COMPUTERSHARE ANNUAL REPORT 2017
This financial report covers the consolidated entity consisting of
Computershare Limited and its controlled entities.
The financial report is presented in United States dollars (USD),
unless otherwise stated.
Computershare Limited is a company limited by shares,
incorporated and domiciled in Australia. Its registered office and
principal place of business is:
Computershare Limited
Yarra Falls
452 Johnston Street, Abbotsford
Victoria 3067 Australia
The financial report was authorised for issue by the directors on
18 September 2017. The company has the power to amend and
reissue the financial report.
A separate notice of meeting including a proxy form is enclosed
with this financial report.
CONTENTS*
OVERVIEW
Financial highlights and financial calendar
Chairman’s Report
CEO’s Report
Computershare at a glance
Key financial metrics
Growth
Profitability
Capital Management
Corporate Responsibility
People
Group Operating Overview
Business Strategies and Prospects
GOVERNANCE
Corporate Governance Statement
Directors’ Report
Auditor’s Independence Declaration
FINANCIALS
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Cash Flow Statement
Notes to the Consolidated Financial Statements
REPORTS
Directors’ Declaration
Declaration to the Board of Directors
Independent Auditor’s Report
FURTHER INFORMATION
Shareholder information
Corporate directory
4
5
6
8
10
12
14
15
16
18
20
22
24
36
52
53
54
55
56
57
104
105
106
113
114
* The Chairman’s Report, Chief Executive Officer’s Report, Group Operating Overview and Business Strategies and Prospects comprise our Operating and Financial Review
(OFR) and form part of the Directors’ Report.
FINANCIAL HIGHLIGHTS
STATUTORY RESULTS
Total revenue
Net profit after non-controlling interests (NCI)
Statutory earnings per share
MANAGEMENT ADJUSTED RESULTS
Management EBITDA1
Management net profit after NCI1
Management earnings per share1
BALANCE SHEET
Total assets2
Total shareholders’ equity2
PERFORMANCE INDICATORS
Free cash flow (excluding SLS advances)3
JUNE 2017
JUNE 2016
% CHANGE
2,105.8 million
1,961.1 million
266.4 million
157.3 million
48.76 cents
28.55 cents
540.8 million
532.6 million
297.3 million
303.5 million
54.41 cents
55.09 cents
3,947.0 million
3,975.5 million
1,237.0 million
1,106.5 million
7.4%
69.4%
70.8%
1.5%
-2.0%
-1.2%
-0.7%
11.8%
362.2 million
335.8 million
7.9%
Net debt to management EBITDA (excluding non-recourse debt)1
1.60 times
2.12 times
-0.52 times
Return on equity1
Staff numbers
25.60%
17,706
26.90%
Down 130 bps
17,839
For a reconciliation between statutory and management adjusted results, refer to note 4 in the notes to the financial statements.
1 These financial indicators are based on management adjusted results. Management adjusted results are used, along with other
measures, to assess operating business performance. The Group believes that exclusion of certain items permits better analysis of
the Group’s performance on a comparative basis and provides a better measure of underlying operating performance. Management
adjustment items that were income to the Group are included in statutory results as other income and therefore management total
revenue is consistent with statutory total revenue. Return on equity is calculated as management NPAT after NCI over average
monthly shareholders’ equity.
2 The June 16 balance has been restated to reflect the correction of an immaterial prior period error which resulted in the reduction of
the Milestone carrying value by $2.2 million.
3 Reclassification of dividends received from associates and joint ventures from investing cash flows to operating cash flows in
June 2016.
Where constant currency references are used in this report, constant currency equals FY2017 results translated to USD at FY2016
average exchange rates.
FINANCIAL CALENDAR
2017
2018
23 AUGUST 2017
Record date for final dividend
14 FEBRUARY 2018 Announcement of financial
18 SEPTEMBER 2017 Final dividend paid
14 NOVEMBER 2017
The Annual General Meeting of
Computershare Limited ABN 71 005 485 825
LOCATION:
Computershare Conference Centre
Yarra Falls, 452 Johnston Street
Abbotsford, Victoria 3067
TIME:
10.00am
results for the half year ending
31 December 2017
4
Computershare Annual Report 2017 CHAIRMAN’S REPORT
I am pleased to report that Computershare
delivered solid earnings growth, strong free
cash flow and an increased dividend for
shareholders in FY2017.
With our growth, profitability and capital
management strategies beginning to drive
improved returns, we are entering a new
period of sustained earnings growth at CPU.
YEAR IN REVIEW
OUTLOOK
FY2017 marked an important inflection point in Computershare’s
earnings. We delivered management EPS in line with upgraded
guidance, an increase of 3.5% on FY2016 in constant currency
terms, which is a solid result given the challenges we faced during
the year. These included cyclically depressed corporate action
revenues, the lowest margin income yield in the Company’s
history and a higher tax rate. Positively, in the second half, margin
income improved for the first time in several years. Given these
challenges, our results show the strength of our underlying
business performance.
Most significantly, we are positioning Computershare for a
period of sustained earnings growth. FY2017 was the beginning
of a multi-year earnings growth phase. Our starting guidance for
FY2018 assumes around 7.5% growth in management EPS in
constant currency.
Whilst we do not specifically guide to management EBITDA, we
do expect it to grow at a faster rate than EPS. In bridging the two,
we note that amortisation and the tax rate are increasing as our
US businesses, including mortgage services, contribute a larger
share of Group profits.
We carefully designed deliberate strategies to drive this
strengthened performance and earnings potential. In FY2016 we
assessed our growth opportunities, invested in our capabilities
and improved our competitive strengths. In FY2017 we made
encouraging progress and delivered both earnings growth
and strong cash flow; with our growth engines and cost out
management strategies contributing to our profitability.
We are building significant earnings potential with our growing
mortgage services businesses and our global share plans
business. At the end of this financial period, our share plans
business had around $125 billion of assets under administration.
Adding in our multi-stage cost out program and the $16.7 billion
of average client balances that we manage, we believe we can
deliver sustained earnings growth.
Our balance sheet also continues to strengthen given our
significant cash flow and our moves to simplify the Computershare
business. We sold both our Melbourne headquarters and our
investment in INVeSHARE during the year. Our debt leverage
ratio is now below our policy range, enabling us to announce a
new share buy-back program. The final FY2017 dividend is
AU 19 cents, a rise of 11.8%, which brings the total dividend for
the year to AU 36 cents, an overall increase of 9.1% for the year.
ACKNOWLEDGMENTS
Computershare is well placed to deliver more value to
shareholders, clients and communities. On behalf of my fellow
Directors, I thank you for your support as a shareholder and look
forward to your continuing involvement in FY2018.
I would also like to thank all of our people around the world for
their dedicated efforts in delivering these results. I know you are
extremely capable and deeply committed to delivering the best
outcomes for clients, and that every day you live Computershare’s
special culture by “doing the right thing”.
Finally, I would also like to thank Stuart Irving, our CEO and
President, for his talented and dedicated leadership; and the rest
of my fellow board members for their expertise, skills and support.
Simon Jones
Chairman
5
CEO’S REPORT*
We are progressing with our strategic priorities
to build growth engines, reduce costs to improve
profitability and manage our capital to enhance
returns for shareholders.
In FY2017, Management Revenue was up by
10.6%. Our revenues benefited from the maiden
contribution from the UKAR contract, our largest
ever contract win. Excluding UK mortgage
services, Group revenue increased by around
1.1% percent, with a slight acceleration in the
second half.
Management EPS came in at 57.04 cents, an increase of 3.5%.
Management EBITDA was $557.2 million, an increase of 4.6%.
Around 55% of our earnings were delivered in the second half.
Excluding margin income, underlying EBITDA was up by 9.6%.
FY2017 – BUILDING SUSTAINED EARNINGS GROWTH
Our growth, profitability and capital management strategies are
driving our performance and importantly, our earnings power.
This earnings power is important because it gives us the
confidence to highlight our belief that we are at the beginning
of a multi-year earnings growth phase.
Growth
Our self-funded growth engines have performed strongly
in FY2017.
Mortgage services increased revenues by 71%. On a combined
basis across the US and UK, this business now accounts for
almost 25% of Group revenues; it’s a sizeable business with rising
profitability. EBITDA effectively doubled to $78 million.
The two main lead indicators in this business are unpaid principal
balances (UPB; the value of loans under service) and service
quality. These are the foundations for building a profitable and
sustainable business.
We are executing to plan in US mortgage services, and continue
to build towards scale and the anticipated returns we affirmed at
our Investor and Analyst Briefing in April. At the scale of servicing
approximately $100 billion of UPB, we are seeking to build a
business that will deliver 20% profit before tax margins and
12-14% post tax, post maintenance capex free cash flow return
on average invested capital.
At the end of June the UPB we serviced in our US business grew
to $59.7 billion, up from $52.9 billion and in the UK, we serviced
£64 billion.
Our reputation for service quality also continues to grow and
we continue to be rated as one of the world’s best mortgage
servicers by rating agencies. In this sensitive market, where
service quality can determine regulatory risk, our reputation for
quality is creating new servicing opportunities for us with the
major banks and mortgage bond holders.
The UKAR contract is a good news story, the integration is ahead
of plan and the anticipated synergy benefits are being delivered,
with more to come. We won a number of new originating
challenger bank clients in the period. These will grow their
originations over the medium term, helping to build a sustainable,
growth business.
Share plans are our other growth engine. This business enjoys
a combination of structural growth and at the moment, cyclical
recovery. Excluding margin income where low rates affected our
yield, especially in the key UK market; revenues increased by
13% and EBITDA increased by 58%.
The fundamental earnings driver for this business is the number
of units, typically the number of share options and performance
rights, which we administer. Assuming these units become “in
the money” as equity markets rise, they are likely to be exercised
at some point. At the time of exercise, a sell or transfer order is
usually created, and these orders generate transactional revenues
for us. We administer around $125 billion of these units around
the world. Our scale means we are able to drive operating
leverage as well as provide data insights to our clients who strive
to create effective plans for both retaining and rewarding their
employees. This unique value proposition is resonating well.
* All references to Management Results in the CEO’s report are in constant currency unless otherwise stated
6
Computershare Annual Report 2017 Profitability
Our cost management program is on track and beginning to
deliver the expected benefits. $13.7 million of savings were
realised in FY2017, which is slightly ahead of schedule. Our
target of $85 million – $100 million total savings, which we have
published for stages one and two of the program, is also on
track. With stage three to be quantified next calendar year, we
expect there is more to come in this area.
We can already see these cost saving initiatives driving margin
improvement in our mature registry business line. Specifically in
US registry, the largest in the Group, EBITDA increased at a faster
rate than the Group average. Register maintenance was affected
by the loss of flow-on effect from corporate actions. We look
forward to a modest recovery in corporate actions in FY2018.
Margin income is another profit driver and part of our earnings
potential. Lower yields were again a drag on earnings in FY2017.
Margin income fell by $11.7 million in the period. I am pleased
to say that this drag, after many consecutive halves of decline,
has turned positive. Margin income increased by $1.8 million in
the second half of the year. Yields are slowly recovering from the
lowest level in Computershare’s history and we stand to benefit if
more rate rises eventuate as markets anticipate. With $16.7 billion
of actual average daily client balances in FY2017 and $10.2 billion
being exposed to interest rates, we have significant leverage to a
rising rate cycle, which is part of our earnings potential.
Capital management
Capital management is our strategy to enhance shareholder
returns and free cash flow is a strong feature of these results.
At actual exchange rates, we generated free cash flow of over
$362 million in the year. With the proceeds from asset sales
we are simplifying the business and recycling capital for higher
growth and returns.
In this period we were able to reduce our leverage ratio to 1.60x,
which is below the 1.75 times to 2.25 times policy range. This
gives us additional capacity to self-fund our growth and drive
improved returns for shareholders. The 1.60x number does not
include the $90 million of sale proceeds we expect from the sale
of our share in our Indian JV with Karvy, which should close later
this year.
We also continue to be presented with inorganic growth
opportunities. Any purchase must be within our core
competencies and be strategically aligned to the existing Group
business. Furthermore it must be financially accretive. We are
highly disciplined in this regard.
FY2018 OUTLOOK – A SIMPLER, MORE TRANSPARENT,
DISCIPLINED AND PROFITABLE COMPUTERSHARE
The execution of our growth, profitability and capital management
strategies is underway and on track. Our underlying business
performance is robust and we are building significant earnings
potential to drive future performance.
We will continue to grow mortgage services, maintain our
profitability in registries, invest for growth in employee share
plans and support these initiatives with a rigorous and ongoing
cost management program. We look forward to margin income
continuing to recover.
We will also continue to manage and recycle capital to self-fund
our growth and improve returns for shareholders. Our business
model, with around 70% of revenues recurring, generates strong
free cash flow.
In conclusion, I would like to re-affirm a commitment we made
in February 2016 when this journey to the “new Computershare”
began. We said then a simpler, more transparent, disciplined
and profitable Computershare is emerging, with a focus on
building and protecting scale in core markets to drive operating
leverage, delivering sustained earnings growth and improved
shareholder returns.
This is as true and relevant today as it was then. In FY2016 we
made meaningful progress defining and setting out the strategies
for the Group. In FY2017 we started executing against these
strategies and doing what we said we would do. We have
demonstrated more progress, and have started to deliver positive
earnings growth. In FY2018 and beyond we will continue our
relentless pursuit of this goal.
In delivering these strategies I must thank all the Computershare
staff globally who have worked so diligently in challenging markets
to deliver this result.
We are proud of Computershare’s special culture that motivates
us to “do the right thing”, whether that’s driving innovation or
delivering exceptional service to our clients. You can see that
coming through in our results and we look forward to making
further progress in the year ahead.
Stuart Irving
Chief Executive Officer and President
7
COMPUTERSHARE AT A GLANCE
Stockholm
Doxford
Crossflatts
Copenhagen
Rotterdam
London
Edinburgh
Skipton
Dublin
Monaghan
Bristol
Jersey
Madrid
Barcelona
Paris
Rome
Milan
Turin
Frankfurt
Munich
Olten
Hyderabad
Beijing
Hong Kong
Manila
Johannesburg
Perth
Adelaide
Maroochydore
Brisbane
Sydney
Melbourne
Auckland
KEY OPERATIONAL STATS (AS AT 30 JUNE 2017)
~8 billion
21
Market cap
countries
95
offices
16,000
125 million*
clients
shareholders and
participants
*Includes Indian JV
8
Computershare Annual Report 2017 Calgary
Vancouver
San Francisco
Los Angeles
Chicago
Denver
Louisville
Phoenix
College Station
Toronto
Montreal
Boston
New York
New Jersey
STAFF NUMBERS
IN EACH REGION
5,611
ASIA
1,568
AUSTRALIA AND
NEW ZEALAND
1,169
CANADA
399
CONTINENTAL
EUROPE
4,408
UNITED KINGDOM,
CHANNEL ISLANDS
AND AFRICA
4,551
UNITED
STATES
13.9 million $125 billion $16.7 billion $59.7 billion £64 billion
calls handled by
our call centres
share plan assets
under administration
client balances
UPB under
service (US)
UPB under service
in (UK)
9
KEY FINANCIAL METRICS
MANAGEMENT
REVENUE
2025.1 2022.6 1976.1
1974.2
2114.0
MANAGEMENT
EBITDA
540.6
554.1
532.6
540.8
509.8
13
14
15
16
17
MANAGEMENT
EPS
60.24
59.82
54.85
55.09
54.41
n
o
i
l
l
i
m
D
S
U
s
t
n
e
c
D
S
U
13
14
15
16
17
STATUTORY
EPS
45.20
48.76
28.25
27.61
28.55
s
t
n
e
c
D
S
U
13
14
15
16
17
13
14
15
16
17
CASH FLOW FROM
OPERATIONS
457.7
DIVIDEND
PER SHARE
409.3
372.1
334.0
305.1
36
33
31
28
29
n
o
i
l
l
i
m
D
S
U
13
14
15
16
17
13
14
15
16
17
n
o
i
l
l
i
m
D
S
U
s
t
n
e
c
D
U
A
10
Computershare Annual Report 2017
NET OPERATING
CASH FLOW
EXCLUDING
SLS ADVANCES
445.4
360.0
416.7
420.3
373.2
NET DEBT TO EBITDA
RATIO EXCLUDING
NON-RECOURSE SLS
ADVANCE DEBT
2.33
n
o
i
l
l
i
m
D
S
U
2.12
1.96
1.86
1.60
s
e
m
T
i
13
14
15
16
17
13
14
15
16
17
REVENUE BY PRODUCT
1% Technology and
other revenue
8% Communication
services
11% Employee
share plans
4%
Stakeholder
relationship
management
EBITDA BY PRODUCT
1% Technology and
other revenue
7% Communication
services
10% Employee
share plans
2%
Stakeholder
relationship
management
Register
maintenance 33%
Corporate
actions 6%
Business
services 37%
Register
maintenance and
corporate actions
48%
Business
services 32%
11
11
GROWTH
Building growth engines in employee share plans and mortgage services
MORTGAGE SERVICES
In the US and UK, Computershare offers a full range of services across the mortgage services value chain.
It’s an industry we have grown to know well, that aligns with our core strengths. We are building competitive
differentiation through our focus on servicing quality, technology and product offerings.
FINANCIAL RESULTS IN FY2017
US mortgage services revenue
UK mortgage services revenue
Total mortgage services revenue
Total mortgage services EBITDA
HIGHLIGHTS
WE SERVICE
COMPARISON IN CONSTANT CURRENCY ($ MILLION)
FY2017 @ CC
FY2016 ACTUAL
CC VARIANCE
$257.2
$280.6
$537.8
$78.0
$222.0
$93.3
$315.3
$39.5
+15.9%
+200.8%
+70.6%
+97.5%
$59.7 billion
£64 billion
~ 600K mortgages
UPB in the US
UPB in the UK
across US and UK
INNOVATIVE
SOLUTIONS
US
> Third party mortgage solutions offering
>
1st generation private label program for prime
sub-servicing clients
> New Property Solutions website
UK
> New online mortgage customer service platform,
iConnect
INCREASED
RATED
INTEGRATED
COMPLETED
Capital Markets Cooperative patron count to 431 mortgage companies
The highest mortgage servicer ratings globally (Fitch Ratings and Standard and Poor’s)
> UK mortgage services
> Loan boarding
functionality, targeting a
single platform in FY2019
function, based in
Denver, US
> Capital Markets Cooperative and Altavera,
allowing us to provide services across the
mortgage services value chain in the US
> $4 billion Federal National Mortgage Association mortgage servicing rights excess deal with a new capital
partner “Oakhill Advisors”, recycling over $24 million in capital
> First Specialized Loan Services managed sale of $200 million in Federal Home Loan Mortgage Corporation
non-performing loans
> Government National Mortgage Association/Federal Housing Administration readiness program
FOCUS FOR FY2018
US MORTGAGE SERVICING
UK MORTGAGE SERVICING
> Continue to build scale to $100 billion Unpaid
Principal Balances
> Drive diversified revenue mix
>
Increase efficiencies and productivity
through technology
> Continue integration of UK mortgage services
functionality onto a single platform
> Target the retail banks, with increasing regulatory
costs driving outsourcing needs in this market
> Grow servicing volumes for new challenger
bank clients
12
Computershare Annual Report 2017 EMPLOYEE SHARE PLANS
Computershare leverages local knowledge and full service expertise to support complex global requirements
for our employee share plan clients. We offer technology that helps clients provide share plans to reward and
retain their employees. Our growth strategy is to continue to build the client base and volume of assets under
administration to drive high quality recurring revenues coupled with potential transaction fees.
FINANCIAL RESULTS IN FY2017
Total employee share plans revenue
Employee share plans EBITDA
EBITDA margin %
EBITDA ex margin income
HIGHLIGHTS
WE ADMINISTER
COMPARISON IN CONSTANT CURRENCY ($ MILLION)
FY2017 @ CC
FY2016 ACTUAL
CC VARIANCE
$235.6
$60.8
25.8%
$42.4
$222.2
$56.5
25.4%
$26.8
+6.0%
+7.6%
+40bps
+58.2%
INNOVATIVE
SOLUTIONS
IMPROVED
INTEGRATED
LAUNCHED
$125 billion
of share plan assets
$1.8 billion
client balances
> Leveraging data insight and share plans expertise to optimise reward and retain outcomes globally
> New application to enhance user experience and design for equity professionals in Australia
>
Improved research and insight program to ensure Computershare remains the market leader in the US
> Established a Professional Services Group to enhance offering in the US
Overall client satisfaction, with Net Promoter Score for share plans in the UK increasing by 41 points
SyncBase financial reporting solution
> Lenovo’s global employee share plan, spanning
> New share plan for 4,000 Maire Tecnimont
25 jurisdictions and 25,000 participants
employees in Italy
FOCUS FOR FY2018
EMPLOYEE SHARE PLANS
> Continue to invest in customer
facing technology and product
refreshes to improve our
competitive position
> Roll out data analytics and
new reporting capabilities
> Complete current service
improvement programme
13
PROFITABILITY
Reducing costs to deliver margin expansion and improved profitability
Our cost management program is on track and beginning to deliver the expected benefits, with $13.7 million of
savings realised in FY2017. Our target of $85 million – $100 million total savings for stages one and two is also on
track, with stage three to be quantified next calendar year.
ACTIVITY
Stage 1
Louisville (unchanged)
Stage 2
Spans of control
Operational efficiencies
Procurement
Process automation
Other
Total estimate
TOTAL COST SAVINGS ESTIMATES
$ MILLION
EXPECTED BENEFIT REALISATION (CUMULATIVE)
FY2020
FY2017
FY2018
FY2019
25 - 30
~15
10 - 15
5 - 8
~20
10 - 12
28%
45%
-
-
-
-
85 - 100
13.7
45%
70%
100%
95%
20%
50%
20%
50%
42.0
100%
80%
100%
80%
100%
78.1
100%
100%
92.8
These cost saving initiatives are driving margin improvement in our mature registry business line. Specifically, in
US registry, the largest in the Group, where EBITDA also increased at a faster rate than the Group average. However,
overall register maintenance revenues were impacted by the loss of flow on effect from corporate actions.
FINANCIAL RESULTS IN FY2017
COMPARISON IN CONSTANT CURRENCY ($ MILLION)
CC VARIANCE
FY2017 @ CC FY2016 ACTUAL
$703.4
$125.8
$829.2
$262.8
31.7%
$202.3
$727.8
$140.5
$868.3
$266.0
30.6%
$206.3
-3.4%
-10.5%
-4.5%
-1.2%
+110bps
-1.9%
Register maintenance revenue
Corporate actions revenue
Total register maintenance & corporate actions revenue
Register maintenance & corporate actions EBITDA
EBITDA margin %
EBITDA ex margin income
HIGHLIGHTS
INNOVATIVE
SOLUTIONS
> Portfolio Tax Pack for shareholders in Australia
> Private markets solution in the US
>
Integrated Nasdaq’s beneficial holder analysis
capabilities into Australian Issuer Online
> Enhanced third party data access to payment
information for audit and tax professionals in
Australia
> New online share sale facility for NZ holders who
hold Australian stocks
> New products in US Real Estate Investment
Trust market
> Virtual meeting product, allowing US companies
to host a virtual or hybrid AGM
> New tablet based voting system for AGMs in Germany
> Electronic admission cards for AGMs in Denmark
RATED
98% positive
UK’s No. 1 registrar
in the JP Morgan Registry Survey (Australia)
for the third year in a row
INCREASED
> Number of staff located in Louisville to over 600
FOCUS FOR FY2018
REGISTRY
> Continue to be the leading global provider of
registry services
> Drive margin growth by developing innovative
solutions, cross-selling services and increasing
operational efficiency
> Explore opportunities to cross-sell beyond pure
registry (Corporate Trust, Virtual Meetings,
Compliance and Governance Solutions)
14
COST MANAGEMENT
> Roll out a whole of organisation framework
for operations reporting to improve processing
efficiency
> Continue to automate and digitise internal
applications
> Transition the Louisville migration to a
business as usual state
Computershare Annual Report 2017 CAPITAL MANAGEMENT
Enhancing shareholder returns
Capital management is a strategy for us to enhance shareholder returns. We generated free cash flow of over
$362 million in the year.
This strong free cash flow enables us to reduce debt and increase distributions to shareholders. It also provides
us with the flexibility to consider inorganic growth opportunities albeit on disciplined acquisition criteria.
CPU SHARE PRICE
PERFORMANCE VS. ASX 200
SINCE IPO 27 MAY 1994 >
30 JUNE 2017
CPU SHARE
PRICE
+12409%
ASX 200
+181%
HIGHLIGHTS
DELEVERAGED
INCREASED
> Net debt (excluding non-recourse SLS advance debt) fell 23.1% to $867.7 million
> Net debt to EBITDA ratio down to 1.60x from 2.12x. Below board target range of between
1.75x – 2.25x creating additional capacity to enhance shareholder returns.
> Full year dividends of AU 36 cents per share,
>
+9.1% on pcp
Includes final FY2017 dividend AU 19 cents,
+11.8% on pcp
RECYCLING CAPITAL TO GROWTH ENGINES
> Disposal of CPU’s
> Disposal of
> Acquired $85.8 million of net US mortgage
global headquarters
in Melbourne
investment in
INVeSHARE Inc
servicing rights
CONTINUED
To apply disciplined acquisitions criteria, including scale, alignment with CPU core competencies and
potential to be financially accretive
EXAMINED
Land registry opportunities
FOCUS FOR FY2018
CAPITAL MANAGEMENT
> Complete share buy-back of
up to AUD 200 million
> Finalise the $90 million sale of
our Indian joint venture, Karvy
Computershare
> Enhance operating earnings
to improve total returns
for shareholders
15
CORPORATE RESPONSIBILITY
We know that corporate responsibility is part of doing business successfully. Computershare is committed to
acting in an environmentally friendly and socially responsible manner and we seek to do so throughout our
global business operations and activities.
SUSTAINABILITY
We have sustainability and environmental programmes in place around the globe to further minimise our already low impact on
the natural world, underpinned by our environmental policy and annual sustainability objectives. For more information, please
visit www.computershare.com/cr
PROGRESS ON OBJECTIVES
GREEN OFFICE
CHALLENGE 7
TREE
PLANTING
PROGRAM
EXISTING
REDUCTION
TARGETS
NEW REDUCTION
TARGETS
> We received 36 eligible
> During FY2017 we planted
entries globally for our 7th
Green Office Challenge: the
Green Oscars
> Projects delivered either an
environmental or a community
benefit for local areas
> The global winner was an
initiative in Hong Kong.
Employees sold handmade
exfoliating soap made from
office coffee grounds in aid of
a local environmental charity
1,988 trees around the world
as part of our commitment
to lower the impact of our
business flights
> During their lifetime, these
trees will cover ~10% of
the carbon emitted by our
business air travel in FY2016
> We will work with our partners
around the world to plant
further trees relative to
FY2017 air travel
> We have reduction targets
in place across six of our
locations
> Burr Ridge and Munich
relocated during FY2017
so data benchmarking has
recommenced
> A summary is below, with
further details available on our
website. We continue to try
and meet targets that have not
yet been achieved
> We have set new five-year
reduction targets at five
additional locations
> We now measure electricity
and gas consumption against
office size (SQM), not FTE.
Based on analysis of our
existing targets, this has
been shown to provide more
accurate results and will be
adopted in all future electricity
and gas reduction targets
REDUCTION TARGETS
8
1
/
7
1
0
2
S
T
E
G
R
A
T
0
2
/
9
1
0
2
S
T
E
G
R
A
T
Melbourne, AU
Bristol, UK
East Beaver Creek, CA
Burr Ridge, USA*
Canton, USA
Auckland, NZ
Hong Kong
Munich, DE*
GENERAL WASTE
ELECTRICITY
NATURAL GAS
WATER
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
* At time of relocation. Targets will be replaced once benchmark data has
been collected.
= target currently achieved
= target not achieved
LOCAL ACHIEVEMENTS
BRISTOL, UK
MUNICH,
GERMANY
NEWPORT, UK
NORTH
AMERICA
Employees were given a free
reusable cup to purchase hot
drinks, saving 10,000 disposable
cups from landfill so far.
Our team relocated to
LEED-certified offices and
overhauled their IT infrastructure,
resulting in a reduction in
electricity consumption of ~50%.
We’ve switched our primary data
centre in EMEA to a data hall in
Newport, UK, which uses 100%
renewable energy.
Our US and Canadian offices
have achieved a 20% reduction
in printer paper use over the last
five years.
FOCUS FOR FY2018
>
Increase our environmental
data collection and reporting
> Expand our global tree
planting program
>
Investigate the use of the
Green Cloud to reduce
carbon footprint
16
Computershare Annual Report 2017
COMMUNITY
In addition to the volunteer opportunities we give our employees each year, many staff members also contribute to ongoing
community events and charity initiatives in their local area.
13
20
20
30
113
reading and number
buddies supporting local
schools in Bristol
Christmas hampers
donated to families in
need in Australia
jars of honey from our
beehives in Bristol, UK
sold at a charity auction
computers donated to
schools in the US
pairs of glasses
donated in the US
200+
286
500
3,000+
£58,000+
clothing items and
blankets donated to
homeless people in
Australia
cups of hot soup served
to the homeless on
Nelson Mandela Day in
South Africa
coats donated during
Homelessness Awareness
Week in the UK
items of clothing
donated in global Dress
for Success campaign
donated to housing
charities in the UK by
The DPS Charity
Donations Fund
CHANGE
A LIFE
> AUD 8 MILLION RAISED FOR CHANGE A LIFE SINCE LAUNCH
> DONATIONS OF AUD 990,000 SUPPORTED OUR PROJECTS IN FY2017
Founded in 2005, Change A Life is our global community giving program that invests in projects that provide long-term solutions to the
communities involved. We focus on long-term change that is felt on a global stage and provides an opportunity for people to build up their
skills for a brighter and more sustainable future. Computershare matches all employee payroll donations.
CURRENT PROJECTS
Farmer Managed Natural
Regeneration – Ghana
Change A Life’s sixth World Vision project
has worked to reduce the annual hunger
gap for over 8,400 children and their
families in Talensi District, Ghana. The
five-year project, ending in September
2017 has helped teach land management
skills that lead to better harvests, more
sustainable food production and a
healthier ecosystem for the entire region.
Come-Share Education
Project – Sri Lanka
Come-Share provides educational funding
for children from year ten (O level)
onwards. In Sri Lanka, education up until
year ten is free and many children from
poor backgrounds can complete up until
year ten unassisted. After this point
many children are forced into manual
labour, even if their school results are
very good. Computershare has supported
Come-Share for 15 years.
Achievements in FY2017
Achievements in FY2017
> Trained 400 lead farmers from 10 communities to identify and
> Launched a voluntary contributions scheme, to allow past
promote more sustainable use of natural resources in their areas
> Established new FMNR sites in three communities. Lead farmers
from each of the communities (10 men and 10 women) were
trained on how to prune and nurture shrubs
> Collaborated with the Ghana National Fire Service to train
fire stewards (30 women and 30 men) in fire-fighting and
prevention skills
> Trained 200 farmers from 10 communities on land preparation
techniques to improve soil health on their land
> Trained women in 10 communities how to build and use
fuel-efficient cooking stoves
> Trained farmers on bond and contour farming principles
> Arranged exchange visits for FMNR lead farmers
> Hosted government representatives for meetings and field
visits
> Supervised and audited over 200 Savings Groups, helping
families improve and diversify their incomes
>
beneficiaries to give back to the program
Initiated an empowerment and motivation project to provide
support to beneficiaries beyond their school years
> Provided toolkits to graduates for Vocational Training and
self-employment
> Travelled to multiple districts to provide relief to children affected
by a recent drought, providing 1,500 exercise books and shoes
and socks for school wear for 180 children
> Provided 50 English to Sinhala dictionaries to a remote area in
Alagollewa to help students improve their English language skills
> Commenced support for 20 students from two schools in the
flood affected Matara district
FOCUS FOR FY2018
>
Implement employee
consultation program
for charity selection
> Allocate 20% of donations
to charities that are local to
our offices
> Finalise new local and global
charities for Change A Life
to support
17
PEOPLE
At Computershare, we expect a lot from our employees and we rely on them to
protect and grow our business. We hire, develop, reward, promote and retain our
people on the basis of their talent and commitment and the results they achieve.
We offer a wide variety of training and professional development opportunities,
great benefits including a generous employee share plan, and a supportive work
environment. We know that looking after our people ensures success for them, for
us and for our clients, and we are proud of our special culture.
COMPUTERSHARE DAY
On 26 May we celebrated our inaugural Computershare Day, marking 23 years since
Computershare was listed on the Australian Securities Exchange. Employees around the world
took part in the event, which included a ‘most purple team’ competition.
We also used the day to launch our Purple Person awards, which recognised 23 employees for
their contribution to Computershare and for embodying our values.
OUR 23 PURPLE PEOPLE FOR 2017 ARE:
Amy Griffith
Anna Macfarlane
Ben Jones
Dennis Skagias
Evan Giosis
Garion Chaffe
Ibrahim Hussein
Imre van Wagtendonk
Ivy Ng
James Leggett
Jane Clifford
Jason Zhao
Joanne Hallett
Jobe Lau
Joel Halligan
Laura Wozniak
Lisa Garrett
Mark Fitzgibbon
Megan Peagler
Niamh Murphy
Nicki Priem
Nora Pushian
Todd Regan
18
Louisville
Skipton
Melbourne
Chicago
Melbourne
Bristol
Sydney
Rome
Hong Kong
Bristol
Bristol
Montreal
Bristol
Hong Kong
Denver
Chicago
St. Helier
Canton
Denver
Brisbane
Melbourne
Calgary
Chicago
USA
UK
Australia
USA
Australia
UK
Australia
Italy
UK
UK
Canada
UK
USA
USA
UK
USA
USA
Australia
Australia
Canada
USA
19
19
GROUP OPERATING OVERVIEW
PRINCIPAL ACTIVITIES
The principal activities of the consolidated entity during the course of the financial year were the operation of investor services,
employee share plan services, communication services, business services, stakeholder relationship management services and
technology services.
> The investor services operations comprise the provision of registry maintenance and related services.
> The employee share plan services operations comprise the provision of administration and related services for employee share and
option plans.
> The communication services operations comprise document composition and printing, intelligent mailing, inbound process
automation, scanning and electronic delivery.
> The business services operations comprise the provision of mortgage servicing activities, corporate trust, class action, bankruptcy,
childcare voucher administration, tenant bond protection services and mutual fund administration support services.
> The stakeholder relationship management services group provides investor analysis, investor communication and management
information services to companies, including their employees, shareholders and other security industry participants.
> Technology services includes the provision of software, specialising in share registry and financial services.
Computershare has a range of regulated businesses around the world, including transfer agencies, licensed dealers, corporate trusts
and mortgage servicers.
REVIEW OF OPERATIONS
Overview
Business services’ revenue grew 37.7% on FY2016 to become the largest business stream by revenue, delivering $834.2 million in
constant currency terms. The substantial improvement was due to a full period contribution from the UKAR contract win, which saw
UK mortgage servicing revenues grow substantially by $187.3 million. Growth was also achieved in US mortgage servicing, class
actions and corporate trust. However, weaker results were recorded in the deposit protection scheme and voucher services businesses
in the UK and the Australian utility services business. Business services’ EBITDA grew 24.4% year-on-year on a constant currency
basis to $180.7 million.
Revenue in the investor services business, with cyclically depressed corporate actions, posted the weakest results since 2005,
delivering $125.8 million (year-on-year in constant currency terms). This had a flow on effect on register maintenance revenues which
were down 3.4% to $703.4 million. While Hong Kong and Canada saw improved register maintenance revenues, this was offset
by weaker results in the US, UCIA and Australia. At the EBITDA level, the consolidated investor services business fell by 1.2% over
FY2016 on a constant currency basis but margins improved, underpinned by strong cost management.
Employee share plans benefited from higher transactional volumes and improved equity markets and revenue was up 6% in constant
currency terms notwithstanding margin income weakness following the cut in UK interest rates. Strong improvements were registered
across the globe with the Asian business delivering ongoing robust organic growth. Employee share plans EBITDA grew 7.6% in
constant currency and 58.2% excluding the impact of margin income.
Revenue for the Communication Services business was up 0.6% but EBITDA fell by 16.5% to $38.6 million in constant currency.
Disposals of the Group’s global headquarters in Melbourne, Australia and INVeSHARE equity investment were both concluded during
the period.
Revenue
Business stream
Business services
Register maintenance
Corporate actions
Employee share plans
Communication services
Stakeholder relationship mgt*
Technology & other revenue*
Total management revenue
Comparison in constant currency
FY2017 @ CC
$ million
FY2016 Actual
$ million
834.2
703.4
125.8
235.6
175.4
80.8
27.3
605.7
727.8
140.5
222.2
174.4
70.1
33.4
2,182.5
1,974.2
CC
Variance
+37.7%
-3.4%
-10.5%
+6.0%
+0.6%
+15.3%
-18.3%
+10.6%
FY2017 Actual
$ million
785.9
697.9
125.8
220.5
177.5
79.8
26.6
2,114.0
* It is anticipated that in FY2018, stakeholder relationship mgt and tech & other revenue streams will be consolidated into other
business streams. Comparative revenues would be provided.
20
Computershare Annual Report 2017 Regions
ANZ
Asia
UCIA
CEU
USA
Canada
Comparison in constant currency
FY2017 @ CC
$ million
FY2016 Actual
$ million
CC
Variance
FY2017 Actual
$ million
246.5
136.5
524.8
98.5
994.4
181.8
273.7
124.4
364.0
81.2
965.3
165.6
-9.9%
9.7%
44.2%
21.3%
3.0%
9.8%
10.6%
255.2
136.2
453.5
93.8
994.4
181.0
2,114.0*
Total management revenue
2,182.5
1,974.2
* Total management revenue excludes two management adjustment items further described in note 4 of the financial statements: a
gain on disposals of the Australian head office premises and the investment in INVeSHARE totalling $52.8 million and an acquisition
accounting adjustment related to UK Asset Resolutions Limited of $1.3 million. Regional management revenue excludes intersegment
eliminations.
Operating costs
Operating expenses were up 12.9% on FY2016 to USD $1,626.1 million in constant currency terms. The increase was driven by
a number of factors, the most significant of which was the impact of delivering the UKAR contract appointment work. Acquisitions
and costs associated with revenue related activity (business mix) also contributed to the higher costs. Importantly, the Group’s cost
out programme is beginning to deliver benefits with $13.7 million of cost out achieved in the period and business as usual operating
expenditure was up only 0.3% during the period in constant currency. Technology costs as a percentage of revenue remained at
12.4%, a modest increase on FY2016, again largely driven by the UKAR mortgage services contract appointment.
Earnings per share
Statutory basic earnings per share
Statutory diluted earnings per share
Management basic earnings per share
Management diluted earnings per share
2017
cents
48.76
48.68
54.41
54.32
2016
cents
28.55
28.51
55.09
55.00
The management basic and diluted earnings per share amounts have been calculated to exclude the impact of management adjusted
items (refer to note 4 in this financial report). All EPS numbers above have been translated at actual not constant currency FX rates.
21
BUSINESS STRATEGIES AND PROSPECTS
OUTLOOK
In August 2017, we reported that we expect management EPS in constant currency to increase by +7.5% on FY2017.
The outlook assessment is subject to the forward-looking statements disclaimer in our annual results announcement and assumes that
there is a modest improvement in corporate actions revenue compared to FY2017, and that interest rate markets perform broadly in
line with expectations that existed at the time of providing that guidance and equity markets remain at the levels that existed at the time
of providing that guidance.
Computershare’s strategy is to be the leading provider of services in our selected markets by leveraging our core skills and
competencies to deliver outstanding client outcomes from engaged staff. We focus on new products and services to reinforce market
leadership in established markets and invest in technology and innovation to deliver productivity gains and improved cost outcomes.
RISKS
The Board is ultimately responsible for ensuring that Computershare’s risk management practices are sufficient to mitigate the risks
present in our business as efficiently and effectively as possible. The Board delegates some of this responsibility to the Risk and
Audit Committee.
Computershare has a clear approach to the oversight and management of risk, based on the three lines of defence model. This model
provides a simple framework for the implementation and oversight of risk management in which management, as the first line of
defence, has primary responsibility for risk management and control activities.
The risk function, as part of the second line of defence, is responsible for setting and implementing the risk framework and supporting
tools and methodologies as well as providing advisory support to management.
The internal audit function, as the third line of defence, provides an independent and objective assurance function with the responsibility
of confirming that the framework, policies, and controls designed to manage key risks are being executed by management. Internal
audit carries out regular systematic monitoring of control activities and reports its findings to the senior managers of each business unit
as well as to the Risk and Audit Committee.
RISK SUMMARY
The following outlines areas of material risk that could impact our ability to achieve our strategic objectives and future financial
prospects including, where applicable, our exposure to economic, environmental or social sustainability risks and how we seek to
mitigate or manage them.
Strategic and regulatory risk
Our businesses operate in highly-regulated markets around the world and our success can be impacted by changes to the regulatory
environment and the structure of these markets. As an organisation we pay very close attention to regulatory developments globally
and play an active role in consulting with regulators on changes which could impact our business.
Many of our key businesses are also subject to direct regulatory oversight and we are required to maintain the appropriate regulatory
approvals and licenses to operate, and in some cases adhere to certain financial covenants.
Our business is also at risk of disruption from new technologies and alternative service providers. This means we must be constantly
looking for ways to improve our services by investing in new technologies and processes. We have also established a dedicated
innovation team which is responsible for rapidly assessing the viability of new business ideas and initiatives in an agile yet systematic
manner using proven innovation techniques.
In recent periods we have seen the emergence of distributed ledger technology or ‘blockchain’ as a technology, which has the
potential to be deployed across financial market systems, including post trade clearing and settlement of securities. Deployment of
distributed ledger technology into financial markets, if it ultimately proves to be a viable option, will require extensive dialogue and
consultation with regulators and industry participants and its ultimate market structure implications are not yet known.
Computershare is adopting a measured and considered approach to blockchain. We are pursuing a dual track approach in terms of
assessing the commercial value of introducing innovative blockchain services in market adjacencies, while also rigorously defending
our existing role and overall market positioning. We also believe that our global presence makes us an attractive partner to blockchain
solution providers and gives us access to a wide range of potential commercial blockchain opportunities.
Our future prospects also depend on finding and executing on opportunities to grow and diversify our business. We are potentially
constrained by market structure and competition law restrictions from significantly growing our registry services footprint by acquisition
(unless subsequent market structure changes present new opportunities) and this has inevitably changed the focus of our investment
decisions. There is also inherent risk in any acquisition, including risk of financial loss or missed earnings potential from inappropriate
acquisition decisions as well as integration risk in its implementation. Computershare has a strong track record of acquiring and
integrating businesses successfully, in particular in the businesses of registry and employee share plan administration. We have
a deliberately focused acquisition strategy with rigorous approval processes and we also undertake subsequent reviews of our
acquisitions and their performance.
22
Computershare Annual Report 2017 Financial risk
Our financial performance each year is underpinned by significant annuity revenue. However, there is also a material proportion of
revenue that is derived from transactional activity that is dependent on factors outside our control, which can be challenging to predict.
Changes to market activity generally and foreign exchange rates have the ability to impact on our financial performance.
Margin income is a key contributor to earnings. Changes in investment restrictions, interest rates and to the level of balances that we
hold on behalf of clients can have a material impact on the Group’s earnings. We also have strong relationships with the global financial
institutions that hold our client balances. We have robust policies and other protections to manage risks associated with placing those
funds and we also make significant investments in processes and technology to identify, allocate, reconcile and oversee client monies.
We also experience vigorous competition in all of the markets in which we operate and the actions of our competitors can impact
on our financial prospects. For example, aggressive price discounting by competitors could adversely affect our existing pricing
arrangements or ability to retain existing clients and also win new clients. We continually strive to remain the leading provider of services
in all our business lines globally and invest significantly in new technology and services to maintain our market-leading position.
Operational risk
Computershare is responsible for managing valuable client data. This presents a range of challenges, from ensuring the security and
integrity of that data as well as the continuity of our service in the face of internal and external factors. We manage these risks through
extensive business continuity planning and testing as well as rigorous internal controls around the ability to access and modify client
data. We also make significant investments in technology and services to protect data at rest, in motion and at end point, including
a specialist information security team whose responsibilities include ensuring we have appropriate and effective systems in place
to protect our and our clients’ data from unauthorised access. Our dedicated financial crime team is also responsible for analysing
information and transactions to mitigate the risk of fraud (both internal and external) and these resources are focused on areas of
highest potential exposure.
Computershare also undertakes high volumes of transactional processes, some of which are complex. There is a risk that failure to
process these transactions correctly could result in liabilities being incurred to third parties. We invest significantly in technology to
automate processes where possible. We also have policies, processes and corresponding controls to assist in mitigating this risk,
which are routinely tested. The Group also maintains insurance.
23
1. COMPUTERSHARE’S APPROACH TO CORPORATE GOVERNANCE
The Board is committed to maintaining high standards of corporate governance by overseeing a sound and effective governance
framework for the management and conduct of Computershare’s business. This corporate governance statement sets out a
description of Computershare’s main corporate governance practices. Computershare’s governance arrangements complied with each
of the recommendations set by the ASX Corporate Governance Council throughout the reporting period.
In this statement ‘Group’ is used to refer to Computershare Limited and its controlled entities, and references to ‘Group management’
refer to the Group’s Chief Executive Officer and the executives reporting directly to the Chief Executive Officer.
This Corporate Governance Statement has been approved by the Board and is current as at 19 September 2017.
2. BOARD RESPONSIBILITIES
The Board is responsible for the corporate governance of the Group and is governed by the principles set out in the Board Charter.
A copy of the Board-approved Charter is available from http://www.computershare.com/governance.
The principal role of the Board is to ensure the long-term prosperity of the Group and, in doing so, to determine the Group’s
strategic direction. The Board also sets broad corporate governance principles, which govern the Group’s business operations and
accountability, and ensures that those principles are effectively implemented by Group management.
The Board’s other reserved powers and duties can be divided into five distinct areas of responsibility, an overview of which is
provided below:
> Strategic planning for the Group – involves commenting on, and providing final approval of, the Group’s corporate strategy and
related performance objectives, as developed by Group management, as well as monitoring Group management’s implementation
of, and performance with respect to, that agreed corporate strategy.
> Financial matters – includes approving the Group’s budgets and other performance indicators and monitoring progress against them,
as well as approving and monitoring financial and other reporting, internal and external audit plans, enterprise risk management plans
and the progress of major capital expenditure, acquisitions and divestitures.
> Corporate governance – incorporates overseeing Computershare’s corporate governance framework, including approving changes
made to key supporting Group policies and overseeing Computershare’s reporting to shareholders and its compliance with its
continuous disclosure obligations.
> Overseeing Group management – involves the appointment and, if required, removal of the Chief Executive Officer and the
monitoring of his or her ongoing performance, as well as, if applicable, the appointment and if required, removal of Group
management personnel, including the Chief Financial Officer and Company Secretary.
> Remuneration – comprises the approval of Computershare’s overall remuneration framework and determining the remuneration of
non-executive directors within the limits approved by shareholders.
The Board has delegated the responsibility for day-to-day management and administration of Computershare to the Chief Executive
Officer. Ultimately, Group management is responsible for managing the Group in accordance with the corporate strategy, plans and
policies approved by the Board, and is required to provide appropriate information to the Board to ensure it can effectively discharge
its duties.
3. BOARD COMPOSITION AND DIRECTOR APPOINTMENT
Computershare’s Constitution states that the Board must have a minimum of three and a maximum of ten directors. Re-appointment
is not automatic and if retiring directors would like to continue to hold office they must submit themselves for re-election by
Computershare’s shareholders at the Annual General Meeting. No director (other than the Chief Executive Officer) may be in office for
longer than three years without facing re-election.
In addition to ensuring that the Board has the mix of skills, knowledge and experience commonly required across boards of major ASX
listed companies, the Board is also focused on ensuring that its composition aligns with the Group’s strategic objectives and that it has
the necessary skills and expertise to provide oversight of those areas of the Group’s business where there is greatest scope to increase
shareholder value in the future.
As a global organisation, it is also of great importance to the Board that it has an appropriate balance of directors who are based in
Australia, as well as directors who are based in or who have experience of regions where there are significant group operations.
The Board also considers its size should be conducive to effective discussion and efficient decision making. The Board regularly
reassesses its composition to ensure that it continues to meet these requirements.
24
CORPORATE GOVERNANCE STATEMENTComputershare Annual Report 2017 To assist in this process the Board has developed a Board skills matrix which sets out the skills and experiences that the Board has or
is looking to achieve. The current skills and experience of the Board assessed as a whole against the matrix is as follows:
Leadership and governance
Strategy
Innovation and entrepreneurship
CEO level experience
Other non-executive director experience
Corporate governance
Business experience
M&A and capital markets experience
International business experience
Working in regulated industries
Outsourced business services
Business development/access to networks
Financial and risk
Accounting and finance
Banking and treasury
Audit, risk management and compliance
Other
Technology
HR/remuneration
Geographic experience
North America
UK and Europe
Asia
Australia
Total out of eight Directors
8
4
5
7
6
8
6
6
6
5
5
5
5
5
5
6
8
3
6
There was no change to the composition of the Board during the reporting period.
All of Computershare’s non-executive directors have signed formal letters of appointment setting out the key terms and conditions
relating to their appointment as a director. Senior managers at Computershare also sign employment agreements, except in certain
overseas jurisdictions due to local employment practices.
Proposed appointees to the Board are subject to appropriate background checks. The format of these checks is dependent on the
residence of the proposed director but would typically include police and bankruptcy checks and searches of relevant public records
and filings. This is in addition to confirmation of the proposed director’s experience and character as appropriate.
Any director appointed by the Board will be required to stand for election at the next AGM, at which time the Company will provide in
the notice of meeting all material information known to the Company that is relevant for shareholders to decide on whether or not to
appoint the director.
On appointment, all new directors undertake an induction process. They receive copies of all key governance documents as well as
briefings from senior management on material matters relating to the Computershare group including strategic considerations, financial
performance, major markets and business lines and operational and technological capability. As the Board holds meetings in all of the
major markets in which the Group operates, new directors are, along with the rest of the Board, given the opportunity to meet with
regional management and visit operational facilities during those meetings.
Computershare does not have a formal programme of professional development for its directors. Directors receive briefings on material
developments, including structural developments and market changes, that relate to the Group’s operations. Directors may also
request that the Company provide them with specific development opportunities which they may consider necessary to improve their
skills and knowledge.
25
THE DIRECTORS
As at the date of this Annual Report, the Board composition (with details of the professional background of each director) is as follows:
Stuart Irving
Christopher John Morris
Position: Chief Executive Officer
Age: 46
Independent: No
Years of service: 3
Position: Non-Executive Director
Age: 69
Independent: No
Years of service: 39
Term of office
Term of office
Stuart Irving was appointed Chief
Executive Officer and President of
Computershare on 1 July 2014. He
joined Computershare in 1998.
Skills and experience
Stuart held a number of roles at
The Royal Bank of Scotland before
joining Computershare as IT
Development Manager in the UK.
Stuart subsequently worked in South
Africa, Canada and the US before
becoming Chief Information Officer for
North America in 2005 and then the
Computershare Group’s Chief
Information Officer in 2008.
Board Committee membership
Member of the Nomination Committee
Member of the Acquisitions Committee
Chris Morris and an associate established
Computershare in 1978. He was appointed
Chief Executive Officer in 1990 and
oversaw the listing of Computershare on
the ASX in 1994.
Chris became the Group’s Executive
Chairman in November 2006 and
relinquished his executive responsibilities in
September 2010 and subsequently stood
down as Chairman in November 2015.
Chris was last re-elected in 2015.
Skills and experience
Chris has worked across the global
securities industry for more than
30 years. His knowledge, long-term
strategic vision and passion for the
industry have been instrumental in
transforming Computershare from an
Australian business into a successful
global public company.
Other directorships and offices
Non-Executive Chairman of Smart Parking
Limited (appointed in March 2009)
Non-Executive Chairman of DTI Limited
(appointed in June 2011)
Board Committee memberships
Chairman of the Acquisitions Committee
Member of the Nomination Committee
Member of the Remuneration Committee
Simon Jones
M.A. (Oxon), A.C.A.
Position: Chairman
Age: 61
Independent: Yes
Years of service: 12
Term of office
Simon Jones was appointed to the Board
in November 2005 as a non-executive
director. Simon was last re-elected by
shareholders in 2016 and was appointed
as Computershare’s Chairman in
November 2015.
Skills and experience
Simon is a chartered accountant with
extensive experience in investment
advisory, valuations, mergers and
acquisitions, public offerings, audit and
venture capital. Simon was previously a
Managing Director of N.M. Rothschild
and Sons (Australia) and Head of Audit
and Business Advisory (Australia &
New Zealand) and Corporate Finance
(Melbourne) at Arthur Andersen.
Other directorships and offices
Director of Canterbury Partners
Chairman of the Advisory Board of
MAB Corporation Pty Ltd
Chairman of Melbourne IT Limited
(retired May 2017)
Board Committee membership
Chairman of the Nomination Committee
Member of the Risk and Audit Committee
Member of the Remuneration Committee
Member of the Acquisitions Committee
26
CORPORATE GOVERNANCE STATEMENTComputershare Annual Report 2017 Penelope Jane Maclagan
BSc (Hons), DipEd
Position: Non-Executive Director
Age: 65
Independent: No
Years of service: 22
Tiffany Lee Fuller
B.Com, GAICD, ACA
Position: Non-Executive Director
Age: 47
Independent: Yes
Years of service: 3
Arthur Leslie (Les) Owen
BSc, FIA, FPMI
Position: Non-Executive Director
Age: 68
Independent: Yes
Years of service: 10
Term of office
Term of office
Term of office
Penny Maclagan joined Computershare in
1983 and was appointed to the Board as
an executive director in May 1995. Penny
relinquished her executive responsibilities
in September 2010.
Tiffany Fuller was appointed to the
Board on 1 October 2014 as a
non-executive director. Tiffany
was elected by shareholders at the
Company’s AGM in November 2014.
Penny was last re-elected in 2015.
Skills and experience
Skills and experience
Penny has over 30 years of experience
and knowledge in the securities industry.
Having led Computershare’s Technology
Services business until 2008, Penny
has a very deep understanding of
Computershare’s leading proprietary
technology that contributes to its
competitive advantage in the global
marketplace.
Other directorships and offices
Non-Executive Director of Smart Parking
Limited (appointed in February 2011)
Board Committee membership
Member of the Nomination Committee
Member of the Remuneration Committee
Tiffany has held various corporate finance,
financial advisory and management
consulting positions with Arthur
Andersen in Australia, the US and UK.
She held roles in investment banking
with Rothschild Australia and was also
Director and Principal of the Rothschild
e-Fund focusing on investments in early
stage technology companies in Australia
and New Zealand. Tiffany has also been
appointed as a non-executive director for
various public and private entities in both
the for and not for profit sectors.
Other directorships and offices
Non-Executive Director of Costa Group
Holdings Limited (appointed in 2015)
Non-Executive Director of Smart Parking
Technologies (since 2011)
Board Committee membership
Chair of the Risk and Audit Committee
Member of the Remuneration Committee
Member of the Nomination Committee
Les Owen was appointed to the Board
on 1 February 2007 as a non-executive
director. Les was last re-elected in 2016.
Skills and experience
Les is a qualified actuary with over
35 years’ experience in the financial
services industry.
He held Chief Executive Officer roles with
AXA Asia Pacific Holdings and AXA Sun
Life plc and was a member of the Global
AXA Group Executive Board. He was
also a member of the Federal Treasurer’s
Financial Sector Advisory Council.
Other directorships and offices
Non-Executive Director of Discovery
Holdings Limited (a South African-listed
health and life insurer)
Non-Executive Director of the Royal Mail
Group Plc
Board Committee membership
Member of the Risk and Audit Committee
Member of the Remuneration Committee
Member of the Nomination Committee
27
Joseph Mark Velli
BA, MBA
Position: Non-Executive Director
Age: 58
Independent: Yes
Years of service: 3
Term of office
Joseph Velli was appointed to the
Board on 1 October 2014 as a
non-executive director. Joseph
was elected by shareholders at the
Company’s AGM in November 2014.
Skills and experience
Joseph is a retired financial services
and technology executive with extensive
securities servicing, M&A and public board
experience. For most of his career, Joseph
served as Senior Executive Vice President
of The Bank of New York and as a member
of the Bank’s Senior Policy Committee.
During his 22-year tenure with the Bank,
Joseph’s responsibilities included heading
Global Issuer Services, Global Custody
and related Investor Services, Global
Liquidity Services, Pension and 401k
Services, Consumer and Retail Banking,
Correspondent Clearing and Securities
Services. Most recently Joseph served as
the Chairman and Chief Executive Officer of
Convergex Group.
Other directorships and offices
Non-Executive Director of Paychex, Inc.
Board Committee membership
Chairman of the Remuneration Committee
Member of the Nomination Committee
Dr Markus Kerber
Dipl.oec, Dr. Rer. Soc.
Position: Non-Executive Director
Age: 54
Independent: Yes
Years of service: 6
Markus Kerber was first appointed to
the Board as a non-executive director in
August 2004.
In November 2009 he was required to
retire due to his appointment as the Head
of the Planning Department in the German
Treasury and re-joined the Board in 2011.
Markus was last re-elected to the Board
in 2014.
Skills and experience
Markus is a non-executive director of
Commerzbank AG and an investor in
various start-up companies in Germany,
the UK and the US. Between 2006
and 2016, Markus held positions as
the Director General of the Federation
of German Industries, the Head of the
Planning Department in the German
Treasury and also as the Director General
at the German Ministry of the Interior.
Between 1998 and 2005 he was Chief
Financial Officer, Chief Operating Officer
and Vice Chairman of the Supervisory
Board of GFT Technologies AG. Prior
to that Markus worked as an investment
banker in London in the equity capital
markets divisions of Deutsche Bank AG
and S.G. Warburg & Co Limited.
Other directorships and offices
Member of the Supervisory Board of
Commerzbank Aktiengesellschaft
Member of the Board of Supervisory
Directors of KfW
Board committee membership
Member of the Acquisitions Committee
Member of the Remuneration Committee
Member of the Nomination Committee
28
CORPORATE GOVERNANCE STATEMENTComputershare Annual Report 2017 4. BOARD INDEPENDENCE
The Board has considered each of the eight directors in office as at the date of this Annual Report and has determined that a majority
(five out of eight) are independent, and were so throughout the reporting period. The three directors who are not considered to be
independent are Chris Morris, Penny Maclagan and Stuart Irving due to their past or present involvement in the senior management of
the Company and, in the case of Chris Morris, his substantial shareholding in the Company.
To determine the independence of a director, the Board has to consider a number of different factors, including those set out below:
> whether the director acts (or has recently acted) in an executive capacity for the Company
> the materiality of the director’s shareholding in the Company (if any)
> the existence of any other material relationship between the director and a member of the Group (for example, where the director is
or has been an officer of a significant adviser, supplier or customer)
> the ability of the director to exercise his or her judgement independently
5. BOARD MEETINGS AND REPORTS
The Board met in person on four occasions in the reporting period. In-person meetings will generally take place over two full days and
provide the Board with the opportunity to meet the senior management in the region where the meeting is held, so that the Board visits
all of the Group management team in person over the year. At its meetings, the Board will also discuss the Group’s results, prospects
and short and long-term strategy, as well as other matters, including operational performance and legal, governance and compliance
issues. The Board also convened three other meetings by telephone during the reporting period.
Group management provides monthly reports to the Board detailing current financial information concerning the Group and each of the
regions in which it operates. Management also provides additional information on matters of interest to the Board, including operational
performance, major initiatives and the Group’s risk profile, as appropriate.
The Committees of the Board also meet regularly to fulfil their duties, as discussed further below.
6. BOARD COMMITTEES
To assist in discharging its responsibilities, the Board has established four committees.
The Risk and Audit Committee
The principal function of the Risk and Audit Committee is to provide assistance to the Board in fulfilling its corporate governance and
oversight responsibilities in relation to the Company’s financial reporting, internal control structure, risk management systems, internal
audit function and external audit requirements.
The Risk and Audit Committee is chaired by Non-Executive Director Tiffany Fuller. The Committee currently has two other permanent
non-executive members, Simon Jones and Les Owen. Each member of this Committee is considered by the Board to be independent.
The Board regards these members as having the required financial expertise and an appropriate understanding of the markets in which
the Group operates. The Chief Executive Officer, the Chief Financial Officer, the Group Head of Internal Audit, the Group Risk Officer
and the Company’s external auditors are invited to meetings of the Risk and Audit Committee at the Committee’s discretion.
The Risk and Audit Committee is governed by a Board-approved charter. A copy of this Risk and Audit Committee Charter is available
from http://www.computershare.com/governance.
The Nomination Committee
The main functions of the Nomination Committee are to review the competence, expertise, performance, constitution and succession
of the Board, as well as the performance of individual directors.
The Nomination Committee generally meets on each occasion that the Board meets in person. All current directors are members of the
Nomination Committee and it is chaired by Simon Jones in his capacity as Chairman of the Board.
The Nomination Committee’s policy for the appointment of directors is to select candidates whose skills, expertise, qualifications,
networks and knowledge of the markets in which Computershare operates (and other markets into which it may expand) complement
those of existing Board members so that the Board as a whole has the requisite skills, diversity and experience to fulfil its duties.
The Nomination Committee is governed by a Board-approved charter. A copy of this Nomination Committee Charter is available from
http://www.computershare.com/governance.
29
The Remuneration Committee
The Remuneration Committee’s primary function is to advise the Board on matters relating to the remuneration of the Group’s key
management personnel and specifically to consider, review and make recommendations to the Board about the following matters:
> the Chief Executive Officer’s remuneration policy recommendations
> remuneration and contract terms for the Chief Executive Officer and the Group’s key management personnel
> terms and conditions of long-term incentive plans, short-term incentive plans, share rights plans, performance targets and bonus
payments for the Chief Executive Officer and the Group’s key management personnel
> terms and conditions of any employee incentive plans
> the recommendations of the Chief Executive Officer on offers to executives under any long-term incentive plan established by the
Company from time to time
> remuneration of non-executive directors within the limits approved by shareholders
> content of the remuneration report to be included in the Company’s Annual Report
The Committee is chaired by Joseph Velli. The Committee comprises all directors, except the CEO Stuart Irving. Pursuant to its
Charter, the Committee must always be comprised of a majority of independent directors.
The Remuneration Committee met on three occasions during the reporting period. The Committee has access to Group management
and, where necessary, may consult independent experts to discharge its responsibilities effectively.
The Remuneration Committee is governed by a Board-approved charter. A copy of this Remuneration Committee Charter is available
from http://www.computershare.com/governance.
The Acquisitions Committee
To assist in fulfilling its corporate governance and oversight responsibilities with respect to prospective acquisitions and divestitures
being considered by the Group, the Board has established an Acquisitions Committee. The Committee receives reports from Group
management on acquisition and divestiture opportunities and provides advice on matters such as the price, terms, structure and
strategic management of such opportunities. The Committee is also authorised to approve transactions to be entered into by Group
companies, provided that it does so within the scope of authority delegated to the Committee by the Board from time to time.
The Acquisitions Committee is chaired by Chris Morris and also comprises Simon Jones, Markus Kerber, Stuart Irving and Mark Davis
(the Group’s Chief Financial Officer).
For details of directors’ attendance at Committee meetings, see the Directors’ Report, which starts on page 36 of this Annual Report.
7. EQUITY PARTICIPATION BY NON-EXECUTIVE DIRECTORS
The Board encourages non-executive directors to own shares in the Company, however the Company has not awarded shares to
non-executive directors. As at 30 June 2017, all non-executive directors held a relevant interest in shares in the Company.
8. REMUNERATION
For information relating to the Group’s remuneration practices, and details relating to the directors’ remuneration and that of the
Group’s key management personnel during the year ended 30 June 2017, see the Remuneration Report, which starts on page 39 of
this Annual Report and is incorporated into this corporate governance statement by reference.
In addition to the disclosures contained in the Remuneration Report, it should be noted that the Board is keen to encourage equity
holdings in the Company by employees with a view to aligning staff and shareholder interests. Many employees have participated
(and continue to participate) in the various equity plans offered by the Company, and the directors believe that, historically, this has
contributed significantly to the Group’s success.
9. ANNUAL REVIEW OF BOARD AND GROUP MANAGEMENT PERFORMANCE
The Board’s performance is regularly reviewed by the directors of the Company as a whole (acting as the Nomination Committee).
These reviews are undertaken in an open manner each time the Board meets in person. There is a standing agenda item at each
in-person Board meeting for directors to be given an opportunity to discuss any concerns they may have with the Board’s and its
Committees’ performance as well as any steps that can be taken to maintain their effectiveness.
Directors also completed a questionnaire relating to Board and Committee performance during the reporting period and the Board then
reviewed and discussed the responses. The directors believe that this process works well for its size and composition.
The process for evaluating the performance of individual directors is an informal one. The Chairman is responsible for engaging directly
with directors on any individual performance concerns. Directors are able to raise concerns they might have with an individual director’s
performance directly with the Chairman.
The Board annually reviews the Chief Executive Officer’s performance while the Chief Executive Officer annually reviews the
performance of the other members of Group management against their KPIs for the year. This review process results in each member
of Group management receiving a proposed numerical rating which determines their short-term incentive outcomes for the year. The
proposed rating given to each member of Group management is then reviewed by the Remuneration Committee.
30
CORPORATE GOVERNANCE STATEMENTComputershare Annual Report 2017 The Risk and Audit Committee also undertakes an annual review of its performance. The review comprises completion of a
questionnaire by the individual members of the Committee and a review by the Committee of the responses.
10. IDENTIFYING AND MANAGING BUSINESS RISKS
The Business Strategies and Prospects section of this Annual Report contains a summary of Computershare’s approach to managing
risk within the organisation.
In respect of the reporting period, the Board received a report from the Chief Executive Officer and the Chief Financial Officer that
confirms, among other things, the following:
> The ‘Declaration to the Board of Directors of Computershare Limited’, a copy of which is included in this Annual Report (see page
105) as required by section 295A of the Corporations Act 2001, is founded on a sound risk management and internal control system
that is operating effectively in all material respects in relation to financial reporting risks.
> The Group’s material business risks have been managed effectively.
The Risk and Audit Committee also undertook a review of the Group’s risk management framework during the reporting period and
was satisfied that it remained sound.
11. DIVERSITY AND INCLUSION
FY2017 has been a year of transition for our diversity and inclusion (D&I) work. We have updated our policy (below) and re-set our
objectives for FY2018 onwards. This report therefore covers our progress during FY2017 and outlines our focus areas for FY2018.
Diversity Policy
We see diversity as a source of strength. The more different perspectives we have, the better equipped we’ll be to meet the demands
of our diverse global customer base.
We want every person who joins our team, every customer and every supplier to feel welcome. We believe in equality for everyone,
regardless of age, ethnicity, gender identity, race, religion, disability or sexual orientation. That applies throughout our company, around
the world with no exceptions, regardless of differences.
We will hire, develop, reward, promote and retain people purely on the basis of their talents, commitment, potential and the results they
achieve. We will work hard to make sure everyone is included within our organisation, removing barriers and obstacles to give everyone
an equal opportunity to succeed.
Progress during FY2017
We established a global network of senior management level country-based D&I champions, responsible for ensuring that the
company’s D&I policy and specific global objectives are carried forward at a local level, taking into account country specific laws and
regulations. The group is chaired jointly by two global executive management team members.
The group identified a set of twelve Quick Wins and has worked on them collectively during the year.
1. Establish a network of diversity champions across business units
2. Establish “focus” groups in each region to better understand what our people are looking for with regard to our approach to
diversity; taking the best ideas from the groups and implementing globally
3. Publish our gender data internally in a form everyone can understand and commit to update it on a regular basis
4. All people managers to start learning about unconscious bias with the aim of raising awareness
5. Global Management Team and their direct reports who are people managers to have diversity goals as a specific objective
6. All jobs to be advertised internally
7. All recruitment ads to state that we welcome applications from everyone, and provide link to diversity policy
8. Each country to explore cost-effective membership of a professional diversity group that can help provide local knowledge and
experience to help with delivery of our diversity objectives. (e.g. Australia is signed up to the Diversity Council of Australia)
9. Review and update diversity policy for consideration by CPU board
10. Review our marketing materials to make sure we have a good balance of diverse imagery in place add content to our brand
guidelines to make sure we maximise this going forward
11. Make sure exit interviews are in place globally and ask specific questions on diversity and inclusion
12. Undertake a sustained communication program around diversity and inclusion
31
Feedback on measurable objectives
Listed below is the summary of the objectives that were established in 2011. This is the last year we will report on these specific
objectives as a new set have been put in place for FY2018.
It is important to note that the objectives outlined below do not exclude male employee participation in any relevant programmes.
Objectives
Measurement
FY2017 Results
1. Recognised
opportunity culture
Our employees believe that
Computershare has an equal
opportunity culture where
men and women are able to
demonstrate equally their talent,
commitment and results.
Via the annual global staff survey,
the majority of employees
agree that men and women
at Computershare have equal
opportunity to demonstrate their
talents, commitment and results.
The annual global staff survey
(three months into the FY)
showed a slight increase in staff
stating that ‘Computershare is
progressing towards greater
diversity and inclusion’, with
a rating of 6.9 versus 6.8 the
previous year.
2. Development of high
potential women
As part of the Company’s
succession planning process,
high potential women are
identified and developed for
career progression.
All high potential women are
identified and are actively
developed for career
progression. Their development
is reviewed annually.
Regional heads reviewed
the progress of identified
high potential women as
part of the annual employee
review process.
3. Mentoring and
networking women
4. Improve support
for pregnancy and
maternity leave
5. Flexible working
arrangements
implemented
Gender diversity statistics
Role Category
Board (inc CEO)
Direct reports of CEO
Company Executive
Senior Manager
Manager
Other
Grand Total
Where identified as valuable,
mentoring and/or networking
programmes are implemented to
develop women in our business.
Programmes are implemented
that provide better support
for pregnant women in the
workplace; and for women
commencing, on and returning
from, maternity leave.
Flexible working initiatives are
supported by management
and where appropriate made
available to employees to
achieve improved business
outcomes and support
work/life balance.
Programme implementation and
results are reviewed annually.
Mentoring and/or networking
programmes continue to be
available on a needs basis
to employees.
Over 80% of women return to
the workforce from maternity
leave. An annual report to the
CEO monitors progress.
Currently operating at above
target rates in each region.
Globally Computershare has a
return rate in excess of 85%.
Flexible working arrangements
are defined in the appropriate
workplace policies and/or are
actively used as an engagement
tool by management.
Management feedback on usage
and effectiveness is provided to
the CEO annually.
Flexible working arrangements
are available to our employees.
Requests for a flexible
arrangement are assessed by
Human Resources and the
business unit involved.
Overall CPU – FY2017
F
2
2
33
156
579
5,727
6,499
M
6
14
83
266
660
4,473
5,502
F
25%
13%
28%
37%
47%
56%
54%
M
75%
88%
72%
63%
53%
44%
46%
Total
8
16
116
422
1,239
10,200
12,001
Change to
female %
=
+
+
-
=
-
Data valid as at 30 June 2017. Our joint venture in India where Computershare is not the active manager is excluded.
Company Executive means a person reporting to a direct report of the CEO. Senior Manager means a person reporting to a
Company Executive.
32
CORPORATE GOVERNANCE STATEMENTComputershare Annual Report 2017 FY2018 focus areas and objectives
We will work with an external partner to further define our overall global strategy for D&I. This will be completed in conjunction with our
regional champions and communicated to staff prior to the end of the calendar year.
We will also put in place resources to help us better keep track of and report on our D&I initiatives around the globe.
FY2018 Objectives
Objective
Measurement
1. Building on the 12 Quick Wins, work with an external partner to draw
up an appropriate, global strategic plan for D&I over the next five years
Plan to be defined and communicated to all employees by
the end of 2017
2. Evaluate employee opinion of Computershare’s progress towards
greater diversity and inclusion, with the aim of increasing scores
Feedback to be evaluated from scores in the annual global
employee survey
3. Work towards our goal of a minimum 30% female representation at
To be measured using statistics from our employee records
senior levels (Direct reports of CEO and Company Executive) by 2020
4. Increase the amount of flexible working arrangements in place across
To be measured using statistics from our employee records
the company
5. Maintain the number of women returning from maternity leave at
80%+. Additionally, measure and report on the retention of these
women in the three years after return.
To be measured using statistics from our employee records
6. Increase the number of staff filling internal vacancies
To be measured using statistics from our employee records
through appropriate training, development and awareness
of the opportunities.
12. WORKPLACE GENDER EQUALITY REPORT
In accordance with the requirements of the Workplace Gender Equality Act 2012, on 31 May 2017 Computershare Australia lodged
its annual compliance report with the Workplace Gender Equality Agency. A copy of this report is available from
http://www.computershare.com/governance.
Any comments regarding this report can be submitted via email to the following address: wgea.comments@computershare.com.au.
13. SECURITIES TRADING POLICY
The Company has a Securities Trading Policy in place which sets out the restrictions that apply to the Group’s directors, officers and
employees trading in Computershare securities.
The policy explains the insider trading laws as they relate to trading in Computershare securities and the securities of Computershare’s
clients. It also sets out the penalties that apply to insider trading offences under the Corporations Act 2001 and makes clear that
Computershare adopts a zero tolerance approach to breaches of insider trading laws.
The policy imposes additional restrictions on dealings in Computershare securities by Computershare directors and certain specified
executives (designated persons). These designated persons may deal in Computershare securities during the four week period after
the Company releases its half year and full year financial results, and after the date on which its Annual General Meeting is held, subject
always to the laws on insider trading.
In addition, these designated persons may only deal in Computershare securities outside those specified four week trading windows
with an express prior clearance by a nominated director. During certain prohibited periods, being the period between 15 December
and the Company’s release of its half year results and the period between 15 June and the Company’s release of its full year results,
and such other periods as may be determined by the Board from time to time, clearance to deal can only be given in exceptional
circumstances.
Under the policy, designated persons are also prohibited from entering into an arrangement pursuant to which they seek to hedge the
economic risk associated with an unvested incentive award made to them by Computershare.
The list of designated persons is set out in Schedule 1 of the Securities Trading Policy. It is reviewed and updated as appropriate,
having regard to any changes in the structure of or the creation of new roles within Group management. An up-to-date copy of the
Board-approved Securities Trading Policy is available from http://www.computershare.com/governance.
14. CORPORATE REPORTING
The Chief Executive Officer and the Chief Financial Officer have made a Declaration to the Board of Directors in respect of the year ended
30 June 2017, as detailed on page 105 of this Annual Report. The Chief Executive Officer and the Chief Financial Officer also provided an
equivalent statement to the Directors in respect of the Company’s half year report for the period ended 31 December 2016.
33
15. CONFLICT OF INTEREST AND INDEPENDENT ADVICE
If a director has an actual or potential conflict of interest in a matter under consideration by the Board or a Committee of the Board,
that director must promptly disclose that conflict of interest and abstain from deliberations on the matter. In that circumstance, the
director is not permitted to exercise any influence over other Board members or Committee members on that issue, nor receive
relevant Board or Committee papers.
The Company permits any director or Committee of the Board to obtain external advice about transactions or matters of concern
at the Company’s cost. Directors seeking independent advice must obtain the approval of the Chairman, who is required to act
reasonably in deciding whether the request is appropriate.
16. ETHICAL STANDARDS
Computershare recognises the need for directors and employees to perform to the highest standards of behaviour and business
ethics. The Board has adopted a Code of Conduct that sets out the principles and standards with which all officers and employees are
expected to comply as they perform their respective functions. The Code recognises the legal and other obligations that the Company
has to legitimate stakeholders, and requires that directors, officers and employees maintain the highest standards of propriety and act
in accordance with the law.
A copy of the Group’s Board-approved Code of Conduct is available from the corporate governance section of
http://www.computershare.com/governance.
17. SHAREHOLDER COMMUNICATIONS AND INVESTOR RELATIONS
Computershare has an investor relations program in place with the aim of facilitating effective communication between Computershare
and its investors. A key feature of this program is to ensure that shareholders are notified of, or are otherwise able to access information
necessary to assess Computershare’s performance. Information is communicated to shareholders through the following means:
> The Annual Report, which is distributed to all shareholders who elect to receive it. An overview of the previous financial year is also
included in the Notice of AGM that all shareholders receive.
> The AGM and any other shareholder meetings called from time to time to obtain shareholder approval as required.
> The Company’s website, which contains information regarding the Company and the Group and its corporate governance
framework. The Investor Relations section of the website also includes information released to the ASX, a copy of investor and
analyst briefing documentation, press releases and webcasts.
> By email to those shareholders who have supplied their email address for the purpose of receiving communications from the
Company electronically. Computershare actively encourages shareholders to provide an email address to facilitate more timely and
effective communication with them and runs campaigns from time to time to encourage greater email adoption.
Computershare also encourages shareholders to participate in the Company’s AGM. Shareholders who are unable to attend and vote
in person at the meeting are encouraged to vote electronically via Computershare’s service known as InvestorVote, where they can
view an electronic version of the voting form and accompanying materials and submit their votes. Computershare also encourages
shareholders who are unable to attend the AGM to communicate any issues or questions by writing to the Company.
18. COMMITMENT TO AN INFORMED MARKET RELATING TO COMPUTERSHARE SECURITIES
The Board has a Market Disclosure Policy to ensure the fair and timely disclosure of price-sensitive information to the investment
community as required by applicable law.
In order to effectively manage its continuous disclosure obligations, the Chief Executive Officer has established a Disclosure Committee
which is responsible for the following matters:
> considering what information needs to be released to the market by Computershare, although routine administrative announcements
may be made by the Company Secretary without consulting the Disclosure Committee
> ensuring announcements relating to significant matters are referred to the Board for consideration and approval, namely
announcements relating to the Company’s half and full year financial reports, financial projections and future financial performance as
well as changes to the Group’s policy or strategy
> approving the disclosure of information to the market for matters not referred to the Board
> implementing adequate systems for ensuring the timely disclosure of material information to the market, including where such
information needs to be released urgently
The Disclosure Committee consists of the Chief Executive Officer, the Chief Financial Officer, the Head of Investor Relations and the
Company Secretary. Where the urgency of an issue, which under the policy is to be referred to the Board, prevents its consideration
by the full Board, an announcement relating to that issue may be approved for release to the market by all available directors in
conjunction with the Disclosure Committee.
Further, in circumstances where it is considered appropriate to request a trading halt (for example, where Computershare is required to
disclose information to the market, but for whatever reason is unable to do so promptly and without delay) the Chief Executive Officer,
or if the Chief Executive Officer is unavailable, the Chairman or the Chief Financial Officer, is authorised to request a trading halt on
behalf of the Company. The full Board is to be consulted as far as is practicable on any request for a trading halt.
A copy of the Board-approved Market Disclosure Policy is available from the corporate governance section of
http://www.computershare.com/governance.
34
CORPORATE GOVERNANCE STATEMENTComputershare Annual Report 2017 19. EXTERNAL AUDITORS
The Company’s policy is to appoint external auditors who demonstrate professional ability and independence. The auditor’s
performance is reviewed annually.
PricewaterhouseCoopers were appointed as the external auditors in May 2002.
PricewaterhouseCoopers normally rotates audit engagement partners on listed companies every five years. It is also
PricewaterhouseCoopers’ policy to provide an annual declaration of independence, a copy of which can be found on page 52 of
this Annual Report. The external auditor is required to attend the Company’s Annual General Meeting and be available to answer
shareholder questions about the conduct of the audit and the preparation of the content of the audit report, the accounting policies
adopted by the Company in relation to the preparation of the financial statements and the independence of the auditor in relation to
the conduct of the audit.
An analysis of fees paid to the external auditors, including a breakdown of fees for non-audit services, is provided in the Directors’
Report (see page 51 of this Annual Report).
20. INTERNAL AUDITORS
Computershare has a dedicated Group Internal Audit function. The function is led by the Group Head of Internal Audit who has
a reporting line to the Chairman of the Risk and Audit Committee. Group Internal Audit is authorised to audit all areas of the
Computershare Group without the need for prior approval. In carrying out its responsibilities, it has full and unrestricted access to all
records, property, functions, IT systems and staff in the Group.
Each financial year, the function develops an annual audit plan which is approved by the Risk and Audit Committee. The function’s
key responsibilities are to review and appraise the adequacy, design and effectiveness of the Group’s system of internal controls and
evaluate and improve the effectiveness of risk management, control and governance processes and to identify control gaps.
On completion of audit assignments, Internal Audit will issue written reports which are distributed to management and communicated
to the Risk and Audit Committee. Where the report identifies specific findings and recommendations, the report will include an action
plan from management to implement appropriate corrective action. All internal audits are conducted in accordance with the Institute of
Internal Auditor’s Standards for the Professional Practice of Internal Auditing.
21. WHISTLEBLOWING
The Board has approved a Whistleblower Policy that specifically outlines procedures for dealing with allegations of improper conduct
made by directors, officers or employees of the Company or parties external to Computershare. Concerns can be raised anonymously
in a number of ways, including through the Company’s online whistleblower reporting system, by telephone or by mail. Any reported
concerns are assessed and handled by regional Whistleblower officers. The Group Whistleblower Officer also provides quarterly reports
to the Group Risk and Audit Committee on any concerns reported over the period.
All Computershare employees have received training about the Company’s Whistleblower Policy, including how to detect and report
improper conduct. A copy of the Whistleblower Policy is available from http://www.computershare.com/whistleblowing.
22. CORPORATE AND SOCIAL RESPONSIBILITY
For details relating to the Company’s corporate and social responsibility initiatives, see pages 16 to 17 of this Annual Report.
23. HEALTH AND SAFETY
Computershare aims to provide and maintain a safe and healthy work environment. Computershare acts to meet this commitment by
implementing work practices and procedures throughout the Group that comply with the relevant regulations governing workplaces
in each country in which the Group operates. Employees are expected to take all practical measures to ensure a safe and healthy
working environment, in keeping with their defined responsibilities and applicable laws.
24. COMPANY SECRETARY
The Company Secretary during the reporting period was Dominic Horsley. Under Computershare’s Constitution, the appointment and
removal of the Company Secretary is a matter for the Board.
Among other matters, the Company Secretary advises the Board on governance procedures and supports their effectiveness by
monitoring Board policy and procedures, coordinating the completion and dispatch of Board meeting agendas and papers and assisting
with the induction of new Directors. The Company Secretary is accountable to the Board, through the Chairman, for these responsibilities.
Dominic Horsley joined the Company in June 2006, having previously practised law at one of Asia Pacific’s leading law firms and
worked as a Corporate Counsel with a major listed Australian software and services supplier. Dominic completed a Bachelor of Arts
(Hons) in Economics at the University of Cambridge and completed his legal studies at the College of Law in London. Dominic is also
the Chief Legal Counsel for the Group’s Asia Pacific operations and is a Fellow of the Governance Institute of Australia.
All directors have access to the advice and services of the Company Secretary.
35
DIRECTORS’ REPORT
DIRECTORS’ REPORT
The Board of Directors of Computershare Limited has pleasure in submitting its report in respect of the financial year ended 30 June 2017.
DIRECTORS
The names of the directors of the Company in office during the whole year and up to the date of this report, unless otherwise
indicated, are:
Non-executive
Simon David Jones (Chairman)
Christopher John Morris
Tiffany Lee Fuller
Markus Erhard Kerber
Penelope Jane Maclagan
Arthur Leslie Owen
Joseph Mark Velli
Executive
Stuart James Irving (President and Chief Executive Officer)
PRINCIPAL ACTIVITIES
The principal activities of the Group are outlined in the Group Operating Review set out on pages 20 to 21 and form part of this report.
CONSOLIDATED PROFIT
The profit of the consolidated entity for the financial year was $271.7 million after income tax. Net profit attributable to members of the
parent entity was $266.4 million, which represents an increase of 69.3% on the previous year’s result of $157.3 million. Profit of the
consolidated entity for the financial year after management adjustment items was $297.3 million after income tax and non-controlling
interests. This represents a decrease of 2.0% on the 2016 result of $303.5 million.
Net profit after management adjustment items is determined as follows:
Net profit attributable to members of the parent entity
Management adjustment items (net of tax):
Amortisation
Amortisation of intangible assets
Acquisitions and disposals
Gain on disposals
Acquisition related restructuring costs
Acquisition accounting adjustments
Acquisition and disposal related expenses
Foreign currency translation reserve write-off on disposals
Gain on acquisition
Asset write-down
Other
Major restructuring costs
Voucher Services impairment
Put option liability re-measurement
Marked to market adjustments – derivatives
Net profit after management adjustment items
36
2017
$000
2016
$000
266,395
157,334
39,302
64,043
(48,838)
1,443
(1,056)
666
-
-
-
20,477
11,315
7,080
488
(325)
1,304
46,341
2,408
25,904
(8,891)
1,687
8,465
-
7,526
(2,256)
297,272
303,540
DIRECTORS’ REPORT Computershare Annual Report 2017
Management adjustment items
Management results are used, along with other measures, to assess operating business performance. The Group believes that
exclusion of certain items permits better analysis of the Group’s performance on a comparative basis and provides a better measure of
underlying operating performance. Description of management adjustment items can be found in note 4 of the financial statements.
The non-IFRS financial information contained within this Directors’ report has not been audited in accordance with the Australian
Auditing Standards.
DIVIDENDS
The following dividends of the consolidated entity have been paid or declared since the end of the preceding financial year:
Ordinary shares
A final dividend in respect of the year ended 30 June 2016 was declared on 10 August 2016 and paid on 13 September 2016. This was
an ordinary dividend of AU 17 cents per share franked to 20% amounting to AUD 92.9 million ($69.8 million).
An interim dividend was declared on 15 February 2017 and paid on 22 March 2017. This was an ordinary dividend of AU 17 cents
per share franked to 30% amounting to AUD 92.9 million ($69.8 million).
A final dividend in respect of the year ended 30 June 2017 was declared by the directors of the Company on 16 August 2017 and
paid on 18 September 2017. This was an ordinary unfranked dividend of AU 19 cents per share. As the dividend was not declared
until 16 August 2017, a provision was not recognised as at 30 June 2017.
REVIEW OF OPERATIONS
The review of operations is outlined in the Group Operating Review set out on pages 20 to 21 and forms part of this report.
SIGNIFICANT EVENTS AND SIGNIFICANT CHANGES IN ACTIVITIES
A discussion of significant events and significant changes in activities, if applicable, is included in the Group Operating Review set out
on pages 20 to 21 and forms part of this report.
In the opinion of the directors, there were no other significant changes in the affairs of the consolidated entity during the financial year
under review that are not otherwise disclosed in this report or the consolidated accounts.
SIGNIFICANT EVENTS AFTER YEAR END
No other matter or circumstance has arisen since the end of the financial year which is not otherwise dealt with in this report or in the
consolidated financial statements that has significantly affected or may significantly affect the operations of the consolidated entity, the
results of those operations, or the state of affairs of the consolidated entity in subsequent financial years. For details of significant post
balance date events refer to notes 9 (disposal of Karvy Computershare Private Limited) and 28 (share buy-back).
LIKELY DEVELOPMENTS AND FUTURE RESULTS
A discussion of business strategies and prospects is set out on pages 22 to 23 and forms part of this report.
ENVIRONMENTAL REGULATIONS
The Computershare Group is not subject to significant environmental regulation.
INFORMATION ON DIRECTORS
The qualifications, experience and responsibilities of directors together with details of all directorships of other listed companies held by
a director in the three years to 30 June 2017 and any contracts to which the director is a party to under which they are entitled to
a benefit are outlined in the Corporate Governance Statement and form part of this report.
37
Directors’ interests
At the date of this report, the direct and indirect interests of the directors in the securities of the Company are:
Name
SJ Irving
TL Fuller
SD Jones
ME Kerber
PJ Maclagan
CJ Morris
AL Owen
JM Velli
Meetings of directors
Number of ordinary shares
Number of performance rights
27,837
2,000
19,957
40,000
11,543,868
35,131,000
12,910
10,000
300,692
-
-
-
-
-
-
-
The number of meetings of the Board of Directors (and of Board Committees) and the number of meetings attended by each of the
directors during the financial year were:
Directors’
Meetings
Risk and Audit
Committee
Meetings
Nomination
Committee
Meetings
Remuneration
Committee
Meetings
A
6
6
6
4
6
6
6
6
B
6
6
6
6
6
6
6
6
A
-
7
7
-
-
-
7
-
B
-
7
7
-
-
-
7
-
A
4
4
4
3
4
4
4
4
B
4
4
4
4
4
4
4
4
A
4
4
4
2
4
4
4
4
B
4
4
4
4
4
4
4
4
SJ Irving
TL Fuller
SD Jones
ME Kerber
PJ Maclagan
CJ Morris
AL Owen
JM Velli
A – Number of meetings attended
B – Number of meetings held during the time the director held office during the financial year.
The Board also has an Acquisitions Committee comprising SD Jones, ME Kerber, CJ Morris, SJ Irving and MB Davis (Chief Financial
Officer). The Committee receives a monthly report and meets on an informal basis as necessary. Accordingly, it is not included in the
above table. The Board also forms sub-committees to consider specific transaction opportunities as appropriate.
INFORMATION ON COMPANY SECRETARY
The qualifications, experience and responsibilities of the Company Secretary are outlined in the Corporate Governance Statement and
form part of this report.
INDEMNIFICATION OF OFFICERS
During the period, the Group paid an insurance premium to insure directors and executive officers of the Group and its controlled
entities against certain liabilities. Disclosure of the amount of insurance premium payable and a summary of the nature of liabilities
covered by the insurance contract is prohibited by the insurance policy.
38
DIRECTORS’ REPORT Computershare Annual Report 2017
REMUNERATION REPORT
This report covers:
A. Remuneration strategy
B. A summary of key remuneration highlights in the current financial year
C. The structure of remuneration at Computershare
D. Details of remuneration and service contracts
E. Proportions of fixed and performance related remuneration
F. Other information
A. REMUNERATION STRATEGY
Computershare’s remuneration strategy is designed to:
> Be competitive in the local employment market where an executive is based so as to support the attraction and retention of a
talented executive team.
> Motivate executives to deliver excellent performance; and
> Align remuneration outcomes for executives with the interests of shareholders.
Computershare’s remuneration strategy and structure is reviewed by the Board and the Remuneration Committee on an ongoing basis
for its appropriateness and effectiveness.
B. A SUMMARY OF KEY REMUNERATION HIGHLIGHTS IN THE CURRENT FINANCIAL YEAR
Set out below are some of the key remuneration outcomes and highlights which occurred during the FY2017 year:
> There was no broad based salary increase for staff globally. There was also no general salary increase for the Group’s executive and
key management personnel and no increase in non-executive director fees.
> Short-term incentive (STI) outcomes for senior executives were modestly up in FY2017 on FY2016 – this was attributable to an
improvement in FY2017 Group EBITDA as compared to budget and there was also an increase in Group management EPS of
approximately 3.5% as compared to FY2016 on a constant currency basis.
> Long term incentive awards granted in FY15 were tested against their relevant performance hurdles based on performance over
1 July 2014 to 30 June 2017. Awards subject to the management EPS hurdle failed to meet the threshold EPS target of 69.74
US cents per share. Awards subject to the TSR hurdle narrowly missed the vesting threshold of 50% with Computershare’s ranking
of 43% (being the 57th ranked company in the peer group of the ASX100).
> The final award of performance rights under Computershare’s legacy long-term incentive plan that were granted in 2012 are vesting
in August/September 2017. The 50% of the awards that were subject to a performance target of at least 7.5% annual compound
growth in management EPS over a five year performance period will lapse as the target was not met. The 50% of awards subject to
a retention condition will vest for those executives who satisfy the five year period. This equates to 475,000 vested shares.
> Computershare staff remain active participants in the various share plans offered by Computershare globally with participation rates
for the broad based plans typically exceeding more than 60% of eligible staff.
The Board also undertook a benchmark review of the Group CEO’s remuneration in financial year 2017. This was the first benchmark
review of the Group CEO’s remuneration undertaken since his appointment in 2014. The outcome of the review revealed that the
Group CEO’s remuneration was substantially below market rates as compared to industry and size based peers with total remuneration
being well below the 25th percentile. As a result of that review, the Board approved a market adjustment to the Group CEO’s base
salary from AUD 910,000 to AUD 1,190,000 (equal to a 30.7% increase) and a corresponding increase in total remuneration. Following
and despite the review, the Group CEO’s remuneration in FY2017 still remained significantly below the 25th percentile when compared
to a peer group of companies with comparative market capitalisation.
The Board also undertook a further review in FY2017 of the structure of the remuneration incentives and mix for the Group CEO and
Group CFO. As a result, the Board has implemented changes effective from FY18 onwards to simplify the structure of the STI plan
for the Group CEO and Group CFO and to further align it to the Group’s strategic objectives. The Board also determined to adjust for
these executives the remuneration mix between STI and LTI such that the amount allocated to STI has been increased and the amount
allocated to LTI has been correspondingly decreased. Further details regarding these changes will be provided in the remuneration
disclosures for FY18.
The statutory pay disclosures for the Group CEO in FY2017 as set out on page 45 of this report include an amount in respect of
‘Other’ benefits paid. These exclusively relate to payments made in accordance with the Group’s expatriate policy as the Group CEO
agreed to relocate himself and his family to the United Kingdom for a short term period because of a number of key strategic projects
currently taking place across the Group in the northern hemisphere.
39
C. THE STRUCTURE OF REMUNERATION
Non-executive directors
Computershare’s total non-executive directors’ fee pool has a limit of AUD 2.0 million. This limit was approved by shareholders in
November 2014.
SD Jones receives a fixed fee of AUD 325,000 as Chairman. All other non-executive directors receive a base fee of AUD 150,000.
TL Fuller receives an additional AUD 75,000 as the Chair of the Risk and Audit Committee and other non-Chair members of the Risk
and Audit Committee (AL Owen and SD Jones) receive an additional AUD 25,000 per annum as members on that committee. JM Velli,
as Chairman of the Remuneration Committee receives an additional AUD 25,000 for performing those duties. These fees are inclusive
of statutory superannuation where applicable. Market data obtained by Computershare confirmed that non-executive director fees are
at or below the 25th percentile when compared to companies in the ASX 100 as well as a smaller comparator group of companies by
market capitalisation.
There were no non-executive director fee increases in FY2017.
Computershare has adopted a policy that if any director wishes to receive their director fees in a different currency to AUD, then they
can elect to do so and an exchange rate will be struck at the start of each financial year for the fees payable in that year. The Board has
recently amended this policy such that if there is material change (up or down) in the foreign exchange rate applicable to an overseas
director that director’s fee in AUD will be adjusted accordingly.
No bonuses, either short or long-term, are paid to non-executive directors. They are not provided with retirement benefits other than
statutory superannuation entitlements (where applicable). They do not receive shares or options from Computershare.
CEO and other senior executives
Remuneration for the CEO and other key senior executives comprises three main components, being a fixed base salary (which is not
at risk), a variable short-term incentive (STI) which is calculated by reference to current year’s performance and a variable long-term
incentive (LTI) which comprises awards of performance rights over shares in Computershare.
For the Group CEO and CFO the mix between fixed, short-term variable and long-term variable remuneration in FY2017 was as follows
(based on on-target performance):
CEO/CFO
Short-term incentives
Fixed remuneration
Base Salary
35%
Variable remuneration
STI
15%
LTI
50%
STI incentives for senior executives at Computershare in FY2017 comprised a cash bonus (CSTI) and a grant of Computershare shares
made on a deferred vesting basis (DSTI).
Executives are provided with an ‘on target package guide’ which is an amount equal to the value of the base salary and their
STI assuming ‘on target’ performance. If an executive achieves ‘on target’ performance their total STI award would be equal to
approximately 43% of their base salary. The maximum entitlement that an executive could receive as an STI would be 75% of their
base salary.
40
DIRECTORS’ REPORT Computershare Annual Report 2017 The following table explains how each component of the STI (being the CSTI and the DSTI) are determined and the limits that apply to
each component.
Minimum
entitlement
Maximum
entitlement Measurement
Comment
% of on
target
package
guide
15%
(equal to
21.4% of
base salary)
Component
CSTI
(short-term
cash bonus)
Nil
22.5% of
the on target
package
guide (equal
to 32% of
base salary)
70% of CSTI is calculated by reference
to performance against the budgeted
management EBITDA of the business unit(s)
or region(s) for which the relevant executive
is responsible.
Calculated and paid annually after the release
of the annual results.
The CSTI strongly aligns the executive’s CSTI
with the performance of the business unit(s) or
region(s) they manage.
On target performance for an executive is
meeting the relevant budgeted management
EBITDA target for that executive and the
maximum entitlement is reached if the executive
achieves 120% of their budgeted management
EBITDA target. No CSTI is payable based on
financial performance if the executive achieves
less than 80% of their target.
The remaining 30% of CSTI is calculated
based on personal objectives tailored to the
executive’s responsibilities and role. Matters
typically covered include cost control, business
expansion, risk management and service levels.
50% of DSTI is calculated by reference to the
Group’s management earnings per share (EPS)
growth over the year on a constant currency
basis. On target performance is management
EPS growth over the financial year of 7.5%
and the maximum entitlement is reached if
management EPS growth over the financial
year exceeds 15%. No DSTI is payable based
on management EPS growth if EPS growth
over the year is 0% or less.
Calculated annually after the release of the
annual results. Grants are not generally made
until after the release of the annual report.
The DSTI aligns an executive’s remuneration
with the overall Group’s performance, and
provides an incentive for executives to work to
maximise overall Group performance as well
as the performance of the particular business
unit(s) they manage.
Nil
15%
(equal to
21.4% of
base salary)
DSTI
(short-term
incentive
satisfied by
the grant of
equity on
a deferred
basis)
30% of the
on target
package
guide (equal
to 43% of
base salary)
The remaining 50% of DSTI is calculated
based on strategic, cultural and organisational
measures. These measures are regularly
reviewed and typically cover non-financial
performance, leadership, replaceability
and character.
Deferred vesting: DSTI grants are unable to
be sold for two years after the date of grant
and are also subject to forfeiture if an executive
resigns or is terminated for cause in this period.
DSTI grants are designed as an incentive to
encourage long-term, sustainable performance.
The management adjustment items applied to determine management EBITDA (for CSTI) and management EPS (for DSTI) are set out
in note 4 of the financial statements. The Board retains the discretion to review management adjustment items before the calculation of
STI awards to executives.
STI outcomes in the 2017 financial year
The table below shows the STI paid or payable to each Computershare executive who is identified as key management personnel for
entitlements referable to performance in the financial year ended 30 June 2017. The table sets out the actual amounts awarded as STI
and how they relate to the maximum entitlement for each executive.
Executive
SJ Irving
SA Cameron
PA Conn
MB Davis
SHE Herfurth
ML McDougall
SR Rothbloom
N Sarkar
SS Swartz
JLW Wong
STI awarded (USD)
STI as percentage of maximum
459,845
121,227
218,195
285,124
136,672
152,107
451,447
205,034
142,826
269,520
68.5%
51.2%
54.2%
62.8%
56.6%
51.4%
50.6%
57.3%
58.7%
56.6%
41
Long-term incentives
The Group CEO and CFO and other eligible senior executives also receive as part of their total remuneration a long-term incentive
award which comprises a grant of performance rights (also known as zero exercise price options) over Computershare shares. The
executives who receive long-term incentive awards will generally comprise the executives who are identified as key management
personnel in this report as well as a small number of other senior executives who are identified as being particularly important to the
longer term future of Computershare.
Details of the long-term incentive plan, which is known as Computershare’s LTI plan, are set out below.
Key features of the LTI plan
Eligibility
Participants in the LTI plan comprise the Group’s CEO and CFO and a limited pool of the most senior executives who are important to
the Company’s future.
Frequency and value of grants
Awards under the LTI plan will typically be made annually. A resolution to approve the proposed grant of performance rights under the
LTI plan to the Group CEO is put to shareholders each year at the Company’s AGM.
The value of an award made to an eligible executive under the LTI plan is calculated as a percentage of the executive’s base salary plus
‘on target’ STI award (being both the cash (CSTI) and deferred shares (DSTI) components). For awards made in November 2016, the
Group CEO and CFO received an LTI award equal to 50% of their total remuneration package. For other eligible executives, the value
of their LTI award was in a range of approximately 25% to 35% of their total remuneration package.
The actual number of performance rights that an eligible executive receives is calculated by dividing that executive’s LTI award
entitlement by the ‘face value’ of Computershare’s share price. For a grant of performance rights in a given financial year, ‘face value’
is the volume weighted average share price over the five trading days after the full year results announcement for the prior financial
year. For awards made in November 2016 in respect of the financial year 2017, the face value of Computershare’s share price for the
purpose of calculating LTI award entitlements was AUD 9.99.
EPS growth performance hurdle
Under the LTI plan, 50% of each award is subject to a management EPS growth hurdle that is tested once at the end of a three year
performance period and will vest in accordance with the table below:
Compound annual growth in management adjusted EPS over the performance period
Performance rights subject to
EPS hurdle that vest (%)
Maximum % or above
15% or greater
100%
Between threshold % and maximum %
Between 5% and 15%
Progressive pro rata vesting between 50% to
100% (i.e. on a straight line basis)
Threshold %
Less than the threshold %
5%
Less than 5%
50%
0%
The Board believes that the EPS growth hurdle under the LTI plan provides an appropriate incentive to its management team to
achieve sustainable growth outcomes for the Computershare Group over the longer term. The Board reviews the management EPS
performance hurdles from time to time to ensure that this remains the case.
Total Shareholder Return performance hurdle
The remaining 50% of each award under the LTI plan is subject to a performance measure based on Total Shareholder Return or
‘TSR’. For these purposes, TSR means the change in shareholder value over the performance period by measuring movement in share
price plus dividends (assuming reinvestment).
The performance measure compares the TSR of Computershare’s shares against the TSR of the companies within the ASX 100 index
at the start of the performance period on the following basis:
Relative TSR ranking against peer group
Performance rights subject to TSR hurdle that vest (%)
At or above the 75th percentile
Between the 50th to 75th percentile
Equal to the 50th percentile
Below the 50th percentile
100%
Progressive pro rata vesting between 50% to 100% (i.e. on a straight line basis)
50%
0%
The Board has chosen to compare the TSR of Computershare against the ASX 100 index as there is not a narrow comparator group
of companies that are listed on exchanges globally that Computershare can readily compare itself with. The Board believes that having
a performance measure that compares Computershare’s TSR performance with the TSR of companies in a broad index (the ASX 100)
will further align the remuneration outcomes for its senior executives with the investment performance of its shareholders.
42
DIRECTORS’ REPORT Computershare Annual Report 2017 As at the date of this report, there are 1.5 million performance rights outstanding under the LTI plan. These include 750,375 performance
rights that were granted to 13 executives in the financial year 2017 and which are due to vest in September 2019 (subject to performance
against hurdles).
Other plan features
Other features of the LTI plan include Board discretion to determine award outcomes for executives in certain circumstances such
as cessation of employment or a change of control and also to cash settle awards on vesting if local regulations or practices make
it appropriate to do so. The LTI plan also includes a clawback mechanism that may be triggered in the event of fraud, dishonesty or
material misstatement of financial statements.
LTI outcomes in the 2017 financial year
LTI awards that were granted in November 2014 were subject to performance hurdles based on performance over the period
1 July 2014 to 30 June 2017.
For performance rights subject to the EPS performance hurdle, to meet the vesting threshold of 5% compound growth in EPS over
the performance period would have required FY2017 EPS to be at least 69.74 US cents per share. Accordingly, all of the LTI awards
subject to the EPS performance test lapsed.
For performance rights subject to the TSR performance hurdle, Computershare’s relative TSR ranking against the peer group was 43%
and this was below the threshold vesting hurdle of 50%. Accordingly, all of the LTI awards subject to the TSR performance test lapsed.
Overview of the legacy DLI plan
The Computershare LTI plan was introduced in 2014 following a review of the then current long-term incentive plan which was known
as the Deferred Long-Term Incentive Plan (DLI plan). The DLI plan is now a legacy plan and vesting of the final awards under that plan
is occurring in August / September 2017.
The DLI plan comprised awards of performance rights where 50% of awards were subject to a performance hurdle based on
Computershare meeting management EPS growth targets, while the remaining 50% were subject to a retention condition which is
satisfied if the relevant executive remains with Computershare for five years.
Of the final awards that were granted in 2012, the 50% of awards subject to a retention period have or will vest in full for executives
who remain employed on the vesting date and all of the 50% of awards subject to the management EPS hurdle have or will lapse.
Other remuneration
Like all our employees, key management personnel can participate in the Group’s general employee share plans. An overview of the
Group’s employee option and share plans is disclosed in note 41 of the financial statements.
Computershare pays cash bonuses and makes STI awards (but not LTI grants) to a further group of senior executives in accordance
with the same STI structure as outlined above. Computershare will also generally pay discretionary cash bonuses and make allocations
of shares (subject to deferred vesting periods) to an additional broader pool of high performing employees who are not participants in
the structured STI award program. On occasions, the Group allocates shares (subject to deferred vesting periods) outside the structured
annual cycle, for instance as sign-on incentives, as part of specific project incentives or in recognition of exceptional performance.
Relationship between remuneration and Group’s performance
One of the key principles of Computershare’s remuneration strategy is to ensure that there is a link between the remuneration
outcomes for executives and company performance and its consequent impact on shareholder interests. The Board believes that
the use of a management EPS growth hurdle and a relative TSR hurdle under the Group’s executive LTI plan supports that alignment.
Similarly the Board believes that short-term incentive outcomes for executives should reflect a combination of personal objectives
as well as targets that are based on financial performance. The following table highlights some of the key financial results for
Computershare over the period from the financial year 2013 to the financial year 2017 with the corresponding average STI outcomes
for executive key management personnel over the same period.
Management EBITDA (USD million)
Statutory EPS (US cents)
Management EPS (US cents)
Management EPS (US cents) – constant currency1
Total Dividend (AU cents per share)
Share price as at 30 June (AUD)
Average STI received as % of maximum opportunity
for executive KMP (%)
1 Translated at FY2017 average exchange rates
2013
509.8
28.25
54.85
47.30
28
10.27
66.5
2014
540.6
45.20
60.24
53.66
29
12.48
65.3
2015
554.1
27.61
59.82
54.18
31
11.71
48.7
2016
532.6
28.55
55.09
52.76
33
9.17
48.0
2017
540.8
48.76
54.41
54.41
36
14.14
56.8
43
D. DETAILS OF REMUNERATION AND SERVICE CONTRACTS
Directors
The directors of Computershare Limited who held the position during the current financial year are listed below.
Non-executive
CJ Morris
TL Fuller
SD Jones
ME Kerber
PJ Maclagan
AL Owen
JM Velli
Executive
SJ Irving
President and Chief Executive Officer
Key management personnel other than directors
The individuals listed below are key management personnel of the Group other than directors (within the meaning of the Australian
accounting standard AASB 124 Related Party Disclosures) who have the authority and responsibility for planning, directing and controlling
the activities of the Group. All individuals named below held their position for the whole of the financial year ended 30 June 2017.
Name
Position
Employer
SA Cameron
President – Australia and New Zealand
Computershare Investor Services Pty Ltd
PA Conn
MB Davis
President – Global Capital Markets
Chief Financial Officer
SHE Herfurth
President – Continental Europe
ML McDougall
Chief Information Officer
SR Rothbloom
President – North America
Computershare Inc (US)
Computershare Ltd
CPU Deutschland GmbH & Co KG
Computershare Technology Services Pty Ltd
Computershare Inc (US)
N Sarkar
SS Swartz
JLW Wong
Service contracts
President – United Kingdom, Channel Islands, Ireland and South Africa
Computershare Investor Services PLC (UK)
President – Canada
President – Asia
Computershare Trust Company of Canada
Computershare Hong Kong Investor Services Limited
On appointment to the board, all non-executive directors sign a formal appointment letter which includes details of their director fees.
Non-executive directors do not have notice periods and are not entitled to receive termination payments.
Except for the Group CEO, no director may be in office for longer than three years without facing re-election. Please refer to Section 3
of the Corporate Governance Statement for further information on the Company’s re-election process.
Neither the Group CEO nor other executive key management personnel are employed under fixed term arrangements with
Computershare. Their notice periods are based on contractual provisions and local laws (e.g. for the Group CEO and CFO and for
those executives based in Australia this is 30 days’ notice).
On termination of employment key management personnel are entitled to statutory entitlements in their respective jurisdictions of
employment. The DSTI plan provides for full vesting on redundancy or termination by the Group other than for cause. The DLI plan
has a structured pro rata arrangement in the same circumstances and under the LTI plan, subject to Board discretion otherwise,
performance rights for ‘good leavers’ will not vest on cessation of employment but instead a pro rata proportion will be eligible to
be retained by the executive and will be subject to vesting at the end of the original performance period based on satisfaction of the
applicable performance measures. Otherwise, none of these executives would, subject in some instances to local requirements in the
jurisdictions where the Group operates, receive special termination payments should they cease employment for any reason.
Amounts of remuneration
Details of the nature and amount of each element of the total remuneration for each director and member of key management
personnel for the year ended 30 June 2017 are set out in the table below. Where remuneration was paid in anything other than USD, it
has been translated at the average exchange rate for the financial year (for example the 2017 USD/AUD average rate was 0.75208, the
2016 USD/AUD average rate was 0.72732).
44
DIRECTORS’ REPORT Computershare Annual Report 2017 Statutory remuneration details
Short-term
Long-term
Post
employment
benefits
Share based payments expense
Other4
Total
Financial
Year
Salaries
and fees
$
Cash profit
share and
bonuses
$
Other1
$
Superannuation
/pension
$
Shares
$
Performance
rights/
options2
$
Phantom
plan3
$
$
$
894,979
232,584
44,764
14,753
-
454,684
-
347,378
1,989,142
Directors
SJ Irving5
TL Fuller5
SD Jones5
ME Kerber5
PJ Maclagan5
CJ Morris5
AL Owen5
JM Velli5
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
SA Cameron5
PA Conn
MB Davis5⁵
SHE Herfurth5
2017
2016
2017
2016
2017
2016
2017
2016
Other key management personnel
661,866
296,109
11,046
14,043
11,496
144,500
154,538
137,556
248,477
214,394
109,017
115,159
112,812
109,099
112,812
141,311
128,230
138,966
142,768
139,171
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,681
12,983
14,753
13,948
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
315,882
68,092
305,481
72,487
536,550
122,191
536,550
119,320
(817)
(777)
-
-
14,753
39,694
164,345
14,043
55,325
632
-
-
70,900
161,041
82,369
(39,118)
605,428
157,336
10,075
14,753
91,007
319,818
585,501
149,025
9,773
14,043
107,594
123,549
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,848
1,806
-
-
1,139,060
169,219
150,539
263,230
228,342
109,017
115,159
112,812
109,099
112,812
141,311
128,230
138,966
142,768
139,171
603,797
448,997
890,682
699,121
2,220
1,200,637
2,166
991,651
320,290
79,089
327,020
71,349
ML McDougall5
2017
394,851
89,919
2016
381,854
84,917
SR Rothbloom
2017
1,190,000
251,272
N Sarkar5
SS Swartz5
JLW Wong5
2016
1,190,039
268,779
2017
2016
2017
2016
2017
2016
524,656
119,692
558,318
106,786
320,679
81,339
312,450
51,242
658,675
149,220
634,709
152,469
-
-
6,581
6,364
-
-
-
-
-
-
-
-
-
-
-
-
139,022
69,064
3,441
610,906
40,657
26,890
2,847
468,763
14,753
57,531
14,043
71,674
72,879
53,724
29,492
128,822
216,687
29,950
168,190
(13,530)
-
84,368
173,743
45,596
89,251
12,873
44,295
13,665
42,855
41,393
81,002
58,969
126,869
71,204
140,838
113,719
87,958
(10,917)
-
-
-
-
-
-
-
-
-
-
6,618
643,132
2,166
614,742
-
-
1,816,273
1,643,428
2,289
2,680
3,778
2,918
904,748
844,024
543,966
482,099
2,144
1,148,950
2,350
980,288
1 Other long-term remuneration comprises long service leave accruals and other long-term entitlements.
2 Performance rights expense has been included in the total remuneration on the basis that it is considered probable at the date of this financial report that the performance
condition and service condition will be met. In future reporting periods, if the probability requirement regarding the EPS performance condition or the service condition is
not met, a credit to remuneration will be included consistent with the accounting treatment. As part of the 2018 financial year budget process, it was no longer considered
probable that the performance condition applicable to 50% of the performance rights granted on 1 December 2015 would be met. On this basis, the accounting expense
(excluding the TSR component) related to prior years has been reversed. Similarly, for the 2016 financial year the expense related to the 50% of the performance rights
granted on 25 September 2012 and 100% of the performance rights granted on 1 December 2014 was reversed.
3 The Phantom Share Awards Plan (Phantom Plan) functions as an alternative to the DSTI Share Plan to employees who are resident for tax purposes in countries where
the taxation and/or legal requirements mean the DSTI Share Plan does not achieve the most effective outcome for Computershare or those employees. Awards under the
Phantom Plan are cash-settled and vest after specified periods of service have been completed.
4 Other includes payments made to key management personnel engaged on overseas assignments in accordance with Computershare’s expatriate policy and benefits
related to Computershare’s general employee share plan as detailed in note 41 of the financial statements. For SJ Irving, the amount reflects payments for his and his
family’s relocation to the United Kingdom on a short term basis due to business requirements.
5 Key management personnel are paid in their local currency. Foreign exchange rate movements can impact on comparison between the years in US dollar terms.
45
Actual remuneration received
The table below represents the ‘actual’ remuneration outcomes for executive key management personnel in the financial year 2017.
Amounts paid in currencies other than USD are translated at average exchange rates applicable to each financial year.
Statutory remuneration disclosures prepared in accordance with the Corporations Act 2001 and Australian Accounting Standards differ
from the numbers presented below, as they include (among other benefits) expensing for equity grants that are yet to vest and may
never vest. The statutory remuneration table in respect of the executive key management personnel is presented in the table above.
SJ Irving5
SA Cameron5
PA Conn
MB Davis5
SHE Herfurth5
ML McDougall5
SR Rothbloom
N Sarkar5
SS Swartz5
JLW Wong5
Financial
year
Fixed pay1
$
Cash STI for
performance
$
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
909,732
675,909
330,635
319,524
536,550
536,550
620,181
599,544
320,290
327,020
409,604
395,897
1,219,492
1,219,989
524,656
603,914
333,552
326,115
785,544
748,428
306,188
291,069
74,954
54,631
119,320
120,984
154,097
147,704
70,215
94,602
87,807
86,100
268,779
209,568
91,225
131,764
51,012
74,207
152,381
187,015
Other benefits
and cash
payments2
$
347,378
Deferred
STI vested3
$
-
Performance
rights
vested4
$
Total actual
remuneration
$
566,128
2,129,426
-
127,999
-
1,094,977
2,989
3,877
-
-
-
-
3,441
2,847
4,405
-
-
-
5,325
3,086
653
-
37,936
25,320
59,407
66,242
80,978
101,756
108,214
101,347
64,561
66,368
73,988
77,157
187,286
199,001
85,891
91,882
38,676
-
754,838
1,222,823
-
-
-
444,274
736,848
759,290
566,128
1,448,620
-
848,595
754,838
1,213,345
-
-
-
-
-
490,837
575,804
559,154
1,675,557
1,628,558
377,419
1,084,516
-
-
-
830,646
423,893
400,322
93,595
377,419
1,446,875
106,521
-
1,067,284
1 Represents base salary plus superannuation/pension.
2 Other includes payments made to key management personnel engaged on overseas assignments in accordance with Computershare’s expatriate policy and shares held
in the Deferred Employee Share Plan (note 41) that vested in the relevant financial year and the phantom shares vesting. For SJ Irving, the amount reflects payments for his
and his family’s relocation to the United Kingdom on a short term basis due to business requirements.
3 Deferred STI that vested in the relevant financial year. The five day weighted average share price used to value the deferred STI at vesting date is AUD 9.90 for awards
vested on 1 September 2016 (1 September 2015: AUD 9.87).
4 Performance rights that vested in the relevant financial year. These were rights granted under the legacy DLI plan, which were generally granted on a non-annual basis and
with a five-year performance and retention period. The five-day weighted average share price used to value the performance rights at vesting date is AUD 10.04 for awards
vested on 19 September 2016.
5 Key management personnel are paid in their local currency. Foreign exchange rate movements can impact on comparison between the years in US dollar terms.
46
DIRECTORS’ REPORT Computershare Annual Report 2017
1. Short-term salary and fees, cash profit share and bonuses, long-term other, post-employment benefits
Directors
SJ Irving, TL Fuller, SD Jones, PJ Maclagan, and CJ Morris are paid in Australian dollars. Although the non-executive director fees for
ME Kerber, AL Owen and JM Velli are set in Australian dollars, they can elect to be paid in Euros, British pounds and United States
dollars respectively based on an exchange rate set at the start of each financial year.
Group CEO and other executive key management personnel
There were no general increases to base salary and STI award packages for the executive key management personnel in the financial
year 2017. S Swartz received an increase of CAD 25,000 in financial year 2017 in recognition of his greater experience in the role.
All executive key management personnel receive their salary and other cash payments in their local currency.
2. Shares granted as remuneration under DSTI Plan
Set out below is a summary of shares granted under the DSTI plan and the maximum value of shares that are expected to vest in the
future if the vesting conditions are met:
Date
granted
Number
granted
Number
vested
during
the year
Number
outstanding
end of
the year
Financial
year in
which grant
may vest
Value at
grant date
(if granted
this year)
Maximum
total value
of grant
yet to be
expensed
SA Cameron
PA Conn
MB Davis
SHE Herfurth
ML McDougall
SR Rothbloom
N Sarkar
SS Swartz
JLW Wong
1/10/2014
1/10/2015
1/10/2016
1/10/2014
1/10/2015
1/10/2016
1/10/2014
1/10/2015
1/10/2016
1/10/2014*
1/10/2015*
1/10/2016*
1/10/2014
1/10/2015
1/10/2016
1/10/2014
1/10/2015
1/10/2016
1/10/2014
1/10/2015
1/10/2016
1/10/2014
1/10/2015
1/10/2016
1/10/2014
1/10/2015
1/10/2016
7,981
4,241
5,082
(7,981)
-
-
10,879
(10,879)
7,751
9,738
14,538
10,568
11,512
8,468
4,719
5,935
9,940
6,362
7,508
25,161
11,460
19,798
11,539
9,327
11,822
5,196
5,114
6,143
12,574
6,881
10,560
-
-
(14,538)
-
-
(8,468)
-
-
(9,940)
-
-
(25,161)
-
-
(11,539)
-
-
(5,196)
-
-
(12,574)
-
-
-
4,241
5,082
-
7,751
9,738
-
10,568
11,512
-
4,719
5,935
-
6,362
7,508
-
11,460
19,798
-
9,327
11,822
-
5,114
6,143
-
6,881
10,560
Vested
FY 2018
FY 2019
Vested
FY 2018
FY 2019
Vested
FY 2018
FY 2019
Vested
FY 2018
FY 2019
Vested
FY 2018
FY 2019
Vested
FY 2018
FY 2019
Vested
FY 2018
FY 2019
Vested
FY 2018
FY 2019
Vested
FY 2018
FY 2019
$
-
-
40,071
-
-
76,783
-
-
90,770
-
-
46,797
-
-
59,199
-
-
156,104
-
-
93,215
-
-
48,437
-
-
83,264
* Awards made under the Phantom Plan
Fair values of shares at grant date are determined using the closing share price on grant date.
$
-
3,033
24,465
-
5,543
46,880
-
7,557
55,420
-
4,242
37,346
-
4,550
36,145
-
8,195
95,310
-
6,670
56,913
-
3,657
29,573
-
4,921
50,837
47
3. Performance rights
Performance rights granted under the DLI plan and the LTI plan are for no consideration and carry no dividend or voting rights. Each
performance right carries an entitlement to one fully paid ordinary share in Computershare Limited.
Set out below is a summary of performance rights granted under the DLI and LTI plans.
Date
granted
Number
granted
Number
vested
during the
year
Number
lapsed
during the
year
Number
outstanding
end of
the year
Financial
year in
which grant
may vest
Value at
grant date
(if granted
this year)
SJ Irving
12/10/2011
25/09/2012
1/12/2014
1/12/2015
16/12/2016
SA Cameron
04/05/2012
PA Conn
MB Davis
25/09/2012
1/12/2014
1/12/2015
16/12/2016
25/09/2012
1/12/2014
1/12/2015
16/12/2016
12/10/2011
25/09/2012
1/12/2014
1/12/2015
16/12/2016
SHE Herfurth
12/10/2011
25/09/2012
1/12/2014
1/12/2015
16/12/2016
ML McDougall
1/12/2014
1/12/2015
16/12/2016
150,000
100,000
107,084
130,522
170,170
200,000
150,000
29,654
36,144
36,036
100,000
43,937
49,024
45,708
150,000
100,000
94,728
115,461
115,115
200,000
100,000
30,069
38,768
37,314
18,533
33,885
33,783
SR Rothbloom
25/09/2012
100,000
1/12/2014
1/12/2015
16/12/2016
12/10/2011
25/09/2012
1/12/2014
1/12/2015
16/12/2016
1/12/2014
1/12/2015
16/12/2016
12/10/2011
25/09/2012
1/12/2014
1/12/2015
16/12/2016
73,086
72,487
67,583
100,000
100,000
45,411
67,498
55,223
22,288
37,895
37,237
100,000
100,000
39,000
38,698
36,057
N Sarkar
SS Swartz
JLW Wong
48
(75,000)
(75,000)
-
-
-
-
-
-
-
-
(100,000)
(100,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(75,000)
(75,000)
-
-
-
-
-
-
-
-
(100,000)
(100,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(50,000)
(50,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
(50,000)
(50,000)
-
-
-
-
-
-
-
-
-
100,000
107,084
130,522
170,170
-
150,000
29,654
36,144
36,036
100,000
43,937
49,024
45,708
-
100,000
94,728
115,461
115,115
-
100,000
30,069
38,768
37,314
18,533
33,885
33,783
100,000
73,086
72,487
67,583
-
100,000
45,411
67,498
55,223
22,288
37,895
37,237
-
100,000
39,000
38,698
36,057
FY 2017
FY 2018
FY 2018
FY 2019
FY 2020
FY 2017
FY 2018
FY 2018
FY 2019
FY 2020
FY 2018
FY 2018
FY 2019
FY 2020
FY 2017
FY 2018
FY 2018
FY 2019
FY 2020
FY 2017
FY 2018
FY 2018
FY 2019
FY 2020
FY 2018
FY 2019
FY 2020
FY 2018
FY 2018
FY 2019
FY 2020
FY 2017
FY 2018
FY 2018
FY 2019
FY 2020
FY 2018
FY 2019
FY 2020
FY 2017
FY 2018
FY 2018
FY 2019
FY 2020
Maximum
total value
of grant
yet to be
expensed
$
-
-
-
91,128
$
-
-
-
-
1,277,708
851,806
-
-
-
-
-
-
-
25,235
270,574
180,382
-
-
-
-
-
34,228
343,195
228,797
-
-
-
-
-
-
-
80,612
864,332
576,226
-
-
-
-
-
-
-
27,067
280,169
186,780
-
-
-
23,657
253,657
169,110
-
-
-
-
-
50,609
507,442
338,300
-
-
-
-
-
-
-
47,126
414,638
276,430
-
-
-
26,457
279,591
186,399
-
-
-
-
-
-
-
27,018
270,731
180,492
DIRECTORS’ REPORT Computershare Annual Report 2017
Shareholdings of key management personnel
The number of ordinary shares in Computershare Limited held during the financial year by each director and the other named key
management personnel, including details of shares granted as remuneration during the current financial year and ordinary shares
provided as the result of the exercise of remuneration options during the current financial year, are included in the table below.
Balance at
beginning
of the year
Vested
under
DSTI plan
On exercise
of options/
performance
rights
On market
purchases/
(sales)
Balance at
end of
the year
Other
Value of
options/
performance
rights
exercised
Directors
SJ Irving
TL Fuller
SD Jones
M Kerber
PJ Maclagan
CJ Morris
AL Owen
JM Velli
17,837
2,000
17,000
40,000
12,617,025
37,431,000
12,910
10,000
Other key management personnel
SA Cameron
PA Conn
MB Davis
SHE Herfurth
ML McDougall
SR Rothbloom
N Sarkar
SS Swartz
JLW Wong
78
503,752
14,420
1,862
63,990
83,479
7,782
-
163,037
75,000
(39,122)
-
-
-
-
-
-
-
-
-
-
(998,157)
(2,300,000)
-
-
100,000
(108,418)
-
-
-
-
-
-
-
-
7,981
10,879
14,538
-
75,000
-
100,000
9,940
25,161
11,539
5,196
12,574
-
-
50,000
-
50,000
1,848
(87,123)
(76,439)
(46,481)
(10,497)
(61,539)
(5,196)
(25,000)
-
-
-
-
-
-
-
-
437
-
-
285
-
-
716
-
53,715
2,000
17,000
40,000
11,618,868
35,131,000
12,910
10,000
78
516,479
16,835
25,708
27,449
98,143
8,498
-
4,160
204,771
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
E. PROPORTIONS OF FIXED AND PERFORMANCE RELATED REMUNERATION
The percentage value of total remuneration relating to the current financial year received by key management personnel that consists of
fixed and performance related remuneration is as follows:
% of fixed/
non-performance
related remuneration
% of total remuneration
received as
cash bonus (CSTI)
% of remuneration
received as
equity bonus (DSTI)
% of total remuneration
received as performance
related rights/options*
SJ Irving
TL Fuller
SD Jones
ME Kerber
PJ Maclagan
CJ Morris
AL Owen
JM Velli
SA Cameron
PA Conn
MB Davis
SHE Herfurth
ML McDougall
SR Rothbloom
N Sarkar
SS Swartz
JLW Wong
60.14%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
50.84%
56.10%
46.66%
49.28%
61.40%
63.73%
52.93%
56.70%
65.58%
10.75%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
10.44%
12.77%
11.60%
11.93%
13.06%
13.13%
12.02%
13.67%
12.43%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
6.08%
7.41%
6.71%
9.96%
8.35%
6.73%
8.48%
7.45%
5.93%
* Excludes the performance rights reversal in the year ended 30 June 2017.
29.11%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
32.64%
23.72%
35.03%
28.83%
17.19%
16.41%
26.57%
22.18%
16.06%
49
F. OTHER INFORMATION
Loans and other transactions with directors and executives
Computershare made no loans to directors and executive directors or other key management personnel during the current financial year.
CJ Morris had a significant interest in Lumi Technologies Limited until 31 March 2017. This entity provides meeting services to
Computershare on ordinary commercial terms and conditions. Total value of services provided in the period to 31 March 2017 was
$744,152. Computershare also provides services to Lumi Technologies Limited, which comprise rental of premises and voucher
services, on ordinary commercial terms and conditions. Total value of services provided in the period to 31 March 2017 was $177,157.
The consolidated entity made rental payments related to property used by Computershare and owned by CJ Morris. Payments made
in the year ended 30 June 2017 amounted to $27,528.
As a matter of Board approved policy, the Group maintains a register of all transactions between employees and the consolidated
entity. It is established practice for any director to excuse himself or herself from discussion and voting upon any transaction in which
that director has an interest. The consolidated entity has a Board approved ethics policy governing many aspects of workplace
conduct, including management and disclosure of conflicts of interest.
Derivative instruments
Computershare’s policy forbids key management personnel to deal in derivatives designed as a hedge against exposure to unvested
shares in Computershare Limited.
Shares under option
Unissued ordinary shares in Computershare Limited under performance rights at the date of this report are as follows:
Date granted
Performance rights
25/09/2012
1/12/2015
16/12/2016
AUDITOR
Financial year of expiry
Number under performance rights
2018
2019
2020
850,000
716,916
750,375
PricewaterhouseCoopers continues in office in accordance with section 327 of the Corporations Act 2001.
Auditor’s independence declaration
A copy of the auditor’s signed independence declaration as required under section 307C of the Corporations Act 2001 is provided
immediately after this report.
Non-audit services
The Group may decide to employ its auditor, PricewaterhouseCoopers, on assignments in addition to their statutory audit duties where
the auditor’s expertise and experience with the Group are important.
The Board is satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001 and internal guidelines. Further details regarding the Board’s internal policy for engaging
PricewaterhouseCoopers for non-audit services are set out in the Corporate Governance Statement.
The directors are satisfied that the provision of non-audit services by PricewaterhouseCoopers, as set out below, did not compromise
the auditor independence requirements of the Corporations Act 2001 for the following reasons:
> No services were provided by PricewaterhouseCoopers that are prohibited by policy (the policy lists services that cannot
be undertaken).
> None of the services provided undermine the general principles relating to auditor’s independence, including reviewing or auditing
the auditor’s own work, acting in a management capacity or a decision making capacity for the Group, acting as an advocate for
the Group or jointly sharing economic risks and rewards.
50
DIRECTORS’ REPORT Computershare Annual Report 2017
During the year the following amounts were incurred in relation to services provided by PricewaterhouseCoopers and its network firms.
1. Audit services
Audit and review of the financial statements and other audit work by PricewaterhouseCoopers Australia
Audit and review of the financial statements and other audit work by network firms of PricewaterhouseCoopers Australia
2. Other services
Other assurance services performed by PricewaterhouseCoopers Australia
Other assurance services performed by network firms of PricewaterhouseCoopers Australia
Tax advice on acquisitions provided by network firms of PricewaterhouseCoopers Australia
Total Auditor’s Remuneration
ROUNDING OF AMOUNTS
2017
$000
925
2,849
3,774
380
1,698
-
2,078
5,852
2016
$000
704
2,691
3,395
317
2,139
10
2,466
5,861
The Group is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, issued by the
Australian Securities and Investments Commission, relating to the “rounding off” of amounts in the Directors’ Report. Amounts in the
Directors’ Report have been rounded off in accordance with that Class order to the nearest thousand dollars unless specifically stated
to be otherwise.
Signed in accordance with a resolution of the directors.
SD Jones
Chairman
18 September 2017
SJ Irving
Chief Executive Officer
51
AUDITOR’S INDEPENDENCE DECLARATION
Auditor’s Independence Declaration
As lead auditor for the audit of Computershare Limited for the year ended 30 June 2017, I declare
that to the best of my knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Computershare Limited and the entities it controlled during
the period.
Anton Linschoten
Partner
PricewaterhouseCoopers
Melbourne
18 September 2017
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
52
Computershare Annual Report 2017 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 30 June 2017
Revenue from continuing operations
Sales revenue
Other revenue
Total revenue from continuing operations
Other income
Expenses
Direct services
Technology costs
Corporate services
Finance costs
Total expenses
Share of net profit/(loss) of associates and joint ventures accounted for using the equity method
Profit before related income tax expense
Income tax expense/(credit)
Profit for the year
Other comprehensive income that may be reclassified to profit or loss
Available-for-sale financial assets
Cash flow hedges
Exchange differences on translation of foreign operations
Income tax relating to components of other comprehensive income
Total other comprehensive income for the year, net of tax
Total comprehensive income for the year
Profit for the year attributable to:
Members of Computershare Limited
Non-controlling interests
Total comprehensive income for the year attributable to:
Members of Computershare Limited
Non-controlling interests
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Note
2017
$000
2016
$000
2
2
2
32
6
6
2,100,811
1,957,860
4,951
3,265
2,105,762
1,961,125
62,365
27,740
1,438,887
1,405,410
286,432
260,570
23,145
54,394
22,047
54,480
1,802,858
1,742,507
655
365,924
94,223
271,701
11
-
5,680
(4,078)
1,613
273,314
(1,349)
245,009
83,211
161,798
(62)
(497)
(17,005)
(6,841)
(24,405)
137,393
266,395
157,334
5,306
4,464
271,701
161,798
266,919
133,912
6,395
3,481
273,314
137,393
4
4
48.76 cents
28.55 cents
48.68 cents
28.51 cents
The above consolidated statement of comprehensive income is presented in United States dollars and should be read in conjunction
with the accompanying notes.
53
CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 30 June 2017
CURRENT ASSETS
Cash and cash equivalents
Bank deposits
Receivables
Loan servicing advances
Available-for-sale financial assets
Other financial assets
Inventories
Current tax assets
Derivative financial instruments
Other current assets
Assets classified as held for sale
Total current assets
NON-CURRENT ASSETS
Receivables
Investments accounted for using the equity method
Available-for-sale financial assets
Property, plant and equipment
Deferred tax assets
Derivative financial instruments
Intangibles
Total non-current assets
Total assets
CURRENT LIABILITIES
Payables
Interest bearing liabilities
Current tax liabilities
Provisions
Derivative financial instruments
Deferred consideration
Mortgage servicing related liabilities
Liabilities directly associated with assets classified as held for sale
Other liabilities
Total current liabilities
NON-CURRENT LIABILITIES
Payables
Interest bearing liabilities
Deferred tax liabilities
Provisions
Deferred consideration
Derivative financial instruments
Mortgage servicing related liabilities
Other liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Retained earnings
Total parent entity interest
Non-controlling interests
Total equity
Note
2017
$000
2016
$000
7
15
16
20
17
18
13
19
9
15
32
20
21
6
13
10
22
14
23
13
24
25
9
26
22
14
6
23
24
13
25
26
28
29
30
27
27
489,917
6,505
422,805
217,752
1,583
19,396
3,748
4,026
470
28,417
57,082
526,575
20,174
425,343
255,139
591
18,655
4,512
6,423
1,952
29,694
26,128
1,251,701
1,315,186
49
11,021
34,391
109,897
178,675
19,440
876
25,157
17,487
116,535
178,644
48,035
2,341,856
2,273,628
2,695,329
2,660,362
3,947,030
3,975,548
433,973
117,228
44,816
46,616
3,653
21,914
25,323
57,413
2,205
753,141
382,921
260,088
29,131
40,688
1,238
12,402
30,383
-
39,486
796,337
4,300
9,740
1,455,837
1,603,217
258,251
232,100
26,635
48,953
3,374
157,347
2,164
29,129
65,969
5,500
124,222
2,801
1,956,861
2,072,678
2,710,002
2,869,015
1,237,028
1,106,533
-
-
(98,487)
(95,872)
1,315,607
1,188,890
1,217,120
1,093,018
19,908
13,515
1,237,028
1,106,533
The above consolidated statement of financial position is presented in United States dollars and should be read in conjunction with the
accompanying notes.
54
Computershare Annual Report 2017
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 30 June 2017
Attributable to members of Computershare Limited
Contributed
Equity
$000
Note
Reserves
$000
Retained
Earnings
$000
Non-
controlling
Interests
$000
Total
$000
Total
Equity
$000
Total equity at 1 July 2016
Profit for the year
Available-for-sale financial assets
Exchange differences on translation of
foreign operations
Income tax (expense)/credits
Total comprehensive income for the year
Transactions with owners in their
capacity as owners:
Dividends provided for or paid
Share buy-back
28
Cash purchase of shares on market
Share based remuneration
Balance at 30 June 2017
Total equity at 1 July 2015
Profit for the year
Available-for-sale financial assets
Cash flow hedges
Exchange differences on translation of
foreign operations
Income tax (expense)/credits
Total comprehensive income for the year
Transactions with owners in their
capacity as owners:
Dividends provided for or paid
-
-
-
-
-
-
-
-
-
-
-
(95,872)
1,188,890
1,093,018
13,515
1,106,533
-
11
4,591
(4,078)
266,395
266,395
5,306
271,701
-
-
-
11
4,591
-
1,089
11
5,680
(4,078)
-
(4,078)
524
266,395
266,919
6,395
273,314
-
(139,678)
(139,678)
(3,458)
(15,105)
15,424
-
-
-
(3,458)
(15,105)
15,424
(2)
-
-
-
(139,680)
(3,458)
(15,105)
15,424
(98,487)
1,315,607
1,217,120
19,908
1,237,028
35,703
(33,762)
1,160,106
1,162,047
13,394
1,175,441
-
-
-
-
-
-
-
-
157,334
157,334
4,464
161,798
(62)
(497)
(16,022)
(6,841)
-
-
-
-
(62)
(497)
-
-
(62)
(497)
(16,022)
(983)
(17,005)
(6,841)
-
(6,841)
(23,422)
157,334
133,912
3,481
137,393
-
(128,550)
(128,550)
(2,799)
(131,349)
Share buy-back
28
(35,703)
(37,469)
Transactions with non-controlling interests
Cash purchase of shares on market
Share based remuneration
Balance at 30 June 2016
-
-
-
-
-
(12,177)
10,958
-
-
-
-
(73,172)
-
(12,177)
10,958
-
(561)
-
-
(73,172)
(561)
(12,177)
10,958
(95,872)
1,188,890
1,093,018
13,515
1,106,533
The above consolidated statement of changes in equity is presented in United States dollars and should be read in conjunction with
the accompanying notes.
55
CONSOLIDATED CASH FLOW STATEMENT for the year ended 30 June 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Loan servicing advances (net)
Dividends received from associates, joint ventures and equity securities
Interest paid and other finance costs
Interest received
Income taxes paid
Net operating cash flows
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for purchase of controlled entities and businesses (net of cash acquired) and intangible assets
including MSRs
Proceeds from sale of property, plant and equipment
Proceeds from disposal of associates and joint ventures
Proceeds from/(payments for) investments
Payments for property, plant and equipment
Proceeds from sale of subsidiaries and businesses, net of cash disposed
Net investing cash flows
CASH FLOWS FROM FINANCING ACTIVITIES
Payment for purchase of ordinary shares – share based awards
Proceeds from borrowings
Repayment of borrowings
Loan servicing borrowings (net)
Dividends paid – ordinary shares (net of dividend reinvestment plan)
Purchase of ordinary shares – dividend reinvestment plan
Dividends paid to non-controlling interests in controlled entities
Payments for on-market share buy-back
Repayment of finance leases
Net financing cash flows
Net increase/(decrease) in cash and cash equivalents held
Cash and cash equivalents at the beginning of the financial year
Exchange rate variations on foreign cash balances
Cash and cash equivalents at the end of the year*
Note
2017
$000
2016
$000
2,201,306
2,001,817
(1,670,948)
(1,521,470)
37,387
2,469
(56,136)
2,912
(59,308)
457,682
(68,137)
1,146
(53,786)
2,564
(57,042)
305,092
7
(110,700)
(167,848)
66,240
23,786
1,489
(34,215)
-
-
1,532
(19,984)
(25,317)
(6,511)
(53,400)
(218,128)
(15,105)
466,047
(680,565)
(13,586)
(12,177)
494,918
(439,840)
41,381
(129,672)
(123,057)
(10,006)
(2)
(3,458)
(30,071)
(5,493)
(2,799)
(71,830)
(6,684)
(416,418)
(125,581)
(12,136)
526,575
(3,756)
510,683
(38,617)
604,092
(38,900)
526,575
* Cash and cash equivalents at 30 June 2017 includes $20.8 million cash (2016: nil) presented in the assets classified as held for sale line item in the consolidated statement of
financial position.
The above consolidated cash flow statement is presented in United States dollars and should be read in conjunction with the
accompanying notes.
56
Computershare Annual Report 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of preparation
Results and key balances
2. Revenue and other income
3. Expenses
4. Earnings per share
5. Segment information
6. Income tax expense and balances
7. Notes to the consolidated cash flow statement
8. Business combinations
9. Assets and liabilities classified as held for sale
10. Intangible assets
11. Impairment
Financial risk management
12. Financial risk management
13. Derivative financial instruments
14. Interest bearing liabilities
Other balance sheet items
15. Receivables
16. Loan servicing advances
17. Other financial assets
18. Inventories
19. Other current assets
20. Available-for-sale financial assets
21. Property, plant and equipment
22. Payables
23. Provisions
24. Deferred consideration
25. Mortgage servicing related liabilities
26. Other liabilities
Equity
27. Interests in equity
28. Contributed equity
29. Reserves
30. Retained earnings and dividends
Group structure
31. Details of controlled entities
32. Investments in associates and joint ventures
33. Deed of cross guarantee
34. Parent entity financial information
Unrecognised items
35. Contingent liabilities
36. Commitments
37. Capital expenditure commitments
38. Significant events after year end
Other information
39. Related party disclosures
40. Key management personnel disclosures
41. Employee and executive benefits
42. Remuneration of auditors
57
1. BASIS OF PREPARATION
The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been
consistently applied to all the periods presented, unless otherwise stated. The financial report is for the consolidated entity consisting
of Computershare Limited and its controlled entities, referred to collectively throughout these financial statements as the “consolidated
entity”, “the Group” or “Computershare”.
Basis of preparation of full year financial report
This general purpose financial report for the reporting period ended 30 June 2017 has been prepared in accordance with Australian
Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.
Computershare Limited is a for-profit entity for the purpose of preparing financial statements.
This report is to be read in conjunction with any public announcements made by Computershare Limited during the reporting period in
accordance with the continuous disclosure requirements of the Corporations Act 2001 and Australian Securities Exchange Listing Rules.
Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current period.
Compliance with IFRS
The financial statements of Computershare Limited and its controlled entities also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
Historical cost convention
The financial statements have been prepared under the historical cost convention as modified by the revaluation of available-for-sale
financial assets and financial assets and liabilities (including derivative instruments) at fair value through profit or loss.
Principles of consolidation
The consolidated financial statements include the assets and liabilities of the parent entity, Computershare Limited, and its
controlled entities.
All intercompany balances and transactions have been eliminated. Where an entity either began or ceased to be controlled during the
year, the results are consolidated only from the date control commenced or up to the date control ceased.
Financial statements of foreign controlled entities, associates and joint ventures presented in accordance with overseas accounting
principles are, for consolidation purposes, adjusted to comply with Group policy and Australian Accounting Standards.
Controlled entities
Controlled entities are all those entities over which the Group has control. The Group controls an entity when the Group 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. Controlled entities are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated
from the date that control ceases.
The acquisition method of accounting is used to account for the acquisition of controlled entities by the Group.
Investments in associated entities
Associates are all entities over which the Group has significant influence but not control or joint control. This generally accompanies a
shareholding of between 20% and 50% of the voting rights. Interests in associates are accounted for using the equity method.
Investments in joint ventures
Joint ventures are arrangements where Computershare has joint control with another party over that arrangement and each party has
rights to the net assets of that arrangement. Joint control is the agreed sharing of control, which exists when decisions about relevant
activities require unanimous consent of parties sharing control. Interests in joint ventures are accounted for using the equity method.
Changes in ownership interests
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity
owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling
and non-controlling interests to reflect their relative interests in the controlled entity. Any difference between the amount of the
adjustment to non-controlling interests and any consideration paid or received is recognised in a separate reserve within equity
attributable to owners of the parent entity.
58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017 Foreign currency
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (the ‘functional currency’). The consolidated financial statements are presented in US dollars
as a significant portion of the Group’s activity is denominated in US dollars.
Transactions and balances
Foreign currency transactions are converted to US dollars at exchange rates approximating those in effect at the date of each transaction.
Amounts payable and receivable in foreign currencies at balance date are converted to US dollars at the average of the buy and sell rates
available on the close of business at balance date. Revaluation gains and losses are brought to account as they occur.
Exchange differences relating to monetary items are included in profit or loss, as exchange gains or losses, in the period when the
exchange rates change, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.
Group companies
The results and financial position of all the Group entities that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
> Assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement
> Income and expenses for each statement of comprehensive income are translated at average exchange rates
> All resulting exchange differences are recognised in other comprehensive income
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other
currency instruments designated as hedges of such investments, are recognised in other comprehensive income and reflected in equity.
Goodwill and fair value adjustments arising on acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and
are translated at the closing rate.
Key estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of
future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal
the related actual results. The significant estimates and assumptions made in the current financial year are set out in the relevant notes:
Note
2
6
6
8
11
Key accounting estimates and judgements
Revenue and other income
Provision for income tax
Deferred tax assets relating to carry forward tax losses
Accounting for business combinations
Impairment
Rounding of amounts
The consolidated entity is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191,
issued by the Australian Securities and Investments Commission, relating to the ‘rounding off’ of amounts in the financial report. In
accordance with this Class Order, amounts in the financial report have been rounded off to the nearest thousand dollars, or in certain
cases, the nearest dollar.
New and amended accounting standards and interpretations adopted from 1 July 2016
The Group has adopted the following standards and amendments commencing 1 July 2016:
> AASB 2014-4 Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of Depreciation and Amortisation
> AASB 2015-1 Amendments to Australian Accounting Standards – Annual improvements to Australian Accounting Standards 2012 –
2014 cycle
> AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure initiative: Amendments to AASB 101, and
> AASB 2015-9 Amendments to Australian Accounting Standards – Scope and Application Paragraphs
The adoption of these amendments did not have any impact on the current period or any prior period and is not likely to affect
future periods.
59
New and amended standards and interpretations issued but not yet effective
Certain new accounting standards have been published that are not mandatory for 30 June 2017 reporting periods and have not been
early adopted by the Group. The Group’s assessment of the impact of these new standards is set out below.
AASB 15 Revenue from contracts with customers
AASB 15 is a new standard in relation to recognition of revenue and will replace AASB 118 which covers revenue arising from the sale
of goods and services and AASB 111 which covers construction contracts. This standard is mandatory for financial years commencing
on or after 1 January 2018. The Group will adopt AASB 15 in the financial year beginning 1 July 2018.
Under AASB 15, revenue is recognised in a manner that depicts the transfer of promised goods or services to customers in an amount
that reflects the consideration to which the provider of the goods or services expects to be entitled. The new standard requires
adoption of the following 5-step model of revenue recognition:
> Identify the contract with a customer
> Identify performance obligations under the contract
> Determine transaction price
> Allocate transaction price to performance obligations under the contract
> Recognise revenue when or as the entity satisfies its performance obligations
The Group is continuing a group-wide project assessing the effects of applying the new standard on the Group’s financial statements.
It is expected that some timing difference in revenue recognition may occur on adoption of AASB 15 given the nature of the Group’s
business and its customer contracts. At this stage, the Group is not able to estimate the effect of the new rules on the Group’s financial
statements. The Group will continue to assess the impact of the new standard to ensure timely implementation.
AASB 9 Financial Instruments
AASB 9 addresses the classification, measurement and derecognition of financial assets and financial liabilities and introduces
new rules for hedge accounting and a new impairment model for financial assets. The standard is mandatory for financial years
commencing on or after 1 January 2018 and the Group will apply AASB 9 in the financial year beginning 1 July 2018.
AASB 9 replaces the classification and measurement requirements of AASB 139 with the approach that classifies financial assets
based on a business model for managing financial assets and whether the contractual cash flows represent solely payments of
principal and interest. Financial assets can be classified as financial assets at amortised cost, financial assets at fair value through profit
or loss or financial assets at fair value through other comprehensive income. The Group does not expect the new guidance to have a
significant impact on the classification and measurement of its financial assets.
AASB 9 will change hedge accounting by introducing more principle based approach to hedge effectiveness testing and by increasing
eligibility of both hedge instruments and hedged items. The Group will apply the new hedge accounting requirements from 1 July 2018
and it expects that the Group’s current hedge relationships will qualify as continuing hedges upon adoption of AASB 9.
The new impairment model requires the recognition of impairment provisions based on expected credit losses rather than incurred
credit losses as is the case under AASB 139. Expected credit losses are probability weighted amounts determined by evaluating a
range of possible outcomes and taking into account the time value of money, past events, current conditions and forecasts of future
economic conditions. The Group is currently assessing the effects of the new impairment model. Although some impact of the new
rules is expected (e.g, the method of provisioning for doubtful debtors will change), it is not expected to be material for the Group.
AASB 16 Leases
AASB 16 is a new standard in relation to leases which will primarily affect the accounting by lessees and will result in the recognition of
almost all leases on balance sheet. The standard removes the current distinction between operating and financing leases and requires
recognition of an asset (the right to use the leased item) and a financial liability to pay rental. The only exemption relates to short-term
and low-value leases. Additionally operating lease expense will be replaced with interest and depreciation impacting EBITDA metrics.
This standard is applicable to financial years commencing on or after 1 January 2019 and is available for early adoption, if AASB 15
has been applied. The Group does not expect to adopt AASB 16 before its operative date but will make the final decision once the
impact assessment is completed.
As at the reporting date, the Group has non-cancellable operating lease commitments of $224.5 million (refer to note 36). However,
the Group has not yet determined to what extent these commitments will result in the recognition of an asset and a liability for future
payments and how this will affect the Group’s profit and classification of cash flows.
There are no other standards that are not yet effective and that would be expected to have a material impact on the consolidated
entity in the current or future reporting periods and on foreseeable future transactions.
60
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017 2. REVENUE AND OTHER INCOME
Sales revenue
Rendering of services
Other revenue
Dividends received
Interest received
Total other revenue
Total revenue from continuing operations
Other income
Gain on disposals
Rent received
Gain on acquisition
Marked to market adjustments - derivatives
Other
Total other income
Revenue
Note
2017
$000
2016
$000
2,100,811
1,957,860
2,039
2,912
4,951
701
2,564
3,265
2,105,762
1,961,125
4
4
52,764
3,632
1,316
-
4,653
62,365
325
3,734
11,113
3,244
9,324
27,740
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns,
trade discounts and volume rebates.
The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will
flow to the consolidated entity and specific criteria have been met for each of the Group’s activities. The Group bases its estimates on
historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.
Services revenue is recognised in the accounting period in which the services are rendered. For fixed-price contracts, revenue is
recognised under the percentage of completion method, based on the actual service provided as proportion of the total services to
be provided.
Other revenue
Other revenue includes interest income on short-term deposits controlled by the consolidated entity, and royalties and dividends
received from other entities. Interest income is recognised using the effective interest method. Royalties and dividends are recognised
as revenue when the right to receive payment is established.
Insurance recoveries
The consolidated entity recognises amounts receivable under its insurance policies, net of any relevant excess amounts, upon
indemnity being acknowledged by the insurers.
Key estimates and judgements
As part of Computershare’s appointment by UK Asset Resolution to undertake its mortgage servicing activities, it was agreed that
a fixed fee would be payable to Computershare over four years for the provision of infrastructure to support core services under
the contract. Based on the adopted percentage of completion method which links the fixed fee to the infrastructure costs incurred
over the applicable period, the Group is required to reassess the projected costs and the related fee recognition on an annual
basis. This reassessment may lead to fluctuations in the fixed fee amounts recognised in future years. Judgement is required with
regard to the total cost estimate, the percentage of costs incurred to date and the length of the applicable recognition period.
61
3. EXPENSES
Profit before tax includes the following specific expenses:
Depreciation and amortisation
Depreciation of property, plant and equipment
Amortisation of intangible assets
Amortisation of mortgage servicing related liabilities
Total amortisation (net)
Total depreciation and amortisation
Finance costs
Interest expense
Loan facility fees and other borrowing expenses
Total finance costs
Other operating expense items
Operating lease rentals
Technology spending – research and development
Employee entitlements (excluding superannuation and other pension) expense
Superannuation and other pension expense
Profit before tax includes the following individually material expenses. Further information is included in note 4.
Individually material items
Voucher Services impairment
Put option liability re-measurement
Acquisition related accounting adjustments
Foreign currency translation reserve write-off on disposals
Asset write-down
Depreciation and amortisation
Refer to notes 10, 21 and 25 for further details on depreciation and amortisation.
Finance costs
Finance costs are recognised as an expense when they are incurred.
Operating lease rentals
2017
$000
2016
$000
35,188
106,031
(22,119)
83,912
119,100
51,733
2,661
54,394
62,492
75,763
38,715
120,683
(12,382)
108,301
147,016
51,886
2,594
54,480
58,463
76,882
835,372
770,140
40,513
37,437
11,315
7,080
-
-
-
-
7,526
45,642
25,904
1,687
Operating leases are leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group.
Payments made under operating leases (net of any incentives received from the lessor) are charged to the statement of comprehensive
income on a straight-line basis over the period of the lease.
Technology spending – research and development
These are operating expenses incurred on Group research and development activities.
Employee entitlements
Employee entitlements include salaries and wages, leave entitlements, incentives and share-based payment awards. The Group’s
accounting policy for liabilities associated with employee benefits is set out in notes 22 and 23. The policy relating to share-based
payments is set out in note 41.
Superannuation and other pension expense
The Group makes contributions to various defined contribution superannuation and pension plans. The Group has no further
payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when
they become payable.
62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017
4. EARNINGS PER SHARE
Year ended 30 June 2017
Earnings per share (cents per share)
Reconciliation of earnings
Profit for the year
Non-controlling interest (profit)/loss
Add back management adjustment items (see below)
Basic EPS
Diluted EPS
Management
Basic EPS
Management
Diluted EPS
48.76 cents
48.68 cents
54.41 cents
54.32 cents
$000
$000
$000
$000
271,701
271,701
271,701
271,701
(5,306)
(5,306)
-
-
(5,306)
30,877
297,272
(5,306)
30,877
297,272
Net profit attributable to the members of Computershare Limited
266,395
266,395
Weighted average number of ordinary shares used as denominator in
calculating earnings per share
546,330,942
547,259,360
546,330,942
547,259,360
Year ended 30 June 2016
Earnings per share (cents per share)
Reconciliation of earnings
Profit for the year
Non-controlling interest (profit)/loss
28.55 cents
28.51 cents
55.09 cents
55.00 cents
$000
$000
$000
$000
161,798
161,798
161,798
161,798
(4,464)
(4,464)
(4,464)
(4,464)
Add back management adjustment items (see below)
-
-
146,206
146,206
Net profit attributable to the members of Computershare Limited
157,334
157,334
303,540
303,540
Weighted average number of ordinary shares used as denominator in calculating
earnings per share
550,992,891
551,917,891
550,992,891
551,917,891
Reconciliation of weighted average number of shares used as the denominator:
2017
Number
2016
Number
Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share
546,330,942
550,992,891
Adjustments for calculation of diluted earnings per share:
Performance rights
928,418
925,000
Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating
diluted earnings per share
547,259,360
551,917,891
No performance rights have been issued since the end of the reporting period.
Calculation of earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing profit attributable to members of Computershare Limited by the weighted average
number of ordinary shares outstanding during the financial year.
Diluted earnings per share
Diluted earnings per share is determined by adjusting the weighted average number of shares used in the calculation of basic earnings
per share to take into account the weighted average number of additional ordinary shares that would have been outstanding assuming
the conversion of all dilutive potential ordinary shares, such as performance rights.
Management basic earnings per share
Management basic earnings per share exclude certain items. Management adjusted results are used, along with other measures, to
assess operating business performance. The Group believes that exclusion of certain items permits better analysis of the Group’s
performance on a comparative basis and provides a better measure of underlying operating performance. The net profit used in the
management earnings per share calculation is adjusted for management adjustment items net of tax.
63
For the year ended 30 June 2017 management adjustment items were as follows:
Amortisation
Amortisation of intangible assets
Acquisitions and disposals
Gain on disposals
Acquisition related restructuring costs
Acquisition accounting adjustments
Acquisition related expenses
Other
Major restructuring costs
Voucher Services impairment
Put option liability re-measurement
Marked to market adjustments – derivatives
Total management adjustment items
Management Adjustment Items
Gross
$000
Tax effect
$000
Net of tax
$000
(59,928)
20,626
(39,302)
52,764
(1,836)
1,316
(891)
(33,638)
(11,315)
(7,080)
(693)
(3,926)
393
(260)
225
13,161
-
-
205
48,838
(1,443)
1,056
(666)
(20,477)
(11,315)
(7,080)
(488)
(61,301)
30,424
(30,877)
Management adjustment items net of tax for the year ended 30 June 2017 were as follows:
Amortisation
> Customer contracts and other intangible assets that are recognised on business combinations or major asset acquisitions are amortised
over their useful life in the statutory results but excluded from management earnings. The amortisation of these intangibles for the
year ended 30 June 2017 was $39.3 million. Amortisation of intangibles purchased outside of business combinations (e.g. mortgage
servicing rights) is included as a charge against management earnings.
Acquisitions and disposals
> Disposals of the Australian head office premises and the investment in INVeSHARE Inc. resulted in a profit of $39.5 million and
$9.3 million respectively.
> Restructuring costs of $1.4 million were incurred associated with the Gilardi and HML acquisitions.
> A benefit of $1.1 million was recorded on finalisation of acquisition accounting for assets taken over under the mortgage servicing
contract with UK Asset Resolution Limited.
> Expenses related to the Gilardi, RicePoint and Six Securities Services acquisitions amounted to $0.7 million.
Other
> Costs of $20.5 million were incurred in relation to the major operations rationalisation underway in Louisville, USA and stage 2 of the
global structural cost review initiative.
> Due to the previously announced implementation of the new UK Tax Free childcare scheme (refer ASX Market Announcement
of 30 July 2014), which has the effect of progressively reducing the earnings of Computershare’s Voucher Services business, an
impairment charge of $11.3 million was booked against goodwill related to this business. It is expected that the remaining goodwill of
$15.2 million associated with Voucher Services will be written off over the coming years.
> The put option liability re-measurement resulted in an expense of $7.1 million related to the Karvy joint venture arrangement in India.
> Derivatives that have not received hedge designation are marked to market at the reporting date and taken to profit and loss in the
statutory results. The marked to market valuation resulted in a loss of $0.5 million.
64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017
For the year ended 30 June 2016 management adjustment items were as follows:
Amortisation
Amortisation of intangible assets
Acquisitions and disposals
Acquisition related accounting adjustments
Foreign currency translation reserve write-off on disposals
Gain on acquisition
Acquisition and disposal related expenses
Acquisition related restructuring costs
Asset write-down
Gain on disposal
Other
Major restructuring costs
Put option liability re-measurement
Marked to market adjustments – derivatives
Total management adjustment items
5. SEGMENT INFORMATION
Gross
$000
Tax effect
$000
Net of tax
$000
(96,134)
32,091
(64,043)
(45,642)
(25,904)
11,113
(3,480)
(2,002)
(1,687)
325
(14,545)
(7,526)
3,244
(699)
-
(2,222)
1,072
698
-
-
6,080
-
(988)
(46,341)
(25,904)
8,891
(2,408)
(1,304)
(1,687)
325
(8,465)
(7,526)
2,256
(182,238)
36,032
(146,206)
The operating segments presented reflect the manner in which the Group has been internally managed and the financial information
reported to the chief operating decision maker in the current financial year. The chief operating decision maker is the Computershare
Limited Chief Executive Officer (CEO). The Group has determined the operating segments based on the reports reviewed by the CEO
that are used to make strategic decisions and assess performance.
There are seven operating segments. Six of them are geographic: Asia, Australia and New Zealand, Canada, Continental Europe, UCIA
(United Kingdom, Channel Islands, Ireland & Africa) and the United States of America. In addition, Technology and Other segment
comprises the provision of software specialising in share registry and financial services. It is also a research and development function,
for which discrete financial information is reviewed by the CEO.
In each of the six geographic segments the consolidated entity offers a combination of its core products and services: investor services,
business services, employee share plan services, communication services and stakeholder relationship management services. Investor
services comprise the provision of registry maintenance and related services. Business services comprise the provision of bankruptcy
class action and utilities administration services, voucher services, corporate trust services and mortgage servicing activities. Employee
share plan services comprise the provision of administration and related services for employee share and option plans. Communication
services comprise intelligent mailing, inbound process automation, scanning and electronic delivery. Stakeholder relationship management
services comprise the provision of investor analysis, investor communication and management information services to companies,
including their employees, shareholders and other security industry participants.
Corporate function includes entities whose main purpose is to hold intercompany investments and conduct financing activities. It is not
considered an operating segment and includes activities that are not allocated to other operating segments.
OPERATING SEGMENTS
June 2017
Total segment revenue
and other income
External revenue and
other income
Intersegment revenue
Management adjusted
EBITDA
June 2016
Total segment revenue
and other income
External revenue and
other income
Intersegment revenue
Management adjusted
EBITDA
Australia &
New Zealand
$000
Asia
$000
Canada
$000
Continental
Europe
$000
Technology
& Other
$000
UCIA
$000
United
States
$000
Total
$000
142,637
252,086
170,949
93,465
224,532
448,924
998,084
2,330,677
138,274
251,091
168,960
92,741
15,601
445,641
994,362
2,106,670
4,363
48,857
995
1,989
724
208,931
3,283
3,722
38,094
75,958
20,301
20,708
85,579
247,493
224,007
536,990
128,029
266,897
166,080
80,986
223,491
359,390
957,850
2,182,723
124,413
265,932
164,274
80,772
15,679
356,615
953,816
1,961,501
3,616
45,231
965
45,741
1,806
67,440
214
207,812
2,775
4,034
13,732
25,233
100,036
226,392
221,222
523,805
65
Segment revenue
The revenue reported to the CEO is measured in a manner consistent with that of the statement of comprehensive income. Sales
between segments are included in the total segment revenue, whereas sales within a segment have been eliminated from segment
revenue. Sales between segments are at normal commercial rates and are eliminated on consolidation.
Segment revenue reconciles to total revenue from continuing operations as follows:
Total operating segment revenue and other income
Intersegment eliminations
Corporate revenue and other income
Total revenue from continuing operations
Management adjusted EBITDA
2017
$000
2016
$000
2,330,677
2,182,723
(224,007)
(221,222)
(908)
(376)
2,105,762
1,961,125
Management adjusted results are used, along with other measures, to assess operating business performance. The Group believes
that exclusion of certain items permits better analysis of the Group’s performance on a comparative basis and provides a better
measure of underlying operating performance.
A reconciliation of management adjusted EBITDA to operating profit before income tax is provided as follows:
Management adjusted EBITDA – operating segments
Management adjusted EBITDA – corporate
Management adjusted EBITDA
Management adjustment items (before related income tax effect):
Amortisation of intangible assets
Gain on disposals
Acquisition related restructuring costs
Acquisition accounting adjustments
Acquisition and disposal related expenses
Foreign currency translation reserve write-off on disposals
Gain on acquisition
Asset write-down
Major restructuring costs
Voucher Services impairment
Put option liability re-measurement
Marked to market adjustments – derivatives
Total management adjustment items (note 4)
Finance costs
Other amortisation and depreciation
536,990
523,805
3,801
8,804
540,791
532,609
(59,928)
52,764
(1,836)
1,316
(891)
-
-
-
(33,638)
(11,315)
(7,080)
(693)
(61,301)
(54,394)
(59,172)
(96,134)
325
(2,002)
(45,642)
(3,480)
(25,904)
11,113
(1,687)
(14,545)
-
(7,526)
3,244
(182,238)
(54,480)
(50,882)
Profit before income tax from continuing operations
365,924
245,009
External revenue per business line
The table below outlines revenue from external customers for each business line:
Register Maintenance
Corporate Actions
Business Services
Stakeholder Relationship Management
Employee Share Plans
Communication Services
Technology and Other Revenue
Total
66
697,903
125,793
785,935
79,806
220,548
177,482
18,295
727,796
140,510
605,722
70,107
222,186
174,416
20,388
2,105,762
1,961,125
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017
Geographical Information
Australia
United Kingdom
United States
Canada
Other non-significant countries
Total
Geographical allocation
of external revenue
Geographical allocation
of non-current assets
2017
$000
242,374
399,787
991,765
180,747
291,089
2016
$000
257,308
307,165
2017
$000
168,928
187,633
2016
$000
186,542
217,760
961,049
1,778,250
1,701,048
165,243
270,360
175,844
169,397
175,552
169,122
2,105,762
1,961,125
2,480,052
2,450,024
Revenues are allocated based on the countries in which the entities are located. The parent entity is domiciled in Australia. Revenue
from external customers in countries other than Australia amounts to $1,863.4 million (2016: $1,703.8 million).
Non-current assets exclude financial instruments and deferred tax assets and are allocated to countries based on where the assets are
located. Non-current assets held in countries other than Australia amount to $2,311.1 million (2016: $2,263.5 million).
6. INCOME TAX EXPENSE AND BALANCES
Income tax expense
The income tax expense represents tax on the pre-tax accounting profit adjusted for income and expenses never to be assessed
or allowed for taxation purposes. This is also adjusted for changes in deferred tax assets and liabilities attributable to temporary
differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements and unused tax losses.
The income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period.
Income tax expense is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive
income or directly in equity. In this case, tax is also recognised in other comprehensive income or directly in equity, respectively.
(a) Income tax expense
Current tax expense
Current tax expense
Effect of changes in tax rates
Under/(over) provided in prior years
Total current tax expense
Deferred tax expense/(benefit)
Decrease/(increase) in deferred tax assets
(Decrease)/increase in deferred tax liabilities
Total deferred tax expense/(credit)
Total income tax expense
2017
$000
2016
$000
79,009
64,323
4,950
1,444
3,557
1,585
85,403
69,465
(19,062)
27,882
8,820
94,223
(51,961)
65,707
13,746
83,211
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Profit before income tax expense
365,924
245,009
The tax expense for the financial year differs from the amount calculated on profit.
The differences are reconciled as follows:
Prima facie income tax expense thereon at 30%
Tax effect of permanent differences:
Disposal of Australian head office premises and redemption of investment in INVeSHARE
Effect of changes in tax rates
Voucher services goodwill impairment
Prior year tax (over)/under provided
Contingent consideration re-measurement
Net other deductible
Income tax expense
109,777
73,503
(13,854)
4,950
2,235
1,444
-
(10,329)
94,223
-
3,557
-
1,585
9,463
(4,897)
83,211
67
(c) Amounts recognised directly in equity
Deferred tax – share based remuneration
(d) Tax benefit/(expense) relating to items of other comprehensive income
Cash flow hedges
Net investment hedges
(e) Unrecognised tax losses
2017
$000
794
2016
$000
(30)
-
(4,078)
(4,078)
106
(6,947)
(6,841)
As at 30 June 2017, companies within the consolidated entity had estimated unrecognised tax losses of $3.7 million (2016: $1.1 million)
available to offset against future years’ taxable income.
Deferred tax balances
Deferred tax assets and liabilities are recognised for temporary differences calculated at the tax rates expected to apply when the
differences reverse. Deferred tax assets are recognised for deductible temporary differences and unused tax losses to the extent it is
probable that future taxable amounts will be available to utilise them. Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.
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.
Deferred tax assets
The balance comprises temporary differences attributable to:
Tax losses
Mortgage servicing related liabilities
Intangible assets
Financial instruments and foreign exchange
Provisions
Other creditors and accruals
Property, plant and equipment
Employee benefits
Finance leases
Deferred revenue
Share based remuneration
Doubtful debts
Other
Total deferred tax assets
Set-off of deferred tax liabilities pursuant to set-off provisions
Net deferred tax assets
Movements during the year
Opening balance at 1 July
Currency translation difference
Credited/(charged) to profit or loss
Credited/(charged) to equity
Credited/(charged) to other comprehensive income
Set-off of deferred tax liabilities
Arising from acquisitions/(disposals)
Other
Closing balance at 30 June
2017
$000
35,138
72,392
45,276
36,259
22,791
18,605
13,309
6,701
6,377
5,265
4,672
2,015
7,464
2016
$000
35,166
61,456
42,917
55,252
20,383
6,959
9,882
6,576
3,255
3,903
3,826
2,452
6,962
276,264
(97,589)
178,675
258,989
(80,345)
178,644
178,644
189,348
1,424
19,062
794
(4,078)
(17,244)
597
(524)
(3,354)
51,961
(30)
(6,947)
(52,839)
505
-
178,675
178,644
The total deferred tax assets expected to be recovered after more than 12 months amount to $164.7 million (2016: $155.3 million).
68
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017
Deferred tax liabilities
The balance comprises temporary differences attributable to:
Goodwill
Intangible assets
Financial instruments and foreign exchange
Other
Total deferred tax liabilities
Set-off of deferred tax assets pursuant to set-off provisions
Net deferred tax liabilities
Movements during the year:
Opening balance at 1 July
Currency translation difference
Charged/(credited) to profit or loss
Charged/(credited) to other comprehensive income
Set-off of deferred tax assets
Arising from acquisitions/(disposals)
Closing balance at 30 June
2017
$000
2016
$000
253,032
224,449
93,085
5,964
3,759
355,840
(97,589)
258,251
232,100
169
27,882
-
(17,244)
15,344
258,251
69,828
14,594
3,574
312,445
(80,345)
232,100
214,512
(1,801)
65,707
(106)
(52,839)
6,627
232,100
The total deferred tax liabilities expected to be settled after more than 12 months amounts to $354.9 million (2016: $304.8 million).
Key estimates and judgements
The Group is subject to income taxes in Australia and jurisdictions where it has foreign operations. Significant judgement is required
in determining the provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of
business for which the ultimate tax determination is uncertain. Where the final outcome is different from the amounts that were initially
recognised, such differences will impact the current and deferred tax provisions in the period in which such determination is made.
The Group has recognised deferred tax assets relating to carried forward tax losses to the extent that it is probable that future
taxable profits will be available against which these assets can be utilised. The assumptions regarding future utilisation, and
therefore the recognition of deferred tax assets, may change due to future operating performance and other factors.
Contingent liability – Australian thin capitalisation
The Group has been working with the Australian Taxation Office (ATO) and Her Majesty’s Revenue and Customs to renew an
existing bilateral advance pricing arrangement in relation to remuneration to be paid to the Australian Group from its ownership and
licensing of certain intangible assets. As part of that process, the ATO undertook collateral review activities and during the reporting
period issued a draft position paper challenging the inclusion of certain of these intangible assets in the thin capitalisation calculation
used by the Australian Group to determine the amount of tax deductible interest on Australian borrowings between 1 July 2010 and
30 June 2014. Computershare disagrees with the ATO’s views and, if the ATO maintains its views, intends to vigorously defend its
position. This process may take some years to resolve. As the Group does not expect to pay additional tax related to this matter, no
provision was recognised in the June 2017 balance sheet. If Computershare is unsuccessful in defending its position, the maximum
potential primary tax liability in respect of the period from 1 July 2010 to 30 June 2017 excluding interest is estimated at $44.8 million.
7. NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
(a) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand, and short-term deposits with original maturities of three months
or less that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value, net of
outstanding bank overdrafts. Cash and cash equivalents exclude broker client deposits reflected in the statement of financial position
that are recorded as other current financial assets.
Cash and cash equivalents in the consolidated cash flow statement are reconciled to the consolidated statement of financial position
as follows:
Shown as cash and cash equivalents in the consolidated statement of financial position
Shown as cash and cash equivalents in the assets held for sale line item of the consolidated statement of financial
position (refer to note 9)
Cash and cash equivalents in the consolidated cash flow statement
2017
$000
2016
$000
489,917
526,575
20,766
-
510,683
526,575
69
(b) Reconciliation of net profit after income tax to net cash from operating activities
Net profit after income tax
Adjustments for:
Depreciation and amortisation
Contingent consideration re-measurement
Net (gain)/loss on asset disposals and asset write-downs
Gain on acquisition
Share of net (profit)/loss of associates and joint ventures accounted for using equity method
Employee benefits – share based expense
Impairment charge – Voucher Services
Fair value adjustments
Changes in assets and liabilities:
(Increase)/decrease in receivables
(Increase)/decrease in inventories
(Increase)/decrease in loan servicing advances
(Increase)/decrease in other current assets
Increase/(decrease) in payables and provisions
Increase/(decrease) in tax balances
2017
$000
2016
$000
271,701
161,798
119,100
147,016
-
(52,237)
(1,316)
(655)
15,028
11,315
7,773
(47,634)
797
37,387
1,340
60,168
34,915
45,642
27,266
(11,113)
1,349
10,366
-
3,889
(63,719)
(1,710)
(68,137)
5,116
21,160
26,169
Net cash and cash equivalents from operating activities
457,682
305,092
(c) Acquisitions and disposals of businesses
For details of businesses acquired during the year and related cash flows refer to note 8.
8. BUSINESS COMBINATIONS
The Group continues to seek acquisition and other growth opportunities where value can be added and returns enhanced for the
shareholders. The following controlled entities and businesses were acquired by the consolidated entity at the date stated and their
operating results have been included in the Group’s results from the acquisition date. Where goodwill is marked as provisional,
identification and valuation of net assets acquired will be completed within a 12-month measurement period in accordance with the
Group’s accounting policy.
(a) On 1 January 2017, Computershare acquired Six Securities Services AG, a registry business in Switzerland. Total consideration
was $6.2 million. This business combination did not materially contribute to the total revenue of the Group.
Details of the acquisition were as follows:
Cash consideration
Contingent consideration
Total purchase consideration
Less fair value of identifiable assets acquired
Provisional goodwill on consolidation
$000
4,211
1,955
6,166
(1,001)
5,165
(b) On 31 August 2016, Computershare acquired RicePoint Administration Inc., an independent class action administrator based in
London, Canada. Total consideration was $3.6 million. This business combination did not materially contribute to the total revenue
of the Group.
Details of the acquisition were as follows:
Cash consideration
Contingent consideration
Total purchase consideration
Less fair value of identifiable assets acquired
Goodwill on consolidation
70
$000
1,531
2,063
3,594
(1,794)
1,800
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or
other assets are acquired. The consideration transferred for the acquisition of a controlled entity comprises the fair value of the assets
transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value
of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the controlled entity.
Acquisition-related costs are expensed as incurred. Identifiable assets acquired as well as liabilities and contingent liabilities assumed
in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. Within 12 months
of completing the acquisition, identifiable intangible assets are valued and separately recognised in the statement of financial position.
On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the
non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair
value of any previous equity interest in the acquiree over the fair value of the Group’s share of the net identifiable assets acquired is
recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the controlled entity acquired and the
measurement of all amounts has been reviewed, the difference is recognised directly in profit or loss as a gain on bargain purchase.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently
re-measured to fair value with changes in fair value recognised in profit or loss.
In accordance with the accounting policy, the acquisition accounting for Capital Markets Cooperative, LLC (CMC), UK Asset Resolution
Limited (UKAR), SyncBASE Inc. (SyncBASE), PR im Turm HV-Service AG (PR im Turm) and Altavera, LLC (Altavera) has been finalised.
Intangible assets of $28.3 million for CMC, $8.3 million for SyncBASE, $3.3 million for PR im Turm and $1.5 million for Altavera have
been reclassified out of goodwill.
Key estimates and judgements
Acquisition accounting requires that management make estimates with regard to valuation of certain non-monetary assets and
liabilities of the acquired entities. These estimates have particular impact in terms of valuation of intangible assets, contingent
consideration liabilities and provisions. To the extent that these items are subject to determination during the initial 12 months after
acquisition, the variation to estimated value will be adjusted through goodwill. To the extent that determination occurs after
12 months, any variation will impact profit or loss in the relevant period.
9. ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE
Assets classified as held for sale
Cash and cash equivalents
Receivables
Property, plant and equipment
Intangibles
Deferred tax assets
Other current assets
Total assets held for sale
Liabilities directly associated with assets classified as held for sale
Put option liability
Payables
Current tax liabilities
Provisions
Total liabilities held for sale
2017
$000
2016
$000
20,766
19,104
8,684
7,847
524
157
-
-
26,128
-
-
-
57,082
26,128
45,684
9,915
1,107
707
57,413
-
-
-
-
-
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather
than through continuing use and a sale is considered highly probable. Assets and liabilities classified as held for sale are measured
at the lower of carrying amount and fair value less costs to sell at the time of the reclassification, and are presented separately within
current assets and current liabilities in the consolidated statement of financial position.
An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value less costs to sell. A gain is
recognised for any subsequent increases in fair value less costs to sell of an asset, but not in excess of any cumulative impairment loss
previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset is recognised at the
date of derecognition.
71
On 3 August 2017, Computershare agreed to sell its 50% interest in its Indian venture Karvy Computershare Private Limited (Karvy).
Completion is expected to occur before the end of calendar 2017– refer to Computershare’s ASX Market Announcement dated
4 August 2017 for more details. The sale is estimated to result in a post-tax accounting gain of $120 million subject to future changes
in net assets and foreign exchange rates, and will be recorded in next year’s results. Karvy is classified as a disposal group held for sale
as at 30 June 2017.
On 9 September 2016, Computershare completed the sale of the land and building housing its Australian head office. A post-tax gain
of $39.5 million was recognised in other income in the consolidated statement of comprehensive income during the reporting period.
The land and building were classified as assets held for sale at 30 June 2016.
10. INTANGIBLE ASSETS
At 1 July 2016
Opening cost
Opening accumulated amortisation and impairment
Opening net book amount
Additions (net of adjustments and reclassifications)1
Disposals
Amortisation charge2
Impairment charge
Currency translation difference
Other3
Closing net book amount
At 30 June 2017
Cost
Accumulated amortisation and impairment
Closing net book amount
At 1 July 2015
Opening cost
Opening accumulated amortisation and impairment
Opening net book amount
Additions1
Amortisation charge2
Currency translation difference
Closing net book amount
At 30 June 2016
Cost
Accumulated amortisation and impairment
Closing net book amount
Customer
contracts and
relationships
$000
Mortgage
Servicing
Rights
$000
Goodwill
$000
1,575,898
672,064
-
(281,392)
1,575,898
390,672
(9,264)
32,280
-
-
(11,315)
5,504
(7,847)
-
(51,685)
-
(2,459)
-
334,792
(43,192)
291,600
163,179
(8,643)
(46,026)5
-
-
-
Other4
$000
Total
$000
41,492
2,624,246
(26,034)
(350,618)
15,458
13,172
-
2,273,628
199,367
(8,643)
(8,320)
(106,031)
-
(348)
-
(11,315)
2,697
(7,847)
1,552,976
368,808
400,110
19,962
2,341,856
1,552,976
567,875
-
(199,067)
1,552,976
368,808
1,560,658
625,109
-
(205,900)
1,560,658
419,209
43,208
-
(27,968)
65,464
(81,525)
(12,476)
485,816
(85,706)
400,110
143,051
(18,720)
124,331
191,741
(24,472)
-
50,146
2,656,813
(30,184)
(314,957)
19,962
2,341,856
86,395
2,415,213
(58,295)
(282,915)
28,100
2,132,298
3,481
(14,686)
(1,437)
303,894
(120,683)
(41,881)
1,575,898
390,672
291,600
15,458
2,273,628
1,575,898
672,064
-
(281,392)
1,575,898
390,672
334,792
(43,192)
291,600
41,492
2,624,246
(26,034)
(350,618)
15,458
2,273,628
1 Additions comprise recognition of intangible assets resulting from business combinations and direct purchases as well as adjustments and reclassifications made on
finalisation of acquisition accounting.
2 Amortisation charge is included within direct services expense in the statement of comprehensive income.
3 Includes $7.8 million goodwill reclassified as held for sale as at 30 June 2017.
4 Other intangible assets include intellectual property, software and brands.
5 The gross amount of mortgage servicing rights amortisation is partially offset in the statement of comprehensive income by the amortisation of the related mortgage
servicing liabilities.
72
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets
acquired. Goodwill is carried at cost less accumulated impairment losses and is tested for impairment annually or more frequently, if
events or changes in circumstances indicate that it might be impaired. On disposal or termination of a previously acquired business,
any remaining balance of associated goodwill is included in the determination of profit or loss on disposal.
The acquired goodwill can be attributed to the expected future cash flows of the acquired businesses associated with the collective
experience of management and staff and the synergies expected to be achieved as a result of full integration into the Computershare
Group. Where acquisitions have been made during the period, the Group has 12 months from the acquisition date in which to finalise
the accounting, including calculation of goodwill. Until the expiry of the 12-month period provisional amounts have been included in the
consolidated results.
Acquired intangible assets
Acquired intangible assets have a finite useful life and are carried at fair value at the date of acquisition less accumulated amortisation
and impairment losses. Amortisation is calculated using the straight line method to allocate value over their estimated useful lives,
typically ranging from one to twenty years.
Mortgage servicing rights
Mortgage servicing rights acquired as part of business combination are carried at their fair value at the date of acquisition less
accumulated amortisation and impairment losses. Mortgage servicing rights acquired as part of ongoing operations are carried at cost
less accumulated amortisation and impairment losses. Amortisation for all servicing rights is calculated using the straight line method
over their estimated useful lives.
Software and research and development costs
All research-related costs are expensed as incurred. Software development costs are capitalised where they meet the recognition
criteria for capitalisation, and are subsequently amortised using the straight line method to allocate their value over their estimated
useful lives, typically ranging from eight to fifteen years.
11. IMPAIRMENT
Impairment test for goodwill
For the purpose of impairment testing, assets are grouped at the lowest levels for which there are largely independent cash inflows
(cash generating units). Goodwill is allocated to cash generating units (CGUs), or groups of CGUs, expected to benefit from synergies
of the business combination. As the Group continues to acquire operations and reorganise the way that operations are managed,
reporting structures may change giving rise to a reassessment of cash generating units and/or the allocation of goodwill to those cash
generating units.
The carrying amount of goodwill has been allocated to the following groups of CGU’s constituting most of the Group’s operating segments:
Asia
Australia and New Zealand
Canada
Continental Europe
United Kingdom, Channel Islands, Ireland and Africa (UCIA)
United States
2017
$000
78,217
164,452
117,607
31,324
88,453
2016
$000
84,574
160,083
122,474
26,876
99,319
1,072,923
1,082,572
1,552,976
1,575,898
When testing for impairment, the carrying amount of each group of CGUs is compared with its recoverable amount. The recoverable
amount is determined based on a value-in-use calculation for each group of CGUs to which goodwill has been allocated. The
value-in-use calculation uses the discounted cash flow methodology for each CGU typically based upon five years of cash flow
projections plus a terminal value.
73
Key estimates and judgements
Key assumptions used in the value-in-use calculations are described below for each group of CGUs with allocated goodwill.
As there are a number of CGUs in most of the operating segments, presented below are weighted averages of the assumptions
applied to individual CGUs.
Five-year post-tax cash flow projections are based upon approved budgets covering a one-year period, with subsequent periods
based upon the Group’s expectations of growth excluding the impact of possible future acquisitions, business improvement and
restructuring. The earnings growth rates applied beyond the initial five-year period are as follows in 2017: Asia 3.9% (2016: 3.8%),
Australia and New Zealand 3.0% (2016: 3.0%), Canada 2.0% (2016: 2.5%), Continental Europe 1.7% (2016: 1.8%), UCIA 3.0%
(2016: 3.0%) and the United States 3.0% (2016: 3.0%).
In performing the value-in-use calculations for each CGU, the Group has applied post-tax discount rates to discount the forecast
future attributable post-tax cash flows. The discount rates used reflect the risks specific to each CGU. The equivalent pre-tax
discount rates are as follows: Asia 11.9% (2016: 11.5%), Australia and New Zealand 12.4% (2016: 12.2%), Canada 10.1%
(2016: 9.8%), Continental Europe 9.7% (2016: 9.9%), UCIA 9.7% (2016: 9.4%) and United States 10.4% (2016: 10.0%).
Impact of reasonably possible changes in key assumptions
As impairment testing is based on assumptions and judgements, the Group has considered sensitivity of the impairment test results
to changes in key assumptions. For all operating segments, the recoverable amount exceeds the carrying amount when testing for
reasonably possible changes in key assumptions.
Impairment
Impairment losses are recognised in profit or loss in the reporting period when the carrying amount exceeds recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.
Voucher Services
Due to the previously announced implementation of the new UK Tax Free childcare scheme (refer ASX Market Announcement of
30 July 2014), which has the effect of progressively reducing the earnings of Computershare’s Voucher Services business, this CGU
is expected to cease cash flow generation in the future. During the year, an impairment charge of $11.3 million was booked against
goodwill, calculated as the difference between the value in use and the carrying amount of the business. This charge is included under
direct services in the expense section of the statement of comprehensive income. It is expected that the remaining goodwill associated
with this business of $15.2 million will be written off over the coming years. Voucher Services is part of the UCIA segment.
12. FINANCIAL RISK MANAGEMENT
Financial risk management objectives
The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk and interest rate risk), liquidity
risk and credit risk. The Group’s overall financial risk management is carried out by a central treasury department (Group Treasury) under
policies approved by the Board. The Board provides written principles for overall risk management, as well as policies covering specific
areas such as currency risk management, interest rate risk management, counterparty risk management and the use of derivative financial
instruments. Derivative financial instruments are used to manage specifically identified interest rate and foreign currency risks.
The Group Treasury function provides services to the business. It also monitors and manages the financial risks relating to the operations
of the Group. Group Treasury identifies, evaluates and hedges financial risks in close cooperation with the regional treasury centres and
reports regularly to the Board.
Capital risk management objectives
The primary objective of the Group’s capital management is to ensure that it minimises the working capital funding requirements
through effective controls in order to support its businesses and maximise shareholder value.
A key financial ratio for the Group is net financial indebtedness to management adjusted earnings before interest, tax, depreciation and
amortisation (Management EBITDA). Net debt is calculated as interest bearing liabilities less cash and cash equivalents.
Interest bearing liabilities
Cash and cash equivalents*
Net debt
Management EBITDA (note 5)
Net debt to Management EBITDA
Net debt to Management EBITDA (excluding non-recourse debt)1
1 Excludes non-recourse SLS advance debt of $194.6 million (2016: $208.2 million).
* 2017 includes $20.8 million (2016: nil) cash presented in assets classified as held for sale.
74
2017
$000
2016
$000
1,573,065
1,863,305
(510,683)
(526,575)
1,062,382
1,336,730
540,791
532,609
1.96
1.60
2.51
2.12
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017 The Group manages its capital structure and makes adjustments to it in line with changes in economic conditions. To achieve its
target capital structure, the Group may adjust the dividend payment to shareholders, conduct share buy-backs or issue new shares.
For details of the recent on-market share buy-back refer to note 28. No changes were made to the capital structure objectives or
processes during the current financial year.
Financial risk factors
The key financial risk factors that arise from the Group’s activities are outlined below.
(a) Interest rate risk
Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or fair values of financial instruments.
The consolidated entity is exposed to interest rate risk through its primary financial assets and liabilities and as a result of maintaining agent
and escrow agent bank accounts on behalf of clients. Given the nature of the client balances, neither the funds nor an offsetting liability are
included in the Group’s financial statements. Average client balances during the year approximated $16.7 billion (2016: $15.7 billion) and in
relation to these balances, the consolidated entity has in place interest rate derivatives totalling $1.8 billion notionally (2016: $1.7 billion).
The table below provides an indication of sensitivity of the Group’s profit before tax to movements in interest rates with all other
variables held constant.
Movement in basis points
AUD
USD
CAD
GBP
EUR
Other
Total
2017
Sensitivity of profit before tax
$000
2016
Sensitivity of profit before tax
$000
+50
80
-50
(79)
(3,432)
3,416
469
374
(276)
155
(469)
(374)
276
(96)
+50
106
(6,303)
413
(3,976)
97
179
(2,630)
2,674
(9,484)
-50
(106)
4,662
(413)
4,000
(97)
(130)
7,916
The sensitivity of profit before tax to interest rate movements is the effect of assumed reasonably possible changes in interest rates for
one year, based on the on-balance sheet floating rate financial assets and liabilities as at 30 June 2017. The total sensitivity analysis is
based on the assumption that there are parallel shifts in the yield curve.
The above sensitivity calculation includes the impact of changes in interest rates on the fair value of recognised derivatives but excludes
the impact on interest income derived from client balances. Client balances have been excluded from the sensitivity analysis as they are
not reflected in the Group’s consolidated statement of financial position. Interest income is earned on these balances at various fixed
and floating interest rates. In a rising interest rate environment, client balances that earn interest income will result in an increase to
profit, while in a falling interest rate environment, client balances that earn interest income will result in a decrease to profit.
Total margin income generated on client balances for the year was $136.2 million (2016: $153.3 million), reflecting a yield of 0.82%
(2016: 0.98%) on average client balances. If the Group was able to achieve an additional yield of 0.5% on the total average balances of
$16.7 billion held during the reporting period, the Group’s profit before tax would have increased by $83.3 million.
(b) Foreign exchange risk
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that
is not the relevant entity’s functional currency.
Entities within the Group typically enter into external transactions and recognise external assets and liabilities that are denominated in
their functional currency. Whilst a number of entities within the Group hold bank account balances in a currency which is not their local
functional currency, these balances do not expose the Group to significant foreign exchange risk.
Foreign exchange risk also arises from net investments in foreign operations held in Europe, Canada, South Africa and Asia Pacific.
Accordingly, the Group’s financial position can be affected significantly by movements in the relevant currency exchange rate when
translating into the consolidated entity’s presentation currency, the United States dollar. The consolidated entity also has debt that
is designated as a hedge of net investment in foreign operations. On consolidation, any foreign exchange gains or losses on these
balances are transferred to the foreign currency translation reserve.
(c) Credit risk
Credit exposure represents the extent of credit related losses that the consolidated entity may be subject to on amounts to be received
from financial assets, which include receivables, cash and cash equivalents and other financial instruments. The consolidated entity,
while exposed to credit related losses in the event of non-payment by clients, does not expect any significant clients to fail to meet
their obligations. The Group’s trading terms do not generally include the requirement for customers to provide collateral as security for
financial assets and consequently, the consolidated entity does not hold any collateral as security.
75
The consolidated entity’s exposure to credit risk is as indicated by the carrying amounts of its financial assets. Concentrations of credit
risk exist when clients have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly
affected by changes in economic or other conditions.
The consolidated entity’s concentration of credit risk is minimised due to transactions with a large number of clients in various countries
and industries. The registry and plans sector transacts with various listed companies across a number of countries. The consolidated
entity does not have a significant exposure to any individual client apart from its contract with UK Asset Resolution Limited, a UK
government entity.
Transactions involving derivative financial instruments are with counterparties with whom the Group has signed International Swaps and
Derivatives Association agreements and who maintain sound credit arrangements. To supplement credit ratings of counterparties the
Group has a Board approved policy on managing client balance exposure.
(d) Liquidity Risk
Liquidity risk management implies maintaining sufficient cash and the availability of funding. The Group has staggered its various debt
maturities to reduce re-financing risk. Whilst impacted by acquisitions from time to time, the Group maintains sufficient cash balances
and committed credit facilities to meet ongoing commitments.
Maturity information for the Group’s debt facility is as follows:
Maturity profile (in the 12 months ending)
June 2018
June 2019
June 2020
June 2021
June 2022
June 2023
June 2024
Total
Debt facility utilised
$million
112.1
427.6
121.9
450.0
220.0
-
220.0
1551.6
The Group had access to unutilised committed debt of $328.1 million maturing in July 2019.
Maturities of financial liabilities
The table below breaks down the Group’s financial liabilities into relevant maturity groupings.
The amounts disclosed in the table are the contractual undiscounted cash flows. For interest rate swaps the cash flows have been
estimated using the forward interest rates applicable at the end of the reporting period.
Less than
1 year
$000
Between
1-5 years
$000
More than
5 years
$000
Total
contractual
cash flows
$000
17,150
416,823
-
4,300
-
-
17,150
421,123
172,103
1,342,788
239,448
1,754,339
5,462
4,740
-
10,202
611,538
1,351,828
239,448
2,202,814
1,335
(179,985)
178,811
161
-
-
-
-
-
-
-
-
1,335
(179,985)
178,811
161
Contractual maturities of financial liabilities
As at 30 June 2017
Non-derivatives
Trade payables
Other payables
Borrowings (excluding finance leases)
Finance lease liabilities (undiscounted)
Total non-derivatives
Derivatives
Net settled (interest rate swaps)
Gross settled (cross currency and FX swaps)
– (Inflow)
– Outflow
Total derivatives
76
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017
Contractual maturities of financial liabilities
As at 30 June 2016
Non-derivatives
Trade payables
Other payables
Borrowings (excluding finance leases)
Finance lease liabilities (undiscounted)
Put option liability
Total non-derivatives
Derivatives
Net settled (interest rate swaps)
Gross settled (cross currency and FX swaps)
– (Inflow)
– Outflow
Total derivatives
(e) Fair value measurements
Less than
1 year
$000
Between
1-5 years
$000
More than
5 years
$000
Total
contractual
cash flows
$000
23,366
359,555
-
9,740
-
-
23,366
369,295
285,816
1,238,105
478,566
2,002,487
33,258
37,275
7,957
-
-
-
41,215
37,275
739,270
1,255,802
478,566
2,473,638
1,978
(554,310)
549,274
(3,058)
944
-
-
944
-
-
-
-
2,922
(554,310)
549,274
(2,114)
The fair value of financial assets and liabilities must be estimated for recognition and measurement or for disclosure purposes.
The measurement hierarchy used is as follows:
Level 1: The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the reporting
period for identical assets and liabilities. The quoted market price used for financial assets held by the Group is the current bid price.
These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which
maximise the use of observable market data and rely as little as possible on entity-specific estimates. The Group uses a variety of
methods and makes assumptions that are based on market conditions existing at the end of each reporting period. This includes
inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly
(derived from prices). If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Such instruments include derivative financial instruments and the portion of borrowings included in the fair value hedge.
Specific valuation techniques used to value financial instruments are as follows:
> Quoted market prices or dealer quotes are used for similar instruments.
> The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable
yield curves.
> The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date.
> The fair value of cross currency swaps is a combination of the fair value of forward foreign exchange contracts determined using
forward exchange rates at the balance sheet date (for the final principal exchange) and the use of quoted market prices or dealer
quotes for similar instruments (for the basis valuation).
> The fair value of interest rate swaptions is calculated using the Black-Scholes formula and quoted market prices.
Level 3: Valuation methodology of the asset or liability uses inputs that are not based on observable market data (unobservable inputs).
This is the case of investments in unconsolidated structured entities (refer to note 20), which are included in the available-for-sale
financial assets and deferred consideration (note 24) arising from business combinations.
The amount of contingent consideration recognised on business combinations is typically referenced to revenue or EBITDA targets.
The Group estimates the fair value of the expected future payments based on the terms of each earn-out agreement and
management’s knowledge of the business taking into account the likely impact of the current economic environment. Contingent
consideration amounts are re-measured every reporting period based on most recent projections. Gains or losses arising from changes
in fair value are recognised in profit or loss in the period in which they arise.
The fair value of the investment in structured entities is determined by reference to the equity interest in net assets of these entities,
which approximate their fair values. As profits are realised and dividends are paid to equity investors, the net assets of these entities
decrease and so does the fair value of the Group’s investment.
77
The following tables present the Group’s financial assets and liabilities measured and recognised at fair value at 30 June 2017.
The comparative figures are also presented below.
As at 30 June 2017
Assets
Derivative financial instruments
Available-for-sale financial assets
Total assets
Liabilities
Borrowings
Derivative financial instruments
Deferred consideration
Total liabilities
As at 30 June 2016
Assets
Derivative financial instruments
Available-for-sale financial assets
Total assets
Liabilities
Borrowings
Derivative financial instruments
Deferred consideration
Total liabilities
Level 1
$000
Level 2
$000
Level 3
$000
Total
$000
-
19,910
2,743
2,743
-
19,910
-
-
-
-
474,298
7,027
-
481,325
-
1,761
1,761
-
-
-
-
49,987
-
49,987
452,451
6,738
-
459,189
-
33,231
33,231
-
-
70,867
70,867
-
16,317
16,317
-
-
78,371
78,371
19,910
35,974
55,884
474,298
7,027
70,867
552,192
49,987
18,078
68,065
452,451
6,738
78,371
537,560
The following table presents the changes in level 3 items for the periods ended 30 June 2017 and 30 June 2016:
Opening balance at 1 July
Additions
Payments
Gains/(losses) recognised in profit or loss
Return of capital
Currency translation difference
Closing balance at 30 June
Fair value of financial assets and liabilities
Available-for-sale
financial assets
Deferred
consideration liability
2017
$000
16,317
18,561
-
(499)
(1,148)
-
2016
$000
6,034
10,683
-
-
(400)
-
33,231
16,317
2017
$000
(78,371)
(11,012)
17,111
-
-
1,405
(70,867)
2016
$000
(11,454)
(30,337)
3,728
(44,752)
-
4,444
(78,371)
The carrying amounts of cash and cash equivalents, receivables, loan servicing advances, payables, non-interest bearing liabilities,
finance leases and loans approximate their fair values for the Group except for the unhedged portion of USD Senior Notes of
$325.0 million (2016: $395.0 million), where the fair value based on level 2 valuation techniques described above was $330.6 million
as at 30 June 2017 (2016: $419.8 million).
78
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017
13. DERIVATIVE FINANCIAL INSTRUMENTS
The Group uses derivative financial instruments to manage specifically identified interest rate and foreign currency risks. Derivatives are
initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured to their fair value at
each balance date. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging
instrument, and if so, the nature of the item being hedged. The Group designates certain financial instruments, including derivatives, as
either hedges of net investments in a foreign operation, hedges of firm commitments or highly probable forecast transactions (cash flow
hedges) or fair value hedges.
Derivative assets
Current
Non-current
Derivative assets – current and non-current
Fair values of interest rate derivatives designated as cash flow hedges (a)
Fair values of interest rate derivatives designated as fair value hedges (b)
Fair value of derivatives for which hedge accounting has not been applied
Total derivative assets
Derivative liabilities
Current
Non-current
Derivative liabilities – current and non-current
Fair values of interest rate derivatives designated as cash flow hedges (a)
Fair values of cross currency derivatives designated as hedge of net investment (c)
Fair value of derivatives for which hedge accounting has not been applied
Total derivative liabilities
2017
$000
2016
$000
470
19,440
19,910
-
19,702
208
19,910
3,653
3,374
7,027
309
2,723
3,995
7,027
1,952
48,035
49,987
65
47,075
2,847
49,987
1,238
5,500
6,738
2
976
5,760
6,738
(a) The gain or loss from remeasuring the designated cash flow hedging instruments at fair value is deferred in equity in the cash
flow hedge reserve (note 29) to the extent that the hedge is effective and reclassified into profit or loss when the hedged income
is recognised. The ineffective portion is recognised in profit or loss immediately. In the year ended 30 June 2017, a loss of
$0.3 million was transferred to the profit or loss (30 June 2016: $0.1 million loss). There were no transfers to the statement of
comprehensive income in the year ended 30 June 2017 (30 June 2016: $0.5 million loss).
(b) The gain or loss from remeasuring the designated fair value hedging instruments at fair value is recognised immediately in profit or
loss. Refer to note 14 for further disclosure on the interest rate derivatives designated as fair value hedges.
(c) The gain or loss from remeasuring the designated net investment hedging instruments at fair value is recognised in equity in the
foreign currency translation reserve (note 29) to the extent that the hedge is effective. The ineffective portion is recognised in the
profit or loss immediately. In the year ended 30 June 2017, a loss of $0.4 million was recognised in profit or loss (30 June 2016:
$0.9 million gain).
Hedging
At the inception of the transaction, the Group documents the relationship between hedging instruments and hedged items as well as
its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its assessment,
both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will
continue to be highly effective in offsetting changes in fair values or cash flows of hedged items.
Hedge of net investment
Changes in the fair value of foreign currency debt balances that are designated and qualify as hedging instruments are recorded in
other comprehensive income in the foreign currency translation reserve. The change in value of the net investment is recorded in the
foreign currency translation reserve in accordance with requirements of AASB 121 The effects of Changes in Foreign Exchange Rates.
The gain or loss relating to the ineffective portion is recognised immediately in profit or loss.
79
Cash flow hedge
The Group uses interest rate derivatives to manage interest rate exposure. These derivatives are entered into as part of a hedging
relationship.
The effective portion of changes in the fair value of derivatives which are designated and qualify as cash flow hedges is recognised
in other comprehensive income in the cash flow hedge reserve. The gain or loss relating to the ineffective portion is recognised
immediately in profit or loss.
Amounts accumulated in equity are recycled to profit or loss in the periods when the hedged item will affect profit or loss (for instance
when the future cash flows that are hedged occur).
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any
cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately
recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported
in equity is immediately reclassified to profit or loss.
Fair value hedge
The Group uses interest rate derivatives to manage the fixed interest exposure that arises as a result of the issued US Senior Notes.
Changes in the fair value of these derivatives are recorded in profit or loss, together with any changes in the fair value of the hedged
liabilities that are attributable to the hedged risk.
Derivatives that do not qualify for hedge accounting
Certain forward exchange contracts and foreign currency options do not qualify for hedge accounting. Changes in the fair value of any
derivative instrument that does not qualify for hedge accounting are recognised immediately in profit or loss.
14. INTEREST BEARING LIABILITIES
Borrowings are initially recognised at fair value and are subsequently measured at amortised cost. Any difference between the
proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the borrowing period using the
effective interest method. Borrowings are classified as current liabilities unless the Group has a legal right to defer settlement of the
liability for at least 12 months after the balance sheet date.
Current
Bank loans (SLS non-recourse advance facility) (a)
USD Senior Notes (b)
Lease liabilities – secured (c)
Non-current
Bank loans (SLS non-recourse advance facility) (a)
Revolving syndicated bank facilities (d)
USD Senior Notes (b)
Lease liabilities – secured (c)
2017
$000
2016
$000
71,964
39,901
5,363
208,210
21,606
30,272
117,228
260,088
122,622
569,985
758,569
4,661
-
771,647
823,678
7,892
1,455,837
1,603,217
(a) The borrowings of the overseas subsidiary engaged in mortgage servicing activities are secured against the loan servicing
advances without recourse to the Group.
(b) On 22 March 2005, Computershare US, a controlled entity, issued 52 notes in the United States with the total value of
$318.5 million. These notes were six, seven, ten and twelve years in tenor and were issued at fair value, with no premium or
discount. The six, seven and ten year notes with a total value of $297.5 million were repaid in prior years. The twelve year notes
with a total value of $21.0 million were repaid during the 2017 financial year.
On 29 July 2008, Computershare US issued a further 26 notes in the United States with a total value of $235.0 million. These notes
were for a tenor of ten years. On 9 February 2012, Computershare Investor Services Inc, a controlled entity, issued 62 notes in the
United States with a total value of $550.0 million. These notes were for tenors of six, seven, ten and twelve years. Fixed interest is
paid on all the issued notes on a semi-annual basis. The Group uses interest rate derivatives to manage the fixed interest exposure.
80
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017
The following table provides a reconciliation of the USD Senior Notes.
USD Senior Notes Reconciliation
USD Senior Notes at cost
Fair value adjustments
Total net debt
Interest rate derivative (asset) - fair value hedge (note 13)
Total
2017
$000
2016
$000
785,000
806,000
13,470
39,284
798,470
845,284
(19,702)
(47,075)
778,768
798,209
Fair value adjustments represent loan origination fees and the revaluation of the hedged portion of the USD Senior Notes. Hedged
USD Senior Notes amounted to $460.0 million as at 30 June 2017 (2016: $411.0 million).
The gain or loss from re-measuring the hedging instruments (interest rate derivatives) at fair value is recognised immediately in the
statement of comprehensive income along with the change in fair value of the underlying hedged item (USD Senior Notes). The
fair value adjustment of the hedged USD Senior Notes reflects the valuation change due to lower market interest rates at balance
sheet date for the term until maturity. The increase is offset by the fair value of interest rate derivatives used to effectively convert
the USD fixed interest rate notes to floating interest rates. The conversion to floating interest rate using derivatives provides a
hedge against the Group’s USD interest rate risk exposure.
(c) The lease liability is secured directly against the assets to which the leases relate (note 36). During the year, Computershare sold
the land and building housing its Australian head office. The sale was completed on 9 September 2016. The associated finance
lease arrangement was terminated on 4 August 2016 and was classified as a current liability as at 30 June 2016.
(d) The consolidated entity maintains revolving syndicated facilities that were executed on 17 July 2014. The first facility, as amended
on 20 December 2016, is a multi-currency facility of $450.0 million maturing on 7 July 2020 and the second facility is a USD only
facility of $450.0 million maturing on 17 July 2019. The facilities were drawn to an equivalent of $571.9 million at 30 June 2017.
The facilities are subject to negative pledge undertakings and impose certain covenants upon the consolidated entity. The Group
has complied with the negative pledge undertakings and covenants imposed on it for the year ended 30 June 2017.
15. RECEIVABLES
Current
Trade receivables
Less: provision for impairment
Trade receivables (net)
Accrued revenue
Other non-trade amounts
Non-current
Other
Trade and other receivables
2017
$000
2016
$000
219,799
(8,285)
211,514
179,373
31,918
215,622
(10,446)
205,176
157,444
62,723
422,805
425,343
49
49
876
876
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost, less a provision for
impairment. Trade receivables generally have settlement terms of 30 days.
Impairment of trade receivables
Collectability and impairment are assessed on an ongoing basis. Impairment is recognised in the profit or loss when there is objective
evidence that the Group will not be able to collect the amounts due according to the original trade and other receivable terms.
Factors considered when determining if impairment exists include ageing and timing of expected receipts and the creditworthiness of
counterparties. Debts that are known to be uncollectible are written off.
The Group has recognised a gain of $0.4 million (2016: $3.8 million loss) in respect of impaired trade receivables during the year
ended 30 June 2017. The amount has been included in the ‘direct services’ expense and ‘technology costs’ lines in the statement of
comprehensive income.
81
The analysis of trade receivables for the consolidated entity that were past due but not impaired is as follows:
Past due but not impaired
Neither past
due nor impaired
$000
Less than
30 days overdue
$000
More than 30 days
but less than
90 days overdue
$000
More than
90 days overdue
$000
160,434
145,531
31,890
36,263
13,099
15,477
6,091
7,905
Total
$000
211,514
205,176
30 June 2017
30 June 2016
All other receivables do not contain impaired assets and are not past due.
16. LOAN SERVICING ADVANCES
Current
Loan servicing advances
2017
$000
2016
$000
217,752
255,139
Loan servicing advances are recognised initially at fair value and subsequently measured at amortised cost, less a provision for impairment.
An overseas subsidiary performing loan servicing activities regularly makes payments on behalf of mortgagors related to taxes,
insurance, principal and interest. The receivable represents the total value of these payments yet to be recovered.
In general, the overseas subsidiary is reimbursed for advances from collections from the relevant pool of mortgages. In the event that
pool level collections are not adequate for full reimbursement, the outstanding advances receive priority over any other liability from the
proceeds from the liquidation of the property. Although it takes longer than 12 months for a portion of the loan servicing receivables to be
collected, all servicing advances are classified as current. This reflects the fact that collections occur within the normal operating cycle of
the overseas subsidiary.
17. OTHER FINANCIAL ASSETS
Current
Broker client deposits
19,396
18,655
Broker deposits are recognised initially at fair value and subsequently measured at amortised cost.
An overseas entity is a licensed deposit taker. This controlled entity accepts deposits in its own name, and records these funds as
other financial assets together with a corresponding liability (note 22). The deposits are insured through a local regulatory authority.
18. INVENTORIES
Raw materials and stores, at cost
Work in progress, at cost
3,748
-
3,748
4,406
106
4,512
Inventories are valued at the lower of cost and net realisable value. Cost is assigned on a first-in first-out basis. Net realisable value is
the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs to sell.
19. OTHER CURRENT ASSETS
Prepayments
Other
20. AVAILABLE-FOR-SALE FINANCIAL ASSETS
Current
Debt securities
Equity securities
Non-current
Equity securities
27,208
1,209
28,417
26,887
2,807
29,694
1,539
44
1,583
554
37
591
34,391
17,487
Available-for-sale financial assets are initially recognised at fair value plus transaction costs and are subsequently carried at fair value.
Unrealised gains and losses for changes in fair value are recognised in other comprehensive income in the available-for-sale asset
reserve. When available-for-sale financial assets are sold, the accumulated fair value adjustments are reclassified to profit or loss.
82
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017
Investment in structured entities
Non-current equity securities include $29.3 million of investments in unconsolidated structured entities (2016: $16.3 million). An
overseas subsidiary of the Group occasionally sells economic benefits and obligations associated with mortgage servicing rights to
unconsolidated structured entities while retaining a 20% equity interest in these entities. An unaffiliated third party, which owns 80%
of the structured entities as asset manager, provides investment opportunities to investors and is considered a sponsor of these
entities. The overseas subsidiary of the Group continues to service the loans associated with the mortgage servicing rights sold to the
structured entities and receives a portion of compensation for providing such services.
The structured entities are designed to hold assets that will generate cash flows for their equity investors. The acquisition of these
assets is fully funded at inception and future financial support is not expected to be required. As there is no obligation to provide further
funding, the exposure to loss from the Group’s interest in the structured entities is limited to the carrying amount of the investment.
21. PROPERTY, PLANT AND EQUIPMENT
At 1 July 2016
Opening net book amount
Acquisition of entities and
businesses
Additions
Disposals
Depreciation charge
Currency translation differences
Transfers and other*
Land
$000
8,220
808
-
-
-
(238)
446
Building,
freehold and
leasehold
$000
Plant and
Equipment
owned and
leased
$000
Fixtures and
Fittings
$000
Motor
Vehicles
$000
Leasehold
improvements
$000
Total
$000
33,669
48,528
-
462
(2)
54
25,522
(229)
(1,454)
(23,326)
(984)
(486)
404
(3,362)
6,896
16
2,261
(166)
(2,773)
(56)
(330)
190
17
7
(19)
(61)
2
(25)
19,032
116,535
12
907
7,003
(15)
(7,574)
163
(2,715)
35,255
(431)
(35,188)
(709)
(6,472)
Closing net book amount
9,236
31,205
47,591
5,848
111
15,906
109,897
Cost
Accumulated depreciation
At 30 June 2017
At 1 July 2015
9,236
-
9,236
Opening net book amount
22,000
Acquisition of entities and
businesses
Additions
Disposals
Depreciation charge
Asset write-down
Currency translation differences
Transfers and other*
Closing net book amount
Cost
Accumulated depreciation
At 30 June 2016
-
-
-
-
(1,190)
(1,977)
(10,613)
8,220
8,220
-
8,220
42,656
(11,451)
31,205
51,932
1,548
4,348
(720)
(1,946)
(497)
(6,021)
(14,975)
33,669
45,012
(11,343)
33,669
298,874
(251,283)
47,591
33,474
(27,626)
5,848
53,730
915
9,422
132
559
(448)
111
84
43
52,692
(36,786)
15,906
437,491
(327,594)
109,897
23,939
161,107
-
2,638
22,374
1,096
166
2,895
30,879
(42)
-
(26,243)
(3,223)
-
(1,833)
(373)
48,528
284,509
(235,981)
48,528
-
(527)
(4)
6,896
34,467
(27,571)
6,896
(14)
(83)
-
(10)
4
190
927
(737)
190
-
(7,220)
-
(415)
(167)
19,032
50,378
(31,346)
19,032
(776)
(38,715)
(1,687)
(10,783)
(26,128)
116,535
423,513
(306,978)
116,535
* Includes $6.5 million (2016: $26.1 million) land, buildings and related property, plant and equipment re-classified as held for sale as at 30 June 2017.
Property, plant and equipment are stated at historical costs less accumulated depreciation and impairment. Cost includes the purchase
price and expenditure that is directly attributable to bringing the asset to the location and condition necessary for its intended use.
83
Depreciation
Items of property, plant and equipment excluding freehold land are depreciated on a straight line basis over their estimated useful life.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. Depreciation
expense has been determined based on the following typical rates of depreciation:
> Buildings (2.5% per annum)
> Plant and equipment (10% to 50% per annum)
> Fixtures and fittings (13% to 50% per annum)
> Motor vehicles (15% to 40% per annum)
Leasehold improvements are depreciated over the shorter of the useful life of the improvements or the term of the lease.
Leased property, plant and equipment
Leased property, plant and equipment where the Group has substantially all the risks and benefits of ownership are classified as
finance leases. Assets acquired under finance leases are capitalised and depreciated over the shorter of the lease term and the useful
life of the asset. Lease payments are allocated between interest expense and reduction in the lease corresponding liability.
The following classes of assets include carrying amounts where the Group is a lessee under a finance lease:
Leased assets
Building, freehold and leasehold
Plant and equipment owned and leased
2017
$000
1,342
6,306
7,648
2016
$000
1,282
6,601
7,883
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.
Operating lease assets are not capitalised and lease payments (net of any incentives received from the lessor) are charged to profit or
loss on a straight line basis over the period of the lease.
22. PAYABLES
Current
Trade payables – unsecured
Expense accruals
Deferred revenue
Interest payable
GST/VAT payable
Broker client deposits (note 17)
Employee entitlements
Other payables
Non-current
Other payables
2017
$000
2016
$000
17,150
23,366
153,356
114,919
36,426
24,040
20,768
19,396
18,775
144,062
433,973
30,052
18,135
19,843
18,655
19,749
138,202
382,921
4,300
4,300
9,740
9,740
Trade and other payables represent liabilities for those goods and services provided to the Group prior to the end of the financial year
that are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
84
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017
23. PROVISIONS
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that
an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Where there are a number of
similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as
a whole.
Provisions are measured at the Group’s best estimate of the expenditure required to settle the present obligation at the reporting date
and discounted to present value where the impact of discounting is material. The discount rate used to determine the present value
reflects current market assessments of the time value of money and the risks specific to the liability.
Current
Restructuring
Acquisitions related
Tax related
Lease related
Other
Non-current
Employee entitlements
Acquisitions related
Other
Restructuring
2017
$000
2016
$000
20,590
1,609
7,316
1,242
15,859
46,616
14,306
11,339
990
26,635
9,910
9,992
7,316
2,484
10,986
40,688
14,424
13,878
827
29,129
Restructuring provisions are recognised when a detailed plan for restructuring has been developed and a valid expectation has been
raised in the affected employees that the terminations will be carried out.
Acquisitions related
Acquisition related provisions relate to significant provisions acquired as part of business combinations and are first recognised at the
date of acquisition.
Tax related
Tax related provisions relate to potential tax liabilities associated with prior years’ business activities.
Employee entitlements
Employee entitlements provision represents long service leave and other employee entitlements. Where payments to the employee
are not expected to be settled wholly within 12 months, they are measured as the present value of expected future payments for the
services provided by employees up to the reporting date.
Liability for benefits accruing to employees in relation to employee bonuses and annual leave is recognised in payables.
85
Lease related
Lease related provisions represent costs to restore leased premises to their original condition at the end of the respective lease terms.
Movements in each class of current provision during the financial year are set out below.
Carrying amount at start of year
Additions
Payments
Reversals
Transfers and other
Foreign exchange movements
Carrying amount at end of year
Restructuring
$000
Acquisitions
related
$000
9,910
24,389
(14,064)
-
349
6
20,590
9,992
-
(8,461)
(2,403)
2,539
(58)
1,609
Tax
related
$000
7,316
-
-
-
-
Lease
related
$000
2,484
481
(824)
(812)
(116)
29
Other
$000
10,986
9,848
(3,983)
(983)
281
(290)
Total
$000
40,688
34,718
(27,332)
(4,198)
3,053
(313)
7,316
1,242
15,859
46,616
Movements in each class of non-current provision during the financial year, other than employee entitlements, are set out below.
Acquisitions
related
$000
13,878
-
(2,539)
11,339
Carrying amount at start of year
Additions
Transfers and other
Carrying amount at end of year
24. DEFERRED CONSIDERATION
Current
Deferred settlements on acquisition of entities
Non-current
Deferred settlements on acquisition of entities
Non-current deferred settlements on acquisition of entities are payable in between one and five years.
25. MORTGAGE SERVICING RELATED LIABILITIES
Current
Mortgage servicing related liabilities
Non-current
Mortgage servicing related liabilities
Other
$000
827
766
(603)
990
Total
$000
14,705
766
(3,142)
12,329
2017
$000
2016
$000
21,914
12,402
48,953
65,969
25,323
30,383
157,347
124,222
Mortgage servicing related liabilities represent the portion of the economic benefits of mortgage servicing rights that has been
transferred to third parties. The liabilities are amortised over the same useful life as the related mortgage servicing rights (note 10).
26. OTHER LIABILITIES
Current
Put option liability (a)
Lease inducements (b)
Non-current
Lease inducements (b)
-
2,205
2,205
37,275
2,211
39,486
2,164
2,801
(a) Non-controlling interest shareholders of Computershare’s Indian subsidiary Karvy (Karvy Computershare Private Limited) have
an option to sell their shareholding to Computershare. The put option liability reflects Computershare’s obligation to pay should
this option be exercised. On 3 August 2017, Computershare agreed to sell its 50% interest in Karvy. The put option liability was
reclassified as held for sale at 30 June 2017 (note 9) as the put option will be extinguished on completion of the sale.
(b) Lease inducements represent cash payments received as allowances for leasehold improvements made to a number of premises.
These receipts are accounted for as reductions in rental expense over the lease term.
86
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017
27. INTERESTS IN EQUITY
Interest in the equity of the consolidated entity:
Contributed equity – ordinary shares
Reserves
Retained earnings
Total interests in equity
28. CONTRIBUTED EQUITY
Members of the parent entity
Non-controlling interests
2017
$000
2016
$000
2017
$000
2016
$000
-
-
(98,487)
(95,872)
1,315,607
1,188,890
1,217,120
1,093,018
990
(5,401)
24,319
19,908
990
(6,490)
19,015
13,515
Ordinary share capital bears no special terms or conditions affecting income or capital entitlements of the shareholders and is
classified as equity. Costs directly attributable to the issue of new shares are recognised directly in equity as a deduction, net of tax,
from the proceeds.
If the Group reacquires its own equity instruments, for example as the result of a share buy-back, those instruments are deducted from
equity and the associated shares are cancelled. No gain or loss is recognised in the profit or loss and the consideration paid including
any directly attributable incremental costs (net of income taxes) is recognised directly in equity.
Share buy-back
On 18 August 2015, Computershare announced an on-market buy-back of shares with an aggregate value of AUD 140.0 million for
capital management purposes. The on-market share buy-back ended on 31 August 2016, with 9,877,069 ordinary shares purchased
and cancelled at a total cost of AU$105.2 million (US$76.6 million).
From 1 July 2016 until 31 August 2016, the Company purchased and cancelled 500,000 ordinary shares at a total cost of
AU$4.6 million (US$3.5 million) with an average price of AU$9.20 and a price range from AU$9.03 to AU$9.33.
Since the effect of share buy-backs over the years has reduced contributed equity to nil, a reserve has been created to reflect the
excess value of shares bought over the original amount of subscribed capital.
There has been no issue of ordinary shares during the year ended 30 June 2017.
Movement in contributed equity
Balance at 1 July 2016
Share buy-back
Transfer to share buy-back reserve
Balance as at 30 June 2017
Number of
shares
546,826,010
(500,000)
-
546,326,010
$000
-
(3,458)
3,458
-
On 16 August 2017, Computershare announced an on-market buy-back of shares with an aggregate value of up to AUD 200.0 million
for capital management purposes. The buy-back commenced on 30 August 2017.
87
29. RESERVES
Capital redemption reserve
Foreign currency translation reserve
Share buy-back reserve
Cash flow hedge reserve
Share based payments reserve
Equity related contingent consideration reserve
Available-for-sale asset reserve
Transactions with non-controlling interests
Movements during the year:
Foreign currency translation reserve
Opening balance
Translation of controlled entities
Amounts reclassified to profit or loss during the year
Deferred tax
Closing balance
2017
$000
2
(72,526)
(40,927)
(4,855)
44,244
(8,199)
278
(16,504)
(98,487)
2016
$000
2
(73,039)*
(37,469)
(4,855)
43,925
(8,199)
267
(16,504)
(95,872)
(73,039)
(50,070)*
4,591
(45,527)
-
(4,078)
(72,526)
29,505
(6,947)
(73,039)
* 2016 comparative balance has been restated to reflect the correction of an immaterial prior period error resulting in the reclassification within equity of $14.4 million from the
foreign currency translation reserve to retained earnings.
Share buy-back reserve
Opening balance
Excess value of shares bought over the original amount of subscribed capital
Closing balance
Cash flow hedge reserve
Opening balance
Revaluation
Deferred tax
Closing balance
Share based payments reserve
Opening balance
Cash purchase of shares for employee and executive share plans
Share based payments expense
Closing balance
Equity related contingent consideration reserve
Opening balance
Closing balance
Available-for-sale asset reserve
Opening balance
Revaluation
Closing balance
Transactions with non-controlling interests
Opening balance
Closing balance
88
(37,469)
(3,458)
(40,927)
-
(37,469)
(37,469)
(4,855)
(4,464)
-
-
(497)
106
(4,855)
(4,855)
43,925
(15,105)
15,424
44,244
45,144
(12,177)
10,958
43,925
(8,199)
(8,199)
(8,199)
(8,199)
267
11
278
329
(62)
267
(16,504)
(16,504)
(16,504)
(16,504)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017
Nature and purpose of reserves
(a) Foreign currency translation reserve
On consolidation, exchange differences arising on translation of the foreign controlled entities are taken to the foreign currency
translation reserve. This amount is the net of gains and losses on hedge transactions and intercompany loans after adjusting for
related income tax effects. When a foreign operation is disposed, the associated exchange differences are reclassified to profit or
loss as part of the gain or loss on sale.
(b) Share buy-back reserve
This reserve is used to record the excess value of shares bought over the original amount of subscribed capital.
(c) Cash flow hedge reserve
This reserve records the portion of the gain or loss on a hedging instrument in a cash flow hedge that is determined to be in an
effective hedge relationship.
(d) Share based payments reserve
The share based payments reserve is used to recognise the fair value of shares which will vest to employees under employee and
executive share plans. This reserve is also used to record cash purchase of shares for employee share plans.
(e) Equity related contingent consideration reserve
This reserve is used to reflect deferred consideration for acquisitions which is payable through the issue of parent entity equity
instruments.
(f) Available for sale asset reserve
Changes in the fair value of investments classified as available for sale financial assets, such as equities, after adjusting for related
income tax effects are taken to this reserve. Amounts are reclassified to profit or loss when the associated assets are sold or
impaired.
(g) Transactions with non-controlling interests
This reserve is used to record the differences which may arise as a result of transactions with non-controlling interests that do not
result in a loss of control.
30. RETAINED EARNINGS AND DIVIDENDS
Retained earnings
Retained earnings at the beginning of the financial year
Ordinary dividends provided for or paid
Net profit attributable to members of Computershare Limited
Retained earnings at the end of the financial year
2017
$000
2016
$000
1,188,890
1,160,106*
(139,678)
266,395
(128,550)
157,334
1,315,607
1,188,890
* 2016 comparative balance has been restated to reflect the correction of two immaterial prior period errors – the reclassification within equity of $14.4 million from the foreign
currency translation reserve to retained earnings and the reduction of the carrying value of investments by $2.2 million (refer to note 32).
Dividends
Ordinary
Final dividend paid during the financial year in respect of the previous year, AUD 17 cents per share franked to 20%
(2016 – AUD 16 cents per share franked to 25%)
69,841
64,726
Interim dividend paid in respect of the current financial year ended June 2017, AUD 17 cents per share franked to 30%
(2016 – AUD 16 cents per share franked to 100%)
69,837
63,824
A final dividend in respect of the year ended 30 June 2017 was declared by the directors of the Company on 16 August 2017, to be paid on
18 September 2017. This is an unfranked ordinary dividend of AU 19 cents per share. As the dividend was not declared until 16 August 2017,
a provision was not recognised as at 30 June 2017.
Dividend franking account
Franking credits available for subsequent financial years based on a tax rate of 30%
20,470
10,292
89
31. DETAILS OF CONTROLLED ENTITIES
The financial year-end of all controlled entities is 30 June with the exception of Computershare Canada Inc and its controlled entities,
Computershare Hong Kong Investor Services Limited and its controlled entities, Computershare International Information Consultancy
Services (Beijing) Company Ltd and Karvy Computershare Private Limited and its controlled entities due to local statutory reporting
requirements. These entities prepare results on a 30 June year end basis for consolidation purposes. Voting power is in accordance
with the ownership interest held unless otherwise stated.
The consolidated financial statements as at 30 June 2017 include the following controlled entities:
Percentage of shares held
Place of incorporation
2017
%
Name of controlled entity
Computershare Limited
A.C.N. 080 903 957 Pty Ltd
A.C.N. 081 035 752 Pty Ltd
A.C.N. 617 889 424 Pty Limited
A.C.N. 618 089 688 Pty Limited
CDS International Pty Limited
Communication Services Australia Pty Limited
Computershare Clearing Pty Limited
Computershare Communication Services Pty Limited
Computershare Dealing Services Pty Ltd
Computershare Depositary Pty Limited
Computershare Finance Company Pty Limited
Computershare Investor Services Pty Limited
Computershare Plan Co Pty Ltd
Computershare Plan Managers Pty Ltd
Computershare Technology Services Pty Ltd
Computershare Utility Services Pty Ltd
CPU Share Plans Pty Limited
CRS Custodian Pty Ltd
Financial Market Software Consultants Pty Ltd
Georgeson Shareholder Communications Australia Pty. Ltd.
Global eDelivery Group Pty Ltd
Obadele Pty Ltd
Q M Industries (N.S.W.) Pty. Ltd.
Registrars Holding Pty Ltd
Sepon (Australia) Pty. Limited
Source One Communications Australia Pty Ltd
Switchwise Pty Ltd
Karvy Computershare W.L.L
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Bahrain
Computershare Investor Services (Bermuda) Limited
Bermuda
Computershare Investor Services (BVI) Limited
British Virgin Islands
Computershare Canada Inc
Computershare Governance Services Ltd
Computershare Investment Inc.
Computershare Investments (Canada) (Holdings) ULC
Computershare Investments (Canada) (No.1) ULC
Computershare Investments (Canada) (No.2) ULC
Computershare Investments (Canada) (No.3) ULC
Computershare Investments (Canada) (No.4) ULC
Computershare Investor Services Inc
Computershare Services Canada Inc
Computershare Technology Services Inc
Computershare Trust Company of Canada
Georgeson Shareholder Communications Canada Inc
RicePoint Administration Inc.
SyncBASE Inc.
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Computershare Investor Services (Cayman) Limited
Cayman Islands
90
(2)
(1)(2)
(1)(2)
(1)(4)
(1)(4)
(1)(2)
(1)(2)
(1)
(1)(2)
(1)
(1)
(1)(2)
(1)(2)
(1)
(1)
(1)(2)
(1)(2)
(1)
(1)
(1)
(1)
(1)
(1)(2)
(1)
(1)(2)
(1)
(1)
(1)
(3)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)(4)
(1)
(1)
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
50
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
2016
%
-
100
100
-
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
50
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017 Name of controlled entity
Place of incorporation
Computershare International Information Consultancy Services (Beijing)
Company Ltd
China
Computershare A/S
Georgeson Shareholder SAS
Computershare Communication Services GmbH
Computershare Deutschland GmbH & Co. KG
Computershare Governance Services GmbH
Computershare Verwaltungs GmbH
Grundstücksentwicklungs Gesellschaft “Am Schönberg” GmbH
PR Im Turm HV-Service AG
Computershare Investor Services (Guernsey) Limited
Computershare Asia Limited
Computershare Hong Kong Development Limited
Computershare Hong Kong Investor Services Limited
Computershare Hong Kong Nominees Limited
Computershare Hong Kong Trustees Limited
Hong Kong Registrars Limited
Karvy Computershare Private Limited
Computershare Finance Ireland Limited
Computershare Governance Services Limited
Computershare Investor Services (Ireland) Limited
Computershare Services Nominees (Ireland) Limited
Computershare Trustees (Ireland) Limited
HML Mortgage Services Ireland Limited
Specialist Mortgage Services Ireland Limited
Denmark
France
Germany
Germany
Germany
Germany
Germany
Germany
Guernsey
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
India
Ireland
Ireland
Ireland
Ireland
Ireland
Ireland
Ireland
Computershare Investor Services (IOM) Limited
Isle of Man
Computershare Italy S.r.l.
Computershare S.p.A.
Georgeson S.r.l.
Proxitalia S.r.l.
Computershare Company Secretarial Services (Jersey) Limited
Computershare DR Nominees Limited
Computershare Investor Services (Jersey) Limited
Computershare Nominees (Channel Islands) Limited
Computershare Offshore Services Limited
Computershare Trustees (C.I.) Limited
Computershare Trustees (Jersey) Limited
EES Nominees International Limited
Karvy Computershare (Malaysia) Sdn Bhd
Computershare Netherlands B.V.
Computershare Investor Services Limited
Computershare Nominees NZ Limited
ConnectNow New Zealand Limited
CRS Nominees Limited
ZAO <>
CIS Company Secretaries (Pty) Ltd
Computershare (Pty) Ltd
Computershare Investor Services (Pty) Ltd
Computershare Nominees (Pty) Ltd
Computershare Outsourcing (Pty) Ltd
Computershare South Africa (Pty) Ltd
Computershare TR Services (Pty) Ltd
Minu (Pty) Ltd
Georgeson S.l
Computershare AB
Italy
Italy
Italy
Italy
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Malaysia
Netherlands
New Zealand
New Zealand
New Zealand
New Zealand
Russia
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
Spain
Sweden
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)(5)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(3)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(3)
(1)
(1)
(1)
(1)
(1)
(1)(5)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
Percentage of shares held
2017
%
100
2016
%
100
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
50
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
50
100
100
100
100
100
-
74
74
74
74
74
74
74
74
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
50
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
50
100
100
100
100
100
98
74
74
74
74
74
74
74
74
100
100
91
Name of controlled entity
Computershare Schweiz AG
Baseline Capital Limited
Computershare (Russia) Limited
Computershare Company Nominees Limited
Computershare Governance Services (UK) Limited
Computershare Investments (UK) (No.2) Limited
Computershare Investments (UK) (No.3) Limited
Computershare Investments (UK) (No.5) Limited
Computershare Investments (UK) (No.6) Limited
Computershare Investments (UK) (No.7) Limited
Computershare Investments (UK) (No.8) Limited
Computershare Investments (UK) (No.9) Limited
Computershare Investments (UK) Limited
Computershare Investor Services PLC
Computershare Limited
Computershare Mortgage Services Limited
Computershare PEP Nominees Limited
Computershare Regional Services Limited
Computershare Services Limited
Computershare Services Nominees Limited
Computershare Technology Services (UK) Limited
Computershare Trustees Limited
Computershare Voucher Services Limited
Credit Advisory Services Limited
EES Capital Trustees Limited
EES Corporate Trustees Limited
EES Services (UK) Limited
EES Trustees Limited
Homeloan Management Limited
KB Analytics Limited
Legotla Investments (UK) Limited
Mortgage Systems Limited
NRC Investments (UK) Limited
Pathbold Limited
Topaz Finance Limited
Administar Services Group LLC
Altavera, LLC
Altavera Mortgage Services, LLC
Capital Markets Cooperative, LLC
Capital Markets Holdings, Inc.
CMC Funding, Inc.
Computershare Communication Services Inc.
Computershare Finance LLC
Computershare Governance Services Inc.
Computershare Holdings Inc.
Computershare Holdings LLC
Computershare Inc.
Computershare Mortgage Services LLC
Computershare Mortgage Solutions LLC
Computershare Technology Services, Inc.
Computershare Trust Company, N.A.
Computershare US
Computershare US Investments LLC
Computershare US Services Inc.
Computershare Valuation Services LLC
92
Place of incorporation
Percentage of shares held
2017
%
2016
%
Switzerland
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
(1)(4)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
United States of America
(1)(4)
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017 Name of controlled entity
Data Point Analysis Group, LLC
Georgeson LLC
Georgeson Securities Corporation
Gilardi & Co., LLC
Gilco LLC
GTU Ops Inc.
HELOC Funding II Trust
KCC Class Action Services LLC
Kurtzman Carson Consultants Inc.
Kurtzman Carson Consultants, LLC
MSR Robin Advances (Depositor) LLC
MSR Robin Advances Issuer Trust
RCNG LLC
Rosenthal & Company, LLC
Settlement Recovery Group LLC
SLS Funding III LLC
SLS Investco LLC
SLS Servicer Advance Revolving Trust 1
Specialized Asset Management LLC
Specialized Loan Servicing Holdings LLC
Specialized Loan Servicing LLC
Specialized Title Services LLC
Place of incorporation
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
United States of America
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
Percentage of shares held
2017
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
2016
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
(1) Controlled entities audited by PricewaterhouseCoopers member firms.
(2) These wholly owned companies have entered into a deed of cross guarantee dated 26 June 2008 with Computershare Limited
which provides that all parties to the deed will guarantee to each creditor payment in full of any debt of each company participating
in the deed on the winding-up of that company. As a result of ASIC Corporations (Wholly-owned Companies) Instrument 2016/785
these companies are relieved from the requirement to prepare a financial report and directors’ report.
(3) These companies are controlled entities as Computershare Limited is exposed to, or has rights to, variable returns from its
involvement with these companies and has the ability to affect those returns through its power over these companies.
(4) These companies became controlled entities during the year ended 30 June 2017.
(5) These companies ceased to be controlled entities during the year ended 30 June 2017.
93
32. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
Investments in associates and joint ventures are accounted for using the equity method of accounting. Under this method, the
investments are initially recognised at cost and the carrying value is subsequently adjusted for increases or decreases in the Group’s
share of post-acquisition profit or loss and movements in other comprehensive income. The Group’s share of post-acquisition profits
or losses from investments in associates and joint ventures is recognised in the profit or loss. Dividends received or receivable are
recognised as a reduction of the carrying amount of the investment.
Set out below are the associates and joint ventures of the Group at 30 June 2017:
Name
Associates
Expandi Ltd
Place of
incorporation
Principal
activity
United Kingdom
Investor Services
Milestone Group Pty Ltd1
Australia
Technology Services
The Reach Agency Holdings Pty Ltd2
Australia
Investor Services
INVeSHARE Inc.3
Mergit s.r.l.
United States
Investor Services
Italy
Technology Services
Total investments in associates
Joint ventures
Computershare Pan Africa Holdings Ltd Mauritius
Investor Services
Asset Checker Ltd
VisEq GmbH
United Kingdom
Investor Services
Germany
Investor Services
Total investment in joint ventures
Total investment in associates and joint ventures
Ownership
interest
Consolidated
carrying amount
June
2017
%
25
20
46.5
-
30
60
50
66
June
2016
%
25
20
49
40
30
60
50
66
June
2017
$000
6,136
3,759
1,072
-
-
June
2016
$000
6,045
3,423
1,244
14,326
15
10,967
25,053
-
-
54
54
-
-
104
104
11,021
25,157
1 June 2016 balance has been restated to reflect the correction of an immaterial prior period error, which resulted in the reduction of the Milestone carrying value by $2.2 million.
2 The previous investment in The Reach Agency Pty Ltd became an investment in the newly created holding entity The Reach Agency Holdings Pty Ltd. The Reach Agency
Holdings Pty Ltd owns 100% of The Reach Agency Pty Ltd. The current interest in The Reach Agency Holdings Pty Ltd is 46.5%.
3 INVeSHARE Inc. was disposed during the reporting period. A post-tax gain of $9.3 million was recorded on the disposal.
The movements in the carrying amount of equity accounted investments in associates and joint ventures are as follows:
Associates
Joint Ventures
Carrying amount at the beginning of the financial year
Disposal of investments
Share of net result (after income tax)
Dividends received
Share of movement in reserves
2017
$000
25,053
(14,383)
705
(421)
13
2016
$000
27,838
-
(1,339)
(254)
(1,192)
Carrying amount at the end of the financial year
10,967
25,053
2017
$000
104
-
(50)
-
-
54
2016
$000
1,558
(1,200)
(10)
(203)
(41)
104
94
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017
33. DEED OF CROSS GUARANTEE
Computershare Limited and each wholly-owned subsidiary party to a deed of cross guarantee dated 26 June 2008 (together
the “Closed Group”) are listed in note 31. Set out below is a consolidated statement of comprehensive income, a consolidated
statement of financial position and a summary of movements in consolidated retained earnings of the Closed Group for the year
ended 30 June 2017.
Computershare Limited Closed Group – Statement of financial position
Current assets
Cash and cash equivalents
Receivables
Inventories
Other current assets
Derivative financial instruments
Assets classified as held for sale
Total current assets
Non-current assets
Receivables
Other financial assets
Property, plant and equipment
Deferred tax assets
Intangibles
Derivative financial instruments
Other non-current assets
Total non-current assets
Total assets
Current liabilities
Payables
Lease liabilities
Current tax liabilities
Provisions
Derivative financial instruments
Liabilities directly associated with assets classified as held for sale
Other liabilities
Total current liabilities
Non-current liabilities
Payables
Interest bearing liabilities
Lease liabilities
Deferred tax liabilities
Provisions
Derivative financial instruments
Other liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity – ordinary shares
Reserves
Retained earnings
Total equity
2017
$000
38,507
57,633
690
3,611
437
9,131
2016
$000
30,942
70,560
964
3,088
634
23,842
110,009
130,030
114,384
142,982
1,787,692
1,735,067
8,783
49,926
10,797
48,579
131,431
127,061
19,440
755
48,014
686
2,112,411
2,113,186
2,222,420
2,243,216
298,212
172,896
1,554
19,306
746
3,653
45,713
25,966
6,715
1,006
1,236
-
94
37,385
369,278
245,204
125,970
269,986
1,294
7,355
11,643
3,374
255
419,877
789,155
132,163
491,509
1,411
15,917
11,656
5,500
471
658,627
903,831
1,433,265
1,339,385
-
-
(84,774)
(114,016)
1,518,039
1,453,401
1,433,265
1,339,385
95
Computershare Limited Closed Group – Statement of comprehensive income
Revenues from continuing operations
Sales revenue
Other revenue
Total revenue from continuing operations
Other income
Expenses
Direct services
Technology costs
Corporate services
Finance costs
Total expenses
Share of net profit/(loss) of associates and joint ventures accounted for using the equity method
Profit before income tax expense
Income tax expense/(credit)
Profit for the year
Other comprehensive income
Exchange differences on translation of foreign operations
Total other comprehensive income for the year, net of tax
Total comprehensive income for the year
Set out below is a summary of movements in consolidated retained profits for the year of the Closed Group.
Retained earnings at the beginning of the financial year
Profit for the year
Dividends provided for or paid
Retained earnings at the end of the financial year
34. PARENT ENTITY FINANCIAL INFORMATION
(a) Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
Balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Equity
Contributed equity – ordinary shares
Reserves
Share buy-back reserve
Capital redemption reserve
Foreign currency translation reserve
Share based payment reserve
Equity related consideration
Available-for-sale asset reserve
Retained earnings
Total equity
Profit/(loss) attributable to members of the parent entity
Total comprehensive income attributable to members of the parent entity
96
2017
$000
2016
$000
231,106
237,493
468,599
52,411
246,832
208,075
454,907
60,547
175,904
205,193
65,936
23,129
23,937
71,897
22,030
24,545
288,906
323,665
165
232,269
27,953
204,316
142
191,931
29,383
162,548
44,000
44,000
(42,365)
(42,365)
248,316
120,183
1,453,401
1,419,416
204,316
(139,678)
162,548
(128,563)
1,518,039
1,453,401
2017
$000
2016
$000
73,370
1,229,591
1,302,961
62,560
835,115
897,675
64,501
826,016
890,517
63,098
727,479
790,577
-
-
(40,927)
(37,469)
2
77,704
33,364
(2,327)
(60)
337,530
405,286
438,713
448,281
2
68,136
33,162
(2,327)
(60)
38,496
99,940
45,825
35,040
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017
(b) Guarantees
The parent entity’s financial guarantees have been outlined in note 35.
(c) Contingent liabilities
The parent entity did not have any contingent liabilities as at 30 June 2017 or 30 June 2016 other than the Australian thin capitalisation
contingent liability outlined in note 6 and the matters outlined in note 35.
(d) Parent entity financial information
The financial information for the parent entity, Computershare Limited has been prepared on the same basis as the consolidated
financial statements, except as set out below.
Investments in controlled entities, associates and joint venture entities
Investments in controlled entities, associates and joint venture entities are accounted for at cost in the financial statements of
Computershare Limited. Dividends received from associates and joint ventures are recognised in the parent entity’s profit or loss, rather
than being deducted from the carrying amount of these investments.
Tax consolidation legislation
Computershare Limited and its wholly-owned Australian controlled entities formed a tax consolidation group with effect from 1 July 2002.
Members of the tax consolidated group also entered into a tax sharing deed, which includes a tax funding arrangement. As a
consequence, Computershare Limited, as the head entity in the tax consolidation group, has recognised the current tax liability
(or receivable) relating to the wholly owned Australian controlled entities in this group in the financial statements as if that liability
(or receivable) was its own. Amounts receivable or payable under the tax sharing deed are recognised separately as intercompany
payables or receivables.
35. CONTINGENT LIABILITIES
(a) Guarantees and Indemnities
Guarantees and indemnities of $900.0 million (2016: $900.0 million) have been given to the consolidated entity’s bankers by
Computershare Limited, ACN 081 035 752 Pty Ltd, Computershare Investments (UK) (No. 3) Ltd, Computershare Finance Company
Pty Ltd, Computershare US and Computershare Investor Services Inc under a $450.0 million 3-year Multi-currency Syndicated Facility
Agreement and a $450.0 million 5-year USD Syndicated Facility Agreement both executed on 17 July 2014 (refer to note 14 for
further detail).
Guarantees and indemnities of $785.0 million (2016: $806.0 million) have been given to US Institutional Accredited Investors by
Computershare Limited, ACN 081 035 752 Pty Ltd, Computershare Finance Company Pty Ltd, Computershare US, Computershare
Investments (UK) (No. 3) Ltd and Computershare Investor Services Inc under a Note and Guarantee Agreement dated 22 March 2005,
29 July 2008 and 9 February 2012.
Bank guarantees of AUD 3.1 million (2016: AUD 4.8 million) have been given in respect of facilities provided to Australian subsidiaries.
Bank guarantees of ZAR 7.8 million (2016: 1.6 million) have been given in respect of facilities provided to South African subsidiaries.
A performance guarantee of ZAR 16.0 million (2016: ZAR 16.0 million) has been given by Computershare (Pty) Ltd to provide security
for the performance of obligations as a Central Securities Depository Participant.
(b) Legal and Regulatory Matters
Due to the nature of operations, certain commercial claims in the normal course of business have been made against the consolidated
entity in various countries. An inherent difficulty in predicting the outcome of such matters exists, but in the opinion of the Group, based
on current knowledge and in consultation with legal counsel, we do not expect any material liability to the Group to eventuate. The
status of all claims is monitored on an ongoing basis, together with the adequacy of any provisions recorded in the Group’s Financial
Statements. For the Australian thin capitalisation contingent liability refer to note 6.
(c) Other
The Group is subject to regulatory capital requirements administered by relevant regulatory bodies in countries where Computershare
operates. Failure to meet minimum capital requirements, or other ongoing regulatory requirements, can initiate action by the regulators
that, if undertaken, could revoke or suspend the Group’s ability to provide trust services to customers in these markets. At all relevant
times Group controlled entities have met all minimum capital requirements.
Computershare Limited (Australia) has issued a letter of warrant to Computershare (Pty) Ltd. This obligates Computershare Limited
(Australia) to maintain combined tier one capital of at least ZAR 455.0 million.
97
Potential withholding and other tax liabilities arising from distribution of all retained distributable earnings of all foreign incorporated
controlled entities are $41.3 million (2016: $47.1 million). No provision is made for withholding tax on unremitted earnings of applicable
foreign incorporated controlled entities as there is currently no intention to remit these earnings to the parent entity.
In consideration of the Australian Securities and Investments Commission agreeing to allow AUD 5.0 million to form part of the net
tangible assets of Computershare Clearing Pty Ltd so that it can meet certain financial requirements under the conditions of its
Australian Financial Services Licence, Computershare Limited has agreed to make, at the request of Computershare Clearing Pty
Ltd, a AUD 5.0 million loan to it. Computershare Limited has agreed to subordinate its loan to any other unsecured creditors of
Computershare Clearing Pty Ltd. The loan was made pursuant to a deed of subordination dated 7 January 2004.
In consideration of the Australian Securities and Investments Commission agreeing to allow AUD 5.0 million to form part of the net
tangible assets of Computershare Share Plans Pty Ltd so that it can meet certain financial requirements under the conditions of its
Australian Financial Services Licence, Computershare Limited has agreed to make, at the request of Computershare Share Plans
Pty Ltd, a AUD 5.0 million loan to it. Computershare Limited has agreed to subordinate its loan to any other unsecured creditors of
Computershare Share Plans Pty Ltd. The loan was made pursuant to a deed of subordination dated 5 July 2007.
Computershare Limited (Australia), as the parent entity, has undertaken to own, either directly or indirectly, all of the equity interests
and to guarantee performance of the obligations of Computershare Investor Services Pty Ltd, Computershare Trust Company NA,
Georgeson LLC, Georgeson Securities Corporation, Computershare Trust Company of Canada and Computershare Investor Services
Inc with respect to any financial accommodation related to transactional services provided by BMO Harris Bank, Chicago.
36. COMMITMENTS
(a) Retirement benefits
Defined Contribution Funds
The Group maintains defined contribution superannuation schemes which provide benefits to all employees upon their disability, retirement
or death. Employee contributions to the funds are based upon various percentages of employees’ gross salaries as set out below:
Australian controlled entities contribute to the defined contribution funds as follows:
> Category 1 – Management (employer contributions, voluntary employee contributions)
> Category 2 – Staff (statutory employer contributions of 9.5%, voluntary employee contributions)
> Category 3 – SGC Staff and casual and fixed term employees (statutory employer contributions, voluntary employee contributions)
Foreign controlled entities contribute to the defined contribution funds as follows:
> United Kingdom entities – between 7% and 10% of employees’ gross salaries
> United States entities – voluntary employee contributions with matching employer contribution up to 4% of employees’ base salaries
> Canadian entities – between 2% and 7% of employees’ base salaries dependent upon years of service
> South African entities – 12.25% of employees’ gross salaries
> New Zealand entities – voluntary employee contributions with matching employer contribution up to 6% of employees’ base salaries
> Hong Kong entities – between 5% and 20% of employees’ base salary dependent upon years of service
> Indian entity – 12% of employees’ gross salaries
Defined Benefit Funds
Where material to the Group, a liability or asset in respect of these plans is recognised in the consolidated statement of financial
position, and is measured as the present value of the defined benefit obligation at the reporting date plus unrecognised actuarial gains
(less unrecognised actuarial losses) less the fair value of the superannuation fund’s assets at that date and any unrecognised past
service cost.
Karvy Computershare Private Limited maintained a defined benefit superannuation scheme which provides benefits to 4,303
employees (2016: 3,663). Actuarial valuation of the scheme is provided by the Life Insurance Corporation, which maintains the fund.
The net liability is not material to the Group.
Computershare Deutschland GmbH & Co. KG and Computershare Communication Services GmbH maintained a defined benefit
scheme which provides benefits to 9 employees (2016: 9). An actuarial assessment of the scheme was completed as at 30 June 2017
and defined benefit plan liability recognised in accordance with the actuarial valuation. The net liability is not material to the Group.
98
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017 (b) Finance lease commitments
Commitments in relation to finance leases are payable as follows:
Not later than 1 year
Later than 1 year but not later than 5 years
Minimum lease payments
Less: Future finance charges
Not later than 1 year
Later than 1 year but not later than 5 years
Total future finance charges
Net finance lease liability
Reconciled to:
Current liability (note 14)
Non-current liability (note 14)
(c) Operating lease commitments
2017
$000
2016
$000
5,462
4,740
10,202
(99)
(79)
(178)
10,024
5,363
4,661
10,024
33,258
7,957
41,215
(2,986)
(65)
(3,051)
38,164
30,272
7,892
38,164
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:
Not later than 1 year
Later than 1 year but not later than 5 years
Later than 5 years
(d) Other
51,623
45,263
114,873
102,627
58,043
45,395
224,539
193,285
An overseas subsidiary performing loan servicing activities is obliged, in certain circumstances, to make payments on behalf of
mortgagors related to taxes, insurance, principal and interest. The amount of these advance payments fluctuates over time as it
depends on the type of loans being serviced and their performance.
As part of an MSR transaction completed in this reporting period, the overseas subsidiary undertook to purchase in 24 months from
acquisition date any previously advanced amounts related to this MSR that remain uncollected at that point in time at fair value, rather
than acquire the advances upon the MSR acquisition as is customary. The overseas subsidiary will have the responsibility to fund any
new advances associated with this portfolio of loans.
37. CAPITAL EXPENDITURE COMMITMENTS
Capital expenditure commitments contracted for at balance date but not recorded in the financial statements are as follows:
Fit-out of premises
Plant and equipment
96
1,635
1,731
-
1,296
1,296
38. SIGNIFICANT EVENTS AFTER YEAR END
Post balance date events are included in notes 9 (disposal of Karvy) and 28 (share buy-back). No matter or circumstance has arisen
since the end of the financial year which is not otherwise dealt with in this financial report that has significantly affected or may
significantly affect the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated
entity in subsequent financial years.
99
39. RELATED PARTY DISCLOSURES
Key management personnel disclosures are included in note 40. Detailed remuneration disclosures are provided in the remuneration
report.
Directors’ shareholdings
Ordinary shares held at the end of the financial year
Net ordinary shares purchased/(sold) by directors during the financial year
Ordinary dividends received during the year in respect of those ordinary shares
(a) Wholly owned Group – intercompany transactions and outstanding balances
Shares in the parent entity
2017
2016
46,885,493
50,147,772
(3,337,279)
(290,000)
2017
$
2016
$
12,643,464
11,709,346
The parent entity and its controlled entities entered into the following transactions during the year within the wholly owned Group:
> Loans were advanced and repayments received on loans and intercompany accounts
> Fees were exchanged between entities
> Interest was charged between entities
> The parent entity and its Australian controlled entities have been parties to a tax sharing deed, which includes a tax funding
arrangement (note 34)
> Dividends were paid between entities
> Bank guarantees were provided by the parent entity to its controlled entities (note 35)
These transactions were undertaken on commercial terms and conditions.
Ultimate controlling entity
The ultimate controlling entity of the Group is Computershare Limited.
(b) Ownership interests in related parties
Interests in controlled entities are set out in note 31. Interests held in associates and joint ventures are disclosed in note 32.
(c) Transactions with associates and joint ventures
The following transactions occurred with associates and joint ventures:
Sales and purchases of goods and services
Sales to
Purchases from
Outstanding balances arising from sales and purchases of goods and services
Trade receivables
Trade payables
Loans to associates
Loan receivable from INVeSHARE Inc.
These transactions were undertaken on commercial terms and conditions.
2017
$
2016
$
125,220
700,964
1,111,348
1,993,643
54,457
1,199,020
3,331
72,658
-
7,192,730
100
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017
40. KEY MANAGEMENT PERSONNEL DISCLOSURES
Key management personnel compensation
Short-term employee benefits
Other long-term benefits
Post-employment benefits
Share based payments
Other
Total
2017
$
2016
$
8,121,378
7,861,927
60,603
26,406
257,680
286,033
2,580,944
1,143,461
369,716
16,933
11,390,321
9,334,760
For detailed remuneration disclosures please refer to section A to F of the remuneration report within the Directors’ Report.
41. EMPLOYEE AND EXECUTIVE BENEFITS
Certain employees are entitled to participate in share and performance rights schemes. A transaction is classified as share-based
compensation where the Group receives services from employee and pays for these in shares or similar equity instruments.
For each of the Group’s share plans, the fair value is measured at grant date and the expense is recognised over the relevant vesting
period in the income statement with a corresponding increase in the share based payments reserve. The expense is adjusted to reflect
actual and expected levels of vesting.
(a) Share plans
Exempt Employee Share Plan
During the year ended 30 June 2001 the Group introduced an Exempt Employee Share Plan. The Plan gives Computershare
employees in Australia the opportunity to acquire shares in Computershare Limited. Each year, participating employees can make
contributions from their pre-tax salary to acquire AUD 500 worth of shares. Such employee contributions are matched by the Group
with an additional AUD 500 worth of shares being acquired for each participating employee. All permanent employees in Australia with
at least 6 months service and employed at the allocation date are entitled to participate in this Plan.
Deferred Employee Share Plan
During the year ended 30 June 2002 a Deferred Employee Share Plan was established to enable Computershare to match dollar for dollar
any employee pre-tax contributions to a maximum of AUD 3,000 per employee. Shares purchased and funded by an employee’s pre-tax
salary must remain in the plan for a minimum of 1 year. Matching shares funded by the Group must be kept in the plan for a minimum of
2 years or they will be forfeited. All permanent employees in Australia employed at the allocation date are entitled to participate in this
Plan. A derivative of this Plan and the Exempt Employee Share Plan have been made available to employees in New Zealand, Hong Kong,
China, the United Kingdom, Ireland, Jersey, Germany, Canada, South Africa and the United States of America.
Subject to the discretion of the Board, shares in the parent entity may also be allocated to selected employees in accordance with an
employee share plan on a discretionary basis having regard to special circumstances as determined by the Remuneration Committee.
Such shares may be subject to vesting and performance criteria as determined by the Board or the Remuneration Committee.
Deferred Short-Term Incentive (DSTI) Share Plan
The Group also provides DSTI awards to key management personnel and other senior executives as part of a structured STI plan and
then other high performing employees on a discretionary basis. Recipients of DSTI awards must complete specified periods of service
as a minimum before any share awards under the DSTI plan become unconditional.
Number of employee shares held
Opening balance
Shares purchased on the market
Forfeited shares reissued
Shares forfeited
Shares withdrawn
Closing balance
Fair value of shares granted through the employee share plan ($000)*
Ordinary shares
2017
2016
10,522,529
10,031,383
3,741,252
3,050,756
303,124
(256,280)
23,424
(139,873)
(3,515,568)
(2,443,161)
10,795,057
10,522,529
32,277
23,050
* Weighted average fair value of shares is determined by the closing price at the end of the day’s trading on the Australian Securities Exchange on the allocation date. The
average price per share purchased on market was AUD $10.61.
101
Phantom Share Awards Plan
The Phantom Share Awards Plan (Phantom Plan) was introduced in 2013 as an alternative to the DSTI Share Plan to employees who
are resident for tax purposes in countries where the taxation and/or legal requirements mean the DSTI Share Plan does not achieve
the most effective outcome for Computershare or those employees. Awards under the Phantom Plan are cash-settled and vest after
specified periods of service have been completed.
(b) Performance rights
Long-Term Incentive Plan
The Board has offered to eligible key management personnel and senior group executives in the Group performance rights under
long-term incentive plans.
In 2014, the Board approved the terms of a new Long-Term Incentive Plan, known as the LTI Plan, which replaces the DLI plan.
Performance rights are granted for no consideration and carry no dividend or voting rights. Each performance right carries an
entitlement to one fully paid ordinary share in Computershare Limited subject to satisfaction of performance hurdles and continued
employment over a three year performance period. Under the plan, 50% of each award of performance rights is subject to EPS hurdle
criteria and 50% is subject to TSR Performance criteria. Unvested performance rights lapse on employee’s termination, subject to
Board discretion.
Set out below are summaries of performance rights granted under the LTI Plan:
Approximate
exercise date
Exercise
price
Sep 2017
Sep 2018
Sep 2019
$0.00
$0.00
$0.00
Grant date
1 Dec 2014
1 Dec 2015
16 Dec 2016
Total
Balance at
beginning
of the year
564,529
716,916
-
1,281,445
Granted
during
the year
Exercised
during
the year
Forfeited
during
the year
Balance
at end of
the year
Exercisable
at end of
the year
-
-
750,375
750,375
-
-
-
-
-
-
-
-
564,529
716,916
750,375
2,031,820
-
-
-
-
No performance rights expired during the period covered by the above table.
The fair value of performance rights granted under the 2017 LTI plan were assessed using the following parameters:
Grant Date
Hurdle start date
Hurdle end date
Share price at grant date
Fair value at measurement date(i)
Exercise price
Expected volatility(ii)
Option life
Expected dividend yield p.a(iii)
Risk free rate p.a(iv)
2017 Plan – EPS
2017 Plan – TSR
16 Dec 2016
1 Jul 2016
30 Jun 2019
AUD$12.31
AUD $11.42
AUD $0.00
24.34%
3 years
2.82%
1.95%
16 Dec 2016
1 Jul 2016
30 Jun 2019
AUD$12.31
AUD $8.54
AUD $0.00
24.34%
3 years
2.82%
n/a
i) To allow for the TSR hurdle, a Monte Carlo simulation was used to value the performance rights. To allow for the EPS hurdle, a closed form Black-Scholes model was used
to value the performance rights.
ii) Expected volatility is based on historical daily share price for the three-year period preceding the grant date.
iii) Expected dividend yield is based on historic yield for the three-year period immediately preceding the grant date.
iv) Risk free interest rate is based on the three-year Australian Bank Bill Swap Rate at grant date.
102
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSComputershare Annual Report 2017 Deferred Long-Term Incentive Plan
The previous long-term incentive plan, known as the DLI Plan, was offered to eligible key management personnel and senior managers
in the Group. Performance rights were granted for no consideration and carry no dividend or voting rights. Under the DLI Plan
each performance right carries an entitlement to one fully paid ordinary share in Computershare Limited subject to satisfaction of
performance hurdles and/or continued employment over a five year performance period.
Set out below are summaries of performance rights granted under the plan:
Approximate
exercise date
Exercise
price
Balance at
beginning of
the year
Granted
during
the year
Exercised
during
the year
Lapsed
during
the year
Balance at
end of
the year
Exercisable
at end of
the year
Sep 2016
Sep 2016
Sep 2017
$0.00
$0.00
$0.00
700,000
200,000
950,000
1,850,000
-
-
-
-
(350,000)
(350,000)
(100,000)
(100,000)
-
-
(450,000)
(450,000)
-
-
950,000
950,000
-
-
-
-
Grant date
12 Oct 2011
4 May 2012
25 Sep 2012
Total
No performance rights expired during the period covered by the above table.
(c) Employee benefits recognised
Performance rights expense
Share plan and options expense
Aggregate employee entitlement liability (note 22 and 23)
42. REMUNERATION OF AUDITORS
2017
$000
2,240
14,430
33,081
2016
$000
416
11,593
34,173
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its network firms and non-related
audit firms:
Assurance services
Auditing or review of financial statements
– PricewaterhouseCoopers Australia
– Network firms of PricewaterhouseCoopers Australia
Other assurance services
– PricewaterhouseCoopers Australia
– Network firms of PricewaterhouseCoopers Australia
Taxation services
– Related practices of PricewaterhouseCoopers Australia
925
2,849
3,774
380
1,698
2,078
-
-
704
2,691
3,395
317
2,139
2,456
10
10
Remuneration received, or due and receivable, by auditors other than the auditor of the parent entity and its affiliates for:
Auditing or review of financial statements
220
233
103
DIRECTORS’ DECLARATION
In the directors’ opinion:
(a)
the financial statements and notes set out on pages 53 to 103 are in accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements; and
(ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2017 and of its performance for the
financial year ended on that date; and
(b)
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and
payable; and
(c) at the date of this declaration, there are reasonable grounds to believe that the members of the Closed Group identified in
note 31 will be able to meet any obligations or liabilities to which they are, or may become, subject to by virtue of the deed of
cross guarantee described in note 33.
Note 1 confirms that the financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section 295A of
the Corporations Act 2001.
Signed in accordance with a resolution of the directors.
SD Jones
Chairman
18 September 2017
SJ Irving
Director
104
Computershare Annual Report 2017 DECLARATION TO THE BOARD OF DIRECTORS
The Chief Executive Officer and Chief Financial Officer state that:
(a)
(b)
the financial records of the consolidated entity for the financial year ended 30 June 2017 have been properly maintained in
accordance with section 286 of the Corporations Act 2001; and
the financial statements, and the notes to the financial statements, of the consolidated entity, for the financial year ended
30 June 2017:
(i) comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements; and
(ii) give a true and fair view of the consolidated entity’s financial position as at 30 June 2017 and of their performance for the
financial year ended on that date.
SJ Irving
Chief Executive Officer
MB Davis
Chief Financial Officer
18 September 2017
105
INDEPENDENT AUDITOR’S REPORT
Independent auditor’s report
To the shareholders of Computershare Limited
Report on the audit of the financial report
Our opinion
In our opinion:
(a)
The accompanying financial report of Computershare Limited (the Company) and its controlled
entities (together the Group) is in accordance with the Corporations Act 2001, including:
i. giving a true and fair view of the Group's financial position as at 30 June 2017 and of its
financial performance for the year then ended
ii. complying with Australian Accounting Standards and the Corporations Regulations 2001.
(b)
the financial report and notes also comply with International Financial Reporting Standards as
disclosed in Note 1.
What we have audited
The Group financial report comprises:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
(cid:120)
the consolidated statement of financial position as at 30 June 2017
the consolidated statement of comprehensive income for the year then ended
the consolidated statement of changes in equity for the year then ended
the consolidated cash flow statement for the year then ended
the notes to the consolidated financial statements, which include a summary of significant
accounting policies
the directors’ declaration.
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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant
to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities
in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
(cid:47)(cid:76)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:79)(cid:76)(cid:80)(cid:76)(cid:87)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:68)(cid:3)(cid:86)(cid:70)(cid:75)(cid:72)(cid:80)(cid:72)(cid:3)(cid:68)(cid:83)(cid:83)(cid:85)(cid:82)(cid:89)(cid:72)(cid:71)(cid:3)(cid:88)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:51)(cid:85)(cid:82)(cid:73)(cid:72)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:54)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:47)(cid:72)(cid:74)(cid:76)(cid:86)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:17)
106
Computershare Annual Report 2017 Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Materiality
(cid:120)
For the purpose of our audit we used overall Group materiality of $17 million, which represents
approximately 5% of the Group’s profit before tax.
(cid:120) We applied this threshold, together with qualitative considerations, to determine the scope of our audit and
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the
financial report as a whole.
(cid:120) We chose Group profit before tax, because in our view it is an important financial statement metric commonly
used in assessing the performance of the Group.
(cid:120) We selected a 5% threshold based on our professional judgement, noting it is within the range of commonly
acceptable thresholds.
Audit Scope
(cid:120)
(cid:120)
Our audit focused on where the Group made subjective judgements; for example, significant accounting
estimates involving assumptions and inherently uncertain future events.
The Group operates in more than 20 countries, with the majority of its business based in 4 geographical
locations – Australia, United States, United Kingdom and Canada. The Group engagement team determined
the nature, timing and extent of work that needed to be performed by it and by component auditors operating
under instruction. We structured our audit approach as follows:
(cid:16) We audited certain entities in Australia, United States, United Kingdom and Canada due to their
financial significance to the Group.
(cid:16) We performed specified risk focused procedures on certain account balances for other entities in the
Group.
(cid:16) We carried out further procedures at the Group level, including procedures over consolidation and
preparation of the financial statements.
107
INDEPENDENT AUDITOR’S REPORT
(cid:120)
For work performed by component auditors, we determined the level of involvement required from us in
order to be able to conclude whether sufficient appropriate audit evidence had been obtained. Our
involvement included discussions, written instructions and meeting with component audit teams in the
United States, United Kingdom, Australia, Canada and Hong Kong.
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 for the current period. The key audit 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. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the Risk
and Audit Committee.
Key audit matter
How our audit addressed the key audit matter
Uncertain tax positions - Australian thin
capitalisation
(Refer to note 6 of the financial statements)
Computershare has been working with the Australian
Taxation Office (ATO) and Her Majesty’s Revenue and
Customs to renew an existing bilateral advanced
pricing arrangement in relation to remuneration paid
to the Australian Group from its subsidiaries in relation
to its ownership and licensing of certain intangible
assets. As part of that process, the ATO undertook
review activities in relation to the Group’s compliance
with thin capitalisation rules. Under Australian thin
capitalisation rules, the amount of debt used to fund
Australian operations or investments is limited. Once
certain limits are exceeded, debt deductions claimable
against Australian assessable income are disallowed.
In April 2017, the ATO issued a draft position paper to
the Group to indicate it disagreed with the basis applied
by the Group in calculating its thin capitalisation
position in the 2011 -2014 income tax years. In
particular, the ATO questioned the recognition of
certain intangible assets within the calculation.
Accordingly, the Group has disclosed a contingent
liability as at 30 June 2017.
We considered this to be a key audit matter, given the
materiality of the matter in addition to the significant
judgement required in assessing the tax position taken
and the adequacy of disclosures in the financial report
as required under Australian Accounting Standards.
Together with our tax experts, we:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
Read correspondence between the Group and
the ATO in relation to the ATO draft position
paper.
Inspected papers prepared by the Group and
the Group’s independent expert, to develop
an understanding of the impact of the ATO’s
inquiry on current tax balances.
Interviewed the Group Tax Director, Head of
Legal, Chief Financial Officer and the Group’s
independent expert to develop an
understanding of their strategy, position and
approach in relation to the ATO draft position
paper.
Considered a range of possible accounting
treatments for this matter and found that the
Group’s treatment fell within this range.
(cid:120) We further considered the adequacy of the
Group’s contingent liability disclosures in
relation to this matter in light of the
requirements of Australian Accounting
Standards.
108
Computershare Annual Report 2017 Key audit matter
How our audit addressed the key audit matter
Revenue recognition – Computershare
Mortgage Services’ (CMS) fixed fee revenue
(Refer to note 2 of the financial statements)
As part of Computershare’s appointment by UK Asset
Resolution (UKAR) to undertake its mortgage servicing
activities in 2016, it was agreed that a fixed fee would
be payable to Computershare over four years for the
provision of infrastructure to support the contract
(CMS fixed fee revenue). Under Australian Accounting
Standards, the fixed fee is to be recognised on a
percentage of completion basis. This method requires
the Group to reassess the total forecast infrastructure
cost and the current year infrastructure costs incurred
at each period end to determine the appropriate
percentage of completion.
We considered the recognition of CMS fixed fee
revenue a key audit matter given the judgement
required in determining the total forecast
infrastructure costs and the recognition of costs
incurred to date.
Impairment assessment of goodwill
(Refer to note 11 of the financial statements)
[$1.6 billion]
The Group has a goodwill balance of $1.6 billion at 30
June 2017 which represents approximately 41% of the
total assets of the Group.
For the year ended 30 June 2017, the Group performed
an impairment assessment over the goodwill balances
by:
(cid:120)
(cid:120)
Calculating the ‘Value in Use’ for each
operating segment and the Computershare
Voucher Services (CVS) cash generating unit
(CGU) using a discounted cash flow model
(the models).
Comparing the ‘Value in Use’ of each
operating segment and the CVS CGU to their
respective book values to determine the need
for any impairment.
The impairment models include future forecast cash
flows, typically for a 5 year period. A terminal growth
rate is applied in determining the terminal value.
Our procedures over the recognition of CMS fixed fee
revenue included the following:
(cid:120)
(cid:120)
(cid:120)
Agreeing the revenue recognition policies to
those applied in the prior year to assess
consistency.
Confirming that the Group had reassessed the
total infrastructure costs and obtaining a copy
of the latest projections of the total expected
infrastructure costs.
Considering the appropriateness of key
assumptions used in determining the
recognition of revenue, by:
-
-
Agreeing the total forecast
infrastructure costs to management’s
approved business plan.
Testing a sample of current year
costs incurred to assess the
appropriateness of their recognition
and noted no material exceptions.
(cid:120)
Recalculating the percentage of completion,
noting no material exceptions.
We performed the following procedures, amongst
others:
(cid:120)
(cid:120)
Assessed whether the Group’s identification of
CGUs, which are the smallest identifiable
groups of assets that can generate largely
independent cash inflows, was consistent with
our knowledge of the Group’s operations and
internal Group reporting.
Tested the mathematical accuracy of the
models’ calculations.
To evaluate the cash flow forecasts in the models for
each operating segment and CVS and the process by
which they were developed, we compared:
(cid:120)
(cid:120)
The cash flow forecasts to the Board approved
business plans and noted no material
exceptions.
Previous cash flow forecasts to actual results
to assess the historical accuracy of forecasting.
In challenging the Group’s forecasts we
determined that previous forecasts were
materially comparable to actual results.
109
INDEPENDENT AUDITOR’S REPORT
Key audit matter
How our audit addressed the key audit matter
We considered the carrying value of goodwill to be a
key audit matter as the balance is significant to the
balance sheet and there is significant judgement
involved in estimating future cash flows, particularly
with respect to determining appropriate:
To assess the assumptions and methodologies used in
the models, in particular those relating to the discount
rates, cash flow forecasts and terminal growth rates
applied, we:
(cid:120) Worked with PwC valuation experts to
(cid:120)
(cid:120)
(cid:120)
Discount rates
Five-year cash flow projections (Cash flow
forecasts)
Earnings growth rates applied beyond the
initial five-year period (Terminal growth
rates)
The Group performed a sensitivity analysis for each
operating segment and the CVS CGU, and other than
the Computershare Voucher Services (CVS) did not
identify any impairment.
For the CVS CGU, the Group recognised an impairment
charge of $11.3m at 30 June 2017, due to the previously
announced implementation of the new UK Tax Free
childcare scheme.
determine a range of acceptable discount
rates, with reference to valuations of similar
companies and other relevant external data,
and compared this range to the discount rates
adopted by the Group. In instances where
there were variances in discount rates, we
noted that adequate headroom remained in
each of the relevant models.
(cid:120)
Tested whether cash flow forecasts and
terminal growth rates used in the models were
consistent with our knowledge of current
business conditions, externally derived data
(where possible) and our understanding of the
business.
In relation to CVS, we agreed the impairment charge
recognised with the discounted cash flow model used to
assess impairment for CVS.
For each operating segment (except CVS), we
performed a sensitivity analysis by reducing the cash
flow forecasts and terminal growth rates, and
increasing the discount rates in the models, within a
reasonably foreseeable range. We noted that headroom
remained under each of the scenarios we tested.
For CVS, we performed a sensitivity analysis for the
cash flow forecasts and discount rates in the model,
within a reasonable foreseeable range. We noted that
the resulting valuation was not materially different to
the Group’s valuation.
We also considered the adequacy of the Group’s
financial report disclosures in relation to this matter in
light of the requirements of Australian Accounting
Standards and were satisfied they meet the disclosure
requirements.
Other information
The directors are responsible for the other information. The other information comprises the
Overview, Corporate Governance Statement, Directors' Report and Further Information included in
the Group’s annual report for the year ended 30 June 2017 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.
110
Computershare Annual Report 2017 In connection with our audit of the financial report, our responsibility is to read the other information
identified above 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 Note 1, the directors also state, in accordance with Accounting Standard AASB 101
Presentation of Financial Statements, that the financial statements comply with International
Financial Reporting Standards.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
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 the 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 the financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our
auditor's report.
111
INDEPENDENT AUDITOR’S REPORT
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 39 to 50 of the directors’ report for the
year ended 30 June 2017.
In our opinion, the remuneration report of Computershare Limited for the year ended 30 June 2017
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.
PricewaterhouseCoopers
Anton Linschoten
Partner
Melbourne
18 September 2017
112
Computershare Annual Report 2017 SHAREHOLDER INFORMATION
This section contains additional information required by the Australian Securities Exchange Limited listing rules not disclosed elsewhere
in this report.
SHAREHOLDINGS
Substantial Shareholders
The following information is extracted from the Company’s Register of Substantial Shareholders.
Name
Christopher John Morris
Class of shares and voting rights
Number of
ordinary
shares
35,131,000
Fully paid
percentage
6.43%
At 8 September 2017 there were 36,640 holders of ordinary shares in the Company. The voting rights attaching to the ordinary shares
set out in clause 4 of the Company’s Constitution are:
(a)
the right to receive notice of and to attend and vote at all general meetings of the Company;
(b)
the right to receive dividends; and
(c)
in a winding up or a reduction of capital, the right to participate equally in the distribution of the assets of the Company (both
capital and surplus), subject to any amounts unpaid on the Share and, in the case of a reduction, to the terms of the reduction.
Distribution of shareholders of shares as at 8 September 2017
Ordinary shareholders
Size of holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total shareholders
There were 610 shareholders holding less than a marketable parcel of 37 ordinary shares as at 8 September 2017.
Twenty Largest Shareholders of ordinary shares as at 8 September 2017
Ordinary shares
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Limited
Citicorp Nominees Pty Limited
Mr Chris Morris
National Nominees Limited
Welas Pty Ltd
BNP Paribas Nominees Pty Ltd
Penelope Maclagan
Citicorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
BNP Paribas Noms Pty Ltd
Computershare Clearing Pty Ltd
Argo Investments Limited
Australian Foundation Investment Company Limited
Ms Michele Jean O’Halloran
CPU Share Plans Pty Limited
AMP Life Limited
HSBC Custody Nominees (Australia) Limited
National Nominees Limited
UBS Nominees Pty Ltd
Total
17,245
15,613
2,267
1,386
129
36,640
%
26.79
15.53
6.62
6.43
5.46
3.93
2.35
2.11
1.92
1.84
1.60
1.11
0.90
0.85
0.81
0.76
0.36
0.34
0.21
0.20
Number
146,311,559
84,784,178
36,138,818
35,131,000
29,832,901
21,450,000
12,839,989
11,543,868
10,487,895
10,052,929
8,730,485
6,079,619
4,901,166
4,660,000
4,403,218
4,123,891
1,962,105
1,829,440
1,155,000
1,092,500
437,510,561
80.12
113
SHARE REGISTRY
Computershare Investor Services Pty Limited
Yarra Falls
452 Johnston Street
Abbotsford VIC 3067
PO BOX 103
Abbotsford VIC 3067
Telephone
(within Australia) + 61 3 9415 4222
+ 61 3 9473 2500
Facsimile
1300 307 613
INVESTOR RELATIONS
Yarra Falls
452 Johnston Street
Abbotsford VIC 3067
Telephone +61 3 9415 5000
Facsimile +61 3 9476 2500
Email
investor.relations@computershare.com.au
Website
www.computershare.com
CORPORATE DIRECTORY
DIRECTORS
Simon David Jones
(Chairman)
Stuart James Irving
(President and Chief Executive Officer)
Tiffany Lee Fuller
Markus Erhard Kerber
Penelope Jane Maclagan
Christopher John Morris
Arthur Leslie Owen
Joseph Mark Velli
COMPANY SECRETARY
Dominic Matthew Horsley
REGISTERED OFFICE
Yarra Falls
452 Johnston Street
Abbotsford VIC 3067
Telephone +61 3 9415 5000
Facsimile +61 3 9476 2500
STOCK EXCHANGE LISTING
Australian Securities Exchange
SOLICITORS
Minter Ellison
Level 23, Rialto Towers
525 Collins Street
Melbourne VIC 3000
AUDITORS
PricewaterhouseCoopers
2 Riverside Quay
Southbank VIC 3006
114
Computershare Annual Report 2017 COMPUTERSHARE
HEAD OFFICE
Computershare Limited
ABN 71 005 485 825
Yarra Falls
452 Johnston Street
Abbotsford Victoria 3067
Australia
Telephone: +61 3 9415 5000
Facsimile: +61 3 9473 2500
The Annual Report
is available online at
www.computershare.com