Connecting You with
People and Places
Annual Report 2017
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Connecting You with
People and Places
Our vision is to be Australia’s leading personal transport business and the first choice for Passengers,
Drivers, Taxi Operators and Network Partners.
Cabcharge continues to invest in its vision and overarching purpose of Connecting You with People
and Places. We are determined to capture opportunities in the growing personal transport market and
win customers through exceptional service that is dependable and trusted.
Our industry continues to evolve providing considerable scope for growth. We will draw from our
knowledge, strength and experience in order to shape, facilitate and benefit from the transition to an
increasingly mobile society.
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Contents
Who We Are
Chairman’s Message
Chief Executive Officer’s Report
Opportunities for Growth
Board of Directors
Executive Team
Operating and Financial Review
Corporate Governance Statement
Directors’ Report
Remuneration Report
Auditor’s Independence Declaration
Consolidated Financial Statements
Directors Declaration
Independent Auditor’s Report
Shareholder Information
Corporate Directory
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Who We Are
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Payments
Cabcharge has been an innovator of payment technology for over 40 years. We specialise in secure,
convenient and flexible travel payment solutions designed to meet the needs of Passengers, Account
Clients, Drivers and Taxi Networks.
Our in-car and handheld electronic terminals process a variety of non-cash payment products,
including a wide range of cards as well as contactless smart phone payments. Our in-car terminal,
FAREWAYplus, is installed in almost every Taxi in Australia. With its sophisticated meter app
functionality, it provides an integrated solution for our customers.
Cabcharge’s payment products (FASTCARD and eTICKET) offer Passengers fast and secure cashless
methods for paying Taxi fares and provide our customers with improved control, greater insight and
end-to-end automation.
Our cloud-based travel management solution, Cabcharge Plus, was launched in April 2017 and
delivers comprehensive real-time trip data to multiple users for both booked and hailed trips.
Cabcharge Plus simplifies account management and ensures effective travel compliance with optional
pre-trip approval and designation of trip purpose. Group-wide tracking, reporting and analysis provide
deep insights into travel activity.
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Who We Are
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Networks
Cabcharge is the largest Taxi booking and dispatch provider servicing Drivers and Passengers in
Australia. Built on its unique technology platform, with an emphasis on delivering quality services
and products, Cabcharge provides leading Network services to Taxi Operators and Drivers,
including booking services, full Taxi fit-outs and repairs, vehicle financing and insurance, and
Driver training and education.
The 13CABS, Silver Service and Yellow Cabs brands represent approximately 8,500 Taxis operating
in Sydney, Melbourne, Brisbane, Adelaide, Newcastle, regional Victoria and the Northern Territory.
The addition of the new 13CABS Driver app has enhanced Cabcharge’s connection with Drivers.
The app’s functionality includes two-way communication between the Driver and the Network, and
allows the Driver to monitor and manage their bookings, communicate with their Passengers using
the 13CABS app, and keep up-to-date with industry news.
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Who We Are
Products
Payment terminals
Travel solutions
Cabcharge is now an emerging participant in the handheld
payment terminal market following the launch of Spotto
(for Taxis) and Giraffe (for Hire Cars) in Sydney, Melbourne,
and Brisbane during the 2017 financial year. Early results
are encouraging, with handheld terminal fares processed
in August 2017 reaching an annualised run rate of $100
million. We have also launched the Spotto app to assist
Drivers to review and track their earnings and payments.
Accepted by 98% of Taxis nationally, Cabcharge is
Australia’s leading Taxi payment provider. FASTCARD is a
personalised card for Taxis and Hire Cars that has unique
in-built travel rules. Single-use FLEXeTICKET allows
customers to set maximum fares, restrict the time and
day of use and nominate an expiry date. FASTCARD and
FLEXeTICKET holders can book a Taxi by app, phone or
by simply hailing one on the street. Cabcharge provides
full insight into Taxi use and reduces costs through
automated ATO-approved receipts and detailed travel
reports for Customers.
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FAREWAYplus
Apps
FAREWAYplus facilitates faster and more detailed payment
processing. This improves email receipts and, where the
meter app is used, provides greater clarity for customers
with tolls and airport charges displayed and calculated
automatically. Other features include high speed secure
software download capability, GPS vehicle tracking, anti-
tamper security processor and contactless card reader for
payment processing.
Cabcharge’s new look, world-class 13CABS and Silver
Service apps incorporate secure two-tap booking, Driver
rating systems, and in-app payment options. They are
constantly refreshed with regular upgrades. Our 13CABS
app is the leading Taxi booking app in Australia, and
momentum in app downloads continues to build.
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Chairman’s Message
I joined the Board of Cabcharge Australia Limited as
Chairman on 27 February 2017, and feel fortunate to have
arrived as the finishing touches were being applied to a
3-year program of transformative work that has restored
balance sheet strength and flexibility, reshaped the business
and, most importantly, positioned the Company for growth.
Concurrent with divesting non-core assets, Cabcharge has
invested to improve its service offering, expand its fleet and
upgrade its infrastructure. These initiatives are ongoing and
we have also embarked on a program of further investment
in additional marketing and technology to promote and
advance the benefits of our improved services and fuel the
growth of our core businesses.
“Demand for affordable, convenient personal
transport services will not abate, and the
opportunity for, and the ambition of, Cabcharge is
to be the personal transport provider of choice.”
Completion of the divestment of non-core assets during
the year ended 30 June 2017 was a significant strategic
initiative. Investments in ComfortDelGro Cabcharge
and CityFleet Networks Limited, as well as a Newcastle
property, were sold. The aggregate proceeds of $200 million
were used to fund a special dividend of $0.80 per share,
and to reduce debt.
Importantly, we entered the current financial year with
positive momentum. This is exemplified by the strong take-
up of the Spotto and Giraffe handheld terminals following
their launch in December 2016. Of the total $950 million of
Taxi fares processed by Cabcharge in FY17, $22.3 million
was processed through these new handheld products. By
June, the volume of fares processed through handheld
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terminals had reached an annualised $71 million, and by
August it was $100 million.
Cabcharge made a net profit after tax from continuing
operations of $21.3 million (calculated on an underlying
basis) for the year ended 30 June 2017. This was down
24.9% from the prior year, primarily reflecting lower service
fee income from Taxi payments. On a statutory basis, net
profit after tax from continuing operations rose 33.3% to
$13.7 million.
However, the resilience of the Company’s cash flow
throughout the restructuring phase, notwithstanding
significant regulatory change and aggressive competition,
facilitated the payment of semi-annual ordinary dividends
of $0.10 per share and, in the latest period, a significant
strengthening of our balance sheet such that we ended the
year with net cash of $25.8 million.
Strategy for building value for shareholders
In light of the transition from restructuring to growth,
I want to reiterate Cabcharge’s vision, which is to be
Australia’s leading provider of personal transport services.
We aspire to be the first choice for personal and corporate
Passengers, the preferred payment and Network service
partner for Drivers and Taxi Operators, and the employer of
choice in the personal transport sector.
This is an ambitious, but achievable, goal.
The principal disruptive challenges facing Cabcharge
in recent years have been regulatory changes and the
emergence of competitors offering alternative service and
payment methods.
Regulatory change has reduced our payment processing
fee for non-cash Taxi transactions as well as the holding
value of Taxi licences. By 30 June 2017, all States and
Territories other than Queensland and Tasmania had
implemented a 5% cap on payment service fees, and
Queensland is expected to do the same in the coming year.
This will stabilise the regulatory environment and facilitate a
rebasing of payment processing revenue.
Divesting non-core assets and strengthening our balance
sheet also allows us to consider strategic expansion.
In March 2017, we reached an agreement to acquire
the business operations of Yellow Cabs Queensland for
$19.5 million. This acquisition received approval from the
Australian Competition and Consumer Commission in
June and we completed the acquisition in July. Integrating
Yellow Cabs Queensland is a major priority for the current
financial year. It expands our Network services activities into
Queensland, and further builds our national platform.
Importantly, Yellow Cabs Queensland also operates a
courier fleet that provides us with a strategic option should
we conclude there is merit in rolling out the courier business
model across our other Network locations.
Board changes
We have also undertaken a program of Board renewal
during the past year. In August 2017, we announced the
appointments of Louise McCann and Clifford Rosenberg to
the Board. During the past year, former Chairman Russell
Balding and Non-executive Director Stephen Stanley
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departed. We thank them both for their contributions and
welcome Louise and Clifford. I would also like to thank Rick
Millen for serving as Chairman during the financial year.
Positioned for growth
Cabcharge’s expertise within the personal transport industry
places it in a strong position to continue to provide, and
grow, its services. In particular, Cabcharge expects to be
able to benefit from innovation that provides Passengers,
Drivers and Taxi Operators with a more convenient and
satisfactory bookings and payments experience.
Increasing population and urbanisation will underwrite
demand for personal transportation services, especially
as rising vehicle costs compete with less discretionary
expenses such as utility bills, food and lodging for
household disposable dollars. Demand for affordable,
convenient personal transport services will not abate, and
the opportunity for, and the ambition of, Cabcharge, is to be
the personal transport provider of choice.
I want to acknowledge the contribution made by your
executive team led by Chief Executive Officer and Managing
Director Andrew Skelton during this period and to thank
them on your behalf for their dedication and enthusiasm.
I would also like to thank my fellow Directors for their
invaluable support to both the Company and myself during
the year.
While we expect the year ahead to continue to challenge
us, we face those challenges with renewed optimism and
heightened expectation. Our people are highly motivated
and well equipped to continue to build value for our
shareholders.
Paul Oneile
Chairman
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Chief Executive Officer’s Report
We have renewed Cabcharge’s approach to technology,
strengthened our workforce and completed our program of
monetising non-core assets. Our enhanced capabilities are
being channelled into steadily improving services under the
umbrella of consolidated brands and on the foundation of a
strong and flexible balance sheet. Cabcharge is now firmly
focussed on being Australia’s leading personal transport
business.
We have responded to new competition with a sustained
and ongoing process of improving our products and
services and by expanding our distribution channels and
offerings. In the past year we:
• Released handheld payment terminals for Drivers in
NSW, Victoria and Queensland
• Committed to 13CABS as a national brand and
completed the 13CABS rebranding of the Sydney Taxi
fleet and launched a new 13CABS website
• Initiated new look 13CABS and Silver Service
Passenger booking, and Driver apps, generating
strong momentum reflected in increased downloads
Our approach to technology has been reinvented. A
significant restructuring and strengthening of our technology
team during FY17, incorporating targeted recruiting and
“Cabcharge is now firmly focussed on being
Australia’s leading personal transport business.”
• Completed the successful rollout of the FAREWAYplus
device in Taxis across Australia
• Launched a completely re-engineered Cabcharge
account offering with new customisable FASTCARDs
and eTICKETs supported by a sophisticated
administration portal Cabcharge Plus that leverages
real time data
a disciplined adoption of agile software development
methodology, resulted in a number of recent service
improvements and product launches. After assessing
the initial benefits of our new approach to technology
we are now extending our investment in the team and
expect the benefits of our transition to agile methodology
to accelerate in the second and third years of the new
structure. Stakeholders can anticipate substantial ongoing
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enhancements to the way in which trips are booked,
tracked and paid for in the years ahead.
Our marketing team and capabilities were also rejuvenated
during the last year. Additional investment in marketing to
reinforce and promote our upgraded products and services
is already generating results. Increased downloads of the
13CABS app began to flow quickly in May and June 2017,
and momentum has continued into FY18. In the market for
personal transport, our Passengers are now benefitting from
enhanced Driver and vehicle presentation, faster pick up
times, and a more dependable service.
We have completed our transformation agenda which, in
addition to bolstering our technology team and marketing
capabilities, included the sale of non-core assets.
Significant transactions concluded during the year included
the sale of our stake in the bus business ComfortDelGro
Cabcharge and the sale of our stake in the UK Taxi and
coach business CityFleet Networks. Throughout this period
we maintained our focus on streamlining and fortifying our
operating structure and dismantling Company silos as well
as establishing a consistent approach to technology across
the enterprise. Simultaneously, we have reconfigured a
range of activities and market offerings in order to preserve
our competitive positioning and strategic options whilst
absorbing a raft of regulatory changes across all States
and Territories that have impacted our business and our
stakeholders.
With a power of work behind us, the addition of the Yellow
Cabs business in Queensland holds special significance.
Fundamental components of our Strategy include increasing
scale and offering service on a national basis – Yellow Cabs
Queensland delivers on both of these. The expansion
signifies our confidence in the personal transport industry in
Australia and the ability of leading Taxi Networks to evolve
and service the growing market in a manner that resonates
with both Passengers and Drivers. Stakeholders on both
sides of the transaction are delighted to have joined forces
to focus pooled resources and knowledge and a combined
footprint on delivering enhanced services to Passengers
and Clients.
Looking ahead
Our vision is to be Australia’s leading personal transport
provider in 2021. In doing so we will shape, facilitate and
benefit from the transition to an increasingly mobile society.
Momentum is also building with Drivers. During FY17, 6,264
new Drivers joined the 13CABS Network and use of the
13CABS Driver app is gaining traction. New engagement
initiatives are strengthening our relationship with Drivers
who are in turn supporting our efforts to improve
service even when we tighten business rules in favour
of Passengers. Professional Drivers, supported by well-
resourced Taxi Operators and a high quality fleet, are key to
generating Passenger support and loyalty. Our engagement
and support of Drivers is imperative given the view that paid
personal transport will begin to expand rapidly by 2021,
well in advance of the widespread adoption of autonomous
vehicles for ad hoc Passenger journeys.
Growth levers that we are focussed on in the near term
include the rebuilt Cabcharge Account Offering, handheld
payment terminals, linking bookings with payments, sharing
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the benefits of our scale and technologies with other
Taxi Networks in the form of bureau services, and - in
established markets where regulatory conditions recognise
the growing demand for personal transport – fleet growth.
We will also continue to evaluate acquisition opportunities
that complement our core business or expand our operating
footprint in a manner that benefits shareholders.
The future
We have reset our business to accelerate our performance
in the growing personal transport market. We are confident
that further planned improvements in our services,
technology, marketing and culture during FY18 will impress
Passengers and attract more Drivers and Taxi Operators
to join and grow our fleet. We are energised by our early
progress and excited by the opportunities for growing
the personal transport market in a durable and legitimate
manner.
Growing population, urbanisation and demographics will
continue to facilitate a move towards convenient personal
transport services, including Taxis. Together with an
engaged workforce, enhanced services for Passengers,
focussed branding, and upgraded payment services, we
expect these trends to contribute to growing Taxi use and
payment turnover. We are increasing our investments in
marketing and technology to promote the improvements we
have made in order to attract and retain new customers that
will generate revenue over the medium and long term.
Andrew Skelton
Chief Executive Officer and Managing Director
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Opportunies for growth
The increasing demand for personal transport and continued structural shift
from cash to electronic payments support long term growth in our turnover
Fleet Growth
Payments Turnover
Improved services, technology and marketing will
leverage our coverage in our existing markets and
strengthen our ability to win market share.
Where regulatory settings permit we expect the
number of Taxis in Australia to return to their
longer term growth pattern.
We have successfully utilised a Private Hire
offering to enable Taxi Operators to grow their
fleets in select markets. In Adelaide Private Hire
vehicles now constitute 17% of the affiliated fleet.
Taxi Networks in regional centres are continuing
to leverage our technology, scale, support and in
some cases branding and are acquiring Network
services under bureau style contracts.
Continuing investment in upgrading our Taxi
specific payment functionality and services,
including the Cabcharge Account offering, will
bolster payment turnover in Taxis throughout
Australia.
We are establishing a growing position in the
handheld payment terminal market with Spotto
and Giraffe and will extend our reach to additional
locations.
Payments will be increasingly linked to contact
centre bookings, app bookings and web bookings
driving payment turnover through new channels.
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Business Activities
Mergers and Acquisitions
We will assess the opportunities to expand
the courier business and utilise the insurance
brokerage stake acquired as part of the Yellow
Cabs Queensland transaction.
Operating personal transport vehicles is now
underway with Company run Taxis on the road
in Brisbane and Adelaide, an activity that can be
scaled up and extended into additional markets.
Yellow Cabs Queensland adds approximately
1200 vehicles to the affiliated fleet from July 2017,
increasing our scale and moving us towards our
goal of providing personal transport on a national
basis.
We have a strong and flexible balance sheet
and are well placed to consider acquisition
opportunities that complement our core business
in a manner that benefits shareholders.
Demand for personal transport is growing and we are well placed to service
the requirements of all members of the community
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Board of Directors
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Paul Oneile
Independent Chairman
Paul was appointed as Chairman in February 2017. He was formerly the
independent Chairman of Intecq Limited from September 2012 to December 2016.
Paul has over 30 years of executive experience across many industries including
leisure and entertainment, retail, manufacturing, property, software and technology.
His other executive roles include CEO and Managing Director of Aristocrat Leisure
Limited (2003 – 2008), Chairman and CEO of United International Pictures (1996
– 2003), Non-executive Director of Village Roadshow Limited (1990 – 1996), and
Managing Director of The Greater Union Organisation Pty Ltd (1990 – 1996). Paul
holds a Bachelor of Economics degree from the University of Sydney.
Louise McCann
Independent Non-executive Director
Louise was appointed as a Director in August 2017. She is currently a Non-executive
Director of Macquarie Media Limited, Credit Union Australia Limited, Grant Thornton
Australia and the University of Notre Dame Australia. Louise was previously a
Non-executive Director of iiNet Limited (2011 – 2015). Louise has over 25 years’
experience in media, publishing and market research in Australia and internationally.
Her previous executive roles include CEO for Asia and Managing Partner for Australia
for Hall & Partners (2009 – 2012), CEO and Chairman of Research International (ANZ)
(2004 – 2009), and CEO of OzTAM Pty Ltd (2001 – 2004). Louise holds a Master of
Management from Macquarie Graduate School of Management, is a fellow of the
Australian Institute of Company Directors, the Institute of Managers and Leaders, and
the Royal Society for Arts, Manufacturers and Commerce.
Donnald McMichael
Independent Non-executive Director
Donn was appointed as a Director in June 1996. He is a member of the Audit
and Risk Committee and a member of the Remuneration and Nominations
Committee. Donn has deep operational experience in the personal transport
industry. He has served on the Board for over 20 years. Prior to this he was
Chairman of Aerial Capital Investments Pty Ltd (1987 – 1998) (formerly Aerial
Taxi Co-Op Society Limited), a Director of Taxis Australia Pty Ltd (1992 – 2000),
a Director of Canberra Taxi Industry Association Ltd (1989 – 1998) and a
Director of Yellow Cabs (Canberra) Pty Ltd (1998 – 2002). Donn has served on
a number of not-for-profit Boards and is currently the CEO of the Noah’s Ark
Resources Inc.
Clifford Rosenberg
Independent Non-executive Director
Clifford was appointed as a Director in August 2017. He is currently a Non-
executive Director of Afterpay Touch Group Limited, Pureprofile Limited and
Nearmap Limited.Clifford has over 20 years’ experience in the digital space
as an entrepreneur and as an executive, with specific experience in disrupting
businesses. His previous executive roles include Managing Director, South-East
Asia, Australia & New Zealand for LinkedIn (2009 – 2017), Managing Director
of Yahoo! Australia & New Zealand (2003 – 2006) and Founder and Managing
Director of iTouch Australia and New Zealand, one of the largest mobile content
and application providers in Australia. Clifford holds a Master of Science in
Management from the Ben Gurion University of the Negev, and a Bachelor of
Business Science (Honours) in Economics and Marketing from the University of
Cape Town.
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Richard Millen
Independent Non-executive Director
Rick was appointed as a Director in June 2014. He is the Chairman of the Audit
and Risk Committee and a member of the Remuneration and Nominations
Committee. He also served as Chairman from November 2016 to February 2017.
Rick has extensive experience in corporate transactions, corporate finance and
accounting. Having spent over 30 years with PwC, his senior executive roles at
the firm included leading its first Corporate Finance practice and subsequently
the firms’ broader Advisory practice. Rick has a strong background in corporate
responsibility. He led PwC’s internal Corporate Responsibility agenda and is
currently a Director of Australia for UNHCR. Rick holds an MA Hons Jurisprudence
(Law) from Oxford University, is a graduate of the Australian Institute of Company
Directors and is a member of the Institute of Chartered Accountants in Australia
and New Zealand.
Andrew Skelton
Chief Executive Officer and Managing Director
Andrew Skelton was appointed CEO in June 2014 and Managing Director in
December 2014. Andrew was the Group Corporate Counsel and Company
Secretary from December 2011 until his appointment as CEO. Andrew has over
15 years of experience in the personal transport industry. He has held senior
management and executive roles in Taxi Network payments and operations,
including as Chief Operating Officer of Black Cabs Combined Pty Ltd from
2005 to 2011. Prior to this Andrew was a practising solicitor at K&L Gates in
Melbourne specialising in mergers and acquisitions. Andrew holds an MBA,
Bachelor of Laws, Bachelor of Commerce and a Graduate Diploma of Applied
Corporate Governance.
Trudy Vonhoff
Independent Non-executive Director
Trudy was appointed as a Director in August 2015. She is the Chairman of
the Remuneration and Nominations Committee and a member of the Audit
and Risk Committee. Trudy is currently a Director of Ruralco Holdings Limited,
AMP Bank Limited and Tennis NSW Limited. Trudy has a strong finance and
risk management background in the financial services industry. She has held
senior executive positions with Westpac and AMP, including leading Westpac’s
Commercial Banking and Agribusiness unit. Trudy holds a Bachelor of
Business from the Queensland University of Technology, a Master of Business
Administration from the University of Technology Sydney and is a graduate of the
Australian Institute of Company Directors.
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Executive Team
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Andrew Skelton
Chief Executive Officer and Managing Director
Andrew Skelton was appointed CEO in June 2014 and Managing Director in
December 2014. Andrew was the Group Corporate Counsel and Company
Secretary from December 2011 until his appointment as CEO. Andrew has over
15 years of experience in the personal transport industry. He has held senior
management and executive roles in Taxi Network payments and operations,
including as Chief Operating Officer of Black Cabs Combined Pty Ltd from
2005 to 2011. Prior to this Andrew was a practising solicitor at K&L Gates in
Melbourne specialising in mergers and acquisitions.
Andrew holds an MBA, Bachelor of Laws, Bachelor of Commerce and a
Graduate Diploma of Applied Corporate Governance.
Sheila Lines
Chief Financial Officer
Sheila Lines commenced as Chief Financial Officer in July 2015. Sheila joined
Cabcharge from BPAY where she was the Chief Financial Officer since 2013.
Prior to BPAY, Sheila was the Chief Financial Officer and then Chief Executive
Officer of KeyTech Limited based in Bermuda. Sheila has held several senior
financial roles and has been an Independent Non-executive Director of
Butterfield Bank where she served as the Chair of the Audit Committee and
Chair of the IT Committee. Sheila holds a Bachelor of Laws from the University
of London, is a Fellow of the Institute of Chartered Accountants in England and
Wales and is a member of the Institute of Chartered Accountants in Australia
and New Zealand.
Adrian Lucchese
General Counsel and Company Secretary
Adrian Lucchese commenced at Cabcharge in October 2014. Adrian began
his career with Blake Dawson Waldron (now Ashurst) in 1988 and has held
a number of senior management roles including Group General Counsel and
Company Secretary of George Weston Foods Limited where, amongst other
things, he was responsible for many of the improvements to its competition
compliance program. From August 2011 to October 2014, Adrian was Company
Secretary of AMP Capital Holdings Limited where he contributed to many
governance, structural and business improvement initiatives. Adrian holds
Bachelor degrees in both Science and Laws from the University of Sydney and a
Master of Laws from the University of Sydney.
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Fred Lukabyo
Chief Operating Officer
Fred Lukabyo commenced as Chief Operating Officer in November 2014. From
2002 Fred was Chief Operating Officer, Taxi Services. Prior to this, Fred was
responsible for Customer Operations in Australia, New Zealand and Fiji at Tyco
International. Fred had previously worked in the Deluxe Red and Yellow Cabs Group
as Communications Centre Manager until 1999. Fred holds an Australian Graduate
School of Management (AGSM) MBA awarded jointly from the University of New
South Wales and University of Sydney, a Bachelor of Business from the University of
Technology, Sydney and is a Tier One qualified Insurance Broker.
Stuart Overell
Chief Operating Officer, Taxi Services
Stuart Overell commenced as Chief Operating Officer, Taxi Services in November
2014. Prior to this Stuart was Chief Operating Officer for Black Cabs Combined
from December 2011, Operations Manager from January 2010 and IT Manager
from 2007. Before joining the Group, Stuart was IT Manager for the multi-
national manufacturing company Feltex Carpets. Stuart holds a Bachelor of
Computing (Business Systems) from Monash University and is a graduate of the
Royal Military College Duntroon.
Deon Ludick
Chief Technology Officer
Deon Ludick commenced as Chief Technology Officer in July 2016. Deon
joined Cabcharge from Macquarie Group Ltd where he held the position of
Director Digital Delivery since 2015. Deon has held several senior technology
related roles, including Program Director at Woolworths, responsible for rolling
out transformational technology to 200,000 employees and Head of Mobile at
Westpac Banking Corporation. Deon holds a diploma from the Computer Users
Council in South Africa.
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Operating and Financial Review
Principal Activities
Cabcharge provides reliable, efficient and affordable personal transport solutions. Cabcharge serves
Passengers, Drivers and Taxi Operators by facilitating bookings, trips and payments. Cabcharge is a
key participant in Australia’s personal transport industry. It is the largest processor of Taxi payments
and approximately one third of Taxis in Australia are affiliated with Cabcharge’s 13CABS and Silver
Service Network.
Payments
Cabcharge provides FAREWAYplus terminals fitted in Taxis which enable Drivers to process non-cash
Taxi fare payments via credit and debit cards, or using a Cabcharge Corporate Account product.
Cabcharge Corporate Accounts provide corporate Clients with a range of payment solutions to charge
Taxi expenditure on account and which provide trip information to enable efficient management of
travel expenditure.
Passengers using our Taxi Networks are able to store Cabcharge FASTCARD, credit and debit cards in
our 13CABS and Silver Service booking apps for a convenient end of trip payment experience.
In December 2016 Cabcharge started providing Taxi and Hire Car Drivers with handheld terminals
which travel with the Driver, branded Spotto (Taxi) and Giraffe (Hire Cars).
Cabcharge receives service fee income on non-cash Taxi payment services based on the value of the
fare processed with the exception of Giraffe for which a monthly rental income is received.
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Bookings and trips
Cabcharge provides Taxi Network services to Taxi Operators and Drivers in Sydney, Melbourne,
Adelaide, Newcastle, regional Victoria and the Northern Territory.
These Networks (predominantly operating under the 13CABS and Silver Service brands) provide
branding and facilitate efficient bookings via world class apps, web based booking and call centre
operations. They also provide full Taxi fit outs and repairs to assist Operators in managing a high-
quality fleet of cars; vehicle finance and insurance to assist Operators as small business owners; and
Driver education, training and uniforms to support service levels for Passengers. Networks also broker
Taxi licence plates on behalf of the owner to Taxi Operators affiliated with the Network.
In July 2017 Cabcharge acquired Yellow Cabs Yellow, the largest Taxi Network in Brisbane.
Cabcharge receives a fixed monthly fee from Taxi Operators for Network subscriptions which represent
the majority of Taxi Network revenue. Brokered Taxi plate licence income and payments to the owner
are on a monthly fee basis set by market conditions for each type of Taxi licence plate. This service
does not generate significant net margin for Cabcharge, however acting as an intermediary in the Taxi
plate licence market is an important service for our Taxi Operators and Taxi licence plate owners. Other
Taxi related services not included in the Network subscription fee generate revenue as the services are
provided.
Other activities
Cabcharge owns a national portfolio of Taxi licence plates which are leased at monthly rates set by
market conditions for each Taxi plate licence type. School bus route services in Adelaide generate
revenue based on contracts for these services with the State Government. Cabcharge also receives
income for providing processing services for State and Territory Taxi transport subsidy schemes.
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Operating and Financial Review
Strategy and Prospects
Cabcharge’s vision for 2021 is to be Australia’s leading personal transport business and the first choice for personal
and corporate Passengers, the preferred payment and Network service partner for Drivers and Taxi Operators and the
employer of choice in the personal transport sector.
Cabcharge sees the following dynamics shaping the industry over the medium term:
• Population growth and economic development will continue to support the Australian transport market
• Increasing population, urbanisation and vehicle costs will continue to facilitate a move towards affordable,
convenient personal transport services
• To be the personal transport provider of choice for Passengers and meet this demand, we must win the battleground
to recruit and retain Drivers, supported by well-resourced Taxi Operators and a high-quality fleet
• The convenience of payments and mobile technology will continue to facilitate a shift away from cash towards
paywave, in-app payments (such as Apple Pay and PayPal) and secure charge accounts like Cabcharge – creating
opportunities for payments innovation
• Regulated service fee limits will continue to constrain payments returns in this market for all players.
Cabcharge’s expertise within the personal transport industry places the Company in a strong position to continue to
provide, and grow, the services offered to Passengers, Drivers and Taxi Operators. Over the medium term, Cabcharge
expects personal transport to remain the core of the business, with bookings, payments and services enhanced by
technology and mobile.
To achieve Cabcharge’s 2021 vision, Management has been focussed on: divesting non-core assets; providing
dependable and frictionless services for Passengers; creating a strong Driver value proposition; building adaptive and
effective technology platforms; and strengthening the 13CABS and Silver Service brands.
During FY17, Cabcharge made the following progress against its strategic initiatives:
• Divestment of non-core assets: Cabcharge completed the refresh of its balance sheet by divesting its stake in
ComfortDelGro Cabcharge (CDC), CityFleet Networks Limited (CFN), and a Newcastle property – this resulted in
total proceeds of $200 million and allowed Cabcharge to reward shareholders with a fully franked special dividend of
$0.80 per share
• Building a national platform: Cabcharge reached an agreement to acquire Yellow Cabs Queensland for $19.5 million,
expanding Network Services activities to Queensland
• Handheld terminals: Cabcharge launched its handheld payments terminals – Spotto and Giraffe
• Growing technology footprint: Cabcharge completed the rollout of its FAREWAYplus upgrade and launched new
Passenger booking and Driver apps which generated strong momentum reflected in increased downloads
• Continued investment in 13CABS as a national brand: Cabcharge upgraded vehicle tracking and status updates,
completed the 13CABS rebranding in Sydney and launched a new 13CABS website
• Investment in Cabcharge Account customers: The Cabcharge account offering was upgraded and launched with
new customised FASTCARDS which provide real time data
• Investment in people: Cabcharge enhanced the capability of its technology team through a number of strategic hires
resulting in the delivery of the new Cabcharge Portal and the launch of handheld terminals during the year.
20
Financial Results
Table 1: Staturory Basis
Revenue
Other income
Expenses
Impairment Charges
EBITDA
Depreciation & Amortisation
EBIT
Net interest
(Loss) / Profi t before tax
Income tax
NPAT from continuing operations
(Loss) / Profi t from discontinued operations
NPAT
EBITDA margin
EBIT margin
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
FY17
$M
151.9
1.7
FY16
$M
168.8
14.1
Change
over PCP
(10.0%)
(105.7)
(112.5)
6.1%
(8.3)
39.7
(13.7)
26.0
(1.7)
24.3
(10.6)
13.7
(104.3)
(90.6)
26.1%
17.1%
(27.7)
42.7
(15.6)
27.1
(0.4)
26.7
(16.4)
10.3
15.3
25.6
25.3%
16.1%
(7.1%)
(4.2%)
(9.0%)
33.3%
(453.5%)
Earnings per share from continuing operations (AUD)
11.4 cents
8.5 cents
Earnings per share attributable to owners of the company (AUD)
(75.2 cents)
21.3 cents
21
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Operating and Financial Review
Table 2: Underlying basis excluding significant items
Revenue
Other income1
Expenses2
Impairment Charges 3
EBITDA
Depreciation & Amortisation4
EBIT
Net interest5
Profi t before tax
Income tax6
NPAT from continuing operations
EBITDA margin
EBIT margin
FY17
$M
151.9
0.0
FY16
$M
168.8
0.0
Change
over PCP
(10.0%)
(103.6)
(110.2)
6.0%
0.0
48.4
(13.7)
34.7
(1.7)
33.0
(11.7)
21.3
0.0
58.6
(13.9)
44.7
(4.9)
39.8
(11.5)
28.3
31.8%
22.8%
34.7%
26.5%
(17.4%)
(22.4%)
(17.1%)
(24.9%)
Earnings per share from continuing operations (AUD)
17.7 cents
23.5 cents
Earnings per share attributable to owners of the Company (AUD)
23.9 cents
36.2 cents
1 Excludes gain on sale Newcastle property $1.7M ($14.3M in FY16, gain on sale Riley St property)
2 Excludes $1.6M write-off capitalised development costs and $0.5M employee separation costs ($2.3M in FY16)
3 Excludes non-cash impairment charges on Taxi plate licences
4 Excludes $1.7M accelerated amortisation on NSW wheelchair accessible Taxi plate licences in FY16
5 Excludes $4.5M gain on sale of shares in ComfortDelGro Corporation Limited in FY16
6 Excludes tax effect of signifi cant items
Revenue
Revenue declined 10%, or $16.9 million to $151.9 million (FY16: $168.8 million).
Of this decline $11.4 million relates to Taxi service income where lower volumes reduced revenue by $9.7 million and
changes in regulated service fee limits reduced revenue by $1.7 million compared to FY16. The volume reduction was
driven by both competition from alternative Taxi payment processors and pressure on total Taxi trip volumes due to
alternative transport providers including Uber.
In December, Cabcharge launched Spotto and Giraffe handheld terminals with strong take-up over 2H17. Of the total
$950 million of Taxi fares processed by Cabcharge for FY17, $22.3 million was processed through the new handheld
products and at June the annualised volume of fares processed through handheld terminals had reached $71 million.
Network subscription fee income was $0.9 million lower, reflecting a 1.2% decline in the car fleet. This decline was driven
by New South Wales regulatory policy on plate fee levels for annual plates leased by the Government, which resulted in a
return of Taxi licence plates by Taxi Operators. Fleet grew in Adelaide and remained stable in Victoria.
Brokered Taxi plate income was $1.7 million lower due to lower market rates in New South Wales for Taxi plate leases
compared to the prior year. Volumes of brokered plates remained stable. This reduction in revenue has been substantially
offset as lower market rates also resulted in a corresponding lower expense for brokered Taxi plate licence fees paid to the
owners.
Lower Network fleet activity also resulted in lower demand for other Taxi related services income and vehicle financing
income which declined $1.2 million and $0.6 million respectively.
Income from Cabcharge’s portfolio of owned Taxi licence plates declined $1.9 million driven by lower average market
rates for plates in the various States and Territories over the prior year reflecting the impact of regulatory reform in various
States over this 24 month period. June monthly plate income was $0.3 million ($3.6 million on an annualised basis)
excluding income on our Victorian plates which, following implementation in July 2017 of regulatory reforms announced in
2016, will not attract plate fees in the future.
22
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Total Taxi fares processed ($m)
1 , 0 29
1 ,1 1 8
1 , 09 3
6 71
7 6 2
7 6 2
7 5 1
7 5 1
9 5 0
6 3 7
6 3 7
3 59
F Y 1 4
3 5 6
3 5 6
3 4 2
3 4 2
3 1 4
3 1 4
F Y 1 5
F Y 16
F Y 17
C A B a / c s
B a n k I s su e d & 3 r d P a r t y
Handheld Taxi fares processed
8 . 0
7 . 0
6 . 0
5 . 0
)
M
$
(
4 . 0
3 .0
2 . 0
1 . 0
0
3 , 20 1
2 , 75 0
2 , 2 13
5 . 9
1 , 5 67
5 . 2
5 0
5 0
5 0
5 0
2 48
3 . 7
3 . 3
1 , 0 86
2 . 2
7 50
1 . 2
5 00
0 . 9
J u l 1 6
A u g 1 6
S e p 1 6
O ct 1 6
N ov 1 6
D ec 1 6
J a n 17
F eb 1 7
M a r 1 7
A p r 17
M ay 1 7
J u n 1 7
F a r e s P r o ce s s e d
I ss u e d Te r m i na l s
* includes all categories of transactions
4 , 50 0
4 , 00 0
3 , 50 0
3 , 00 0
2 , 50 0
2 , 00 0
1 , 50 0
1 , 00 0
5 0 0
0
23
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Operating and Financial Review
7 , 25 9
7 , 44 8
7 ,3 7 7
Fleet
9 , 00 0
8 , 0 0 0
7 , 00 0
6 , 0 0 0
5 , 0 0 0
4 , 0 0 0
3 , 0 0 0
2 , 0 0 0
1 , 00 0
0
3 0 J u n 1 5
3 0 J u n 1 6
3 0 J u n 1 7
Other income
In keeping with our strategy of releasing liquidity from non-core assets, in FY17 we sold a property located in Newcastle
New South Wales for a $1.7 million gain which is included in other income. Prior year other income included a $14.1
million gain on the sale of our Riley Street property in Sydney.
Expenses
On a Statutory basis, total operating expenses decreased 18.1% to $127.7 million (FY16: $155.9 million). On the
underlying basis (see table 2) total operating expenses reduced 5.5% to $117.3 million.
Volume driven expenses
Processing fees to Taxi Networks reduced $1.2 million due to reduced total volume of fares processed compared to the
prior year. Brokered Taxi plate licence costs reduced $1.5 million due to lower average market rates in New South Wales
in FY17 while volumes remained stable. As noted under Revenue, the associated revenue for brokered Taxi licence plates
reduced $1.7 million. Other Taxi related costs reduced $2.6 million reflecting the lower activity (and therefore materials
and expenses) which also reduced other Taxi related service income $1.2 million. Transaction processing expenses
reflect the production costs of the Cabcharge Account products and are $1.5 million lower than prior year. The prior year
included a complete upgrade of FASTCARDs and production efficiencies were achieved in the current year.
In total, volume driven cash expenses reduced $6.8 million compared to the prior year.
Expenses not directly relating to volume drivers
On a Statutory basis, employee benefits expense increased $1.1 million or 3% compared to the prior year. On an
underlying basis, which excludes separation costs of $0.5 million in FY17 and $2.3 million in FY16, employee benefits
expense increased $2.9 million or 7% due to additional Information Technology labour resources and pay increases in FY17.
General and administrative expenses decreased $2.6 million or 12% compared to the prior year. Of this reduction $1.2
million related to marketing expenditure which reduced from $4.6 million to $3.4 million. Cabcharge focused on investment
in Information Technology resources to further develop its products in FY17, including the 13CABS app and the
Cabcharge Plus portal. This resulted in a delay in related marketing expenditure impacting FY17 marketing expense. In
the last quarter marketing activities and associated expense increased. Excluding the marketing expense reduction which
was driven by timing and is not a permanent reduction, general and administrative expenses reduced $1.4 million due to
efficiency initiatives.
24
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Combined, depreciation and amortisation expenses decreased $1.9 million on a statutory basis and $0.2 million on an
underlying basis, compared to the prior year. In the prior year our Wheel Chair Accessible Taxi licence plates in New South
Wales were fully amortised, resulting in additional $1.7 million in amortisation expense after announcement of regulatory
reforms affecting the lease income on this class of Taxi licence plates.
Impairment charges of $7.9 million in FY17 and $27.7 million in FY16 relate to our portfolio of Taxi licence plates. Over the
last 24 months regulatory reforms affecting Taxi plate licence income have been announced in New South Wales, Victoria,
South Australia and Queensland. The impairment charges reflect the lower expected future income from our portfolio over
their remaining life following these reform announcements.
During FY17 Cabcharge wrote-off $1.6 million in development costs previously capitalised to adjust carrying values on
individual assets to current assessment of future economic value. The largest individual item was $1.1 million in relation to
a project to develop an in car security camera. With new more cost effective externally developed cameras available in the
market, Cabcharge decided to cease in-house camera development.
Other expenses in FY17 include $1 million in the lease back expense following the June 2016 sale of the Riley Street
premises in Sydney. The lease back period is for two years with two further six month options to renew. This expense
was not incurred in FY16. Excluding the lease back expense other expenses decreased $1.1 million due to efficiency
initiatives.
In total, statutory non-volume driven expenses decreased $21.4 million. Excluding non-cash expenses being impairment
charges, capitalised development costs written off, depreciation and amortisation expense statutory non-volume driven
expenses decreased $1.6 million in FY17. On an underlying basis, after adjustment for separation costs, cash non-volume
driven expenses decreased $1.3 million.
Net finance costs
Net finance costs increased $1.3 million in FY17. FY16 finance income included a $4.5 million gain on the sale of shares
in ComfortDelGro Corporation. Excluding this prior year gain, net finance costs reduced $3.2 million as a result of
lower debt balances and a $0.4 million gain on termination of an interest rate swap used for hedging purposes after the
application to loan balances of proceeds from the completion of the sale of the 49% Associate interest in CDC in February
2017.
Income tax expense
The income tax effective rate on pre-tax profit from continuing operations of 44% (FY16: 61%) is affected by the non-tax
deductibility of impairment charges in FY17 and FY16.
Discontinued Operations
The loss from discontinued operations net of tax of $104.3 million (FY16: $15.3million profit) reflects the sale of
Cabcharge’s 49% minority interest in CDC and CFN. These transactions form part of Cabcharge’s strategy to divest
its non-core assets. Components of discontinued operations include earnings up to the date of sale of the Associates,
previously recorded impairment charges in relation to CFN, the differential from realised value on sale to balance sheet
carrying values in assets and reserves. Details of the components of discontinued operations are disclosed in the financial
statements.
Cabcharge sold its 49% investment in CDC on 21 December 2016 for $184.0 million, net of transaction costs, to the
majority shareholder in CDC, ComfortDelGro. The transaction completed on 15 February 2017. In addition on sale CDC
repaid a $18.8 million non-current loan due to Cabcharge.
Cabcharge sold its 49% investment in CFN in June 2017 for £7.9 million to the majority shareholder in CFN,
ComfortDelGro. Sale proceeds were received after 30 June 2017.
25
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Operating and Financial Review
Profit after Tax
Cabcharge made a net profit after tax from continuing operations of $13.7 million in FY17 (FY16: $10.3 million) on a
Statutory basis. On an Underlying basis, Cabcharge’s net profit after tax from continuing operations was $21.3 million in
FY17 (FY16: $28.3 million), with service fee income from Taxi payments the largest driver of the change.
Cash Flow
2 50
2 0 0
1 5 0
1 00
5 0
0
1 3 . 0
1 06 . 0
1 84 . 0
To ta l
D iv i d e nd P a i d
$ 12 0 . 4m
F r e e C a s h F l ow
$ 2 5. 7 m
3 7. 8
1 2 .1
1 4 .3
1 8 .8
9 6. 3
2 4. 1
2 9. 5
O pe n i n g
C a s h
C a sh fl ow
f r o m
o p er a t i o ns
C a pi t a l
e x p e n d it u r e
R i l e y S t r e e t
p r o c ee d s,
n e t o f t a x
R ep a ym e nt
f r o m C DC
P r o ce ed s
f r o m
s a l e o f C DC
R e d uc t i o n
b o rr o wi n gs
S p ec i a l
d iv i de n d
F Y 17 I n t e ri m +
F i n al F Y 1 6
d iv i de n d
C l os i ng
c a s h
Cash flow from operations of $37.8 million represents a 102% conversion of cash profit (profit after tax and before
depreciation, amortisation, impairment charges and capitalised development costs written-off). This high conversion ratio
is consistent with prior years and reflects the short working capital cycle in our operating business model.
Capital expenditure was $1.7 million less than combined depreciation and amortisation expense for FY17. Of the
$12 million in capital expenditure, $6.2 million related to eftpos infrastructure for processing Taxi payments
(FY16:$11.5 million) and $3.4 million related to capitalised software development (FY16: $3.3 million). The reduction in
eftpos infrastructure in FY17 reflects the completion in December 2016 of a two year programme of installation of the
FAREWAYplus in approximately 22,000 Taxis across Australia.
The sale of Riley Street was completed in FY16 and the proceeds were received in FY17.
Proceeds from the sale of our 49% Associate interest in CDC ($184 million) and repayment by CDC of a loan owed to
Cabcharge ($18.8 million) were applied to a special dividend ($96.3 million) and reduction of borrowings ($106 million).
Final FY16 and interim FY17 dividends paid in the year totalled $24.1 million, 94% of free cash flow from (cash flow from
operations less capital expenditure) of $25.7 million for FY17.
26
Balance Sheet
Cash and cash equivalents
Other current assets
Total current assets
Investments in associates
Property, plant and equipment
Taxi plate licences
Other non-current assets
Total non-current assets
Total assets
Loans and borrowings
Other liabilities
Total liabilities
Total net assets
Net Debt/Equity
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Jun 2017
($M)
Jun 2016
($M)
29.5
83.2
112.7
-
35.4
33.2
35.3
13.0
85.1
98.1
296.6
40.2
41.2
55.0
103.9
433.1
216.6
531.2
3.7
31.8
35.4
109.7
34.5
144.1
181.2
387.0
(14.2%)
25.0%
The Company’s net assets as at 30 June 2017 decreased to $181.2 million from $387.0 million at 30 June 2016 primarily
due to the special dividend of $96.3 million paid after the sale of the CDC Associate interest and due to the $104.3 million
loss from Discontinued Operations.
Investment in associates decreased due to the sale of both Associates in FY17 and Other non-current assets decreased
due to the repayment on sale of CDC of a non-current loan of $18.8 million owed to Cabcharge. Loans and borrowings
decreased as all outstanding bank borrowings were repaid from the proceeds of the sale of CDC.
The Company has reduced its finance facility limits from $160 million to $100 million following the sale of CDC, reducing
commitment fee expense for unused lines of credit.
The net debt (cash) to equity ratio was (14.2%) at 30 June 2017 (30 June 2016: 25.0%). The available liquidity at 30 June
2017 was $129.5 million (30 June 2016: $107 million), consisting of $29.5 million in cash (2016: $13 million) and $100
million in unused facilities (2016: $94 million).
Two asset sales in FY17, our 49% Associate interest in CFN for £7.9 million and our Newcastle property for $3 million
settled after the year end. The acquisition of Yellow Cabs Queensland for $19.5 million completed and settled after the
year end.
Outlook
Cabcharge’s investment in technology and brand positioning is crucial in providing a future growth platform for the
Company. To this end, Cabcharge plans to invest in FY18 up to an additional $8 million in marketing and in uplifting our
technology resource capabilities. We believe our commitment to becoming the first choice for Passengers, Drivers, Taxi
Operators and employees will give us a sustainable, long-term competitive position.
Cabcharge will continue to invest in new Taxi Payment technologies, including the national roll-out and Driver take-up of
Spotto.
Cabcharge remains committed to growing fleet numbers through our compelling Taxi Service offering. We anticipate the
introduction legislation to reduce the cost of licences in Victoria (to an annual licence fee of $50) will provide significant
opportunities for fleet growth. Conversely, in New South Wales no new plates are being issued and we expect that
dynamic to continue in FY18.
We will continue to deliver better experiences for Passengers and Drivers through exploration of vertical integration
opportunities as a Taxi Operator. A core focus for FY18 will be to commence integration of the recently acquired Yellow
Cabs Queensland.
27
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Operating and Financial Review
The personal transport industry is large and growing and remains at the core of our business. While Cabcharge has faced
various regulatory and competitive hurdles we remain in a position of market strength and have the potential to fully
capitalise on current industry dynamics.
The recent conclusion of reviews and legislative implementation at Federal, State and Territory levels provides the industry
with regulatory certainty for the foreseeable future. We expect the previously announced Taxi payment service fee limit in
Queensland will be implemented during 1H18.
Our balance sheet is in a strong position to support our near-term goals while maintaining flexibility for future growth
initiatives.
Material Business Risks
The Board reviews material business risks on a regular basis. Risks that have the potential to impact the Company’s future
financial prospects and strategic imperatives are set out in the table below, together with mitigating actions to minimise
those risks.
The risks are in no particular order and do not include common risks that affect all companies, such as key person risk. Nor
do they include general economic risks such as significant changes in economic growth, inflation, interest rates, consumer
sentiment and business confidence that could have a material impact on the future performance of the Company.
Strategic Risk
Nature of Risk
Actions / plans to mitigate
Regulatory
changes
Cabcharge operates in industries that are subject to
State and Territory regulation and control.
Work with Taxi Regulators on issues affecting
the Taxi Industry.
As at 30 June 2017, in all States and Territories
other than Queensland and Tasmania, a 5% limit on
payment service fees has now been implemented.
Queensland is expected to implement a 5% limit on
payment service fees in 1H18.
It is possible that Taxi Regulators may impose
lower limits on the level of service fees able to be
charged to Cabcharge customers thereby potentially
impacting revenue and earnings.
It is also possible that Taxi Regulators may also
change rules around required standards and quality
control aspects of Taxi Networks.
Taxi Regulators may affect the value of Taxi plate
licences through setting supply of new Taxi plate
licences and setting rates for Government leased
Taxi plate licences.
In addition, changes in Taxi regulation, including
establishing a regulatory environment for non-Taxi
transport can indirectly affect the value of Taxi plate
licences.
Taxi Regulators may also restrict the supply of Taxi
plate licences which limits growth opportunities for
the Taxi Industry.
Continued emergence of competitors in personal
transport who offer alternative service and payment
methods, both within and outside the regulatory
framework, or subject to less stringent regulation.
Potential loss of business if the Company fails to
keep pace with technological change with respect to
Network Operations, bookings and payments.
Advocate for and deliver standards and controls
that result in maintaining or improving the
standards of customer service and safety that
are essential to transport user confidence.
Maximise opportunities for Cabcharge
presented by new point to point regulatory
frameworks.
We test our portfolio of Taxi plate licences for
impairment at each reporting date.
Be at the forefront of Taxi Network app
development and integrate bookings and
payments.
Continue investment in technology and
marketing as reflected by:
• the launch and growth of handheld
terminals Spotto for Taxi Drivers and
Giraffe for Hire Cars
• Upgrades and added features to the
13CABS and Silver Service Taxi apps
• Cabcharge payments gateway and switch,
FAREWAYplus
• Adoption of a national 13CABS brand.
Changes to
competitive
landscape /
Changes to IT
environment
28
Corporate Governance Statement
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
29
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
The Board of Cabcharge Australia Limited (the Company or Cabcharge) is responsible for the corporate governance
of the Company. The Board believes that robust corporate governance policies and practices, internal control systems
and risk management frameworks, will contribute to the responsible creation of long-term value for the Company’s
shareholders.
Throughout the year ended 30 June 2017 (FY17), the Company’s corporate governance arrangements were consistent
with the ASX Corporate Governance Council’s Principles and Recommendations (ASX Principles).
This Corporate Governance Statement is current as at 26 September 2017 and has been approved by the Board.
Corporate Governance Highlights
The Company continued to focus on corporate governance during the year reflecting the Board’s commitment to
fostering a strong governance culture. Key highlights included:
• Corporate governance benchmarking:
A corporate governance benchmarking exercise was conducted in FY17. The results confirmed that the
Company’s corporate governance policies and charters continue to meet the ASX Principles and reflect best
market practice amongst leading ASX companies.
• Policy refresh:
The Company updated a number of its policies, including the Diversity Policy, the Securities Dealing Policy and
the Market Disclosure and Investor Engagement Policy, to ensure that they continue to align with best practice
standards.
• Recruitment of new Chairman and Board renewal process:
The Board has been undergoing a renewal process over the past year. This resulted in a number of changes to
the Board’s composition, including the retirement of Russell Balding AO and the resignation of Stephen Stanley
in November 2016, the appointment of a new Chairman in February 2017, and the appointment of two
Non-executive Directors in August 2017.
• Committee composition:
As a result of changes to the Board’s composition, the composition of the Committees was also reviewed
during FY17. Trudy Vonhoff was appointed Chairman of the Remuneration and Nominations Committee (RANC)
(formerly the Corporate Governance Committee) in November 2016.
30
Corporate Governance Statement C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
1. The Board and its Role
1.1 Responsibilities of the Board
The Board has overall accountability for the proper management of Cabcharge and its controlled entities (Group). Management
is responsible for implementing the Company’s strategy and for operating within the risk parameters set by the Board. The
respective roles and responsibilities of the Board, its Committees and the CEO are set out in the diagram below.
Chief Executive Officer
The CEO and his delegates (including members of the
executive team) have responsibility for the day
to day operations and management of the Company
in accordance with approved delegated authority
n
n a
Dele g atio
s i g h t
r
e
v
d o
Accountability a
n
Cabcharge Board
p
o
r
t
i
n
g
d
r
e
The Board Charter sets out the Board’s key
responsibilities which include:
• Selecting and evaluating the performance of
the CEO
• Providing input and final approval for
corporate strategy
• Approving and monitoring progress of
major capital expenditure, acquisitions
and divestitures, and overseeing capital
management
• Developing and reviewing the Company’s
values, and monitoring corporate culture,
setting the tone from the top
D
e
l
e
g
Audit and Risk
Committee
a
tio
n a
n
d oversight
d
n
o m m e
R e c
g
a tio n s and reportin
Remuneration
and
Nominations
Committee
Board Committees
Board Committees are established by the
Board and are responsible for specific
areas. The various powers, duties and
responsibilities of the Board may be
delegated to a Committee
The Board and Committee Charters are reviewed by the Board at least annually and more frequently if required. A review of
the Charters was conducted in FY17 and the Board considers the Charters to reflect best practice. The Board and Committee
Charters can be accessed on the Company’s website at https://www.cabcharge.com.au/about-us/corporate-governance.
The Company Secretary is responsible for the coordination of all Board business. This includes the preparation of agendas
and minutes, co-ordinating the completion and circulation of Board and Committee papers, and communications with
regulatory bodies and the ASX.
All Directors have access to the Company Secretary and the Company Secretary is accountable to the Board, through the
Chairman, on all governance matters.
31
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
1.2 Composition of the Board
There have been a number of changes to the Board‘s composition over the past two years as the Board has undergone a
renewal process in line with its broader succession planning.
Changes during FY17 included the retirement of Russell Balding, AO, and the resignation of Stephen Stanley in November
2016, the appointment of Richard Millen as Chairman of the Board from November 2016 to February 2017, and the
appointment of Paul Oneile as Chairman of the Board in February 2017.
Having regard to the need to further expand the skills and experience represented amongst the Directors, Louise McCann
and Clifford Rosenberg were appointed to the Board in August 2017. The Board believes that its current composition
represents a depth of experience and skills that will allow the Board to continue operating effectively. The skills and
attributes of the Board are discussed further in section 1.3.
The Directors in office as at the date of this Corporate Governance Statement are as follows:
Director
Paul Oneile
Chairman
Louise McCann
Non-executive Director
Donnald McMichael
Non-executive Director
Richard Millen
Non-executive Director
Clifford Rosenberg
Non-executive Director
Andrew Skelton
CEO and Managing Director
Trudy Vonhoff
Non-executive Director
Independent
Date of appointment
√
√
√
√
√
-
√
27 February 2017
29 August 2017
25 June 1996
4 June 2014
29 August 2017
10 December 2014
21 August 2015
Term in office
1 year
-
21 years
3 years
-
3 years
2 years
Details of each Director’s experience, qualifications and Committee memberships are set out on pages 14 to 15 of the
Annual Report.
The number of Board and Committee meetings held during FY17 and the attendances of individual Directors and
Committee members at those meetings is set out on page 48 of the Annual Report.
1.3 Skills and attributes of Directors
The Board has developed a skills and attributes matrix that sets out the collective mix of skills and attributes that the
Board would like to achieve.
The RANC refers to the skills and attributes matrix when selecting new candidates and also when considering professional
development opportunities for current Directors.
The Board is satisfied that the current Directors collectively possess the necessary skills, expertise and industry
knowledge to meet the needs of the Company. The Board considers that:
• The collective skills of the Directors will continue to enable the Company to meet its strategic objectives, including
those related to the implementation of marketing initiatives and digital platforms in the Payments and Networks
operations; and
• There remains an opportunity to enhance the diversity (including gender) of the Board in future years.
32
Corporate Governance Statement C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
The following diagram sets out as a percentage, the average responses in relation to the skills, experience and attributes
of the Directors in office as at the date of this Corporate Governance Statement.
Board Skills Matrix
93
89
82
68
82
79
75
68
75
71
68
64
54
46
e
g
a
t
n
e
c
r
e
p
%
1 00
8 0
6 0
4 0
2 0
0
p
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h
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d
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t
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&
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n
i
t
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k
r
a
M
Diversity and Tenure
Gender
29%
Age
6 1 +
y e ar s
43%
4 1 - 5 0
y e a r s
14%
Tenure
0 - 3
y e a r s
86%
1 1 +
y e a r s
14%
71%
5 1 - 6 0
y e a r s
43%
33
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
1.4 Director independence and tenure
As at the date of this Corporate Governance Statement, the Board is comprised of a majority of independent Directors,
including an independent Chairman.
The Board has adopted the factors as set out in the ASX Principles relevant for assessing the independence of a Director.
In general, a Director may not be considered to be independent if they:
• Are, or have been, employed in an executive capacity by the Company or another Group entity and there has not
been a period of at least three years between ceasing such employment and serving on the Board;
• Are, or have been, within the last three years, a partner, Director or senior employee of a provider of material
professional services to the Company or another Group member;
• Are, or have been, within the last three years, in a material business relationship with the Company or other Group
member, or an officer of, or otherwise associated with someone with such a relationship;
• Are a substantial shareholder of the Company or officer of, or otherwise associated with, a substantial shareholder of
the Company;
• Have a material contractual relationship with the Company or another Group member, other than as a Director;
• Have close family ties with any person who falls within any of the categories described above;
• Have been a Director of the entity for such a period that his or her independence may have been compromised; and
• Have any other interest, position, association or relationship that might influence, or reasonably be perceived to
influence, in a material respect the Director’s capacity to bring an independent judgement to bear on issues before
the Board and to act in the best interests of the Company and its shareholders.
The Board considers that when assessing the independence of a Director, tenure alone should not of itself compromise
their independence. The Board recognises that Donnald McMichael is a longstanding Director of the Company but
considers that his tenure does not impact on his capacity to bring an independent judgement to bear on issues before the
Board. As noted in the 2016 Notice of Meeting in connection with Mr McMichael’s re-election as a Director, he will not be
serving a full term of three years on the Board. Having regard to the unique and highly specialised nature of the personal
transport industry and the relatively short tenure of all other current Directors, Mr McMichael’s priority is the transition of
his valuable commercial knowledge and experience within the personal transport industry to his colleagues on the Board.
1.5 Succession planning and Director appointments
The Board is responsible for succession planning. The RANC assists the Board with identifying potential Director
candidates, having regard to the necessary and desirable competencies identified in the skills and attributes matrix. The
overarching principle that applies in selecting Director candidates is that new Directors should possess a mix of skills,
expertise and experience necessary to ensure the continued effectiveness of the Board.
All shortlisted Director nominees are interviewed by the RANC and then by the other Directors. The final appointment
decision is made by the Board. Detailed background checks are carried out prior to all appointments.
New Directors are put forward to shareholders for election at the first Annual General Meeting following their appointment.
The Company will provide shareholders with the information in the Company’s possession about a Director candidate that
is relevant to that Director’s election or subsequent re-election.
1.6 Induction and training
Non-executive Directors are given a letter of appointment setting out the terms of their appointment, time commitment
envisaged and the Company’s expectations. Directors appointed since the introduction of the Company’s Minimum
Shareholding Requirement Policy are also informed of the requirement that Directors acquire a meaningful shareholding in
the Company (being a holding equivalent to 100% of their base fee within a three year period).
On appointment, Directors receive an induction package which includes access to the Company’s Constitution, the Board
and Committee Charters and other relevant governance documentation. All new Directors have the opportunity to meet
with members of the executive team and to be formally briefed on corporate strategy.
Directors are also encouraged to undertake programs of continuing education to ensure that they continue to remain
up to date on developments relating to law and governance practices, as well as with developments within the personal
transport industry generally.
1.7 Access to information, independent advice and indemnification
Upon appointment, each Director enters into a Deed of Access, Indemnity and Insurance with the Company to ensure
access to documents, and insurance arrangements during their appointment and within a period following their retirement
as a Director of the Company.
Procedures are also in place to ensure that each Director has the right to seek independent professional advice at the
Company’s expense on matters pertaining to their role as a Director.
34
Corporate Governance Statement C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
2. Board Committees
2.1 Audit and Risk Committee
Audit and Risk Committee
Roles and Responsibility
The Audit and Risk Committee (ARC) operates under a Charter. Its key responsibilities and functions are to oversee
the Company’s:
• Financial reporting process;
• Relationship with the external auditor and the external audit function generally;
• Relationship with the internal auditor and the internal audit function generally;
• Processes for monitoring compliance with laws and regulations and the Code of Conduct and Ethics; and
• Processes for identifying and managing risk.
Membership
The ARC must consist of:
• At least three members;
• Only Non-executive Directors;
• A majority of independent Directors; and
• An independent Director as Chairman, who is not the Chairman of the Board.
The ARC was comprised of the following members in FY17, all of whom were independent Non-executive Directors:
• Richard Millen (Chairman);
• Donnald McMichael (from 24 November 2016);
• Trudy Vonhoff; and
• Russell Balding (until 24 November 2016).
Between 24 November 2016 and 27 February 2017, Ms Vonhoff assumed the role of Chairman of the ARC and
Mr Millen became an ordinary member of the Committee. Mr Millen resumed the role of Chairman of the ARC after
stepping down from his role as Chairman of the Board on 27 February 2017.
Selection and appointment of the external auditor
The ARC annually reviews the performance of the external auditor and recommends to the Board the approval of the terms
of the external audit engagement. The ARC also considers the independence of the external auditor and oversees the
external audit partner rotation.
KPMG is the current external auditor of the Group and was appointed in 2007. The most recent external audit partner
rotation took place in the financial year ended 30 June 2014.
35
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
2.2 Remuneration and Nominations Committee
Remuneration and Nomination Committee
Roles and Responsibility
The RANC operates under a Charter. Its key responsibilities and functions are to review and make recommendations
to the Board in relation to:
• The size and composition of the Board, including reviewing Board succession plans and the succession of the
Chairman and CEO;
• The criteria for nomination as a Director and the membership of the Board more generally;
• The remuneration arrangements for the Chairman and other Non-executive Directors of the Board;
• The arrangements for the CEO including contract terms, annual remuneration and participation in the
Company’s short and long term incentive plans; and
• In consultation with the CEO, the policies and procedures related to remuneration, recruitment, retention,
termination and performance assessments of employees.
Membership
The RANC must consist of:
• At least three members;
• Only Non-executive Directors;
• A majority of independent Directors; and
• An independent Director as Chairman.
The RANC was comprised of the following members in FY17, all of whom were independent Non-executive Directors:
• Trudy Vonhoff (Chairman since 23 November 2016);
• Stephen Stanley (Chairman until 23 November 2016);
• Donnald McMichael; and
• Russell Balding (until 24 November 2016).
Ms Vonhoff was appointed as an independent Chairman of the RANC, taking over from Mr Stanley, who resigned in
November 2016.
Remuneration of Key Management Personnel
The RANC is responsibile for overseeing and making recommendations to the Board in relation to remuneration of the
CEO and the Directors. The CEO, in consultation with the RANC makes recommendations to the Board in relation to the
remuneration and performance of the CEO’s direct reports. The Company’s remuneration policies appropriately reflect
the different roles and responsibilities of Non-executive Directors compared with Executive Directors and other senior
executives.
The remuneration entitlements of each senior executive (including superannuation entitlements) are contained in written
employment agreements between the executive and the Company. Each executive’s employment agreement sets out a
description of their position and responsibilities.
The Company’s policies and practices in relation to the remuneration of key management personnel are set out in the
Remuneration Report, at pages 50 to 69 of the Annual Report.
36
Corporate Governance Statement C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
3. Performance Evaluation
The process for the performance evaluation of the Board, its Committees, individual Directors and senior executives is
guided by the Company’s Performance Evaluation Policy, a summary of which is set out in the diagram below.
All suggestions for improvement and change arising out of the annual performance evaluation process are received by the
Board, through the RANC or CEO (where appropriate). The Board or RANC may also engage an external consultant to
facilitate the annual performance evaluation process.
In accordance with the Performance Evaluation Policy, the Company undertook performance evaluations of the Board, its
Committees, individual Directors and senior executives for the financial year ended 30 June 2017.
A copy of the Performance Evaluation Policy is available on the Cabcharge website at
https://www.cabcharge.com.au/about-us/corporate-governance.
The Board
Committees
The Board as a whole
discusses and analyses its
own performance during the
year, including suggestions
for change or improvement.
This process is facilitated
by the Remuneration and
Nominations Committee.
Directors
The Chairman conducts
interviews with each
Non-executive Director
separately to discuss
individual performance and
ideas for improvement.
The Chairman of each
Committee discusses
the performance of the
Committee with its members.
Directors complete a
questionnaire relating to
the role, composition,
procedures and practices
of the Board and the
Committees.
Chief
Executive Officer
The Remuneration and
Nominations Committee
assesses the CEO’s
performance against
targets (which are set by
reference to the strategic
objectives of Cabcharge for
that year).
Chairman
of the Board
Non-executive Directors
evaluate the performance
of the Chairman, led by the
Chairman of the Audit and
Risk Committee.
Senior Executives
The CEO assesses the
performance of each
senior executive, in light
of the operational and
financial responsibilities
of the executive and
his or her contribution
to management and
leadership at Cabcharge.
The CEO’s evaluation is
reviewed in consultation
with the Remuneration and
Nominations Committee.
37
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
4. Policies and Risk Framework
All of the Company’s policies referred to in this section are available on the Cabcharge website at
https://www.cabcharge.com.au/about-us/corporate-governance.
4.1 Diversity
Policy and programs
Cabcharge values diversity and inclusiveness in the workforce and recognises that diversity drives its ability to attract,
retain, motivate and develop the best talent and deliver the highest quality services to its customers. The greatest assets
of the Company are its people, and the Company is committed to creating an environment where all employees have an
opportunity to realise their potential and contribute to the success of the Company.
The Company amended its Diversity Policy during FY17 to modernise it and align it with the Company’s current diversity
objectives. The Company is developing its diversity objectives to extend beyond gender, to also include cultural
background, religion, sexual orientation, age, disability and ethnicity. The Company actively ensures that the Diversity
Policy is followed by adopting initiatives, programs and policies such as the following:
Encouraging management to
include at least one female
candidate on all shortlists when
looking for appointees (and
requiring management to report
to the Board on outcomes)
Providing an Employee
Assistance Program that assists
employees with personal or work
related counselling and advice
Providing corporate and
social responsiblility, including
sponsoring a guide dog and
supporting National Harmony
Day
Providing appropriate facilities
for our new parents to assist
with the transition back to the
workforce
Improving cultural awareness
through training and employee
engagement, such as celebrating
various multicultural and faith
events
Encouraging open discussions
about diversity to promote
awareness and openness at all
levels of the Cabcharge business
In accordance with the Workplace Gender Equality Act, the Company has lodged its annual compliance report with the
Workplace Gender Equality Agency. The report contains the Company’s ‘Gender Equality Indicators’. A copy of the report
is available on the Cabcharge website at https://www.cabcharge.com.au/about-us/who-we-are.
38
Corporate Governance Statement C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Measurable objectives
The Board has set measurable objectives for achieving gender diversity. These objectives and the Company’s progress
towards achieving them for FY17 are set out below.
Objective
Target
Outcome
Diversity awarness
Cabcharge aims to create an
environment in which individual
differences are valued and all staff
have the opportunity to realise
their potential and contribute to the
success of Cabcharge. Diversity
objectives are communicated to
business units and a diversity forum
comprising management and team
representatives has been set up.
Recruitment
Staff members are provided with
the Diversity Policy on induction
and through further training to
line managers on diversity and
conscious versus unconscious bias.
The Diversity Policy is made
available to all employees through
the Cabcharge website. Employees
are also invited to provide feedback
and comments on workplace
gender equality.
Efforts are made to identify
prospective appointees who are
female.
Recruiter briefings to include
diversity requirements.
Efforts are made for any shortlist
of prospective appointees to
include at least one female
candidate.
Any shortlist of prospective
appointees should include at least
one female candidate.
Retention
Recruiters have been briefed
regarding Cabcharge’s diversity
objective and in some cases were
required to provide only female
candidates.
Shortlists include at least one
female candidate in most cases.
Some roles did not attract female
applicants.
Pay parity has been assessed to
ensure females are not paid less
than males for equivalent roles.
Pay parity exercise performed to
assess the extent of pay parity
discrepancies.
A pay parity exercise has been
undertaken and no roles identified
where pay parity is of concern.
Workflow flexibility
Cabcharge has flexible work
arrangements in place –
compressed working weeks, flexible
work, time in lieu, telecommuting,
carer’s leave, unpaid leave and part
time work.
100% of employees offered
workplace flexibility programs
to the extent possible for the
particular role and the arrangement
suits the business’ needs.
All employees may request
workplace flexibility. Each request is
considered on a case by case basis
taking into account the reasons
for the request, the individual’s
requirements, business needs,
demands and flexibility.
39
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
4.2 Securities dealing
In June 2017, the Company adopted a new Securities Dealing Policy which is intended to uphold shareholder, investment
community and public confidence in the integrity of the market for Cabcharge shares. The policy prohibits Directors,
senior executives and other staff members from trading in securities or directing the trade of shares on the basis of inside
information or communicating inside information to other people.
The policy allows trading by Directors, senior executives, and nominated employees in specified “trading windows”,
subject to complying with insider trading prohibitions and on the condition that prior notification of the intention to trade is
provided. The trading windows are:
• The one month period commencing at 10.00am on the next trading day after the announcement to ASX of
Cabcharge’s half-yearly results;
• The one month period commencing at 10.00am on the next trading day after the announcement to ASX of the
preliminary final statement or full year results; and
• Any other period the Board determines, from time to time.
The Board may determine at any time that a trading window is closed. Permission to trade outside of these windows may
only be given in exceptional circumstances.
In addition, the terms of the Company’s equity incentive schemes prohibit participants from entering into transactions that
limit the economic risk of equity-based remuneration (ie hedging and other arrangements).
4.3 Market Disclosure and Investor Engagement
The Company has in place processes to ensure that the market is kept informed of material information by ensuring that
all employees across the Group are aware of their continuous disclosure obligations.
In June 2017, the Company adopted a new Market Disclosure and Investor Engagement Policy, which is designed to
identify matters requiring disclosure and to allow appropriate announcements to be made in a timely manner consistent
with the ASX Listing Rules. In particular, the policy:
• Provides guidance on the type of information that must be disclosed and the procedures for internal notification and
external disclosure;
• Includes details on the procedures in place for promoting the understanding of continuous disclosure requirements,
minimising risks associated with selective disclosure and monitoring compliance against the Company’s disclosure
obligations; and
• Establishes procedures to ensure that all material matters which may potentially require disclosure are promptly
reported to the CEO through established reporting lines, including an immediate point of contact for all employees
through their immediate managers.
The Company keeps its employees informed of any changes to the continuous disclosure regime established by the ASX
Listing Rules or the Corporations Act.
4.4 Competition and Consumer Act Compliance
The Group is committed to complying with the provisions of the Competition and Consumer Act (CCA) and this is
demonstrated by the Company’s implementation of a comprehensive compliance program which includes:
• Appointment of a compliance officer;
• Employment of experienced and qualified personnel to oversee competition and consumer laws;
• Mandatory CCA training provided to employees to ensure they know their obligations under the CAA;
• A requirement that employees refresh their CCA training at least every two years and each person’s training is
recorded;
• A direction to all employees to report any compliance related issues and compliance concerns relating to the CCA to
the compliance officer; and
• A guarantee that employee(s) making a complaint or report in relation to the Group’s compliance with the CCA will
not be victimised or disadvantaged in any way by reason of their complaint or report and confirmation that their
complaint or report will be kept confidential and secure.
40
Corporate Governance Statement C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
4.5 Ethics and conduct
All employees are bound by the Company’s Code of Ethics and Conduct, which sets out the expected standards of ethics
and conduct employees are required to follow, in addition to their legal obligations, for the protection of shareholders and
the broader community in which Cabcharge operates.
The code addresses various issues, including conflicts of interest, corporate opportunities, confidentiality, fair dealing with
the Company’s customers, suppliers, competitors and employees, protection and proper use of the Company’s assets,
compliance with laws and regulations, encouraging the reporting of unlawful or unethical behaviour and actively promoting
ethical behaviour and protecting those who report violations in good faith. A breach of the code is considered to be
serious and may result in termination of employment.
Directors are similarly required to act with personal integrity and in accordance with acceptable business practices, as set
out in the Board Charter and each Non-executive Director’s appointment letter.
4.6 Environmental, Social and Governance
The Company recognises the interdependence of financial returns, social benefits and environmental impacts and aims
to create sustainable value for all its stakeholders – customers, the personal transport industry, employees, shareholders,
business partners and the communities which the Company serves.
Environment
Cabcharge seeks to minimise or eliminate environmental harm in its business operations. Although Cabcharge is not a
substantial carbon emitter it seeks to reduce usage and increase efficiencies in relation to waste, water and energy to
reduce the Company’s carbon footprint. Cabcharge follows the principles to reduce, re-use and recycle and actively seeks
to improve systems and processes to minimise the operational impact of the Company on the environment. In addition,
environmental considerations are now an integral part of new product development.
Community
Cabcharge seeks to become involved in the communities in which it operates and to promote socially responsible
practices. Cabcharge believes it is important to pay a role in contributing to the community, both directly, and through
involvement in and support of personal transport industry initiatives.
The Company has a strong interest in developing successful community relationships and establishing opportunities for
partnerships. Cabcharge recognises the importance of providing its customers and the community more generally with
services that are safe, accessible and efficient. For example, the Company sponsors a guide dog, Spotto, consistent with
its overarching commitment to providing safe transport to the vision impaired community.
Staff
As set out above, Cabcharge has a strong commitment to diversity at all levels within the Group. The Company
encourages innovation, ensures a broad talent pool and responds to the diverse needs of Cabcharge’s customers and
other stakeholders. The Company has implemented a number of occupational health & safety programs across the
business, with a view to ensuring the safety of employees.
4.7 Shareholder engagement
The Company is committed to facilitating two-way communications with shareholders, to ensure that shareholders have an
understanding of the Group’s business, governance and performance, and can provide the Company with their own views
on such matters.
41
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Company Policy
Policy in Practice
The Board’s commitment to shareholder engagement
is reflected in the Company’s Shareholder
Communications Policy.
• The Company’s website contains all market
announcements, Annual Reports, important
dates, and copies of policies and Charters.
The purpose of the policy is to:
• Give shareholders information about the
Company to enable them to exercise their rights
as shareholders in an informed manner;
• Make relevant information available to people so
that the market for shares in the Company can
function in an informed manner; and
• Develop a strong culture of disclosure and
to make relevant information available to
shareholders, potential shareholders and other
stakeholders in a timely and accurate manner.
• The Company conducts periodic reviews of its
website with an aim to improve the effectiveness
of its electronic communications with
shareholders and stakeholders generally.
• The Board encourages shareholders to receive
and send electronic communications via its share
registrar, Link Market Services.
• All shareholders have the right to attend the
Company’s Annual General Meeting.
• Shareholders are provided with a Notice of
Meeting and an explanatory statement of the
resolutions proposed. A copy of the Notice of
Meeting is lodged with the ASX and is included
in the market announcements feed on the
Company’s website.
• The Company ensures that its external auditor
attends its Annual General Meeting, and allows
shareholders to submit questions directly to the
auditor prior to or at the Annual General Meeting.
4.8 Risk identification and management
The Board, in consultation with the ARC, is responsible for reviewing, ratifying and monitoring the Company’s systems of
risk management. The Committee advises the Board on high-level risk related matters, and oversees processes to ensure
that:
• There is an adequate system of internal control and management of business risk; and
• A regular review is undertaken of internal control systems and the operational effectiveness of the policies and
procedures related to risk and control.
The CEO and senior management are responsible for developing and promoting the appropriate management of risk and
the ongoing maintenance of the control environment. Management are required to report to the ARC on the Company’s
risk management and internal control systems.
Annual risk management review and declaration
The ARC reviews the soundness of the elements for Cabcharge’s risk management framework at least annually.
During FY16 the Company engaged independent consultants to consider the Company’s risk management practices. On
completion of that project a number of significant changes were made to the Company’s risk management framework,
including the establishment of a Risk Working Group in October 2016 to monitor and report on risks impacting the Group.
As it has not yet been 12 months since the new risk management framework was established, the first annual review is
scheduled in October 2017 with a report being provided to the ARC in December 2017.
42
Corporate Governance Statement C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Consistent with the ASX Principles, before the Board approves the Group’s financial statements, it receives from its CEO
and CFO a declaration that:
• In their opinion and as required by the Corporations Act, the financial records of the Group have been properly
maintained and the financial statements comply with the appropriate accounting standards and give a true and fair
view of the financial position and performance of the entity; and
• That opinion has been formed on the basis of a sound system of risk management and internal control which is
operating effectively.
These declarations were received by the Board prior to the approval of the Group’s half year and full year financial
statements in FY17.
Internal audit process
The ARC has appointed PwC to carry out the Group’s internal audit function. The internal auditor is independent of
the external auditor, KPMG. Representatives from the internal auditor meet with the ARC and key senior executives to
understand the business and the existing risk management framework and execute a process to identify and understand
the current risks facing the business in light of the strategic direction of the Company.
The ARC reviews and recommends to the Board the approval of the annual internal audit plan each financial year. The
ARC and management meet with PwC regularly to consider and if necessary refine the internal audit plan.
Economic, environmental and social sustainability risks
Cabcharge monitors and seeks to manage economic, environmental and social sustainability risks within the Company’s
broader risk management and internal control framework. This includes ensuring that information is effectively
communicated between the Board, the ARC, the internal audit function and the executive team.
As set out of page 28 of the Annual Report, Cabcharge continues to monitor changes to regulation, the competitive
landscape and technology environment within and outside its business. Developments relating to these or other risks that
may impact Cabcharge are escalated within the business and to the executive team, the ARC and the Board as relevant.
The Company uses a number of methods to minimise and manage such risks, including by diversifying its operations
and business activities, adopting contingency plans and risk control frameworks and, where necessary, adapting the
Company’s strategy to reduce its risk exposure.
43
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Directors’ Report
44
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Directors
The Directors of the Company at any time during or since the end of the financial year are:
•
•
Paul Oneile (Chairman) (appointed 27 February 2017)
Andrew Skelton (Chief Executive Officer and Managing Director)
• Donnald McMichael
• Richard Millen
•
Trudy Vonhoff
• Russell Balding AO (retired 24 November 2016)
•
Stephen Stanley (resigned 23 November 2016)
Details of the current Directors’ qualifications, experience and special responsibilities are set out below.
Paul Oneile
Independent Chairman
Paul was appointed as Chairman in February 2017. He was formerly the independent Chairman of Intecq Limited from
September 2012 to December 2016.
Paul has over 30 years of executive experience across many industries including leisure and entertainment, retail,
manufacturing, property, software and technology. His other executive roles include CEO and Managing Director of
Aristocrat Leisure Limited (2003 – 2008), Chairman and CEO of United International Pictures (1996 – 2003), Non-executive
Director of Village Roadshow Limited (1990 – 1996), and Managing Director of The Greater Union Organisation Pty Ltd
(1990 – 1996).
Paul has a Bachelor of Economics degree from the University of Sydney.
Andrew Skelton
Chief Executive Officer and Managing Director
Andrew Skelton was appointed CEO in June 2014 and Managing Director in December 2014. Andrew was the Group
Corporate Counsel and Company Secretary from December 2011 until his appointment as CEO.
Andrew has over 15 years of experience in the personal transport industry. He has held senior management and executive
roles in Taxi Network payments and operations, including as Chief Operating Officer of Black Cabs Combined Pty Ltd
from 2005 to 2011. Prior to this Andrew was a practising solicitor at K&L Gates in Melbourne specialising in mergers and
acquisitions.
Andrew holds an MBA, Bachelor of Laws, Bachelor of Commerce and a Graduate Diploma of Applied Corporate
Governance.
Donnald McMichael
Independent Non-executive Director
Donn was appointed as a Director in June 1996. He is a member of the Audit and Risk Committee and a member of the
Remuneration and Nominations Committee.
Donn has deep operational experience in the personal transport industry. He has served on the Board for over 20 years.
Prior to this he was Chairman of Aerial Capital Investments Pty Ltd (1987 – 1998) (formerly Aerial Taxi Co-Op Society
Limited), a Director of Taxis Australia Pty Ltd (1992 – 2000), a Director of Canberra Taxi Industry Association Ltd (1989 –
1998) and a Director of Yellow Cabs (Canberra) Pty Ltd (1998 – 2002).
Donn has served on a number of not-for-profit Boards and is currently the CEO of Noah’s Ark Resources Inc.
45
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Richard Millen
Independent Non-executive Director
Rick was appointed as a Director in June 2014. He is the Chairman of the Audit and Risk Committee and a member of the
Remuneration and Nominations Committee. He also served as interim Chairman from November 2016 to February 2017.
Rick has extensive experience in corporate transactions, corporate finance and accounting. Having spent over 30 years
with PwC, his senior executive roles at the firm included leading its first Corporate Finance practice and subsequently the
firms’ broader Advisory practice.
Rick has a strong background in corporate responsibility. He led PwC’s internal Corporate Responsibility agenda both in
Australia (2005 – 2011), and globally (2007 – 2010). He is currently a Director of Australia for UNHCR.
Rick holds a MA Hons Jurisprudence (Law) from Oxford University, is a graduate of the Australian Institute of Company
Directors and is a member of the Institute of Chartered Accountants in Australia and New Zealand.
Trudy Vonhoff
Independent Non-executive Director
Trudy was appointed as a Director in August 2015. She is the Chairman of the Remuneration and Nominations Committee
and a member of the Audit and Risk Committee. Trudy is currently a Director of Ruralco Holdings Limited, AMP Bank
Limited and Tennis NSW Limited.
Trudy has a strong finance and risk management background in the financial services industry. She has held senior
executive positions with Westpac and AMP, including leading Westpac’s Commercial Banking and Agribusiness unit.
Trudy holds a Bachelor of Business from the Queensland University of Technology, a Master of Business Administration
from the University of Technology Sydney and is a graduate of the Australian Institute of Company Directors.
Directorships of other listed companies
The current Directors’ directorships of other listed companies held at any time in the last three years immediately before
the end of the financial year are set out in the table below.
Directors
Paul Oneile
Andrew Skelton
Donn McMichael
Rick Millen
Trudy Vonhoff
Name of Listed Company
Appointment date
Cessation date
Intecq Limited
21 September 2012
16 December 2016
Nil
Nil
Nil
-
-
-
Ruralco Holdings Limited
1 September 2014
-
-
-
-
Company Secretary
Adrian Lucchese
General Counsel and Company Secretary
Adrian Lucchese commenced at Cabcharge in October 2014. Adrian began his career with Blake Dawson Waldron
(now Ashurst) in 1988 and has held a number of senior management roles including Group General Counsel and
Company Secretary of George Weston Foods Limited where, amongst other things, he was responsible for many of
the improvements to its competition compliance program. From August 2011 to October 2014, Adrian was Company
Secretary of AMP Capital Holdings Limited where he contributed to many governance, structural and business
improvement initiatives.
Adrian holds Bachelor degrees in both Science and Laws from the University of Sydney and a Master of Laws from the
University of Sydney.
46
Directors’ ReportFor the year ended 30 June 2017 C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Dividend
Dividends paid or declared for payment since the end of the previous financial year are set out in the table below.
Type
Final FY16
Interim FY17
Special
Final FY17
Cents per share
Total paid or Declared ($000)
Payment date
10.0
10.0
80.0
10.0
$12,043
$12,043
$96,345
$12,043
31 October 2016
28 April 2017
28 April 2017
31 October 2017
The final dividend has a record date of 29 September 2017.
Principal activities
The principal activities of the Group are included in the Operating and Financial Review (OFR) set out on pages 18 to 28.
Other than those mentioned in the OFR, there were no other significant changes to the nature of the activities of the Group
during the year.
Review of operations
A review of the Group’s operations during the year and the results of those operations, together with its financial position,
are included in the OFR set out on pages 18 to 28. The Group’s business strategies and prospects for future financial
years are also included in the OFR.
Significant changes in state of affairs
In the opinion of the Directors, there were no significant changes in the state of affairs of the Group during the financial
year, other than those changes mentioned in the OFR.
Events subsequent to reporting date
Since the reporting date:
• The Directors declared a final dividend of 10 cents per share (fully franked) payable on 31 October 2017. The record
date to determine entitlement to the dividend is 29 September 2017
• The acquisition of Yellow Cabs Queensland was completed on 31 July 2017. The consideration for the acquisition
was $19.5 million. As the change in control occurred subsequent to 30 June 2017, there has been no contribution
from Yellow Cabs Queensland to the Group’s FY17 results
• The Company completed the sale of its 49% interest in CityFleet Networks Ltd on 31 July 2017. The Company
received £7.9 million ($12.9 million) from the sale.
No other matter or circumstance has arisen since the reporting date that significantly affects or may significantly affect the
Group’s operations in future years, the results of those operations in future years, or the Group’s state of affairs in future
years.
Likely developments
Information about likely developments in the Group’s operations is included in the “Outlook” section of the OFR on page 27.
Environmental regulation
The Group’s operations are not subject to any particular and significant environmental regulations under a law of the
Commonwealth or of a State or Territory.
47
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Directors’ interests and benefits
The relevant interests and benefits of each Director at the date of this report are set out in the table below.
Directors
Paul Oneile
Andrew Skelton
Donn McMichael
Richard Millen
Trudy Vonhoff
Mr Skelton has been granted performance rights under the Company’s Long Term Incentive (LTI) plan
FY15 grant (for period ending 30 June 2018)
FY16 grant (for period ending 30 June 2019)
FY17 grant (for period ending 30 June 2020)
Total performance rights
Remuneration Report
Interest in shares
10,000
6,861
36,030
35,000
22,000
43,036
78,624
124,611
246,271
The Remuneration Report which is set out on pages 50 to 69 and forms part of this Directors’ Report, has been audited as
required by Section 308(3C) of the Corporation Act.
Directors’ Meetings
The number of Directors’ meetings and attendance by each Director at those meetings during the financial year are set out in
the table below.
Directors1
Paul Oneile4
Andrew Skelton
Donn McMichael
Rick Millen
Trudy Vonhoff
Russell Balding AO5
Stephen Stanley6
Board
Audit & Risk2
Remuneration &
Nominations2
Held3
Attended
Held3
Attended
Held3
Attended
5
17
17
17
17
7
6
5
17
17
16
17
7
5
-
-
3
6
6
3
-
-
-
3
6
6
3
-
-
-
6
2
2
4
4
-
-
6
2
2
4
4
1. “Directors” in the table means Directors who were a Director at any time during the financial year.
2. All Directors are invited to and generally attend Board Committee meetings. The Attendance columns in the table reflect attendance by
Committee members.
3. The Held columns reflect the number of meetings held during the period in which the Director held office.
4. Appointed as a Director on 27 February 2017.
5. Ceased being a Director on 24 November 2016.
6. Ceased being a Director on 23 November 2016.
48
Directors’ ReportFor the year ended 30 June 2017
Directors’ interests and benefits
Share options and performance rights
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
The relevant interests and benefits of each Director at the date of this report are set out in the table below.
Mr Skelton has been granted performance rights under the Company’s Long Term Incentive (LTI) plan
Interest in shares
10,000
6,861
36,030
35,000
22,000
43,036
78,624
124,611
246,271
Directors
Paul Oneile
Andrew Skelton
Donn McMichael
Richard Millen
Trudy Vonhoff
FY15 grant (for period ending 30 June 2018)
FY16 grant (for period ending 30 June 2019)
FY17 grant (for period ending 30 June 2020)
Total performance rights
Remuneration Report
Directors’ Meetings
the table below.
Directors1
Paul Oneile4
Andrew Skelton
Donn McMichael
Rick Millen
Trudy Vonhoff
Russell Balding AO5
Stephen Stanley6
Committee members.
The Remuneration Report which is set out on pages 50 to 69 and forms part of this Directors’ Report, has been audited as
required by Section 308(3C) of the Corporation Act.
The number of Directors’ meetings and attendance by each Director at those meetings during the financial year are set out in
Board
Audit & Risk2
Remuneration &
Nominations2
Held3
Attended
Held3
Attended
Held3
Attended
5
17
17
17
17
7
6
5
17
17
16
17
7
5
-
-
3
6
6
3
-
-
-
3
6
6
3
-
-
-
6
2
2
4
4
-
-
6
2
2
4
4
1. “Directors” in the table means Directors who were a Director at any time during the financial year.
2. All Directors are invited to and generally attend Board Committee meetings. The Attendance columns in the table reflect attendance by
3. The Held columns reflect the number of meetings held during the period in which the Director held office.
4. Appointed as a Director on 27 February 2017.
5. Ceased being a Director on 24 November 2016.
6. Ceased being a Director on 23 November 2016.
There were no options over unissued shares of the Company granted to the Directors or any executives during or since
the end of the financial year.
As at the date of this report there are 689,766 performance rights over unissued shares which have been granted to the
CEO and other senior executives under the Company’s LTI plan. Further information on the LTI plan is included in the
Remuneration Report on pages 50 to 69.
Indemnification and insurance of officers and auditors
The Company’s Constitution requires it to indemnify current and former Directors (including alternate directors), officers,
and auditors (if determined by the Directors) of the Company against liabilities incurred by the person as an officer (or
auditor if determined by the Directors).
The Company has agreed to provide indemnities to and procure insurance for past and present Directors and officers of
the Company and its controlled entities. The indemnities provide broad indemnification against liabilities to another person
(other than the Company or a related body corporate) and for legal costs that may arise from their position as Directors
and officers of the Company and its controlled entities. The indemnities are subject to certain exceptions such as where
the liability arises out of conduct involving a lack of good faith.
The Company has also paid insurance premiums for insurance policies providing the type of cover commonly provided
to Directors, officers and senior employees of listed companies such as the Company. As is commonly the case, the
insurance policies prohibit further disclosure of the nature of the insurance cover and the amount of the premiums.
There has been no indemnification of the current auditors, nor have any insurance premiums been paid in respect of the
current auditors since the end of the previous year.
Non-audit services by auditors
Details of the non-audit services provided by the Group’s auditor, KPMG during the financial year including fees paid or
payable for each service, are set out in note 27 to the Consolidated Financial Statements.
The Board has considered the non-audit services provided during the year by KPMG and in accordance with written
advice provided by resolution of the Audit and Risk Committee, is satisfied that the provision of those non-audit services
during the year by the auditor is compatible with, and did not compromise, the auditor independence requirements of the
Corporations Act for the following reasons:
• All non-audit services were subject to the corporate governance procedures adopted by the Company and have
been reviewed by the Audit and Risk Committee to ensure they do not impact the integrity and objectivity of the
auditor; and
• The non-audit services provided do not undermine the general principles relating to auditor independence as set out
in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s
own work, acting in a management or decision making capacity for the Company, acting as an advocate for the
Company or jointly sharing risks and rewards.
Lead auditor’s independence declaration
The lead auditor’s independence declaration required under section 307C of the Corporations Act is set out on page 70.
Rounding off
Cabcharge is a company of the kind referred to in ASIC Corporation 2016/191 (Rounding in Financial/Directors’ Reports)
Instrument. In accordance with that Instrument, amounts in the Consolidated Financial Statements and the Directors’
Report have been rounded off to the nearest thousand dollars, unless otherwise stated.
This Directors’ Report has been signed in accordance with a resolution of the Directors.
Paul Oneile
Chairman
28 August 2017
Andrew Skelton
Managing Director
28 August 2017
49
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Remuneration Report
50
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Directors’ Report - Remuneration Report
(Unaudited)
Letter from the Chairman of the Remuneration and Nominations Committee
Dear Shareholders
On behalf of the Board, I am pleased to present our Remuneration Report for the year ended 30 June 2017 (FY17).
The Remuneration Report is intended to demonstrate how our remuneration framework, policies and practices are designed
to align executive interests with long-term shareholder value, and to link remuneration outcomes with individual and corporate
performance against a range of financial and strategic achievements.
Developing a robust remuneration framework that is responsive to change and aligned with the Company’s strategy is a
continuous process and is particularly important in times of fierce competition and regulatory change.
The Company undertook a number of important transactions in FY17. The transactions included the divestment of the
Company’s 49% stake in the CDC Bus Joint Venture (completed on 15 February 2017), the divestment of the Company’s
49% stake in CityFleet Networks Ltd and the acquisition of Yellow Cabs Queensland (both transactions settled on 31 July
2017). The successful completion of these transactions has been pivotal in positioning the Company to better compete
and grow in the Personal Transport market and enabled a heightened focus on investing in core Payment and Taxi Network
services.
Accordingly, throughout FY17, the role of the Remuneration and Nominations Committee (Committee) has been to critically
evaluate the governance and remuneration structures and processes in place at Cabcharge so that they continue to align with,
support and encourage the Company’s strategy whilst appropriately focusing and rewarding management to achieve set goals.
Activities undertaken during the year included:
Governance
• Completed the search for and appointment of a new Non-executive Chairman, Paul Oneile who commenced on 27
February 2017;
• Commenced the search for two new Non-executive Directors to strengthen the Board skills in technology and
marketing; and
• Updated the Board skills and attributes matrix for inclusion in the Annual Report.
Reward framework
• Undertook a review of the remuneration of the executive key management personnel (KMP) which resulted in an
overall increase largley attributed to “at risk” remuneration;
• Introduced the deferral of short-term incentives for the CEO, with 25% of his cash-based short term incentive now
being deferred and paid in cash in two equal instalments over the next two years;
• Re-weighted the short-term incentive performance measures, with 60% now being set to financial objectives and
40% being set to strategic objectives;
• As approved by shareholders at 2016 annual general meeting:
•
•
Equalised the weighting between the two long-term incentive performance measures total shareholder return
and return on equity (ROE); and
Adjusted the ROE performance measure having regard to the asset sales and acquisitions that management
were instructed to undertake in FY17 and the impact of those strategic projects on the Company.
Setting targets
• Set the CEO’s personal targets for FY17; and
• Worked in consultation with the CEO to set the personal targets of the other executive KMP for FY17.
Reviewing Outcomes
• Reviewed and agreed the FY17 STI outcomes for executive KMP.
The Committee considers that good progress has been made during FY17 and is committed to the continual improvement to
the Company’s remuneration framework.
Yours faithfully
Trudy Vonhoff
Chairman of the Remuneration and Nominations Committee
51
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
(Audited)
Cabcharge Remuneration Report for the financial year ended 30 June 2017
Contents
1. Overview
Who is covered by this report
Realised remuneration
Future remuneration strategy
2. Remuneration governance
3. Executive remuneration arrangements
Remuneration principles and link to Company strategy
Remuneration structure
Detail of remuneration elements and incentive plans
Executive contracts
4. Executive remuneration outcomes for FY17
STI performance and outcomes
LTI performance and outcomes
Total executive remuneration in FY17
LTI awards held by executives
5. Non-executive Director fee arrangements
Board and Commitee Fees
Fees in FY17
Statutory disclosure in respect of NED remuneration
6. Additional disclosures relating to share capital
Shares
Rights
7. Transactions with key management personnel and their related parties
Loans to KMP and their related parties
8. Shareholder voting for Remuneration Report at the 2016 annual general meeting
This Remuneration Report for the year ended 30 June 2017 outlines the remuneration arrangements of Cabcharge
Australia Limited (Cabcharge or the Company) in accordance with the requirements of the Corporations Act 2001
(Corporations Act) and its Regulations. Accordingly, the information in sections 1 to 7 has been audited as required by
section 308(3C) of the Act.
52
Remuneration Report C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
1. Overview
Who is covered by this report
This report covers all current key management personnel (KMP) of Cabcharge. The KMP have authority and responsibility
for planning, directing and controlling the activities of the Company, either directly or indirectly, and include the executive
KMP set out in the table below, and each Non-executive Director (NED) in table 8.
Table 1: Executive KMP included in this report
Senior executives
Role
Change in FY17
Mr Andrew Skelton
Managing Director and Chief Executive Officer
Ms Sheila Lines
Chief Financial Officer
Mr Adrian Lucchese
General Counsel and Company Secretary
–
–
–
Mr Deon Ludick
Chief Technology Officer
Commenced 18 July 2016
Mr Fred Lukabyo
Chief Operating Officer
Mr Stuart Overell
Chief Operating Officer – Taxi Networks
–
–
Realised remuneration
The details of statutory executive remuneration prepared in accordance with the accounting standards can be found on
page 64.
The table below has been prepared to provide shareholders with an understanding of remuneration earned by senior
executives in FY17. The amounts disclosed in the table below are intended to provide an explanation of the pay for
performance relationship in our remuneration structure and are in addition to the information provided by the statutory
executive remuneration table prepared in accordance with the accounting standards.
Table 2: Remuneration earned in FY17 (Non-statutory) (Unaudited)
Executive
Mr Andrew Skelton
Ms Sheila Lines
Mr Adrian Lucchese
Mr Deon Ludick
Mr Fred Lukabyo
Mr Stuart Overell
Fixed
remuneration1
$
FY16 STI
deferred2
$
STI earned
in FY173
$
LTI vested in
FY174
$
700,000
480,000
390,000
383,250
440,000
415,000
30,000
342,280
–
–
–
–
170,140
136,335
90,820
91,720
5,000
127,980
–
–
–
–
–
–
Total
$
1,072,280
650,140
526,335
474,070
531,720
547,980
1 Fixed remuneration means contracted remuneration amount for base salary and superannuation.
2 Deferred FY16 STI determined and awarded during FY17.
3 STI earned in respect of FY17. For the CEO 75% will be paid in August 2017 and 25% will be deferred and paid in cash in two equal
instalments over the next 24 months after payment of the fi rst 75%. For other members of executive KMP, the STI will be paid in August 2017.
4 No LTI grants have yet vested. The first LTI grant is due to vest in September 2018.
Future remuneration strategy
The Board and the Committee are committed to ensuring that Cabcharge’s remuneration framework remains responsive,
robust and reflective of current market practice and supports the business strategy to motivate, reward and focus the
executives.
Adjustments will be introduced progressively, recognising the need to remain flexible and fine-tune the remuneration
framework from time to time in an orderly and fair manner for both the Company and our people.
53
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
2. Remuneration governance
This section describes the roles of the Board, the Committee, management and external advisors when making
remuneration decisions, and sets out an overview of the principles and policies that underpin the Company’s remuneration
framework.
The following diagram illustrates the process for how remuneration decisions are made:
Board
• Ensures remuneration is fair and competitive, and supports the Company’s strategic and operational goals
• Approves remuneration structures after consideration of recommendations from the Committee
• Approves remuneration policy for NEDs, CEO and other senior executives after consideration of
recommendations from the Committee
Remuneration and Nominations Committee
• Comprises at least three members appointed by the Board
• Must have an independent Chairman and a majority of independent Directors
• Proposes remuneration for NEDs and CEO to the Board
• Undertakes an annual remuneration review
• Sets performance conditions
• The Committee met six times in FY17
For more detail on Cabcharge charters and policies, see:
https://www.cabcharge.com.au/about-us/corporate-governance
Management
External remuneration
consultants and advisors
• CEO proposes remuneration for direct reports to
the Committee, including individual performance
outcome recommendations for the financial year
• CEO not present when his remuneration is
decided
• Engaged and appointed by the Board or the
Committee
• Advises the Committee and management to
ensure that the Company is fully informed when
making decisions
• Mandatory disclosure requirements apply to
use of remuneration consultants under the
Corporations Act
Use of remuneration consultants
The Committee has previously appointed Guerdon Associates as adviser to assist with benchmarking for CEO
remuneration. In FY17 Guerdon Associates and the Korn Ferry Hay Group assisted with broad remuneration
benchmarking. Guerdon Associates and the Korn Ferry Hay Group were engaged by and reported to the Committee. In
FY17 neither Guerdon Associates nor the Korn Ferry Hay Group provided a remuneration recommendation as defined by
the Corporations Act.
54
Remuneration Report C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
3. Executive remuneration arrangements
Remuneration principles and link to Company strategy
The Company has adopted the following principles to guide its remuneration strategy to:
• Align to the business strategy to encourage opportunities to be pursued and executives rewarded accordingly for the
creation of long-term shareholder value
• Be supported by a governance framework
• Provide that senior executive and NED remuneration is balanced and market competitive in order to recruit, motivate,
reward and retain skilled senior executives and Directors
• Align the interests of senior executives with the long-term interests of the Company and its shareholders with the use
of performance-based remuneration
• Set short and long-term incentive performance hurdles that are challenging and linked to the creation of sustainable
shareholder returns
• Ensure any termination benefits are justified and appropriate
These principles are reflected in the Company’s remuneration framework which is set out below for FY17.
Business Objectives
Remuneration
Strategy Objectives
Remuneration Structure
Enhance and expand operational
platform for the creation of a
sustainable business model for
future growth.
Focus on creation of shareholder
value.
Attract and retain key talent
through balanced remuneration,
market competitive pay and
performance focussed STI and LTI.
Focus the senior executive team
on the key strategic business
imperatives.
Align interests of executives and
shareholders.
STI and LTI plans awarded to
senior executives.
Fixed Annual Remuneration
FAR set with reference to job size
and organisations of similar size,
complexity and industry dynamics.
Short-term incentives
Cash incentive based on mix of
corporate goals (60%) and financial
and non-financial hurdles, set
at individual business unit level
focused on strategic priorities
(40%).
Long-term incentives
Performance rights vesting over
four years, subject to achievement
of absolute TSR and ROE hurdles,
with no opportunity to retest
performance.
Executive arrangements
Contracts formalising incentive
arrangements, and termination and
post-termination provisions.
55
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Remuneration structure
The Company aims to reward senior executives with a level and mix of remuneration appropriate to their position,
responsibilities and performance. The overall level of remuneration for each senior executive is intended to be market
competitive for the purposes of recruiting and retaining skilled executives.
In FY17, the executive remuneration framework consisted of fixed annual remuneration (FAR) and “at risk” remuneration
(STI and LTI), with the mix of remuneration intended to reflect the strategic direction and current business strategy of the
Company.
The Board and the Committee regularly review the structure and mix of remuneration of the Company, with a view to
making adjustments where it is appropriate to support the strategic objectives of the business. This has driven the
introduction of STI and LTI plans that allow for setting the “at risk” remuneration components for the CEO and senior
executives. The Board and the Committee are committed to continuing this process and intend to keep the matter under
review, with the intention of making further changes to the remuneration mix in an orderly and fair manner over time.
In FY17, remuneration benchmarking was undertaken for the executive members of KMP in line with the principles
reflected in the Company’s remuneration framework set out on page 55.
The following graphs summarise the CEO and other senior executives’ remuneration mix for FY17. In line with the
Company’s stated commitment to better align executive KMP remuneration with market practice and the Company’s
strategic direction, this year there has been an overall increase in the “at risk” remuneration for both the CEO and other
executives (CEO 47% FY16 to 54% FY17; other executives 34% FY16 to 42% FY17).
CEO
27%
27%
Other executives
23%
46%
19%
58%
Fixed
FAR
Maximum
At Risk
Opportunities
STI
LTI
“STI” in the diagrams above corresponds to the relevant senior executive’s maximum STI opportunity, not their STI outcomes for FY17. “LTI” is
based on the maximum LTI opportunity granted to senior executives in respect of FY17.
Detail of remuneration elements and incentive plans
FAR
Details regarding FAR are set out below.
What is FAR?
FAR is comprised of salary and other benefits provided to a senior executive on an ongoing
basis, such as superannuation contributions.
How is FAR
determined?
FAR is reviewed on an annual basis and executive contracts do not include any guaranteed
FAR increases.
When reviewing FAR for senior executives a number of factors are considered, including the
individuals’ skills and experience relevant to their roles, and internal and external factors.
The Company’s policy is to regularly review the remuneration structure and to position
FAR competitively with reference to Australian listed companies of a similar complexity and
industry dynamic to that of Cabcharge.
Why were the FY17
changes made?
The Board reviewed the fixed remuneration of each senior executive in FY17. While
benchmarking is a useful starting point it is only one input used by the Board when
determining total remuneration for senior executives.
During the process of review, the Board took into account internal relativites, experience,
tenure in role, individual performance and retention.
Changes to FAR are typically implemented and take effect on 1 July of each year.
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STI
Details of the FY17 STI plan are disclosed below.
What is the STI plan?
The STI plan provides senior executives with an opportunity to be rewarded for the
achievements of the Company, business unit and individual performance measures, further
aligning their interests with the strategic priorities of the Company.
Who is eligible to
participate?
The CEO and senior executives (being Mr Skelton, Ms Lines, Mr Lucchese, Mr Ludick, Mr
Lukabyo and Mr Overell) may participate. All senior executives are party to the Company’s
contemporary standard executive service agreement which contains provisions regarding
senior executive participation in the Company’s STI plan.
What is the format for
STI awards?
The STI award is delivered in the form of a cash payment that is subject to the satisfaction of
performance measures.
For the CEO, 25% of any STI award is deferred and paid in cash in two equal instalments over
the next 24 months after payment of the first 75% instalment of the STI award.
What is the
performance period?
Performance was measured over the full financial year, 1 July 2016 to 30 June 2017.
What is the maximum
opportunity for senior
executives?
The STI maximum opportunity is set individually and based upon market benchmarks for
the remuneration mix. This figure when referenced to FAR is: CEO: 57% of FAR and other
executives: on average 33% of FAR.
What are the
STI performance
measures?
STI awards vest subject to the achievement of Group-wide and individual performance
measures.
The financial performance measure continues to apply to all senior executives to ensure their
common focus on the achievement of the Company’s financial objectives.
The individual KPIs selected for each senior executive in FY17 were directly linked to the
strategic imperatives of the Company and the contributions of the relevant executive towards
the achievement of them.
An overview of the performance measures for FY17 are:
Role
Scorecard and performance measures
CEO
Financial performance measure (60% of STI)
Earnings before interest, tax, depreciation and amortisation before associates,
less acquisitions, divestments and impairments (Gateway Hurdle).
100% of the Gateway Hurdle is $49.4 million. The minimum threshold for the
Gateway Hurdle is 90% being $44.4 million, triggering a 35% payment of the
financial performance measure. Straight line vesting of 65% will occur between
the minimum threshold of $44.4 million and the maximum amount of $49.4
million.
If the 90% minimum threshold is not met, no payment will be made under
the financial performance measure and, subject to the Board’s discretion, the
individual KPIs below may be discounted by up to 33%.
Individual KPIs (40% of STI)
• Sell non-core assets and prepare for future growth (10%)
• Position the personal transport business and offer service on a national
basis (10%)
• Grow the Payments business (10%)
• Reshape the team to ensure delivery of the strategic plan (5%)
• Achieve improvement in Passenger experience (5%)
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Other
senior
executives
Financial performance measure (60% of STI)
Earnings before interest, tax, depreciation and amortisation before associates,
less acquisitions, divestments and impairments (Gateway Hurdle).
100% of the Gateway Hurdle is $49.4 million. The minimum threshold for the
Gateway Hurdle is 90% being $44.4 million and will trigger a 35% payment
of the financial performance measure amount. Straight line vesting of 65%
will occur between the minimum threshold of $44.4 million and the maximum
amount of $49.4 million.
If the 90% minimum threshold is not met, no payment will be made under
the financial performance measure and, subject to the Board’s discretion, the
individual KPIs below may be discounted by up to 33%.
Individual KPIs (40% of STI)
Position-specific KPIs are tailored for each senior executive having regard
to their role, responsibility and specific strategic goals over which they have
influence. Examples include:
• Risk management
• ACCC compliance
• Driver activations
• App downloads and usage
• Hand held terminals
How is performance
tested?
Details regarding the STI outcomes for FY17, based on achievement of the performance
measures outlined above, are set out in section 4 of the Remuneration Report.
On an annual basis after the end of the performance period, the Committee considers the
CEO’s performance against the performance measures set for the year and provides a
recommendation of the STI to be paid (if any) to the Board for approval. The Board may
approve, amend or reject the recommendation.
During that time, the CEO considers each senior executive’s performance against the
performance measures set for the year and, in consultation with the Committee, determines
the STI to be paid (if any) to each senior executive.
What happens on a
change of control
or other significant
events?
If a change of control occurs before the end of the performance period, the Board will
determine how STI awards will be dealt with. If a change of control occurs before the Board
makes a determination, a pro rata amount of the STI award based on the proportion of the
performance period that has elapsed at the time of the change of control will be paid.
The Board has the discretion to vary the terms of STI awards so that senior executives are not
unfairly advantaged (or disadvantaged) by factors outside their control. Any variations will be
disclosed and explained in the Remuneration Report.
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Does the plan provide
for clawback?
Cabcharge has a clawback mechanism in place, which allows for the repayment of STI
awards in cases involving fraud, dishonesty, breach of obligations (including a material
misstatement of financial information), or any other omissions that result in an STI outcome.
The Board may use its discretion to ensure that no unfair benefit is obtained, subject to
applicable laws.
What happens
on termination of
employment?
Where employment ends prior to the end of the performance period by reason of resignation,
fraudulent or dishonest conduct, or termination for cause (including gross misconduct), any
entitlement to the STI award will be forfeited at termination of employment.
Why were the FY17
changes made?
Where employment ends for any other reason, a pro-rata portion of the STI award will remain
on foot and will be tested at the end of the original performance period.
The Board retains the discretion to vary the treatment set out above based on the specific
circumstances surrounding the termination of employment.
In respect of the deferred STI, when employment ends after payment of the initial STI
instalment but prior to payment of the deferred portion of an STI award:
• By reason of fraudulent or dishonest conduct, or termination for gross misconduct, the
entitlement to the deferred portion of the STI award will be forfeited at termination of
employment
• For any other reason, the deferred portion of the STI award will remain on foot and be
paid in the ordinary course
Having regard to the asset sales and acquisitions that management were tasked to undertake
in FY17 and the impact of those strategic projects on the Company, the Board adjusted the
amount of the financial performance measure from 70% to 60% and increased the strategic
performance measures from 30% to 40%. This was to ensure that the STI remained relevant
in an environment of significant commercial change and regulatory uncertainty and focused
senior management on the important tasks and projects the Board deemed necessary for the
Company’s success in FY17.
For the CEO, 25% of any STI payment is deferred and paid in cash in two equal instalments
over the next 24 months after payment of the first 75% instalment of the STI award.
To more closely align with market practice the Gateway Hurdle was changed from EBIT in
FY16 to EBITDA before associates less aquisitions, divestments and impairments in FY17.
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LTI
Details of the FY17 LTI plan are disclosed below.
What is the LTI plan?
The LTI plan is offered to senior executives who are able to have a positive impact on the
Company’s performance by providing them with an opportunity to share in the long-term
growth of Cabcharge and enhancing their alignment with the long-term interests of the
Company’s shareholders.
Who is eligible to
participate?
In FY17, the Company offered LTI awards to the CEO and 5 other senior executives (being Ms
Lines, Mr Lucchese, Mr Ludick, Mr Lukabyo and Mr Overell). All senior executives are party to
the Company’s contemporary standard executive service agreement which contains provisions
regarding senior executive participation in the Company’s LTI plan.
What is the format for
LTI awards?
LTI awards are delivered in the form of rights which are granted to senior executives for nil
consideration.
LTI awards are granted annually and are subject to a four-year performance period.
Rights will vest at the end of the performance period, subject to the satisfaction of the
performance measures set out below. There is no retesting of performance.
On vesting, each right converts into one ordinary share (or if determined by the Board into the
equivalent cash value). Any rights which do not vest immediately lapse.
What is the
performance period?
The performance period for the FY17 LTI commenced on 1 July 2016 and will end on 30 June 2020.
Subject to the satisfaction of relevant performance measures, the FY17 award under the plan
will vest following testing of the performance measures, which is anticipated to occur after the
FY20 full year results announcement in or around September 2020.
What is the maximum
opportunity for senior
executives?
The maximum LTI opportunity is set individually and based upon market benchmarks for
the remuneration mix. This figure when compared to FAR is: CEO: 57% of FAR and other
executives: on average 40% of FAR
The number of rights granted to each senior executive is determined by dividing their
maximum LTI opportunity by the face value of Cabcharge shares at the time of award
(determined using the 5-day volume weighted average price immediately preceding the
performance period). No discount is made for dividends foregone nor for performance or other
considerations.
The FY17 award is split into two tranches, each subject to separate performance measures
which are independent and tested separately at the end of the performance period:
• Tranche one (50% of the total LTI award) will vest subject to the achievement of an
absolute total shareholder return target by the Company (TSR Hurdle)
• Tranche two (50% of the total LTI award) will vest subject to the achievement of a return
on equity target by the Company (ROE Hurdle)
These measures are considered challenging and were chosen as they reflect the Company’s
focus on increasing shareholder value, profitability and capital efficiency.
Further details regarding the performance measures applicable to the FY17 award are set out
below.
Tranche one: TSR Hurdle - 50% of the FY17 award
The TSR Hurdle measures the change in the Company’s share price, including dividends
paid, over the performance period. The absolute TSR performance target is set at a level
above average historical long-term market returns to ensure vesting will occur only if our
shareholders experience superior returns.
Absolute TSR was selected as an LTI performance measure for the following reasons:
• TSR ensures any reward for senior executives is possible only if our shareholders
experience superior returns
• The measure minimises the effects of market cycles that might create large fluctuations
in peer group company performance when a relative TSR measure is used
• Relative TSR measures have limited relevance to the Company given that there are few
companies suitable as direct comparators to Cabcharge. Comparing Cabcharge to a
broader index may result in outcomes not reflective of the Company’s performance over
the period or the value delivered to our shareholders
TSR performance is monitored by an independent external adviser at 30 June each year.
What are the
LTI performance
measures?
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Remuneration Report C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
At the end of the performance period, vesting of tranche one will be determined by the Board
in accordance with the following schedule.
Absolute TSR (50% of the total grant value)
Performance outcome
% of award that will vest
Less than 9% return p.a.
Equal to 9% return p.a.
0%
30%
Between 9% return p.a. and
11% return p.a.
Straight-line vesting between 30% and 100% of the
award
11% return p.a. or more
100%
Tranche two: ROE Hurdle – 50% of the FY17 award
Tranche two will vest subject to the achievement of a ROE multiple of the Company’s
weighted average cost of capital (WACC) over the performance period. ROE is based
on statutory net profit after tax divided by average equity. WACC is determined by an
independent external adviser and the calculation will be retrospectively disclosed in the
Remuneration Report following the end of each performance period. The ROE Hurdle requires
minimum threshold performance of ROE being at least 1.1 times WACC before any vesting will
occur.
ROE was selected as it is meaningful to participants and shareholders, it aligns executive
interests with the shareholder experience and will enhance management’s focus on
profitability and capital efficiency which is important for the Company in this next stage of its
growth.
At the end of the performance period, vesting of tranche two will be determined by the Board
in accordance with the following schedule.
ROE (50% of the total grant value)
Performance outcome
% of award that will vest
Below ROE of 1.1 times WACC
ROE of 1.1 times WACC
0%
35%
ROE between 1.1 times and 1.3
times WACC
Straight-line vesting between 35% and 100% of the
award
ROE of 1.3 times WACC or higher
100%
What happens on a
change of control
or other significant
events?
Where a change of control event occurs, the Board has discretion to determine the proportion
of LTI awards to vest and may have regard to the executive’s tenure, the proportion of
the performance period that has elapsed, the extent to which the performance conditions
have been satisfied at the time of the change of control and the interests of the Company’s
shareholders.
If a change of control occurs before the Board exercises its discretion, a pro-rata number
of unvested LTI awards will vest based on the extent which the performance conditions are
satisfied (or are estimated to have been satisfied) and the proportion of the performance
period that has elapsed at the time of the change of control.
The Board may adjust the terms of LTI awards in exceptional situations where participants
may be unfairly advantaged (or disadvantaged) by external factors outside of their control. The
Board in all circumstances will ensure any variation takes into account the purpose of the LTI
plan and achievement against the relevant performance conditions up until the relevant time.
Any variations will be disclosed and explained in the Remuneration Report.
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What happens
on termination of
employment?
Where employment ends prior to the end of the performance period due to resignation,
termination for cause or poor performance, unvested LTI awards will lapse.
Where the employment ends for any other reason, unvested LTI awards will continue on-foot
and be tested at the end of the original performance period against the relevant performance
conditions. However, the Board has an overriding discretion to apply another treatment if it
deems it appropriate.
Does the plan provide
for clawback?
Cabcharge has a clawback mechanism in place, which allows for the lapsing and/or clawback
of LTI awards. In cases involving fraud, dishonesty, breach of obligations (including a
material misstatement of financial information), or any other act or omission that result in an
inappropriate LTI outcome. The Board may use its discretion to ensure that no unfair benefit is
obtained by a participant, subject to applicable laws.
Why were the FY17
changes made?
At the 2016 annual general meeting, shareholders approved the Board’s proposal to:
• Give equal weighting to the TSR and ROE performance measures so as to reflect the
Company’s focus on capital efficiency and growth over the next four years
• Adjust the ROE performance measures so as to have regard to the asset sales and
acquisitions that management were tasked to undertake in FY17 and to ensure the LTI
remained relevant in an environment of significant commercial change and regulatory
uncertainty.
Executive contracts
The Company has a contemporary standard executive service agreement. Remuneration arrangements for senior
executives are formalised in these agreements.
Table 3: Executive contractual terms
Executive
CEO
Ongoing
Contract term
Notice Period1
Other executives
Ongoing
1 The Board has the discretion to make payment to senior executives in lieu of notice.
2 In relation to Mr Lukabyo’s notice period, up until 30 June 2020 both Mr Lukabyo and the Company are required to give nine months notice.
From 1 July 2020 both Mr Lukabyo and the Company are required to give six months notice.
62
Executive: 12 months
Company: 12 months
Executive: 6 months2
Company: 6 months2
Remuneration Report C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
4. Executive remuneration outcomes for FY17
FY17 was a significant year for the Company as management completed a number of material transactions that the Board
determined were key to the progress of the Company’s strategic initiatives. These included the divestment of non-core
assets, launching hand held terminals, building a national platform through the acquisition of Yellow Cabs Queensland
and the return to shareholders of dividends amounting to $1.00 per share through two 10 cent dividends and an 80 cent
special dividend.
FAR
External benchmarking was conducted in FY17. This resulted in changes to their fixed remuneration and represents a total
increase of approximately 7%.
STI performance and outcomes
As outlined in section 3 above, 60% of the CEO and other senior executive’s STI required the Company achieving a
minimum threshold of at least 90% of the Gateway Hurdle. 40% of the CEO and other senior executive STI required
meeting individual position-specific KPIs and, subject to the Board’s discretion, can be discounted by up to 33% if 90% of
the Gateway Hurdle is not achieved.
Performance for FY17 against the individual senior executive STI criteria was assessed by the CEO with recommendations
presented to the Committee. The Committee also assessed the performance of the CEO with reference to the STI criteria
and made recommendations to the Board.
The Board considered the material provided to the Committee, its recommendations, and the financial audited year-end
results. The Board determined that $48.6 million was achieved for the Financial Performance measure which exceeded the
minimum threshold for the Gateway Hurdle of $44.4 million. The Board also agreed with the recommendations in relation
to the individual KPIs and the applicable value payable.
Specifically, in respect of the CEO’s STI, the Board approved the following:
• Financial perfromance measure - Gateway Hurdle
• Sell non-core assets and prepare for future growth
• Grow the personal transport business and offer service on a national basis
• Grow the Payments business
• Reshape the team to ensure delivery of the strategic plan
• Achieve improvement in Passenger experience
53.8%
10.0%
9.5%
6.0%
2.5%
3.8%
Target 60%
Target 10%
Target 10%
Target 10%
Target 5%
Target 5%
For the other senior executives refer to table 4 for the respective percentages and values payable as approved by the Board.
Table 4: FY17 STI award outcomes
The individual STI outcomes for each senior executive are detailed in the table below.
Senior executive
FY16 STI deferred1
$
Maximum FY17 STI
opportunity
$
STI earned in FY17
$
% of maximum
STI opportunity
achieved
% of maximum
STI opportunity
forfeited
Mr Andrew Skelton
30,000
Ms Sheila Lines
Mr Adrian Lucchese
Mr Deon Ludick
Mr Fred Lukabyo
Mr Stuart Overell
–
–
–
–
5,000
400,000
200,000
150,000
100,000
100,000
150,000
342,280
170,140
136,335
90,820
91,720
127,980
85.6
85.1
90.9
90.8
91.7
85.7
14.4
14.9
9.1
9.2
8.3
14.3
1 Deferred FY16 STI determined and awarded during FY17.
LTI performance and outcomes
The LTI plan has been in operation since it was approved by the Company’s shareholders in Novemeber 2014. The first
awards granted under the LTI plan are due for assessment in or around September 2018.
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C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Snapshot of Company performance
Table 5: Performance outcomes for the last five years
Profit after tax from continuing operations ($m)
FY17
13.7
(Loss) Profit attributable to the owners of the Company ($m)
(90.5)
Dividend Paid ($m)
Dividend paid per share fully franked (cents)
Closing share price at 30 June1 ($)
120.4
100
2.53
FY16
10.3
25.6
24.1
20
3.19
FY15
46.5
46.5
24.1
20
3.66
FY14
56.1
56.1
32.5
27
4.04
FY13
60.6
60.6
43.4
36
4.03
1 Opening share price in FY13 was $5.00. The FY17 closing share price is after the payment of the 80 cent fully franked special dividend
paid on 28 April 2017.
Total executive remuneration in FY17
The statutory remuneration of each senior executive in FY17 is outlined in the table below.
Table 6: Executive Remuneration in FY17 (Statutory)
Short-term benefits
Post-employment benefits
Salary and
fees $
Non-cash
benefits1
$
STI
$
Super-
annuation
contributions
$
Termination
benefits
$
Other
long-term
employee
benefits1
$
Share
based
payments
LTI
$
Total
$
Performance
related rem
% of total
rem2
Mr Andrew
Skelton
Ms Sheila
Lines
Mr Adrian
Lucchese
Mr Deon
Ludick3
Mr Fred
Lukabyo4
Mr Stuart
Overell
Total
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
680,385
372,2805
655,692
150,300
25,065
29,079
466,894
366,050
170,140
62,000
_
9,007
376,409
136,335
310,128
61,300
9,096
18,957
349,186
90,820
11,380
_
_
_
407,804
400,243
91,720
–
385,222
132,9806
334,333
45,200
64,988
59,978
23,398
38,032
24,925
19,308
20,060
18,565
19,647
19,679
21,678
_
19,736
19,679
19,647
19,679
2,665,900
2,066,446
994,275
318,800
133,927
155,053
125,693
96,910
_
–
_
–
_
–
_
_
_
–
_
–
_
_
23,255
9,480
26,314
1,152,224
33,907
897,766
1,349
–
1,011
433
_
_
16,826
5,931
33,538
18,197
75,979
34,041
16,584
3,500
675,027
459,122
6,161
548,659
21,499
431,996
6,542
479,606
_
_
9,813
610,887
–
485,831
6,161
600,946
21,499
476,940
71,575
4,067,349
80,405
2,751,655
34.6
20.5
27.7
14.3
26
19.2
20.3
–
16.6
–
23.2
14.0
26.2
14.5
1 Movements in accruals for annual leave and reportable fringe benefits are disclosed as non-cash benefits. Other long-term employee benefits
represent provisions for long service leave.
2 This represents the percentage of the total remuneration that relates to performance.
3 Mr Ludick became a member of the Company’s KMP on 18 July 2016.
4 Mr Lukabyo was invited to participate in the STI and LTI programs for FY17.
5 $85,490 is deferred and will be paid in two equal instalments of $42,745 the first in 2019 and the second in 2020. $30,000 of Mr Skelton’s
FY17 STI amount is deferred from his FY16 STI program.
6 $5,000 of Mr Overell’s FY17 STI amount is deferred from his FY16 STI program.
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LTI awards held by executives
Details of all outstanding rights granted to senior executives as LTI awards are set out in the table below.
Table 7: LTI awards held by senior executives
Grant Date Performance period
Number of rights
granted
Performance
conditions
Senior
executive
Mr Andrew
Skelton
30 January 2017
6 June 2016
17 December 2014
Ms Sheila
Lines
30 January 2017
6 June 2016
Mr Adrian
Lucchese
30 January 2017
6 June 2016
20 May 2015
1 July 2016 –
30 June 2020
1 July 2015 –
30 June 2019
1 July 2014 –
30 June 2018
1 July 2016 –
30 June 2020
1 July 2015 –
30 June 2019
1 July 2016 –
30 June 2020
1 July 2015 –
30 June 2019
1 July 2014 –
30 June 2018
124,611
78,624
43,063
62,305
26,247
62,305
26,247
24,570
Absolute TSR hurdle
and ROE hurdle
Absolute TSR hurdle
and ROE hurdle
Absolute TSR hurdle
and turnover
compound annual
growth hurdle
Absolute TSR hurdle
and ROE hurdle
Absolute TSR hurdle
and ROE hurdle
Absolute TSR hurdle
and ROE hurdle
Absolute TSR hurdle
and ROE hurdle
Absolute TSR hurdle
and turnover
compound annual
growth hurdle
Vesting date1
14 September 2020
16 September 2019
14 September 2018
14 September 2020
16 September 2019
14 September 2020
16 September 2019
14 September 2018
Mr Deon
Ludick1
Mr Fred
Lukabyo2
Mr Stuart
Overell
30 January 2017
1 July 2016 –
30 June 2020
31,153
Absolute TSR hurdle
and ROE hurdle
14 September 2020
19 June 2017
1 July 2016 –
30 June 2020
46,729
Absolute TSR hurdle
and ROE hurdle
14 September 2020
30 January 2017
6 June 2016
20 May 2015
1 July 2016 –
30 June 2020
1 July 2015 –
30 June 2019
1 July 2014 –
30 June 2018
62,305
26,247
24,570
Absolute TSR hurdle
and ROE hurdle
Absolute TSR hurdle
and ROE hurdle
Absolute TSR hurdle
and turnover
compound annual
growth hurdle
14 September 2020
16 September 2019
14 September 2018
1 Mr Ludick became a member of the Company’s KMP on 18 July 2016.
2 Mr Lukabyo was invited to participate in the LTI program for FY17.
65
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
5. Non-executive Director fee arrangements
Table 8: NEDs included in this report
NED
Role
Change in FY17
Mr Paul Oneile
Independent Chairman
Appointed 27 February 2017
Mr Donnald McMichael
Independent Director
—
Mr Richard Millen
Independent Director
Independent Chairman 24 November 2016
to 27 February 2017
Ms Trudy Vonhoff
Independent Director
—
Mr Russell Balding AO
Independent Chairman
Ceased 24 November 2016
Mr Stephen Stanley
Independent Director
Ceased 23 November 2016
Board and Committee fees
Shareholders determine the maximum fee pool available for the payment of Directors. When recommending a maximum
fee pool to shareholders for approval, the Board considers the fees required to allow the Company to attract and retain
Directors of the highest calibre, whilst incurring a cost acceptable to shareholders.
The current aggregate NED fee pool is $1.3 million per year, approved by shareholders on 26 November 2014. The fee
pool is inclusive of statutory entitlements (including superannuation).
NED fees consist of Board fees and committee fees. The payment of additional fees for serving on a committee recognises
the additional time commitment required by NEDs. The Chairman of the Board is not eligible for additional fees for serving
on committees. These fees are not linked to performance and no STI or LTI is provided to NEDs.
Fees in FY17
The Committee reviewed the NED fees and having taken into account the Committee’s recommendation, the Board
resolved that there were to be no NED fee increases in FY17.
The table below summarises NED fees payable in respect of FY17.
Table 9: Board and committee fees for FY17
Board
Audit and Risk Committee
Remuneration and
Nominations Committee
Chairman
$220,000
$20,000
$16,000
Member
$100,000
$11,000
$11,000
The Board and committee fees outlined above include statutory superannuation contributions. NEDs do not receive
retirement benefits other than statutory superannuation.
66
Remuneration Report C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Statutory disclosure in respect of NED remuneration
The table below includes statutory disclosure relating to NED remuneration.
Table 10: Statutory disclosure – NED fees
Short-term benefits
Post-employment benefits
Salary and fees
($)
Superannuation contributions
($)
Mr Paul Oneile1
Mr Donnald
McMichael
Mr Richard Millen2
Ms Trudy Vonhoff
Mr Russell Balding3
Mr Stephen Stanley4
Total fees for NEDs
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
66,971
–
107,419
106,930
112,657
85,589
111,094
85,026
80,669
200,692
44,140
87,855
522,950
608,375
6,362
–
10,205
10,158
36,983
34,411
10,554
8,078
7,664
19,308
4,193
8,346
75,961
84,325
Total
($)
73,333
–
117,624
117,088
149,640
120,000
121,648
93,104
88,333
220,000
48,333
96,201
598,9115
692,700
1 Mr Oneile commenced as a NED on 27 February 2017.
2 Mr Millen’s remuneration is reflective of the fact that he held the position of Independent Chairman from 24 November 2016 to 27 February 2017.
3 Mr Balding retired as a NED on 24 November 2016.
4 Mr Stanley resigned as a NED on 23 November 2016.
5 This represents 46.1% of the pool approved by shareholders.
67
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
6. Additional disclosures relating to share capital
Shares
The relevant interest of each KMP (and their related parties) in the share capital of the Company for the year to 30 June
2017 is detailed in the table below.
Table 11: Shareholdings of KMP and their related parties
Balance
1 July 2016
Received as
remuneration
Net other change
Balance
30 June 2017
Direct
interest
shares
Indirect
interest
shares
Direct
interest
shares
Indirect
interest
shares
Direct
interest
shares
Indirect
interest
shares
Direct
interest
shares
Indirect
interest
shares
Senior executives
Andrew Skelton
6,861
Sheila Lines1
Adrian Lucchese
Deon Ludick2
–
–
–
Fred Lukabyo
2,450
Stuart Overell
Non-executive Directors
Paul Oneile3
–
–
–
–
–
–
–
–
10,000
Donald McMichael4
500
15,530
Richard Millen5
–
35,000
Trudy Vonhoff
10,000
Russell Balding6
40,000
–
–
Stephen Stanley7
–
80,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
12,000
–
–
6,861
–
–
–
–
2,450
–
–
4,000
–
–
–
–
10,000
4,000
–
–
–
–
–
20,000
500
35,530
–
–
–
–
–
35,000
22,000
40,000
–
–
–
80,000
1 4,000 fully paid ordinary shares held by SP Advisors Superannuation Fund Pty Ltd atf the SP Advisors Superannuation Fund.
2 Shareholdings for Mr Ludick are presented as at the date he commenced as a KMP, being 18 July 2016.
3 Shareholdings for Mr Oneile are presented as at the date he was appointed as a NED, being 27 February 2017. 10,000 fully paid ordinary
shares are held by PNM Management Pty Ltd atf Kyambra Superannuation Fund.
4 32,500 fully paid ordinary shares held by Gracious Investments Pty Ltd atf Donren Holdings Superannuation Fund and 3,030 CABSRU
(a self-funding instalment warrant issued by RBS) held by Gracious Investments Pty Ltd atf Donren Holdings Superannuation Fund.
5 35,000 fully paid ordinary shares held by Navigator Australia Limited as custodian for an MLC Wrap Platform as nominee for the
Millen Superannuation Fund.
6 Mr Balding retired as a NED on 24 November 2016.
7 Mr Stanley resigned as a NED on 23 November 2016. 80,000 fully paid ordinary shares held by Esjay Pty Ltd atf the SL Stanley Family Trust.
68
Remuneration Report C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Rights
The table below details the rights granted to executive KMP as part of their remuneration. All rights granted relate to the
LTI plan.
Table 12: Rights granted as part of remuneration to the Company executives
Senior executive1
Balance at
1 July 2016
Number
of rights
granted in
FY171
Value of
rights
granted in
FY17
Net other
change
Vested
Value of
rights
vested
Lapsed
Andrew Skelton
121,660
124,611
400,000
Sheila Lines
26,247
62,305
200,000
Adrian Lucchese
50,817
62,305
200,000
Deon Ludick2
Fred Lukabyo3
–
–
31,153
100,000
46,729
150,000
Stuart Overell
50,817
62,305
200,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Balance
at 30 June
2017
246,271
88,552
113,122
31,153
46,729
113,122
1 For performance rights granted as remuneration, the fair value is $942,367. The fair value has been calculated by an independent advisor
as at the date of grant, using a Black-Scholes option pricing technique for the return on equity rights ($3.16 per right) and a Monte Carlo
simulation model for the total shareholder return ($1.68 per right).
2 Mr Ludick became a member of the Company’s KMP on 18 July 2016.
3 Mr Lukabyo was invited to participate in the LTI program for FY17.
7. Transactions with key management personnel and their related parties
Loans to KMP and their related parties
No loans were made guaranteed or secured to KMP or any of their related parties.
There were no transactions between the Company (or any of its controlled entities) and any KMP (or their related parties)
other than those within the normal employee, customer or supplier relationship on terms no more favourable than arms’
length. Information about these transactions would not adversely affect investment decisions by shareholders, or the
discharge of accountability by KMP.
8. Shareholder voting for Remuneration Report at the 2016 annual general meeting
The Company received a ‘yes’ vote on more than 85.7% of votes cast on its Remuneration Report for the 2016 fi nancial year.
Being mindful of the focus on senior executive remuneration, the Company has continued to review its remuneration practices.
69
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Auditor’s Independence Declaration
For the year ended 30 June 2017
70
Consolidated
Financial Statements
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
71
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
72
Index to the Consolidated Financial Statements
Index to the Consolidated Financial Statements
For the year ended 30 June 2017
For the year ended 30 June 2017
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Contents
Contents
Consolidated Statement of Comprehensive Income ............................................................................................. 74
Consolidated Statement of Comprehensive Income ............................................................................................. 77
Consolidated Statement of Financial Position......................................................................................................75
Consolidated Statement of Financial Position......................................................................................................78
Consolidated Statement of Cash Flows ............................................................................................................... 76
Consolidated Statement of Cash Flows ............................................................................................................... 79
Consolidated Statement of Changes In Equity ..................................................................................................... 77
Consolidated Statement of Changes In Equity ..................................................................................................... 80
Notes to the Consolidated Financial Statements ................................................................................................. 78
Notes to the Consolidated Financial Statements ................................................................................................. 81
1. Reporting entity .............................................................................................................................................. 78
1. Reporting entity ............................................................................................................................................... 81
2. Basis of preparation ....................................................................................................................................... 78
2. Basis of preparation ......................................................................................................................................... 81
3. Revenue & Turnover ........................................................................................................................................ 79
3. Revenue & Turnover ......................................................................................................................................... 82
4. Finance income .............................................................................................................................................. 81
4. Finance income ............................................................................................................................................... 84
5.
5.
Income tax expense ........................................................................................................................................ 81
Income tax expense ......................................................................................................................................... 84
6. Trade and other receivables ............................................................................................................................82
6. Trade and other receivables ............................................................................................................................. 85
7.
7.
Inventories ..................................................................................................................................................... 83
Inventories ...................................................................................................................................................... 86
8. Financial assets .............................................................................................................................................. 83
8. Financial assets ............................................................................................................................................... 86
9. Business combination ..................................................................................................................................... 84
9. Business combination ...................................................................................................................................... 87
10. Discontinued operations ................................................................................................................................. 84
10. Discontinued operations .................................................................................................................................. 87
11. Associated companies .................................................................................................................................... 86
11. Associated companies ..................................................................................................................................... 89
12. Property, plant and equipment ........................................................................................................................ 88
12. Property, plant and equipment .......................................................................................................................... 91
13. Deferred tax assets and liabilities ...................................................................................................................90
13. Deferred tax assets and liabilities ...................................................................................................................... 93
14. Taxi plate licences .......................................................................................................................................... 91
14. Taxi plate licences ........................................................................................................................................... 94
15. Goodwill ......................................................................................................................................................... 93
15. Goodwill ......................................................................................................................................................... 96
16. Intellectual property ........................................................................................................................................ 94
16. Intellectual property ......................................................................................................................................... 97
17. Trade and other payables................................................................................................................................ 96
17. Trade and other payables ................................................................................................................................. 99
18. Loans and borrowings .................................................................................................................................... 96
18. Loans and borrowings ..................................................................................................................................... 99
19. Employee benefits .......................................................................................................................................... 96
19. Employee benefits ........................................................................................................................................... 99
20. Share capital and Reserves.............................................................................................................................98
20. Share capital and Reserves ............................................................................................................................ 101
21. Dividends ....................................................................................................................................................... 99
21. Dividends ...................................................................................................................................................... 102
22. Earnings per share ........................................................................................................................................ 100
22. Earnings per share (EPS) ................................................................................................................................ 103
23. Dividend franking balance ............................................................................................................................. 101
23. Dividend franking balance .............................................................................................................................. 104
24. Parent entity disclosures ............................................................................................................................... 101
24. Parent entity disclosures ................................................................................................................................ 104
25. Deed of Cross Guarantee .............................................................................................................................. 102
25. Deed of Cross Guarantee ............................................................................................................................... 105
26. Related Party and Key Management Personnel disclosures ........................................................................... 104
26. Related Party and Key Management Personnel (KMP) disclosures .................................................................... 107
27. Remuneration of auditors .............................................................................................................................. 104
27. Remuneration of auditors ............................................................................................................................... 107
28. Particulars relating to controlled entities ....................................................................................................... 105
28. Particulars relating to controlled entities .......................................................................................................... 108
29. Capital expenditure commitments ................................................................................................................. 106
29. Capital expenditure commitments ................................................................................................................... 109
30. Operating lease commitments ....................................................................................................................... 106
30. Operating lease commitments ........................................................................................................................ 109
31. Notes to the Consolidated Statement of Cash Flows ..................................................................................... 106
31. Notes to the Consolidated Statement of Cash Flows ........................................................................................ 109
32. Financial instruments and financial risk management .................................................................................... 107
32. Financial instruments and financial risk management ....................................................................................... 110
33. Operating segment ....................................................................................................................................... 111
33. Operating segment ........................................................................................................................................ 114
34. Share-based payment ................................................................................................................................... 112
34. Share-based payment .................................................................................................................................... 115
35. Subsequent event ......................................................................................................................................... 113
35. Subsequent event .......................................................................................................................................... 116
Directors’ Declaration ......................................................................................................................................... 114
Directors’ Declaration ........................................................................................................................................ 117
Independent Auditor’s Report .............................................................................................................................. 115
Independent Auditor’s Report ............................................................................................................................ 118
73
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2017
Continuing operations
Revenue
Other income
Processing fees to Taxi Networks
Brokered Taxi plate licence costs
Other taxi related costs
Employee benefi ts expenses
General and administrative expenses
Transaction processing expenses
Depreciation
Amortisation
Impairment charges
Capitalised development costs written-off
Other expenses
Results from operating activities
Finance income
Finance costs
Net fi nance costs
Profi t before income tax
Income tax expense
Profi t after tax from continuing operations
Discontinued operations
Notes
2017
$’000
2016*
$’000
(Re-stated)
3
3
151,949
168,808
1,689
(8,821)
(19,935)
(2,760)
(42,760)
(20,319)
(2,537)
14,133
(10,064)
(21,418)
(5,403)
(41,634)
(22,968)
(4,013)
12
(11,963)
(11,785)
14 & 16
14 & 16
4
(1,745)
(8,277)
(1,577)
(6,974)
25,970
1,885
(3,573)
(1,688)
(3,883)
(27,680)
-
(7,036)
27,057
5,516
(5,909)
(393)
24,282
26,664
5
(10,581)
(16,384)
13,701
10,280
(Loss) / Profi t from discontinued operations (net of income tax)
(Loss) / Profi t for the year attributable to owners of the Company
10
(104,251)
(90,550)
15,336
25,616
Other comprehensive income
Items that may be reclassifi ed subsequently to profi t or loss:
Share of other comprehensive income / (loss) of associates, net of tax
4,959
(3,035)
Effective portion of change in fair value of cash fl ow hedge
Net change in fair value of available-for-sale fi nancial assets transferred to profi t or loss
Income tax on other comprehensive income
Other comprehensive income / (loss) for the year, net of income tax
123
12
(40)
5,054
862
(4,731)
1,160
(5,744)
Total comprehensive (loss) / income for the year attributable to owners of the Company
(85,496)
19,872
Earnings per share
From continuing operations:
Basic earnings per share (AUD)
Diluted earnings per share (AUD)
Total attributable to owners of the Company:
Basic earnings per share (AUD)
Diluted earnings per share (AUD)
22
22
22
22
11.4 cents
8.5 cents
11.4 cents
8.5 cents
(75.2 cents)
21.3 cents
(75.2 cents)
21.3 cents
*The above comparative information has been re-stated to separately show those operations as discontinued operations.
The Consolidated Statement of Comprehensive Income is to be read in conjunction with the Notes to the Consolidated
Financial Statements.
74
Consolidated Statement of Financial Position
As at 30 June 2017
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Total Current Assets
Non-Current Assets
Trade and other receivables
Advances to associates
Financial assets
Investments in associates accounted for using the equity method
Property, plant and equipment
Net deferred tax assets
Taxi plate licences
Goodwill
Intellectual property
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Loans and borrowings
Interest rate swaps
Current tax liabilities
Employee benefi ts
Total Current Liabilities
Non-Current Liabilities
Loans and borrowings
Employee benefi ts
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Share capital
Reserves
Retained earnings
Total Equity Attributable to Equity Holders of Cabcharge Australia Limited
*Certain amounts have been re-stated to reflect adjustments relating to Note 13.
Notes
31
6
7
6
26
8
10,11
12
13
14
15
16
17
18
19
18
19
20
20
2017
$'000
2016*
$'000
(Re-stated)
29,456
78,755
1,011
3,480
112,702
3,298
-
1,949
-
35,392
3,013
33,247
15,249
11,747
103,895
13,039
80,927
1,321
2,808
98,095
4,198
18,812
1,839
296,593
40,233
2,929
41,241
15,249
11,981
433,075
216,597
531,170
25,775
3,676
-
967
4,294
34,712
25,576
3,663
123
4,051
4,095
37,508
-
731
731
106,000
640
106,640
35,443
144,148
181,154
387,022
138,325
228
42,601
181,154
138,325
(4,885)
253,582
387,022
The Consolidated Statement of Financial Position is to be read in conjunction with the Notes to the Consolidated Financial
Statements.
75
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Consolidated Statement of Cash Flows
For the year ended 30 June 2017
Cash fl ows from operating activities
Receipts from customers and others
Payments to suppliers, licensees and employees
Dividends received
Interest received
Finance costs paid
Income tax paid
Net cash provided by operating activities
Cash fl ows from investing activities
Purchase of property, plant and equipment
Purchase of eftpos equipment not yet installed
Payments for development of intellectual property
Payments for other investments
Repayment from associates
Acquisition of business assets, net of cash acquired
Proceeds from sale of investments
Proceeds from sale of associate
Proceeds from sale of property, plant and equipment
Net cash provided by (used in) investing activities
Cash fl ows from fi nancing activities
Proceeds from borrowings
Repayment of borrowings
Dividends paid
Net cash (used in) fi nancing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
Notes
2017
$'000
2016
$'000
1,122,959
1,278,069
(1,073,829)
(1,213,337)
263
1,885
(3,698)
(9,735)
31
37,845
(8,630)
-
(3,371)
(110)
18,812
-
-
10
184,034
14,255
232
1,023
(5,544)
(13,917)
46,526
(9,779)
(5,791)
(3,059)
-
-
(1,932)
5,834
-
6
204,990
(14,721)
10,098
25,781
(116,085)
21
(120,431)
(226,418)
16,417
13,039
29,456
31
(44,317)
(24,086)
(42,622)
(10,817)
23,856
13,039
The Consolidated Statement of Cash Flows is to be read in conjunction with the Notes to the Consolidated Financial Statements.
76
Consolidated Statement of Changes in Equity
For the year ended 30 June 2017
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Balance at 1 July 2016
Total comprehensive income for the year
Loss for the year
Other comprehensive income
Share of other comprehensive income of associates,
net of tax
Effective portion of change in fair value of cash fl ow hedge,
net of tax
Net change in fair value of available-for-sale fi nancial assets
transferred to profi t or loss, net of tax
Total other comprehensive income
Total comprehensive income for the year
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners
Share-based payments
Dividends to equity holders
Total contributions by and distributions to owners
Total transactions with owners
Balance at 30 June 2017
Balance at 1 July 2015* (Re-stated)
Total comprehensive income for the year
Profi t for the year
Other comprehensive income
Share of associates' foreign exchange translation
differences, net of tax
Effective portion of change in fair value of cash fl ow hedge,
net of tax
Net change in fair value of available-for-sale fi nancial assets
transferred to profi t or loss, net of tax
Total other comprehensive income
Total comprehensive income for the year
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners
Share-based payments
Dividends to equity holders
Total contributions by and distributions to owners
Total transactions with owners
Balance at 30 June 2016* (Re-stated)
Notes
Share capital
$'000
Reserves
$'000
Retained
earnings
$'000
Total equity
$'000
138,325
(4,885)
253,582
387,022
-
-
-
-
-
-
-
-
-
-
138,325
138,325
-
-
-
-
-
-
-
-
-
-
-
(90,550)
(90,550)
4,959
86
9
5,054
5,054
-
-
-
-
4,959
86
9
5,054
(90,550)
(85,496)
59
-
59
-
(120,431)
(120,431)
59
59
228
768
(120,431)
(120,372)
(120,431)
(120,372)
42,601
181,154
252,052
391,145
-
25,616
25,616
(3,035)
603
(3,312)
(5,744)
(5,744)
-
-
-
-
25,616
(3,035)
603
(3,312)
(5,744)
19,872
91
-
91
91
-
91
(24,086)
(24,086)
(24,086)
(24,086)
(23,995)
(23,995)
138,325
(4,885)
253,582
387,022
21
21
*Certain amounts have been re-stated to refl ect adjustments relating to Note 13.
The Consolidated Statement of Changes in Equity is to be read in conjunction with the Notes to the Consolidated Financial Statements.
77
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Notes to the Consolidated Financial Statements
For the year ended 30 June 2017
1. Reporting entity
Cabcharge Australia Limited (the Company or Cabcharge) is a company domiciled in Australia. The address of the
Company’s registered office is 152-162 Riley Street, East Sydney. The Consolidated Financial Statements as at and for
the year ended 30 June 2017 comprises of the Company, its subsidiaries (together referred to as the Group) and the
Group’s interests in associates. The Group is a for-profit entity and during the year ended 30 June 2017 was primarily
involved in Taxi related services and route, school and charter bus services (through its interest in an associate).
2. Basis of preparation
a) Statement of compliance
The Consolidated Financial Statements are general purpose financial statements which have been prepared in
accordance with Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board
(AASB) and the Corporations Act 2001. The Consolidated Financial statements comply with International Financial
Reporting Standards (IFRSs) adopted by the International Accounting Standards Board (IASB).
The Consolidated Financial Statements were authorised for issue by the Board of Directors on 28 August 2017.
b) Basis of measurement
The Consolidated Financial Statements have been prepared on the historical cost basis except for available-for-sale
financial assets (listed entities) and derivative financial instruments, which are measured at fair value.
c) Functional and presentation currency
These Consolidated Financial Statements are presented in Australian dollars, which is the Company’s functional currency
and the functional currency of the majority of the Group entities.
The Company is of a kind referred to in ASIC Corporation Instrument 2016/191 (Rounding in Financial/Directors’ Reports)
and in accordance with that Instrument, amounts in the Consolidated Financial Statements and the Directors’ Report
have been rounded off to the nearest thousand dollars, unless otherwise stated.
d) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange
rates at the dates of the transactions.
e) Use of estimates and judgements
The preparation of Consolidated Financial Statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in any future periods affected.
In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting
policies that have the most significant effect on the amount recognised in the Consolidated Financial Statements are
described in the following notes:
Note 11 Associated companies
Note 12 Property, plant and equipment
Note 14 Taxi plate licences
Note 15 Goodwill
Note 16 Intellectual property
Note 19 Employee benefits
f) Transactions eliminated on consolidation
Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are eliminated
in preparing the Consolidated Financial Statements. Unrealised gains arising from transactions with equity accounted
investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses
are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. Gains
and losses are recognised when the contributed assets are consumed or sold by the equity accounted investees or, if not
consumed or sold by the equity accounted investee, when the Group’s interest in such entities is disposed of.
78
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
g) New standards and interpretations not yet adopted
A number of new accounting standards and interpretations have been published that are not mandatory for 30 June 2017
reporting period and have not been early adopted by the Group. The Group’s assessment of the impact of these new
standards and interpretations is set out below:
Accounting Standard
Details of Accounting Standard
AASB 9
Financial Instruments
AASB 15
Revenue from Contracts
with Customers
AASB 16
Leases
AASB 9, published in July 2014, replaces the existing
guidance in AASB 139 Financial Instruments: Recognition
and Measurement. AASB 9 includes revised guidance on
the classifi cation and measurement of fi nancial instruments,
including a new expected credit loss model for calculating
impairment on fi nancial assets, and the new general
hedge accounting requirements. It also carries forward
the guidance on recognition and derecognition of fi nancial
instruments from AASB 139.
AASB 9 is effective for annual reporting periods beginning
on or after 1 January 2018, with early adoption permitted.
AASB 15 establishes a comprehensive framework for
determining whether, how much and when revenue
is recognised. It replaces existing revenue recognition
guidance, including AASB 118 Revenue and AASB 111
Construction Contracts. AASB 15 is effective for annual
reporting periods beginning on or after 1 January 2018,
with early adoption permitted.
AASB 16 removes the classifi cation of leases as either
operational leases or fi nance leases. It will result in almost
all leases being recognised on the balance sheet. Under
the new standard an asset (the right to use the leased item)
and a fi nancial liability to pay rentals are recognised.
AASB 16 is effective for annual reporting periods beginning
on or after 1 January 2019, with early adoption permitted.
Impact on Consolidated
Financial Statements
The Group is in the process of accessing
the potential impact on its consolidated
fi nancial statements resulting from the
application of AASB 9 and believes that
there will be no material impact.
The Group is in the process of accessing
the potential impact on its consolidated
fi nancial statements resulting from the
application of AASB 15 and believes that
there will be no material impact.
The Group is in the process of
accessing the potential impact on
its consolidated fi nancial statements
resulting from the application of AASB
16 based on its position as at 30
June 2017 and subsequent events.
Based on its preliminary assessment
the Group expects that the impact on
its consolidated statement of fi nancial
position will be an increase at least $8
million in the assets and liabilities. The
Group’s assessment of the potential
impact on its consolidated fi nancial
statement will continue to be updated
until the date of application.
There are no other standards that are not yet effective and that are expected to have a material impact on the entity in the current or
future reporting periods and on foreseeable future transactions.
3. Revenue & Turnover
Accounting policies
Taxi service fee income
Taxi service fee income is derived from Taxi payments processed through the Cabcharge Payment System and is disclosed
net of Goods and Services Tax and third party credit card fees. As the Group acts in the capacity of an agent the revenue
represents only the fee received on the transaction although the Group is exposed to credit risk on the full amount of the
Taxi payments proceeds. Taxi service fee income is recognised at the time the payment is processed.
Network subscription fee and Taxi plate licence incomes
Network subscription fee and Taxi plate licence incomes were billed every 28 days in advance and changed to a calendar
month basis in advance commencing 1 May 2016. Revenue is recognised on a straight-line basis over the period the
services are provided. Operating revenue receipts relating to the period beyond the current financial year are shown in
the Consolidated Statement of Financial Position as unearned revenue under the heading of Current liabilities - Trade and
other payables, refer to Note 17.
79
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Other Taxi related services income
Other Taxi related services income is generated from fit-out of vehicles as Taxis, repair and rental of in-vehicle Taxi
equipment. It was billed every 28 days in arrears and changed to a calendar month basis in arrears commencing 1 May
2016. It is recognised when services are rendered.
Vehicle financing lease and insurance loan income
Interest earned on finance leases and insurance loans is recognised as vehicle financing lease and insurance loan income
on a basis reflecting a constant periodic return based on the lessor’s net investment outstanding in respect of the finance
lease.
Taxi subsidy scheme revenue
The Taxi Subsidy Scheme (TSS) revenue is derived from providing services to issue TSS cards and process Taxi travel
transactions of TSS participants in some States and Territories. It is billed on monthly basis in arrears and recognised
when services are rendered.
School bus route services revenue
School bus route services revenue is based on contracts for these services with State Government. It is billed weekly in
arrears and recognised when services are rendered.
Revenues
Taxi service fee income
Network subscription fee income
Brokered Taxi plate licence income
Owned Taxi plate licence income
Other Taxi related services income
Vehicle financing lease and insurance loan income
School bus route services income
Taxi Subsidy Scheme Revenue
Other revenue
Total operating revenue
Total turnover
Non-operating activities
Gain on disposal of property, plant and equipment
Total other income
Total turnover
2017
$’000
51,091
56,912
21,015
4,959
4,156
5,382
2,177
1,863
4,394
2016
$’000
62,446
57,853
22,681
6,873
5,337
5,990
2,068
1,683
3,877
151,949
168,808
1,104,035
1,262,683
1,689
1,689
14,133
14,133
Total turnover does not represent revenue in accordance with Australian Accounting Standards. Total turnover represents
the value of Taxi hire charges (fares) paid through the Cabcharge Payment System plus Cabcharge’s Taxi service fee plus
the Group’s revenue from other sources. Cabcharge’s credit risk is based on turnover rather than revenue.
80
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2017 C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
4. Finance income
Accounting policies
Finance income comprises interest income on funds invested (including available-for-sale financial assets), foreign
currency gains, gains on the disposal of available-for-sale financial assets, gains on hedging instruments that are
recognised in profit or loss and reclassifications of amounts previously recognised in other comprehensive income.
Interest income is recognised as it accrues in profit or loss, using the effective interest method.
Finance Income
Net gain on disposal of available-for-sale fi nancial assets
Gain on hedging instruments
Interest Income
Total fi nance income
5. Income tax expense
Accounting policies
2017
$’000
2016
$’000
-
419
1,466
1,885
4,493
-
1,023
5,516
Income tax expense comprises current and deferred tax. Income tax expense is recognised in profi t or loss except to the extent
that it relates to a business combination or items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Cabcharge and its wholly owned Australian resident subsidiaries form a tax consolidated group. The current tax rate
applicable to the Group is 30%.
Current income tax expense
Current year
Adjustment for prior years
Deferred tax expense
Origination and reversal of temporary differences
Total income tax expense in the Consolidated Statement of Comprehensive Income
Numerical reconciliation between tax expense and pre-tax profi t
Profi t before tax from continuing operations
Prima-facie income tax using the corporate tax rate of 30% (2016: 30%)
Add tax effect of:
Non-deductible depreciation
Non-allowable impairment charges
Other non-allowable items
Less tax effect of:
Tax exempt dividends
Adjustment for prior years
Income tax expense
Effective tax rate on pre-tax profi t from continuing operations
2017
$’000
2016
$’000
9,865
18,327
593
(524)
10,458
17,803
123
10,581
(1,419)
16,384
24,282
26,664
7,285
7,999
151
2,483
142
(73)
593
10,581
43.6%
588
8,304
60
(43)
(524)
16,384
61.4%
81
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
6. Trade and other receivables
Accounting policies
Trade receivables are recognised initially at the value of the invoice sent to the customer and subsequently at the amounts
considered recoverable (amortised cost). The carrying value of trade and other receivables is considered to approximate
fair value.
Finance lease receivables
When a Group entity is the lessor in a lease agreement that transfers substantially all of the risks and rewards incidental
to ownership of an asset to the lessee, the arrangement is classified as a finance lease and a receivable equal to the net
investment in the lease is recognised and presented within trade and other receivables.
Current
Trade receivables
Accumulated impairment losses
Finance lease receivables
Receivables from sales of property
Receivables from sales of investment in associates
Other receivables
Non-current
Finance lease receivables
Movement in allowance for impairment
Balance at the beginning of the year
Doubtful debts (recognised)
Amount written off as uncollectable
Balance at the end of the year
2017
$’000
2016
$’000
55,090
(2,781)
3,339
3,000
13,268
6,839
78,755
3,298
3,298
(2,387)
(849)
455
(2,781)
52,292
(2,387)
5,067
18,101
-
7,854
80,927
4,198
4,198
(914)
(3,395)
1,922
(2,387)
The allowance for impairment reflects both specific doubtful debt provision and collective loss impairment (refer to Note
32c). Receivables that are past due but not impaired are those receivables the Directors believe to be fully recoverable and
as a result, have not recognised any amount in the allowance for impairment for them.
Ageing of trade receivables
Not past due
Past due 1 - 30 days
Past due 31 - 60 days
Past due 61 - 90 days
Past due over 90 days
2017 year
Gross
$’000
Impairment
$’000
36,414
11,839
4,020
1,122
1,696
(50)
(12)
(1,027)
(706)
(986)
Net
$’000
36,364
11,827
2,993
416
710
2016 year
Gross
$’000
Impairment
$’000
44,345
4,748
1,038
383
1,778
(6)
(39)
(181)
(383)
(1,778)
(2,387)
Net
$’000
44,339
4,709
857
-
-
49,905
For additional information in relating to credit risk, refer to Note 32.
55,091
(2,781)
52,310
52,292
82
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2017
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Finance leases of the Group are receivable as follows:
Less than one year
Between one and fi ve years
2017
2016
Future
minimum
lease
payments
$’000
3,978
3,781
7,759
Present value
of minimum
lease
payments
$’000
3,339
3,298
6,637
Interest
$’000
639
483
1,122
Future
minimum
lease
payments
$’000
5,900
4,724
Interest
$’000
833
526
10,624
1,359
Present value
of minimum
lease
payments
$’000
5,067
4,198
9,265
There have been no unguaranteed residual values. No lease payments are considered uncollectable at the reporting date.
No credit terms have been re-negotiated with customers. Collateral is held in the case of finance lease receivables, where
the Group holds a lien over the leased asset. The market value of such collateral is not expected to vary materially from
the net investment value of the finance lease receivables.
There has been no change in credit risk policies during the financial year.
7. Inventories
Accounting policies
Inventories are measured at the lower of cost and net realisable value. Costs are assigned on a first-in, first-out basis and
include direct materials and the cost of purchase. Net realisable value is the estimated selling price in the ordinary course
of business, less the estimated costs of completion and selling expenses.
Parts, safety cameras and sundries - at cost
8. Financial assets
Accounting policies
2017
$’000
1,011
1,011
2016
$’000
1,321
1,321
Available-for-sale listed investments are recognised initially and subsequently at market price. Unrealised gains and
losses arising from changes in market price are recognised in other comprehensive income and presented in the fair value
reserve in equity. When an investment is derecognised, the cumulative gain or loss in equity is transferred to profit or loss.
Available-for-sale unlisted investments are recognised initially and subsequently at cost as the fair value of these securities
cannot be measured reliably. These unlisted investments are primarily investments in unrelated Taxi Network operations
where the shareholding held by the Group is not sufficient to demonstrate significant influence. The Group has no intention
to dispose of these unlisted investments in the foreseeable future.
Unlisted investments - available-for-sale
Shares in other corporations - at cost
2017
$’000
1,949
1,949
2016
$’000
1,839
1,839
83
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
9. Business combination
Accounting policies
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on
which control is transferred to the Group.
The Group measures goodwill at the acquisition date as:
• The fair value of the consideration transferred; plus
• The recognised amount of any non-controlling interests in the acquiree; plus
• If the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
• The net recognised amount of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such
amounts are generally recognised in profit or loss.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in
connection with a business combination are expensed as incurred.
On 2 November 2015 the Group acquired the business and assets of the Dandenong Taxis for cash consideration of
$1,932,000. Dandenong Taxis provides call centre services to around 110 cabs.
Property, plant and equipment
Deferred tax assets
Intellectual property
Employee entitlements
Trade and other payables
Fair value of identifi able net assets acquired
Consideration paid, satisfi ed in cash
Goodwill (refer to Note 15)
10. Discontinued operations
2016
$’000
107
29
1,675
(95)
(1)
1,715
(1,932)
(217)
On 21 December 2016 the Group entered into an agreement to sell its investment in ComfortDelGro Cabcharge Pty Ltd
(CDC). The disposal of CDC was completed on 15 February 2017.
On 28 June 2017 the Group entered into an agreement to sell its investment in CityFleet Networks Ltd in the UK (CFN).
The equity accounting profit ceases from the date of the agreement to sell.
The investments in CDC and CFN were not previously classified as discontinued operations. The comparative consolidated
statement of comprehensive income has been restated to show the discontinued operations separately from continuing
operations.
84
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2017 Results of discontinued operations
Share of profi t of discontinued operation
- ComfortDelGro Cabcharge Pty Ltd
- CityFleet Networks Ltd
Impairment charge on CityFleet Networks Ltd
Impairment loss on write-down to fair value less costs to sell
- ComfortDelGro Cabcharge Pty Ltd
Loss on sale of:
- CityFleet Networks Ltd
(Loss) / Profi t from discontinued operation, net of tax
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
2017
$’000
2016
$’000
8,218
(582)
(20,200)
(77,904)
(13,783)
(104,251)
14,500
836
-
-
-
15,336
Reconciliation of Impairment loss on write-down to fair value less costs to sell and loss on sale of
associates
2017
$’000
CDC
186,000
(1,966)
184,034
260,003
1,935
(77,904)
CFN
13,268
-
13,268
21,850
5,201
(13,783)
Sale price
Less: costs to sell
Net consideration
Carrying amount of the investment
Transfer from reserves
Total
Cash flows of discontinued operations
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase in cash and cash equivalents
Total
199,268
(1,966)
197,302
281,853
7,136
(91,687)
2016
$’000
-
-
-
-
2017
$’000
-
184,034
-
184,034
85
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
11. Associated companies
Accounting policies
Associates (equity accounted investees)
Associates are those entities in which the Group has signifi cant infl uence, but not control, over the fi nancial and operating
policies. Signifi cant infl uence is presumed to exist when the Group holds between 20 and 50 percent of the voting power of
another entity. Investments in associates are accounted for using the equity method (equity accounted investees) and are
initially recognised at cost. The Consolidated Financial Statements include the Group’s share of the profi t or loss and other
comprehensive income of equity accounted investees, after adjustments to align the accounting policies with those of the
Group, from the date that signifi cant infl uence commences until the date that signifi cant infl uence ceases. When the Group’s
share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest (including any long-
term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has
an obligation or has made payments on behalf of the investee.
The financial statements or management accounts of associates are used by the Group to apply the equity method.
Reporting dates of the associate vary from that of the Group, but management accounts for the period to the Group’s
balance date are used for equity accounting.
Where there has been a change recognised directly in an associate’s other comprehensive income, the Group
recognises its share of any changes and discloses this in Other Comprehensive Income in the Consolidated Statement of
Comprehensive Income.
Foreign operations
The income and expenses of foreign operations are translated to Australian dollars at average exchange rates in the
month of the transactions.
Foreign currency differences are recognised in other comprehensive income and presented in the foreign currency
translation reserve in equity (FCTR).
When a foreign operation is disposed of in its entirety or partially such that significant influence or joint control is lost, the
cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the
gain or loss on disposal. When the Group disposes of only part of an associate or joint venture while retaining significant
influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.
Foreign exchange gains and losses arising from a monetary item receivable from or payable to a foreign operation, the
settlement of which is neither planned nor likely in the foreseeable future, are considered to form part of a net investment
in a foreign operation and are recognised directly in other comprehensive income and presented in the FCTR in equity
(refer Note 20e).
Impairment testing
At each balance date, the Group reviews the carrying amounts of its associated companies to determine whether there
is any indication that those assets have suffered any impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible
to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-
generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that is appropriate for the currency
generated by the cash-generating unit and reflects current market assessments of the time value of money.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount,
the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is
recognised immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to
the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised for the asset
(cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
86
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2017 C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Name
ComfortDelGro
Cabcharge Pty Ltd
Principal Activities
Route, school
and charter bus
services
Ownership Interest
Carrying amount of
investment
Country of
Incorporation
Reporting
Period
2017
%
2016
%
2017
$’000
2016
$’000
Australia
31 December
-
49
-
251,786
CityFleet Networks Ltd
Taxi related
services, bus &
coach services
United
Kingdom
31 December
-
49
-
-
44,807
296,593
a) Movements during the year in equity accounted investment in associated companies
Balance at beginning of the fi nancial year
Share of associates’ profi t after income tax
- ComfortDelGro Cabcharge Pty Ltd
- CityFleet Networks Ltd
Foreign exchange translation differences
- ComfortDelGro Cabcharge Pty Ltd
- CityFleet Networks Ltd
Capital reserve
- ComfortDelGro Cabcharge Pty Ltd
Impairment loss on write-down to fair value less costs to sell
- ComfortDelGro Cabcharge Pty Ltd
Loss on sale of associate
- CityFleet Networks Ltd
Net consideration on sale of associate
- ComfortDelGro Cabcharge Pty Ltd
- CityFleet Networks Ltd
Impairment
- CityFleet Networks Ltd
2017
$’000
2016
$’000
296,593
284,292
8,218
(582)
1,020
3,026
914
(77,904)
(13,783)
(184,034)
(13,268)
(20,200)
14,500
836
-
(3,035)
-
-
-
-
-
-
Balance at end of the fi nancial year
-
296,593
b) Equity accounted profits of associates are broken down as follows:
Share of associates’ profi t before income tax expense
- ComfortDelGro Cabcharge Pty Ltd
- CityFleet Networks Ltd
Share of associates’ income tax expense
- ComfortDelGro Cabcharge Pty Ltd
- CityFleet Networks Ltd
Share of associates’ profi t after income tax
11,436
20,955
(525)
972
(3,219)
(56)
(6,455)
(136)
7,636
15,336
87
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
c) Summarised presentation of aggregate assets, liabilities and performance of associates
(all 100% figures)
ComfortDelGro Cabcharge Pty Ltd
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Revenues
Profi t after income tax of associates
CityFleet Networks Ltd
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Revenues
Profi t after income tax of associates
d) Impairment considerations
CityFleet Networks Ltd
2016
$’000
123,637
933,054
1,056,691
(84,083)
(458,706)
(542,789)
513,902
352,993
29,591
36,952
21,897
58,849
(8,748)
(1,044)
(9,792)
49,057
115,581
1,707
The Group assessed the recoverable amount of the investment in CFN at 31 December 2016 based on the historical
operating performance and independent sources of expected UK Taxi industry future performance. After assessing the
recoverable amount of this investment based on its value-in-use, using a discounted projected cash flow model, was
determined to be lower than the carrying amount, resulting in the impairment charge of $20,200,000 (FY16: $nil). In
assessing the recoverable amount of this investment, at 31 December 2016 the Group applied an average revenue growth
rate of 0.43% (FY16: 1.9%) which resulted in an average free cash flow growth rate of 0.43% for each of the next five
years (FY16: 10.1%), a long-term growth rate of 1% into perpetuity (FY16: 1.8%), and a pre-tax discount rate of 9.1%
(FY16: 8.9%). The discount rate reflected UK market assumptions at the reporting date for the risk free rate, the market
risk premium, the cost of debt and the beta.
12. Property, plant and equipment
Accounting policies
Depreciation
Items of property (excluding freehold land), plant and equipment are depreciated at rates based upon their expected useful
lives using the straight-line method. Leased assets are depreciated over the shorter of the lease term and their useful lives.
The estimated useful lives of each major class of asset for the current and comparative periods are:
Buildings
40 to 50 years
Furniture, fittings, plant and equipment
3 to 8 years
EFTPOS Equipment
4 to 8 years
Depreciation methods, useful lives and residual values are reassessed at each reporting date.
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment
losses. Cost includes expenditure that is directly attributable to the acquisition of the item.
88
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2017
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds
from disposal with the carrying amount of property, plant and equipment and are recognised net within other income/other
expense in profit or loss. When revalued assets are sold, the amounts included in the revaluation reserve are transferred to
retained earnings.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item
can be measured reliably. All other repairs and maintenance are charged to the profit or loss during the financial period in
which they are incurred.
2017 year:
Cost
Opening balance
Additions
Reclassification
Disposals
Closing balance
Accumulated depreciation
Opening balance
Depreciation expense
Disposals
Closing balance
Net Book Value
Opening balance
Closing balance
2016 year:
Cost
Opening balance
Additions
Additions through acquisition
Reclassification
Disposals
Closing balance
Accumulated depreciation
Opening balance
Depreciation expense
Reclassification
Disposals
Closing balance
Net Book Value
Opening balance
Closing balance
Furniture,
fi ttings, plant
and
equipment
$’000
Land &
buildings
$’000
Eftpos
equipment
$’000
Total
$’000
13,617
658
15
(1,659)
12,631
49,226
1,755
(15)
(339)
34,064
6,217
-
-
96,907
8,630
-
(1,998)
50,627
40,281
103,539
(3,416)
(36,551)
(16,707)
(6,105)
(5,596)
(56,674)
(11,963)
147
-
490
(262)
343
(3,335)
(42,509)
(22,303)
(68,147)
10,201
12,675
9,296
8,118
17,357
17,978
40,233
35,392
17,691
43,970
-
-
240
(4,314)
4,049
106
1,744
(643)
25,057
11,521
-
-
(2,514)
86,718
15,570
106
1,984
(7,471)
13,617
49,226
34,064
96,907
(3,728)
(29,382)
(14,583)
(47,693)
(258)
(7,140)
(4,387)
(11,785)
-
570
(480)
451
-
2,263
(480)
3,284
(3,416)
(36,551)
(16,707)
(56,674)
13,963
10,201
14,588
12,675
10,474
17,357
39,025
40,233
89
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
13. Deferred tax assets and liabilities
Accounting policies
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognised for:
• temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination
and that affects neither accounting nor taxable profit or loss;
• temporary differences relating to investments in subsidiaries and associates to the extent that the Group is able to
control the timing or reversal of the temporary differences and it is probable that they will not reverse in the foreseeable
future; and
• taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse,
using tax rates enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets,
and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities,
but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised
simultaneously.
Deferred tax assets are recognised to the extent that it is probable that future tax profits will be available against which
deductible temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced
to the extent that it is no longer probable that the related tax benefit will be realised.
The amount of benefi ts brought to account or which may be realised in the future is based on the assumption that no adverse
change will occur in income taxation legislation and the anticipation that the Group will derive suffi cient future assessable
income to enable the benefi t to be realised and comply with the conditions of deductibility imposed by the law.
Recognised deferred tax assets and liabilities and the movements in these balances are set out below:
2017 year:
Accumulated impairment losses - receivables
Provision for employee entitlements
Accruals
Tax losses
Interest rate derivatives
Prepayments
Revaluations of available-for-sale fi nancial assets
Other taxable temporary differences
Opening
balance
$’000
Charged to
income
$’000
Charged to
equity
$’000
Acquisitions
$’000
Closing
balance
$’000
314
1,449
221
1,570
36
(348)
8
(321)
2,929
118
87
(89)
-
-
7
-
-
123
-
-
-
-
(36)
-
(8)
5
(39)
-
-
-
-
-
-
-
-
-
432
1,536
132
1,570
-
(341)
-
(316)
3,013
90
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2017 C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Opening
balance
$’000
Charged to
income
$’000
Charged to
equity
$’000
Acquisitions
$’000
Closing
balance
$’000
2016 year:*
(Re-stated)
Accumulated impairment losses - receivables
Provision for employee entitlements
Accruals
Tax losses
Interest rate derivatives
Prepayments
313
1,537
173
1,570
295
(416)
1
(117)
48
-
-
68
Revaluations of available-for-sale fi nancial assets
(1,411)
1,419
Other taxable temporary differences
(321)
1,740
-
1,419
(259)
-
-
-
-
(259)
-
-
-
-
29
-
-
-
-
-
-
29
314
1,449
221
1,570
36
(348)
8
(321)
2,929
* A deferred tax asset was recognised for the difference between the tax cost base and accounting cost base related to a business
combination. The Group has determined this asset should not previously have been considered recoverable and has restated
comparative information accordingly. The result of this restatement was a decrease in net deferred tax assets and retained earnings at
30 June 2016 of $1,890,000.
14. Taxi plate licences
Accounting policies
Taxi and other licences acquired separately are reported at cost less accumulated amortisation and impairment losses.
Taxi and other licences with finite useful lives are amortised on a straight-line basis over their estimated useful lives of 50
years in current and comparative periods depending on the licence. Taxi and other licences with indefinite useful lives are
not amortised. Such assets are tested for impairment in accordance with the policy.
Impairment testing
Taxi plate licences with indefinite useful lives are tested for impairment annually, and whenever there is any indication that
the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised
immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to
the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised for the asset
(cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
91
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
a) Composition and movement
2017 year:
Cost
Opening balance
Additions
Impairment
Disposals
Closing balance
Accumulated amortisation
Opening balance
Amortisation expense
Disposals
Closing balance
Net book value
Opening balance
Closing balance
2016 year:
Cost
Opening balance
Additions
Impairment
Disposals
Closing balance
Accumulated amortisation
Opening balance
Amortisation expense
Disposals
Closing balance
Net book value
Opening balance
Closing balance
Indefi nite life
Finite life
50 year
renewable
$’000
$’000
10 year
$’000
Total
$’000
37,365
-
(7,900)
-
29,465
5,600
3,319
46,284
-
-
-
-
-
-
-
(7,900)
-
5,600
3,319
38,384
-
-
-
-
(1,724)
(3,319)
(5,043)
(94)
-
-
-
(94)
-
(1,818)
(3,319)
(5,137)
37,365
29,465
3,876
3,782
-
-
41,241
33,247
65,045
5,600
3,319
73,964
-
(27,680)
-
-
-
-
-
-
-
-
(27,680)
-
37,365
5,600
3,319
46,284
-
-
-
-
(1,630)
(94)
-
(1,414)
(1,905)
-
(3,044)
(1,999)
-
(1,724)
(3,319)
(5,043)
65,045
37,365
3,970
3,876
1,905
-
70,920
41,241
b) Impairment considerations
After assessing the recoverable amount of indefinite life Taxi plate licences based on value-in-use, using a discounted
projected cash flow model, the Group determined that an impairment charge of $7,900,000 was required
(FY16: $27,680,000). In assessing the recoverable amount of such licences, the Group has applied average earnings
growth forecasts of between 0% to 2% (FY16: between -3.0% to 2.2%) for each of the next five years, long term
growth rates of 2% (FY16: 2.35%) into perpetuity and a pre-tax discount rate of 12.9% (FY16: 11.8%). This long term
growth rate reflects the general estimated long term Australian economic growth and the discount rate is based on
comparable industry market assumptions for the risk free rate, the market risk premium, the cost of debt, the beta and
an additional risk weighting for these assets. An increase of 100 basis points in pre-tax discount rate would result in a
further impairment of $606,000 and a decrease of 100 basis points in the long term growth rate would result in a further
impairment of $849,000.
92
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2017
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
15. Goodwill
Accounting policies
Goodwill arising on the acquisition of a subsidiary is included in intangible assets. For the measurement of goodwill
at initial recognition, refer to Note 9. Goodwill is subsequently measured at cost less accumulated impairment losses.
In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the
investment, refer to Note 11.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to
benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested
for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable
amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to
reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the
basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a
subsequent period.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on
disposal.
Impairment considerations
Goodwill is allocated to the Group’s Cash Generating Units (CGU) as set out below and assessment of the recoverable
amount for each CGU has been performed on a value-in-use basis using discounted cash flow projections. To determine
value-in-use, free cash flows have been projected for five years based on budgeted EBITDA for the forthcoming year plus
2.1% (FY16: 2.35%) annual growth and a long term growth rate of 2.1% after 5 years (FY16: 2.35%). A pre-tax discount
rate of 11.6% (FY16: 10.4%) was applied in determining recoverable amount. This annual growth rate is based on the
Australian Consumer Price Index. This long term growth rate reflects the general estimated long term Australian economic
growth and the discount rate is based on comparable industry market assumptions for the risk free rate, the market risk
premium, the cost of debt and the beta. For the purpose of impairment testing, goodwill is allocated to groups of CGU,
according to business operation and / or geography of operation, which represent the lowest level at which the goodwill is
monitored for internal management purposes. An increase of 100 basis points in pre-tax discount rate would not result in
any impairments and a decrease of 100 basis points in the long term growth rate also would not result in any impairments.
Cabcharge Australia Limited
Yellow Cabs South Australia
Combined Communications Network
Black Cabs Combined
2017 year:
Cost
Opening balance
Additions through acquisition
Closing balance
2016 year:
Cost
Opening balance
Additions through acquisition
Closing balance
Goodwill Allocated
Impairment loss
CGU
CAB
YSA
CCN
BCC
2017
$’000
3,923
1,482
3,572
6,272
2016
$’000
3,923
1,482
3,572
6,272
15,249
15,249
2017
$’000
2016
$’000
-
-
-
-
-
-
-
-
-
-
CAB
$’000
YSA
$’000
CCN
$’000
BCC
$’000
Total
$’000
3,923
1,482
3,572
6,272
15,249
-
-
-
-
-
3,923
1,482
3,572
6,272
15,249
3,923
1,482
3,572
6,055
15,032
-
-
-
217
217
3,923
1,482
3,572
6,272
15,249
For more information about the goodwill additions through acquisition, refer to Note 9.
93
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
16. Intellectual property
Accounting policies
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination primarily relating to customer contracts, trademarks and brand names are
identifi ed and recognised separately from goodwill where they satisfy the defi nition of an intangible asset and their fair values
can be measured reliably. The cost of such intangible assets is their fair value at the acquisition date.
Trademarks and brand names are considered to have indefinite useful lives and such assets are tested for impairment in
accordance with the policy below.
Capitalised development costs
Development activities involve a plan or design for the production of new or substantially improved products and
processes. Development expenditure is capitalised only if development costs can be measured reliably, the product or
process is technically and commercially feasible, future economic benefits are probable, and the Group intends to and has
sufficient resources to complete development and to use or sell the asset. The expenditure capitalised includes the cost of
materials, direct labour, borrowing and overhead costs that are directly attributable to preparing the asset for its intended
use. Other development expenditure is recognised in profit or loss when incurred.
Capitalised development expenditure is measured at cost less accumulated amortisation and impairment losses.
Amortisation
Items of intellectual property are amortised at rates based upon their estimated useful lives using the straight-line method,
and this amortisation is recognised in profit or loss.
The estimated useful lives for current and comparative periods are as follows:
Customer contracts
5 to 8 years
Capitalised development costs 4 to 8 years
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
Impairment testing
Intangible assets with indefinite useful lives are tested for impairment annually, and whenever there is any indication that
the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised
immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to
the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised for the asset
(cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
94
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2017
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Impairment considerations
After assessing the recoverable amount of trademarks and brand names based on value-in-use, using a discounted
projected cash flow model, the Group determined that an impairment charge of $377,000 (FY16: $ nil) was required. In
assessing the recoverable amount of trademarks and brand names, the Group has applied a pre-tax discount rate of
13.3% (FY16: 10.4%), an annual growth rate of between -0.4% to 1.1% (FY16: 2.35%) over the next five years and a long
term growth rate of 1.1% (FY16: 2.35%).
Indefi nite life
Finite life
Trademarks
$’000
Customer
contracts
$’000
Capitalised
development
costs
$’000
2017 year:
Cost
Opening balance
Additions - internally developed
Impairment
Written-off
Closing balance
Accumulated amortisation
Opening balance
Amortisation expense
Disposals
Closing balance
Net book value
Opening balance
Closing balance
2016 year:
Cost
Opening balance
Additions - internally developed
Additions - through acquisition
Disposals
Closing balance
Accumulated amortisation
Opening balance
Amortisation expense
Disposals
Closing balance
Net book value
Opening balance
Closing balance
1,850
-
(377)
-
1,473
-
-
-
-
1,850
1,473
1,850
-
-
-
1,850
-
-
-
-
1,850
1,850
Total
$’000
31,331
3,371
(377)
(1,577)
32,748
(19,350)
(1,651)
-
2,835
-
-
-
2,835
(895)
(335)
-
26,646
3,371
-
(1,577)
28,440
(18,455)
(1,316)
-
(1,230)
(19,771)
(21,001)
1,940
1,605
1,160
-
1,675
-
2,835
(529)
(366)
-
(895)
631
1,940
8,191
8,669
11,981
11,747
23,587
3,059
-
-
26,597
3,059
1,675
-
26,646
31,331
(16,937)
(1,518)
-
(17,466)
(1,884)
-
(18,455)
(19,350)
6,650
8,191
9,131
11,981
95
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
17. Trade and other payables
Accounting policies
Trade and other payables are recognised at the fair value of the invoice received from the supplier. The carrying value of
trade and other payables is considered to approximate fair value.
Trade payables
Security deposit
Other payables and accruals
Unearned revenue
18. Loans and borrowings
Accounting policies
2017
$’000
9,243
5,119
4,940
6,473
2016
$’000
7,376
6,301
5,585
6,314
25,775
25,576
Loans and borrowings are recognised initially at fair value, being the consideration received, less directly attributable
transaction costs, with subsequent measurement at amortised cost using the effective interest rate method.
a) Composition
Unsecured loans
Bank borrowings
b) Disclosure in the Consolidated Statement of Financial Position
Current liability
Non-current liability
2017
$’000
3,676
2016
$’000
3,663
-
106,000
3,676
109,663
3,676
3,663
-
106,000
3,676
109,663
The unsecured loans are at-call and bear variable interest rates, currently 2% per annum. All bank borrowings are
denominated in Australian dollars. The bank borrowings are secured by a registered first mortgage over all commercial
properties and first registered charge over the fixed and floating assets of the Group. The current bank borrowing facility is
a revolving facility and expires on 1 July 2019.
Bank borrowings bear interest at rates from 3.2% to 3.6%.The Company reduced the finance facility limits from $200
million to $100 million during the year.
For more information about the Group’s exposure to interest rate and liquidity risk, refer to Note 32.
19. Employee benefits
Accounting policies
Wages, salaries and annual leave
Liabilities for employee benefits for wages, salaries and annual leave represent the present obligations resulting from
employees’ services provided up to reporting date. The provisions have been calculated at undiscounted amounts based
on expected wage and salary rates that the Group expects to pay as at reporting date and include related on-costs, such
as workers’ compensation insurance and payroll tax. A liability is recognised in other payables for the amount expected to
be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to
pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
96
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2017 C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Long service leave
The provision for employee benefits for long service leave represents the present value of the estimated future cash
outflows to be made by the Group resulting from employees’ services provided up to the reporting date. The provision is
calculated using expected future increases in wage and salary rates including related on-costs and expected settlement
dates based on turnover history and is discounted using the rates attaching to corporate bonds at reporting date which
most closely match the terms of maturity of the related liabilities.
Superannuation plans
The Group contributes to defined contribution superannuation funds for the benefit of employees or their dependants
on retirement, resignation, disablement or death. The Group contributes a percentage of individual employees’ gross
income and employees may make additional contributions on a voluntary basis. Obligations for contributions to defined
contribution superannuation funds are recognised as an employee benefits expense in profit or loss in the periods during
which services are rendered by employees.
a) Composition
Annual leave provision
Long service leave provision
b) Disclosure in the Consolidated Statement of Financial Position
Current provision
Non-current provision
2017
$’000
2,253
2,772
5,025
4,294
731
5,025
2016
$’000
2,178
2,557
4,735
4,095
640
4,735
c) Defined contribution superannuation funds
Contributions to defi ned contribution superannuation funds
3,033
2,892
97
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
20. Share capital and Reserves
Accounting policies
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share
options are recognised as a deduction from equity, net of any tax effects.
Foreign Currency translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of
foreign operations.
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging
instruments related to hedged transactions that have not yet occurred.
Fair value reserve
The fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets until the
investment is derecognised or impaired.
Employee Compensation Reserve
The fair value of Long Term Incentive plans granted is recognised in the employee compensation reserve over the vesting
period.
a) Composition and movement in issued capital (number of shares)
Composition of issued capital
Fully paid ordinary shares
b) Composition and movement in share capital (dollars)
Composition of issued capital
Fully paid ordinary shares
c) Options over unissued shares
2017
number
2016
number
120,430,683
120,430,683
2017
$’000
2016
$’000
138,325
138,325
No options were granted during the year and there were no options outstanding at the end of the financial year.
Performance rights were awarded during the year and they may be converted into ordinary shares, subject to Board’s
discretion.
d) Terms and conditions applicable to ordinary shares
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per
share at shareholders’ meetings. In the event of winding up of the Company, ordinary shareholders rank after all other
shareholders and creditors and are fully entitled to any proceeds of liquidation. The Company does not have authorised
capital or par value in respect of its issued shares. All issued shares are fully paid.
98
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2017 C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
e) Composition and movement in reserves
Foreign
currency
translation
reserve
$’000
Hedging
reserve
$’000
Capital
reserve
$’000
Fair value
reserve
$’000
Employee
compensation
reserve
$’000
Total
$’000
(4,045)
(86)
(914)
(9)
169
(4,885)
-
-
4,045
-
-
-
86
-
-
-
-
-
914
-
-
9
-
-
-
-
-
-
-
59
228
9
86
4,959
59
228
(1,010)
(689)
(914)
3,303
78
768
-
-
-
(3,035)
-
(4,045)
-
-
603
-
-
-
-
-
-
-
(86)
(914)
-
(3,312)
-
-
-
(9)
-
-
-
-
91
169
-
(3,312)
603
(3,035)
91
(4,885)
2017 year:
Opening balance
Net change in fair value of available-
for-sale fi nancial assets transfered to
profi t or loss, net of tax
Effective portion of change in fair
value of cash fl ow hedge
Share of associates’ change in
reserve, net of tax
Share-based payments
Closing balance
2016 year:
Opening balance
Net change in fair value of available-
for-sale fi nancial assets, net of tax
Net change in fair value of available-
for-sale fi nancial assets transfered to
profi t or loss, net of tax
Effective portion of change in fair
value of cash fl ow hedge
Share of associates' change in
reserve, net of tax
Share-based payments
Closing balance
21. Dividends
Accounting policies
Dividends
Dividends are recognised as a liability in the period in which they are declared.
The following fully franked dividends were paid, franked at a tax rate of 30%.
2017 year interim - 10.0 cents per share
2017 year special - 80.0 cents per share
2016 year fi nal - 10.0 cents per share
2016 year interim - 10.0 cents per share
2015 year fi nal - 10.0 cents per share
Total dividends paid
2017
$’000
12,043
96,345
12,043
-
-
120,431
2016
$’000
-
-
-
12,043
12,043
24,086
99
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Dividends cents per share - paid / payable
Interim
Special
Final
Total
2017
10.00
80.00
10.00
100.00
2016
10.00
-
10.00
20.00
The final 10cents per share fully franked dividend was declared after balance date and has not been provided for. It is
scheduled for payment on 31 October 2017. The declaration and subsequent payment of dividends has no income tax
consequences to the Company. The financial effect of these dividends has not been brought to account in the financial
statements for the financial year ended 30 June 2017 and will be recognised in subsequent financial statements.
22. Earnings per share
Accounting policies
Basic earnings per share (EPS) is calculated by dividing the profi t attributable to equity holders for the reporting period by the weight-
ed average number of ordinary shares outstanding during the period.
Diluted EPS is calculated by dividing the profi t attributable to equity holders for the reporting period by the weighted average number
of ordinary shares outstanding including dilutive potential ordinary shares.
Consolidated (loss) / profi t
Continuing operations
Discontinued operations
Attributable to ordinary shareholders of the Company
2017
$’000
2016
$’000
13,701
(104,251)
(90,550)
10,280
15,336
25,616
2017
2016
Weighted average number of fully paid ordinary shares outstanding during the year used in
calculation of basic EPS (in thousands of shares)
120,431
120,431
Any potential dilution in Cabcharge’s earnings per share which might arise following the exercise of the LTI awards is immaterial given
the number of existing shares on issue.
Basic EPS
Continuing operations
Discontinued operations
Attributable to ordinary shareholders of the Company
Diluted EPS
Continuing operations
Discontinued operations
Attributable to ordinary shareholders of the Company
2017
2016
11.4 cents
8.5 cents
(86.6 cents)
12.7 cents
(75.2 cents)
21.3 cents
11.4 cents
8.5 cents
(86.6 cents)
12.7 cents
(75.2 cents)
21.3 cents
100
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2017 C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
23. Dividend franking balance
Balance at the end of the fi nancial year including franking credits arising from income tax
payable in respect of the fi nancial year.
2017
$’000
2016
$’000
35,799
78,126
The above available amounts are based on the balance of the dividend franking account at year-end adjusted for:
(a) franking credits that will arise from the payment of the current tax liabilities;
(b) franking debits that will arise from the payment of dividends recognised as a liability at the year-end;
(c) franking credits that will arise from the receipt of dividends recognised as receivables by the tax consolidated
group at the year-end; and
(d) franking credits that the entity may be prevented from distributing in subsequent years.
The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends.
The impact on the dividend franking account of dividends proposed after the balance sheet date but not recognised
as a liability is to reduce it by $5,161,000 (2016: $5,161,000). In accordance with the tax consolidation legislation, the
Company as the head entity in the tax consolidated group has also assumed the benefit of $35,799,000
(2016: $78,126,000) franking credits.
24. Parent entity disclosures
As at, and throughout, the fi nancial year ended 30 June 2017 the parent entity of the Group was Cabcharge Australia Limited.
Result of the parent entity
Profi t for the year
Other comprehensive income
Total comprehensive income for the year
Financial position of parent entity at year end
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Total equity of the parent entity comprising of:
Share capital
Reserves
Retained earnings
Total equity
Parent Entity
2017
$’000
2016
$’000
21,251
-
21,251
32,814
(1,161)
31,653
73,744
86,461
249,829
445,229
323,573
531,690
4,871
7,982
141,888
247,774
146,759
255,756
138,325
138,325
228
168
38,261
137,441
176,814
275,934
Parent entity capital expenditure commitments
The Company has not entered into any contracts to purchase plant and equipment for which amounts have not been
provided as at 30 June 2017 (2016: nil).
Parent entity guarantees in respect of the debts of its subsidiaries
The parent entity has entered into a Deed of Cross Guarantee with the effect that the Company guarantees debts in
respect of certain subsidiaries.
Further details of the Deed of Cross Guarantee and the subsidiaries subject to the deed are disclosed in Note 25.
101
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
25. Deed of Cross Guarantee
Pursuant to ASIC Corporations (Wholly owned Companies) Instrument 2016/785, the wholly-owned subsidiaries listed
below are relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports,
and Directors’ reports.
It is a condition of the Class Order that the Company and each of the subsidiaries enter into a Deed of Cross Guarantee. The
effect of the Deed is that the Company guarantees to each creditor payment in full of any debt in the event of winding up of any
of the subsidiaries under certain provisions of the Corporation Act 2001. If a winding up occurs under other provisions of the
Act, the Company will only be liable in the event that after six months any creditor has not been paid in full. The subsidiaries
have also given similar guarantees in the event that the Company is wound up.
In FY16 the Company entered into a Deed of Cross Guarantee with its wholly-owned subsidiaries.
The subsidiaries subject to the Deed are:
• Taxis Combined Services Pty Ltd
• Black Cabs Combined Pty Ltd
• Yellow Cabs (South Australia) Pty Ltd
The Consolidated income statement and retained earnings for the Company and controlled entities which are a party to
the Deed is as follows:
2017
$‘000
2016
$‘000
151,522
166,194
(109,799)
(110,139)
41,723
1,853
(3,502)
40,074
(7,783)
32,291
56,055
896
(5,615)
51,336
(16,581)
34,755
235,949
225,280
(120,431)
(24,086)
147,809
235,949
Revenue
Expenses
Results from operating activities
Finance income
Finance costs
Profi t before income tax
Income tax expense
Profi t for the year
Retained earnings at beginning of year
Dividends provided for or paid
Retained earnings at end of year
102
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2017 C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
The Consolidated fi nancial position for the Company and controlled entities which are a party to the Deed is as follows:
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total Current Assets
Non-Current Assets
Trade and other receivables
Advances to associates
Investments
Property, plant and equipment
Net deferred tax assets
Taxi plate licences
Goodwill
Intellectual property
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Interest rate swaps
Current tax liabilities
Employee benefi ts
Total Current Liabilities
Non-Current Liabilities
Non-interest bearing liabilities
Loans and borrowings
Employee benefi ts
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Share capital
Reserves
Retained earnings
Total Equity
2017
$‘000
2016
$‘000
24,353
59,767
974
1,266
9,192
61,515
1,213
982
86,360
72,902
827
-
1,140
18,812
173,817
363,522
26,861
1,771
13,332
14,392
11,316
30,849
1,611
25,736
14,392
6,131
242,316
462,193
328,676
535,095
10,810
20,534
-
1,019
3,733
123
4,103
3,390
15,562
28,150
25,582
25,582
-
106,000
683
26,265
41,827
520
132,102
160,252
286,849
374,843
138,325
138,325
715
569
147,809
235,949
286,849
374,843
103
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
26. Related Party and Key Management Personnel disclosures
Apart from the details disclosed in this note, no key management personnel (KMP) have entered into a material contract
with the Company or the Group since the end of the previous financial year and there are no material contracts involving
key management personnel interests existing at year end.
a) KMP compensation (including Non-executive Directors)
Short-term employee benefi ts - salary, fees, non-cash benefi ts and cash bonus
Post-employment benefi ts - superannuation
Other long-term benefi ts
Share-based payment expense
b) Loans to Directors and other KMP
No loans are made to Directors or other KMP.
c) Transactions with Directors and other KMP
The Group has no transactions with related parties in the reporting period.
d) Other related party transactions
Related parties
ComfortDelGro Cabcharge Pty Ltd
Relationship
Associate
2017
$
2016
$
4,282,052
3,183,674
201,654
181,235
75,979
71,575
34,041
80,405
4,631,260
3,479,355
Nature of
transaction
2017
$
2016
$
(i)
(ii)
-
18,812,086
419,463
694,944
(i)
The shareholders in CDC loaned funds to CDC, in amounts pro-rata to their respective shareholdings, for bus
acquisitions and other capital expenditures. The amount receivable by the Group in FY16 was $18,812,086
reflecting 49% of the total shareholder loans. This shareholder loan was fully repaid on 15 February 2017.
(ii)
Interest on shareholder loan paid by CDC.
27. Remuneration of auditors
Audit services
Auditors of the Company - KPMG Australia
Audit and review of fi nancial reports
Other regulatory services
Other auditors
Audit and review of fi nancial reports
Other services
Auditors of the Company - KPMG Australia
Taxation services
Other auditors
Internal Audit
Other services - internal auditor
104
2017
$
2016
$
375,000
34,500
349,000
65,600
17,000
75,000
166,920
107,121
98,700
126,161
818,281
100,374
135,908
833,003
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2017
28. Particulars relating to controlled entities
135466 Pty Ltd
ABC Radio Taxi Pty Ltd
Access Communications Net Pty Ltd
Arrow Taxi Services Pty Ltd
Austaxi Group Pty Ltd
Black Cabs Combined Car Sales Pty Ltd
Black Cabs Combined Pty Ltd
Cab Access Pty Ltd
Cabcharge (Investments) Pty Ltd
Cabcharge Payments Pty Ltd*
Carbodies Australia Pty Ltd
Combined Communications Network Pty Ltd
EFT Solutions Pty Ltd
Enterprise Speech Recognition Pty Ltd
Go Taxis Pty Ltd
Helpline Australia Pty Ltd
Mact Franchise Pty Ltd
Mact Network Pty Ltd
Mact Rental Pty Ltd
Maxi Taxi (Australia) Pty Ltd
Melbourne Taxi Cab Service Pty Ltd
Newcastle Taxis Pty Ltd
North Suburban Taxis (Vic) Pty Ltd
Silver Service (Victoria) Pty Ltd
Silver Service Taxis Pty Ltd
South Western Cabs (Radio Room) Pty Ltd
Taxi Data Australia Pty Ltd
Taxi Services Management (Newcastle) Pty Ltd
TaxiProp Pty Ltd
Taxis Australia Pty Ltd
Taxis Combined Services (Vic) Pty Ltd
Taxis Combined Services Pty Ltd
Taxitech Pty Ltd
Thirteen Hundred Pty Ltd
Voci Asia Pacifi c Pty Ltd
Yellow Cabs of Sydney Pty Ltd
Yellow Cabs South Australia Pty Ltd
Yellow Cabs Victoria Pty Ltd
Cabcharge (Europe) Ltd **
Cabcharge New Zealand Limited
Cabcharge North America Ltd
*Entity established during the year
** Entity wound up during the year
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Group
Interest
%
2017
Group
Interest
%
2016
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
58
100
100
58
100
100
100
100
100
100
100
100
-
100
93
100
100
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
58
100
100
58
100
100
100
100
100
100
100
100
100
100
93
105
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
29. Capital expenditure commitments
The Group has not entered into any contracts to purchase plant and equipment for which amounts have not been provided
as at 30 June 2017 (2016: $nil).
30. Operating lease commitments
Accounting policies
Operating leases are not recognised in the Group’s Consolidated Statement of Financial Position. Lease payments for
operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expense on a
straight-line basis over the term of the lease
Due within one year
Due within one year go fi ve years
Due later than fi ve years
Total operating lease commitments
2017
$‘000
1,566
569
-
2016
$‘000
1,509
1,624
-
2,135
3,133
Lease commitments are in relation to the Group’s offices in various locations. Under these arrangements the Group
generally pays rent on a monthly basis at rates agreed at the inception of the lease.
31. Notes to the Consolidated Statement of Cash Flows
Accounting policies
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and
form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the
purpose of the Consolidated Statement of Cash Flows.
The carrying value of cash is considered to approximate fair value.
a) Reconciliation of net cash provided by operating activities with profit after income tax
(Loss) / Profi t for the year attributable to owners of the Company
Adjustment for non-cash items:
Depreciation and amortisation
Capitalised development costs written-off
Net (profi t) on disposal of property, plant and equipment
Net (profi t) on sale of investments
Share-based payments
Impairment charge
Loss / (Profi t) from discontinued operations (net of income tax)
Changes in assets and liabilities, net of the effects of purchase of subsidiaries:
Change in trade and other debtors
Change in inventories
Change in creditors and accruals
Change in provisions
Change in income taxes payable
Change in deferred tax balances
2017
$‘000
2016
$‘000
(90,550)
25,616
13,708
15,668
1,577
(1,689)
-
59
-
(13,921)
(4,493)
91
8,277
27,680
104,251
(15,336)
565
310
199
290
969
(121)
12,714
1,274
(4,880)
(449)
2,562
-
Net cash provided by operating activities
37,845
46,526
106
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2017 C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
2017
$‘000
9,473
19,983
29,456
2016
$‘000
10,993
2,046
13,039
b) Cash and cash equivalents
Cash on hand and at bank
Money market deposits
Balance per Consolidated Statement of Cash Flows
c) Restricted cash
There was no restricted cash at 30 June 2017 (30 June 2016: $nil).
32. Financial instruments and financial risk management
a) Overview
The Board policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to
sustain future development of the business. The Board monitors the return on equity, which the Group defines as profit
after tax divided by total shareholders’ equity. The Board also determines the level of dividends to ordinary shareholders.
The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings
and the advantages and security afforded by a sound capital position. The Group’s target is to achieve a return exceeding
its cost of equity over the medium term.
There were no changes in the Group’s approach to medium term capital management during the year.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
The Group has exposure to the following risks from financial instruments:
• Credit risk
• Liquidity risk
• Market risk
This note presents information about the Group’s exposure to each of the above risks, its objectives, policies and
processes for measuring and managing risk, and the management of capital. Further quantitative disclosures are included
throughout the Consolidated Financial Statements.
b) Financial risk management objectives
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.
The Board has established the Audit & Risk Committee, which is responsible for developing and monitoring risk
management activities. The Committee reports regularly to the Board of Directors on risk management.
Risk management practices are established to identify and analyse the risks faced by the Group, to set appropriate
policies which include risk limits and controls, and to monitor risks and adherence to policies. Risk management practices
are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through their training
and management standards and procedures, aims to develop a disciplined and constructive control environment in which
all employees understand their roles and obligations.
The Audit & Risk Committee oversees how management monitors compliance with the Group’s risk management policies
and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.
c) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Group’s receivables from customers, associates and investment
securities. The carrying value of cash and cash equivalents, trade and other receivables, advances to associates and
available-for-sale financial assets represents the maximum credit exposure of these assets.
Trade and other receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.
The Group minimises concentration of credit risk in relation to trade accounts receivable by undertaking transactions with
a large number of customers.
107
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Credit risk in trade receivables is managed in the following ways:
• The Board has established delegated limits and authority for agreements, contracts and receivable write-off;
• Each new customer is analysed individually for creditworthiness under a credit policy before the Group’s standard
payment and delivery terms and conditions are offered;
• Payment terms are 28 days;
• A risk assessment process is used for customers over 90 days; and
• Cash or bank guarantee is obtained where appropriate.
The Group assumes the credit risk for the full value of Taxi fares settled through the Cabcharge Payment System (refer to
Note 3).
The Group has established an allowance for impairment that represents their estimate of incurred losses in respect of
trade and other receivables and investments. An allowance has been made for estimated irrecoverable amounts from
billings. The main component of this allowance is a collective loss component established for groups of similar assets
in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on
historical data of payment statistics for similar financial assets.
Investments
The Group limits its exposure to credit risk by placing deposits with major Australian banks.
d) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage
to the Group’s reputation.
The Group undertakes the following activities to ensure that there will be sufficient funds available to meet obligations:
• Prepare budgeted annual and monthly cash flows;
• Monitor actual cash flows on a daily basis and compare to liquidity requirements;
• Maintain standby money market and commercial overdraft facilities; and
• Maintain committed borrowing facility in excess of budgeted usage levels.
There has been no change in liquidity risk policies during the financial year.
Maturity profile of financial liabilities by remaining contractual maturities
Carrying
amount
$’000
Contractual
cashfl ows
$’000
6 months
or less
$’000
6 to 12
months
$’000
1 to 2
years
$’000
2 to 5
years
$’000
2017 year
Trade and other payables
Loans and borrowings
Interest rate swaps used for hedging
25,775
3,676
-
25,775
3,801
-
25,775
3,801
-
29,451
29,576
29,576
2016 year
Trade and other payables
Loans and borrowings
25,576
25,576
109,663
113,556
Interest rate swaps used for hedging
123
123
25,576
3,793
-
135,362
139,255
29,369
Financial facilities
Revolving credit facility
Multi option facility
Total facility
Amount used
Amount unused
108
-
-
-
-
-
-
-
-
-
-
-
-
-
109,763
123
109,886
-
-
-
-
-
-
-
-
2017
$‘000
2016
$‘000
80,000
20,000
100,000
-
100,000
192,500
7,500
200,000
106,000
94,000
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2017 C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
The bank borrowings, as disclosed in Note 18, require the Group to comply with certain financial covenants which, if
breached, could result in repayment of a portion or all of the borrowings earlier than indicated in the above table. The
interest payments on variable interest rate loans and the future cash flows from interest rate swaps reflect market forward
interest rate at the period end and these amounts may change as market interest rate change. The cash flows associated
with interest rate swaps used for hedging are expected to impact profit or loss in the same periods in which they occur.
Except for these financial liabilities, it is not expected that the cash flows included in the maturity profile could occur
significantly earlier, or at significantly different amounts.
Typically the Group ensures that it has sufficient cash on demand to meet expected current operational expenses,
including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot
reasonably be predicted, such as natural disasters. In addition, the Group maintains lines of credit as detailed in the above
table.
e) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will
affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is
to manage and control market risk exposures within acceptable parameters, while optimising the return.
i) Currency risk
The Group has no significant exposure to foreign exchange risk in respect of the Company and the entities it controls.
ii) Interest rate risk
The principal risk to which financial assets and financial liabilities are exposed is the risk of loss from fluctuations in the
future cash flows or fair values of financial instruments because of a change in market interest rates. The Group adopts
a policy of using hedging instruments to protect part of the loans from exposure to increasing interest rates. The Group
enters into and designates interest rate swaps as hedges of the variability in cash flows attributable to interest rate risk.
On initial designation of the derivative as the hedging instrument, the Group formally documents the relationship between
the hedging instrument and the hedged item, including the risk management objectives and strategies in undertaking
the hedge transaction and the hedged risk, together with the methods that will be used to assess the effectiveness of
the hedging relationship. The Group assesses, both at the inception of the hedge relationship and on an ongoing basis,
whether the hedging instruments are expected to be highly effective in offsetting the changes in the cash flows of the
respective hedged item attributable to the hedged risk, and whether the actual results of each hedge are within a range of
between 80 to 125 percent.
Derivatives are recognised initially at fair value, atributable transaction costs are recognised in profit or loss as incurred.
Subsequently, derivatives are measured at fair value. The effective portion of changes in the fair value of the derivative
is recognised in other comprehensive income and presented in the hedging reserve in equity. Any ineffective portion of
changes in the fair value of the derivative is recognised immediately in profit or loss.
The amount accumulated in equity is reclassified to profit or loss in the same period that the hedged item affects profit or
loss. If the hedging instrument no longer meets the criteria for hedge accounting, expires, or is terminated, then hedge
accounting is discontinued prospectively.
At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:
Fixed rate instruments
Financial assets
Financial liabilities
Variable rate instruments
Financial assets
Financial liabilities
Carrying Amount
2017
$‘000
2016
$‘000
6,637
9,265
-
(85,000)
6,637
(75,735)
29,456
(3,676)
25,780
31,851
(24,663)
7,188
109
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Sensitivity analysis
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore a
change in interest rates at the reporting date would not affect profit or loss.
Sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit
or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates,
remain constant. The analysis is performed on the same basis for 2016.
2017
2016
Investments
Profi t or loss
100 bp
increase
$’000
(50)
(1,040)
100 bp
decrease
$’000
50
1,040
The Group limits its exposure to market risk by investing in unlisted companies which are related to Taxi business. The
investment in unlisted companies was $1,949,000 as at 30 June 2017 (refer to Note 8).
f) Fair values
Interest rates used for determining fair value
The interest rates used to discount estimated cash flows, where applicable, are based on the government yield curve at
the reporting date plus an adequate credit spread, and were as follows:
Loans and borrowings
Finance lease receivables
Interest rate derivatives
Fair value hierarchy
2017
2016
3.2% to 3.6%
3.4% to 3.7%
7.5% to 13.5%
7.5% to 12%
-
2.1% to 3.3%
The table below analyses financial instruments carried at fair value, by valuation method.
The fair value of interest rate swaps is based on independent market valuations. Fair values reflect the credit risk of
the instrument and include adjustments to take account of the credit risk of the Group entity and counterparty when
appropriate.
The different levels have been defined as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e., as prices) or indirectly (i.e., derived from prices)
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
30 June 2017
Interest rate swap used for hedging
30 June 2016
Interest rate swap used for hedging
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
-
-
-
-
-
-
(123)
(123)
-
-
-
-
-
-
(123)
(123)
There have been no transfers between levels for the year ended 30 June 2017.
110
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2017 C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
33. Operating segment
Accounting policies
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating
segments’ operating results are regularly reviewed by the Group’s CEO to make decisions about resources to be allocated to the
segment and assess its performance, and for which discrete fi nancial information is available.
Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and
intangible assets other than goodwill.
The Group operates predominantly in one business and geographic segment being the provision of Taxi related services in
Australia and through an equity accounted associate in the UK.
During the year the Group sold the associates which were equity accounted by Cabcharge, refer to Note 10 & 11.
Revenue
External revenue
Result
Reported result
(Loss) / Profi t from discontinued
operation, net of tax
Segment result
Net fi nance (costs) / income
Income tax expense
(Loss) / Profi t for the period
Other disclosures
Segment assets, excluding
investments accounted for using the
equity method
Other-investments accounted for
using the equity method
Segment liabilities
Depreciation and amortisation
Impairment charges
Taxi related services
Bus & coach services
Consolidated
2017
$000
2016
$000
2017
$000
2016
$000
2017
$000
2016
$000
151,949
168,808
25,970
27,057
-
-
-
151,949
168,808
-
25,970
27,057
(34,565)
(8,595)
836
(69,686)
14,500
(104,251)
27,893
(69,686)
14,500
(78,281)
(1,688)
(10,581)
(90,550)
15,336
42,393
(393)
(16,384)
25,616
216,597
234,017
-
35,443
13,708
8,277
44,807
141,698
15,668
27,680
-
-
-
-
-
-
216,597
234,017
251,786
-
296,593
-
-
-
35,443
141,698
13,708
8,277
15,668
27,680
111
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34. Share-based payment
Accounting policies
Long Term Incentives (LTI)
The Group has provided LTI awards to the CEO and other executives and granted them annually in the form of Rights.
The grant-date fair value of equity-settled share-based payment awards granted to employees is generally recognised as
an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an
expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions
are expected to be met, such that the amount ultimately recognised is based on the number of awards that meet the
related service and non-market performance conditions at the vesting date.
The total share-based payment expense for the year was $59,101 (FY16:$91,154).
a) Fair value
The fair value of the awards as at the valuation date is set out in the following table:
Grant date/employees
entitled
Number of
Rights
Vesting
conditions
Valuation
methodology
Fair Value
Expected
vesting date
Performance
Period
2017 year
Rights granted to CEO and
key management personnel
On 6 June 2016
194,704
Absolute Total
Shareholder Return
(market condition)*
194,704
Strategic Milestone
(non-market condition)*
Monte Carlo
simulation
$1.68
Black Scholes
$3.16
15 September
2020
1 July 2016 to
30 June 2020
Total number of Rights
389,408
2016 year
Rights granted to CEO and
key management personnel
On 6 June 2016
122,408
Absolute Total
Shareholder Return
(market condition)*
61,204
Strategic Milestone
(non-market condition)*
Monte Carlo
simulation
$0.80
Black Scholes
$2.67
Total number of Rights
183,612
15 September
2019
1 July 2015 to
30 June 2019
* Details of the operation of LTI awards are outlined in the Directors’ Report from page 50 to 69.
b) Key assumptions
The key assumptions adopted for valuation of the awards are summarised in the following table:
2017
2016
30 January 2017
6 June 2016
$3.73
4 years
35%
4.7%
1.95%
$3.22
4 years
35%
5.9%
1.53%
Share price at grant date
Expected life
Expected volatility
Dividend yield
Risk-free interest rate
112
Notes to the Consolidated Financial StatementsFor the year ended 30 June 2017 c) Reconciliation
The reconciliation of outstanding rights is shown the following table:
Performance Rights reconciliation
Rights outstanding as at 1 July
Rights granted
Rights forfeited
Rights lapsed
Rights exercised
Rights outstanding as at 30 June
Rights exercisable as at 30 June
35. Subsequent event
Dividends
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Number of Rights
2017
2016
300,358
116,746
389,408
183,612
-
-
-
-
-
-
689,766
300,358
-
-
The Directors have declared a final dividend of 10 cents per share (fully franked) scheduled to be paid on 31 October
2017. The record date to determine entitlement to dividend is 29 September 2017.
Acquisition of Yellow Cabs Queensland
During the year the Company entered into a conditional agreement to acquire the business of Yellow Cabs Queensland
for a consideration of $19.5million. Satisfaction of the conditions precedent to the agreement were completed on 31 July
2017, being the date of the acquisition.
As part of this acquisition, the Company has a property lease with an initial term of 10 years and two 5 year renewal
options. The expected increase in operating lease commitments at 31 July 2017 is approximately $8 million for the initial
10 years term.
Due to the limited time between the completion date and the date the Consolidated Financial Statements were authorised
for issue, certain disclosures required by AASB 3 Business Combinations have not been made.
Sale of associate, CityFleet Networks Ltd
On 28 July 2017 the Company received the funds of GBP7.9 million from sale of CFN.
Other than the matter above, there have been no events subsequent to the reporting date that would have had a material
impact on the Group’s financial statements as at 30 June 2017.
113
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Directors Declaration
For the year ended 30 June 2017
1. In the opinion of the Directors of Cabcharge Australia Limited (Company):
a. the Consolidated Financial Statements and Notes set out on page 74 to 113, and the Remuneration Report in
the Directors’ Report, set out on page 51 to 69, are in accordance with the Corporation Act 2001, including:
i. giving a true and fair view of the consolidated entity’s financial position at 30 June 2017 and of the
performance for the financial year ended on that date; and
ii. complying with Australian Accounting Standards and the Corporations Regulations 2001.
b. there are reasonable grounds to believe that the Company and the controlled entities identified in Note 25 as
parties to a Deed of Cross Guarantee will be able to meet any obligations or liabilities to which they are or may
become subject to by virtue of the Deed of Cross Guarantee between the Company and those entities pursuant
to ASIC Corporations (Wholly owned Companies) Instrument 2016/785.
2. The Consolidated Financial Statements and Notes comply with International Financial Reporting Standards as
disclosed in Note 2.
3. The Directors have been given the declarations by the Chief Executive Officer and the Chief Financial Officer
required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of the Directors
Paul Oneile
Chairman
28 August 2017
Andrew Skelton
Managing Director
28 August 2017
114
Independent Auditor’s Report
For the year ended 30 June 2017
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
115
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Independent Auditor’s Report continued
For the year ended 30 June 2017
116
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
117
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Independent Auditor’s Report continued
For the year ended 30 June 2017
118
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
119
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Shareholder Information
For the year ended 30 June 2017
The information below was prepared as at 4 September 2017.
20 largest shareholders
Name
1
2
3
4
5
6
7
8
9
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Limited
Pershing Australia Nominees Pty Ltd
Citicorp Nominees Pty Ltd
BNP Paribas Noms Pty Ltd
Swan Taxis Pty Ltd
National Nominees Limited
BNP Paribas Nominees Pty Ltd
Legion Cabs (Trading) Co-Operative Society Limited
10 Warbont Nominees Pty Ltd
11
Sandhurst Trustees Limited
12 Ms Faby Fielan Chong
13 National Exchange Pty Ltd
13
Prudential Nominees Pty Ltd
14 Mr Raymond John Meredith
15
Paden Valley Investments Pty Ltd
16 Mr Mark Hudson
17 Mr Ian Alexander Armstrong
18 Mrs Marianne Parass
19
20
Buttonwood Nominees Pty Ltd
Invia Custodian Pty Ltd
Total
Substantial shareholders
Name
ComfortDelGro
Investors Mutual
Standard Life Aberdeen
Edgbaston Investment Partners
Spheria Asset Management
Number of
shares held
42,828,073
11,749,083
8,980,676
8,408,673
7,064,450
2,631,004
1,810,051
1,753,708
1,750,000
732,284
580,000
525,487
500,000
500,000
303,702
270,080
241,628
233,212
220,000
164,961
163,665
% of issued
capital
35.56
9.76
7.46
6.98
5.87
2.18
1.50
1.46
1.45
0.61
0.48
0.44
0.42
0.42
0.25
0.22
0.20
0.19
0.18
0.14
0.14
91,410,737
75.91
Number of
shares held
% of issued
capital
11,611,680
11,368,577
11,196,703
8,296,245
7,846,377
9.6
9.4
9.3
6.9
6.5
Information included in the substantial shareholders table is sourced from substantial shareholder notices or the register that the Company
maintains in accordance with section 672DA of the Corporations Act, in each case as at 4 September 2017.
Spread of shareholders
Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Number of
shareholders
1,931
2,129
636
648
37
Number of
shares held
1,058,252
5,633,838
4,401,052
16,312,724
93,024,817
5,381
120,430,683
% of issued
capital
0.88
4.68
3.65
13.55
77.24
100.00
512 shareholders hold less than a marketable parcel of shares in the Company based on the closing market price on 4 September 2017.
120
C A B C H A R G E A N N U A L R E P O R T 2 0 1 7
Corporate Directory
Voting rights
Annual General Meeting 2017
The voting rights of shareholders are set out in the
Company’s Constitution. Each shareholder is entitled,
either personally, or by proxy, attorney or representative,
to be present at any general meeting of the Company
and to vote on any resolution on a show of hands or on
a poll. Every shareholder present in person, by proxy, or
attorney or representative, has one vote for every share
held.
The Company has only one class of shares on issue (fully
paid ordinary shares), each with the same voting rights.
ASX listing
The Company’s ordinary shares are quoted on the ASX
under the trading code ‘CAB’, with Sydney being the
Company’s home exchange.
Details of trading activity are published in most daily
newspapers and are also available on a 20 minute
delayed basis, on the Company’s website at
www.cabcharge.com.au/shareholder-information/share-
price.
The Company is not currently conducting an on-market
buy-back of its shares.
Website
An electronic version of the Annual Report is available
on the Company’s website at www.cabcharge.com.au.
A printed copy of the Annual Report will only be sent to
shareholders who have elected to receive one.
The Annual General Meeting of shareholders of Cabcharge
Australia Limited will be held at 11.00am on Tuesday 21
November 2017 in the Heritage Ballroom, The Westin
Sydney.
Full details will be provided in the Notice of Meeting.
Registered Office
Cabcharge Australia Limited
ABN 99 001 958 390
152-162 Riley Street
East Sydney NSW 2010
T: +61 2 9332 9222
F: +61 2 9361 4248
www.cabcharge.com.au
Company Secretary
Mr Adrian Lucchese
Auditor
KPMG
International Towers Sydney 3
300 Barangaroo Avenue
Sydney NSW 2000
Share Registry
Postal Address
Link Market Services Limited
Locked Bag A14
Sydney South NSW 1235
T: 1300 724 911
www.linkmarketservices.com.au
CREATED BY THINK VEVEY
121
152-162 Riley Street
East Sydney NSW 2010
Tel: +61 2 9332 9222
Fax: +61 2 9361 4248
www.cabcharge.com.au