THINKING
FORWARD
Annual Report 2013
Annual Report 2013
1
CTM Annual Report 2013 KNOWLEDGE
INNOVATION
INSIGHT
CONTENTS
Chairman’s Report
Managing Director’s Report
The CTM Customer Journey
Arup Customer Case Study
Service Like No Other
Wesfarmers Customer Case Study
CTM Smart Technology
CITIC Pacific Customer Case Study
Leadership Team/Directors
Financials
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4
8
12
14
16
18
20
22
24
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CTM Annual Report 2013CTM Annual Report 2013 C H A I R M A N ’ S
R E P O R T
p r o d u c t s .
I a m p l e a s e d t o p r e s e n t t h e 2 0 1 3 A n n u a l R e p o r t o f
C o r p o r a t e Tr a v e l M a n a g e m e n t L i m i t e d ( “ C T M ” ) .
T h e C o m p a n y h a s h a d a n o t h e r s t r o n g y e a r, d e l i v e r i n g
e x c e l l e n t g r o w t h i n p r o fi t a b i l i t y a n d r e t u r n o n e q u i t y t o
s h a r e h o l d e r s , d e s p i t e t h e c h a l l e n g i n g e c o n o m i c c o n d i t i o n s .
T h i s r e s u l t h a s b e e n u n d e r p i n n e d b y e n h a n c e d s e r v i c e s t o
o u r c l i e n t s , i n c l u d i n g t h e d e v e l o p m e n t o f f u r t h e r i n n o v a t i v e
D u r i n g t h e y e a r, t h e C o m p a n y s t a r t e d a n e x c i t i n g n e w
e r a w i t h i t s e n t r y i n t o t h e N o r t h A m e r i c a n m a r k e t . Tw o
a c q u i s i t i o n s w e r e m a d e d u r i n g t h e y e a r, b e i n g R & A Tr a v e l
o n 2 J u l y 2 0 1 2 a n d Tr a v e l c o r p L L C o n 1 M a y 2 0 1 3 . T h e s e
a c q u i s i t i o n s p r o v i d e t h e C o m p a n y w i t h a n i m p o r t a n t
p l a t f o r m t o a d v a n c e f u r t h e r g r o w t h , c r e a t i n g t h e a b i l i t y t o
c r o s s s e l l t o C T M ’s A u s t r a l i a n c l i e n t b a s e .
T h e p a s t y e a r a l s o s a w t h e C o m p a n y a c h i e v e c o n t i n u e d
s t r o n g o r g a n i c g r o w t h i n a c h a l l e n g i n g g l o b a l e c o n o m i c
c l i m a t e , w h i c h , t o g e t h e r w i t h t h e N o r t h A m e r i c a n
a c q u i s i t i o n s , e n a b l e d C T M t o a c h i e v e a r e c o r d t u r n o v e r.
I m p o r t a n t l y t h e C o m p a n y a l s o f o c u s e d o n p r o d u c t i v i t y
i n i t i a t i v e s a n d d e l i v e r i n g i n n o v a t i v e p r o d u c t s t o t h e m a r k e t ,
i n c l u d i n g C T M ’ s m o b i l e a p p l i c a t i o n s a n d a c c e s s t o t h e
Wo t i f i n v e n t o r y. T h i s c o n t i n u e d i n v e s t m e n t i n p r o d u c t i v i t y
a n d i n n o v a t i o n s e c u r e s a n o p e r a t i n g p l a t f o r m t h a t C T M i s
c o n fi d e n t w i l l s u p p o r t f u t u r e g r o w t h i n t h e b u s i n e s s .
Aw a r d s .
I n J u l y 2 0 1 3 , t h e C o m p a n y w a s a w a r d e d t h e B e s t N a t i o n a l
Tr a v e l M a n a g e m e n t C o m p a n y f o r t h e e i g h t h t i m e i n t e n
y e a r s a t t h e A u s t r a l i a F e d e r a t i o n o f Tr a v e l A g e n t s a w a r d s .
I n a d d i t i o n , f o r t h e s e c o n d y e a r r u n n i n g C T M ’ s M e e t i n g ,
I n c e n t i v e s a n d E v e n t s b u s i n e s s u n i t , E T M , w o n t h e B e s t
E v e n t s C o m p a n y a t t h e s a m e N a t i o n a l Tr a v e l I n d u s t r y
I w o u l d l i k e t o t a k e t h i s o p p o r t u n i t y t o t h a n k t h e
m a n a g e m e n t t e a m a n d s t a f f f o r t h e i r e f f o r t s a n d
c o n g r a t u l a t e t h e m o n t h e c o n t i n u e d s u c c e s s o f C T M a s
a l e a d i n g - e d g e a n d p r o fi t a b l e c o r p o r a t e t r a v e l s o l u t i o n s
I w o u l d l i k e t o t h a n k C T M ’s s h a r e h o l d e r s , t h e i r B o a r d , a n d
m o s t i m p o r t a n t l y, C T M ’s c l i e n t s f o r t h e i r c o n t i n u i n g s u p p o r t .
T h e B o a r d h a s d e c l a r e d a d i v i d e n d o f 6 . 5 c e n t s p e r s h a r e ,
w h i c h w i l l b e p a i d o n 11 O c t o b e r 2 0 1 3 t o a l l s h a r e h o l d e r s
r e g i s t e r e d o n 11 S e p t e m b e r 2 0 1 3 .
c o m p a n y.
To n y B e l l a s
C o r p o r a t e Tr a v e l M a n a g e m e n t L i m i t e d
C h a i r m a n
2 8 A u g u s t 2 0 1 3
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CTM Annual Report 2013CTM Annual Report 2013 M A N A G I N G D I R E C T O R ’ S
R E P O R T
Dea r Sha reho lde rs ,
In t roduc t ion
CTM has aga in de l ive red an exce l len t resu l t
in tough econom ic cond i t ions , bo th in Aus t ra l ia
and the b roade r g loba l economy, and is a lso
we l l p laced to benefi t f rom fu tu re up tu rns in
the gene ra l econom ic env i ronmen t .
Ou ts tand ing pe r fo rmance
In the yea r to 30 June 2013 , CTM ’s TTV ( to ta l
t ransac t ion va lue ) o f $883 .8m (unaud i ted ) was
29 .7 pe rcen t h ighe r than the p rev ious yea r and
t rave l income o f $78 .4m was 21 .2 pe rcen t h ighe r
than the p rev ious yea r.
CTM ’s s ta tu to ry ne t p rofi t a f te r tax ( “NPAT ” ) o f
$12 .4m fo r the yea r to 30 June 2013 compa res
w i th $11 .8m in the p rev ious yea r, rep resen t ing
a 5 .1 pe rcen t inc rease .
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CTM Annual Report 2013CTM Annual Report 2013 Positioning for the future
CTM’s continued investment in innovative client facing technology,
as well as the two strategic acquisitions, has the Company well
positioned to continue to grow. Future growth is also underpinned
by continued leading performance and client retention during the year.
The entry into the North American market is an exciting new phase for
the Group. CTM is well placed to drive improved returns from the North
American businesses through the implementation of its key business
processes and supporting platform.
CTM’s focus remains upon listening to its clients and staff, to ensure its
service offering is both innovative and cost effective, and enabling staff
to offer the personalised service and expertise demanded by clients.
I look forward to working with staff, clients, key suppliers and
the Board in pursuing the challenges and opportunities that
lie ahead and to continue to deliver outstanding results
for CTM’s clients and shareholders.
Jamie Pherous
Managing Director
Corporate Travel
Management Limited
Financial position
CTM is in a sound financial position, with total assets of
$121.1m at 30 June 2013, an increase of $37.5m or 44.8
percent from 30 June 2012.
The continued generation of strong cash flows contributed
to the Company’s sound financial position, with net cash
flows from operating activities of $16.0m over the year to
30 June 2013.
In March 2013, the Company raised a further $9.8m
through the equity market, to assist with the funding
the acquisition of the North American based agency,
Travelcorp LLC.
Both acquisitions support CTM’s proven competency in
integrating people into CTM’s culture, and empowering
people to operate more effectively for their clients through
a scalable and efficient business model and operating
platform.
The business has also continued to invest in its service
offering. During the year, new products were introduced,
including CTM Mobile, Wotif inventory and Business
Intelligence, as well as enhanced functionalities in CTM’s
core operating systems, which are integral to the continued
success of the business.
Total equity of $73.0m at 30 June 2013 compares with
$53.0m at 30 June 2012, an increase of $20.0m or 37.7
percent over the year.
Employees
A skilled and motivated workforce is integral
to CTM’s success.
CTM’s culture is founded upon the notion of listening to
CTM’s staff in order to provide a workplace that empowers
people, through good processes and excellent training, to
grow, evolve and deliver the superior service that CTM’s
clients demand. CTM continues to invest in its people,
through its in-house training programs, selective recruitment
and a commitment to provide the resourcing to support its
people in delivering service excellence to clients.
Over the past year, the total number of full time employees
increased by 30% to 616, reflecting the North American
acquisitions and CTM’s positioning to underwrite growth
with the most skilled talent.
Staff ownership of CTM equity is an important pillar in
aligning the objectives of CTM with the personal aspirations
of our people. At 30 June 2013, over 38% of all staff eligible
to participate in the CTM Employee Share Scheme were
CTM shareholders.
The Board and the senior management team appreciate the
contribution that CTM’s staff have made to the Company’s
strong performance in 2012/13. Their professionalism and
commitment have been fundamental to the development
of CTM’s reputation as a highly valued business partner
for its clients.
Business drivers
The success of CTM’s business continues to be based
on the key drivers:
■ Strong client wins across the Group. Our continued
investment in technology and business tools strengthens
CTM’s competitive advantage.
■ Continued high levels of client retention, underpinned
by 98% client satisfaction and high staff engagement.
■ Improving internal productivity and developing CTM’s
people, so that they are most effective in supporting
CTM’s clients.
In addition, CTM has complemented its existing business
platform with two strategic international acquisitions during
the past year:
■ In July 2012, CTM acquired North American based
agency, R&A Travel Inc, based in Denver Colorado,
opening an important new market to CTM and providing a
unique opportunity to cross-sell between the two markets.
■ In May 2013, CTM made its second acquisition in
North America, acquiring Travelcorp LLC, with operations
in Texas and Louisiana, giving CTM greater scale in
the North American market, enhancing buying power,
and leveraging CTM’s support services and client
facing solutions.
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CTM Annual Report 2013CTM Annual Report 2013 THE CTM
CUSTOMER
JOURNEY
At CTM each customer journey
is unique. Our platforms, programs
and services underpin our five core
elements which make up the flexible
customer journey.
The journey will always extract
the maximum value and give a
great return on investment.
a
and
and
and
C T M’s
S upplier
ongoing
dedicated
R elations
analysis
an
offer
through
tools
capabilities
negotiations
supplier
C T M B usiness
interactive analysis of your travel progra m’s
highly visual representation of travel data
Intelligence:
w hich identifies future savings opportunities,
reporting
online
and
influences booking behaviour.
perform ance
C T M’s
m aximises
departm ent proactively conducts negotiat-
ions with the industry’s m ost respected
travel suppliers, provides industry bench-
N eg otiatio ns:
S u p plier
renegotiation to ensure that our clients are
benefiting fro m continuous im prove m ents in
value to their travel progra m.
Strategic A cco unt
C T M’s expert account m anage m ent tea m
dyna mically
opportunities,
C T M’s R OI principle is unique and po w erful
m anage m ent
- for every dollar a client allocates to their
progra m s, deliver bespoke travel technology
solutions and provide unparalleled levels of
to
a percentage of this spend back in cost
Plannin g:
R eturn o n
clients
Invest m ent:
saving
travel
our
cost
with
in
service and personalisation.
on
gaps
m anage m ent
partners
capitalise
identify
savings.
in-house
develop m ent
clients’
C T M S m art
technology needs by delivering uniquely
tailored travel tools w hich drive profitability,
Techn olo gy:
our
efficiencies and client satisfaction.
an
is
Technology
and
responds
research
w hich
S m art
technology
C T M
offering
m arking
returns
spend,
travel
C T M
to
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CTM Annual Report 2013CTM Annual Report 2013 “
Cardno moved to CTM after
11 years with our previous
TMC. The result was significant
improvements in reporting,
savings and technology
usage with respect to travel.
Cardno
”
8 TIMES
AFTA WINNER!
Our flexible customer journey allows us to
cater for each individual client giving us
award winning results.
This year we won our 8th AFTA award and
are the first and only travel management
company to be inducted into the
AFTA Hall of Fame in 2010 for
continued excellence.
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CTM Annual Report 2013CTM Annual Report 2013 R E D U C I N G C O S T S
CTM was challenged with the task to deliver
measurable travel cost savings to Arup through
strategic preferred supplier agreements,
the introduction of an online real-time booking
system, improved booking processes and
detailed expense reporting.
Challenges:
One of the key challenges was a heavy reliance on offline consultant-
based travel booking processes spread across 80 travel arrangers nationally.
Also in place was a preferred airline agreement which did not maximise
available discounts.
Solutions:
that resulted in:
In partnership with Arup, CTM conducted an analysis of Arup’s existing
travel practices, including processes, travel trends and supplier relationships
The introduction of a user-friendly online booking tool to drive bookings
online, thus increasing booking efficiencies, policy compliance and
reporting capabilities.
And the renegotiation of existing airline supplier agreements for
improved discounts and benefits.
Results:
As a result of these changes Arup saved $180k in the first year of
implementation through moving to an online booking tool.
Savings of around $40k per year were also made through the
renegotiation of a preferred airline supplier agreement.
Shelley St by Arup
$ 1 8 0 k s a v e d i n t h e fi r s t y e a r o f
im p l em e n t a t i o n t h ro u g h m o v i n g
t o a n o n l i n e b o o k i n g t o o l
“
C T M , a n d i n p a r t i c u l a r o u r d e d i c a t e d a c c o u n t
m a n a g e r S u s a n , h a s d e l i v e r e d r e a l v a l u e t o A r u p ;
e n s u r i n g t h a t w e g e t t h e b e s t n e g o t i a t e d p r i c e s
t h r o u g h o u r p r e f e r r e d s u p p l i e r s ; c o n t i n u a l l y
r e a s s e s s i n g o u r s u p p l i e r r e l a t i o n s h i p s w h e n n e w o r
a d d i t i o n a l p a r t n e r s h i p b e n e fi t s a r i s e ; a s s i s t i n g u s i n
s t r e a m l i n i n g o u r t r a v e l b o o k i n g p r o c e s s e s – a l l o f
w h i c h h a v e r e s u l t e d i n r e a l s a v i n g s f o r o u r b u s i n e s s .
”
A n d r e a C r a n s t o u n , E x e c u t i v e A s s i s t a n t t o t h e C O O , A r u p
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CTM Annual Report 2013CTM Annual Report 2013 SERVICE LIKE
NO OTHER
At CTM, more than 616 staff members strive
to deliver their clients a service like no other.
From personalised customer service to the
support of the worldwide GlobalStar network;
CTM’s continuous efforts for clients have
been well rewarded with 2012’s client survey
returning a 98% client satisfaction rating.
And it’s not just its clients who have given CTM the tick of approval. In 2013, CTM
received three awards in the Australian Federation of Travel Agents’ National Travel
Industry Awards (AFTA NTIA), taking out the Best National Travel Management
Company Award while its events division was crowned the Best Business
Events Travel Agency and Brisbane operations manager Shelley Leven
was awarded as the Best Travel Agency Manager (Corporate).
CTM has now not only triumphantly claimed the prestigious
Best National Travel Management Company Award for
eight of the past ten years, but remains the only travel
management company to be inducted into the AFTA
Hall of Fame (2010) for continued excellence.
CTM believes its continued success in the eyes of both clients
and industry peers lies across a number of key pillars:
Excellence in customer service
Thanks to a dedicated account management approach which
rejects the ‘call-centre’ model and allows staff to provide
unparalleled levels of service and personalisation to clients.
Expertly trained and award-winning staff
Who have been carefully selected to ensure CTM’s operational
model adds value at every level. No less than five CTM
consultants were nominated for AFTA awards during 2013.
Local in-house After Hours Support
Providing round-the-clock assistance when clients need it the
most. Please note our “Local in house After Hours Support” is
only out of Aust/NZ.
A commitment to ROI
To ensure a percentage of each travel management dollar spent
is returned to the client in the form of cost savings, CTM has
engineered a ROI method which is both unique and powerful.
Superior technology
From marketing-leading online booking tools to the
implementation of CTM SMART Technology, CTM is committed
to staying on the cutting edge of travel management technology.
CTM’s Business Intelligence offering was a finalist for the 2013
AFTA Best Travel Agent Technology Innovation Award.
Enhanced supplier negotiations
A dedicated Supplier Relations department proactively conducts
ongoing negotiations with the industry’s most respected travel
suppliers, ensuring clients benefit from continuous improvements
in value to their travel program, contrary to other TMCs who rely
solely on globally-negotiated consortia rates.
Industry expertise and specialists
With more than 19 years in the field, CTM knows the corporate
travel industry and its niche travel markets inside out and has
developed specialist service offerings for the MICE, mining and
leisure sectors in response to client needs.
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CTM Annual Report 2013CTM Annual Report 2013 S E A M L E S S T R A N S I T I O N
Wesfarmers challenged CTM to establish a dedicated service model for each
division and deliver a smooth and efficient transition from the incumbent travel
management company (TMC) to CTM within three months.
Challenges:
The size and diversity of the Wesfarmers group of
businesses posed a number of logistical and operational
challenges which would need to be overcome in order to
achieve a smooth and effective transition to CTM.
These included:
■ The terms of transition (including timeframe) being
stipulated by contractual arrangements with the
incumbent TMC
■ The scale and diversity of the business being split
across 11 divisions, each operating on different systems
and with different travel policies
■ The client’s geographical spread across five states,
requiring regionalised training programs
Solution:
CTM appointed a dedicated project team with expertise
in large-scale implementation projects to manage the
process from start to finish. These expert resources
enabled a smooth and efficient transition by:
1) Establishing an implementation timeframe and setting
periodic milestones throughout the three month
transition period to maintain momentum and recognise
attainable goals
2) Holding implementation meetings with each division to
establish their unique business needs, operational goals
and objectives, and establishing a Communication Plan
for all stakeholders
3) Conducting a four week national training ‘road show’,
including face-to-face training with all 300 travel bookers
to ensure maximum knowledge and confidence in CTM
systems and processes while providing an opportunity
for staff engagement and team building
Results
1. Full implementation completed within 3 months
2. Travel policies tailored to business needs - CTM
successfully established and implemented a range of
tailored travel policies across the group’s multi-faceted
business, utilising CTM systems and best practice
procedures
3. 300 travel bookers fully trained - All travel bookers
trained within three months and confidently utilising CTM
systems and procedures
“
Moving TMCs posed a significant shift in data
and travel processes. We are very happy with our
decision to move to Corporate Travel Management
(CTM). CTM has been proactive and engaging
throughout the entire implementation. Their attention
to detail and ability to go above and beyond has
made the transition process seamless. We look
”
forward to a long and prosperous relationship.
Steve Turner, Group Procurement, Perth - Wesfarmers
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CTM Annual Report 2013CTM Annual Report 2013 Specialising in the development of a new breed
of customer-facing technologies designed
and built by CTM around customer research
initiatives, CTM SMART Technology has already
begun to take pioneering strides ahead for the
benefit of all CTM clients.
Born out of the belief that travel management
companies need to provide more customised
technology solutions which are focused not only on
core functionality but also on a client-friendly interface,
the work of CTM SMART Technology will focus on
not only the creation of new tools but also client-side
web development to offer customised and intuitive
experiences for clients.
From improvements around global risk
communications, duty of care requirements
and global travel mapping to enhanced
pre-trip approval systems and next
generation client portals, CTM
SMART Technology is set to deliver a wide array
of new intellectual property to enrich client travel
programs both locally and globally across the next
12 months.
Already - by placing a priority on timely and cost-
effective processes and technologies which drive
profitability, efficiencies and overall client satisfaction -
this new approach to technology has allowed CTM
to create a technology environment for clients which
is scalable while remaining localised and nimble.
In today’s fast paced and cost-critical development
environment, a careful mixture of elements is needed
to build and develop quality travel technology. Not
many travel management companies nor organisations
in general get this right – CTM believes that with the
introduction of CTM SMART Technology it has found
the correct formula and looks forward to releasing new
developments to clients across the coming 12 months.
CTM SMART
TECHNOLOGY
In June of 2013, CTM took its commitment to
innovation a step further with the establishment of a
dedicated in-house technology solutions architecture
named ‘CTM SMART Technology.’
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CTM Annual Report 2013CTM Annual Report 2013
E M E R G E N C Y E VA C U AT I O N
At the announcement of an escalating Yellow Alert cyclone warning off
the coast of Western Australia, CTM were administered to safely evacuate
550+ mining personnel.
Evacuation needed to be completed within
a limited timeframe along with negotiating
sufficient evacuation transportation, including
scheduled and charter flights, and emergency
accommodation for displaced personnel.
Road Blocks:
As with any natural disaster, cyclone activity occurs with
minimal warning and can escalate or change course at
a moment’s notice. The remote location of many Australian
mining sites also presents limitations to land and air
transport services, further contributing to the challenges
of an emergency evacuation.
In managing the relocation of 550+ CITIC Pacific Mining
personnel, CTM was faced the following challenges:
1. The constantly evolving nature of the situation
(uncontrollable weather patterns)
2. Airline capacity limitations on regional routes
3. Limited availability of regional transportation services
from site to airport (100km away)
4. The event took place over a public holiday weekend.
This required CTM to engage emergency resources
to facilitate the required travel arrangements
Solutions:
The core elements of CTM’s solution included:
1. Continuous weather system tracking via the Bureau
of Meteorology to ensure that all required action
was pre-empted
2. Activation of CTM’s Local Emergency Committee and
assembly of a dedicated consulting team, consisting of
two managers and two consultants, to work throughout
the public holiday
3. Utilisation of CTM’s superior supplier relationships in
diverting a scheduled Qantas flight from Paraburdoo
to Karratha, enabling the evacuation of 87 additional
personnel when all other airline capacity had been
exhausted
4. Post-event meeting and de-brief between
CTM and CITIC Pacific Mining
Results:
1. Successful evacuation of 550+ remote location
personnel
Through CTM’s successful negotiations with transportation
providers, including the rerouting of a scheduled Qantas
flight via Paraburdoo, CTM achieved the successful
evacuation of all required personnel plus emergency
accommodation within 24 hours.
“
Our company recently had the huge task of reducing the
number of personnel at our mine sites twice in four weeks
due to Cyclones Bianca and Carlos. On both occasions we
contacted CTM for assistance with minimal notice, requiring
a large number of personnel to be evacuated to Perth and
eastern States ports. CTM provided a dedicated consulting
team to manage the process, ensuring we met our tight
deadlines. CTM always goes above and beyond to meet our
travel needs and they have proven that they will go one step
further when we need emergency assistance. Our team can
always rely on them, and they always provide fantastic service.
”
Deirdre Wilcox, Travel Supervisor, CITIC Pacific.
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CTM Annual Report 2013CTM Annual Report 2013
S E N I O R L E A D E R S H I P
T E A M
Jamie Pherous
Managing Director
Jamie Pherous, Managing Director, founded Corporate Travel Management in
1994. He has built the company from its headquarters in Brisbane to become
the largest privately-owned travel management company in Australia and, in late
2010, became successfully listed on the Australian Securities Exchange (ASX).
Prior to establishing CTM, Jamie was employed by Arthur Andersen (now Ernst
& Young) as a chartered accountant specialising in business services and the
financial consulting division in Australia, Papua New Guinea, and the United Arab
Emirates.
D I R E C T O R S
Laura Ruffles
CEO Australia and
New Zealand
Steve Fleming
Chief Financial Officer
Tony Bellas
Chairman
Greg Moynihan
Independent
Non-Executive Director
Stephen Lonie
Independent
Non-Executive Director
Claire Gray
Executive Director
Global Development
Laura Ruffles, Corporate Travel
Management’s Chief Executive
Officer, has significant local, regional
and global business experience.
In a career of more than 18 years,
she has led teams across strategy,
operations, product development,
relationship management, sales,
business planning and technology.
Laura plays a key role in business
planning, innovation, client growth,
profit contribution and coaching her
management team.
Steve Fleming is responsible for
Corporate Travel Management’s
finance function, treasury
management, key stakeholder
liaison, and strategic planning in
conjunction with the Managing
Director and Board. Steve has
more than 20 years’ experience in
commercial finance roles gained
with high growth companies across
a number of industries and countries
including Abbey National, TrizecHahn,
Deutsche Morgan Grenfell and Arthur
Andersen.
Tony Bellas has more than 27
years experience in both the
government and private sectors.
Tony is currently pursuing his
own business interests and has
previously held positions of CEO
of Ergon Energy, CS Energy and
Seymour Group. Prior to this he
was Queensland’s Deputy Under
Treasurer, with oversight of a
number of Treasury operations
including Fiscal Strategy, Office of
Government Owned Corporations
and Office of State Revenue.
Greg Moynihan is a former CEO
of Metway Bank Limited and has
also held senior management and
executive positions with Citibank
Australia and Suncorp Metway.
Since leaving Suncorp Metway in
2003, Greg Moynihan has pursued
a number of business interests,
primarily in the investment
management and private equity
sectors.
Stephen Lonie is a Chartered
Accountant, with more than 40
years industry experience, and is
a former Managing Partner
of the international accounting
and consulting firm, KPMG. He
now practices as an independent
management consultant and
business adviser. Stephen is
currently Chairman of Jellinbah
Resources Pty Ltd (since 2002)
and of UQ Sport Ltd (since 2012),
and a non-executive Director
of MyState Limited (since 2011).
Claire Gray brings 25 years
experience to Corporate Travel
Management. Her career within
the travel industry began in 1984
at Harvey World Travel. In 1989,
Claire joined with Craig Smith
to form the independent travel
management company, Travelogic
- which merged with Corporate
Travel Management in 2008 to
create one of the largest business
travel agencies in Australasia.
22
23
CTM Annual Report 2013CTM Annual Report 2013 Directors’ Report
Corporate Governance Statement
Corporate Travel Management Limited Financial Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
1. Corporate information
2. Summary of significant accounting policies
3. Segment reporting
4. Revenue
5. Other Income
6. Expenses
Income tax
7.
8. Earnings per share
9. Dividends paid and proposed
10. Cash and cash equivalents
11. Trade and other receivables
12. Financial assets at fair value
13. Other current assets
14. Plant and equipment
15. Intangible assets
16. Impairment testing of goodwill
17. Trade and other payables
18. Borrowings
19. Provisions
20. Contributed equity, reserves and retained earnings
21. Financial risk management objectives and policies
22. Business combinations
23. Commitments and contingencies
24. Related party disclosures
25. Parent entity financial information
26. Auditors’ remuneration
27. Events occurring after the reporting period
28. Director and Executive disclosures
Directors’ Declaration
Independent Auditor’s Report to the members
of Corporate Travel Management Limited
Shareholder Information
Corporate Directory
26
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51
52
53
54
55
55
65
69
69
69
70
73
74
75
76
77
77
78
79
80
82
82
83
84
85
88
91
92
94
95
95
95
98
99
101
105
ANNUAL FINANCIAL REPORT
For the year ended
30 June 2013
Corporate Travel
Management Limited
ABN 17 131 207 611
Registered office:
27A/52 Charlotte Street
Brisbane Queensland 4000
24
25
CTM Annual Report 2013CTM Annual Report 2013
Directors’ Report
The Directors present their report, together with the
financial report of Corporate Travel Management
Limited and its controlled subsidiaries (the “Group”),
for the financial period ended 30 June 2013.
DIRECTORS
The Directors of the Group at any time during
or since the end of the financial year are:
■ Mr Tony Bellas.
■ Mr Stephen Lonie.
■ Mr Greg Moynihan.
■ Mr Jamie Pherous.
■ Ms Claire Gray.
All Directors have been in office since the start
of the financial period to the date of this report.
INFORMATION ON DIRECTORS
TONY BELLAS
MBA, BEcon, DipEd, FAIM, MAICD, ASA
Independent Non-Executive Director – Chairman
Tony Bellas has more than 28 years experience in
both the government and private sectors. Tony is the
Principal of Queensland Infrastructure Partners, as
well as, Chairman of ERM Power Limited, since 2009,
and Shine Corporate Limited, since 2013.
Tony Bellas has previously held positions of Chief
Executive Officer of Ergon Energy Ltd, CS Energy
Ltd, Seymour Group Pty Ltd, and was previously
Queensland’s Deputy Under Treasurer, where he
had oversight of a number of Queensland Treasury
operations, including Fiscal Strategy, Office of
Government Owned Corporations and Office
of State Revenue.
Tony Bellas was also Chair of the Independent
Review Panel appointed by the Queensland
Government to review the Queensland Government
electricity network businesses, which submitted
its report to the Queensland Government in
December 2012.
Former directorships in last 3 years:
■ Non-Executive Director of Guildford Coal Limited
(2010 to 2012).
■ Non-Executive Director of Australian Water (Qld)
Pty Ltd (2010 to 2013).
Special responsibilities:
■ Chair of the Board.
■ Chair of Nominations Committee.
■ Audit and Risk Management Committee member.
■ Remuneration Committee member.
JAMIE PHEROUS
BCom ACA
Managing Director
Jamie Pherous founded Corporate Travel
Management Ltd (CTM) in Brisbane in 1994. He has
built the Company from its headquarters in Brisbane
to become the one of the largest travel management
companies in Australia, New Zealand and North
America, now employing more than 600 staff.
Prior to establishing CTM, Jamie Pherous was
employed by Arthur Andersen, now Ernst & Young,
as a Chartered Accountant, specialising in business
services and financial consulting in Australia, Papua
New Guinea and the United Arab Emirates.
Jamie Pherous was also a major shareholder
and co-founder of an online hotel booking engine,
Quickbeds.com.au, which was sold to Flight Centre
Group in 2003.
Jamie Pherous is currently a Director of the
Australian Federation of Travel Agents.
Former directorships in last 3 years:
■ None.
Special responsibilities:
■ Managing Director.
GREG MOYNIHAN
BCom, Grad Dip SIA, CPA, FFin, MAICD
Independent Non-Executive Director
Greg Moynihan is a former Chief Executive
Officer of Metway Bank Limited. He has also held
senior management and executive positions with
Citibank Australia and Suncorp Metway over a
range of disciplines including financial and capital
management, investment management, corporate
strategy and marketing, as well as having primary
accountability for business operations covering
general insurance, business banking, retail banking
and wealth management.
Since leaving Suncorp Metway in 2003, Greg
Moynihan has pursued a number of business
interests, primarily in the investment management
and private equity sectors.
Greg Moynihan is currently a Chairman of Sunwater
Limited, since 2007, a non-executive Director of
Shine Corporate Limited, since 2013 and a Director
of several private investment companies. He has
previously held Directorships with Cashcard Australia
Ltd, LJ Hooker Ltd, RACQ Insurance Ltd, HFA Limited
and Ausenco Limited.
Former directorships in last 3 years:
■ Ausenco Limited (2008 to 2013).
Special responsibilities:
■ Chair of Remuneration Committee.
■ Nominations Committee member.
■ Audit and Risk Management Committee member.
STEPHEN LONIE
BCom, MBA, FCA, FFin, FAICD, FIMCA, MACS
Independent Non-Executive Director
Stephen Lonie is a Chartered Accountant with more
than 40 years industry experience, and is a former
Managing Partner Queensland of the international
accounting and consulting firm, KPMG. He now
practices as an independent management consultant
and business adviser.
Stephen Lonie is currently Chairman of Jellinbah
Resources Pty Ltd, since 2002, and a non-executive
Director of MyState Limited, since 2011, and Retail
Food Group Limited, since 2013.
Former directorships in last 3 years:
■ Non-Executive Director Oaks Hotels & Resorts
Limited (2011).
■ Chairman The Rock Building Society Limited
(2010 to 2011).
Special responsibilities:
■ Chair of Audit and Risk Management Committee.
■ Remuneration Committee member.
■ Nominations Committee member.
CLAIRE GRAY
DIP TTM
Executive Director
Claire Gray brings 30 years experience to CTM.
In 1989, Claire Gray joined with Craig Smith to
form the independent travel management company,
Travelogic, servicing Macquarie Bank Ltd. Travelogic
merged with CTM in 2008, to create one of the largest
business travel agencies in Australasia.
Claire Gray is the Vice Chairperson of the Asia Pacific
region in GlobalStar Alliance, which represents a
worldwide network of travel management companies
owned and managed by local entrepreneurs in
approximately 66 countries.
Claire Gray is currently undertaking an MBA
in global business management.
Former directorships in last 3 years:
■ None.
Special responsibilities:
■ Global development.
26
27
CTM Annual Report 2013CTM Annual Report 2013
COMPANY SECRETARIES
■ Mrs Lyndall McCabe.
■ Mr Steve Fleming.
LYNDALL MCCABE
Lyndall McCabe has held managerial positions with
CTM since joining the Company in 2000, including
Finance Manager and National Operations and
Human Resources Manager.
Lyndall McCabe facilitated the acquisition of Rhodes
Corporate Travel and the establishment of a start-up
operation in Sydney.
She has more than 18 years experience in the
travel industry sector, having previously been
employed by a travel consolidator. In 2005, Lyndall
McCabe became a shareholder and was appointed
as a Director of CTM, from which she subsequently
resigned 23 June 2010 as part of CTM’s transition
to a listed public corporation. Lyndall McCabe’s
current role is CTM’s Risk Manager.
Lyndall McCabe is a member of the Chartered
Secretaries of Australia. In 2013, Lyndall McCabe
commenced the Graduate Diploma in Applied
Corporate Governance through the Institute of
Chartered Secretaries Australia.
STEVE FLEMING
BBus (Accounting) ACA
Steve Fleming is CTM’s Chief Financial Officer
and is responsible for the finance function, treasury
management, key stakeholder liaison and strategic
planning, in conjunction with the Board and the
Managing Director.
Steve Fleming has more than 20 years experience
in commercial finance roles gained with high growth
companies across a number of industries and
countries, including Abbey National, TrizecHahn,
Deutsche Morgan Grenfell and Arthur Andersen.
Prior to joining CTM in 2009, Steve Fleming was
Group Finance Manager of Super Retail Group Ltd.
Steve Fleming is a member of the Institute of
Chartered Accountants in Australia.
INTERESTS IN SHARES AND OPTIONS
As at the date of this report, the relevant interests
of the Directors in the shares of the Company are set
out in the following table. No Director held any options
to acquire shares in the Company.
Director
Mr Tony Bellas
Mr Stephen Lonie
Mr Greg Moynihan
Mr Jamie Pherous
Ms Claire Gray
Ordinary shares held
at 30 June 2013
200,000
200,000
200,000
24,000,000
5,424,999
MEETINGS OF DIRECTORS
The number of meetings of the Company’s Board
of Directors and each Board Committee held during
the year ended 30 June 2013, and the number of
meetings attended by each Director were:
Committee meetings
Full meetings
of directors
Audit & Risk
Management
Remuneration
Nominations
Director
Mr Tony Bellas
Mr Stephen Lonie
Mr Greg Moynihan
Mr Jamie Pherous
Ms Claire Gray
A
13
13
13
13
12
B
13
13
13
13
13
A
4
5
5
*
*
B
5
5
5
*
*
A
3
3
3
*
*
B
3
3
3
*
*
A
2
2
2
*
*
B
2
2
2
*
*
A = Number of meetings attended.
B = Number of meetings held during the time
the Director held office or was a member
of the Committee during the year.
* Not a member of the relevant committee.
The Committee Charters provide that the following
number of meetings are expected to be held in a year,
and the number of meetings shown have held for the
year ended 30 June 2013. A full schedule of meetings
is already in place for the year ended 30 June 2014.
Number of
meetings
required
per Charter
Number of
meetings
held in
year to 30
June 2013
Full meetings of Directors
Audit & Risk Management
Remuneration
Nominations
10
4
3
2
13
5
3
2
DIVIDENDS
Final franked dividend
approved by the Board on
28 August 2013 in relation
to the 2013 financial year:
Per share
$’000
• On ordinary shares
6.5 cents
5,075*
*This dividend does not include shares issued post balance
date as part of the R&A Travel contingent consideration
payment, refer Note 22.
DIVIDENDS PAID AND PROPOSED IN THE YEAR
PRINCIPAL ACTIVITIES
The principal activities of the Group during the year
consisted of managing the purchase and delivery of
travel services for its clients. There were no significant
changes in the nature of the activities of the Group
during the year.
OPERATING AND FINANCIAL REVIEW
Review of operations
The Group continued to engage in its principal
activity, being the provision of travel services,
the results of which are disclosed in the following
statements.
During the year, the Company started on an exciting
new era with its entry into the North America market.
Two acquisitions were made during the year, being
R&A Travel on 2 July 2012 and TravelCorp LLC
on 1 May 2013.
During the year, the Company has also focused
on productivity initiatives and delivering innovative
products to the market, including CTM’s mobile
applications and access to the Wotif inventory.
This continued investment secures an operating
platform that CTM is confident will support future
growth in the business.
Operating results for the year
The net profit after tax of the Group for the financial
period, after providing for income tax, amounted to
$12,394,000 (2012: $11,798,000).
The result was underpinned by a 29.7% increase
in Total Transaction Value (TTV) to $883.8m
(unaudited). The new operations in North America
contributed $165.3m (unaudited) of TTV, whilst the
Australian operation grew to $718.5m (unaudited),
a 5.4% increase. The Australian operation’s TTV
was impacted by declining average ticket prices
and tough economic conditions.
Interim for the year
• On ordinary shares
Dividend provided but not
paid at 30 June 2012
• On ordinary shares
Per share
$’000
4 cents
2,999
6 cents
4,498
Earnings Before Interest Tax Depreciation and
Amortisation (EBITDA) (adjusted for acquisition
costs “adjusted EBITDA”) grew by 19.9% to $21.0m.
In isolation, the Australian operation increased
adjusted EBITDA by 10.3% to $19.3m. The EBITDA
margin in the business improved largely as a result
of productivity initiatives.
28
29
CTM Annual Report 2013CTM Annual Report 2013 Total Transaction Value (“TTV”) (unaudited)
TTV represents the amount at which travel products
and services have been transacted across the
Group’s operations whilst acting as agents for
airlines and other service providers, along with
other revenue streams. TTV does not represent
revenue in accordance with Australian Accounting
Standards and is not subject to audit. TTV is stated
net of GST. TTV is utilised by management as
a key travel industry metric.
2013
$’000
2012
$’000
Total Transaction Value net
of GST (TTV) (unaudited)
883,803
681,300
Client retention has been successful during the
year and the Group has had a record year of new
business sales, including some significant new
clients in North America.
A vast proportion of CTM’s cost base is employee
costs, which highlights the importance of productivity
initiatives. During the year, there has been an increase
in productivity by driving revenue per FTE, but not
at the demise of service. In fact, service levels have
risen as automation has replaced manual processes,
providing CTM’s consultants with the time to operate
more effectively and for the benefit of clients.
The two acquisitions in North America allow
the Group to move towards a new phase, creating
the opportunity to cross sell into the Australian client
base and become a viable player in the global
travel market.
Financial Position
CTM continues to maintain a strong financial position,
with net current assets of $10.6m and total equity
of $73.0m. At balance date, the Group has interest
bearing debt of $3.3m and has continued to generate
strong operating cashflows.
The Group intends to continue its growth globally, with
aspirations to be in every major region (Asia, Europe,
North America and Australia/New Zealand). The
organic growth will also be underpinned by continued
investment in new client facing technology.
The operating cashflow has largely funded the
continued growth of the business, with $3.3m debt at
balance date despite acquisition payments of $15.9m
and capital expenditure of $3.5m during the year. The
funding was also complemented with an equity capital
raising of $9.8m in March 2013.
The Company continues to pay dividends at its stated
divided policy level, with a final dividend declared at
6.5 cents per share (full year 10.5 cents).
Business strategies and prospects
In the next twelve months, the integration of the two
acquired businesses in North America will be a focus,
to ensure maximum output from the acquisitions.
In the Australian operation CTM expects to grow
through enhanced client service and experience,
enhanced by CTM’s technology development
programme.
Material business risks
The Group is subject to both specific risks to its
business activities and risks of a general nature.
The Group continues to focus on its key drivers,
being:
These risks include:
■ Retaining current clients.
■ Winning new clients.
■ Improving productivity.
In the 2013 year, the Group has executed well on
these key business drivers, notwithstanding the
tough economic conditions in the Australian market.
■ Economic conditions: Economic downturn may
have an adverse impact on the Group’s operating
performance.
■ Information technology: The Group relies heavily
on outsourced technology platforms. Whilst all
systems are licensed, any disruption to supply or
performance of systems may have a long term
impact on client and supplier satisfaction.
■ Competition: The Group operates in a
competitive market, and current competitors or
new competitors may become more effective.
■ Key personnel: The Group is reliant on talent and
experience to run its business. The Group’s ability
to retain and attract key people is important to its
continued success.
■ Employee costs: Employee costs represent a
significant component of the Group’s total cost
base. Legislative changes in relation to employee
costs may have an adverse impact on the
Group’s cash flow and profitability.
LIKELY DEVELOPMENTS AND EXPECTED
RESULTS
There were no likely developments in the operations
of the Group, from time to time, that have not been
finalised at the date of this report.
ENVIRONMENTAL REGULATION AND
PERFORMANCE
The Group has determined that no particular
or significant environmental regulations apply
to its operations.
SIGNIFICANT CHANGES IN THE STATE OF
AFFAIRS
REMUNERATION REPORT
In the opinion of the Directors, there were no
significant changes in the state of affairs of the Group
during the financial year not otherwise disclosed in
this report or the consolidated financial statements.
This remuneration report sets out remuneration
information for Corporate Travel Management
Limited’s non-executive Directors, executive
Directors and other key management personnel
of the Group and the Company.
SIGNIFICANT EVENTS AFTER BALANCE DATE
There have been no matters or circumstances,
not otherwise dealt with in this report, that will
significantly affect the operation of the Company, the
results of those operations or the state of affairs of
the Company or the Group for subsequent financial
years.
Directors and executives disclosed in this report
(i) Directors
Mr Tony Bellas
Mr Stephen Lonie
Mr Greg Moynihan
Mr Jamie Pherous
Ms Claire Gray
(ii) Other key management personnel
Mr Steve Fleming
Ms Laura Ruffles
Changes since the end of the reporting period
There have been no changes to this list since
the end of the reporting period.
Non-Executive Director.
Non-Executive Director.
Non-Executive Director.
Managing Director & Chief Executive Officer.
Executive Director.
Chief Financial Officer.
Chief Executive Officer - Australia & New Zealand.
30
31
CTM Annual Report 2013CTM Annual Report 2013 Role of the Remuneration Committee
The Remuneration Committee is a Committee of
the Board. The role of the Remuneration Committee
is to advise on remuneration and issues relevant to
remuneration policies and practices, including for
senior executives and non-executive Directors.
CTM’s Corporate Governance Statement provides
further information on the role of this Committee.
Principles used to determine the nature and
amount of remuneration
Non-executive Directors
Fees and payments to non-executive Directors
reflect the demands which are made on, and the
responsibilities of, the Directors. Non-executive
Directors’ fees and payments are reviewed annually
by the Board. The Chair’s fees are determined
independently to the fees of non-executive Directors.
The Chair is not present at any discussions relating
to determination of his own remuneration.
Non-executive Directors do not receive
performance-based remuneration.
Directors’ fees
The current base fees were last reviewed
with effect from 1 July 2012.
Non-executive Directors’ fees are determined
within an aggregate Directors’ fee pool limit,
which is periodically recommended for approval
by shareholders. The maximum approved amount
currently stands at $400,000 (2012: $350,000).
Retirement allowances for non-executive Directors
Superannuation contributions required under the
Australian superannuation guarantee legislation are
made and are deducted from the Directors’ overall
fee entitlements.
Executive Remuneration Framework
The objective of the Group’s executive reward
framework is to ensure reward for performance is
competitive and appropriate for the results delivered.
The framework aligns executive reward with
achievement of strategic objectives and the creation
of value for shareholders, and conforms with market
practice for delivery of reward.
The Board ensures that executive reward satisfies
the following key criteria for good reward governance
practices:
■ Competitiveness and reasonableness;
■ Alignment to the interests of shareholders;
■ Performance linkage / alignment of executive
compensation;
■ Transparency; and
■ Capital management.
The Group has structured an executive remuneration
framework that is considered to be market competitive
and complementary to the reward strategy of the
organisation.
The two key elements of the framework are:
■ Alignment to shareholders’ interests, which:
▪ Has economic profit as a core component
of plan design;
▪ Focuses on sustained growth in shareholder
wealth, consisting of dividends and growth in
share price, and delivering an appropriate return
on assets, as well as focusing the executive on
key non-financial drivers of value; and
▪ Attracts and retains high calibre executives.
■ Alignment to program participants’
interests,which:
▪ Rewards capability and expertise;
▪ Reflects competitive reward for contribution
to growth in shareholder wealth;
▪ Provides a clear structure for earning
rewards; and
▪ Provides recognition for individual
and team contributions.
The framework provides for a mix of fixed and
variable remuneration, and a blend of short and
long-term incentives. As executives gain seniority
with the Group, the balance of this mix shifts to
a higher proportion of ‘at risk’ rewards.
The current executive remuneration framework
currently has three components:
■ Base remuneration and benefits, including
superannuation;
■ Short-term performance incentives; and
■ Long-term incentives through participation
in the Share Appreciation Rights Plan
The combination of these components comprises an
executive’s total remuneration. The Group intends
to continue to review incentive plans during the year
ending 30 June 2014, to ensure continued alignment
with the Company’s financial and strategic objectives.
Fixed remuneration and benefits
Base remuneration and benefits are structured as
a total employment cost package, which may be
delivered as a combination of cash and prescribed
non-financial benefits at the executives’ reasonable
discretion.
Executives are offered a competitive base
remuneration package that comprises the fixed
component of remuneration and rewards. Base
remuneration for executives is reviewed annually,
to ensure the executive’s remuneration is competitive
with the market. An executive’s remuneration is
also reviewed on promotion.
There is no guaranteed base remuneration increase
included in any executives’ contracts.
Short-term incentives
If the Group achieves a pre-determined profit
target set by the Remuneration Committee, a short-
term incentive (“STI”) pool is available to executives
and other eligible participants. Cash incentives/
bonuses are payable around 30 September each
year. Using a profit target ensures variable reward
is only available when value has been created for
shareholders and when profit is consistent with
CTM’s approved business plan. The incentive
pool is leveraged for performance above the
threshold, to provide an incentive for executive
superior performance.
Executives have a target STI opportunity depending
on the accountabilities of the role and impact on
the organisation or business unit performance. The
maximum target bonus opportunity in the 2013 year
was approximately 20% (2012: 31%) of base fixed
remuneration and benefits.
Each year, the Remuneration Committee considers
the appropriate targets and key performance
indicators (“KPI”s), to link the STI plan and the level
of payout if targets are met, including setting any
maximum payout under the STI plan, and minimum
levels of performance to trigger payment of STI.
Payments made under the STI plan over the last four
years have typically risen and fallen in line with the
Group’s financial results. For the year ended 30 June
2013, the key performance indicators (KPIs) linked to
STI plans were based on the Group objectives, with
the key financial metrics being consolidated Earnings
Before Interest, Tax, Depreciation and Amortisation.
The Remuneration Committee is responsible
for assessing whether the KPIs are met. The
Remuneration Committee also has absolute discretion
to adjust short-term incentives downwards in light of
unexpected or unintended circumstances.
Executives receive benefits, including motor vehicle
benefits as part of the fixed remuneration package.
The STI target annual payment is reviewed annually.
Superannuation
Long-term incentives
Superannuation contributions are paid in accordance
with relevant Government legislation, to employee
nominated defined contribution superannuation funds.
During the year, the Company has begun the process
of introducing long term incentives via a Share
Appreciation Rights Plan.
32
33
CTM Annual Report 2013CTM Annual Report 2013 The plan is designed to focus executives on delivering
long-term shareholder returns. Under the plan,
participants are granted shares only if performance
conditions pertaining to the earnings per share growth
are met and the employee is still employed at the end
of the vesting period. Participation in the plan is at the
Board’s discretion and no individual has a contractual
right to participate in the plan.
Details of remuneration
Amounts of remuneration
Details of the remuneration of the Directors and the
key management personnel of the Group are set out
in the following tables.
Key management personnel of the group
Short-term employee benefits
Long-term benefits
Cash
salary
and fees
Short-
term
incentive*
Annual
leave**
Non-
monetary
benefits
Super-
annuation
Long
service
leave**
Share ap-
preciation
rights
Total
Name
2013
$
$
Non-executive Directors
Mr Tony Bellas
89,615
Mr Stephen Lonie
64,712
Mr Greg Moynihan
64,712
Sub-total
non-executive
Directors
219,039
Executive Directors
Mr Jamie Pherous
300,000
-
-
-
-
-
$
-
-
-
-
$
-
-
-
-
$
8,065
5,824
5,824
19,713
$
-
-
-
-
3,462
4,927
27,000
4,986
-
-
$
$
-
-
-
-
-
-
97,680
70,536
70,536
238,752
340,375
273,915
Ms Claire Gray
107,415
166,500
-
Other key management personnel of the group
Ms Laura Ruffles
275,000
90,000
(1,115)
Mr Steve Fleming
248,942
40,000
1,102
-
-
-
Key management personnel of the group
Short-term employee benefits
Long-term benefits
Cash
salary
and fees
Short-
term
incentive*
Annual
leave**
Non-
monetary
benefits
Super-
annuation
Long
service
leave**
Share ap-
preciation
rights
Total
Name
2012
$
Non-executive Directors
Mr Tony Bellas
70,000
Mr Stephen Lonie
50,000
Mr Greg Moynihan
50,000
Sub-total
non-executive
Directors
170,000
Executive Directors
$
-
-
-
-
$
-
-
-
-
$
-
-
-
-
$
6,300
4,500
4,500
15,300
$
-
-
-
-
Mr Jamie Pherous
300,000
86,605
(13,846)
9,840
34,794
5,006
Ms Claire Gray
123,884
-
-
Other key management personnel of the group
Ms Laura Ruffles
269,231
86,605
(7,786)
Ms Nova Fleming
110,051
5,479
14,962
-
-
-
-
-
32,025
1,730
10,398
650
Mr Steve Fleming
223,461
40,479
(6,185)
6,509
23,755
2,878
Total key
management
personnel
compensation
1,196,627
219,168
(12,855)
16,349
116,272
10,264
$
$
-
-
-
-
-
-
-
-
-
-
76,300
54,500
54,500
185,300
422,399
123,884
381,805
141,540
290,897
1,545,825
33,075
701
9,317
406,978
26,105
1,417
-
317,566
* Balances include prior period incentives paid
in excess of amounts previously provided.
** Balances reflect the net impact of leave
accrued and leave taken.
Directors and other key management personnel of the Group are included
in this disclosure for the period they held the applicable roles. Disclosure is
for the full year except Nova Fleming, who is included in key management
personnel until commencing extended leave from 16 February 2012.
1,150,396
296,500
3,449
4,927
105,893
7,104
9,317
1,577,586
35
Total key
management
personnel
compensation
34
CTM Annual Report 2013CTM Annual Report 2013
The relative proportions of remuneration that are fixed or linked to performance are as follows:
Fixed remuneration
At risk – STI
At risk – LTI
Name
2013 %
2012 %
2013 %
2012 %
2013 %
2012 %
Directors of Corporate Travel Management Limited
Mr Tony Bellas
Mr Stephen Lonie
Mr Greg Moynihan
Mr Jamie Pherous
100%
100%
100%
100%
100%
100%
100%
72%
-
-
-
-
Ms Claire Gray
24%
100%
76%
Other key management personnel of the group
Ms Laura Ruffles
70%
71%
Ms Nova Fleming
-
100%
Mr Steve Fleming
81%
76%
28%
-
19%
-
-
-
28%
-
29%
-
24%
-
-
-
-
-
2%
-
-
-
-
-
-
-
-
-
-
Directors and other key management personnel of the
Group are included in this disclosure for the period they held
the applicable roles. Disclosure is for the full year
except Nova Fleming, who is included in key management
personnel until commencing extended leave from 16
February 2012.
Current year STI
entitlement
Share appreciation rights
Name
Awarded
%
Forfeited
%
Year
granted
No.
granted
Value per
share
Vested
%
Vested
number
Forfeited
%
Max
value yet
to vest
Financial
years in
which
shares
may vest
Directors of Corporate Travel Management Limited
Mr Tony Bellas
Mr Stephen Lonie
Mr Greg Moynihan
Mr Jamie Pherous
*
*
*
*
*
*
*
*
Ms Claire Gray
50
50
Other key management personnel of the group
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
Ms Laura Ruffles
Mr Steve Fleming
75
62
25
38
2013
75,000
$0.57
*
*
*
* Not eligible for any share based or bonus
compensation during the financial year.
*
*
*
*
*
-
*
*
*
*
*
*
-
*
*
*
*
*
*
-
*
*
*
*
*
*
*
*
*
*
*
30/6/2016
43,050
*
*
Service agreements
Share-based compensation and bonus
Share appreciation rights
Loans to Directors and Executives
There are no fixed-term service agreements with
Directors or key management personnel. Standard
contracts are in place for key executive employees
and are reviewed annually. Employees can terminate
employment with the Group in accordance with
statutory notice periods.
For each cash bonus included in the tables on pages
34 and 35, the percentage of the available bonus that
was paid in the financial year, and the percentage that
was forfeited because the person did not meet the
service and performance criteria is disclosed. No part
of the bonus is payable in future years.
Pending required regulatory approval, LTI grants
will be made in the form of Share Appreciation Rights
(SARs). Participation in the SARs is limited to certain
executive and key management personnel. The
grants are made on an annual cycle and vest every
three years subject to achievement of a minimum
percentage EPS growth average across three years.
The disclosure in this report reflects the position
of the intended grants proceed.
Information on loans to Directors and Executives,
including amounts, interest rates and repayment
terms are set out in Note 24 to the financial
statements.
Shares under option
There are currently no unissued ordinary shares
of CTM under option.
Pending any required regulatory approval,
any grants made during 2013 will vest on a
scaled basis as follows:
■ 50% vest at 80% target achievement;
■ 75% at 90% target achievement; and
■ 100% at 100% target achievement.
36
37
CTM Annual Report 2013CTM Annual Report 2013 OFFICERS’ INDEMNITY & INSURANCE
NON-AUDIT SERVICES
An Officers’ Deed of Indemnity, Access and Insurance
is in place for Directors, key management personnel,
the Company Secretaries and some other key
executives. The liabilities covered by the insurance
include legal costs that may be incurred in defending
civil or criminal proceedings that may be brought
against the Officers in their capacity as Officers
of the Company or its controlled entities. Disclosure
of premiums paid is prohibited under the insurance
contract.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court, under section
237 of the Corporations Act 2001, for leave to bring
proceedings on behalf of the Company, or to intervene
in any proceedings to which the Company is a party,
for the purpose of taking responsibility on behalf of
the Company for all or part of those proceedings.
The Company may decide to employ the auditor on
assignments in addition to its statutory audit duties,
where the auditor’s expertise and experience with
the Company and/or the Group are important.
The Board has considered the position and, in
accordance with the advice received from the
Audit Committee, 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. The Directors are satisfied
that the provision of non-audit services by the auditor
did not compromise the auditor independence
requirements of the Corporations Act 2001 as none
of the services undermine the general principles
relating to auditor independence as set out
in APES110 Code of Ethics for Professional
Accountants.
No proceedings have been brought or intervened
in on behalf of the Company with leave of the Court
under section 237 of the Corporations Act 2001.
During the year, the following fees were paid or
payable for services provided by the auditor of
the consolidated entity, its related practices and
non-related audit firms:
Amounts received or due and receivable by:
PricewaterhouseCoopers Australia:
▪ Audits and review of the financial reports of the
entity and any other entity in the consolidated group
▪ Other services in relation to the entity and
any other entity in the consolidated group:
▪ Tax compliance
▪ Tax services – acquisitions
▪ Remuneration advice
Other PricewaterhouseCoopers network firms:
▪ Other services in relation to the entity and
any other entity in the consolidated group:
▪ Tax compliance
▪ Tax services – acquisitions
Consolidated
2013
$
2012
$
285,000
271,737
140,146
23,600
9,552
64,522
36,000
-
458,298
372,259
26,736
27,163
8,843
31,916
53,899
40,759
512,197
413,018
AUDITORS’ INDEPENDENCE DECLARATION
A copy of the auditors’ independence declaration,
as required under section 307C of the Corporations
Act 2001, is appended to this Directors’ Report.
ROUNDING OF AMOUNTS
The Company is of a kind referred to in Class
Order 98/100, 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 or in certain cases, to the
nearest dollar.
Signed in accordance with a resolution
of the Directors.
Mr Tony Bellas
Chairman
Mr Jamie Pherous
Managing Director
Brisbane, 28 August, 2013
38
39
CTM Annual Report 2013CTM Annual Report 2013 Corporate Governance Statement
Corporate Travel Management Limited (the
“Company”) and the Board are committed to achieving
and demonstrating the highest standards of corporate
governance. The Board continues to review the
framework and practices, to ensure they meet the
interests of shareholders. The Company and its
controlled entities together are referred to as the
Group in this statement.
b. Monitor the implementation and execution
of strategy;
c. Monitor performance against business
and financial targets;
d. Appoint and oversee the performance
of executive management; and
A description of the Group’s main corporate
governance practices is set out this Corporate
Governance Statement. All these practices, unless
otherwise stated, were in place for the entire year
and they comply with the Australian Stock Exchange
(ASX) Corporate Governance Principles and
Recommendations, including the 2010 Amendments.
The Board has a commitment to ongoing improvement
in the way it carries out its duties. Subsequent to 30
June 2013, the Audit and Risk Committee was split
to form two separate committees, being the Audit
Committee and the Risk Management Committee.
The Board is of the view that our governance structure
is enhanced by a committee that focuses on risk.
As part of our continuous improvement, the role
and function of the Risk Management Committee
will be evaluated not later than 12 months after its
establishment.
PRINCIPLE 1: LAY SOLID FOUNDATIONS
FOR MANAGEMENT AND OVERSIGHT
Responsibility of the Board
The Board is responsible for the corporate
governance of the Company and has adopted a
Corporate Governance Charter (“Charter”). A guiding
principle of the Charter is that the Board act honestly,
conscientiously and fairly, in accordance with the
law and in the interests of Shareholders, with a view
to building sustainable value for the shareholders,
employees and other stakeholders. Responsibility for
the operational conduct of the Company’s business
has been delegated to the Managing Director, who
reports to the Board regularly.
The Board’s broad function is to:
a. Chart strategy and set business and financial
targets for the Company;
e. Generally, to fulfil an effective leadership role
in relation to the Company and the Group.
Power and authority in certain areas is specifically
reserved to the Board, consistent with its function.
These areas include:
a. Composition of the Board, including appointment
and removal of Directors;
b. Oversight of the Company’s operation, including
its control and accountability systems;
c. Appointing and removing the Managing Director;
d. Ratifying the appointment and, where appropriate,
the removal of senior management including the
Chief Financial Officer, Chief Operating Officer
and the Company Secretary;
e. Reviewing and overseeing systems of risk
management and internal compliance and control,
codes of ethics and conduct, and legal and
regulatory compliance;
f. Monitoring senior management’s performance
and implementation of strategy;
g. Approving and monitoring financial
and other reporting;
h. The overall corporate governance of the Company
including the strategic direction, establishing goals
for management and monitoring the achievement
of these goals; and
i. The oversight of Board’s Committees
(“Committees”).
A performance assessment for the Board
was completed in the 2013 financial year.
40
41
CTM Annual Report 2013CTM Annual Report 2013 PRINCIPLE 2: STRUCTURE THE BOARD
TO ADD VALUE
The Board operates in accordance with the broad
principles set out in its charter, which is available
from the corporate governance information section
of the Company’s website at www.travelctm.com.au.
The Board Charter details the Board’s composition
and responsibilities.
Board composition
The Board Charter states that the composition of the
Board should be subject to the following principles:
a. The Board should comprise at least four Directors
with a broad range of experience, qualifications,
diversity, expertise, skills and contacts relevant to
the Group and its business;
b. Has not, within the last three years:
i. Been employed in an executive capacity
by the Company or another Group member; or
ii. Been a Director after ceasing employment in an
executive capacity for the Company or another
Group member;
c. Has not, within the last three years, been a principal
of a professional advisor to the Company or
another Group member or an employee materially
associated with the service provided, except where
the advisor might be considered to be independent
due to the fact that fees payable by the Company
to the advisor’s firm represent an insignificant
component of the advisor’s firm overall revenue;
d. Is not:
b. Half of the Board must be Non-Executive Directors,
i. a material supplier or customer of the Company
independent from management; and
or another Group member; or
c. A majority of independent Directors, including
ii. an officer of or associated, directly or indirectly,
with a material supplier or customer;
e. Has no material contractual relationship with the
Company or another Group member other than
as a Director;
f. Is free from any interest and any business or other
relationship, which could, or could reasonably be
perceived to, materially interfere with the Director’s
ability to act in the best interests of the Company;
and
g. Has not served on the Board for a period which
could, or could reasonably be perceived to,
materially interfere with the Director’s ability to
act in the best interest of the Company.’
A former Chief Executive Office will not qualify as an
Independent Director unless there has been at least
three years between ceasing such employment and
sitting on the Board.
The Board must regularly assess whether each
Director remains an Independent Director in the light
of the interests disclosed by them, and each Director
must provide the Board with all relevant information
for this purposes.
the Chairman, unless, in the circumstances of the
Company, it is reasonable for the Director not to
be an Independent Director and fully disclosed
under the ASX Principles.
Independence is determined by having regard to
whether the Director is free from any interest and
any business or other relationship which could, or
could reasonably be perceived to, materially interfere
with the Director’s ability to exercise independent
judgement.
The Board members may be deemed to not
be independent based upon the length of their
membership on the Board and their associated
interests as shareholders and associates of clients.
Directors’ independence
The Board has adopted the following definition
of an Independent Director:
‘An Independent Director is a Director who is not
a member of management i.e. a non-executive
Director and who:
a. Is not a substantial Shareholder of the Company,
or an officer of a substantial Shareholder, and is
not otherwise associated, directly or indirectly,
with a substantial Shareholder of the Company;
42
Board members
Induction
Details of the members of the Board, their experience,
expertise, qualifications, term of office, relationships
affecting their independence and their independent
status are set out in the Directors’ report under
the heading ‘Information on Directors’. At the date
of signing the Directors’ report, the Company has
two executive Directors and three non-executive
Directors. The three non-executive Directors have no
relationships adversely affecting their independence
and are deemed to be independent under the
principles set out, noting that Tony Bellas is currently
a Director of a client of the Group as detailed in Note
24 to the financial statements. Arrangements for
this client are on similar terms to other clients thus
this relationship is not considered to be of a value
or significance that adversely affects this Directors’
independence.
Term of office
Under the Company’s Constitution, at least one
third of all Directors, being the longest serving
Directors, must retire at each Annual General
Meeting. Directors, excluding the Chief Executive
Office, if a Director, must also retire if a third Annual
General Meeting falls during the period in which they
have held office. Retiring Directors are eligible to
be re-elected.
Chairman and Chief Executive Officer (“CEO”)
The Chairman must be appointed from within the
Board membership, having regard to the requirement
for a clear division of responsibility at the head of
the Company. The Board must agree a division of
responsibilities between the Chairman and Chief
Executive Officer, which should be set out in a
statement of position or authority.
The Chairman is responsible for leadership of the
Board and for the efficient organisation and conduct
of the Board. The Chairman should facilitate the
effective contribution by all Directors and promote
constructive and respectful relations amongst
Directors, and between the Board and the Group’s
Senior Executives.
The Chief Executive Officer is responsible for
implementing Group strategies and policies.
The Board’s Charter specifies that these roles
are separate and are to be undertaken by separate
people. The Chief Executive Officer must not become
the Chairman within three years of ceasing to be
Chief Executive Officer.
The induction provided to new Directors and senior
managers enables them to actively participate
in the Board’s decision-making processes as
soon as possible. It ensures that they have a full
understanding of the Company’s financial position,
strategies, operations, culture, values and risk
management policies. It also explains the respective
rights, duties, responsibilities, interaction and roles of
the Board and senior executives and the Company’s
meeting arrangements.
Commitment
Board meetings are normally held monthly, and are
expected to occur not less than ten times in any year.
The number of meetings of the Company’s Board
of Directors and of each Board Committee held during
the year ended 30 June 2013, and the number of
meetings attended by each director is disclosed
on page 28.
It is the Company’s practice to allow its executive
Directors to accept appointments outside the
Company with prior written approval of the Board.
No appointments of this nature were accepted
during the year ended 30 June 2013.
The commitments of non-executive Directors are
considered by the Nominations Committee prior
to the Directors’ appointment to the Board of the
Company and are reviewed each year, as part
of the annual performance assessment.
Prior to appointment or being submitted for re-
election, each non-executive Director is required
to specifically acknowledge that they have and will
continue to have the time available to discharge
their responsibilities to the Company.
Non-executive Directors
The non-executive Directors must meet at least
twice each financial year for a private discussion of
management issues. Relevant matters arising from
these meetings are shared with the full Board.
Conflict of interests
Where Directors are currently Directors of clients
of the Group, as detailed in Note 24 to the financial
statements, arrangements for these clients are on
43
CTM Annual Report 2013CTM Annual Report 2013 similar terms to other clients and no matters involving
these specific clients were required to be discussed at
a Board or Committee level during the current year.
In accordance with the Board’s Charter, should a
potential conflict be noted, the Director concerned is
required to declare the interests in those dealings to
the Company and take no part in decisions relating
to them or the preceding discussions. In addition, the
Director would not receive any papers from the Group
pertaining to those dealings.
Independent professional advice
With the prior approval of the Chairman, which may
not be unreasonably withheld or delayed, each
Director has the right to seek independent legal and
other professional advice concerning any aspect of
the Company’s operations or undertakings, in order to
fulfil their duties and responsibilities as Directors. Any
reasonable costs incurred are borne by the Company.
Performance assessment
The Board undertakes an annual self-assessment
of its collective performance, the performance of the
Chair and of its Committees. The assessment also
considers the adequacy of induction and continuing
education, access to information and the support
provided by the Company Secretary. The results
and any action plans are documented, together with
specific performance goals which are agreed for the
coming year.
An external assessment of the Board’s policies and
procedures, and its effectiveness generally must be
conducted by independent professional consultants at
intervals of three years or less.
An external board evaluation was performed in both
July 2012 and July 2013.
The Chair undertakes an annual assessment
of the performance of individual Directors and
meets privately with each Director to discuss this
assessment.
Board Committees
The Board has established a number of Committees
to assist in the execution of its duties and to allow
detailed consideration of complex issues. Current
Committees of the Board are the Audit and Risk
Management, Nomination and Remuneration
Committees.
44
Each Committee must consist of only non-executive
Directors, the majority of whom are also Independent
Directors. The Chairman of each Committee must
be an Independent Director and not Chairman of the
Board. Each Committee must consist of no fewer than
three members.
Each Committee has its own written Charter, setting
out its role and responsibilities, composition, structure,
membership requirements and the manner in which
the Committee is to operate. All of these Charters
are reviewed on an annual basis and are available
on the Company’s website. All matters determined
by Committees are submitted to the full Board as
recommendations for Board decisions.
Minutes of Committee meetings are tabled at the
subsequent Board meeting. Additional requirements
for specific reporting by the Committees to the
Board are addressed in the Charter of the individual
committees.
Nomination Committee
The purpose of this Committee is to provide advice
and make recommendations to the Board about
the appointment of new Directors, to ensure that
it is comprised of individuals who are best able to
discharge the responsibilities of Directors, having
regard to the law and the highest standards of
governance. The role of the Committee, to the extent
delegated by the Board, also extends to making
recommendations in relation to the appointment of
senior management. Its members are Tony Bellas
(Chairman), Stephen Lonie and Greg Moynihan.
Details of Director attendance at Nomination
Committee meetings are set out in the Directors’
report on page 28.
The Committee has responsibility to:
a. Review and recommend to the Board the size and
composition of the Board;
b. Assess and develop a skills matrix, to identify the
skills required by the Board, competencies of Board
members and the extent to which the required
skills, experience, qualification and diversity are
represented on the Board;
c. Assist the Board to identify suitable candidates for
Board membership and re-election;
d. Establishing processes for:
i. Ensuring the Board complies with the Diversity
Policy and that any diversity profile identified by
the Board is taken into account in the selection
and appointment of candidates;
ii. The evaluation of performance and independence
of the Board and individual Directors;
iii. Identifying, assessing and enhancing the skills set
of Directors;
highest standards of behaviour and professionalism
and the practices necessary to maintain confidence
in the Group’s integrity and takes into account legal
obligations and reasonable expectations of the
Company’s stakeholders.
The code of ethics forms part of the Company’s
Corporate Governance Charter, which has been
formally adopted and can be inspected on the
Company’s website.
iv. Reviewing and ensuring appropriate induction
programs are in place; and
The Directors are satisfied that the Group has
complied with its policies on ethical standards.
v. Reviewing corporate governance issues
Share Trading Policy
as required; and
e. Reporting to the Board on:
i. Succession planning for Directors,
executives and other senior managers; and
ii. The diversity profile of employees.
A Share Trading and Continuous Disclosure Policy
has been adopted by the Board, to provide guidance
to the Directors, identified employees including senior
management, and other employees (“staff”) where
they are contemplating dealing in securities of the
Company or the securities of entities with whom the
Group may have dealings.
When a new Director is to be appointed, the
Committee uses the skills matrix to prepare a
short-list of candidates with appropriate skills and
experience. A number of channels are used to source
candidates, to ensure the Company benefits from a
diverse range of individuals in the selection process.
Where necessary, advice is sought from independent
search consultants.
The Committee’s nomination of existing Directors for
reappointment is not automatic and is contingent on
their past performance, contribution to the Company
and the current and future needs of the Board and
Company. The Board and the Committee are also
aware of the advantages of Board renewal and
succession planning.
Notices of meetings for the election of Directors
comply with the ASX Corporate Governance Council’s
best practice recommendations.
PRINCIPLE 3: PROMOTE ETHICAL AND
RESPONSIBLE DECISION MAKING
Code of ethics and values
The Company has developed and adopted a detailed
code of ethics and values to guide Directors in the
performance of their duties. The code reflects the
The Code of Conduct for transactions in securities
is as follows:
a. The Share Trading and Continuous Disclosure
Policy incorporates a Code of Conduct for
Transactions in Securities (“Transactions Code”).
The Transactions Code acknowledges that it is
desirable that Directors and senior management
hold securities in the Company and is designed
to ensure any dealings by Directors and senior
management and their associates in the Company’s
securities or securities of other entities is fair and
transparent.
b. The Transactions Code’s purpose is to
restrict share trading by Directors and staff to
circumstances where it is unlikely that there would
be any perception of insider trading in relation to
dealings in the Company’s securities or securities of
other entities.
c. The Transactions Code prohibits share trading
by Directors and staff in securities where they
are in possession of price sensitive information.
The prohibition extends to dealings through
related parties, as defined in the Corporations
Act, and to encouraging family or friends to so
deal. Communication of price sensitive information
by a Director or staff member to a person who
is reasonably likely to trade in securities is also
45
CTM Annual Report 2013CTM Annual Report 2013 prohibited. A comprehensive definition of ‘price
sensitive information’ adopted by the Board is
included in the Transactions Code.
d. The Transactions Code clearly sets out the
permitted trading windows and excepted trading
circumstances by Directors and Officers of the
Company. At all other times, trading by Directors
and officers of the Company is prohibited unless
written authority to trade is received and the
transaction would not be contrary to law, for
speculative gain, use insider information nor
be perceived as unfair.
Policy, a facet of the role of the Remuneration
Committee includes reporting to the Board annually
on the proportion of men and women in the Group’s
workforce and their relative levels of remunerations.
The Board will assess and report annually to
Shareholders on the Group’s progress towards
achieving its diversity goals.
The Diversity Policy is available on the
Company’s website.
The code requires written approval from the Chairman
in advance of any transactions by staff for securities
valued over $50,000.
In accordance with this policy and ASX Corporate
Governance Principles, the Board has established
objectives in relation to gender diversity. The position
at 30 June 2013 is detailed as follows:
The Directors are satisfied that the Group has
complied with its policies regarding trading in
securities.
A copy of the Share Trading Policy is available
on the Company’s website.
Diversity policy
The Company is committed to complying with the
diversity recommendations published by ASX and
promoting diversity among employees, consultants
and senior management, and has adopted a policy
in relation to diversity (“Diversity Policy”).
The Company defines diversity to include, but not
be limited to, gender, age, ethnicity and cultural
background.
The Diversity Policy adopted by the Board outlines
the Company’s commitment to fostering a corporate
culture that embraces diversity and provides a
process for the Board to determine measurable
objectives and procedures to implement and report
against to achieve its diversity goals.
The Nomination Committee is responsible for
implementing the Diversity Policy, setting the
Company’s measurable objectives and benchmarks
for achieving diversity and reporting to the Board on
compliance with the Diversity Policy.
As part of its role, the Remuneration Committee
is responsible for formulating and implementing a
Company remuneration policy. Under the Diversity
46
Actual
Item
Men
Women
Number of total employees
134
522
Percentage of total employees
20%
80%
Number of employees in senior
executive positions
13
9
Percentage of employees in
senior executive positions
Number of employees on the
Board
Percentage of employees
on the Board
59%
41%
4
1
80%
20%
The Group’s focus is predominately on maintaining
gender diversity, and more importantly, ensuring
we offer flexible working arrangements to allow all
employees and especially female employees, options
to continue to work or to return to work during periods
where they traditionally leave the workforce, for
example, following parental leave.
The following measurable objective relating to gender
diversity was adopted by the Board for FY13:
■ Candidates interviewed for any key management
personnel positions will include each gender,
subject to all eligible candidates meeting the
appropriate requirements in terms of skills
and experience.
The Board assessment is that this objective
has been achieved.
Director. Its current members are Stephen Lonie
(Chairman), Greg Moynihan and Tony Bellas.
In FY13, there was an increase of seven senior
executive positions, primarily due to corporate
acquisitions in North America. For five of
these positions, the incumbents were males.
As a consequence the number of female employees
in senior executive positions decreased from
47% in FY12 to 41% in FY13.
Other highlights are as follows:
■ A “High Potential” program was launched and
employees identified as part of the company’s
succession planning process.
■ Continue to provide and promote flexible working
practices which are detailed in CTM’s “Working
from Home” policy.
Continuous Improvement
In FY14, the Group will take the following
steps to further enhance gender diversity:
■ The commencement of “Base Camp” –
a Frontline Management Development program.
■ A pay equity review and audit will be undertaken.
Monitoring and tracking performance against diversity
plans will continue to be undertaken as part of the
Group’s internal compliance requirements. Progress
against each year’s measurable objectives will
continue to be disclosed in the Annual Report along
with the proportion of women in the workforce, in
senior management and on the Board.
PRINCIPLE 4: SAFEGUARD INTEGRITY
IN FINANCIAL REPORTING
Audit and Risk Management Committee
The purpose of this Committee is to report to
the Board on the establishment, maintenance
and operation of control systems, including in
relation to financial monitoring, internal and external
reporting, as well as the adoption and application
of appropriate ethical standards for the management
of the Company and the conduct of the Company’s
business. The Committee consists of Senior
Executives and is chaired by a Non-Executive
The Committee is responsible for a number of matters
including:
a. Board and Committee structures, to facilitate
a proper review function by the Board;
b. Internal control framework, including management
information systems;
c. Compliance with internal controls;
d. Internal audit function and management
processes supporting external reporting;
e. Review of financial statements and other
financial information distributed externally;
f. Review of the effectiveness of the audit function;
g. Review of the performance and independence
of the external auditors;
h. Review of the external audit function, to ensure
prompt remedial action by management, in relation
to any deficiency in or breakdown of controls;
i. Assessing the adequacy of external reporting
for the needs of Shareholders; and
j. Monitoring compliance with the Company’s
Code of Conduct.
In fulfilling its responsibilities, the Audit and Risk
Management Committee:
■ Receives regular reports from management
and the external auditors;
■ Reviews the processes the Chief Executive
Officer and Chief Financial Officer have in place
to support their certifications to the Board;
■ Reviews any significant disagreements between
the auditors and management, irrespective
of whether they have been resolved;
■ Meets with the external auditors at least twice
a year, or more frequently if necessary;
■ Meets separately with the external auditors
at least twice a year without the presence of
management; and
47
CTM Annual Report 2013CTM Annual Report 2013
■ Provides the external auditors with a clear line
of direct communication at any time to either
the Chair of the Audit and Risk Management
Committee or the Chair of the Board.
The Audit and Risk Management Committee has
authority, within the scope of its responsibilities,
to seek any information it requires from any employee
or external party.
Meetings of the Committee are expected to be held
at least four times each year. A broad agenda is laid
down for each regular meeting according to an annual
cycle. The Committee invites the external auditor
to attend each of its meetings.
Details of Director attendance at Audit and Risk
Management Committee meetings are set out
in the Directors’ report on page 28.
Corporate reporting
In complying with recommendation 7.3, the Chief
Executive Officer and Chief Financial Officer have
made the following certifications to the Board, that:
■ The Company’s financial reports are complete
and present a true and fair view, in all material
respects, of the financial condition and operational
results of the Company and Group and are in
accordance with relevant accounting standards;
and
■ The statement is founded on a sound system
of risk management and internal compliance
and control which implements the policies
adopted by the Board and that the Company’s
risk management and internal compliance and
control is operating efficiently and effectively in
all material respects in relation to financial
reporting risks.
External auditors
The Company’s policy is to appoint external auditors
who clearly demonstrate quality and independence.
The performance of the external auditor is
reviewed annually and applications for tender of
external audit services are requested as deemed
appropriate, taking into consideration assessment
of performance, existing value and tender costs.
PricewaterhouseCoopers (“PwC”) was appointed
as the external auditor in 2010. It is PwC’s policy to
rotate audit engagement partners on listed companies
at least every five years, and, in accordance with
that policy, a new audit engagement partner will
be introduced no later than for the year ended 30
June 2015.
An analysis of fees paid to the external auditors,
including a break-down of fees for non-audit services,
is provided in the Directors’ Report and in Note 26 to
the financial statements. It is the policy of the external
auditors to provide an annual declaration of their
independence to the Audit and Risk Management
Committee.
The external auditor will attend the Annual General
Meeting and be available to answer shareholder
questions about the conduct of the audit and the
preparation and content of the audit report.
PRINCIPLES 5 AND 6: MAKE TIMELY AND
BALANCED DISCLOSURES AND RESPECT
THE RIGHTS OF SHAREHOLDERS
Continuous disclosure and shareholder
communication
A Share Trading and Continuous Disclosure Policy
has been adopted by the Board to provide guidance
to the Directors, identified employees including senior
management, and other employees (“staff”) where the
disclosure of information, which may materially affect
the price or value of the Company’s shares,
is required.
The Board has adopted a Continuous Disclosure
Policy (“Disclosure Policy”), within the Share Trading
and Continuous Disclosure Policy, which sets out
procedures to be adopted by the Board to ensure
the Company complies with its continuous disclosure
obligations, to keep the market fully informed of
information which may have a material effect on
the price or value of the Company’s securities
and to correct any material mistake or information
in the market.
The Board is responsible for determining whether
information would have a material effect on the price
or value of the Company’s securities. The Disclosure
Policy provides a framework for the Board and officers
of the Company to internally identify and report
information which may need to be disclosed and
sets out practical implementation processes in order
to ensure any identified information is adequately
communicated to ASX and Shareholders.
Company’s risk management by overseeing
management’s actions in the evaluation,
management, monitoring and reporting of material
operational, financial, compliance and strategic
risks. In providing this oversight, the Committee:
The Share Trading and Disclosure Policy also sets
out the exceptions to the disclosure requirements and
outlines when disclosure may be required in relation
to the Company’s financing arrangements and the
approval and disclosure process in relation to Director
margin loans.
Any non-compliance with the Share Trading and
Continuous Disclosure Policy will be regarded as
an act of serious misconduct. The Share Trading
and Continuous Disclosure Policy is available on
the Company’s website.
The Company Secretary has been nominated
as the person responsible for communications
with the ASX. This role includes responsibility for
ensuring compliance with the continuous disclosure
requirements in the ASX Listing Rules and overseeing
and coordinating information disclosure to the ASX,
analysts, brokers, shareholders, the media and
the public.
All information disclosed to the ASX is posted on
the Company’s website as soon as it is disclosed
to the ASX. When analysts are briefed on aspects
of the Group’s operations, the material used in the
presentation is released to the ASX and posted
on the Company’s website.
PRINCIPLE 7: RECOGNISE AND MANAGE RISK
The Board is responsible for satisfying itself annually,
or more frequently as required, that management
has developed and implemented a sound system
of risk management and internal control. Detailed
work on this task is delegated to the Audit and Risk
Management Committee and reviewed by the
full Board.
The Audit and Risk Management Committee is
responsible for ensuring that there are adequate
policies in relation to risk management, compliance
and internal control systems. It monitors the
■ Reviews the framework and methodology for
risk identification, the degree of risk the Company
is willing to accept, the management of risk and
the processes for auditing and evaluating the
Company’s risk management system;
■ Reviews Group-wide objectives in the
context of these categories of corporate risk;
■ Reviews and, where necessary, approves
guidelines and policies governing the
identification, assessment and management
of the Company’s exposure to risk;
■ Reviews and approves the delegations of financial
authorities and addresses any need to update
these authorities on an annual basis; and
■ Reviews compliance with agreed policies.
The Committee recommends any actions it deems
appropriate to the Board for its consideration.
Management is responsible for designing,
implementing and reporting on the adequacy of the
Company’s risk management and internal control
system and has to report to the Audit and Risk
Management Committee on the effectiveness of:
■ The risk management and internal control
systems during the year; and
■ The Company’s management of its material
business risks.
PRINCIPLE 8: REMUNERATE
FAIRLY AND RESPONSIBLY
Remuneration Committee
The purpose of this Committee is to report to
the Board on remuneration and issues relevant to
remuneration policies and practices including the
remuneration of senior management and Non-
Executive Directors. The committee consists of
Senior Executives and is chaired by a Non-Executive
Director. Its current members are Greg Moynihan
(Chairman), Stephen Lonie and Tony Bellas.
48
49
CTM Annual Report 2013CTM Annual Report 2013 The functions performed by the Committee are
as follows:
Meetings are expected to be held at least three times
each year. A broad agenda is laid down for each
regular meeting according to an annual cycle.
Consolidated Statement of Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2013
Details of Director attendance at Remuneration
Committee meetings are set out in the Directors’
report on page 28.
Further information on Directors’ and executives’
remuneration, including principles used to determine
remuneration, is set out in the Directors’ Report under
the heading ‘Remuneration Report’.
a. Reviewing and evaluating of market practices
and trends in remuneration matters;
b. Making recommendations to the Board in relation
to the Company’s remuneration policies and
procedures;
c. Monitoring the performance of the Chief Executive
Officer, Chief Operating Officer, Chief Financial
Officer, other members of senior management
and Non-Executive Directors;
d. Making recommendations to the Board in relation
to the remuneration of the Chief Executive Officer,
Chief Operating Officer, Chief Financial Officer,
other members of senior management and Non-
Executive Directors; and
e. Preparing for the Board any report that may be
required under applicable legal or regulatory
requirements about remuneration matters.
Note
4
5
6
6
7
Revenue
Other income
Total revenue and other income
Employee benefits expenses
Occupancy expenses
Depreciation and amortisation expenses
Information technology and telecommunications expenses
Travel and entertainment expenses
Administrative and general expenses
Total operating expenses
Finance costs
Profit before income tax
Income tax expense
Profit for the year
Other comprehensive income
Items that may be reclassified to profit and loss
Exchange differences on translation of foreign operations
20
Other comprehensive income for the period, net of tax
Total comprehensive income for the year, attributable
to the ordinary equity holders of Corporate Travel
Management Limited
2013
$’000
78,964
-
78,964
2012
$’000
65,551
683
66,234
(47,004)
(38,691)
(2,675)
(2,079)
(4,859)
(1,232)
(3,009)
(2,198)
(1,400)
(3,764)
(1,289)
(2,052)
(60,858)
(49,394)
(724)
17,382
(4,988)
12,394
1,567
1,567
(60)
16,780
(4,982)
11,798
(3)
(3)
13,961
11,795
Earnings per share for profit from continuing operations attributable to the ordinary equity holders of the company:
- Basic (cents per share)
- Diluted (cents per share)
8
8
16.3
16.3
16.3
16.3
The above Consolidated Statement of Comprehensive Income
should be read in conjunction with the accompanying notes.
50
51
CTM Annual Report 2013CTM Annual Report 2013 Consolidated Statement of Financial Position
AS AT 30 JUNE 2013
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2013
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Financial assets at fair value
Other current assets
TOTAL CURRENT ASSETS
Non-current Assets
Plant and equipment
Intangible assets
Total Non-current Assets
TOTAL ASSETS
Liabilities
Current Liabilities
Trade and other payables
Interest bearing borrowings
Income tax payable
Provisions
TOTAL CURRENT LIABILITIES
Non-current Liabilities
Trade and other payables
Interest bearing borrowings
Provisions
Deferred tax liabilities
Total Non-current Liabilities
TOTAL LIABILITIES
NET ASSETS
Equity
Contributed equity
Reserves
Retained earnings
TOTAL EQUITY
The above Consolidated Statement of Financial Position should
be read in conjunction with the accompanying notes.
Note
10
11
12
13
14
15
17
18
19
17
18
19
7
20(a)
20(b)
20(c)
2013
$’000
13,535
27,975
18
688
2012
$’000
12,210
25,676
16
396
42,216
38,298
3,166
75,714
78,880
121,096
26,048
3,192
552
1,869
31,661
12,294
157
795
3,204
16,450
48,111
72,985
47,856
1,564
23,565
72,985
2,572
42,744
45,316
83,614
22,927
839
2,096
1,850
27,712
266
-
766
1,861
2,893
30,605
53,009
34,344
(3)
18,668
53,009
Attributable to equity holders of the parent
Note
Contributed
equity
$’000
Retained
earnings
$’000
Reserves
$’000
Balance at 30 June 2011
25,548
12,683
Profit for the period as reported in
2012 financial statements
Other comprehensive income
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
-
-
-
11,798
-
11,798
Shares issued
20(a)
8,796
-
Dividends declared or paid
9
-
(5,813)
8,796
(5,813)
Balance at 30 June 2012
34,344
18,668
Profit for the period as reported in 2013
financial statements
Other comprehensive income
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
-
-
-
12,394
-
12,394
Shares issued
20(a)
13,512
-
Dividends declared or paid
9
-
(7,497)
13,512
(7,497)
-
-
(3)
(3)
-
-
-
(3)
-
1,567
1,567
-
-
-
Total
equity
$’000
38,231
11,798
(3)
11,795
8,796
(5,813)
2,983
53,009
12,394
1,567
13,961
13,512
(7,497)
6,015
Balance at 30 June 2013
47,856
23,565
1,564
72,985
The above Consolidated Statement of Changes in Equity
should be read in conjunction with the accompanying notes.
52
53
CTM Annual Report 2013CTM Annual Report 2013 Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2013
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2013
Cash flows from operating activities
Receipts from customers (including GST)
Payments to suppliers and employees (including GST)
Interest received
Finance costs
Income tax (paid) / received
Net cash flows from operating activities
Cash flows from investing activities
Payment for plant and equipment
Payment for intangibles
Proceeds from sale of plant and equipment
Purchase of controlled entities, net of cash acquired
Net cash flows used in investing activities
Cash flows from financing activities
Proceeds from issue of new shares
Proceeds from borrowings
Repayments of borrowings
Repayment of related party loans
Receipt from related party receivable
Dividends paid
Net cash flows from financing activities
Net (decrease) / increase in cash and cash equivalents
Effects of exchange rate changes
on cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
The above Consolidated Statement of Cash Flows should
be read in conjunction with the accompanying notes.
Note
2013
$’000
2012
$’000
85,920
(64,409)
201
(553)
(5,189)
15,970
(2,229)
(1,282)
56
(15,918)
(19,373)
9,765
13,586
(11,154)
-
-
(7,497)
4,700
1,297
28
12,210
13,535
60,421
(50,180)
274
(54)
(2,973)
7,488
(2,135)
(701)
-
(9,482)
(12,318)
6,709
881
(544)
(217)
337
(5,813)
1,353
(3,477)
6
15,681
12,210
10
22
20
24
24
9
10
1. CORPORATE INFORMATION
The financial report of Corporate Travel
Management Limited and its controlled entities
(the “Group”) for the year ended 30 June 2013
was authorised for issue in accordance with a
resolution of Directors on 28 August 2013.
The Directors have the power to amend and
reissue the financial statements.
Corporate Travel Management Limited is a
company limited by shares, incorporated and
domiciled in Australia.
The nature of the operations and principal activities
of the Group are described in the Directors’ Report.
2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
(a) Basis of preparation
These general purpose financial statements have
been prepared in accordance with Australian
Accounting Standards and Interpretations issued
by the Australian Accounting Standards Board
and the Corporations Act 2001. Corporate Travel
Management Limited is a for-profit entity for the
purpose of preparing the financial statements.
Compliance with IFRS
The consolidated financial statements of the Group
also comply with International Financial Reporting
Standards (“IFRS”) as issued by the International
Accounting Standards Board (“IASB”).
The financial report is presented in Australian dollars
and all values are rounded to the nearest thousand
dollars ($’000), unless otherwise stated.
These financial statements have been prepared
under the historical cost convention, as modified by
the revaluation of available-for-sale financial assets,
and financial assets and liabilities, at fair value
through profit or loss and certain classes of plant
and equipment.
(b) Statement of compliance
In the current year, the Group has adopted all of
the new and revised Standards and Interpretations
issued by the Australian Accounting Standards Board
(“AASB”) that are relevant to its operations and
effective for the current annual reporting period.
The adoption of these new and revised Standards
and Interpretations did not have any material financial
impact on the amounts recognised in the financial
statements of the Group.
Certain new accounting standards and interpretations
have been published that are not mandatory for the
reporting period ending 30 June 2013. The Group
will continue to assess the impact of these standards,
however, there are currently no new standards
which management consider will have a significant
impact on the amounts recognised in the financial
statements.
(c) Basis of consolidation
The consolidated financial statements comprise the
financial statements of Corporate Travel Management
Limited and its controlled entities (the “Group”).
Subsidiaries are all those entities over which the
Group has the power to govern the financial and
operating policies, to obtain benefits from their
activities. The existence and effect of potential voting
rights that are currently exercisable or convertible are
considered when assessing whether a Group controls
another entity.
The financial statements of subsidiaries are prepared
for the same reporting period as the parent Company,
using consistent accounting policies. Adjustments
are made to bring into line any dissimilar accounting
policies that may exist.
In preparing the consolidated financial statements,
all intercompany balances and transactions, income
and expenses and profit and losses resulting from
intra-Group transactions have been eliminated in full.
54
55
CTM Annual Report 2013CTM Annual Report 2013 Contingent consideration is classified either as equity
or a financial liability. Amounts classified as a financial
liability are subsequently remeasured to fair value,
with changes in fair value recognised in other income
or other expenses in the Consolidated Statement of
Comprehensive Income.
(e) Segment reporting
AASB 8 Operating Segments requires a ‘management
approach’, under which segment information is
presented on the same basis as that used for internal
reporting purposes.
Operating segments are reported in a manner that is
consistent with the internal reporting provided to the
chief operating decision makers. The chief operating
decision-makers have been identified as a group of
key senior managers, which is the steering committee
that makes strategic decisions.
Goodwill is allocated by management to groups
of cash-generating units on a segment level.
(f) Critical accounting 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
considered to be reasonable under the circumstances.
(i) Critical accounting judgements
In the process of applying the Group’s accounting
policies, management has made no judgements,
apart from those judgements involving estimations,
which have a significant effect on the amounts
recognised in the financial statements.
(ii)Critical accounting estimates and assumptions
The Group makes estimates and assumptions
concerning the future. The resulting accounting
estimates will, by definition, seldom equal the related
actual results. The estimates and assumptions
that have a significant risk of causing a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year are discussed
in this report, as follows:
Subsidiaries are fully consolidated from the date on
which control is obtained by the Group and cease
to be consolidated from the date on which control is
transferred out of the Group.
(d) Business combinations
The purchase method of accounting is used to
account for all business combinations regardless
of whether equity instruments or other assets are
acquired. The consideration transferred is measured
as the fair value of the assets acquired, shares
issued or liabilities incurred or assumed at the date of
exchange, and, for acquisitions prior to 1 July 2009,
included costs directly attributable to the combination.
For acquisitions after 1 July 2009, acquisition-related
costs are expensed in the period in which the costs
are incurred, rather than being added to the cost of
the business combination, as required by revised
AASB 3 Business Combinations. Where equity
instruments are issued in a business combination,
the fair value of the instruments is their published
market price as at the date of exchange. Transaction
costs arising on the issue of equity instruments are
recognised directly in equity. The consideration
transferred also includes the fair value of any asset
or liability resulting from a contingent consideration
arrangement.
With limited exceptions, all identifiable assets
acquired and liabilities and contingent liabilities
assumed in a business combination are measured
initially at their fair values at the acquisition date.
The excess of the consideration transferred of the
business combination over the net fair value of the
Group’s share of the identifiable net assets acquired
is recognised as goodwill. If the consideration
transferred of the acquisition is less than the Group’s
share of the net fair value of the identifiable net
assets of the subsidiary, the difference is recognised
as a gain in the profit and loss in the Consolidated
Statement of Comprehensive Income, but only after a
reassessment of the identification and measurement
of the net assets acquired.
Where settlement of any part of the cash
consideration is deferred, the amounts payable in
the future are discounted to their present value, as
at the date of exchange. The discount rate used is
the entity’s incremental borrowing rate, being the rate
at which a similar borrowing could be obtained from
an independent financier under comparable terms
and conditions.
56
■ Value of intangible assets relating to acquisitions
The Group has allocated portions of the cost of
acquisitions to client contracts and relationships
intangibles, valued using the multi-period excess
earnings method. These calculations require the
use of assumptions including future customer
retention rates and cash flows.
■ Impairment of goodwill
The Group determines whether goodwill is
impaired on an annual basis. This assessment
requires an estimation of the recoverable amount
of the cash-generating units to which the goodwill
is allocated. Refer to Notes 2(o) and 16 for
further details.
■ Impairment of intangible with finite life
Intangible assets are tested for impairment
where an indicator of impairment exists, either
individually or at the cash-generating unit level.
This assessment requires an estimation of the
recoverable amount of the cash-generating units
to which the intangibles are allocated. Refer to
Note 2(o) for further details.
■ Lease make-good
The Group estimates its liability to provide for
the restoration of leased premises by reference
to historical data and by specific estimates on a
premise by premise basis.
■ Allowance for doubtful debts
The Group determines whether client and trade
receivables are collectable on an ongoing
basis. This assessment requires estimations of
the individual recoverability of each debt and
if considered uncollectable, is subject to an
impairment provision. Refer to Note 2(l).
■ Override Revenue
In addition to commission payments, the Group is
eligible for override payments from its suppliers.
These overrides are negotiated with individual
suppliers and will typically include a combination
of guaranteed payments and volume incentives.
The volume incentives are recognised at the
amount receivable when annual targets are likely
to be achieved. The override revenue accrual
process is inherently judgemental and is impacted
by factors which are not completely under Group’s
control. These factors include:
▪ Year-end differences
As supplier contract periods do not always
correspond to the Group’s financial year,
judgements and estimation techniques are
required to determine anticipated future flown
revenues over the remaining contract year and
the associated override rates applicable to
these forecast levels.
▪ Timing
Where contracts have not been finalised before
the start of the contract period, override and
commission earnings may have to be estimated
until agreement has been reached.
▪ Re-negotiations
Periodic re-negotiation of terms and contractual
arrangements with suppliers may result in
additional volume incentives, rebates or other
bonuses being received. These payments may
not be specified in existing contracts.
(g) Foreign currency translation
(i) Functional and presentation currency
Items included in each of the Group entities’ financial
statements 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 Australian
dollars, which is the Company’s functional and
presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into
the functional currency using the exchange rates
prevailing at the transaction dates. Foreign exchange
gains and losses resulting from the settlement of
such transactions and from the translation at year-
end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised
in the profit and loss in the Consolidated Statement
of Comprehensive Income, except when deferred in
equity as qualifying cash flow hedges and qualifying
net investment hedges.
Translation differences on non-monetary financial
assets and liabilities, such as equities held at fair
value through profit or loss, are recognised in profit
or loss as part of the fair value gain or loss.
Translation differences on non-monetary financial
assets, such as equities classified as available-for-
sale financial assets, are included in the fair value
reserve in other comprehensive income.
57
CTM Annual Report 2013CTM Annual Report 2013 (iii) Foreign operations
The results and financial position of all the foreign
operations that have different functional currencies
different to the presentation currency are translated
into the presentation currency as follows:
■ Assets and liabilities for each Consolidated
Statement of Financial Position item presented
are translated at the closing rate at the date
of that statement;
■ Income and expenses for each profit and
loss item in the Consolidated Statement of
Comprehensive Income are translated at
average exchange rates; and
■ All resulting exchange differences are recognised
as a separate component of equity.
Exchange differences arising from the translation
of any net investment in foreign operations and of
borrowings and other financial instruments designated
as hedges of such investments are recognised
in other comprehensive income. When a foreign
operation is sold or any borrowings forming part
of the net investment are repaid, a proportionate
share of such exchange differences is recognised
in the profit and loss in the Consolidated Statement
of Comprehensive Income as part of the gain or
loss on sale.
Goodwill and fair value adjustments arising on
the acquisition of foreign operations are treated
as the foreign operations’ assets and liabilities
and translated at the closing rate.
(h) Revenue recognition
Revenue is measured at the fair value of the
consideration received or receivable. Amounts
disclosed as revenue are net of returns, allowances,
rebates and amounts collected on behalf of
third parties.
The Group recognises revenue when the amount of
revenue can be reliably measured, it is probable that
future economic benefits will flow to the entity and
specific criteria set out in the following paragraphs
have been met for each of the Group’s activities. The
amount of revenue is not considered to be reliably
measurable until all contingencies relating to the sale
have been resolved. The Group bases its estimates
on historical results, taking into consideration the type
of customer, the type of transaction and the specifics
of each arrangement.
58
Revenue is recognised for the major business
activities as follows:
■ Sales revenue
Sales revenue represents net revenue earned on
transactions made through the provision of travel
services, and includes any commission payable
by suppliers after completion of the transaction.
■ Interest revenue
Interest income is recognised using the effective
interest method.
■ Dividends
Revenue is recognised when the Group’s right to
receive the payment is established.
■ Other revenue
Other revenue is recognised when the right to
receive the revenue is established.
(i) Finance costs
This expense is recognised as interest accrues, using
the effective interest method. This method calculates
the amortised cost of a financial liability and allocates
the interest expense over the relevant period using
the effective interest rate, which is the rate that
exactly discounts estimated future cash payments
through the expected life of the financial liability to
the net carrying amount of the financial liability.
(j) Leases
The determination of whether an arrangement is or
contains a lease is based on the substance of the
arrangement and requires an assessment of whether
the fulfilment of the arrangement is dependent on the
use of a specific asset or assets and the arrangement
conveys a rights to use the asset.
Finance leases, which transfer to the Group
substantially all the risks and benefits incidental to
ownership of the leased item, are capitalised at the
inception of the lease at the fair value of the leased
property or, if lower, at the present value of the
minimum lease payments. The corresponding rental
obligations, net of finance charges, are included in
other short-term and long-term payables.
Lease payments are apportioned between the finance
charges and reduction of the lease liability to achieve
a constant rate of interest on the remaining balance
of the liability. Finance charges are charged directly
against income.
Capitalised leased assets are amortised over the
shorter of the estimated useful life of the asset or
the lease term.
Operating lease payments, which do not transfer
to the Group substantially all the risks and benefits
incidental to ownership of the leased item, are
recognised as an expense in the profit and loss
in the Consolidated Statement of Comprehensive
Income on a straight-line basis over the lease term.
Incentives for entering into operating leases are
recognised on a straight-line basis over the term
of the lease.
Lease income from operating leases, where the
Group is a lessor, is recognised in income on a
straight-line basis over the lease term.
(k) Cash and cash equivalents
Cash and cash equivalents in the Consolidated
Statement of Financial Position comprise cash
at bank and on hand and short-term deposits, with
an original maturity of three months or less, that are
readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes
in value.
Client cash represents amounts from clients held
before release to service and product suppliers.
For the purpose of the consolidated cash flow
statement, cash and cash equivalents consist
of cash and cash equivalents as defined, net
of outstanding bank overdrafts.
(l) Trade and other receivables
Trade and client receivables, which generally have
7-30 day terms, are recognised initially at fair value
and subsequently measured at amortised cost using
the effective interest method, less an allowance
for impairment.
Client receivables result from the provision of travel
services to clients. Trade receivables result from other
activities relating to the provision of travel services,
such as commissions payable by suppliers.
Collectability of trade and client receivables is
reviewed on an ongoing basis at an operating
unit level. Individual debts that are known to be
uncollectible are written off when identified. An
impairment provision is recognised when there is
objective evidence that the Group will not be able to
collect the receivable. The amount of the impairment
loss is the receivable carrying amount compared to
the present value of estimated future cash flows,
discounted at the original effective interest rate.
The amount of the impairment loss is recognised in
the profit and loss in the Consolidated Statement
of Comprehensive Income within administration
expenses. When a trade receivable, for which an
impairment allowance had been recognised, becomes
uncollectible in a subsequent period, it is written
off against the allowance account. Subsequent
recoveries of amounts previously written off are
credited against administration expenses in the
profit and loss in the Consolidated Statement of
Comprehensive Income.
(m) Income tax and other taxes
The income tax expense (or revenue) for the period
is the tax payable on the current period’s taxable
income based on the applicable income tax rate for
each jurisdiction, adjusted by changes in deferred
tax assets and liabilities attributable to temporary
differences and to unused tax losses.
The current income tax charge is calculated on the
basis of the tax laws enacted or substantively enacted
at the end of the reporting period in the countries
where the Company’s subsidiaries and associates
operate and generate taxable income. Management
periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax
regulation is subject to interpretation. It establishes
provisions, where appropriate, on the basis of
amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the
liability method, on temporary differences arising
between the tax bases of assets and liabilities and
their carrying amounts in the consolidated financial
statements. However, the deferred income tax is not
accounted for if it arises from initial recognition of an
asset or liability in a transaction other than a business
combination that, at the time of the transaction, affects
neither accounting nor taxable profit or loss. Deferred
income tax is determined using tax rates and laws
that have been enacted or substantially enacted by
the end of the reporting period and are expected to
apply when the related deferred income tax asset is
realised or the deferred income tax liability is settled.
59
CTM Annual Report 2013CTM Annual Report 2013 Deferred tax assets are recognised for deductible
temporary differences and unused tax losses only
if it is probable that future taxable amounts will be
available to utilise those temporary differences and
losses.
Deferred tax liabilities and assets 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 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. Current
tax assets and tax liabilities are offset where the entity
has a legally enforceable right to offset and intends
either to settle on a net basis, or to realise the asset
and settle the liability simultaneously.
Current and deferred tax 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, the tax is also recognised in
other comprehensive income or directly in equity,
respectively.
Other taxes
Revenues, expenses and assets are recognised
net of the amount of GST except:
■ When the GST incurred on a purchase of goods
and services is not recoverable from the taxation
authority, in which case, the GST is recognised
as part of the cost of acquisition of the asset or
as part of the expense item as applicable; and
■ Receivables and payables, which are stated
with the amount of GST included.
The net amount of GST recoverable from, or
payable to, the taxation authority is included as
part of receivables or payables in the Consolidated
Statement of Financial Position.
Cash flows are included in the consolidated cash flow
statement on a gross basis and the GST component
of cash flows arising from investing and financing
activities, which is recoverable from, or payable to,
the taxation authority are classified as operating
cash flows.
Commitments and contingencies are disclosed net
of the amount of GST recoverable from, or payable to,
the taxation authority.
(n) Plant and equipment
Plant and equipment is stated at historical
cost less accumulated depreciation and any
accumulated impairment losses. Historical cost
includes expenditure that is directly attributable
to the acquisition of the item. All other repairs
and maintenance costs are charged to the profit
and loss in the Consolidated Statement of
Comprehensive Income during the reporting
period in which they are incurred.
Depreciation is calculated at the following rates:
Item
Rate
Plant and equipment under lease:
Motor Vehicles
18.75% - diminishing value
Plant and equipment:
Leasehold improvements
Over life of lease
Computer hardware
40.00% - straight line
Other plant and equipment
37.50% - diminishing value
The assets’ residual values, useful lives and
amortisation methods are reviewed, and adjusted,
if appropriate, at each financial year end.
Impairment
The carrying values of plant and equipment are
reviewed for impairment when events or changes
in circumstances indicate that the carrying value
may not be recoverable.
The recoverable amount of plant and equipment is
the higher of fair value less costs to sell and value
in use. In assessing value in use, the estimated future
cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market
assessments of the time value of money and the
risks specific to the asset.
Derecognition
(p) Intangible assets
An item of plant and equipment is derecognised upon
disposal or when no future economic benefits are
expected to arise from the continued use of the asset.
Any gain or loss arising on derecognition of the asset,
calculated as the difference between the net disposal
proceeds and the carrying amount of the asset,
is included in profit or loss in the year the asset
is derecognised.
(o) Goodwill
Goodwill acquired on a business combination is
initially measured at cost, being the excess of
the consideration transferred for the business
combination over the Group’s interest in the net fair
value of the acquiree’s identifiable assets, liabilities
and contingent liabilities.
Following initial recognition, goodwill is measured
at cost less any accumulated impairment losses.
Goodwill is reviewed for impairment, annually,
or more frequently, if events or changes in
circumstances indicate that the carrying value
may be impaired.
As at the acquisition date, any goodwill acquired is
allocated to each of the cash-generating units that are
expected to benefit from the combination’s synergies.
Acquired from a business combination
Intangible assets from a business combination are
capitalised at fair value as at the date of acquisition.
Following initial recognition, the cost model is applied
to the class of intangible assets.
Software acquired not as part of a business
combination
Costs incurred in developing products or systems
and costs incurred in acquiring software and licenses
that will contribute to future period financial benefits
through revenue generation and/or cost reduction are
capitalised to software and systems.
The useful lives of these intangible assets are
assessed to be finite.
Where amortisation is charged on assets with finite
lives, this expense is taken to the profit and loss in the
Consolidated Statement of Comprehensive Income in
the expense category ‘depreciation and amortisation’.
Intangible assets are tested for impairment where
an indicator of impairment exists, and, in the case of
indefinite life intangibles, annually, either individually
or at the cash-generating unit level. Useful lives are
also examined on an annual basis and adjustments,
where applicable, are made on a prospective basis.
Impairment is determined by assessing the
recoverable amount of the cash-generating unit
to which the goodwill relates.
A summary of the policies applied to the Group’s
intangible assets is as follows:
Item
Method
Client
contracts
and
relationships
Based on projected cash
flows over estimated useful
lives, currently ranging over
two - three years
Internally
generated/
acquired
Acquired
Intellectual
Property
5.00% - straight line
Acquired
Software
40.00% - straight line
Acquired
Where the recoverable amount of the cash-generating
unit is less than the carrying amount, an impairment
loss is recognised. This impairment loss is recorded
in administration expenses.
Where goodwill forms part of a cash-generating unit
and part of the operation within that unit is disposed,
the goodwill associated with the disposed operation
is included in the carrying amount of the operation
when determining the gain or loss on disposal of
the operation.
Disposed goodwill in this circumstance is measured
on the basis of the relative values of the disposed
operation and the portion of the cash-generating unit
retained.
60
61
CTM Annual Report 2013CTM Annual Report 2013 Gains or losses arising from the derecognition of
an intangible asset are measured as the difference
between the net disposal proceeds and the carrying
amount of the asset and are recognised in the
profit and loss in the Consolidated Statement
of Comprehensive Income when the asset is
derecognised.
For an asset that does not generate largely
independent cash inflows, the recoverable amount
is determined for the cash-generating unit to which
the asset belongs.
If any such indication exists and where the carrying
values exceed the estimated recoverable amount,
the assets or cash-generating units are then written
down to their recoverable amount.
(q) Impairment of non-financial assets, other than
goodwill and intangible assets
At each reporting date, the Group assesses whether
there is an indication that an asset may be impaired.
Where an indicator of impairment exists, the Group
makes a formal estimate of recoverable amount.
Where the carrying amount of an asset exceeds its
recoverable amount, the asset is considered impaired
and is written down to its recoverable amount.
Recoverable amount is the greater of fair value less
costs to sell and value in use. It is determined for
an individual asset, unless the asset’s value in use
cannot be estimated to be close to its fair value less
costs to sell and it does not generate cash inflows
that are largely independent of those cash flows from
other assets or groups of assets, in which case, the
recoverable amount is determined for the cash-
generating unit to which the asset belongs.
In assessing value in use, the estimated cash flows
are discounted to their present value using a pre-tax
discount rate that reflects current market assessments
of the time value of money and the risks specific to
the asset.
goods and services. These amounts are unsecured
and are paid within terms ranging from 7 to 30 days
from recognition.
Client creditors result from provision of travel services
and products to clients. Trade payables result from
other activities required to provide those travel
services, such as corporate services.
(s) Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at
the fair value of consideration received less directly
attributable transaction costs.
After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised
cost using the effective interest method.
Borrowings are classified as current liabilities
unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after
the reporting date.
Borrowing costs
Borrowing costs are recognised as an expense
using the effective interest method. The Group
does not currently hold qualifying assets but,
if it did, the borrowing costs directly associated
with this asset would be capitalised, including
any other associated costs directly attributable
to the borrowing and temporary investment
income earned on the borrowing.
Borrowings are removed from the Consolidated
Statement of Financial Position when the obligation
specified in the contract is discharged, cancelled or
expired. The difference between the carrying amount
of a financial liability that has been extinguished or
transferred to another party and the consideration
paid, including any non-cash assets transferred or
liabilities assumed, is recognised in profit or loss as
other income or finance costs.
(r) Trade and other payables
Trade and other payables and client creditors are
carried at original invoice amount and represent
liabilities for goods and services provided to the
Group to the end of the financial year that are unpaid
and arise when the Group becomes obliged to make
future payments in respect of the purchase of these
Where the terms of a financial liability are
renegotiated and the entity issues equity instruments
to a creditor to extinguish all or part of the liability
(debt for equity swap), a gain or loss is recognised
in profit or loss, which is measured as the difference
between the carrying amount of the financial liability
and the fair value of the equity instruments issued.
(t) Financial guarantee contracts
Financial guarantee contracts are recognised as a
financial liability at the time the guarantee is issued.
The liability is initially measured at fair value and,
subsequently, at the higher of the amount determined
in accordance with AASB 137 Provisions, Contingent
Liabilities and Contingent Assets and the amount
initially recognised less cumulative amortisation,
where appropriate.
The fair value of financial guarantees is determined
as the present value of the difference in net cash
flows between the contractual payments under the
debt instrument and the payments that would be
required without the guarantee, or the estimated
amount that would be payable to a third party for
assuming the obligations.
Where guarantees in relation to loans or other
payables of subsidiaries or associates are provided
for no compensation, the fair values are accounted
for as contributions and recognised as part of the
cost of the investment.
(u) Provisions
Provisions are recognised when the Group has
a present legal or constructive obligation as a
result of a past event, it is probable that an outflow
of resources embodying economic benefits will
be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
Provisions are measured at the present value of
management’s best estimate of the expenditure
required to settle the present obligation at the end
of the reporting period. The discount rate used to
determine the present value is a pre-tax rate that
reflects current market assessments of the time
value of money and the risks specific to the liability.
The increase in the provision due to the passage
of time is recognised as interest expense.
Where the Group expects some or all of a provision
to be reimbursed, for example, under an insurance
contract, the reimbursement is recognised as a
separate asset, but only when the reimbursement is
virtually certain. The expense relating to any provision
is presented in the profit and loss in the Consolidated
Statement of Comprehensive Income, net of any
reimbursement.
If the effect of the time value of money is material,
provisions are determined by discounting the
expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value
of money and, where appropriate, the risks specific
to the liability.
Where discounting is used, the increase in the
provision due to the passage of time is recognised
as a finance cost.
(v) Employee Benefits
(i) Short term obligations
Liabilities for wages and salaries including non-
monetary benefits, expected to be settled within
12 months of the reporting period, are recognised in
other payables and accruals in respect of employees’
services up to the reporting date. Liabilities for annual
leave and accumulated sick leave, expected to be
settled within 12 months of the reporting period, are
recognised in the provision for employee benefits in
respect of employees’ services up to the reporting
date. They are measured at the amounts expected
to be paid when the liabilities are settled. Liabilities
for non-accumulated sick leave are recognised when
the leave is taken and are measured at the rates
paid or payable.
(ii) Other long term obligation
Liabilities for long service leave are recognised in
the provision for employee benefits and measured
at the present value of expected future payments
to be made in respect of services provided by
the employees up to the reporting date, using the
projected unit credit method. Consideration is given
to the expected future wage and salary levels,
experience of employee departures, and periods of
service. Expected future payments are discounted
using market yields at the reporting date on national
government bonds, with terms to maturity and
currencies that match, as closely as possible,
the estimated future cash outflows.
(iii) Retirement benefit obligations
Contributions to defined contribution funds are
recognised as an expense as they become payable.
Prepaid contributions are recognised as an asset to
the extent that a cash refund or reduction in the future
payments is available.
62
63
CTM Annual Report 2013CTM Annual Report 2013 Management Limited under the tax consolidation
legislation. The funding amounts are determined
by reference to the amounts recognised in the
wholly-owned entities’ financial statements.
The amounts receivable/payable under the tax
funding agreement are due upon receipt of the
funding advice from the head entity, which is issued
as soon as practicable after the end of each financial
year. The head entity may also require payment of
interim funding amounts, to assist with its obligations
to pay tax instalments.
3. SEGMENT REPORTING
(a) Description of segments
The operating segments are based on the reports
reviewed by the group of key senior managers
that comprise the steering committee which makes
strategic decisions.
The group of key senior managers considered to
be the ‘Chief Operating Decision Makers’ (“CODM”)
include Jamie Pherous (MD), Laura Ruffles (CEO
A&NZ) and Steve Fleming (CFO).
Assets or liabilities arising under tax funding
agreements with the tax consolidated entities
are recognised as current amounts receivable
from or payable to other entities in the Group.
Any difference between the amounts assumed
and amounts receivable or payable under the
tax funding agreement are recognised as a
contribution to or distribution from wholly-owned
tax consolidated entities.
The CODM has identified two reportable segments,
being Travel Services North America and Travel
Services Australia & New Zealand. Performance for
these two segments is monitored separately since
the identification of the Travel Services North America
segment, as a result of the business acquisitions
during 2013 (refer Note 22).
There are currently no non-reportable segments.
(iii) Financial guarantees
Where the parent entity has provided financial
guarantees in relation to loans and payables of
subsidiaries for no compensation, the fair values of
these guarantees are accounted for as contributions
and recognised as part of the cost of the investment.
(iv) Bonus plans
The Group recognises a provision for future
bonus payments where it is contractually obliged
or where there is a past practice that has created
a constructive obligation.
(v) Termination benefits
Termination benefits are payable when employment
is terminated before the normal retirement date,
or when an employee accepts voluntary redundancy
in exchange for these benefits. The Group recognises
termination benefits when it is demonstrably
committed to either terminating the employment
of current employees according to a detailed formal
plan without possibility of withdrawal, or providing
termination benefits as a result of an offer made
to encourage voluntary redundancy. Benefits falling
due more than 12 months after reporting date are
discounted to present value.
(w) Contributed Equity
Ordinary shares are classified as equity. Incremental
costs directly attributable to the issue of new shares
or options are shown in equity as a deduction, net of
tax, from the proceeds.
(x) Dividends
Provision is made for the amount of any dividend
declared, being appropriately authorised and no
longer at the discretion of the entity, on or before
the end of the financial year but not distributed
at balance dates.
Provisions are measured at the present value
of management’s best estimate of the expenditure
required to settle the present obligation at the
end of the reporting period.
(y) Earnings per share
Basic earnings per share are calculated as net profit
attributable to members of the parent, adjusted to
exclude any costs of servicing equity (other than
dividends) divided by the weighted average number
or ordinary shares, adjusted for any bonus element.
Diluted earnings per share are calculated as net profit
attributable to members of the parent, divided by the
weighted average number or ordinary shares and
dilutive potential ordinary shares, adjusted for any
bonus element, and adjusted for:
■ Costs of servicing equity (other than dividends);
■ The after tax effect of dividends and interest
associated with dilutive potential ordinary shares
that have been recognised as expenses; and
■ Other non-discretionary changes in revenues or
expenses during the period that would result from
the conversion into potential ordinary shares.
(z) Parent entity financial information
The financial information for the parent entity,
Corporate Travel Management Limited, disclosed in
Note 25, has been prepared on the same basis as the
consolidated financial statements, except as follows:
(i) Investments in subsidiaries
Investments in subsidiaries are accounted for at
cost in the financial statements of Corporate Travel
Management Limited. Dividends received from
associates are recognised in the parent entity’s profit
or loss, rather than being deducted from the carrying
amount of these investments.
(ii) Tax consolidation legislation
Corporate Travel Management Limited and its
wholly-owned Australian controlled entities have
implemented the tax consolidation legislation.
The head entity, Corporate Travel Management
Limited and the controlled entities in the tax
consolidated group account for their own current
and deferred tax amounts. These tax amounts are
measured as if each entity in the tax consolidated
group continues to be a stand-alone taxpayer
in its own right.
In addition to its own current and deferred tax
amounts, Corporate Travel Management Limited
also recognises the current tax liabilities or assets
and the deferred tax assets arising from unused
tax losses and unused tax credits assumed from
controlled entities in the tax consolidated group.
The entities have also entered into a tax funding
agreement under which the wholly-owned entities
fully compensate Corporate Travel Management
Limited for any current tax payable assumed and
are compensated by Corporate Travel Management
Limited for any current tax receivable and deferred
tax assets relating to unused tax losses or unused
tax credits that are transferred to Corporate Travel
64
65
CTM Annual Report 2013CTM Annual Report 2013 (b) Segment information provided to the Chief
Operating Decision Makers
The CODM assesses the performance of the
operating segments based on a measure of adjusted
EBITDA. This measurement basis excludes the
effects of the costs of acquisitions and any acquisition
related adjustments during the year.
The segment information provided to the CODM for
the reportable segments for the year ended 30 June
2013 is as follows:
2013
Travel Services
North America
Revenue from the sale of travel services
Revenue from other sources
Revenue from external parties
Adjusted EBITDA
Interest Revenue
Interest Expense
Depreciation and amortisation
Income tax expense
$’000
10,888
10
10,898
1,684
-
214
259
485
Travel Services
Australia &
New Zealand
$’000
Unallocated/
Eliminated
$’000
67,492
574
68,066
19,314
201
510
1,820
4,503
-
-
-
-
-
-
-
-
Total
$’000
78,380
584
78,964
20,998
201
724
2,079
4,988
Total segment assets
36,772
90,610
(6,286)
121,096
83
31,828
29,231
3,083
43,886
18,880
-
-
-
3,166
75,714
48,111
Total assets includes:
Non-current assets
- Plant and equipment
- Intangibles
Total segment liabilities
66
2012
Revenue from the sale of travel services
Revenue from other sources
Revenue from external parties
Adjusted EBITDA
Interest Revenue
Interest Expense
Depreciation and amortisation
Income tax expense
Total segment assets
Total assets includes:
Non-current assets
- Plant and equipment
- Intangibles
Total segment liabilities
During 2012, there was only one reportable segment
being Travel Services Australia & New Zealand.
Travel Services
Australia &
New Zealand
$’000
Unallocated/
Eliminated
$’000
64,661
890
65,551
17,514
274
60
1,400
4,982
83,614
2,572
42,744
30,605
-
-
-
-
-
-
-
-
-
-
-
-
Total
$’000
64,661
890
65,551
17,514
274
60
1,400
4,982
83,614
2,572
42,744
30,605
67
CTM Annual Report 2013CTM Annual Report 2013
(c) Other segment information
(ii) Adjusted EBITDA
4. REVENUE
(i) Segment Revenue
The revenue from external parties reported to the
CODM is measured in a manner consistent with
that in the Statement of Comprehensive Income.
The entity is domiciled in Australia. The amount
of its revenue from external customers in Australia
and other countries is included in the table following.
Segment revenues are allocated based on the
location of the CTM offices rather than by client
location or travel destination.
No clients are deemed to be major clients for
the purpose of disclosing any reliance on major
customers.
Australia
North America
New Zealand
Revenue from external customers
2013
$’000
66,863
10,898
1,203
78,964
A reconciliation of adjusted EBITDA to operating profit
before income tax is provided as follows:
2013
$’000
2012
$’000
Adjusted EBITDA
20,998
17,514
Interest revenue
Finance costs
201
(724)
274
(60)
Depreciation
(1,136)
(1,056)
Amortisation
(943)
Acquisition costs
(1,014)
(344)
452
17,382
16,780
Profit before
income tax from
continuing
operations
(iii) Segment assets
The amounts provided to the CODM with respect
to total assets are measured in a manner consistent
with that of the financial statements. These assets are
allocated based on the operations of the segment and
the physical location of the asset.
The total of non-current assets other than financial
instruments and deferred tax assets located in
Australia and other countries is included in the
following table.
Australia
North America
New Zealand
Non-current assets
2013
$’000
46,215
31,910
755
78,880
68
Revenue from the sale of travel services
Revenue from other sources
Rental income
Interest
Other revenue
Total Revenue
5. OTHER INCOME
Re-measurement income of the fair value of
contingent consideration - scrip earn-out - Note 22
6. EXPENSES
Profit before income tax includes the following specific expenses:
Depreciation and amortisation
Depreciation of non-current assets – plant and equipment - Note 14
Amortisation of non-current assets – intangibles - Note 15
Finance costs
Bank loans
Finance charges under hire purchase contracts
Net exchange differences
Other interest
Other expense disclosures
Defined contribution superannuation expense
Rental expense relating to operating leases
Minimum lease payments – operating leases
Net loss on the disposal of plant and equipment and intangible assets
2013
$’000
78,380
67
201
316
584
2012
$’000
64,661
274
274
342
890
78,964
65,551
2013
$’000
-
2013
$’000
1,136
943
2,079
332
2
-
390
724
2,808
2,157
32
2012
$’000
683
2012
$’000
1,056
344
1,400
36
7
(10)
27
60
2,671
1,637
-
69
CTM Annual Report 2013CTM Annual Report 2013 7. INCOME TAX
Income tax expense
The major components of income tax expense are:
Statement of Comprehensive Income
Current income tax
Current income tax charge
Adjustment in respect of current income tax of previous years
Deferred income tax
Relating to origination and reversal of temporary differences
Income tax expense reported in the Consolidated
Statement of Comprehensive Income
Decrease in deferred tax assets
Increase in deferred tax liabilities
Accounting profit before income tax
At the Group’s statutory income tax rate of 30% (2012: 30%)
Tax effect of amounts which are not deductible/(assessable)
in calculating taxable income:
Non-deductible amounts
Other amounts
Recognition of temporary differences previously not brought to account
Difference in overseas tax rates
Adjustments for current tax of prior periods
Income tax expense
70
2013
$’000
2012
$’000
2013
$’000
2012
$’000
Deferred income tax
Deferred tax assets
Provisions and expenses not yet deductible
Tax losses carried forward
Other
Set-off against deferred tax liabilities
Net deferred tax assets
Deferred tax liabilities
Difference tax to accounting depreciation/amortisation
Accrued income assessable in year of receipt
Set-off against deferred tax assets
Net deferred tax liabilities
Deferred tax assets expected to be recovered within 12 months
Deferred tax assets expected to be recovered after more than 12 months
Deferred tax liabilities expected to be settled within 12 months
Deferred tax liabilities expected to be settled after more than 12 months
1,992
26
32
2,050
(2,050)
-
191
5,063
5,254
(2,050)
3,204
1,651
399
2,050
5,075
179
5,254
4,250
(523)
1,261
4,988
211
1,050
1,261
17,382
5,215
26
2
28
176
92
(523)
(255)
4,988
3,484
(35)
1,533
4,982
48
1,485
1,533
16,780
5,034
(85)
18
(67)
50
-
(35)
15
4,982
1,726
393
41
2,160
(2,160)
-
32
3,989
4,021
(2,160)
1,861
1,965
195
2,160
4,021
-
4,021
71
CTM Annual Report 2013CTM Annual Report 2013 At 1 July
$’000
1,726
393
41
2,160
1,617
-
53
1,670
At 1 July
$’000
32
3,989
4,021
76
2,400
2,476
Deferred tax assets
2013
Provisions and expenses not
yet deductible
Tax losses carried forward
Other
2012
Provisions and expenses not
yet deductible
Tax losses carried forward
Other
Deferred tax liabilities
2013
Difference tax to accounting
depreciation/amortisation
Accrued income assessable in
year of receipt
2012
Difference tax to accounting
depreciation/amortisation
Accrued income assessable in
year of receipt
Transfer
from
income tax
receivable
$’000
(Charged)/
credited
in year via
P&L
$’000
(Charged)/
credited
in year via
equity
$’000
Acquisition
of
subsidiaries
At 30 June
$’000
$’000
-
-
-
-
-
-
-
-
165
(367)
(9)
(211)
(36)
-
(12)
(48)
101
-
-
101
88
-
-
88
-
-
-
-
57
393
-
450
1,992
26
32
2,050
1,726
393
41
2,160
Transfer
from
income tax
receivable
$’000
(Charged)/
credited
in year via
P&L
$’000
(Charged)/
credited
in year via
equity
$’000
Acquisition
of
subsidiaries
At 30 June
$’000
$’000
183
-
183
-
-
-
(24)
1,074
1,050
(104)
1,589
1,485
-
-
-
-
-
-
-
-
-
60
-
60
191
5,063
5,254
32
3,989
4,021
Tax consolidation
8. EARNINGS PER SHARE
The following information reflects the income
and share data used in the basic and diluted
earnings per share computations:
2013
$’000
2012
$’000
12,394
11,798
2013
Shares
2012
Shares
75,869,113
72,445,981
Net profit attributable
to ordinary equity
holders of the parent
Weighted average
number of ordinary
shares for basic and
diluted earnings
per share
Corporate Travel Management Limited and its
100% owned Australian resident subsidiaries have
formed a tax consolidated group with effect from 1
July 2008. The accounting policy in relation to this
tax consolidation is set out in Note 2(m). Corporate
Travel Management Limited is the head entity of
the tax consolidated group. Members of the Group
have entered into a tax sharing agreement in order
to enable Corporate Travel Management Limited to
allocate income tax expense to the wholly owned
subsidiaries on a pro-rata basis. In addition, the
agreement provides for the allocation of income tax
liabilities amongst the entities should the head entity
default on its tax payment obligations.
Tax effect accounting by members of the
tax consolidated group
Members of the tax consolidated group have
entered into a tax funding agreement. The tax
funding agreement provides for the allocation of
current taxes to members of the tax consolidated
group in accordance with their accounting profit
for the period, while deferred taxes are allocated
to members of the tax consolidated group in
accordance with the principles of AASB 112
Income Taxes. Allocations under the tax funding
agreement are made at the end of each quarter.
The allocation of taxes under the tax funding
agreement is recognised as an increase/decrease
in the subsidiaries’ inter-company accounts with the
tax consolidated group head company, Corporate
Travel Management Limited.
72
73
CTM Annual Report 2013CTM Annual Report 2013 9. DIVIDENDS PAID AND PROPOSED
10. CASH AND CASH EQUIVALENTS
Ordinary shares
Final franked dividend declared or paid for the year ended
30 June 2012 of 6 cents (2011: 5 cents) per fully paid share.
Interim franked dividend for the year ended 30 June
2013 of 4 cents (2012: 3 cents) per fully paid share.
Approved by the Board of Directors on 28 August 2013
(not recognised as a liability as at 30 June 2013)
Final franked dividend for the year ended 30 June
2013 of 6.5 cents (2012: 6 cents) per fully paid share.
* This dividend does not include shares issued post
balance date as part of the R&A Travel contingent
consideration payment, refer Note 22.
** This dividend applies to all shares including the post
balance date share issue, refer Note 20
Franking credit balance
The amount of franking credits available for the subsequent financial year are:
▪ Franking account balance as at the end of the financial year
at 30% (2012: 30%)
▪ Plus franking credits that will arise from the income tax payable/
(the receipt of income tax receivable) as at the end of the financial year
Equals the amount of franking credits available for future reporting periods
▪ Less impact on the franking account of dividends proposed or declared
before the financial report was authorised for issue but not recognised as
a distribution to equity holders during the period
2013
$’000
2012
$’000
4,498
3,572
2,999
7,497
2,241
5,813
5,075*
4,498**
2013
$’000
6,289
663
6,952
2012
$’000
6,675
2,096
8,771
(2,175)
(1,928)
Balance of franking credits available for subsequent years
4,777
6,843
74
Current Assets
Cash at bank and on hand
Client accounts (Note 2(k))
2013
$’000
1,265
12,270
13,535
2012
$’000
5,685
6,525
12,210
Cash at bank earns interest at floating rates based on
daily bank deposit rates: 2013: 0.00%-3.20% (2012:
0.00%-3.50%).
The client accounts earn interest at floating rates
based on daily bank deposit rates: 2013: 0.00%-1.65%
(2012: 0.00%-5.20%).
The weighted average interest rate for the year was
1.64% (2012: 1.74%).
A bank overdraft facility of $1,000,000 (2012: $125,000) was
in place but unused at 30 June 2013. The overdraft incurs
interest at floating rates based on daily bank overdraft rates:
2013: 3.56% (2012: 11.21%).
Security for the bank overdrafts is detailed in Note 18.
Reconciliation of profit after income tax to net cash flows from operating activities
Profit for the year
Adjustments for:
Depreciation and amortisation
Appreciation in value of investments
Make-good provision accretion
Non-cash interest
Net exchange differences
Re-measurement of the fair value of contingent consideration
Net loss on disposal of non-current assets
Changes in operating assets and liabilities
(Increase) in trade and other receivables
(Increase) in prepayments
Decrease in deferred tax balances
Decrease in current tax liability/(receivable)
Increase in payables and provisions
Net cash flow from operating activities
Disclosure of financing facilities
Refer to Note 18 and Note 21.
2013
$’000
2012
$’000
12,394
11,798
2,079
(2)
3
168
(106)
-
32
(678)
(261)
1,342
(1,544)
2,543
15,970
1,400
(1)
16
-
(10)
(683)
-
(12,401)
(93)
1,532
478
5,452
7,488
75
CTM Annual Report 2013CTM Annual Report 2013 11. TRADE AND OTHER RECEIVABLES
Trade receivables (i)
Client receivables (i)
Allowance for doubtful debts
Other receivables
(i) Trade and client receivables are non-interest bearing
and are generally on terms ranging from 1 to 30 days.
2013
$’000
19,975
10,486
(2,970)
27,491
484
27,975
2012
$’000
15,526
11,100
(1,707)
24,919
757
25,676
Allowance for doubtful debts
As at 30 June 2013, trade receivables of the
Group with a nominal value of $2,970,000 (2012:
$1,707,000) were impaired. The amount of the
provision is $2,970,000 (2012: $1,707,000).
An allowance for doubtful debts is made when there
is objective evidence that a receivable is impaired.
The amount of the allowance has been measured
as the difference between the carrying amount of
the receivables and the estimated future cash flows
expected to be received from the relevant debtor.
The ageing of these trade and client receivables is as follows:
0-30 days
31-60 days
60+ days
Balance at 30 June
Movements in provision for doubtful debts were as follows:
At 1 July
Charge/(release) for the year
Amounts written off
Movements through acquisitions of entities
Balance at 30 June
As of 30 June 2013, trade receivables of $6,481,000
(2012: $6,914,000) were past due but not impaired.
Operating units are following up on these receivables
with the relevant debtors and are satisfied that payment
will be received in full.
2013
$’000
297
130
2,543
2,970
1,707
3,296
(2,336)
303
2,970
2012
$’000
194
99
1,414
1,707
1,949
1,884
(2,352)
226
1,707
The ageing analysis of these trade and client receivables is as follows:
0-30 days
31-60 days
60+ days
Balance at 30 June
2013
$’000
2,489
659
3,333
6,481
2012
$’000
3,306
811
2,797
6,914
Other balances within trade, client and other
receivables do not contain impaired assets and are
not past due. It is expected that these other balances
will be received when due.
the fair value of receivable. Collateral is not held
as security, nor is it the Group’s policy to transfer
(on-sell) receivables to special purposes entities.
Fair value and credit risk
Due to the short term nature of these receivables,
their carrying value is assumed to approximate their
fair value. The maximum exposure to credit risk is
Market risk
There is not considered to be any additional
risk due to the market.
Interest rate risk
Detail regarding interest rate risk exposure
is disclosed in Note 21.
12. FINANCIAL ASSETS AT FAIR VALUE
Current Assets
Shares in unlisted companies
Shares in listed companies
13. OTHER CURRENT ASSETS
Prepayments
2013
$’000
6
12
18
2012
$’000
6
10
16
688
396
76
77
CTM Annual Report 2013CTM Annual Report 2013 14. PLANT AND EQUIPMENT
Plant and
equipment
under lease
$’000
Plant and
equipment
owned
$’000
Total plant
and
equipment
$’000
15. INTANGIBLE ASSETS
Client
contracts and
relationships
$’000
Intellectual
property
Software
Goodwill
$’000
$’000
$’000
Total
intangible
assets
$’000
2013
Cost
Accumulated amortisation/depreciation
At 1 July, net of accumulated amortisation/depreciation
Additions
Additions through the acquisition of entities/businesses
(Note 22)
Transfers/reallocations
Transfers to intangibles (Note 15)
Disposals
Amortisation/depreciation charge for the year
Change due to changes in foreign currency exchange
rates
At 30 June, net of accumulated amortisation/
depreciation
2012
Cost
Accumulated amortisation/depreciation
At 1 July, net of accumulated amortisation/depreciation
Additions
Additions through the acquisition of entities/businesses
(Note 22)
Disposals
Amortisation/depreciation charge for the year
At 30 June, net of accumulated amortisation/
depreciation
-
-
-
109
-
-
(61)
-
(44)
(4)
-
-
160
(51)
109
117
-
-
-
(8)
109
6,054
(2,888)
3,166
2,463
2,302
50
61
(526)
(59)
(1,132)
7
3,166
5,499
(3,036)
2,463
1,231
2,245
35
-
(1,048)
2,463
6,054
(2,888)
3,166
2,572
2,302
50
-
(526)
(103)
(1,136)
7
3,166
5,659
(3,087)
2,572
1,348
2,245
35
-
(1,056)
2,572
Leased assets and assets under hire purchase agreements
are pledged as security for the related finance lease and
hire purchase liabilities.
Additions of $66,000 (2012: $141,000) relate to a lease
make-good asset recognised under AASB 137 Provisions
Contingent Liabilities and Contingent Assets.
No additions during the year (2012: $nil) were financed
under finance lease agreements.
2013
Cost
Accumulated amortisation
At 1 July, net of accumulated
amortisation
Additions
Additions through the acquisition
of entities/businesses (Note 22)
Transfers to intangibles (Note 14)
Disposals
Amortisation charge for the year
Change due to changes in foreign
currency exchange rates
At 30 June, net of accumulated
amortisation
2012
Cost
Accumulated amortisation
At 1 July, net of accumulated
amortisation
Additions
Additions through the acquisition
of entities/businesses (Note 22)
Disposals
Amortisation charge for the year
Change due to changes in foreign
currency exchange rates
At 30 June, net of accumulated
amortisation
1,762
(1,003)
759
145
-
897
-
-
(365)
82
759
761
(616)
145
223
-
200
-
(278)
-
145
189
(110)
79
88
-
-
-
-
(9)
-
79
189
(101)
88
98
-
-
-
(10)
-
88
2,691
(691)
2,000
759
1,282
-
526
-
(569)
2
73,092
(216)
72,876
41,752
-
28,104
-
-
3,020
77,734
(2,020)
75,714
42,744
1,282
29,001
526
-
(943)
3,104
2,000
72,876
75,714
1,248
(489)
759
100
701
14
-
(56)
-
759
41,942
(190)
41,752
44,140
(1,396)
42,744
28,513
28,934
-
701
13,229
13,443
-
-
10
-
(344)
10
41,752
42,744
78
79
CTM Annual Report 2013CTM Annual Report 2013
16. IMPAIRMENT TESTING OF GOODWILL
For the purposes of impairment testing, the cash-
generating unit has been defined as the lowest level
of travel services operations to which goodwill relates,
where individual cash flows can be ascertained for
the purposes of discounting future cash flows.
The carrying amount of Goodwill allocated to the cash-generating unit:
Travel Services – North America
Travel Services – Australia & New Zealand (A&NZ)
The recoverable amount of the cash generating unit has
been determined based on financial budgets set for the
next financial year and management cash flow projections
for subsequent years.
2013
$’000
31,073
41,803
72,876
2012
$’000
-
41,752
41,752
Travel Services
Travel Services
North America
A&NZ
2013
Pre-tax discount rate applied to the cash flow projection
12.75%
15.35%
Cash flows beyond the next financial year, up to year 5,
are extrapolated using a growth rate of:
Revenue; and
Operating costs.
Terminal value
2012
Pre-tax discount rate applied to the cash flow projection
Cash flows beyond the next financial year, up to year 5,
are extrapolated using a growth rate of:
Revenue; and
Operating costs.
Terminal value
80
3.5%
3.5%
3.0%-4.0%
3.0%-4.0%
6 times
6 times
Travel Services
Travel Services
North America
A&NZ
-
-
-
-
14.83%
3.5%
3.0%-4.0%
6 times
Sensitivity to changes in assumptions
Management recognises that there are various
reasons that the estimates used in these assumptions
may vary. For cash-generating units, there are
possible changes in key assumptions that could
cause the carrying value of the unit to exceed its
recoverable amount. The changes required to each
of the key assumptions to cause the carrying value
of a unit to exceed its recoverable amount are shown
as follows in the table below:
Key assumptions used in value in use
calculations for the years ended 30 June
2013 and 30 June 2012
The following key assumptions were applied to
the cash flow projections when determining the
value in use:
■ Budgeted revenue values – the basis used to
determine the value assigned to the budgeted
sales volume is the average value achieved
in the year immediately before the budgeted
year, adjusted for growth and other known
circumstances.
■ Budgeted operating expenses – the basis used
to determine the value assigned to the budgeted
costs is the average value achieved in the year
immediately before the budgeted year, adjusted
for growth and other known circumstances.
■ Terminal value – calculated based on a multiple
of estimated Year 5 Earnings before interest,
tax, depreciation and amortisation.
Assumption
Possible change
considered
Change required to indicate
an impairment
Growth rates – Travel Services North America:
Revenue
Reduction in yield rates, client retention
Decrease to (1.25%)
Operating costs
Higher labour and/or other support costs
Increase of 8.7% to 11.67%
Growth rates – Travel Services A&NZ:
Revenue
Reduction in yield rates, client retention
Decrease to (2.1%)
Operating costs
Higher labour and/or other support costs
Increase to 9.2%-12.6%
81
CTM Annual Report 2013CTM Annual Report 2013
17. TRADE AND OTHER PAYABLES
Current
Trade payables (i)
Client creditors (i)
Other payables and accruals
Contingent consideration payable – Note 22
Non-current
Other payables and accruals
Contingent consideration payable – Note 22
(i) Trade payables and client creditors are non-interest
bearing and are normally settled on terms ranging from
7 to 30 days.
Fair value
Due to the short term nature of these payables,
their carrying value is assumed to approximate
their fair value.
18. BORROWINGS
Current
Interest bearing borrowings
Obligations under hire purchase contracts
Loans (i)
Non-current
Interest bearing borrowings
Loans (i)
(i) Loans
The loans, as part of the overall facilities including term
loans, overdraft, merchant facilities, and bank guarantees,
are fully secured by a fixed and floating charge over all
existing and future assets and undertakings of Corporate
Travel Management Group Pty Ltd.
The loan balance held at 30 June 2013 consists of
an interest only facility of $2.9m. The remaining loans
have a repayment schedule.
82
2013
$’000
1,462
16,671
4,967
2,948
26,048
449
11,845
12,294
Interest rate and liquidity risk
Information regarding interest rate and
liquidity risk exposure is set out in Note 21.
Maturity
2014
2015
2013
$’000
-
3,192
3,192
157
157
2012
$’000
949
14,486
3,475
4,017
22,927
266
-
266
2012
$’000
52
787
839
-
-
The interest rates applicable to these facilities
are 3.86%-5.16% (2012: 7.96%-9.51%).
The weighted average interest rate for all borrowings,
including the overdraft during the year, was 4.03%
(2012: 8.06%).
Fair values
Financial facilities
The carrying amount of the Group’s current and
non-current borrowings approximate their fair value.
The fair values have been calculated by discounting
the expected future cash flows at prevailing market
interest rates varying from 3.86%-5.16% (2012:
7.96%-9.51%) depending on the type of borrowing.
In August 2012, the Group transitioned to new
facilities with the ANZ Bank, including term loans,
overdraft, merchant facilities and bank guarantees,
which were fully secured by a fixed and floating
charge over all existing and future assets and
undertakings of the Group.
Interest rate and liquidity risk
Details regarding interest rate and liquidity
risk are disclosed in Note 21.
19. PROVISIONS
At 1 July 2012
Arising during the year
Acquisition of subsidiary
Utilised
Changes due to change in foreign currency
Unused amounts reversed
Current 2013
Non-current 2013
Current 2012
Non-current 2012
Employee
entitlements
$’000
Make-good
provision
$’000
2,401
3,147
195
(3,293)
28
-
2,478
1,847
631
2,478
1,777
624
2,401
215
66
-
(60)
-
(35)
186
22
164
186
73
142
215
Total
$’000
2,616
3,213
195
(3,353)
28
(35)
2,664
1,869
795
2,664
1,850
766
2,616
Make-good provision
In accordance with the Group’s contractual obligations
under tenancy lease agreements, the Group is
required to restore the leased premises on the
expiry of the lease term.
The assumptions used to calculate the provision were
based on current assessments of the possible timing
of the restoration liability crystallising and on current
restoration costs being accreted at rates of 2.2%
to 2.7% (2012: 2.6% to 3.1%).
83
CTM Annual Report 2013CTM Annual Report 2013 20. CONTRIBUTED EQUITY, RESERVES AND
RETAINED EARNINGS
(a) Contributed equity
Ordinary shares
Issued and fully paid
2013
$’000
2012
$’000
47,856
34,344
Effective 1 July 1998, the Corporations’ legislation
abolished the concepts of authorised capital and
par value shares. Accordingly, the Group does not
have authorised capital nor par value in respect of its
issued shares.
of all surplus assets in proportion to the number
of and amounts paid up on shares held.
Ordinary shares entitle their holder to one vote, either
in person or by proxy, at a meeting of the Company.
Ordinary shares have the right to receive dividends
as declared and, in the event of winding up the
Company, to participate in the proceeds from the sale
Ordinary shares have no par value and the company
does not have a limited amount of authorised capital.
Opening balance as at 1 July 2011
Share split (i)
Shares issued (ii)
Total shares issued
At 30 June 2012
Shares issued (iii)
Shares issued (iv)
Shares issued (v)
Total shares issued
At 30 June 2013
Number of shares
70,370,000
1,075,800
3,255,800
4,331,600
74,701,600
269,420
2,439,024
671,140
3,379,584
78,081,184
$’000
25,548
2,000
6,796
8,796
34,344
526
9,765
3,221
13,512
47,856
(i) A total of 1,075,800 shares were issued on 4 August
2011, as part of the deferred consideration for the
Travelcorp business combination.
(iv) A total of 2,439,024 shares were issued on 5 March 2013,
as part of a share placement.
(ii) A total of 3,255,800 shares were issued on 27 February
2012, as part of a share placement.
v) A total of 671,140 shares were issued on 2 May 2013, as
part of the consideration for the TravelCorp LLC business
combination - refer Note 22.
(iii) A total of 269,420 shares were issued on 2 July 2012,
as part of the initial consideration for the R&A Travel Inc.
business combination - refer Note 22.
Capital management
(c) Retained earnings
The Group maintains a conservative funding structure
that allows it to meet its operational and regulatory
requirements, while providing sufficient flexibility to
fund future strategic opportunities.
The Group’s capital structure includes a mix of debt
(refer to Note 18), general cash (refer to Note 10) and
equity attributable to the parent’s equity holders.
When determining dividend returns to shareholders
the Board considers a number of factors, including
the Group’s anticipated cash requirements to fund its
growth and operational plans and current and future
economic conditions. The Group is not bound by
externally imposed capital requirements.
While payments may vary from time to time, according
to these anticipated needs, the Board’s current policy
is to return between 50% to 60% of net profit after tax
to shareholders.
Total borrowings
Total equity
Gearing ratio
2013
$’000
3,349
72,985
4.59%
2012
$’000
839
53,009
1.58%
(b) Foreign currency translation reserve
2013
$’000
2012
$’000
2013
$’000
Movements in retained earnings were as follows:
Balance 1 July
Net profit for the year
Dividends
Balance 30 June
18,668
12,394
(7,497)
23,565
2012
$’000
12,683
11,798
(5,813)
18,668
21. FINANCIAL RISK MANAGEMENT OBJECTIVES
AND POLICIES
The Group’s principal financial instruments comprise
deposits with banks, overdraft facilities and
borrowings.
The main purpose of these financial instruments is to
raise finance for the Group’s operations. The Group
has various other financial assets and liabilities,
such as trade receivables and trade payables, which
arise directly from its operations. It is, and has been
throughout the period under review, the Group’s
policy that no trading in financial instruments shall be
undertaken. The main risks arising from the Group’s
financial instruments are cash flow interest rate risk,
liquidity risk, credit risk and foreign exchange risk.
The Board reviews and agrees policies for managing
each of these risks which are summarised in this note.
The Group is not exposed directly to commodity
trading risks.
Movements in this reserve were as follows:
Balance 1 July
Net exchange
differences on
translation of foreign
operations
Balance 30 June
(3)
1,567
1,564
-
(3)
(3)
Details of the significant accounting policies and
methods adopted, including the criteria for recognition,
the basis of measurement and the basis on which
income and expenses are recognised, in respect of
each class of financial asset, financial liability and
equity instrument are disclosed in Note 2 to the
financial statements.
84
85
CTM Annual Report 2013CTM Annual Report 2013 Interest rate risk
The Group’s exposure to the risk of changes in market
interest rates relates primarily to the Group’s cash
and debt obligations with a floating interest rate and
the Group’s policy is to manage its interest exposure
described in this report. The level of debt is disclosed
in Note 18.
At balance date, the Group had the following mix of
financial assets and liabilities exposed to Australian
variable interest rate risk:
These movements in profit are due to higher/lower
interest costs from variable rate debt and cash
balances.
Credit risk
The Group trades only with recognised, creditworthy
third parties and the Group’s policy is that all clients
which wish to trade on credit terms are subject to
credit verification procedures and subsequent risk
limits which are set for each individual client in
accordance with the Group’s policies.
Financial Assets
Cash
Financial Liabilities
Overdraft
Borrowings
Net exposure
2013
$’000
2012
$’000
In addition, receivable balances are monitored on
an ongoing basis, with the result that the Group’s
exposure to bad debts is not considered to be
significant.
13,535
13,535
-
(3,349)
(3,349)
10,186
12,210
12,210
-
(839)
(839)
11,371
With respect to credit risk arising from the other
financial assets of the Group, which comprise cash
and cash equivalents, the Group’s exposure to credit
risk arises from default of the counter party, with a
maximum exposure equal to the carrying amount of
these instruments.
The Group trades only with recognised, creditworthy
third parties, and, as such, collateral is not requested
nor is it the Group’s policy to securitise its trade and
other receivables.
The Group constantly analyses its interest rate
exposure. Within this analysis, consideration is given
to potential renewals of existing positions, alternative
financing and the mix of fixed and variable interest
rates.
The following sensitivity analysis is based on the
interest rate risk exposures in existence at the
Statement of Financial Position date. At 30 June
2013, if interest rates had moved, as illustrated in the
following table, with all other variables held constant,
post tax profit would have been affected as follows:
The Group’s cash is held with the following financial
institutions:
■ Australia and New Zealand: ANZ Bank – AA credit
rating with Moody’s.
■ North America: Capital One Bank – A3 credit
rating with Moody’s.
Colorado Business Bank – un-rated.
Client and Trade receivables are held with
un-rated entities.
2013
$’000
Judgements of reasonably possible movements:
+2% (200 basis points)
- 2% (200 basis points)
143
(143)
2012
$’000
163
(163)
Liquidity risk
The Group’s objective is to maintain a balance
between continuity of funding and flexibility through
the use of bank overdrafts, bank loans and hire
purchase contracts.
The Group manages liquidity risk by monitoring
cash flows and estimating future operational draws
on cash reserves.
The following table reflects all contractually fixed
pay-offs, repayments and interest resulting from
recognised financial assets and liabilities as at
30 June 2013. No derivative financial instruments
are held and for other obligations, the respective
undiscounted cash flows for the respective upcoming
fiscal years are presented. Cash flows for financial
assets and liabilities without fixed amount or timing
are based on the conditions existing at 30 June 2013.
The remaining contractual maturities of the Group’s
financial liabilities are:
1 year or less
1-5 years
Over 5 years
Contractual Cashflows
Carrying amount
2013
$’000
28,372
9,375
-
37,747
2012
$’000
23,797
266
-
24,063
2013
$’000
28,372
9,091
-
37,463
2012
$’000
23,766
266
-
24,032
Foreign exchange risk
Foreign exchange risk arises from future commercial
transactions and recognised assets and liabilities
denominated in a currency that is not the Group’s
functional currency. The risk is measured using
sensitivity analysis and cash flow forecasting.
The Group’s exposure to foreign currency risk at the
end of the reporting period, expressed in Australian
dollar, was as follows:
2013
2012
USD
$’000
269
NZD
$’000
1,086
USD
$’000
-
NZD
$’000
1,019
Trade and other receivables
Based on the balances in the previous table,
movements in the Australian dollar by 10% against
the US and NZ dollars, with all other variables held
constant, would be considered immaterial.
86
87
CTM Annual Report 2013CTM Annual Report 2013
22. BUSINESS COMBINATIONS
R&A Travel Inc
On 2 July 2012, the Group acquired 100% of the
issued shares in R&A Travel Inc (R&A), a US based
travel management company. The initial cost of
the acquisition was $5,448,000 (US$5,390,000),
paid in cash and shares, with further contingent
consideration, payable as at 31 August 2013
and 31 August 2014, as set out in this note.
The potential undiscounted amounts of future
payments that the Group could be required to make,
in cash and shares, based on the financial criteria
relating to the earn-out periods 1 July 2012 to 30 June
2013 and 1 July 2013 to 30 June 2014, are as follows:
■ A multiple of EBITDA for the period, 1 July 2012
to 30 June 2013, reduced by the initial payments
made, ranging from $1(US$1), capped to a value
of $3,814,000 (US$3,960,000).
■ A multiple of EBITDA for the period, 1 July 2013
to 30 June 2014, reduced by the initial payments
made and the value of the first year clause above,
ranging from $1(US$1), capped to a value, over
the two years to 30 June 2014, of $3,814,000
(US$3,960,000).
■ To the extent that EBITDA for the year, 1 July
2013 to 30 June 2014, exceeds $1,637,000
(US$1,700,000), 50% of the excess which is
payable as Contingent Consideration.
At the acquisition date, the projected results for
the earn-out periods, 1 July 2012 to 30 June 2013
and 1 July 2013 to 30 June 2014, were assessed
to determine the acquisition date fair value of this
contingent consideration, as set out in the following
table. Any subsequent adjustment to the final
contingent consideration, based on actual results
as at 30 June 2013 and 30 June 2014, will be
reflected in the Statement of Comprehensive Income.
* $244,000 (US$250,000) deposit paid prior to 30 June
2012 and $4,677,000 (US$4,614,000) in cash and
$526,000 (US$526,000) in shares, paid on 2 July 2012.
** The contingent consideration has been accrued in
the balance sheet within Trade and Other Payables
classification.
The provisional fair values of the assets and liabilities
of the R&A business, acquired as at the date of
acquisition, are as follows:
Acquiree’s
carrying
amount
$’000
29
717
30
50
-
(858)
(115)
(147)
Fair value
$’000
29
717
30
50
186
(858)
(115)
39
9,232
9,271
Item
Cash and cash equivalents
Accounts receivable
Other assets
Fixed assets
Client intangibles
Trade and other payables
Provisions
Net identifiable assets/
(liabilities) acquired
Goodwill on acquisition
Net assets acquired
The consideration payable for the combination
effectively includes amounts in relation to the benefit
of expected synergies, revenue growth and the
assembled workforce of the acquiree, which has
resulted in goodwill of $9,232,000 (US$9,441,000).
The full value of the goodwill and client intangibles
is expected to be deductible for US tax purposes.
Purchase consideration:
Initial cash and shares paid/payable*
Acquisition date fair value contingent
consideration - earn-out **
Total acquisition date fair value
consideration
Acquisition related costs of $22,016 (June 12:
$89,616) are included in Administrative and
General Expenses classification in the Statement
of Comprehensive Income. The acquired business
contributed revenues of $9,558,430 and net profit
after tax of $873,574 to the Group for the period
2 July 2012 to 30 June 2013.
$’000
5,448
3,823
9,271
TravelCorp
On 1 May 2013, the Group acquired 100% of
the issued shares in TravelCorp LLC (TravelCorp),
a North American based travel management
company. The initial cost of the acquisition was
$10,275,000 (US$10,652,000), paid in cash
$7,054,000 (US$7,312,500) and shares $3,221,000
(US$3,340,000), with further contingent consideration
payable as at 31 August 2014 and 31 August 2015,
as set out in this note.
The potential undiscounted amounts of future
payments that the Group could be required to make,
in cash and shares, based on the financial criteria
relating to the earn-out periods, 1 July 2013 to 30
June 2014 and 1 July 2014 to 30 June 2015,
are as follows:
■ A multiple of EBITDA for the periods 1 July 2013
to 30 June 2014 and 1 July 2014 to 30 June 2015,
reduced by the payment made relating to the first
earn-out period, with the maximum payment being
a capped value of $3,581,000 (US$3,712,500).
■ A multiple of EBITDA for the periods, 1 July 2013
to 30 June 2014 and 1 July 2014 to 30 June 2015,
reduced by the payment made relating to the first
earn-out period, with the maximum payment being
a capped value of $5,570,560 (US$5,775,000).
At the acquisition date, the projected results for
the earn-out periods, 1 July 2013 to 30 June 2014
and 1 July 2014 to 30 June 2015, were assessed
to determine the acquisition date fair value of this
contingent consideration, as set out in the following
table. Any subsequent adjustment to the final
contingent consideration, based on actual results,
as at 30 June 2014 and 30 June 2015, will be
reflected in the Statement of Comprehensive Income.
Purchase consideration:
Initial cash and shares paid/payable*
Acquisition date fair value contingent
consideration - earn-out **
Total acquisition date fair value
consideration
$’000
10,275
8,883
19,158
* $7,054,000 (US$7,312,500) in cash and $3,221,000
(US$3,340,000) of shares paid on 1 May 2013.
** The contingent consideration has been accrued
in the balance sheet within the Trade and Other
Payables classification.
The provisional fair values of the assets and liabilities
of the TravelCorp business, acquired as at the date
of acquisition, are as follows:
Acquiree’s
carrying
amount
$’000
74
639
-
(621)
(80)
12
Fair value
$’000
74
639
663
(621)
(80)
675
18,483
19,158
Item
Cash and cash equivalents
Accounts receivable
Client intangibles
Trade and other payables
Provisions
Net identifiable assets/
(liabilities) acquired
Goodwill on acquisition
Net assets acquired
The consideration payable for the combination
effectively includes amounts in relation to the benefit
of expected synergies, revenue growth and the
assembled workforce of the acquiree, which has
resulted in goodwill of $18,483,000 (US$19,162,000).
The full value of the goodwill and client intangibles is
expected to be deductible for US tax purposes.
Acquisition related costs of $966,279 (June 12: Nil)
are included in Administrative and General Expenses
classification in the Statement of Comprehensive
Income. The acquired business contributed revenues
of $1,427,975 and net profit after tax of $197,837 to
the Group for the period 1 May 2013 to 30 June 2013.
88
89
CTM Annual Report 2013CTM Annual Report 2013 Boulder
On 1 December 2012, the Group acquired part of the
business of Tzell Boulder, LLC (Boulder), a US based
travel management company. The initial cost of the
acquisition was $5,000 (US$5,000) paid in cash, with
further contingent consideration payable monthly over
the first three years, as set out in this note.
The consideration payable for the combination
effectively includes amounts in relation to the benefit
of expected synergies, revenue growth and the
assembled workforce of the acquiree, which has
resulted in goodwill of $389,000 (US$405,000).
The full value of goodwill and client intangibles is
expected to be deductible for US tax purposes.
Acquisition related costs of $25,671 (US$25,000)
are included in administrative and general expenses
in the Statement of Comprehensive Income.
ETM (prior period)
On 3 October 2011, the Group acquired 100%
of the issued shares in ETM Travel Pty Ltd (ETM),
a Melbourne based travel management company,
which enabled the Group to enhance its events
offering and provide a complete integrated corporate
travel solution to clients. In addition, the acquisition
strengthened the Group’s presence in the
Victorian market.
The initial cost of the acquisition was $8,500,000,
with further contingent consideration payable as
at 31 August 2012, as set out in this note.
The potential undiscounted amount of all the future
payments that the Group could be required to make,
to the extent that net profit before tax in the earn-out
period from 3 October 2011 to 30 June 2012 exceeds
$1,275,000 ranges from $1 and is capped
at $4,100,000.
At the acquisition date, the projected result for the
nine months ending 30 June 2012 was assessed,
to determine the acquisition date fair value of this
contingent consideration as at the acquisition date,
as set out in the following table. Any subsequent
adjustment to the final contingent consideration,
based on the actual result as at 30 June 2012,
is reflected in the Consolidated Statement of
Comprehensive Income.
The potential undiscounted amounts of future cash
payments that the Group could be required to make
are based on financial criteria relating to percentages
of collected revenues over the three earn-out years
and range from $1 with no capped maximum value.
At the acquisition date, the projected results for the
three earn-out years were assessed to determine
the acquisition date fair value of this contingent
consideration, as set out in the following table.
Any subsequent adjustment to the final contingent
consideration, based on the actual results, will
be reflected as an expense in the Statement of
Comprehensive Income.
$’000
5
432
437
Purchase consideration:
Initial cash payable
Acquisition date fair value contingent
consideration - cash earn-out *
Total acquisition date fair value
purchase consideration
* The contingent consideration has been accrued
in the balance sheet within the Trade and Other
Payables classification.
The provisional fair values of the assets and liabilities
of the Boulder business acquired as at the date
of acquisition are as follows:
Acquiree’s
carrying
amount
$’000
Fair value
$’000
-
-
48
48
389
437
Item
Client intangibles
Net identifiable assets/
(liabilities) acquired
Goodwill on acquisition
Net assets acquired
90
Purchase consideration:
Initial cash paid/payable*/**
Acquisition date fair value contingent
consideration – cash earn-out **
Total acquisition date fair value
contingent consideration
Re-measurement of the fair value of the
contingent consideration – cash
earn-out recognised as income in the
Statement of Comprehensive Income –
Note 5**
$’000
8,500
4,100
12,600
(683)
Final purchase consideration payable
11,917
*$7,900,000 paid in the year to 30 June 2012 and
the balance of $600,000 payable 31 August 2012.
** The estimated future amounts payable totalling
$4,017,000 have been included in current Trade and
Other Payables in the Consolidated Statement of Financial
Position at 30 June 2012 (2013: $4,017,000 paid).
The provisional fair values of the assets and liabilities
of the etm business acquired as at the date of
acquisition are as follows:
Acquiree’s
carrying
amount
$’000
2,633
2,156
337
544
35
14
-
Fair value
$’000
2,633
2,156
337
544
35
14
200
Item
Cash and cash equivalents
Accounts receivable
Receivable from related
parties
Other assets
Plant and equipment
Software
Client contracts and
relationships
Trade and other payables
(6,239)
(6,239)
Provisions
Borrowings
Deferred tax balances
Net identifiable assets/
(liabilities) acquired
Goodwill on acquisition
Net assets acquired
(278)
(421)
450
(769)
(278)
(421)
390
(629)
13,229
12,600
The consideration payable for the combination
effectively includes amounts in relation to the benefit
of expected synergies, revenue growth and the
assembled workforce of the acquiree, which has
resulted in goodwill of $13,229,000. No portion of
this goodwill balance is expected to be deductible
for Australian tax purposes.
Acquisition related costs of $132,000 are included
in administrative and general expenses in the
Consolidated Statement of Comprehensive Income.
The acquired business contributed revenues of
$7,035,000 and net profit after tax of $1,257,000 to
the Group for the period 3 October 2011 to 30 June
2012. If the acquisition had occurred on 1 July 2011,
Group consolidated revenue and consolidated profit
for the year ended 30 June 2012 would have been
$68,579,000 and $12,217,000 respectively.
23. COMMITMENTS AND CONTINGENCIES
Operating lease commitments – Group as lessee
The Group has entered into commercial leases for the
rental of premises. These leases have an average life
of between 1 and 3 years. There are no restrictions
placed upon the lessee by entering into these leases.
Future minimum rentals payable under non-
cancellable operating leases as at 30 June
are as follows:
Within one year
After one year but not
more than five years
More than five years
2013
$’000
2,290
6,381
75
8,746
2012
$’000
1,341
1,985
-
3,326
Other Loan Commitments
The Group had hire purchases contracts for various
items of plant and equipment in the prior year.
Future minimum payments under the hire purchases
contracts are as follows:
91
CTM Annual Report 2013CTM Annual Report 2013 2013
$’000
2012
$’000
-
-
-
-
-
53
-
53
(1)
52
Within one year
After one year but not
more than five years
Total minimum lease
payments
Less amounts
representing finance
charges
Present value of
minimum lease
payments
Capital Commitments
There were $167,000 of capital commitments as at
reporting date (2012: $38,000).
Contingencies
Guarantees/Letter of credit facilities
The Group has provided bank guarantees and
letters of credit in relation to various facilities with
vendors and in accordance with local travel agency
licensing and International Air Transport Regulations.
Guarantees provided by the parent are held on behalf
of other group entities.
Guarantees provided for:
Various vendors
2013
$’000
2,738
2,738
2012
$’000
1,448
1,448
Guarantees, as part of the overall facilities including
term loans, overdraft, merchant facilities and bank
guarantees, are fully secured by a fixed and floating
charge over all existing and future assets and
undertakings of Corporate Travel Management Group
Pty Ltd.
There were no other contingencies as at reporting
date (2012 - $nil).
24. RELATED PARTY DISCLOSURES
(i) Controlled Entities
The consolidated financial statements include the
financial statements of Corporate Travel Management
Limited and the subsidiaries listed in the below table:
Name
Corporate Travel Management Group Pty Ltd
Sainten Pty Ltd
Floron Nominees Pty Ltd
WA Travel Management Pty Ltd
Travelogic Pty Ltd
Australia
Australia
Australia
Australia
Australia
Corporate Travel Management (New Zealand) Limited
New Zealand
Travelcorp Holdings Pty Ltd
Travelcorp (Aust) Pty Ltd
ETM Travel Pty Ltd
Corporate Travel Management North America Limited
R&A Travel Inc
Travelcorp LLC
92
Australia
Australia
Australia
US
US
US
Percentage of Equity
Interest Held
Country of
Incorporation
2013
%
2012
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
-
Directors of the Group hold other directorships
as detailed in the Directors’ Report. Where any of
these related entities are clients of the Group, the
arrangements are on similar terms to other clients.
(iv) Transactions with shareholders
and shareholder related entities
2013
$
2012
$
Borrowings owed to shareholders
Balance 1 July
Repayments of loan
balances outstanding
Balance 30 June
-
-
-
217,058
(217,058)
-
(v) Transactions other related parties
Receivables from the former ETM Directors were held
as at the etm acquisition date (refer Note 22).
2013
$
Receivables from other related parties
Balance 1 July
Receivables
recognised from the
acquisition of entities/
businesses
Repayments of loan
balances outstanding
Balance 30 June
-
-
-
-
2012
$
-
337,437
(337,437)
-
(ii) Deed of Cross Guarantee
Entities subject to class order relief
Corporate Travel Management Limited, Corporate
Travel Management Group Pty Ltd, Floron Nominees
Pty Ltd, Sainten Pty Limited, Travelogic Pty Limited,
WA Travel Management Pty Ltd, Travelcorp Holdings
Pty Ltd, Travelcorp (Aust) Pty Ltd, ETM Travel Pty Ltd
and Corporate Travel Management (New Zealand)
Limited are parties to a Deed of Cross Guarantee,
under which each company guarantees the debts of
the other companies.
By entering into the Deed, the wholly owned
Australian entities have been relieved from the
requirement to prepare a Financial Report and
Directors’ report under Class Order 98/1418 (as
amended by Class Orders 98/2017, 00/0321,
01/1087, 02/0248 and 02/1017) issued by the
Australian Securities and Investments Commission.
As at balance date, the Group is submitting an
application to include the newly acquired North
American entities into the Deed of Cross Guarantee.
Closed Group Class Order Disclosures
Corporate Travel Management Limited and all of its
controlled entities (with the current exception of its
North American controlled entities - refer above) are
party to the above Deed of Cross Guarantee and
represent a ‘Closed Group’ for the purposes of the
Class Order. Further disclosure of the Closed Group
has not been made, due to the impending application
to include the North American entities as party to
the Deed of Cross Guarantee, within the required
reporting period after balance date.
(iii) Transactions with Directors and Director
related entities
During the year, $333,677 (2012: $227,319) has
been paid to a party related to Mr Jamie Pherous
for rent and outgoings in relation to an office lease.
The balance outstanding at 30 June 2013 is $nil
(2012: $19,268).
93
CTM Annual Report 2013CTM Annual Report 2013 25. PARENT ENTITY FINANCIAL INFORMATION
(a) Summary financial information
The individual financial statements of the parent entity
show the following aggregate amounts:
2013
$’000
Statement of Financial Position
2012
$’000
11,121
68,064
6,548
6,548
54,747
6,769
61,516
19,834
83,045
5,448
5,448
68,259
9,353
77,612
(10,081)
(12,615)
(10,081)
(12,615)
Current assets
Total assets
Current liabilities
Total liabilities
Shareholders’ equity
Issued capital
Retained earnings
Profit or loss for the
year
Total comprehensive
income
(b) Guarantees entered into by the parent entity
The parent entity is party to the overall financing
arrangements and related security, as detailed in
Note 18 and Note 24.
In addition, the parent is party to the Group’s cross
guarantee arrangements, as detailed in Note 24(ii).
There are no other financial guarantees provided
by the parent entity.
(c) Contingent liabilities of the parent entity
The parent entity did not have any contingent
liabilities as at 30 June 2013 or 30 June 2012.
(d) Contractual commitments
The parent entity did not have any contractual
commitments at 30 June 2013 or 30 June 2012.
26. AUDITORS’ REMUNERATION
The auditor of the Group is PricewaterhouseCoopers
Amounts received or due and receivable by:
PricewaterhouseCoopers Australia:
▪ Audits and review of the financial reports of the entity
and any other entity in the consolidated group
▪ Other services in relation to the entity and
any other entity in the consolidated group:
- Tax compliance
- Tax services – acquisitions
- Remuneration advice
Other PricewaterhouseCoopers network firms:
▪ Other services in relation to the entity and any other entity in the
consolidated group:
- Tax compliance
- Tax services – acquisitions
2013
$
2012
$
285,000
271,737
140,146
23,600
9,552
458,298
26,736
27,163
53,899
512,197
64,522
36,000
-
372,259
8,843
31,916
40,759
413,018
27. EVENTS OCCURRING AFTER THE REPORTING PERIOD
There have been no matters or circumstances not otherwise dealt with in this report, that will significantly
affect the operation of the Group, the results of those operations or the state of affairs of the Group or
subsequent financial years.
28. DIRECTOR AND EXECUTIVE DISCLOSURES
a) Details of key management personnel
(i) Directors
Mr Tony Bellas
Mr Stephen Lonie
Mr Greg Moynihan
Mr Jamie Pherous
Ms Claire Gray
(ii) Other executives
Mr Steve Fleming
Ms Laura Ruffles
There were no changes in key management personnel after reporting
date and before the date the financial report was authorised for issue.
Non-Executive Director.
Non-Executive Director.
Non-Executive Director.
Managing Director & Chief Executive Officer.
Executive Director.
Chief Financial Officer.
Chief Executive Officer - Australia & New Zealand.
94
95
CTM Annual Report 2013CTM Annual Report 2013 b) Compensation of key management personnel
Compensation by Category:
key management personnel
c) Equity Instrument disclosures relating
to key management personnel
(i) Share appreciation rights
2013
$
2012
$
During the financial year, share appreciation rights
were issued to Ms Laura Ruffles as listed in the
Directors’ Report.
Short-term
1,455,272
1,419,289
Post employment
105,893
Long-term benefits
Share-based payments
7,104
9,317
116,272
10,264
-
No share options were granted as equity
compensation benefits during the financial
year, (2012: nil).
1,577,586
1,545,825
ii) Shares held by key management personnel:
Balance at 30
June 2012
Purchased
Disposed Other changes
during year
Balance at 30
June 2013
Directors
Ordinary shares
Mr Jamie Pherous
Ms Claire Gray
Mr Tony Bellas
Mr Stephen Lonie
Mr Greg Moynihan
26,599,728
5,424,999
200,000
200,000
200,000
Other key management personnel of the group
Ordinary shares
Ms Laura Ruffles
Mr Steve Fleming
150,000
150,000
-
-
-
-
-
-
-
(2,599,728)
-
-
-
-
-
-
-
-
-
-
-
-
-
24,000,000
5,424,999
200,000
200,000
200,000
150,000
150,000
Balance at 30
June 2011
Purchased
Disposed Other changes
during year
Balance at 30
June 2012
Directors
Ordinary shares
Mr Jamie Pherous
Ms Claire Gray
Mr Tony Bellas
Mr Stephen Lonie
Mr Greg Moynihan
26,599,728
5,424,999
200,000
200,000
200,000
Other key management personnel of the group
Ordinary shares
Ms Laura Ruffles
Mr Steve Fleming
Ms Nova Fleming
150,000
150,000
-
All equity transactions with key management
personnel, other than those transactions arising from
the exercise of remuneration options, have been
entered into under terms and conditions no more
favourable than those the Group would have adopted
if dealing at arm’s length.
d) Loans to key management personnel
There were no loans provided to or received from
key management personnel during the financial
year (2012: $nil).
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
26,599,728
5,424,999
200,000
200,000
200,000
150,000
150,000
-
e) Other transactions and balances
with key management personnel
Details of other transactions with key
management personnel are set out in Note 24.
96
97
CTM Annual Report 2013CTM Annual Report 2013 Directors’ Declaration
In the Directors’ opinion:
a. The financial statements and notes set out
on pages 55 to 97 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 2013
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 extended closed group identified in Note 24
will be able to meet any obligations or liabilities to
which they are, or may become, subject by virtue of
the deed of cross guarantee described in Note 24.
Note 2(a) 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.
This declaration is made in accordance
with a resolution of the Directors.
Mr Tony Bellas
Chairman
Mr Jamie Pherous
Managing Director
Brisbane, 28 August, 2013
98
99
CTM Annual Report 2013CTM Annual Report 2013 Shareholder Information
The shareholder information set out below was
applicable at 23 August 2013.
A. Distribution of equity securities
Analysis of numbers of equity security holders
by size of holding:
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Number of
Shareholders
1,011
1,876
489
354
40
3,770
100
101
CTM Annual Report 2013CTM Annual Report 2013 C. Substantial holders
Substantial holders (including associate holdings)
in the Company are set as follows:
Ordinary shares
Pherous Holdings Pty Limited
Claire Lesley Gray
HSBC Custody Nominees (Australia) Limited
Ordinary shares voting rights
On a show of hands, every member present at
a meeting in person or by proxy shall have one vote.
Upon a poll, each share shall have one vote. There
are currently no options held.
Number held
Percentage of
issued shares
24,000,000
5,424,999
4,110,589
31.21%
7.05%
5.34%
B. Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest holders
of quoted equity securities are listed as follows:
Pherous Holdings Pty Limited
Claire Lesley Gray
HSBC Custody Nominees (Australia) Limited
Steven Craig Smith
Matthew Michael Cantelo
Mr Matthew Dalling
National Nominees Limited
J P Morgan Nominees Australia Limited
RBC Investor Services Australia Nominees Pty Limited
Helen Logas
RBC Investor Services Australia Nominees Pty Limited
Aust Executor Trustees SA Limited
Matimo Pty Limited
Doobie Investments Pty Limited
Lyndall McCabe
AMJJAS Pty Ltd
Mr Michael Pherous and Mrs Diane Pherous
Citicorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
UBS Wealth Management Australia Nominees Pty Ltd
BNP Paribas Noms Pty Ltd
Murdoch Investments Pty Ltd
Ordinary shares
Number held
Percentage of
issued shares
24,000,000
31.21%
5,424,999
3,710,667
3,479,649
2,960,032
2,920,282
2,746,938
2,543,498
1,404,880
1,075,800
932,648
872,512
784,157
784,157
667,911
641,109
430,000
421,068
399,922
354,500
346,148
313,000
7.05%
4.82%
4.52%
3.85%
3.80%
3.57%
3.31%
1.83%
1.40%
1.21%
1.13%
1.02%
1.02%
0.87%
0.83%
0.56%
0.55%
0.52%
0.46%
0.45%
0.41%
57,213,877
74.39%
102
103
CTM Annual Report 2013CTM Annual Report 2013 Corporate Directory
Directors
Joint Company Secretaries
Principal registered office in Australia
Share registry
Auditor
Mr Tony Bellas.
Mr Stephen Lonie.
Mr Greg Moynihan.
Mr Jamie Pherous.
Ms Claire Gray.
Mrs Lyndall McCabe.
Mr Steve Fleming.
27A Elizabeth Arcade
52 Charlotte Street
Brisbane QLD 4000.
Link Market Services Limited
Level 15, 324 Queen Street
Brisbane QLD 4000.
PricewaterhouseCoopers
Riverside Centre
Level 15, 123 Eagle Street
Brisbane QLD 4000.
Stock exchange listings
Corporate Travel Management Limited shares
are listed on the Australian Securities Exchange.
Website address
www.travelctm.com
104
105
CTM Annual Report 2013CTM Annual Report 2013
Corporate Travel Management
ABN 17 131 207 611
Registered office:
27A/52 Charlotte Street
Brisbane Queensland 4000
106
CTM Annual Report 2013