Carriage Services, Inc. Annual Report 2015

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FY2015 Annual Report · Carriage Services, Inc.

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I4|I5

ANNUAL
REPORT

Contents

OVERVIEW

Message from the Chairman

Managing Director’s Report

Our Board

Our Executive Team

FINANCIAL REPORT

Corporate Governance Statement

Investor Relations

Directors’ Report

Auditor’s Independence Declaration

FINANCIAL STATEMENTS

Consolidated Statement of Profit and Loss
and Other Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Financial Statements

Directors’ Declaration

Independent Auditor’s Report

Shareholding Information

Corporate Directory

CSG PRODUCT SUITE

TECHNOLOGY AS A SERVICE

One Partner.
One Bill. One Cloud.

This year CSG begun the journey to reposition as a
Technology as a Service provider with a staged roll
out of new products and solutions sold as a service
to help our customers maximise productivity,
reduce costs and drive flexibility and agility.

From FY16 onwards, customers will be able to source print, display, unified
communications, desktop, data storage, backup and infrastructure all as
a service from the one supplier with one simple monthly bill.

What does the ‘as a service’ approach mean for our customers?

Full support

Flexibility and agility

Cash flow benefits

Ease and simplicity

Print as a Service
Tailored to our customers’ individual needs from small offices
through to large scale managed print solutions.

Communications as a Service
World leading, cloud telephony, video conferencing and
unified communications solutions for a connected enterprise.

CSG Virtual Office

Boardroom as a Service

CSG Conferencing

Powered by 8×8 this cloud telephony
solution is truly ground breaking
technology and anything but a
traditional communication solution.

A full boardroom package that
combines the latest state of the art
Samsung digital display technology
with CSG Conferencing.

This unique solution simplifies
video, regardless of the device
or technical capabilities of the
people you want to join.

Desktop as a Service
A complete desktop, communication and support package to provide
employees with their IT needs for a fixed price per month.

CSG Total Office

CSG Virtual Office

•

Online file storage, Online File
Server & team folders
• Online backup for their PC
• CSG Support service

• Desk and direct phone number
• Unified communications suite
• Unlimited call plan to all Australian
or New Zealand based land lines

Hardware bundle and
Microsoft Online Services

• Office 365 with Exchange Email
• Microsoft Surface or HP touch

Windows Notebook

• 24” monitor, keyboard and mouse

Infrastructure as a Service
Built on the HP Helion Private Virtual cloud platform, CSG
Cloud management takes away the IT Management burden
so customers can focus on running their business.

Display as a Service
Latest Samsung Digital display technology for a simple monthly payment
fully supported by CSG. Large format, interactive and cloud displays to
deliver engaging experiences.

CSG 14|15 ANNUAL REPORT 5

CSG OVERVIEW

Message from
the Chairman

growth and increasing complexity
of our business. Each of our new
Directors have made significant
contributions to the business.

Philip Bullock, our longest serving
Director, has advised he will step
down at this year’s Annual General
Meeting. I would like to take this
opportunity, on behalf of all at CSG
and its shareholders, to recognise
Philip’s outstanding contribution
and wish him well for the future.

I also take this opportunity to
recognise the contributions made
by all my fellow Directors, our
CEO and her senior management
team, together with all our valued
employees who continue to grow
CSG into a leading provider of
technology services to the Australian
and New Zealand markets.

We are on an exciting journey at
CSG and we thank you for your
ongoing support.

Tom Cowan

intention to maintain the dividend
at this level over the next year.

We also took the opportunity, post
balance date, to raise $40.2 million
of new equity. This was achieved by
way of an institutional placement of
$30 million and an offer to all eligible
shareholders of a Share Purchase
Plan which raised $10.2 million.
These funds were all raised at $1.42
per share. The response by existing
and new shareholders to these
offers was extremely pleasing.

The funds raised have been partly
used to acquire the CodeBlue
business in New Zealand. This
business is a leader in the markets
in which it operates, providing
technology managed services to
Small and Medium Enterprises
(SME’s) in New Zealand. The
remaining funds raised will be
utilised on opportunities to further
support our growth.

The Board believes the
implementation of the new
employee remuneration structures
introduced in 2012 have played a
major role in aligning, motivating and
rewarding CSG staff for achieving
our growth objectives. The Board
intends to seek approval at the
upcoming 2015 Annual General
Meeting for a new Long Term
Incentive Plan for key Executives
and employees. As is the case with
the current plans, management
will be very well rewarded if the
business continues to grow earnings
and shareholder returns strongly.

Last year we appointed three new
Board members in recognition of the

CSG 14|15 ANNUAL REPORT 7
CSG 14|15 ANNUAL REPORT 7

Dear Fellow Shareholders

It is with great pleasure that I
present CSG’s Annual Report for
the year ended 30 June 2015.

This year, CSG has built upon the
strategy and business plan first
adopted in 2012 and delivered
another year of strong growth.

Our traditional print business
continued to win new business
in a mature and competitive
marketplace. Importantly, the sales
team had some early success in
selling exciting new technology
products and services introduced
during the year. The vision of
delivering a full suite of global
best-of-breed technology to both
existing and new customers ‘as
a service’ and on one bill is fast
becoming a reality.

In the area of capital management,
we again delivered on our objective
to return a minimum of $25 million
per annum to shareholders. In
the past year, this was by way of
dividend payments totalling 9 cents
per share. We have announced our

CSG OVERVIEW

Managing
Director’s Report

Dear Shareholders

FY15 has been a busy one, rife
with activity centred on business
improvement and growth. Three
years into our turnaround strategy
set in 2012, I am delighted that
this year we have again delivered
on our objectives, announcing rises
in revenue, profit and EBITDA while
positioning the business for the future.

The financial results were pleasing
with all business divisions achieving
double digit growth. Key highlights
include a 13% increase in revenue to
$224 million, 12% growth in underlying
NPAT to $21.3million and 15% growth
in underlying EBITDA to $33.5million.
We also reported a 30% increase in
lease receivables within our finance
business to $210 million.

This year we executed our
strategy to expand our portfolio of
products and solutions to include
non-print offerings. We have
enjoyed a successful first year
in our partnership with Samsung
and commenced ‘Technology as
a Service’ sales of subscription
software and hardware. The first
solution to launch was ‘Boardroom
as a Service’, which includes CSG
Conferencing software bundled
with a Samsung Interactive touch
screen smart display.

In 2HY15 10% of all of our deals
in Business Solutions Australia
included non-print technology
with an average value of $32K per
customer. These Technology as
a Service sales combined with
continued acquisition of new
customers were key contributors

to the growth of this division. I look
forward to the non-print attach
rate increasing as we roll out the
full suite of cloud solution and
Technology as a Service offerings
over the coming year.

I am also pleased the Enterprise
Solutions division achieved 28%
revenue growth and won three major
Print as a Service contracts during
the year, with a total contract value
of over $40 million over five years.

NEW PRODUCTS AND
PARTNERSHIPS

As our restraint following the sale of
our technology solutions business to
NEC has lifted, we are full steam ahead
on repositioning CSG from a print to a
Technology as a Service provider.

As mentioned the first of our
new ‘as a service’ solutions was
launched this year with the roll out
to continue in FY16, enabling CSG
to deliver single source technology
solutions to our customers across
the SME and Enterprise sectors.

From FY16 onwards, a CSG
customer will be able to source
print, communications, desktop,
IT infrastructure data storage and
back up all ‘as a service’. The value
proposition is clear. Our customers
can source multiple products and
solutions from one partner, with one
simple monthly bill and access the
latest, state of the art technologies
with minimal capital outlay. Those
who have seen me speak will have
heard the expression ‘One Partner.
One Bill. One Cloud’. An expression
that underpins what it is we offer
our customers.

Our SME customers will benefit
from the ease and simplicity of
preconfigured, rapidly deployable
cloud technology solutions that will
help them save time and money.
These solutions also scale up to
suit the more tailored and complex
needs of our Enterprise customers.

A key highlight in the roll out of our
new products and solutions was the
signing of our new partnership with
8x8, Inc., one of the fastest growing,
leading providers of cloud based
unified communications based out
of the US. In signing the agreement,
CSG has become a major channel
partner for the 8x8 Virtual Office
and Virtual Contact Centre
solutions across the Asia Pacific
region. We are looking forward to
a very successful relationship with
8x8 and adding real value to our
customers with the 8x8 solutions.

Another key highlight was the
CodeBlue acquisition, which
provides an attractive platform
to support the CSG strategy and
enhances our expertise in delivering
IT support to the small to medium
enterprise. CodeBlue and CSG are
a natural fit and I look forward to a
successful integration.

BUSINESS TRANSFORMATION –
CUSTOMER HUB

This year we continued the roll out
of our cloud based IT platform built
on SalesForce.com with pleasing
results. In Australia, this world class
solution has replaced more than 100
legacy systems and we have started
to enjoy the associated productivity
and efficiency gains. The roll out
in New Zealand is scheduled to be
completed in the second half of FY16.

When complete, we will have one
platform to manage all aspects of
the business and the entire lifecycle
of a customer from initial quote
through to delivery and post sales
service and account management.
Having all of our data in one place
will be a key contributor to our
success moving forward.

We have implemented one of the
leading business intelligence tools
to support our move towards
real time, minute by minute
management, review and reporting
of the business. Going forward, this
will enable the business to make
decisions based on predictive
analysis of real time data rather
than review of what has occurred in
the past.

PEOPLE

The results we have achieved over
the last few years are testament
to the high quality professionals
that comprise the CSG team
across Australia and New Zealand
and the contribution they make
to the business every day. We will
continue to bolster the skills and
knowledge within our teams as our
portfolio of solutions expand and I
am looking forward to the increased
career path opportunities we will
be able to offer our staff as the
business grows.

We again this year issued $1,000
worth of shares to every employee
participating in the Staff Share
Incentive Plan and as mentioned in
the Chairman’s report will be seeking
approval for the renewal of both this
plan and the Long Term Incentive
Plan at this year’s Annual General
Meeting. I believe that the Staff
Incentive Share Plan has been a key

driver in aligning staff performance
to the business objectives.

In a recent survey undertaken by
the People & Culture team, 100%
of respondents participating in the
Staff Incentive Share Plan believed
it to be extremely valuable, an
indication the plan is a success.

This year we say farewell to Dianne
Silvestro who has left the company.
Mark Thomas has replaced Dianne
in the role of Executive General
Manager, People and Culture. I
would like to thank Dianne for her
contribution to CSG over the last
few years and welcome Mark to
the team. Mark has an extensive
background in human resource
management having worked in
blue chip and private companies
across financial, professional
and business services and also
in the oil industry. His significant
international experience includes
7 years based in London leading a
global HR function. Mark joins us
from Aurecon, where he was Global
Human Capital Leader responsible
for a workforce of 7,500 people
across 20 countries.

I would also like to thank Philip
Bullock for his many years on the
CSG Board and wish him the best
for the future.

The outlook is positive for FY16 and
I look forward to building upon our
success this year to achieve our
desired growth in future years.

Julie-Ann Kerin

CSG 14|15 ANNUAL REPORT 9

CSG OVERVIEW

Our Board

Mr. Stephen Anstice
BA (Economics), Grad. Dip. (SAI)

Non-Executive Director
Member, Nomination and
Remuneration Committee

Stephen Anstice has over 20 years’
experience in the communications
industry. Until June 2013, Mr.
Anstice was CEO of IPMG Pty Ltd
(IPMG), a print, digital and marketing
communications business. Mr. Anstice
also has an extensive background in
investment banking. He is currently
a Non-Executive Director of IPMG,
Audant Investments Limited and The
Song Company Limited.

Mr. Anstice has a Bachelor of Arts
(Economics) from Macquarie University
and a Graduate Diploma from the
Securities Institute of Australia.

Appointed 20 August 2014

Mr. Thomas Cowan
B.Com (Hons)

Non-Executive Chairman
Member, Audit Committee
Member, Nomination and
Remuneration Committee

Tom Cowan is a partner of TDM
Asset Management, a Sydney based
private investment firm. TDM Asset
Management invests in public and
private companies globally. Mr.
Cowan has over 15 years of financial
markets experience, including roles
in corporate finance and investment
banking at Investec Wentworth and
KPMG Australia. He has a Bachelor of
Commerce (Honours – Class 1) from the
University of Sydney.

Mr. Cowan is currently a Non-Executive
Director of Baby Bunting Group Limited.

Appointed 8 February 2012
Appointed Chairman 15 August 2012

Ms. Julie-Ann Kerin
AICD

Managing Director

Since Julie-Ann Kerin was appointed as
Chief Executive Officer and Managing
Director of CSG in 2012, she has
established a proven track record of
delivering strong growth and significant
return to shareholders.

Under Ms. Kerin’s leadership, CSG
successfully completed the transaction
of the sale of the former Technology
Solutions Division to NEC Australia in
2012 for $227.5 million and subsequently
returned $130 million to shareholders
over the following three years.

Prior to Ms. Kerin’s appointment as CEO,
she was the Group General Manager
of the former Technology Solutions
Division for five years, and achieved
revenue growth from $9m to $183m.

She has more than 20 years’
experience as a senior executive
managing both private and public
companies across the information
technology sector. Prior to joining
CSG, Ms. Kerin was responsible for
the global management of operations
and staff across Asia, the United
States, Australia and Europe for a
number of organisations. She has
also held roles with IT companies
Actuate, Haht Commerce, Genasys
Inc and Computer Power. Ms. Kerin is a
member of the Australian Institute of
Company Directors.

Appointed 1 February 2012

Mr. Philip Bullock
BA, Dip Ed, MBA, GAICD

Non-Executive Director
Chairman, Nomination and
Remuneration Committee
Member, Audit Committee

Appointed a Director of CSG in August
2009, Mr. Bullock was formerly Vice
President, Systems and Technology
Group, IBM Asia Pacific, Shanghai, China.
Prior to that position he was Managing
Director of IBM Australia and New
Zealand. His IBM career spanned almost
30 years in the Asia Pacific region.

Mr. Bullock is a Non-Executive Director
of Perpetual Limited and Hills Limited,
and was previously a Non-Executive
Director of Healthscope Limited. Over
the years he has served on a number
of Federal Government bodies, most
notably as the Chair of Skills Australia.

Appointed 1 August 2009

Ms. Robin Low
B.Com, FCA, GAICD

Mr. Mark Phillips
B. Com (Hons), M. Com, FAICD

Non-Executive Director
Chairman, Audit Committee

Non-Executive Director
Member, Audit Committee

Robin Low was formerly a partner at
PricewaterhouseCoopers for over 17
years and has extensive experience
in assurance and risk management,
particularly in the financial services area.

She is currently a Non-Executive
Director of Austbrokers Holdings
Limited, IPH Limited and Appen Limited.
Ms. Low is also a member of the Audit
and Assurance Standards Board and on
the board of a number of not-for-profit
organisations including Sydney Medical
School Foundation, Public Education
Foundation and Primary Ethics.

Ms. Low has a Bachelor of Commerce
from The University of New South
Wales, is a Fellow of the Institute of
Chartered Accountants in Australia and
is a Graduate Member of the Australian
Institute of Company Directors.

Appointed 20 August 2014

Mark Phillips has substantial experience
in banking and asset leasing. Mr. Phillips
worked at the Commonwealth Bank of
Australia for 20 years in various roles
involving asset finance, securities and
trading markets, property lending and
government finance.

Mr. Phillips was formerly Managing
Director of Record Investments Limited
(Record) and Keybridge Capital Ltd. While
Managing Director at Record, the market
capitalisation grew from approximately
$100 million to over $1.5 billion.

Mr. Phillips is currently a Non-Executive
Director of General Reinsurance
Australia Limited and General
Reinsurance Life Australia Limited (a
Berkshire Hathaway company) and
a Non-Executive Director of Cancer
Council (NSW).

Mr. Phillips was formerly a Non-
Executive Director of Interlink Roads Ltd
and ASB Bank Limited in New Zealand.
Mr. Phillips has a Bachelor of Commerce
and a Masters of Commerce from the
University of New South Wales and is
a Fellow of the Australian Institute of
Company Directors.

Appointed 20 August 2014

CSG 14|15 ANNUAL REPORT 11

CSG OVERVIEW

Our Executive Team

Neil Lynch

Chief
Financial
Officer

Stephen Birrell

Executive
General Manager,
Enterprise Solutions

Declan Ramsay

Executive
General Manager,
Business Solutions
Australia

Neil Lynch was appointed Chief
Financial Officer of CSG in 2012. In the
role, Mr. Lynch has been responsible for
the merging of CSG Finance in Australia
and New Zealand.

Mr. Lynch came to CSG after an 11
year career at Virgin Blue Airlines. As a
foundation employee at Virgin Australia,
Neil was involved in the development of
all aspects of the finance team through
several roles with the most recent being
General Manager of Finance.

Prior to Virgin Australia, Mr. Lynch
worked in a variety of finance roles
in both private practice and large
corporate organisations. Neil is a
Chartered Accountant with degrees in
both Commerce and Economics from
the University of Queensland.

Stephen Birrell is a proven business
leader with over 25 years’ experience in
the Information Technology, Aerospace
and Government sectors. His career
has included senior executive roles with
leading organisations in Australia, the
United States, Asia and Europe, including
The Boeing Company, BAE Systems and
Honeywell Space and Aviation.

Prior to joining CSG in June 2013, Mr.
Birrell was the General Manager of NEC
Australia’s Strategic Business Unit,
accountable for achieving strategic
growth objectives and business
expansion in Asia and the Middle East.
Mr. Birrell is a former Officer in the Royal
Australian Air Force.

Declan Ramsay has more than 20 years’
experience within the print sector.
He has been with CSG since 2006,
when he managed and controlled the
Xerox Business Centre key accounts
as the Major Account Manager before
becoming the Brisbane Sales Manager in
July 2007, followed by the Queensland
General Manager position.

In February 2012, Mr. Ramsay was
appointed to the role of Regional
General Manager for NT/QLD. In July
2012, Declan was appointed as the
Executive General Manager of CSG
Business Solutions Australia.

Mr. Ramsay has a strong background
in sales and management of highly
professional and motivated teams
covering all facets of a business
solutions organisation.

Warwick Beban

Executive
General Manager,
Business Solutions
New Zealand

Mark Thomas

Executive
General Manager,
People and
Culture

Warwick Beban has been the Executive
General Manager of CSG Business
Solutions in New Zealand since 2007.
With over 15 years’ experience in the
Document Technology business,
Mr. Beban started working with Ubix
Document Technology in 1991. During
his 10 year career with Ubix he was
ultimately promoted to Southern
Regional Manager, responsible for the
company’s operation in the lower North
Island and South Island. After five years
with Telecom New Zealand as Head of
Business and Corporate for Telecom
Mobile, Mr. Beban re-joined Konica
Minolta as General Manager.

Mr. Beban has a Bachelor of Science
Degree and Masters of Science with First
Class Honours from Massey University.

Mark Thomas joined CSG in September
this year bringing extensive experience
in the human resource management
profession. Mark has worked in blue
chip and private companies across
financial, professional and business
services as well as the oil industry.

Prior to joining CSG, Mark was the
Global Human Capital Leader for
Aurecon, responsible for a workforce
of 7,500 people across 20 countries.
His significant international experience
includes seven years based in London
leading a global HR function. Mark
holds a Bachelor of Business.

I4|I5
Financial Report

CORPORATE GOVERNANCE STATEMENT

Corporate Governance
Statement

The Board of CSG Limited (CSG,
Board or Company) is committed to
protecting shareholders’ interests
and keeping investors fully informed
about the performance of the
Company. In doing so, it seeks to
ensure the future sustainability of the
organisation and create long term value
for its shareholders. The Board have
established the following processes
to protect the interests and assets
of shareholders and to ensure high
standards of integrity and governance.

In undertaking these responsibilities,
the Board has adopted a formal:

Governance Council, which took
effect from 1 July 2014 (Principles and
Recommendations). There are eight
principles prescribed by the Council and
these are reported against below.

Principal 1:
Lay solid
foundations for
management
and oversight

Board Charter

Audit Committee Charter

1.1 The Board

•

Nomination and Remuneration
Committee Charter

Code of Conduct for Directors and
Officers

Further, the Board has also adopted or
issued revised policies with respect to:

•

Independence and Conflicts of
Interest

Risk Management

Board Performance Evaluation

• CEO Performance Evaluation

•

Continuous Disclosure and External
Communications

Share Trading

Remuneration

• Diversity

Copies of these charters and policies
are available to shareholders on the
Company’s website (www.csg.com.
au/investors) or on request. These
documents are not intended to be
an exhaustive list of all corporate
governance practices in place at CSG.

This Corporate Governance Statement
outlines the Company’s practices
for the year-ended 30 June 2015 and
as at the date of this Annual Report.
It is referenced against the latest
Corporate Governance Principles
and Recommendations (3rd Edition)
issued by the ASX Corporate

The Directors of the Company are
accountable to shareholders and
other stakeholders for the proper
management of the business and
affairs of the Company. The Board fulfils
these obligations by delegating certain
business development responsibilities
to the Chief Executive Officer (CEO),
but retains the following responsibilities,
as set out in the Board Charter:

•

agreeing with the CEO the annual
cycle and process for review of
strategic plans, including which
stakeholders are to be involved and
how;

ensuring that the whole Board is
directly involved in the strategic
planning and review processes;

ensuring that strategy development
includes proper consideration by
the Board and management of
associated risks and opportunities;

ensuring that all approved strategic
plans include clear and measurable
financial and other objectives;

requiring that business plans and
budgets are prepared and provided
to the Board to support the agreed
strategic plans;

monitoring and reviewing the
performance of the Company
against the agreed strategic plans
and goals;

•

developing key Company policy; and

•

monitoring and evaluating the
Executive Management Team’s
performance.

The Board is responsible for the
development of appropriate internal
controls to monitor and supervise the
implementation of agreed strategies,
policies, and the financial and other
performance of the Company against
approved strategies, budgets and
delegations.

The Board delegates responsibility
for day-to-day management of the
Company to the CEO. The Company
has adopted a Delegated Authorities
Policy which establishes delegations
and approval levels throughout the
business. The CEO is responsible for
executing the delegations contained
in the policy, but must consult the
Board on matters that are noted as
requiring specific Board approval or
are of a sensitive, extraordinary or
strategic nature.

The Board has also adopted a CEO
Evaluation Policy and a Remuneration
Policy to govern the process for
evaluating the employees of the
Company, including the performance
of the CEO and the Executive
Management Team.

For the 2015 financial year, the Board
measured the CEO and Executive
Management Team against an approved
corporate scorecard and, where
applicable, divisional scorecards. The
outcomes of this process are set out in
the Remuneration Report.

1.2 Appointment of Directors

In accordance with recommended
practice, the Company undertakes
a series of character, security and
financial checks prior to appointing a
candidate to the Board.

The Company also ensures
shareholders are provided with all
material information in its possession
relevant to a decision on whether
to elect or re-elect a Director. This
is provided by a variety of means,
including Director information
contained in this Annual Report, the
Company website and in the Notice of

Meeting relating to the election or re-
election of a Director.

During the financial year, three (3) new
Directors were appointed to the Board
and one (1) Director resigned, resulting
in a Board of six (6); five (5) Non-
Executive Directors and the CEO

1.3 Appointment Terms.

Each Director and nominated Executive
under the Remuneration Policy of
the Company has in place a written
agreement specifying the terms of their
engagement, including their roles and
responsibilities. Any variations to their
initial appointment agreements are also
appropriately documented.

Employment agreements for the CEO
and Executive team are for unlimited
periods but may be terminated
by written notice by either party.
Details of notice periods relating to
these agreements are outlined in the
Remuneration Report.

A procedure has also been determined
for each Director to have the right to
seek independent professional advice,
at the Company’s expense, subject to
the prior approval from the Chairman.

1.4 Company Secretary

The Company Secretary is accountable
directly to the Board, through the
Chairman, on all matters to do with the
proper functioning of the Board and its
Committees.

The qualifications and experience of
CSG’s Company Secretary is set out in
the Directors’ Report.

1.5 Diversity

The Company has adopted a Diversity
Policy which, consistent with its
organisational values and strategic
goals, focuses upon gender, ethnicity/
culture, disability and flexibility
as key levers linked to building a
high performing and sustainable
organisation. Key principles include:

•

facilitating equal employment
opportunities based on relative
ability, performance and potential;

building and maintaining an
inclusive work environment by
taking action against inappropriate
workplace and business behaviour
(including discrimination,
harassment, bullying, victimisation
and vilification),

fostering a diverse workforce
by developing an environment
of mutual respect, dignity and
openness to others;

•

seeking to ensure that the
Company’s business practices,
systems and processes do not
prevent people from diverse
backgrounds having equality of
opportunity within the Company;

developing flexible work practices
to meet the differing needs of our
employees at different stages of
their life cycle in the context of
business requirements;

attracting and retaining a skilled and
diverse workforce;

attracting and retaining a Board
whose composition reflects a
diversity of backgrounds, knowledge,
experience and abilities; and

improving the quality of decision-
making, productivity and teamwork
to meet the relevant requirements
of local legislation and the Board
and shareholders.

The policy is implemented by an internal
Diversity Council under the direction
of the CEO and Executive General
Manager, People & Culture. This Council
has adopted a Workplace Diversity
Strategy and Action Plan for the 2015 to
2018 period.

Assessment of gender diversity
objectives under the policy are measured
by the following key benchmarks,
each of which are reviewed annually
as a minimum or upon presentation of
results in the table above.

The Company also captures a range of
indicators for purposes of assessing
progress against its policy and for
government reporting purposes. At a
high level these include:

•

composition of the Board by gender
(currently 33% are female);

Women

Key
Benchmark

Percentage
of women in
the Executive
Management Team
and other senior
management(i) to
exceed 30%

Percentage of
women employed
by CSG exceed 25%

Complete a
diversity audit by
31 March each year

Outcome
2015

29% are female

30% are
female

Completed

(i)

Under the Diversity Policy, the definition of senior
executive positions will include all Executives
at CEO level (Level 5) and Executive General
Managers (Level4) as set out in the Company’s
Remuneration Policy.

•

composition of the workforce
between full time and part time;

salary comparisons based on
gender; and

policy development and
implementation.

The Company is a ‘relevant employer’
for the purposes of the Workplace
Gender Equality Act. Our latest report
was lodged in May 2015 with the
Workplace Gender Equality Agency and
can be viewed on their website at
www.wgea.gov.au. This Agency
compiles industry based data for
comparison purposes in the form of
Gender Equality Indicators. One such
indicator used to measure performance
is a gender comparison within the
Information Technology Professional,
Scientific & Technical Services industry.
This graphic, based on 2014 data,
provided the following comparison:

CSG

Comparison group

100%

CEO (or equivalent)

11.4%

20%

Key management personnel

23.8%

37.5%

14.3%

36.4%

30.9%

Other executives/
general managers

Senior
managers

Other
managers

Non-
managers

25.6%

32%

42.6%

46.8%

CSG 14|15 ANNUAL REPORT 15

CORPORATE GOVERNANCE STATEMENT

The Company carries out a
comprehensive employee survey at
regular intervals (the last being during
the 2014 financial year). This survey
covered a number of areas and included
diversity topics such as gender balance,
flexible work practices and diversity
recognition within the business. The
Company has used this survey feedback
during 2015 to continue to improve
and develop strategies that promote
diversity and inclusion throughout the
business.

The Company’s Diversity Policy and
Code of Conduct can be found at
ww.csg.com.au/investors.

1.6 Non-Executive Director

Evaluation

The Board has adopted a policy in
relation to its performance evaluation.
The Board carried out a performance
evaluation during the 2015 financial year
using a self-evaluation questionnaire.
The evaluation focused on:

•

the role of the Board within the
business;

Board composition, skills and
application;

Board procedures and practices;
and

Board culture and behaviour.

In addition to this formal process, the
Chairman communicates regularly with
Directors individually and collectively on
the functioning of the Board and seeks
feedback on his own performance as
part of these discussions.

A standing item is included on the
agenda at the end of each Board
meeting to encourage Directors
to provide regular feedback on the
conduct of Board meetings or any other
Board business to assist in the continual
improvement of Board processes.

1.7 CEO and Executive Evaluations

The Remuneration and Nomination
Committee undertakes the process
of performance reviews for the CEO
and the Executive Management Team
as provided under the Remuneration
Policy. These reviews are assessed
against KPIs set at the start of the
financial year and which are both
financial and non-financial in nature.
Further details of these assessments,
including outcomes, can be found in the
Remuneration Report.

Principle 2:
Structure the
Board to add
value

2.1 Nomination and Remuneration

Committee

The Nomination and Remuneration
Committee is chaired by independent
Non-Executive Director, Mr Philip
Bullock, and operates under a formal
charter that clearly sets out its role,
responsibilities, composition, structure,
membership requirements and the
procedures for inviting non-Committee
members to attend meetings.

The names of the members of this
Committee and their attendance at
Committee meetings is set out in the
Directors’ Report.

The role of this Committee is to support
the Board in fulfilling its statutory and
fiduciary responsibilities, including
ensuring that there are appropriate
processes for items such as Board
renewal and succession, assessment of
performance, new Director induction,
and identifying appropriate industry and
education programs

2.2 Board Skills Matrix

The Board is ultimately responsible
for the oversight and review of the
management, administration and
overall governance of CSG. Accordingly,
the Board has identified the following
matrix which it believes captures the
key skills and diversity attributes which
the Board as a whole requires to deliver
against its objectives. The Board, having
introduced three (3) new Directors in
2014, reviews these attributes annually
and believes it presently possesses this
blend of skills and diversity attributes:

•

Governance

Strategy

Mergers and Acquisitions

Accounting and Financial

Banking and finance leasing

Technology industry experience
and expertise

Customer Service and Delivery

Risk Management

Capital Management and Investor
Relations

The Directors therefore believe the
Board collectively has the necessary
skill set to ensure an appropriate
and diverse mix of backgrounds,
expertise, experience and qualifications
to effectively advise and set the
Company’s strategic direction, and
govern on behalf of shareholders.

2.3 Composition of the Board

The Board consists of six (6) Directors,
of which five (5) are Non-Executive
Directors. During the 2015 financial
year, the Board composition changed
with three (3) new independent Non-
Executive Directors being appointed
(as defined by the Principles and
Recommendations). The Chairman is
a Non-Executive Director. The CEO
is an Executive Director. The skills,
experience and appointment date
of each Director are set out in the
Directors’ Report.

2.4 Director Independence

Based on the applicable Principles and
Recommendations guidelines, to be
independent a Director should be Non-
Executive and:

•

not be a substantial security holder
of the Company or an officer of,
or otherwise associated with, a
substantial security holder of the
Company;

not have, within the last three (3)
years, been employed in an executive
capacity by the Company or another
company within the Group, or been
a Director after ceasing to hold any
such employment;

not be a partner, principal or senior
employee of a provider of material
professional services to a company
in the Group ;

not been within the last three
(3) years, in a material business
relationship (e.g. as a supplier or
customer) to a company within the
Group, or an officer of, or otherwise
associated with, someone with such
a relationship ;

not have a material contractual
relationship with the Company or
another Group company other than
as a Director;

not have close family ties with any
person who falls within any of the
categories described above; or

not been a Director of the Company
for such period that his or her
independence may have been
compromised.

During the 2015 financial year, Messrs
Stephen Anstice, Philip Bullock, Ian
Kew, Mark Phillips and Ms Robin Low
were considered by the Board to be
independent Non-Executive Directors.

2.5 Chairman Independence

Under the guidelines set out above,
the Chairman, Mr Tom Cowan, would
not be considered independent due
to his partnership in a fund manager
which is a substantial security holder
in the Company. This is contrary to
the recommendation that a Chairman
be independent. However, the Board
believe Mr Cowan’s experience as a
Non-Executive Director of the Company
together with his qualifications and
close alignment with security holders
make him the most appropriate Director
to be Chairman. The Board also has an
Independence and Conflicts of Interest
Policy to manage any potential conflicts
arising from the shareholding.

2.6 Director Induction and

Professional Development

The Nomination and Remuneration
Committee has responsibility under
its charter for the oversight of Director
induction and on-going professional
development. The Committee work
with management to introduce a
Director to CSG, including its policies
and procedures. A program is
specifically developed based on the
individual Non-Executive Director’s
role within the Board. Their skills
matrix and their previous experiences
are considered in developing an
appropriate induction program.

Board members are encouraged and
assisted to visit CSG work sites and
Board meetings are rotated to various
locations as part of this program.
Where appropriate, expert advisers,
in conjunction with internal expertise,
undertake presentations at Board
meetings addressing specific elements
of the Company’s business.

Principle 3:
Act Ethically
and
Responsibly

The Company has developed a Code
of Conduct to guide, in particular, the
Directors, the CEO, Chief Financial
Officer (CFO) and other members
of the Executive Management Team
in respect of ethical behaviour. The
Code of Conduct is designed to
maintain confidence in the Company’s
integrity and the responsibility and
accountability of all individuals within
the Company for reporting unlawful and
unethical practices.

The Code of Conduct addresses such
areas as:

•

standard of behaviour;

interests of legitimate stakeholders;

conflicts of interest;

use of information or position;

use of Company property;

confidentiality;

fair trading;

compliance with the law;

• whistle blowing; and

•

political contributions and activities.

The Company’s Code of Conduct
can be found at www.csg.com.au/
investors

Principle 4:
Safeguard
Integrity in
Corporate
Reporting

4.1

Board Audit Committee

The Board has established an Audit
Committee which is chaired by
independent Non-Executive Director
Ms Robin Low, and operates under a
formal charter that clearly sets out the
Committee’s roles, responsibilities,
composition, structure, membership
requirements and the procedures for
inviting non-Committee members
to attend meetings. The Board
has not established a separate risk

management committee, as the Board
has determined that these matters are
appropriately addressed by the Audit
Committee or the full Board.

The names of the members of the Audit
Committee and their attendance at
Committee meetings are set out in the
Directors’ Report.

During the 2015 financial year, the Audit
Committee:

•

consisted only of Non-Executive
Directors;

had a majority of independent
Directors;

was chaired by an independent
chair, who is not the Chairman of the
Board; and

•

had three (3) members.

The Audit Committee provide an
independent review of:

•

the effectiveness of the accounting
and internal control systems and
management reporting, which are
designed to safeguard Company
assets;

the integrity and reliability of
information prepared for use
by the Board, including financial
information;

the accounting policies adopted by
the Company;

the quality of the external audit
function;

external auditor’s performance
and independence as well as
considering such matters as
replacing the external auditor where
and when necessary;

risk profile and mitigation plans;

the Company’s exposure to
significant risks, strategic and
operational improvements in
risk management planning and
implementation; and

the insurance renewal process,
including the appointment of an
insurance broker and review of
policies.

The charter for the Audit Committee
can be found at www.csg.com.au/
investors.

4.2 Assurances

The Board receives assurances from
the CEO and CFO that the annual
declaration provided in accordance with
section 295A of the Corporations Act
2001 is founded on a sound system of

CSG 14|15 ANNUAL REPORT 17

CORPORATE GOVERNANCE STATEMENT

risk management and internal control
and that the system is operating
effectively in all material respects in
relation to financial reporting risks.

The Board has received these
assurances for the 2015 financial year.

4.3 External Auditor

The external Auditor attends the
Annual General Meeting and is available
to answer shareholders’ questions
raised at the Annual General Meeting,
concerning the conduct of the audit, the
preparation and content of the Auditor’s
Report, the accounting policies adopted
and auditor independence.

Principle 5:
Make timely
and balanced
disclosure

The Board recognises that the Company,
as a publicly listed entity, has an obligation
to make timely and balanced disclosure
in accordance with the requirements
of the ASX Listing Rules and the
Corporations Act 2001. The Board is
also of the view that an appropriately
informed shareholder base, and market
in general, is essential to an efficient
market for the Company’s securities.
The Board is committed to ensuring
that shareholders and the market have
timely and balanced disclosure of
matters concerning the Company.

The Company has adopted a formal
Continuous Disclosure and External
Communications Policy to ensure
compliance with its continuous disclosure
requirements and to allow the market
to be appropriately informed of the
Company’s strategy and performance.

Amongst other matters, this policy
requires the immediate notification
to ASX of information concerning the
Company that a reasonable person
would expect to have a material effect
on the price or value of the Company’s
securities as prescribed under ASX
Listing Rule 3.1, except where such
information is not required to be
disclosed in accordance with the
exception provisions of the Listing Rules.

A copy of the policy can be found at
www.csg.com.au/investors.

Principle 6:
Respect
the rights of
shareholders

6.1 Communication with

Shareholders

The Board recognises that the
shareholders are the beneficial owners
of the Company and respects their rights,
and will continually seek ways to assist
shareholders in the exercise of those rights.

In accordance with its communication
strategy, the Company’s website (www.
csg.com.au) is considered to be the
primary means to provide information
to all stakeholders. It has recently
been upgraded to enable information
regarding CSG to be accessed in a clear
and readable manner, including under
the Investors tab:

•

biographies of Directors and the
Executive Management Team;

corporate governance charters and
policies;

all announcements and releases to
the ASX;

copies of presentations to
shareholders, institutional
investors, brokers and analysts;

any media or other releases;

all notices of meetings and
explanatory material;

current and prior Annual Reports
and similar documents; and

any other relevant information
concerning non-confidential
activities of the Company including
new business developments.

The Board also recognises that, as owners
of the Company, the shareholders may
best contribute to the Company’s growth,
value and prosperity if they are informed.
In accordance with the Company’s
Continuous Disclosure and External
Communications Policy, the Board seeks
to empower shareholders by:

•

communicating effectively with
shareholders through periodic
disclosure and market briefings;

enabling shareholders access to
balanced and understandable
information about the Company, its
operations and proposals; and

assisting shareholders participation
in general meetings.

All shareholders are entitled to receive
a hard copy of the Company’s annual
reports upon request. All relevant
announcements made to the market
are made available on the Company’s
website after they have been released
to the ASX.

6.2 Investor Relations Program

In addition to the Company website,
there is a dedicated Investor Relations
page contained within the Annual
Report which provides shareholders
with Company contact details and key
dates.

Shareholders can contact the Company
by mail at Level 1, 357 Collins Street,
Melbourne, Victoria 3000 or by email
at investor@csg.com.au

6.3 Participation in Meetings

The Board is committed to assisting
shareholders participation in meetings.
In particular, the Company requests
that a representative of the Company’s
external auditor be present at all Annual
General Meetings and that shareholders
have adequate opportunity to ask
questions of the auditor at that meeting
concerning the audit, preparation and
content of the auditor’s report.

The next Annual General Meeting of the
Company is scheduled for 19 November
2015 in Melbourne.

Results of the meeting and any
presentations given will be released
to the ASX and subsequently made
available on the Company’s website.

6.4 Electronic Communications

The Company has established an
investor enquiry email address
(investor@csg.com.au). This provides
a means by which shareholders and
other interested parties can contact the
Company and seek information or raise
specific questions.

The Company also encourages
shareholders to register their email
addresses at any time with our Share
Registry, Computershare Investor
Services Pty Limited, and benefit from
the range of communications and
services they can provide electronically.

In addition, as a listed company,
shareholders can also visit the ASX
website (www.asx.com.au) and obtain
information, including the current share
price, under the ASX code “csv”.

7.3 Internal Audit Function

The Company has not formally adopted
an internal audit function at this time. It
has engaged with advisers in the current
year to identify the structure and role of
this function, with the view to appointing
a specialist external firm to carry out
this function in the near term.

In the interim, it continues to undertake
the process identified under the Risk
Management Policy. The outcomes of
this process are reviewed initially by
external advisers and a risk profile report
is provided to the Audit Committee,
capturing key changes, movements and
trends since the last report.

7.4 Economic, Environmental and
Social Sustainability Risk

The Board, in their Directors’ Report,
has identified some key risks that
require management and adoption of
mitigation strategies, where they assess
the inherent risks to be unacceptable.

From an environmental perspective,
the Company does not require any
specific licences to operate the
business. Nevertheless, the Company
takes a proactive approach in
minimising its environmental footprint
and seeks to operate its businesses in a
sustainable way.

In terms of its social obligations, CSG
employs over 600 people across
its operations in Australia and New
Zealand. It monitors the health and
well-being of its employees and reports
to the Board any serious matters of
concern. Under the direction of its
People and Culture team, the Company
has conducted staff surveys and seeks
opportunities to support and assist its
employees. An employee assistance
program has been established in this
regard and provides a means by which
employees can obtain confidential and
independent advice through access to
qualified counsellors on a range of work-
related or personal issues.

Principle 7:
Recognise and
manage risk

7.1

Responsibility for Risk

The Company is committed to
managing its risks in a consistent
and practical manner. Effective risk
management is directly focussed on
the achievement of organisational
objectives and helps ensure the
business delivers on its strategic goals in
alliance with its vision and values.

The Board carries overall responsibility
to all stakeholders for the identification,
assessment, management and
monitoring of the risks faced by the
Company and is assisted in this process
by the Audit Committee.

7.2 Review Risk Management

Framework

The Company has adopted a formal
Risk Management Policy which aims
to ensure that the Board implements
appropriate risk management policies
and procedures in order to protect the
assets and undertaking of the Company.
The approach to risk management and
the effectiveness of its implementation
is based on, as a minimum, the
Australian and New Zealand Standards
AS/NZS 31000:2009.

The Board has previously adopted
a risk management guideline which
is designed to provide a high level
overview of key steps within the
Company’s risk management process
and to provide the tools to facilitate risk
management across the organisation.
The framework enables the identification
and documentation of risk across the
business by requiring management to:

identify the risk;

2. assign the risk to a category;

3. assess the likelihood of a risk;

4. assess the consequences of a risk;

5. apply the risk to the risk matrix; and

monitor, review, communicate and
consult on the risk.

The risk management guideline requires
management to produce a risk profile
report which was presented to the Audit
Committee for its review during the
financial year.

Principal 8:
Remunerate
fairly and
responsibly

8.1 Nomination and Remuneration

Committee

The Board’s primary remuneration
objectives are to motivate Directors and
management to pursue the long-term
growth and success of the Company
within an appropriate control framework,
and to demonstrate a clear relationship
between key Executive performance
and remuneration. The Board believes
that it is in the interest of all stakeholders
in the Company for there to be in place
a Remuneration Policy that attracts and
retains talented and motivated Directors,
managers and employees so as to
encourage enhanced performance of
the Company.

As noted previously, the Board has
an established Nomination and
Remuneration Committee that:

•

consists of a majority of
independent Directors;

is chaired by an independent chair;
and

has three (3) members.

Please refer to the Directors’ Report for
membership and attendance details.

The Committee is responsible for the
following, amongst other matters:

•

nominating, as required, candidates
for the Board to consider for Board
membership;

nominating, as required, candidates
for the role of CEO and setting
criteria for their appointment and
termination;

setting criteria for Board
membership, skill requirements
and, subject to the Company’s
constitution, number of Directors
comprising the Board;

the provision of a Directors’ induction
and education programme;

reviewing and making
recommendations to the Board
on appropriate remuneration for
the Directors, the CEO and the
Executive Management Team;

ensuring that remuneration levels
take into account risks involved,
demands and time requirements of

CSG 14|15 ANNUAL REPORT 19

CORPORATE GOVERNANCE STATEMENT

Share Trading Policy

The Company has adopted a formal
Share Trading Policy, which applies to
Directors, the Company Secretary, all
senior Executives, Key Management
Personnel and employees of the
Company and their associates (Officers).

An Officer may not deal in any of the
Company’s securities at any time if they
have inside information.

Subject to this restriction an Officer
may trade in securities at any time apart
from certain blackout periods.
These being:

•

in the period between the close
of a financial period and the
announcement of results for that
period;

in the four (4) week period leading
up to the Annual General Meeting;
or

at any other time the Company
nominates.

If they do wish to trade, Executives of
a senior level must obtain clearance
under the policy prior to trading.

Officers must advise the Company
Secretary in writing of the details of
completed transactions within specified
timeframes following each transaction.
Under this policy, participants in equity
based plans offered by the Company
are not permitted to utilise mechanisms
to limit the risk associated with that plan.

The Company Secretary must maintain
a register of securities transactions.

The Company must comply with its
obligations to notify ASX in writing of any
changes in the holdings of securities or
interest in securities of the Company by
Directors.

each role and relevant industry and
related benchmarks;

developing and recommending to
the Board remuneration incentive
programs such as bonus schemes
and company share schemes; and

developing, maintaining and
monitoring appropriate remuneration
policies and procedures.

•

8.2 Remuneration Policy

During the 2015 financial year, the
Board reviewed and adopted a revised
Remuneration Policy to govern
remuneration paid to employees and
senior Executives, including Non-
Executive Directors.

Remuneration paid to Non-Executive
Directors is clearly distinguished from
that of Executive Directors and senior
management. Please refer to the
Remuneration Report for details of
remuneration for all Directors and Key
Management Personnel.

Whilst it is not mandatory for Non-
Executive Directors to hold CSG shares,
all current Directors do so and their
share holdings are disclosed via the ASX
and the Remuneration Report.

8.3 Equity Based Remuneration

As detailed in the Remuneration Policy,
the Company believes that equity based
remuneration is a critical component
in achieving the long term objectives
of the Company. To this end, it offers
a Long Term Incentive Plan (LTIP) to
the CEO and nominated Executives.
Details of this LTIP are provided in the
Remuneration Report.

In addition, the Company utilises Tax
Exempt Share Plans to motivate and
encourage performance across the
Company generally. Under these plans,
eligible employees can be offered the
opportunity to apply for an allocation of
$1,000 worth of CSG shares, subject to
the rules that apply under these plans.

To govern these equity opportunities
and holdings, the Company has a Share
Trading Policy which stipulates processes
to be followed and guides Executives and
employees on any equities they hold or
wish to hold in the Company. A summary
of this policy being:

INVESTOR RELATIONS

Investor Relations

ASX Listing
CSG Limited is listed on the Australian Securities Exchange
(ASX). Find us on the ASX website (asx.com.au) under
the trading code “CSV”. Our share price is available on
that web site and is also available in major Australian
metropolitan newspapers.

Shareholder Communications
We are committed to delivering a high level of service to
all shareholders. As a listed entity, we release information
via the ASX and also communicate to shareholders via a
variety of means, including our website, an Annual Report,
dividend statements, notices of meetings and other
advices. Details of our website and how you can contact
us by email are:

Email: Investor@csg.com.au
www.csg.com.au

Annual General Meetings
We hold an Annual General Meeting where shareholders
are able to attend and vote on a range of matters including
Non-Executive Director elections, the Remuneration
Report and any other business included in the Notice of
Meeting. These meetings also provide shareholders with
the opportunity to meet the Board and key members of
the Executive Management Team.

Our next Annual General Meeting is currently scheduled
to be held on Thursday, 19 November 2015 at 1:00pm
(AEDT) at the Sheraton Melbourne Hotel, Level 2, 27 Little
Collins Street, Melbourne, Victoria 3000.

Share Registry
If you have queries relating to your security holding or
wish to update your personal or payment details, please
contact the Share Registry.

CSG Limited
C/- Computershare Investor Services Pty Limited
GPO Box 2975
Melbourne VIC 3001

Phone: +61 1300 850 505
Fax:
www.computershare.com

+61 3 9473 2500

Key Dates
Our current key dates are:

Annual General Meeting
Thursday, 19 November 2015

1HY16 Results
Monday, 15 February 2016*

FY16 Results
Monday, 15 August 2016*

*These dates are subject to change without notice.

CSG 14|15 ANNUAL REPORT 21

DIRECTORS’ REPORT

The Directors present their report
together with the financial report of the
consolidated entity consisting of CSG
Limited (CSG or the Company) and
its subsidiaries (CSG Group), for the
financial year ended 30 June 2015 and
Auditor’s report thereon. This financial
report has been prepared in accordance
with Australian Accounting Standards.

1. Directors

The qualifications, experience and
special responsibilities of each
person who has been a Director of the
Company at any time during or since the
end of the financial year is provided on
pages 22 and 23 of this Annual Report.
The details of the Company Secretary
as at the year end is provided below.

Mr. Thomas Cowan

Non-Executive Chairman
Member, Audit Committee
Member, Nomination and Remuneration
Committee

Tom Cowan is a partner of TDM
Asset Management, a Sydney based
private investment firm. TDM Asset
Management invests in public and private
companies globally. Mr. Cowan has over
15 years of financial markets experience,
including roles in corporate finance
and investment banking at Investec
Wentworth and KPMG Australia. He has a
Bachelor of Commerce (Honours – Class
1) from the University of Sydney.

Mr. Cowan is currently a Non-Executive
Director of Baby Bunting Group Limited.

Appointed 8 February 2012
Appointed Chairman 15 August 2012

Ms. Julie-Ann Kerin

Managing Director

Prior to Ms. Kerin’s appointment as CEO,
she was the Group General Manager
of the former Technology Solutions
Division for five years, and achieved

revenue growth from $9m to $183m.

She has more than 20 years’ experience
as a senior executive managing both
private and public companies across the
information technology sector. Prior to
joining CSG, Ms. Kerin was responsible
for the global management of operations
and staff across Asia, the United States,
Australia and Europe for a number of
organisations. She has also held roles with
IT companies Actuate, Haht Commerce,
Genasys Inc and Computer Power.

Ms. Kerin is a member of the Australian
Institute of Company Directors.

Appointed 1 February 2012

Mr. Ian Kew

Non-Executive Director
Chairman, Audit Committee
Member, Nomination and Remuneration
Committee

Ian Kew is the Chief Executive Officer
for Airport Development Group Pty
Ltd which has interests in Darwin
International, Alice Springs and Tennant
Creek Airports. He graduated with
an Economics Degree from Monash
University and joined Exxon for two
years before being employed with Shell
Australia for twenty years prior to joining
Northern Territory Airports in 2001.

At Shell Australia, Mr. Kew worked in
a variety of oil marketing, operations,
change management, strategy and
special project positions in Hobart,
Sydney, Brisbane, Darwin and Melbourne.
Previously, he was on the Board of the
Automobile Association of the Northern
Territory (AANT), was Chair of the Darwin
Symphony Orchestra and the Charles
Darwin University Foundation. He is also
a Director of the Australian Airports
Association (AAA) and on the Board
of the Museum and Art Gallery of the
Northern Territory (MAGNT).

Mr. Kew is a National Councilor of
Creative Partnerships Australia and
a Fellow of the Australian Institute of
Company Directors.

Appointed 1 March 2007
Ceased 20 November 2014

Mr. Philip Bullock

Non-Executive Director
Chairman, Nomination and
Remuneration Committee
Member, Audit Committee

Appointed a Director of CSG in August
2009, Mr. Bullock was formerly Vice
President, Systems and Technology
Group, IBM Asia Pacific, Shanghai, China.

Prior to that position he was Managing
Director of IBM Australia and New
Zealand. His IBM career spanned almost
30 years in the Asia Pacific region.

Mr. Bullock is a Non-Executive Director of
Perpetual Limited and Hills Limited, and
was previously a Non-Executive Director
of Healthscope Limited. Over the years
he has served on a number of Federal
Government bodies, most notably as the
Chair of Skills Australia.

Appointed 1 August 2009

Ms. Robin Low

Non-Executive Director
Chairman, Audit Committee

Robin Low was formerly a partner at
PricewaterhouseCoopers for over 17
years and has extensive experience
in assurance and risk management,
particularly in the financial services area.

Appointed 20 August 2014

Mr. Mark Phillips

Non-Executive Director
Member, Audit Committee

Mr. Phillips is currently a Non-Executive
Director of General Reinsurance Australia
Limited and General Reinsurance Life
Australia Limited (a Berkshire Hathaway
company) and a Non-Executive Director
of Cancer Council (NSW).

Mr. Phillips was formerly a Non-
Executive Director of Interlink Roads Ltd
and ASB Bank Limited in New Zealand.

Mr. Phillips has a Bachelor of Commerce
and a Masters of Commerce from the
University of New South Wales and is
a Fellow of the Australian Institute of
Company Directors.

Appointed 20 August 2014

Mr. Stephen Anstice

Non-Executive Director
Member, Nomination and Remuneration
Committee

Mr. Anstice has a Bachelor of Arts
(Economics) from Macquarie University
and a Graduate Diploma from the
Securities Institute of Australia.

Appointed 20 August 2014

2. Company Secretary

Christopher Lobb

Company Secretary

Chris Lobb has an extensive background in company secretariat, corporate governance
and corporate restructuring for both private and ASX listed public groups. Mr. Lobb joined
CSG in December 2014, having previously held company secretarial positions in the
agriculture and property sectors. He has also held Non-Executive Directorships in the not
for profit and TAFE sectors.

Mr. Lobb is a Fellow of the Governance Institute of Australia, a Member of the Australian
Institute of Company Directors and a CPA. He holds a Bachelor of Business (Accounting)
from Swinburne University of Technology.

Appointed 19 December 2014

3. Directors’ Meetings

The number of Directors’ meetings (including meetings of Committees of Directors) and
number of meetings attended by each of the Directors of the Company during the financial
year are:

Board Meeting

Audit
Committee

Nomination &
Remuneration
Committee

s
g
n
i
t
e
e
M

)
i
(

d
e
H

s
g
n
i
t
e
e
M

d
e
d
n
e
t
t
A

s
g
n
i
t
e
e
M

)
i
(

d
e
H

s
g
n
i
t
e
e
M

d
e
d
n
e
t
t
A

s
g
n
i
t
e
e
M

)
i
(

d
e
H

s
g
n
i
t
e
e
M

d
e
d
n
e
t
t
A

6(ii)

4(ii)

Director Name

Current

Mr. Thomas Cowan

Mr. Philip Bullock

Mr. Mark Phillips

Mr. Stephen Anstice

Ms. Robin Low

Ms. Julie-Ann Kerin

Former

Mr. Ian Kew

(i)

Number of meetings held during the time the Director held office or was a member of the relevant committee during
the financial year.
Ms. Julie-Ann Kerin attended by invitation.

(ii)
In addition to the above meetings, the Directors’ held three (3) meetings by circular resolution.
In addition to the above meetings, a committee of the Board comprising of Mr. Thomas Cowan, Ms. Robin Low and Ms.
Julie-Ann Kerin met on one (1) occasion for the purposes of approving the Half Year Financial Statements.

CSG 14|15 ANNUAL REPORT 23

DIRECTORS’ REPORT

4.
Principal
Activities

The principal activities of the CSG
Group during the financial year were
print and business technology solutions
in Australia and New Zealand supported
by in-house equipment financing.

There have been no significant changes
in the nature of the activities of the CSG
Group during the financial year.

5.
Operating and
Financial Review

1. Operations overview

CSG is a leading Technology as a Service
provider in Australia and New Zealand,
supported by an in house equipment
financing business.

CSG is the largest non-manufacturer of
print and business technology solutions
in the Australia and New Zealand
marketplace, and has a national sales and
service footprint in both countries. CSG
services more than 20,000 customers
ranging from small-to-medium
enterprises, through to large corporate,
government and commercial clients. CSG
has developed a unique product suite to
deliver a single source technology solution
to all its customers - regardless of size.

In the Australian market, CSG works
closely with a number of major business
partners, including Canon, Samsung,
Lexmark, HP, 8x8.com and FaceMe, to
deliver a brand agnostic end-to-end
product and service offering which is
unique in the Australian marketplace. In
the New Zealand market, CSG operates
under the Konica Minolta brand and is
one of the largest suppliers of print and
technology sales and services to the
corporate, government and commercial
markets.

A key differentiator for CSG in the region
is the breadth and quality of service
it provides its customers. Premium
service combined with efficient
financing and high quality technical
advice is paramount to the CSG value
proposition. As the only listed company

of size and scale that can provide sales,
service and support access in Australia
and New Zealand, CSG truly differentiates
itself from the manufacturers, office
supply and technology retailers,
integrators, equipment finance providers
and independent dealers with whom it
competes.

CSG currently employs approximately
650 staff across Australia and New
Zealand with offices in 30 locations.
CSG has a commitment to diversity
and recognizing and rewarding its staff.
CSG strives to achieve above industry
standard benchmarks for workforce
productivity whilst delivering the highest
level of staff satisfaction.

2. Review of Group Operations

CSG expanded its product and service
offering in FY2015 to better meet the
needs of its customers. Increasing
reliance on technology has resulted in
SME’s and larger organisations alike to
look for technology providers capable
of delivering a single point of contact
for their entire office technology
requirement. CSG’s full-spectrum
product offering delivers this, and gives
a clear value proposition to its broad
customer base. CSG creates genuine
value for its customers by providing
a one stop total business solutions
offering, saving the customer their most
valued assets: time and money.

Key operational achievements for CSG
in FY2015 included:

•

Launched the first of our
Technology as a Service offerings –
Boardroom as a Service

Established relationships with key
partners, such as 8x8 in preparation
for the launch of other “as a Service”
offerings

Executed an agreement with HP to
launch the CSG Cloud Marketplace
to support the delivery of our
Technology as a Service offering

Three (3) major contract signings
in Enterprise Solutions for Print as a
Service

Non-print sales represented more
than 8.5% of equipment sales
revenue in Australia

Achieved in the field Net Promoter
Score2 (NPS) score of 58

Creation of CSG ‘Customer Hub’
built on the Salesforce.com

1
2

Figures contained in the “Review of Group Financial Performance” are unaudited.
Net promoter score is a method of measuring customers’ loyalty. To calculate NPS, customers are categorised
as "Promoters", "Passives" or "Detractors" based on how likely they would be to recommend CSG to a friend or
colleague. The percentage of Detractors is then subtracted from the percentage of Promoters.

platform to deliver one common IT
platform across the business and
one common set of processes

•

Recruited key personnel to ensure
successful delivery of Technology
as a Service platform

Review of Group Financial
Performance1

The Board was pleased that the business
again achieved solid growth in underlying
EBITDA during the 2015 financial year.
During the year, CSG delivered on a
number of key initiatives that have now
positioned CSG for continued top line
growth, as well as improved profitability
over the medium term.

CSG achieved revenue growth of 13%
and Reported EBITDA growth of 20%
in FY2015. The CSG Group saw growth
across all three divisions, both in
Australia and in New Zealand.

Key highlights from the results include:

•

total revenue increased by 13% to
$224.3m;

underlying EBITDA increased by 15%
to $33.5m;

reported NPAT increased by 19% to
$14.3m;

underlying NPAT before customer
contract amortisation increased by
12% to $21.3m; and

solid conversion of underlying
EBITDA to operating cash flow
excluding the investment in lease
receivables and non-recurring items.

Operating Performance

The Board measures the performance
of the business using Underlying EBITDA
after taking into account all non–
recurring or one off items. This is an
unaudited measure which is reconciled
to the audited Net Profit After Tax
(NPAT) in the table overleaf.

a. Revenue

Group revenue grew by 13% to $224.3m
during FY2015. This was driven by:

•

revenue from sale of goods
increasing 24% to $103.6m;

Finance Solutions revenue growth
of 24% driven by growth of Lease
Receivables to $210.0m; and

solid new customer sales growth
in Australia and New Zealand. New
customers were 14% of equipment in
Australia compared to 16% in 2014. In
New Zealand, there was 31% growth in
new customer sales during the year.

Revenue from continuing
operations

NPAT

Add Tax

Add Depreciation and
Amortisation

Add Interest expense/
(income)

EBITDA

Add Non-recurring items

1. LTIP/Employee Share Plan

2. Deferred consideration

& legal

3. Stamp Duty on
Acquisition

4. Transaction advisory

costs

Total

Underlying EBITDA

FY15
$m

224.3

14.3

8.3

4.5

1.4

28.5

4.0

0.3

0.4

5.0

33.5

b. Expenses

Management has sustained tight
controls over expenditures to deliver
a slight increase in Underlying EBITDA
margin from 14.6% to 14.9%. Key drivers
of this improvement were:

•

total expenses grew by 11% year on
year compared to a 13% increase in
revenue;

cost of goods sold expenses
increased by 8% year on year whilst
revenues from sales of goods and
services increased by 11%;

non-COGS related costs (excluding
share based payments) increased
by 11% year on year compared to 13%
growth in Group revenue; and

borrowing costs on the Finance
Solutions continues to benefit from
the low interest rate environment in
delivering 50% gross margin.

Review of Group Financial
Position

A closing cash balance of $24.8m, after
dividend distributions of $25.3m made
during the year. Included in closing cash
balance is an amount of $13.9m held
in restricted cash accounts under the
terms of the CSG Finance Solutions
debt facilities (refer note 6).

Cash conversion has improved in
FY2015 after excluding the impact of
investment in the Lease Receivables
and non-recurring items.

EBITDA (underlying)

13.4

15.7

29.1

15.4

18.1

33.5

1H14

2H14

FY14

1H15

2H15

FY15

(21.1)

(11.8)

(32.9)

(19.1)

(0.2)

(19.3)

Operating cash flow
(reported)

+ tax paid

+ net interest paid

+ non-recurring cash items

+ change in lease receivables

Ungeared pre-tax cash flow

Profit to cash conversion

55%

100%

3.7

0.3

1.3

23.2

7.4

2.8

0.6

1.3

22.8

15.7

6.5

0.9

2.6

46.0

23.1

79%

3.0

0.6

0.2

27.1

11.8

1.8

0.9

1.0

14.7

18.2

77%

102%

4.8

1.5

1.2

41.8

30.0

90%

Lease receivables in the Finance
Solutions business has grown to
$210.0m ($161.5m in FY2014) with 89%
funded by associated debt (86% in
FY2014). The majority of this growth has
been due to the continued expansion of
the Australian operations.

Debt associated with lease receivables
has improved the advance rate from
86% to 89% due to a revision to the
banking facilities.

Total capital returned to Shareholders
including the current final dividend is
now $134m in the three years since the
commencement of the Restructuring
Plan in July 2012.

5. Divisional Review

a. Business Solutions

CSG Business Solutions provides the
sales, support, service and financing
of print and business technology
equipment to more than 20,000 SME
customers across Australia and New
Zealand. CSG’s scale, national presence
and significant brand partnerships gives
it the flexibility to service businesses
of any size, and in any location across
Australia and New Zealand.

SME’s have traditionally relied on up
to 15 separate suppliers for a variety
of business and print equipment
requirements, each with separate billing,
leasing and service relationships.

In FY2015, CSG made significant progress
in positioning itself as a single provider
for all SME business technology needs.
CSG Business Solutions can now deliver
significant time savings and improved
cash flow management to customers
through the provision of centralised
ordering for all business technology
through a single billing system and finance
relationship. This offering is currently
unique to the market in Australia and
New Zealand. The CSG ‘Technology
as a Service’ product suite is currently
comprised of the following offerings:

•

‘Print as a Service’

‘Board room as a service’

‘Communication as a Service’

‘Desktop as a Service’

CSG customers will be able to subscribe
to technology services and manage their
IT on a single platform through the CSG
customer market place. This marketplace
will provide self service access for
customers to browse, request and
approve new CSG services (conferencing,
communications, business applications,
data management) and technology
equipment (desktop, laptop, tablets,
boardroom display).

The CSG customer marketplace will
provide a number of significant benefits
to CSG Business Solutions customers:

•

replace multiple vendors with one
invoice;

predictable monthly subscription
payments;

no large capital outlay – equipment
fully financed by CSG;

• proven best of breed technology;

•

easily scalable in line with customers’
needs; and

single point of technical support
(Level 1 / 2).

It is anticipated that earnings growth will
be driven in FY2016 by a number of key
initiatives, including:

•

focused effort on the sale of the
expanded product and service
offerings to existing customers hence
a greater share of the customer IT
spend will be directed to CSG;

growth in print market share by using
the other technology products to
penetrate print vendors customer
base;

increase sales leads by improving
online presence and repositioning
CSG Business Solutions as a full
service IT organization;

CSG 14|15 ANNUAL REPORT 25

DIRECTORS’ REPORT

•

further evolution of the new internal
use IT platform to support improved
customer service, increased
productivity in service and operations
and focused targeting for potential
and existing customers; and

leveraging the relationship and high
quality profile and reputation of world
class business partners like HP, 8x8,
Samsung, Canon and Konica Minolta.

b. Enterprise Solutions

CSG Enterprise Solutions provides
managed service based print and
technology solutions for Enterprise,
education and government customers
in Australia and New Zealand. In
Australia, CSG is the only national,
brand agnostic provider of print
solutions in the market, and in
New Zealand the Group operates
a well-established and market
leading business under the Konica
Minolta brand. Following the sale of
the Technology Solutions business
to NEC in July 2012, the Enterprise
Solutions business has been restrained
from competing in the IT managed
services sector. That restraint ended
on 3 July 2015 and the Enterprise
Solutions business is now preparing
to reenter the IT managed services
sector focusing on Tier 2 Enterprise,
government and education.

The same product suite that will be the
platform for the delivery of ‘Technology
as a Service’ in the Business Solutions
business will scale to deliver a robust
and scalable platform to deliver
enterprise IT managed services. The
focus of FY16 in the Enterprise Solutions
business will be to continue to grow
the Managed Print Services business
whilst also growing the pipeline for next
generation IT managed services.

During FY2015, Management
successfully leveraged a number of
competitive advantages to grow the
division in Australia and New Zealand.
These include:

•

being the only print and business
technology provider with a national
service and sales team in Australia
and New Zealand;

providing a level of assurance to
government customers by being
ASX listed and therefore compliant
to ASX reporting and regulatory
standards;

leveraging the expertise of an
internal financing capability to
develop innovative and flexible
solutions for Enterprise customers;

•

possessing the ability to sell, install,

service and repair all major multi-
function device brands in Australia,
and leverage Konica Minolta’s strong
support and presence in the New
Zealand market; and

•

having the scale to be able to service
customers of all sizes.

Enterprise Solutions made good
progress in FY2015 signing managed
print contracts with University of
Sydney, Victoria University and a
mid-sized enterprise business. The
total contract value of these deals
exceeded $40m over 5 years. CSG was
also chosen for the Queensland Whole
of Government ‘Print and Imaging as a
service’ panel.

Growth opportunities exist in both
markets, with a strong pipeline in place
to expand market share in Australia, and
build on the existing large enterprise
business currently in place in New
Zealand. The customer acquisition
strategy for Enterprise Solutions
includes:

•

partnering with Tier One integrators
to provide services in consortiums
for major Enterprise or government
customers;

expand existing customer
relationships to provide IT managed
services particularly focusing in
the tertiary education and Tier 2
Enterprise sector; and

•

leveraging growth from government
panels.

c. Finance Solutions

CSG Finance Solutions is a specialist
service provider of lease and rental
products for print and business
technology assets sold and serviced by
CSG in both Australia and New Zealand.

In New Zealand, CSG’s finance business
is an established, well managed
business with strong performance,
driven by bad debts of less than 0.5%
and a strong return on equity of 47% for
the last half.

The Australian finance business,
launched in March 2013, has seen a
rapid sales uptake. The book is driven
by 95% conversion of customers,
which includes government, corporate
and commercial businesses across
Australia. Overall, Leasing Receivables
grew 30% to $210m in FY2015, with
revenue up 24% to $23.6m.

CSG Finance is a critical element
in enabling the Business Solutions
business to be able to deliver bundled
‘Technology as a Service’ offerings and
also to be able to finance the equipment

component of large annuity enterprise
contracts. Growth targets for this
division include:

•

continuing to support the current
print business in both the existing
customer and the targeting of new
customers;

increasing penetration into Enterprise
Solutions customer base; and

supporting the growth of the
‘Technology as a Service’ product
suite.

6. Market sizing

The current market size for sales and
service of multifunction devices in
Australia and New Zealand is estimated
at $2.5 billion1. CSG currently captures
8% of that market in Australia and New
Zealand. The business-to-business
technology products and service
market is much larger at $12 billion.

Management believe that, given the
size of these markets, CSG is well
positioned to capitalise on its growth
strategies to establish itself as the
market leading, end-to-end business
technology provider.

A$2.5 billion multifunction device
market across Australia and NZ.

92%

 CSG

 Rest of market

Sources: IBISWorld Industry Report Computer
and Software Retailing in Australia; Constella-
tion Research Unified Communication Trends;
Forrester Software-as-a-service in ANZ; IBISWorld
Industry Report Stationary Goods Retailing; IDC

A$12 billion business-to-business
technology products and services market.

35%

$7.56b

$1.10b

$1.58b

$1.78b

 Stationery

 Software as a Service

 Unified communications technology

 Computers and software

62%

 Dealer sales

 Direct sales

 Distributor sales

7. Risk Management

Corporate Governance

The Board of CSG Limited believes
that a strong corporate governance
framework helps to underpin a strong
company. CSG’s corporate governance
policies and practices are set out in the
Corporate Governance Statement.

Principal Risk Area – Innovation
Inability to optimise full value of
innovation opportunities in services,
products, processes and commercial
solutions to support growth
opportunities.

Risk Management Approach
CSG has a proactive growth strategy
that combines leadership, partnerships
and continual review.

Principal Risk Area –
Foreign Exchange
Revenue from non-Australian
operations is denominated primarily
in New Zealand Dollars (NZD) and
equipment purchases for New
Zealand operations are primarily in US
Dollars (USD). Fluctuations in foreign
currency exchange rates may result in
corresponding movements in revenues
and earnings.

Risk Management Approach
Currency risk is hedged in accordance
with treasury risk policy. The treasury
risk policy aims to manage the
impact of short-term fluctuations in
CSG’s earnings. Derivative financial
instruments (forward exchange
contracts) and options are used to
hedge exposure to fluctuations in

foreign exchange rates. Over the longer
term, permanent changes in market
rates will have an impact on earnings.

and Konica Minolta Inc. who supply the
majority of inventory. It is critical to
maintain relationships.

Principal Risk Area – Interest Rate
The CSG Group has both corporate
and operational debt facilities.
Movements in interest rates could have
an adverse impact on cash flows and
operating results.

Risk Management Approach
To minimise interest rate risk between
the fixed rate assets and variable rate
liabilities, Management uses interest
rate swaps to broadly match fixed rate
assets to floating rate liabilities.

Principal Risk Area –
Availability of Debt
CSG’s finance divisions in Australia
and New Zealand provide rental and
lease products. These businesses are
sensitive to credit cost and availability
as well as market liquidity. Should there
be any disruptions in the credit markets
or changes in the procurement of
credit there could be a reduction in the
availability of credit or an increase in the
cost of sources of funding.

Risk Management Approach
Credit indicators and market conditions
are monitored on a regular basis by
management. CSG has also recently
completed the refinancing of the
majority of facilities to diversify sources
of financing to mitigate this risk. External
expert advice is also sought to keep
abreast of market developments.

Principal Risk Area – Key Suppliers
CSG’s key suppliers are Canon Australia

Risk Management Approach
These are long standing relationships
managed by CSG’s Executive Team and
the Board through long term contracts
under commercial terms.

Principal Risk Area –
Key Personnel
CSG’s continued success is highly
dependent upon the efforts of
the Executive Team and other
key employees including sales
professionals. The retention of these
skilled personnel is critical.

Risk Management Approach
CSG has introduced a Long Term
Incentive Plan for Executive personnel
and other key management, including
the key sales team, and a share based
plan for all other employees across
Australia and New Zealand.

Principal Risk Area –Competition
The Company’s business is susceptible
to competition in the markets in which
the Company operates. Additionally,
competitive pricing strategies and
demands from high value clients
seeking preferred supplier agreements,
may impact on the Company’s profit
margins and profit share.

Risk Management Approach
The risk is mitigated by a large diversified
client base with multi-year agreements
in place reducing the impact of pricing
strategies and demands from any one
customer.

CSG 14|15 ANNUAL REPORT 27

DIRECTORS’ REPORT

6. Remuneration Report

Dear Shareholder

On behalf of your Board, I am
pleased to present CSG’s 2015
Remuneration Report which sets
out remuneration information
for the Chief Executive Officer
(CEO), the Group Executive,
Non-Executive Directors and the
broader employee group.

The Board recognises that the
performance of CSG depends on
the quality and motivation of its
people, including both the Group
Executives and the approximate
650 employees across Australia
and New Zealand. CSG’s
remuneration strategy seeks to
appropriately reward, incentivise
and retain key employees.

At the November 2012 Annual
General Meeting, the shareholders
approved a three stage multi-
year Long Term Incentive Plan
(LTIP) for our key Executives with
hurdles based upon growth in the
share price, with vesting to occur
on the second, third and fourth
anniversary of the offer date. Given
the continued strong performance
of the Company, we were pleased
to advise that these Executives

exceeded the hurdles for Stage 1
(which vested on 30/11/14) and are
well on the way to exceeding the
hurdles for Stages 2 and 3 which
vest on 30/11/15 and 30/11/16
respectively. Since the inception of
this Executive LTIP, shareholders
have seen strong Total Shareholder
Returns as outlined in Section 10.1.

At the same time, the Board
introduced a Staff Incentive Share
Plan for all employees, which
offered eligible employees in
Australia and New Zealand, AUD
$1,000 worth of CSG shares on
a tax free basis. These shares
have been subsequently issued
annually (subject to the satisfactory
performance of the Company and
Board approval). To date, we have
issued approximately 875,000
shares to our employees and
have approved a further issue in
FY2016 in accordance with the Staff
Incentive Share Plan rules. We are
pleased to report that over 90% of
CSG eligible employees participate
in this plan.

At this time, we are designing the
next multi-year LTIP for our key
Executives and it is our intention
to bring this to the 2015 Annual

General Meeting later in the year for
shareholder approval.

The Board also notes that FY2015
has been another strong year for
CSG, both in terms of revenue
and profit growth. As a result,
we are pleased to confirm that
our executives achieved a high
percentage of their Short Term
Incentive payments as outlined in
the Report in recognition of their
latest achievements.

Thank you for taking the time to
review the 2015 Remuneration
Report. The Board is confident that
CSG’s remuneration practices are
well designed to help best drive
outstanding employee and Executive
performance. It is this performance
that is required to execute our
business strategy and create
sustainable shareholder value.

Mr. Philip Bullock

This report covers the Key Management
Personnel (KMP) of CSG. KMP are
employees with authority and responsibility
for planning, directing and controlling
the activities of large business units that
can materially affect the performance
of the CSG Group. As such the KMP for
the year ending 30 June 2015 are:

•

all persons who have held the
position of Director of CSG Limited
during the financial year;

Julie-Ann Kerin, CEO/Managing
Director;

Neil Lynch, Chief Financial Officer
(CFO);

Duncan Powell, Chief Operating
Officer (departed 3 July 2014);

Declan Ramsay, Executive General
Manager, Business Solutions Australia;

Warick Beban, Executive General
Manager, Business Solutions New
Zealand; and

Stephen Birrell, Executive General
Manager, Enterprise Solutions.

7. Remuneration
Governance

The policy for determining the nature and
amount of remuneration of Directors
and Group Executives is agreed by
the Board. The Board has established

Remuneration Mix

a Nomination and Remuneration
Committee (N&R Committee), which is
responsible for the following:

•

reviewing and recommending
to the Board the appropriate
remuneration of the CEO, members
of the Group Executive and Non-
Executive Directors;

ensuring that remuneration levels
take into account risks involved,
demands and time requirements of
each role and relevant industry and
related benchmarks;

developing and recommending to
the Board remuneration incentive
programs such as bonus schemes
and group share schemes;

developing, maintaining
and monitoring appropriate
remuneration policies and
procedures;

ensuring that the structure of Non-
Executive and Executive Directors’
remuneration is clearly distinguished;

ensuring that equity based Group
Executive remuneration is paid in
accordance with thresholds set out
in plans as disclosed or approved by
shareholders; and

reviewing and approving appropriate
disclosures to be included in the
Company’s Annual Report regarding
the N&R Committee, its activities
and performance.

Below is a summary of the remuneration mix for the CEO and CFO, which includes Base
Salary, Short-Term Incentives (STI) and Long-Term Incentives (LTI) as currently on issue:

LTI

STI

BASE SALARY

ACHIEVEMENT OF A SHARE PRICE HURDLE

CORPORATE SCORECARD
(CEO & CFO 100%)
(Financial - 60% & Non-Financial - 40%)

Below is a summary of the remuneration mix for a Group Executive , which includes Base
Salary, Short-Term Incentives (STI) and Long-Term Incentives (LTI) as currently on issue:

LTI

STI

BASE SALARY

ACHIEVEMENT OF A SHARE PRICE HURDLE

50% DIVISIONAL SCORECARD
(Financial & Non-Financial)

50% CORPORATE SCORECARD
(Financial - 60% & Non-Financial - 40%)

The Board obtains professional advice
where necessary to ensure that the
Company attracts and retains talented
and motivated employees and Non-
Executive Directors who can enhance
company performance through their
contributions and leadership.

8. Remuneration
Objectives,
Policy and
Practice

The Board, with assistance from
the N&R Committee, is ultimately
responsible for ensuring that CSG’s
Remuneration Policy is consistent with
the business strategy and performance,
supporting increased shareholder
wealth over the long term.

The objective of the Remuneration
Policy is to ensure the reward for
performance is competitive and
appropriate for the results delivered.

The Remuneration Policy details a
framework for remuneration to be paid
across the Company, from employees
to Group Executives, including Non-
Executive Directors, which includes a
mix of fixed and variable remuneration,
and short-term and long-term
performance based indicators.

Fixed remuneration

•

Fixed remuneration is determined
according to industry standards,
relevant laws and regulations,
labour market conditions and the
profitability of the CSG business.
It consists of base remuneration
and superannuation. Base
remuneration includes cash salary
and any salary sacrifice items (e.g.
motor vehicles).

CSG provides employer
superannuation contributions at
Government legislated rates (2015:
9.5% in Australia and 3% in New
Zealand), capped at the relevant
concessional contribution limit
unless part of a salary sacrifice
election by the employee.

The Board determines an appropriate
level of fixed remuneration for the
CEO and Group Executives, with
recommendations from the N&R
Committee.

Fixed remuneration is reviewed
annually and adjusted where
appropriate.

CSG 14|15 ANNUAL REPORT 29

DIRECTORS’ REPORT

Short-Term Incentives

This year, the Corporate Scorecard was based on the following targets:

Category

Financial (60%)

Target

Weighting

Achieve EBITDA Targets within guidance range

Achieve revenue growth within guidance

Ensure cash targets are achieved

Non-Financial (40%)

Retain identified key talent

Improve Net Promoter scoring for customer engagement

Achieve business transformation plan

Manage relationships with key stakeholders

Identify and execute a strategic growth initiative

25%

10%

25%

10%

To encourage and reward Management
for extraordinary performance, there
is an overachievement attached to
the EBITDA target that will result in
that component being paid at the
percentage of the overachievement
multiplied by the KPI weighting.

Divisional Scorecards are established
for Group Executives and Senior
Managers which are linked to business
performance, for which they are directly
responsible. The STI payment is based
on the following percentage framework:

CEO/MD & CFO:
100% Corporate Scorecard

Executive General Managers:
50% Corporate Scorecard/
50% Divisional Scorecard

Senior Managers:
30% Corporate Scorecard/
70 % Divisional Scorecard.

From time to time, other entitlements
in addition to the STI may be provided
to Group Executives to reward
performance that is considered
exceptional in terms of shareholder
return or Company performance.
These entitlements are approved at the
discretion of the N&R Committee.

Long-Term Incentives

•

While STI rewards past
performance, the Board considers

it essential that the Group Executive
and other Management (together
the Senior Executives) have reward
incentives linked to longer-term
Company performance and to
value creation for shareholders.

Following approval by the
Shareholders at the 2012 Annual
General Meeting, the CEO and
Senior Executives were issued
with performance rights under the
Executive LTIP (LTIP Issues 5, 6 & 7).
Each performance right represents
an option to receive one ordinary
share in the Company, subject to
the satisfaction of the relevant
vesting conditions.

The final stage of the current
Executive LTIP for Senior
Executives will vest in November
2016 (subject to hurdles being
met) and has been implemented to
provide a reward to key personnel
during the Company’s turnaround
phase.

The performance hurdle for
the grants made is growth in the
Company share price.

The Company share price was
chosen in order to align with
shareholder wealth objectives.

As appropriate, where employees
are promoted or new Senior

•

Executives are appointed they are
offered LTIs consistent with the
existing plan and with the same
hurdles.

The Company also issued
performance rights to certain
Sales Agents during the year. These
contractors are a key component
of the Company’s sales force.
Their commitment and retention
is seen as critical to achieving the
Company’s future growth strategy.
These performance rights have a
vesting date of 1 July 2017, subject to
continued employment.

The Board is currently developing
a future LTIP beyond the current
Executive LTIP for Senior
Executives, which, subject to the
necessary approvals, will be offered
within the next financial year.

Long Term Incentive Plans

Options

Certain Senior Executives were granted
options in prior financial years, as per
the details listed in the tables below.
All options have now been exercised or
forfeited as at year end.

Performance rights

Details regarding performance rights
on issue during the year are listed in the
table below.

LTIP

Issue 3

Issue 5

Issue 6

Issue 7

Issue 8

Total

Opening

450,000

4,571,428

606,061

9,988,564

15,616,053

Issued

Lapsed

Exercised

(450,000)

(1,333,333)

1,701,046#

622,088

2,323,134

(1,701,046)#

(3,166,995)

(1,701,046)

(4,950,328)

Closing

3,238,095

606,061*

6,821,569

622,088

11,287,813

The Performance Rights vested on 1 August 2015 and the equivalent number of ordinary shares were issued.

*
# The Performance Rights lapsed on termination of employment and were reissued to employees, which were either promoted or recruited, on the same basis.

Plan

LTIP 3

Detail

The former CFO was granted options in the 2012 financial year under LTIP 3 to support the business during an on-
market takeover bid that was made after he had submitted his resignation to ensure that he supported the Company
during this period. The terms of the grant were:

•
•

•

issued on 15 September 2011, vesting equally over two years;
there were no performance conditions attached to these options and the participant did not need to be
employed by the CSG Group; and
LTIP 3 had an exercise price of $0.71 (which was reduced due to the latest capital return).

The remaining options under LTIP 3 were exercised progressively on 27 July 2014, 7 August 2014 and 14 August 2014.
There are no further options under this plan.

LTIP 5

The CEO was granted performance rights in the 2013 financial year under LTIP 5. The terms of the grant were:

Share Price (i)

TSR CAGR

Vesting Date

Expiry Date

LTI Stage 1

LTI Stage 2

LTI Stage 3

>$0.75

>$1.05

>$1.50

31.5%

33.6%

35.4%

30/11/14

30/11/15

30/11/16

30/11/15

30/11/16

30/11/17

(i)

Share price means the volume weighted average price of the Company’s ordinary shares on the ASX for a period
of 4 weeks plus any cash dividends paid or capital return from February 2013 onwards minus $0.13.

The structure of the LTIP was formulated in early 2012 upon appointment of the CEO, and was subsequently
approved by the shareholders at the Annual General Meeting in November 2012. The Performance Rights have 2, 3
and 4 year vesting periods with vesting dates on the third and fourth anniversaries of the approval date remaining.
LTIP 5 has a zero exercise price.

LTIP 6

The CEO was granted performance rights in the 2013 financial year under LTIP 6 as part of a retention arrangement
following the sale of the Technology Solutions business. The terms of the grant were:

•
•
•
•

issued on 28 June 2013 and the rights vest on 1 August 2015;
the participant must be employed by the CSG Group throughout the retention period;
the expiry date for exercise of vested rights is 1 December 2015; and
LTIP 6 has a zero exercise price.

These performance rights vested on 1 August 2015 and the CEO was subsequently issued with 606,061 ordinary
shares on 4 August 2015.

LTIP 7

Certain Group Executives and Senior Managers were granted performance rights in the 2013 financial year under
LTIP 7. The terms of the grant were:

Share Price (i)

TSR CAGR

Vesting Date

Expiry Date

LTI Stage 1

LTI Stage 2

LTI Stage 3

>$0.75

>$1.05

>$1.50

31.5%

33.6%

35.4%

30/11/14

30/11/15

30/11/16

30/11/15

30/11/16

30/11/17

(i)

The structure of the LTIP was formulated in early 2012 upon appointment of the CEO (together with LTIP 5 and
6), and was subsequently approved by the shareholders at the Annual General Meeting in November 2012. The
Performance Rights have 2, 3 and 4 year vesting periods with vesting dates on the third and fourth anniversaries of
the approval date remaining. LTIP 7 has a zero exercise price.

During the year further issues were made under the plan as employees were promoted or new Executives were
appointed. These issues equated to the number that had lapsed during the year due to termination of employment.

LTIP 8

Certain Group Executives and Senior Managers were granted performance rights in the 2015 financial year under
LTIP 8. The terms of the grant were:

Share Price (i)

TSR CAGR

Vesting Date

Expiry Date

LTI Stage 2

LTI Stage 3

>$1.05

>$1.50

33.6%

35.4%

30/11/15

30/11/16

30/11/17

(i)

Share price means the volume weighted average price of the Company’s ordinary shares on the ASX for a
period of 4 weeks plus any cash dividends paid or capital return from February 2013 onwards minus $0.13.

The structure of the LTIP was based on that formulated in early 2012 upon appointment of the CEO, with some
variation, as appropriate, to the testing period to reflect the Group Executives and Senior Managers start date
or promotion.

CSG 14|15 ANNUAL REPORT 31

DIRECTORS’ REPORT

Staff Incentive Share Plans

There are two Staff Incentive Share
Plans that were approved at the 2012
Annual General Meeting to assist the
Company to recruit, reward, retain and
to generate increased engagement
in its employees that are not part of
the Executive LTIP. Both have been
implemented and are listed below:

The CSG Tax Exempt Share Plan
(Australia) (AUS Tax Exempt
Plan) in which eligible employees
were offered up to AUD$1,000
worth of ordinary shares in the
Company on a tax free basis.
These shares are held in a trust and
are subject to a three year holding
lock. No consideration is payable
by participants for the grant of
ordinary shares and there are no
additional vesting conditions or
forfeiture conditions in respect of
the plan other than that required
by law.

The CSG Tax Exempt Share Plan
(New Zealand) (NZ Tax Exempt
Plan) in which eligible employees
were offered up to (AUD)$ 1,000
worth of ordinary shares in the
Company on a tax free basis. These
shares are held in a trust and are
subject to a three year holding lock.
Nominal consideration ($NZD1) was
payable for the grant of ordinary
shares and there are no additional
vesting conditions or forfeiture
conditions in respect of the plan
other than that required by law.

The Board approved a further issue
under the above Staff Incentive Share
Plans in FY2015 in accordance with
each Plan’s rules.

9. Non-Executive Director

Remuneration

The available remuneration pool for Non-Executive Directors, as approved at the 2014
Annual General Meeting, is $600,000 (all inclusive). There is no intention to seek an
increase at this year’s Annual General Meeting.

The table below summarises the rates for the various roles. Key points to note are:

•

the Chairman is paid an all-inclusive fee regardless of Committee positions;

Board members are currently paid a base fee plus additional fees for each
Committee Chair and Member role (see table below for fee structure); and

Superannuation is paid on all fees at the statutory rates (increased to 9.50% for the
2015 financial year).

Non-Executive Directors remuneration fees effective from 1 July 2014 onwards are set
out below:

2014/15

Chairman

Member

Board

$150,0001

$57,500

Audit
Committee

$20,000

$3,000

Nomination &
Remuneration
Committee

$20,000

$3,000

1 Superannuation is not paid on the Chairman’s fee in the above table.

Following a recent review of Non-Executive Director fees, it was agreed that from 1 July
2015, Non-Executive Director remuneration fees (excluding statutory superannuation)
be adjusted as follows:

2015/16

Chairman

Member

Board

$140,0001

$65,000

Audit
Committee

$17,500

Nomination &
Remuneration
Committee

$17,500

1 Superannuation is not paid on the Chairman’s fee in the above table.

This adjustment will increase the overall pool for Non-Executive Directors fees from
$455,505 to $463,025 or an increase of 1.7%. The last Non-Executive Director fee
increase was 1 July 2013.

10. Link to 2015 Financial Year

Performance

10.1 Company Performance

The table below provides summary information on the Company’s earnings and
shareholder wealth for the current year and prior years:

Revenue ($m)

Net profit/(loss) after tax
($m)

Share price ($)

Change in share price ($)

Dividends paid ($)

Total Shareholder Return
(TSR)

2015

224.3

14.4

1.60

0.57

0.09

64%

2014

199.3

12.1

1.03

0.09

0.04

14%

2013

184.6

8.7

0.94

0.15

0.29

56%

2012

202.8

(22.2)

0.79

(0.21)

0.055

(16%)

2011

388.6

40.4

1.00

(0.84)

0.055

(43%)

Earnings per Share (cents)

5.1

4.3

3.1

(7.9)

15.6

10.2 STI Outcomes

A balanced Corporate Scorecard was introduced in 2014 for the Group Executive.
For the 2015 financial year the following allocations were made:

Scorecard Measure

Scorecard weighting

FY15 Outcome

EBITDA

Revenue growth

Cash conversion

Employee engagement

Customer engagement

Business transformation

Stakeholders engagement

Total

25%

10%

25%

10%

27.2%*

10%

25%

10%

7.5%

10%

100%

99.7%

* Overachievement entitlement of 108.8 % in accordance with the Company’s Remuneration Policy.

STI payments are made based on the position of the KMP within the organisation. The
CEO’s and CFO’s STI payment is based on 100% of Corporate Scorecard performance
and Executive Group’s STI payment is based on 50% Corporate Scorecard and 50%
Divisional Scorecard performance.

10.3 LTI Outcomes

The movement in options issued and performance rights under previous LTIP during the
year ended 30 June 2015 is summarized below:

LTIP

Issue 3

Issue 5

Issue 6

Issue 7

Issue 8

Total

Opening

450,000

4,571,428

606,061

Issued

Lapsed

Exercised

(450,000)

(1,333,333)

9,988,564

1,701,046#

(1,701,046)#

(3,166,995)

622,088

15,616,053

2,323,134

(1,701,046)

(4,950,328)

Closing

3,238,095

606,061*

6,821,569

622,088

11,287,813

These Performance Rights vested on 1 August 2015 and the equivalent number of ordinary shares were issued.

*
# The Performance Rights lapsed on termination of employment and were reissued to employees, which were either promoted or recruited, on the same basis.

CSG 14|15 ANNUAL REPORT 33

DIRECTORS’ REPORT

11. Remuneration Tables and Disclosures

11.1 Directors’ Remuneration

Cash, Salary
and Fees

STI and
Other Fees

Termination
Payments

Post-employment
Super

LTI

TOTAL Performance
Related %

2015

Non-Executive Directors

Mr. Thomas Cowan*

Mr. Philip Bullock

Mr. Ian Kew

Mr. Mark Phillips

Mr. Stephen Anstice

Ms. Robin Low

Total

Executive Directors

149,946

80,500

27,926

52,278

69,560

432,488

Ms. Julie-Ann Kerin

590,510

199,400

Total

590,510

199,400

7,647

2,653

4,966

6,608

26,840

149,946

88,147

30,579

57,244

76,168

459,328

25,000

867,893

1,682,803

25,000

867,893

1,682,803

80%

Cash, Salary
and Fees

STI and
Other Fees

Termination
Payments

Post-employment
Super

LTI

TOTAL Performance
Related %

2014

Non-Executive Directors

Mr. Thomas Cowan*

150, 000

Mr. Philip Bullock

Mr. Ian Kew

Total

Executive Directors

80,500

311,000

Ms. Julie-Ann Kerin

614,875

198,900

Total

614,875

198,900

* Note: salary is inclusive of all entitlements.

11.2 Executive Group Remuneration

7,446

14,892

150, 000

87,946

325,892

25,000

743,205

1,581,980

25,000

743,205

1,581,980

60%

Cash, Salary
and Fees

STI Termination
Payments

Post-employment
Super

LTI

Total

Performance
Related %

2015

Mr. Neil Lynch

314,225

149,550

Mr. Duncan Powell (i)

Mr. Warwick Beban

3,750

293,791

44,138

90,191

Mr. Declan Ramsay

296,538

164,850

Mr. Stephen Birrell

400,000

Mr. Shailendra Singh (ii)

200,026

89,025

37,387

18,780

4,696

347,157

829,712

98,637

173,579

511,508

18,783

11,583

217,491

697,662

347,157

854,965

99,691

348,687

Total

1,508,330

484,950

90,191

72,625

1,185,075

3,341,171

(i) Resigned 3 July 2014.
(ii) Commenced 10 December 2014. Ceased employment on 12 August 2015.

60%

N/A

43%

54%

51%

39%

50%

Cash, Salary

STI and

Termination

Post-employment

LTI

TOTAL Performance

and Fees

Other Fees

Payments

Super

Related %

Cash, Salary
and Fees

STI Termination
Payments

Post-employment
Super

LTI

TOTAL

Performance
Related %

2015

Non-Executive Directors

Mr. Thomas Cowan*

Mr. Philip Bullock

Mr. Ian Kew

Mr. Mark Phillips

Mr. Stephen Anstice

Ms. Robin Low

Total

Executive Directors

149,946

80,500

27,926

52,278

69,560

432,488

7,647

2,653

4,966

6,608

26,840

149,946

88,147

30,579

57,244

76,168

459,328

80%

Ms. Julie-Ann Kerin

590,510

199,400

25,000

867,893

1,682,803

Total

590,510

199,400

25,000

867,893

1,682,803

2014

Mr. Neil Lynch

Mr. Duncan Powell (i)

Mr. Warwick Beban

Mr. Declan Ramsay

Mr. Stephen Birrell

346,234

344,259

276,734

318,661

407,692

119,676

113,670

100,616

97,087

Total

1,693,580

431,049

(i) Resigned 3 July 2014.

17,775

297,281

780,966

297,281

659,315

148,641

539,045

17,775

148,641

585,693

297,281

819,835

71,100

1,189,125

3,384,854

53%

45%

49%

43%

48%

11.3 LTIP Issue 4, 5, 6, 7 & 8 – Options & Performance Rights

All Performance Rights refer to rights over ordinary shares of CSG Limited, which are exercisable on a one-for-one basis under various
plans. Performance rights are provided at no cost to the recipients. Non-Executive Directors are not entitled to participate in LTI plans.

Date Granted

Balance at
Beginning of Year

Granted in Year

Vested

Forfeited in
Year

Balance at End
of Year

2015

Ms. Julie-Ann Kerin

Mr. Neil Lynch

Mr. Duncan Powell (i)

Mr. Warwick Beban

Mr. Declan Ramsay

28/6/2013

28/6/2013 &
30/12/2014

5,177,489

1,828,571

914,286

(1,333,333)

(533,333)

(1,295,238)

(266,667)

97,143

(266,667)

3,844,156

1,295,238

647,619

744,762

1,295,238

433,000

Mr. Stephen Birrell

28/6/2013

1,828,571

(533,333)

Mr. Shailendra Singh(ii)

30/12/2014

433,000

(i) Resigned 3 July 2014.
(ii) Commenced 10 December 2014. Ceased employment 12 August 2015.

Total

12,491,774

530,143

(3,466,666)

(1,295,238)

8,260,013

Date Granted

Balance at
Beginning of Year

Granted in Year

Vested

Forfeited in
Year

Balance at End
of Year

2014

Ms. Julie-Ann Kerin

Mr. Neil Lynch

Mr. Duncan Powell (i)

Mr. Warwick Beban

Mr. Declan Ramsay

Mr. Stephen Birrell

LTIP 4 granted 9 September 2011.

*
(i) Resigned 3 July 2014.

28/6/2013

5,314,101

1,921,172

1,828,571

914,286

1,828,571

Total

12,720,987

(136,612)*

(92,601)*

5,177,489

1,828,571

914,286

1,828,571

(229,213)

12,491,774

CSG 14|15 ANNUAL REPORT 35

DIRECTORS’ REPORT

Fair
Value
per
Right at
Grant
Date

Exercise
Price
per
Right

%
Vested
in Year
(a)

%
Lapsed
in Year
(a)

Value of
Rights
Granted
in Year
(b)

Value of
Rights
Held in
Year (b)

Value of
Rights
Vested in
Year (c)

Value of
Rights
Lapsed
in Year
(c)

Financial
Years in
which
Grant
Vests

Expiry
Date

2015

Ms. Julie-Ann Kerin* 0.6649

1.185

100

0.5451

0.4646

0.6649

0.5451

0.4646

1.185

100

Total

Mr. Neil Lynch

Total

Mr. Duncan Powell (i) 0.6649

1.185

100

0.5451

0.4646

100%

Total

Mr. Warwick Beban

0.6649

1.185

100

0.5451

0.4646

Total

Mr. Declan Ramsay

0.6649

1.185

100

0.5451

0.4646

1.11

0.88

Total

Mr. Stephen Birrell

0.6649

1.185

100

0.5451

0.4646

0.88

Total

Mr. Shailendra
Singh (ii)

Total

* Excluding retention rights.
(i) Resigned 3 July 2014.
(ii) Commenced 10 December 2014. Ceased employment on 12 August 2015.

258,500

1,580,000

428,442

180,951

867,893

1,580,000

103,400

632,000

171,377

72,380

347,157

632,000

171,377

72,380

632,000 243,696

51,700

316,000

85,689

36,190

173,579

316,000

51,700

316,000

85,689

36,190

34,703

9,209

43,912

173,579

316,000

103,400

632,000

171,377

72,380

347,157

632,000

99,691

2015

30/11/2015

2016

30/11/2016

2017

30/11/2017

2015

30/11/2015

2016

30/11/2016

2017

30/11/2017

2015

30/11/2015

2016

30/11/2016

2017

30/11/2017

2015

30/11/2015

2016

30/11/2016

2017

30/11/2017

2015

30/11/2015

2016

30/11/2016

2017

30/11/2017

2016

30/11/2016

2017

30/11/2017

2015

30/11/2015

2016

30/11/2016

2017

30/11/2017

2017

30/11/2017

Details of the performance criteria attached to each of the performance rights are included in the LTI discussion above and in Note 23 to
the financial statements. No performance rights have been granted since the end of the financial year.

The percent forfeited and lapsed in the year represents the reduction from the maximum number of options available to vest due to
the performance or conditions not being achieved.

Fair value is independently determined utilising assumptions underlying the Black-Scholes methodology to produce a Monte Carlo
simulation model which allows for the incorporation of performance hurdles that must be met before the performance right vests.
The valuation is undertaken in a risk-neutral framework whilst allowing for variables such as volatility, dividends, the risk free rate, the
withdrawal rate and performance hurdles along with constants such as the strike price, term and vesting periods.

The value of options that lapsed or were forfeited during the year represents the benefit foregone and was calculated as the number
of options at the date the options lapsed or were forfeited, multiplied by the fair value of the options calculated independently at the
date the options lapsed or were forfeited but assuming the vesting conditions were satisfied.

12. Service Agreements

Executive Director

Ms. Julie-Ann Kerin

Group Executive

Mr. Neil Lynch

Mr. Warwick Beban

Mr. Declan Ramsay

Mr. Stephen Birrell

Expiry

Termination
Notice

Termination
Payment

N/A

6 months

3 months

6 months

3 months

6 months

13. Directors’ Interests

The KMP’s relevant interests in shares of the Company or options over shares in the
Company are detailed below. Changes in shareholdings during the year are specified in
Note 28 of the financial statements.

Mr. Thomas Cowan(i)

Mr. Phillip Bullock

Mr. Ian Kew(ii)

Mr. Stephen Anstice

Mr. Mark Phillips

Ms. Robin Low

Ms. Julie-Ann Kerin

Ordinary shares of
CSG

Options over shares
in CSG

19,924,622

60,000

140,000

60,000

46,362

133,333

20,032,279

3,844,156

(i) Mr. Thomas Cowan is a partner in TDM Asset Management (TDM). TDM has a direct interest in the shares held by its
clients by virtue of the control it exercises in relation to the shares under its investment management arrangements
with clients. TDM and its clients hold in aggregate 19,924,622 shares at 30 June 2015.

(ii) Ceased to be a director on 20 November 2014 at which time Mr. Kew held 69,730 ordinary shares

14.
Transactions
with Key
Management
Personnel

The Group used the corporate advisory
services of TDM Asset Management,
a firm which Mr. Thomas Cowan is a
partner of, during the year for the total
amount of $17,500. Amounts were billed
based on normal market rates for such
services and were due and payable
under normal payment terms.

During the financial year, the companies
in the Group entered into agreements
in respect of the purchase of print and
technology products and services on
normal commercial terms and conditions
with related entities of the Directors.

15.
Environmental
Regulation

The CSG Group’s operations
are not subject to any significant
environmental Commonwealth or
State regulations or laws.

16.
Proceedings on
Behalf of the
Consolidated
Entity

No person has applied for leave of Court
to bring proceedings on behalf of the
consolidated entity.

17.
State of Affairs

There have been no significant changes
in the CSG Group’s state of affairs
during the financial year.

CSG 14|15 ANNUAL REPORT 37

DIRECTORS’ REPORT

18. Dividends

The dividends paid or declared since
the start of the year are as follows:

21.
Non-Audit
Services

Consolidated entity

2015
$’000

11,365

2014
$’000

Current year
interim:
Unfranked
dividends of
4 cents per
share paid
11 March 2015

14,238

13,965

Current year
final: Dividends
declared* at
5 cents per share
(2014: Unfranked
dividends of
5 cents per
share paid 8
September 2015)

Total Dividends

25,603 13,965

Unfranked dividends of 5 cents per share were
declared and approved on 17 August 2015 for a
payment date of 8 September 2015, refer to item 23.

19.
Directors’
Interests in
Contracts

Directors’ interests in contracts are
disclosed in Note 28 to the financial
statements.

20.
Indemnification
and Insurance
of Directors and
Officers

During the financial year, the
consolidated entity has paid a premium
amounting to $210,832 insuring all
the Directors and the officers against
judgments, settlements, investigative
costs, defence costs and costs to
appear at inquiries or investigations.

Non-audit services are approved
by resolution of the Audit and Risk
Management Committee and approval
is provided in writing to the Board. Non-
audit services provided by the auditors
of the Group during the year, KPMG,
are detailed below. The Directors are
satisfied that the provision of the non-
audit services during the year by the
auditor is compatible with the general
standard of independence for auditors
imposed by the Corporations Act 2001.

Amounts paid
or payable to an
auditor for non-
audit services
provided during
the year by the
auditor to any
entity that is part of
the consolidated
entity for:

Other assurance
services

2015
$

2014
$

98,659 53,700

22.
Auditor’s
Independence
Declaration

The lead auditor’s independence
declaration in relation to the audit for
the financial year is set out on page 40
of this report.

23.
Events
Subsequent to
Reporting Date

Unfranked dividends of 5 cents per
share were declared and approved by
the Directors on 17 August 2015 for a
payment date of 8 September 2015.

(NZ$5m) in cash on completion, and
the balance of $9m (NZ$10m) subject
to meeting agreed earn-out objectives
over the following two years. Up to $3.3m
(NZ$3.7m) could be paid by way of the
issue of new shares, with the balance in
cash, as part of the deferred purchase
consideration. Both the purchase price
and value of shares issued are subject to
completion adjustments.

The financial effect of these
transactions have not been brought to
account in the financial statements for
the year ended 30 June 2015.

24.
Likely
Developments

The CSG Group will continue to pursue
its policy of increasing the profitability
and market share of its business units
during the next financial year. Refer to
the Operational and Financial Review for
further details.

25.
Rounding of
Amounts

The CSG Group is of a kind referred to in
ASIC Class Order 98/100 dated 10 July
1998 and in accordance with that Class
Order, amounts in the consolidated
financial statements and Directors’
Report have been rounded off to
the nearest thousand dollars, unless
otherwise stated.

Signed in accordance with a resolution
of the Directors.

Julie-Ann Kerin

Managing Director

Sydney

17 August 2015

Auditor’s
Independence
Declaration

AUDITOR’S INDEPENDENCE
DECLARATION

I4|I5
Financial
Statements

14|15 FINANCIAL STATEMENTS

Consolidated Statement of Profit and Loss and Other Comprehensive Income for the year ended 30 June 2015

Consolidated entity

Revenue from continuing operations

Sales revenue

Finance lease interest income

Interest income

Other income

Changes in inventories of finished goods

Finance lease interest expense

Marketing expenses

Occupancy expenses

Administration expenses

Employee benefits expenses

Share based transactions

Acquisition and integration related expenses

Other expenses

Depreciation and amortization

Finance costs

Profit before income tax

Income tax (expense)

Profit from continuing operations

Profit is attributable to:

Members of the parent

Non-controlling interest

Profit after income tax expense

Items that may be reclassified subsequently to profit and loss:

Exchange differences on translation of foreign operations,
net of tax

Cash flow hedges:

Net gains / (losses) taken to equity

Other comprehensive income for the year

Total comprehensive income for the year

Total profit and loss and other comprehensive income is
attributable to:

Members of the Parent

Non-controlling interest

Earnings per share for profit from continuing operations
attributable to equity holders of the parent entity:

Basic earnings per share (cents)

Diluted earnings per share (cents)

The accompanying notes form part of these financial statements

Notes

2015
$’000

193,161

23,636

111

7,382

224,290

105,899

11,697

2,360

5,571

23,073

41,936

3,804

540

685

4,518

1,599

201,682

22,608

(8,295)

14,313

13,572

741

14,313

2014
$’000

173,929

19,040

148

6,208

199,325

97,690

8,520

2,167

5,612

20,783

34,459

2,812

3,252

5,161

1,054

181,510

17,815

(5,728)

12,087

11,125

962

12,087

(2,283)

3,518

(2,260)

(4,543)

9,770

9,029

741

9,770

5.1

4.8

(374)

3,144

15,231

14,269

962

15,231

4.3

4.1

Consolidated Statement of Financial Position as at 30 June 2015

Consolidated entity

CURRENT ASSETS

Cash and cash equivalents

Receivables

Lease receivables

Inventories

Other

Derivatives

TOTAL CURRENT ASSETS

NON-CURRENT ASSETS

Lease receivables

Deferred tax assets

Property, plant and equipment

Intangible assets

TOTAL NON-CURRENT ASSETS

TOTAL ASSETS

CURRENT LIABILITIES

Payables

Deferred income

Short term borrowings

Deferred Tax Liability

Current tax payable

Provisions

Debt associated with lease receivables

TOTAL CURRENT LIABILITIES

NON-CURRENT LIABILITIES

Provisions

Derivatives

Debt associated with lease receivables

TOTAL NON-CURRENT LIABILITIES

TOTAL LIABILITIES

NET ASSETS

EQUITY

Contributed equity

Reserves

Retained earnings

Equity attributable to owners of CSG Limited

Non-Controlling interest

TOTAL EQUITY

The accompanying notes form part of these financial statements

Notes

2015
$’000

24,754

25,762

67,598

41,592

6,574

915

167,195

142,444

2,361

193,233

338,038

505,233

43,235

10,131

3,435

515

3,325

617

61,353

545

2,441

187,149

190,135

251,488

253,745

166,533

3,147

70,768

240,448

13,297

253,745

2014
$’000

27,268

23,072

57,617

40,961

6,546

155,464

103,887

1,182

2,667

191,001

298,737

454,201

42,826

435

675

1,325

3,154

3,716

52,131

1,326

1,118

134,614

137,058

189,189

265,012

160,838

9,091

82,527

252,456

12,556

265,012

CSG 14|15 ANNUAL REPORT 43

14|15 FINANCIAL STATEMENTS

Consolidated Statement of Changes in Equity for the year ended 30 June 2015

Consolidated entity

Contributed
Equity

Reserves

Cashflow
Hedge
Reserve

Retained
Earnings

Non-
controlling
Interest

Total Equity

$’000

Balance as at 1 July 2013

172,250

2,548

3,518

587

(374)

71,402

11,125

11,594

962

258,381

12,087

3,518

(374)

3,518

(374)

11,125

962

15,231

Balance as at 30 June 2014

160,838

8,878

Balance as at 1 July 2014

160,838

108

(11,159)

(361)

2,812

8,878

(2,283)

213

2,920

(11,159)

(361)

82,527

12,556

265,012

82,527

13,572

12,556

741

265,012

14,313

(2,283)

(2,260)

(2,283)

(2,260)

13,572

741

9,770

Profit for the year

Exchange differences
on translation of foreign
operations, net of tax

Cash flow hedges

Total comprehensive
income for the year

Transactions with owners
in their capacity as
owners:

Equity settled transactions

Capital distribution

Capital raising costs
deferred tax asset

Profit for the year

Exchange differences
on translation of foreign
operations, net of tax

Cash flow hedges:

Net gains / (losses) taken to
equity

Total comprehensive
income for the year

Transactions with owners
in their capacity as
owners:

Equity settled transactions

Dividends paid

Capital raising costs
deferred tax asset

5,803

(108)

(1,401)

(25,331)

4,402

(25,331)

(108)

Balance as at 30 June 2015

166,533

5,194

(2,047)

70,768

13,297

253,745

The accompanying notes form part of these financial statements

Consolidated Statement of Cash Flows for the year ended 30 June 2015

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers

Payments to suppliers, employees and others

Movement in lease receivables

Interest income

Interest expense

Income tax paid

Consolidated entity

2015
$’000

2014
$’000

Notes

243,086

(214,447)

(41,774)

111

(1,454)

(4,773)

211,740

(191,278)

(46,010)

148

(1,054)

(6,540)

Net cash (used in) operating activities

25(a)

(19,251)

(32,994)

CASH FLOWS FROM INVESTING ACTIVITIES

Payment for intangibles

Payments for property, plant and equipment

Proceeds from the sale of property, plant and equipment

Payments for businesses

Net cash from/(used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Borrowings associated with lease receivables

Options exercised

Proceeds from borrowings

Repayment of borrowings

On-market share buy-backs

Capital distributions

Dividend distributions

Net cash flows provided by/(used in) financing activities

Net increase/(decrease) in cash held

Cash at the beginning of the financial year

Foreign exchange difference on cash holdings

Cash and cash equivalents at end of year

The accompanying notes form part of these financial statements

(3,946)

(1,117)

(11,506)

(16,569)

49,436

320

9,400

(25,331)

33,825

(1,995)

27,268

(519)

24,754

(4,344)

(432)

398

(8,000)

(12,378)

41,906

225

15,095

(15,167)

(117)

(11,159)

30,783

(14,589)

40,017

1,840

27,268

25(b)

CSG 14|15 ANNUAL REPORT 45

Notes to the
Financial
Statements
30 June 2015

NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2015

Note 1:
Reporting Entity

CSG Limited (the “Company”)
is a company limited by shares,
incorporated and domiciled in Australia.
The address of the Company’s
registered office is Level 1, 357 Collins
Street, Melbourne, VIC, Australia, 3000.
The consolidated financial statements
of the Company as at and for the year
ended 30 June 2015 comprise the
Company and its controlled entities
(together referred to as the “Group”
and individually as (“Group entities”).
The Group is a for-profit entity and
primarily involved in print related sales
and service and financing of office
equipment.

Note 2:
Basis Of
Preparation

Statement of compliance

This financial report is a general
purpose financial report that has been
prepared in accordance with Australian
Accounting Standards and other
authoritative pronouncements of the
Australian Accounting Standards Board
and the Corporations Act 2001. The
consolidated financial statements of the
Company also comply with International
Financial Reporting Standards (IFRS) as
issued by the International Accounting
Standards Board (IASB).

The financial report was authorised for
issue by the Directors on 17 August 2015.

a. Basis of measurement

The financial report has been prepared
under the historical cost convention, as
modified by revaluations to fair value for
certain material items in the statement
of financial position and as described in
the accounting policies.

Functional and presentation
currency

The financial report is presented in
Australia dollars which is the Company’s
functional currency. The Company is
of a kind referred to in ASIC Class Order
98/0100 and in accordance with that
Class Order, amounts in the financial
statements have been rounded off
to the nearest thousand dollars, or in
certain cases, to the nearest dollar.

c. Use of estimates and judgments

The preparation of the financial report
in conformity with IFRS requires
management to make judgments,
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
estimates are revised and in any future
periods affected.

Estimates and assumptions based on
future events have a significant inherent
risk, and where future events are not as
anticipated there could be a material
impact on the carrying amounts of the
assets and liabilities discussed below:

i. Assessing impairment of goodwill

Goodwill is allocated to cash generating
units (“CGUs”) according to applicable
business operations. The CGUs are
aligned at the segment level. The
recoverable amount of a CGU is based
on value-in-use calculations. These
calculations are based on projected
financial forecasts and projected
cash flows approved by management
covering a period not exceeding five
years. Management’s determination of
cash flow projections are based on past
performance and its expectation for
the future. The present value of future
cash flows has been calculated using a
post-tax discount rates listed in Note 17 to
determine value-in-use.

ii.

Income taxes

Income tax benefits are based on the
assumption that no adverse change
will occur in the income tax legislation
and the anticipation that the company
will derive sufficient future assessable
income to enable the benefit to be
realised and comply with the conditions
of deductibility imposed by the law.

iii.

Employment benefits

Calculation of long term employment
benefits requires estimation of the
retention of staff, future remuneration
levels and timing of the settlement of
the benefits. The estimates are based
on historical trends.

iv. Share-based payments

Calculation of shared based payments
requires estimation of the timing of the
exercise of the underlying instrument. The
estimates are based on historical trends.

Inventory – consumables at

v.
customer premises

Inventory balances include
consumables owned by the group but
located at customer premises. The
value of consumables recorded as
inventory is based on management’s
estimate resultant from information
held in customer servicing systems and
a sample of customer holdings.

vi. Inventory - obsolescence

Inventory balances relate to items
subject to technological obsolescence
and unknown usage levels. Obsolete
and slow-moving inventory is estimated
based on the age of the inventory items,
historical usage and likely future usage,
and likely recoverable values.

Note 3:
Summary Of
Significant
Accounting
Policies

The accounting policies set out below
have been applied consistently to all
periods presented in this financial
report, and have been applied
consistently by Group entities.

a. Basis of consolidation

i. Business combinations

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. Control is the power to govern
the financial and operating policies of an
entity so as to obtain benefits from its
activities. In assessing control, the Group
takes into consideration potential voting
rights that are currently exercisable.

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 recognized amount
(generally fair value) 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.

Any contingent consideration payable
is recognised at fair value at acquisition
date. If the contingent consideration is
classified as equity, it is not remeasured
and settlement is accounted for within
equity. Otherwise, subsequent changes
to the fair value of the contingent
consideration are recognised in profit
or loss.

When share-based payment awards
(replacement awards) are required
to be exchanged for awards held by
the acquiree’s employees (acquiree’s
awards) and relate to past services,
then all or a portion of the amount of
the acquirer’s replacement awards is
included in measuring the consideration
transferred in the business
combination. This determination is
based on the market-based value of the
replacement awards compared with the
market-based value of the acquiree’s
awards and the extent to which the
replacement awards relate to past and/
or future service.

ii. Subsidiaries

Subsidiaries are entities controlled by
the Group. The financial statements
of subsidiaries are included in the
consolidated financial statements from
the date that control commences until
the date that control ceases.

The financial statements of subsidiaries
are prepared for the same reporting
period as the parent entity, using
consistent accounting policies.
Adjustments are made to bring into line
any dissimilar accounting policies, which
may exist.

iii.

Non-controlling interests

Non-controlling interests in the results
of subsidiaries are shown separately in
the consolidated statement of profit
and loss and other comprehensive
income and consolidated statement of
financial position respectively.

iv. Loss of control

Upon the loss of control, the Group

derecognises the assets and liabilities
of the subsidiary, any non-controlling
interests and other components of
equity related to the subsidiary. Any
surplus or deficit arising on the loss of
control is recognised in profit or loss.
If the Group retains any interest in the
previous subsidiary, then such interest
is measured at fair value at the date
that control is lost. Subsequently, it is
accounted for as an equity-accounted
investee or as an available-for-sale
financial asset depending on the level of
influence retained.

Transactions eliminated on
consolidation

All intercompany balances and
transactions, including any unrealised
profits or losses have been eliminated
on consolidation.

b. Foreign currency

i. Foreign currency transactions

Transactions in foreign currencies of
entities within the consolidated group
are translated into functional currency
at the rate of exchange ruling at the date
of the transaction. Foreign currency
monetary items that are outstanding at
the reporting date (other than monetary
items arising under foreign currency
contracts where the exchange rate
for that monetary item is fixed in the
contract) are translated using the spot
rate at the end of the financial year. All
resulting exchange differences arising
on settlement or re statement are
recognised as revenues and expenses
for the financial year.

ii. Foreign operations

Entities that have a functional currency
different to the presentation currency
are translated as follows:

•

assets and liabilities are translated
at year-end exchange rates
prevailing at that reporting date;

income and expenses are
translated at actual exchange rates
or average exchange rates for the
period, where appropriate; and

all resulting exchange differences
are recognised as a separate
component of equity.

c. Financial instruments

i. Non-derivative financial assets

The Group initially recognises loans
and receivables on the date that they
are originated. All other financial assets
(including assets designated at fair value
through profit or loss) are recognised

initially on the trade date at which
the Group becomes a party to the
contractual provisions of the instrument.

The Group derecognises a financial
asset when the contractual rights to
the cash flow from the asset expire,
or it transfers the rights to receive
the contractual cash flows on the
financial asset in a transaction in which
substantially all the risks and rewards
of ownership of the financial asset are
transferred. Any interest in transferred
financial assets that is created or
retained by the Group is recognised as a
separate asset or liability.

Financial assets and liabilities are offset
and the net amount presented in the
statement of financial position only when
the Group has a legal right to offset the
amounts and intends either to settle on a
net basis or to realise the asset and settle
the liability simultaneously.

The Group has the following non-
derivative financial assets: financial
assets at fair value through profit or loss
and loans and receivables.

Financial assets at fair value through
profit or loss

A financial asset is classified as at
fair value through profit or loss if it
is classified as held for trading or
is designated as such upon initial
recognition. Financial assets are
designated at fair value through profit
or loss if the Group manages such
investments and makes purchase
and sale decisions based on their fair
value in accordance with the Group’s
documented risk management or
investment strategy. Attributable
transaction costs are recognised in profit
or loss when incurred. Financial assets at
their fair value through profit or loss are
remeasured at fair value, and changes
therein are recognised in profit or loss.

Loans and receivables

Loans and receivables are financial
assets with fixed or determinable
payments that are not quoted on an
active market. Loans and receivables
are measured at fair value at
inception net of transaction costs and
subsequently at amortised cost using
the effective interest rate method, less
any impairment losses.

Loans and receivables comprise cash
and cash equivalents and, trade and
other receivables.

Cash and cash equivalents

Cash and cash equivalents include
cash on hand and at banks, including
restricted cash and a group multi-

CSG 14|15 ANNUAL REPORT 49

NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2015

function bank overdraft facility. Bank
overdrafts are shown within long-term
borrowings in non-current liabilities on
the balance sheet.

should be highly probable to occur
and should present an exposure to
variations in cash flows that could
ultimately affect reported profit or loss.

services is recognised by reference to
the stage of completion of the contract.
The revenue recognised from rendering
of services combines:

ii. Non-derivative financial liabilities

Financial liabilities (including liabilities
designated at fair value through profit or
loss) are recognised initially on the trade
date, which is the date that the Group
becomes a party to the contractual
provisions of the instrument.

The Group derecognises a financial
liability when its contractual obligations
are discharged or cancelled or expire.

The Group classifies non-derivative
financial liabilities into the other
financial liabilities category. Such
financial liabilities are recognised initially
at fair value less any directly attributable
transaction costs. Subsequent to initial
recognition, these financial liabilities are
measured at amortised cost using the
effective interest rate method.

Other financial liabilities comprise trade
payables, other creditors and loans from
third parties including inter company
balances and loans from or other
amounts due to Director related entities.

iii.

Derivative financial instruments,
including hedge accounting

The Group uses derivative financial
instruments to hedge its exposure to
interest rate risks arising from financing
activities and foreign exchange risk
in respect of inventory purchases.
In accordance with treasury policy,
the Company does not hold or issue
derivative financial instruments for trading
purposes. However, derivatives that are
not designated hedges are accounted for
as held for trading instruments.

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 strategy
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 makes an
assessment, both at the inception of
the hedge relationship as well as on
an ongoing basis, whether the hedging
instruments are expected to be highly
effective in offsetting the changes
in the fair value or cash flows of the
respective hedged items attributable
to hedged risk, and whether the actual
results of each hedge are within a range
of 80 – 125%. For a cash flow hedge of
a forecast transaction, the transaction

Derivative financial instruments are
recognised initially at fair value and
transaction costs are expensed
immediately. Subsequent to initial
recognition, derivative financial
instruments are stated at fair value
and subject to the nature of the
hedging instrument the gain or loss
on re-measurement to fair value
is recognised immediately in the
statement of comprehensive income
or as described below.

Cash flow hedges

When a derivative is designated as the
hedging instrument in a hedge of the
variability in cash flows attributable
to a particular risk associated with a
recognised asset or liability or a highly
probable forecast transaction that
could affect profit or loss, 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. The
ineffective portion of changes in the
fair value of the derivative is recognised
immediately in profit or loss.

When the hedged item is a non-financial
asset, the amount recognised in equity
is included in the carrying amount of the
asset when the asset is recognised. In
other cases 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 sold, terminated or exercised,
or the designation is revoked, the
hedge accounting is discontinued
prospectively. If the forecast
transaction is no longer expected to
occur, then the balance in equity is
reclassified to profit or loss.

d. Revenue Recognition

Sale of Goods

Revenue is measured at the fair value
of the consideration received or
receivable.

Revenue from the sale of goods and
disposal of other assets is recognised
when significant risks and rewards of
ownership of the goods have passed to
the buyer and the costs incurred or to
be incurred in respect of the transaction
can be reliably measured.

Rendering of Services

Revenue from a contract to provide

ii.

invoicing from the provision of the
Group’s services inclusive of the
amounts due and payable under
the terms of the long term service
contracts; and

revenue not yet invoiced but earned
on work completed in servicing long
term service contracts which, while
owing to the Group under the terms
of those contracts, will not become
payable until future years.

The long term service contracts
specifically detail both services
to be performed and the invoicing
components for each year of the
contracts. The Group’s contract
administration system enables the
stage of completion of each contract to
be reliably determined.

Interest income

Interest on loans and receivables from
finance leases is recognised on an
effective interest rate basis. Minimum
lease payments received under finance
leases are apportioned between the
finance income and the reduction of the
outstanding asset. The finance income
is allocated to each period during the
lease term so as to produce a constant
period rate of interest on the remaining
balance of the asset. An accrual basis is
used to record interest income.

Operating lease revenue

Rental income from operating leases
of equipment is recognised on an
accrual basis with income recognised
on a straight line basis over the term of
the lease. Lease incentives granted are
recognised as an integral part of the total
rental income, over the term of the lease.

Equipment sales under financing
arrangement

Equipment which is subject to rental
agreements with customers may be
sold to a finance company prior to
the commencement of the rental
agreement. Rental payments are
collected by the relevant CSG entity
and passed on to the finance company.
A sale is recognised when goods
have been dispatched to a customer
pursuant to a rental agreement and
a sales invoice has been issued to
the finance company. Under these
arrangements the risks of ownership of
the equipment passes to the customer
upon delivery of the equipment to
the customer and the credit risk in
relation to the rental stream passes

to the finance company. In these
circumstances the entity guarantees
to buy back the equipment for a
nominal amount at the end of the rental
agreement (or upon termination of the
agreement) based on the term of the
agreement.

Other income

Dividend revenue is recognised when
the right to receive a dividend has been
established.

Revenue arrangements with multiple
deliverables

Where two or more revenue-generating
activities or deliverables are sold under
a single arrangement, each deliverable
that is considered to be a separate
unit of accounting is accounted for
separately. When the deliverables in
a multiple element arrangement are
not considered to be separate units
of accounting, the arrangement is
accounted for as a single unit.

A separate unit of accounting exists
where the deliverable has value to the
customer on a stand-alone basis and
there is objective and reliable evidence
of the fair values.

e. Receivables

All trade receivables are recognised
initially at fair value, and subsequently at
amortised cost, less impairment.

Collectability of trade receivables is
reviewed on an ongoing basis. Debts
which are known to be uncollectible are
written off. An impairment loss is raised
when there is objective evidence that
the company will not be able to collect
all amounts due according to the original
terms of the receivables. The amount
of the impairment is the difference
between the asset’s carrying amount
and the present value of estimated
future cash flows, discounted at the
original effective interest rate. Cash
flows relating to short-term receivables
are not discounted if the effect of
discounting is not material. The amount
of the impairment is recognised in the
statement of comprehensive income.

Inventories

Inventories are valued on the weighted
average cost basis at the lower of cost
and net realisable value.

Net realisable value represents the
estimated selling price in the ordinary
course of business less the estimated
costs of completion.

g. Property, Plant and Equipment

Property, plant and equipment is
recorded at cost less accumulated
depreciation and accumulated
impairment charges. Cost includes
expenditure that is directly attributable
to the acquisition of the items.

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 company and
the cost of the item can be measured
reliably. All repairs and maintenance
are charged to the income statement
during the financial period in which they
are incurred.

Gains and losses on disposals are
determined by comparing proceeds
with carrying amount. These are
included in the statement of profit and
loss and other comprehensive income.

An asset’s carrying amount is written
down immediately to its recoverable
amount if the asset’s carrying amount is
greater than its estimated recoverable
amount.

Where the Company leases assets
as a lessor on an operating lease, the
Company retains substantially all the
risks and rewards of ownership. The
assets are stated at historical cost
less accumulated depreciation and
impairment losses (where applicable).

Depreciation of property, plant and
equipment is calculated on a straight
line and diminishing value basis to
allocate their cost or revalued amounts,
net of their residual values, over their
estimated useful lives to the Company.

The following rates used in the
calculation of depreciation are as follows:

Assets

Rate

Method

Leasehold improvements

2.5% - 33%

Diminishing value and straight line

Plant and equipment

2.5% - 40%

Diminishing value and straight line

Motor vehicles

13% - 19%

Diminishing value

Office computer equipment

10% - 50%

Diminishing value and straight line

Furniture and fittings

5% - 20%

Diminishing value and straight line

Leased plant and equipment

20%

Straight-line

Intangible assets

Goodwill

Goodwill represents the excess of the
cost of the acquisition over the fair
value of the net identifiable assets of
the acquired subsidiary at the date of
acquisition. Goodwill on acquisition of
subsidiaries is included in intangible
assets. Goodwill acquired in a business
combination is allocated into the specific
components acquired as part of the
business combination.

All goodwill is tested for impairment
annually or more frequently if events
or circumstances indicate that it might
be impaired, and is carried at cost less
accumulated impairment losses. Gains
and losses on the disposal of an entity
include the carrying amount of goodwill
relating to the entity sold.

Licenses and other Intangible Assets

Licenses and other intangible assets
have a finite useful life and are recorded
at cost less accumulated amortisation
and impairment losses. Amortisation is
calculated using the straight-line method
to allocate the cost of the licenses
over their estimated useful life. Other
intangible assets have been assigned
finite lives between 3-10 years. Software
developed for resale is amortised
over five years. Customer contracts/
relationships acquired in a business
combination have been assigned a finite
life of 14 years and are amortised on a
straight line basis over this period.

Impairment

i. Non-derivative financial assets

A financial asset not carried at fair
value through profit or loss is assessed
at each reporting date to determine
whether there is objective evidence
that it is impaired. A financial asset is
impaired if there is objective evidence
of impairment as a result of one or more
events that occurred after the initial
recognition of the asset, and that the loss
event(s) had an impact on the estimated
future cash flows of that asset that can
be estimated reliably.

An impairment loss in respect of a
financial asset measured at amortised
costs is calculated as the difference
between its carrying amount and the
present value of the estimated future
cash flows discounted at the asset’s
original effective interest rate. Losses are
recognised in profit or loss and reflected
in an allowance account against loans
and receivables. Interest on the impaired
asset continues to be recognised. When
an event occurring after the impairment
was recognised causes the amount

CSG 14|15 ANNUAL REPORT 51

NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2015

of impairment loss to decrease, the
decrease in impairment loss is reversed
through profit or loss.

ii. Non-financial assets

The carrying amounts of the Group’s
non-financial assets are reviewed
at each reporting date to determine
whether there is any indication of
impairment. If any such indication
exists, then the asset’s recoverable
amount is estimated. Goodwill and
indefinite life intangible assets are
tested annually for impairment. An
impairment loss is recognised if the
carrying amount of an asset or its
related cash-generating unit (CGU)
exceeds its recoverable amount.

The recoverable amount of an asset
or CGU is the greater of its value in use
and its fair value less costs to sell. In
assessing value in use, the estimated
future cash flows are discounted to the
present value using a pre-tax discount
rate that reflects current market
assessments of the time value of money
and the risks specific to the asset or
CGU. For the purpose of impairment
testing, assets that cannot be tested
individually are grouped together into the
smallest group of assets that generates
cash inflows from continuing use that are
largely independent of the cash inflows
of other assets or CGUs. Subject to an
operating segment ceiling test, CGUs
to which goodwill has been allocated
are aggregated so that the level at
which impairment testing is performed
reflects the lowest level at which goodwill
is monitored for internal reporting
purposes. Goodwill acquired in a business
combination is allocated to groups of
CGUs that are expected to benefit from
the synergies of the combination.

Impairment losses are recognised in profit
or loss. Impairment losses recognised
in respect of CGUs are allocated first to
reduce the carrying amount of goodwill
allocated to the CGU (group of CGUs),
and then to reduce the carrying amounts
of the other assets in the CGU (group of
CGUs) on a pro rata basis.

An impairment loss in respect of
goodwill is not reversed. For other
assets, an impairment loss is reversed
only to the extent that the asset’s
carrying amount does not exceed the
carrying amount that would have been
determined, net of depreciation or
amortisation, if no impairment loss had
been recognised.

iii. Trade and other Payables

These amounts represent liabilities
for goods and services provided to the

Group prior to the end of the financial
year, which are unpaid.

j. Borrowings

Borrowings are initially recognised at
fair value. Borrowings are subsequently
measured at amortised cost. Any
differences between the proceeds (net
of transaction costs) and the redemption
amount is recognised in the statement
of comprehensive income over the
period of the borrowings using the
effective interest method. Fees paid
on the establishment of loan facilities,
which are not incremental costs relating
to the actual draw down of the facility,
are recognised as transaction costs and
amortised on a straight-line basis over
the term of the facility.

Borrowings are classified as current
liabilities unless the company has an
unconditional right to defer settlement
of the liability for at least 12 months after
the balance sheet date.

Borrowing costs are recognised as
expenses in the period in which they are
incurred.

k. Employee benefits

Liabilities arising in respect of wages
and salaries, annual leave and any
other employee benefits expected
to be settled within twelve months
of the reporting date are measured
at their nominal amounts based on
remuneration rates which are expected
to be paid when the liability is settled.
All other employee benefit liabilities are
measured at the present value of the
estimated future cash outflow to be
made in respect of services provided by
employees up to the reporting date.

Share-based Payments

The consolidated entity operates
an employee share option plan. The
bonus element over the exercise price
for the grant of options is recognised
as an expense in the statement of
comprehensive income in the period(s)
when the benefit is earned.

The total amount to be expensed over
the vesting period is determined by
reference to the fair value of the options
at grant date. The fair value of options at
grant date is determined using the Monte
Carlo pricing model, and is recognised
as an employee expense over the period
during which the employees become
entitled to the option.

l. Provisions

A provision is recognised when a legal
or constructive obligation exists as a
result of a past event and it is probable

that an outflow of economic benefits
will be required to settle the obligation,
and the amount of the provision can
be measured reliably. Provisions are
determined by discounting the expected
future cash flows at a pre-tax rate that
reflects current market assessments
of the time value of money and the risks
specific to the liability. The unwinding of
the discount is recognised as a finance
cost.

Restructuring

A provision for restructuring is
recognised when the Group has
approved a detailed and formal
restructuring plan, and the restructuring
either has commenced or has been
announced publicly. Future operating
losses are not provided for.

ii. Onerous contracts

A provision for onerous contracts is
recognised when the expected benefits
to be derived by the Group from a
contract are lower than the unavoidable
cost of meeting its obligations under
the contract. The provision is measured
at the present value of the lower of
the expected cost of terminating the
contract and the expected net cost of
continuing with the contract. Before
a provision is established, the Group
recognises any impairment loss on the
assets associated with the contract.

m. Leases

Leases are classified at their inception
as either operating or finance leases
based on the economic substance of the
agreement so as to reflect the risks and
benefits incidental to ownership.

Finance leases

Assets held under finance leases are
initially recognised at their fair value or, if
lower, at amounts equal to the present
value of the minimum lease payments,
each determined at the inception of the
lease. The corresponding liability to the
lessor is included in the balance sheet as
a finance lease obligation. Leased assets
are depreciated over the shorter of the
estimated useful life of the assets and
the lease term.

Lease payments are apportioned
between finance charges and reduction
of the lease obligation so as to achieve
a constant rate of interest on the
remaining balance of the liability. Finance
charges are charged directly against
income.

Operating lease

Operating lease payments are
recognised as an expense on a straight-

Tax consolidation

CSG Limited and its Australian
subsidiaries have formed an income
tax consolidated group under the tax
consolidation legislation on 1 July 2007.
The parent entity is responsible for
recognising the current tax liabilities and
deferred tax assets arising in respect
of tax losses, for the tax consolidated
group. The tax consolidated group has
also entered a tax funding agreement
whereby each company in the group
contributes to the income tax payable
in proportion to their contribution
to the net profit before tax of the tax
consolidated group.

p. Research & Development

Research expenditure is recognised as
an expense as incurred. Concessional
tax benefits receivable in respect of
eligible expenditure are recognised
as income. Income is recognised with
respect to concessional benefits upon
confirmation and registration of eligible
projects with evaluation and registration
of eligible projects typically completed in
the following financial year.

Costs incurred on development projects
are recognised as intangible assets when
it is probable that the project will, after
considering its commercial and technical
feasibility, be completed and generate
future economic benefits and its costs
can be measured reliably.

q. Discontinued operations

Classification as a discontinued
operation occurs upon the disposal or
when the operation meets the criteria
to be classified as held for sale or
distribution, if earlier.

r. Segment reporting

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. Unallocated items comprise
mainly corporate assets (primarily the
Company’s headquarters), head office
expenses, and income tax assets and
liabilities.

line basis over the lease term, except
where another systematic basis is more
representative of the time pattern in
which economic benefits from the
leased asset are consumed.

Finance income and finance
costs

Finance income comprises interest
income on funds invested, dividend
income, fair value gains on financial
assets at fair value through profit or loss,
gains on the re-measurement to fair
value of any pre-existing interest in an
acquiree, 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. Dividend
income is recognised in profit or loss on
the date that the Group’s right to receive
payment is established.

Finance costs comprise interest
expense on borrowings, unwinding
of the discount on provisions and
contingent consideration, fair value
losses on financials assets at fair value
through profit or loss, impairment
losses recognised on financial assets
(other than trade receivables), losses on
hedging instruments that are recognised
in profit or loss and reclassifications of
amounts previously recognised in other
comprehensive income.

Borrowing costs that are not directly
attributable to the acquisition of a
qualifying asset are recognised in profit
or loss using the effective interest
method.

Foreign currency gains and losses are
reported on a net basis in other income
in Note 7 depending on whether foreign
currency movements are in a net gain or
net loss position.

Income tax

Tax expense comprises current and
deferred tax. Current tax and deferred
tax is recognised in profit 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 income tax expense or revenue
is the tax payable on the current year’s
taxable income based on the applicable
income tax rate adjusted by changes in
deferred tax assets and liabilities and any
adjustment to tax payable in respect of
previous years. Current tax payable also
includes any tax liability arising from the
declaration of dividends.

A balance sheet approach is adopted
under which deferred tax assets and
liabilities are recognised for temporary
differences between the tax bases of
assets and liabilities and their carrying
amounts in the financial statements.
No deferred tax asset or liability is
recognised in relation to temporary
differences arising from the initial
recognition of an asset or a liability if
they arose in a transaction, other than a
business combination, that at the time
of the transaction did not affect either
accounting profit or taxable profit or loss.

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.

In determining the amount of current
and deferred tax the Group takes into
account the impact of uncertain tax
positions and whether additional taxes
and interest may be due. The Group
believes that its accruals for tax liabilities
are adequate for all open tax years based
on its assessment of many factors,
including interpretations of tax law and
prior experience. This assessment
relies on estimates and assumptions
and may involve a series of judgements
about future events. New information
may become available that causes the
Group to change its judgement regarding
the adequacy of existing tax liabilities;
such changes to tax liabilities will impact
tax expense in the period that such a
determination is made.

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
for deductible temporary differences
and unused tax losses only when it is
probable that future taxable amounts will
be available to utilise those temporary
differences and losses.

Additional income tax expenses that
arise from the distribution of cash
dividends are recognised at the same
time that the liability to pay the related
dividend is recognised. The Group
does not distribute non-cash assets as
dividends to its shareholders.

CSG 14|15 ANNUAL REPORT 53

NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2015

Note 4: New
Accounting
Standards And
Interpretations

a. New standards adopted

During the year, the Group has adopted
the following new standards and
amendments to standards, including
any consequential amendments to
other standards, with a date of initial
application of 1 July 2014.

AASB 2011-4 Key management
personnel disclosures

The new standards have not had
a significant effect on the Group’s
disclosures and on existing financial
assets and liabilities.

New standards and
interpretations not yet adopted

A number of new standards,
amendments to standards and
interpretations are effective for
annual periods beginning after 1 July
2014, and have not been applied in
preparing these consolidated financial
statements. The standards which may
be relevant to the Group as set out
below.

AASB 9 Financial Instruments
(2013), AASB 9 Financial
Instruments (2010) and AASB
9 Financial Instruments (2009)
(together AASB 9)

AASB 9 (2009) introduces new
requirements for the classification
and measurement of financial assets.

Under AASB 9 (2009), financial assets
are classified and measured based on
the business model in which they are
held and the characteristics of their
contractual cash flows. AASB 9 (2010)
introduces additional changes relating
to financial liabilities. The IASB currently
has an active project to make limited
amendments to the classification
and measurement requirements of
AASB 9 and add new requirements to
address the impairment of financial
assets. AASB 9 (2013) introduces new
requirements for hedge accounting.
AASB 9 is effective for annual periods
beginning on or after 1 January 2018.
However, early adoption is permitted.
The adoption of these standards is
expected to have an impact on the
Group’s financial assets, but no impact
on the Group’s financial liabilities. The
Group has not yet determined the
impact on its hedging arrangements.

ii. AASB 15 Revenue Contracts (2014)

AASB15 (2014) contains a single
model that applies to contracts with
customers and two approaches to
recognizing revenue: at a point in time
or over time. The model features a
contract-based five-step analysis of
transactions to determine whether, how
much and when revenue is recognised.
AASB15 is effective for annual periods
beginning or after 1 January 2018.
However, early adoption is permitted.

Note 5:
Determination
Of Fair Values

A number of the Group’s accounting
policies and disclosures require the
determination of fair value, for both
financial and non-financial assets and
liabilities.

Fair value hierarchy

In valuing financial instruments, the
consolidated entity uses the following
fair value measurement hierarchy that
reflects the significance of the inputs
used in making the measurements:

Level 1: Quoted market price
(unadjusted) in an active market for an
identical instrument.

Level 2: Valuation techniques based on
observable inputs, either directly (i.e.
as prices) or indirectly (i.e. derived from
prices).

Level 3: Valuation techniques using
significant unobservable inputs. This
category includes all instruments where
the valuation technique includes inputs
not based on observable data and the
unobservable inputs have a significant
effect on the instrument’s valuation.
There are no material level 3 financial
instruments.

The fair value of financial assets and
financial liabilities, other than the fair
value of derivatives, approximates their
carrying amounts as disclosed in the
Statement of Financial Position and
Notes to the financial statements. The
fair value hierarchy instruments not at
fair value include borrowings as level 2
and finance leases as level 3.

The fair values of the Group’s derivative
financial instruments, being interest rate
swaps and forward foreign exchange
contracts, are categorised as Level 2 in
the fair value hierarchy (2014: Level 2).
The fair values are based on the market
comparison technique, using broker or
counterparty quotes. Similar contracts
are traded in an active market and the
quotes reflect the actual transactions
in similar instruments. There are no
significant unobservable inputs used in
the valuations.

Fair value measurement

Fair values have been determined
for measurement and/or disclosure
purposes based on the following
methods. When applicable, further
information about the assumptions
made in determining fair values is

disclosed in the notes specific to that
asset or liability.

Forward exchange contracts and
interest rate swaps

The fair value of forward exchange
contracts is based on their quoted
price, if available. If a quoted price is not
available, then the fair value is estimated
by discounting the difference between
the contractual forward price and the
current forward price for the residual
maturity of the contract using a credit-
adjusted risk-free interest rate (based
on government bonds).

The fair value of interest rate swaps
is based on broker quotes. These
quotes are tested for reasonableness
by discounting estimated future
cash flows based on the terms and
maturity of each contract and using
the market interest rates for a similar
instrument at the measurement date.
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.

Other non-derivative financial
liabilities

Fair value, which is determined for
disclosure purposes, is calculated
based on the present value of future
principal and interest cash flows,
discounted at the market rate of interest
at the reporting date. For finance leases
the market rate of interest is referenced
to the contract.

Share-based payment
transactions

The fair value of the Performance
Rights under the Long Term Incentive
Plan are measured using Monte
Carlo sampling. The fair value of the
employee share options currently
under issue is measured using the
Black-Scholes formula. Measurement
inputs include the share price on the
measurement date, the exercise price
of the instrument, expected volatility
(based on an evaluation of the historic
volatility of the Company’s share price,
particularly over the historical period
commensurate with the expected
term), expected term of the instruments
(based on historical experience and
general option holder behaviour),
expected dividends, and the risk-free
interest rate (based on government
bonds). Service and non-market
performance conditions attached to the
transactions are not taken into account
in determining fair value.

d. Contingent consideration

The fair value of contingent consideration
is calculated using the income
approach based on the expected
payment amounts and their associated
probabilities. When appropriate, it is
discounted to present value.

Note 6:
Financial Risk
Management

The major financial instruments
entered into by the Group comprise
short term trade receivables and
payables, loans and receivables, short
and long term borrowings. The Group
does not have any significant financial
risks in respect of trade receivables and
payables. The main area of financial risk
arises in respect of interest rate risk on
long-term borrowings. Certain aspects
of financial risk management are
considered further as detailed below.

The Group is exposed to a variety of
financial risks comprising:

•

interest rate risk;

credit risk;

liquidity risk;

foreign exchange risk; and

fair values.

The Board of Directors has overall
responsibility for identifying and
managing operational and financial risks.

Interest rate risk

Corporate debt facility

During the year the Group negotiated
a temporary increase in the limit of the
Senior Debt Facility Agreement with
the Commonwealth Bank of Australia
(“CBA”) to a facility amount of $45m
(2014: $35m). The facility limit reverts
to $35m on 31 January 2016 and
the maturity date remains 1 January
2017. This Facility is primarily to be
used for working capital and general
corporate purposes but also provides
for a business card facility and a lease
finance facility. Interest on the Facility is
charged at a floating rate plus a margin.

Lease financing facilities – New Zealand

On 22 June 2015, Westpac New Zealand
became the sole funder to the CSG
Finance NZ Trust securitisation funding
facility, with CBA’s commitment
transferred to Westpac New Zealand
on that date. The availability period
for writing new business was extended

CSG 14|15 ANNUAL REPORT 55

NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2015

12 months until 15 April 2017, with a
final maturity date of 15 April 2019. The
funding limit under this facility is $85m
(NZ$95m) (2014: NZ$100m) Interest on
the CSG Finance NZ Trust securitisation
funding facility is charged at a floating
rate plus a margin, and re-prices on
a monthly basis. As the finance lease
receivables are predominantly fixed rate
in nature, the Group enters into interest
rate swaps to fix these floating rate
exposures.

In addition to the CSG Finance NZ
Trust securitization funding facility, the
Group has funded leasing activities in
New Zealand by way of finance leases
with CBA through a Cash Advance
Facility, also secured by finance lease
receivables, operated by CSG Finance
NZ (Facility 2) Limited. The facility
limit is $31.3m (NZ$35.0m) (2014:
NZ$35.0m). The maturity date of this
facility has been extended a further 12
months to 24 January 2017. Interest on
the facility is charged at a floating rate plus
a margin and re-prices at specified short-
term intervals.

Lease financing facilities – Australia

On 22 June 2015, Westpac became the
sole funder to the CSG Finance Australia
Trust securitisation funding facility,
with CBA’s commitment transferred
to Westpac on that date. The funding
limit under this facility is $100m (2014:
$65m). The availability period for writing
new business was extended 12 months
until 10 February 2017 and the facility
matures on 10 February 2019. Interest
on the CSG Finance Australia Trust
securitisation funding facility is charged
at a floating rate plus a margin, and
re-prices generally on a quarterly basis.
As the finance lease receivables are
predominantly fixed rate in nature, the
Group enters into interest rate swaps to
fix these floating rate exposures.

In June 2015, the Group negotiated
an increase in the facility limit of the
Senior Facility operated by subsidiary
CSG Finance Group Receivables
Pty Ltd. The facility limit is $25m
(2014:$15m) and the debt is secured
by the finance lease receivables. The
maturity date of this facility has been

extended a further 12 months to 23
January 2017. Interest on the facility is
charged at a floating rate plus a margin
and re-prices at specified short-term
intervals (usually one month).

Financial instruments are subject to
the risk that market values may change
subsequent to their acquisition. In the
case of interest rates, market changes will
affect the cash flows of interest income
and interest expense for the Company
and Group. The management of the
Group’s exposure to interest rates is
carried out through regular monitoring
of the interest re-pricing profile for both
assets and liabilities of the Group. In terms
of the securitisation facilities interest rate
swaps are taken out by the trust entities
to hedge 100% of the debt drawn to
fund future cash flow equivalent to the
portfolio designated “securitised” leases.

The Group’s exposure to interest rate
risks and the effective interest rates of
financial assets and financial liabilities,
both recognised and unrecognised at
the balance date, are detailed in the
table provided below.

Interest Rate Sensitivity Analysis

2015
$000’s

2014
$000’s

Impact on Income
Statement

Impact on Equity

Impact on Income
Statement

Impact on Equity

Increase/
(decrease) on profit

Increase/
(decrease) on equity

Increase/
(decrease) on profit

Increase/
(decrease) on equity

Interest Rates:

100 bps increase:

Cash flow sensitivity:

Impact on interest income on cash

Impact on interest expense on loans

Impact on cash flows from
derivative

Fair value sensitivity:

Impact on derivative fair value at
balance date

Total impact

Interest Rates:

100 bps decrease:

Cash flow sensitivity:

Impact on interest income on cash

Impact on interest expense on loans

Impact on cash flows from
derivative

Fair value sensitivity:

Impact on derivative fair value at
balance date

208

(1,774)

1,110

2,729

3,683

(208)

1,774

(1,110)

208

(1,774)

1,110

2,729

3,683

(208)

1,774

(1,110)

189

(1,256)

818

1,554

1,305

(189)

1,256

(818)

189

(1,256)

818

1,554

1,305

(189)

1,256

(818)

(2,729)

(1,554)

Total impact

(3,683)

(1,305)

b. Credit Risk Exposures

Credit risk is the risk that a loss will
be incurred if a counterparty to a
transaction does not fulfill its financial
obligations. Management is responsible
for sanctioning large credit exposures
to all customers arising from lending
activities. Financial instruments that
potentially subject the Group to
concentrations of credit risk consist
principally of cash and bank balances,
finance leases receivables, trade
receivables and prepayments.

The Group has a credit policy that is used
to manage its exposure to credit risk. As
part of this policy, limits on exposures
have been set, lease agreements are
subject to defined criteria, and leases are
monitored on a regular basis. Maximum
exposures are net of any recognised
provisions. The maximum credit risk
is the contract value of the leases. To
control the level of credit risk taken,
management evaluates each customer’s
credit risk on a case by case basis. Credit
risk is mitigated by the large number
of clients and relatively small size of
individual credit exposures.

For finance and operating leases the
collateral taken on the provision of a
financial facility is by way of a registered
security interest over the leased asset.
In some cases a personal guarantee is
obtained. Loan and lease agreements
provide that, if an event of default occurs,
collateral will be repossessed and/or
the personal guarantee invoked. The
repossessed collateral is either held until
overdue payments have been received
or sold in the secondary market.

In addition the Company has contingent
liabilities relating to buy back guarantees
on certain finance contracts for the
lease of copiers and multi-function
devices by customers. The Company
undertakes a credit approval process
to determine whether it is prepared
to buy back the loan on default. When
a circumstance arises where the
Company is required to buy back the
loan, the equipment financed becomes
the property of the Company.

Concentrations of Credit Risk

The Group minimises concentrations
of credit risk in relation to trade
receivables by undertaking transactions
with a large number of customers. The
print businesses have a broad range
of clients across all sectors of the
economy, and spread throughout all
regions of Australia and New Zealand.
The leasing business has a wide spread
of clients across all economic sectors
and regions of Australia and New
Zealand. The Group does not have any

material credit risk exposure to any
single debtor or group of debtors under
financial instruments entered into by
the consolidated entity.

Impairment

At 30 June 2015, the ageing of the trade
and other receivables that were not
impaired was as follows:

2015

2014

222,754

178,680

9,634

4,374

1,610

1,150

1,807

372

Neither
past due or
impaired

Past due 1 – 30
days

Past due not
impaired 31 –
90 days

Past due not
impaired 91+
days

235,805

184,576

Management believes that the
unimpaired amounts that are past due
by more than 30 days are still collectible
in full, based on historic payment
behavior and analysis of individual
customer credit risk.

c. Liquidity Risk

Liquidity risk is the risk that the Group
will encounter difficulty in meeting the
obligations associated with its financial
liabilities that are settled by delivering
cash or other financial assets. The
Group’s approach to managing liquidity
is to ensure, as far as possible, that it
will have sufficient liquidity to meet
its liabilities when they are due, under
both normal and stressed conditions.
The level of expected cash inflows
from trade and lease receivables are
closely monitored against the predicted
outflows arising from operations. The
Group has access to various financing
facilities to support its lease receivables
financing activities, and to provide
funding for working capital and general
corporate purposes. Refer to Note 25
(c) for details on the unused banking
facilities.

The securitisation financing facilities
in both Australia and New Zealand
require the Group to contribute to
credit enhancement. At 30 June 2015,
this comprised 8.8% of the net pool
balance of securitised leases for the
New Zealand facility ($6.1m (NZ$6.8m))
and 11.6% of the net pool balances of
securitised leases for the Australian
facility ($10.2m).

As part of the arrangements regarding

the Cash Advance Facility and the
Senior Facility, the Group is required to
contribute towards credit protection
reserves. The credit protection reserve
of the Cash Advance Facility is a cash
reserve maintained at 10% of the loan
drawn to fund the lease book value
(2014: 10%), and for the Senior Facility,
a cash reserve of 15% of the loan drawn
to fund the lease book value (2014: 15%).
The cash reserve maintained for the
Cash Advance Facility at balance date
was $3.1m (NZ$3.5m) (2014: $2.9m (NZ
$3.1m)) and for the Senior Facility $2.0m
(2014: $1.0m).

The Company was in full compliance
with these covenants at balance date.

Cash reserve accounts are restricted
under the financing arrangements. The
funds will be repaid to the Group on
request if the Company has paid more
than required for the Credit Protection.
Once a month funds paid into the bank
accounts by the lessees, which do
not relate to repayment of principal
balances, are returned to the Group.

d. Foreign Exchange risk

The Group operates internationally
and is exposed to foreign exchange
risk arising from various currency
exposures, primarily with respect to the
New Zealand dollar and US dollar.

Foreign exchange risk arises from
future commercial transactions,
recognised assets and liabilities and net
investments in foreign operations.

The Company’s subsidiary, Konica
Minolta Business Solutions New
Zealand Limited, settles purchases
of equipment predominantly in US
dollars. All committed purchases are
fully hedged using forward contracts or
option contracts to buy US$ / sell NZ$ to
protect from exchange rate movements
between the shipping date and
settlement. Forecast highly probable
but not yet committed purchases may
also be hedged using forward contracts
or option contracts. Foreign exchange
hedge contracts have maturities of less
than one year and are designated as
cash flow hedges.

As at 30 June 2015, a total of US$4.7m
of forward cover was in place with an
average NZ$/US$ rate of 0.7217.

The Company has hedged it’s exposure
to income generated by the New
Zealand businesses using purchased
put options.

As at 30 June 2015, a total of NZ$17.7m
of forward cover was in place at an
average rate of 0.93.

CSG 14|15 ANNUAL REPORT 57

NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2015

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Note 7:
Revenue

Revenues from continuing operations

Sales revenue

Revenue from sales of goods

Revenue from services

Other Income

Sundry

Interest rate swap income

Gain/(Loss) on foreign exchange

Consolidated entity

2014
$’000

83,565

90,364

173,929

4,321

1,378

509

6,208

2015
$’000

103,621

89,540

193,161

6,637

833

(88)

7,382

CSG 14|15 ANNUAL REPORT 59

NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2015

Note 8:
Profit From Continuing Operations

Profit from continuing operations before income tax has been determined after the
following specific expenses:

Changes in inventories of finished goods

Cost of goods

Cost of sales – service

Cost of sales – service (employee benefits)

Total changes in inventories of finished goods

Other expenses

Bad debts expense

Other

Total other expenses

Depreciation and amortization

Plant and equipment

Leased property, plant and equipment

Leasehold improvements

Amortisation of customer contracts/relationships

Amortisation of intangible assets

Amortisation of borrowing costs

Total depreciation and amortisation

Finance costs

Interest

Bank fees

Total finance costs

Consolidated entity

2014
$’000

44,926

33,752

19,012

97,690

909

2,343

3,252

1,735

470

325

2,267

278

5,161

902

152

1,054

2015
$’000

52,148

34,925

18,826

105,899

811

(126)

685

1,027

105

243

2,266

682

195

4,518

1,454

145

1,599

Note 9:
Income Tax

a. Components of tax expense:

Current tax expense in respect of the current year:

Deferred tax expense recognised in the current year

Adjustments recognised in the current year in relation to the prior year

Total tax expense

b. Prima facie tax payable

The prima facie tax payable on profit before income tax is reconciled to the income
tax expense as follows:

Profit/loss before tax from continuing operations

Prima facie income tax payable on profit before income tax at 30% (2013: 30%)

Add tax effect of:

other non-allowable items

effect of different tax rates in other jurisdictions (i)

share-based payments

under provision for income tax in prior years

Less tax effect of:

other non-assessable items

non-assessable group dividends

Income tax expense attributable to profit

c. Deferred tax

Deferred tax relates to the following:

Deferred tax assets

The balance comprises:

Inventories

Doubtful debts

Property, plant and equipment

Accrued expenses

Provision for annual and long service leave

Other provisions

Research and development tax offsets

Tax losses carried forward

Share issue costs

Other

Total deferred tax assets

(i) The corporate tax rate in New Zealand is 28%.

Consolidated entity

2014
$’000

2,642

3,256

(170)

5,728

17,815

5,345

1,016

(338)

791

1,479

(653)

(443)

(1,096)

5,728

230

343

253

536

793

376

1,156

3,857

345

267

8,156

2015
$’000

2,096

6,573

(374)

8,295

22,608

6,782

1,002

(274)

1,141

(28)

1,841

(328)

(0)

(328)

8,295

335

280

565

1,107

841

624

2,348

6,928

131

100

13,259

CSG 14|15 ANNUAL REPORT 61

NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2015

Note 9: Income Tax (cont.)

Deferred tax liabilities

The balance comprises:

Accrued revenue

Property, plant and equipment

Operating Leases

Other

Total deferred tax liabilities

Net Deferred tax (liabilities)/assets

Deferred income tax related to items charged or credited directly to equity

Share issue costs

Total

Note 10: Dividends On Ordinary Shares

Dividends paid during the year

i. Current Year Interim

Unfranked dividends (4 cents per share)
(2014: nil cents per share)

ii.

Prior Year Final

Unfranked dividends (5 cents per share)
(2014: nil cents per share).

b. Franking credit balance

Balance of franking account at year end adjusted for franking credits arising from
payment of provision for income tax and deducting franking credits to be used in
payment of proposed dividends

c. Dividends proposed and not recognised as a liability

Unfranked dividends of 5 cents per share were declared and approved on 17 August
2015 for a payment date of 8 September 2015. Refer to Note 33.

Consolidated entity

2015
$’000

2014
$’000

(1,119)

(2,074)

(12,417)

(1,084)

(16,694)

(3,435)

108

(1,200)

(2,184)

(2,285)

(1,305)

(6,974)

1,182

360

Consolidated entity

2015
$’000

2014
$’000

11,366

13,965

819

488

Note 11: Cash And Cash Equivalents

Cash at bank

Restricted cash (i)

Cash on hand

(i) Cash amounts provided as part of credit protection reserve – refer note 6.

Note 12: Receivables

Trade receivables

Impairment

Sundry debtors

Finance Lease receivables

Current

Non-current

Note 13: Inventories

Finished goods

Consumables

Toner in Field

Consolidated entity

2014
$’000

12,391

14,861

27,268

Consolidated entity

2014
$’000

20,464

(464)

3,072

23,072

57,617

103,887

161,504

Consolidated entity

2014
$’000

16,617

9,273

15,071

40,961

2015
$’000

10,844

13,895

24,754

2015
$’000

23,978

(371)

2,155

25,762

67,598

142,444

210,042

2015
$’000

17,085

7,566

16,941

41,592

Finished goods comprises multi-function devices, printers and related accessories. Toner in field comprises unutilized toner held at customer premises.

Note 14: Other Current Assets

Prepayments

Other

Consolidated entity

2014
$’000

3,194

3,352

6,546

2015
$’000

2,237

4,337

6,574

CSG 14|15 ANNUAL REPORT 63

NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2015

Note 15: Derivative Assets

Derivatives – Foreign currency options

Note 16: Property, Plant And Equipment

Consolidated entity

2014
$’000

2015
$’000

915

Notes

Consolidated entity

2015
$’000

2014
$’000

Leasehold improvements

At Cost

Accumulated depreciation

Plant and equipment

At Cost

Accumulated depreciation

Furniture and fittings

At Cost

Accumulated depreciation

Office computer equipment

At Cost

Accumulated depreciation

Leased plant & equipment

At Cost

Accumulated depreciation

Total written down value

Reconciliation of the carrying amount of property,
plant and equipment at the beginning of the year

Leasehold improvements

Carrying amount

Transfer between classes

Additions

Foreign currency translation

Depreciation expense

16(a)

3,102

(2,592)

510

791

(485)

306

3,532

(3,104)

428

8,949

(7,859)

1,090

642

(615)

2,361

543

216

(6)

(243)

510

3,093

(2,550)

543

902

(645)

257

3,685

(3,004)

681

9,145

(8,106)

1,039

736

(589)

147

2,667

693

122

(325)

543

Plant & equipment

Carrying amount

Transfer between classes

Disposals

Additions

Foreign currency translation

Depreciation expense

Furniture & fittings

Carrying amount

Transfer between classes

Disposals

Additions

Foreign currency translation

Depreciation expense

Office computer equipment

Carrying amount

Transfer between classes

Disposals

Additions

Foreign currency translation

Depreciation expense

Motor Vehicles

Carrying amount

Disposals

Additions

Depreciation expense

Leased plant & equipment

Carrying amount

Transfer between classes

Disposals

Additions

Foreign currency translation

Depreciation expense

Consolidated entity

2015
$’000

2014
$’000

257

(74)

306

681

(10)

(294)

428

1,039

(53)

(3)

780

(14)

(659)

1,090

147

(12)

(3)

(105)

428

(49)

(193)

257

997

(78)

(336)

681

1,714

228

(971)

1,039

676

(441)

(235)

569

(470)

147

CSG 14|15 ANNUAL REPORT 65

NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2015

Note 17: Intangible Assets

Goodwill

Net carrying amount

Opening net book amount

Adjustment to prior period acquisitions

Additions

Closing net book value

Customer Contracts/Relationships

Customer Contracts/Relationships on consolidation

Accumulated amortisation

Net carrying amount

Opening net book amount

Amortisation expense

Closing net book value

Licenses and other intangibles assets

Licenses and other intangibles at cost

Accumulated amortisation

Net carrying amount

Opening net book amount

Additions

Amortisation expense

Closing net book value

Total

Consolidated entity

2014
$’000

162,888

162,457

431

162,888

31,727

(9,734)

21,993

24,260

(2,267)

21,993

6,598

(478)

6,120

2,054

4,344

(278)

6,120

2015
$’000

164,317

162,888

1,429

164,317

31,727

(12,000)

19,727

21,993

(2,266)

19,727

10,376

(1,187)

9,189

6,120

3,946

(877)

9,189

193,233

191,001

For the purpose of impairment testing, goodwill is allocated to the Group’s operating divisions. The aggregate carrying amounts of
goodwill allocated to each CGU are as follows:

Business Solutions Australia

Enterprise Solutions Australia

Business Solutions New Zealand

Finance Solutions Australia

Finance Solutions New Zealand

Consolidated entity

2014
$’000

67,268

70,019

1,216

24,385

162,888

2015
$’000

57,388

3,406

70,019

9,120

24,385

164,317

The recoverable amounts of the CGUs are based on their value in use, determined by discounting the future cash flows covering a five
year period, based on financial budgets approved by the Board, plus a terminal growth rate.

Key assumptions used in the calculation of value in use were discount rate and the EBITDA growth rate, which are listed in the table below.

Business Solutions Australia

Enterprise Solutions Australia

Business Solutions New Zealand

Finance Solutions Australia

Finance Solutions New Zealand

Terminal Growth Rate

Discount Rate

2015

2.5%

2014

2.5%

2015

10.2%

10.7%

10.4%

11.3%

10.3%

2014

11.6%

10.6%

11.6%

10.1%

The discount rate applied was a pre-tax measure based on the risk-free rate obtained from the yield on 10-year bonds issued by the
government in the relevant market and in the same currency as the cash flows adjusted for a risk premium to reflect both the increased
risk of investing in equities generally and the systemic risk of the specific CGU.

The Board has determined there are no reasonably possible changes that could occur in the two key assumptions that would cause the
carrying amount of these CGUs to exceed their recoverable amount.

Note 18: Payables

CURRENT

Trade payables

Other payables

Note 19: Short Term Borrowings

CURRENT

Secured

Loans and Borrowings

Other

Consolidated entity

2014
$’000

27,415

15,411

42,826

Consolidated entity

2014
$’000

675

2015
$’000

15,561

27,674

43,235

2015
$’000

9,400

731

10,131

Note 20: Debt Associated With Lease Receivables

CURRENT

Loans and borrowings

NON - CURRENT

Loans and borrowings

Consolidated entity

2014
$’000

3,716

134,614

2015
$’000

617

187,149

CSG 14|15 ANNUAL REPORT 67

NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2015

Note 21: Derivatives Liabilities

NON - CURRENT

Derivatives – Interest rate swaps

Information about interest rate risk is detailed in Note 6

Note 22: Provisions

CURRENT

Employee Benefits

Other

NON - CURRENT

Employee Benefits

Other

Note 23: Contributed Equity

Issued and paid up capital

Ordinary shares fully paid

2015
$’000

2,441

2015
$’000

2,584

741

3,325

545

2015
$’000

166,533

The Company does not have authorised capital or par value in respect of its issued shares. All issued shares are fully paid.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote
per share at meetings of the Company.

b. Movement in shares on issue

Beginning of the financial year

Share buy-backs

Issued shares

Tax exempt share plan

Capital distribution

Capital raising costs deferred tax asset

No. of shares

278,840,492

4,950,328

358,019

Balance at the end of the year

284,148,839

2015
$’000

160,838

5,653

150

(108)

166,533

No. of shares

278,155,477

(132,583)

300,000

517,598

278,840,492

Consolidated entity

2014
$’000

1,118

Consolidated entity

2014
$’000

2,291

863

3,154

604

722

1,326

Consolidated entity

2014
$’000

160,838

2014
$’000

172,250

(117)

225

(11,159)

(361)

160,838

c. Employee Share Scheme

The Company, in accordance with its Executive Remuneration Framework, continued to offer employee participation in short-term and
long-term incentive schemes as part of the remuneration packages for the employees of the companies.

d. Options

All employees, including Directors, may be issued options at the discretion of the Nomination and Remuneration Committee.

The options are issued for $nil consideration and the strike price and vesting period are set by the Nomination and Remuneration
Committee. The options are exercisable in two or three tranches and have an expiry period of up to three years. The total amount of
issued options cannot exceed 5% of share capital. The options are not listed on the ASX and any Director issued options are approved at
the Annual General Meeting.

During the 2015 financial year there were no additional options granted to employees or Directors.

Options on issue 30 June 2015:

Issued date

Expiry date

Exercise
price

Opening
01/07/2014

LTIP Issue 3

15/09/2014

$0.71

450,000

Issued

Exercised

Lapsed

(450,000)

Options on issue 30 June 2014:

Issued date

Expiry date

Exercise
price

Opening
01/07/2013

Issued

Exercised

Lapsed

Closing
30/06/2015

Closing
30/06/2014

LTIP Issue 1
and 2

01/01/2014

$1.18 - $1.23

1,020,000

LTIP Issue 3

15/09/2014

$0.71

750,000

1,770,000

(1,020,000)

(300,000)

450,000

(300,000)

(1,020,000)

450,000

e. Performance Rights

Each performance right represents an option to receive one ordinary share subject to the satisfaction or waiver of the relevant vesting
conditions. No consideration is payable by the participants for the grant of the performance rights and no consideration is to be paid on
the exercise of the performance rights.

Performance rights on issue at 30 June 2015:

Issued Date

LTIP Issue 5 & 7

LTIP Issue 6

LTIP Issue 8

MAIP

Total

Performance
Hurdle Date

Opening
01/07/2014

30/11/2014

30/11/2015

30/11/2016

01/08/2015

30/11/2015

30/11/2016

1/07/2017

4,600,327

5,859,333

4,100,332

606,061

Issued

Lapsed

Vested

(99,999)

(4,500,328)

857,329

843,717

57,143

564,945

1,779,731

(936,381)

(664,666)

Closing
30/06/2015

5,780,281

4,279,383

606,061

57,143

564,945

1,779,731

15,166,053

4,102,865

(1,701,046)

(4,500,328)

13,067,544

Performance rights on issue at 30 June 2014:

Issued Date

LTIP Issue 5 & 7

LTIP Issue 6

LTIP Issue 4

Total

Performance
Hurdle Date

Opening
01/07/2013

Issued

Lapsed

Vested

30/11/2014

30/11/2015

30/11/2016

01/08/2015

30/06/2014

4,600,327

5,859,333

4,100,332

606,061

229,213

15,395,266

(229,213)

Closing
30/06/2014

4,600,327

5,859,333

4,100,332

606,061

15,166,053

CSG 14|15 ANNUAL REPORT 69

NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2015

Note 24: Reserves And Retained Earnings

Consolidated entity

Share-based payment reserve

Foreign currency translation reserve

Cash flow hedge reserve

Retained earnings

a. Share-based payment reserve

i. Nature and purpose of reserve

Notes

24(a)

24(b)

24(c)

24(d)

2015
$’000

2,065

3,129

(2,047)

3,147

70,768

This reserve is used to record the value of equity benefit provided to employee and Directors as part of their remuneration.

ii. Movements in reserve

Balance at beginning of year

Equity settled transactions

Balance at end of year

b. Foreign currency translation reserve

i. Nature and purpose of reserve

This reserve is used to record the exchange differences arising on translation of a foreign entity.

ii. Movements in reserve

Balance at beginning of year

Exchange differences on translation of foreign operations

Balance at end of year

c. Cash flow hedge reserve

i. Nature and purpose of reserve

This reserve is used to record the effective portion of changes in the value of hedging derivatives.

ii. Movements in reserve

Balance at beginning of year

Net gains/(losses) taken to equity

Net gains/(losses) transferred to profit and loss

Balance at end of year

d. Retained Earnings

Balance at beginning of year

Net profit attributable to members

Total available for appropriation

Dividends paid

Balance at end of year

3,466

(1,401)

2,065

5,412

(2,283)

3,129

213

(2,260)

(2,047)

82,527

13,572

96,099

(25,331)

70,768

2014
$’000

3,466

5,412

213

9,091

82,527

654

2,812

3,466

1,894

3,518

5,412

587

(374)

213

71,402

11,125

82,527

Note 25: Cashflow Information

a. Reconciliation of cash flow from operations with profit after income tax
Profit from ordinary activities after income tax

Non-cash items

Profit/(loss) on sales of assets

Amortisation of intangibles

Depreciation of property, plant and equipment

Share based transactions

Cash flow hedge

(Increase)/decrease in assets

Receivables

Prepayments

Inventories

Deferred tax assets

Lease receivables

Increase/(decrease) in liabilities

Payables

Provisions

Deferred tax liabilities

Tax provisions

Interest paid/(received)

Consolidated entity

2014
$’000

12,087

(19)

2,631

2,530

2,812

(374)

7,580

(3,780)

(3,073)

(5,695)

940

(45,979)

4,421

(113)

(288)

906

2015
$’000

14,313

(15)

3,143

1,375

3,804

(745)

7,562

(2,691)

(28)

(631)

1,182

(41,774)

801

(610)

3,435

(810)

Net cash flow from operating activities

(19,251)

(32,994)

b. Reconciliation of cash

Cash balance comprises:

Cash at bank

c. Credit stand-by arrangements and loan facilities

Multi-function facility (i)

Securitisation and lease finance facilities – NZ (ii) & (iii)

Securitisation and lease finance facilities – Australia (iv) & (v)

Facilities Used

Multi-function facility

Securitisation and lease finance facility – NZ

Securitisation and lease finance facilities – Australia

Facilities Unused

Multi-function facility

Securitisation and lease finance facility – NZ

Securitisation and lease finance facilities – Australia

24,754

27,268

45,000

115,105

125,000

285,105

9,400

93,994

93,771

197,165

35,600

21,111

31,229

87,940

35,000

125,456

80,000

240,456

820

94,024

44,309

139,153

34,180

31,432

35,691

101,303

ii.

The Company has a multi-function facility with the CBA (Australian Senior Debt
Facility). Debt facilities include bank bills, business loans, overdraft, equipment finance
and contingent liabilities and are available to all members of the consolidated group
including the parent. The multi-function facility includes an amount of $1.5m in relation
to various guarantees and security deposits provided by the bank on behalf of the
Company. This facility matures on 1 January 2017. A temporary increase in the facility
limit to $45m was negotiated during the period reverting to $35m on 31 January 2016.
The Group’s Westpac Banking Corporation New Zealand funding facility, securitised by
finance lease receivables (“New Zealand Securitisation Facility”), matures on 15 April
2019. The facility limit is NZ$95m.

iii. The Group’s CBA New Zealand Cash Advances Facility, secured by finance lease

receivables, matures on 24 January 2017. The facility limit is NZ$35m.

iv. The Group’s Westpac Banking Corporation Australia funding facility securitised by

finance lease receivables (“Australian Securitisation Facility”), matures on 10 February
2019. The facility limit was increased to $100m to support the ongoing growth in the
Australian lease book.
The Group’s CBA Senior Facility, secured by finance lease receivables, matures on 23
January 2017. The facility limit was increased to $25m to support the ongoing growth in
the Australian lease book.

CSG 14|15 ANNUAL REPORT 71

NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2015

Note 26: Lease Commitments

Lease expenditure commitments

Operating Leases (non-cancellable)

Operating leases relate to the lease of land, buildings,
vehicles and office computer equipment

ii. Minimum lease payments

Commitments for minimum lease payments in relation to
non-cancellable operating leases are payable as follows:

No later than one year

Later than one year but not later than five years

Later than five years

Notes

Consolidated entity

2015
$’000

2014
$’000

5,176

9,496

14,676

4,815

8,701

124

13,640

Note 27: Business Combinations

During the year the Company purchased from Capital Finance Limited a business comprising lease receivables for total purchase
consideration of $12m.

The provisional acquisition accounting had the following effect on the consolidated entity’s assets and liabilities:

Assets

Finance lease receivables

Collective Provision

Specific Provision

Total Assets

Net identifiable assets and liabilities

Goodwill and other intangibles on acquisition

Total Consideration

Net Cash outflow

Note 28: Related Party Disclosures

a. Key Management Personnel Compensation

The key management personnel compensation comprised:

2015
$’000

10,419

(300)

(42)

10,077

1,429

11,506

Short-term employee benefits

Post-employment benefits

Termination benefits

Other long-term benefits

2015
In dollars

2,783,190

97,625

90,191

2,052,968

5,023,974

Consolidated entity

2014
In dollars

3,249,404

110,992

1,932,330

5,292,726

Individual Directors and executives compensation disclosures

Information regarding individual Directors and executive’s compensation and some equity instruments disclosures as required by
Corporations Regulation 2M.3.03 is provided in the Remuneration Report section of the Directors’ Report.

Apart from the details disclosed in this note, no Director has entered into a material contract with the Group since the end of the previous
financial year and there were no material contracts involving Directors’ interests existing at year end.

c. Loans to related parties

The following table provides the total amount of transactions that were entered into with related parties for the relevant year.

Loans made by CSG Limited to controlled entities under normal terms and
conditions. The aggregate amounts receivable/(payable) from controlled entities by
the parent entity at the end of the reporting period were :

Consolidated entity

2015
In dollars

2014
In dollars

26,496,916

49,459,500

d. Movements in Shares

The number of ordinary shares in the Company held directly, indirectly or beneficially, by each key management person, including their
related parties, is as follows:

30 June 2015:

Held at
1 July 2014

Purchases

Received on
Exercise of
Performance
Rights

Sales

Ceased
as a KMP

Held at
30 June 2015

DIRECTORS

Mr. Thomas Cowan

19,924,622

Mr. Philip Bullock

Mr. Ian Kew(i)

Mr. Stephen Anstice

Mr. Mark Phillips

Ms. Robin Low

KEY MANAGEMENT

Ms. Julie-Ann Kerin

Mr. Neil Lynch

Mr. Declan Ramsay

Mr. Warwick Beban

Mr. Stephen Birrell

Mr. Shailendra Singh(ii)

37,927

69,730

22,073

140,000

60,000

46,362

1,333,333

(1,200,000)

533,333

266,667

533,333

(500,000)

(266,667)

(500,000)

19,924,622

60,000

(69,730)

140,000

60,000

46,362

133,333

33,333

266,667

33,333

20,032,279

268,435

2,933,333

(2,466,667)

(69,730)

20,697,650

(i) Mr. Kew resigned as a Director and therefore ceased to be a KMP on 20 November 2014.
(ii) Commenced employed on 10 December 2014. Ceased employment on 12 August 2015.

30 June 2014:

Held at
1 July 2013

Purchases

Received on
Exercise of
Options

Sales

Ceased
as a KMP

Held at
30 June 2014

DIRECTORS

Mr. Thomas Cowan

19,924,622

Mr. Philip Bullock

Mr. Ian Kew

37,927

69,730

20,032,279

19,924,622

37,927

69,730

20,032,279

CSG 14|15 ANNUAL REPORT 73

NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2015

Note 28: Related Party Disclosures (cont.)

e. Transactions with Key Management Personnel

The Group used the corporate advisory services of TDM Asset Management, a firm which Mr. Thomas Cowan is a partner of, during the
year for the total amount of $17,500. Amounts were billed based on normal market rates for such services and were due and payable
under normal payment terms.

During the financial year, the companies in the Group entered into agreements in respect of the purchase of print and technology
products and services on normal commercial terms and conditions by related entities of the Directors.

f. Group Entities

The consolidated financial statements include the financial statements of CSG Ltd and its controlled entities listed below:

Former Name

Parent Entity

CSG Limited (i)

Subsidiaries of CSG Limited:

CSG Business Solutions (AUS) Pty Ltd(i)

CSG Communications Pty Ltd

CSG Finance Pty Ltd(i)

CSG Print Services NZ Limited (iii)

Anadex Pty Ltd ATF Anadex Trust (i),(ii)

Bexton Professional Pty Ltd (i), (ii)

Change Corporation Pty Ltd (i), (ii)

CSG Enterprise Solutions Pty Ltd (i)

CSG Enterprise Print Solutions Pty Ltd

A.C.N. 126 840 542 Pty Ltd (i), (ii)

CSG Education Pty Ltd (i), (ii)

Delexian Pty Ltd (i), (ii)

Aaromba Technologies Pty Ltd (i), (ii)

Subsidiary of Aaromba Technologies Pty Ltd:

Aaromba Technologies WA Pty Ltd (i) (ii)

Subsidiaries of CSG Business Solutions (AUS) Pty Ltd:

CSG Business Solutions (NT) Pty Ltd (i)

Connected Solutions Group Pty Ltd

CSG Print Services Pty Ltd(i)

CSG Business Solutions (Sunshine Coast) Pty Ltd (i)

Sunshine Coast Office Equipment
Pty Ltd

CSG Business Solutions (South Queensland) Pty Ltd (i)

Haloid Holdings Pty Ltd

CSG Business Solutions (North Queensland) Pty Ltd (i)

Seeakay Pty Ltd

Subsidiaries of CSG Enterprise Print Solutions Pty Ltd:

CSG Enterprise Solutions (Singapore) Pte. Ltd

Country of
Incorporation

Ownership
interest

2015
%

2014
%

Australia

New Zealand

Australia

100

Australia

100

Australia

100

Singapore

100

Subsidiaries of CSG Finance Pty Ltd:

CSG Finance (NZ) Limited (iii)

CSG Finance Australia Pty Ltd (i)

Leasing Solutions Limited

New Zealand

Australia

100

Parent Entity

Subsidiaries of CSG Finance Australia Pty Ltd:

CSG Finance Group Receivables Pty Ltd(i)

CSG Finance Australia Trust

Subsidiaries of CSG Print Services NZ Limited:

Former Name

Country of
Incorporation

Ownership
interest

2015
%

2014
%

Australia

100

CSG Business Solutions Limited (iii)

CSG Management Services Limited

New Zealand

Konica Minolta Business Solutions New Zealand Limited

Ubix Business Solutions Limited (iii)

New Zealand

Subsidiaries of CSG Finance (NZ) Limited:

Leasing Solutions Limited

CSG Finance (NZ Facility 2) Limited (iii)

Onesource Finance Limited

New Zealand

CSG Finance (NZ Warehouse) Limited (iii)

Solutions Group Receivables Limited

New Zealand

CSG Finance New Zealand Trust

New Zealand

100

(i) CSG Limited and its Australian subsidiaries are part of a tax consolidated group.
(ii) Dormant company which historically held assets and liabilities for the Technology Solutions Division which was sold in 2012. Member’s voluntary liquidation is currently underway.
(iii) Form part of a NZ tax consolidated group.

Note 29: Deed Of Cross Guarantee

CSG Limited and its Australian wholly
owned subsidiaries (excluding CSG Finance
Entities) are parties to a Deed of Cross
Guarantee under which each company
guarantees the debts of others.

By entering into the Deed, the participating
wholly owned entities have been relieved
of the requirements to prepare financial
reports and Director’s Report under the
Class Order 98/1418 (as amended by Class
Orders 98/2017, 00/0321 and 01/1087)

issued by the Australian Securities and
Investment Commission.

The above companies represent a ‘Closed
Group’ for the purpose of the Class Order,
and there are no other parties to the Deed
of Cross Guarantee that are controlled
by CSG Limited, that also represent the
‘Extended Closed Group’. Those wholly
owned subsidiaries which are included in
the Deed of Cross Guarantee are exempt
from preparing a financial report and

Director’s Report under the terms of ASIC
Class Order 98/1418 and the Corporations
Act 2001.

A consolidated Income Statement,
consolidated Statement of Comprehensive
Income and consolidated Statement
of Financial Position, comprising the
Company and controlled entities which
are a party to the Deed, after eliminating all
transactions between parties to the Deed
of Cross Guarantee is set out as follows:

Income Statement

Revenue and income

Operating expenses

Profit/(loss) before income tax expense

Income tax expense

Net profit/(loss)

Statement of Other Comprehensive Income and Retained Earnings

Profit/(loss) for the period

Other comprehensive income

Total comprehensive income for the period

Retained earnings at the beginning of the year

Dividends distributed

Retained earnings at the end of the year

2015
$’000

102,331

(95,462)

6,869

(3,446)

3,423

66,128

(25,331)

44,220

2014
$’000

84,004

(85,797)

(1,793)

552

(2,345)

68,473

66,128

CSG 14|15 ANNUAL REPORT 75

NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2015

Note 29: Deed Of Cross Guarantee (cont.)

Consolidated entity

2015
$’000

2014
$’000

Statement of Financial Position

Current assets

Cash and cash equivalents

Trade and other receivables

Inventories

Lease receivables

Other current assets

Total current assets

Non-current assets

Lease receivables

Property, plant and equipment

Deferred tax assets

Intangible assets

Goodwill

Investment in subsidiaries

Total non-current assets

Total assets

Current liabilities

Bank overdraft

Trade and other payables

Deferred income

Borrowings

Debt associated with lease receivables

Deferred tax liability

Provisions

Total current liabilities

Non-current liabilities

Debt associated with lease receivables

Provisions

Total non-current liabilities

Total liabilities

Net assets

Equity

Share capital

Reserves

Retained earnings

Total equity

14,541

23,045

3,362

40,948

1,337

28,793

68,484

116,682

215,296

256,244

2,038

26,109

9,400

1,286

1,874

40,802

436

41,238

215,006

169,279

1,507

44,220

215,006

3,102

18,888

21,827

3,241

47,058

1,011

572

27,990

68,484

116,638

214,695

261,753

26,030

435

674

783

27,922

1,212

29,134

232,619

163,583

2,908

66,128

232,619

Note 30: Earnings Per Share

Consolidated entity

2015
$’000

2014
$’000

The following reflects the income and share data used in the calculations of basic and
diluted earnings per share:

Profit/(loss)

14,313

12,087

Weighted average number of ordinary shares used in calculating basic earnings per share

282,690,782

278,813,811

Effect of dilutive securities:

Effect of performance rights and options issued

13,205,393

15,616,061

Weighted average number of ordinary shares and potential ordinary shares used as the
denominator in calculating diluted earnings per share

295,896,176

294,429,872

Consolidated entity

2015
No. of Shares

2014
No. of Shares

Note 31: Auditors Remuneration

Auditors remuneration parent entity

Amount received or due and receivable to KPMG:

Statutory audits and reviews (excluding disbursements)

Other services (excl. disbursements)

Auditors remuneration overseas subsidiaries

Amount received or due and receivable to KPMG:

Statutory audits and reviews (excluding disbursements)

Other services (excl. disbursements)

Consolidated entity

2015
$’000

2014
$’000

217,193

98,659

315,852

131,604

174,000

53,700

227,700

140,893

Note 32: Segment Information

a. Description of Segments

Management has determined the
operating segment based on reports
reviewed by the Chief Executive Officer
and the Group Executive (comprising
the Chief Financial Officer and Group
General Managers) for making strategic
decisions. The Chief Executive Officer
and the Group Executive monitor the
business based on product/service
factors and have identified the following
reportable segments:

1. Business Solutions

CSG Business Solutions provides the
sale, support, service and financing
of print and business technology

equipment to customers across
Australia and New Zealand. CSG
Enterprise Solutions provides managed
service based print and technology
solutions for Tier 1 enterprise, education
and government customers also
in Australia and New Zealand. CSG
Enterprise Solutions is still in its growth
phase in terms of developing and
building a pipeline of potential business
and therefore will be grouped with
Business Solutions for the purpose of
segment reporting.

Management has determined that the
Australian and New Zealand businesses
are separate operating segments but
due to their similarity in terms of product

and service offerings in addition to the
methods used to distribute products
across both geographies these business
units will be aggregated for the purposes
of segment reporting.

2. Finance Solutions

CSG Finance Solutions is a specialist
service provider of lease and rental
products for business technology
assets sold and serviced by CSG in both
Australia and New Zealand.

3. Other

The remaining business operations/
activities (including corporate office
activities) are classified as ‘Other’ to
facilitate reconciliation to Group results.

CSG 14|15 ANNUAL REPORT 77

NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2015

Note 32: Segment Information (cont.)

b. Segment Information

2015

Segment revenue

External segment revenue

Inter- segment revenue

Total

Segment result

Interest revenue

Interest expense

Depreciation & amortisation

Total segment Profit/(loss)
before income tax

Total Segment Assets (i)

Total Segment Liabilities (i)

2014

Segment revenue

External segment revenue

Inter-segment revenue

Total

Segment result

Interest revenue

Interest expense

Depreciation & amortisation

Total segment Profit/(loss)
before income tax

Total Segment Assets (i)

Total Segment Liabilities (i)

Business
Solutions
$’000

199,223

874

293

2,135

26,422

200,152

53,943

Business
Solutions
$’000

178,533

427

2,709

20,050

196,610

46,368

(i) Excludes loans to and from CSG Group entities (related parties).

c. Geographical Information

CSG’s reporting segments provide
sales, support, service and financing to
more than 20,000 customers across
Australia and New Zealand.

In presenting information on the basis
of geographical segments, segment
revenue is based on the geographical
location of customers and segment
assets are based on the geographical
location of the assets.

2015

Revenue

Assets

2014

Revenue

Assets

Finance
$’000

Other
$’000

Eliminations
$’000

Total
$’000

24,251

246

214

816

287

1,103

4,021

2,169

7,650

(10,989)

(287)

(815)

(2,961)

(475)

268,128

192,498

208,645

5,047

(171,692)

224,290

111

1,599

4,518

22,608

505,233

251,488

Finance
$’000

Other
$’000

Eliminations
$’000

Total
$’000

20,375

1,507

21,882

650

10,518

215,221

139,870

417

607

1,802

(11,246)

213,178

2,951

199,325

(1,507)

(170,664)

199,325

148

1,054

5,161

17,815

454,201

189,189

Australia
$’000

New Zealand
$’000

Eliminations
$’000

Total
$’000

110,359

114,218

(287)

400,932

275,993

(171,692)

224,290

505,233

88,005

376,893

112,827

(1,507)

356,647

(279,339)

199,325

454,201

Note 33: Subsequent Events

Unfranked dividends of 5 cents per share were declared and approved by the Directors
on 1 7 August 2015 for a payment date of 8 September 2015.

On 16 August 2015, the Company executed an agreement to acquire Code Blue, an IT
services company based in New Zealand, for total purchase consideration of $13.5m
(NZ$15m). The consideration will be paid as $4.5m (NZ$5m) in cash on completion, and
the balance of $9m (NZ$10m) subject to meeting agreed earn-out objectives over the
following two years. Up to $3.3m (NZ$3.7m) could be paid by way of the issue of new
shares, with the balance in cash, as part of the deferred purchase consideration. Both the
purchase price and value of shares issued are subject to completion adjustments.

The financial effect of these transactions have not been brought to account in the
financial statements for the year ended 30 June 2015.

Note 34: Parent Entity Disclosures

As at, and throughout the financial year ended 30 June 2015, the parent company of the consolidated entity was CSG Limited. A summary
of the financial performance and financial position of the parent entity is detailed below:

Result of the parent entity

Profit/(loss) for the year

Total profit/(loss) and other comprehensive income for the year

Financial position of parent entity at year end

Current assets

Total assets

Current Liabilities

Total liabilities

Total equity of the parent entity comprising of:

Issued capital

Reserves

Retained earnings

Total equity

Note 35: Contingent Liabilities

As previously disclosed, the Company has been involved in a dispute regarding earn
out payments under a historical purchase agreement in relation to the purchase of the
Cinglevue business in 2008. A further amended statement of claim was provided in
October 2014. The Company has filed its amended defence. The Company’s position is
that it will vigorously defend the claim. On the basis of present information, it has made
no provision for any loss or damage in relation to this claim.

Parent Entity

2015
$’000

(8,246)

26,008

206,000

10,425

14,688

166,533

1,228

23,551

191,313

2014
$’000

(7,354)

49,245

227,041

2,951

6,167

160,838

2,908

57,128

220,874

CSG 14|15 ANNUAL REPORT 79

DIRECTORS’ DECLARATION

Directors’ Declaration

CSG LIMITED AND
CONTROLLED ENTITIES

The Directors declare that the
financial statements and notes set
out on pages 41 to 79, in accordance
with the Corporations Act 2001:

comply with Accounting
Standards and the Corporations
Regulations 2001, and other
mandatory professional
reporting requirements; and

give a true and fair view of
the financial position of the
consolidated entity as at 30 June
2015 and of their performance
as represented by the results
of their operations, changes in
equity and their cash flows, for
the year ended on that date.

In the Directors’ opinion there are
reasonable grounds to believe that
CSG Limited will be able to pay its
debts as and when they become
due and payable.

This declaration has been made
after receiving the declarations
required to be made by the Chief
Executive Officer and Chief
Financial Officer to the Directors in
accordance with sections 295A of
the Corporations Act 2001 for the
financial year ending 30 June 2015.

This declaration is made in
accordance with a resolution
of the Directors.

Julie-Ann Kerin

Managing Director

Sydney
17 August 2015

Independent
Auditor’s Report

CSG 14|15 ANNUAL REPORT 81

INDEPENDENT
AUDITOR’S REPORT

CSG 14|15 ANNUAL REPORT 83

SHAREHOLDING INFORMATION

Shareholding Information as at 8 September 2015

In accordance with Listing Rule 4.10 of the Australian Securities Exchange Limited, the Directors provide the following shareholding
information as at 8 September 2015.

Substantial Shareholders

Name

Caledonia (Private) Investments Pty Limited & its associates

Paradice Investment Management Pty Ltd

TDM Asset Management Pty Limited & its associates

Voting Rights

Fully paid ordinary shares in the Company carry voting rights of one vote per share.

Distribution of Shareholding

Number of
Ordinary Shares

% of
Ordinary Shares

74,654,386

21,548,563

19,924,622

24.41

7.71

7.14

Range

1 - 1,000

1,001 - 5,000

5,001 - 10,000

10,001 - 100,000

100,001 - and over

Total

Total holders

Number of
Ordinary Shares

% of
Issued Capital

512

607

340

450

1,993

161,960

1,847,050

2,621,265

13,757,990

287,493,396

305,881,661

0.05

0.60

0.86

4.50

93.99

100.00

Less than Marketable Parcels

313 shareholders hold less than a marketable parcel of shares, being a market value of less than $500.

Twenty Largest Shareholders

Name

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
UBS NOMINEES PTY LTD
NATIONAL NOMINEES LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
CITICORP NOMINEES PTY LIMITED
UBS WEALTH MANAGEMENT AUSTRALIA NOMINEES PTY LTD
NATIONAL NOMINEES LIMITED
RBC INVESTOR SERVICES AUSTRALIA PTY LIMITED
LYNDEN INVESTMENTS NT PTY LTD
MANDERRAH PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA
BOLTEC PTY LTD
BOND STREET CUSTODIANS LIMITED
BNP PARIBAS NOMS PTY LTD
AMCIL LIMITED
AMP LIFE LIMITED
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
CITICORP NOMINEES PTY LIMITED
MIRRABOOKA INVESTMENTS LIMITED

Total

On-Market Buy-Back

Number of Shares
at 8 September 2015

% of
Issued Capital

55,480,994
41, 176,723
30, 430,585
27, 41 1,688
21,239,859
19,205, 123
16,622, 153
11,220,586
8, 116,228
6, 352,055
5, 341, 362
4,436, 803
4, 410, 915
3,267,466
2,554, 914
2, 221, 045
1, 980, 918
1,888,509
1,860, 277
1,793, 955

18.14
13.46
9.95
8.96
6.94
6.28
5.43
3.67
2.65
2.08
1.75
1.45
1.44
1.07
0.84
0.73
0.65
0.62
0.61
0.59

267,012,158

87.29

There is no current on-market buy-back, a previous buy-back having expired on 29 April 2015.

CORPORATE DIRECTORY

Corporate Directory

CSG Limited ABN 64 123 989 631

Registered Office
Level 1
357 Collins Street
Melbourne VIC 3000

Phone +61 7 3840 1234
+61 7 3840 1222
Fax
www.csg.com.au

Directors
Tom Cowan
Non-Executive Chairman

Julie-Ann Kerin
Managing Director

Stephen Anstice
Non-Executive Director

Philip Bullock
Non-Executive Director

Robin Low
Non-Executive Director

Mark Phillips
Non-Executive Director

Company Secretary
Christopher Lobb

Share Registry
Computershare Investor Services Pty Limited

452 Johnston Street
Abbotsford VIC 3067

Phone 1300 850 505
www.computershare.com

Auditor
KPMG
71 Eagle Street
Brisbane QLD 4000

CSG 14|15 ANNUAL REPORT 85

CSG OVERVIEW

CSG
Customer
Imperatives

UNRIVALLED CUSTOMER CARE
Customer care and lifetime relationships are at the heart
of everything we do. So we go further, to be better.

TECHNOLOGY & INNOVATION
At CSG, innovation and great thinking is expected. We
seek and supply the best software and digital solutions
to make your business more efficient and productive.

EXPERT INDEPENDENT ADVICE
CSG provides indepth expert analysis objectively
without bias. We are independent and create value
because we are solutions focused. So you can expect
more with CSG.

LOCAL NOT GLOBAL
Of the top five providers, only CSG is Australian owned
with headquarters in Australia and New Zealand. This
means faster response and decision making, greater
efficiencies and unequalled customer care.

MULTIPLE BRANDS, NOT A CHOICE OF ONE
When you engage with CSG we recommend the best
solution(s) for you, irrespective of the brand name.
We are not manufacturers so we are not limited by
product - you shouldn’t be either.

CSG MAKES YOUR BUSINESS OUR BUSINESS
CSG takes the time to understand your business,
industry and unique challenges. We tailor our
solutions to meet your specific needs. Because we
know one size does not fit all.

PROACTIVE, NEVER COMPLACENT
CSG’s proven success over the last 20 years is based
on making things happen and a can do attitude. We
actively engage and always stay one step ahead.

FLEXIBLE FINANCE FACILITATION
Funding your new equipment shouldn’t be a hassle. CSG
Finance removes the barriers and opens the door to
flexible financial solutions - the right ones that suit you.

SUSTAINABILITY & CSR
The CSG commitment to corporate social
responsibility and sustainability is firmly entrenched
in our policies and culture. We demonstrate this in
deeds and actions - not just words.

QUALITY & SERVICE GUARANTEE
At CSG we stand behind our products and services with
our 5 year guarantee. We aim to deliver more than you
expect so you can always be confident with CSG.

CSG 14|15 ANNUAL REPORT 87

csg.com.au