:

��

Share based payments – the Group measures the cost of equity-settled transactions with employees by reference to the ��

��

��(continued)

��

With the exception of AASB 15 ‘ Revenue from Contracts with Customers ’ and AASB 16 ‘ Leases ‘, initial application ��

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----- Start of picture text -----

�� Expected to be
annual reporting initially applied
periods beginning ��
Standard/Interpretation on or after year ending
AASB 9 ‘ Financial Instruments ��
1 January 2018 31 December 2018
standards
AASB 15 ‘ Revenue from Contracts with Customers ’, AASB 2014-5
‘ Amendments to Australian Accounting Standards arising from AASB
1 January 2018 31 December 2018
15 ’ and AASB 2015-8 ‘ Amendments to Australian Accounting Standards
�� ’
AASB 16 Leases 1 January 2019 31 December 2019
----- End of picture text -----

��

(a) Business segment information

��

Business Group
Practice Management Group
Document Management Group

��

��
��
��

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----- Start of picture text -----

2016 2015
Segment revenues and results $’000 $’000
Restated
Operating revenue
Business Group 35,555 35,430
Practice Management Group 46,774 45,123
Document Management Group 14,839 9,771
97,168 90,324
Business sold 561 1,081
97,729 91,405
�� 30 43
Total revenue 97,759 91,448
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----- Start of picture text -----

2016 2016 2016 2015 2015 2015
$’000 $’000 $’000 $’000 $’000 $’000
EBITDA D&A NPBT EBITDA D&A NPBT
Business Group 19,952 �� 17,685 19,138 �� 17,020
Practice Management Group 19,865 �� 11,181 19,412 �� 10,680
Document Management Group 4,647 �� 3,279 4,694 �� 3,430
44,464 (12,319) 32,145 43,244 (12,114) 31,130
New market net costs ��
Central administration costs �� - �� - ��
Business sold 686 �� 452 817 �� 414
35,261 �� 15,704 36,631 �� 20,843
�� 30 43
Finance costs ��
�� 13,666 18,795
Income tax expense ��
�� 10,992 15,081
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��(continued)

��

�� 2016 nQueue Billback has been combined with the Accountant Group to form the Practice Management Group, and ��

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----- Start of picture text -----

Additions to non-
Assets Liabilities current assets
2016 2015 2016 2015 2016 2015
Segment revenues and results $’000 $’000 $’000 $’000 $’000 $’000
Business Group 21,760 18,614 8,290 5,706 8,890 8,989
Practice Management Group 60,215 59,155 8,176 10,277 9,120 8,861
Document Management Group 32,917 28,404 6,567 4,490 12,218 1,634
�� 4,832 4,970 59,973 56,754 1,297 1,389
Total of all segments 119,724 111,143 83,006 77,227 31,525 20,873
----- End of picture text -----

(b) Geographical information

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----- Start of picture text -----

Revenues from
external customers Non-current assets
2016 2015 2016 2015
$’000 $’000 $’000 $’000
Australia 63,665 62,562 59,213 53,961
United States of America 14,978 8,907 14,091 6,537
�� 11,554 12,784 25,465 27,280
�� 7,532 7,152 2,588 5,738
Total of all segments 97,729 91,405 101,357 93,516
----- End of picture text -----

��

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----- Start of picture text -----

Consolidated
2016 2015
$’000 $’000
Restated
��
Revenue
Sales revenue
�� 70,547 63,055
�� 5,367 7,598
�� 7,485 7,894
�� 14,330 12,858
�� 97,729 91,405
Other Revenue
�� 30 43
97,759 91,448
Expenses
Product costs 12,012 9,998
Bad debt expense:
Other Entities 88 168
Depreciation of non-current assets:
Property, plant and equipment 1,017 1,078
Amortisation of non-current assets:
�� 151 258
Intellectual property 2,378 1,234
�� 16,011 13,218
Total depreciation and amortisation 19,557 15,788
�� 392 -
�� 92 ��
��
�� 3,025 3,017
�� 129 88
Share based payments:
Equity-settled share-based payments 126 164
Cash-settled share-based payments 247 190
373 354
Operating lease rental expenses:
Minimum lease payments 2,695 2,416
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��(continued)

��

The Group has amended the manner in which pass through ASIC fees in the Reckon Docs business has been ��

==> picture [422 x 96] intentionally omitted <==

----- Start of picture text -----

Product
Revenue costs
$’000 $’000
�� 105,168 23,718
Impact of change in accounting policy ��
2015 after change in accounting policy 91,448 9,998
----- End of picture text -----

5 New market expenditure

==> picture [422 x 144] intentionally omitted <==

----- Start of picture text -----

Consolidated
2016 2015
$’000 $’000
Marketing expenses ��
��
Other expenses ��
Amortisation of other non-current assets ��
(17,887) (5,848)
----- End of picture text -----

�� and international markets as well as establishing the Document Management market in the USA and in Australia and ��

6 Income Tax

==> picture [422 x 373] intentionally omitted <==

----- Start of picture text -----

Consolidated
2016 2015
$’000 $’000
��
Current tax 2,645 2,820
Deferred tax �� 1,612
�� 44 ��
2,674 3,714
��
��
�� 13,666 18,795
�� 4,100 5,638
��
��
��
��
Sundry items ��
2,630 4,432
�� 44 ��
�� 2,674 3,714
----- End of picture text -----

��

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----- Start of picture text -----

��
----- End of picture text -----

Tax losses:
��	– –
Capital	2,098 2,098
	2,098 2,098

��(continued)

��

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----- Start of picture text -----

Consolidated
2016 2015
$ $
(a) Deloitte Touche Tohmatsu
----- End of picture text -----

During the year, the auditors of the parent entity earned the following remuneration:

==> picture [422 x 205] intentionally omitted <==

----- Start of picture text -----

�� 233,427 254,275
�� 154,218 355,814
387,645 610,089
(b) Other Auditors
�� 70,239 65,424
�� 154,896 101,192
225,135 166,616
612,780 776,705
----- End of picture text -----

��

==> picture [422 x 574] intentionally omitted <==

----- Start of picture text -----

Consolidated
2016 2015
$’000 $’000
��
�� 8,934 7,963
Allowance for doubtful debts ��
8,619 7,652
�� 1,721 1,675
10,340 9,327
��
�� 53 108
�� 60 60
113 168
��
Past due 0 – 30 days 1,010 1,291
Past due 31 – 60 days 416 480
Past due 61 [�] days 1,124 911
Total 2,550 2,682
��
detailed below:
Balance at beginning of the year 311 562
��
�� 92 ��
Balance at end of year 315 311
----- End of picture text -----

��(continued)

��

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----- Start of picture text -----

Consolidated
2016 2015
$’000 $’000
��
Prepayments 1,967 1,633
Other 635 523
2,602 2,156
��
Prepayments 199 234
Other 1,955 1,133
2,154 1,367
----- End of picture text -----

��

==> picture [422 x 232] intentionally omitted <==

----- Start of picture text -----

Consolidated
2016 2015
$’000 $’000
Leasehold Improvements
At cost 2,920 2,663
��
�� 392 292
Plant and equipment
At cost 10,685 9,471
��
Total plant and equipment 2,060 2,193
2,452 2,485
----- End of picture text -----

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----- Start of picture text -----

Leasehold Plant and
Improvements Equipment Total
$’000 $’000 $’000
----- End of picture text -----

Consolidated
Carrying amount at 1 January 2016	292 2,193	2,485
Additions	251 1,062	1,313
��	�� ��	��
Balance at 31 December 2016	392 2,060	2,452

Consolidated
Carrying amount at 1 January 2015	503 2,284	2,787
Additions	47 1,105	1,152
��	�� ��	��
Balance at 31 December 2015	292 2,193	2,485

��(continued)

11 Deferred Tax Assets

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----- Start of picture text -----

Consolidated
2016 2015
$’000 $’000
��
�� 772 -
Doubtful debts 12 9
�� 99 117
�� 65 67
948 193
��
Reconciliation:
Opening balance at 1 January 193 185
�� 755 8
Balance at 31 December 948 193
----- End of picture text -----

12 Intangibles

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----- Start of picture text -----

�� 21,535 17,251
Accumulated amortisation ��
6,097 4,128
�� 113,380 96,343
Accumulated amortisation ��
38,094 32,931
Internal systems – at cost 2,688 1,389
Accumulated amortisation ��
1,749 1,087
Goodwill – at cost 49,617 51,157
95,557 89,303
----- End of picture text -----

��

Consolidated	Consolidated
2016 $’000	2015 $’000
Impairment test for goodwill �� the businesses are managed and reported on and taking into account the use of shared resources, as follows:

==> picture [422 x 68] intentionally omitted <==

----- Start of picture text -----

Accountant Group 25,765 25,765
�� 2,738 2,785
�� 21,114 22,607
49,617 51,157
----- End of picture text -----

��

==> picture [423 x 292] intentionally omitted <==

----- Start of picture text -----

Development
Costs
Consolidated movements in intangibles Intellectual (including
Goodwill Property internal Total
$’000 $’000 systems) $’000
At 1 January 2016 51,157 4,128 34,018 89,303
Additions - - 22,961 22,961
-
Acquisitions 2,155 5,096 7,251
��
- -
Disposals ��
-
Amortisation charge ��
At 31 December 2016 49,617 6,097 39,843 95,557
At 1 January 2015 49,502 5,362 27,515 82,379
Additions - - 19,721 19,721
- -
�� 1,655 1,655
-
Amortisation charge ��
At 31 December 2015 51,157 4,128 34,018 89,303
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�� (continued)

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----- Start of picture text -----

Consolidated
2016 2015
$’000 $’000
��
�� 791 -
�� 145 -
936 -
Non-current
�� 51,506 49,900
�� 112 -
51,618 49,900
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��

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----- Start of picture text -----

2016
Bank
guarantee &
Bank Loan transaction
overdraft facility facility
$’000 $’000 $’000
��
�� 2,000 66,000 3,110
Used 1,516 50,781 1,644
Unused 484 15,219 1,466
��
��
0-12 months 791 - 1,644
2-5 years 725 50,781 -
�� -
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��

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----- Start of picture text -----

Consolidated
2016 2015
$’000 $’000
��
�� 632 –
��
�� 133 ��
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��

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----- Start of picture text -----

Consolidated
2016 2015
$’000 $’000
��
�� 1,639 1,573
�� 1,576 1,325
�� - 116
Surplus premises - 34
3,215 3,048
��
�� 347 514
�� 494 145
841 659
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��(continued)

��

�� thousand –��

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----- Start of picture text -----

Consolidated
2016 2015
$’000 $’000
��
Doubtful debts ��
��
��
��
�� 11,120 9,587
��
7,418 6,678
��
Reconciliation:
Opening balance at 1 January 6,678 5,058
�� 740 1,620
Balance at 31 December 7,418 6,678
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��

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----- Start of picture text -----

Parent
2016 2015
$’000 $’000
Financial position
Assets
Current assets 7,856 8,427
Non-current assets 100,473 104,862
108,329 113,289
��
Current liabilities 9,148 8,917
Non-current liabilities 44,599 57,417
53,747 66,334
Equity
Share capital 18,707 16,929
��
�� 133 ��
�� 668 638
��
�� 703
Retained earnings 79,026 72,536
54,582 46,955
Financial performance
�� 12,076 15,960
�� 703
�� 11,405 16,663
Capital commitments for the acquisition of property, plant and equipment
– –
Not longer than 1 year
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Other

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��

Long-term incentive plan

��

For the performance period 2015-2017 the remuneration committee changed the benchmark against which the TSR ��

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�� plan:

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Performance Shares
Grant Vesting Shares Shares lapsed Shares vested Shares available at
Date Date Granted during the year during the year the end of the year
2016 2015 2016 2015 2016 2015
Jan’13 Dec’15 91,740 - 39,166 - 48,352 - -
Jan’14 Dec’16 101,696 47,521 9,266 44,909 - - 92,430
Jan’15 Dec’17 121,239 11,047 11,047 - - 99,145 110,192
Jan’11 Dec’17 112,500 - 10,000 - - 76,250 76,250
Jan’12 Dec’18 127,500 3,750 10,000 - - 87,500 91,250
Jan’13 Dec’19 296,250 8,750 25,000 - - 242,500 251,250
Jan’14 Dec’20 101,250 12,500 10,000 - - 78,750 91,250
Jan’15 Dec’21 37,500 10,000 10,000 - - 17,500 27,500
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��

��(continued)

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Appreciation Rights
Grant Expiry Rights Rights lapsed Rights vested Rights available at
Date Date Granted during the year during the year the end of the year
2016 2015 2016 2015 2016 2015
Jan’13 Dec’15 549,419 - 230,756 - 318,663 - -
Jan’14 Dec’16 590,625 590,625 - - - - 590,625
Jan’15 Dec’17 747,036 - - - - 747,036 747,036
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Senior Executive Rights
Grant Expiry Rights Rights lapsed Rights vested Rights available at
Date Date Granted during the year during the year the end of the year
2016 2015 2016 2015 2016 2015
Jan’16 Dec’18 1,087,500 - - - - 1,087,500 -
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��

�� payment will only be made if the employee remains in employment for a further one year period after the performance ��

�� performance is the measured on a sliding scale form 90% to 110% against the budgeted performance of the group ��

20 Issued Capital

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2016 2015
No. $’000 No. $’000
Fully Paid Ordinary Share Capital
�� 112,084,762 18,842 112,084,762 18,842
- -
�� 1,210,070 1,682
�� 113,294,832 20,524 112,084,762 18,842
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Less Treasury shares
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�� 840,448 1,913 765,714	1,806
Shares purchased in current period - - 116,115	215
�� - - 6,971	-
�� �� �� ��	��
�� 795,539 1,817 840,448	1,913

�� 112,499,293 18,707 111,244,314	16,929

��

��(continued)

21 Reserves

Nature and purpose of reserves

��

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Consolidated
2016 2015
cents cents
Basic earnings per share ��
Diluted earnings per share ��
��
112,217,898 111,244,314
per share
��
114,064,937 112,084,762
��
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��

24 Commitments for Expenditure

(a) Capital Expenditure Commitments

��

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Consolidated
2016 2015
$’000 $’000
(b) Lease Commitments
Operating Leases
Within 1 year 2,426 2,096
�� 3,491 3,183
�� 269 194
6,186 5,473
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��

��(continued)

��

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Name of Entity Country of Incorporation Ownership Interest
2016 2015
% %
Parent Entity
�� Australia
Subsidiaries
�� Australia 0 100
�� Australia 100 100
�� Australia 0 100
�� Australia 0 100
�� Australia 100 100
�� 100 100
�� Australia 100 100
�� 100 100
�� 100 100
�� Australia 100 100
�� Australia 0 100
�� Australia 100 100
�� 100 100
�� United States of America 100 100
�� United States of America 100 100
��
�� 100 100
��
�� United States of America 100 -
�� Singapore 100 100
�� Australia 0 100
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��

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Consolidated
2016 2015
$’000 $’000
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(a) Reconciliation of Cash

��

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----- Start of picture text -----

�� 1,715 1,641
�� -
924 1,641
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��

Flows From Operating Activities

��	10,992 15,081
Depreciation and amortisation of non-current assets	19,557 15,788
��	126 164
�� ��	�� - 1,631 ��
��	�� 1,612
Unrealised foreign currency translation amount	154 ��
��
��	�� 82
��	�� ��
Other current assets	�� ��
��	55 510
Non-current other	�� ��
��
Current trade payables	613 904
Other current liabilities	�� 1,285
Other non-current liabilities	182 77
��	29,698 33,539

��(continued)

��

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Consolidated
2016 2015
$’000 $’000
(c) Business acquired
SmartVault Corporation
��
��
Consideration:
-
Cash paid 5,628
-
Cash acquired ��
Debt acquired 368 -
Cash 5,785 -
Consideration:
�� 430 -
-
�� 5,096
Fixed assets 421 -
-
Trade payables ��
�� -
Goodwill 2,155 -
-
5,785
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��

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----- Start of picture text -----

Consolidated
2016 2015
$’000 $’000
��
�� 3,338 5,284
��
��
2,249 4,726
��
5,587 10,010
��
11 31
��
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��

(b) Interest Rate Risk

��

��(continued)

��

c) Credit Risk

��

(f) Capital risk management

��

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Consolidated
2016 2015
$ $
(a) Key Management Personnel Remuneration
�� 3,224,218 3,204,159
�� 187,875 191,362
Share based payments 188,349 290,473
3,600,442 3,685,994
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��

On 17 March 2017 the company announced a proposal to de-merge Reckon’s Document Management segment ��

��

��

North Sydney Sydney NSW 2060

��

Additional Information as at ��(Unaudited)

��

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Ordinary Shareholder Number Percentage
�� 17,681,216 ��
�� 12,096,412 ��
�� 8,902,233 ��
�� 7,943,255 ��
�� 6,280,487 ��
�� 5,431,195 ��
�� 5,107,914 ��
�� 4,791,224 ��
�� 3,418,105 ��
�� 1,431,903 ��
�� 1,330,306 ��
�� 1,301,062 ��
�� 1,104,553 ��
�� 1,091,051 ��
�� 809,542 ��
�� 798,864 ��
�� 643,300 ��
�� 591,421 ��
�� 581,982 ��
�� 549,130 ��
81,769,040 ��
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��

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Number of
Number of Ordinary Shares Shareholders
1 – 1,000 1,011
1,001 – 5,000 1,972
5,001 – 10,000 657
10,001 – 100,000 522
�� 54
Total 4,216
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��

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----- Start of picture text -----

Ordinary Shareholder Number Percentage
�� 17,681,216 ��
�� 12,096,412 ��
�� 8,902,233 ��
�� 7,943,255 ��
�� 11,123,189 ��
�� 7,610,793 ��
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��

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----- Start of picture text -----

Ordinary
Shares Percentage
�� 8,400,600 ��
Wilson Asset Management Group 7,890,215 ��
�� 7,428,465 ��
�� 5,689,261 ��
�� 5,670,500 ��
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Additional Information as at

��(Unaudited) (continued)

��

�� North Sydney NSW 2060 ��

��

�� North Sydney NSW 2060 ��

��

�� Sydney NSW 2000 ��

��

Auditors

Deloitte Touche Tohmatsu 225 George Street Sydney NSW 2000

��

Annual General Meeting

�� �� at Level 12, 65 Berry Street, North Sydney, NSW ��

��

��
��
��
��
�� email will be sent to you

��

100

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AI assistant

RECKON LIMITED — Annual Report 2017

65708_rns_2017-03-30_e14b109c-2ea4-4a18-8913-cfd6cdf0deb4.pdf

Reckon Limited Annual Report

Contents

Message from the Chairman and Group CEO

Directors’ Report

Ian Ferrier AM FCA

Greg Wilkinson

Christopher Woodforde B Comm LLB

Clive Rabie

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Directors’ Report (continued)

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Business Group

Document Management Group

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Results of Operations

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Directors’ Report (continued)

Revenue Drivers

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Cash Flow

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Remuneration Report (Audited)

1 Introduction

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Remuneration Report (Audited) (continued)

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Remuneration Report (Audited) (continued)

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Remuneration Report (Audited) (continued)

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Remuneration Report (Audited) (continued)

RECKON LIMITED Annual Report 2017

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