CPT Global Limited
ABN 16 083 090 895
Annual Report
For the year ended 30 June 2020
+61 3 9684 7900
Info@cptglobal.com
www.cptglobal.com
1
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Chairman’s Statement
Dear Fellow CPT Global Shareholder,
Despite the recent global challenges of COVID-19 CPT finished the year in a strong financial position with the fourth quarter
being our most profitable for the 2020 financial year. CPT acted quickly to protect the health and safety of our staff and to
position the business for uncertain times by cutting costs including voluntary cuts to remuneration by senior staff and
Directors. However given that remote operation has always been a core part of CPT’s business model we were able to
transition seamlessly during the various lockdowns and have maintained and in many cases grown our presence at clients
during this difficult time. Due to our pre-emptive action and ongoing client focus CPT ended the year with almost 20%
more consultants engaged than the prior year end and this trend has continued. While overall revenue in 2020 was lower
than the prior year this masks a substantial turn-around in the performance of our Australian operations during the year
and continuing momentum in our North American business.
The Australian business started the year slowly with a relatively weak pipeline but through the year was able to add two
substantial new clients and also continued to build the scale of our Federal Government work. The fortunes of our Southern
region, which has traditionally been the backbone of CPT’s business and provides many of the skilled IT experts for our
international business, improved significantly. By year end monthly revenue from our Australian business had increased by
over 50% from the first half of the year and our new business pipeline was substantially stronger and more secure. In 2020
six of our ten largest clients were based in Australia of which two were new clients.
CPT’s international business continued to perform well primarily due to the continuing good performance of our US
operations particularly in the second half of the financial year. US monthly revenue in the 4th quarter was over 30% higher
than in the first half of the financial year. Revenue in Canada and Europe remained more subdued as a result of the
seemingly greater impact of COVID-19 on business in these regions.
While the business pipeline in the US remains strong the outlook is clouded by the potential impact of COVID-19 on our
client’s contract renewal decisions with revenue in Canada particularly under pressure. For the second year CPT’s largest
client was in the US and four of our top ten clients in 2020 were based in North America.
In Europe and Asia CPT continues to selectively target new business opportunities and again delivered another break-even
result while continuing to provide resources to our North American operations. Over the years CPT has worked for many
clients in Europe and Asia and our reputation there is strong so we can expect to be engaged where circumstances demand
our specialised services.
In 2020 our revenue fell by 12% to $24.9m. However CPT was still able to deliver net profit after tax of $0.9m (before a
goodwill impairment of $4.2m) which was in line with $1.0m in 2019. Our performance was assisted by cost reductions
implemented in response to COVID-19 and savings in travel costs due to the move to full remote operation. As a result of
our profit and good start to FY 2021 CPT will pay a final fully franked dividend of 1.25 cents per share as against last year’s
dividends totalling 0.75 cents per share. Our healthy operating cash flow ensured that CPT ended the financial year with an
improved cash position of $3.1m.
COVID-19 has accelerated the global use of technology, remote operation and online commerce which places CPT in a
strong position to assist clients navigate the digital world. Our strong reputation for delivering outcomes for clients, depth
of experience and long history of remote operation provide CPT with a great platform to grow our business and generate
improved returns for our shareholders.
Despite the current challenging global environment CPT starts the new financial year in a substantially improved position.
Our Australian business has successfully broadened its client base and developed a healthy business pipeline while we have
maintained activity in our international business. Based on our current positive momentum and consistent with past practice
CPT expects to pay a growing proportion of our earnings as dividends to shareholders. The challenges and changed
operating environment caused by COVID-19 have been very difficult for all and have imposed significant extra demands
and restrictions on our staff and their families. Accordingly I would particularly like to thank all of CPT’s staff and my fellow
directors including our tireless Managing Director, Gerry Tuddenham, for their commitment and dedication to the service
of CPT’s clients while ensuring that our financial position, performance and outlook remain robust.
Fred S. Grimwade
Chairman
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Managing Director’s Review
Dear Fellow Shareholders,
The 2020 financial year has been very difficult for all our shareholders, employees, clients and suppliers. We have all been
profoundly impacted on a personal level by the global COVID-19 pandemic and the changes forced upon us in our personal
and work lives.
At the onset of the global pandemic our priority was the safety and wellbeing of our employees and preparing the business
to deal with the financial scenarios we envisioned could arise. We closed all our offices, moved all employees to remote
working, repatriated employees working overseas, provided the resources for our employees to work from home and
provided the support structures and programs to help our employees adjust and thrive in their work and home life.
Aggressive cost cutting and cost controls were put in place, directors and senior management agreed to reductions in their
salary packages of between 15% and 20% in the 4th quarter and agreed to forgo performance bonuses.
Our employees have demonstrated the professionalism, flexibility and resilience required to adapt to working from home
while keeping a global business running efficiently and effectively.
We have not lost a single contract with a client or removed a single consultant out of a client because of the global
pandemic. In fact, CPT grew revenue and profit. The 4th quarter delivered the highest revenue and was the most profitable
quarter for the financial year. During the 4 month period from March to June, the losses generated in the preceding 8
months were recouped and turned into a $0.9 million full year profit after tax but before impairment.
This significant turnaround in performance is a credit to all CPT’s employees. That it was achieved during a global pandemic
is a source of immense pride and I would like to express my gratitude to everyone working at CPT for their hard work,
dedication, loyalty and support.
Operating and Financial Review
CPT made a net profit after tax but before impairment of goodwill of $0.9 million for the financial year compared to a profit
of $1.0 million in FY2019 and a profit of $0.5 million for the first half year in 2020. The net loss of $3.3 million for the
financial year includes the goodwill impairment of $4.2 million that was booked at the half-year.
The performance of the business during the second half has been particularly impressive and is a $1.2 million turnaround
on the profit before tax & impairment we announced for the half year.
The table below shows the operating performance over the last 3 reporting periods reconciled to net profit after tax.
FY2020
HY2020
FY2019
Revenue
Profit before tax & impairment
Goodwill impairment
Profit before tax
Tax expense
Profit after tax but before impairment
Net profit
m’s
24.9
0.9
(4.2)
(3.3)
(0)
0.9
(3.3)
m’s
12.1
(0.3)
(4.2)
(4.5)
0.8
0.5
(3.8)
m’s
28.4
1.7
-
1.7
0.7
1.0
1.0
As CPT’s performance improved from March through June and improved in comparison to the same period in FY2019, we
were not eligible for JobKeeper and did not receive financial assistance from governments in our regions other than $0.1
million from the ATO cash flow boost automatically credited to small and medium sized companies.
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Managing Director’s Review
The improved performance of the business in the second half was driven by:
1. growth in revenue in March through June in Australia and the USA;
2.
tighter controls over discretionary costs and temporary cost savings implemented to prepare the business for the
impacts of the global pandemic; and
3. net cost savings from moving to remote working.
While revenue finished the year 12% lower than FY2019, this was a significant improvement on the half year where revenue
was 20.8% lower than the comparative period. The decline in revenue in the first half continued through February and then
returned to growth during March and grew month on month through June.
Revenue in June was 53% up on February and 4th quarter revenue was 31% up on the 3rd quarter. The improved performance
was led by the Australian and USA regions:
Australian revenue in June was 54% up on February and 4th quarter revenue was 37% up on the 3rd quarter. New
business was won on multi-year projects at a University and Victorian statutory authority. Both these projects
were ramping up in the 4th quarter. We expanded our presence at our largest Australian client throughout the
second half with 58% of annual revenue earned during this period; and
USA revenue in June was 86% up on February and 4th quarter revenue was 40% up on the 3rd quarter. We
continued to expand our footprint in our largest client, a global bank, and commenced a risk reward contract at
a national insurance company. Phase 1 of the risk reward was completed in March and April and phase 2
commenced in June.
Our core industries in Australia and the USA, banking & finance, insurance and government, were critical to national
economies and governments’ responses during the global pandemic and will be critical to economic recovery. The services
we provide in these industries tend to be on business critical systems and projects. This expertise, our status as trusted
advisors and our experience and expertise providing services remotely were strengths that allowed us to continue to
provide seamless service and advice at a critical time for clients.
The growth in revenue was not as significant as we had expected at the half year but our expectations were formed before
Covid-19 had spread widely and Governments had started to implement lockdowns. As stated above, we did not lose any
contracted revenue due to the global pandemic. The lockdowns and other measures implemented by governments globally
did affect our ability to generate new revenue, particularly from new clients and in areas of clients’ businesses or within
projects that were not business critical.
As disclosed at the half year, our Canadian business declined when the contract at our largest client in Canada was not
renewed and the payments modernisation program was delayed due to industry issues that needed to be resolved. The
global pandemic and Canada’s response to it has compounded the issues in Canada. To minimise the impact on the
business we have moved Canadian consultants onto USA clients as they roll off contracts and the Canadian sales team is
supporting the USA sales and delivery teams.
Europe was hit early and hard by the global pandemic. This had a significant impact on our sales effort in the 3rd and 4th
quarter as Italy and France went into hard lockdowns. As a result, revenue didn’t rebound in the second half as we had
expected.
Margins and profit were helped across the business in the second half with our consultants and sales teams unable to
travel. The additional costs incurred in moving to remote working were less than the savings in travel costs. While travel
restrictions are still in place, particularly in Australia and North America, we will benefit financially.
Cost measures we implemented in March saved the business $0.3 million in the 4th quarter. These cost measures included
the salary reductions for directors and senior management.
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Managing Director’s Review
Financial Results
Financial Performance
CPT’s revenue for the year ended 30 June 2020 was $24.9 million, a 12% decrease on FY2019’s revenue of $28.4 million.
CPT’s net loss after tax for the year ended 30 June 2020 was $3.3 million and was a result of the factors discussed above.
Earnings per share after tax but before impairment was 2.30 cents per share. Basic earnings per share amounted to (8.73)
cents per share (diluted earnings (8.73) cents per share).
The net loss after tax includes:
tax expense of $14k. The tax expense is discussed in more detail below in the Taxation section.
an impairment charge against goodwill allocated to the Australian cash generating unit (“CGU”) of $4.23 million.
Goodwill was impaired as the revenue and operating profit of the Australian CGU in the first half of the financial
year were below budget and were unlikely to meet budget for the full financial year. The Australian business had
a difficult financial year in 2019 with revenue falling 29% against the 2018 financial year, the banking & finance
sector declined by 57% after 5 years of consistent growth. Banking & finance had been one of CPT’s largest and
best performing sectors in Australia over many years so the decline in revenue had a significant impact on
performance. There were several reasons for revenue declining in the banking & finance sector, with internal
transformations and the banking royal commission being two of the main ones. At the end of the 2019 financial
year we saw these negative influences on revenue in the sector as temporary and expected revenue to grow
quickly in the 2020 financial year. While we have seen growth in the banking & finance sector and in Australia
more generally, that growth has fallen short of our expectations. A valuation of the Australian CGU at 31
December 2019 resulted in the carrying value of intangible assets in the Australian CGU being impaired to nil.
Financial Position
CPT Global’s balance sheet reflected net tangible assets of $2.7 million as at 30 June 2020 (2019: $2.1 million). Net assets
are $2.7 million (2019: $6.4 million). The reduction in net assets is a result of the impairment of goodwill at 31 December
2019.
Contract asset (WIP) has decreased by $0.5 million. At 30 June 2019 we had WIP in Canada and Asia of $0.5m
across 8 clients. At 30 June 2020 we had one active account in Asia and Canada with minimal WIP.
Trade and other receivables decreased $0.8 million. The main reason for the decrease is a change in terms with
our largest client in the USA where we are now paid within 2 weeks of weekly timesheets being approved rather
than 30 days from receipt of a monthly invoice. At 30 June 2020, we had $18k in debtors over 60 days.
The current tax asset is tax refunds receivable in the USA due to: (a) tax instalments paid in the 2019 and 2020
financial years exceeding the tax liabilities incurred; and (b) USA tax losses utilised to claim a refund on tax paid
in FY2018 under the CARES Act. In the comparative period a current tax liability was recognised.
Property plant and equipment increased by $0.7 million due to the initial application of AASB 16: Leases and the
recognition of right-of-use assets and the corresponding lease liabilities.
Goodwill and intellectual property were impaired by $4.2 million as discussed above and have a carrying value of
nil.
Trade and other payables increased by $0.3 million. Part of the increase is due to the performance of the business
in the 4th quarter which saw an increase in consultants engaged by CPT with the balance due to timing of
payments around year end.
Borrowings at year end relate to the debtor funding facility provided by Scottish Pacific and the lease liability
recognised on adoption of AASB 16 Leases.
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Managing Director’s Review
Dividend
On 25 August 2020, a fully franked final dividend of 1.25 cents per share was declared by the directors. The total value of
the dividend is $478,253 and will be paid on 18 November 2020.
The financial effect of the dividend will be recognised in the 2021 financial year as it was declared after 30 June 2020. Based
on the existing participation rate in the dividend reinvestment plan, 49.54% of the dividend will be satisfied by the issue of
shares.
Cash Flow
CPT had $3.1 million in cash at 30 June 2020 ($1.7 million 30 June 2019) and a net cash inflow of $1.5 million for the financial
year. We also had access to $0.8 million in additional funding in our debtor facility.
Our strong cash management processes, Australian debtor funding facility and the increase in revenue in Australia and the
USA in the second half all contributed to CPT being able to manage the cash flow challenges in 2020.
Taxation
Despite making a profit during the financial year, the tax expense is $14k and the current tax is a net receivable of $645k.
The tax expense is made up of:
a tax benefit of $0.5 million. This benefit arose due to $1.7 million of intercompany interest expense expensed in
the USA in the 2014, 2015 and 2016 financial years becoming deductible for tax purposes. The tax benefit of $0.5
million was not previously recognised as there was uncertainty as to whether the conditions for deductibility
under the USA tax code would be met; and
tax expense within the Group of $0.5 million from the FY2020 operations. Taxable losses across the Group of $0.3
million have not been recognised as the conditions for recognition have not been met.
The current tax receivable is made up of:
a $0.7 million refund due in the USA for taxes paid in FY2019 that are now refundable because of the interest
deductibility discussed above, tax instalments paid for FY2020 in excess of the final tax payable and tax losses
that the passing of the CARES Act in 2020 allowed CPT to recoup against tax paid in FY2018. At 30 June 2020 we
have $0.3 million of tax losses in the USA available to offset future tax payable; and
the balance of tax payable for FY2020 in Australia.
Capital Management
A fully franked final dividend of 1.25 cents per share will be paid for FY2020.
Our debtor funding facility has a limit of $5.0 million of which there was $0.6 million outstanding at 30 June 2020 and $0.8
million was available to draw on.
In June 2020 we bought back 28,799 shares at a cost of $3,123.90 under our on-market buy-back. It is our intention to
continue to provide liquidity in the market by buying shares on-market when circumstances are deemed appropriate.
During 2021 our focus will be on continuing to grow 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. CPT has in excess of $2 million of
franking credits available to pay franked dividends.
The Outlook and Strategy
The uncertainty driven by the global pandemic has reduced our visibility of future revenue, particularly in the second half
of FY2021. The risks and uncertainty are significant so our outlook is limited to providing general information on what we
are seeing in the market now and what our strategy is in the short-term. Our clients will be reacting to the situation and
condition in their respective countries and/or states, which can materially change in a short period of time.
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Managing Director’s Review
CPT will be focussing on the Australian and USA regions where we have our largest clients and best opportunities. While
travel restrictions remain in place and clients are working remotely, our strategy is to:
renew existing contracts at existing or higher funding levels;
grow within existing clients by expanding into new projects and offering additional services;
preserve margins by maintaining control of delivery costs;
maintain control over discretionary costs; and
provide our employees with the services and support they need to work remotely and maintain a healthy work
and personal life.
We expect the performance of the business in the 4th quarter to continue into the 1st quarter of FY2021 and approximately
70% of budgeted revenue in the first half is already contracted. Our two largest contracts are up for renewal at 31 December
2020. We expect both contracts to be renewed for between 6 and 12 months but, do not have full visibility over the likely
outcome. However, we are actively working with these clients on the renewals.
We are seeing an increase in the governance processes clients are implementing around spending and budgeting and
some longer term projects are being funded over shorter periods to give clients greater flexibility in uncertain times. To
date this has had no impact on our existing contracts but there is a risk that contracts that come up for renewal will not be
renewed on existing terms.
We do not expect to see a material change in our European, Canadian or Asian regions in the first half of the financial year
and they will be managed opportunistically. Our consultants and sales teams in Europe and Canada will continue working
in the USA region in the short term.
Gerry Tuddenham
Managing Director
September 30, 2020
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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
9
17
29
30
31
32
33
34
70
71
75
76
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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 remains under review by the Board. During the 2020 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
2020
2019
No.
0
3
26
%
0
30
19
No.
0
3
19
%
0
30
15
On 30 July 2020, 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
2020 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:
Nigel Sandiford (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 27 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 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
1
3
3
1
1
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
1
3
2
3
1
1
1
1
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 page 17.
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
Nigel Sandiford
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
18 years
Nigel Sandiford
2 years
Gerry Tuddenham
22 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)
Nigel Sandiford
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 page 17 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 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 20 to 26 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 2020.
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)
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 also a non-executive director of ASX listed companies Select Harvests Limited,
and Australian United Investment Company Limited and chairs XRF Scientific Limited.
Fred was a commercial lawyer 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. 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 a Fellow of the Australian Institute of Company Directors and
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.
Nigel Sandiford
(Non-executive Director)
Nigel is a member of CPT’s Finance and Audit Committee and chairs the Remuneration
Committee.
Nigel had a successful career in the music and video gaming industries and worked in the UK,
South Africa, New Zealand and Australia. His senior executive positions included COO of News
Music International (a subsidiary of News Corporation), Vice President Global Marketing
Polygram Records and President Asia-Pacific for the NASDQ listed Electronic Arts.
After taking early retirement, Nigel has been advising and investing in companies covering
various forms of digital development, distribution and disruption and has mentored male and
female executives globally, both in corporate and individual businesses, including Google,
Facebook, Electronic Arts, Amazon, Apple and Microsoft. Nigel is a member of the Australian
Institute of Company Directors and has an MBA from the Graduate School of Business at
Auckland University.
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
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Directors’ Report
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:
Nigel Sandiford
Fred S Grimwade
Gerry Tuddenham
EARNINGS PER SHARE
Basic earnings per share
Diluted earnings per share
DIVIDENDS
Ordinary
Shares
229,836
718,200
Performance Rights
75,000
75,000
13,838,156
300,000
Cents
2.62
2.60
On 25 August 2020, a fully franked dividend of 1.25 cents per share was declared by the directors for the 2020 financial
year. The total value of the dividend is $478,243 and will be paid on 18 November 2020.
The financial effect of the dividend will be recognised in the 2020 financial year as it was declared after the end of the
2020 financial year. Based on the existing participation rate in the dividend reinvestment plan, 49.54% of the dividend
will be satisfied by the issue of shares.
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 139 employees and contractors as at 30 June 2020 (2019: 124 employees and
contractors).
OPERATING AND FINANCIAL REVIEW
The full year performance of the business was a significant improvement on the half year performance. Revenue
returned to growth during March and grew month on month through June. Revenue in June was 53% up on February
and 4th quarter revenue was 31% up on the 3rd quarter.
The improved performance was led by the Australian and USA regions. Our core industries of banking & finance,
insurance and government were critical to national economies and governments’ responses during the global
pandemic and will be critical to economic recovery. Our expertise, status as trusted advisors and experience and
expertise providing services remotely were strengths that allowed us to continue to provide seamless service and
advice at a critical time for clients.
We did not lose any contracted revenue due to the global pandemic although the lockdowns and other measures
implemented by governments globally did affect our ability to generate new revenue.
As disclosed at the half year, our Canadian business declined when the contract at our largest client in Canada was
not renewed and the payments modernisation program was delayed. The global pandemic has compounded the
issues in Canada. To minimise the impact on the business we have moved Canadian consultants onto USA clients
as they roll off contracts and the Canadian sales team is supporting the USA sales and delivery teams.
Europe was hit early and hard by the global pandemic. This had a significant impact on our sales effort as Italy and
France went into hard lockdowns. As a result, revenue did not rebound in the second half as we had expected.
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Margins and profit were helped across the business in the second half with our consultants and sales teams unable
to travel. The additional costs incurred in moving to remote working were less than the savings in travel costs. While
travel restrictions are still in place, particularly in Australia and North America, we will benefit financially.
Cost measures we implemented in March saved the business $0.3 million in the 4th quarter. These cost measures
included the salary reductions for directors and senior management.
Financial Performance
CPT made a net profit after tax but before impairment of goodwill of $0.9 million for the financial year compared to
a profit of $1.0 million in FY2019 and a profit of $0.5 million for the first half year in 2020. The net loss of $3.3
million for the financial year includes the goodwill impairment of $4.2 million that was booked at the half-year.
CPT’s revenue for the year ended 30 June 2020 was $24.9 million, a 12% decrease on FY2019’s revenue of $28.4
million.
The performance of the business during the second half has been particularly impressive and is a $1.2 million
turnaround on the profit before tax & impairment we announced for the half year.
The improved performance of the business in the second half was driven by:
1. growth in revenue in March through June in Australia and the USA;
2.
tighter controls over discretionary costs and temporary cost savings implemented to prepare the business
for the impacts of the global pandemic; and
3. net cost savings from moving to remote working.
Earnings per share after tax but before impairment was 2.30 cents per share. Basic earnings per share amounted to
(8.73) cents per share (diluted earnings (8.73) cents per share).
Financial Position
CPT Global’s balance sheet reflected net tangible assets of $2.7 million as at 30 June 2020 (2019: $2.1 million). Net
assets are $2.7 million (2019: $6.4 million). The reduction in net assets is a result of the impairment of goodwill at
31 December 2019.
Contract asset (WIP) has decreased by $0.5 million. At 30 June 2019 we had WIP in Canada and Asia of
$0.5m across 8 clients. At 30 June 2020 we had one active account in Asia and Canada with minimal WIP.
Trade and other receivables decreased $0.8 million. The main reason for the decrease is a change in terms
with our largest client in the USA where we are now paid within 2 weeks of weekly timesheets being
approved rather than 30 days from receipt of a monthly invoice. At 30 June 2020, we had $18k in debtors
over 60 days.
The current tax asset is tax refunds receivable in the USA due to: (a) tax instalments paid in the 2019 and
2020 financial years exceeding the tax liabilities incurred; and (b) USA tax losses utilised to claim a refund
on tax paid in FY2018 under the CARES Act. In the comparative period a current tax liability was recognised.
Property plant and equipment increased by $0.7 million due to the initial application of AASB 16: Leases
and the recognition of right-of-use assets and the corresponding lease liabilities.
Goodwill and intellectual property were impaired by $4.2 million as discussed above and have a carrying
value of nil.
Trade and other payables increased by $0.3 million. Part of the increase is due to the performance of the
business in the 4th quarter which saw an increase in consultants engaged by CPT with the balance due to
timing of payments around year end.
Borrowings at year end relate to the debtor funding facility provided by Scottish Pacific and the lease
liability recognised on adoption of AASB 16 Leases.
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Cash Flow
CPT had $3.1 million in cash at 30 June 2020 ($1.7 million 30 June 2019) and a net cash inflow of $1.5 million for the
financial year. We also had access to $0.8 million in additional funding in our debtor facility.
Our strong cash management processes, Australian debtor funding facility and the increase in revenue in Australia
and the USA in the second half all contributed to CPT being able to manage the cash flow challenges in 2020.
Capital Management
A fully franked final dividend of 1.25 cents per share will be paid for FY2020.
Our debtor funding facility has a limit of $5.0 million of which there was $0.6 million outstanding at 30 June 2020
and $0.8 million was available to draw on.
In June 2020 we bought back 28,799 shares at a cost of $3,123.90 under our on-market buy-back. It is our intention
to continue to provide liquidity in the market by buying shares on-market when circumstances are deemed
appropriate.
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 26th August 2020 CPT Global Limited announced its intention to extend the on-market share buy back for a
further twelve months until 28th August 2021. A maximum of 3,000,000 shares may be bought back during the
buy-back period.
On 25th August 2020, a fully franked final dividend of 1.25 cents per share was declared for the 2020 financial year.
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 2 and 3 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 $59,156.
REMUNERATION REPORT
The Remuneration Report for the year ended 30 June 2020 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.
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Persons to who the report applies
The remuneration disclosures in this Report cover the following persons:
Key Management Person
Fred S Grimwade
Nigel Sandiford
Gerry Tuddenham
Grant Sincock
Luke Tuddenham
Remuneration policy
Position
Non-executive Chairman
Non-executive Director
Managing Director
Company Secretary and Chief Financial Officer
President North America
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 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.
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. During the five financial years to
FY2020, there were no increases in annual salary during annual reviews for executives other than for a promotion
to a higher role with greater responsibility. Executive remuneration was not increased as the results of CPT did not
meet the expectations of the Board and shareholders had experienced negative returns. During this period, no
performance rights vested as key performance indicators and performance hurdles were not met.
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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 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 were no increases in the compensation arrangements for directors and key management personnel during
the 2016 and 2017 financial years and performance bonuses reflect the results of the Company. Since CPT returned
to profit in 2018, one executive was promoted and received an increase in remuneration commensurate with the
role and responsibilities. The net loss in 2020 includes the write down in goodwill of $4.2m. 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 and declared
2016
($3.9m)
$0.26
0.0c
2017
($1.5m)
$0.16
0.0c
2018
$0.8m
$0.12
0.25c
2019
$1.0m
$0.20
0.75c
2020
($3.3m)
$0.115
1.25c
During the year, no shares were purchased as part of the share buyback. The share price during the year ranged
from a low of $0.09 to a high of $0.285.
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 $300,000 and was adopted at the 2018 AGM. The
aggregate fees paid to Non-Executive directors in the 2020 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 2020 financial
year.
Remuneration of Senior Executives
The 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 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;
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 2020 are summarised in the tables on the following pages.
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Summary of Contracts of Employment Applicable at 30 June 2020
Position
Fixed Remuneration
Base Salary
Superannuation
Non-monetary benefits
Gerry Tuddenham
Managing Director
Grant Sincock
Chief Financial Officer &
Company Secretary
$395,000
$265,000
$25,000
Mobile telephone, car park, road tolls,
petrol and salary sacrifice arrangements
for motor vehicle and superannuation.
$25,000
Mobile telephone, road tolls 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
$30,000
Nil
Nil
6 months
4 weeks notice
Nil
Position
Fixed Remuneration
Base Salary
Superannuation
Non-monetary benefits
Luke Tuddenham
President North America
US$215,000
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
US$125,000
Nil
Nil
Post-employment restraint
6 months
Termination
4 weeks notice
Termination benefits
Nil
CPT Global Limited – Annual Report
23
For personal use only
Directors’ Report
Details of remuneration for the year ended 30 June 2020
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
Fred Grimwade
2020
2019
Nigel Sandiford
2020
2019
Gerry
Tuddenham
2020
2019
Alan Baxter
2019
David Lynch
2019
Total
Remuneration
2020
2019
Executive Officers
Grant Sincock
74,083
77,982
47,717
37,671
400,031
369,645
20,819
91,061
521,831
597,178
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,408
7,408
4,772
3,579
-
-
-
-
-
860
-
860
81,491
86,250
52,489
42,110
0.0%
1.0%
0.0%
2.0%
9,658
25,000
10,725
25,000
8,184
6,857
-
442,873
13,286
425,513
0.0%
3.1%
-
1,937
1,336
9,890
-
-
-
-
22,756
0.0%
102,287
0.0%
9,658
12,061
37,180
47,814
8,184
6,857
-
15,006
576,852
678,916
0.0%
2.2%
2020
2019
245,558
-
250,058
30,000
1,503
1,385
25,000
25,000
Luke Tuddenham
2020
305,712
61,352
335,688
54,716
315,971
410,743
263,112
31,171
5,066
5,063
5,086
5,063
551,270
566,029
61,352
440,743
337,191
264,497
79,716
56,171
10,153
10,126
2019
Total
Remuneration
2020
2019
Notes
-
-
-
-
-
-
277,127
311,506
762,554
1,026,060
0.0%
9.6%
8.1%
40.0%
1,039,682
1,337,566
5.9%
32.9%
1. The elements of remuneration have been determined based on the cost to the group.
2. Other Benefits for Mr Luke Tuddenham include expatriate costs
CPT Global Limited – Annual Report
24
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
Gerry Tuddenham
Nigel Sandiford
Fred Grimwade
Total
-
-
-
-
300,000
75,000
75,000
450,000
28/11/18
28/11/18
28/11/18
Value per
Share at Grant
Date
Exercise
Price
$
$
$0.145
$0.145
$0.145
$0.00
$0.00
$0.00
Last
Exercise
Date
27/11/22
27/11/22
27/11/22
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
300,000
Fred Grimwade
Nigel Sandiford
Total
75,000
75,000
450,000
-
-
-
-
-
-
-
-
-
-
-
-
300,000
75,000
75,000
450,000
-
-
-
-
-
-
-
-
CPT Global Limited – Annual Report
25
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
Nigel Sandiford
Gerry Tuddenham
Specified Executives
Grant Sincock
Luke Tuddenham
Total
Shares held in CPT Global
Limited
Fred S Grimwade
Alan Baxter
Nigel Sandiford
Gerry Tuddenham
David Lynch
Specified Executives
Grant Sincock
Luke Tuddenham
Total
Balance 1
July 2019
Ord
718,200
229,836
11,740,432
191,402
868,972
13,748,842
Balance 1
July 2018
Ord
718,200
-
-
11,388,970
417,458
185,671
842,955
13,503,254
Granted as
Remuneration
On Exercise of
Options
Net Change
Other
Ord
Ord
-
-
-
-
-
-
-
-
-
-
-
-
Balance 30
June 2020
Ord
718,200
229,836
12,946,902
Ord
-
-
1,206,470
4,908
22,282
196,310
891,254
1,233,660
14,982,502
Granted as
Remuneration
On Exercise
of Options
Net Change
Other
Ord
Ord
Ord
Balance 30
June 2019
Ord
718,200
-
229,836
11,740,432
417,458
-
-
229,836
351,462
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,731
26,017
191,402
868,972
613,046
14,166,300
CPT Global Limited – Annual Report
26
For personal use only
Directors’ Report
DIRECTORS' MEETINGS
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
11
11
11
11
11
11
2
2
2
2
2
2
1
1
1
1
Fred S Grimwade
Nigel Sandiford
Gerry Tuddenham
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)
Nigel Sandiford
Gerry Tuddenham
Remuneration and Nomination
Nigel Sandiford (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 2020:
Taxation compliance services $23,495
CPT Global Limited – Annual Report
27
For personal use only
Directors’ Report
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 30 June 2020 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, 30 September 2020
CPT Global Limited – Annual Report
28
For personal use only
Take the lead
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 2020 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, 30 September 2020
Brisbane
Level 14
12 Creek Street
Brisbane QLD 4000
T + 61 7 3085 0888
Melbourne
Level 10
530 Collins Street
Melbourne VIC 3000
T + 61 3 8635 1800
F + 61 3 8102 3400
Sydney
Level 8
167 Macquarie Street
Sydney NSW 2000
T + 61 2 8059 6800
F + 61 2 8059 6899
ShineWing Australia ABN 39 533 589 331. Liability limited by a scheme approved under Professional
Standards Legislation. ShineWing Australia is an independent member of ShineWing International Limited.
shinewing.com.au
For personal use only
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
YEAR ENDED 30 JUNE 2020
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 BEFORE INCOME TAX AND IMPAIRMENT
Notes
3
3
2020
$’000
24,919
115
(2,126)
(17,907)
(220)
(298)
(184)
(376)
(2,995)
(28)
900
2019
$’000
28,395
5
(2,556)
(20,003)
(58)
(257)
(209)
(546)
(3,058)
18
1,731
Goodwill Impairment
13
(4,231)
-
PROFIT / (LOSS) BEFORE INCOME TAX
(3,331)
1,731
INCOME TAX EXPENSE
5
(14)
(739)
PROFIT / (LOSS) AFTER INCOME TAX
(3,345)
992
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
(179)
(179)
21
21
TOTAL COMPREHENSIVE PROFIT / (LOSS) FOR THE YEAR
(3,524)
1,013
PROFIT / (LOSS) ATTRIBUTABLE TO MEMBERS OF CPT GLOBAL LIMITED
TOTAL COMPREHENSIVE PROFIT / (LOSS) ATTRIBUTABLE TO MEMBERS
OF CPT GLOBAL LIMITED
(3,345)
992
(3,524)
1,013
Earnings per share after tax but before impairment
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
25
25
25
2.30
(8.73)
(8.73)
2.62
2.62
2.60
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 2020
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Contract Asset
Current tax asset
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
Borrowings
Other long-term provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Retained earnings
TOTAL EQUITY
Notes
7
8
9
16
10
16
12
13
14
15
16
17
16
15
17
18
19
2020
$’000
3,133
3,251
1,115
645
139
8,283
1,092
702
-
1,794
10,077
5,164
818
-
775
6,757
86
491
-
577
7,334
2019
$’000
1,653
4,059
1,583
-
139
7,434
1,096
30
4,256
5,382
12,816
4,749
415
400
728
6,292
126
-
30
156
6,448
2,743
6,368
12,396
1,337
(10,990)
2,743
12,308
1,516
(7,456)
6,368
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 2020
$’000
$’000
$’000
$’000
$’000
Issued
capital
Ordinary
Retained
Earnings
Equity
Reserve
Foreign
Currency
Translation
Reserve
12,228
(8,262)
1,691
(211)
992
992
(186)
21
21
15
80
80
(186)
15
Total
5,446
992
21
1,013
15
(186)
80
(91)
Balance at 1 July 2018
Comprehensive Income
Profit for the year
Other comprehensive profit
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
Balance at 30 June 2019
12,308
(7,456)
1,706
(190)
6,368
Balance at 1 July 2019
Comprehensive Income
Profit for the year
Other comprehensive profit
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
Shares cancelled
Total transactions with owners, in their
capacity as owners
12,308
(7,456)
1,706
(190)
6,368
(3,345)
(3,345)
(189)
(189)
91
(3)
88
(179)
(179)
(3,345)
(179)
(3,524)
(189)
91
(3)
(101)
Balance at 30 June 2020
12,396
(10,990)
1,706
(369)
2,743
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 2020
Notes
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs
Income tax paid
NET CASH FLOWS FROM OPERATING ACTIVITIES
20
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment, software
NET CASH FLOWS (USED IN) INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Shares bought back
Repayments of borrowings
Proceeds from borrowings
Payment of dividends on ordinary shares
NET CASH FLOWS USED IN FINANCING ACTIVITIES
NET INCREASE 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
2020
$’000
27,670
(24,919)
3
(110)
(1,095)
1,549
(19)
(19)
(3)
(130)
177
(99)
(55)
1,474
1,653
6
3,133
2019
$’000
33,107
(31,815)
5
(107)
(810)
380
(26)
(26)
-
(765)
645
(106)
(226)
128
1,440
85
1,653
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 2020
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 29 September 2020 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.
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 2020
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) Contract Assets
Contract assets are revenue that has not been invoiced at period end and is measured and recognised in accordance
with the policies set out in note 1(p).
CPT Global Limited – Annual Report
35
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2020
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) Leases
The Group assesses whether a contract is or contains a lease at inception of the contract. A right-of-use asset and
a corresponding lease liability is recognised on the balance sheet for all lease arrangements in which CPT is the
lessee, except for leases with a term of 12 months or less and leases of low value assets. The lease payments for
these leases are recognised as an operating expense on a straight line basis over the term of the lease unless another
systematic basis is more representative of the time pattern in which economic benefits from the leased asset are
consumed.
Lease liabilities are initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined,
the Group uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
fixed lease payments less any lease incentives receivable;
variable lease payments that depend on an index or rate which are initially measured using the index or rate
at the commencement date;
CPT Global Limited – Annual Report
36
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2020
1. Summary of Significant Accounting Policies (continued)
the amount expected to be paid under residual guarantees;
the exercise price of purchase options if it is reasonably certain that the option will be exercised; and
payments of penalties for terminating a lease if the lease term reflects the exercise of an option to terminate
a lease.
Lease liabilities are presented in the borrowings line item in the consolidated statement of financial position.
Lease liabilities are subsequently measured by increasing the carrying amount to reflect interest on the lease
liability and reducing the carrying amount for lease payments made.
The lease liability is remeasured whenever:
the lease term has changed or there has been a change in the assessment of the exercise of a purchase option
as a result of a significant event or change in circumstances;
the lease payments change due to a change in an index or a change in expected payment under a guaranteed
residual value;
a lease contract is modified and the modification is not accounted for as a separate lease.
Corresponding adjustments to the right-of-use asset are made whenever the lease liability is remeasured. No
adjustments to the lease liability were required during this financial period.
Right-of use assets comprise the initial measurement of the lease liability, lease payments made at or before the
commencement date, less any lease incentives received and any initial direct costs. Subsequent measurement is
at cost less accumulated depreciation and impairment losses.
Right-of use assets are depreciated over the lease term or the useful life of the underlying asset, whichever is the
shorter. Depreciation starts from the commencement date of the lease.
Right-of-use assets are presented as a separate line in the consolidated statement of financial position.
On initial adoption of AASB 16 on 1 July 2019, the Group elected to use the ‘cumulative catch-up’ approach. Under
this approach the lease liability was initially recognised at the present value of future lease payments and the right
of use asset was valued at an amount equal to the lease liability.
The impact on initial adoption was to recognise right-of-use assets and lease liabilities in the statement of financial
position at $1.04 million. The incremental borrowing rate on initial application of AASB 16 was 7.20%.
The following is a reconciliation of non-cancellable operating lease commitments disclosed at 30 June 2019 to the
aggregate carrying amount of lease liabilities recognised at the date of the initial application on 1 July 2019:
Aggregate non-cancellable operating lease commitments at 30 June 2019
Add: future lease options accounted for under AASB 16
Add: lease payments not previously included in non-cancellable operating lease
commitments
Less: impact of discounting lease payments to present vale at 1 July 2019
Carrying amount of lease liabilities recognised at 1 July 2019
CPT Global Limited – Annual Report
$’000
329
645
197
(132)
1,039
37
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2020
1. Summary of Significant Accounting Policies (continued)
For the comparative reporting period the following policy applied for 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 lease 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.
Classification of financial assets
Financial assets recognised by the Group are subsequently measured at either amortised cost or fair value subject
to their classification. Financial assets, other than those designated and effective as hedging instruments, are
classified into the following categories:
(i)
(ii)
(i)
measured at amortised cost
fair value through profit or loss; and
fair value through other comprehensive income.
The classification of financial assets is based on both the business model for managing the financial asset and the
contractual cash flow characteristics of the financial asset.
CPT does not have any financial assets categorised as fair value through other comprehensive income.
Classification of financial liabilities
Financial liabilities classified as held-for-trading, contingent consideration payable by the group for the acquisition
of a business and financial liabilities designated at fair value through profit or loss are subsequently measured at
fair value.
All other financial liabilities recognised by the Group are subsequently measured at amortised cost.
Impairment of Financial Assets
At the end of each reporting period, the Group tests financial assets for impairment by applying the expected credit
loss impairment model.
The Group has adopted the simplified approach under AASB 9 to measure the allowance for credit losses for
receivables from contracts with customers and contract assets. The allowance for credit losses is determined based
on the lifetime expected credit losses of the financial asset. Lifetime expected credit losses represent the credit
losses that are expected to result from default events over the life of the financial asset. The Group has no other
financial assets subject to impairment testing under AASB 9.
In applying the simplified approach under AASB 9, the Group uses a provision matrix based on historical experience
at the client and segment level, adjusted for factors that are specific to the financial asset, as well as current and
future expected economic conditions relevant to the financial asset. The time value of money is incorporated into
the measurement of expected credit losses if it is material. There has been no change in the estimation techniques
or significant assumptions made during the reporting period.
Contractual payments more than 180 days past due are considered default events for the purpose of measuring
expected credit losses based on the historical experience of the Group.
CPT Global Limited – Annual Report
38
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Notes to the Financial Statements
Year Ended 30 June 2020
1. Summary of Significant Accounting Policies (continued)
The measurement of expected credit losses reflects the Group’s expected rate of loss and is measured as the
difference between all contractual cash flows due and all contractual cash flows expected based on the Group’s
exposure at default, discounted at the financial asset’s effective interest rate, where appropriate.
Financial assets are considered credit impaired when one or more events has occurred that provides objective
evidence that there has been a detrimental impact on the estimated future cash flows of the financial asset.
Indicators that a financial asset is credit impaired include observable data that: the debtor has significant financial
difficulties; the debtor is likely to enter bankruptcy or financial reorganisation; breaches of contract have occurred;
and the debtor has defaulted or there is delinquency in payments. Financial assets which are not collectible are
written off by reducing the carrying amount directly when CPT has no realistic expectation of recovery of the financial
asset. Financial assets written off remain subject to enforcement action by CPT. Any financial assets that have been
written off but subsequently recovered in whole or in part are recognised in profit or loss.
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 15: Revenue. Where the entity
gives guarantees in exchange for a fee, revenue is recognised under AASB 15.
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 transaction
price and are subsequently measured at amortised cost less any impairment allowance. Trade receivables are
generally due for settlement within 30 days.
(h) Impairment of non-financial 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.
Impairment testing is performed annually for goodwill and other intangible assets with indefinite lives.
CPT Global Limited – Annual Report
39
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Notes to the Financial Statements
Year Ended 30 June 2020
1. Summary of Significant Accounting Policies (continued)
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
40
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Notes to the Financial Statements
Year Ended 30 June 2020
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 directors and employees via the CPT Employee Equity
Plan. Information relating to this scheme is set out in note 22.
The fair value of performance rights granted under the CPT Employee Equity Plan is recognised as an employee
benefit expense with a corresponding increase in equity in the period the rights are granted. The fair value is
measured at grant date and recognised over the period during which the employees become unconditionally
entitled to the rights.
The fair value at grant date is independently determined using a Black-Scholes option pricing model that takes into
account the exercise price, the term of the right, 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
right.
CPT Global Limited – Annual Report
41
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Notes to the Financial Statements
Year Ended 30 June 2020
1. Summary of Significant Accounting Policies (continued)
The fair value of the rights 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 rights that are expected to become exercisable. At the end of
each reporting period, the entity revises its estimate of the number of rights 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
The Group recognises 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.
The Group enters contracts with clients to provide IT consulting services on a time and materials, fixed price,
milestone based and risk/reward basis, or variations thereof. The performance obligations in each contract are
identified and the total transaction price for each contract is allocated against the various performance obligations
based on their stand-alone selling prices. The transaction price excludes any amounts collected on behalf of third
parties.
The Group determines the stand-alone selling price by direct reference to contracts and pricing schedules for the
services being delivered.
Revenue is recognised either at a point in time or over time as performance obligations are satisfied by transferring
the goods or services to the client. Revenue is recognised over time if:
the client simultaneously receives and consumes the benefits as the Group performs;
the client controls the asset as the Group creates or enhances it; or
the Group’s performance does not create an asset for which the client has an alternative use and there is a
right to payment for performance to date.
If the criteria above are not met, revenue is recognised at a point in time.
CPT Global Limited – Annual Report
42
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Notes to the Financial Statements
Year Ended 30 June 2020
1. Summary of Significant Accounting Policies (continued)
When revenue is recognised over time the progress towards complete satisfaction of the performance obligations
as the services are delivered is measured using the stage of completion method, except for risk/reward contracts as
discussed below. 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. Clients are invoiced monthly in arrears unless the contract
specifies otherwise. Payment terms are generally 30 days. Any amounts that remain unbilled at the end of a reporting
period are presented in the statement of financial position as contract assets. Only the passage of time is required
before these amounts are invoiced and collected.
Risk/reward revenue is recognised by measuring the progress towards complete satisfaction of the performance
obligations. The method of measuring progress is determined using an output method as the Group 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 a risk/reward project. The weighting at each
stage is based on the Group’s experience completing risk/reward projects. Clients are invoiced in accordance with
the contract terms which generally stipulate that invoices can be submitted when the savings have been measured
and confirmed by the client and the Group. Payment terms are generally 30 days. Any amounts that remain unbilled
at the end of a reporting period are presented in the statement of financial position as contract asset.
Clients may be invoiced in advance for the provision of services and this is recognised as a liability until the Group
provides, and the client consumes, the benefits of the service.
Interest revenue is recognised on a proportional basis considering the effective interest rates applicable to the
financial assets.
All revenue is stated net of the amount of goods and services tax (GST).
(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.
CPT Global Limited – Annual Report
43
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Notes to the Financial Statements
Year Ended 30 June 2020
1. Summary of Significant Accounting Policies (continued)
(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.
(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)
Impairment losses of receivables
An impairment loss is recognised based on an expected credit loss model. The Group assesses the expected credit
loss based on individual debtor level expectations relative to credit terms.
(ii)
Contract asset
The Group measures contract assets 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.
CPT Global Limited – Annual Report
44
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2020
1. Summary of Significant Accounting Policies (continued)
(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) Accounting standards issued but not yet effective
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2020
reporting periods and have not been early adopted by the group. These standards are not expected to have a
material impact in the current or future reporting periods.
CPT Global Limited – Annual Report
45
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Notes to the Financial Statements
Year Ended 30 June 2020
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/(LOSS)
Total profit/(loss)
Total comprehensive profit/(loss)
Guarantees
2020
$'000
2019
$'000
1,135
1,136
2,271
4,050
146
4,196
12,396
1,608
(15,929)
(1,925)
2020
$'000
519
4,836
5,355
764
124
888
12,308
1,608
(9,449)
4,467
2019
$'000
(6,097)
1,868
(6,097)
1,868
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 – recognised over time
Total Revenue
OTHER INCOME
Interest Income
Government grants received
Other income
Total Other Income
2020
$'000
2019
$'000
24,919
24,919
28,395
28,395
3
100
12
115
5
-
-
5
CPT Global Limited – Annual Report
46
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2020
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
Interest on lease liabilities
Total finance costs
Foreign currency translation losses
Occupancy expenses
Depreciation of property plant and equipment
Depreciation of right of use 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 27.5% (2019: 27.5%)
Tax effect of
Impairment of goodwill
Change in tax rate
Tax on overseas income at a different rate
Other non-allowable items
Current year tax losses not brought to account
Government grants
Under/(over) provision of previous year
Non-deductible interest expense
Income tax expense attributable to the entity
The applicable weighted average effective tax rates are as follows:
2020
$'000
2019
$'000
137
48
185
28
435
43
177
979
119
2020
$'000
379
8
(373)
14
209
-
209
-
546
58
-
958
125
2019
$'000
567
106
66
739
(920)
476
1,164
-
(5)
31
59
(28)
(373)
86
14
0%
-
60
(1)
34
39
-
70
61
739
43%
CPT Global Limited – Annual Report
47
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Notes to the Financial Statements
Year Ended 30 June 2020
6.
DIVIDENDS PAID OR PROVIDED FOR ON ORDINARY SHARES
(a) Dividends paid during the year
Current year interim
Franked dividends (0.0c per share) (2019: 0.25c per share)
Prior year final
Franked dividends (0.50c per share) (2019: 0.25c per share)
(b) Dividends proposed and not recognised as a liability
Franked dividends (1.25c per share) (2019: 0.50c per share)
(c) Franking credit balance
Balance of franking account at year end adjusted for:
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
2020
$'000
2019
$'000
-
189
189
93
93
186
478
189
2,527
2,527
2,421
2,421
2020
$'000
2019
$'000
3,133
1,653
3,133
3,133
1,653
1,653
CPT Global Limited – Annual Report
48
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Notes to the Financial Statements
Year Ended 30 June 2020
8.
TRADE AND OTHER RECEIVABLES
CURRENT
Trade receivables
Provision for impairment
Other receivables
Notes
8(a)
2020
$'000
3,229
(73)
3,156
95
3,251
2019
$'000
4,035
(71)
3,964
95
4,059
(a) Trade receivables are non-interest bearing and generally on 30 day terms. The average credit period on
rendering of services is 46 days (2019: 49 days). An impairment of $73k (2019: $71k) has been recognised
in trade receivables as detailed below. The movement in the provision is due to the movement of the US
dollar against the Australian dollar.
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:
$174k (2019: $272k) was due from a leading banking institution in Australia with an S&P credit rating of AA-;
$247k (2019: $42k) was due from a Tier 2 bank with an S&P credit rating of BBB+;
$501k (2019: $16k) was due from a Victorian university;
$203k (2019: $0) was due from a Victorian statutory authority;
$1,529k (2019: $1,179k) was due from an Australian federal government agency; and
$218k (2019: $0) was due from a global financial institution headquartered in the USA with an S&P credit rating
of A+.
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 $2.7m (84%) relates to
Australia (2019: $2.2m (57%)). 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 (2019: $78k) which is past due
at the end of the reporting period. A provision for impairment of $73k, including the movement in foreign exchange,
was recorded in the 2018 financial year 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. The provision has been maintained in the 2020 financial year with the change being the
impact of movements in foreign exchange rates.
Trade receivables that are past due but not impaired
Included in the trade receivable balance are debtors with a carrying amount of $152k (2019: $171k) 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. The entire balance relates to a
client with an S&P credit rating of A+ 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 bank listed on the NYSE, gives further confidence that
these past due balances are not impaired. The Group does not hold any collateral over these balances.
CPT Global Limited – Annual Report
49
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Notes to the Financial Statements
Year Ended 30 June 2020
8.
TRADE AND OTHER RECEIVABLES (Cont.)
The ageing analysis of trade receivables is:
1-3 months
Within initial trade terms
2020
$'000
161
2,995
3,156
2019
$'000
181
3,783
3,964
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.
CONTRACT ASSETS (CURRENT)
Contract asset
Provision for impairment
Total
2020
$'000
1,188
(73)
1,115
2019
$'000
1,654
(71)
1,583
Contract asset 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. There is $0k
contract asset (2019: $30k) that was initially recognised more than 12 months prior to the end of the reporting
period.
The balance has decreased by $0.5m. At 30 June 2019 we had contract asset in Canada and Asia of $0.5m across 8
clients. At 30 June 2020 we had one active account in Asia and Canada with minimal WIP.
The directors expect all contract asset to be billed in full during the 2020 financial year.
The provision for impairment of contract asset 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
2020
$'000
139
139
2019
$'000
139
139
Prepayments consists of insurance policies, licence fees, subscriptions and other expenses.
CPT Global Limited – Annual Report
50
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2020
11.
INTERESTS IN SUBSIDIARIES
Name
Country of incorporation
Percentage of equity & voting interest
held by the economic entity
2020
2019
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
Informatica Ltda
United Kingdom
Germany
USA
Canada
France
Australia
Australia
Singapore
Italy
Brazil
%
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.
12.
PROPERTY, PLANT AND EQUIPMENT
Motor vehicles
At cost
Disposals
Accumulated depreciation
Office equipment
At cost
Disposals
Purchases
Accumulated depreciation
Furniture, fixtures and fittings
At cost
Disposals
Purchases
Accumulated depreciation
Right of Use Assets
At cost
Disposals
2020
$'000
2019
$'000
36
-
(36)
-
131
-
8
(119)
20
5
-
-
(4)
1
858
(177)
681
35
-
(35)
-
105
-
26
(101)
30
4
-
1
(4)
1
-
-
-
Total property, plant and equipment
702
31
CPT Global Limited – Annual Report
51
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2020
12.
PROPERTY, PLANT AND EQUIPMENT (Cont.)
(a) Reconciliations
Reconciliations of the carrying amounts of property, plant and
equipment at the beginning and end of the current financial year.
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
Purchases
Disposals
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
Purchases
Disposals
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
2020
$'000
35
-
-
1
36
(35)
(1)
-
(36)
-
131
8
-
139
(101)
(18)
-
(119)
2019
$'000
33
-
-
2
35
(33)
(2)
-
(35)
-
105
26
-
131
(88)
(13)
-
(101)
20
30
5
-
-
5
(4)
-
-
(4)
1
4
1
-
5
(4)
-
-
(4)
1
CPT Global Limited – Annual Report
52
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2020
12.
PROPERTY, PLANT AND EQUIPMENT (Cont.)
Right of use assets
Cost at beginning of year
Initial recognition under AASB16
Early termination of lease
Cost at end of year
Accumulated depreciation at beginning of year
Depreciation
Accumulated depreciation at end of year
Carrying amount
13.
INTANGIBLE ASSETS
Goodwill at cost
Accumulated impairment losses
Total goodwill
Intellectual Property at cost
Accumulated impairment losses
Total intellectual property
Software at cost
Disposals
Write back of accumulated amortisation on disposals
Accumulated amortisation
Total software
Total intangible assets
Year ended 30 June 2019
Balance at the beginning of the year
Amortisation charge
Year ended 30 June 2020
Balance at the beginning of the year
Impairment charge
Amortisation charge
CPT Global Limited – Annual Report
2020
$'000
-
1,040
(182)
858
-
(177)
177
681
2020
$’000
9,659
(9,659)
-
-
(75)
-
750
-
-
(750)
-
-
2019
$’000
9,659
(5,502)
4,157
75
-
75
750
-
-
(726)
24
4,256
Goodwill
$’000
Intellectual
Property
$’000
Software
$’000
4,157
-
4,157
4,157
(4,157)
-
-
75
-
75
75
(75)
-
-
116
46
24
24
-
23
1
53
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2020
13.
INTANGIBLE ASSETS (continued)
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 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
2020
$’000
-
-
2019
$’000
4,157
4,157
At 31 December 2019 there was an impairment indicator asset assessment undertaken of the intangible assets
allocated to the Australian CGU. As the Australian CGU had not achieved its revenue budget for the 6 month period
to 31 December 2019, an indicator of impairment existed and a valuation of intangible assets was performed to
determine the recoverable amount.
The valuation confirmed that the balance of goodwill and intellectual property were impaired and an impairment
loss of $4.2 million was recognised in the Statement of Profit and Loss. The impairment loss results in goodwill and
intellectual property being impaired to zero in the Statement of Financial Position.
The recoverable amount of 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 3.5% (30 June 2019: 3.5%).
Key Assumptions
The following key assumptions were used in determining the recoverable amount of goodwill:
Discount rate
Gross Margin
2020
2019
2020
2019
Australia
19.4%
19.4%
27.6%
29.0%
Compound
Annual Revenue
Growth
Terminal Growth
Rate
2020
4.0%
2019
8.9%
2020
3.5%
2019
3.5%
Management 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;
- Revenue growth rates;
- Terminal growth rates; and
- Corporate costs.
Discount rate – the discount rate is a pre-tax rate and reflects the risks associated with the CGU.
Gross profit margins – values assigned reflect past experience, margins on existing contracts and analysis of the
market conditions.
Revenue growth rates – reflects management’s expectations of revenue growth in the context of the Group’s
Australian market strategy. Compound annual sales growth represents the annual growth rate over the 5 year
forecast period. Revenue growth from FY19 to FY20 is budgeted at 5%.
CPT Global Limited – Annual Report
54
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2020
INTANGIBLE ASSETS (continued)
13.
Terminal growth rates – reflect management’s 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, industry
forecasts, 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 and other payables
Accruals
Annual leave provision
Contract liabilities
2020
$'000
2,995
1,165
460
544
5,164
2019
$'000
2,368
1,453
476
452
4,749
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.
Contract liabilities are recorded as a current liability as the underlying performance obligations are expected to be
completed within 12 months. The balance of unearned revenue at 30 June 2019 was recognised as revenue in
FY2020.
15.
BORROWINGS
CURRENT
Secured borrowings
Lease liabilities
Total current borrowings
NON-CURRENT
Lease liabilities
Total non-current borrowings
Unutilised financing facilities
Credit facility available
Amount secured utilised
Note
15(a)
15(b)
15(b)
15(a)
2020
$'000
592
226
818
491
491
2019
$'000
415
-
415
-
5,000
(592)
4,408
5,000
(415)
4,585
(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 $5.4m 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 2020, the available funding under the facility was $0.8m.
(b) Lease liabilities were initially recognised at the beginning of this financial year under AASB 16, therefore
there is no comparative information. The maturity analysis of lease liabilities is disclosed with financial
liabilities in note 30(c).
CPT Global Limited – Annual Report
55
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2020
16.
TAX
LIABILITIES
Current
Current tax liability
Non Current
Deferred tax liabilities comprise:
Prepayments
Unrealised foreign exchange gain
Reconciliation of deferred tax liabilities
Opening balance
Credited to the statement of comprehensive income as current tax
Closing balance
ASSETS
Current
Current tax asset
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
2020
$'000
2019
$'000
-
400
11
75
86
125
(39)
86
7
118
125
182
(57)
125
645
400
204
-
339
48
1
491
9
186
496
369
32
3
-
9
1,092
1,096
1,096
(4)
1,092
1,259
(163)
1,096
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 $1,178,382 (2019: $1,093,933). 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 FY2020 72% relate to the UK.
CPT Global Limited – Annual Report
56
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2020
17.
PROVISIONS
Current
Employee benefits – Long Service Leave
Total Current Provisions
Non-Current
Employee benefits – Long Service Leave
Total Non-Current Provisions
2020
$'000
775
775
-
-
2019
$'000
728
728
31
31
Total Provision
775
759
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 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.
Analysis of Total Provisions
Long Service Leave
Total
Opening balance at 1 July 2019
Provided for during the year
Taken during the year
Balance at 30 June 2020
18.
ISSUED CAPITAL
(a) Issued and paid up capital
38,260,251 (2019: 37,824,667)
fully paid ordinary shares
$'000
759
91
(75)
775
$'000
759
91
(75)
775
2020
$’000
12,396
12,396
2019
$’000
12,308
12,308
2019
(b) Movements in shares on issue
2020
Beginning of the financial year
New shares issued
Shares bought back and cancelled
End of the financial year
Number of
shares
37,824,667
464,383
(28,799)
38,260,251
$’000’
12,308
91
(3)
Number of
shares
37,318,525
506,142
-
12,396
37,824,667
$’000
12,228
80
-
12,308
(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 2020
28,799 ordinary shares were bought back under the on market buyback (2019: 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 2,385,106 were outstanding as at 30 June 2020.
CPT Global Limited – Annual Report
57
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2020
18.
ISSUED CAPITAL (Cont.)
(c) Options
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.
For information relating to share options issued to key management personnel during the financial year, refer to
the Note 22 Share Based Payments.
(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 2020 and 30 June 2019 are as follows:
Borrowings
Lease liabilities
Less cash and cash equivalents
Net cash
Total equity
Total capital employed
Gearing ratio
2020
$’000
592
717
(3,133)
(1,824)
2,743
2,743
0%
2019
$’000
415
-
(1,653)
(1,238)
6,368
6,368
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.
CPT Global Limited – Annual Report
58
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2020
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
20.
CASH FLOW INFORMATION
(a) Reconciliation of the profit after tax to the net cash flows
from operations
Net profit
Non-Cash Items
Depreciation and amortisation of non-current assets
Share based payment
Impairment loss
Changes in assets and liabilities
Decrease in trade and term receivables
Decrease/(Increase) in prepayments
(Increase)/decrease in contract asset
(Increase)/decrease in deferred tax asset
Increase/(decrease) in trade payables and accruals
Increase/(decrease) in income taxes payable
(Decrease) in deferred tax liabilities
(Decrease) in employee entitlements
Net cash flow from operating activities
2020
$’000
2019
$’000
(179)
(179)
(179)
21
21
21
2020
$'000
2019
$'000
(3,345)
992
220
-
4,232
660
(28)
468
4
484
(1,106)
(40)
-
1,549
58
15
-
732
220
700
163
(1,973)
(178)
(56)
(293)
380
There were no acquisitions or disposals of subsidiaries in the 2020 financial year.
(a) Changes in liabilities arising from financing activities
1 July 2019
$000
Cash flows
Non-cash changes
Re-classification
30 June 2020
$000
Short term borrowings
415
177
-
592
CPT Global Limited – Annual Report
59
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2020
21.
EXPENDITURE COMMITMENTS
The following disclosures relate to the 2019 financial year. With the
adoption of AASB16, operating lease commitments have been
recognised on balance sheet as lease liabilities from 1 July 2019.
(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
2019
$'000
168
160
328
Note:
The property lease is non-cancellable with a remaining term of 23 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.
22. SHARE-BASED PAYMENTS
The following share-based payment arrangements existed at 30 June 2020:
Directors
Performance
Rights
Issue
date
Expiry
date
Exercise
Price
As at 1 July
2019
Granted
As at 30
June 2020
Forfeited/
Exercised/
transferred/
expired
28/11/18
28/11/22
$0.00
450,000
450,000
-
-
-
-
450,000
450,000
On 28 November 2018, at the Company’s Annual General Meeting, 450,000 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 $28k. The fair value has been calculated using a Black Scholes pricing methodology
using the following inputs:
Weighted average exercise price
Maximum life of right
Underlying share price
$0.00
4 years
$0.145
As the exercise price is $0.00, share price volatility, risk free interest rate and dividend yield do not have a material
impact on the fair value of the performance rights.
CPT Global Limited – Annual Report
60
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2020
22. SHARE-BASED PAYMENTS (Cont.)
The exercise of these performance rights is contingent upon the following conditions being met:
No of Shares
to be Issued
100,000
50,000
100,000
50,000
100,000
50,000
Conditions to be met
The highest quoted (buy) price for CPT Global shares reaching or exceeding $0.37 for 5
consecutive business days during the period 28 November 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 $1.02m for the 2019 fiscal year
The highest quoted (buy) price for CPT Global shares reaching or exceeding $0.56 for 5
consecutive business days during the period 1 July 2019 and 30 June 2020 (both dates
inclusive)
The Company’s after tax profit (as reported in the Company’s 2020 annual report) reaching
or exceeding $1.54m for the 2020 fiscal year
The highest quoted (buy) price for CPT Global shares reaching or exceeding $0.84 for 5
consecutive business days during the period 1 July 2020 and 30 June 2021 (both dates
inclusive)
The Company’s after tax profit (as reported in the Company’s 2021 annual report) reaching
or exceeding $2.0m for the 2021 fiscal year
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 $0k 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:
2020
2019
Number of
options
Weighted
average exercise
price
Number of
options
Weighted
average exercise
price
Outstanding at the
beginning of the year
Granted
Forfeited
Exercised
Cancelled
Expired
450,000
-
-
-
-
-
Outstanding at year end
450,000
$
0.00
0.00
-
-
0.00
0.00
0.00
800,000
450,000
-
-
800,000
-
450,000
$
0.00
0.00
-
-
0.00
0.00
0.00
At 30 June 2020, there were NIL (2019: 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.
CPT Global Limited – Annual Report
61
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2020
23.
CONTINGENT LIABILITIES
Guarantees
CPT Global Limited has provided a guarantee $123k (2019: $123k) 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 11 months.
24.
EVENTS AFTER THE REPORTING PERIOD
On 25th August 2020 CPT Global Limited announced its intention to extend the on-market share buy back for a
further twelve months until 28th August 2021. A maximum of 3,000,000 shares may be bought back during the buy
back period, which will run from 28th August 2020 until 28th August 2021.
On 25th August 2020, a fully franked final dividend of 1.25 cents per share was declared for the 2020 financial year.
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 (loss)/profit & earnings used in calculating basic and diluted
earnings per share
Impairment expense
Earnings used in calculating earnings per share after tax but before
impairment
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
2020
$'000
2019
$'000
(3,345)
4,232
887
992
-
992
Number of
shares
Number of
shares
38,260,251
-
37,824,667
300,000
38,260,251
38,124,667
2020
$'000
2019
$'000
174
164
24
1
16
4
Other services relate to accounting and taxation services.
CPT Global Limited – Annual Report
62
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2020
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
Nigel Sandiford
Gerry Tuddenham
Grant Sincock
Luke Tuddenham
Position
Non-executive Chairman
Non-executive Director
Managing Director
Company Secretary and Chief Financial Officer
President North America
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 2020.
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
2020
$000
1,482
117
18
-
2019
$000
1,881
104
17
15
1,617
2,016
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.
CPT Global Limited – Annual Report
63
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Notes to the Financial Statements
Year Ended 30 June 2020
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
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 contract asset balances. Liabilities include trade creditors and accruals.
Unallocated items
The Board of Directors review segment performance to 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
64
For personal use only
Notes to the Financial Statements
Year Ended 30 June 2020
29.
OPERATING SEGMENTS (continued)
Segment Performance
Australia
Europe
North America
Consolidated
2020
$’000
2019
$’000
2020
$’000
2019
$’000
2020
$’000
2019
$’000
2020
$’000
2019
$’000
REVENUE
External Sales recognised over time 13,343
14,820
341
540
11,236
13,035
24,919
28,395
Total Group Revenue
24,919
28,395
Segment Gross Profit before tax
3,687
3,804
89
262
4,889
5,872
8,780
9,943
Reconciliation of segment result to
group profit/loss before tax
Goodwill impairment
Unallocated Items
- Overheads
Profit/ (Loss) before tax
Segment Assets
(4,232)
-
(7,880)
(8,212)
(3,331)
1,731
Australia
Europe
North America
Consolidated
2020
$’000
2019
$’000
2020
$’000
2019
$’000
2020
$’000
2019
$’000
2020
$’000
2019
$’000
Segment Assets
2,877
2,648
41
167
1,353
2,732
4,271
7,124
Segment asset increases for the
period:
-
Capital Expenditure
Reconciliation of segment assets to
group assets
Unallocated assets:
-
-
2,877
2,648
-
41
-
-
-
-
-
167
1,353
2,732
4,271
7,124
Goodwill
-
4,232
-
-
-
-
-
4,232
-
-
Property, plant & equipment
- Other Assets
Total Group Assets
702
87
5,104
2,941
10,077
14,384
CPT Global Limited – Annual Report
65
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Notes to the Financial Statements
Year Ended 30 June 2020
29.
OPERATING SEGMENTS (Continued)
Segment Liabilities
Australia
Europe
North America
Consolidated
2020
$’000
2019
$’000
2020
$’000
2019
$’000
2020
$’000
2019
$’000
2020
$’000
2019
$’000
Segment Liabilities
6,162
3,756
440
194
(129)
1,137
6,472
5,087
Segment liability increases
for the period:
-
Reconciliation of segment
liabilities to group liabilities
Unallocated liabilities:
-
Provisions
- Other Liabilities
Total Group Liabilities
Major Customers
-
-
6,162
3,756
-
440
-
-
-
-
194
(129)
1,137
6,472
5,087
786
1,242
-
-
-
-
-
-
76
-
119
-
862
1,361
-
7,334
6,448
CPT Global Limited provides services to a range of clients in the financial services and telecommunications industries.
CPT’s top 10 clients account for 84% of the group’s global revenue (2019: 81%), totalling $20.8m (2019: $22.9m).
Five of CPT’s clients contributed more than 10% of the annual revenue (26% - a major American bank, 25% - an
Australian government department, 8% - an American insurance company, 6% - a major Australian Bank and 6% -
an Australian university).
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 from financial and currency rate risk.
The main risks the group is exposed to through its financial instruments are interest rate risk, foreign currency risk,
liquidity risk and credit risk.
(a) 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 2020
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
2020
$'000
2019
$'000
2020
$'000
2019
2020
2019
$'000 $'000 $'000
2020
$'000
2019
$'000
2020
%
2019
%
(i) Financial assets
Cash and cash equivalents
Trade receivables
Total financial assets
(ii) Financial liabilities at
amortised cost
Bank overdrafts
Trade and sundry payables
Borrowings
Total financial liabilities
3,133
3,133
1,653
-
1,653
-
-
415
415
1,309
1,309
-
-
-
-
-
-
-
-
- 3,251
- 3,251
-
4,059
4,059
3,133
3,251
6,384
1,653
4,059
5,712
0.1
0.3
-
- 4,160
-
- 4,160
-
3,820
-
3,820
4,160
1,309
5,469
-
3,820
415
4,253
8.0
8.4
Interest rate risk arises on cash and cash equivalents, debtor funding facilities 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 $11k and decrease by
$11k (2019: increase by $4k and decrease by $4k).
(b) 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 2020
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
Brazilian real
US dollars
Sterling
Euro
Canadian dollars
Singapore dollars
2020
$'000
-
132
-
-
-
-
-
2019
$'000
-
180
-
-
-
-
-
2020
$'000
-
276
-
-
14
-
-
2019
$'000
-
273
-
-
18
-
-
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
2020
$'000
30
(181)
2019
$'000
44
(193)
2020
$'000
4
(229)
2019
$'000
(6)
(234)
2020
$'000
(27)
(126)
2019
$'000
(14)
(101)
2020
$'000
(25)
2
2019
$'000
11
28
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 2020
30.
FINANCIAL INSTRUMENTS (Continued)
(c) 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.
Maturity analysis
The table below represents the undiscounted contractual settlement terms for financial instruments and
management’s expectations for settlement of undisclosed maturities.
<12 months
2020
$'000
2019
$'000
1-5 years
2020
2019
$'000 $'000
Cash and cash equivalents
Receivables
Contract asset
Payables
Lease liabilities
Borrowings
3,133
3,251
1,115
(5,164)
(226)
(591)
1,653
4,059
1,583
(4,749)
-
(415)
Net maturities
1,518
2,131
-
-
-
-
(491)
-
(491)
-
-
-
-
-
-
-
Total contractual
cash flows
2020
$'000
3,133
3,251
1,115
(5,164)
(793)
(591)
2019
$'000
1,653
4,059
1,583
(4,749)
-
(415)
Carrying amount
2019
$'000
2020
$'000
3,133
3,251
1,115
(5,164)
(717)
(591)
1,653
4,059
1,583
4,749)
-
(415)
948
2,131
1,024
2,131
(d) 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.
Information of the Group’s credit risk exposure to any single debtor or group of debtors under financial
instruments entered into by the Group are included in note 8.
The Group minimises concentrations of credit risk in relation to trade receivables by undertaking transactions with
a large number of clients.
i.
ii.
Cash deposits
Credit risk for cash deposits is managed by holding all cash deposits with major Australian and global
banks.
Trade receivables
Credit risk for trade receivables is managed by setting credit limits and completing credit checks for
new customers. Outstanding receivables are regularly monitored for payment in accordance with
credit terms.
The ageing analysis of trade and other receivables is provided in note 8. As the Group undertakes
transactions with a large number of customers and regularly monitors payments in accordance with
credit terms, the financial assets that are neither past due nor impaired, are expected to be received
in accordance with the credit terms. The Group assess the expected credit loss based on individual
debtor level expectations relative to credit terms.
The Group does not have any material credit risk exposure for other receivables or other financial
instruments.
CPT Global Limited – Annual Report
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Directors’ Declaration
The directors of the company declare that:
1.
the financial statements and notes, as set out on pages 30 to 69, 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 2020 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, 30 September 2020
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INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF CPT GLOBAL LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of CPT Global Limited (the Company and its subsidiaries (the Group)) which
comprises the consolidated statement of financial position as at 30 June 2020, 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:
giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its financial performance
for the year then ended, and
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 & Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (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.
Brisbane
Level 14
12 Creek Street
Brisbane QLD 4000
T + 61 7 3085 0888
Melbourne
Level 10
530 Collins Street
Melbourne VIC 3000
T + 61 3 8635 1800
F + 61 3 8102 3400
Sydney
Level 8
167 Macquarie Street
Sydney NSW 2000
T + 61 2 8059 6800
F + 61 2 8059 6899
ShineWing Australia ABN 39 533 589 331. Liability limited by a scheme approved under Professional
Standards Legislation. ShineWing Australia is an independent member of ShineWing International Limited.
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1. Revenue Recognition
Area of focus
How our audit addressed the area of focus
Refer to Note 1(p) Accounting Policy; Note 3
Revenue, Note 9 Contract Asset.
The Group earned revenue of $24.919m during the
year and recognised contract assets of $1.115m at
reporting date. Revenue is earned from variable
(risk/reward) and fixed price contracts and is
recognised in accordance with AASB 15 Revenue
from contracts with customers.
Recognition of revenue is a key audit matter due to
the:
Revenue is recognised based on significant
judgments made by management regarding
estimated savings (MIPS or MSUs) the
customer is likely to realise. The results of
these judgments require significant audit effort
to gather sufficient appropriate audit evidence
for revenue recognition; and
Significance of revenue and contract assets to
the financial statements.
Our procedures included:
Documented and assessed the internal control
environment and performed tests of controls
Tested a sample of revenue to supporting
documentation and assessed whether revenue has
been accurately recorded in accordance with
contractual terms
Confirmed new contracts executed during the year
have been accounted for in accordance with AASB
15
Performed trend analysis and other analytic
techniques on revenue to validate amounts recorded
during the year
Ensured estimated savings detailed in project status
reports and recognised as revenue have been
acknowledged and approved by the Group’s
customers, and
Ensured contract assets have been invoiced
subsequent to year end.
We also reviewed the adequacy of revenue related
disclosures in the financial statements.
2. Recognition of deferred tax assets
Area of focus
How our audit addressed the area of focus
Refer also to Note 1(b) and Note 1(w)(iii)
(Accounting Policy), Note 16 (Tax).
The Group has recognised $1.092m deferred tax
assets on the statement of financial position, the
recognition of which involves judgement by
management as to the likelihood of the realisation
of these deferred tax assets, which are based on a
number of factors including whether there will be
sufficient taxable profits in future periods to support
recognition.
The Group also operates in a number of tax
jurisdictions with differing tax laws and regulations
increasing the potential for misstatement of tax
related balances and transactions.
Our procedures included:
Evaluated the directors’ assessment as to whether
there will be sufficient taxable profits in future periods
to support the recognition of deferred tax assets by
comparing the directors’ forecasts to historical
results, and evaluating the assumptions used in
those forecasts
Engaged tax experts to review managements
calculations and application of relevant tax laws and
regulations
Reviewed income tax provision calculations for each
jurisdiction, and
Reconciled income expense to prima facie expense
for the year.
We also considered the adequacy of the disclosures in
relation to the recognition of deferred tax assets.
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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 2020, 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 has no realistic
alternative but to do so.
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 also:
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.
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.
evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the directors.
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.
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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.
obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
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, actions taken to eliminate threats or safeguards applied.
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.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 20 to 26 of the directors’ report for the year ended 30
June 2020.
In our opinion, the Remuneration Report of CPT Global Limited for the year ended 30 June 2020 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, 30 September 2020
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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)
Nigel Sandiford
(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
2020 Annual General Meeting
The Annual General Meeting of CPT Global Limited
members will be held on Wednesday 25th November
2020 at 10.30 am at CPT Global’s head office at Level
3, 818 Bourke Street, Docklands, 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
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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 11th of September 2020.
(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:
72
297
146
239
45
799
41,611
824,112
1,145,718
7,843,645
28,405,165
38,260,251
231
343,613
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(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
BNP PARIBAS NOMINEES PTY LTD
TUDDY SUPER PTY LTD
1
SONDA FONDO DE INVESION PRIVADO
2
CLAPSY PTY LTD
3
4
GNP NOMINEES
5 MR LUKE TUDDENHAM
6
7 MR BEN TUDDENHAM
8 MR PHILIP ADAM & MRS SANDRA ADAM
9 MR PAWEL REJ & MRS MIROSLAWA REJ
10 MR FRED GRIMWADE
11 MR KEVIN AKOM
12 PETHOL (VIC) PTY LTD
13 MR NEVILLE HASKETT & MRS VICKI HASKETT
14
FIVE TALENTS LIMITED
15 MRS ALISON BOLGER
16 MRS JULIE ANN CAREY
17 MR MICHAEL LAZORIK
18 CITICORP NOMINEES PTY LTD
19 MR DAVID LYNCH
20 MR NIGEL SANDIFORD
9,779,590
2,664,993
2,628,056
2,282,799
891,254
847,070
810,398
786,608
758,641
718,200
565,013
500,000
500,000
482,369
362,550
326,000
300,000
281,862
266,460
229,836
25,981,699
25.6%
7.0%
6.9%
6.0%
2.3%
2.2%
2.1%
2.1%
2.0%
1.9%
1.5%
1.3%
1.3%
1.3%
0.9%
0.9%
0.8%
0.7%
0.7%
0.6%
67.9%
CPT Global Limited – Annual Report
76
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ASX Additional Information
(c) Shares held in escrow
As at 11th September 2020, 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
9,783,705
2,282,799
2,664,993
2,628,056
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
77
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