CPT Global Limited
ABN 16 083 090 895
Annual Report
For the year ended 30 June 2018
+61 3 9684 7900
Info@cptglobal.com
www.cptglobal.com
1
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Chairman’s Statement
Dear Fellow CPT Global Shareholder,
After significant effort over the past three years to improve our financial performance I am pleased to report that CPT
Global recorded a profit in the 2018 financial year. Our Australian operations continued to perform well and we experienced
an improved contribution from our international business in particular North America.
The Australian business was able to grow both revenue and profitability in a challenging market through establishing and
building client relationships. In particular, our operations servicing the Federal Government showed strong growth which
is continuing. The Australian operations provide CPT with a stable platform for expansion and many of the skilled IT experts
required to resource our international business. In 2018 six of our ten largest clients were based in Australia.
CPT’s international business achieved a significant turnaround in 2018 with strong growth in North America while Europe
returned to a modest profit after past losses. As a result the International operations delivered a substantially improved
profit contribution to CPT and were key to our return to overall profitability. The pipeline of international business has
strengthened over the past year and positions CPT well for 2019.
The North American operations delivered a substantial increase in both revenue and operating profit over the prior year.
Good margins continued and despite high selling costs a number of new projects commenced with a healthy pipeline of
potential new business. Four of CPT’s ten largest clients are based in North America of which two were within our top five
clients in 2018.
Our European and North American operations are now being managed together with a focus on selective marketing
campaigns in Europe to win the most prospective opportunities. CPT is no longer making loses in Europe as a result of
reduced costs, some active client engagements and sharing resources with our North American operations.
CPT operates in an exciting sector which presents many opportunities through the continuing development of the global
IT industry and the adoption of cloud, proliferation of data and the growing need for advanced analytics and AI. Despite
competition and ongoing change of client needs CPT is committed to adapting its business model in line with the market.
Our strong reputation for delivering outcomes for clients and depth of experience positions us well to deliver future growth
and improved returns. In the near term CPT’s focus will remain on strengthening our core business, growing revenues,
managing our cost base and also developing attractive new digitally oriented service offerings.
In 2018 our revenue grew by over 14% to $31m with increases in both Australia and North America. After three years of
losses CPT recorded a net profit after tax of $0.8m compared to a net loss after tax of $1.5m in 2017. In light of our improved
performance and current expectations for the year ahead CPT will pay a final fully franked dividend of 0.25cents per share.
CPT ended the financial year with cash of $1.4m.
The past year marked a significant turnaround in CPT’s performance with a return to profit following three years of losses.
After continuing extensive business development efforts and a strong focus on costs CPT is generating profits and has built
a promising business pipeline. We will work hard to maintain this positive momentum through 2019 despite the normal
challenges and, subject to our financial position, will look to continue to pay dividends to our shareholders. Our improved
financial performance is a result of the significant efforts and commitment of all of CPT Global’s staff which is acknowledged
and gratefully appreciated. I would like to thank all of our staff and my fellow directors including our Managing Director,
Gerry Tuddenham, for their ongoing efforts in improving CPT’s performance.
Fred S. Grimwade
Chairman
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Managing Director’s Review
Dear Fellow Shareholders,
I would like to thank all CPT Global shareholders for your continued support of the Group during the 2018 financial year
and during the difficult financial years from 2015 to 2017. I would also like to welcome our new shareholders who have
joined us during the year.
It is with great pleasure that I can inform shareholders that CPT Global returned to profit in 2018. The profit before tax of
$1.3 million is the culmination of 3 years of hard work stabilising and reinvigorating the business and driving performance.
The profit was achieved with strong growth in revenue in North America and Australia and the benefit of the reduction in
the cost base of our business over the last few years. $31.0 million revenue and the net profit before tax is a $2.6 million
improvement on 2017. Net tangible assets grew 313% to $1.1 million on the back of the improved performance.
All regions contributed to the 2018 result with growth in segment profit driven by revenue growth, solid margins and lower
costs. The exception was the European region where revenue was 1.7% lower than 2017 but the segment profit increased
30.0% due to the reduction in the cost base implemented in 2017.
We are committed to ensuring that the business continues to grow profitably by focussing on strategic clients and
opportunities, driving revenue from partnerships and maintaining a disciplined approach to costs. As profits grow and cash
flow improves, we will balance the needs of the business to invest for growth with repairing the balance sheet to reduce
debt and build cash reserves.
Operating and Financial Review
CPT made a profit after tax of $0.8 million for the full financial year, a $2.2 million improvement on 2017. The profit was
driven by a 14% growth in revenue and a reduction in the cost base of the Group.
Our top 10 clients contributed 80% (2017: 80%) of our revenue, grew by 14% compared to the top 10 clients in 2017 and
maintained margins in an environment in which pressure to reduce margins is part of the landscape.
Our success at growing within accounts by increasing consultant numbers on projects, expanding the scope of our services
and cross selling services was demonstrated by 8 of the top 10 clients in 2017 being top 10 clients in 2018. The 2 new
clients in the top 10 were new clients for CPT in 2018 and were the result of a digital consulting engagement with an
Australian superannuation fund and a mainframe risk/reward engagement at a global bank based in New York. This shows
that our traditional core services and new services are in demand and can grow and co-exist within CPT.
We derived $2.5 million in risk/reward revenue from 2 clients in the USA in 2018. We undertook a 4th phase risk/reward
engagement at a health care insurance company and continued to expand our services to include time and materials
engagements in mainframe capacity planning and midrange application performance. We started a risk/reward
engagement in November 2017 at a global bank worth up to US$2.0 million. Both engagements are expected to be
completed in the first half of the 2019 financial year.
Revenue in Australia grew by 5.1% in 2018 (2017: 4.3%) and revenue in North America grew by 47.6% (2017: -18.5%).
Europe’s revenue declined by 1.7% in 2018 (2017: -33.3%), however, the cost base has been reduced over the last 2 years
which enabled the region to generate a small operating profit before tax, FX and intra group charges.
Revenue by Region - Year on Year
FY16
FY17
FY18
Table 1
$mil AUD
25
20
15
10
5
0
Australia
Europe
North America
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Europe
During 2018, Europe was run out of North America as part of the greater Northern Hemisphere region. Our presence within
Europe was scaled back and fixed costs were cut to the minimum required to maintain the corporate structure and comply
with relevant laws and regulation. Our strategy was to focus on a small number of key accounts and be opportunistic and
agile in responding to opportunities.
Execution of the strategy was successful as operating losses in Europe were halted and the reduction in revenue kept to
1.7%.
Whilst revenue is historically low in Europe, we have been able to deploy consultants on projects in North America. This
has enabled us to retain key European consultants and quickly scale up delivery in North America to meet demand.
Table 2 shows the reliance Europe has on banking and insurance and the challenges experienced in FY16, FY17 and FY18.
Revenue by Sector - Europe
FY16
FY17
FY18
Table 2
$mil AUD
2
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
Banking & Finance
Insurance
IT&C
Other
North America
North America had its best year since 2014 with revenue growing 47.6% on 2017 and segment gross profit before tax
growing 40.6% on 2017.
The soft finish to 2017 provided a challenge in the region but the pipeline was quite strong, particularly within existing
accounts. Two risk/reward engagements commenced in November and revenue at our largest client in North America grew
throughout the first half of the year and finished 2018 41% ahead of 2017 revenue. In February 2018 our presence at a
global bank began expanding as we commenced new engagements with monthly revenue increasing 4-fold over the run
rate in the previous 8 months. By year end revenue at the client was 118% ahead of 2017 revenue and contracts executed
through to December 2018. The last quarter of 2018 was our best quarter for the year with the monthly revenue run rate
1.6 times the run rate of the first 3 quarters.
Four of our top 10 clients are based in North America (2017: 3) and delivered 86% (2017: 85%) of the revenue in the region.
Revenue generated from risk/reward contracts increased $0.5 million over 2017 but as a proportion of revenue decreased
from 36% to 29%. Margins in North America moved against the trend in the industry and were generally higher than recent
years. This reflects the benefit of high margin risk/reward contracts but also demonstrates that there is demand for
consultants with expertise in their domains who can produce high quality delivery and outcomes.
Overall, the turnaround in North America is very encouraging and the strong finish to the year and pipeline of work give
us optimism for 2019.
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Managing Director’s Review
Table 3 shows that revenue is concentrated in three sectors but the mix of revenue varies significantly year on year. CPT’s
core strength in North America is mainframe in the banking & finance sector.
Revenue by Sector - North America
FY16
FY17
FY18
Table 3
$mil AUD
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
Banking & Finance
IT&C
Healthcare
Insurance
Other
Government
Australia
The banking & finance and government sectors continue to be the growth and revenue engines of the Australian business,
see table 4 below. Superannuation is emerging as a growth sector with revenue increasing 469% on 2017 and one
superannuation client joining the top 10 global clients in 2018.
Revenue from Federal Government clients grew 27% in 2018 as additional projects and resources were added to existing
contracts. A 6 month extension to our contract with our second biggest client takes our contracted work through to
December 2018 with an increase in the scope of services and number of consultants engaged.
Growth in the banking & finance sector has been constrained with clients transforming the way they work based on agile
at scale methodologies. During the transformation, freezes on head count are often employed while teams are restructured
and redundancy programs implemented. We expect these restructures to be completed during the first half of 2019, after
which we will be able to assess the ongoing impact on revenue and growth. Growth has been further constrained as tier 1
clients continue to put pressure on margins and rationalise supplier panels. While we have seen 20% growth in revenue at
our largest client, an Australian bank, this was partially offset by lower revenues at a second Australian bank.
The drop in revenue in the IT&C sector is due to projects on one national telecommunications client completing and the
company going through a restructure. We have maintained existing revenue and growing the account again are a focus
for 2019.
Our digital consulting practice generated revenue of $1.0 million in the first full year of operation from a combination of
digital strategy consulting and selling partner software and services.
The growth in the Australian business is profitable with margins decreasing slightly in the banking sector but maintained
or increased in other sectors despite the general pressure on margins in the industry. Six of our top 10 clients by revenue
are based in Australia.
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Revenue by Sector - Australia
FY16
FY17
FY18
Government
IT&C
Other
Insurance
Healthcare
Table 4
$mil AUD
14
12
10
8
6
4
2
0
Banking &
Finance
Financial Results
Financial Performance
CPT Global’s revenue for the year ended 30 June 2018 was $31.0 million, a 14.3% increase on 2017’s revenue of $27.2
million. CPT Global’s net profit after tax for the year ended 30 June 2018 was $0.8 million, an improvement of $2.2 million
on the 30 June 2017 result.
The improvement in performance is a result of:
profitable growth in the North American and Australian regions;
an operating profit in Europe after several years of losses as the cost base of the region was reduced; and
cost control across the Group.
Basic earnings per share amounted to 2.09 cents per share (diluted earnings 2.06 cents per share).
Financial Position
CPT Global’s balance sheet reflected net tangible assets of $1.1 million as at 30 June 2018 (2017: $0.3 million). Net assets
are $5.4 million (2017: $4.6 million)
Unbilled revenue (WIP) has increased by $1.5 million. The increase in 2018 is due to 2 risk/reward contracts in
progress in North America at year end with WIP of $1.9 million. At 30 June 2017, the WIP relating to risk/reward
contracts was only $0.1 million;
Trade and other receivables decreased $0.7 million despite the increase in revenue as the 2017 balance includes
2 overdue debtors with a balance of $1.7 million owing. This was paid in July 2018. Without the overdue payment
in 2018, trade and other receivables increased in line with the increase in revenue;
Trade and other payables increased by $0.7 million as consultant numbers increased with the growth in revenue,
particularly in North America during the 4th quarter of 2018 and revenue received in advance increased $0.3
million. The percentage increase, 11.6%, is less than the growth in revenue which reflects the lower cost base of
the business; and
Borrowings at year end relate to the loan facility provided by Efic to fund the risk/reward contracts in North
America.
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Managing Director’s Review
Cash Flow
CPT had $1.4 million in cash at 30 June 2018 ($1.7 million 30 June 2017) and a net cash outflow of $0.2 million for the
financial year. We also had access to $1.7 million in additional funding in our facilities.
Our strong cash management processes, Australian debtor funding facility, early payment programs with clients in North
America, Efic loan and the increase in revenue in Australia and North America all contributed to CPT being able to manage
the cash flow challenges in 2018.
The decrease in cash at 30 June 2018 is due to the revenue locked up in WIP which will convert to cash in 2019 and the
payment of our tax obligations in Canada under a payment plan agreed with the Canadian Revenue Authority.
Capital Management
A fully franked dividend of 0.25 cents per share will be paid for 2018.
Our debtor funding facility has a limit of $5.0 million of which there was no outstanding balance at 30 June 2018 and $1.1
million was available to draw on. Our facility with Efic has a limit of $1.2 million of which $0.5 million was drawn down at
30 June 2018 and $0.7 million was available to draw on.
During 2019 our focus will be on growing operating profit and cash flows to reduce our reliance on debtor facilities and
the associated costs and repay other debts so that we can rebuild our cash position. We intend to pay dividends consistently
and increase the payout ratio as our financial performance allows.
Our People
To CPT’s people I thank you on behalf of the Board of directors and the executive team for the professional way in which
you have continued to deliver the high quality of service to our clients and to the business during a difficult couple of years
for CPT and a period of transition and transformation to becoming a digital services leader. Returning CPT to profit could
not have been achieved without the loyalty and dedication of our employees and consultants.
Strategy
Our clients are operating in an environment in which innovation, disruption, digital transformation, speed to market, quality
assurance and cost control are driving strategic and operational decision making. Our digital practice will become a core
component of our services and drive new products, services and strategic alliances.
Our offering to our clients is enhanced by our existing partnerships and we continue to investigate opportunities to partner
with world class software vendors and service providers.
Our core services of capacity planning, performance and testing will continue to be the backbone of the business with the
focus on growing within our existing accounts and targeting a core group of strategic new accounts.
Customer facing web and mobile applications are driving an increase in transactions on mainframes and the release of the
IBM mainframe z14 has seen delivered MIPS grow as clients move through the upgrade cycle faster than expected. A recent
survey of CIOs suggests that MIPS have increased as much as 41% as mobile and other new technologies increase
transactions on the mainframe. The speed of digital transformation is forcing companies to modernise their mainframe
tools and integrate mainframe and non-mainframe DevOps processes. Our mainframe optimisation, tuning and cost
reduction services combined with our strategic partners’ modern DevOps toolsets will drive new services, products and
opportunities.
The Outlook
The momentum we have built in North America and with the Federal Government in Australia is expected to continue
through the first half of 2019 with major projects contracted and the 2 active risk/reward engagements coming to
completion towards the end of the half year. However, we are fully aware that there is still a lot of work to do to shore up
the balance sheet, build our cash reserves and continue to grow profit.
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The Australian business is expected to continue to grow steadily although this will be concentrated in the Government
sector where revenue growth is expected to be strong and exceed the growth of 2018. Margins are expected to decline
marginally on higher volumes in the sector. A major contract renewal is due at a government agency in late December, but
we are optimistic of a 6 month extension. Revenue growth in the first half in the banking & finance sector is likely to be flat
to negative as clients complete their transformations to new ways of working. Until these reorganisations are complete
there is uncertainty about the impact on our business.
The momentum and pipeline in North America indicate a strong first half in 2019. With a contract renewal in December at
our second biggest client in North America and risk/reward engagements due to complete in the first half, our focus is on
locking the contract renewal in and moving the risk/reward engagements into new phases. As Canada starts down the path
of introducing a real time payments platform, CPT is well placed to provide expert consulting services given our experience
on the New Payments Platform released in Australia in 2018 and our existing relationships with Canada’s major banks. We
have started to provide strategic consulting services to two banks in Canada. Our focus in North America is to continue to
grow within our existing clients, convert risk/reward clients to long term recurrent revenue and grow our other services at
existing and new clients.
In Asia we will continue to use our partner model in the medium term to identify and convert opportunities. The pipeline
in Asia is encouraging and projects will continue to be undertaken on an opportunistic basis in the short term.
Europe will continue to be managed as part of the greater Northern Hemisphere region with a scaled back presence and
fixed cost base. This will allow us to adjust our strategy quickly as the need arises. Projects will be undertaken on an
opportunistic basis in the short term.
Gerry Tuddenham
Managing Director
September 25, 2018
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Content
Corporate Governance Statement
Directors’ Report
Auditors Independence Declaration
Consolidated Statement of Profit or 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 Audit Report
Corporate Information
ASX Additional Information
10
18
29
30
31
32
33
34
71
72
76
77
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Corporate Governance Statement
The Board of Directors of CPT Global is responsible for the corporate governance of the group. The Board guides and
monitors the business and affairs of CPT Global on behalf of the shareholders by whom they are elected and to whom
they are accountable.
The format of the Corporate Governance Statement is based on the Australian Stock Exchange Corporate Governance
Council's (the Council's) "Corporate Governance Principals and Recommendations" (the Recommendations). In
accordance with the Council's recommendations, the Corporate Governance Statement must contain certain specific
information and must disclose the extent to which the company has followed the guidelines during the period. Where a
recommendation has not been followed, that fact is disclosed, together with the reasons for the departure.
CPT Global’s Corporate Governance Statement is structured with reference to the Corporate Governance Council's
principles and recommendations.
A summary of CPT Global’s corporate governance policies and practices can be found at www.cptglobal.com/investor-
centre/.
Principle 1: Lay solid foundations for management and oversight
Functions reserved for the Board
The Board is responsible for governing the Company, providing leadership and monitoring CPT Global on behalf of its
shareholders. In addition, the Board is responsible, along with management, for identifying areas of significant business
risk and ensuring arrangements are in place to adequately manage those risks.
The Board has adopted a Charter that sets out, among other things, its specific powers and responsibilities and the
matters delegated to the CEO and management and those reserved to the Board. Information regarding the Charter can
be found at www.cptglobal.com/wp-content/uploads/2017/07/Board-Charter.pdf.
The senior executives of CPT Global are responsible for matters which are not specifically reserved for the Board. Senior
executives manage the Company in accordance with the direction and strategy adopted by the Board.
Appointment and election of directors
Prior to the appointment of a new Director, CPT Global undertakes appropriate checks and internal investigations on the
suitability of nominated directors.
CPT Global’s Constitution requires that an election of directors takes place each year. In addition, directors appointed
during the year to fill a casual vacancy or as an addition to the existing directors during the year, must retire from office
at the next annual general meeting following their appointment but are eligible for re-election by shareholders at that
time.
The Notice of Meeting for an Annual General Meeting sets out the background, experience and skills of each director
seeking election or re-election to the Board along with a recommendation of the Board in relation to the election or re-
election. Security holders are provided with all material information in CPT Global’s possession relevant to a decision on
whether or not to elect or re-elect a director.
Director agreements
CPT Global has written agreements with each director and senior executive setting out the terms of their appointment,
including commencement and end date, terms of appointment, remuneration and obligations.
Company Secretary
The Company Secretary is charged with facilitating CPT Global’s corporate governance processes and so holds primary
responsibility for ensuring that the Board processes and procedures run efficiently and effectively. The Company Secretary
is accountable to the Board, through the Chairman, on all governance matters and reports directly to the Chairman as
the representative of the Board. The Company Secretary is appointed and dismissed by the Board and all Directors have
a right of access to the Company Secretary.
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Corporate Governance Statement
Diversity policy
CPT Global has a diversity policy which provides equal opportunity to all appropriately skilled individuals with respect to
their recruitment, remuneration, promotion, training and other employment practices. Diversity includes, but is not limited
to, gender, age, ethnicity and cultural background. CPT Global is committed to diversity and recognises the benefits
arising from employee and board diversity and the importance of benefiting from all available talent.
The diversity policy is currently under review by the Board. During the 2018 financial year the Board did not set measurable
objectives to progress our diversity goals, however, gender balance is reported to the Board on a monthly basis.
Our progress with gender balance can be measured below:
Women on the Board
Women in senior management roles
Women employees in the company
2018
No.
0
3
26
%
0
30
17
2017
No.
0
2
26
%
0
22
17
On 28 May 2018, CPT Global lodged its annual public report with the Workplace Gender Equality Agency pursuant to the
requirements of the Workplace Gender Equality Act 2012 (the Act). The Act is designed to put a focus on promoting and
improving gender equality and outcomes for both women and men in the workplace. All non-public sector employers
with more than 100 employees are required to report annually under the Act.
The Act requires companies to provide access to the report to employees and shareholders via the usual means of
communication with them.
A copy of the report is available on the Company’s website at www.cptglobal.com/investor-centre. Note that this report
reflects the employee numbers at a particular reporting date.
Evaluating the performance of the Board, its Committees, its directors and Senior Executives
The Board’s Charter states that the Board will conduct annual reviews of both individual Board members, performance of
the Board as a whole and the performance of Board Committees.
An annual performance evaluation of the Board and all Board members is conducted at the completion of each financial
year.
The Board developed a questionnaire for all Board members to provide feedback on the role, composition, procedures
and practices of the Board and its Committees. The results from the questionnaire are collated by the Company Secretary
and discussed by the Board.
The initial results of the evaluation of the performance of the Board are due to be presented to the Board at the October
2018 meeting.
CPT Global undertakes an annual performance evaluation of its senior executives. This encompasses a review of each
senior executives’ achievement of their performance objectives and the establishment of future objectives. The
determination of appropriate remuneration for each executive follows the performance evaluation.
The Remuneration Report includes more details on CPT Global’s remuneration practices. An annual performance
evaluation of the senior executive team was conducted following the completion of the financial year.
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Corporate Governance Statement
Principle 2: Structure the Board to add value
Remuneration & Nomination Committee
The Board has a Remuneration and Nomination Committee which meets to ensure that the Board continues to operate
within the established guidelines, including when necessary, selecting candidates for the position of director. The
Committee is also responsible for ensuring that adequate resourcing levels are maintained, setting and monitoring
employment conditions, reviewing the performance of executive directors and senior management and setting the scale
of their remuneration. The Remuneration and Nomination Committee comprises all of the non-executive directors. The
Remuneration and Nomination Committee comprised the following members throughout the year:
Alan Baxter (Chairman)
Fred Grimwade
The Board policy is that the Committee will only comprise independent non-executive directors. Due to the number of
independent directors on the Board, CPT Global has not complied with corporate governance best practice, which
recommends the Remuneration and Nomination Committee to have a minimum of three members.
For details of directors' attendance at meetings of the Remuneration & Nomination Committee, refer to page 29 of the
Directors' Report.
A summary of the Committee’s role and responsibilities can be found as an appendix to the Board Charter at
www.cptglobal.com/wp-content/uploads/2017/07/Board-Charter.pdf.
Board Skills Matrix
The Remuneration & Nomination Committee maintain, on behalf of the Board, a capabilities matrix. The Board
composition is reviewed at least annually against the matrix and the effect of a proposed new director on Board
composition and balance is also assessed against the matrix. Succession planning in order for the Board to maintain
appropriate experience, expertise and diversity is an important responsibility of the Remuneration & Nomination
Committee. While important, the capabilities matrix is only part of the process for assessing proposed directors.
The Board has adopted the capabilities matrix, set out below, which sets out the mix of skills and diversity that the Board
is looking to achieve in its membership. The skills matrix highlights the key skills and experience of the Board and the
extent to which those skills are currently represented on the Board.
Skills/Experience
Total Number of Directors
Public Company Governance
Experience with listed and other organisations subject to robust governance frameworks with an ability to
assess the effectiveness of relevant governance processes
Executive Experience
Experience in senior positions at executive levels
Strategy & Planning
Ability to develop and implement successful strategy and deliver agreed strategic planning goals
Accounting, Finance & Capital & Debt Management
Senior executive experience in financial accounting and reporting, capital management, taxation, internal
controls and corporate financing arrangements
Risk Management
Experience in the oversight and management of material business risk including membership of risk
committees
IT Industry Experience
Senior executive experience in the IT sector
3
2
3
3
1
2
2
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Corporate Governance Statement
Consulting & Technology Services Experience
Senior executive experience in consulting services, particularly in the IT sector
Mergers and acquisitions
Senior executive experience in successfully undertaking mergers & acquisitions
Marketing & Sales
Senior executive experience in selling IT consulting services and marketing
International market experience
Senior executive experience in managing operations and subsidiaries in multiple countries
Occupational Health & Safety
Experience in relation to workplace health and safety
Environment and Sustainability
Experience in relation to environmental and social responsibility and community
Legal & Regulatory
Experience in legal and regulatory matters
Human Resources
Experience in relation to remuneration and incentive practices, succession planning and director appointment
processes
2
3
2
3
0
0
1
2
Board skills and experience
The skills, experience and expertise relevant to the position of director held by each director in office at the date of the
annual report is included in the directors' report on pages 18 and 19.
Director independence
A majority of the Board are independent. The following directors of CPT Global are considered independent:
Name
Position
Fred Grimwade
Non-executive Chairman
Alan Baxter
Non-executive Director
An independent director is a director who is not a member of management (a non-executive director) and who:
holds less than five percent of the voting shares of CPT Global and is not an officer of, or otherwise associated, directly
or indirectly, with a shareholder of more than five percent of the voting shares of CPT Global;
within the past three years has not been employed in an executive capacity by CPT Global or another group member,
or been a director after ceasing to hold any such employment;
within the past three years has not been a principal or employee of a material professional adviser or a material
consultant to CPT Global or another group member;
is not a material supplier or customer of CPT Global or another group member, or an officer of or otherwise associated,
directly or indirectly, with a material supplier or customer;
has no material contractual relationship with CPT Global or another group member other than as a director of CPT
Global;
is free from any interest and any business or other relationship which could, or could reasonably be perceived to,
materially interfere with the director’s ability to act in the best interests of CPT Global; and
has not had their independence compromised by the length of their tenure preventing them from being able to bring
an independent judgement to bear on issues before the Board and to act in the best interests of CPT Global and its
security holders.
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Corporate Governance Statement
Materiality is considered from both the company and individual director perspective. The determination of materiality
requires consideration of both quantitative and qualitative elements. An item is presumed to be quantitatively immaterial
if it is equal or less than 5% of the appropriate base amount. It is presumed to be material (unless there is qualitative
evidence to the contrary) if it is equal to or greater than 10% of the appropriate base amount. Qualitative factors considered
include whether a relationship is strategically important, the competitive landscape, the nature of the relationship and the
contractual or other arrangements governing it and other factors which point to the actual ability of the director in question
to shape the direction of the company's strategy.
There are procedures in place, agreed by the Board, to enable directors, in furtherance of their duties, to seek independent
professional advice at the company's expense.
The term in office held by each director in office at the date of this report is as follows:
Name
Term in office
Fred Grimwade
16 years
Alan Baxter
8 years
Gerry Tuddenham
20 years
The Board considers Fred Grimwade to be independent even though his tenure on the Board exceeds 10 years as the
Board expects the Chairman to have a deep understanding of CPT Global and its business and with an interest in 2% of
the shares of CPT Global, Mr Grimwade’s interests are aligned with the interests of CPTs shareholders.
Director induction and professional development
CPT Global has a program for inducting new directors and provides appropriate professional development opportunities
for directors to develop and maintain the skills and knowledge needed to perform their role as directors effectively. For
more
induction and education, see the Board Charter at www.cptglobal.com/wp-
content/uploads/2017/07/Board-Charter.pdf.
information on Director
Principle 3: Act ethically and responsibly
Code of conduct
The Board is committed to its core governance values of integrity, respect, trust and openness among and between board
members, management, employees, clients and suppliers. These values are enshrined in the Board’s Code of Conduct
which requires all directors, management and employees to at all times:
-
-
-
-
-
-
act honestly and in good faith;
exercise due care and diligence in fulfilling the functions of office;
avoid conflicts and make full disclosure of any possible conflict of interest;
comply with both the letter and spirit of the law;
encourage the reporting and investigation of unlawful and unethical behaviour; and
comply with the share trading policy outlined in the Code of conduct.
Directors are obliged to be independent in judgement and ensure all reasonable steps are taken to ensure that the
Board’s core governance values are not compromised in any decisions the Board makes.
CPT Global’s policy regarding directors and employees trading in its securities is set by the Finance and Audit Committee.
The policy restricts directors and employees from acting on material information until it has been released to the market
and adequate time has been given for this to be reflected in the securities price.
Information relating to the Code of Conduct and Trading Policy can be found at www.cptglobal.com/investor-centre.
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Corporate Governance Statement
Principle 4: Safeguard integrity in corporate reporting
Finance and Audit Committee
The Board has a Finance and Audit Committee which operates under a charter approved by the Board. It is the Board's
responsibility to ensure that an effective internal control framework exists within the entity and ensure compliance with
ASX Listing Rule disclosure requirements. This includes internal controls to deal with both the effectiveness and efficiency
of significant business processes, the safeguarding of assets, the maintenance of proper accounting records, external
reporting and the reliability of financial information as well as non-financial considerations such as the benchmarking of
operational key performance indicators. The Board has delegated the responsibility for the establishment and
maintenance of a framework of internal control and ethical standards for the management of the consolidated entity to
the Finance and Audit Committee.
The Committee also provides the Board with additional assurance regarding the reliability of financial information for
inclusion in the financial reports. The Corporate Governance Principles recommend that all Finance and Audit Committee
members are non-executive. CPT Global only has two non-executive directors therefore the managing director has also
been appointed to the Finance and Audit Committee.
The members of the Finance and Audit Committee during the year were:
Fred Grimwade (Chairman)
Alan Baxter
Gerry Tuddenham
Due to the size of the company and the Board of directors, CPT Global has not complied with corporate governance best
practice, which recommends the Finance and Audit Committee have a different Chairman than the Board.
For details of directors' experience and qualifications refer to pages 18 and 19 of the Directors’ Report. For details of
attendance at meetings of the Finance and Audit Committee, refer to page 27 of the Directors' Report.
A copy of the Committee’s Charter is included as an appendix to the Board Charter and can be found at
www.cptglobal.com/investor-centre.
CEO & CFO declarations
For the annual and half-year results, the CEO and CFO have provided a written declaration to the Board stating that, in
all material respects, the Company’s financial report gives a true and fair view of CPT Global’s financial position and
operational results and are in accordance with relevant accounting standards and the financial records have been properly
maintained in accordance with the Corporations Act 2001.
The declaration by the CEO and CFO states that it is founded on a sound system of risk management and internal
compliance and control system and that the risk management and internal compliance and control systems to, the extent
they relate to financial reporting, are operating effectively and efficiently in all material respects.
Auditors attendance at the AGM
The external auditor attends the Annual General Meeting to answer any questions concerning the conduct of the audit,
the preparation and content of the Auditor’s report, accounting policies adopted by the group and the independence of
the auditor in relation to the conduct of the audit.
Principle 5: Make timely and balanced disclosure
Continuous disclosure policy
CPT Global is subject to continuous disclosure obligations under the ASX Listing Rules and the Corporations Act 2001.
Subject to limited exceptions, CPT Global must immediately notify the market, through the ASX, of any information that
a reasonable person would expect to have a material effect on the price or value of CPT Global’s securities. CPT Global
has a Continuous Disclosure Policy, a summary of which can be found at www.cptglobal.com/investor-centre.
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Corporate Governance Statement
Principle 6: Respect the rights of security holders
Online information for security holders
CPT Global’s corporate website has a dedicated Investors section which provides information on the Company, corporate
governance and financial reports as well as providing access for security holders to contact the Company and Company
Secretary by email.
The Corporate Governance tab sets out CPT Global’s charters, policies, codes and ethical standards.
Promoting effective communication with security holders
The Board is committed to giving security holders and potential investors balanced and understandable information
about the Company and corporate proposals. The Company communicates with security holders via the financial media
for significant corporate events and meetings with security holders and potential investors are held on request. The
Company responds to questions and enquiries made by security holders in a timely and transparent manner.
CPT Global has a Shareholder Communications Policy which can be found at www.cptglobal.com/investor-centre. The
policy explains how information will be communicated to security holders and lists the following channels:
releases to the market via the ASX;
through the Company’s web site;
1.
2.
3. directly to shareholders; and
4. at general meetings of the Company.
CPT Global’s Shareholder Communications Policy works in tandem with Continuous Disclosure Policy
Security holders are entitled to vote on significant matters impacting on the business. The Board actively encourages
security holders to attend and participate in the Annual General Meeting of CPT Global, to lodge inquiries and to be
responded by the Board and or the CEO and can appoint proxies. The date of the AGM is published well in advance in
the financial report and in the Notice of Meeting sent to security holders.
At the AGM, the Chairman encourages security holders to ask questions on each item of business and, after the formal
business of the meeting, encourages security holders to ask general questions.
Communicating with security holders
Shareholders have the option to receive communications from and send communications to the Company and its security
registry electronically.
Furthermore, the Company website has a “Contact” section which allows investors and others to communicate with and
ask questions of the Company.
Principle 7: Recognise and manage risk
Policy for oversight and management of business risk
CPT Global believes that, given the size of the Board, it is crucial for all Board members to be a part of the risk management
process, and as such the Board has not established a separate risk management committee. Instead sub-committees are
convened as appropriate in response to issues and risks identified by the Board and the sub-committee further examines
the issue and reports back to the Board.
Design and implementation of risk management and internal control systems
CPT Global takes a proactive approach to risk management. The Board is responsible for ensuring that risks, and
opportunities, are identified on a timely basis and that the group's objectives and activities are aligned with the risks and
opportunities identified by the Board.
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Corporate Governance Statement
The main risks that could negatively impact on the performance of the Group’s business include:
the global economic environment;
the availability of professional IT resources;
the value of the Australian dollar;
Government policy, budget and spending levels.
The Finance and Audit Committee is responsible for establishing and maintain a framework of internal control. The Board
and the Audit Committee have a number of mechanisms in place to ensure that management's objectives and activities
are aligned with the risks identified by the Board. These include:
Board approval of a strategic plan, which encompasses the entity's vision, mission and strategy statements, designed
to meet stakeholders’ needs and manage business risk.
Implementation of Board approved operating plans and budgets and Board monitoring of progress against these
budgets, including the establishment and monitoring of Key Performance Indicators (KPI’s) of both a financial and
non-financial nature.
The establishment of committees to report on specific business risks, including for example, such matters as the
financial risks and concerns and occupational health and safety.
Due to the size of the company, CPT Global does not have an internal audit function.
In addition to their regular reporting on business risks, risk management and internal control systems, the CEO and Chief
Financial Officer also provide the Board with assurance that the directors declaration provided with the annual report is
founded on a sound system of risk management and internal control and that this system is operating effectively in all
material respects in relation to the financial reporting risks. This assurance is provided prior to the meeting at which the
directors are due to authorise and sign the company’s financial statements.
The Board undertook a review of CPT Global’s risk management framework during the reporting period and undertakes
such reviews on an annual basis.
CPT Global does not have any material exposure to environmental and social sustainability risks.
Principle 8: Remunerate fairly and responsibly
The Remuneration Report (on pages 22 to 28 of this report) sets out details of CPT Global’s policy and practices for
remunerating directors and executives.
Information on the Remuneration & Nomination Committee is included under Principle 2 of this Corporate Governance
Statement.
CPT Global does not have a policy on whether participants are permitted to enter into transactions which limit the
economic risk of participating in the performance rights scheme.
Due to the number of independent directors on the Board, CPT Global has not complied with corporate governance best
practice, which recommends the Remuneration & Nomination Committee to have a minimum of three members.
Information relating to the Remuneration & Nomination Committee and CPT Global’s policy on share trading in relation
to shares or equity-based products can be found at www.cptglobal.com/investor-centre.
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Directors’ Report
Your directors submit their report for the year ended 30 June 2018.
DIRECTORS
The names and details of the company's directors in office during the financial year and until the date of this report
are as follows. Directors were in office for this entire period unless otherwise stated.
Names, qualifications, experience and special responsibilities
Fred S Grimwade
(Non-executive Chairman)
Gerry Tuddenham
(Managing Director)
Alan Baxter
(Non-executive Director)
Fred chairs CPT’s Finance and Audit Committee and is a member of the Remuneration
Committee. He is a director of specialist corporate advisory and investment firm Fawkner
Capital, and is a non-executive director of Select Harvests Limited, XRF Scientific Limited and
Australian United Investment Company Limited. He is also a director of the Foundation for
Rural and Regional Renewal.
Fred was a commercial lawyer at Mallesons Stephen Jaques, and later worked with Goldman,
Sachs & Co. in New York and Sydney. He also served as Company Secretary and General
Manager of Shareholder Relations at Western Mining Corporation. In 1996, he joined Colonial
Mutual as Group Company Secretary and General Manager for Legal Affairs and subsequently
became Head of Private Capital for Colonial First State Investments, one of Australia's largest
fund managers. He was Managing Director of the Colonial Agricultural Company from 1998
to 2006 and a non-executive director of AWB Limited from 2008 to 2010. Fred is a senior fellow
and life member of the Financial Services Institute of Australasia (Finsia) and was its joint
president from 2005 to 2006. He is also a Fellow of the Australian Institute of Company
Directors and a Fellow of Chartered Secretaries Australia.
Gerry is the founder of and a major shareholder in CPT. He has more than 40 years experience
in IT consulting and is a hands-on technologist with a reputation for delivering practical
solutions. Gerry is widely known as a technical specialist in performance tuning, capacity
planning and testing in IBM mainframes, with additional expertise in expert systems,
transaction processors, middleware and database management systems. Gerry was the lead
developer of the Expetune and Expetest utilities, which automate a number of intricate tuning
and testing activities. He has worked internationally in a broad range of industries, with a focus
on financial services and telecommunications. Gerry is a member of the Australian Institute of
Company Directors. Gerry is a member of the Finance and Audit Committee.
Alan is a member of CPT’s Finance and Audit Committee and also chairs the Remuneration
Committee. He has a strong record of leading profitable growth initiatives, possessing a
unique blend of business development skills, commercial acumen and technology
expertise. Alan has some 40 years experience across all facets of the IT services industry and
has held a number of senior executive roles at IBM and Unisys before his appointment as Chief
Executive Officer of DMR Consulting (Asia Pacific). He subsequently moved to London where
he became Chief Operating Officer of Fujitsu Consulting (formerly DMR Consulting). On his
return to Australia he was appointed to several non-executive director roles. Alan is not a
director of any other ASX listed entities.
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David Lynch
Resigned
17 August 2018
(CEO Australia & Asia)
David was the CEO Australia & Asia and acting CEO. David was widely regarded as one of the
leading CIOs in the Asia Pacific region before he joined CPT Global in April 2016. Most recently,
he led the digital transformation strategy and execution for DBS Bank in Hong Kong and
Mainland China and established Hong Kong’s first dedicated fintech startup accelerator in
partnership with technology giants Amazon, Microsoft and Samsung. He is a passionate
technologist, innovator and digital thought leader.
David lived and worked in Singapore, Shanghai and Hong Kong for 13 years prior to relocating
to Australia and held CIO roles in General Motors, Standard Chartered and DBS Bank. He is
also an angel investor and has supported multiple university alliances and talent programs
over the course of his career.
In 2010, David was the inaugural winner of the Australia China Alumni award for corporate
achievement. In 2015, he was the winner of the Customer Experience in Financial Services
(CXFS) award.
Grant was appointed as Chief Financial Officer and Company Secretary in June 2015. Grant
brings over 20 years of experience as a finance professional to CPT Global Limited, having been
a partner at ShineWing Australia (formerly Moore Stephens Melbourne) where he held many
senior executive positions, including: member of the Executive Board, Head of Corporate
Finance and Head of Audit and Assurance. He is a member of Chartered Accountants Australia
and New Zealand.
COMPANY SECRETARY
Grant Sincock
INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY AND RELATED BODIES CORPORATE
As at the date of this report, the interests of the directors in the shares and performance rights of CPT Global Limited
were:
Alan Baxter
Fred S Grimwade
Gerry Tuddenham
EARNINGS PER SHARE
Basic earnings per share
Diluted earnings per share
DIVIDENDS
Ordinary
Shares
-
718,200
Performance Rights
50,000
50,000
12,231,926
200,000
Cents
2.09
2.06
On 29 August 2018, a fully franked dividend of 0.25 cents per share was declared by the directors for the 2018 financial
year. The total value of the dividend is $93,296 and will be paid on 19 November 2018.
The financial effect of the dividend will be recognised in the 2019 financial year as it was declared after the end of the
2018 financial year.
CORPORATE INFORMATION
Nature of operations and principal activities
The principal activities of the economic entity during the financial year were the provision of specialist IT consultancy
services.
There have been no significant changes in the nature of those activities during the year.
Employees
The consolidated entity employed 150 employees and contractors as at 30 June 2018 (2017: 151 employees and
contractors).
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OPERATING AND FINANCIAL REVIEW
The profit after income tax was $0.8m in 2018 compared to a net loss after tax of $1.5m in 2017. Revenue growth
of 14% and an active reduction in our cost base were the key drivers of the result.
We derived $2.5 million in risk/reward revenue from 2 clients in the USA in 2018. We undertook engagements at a
health care insurance company and a global bank. Both engagements are expected to be completed in the first half
of the 2019 financial year.
Revenue in Australia grew by 5.1% in 2018 (2017: 4.3%) and revenue in North America grew by 47.6% (2017: -18.5%).
Europe’s revenue declined by 1.7% in 2018 (2017: -33.3%), however, the cost base has been reduced over the last 2
years which enabled the region to generate a small operating profit before tax, FX and intra group charges. Our
top 10 clients contributed 80% (2017: 80%) of our revenue, grew by 14% compared to the top 10 clients in 2017
and maintained margins in an environment in which pressure to reduce margins is part of the landscape.
Financial Performance
CPT Global’s revenue for the year ended 30 June 2018 was $31.0 million, a 14.3% increase on 2017’s revenue of
$27.2 million. CPT Global’s net profit after tax for the year ended 30 June 2018 was $0.8 million, an improvement of
$2.2 million on the 30 June 2017 result. The improvement in performance is a result of:
profitable growth in the North American and Australian regions, particularly in the Banking and Government
sectors;
an operating profit in Europe after several years of losses as the cost base of the region was reduced and the
reduction in revenue kept to 1.7% despite the reduced resources. Operating Europe as part of a larger
Northern Hemisphere region facilitated more efficient management and allocation of resources; and
cost controls implemented over the last 3 years which have been maintained across the Group and
contributed to the reduction in the cost base.
Basic earnings per share amounted to 2.09 cents per share (diluted earnings 2.06 cents per share).
The net profit after tax includes tax expense of $0.5 million, an effective tax rate of 37%. This is higher than the
marginal tax rate of 30% due to tax losses in Europe that we have not recognised on the balance sheet as deferred
tax assets and interest expense that is not deductible in Canada for tax purposes.
Financial Position
CPT Global’s balance sheet reflected net tangible assets of $1.1 million as at 30 June 2018 (2017: $0.3 million). Net
assets are $5.4 million (2017: $4.6 million). The following is a summary of the most significant movements on
balance sheet:
Unbilled revenue (WIP) has increased by $1.5 million in 2018 due to 2 risk/reward contracts in progress in
North America at year end with WIP of $1.9 million. At 30 June 2017, the WIP relating to risk/reward contracts
was only $0.1 million. The balance of the movement is due to a decrease in the milestone contracts in Australia
outstanding at year end.
Trade and other receivables decreased $0.7 million despite the increase in revenue as the 2017 balance
includes 2 overdue debtors with a balance of $1.7 million owing. This was paid in July 2018. Without the
overdue payment in 2018, trade and other receivables increased in line with the increase in revenue. At 30
June 2018, 5.6% of debtors are in 60 days or greater, all of which have been collected in 2019;
Trade and other payables increased by $0.7 million as consultant numbers increased with the growth in
revenue, particularly in North America during the 4th quarter of 2018 and revenue received in advance
increased $0.3 million. The percentage increase, 11.6%, is less than the growth in revenue which reflects the
lower cost base of the business; and
Borrowings at year end relate to the loan facility provided by Efic to fund the risk/reward contracts in North
America. $1.7 million in undrawn funding from Efic and the debtor funding was available at year end.
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Cash Flow
CPT had $1.4 million in cash at 30 June 2018 ($1.7 million 30 June 2017) and a net cash outflow of $0.2 million for
the financial year.
The decrease in cash at 30 June 2018 is due to the revenue locked up in WIP which will convert to cash in 2019 and
the payment of our tax obligations in Canada.
Capital Management
A fully franked dividend of 0.25 cents per share will be paid for 2018.
There was no outstanding balance on our debtor funding business at 30 June 2018 and $1.1 million was available
to draw on. During the year we secured a export finance facility with Efic which has a limit of $1.2 million of which
$0.5 million was drawn down at 30 June 2018.
During 2019 our focus will be on growing operating profit and cash flows to reduce our reliance on debt facilities
and the associated costs and repay other debts so that we can rebuild our cash position. We intend to pay dividends
consistently and increase the payout ratio as our financial performance allows.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
No significant changes in the state of affairs of the company occurred during the financial year.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
On 29th August 2018 CPT Global Limited announced its intention to extend the on-market share buy back for a
further twelve months until 28th August 2019. A maximum of 3,000,000 shares may be bought back during the
buy-back period.
On 17 August 2018, David Lynch (Chief Executive Officer Australia and Asia) resigned.
Except for the above, no other matters or circumstances have arisen since the end of the financial year which
significantly affected or may significantly affect the operations of the economic entity, the results of those
operations, or the state of affairs of the economic entity in future financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Likely developments, future prospects and business strategies of the operations of the consolidated entity are
detailed in the Chairman’s Statement and Managing Director’s Review on pages 1 and 2 respectively.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The company's operations are not regulated by any significant environmental regulation under a law of the
Commonwealth or of a State or Territory.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The company has paid premiums to insure the current directors and officers against liabilities for costs and
expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the
capacity of director and officer of the company, other than conduct involving a wilful breach of duty in relation to
the company. The total premium paid was $48,675
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Directors’ Report
REMUNERATION REPORT
The Remuneration Report for the year ended 30 June 2018 outlines the Director and executive remuneration
arrangements of CPT Global in accordance with the requirements of the Corporations Act 2001 and its regulations.
For the purposes of this Report, key management personnel (KMP) of CPT Global are defined as those persons
having authority and responsibility for planning, directing and controlling the major activities of CPT Global,
directly or indirectly, including any Director of the parent company.
Persons to who the report applies
The remuneration disclosures in this Report cover the following persons:
Key Management Person
Fred S Grimwade
Alan Baxter
Gerry Tuddenham
David Lynch
Grant Sincock
Luke Tuddenham
Position
Non-executive Chairman
Non-executive Director
Managing Director
Chief Executive Officer Australia and Asia (resigned 17 August 2018)
Company Secretary and Chief Financial Officer
President North America
From 1 July 2017 Kevin Akom took on the role of General Manager – Strategic Client Relationships within the
Australian region. This new role and its responsibilities do not meet the definition of Key Management Person and
Kevin is therefore not included in the Key Management Person disclosures from 1 July 2018.
Remuneration policy
The Remuneration and Nomination Committee of the Board of Directors is responsible for determining and
reviewing compensation arrangements for the directors, the managing director and the executive team. The
Remuneration and Nomination Committee assesses the appropriateness of the nature and amount of
remuneration of such officers on a periodic basis by reference to relevant employment market conditions with the
overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and
executive team. The outcomes of the remuneration structure are expected to comply with Executive Share and
Option Scheme Guidelines. The payment of bonuses, stock options and other incentive payments are reviewed by
the Remuneration and Nomination Committee annually as part of the review of executive remuneration and a
recommendation is put to the Board for approval. All bonuses, options and incentives must be linked to
pre-determined performance criteria. The Board can exercise its discretion in relation to approving the incentives,
bonuses and options and can recommend changes to the Committee's recommendations. Any changes must be
justified by reference to measurable performance criteria. Details of such incentives awarded during the year are
detailed below. Further details on the remuneration of directors and executives are provided in Note 27 to the
financial statements.
To assist in achieving these objectives, the Remuneration and Nomination Committee links the nature and amount
of executive directors' and officers' remuneration to the company's financial and operational performance and
shareholders’ value. The committee acknowledges that the creation of shareholder value has recently been
inhibited by the global financial crisis and the tightening market conditions experienced within the IT industry.
Performance-based remuneration
Executives have short-term ‘at risk’ cash bonuses, the payment of which depends on the executive meeting their
KPIs. Additional bonuses for exceptional performance in relation to the pre-agreed KPIs may be paid up to a
maximum of 3 times the target bonus. The KPIs are set annually after consultation with the directors and
executives. The measures are specifically tailored to the areas where each executive has a level of control. The
KPIs target areas the Board believes hold the greatest potential for expansion and profit, covering financial and
non-financial goals, for both the short and long-term. They can include financial, people, client, strategy and risk
measures.
The directors are issued performance rights with vesting conditions tied to the share price of the company and
the revenue growth of the international business.
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Company performance, shareholder wealth and director and executive remuneration
The remuneration policy has been tailored to increase goal congruence between shareholders, directors and
executives. There have been two methods applied in achieving this aim, the first being annual salary reviews based
on key performance indicators, and the second being the issue of shares and options to selected directors and
executives to encourage the alignment of personal and shareholder interests. While losses have been incurred
during the last 3 years and the share price has declined, there have been no increases in annual salary during
annual reviews for executives and no options have vested as key performance indicators and performance hurdles
have not been met.
The following table shows the net profit and dividends for the last five years for the listed entity, as well as the
share price at the end of the respective financial years. The analysis reflects the losses made in the 2015, 2016
and 2017 financial years and is matched by a reduced share price and no dividends being paid. This performance
has been attributed to the difficult trading conditions in Europe and the continued investment in overseas
opportunities in which delays have been encountered in reaching contract finalisation and tightening margins
across the business. There have were no increases in the compensation arrangements for directors and key
management personnel during the 2015, 2016 and 2017 financial years and performance bonuses reflect the
results of the Company. The board believes the remuneration policy is effective and can be linked to current years
result.
Net profit/(loss)
Share price at year end
Dividends paid
2014
$2.2m
$0.67
4.5c
2015
2016
2017
($5.1m)
($3.9m)
($1.5m)
$0.52
0.0c
$0.26
0.0c
$0.16
0.0c
2018
$0.8m
$0.12
0.25c
During the year, no shares were purchased as part of the share buyback. The share price during the year ranged
from a low of $0.11 to a high of $0.19.
Remuneration of Non-executive Directors
Non-executive Directors are entitled to a fixed fee per annum for acting as a Director of CPT Global. No additional
fees are paid for membership of an active committee.
Under CPT Global’s Constitution, Non-executive Director’s fees cannot exceed the aggregate cap approved by
shareholders by an ordinary resolution. The current cap is $200,000 and was adopted at the 2006 AGM. The
aggregate fees paid to Non-Executive directors in the 2018 financial year do not exceed the cap.
There has been no change to the fees paid to individual Non-executive Directors during or after the 2018 financial
year.
Remuneration of Senior Executives
Both executive directors and the executives specified in this remuneration report, have their employment conditions
formalised in contracts of employment and are permanent employees of CPT Global Limited.
The employment contracts are generally for a fixed term of 6 months to 1 year and contain the following common
features:
an annual review of the Base Salary which is dependent upon CPT Global’s performance, the individual’s
performance and market changes. Any increase has to be approved by the Managing Director and the
Remuneration and Nomination Committee;
short term performance incentive payments quarterly, dependent upon CPT Global achieving its objectives
and the individual achieving their KPIs;
at CPT Global’s discretion, allowances and adjustments to Base Salary may be paid when an Executive is
required to travel on CPT Global business. Any adjustments must be agreed in advance, documented in
writing and signed by the Executive and the Company;
post-employment restraints covering non-solicitation of employees, contractors and clients and non-
competition;
CPT Global may at its discretion elect to make payment in lieu of notice when the contract is terminated by
the employee or the Company;
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a contract can be terminated immediately without notice by CPT Global for serious misconduct; and
any options not vested as at the date of termination will lapse.
Specific details of each Senior Executive’s contract of employment which applied at the end of the financial year
ending 30 June 2018 are summarised in the tables on the following pages.
Summary of Contracts of Employment Applicable at 30 June 2018
Position
Fixed Remuneration
Base Salary
Superannuation
Non-monetary benefits
Gerry Tuddenham
Managing Director
David Lynch
CEO Australia & Asia
$395,000
$410,000
$25,000
Mobile telephone, car park, road tolls,
petrol and salary sacrifice arrangements
for motor vehicle and superannuation.
$25,000
Mobile telephone, car park and salary
sacrifice arrangements for motor vehicle
and superannuation.
Performance Based Remuneration
Annual target bonus
Other benefits
Post-employment benefits
Nil
Nil
Nil
Post-employment restraint
6 months
Termination
4 weeks notice
Termination benefits
Nil
$50,000
Nil
Nil
6 months
4 weeks notice
Nil
Position
Fixed Remuneration
Base Salary
Superannuation
Non-monetary benefits
Grant Sincock
Chief Financial Officer & Company
Secretary
Luke Tuddenham
President North America
$265,000
US$215,000
$25,000
Mobile telephone, road tolls and salary
sacrifice arrangements for motor vehicle
and superannuation.
US$18,050
Mobile telephone, car park, road tolls
and salary sacrifice arrangements for
motor vehicle and superannuation. Mr
Tuddenham is also entitled to additional
expatriate benefits for himself and his
family.
Performance Based Remuneration
Annual target bonus
Other benefits
Post-employment benefits
$30,000
Nil
Nil
Post-employment restraint
6 months
Termination
4 weeks notice
Termination benefits
Nil
US$125,000
Nil
Nil
6 months
4 weeks notice
Nil
CPT Global Limited – Annual Report
24
For personal use only
Directors’ Report
Details of remuneration for the year ended 30 June 2018
Details of the nature and amount of each element of the remuneration of each director of the company and
executive officers of the company and the group receiving the highest remuneration for the financial year are as
follows:
Short-Term Benefits
Salary
Short-
term
Bonus
Other
Benefits
Post
Emp’t
Benefits
Super
Other Long-Term
Benefits
Total
Performance
related
Long
Service
Leave
Share
Based
Payments
$
$
$
$
$
$
$
$
Directors
Alan Baxter
2018
2017
Fred Grimwade
2018
2017
Gerry
Tuddenham
2018
2017
David Lynch
2018
2017
Total
Remuneration
2018
2017
Executive Officers
Kevin Akom
2017
Grant Sincock
2018
2017
Luke Tuddenham
2017
Total
Remuneration
2018
2017
Notes
50,465
50,459
77,982
77,982
378,781
398,241
-
-
-
-
-
-
-
-
-
-
4,668
4,707
7,408
7,408
8,919
20,531
-
-
-
-
-
10,370
25,000
9,068
2,480
89
2,480
89
57,613
55,255
87,870
85,479
7,926
4,233
416,157
446,912
412,000
50,000
409,532
-
7,882
9,633
25,000
27,468
6,008
2,552
19,814
520,704
-
449,185
4.3%
0.2%
2.8%
0.1%
1.9%
0.9%
9.6%
0.0%
919,228
50,000
16,801
57,607
936,214
-
20,003
64,583
6,008
11,620
32,699
1,082,343
4,411
1,036,831
7.6%
0%
275,229
-
9,064
24,771
120
265,000
25,000
264,854
-
8,025
9,885
25,000
26,882
2018
315,113 180,000 301,629
27,220
283,934
26,853
319,176
27,065
580,113 205,000 309,654
52,220
12,205
824,017
26,853
338,125
78,718
7,830
5,542
3,469
6,663
4,241
-
-
-
-
-
-
-
309,184
0.00%
328,567
305,090
7.61%
0.00%
830,625
661,269
21.67%
4.06%
1,159,192
1,275,543
17.68%
2.1%
1. The elements of remuneration have been determined on the basis of the cost to the group.
2. Other Benefits for Mr Luke Tuddenham include expatriate costs
CPT Global Limited – Annual Report
25
For personal use only
Directors’ Report
Performance income as a proportion of total remuneration
Executive directors and executives are paid performance related bonuses based on set monetary figures, rather
than proportions of salary since these payments are discretionary. This has led to the proportions of remuneration
related to performance varying between individuals.
Performance Rights granted as remuneration
Terms and Conditions for Each Grant
Vested
No.
Granted
No.
Grant Date
Value per
Share at Grant
Date
Exercise
Price
$
Gerry Tuddenham
Alan Baxter
Fred Grimwade
David Lynch
Total
-
-
-
-
-
200,000
27/11/17
50,000
50,000
27/11/17
27/11/17
500,000
27/11/17
800,000
$
$0.16
$0.16
$0.16
$0.16
$0.00
$0.00
$0.00
$0.00
Last
Exercise
Date
27/11/20
27/11/20
27/11/20
27/11/20
Further details on the service and performance criteria attached to these rights can be found in note 22.
Balance at
beginning
of Period
Granted
as
Remuner
ation
Rights
Exercised
Rights
Lapsed
/Cancelled
Balance
at End of
Period
Exercisable
at End of
Period
Vested and
Unexercised
at End of
Period
Gerry Tuddenham
200,000
200,000
Alan Baxter
Fred Grimwade
David Lynch
50,000
50,000
50,000
50,000
0
500,000
Total
300,000
800,000
-
-
-
-
-
200,000
200,000
50,000
50,000
50,000
50,000
-
500,000
300,000
800,000
-
-
-
-
-
-
-
-
The performance rights held by David Lynch lapsed on 17 August 2018 when his employment with the Company
ended.
CPT Global Limited – Annual Report
26
For personal use only
Directors’ Report
Shareholdings of Key Management Personnel
Shares held by key management personnel directly, indirectly or beneficially including their related parties:
Shares held in CPT Global
Limited
Fred S Grimwade
Alan Baxter
Gerry Tuddenham
David Lynch
Specified Executives
Grant Sincock
Luke Tuddenham
Total
Shares held in CPT Global
Limited
Fred S Grimwade
Alan Baxter
Gerry Tuddenham
David Lynch
Specified Executives
Kevin Akom
Grant Sincock
Luke Tuddenham
Total
DIRECTORS' MEETINGS
Balance 1
July 2017
Ord
718,200
-
11,338,970
417,458
185,671
842,955
13,503,254
Balance 1
July 2016
Ord
718,200
-
11,338,970
363,110
565,013
185,671
842,955
14,063,919
Granted as
Remuneration
On Exercise of
Options
Net Change
Other
Ord
Ord
Ord
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Granted as
Remuneration
On Exercise
of Options
Net Change
Other
Balance 30
June 2018
Ord
718,200
-
11,388,970
417,458
185,671
842,955
13,503,254
Balance 30
June 2017
Ord
718,200
-
11,388,970
417,458
Ord
Ord
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Ord
-
-
-
54,348
-
-
-
565,013
185,671
842,955
54,348
14,118,268
The number of meetings of directors (including meetings of committees of directors) held during the year and the
number of meetings attended by each director were as follows:
Directors’ Meetings
Finance and Audit Committee
Meetings
Remuneration and
Nomination Committee
Meetings
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Alan Baxter
Fred S Grimwade
Gerry Tuddenham
David Lynch
12
12
12
12
11
12
11
11
2
2
2
-
2
2
2
-
2
2
-
-
CPT Global Limited – Annual Report
2
2
-
-
27
For personal use only
Directors’ Report
Committee membership
As at the date of this report, the company had a Finance and Audit Committee and a Remuneration and Nomination
Committee of the Board of Directors.
Members acting on the committees of the Board during the year were:
Finance and Audit
Fred Grimwade (Chair)
Alan Baxter
Gerry Tuddenham
Remuneration and Nomination
Alan Baxter (Chair)
Fred Grimwade
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any
proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for
all or any part of those proceedings. The company was not a party to any such proceedings during the year.
NON-AUDIT SERVICES
The Board of Directors, in accordance with advice from the Finance and Audit Committee, is satisfied that the
provision of non-audit services during the year is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001. The directors are satisfied that the services disclosed below did not
compromise the external auditor’s independence for the following reasons:
all non-audit services are reviewed and approved by the Finance and Audit Committee prior to
commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and
the nature of the services provided do not compromise the general principles relating to auditor
independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the
Accounting Professional & Ethical Standards Board.
The following fees for non-audit services were paid/payable to ShineWing Melbourne during the year ended 30
June 2018:
Taxation compliance and advice services $26,100
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 30 June 2018 has been received and can be found
on page 29 of the directors’ report.
ROUNDING
The amounts contained in this report and in the financial report have been rounded to the nearest $1,000 (where
rounding is applicable) under the option available to the company under ASIC Corporations (Rounding in
Financial/Directors’ Reports) Instrument 2016/191. The company is an entity to which the Class Order applies.
Signed in accordance with a resolution of the directors.
Gerry Tuddenham
Managing Director
Melbourne, 25 September 2018
CPT Global Limited – Annual Report
28
For personal use only
AUDITOR’S INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF CPT GLOBAL LIMITED AND CONTROLLED ENTITIES
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2018 there have been:
(i)
No contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation
to the audit, and
(ii) No contraventions of any applicable code of professional conduct in relation to the audit.
ShineWing Australia
Chartered Accountants
Rami Eltchelebi
Partner
Melbourne, 25 September 2018
29
For personal use only
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
YEAR ENDED 30 JUNE 2018
Notes
Revenue
Other income
Salaries and employee benefits expense
Consultants benefits expense
Depreciation and amortisation expenses
Insurance expense
Finance costs
Occupancy Costs
Other expenses
Foreign currency (Losses) Gains
PROFIT / (LOSS) BEFORE INCOME TAX
INCOME TAX EXPENSE
PROFIT / (LOSS) AFTER INCOME TAX
Other Comprehensive Loss:
Items that may be subsequently reclassified to comprehensive
income
Exchange differences on translating foreign controlled entities
Total Other Comprehensive Income for the year, net of tax
3
3
4
4
4
5
2018
$’000
31,031
57
(3,008)
(22,549)
(62)
(277)
(260)
(821)
(2,825)
(42)
2017
$’000
27,159
70
(3,308)
(21,066)
(66)
(274)
(244)
(971)
(2,433)
(194)
1,244
(1,327)
(464)
(141)
780
(1,468)
41
41
184
184
TOTAL COMPREHENSIVE PROFIT / (LOSS) FOR THE YEAR
821
(1,284)
PROFIT / (LOSS) ATTRIBUTABLE TO MEMBERS OF CPT GLOBAL
LIMITED
TOTAL COMPREHENSIVE PROFIT / (LOSS) ATTRIBUTABLE TO
MEMBERS OF CPT GLOBAL LIMITED
780
(1,468)
821
(1,284)
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
25
25
2.09
2.06
(3.93)
(3.93)
The Consolidated Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with
the Notes to the Financial Statements.
CPT Global Limited – Annual Report
30
For personal use only
Consolidated Statement of Financial Position
AT 30 JUNE 2018
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Unbilled revenue
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Deferred tax assets
Property, plant and equipment
Intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Borrowings
Current tax liabilities
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Deferred tax liability
Other long term provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Retained earnings
TOTAL EQUITY
Notes
7
8
9
10
16
12
13
14
15
16
17
16
17
18
19
2018
$’000
1,440
4,843
2,283
240
8,806
1,259
17
4,302
5,578
2017
$’000
1,656
5,571
792
103
8,122
1,067
43
4,348
5,458
14,384
13,580
6,702
535
578
810
8,625
182
131
313
6,007
1,640
2
982
8,631
233
91
324
8,938
8,955
5,446
4,625
12,228
1,480
(8,262)
5,446
12,228
1,439
(9,042)
4,625
The Consolidated Statement of Financial Position is to be read in conjunction with the Notes to the Financial
Statements.
CPT Global Limited – Annual Report
31
For personal use only
Consolidated Statement of Changes in Equity
YEAR ENDED 30 JUNE 2018
$’000
$’000
$’000
$’000
$’000
Notes
Issued
Capital
Retained
Earnings
Equity
Reserve
Foreign
Currency
Translation
Reserve
Total
12,195
(7,574)
1,691
(436)
5,876
19
-
-
-
-
33
33
(1,468)
-
(1,468)
-
-
-
-
-
-
-
-
-
-
-
-
184
(1,468)
184
184
(1,284)
-
-
-
-
-
-
33
33
Balance at 1 July 2016
Comprehensive Income
Profit for the year
Other comprehensive income
Total comprehensive
income/(loss) for the year
Transactions with owners, in
their capacity as owners
Share based payments
Dividends paid or provided for
Issue of Shares
Total transactions with owners,
in their capacity as owners
Balance at 30 June 2017
12,228
(9,042)
1,691
(252)
4,625
19
Balance at 1 July 2017
Comprehensive Income
Profit for the year
Other comprehensive Income
Total comprehensive income for
the year
Transactions with owners, in
their capacity as owners
Share based payments
Dividends paid or provided for
Issue of Shares
Total transactions with owners,
in their capacity as owners
12,228
(9,042)
1,691
(252)
4,625
-
-
-
-
-
-
780
-
780
-
-
-
-
-
-
-
-
-
-
-
-
41
41
-
-
-
-
780
41
821
-
-
-
-
Balance at 30 June 2018
12,228
(8,262)
1,691
(211)
5,446
The Consolidated Statement of Changes in Equity is to be read in conjunction with the Notes to the Financial
Statements
CPT Global Limited – Annual Report
32
For personal use only
Consolidated Statement of Cash Flows
YEAR ENDED 30 JUNE 2018
Notes
2018
$’000
2017
$’000
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs
Income tax paid
NET CASH FLOWS (USED IN)/FROM OPERATING ACTIVITIES
20
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale of property, plant and equipment, software
NET CASH FLOWS (USED IN)/FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from share issue
Repayments of borrowings
Proceeds from borrowings
Payment of dividends on ordinary shares
NET CASH FLOWS FROM FINANCING ACTIVITIES
20
NET DECREASE IN CASH AND CASH EQUIVALENTS HELD
Add opening cash & cash equivalents brought forward
Effects of exchange rate changes on cash and cash equivalents
CLOSING CASH AND CASH EQUIVALENTS CARRIED FORWARD
7
35,979
(34,660)
3
(104)
(131)
1,087
10
10
-
(1,297)
-
-
(1,297)
(200)
1,656
(16)
1,440
28,851
(31,039)
5
(166)
9
(2,340)
(2)
(2)
-
-
735
-
735
(1,607)
3,034
229
1,656
The Consolidated Statement of Cash Flows is to be read in conjunction with the Notes to the Financial Statements.
CPT Global Limited – Annual Report
33
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
1. Summary of Significant Accounting Policies
The consolidated financial statements comprise the financial statements of CPT Global Limited and its controlled
entities (collectively referred to as ‘the Group’ or ‘the Economic Entity’). The separate financial statements of the
Parent Entity, CPT Global Limited, have not been presented within this financial report as permitted by the
Corporations Act 2001.
The principal activities of the group during the financial year were the provision of specialist IT consultancy services.
The registered address and principal place of business is level 3, 818 Bourke Street, Docklands, Victoria.
The financial report was authorised for issue on 25 September 2018 by the Board of Directors.
Basis of Preparation
These general purpose financial statements have been prepared in accordance with the Corporations Act 2001,
Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board and
International Financial Reporting Standards as issued by the International Accounting Standards Board. The Group
is a for-profit entity for financial reporting purposes under Australian Accounting Standards.
Material accounting policies adopted in the preparation of this financial report are presented below and have been
consistently applied unless otherwise stated.
The financial report, except for the cash flow information, has been prepared on an accruals basis and is based on
historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets,
financial assets and financial liabilities. All amounts are in Australian dollars unless otherwise stated.
The Group has not adopted any new or amending Australian Accounting Standards and New Interpretations during
the year.
Accounting Policies
(a) Principles of consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent (CPT Global
Limited) and all of the subsidiaries (including any structured entities). Subsidiaries are entities the parent controls.
The parent controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its power over the entity. A list of the subsidiaries is provided
in Note 11.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group
from the date on which control is obtained by the Group. Intercompany transactions, balances and unrealised gains
or losses on transactions between group entities are fully eliminated on consolidation. Accounting policies of
subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the accounting
policies adopted by the Group.
The financial statements of the subsidiaries used in the preparation of these consolidated financial statements have
been prepared as of the same reporting date as the parent.
CPT Global Limited – Annual Report
34
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
1. Summary of Significant Accounting Policies (continued)
(b) Income Tax
The income tax expense/(revenue) for the year comprises current income tax expense/(benefit) and deferred tax
expense/(benefit).
Current income tax expense charged to the profit or loss is the tax payable on taxable income for the current period.
Current tax liabilities/ (assets) are therefore measured at the amounts expected to be paid to/(recovered from) the
relevant taxation authority using tax rates (and tax laws) that have been enacted or subsequently enacted by the
end of the reporting period.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the
year as well as unused tax losses.
Current and deferred income tax expense/(income) is charged or credited directly to equity instead of the profit or
loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where
amounts have been fully expensed but future tax deductions are available. No deferred income tax will be
recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no
effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the
asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of the
reporting period. Their measurement also reflects the manner in which management expects to recover or settle
the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that
it is probable that future taxable profits will be available against which the benefits of the deferred tax asset can be
utilised.
Deferred tax assets and liabilities are not recognised for temporary differences between the carrying amount and
tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal
of the temporary differences, and it is probable that the differences will not reverse in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that
net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred
tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and
liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different
taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective
asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are
expected to be recovered or settled.
(c) Unbilled Revenue
Unbilled revenue is valued at cost plus profit recognised to date less any provision for anticipated future losses.
Cost includes both variable and fixed costs relating to specific contracts, and those costs that are attributable to the
contract activity in general and that can be allocated on a reasonable basis.
Profits are recognised on the stage of completion basis measured using the proportion of costs incurred to date as
compared to expected total costs. Where losses are anticipated they are provided for in full.
Revenue has been recognised on the basis of the terms of the contract adjusted for any variations or claims
allowable under the contract.
CPT Global Limited – Annual Report
35
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
1. Summary of Significant Accounting Policies (continued)
(d) Property, Plant & Equipment
Each class of property, plant and equipment is carried at cost less accumulated depreciation and, where applicable
impairment losses.
Property, Plant and equipment
The carrying amount of property, plant and equipment is reviewed annually by directors to ensure it is not in excess
of the recoverable amount from these assets. When there are indications of any impairment, the recoverable amount
is assessed on the basis of the expected net cash flows that will be received from the asset’s employment and
subsequent disposal. The expected net cash flows have been discounted to their present values in determining
recoverable amounts. 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.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Group and the cost of
the item can be measured reliably. All other repairs and maintenance are recognised in profit or loss during the
financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets is depreciated on a straight line basis over the asset’s useful life to the
Group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over
the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Leasehold improvements
Fixtures Fittings and Equipment
Motor Vehicles
Depreciation Rate
2 – 5 years
33% to 50%
12% to 20%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting
period.
Gains and losses on disposals are determined by comparing net proceeds with the carrying amount. These gains
and losses are recognised in profit and loss.
(e) Operating Leases
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are
recognised as expenses on a straight line basis over the lease term. Lease incentives under operating leases are
recognised as a liability and amortised on a straight line basis over the least term.
(f) Financial Instruments
Recognition and measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions
to the instrument. For financial assets, this is equivalent to the date that the company commits itself to either the
purchase or sale of the asset (i.e. trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is
classified ‘at fair value through profit or loss’, in which case transaction costs are expensed to profit or loss
immediately.
CPT Global Limited – Annual Report
36
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
1. Summary of Significant Accounting Policies (continued)
Classification and subsequent measurement
Financial instruments are subsequently measured at fair value, amortised cost using the effective interest rate
method, or cost.
Amortised cost is the amount at which the financial asset or financial liability is measured at initial recognition less
principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation of the
difference between that initial amount and the maturity amount calculated using the effective interest method.
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied
to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar
instruments and option pricing models.
The effective interest method is used to allocate interest income or interest expense over the relevant period and is
equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction
costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the
contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability.
Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential
recognition of an income or expense in profit or loss.
The Group does not designate any interests in subsidiaries, associates or joint venture entities as being subject to
the requirements of accounting standards specifically applicable to financial instruments.
(i)
Financial assets at fair value through profit or loss
Financial assets are classified at ‘fair value through profit or loss’ when they are either held for trading for the
purpose of short-term profit taking, or when they are designated as such to avoid an accounting mismatch or to
enable performance evaluation where a group of financial assets is managed on a fair value basis in accordance
with a documented risk management or investment strategy. Such assets are subsequently measured at fair value
with changes in carrying value being included in profit or loss.
(ii)
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market and are subsequently measured at amortised cost.
(iii)
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or
determinable payments, and it is the Group’s intention to hold these investments to maturity. They are subsequently
measured at amortised cost.
(iv)
Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.
Impairment of Financial Instruments
At the end of each reporting period, the Group assesses whether there is objective evidence that a financial
instrument has been impaired. In the case of available-for-sale financial instruments, a significant or prolonged
decline in the value of the instrument is considered to determine whether impairment has arisen. In the case of
loans and receivables, impairment is recognised when collectability is doubtful (refer to (g) for further details).
Impairment losses are recognised in the profit and loss.
CPT Global Limited – Annual Report
37
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Notes to the Financial Statements
Year Ended 30 June 2018
1. Summary of Significant Accounting Policies (continued)
Financial guarantees
Where material, financial guarantees issued, which require the issuer to make specified payments to reimburse the
holder for a loss it incurs because a specified debtor fails to make payment when due, are recognised as a financial
liability at fair value on initial recognition.
The guarantee is subsequently measured at the higher of the best estimate of the obligation and the amount initially
recognised less, when appropriate, cumulative amortisation in accordance with AASB 118: Revenue. Where the entity
gives guarantees in exchange for a fee, revenue is recognised under AASB 118.
The fair value of financial guarantee contracts has been assessed using a probability weighted discounted cash flow
approach. The probability has been based on:
the likelihood of the guaranteed party defaulting in a year period;
the proportion of the exposure that is not expected to be recovered due to the guaranteed party defaulting;
and
the maximum loss exposed if the guaranteed party were to default.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is
transferred to another party whereby the entity no longer has any significant continuing involvement in the risks
and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either
discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or
transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or
liabilities assumed, is recognised in profit or loss.
(g) Receivables
Trade receivables are a part of financial instruments (loans and receivables) and are initially recognised at fair value
and are subsequently measured at amortised cost less any provision for impairment. Trade receivables are generally
due for settlement within 30 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are
written off by reducing the carrying amount directly. An allowance account (provision for impairment of trade
receivables) is used when there is objective evidence that the Group will not be able to collect all amounts due
according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the
debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are considered
indicators that the trade receivable is impaired. The amount of the impairment allowance is the difference between
the asset’s carrying amount and the recoverable amount.
The amount of the impairment loss is recognised in the profit or loss within other expenses. When a trade receivable
for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written
off against the allowance account. Subsequent recoveries of amounts previously written off are credited against
other expenses in the profit or loss.
(h) Impairment of assets
At the end of each reporting period, the Group reviews the carrying values of its tangible and intangible assets to
determine whether there is any indication that those assets have been impaired. If such an indication exists, the
recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is
compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is
recognised as an expense in the profit and loss.
CPT Global Limited – Annual Report
38
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Notes to the Financial Statements
Year Ended 30 June 2018
1. Summary of Significant Accounting Policies (continued)
Impairment testing is performed annually for goodwill and other intangible assets with indefinite lives.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
Non-financial assets, other than goodwill that suffered impairment, are reviewed for possible reversals of the
impairment at the end of each reporting period.
(i) Intangibles
Goodwill
Goodwill is initially recorded at the amount by which the purchase price for a business combination exceeds the fair
value attributed to the interest in the net fair value of identifiable assets, liabilities and contingent liabilities at the
date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition
of associates is included in investments in associates. Goodwill is tested annually for impairment and 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.
Intellectual Property
Intellectual property is recognised at the cost of acquisition and has an indefinite useful life. Intellectual property is
tested annually for impairment and carried at cost less accumulated impairment losses. The intellectual property
has an indefinite useful life as it has contributed to net cash inflows for 18 years and there is no limit to the period
in which it could continue to contribute to net cash inflow.
Computer Software
Computer software is recognised at the cost of acquisition. Computer software costs have a finite useful life and are
carried at cost less accumulated amortisation and any impairment losses. Computer software costs are amortised
on a straight line basis over their useful life. The amortisation rate used for software costs varies from 14% to 50%.
(j) Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group’s entities is the currency of the primary economic environment in
which that entity operates. The consolidated financial statements are presented in Australian dollars which is the
parent entity’s functional and presentation currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date
of the transaction. Foreign currency monetary items are re-translated at the year-end exchange rate. Non-monetary
items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-
monetary items measured at fair value are reported at the exchange rate at the date when fair values were
determined.
Exchange differences arising on the translation of monetary items are recognised in the profit or loss, except where
deferred in equity as a qualifying cash flow or net investment hedges. Exchange differences arising on the translation
of non-monetary items are recognised directly in equity to the extent that the underlying gain or loss is directly
recognised in equity, otherwise the exchange difference is recognised in the profit or loss.
Group companies
The financial results and position of foreign operations whose functional currency is different from the Group’s
presentation currency are translated as follows:
— assets and liabilities are translated at year-end exchange rates prevailing at the end of the reporting period;
—
—
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
CPT Global Limited – Annual Report
39
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
1. Summary of Significant Accounting Policies (continued)
On consolidation, exchange differences arising from translation of transactions considered to be net investment in
foreign operations are transferred directly to the Group’s foreign currency translation reserve in the statement of
financial position. These differences are recognised in the profit or loss in the period in which the operation is
disposed.
(k) Trade and other payables
Trade and other payables are a part of financial instruments (Non-derivative financial liabilities). These amounts
represent liabilities for goods and services provided to the Group prior to the end of the financial year which are
unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables
are initially measured at fair value and subsequently measured at amortised cost using the effective interest method.
(l) Employee Benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to
balance date. Employee benefits that are expected to be wholly settled within one year have been measured at the
amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have been
measured at the present value of the estimated future cash outflows to be made for those benefits. Those cashflows
are discounted using market yields on corporate bonds with terms to maturity that match the expected timing of
cashflows.
Wages and salaries, annual leave and sick leave
(i)
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled wholly
within 12 months of the end of the reporting period are recognised in other payables in respect of employees’
services up to the end of the reporting period and are measured at the undiscounted amounts expected to be paid
when the liabilities are settled. When measuring sick leave entitlement, only the unutilised entitlement that is likely
to be utilised over and above the leave entitlement that continues to accrue in the future periods is taken into
account.
Long service leave
(ii)
The liability for long service leave is recognised in the provision for employee benefits and measured as the present
value of expected future payments to be made in respect of services provided by employees up to the end of the
reporting period. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields at the end of the
reporting period on corporate bonds with terms to maturity and currency that match, as closely as possible, the
estimated future cash outflows.
(iii)
Contributions to defined contributions superannuation funds are recognised as an expense as they become payable.
Retirement benefit obligations
(iv)
Share based payments
Share-based compensation benefits are provided to certain employees via the CPT Share and Option Incentive Plan
and an employee share scheme. Information relating to these schemes is set out in note 22.
The fair value of options granted under the CPT Share and Option Incentive Plan is recognised as an employee
benefit expense with a corresponding increase in equity in the period the options are granted. The fair value is
measured at grant date and recognised over the period during which the employees become unconditionally
entitled to the options.
The fair value at grant date is independently determined using a Monte Carlo and American Binomial option pricing
model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at
grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest
rate for the term of the option.
CPT Global Limited – Annual Report
40
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
1. Summary of Significant Accounting Policies (continued)
The fair value of the options granted is adjusted to reflect market vesting conditions but excludes the impact of any
non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions
are included in assumptions about the number of options that are expected to become exercisable. At the end of
each reporting period, the entity revises its estimate of the number of options that are expected to become
exercisable. The employee benefit expense recognised each period takes into account the most recent estimate.
The impact of the revision to the original estimates, if any, is recognised in the profit and loss with a corresponding
adjustment to equity.
(m) Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which
it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. A provision
for dividends is not recognised as a liability unless the dividends are declared, determined or publicly recommended
on or before the end of the reporting period.
(n) Issued Capital
Issued and paid up capital is recognised at the fair value of the consideration received by the Group.
Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the
share proceeds received.
(o) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within
short-term borrowings in current liabilities on the statement of financial position.
(p) Revenue and Other Income
Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade
discounts and volume rebates allowed. Any consideration deferred is treated as the provision of finance and is
discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference
between the amount initially recognised and the amount ultimately received is interest revenue.
The following specific recognition criteria must also be met before revenue is recognised:
Sale of Goods
Significant risk and rewards of ownership of goods has passed to the buyer.
Rendering of Services
Where the contract outcome can be reliably measured, control of the right to be compensated for the services and
the stage of completion can be reliably measured. Stage of completion is measured by reference to the labour hours
incurred to date as a percentage of total estimated hours for each contract.
Where the contract outcome cannot be reliably measured, revenue is recognised only to the extent that costs are
recoverable.
Interest
Interest revenue is recognised on a proportional basis taking into account the effective interest rates applicable to
the financial assets.
All revenue is stated net of the amount of goods and services tax (GST).
CPT Global Limited – Annual Report
41
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Notes to the Financial Statements
Year Ended 30 June 2018
1. Summary of Significant Accounting Policies (continued)
(q) Borrowing Costs
All borrowing costs are expensed in the period in which they are incurred.
(r) Earnings per share (“EPS”)
Basic EPS is calculated as net profit attributable to members, adjusted to exclude costs of servicing equity (other
than dividends) and preference share dividends, divided by the weighted average number of ordinary shares,
adjusted for any bonus element.
Diluted EPS is calculated as net profit attributable to members, adjusted for:
costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses;
other non-discretionary changes in revenues or expenses during the period that would result from the dilution
of potential ordinary shares; and
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted
for any bonus element.
(s) Consumption Taxes (GST and VAT)
Revenues, expenses and assets are recognised net of the amount of GST and VAT, except where the amount of GST
and VAT incurred is not recoverable from the taxation authority. In these circumstances the GST and VAT is
recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and
payables in the statement of financial position are shown inclusive of GST and VAT.
Cash flows are presented in the statement of cash flows inclusive of GST and VAT. The GST and VAT components of
cash flows arising from investing or financing activities which are recoverable from, or payable to, the taxation
authority are presented as operating cash flows included in receipts from customers or payments to suppliers.
(t) Government Grants
Government grants are recognised at fair value where there is reasonable assurance that the grant will be received
and all grant conditions will be met. Grants relating to expense items are recognised as income over the periods
necessary to match the grant to the costs they are compensating.
(u) Comparative Figures
When required by accounting standards, comparative figures have been restated to conform to changes in
presentation for the current financial year.
(v) Rounding of Amounts
The parent entity has applied the relief available to it under ASIC Corporations (Rounding in Financial/Directors’
Reports) Instrument 2016/191 and accordingly, amounts in the financial report and directors’ report have been
rounded off to the nearest $1,000, or in certain cases the nearest dollar.
CPT Global Limited – Annual Report
42
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Notes to the Financial Statements
Year Ended 30 June 2018
1. Summary of Significant Accounting Policies (continued)
(w) Critical Accounting Estimates & Judgements
The directors evaluate estimates and judgements incorporated into the financial report based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future events and
are based on current trends and economic data, obtained both externally and within the Group.
Key estimates
(i)
Impairment of Goodwill
Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units
(CGU) to which goodwill has been allocated. The value in use calculation requires the Group to estimate the future
cash flows expected to arise from the CGU and a suitable discount rate in order to calculate the present value.
Refer to Note 13 for details of the assumptions used in this calculation and the potential impact of changes to the
assumptions.
Key judgements
(i)
Provision for impairment of receivables
The Group assesses the recoverability of each individual trade receivable account to determine whether a provision
for impairment is required for any potentially non recoverable amounts.
(ii)
Unbilled revenue
The Group measures unbilled revenue based on information available at the time of recognition. This information
includes historical trends, data analysis, significant judgments from key management personnel as to the reasonable
expectations of future events and completion of projects in progress. See Note 9 for further details.
(iii) Deferred taxes
In assessing whether future taxable amounts will be available to utilise temporary differences and losses,
management review the past performance of the relevant company, the budgets for the forthcoming financial year,
forecasts and sales pipelines.
(x) New Accounting Standards for Application in Future Period
Accounting Standards and Interpretations issued by the AASB that are not yet mandatorily applicable to the Group,
together with an assessment of the potential impact of such pronouncements on the Group when adopted in future
periods, are detailed below:
AASB 9: Financial Instruments and associated Amending Standards (applicable for annual reporting periods
commencing on or after 1 January 2017).
The Standard will be applicable retrospectively (subject to the comment on hedge accounting below) and includes
revised requirements for the classification and measurement of financial instruments, revised recognition and de-
recognition requirements for financial instruments and simplified requirements for hedge accounting. The key
changes made to the Standard that may affect the Group on initial application include certain simplifications to the
classification of financial assets, simplifications to the accounting of embedded derivatives, upfront accounting for
expected credit loss and the irrevocable election to recognise gains and losses on investments in equity instruments
that are not held for trading in other comprehensive income. AASB 9 also introduces a new model for hedge
accounting that will allow greater flexibility in the ability to hedge risk, particularly with respect to hedges of non-
financial items.
The financial assets and liabilities of the Group consist of cash, receivables and payables. Therefore, the directors
do not expect a material impact on transition to AASB 9.
CPT Global Limited – Annual Report
43
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Notes to the Financial Statements
Year Ended 30 June 2018
1. Summary of Significant Accounting Policies (continued)
AASB 15: Revenue from Contracts with Customers (applicable for annual reporting periods commencing on
or after 1 January 2017).
This Standard, when effective, will replace the current accounting requirements applicable to revenue with a single,
principles-based model. Except for a limited number of exceptions, including leases, the new revenue model in AASB
15 will apply to all contracts with customers as well as non-monetary exchanges between entities in the same line
of business to facilitate sales to customers and potential customers. The core principle of AASB 15 is that an entity
will recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects
the consideration to which the entity expects to be entitled in exchange for the goods or services.
To achieve this objective, AASB 15 provides the following five-step model:
identify the contract(s) with a customer;
identify the performance obligations in the contract(s);
determine the transaction price;
allocate the transaction price to the performance obligations in the contract; and
recognise revenue when (or as) the performance obligation is satisfied.
The transitional provisions of this Standard permit an entity to either:
Restate the contracts that existed in each prior period presented per AASB 108: Accounting Policies, Changes
in Accounting Estimates and Errors (subject to certain practical expedients in AASB 15); or
Recognise the cumulative effect of retrospective application to incomplete contracts on the date of initial
application. There are also enhanced disclosure requirements regarding revenue.
The assessment of the impact of AASB 15 is that our time and materials, fixed price and milestone based contracts
with clients contain performance obligations that are satisfied over time. Revenue will be recognised by measuring
the progress towards complete satisfaction of the performance obligations as the services are delivered. The
progress to completion will be measured using an input method whereby the stage of completion is measured by
reference to the labour hours incurred to date as a percentage of total estimated hours for each performance
obligation. This is how CPT currently recognises services revenue and will not result in a change in revenue
recognition.
Risk/reward contracts are satisfied over time and revenue will be recognised by measuring the progress towards
complete satisfaction of the performance obligations. The method of measuring progress will be determined using
an output method as CPT has determined that an output method best reflects the pattern of transfer of value to
the customer. The output is measured in either MIPS or MSUs saved for the customer and the progress is measured
by reference to the MIPS or MSUs saved to date as a percentage of total estimated MIPS or MSUs for each
performance obligation. The MIPS or MSUs saved to date is determined by identifying all opportunities identified
at a point in time and weighting the likelihood of the client realising the savings based on fixed and measurable
stages in in a risk/reward project. The weighting at each stage is based on CPT’s experience over 18 years of
completing risk/reward projects. This is how CPT currently recognises risk/reward revenue and will not result in a
change in revenue recognition.
CPT Global Limited – Annual Report
44
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
1. Summary of Significant Accounting Policies (continued)
AASB 16: Leases (applicable to annual reporting periods beginning on or after 1 January 2019).
When effective, this Standard will replace the current accounting requirements applicable to leases in AASB 117:
Leases and related Interpretations. AASB 16 introduces a single lessee accounting model that eliminates the
requirement for leases to be classified as operating or finance leases.
. The main changes introduced by the new Standard include:
recognition of a right-to-use asset and liability for all leases (excluding short-term leases with less than 12
months of tenure and leases relating to low-value assets);
depreciation of right-to-use assets in line with AASB 116: Property, Plant and Equipment in profit or loss and
unwinding of the liability in principal and interest components;
variable lease payments that depend on an index or a rate are included in the initial measurement of the lease
liability using the index or rate at the commencement date;
by applying a practical expedient, a lessee is permitted to elect not to separate non-lease components and
instead account for all components as a lease; and
additional disclosure requirements.
The directors expect that the adoption of AASB 16 will result in lease assets and liabilities being recognised on
balance sheet and a change in how related expenses are incurred. The financial impact of this has not yet been
determined.
CPT Global Limited – Annual Report
45
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
2.
PARENT INFORMATION
The following information has been extracted from the books and records of the parent and has been prepared in
accordance with Accounting Standards.
STATEMENT OF FINANCIAL POSITION
ASSETS
Current Assets
Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Non-Current Liabilities
Total Liabilities
EQUITY
Issued Capital
Reserves
Accumulated losses
Total Equity
STATEMENT OF COMPREHENSIVE INCOME
Total loss
Total comprehensive loss
Guarantees
2018
$'000
2017
$'000
381
4,915
5,296
2,392
214
2,606
12,227
1,608
(11,145)
2,690
2018
$'000
581
5,114
5,695
-
342
342
12,227
1,608
(8,482)
5,353
2017
$'000
(2,663)
(3,184)
(2,663)
(3,184)
CPT Global Limited has not entered into any guarantees, in the current or previous financial year, in relation to the
debts of its subsidiaries. Refer to Note 23 for details of bank guarantees in relation to leased offices.
3.
REVENUE
REVENUE
Services Revenue
Total Revenue
OTHER INCOME
Rent Income
Interest Income
Other Income
Total Other Income
2018
$'000
2017
$'000
31,031
31,031
27,159
27,159
45
2
10
57
50
5
15
70
CPT Global Limited – Annual Report
46
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
4.
PROFIT OR LOSS FOR THE YEAR
Profit or loss for the year also includes the following specific expense
items:
Finance costs:
Interest expense on borrowings
Total finance costs
Foreign currency translation losses
Occupancy expenses
Depreciation and amortisation of non-current assets
Defined superannuation contribution expense – Others
Defined superannuation contribution expense – KMP
5.
INCOME TAX (BENEFIT) / EXPENSE
Tax expense comprises:
Current tax
Deferred tax
Under/(over) provision of previous year
The prima facie tax on losses before income tax is reconciled to the
income tax as follows:
Prima facie tax on losses before income tax at 30% (2017: 30%)
Tax effect of
Goodwill impairment
Foreign exchange differences arising on consolidation
Tax on overseas income at a different rate
Other non-allowable items
Current year tax losses not brought to account
Unrealised foreign currency exchange profit/(loss)
Under provision of previous year
Non-deductible interest expense
Income tax expense attributable to the entity
2018
$'000
2017
$'000
260
260
42
821
62
192
109
2018
$'000
483
(46)
27
464
244
244
194
971
66
213
153
2017
$'000
(43)
(123)
307
141
373
(398)
-
85
46
(20)
110
(377)
27
220
464
-
9
22
(11)
135
78
306
-
141
The applicable weighted average effective tax rates are as follows:
37%
11%
CPT Global Limited – Annual Report
47
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Notes to the Financial Statements
Year Ended 30 June 2018
6.
DIVIDENDS PAID OR PROVIDED FOR ON ORDINARY SHARES
(a) Dividends paid during the year
Current year interim
Franked dividends (0.0c per share) (2017: 0.0c per share)
Prior year final
Franked dividends (0.0c per share) (2017: 0.0c per share)
(b) Dividends proposed and not recognised as a liability
Franked dividends (0.25c per share) (2017: 0.0c per share)
(c) Franking credit balance
Balance of franking account at year end adjusted for franking credits
arising from:
Franking debits arising from payment of proposed dividends
7.
CASH AND CASH EQUIVALENTS
Cash at bank
Reconciliation of cash
Cash at the end of the financial year as shown in the statement of cash
flows is reconciled to items in the statement of financial position as
follows:
Cash and cash equivalents
2018
$'000
2017
$'000
-
-
-
93
-
-
-
-
2,300
2,300
2,427
2,427
2018
$'000
2017
$'000
1,440
1,656
1,440
1,440
1,656
1,656
CPT Global Limited – Annual Report
48
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Notes to the Financial Statements
Year Ended 30 June 2018
8.
TRADE AND OTHER RECEIVABLES
CURRENT
Trade receivables
Provision for impairment
Borrowings
Other receivables
Notes
8(a)
15(a)
2018
$'000
4,715
(67)
4,648
193
2
4,843
2017
$'000
5,569
-
5,569
-
2
5,571
(a) Trade receivables are non-interest bearing and generally on 30 day terms. The average credit period on
rendering of services is 64 days (2017: 72 days). An impairment of $67k (2017: $nil) has been recognised
in trade receivables as detailed below.
Before accepting new customers, the Group assesses the creditworthiness of the potential client using information
provided by independent rating agencies, publicly available information and its own trading record. The Group’s
client portfolio consists of leading blue chip companies, Fortune Global 500 companies and Government
departments within Australia. The profile of the trade receivable balance as at the reporting date is as follows:
Of the trade receivable balance at the end of the reporting period, $421k (2017: $1,522k) and $429k (2017: $110k)
are due from two leading banking institutions in Australia with S&P credit ratings of AA- and BBB+ respectively.
$1,112k (2017: $1,447k) is due from an Australian federal government agency and $1,108k (2017: $334k) from a
global financial organisation headquartered in New York with an S&P credit rating of A-1. All these receivables were
collected subsequent to year end.
There are no other customers who represent more than 5% of the total balance of trade receivables.
Of the trade receivables balance at the end of the reporting period, a concentration of $2,737k (57%) relates to
Australia (2017: $4,069k (75%)). The remaining amounts are not individually significant.
Trade receivables that are past due and are impaired
Included in the trade receivables balance is a debtor with a carrying amount of $78k (2017: $nil) which is past due
at the end of the reporting period. A provision for impairment of $67k was recorded at year end to recognise
management’s assessment that this amount is unlikely to be recovered due to a dispute about the measurement of
the benefits realised which has been complicated by a change in ownership at the client.
Trade receivables that are past due but not impaired
Included in the trade receivable balance are debtors with a carrying amount of $247k (2017: $130k) in the group
which are past due at the end of the reporting period but have not been provided for as there has not been a
significant change in credit quality and the amounts are still considered recoverable. Of the overdue balance, $235k
(2017: $112k) relates to a client with an S&P credit rating of A-1 with whom the Group has traded with for more
than one year with no history of delinquency. The nature of the client, namely a global financial institution gives
further confidence that these past due balances are not impaired. The Group does not hold any collateral over
these balances.
The ageing analysis of trade receivables is:
2018
$'000
2017
$'000
1-3 months
Within initial trade terms
325
4,323
4,648
130
5,439
5,569
CPT Global Limited – Annual Report
49
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
8.
TRADE AND OTHER RECEIVABLES (Cont.)
The carrying value of trade and other receivables approximates its fair value. Trade and other receivables are
recoverable within 12 months, hence the effects of discounting is immaterial.
9.
UNBILLED REVENUE (CURRENT)
Unbilled revenue
Provision for impairment
Total
2018
$'000
2,350
67
2,283
2017
$'000
792
-
792
Unbilled revenue represents amounts relating to revenue recognised in accordance with the accounting policies
detailed in Note 1(c) that had not been invoiced to the customer as at the end of the reporting period. Included in
the Group’s unbilled revenue balance is $nil (2017: $nil) relating to revenue that was recognised more than 12
months prior to the end of the reporting period. The balance has increased by $1.5m due to 2 risk/reward contracts
in progress in North America at year end with WIP of $1.9m. At 30 June 2017, the WIP relating to risk/reward
contracts was only $0.1m. The directors expect these balances to be billed in full in 2019.
The provision for impairment of unbilled revenue relates to the same client to which the trade receivable impairment
described in Note 8 relates. It is management’s assessment that this amount is unlikely to be recovered due to a
dispute about the measurement of the benefits realised which has been complicated by a change in ownership at
the client.
10. OTHER CURRENT ASSETS
Prepayments
2018
$'000
240
240
2017
$'000
103
103
Prepayments consists of insurance policies, licence fees, subscriptions and other expenses.
11.
INTERESTS IN SUBSIDIARIES
Name
Country of incorporation
CPT Global Ltd
CPT Global GmbH
CPT Global Inc
CPT Global Consulting Corp
CPT Global France
CPT Global Australia Pty Ltd
CPT Global International Pty Ltd
CPT Global Pte Ltd
CPT Global SRL
CPT Consultoria Global Em Informalica
Ltda
United Kingdom
Germany
USA
Canada
France
Australia
Australia
Singapore
Italy
Brazil
Percentage of equity &
voting interest held by the
economic entity
2018
2017
%
100
100
100
100
100
100
100
100
100
100
%
100
100
100
100
100
100
100
100
100
100
There are no known restrictions on the transfer of cash or assets within the group,
No subsidiaries were acquired or sold during the financial year.
CPT Global Limited – Annual Report
50
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
12.
PROPERTY, PLANT AND EQUIPMENT
Motor vehicles
At cost
Disposals
Accumulated depreciation
Office equipment
At cost
Disposals
Accumulated depreciation
Furniture, fixtures and fittings
At cost
Disposals
Accumulated depreciation
Improvements
At cost
Disposals
Accumulated depreciation
Leased plant and equipment
At cost
Disposals
Accumulated depreciation
Total property, plant and equipment
2018
$'000
108
(75)
(33)
-
254
(149)
(88)
17
64
(60)
(4)
-
39
(39)
-
-
18
(18)
-
-
17
2017
$'000
108
-
(75)
33
254
-
(244)
10
64
-
(64)
-
39
-
(39)
-
18
-
(18)
-
43
CPT Global Limited – Annual Report
51
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
12.
PROPERTY, PLANT AND EQUIPMENT (continued)
(a) Reconciliations
Reconciliations of the carrying amounts of property, plant and
equipment at the beginning and end of the current financial year.
2018
$'000
2017
$'000
Motor vehicles
Cost at beginning of year
Purchases
Disposals
Movements in exchange rate
Cost at end of year
Accumulated depreciation at beginning of year
Depreciation and effects of movements in exchange rate
Write back of accumulated amortisation on disposals
Accumulated depreciation at end of year
Carrying amount
Office Equipment
Cost at beginning of year
Disposals
Effects of movements in exchange rate
Cost at end of year
Accumulated depreciation at beginning of year
Depreciation and effects of movements in exchange rate
Write back of accumulated amortisation on disposals
Accumulated depreciation at end of year
Carrying value
Furniture, fixtures and fittings
Cost at beginning of year
Disposals
Effects of movements in exchange rate
Cost at end of year
Accumulated depreciation at beginning of year
Write back of accumulated amortisation on disposals
Depreciation
Accumulated depreciation at end of year
Carrying amount
108
-
75
-
33
(75)
42
(33)
-
254
(149)
-
105
(244)
7
149
(88)
17
64
(60)
-
4
(64)
60
-
(4)
-
116
-
(8)
108
(70)
(5)
-
(75)
33
253
1
254
(236)
(8)
(244)
10
64
-
64
(64)
-
(64)
-
CPT Global Limited – Annual Report
52
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
12.
PROPERTY, PLANT AND EQUIPMENT (continued)
Improvements
Cost at beginning of year
Disposals
Cost at end of year
Accumulated depreciation at beginning of year
Write back of accumulated amortisation on disposals
Cost at end of year
Carrying amount
Leased plant and equipment
Cost at beginning of year
Disposals
Cost at end of year
Accumulated depreciation at beginning of year
Write back of accumulated amortisation on disposals
Accumulated depreciation at end of year
2018
$'000
2017
$'000
39
(39)
-
(39)
39
(39)
-
18
(18)
18
(18)
18
(18)
39
-
39
(39)
-
(39)
-
18
18
(18)
(18)
Carrying amount
-
-
During the financial year, the lease on our head office in Melbourne expired and a new office was leased. Disposals
of office equipment, furniture, fixtures and fittings and leased plant and equipment are the head office assets which
were not taken to the new office. All these assets were fully depreciated.
CPT Global Limited – Annual Report
53
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
13.
INTANGIBLE ASSETS
Goodwill at cost
Accumulated impairment losses
Total goodwill
Intellectual Property at cost
Software at cost
Disposals
Write back of accumulated amortisation on disposals
Accumulated amortisation
Total software
Total intangible assets
Year ended 30 June 2017
Balance at the beginning of the year
Impairment charge
Amortisation charge
Year ended 30 June 2018
Balance at the beginning of the year
Impairment charge
Amortisation charge
2018
$'000
9,659
(5,502)
4,157
75
818
(68)
68
(680)
70
4,302
2017
$'000
9,659
(5,502)
4,157
75
818
-
-
(702)
116
4,348
Goodwill
$'000
Intellectual
Property
$'000
Software
$'000
4,157
-
-
4,157
4,157
-
-
4,157
75
-
-
75
75
-
-
75
162
-
(46)
116
116
-
(46)
70
Intangible assets other than goodwill and intellectual property have finite useful lives. The current amortisation
charges for intangible assets are included under depreciation and amortisation expense per the statement of
comprehensive income. Goodwill and intellectual property have indefinite useful lives. These have been assessed as
having indefinite useful lives because these intangible assets arose on the acquisition of businesses purchased as
going concerns. These businesses continue to be operated within the CPT Global Group and there are no plans to
cease any part of these operations.
Goodwill is allocated to cash-generating units, based on the Group’s reporting segment.
Australian Segment
2018
$’000
4,157
4,157
2017
$’000
4,157
4,157
CPT Global Limited – Annual Report
54
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
13.
INTANGIBLE ASSETS (continued)
The recoverable amount of the cash-generating units is determined based on value-in-use calculations. Value-in-
use is calculated based on the present value of the projected cash flows from that cash-generating unit over 5 years;
periods beyond 5 years have been extrapolated using the terminal value growth rate of 4.0% (2017: 4.0%).
Key Assumptions
The following key assumptions were used in determining the recoverable amount of goodwill:
Discount rate
Gross Margin
Sales Growth
Australian Segment
20.0%
20.0%
25.9%
25.7%
19.2%
2018
2017
2018
2017
2018
2017
9.1%
Management has based the value-in-use calculations on budgets and estimates for the CGU. The value-in-use is
most sensitive to the following assumptions:
- Discount rate;
- Gross profit margins;
- Sales growth rates;
- Terminal growth rates; and
- Corporate costs.
Discount rate – the discount rate is a pre-tax rate and reflects the risks associated with a particular segment.
Gross profit margins – values assigned reflect past experience, margins on existing contracts and analysis of the
market conditions.
Sales growth rates – reflects management’s expectations of revenue growth in the context of the Group’s
Australian market strategy.
Terminal growth rates – reflect the managements expectation of revenue and profit growth in the periods
beyond the 5 year forecast and are based on expected growth during the forecast period, long term historical
growth, operating leverage and level of fixed and variable costs.
Corporate costs – corporate costs are allocated to the CGU based upon the CGU’s proportional contribution to the
revenue of the Group.
14.
TRADE AND OTHER PAYABLES
CURRENT
Trade payables
Sundry payables and accrued expenses
Annual leave provision
Unearned revenue
2018
$'000
2017
$'000
3,418
2,170
588
526
6,702
3,642
1,690
667
8
6,007
Due to the short-term nature of these payables, their carrying value is assumed to approximate to their fair value.
There are no financial guarantees in place other than the bank guarantee for the head office lease as disclosed in
Note 23.
CPT Global Limited – Annual Report
55
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
15.
BORROWINGS
CURRENT
Secured borrowings
Unsecured borrowings
Total borrowings
Unutilised financing facilities
Credit facility
Amount secured utilised
Amount unsecured utilised
Note
15(a)
15(b)
15(a)
15 (b)
2018
$'000
-
535
535
2017
$'000
1,640
-
1,640
6,200
-
(535)
5,665
5,000
(1,640)
-
3,360
(a) The parent entity has a debtors financing facility in place. The facility is secured by a first registered
company charge (mortgage debenture) over the carrying value of the total assets of the parent entity,
which totalled $5,296k at the end of the reporting period. Interest is charged at a 5.5% margin above the
90 day Bank Bill Swap Rate. The maximum facility is $5m with the available facility based on the value of
the Australian debtor book. At 30 June 2018, the available funding under the facility was $1.1m.
(b) The parent entity entered into a $1.2m export contract loan agreement on 23 February 2018 with Efic. The
loan is available to be drawn until 31 October 2018 and is repayable by 31 January 2019. Interest is charged
at BBSY plus a margin of 6% and a commitment fee of 1% is payable on the undrawn facility. Each
subsidiary of the parent is a guarantor of the loan. There is no other security attached to the loan.
16.
TAX
LIABILITIES
Current
Current tax liability
Non Current
Deferred tax liabilities comprise:
Prepayments
Section 481 tax adjustment
Unrealised foreign exchange gain
The section 481 tax adjustment arose in the 2015 financial year when
we converted from a cash basis to an accruals basis of calculating
tax in the USA. The deferred tax liability is realised over 4 years.
Reconciliation of deferred tax liabilities
Opening balance
Credited to the statement of comprehensive
income
Credited to the statement of comprehensive Income as current tax
Closing balance
2018
$'000
2017
$'000
578
2
3
6
173
182
233
-
(51)
182
4
212
17
233
437
6
(210)
233
CPT Global Limited – Annual Report
56
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
16. TAX (continued)
ASSETS
Non Current
Deferred tax assets comprise:
Foreign currency losses
Borrowing costs
Employee entitlements
Accruals
Property, plant & equipment
Income losses
Capital losses
Reconciliation of deferred tax assets
Opening balance
Debited/(Credited) to the statement of comprehensive income
5
Closing balance
2018
$'000
2017
$'000
346
361
459
79
4
-
10
122
167
522
109
5
142
-
1,259
1,067
2018
$'000
1,067
192
1,259
2017
$'000
1,400
(333)
1,067
The future income tax benefit of the deferred tax assets will only be realised if the conditions of deductibility set out
in Note 1(b) occur. Deferred tax assets not brought to account for which the benefits will only be realised if the
conditions for deductibility set out in Note 1(b) occur amount to $1,054,806 (2017: $944,811). CPT Global’s tax losses
that have not been brought to account are generally not subject to restrictions. Of the losses not brought to account
in FY18 97% relate to the UK.
17.
PROVISIONS
Current
Employee benefits – Long Service Leave
Total Current Provisions
Non-Current
Employee benefits – Long Service Leave
Total Non-Current Provisions
Total Provision
2018
$'000
810
810
2017
$'000
982
982
131
131
91
91
941
1,073
A provision has been recognised for employee entitlements relating to long service leave. In calculating the present
value of future cash flows in respect of long service leave, the probability of long service leave is being taken is
based on historical data. The measurement and recognition criteria relating to employee benefits have been
included in Note 1(l) to these financial statements.
CPT Global Limited – Annual Report
57
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
17.
PROVISIONS (continued)
Analysis of Total Provisions
Long Service Leave
Total
Opening balance at 1 July 2017
Provided for during the year
Taken during the year
Balance at 30 June 2018
18.
ISSUED CAPITAL
(a) Issued and paid up capital
37,318,525 (2017: 37,318,525)
fully paid ordinary shares
$'000
1,073
95
(227)
941
$'000
1,073
95
(227)
941
2018
$’000
12,228
12,228
2017
$’000
12,228
12,228
2017
(b) Movements in shares on issue
2018
Beginning of the financial year
New shares issued
End of the financial year
Number of
shares
37,318,525
-
37,318,525
$’000’
Number of
shares
12,228
-
37,177,220
141,305
12,228
37,318,525
$’000
12,195
33
12,228
(i) Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to
the number of shares held. At shareholders’ meetings each ordinary share is entitled to one vote when a poll
is called, otherwise each shareholder has one vote on a show of hands. During the year ended 30th June 2018
no ordinary shares were bought back under the on market buyback (2017: Nil). Ordinary shares have no par
value.
(ii) The on market buyback commenced on the 27th August 2002 with 3,000,000 shares being the maximum to
be bought back of which 2,413,905 were outstanding as at 30 June 2018.
(c) Options
(i)
For information relating to the CPT Global Limited employee option plan, including details of options issued,
exercised and lapsed during the financial year and the options outstanding at year-end, refer to Note 22
Share based payments.
(ii) For information relating to share options issued to key management personnel during the financial year, refer
to the Note 22 Share Based Payments.
CPT Global Limited – Annual Report
58
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
18.
ISSUED CAPITAL (Continued)
(d) Capital Management
Management controls the capital of the group in order to maintain an appropriate debt to equity ratio, provide
shareholders with adequate returns and ensure that the group can fund its operations and continue as a going
concern.
The Group does not currently have significant debt capital employed in the business as indicated in the following
table. Management effectively manages the group’s capital by assessing the group’s financial risks and adjusts its
capital structure in response to changes in these risks and in the market. These responses include the management
of debt levels, distributions to shareholders, share buy-backs and share issues.
There have been no changes in the strategy adopted by management to control the capital of the group since the
prior year. This strategy is to ensure that the group’s gearing ratio remains at an appropriate level between 0% and
50%.
The gearing ratios for the year ended 30 June 2018 and 30 June 2017 are as follows:
Total borrowings
Less cash and cash equivalents
Net debt
Total equity
Total capital employed
Gearing ratio
2018
$’000
535
(1,440)
(905)
5,446
5,446
0%
2017
$’000
1,640
(1,656)
(16)
4,625
4,625
0%
A bank guarantee facility provided by the Company’s banker is cash backed in the amount of $191k. The cash is not
available for CPT Global to utilise until the bank guarantee is returned to our Banker at the end of the lease. The
lease expires in May 2021.
19.
RESERVES
(a) Foreign currency translation
The foreign currency translation reserve records exchange differences arising on translation of the financial
statements of foreign subsidiaries.
(b) Equity reserve
The equity reserve is a non-distributable reserve used to record share based payment expense.
(c) Analysis of items of other comprehensive income by each class of reserve
Foreign currency translation reserve
Exchange difference on translating foreign controlled entities
Movement in foreign currency translation reserve
Total other comprehensive income for the year
2018
$’000
2017
$’000
41
41
41
184
184
184
CPT Global Limited – Annual Report
59
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
20.
CASH FLOW INFORMATION
(a) Reconciliation of the profit/(loss) after tax to the net cash
flows from operations
Net profit/(loss)
Non-Cash Items
Depreciation and amortisation of non-current assets
Share based payment
Goodwill impairment
Changes in assets and liabilities
Decrease/(increase) in trade and term receivables
Increase in prepayments
(Increase)/decrease in work in progress
(Increase)/decrease in deferred tax asset
Increase/(decrease) in trade payables and accruals
Increase in income taxes payable
(Decrease)/increase in deferred tax liabilities
(Decrease)/increase in employee entitlements
Net cash flow from operating activities
2018
$'000
2017
$'000
780
(1,468)
62
-
-
66
-
-
966
(191)
(1,492)
(191)
839
576
(51)
(211)
1,087
(831)
(9)
1,134
103
(1,475)
21
26
93
(2,340)
There were no acquisitions or disposals of subsidiaries in the 2018 financial year.
(a) Changes in liabilities arising from financing activities
1 July 2017
$000
Cash flows
Non-cash changes
Re-classification
30 June 2018
$000
Short term borrowings
1,640
(1,297)
192
535
21.
EXPENDITURE COMMITMENTS
(a) Lease expenditure commitments
(i) Operating leases (non-cancellable):
Minimum lease payments
- not later than one year
- later than one year and not later than five years
2018
$'000
2017
$'000
151
343
494
259
-
259
Note:
The property lease is non-cancellable with a remaining term of 35 months. Rent is payable monthly in advance and
the amounts disclosed do not include GST. An option exists to renew the lease for a further period of 3 years.
CPT Global Limited – Annual Report
60
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
22. SHARE-BASED PAYMENTS
The following share-based payment arrangements existed at 30 June 2018:
Directors
Performance
Rights
Issue
date
Expiry
date
Exercise
Price
As at 1 July
2017
Granted
As at 30
June 2018
Forfeited/
Exercised/
transferred/
expired
(a)
(b)
29/11/16
29/11/19
$0.00
300,000
-
(300,000)
-
27/11/17
27/11/20
$0.00
-
300,000
800,000
800,000
-
(300,000)
800,000
800,000
(a) On 27 November 2017, at CPT Global’s Annual General Meeting, this tranche of performances were rights were
cancelled.
(b) On 27 November 2017, at the Company’s Annual General Meeting, 800,000 performance rights were granted to
directors to take up ordinary shares at an exercise price of $0.00 per share. The fair value of these performance
rights at the date of grant was $78k. The fair value has been calculated using a combination of the Monte Carlo
and American Binomial pricing methodologies for tranches using the following inputs:
Weighted average exercise price
Maximum life of right
Underlying share price
Expected share price volatility
Risk free interest rate
Dividend yield
$0.00
3 years
$0.16
68%
1.79%
0.0%
Share price volatility has been determined based on the historical volatility of CPT Global’s shares. As the exercise
price is $0.00, share price volatility does not have a material impact on the fair value of the performance rights.
500,000 of the performance rights were forfeited subsequent to year end on the resignation of David Lynch.
The issue of these performance shares in four tranches was contingent upon the following conditions being met:
No of Shares
to be Issued
Conditions to be Met
225,000
175,000
225,000
175,000
The highest quoted (buy) price for CPT Global shares reaching or exceeding $0.25 for 5 consecutive business
days during the period 27 November 2017 and 30 June 2018 (both dates inclusive)
The Company’s after tax profit (as reported in the Company’s 2018 annual report) reaching or exceeding
$0.8m for the 2018 fiscal year
The highest quoted (buy) price for CPT Global shares reaching or exceeding $0.40 for 5 consecutive business
days during the period 1 July 2018 and 30 June 2019 (both dates inclusive)
The Company’s after tax profit (as reported in the Company’s 2019 annual report) reaching or exceeding
$2.0m for the 2019 fiscal year
CPT Global Limited – Annual Report
61
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
22. SHARE-BASED PAYMENTS (cont.)
The performance rights hold no voting or dividend rights, are not transferrable and will lapse in the event of the
resignation of a director. At the date of this report, all directors in receipt of the performance options remain
employed by CPT.
An amount of $26k pertaining to these entitlements has been included in the statement of comprehensive income
for the period.
Information with respect to the number of performance rights granted is as follows:
2018
2017
Number of
options
Weighted
average exercise
price
Number of
options
Weighted
average exercise
price
300,000
800,000
-
-
800,000
-
800,000
$
0.00
0.00
-
-
0.00
0.00
0.00
450,000
300,000
-
-
300,000
150,000
300,000
$
0.17
0.00
-
-
0.00
0.17
0.00
Outstanding at the
beginning of the year
Granted
Forfeited
Exercised
Cancelled
Expired
Outstanding at year end
At 30 June 2018, there were NIL (2017: NIL) performance rights vested but not exercised.
There are no other options or performance rights granted by CPT Global Limited to any other party. Options do
not confer on the holder any right to vote or participate in the dividends of the economic entity and are not
transferable.
23.
CONTINGENT LIABILITIES
Guarantees
CPT Global Limited has provided a guarantee $123k (2017: $191k) to third parties in relation to its performance and
obligations in respect of property lease rentals. The guarantee is secured against a term deposit equal to the value
of the guarantee. The guarantee is for the term of the lease. The guarantee for lease covers the next 35 months.
24.
EVENTS AFTER THE REPORTING PERIOD
On 29th August 2018 CPT Global Limited announced its intention to extend the on-market share buy back for a
further twelve months until 28th August 2019. A maximum of 3,000,000 shares may be bought back during the
buyback period.
On 17 August 2018, David Lynch (Chief Executive Officer Australia and Asia) resigned.
CPT Global Limited – Annual Report
62
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
25.
EARNINGS PER SHARE
(a) The following reflects the income and share data used in the
calculations of basic and diluted earnings per share:
Net profit / (loss)
Adjustments:
Earnings used in calculating basic and diluted earnings per share
Weighted average number of ordinary shares used in calculating basic
earnings per share
Weighted average number of options outstanding
Adjusted weighted average number of ordinary shares used in
calculating diluted earnings per share
26.
AUDITORS' REMUNERATION
Amounts received or due and receivable by ShineWing Australia and
Mazars London for:
an audit or review of the financial report of the parent and any
other entity in the Group
other services in relation to the entity and any other entity in the
Group
- tax compliance
- other services
2018
$'000
780
-
780
2017
$'000
(1,468)
-
(1,468)
Number of
shares
Number of
shares
37,318,525
591,667
37,318,525
300,000
37,910,192
37,618,525
2018
$'000
2017
$'000
161
147
26
-
27
1
Other services relate to accounting and taxation services.
27.
KEY MANAGEMENT PERSONNEL COMPENSATION
(a) Names and positions held of economic entity key management personnel in office at any time during
the financial year are:
Key Management Person
Fred S Grimwade
Alan Baxter
Gerry Tuddenham
David Lynch
Grant Sincock
Luke Tuddenham
Position
Non-executive Chairman
Non-executive Director
Managing Director
Chief Executive Officer Australia and Asia(resigned 17 August 2018)
Company Secretary and Chief Financial Officer
President North America
CPT Global Limited – Annual Report
63
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2018
27.
KEY MANAGEMENT PERSONNEL COMPENSATION (continued)
From 1 July 2017 Kevin Akom took on the role of General Manager – Strategic Client Relationships within the
Australian region. This new role and its responsibilities do not meet the definition of Key Management Person and
Kevin is not be included in the Key Management Person disclosures from 1 July 2017.
b) Key Management Personnel Compensation
Refer to the Remuneration Report contained in the Director’s Report for details of the remuneration paid to each
member of the Group’s key management personnel for the year ended 30 June 2018.
The totals of remuneration paid to key management personnel of the company and the Group during the year are
as follows:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share based payments
28.
RELATED PARTY DISCLOSURES
(a) Controlling Relationships
2018
$000
2,081
109
18
33
2017
$000
2,145
143
19
4
2,242
2,313
Interests in subsidiaries are set out in note 11. The parent entity and the ultimate controlling party of the group is
CPT Global Limited. All transactions within the group were done on an arm’s length basis.
(b) Key management personnel
Disclosures relating to key management personnel are set out in the Remuneration Report and note 27. Key
management personnel include the board of directors and key executives who are accountable and responsible for
the operational, management and strategic direction of the Group.
(c) Transactions with related parties
During the financial year there were no transactions with related parties.
29.
OPERATING SEGMENTS
Identification of Reportable Segments
CPT Global Limited has identified its operating segments based on the internal reports that are reviewed and used
by the Board of Directors (chief operating decision makers) in assessing the performance and determining the
allocation of resources. The reportable segments disclosed are based on a geographical basis.
Reportable segments disclosed are based on aggregating operating segments where the segments are considered
to have similar economic characteristics and are also similar with respect to the following:
-
-
-
services provided by the segment;
the type of customer for the services provided; and
external regulatory requirements
CPT Global Limited – Annual Report
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Notes to the Financial Statements
Year Ended 30 June 2018
29.
OPERATING SEGMENTS (continued)
Types of Services by Segment
Below outlines the major lines of services provided to customers for each reportable segment:
Australia
- Digital Consulting
-
-
Capacity Planning
Cost Reduction Sustainable
- Mainframe & Midrange performance
-
-
Project & Program management
Technical Support services
- Management IT (MIT)
- Management, Functional & Automation Testing
Europe
- Mainframe & Midrange performance
-
Technical Support services
North America
- Mainframe & Midrange performance
- Management, Functional & Automation Testing
Basis of accounting for purposes of reporting by reportable segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors with respect to operating segments are
determined in accordance with accounting policies that are consistent to those adopted in the annual financial
statements of CPT Global Limited.
Inter-segment transactions
Segment revenues, expenses and results exclude transfers between segments. The prices charged on
intersegment transactions are the same as those charged for similar services to parties outside of the Group on
an arm’s length basis. These transfers are eliminated on consolidation.
Segment Assets and Liabilities
Segment assets and liabilities reported are based on the internal reports reviewed by the Board of Directors.
Assets include trade debtors and unbilled revenue balances. Liabilities include trade creditors and accruals.
Unallocated items
The Board of Directors review segment performance to only the gross profit level. All other items of revenue and
expenses are not allocated to operating segments as they are not considered part of the core operations of any
segment. Liabilities are not reported by segment for internal reporting purposes for the Board of Directors and
therefore have been treated as unallocated items.
CPT Global Limited – Annual Report
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Notes to the Financial Statements
Year Ended 30 June 2018
29.
OPERATING SEGMENTS (continued)
Segment Performance
Australia
Europe
North America
Consolidated
2018
2017
2018
2017
2018
$’000
$’000
$’000
$’000
$’000
2017
$’000
2018
2017
$’000
$’000
REVENUE
External Sales
20,798
19,787
1,294
1,317 8,939
6,055
31,031
27,159
Total Group Revenue
31,031
27,159
Segment Gross Profit before tax
5,261
5,172
351
270 4,405
3,134
10,075
8,646
Reconciliation of segment result to
group profit/loss before tax
Goodwill impairment
Unallocated Items
- Overheads
Profit/ (Loss) before tax
Segment Assets
(8,831)
(9,973)
1,244
(1,327)
Australia
Europe
North America
Consolidated
2018
2017
2018
2017
2018
2017
2018
2017
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Segment Assets
3,085
4,409
485
340
3,554
1,610
7,124
6,359
Segment asset increases for the period:
-
Capital Expenditure
-
-
-
-
-
-
-
-
3,085
4,409
485
340
3,554
1,610
7,124
6,359
Reconciliation of segment assets to group
assets
Unallocated assets:
-
-
Goodwill
4,232
4,232
-
-
Property, plant & equipment
- Other Assets
Total Group Assets
4,232
4,232
87
159
2,941
2,830
14,384
13,580
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Notes to the Financial Statements
Year Ended 30 June 2018
29.
OPERATING SEGMENTS (Continued)
Segment Liabilities
Australia
Europe
North America
Consolidated
2018
$’000
5,396
2017
$’000
4,435
2018
$’000
398
2017
$’000
2018
$’000
2017
$’000
2018
$’000
746
1,434
1,802
7,228
2017
$’000
6,982
-
-
5,396
4,435
-
398
-
-
-
-
-
746
1,434
1,802
7,228
6,982
1,532
1,893
-
-
-
-
-
-
178
-
79
-
1,710
1,972
-
-
8,936
8,954
Segment Liabilities
Segment liability increases
for the period:
-
Reconciliation of segment
liabilities to group liabilities
Unallocated liabilities:
-
Provisions
- Other Liabilities
Total Group Liabilities
Major Customers
CPT Global Limited provides services to a range of clients in the financial services and telecommunications industries.
CPT’s top 10 clients account for 80% of the group’s global revenue (2017: 80%), totalling $24,950k (2017: $21,845k).
Two of CPT’s client’s contributed more than 10% of the annual revenue (26% - a major Australian bank and 16% -
an Australian government department).
30.
FINANCIAL INSTRUMENTS
Financial Risk Management
The group’s financial instruments consist mainly of deposits with banks, accounts receivable and payable.
The main purpose of non-derivative financial instruments is to raise finance for group operations.
Derivatives may be used by the Group for hedging purposes. Such instruments include forward exchange and
currency option contracts. The Group does not speculate in the trading of derivative instruments.
The board of directors is responsible for monitoring and managing financial risk exposures of the Group. The board
reviews the effectiveness of internal controls relating to interest rate risk and foreign currency risk. The overall risk
management strategy seeks to assist the Group in meeting its financial targets, while minimising potential adverse
effects on financial performance in regard to financial and currency rate risk.
(i) Financial Risks
The main risks the group is exposed to through its financial instruments are interest rate risk, foreign currency risk,
liquidity risk and credit risk.
Interest rate risk
The Group’s exposure to interest rate risk, which is the risk that a financial instrument’s value and cash flows will
fluctuate as a result of changes in market interest rates and the effective weighted average interest rates on classes
of financial assets and financial liabilities, is as follows:
CPT Global Limited – Annual Report
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Notes to the Financial Statements
Year Ended 30 June 2018
30.
FINANCIAL INSTRUMENTS (Continued)
Economic
Entity
Floating interest
rate
Fixed interest
rate maturing in
1 to 5 years
Non-interest
bearing
Total carrying
amount as per
statement of
financial
position
Weighted
average effective
interest rate
2018
$'000
2017
$'000
2018
$'000
2017
$'000
2018
$'000
2017
$'000
2018
$'000
2017 2018
$'000
%
2017
%
(i) Financial assets
Cash and cash equivalents
1,440
1,656
Trade receivables
Total financial assets
(ii) Financial liabilities at
amortised cost
Bank overdrafts
Trade and sundry payables
Borrowings
-
-
1,440
1,656
-
-
535
-
-
1,640
Total financial liabilities
535
1,640
-
-
-
-
-
-
-
-
-
-
1,440
1,656
0.17
0.25
- 4,843
5,571
4,843
5,571
- 4,843
5,571
6,283
7,227
-
-
-
-
-
5,588
-
-
5,322
-
-
5,588
535
-
5,322
1,640
10.3
9.0
5,588
5,322
6,123
6,962
Interest rate risk arises on cash and cash equivalents and bank overdrafts. Interest rate risk is managed by
monitoring and reviewing cash flow forecasts and the trade receivables balance of the Group.
Interest rate sensitivity analysis
The sensitivity analysis below has been determined based on the exposure to interest rates for cash and cash
equivalents as this is the only financial instrument materially exposed to floating interest rates. The analysis is
based on actual monthly borrowing amounts throughout the year, as reported to management, with the stipulated
change taking place at the beginning of the financial year and held constant throughout the reporting period. A
100 basis point increase or decrease has been used and represents management’s assessment of the possible
changes in interest rates. At the reporting date, if interest rates had been 100 basis points higher or lower and all
other variables were held constant, the Group’s profit before income tax would increase by $4k and decrease by
$4k (2017: increase by $9k and decrease by $9k).
Foreign currency risk
The group is exposed to fluctuations in foreign currencies arising from the sale and purchase of services in
currencies other than the group’s functional currency, and the translation of foreign subsidiary results on
consolidation.
CPT Global Limited – Annual Report
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Notes to the Financial Statements
Year Ended 30 June 2018
30.
FINANCIAL INSTRUMENTS (Continued)
The carrying amount of the Group’s foreign currency denominated monetary assets and monetary liabilities at the
end of the reporting period is as follows:
Economic Entity
Liabilities
Assets
Australian dollars
Brazillian real
US dollars
Sterling
Euro
Canadian dollars
Singapore dollars
2018
$'000
-
169
-
-
68
-
-
2017
$'000
-
159
-
-
36
-
-
2018
$'000
-
266
-
-
43
-
-
2017
$'000
-
175
-
-
117
-
-
The amounts disclosed above in relation to Australian dollars relate to intercompany payables and receivables in
each of the foreign subsidiaries whose functional currency is not Australian dollars.
Foreign currency sensitivity analysis
The Group is mainly exposed to US dollars, Sterling, Euros and CAD.
The following table details the Group’s sensitivity to a 10% increase and decrease in the Australian dollar against
the relevant foreign currencies. 10% is the sensitivity rate used as it represents management’s assessment of the
possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency
denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency
rates. The sensitivity analysis includes external assets and liabilities as well as loans, receivables and payables
balances with foreign subsidiaries where the denomination of the balance is in a currency other than the functional
currency of the lender or borrower. A positive number indicates an increase in profit or loss and other equity
where the Australian dollar strengthens against the respective currency. For a weakening of the Australian dollar
against the respective currency there would be an equal and opposite impact on the profit and other equity, and
the balances below would be negative.
Economic Entity
USD Impact
Sterling Impact
Euro Impact
CAD Impact
Profit or loss
Other equity
2018
$'000
41
(225)
2017
$'000
(52)
(259)
2018
$'000
(42)
(225)
2017
$'000
(31)
(174)
2018
$'000
6
(85)
2017
$'000
(19)
(85)
2018
$'000
21
16
2017
$'000
(28)
(5)
The above impacts are mainly attributable to the exposure of intercompany payables, receivables and loan
balances at the end of the reporting period.
CPT Global Limited – Annual Report
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Notes to the Financial Statements
Year Ended 30 June 2018
30.
FINANCIAL INSTRUMENTS (Continued)
Liquidity risk
Liquidity risk is the risk the group will not be able to meet its financial obligations as they fall due.The group
manages liquidity risk by monitoring forecast cash flows and ensuring that adequate unutilised borrowing facilities
are maintained. Included in Note 15 is a listing of additional undrawn facilities that the Group has at its disposal
to further reduce liquidity risk. The borrowing facilities may be drawn at any time and may be terminated by the
financing provider with three months’ notice. All facilities are subject to annual review.
The table below analyses the Group’s financial liabilities. All such liabilities are classified as current and therefore
have contractual maturity within 12 months from the reporting date.
Trade payables
Sundry payables and accrued expenses
Borrowings
2018
$’000
3,418
2,170
535
6,123
2017
$’000
3,642
1,690
1,640
6,972
For details of expenditure commitments and maturity profile of the lease liability, refer to Note 21. The trade and
sundry payables listed above are due for payment within 3 months.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss
to the Group and essentially arises from holdings of cash and deposits and trade receivables as well as from the
parent’s potential obligations under the indemnity guarantee provided to banks. The risk is largely managed
through a policy of only dealing with creditworthy counterparties. Periodic assessments of debtor balances are
undertaken and provisions for impairment are recognised where appropriate.
The maximum credit risk exposure is the carrying value of cash and deposits and trade receivables as disclosed in
notes 7 and 8.
CPT Global Limited – Annual Report
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Directors’ Statement
The directors of the company declare that:
1.
the financial statements and notes, as set out on pages 30 to 70, are in accordance with the Corporations Act 2001
and:
a.
b.
comply with Australian Accounting Standards, which, as stated in accounting policy Note 1 to the financial
statements, constitutes explicit and unreserved compliance with International Financial Reporting Standards
(IFRS); and
give a true and fair view of the financial position as at 30 June 2018 and of the performance for the year
ended on that date of the company and economic entity.
2.
the Chief Executive Officer and Chief Finance Officer have each declared that:
a.
b.
c.
the financial records of the company for the financial year have been properly maintained in accordance with
section 286 of the Corporations Act 2001;
the financial statements and notes for the financial year comply with Accounting Standards; and
the financial statements and notes for the financial year give a true and fair view.
3.
in the directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as
and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Gerry Tuddenham
Managing Director
Melbourne, 25 September 2018
CPT Global Limited – Annual Report
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INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF CPT GLOBAL LIMITED AND CONTROLLED ENTITIES
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of CPT Global Limited (“the Company”) and Controlled Entities (“the Group”),
which comprises the consolidated statement of financial position as at 30 June 2018, the consolidated statement of
profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
a) giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its financial performance
for the year then ended; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our
report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (“the Code”) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How the matter was addressed during the audit
Impairment of Goodwill
Our procedures included, amongst others, the following:
Note 13
At 30 June 2018, the Group’s Statement of Financial
Position includes goodwill amounting to $4,157m
relating to the Australian CGU.
We have determined this is a key audit matter due to
the judgement required by management in preparing
a value in use model to satisfy the impairment test
as prescribed in AASB 136
• Enquired with management on the basis of
assumptions applied in the value in use model to
obtain an understanding of the key variables impacting
on each CGU;
• Obtained and evaluated the assumptions and
methodology applied in management’s value in use
calculation including but not limited to revenue
forecasts, discount rates and the allocation and
recoverability of corporate overheads to subsidiaries;
72
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Key Audit Matter
How the matter was addressed during the audit
Impairment of Assets, including the forecasting of
future cash flows and applying an appropriate
discount rate which inherently involves a high degree
of estimation and judgement by management.
• Performed sensitivity analysis on the key assumptions
and variables to determine various outcomes of the
value in use model in assessing whether certain CGUs
are impaired; and
Recognition and recoverability of Unbilled
Revenue
Note 9
At 30 June 2018 the Group’s Statement of Financial
Position includes $2.283m of unbilled revenue for
current projects.
Given the nature of the Group’s revenue there are
significant estimates and judgements incorporated in
management’s measurement of unbilled revenue
balances.
• Reviewed on the adequacy of the Group’s disclosures
about these assumptions to which the outcome of the
impairment test is most sensitive, that is, those that
have the most significant effect on the determination of
the recoverable amount of assets.
Our procedures included, amongst others, the following:
• Reviewed unbilled revenue balances to ensure that
amounts taken up as revenue are reasonable and
could be supported by signed contracts, project status
reports and timesheets;
• Performed an ageing analysis of unbilled revenue
balances; and
• Reviewed post year-end subsequent billings and
collections.
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information included in
the Group’s annual report for the year ended 30 June 2018, but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true and
fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
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Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit.
We identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud
is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
We obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
We evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the directors.
We conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to
continue as a going concern.
We evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them, all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance in
the audit of the financial report of the current period and are therefore the key audit matters. We describe these
matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
74
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Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 22 to 27 of the directors’ report for the year ended 30
June 2018.
In our opinion, the Remuneration Report of CPT Global Limited and Controlled Entities for the year ended 30 June
2018 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
ShineWing Australia
Chartered Accountants
Rami Eltchelebi
Partner
Melbourne, 25 September 2018
75
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Corporate Information
ACN 083 090 895
ABN 16 083 090 895
Directors
Fred Grimwade
(Non-executive Chairman)
Gerard (Gerry) Tuddenham
(Managing Director)
Alan Baxter
(Non-executive Director)
Company Secretary
Grant Sincock
Principal Registered Office
Level 3, 818 Bourke Street
Docklands VIC 3008
Telephone:
Internet:
+61 (0)3 9684 7900
www.CPTglobal.com
Auditors
ShineWing Australia
Level 10, 530 Collins Street
Melbourne VIC 3000
Share Register
Boardroom Pty Ltd
Level 12, 225 George Street
Sydney NSW 2000
Telephone:
Facsimile:
1300 737 760
+61 (0)2 9290 9600
Solicitors
Nicholson Ryan Lawyers
Bankers
ANZ Banking Group Limited
ASX Code
CGO
2018 Annual General Meeting
The Annual General Meeting of CPT Global Limited
members will be held on Monday 26th November
2018 at 11.30 am at Boardroom’s office at Level 7, 333
Collins Street, Melbourne, Victoria.
CPT Global on the Web
For an introduction to the company and access to company
announcements, descriptions of our core business, services
and careers, and our corporate governance policies and
procedures visit our website at www.CPTglobal.com
CPT Global Limited – Annual Report
76
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ASX Additional Information
Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows. The
information is current as at 14th of September 2018.
(a) Distribution of equity securities
The number of shareholders, by size of holding, in each class of share are:
Ordinary shares
Preference shares
Number of holders Number of shares Number of holders Number of shares
1
1,001
5,001
- 1,000
- 5,000
- 10,000
10,001
- 100,000
100,001
and over
The number of shareholders holding
less than a marketable parcel of shares
are:
61
309
154
255
46
825
42,519
849,022
1,201,378
8,411,406
26,814,200
37,318,525
234
372,677
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(b) Twenty largest shareholders
The names of the twenty largest holders of quoted shares are:
Listed ordinary shares
Number of shares
Percentage of ordinary shares
1
2
3
4
TUDDY SUPER PTY LTD
Sonda Fondo De Invesion Privado
CLAPSY PTY LTD
GNP NOMINEES
5 MR LUKE TUDDENHAM
6 MR VICTOR JOHN PLUMMER
7 MR PHILIP ADAM
8 MR FRED GRIMWADE
9 MR PAWEL REJ & MRS MIROSLAWA REJ
10 MR BEN TUDDENHAM
11 MR KEVIN AKOM
12 BNP PARIBAS NOMINEES PTY LTD
13 PETHOL (VIC) PTY LTD
14
FIVE TALENTS LIMITED
15 MR DAVID LYNCH
16 MRS ALISON BOLGER
17 MR NEVILLE HASKETT & MRS VICKI HASKETT
18 MRS JULIE ANN CAREY
19 MR MICHAEL LAZORIK
20 MR NIGEL SANDIFORD
8,582,356
2,664,993
2,421,764
2,159,089
842,955
812,413
752,782
718,200
665,317
643,526
565,013
515,183
500,000
482,369
417,458
362,550
355,000
326,000
300,000
224,219
23.0%
7.1%
6.5%
5.8%
2.3%
2.2%
2.0%
1.9%
1.8%
1.7%
1.5%
1.4%
1.3%
1.3%
1.1%
1.0%
1.0%
0.9%
0.8%
0.6%
24,311,187
65.1%
CPT Global Limited – Annual Report
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ASX Additional Information
(c) Shares held in escrow
As at 14th September 2018, there were no shares held in escrow.
(d) Substantial shareholders
The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations
Act 2001 are:
MR GERRY TUDDENHAM AND HIS ASSOCIATES (EXCLUDING HIS BENEFICIAL
INTEREST IN THE CPT TRUST)
GNP NOMINEES PTY LTD AS TRUSTEE FOR THE CPT TRUST
SONDA FONDO DE INVERSION PRIVADO
CLAPSY PTY LTD
(e) Voting rights
Number of Shares
8,586,356
2,159,089
2,664,993
2,421,764
All ordinary shares (whether fully paid or not) carry one vote per share without restriction. Performance rights do not carry
voting rights.
CPT Global Limited – Annual Report
78
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