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CHANGEFINANCIALLIMITED

ANNUALREPORTFORTHEYEARENDED30JUNE2017

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CORPORATEDIRECTORY

DirectorsPeterClare(Non-ExecutiveChairman)AshleyShilkin(ManagingDirector)IanLeijer(ExecutiveDirectorandCFO)BenjaminHarrison(Non-ExecutiveDirector)TeresaClarke(Non-ExecutiveDirector)AndrewPipolo(Non-ExecutiveDirector)

CompanySecretaryDuncanCornish

RegisteredOfficeCorporateAdministrationServicesPtyLtdLevel10,110MaryStreetBRISBANEQLD4000Telephone:+61732126255Fax:+61732126250Email:[email protected]

PostalAddressChangeFinancialLimitedGPOBox2676BRISBANEQLD4001

AustralianCompanyNumber150762351

AustralianBusinessNumber34150762351

AuditorsPitcherPartnersLevel38345QueenStreetBRISBANEQLD4000Telephone:+61732228444Fax:+61732217779Website:www.pitcher.com.au

ShareRegistryLinkMarketServicesLimitedTelephone:1300554474Website:www.linkmarketservices.com.au

Websitewww.changefinancial.com

ASXCodeCCA

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ChangeFinancialLimitedAnnualReportForyearended30June2017

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TABLEOFCONTENTS

CORPORATEDIRECTORY 2

TABLEOFCONTENTS 3

CHAIRMAN’SLETTER 4

MANAGINGDIRECTOR’SREPORT 6

DIRECTORS'REPORT 8

AUDITOR’SINDEPENDENCEDECLARATION 22

CORPORATEGOVERNANCESTATEMENT 23

FINANCIALREPORT 31

CONSOLIDATEDSTATEMENTOFPROFITORLOSS 32

CONSOLIDATEDSTATEMENTOFCOMPREHENSIVEINCOME 33

CONSOLIDATEDSTATEMENTOFFINANCIALPOSITION 34

CONSOLIDATEDSTATEMENTOFCHANGESINEQUITY 35

CONSOLIDATEDSTATEMENTOFCASHFLOWS 36

NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS 37

DIRECTORSDECLARATION 54

INDEPENDENTAUDITORSREPORT 55

ASXADDITIONALDISCLOSURE 59 F

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CHAIRMAN’SLETTERDearFellowShareholders,OnbehalfoftheBoardofDirectors,itgivesmegreatpleasuretopresentthe2017AnnualReportforChangeFinancialLimited(ASX:CCA),followingourdecisiontochangethenameofourparentcompanyfromChimpchangeLimitedpostyear-end.WhilewecontinuetobeAustralia’sonlylisteddigitalbankingplatform,ournamechangereflectstheevolutionofthebusinessandgrowthintonewbankingverticalsaswepursueadditionalexcitinganddisruptiveopportunities.ChangeFinancial’sconsumerbankingplatform(ChimpChange)providesinnovative,mobile-firsteverydaybankaccounts.Inadditiontotheregularfunctionalityofconsumerbankaccounts,ChimpChangecustomersbenefitfromlowcosts,highsecurity,andvaluablefeaturesincludingaround-upsavingsaccount,linkeddebitMastercard,seamlessdirectdeposits,photochequeloads,andgraphicalpersonalfinancialmanagementinsightsintospendingpatterns.WhenourCompanylistedontheAustralianSecuritiesExchange(ASX)in2016,weaimedourproductsprincipallytowardsthe‘millennial’market(peopleaged18-35)intheUS.Thisextremelyeconomicallyvaluablecohortcomprisesaround92millionpeople,manyofwhomareunbankedorunderbanked.Millenialsnotoriouslyvaluezero-latency,frictionlesssign-up,mobilityandconvenience;allofwhichareprovidedbyourChimpChangeproduct.Ourtargetmarkethasrespondedwelltoourproposition,andweachievedsignificantgrowthoverthe2017financialyearinadoptionoftheChimpChangeproduct.Thescaleofthisgrowthisevidentbyaquickcomparisonofactivitylevels.InJune2016,ittookChimpChangeanentiremonthtorecordUS$600,000indeposits.On30June2017,ayearafterlistingontheASX,theCompanyattractedthesamescaleofdepositsonasingleday,andthatgrowthiscontinuingunabatedtotoday.TheCompanygeneratedmorethanUS$600,000revenueinFY17,anincreaseofmorethan230percentonthepreviousyear.ChimpChangesawgrowthacrossallkeymetrics,withthebiggestimprovementcomingincustomerpurchases,whichatUS$22millionsawannualgrowthof349percent.TransactionvolumesurgedtoUS$73.6million,upanimpressive328percentonlastyear’srecorded$17.2million.DepositshitUS$31.9million,whichisa303percentincreaseonthepreviousyear.AsactivityacrosstheChimpChangeplatformrampedup,theCompanybegantoearnmorerevenuerelatingtointerchangefees,out-of-networkATMfeesandchequedepositfees.Weexpectthisgrowthinrevenuetogainmomentumasourcustomerbasecontinuestoexpand.Priortoyear-end,inMay2017,wecompletedaUS$7.5millionplacementtofundaccelerationofcustomeracquisitionandproductdevelopment,aswellasworkingcapital.Itwaspleasingtoreceivethesupportofseveralwell-respectedAustralianinstitutionalfundmanagersandprofessionalinvestorsinthisplacement,andwewelcomedAcornCapitalasasubstantialshareholder.Ithankallourshareholders,bothnewandexisting,fortheirsupportofourbusinessdevelopmentthroughout2017.InOctober2016,wewelcomedTeresaClarke,formerManagingDirectoratGoldmanSachsinNewYork,andmemberofPresidentObama'sAdvisoryCouncilonDoingBusinessinAfrica,asanon-executivedirector.TeresahasbroughtawealthofexperiencefromtheUSbankingsystemandasanentrepreneur,aswellasastrongnetworkincorporateandpoliticalsectors.ThishasprovenagreatassetasourCompany’smarketshareintheUScontinuestogrow.Postyear-end,wealsowelcomedformerPayPalAustraliaandPayPalJapanManagingDirectorAndrewPipolo,totheBoard.DuringthefiveyearsAndrewdirectedPayPal,theAustraliandivisionwasthefastest-

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growingoperationwithinthePayPalGroup.SinceleavingPayPalin2011,Andrewhasowned,operatedandconsultedforcompaniesintheFinTechspacewithafocusonpayments.Andrewhasinvaluableexperienceinthesector,mostrecentlyhelpingtodevelopLoopPay,whichwassubsequentlyacquiredbySamsungPayin2015.HisappointmenttotheBoardwillberatifiedatourAnnualGeneralMeeting,andIexpectshareholderswillbejustasexcitedasIamabouthimjoiningourBoard.Itakethisopportunitytothankourmanagementandstafffortheirexemplaryeffortsoverthepastyear,aswellasmyfellowDirectorsfortheirguidance,counselandsupport.Themomentouseffortputinbyeveryonehasbeenclearinwhatwehavebeenabletoachieveoperationallywhichismeetingourexpectations.Wehavebeensteadilybuildingquarterbyquartersinceourlisting,andIbelievethatwiththeinitiativesweexpecttorolloutandfundsathandtomakeourplanshappen,wecanachievenewheightsin2018.Ilookforwardtoupdatingyouonoursuccess.

PeterClare

Non-ExecutiveChairman

ChangeFinancialLimited

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MANAGINGDIRECTOR’SREPORTThe2017financialyearhasbeenanexcitingperiodforChangeFinancial.Executingourstrategyhasledtotangibleresultsforcustomers,partnersandinvestors.ThroughourChimpChangedigitalbankingbusiness,theCompanyfocusesondeliveringabetterwaytobankwithanaffordable,personalisedandfrictionlessuserexperience.Thestronggrowthweachievedin2017,ourfirstfullyearsincelistingontheAustralianSecuritiesExchangeinJune2016,hasdemonstratedthatthemarketwearetargetingisveryreceptivetoourproposition.WhenwesetouttoestablishChimpChange,wewantedtobuildaplatformthatmettheneedsofourcustomers,drivingvaluetothemwhilealsocreatingvalueforourshareholders.Iampleasedtoreportthatin2017,ChimpChangehasconsistentlyachievednewrecordseachquarteronmultiplekeymetrics.Thisgivesusconfidencetocontinuescalingourcorebusinessonsolidfoundations.Ourgoalistosignificantlyimprovetraditionalbankingthroughinnovativeindustrydisruption,buildingtrustandofferinghighermarginproductstoalarge,growingbaseofincreasinglyactivecustomers.Growingourcustomerbaseisatthecoreofourbusinessdevelopmentplan.Wesetouttoattract25,000customerstotheplatformbytheendofCY2016,andwesurpassedthisbyreachingmorethan40,000customers.InJuly2017,wesignedupour100,000thcustomer.Thegrowthofnearly50,000newcustomersinthesecondhalfofthefinancialyearsurpassedallofourexpectations,butithasbuiltafoundationforevenfastergrowthin2018.ThekeyforChangeFinancialmovingforwardwillbetocontinuetoscaleouroperationstomeetthedemandweareseeinginthemarket.Weimplementedseveralnewproductsandfeaturesin2017,themostnotableofthesebeingournewround-upsavingsaccount.Thishighly-requesteddevelopmentempowersusersto“round-up”whenmakingapurchaseandthendeposittheroundingamountintosavings.Throughthisproduct,wecanencouragecustomerstoboosttheiruseoftheChimpChangecardtogrowtheirsavingsandtoloadmoremoneyontotheplatform.WiththisfeaturesoftlaunchedtoallcustomersinApril2017,wesetanewquarterlyrecordforattractingcustomersintheJunequarter,finishingwithanadditional30,800customersonourbooks.Wehopetosignupanother30,000newcustomersintheSeptember2018quarter,andIamconfidentwecanachievethis.Earlierintheyear,welaunchedaninnovativephotochequeloadfeature,whichwasalsorequestedbymanycustomers.Adoptionofthefeaturegrewstronglymonthonmonth,provingthatChimpChangecanrespondtoandmeetthedemandsofitsmarket.Weexpecthavingthisfeatureintegratedwillcontinuetogrowtheamountofmoneythatourcustomerstrustustomanage.ThisgrowingtrustwasalsodemonstratedintheMarchquarter,whenalargeproportionofourcustomersdepositedsignificantamountsoftaxrefundcashintotheirChimpChangeaccounts.ThiseventtookTransactionVolume,CustomerDeposits,CustomerSpendandRevenuetonewhighs,andsetahighbarfortheCompany’sgrowthtoexceed.Webelievethisstrengtheningrelationshipwithourcustomerswillpositionusforevenfastergrowthoncewebegintorollouthigher-marginproductstoalargercustomerbase.Wegainedvalidationforoureffortsthroughtheyearthroughrecognitionbyourbankingandpaymentsindustrypeers,winningPayAwardsintheUSfor‘BestMobileApp’,‘ConsumerChampion’,and‘StartupoftheYear’.JuriedannuallybyPaybefore,thePayAwardsareaprestigiousrecognitionofexcellenceintheglobalprepaidandpaymentstechnologyindustries,andwewereproudtobenominatedandhonouredacrossthesecategories.Postyear-end,inAugust2017,weannouncedastrategicpartnershipwithHollar,namedbytheWallStreetJournalas‘the#1techcompanytowatchin2017’.Hollarisafast-growinge-commerceplayerintheUS,providingtheultimateonlinedollarstorefornewproductssuchastoys,electronics,home,beautyandapparel.WithHollarhavinggrowntoattractmorethan2millionmonthlyactiveusersintheUS,weare

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optimisticthatourpartnershipcandrivefurthergrowthonbothourplatforms.Weareworkingonotherpartnershipswhichweintendtoannouncethrough2018.Thefocusfor2018willbeleveragingthetechnologywehavebuiltthroughexpandingourconsumerbankingoffering,andlaunchingourBusiness-to-Businessenterpriseoffering.Wearegoingthroughasignificanttransitionfromasinglemillennialfocussedconsumerbankingproduct;intoadiversifiedFinTechbankingsoftwarecompany.Thistransitionpositionsuswellforgrowthoverthecomingyears.Bankcustomersandinvestorsalikeareshowingincreasinginterestinmillennial-focusedproductsandcompanies.HavingcommencedFY18withsignificantoperationalmomentum,andwell-fundedfromourrecentcapitalraising,weintendtoleveragethiscompanyandindustrygrowthfurtherintheyearahead.Weplantocontinueourmarketingeffortstoacquirenewcustomerswithnewfeaturesandpromotions,andbroadentheadoptionofourinnovativetoolswhichenableandencouragecustomerstomovemoreoftheirfundsintotheirChimpChangespendingaccount.Throughtheseandotherinitiativesandcampaigns,itwillbeexcitingtoseethegrowthwecanachieveinsatisfiedcustomersasweexpandoursuiteofproductsandservices.Iamincrediblypleasedwiththestrongprogressweaccomplishedin2017,andIbelievewehavethefoundationsinplaceforasolidfuture.

AshleyShilkin

FounderandManagingDirector

ChangeFinancialLimited

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DIRECTORS'REPORTTheDirectorspresenttheirreporttogetherwiththefinancialstatementsofChangeFinancialLimited(ChangeFinancialorCompany)consistingofChangeFinancialLimitedandtheentitiesitcontrolledattheendoforduringtheyearended30Jun2017(Group).

DirectorsThefollowingpersonswereDirectorsofChangeFinancialLimitedduringthewholeofthefinancialyearanduptothedateofthisreportunlessotherwisestated:PeterClareAshleyShilkinIanLeijerBenHarrisonTeresaClarke(appointed14October2016)AndrewPipolo(appointed1August2017)

PrincipalactivitiesTheGroup'sprincipalcontinuingactivityduringtheyearwasprovidingmobilebankingservicesthroughtheChimpChangemobileapplication.

BackgroundonCompanyandReviewofOperationsChange Financial Limited (Company) (ASX: CCA) provides access to Australia’s only listed digital bankingplatformviaitswhollyownedsubsidiaryChimpchangeLLC.ChimpChangeoffersconsumerssecure,low-cost,feature-richbankaccounts.BasedinLosAngeles,California,ChimpChangedeliversabetterwaytobankwithtwokeyvaluepropositionstocustomers. Firstly,itmakesfreeretailbankingavailabletotensofmillionsofAmericanswhotypicallypaymonthlyfeesandoverdraftfeestohaveabankaccount.Secondly,ChimpChangeprovidesmoneymanagementtoolstohelpcustomers better understand how they spend theirmoney, and save theirmoney. It also offers real-timemobilechequedepositandinstantpersontopersonpayments.AllfundsondepositareheldwithafederallyregulatedFDIC-insuredbankintheUS. ChimpChange empowers customers to send instant mobile payments, make in-store/online purchaseseverywhereMastercardisaccepted,anddoalltheirdailytransactionalbankingfromasingleapp. Financialyear2017wasanincrediblegrowthyearfortheCompany.AftercompletinganASXlistinginJune2016,theCompanywentontodelivercontinuousquarteronquartergrowthintheChimpChangePlatformthroughoutFY17byleveragingnewproductfeatures,ourenhancedcustomerbase,andincreasedactivityofexistingcustomers.To indicatethescaleofthisrapidgrowth, inJune2016ittookChimpChangetheentiremonthtoachieveUS$600,000indeposits;on30June2017,exactlyoneyearafterIPO,ChimpChangeachievedUS$600,000indepositsinasingleday. By the end of June 2017, ChimpChange had achieved annualised total transaction value (TTV) run rate ofUS$113million(A$149million).ThisTTVrunraterepresentsgrowthof647%comparedtoUS$15million(A$20million) at the same time in 2016. The tremendous growth in customer numbers and transaction valuevalidates that the current banking product delivers on the value propositions needed in the US market.Furthermore,thetablebelowhighlightsthebreadthofChimpChange’sgrowth:

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Metric(USD) FY17 FY16 Growth

TransactionVolume $73.6M $17.2M 328%

Deposits $31.9M $7.9M 303%

Purchases $22.0M $4.9M 349%

Revenuefromservices $409K $178K 229%

Tocontinuethisgrowth, theCompanywasable tosuccessfullysecureaplacement fundingroundofA$10million(US$7.5m)inMay2017,cornerstonedbyleadingfundmanagerAcornCapitalLimitedandsupportedbyourbrokersCCZStattonEquitiesandMorgans. DuringFY17,theCompanyexecutedonanumberofkeybusinessinitiativestopositionChangeFinancialforfuturegrowth.Theseincluded: • DevelopmentofenterprisesolutionstofurthermonetisethegreattechnologytheCompanyhasbuilt,

bylicensingandpartneringwithotherbanksandbusinesses(scheduledforH22018); • Commencedenteringintopartnershipswithotherhighgrowthtechnologycompaniestofurther

monetiseourcustomerbase; • Releasedmobilephotochequedepositwith60secondchequeclearancetime; • ReleasedChimpChange’sroundupsavingsfeature,whichhasbeenusedby9,120customerssince

launch; • DevelopedandreleasedChimpChange’spredictivespendingtechnologyandauto-categorization

engine; • Re-engineeringofourback-endtechnologystackintoahighlyscalablemicro-servicesbasedplatform,

anapproachsimilartoNetflix,Uberandotherleadingtechnologycompanies; • Continuedtobuildoutkeyfeaturesin-house,suchasautomatedclearinghouse(ACH)transfersand

budgetingtools,scheduledforaH1FY18release; • FinalisedChimpChange’stransitiontoanew,experiencedandinnovativesponsorbank;and • ContinuedtoworkonmanyotherbusinessandstrategicinitiativesonwhichtheCompanylooks

forwardtoupdatingthemarketattheappropriatetime. TheserapiddevelopmentsoverFY17sawChimpChangewinthreeprestigiousindustryawards: 1. BestMobileApp;2. StartupoftheYear;and3. ConsumerChampion.

TheseawardswereannouncedatthePayAwards2017,andwerepreviouslywonbyfinancialservicesleadersand innovators including American Express, GoBank, NetSpend and othermajor industry players. To theCompanytheseawardsprovidethird-partyvalidationandrecognitionthatthestrategyofprovidingFintechtoolswithauser-friendlyUserExperienceonaplatformtoempowerChimpChange’scustomersfinanciallyisworking. Onthecorporatefront,theCompanywasinvitedtospeakattheASXSpotlightConferenceinSingaporeandHongKong(May2017),theASXSpotlightConferenceinNewYork(October2017),andtheLDMicroInvitationalConferenceinLosAngeles(June2017). The Company is working to developmultiple banking products to suit consumers in other demographics,enterprisesoftwareservices,andothergrowthopportunitieswithintheFintechspace.

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SignificantchangesinthestateofaffairsContributedequityincreasedby$7,207,000asaresultofcapitalraisedthroughtheyear.Detailsofthechangesincontributedequityaredisclosedinnote15tothefinancialstatements.

OptionsexercisedDuringtheyear510,595shareswereissuedon21June2017pursuanttotheexerciseofoptions.

MatterssubsequenttotheendofthefinancialyearNomatterorcircumstancehasarisensince30June2017thathassignificantlyaffectedtheGroup'soperations,resultsorstateofaffairs,ormaydosoinfutureyearsotherthanassetoutinNote31oftheFinancialStatements.

LikelydevelopmentsandexpectedresultsofoperationsRefertotheReviewofOperationsforfurtherdetails.

Informationondirectors

PeterClare(Non-ExecutiveChairman)ExperienceandexpertiseMrClarehasbeeninthebankingindustrysince1995,includingmostrecentlyastheChiefExecutiveOfficerofWestpacNewZealandLimited,adivisionofWestpacBankingCorporationLimited,from2012to2014.

MrClarehascompletedanMBA(MacquarieUniversity,1990)andaBCominAccounting,FinanceandSystems(UniversityofNewSouthWales,1986).HeisamemberoftheAustralianInstituteofCompanyDirectorsandtheGovernanceInstituteofAustralia,andafellowofCPAAustraliaandFinancialServicesInstituteofAustralasia(FINSIA).

OthercurrentASXdirectorshipsScottishPacificGroupLimited

FormerASXdirectorshipsinlast3yearsRubikFinancialLimitedReffindLimitedSpecialresponsibilitiesMemberoftheAudit&RiskManagementCommittee.

Interestsinsharesandoptions200,000sharesinChangeFinancialLimited.750,000optionsinChangeFinancialLimited.F

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AshleyShilkin(ManagingDirector)ExperienceandexpertiseMrShilkinisthefounderandManagingDirectorofChangeFinancial,basedinLosAngeles,California.

At26hewastheyoungestChiefFinancialOfficerofaA$30millioncompanylistedontheASX(CO2AustraliaLimited).WhileatCO2GroupthecompanygrewtooverA$300millioninmarketcapitalisationinashortperiodoftime.WhileatCO2GrouphetookonanumberofDirectorships.OnebeingDirector/ChiefOffsettingSuperheroofYonderr.com,afreshweb-basedcarbonoffsetcompany.ThesecondwasanappointmenttotheboardofCO2New

Zealand;thecompanythatfacilitatedthefirstmeaningfulinternationalexpansionofCO2Group,whichresultedinmillionsofdollarsofadditionalrevenueforthegroup.

MrShilkinhasaMastersinCommercialLawandaBachelorofCommercewithdoublemajorsinInvestmentFinanceandInternationalBusinessEconomics.

OthercurrentASXdirectorshipsNone

FormerASXdirectorshipsinlast3yearsNone

SpecialresponsibilitiesMemberoftheAudit&RiskManagementCommittee

Interestsinsharesandoptions11,901,965sharesinChangeFinancialLimited.3,500,000optionsinChangeFinancialLimited.

IanLeijer(ExecutiveDirector)ExperienceandexpertiseMrLeijerhasbeencloselyinvolvedwithChangeFinancialsinceitsinception.

MrLeijerisaCharteredAccountantwithover25years’experienceinfinancialanalysis,corporatetransactions,businessstrategyandbusinessmanagement.HewasCFOandCompanySecretaryforover10yearsofformerASXlistedcompanyAvatarIndustriesLimitedwhichoperatedgloballyinanumberofdiverseindustriesincludingminingservices,electronicsdistribution,fabricationofbuildingproductsandprinting.MrLeijerstartedhiscareerwithPriceWaterhousespecialisingincorporatetransactionsandvaluationsbefore

joiningaboutiqueinvestmentbank.

MrLeijercurrentlyworkswithanumberofentitiesonbusinessanalysis,capitalraising(debt&equity)andgeneralmanagement.MrLeijeralsoholdsaBachelorofEconomicsfromtheUniversityofSydney,Australia.



SpecialresponsibilitiesNone

Interestsinsharesandoptions2,872,529sharesinChangeFinancialLimited.250,000optionsinChangeFinancialLimited.

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BenHarrison(Non-ExecutiveDirector)ExperienceandexpertiseMrHarrisonhas10years’experienceinadvisingandinvestingincompanies.Hespent5yearsworkingforaleadingmidcapcorporateadvisoryhousewhereheexecutedcapitalmarketandM&Atransactions.Heiscurrentlyinvolvedintheprivateequityandventurecapitalsector.

MrHarrisonhasbeeninvolvedatboardlevelinanumberofinvesteecompaniesonbehalfofinvestors.HisexperienceextendsbeyondfinancingandM&Ainto:investment,strategy,financialmanagement,corporaterestructuring,corporategovernanceandgeneralmanagement.

MrHarrisonholdsaBachelorofScienceandMastersofAppliedFinanceandInvestment.



SpecialresponsibilitiesChairmanoftheAudit&RiskManagementCommittee.

Interestsinsharesandoptions72,168sharesinChangeFinancialLimited.950,000optionsinChangeFinancialLimited.

TeresaClarke(Non-ExecutiveDirector)ExperienceandexpertiseTeresaClarkeisHarvardBusinessSchool(MBA),HarvardLawSchool(JD)andHarvardUniversity(Economics)Graduate.MsClarkehadanesteemed12-yearcareerininvestmentbankingatGoldmanSachs;includingperformingtheroleofManagingDirectorandVicePresident.

Oneofhermajorcontributionswastoplayakeyroleinlaunchingthefirm'sGlobalMarketsInstitute.Shelatermovedbackintotheinvestmentbankingdivisionwheresheledmergersandacquisitions,andcorporatefinancetransactionsforFortune500companiesintheUSandEurope.

MsClarkeisaCalifornianativewhonowspendshertimebetweenNewYorkandSouthAfrica;workingoneCommercewebsiteAfrica.com,whichsheFoundedin2010.



Interestsinsharesandoptions250,000optionsinChangeFinancialLimited. F

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AndrewPipolo(Non-ExecutiveDirector)ExperienceandexpertiseAndrewPipolowasManagingDirectorofbothPayPalAustraliaandthenPayPalJapanduringtheirinternationalexpansion.AndrewwasthefirstPayPalemployeeintheAsiaPacificregionandduringhistimeAndrewsuccessfullyscaledPayPaltothepointofbeingoneofthemostwidelyusedpaymentsystemsinbothcountries.

DuringthefiveyearsAndrewwasgrowingPayPal,PayPalAustraliawasthefastestgrowingoperationwithinthePayPalGroup.

SinceleavingPayPalin2011Andrewhasowned,operatedandconsultedforcompaniesintheFinTechspace,withaparticularfocusonpayments.MostrecentlyAndrewwasakeymemberofLoopPay,auniquemobilewalletsolution.LoopPaywasultimatelyacquiredbySamsungPayin2015.

PriortoPayPalAndrewwasatMastercardinthepositionofHeadofeCommerce,AcceptanceandCrossBorderAcquiring.DuringhissevenyearsatMastercardAndrewwasresponsibleforestablishingandthenexpandingeCommerceandMerchantAcceptanceDivisionsthroughoutcontinentalEuropeandtheUK.


FormerASXdirectorshipsinlast3yearsBPSTechnologyLtd

Interestsinsharesandoptions250,000optionsinChangeFinancialLimited.CompanysecretaryTheCompanysecretaryisMrDuncanCornish.MrCornishwasappointedtothepositionofCompanysecretaryon2July2015.MrCornishhasmanyyears’commercialandfinanceexperience,providingcompanysecretarialservicestopubliclylistedcompanies.MeetingsofdirectorsThenumbersofmeetingsoftheCompany'sboardofDirectorsandofeachboardcommitteeheldduringtheyearended30Jun2017,andthenumbersofmeetingsattendedbyeachDirectorwere: Fullmeetingsofdirectors Audit&RiskCommittee

meetings

A B A B

PeterClare 10 11 2 2

AshelyShilkin 11 11 2 2

IanLeijer1 11 11 2 2

BenHarrison 11 11 2 2

TeresaClarke1 8 8 1 1

AndrewPipolo 0 0 0 0

1MrLeijerandMsClarkeattendedtheAudit&RiskCommitteemeetingbyinvitationA=NumberofmeetingsattendedB=NumberofmeetingsheldduringthetimetheDirectorheldofficeorwasamemberofthecommitteeduringtheyear

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Remunerationreport(audited)TheDirectorsarepleasedtopresentyourCompany's2017remunerationreportwhichsetsoutremunerationinformationforChangeFinancialLimited'snon-executiveDirectors,executiveDirectorsandotherkeymanagementpersonnel.Non-executivedirectorremunerationpolicyTheshareholdersofChangeFinancialLimitedon11August2015approved,forthepurposesoftheASXListingRulesandtheGroup’sConstitution,anincreaseinthemaximumaggregateannualnon-executivedirectors’feesto$500,000,withsuchfeestobeallocatedtothenon-executivedirectorsastheboardofdirectorsmaydetermine.ExecutiveremunerationpolicyandframeworkTheobjectiveoftheGroup’sexecutiverewardframeworkistoensurerewardforperformanceiscompetitiveandappropriatefortheresultsdelivered.Theframeworkalignsexecutiverewardwithachievementofstrategicobjectivesandthecreationofvalueforshareholders,andconformswithmarketpracticefordeliveryofreward.Theboardensuresthatexecutiverewardsatisfiesthefollowingkeycriteriaforgoodrewardgovernancepractices:

• competitiveandreasonable,enablingthecompanytoattractandretainkeytalent;• alignedtothecompany’sstrategicandbusinessobjectivesandthecreationofshareholdervalue;• performancelinkage/alignmentofexecutivecompensation;• transparent;• acceptabletoshareholders;• alignmenttoshareholders'interests;• attractsandretainshighcalibreexecutives;• alignmenttoprogramparticipants'interests;• rewardscapabilityandexperience;and• providesrecognitionforcontribution.

Theexecutiveremunerationandrewardframeworkhastwocomponents:

§ basepayandbenefits,includingsuperannuation;and§ longtermincentives.

(a) ElementsofremunerationBasepayandbenefitsExecutivesareofferedacompetitivebasepaythatcomprisesthefixedcomponentofpayandrewards.Basepayforexecutivesisreviewedannuallytoensuretheexecutive'spayiscompetitivewiththemarket.Anexecutive'spayisalsoreviewedonpromotion.Therearenoguaranteedbasepayincreasesincludedinanyexecutives'contracts.(b) DetailsofremunerationDetailsoftheremunerationofthedirectors,thekeymanagementpersonneloftheGroup(asdefinedinAASB124RelatedPartyDisclosures)ofChangeFinancialLimitedandtheGrouparesetoutinthefollowingtables.

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ThekeymanagementpersonnelofChangeFinancialLimitedincludesthedirectorsaslistedbelow:

• PeterClare(Chairman)• AshleyShilkin(ManagingDirector)• IanLeijer(ExecutiveDirector&CFO)• BenHarrison(Non-ExecutiveDirector)• TeresaClarke(Non-ExecutiveDirector)(appointed14October2016)

InadditiontothedirectorsthefollowingexecutivesthatreportdirectlytotheBoardarekeymanagementpersonnel:

• ClaytonFossett(ChiefOperatingOfficer)• YoungLee(ChiefFinancialOfficer)• NickRoberts(ChiefMarketingOfficer)

ThefollowingtableshowsdetailsoftheremunerationexpenserecognisedfortheGroup'sexecutivekeymanagementpersonnelforthecurrentandpreviousfinancialyearmeasuredinaccordancewiththerequirementsoftheaccountingstandards.2017Name ShortTermBenefits Post

EmploymentBenefits

Longterm

benefit

Sharebased

payments

Total

Cashsalaryandfees

Cash Bonus

NonMonetaryBenefits

US$ US$ US$ US$ US$ US$ US$

Non-executivedirectors PeterClare 52,795 - - - - - 52,795BenHarrison 60,956 - - - - - 60,956TeresaClarke 40,208 - - - - 27,495 67,703Subtotal 153,959 - - - - 27,495 181,454 Executivedirectors AshleyShilkin 183,461 - 10,000 13,077 - 130,365 336,903IanLeijer 63,348 - - - - - 63,348Subtotal 246,809 - 10,000 13,077 - 130,365 400,251 KeyManagement ClaytonFossett 163,137 - - - - 25,026 188,163YoungLee 142,885 - - - - 38,537 181,422NickRoberts 134,685 - - - - 62,917 197,602Subtotal 440,707 - - - - 126,480 567,187 Total 841,475 - 10,000 13,077 - 284,340 1,148,892

Theamountforsharebasedpaymentsrepresentstheexpenserecognisedinthecurrentfinancialyearforoptionsgrantedasremunerationinthecurrentandprioryears.Ofthetotalamountof$284,520,$223,080istheexpenserelatedtooptionsgrantedinpriorperiodand$61,440relatestooptionsgrantedinthecurrentperiod.Setoutbelowinsectiond(i)arethedetailsofoptionsissuedasremunerationinthecurrentfinancialyear.ItalsonotedthattheamountpaidtoMrClarehasincreasedduetofullyearimpactofthehigheramountpaidtoMrClareinhisroleasChairmanwhichtookeffectfromJanuary2016.

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2016Name ShortTermBenefits Post

EmploymentBenefits

Longterm

benefit

Sharebased

payments

Total

Cashsalaryandfees

Cash Bonus

NonMonetaryBenefits

US$ US$ US$ US$ US$ US$ US$

Non-executivedirectors PeterClare 40,144 - - - - 115,055 155,199BenHarrison 86,324 - - - - 63,919 150,243Subtotal 126,468 - - - - 178,974 305,442 Executivedirectors AshleyShilkin 180,769 596,000 10,000 5,000 - 455,418 1,247,187IanLeijer 35,114 89,460 - - 100,978 225,552Subtotal 215,883 685,460 10,000 5,000 - 556,396 1,472,739 KeyManagement ClaytonFossett 154,616 - - - - 55,037 209,653NickRoberts 150,994 - - - - 15,870 166,864Subtotal 305,610 - - - - 70,907 376,517 Total 647,961 685,460 10,000 5,000 - 806,277 2,154,698

(c) ServiceagreementsPeterClare(Non-ExecutiveChairman)

• ServicesprovidedthroughSharedRunwayPtyLtd(SharedRunway);• Termofagreement–nofixedterm;• SharedRunwayreceivesanannualfeeofA$70,000forservicesprovidedbyMrClarepayable

monthlyonproratabasis;and• SharedRunwayisentitledtoreimbursementofspecifiedexpensesincurredinprovidingservices.

AshelyShilkin(ManagingDirector)

• Termofagreement–nofixedterm;• Basesalaryis$180,000perannumreviewedannually;• Annual$10,000superannuationand$10,000carallowance;• Entitledtoreimbursementofspecifiedexpensesincurredinhisemployment;• CanparticipateundertheCompanyESOP;• Employmentcanbeterminatedgivingsixmonth’snoticeinwriting;and• MrShilkinisemployedunderthelawsoftheStateofCalifornia,US.

IanLeijer(ExecutiveDirectorandCFO)

• ServicesprovidedthroughUnimainPtyLtd(Unimain);• Termofagreement–6monthsunlessterminatedgivenonemonth’snotice,automaticallyextended

foradditionalperiodsofonemontheachuntilterminatedoranewagreementisenteredinto.UnimainreceivesaconsultingfeeofA$2,000perdayforservicesprovidedbyMrLeijer;and

• Unimainisentitledtoreimbursementofspecifiedexpensesincurredinprovidingservices.

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BenHarrison(Non-ExecutiveDirector)

• ServicedprovidedthroughRiverfireCapitalVenturesPtyLtd(Riverfire);• Termofagreement–12monthsunlessterminatedgivenonemonth’snotice,automatically

extendedforadditionalperiodsofonemontheachuntilterminatedoranewagreementisenteredinto;

• RiverfirereceivesreceivesanannualfeeofA$40,000forservicesprovidedbyMrHarrisonpayablemonthlyonproratabasis,whichtookeffectfromJanuary2017.PriortothatRiverfirereceivedaconsultingfeeof$1,500perday.;and

• Riverfireisentitledtoreimbursementofspecifiedexpensesincurredinprovidingservices.TeresaClarke(Non-ExecutiveDirector)appointed14August2016

• Termofagreement–nofixedterm;• AnnualfeeofUS$40,000payablemonthlyonproratabasis;and• Reimbursementofspecifiedexpensesincurredinundertakingtherole.

AndrewPipolo(Non-ExecutiveDirector)appointed1September2017

• Termofagreement–nofixedterm;• AnnualfeeofA$50,000payablemonthlyonproratabasis;and• Reimbursementofspecifiedexpensesincurredinundertakingtherole.

ClaytonFossett(COO)

• Termofagreement–nofixedterm;• Basesalaryisreviewedannually;• Entitledtoreimbursementofspecifiedexpensesincurredinhisemployment;• CanparticipateundertheCompanyESOP;• Employmentcanbeterminatedgivingonemonth’snoticeinwriting;and• MrFossettisemployedunderthelawsoftheStateofCalifornia,US.

YoungLee(CFO)

• Termofagreement–nofixedterm;• Basesalaryisreviewedannually;• Entitledtoreimbursementofspecifiedexpensesincurredinhisemployment;• CanparticipateundertheCompanyESOP;• Employmentcanbeterminatedgivingonemonth’snoticeinwriting;and• MrLeeisemployedunderthelawsoftheStateofCalifornia,US.

NickRoberts(CMO)

• Termofagreement–nofixedterm;• Basesalaryisreviewedannually;• Entitledtoreimbursementofspecifiedexpensesincurredinhisemployment;• CanparticipateundertheCompanyESOP;• Employmentcanbeterminatedgivingtwomonth’snoticeinwriting;• IfMrRobertsemploymentisterminatedwithinthefirst12monthsofemploymentwithoutcause,

thecompanymustgiveMrRobertsthreemonths’notice(orpaymentinlieu)andallow50,000optionstovest;and

• MrRobertsisemployedunderthelawsoftheStateofCalifornia,US.

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(d) Equityinstrumentdisclosuresrelatingtokeymanagementpersonnel(i) OptionsissuedtoKeyManagementPersonnelasremunerationThefollowingoptionswereissuedaslongtermincentivestoKeyManagementPersonnelasremunerationduringthefinancialperiod.Alloptionsareexercisableuponvestinguntiltheexpirydate.Name Number Grant

DateStrikePrice

ExpiryDate2

FairValueatGrantDate$

TotalNumberVested

Vested%

TotalNumberExercised

VestingConditions

Directors

TeresaClarke 250,000 18Nov16 A$1.00 31Dec18 27,495 250,000 100% - Nil

Keymanagement

ClaytonFossett 250,000 10Jan17 A$0.657 31Jan20 48,494 41,667 16.67% - Note1

YoungLee 250,000 10Jan17 A$0.657 31Jan20 49,494 41,667 16.67% - Note1

NickRoberts 200,000 10Jan17 A$0.657 31Jan20 38,795 33,333 16.67% - Note1

Note1 Theoptionsvestasfollows: 16.67% VestImmediately 16.67% Veston31December2017 33.33% Veston31December2018 33.33% Veston31December2019Note2 OptionsmayexpireearlierthantheExpirydateifapersonceasestobeadirectororanemployeeoftheCompany.

(ii) OptionHoldingsThenumbersofoptionsintheCompanyheldduringthefinancialyearbyeachDirectorofChangeFinancialLimitedandotherkeymanagementpersonneloftheGroup,includingtheirpersonallyrelatedparties,aresetoutbelow.2017Name Balanceat

thestartoftheperiod

Grantedduringthe

year

Exercisedduringthe

year

Balance atthe end oftheperiod

TotalVestedat30Jun17

Exercisableat30June17

Unexercis-ableat

30June2017 Directors

PeterClare 750,000 - - 750,000 750,000 750,000 -

AshleyShilkin 3,500,000 - - 3,500,000 1,000,000 1,000,000 2,500,000

IanLeijer 250,000 - - 250,000 250,000 250,000 -

BenHarrison 950,000 - - 950,000 950,000 950,000 -

TeresaClarke - 250,000 - 250,000 250,000 250,000 -

Keymanagement

ClaytonFossett 400,000 250,000 - 650,000 341,667 341,667 308,333

YoungLee 250,000 250,000 - 500,000 91,667 91,667 408,333

NickRoberts 600,000 200,000 - 800,000 133,333 133,333 666,667

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2016Name Balanceat

thestartoftheperiod

Grantedduringthe

year

Exercisedduringthe

year

Balance atthe end oftheperiod

TotalVestedat30Jun16

Exercisableat30June16

Unexercis-ableat

30June2016 Directors

PeterClare 300,000 450,000 - 750,000 750,000 750,000 -

AshleyShilkin 6,183,303 3,500,000 6,183,303 3,500,000 1,000,000 1,000,000 2,500,000

IanLeijer 1,322,440 250,000 1,322,440 250,000 250,000 250,000 -

BenHarrison 700,000 250,000 - 950,000 950,000 950,000 -

Keymanagement

ClaytonFossett 300,000 100,000 - 400,000 200,000 200,000 200,000

NickRoberts - 600,000 - 600,000 - - 600,000

Nooptionholder(KeyManagementPersonnelorotherwise)hasanyrightundertheoptionstoparticipateinnewissuesofsecuritiesintheCompanymadebytheCompanytoitsshareholdersgenerally.IntheeventofareconstructionofthecapitaloftheCompanyoranissueofBonussharestheoptionstrikepriceand/orthenumberofoptionswillbeadjustedsuchthatnobenefitisgainedorlostbyoptionholdersasaresultofthatreconstructionorbonusshareissue.

(iii) ShareholdingsThenumbersofsharesintheCompanyheldduringthefinancialyearbyeachDirectorofChangeFinancialLimitedandotherkeymanagementpersonneloftheGroup,includingtheirpersonallyrelatedparties,aresetoutbelow.Therewerenosharesgrantedduringthereportingperiodascompensation.Yearto30June2017 Balanceatthe

startoftheperiod

Receivedduringtheyearonexerciseof

options

Otherchangesduringtheperiod

Balanceattheendoftheperiod

DirectorsofChangeFinancialLimited

PeterClare 200,000 - - 200,000

AshleyShilkin 11,901,965 - - 11,901,965

IanLeijer 2,872,529 - - 2,872,529

BenHarrison 43,668 - 28,500 72,168

TeresaClarke - - - -

OtherkeymanagementpersonneloftheGroup

ClaytonFossett - - - -

YoungLee - - - -

NickRoberts - - - -

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Yearto30June2016Balanceatthestartoftheperiod

Receivedduringtheyearonexerciseof

options

Otherchangesduringtheperiod

Balanceattheendoftheperiod

DirectorsofChangeFinancialLimited

PeterClare 100,000 - 100,000 200,000

AshleyShilkin 5,718,662 6,183,303 11,901,965

IanLeijer 1,450,089 1,322,440 100,000 2,872,529

BenHarrison 43,668 - - 43,668

OtherkeymanagementpersonneloftheGroup

ClaytonFossett - - - -

NickRoberts - - - -

EndofRemunerationReportSharesunderoption

GrantDate Expiry StrikePrice VestingConditions Number

1Dec2014 1Dec2017 A$0.49 No 1,487,136

31Dec2014 31Dec2019 A$0.40 No 1,500,000

1Apr2015 1Apr2018 A$0.49 No 50,000

1Apr2015 20Oct2018 A$0.49 Yes 50,000

1Apr2015 20Oct2019 A$0.49 Yes 100,000

1Apr2015 20Oct2020 A$0.49 Yes 100,000

18Apr2016 31Dec2018 A$1.00 No 2,100,000

18Apr2016 18Apr2021 A$1.50 No 1,000,000

18Apr2016 18Apr2021 A$2.35 No 1,500,000

18Apr2016 18Apr2019 A$1.00 Yes 1,870,000

20Apr2016 20Apr2019 A$1.00 No 1,500,000

15Dec2016 31Dec2018 A$1.00 No 250,000

18Jan2017 20Jan2018 A$0.657 Yes 1,890,000

TOTAL 13,397,136

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IndemnityandInsuranceofofficersInsuranceofofficersDuringthefinancialyear,theGrouppaidapremiuminrespectofacontractinsuringthedirectorsofthecompany(asnamedabove),thecompanysecretary,andallexecutiveofficersofthecompanyandofanyrelatedbodycorporateagainstaliabilityincurredassuchadirector,secretaryorexecutiveofficertotheextentpermittedbytheCorporationsAct2001.Thecontractofinsuranceprohibitsdisclosureofthenatureoftheliabilityandtheamountofthepremium.TheGrouphasnototherwise,duringorsincethefinancialyear,excepttotheextentpermittedbylaw,indemnifiedoragreedtoindemnifyanofficerorauditorofthecompanyorofanyrelatedbodycorporateagainstaliabilityincurredassuchanofficerorauditor.Non-auditservicesTheCompanymaydecidetoemploytheauditoronassignmentsadditionaltotheirstatutoryauditdutieswheretheauditor'sexpertiseandexperiencewiththeCompanyand/ortheGroupareimportant.Detailsofamountspaidorpayabletotheauditorfornon-auditservicesprovidedduringtheyearareoutlinedatnote27tothefinancialstatements.BasedonadviceprovidedbytheAuditandRiskManagementCommittee,theDirectorshaveformedtheviewthattheprovisionofnon-auditservicesiscompatiblewiththegeneralstandardofindependenceforauditors,andthatthenatureofnon-auditservicesmeansthatauditorindependencewasnotcompromised.RoundingThecompanyisofakindreferredtoinASICCorporations(RoundinginFinancial/Directors’Reports)Instrument2016/191,relatedtothe'roundingoff'ofamountsinthefinancialstatements.AmountsinthefinancialstatementshavebeenroundedoffinaccordancewiththatLegislativeInstrumenttothenearestthousanddollars,unlessotherwiseindicated.Dividends-ChangeFinancialLimitedTheDirectorsofChangeFinancialLimiteddonotrecommendthepaymentofadividendfortheyearending30Jun2017(2016:Nil).Auditor'sindependencedeclarationAcopyoftheauditor'sindependencedeclarationasrequiredundersection307CoftheCorporationsAct2001issetoutonpage22.

AuditorPitcherPartnerscontinuesinofficeinaccordancewithsection327oftheCorporationsAct2001.ThisreportismadeinaccordancewitharesolutionofDirectors,pursuanttosection298(2)oftheCorporationsAct2001.Dated30September2017

AshleyShilkinFounderandManagingDirector

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AUDITOR’SINDEPENDENCEDECLARATION

The Directors Change Financial Limited C/- 110 S Fairfax Avenue #A11-177 Los Angeles CA 90036

Auditor’s Independence Declaration

As lead auditor for the audit of Change Financial Limited for the year ended 30 June 2017, I declare that, to the best of my knowledge and belief, there have been:

(i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and

(ii) no contraventions of APES 110 Code of Ethics for Professional Accountants.

This declaration is in respect of Change Financial Limited and the entities it controlled during the period.

PITCHER PARTNERS J. J. EVANS Partner Brisbane, Queensland 30 September 2017

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CORPORATEGOVERNANCESTATEMENTTheCompanyiscommittedtoimplementingandmaintaininggoodcorporategovernancepolicies.ChangeFinancial Limited’sCorporateGovernanceStatementhas beenadoptedandstructuredwithreferencetotheAustralianSecuritiesExchange(ASX)CorporateGovernanceCouncil-CorporateGovernance Principles and Recommendations, 3rd Edition(CGCRecommendations).The Company’s practices are largely consistentwith the CGC recommendations, and the Board hasmadeappropriate statements reportingon theadoptionof the recommendations.Where theCompany’scorporategovernancepracticesdonotcorrelatewiththepracticesrecommendedbytheCGC,theCompanyisworkingtowardscompliance;however,itdoesnotconsiderthatallpracticesarecurrently appropriate for the Company due to the size and scale of its operations. The Board hasofferedfulldisclosureandreasonsfortheadoptionofCompanypracticesandthesearesummarisedinthisCorporateGovernanceStatement.TheBoardisoftheviewthatwiththeexceptionofthedeparturesfromtheASXGuidelinesnotedbelowitotherwisecomplieswithalloftheASXGuidelines.Theinformationinthisstatementiscurrentasat30September2017andhasbeenapprovedbytheBoard.Principle1–LaysolidfoundationsformanagementandoversightFunctions,powers&responsibilitiesoftheBoardTheBoardofDirectorsispivotalintherelationshipbetweenshareholdersandmanagementandtheroleandresponsibilitiesoftheBoardunderpincorporategovernance.TheBoardiscommittedtoadministeringthepoliciesandprocedureswithopennessandintegrity,pursuingthetruespiritofcorporategovernancecommensuratewiththeGroup’sneeds.Generally,thepowersandobligationsoftheBoardaregovernedbytheCorporationsActandthegenerallaw.Withoutlimitingthosematters,theBoardexpresslyconsidersitselfresponsibleforthefollowing:• ensuringcompliancewiththeCorporationsAct,ASXListingRules(whereappropriate)andallother

relevantlaws;• providingleadershipanddeveloping,implementingandmonitoringstrategicoperationalandfinancialobjectives

fortheCompanyandtheoverallperformanceoftheCompany;• appointingappropriatestaff,consultantsandexpertstoassistintheCompany'soperations;• ensuringappropriatefinancialandriskmanagementcontrolsareimplemented;• setting,monitoringandensuringappropriateaccountabilityandaframeworkforremunerationof

Directorsandexecutiveofficers;• establishingandoverseeingtheCompany’sprocessformakingtimelyandbalanceddisclosureofall

materialinformationinaccordancewiththeASXListingRules;• implementingappropriatestrategiestomonitorperformanceoftheBoardinimplementingitsfunctions

andpowers;• implementingandoverseeingtheCompany’sriskmanagementframeworktoenablerisktobe

identified,assessedandmanagedandtosettheriskappetitetheBoardexpectsManagementtooperatewithin;

• appointingtheChairperson;• appointingandremovingtheChiefExecutiveOfficerandCompanySecretary;• approvingtheappointmentand,whereappropriate,removalofmembersofManagement;• contributingtoandapprovingManagement'sdevelopmentofcorporatestrategyandperformance

objectives;• monitoringManagement'simplementationofstrategyandperformancegenerally,andensuring

appropriateresourcesareavailabletoManagement;

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• monitoringtheeffectivenessoftheCompany’sgovernancepractices;• approvingandmonitoringtheprogressofmajorcapitalexpenditure,capitalmanagementand

acquisitionsanddivestitures;• approvingtheannualbudget;• liaisingwiththeCompany'sexternalauditors;• approvingandmonitoringfinancialandotherreportingsystemsoftheCompany(includingexternal

audit)andtheintegrityofthesesystems;and• appointingandoverseeingCommitteeswhereappropriatetoassistintheabovefunctionsandpowers.TheBoardhasdelegatedtotheManagingDirectordaytodayresponsibilityforrunningtheaffairsoftheCompanyandtoimplementthepoliciesandstrategysetbytheBoard.TheBoardalsodelegatestoseniormanagementtheresponsibilitiesfortheday-to-dayactivitiesleadingtowardachievementoftheCompany’sstrategicdirectionwithinagreedboundariesandauthoritylimitations.StructureoftheBoard

ThepolicyandproceduresfortheselectionandappointmentofnewDirectorsisthatcandidatesareconsideredandselectedbyreferencetoanumberoffactorswhichinclude,butarenotlimitedto,theirrelevantexperienceandachievements,compatibilitywithotherBoardmembers,andcredibilitywithintheCompany’sscopeofactivities.DirectorsareinitiallyappointedbythefullBoardsubjecttoelectionbyshareholdersatthenextAnnualGeneralMeeting.TheCompanyhasappropriateproceduresinplacetoensurethatmaterialinformationrelevanttoadecisiontoelectorre-electaDirector(includingwhetherDirectorssupporttheelectionorre-election)isdisclosedinthenoticeofmeetingprovidedtoshareholders.AteachAnnualGeneralMeetingthefollowingDirectorsautomaticallyretireandareeligibleforre-appointment:• anyDirectorwhohasbeenelectedintheofficeforaperiodinexcessofthreeconsecutiveyearsor

untilthethirdannualgeneralmeetingfollowingher/hisappointment,whicheverislonger,withoutsubmittinghim/herselfforre-election;

• anyDirectorwhowasappointedbytheDirectorsduringtheyeartofillacasualvacancyorasanadditiontotheexistingDirectors;

• one-thirdoftheDirectorsor,iftheirnumberisnotamultipleofthree,thenthegreatestofoneorthenumbernearesttobutnotexceedingone-third.

Directorandseniorexecutiveagreements

NewDirectorsreceivetheletteroftheirappointmentandadeedofindemnity,insuranceandaccess.Non-executiveDirectorsarenotappointedforfixedterms.ExecutiveDirectorshavewrittenagreements,whichsetoutthematerialtermsofengagement,includingadescriptionofpositionandduties,reportinglines,remunerationarrangementsandterminationrightsandentitlements.Eachseniorexecutiveentersintoanagreementwhichsetsoutthematerialtermsofengagement,includingadescriptionofpositionandduties,reportinglines,remunerationarrangementsandterminationrightsandentitlements.Contractdetailsofseniorexecutives,whicharekeymanagementpersonnel,aresummarizedintheRemunerationReportintheAnnualReport.

CompanySecretary

TheCompanySecretaryisaccountabledirectlytotheBoard(throughtheChairman)forfacilitatingtheCompany’scorporategovernanceprocessesandtheproperfunctioningoftheBoard.EachDirectorisentitledtoaccesstheadviceandservicesoftheCompanySecretary.

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InaccordancewiththeCompany’sConstitution,theappointmentandremovaloftheCompanySecretaryisamatterfortheBoardasawhole.AcopyoftheConstitutionisavailableontheCompanywebsiteunderCorporateGovernanceandthedetailsoftheCompanySecretaryaresetoutintheDirectors’ReportcontainedwithintheAnnualReport.

Diversity

TheBoardhasnotadoptedaformalDiversityPolicyatthisstage.TherecruitmentandselectionprocessesadoptedbytheCompanyensurethatstaffandmanagementareselectedinanon-discriminatorymannerbasedonmerit.TheCompanyrespectsandvaluesthecompetitiveadvantageofdiversity(whichincludesbutisnotlimitedtogender,age,disability,ethnicity,maritalorfamilystatusreligiousorculturalbackground),andthebenefitofitsintegrationthroughouttheCompanyinordertoimprovecorporateperformance,increaseshareholdervalueandmaximisetheprobabilityofachievementoftheCompany’sgoals.However,theBoardofDirectorsdoesnotbelievethattheCompanyiscurrentlyofasufficientsizetojustifytheestablishmentofformalandmeasurableobjectives,havingregardtothenatureandscaleofitsactivities.

Boardreviews

TheBoarddidnotconductaperformanceevaluationduringthelast12monthsandhasnotadoptedaperformanceevaluationpolicy.TheCompanybelievesthatthesmallsizeoftheBoardandthecurrentscaleoftheCompany’sactivitiesmakestheestablishmentofaformalperformanceevaluationprocedureunnecessary.PerformanceevaluationisadiscretionarymatterforconsiderationbytheentireBoard.InthenormalcourseofeventstheBoardreviewsperformanceofthemanagement,DirectorsandtheBoardasawhole.Achievementofgoalsandbusinessdevelopmentandcomplianceissuesareevaluatedregularlyonaninformalbasis.TheBoardisprovidedwiththeinformationitneedstodischargeitsresponsibilitieseffectively.AllDirectorshaveaccesstocorporategovernancepoliciesandmaterialcontractsenteredintobytheCompany.TheDirectorsalsohaveaccesstotheCompanySecretaryforallBoardandgovernance-relatedissues.

Managementreviews

TheBoarddidnotconductaperformanceevaluationofseniorexecutivesduringthelast12monthsandhasnotadoptedaperformanceevaluationpolicy.TheCompanybelievesthatthesmallsizeoftheexecutiveteamandthecurrentscaleoftheCompany’sactivitiesmakestheestablishmentofaformalperformanceevaluationprocedureunnecessary.PerformanceevaluationisadiscretionarymatterforconsiderationbytheentireBoard.InthenormalcourseofeventstheBoardreviewsperformanceofthemanagement,DirectorsandtheBoardasawhole.Achievementofgoalsandbusinessdevelopmentandcomplianceissuesareevaluatedregularlyonaninformalbasis.

PRINCIPLE2–STRUCTURETHEBOARDTOADDVALUENominationcommittee

TheBoardhasnotformallyestablishedaNominationsCommitteeastheDirectorsconsiderthattheCompanyisnotofasizenorareitsaffairsofsuchcomplexityastojustifytheformationofthisCommittee.TheBoardconsidersthatitisabletodealefficientlyandeffectivelywithBoardcompositionandsuccessionissueswithoutestablishingaseparateNominationCommitteeandindoingso,theBoardwillbeguidedbytheCharterwhichissetoutintheCompany’sCorporateGovernanceCharterandcanbeaccessedontheCompany’swebsiteunderCorporateGovernance.TheCompanywillreviewthispositionannuallyanddeterminewhetheraNominationsCommitteeneedstobeestablished.

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Skillsandexperience

DetailsofthecurrentDirectors,theirskills,experienceandqualificationsplusarecordofattendanceatmeetingsisincludedintheDirectors’ReportwithintheAnnualReport.AtthisstageoftheCompany’sdevelopmenttheBoardbelievesthereisanappropriatemixofskills,experienceanddiversityontheBoard.HowevertheBoardwillcontinuetomonitoritscompositionwithaviewtoensuringishasanappropriatemixofskillsanddiversity.

Independenceandlengthofservice

TheCompany’sBoardiscomprisedofPeterClare,BenjaminHarrison,TeresaClarke,AndrewPipoloAshleyShilkinandIanLeijer.

ThelengthofserviceofeachDirectorissetoutbelowandcanbefoundintheDirectors’ReportwithintheAnnualReport.

Name Appointmentdate Lengthofservice

PeterClare 16April2015 31months

BenjaminHarrison 16January2015 34months

IanLeijer 16January2015 34months

AshleyShilkin 6May2011 6yearsand6months

TeresaClarke 14October2016 12months

AndrewPipolo 1August2017 2months

PresentlyundertheASXGuidelinesitisconsideredthattherearethreeindependentDirectors,beingMrClare,MsClarkeandMrPipolo.ThetablebelowdetailsthereasonswhytheremainingDirectorsarenotconsideredtobeindependent:

Name Position Reasonfornon-compliance

BenjaminHarrison Non-ExecutiveDirector DirectorwasemployedinanexecutivecapacityintheleaduptotheCompany’sIPO(i.e.withinthelastthreeyears)

IanLeijer FinanceDirector Directorisemployedinanexecutivecapacity

AshleyShilkin ManagingDirector DirectorisemployedinanexecutivecapacityandisasubstantialsecurityholderoftheCompany

BasedonASXGuidelinestheBoardisoftheviewthattheChairman,MrClareisindependent.However,theBoardisoftheviewthatitdoesnotconsistofamajorityofindependentDirectors.TheCompanybelievesthatgiventhesizeandscaleofitsoperations,non-compliancebytheCompanywiththisrecommendationwillnotbedetrimentaltotheCompanyoritsshareholders.

Principle3–ActethicallyandresponsiblyCodeofconduct

TheCompanyhasestablishedaCorporateCodeofConductandCorporateEthicsPolicyfortheBoard,managementandemployeesoftheCompany.TheCodesrequirethatDirectors,managementandemployeesmaintainhighstandardsofintegritybyensuringthatallbusinessactivitiesareconductedlegallyandethicallyincompliancewiththeletterandspiritofboththelawandCompanypolicies.TheCodeofConductandEthicsPolicyissetoutintheCompany’sCorporateGovernanceCharterandcanbeaccessedontheCompany’swebsiteunderCorporateGovernance.

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PRINCIPLE4–SAFEGUARDINTEGRITYINCORPORATEREPORTINGAuditCommitteeTheBoardhasestablishedanAuditandRiskManagementCommittee.TheCommitteeis:

• MrBenjaminHarrison–Non-ExecutiveDirector(ChairmanoftheCommittee)• MrPeterClare–Non-Executive(Independent)Director• MrAshleyShilkin–ManagingDirector

CGCrecommendation4.1statesthattheauditcommitteeshouldconsistofamajorityofindependentDirectorsandallbenon-executiveDirectors.MessrsHarrisonandShilkinarenotconsideredtobeindependentasdetailedinsection2.3andMrShilkinisanExecutiveDirector.TheCompanybelievesthatgiventhesizeandscaleofitsoperations,non-compliancebytheCompanywillnotbedetrimentaltotheCompany.TheexperienceandqualificationsofmembersoftheAuditandRiskManagementCommitteearedetailedintheAnnualReport.DetailsofCommitteemembers’attendanceatAuditandRiskManagementCommitteemeetingswillalsobeabletobeaccessedintheDirectors’ReportwithintheAnnualReport.TheCompanyhasadoptedanAuditandRiskManagementCommitteeChartersettingouttheCommitteeaswellasreportingrequirements.TheCharterwillbereviewedannuallytodeterminewhetheranychangesarenecessary.AcopyoftheCharterisincludedintheCorporateGovernanceCharterandcanbeaccessedontheCompany’swebsiteunderCorporateGovernance.

TheresponsibilitiesoftheAuditandRiskManagementCommitteewithrespecttoauditareto:• reviewandmakerecommendationstotheBoardinrelationtowhethertheCompany’sfinancial

statementsreflecttheunderstandingofthemembersoftheCommittee,andotherwiseprovideatrueandfairviewofthefinancialpositionandperformanceoftheCompany;

• reviewandmakerecommendationstotheBoardinrelationtotheappropriatenessoftheaccountingjudgmentsorchoicesexercisedbyManagementinpreparingtheCompany’sfinancialstatements;

• ensurethatthequalityoffinancialcontrolsisappropriateforthebusinessoftheCompany;• reviewthescope,resultsandadequacyofexternalandinternalaudits;• requiretheexternalauditorstoreporttotheCommittee;• monitorcorporateconductandbusinessethicsandongoingcompliancewithlawsandregulations;• maintainopenlinesofcommunicationbetweentheBoard,Managementandtheexternalauditors,thus

enablinginformationandpointsofviewtobefreelyexchanged;• reviewmattersofsignificanceaffectingthefinancialwelfareoftheCompany;• ensurethatsystemsofaccountingandreportingoffinancialinformationtoshareholders,regulators

andthegeneralpublicareadequateandmakingrecommendationsinthisregard;• reviewtheCompany'sinternalfinancialcontrolsystem;• considerandmakerecommendationsregardingtheappointmentandremovaloftheexternalauditor

andapprovingtheremunerationandtermsofengagementoftheexternalauditor;• monitorandreviewtheexternalauditor'sindependence,objectivityandeffectiveness,takinginto

considerationrelevantprofessionalandregulatoryrequirementsandtheperformanceoftheexternalauditor;and

• developandimplementpolicyontheengagementoftheexternalauditortosupplynon-auditservices,takingintoaccountrelevantethicalguidanceregardingtheprovisionsofnon-auditservicesbytheexternalauditfirmandmakerecommendationsonanyproposalbytheexternalauditortoprovidenon-auditservices.

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Externalauditor

PitcherPartnerswasappointedastheCompany’sexternalauditorbyshareholdersataGeneralMeetingheldon30November2015.PitcherPartnershasadvisedtheCompanythattheirpolicyofauditpartnerrotationrequiresachangeintheleadengagementpartnerandreviewpartnerafteraperiodoffiveyears.RepresentativesofPitcherPartnersattendtheAnnualGeneralMeetingandareavailabletoanswershareholderquestionsregardingtheauditortheindividualstatements.ManagingDirectorandFinanceDirectorcertificationoffinancialstatements.

PriortotheapprovaloftheGroup’sfinancialstatementseachyear,theManagingDirectorandtheFinanceDirectorconfirminwritingtotheBoardthatthefinancialreportsoftheCompanyforthefinancialyear:

• presentatrueandfairview,inallmaterialrespects,oftheCompany’sfinancialconditionandoperationalresultsandareinaccordancewithrelevantaccountingstandards;

• thestatementgiveninaccordancewithsection295AoftheCorporationsActisfoundedonasoundsystemofriskmanagementandinternalcomplianceandcontrolwhichimplementsthepoliciesadoptedbytheBoard;and

• theCompany’sriskmanagementandinternalcomplianceandcontrolsystemisoperatingefficientlyandeffectivelyinallmaterialrespectsinrelationtofinancialreportingrisks.

Principle5–MaketimelyandbalanceddisclosureDisclosureandCommunicationsPolicyTheCompanyhasadoptedaContinuousDisclosurePolicywithinitsCorporateGovernanceChartertoensurecompliancewiththecontinuousdisclosurerequirementsoftheASXListingRulesandtheCorporationsAct2001.ThepolicysetsouttherulesandproceduresforASXinformationdisclosure,theresponsibilityoftheBoard,SeniorExecutivesandstafftoensurethatpricesensitiveinformationisidentified,reviewedbymanagementanddisclosedtotheASXinatimely,clearandobjectivemannerandthatallinformationprovidedtotheASXispostedontheCompany’swebsiteassoonaspossibleafteritsdisclosuretoASX.TheCompanySecretarywillmanagetheCompany’scompliancewithitscontinuousdisclosureobligationsandisresponsibleforcommunicationswith,andcoordinatingdisclosureofinformationtotheASX.DirectorswillreceivecopiesofallannouncementsreleasedtotheASXandcopiesofannouncements,includingrelatedinformation,suchasfinancialstatementsandpublicpresentations,andareawareofandaccountablefortheCompany’scompliancewithregardtocontinuousdisclosure.

RespecttherightsofsecurityholdersShareholderCommunication

TheCompanyiscommittedtoinformingshareholdersofallmajordevelopmentsaffectingtheoperationsoftheCompanyandthestateofitsaffairs.Communicationswithshareholdersinclude:• Theannualreportwhichisdistributed,orotherwisemadeavailable,toallshareholders;• Thequarterlyactivitiesreport;• Thehalf-yearfinancialreport;

• TheAnnualGeneralMeetingandothergeneralmeetingscalledtoobtainshareholderapprovalforsignificantcorporateactions,asappropriate;

• Companyannouncements;and

• AlloftheinformationavailableontheCompany’swebsitewww.changefinancial.com

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TheCompanywelcomesquestionsfromshareholdersatanytimeandtheseareansweredpromptlyunlesstheinformationrequestedismarketsensitiveandnotinthepublicdomain.AllannouncementstobemadebytheCompanytotheASX(exceptdisclosuresofaroutinecomplianceoradministrativenature)willbepostedtotheCompany’swebsite.InformationabouttheCompanyanditsoperationsincludinginformationabouttheCompany’scorporategovernancepoliciesislocatedat:www.changefinancial.comFacilitateparticipationatmeetingsofsecurityholders.

TheCompanyencouragesshareholderparticipationatitsAGMsincludingbymakingnoticesofmeetingsavailableonitswebsite.ChangeFinancial’sexternalauditorattendstheCompany’sAGMsandisavailabletoansweranyquestionswhichshareholdersmayhaveabouttheconductoftheexternalauditfortherelevantfinancialyearandthepreparationandcontentoftheauditreport.

ShareholderswhoareunabletoattendmeetingsoftheCompanyareencouragedtoparticipateinmeetingsbywayofappointmentofaproxy.

Principle7–RecogniseandmanageriskRiskcommittee

TheBoardhasestablishedanAuditandRiskManagementCommitteethemembersofwhicharesetintheAuditsectionunderPrincipal4andtheresponsibilitiesofwhicharesetoutintheAuditandRiskManagementCommitteeCharter.TheCharterwillbereviewedannuallytodeterminewhetheranychangesarenecessary.AcopyoftheCharterisincludedintheCorporateGovernanceCharterandcanbeaccessedontheCompany’swebsiteunderCorporateGovernance.TheresponsibilitiesoftheAuditandRiskManagementCommitteewithrespecttoriskareto:• reviewandmakerecommendationstotheBoardinrelationtotheadequacyoftheCompany’s

processesformanagingrisks,including:

(a) inrelationtoanyincidentinvolvingfraudorotherbreakdownoftheCompany’sinternalcontrols;

(b) inrelationtotheCompany’sinsuranceprogram,havingregardtotheCompany’sbusinessandtheinsurablerisksassociatedwiththebusiness;

• ensurethedevelopmentofanappropriateriskmanagementpolicyframeworkthatwillprovideguidancetoManagementinimplementingappropriateriskmanagementpracticesthroughouttheCompany'soperations,practicesandsystemsandtooverseethisframework;

• defineandperiodicallyreviewriskmanagementasitappliestotheCompanyandclearlyidentifyingallstakeholders;

• ensuretheCommitteeclearlycommunicatestheCompany'sriskmanagementphilosophy,policiesandstrategiestoDirectors,Management,employees,contractorsandappropriatestakeholders;

• ensurethattheBoardandManagementestablishariskawareculturewhichreflectstheCompany'sriskpoliciesandphilosophies;

• reviewmethodsofidentifyingbroadareasofriskandsettingparametersorguidelinesforbusinessriskreviews;

• makeinformeddecisionsregardingbusinessriskmanagement,internalcontrolsystems,businesspoliciesandpracticesanddisclosures;and

• considercapitalraising,treasuryandmarkettradingactivitieswithparticularemphasisonrisktreatmentstrategies,productsandlevelsofauthorities.

TheresponsibilityforundertakingandassessingriskmanagementandinternalcontroleffectivenessisdelegatedtomanagementundertheguidanceoftheCommittee.

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Internalaudit

TheCompanydoesnothaveaninternalauditfunctionduetoitscurrentsize.TheAuditandRiskManagementCommitteegainssufficientassurancefrommanagementundertakingongoingevaluationoftheCompany’sinternalcontrolandriskmanagementprocesses.Sustainabilityrisks

Asadigitalbankingcompany,ChangeFinancialfacesinherentrisksinitsactivities,primarilyfinancial,operatingandsystemrisksbutalsoincludingeconomic,environmentalandsocialsustainabilityrisks.TheBoarddoesnotconsiderthatithasmaterialexposuretoeconomic,environmentalandsocialsustainabilityrisksotherthanitsexposuretogeneraleconomicconditionsinthemarketsinwhichitoperates.TheBoardregularlymonitorstheoperationalandfinancialperformanceoftheCompany’sactivities.Itmonitorsandreceivesadviceonareasofoperationandfinancialriskandconsidersstrategiesforappropriateriskmanagement.

Reviewofriskmanagementframework

TheAudit&RiskManagementCommitteewasestablishedinApril2016didnotconductaformalreviewoftheCompany’sriskmanagementframeworkinthe2016financialyear.Duringthe2016financialyeartheidentificationandevaluationofrisksandthedevelopmentandimplementationofriskmitigationplanswasundertakenbymanagementwithoversightfromtheBoard.

Principle8–RemuneratefairlyandresponsiblyRemunerationcommittee.

TheBoardhasnotformallyestablishedaRemunerationCommitteeastheBoardconsidersthattheCompanyisnotofasizenorareitsaffairsofsuchcomplexityastojustifytheformationofthisCommittee.TheBoardofDirectorsisresponsiblefordeterminingandreviewingcompensationarrangementsfortheDirectorsandtheExecutiveteam.TheBoardassessestheappropriatenessofthenatureandamountofremunerationofsuchofficersonaperiodicbasisbyreferencetorelevantemploymentmarketconditionswiththeoverallobjectiveofensuringmaximumstakeholderbenefitfromtheretentionofahighqualityBoardandExecutiveteam.DisclosureofExecutiveandNon-ExecutiveDirectorRemunerationpolicy

TheConstitutionoftheCompanyprovidesthattheNon-ExecutiveDirectorsareentitledtoremunerationasdeterminedbytheCompanyingeneralmeetingtobepaidastoafixedamountforeachDirector.Additionally,Non-ExecutiveDirectorsareentitledtobereimbursedforproperlyincurredexpenses.AllDirectorshavetheopportunitytoqualifyforparticipationintheCompany’sshareoptionplan,subjecttotheapprovalofshareholders.DetailsoftheCompany’sremunerationarrangementsforNon-ExecutiveDirectors,ExecutiveDirectorsandseniorExecutivesincludingfeeratesaresetoutintheRemunerationReportintheAnnualReport.ShareTradingPolicy.

TheCompany’sShareTradingPolicyspecificallyprohibitsDirectorsandseniorExecutivesfromengaginginshort-termtradingintheCompany’ssecurities.ThePolicyalsostipulatesthatDirectorsandseniorExecutivesandcloselyrelatedpartiesnotenterintotransactionswhichlimittheeconomicriskrelatingtounvestedoptionsheldbyDirectorandSeniorExecutives.TheShareTradingPolicyisincludedintheCorporateGovernanceCharterandcanbeaccessedontheCompany’swebsiteunderCorporateGovernance.

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FINANCIALREPORTThesefinancialstatementsaretheconsolidatedfinancialstatementsoftheconsolidatedentityconsistingofChangeFinancialLimitedanditssubsidiaries.ThefinancialstatementsarepresentedintheUnitedStatescurrency.ChangeFinancialLimitedisacompanylimitedbyshares,incorporatedanddomiciledinAustralia.Itsregisteredofficeis:CorporateAdministrationServicesPtyLtdLevel10,110MaryStreetBRISBANEQLD4000Itsprincipalplaceofbusinessis:ChimpchangeLLC6922HollywoodBlvd,Suite922,Hollywood,CA90028AsummaryoftheGroup’soperationsanditsprincipalactivitiesisincludedinthedirectors'reportonpage8,whichisnotpartofthesefinancialstatements.ThefinancialstatementswereauthorisedforissuebytheDirectorson30September2017.TheDirectorshavethepowertoamendandreissuethefinancialstatements.Throughtheuseoftheinternet,wehaveensuredthatourcorporatereportingistimelyandcomplete.Allpressreleases,financialreportsandotherinformationareavailableatourShareholders'Centreonourwebsite:www.changefinancial.com

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CONSOLIDATEDSTATEMENTOFPROFITORLOSS 2017 2016

Note US$000s US$000s

Revenue 4 602 180

Employeebenefitsexpense (3,048) (2,840)

Advertising&marketingexpense (2,846) (1,129)

Programexpenses (1,192) (983)

Consulting&professionalfees (551) (1,459)

Technologyexpense (297) (165)

Travelexpense (179) (126)

Depreciation&amortisationexpense 5 (426) (275)

Legalexpenses (76) (332)

Insurance (72) (82)

Otherexpense (681) (444)

Profit(loss)beforetax (8,766) (7,655)

Incometaxexpense 6 - -

Totalcomprehensiveprofit(loss)fromcontinuingoperations (8,766) (7,655)

Basiclosspershare(UScentspershare) 18 (13.5) (22.9)

Dilutedlosspershare(UScentspershare) 18 (13.5) (22.9)

Theconsolidatedstatementsaboveshouldbereadinconjunctionwiththeaccompanyingnotes.

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CONSOLIDATEDSTATEMENTOFCOMPREHENSIVEINCOME 2017 2016

US$000s US$000s

Lossoftheyear (8,766) (7,655)

Othercomprehensiveincome

Itemsthatmaybereclassifiedtoprofitandloss

Exchangedifferencesontranslationofparentoperations 210 50

Profit(loss)fromcontinuingoperations (8,556) (7,605)


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CONSOLIDATEDSTATEMENTOFFINANCIALPOSITION Notes 2017 2016

US$000s US$000s

Currentassets

Cash 7 9,468 10,878

Otherreceivables 8 85 107

Othercurrentassets 9 85 15

Totalcurrentassets 9,638 11,000

Non-currentassets

Property,plant&equipment 10 105 31

Intangibleassets 11 1,171 811

Totalnon-currentassets 1,276 842

TOTALASSETS 10,914 11,842

Currentliabilities

Tradeandotherpayables 12 235 359

Provisions 13 179 101

Othercurrentliabilities 14 123 22

Totalcurrentliabilities 537 482

NETASSETS 10,377 11,360

Equity

Contributedequity 15 25,921 18,714

Reserves 16 3,866 3,290

Retainedearnings (19,410) (10,644)

TOTALEQUITY 10,377 11,360


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CONSOLIDATEDSTATEMENTOFCHANGESINEQUITY Contributed Reserves Retained Total

Equity Earnings Equity

US$000s US$000s US$000s US$000s

Balanceat30June2015 1,914 1,671 (2,989) 596

Profit(loss)fortheyear (7,655) (7,655)

Exchangedifferencesontranslationofthe

parentoperation 50 50

Totalcomprehensiveincomefortheyear - 50 (7,655) (7,065)

Transactionswithownersintheircapacityasowners

Optionsissued 1,569 1,569

Contributions 16,800 16,800

Total 16,800 1,569 - 18,369

Balanceat30June2016 18,714 3,290 (10,644) 11,360

Balanceat30June2016 18,714 3,290 (10,644) 11,360

Profit(loss)fortheyear - - (8,766) (8,766)

Exchangedifferencesontranslationofthe

parentoperation - 210 - 210

Totalcomprehensiveincomefortheyear - 210 (8,766) (8,556)

Transactionswithownersintheircapacityasowner

Optionsissued - 366 - 366

Contributions 7,207 - - 7,207

Total 7,207 366 - 7,573

Balanceat30June2017 25,921 3,866 (19,410) 10,377


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CONSOLIDATEDSTATEMENTOFCASHFLOWS Notes 2017 2016

US$000s US$000s

Cashflowfromoperatingactivities

Receiptsfromcustomers 409 178

Paymentstosuppliersandemployees (8,491) (5,457)

Interestreceived 113 2

Netcashusedinoperatingactivities 17 (7,969) (5,277)

Cashflowfrominvestingactivities

Paymentforproperty,plant&equipment (97) (24)

Paymentforsoftwaredevelopment (761) (394)

Netcashusedininvestingactivities (858) (418)

Cashflowfromfinancingactivities

Proceedsfromshareissue 7,207 15,825

Netcashprovidedbyfinancingactivities 7,207 15,825

Netincrease(decrease)incashheld (1,620) 10,130

Reconciliationofcash

Cashatthebeginningofthefinancialyear 10,878 753

Netincrease(decrease)incashheld (1,620) 10,130

Foreignexchangedifferenceoncashholding 210 (5)

Cashattheendofthefinancialyear 7 9,468 10,878


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NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS

1. SummaryofSignificantAccountingPolicies

TheseconsolidatedfinancialstatementsrelatetoChangeFinancialLimitedandtheentitiesitcontrolledattheendof,orduring,theyearended30June2017andhavebeenpreparedinaccordancewithrule4.3AoftheASXListingRules(Appendix4E).TheprincipalaccountingpoliciesadoptedinpreparingthefinancialreportoftheCompanyanditsconsolidatedentities(ConsolidatedEntityorGroup)fortheyearended30June2017arestatedtoassistinageneralunderstandingofthefinancialreport.ForthepurposesofpreparingthefinancialreporttheCompanyisaforprofitentity.ChangeFinancialLimitedisacompanylimitedbysharesincorporatedinAustraliawhosesharearepubliclytradedontheAustralianSecuritiesExchange.

(a) CompliancewithIFRS

TheConsolidatedFinancialReportofChangeFinancialLimitedcomplieswithInternationalFinancialReportingStandards(IFRS)asissuedbytheInternationalAccountingStandardsBoard(IASB).

(b) HistoricalCostConvention

TheConsolidatedFinancialReportofChangeFinancialLimitedhasbeenpreparedunderthehistoricalcostconventionwiththeexceptionofthesharebasedpaymentsreservethatismeasuredatfairvalue.

(c) PrinciplesofConsolidation

Theconsolidatedfinancialstatementsarethoseoftheconsolidatedentity,comprisingthefinancialstatementsoftheparententityandalloftheentitiestheparentcontrols.TheGroupcontrolsanentitywhereithasthepower,forwhichtheparenthasexposureorrightstovariablereturnsfromitsinvolvementwiththeentity,andforwhichtheparenthastheabilitytouseitspowerovertheentitiestoaffecttheamountofitsreturns.Thefinancialstatementsofsubsidiariesarepreparedforthesamereportingperiodastheparententity,usingconsistentaccountingpolicies.Adjustmentsaremadetobringintolineanydissimilaraccountingpolicieswhichmayexist.Allinter-companybalancesandtransactions,includinganyunrealisedprofitsorlosseshavebeeneliminatedonconsolidation.SubsidiariesareconsolidatedfromthedateonwhichcontrolistransferredtotheGroupandarede-recognisedfromthedatethatcontrolceases. Non-controllinginterestsintheresultofsubsidiariesareshownseparatelyintheconsolidatedstatementofcomprehensiveincomeandconsolidatedstatementoffinancialpositionrespectively.

(d) ForeignCurrencyTranslationsandBalances

PresentationcurrencyThefinancialstatementsofeachentitywithintheconsolidatedentityaremeasuredusingthecurrencyoftheprimaryeconomicenvironmentinwhichthatentityoperates(thefunctionalcurrency).TheconsolidatedfinancialstatementsarepresentedinUSdollarswhichistheconsolidatedentity’sfunctionalandpresentationcurrency.

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TransactionsandbalancesTransactionsinforeigncurrenciesofentitieswithintheconsolidatedgrouparetranslatedintofunctionalcurrencyattherateofexchangerulingatthedateofthetransaction. Foreigncurrencymonetaryitemsthatareoutstandingatthereportingdate(otherthanmonetaryitemsarisingunderforeigncurrencycontractswheretheexchangerateforthatmonetaryitemisfixedinthecontract)aretranslatedusingthespotrateattheendofthefinancialyear. Non-monetaryitemsthataremeasuredintermsofhistoricalcostinaforeigncurrencyarenotretranslatedExceptforcertainforeigncurrencyhedges,allresultingexchangedifferencesarisingonsettlementorre-statementarerecognisedasrevenuesandexpensesforthefinancialyear. • Currentassetsandliabilitiesaretranslatedattheclosingrateonreportingdate;• Non-currentassetsaretranslatedathistoricalcost• Incomeandexpensesaretranslatedatactualexchangeratesoraverageexchangeratesforthe

periodwhereappropriate;and• Allresultingexchangedifferencesarerecognisedinothercomprehensiveincome.

(e) RevenueProvidingservicesRevenueismeasuredatthefairvalueoftheconsiderationreceivedorreceivabletotheextentthatitisprobablethattheeconomicbenefitwillflowtotheCompanyandtherevenuecanbereliablymeasured.RevenueisderivedfromearningashareofinterchangerevenuederivedfrompurchasesmadeusingtheChimpChangebrandedprepaidcardsandfromearningfeeschargedtocustomers.InterestincomeInterestrevenueisrecognisedonaproportionalbasisusingtheeffectiveinterestmethodtakingintoaccounttheinterestratesapplicabletothefinancialassets. (f) IncometaxCurrentincometaxexpenseorrevenueisthetaxpayableonthecurrentperiod'staxableincomebasedontheapplicableincometaxrateadjustedbychangesindeferredtaxassetsandliabilities.Deferredtaxassetsandliabilitiesarerecognisedfortemporarydifferencesattheapplicabletaxrateswhentheassetsareexpectedtoberecoveredorliabilitiesaresettled.Deferredtaxliabilitiesarenotrecognisediftheyarisefromtheinitialrecognitionofgoodwill.Deferredincometaxisalsonotaccountedforifitarisesfrominitialrecognitionofanassetorliabilityinatransactionotherthanabusinesscombinationthatatthetimeofthetransactionaffectsneitheraccountingnortaxableprofitorloss. Deferredtaxassetsarerecognisedfordeductibletemporarydifferencesandunusedtaxlossesonlyifitisprobablethatfuturetaxableamountswillbeavailabletoutilisethosetemporarydifferencesandlosses.Currentanddeferredtaxbalancesattributabletoamountsrecogniseddirectlyinequityarealsorecogniseddirectlyinequity.

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(g) FinancialInstrumentsNon-derivativefinancialinstruments Non-derivativefinancialinstrumentsconsistofinvestmentsinequityanddebtsecurities,tradeandotherreceivables,cashandcashequivalents,loansandborrowings,andtradeandotherpayables.Non-derivativefinancialinstrumentsareinitiallyrecognisedatfairvalue,plusdirectlyattributabletransactioncosts(ifany),exceptforinstrumentsrecordedatfairvaluethroughprofitorloss.Afterinitialrecognition,non-derivativefinancialinstrumentsaremeasuredasdescribedbelow.FinancialliabilitiesFinancialliabilitiesincludetradepayables,othercreditorsandloansfromthirdpartiesincludinginter-companybalancesandloansfromorotheramountsduetodirector-relatedentities.

Non-derivativefinancialliabilitiesarerecognisedatamortisedcost,comprisingoriginaldebtlessprincipalpaymentsandamortisation. FinancialliabilitiesareclassifiedascurrentliabilitiesunlesstheGrouphasanunconditionalrighttodefersettlementoftheliabilityforatleasttwelvemonthsafterthereportingperiod.

(h) Property,plant&equipmentPlantandequipmentPlantandequipmentIscarriedatcostlessaccumulateddepreciationand,whereapplicable,anyaccumulatedimpairmentlosses.DepreciationThedepreciableamountofallproperty,plantandequipmentisdepreciatedovertheirestimatedusefullivescommencingfromthetimetheassetisheldreadyforuse.Landandthelandcomponentofanyclassofproperty,plantandequipmentisnotdepreciated.

Classoffixedasset Depreciationrates DepreciationbasisMotorvehiclesunderlease 12.5% StraightlineOfficeequipment 25% StraightlineComputerequipment 25% Straightline

(i) Softwaredevelopment

Softwaredevelopmentcostsarecapitalisedwhenitisprobablethattheprojectwillbeasuccessconsideringitscommercialandtechnicalfeasibility;theentityisabletouseorselltheasset;thesoftwarewillgenerateprobablefutureeconomicbenefits;theentityhassufficientresourceandintenttocompletethedevelopmentanditscostscanbemeasuredreliably.Capitalisedsoftwaredevelopmentexpenditureisstatedatcostlessaccumulatedamortisation.Amortisationiscalculatedusingthestraight-linemethodtoallocatethecostoverthreeyears.Theassetcarryingvalueisreviewedforimpairmentannuallyandamountsarewrittenofftotheextentthatrealisablefuturebenefitsareconsideredtobenolongerprobable.

(j) Impairmentofnon-financialassets

Intangibleassetsaretestedannuallyforimpairment,ormorefrequentlyifeventsorchangesincircumstancesindicatethattheymightbeimpaired.

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Animpairmentlossisrecognisedwherethecarryingamountoftheassetexceedsitsrecoverableamount.Therecoverableamountofanassetisdefinedasthehigherofitsfairvaluelesscoststosellandvalueinuse.

(k) Employeebenefits

ShorttermemployeebenefitobligationsLiabilitiesarisinginrespectofwagesandsalaries,annualleaveandanyotheremployeebenefitsexpectedtobesettledwhollywithintwelvemonthsofthereportingdatearemeasuredattheirnominalamountsbasedonremunerationrateswhichareexpectedtobepaidwhentheliabilityissettled.Theexpectedcostofshort-termemployeebenefitsintheformofcompensatedabsencessuchasannualleaveisrecognisedintheprovisionforemployeebenefits.Allothershort-termemployeebenefitobligationsarepresentedaspayables. LongtermemployeebenefitobligationsLiabilitiesarisinginrespectoflongserviceleaveandannualleavewhichisnotexpectedtobesettledwhollywithintwelvemonthsofthereportingdatearemeasuredatthepresentvalueoftheestimatedfuturecashoutflowtobemadeinrespectofservicesprovidedbyemployeesuptothereportingdate.Employeebenefitobligationsarepresentedascurrentliabilitiesinthebalancesheetiftheentitydoesnothaveanunconditionalrighttodefersettlementforatleasttwelvemonthsafterthereportingdate,regardlessofwhentheactualsettlementisexpectedtooccur.

(l) Goodsandservicestax(GST)

Revenues,expensesandpurchasedassetsinAustraliaarerecognisednetoftheamountofGST,exceptwheretheamountofGSTincurredisnotrecoverablefromtheTaxOffice.InthesecircumstancestheGSTisrecognisedaspartofthecostofacquisitionoftheassetoraspartofanitemoftheexpense.ReceivablesandpayablesintheconsolidatedstatementoffinancialpositionareshowninclusiveofGST.Cashflowsarepresentedintheconsolidatedstatementofcashflowsonagrossbasis,exceptfortheGSTcomponentofinvestingandfinancingactivities,whicharedisclosedasoperatingcashflows.

(m) Rounding

ThecompanyisofakindreferredtoinASICCorporations(RoundinginFinancial/Directors’Reports)Instrument2016/191,relatedtothe'roundingoff'ofamountsinthefinancialstatements.AmountsinthefinancialstatementshavebeenroundedoffinaccordancewiththatLegislativeInstrumenttothenearestthousanddollars,unlessotherwiseindicated.

(n) Cashandcashequivalents

Forcash-flowpresentationpurposes,cashandcashequivalentsincludescashonhand,depositsheldatcallwithfinancialinstitutions,othershort-term,highlyliquidinvestmentswithoriginalmaturitiesofthreemonthsorlessthatarereadilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue.

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(o) StandardsandInterpretationsonIssueNotYetAdopted

TheDirectorshavereviewedallnewStandardsandInterpretationsthathavebeenissuedbutarenotyeteffectivefortheyearended30June2017.AsaresultofthisreviewtheDirectorshavedeterminedthatthereisnomaterialimpactofthenewandrevisedStandardsandInterpretationsontheGroupand,therefore,nochangeisnecessarytoGroupaccountingpolicies.(p) Leases

Leasepaymentsforoperatingleases,wheresubstantiallyalltherisksandbenefitsremainwiththelessor,arerecognisedasexpensesonastraightlinebasisovertheleaseterm.

2. CriticalAccountingJudgements

Estimatesandjudgementsarecontinuallyevaluatedandarebasedonhistoricalexperienceandotherfactors,includingexpectationsoffutureeventsthatmayhaveafinancialimpactontheentityandthatarebelievedtobereasonableunderthecircumstances.TheGroupmakesestimatesandassumptionsconcerningthefuture.Theresultingaccountingestimateswill,bydefinition,seldomequaltherelatedactualresults.Theestimatesandassumptionsthathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyeararediscussedbelow.

Estimatedimpairmentofintangibleassetsandothernon-currentassetsDeterminingwhethernon-currentassetsareimpairedrequiresanestimationofthevalueinuseofthoseassets.ThevalueinusecalculationrequiresthedirectorstoestimatethefuturecashflowsexpectedtoarisefromtheGroupandasuitablediscountrateinordertocalculatepresentvalue.Wheretheactualfuturecashflowsarelessthanexpected,amaterialimpairmentlossmayarise.

Share-basedpaymentstransactionsTheGroupmeasuresthecostofequitysettledtransactionsbyreferencetothefairvalueoftheequityinstrumentsatthedateatwhichtheyaregranted.ThefairvalueisdeterminedbyusingeithertheBlack-ScholesorBinomialmodeltakingintoaccountthetermsandconditionsuponwhichtheinstrumentsweregranted.Theaccountingestimatesandassumptionsrelatingtoequity-settledshare-basedpaymentswouldhavenoimpactonthecarryingamountsofassetsandliabilitieswithinthenextannualreportingperiodbutmayimpactprofitorlossorequity.

3. OperatingSegments

TheGroupisorganisedintoasingleoperatingsegmentbeingtheprovisionofmobilebankingservicesthroughtheChimpChangemobileapplicationdevelopedbytheCompany.

4. Revenue 2017 2016

US$000 US$000

Revenuefromservices 409 178

Interestincome 113 2

Research&developmenttaxrefund 80 -

Totalrevenue 602 180

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5. Expenses 2017 2016

US$000 US$000

Lossbeforeincometaxhasbeendeterminedafter:

Amortisationanddepreciation

Depreciationofproperty,plant&equipment 24 10

Amortisationofsoftwaredevelopmentcosts 402 265

Sharebasedpayments

Optionsissuedtodirectors,companysecretary&employees 409 970

Optionsissuedtoserviceproviders (43) 599

Sharesissuedtoanadvisor - 207

Employeebenefits

Employeebenefitssuperannuation/retirementplan 20 17

6. IncomeTaxExpense

2017 2016

US$'000 US$'000

Reconciliationofincometaxexpenseandtaxatthestatutoryrate

Lossbeforeincometaxexpense (8,766) (7,655)

TaxattheAustraliantaxrateof30%(2015:30%) (2,630) (2,296)

Differencesinoverseastaxrates (736) (468)

Taxeffectofamountswhicharenotdeductible/(taxable)incalculating

taxableincome

Sharebasedpaymentsexpense 110 471

Other (3) 26

Currentyeartaxlossesnotrecognised 3,259 2,267

Incometaxexpense - -

Deferredtaxassetsof$6,143,000(2016:$2,884,000)inrespectoftemporarydifferencesandtaxlosseshavenotbeenrecognized.

7. Currentassets-Cashandcashequivalents

2017 2016

US$000s US$000s

CashatBank 9,468 10,878

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8. Currentassets–Receivables

2017 2016

US$000s US$000s

Otherreceivables 85 107

9. Currentassets–Otherassets

2017 2016

US$000 US$000

PrepaymentsOthercurrentassets

6817

132

Totalothercurrentassets 85 15

10. Property,plantandequipment

2017 2016

US$000s US$000s

Motorsvehiclesunderlease 6 6

Accumulateddepreciation (1) -

Closingcarryingvalue 5 6

Officefit-outatcost 52 -

Accumulateddepreciation (3) -

Closingcarryingvalue 49 -

Officeequipmentatcost 83 38

Accumulateddepreciation (32) (12)

Closingcarryingvalue 51 26

Totalproperty,plant&equipment 105 31

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ReconciliationofmovementReconciliationofthecarryingamountsofproperty,plant&equipmentatthebeginningandendofthefinancialyear

Motorvehicle Office Office Total

underlease FitOut Equipment

US$000s US$000s US$000s US$000s

2016

Openingcarryingamount 6 - 26 31

Additions - 52 45 97

Depreciationexpense (1) (3) (20) (24)

Closingcarryingamount 5 49 51 105

2015

Openingcarryingamount 5 - 12 17

Additions 1 - 23 24

Depreciationexpense (1) - (9) (10)

Closingcarryingamount 5 - 26 31

11. Intangibleassets

2017 2016

US$000 US$000

Softwaredevelopmentatcost 1,838 1,076

Accumulatedamortisationandimpairment (667) (265)

Totalsoftwaredevelopment 1,171 811

Movementsincarryingamounts

Openingcarryingamount 811 626

Additions 761 394

Amortisationexpense (402) (265)

Netforeigncurrencymovement 1 56

Closingcarryingamount 1,171 811

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12. Tradeandotherpayables

2017 2016

US$000 US$000

Unsecuredliabilities

Accountspayable 235 359

TheGrouphasfinancialriskmanagementpoliciesinplacetoensurethatallpayablesarepaidwithinthecredittimeframe.

13. Provisions

2017 2016

US$000s US$000s

Employeeleaveprovisions 179 101

14. Othercurrentliabilities

2017 2016

US$000 US$000

Otherliabilities 123 22

Totalothercurrentliabilities 123 22

15. Issuedcapital(i) ShareCapital

2017 2016

US$000 US$000

71,844,410fullypaidordinaryshares1(30June201657,330,640) 25,921 18,714

1Thisamountexcludes6,036,457(2016:6,150,743)sharesissuedundertheLoanFundedSharePlan(LFSP).TheseshareswillberecognisedinShareCapitalwhentheloanadvancedundertheLFSPtoacquirethosesharesisrepaid.Totalfullypaidsharesonissueis77,880,867(2016:63,481,383).

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(ii) Movementsinordinarysharecapital

Number US$000

Balanceat30June2015 23,415,530 1,914

ShareplacementA$0.55pershare–31July2015 5,559,926 2,265

ShareplacementA$0.70pershare–21December2015 7,890,184 4,033

ExerciseofoptionsatA$0.35pershare–1February2016 1,355,000 337

IssueofsharesforadvisoryservicesatA$0.75pershares–20April2016

360,000 207

SharesissuedpursuanttoaninitialpublicofferingatA$0.80pershare–30June2016

18,750,000 11,139

Transactionfees (1,181)

Balanceat30June20161 57,330,640 18,714

SharesissuedpursuanttoaplacementatA$0.72pershare–May2017

13,888,889 7,450

Transactionfeesinrespectoftheplacement–May2017 - (447)

Exerciseofoptions–June2017 - 510,595 204

SharesrecognisedundertheLoanFundedSharePlan–June2017 114,286 -

Balanceat30June20171 71,844,410 25,921

1ExcludessharesissuedundertheLoanFundedSharePlan(LFSP).ThesesharesarerecognisedinShareCapitalwhentheloanadvancedundertheLFSPtoacquirethosesharesisrepaid.At30June20176,036,457suchshareswereexcluded(2016:6,150,743).Totalfullypaidsharesonissueat30June2017was77,880,867(2016:63,481,383).

OrdinarysharesentitletheholdertoparticipateinthedividendsandtheproceedsonwindingupoftheCompanyinproportiontothenumberofandamountspaidonthesharesheld.Onashowofhandseveryholderofordinarysharespresentatameetinginpersonorbyproxyisentitledtoonevoteanduponapolleachisshareisentitledtoonevote.CapitalManagementManagementcontrolsthecapitaloftheCompanyinordertoensuretheCompanycanfunditsoperationsandcontinueasagoingconcern.

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16. Reserves

2017 2016

US$000 US$000

Sharebasedpaymentsreserve 3,657 3,291

Foreigncurrencytranslationreserve 209 (1)

Closingcarryingamount 3,866 3,290

(a) MovementinSharebasedpaymentreserve

Openingbalance 3,291 1,722

Optionsissued 409 1,568

Optionscancelled (43) -

Balanceat30June2016 3,657 3,291

(b) MovementinForeigncurrencytranslationreserve

Openingbalance (1) (51)

Exchangedifferencesarisingontranslationofparentoperation 210 50

Balanceat30June2016 209 (1)

SharebasedpaymentreserveThereserveisusedtorecognisethevalueofoptionsissuedtoemployers,directorsandotherpartiesaspartoftheirremunerationofaspartoftheircompensationforservicesprovidedtotheGroup.

ForeigncurrencytranslationreserveThereserveisusedtorecogniseexchangedifferencesarisingfromthetranslationofthefinancialstatementsoftheholdingcompanytoUnitedStatesdollars.

17. Reconciliationofprofitafterincometaxtonetcashinflowfromoperating

activities

2017 2016

US$000 US$000

Lossfortheyear (8,766) (7,655)

Depreciationandamortisation 426 275

Sharebasedpayments 366 1,776

Decrease(increase)incurrentreceivables (45) (84)

Increase(decrease)incurrentliabilities 50 411

Netcashusedinoperatingactivities (7,969) (5,277)

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18. Earningspershare

2017 2016

US$000 US$000

LossattributabletoordinaryequityholdersofChangeFinancialLimited (8,766) (7,655)

Weightedaveragenumberofordinarysharesusedasadenominator

incalculatingbasicearningspershares 64,862,437 33,424,881

Weightedaveragenumberofordinarysharesanddilutivepotentialordinarysharesusedasadenominatorincalculatingdilutedearningspershare 64,862,437 33,424,881

19. DividendTherewerenodividendspaid,recommendedordeclaredduringthecurrentorpreviousperiod.

20. Eventsoccurringafterthereportingperiod

Nomattersorcircumstanceshavearisensincetheendofthefinancialyearwhichsignificantlyaffectstheoperationsoftheconsolidatedgroup,theresultsofthoseoperationsofthestateofaffairsoftheconsolidatedgroupgoingforward.

21. Financialriskmanagement

TheGroup'sactivitiesmayexposeittoavarietyoffinancialrisks:marketrisk(includingcurrencyrisk,interestrateriskandpricerisk),creditriskandliquidityrisk.TheGroup'soverallriskmanagementprogramfocusesontheunpredictabilityoffinancialmarketsandseekstominimisepotentialadverseeffectsonthefinancialperformanceoftheGroup.RiskmanagementiscarriedoutbyseniormanagementinconsultationwiththeBoardofDirectors.TheBoardprovidesprinciplesforoverallriskmanagement,aswellasdirectioninspecificareas.Thecarryingamountsforeachcategoryoffinancialinstruments,measuredinaccordancewithAASB139asdetailedintheaccountingpoliciestothesefinancialstatements,areasfollows: 2017 2016

US$000 US$000

Financialassets

Cashandcashequivalents 9,468 10,878

Loansandreceivables 85 107

Totalfinancialassets 9,553 10,985

Financialliabilities

Tradeandotherpayables 235 359

Totalfinancialliabilties 235 359

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Duetotheirshorttermnature,thecarryingamountsofallfinancialinstrumentsareconsideredareasonableapproximationoftheirfairvalues.MarketRisk

ForeigncurrencyriskTheGrouphastransactionalcurrencyexposures.SuchexposuresarisefromtransactionsbytheGroupincurrenciesotherthanthefunctionalcurrency.Atbalancedate,theGrouphadthefollowingexposurestoAustraliandollars(A$)thatarenotdesignatedcashflowhedges.

Asat30June 2017 2016

A$000 A$000

Cashatbank 1,958 14,006

Currentassets 79 94

Currentliabilities (164) (335)

Netmonetaryassets/liabilitiesdesignatedinAUD 1,873 13,765

InterestrateriskInterestrateriskisconsideredimmaterialastheGroup’sonlyexposuretointerestrateriskiscashatbank.PriceriskTheGroupisnotexposedtoanysignificantpricerisk.

CreditRisk

CreditriskreferstotheriskthatacounterpartywilldefaultonitcontractualobligationsresultinginafinanciallosstotheGroup.TheGroupdeemeditscreditrisktobeminimalasitsfinancialassetsaremainlycashheldatBankWestwhichisasubsidiaryofCommonwealthBankofAustralia.Nofinancialassetsarepastdueareimpaired.

LiquidityRiskTheGroupmanagesliquidityriskbymaintainingadequatecashbalancesandbycontinuouslymonitoringforecastsandactualcashflowsmatchingmaturityprofilesoffinancialassetsandliabilities.FinancingarrangementsTheGroupdoesnothaveaccesstoanyundrawnborrowingfacilitiesattheendofthereportingperiod.MaturitiesoffinancialliabilitiesAtperiodendtheGrouphadaccountspayableof$359,000(2015:$48,000)allofwhichhaveamaturityoflessthan6months.TheGrouphasnootherfinancialliabilities.

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22. Share-basedpayments

Director&Employeeoptions

1,890,000optionswereissuedtoemployeesduringthefinancialyearpursuanttotheEmployeeShareOptionPlan.TheseoptionshaveastrikepricesofA$0.657andexpireon31January2020.16.67%(onesixth)oftheoptionsvestimmediatelywiththeremaindervestingbasedonlengthofservice.250,000optionswereissuedtoanewdirector,TeresaClarke.Theseoptionshaveastrikepriceof$1.00andexpireon31December2018.Theoptionsvestedimmediately.

Forthepurposeofvaluingtheoptionsissuedthefollowingadditionalinputswereused.(i) Sharepriceatgrantdate–employeeoptions$0.63;(ii) Volatility–50%(iii) Riskfreerate–2.9%(iv) Expecteddividendyield–0%

Thetotalexpenseforthe2017financialyearforoptionsissuedtoemployeesanddirectorswas$409,278andisincludedwithintheEmployeeBenefitsandConsultantsexpenseclassificationswithintheStatementofProfitandLoss.Anamountof$43,126wasacreditedtooptionexpenseforthecancellationofoptionsissuedtoasupplierandthisisincludedinthe‘Other’expensecategory.

23. Subsidiaries

Theconsolidatedfinancialstatementsincludetheassets,liabilitiesandresultsofthefollowingsubsidiaries:NameofEntity Countryof EquityType Holding Holding

Incorporation 2017 2015

% %

ChimpchangeLLC US Membershipunits 100 100

ChangeLabsNZPtyLtd Australia OrdinaryShares 100 -

24. AccumulatedLossesAsat30June 2017 2016

US$000 US$000

Openingbalanceofaccumulatedlosses (10,644) (2,989)

Lossfortheperiod (8,766) (7,655)

Closingbalanceofaccumulatedlosses (19,410) (10,644)

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25. ParententityfinancialinformationTheindividualfinancialstatementsfortheParententityshowthefollowingaggregateamounts:Asat30June 2017 2016

A$000 A$000

Currentassets 7,730 10,471

Non-currentassets 16,155 7,137

Totalassets 23,885 17,608

Currentliabilities 126 249

Totalliabilities 126 249

NetAssets 23,759 17,359

Shareholders’equity

IssuedCapital 25,921 18,714

Reserves 3,866 3,290

RetainedEarnings (6,028) (4,645)

Totalshareholders’equity 23,759 17,359

Lossfortheperiod (1,375) (2,977)

Totalcomprehensiveloss (1,375) (2,927)

26. Keymanagementpersonneldisclosures

Directors

ThefollowingpersonsweredirectorsofChangeFinancialLimitedduringthefinancialyear:Non-executivedirectorsPeterClare–ChairmanBenHarrisonTeresaClarke(appointed14October2016)ExecutiveDirectorsAshleyShilkin–ManagingDirectorIanLeijer–ChiefFinancialOfficerOtherkeymanagementpersonnel

Thefollowingpersonsalsohadresponsibilityforplanning,directingandcontrollingtheactivitiesoftheGroup,directlyorindirectly,duringthefinancialyear.TheyareemployedbyChimpchangeLLCClaytonFossett-ChiefOperatingOfficerYoungLee–ChiefFinancialOfficerNickRoberts–ChiefMarketingOfficer

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Keymanagementpersonnelcompensation

2017 2016 US$000 US$000

Shorttermemployeebenefits 851 1,344

Postemploymentbenefits 13 5

Sharebasedpayments 285 806

Total 1,149 2,155

Detailedremunerationdisclosuresareprovidedintheremunerationreport.

27. Remunerationofauditors

TheauditorofChangeFinancialLimitedisPitcherPartners

Asat30June 2017 2016

US$ US$

Amountsreceivedordueandreceivableforcurrentauditors:

Anauditorreviewofthefinancialreportoftheentityandanyotherentityintheconsolidatedgroup 56,589 43,632

Otherservicesinrelationtotheentityandanyotherentityintheconsolidatedgroup–taxcompliance,taxstructuring,independentexpertreportfortheinitialpublicoffering

14,064 38,224

Total 70,653 81,856

28. RelatedPartyTransactionsTransactionswithrelatedpartiesCompensationpaidtosomedirectorswerepaidtodirectorrelatedentitieswithfurtherdetailssetoutintheRemunerationReport.Inaddition,thefollowingtransactionsoccurredwithrelatedparties. 2017 2016 US$ US$

Loansto(Repaymentsby)Directorsandtheirrelatedentities

LFSP1loantoMrShilkin - 1,301,708

LFSP1toentityassociatedwithMrLeijer (30,768) 296,9321LoanFundedSharePlansOthertransactionsOptionsissuedtodirectorsanddirectorrelatedentities 157,869 735,370

Subscriptionsfornewordinarysharesbydirectorsasaresultofexerciseofoptionsandsettledwithcash - 336,730

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29. Contingentliabilities

TheGrouphasnocontingentliabilitiesasat30June2017.

30. CapitalandLeasingCommitmentsTheGrouphasapropertyleasecommitmentrelatingtotheoccupancyofthegroup’scurrentpremise.Thisleasewasenteredintoon1August2016fora65monthterm.Thegrouphasfutureleasepaymentswhicharecontractedbutnotcapitalizedinthefinancialstatements. 2017 2016 US$000 US$000Noncancellableoperatingleasecontractedforbutnotrecognisedinthefinancialstatements:

Notlaterthan12months 150 -

Laterthan12monthsbutnotlaterthanfiveyears 580 -

Laterthanyears - -

31. PostBalanceDateEventsOn4September2017,theCompanyformallychangeditsnamefromChimpchangeLimitedtoChangeFinancialLimitedtoreflecttheevolutionofthebusinessandgrowthintonewbankingverticals.InAugust2017,theCompanyenteredintoastrategicpartnershipwithHollar,afastgrowinge-commercebusinessnamedbytheWallStreetJournalas‘the#1techcompanytowatchin2017’.

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DIRECTORSDECLARATION Intheopinionofthedirectors:(a) thefinancialstatementsandnotessetoutonpages32to53areinaccordancewiththeCorporationsAct

2001,including:(i) complyingwithAustralianAccountingStandardsandtheCorporationsRegulations2001andother

mandatoryprofessionalreportingrequirements;and(ii) givingatrueandfairviewoftheGroup’sfinancialpositionasat30June2017andofitsperformance

forthefinancialyearendedonthatdate;and

(b) therearereasonablegroundstobelievethattheGroupwillbeabletopayitsdebtsasandwhentheybecomedueandpayable.

Note1(a)confirmsthatthefinancialstatementsalsocomplywithInternationalFinancialReportingStandardsasissuedbytheInternationalAccountingStandardsBoard.Thedirectorshavebeengiventhedeclarationsbythemanagingdirectorandchieffinancialofficerrequiredbysection295AoftheCorporationsAct2001.Thisdeclarationismadeinaccordancewitharesolutionofthedirectors.

ManagingDirectorLosAngeles,California30September2017

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INDEPENDENTAUDITORSREPORT

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ASXADDITIONALDISCLOSURE

Top20ShareholdersRank Name Numberof %ofIssued

Shares Capital

1 ASHLEYSHILKIN 11,901,965 15.3%2 AVATARINDUSTRIESPTYLTD 10,312,463 13.2%3 BONDSTREETCUSTODIANSLIMITED 3,333,750 4.3%4 BARTPROPERTIESPTYLTD 3,052,143 3.9%5 NAREENENPTYLTD 2,672,529 3.4%6 JPMORGANNOMINEESAUSTRALIALIMITED 2,567,717 3.3%7 BNPPARIBASNOMSPTYLTD 1,826,862 2.3%8 CITICORPNOMINEESPTYLIMITED 1,784,448 2.3%9 MRROSSALLENMCDONALD 783,239 1.0%10 CSWSGPTYLTD 685,297 0.9%11 FALCASTLEPTYLTD 683,500 0.9%12 HSBCCUSTODYNOMINEES(AUSTRALIA)LIMITED 639,709 0.8%13 ALBURY'SOWNPTYLTD 620,245 0.8%14 WSDOBSONPTYLTD 556,753 0.7%15 PAXPASHAPTYLTD 540,386 0.7%16 MRDAVIDFREDERICKOAKLEY 515,000 0.7%17 PINNACLESUPERANNUATIONPTYLIMITED 500,000 0.6%18 MRCOLINWILLIAMMACLEOD&MRSLINDAELIZABETHMACLEOD 435,000 0.6%19 BLUEFLAGINVESTMENTSPTYLTD 428,571 0.6%20 MRHARLEYDALTON&MRSPRUDENCEDALTON 417,696 0.5% Top20Total 44,257,273 56.80% TotalSharesonIssue 77,880,867

ShareholdingDistributionRange Securities Numberof Holders

1to1,000 151,493 1931,001to5,000 1,385,371 4935,001to10,000 1,969,488 24510,001to50,000 9,687,257 38450,001to100,000 6,718,072 89100,001andOver 57,969,186 94Total 77,880,867 1,498 UnmarketableParcels 32,506 65

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