More annual reports from Computershare:
2023 ReportPeers and competitors of Computershare:
FDM GroupC
O
M
P
U
T
E
R
S
H
A
R
E
A
N
N
U
A
L
R
E
P
O
R
T
|
2
0
2
1
ANNUAL REPORT | 2021
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:
The financial report was authorised
for issue by the directors on
20 September 2021. The company
has the power to amend and reissue
the financial report.
Computershare Limited
Yarra Falls
452 Johnston Street, Abbotsford
Victoria 3067 Australia
CONTENTS
OVERVIEW
FINANCIALS
Financial Highlights ................................................................ 3
Consolidated Statement of Comprehensive Income ....65
Financial Calendar .................................................................. 3
Consolidated Statement of Financial Position ...............66
Chairman’s Report .................................................................. 4
Consolidated Statement of Changes in Equity...............67
CEO’s Report ............................................................................ 6
Consolidated Cash Flow Statement ..................................68
Computershare at a glance .................................................. 9
Notes to the Consolidated Financial Statements .........69
Key Financial Metrics ...........................................................11
Issuer Services .......................................................................13
Employee Share Plans .........................................................14
Mortgage Services ................................................................15
Business Services ..................................................................16
Sustainability ..........................................................................17
Community ...............................................................................19
People ......................................................................................21
Group operating overview ...................................................23
Business strategies and prospects ....................................25
GOVERNANCE
Corporate Governance Statement ....................................28
Directors’ Report ....................................................................41
Auditor’s Independence Declaration ................................64
REPORTS
Directors’ Declaration ....................................................... 124
Declaration to the Board of Directors .......................... 125
Independent Auditor’s Report ........................................ 126
FURTHER INFORMATION
Shareholder information .................................................. 132
Corporate directory ........................................................... 133
The Chairman’s Report, CEO’s Report, Group Operating Overview and Business Strategies and Prospects comprise our Operating and
Financial Review (OFR) and form part of the Directors’ Report. The information included in the Overview section of the report contains
various measures which are non-IFRS in nature and not aligned to the Financial section of the Annual Report (Page 65 – 123).
Overview
FINANCIAL HIGHLIGHTS
Statutory results
Total revenue
Net profit after non-controlling interests (NCI)
Statutory earnings per share#
Management adjusted results
Management EBITDA
Management EBIT
Management net profit after NCI
Management earnings per share#
June 2021
June 2020
% Change
2,283.2 million
2,277.3 million
189.0 million
232.7 million
33.77 cents
42.55 cents
628.2 million
646.4 million
446.1 million
498.0 million
283.7 million
303.8 million
50.71 cents
55.57 cents
0.3%
-18.8%
-20.6%
-2.8%
-10.4%
-6.6%
-8.7%
-7.3%
5.3%
43.3%
Management earnings per share (in constant currency)
52.03 cents
56.12 cents
Balance sheet
Total assets
Total shareholders’ equity
Performance indicators
5,251.9 million
4,989.8 million
2,279.6 million
1,590.3 million
Free cash flow (excluding SLS advances)
260.1 million
505.9 million
-48.6%
Net debt to management EBITDA (excluding non-recourse debt)*
1.07 times
1.93 times
Down 0.86 times
Return on equity*
Staff numbers
16.00%
12,009
19.50%
Down 350bps
12,647
The sum of totals and percentages may not add up to 100% owing to rounding.
For a reconciliation between statutory and management adjusted results, refer to note 4 in the notes to the financial statements.
* 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 the 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. Net debt excludes capitalised leases.
Return on equity assumes the rolling average of the twelve months equity ending 30 June 2021 and reflects the impact of the 2021 rights issue
in respect of the last three months of the year.
Where constant currency (CC) references are used in this report, constant currency equals FY21 results translated to USD at FY20 average
exchange rates. FY21 Management earnings per share of 52.03cps assumes weighted average number of shares (WANOS) of 540,879,593.
FY20 Management earnings per share of 56.12cps assumes WANOS of 541,420,844.
# FY20 Management and Statutory EPS has been restated by adjusting the weighted average number of ordinary shares in order to incorporate
the bonus element in the 2021 rights issue, as per AASB 133.
FINANCIAL CALENDAR
2021
2022
18 August
Record date for final dividend
9 February
13 September
Final dividend paid
11 November
The Annual General Meeting of
Computershare Limited
ABN 71 005 485 825
9.00am virtual meeting
3 | COMPUTERSHARE | ANNUAL REPORT | 2021
Announcement of
financial results for
the half year ending
31 December 2021
CHAIRMAN’S
REPORT
YEAR IN REVIEW*
This time last year, most forecasters expected the narrative for FY21 to be one
of fully fledged recovery and economic rebound; a welcome return to normality
as communities moved past the peak risks posed by the pandemic. However,
despite some progress with vaccines and some easing of lockdowns, many of the
same concerns have persisted, and some of our businesses have continued to be
impacted by reduced activity.
With this in perspective, Computershare’s overall progress throughout FY21 has
been very pleasing.
Yes, headwinds have continued to constrain our bottom line. Central banks have
maintained historically low cash rates despite emerging inflation indicators.
In the US, the expected upturn in our Mortgage Servicing, Bankruptcy and Class
Action opportunities has been delayed further by government policy settings
and slowdowns in the courts.
Computershare’s underlying businesses remain strong. Our Issuer Services
business is a great example of the progress we continue to make, with revenues
in Corporate Actions, Stakeholder Relations and Governance Services all
increasing significantly. Earnings and operating margin in Employee Share Plans
have also expanded.
Across the entire Group, we have seen our work to respond to changing
circumstances bearing fruit – second half earnings were up 39% compared to
the first half. As challenging as the current operating environment may be, when
the economic cycle moves back in our favour, we are well-positioned to take full
advantage.
As in FY20, we have continued to be transparent, issuing regular updates to
guidance and hitting those revised numbers. We continue to use our strong
liquidity to support our shareholders, maintaining our dividend at 23 cents, 60%
franked, over an increased number of shares on issue following the rights issue.
As we moved into FY22, we expected to be able to move the majority of our
employees safely back into our offices and operations centres. Those plans, by
and large, have been tempered by the need for a more cautious approach. In
some locations, like the UK and Hong Kong for example, we are implementing a
careful and gradual return to offices. Those who have returned are following a
range of protocols to protect their health and wellbeing. We expect this program
to continue across more locations in the next few months.
Simon Jones
Chairman
Management Revenue
$2.3bn
DOWN 0.8%
Management Revenue ex MI
$2.2bn
UP 3.6%
Management EBIT ex MI
$336.4m
UP 12.6%
Margin Income (MI)
$104.3m
DOWN 47.7%
Management EPS1
52.03 cps
DOWN 7.3%
VS. GUIDANCE
-8%
UP 0.7%2
Final Dividend Per Share (AUD)
23.0 cps
MAINTAINED
1
Management EPS of 52.03 cps is calculated on a pre-rights issue basis. Weighted average number of shares (WANOS) was 540,879,593, down 7.3% vs
FY20 Management EPS of 56.12. FY21 Management EPS including rights issue is 50.30 cps. FY20 Management EPS adjusting for the bonus element in
the 2021 rights issue is 55.57 cps.
2
FY21 Management EPS revised guidance assumed EPS would be down around 8.0% vs FY20 Management EPS of 56.12. This is a 70 basis point
improvement (7.3% v 8.0%).
*
All references to Management Results in the Chairman’s Report are in constant currency unless otherwise stated.
4
CHAIRMAN’S REPORT
The expected impact of CCT in FY22 will be slightly negative –
FY21’s rights issue will impact our management earnings per
share by about 6 cents. On the plus side, we expect the Wells
Fargo acquisition to be completed midway through 2Q22 and
contribute about 4 cents to Management EPS through the
remaining eight months of the year.
We are using today’s rate curve as the basis of our margin
income guidance, and while it remains flat during FY22 it
forecasts higher rates in years to come. Due to a range
of factors, including the addition of the considerable cash
balances in CCT and the extension of our Deposit Protection
Services contract in the UK, we expect FY22 margin income
to increase from our initial guidance in February 2021 of
$80 million to $145 million. Any increases in rates will only see
this number improve further.
ACKNOWLEDGEMENTS
Our Board is itself a great example of the benefits of diversity.
I’d like to acknowledge my fellow directors for their invaluable
support and the experience, insight and expertise they bring to
the Group.
Finally, I would like to especially thank Stuart Irving, our CEO
and President, for the exemplary leadership he has provided
throughout one of our most difficult years. I know that his
commitment to protecting our Company – our people, our
businesses and our shareholders – has meant many long
hours for him. His dedication is appreciated, as is the great
contribution he continues to make to Computershare’s
performance and our distinctive culture.
Simon Jones
Chairman
Looking back, the strain on our people has been prolonged
further than anyone envisaged – the majority have spent at
least 18 months remote working, while those on site have
been following strict hygiene controls. The Board and our
executive team are immensely grateful to our employees for
their determination and ingenuity. The word ‘resilience’ is
often used, but it has never been so pertinent as now. Despite
substantial peaks in demand, our teams found new ways to
collaborate and keep delivering for our clients and customers,
week in and week out.
One of the many corporate actions we carried out in FY21 was,
of course, our own rights issue, helping to fund the largest
acquisition in our Company’s history. We look forward to
welcoming more than 2,000 new employees from Wells Fargo
to our Computershare Corporate Trust (CCT) business and
thank our shareholders for their vote of confidence in this new
venture. Integrating this acquisition is one of our main priorities
for the year ahead.
The recent Intergovernmental Panel on Climate Change (IPCC)
report made for sobering reading. While we have already
taken significant steps to reduce our carbon footprint, we
have engaged a specialist external advisor, Climate Partner, to
help us drive our climate action strategy. We intend to set an
ambitious date for becoming carbon neutral and are already
working to fulfil that future commitment. This is explained
further in our Sustainability report on pages 17 to 18.
We also continue to deliver on our commitment to making
Computershare a better place to work for all our employees
and providing equal opportunities for everyone, regardless of
gender, ethnicity, sexual orientation or age. We continued to
expand our employee resource groups, for instance, extending
our Women4Women network into Europe, and establishing the
Black Leadership Group. You can find more details about our
ongoing work in this area on pages 35 to 37.
OUTLOOK
We enter FY22 with renewed energy and confidence. We will
maintain our focus on disciplined execution, exercising careful
cost controls, and investing our strong free cash flow into
growth assets and new technology, balanced with a responsible
capital structure and dependable returns for shareholders.
We expect our current businesses (without the contribution
of the new Corporate Trust business, CCT) to contribute an
extra 4.2% in Management EPS. This is due to a combination
of organic growth and cost-out programs, tempered by some
wage inflation.
5 | COMPUTERSHARE | ANNUAL REPORT | 2021
CEO’S REPORT
Stuart Irving
CEO
RETURNING TO EARNINGS GROWTH, WELL POSITIONED FOR AN UPTURN*
We continue to make good progress executing our plans to build stronger, more efficient businesses with greater scale and
capabilities to leverage positive growth trends.
We delivered a particularly strong operating performance in the second half of the year – our earnings were up 39% compared
to the first half. Our second half was effectively the equal best operating result, excluding margin income, (MI) in the Company’s
history. This strength enabled us to deliver on the upgraded guidance we provided in February.
Certainly, several significant headwinds we faced in 2H20 persisted through FY21 – as a result, Management EPS was down
7.3% overall.
Continued record low interest rates kept margin income down – year on year, down by almost half. Indeed, MI has been the main
driver of the decline in our earnings and, frustratingly, still obscures the underlying story of our continued growth. The repeated
extensions of the government moratorium on foreclosures also impacted the servicing opportunities for our US Mortgage Services
business; another material hit to our earnings.
Despite this, total management revenue excluding MI increased by 3.6% in constant currency terms. Disciplined execution and
careful cost controls saw our operating margins expand too, leaving aside the effect of interest rates.
Issuer Services and Employee Share Plans, two of our flagship operating businesses, both performed exceptionally well. Both saw
an uplift in fee revenues and higher transaction levels coming off the back of stronger equity markets.
Issuer Services grew revenues across all the major divisions. Register Maintenance enjoyed a recovery in shareholder paid fees and
new major client wins as well as an increase in market share. The number of shareholder accounts we manage around the world
increased slightly year on year. Net client wins were 277: an increase on 82 net wins during FY20. Continued growth in market
share validates our offer, along with our work to add and extend digital channels for the end customer.
In addition, we are successfully building scale in the new Governance Services adjacencies, Registered Agent and Entity
Management. Both of these new complementary revenue pools benefit from our ability to leverage our core registry competencies.
The key metric of ‘Entities Under Management’ grew 14% during the year, with new client wins buttressed by the underlying
resilience of our book.
Our ability to provide a comprehensive suite of solutions and well-managed services in combination is a clear competitive strength.
These are high-quality businesses with room for sustained growth in large, addressable markets. They provide steady, recurring
annuity type revenues without exposure to margin income.
Corporate Actions activity increased in all our major regions as clients raised capital to strengthen their balance sheets (most
markedly in the UK), IPO markets recovered (especially in Hong Kong), and M&A deals continued to flourish. In total, Corporate
Actions revenues excluding MI increased by 35%.
Stakeholder Relationship Management, another event-based business, also performed well. Revenues increased 45%, with a very
strong first half where we completed several proxy campaigns for Mutual Fund clients. These projects tend to be irregular and
non-recurring, so we don’t expect the same level of contribution from Corporate Actions and this business in FY22.
Employee Share Plans delivered a robust result. Earnings (excluding MI) were up 68% and more than doubled in the second half
of the year compared to the same period last year. Recurring fee revenues increased by 4%, excluding MI. Operating margin
expanded by 790 basis points, excluding the costs of the Equatex integration.
*
All References to Management Results in the CEO’s Report are in constant currency unless otherwise stated.
6
CEO’S REPORT
Transactional revenues recovered as equity markets rallied. These fees were down 7.4% at the halfway stage and finished the year
up 16%. They are now above pre-pandemic levels, elevating our second-half performance.
The structural rise of equity-based remuneration is clearly reflected in these results. Units under administration are up 13% to
27 billion, as more companies issued equity deeper into their organisations to attract, retain and reward employees. We are well
placed to benefit from this ongoing growth trend.
We are continuing to roll out our market-leading platform, EquatePlus, across Europe and Australia. Over three million participants
are now live on the platform.
Business Services delivered a disappointing result. Revenue was down 15%, and EBIT excluding MI fell by 34%. Within this,
Canadian Corporate Trust performed consistently; Bankruptcy reported strong revenue growth, up 37%, although this was first
half driven; Class Actions declined by 31%.
Economic stimulus packages effectively delayed the bankruptcies we expected to see during the year; activity was very much
reduced in the second half. We expect volumes to recover over time but will likely remain subdued in FY22.
Our Class Actions business is in a similar position, with very few cases progressing through the courts. While long-term growth
trends remain (6% growth p.a. in the number of actions), once again, the outlook for FY22 is subdued.
Our US Mortgage Services business saw the biggest adverse impact from the pandemic during FY21. The CARES Act moratorium
on mortgage foreclosure impacted a number of revenue lines within Mortgage Servicing and negatively impacted our ability to
secure new special servicing mandates.
The prolonged period of record low rates also drove elevated levels of loan run-off due to increased levels of refinancing and in
July last year, we took the decision to shorten the amortisation period from nine years down to eight for the performing MSRs we
own in the US.
Moreover, our fulfilment business endured a challenging year, incurring delays to the implementation of both a new operating
platform and newly secured client contracts.
Despite all of these significant headwinds, the US business generated positive EBIT excluding MI supported by gains related to
certain MSR transactions, including capital light transactions converting owned MSR to sub-servicing.
The unpaid principal balance (UPB) of the loans we service was down 6% to $112 billion. Within this, the value of the loans we
sub-serviced increased by 16%. The mix is improving. Performing sub-servicing UPB grew by 28%. We now sub-service over
290,000 loans.
We also expanded our recapture capability, which is our defence against losing loan servicing from refinancing. Consequently,
we retained the servicing for $215 million of loans that would otherwise have moved to our competitors.
Having said all of that, we still view the return on capital in this business to be too low. We are very focused on seeing this improve.
Whilst the moratorium on foreclosures has come to an end, the federal regulatory body has kept a range of relief measures in place
until the end of the calendar year. When these measures come to an end, we expect to add high margin, non-performing servicing
work, together with its associated ancillary fees. We have a clear recovery plan, but there is a lot of work to do.
I’d like to move on to our new business now. As I mentioned earlier, our goal is to build stronger businesses with greater leverage to
long-term growth trends. A highlight of the year was our announcement in March of the agreement to acquire the assets of Wells
Fargo Corporate Trust Services, a leading US provider of trust and agency services to government and corporate clients. We are on
track to complete this purchase in the next few months. The business will be renamed Computershare Corporate Trust (CCT).
This acquisition accelerates our scale in the attractive US corporate trust market. It also provides Computershare with greater
exposure to long-term growth trends in trust and securitisation products as well as leveraging the interest rate environment.
I would like to thank the shareholders who supported the rights issue that funded the greater part of this acquisition. We have a
clear plan to integrate and grow this business and enhance earnings for shareholders into the future.
With high levels of recurring revenue and capital-light businesses, Computershare continues to generate strong free cash flow.
The year-end leverage measure of 1.07 times net debt to EBITDA reflects the beneficial impact of our completed capital raise.
We expect this ratio to increase towards the top of our neutral target zone once the CCT acquisition completes and then reduce
over time.
We will continue to balance growth investments with providing dependable returns for shareholders. The Board has maintained the
final dividend at AU 23 cents per share, 60% franked, over an increased number of shares on issue following the rights issue.
7 | COMPUTERSHARE | ANNUAL REPORT | 2021
FY22 OUTLOOK – PROFITABLE GROWTH*
We said in February that we expected the 1H FY21 results to mark the bottom of the earnings cycle for Computershare and that
positive earnings growth was underway. I am encouraged to say we are progressing in line with this guidance.
In FY22, Management EPS is expected to increase by around 2% in constant currency after accounting for the dilutive impact of
the rights issue.
We are making good progress in executing our growth strategies despite challenges in some of our business lines.
Issuer Services and Employee Share Plans should continue to perform well, although we do expect a more subdued performance in
the more cyclical, event-based businesses. The CCT acquisition should complete in November and should be earnings accretive on
a full-year basis.
This acquisition also substantially increases client balances under management. Following the extension of our UK Deposit
Protection Service contract through to 2026, we have additional flexibility to add duration to term funds in the UK. Given these
factors, margin income for the Group in FY22 is expected to increase to $145 million.
We will continue to manage our costs very carefully at Computershare. Our cost-out programs should deliver a further $80 million
of gross savings over the next three years. We will use these savings to mitigate rising wage inflation across the Group, particularly
in the US.
Our guidance is based on more than 4% EPS growth in our existing business lines with a second-half weighting. We have
high-quality businesses with scale and strong recurring revenues in the Group. Event activity may fluctuate, and we have no
influence over global interest rate settings but, regardless, we have returned to positive earnings growth. And we have significantly
increased our optionality for higher MI when rates do start to rise.
I am truly appreciative of the great efforts made by all of my colleagues across Computershare in delivering these results. FY21 was
a challenging year for everybody, irrespective of location. Your determination to overcome adversity and deliver exceptional client
outcomes time and time again exemplifies the values that define Computershare.
We also lost a number of colleagues to Covid during the year and we extend our condolences to their loved ones.
US: Candyo Knowles, Loan Services (5 years’ service), Carolyn Bisbal, Loan Services (seven months), Larry Stark, Technology
(20 years), Rini Westfall-Early, Loan Services (5 years).
EMEA: Jackie Arthurs, Loan Services UK (34 years), Jolanda Cloete, Issuer Services ZA (21 years), Hermina Nel, Issuer Services ZA
(6 years).
To Simon Jones and the other directors, thank you for your support and counsel. I appreciate your thoughtful and consistent
contributions made during many virtual Board meetings across several time zones.
Finally, I would like to acknowledge our shareholders for their commitment as we continue to build a strong platform for
Computershare’s long-term growth and profitability.
Stuart Irving
Chief Executive Officer and President
*
All References to Management Results in the CEO’s Report are in constant currency unless otherwise stated.
8
COMPUTERSHARE AT A GLANCE
STAFF NUMBERS IN EACH BUSINESS LINE
Issuer
Services
4,019
Mortgage
Services
3,000
Corporate and
Technology
2,684
9 | COMPUTERSHARE | ANNUAL REPORT | 2020
BarcelonaParisRotterdamLondonDoxford CopenhagenSkiptonDublinBristolJerseyMadridTurinEdinburghStockholmMonaghanMunichRomeZurichOsloWarsawNew JerseyNew YorkBostonMontrealTorontoManilaJohannesburgHong KongMaroochydoreBrisbaneAucklandCalgaryVancouverSan FranciscoLos AngelesSydneyMelbourneAdelaidePerthPhoenixLouisvilleChicagoDenverCollege StationBeijing COMPUTERSHARE AT A GLANCE
Employee
Share Plans
996
Communication
Services
844
Business
Services
466
10
BarcelonaParisRotterdamLondonDoxford CopenhagenSkiptonDublinBristolJerseyMadridTurinEdinburghStockholmMonaghanMunichRomeZurichOsloWarsawNew JerseyNew YorkBostonMontrealTorontoManilaJohannesburgHong KongMaroochydoreBrisbaneAucklandCalgaryVancouverSan FranciscoLos AngelesSydneyMelbourneAdelaidePerthPhoenixLouisvilleChicagoDenverCollege StationBeijing KEY FINANCIAL METRICS
Management
revenue
2356.5
2300.9
2322.8
2281.2
Management
EBITDA
674.9
622.6
646.4
628.2
2114.0
540.8
17
18
19
20
21
Management
EPS
70.24
63.38
54.41
55.57
50.71
17
18
19
20
21
Cash flow
from
operations
514.1
457.7
608.8
286.8
306.6
17
18
19
20
21
Net Operating
Cash Flow
excluding
SLS advances
594.4
453.0
420.3
411.5
375.4
n
o
i
l
l
i
m
D
S
U
s
t
n
e
c
D
S
U
n
o
i
l
l
i
m
D
S
U
n
o
i
l
l
i
m
D
S
U
17
18
19
20
21
Statutory
EPS
76.57
55.17
48.76
42.55
33.77
17
18
19
20
21
Dividend
per share
46
46
44
40
36
17
18
19
20
21
Net Debt to
EBITDA ratio
excluding
non-recourse
SLS Advance
debt
1.84
1.93
1.60
1.33
1.07
n
o
i
l
l
i
m
D
S
U
s
t
n
e
c
D
S
U
s
t
n
e
c
D
U
A
s
e
m
T
i
17
18
19
20
21
17
18
19
20
21
11 | COMPUTERSHARE | ANNUAL REPORT | 2021
REVENUE
BY PRODUCT
EBITDA BY
PRODUCT
REVENUE
BY REGION
EBITDA BY
REGION
Issuer Services
Mortgage Services
& Property Rental Services
Corporate & Technology
Communication Services
& Utilities
Business Services
Employee Share Plans
& Voucher Services
Issuer Services
Mortgage Services
& Property Rental Services
Corporate & Technology
Communication Services
& Utilities
Business Services
Employee Share Plans
& Voucher Services
United States
Canada
Australia and
New Zealand
Asia
United Kingdom,
Channel Islands and Africa
Continental Europe
United States
Canada
Australia and
New Zealand
Asia
United Kingdom,
Channel Islands and Africa
Continental Europe
43%
26%
<1%
7%
9%
14%
44%
18%
10%
5%
8%
14%
52%
8%
9%
7%
20%
4%
55%
13%
4%
11%
14%
3%
12
ISSUER
SERVICES
SUCCESSFULLY GROWING INTO
NEW ISSUER SERVICES MARKETS
Naz Sarkar,
Global Head
Issuer Services
Issuer Services is our largest business, contributing 43% of total revenues, with a leading
presence in every region. At its core are our Register Maintenance and Corporate Actions
businesses, which offer clients deep expertise in international markets to guide them through
regulatory requirements and highly complex transactions. In FY21, Issuer Services grew revenues
across all major business lines. Register Maintenance enjoyed a recovery in shareholder paid
fees, new client wins and increased market share. Corporate Actions volumes increased in all our
major regions as a result of clients raising capital, improved IPO markets, especially in Hong Kong,
and strong M&A activity. In addition, we are successfully building scale in the new Governance
Services adjacencies, Registered Agent and Entity Management. Our ability to provide a full suite
of solutions and managed services in a combined offer is a clear competitive strength.
KEY ACHIEVEMENTS
277
registry global net client wins
Managed
38.1 MILLION
shareholder accounts
FINANCIAL RESULTS
Revenue breakdown
Register Maintenance*
Corporate Actions*
Stakeholder Relationship Management
Governance Services1
Margin Income
Total revenue
Mgmt EBITDA
Mgmt EBITDA margin
Mgmt EBIT ex. Margin Income
Mgmt EBIT ex. Margin Income Margin
FY21 CC
$645.3
$126.4
$85.5
$74.2
$43.8
$975.1
$273.9
28.1%
$227.1
24.4%
FY20 Actual
CC Variance
$625.1^
$93.4
$58.7
$38.9^
$78.7
$894.7
$260.5
29.1%
$179.8
22.0%
+3.2%
+35.3%
+45.7%
+90.7%
-44.3%
+9.0%
+5.1%
-100bps
+26.3%
+240bps
Units Under Management has
grown 14% during the year,
from 112,000 to 127,000 units
1,500
new entities under
management from FY21
new wins (in total 3,000
including Verbatim portfolio),
now operating in 8 different
countries
FY22 OUTLOOK
FY22 PRIORITIES
FY22 OUTLOOK
FY22 PRIORITIES
Ongoing momentum in Governance Services
revenues
Corporate Actions and Stakeholder
Relationship Management event-based
revenues not expected to repeat at same levels
Inflationary cost pressures in operational
centres in key markets
Ongoing investment in front office capabilities
to leverage over 10,000 sticky and
long-standing client relationships across a
range of products and services
Invest in product innovation to create market
leading client and end-user experience
Drive organic growth in our adjacent market
segments to broaden product offering and
expand share of wallet:
> Registered
Agent
> Private
Markets
> Managed Company
Secretarial services
Constant currency (CC) equals FY21 results translated to USD at FY20 average exchange rates.
* Revenue excluding Margin Income
1 Previously referred to as “Issuer Services – Other” and includes Registered Agent and Company Secretarial services.
^ Reclassification of $0.7m from Register Maintenance to Governance Services in FY20.
13 | COMPUTERSHARE | ANNUAL REPORT | 2021
Recent client wins showing positive market
momentum and driving improvement in fees
excluding margin income
Complete the roll out of EquatePlus platform in
Europe and Australia and commence upgrades in
Asia and North America
Upgraded synergies forecast from the Equatex
acquisition, although increased cost to deliver
and slight delay in achievement as the program
expands outside of Europe
Growth in units under administration underpins
expected growth in trading revenues
Invest in product innovation and service
excellence to create market leading customer
and user experience
Continue to drive organic growth and penetration
at the client level, increasing participant numbers
and units under administration
EMPLOYEE
SHARE PLANS
STRONG REVENUE GROWTH AND
MARGIN EXPANSION
Computershare leverages local and global expertise to provide full-service employee
share plan solutions that support the complex requirements of our clients and their
share plan participants. Employee Share Plans more than doubled earnings (excluding
margin income) in the second half of the year compared to the same period last year.
We are making good progress implementing our market-leading platform EquatePlus
across Europe and Australia, with over three million participants now live. Transactional
revenues recovered and exceeded pre-pandemic levels in the second half as equity
markets rallied and units under administration continued to grow as more companies
issued equity deeper into their organisations.
FINANCIAL RESULTS
Revenue breakdown
Fee revenue
Transactional revenue
Other revenue
Margin income
Total revenue
Mgmt EBITDA
Mgmt EBITDA margin
Mgmt EBIT ex. Margin Income#
Mgmt EBIT ex. Margin Income Margin#
FY21 CC
$138.5
$154.2
$4.0
$11.9
$308.5
$78.1
25.3%
$69.0
22.6%
FY20 Actual
CC Variance
$133.2*
$133.2*
$11.2
$12.5
$290.1
$55.8
19.2%
$41.0
14.7%
+4.0%
+15.8%
-64.3%
-4.8%
+6.3%
+40.0%
+610bps
+68.3%
+790bps
Francis Catterall,
Global Head
Employee Share Plans
KEY ACHIEVEMENTS
7%
net growth in new clients
Upgrades to EquatePlus
largely complete in Europe
and now commenced in
Australia, with over three
million participants on
the platform
Outstanding shares/options/
units under administration
increased 13% YoY to
$27 billion
FY22 OUTLOOK
FY22 PRIORITIES
FY22 OUTLOOK
FY22 PRIORITIES
Ongoing momentum in Governance Services
revenues
Corporate Actions and Stakeholder
Relationship Management event-based
revenues not expected to repeat at same levels
Inflationary cost pressures in operational
centres in key markets
Ongoing investment in front office capabilities
to leverage over 10,000 sticky and
long-standing client relationships across a
range of products and services
Invest in product innovation to create market
leading client and end-user experience
Drive organic growth in our adjacent market
segments to broaden product offering and
expand share of wallet:
> Registered
> Private
> Managed Company
Agent
Markets
Secretarial services
Recent client wins showing positive market
momentum and driving improvement in fees
excluding margin income
Complete the roll out of EquatePlus platform in
Europe and Australia and commence upgrades in
Asia and North America
Upgraded synergies forecast from the Equatex
acquisition, although increased cost to deliver
and slight delay in achievement as the program
expands outside of Europe
Growth in units under administration underpins
expected growth in trading revenues
Invest in product innovation and service
excellence to create market leading customer
and user experience
Continue to drive organic growth and penetration
at the client level, increasing participant numbers
and units under administration
Constant currency (CC) equals FY21 results translated to USD at FY20 average exchange rates.
* Reclassification of $4.3m from fee revenue to transactional revenue in FY20.
# FY21 impacted by $5.9m of one-off regulatory costs associated with Brexit transition. Adjusted EBIT ex MI $74.9m +82.7%, margin 24.6%, +990bps.
14
MORTGAGE
SERVICES
US IMPACTED BY PANDEMIC
DRIVEN HEADWINDS; UK COST
OUT ON TRACK
Computershare offers a comprehensive range of services across the mortgage services value
chain in the US and UK. FY21 presented a range of challenges for us to manage. In the US, a
prolonged period of record low rates drove elevated levels of run-off, whilst pandemic related
restrictions impacted revenues and our ability to board new special servicing loans to replace
the run-off. As a result, total Unpaid Principal Balances (UPB) were down 6% to $112 billion in
the US. Within this, the value of the loans we sub-serviced increased by 16% and performing
sub-servicing UPB grew by 28%. EBIT excluding MI margin was positive at $2.4m after including
the gains related to certain MSR transactions and the increased amortisation. In the UK,
revenues were impacted by the ending of the UKAR fixed fee arrangement, however these were
largely offset by cost savings delivered as part of our three-year restructure program.
FINANCIAL RESULTS
Revenue breakdown
US Mortgage Services*
US Mortgage Services Margin Income
UK Mortgage Services
Total revenue
Mgmt EBITDA1
Mgmt EBITDA margin
Mgmt EBIT ex. Margin Income2
Mgmt EBIT ex. Margin Income Margin2
FY21 CC
$446.4
$3.7
$124.6
$574.8
$103.3
18.0%
-$4.2
-0.7%
FY20 Actual
CC Variance
$414.5
$24.2
$196.6
$635.4
$127.3
20.0%
$33.6
5.5%
+7.7%
-84.7%
-36.6%
-9.5%
-18.9%
-200bps
-112.5%
-620bps
Nick Oldfield,
Chief Financial Officer and
Global Head of Mortgage Services
KEY ACHIEVEMENTS
+16.8%
increase in
sub-servicing UPB
$215M
recaptured UPB
through 2H
$37.4M
cost savings delivered
in FY21 in the UK
FY22 OUTLOOK
FY22 PRIORITIES
FY22 OUTLOOK
FY22 PRIORITIES
Pipeline of fulfilment clients to be fully
implemented in the year driving revenue
growth
Complete implementation of new Loan
Origination System together with current
pipeline of new fulfilment clients
Execution of capital-light partnership strategy
to support growth in servicing portfolio
Execute and implement capital-light
partnership model to establish permanent
capital support and help drive future growth in
servicing portfolio
Ongoing growth in Canadian Corporate Trust
Continue to add Canadian Corporate Trust
mandates
In Class Actions, one-off expenses related to
litigation and claims settlement will not repeat,
improving FY22 operating margins
Implement system enhancements and process
automation related efficiency initiatives, to drive
down cost to serve
Government restrictions continue to impact 1H;
2H recovery as government restrictions and
limitations on foreclosure activity are lifted
Ongoing investment in automation and
efficiency initiatives across Servicing and
Origination functions to lower cost to serve
Bankruptcy revenues start to recover 2H22,
not anticipated at same level given 1H21 cyclical
peak
Invest in our front office skills and capabilities to
ensure we are properly positioned to execute on
the market opportunities as they arise
Constant currency (CC) equals FY21 results translated to USD at FY20 average exchange rates.
* Revenue excluding Margin Income
1 UK Mortgage Services EBITDA loss making ($5.7m) in FY21 and ($6.4m) in FY20.
2 FY21 UK Mortgages EBIT ex MI loss of ($6.7m), US Mortgages EBIT ex Margin Income of $2.4m, margin 0.5%.
15 | COMPUTERSHARE | ANNUAL REPORT | 2021
BUSINESS
SERVICES
CONSISTENT DELIVERY IN CORPORATE
TRUST, BANKRUPTCY AND CLASS
ACTIONS SUBDUED IN 2H
Business Services is focused primarily on corporate services, where we typically act in a
fiduciary capacity or as a court appointed agent. It’s also a great example of the benefits
of incorporating counter-cyclical revenue drivers into our business. In FY21 revenue was
down by 15% and EBIT excluding MI fell by 34%, largely driven by Class Actions, so this
was a disappointing result for Business Services. The economic stimulus packages have
effectively delayed the bankruptcies we expected to see when the year began, and there
was very little activity in the second half. We expect volumes to recover over time, but
the outlook for FY22 is subdued. There has also been very little large-sized Class Actions
activity through the courts.
FINANCIAL RESULTS
Revenue breakdown
Corporate Trust*
Bankruptcy*
Class Actions*
Margin Income
Total revenue
Mgmt EBITDA
Mgmt EBITDA margin
Mgmt EBIT ex. Margin Income
Mgmt EBIT ex. Margin Income Margin
FY21 CC
FY20 Actual
CC Variance
$54.5
$64.6
$59.2
$28.8
$207.1
$51.0
24.6%
$20.4
11.5%
$54.8
$47.3
$85.3
$56.2
$243.6
$88.2
36.2%
$31.1
16.6%
-0.5%
+36.6%
-30.6%
-48.8%
-15.0%
-42.2%
-1,160bps
-34.4%
-510bps
Stuart Swartz,
Global Head
Business Services
KEY ACHIEVEMENTS
Bankruptcy revenues
up almost
37%
predominantly in
the first half
Global Class Action case
wins in South Africa,
Canada and US
Corporate Trust Debt
Under Administration
steady at $2 trillion
FY22 OUTLOOK
FY22 PRIORITIES
FY22 OUTLOOK
FY22 PRIORITIES
Pipeline of fulfilment clients to be fully
implemented in the year driving revenue
growth
Complete implementation of new Loan
Origination System together with current
pipeline of new fulfilment clients
Execution of capital-light partnership strategy
to support growth in servicing portfolio
Execute and implement capital-light
partnership model to establish permanent
capital support and help drive future growth in
servicing portfolio
Ongoing growth in Canadian Corporate Trust
Continue to add Canadian Corporate Trust
mandates
In Class Actions, one-off expenses related to
litigation and claims settlement will not repeat,
improving FY22 operating margins
Implement system enhancements and process
automation related efficiency initiatives, to drive
down cost to serve
Government restrictions continue to impact 1H;
2H recovery as government restrictions and
limitations on foreclosure activity are lifted
Ongoing investment in automation and
efficiency initiatives across Servicing and
Origination functions to lower cost to serve
Bankruptcy revenues start to recover 2H22,
not anticipated at same level given 1H21 cyclical
peak
Invest in our front office skills and capabilities to
ensure we are properly positioned to execute on
the market opportunities as they arise
Constant currency (CC) equals FY21 results translated to USD at FY20 average exchange rates.
* Revenue excluding Margin Income.
16
CORPORATE RESPONSIBILITY
SUSTAINABILITY
Computershare has made considerable efforts to reduce our carbon footprint over the years, particularly by minimising the energy
used to operate our data centres and buildings, and focusing on paper consumption, travel, and recycling IT equipment. We’ve
always taken the view that effecting immediate change was more important than talking about potential future plans.
Aligned with this approach, historically, we’ve measured our carbon footprint on an office-by-office basis (where primary data
has been available from landlords) and set targets for individual offices to help drive down energy use, water use and waste
consumption.
In FY20 we decided to engage a third party, Climate Partner, to help us calculate our total carbon footprint, using secondary data
where primary data isn’t available or where landlords simply don’t provide it. This allows us to set one, consolidated target to
reduce our carbon footprint, globally. This target replaces all previous targets.
THE RESULTS
Emissions by region were as follows:
Between January and December 2020
our business activities generated a total of
48,951.21* tonnes of CO2, 3.7% of which were
Scope 1 emissions, 43.2% Scope 2 emissions
and 53.1% Scope 3 emissions. Figures are
provided in line with the Greenhouse Gas
(GHG) Protocol and accounting standards.
Electricity procurement, employee commuting
(or home-working) and paper use were
the most emission-intensive activities and
represent the largest share of our carbon
footprint.
* includes a 10% error margin
EMISSIONS BY REGION (TC02E)
North America
UK and Ireland
Oceania
Continental
Europe and Africa
Asia
19,958.5
8,343.8
7,796.5
3,281.5
713.4
PROGRESS
IN FY21
The past year provided
further opportunities to
reduce the environmental
footprint of our business
activities on behalf of
clients. Our teams around
the world accelerated
the digitalisation of some
of our most significant
products and services
by promoting process
improvement and
efficiency initiatives
geared at increasing
automation, promoting
self-service channels and
minimising paper waste.
Reducing paper production in
Communication Services
In Communication Services, we have seen overall
communication volumes remain at high levels
and demand for delivery via digital channels
steadily increase. There has been a year-on-year
decrease of 6.3% in physical mailpacks and a
related increase of 5% in digital communications.
Much of the reduction in demand for physical
mailpacks resulted from regulatory authorities
around the world permitting companies to issue
a physical notice of AGMs via mail and deliver the
other meeting materials information online. Many
clients moved to take up these Notice and Access
solutions to ensure they could fulfil shareholder
needs to receive materials and vote despite
postal service disruptions and other challenges
experienced during the pandemic. On average,
a notice-only mailing is 90% lighter than a full
meeting mailpack while also being much faster to
produce. As clients begin to move across to this
option, some regions have already reduced paper
use by as much as 26% compared to the previous
year’s mailings.
17 | COMPUTERSHARE | ANNUAL REPORT | 2021
Enhancing digital products in Issuer Services
Offering online and self-service options in
Reducing our energy consumption through technology
The launch of our new Virtual AGM product has
expanded our capacity and features for holding
virtual and hybrid shareholder meetings for our
clients. This format enables significant carbon
savings compared to the in-person events they
replace, due to eliminating most or all of the travel
involved.
During FY21, we coordinated 2,457 virtual and
21 hybrid meetings – that’s one-third of our total
client meetings and more than double than what
was held during FY20. We expect that number to
increase in FY22.
For our own AGM we saved more than 110,000
sheets from being mailed out by adopting Notice and
Access rather than mailing the full Notice of Meeting
– Computershare’s shareholders were issued two
pieces of paper rather than eight.
In Australia we offered electronic new shareholder
packs to clients as an option to replace printed
‘Welcome’ packs. In FY21, this meant approximately
585,000 fewer pages and 292,000 fewer envelopes
were printed and posted.
Mortgage Services
We have continued to manage a significant proportion of mortgage
payment holidays or forbearances through online tools, avoiding
the need for paper-based processes. In the US, borrowers were able
to use an enhanced self-service platform to establish forbearance
and extensions. This platform supports two-way SMS, web and IVR
options as alternatives to traditional paper-based applications.
In the UK, the main reason borrowers call us is to check or modify
their payment schedules – 48% of these enquiries are now
completed via self-service. 1,400 other customer actions per month
are now undertaken via online and digital methods.
A new digital platform for Employee Share Plans
As we roll out our upgraded Employee Share Plans platform,
EquatePlus, to new regions, we are also deploying a digital-first
strategy. By directing participants to our mobile and web platforms
to access their plan holdings, transact and view communications, we
can also eliminate the need for many paper forms and statements.
Since May 2019, we’ve upgraded 226 clients to EquatePlus,
encompassing three million participants across the UK, Europe
and Australia.
We have continued to invest in more efficient data centres,
which has allowed us to substantially reduce our physical
infrastructure and achieve considerable savings in energy
consumption. We estimate that we have saved 10% in power use
for our Storage and Compute appliances as a result of our data
centre platform refresh in the UK and Australia. We are also
continuing to recycle devices that have reached the end of their
service life.
With the majority of our employees working from home as a
result of the pandemic, they remain well connected, being able
to collaborate virtually over Microsoft Teams. We expect to be
able to continue this, with flexible working remaining an option
for our employees in the future.
Each day,
12,000
active users
participate in:
1,500 CALLS
2,200 MEETINGS
125,000 CHATS
For more information visit www.computershare.com/cr
While no formal benchmarks exist, Computershare’s footprint is broadly in line with
available data from similar financial services firms. Along with Climate Partner, we are
performing detailed analysis to ensure our footprint remains in line or is better than
firms with similar activities. In future years, we will be able to share a trend analysis
based from this initial footprint.
We recognise that while we are in a low impact sector, we do use significant amounts
of paper and electricity. In the next year, we expect to significantly increase our
procurement of renewable energy and will be reviewing the types of paper we
use. These two items represent the biggest opportunities for carbon reduction at
Computershare.
It should be noted that 2020 was not a normal year from a business activity
perspective, particularly with regard to business travel and commuting, so we expect
to see some fluctuation in emissions numbers as these activities resume.
OUR CARBON REDUCTION TARGET
We will unveil our plans for carbon
neutrality in the near future.
We’re also continuing our work with
Climate Partner to create a carbon
footprint view of our products and
services. This will help our clients to make
greener choices when commissioning
our services.
Finally, we have increased the data
available in our CDP submission and look
forward to sharing our rating from that
once available later this year.
GREEN
INITIATIVES
IN FY21
During the past year,
we’ve taken the following
actions to reduce our
carbon footprint.
MOVING TO FLEXIBLE WORKING
Our long-term move to flexible working reduces the number
of employees commuting to an office each day, representing
a further reduction in transport carbon emissions.
In the UK, we closed two of our Mortgage Services
office sites, primarily because more than 70% of those
employees now work from home, either full or part-time.
This has also allowed us to rationalise our application
server infrastructure, achieving a 60% reduction in server
numbers, bringing with it a similar decrease in energy
consumption for power and heating as well as cooling
systems.
GLOBAL TREE PLANTING PROGRAM
In FY21, we planted 1,365 trees as part of
our existing commitment to offset 10%
of the carbon emitted from our global
business travel. This number was less
than half of what was planted in FY20,
due to suspending non-essential business
travel during the pandemic, so in FY21 we
planted less than half the trees planted in
FY20. Since 2016, we’ve planted a total of
9,225 trees.
GREEN OFFICE CHALLENGE
During FY21, we introduced a new format for our annual Green Challenge in
response to the number of people now working from home. The Green Home
Challenge encouraged employees to make a concrete pledge to improve their
environment, at home or in their local community, in one or more of the four
categories below. During the competition period, we received 302 pledges from
employees across the globe and we’re now in the process of selecting the winners.
Conserving
resources
Travel and
transport
Natural
wildlife
Food and
drink
PROGRESS
IN FY21
The past year provided
further opportunities to
reduce the environmental
footprint of our business
activities on behalf of
clients. Our teams around
the world accelerated
the digitalisation of some
of our most significant
products and services
by promoting process
improvement and
efficiency initiatives
geared at increasing
automation, promoting
self-service channels and
minimising paper waste.
Reducing paper production in
Communication Services
In Communication Services, we have seen overall
communication volumes remain at high levels
and demand for delivery via digital channels
steadily increase. There has been a year-on-year
decrease of 6.3% in physical mailpacks and a
related increase of 5% in digital communications.
Much of the reduction in demand for physical
mailpacks resulted from regulatory authorities
around the world permitting companies to issue
a physical notice of AGMs via mail and deliver the
other meeting materials information online. Many
clients moved to take up these Notice and Access
solutions to ensure they could fulfil shareholder
needs to receive materials and vote despite
postal service disruptions and other challenges
experienced during the pandemic. On average,
a notice-only mailing is 90% lighter than a full
meeting mailpack while also being much faster to
produce. As clients begin to move across to this
option, some regions have already reduced paper
use by as much as 26% compared to the previous
year’s mailings.
Enhancing digital products in Issuer Services
The launch of our new Virtual AGM product has
expanded our capacity and features for holding
virtual and hybrid shareholder meetings for our
clients. This format enables significant carbon
savings compared to the in-person events they
replace, due to eliminating most or all of the travel
involved.
During FY21, we coordinated 2,457 virtual and
21 hybrid meetings – that’s one-third of our total
client meetings and more than double than what
was held during FY20. We expect that number to
increase in FY22.
For our own AGM we saved more than 110,000
sheets from being mailed out by adopting Notice and
Access rather than mailing the full Notice of Meeting
– Computershare’s shareholders were issued two
pieces of paper rather than eight.
In Australia we offered electronic new shareholder
packs to clients as an option to replace printed
‘Welcome’ packs. In FY21, this meant approximately
585,000 fewer pages and 292,000 fewer envelopes
were printed and posted.
Offering online and self-service options in
Mortgage Services
We have continued to manage a significant proportion of mortgage
payment holidays or forbearances through online tools, avoiding
the need for paper-based processes. In the US, borrowers were able
to use an enhanced self-service platform to establish forbearance
and extensions. This platform supports two-way SMS, web and IVR
options as alternatives to traditional paper-based applications.
In the UK, the main reason borrowers call us is to check or modify
their payment schedules – 48% of these enquiries are now
completed via self-service. 1,400 other customer actions per month
are now undertaken via online and digital methods.
A new digital platform for Employee Share Plans
As we roll out our upgraded Employee Share Plans platform,
EquatePlus, to new regions, we are also deploying a digital-first
strategy. By directing participants to our mobile and web platforms
to access their plan holdings, transact and view communications, we
can also eliminate the need for many paper forms and statements.
Since May 2019, we’ve upgraded 226 clients to EquatePlus,
encompassing three million participants across the UK, Europe
and Australia.
Reducing our energy consumption through technology
We have continued to invest in more efficient data centres,
which has allowed us to substantially reduce our physical
infrastructure and achieve considerable savings in energy
consumption. We estimate that we have saved 10% in power use
for our Storage and Compute appliances as a result of our data
centre platform refresh in the UK and Australia. We are also
continuing to recycle devices that have reached the end of their
service life.
With the majority of our employees working from home as a
result of the pandemic, they remain well connected, being able
to collaborate virtually over Microsoft Teams. We expect to be
able to continue this, with flexible working remaining an option
for our employees in the future.
Each day,
12,000
active users
participate in:
1,500 CALLS
2,200 MEETINGS
125,000 CHATS
For more information visit www.computershare.com/cr
18
COMMUNITY
Computershare’s charitable foundation, Change A Life, was founded in 2005 with the aim of
making a real difference to the lives of disadvantaged and impoverished communities around
the world. Since then, over AUD 11 million has been raised to support 16 projects in 13 countries,
supporting sustainable agriculture and reforestation, food security, mobile eye care clinics,
disaster relief and a range of programs to advance the education and welfare of at-risk children.
This work would not be possible without the generosity of our employees, many of whom
have been regular contributors to Change A Life since its inception. Every month, more than
a thousand of our staff donate via automatic payroll deductions, each of which is matched by
Computershare. Staff supporters choose which major global projects we sponsor, as well as a
number of other charitable partners that are local to our offices around the world. All staff are
allocated a day of paid volunteer leave each year to support the charity of their choice.
We would also like to thank our shareholders who have contributed dividends to Change A Life
and other client and corporate donors.
From FY22 forward, Change A Life will have a broadened scope: to also work with charitable
partners that work to promote Diversity and Inclusion. Our first D&I partner is Black Girls
Code, an organisation that teaches technology and computer programming skills to girls from
underrepresented communities. They will receive 25% of annual Change A Life donations for a
period of time. We also hope to support their mission, not only with funding, but also with direct
support in the form of mentoring, training and internships. More information on this can be found
in our Diversity and Inclusion report on page 35.
WORLD YOUTH INTERNATIONAL
AUD
518,733
Total donated to our
projects in FY21
AUD
11 MILLION
Total donated since
launch
In 2018, we entered into a five-year agreement with the WYI School in Gokarna, Nepal, after our employees selected it as our
primary global project. Since then, Change A Life has funded a range of improvements to the school, including upgrades to
classrooms and other facilities, extending the school program into Year 11 and 12 and supporting improvements to the quality of
education provided. World Youth International is an Australian-based charity committed to enhancing quality of life, strengthening
communities and reducing poverty through sustainable development projects.
Our close partnership with WYI was recognised with the Gold Award for Most Innovative Charity and Employer Relationship in the
2020 Workplace Giving Excellence Awards (convened by Workplace Giving Australia). The judging panel described our relationship
with WYI as “an authentic and growing partnership with great engagement.”
In the past 18 months, the school’s work has unfortunately been interrupted by lengthy lockdowns triggered by Covid outbreaks
in Nepal. Despite the challenges, the school increased student numbers from 508 to 598 during the last school intake.
Computershare has provided extra emergency funding, helping to pay salaries and retain the majority of their skilled teachers.
Staff members have developed a range of online and at-home study resources to enable students to continue their education.
THE NEW WYI
BOARDING HOME
Our Trek Nepal teams in 2018
and 2019 raised an additional
AU$500,000 to build the Change
A Life boarding home on the WYI
School campus. We are very pleased
to report that the construction of
this boarding home has now been
completed. The new multi-storey
building has been engineered to high
standards designed to mitigate the
risk of earthquake damage.
19 | COMPUTERSHARE | ANNUAL REPORT | 2021
The new facility will be home to 25 male
While we are disappointed that our
and 25 female students undertaking
2020 Trek Nepal (for our US and Canada
Years 11 and 12; a great benefit for
staff members) had to be cancelled,
students who find it difficult to make the
we plan to offer a virtual trek for our
daily trip to and from school, especially
global employees in the coming year, to
during the monsoon season. These
raise awareness and further funding for
boarding students will be supported by
Change A Life’s projects.
on-site staff members and have extended
access to the computer room and other
study resources – as well as benefiting
from a safe and engaging co-ed
community. An official opening date will
be confirmed once furnishings have been
purchased and operational arrangements
have been finalised. Boarding fees and
scholarships will help to make the WYI
school self-sustainable in the future.
In 2022, our five-year agreement with
World Youth International will conclude,
and we will once again ask our employees
to select a global charitable project
to support.
LOCAL CHARITIES
Since 2017, Change A Life has partnered with a range of charitable organisations local to our offices. These were chosen by our
employees and provide practical support to people in need, often with a focus on caring for vulnerable children. Going forward, our
financial support for local charities will increase from 20% to 25% of donations made and matched.
In past years, as well as providing financial support, we have seen our employees provide practical assistance through volunteering.
Owing to the pandemic, in-person help has not been possible, but we hope to see this become an important part of our community
activities once again in the year ahead.
This year, the following charitable partners were selected:
ASIA PACIFIC
Melbourne, AU
Kids Under Cover
Sydney, AU
The Starlight Children’s
Foundation
Brisbane, AU
Jade North’s Kickin’
with a Cuz*
Auckland, NZ
Auckland City Mission*
China and Hong Kong
Changing Young Lives
Foundation
CANADA
Food Banks Canada
USA
UCIA AND EUROPE
Together We Rise*
Bristol, UK
Young Bristol
Other UK
FareShare UK
Ireland
Make a Wish Foundation
Jersey
MIND Jersey*
Continental Europe
Save the Children*
* Charities selected in 2017 that have been continued.
The new facility will be home to 25 male
and 25 female students undertaking
Years 11 and 12; a great benefit for
students who find it difficult to make the
daily trip to and from school, especially
during the monsoon season. These
boarding students will be supported by
on-site staff members and have extended
access to the computer room and other
study resources – as well as benefiting
from a safe and engaging co-ed
community. An official opening date will
be confirmed once furnishings have been
purchased and operational arrangements
have been finalised. Boarding fees and
scholarships will help to make the WYI
school self-sustainable in the future.
While we are disappointed that our
2020 Trek Nepal (for our US and Canada
staff members) had to be cancelled,
we plan to offer a virtual trek for our
global employees in the coming year, to
raise awareness and further funding for
Change A Life’s projects.
In 2022, our five-year agreement with
World Youth International will conclude,
and we will once again ask our employees
to select a global charitable project
to support.
20
THE NEW WYI
BOARDING HOME
Our Trek Nepal teams in 2018
and 2019 raised an additional
AU$500,000 to build the Change
A Life boarding home on the WYI
School campus. We are very pleased
to report that the construction of
this boarding home has now been
completed. The new multi-storey
building has been engineered to high
standards designed to mitigate the
risk of earthquake damage.
PEOPLE
VALUES
Our long-standing brand values of
Certainty, Ingenuity and Advantage
represent what we as a Company bring to
our clients each and every day. Our ‘Being
Purple’ ways of working support our brand
values and are a set of positive behavioural
signposts for our people. ‘Being Purple’
also helps us to define the people we
want to bring into Computershare and
the conduct, behaviours and professional
attributes we want to promote and reward.
Detailed guidelines are provided to each
member of staff, including our board of
directors, so that our people know what
is expected of them. They reflect what
actions can be taken to deliver on these
ways of working at every level from
employee to senior leader. We also provide
guidance on ‘what it’s not’ so that our
people understand the behaviours we
won’t accept.
Our Being Purple ways of working
also reflect the requirements of
our well-established policies on
diversity and inclusion, human rights,
harassment, anti-bribery, corruption and
whistleblowing.
Move the
business
forward
E
G
A
T
N
A
V
D
A
Keep
customers
at our
heart
Work well
together
CERTAI
N
T
Y
Do the
right thing
World leaders
in financial
administration
U ITY
N
I N G E
Strive for
excellence
Be a
pioneer
CERTAINTY
INGENUITY
ADVANTAGE
Taking pride in delivering
high-quality outcomes and
outstanding results is how we
strive for excellence. We expect our
employees to meet deadlines and
targets, use resources effectively
and maintain a high standard in
their work, even when workloads
come under pressure.
We also ask our staff to challenge
the status quo in order to do things
differently and better. This enables
us to be pioneers – curious and
keen to learn new things. Our staff
members are encouraged to think
creatively, seek feedback and ask
questions.
Our employees build long-lasting
relationships and deliver products
and services that meet customers’
needs as part of keeping customers
at our heart. Following this way
of working seeks to build on
relationships through proactive
communication.
We also ask our staff to help
keep us ahead in our industry by
continually moving the business
forward and maintaining high
performance in the face of change.
This means staying up to date with
our global priorities, adapting and
responding quickly to changing
circumstances and staying calm
under pressure.
Working well together means
working collaboratively, valuing
differences and building
partnerships to support business
outcomes. We expect our people to
show respect to people regardless
of their background, show support
through both tough times and
good – and communicate openly,
honestly, clearly and regularly.
We also expect our people to ‘do
the right thing’. Each employee is
personally responsible and needs
to act with integrity. Our staff
members need to follow through on
commitments and promises, take
responsibility and ownership of
their actions – and ensure risks are
managed while complying with our
policies.
21 | COMPUTERSHARE | ANNUAL REPORT | 2021
COMPUTERSHARE DAY
On 29 May we celebrated our fifth annual Computershare Day, marking 27 years since Computershare was listed on the Australian
Securities Exchange. This year employees around the world took part in the festivities from home in lots of different ways, despite
the range of social contact restrictions in place around the world. Our people shared pictures, videos, messages and ecards with
their workmates. We also held a virtual Computershare TV competition, where employees sent in videos and we awarded prizes for
the most popular entries from around the globe.
We presented our Purple Person awards digitally this year, recognising 28 employees for making outstanding contributions to
Computershare, and for exemplifying our values. They consistently ‘do the right thing’, and demonstrate our Being Purple ways
of working, week in and week out. Their actions empower the people around them and enhance our Company’s reputation for
excellent service quality and integrity.
For these award winners, Being Purple is intrinsic to their professional life, no matter where they work or at what level of seniority.
They strive to innovate, seek continuous improvement for themselves and their business, encourage and support others, and
routinely go ‘above and beyond’ to provide exceptional levels of customer service. During the past year, given the challenges posed
by the global pandemic, these qualities have never been more important.
Our Purple People for 2021 are:
Name
Alan Scott
Belinda McGovern
Bill Atkinson
Calley Webb
Celia Li
Denish Modi
Elizabeth Cooper
Eric Foronda
Jennifer Zhang
Jenny Messer
Jenny Paterson
John Britton
Kelly Little
Kylee Lauderdale
Laura Ferrario
Lisa Sumpter
Marc-Éric Prénovost
Melinda Salazar
Monica Papasidero
Robert Bingham
Ronald Panozzo
Stacey Christian
Stefan Schmetzdorf
Stuart Mar
Susan Lehoullier
Sydney Reitzel
Tony King
Victoria Goddard
Business line
Technology
Issuer Services
Issuer Services
Utility Services
Plans
Issuer Services
Global Operations
Business Services
Issuer Services
Issuer Services
Corporate Communications
Issuer Services
Audit
Mortgage Services
Global Operations
Mortgage Services
Plans
Mortgage Services
Issuer Services
Technology
Plans
Mortgage Services
Communication Services
Global Operations
Technology
Business Services
Legal
Mortgage Services
Location
Bristol UK
Sydney AU
New York US
Maroochydore AU
Beijing CN
Toronto CA
Louisville US
Toronto CA
Shanghai CN
Canton US
Crossflatts UK
Bristol UK
Bristol UK
Ponte Vedra US
Bristol UK
Crossflatts UK
Barcelona ES
Denver US
Islandia NY, US
Melbourne AU
Chicago US
Denver US
Munich DE
Toronto CA
Canton US
El Segundo US
Melbourne AU
Doxford UK
22
GROUP OPERATING OVERVIEW
PRINCIPAL ACTIVITIES
The principal activities of the consolidated entity during the financial year were the operation of the following areas:
>
Issuer Services comprise register maintenance, corporate actions, stakeholder relationship management, corporate governance
and related services
> Mortgage Services and Property Rental Services comprise mortgage servicing and related activities together with tenancy bond
protection services in the UK
> Employee Share Plans and Voucher Services comprise the provision of administration and related services for employee share
and option plans together with Childcare Voucher administration in the UK
> Business Services comprise the provision of bankruptcy, class actions and corporate trust administration services
> Communication Services and Utilities operations comprise document composition and printing, intelligent mailing, inbound
process automation, scanning and electronic delivery
> Technology Services comprise the provision of software specialising in share registry and financial services
REVIEW OF OPERATIONS
Overview
Revenue for the Group fell 0.8% to $2,262.0m in constant currency terms. Underlying organic revenue growth, after adjusting for
margin income (-$95.1m), acquisitions and disposals, including Corporate Creations (+$30.5m) and the UKAR fixed fee (-$46.8m),
was 4.6%.
Margin Income declined $95.1m, reflecting the annualised impact of the global interest rate cuts in early 2020 as central banks
around the world responded to the global pandemic.
Issuer Services revenue excluding margin income was up 14.1% in constant currency terms. Issuer Services EBITDA excluding
margin income was up 26.5% to $230m and EBIT excluding margin income was up 26.3% to $227.1m. This was driven by greater
Corporate Actions activity, particularly in Hong Kong, and some large stakeholder relationship management events. FY21 includes
annualised contribution from our governance services acquisitions.
Employee Share Plans and Voucher Services revenue excluding margin income was up 7.7%. EBITDA excluding margin income was
up 51.3% to $82.3m, and EBIT excluding margin income was up 51.8% to $77.1m. This was driven by higher transactional volumes in
EMEA and Hong Kong as well as cost savings in personnel, part offset by one off regulatory costs associated with Brexit transition.
Voucher Services revenues also declined due to reduced parent numbers, reflecting the ongoing run-off of this business area.
Business Services revenue excluding margin income was down 4.9%. EBITDA excluding MI was down 30.1% to $22.3m, and
EBIT excluding MI was down 34.4% to $20.4m. Class Actions revenues were down, driven by a decline in the number of case wins,
in addition to a significant doubtful receivable. There was increased contribution from Bankruptcy as a result of a strong first-half
performance in the year.
Mortgage Services and Property Rental Services revenue excluding margin income was down 6.6% in constant currency terms.
EBITDA excluding MI was down 1.6% to $86.7m, and EBIT excluding margin income was down 204% to ($18.0m). US Mortgage
Services revenues were negatively impacted by the nationwide foreclosure moratorium and accelerated levels of run-off due to
lower mortgage rates, while costs increased following a change in the amortisation period for interest rate-sensitive Mortgage
Servicing Rights (MSRs) from nine to eight years. In UK Mortgage Services the expected reduction in the UKAR fixed fee (-$46.8m)
has been offset by reduced operating costs following the end of the asset migration program and ongoing benefits from the wider
cost-out program. Property Rental Services revenues are predominantly MI and were down 16.7% over the year to $24.8m.
Revenue for the Communication Services and Utilities business was down 5.9%. EBITDA was down 3.9% at $29.6m, and EBIT was
down 8.4% at $25.1m.
23 | COMPUTERSHARE | ANNUAL REPORT | 2021
Revenue
Business stream
Issuer Services
Mortgage Services & Property Rental Services
Employee Share Plans & Voucher Services
Business Services
Communication Services & Utilities
Corporate & Technology
Total management revenue
Comparison in constant currency
FY21 @ CC
$ million
FY20 Actual
$ million
CC
Variance
FY21 Actual
$ million
975.1
599.5
319.8
207.1
158.8
1.7
894.7
665.1
304.6
243.6
168.8
4.2
2,262.0
2,281.2
+9.0%
-9.9%
+5.0%
-15.0%
-5.9%
-59.5%
-0.8%
999.3
609.0
333.0
210.2
169.7
1.7
2,322.8
Total management revenue excludes management adjustment items further described in note 4 of the financial statements.
Regions
Australia and New Zealand
Asia
UK, Channel Islands, Ireland and Africa
Continental Europe
USA
Canada
Total management revenue
FY21 @ CC
$ million
FY20 Actual
$ million
CC
Variance
FY21 Actual
$ million
193.2
160.4
443.7
93.8
196.4
112.5
527.0
87.5
1,197.0
1,172.0
173.9
185.8
2,262.0
2,281.2
-1.6%
+42.6%
-15.8%
+7.2%
+2.1%
-6.4%
-0.8%
213.4
161.3
470.0
100.9
1,197.0
180.2
2,322.8
Operating costs
Operating expenses were up 0.5% on FY20 to $1,642.6m in constant currency terms. Adjusting the cost base down by $82.0m to
account for the benefit realised from the cost out programs and some underlying inflation, BAU operating expenses were down
6.5%. This has been offset by the $8.0m net impact of acquisitions, investment in growth to meet both the demand in Corporate
Actions and the building out our Corporate Secretarial capability by $33.3m as well as $9.6m in net one-off costs predominantly
made up of a significant doubtful receivable and regulatory costs associated with the Brexit transition in the UK. Cost of Sales
increased, from $371.8 million to $410.4 million, largely driven by the sales mix underpinning the higher revenue. The Group’s
cost-out program continues to deliver benefits, with $64.4m achieved in FY21 and $194.7m cumulative gross benefits achieved
to date.
Earnings per share
Statutory basic earnings per share
Statutory diluted earnings per share
Management basic earnings per share
Management diluted earnings per share
2021
Cents
33.77
33.76
50.71
50.69
2020
Cents*
42.55
42.55
55.57
55.57
The management basic and diluted earnings per share amounts have been calculated excluding the impact of management
adjustment items (refer to note 4 in this financial report). All EPS numbers above have been translated at actual FX rates (not
constant currency).
* Earnings per share is restated by adjusting the weighted average number of ordinary shares in order to incorporate the bonus
element in the 2021 rights issue, as per AASB 133 Earnings per Share.
24
BUSINESS STRATEGIES AND PROSPECTS
OUTLOOK
In August 2021, we provided earnings guidance for FY22. In constant currency, we expect Management EPS to be up around 2%
after accounting for the impact of the rights issue and the Corporate Trust (CCT) acquisition. We anticipate EBIT excluding margin
income across our operating businesses to improve around 3.7% and margin income to be up 35.5% at $145m.
Guidance assumes over 4% Management EPS growth in our existing business lines and Management EBIT excluding MI to be up
around 3%. This reflects the ongoing delivery of cost-out initiatives and operational earnings growth, which we expect will more
than offset expected wage inflation pressures. We are assuming margin income for our existing business lines to come in at around
$107m – which is flat when compared to the prior corresponding period – with average balances of $17 billion.
The CCT acquisition is anticipated to close in November, with an additional contribution of $38m in margin income, $1.8m in
Management EBIT ex MI and Management EPS of around 4 cents.
Turning to the individual business lines, in Issuer Services we are expecting to benefit from organic growth in our new Governance
Services businesses as well as ongoing investment in Front Office programs and new client wins. Against that, we are anticipating
some softness in Corporate Actions and Stakeholder Relationship Management revenues, which are not expected to repeat at the
same levels as FY21.
In Employee Share Plans we will continue to benefit from increased trading revenue from expected growth in units under
administration as well as higher fees from recent client wins. We will benefit from increased scale and synergies as we continue to
roll out our industry-leading EquatePlus platform into new regions whilst the one-off regulatory related expenses associated with
Brexit will not repeat.
In US Mortgages, we expect to drive growth through a pipeline of new fulfillment clients being fully implemented in the year,
whilst the establishment of a capital light partnership will enable us to drive growth in sub-servicing. While the moratorium on
foreclosures has now come to an end, there are still a range of relief measures in place that will remain to the end of the calendar
year. Once these finish, we expect special servicing opportunities to start opening up in the second half.
In UK Mortgages we expect to return to a modest profit in FY22 due to our ongoing efforts to right-size the business after the
loss of UKAR fixed fee in FY21. The cost out program is progressing well and the overall target for the project has been upgraded
to $75m.
In Business Services, we expect continued growth in the legacy Corporate Trust business and margins to improve after some
one-off expenses in FY21 in Class Actions, however, this will be offset by lower bankruptcy revenues which are not expected to be at
the same level as the 1H21 cyclical peak.
Our cost-out programs continue to progress well. We have extended the delivery period out to FY24. Total gross benefits are now
estimated at $276 million, with $80m to come over the next three years.
The net debt to EBITDA ratio will peak after the completion of the CCT acquisition before starting to organically repair.
We anticipate it being around the top of our target range at the end of FY22.
This outlook assessment and other references to our FY22 outlook in this document are subject to the forward-looking statements
disclaimer and a number of other assumptions provided in our FY21 results announcement disclosed to the Australian Securities
Exchange (Slide 77).
RISKS
The Board is ultimately responsible for setting the risk appetite for the Group and otherwise reviewing and approving
Computershare’s risk management framework and policies as well as assessing their effectiveness in mitigating the risks present
in our business. The Board delegates some of this responsibility to the Risk and Audit Committee. The Risk and Audit Committee is
highly qualified with deep expertise in strategic, operational and financial risk management. It receives quarterly reports on the key
and emerging risks in the Group and meets with management to discuss and challenge its views on Group or relevant business line
risk positions as well as any actions they are taking to mitigate those risks.
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 responsibility for its own 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. This
includes supporting tools and methodologies as well as providing oversight of risk management activities and 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 effectively
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.
25 | COMPUTERSHARE | ANNUAL REPORT | 2021
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 as well as 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 closely monitor regulatory developments
globally and play an active role in consulting with regulators on changes that could impact our business.
Many of our key businesses are subject to direct regulatory oversight. We are required to maintain the appropriate regulatory
approvals and licenses to operate and, in some cases, adhere to certain financial covenants, such as capital adequacy.
Computershare has robust compliance management and monitoring programs in place to support these regulatory obligations
and we aim to engage proactively with regulators in all relevant jurisdictions.
Our business is also at risk of disruption from new technologies and alternative service providers. This means we must constantly
be looking for ways to improve our services by investing in new technologies and processes. We have a dedicated innovation team
that is responsible for rapidly assessing the viability of new business ideas and initiatives in an agile yet systematic manner using
proven innovation techniques.
Our prospects also depend on finding and executing on opportunities to grow and diversify our business. There is 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, particularly with registry and employee share plan administration businesses. We have a deliberately focused
acquisition strategy with rigorous approval processes, and we also undertake subsequent reviews of our acquisitions and their
performance.
Computershare also operates across a diverse set of countries and tax jurisdictions. The tax environments in these jurisdictions
can be complex and subject to change, and these changes cannot be accurately predicted. Computershare operates a global
finance function to manage tax risk within the Group’s risk appetite and engages external tax advice as appropriate.
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, foreign exchange and interest rates can impact adversely on our financial
performance.
Computershare generates significant revenues from the transaction processing fees we earn from our services (including the
interest income earned by investing client funds). These revenue sources are substantially dependent on customer trading
volumes, market prices and liquidity of securities markets. Sudden, sharp or gradual but sustained declines in market values of
securities can result in reduced investor communication activity, including reduced mutual funds communication volumes; reduced
mergers and acquisitions activity; reduced proxy activity; reduced trading activity; and illiquid markets.
Margin income is a key contributor to earnings. Changes in investment restrictions, interest rates and the level of balances that we
hold on behalf of clients can have a material impact on the Group’s earnings. For example, the swift and forceful response of central
banks in early March 2020 to the then-emerging Covid pandemic, with interest rates being reduced to historic lows, resulted in an
immediate and significant impact on the margin income that Computershare generates from holding client balances.
We have strong relationships with the global financial institutions that hold our client balances. We have robust policies and other
protections to manage interest rate risk and other risks associated with placing those funds (including counterparty risk) and we
also make significant investments in processes and technology to identify, allocate, reconcile and oversee client monies.
In addition, in the course of its business Computershare’s mortgage servicing business purchases MSRs in order to service a group
or portfolio of mortgages. Interest rate volatility creates risk related to the ability to generate revenue over the expected useful life
of the MSR assets.
The market for Computershare’s products and services is rapidly evolving and highly competitive. We compete with a number
of firms that provide similar products and services to our own. In addition, we compete with our clients’ in-house capabilities to
perform functions that they might otherwise outsource to us. 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.
26
Operational risk
Computershare maintains the capability to provide critical services to our clients during times of business disruption through strict
business continuity and operational resiliency planning, crisis management and disaster recovery processes. This capability covers
the various risks Computershare may face that could disrupt our critical services, from cyber threats to natural disasters.
When the rapid spread of Covid became apparent, we invoked our business continuity plans, which resulted in around 90% of our
staff working remotely. Computershare’s response was managed through a dedicated crisis management taskforce with board
oversight and reporting.
Computershare deals with a high volume of daily transactions that can be exposed to data loss and security breaches. The nature
of cyber-crime is constantly evolving, and information systems are vulnerable to cyber-attacks. Security breaches may involve
unauthorised access to Computershare systems and databases, damage to Computershare’s systems and either the exposure
or theft of confidential client data (or both). 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 resiliency 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 endpoint, 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, so 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 appropriate insurance.
Environmental, Social and Governance (ESG) risk
The regulatory environment our businesses operate in increasingly poses requirements with regards to ESG. Computershare
incorporates ESG risk within its risk management framework and has policies to ensure clear ownership of risk.
During the Covid pandemic we took unprecedented action to keep our people safe and healthy, ensure our business operated
smoothly and continue to serve our clients well. As mentioned above around 90% of our staff moved to working from home, and
Computershare will continue to support flexible working arrangements, modified work patterns and schedules to support remote
working.
We continue to monitor the risks to our businesses through climate change, environmental management practices and the duty of
care which is placed on us as a result, including health and safety at work.
Our compliance program closely monitors our risks related to bribery and corruption and ensures we remain in compliance with
applicable laws and regulations. Computershare publishes its Anti-Bribery and Corruption Policy on our website.
Computershare also monitors its network of suppliers to ensure both the Company and its supply chain remain in compliance with
applicable Modern Slavery laws. Computershare remains committed to ensuring that slavery and human trafficking form no part of
the services we provide or the supply chains we rely upon to provide those services. Computershare publishes an annual Modern
Slavery Statement on our website .
We monitor and assess risk management and ethical behaviour in Computershare on an annual basis and take action when we
identify areas of improvement or receive feedback during the assessment. We also examine employee perceptions of our ethical
behaviours and risk management as well as the effectiveness of our training and policies through our annual employee survey.
Computershare views diversity as a source of strength, and inclusion is at the core of what we do. As every company is trying
to create a more diverse employee base, there is a risk that we will be competing for the same talent, and we need to undertake
initiatives to mitigate this risk. Computershare has worked with an external Diversity & Inclusion consultancy firm to develop our
D&I strategy. We provide regular reporting to our Board, obtain feedback from employees via our annual Employee Opinion Survey
and have established Employee Resource Groups (ERGs). We are now focusing our recruitment efforts on minority communities,
including by using testimonials of current employees in recruiting efforts, and our ERGs are helping to promote roles using
their expertise and networks. We continue to build equitable and inclusive practices into our People Policies and Practices and
decision-making protocols. You can read more about our D&I initiatives on page 35.
Computershare has put in considerable effort to reduce its carbon footprint over the years, particularly in terms of the energy
used in our data centres and buildings, along with a focus on paper consumption, travel and the recycling of IT kit. In FY20 we
took the decision to engage a third party, Climate Partner, to help us calculate our total carbon footprint. This allows us to set one,
consolidated target to achieve carbon neutrality globally. This target replaces all previous targets. Between January 2020 and
December 2020 CPU’s business activities generated a total of 48,951.21 tonnes of CO2, 3.7% of which were Scope 1 emissions,
43.2% Scope 2 emissions and 53.1% Scope 3 emissions. You can read more about our sustainability initiatives on page 17.
27 | COMPUTERSHARE | ANNUAL REPORT | 2021
BUSINESS STRATEGIES AND PROSPECTS Governance
CORPORATE GOVERNANCE STATEMENT
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 20 September 2021.
1. 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 charter is available from 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; and monitoring Group management’s implementation of
and performance with respect to that agreed corporate strategy.
> Financial and risk management – includes approving the Group’s budgets and other performance indicators and monitoring
progress against them; approving and monitoring financial and other reporting, internal and external audit plans; setting the
Group’s financial and non-financial risk appetite and approving enterprise risk management plans; and monitoring the progress
of major capital expenditure, acquisitions and divestitures within the scope of Board approved delegations.
> Corporate governance – incorporates overseeing Computershare’s corporate governance framework, including approving
Computershare’s statement of values and code of conduct as well as 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 as well
as the monitoring of his or her ongoing performance; and (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. It is also required to provide appropriate information to the Board to ensure it can
effectively discharge its duties.
2. BOARD COMPOSITION
Computershare’s Constitution states that the Board must have a minimum of three and a maximum of ten directors.
Re-appointment is not automatic; 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 also regularly reassesses its composition to ensure that it:
> Aligns with the Group’s strategic objectives
> Has the necessary skills and expertise to provide oversight of those areas of the Group’s business where there is the greatest
scope to increase shareholder value in the future
> Has an appropriate balance of directors who are based in Australia and those who are based in (or who have experience of)
regions where there are significant group operations
>
Is of a size that is conducive to effective discussion and efficient decision making
28
To assist in this process, the Board has developed a skills matrix that sets out the skills and experiences that it has or is looking to
achieve. The current skills and experience of the Board, assessed against the matrix, are 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
7
5
5
7
8
8
7
7
6
6
5
4
7
5
6
5
7
4
7
There were no changes to the composition of the Board during the reporting period.
3. DIRECTOR AND SENIOR EXECUTIVE APPOINTMENTS
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 executives at Computershare also sign employment agreements, except in
certain overseas jurisdictions as a result of local employment practices.
Proposed appointees to the Board and senior executive appointments are subject to appropriate background checks. The format
of these checks is dependent on the residence of the proposed appointee 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 appointee’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 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 as well as operational and technological capability. The Board has typically
held meetings in all the major markets in which the Group operates, which provides new directors, along with the rest of the Board,
the opportunity to meet with management and visit operational facilities during those meetings. The Board looks forward to
resuming these activities when current travel restrictions are lifted.
Directors receive briefings on material macro developments that might impact the Group’s operations, such as market structure
changes and changes to business models. Members of the Risk and Audit Committee also receive updates on financial reporting
and accounting matters as part of continuing professional education. Directors otherwise keep themselves informed of relevant
matters by self-education and attendance at various courses and presentations and may also request that the Company provide
them with specific development opportunities which they may consider necessary to improve their skills and knowledge.
29 | COMPUTERSHARE | ANNUAL REPORT | 2021
CORPORATE GOVERNANCE STATEMENT 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:
SIMON JONES
M.A. (Oxon), A.C.A.
Position: Chairman
Age: 65
Independent: Yes
Years of service: 16
Term of office
Simon Jones was appointed to the Board
in November 2005 as a non-executive
director. Simon was appointed as
Computershare’s Chairman in November
2015 and was last re-elected by
shareholders in 2019.
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
Board Committee membership
Chair of the Nomination Committee
Member of the Risk and Audit
Committee
Member of the People and Culture
Committee
STUART IRVING
CHRISTOPHER MORRIS
Position: Chief Executive Officer
Age: 50
Independent: No
Years of service: 7
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
Position: Non-Executive Director
Age: 73
Independent: No
Years of service: 43
Term of office
Chris Morris and an associate
established Computershare in 1978.
Chris was appointed Chief Executive
Officer in 1990 and oversaw the listing of
Computershare on the ASX in 1994.
He 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 2018.
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 2009)
Board Committee membership
Member of the Nomination Committee
30
TIFFANY FULLER
B.Com, GAICD, ACA
JOSEPH VELLI
BA, MBA
ABI CLELAND
B.Com, BA, MBA.
Position: Non-Executive Director
Age: 51
Independent: Yes
Years of service: 7
Position: Non-Executive Director
Age: 62
Independent: Yes
Years of service: 7
Position: Non-Executive Director
Age: 48
Independent: Yes
Years of service: 3
Term of office
Tiffany Fuller was appointed to
the Board on 1 October 2014 as a
non-executive director. Tiffany was last
re-elected in 2019.
Term of office
Joseph Velli was appointed to the Board
on 1 October 2014 as a non-executive
director. Joseph was last re-elected in
November 2020.
Term of office
Abi Cleland was appointed to the
Board as a non-executive director on
14 February 2018 and was re-elected by
shareholders in November 2020.
Skills and experience
Tiffany is an experienced public
company non-executive director
with broad experience in chartered
accounting, corporate finance,
investment banking, funds management
and management consulting in Australia
and globally.
Tiffany’s skills include finance and
accounting, strategy, M&A, risk and
governance. Her career includes roles
at Arthur Andersen and Rothschild and
spans multiple industry sectors including
financial services, technology, retail,
resources and telecommunications.
Other directorships and offices
Non-Executive Director of Washington
H. Soul Pattinson & Company Limited
(appointed in 2017)
Non-Executive Director of Smart Parking
Limited (resigned December 2020)
Board Committee membership
Chair of the Risk and Audit Committee
Member of the Nomination Committee
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.
Non-Executive Director of Cognizant
Technology Solutions Corporation
Board Committee membership
Member of the People and Culture
Committee
Member of the Nomination Committee
Skills and experience
Abi Cleland has extensive global
experience in strategy, M&A, digital
and business growth. She has held
senior executive roles in the industrial,
retail, agriculture and financial services
sectors at companies including ANZ,
Amcor, Incitec Pivot, Caltex after
starting her career at BHP. Over the last
five years Abi set up and ran an advisory
and management business, Absolute
Partners which focused on strategy,
M&A and building businesses leveraging
disruptive changes.
Other directorships and offices
Non-Executive Director of Orora Limited
(appointed in 2014)
Non-Executive Director of Sydney
Airport Limited (appointed in 2018)
Non-Executive Director of Coles Group
Limited (appointed in 2018)
Board committee membership
Member of the People and Culture
Committee
Member of the Nomination Committee
31 | COMPUTERSHARE | ANNUAL REPORT | 2021
CORPORATE GOVERNANCE STATEMENT LISA GAY
BA, LLB
PAUL REYNOLDS
BA, PhD
Position: Non-Executive Director
Age: 59
Independent: Yes
Years of service: 3
Position: Non-Executive Director
Age: 64
Independent: Yes
Years of service: 3
Term of office
Lisa Gay was appointed to the Board
as a non-executive director on
14 February 2018 and was re-elected by
shareholders in November 2018.
Term of office
Paul Reynolds was appointed to the
Board as a non-executive director on
5 October 2018 and was re-elected by
shareholders in November 2018.
Skills and experience
Lisa Gay is a highly regarded business
leader with extensive financial services
experience in funds management,
investment banking, and stockbroking.
She was formerly Chair of the Australian
Securities and Investment Commission’s
Markets Disciplinary Panel and
Deputy Chair of the Indigenous Land
Corporation. From 1990-2010 Lisa was
general counsel and managing director
of Goldman Sachs Group Australia.
Other directorships and offices
Acting Chair of Victoria Funds
Management Corporation
Non-executive Director of Koda Capital
Member of the Council of Trustees of the
National Gallery of Victoria
Board committee membership
Chair of the People and Culture
Committee
Member of the Nomination Committee
Skills and experience
Paul Reynolds has gained extensive
leadership skills from his previous
experience in CEO and Chairman
positions with complex, large-scale
infrastructure enterprises. He was a
member of the board at British Telecom
from 2001-2007 and CEO of one of its
largest businesses, BT Wholesale, where
he led the global technology divisions
and many of its biggest transformation
programs. From 2007-2012, Paul was
CEO of Telecom New Zealand, during
the world’s first structural separation
into independent retail and network
companies. Paul is based in the UK.
Other directorships and offices
Non-Executive Chairman of 9 Spokes
Limited (appointed in 2014)
Non-Executive Chairman of STV
Group plc
Non-Executive Director of Talk Talk
Telecom Group Limited
Board committee membership
Member of the Risk and Audit
Committee
Member of the Nomination Committee
32
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 (six out of eight) are independent (and were so throughout the reporting period). The two directors who are not
considered to be independent are Chris Morris, due to his substantial shareholding in the Company, and Stuart Irving, as the
current Group Chief Executive Officer.
To determine the independence of a director, the Board must consider several 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 their judgement independently
In relation to the Chairman, Simon Jones, the Board notes that he was first appointed as a non-executive director in November
2005 and subsequently as Chairman in November 2015. The Board has considered and is satisfied that Mr Jones’s tenure as a
director does not have any impact on his capacity to bring an independent judgement to bear on issues before the Board or to
act in the best interests of the Company and its shareholders generally. The Board also notes that Joseph Velli is a director of
Cognizant Technology Solutions Corporation, a company which supplies IT and business outsource services to the Group. The
Board has considered this relationship and is satisfied that Mr Velli’s position as a director of Cognizant Technology Solutions
Corporation does not have any impact on his capacity to bring an independent judgement to bear on issues before the Board.
The Board has appropriate procedures in place to manage circumstances where a matter relating to Cognizant Technology
Solutions Corporation might be under consideration by the Board.
5. BOARD MEETINGS AND REPORTS
The Board’s pre-pandemic meeting schedule included four in-person meetings each year as well as a series of scheduled update
meetings. The Board would also meet as required to discuss and, if appropriate, approve specific strategic initiatives contemplated
by the group. When the Board met in person, those meetings would generally take place over three days and provide the Board
with the opportunity to meet senior management relevant to the agenda for the meeting. At its meetings the Board discusses
the Group’s results, prospects, strategy (both short and long-term), operational performance and other matters, including legal,
governance and compliance issues.
The Committees of the Board also meet regularly to fulfil their duties (as discussed further below).
Computershare’s directors and group management are located across multiple locations in Australia, North America and the UK.
Given pandemic-related travel restrictions, the Board currently conducts its meetings ‘virtually’. The Board continued to meet more
frequently in FY21 than is typical, with the standard Board calendar being supplemented by additional update meetings. The Board
also established a sub-committee to specifically consider the acquisition of the Corporate Trust business of Wells Fargo that was
announced on 24 March 2021. The Board held additional meetings to approve that acquisition and the renounceable accelerated
rights issue that took place to partly fund it and directors were also members of the Due Diligence Committee that was established
to oversee the rights issue documentation.
Group management provides monthly reports to the Board detailing current financial information concerning the Group.
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 Board received additional reporting during the initial stages of the
Covid pandemic, which provided the Board with strong oversight of business continuity and remote working arrangements, trading
updates across business lines, enhanced cash and liquidity reporting as well as how key risks within the group were being managed.
6. BOARD COMMITTEES
To assist in discharging its responsibilities, the Board has established three committees.
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 Committee also reviews material legal matters and receives updates
on reports made under the Group’s Whistleblower program and Financial Crime Unit.
The Risk and Audit Committee is chaired by Non-Executive Director, Tiffany Fuller. The Committee currently has two other
members, Simon Jones and Paul Reynolds. Lisa Gay was also a member of the Committee during FY21 and recently stood down
from that Committee to assume the Chair of the People and Culture Committee. 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 www.computershare.com/governance.
33 | COMPUTERSHARE | ANNUAL REPORT | 2021
CORPORATE GOVERNANCE STATEMENT 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 www.computershare.com/governance.
People and Culture Committee
In FY2021, the Human Resources and Remuneration Committee was renamed the People and Culture Committee and its remit was
further expanded across the employee life cycle at Computershare. The People and Culture Committee’s principal functions are
to advise the Board on matters relating to performance, talent and succession, culture and inclusion and diversity, as well as the
remuneration of the Group’s key management personnel and more broadly across the Group.
In relation to remuneration-related matters, the Committee considers, reviews and makes 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 executives
> 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 executives
> 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
In relation to people and culture matters, the Committee considers, reviews and makes recommendations to the Board about the
following matters:
> Succession planning for senior management and development frameworks for key talent
> The effectiveness of the Group’s diversity policies and initiatives
> Monitoring surveys conducted by the Company in relation to the culture of the organisation; assessing performance against
measurable objectives for achieving diversity on an annual basis, including the relative proportion of women at all levels; and
Computershare’s compliance with external reporting requirements
The Committee is currently chaired by Lisa Gay, who assumed that role from Joseph Velli at the start of FY22. Joseph Velli remains
on the Committee as a member, together with Simon Jones and Abi Cleland. Pursuant to its Charter, the Committee must always
be comprised of a majority of independent directors.
The Committee has access to Group management and, where necessary, may consult independent experts to discharge its
responsibilities effectively.
The People and Culture Committee is governed by a Board-approved charter. A copy of this People and Culture Committee Charter
is available from www.computershare.com/governance.
For details of directors’ attendance at Committee meetings, see the Directors’ Report, which starts on page 41 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 and does not mandate that directors must hold a minimum shareholding in the Company. As at the date of
this report, all non executive directors hold 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 2021, see the Remuneration Report, which starts on page 44
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.
34
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. There is a standing agenda item
at Board meetings 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 questionnaires relating to Board and Committee performance during the reporting period, and the Board
and relevant Committee 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 can 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 People and Culture Committee.
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, including its exposure to environmental and social risks.
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 125) 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 reviewed and assessed the Group’s risk management practices throughout the year and also
undertook a formal review of the Group’s risk management framework during the reporting period and was satisfied that it
remained sound.
11. DIVERSITY AND INCLUSION
This summary outlines our progress during FY21 and covers our focus areas for FY22.
Progress during FY21
During the past year, we have focused on the creation and engagement of our Employee Resource Groups (ERG), realigned our
D&I champions and further embedded D&I in our corporate culture through regular communications and events. We now have D&I
champions across all business lines and geographies through our Women4Women (W4W), Black Leadership Group (BLG), Purple
Pride ERGs and D&I Working Groups.
ERGs can help make specific aspects of D&I more tangible to everyone and help contribute to a culture of inclusivity and equality.
ERGs support the employee experience and drive engagement in three main ways:
Peer-to-peer support
Raising awareness
Providing insight
Providing a space for employees to
support each other, to express concerns
they may have and spend time with
people who better understand their
experiences. This can improve their day
to day experience at work by helping
them to feel less isolated, receive
support and to grow in confidence.
Promoting a better understanding
of minority groups, making their
experiences more visible across the
organisation through company-wide
communication, D&I focus weeks,
training, webinars, small group
discussions and spotlight articles. This
supports inclusion more widely and
empowers others to step up as allies
and improve the workplace culture for
everyone.
Feeding back concerns, opportunities
and suggested improvements to the
D&I steering committee, creating
opportunities for dialogue in a structured
way and providing employees with
a greater voice to help inclusion be
embedded more securely within
Computershare.
The widespread move to remote working has made it easier to organise global events and reach a broader audience. Both external
and internal guest speakers have led webinars and small discussion groups on topics that have been requested by our employees
and by ERGs.
Computershare’s Change A Life charitable foundation selected a D&I charitable partner to support, Black Girls CODE. Their
mission is to build pathways for young women of colour to enter the tech marketplace, by introducing them to skills in computer
programming and cutting-edge technologies.
This year, we saw an increase in the scores for every D&I related question in our Global Employee Survey, reflecting the impact of
our communication, awareness raising and engagement efforts.
35 | COMPUTERSHARE | ANNUAL REPORT | 2021
CORPORATE GOVERNANCE STATEMENT Over the past year we also:
> Developed more targeted recruitment advertising focused on attracting talent from minority groups
>
Incorporated testimonials from armed service veteran employees in our recruitment activities as well as from members of our
Employee Resource Groups
> Raised awareness of D&I objectives, highlighting the case for change and the connection between D&I and business goals
> Enhanced training content with D&I principles
> Ran a paid internship program in South Africa, enabling people with disabilities to gain work experience and exposure to career
opportunities in their field
Feedback on Measurable Objectives
Objective
D&I Champion realignment
Strategy: Drive the execution of our three-year D&I strategy
through our global business lines, with the realigned
champions group and a dedicated D&I Manager
Training: Further extend the D&I training available via our
Learning Management System and Performance Management
toolkit with the aim of continuing to raise awareness and
improve key outcomes in line with our D&I strategy
Communication: Continue to deliver regular, high-quality
D&I-related communications across our staff
Measurement
Complete. Through Employee Resource Groups we have D&I
representation across all regions and business lines.
D&I Manager appointed in 2020 and D&I representation
embedded as a key measure across all regions and business lines.
As we come to the completion of our three-year strategic plan,
we are refreshing our strategy with action plans for the next
three years.
Building upon last year’s rollout of a new digital learning platform
globally, we’ve increased personalisation and added D&I training
through our mandatory module (Computershare and Me), where
we embedded content on inclusion and unconscious bias. As
part of our Employee Resource Groups and D&I focus weeks, we
created online resources accessible to all employees.
Through our Employee Resource Group events and other
regularly scheduled diversity, inclusion and wellness events, we
ran communications campaigns about inclusion, bringing one’s
whole self to work, global diversity, LGBTQ+ and unconscious
bias awareness. We also created an online library specific to
D&I-related topics.
Reporting: Continue to develop the D&I reporting available
across all data categories in line with the global People data
strategy
Defined, developed and implemented legal/regulatory and Board
diversity reporting requirements and identified opportunities to
enhance reporting and insight with our current data capabilities.
Gender diversity statistics for FY21
The table below includes data on global gender statistics at a global level as of 30 June 2021.
Observations include:
> Representation on the Computershare Board is currently 38% female and 63% male (three out of eight are female)
> The percentage of our overall staff that are women (54%) has not changed year-on-year
> The percentage of females in executive positions (28%) has not changed year-on-year
> When considering the two most senior management categories combined (CEO direct reports and company executives), female
representation has increased slightly (from 27.4% to 27.6%) because of the greater numbers of people classified as company
executives in FY21
> While the numbers of senior female managers increased in FY21, the overall proportion of women in this role decreased slightly
(from 38.7% to 37.4%) because the number of male senior managers increased at a greater rate
Board (inc. CEO)
Direct reports of CEO
Company Executive*
Senior Manager*
Manager
Other
Total
F
3
3
42
208
751
M
5
13
105
348
831
5,456
6,463
4,220
5,522
F%
38%
19%
29%
37%
47%
56%
54%
M%
63%
81%
71%
63%
53%
44%
46%
Total
8
16
147
556
1582
9,676
11,985
Data valid as of 30 June 2021.
* Company Executive means a person reporting to a direct report of the CEO.
* Senior Manager means a person reporting to a Company Executive.
Change to
Female
=
=
=
-
=
=
=
36
FY22 focus areas and objectives
Objective
Measurement
Strategy: Our D&I Manager will drive the execution of a
refreshed, three-year D&I strategy through our global business
lines with D&I champions aligned to regions and business lines.
To be measured using statistics from diversity related programs,
our People Management system, surveys, performance reviews,
exit interviews, employee referrals and open discussion forums.
Communication: Continue to deliver regular, high-quality
D&I-related communications to our staff.
Engagement: Generate more employee involvement in
D&I related activities and participation in the creation of
people-related policies and processes.
Engagement: Provide training that is relevant and timely to
reflect the needs of our global organisation and to support the
growth of minority groups.
To be measured using reporting from our internal
communications reporting system and feedback from our Global
Employee Survey.
To be measured by the number of people participating in D&I
and ERG events; the increase or decrease in the number of
participants; and ratings from responses in the Global Employee
Survey that relate to D&I.
To be measured using statistics from our Learning Management
System.
Reporting: Continue to enhance the D&I reporting available
across all data categories in line with the global People data
strategy.
Required reporting on gender and other demographics delivered
accurately and on time. Enhancements will be measured through
project management tracking.
Board: The Computershare board should have at least 30%
male and 30% female directors.
To be measured using gender diversity statistics compiled for the
Annual Report.
Our D&I Policy is available at www.computershare.com/governance.
12. WORKPLACE GENDER EQUALITY REPORT
In each country in which Computershare operates, the Company complies with legislated diversity reporting requirements. In
Australia, Computershare met its reporting requirements under the Federal Government’s Workplace Gender Equality Act 2012,
including submitting an annual public report on 17 August 2021.
A copy of this report is available from 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 that 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, the period between 15 June and the Company’s release of its
full-year results and other such 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 the Schedule to the Securities Trading Policy. It is reviewed and updated as appropriate,
having regard to any changes in the structure of Group management or the creation of new roles within it. An up-to-date copy of
the Board-approved Securities Trading Policy is available from www.computershare.com/governance
37 | COMPUTERSHARE | ANNUAL REPORT | 2021
CORPORATE GOVERNANCE STATEMENT 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 2021 as detailed on page 125 of this Annual Report. The Board also receives a declaration from the Chief Executive
Officer and the Chief Financial Officer that the Declaration from them set out in the Annual Report has been founded on a sound
system of risk management and internal control; and that the system is operating effectively in all material respects in relation to
financial reporting risks. 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 2020.
Where any periodic corporate report is released by Computershare to the market that is not otherwise audited or subject to review
by its external auditor PWC, Computershare ensures that the content of the report is subject to extensive review and sign off by
senior members of staff, which includes the allocation of material disclosures to designated persons to verify the disclosures by
reference to appropriate source documents or, if no source documents are available, by persons with the knowledge and expertise
to confirm the accuracy and completeness of the disclosure. All corporate financial reporting is also reviewed by the Risk and Audit
Committee or, if applicable, a designated sub-committee of the Board.
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. OUR VALUES AND ETHICAL STANDARDS
Computershare recognises the need for directors and employees to perform to the highest standards of behaviour and business
ethics. The Company has adopted the “Being Purple” ways of working, which outline our values as an organisation and the conduct,
behaviours and professional attributes we want to promote and reward. A detailed overview of these values is set out on page 21 of
this Annual Report.
The Board has also 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 also act in accordance with the law. The Risk and Audit Committee also receives a quarterly report that includes
information on employee misconduct matters.
A copy of the Group’s Board-approved Code of Conduct is available from the corporate governance section of our website.
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 appropriately notified of
information necessary to assess Computershare’s performance and are able to access it. 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. Since 2017,
the Company has conducted its AGM as a hybrid meeting, which provides an opportunity for shareholders to attend the meeting
via an online platform. Attending the meeting online enabled shareholders to view the AGM live, ask questions and cast direct
votes at the appropriate times whilst the meeting was in progress. As a result of pandemic-related restrictions, the 2020 AGM
was held as a fully virtual meeting.
> The Company’s website, which contains information regarding the Company, 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. The Company also releases new and substantive investor
presentations on the ASX announcements platform.
> 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 during the meeting are encouraged to vote electronically in advance via Computershare’s service known as InvestorVote,
where they can view an electronic version of the voting form and accompanying materials as well as 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. All resolutions are decided by way of a poll.
38
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. Under the policy the Board must approve the text of any announcement relating to the
annual and half year financial reports as well as any other information for disclosure to the market that contains or relates to
financial projections, statements as to future financial performance or changes to the policy or strategy of Computershare (taken
as a whole). Announcements that do not require the approval of the Board can be approved for release by the Chief Executive
Officer, and routine administrative announcements may be made by the Company Secretary. Directors are also provided with
copies of material announcements once made.
In order to effectively manage its continuous disclosure obligations, the Chief Executive Officer has also established a Disclosure
Committee to provide guidance on the following matters:
> Considering what information needs to be released to the market by Computershare.
> Referring announcements to the Board for approval where required.
> Ensuring there are adequate systems for ensuring 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 Group General Counsel and Company Secretary. When an issue that should be referred to the board under company policy has
an urgency that prevents its consideration by the full Board, all available directors in conjunction with the Disclosure Committee
may approve an announcement relating to that issue to the market.
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), the Chief Executive Officer
(or, if the Chief Executive Officer is unavailable, the Chairman, Chair of the Risk and Audit Committee or 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 at
www.computershare.com/governance
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. Audit services have been put out to tender since
their initial appointment.
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 64 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 63 of this Annual Report). The Board has a formal policy for reviewing all non-audit services provided by
PricewaterhouseCoopers that is administered by the Risk and Audit Committee.
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 Chair 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 members 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
> Evaluate and improve the effectiveness of risk management, control and governance processes as well as 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 within specific timeframes, which are
actively monitored. All internal audits are conducted in accordance with the Institute of Internal Auditors (IIA) Standards for the
Professional Practice of Internal Auditing.
39 | COMPUTERSHARE | ANNUAL REPORT | 2021
CORPORATE GOVERNANCE STATEMENT 21. ANTI-BRIBERY AND CORRUPTION
The Board has approved an Anti-Bribery and Corruption policy, which sets out Computershare’s clear statement of zero tolerance
for acts of bribery and corruption and confirmation that Computershare will not tolerate its employees or contractors being
involved in acts of bribery and corruption in any form. This is reinforced in the Group Code of Conduct.
The Anti-Bribery and Corruption policy is part of the framework for the Computershare Group-wide Anti-Bribery and
Anti-Corruption (ABC) Program, which is under the responsibility of the Group Risk and Compliance function. All breaches of the
policy must be reported to the compliance function and ultimately to the Rick and Audit Committee.
A copy of the Board-approved Anti-Bribery and Corruption policy is available from the corporate governance section of
www.computershare.com/governance
22. WHISTLEBLOWING
The Board has approved a Whistleblower Policy that 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 an externally managed hotline and web portal, or by directly contacting designated regional
Whistleblower officers. Any reported concerns are assessed and handled by these 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 and more serious matters may be escalated to the Committee within a reporting period where appropriate.
All Computershare employees receive annual training about the Company’s Whistleblower Policy, including how to detect and
report improper conduct. A copy of the Whistleblower Policy is available from www.computershare.com/whistleblowing.
23. CORPORATE RESPONSIBILITY
For details relating to the Company’s corporate responsibility initiatives, see pages 17 to 20 of this Annual Report.
A copy of the Board-approved Corporate Responsibility Policy is also available from the corporate governance section at
www.computershare.com/governance.
24. 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.
The maintenance of a safe and healthy working environment for our staff globally was identified as the key priority for the group
at the outset of the Covid pandemic. Remote working measures were deployed for more than 90% of our staff and, where roles
could not be performed remotely, strict Covid safety protocols were implemented across all work sites in accordance with local
requirements.
25. 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, by coordinating the completion and dispatch of Board meeting agendas and papers
as well as by 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 Group General Counsel of Computershare and is a Fellow of the Governance Institute of Australia.
All directors have access to the advice and services of the Company Secretary.
40
DIRECTORS’ REPORT
The Board of Directors of Computershare Limited has pleasure in submitting its report for the financial year ended 30 June 2021.
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)
Abigail Pip Cleland
Tiffany Lee Fuller
Lisa Mary Gay
Christopher John Morris
Paul Joseph Reynolds
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 23 to 24 and form part of
this report.
CONSOLIDATED PROFIT
The profit of the consolidated entity for the financial year was $189.2 million after income tax. Net profit attributable to members
of the parent entity was $189.0 million, which represents a decrease of 18.8% on the previous year’s result of $232.7 million.
Profit of the consolidated entity for the financial year after management adjustment items was $283.7 million after income tax and
non-controlling interests. This represents a decrease of 6.6% on the 2020 result of $303.8 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
2021
$000
2020
$000
188,974
232,657
Amortisation of acquisition related intangible assets
42,721
42,597
Acquisitions and disposals
Acquisition related expenses
Gain on disposal
Benefits of tax losses not previously recognised on Equatex acquisition
One-off tax expense on Equatex IP restructure
Acquisition accounting adjustments
Other
Major restructuring costs
Reversal of provisions
Marked to market adjustments - derivatives
Net profit after management adjustment items
33,618
(9,105)
-
-
-
29,155
(3,240)
1,613
15,656
-
(7,666)
(1,054)
(1,039)
19,939
-
2,752
283,736
303,842
41 | COMPUTERSHARE | ANNUAL REPORT | 2021
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 2020 was declared on 11 August 2020 and paid on 14 September 2020.
This was an ordinary dividend of AU 23 cents per share, franked to 30%, amounting to AUD 124,378,861 ($92,378,204).
An interim dividend was declared on 9 February 2021 and paid on 18 March 2021. This was a fully franked ordinary dividend of
AU 23 cents per share, amounting to AUD 124,370,429 ($92,371,942).
A final dividend in respect of the year ended 30 June 2021 was declared by the directors of the Company on 10 August 2021 and
paid on 13 September 2021. This was an ordinary dividend of AU 23 cents per share, franked to 60%. As the dividend was not
declared until 10 August 2021, a provision was not recognised as at 30 June 2021.
REVIEW OF OPERATIONS
The review of operations is outlined in the Group Operating Review set out on pages 23 to 24 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 23 to 24 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 matters or circumstances have arisen since the end of the financial year which is not otherwise dealt with in this report
or in the consolidated financial statements that have 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.
LIKELY DEVELOPMENTS AND FUTURE RESULTS
A discussion of business strategies and prospects is set out on pages 25 to 27 and forms part of this report.
ENVIRONMENTAL REGULATIONS
The 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 2021 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.
42
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
AP Cleland
TL Fuller
LM Gay
SD Jones
CJ Morris
PJ Reynolds
JM Velli
Number of
ordinary
shares
Number of
performance
rights
Number of
share
appreciation
rights
220,025
294,252
367,406
14,164
16,148
21,939
51,917
32,091,083
8,000
17,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Meetings of directors
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
People and
Culture Committee
Meetings
A
18
18
18
18
18
18
16
17
B
18
18
18
18
18
18
18
18
A
-
-
8
8
8
-
7
-
B
-
-
8
8
8
-
8
-
A
4
4
4
4
4
4
4
4
B
4
4
4
4
4
4
4
4
A
-
12
-
11
12
-
-
9
B
-
12
-
11
12
-
-
12
SJ Irving
AP Cleland
TL Fuller
LM Gay
SD Jones
CJ Morris
PJ Reynolds
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 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
Computershare’s constitution allows the Company to indemnify, where permitted by law, officers of the Company for liability
and legal costs they incur when acting in that capacity. There are similar indemnities in favour of officers of controlled entities.
Computershare purchases insurance for amounts that the Company or its controlled entities are liable to pay under these
indemnities. The insurance policy also insures Directors, Officers, Company Secretaries and employees (including former Directors
and Officers) against certain liabilities (including legal costs) they may incur in carrying out their duties. For this Directors and
Officers insurance, we paid premiums of $2,367,960 excluding taxes during FY2021.
43 | COMPUTERSHARE | ANNUAL REPORT | 2021
DIRECTORS’ REPORT REMUNERATION REPORT
CHAIRS’ LETTER
Dear Shareholders
On behalf of the Board, we are pleased to present Computershare’s Remuneration Report for the year ended 30 June 2021.
This report contains detailed information regarding the remuneration arrangements for the directors and senior executives
who were Key Management Personnel (KMP) during FY2021 and aims to demonstrate the Company’s link between strategy,
performance and reward outcomes.
OVERVIEW OF THE YEAR
In FY2021, we have had a full year of impact from Covid-19 on our employees, our customers and our business. Management
focused on supporting the physical and mental well-being of our workforce as a top priority, thereby enabling our people to do
what was needed of them, both for themselves and their families as well as for our clients and their customers. The Board and
our executive team are immensely grateful to our employees for their determination, resilience and ingenuity. Our teams had to
find new ways to collaborate, were able to respond to the work from home environment and rapidly deliver digital solutions for
customers. There were of course challenges at times with productivity and staff availability, but the strength of the group allowed
us to keep delivering for our clients and customers, week in and week out.
Many of the same challenges faced in FY2020 continued to impact through FY2021. Global interest rates remained at historically
low levels, resulting in margin income almost halving in the year, whilst pandemic related support measures and restrictions
impacted revenues in Mortgage Services and Business Services. Notwithstanding these headwinds, our financial results and
returns to shareholders in FY2021 reflect the diversity and strength of our businesses and our ability to support our clients and
adapt to a rapidly changing external environment. In FY2021, management revenue excluding margin income was up 3.6% and
management EBIT ex MI was up 12.6% compared to FY2020 which meant that our second half was effectively the best operating
result (excluding margin income) in the company’s history. This strength enabled us to deliver on the upgraded guidance we
provided in February.
We are proud of the investment we’ve made in digital learning, meaning that all our staff, regardless of their location, can access
thousands of online courses on demand, in a variety of languages. To further enable usage of this, we’ve equipped staff in South
Africa with rechargeable inverters to help them stay online despite local power outages. Globally, we’ve maintained a keen focus on
mental health, holding several webinars with expert speakers, running regular meditation sessions and offering a variety of support
to staff who need it. We’ve also increased our Diversity & Inclusion footprint with several new employee resource groups, including
a Black Leadership Group and Purple Pride, a group focused on LGBTQ+ issues. We also continue to deliver on our commitment to
making Computershare a better place to work for all our employees and providing equal opportunities for everyone, regardless of
gender, ethnicity, sexual orientation or age.
We look forward to welcoming more than 2,000 new employees from Wells Fargo to our new business, Computershare Corporate
Trust (CCT). Integrating this new division is one of our main priorities for the year ahead.
OUTCOMES FOR FY2021
In FY2021, Stuart Irving and his team successfully led the organisation through the challenging market and business operating
conditions associated with the pandemic. They managed to maintain employee engagement through a predominantly remote
working environment, and client satisfaction levels remained strong.
As an ASX listed truly global business, with senior management located around the world, maintaining a remuneration framework
that meets the expectations of all our stakeholders in all regions, is a challenge. The Board is mindful of the external focus on
overall remuneration levels and actively seeks feedback from external stakeholders on the design of the reward structure for the
CEO and Executive KMP.
The Board set robust and challenging performance metrics for our FY2021 Short-Term Incentive (STI) plan that were focused
on the things that management could control to maximise shareholder value as we faced a year of Covid-19 uncertainty and
consequently set robust challenging targets.
While headwinds have continued to constrain our bottom line, our underlying businesses’ performance was strong and we are
pleased to report that the majority of our performance measures were achieved above target, including our budgeted EBITDA on a
constant currency basis and our EBIT (excluding margin income). This resulted in STI payments for KMP being awarded at between
65% and 75% of maximum. These outcomes are reflective of the resilience in the underlying business and the solid achievements
delivered by the management team.
44
The FY2019 Long-Term Incentive (LTI) grant that was tested as at 30 June 2021 did not vest. As foreshadowed last year, this grant
was materially impacted by global interest rates cuts at the start of the pandemic and the corresponding reduction in margin
income that has occurred since then.
In FY2021, the Human Resources and Remuneration Committee was renamed the People and Culture Committee (PACC) in keeping
with its evolution and a broadened remit, reflecting its breadth of focus across the entire employee life-cycle at Computershare.
The Committee takes an active view of remuneration, performance, talent and succession, culture and inclusion and diversity.
Reflecting on FY2021, the Board feels immense pride in the commitment and hard work demonstrated by our team members in
serving our customers during extremely challenging times. As a Board, we aim to live up to the high standards expected of our
team and have attempted to strike the right balance in the design and outcomes of KMP reward in what has been a complex and
challenging year.
We look forward to continuing conversations with our stakeholders; we welcome your feedback to ensure this report continues to
meet the standards and expectations you have of our unique organisation.
With regards
SD Jones
Chair – Board
LM Gay
Chair – PACC
45 | COMPUTERSHARE | ANNUAL REPORT | 2021
DIRECTORS’ REPORT CONTENTS
1. Remuneration Snapshot
1.1 Key Management Personnel
1.2 CPU performance and KMP outcomes in FY2021
1.3 KMP realised pay in FY2021
2. Remuneration strategy
2.1 Remuneration and governance framework
2.2 Remuneration structure
2.3 KMP remuneration mix
2.4 FY2021 changes to incentive plans
2.5 Short-term incentive plan
2.6 Long-term incentive plan
2.7 Other remuneration
3. KMP remuneration outcomes
3.1 Relationship between remuneration and Group’s performance
3.2 FY2021 STI outcomes
3.3 FY2021 LTI outcomes
4. Non-executive directors
5. KMP contractual arrangements
6. Proposed changes to FY2022 LTI plan design
7. Statutory remuneration disclosures
7.1 Remuneration of directors and other KMP
7.2 Short-term salary and fees, cash profit share and bonuses,
long-term other, post-employment benefits
7.3 Other
This report is prepared in accordance with section 300A of the Corporations Act 2001 (Cth) (Corporations Act) for Computershare
for the year ended 30 June 2021. The information provided in this Remuneration Report has been audited as required by section
308(3C) of the Corporations Act, apart from where it is indicated that the information is unaudited.
1. REMUNERATION SNAPSHOT
1.1 KEY MANAGEMENT PERSONNEL (KMP)
Computershare’s KMP comprise the Directors of the company and select senior executives who have the authority and
responsibility for planning, directing and controlling the activities of the company directly or indirectly. All KMP are assessed each
year. Each KMP listed below held their position for all of FY2021.
Non-executive director
Executive KMP
Abigail P Cleland
Tiffany L Fuller
Lisa M Gay
Simon D Jones
Chris J Morris
Paul J Reynolds
Joseph M Velli
Stuart J Irving
President and Chief Executive Officer
Nick Oldfield
Chief Financial Officer
Mark L McDougall
Global Chief Information Officer
Naz Sarkar
Global Head of Issuer Services
1.2 CPU PERFORMANCE AND KMP OUTCOMES IN FY2021
Over the FY2021 period, shareholders have enjoyed an approximately 25% share price increase between 1 July 2020 and
30 June 2021. Whilst the financial performance was hindered by reduction in margin income, pleasingly the group delivered
12.6% EBIT excluding margin income (ex MI) growth demonstrating the underlying resilience and growth of the operating
businesses. We continued to use our strong operating cashflows to continue to invest in our business and to support our
shareholders, maintaining our interim and final dividends at 23 cents. The performance of the Group is reflected in the KMP
outcomes for FY2021.
46
Fixed Remuneration
Short-Term Incentive
Long-Term Incentive
There were no general Fixed Remuneration
increases to KMP in FY2021. The increases
given below were in relation to change in role
or end in assignment.
FY2021 STI outcomes of
between 65% and 75% of
maximum entitlement for
executive KMP.
Naz Sarkar’s expat arrangement ended
on 17 November 2020. Separately, his
remuneration was benchmarked against the
relevant local market in the UK. To remain
competitive with the external market as the
head of our largest business unit, he received
an increase of 33% to his base salary effective
1 July 2020.
Nick Oldfield was appointed to the role of Chief
Financial Officer (CFO) effective 1 January
2020. At the time of his appointment, no
changes were made to his salary. In FY2021, a
review was conducted to benchmark his overall
remuneration against CFO roles based in the
USA. On that basis, his target STI opportunity
was changed from being 19% of his total
remuneration to 25% of his total remuneration,
which represents a 7.6% increase to his total
remuneration. No changes were made to his
base salary or LTI quantum. Mr Oldfield also
retained his duties as Global Head of Mortgage
Services during the financial year.
Strong underlying business
performance exceeded
expectations set at the start of
the year. Executive KMP FY2021
STI objectives included EBITDA
relative to budget on constant
currency basis and growth in
EBIT ex MI, which exceeded
expectations.
EBIT ex MI simply removes
the impact of the interest rate
environment and shows the
underlying operating growth
of the business. It is the most
appropriate measure of executive
performance as it reflects the
earnings generated by and directly
controlled by management,
after accounting for all relevant
expenditure including depreciation
of capital items and amortisation
of Mortgage Servicing Rights.
FY2019 LTI vested to nil outcome.
The FY2019 LTI plan was tested on
30 June 2021. 50% of the plan was
measured against relative Total
Shareholder Return (rTSR), and 50%
was measured against an EPS growth
measure.
The threshold TSR hurdle is a relative
TSR (rTSR) percentile ranking of 50%
as against the ASX100. A TSR ranking
of 31st percentile meant there was no
vesting associated with this measure.
An average annual management
EPS growth of 5% is needed over
the three-year performance period
as a threshold. With an average
management EPS growth of -5.7%,
there was no vesting associated with
this measure.
The 3-year EPS performance was
significantly impacted by the reduction
in global interest rates in response
to Covid-19. This reduction in margin
income also flowed through to the
three-year TSR results.
1.3 KMP REALISED PAY IN FY2021 (UNAUDITED)
The table below details actual pay and benefits for KMPs who were employed as at 30 June 2021. This table aims to assist
shareholders in understanding the cash and other benefits actually received by KMPs from the various components of their
remuneration during FY2021.
As a general principle, Australian Accounting Standards require the value of share-based payments to be calculated at the time
of grant and accrued over the performance period and restriction period. The Corporations Act 2001 and Australian Accounting
Standards also require that pay and benefits be disclosed for the period that a person is a KMP. This may not reflect what executive
KMPs actually received or became entitled to during FY2021. The figures in this table have not been prepared in accordance with
Australian Accounting Standards. They provide additional voluntary disclosures.
The treatment of the remuneration elements in this disclosure are as follows:
> Fixed remuneration earned between 1 July 2020 and 30 June 2021. This includes superannuation.
> STI payable as cash and equity under the FY2021 STI plan (which is paid in FY2022 after audited results), and no LTI vested this
year as a result of performance across the performance period that ended 30 June 2021.
> Benefits received between 1 July 2020 and 30 June 2021.
The table below also does not include expatriate costs and associated tax equalisation payments. Whilst these are clearly disclosed
in the statutory remuneration table, the Board does not believe that they represent actual remuneration to the relevant executive
and have therefore been excluded in this table. The difference in the STI outcomes in FY2020 and FY2021 is due to a combination of
the initial impact of Covid-19 on management EPS in FY2020, and the business recovery during FY2021 through the strong growth
in EBIT ex MI.
FY2021 actual package details
FY2021 actual vs max
FY2021 vs FY2020 actual
Employee
FY2021 fixed
(base + benefits)
FY2021
actual
total STI
FY2019 LTI
vesting in FY21
Stuart Irving
1,400,284
1,316,820
Nick Oldfield
827,777
Naz Sarkar
1,005,229
Mark McDougall
514,426
489,001
477,034
244,013
-
-
-
-
FY2021
actual total
remuneration
(base + STI+ LTI)
2,717,104
1,316,778
1,482,263
758,439
FY2021 actual
vs max STI
75%
67%
71%
66%
FY2021 actual
vs max total
remuneration
(base + max
STI + LTI)
FY2021 vs FY2020
actual total
remuneration
(base + STI +
FY18 LTI)
FY2021 vs
FY2020 actual
STI received
52%
58%
59%
57%
138%
203%
261%
166%
116%
124%
161%
115%
1 For SJ Irving and N Oldfield, the maximum STI award is set at 150% of target whereas the maximum award for other KMPs is 175% of target.
2 The non-IFRS information included in the table above has not been subject to audit.
47 | COMPUTERSHARE | ANNUAL REPORT | 2021
DIRECTORS’ REPORT
2. REMUNERATION STRATEGY
2.1 REMUNERATION AND GOVERNANCE FRAMEWORK
Computershare is a global company with more than 90% of revenue generated and workforce located outside Australia. We hire
talent in 20 highly competitive markets, and we compete for this talent across various industry sectors, including financial services
and technology. Therefore, our remuneration practices need to be competitive and flexible to attract, motivate and retain a
talented workforce across all of our markets.
The main aim of our executive incentive strategy and structure is to ensure that executives are rewarded appropriately when they
deliver positive outcomes to our shareholders. In considering remuneration changes, the PACC ensures all executive pay decisions
are based on the following four principles:
> Fairness – ongoing remuneration plan design must motivate and stretch our executives to focus on the right outcomes for our
business and to reward what those executives can influence.
> Alignment – incentive plan design and outcome should align to shareholder experience and company recovery in a meaningful
way while also being mindful of the general employee experience. Plan measures should drive sustained, long-term
organisational growth and success.
> Simplicity – where possible, plan design should be simple to explain and execute. It should strike the right balance between fixed
and at-risk pay.
> Risk management – Board discretion or plan amendments must be applied on a robust basis, ensuring no windfall gains occur to
participants. Due consideration should be given to business and operational risk and the Group’s values and culture through plan
design such as clawback and malus.
The Board (through the PACC) reviews our remuneration framework regularly to ensure it remains aligned to business objectives.
The Committee uses a range of inputs when assessing the performance of outcomes for Executive KMP, taking into account results
and also how those results were achieved. Detailed individual performance assessments, measurement against targeted financial
results, external remuneration benchmarking and an overarching view to the organisation’s values and risk profile are all taken
into account.
BOARD
Sets and oversees the People and Culture Committee mandate. The Board is
responsible for setting remuneration policy and determining non-executive
director and executive KMP remuneration. In addition, the Board is responsible
for approving all targets and performance conditions set under the KMP incentive
plans. The Board delegates responsibility to the People and Culture Committee
for reviewing and making recommendations to the Board on these matters.
PEOPLE AND CULTURE COMMITTEE
The Committee uses a range of inputs when assessing performance and
outcomes of KMP, taking into account results and also how those results
were achieved. Detailed performance assessments, financial results, external
remuneration benchmarking, and an overarching view to our organisation’s
values and risk profile are all taken into account.
MANAGEMENT
EXTERNAL ADVISORS
Provide management information on financial,
customer and risk matters which may impact
remuneration. Where appropriate, the CEO
attends Committee meetings; however, he does
not participate in formal decision making or in
discussions involving his own remuneration.
The Committee may seek and consider advice
from independent remuneration consultants
where appropriate. Any advice from consultants
is used to guide the Committee and the Board
but does not serve as a substitute for thorough
consideration by non-executive directors.
Protocols are in place for the independent
engagement of remuneration consultants.
During FY2021, consultants provided benchmark
data only to the Committee. No remuneration
recommendations relating to KMP were provided.
48
2.2 REMUNERATION STRUCTURE
The remuneration structure for the executive KMP comprises fixed remuneration (FR) and variable at-risk remuneration consisting
of a Short-Term Incentive (STI) and Long-Term Incentive (LTI). Total remuneration is set at a competitive level to attract, retain and
motivate key talent required to successfully operate a complex global organisation.
Attract, motivate and retain
highly skilled employees
Designed to be competitive
in the market where the
executive is located
Reviewed annually and
reflects technical and
functional expertise, role
scope, market practice.
FR
Fixed
remuneration
Reflects performance across the year and is designed to reward
management for achieving financial targets, delivering on strategic
objectives and managing the business in a sustainable manner while
demonstrating our values.
Align executive reward
outcomes to long-term
sustainable shareholder value
creation.
STI
Short-term incentive
(at risk)
LTI
Long-term incentive
(at risk)
Cash
Performance based
Equity
FR comprises salary and
other benefits (including
statutory superannuation). It is
benchmarked to our external
peers and is based on: role and
responsibility; business and
individual performance; internal
and external relativities; and
contribution, competencies and
capabilities.
As a unique, diversified and
truly international business,
it is important for CPU to
benchmark KMP salaries
against both ASX but also
international peers to ensure
we remain competitive in the
global talent pool within which
we operate.
50% of the STI assessment
is paid out in cash.
50% of the STI assessment
is paid in restricted shares
deferred for two years.
STI outcome based on business performance (measured via
financial and strategic non-financial objectives) and individual
performance (measured via financial, strategic and values-based
objectives).
The LTI aligns executives to
overall company performance
through two equally weighted
measures focused on strategic
business drivers and long-term
shareholder return. For FY2021,
on a transitional basis, this
comprises of:
Relative Total Shareholder
Return (rTSR).
Share Appreciation Rights.
Subject to malus, clawback and forfeiture in circumstances
outlined in section 2.5.
49 | COMPUTERSHARE | ANNUAL REPORT | 2021
DIRECTORS’ REPORT 2.3 KMP REMUNERATION MIX
A significant component of executive remuneration is linked to short and long-term Company performance to assist in aligning
executive interests with those of shareholders. Executive remuneration is set with reference to the market median, using the
ASX 25 – ASX 75 and comparable international peers from global markets. With three of our four KMPs based outside Australia,
the People and Culture Committee (PACC) are cognisant of significant differences in the remuneration structure for key executives
across geographies. In particular, for the US market, incentives are more leveraged, LTI hurdles tend to have lower vesting
thresholds, and up to half of the LTI plan tends to be offered in the form of restricted equity. As such, the PACC continue to review
the appropriateness of our remuneration structure to ensure it balances ASX market practices with those of large multinational
organisations based in the US and UK.
CEO & CFO PAY MIX
CEO
(TARGET)
CEO
(MAXIMUM)
CFO
(TARGET)
CFO
(MAXIMUM)
OTHER KMPS PAY MIX
OTHER KMPS
(TARGET)
OTHER KMPS
(MAXIMUM)
30%
12.5%
12.5%
45%
27%
16.5%
16.5%
40%
41%
12%
12%
35%
36%
16.5%
16.5%
31%
44%
9%
9%
38%
38%
12.5%
16.5%
33%
Base pay
STI cash
STI shares
LTI (FY21 LTI grant value)
2.4 FY2021 CHANGES TO INCENTIVE PLANS
In keeping with the reward principles noted in the Chair’s letter, the Board is committed to an incentive plan design that operates so
that targets set at the start of the year remain achievable yet challenging throughout. This is an important consideration to ensure
that the incentive plans motivate and reward our KMPs to deliver sustainable and positive outcomes for the business.
A substantial part of Computershare’s earnings is derived from margin income (income generated by Computershare from holding
money on behalf of clients). The response of central banks to the emerging pandemic in early March 2020, setting interest rates to
historic lows, resulted in an immediate and material impact on our margin income. This historically low interest rate environment
remained in place throughout FY2021.
Up to FY2020, growth in EPS was part of both the STI and LTI plans. For the Board, it was important to ensure that the incentive
plans in FY2021 continued to motivate our KMPs and remain aligned with the shareholder experience.
Therefore, the incentive plans in FY2021 were amended as follows:
FY2021 STI plan – For the CEO and the CFO, the EPS component of the STI plan was replaced with strategic financial measures.
These measures are strongly tied to company performance – their successful delivery underpins the achievement of
Computershare’s business strategy. Section 3.2 of this report details these measures, their assessment and associated outcomes
for the CEO. For the remaining two executive KMPs, the EPS component was replaced with growth in management EBIT ex MI.
Through this measure, management are expected to demonstrate growth in the underlying business to the benefit of shareholders.
Further details of this plan, including hurdles, are in section 2.5. These plan changes will continue in FY2022 and beyond.
FY2021 LTI plan – A transitional LTI plan was established to allow the Board to conduct a comprehensive review of the LTI plan
for FY2022 and beyond. For FY2021, one half of the plan continued to be in the form of rTSR rights, and the other half was in the
form of Share Appreciation Rights (SARs). SARs were included in the plan to align KMP performance to a meaningful recovery
in Computershare’s share price, which, during the pandemic, should occur through strong financial and business management.
Further details of this plan are in section 2.6. As previously stated, this plan design will not continue beyond FY2021.
50
As it was intended that the FY2021 LTI plan would be an interim plan, the Board undertook a comprehensive review of the LTI plan
for FY2022 and beyond. The FY2022 LTI plan design is underpinned by the reward principles noted in the Chair’s letter and is built
upon challenging hurdles that together align the shareholder objectives with effective management performance. Details are set
out in section 6 of this report and also in the Notice of Meeting for Computershare’s 2021 AGM.
It is important to note that margin income continues to remain an important source of Computershare’s revenue. It remains an
important driver of remuneration outcomes across both the LTI plan and the STI plan and the new measures chosen across the two
incentive plans highlight management’s responsibility in setting and executing strategy for the underlying business that drives both
growth and profitability.
2.5 SHORT-TERM INCENTIVE PLAN
CEO & CFO
Other Executive KMP
What is the
opportunity?
For ‘at target’ performance, the CEO has the
opportunity to receive 25% of Total Remuneration
and the CFO has the opportunity to receive 24.5%.
The minimum STI outcome is 0% (if targets are not
met) and maximum is capped at 150% of target
opportunity.
For ‘at target’ performance, Executive KMPs
have the opportunity to receive 18.75% of Total
Remuneration.
The minimum STI outcome is 0% (if targets are not
met), and maximum is capped at 175% of target
opportunity.
What are the
performance hurdles?
Budgeted EBITDA (25%)
Strategic Financial Objectives (50%)
Non-Financial Objectives (25%)
Budgeted EBITDA (35%)
Growth in EBIT ex MI (25%)
Strategic Objectives (15%)
Non-Financial Objectives (25%)
How is the STI paid?
50% in cash, and 50% is deferred into restricted
shares held in deferral for two years following the
performance year.
50% of the STI assessment is paid in cash and
the remaining 50% delivered in deferred shares
(assuming ‘on target’ performance), with measures
aligned to each component.
Treatment of deferred
shares
The deferred shares are subject to service conditions, qualifying leaver provisions and participate in
dividends and/or distributions paid during the restricted period. The number of deferred shares allocated
is determined by dividing the amount to be deferred by the closing share price on the first trading day
following the release of annual results.
What is the
performance period?
How are STI payments
determined?
The performance period for the FY2021 STI plan was 1 July 2020 to 30 June 2021.
STI is assessed at the end of the financial year on the following basis:
Budgeted EBITDA – At threshold achievement (90% of budget), 75% of STI associated with the measure
is paid out. Budget achievement results in 100% payout and stretch achievement (120% of budget) pays
out 150%. Straight-line vesting occurs between threshold, target and stretch.
Growth in EBIT ex MI – For FY2021, the Board set a scale whereby growth of 0% to 10% paid out linearly
between 0% to 100% STI associated with that measure. Above this level of growth, there is stretch in the
STI plan such that for the CEO and CFO, there is a maximum payout of 150% associated with this measure
and, for the remaining KMPs, a maximum payout of 200%.
Strategic Financial Objectives – A set of goals at the outset of the year that underpin the strategic
agenda for the year are selected by the Board for the CEO. The CEO does the same for the remaining
KMPs. Assessment at the end of the financial year against set criteria results in payout between 0% and
150%. The FY2021 criteria and its assessment is listed in detail for the CEO in section 3.2.
Non-Financial Objectives – A set of non-financial objectives relating to customer, culture, risk
management and other metrics relevant for the year (such as management of Covid-19, Mergers &
Acquisitions (M&A) and capital management) are established by the Board for the CEO at the start of
the financial year. The CEO does the same for the remaining KMPs. The FY2021 objectives and their
assessment is listed in detail for the CEO in section 3.2. There is stretch in the STI plan such that for
the CEO and CFO, there is a maximum payout of 150% associated with these objectives and, for the
remaining KMPs, a maximum payout of 200%.
When do the deferred
shares vest?
Vesting occurs on the second anniversary of the grant date of the deferred equity and prior to vesting is
held subject to ongoing employment or qualifying leaver provisions.
Other key features
The Board has the 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.
51 | COMPUTERSHARE | ANNUAL REPORT | 2021
DIRECTORS’ REPORT 2.6 LONG-TERM INCENTIVE PLAN
A transitional LTI plan was established in FY2021 as a specific response to the uncertain environment in the early stages of the
pandemic comprising 50% SARs and 50% performance rights. This plan design will not continue for FY2022 and beyond.
SARs are a right to be allocated a number of shares upon vesting. The number of shares to be allocated is determined by the
difference in share price between the start and end price. If SARs vest, shares are allocated to the participant to the requisite
value with nothing payable by the participant. For FY2021, SARs were determined by the Board to be the most shareholder-aligned
instrument to drive management’s focus over the performance period on recovery and growth.
Who participates?
The CEO, CFO and other senior executives who are identified as being particularly important to the
longer-term future of Computershare.
What type of awards
are granted?
The FY2021 LTI award comprised a grant of two equally weighted instruments: performance rights and
SARs that vest subject to testing against applicable performance hurdles.
A Performance Right is a right to receive a share, subject to meeting conditions noted below.
A SAR is a right to a payment (in shares) calculated based on the increase in share price across the
performance period.
How is the size of any
award calculated?
In FY2021, the CEO received an LTI award equal to 45% of his total remuneration package. For other
KMPs, the value of their LTI award was in a range of 35% to 38% of their total remuneration package.
How is the number of
rights to be awarded
calculated?
Performance Rights – the number of performance rights awarded was calculated by dividing one half of
the FY2021 LTI opportunity by the volume-weighted average price of Computershare shares over the five
trading days following the release of the Company’s FY2020 results on 12 August 2020.
SARs – the number of SARs awarded was calculated by dividing one half of the FY2021 LTI opportunity
by the fair value of SARs (as determined by the Black Scholes pricing model based on the share price
at close on 30 June 2020). Due to the nature of SARs, a face value methodology cannot be used in
determining their value. Therefore, it was necessary to deploy a fair value calculation in determining
their quantum.
What is the
performance period?
The FY2021 LTI plan will be tested over the period 1 July 2020 to 30 June 2023. There is no further
exercise period for SARs, as any SARs that vest will automatically be exercised once tested.
What are the
performance hurdles?
Performance rights
The percentage of performance rights that vest, if any, will be determined by the Board with reference
to the percentile ranking achieved by the Company over the period, compared to the other entities in the
comparator group, as follows:
Relative TSR ranking against peer group
Below the 50th percentile
Equal to the 50th percentile
Between the 50th to 75th percentile
Performance Rights that vest (% of opportunity tied
to Performance Rights)
0%
50%
Progressive pro-rata vesting between 50% to 100%
(ie on a straight-line basis)
At or above the 75th percentile
100%
SARs
The vesting of SARs, if any, will be determined by the Board with reference to the difference between
$13.25, being the share price at close on 30 June 2020 (strike price) and the share price at the end of
the Period, being the 90-day volume weighted average price (VWAP) up to and including 30 June 2023.
Management only receive the difference between the Strike Price and the 90-day VWAP as at
30 June 2023, in the form of equity.
Other key features
The Board has the 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 both malus and clawback mechanisms that may be triggered in certain
circumstances, which include fraud, dishonesty or material misstatement of financial statements.
As at the date of this report, there are 1.1 million performance rights and 1.5 million SARs outstanding under the LTI plan. These
include 0.4 million performance rights and 1.5 million SARs that were granted to eligible executives in the financial year 2021 and
which remain on issue. These rights are due to vest in September 2023 (subject to performance against hurdles).
52
2.7 OTHER REMUNERATION
Like all our employees, KMP can participate in the Group’s general employee share plans. An overview of these plans is disclosed in
note 40a of the financial statements.
3. KMP REMUNERATION OUTCOMES
3.1 RELATIONSHIP BETWEEN REMUNERATION AND GROUP’S PERFORMANCE
One of the key principles of Computershare’s remuneration strategy is to ensure that there is a clear and transparent link between
the remuneration outcomes for executives and Group performance and its consequent impact on shareholder interests. The
following table highlights some of the key financial results for Computershare over the period from the financial year 2017 to the
financial year 2021, with the corresponding average STI outcomes for executive KMP over the same period.
2017
2018
2019
2020
2021
Management adjusted EBITDA (USD million)
540.8
622.6
674.9
646.4
628.2
Management adjusted EBIT ex MI (USD million)
345.4
375.1
343.6
298.7
339.1
Statutory EPS (US cents)1
Management EPS (US cents)1
48.76
55.17
76.57
42.55
33.77
54.41
63.38
70.24
55.57
50.71
Management EPS (US cents) – constant currency2
55.58
62.55
71.08
56.20
50.71
Total dividend (AU cents per share)
36
40
44
46
46
Share price as at 30 June (AUD)
14.14
18.43
16.21
13.25
16.90
Average STI received as % of maximum opportunity for executive KMP (%)
56.8
77.4
71.1
47.3
69.5
1 Earnings per share is restated by adjusting the weighted average number of ordinary shares to incorporate the bonus element in the 2021 rights issue.
2 Translated at FY2021 average exchange rates. Excluding the adjustment for the bonus element of the rights issue, management EPS in constant
currency was 52.46 cents (2020: 56.76 cents).
53 | COMPUTERSHARE | ANNUAL REPORT | 2021
DIRECTORS’ REPORT Computershare’s incentive plans measure performance against a range of financial and non-financial performance. As
demonstrated below, there is a strong overall alignment between Computershare’s incentive plan outcomes to financial
performance. It is evident from the graphs that the shareholder experience to date correlates strongly with the EBIT ex MI
outcomes that speak to the Group’s underlying operating performance. This correlation strongly supports the inclusion of
EBIT ex MI as an STI measure, thereby, strengthening the link between KMP reward outcomes and shareholder value delivered.
CEO STI PAYOUT CORRELATION TO COMPUTERSHARE PERFORMANCE
Earnings per Share
Share price
80
70
60
50
40
30
20
10
0
FY17
FY18
FY19
FY20
FY21
Management EPS (cps)
% maximum CEO STI paid
EBITDA
800
700
600
500
400
300
200
100
0
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
20
18
16
14
12
10
8
6
4
2
0
FY17
FY18
FY19
FY20
FY21
Closing Share Price ($)
% maximum CEO STI paid
EBIT ex MI
400
350
300
250
200
150
100
50
0
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
FY17
FY18
FY19
FY20
FY21
FY17
FY18
FY19
FY20
FY21
EBITDA achievement ($m)
% maximum CEO STI paid
EBIT ex MI achievement ($m)
% maximum CEO STI paid
54
3.2 FY2021 STI OUTCOMES
The table below shows the STI paid or payable to each Computershare executive who is identified as KMP for entitlements referable
to performance in the financial year ended 30 June 2021. The table sets out the actual amounts awarded as STI and how they
relate to the maximum entitlement for each executive.
Executive
SJ Irving
ML McDougall
N Oldfield**
N Sarkar*
STI awarded
(USD)
1,316,820
244,013
489,001
477,034
STI as
percentage
of maximum
Budgeted
EBITDA*
Growth in
group EBIT
ex MI
Strategic
Objectives
Non-
Financial
Objectives
75%
66%
67%
71%
At or above target
Between threshold and target
Below threshold
* N Sarkar is measured on global Issuer Services budgeted EBITDA, remaining executives on Group EBITDA.
** The outcome for Nick Oldfield’s strategic objectives reflect the results of the Mortgage Servicing Business, which he heads, in addition to being the CFO.
For the CEO and CFO, the maximum STI award is set at 150% of target, whereas the maximum award for other executives is in
aggregate 175% of target.
In FY2021, the Board’s assessment of the CEO’s performance against his STI objectives was as follows:
Financial objectives
Group management EBITDA performance against budget in constant currency
Actual EBITDA exceeded budget by 3.7%.
Strategic objectives
Issuer Services - Drive revenue growth across the 5 key service areas through the delivery of the
3 key priorities, namely,
a. Continue momentum with client registry wins
b. Expand and cross sell registered agent services
c. Extend entity management capability
Increase in revenue by 16% and in earnings by 6%. Margin income was 4% down from budget
expectations, mainly driven by rate reductions. Registered Agent key metric of ‘Units (entities
registered in a state) Under Management’ has grown 12% during the year through underlying
resilience of the book and new client wins.
Weighting
25%
50%
10%
Plans - Drive revenue improvement through the delivery of three targeted strategies
10%
a. New client wins
b. EquatePlus platform upgrade
c. Trading volume recovery
Increase in revenues by 11% and in earnings by 24%.
96% of active EMEA clients have been upgraded with remaining clients scheduled for November 21
Upgrade. Australia upgrades have commenced. Over 3million participants now active on the
platform.
Transactional Revenue continued to recover through FY21. It was up over 15% on pcp. At 1H21
trading revenues were down 7.4% on pcp. Strong second half performance resulted in Trading
volumes exceeding pre pandemic levels
Above
target
Above
target
Above
target
55 | COMPUTERSHARE | ANNUAL REPORT | 2021
DIRECTORS’ REPORT Strategic objectives
US and UK Mortgage Services – Drive revenue growth across the business through two key
strategies:
10%
Below
target
a. Growth in US Capital Light revenues
b. Expansion of recapture capabilities
US CLS – Profitability materially impacted by challenging operating environment. Increased
amortisation expense and the headwinds created by the ongoing foreclosure moratorium offset
partially by MSR sale transaction gains.
UK CLS – In FY2020, the Cost Out Program was set a target of removing £85.4m of costs from
CLS UK over a period of three years. After two years, the program has delivered 94% of its target
with £80.1m captured (exceeding the target by £2.3m for FY2020 and FY2021 combined).
Achievement of targeted cost out programs including:
a. CLS UK cost out program
b. Equatex synergies
c. Stage 1, 2 and 3 budgeted cost out
Growth in EBIT ex MI (target 10%)
12.6% growth achieved
Non-financial objectives
Customer Satisfaction as measured by surveys and NPS scores
While industry customer surveys in key markets still show CPU as the highest performer, and NPS
surveys show that scores are at extremely high levels, the level of SLA breaches has increased
in a work from home environment. This has been caused by staff attrition in various areas but
particularly call centres, due in large part to competitive labour markets. Steps have been taken to
remedy this, and the early signs are promising.
People and Culture
Progress towards Diversity objectives and Diversity Programs approved by the Board.
Communication around Covid-19 with staff and the initiatives to deal with mental health and other
issues were well based. Reactions from town hall meetings were positive. Staff engagement scores
reflected the positive sentiment over the broad-based support given at the peak of the pandemic.
10%
Above
target
10%
25%
4%
Above
target
Below
target
6%
Above
target
Risk Management
5%
At target
Continuous improvement in the risk and internal audit functions was noted, and there was a
meaningful reduction in the number of recommendations outstanding.
Capital and M&A Management
Wells Fargo acquisition signed at good valuation and with solid returns. Process supervised very
effectively. This acquisition is fundamental to the long-term success of the business.
5%
Above
target
Innovation as measured by evidence of new product innovation
5%
At target
A meaningful pipeline of new products has been delivered, highlighted by the replacement of
Lumi software.
Percentage of maximum achieved
75.2% of maximum
3.3 FY2021 LTI OUTCOMES
LTI awards that were granted in FY2019 were tested against the performance hurdles over the period 1 July 2018 to 30 June 2021.
For performance rights subject to the TSR performance hurdle, Computershare achieved negative TSR of -4.02% across the period
and a relative TSR ranking against the peer group of 31st percentile, which is below the threshold of 50th percentile of ASX100.
Accordingly, the LTI awards subject to the TSR performance test did not vest.
For performance rights subject to the EPS performance hurdle, average annual growth in management EPS on a constant currency
basis over the performance period was -5.7% and, accordingly, the LTI awards subject to the EPS performance test did not vest.
56
4. NON-EXECUTIVE DIRECTORS
Computershare’s total non-executive directors’ fee pool has a limit of AU $2.0 million. This limit was approved by shareholders in
November 2014.
Fees payable to non-executive directors in FY2021 are set out in the table below (in AUD).
Chairman’s Fee
NED
Chair Risk
and Audit
Committee
Chair PACC and
Remuneration
Committee
Member Risk
and Audit
Committee
Member
PACC and
Remuneration
Committee
FY2021
335,000
160,000
75,000
25,000
25,000
10,000
These fees are inclusive of statutory superannuation where applicable. JM Velli and PJ Reynolds receive their director fees in
their local currency. The exchange rate is set by reference to when they were first appointed as a director of Computershare.
No bonuses, either short or long-term, are paid to non-executive directors. They are not provided with retirement benefits.
5. KMP CONTRACTUAL ARRANGEMENTS
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 2 of the Corporate Governance Statement for further information on the Company’s re-election process.
Neither the Group CEO nor other executive KMP 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, KMP are entitled to statutory entitlements in their respective jurisdictions of employment. The
Deferred Short-Term Incentive (DSTI) plan provides for full vesting on redundancy or termination by the Group other than for
cause. 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, subject in
some instances to local requirements in the jurisdictions where the Group operates, none of these executives would receive special
termination payments should they cease employment for any reason.
6. PROPOSED CHANGES TO FY2022 LTI PLAN DESIGN
As previously noted, the structure of the FY2021 LTI was a “one off” structure adopted as we faced the uncertainties of Covid-19.
The Board has spent some time considering the best performance measures and weightings for those measures for the FY2022 LTI
grant over the next 3 years.
While further details will be provided in the Notice of Meeting, the design of the FY2022 LTI plan focuses on the importance of
measuring ‘whole of company performance’. Each of the metrics proposed complement each other in driving long-term value
creation while collectively reflecting the reward principles noted in the Chair’s letter to this report.
The FY2022 LTI plan will continue to be measured over three years and will be granted in the form of performance rights. The plan
will consist of three measures:
Relative Total Shareholder Return (40%) will continue to remain an important metric within Computershare’s LTI plan as an
indicator of the relative experience of our shareholders against those of our chosen peer group – the ASX100.
Average management EPS ex MI (30%) growth over three years – this measure requires management to deliver growth in
the underlying business to the benefit of shareholders without relying on interest rate increases over the next 3 years. EPS ex MI
highlights the results directly driven from management’s actions in setting and executing strategy for the underlying business.
Vesting of 50% of this part of the LTI commences at 5% per annum average growth over the 3 years of the LTI and will increase on
a straight line basis to full vesting of this part of the LTI at 10% per annum average growth over the performance period.
This vesting scale is slightly lower than the FY2019 LTI EPS measure inclusive of margin income, which had a vesting scale of
5%-12%. This scale was set at a time when interest rates were anticipated to rise. Given interest rates are currently at historic lows,
it is likely that markets are currently at the bottom of the interest rate cycle and, when setting an EPS ex MI target, the Board had
regard to the fact that it represented a challenging growth target for the underlying business that is more directly under control of
management and without the benefit of increases in margin income that may arise from any interest rate increases that eventuate
over the performance period.
While management EPS will exclude margin income, margin income will be captured in our third metric – Return on Invested
Capital (ROIC).
57 | COMPUTERSHARE | ANNUAL REPORT | 2021
DIRECTORS’ REPORT Average Return on Invested Capital (30%) over three years – this measure was chosen as it focuses on management improving
and growing our underlying business, making earnings accretive investments and at the same time ensures both are done with
capital discipline. The proposed methodology to calculate ROIC ensures that the expenses of M&A integrations and other business
restructures, at a time when the business is heavily investing in both, are included in the calculation.
ROIC will be measured based upon management earnings (inclusive of tax but excluding interest expenses) and invested capital
inclusive of cash costs associated with restructuring and M&A integration. This adjustment is important to ensure that the
integration-related expenses from the acquisition of the Wells Fargo US Corporate Trust business (being the largest acquisition in
Computershare’s history) will be captured in the calculation. However, ROIC will not include gains or losses on sales of business or
marked to market adjustments on derivatives.
This is a different measure from that Computershare has historically disclosed (as we adapt it to be an appropriate LTI measure).
The key difference being management adjustments for restructures and M&A and the materially changing interest rate
environment. Consequently, comparisons between the historically disclosed ROIC and the proposed adjusted ROIC are not valid.
The proposed ROIC targets for the FY2022 LTI plan are based on the medium-term strategic plan across the performance period
such that the achievement of the threshold target ROIC (being 11% and well above the weighted average cost of capital) will result
in 50% of the rights associated with the measure vesting, increasing on a straight line basis to full vesting at a ROIC of 12.1%.
The LTI plan evolution over the three plan periods is shown below.
UP TO FY20
50% EPS
FY21
TRANSITIONAL
50% SARs
50% rTSR
50% rTSR
FY22
ONWARDS
30% EPS ex MI
30% ROIC
40% rTSR
58
7. STATUTORY REMUNERATION DISCLOSURES
Details of the nature and amount of each element of the total remuneration for each director and member of KMP for the year
ended 30 June 2021 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 FY2021 USD/AUD average rate was 0.74272, the FY2020
USD/AUD average rate was 0.67164).
7.1 REMUNERATION OF DIRECTORS AND OTHER KMP
Short-term
Long-term
Post
employ-
ment
benefits
Share-based
payments expense
Financial
Year
Salaries
and fees
Cash profit
share and
bonuses
$
$
Super-
annuation/
pension
$
Other1
$
Shares
$
Perfor-
mance
rights/
SARs2
Expatriate
costs3
$
$
Directors
SJ Irving3,4,6 2021 1,386,881
658,410
23,161
13,403
804,253
441,767
30,146
Other
Tax equal-
isation on
expatriate
benefits4
$
-
Total
Other5
$
$
- 3,358,021
2020 1,266,921 431,787 20,911
10,580 595,058 346,275 614,090 684,427
- 3,970,049
AP Cleland6 2021
123,502
2020 110,409
TL Fuller6
2021
160,106
2020 145,251
LM Gay6
2021
132,773
2020 114,346
SD Jones6
2021
259,786
2020 236,204
CJ Morris6
2021
118,835
2020 107,463
P Reynolds6 2021
136,376
2020 128,291
JM Velli
2021
169,143
2020 169,143
Other KMP
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,229
-
4,648
-
14,997
- 13,639
-
12,614
- 10,863
-
16,113
- 14,106
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
ML McDougall6 2021
498,313
113,178
8,261
16,113
106,929
88,359
2020
434,979
84,752
19,409
14,106
119,389
55,509
N Oldfield7
2021
796,677
244,501
2020
452,694
153,506
N Sarkar3,4,6 2021 1,005,229
229,989
2020
635,464
103,771
-
-
-
-
1 Other long-term remuneration comprises long service leave.
31,100
206,869
163,140
30,900
155,618
2,242
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
126,731
- 115,057
-
175,103
- 158,890
-
145,387
- 125,209
-
275,899
- 250,310
-
118,835
- 107,463
-
136,376
- 128,291
-
169,143
- 169,143
2,190
833,343
1,965
730,109
2,736 1,445,023
1,596
796,556
-
-
163,740
169,092
191,095
(62,026)
2,413 1,699,532
187,519
74,405
353,035
64,322
2,270 1,420,786
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 2022 financial year budget process, it was no longer considered probable that the performance condition applicable to the performance rights
granted on 2 December 2019 would be fully met. On this basis, the accounting expense (excluding the TSR component) related to prior years has been
reversed.
3 Expatriate costs include payments made to KMP engaged on overseas assignments in accordance with Computershare’s expatriate policy. For SJ Irving,
the amount includes benefits which were payable under his expatriate assignment which ended March 2020. The benefits mainly related to travel which
was delayed as a result of Covid-19. The restrictions on travel during the first half of 2020 meant that travel was delayed until the borders opened up
later in the year. For N Sarkar, the amount reflects benefits related to his and his family’s relocation to the United States on an assignment that ended on
17 November 2020.
4 Tax equalisation arrangements operate so Computershare employees on an expatriate assignment pay the equivalent tax to what would have been paid
had they not been on an assignment. This includes tax that the Company is required to pay in order to provide expatriate benefits.
5 Other includes other benefits provided to KMP and benefits related to Computershare’s general employee share plan as detailed in note 40 of the
financial statements.
6 KMP are paid in their local currency. Foreign exchange rate movements can impact the comparison between years in US dollar terms.
7 N Oldfield was appointed as CFO on 3 December 2019.
59 | COMPUTERSHARE | ANNUAL REPORT | 2021
DIRECTORS’ REPORT 7.2 SHORT-TERM SALARY AND FEES, CASH PROFIT SHARE AND BONUSES, LONG-TERM OTHER, POST EMPLOYMENT BENEFITS
Directors
AP Cleland, TL Fuller, LM Gay, SD Jones and CJ Morris are paid in Australian dollars. Director fees for JM Velli and PJ Reynolds are
paid in local currency.
Group CEO and other executive KMP
All executive KMP receive their salary and other cash payments in their local currency.
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
SJ Irving
ML McDougall
N Oldfield
N Sarkar
4/12/2018
2/12/2019
7/12/2020
1/10/2018
1/10/2019
1/10/2020
1/10/2018
1/10/2019
1/10/2020
1/10/2018
1/10/2019
1/10/2020
39,382
-
39,382
78,797
48,629
9,171
11,052
5,416
-
-
9,171
-
-
19,930
19,930
21,606
9,377
14,533
17,384
7,374
-
-
14,533
-
-
78,797
48,629
-
11,052
5,416
-
21,606
9,377
-
17,384
7,374
FY2021
FY2022
FY2023
FY2021
FY2022
FY2023
FY2021
FY2022
FY2023
FY2021
FY2022
FY2023
$
-
-
$
-
100,989
519,731
350,860
-
-
55,833
-
-
96,667
-
-
76,018
-
12,575
34,089
-
24,583
59,020
-
19,779
46,413
Fair values of shares at grant date are determined using the closing share price on grant date.
Performance rights
Performance rights granted under 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 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)
Maximum
total value of
grant yet to
be expensed
SJ Irving
5/12/2017
90,627
4/12/2018
129,707
2/12/2019
190,443
7/12/2020
103,809
ML McDougall
5/12/2017
N Oldfield
N Sarkar
4/12/2018
2/12/2019
7/12/2020
5/12/2017
4/12/2018
2/12/2019
7/12/2020
5/12/2017
4/12/2018
2/12/2019
7/12/2020
33,916
25,395
39,103
21,186
31,250
49,612
69,420
37,553
44,853
40,423
53,504
38,134
-
-
-
-
(90,627)
-
-
-
-
129,707
190,443
103,809
-
(33,916)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
25,395
39,103
21,186
(31,250)
-
-
-
-
49,612
69,420
37,553
(44,853)
-
-
-
-
40,423
53,504
38,134
FY2021
FY2022
FY2023
FY2024
FY2021
FY2022
FY2023
FY2024
FY2021
FY2022
FY2023
FY2024
FY2021
FY2022
FY2023
FY2024
$
-
-
-
639,164
-
-
-
130,445
-
-
-
$
-
-
186,260
426,109
-
-
38,244
86,963
-
-
67,895
231,218
154,145
-
-
-
-
-
52,329
234,795
156,530
60
SARs
SARs granted under the LTI plan are for no consideration and carry no dividend or voting rights. Each SAR carries an entitlement
to fully paid ordinary shares in Computershare Limited equivalent to the amount by which the underlying share price has increased
since the right was granted.
Set out below is a summary of SARs granted under the 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)
Maximum
total value of
grant yet to
be expensed
SJ Irving
7/12/2020
367,406
ML McDougall
7/12/2020
N Oldfield
N Sarkar
7/12/2020
7/12/2020
74,983
132,912
134,967
-
-
-
-
-
-
-
-
367,406
74,983
132,912
134,967
FY2024
FY2024
FY2024
FY2024
$
723,127
147,581
261,597
265,642
$
482,085
98,388
174,398
177,094
Shareholdings of KMP
The number of ordinary shares in Computershare Limited held during the financial year by each director and the other named KMP,
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)
Vested Other
share plans1
Other
Value of
options/
performance
rights
exercised
Balance
at end of
the year
Directors
SJ Irving
AP Cleland
TL Fuller
LM Gay
SD Jones
CJ Morris
PJ Reynolds
JM Velli
Other KMP
ML McDougall
N Oldfield
N Sarkar
132,014
39,382
12,125
10,500
19,700
26,619
31,095,300
8,000
17,000
-
-
-
-
-
-
-
7,240
45,603
54,805
9,171
19,930
14,533
-
-
-
-
-
-
-
-
-
-
-
-
1,843
5,648
2,239
25,298
995,783
-
-
-
(3,857)
(14,533)
-
-
-
-
-
-
-
-
1,291
405
626
-
-
-
-
-
-
-
-
-
-
-
171,396
13,968
16,148
21,939
51,917
32,091,083
8,000
17,000
17,702
62,081
55,431
1 Vested Other share plans include shares vested related to Computershare’s general employee share plan as detailed in note 40.
$
-
-
-
-
-
-
-
-
-
-
-
61 | COMPUTERSHARE | ANNUAL REPORT | 2021
DIRECTORS’ REPORT
Proportions of fixed and performance-related remuneration
The percentage value of total remuneration relating to the current financial year received by KMP that consists of fixed and
performance-related remuneration is as follows:
SJ Irving1
AP Cleland
TL Fuller
LM Gay
SD Jones
CJ Morris
PJ Reynolds
JM Velli
ML McDougall
N Oldfield
N Sarkar2
% 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*
38.83%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
57.52%
52.37%
62.87%
17.59%
21.48%
22.10%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12.40%
15.42%
12.72%
11.72%
13.05%
9.06%
18.36%
19.16%
15.35%
* Excludes the performance rights reversal in the year ended 30 June 2021.
1 The percentage of fixed/non-performance related remuneration disclosed is inclusive of expatriate benefits and associated tax equalisation.
Excluding these amounts, the proportions of total remuneration are: Fixed/non-performance related – 38.33%; CSTI – 17.73%; DSTI – 21.66%;
performance rights – 22.28%.
2 The percentage of fixed/non-performance related remuneration disclosed is inclusive of expatriate benefits and associated tax equalisation.
Excluding these amounts, the proportions of total remuneration are: Fixed/non-performance related – 60.02%; CSTI – 13.70%; DSTI – 9.75%;
performance rights – 16.53%.
7.3 OTHER
Loans and other transactions with directors and executives
Computershare made no loans to directors and executive directors or other KMP during the current financial year.
CJ Morris has an interest in Colonial Leisure Group Jersey Limited. Computershare provided secretarial services to the entity on
ordinary commercial terms and conditions. Total value of services provided in the reporting period was $7,251 (2020: $13,125).
As a matter of Board approved policy, the Group maintains a register of all transactions between directors 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
As per Corporations Act 2001, Section 206J, Computershare’s policy forbids KMP to deal in derivatives designed as a hedge
against exposure to unvested shares and vested shares that are still subject to a disposal restriction in Computershare Limited.
Shares under option
Unissued ordinary shares in Computershare Limited under performance rights and Share Appreciation Rights at the date of this
report are as follows:
Date granted
Performance rights
02/12/2019
07/12/2020
Share Appreciation Rights
07/12/2020
Financial year of expiry
Number of rights
2023
2024
2024
725,928
417,412
1,477,334
62
AUDITOR
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.
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
Taxation services provided by network firms of PricewaterhouseCoopers Australia
Total Auditor’s Remuneration
ROUNDING OF AMOUNTS
2021
$000
989
3,328
2020
$000
1,021
2,757
4,317
3,778
461
2,146
463
3,069
7,386
321
2,013
329
2,663
6,441
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
20 September 2021
SJ Irving
Chief Executive Officer
63 | COMPUTERSHARE | ANNUAL REPORT | 2021
DIRECTORS’ REPORT AUDITOR’S INDEPENDENCE DECLARATION
Auditor’s Independence Declaration
As lead auditor for the audit of Computershare Limited for the year ended 30 June 2021, 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.
Marcus Laithwaite
Partner
PricewaterhouseCoopers
Melbourne
20 September 2021
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
PricewaterhouseCoopers, ABN 52 780 433 757
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
Liability limited by a scheme approved under Professional Standards Legislation.
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
64
FINANCIALS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 June 2021
Revenue from continuing operations
Sales revenue
Dividends received
Interest received
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
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
2021
$000
2020
$000
2,281,131
2,271,512
1,249
781
2,142
3,627
2,283,161
2,277,281
50,893
3,905
1,675,327
1,540,471
295,462
313,731
38,655
54,867
36,535
66,325
2,064,311
1,957,062
389
239
270,132
324,363
80,933
91,632
189,199
232,731
2
2
3
31
6
(7,651)
12,023
68,114
(21,185)
6
(512)
116
59,951
(9,046)
249,150
223,685
188,974
232,657
225
74
189,199
232,731
248,366
224,246
784
(561)
249,150
223,685
4 33.77 cents 42.55 cents
4 33.76 cents 42.55 cents
The above consolidated statement of comprehensive income is presented in United States dollars and should be read in conjunction with the
accompanying notes.
65 | COMPUTERSHARE | ANNUAL REPORT | 2021
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2021
CURRENT ASSETS
Cash and cash equivalents
Other financial assets
Receivables
Loan servicing advances
Financial assets at fair value through profit or loss
Inventories
Current tax assets
Prepayments
Assets classified as held for sale
Other current assets
Total current assets
NON-CURRENT ASSETS
Receivables
Investments accounted for using the equity method
Financial assets at fair value through profit or loss
Property, plant and equipment
Right-of-use assets
Deferred tax assets
Intangibles
Other non-current assets
Total non-current assets
Total assets
CURRENT LIABILITIES
Payables
Borrowings
Lease liabilities
Current tax liabilities
Financial liabilities at fair value through profit or loss
Provisions
Deferred consideration
Mortgage servicing related liabilities
Total current liabilities
NON-CURRENT LIABILITIES
Payables
Borrowings
Lease liabilities
Financial liabilities at fair value through profit or loss
Deferred tax liabilities
Provisions
Deferred consideration
Mortgage servicing related 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
2021
$000
2020
$000
7
17
15
16
13
18
31
19
15
31
13
20
21
6
9
19
22
14
21
13
23
24
25
22
14
21
13
6
23
24
25
27
28
29
26
26
816,810
76,187
419,890
335,697
8,540
5,452
10,588
37,625
2,888
5,033
597,313
59,943
426,465
267,016
17,979
5,113
17,979
36,757
-
3,426
1,718,710
1,431,991
194
9,097
34,210
102,671
206,601
149,129
2,184
10,670
39,713
110,094
180,032
161,153
3,029,051
3,052,826
2,222
1,088
3,533,175
3,557,760
5,251,885
4,989,751
491,760
322,376
50,605
28,153
218
58,645
9,452
34,459
494,737
287,410
43,159
73,170
3,456
70,863
8,045
43,766
995,668
1,024,606
3,061
1,052
1,387,610
1,742,410
193,488
158,910
1,314
-
234,219
227,342
24,529
1,264
25,188
9,536
131,135
210,388
1,976,620
2,374,826
2,972,288
3,399,432
2,279,597
1,590,319
519,299
-
(7,052)
(172,496)
1,765,412
1,761,188
2,277,659
1,588,692
1,938
1,627
2,279,597
1,590,319
The above consolidated statement of financial position is presented in United States dollars and should be read in conjunction with the
accompanying notes.
66
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2021
Attributable to members of Computershare Limited
Contributed
Equity
$000
Note
Reserves
$000
Retained
Earnings
$000
Non-
controlling
Interests
$000
Total
$000
Total
Equity
$000
27
27
27
Total equity at 1 July 2020
Profit for the year
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
Dividend reinvestment plan issues
Rights issue, net of transaction costs and tax
Transfer from share buy-back
Cash purchase of shares on market
Share based remuneration
Balance at 30 June 2021
Total equity at 1 July 2019
Change in accounting policy
Restated total equity at the beginning of
the financial year
Profit for the year
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
Share buy-back
Cash purchase of shares on market
Share based remuneration
Balance at 30 June 2020
-
-
-
-
-
-
-
12,411
608,446
(172,496)
1,761,188
1,588,692
1,627
1,590,319
-
188,974
188,974
(7,651)
67,555
(512)
-
-
-
(7,651)
67,555
(512)
59,392
188,974
248,366
225
-
559
-
784
189,199
(7,651)
68,114
(512)
249,150
-
-
-
(184,750)
(184,750)
(473)
(185,223)
-
-
-
-
-
12,411
608,446
-
(16,271)
20,765
-
-
-
-
-
12,411
608,446
-
(16,271)
20,765
(101,558)
101,558
-
-
(16,271)
20,765
519,299
(7,052)
1,765,412
2,277,659
1,938
2,279,597
-
-
-
-
-
-
-
-
-
-
-
-
-
(134,551)
1,706,427
1,571,876
2,195
1,574,071
-
(10,493)
(10,493)
-
(10,493)
(134,551)
1,695,934
1,561,383
2,195
1,563,578
-
232,657
232,657
12,023
(20,550)
74
-
232,731
12,023
(635)
(21,185)
12,023
(20,550)
116
-
-
-
116
-
116
(8,411)
232,657
224,246
(561)
223,685
-
(167,403)
(167,403)
(7)
(167,410)
(22,098)
(25,797)
18,361
-
-
-
(22,098)
(25,797)
18,361
-
-
-
(22,098)
(25,797)
18,361
(172,496)
1,761,188
1,588,692
1,627
1,590,319
The above consolidated statement of changes in equity is presented in United States dollars and should be read in conjunction with the
accompanying notes.
67 | COMPUTERSHARE | ANNUAL REPORT | 2021
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 30 June 2021
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)
Proceeds from/(payments for) intangible assets including MSRs
Proceeds from/(payments for) investments
Payments for property, plant and equipment
Net investing cash flows
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares – net of transaction costs
Payments 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
Lease principal payments
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
2021
$000
2020
$000
2,424,285
2,449,925
(1,880,709) (1,761,805)
(68,681)
14,442
1,550
2,496
(77,664)
(56,577)
781
3,627
(92,926)
(43,303)
7(b)
306,636
608,805
(21,829)
(159,075)
(124,987)
(187,540)
15,875
6,795
(16,294)
(24,043)
(147,235)
(363,863)
607,820
-
(16,271)
(25,797)
286,772
786,985
(672,395)
(680,747)
41,202
(43,736)
(170,929)
(159,210)
(1,410)
(8,193)
(473)
(7)
-
(22,098)
(48,476)
(44,094)
25,840
(196,897)
185,241
48,045
597,313
561,346
34,256
(12,078)
816,810
597,313
The above consolidated cash flow statement is presented in United States dollars and should be read in conjunction with the accompanying notes.
68
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.
7. Notes to the consolidated cash flow statement
8. Business combinations
9.
Intangible assets
10. Impairment
Income tax expense and balances
Financial risk management
11. Hedge accounting
12. Financial risk management
13. Financial assets and liabilities at fair value through profit or loss
14. Borrowings
Other balance sheet items
15. Receivables
16. Loan servicing advances
17. Other financial assets
18. Inventories
19. Other assets
20. Property, plant and equipment
21. Leases
22. Payables
23. Provisions
24. Deferred consideration
25. Mortgage servicing related liabilities
Equity
26. Interests in equity
27. Contributed equity
28. Reserves
29. Retained earnings and dividends
Group structure
30. Details of controlled entities
31. Investments in associates and joint ventures
32. Deed of cross guarantee
33. Parent entity financial information
Unrecognised items
34. Contingent liabilities
35. Commitments
36. Capital expenditure commitments
37. Significant events after year end
Other disclosures
38. Related party disclosures
39. Key management personnel disclosures
40. Employee and executive benefits
41. Remuneration of auditors
69 | COMPUTERSHARE | ANNUAL REPORT | 2021
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 2021 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 except for certain financial assets and liabilities
(including derivative instruments) measured 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.
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.
70
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 presented statement of financial position 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
6
6
8
9
10
Key accounting estimates and judgements
Provision for income tax
Deferred tax assets relating to carry forward tax losses
Accounting for business combinations
Intangibles – mortgage servicing rights
Impairment
Covid-19 impact
The Covid-19 pandemic has resulted in significant disruptions to the global economy during the year ended 30 June 2021 and there
remains substantial uncertainty over the extent and duration of the pandemic as well as the corresponding economic impacts.
These uncertainties have been incorporated into the judgements and estimates used in the preparation of this report, including
the carrying values of the assets and liabilities. Where the judgements and estimates are considered significant they have been
disclosed in the notes to this report.
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 instrument, 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 2020
The Group has adopted all standards and amendments to accounting standards which became applicable to the Group from
1 July 2020, including:
> AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material
> AASB 2018-6 Amendments to Australian Accounting Standards – Definition of a Business
> AASB 2019-3 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform
> AASB 2019-5 Amendments to Australian Accounting Standards – Disclosure of the Effect of New IFRS Standards Not Yet issued
in Australia
> Conceptual Framework for Financial Reporting and AASB 2019-1 Amendments to Australian Accounting Standards – References
to the Conceptual Framework
> AASB 2020-4 Amendments to Australian Accounting Standards – Covid-19-Related Rent Concessions
>
IFRIC update Configuration or Customisation Costs in a Cloud Computing Arrangement (AASB 138)
71 | COMPUTERSHARE | ANNUAL REPORT | 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AASB 2019-3 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform
AASB 2019-3 amends some specific hedge accounting requirements within AASB 7, 9 and 139 to provide relief from potential
effects of the uncertainty caused by the transition associated with interest rate benchmark reform (IBOR) and is effective from
1 July 2020. IBOR reform primarily impacts the consolidated entity’s hedge relationships. Refer to note 11 for details of the effect of
IBOR reform on the Group’s hedging arrangements.
The other amendments listed above did not have any impact on the amounts recognised in current or prior periods and are not
expected to significantly affect future periods.
New and amended standards and interpretations issued but not yet effective
AASB 2020-8 Interest Rate Benchmark Reform – Phase 2
IBOR are interest rate benchmarks that are used in a wide variety of financial instruments such as derivatives, borrowing facilities
and deposit contracts. Examples of IBOR include ‘LIBOR’ (the London Inter-bank Offered Rate), ‘EURIBOR’ (the Euro Inter-bank
Offered Rate) and ‘BBSW’ (the Australian Bank Bill Swap Rate). Historically, each IBOR has been calculated and published daily
based on submissions by a panel of banks. Over time, changes in inter-bank funding markets have meant that IBOR panel bank
submissions have become based less on observable transactions and more on expert judgement. Financial markets’ authorities
reviewed what these changes meant for financial stability, culminating in recommendations to reform major interest rate
benchmarks.
As a result of these recommendations, many IBOR around the world are undergoing reforms. LIBOR and other benchmark interest
rates are being replaced with alternative reference rates (ARRs). The cessation date for all tenors of GBP, CHF, EUR LIBOR and the
one week and two-month tenors for USD LIBOR is 31 December 2021. The cessation date for the remaining USD LIBOR tenors is
30 June 2023.
AASB 2020-8 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform Phase 2 makes further
amendments to AASB 9, AASB 139, AASB 7, AASB 4 and AASB 16 to address issues that arise during the IBOR reform. The
amendments:
> provide practical expedients to account for changes in the basis for determining contractual cash flows as a result of IBOR
reform
> provide additional temporary reliefs from applying specific hedge accounting requirements to hedging relationships that are
directly affected by IBOR reform, and
>
require additional disclosures, including information about new risks arising from the IBOR reform, how the entity manages
transition to the alternative benchmark rate(s) and quantitative information about derivatives and non-derivatives that have yet
to transition.
The Group has a number of arrangements which reference IBOR benchmarks including derivatives, borrowing facilities and deposit
contracts. The Group has commenced its transition plan in order to manage changes required to contracts impacted by IBOR
reform within the specified frame. The Group continues to follow the status of the IASB’s IBOR reform project, and it will assess the
impact for the Group as further information becomes available.
2. REVENUE AND OTHER INCOME
Sales revenue
Revenue from contracts with customers
Dividends received
Interest received
Total revenue from continuing operations
Other income
Gains on MSR related transactions
Gain on disposal of Euroclear Holding SA/NV
Rent received
Other
Total other income
2021
$000
2020
$000
2,281,131
2,271,512
1,249
781
2,142
3,627
2,283,161
2,277,281
31,450
11,241
993
7,209
50,893
-
-
779
3,126
3,905
72
Sales revenue
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. This involves following a five-step model of
revenue recognition:
>
>
Identifying the contract with a customer
Identifying performance obligations under the contract
> Determining the transaction price
> Allocating the transaction price to performance obligations under the contract
> Recognising revenue when Computershare satisfies its performance obligations
Integrated services
Integrated services customer contracts for registry maintenance, employee plans management, trust management, loan services
and some recurring contracts in communication services include an obligation to perform an unspecified number of tasks to
provide an integrated service over the contract period, where Computershare is compensated over the contract term whether or
not any specific activities are required to be performed. In these situations, the Group has a stand-ready obligation to perform any
of the tasks constituting the integrated service whenever needed, which is considered one performance obligation.
Typically, the consideration that Computershare is entitled to for satisfying performance obligations can vary in line with
underlying measures, such as the number of shareholders or participants in an employee share plan. For the purposes of recording
revenue, the Group estimates the amount of variable consideration it is entitled to, only to the extent that it is highly probable that
a significant reversal in the cumulative amount of revenue recognised will not occur.
In some instances, particularly for smaller clients, consideration may be fixed. This fixed consideration is recognised as revenue
over the contract term by measuring progress towards complete satisfaction of the underlying performance obligation, which is
generally on a straight-line basis. Revenue for provision of shareholder meetings (considered a separate performance obligation) is
recognised at a point in time when the meeting service has been provided.
The Group sometimes provides services on an ad-hoc basis over the contract period, where those services do not form a part of a
stand-ready obligation (eg, property valuations). Each of these individual tasks is classified as a separate performance obligation
and the allocated fee is recognised once that performance obligation has been completed.
Corporate actions, stakeholder relationship management, class actions
For corporate actions, stakeholder relationship management, class actions, bankruptcy administration and some communication
services contracts, each customer contract is a separate performance obligation and revenue related to these contracts is typically
variable. For contracts that qualify for over time revenue recognition, revenue is recognised in line with contractual charging
arrangements for variable fees as they reflect the transfer of benefit to the customer.
Margin income
Margin income is part of variable consideration related to customer contracts and is recognised when it becomes receivable.
Upfront fees
Where work reflected by the upfront fees charged to clients is classified as a fulfilment activity, the associated revenue is
recognised straight line over the relevant contract term. In those instances where the upfront fees represent a separate
performance obligation, the associated revenue is recognised at a point in time when that performance obligation is satisfied.
Discounts and rebates
Where a contract includes a variable amount, the consolidated entity determines the transaction price with regard to any variable
consideration it is entitled to. The estimated consideration can sometimes vary due to discounts and rebates. Accumulated
experience is used to estimate the highly probable amount of variable consideration to be recognised.
Interest and dividend income
Interest income on deposits is recognised using the effective interest method. Dividends are recognised as revenue when the right
to receive payment is established.
73 | COMPUTERSHARE | ANNUAL REPORT | 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 3. EXPENSES
Profit before tax includes the following specific expenses:
Depreciation and amortisation
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Total depreciation
Amortisation of intangible assets
Amortisation of mortgage servicing related liabilities
Total amortisation (net)
Total depreciation and amortisation
Finance costs
Interest expense
Borrowings and derivatives
Lease liabilities
Other
Loan facility fees and other borrowing expenses
Total finance costs
Other operating expense items
Technology spending – research and development
Employee entitlements (excluding superannuation and other pension) expense
Superannuation and other pension expenses
2021
$000
2020
$000
31,885
43,146
75,031
34,251
43,221
77,472
204,687
166,706
(40,428)
(38,010)
164,259
239,290
128,696
206,168
38,047
52,232
8,343
4,084
4,393
7,366
3,200
3,527
54,867
66,325
100,741
953,359
48,841
99,181
920,403
45,125
Profit before tax includes the following individually significant expenses. Further information is included in note 4.
Individually significant items
Acquisition and disposal related expenses
Depreciation and amortisation
Refer to notes 9, 20, 21 and 25 for further details on depreciation and amortisation.
Finance costs
Finance costs are recognised as an expense when they are incurred.
Technology spending – research and development
These are operating expenses incurred on research and development activities.
41,196
21,011
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 40.
Superannuation and other pension expenses
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 expenses when they
become payable.
74
Net profit attributable to the members of Computershare Limited
188,974
188,974
Weighted average number of ordinary shares used as denominator in
calculating earnings per share
559,519,258
559,747,063
559,519,258
559,747,063
4. EARNINGS PER SHARE
Year ended 30 June 2021
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)
Year ended 30 June 2020
Earnings per share (cents per share)1
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
33.77 cents
33.76 cents
50.71 cents
50.69 cents
$000
$000
$000
$000
189,199
189,199
189,199
189,199
(225)
-
(225)
-
(225)
(225)
94,762
283,736
94,762
283,736
Basic EPS1
Diluted EPS1
Management
Basic EPS
Management
Diluted EPS
42.55 cents
42.55 cents
55.57 cents
55.57 cents
$000
$000
$000
$000
232,731
232,731
232,731
232,731
(74)
-
(74)
-
(74)
(74)
71,185
303,842
71,185
303,842
Net profit attributable to the members of Computershare Limited
232,657
232,657
Weighted average number of ordinary shares used as denominator in
calculating earnings per share
546,780,636
546,780,636
546,780,636
546,780,636
1 Earnings per share is restated by adjusting the weighted average number of ordinary shares in order to incorporate the bonus element in the 2021 rights
issue, as per AASB 133.
Reconciliation of weighted average number of shares used as the denominator:
Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share
559,519,258 546,780,636
Adjustments for calculation of diluted earnings per share:
Share appreciation rights
Performance rights
Weighted average number of ordinary shares and potential ordinary shares used as the denominator in
calculating diluted earnings per share
91,168
136,637
-
559,747,063 546,780,636
2021
Number
2020
Number
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 calculated by dividing the profit attributable to members of Computershare Limited by the weighted
average number of ordinary shares outstanding during the financial year, adjusted for the effects of dilutive potential ordinary
shares in the employee Long-Term Incentive Plan (see note 40b).
No employee performance rights or share appreciation rights have been issued since year end.
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.
75 | COMPUTERSHARE | ANNUAL REPORT | 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 30 June 2021 management adjustment items include the following:
Amortisation
Amortisation of acquisition related intangible assets
(57,119)
14,398
(42,721)
Gross
$000
Tax effect
$000
Net of tax
$000
Acquisitions and disposals
Acquisition related expenses
Gain on disposal
Other
Major restructuring costs
Reversal of provision
Marked to market adjustments – derivatives
Total management adjustment items
(41,196)
7,578
(33,618)
11,241
(2,136)
9,105
(36,113)
6,958
(29,155)
4,428
(1,188)
3,240
(2,304)
691
(1,613)
(121,063)
26,301
(94,762)
Management adjustment items
Management adjustment items net of tax for the year ended 30 June 2021 were as follows:
Amortisation
> Customer relationships and most of 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 in the year ended 30 June 2021 was $42.7 million. Amortisation of mortgage servicing
rights, certain acquired software as well as intangibles purchased outside of business combinations is included as a charge
against management earnings.
Acquisitions and disposals
> $22.9 million of expenses were incurred for the ongoing integration of Equatex including rollout of the acquired software.
Acquisition related expenses were incurred for the acquisition of Wells Fargo of $9.0 million, including a $5.6 million foreign
exchange loss on derivatives used to fix the amount of USD needed to fund the acquisition from the AUD equity issue.
Additionally, costs in the sum of $1.7 million were incurred for redundancies associated with delivering synergies from other
recent acquisitions, Corporate Creations and Verbatim.
> Disposal of the Group’s shareholding in Euroclear Holding SA/NV resulted in a gain of $9.1 million.
Other
> Costs of $29.2 million were incurred in the current reporting period in respect of major restructuring programmes spanning
several years. $22.1 million of these costs related to UK mortgage services including the costs associated with workforce
reductions and a property rationalisation programme. $2.5 million was related to the Global Operations transformation and
$2.8 million was incurred on other property rationalisation across the Group.
> A $3.2 million gain arose from a reversal of a provisional tax liability associated with a previously identified business issue that
has now been resolved.
> Revaluation of derivatives that have not received hedge designation or the ineffective portion of derivatives in hedge
relationships is taken to profit or loss in the statutory results. The impact in the current reporting period was a loss of
$1.6 million.
76
For the year ended 30 June 2020 management adjustment items were as follows:
Amortisation
Amortisation of intangible assets
Acquisitions and disposals
Acquisition related expenses
Benefit of tax losses not previously recognised on Equatex acquisition
One-off tax expense on Equatex IP restructure
Acquisition accounting adjustments
Other
Major restructuring costs
Marked to market adjustments – derivatives
Total management adjustment items
5. SEGMENT INFORMATION
Gross
$000
Tax effect
$000
Net of tax
$000
(57,856)
15,259
(42,597)
(21,011)
-
-
5,355
7,666
1,054
1,410
(371)
(15,656)
7,666
1,054
1,039
(25,972)
(3,932)
6,033
1,180
(19,939)
(2,752)
(107,361)
36,176
(71,185)
In accordance with AASB 8 Operating Segments, the Group has identified its operating segments to be the following six global
business lines:
a. Issuer Services
b. Mortgage Services & Property Rental Services
c. Employee Share Plans & Voucher Services
d. Business Services
e. Communication Services & Utilities
f. Technology Services
Issuer Services comprise register maintenance, corporate actions, stakeholder relationship management, corporate governance
and related services. Mortgage Services & Property Rental Services comprise mortgage servicing and related activities,
together with tenancy bond protection services in the UK. Employee Share Plans & Voucher Services comprise the provision of
administration and related services for employee share and option plans, together with Childcare Voucher administration in the UK.
Business Services comprise the provision of bankruptcy, class actions and corporate trust administration services. Communication
Services and Utilities operations comprise document composition and printing, intelligent mailing, inbound process automation,
scanning and electronic delivery. Technology Services comprise the provision of software specialising in share registry and
financial services.
There is a corporate function which 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.
The operating segments presented reflect the manner in which the Group is internally managed and the financial information
reported to the chief operating decision maker (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. The key segment performance measure is
based on earnings before interest and tax (management adjusted EBIT).
The Group’s key segment performance measure has changed during the reporting period from earnings before interest, tax,
amortisation and depreciation (management adjusted EBITDA) to management adjusted EBIT. The Group has determined
that management adjusted EBIT provides a better measure of performance, as there are significant levels of depreciation and
amortisation in certain business lines included in management earnings.
Comparative segment information has been restated to reflect the new key segment performance measure. Consequently, the
segment information disclosed is not entirely comparable to the information disclosed in the prior reporting period.
77 | COMPUTERSHARE | ANNUAL REPORT | 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
OPERATING SEGMENTS
June 2021
Total segment revenue and
other income
Intersegment revenue
External revenue and
other income
Revenue by geography:
Asia
Australia & New Zealand
Canada
Continental Europe
UK, Channel Islands, Ireland & Africa
United States
Management adjusted EBIT
June 2020
Total segment revenue and
other income
Employee
Share
Plans &
Voucher
Services
$000
Communi-
cation
Services &
Utilities
$000
Mortgage
Services &
Property
Rental
Services
$000
Issuer
Services
$000
Business
Services
$000
Technology
Services
$000
Total
$000
1,026,870
335,428
341,289
608,965
211,480
225,337
2,749,369
(27,566)
(2,410)
(171,597)
-
(1,313)
(225,301)
(428,187)
999,304
333,018
169,692
608,965
210,167
36
2,321,182
116,527
117,155
80,465
58,767
104,612
521,778
999,304
276,159
44,806
13,260
19,430
10,688
188,047
56,787
-
82,951
8,714
31,405
7,742
38,880
333,018
169,692
82,051
26,035
-
-
-
-
158,835
450,130
608,965
10,001
-
-
71,568
-
9,272
129,327
210,167
51,078
-
26
10
-
-
-
161,333
213,392
180,187
100,860
468,508
1,196,902
36
2,321,182
1,465
446,789
918,562
306,346
331,286
665,149
244,863
236,890
2,703,096
Intersegment revenue
(23,813)
(1,742)
(162,465)
-
(1,246)
(236,054)
(425,320)
External revenue and other income
894,749
304,604
168,821
665,149
243,617
836
2,277,776
Revenue by geography:
Asia
Australia & New Zealand
Canada
Continental Europe
UK, Channel Islands, Ireland & Africa
United States
Management adjusted EBIT
79,928
99,657
74,557
44,745
102,625
493,237
894,749
258,506
32,612
12,321
18,752
8,830
175,619
56,470
-
81,838
7,776
33,843
6,669
38,695
304,604
168,821
62,095
27,411
-
-
-
-
226,413
438,736
665,149
70,425
-
-
84,623
-
14,209
144,785
243,617
87,296
-
858
33
-
112,540
194,674
185,741
87,418
(55)
525,480
-
1,171,923
836
2,277,776
1,721
507,454
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
Other income
Corporate revenue
Total revenue from continuing operations
2021
$000
2020
$000
2,749,369
2,703,096
(428,187)
(425,320)
(39,652)
(3,905)
1,631
3,410
2,283,161
2,277,281
78
Management adjusted EBIT
Management adjusted results are used, along with other measures, to assess operating business performance. The Group believes
that exclusion of certain items permits a 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 EBIT to operating profit before income tax is provided as follows:
Management adjusted EBIT – operating segments
Management adjusted EBIT – corporate
Management adjusted EBIT
Management adjustment items (before related income tax effect):
Amortisation of intangible assets
Acquisition related expenses
Major restructuring costs
Gain on disposal
Reversal of provision
Marked to market adjustments – derivatives
Acquisition accounting adjustments
Total management adjustment items (note 4)
Finance costs
Profit before income tax from continuing operations
Geographical Information
Australia
United Kingdom
United States
Canada
Hong Kong
Switzerland
Other countries
Total
2021
$000
2020
$000
446,789
507,454
(727)
(9,405)
446,062
498,049
(57,119)
(57,856)
(41,196)
(21,011)
(36,113)
(25,972)
11,241
4,428
-
-
(2,304)
(3,932)
-
1,410
(121,063)
(107,361)
(54,867)
(66,325)
270,132
324,363
Geographical allocation
of external revenue
Geographical allocation
of non-current assets
2021
$000
203,404
324,983
2020
$000
185,889
388,408
2021
$000
198,693
217,312
2020
$000
174,998
225,199
1,185,405
1,201,873
2,200,938
2,238,014
180,245
160,752
73,039
185,577
108,804
173,453
164,381
69,851
69,703
60,158
402,806
400,269
153,333
146,572
86,785
84,330
2,283,161
2,277,281
3,349,838
3,356,894
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 $2,079.8 million (2020: $2,091.4 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 $3,151.1 million (2020: $3,181.9 million).
79 | COMPUTERSHARE | ANNUAL REPORT | 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6. INCOME TAX EXPENSE AND BALANCES
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
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
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Profit before income tax expense
Prima facie income tax expense thereon at 30%
Variation in tax rates of foreign controlled entities
Tax effect of permanent differences:
Non-deductible expenses related to Wells Fargo acquisition
Prior year tax (over)/under provided
Withholding tax not creditable
Non-deductible lease related provisions
Effect of changes in tax rates and laws
Benefit of tax losses not previously recognised on Equatex acquisition
One-off tax expense on Equatex IP restructure
Net other
Income tax expense / (credit)
(c) Amounts recognised directly in equity
Deferred tax – share-based remuneration
Deferred tax – share rights issue costs
(d) Tax benefit/ (expense) relating to items of other comprehensive income
Cash flow hedges
Net investment hedges
2021
$000
2020
$000
56,058
98,026
(1,479)
(2,131)
54,579
95,895
17,014
9,340
26,354
80,933
(7,031)
2,768
(4,263)
91,632
270,132
324,363
81,040
(4,357)
1,823
97,309
25
-
(1,479)
(2,131)
1,353
6,266
805
(38)
-
-
1,786
80,933
398
626
1,024
-
(1,213)
(7,666)
(1,054)
96
91,632
253
-
253
2,244
(3,564)
(2,756)
(512)
3,680
116
80
(e) Unrecognised tax losses
As at 30 June 2021, companies within the consolidated entity had estimated unrecognised tax losses of $4.1 million
(2020: $6.6 million) available to offset against future years’ taxable income. Tax losses of $3.4 million will expire between
2022 and 2028.
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
Employee benefits
Property, Plant & Equipment
Deferred revenue
Doubtful debts
Provisions
Finance leases
Other creditors & accruals
Financial instruments and foreign exchange
Share based remuneration
Intangibles
Mortgage servicing related liabilities
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
Change in accounting policy
Opening balance at 1 July (restated)
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)
Closing balance at 30 June
2021
$000
2020
$000
33,200
30,004
9,409
4,719
3,145
3,194
20,125
47,560
8,689
67,854
5,389
28,357
44,204
3,195
6,163
3,927
2,509
3,330
19,427
35,843
8,436
77,239
3,610
27,276
67,554
2,098
279,040
287,416
(129,911)
(126,263)
149,129
161,153
161,153
139,179
-
40,640
161,153
179,819
10,370
(1,999)
(17,014)
1,024
(2,756)
7,031
253
3,680
(3,648)
(28,328)
-
697
149,129
161,153
The total deferred tax assets expected to be recovered after more than 12 months amounts to $172.6 million (2020: $188.5 million).
81 | COMPUTERSHARE | ANNUAL REPORT | 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Deferred tax liabilities
The balance comprises temporary differences attributable to:
Goodwill
Intangible assets
Right-of-use 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
Change in accounting policy
Opening balance at 1 July (restated)
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
2021
$000
2020
$000
206,053
110,711
41,104
298
5,964
198,449
118,155
29,976
3,065
3,960
364,130
353,605
(129,911)
(126,263)
234,219
227,342
227,342
217,589
-
36,917
227,342
254,506
3,116
9,341
(107)
2,768
(309)
(2,194)
(3,648)
(28,328)
(1,623)
697
234,219
227,342
The total deferred tax liabilities expected to be settled after more than 12 months amount to $287.9 million (2020: $352.6 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 ATO has previously challenged the inclusion of the Australian Group’s intangible assets in the thin capitalisation calculation
used to determine the amount of tax-deductible interest expense in Australia. The matter has now been resolved and
Computershare has been advised that no further action will be taken on the matter. Accordingly, the Group has concluded that
there is no longer a contingent liability related to this matter at 30 June 2021 (30 June 2020: contingent liability $20.4 million).
82
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
Cash and cash equivalents in the consolidated cash flow statement
(b) Reconciliation of net profit after income tax to net cash from operating activities
Net profit after income tax
Adjustments for:
Depreciation and amortisation
Net (gain)/loss on asset disposals and revaluation of assets
Net (gain)/loss on lease modifications and terminations
Share of net (profit)/loss of associates and joint ventures accounted for using equity method
Amortisation of USD senior note fair value adjustment to interest expense
Employee benefits – share based expense
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
Net cash and cash equivalents from operating activities
(c) Reconciliation of liabilities arising from financing activities
2021
$000
816,810
816,810
2020
$000
597,313
597,313
189,199
232,731
239,290
206,168
(40,987)
13,761
-
-
(389)
(239)
(20,960)
20,618
2,304
-
18,833
3,932
35,359
45,403
(141)
(519)
(68,681)
3,518
(54,262)
14,442
33,452
6,273
(11,993)
48,329
306,636
608,805
Current
borrowings
$000
Non-current
borrowings
$000
Current
lease
liabilities
$000
Non-current
lease
liabilities
$000
Cross
currency
swap
$000
Total
$000
Opening balance at 1 July 2020
287,410
1,742,410
43,159
158,910
3,148
2,235,037
Cash flows
Non-cash changes:
Additions
Fair value adjustments
Transfers and other
Currency translation difference
Balance at 30 June 2021
(68,135)
(273,103)
(48,476)
-
(3,183)
(392,897)
-
-
-
2,006
74,914
-
76,920
(19,871)
-
-
188
(19,683)
101,958
(103,694)
51,366
(51,366)
1,143
41,868
2,550
11,030
-
51
(1,736)
56,642
322,376
1,387,610
50,605
193,488
204
1,954,283
(d) Acquisitions and disposals of businesses
For details of businesses acquired during the year and related cash flows refer to note 8.
83 | COMPUTERSHARE | ANNUAL REPORT | 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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 July 2020, Computershare acquired 100% of Verbatim LLC (Verbatim), a global corporate secretarial managed services
provider located in the United States. Total consideration was $9.2 million. The acquisition enhances Computershare’s suite of
integrated governance solutions.
This business combination did not materially contribute to the total revenue of the Group.
Details of the acquisition are as follows:
Cash consideration
Contingent consideration
Total purchase consideration
Less fair value of identifiable assets acquired
Goodwill on consolidation
The goodwill recognised is not deductible for tax purposes.
Assets and liabilities arising from this acquisition are as follows:
Intangible assets
Receivables
Cash and cash equivalents
Payables
Deferred tax liabilities
Current tax liabilities
Net assets
Purchase consideration:
Inflow/(outflow) of cash to acquire the entities, net of cash acquired:
Cash balance acquired
Less cash paid
Net inflow/(outflow) of cash
$000
7,985
1,250
9,235
(5,235)
4,000
Fair value
$000
6,650
2,519
611
(2,840)
(1,623)
(82)
5,235
$000
611
(7,985)
(7,374)
(b) On 24 March 2021, the Group entered into an agreement to acquire the assets of Wells Fargo Corporate Trust Services (“CTS”), a
leading US based provider of trust and agency services to government and corporate clients. The acquisition is a highly strategic
fit with Computershare’s existing Canadian and US corporate trust operations and is expected to increase scale and market
share in the US corporate trust market.
The agreed cash consideration of $750 million to be paid on completion will be funded through a combination of debt and cash
proceeds from the rights issue (note 27). The acquisition is subject to customary closing conditions, which are expected to
conclude by the end of calendar year 2021. All required regulatory approvals have been received post year-end.
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.
84
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.
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. INTANGIBLE ASSETS
At 1 July 2020
Opening cost
Opening accumulated amortisation
Opening net book amount
Additions (net of adjustments and reclassifications)1
Disposals
Amortisation charge2,4
Currency translation difference
Closing net book amount
At 30 June 2021
Cost
Accumulated amortisation
Closing net book amount
At 1 July 2019
Opening cost
Opening accumulated amortisation
Opening net book amount
Additions (net of adjustments and reclassifications)1
Amortisation charge2,4
Currency translation difference
Transfers and other
Closing net book amount
At 30 June 2020
Cost
Accumulated amortisation
Closing net book amount
Customer
contracts
and
relationships
$000
Mortgage
Servicing
Rights
$000
Goodwill
$000
Other3
$000
Total
$000
1,857,127
747,195
1,034,131
100,374
3,738,827
-
(324,815)
(321,744)
(39,442)
(686,001)
1,857,127
422,380
4,421
6,387
712,387
166,778
60,932
3,052,826
1,609
179,195
-
-
(61,303)
-
(61,303)
-
(52,264)
(139,397)
(13,026)
(204,687)
50,799
9,461
-
2,760
63,020
1,912,347
385,964
678,465
52,275
3,029,051
1,912,347
773,218
1,139,593
105,732
3,930,890
-
(387,254)
(461,128)
(53,457)
(901,839)
1,912,347
385,964
678,465
52,275
3,029,051
1,768,025
688,864
763,296
98,266
3,318,451
-
(275,231)
(219,374)
(41,166)
(535,771)
1,768,025
413,633
94,996
60,884
543,922
270,959
57,100
2,782,680
6,703
433,542
-
(52,846)
(102,494)
(11,366)
(166,706)
(5,894)
-
709
-
-
-
579
7,916
(4,606)
7,916
1,857,127
422,380
712,387
60,932
3,052,826
1,857,127
747,195
1,034,131
100,374
3,738,827
-
(324,815)
(321,744)
(39,442)
(686,001)
1,857,127
422,380
712,387
60,932
3,052,826
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 Other intangible assets include intellectual property, licences, software and brands.
4 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 (note 3).
85 | COMPUTERSHARE | ANNUAL REPORT | 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 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 finalisation of acquisition accounting within the 12-month
period, provisional amounts are 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 combinations 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 of eight years for the interest-sensitive portfolio and nine years for the non
interest-sensitive portfolio.
Key estimates and judgements
The estimated useful life of mortgage servicing rights reflects management’s estimate of the average life of the underlying
mortgages. The most significant factors impacting the useful life are US mortgage interest rates and the rate of the borrowers’
prepayments. The average life of mortgage servicing rights decreases where US interest rates are lower or borrower
prepayments are higher than previously estimated, which would result in an increase in amortisation expense.
As a result of the decreases in the US interest rates that occurred during the prior year, the useful life estimate of the
interest-sensitive part of the total portfolio was revised downwards from nine years to eight years effective from 1 July 2020,
resulting in higher amortisation expense during the reporting period.
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.
Costs incurred in configuring or customising software as a service (SaaS) arrangements can only be recognised as intangible
assets if the implementation activities create an intangible asset that the entity controls and the intangible asset meets the
recognition criteria. Those costs that do not result in intangible assets are expensed as incurred, unless they are paid to the
suppliers of the SaaS arrangements to significantly customise the cloud-based software for the Group, in which case the costs are
recorded as a prepayment for services and amortised over the expected renewable term of the arrangement.
Impairment of intangible assets with a finite useful life
Intangible assets with a finite useful life are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. As intangible assets do not generate independent cashflows, they are tested for impairment at the
CGU level to which they belong.
10. IMPAIRMENT
Impairment test for goodwill
Goodwill is tested for impairment at least once a year, or more frequently if events or changes in circumstances indicate that the
carrying amount may not be recoverable. Where required, 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.
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.
86
The carrying amount of goodwill is allocated to the following groups of CGU’s constituting most of the Group’s operating segments:
Class Actions and Bankruptcy
Communication Services and Utilities
Corporate Trust
Employee Share Plans
Issuer Services
Mortgage Services and Property Rental Services
Voucher Services
30 June 2021
$000
30 June 2020
$000
90,114
121,103
78,897
398,619
89,901
115,230
72,529
383,057
1,045,679
1,021,978
165,435
12,500
163,341
11,091
1,912,347
1,857,127
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. In a limited number of cases, the CGU cash flow projections are for a period longer than five years
to account for the nature of the cash flows and specific circumstances (eg, CGUs in a wind-down mode).
No impairment charge has been recognised for the financial year ended 30 June 2021.
Key estimates and judgements
Key assumptions used in the value-in-use calculations are described below for each group of CGUs with allocated goodwill.
The impact of the Covid-19 pandemic was included in estimates of the five-year cash flow projections. Given the evolving nature
of Covid-19 and uncertainty around the extent of its duration and economic impact, changes to estimates and assumptions may
arise in the future.
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 on
approved budgets covering a one-year period, with
subsequent periods based on the Group’s expectations
of growth excluding the impact of possible future
acquisitions, business improvement and restructuring.
Cash flows also include margin income projections, which
reflect expectations regarding future client balances and
interest rates.
The earnings growth rates applied beyond the initial five-year
period are as follows:
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:
Class Actions and Bankruptcy
Communication Services and
Utilities
Corporate Trust
Employee Share Plans
Issuer Services
Mortgage Services and Property
Rental Services
Voucher Services1
2021
2.0%
2.0%
2.0%
1.9%
2.1%
2.0%
n/a
2020
2.0%
2.0%
2.0%
1.9%
2.0%
2.0%
Class Actions and Bankruptcy
Communication Services and
Utilities
Corporate Trust
Employee Share Plans
Issuer Services
Mortgage Services and Property
Rental Services
2021
8.7%
9.3%
8.7%
8.4%
8.8%
8.5%
2020
9.4%
9.6%
9.4%
8.1%
9.2%
9.0%
n/a
Voucher Services
24.0%
20.4%
1 There is no terminal value for Voucher Services as the business is in wind-down mode.
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.
87 | COMPUTERSHARE | ANNUAL REPORT | 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 11. HEDGE ACCOUNTING
The Group applies hedge accounting as follows:
Fair value hedge
Cash flow hedge
Nature of hedge
The hedge of fair value risk of
a financial liability.
The hedge of a highly probable forecast transaction.
Hedge of net investment in
foreign operations
The hedge of changes in the
consolidated entity’s foreign
denominated net assets
due to changes in foreign
currency rates.
Hedged risk
Interest rate risk
Interest rate risk
Foreign exchange risk
Foreign exchange risk
Hedged item
Fixed interest rate US Private
Placement issues.
Highly probable interest cash
flows from which margin
income is derived.
Highly probable cash flows
associated with foreign
currency denominated debt.
Foreign operations
Hedging
instruments
Interest rate swaps
Interest rate swaps
Cross currency swaps
Cross currency swaps,
foreign currency
denominated issued debt
Designation and
documentation
At the inception of the transaction, the Group documents its risk management objective and strategy for the hedge, hedging
instrument, hedged item, hedged risk and how the hedge relationship will meet the hedge effectiveness requirements.
Hedge
effectiveness
method
Accounting
treatment for
the hedging
instrument
Accounting
treatment
for the
hedged item
Accounting
treatment
for hedge
ineffectiveness
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness
assessments to ensure that an economic relationship exists between the hedged item and hedging instrument.
The assessment is based on:
> existence of an economic relationship between the hedged item and the hedging instrument
>
>
the effect of credit risk not dominating the changes in value of either the hedged item or the hedging instrument
the hedge ratio being reflective of the Group’s risk management approach.
Fair value through the
income statement.
Carrying value adjusted
for changes in fair value
attributable to the hedged
risk; fair value through the
income statement.
Fair value through the cash
flow hedge reserve and then
recognised in the income
statement at the time at
which the hedged item
affects the income statement
for the hedged risk.
Fair value through the cash
flow hedge reserve and then
recognised in the income
statement at the time at
which the hedged item
affects the income statement
for the hedged risk.
Fair value through the foreign
currency translation reserve
and recognised in the income
statement at the time at
which there is a disposal of
the hedged foreign operation.
Accounted for under other
accounting standards
(revenue).
Accounted for under other
accounting standards
(foreign exchange).
Foreign exchange gains and
losses are recognised in the
Group’s foreign currency
translation reserve.
Recognised in the income
statement to the extent that
changes in fair value of the
hedged item attributable to
the hedged risk are not offset
by changes in fair value of
the hedging instrument.
Recognised in the income
statement to the extent to
which changes in fair value
of the hedging instrument
exceed, in absolute terms, the
change in the fair value of the
hedged item.
Recognised in the income
statement to the extent to
which changes in fair value
of the hedging instrument
exceed, in absolute terms, the
change in the fair value of the
hedged item.
Recognised in the income
statement to the extent to
which changes in fair value
of the hedging instrument
exceed, in absolute terms, the
change in the fair value of the
hedged item.
Accounting
treatment if
the hedge
relationship is
discontinued
Where the hedged item still
exists, adjustments to the
hedged item are amortised to
the income statement on an
effective interest rate basis.
The gain or loss remains
recognised in the foreign
currency translation reserve
until such time as the
foreign operation is partially
disposed of or sold.
The gain or loss remains
in the cash flow hedge
reserve to the extent that
the hedged cash flows are
still expected to take place
and subsequently recognised
in the income statement
at the time at which the
hedged item affects the
income statement for the
hedged risk.
Where the hedged cash flows
are no longer expected to
take place, the gain or loss in
the cash flow hedge reserve
is recognised immediately in
the income statement.
The gain or loss remains
in the cash flow hedge
reserve to the extent that
the hedged cash flows are
still expected to take place
and subsequently recognised
in the income statement
at the time at which the
hedged item affects the
income statement for the
hedged risk.
Where the hedged cash flows
are no longer expected to
take place, the gain or loss in
the cash flow hedge reserve
is recognised immediately in
the income statement.
Hedge ratio
The hedge ratio is reflective of the Group’s risk management objectives.
The notional of the interest
rate swap is allocated to the
hedged item on a one-for-one
basis.
The notional of the interest
rate swap is allocated to
hedged item on a one-for-one
basis.
The notional amount of the
cross currency swap equals
the notional amount of the
hedged item.
Foreign currency borrowings
and swaps are allocated
to the net investments in
foreign operations on a
one-for-one basis.
88
Hedging instruments
The following table details the hedging instruments, nature of hedged risks, as well as the notional and the carrying amount
of derivative financial instruments and, in the case of net investment hedges, the notional of foreign denominated debt issued,
for each type of hedge relationship. The maturity profile for the hedging instruments’ notional amounts is reported based on
their contractual maturity. Designated cross-currency swaps for foreign exchange risk are included as a single notional amount
per derivative.
Hedging
Instrument
Risk
Notional
Carrying
amount
2021
Assets
Less than
3 months
$000
3 to 12
months
$000
1 to 5
years
$000
Over 5
years
$000
Total
$000
Total
$000
Cash flow hedges
Interest rate swaps
Interest
-
-
22,540
-
22,540
Net investment hedges Cross currency swaps Foreign exchange
- 298,608
-
- 298,608
319
13
Liabilities
Net investment hedges Cross currency swaps Foreign exchange
- 170,700
-
- 170,700
218
Fair value hedges
Interest rate swaps
Interest
-
-
- 350,000 350,000
1,314
2020
Assets
Cash flow hedges
Interest rate swaps
Interest
50,000
40,000
20,588
- 110,588
1,114
Cash flow hedges
Cross currency swaps Foreign exchange
- 100,000
100,000
Net investment hedges Cross currency swaps Foreign exchange
- 183,812
-
- 183,812
130
308
Liabilities
Net investment hedges Cross currency swaps Foreign exchange
- 268,026
-
- 268,026
3,456
Net investment hedges Borrowings
Foreign exchange
-
- 100,789
- 100,789 100,789
Hedging instrument executed rates
The following table shows the executed rates for the hedging instruments that have been designated in cash flow hedges and net
investment hedges that are in place at balance date.
Cash flow hedges
Net investment hedges
Hedging instruments
Currency/Currency pair
Interest rate swaps
AUD
Cross currency swaps
EUR/AUD
CHF/AUD
Weighted average
hedged rate
0.95%
0.6328
0.6935
Hedge ineffectiveness
Hedge ineffectiveness, in the case of a fair value hedge, is the extent to which the changes in the fair value of the hedging
instrument differ to that of the hedged item, and in the case of cash flow and net investment hedge relationships, the extent to
which the change in the hedging instrument exceeds that of the hedged item. Sources of hedge ineffectiveness primarily arise from
changes in credit risk of the counterparties, breakdown in correlation or impact of the basis spread between short-term interest
rates in the same currency changes in market premiums and differences in reset dates, risk and discount rates between the hedged
item (possibly represented by a hypothetical derivative) and hedging instrument. The effects of the forthcoming IBOR reforms, as
outlined below, may also result in hedge ineffectiveness.
The following table reflects the hedge ineffectiveness during the period, as reported in direct services in the statement of
comprehensive income:
Hedging
instruments
Risk
2021
Cash flow hedges
Interest rate swaps
Interest
Cash flow hedges
Cross currency swaps
Foreign exchange
Fair value hedges
Interest rate swaps
Interest
Net investment hedges Cross currency swaps
Foreign exchange
2020
Cash flow hedges
Interest rate swaps
Interest
Cash flow hedges
Cross currency swaps
Foreign exchange
Fair value hedges
Interest rate swaps
Interest
Net investment hedges Cross currency swaps
Foreign exchange
89 | COMPUTERSHARE | ANNUAL REPORT | 2021
Gains/(losses)
on hedging
instruments
$000’s
Gains/(losses)
on hedged items
attributable to the
hedged risk
$000’s
Hedge
ineffectiveness
recognised in the
income statement
$000’s
(117)
(9,350)
(1,314)
9,082
13,810
(1,145)
47,083
(12,112)
127
9,350
(1,000)
(9,082)
(13,837)
1,145
(51,718)
12,118
10
-
(2,314)
-
(27)
-
(4,635)
6
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Effect of IBOR reform
Following the financial crisis, the reform and replacement of benchmark interest rates such as USD LIBOR and other interbank
offered rates (‘IBORs’) has become a priority for global regulators. The Group’s risk exposure that is directly affected by the
interest rate benchmark reform are some of the Group’s fixed-interest US Private Placement issues. These notes are hedged, using
interest rate swaps, for changes in fair value attributable to USD LIBOR that is the current benchmark interest rate. However,
as part of the reforms noted above, the UK Financial Conduct Authority (‘FCA’) has decided to no longer compel panel banks to
participate in the USD LIBOR submission process after 30 June 2023 and to cease oversight of these benchmark interest rates.
Regulatory authorities and private sector working groups, including the International Swaps and Derivatives Association (‘ISDA’)
and the Working Group on Sterling Risk-Free Reference Rates, have been discussing alternative benchmark rates for USD LIBOR.
It is currently expected that SOFR (Secured Overnight Financing Rate) will replace USD LIBOR. There are key differences between
USD LIBOR and SOFR. USD LIBOR is a ‘term rate’, which means that it is published for a borrowing period (such as 1 month
or 3 months), and it is ‘forward looking’, because it is published at the beginning of the borrowing period. SOFR is currently
a ‘backward-looking’ rate, based on overnight rates from actual transactions, and it is published at the end of the overnight
borrowing period. Furthermore, USD LIBOR includes a credit spread over the risk-free rate, which SOFR does not. To transition
existing contracts and agreements that reference USD LIBOR to SOFR, adjustments for term differences and credit differences
might need to be applied to SOFR, to enable the two benchmark rates to be economically equivalent on transition.
The Group currently has three contracts which reference USD LIBOR and extend beyond 2023 ($350 million notional value).
The Group currently anticipates that the areas of greatest change are updating systems and processes which capture USD
LIBOR-referenced contracts, amendments to those contracts, and updating hedge designations. The Group continues to engage
with industry participants to ensure an orderly transition to SOFR and to minimise the risks arising from transition.
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 guidance 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 as permitted under policy 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 adjusted EBITDA). Net debt is calculated as borrowings less cash and cash equivalents. EBITDA is
reported based on the currently applicable accounting standards, including AASB 16 Leases
Borrowings
Cash and cash equivalents
Net debt
Management adjusted EBITDA
Net debt to management adjusted EBITDA
Net debt to management adjusted EBITDA (excluding mortgage servicing debt)1
1 Excludes mortgage servicing debt of $219.5 million (2020: $187.5 million).
2021
$000
2020
$000
1,709,986
2,029,820
(816,810)
(597,313)
893,176
1,432,507
628,234
646,361
1.42
1.07
2.22
1.93
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.
Computershare has a target neutral gearing level such that net debt to EBITDA is between 1.75x – 2.25x excluding the non-recourse
SLS advance facility debt, with flexibility to temporarily go above this range to take advantage of compelling investment
opportunities. Computershare will consider capital management initiatives to maintain leverage within this target band.
On 24 March 2021, Computershare announced a fully underwritten pro rata accelerated renounceable entitlement offer under
which eligible shareholders were entitled to subscribe for 1 share for every 8.8 shares held, at a price of AUD$13.55 per share
(a 9.6% discount to the closing price on 23 March 2021). The offer comprised an institutional entitlement offer (which completed
on 7 April 2021) and a retail entitlement offer (which completed on 29 April 2021). The proceeds from the rights issue were used
to repay borrowings and will be used to partially fund the CTS acquisition (note 8b). The timing of the rights issue relative to the
projected financial close of the CTS acquisition has resulted in a temporary material reduction in the gearing level at balance date.
90
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 $18.8 billion (2020: $17.2 billion) and in relation to these balances, the consolidated entity has in place interest rate
derivatives totalling $22.5 million notionally (2020: $110.6 million).
Hedging strategy
i) Fixed rate debt
Where fixed rate debt is issued, the Group may enter interest rate derivatives to manage the change in fair value of fixed rate
debt obligations, arising from changes in variable interest rates. At 30 June 2021, interest rate derivatives totalling $350.0 million
hedging the fair value of fixed rated debt obligations were outstanding.
ii) Margin income
Interest rate risk is managed in accordance with Board approved policy, which sets out minimum/maximum thresholds with respect
to currency and maturities of margin income balances. Floating rate debt is considered a natural hedge against margin income
balances and forms part of the hedge allocation required to meet policy guidelines. The Group also uses interest rate swaps
designated as cash flow hedges to manage the variability of cash flows attributable to changes in interest rates associated with
highly probable interest earned on client balances (margin income).
At 30 June, 2021, $22.5 million notional value of interest rate swaps designated as a cash flow hedge of margin income were
outstanding.
Interest rate sensitivity
The table below provides an indication of sensitivity of the Group’s profit before tax and other components of equity to movements
in interest rates with all other variables held constant.
Movement in basis points
Sensitivity of profit before tax
Australian dollar
United States dollar
Canadian dollar
Great British pound
Euro
Swiss Franc
Hong Kong dollar
Other
Total
Sensitivity of other components of equity
United States dollar
Australian dollar
2021
$000
2020
$000
+50
-50
+50
-50
2,812
(2,812)
256
895
(1,541)
(303)
(1,561)
274
96
928
(256)
(895)
1,541
303
1,561
(274)
(96)
(928)
955
(399)
468
(1,136)
(306)
(1,588)
-
261
(955)
399
(468)
1,136
306
1,588
-
(261)
(1,745)
1,745
-
(382)
-
390
(51)
(453)
51
464
The sensitivity of profit before tax 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 2021. Other components of equity change as a result of
an increase/decrease in the fair value of cash flow hedges. 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 certain client balances. Client balances have been excluded from the
sensitivity analysis where 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.
91 | COMPUTERSHARE | ANNUAL REPORT | 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Total margin income generated on client balances for the year was $107.0 million (2020: $199.4 million), reflecting a yield of
0.57% (2020: 1.16%) on average client balances. The decline in margin income reflects the annualised impact of the global interest
rate cuts in early 2020, as central banks around the world responded to the global pandemic. If the Group was able to achieve an
additional yield of 0.25% on the total average balances of $18.8 billion held during the reporting period, the Group’s profit before
tax would have increased by $47 million (-0.25%: $47 million decrease).
(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 currency translation 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.
Hedging strategy
The risk of changes in the net investments in foreign operations as a result of movements in foreign exchange rates is hedged
through a combination of foreign denominated borrowings and cross-currency swaps, in currencies that match the currencies of
the Group’s foreign operations.
Exchange rate sensitivity
The following table illustrates the sensitivity of the Group’s net assets (after hedging), with all other variables held constant, to
movements in the United States dollar against foreign currencies as at 30 June 2021. The currencies with largest impact on the
sensitivity analysis are Canadian dollar, Australian dollar, Great British pound and Swiss Franc. As a result of the exchange rate
volatility observed during the year, the Group has revised its assessment of reasonably possible changes in exchange rates to
10% (2020: 5%).
Movement in exchange rates %
Sensitivity of other components of equity
Canadian dollar
Australian dollar
Great British pound
Swiss Franc
2021
$000
2020
$000
+10%
-10%
+5%
-5%
(37,180)
(77,813)
37,180
77,813
(13,510)
(17,752)
13,510
17,752
25,063
(25,063)
10,031
(10,031)
(12,010)
12,010
(4,572)
4,572
(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, loan servicing advances, 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. Whilst collateral is not held as security for loan servicing advances, as outlined in note 16, loan servicing
advances receive priority over any other liability from the proceeds from the liquidation of the property.
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. Issuer services and plans services transacts
with various listed companies across a number of countries. The consolidated entity does not have a significant exposure to any
individual client.
Transactions involving derivative financial instruments are with counterparties with whom the Group has signed International
Swaps and Derivatives Association (ISDA) 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 and derivative instrument exposure.
92
(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 2022
June 2023
June 2024
June 2025
June 2026
June 2027
June 2028
June 2029
Total
Debt facilities
utilised
$million
Committed
debt facilities
$million
322.5
540.7
220.0
-
200.0
-
-
350.0
1,633.2
510.0
1,050.0
770.0
-
200.0
-
-
350.0
2,880.0
Since balance date, the Group has executed a 12 month facility extension (to August 2022) on $125m SLS Advance Facility and
appointed Arrangers in preparation for a Debt Capital Markets issuance planned to execute in 1H22.
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.
Contractual maturities of financial liabilities
As at 30 June 2021
Non-derivatives
Trade payables
Other payables
Borrowings
Lease liabilities (undiscounted)
Total non-derivatives
Derivatives
Net Settled (interest rate swaps)
Gross settled (cross currency swaps)
– (Inflow)
– Outflow
Total derivatives
As at 30 June 2020
Non-derivatives
Trade payables
Other payables
Borrowings
Lease liabilities (undiscounted)
Total non-derivatives
Derivatives
Gross settled (cross currency swaps)
– (Inflow)
– Outflow
Total derivatives
93 | COMPUTERSHARE | ANNUAL REPORT | 2021
Less than
1 year
$000
Between
1-5 years
$000
More than
5 years
$000
Total
contractual
cash flows
$000
19,889
471,871
491,919
57,671
-
3,061
960,497
137,960
-
-
19,889
474,932
388,150
1,840,566
99,090
294,721
1,041,350
1,101,518
487,240
2,630,108
3,246
(530)
(2,710)
6
(473,725)
470,879
-
-
-
-
(473,725)
470,879
400
(530)
(2,710)
(2,840)
14,682
480,055
-
1,052
-
-
14,682
481,107
341,329
1,248,351
607,630
2,197,310
49,512
151,907
94,562
295,981
885,578
1,401,310
702,192
2,989,080
(556,465)
554,064
(2,401)
-
-
-
-
-
-
(556,465)
554,064
(2,401)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (e) Fair value measurements
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 13), which are included in the financial
assets at fair value 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 interest in net assets of these entities,
which approximate their fair values. As profits are realised and dividends are paid to investors, the net assets of these entities
decrease and so does the fair value of the Group’s investment.
The following tables present the Group’s financial assets and liabilities measured and recognised at fair value at 30 June 2021.
The comparative figures are also presented below.
As at 30 June 2021
Assets
Financial assets at fair value through profit or loss
Total assets
Liabilities
Financial liabilities at fair value through profit or loss
Deferred consideration
Total liabilities
As at 30 June 2020
Assets
Financial assets at fair value through profit or loss
Total assets
Liabilities
Financial liabilities at fair value through profit or loss
Deferred consideration
Total liabilities
Level 1
$000
Level 2
$000
Level 3
$000
Total
$000
9,162
9,162
832
832
32,756
42,750
32,756
42,750
-
-
-
1,532
-
1,532
-
10,716
10,716
1,532
10,716
12,248
16,976
16,976
2,651
38,065
2,651
38,065
-
3,456
-
-
-
-
17,581
3,456
17,581
57,692
57,692
3,456
17,581
21,037
94
The following table presents the changes in level 3 items for the periods ended 30 June 2021 and 30 June 2020:
Opening balance at 1 July
Payments
Additions
Return of capital
Gains/(losses) recognised in profit or loss
Currency translation difference
Closing balance at 30 June
Financial assets at fair
value through profit or loss
Deferred
consideration liability
2021
$000
2020
$000
2021
$000
2020
$000
38,065
38,646
(17,581)
(31,797)
-
8,873
15,180
-
-
8,519
(4,145)
(9,100)
(1,164)
-
-
-
-
-
-
(1,750)
-
-
(2,008)
786
32,756
38,065
(10,716)
(17,581)
Fair value of financial assets and liabilities
The carrying amounts of cash and cash equivalents, receivables, loan servicing advances, payables, non-interest bearing
liabilities, lease liabilities and loans approximate their fair values for the Group except for the USD Senior Notes of $ 1,069.0 million
(2020: $1,088.3 million), where the fair value based on level 2 valuation techniques described above was $1,065.8 million as at
30 June 2021 (2020: $1,113.7 million).
13. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
The Group classifies the following financial assets at fair value through profit or loss:
> debt securities that do not qualify for measurement at either amortised cost or fair value through other comprehensive income;
> derivatives, which are mandatorily measured at fair value through profit or loss;
> equity investments for which the entity has not elected to recognise fair value gains and losses through other comprehensive
income; and
>
investments in structured entities.
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value
through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Gains or losses
from subsequent re-measurement to fair value at each balance date are recognised in profit or loss.
Financial assets
Current
Debt securities
Derivative assets (b)
Equity securities
Non-current
Investment in structured entities (a)
Derivative assets (b)
Equity securities
Financial liabilities
Current
Derivative liabilities (b)
Non-current
Derivative liabilities (b)
95 | COMPUTERSHARE | ANNUAL REPORT | 2021
2021
$000
2020
$000
7,954
15,853
513
73
2,072
54
8,540
17,979
30,257
35,565
319
579
3,634
3,569
34,210
39,713
218
218
3,456
3,456
1,314
1,314
-
-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (a) Investment in structured entities
Non-current financial assets include $30.3 million of investments in unconsolidated structured entities (2020: $35.6 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% 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 compensation for providing such services.
The structured entities are designed to hold assets that will generate cash flows for their 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.
(b) 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. Refer to note 11 for further information on the
Group’s hedging instruments.
Derivative assets
Current
Non-current
Derivative assets – current and non-current
Fair values of interest rate derivatives designated as cash flow hedges
Fair values of cross currency derivatives designated as hedge of net investment
Fair values of cross currency derivatives designated as cash flow hedges
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 fair value hedges
Fair values of cross currency derivatives designated as hedge of net investment
Total derivative liabilities
2021
$000
513
319
832
319
13
-
500
832
218
1,314
1,532
1,314
218
1,532
2020
$000
2,072
579
2,651
1,114
308
130
1,099
2,651
3,456
-
3,456
-
3,456
3,456
96
14. BORROWINGS
Borrowings are initially recognised at fair value and are subsequently measured at amortised cost unless designated in a fair value
hedge relationship. 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)
ANZ syndicated facility (b)
Other bank loans (c)
USD Senior Notes (d)
Non-current
Bank loans (SLS non-recourse advance facility) (a)
USD Senior Notes (d)
Revolving syndicated bank facilities (e)
2021
$000
2020
$000
99,465
178,154
-
2,911
220,000
322,376
99,919
9,337
-
287,410
117,000
-
848,962
1,088,346
421,648
654,064
1,387,610
1,742,410
(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 12 March 2020, Computershare Limited executed a bilateral facility of $100.0 million with Australia and New Zealand Banking
Group Limited, initially maturing in March 2021. The facility was extended on 24 November 2020 to mature in March 2022. The
facility was undrawn at 30 June 2021.
(c) Other bank loans include warehouse facility held by an overseas subsidiary engaged in mortgage servicing activities.
(d) 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. The six and seven-year notes with a
total value of $110.0 million were repaid during the prior year. On 20 November 2018, Computershare US Inc. issued 24 notes in
the United States with a total value of $550.0 million. These notes were for a tenor of seven and ten 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. The following table provides a reconciliation of
the USD Senior Notes.
USD Senior Notes Reconciliation
USD Senior Notes at cost
Unamortised fair value adjustments – discontinued hedge relationship1
Fair value adjustments
Total net debt
Interest rate derivative – fair value hedge
Total
990,000
79,812
990,000
100,772
(850)
(2,426)
1,068,962
1,088,346
1,314
-
1,070,276
1,088,346
1
In the prior financial year, the Group disposed of interest rate derivatives hedging the USD Senior Notes. As a result, the hedge relationship was
discontinued and the USD Senior notes ceased to be adjusted for changes in fair value. The fair value adjustment is amortised to interest expense in
the income statement, on an effective interest basis, over the remaining term of the USD Senior Notes.
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 $350.0 million as at 30 June 2021 (2020: nil).
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 change 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.
(e) The consolidated entity maintains revolving syndicated facilities. The first facility is a multi-currency facility of $450.0 million
maturing on 17 April 2023. The second facility is a USD only facility of $500.0 million maturing 30 June 2024.
The consolidated entity also maintains bilateral debt facilities. The first is a multi-currency facility of $100.0 million maturing on
12 March 2022. The second is a multi-currency facility of $50.0 million maturing on 5 July 2023.
The revolving syndicated facilities were drawn to an equivalent of $423.7 million at 30 June 2021. The bilateral facilities were
undrawn at 30 June 2021. 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 2021.
(f) A bridge facility was executed on 31 March 2021 for the CTS acquisition. This facility is a USD only facility of $375.0 million
maturing on 23 March 2022. The facility was undrawn at 30 June 2021.
97 | COMPUTERSHARE | ANNUAL REPORT | 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 15. RECEIVABLES
Current
Trade receivables
Unbilled receivables
Interest receivable
Less: allowance for expected credit losses
Other non-trade amounts
Non-current
Other
2021
$000
2020
$000
202,907
165,363
17,330
206,952
173,201
18,707
(15,273)
(16,316)
370,327
382,544
49,563
43,921
419,890
426,465
194
194
2,184
2,184
Trade and unbilled receivables
Trade receivables and unbilled receivables are recognised initially at fair value and subsequently measured at amortised cost using
the effective interest method, net of allowances for expected credit losses. Trade receivables generally have settlement terms of
30 days and are therefore classified as current. The right to receive consideration is unconditional.
Impairment
The Group applies the simplified approach to measure Expected Credit losses (ECLs), which uses a lifetime expected loss allowance
for all trade and unbilled receivables. To measure the expected credit losses, trade and unbilled receivables have been grouped
based on shared credit risk characteristics and days past due. The Group has established a provision matrix that is based on the
payment profile of customers and the corresponding historical credit loss experience, adjusted for current and forward-looking
factors specific to the debtors and the economic environment.
The Group has considered the ongoing impact of Covid-19 and its potential to affect customers’ repayment ability when measuring
ECLs. This included identifying any customers in financial difficulty as a result of the pandemic, reviewing large customers in
industries significantly impacted, reviewing ageing and collection issues throughout the financial year and considering the
macroeconomic factors specific to each region.
Trade and unbilled receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no
reasonable expectation of recovery include, amongst other things, a finalisation of formal liquidation or other proceedings. A loss
allowance has not been recognised in respect of other non-trade amounts, due to the nature of the receivables and counterparties
as well as historical experience.
An analysis of trade and unbilled receivables and the associated allowance for expected credit losses is as follows:
Current
Less than 30 days overdue
Between 30 and 60 days overdue
Between 60 and 90 days overdue
Between 90 and 120 days overdue
More than 120 days overdue
Total
Trade and unbilled
receivables
Loss
allowance
Net
receivables
2021
$000
2020
$000
2021
$000
2020
$000
2021
$000
2020
$000
270,520
301,755
(4,410)
(4,078)
266,110
297,677
51,522
45,402
15,676
12,874
17,514
10,675
6,279
6,670
(411)
(606)
(641)
(998)
(616)
(499)
(612)
51,111
44,786
15,070
12,375
16,873
10,063
(1,045)
5,281
5,625
24,089
21,484
(8,207)
(9,466)
15,882
12,018
385,600
398,860
(15,273)
(16,316)
370,327
382,544
Movement in the allowance for expected credit losses is as follows:
Loss allowance
Opening balance at 1 July
(Increase)/decrease in loss allowance recognised in profit or loss during the year
Receivables written off during the year as uncollectible
Acquisition of entities and businesses
Currency translation differences
Closing balance at 30 June
2021
$000
2020
$000
(16,316)
(10,877)
(1,681)
(6,496)
3,445
(286)
(435)
2,174
(1,177)
60
(15,273)
(16,316)
An impairment loss of $7.5 million was recognised in the statement of comprehensive income (2020: $nil) relating to other
receivables.
98
16. LOAN SERVICING ADVANCES
Current
Loan servicing advances
2021
$000
2020
$000
335,697
267,016
Loan servicing advances are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method.
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.
Impairment
The Group applies the AASB 9 general approach to measuring expected credit losses on loan servicing advances. The loss
allowance is based on assumptions about risk of default and expected loss rates. The Group uses judgement in making these
assumptions and selecting the inputs to the impairment calculation, based on the historical losses, existing market conditions,
expectations of future advances and recoverability of outstanding advances from liquidation of the underlying property.
In response to the ongoing Covid-19 pandemic, the Group reviewed expected credit losses related to advances. Computershare has
considered current and forward-looking information in its assessment, including housing market information and current property
valuations, and the protection mechanisms in place to ensure recoverability of advances. Although there has been an extension to
the foreclosure moratorium and forbearance programs, collectibility of advances continues to be well protected.
Movement in the allowance for expected credit losses for is as follows:
Loss allowance
Opening balance at 1 July
Increase in loss allowance recognised in profit or loss during the year
Amounts written off as uncollectible
Closing balance at 30 June
17. OTHER FINANCIAL ASSETS
Current
Client deposits1
Broker deposits2
2021
$000
2020
$000
2,252
806
2,588
1,238
(740)
(1,574)
2,318
2,252
67,732
8,455
76,187
51,642
8,301
59,943
1 A subsidiary located in Switzerland is a registered broker-dealer and custodian of clients’ assets. Client monies it manages as part of providing plan
managers services meet criteria for on-balance sheet recognition as other financial assets, together with a corresponding liability (note 22).
2 A subsidiary located in Canada is a licensed deposit taker. This subsidiary 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.
Client and broker deposits are recognised initially at fair value and subsequently measured at amortised cost.
18. INVENTORIES
Raw materials and stores, at cost
5,452
5,113
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.
99 | COMPUTERSHARE | ANNUAL REPORT | 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 19. OTHER ASSETS
Current
Set-up fees
Other
Non-current
Set-up fees
2021
$000
1,919
3,114
5,033
2,222
2,222
2020
$000
825
2,601
3,426
1,088
1,088
Set-up fees
Where upfront client fees have been deferred and the related implementation costs can be measured reliably, they are
capitalised and amortised straight-line over the same period. In the year ended 30 June 2021, amortisation of $5.0 million
(2020: $10.4 million) was recognised in the statement of comprehensive income relating to capitalised set-up fees.
20. PROPERTY, PLANT AND EQUIPMENT
Land
$000
Buildings
$000
Plant and
Equipment
$000
Fixtures
and
Fittings
$000
Leasehold
improve-
ments
$000
Total
$000
At 1 July 2020
Opening net book amount
Additions
Disposals
Depreciation charge
8,162
24,777
56,025
13,239
(58)
3,556
17,574
110,094
75
-
3,487
16,801
(44)
(102)
-
-
(1,314)
(24,307)
(2,491)
(3,773)
(31,885)
-
-
-
Currency translation differences
1,026
3,069
2,336
Transfers and other
Closing net book amount
Cost
Accumulated depreciation
At 30 June 2021
At 1 July 2019
Opening net book amount
Change in accounting policy
Restated balance at the beginning of the
financial year
Acquisition of entities and businesses
Additions
Disposals
Depreciation charge
Currency translation differences
Transfers and other
Closing net book amount
Cost
Accumulated depreciation
At 30 June 2020
-
9,188
9,188
-
26,532
40,071
-
47,235
262,814
349
5,080
6,569
36,720
983
7,763
(5,080)
13,147
46,837
-
102,671
395,630
-
(13,539)
(215,579)
(30,151)
(33,690)
(292,959)
9,188
26,532
47,235
6,569
13,147
102,671
8,415
27,882
77,710
4,980
17,625
136,612
-
(350)
(6,063)
-
-
(6,413)
8,415
27,532
71,647
4,980
17,625
130,199
-
-
-
-
-
143
-
-
18,983
(95)
16
385
(7)
113
4,532
129
24,043
(32)
(134)
(1,398)
(25,659)
(1,825)
(5,369)
(34,251)
(253)
-
8,162
8,162
(771)
(729)
24,777
35,651
(935)
(7,916)
56,025
258,494
7
-
3,556
29,311
(24)
729
17,574
46,974
(1,976)
(7,916)
110,094
378,592
-
(10,874)
(202,469)
(25,755)
(29,400)
(268,498)
8,162
24,777
56,025
3,556
17,574
110,094
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.
100
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)
Leasehold improvements are depreciated over the shorter of the useful life of the improvements or the term of the lease.
21. LEASES
The Group leases various properties, computer equipment, motor vehicles and other items of plant and equipment. Leases vary in
contract term, with renewal at the option of the Group. The Group’s leases mainly relate to property.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use
by the Group.
Amounts recognised in the statement of financial position:
Right-of-use assets
Buildings
Plant and Equipment
Motor Vehicles
Total
Lease Liabilities
Current
Non-current
2021
$000
2020
$000
185,865
166,482
19,746
12,739
990
811
206,601
180,032
50,605
193,488
244,093
43,159
158,910
202,069
Additions to the right-of-use assets during the year were $81.1 million (2020: $19.7 million), $19.7 million was as a result of
modifications existing leases held by the Group.
Right-of-use assets are measured at cost comprising the following:
>
the amount of the initial measurement of lease liability
> any lease payments made at or before the commencement date less any lease incentives received
> any initial direct costs, and
>
restoration costs.
The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
Lease liabilities include the net present value of the following lease payments:
> fixed payments, less any lease incentives receivable;
> variable lease payments that depend on an index or rate;
> any amounts expected to be payable under residual value guarantees;
>
the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and
> payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
Lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s
incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an
asset of similar value in a similar economic environment with similar terms and conditions.
Lease liabilities are subsequently measured at amortised cost using the effective interest rate method. When there is a change in
lease term or a change in future lease payments, lease liabilities are remeasured, with a corresponding adjustment to lease assets.
101 | COMPUTERSHARE | ANNUAL REPORT | 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Amounts recognised in the Profit or Loss related to lease activities
Profit before tax includes the following amounts related to leases:
Depreciation of leased buildings
Depreciation of leased plant and equipment
Depreciation of leased motor vehicles
Total depreciation of right-of-use assets
Interest expense on lease liabilities
Expenses related to short term and low value leases
2021
$000
38,567
4,245
334
2020
$000
40,628
2,331
262
43,146
43,221
8,343
1,360
7,366
2,852
Short-term and low-value leases
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in
profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets largely comprise IT equipment
and small items of office furniture.
Commitments for leases not yet commenced
At 30 June 2021, the Group had no committed leases which had not yet commenced.
At 30 June 2020, the Group had committed to leases which had not yet commenced. Accordingly cash flows of $64.5 million
(undiscounted) were not included in the lease liability because the leased asset was not available for use. These have been
recognised as additions during the current reporting period.
Extension and termination options
Extension and termination options are included in a number of leases across the Group. In determining the lease term,
management considers all the facts and circumstances that create an economic incentive to exercise an extension option, or not
to exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the
lease is reasonably certain to be extended (or not terminated).
The total potential future lease payments (undiscounted) that have not been included in the lease liability, because it is not
reasonably certain that the leases will be extended (or not terminated), is summarised as follows:
Undiscounted potential future lease payments
As at 30 June 2021
As at 30 June 2020
22. PAYABLES
Current
Trade payables – unsecured
Expense accruals
Contract liabilities1
Interest payable
GST/VAT payable
Broker client deposits (note 17)
Employee entitlements
Unredeemed childcare vouchers
Other payables
Non-current
Other payables
5 years
or less
$000
Greater than
5 years
$000
682
17,635
13,527
57,255
Total
$000
14,209
74,890
2021
$000
2020
$000
19,889
14,682
149,639
151,609
35,963
12,713
19,423
76,187
33,748
76,172
68,026
38,182
19,329
30,229
59,943
28,969
85,159
66,635
491,760
494,737
3,061
3,061
1,052
1,052
102
Trade and other payables
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.
Contract liabilities1
A contract liability arises when Computershare has received consideration for performance obligations that have not yet been
satisfied, including deferred revenue and upfront fees. Revenue is recognised over the life of the relevant contract term as
performance obligations are satisfied.
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
Unredeemed voucher provision
Acquisitions related
Tax related
Legal
Prepayment protection
Lease related
Other
Non-current
Employee entitlements
Acquisitions related
Prepayment protection
2021
$000
2020
$000
13,265
15,267
8,053
2,200
6,426
3,490
4,909
5,035
19,408
11,442
7,951
6,635
11,501
4,890
1,266
7,770
58,645
70,863
14,729
9,800
-
12,778
9,800
2,610
24,529
25,188
Restructuring
Restructuring provisions are recognised when a detailed plan for restructuring has been developed and a valid expectation has
been raised with the affected employees that the terminations will be carried out.
Unredeemed vouchers
The unredeemed voucher provision is recognised for the expected usage of unredeemed childcare vouchers over two years old.
Tax related
Tax related provisions relate to potential tax liabilities associated with prior years’ business activities.
Legal
Legal provisions represent cash outflows expected to cover legal claims made against the Group. The status of all claims is
monitored on a regular basis.
Prepayment protection
As part of certain MSR related transactions, the Group has provided prepayment protection to the counterparties. The Group has
recognised a provision for the amount estimated to compensate for shortfalls in cash flows, where prepayments of the unpaid
principal balance exceed a certain percentage.
Lease related
Lease related provisions represent onerous contracts and costs to restore leased premises to their original condition at the end of
the respective lease terms.
Acquisitions related
Acquisition related provisions relate to significant provisions acquired as part of business combinations and are first recognised at
the date of acquisition.
103 | COMPUTERSHARE | ANNUAL REPORT | 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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.
Movements in each class of current provision during the financial year are set out below.
Unre-
deemed
voucher
provision
$000
Restruc-
turing
$000
Carrying amount at start of year
19,408
11,442
Additions
Payments
Reversals
Transfers
19,710
9,031
(2,208)
-
-
-
Foreign exchange movements
1,020
1,452
Acquisit
-ions
related
$000
7,951
1,250
Tax
related
$000
Pre-
payment
protection
$000
Legal
$000
6,635
11,501
4,890
-
875
17,433
Lease
related
$000
1,266
3,629
Other
$000
7,770
2,264
Total
$000
70,863
54,192
(24,665)
(6,658)
(200)
(7)
(5,950) (21,443)
(94)
(879) (59,896)
(1,204)
(4,428)
-
256
-
-
-
-
-
2,610
-
-
-
108
(4,647) (12,487)
-
527
2,610
3,363
Carrying amount at end of year
13,265
15,267
8,053
2,200
6,426
3,490
4,909
5,035
58,645
Movements in each class of non-current provision during the financial year, other than employee entitlements, are set out below.
Carrying amount at start of year
Transfers
Carrying amount at end of year
24. DEFERRED CONSIDERATION
Current
Deferred settlements on acquisition of entities
Non-current
Deferred settlements on acquisition of entities
Acquisitions
related
$000
Prepayment
protection
$000
Total
$000
9,800
2,610
12,410
-
(2,610)
(2,610)
9,800
-
9,800
2021
$000
2020
$000
9,452
8,045
1,264
9,536
Non-current deferred settlements on acquisition of entities are payable in between one and two years.
104
25. MORTGAGE SERVICING RELATED LIABILITIES
Current
Mortgage servicing related liabilities
Non-current
Mortgage servicing related liabilities
2021
$000
2020
$000
34,459
43,766
131,135
210,388
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 9).
26. INTERESTS IN EQUITY
Interest in the equity of the consolidated entity:
Contributed equity – ordinary shares
Reserves
Retained earnings
Total interests in equity
27. CONTRIBUTED EQUITY
Members of the
parent entity
Non-controlling
interests
2021
$000
2020
$000
2021
$000
2020
$000
519,299
-
989
989
(7,052)
(172,496)
(2,063)
(2,622)
1,765,412
1,761,188
2,277,659
1,588,692
3,012
1,938
3,260
1,627
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.
Movement in contributed equity
Balance at 1 July 2020
Rights issue
Dividend reinvestment plan issues
Transfer to share buy-back reserve
Less: transaction costs arising on share issues
Deferred tax credit recognised directly in equity
Balance at 30 June 2021
Number of
shares
540,879,593
$000
-
61,625,813
620,190
1,223,930
12,411
-
(101,558)
603,729,336
531,043
-
-
(12,370)
626
603,729,336
519,299
Rights issue
On 24 March 2021, Computershare announced a fully underwritten pro rata accelerated renounceable entitlement offer under
which eligible shareholders were entitled to subscribe for 1 share for every 8.8 shares held, at a price of AUD$13.55 per share
(a 9.6% discount to the closing price on 23 March 2021). The proceeds from the rights issue, which completed on 29 April 2021,
will be used to partially fund the CTS acquisition (note 8b).
105 | COMPUTERSHARE | ANNUAL REPORT | 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 28. 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
Transactions with non-controlling interests
Movements during the year:
Foreign currency translation reserve
Opening balance
Translation of controlled entities
Deferred tax
Closing balance
Share buy-back reserve
Opening balance
Excess value of shares bought over the original amount of subscribed capital
Transfer to contributed equity
Closing balance
Cash flow hedge reserve
Opening balance
Revaluation
Reclassified to profit or loss
Tax benefit/ (expense)
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
Transactions with non-controlling interests
Opening balance
Closing balance
2021
$000
2
2020
$000
2
(23,261)
(88,060)
-
(101,558)
3,805
37,105
9,212
32,611
(8,199)
(8,199)
(16,504)
(16,504)
(7,052)
(172,496)
(88,060)
(71,190)
67,555
(20,550)
(2,756)
3,680
(23,261)
(88,060)
(101,558)
(79,460)
-
(22,098)
101,558
-
-
(101,558)
9,212
753
(9,467)
12,665
1,816
2,244
3,805
(642)
(3,564)
9,212
32,611
40,047
(16,271)
(25,797)
20,765
37,105
18,361
32,611
(8,199)
(8,199)
(8,199)
(8,199)
(16,504)
(16,504)
(16,504)
(16,504)
106
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.
On 29 April 2021, the Group completed a rights issue (note 27). The proceeds reduced the balance of the share buy-back reserve to
nil and the residual was recognised as contributed equity.
(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) 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.
29. RETAINED EARNINGS AND DIVIDENDS
Retained earnings
Retained earnings at the beginning of the financial year
Change in accounting policy
Ordinary dividends provided for or paid
Net profit attributable to members of Computershare Limited
Retained earnings at the end of the financial year
Dividends
Ordinary
2021
$000
2020
$000
1,761,188
1,706,427
-
(10,493)
(184,750)
(167,403)
188,974
232,657
1,765,412
1,761,188
Final dividend paid during the financial year in respect of the previous year, AUD 23 cents per share franked to
30% (2020 – AUD 23 cents per share franked to 30%)
Interim dividend paid in respect of the current financial year, AUD 23 cents per share franked to 100%
(2020 – AUD 23 cents per share franked to 30%)
92,378
83,864
92,372
83,539
A final dividend in respect of the year ended 30 June 2021 was declared by the directors of the Company on 10 August 2021, to
be paid on 13 September 2021. This is an ordinary dividend of AUD 23 cents per share, franked to 60%. As the dividend was not
declared until 10 August 2021, a provision was not recognised as at 30 June 2021.
Dividend franking account
Franking credits available for subsequent financial years based on a tax rate of 30%
31,234
58,495
The above amounts are calculated from the balance of the franking account as at the end of the reporting period, adjusted for
franking credits and debits that will arise from the settlement of liabilities or receivables for income tax after the end of the year.
107 | COMPUTERSHARE | ANNUAL REPORT | 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 30. 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 and Computershare International
Information Consultancy Services (Beijing) Company Ltd 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 2021 include the following controlled entities:
Place of incorporation
Percentage of shares held
June 2021
%
June 2020
%
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
Computershare Investor Services (Bermuda) Limited
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
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.
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
(2)
(1)(2)
(1)(2)
(1)
(1)
(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)
(1)
(1)
(1)
(1)
(1)(4)
(1)
(1)
(1)(4)
(1)
(1)
(1)
(1)
(1)
(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
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
108
Name of controlled entity
RicePoint Administration Inc.
SyncBASE Inc.
Place of incorporation
Canada
Canada
Computershare Investor Services (Cayman) Limited
Cayman Islands
Computershare International Information Consultancy Services
(Beijing) Company Limited
Computershare A/S
Georgeson Shareholder SAS
Computershare Communication Services GmbH
Computershare Deutschland GmbH & Co. KG
Computershare Governance Services GmbH
Computershare Verwaltungs GmbH
Equatex Deutschland GmbH
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
Computershare Investor Services Limited
Hong Kong Registrars Limited
Computershare Finance Ireland Limited
Computershare Governance Services Limited
Computershare Investor Services (Ireland) Limited
Computershare Services Nominees (Ireland) Limited
Computershare Nominees (Ireland) Limited
Computershare Trustees (Ireland) Limited
HML Mortgage Services Ireland Limited
Specialist Mortgage Services Ireland Limited
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 Treasury Services Limited
Computershare Trustees (C.I.) Limited
Computershare Trustees (Jersey) Limited
EES Nominees International Limited
Computershare Netherlands B.V.
Computershare Investor Services Limited
Computershare Nominees NZ Limited
ConnectNow New Zealand Limited
CRS Nominees Limited
Equatex Employee Services AS
Equatex Norway AS
Equatex Poland Sp. Z.o.o.
CIS Company Secretaries (Pty) Ltd
109 | COMPUTERSHARE | ANNUAL REPORT | 2021
China
Denmark
France
Germany
Germany
Germany
Germany
Germany
Guernsey
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Ireland
Ireland
Ireland
Ireland
Ireland
Ireland
Ireland
Ireland
Italy
Italy
Italy
Italy
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Jersey
Netherlands
New Zealand
New Zealand
New Zealand
New Zealand
Norway
Norway
Poland
South Africa
(1)
(1)
(1)
(1)
(1)
(1)(5)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(4)
(1)
(1)
(1)
(1)
(1)
(1)(4)
(1)
(1)
(1)(5)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
Percentage of shares held
June 2021
%
June 2020
%
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
74
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
74
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Name of controlled entity
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
Computershare Schweiz AG
Computershare Technology Services AG
Equatex AG
Equatex Group Holding AG
Equatex IP AG in Liquidation
Baseline Capital Limited
Computershare Company Nominees Limited
Computershare Global Technology Services Limited
Computershare Governance Services (UK) Limited
Computershare Investments (UK) (No.2) Limited
Computershare Investments (UK) (No.3) 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 IP (UK) Limited
Computershare Limited
Computershare Mortgage Services 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
DPS Trustees Limited
EES Capital Trustees Limited
EES Corporate Trustees Limited
EES Trustees Limited
Equatex UK Ltd
Equatex UK Nominee Ltd
Homeloan Management Limited
KB Analytics Limited
Mortgage Systems Limited
Rosolite Mortgages Limited
Siberite Mortgages Limited
Topaz Finance Limited
Administar Services Group LLC
Capital Markets Cooperative, LLC
Capital Markets Holdings, Inc.
Place of incorporation
Percentage of shares held
June 2021
%
June 2020
%
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
Spain
Sweden
Switzerland
Switzerland
Switzerland
Switzerland
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 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)(4)
(1)
(1)
(1)
(1)(4)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)(4)
(1)(4)
(1)
(1)
(1)
(1)
(1)
(1)
74
74
74
74
74
74
74
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
74
74
74
74
74
74
74
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
110
Name of controlled entity
CMC Funding, Inc.
Computershare Asset Management LLC
Computershare Communication Services Inc.
Computershare Governance Services Inc.
Computershare Holdings Inc.
Computershare Inc.
Computershare Mortgage Services Inc.
Computershare Property Solutions LLC
Computershare Technology Services, Inc.
Computershare Title Services LLC
Computershare Trust Company, N.A.
Computershare US Inc.
Computershare US Investments LLC
Computershare US Services Inc.
Computershare Valuation Services LLC
Credit Risk Holdings, LLC
Credit Risk Solutions LLC
Data Point Analysis Group, LLC
Equatex US Inc.
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
LenderLive Financial Services, LLC
LenderLive Network, 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 SAF Depositor LLC
SLS SAF Issuing Trust
SLS Servicer Advance Revolving Trust 1
Specialized Loan Servicing Holdings LLC
Specialized Loan Servicing LLC
Verbatim LLC
Corporate Creations Alabama LLC
Corporate Creations Alaska Inc.
Corporate Creations Arizona LLC
Corporate Creations Arkansas LLC
Corporate Creations California Inc.
Corporate Creations Colorado LLC
Corporate Creations Connecticut LLC
111 | COMPUTERSHARE | ANNUAL REPORT | 2021
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
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
United States of America
(1)(4)(5)
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
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)
(1)
(1)(3)
(1)(4)
(1)(4)
(1)(4)
(1)(4)
(1)(4)
(1)(4)
(1)(4)
Percentage of shares held
June 2021
%
June 2020
%
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 STATEMENTS Name of controlled entity
Corporate Creations Delaware LLC
Corporate Creations District of Columbia LLC
Corporate Creations Florida LLC
Corporate Creations Georgia LLC
Corporate Creations Hawaii LLC
Corporate Creations Idaho LLC
Corporate Creations Illinois LLC
Corporate Creations Indiana LLC
Corporate Creations Intellectual Property LLC
Corporate Creations Iowa LLC
Corporate Creations Kansas LLC
Corporate Creations Kentucky LLC
Corporate Creations Louisiana LLC
Corporate Creations Maine LLC
Corporate Creations Management LLC
Corporate Creations Maryland LLC
Corporate Creations Massachusetts Inc.
Corporate Creations Michigan LLC
Corporate Creations Minnesota LLC
Corporate Creations Mississippi LLC
Corporate Creations Missouri Inc.
Corporate Creations Montana Inc.
Corporate Creations Nebraska LLC
Corporate Creations Network Inc. [Arkansas]
Corporate Creations Network Inc. [California]
Corporate Creations Network Inc. [Florida]
Corporate Creations Network Inc. [Hawaii]
Corporate Creations Network Inc. [Kansas]
Corporate Creations Network Inc. [Maryland]
Corporate Creations Network Inc. [Oklahoma]
Corporate Creations Nevada LLC
Corporate Creations New Hampshire LLC
Corporate Creations New Jersey LLC
Corporate Creations New Mexico Inc.
Corporate Creations New York LLC
Corporate Creations North Carolina LLC
Corporate Creations North Dakota LLC
Corporate Creations Ohio LLC
Corporate Creations Oklahoma LLC
Corporate Creations Oregon LLC
Corporate Creations Pennsylvania LLC
Corporate Creations Puerto Rico Inc.
Corporate Creations Rhode Island LLC
Corporate Creations South Carolina LLC
Corporate Creations South Dakota LLC
Corporate Creations Tennessee LLC
Corporate Creations Texas LLC
Corporate Creations Utah LLC
Corporate Creations Vermont LLC
Corporate Creations Virginia LLC
Place of incorporation
United States of America
United States of America
(1)(4)
(1)(4)
United States of America
(1)
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)(4)
(1)(4)
(1)(4)
(1)(4)
(1)(4)
(1)(4)
(1)(4)
(1)(4)
United States of America
(1)
United States of America
(1)(4)
United States of America
(1)
United States of America
United States of America
United States of America
United States of America
(1)(4)
(1)(4)
(1)(4)
(1)(4)
United States of America
(1)
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
Puerto Rico
United States of America
United States of America
United States of America
(1)(4)
(1)(4)
(1)(4)
(1)
(1)
(1)
(1)
(1)
(1)
(1)(4)
(1)(4)
(1)(4)
(1)(4)
(1)
(1)
(1)(4)
(1)(4)
(1)(4)
(1)(4)
(1)(4)
(1)(4)
(1)
(1)(4)
(1)(4)
(1)(4)
United States of America
(1)
United States of America
United States of America
United States of America
United States of America
(1)(4)
(1)(4)
(1)(4)
(1)(4)
Percentage of shares held
June 2021
%
June 2020
%
-
-
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
112
Name of controlled entity
Corporate Creations Washington LLC
Corporate Creations West Virginia LLC
Corporate Creations Wisconsin LLC
Corporate Creations Wyoming LLC
Management Group Limited
United Agent Group Inc.
United Agent Group Inc.
United Agent Group Inc. [Alabama]
United Agent Group Inc. [Alaska]
United Agent Group Inc. [Arizona]
United Agent Group Inc. [Arkansas]
United Agent Group Inc. [California]
United Agent Group Inc. [Colorado]
United Agent Group Inc. [Connecticut]
United Agent Group Inc. [Delaware]
United Agent Group Inc. [Florida]
United Agent Group Inc. [Georgia]
United Agent Group Inc. [Hawaii]
United Agent Group Inc. [Idaho]
United Agent Group Inc. [Illinois]
United Agent Group Inc. [Indiana]
United Agent Group Inc. [Iowa]
United Agent Group Inc. [Kansas]
United Agent Group Inc. [Kentucky]
United Agent Group Inc. [Louisiana]
United Agent Group Inc. [Maine]
United Agent Group Inc. [Maryland]
United Agent Group Inc. [Massachusetts]
United Agent Group Inc. [Michigan]
United Agent Group Inc. [Minnesota]
United Agent Group Inc. [Mississippi]
United Agent Group Inc. [Missouri]
United Agent Group Inc. [Montana]
United Agent Group Inc. [Nebraska]
United Agent Group Inc. [Nevada]
United Agent Group Inc. [New Hampshire]
United Agent Group Inc. [New Jersey]
United Agent Group Inc. [New Mexico]
United Agent Group Inc. [New York]
United Agent Group Inc. [North Carolina]
United Agent Group Inc. [North Dakota]
United Agent Group Inc. [Ohio]
United Agent Group Inc. [Oklahoma]
United Agent Group Inc. [Oregon]
United Agent Group Inc. [Pennsylvania]
United Agent Group Inc. [Rhode Island]
United Agent Group Inc. [South Carolina]
United Agent Group Inc. [South Dakota]
United Agent Group Inc. [Tennessee]
United Agent Group Inc. [Texas]
113 | COMPUTERSHARE | ANNUAL REPORT | 2021
Place of incorporation
United States of America
United States of America
United States of America
United States of America
British Virgin Islands
Puerto Rico
US Virgin Islands
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
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)(4)
(1)(4)
(1)(4)
(1)(4)
(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)
Percentage of shares held
June 2021
%
June 2020
%
-
-
-
-
-
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 STATEMENTS Name of controlled entity
United Agent Group Inc. [Utah]
United Agent Group Inc. [Vermont]
United Agent Group Inc. [Virginia]
United Agent Group Inc. [Washington]
United Agent Group Inc. [Washington D.C.]
United Agent Group Inc. [West Virginia]
United Agent Group Inc. [Wisconsin]
United Agent Group Inc. [Wyoming]
United Agent Group Management LLC
United Agent Group Services Inc. [Arkansas]
United Agent Group Services Inc. [California]
United Agent Group Services Inc. [Delaware]
United Agent Group Services Inc. [Hawaii]
United Agent Group Services Inc. [Kansas]
United Agent Group Services Inc. [Maryland]
United Agent Group Services Inc. [Oklahoma]
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
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)(4)
(1)(4)
(1)(4)
(1)(4)
(1)(4)
(1)(4)
(1)(4)
Percentage of shares held
June 2021
%
June 2020
%
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
Worldwide Nominee LLC
United States of America
(1)
100
1 Controlled entities which form part of the Group are audited by PricewaterhouseCoopers member firms for the purposes of the Group audit and/or local
statutory audits.
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 This company became a controlled entity during the year ended 30 June 2021.
4 These companies ceased to be controlled entities during the year ended 30 June 2021.
5 Local statutory audits performed by firms other than PricewaterhouseCoopers member firms.
114
31. 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 2021:
Place of
incorporation
Principal activity
Ownership interest
Consolidated
carrying amount
Name
Associates
Expandi Ltd
United Kingdom Investor Services
Milestone Group Pty Ltd1
Australia
Technology Services
CVEX Group, Inc2
United States
Investor Services
The Reach Agency Holdings Pty Ltd
Australia
Investor Services
Mergit s.r.l.
Italy
Technology Services
Total investments in associates
Joint ventures
Computershare Pan Africa Holdings Ltd
Mauritius
Investor Services
Asset Checker Ltd
United Kingdom Investor Services
Total investment in associates and joint ventures
1 At 30 June 2021, Milestone Group Pty Ltd was classified as an asset held for sale.
June
2021
%
25
20
-
46.5
30
60
50
June
2020
%
25
20
22.2
46.5
30
60
50
June
2021
$000
7,414
-
-
June
2020
$000
6,145
3,148
-
1,683
1,377
-
-
9,097
10,670
-
-
-
-
9,097
10,670
2 On 30 April 2021, Computershare’s ownership interest in CVEX Group, Inc decreased to 16%. Consequently, from this date CVEX Group, Inc. is no longer
considered an associate of the consolidated entity.
The movements in the carrying amount of equity accounted investments in associates and joint ventures are as follows:
Associates
Joint Ventures
2021
$000
2020
$000
2021
$000
2020
$000
Carrying amount at the beginning of the financial year
10,670
11,087
Share of net result (after income tax)
Dividends received
Transfer to consolidated entity
Transfer to held for sale1
Share of movement in reserves
Carrying amount at the end of the financial year
Milestone Group Pty Ltd (Milestone)1
389
(295)
-
(2,888)
1,221
9,097
241
(354)
-
-
(304)
10,670
-
-
-
-
-
-
-
39
(2)
-
(36)
-
(1)
-
On 7 July 2021, Computershare agreed to sell its 20% interest in Milestone. Completion is subject to regulatory approval
and is expected to occur in the half year ending 31 December 2021. Consequently, Milestone is classified as held for sale as at
30 June 2021. Computershare’s share of proceeds from the disposal will be $19.1 million based on the agreed sale price. This
amount excludes contingent consideration receivable within three years from disposal should certain revenue growth conditions
be met.
115 | COMPUTERSHARE | ANNUAL REPORT | 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 32. 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 30. 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 2021.
Computershare Limited Closed Group – statement of financial position
Current assets
Cash and cash equivalents
Receivables
Inventories
Other current assets
Assets Classified as held for sale
Derivative financial instruments
Total current assets
Non-current assets
Receivables
Other financial assets
Property, plant and equipment
Right-of-use assets
Deferred tax assets
Intangibles
Derivative financial instruments
Other
Total non-current assets
Total assets
Current liabilities
Payables
Borrowings
Lease liabilities
Current tax liabilities
Provisions
Derivative financial instruments
Total current liabilities
Non-current liabilities
Payables
Borrowings
Lease liabilities
Deferred tax liabilities
Provisions
Derivative financial instruments
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity – ordinary shares
Reserves
Retained earnings
Total equity
2021
$000
2020
$000
94,236
71,514
1,258
4,796
2,888
14
44,147
117,809
725
3,352
-
973
174,706
167,006
360
-
2,242,763
1,642,377
8,141
39,392
67,005
7,156
25,210
65,172
126,878
117,394
319
1,033
579
665
2,485,891
1,858,553
2,660,597
2,025,559
72,314
-
7,360
6,520
27
218
63,814
99,919
7,138
51,192
25
3,456
86,439
225,544
119,402
-
36,404
12,941
11,679
1,314
181,740
268,179
110,705
199,486
19,679
8,660
10,204
-
348,734
574,278
2,392,418
1,451,281
519,299
-
(54,158)
(305,025)
1,927,277
1,756,306
2,392,418
1,451,281
116
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
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
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
Change in accounting standards
Profit for the year
Dividends provided for or paid
Retained earnings at the end of the financial year
33. 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
Retained earnings
Total equity
Profit/(loss) attributable to members of the parent entity
Total comprehensive income attributable to members of the parent entity
117 | COMPUTERSHARE | ANNUAL REPORT | 2021
2021
$000
2020
$000
190,334
419,012
609,346
28,032
174,860
297,378
472,238
41,980
161,422
140,445
40,289
34,647
9,697
43,389
30,292
17,044
246,055
231,170
(241)
(9)
391,082
283,039
35,361
46,458
355,721
236,581
(7,651)
12,023
149,966
(29,043)
2,244
144,559
500,280
(3,564)
(20,584)
215,997
1,756,306
1,688,024
-
(896)
355,721
236,581
(184,750)
(167,403)
1,927,277
1,756,306
2021
$000
2020
$000
68,083
26,860
1,286,633
1,160,235
1,354,716
1,187,095
86,212
264,057
350,269
217,057
522,228
739,285
519,299
-
-
2
84,782
25,357
(101,558)
2
35,689
20,608
(2,327)
(2,327)
377,334
1,004,447
66,689
115,782
495,396
447,810
131,193
118,761
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (b) Guarantees
The parent entity’s financial guarantees have been outlined in note 34.
(c) Contingent liabilities
The parent entity did not have any contingent liabilities as at 30 June 2021 or 30 June 2020 other than the Australian thin
capitalisation contingent liability outlined in note 6 and the matters outlined in note 34.
(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.
34. CONTINGENT LIABILITIES
(a) Guarantees and Indemnities
Computershare Limited, ACN 081 035 752 Pty Ltd, Computershare Investments (UK) (No. 3) Ltd, Computershare Finance Company
Pty Ltd, Computershare US Inc. and Computershare Investor Services Inc are parties to a Guarantor Deed Poll dated 11 April 2018 in
respect to the following Facility Agreements:
> $500.0 million four-year USD Syndicated Facility Agreement executed on 30 June 2020;
> $450.0 million five-year multi-currency Syndicated Facility Agreement executed on 11 April 2018;
> $375.0 million USD Syndicated Acquisition Bridge Facility executed on 31 March 2021;
> $100.0 million one-year multi-currency Bilateral Facility Agreement executed on 12 March 2020; and a
> $50.0 million five-year multi-currency Bilateral Facility Agreement executed on 28 June 2018 (refer to note 14 for further detail).
Guarantees and indemnities of $990.0 million (2020: $990.0 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 Inc.,
Computershare Investments (UK) (No. 3) Ltd and Computershare Investor Services Inc under a Note and Guarantee Agreement
dated 9 February 2012 and 20 November 2018.
Bank guarantees of AUD 2.7 million (2020: AUD 2.6 million) have been given in respect of facilities provided to Australian
subsidiaries.
Bank guarantees of ZAR 6.8 million (2020: ZAR 6.8 million) have been given in respect of facilities provided to South African
subsidiaries.
A performance guarantee of ZAR 32.0 million (2020: ZAR 32.0 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 and regulatory 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. Based
on current knowledge of the Group, an appropriate liability is recognised on the consolidated balance sheet if future cash outflows
are considered probable with regard to a legal claim. 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 (2020: ZAR 455.0 million).
118
Potential withholding and other tax liabilities arising from distribution of all retained distributable earnings of all foreign
incorporated controlled entities are $32.4 million (2020: $31.7 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.
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.
35. 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% (increasing to 10% from 1 July 2021), voluntary employee
contributions)
> Category 3 – SG (Superannuation Guarantee) 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 1% and 10% of employees’ gross salaries depending upon years of service
> United States entities – voluntary employee contributions with matching employer contribution up to 4% of employees’ eligible
compensation
> Canadian entities – between 2% and 7% of employees’ base salaries dependent upon years of service
> South African entities – 12% 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
Defined Benefit Funds
Computershare Communication Services GmbH maintained a defined benefit scheme which provides benefits to 2 employees
(2020: 4). An actuarial assessment of the scheme was completed as at 30 June 2021 and defined benefit plan liability recognised in
accordance with the actuarial valuation. The net liability is not material to the Group.
(b) Lease Liabilities
The Group leases various properties, computer equipment, motor vehicles and other items of plant and equipment. The Group has
recognised right-of-use assets and lease liabilities (note 21) for these leases except for short-term and low-value assets.
(c) Other
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 of 30 June 2021, the Group was servicing approximately $41.8 billion (2020: $24.5 billion) of mortgages owned by the US
government sponsored mortgage agencies. While the Group, as the owner of the related MSRs, may have the obligation to acquire
any mortgages from the serviced pool that do not meet the agencies’ lending criteria, the consolidated entity is in possession of
indemnities and warranties that require originating banks to purchase such mortgages from the Group and cover any transfer
costs. Only in the event of bankruptcy or dissolution of the originating bank, would Computershare retain the defective mortgage
together with the underlying collateral. In these limited circumstances, the Group would have the option to either hold the
mortgage or seek another buyer in the open market. The impact at 30 June 2021 of any retained mortgages is immaterial to the
consolidated entity.
119 | COMPUTERSHARE | ANNUAL REPORT | 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 36. 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
2021
$000
-
1,400
1,400
2020
$000
1,100
2,424
3,524
37. 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 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.
38. RELATED PARTY DISCLOSURES
Key management personnel disclosures are included in note 39. 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
The directors participated in the rights issue during the financial year to the value of AUD 14,314,139.
Ordinary dividends received during the year in respect of those ordinary shares
Shares in the parent entity
2021
2020
32,391,451
31,321,258
1,030,811
(1,195,797)
2021
$
2020
$
10,698,826
9,978,110
(a) Wholly owned Group – intercompany transactions and outstanding balances
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 33)
> Dividends were paid between entities
> Bank guarantees were provided by the parent entity to its controlled entities (note 34)
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 30. Interests held in associates and joint ventures are disclosed in note 31.
120
(c) Transactions with associates and joint ventures
The following transactions were entered into 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/from related parties
Loans receivable from Milestone Group Pty Ltd
These transactions were undertaken on commercial terms and conditions.
39. KEY MANAGEMENT PERSONNEL DISCLOSURES
Key management personnel compensation
Short-term employee benefits
Other long-term benefits
Post-employment benefits
Share-based payments
Other
Total
2021
$
2020
$
286,569
250,991
3,936,520
2,495,705
12,617
635,459
375,674
40,797
-
-
6,033,699
5,064,991
31,422
44,699
107,569
109,422
2,144,149
1,923,270
166,554
1,723,681
8,483,393
8,866,063
For detailed remuneration disclosures please refer to sections 1 to 6 of the remuneration report within the Directors’ Report.
40. 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 an 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 six 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 one year. Matching shares funded by the Group must be kept in
the plan for a minimum of two 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 US.
Subject to the discretion of the Board, shares in the parent entity may also be allocated to selected employees 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.
121 | COMPUTERSHARE | ANNUAL REPORT | 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 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
2021
2020
11,188,579
9,781,063
2,990,432
3,941,588
253,430
183,334
(254,947)
(94,101)
(1,954,457) (2,623,305)
12,223,037
11,188,579
31,564
39,532
* 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 $13.10.
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) Long-Term Incentive Plan
Performance rights and share appreciation rights
The Company offers a long-term incentive plan (LTIP) to eligible key management personnel and senior group executives.
Since 2014, the LTIP plan has comprised awards of performance rights subject to performance hurdles. These rights are granted
for no consideration and carry no dividend or voting rights. Each performance right carries an entitlement for the participant
to one fully paid ordinary share in Computershare Limited subject to satisfaction of the applicable performance hurdles and
continued employment over a three year performance period. Under the LTIP, 50% of each award of performance rights is subject
to an EPS hurdle and 50% is subject to a TSR performance hurdle.
In 2020, Company shareholders approved a transitional LTIP for FY2021. The FY2021 LTIP award comprised 50% a grant of
performance rights subject to a TSR performance hurdle and the other 50% a grant of Share Appreciation Rights (SARs).
A share-settled SAR entitles the participant to a payment (in Company shares) at the end of the performance period equivalent
to the amount by which the underlying Company share price has increased since the right was granted. If SARs vest, shares
are allocated to the participant to the requisite value with nothing payable by the participant. The vesting value per SAR under
the FY2021 LTIP will be calculated as the positive difference between AUD 13.25, being the Company share price at close on
30 June 2020 and the Company share price at the end of the performance period, being the 90-day VWAP up to and including
30 June 2023.
Set out below are summaries of performance rights and SARs granted under the LTIP:
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
Performance rights
Grant date
5 Dec 2017
4 Dec 2018
2 Dec 2019
7 Dec 2020
Total
Sep 2020
Sep 2021
Sep 2022
Sep 2023
$0.00
$0.00
$0.00
$0.00
476,339
520,104
735,321
-
1,731,764
-
-
-
430,086
430,086
Share appreciation rights
7 Dec 2020
Sep 2023
$0.00
Total
-
-
1,522,193
1,522,193
-
-
-
-
-
-
-
(476,339)
-
(1,386)
518,718
(9,393)
725,928
(12,674)
417,412
(499,792)
1,662,058
(44,859)
1,477,334
(44,859)
1,477,334
-
-
-
-
-
-
-
122
The fair value of performance rights and share appreciation rights granted under the 2021 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)
2021 Plan TSR
2021 Plan SAR
7 December 2020
7 December 2020
1 July 2020
30 June 2023
1 July 2020
30 June 2023
AUD 14.39
AUD 8.29
AUD 0.00
31.25%
3 years
3.197%
0.110%
AUD 14.39
AUD 2.65
AUD 0.00
31.25%
3 years
3.197%
0.110%
i) To calculate fair value, a Monte Carlo simulation was used to estimate the likelihood of achieving the relative TSR hurdles and share appreciation hurdle.
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 zero coupon Australian government bonds at grant date.
(c) Employee benefits recognised
Performance rights expense
Share plan and options expense
Aggregate employee entitlement liability (note 22 and 23)
41. REMUNERATION OF AUDITORS
2021
$000
1,822
20,572
48,477
2020
$000
1,039
19,604
41,747
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
2021
$000
2020
$000
989
3,328
4,317
461
2,146
2,607
463
463
1,021
2,757
3,778
321
2,013
2,334
329
329
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
547
543
123 | COMPUTERSHARE | ANNUAL REPORT | 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS REPORTS
DIRECTORS’ DECLARATION
In the directors’ opinion:
(a) the financial statements and notes set out on pages 65 to 123 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 2021 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
30 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 32.
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
20 September 2021
SJ Irving
Director
124
DECLARATION TO THE BOARD OF DIRECTORS
The Chief Executive Officer and Chief Financial Officer state that:
(a) the financial records of the consolidated entity for the financial year ended 30 June 2021 have been properly maintained in
accordance with section 286 of the Corporations Act 2001; and
(b) the financial statements, and the notes to the financial statements, of the consolidated entity, for the financial year ended
30 June 2021:
(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 2021 and of their performance for the
financial year ended on that date.
SJ Irving
Chief Executive Officer
20 September 2021
NSR Oldfield
Chief Financial Officer
125 | COMPUTERSHARE | ANNUAL REPORT | 2021
INDEPENDENT AUDITOR’S REPORT
Independent auditor’s report
To the members 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 2021 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:
●
●
●
●
●
●
the consolidated statement of financial position as at 30 June 2021
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 significant accounting policies
and other explanatory information
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 & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
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
PricewaterhouseCoopers, ABN 52 780 433 757
Liability limited by a scheme approved under Professional Standards Legislation.
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.
126
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
● For the purpose of our audit we used overall Group materiality of $12.9 million, which represents
approximately 5% of the Group’s profit before tax, excluding the gain on disposal of an equity investment.
● 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.
● We chose adjusted Group profit before tax because, in our view, it is the benchmark against which the
performance of the Group is most commonly measured. We adjusted for the gain on disposal of an equity
investment as it was an infrequent item impacting profit and loss.
● We utilised a 5% threshold based on our professional judgement, noting it is within the range of commonly
acceptable thresholds.
Audit Scope
● 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 six geographical
locations – Australia, United States of America, United Kingdom, Canada, Hong Kong and Switzerland.
The Group engagement team determined the nature, timing and extent of work that needed to be
performed by it and by auditors operating under its instruction (component auditors). We structured our
audit approach as follows:
− We audited certain entities in Australia, United States of America, United Kingdom, Hong Kong and
Canada due to their financial significance to the Group.
127 | COMPUTERSHARE | ANNUAL REPORT | 2021
INDEPENDENT AUDITOR’S REPORT
− We performed specified risk focused procedures on certain account balances for other entities in
Australia, United States of America, United Kingdom, Canada and Switzerland.
− We carried out further procedures at the Group level, including procedures over consolidation and
preparation of the financial statements.
● 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 holding meetings with component audit teams
in Australia, United States of America, United Kingdom, Canada, Hong Kong and Switzerland.
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
Impairment assessment of goodwill
(Refer to note 10 of the financial statements)
The Group had a goodwill balance of USD 1.9 billion
at 30 June 2021, representing approximately 36% (30
June 2020: 37%) of the total assets of the Group.
The Group is required to perform an impairment
assessment of its goodwill balance at least annually
under Australian Accounting Standards.
The Group performed an impairment assessment over
the goodwill balance by calculating the value in use
for each operating segment, which is comprised of
groups of cash generating units (CGUs), or CGUs
separately identified for impairment testing, using
discounted cash flow models (the models).
We considered the impairment assessment of
goodwill to be a key audit matter as the goodwill
balance is significant to the consolidated statement of
financial position and significant judgement is
required by the Group in estimating future cash flows,
particularly with respect to determining appropriate:
● Discount rates.
● Five year cash flow projections (in a limited
number of cases, the CGU cash flow
projections are for a period longer than five
years to account for the nature of the cash
flows and specific circumstances).
How our audit addressed the key audit
matter
We evaluated 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 the internal organisational
structure.
We evaluated whether the methods applied in
calculating and allocating carrying value and value in
use to the identified CGUs were in line with the
requirements of Australian Accounting Standards.
In relation to the models, we performed the following
procedures, amongst others:
● Tested the mathematical accuracy of the
models’ calculations, on a sample basis.
● Compared cash flow forecasts to Board
approved business plans.
● Compared previous cash flow forecasts to
actual results to assess the historical
accuracy of forecasting.
● Together with PwC valuation experts,
assessed the appropriateness of discount
rates contained in the models, for a sample
of CGUs, by comparing these to relevant
external data.
● Tested whether cash flow forecasts and
terminal growth rates used in the models are
consistent with our knowledge of current
business conditions, externally derived data
128
Key audit matter
● Earnings growth rates applied beyond the
short-term cash flow forecasts (terminal
growth rates).
How our audit addressed the key audit
matter
(where possible) and our understanding of
the business.
● For each operating segment, assessed the
Group’s sensitivity analysis which included
the Group’s assessment of reasonably
possible changes to key assumptions.
We also considered the reasonableness of the Group’s
financial report disclosures in relation to this matter
in light of the requirements of Australian Accounting
Standards.
Useful life assessment of Mortgage Servicing
Rights (MSRs)
(Refer to note 9 in the financial statements)
We performed the following procedures, amongst
others, over the Group’s assessment of the useful life
of MSRs:
● Assessed significant assumptions as at 30
June 2021 and any changes to significant
assumptions since the Group’s most recent
assessment (as at 1 July 2020) by reference
to externally derived data (where possible).
● Together with PwC valuation experts, tested
the Group’s third party MSR valuer’s
estimate for expected remaining useful life.
● Compared the Group’s estimate of useful life
for the interest-sensitive and non-interest
sensitive loans to that of the Group’s third
party MSR valuer.
● Considered the competence and capabilities
of the Group’s third party MSR valuer.
We also considered the reasonableness of the Group’s
financial report disclosures in relation to this matter
in light of the requirements of Australian Accounting
Standards.
The Group held MSRs after amortisation of USD 678
million at 30 June 2021 (30 June 2020: USD 713
million), representing approximately 12.9% (30 June
2020: 14.3%) of the total assets of the Group.
MSRs are intangible assets acquired that provide the
legal right to service a particular mortgage for a fee
for the duration of its life. The owner of the MSR can
either service the loan itself or appoint a sub-servicer
to do so.
Amortisation for MSRs is calculated using the
straight-line method over their estimated useful lives
of eight years for the interest-sensitive part of the
portfolio and nine years for the non-interest sensitive
part of the portfolio.
The estimated useful life of MSRs reflects the Group’s
estimate of the average life of the underlying
mortgages. The most significant factors impacting the
useful life are US mortgage interest rates and the rate
of the borrowers’ prepayments. The average life of
MSRs decreases where US interest rates are lower or
borrower prepayments are higher than previously
estimated, which would result in an increase in
amortisation expense.
We considered the useful life of MSRs to be a key
audit matter as significant judgement is required by
the Group in determining the period over which these
rights will generate economic benefits.
129 | COMPUTERSHARE | ANNUAL REPORT | 2021
INDEPENDENT AUDITOR’S REPORT
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 30 June 2021, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, 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:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of
our auditor's report.
130
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 44 to 62 of the directors’ report for the
year ended 30 June 2021.
In our opinion, the remuneration report of Computershare Limited for the year ended 30 June 2021
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
Marcus Laithwaite
Partner
Melbourne
20 September 2021
131 | COMPUTERSHARE | ANNUAL REPORT | 2021
INDEPENDENT AUDITOR’S REPORT
FURTHER INFORMATION
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
AustralianSuper Pty Ltd
Christopher John Morris
State Street Corporation
Number of
ordinary shares
Fully paid
percentage
64,830,281
32,091,083
30,253,648
11.99%
5.32%
5.01%
Class of shares and voting rights
At 10 September 2021 there were 37,140 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 10 September 2021
Size of holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total shareholders
Ordinary
shareholders
19,544
13,992
2,101
1,387
116
37,140
There were 678 shareholders holding less than a marketable parcel of 31 ordinary shares as at 10 September 2021.
Twenty Largest Shareholders of ordinary shares as at 10 September 2021
Ordinary shares
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Pty Limited
Citicorp Nominees Pty Limited
Christopher John Morris
National Nominees Limited
Welas Pty Ltd
Penelope Maclagan
BNP Paribas Nominees Pty Ltd
Continue reading text version or see original annual report in PDF format above