Corporate Travel Management Annual Report 2018

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FY2018 Annual Report · Corporate Travel Management

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The CTM Difference.

CTM ANNUAL REPORT 2018

Contents.

Financial Highlights

Chairman and Managing Director’s Report

With You Every Step of the Journey

We’ll Get You There

Global Footprint

Board of Directors

Executive Team

Annual Financial Report

Financial Highlights.

1 4 %

4 1

$125.4m

$ 7 6 . 7m

BIT

DA CONT R I B U T I O

N
O
I
G
E

N BY R

1 9

$4,958.3m

DIVERSE SERVICES

CORPORATE

EVENTS

LEISURE

LOYALTY

WHOLESALE

Dear Shareholders,

Introduction

We are pleased to present the 2018 Annual
Financial Report of Corporate Travel Management
Limited (“CTM” or “the Group”). The Group has had
another strong year, its 8th year since the Company
listed on the ASX in December 2010.

Outstanding Performance

In the year to 30 June 2018, CTM’s revenue of
$371.0 million was 14% higher than the previous
year.

CTM’s statutory net profit after tax (“NPAT”) of $76.7
million for the year to 30 June 2018 compares with
$54.6 million in the previous year, representing a
41% increase. Underlying NPAT was $86.0 million,
when adding back one-off acquisition costs of
$0.7 million and non-cash amortisation of client
intangibles (tax effect) of $8.6 million, representing
a 34% increase on prior year.

Financial Position

CTM is in a sound financial position, with total
assets of $804.8 million at 30 June 2018, an
increase of $64.6 million or 9% from 30 June
2017. The growth in assets is primarily due to the
continued strong operating performance of the
business.

The continued generation of strong cash flows
contributed to the Group’s sound financial position,
with net cash flows from operating activities of
$94.4 million over the year to 30 June 2018. On a
normalised basis, taking into account immediate
term timing differences, the operating cash
conversion rate is approximately 99%.

Total equity of $471.5 million at 30 June 2018
compares with $401.4m at 30 June 2017, an
increase of $70.1 million or 17% over the year.

The Group focused on the following key strategic
initiatives during the year:

1. Continued Organic Growth and Acquisitions:

• Enhancing our value proposition to meet client

needs across the CTM global network.

• Leveraging clients across all lines of business

(CTM, ETM, B2B, B2C).

• Executing upon merger and acquisition

opportunities that add scale, niche, and/or
geography.

2. Client Facing Innovation:

• Expanding SMART technology globally by

developing new tools for and with our clients.

• Through regional technology hubs, building
tools that address local or regional market
requirements.

3. Productivity and Internal Innovation:

• Internal innovation feedback loops, to improve
and automate existing client and non-client
facing processes.

• Staff empowerment to make service decisions
to drive high staff engagement and client
satisfaction outcomes.

4. Leveraging our Scale and Geography:

• Capitalising on scale and our global network, to
develop and optimise supplier performance for
our clients.

• Continuing to demonstrate that CTM is a valuable

partner in the supply chain.

5. Our People:

• Continuing to attract, retain and develop the

industry’s brightest talent.

• Empowering our team to support our clients’

needs.

• Embracing a culture that represents our values

and business drivers.

In the year to 30
June 2018, CTM’s
revenue of $371.0m
was 14% higher
than the previous
year.

Chairman & Managing
Director’s Report.

Employees

A competent and motivated workforce is integral to CTM’s success. CTM
employs over 2,300 employees (full time equivalents).

CTM’s culture is founded upon the principle of empowering its 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.

The Board and the senior management team appreciate the contribution that
CTM’s staff have made to the Group’s strong performance. Their professionalism
and commitment have been fundamental to the development of CTM’s reputation
as a highly valued business partner for its clients.

Positioning for the Future

As we look forward to 2019, CTM remains confident that its customer value
proposition remains compelling and that there is enormous untapped potential in
each of the markets in which we operate.

CTM now has in place regional technology hubs to ensure that we build client
facing technology that address local and regional market requirements. This
approach will assist our organic growth through client wins and retentions, which
coupled with pursuing further merger and acquisition opportunities that add
scale, niche and geography will ensure that CTM is well positioned for further
growth.

CTM’s focus remains 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.

Conclusion

We would like to take this opportunity to thank the Board, management team and
staff for their efforts, and congratulate them on the continued success of CTM as
a leading-edge and profitable corporate travel solutions company.

We would also like to thank CTM’s shareholders and, most importantly, CTM’s
clients for their continuing support.

The Board has declared a dividend of 21 cents per share on 22 August 2018,
which will be paid on 4 October 2018 to all shareholders registered on 7
September 2018.

Tony Bellas
Chairman
Corporate Travel Management Limited
22 August 2018

Jamie Pherous
Managing Director
Corporate Travel Management Limited
22 August 2018

CTM’s focus remains
its clients and staff,
to ensure its service
offering is both
innovative and cost
effective.

With you every step
of the journey.

Corporate Travel Management
is committed to a growth
strategy that strengthens our
ability to deliver superior service,
market-leading technology and
a positive return on investment
for customers.

Our proactive approach to account management
ensures we continually identify new savings
opportunities for customers, while our proprietary
technology is developed to meet their ever-changing
needs. However, business travel management is
complex, and for the end user, it can be emotional.

While technology provides an essential competitive
advantage for customer satisfaction, the importance
of a human touch can’t be underestimated. That is
why CTM’s highly personalised service is a key point
of difference across all our operations.

Customer care

Going global, staying local

While our priority is to ensure a smooth and enjoyable
experience for all business travellers, things don’t
always go to plan. Incidents and emergencies can
occur, and employees are away from their families in
often unfamiliar surroundings.

The requirements of each customer are unique,
and in times of need, a familiar voice can make all
the difference. CTM’s teams are always on hand
to deliver round-the-clock support and emergency
assistance for ultimate peace of mind.

CTM’s travel solutions are developed and delivered
by local consultants and strategic account
management teams in every region. This model is
successfully replicated across all our global markets.

In addition to understanding customers’ specific
requirements, our 2,300 industry professionals know
what is happening on the ground in more than 70
countries.

As a result, our customers receive the same
exemplary service and local market expertise they
come to expect from CTM wherever their travels may
take them.

Customer-centric technology

CTM expertise:
our customers’ advantage

CTM puts the user front and centre of our industry-
leading technology. Working out of four global
technology hubs, our world-class development
team continually enhance our travel tools based on
customer feedback.

This personalised approach ensures we deliver
technology which is flexible and engineered to last,
and that our tools are the most intuitive, responsive
and easy to use on the market.

CTM’s continuous feedback loops empower all our
employees and customers to share ideas on how to
improve our service and product offering.

This informs everything we do. From helping with pre-
trip approvals and policy implementation, delivering
the best fares, being available 24/7 for travellers on
the road, and providing post-trip reporting to enhance
travel behaviour.

Our dedicated account managers are accountable
for every aspect of customers’ travel programs. We
make it our business to deliver on their travel goals.

We have the established supplier relationships,
global buying power and industry expertise to ensure
that for every dollar spent on our travel services, we’ll
return more to our customers in savings.

In the rapidly-evolving business travel industry, CTM
continues to demonstrate how to build and maintain
the best possible managed travel solutions for the
global market.

From their first interaction with our passionate and
knowledgeable team, our customers know we are
with them every step of the journey. That’s the CTM
difference.

We’ll get you there.

“
“

Target, Australia

“I was stranded in Belfast whilst away on
business. There were huge disruptions,
blizzards, power cuts and all the planes
were grounded. I would just like to say how
wonderful I found the CTM Travel Desk. They
took care of everything for me. The whole team
were so organised and calming during what
was a very stressful situation and kept me
informed every step of the way.”

Herbert Smith Freehills

“CTM’s travel warnings were crucial to
my travellers being able to make informed
decisions that would keep them safe and
secure whilst travelling. They received
information about a flight rescheduled to
leave earlier than anticipated, allowing
them to check in for the flight on time for
which they were grateful.”

The CTM
Customer Value Proposition

• Highly personalised service

•

Innovative technology

• Return on investment

Trust, respect and
understanding are the
foundations of CTM’s
long-standing partnerships
with customers and suppliers.

“

CTM understands our unique business needs
and offers us flexibility and professionalism in
account management, reporting capabilities, online
functionality and geographic coverage. Despite
growing impressively over the last six years, CTM
has continued to provide excellent personalised
service (usually expected only from a boutique firm)
combined with the scale of a global operator.

Wesfarmers

Global Footprint.

NORTH AMERICA
(EST. 2012)

19 OFFICES IN 8 STATES FROM

COAST TO COAST

750 EMPLOYEES

TTV $1,306.1M

REVENUE $127M

EBITDA $37.9M

UK & EUROPE
(EST. 2014)

OFFICES IN 12 COUNTRIES

SUPPORTING 10 LANGUAGES

450 EMPLOYEES

TTV $1,013.3M

REVENUE $81.7M

EBITDA $34.2M

ASIA
(EST. 2013)

OFFICES ACROSS 5

ASIAN TERRITORIES

450 EMPLOYEES

TTV $1,483M

REVENUE $53.8M

EBITDA $19.5M

AUSTRALIA & NZ
(EST. 1994)

9 OFFICES ACROSS AUS & NZ

650 EMPLOYEES

TTV $1,155.9M

REVENUE $108.5M

EBITDA $44M

OUR TECHNOLOGY

All information current as of June 30, 2018

Proprietary patented technology

Regionalised market solutions

CTM user labs

Hundreds of technology releases

300,000 SMART Alerts were sent to CTM travellers

Core focus: responsive and agile

Four global technology hubs

Agile two-weekly releases

100+ CTM technology staff

6 million bookings via CTM online booking tools

Board of Directors.

LOOKING TO THE FUTURE.

Tony Bellas
Chairman

Jamie Pherous
Managing Director

Stephen Lonie
Independent Non-Executive Director

Greg Moynihan
Independent Non-Executive Director

Tony Bellas has more than 30 years’
experience in both the government
and private sectors. Tony 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.

Jamie Pherous, Managing
Director, founded Corporate Travel
Management in 1994. He 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).
Jamie is also a non-Executive Director
of The Australian Federation of Travel
Agents (AFTA).

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.

Greg Moynihan is a former Chief
Executive Officer of Metway Bank
Limited. He has also held senior
executive positions with Citibank
Australia and Suncorp Metway. He
now focuses on commitments as a
Non-Executive Company Director, as
well as pursuing business interests
in the investment management and
private equity sectors.

Admiral Robert J.
Natter, US Navy (Ret.)
Independent Non-Executive Director

Robert Natter retired from active
military service a decade ago
and now has more than 10 years’
experience in both the government
and private sectors in the North
American market. In his Navy
career, Robert Natter served as the
Commander of the U.S. Seventh Fleet
operating throughout Asia and the
Indian Ocean; Commander in Chief
of the U.S Atlantic Fleet; and the first
Commander of U.S. Fleet Forces,
overseeing all Continental U.S.
Navy bases, facilities and training
operations.

Laura Ruffles
Executive Director

Laura Ruffles is CTM’s Global Chief
Operating Officer and in late 2015
was appointed an Executive Director
in recognition of her leadership
contribution to CTM’s success. Laura
has more than 20 years’ experience
leading local, regional and global
business strategy, and in 2013
completed a Master of Business
Administration from the Australian
Institute of Business.

Executive Team.

Jamie Pherous
Managing Director
Jamie Pherous founded Corporate Travel Management in 1994. He 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.

Steve Fleming
Global Chief Financial Officer
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 25 years’ experience in commercial finance roles gained with
high growth companies across several industries and countries including
Abbey National, TrizecHahn, Deutsche Morgan Grenfell and Arthur
Andersen.

Laura Ruffles
Global Chief Operating Officer
As CTM’s Global Chief Operating Officer, Laura is responsible for all
aspects of the company’s business performance. During FY18 she held
both the role of Global COO and the position of Chief Executive Officer ANZ.
Laura joined CTM in 2010 and, in late 2015, was appointed an Executive
Director in recognition of her leadership contribution. She has significant
local, regional and global industry experience and, in a career of more than
20 years, has led teams across sales, account management, operations and
technology. Laura holds an MBA, is a graduate of the Australian Institute
of Company Directors and is a guest lecturer at the Australian Institute of
Business.

Debbie Carling
CEO Europe
Debbie has worked in the travel industry for over 30 years’ in several key
strategic and senior roles, including Commercial Director at Britannic
Travel. During this time Debbie led the setup of global brand FCM Travel
Solutions and became the Executive General Manager of Europe. In
2011 Debbie joined Chambers Travel and became COO soon after.
Debbie successfully instilled new company processes, productivity and
developments in supplier relations. In December 2014 Chambers was
acquired by Corporate Travel Management, during which time Debbie
played a key role in the successful transition. Debbie was appointed as
CEO Europe for CTM in July 2016.

Chris Thelen
CEO North America
Chris Thelen joined Chambers Travel (UK, Europe) in 1999 and led
a management buy-out of the company five years later. Under his
leadership, Chambers Travel quadrupled its turnover and its staff, and
became an award-winning business with offices across eight European
countries. Chambers Travel was acquired by CTM in December 2014,
where Chris remained at the helm of CTM’s European operations until his
transfer to CEO North America in July 2016.

Greg McCarthy
CEO Australia & New Zealand
Greg McCarthy has more than 35 years’ experience in the travel industry
holding several leadership positions. He founded two travel management
companies in Australia, building them up from small operations to highly
successful medium-sized businesses. Greg has worked for international
airlines and held an executive directorship in a global TMC, achieving
a strong track record delivering for customers. He was co-founder of
Platinum Travel Corporation. CTM acquired Platinum’s Brisbane and
Sydney offices in 2018, with Greg commencing as CTM CEO Australia
and New Zealand on 1 July 2018.

Larry Lo
CEO Asia
Joining Westminster Travel in 2008, Larry Lo is responsible for the
company’s overall management, sales operations and continued
development of strategic alliance partnerships across the Asia region.
He started his career in 1988 as a Travel Consultant and worked in
several travel companies in Hong Kong and Canada gaining an in-depth
insight into the international travel industry. Today, he manages more
than 700 employees in Hong Kong, Mainland China, Macau, Taiwan and
Singapore. He currently serves as a Chairman on the Society of IATA
Passenger Agents (SIPA) and a director of the Travel Industry Council of
Hong Kong (TIC).

Annual Financial Report.

Annual Financial Report

Directors’ Report

Corporate Governance Statement

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Consolidated Financial Statements

Directors’ Declaration

Independent Auditor’s Report

Shareholder Information

Corporate Directory

100

103

Directors’ Report
The Directors present their report, together with the financial report of Corporate Travel Management Limited and
its controlled subsidiaries (CTM or “the Group”), for the financial period ended 30 June 2018.

Directors
The following persons were directors of Corporate Travel Management Limited during the whole of the financial
year and up to the date of this report:

• Tony Bellas.

• Jamie Pherous.

• Stephen Lonie.

• Greg Moynihan.

• Admiral Robert J. Natter, U.S. Navy (Ret.).

• Laura Ruffles.

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.

Dividends
Dividends paid to members during the financial year were as follows:

Final ordinary dividend for the year ended 30 June 2017 of 18.0 cents per fully paid share paid on 5
October 2017

Interim ordinary dividend for the year ended 30 June 2018 of 15.0 cents per fully paid share paid on
11 April 2018

Total dividends paid

2018
$’000

19,048

15,916

34,964

Since the end of the financial year, the Directors have recommended the payment of a final ordinary dividend of
$22,697,826 (21.0 cents per fully paid share), to be paid on 4 October 2018 out of retained earnings at 30 June
2018.

Review of operations

Group overview

The Group continued to engage in its principal activity, being the provision of travel services, the results of which
are disclosed in the following financial statements.

Group financial performance

CTM’s key financial metrics are summarised in the following table:

Total Transaction Value (TTV) (unaudited)

Revenue and other income

2018

$’000

2017

$’000

4,958,331 4,161,943

372,236

325,874

EBITDA adjusted for one-off non-recurring / acquisition costs (adjusted EBITDA)

125,450

Change

19%

14%

27%

39%

41%

80,582

76,712

708

98,615

57,838

54,556

1,376

77,420

55,932

38%

8,561

8,305

Net profit after tax (NPAT):

NPAT - Attributable to owners of CTD

One-off non-recurring / acquisition costs (tax effect)

Underlying NPAT - Attributable to owners

Amortisation of client intangibles (tax effect)

Directors’ Report (continued)

Review of operations (continued)

The net profit after tax of the Group for the financial period amounted to $76,712,000 (2017: $54,556,000). The
result was underpinned by a 14% increase in revenue, and includes a full year contributed results from the
acquisitions of Redfern Travel and Andrew Jones Travel, both acquired on 1 February 2017.

In addition, adjusted EBITDA grew by 27% to $125.4 million, with the reconciliation to profit before income
tax from continuing operations as set out in Note 1 in the Financial Statements. On a constant currency basis,
EBITDA grew by 28% to $126.4 million. Strong organic growth has underpinned the performance, with client
wins and retentions of historically high levels. There has been strong translation of revenue to EBITDA due to
benefits of CTM’s growing scale, technology and integrated automation, despite the increase move to on-line
(lower yielding) transactions.

Net profit after tax:

Attributable to members

Attributable to minority interest

Shareholder funds

Basic EPS (cents per share)

Basic EPS growth

Return on equity

Dividend per share - year end

Dividend per share - interim

2018
$’000

2017
$’000

2016
$’000

2015
$’000

76,712

3,870

54,556

3,282

42,134

26,367

3,609

2,727

301,747

281,847

175,231

161,675

72.4

35%

25%

53.5

24%

19%

43.2

54%

24%

28.1

48%

16%

21.00 18.00

15.00

10.00

15.00 12.00

9.00

6.00

Dividend per share - full financial year

36.00 30.00

24.00

16.00

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 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.

TTV net of GST (unaudited)

2018
$’000

2017
$’000

4,958,331

4,161,943

The Group maintained strong growth in TTV (unaudited). The Group continues to grow market share particularly
in regions where the CTM SMART Technology suit has been fully rolled out.

CTM also continues to maintain a strong financial position, with net current assets of $49.3 million and total
equity of $471.5 million. At 30 June 2018, the Group had $44.0 million (2017: $45.4 million) in borrowings. CTM’s
acquisition growth has been funded through a combination of operating cash flow and short term debt. There
has been further acquisition payments for prior acquisitions of $37.2 million funded through borrowings and
capital expenditure of $13.7 million during the year funded from operating cash flow.

The Company continues to pay dividends at its stated divided policy level, with a final dividend declared at 21.0
cents per share (full year: 36.0 cents). This dividend represents an increase of 20% on the preceding period.

Underlying NPAT - Attributable to owners (excluding acquisition amortisation)

85,981

64,237

34%

Directors’ Report (continued)

Review of operations (continued)

Constant currency

Due to a significant portion of the Group’s operations being outside Australia, the Group is exposed to currency
exchange rate translation risk, being the risk that the Group’s offshore earnings fluctuate when reported in
Australian dollars.

The Group’s regional results for the 2018 financial year have also been provided on a constant currency
basis in the following commentary, with the revenue and EBITDA for the regions converted at the average rate
for the 2017 financial year, to remove the impact of foreign exchange movements in assessing the Group’s
performance against the prior year. The constant currency comparatives are not compliant with Australian
Accounting Standards.

Review of underlying operations

The key financial results by region are summarised in the following table:

CTM Consolidated

Australia
& New Zealand

North America

Asia

Europe

Group

2018

2017

2018

2017

2018

2017

2018

2017

2018

2017

2018

2017

REPORTED AUD

Review of operations (continued)

Review of underlying operations (continued)

Europe
The operation in Europe contributed $81.7 million in revenue during the year, an increase of 66% on prior year,
with inclusion of the Redfern Travel acquisition for the full financial year (FY17: 5 months). The adjusted EBITDA
for the Europe business rose by 86% to $34.2 million and the adjusted EBITDA margin increased from 37% to
42%, benefiting from a large move to CTM’s online platforms, automation resulting from the Redfern acquisition
and record client wins and retention. On a constant currency basis, revenue increased by 61% and adjusted
EBITDA increased by 80% over the previous period.

Strategy and future performance

The Group continues to focus on its key strategic drivers, being:

• Implementing and integrating its acquisitions;

• Retaining current clients;

• Winning new clients;

• Innovating client tools and internal processes to enhance service to clients and improve internal productivity;

4,958.3 4,161.9

19% 1,155.9

962.3

20% 1,306.1 1,309.9

(0%) 1,483.0 1,301.1

14% 1,013.3

588.6

371.0

324.4

14% 108.5

Adj. EBITDA

125.4

98.6

27%

44.0

91.5

36.3

19% 127.0

126.7

21%

37.9

35.9

53.8

19.5

56.7

(5%)

18.1

81.7

34.2

49.2

18.4

86% (10.2)

(10.1)

72%

66%

0.0

0.3

and

• Staff engagement.

TTV

Revenue

TTV

Revenue

Adj. EBITDA as
% of Revenue

33.8% 30.4%

40.6% 39.7%

29.8% 28.3%

36.2% 31.9%

41.9% 37.4%

CONSTANT CURRENCY

5,009.6 4,161.9

20% 1,156.8

962.3

20% 1,342.9 1,309.9

3% 1,535.1 1,301.1

18% 974.8

588.6

66%

0.0

0.3

374.6

324.4

15% 108.9

91.5

19% 130.5

126.7

Adj. EBITDA

126.4

98.6

28%

44.3

36.3

22%

38.9

35.9

56.0

20.2

56.7

(1%)

18.1

12%

79.2

33.2

49.2

61%

18.4

80% (10.2)

(10.1)

Adj. EBITDA as
% of Revenue

33.7% 30.4% 11% 40.7% 39.7%

3% 29.8% 28.3%

5% 36.1% 31.9% 13% 41.9% 37.4% 12%

* Constant currency reflects June 2017 as previously reported. June 2018 represents local currency converted at FY2017 average foreign
currency rates.

Australia and New Zealand (“ANZ”)
Revenue rose by 19% to $108.5 million. The increased revenue has flowed through to the adjusted EBITDA,
which rose by 21% to $44.0 million with an improved margin of 41%, which is up from 40% in the prior
comparative period. The region continued to benefit from top line growth from increased market share through
new client wins. In addition, productivity also improved with around 80% of all transactions originated online.

North America
Revenue increased only marginally by 0.3% to $127.0 million. However, the adjusted EBITDA rose by 6% to
$37.9 million and the adjusted EBITDA margin improved from 28% in 2017 to 30%, due to further productivity
initiatives.

Client activity was subdued in the first half of FY18, due to uncertainty around US tax and infrastructure
initiatives. This impact was offset by new client wins, however, there has been delays on implementation. The
region is focusing heavily on technology investment in FY19, with circa $10 million of capital expenditure. The
focus is on client facing technology (SMART, Lightning and Loyalty). The regional activity was also negatively
impacted by weather events (floods and fires), which had a negative effect of circa $2 million on EBITDA. On a
constant currency basis, revenue for North America increased by 3% and adjusted EBITDA increased by 8%
over the previous comparative period.

Asia
Revenue declined 5% to $53.8 million for the financial year, however the underlying EBITDA is up 8% on the
prior comparative period. The result was impacted by reduced ticket prices which also reduced supplier
payment revenue. The EBITDA margin increased from 32% to 36% as the business benefited from productivity
gains through enhanced automation. On a constant currency basis, revenue declined 1% and adjusted EBITDA
increased by 12% over the previous period. This outcome was considered to be satisfactory in the tough lower
ticket prices trading environment.

In the 2018 financial year, the Group executed well on these business drivers, with maintenance of the
historically strong client retention numbers, a record year of new client wins and improved productivity and high
staff engagement outcomes in all regions.

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, but not through a reduction 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 Group intends to continue to pursue the opportunity for its growth globally through acquisition, as well as
pursuing organic growth in each market, underpinned by a focus on client service, supported by the continued
investment in new client facing technology and delivery of measurable return on investment (ROI) to its clients.

Material business risks

The Group is subject to both specific risks to its business activities and risks of a general nature.

These strategic risks include:

• Global conflicts, terrorism and pandemics: International travel remains susceptible to the impact of regional

conflicts, terrorism and health pandemics.

• Economic conditions: Economic downturns, both globally and regionally, may have an adverse impact on
the Group’s operating performance. The global oil price and overall airline capacity particularly impact our
business travel.

• Foreign exchange: The volatility of foreign exchange markets impacts on the Australian dollar results for the

Group, which is mitigated by matching funding sources to operating cash flows.

• Financial structure: The Group has acquired a number of businesses, all of which has resulted in the creation
of significant intangible assets, the recoverability of which is totally dependent upon future performance,
including depending on major contracts.

• Information technology: The Group relies on outsourced technology platforms and develops its own IP. Whilst
all systems are licensed, any disruption to supply or performance of systems may have an immediate and a
longer 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.

Directors’ Report (continued)

Significant changes in the state of affairs
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.

Information on Directors (continued)

Mr Jamie Pherous, BCom, CA – Managing Director

Events since the end of the financial year
Other than the following items, 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 or affairs
of the Group or subsequent financial years.

The Group acquired 100% of the shares of SCT Travel Group Pty Ltd, trading as Platinum Travel Corporation
(“Platinum”), with effect from 1 July 2018. Platinum is a renowned Australian boutique agency that has an
excellent reputation for customer service and is well placed in the SME corporate and events segments of the
travel industry.

As part of this transaction, an initial consideration of $5,000,000 was paid through a mixture of cash and
Corporate Travel Management Ltd shares. A further deferred consideration payment of up to $3,500,000 may
also be payable upon long term growth.

Due to the timing of the acquisition, CTM has not yet finalised the provisional calculation of the net identifiable
assets or purchased goodwill. The financial effects of the transactions have not yet been brought to account at
30 June 2018.

On 11 July 2018, CTM announced the acquisition of Lotus Travel Group Limited (Lotus), effective 2 October
2018. The Group will be acquiring 75.1% of Lotus, with our Asian partners Ever Prestige Investments Limited
(EPIL) acquiring the remaining 24.9%. Headquartered in Hong Kong with offices in Greater China, Lotus has
been operating for over 60 years and is one of the largest travel companies in Greater China.

An initial consideration of $51,721,462 (HK$300,000,000), which represents 100% share of the initial
consideration, is payable in cash. Further earn out consideration of up to $11,206,317 (HK$65,000,000) is
payable based on a multiple of net profit after tax for the year ending December 2018. The Group funded its
75.1% share of the acquisition via a share placement of 1,554,000 fully paid ordinary shares at $25.75 per share.
The shares were issued on 17 July 2018.

Likely developments and expected results of operations
Further information on likely developments in the Group’s operations and the expected results of operations has
not been included in this report because the Directors consider that would be likely to result in unreasonable
prejudice to the Group.

Environmental regulation
The Group has determined that no particular or significant environmental regulations apply to its operations.

Experience and expertise

Jamie Pherous founded Corporate Travel Management Ltd (CTM) in Brisbane in
1994. He has built the Group from its headquarters in Brisbane to become the
one of the world’s largest travel management companies now employing more
than 2,300 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 The Flight Centre Group
in 2003 and is a Director of the Australian Federation of Travel Agents.

Listed Company Directorships
(including key dates)

None.

Special responsibilities

Managing Director

Interests in shares and options

Ordinary shares in Corporate Travel Management Limited

20,485,000

Mr Stephen Lonie, BCom, MBA, FCA, FFin, FAICD, FIMCA, Senior MACS – Independent Non-Executive Director

Experience and expertise

Stephen Lonie is a Chartered Accountant, 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.

Listed Company Directorships
(including key dates)

MyState Limited (since 2011), Retail Food Group Limited (since 2013) and Apollo
Tourism and Leisure Ltd (since 2016).

Special responsibilities

Chair of Audit Committee
Chair of Risk Management Committee
Remuneration Committee member
Nomination Committee member

Interests in shares and options

Ordinary shares in Corporate Travel Management Limited

254,312

Information on Directors

Mr Greg Moynihan, BCom, Grad Dip SIA, CPA, SFFIN, MAICD – Independent Non-Executive Director

Mr Tony Bellas, BEcon, DipEd, MBA, FAICD, FCPA – Independent Non-Executive Director - Chairman

Experience and expertise

Listed Company Directorships
(including key dates)

Special responsibilities

Tony Bellas has more than 30 years’ experience in both the government and
private sectors. 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.

ERM Power Limited (since 2009), Shine Corporate Limited (since 2013),
NOVONIX Limited (since 2016), intelliHR Limited (since 2016), State Gas Limited
(since 2017) and intelliHR Limited (since 2016).
Chairman of not-for-profit company: Endeavour Foundation (since 2016).

Chair of the Board
Chair of Nomination Committee
Audit Committee member
Risk Management Committee member
Remuneration Committee member

Interests in shares and options

Ordinary shares in Corporate Travel Management Limited

220,836

Listed Company Directorships
(including key dates)

Special responsibilities

Greg Moynihan is a former Chief Executive Officer of Metway Bank Limited. He
has also held senior executive positions with Citibank Australia and Suncorp
Metway. Since leaving Suncorp Metway in 2003, Greg Moynihan has focused
on his commitments as a Non-Executive Company Director, as well as pursuing
business interests in the investment management and private equity sectors.

Shine Corporate Limited (since 2013) and Ausenco Limited (2008 – 2013).

Chair of Remuneration Committee
Nomination Committee member
Audit Committee member
Risk Management Committee member

Interests in shares and options

Ordinary shares in Corporate Travel Management Limited

254,312

Directors’ Report (continued)

Information on Directors (continued)

Laura Ruffles – MBA, GAICD, Executive Director, CEO

Experience and expertise

Laura Ruffles is CTM’s Chief Executive Officer and, in late 2015, was appointed
an Executive Director in recognition of her leadership contribution. She has
significant local, regional and global industry experience and, in a career of more
than 20 years, has led teams across sales, account management, operations
and technology. Laura Ruffles is responsible for all aspects of CTM’s business
performance. She joined CTM in 2010 and has been a key contributor to its
successful growth.

Prior to joining Corporate Travel Management, Laura was a Director at American
Express, where she was responsible for managing the small and medium
enterprises business function. She is also an Alternate Director of the Australia
Federation of Travel Agents.

Listed Company Directorships
(including key dates)

None.

Special responsibilities

Executive Director

Interests in shares and options

Ordinary shares in Corporate Travel Management Limited
Share appreciation rights over ordinary shares in Corporate
Travel Management Limited

118,124

450,000

Admiral Robert J. Natter, US Navy (Ret.) – Independent Non-Executive Director

Experience and expertise

Robert Natter retired from active military service a decade ago and now has more
than 10 years of experience in both the government and private sectors in the
North American market.

In his Navy career, Robert Natter served as the Commander of the U.S. Seventh
Fleet operating throughout Asia and the Indian Ocean; Commander in Chief of
the U.S Atlantic Fleet; and the first Commander of U.S. Fleet Forces, overseeing
all Continental U.S. Navy bases, facilities and training operations.

Until May of this year, Robert Natter served as Chairman of the U.S. Naval
Academy Alumni Association, and he now serves on the Naval Academy
Foundation Board. He served for 10 years on the Board of BAE systems, Inc. (the
U.S. based subsidiary of BAE Systems Plc).

He currently serves on the Board of Allied Universal (a privately held US
based security company with over 160,000 employees) and is Chairman of the
Governance and Compensation Committees. He also served on the Board of
the U.S. National Navy Seal Museum and was Chairman of G4S Government
Solutions Inc.

Listed Company Directorships
(including key dates)

Special responsibilities

NOVONIX Limited (since 2017)

Remuneration Committee member
Nomination Committee member

Interests in shares and options

Ordinary shares in Corporate Travel Management Limited

107,200

Company secretaries
• Mr Steve Fleming (Joint Company Secretary).

• Mrs Suzanne Yeates (Joint Company Secretary).

Steve Fleming, BBus (Accounting), CA

Steve Fleming is CTM’s Global 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 Bank
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.

Suzanne Yeates, BBus (Accounting), CA

Suzanne Yeates is a Chartered Accountant, Founder and Principal of Outsourced Accounting Solutions Pty Ltd.
She holds similar positions with other public and private companies.

Meetings of Directors
The numbers of meetings of the Group’s Board of Directors and of each Board Committee held during the year
ended 30 June 2018, and the numbers of meetings attended by each Director were:

Director

Full meetings
of directors

Committee meetings

Audit

Risk
Management

Remuneration

Nomination

Mr Tony Bellas

Mr Stephen Lonie

Mr Greg Moynihan

Mr Jamie Pherous

Admiral Robert J. Natter

Ms Laura Ruffles

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.

Directors’ Report (continued)

Remuneration report
The Directors are pleased to present Corporate Travel Management Limited’s 2018 remuneration report,
outlining key aspects of the Group’s remuneration policy and framework, as well as remuneration awarded in the
year.

The report is structured as follows:

1. CTM’s remuneration framework.

2. Key elements of remuneration.

3. Who is covered by this report.

4. Details of Executive KMP remuneration.

5. Contractual arrangements for Executive KMP.

6. Non-executive director arrangements.

7. Additional required disclosures.

1. CTM’s remuneration framework

The following section outlines CTM’s remuneration framework and the policies that underpin it. Information is
presented in a question and answer format.

Key questions

CTM’s approach

Remuneration framework

1. What is the objective

of the Group’s
executive reward
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 the
delivery of executive rewards.

The Board ensures that the approach to executive reward satisfies the following
key criteria for good reward governance practices:

• Competitiveness and reasonableness;

• Alignment to the interests of shareholders;

• Performance linkage and alignment of executive compensation;

• Transparency; and

• Capital management.

2. What are the key

The framework is based on the following key elements:

elements of the
remuneration
framework?

• Alignment to shareholders’ interests, which:

ο Has economic profit as a core component of plan design;

ο 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

ο Attracts and retains high calibre executives.

• Alignment to program participants’ interests, which:

ο Rewards capability and expertise;

ο Reflects competitive reward for contribution to growth in shareholder wealth;

ο Provides a clear structure for earning rewards; and

ο Provides recognition for individual and team contributions.

Remuneration report (continued)

1. CTM’s remuneration framework (continued)

Key questions

CTM’s approach

3. What is the role of
the Remuneration
Committee?

The Remuneration Committee is a Committee of the Board and its
role is to advise the Board 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.

Further info

Section 2

4. What proportion of
remuneration is at
risk?

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 proportion of short-term
incentives (STI) and long-term incentives (LTI) (relative to fixed pay)
is set at the start of the financial year, along with all relevant KPI’s.

Section 4

Remuneration in 2018

5. How is CTM’s
performance
reflected in this
year’s remuneration
outcomes?

6. What are the
performance
measures for LTI?

7. What changes

have been made
to the remuneration
structure in FY18?

8. Are any changes
planned for FY19?

CTM’s remuneration outcomes are strongly linked to delivery of
return on investment to shareholders over the short and long term.

Section 4

Short term: CTM has delivered strong performance in 2018 in
terms of EBITDA and other financial targets, as well as non-financial
strategic targets, which has resulted in corresponding payout of STI
within the range of 50-89% for Executive KMP.

Long term: The three-year performance period for the FY16 LTI
completed on 30 June 2018. Based on strong growth in earnings
per share (EPS), the performance conditions pertaining to the FY16
share appreciation rights have been achieved.

CTM’s Board is committed to ensuring executives’ remuneration
links to return on investment for shareholders and, therefore, will
continue to use EPS growth as the primary performance metric for
the FY19 LTI award.

Target earnings per share growth of 10% per annum average over
a three-year vesting period.

Section 4

There have been no significant changes to the approach to
remuneration in FY18.

There are no significant changes planned for FY19. However, in line
with previous years, the Board will review and adjust (if necessary)
the threshold and performance levels for the performance objectives
applicable to the STI and LTI awards.

Directors’ Report (continued)

Remuneration report (continued)

2. Key elements of remuneration

The executive remuneration framework has three components:

• Fixed pay;

• Short-term performance incentives (STI); and

• Long-term incentives through participation in the Share Appreciation Rights Plan (LTI).

Additional detail on each of these components is included in the following table.

Key elements of remuneration

Fixed Pay
Fixed pay includes base remuneration and benefits
and is 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.

In Australia, superannuation contributions are paid
in accordance with relevant Government legislation,
to employee nominated defined contribution
superannuation funds.

STI
Based on a pre-determined profit targets set annually
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. 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 increased for performance above the profit target, in
order to provide an incentive for superior performance.

Executives have a target STI opportunity depending
on the accountabilities of the role and impact on the
organisation or business unit performance.

STI (continued)
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.

The Remuneration Committee is responsible for
assessing whether the KPIs are met. The Remuneration
Committee also has absolute discretion to adjust short-
term incentives, in light of unexpected or unintended
circumstances.

Additional detail on the STI scheme is included in Section
4: Details of Executive KMP remuneration.

LTI
The Group has a long term incentive scheme using a
Share Appreciation Rights Plan. The Plan is designed
to focus executives on delivering long-term shareholder
returns.

Under the Plan, participants are granted rights only if
performance conditions pertaining to the earnings per
share growth are met and the employee is still employed
at the end of the three year vesting period.

Participation in the Plan is at the Board’s absolute
discretion and no individual has a contractual right to
participate in the Plan.

Additional detail on the LTI scheme is included in Section
4: Details of Executive KMP remuneration.

Remuneration report (continued)

3. Who is covered by this report

This Remuneration Report sets out remuneration information for CTM’s Non-Executive Directors, Executive
Directors and other key management personnel (KMP) of the Group, which includes the following persons:

Board of Directors

Non-Executive Directors
Mr Tony Bellas.
Mr Stephen Lonie.
Mr Greg Moynihan.
Admiral Robert J. Natter.

Executive Directors
Mr Jamie Pherous.
Ms Laura Ruffles.

Other Group KMP

Mr Steve Fleming - Global CFO.
Mr Larry Lo - CEO - Asia.
Mr Chris Thelen - CEO - North America.
Ms Debbie Carling - CEO - Europe.

Greg McCarthy was appointed CEO - Australia and New Zealand effective 1 July 2018 and will be a KMP for the
2019 financial year.

4. Details of Executive KMP remuneration

Remuneration outcomes are disclosed in accordance with Australian accounting standards.

Fixed remuneration

Variable remuneration

Cash
salary
and fees
$

Non-
cash
benefits*
$

Leave#
$

Super-
annuation
$

Short-
term
Incentive
$

Long-term
incentive^
$

Perfor-
mance
Related
%

Total
$

Name

Year

Executive Directors

Jamie Pherous

Laura Ruffles

2018

2017

2018

2017

460,319

448,221

588,219

538,462

8,904

3,203

9,776

(67,634)

62,730

63,956

200,000

225,000

735,156

679,319

10,954

11,032

29,919

(7,182)

106,516

533,000

274,855 1,543,463

79,654

360,000

185,623 1,167,589

Other key management personnel of the Group

Steve Fleming

Larry Lo

Chris Thelen

Debbie Carling

2018

2017

2018

2017

2018

2017

2018

2017

486,417

410,024

501,051

501,629

579,524

625,775

292,391

251,889

4,723

(2,227)

(9,447)

(5,497)

(8,916)

30,416

(1,500)

5,560

45,299

31,464

2,963

3,071

3,641

2,519

173,392

167,926

184,361

143,323

128,783

211,949

134,391

839,499

107,495

719,405

134,391

813,319

107,477

750,003

102,909

802,300

40,592

908,732

138,714

119,699

552,945

83,963

57,336

401,267

Total
Executive KMP

2018 2,907,921
2017 2,776,000

19,858

13,259

221,149 1,358,250

766,245 5,286,682

25,531

(46,564)

180,664 1,192,161

498,523 4,626,315

27%

33%

52%

47%

37%

38%

39%

33%

29%

28%

47%

35%

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 2019, to ensure continued alignment with the
Group’s financial and strategic objectives.

* Non-cash benefits represents the cost to the Group of providing parking.

# Leave represents the movement in the annual leave and long service leave provision balances. The accounting value may be negative, for
example, when an Executive’s leave balance decreases as a result of taking more than the entitlement accrued during the year.

^ Long-term incentive represents amounts expensed during the year relating to share appreciation rights granted to date and not yet vested.

Directors’ Report (continued)

Remuneration report (continued)

4. Details of Executive KMP remuneration (continued)

Short-term incentive (STI)
The key components of the Group’s STI structure as follows:

Purpose

Participants

Performance
conditions

The STI scheme is designed to reward and recognise outstanding employee performance,
provided the Group can also demonstrate it has created value for its shareholders.

All Executive KMP participate in the STI scheme.

For the year ended 30 June 2018, the key performance indicators (KPIs) linked to STI
plans were based on the Group objectives, with the key financial metric being consolidated
Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA). Other KPIs’ include
the achievement of business plans, client retention and satisfaction, and staff satisfaction.
All KPIs are measurable and have performance benchmarks.

Structure

If the Group achieves a pre-determined EBITDA target set by the Remuneration Committee,
a short-term incentive (“STI”) pool is available to executives and other eligible participants.

Executives have a target STI opportunity depending on the accountabilities of the role and
impact on the organisation or business unit performance. The average maximum target
bonus opportunity for Executive KMP in the 2018 year was approximately 47% (2017: 42%)
of base fixed remuneration and benefits.

Payments made under the STI plan are highly correlated with the Group’s financial results. The relationship
between STI and Corporate Travel Management Ltd’s performance over the last 5 years is set out in the
following table.

Item

2018

2017

2016

2015

2014

Profit for the year attributable to owners of
Corporate Travel Management Ltd ($’000)

Basic earnings per share (cents)

Dividend payments ($’000)

Dividend payout ratio (%)

Increase / (decrease) in share price %

Total KMP STI as a percentage of profit /
(loss) for the year (%)

76,712

54,556

42,134

26,367

15,845

72.4

34,964

45.6%

19.0%

53.5

27,554

50.5%

63.9%

43.2

18,539

44.0%

35.8%

28.1

12,609

47.8%

60.6%

19.0

9,129

57.6%

56.6%

1.9%

2.2%

2.1%

2.7%

0.9%

For each short term incentive included in the table on page 17, the percentage split of the available bonus
awarded and forfeited is disclosed in the following table.

Name

Jamie Pherous

Laura Ruffles

Steve Fleming

Larry Lo

Chris Thelen

Debbie Carling

2018

2017

Awarded
%

Forfeited
%

Awarded
%

Forfeited
%

80%

89%

80%

50%

80%

20%

11%

20%

50%

20%

90%

80%

60%

80%

100%

10%

20%

40%

20%

Directors’ Report (continued)

Remuneration report (continued)

4. Details of Executive KMP remuneration (continued)

Long-term incentive (LTI)
The Group introduced a long-term incentive scheme using a Share Appreciation Rights Plan during the 2013
financial year. The key components of the Plan as follows.

Purpose

Eligibility

Instrument

Performance
period

Performance
hurdles

Vesting

The purpose of the LTI scheme at CTM is to provide long-term incentives to senior executives to
deliver long-term shareholder returns.

Participation in the plan is at the Board’s absolute discretion and no individual has a contractual
right to participate in the plan.

Awards under this plan are made in the form of Share Appreciation Rights (SARs).

Performance is measured over a three-year period. The FY18 grant has a performance period
commencing 1 July 2017 and ending 30 June 2020.

The SARs are subject to average Earnings per Share (EPS) growth over the performance period,
with target performance being set at 10% average EPS growth.

The SARs will only vest if the performance hurdles are met and the employee remains in service.
Once vested, a participant will be deemed to have automatically exercised all vested SARs and
CTM will settle in line with the SARs Plan.

Upon vesting, the conversion of a SAR to an equity or cash based settlement, is determined
using a formula referencing the relevant share prices of CTM, the number of SARs exercised,
and is at the Board’s sole discretion.

Grants made during FY18 will vest on a scaled basis as follows:

Minimum EPS growth from
1 July 2017 to 30 June 2020

Portion of SARs that become
performance qualified

80% achievement of target growth rate
(i.e. 8% EPS growth)

90% achievement of target growth rate
(i.e. 9% EPS growth)

50% of SARs

75% of SARs

100% achievement of target growth rate
(i.e. 10% EPS growth)

100% of SARs

SARs will become performance qualified on a straight-line basis where average EPS growth falls
between 8-10% EPS growth.

Termination/
forfeiture

Upon termination of employment, all unvested SARs will automatically be forfeited by the
participant, unless the Board otherwise determines, in its absolute discretion, to permit some or
all of the SARs to vest.

Dilution

Dilution that may result from securities being issued under CTM’s LTI plan is capped at the limit
set out in ASIC Class Order 14/1000, which provides that the number of unissued securities
under those plans must not exceed five per cent of the total number of the securities of that
class at the time of the relevant offer.

Hedging

Consistent with the Corporations Act 2001, participants are prohibited from hedging their
unvested performance rights.

Directors’ Report (continued)

Remuneration report (continued)

4. Details of Executive KMP remuneration (continued)

The following table sets out details of the SARs granted to key management personnel during the financial year
under the 2018 allocation and vested under the 2015 allocation, as well as details of SARs granted under prior
year awards that have not yet vested as at 30 June 2018.

Year in
which
rights may
vest

Year of
grant

Number
of rights
granted

Value per
right at
grant date

Number
of rights
vested
during the
year

Forfeited
%

Max value
yet to vest
$

Vested %

Laura
Ruffles

Steve
Fleming

Larry
Lo

Chris
Thelen

Debbie
Carling

2018

2017

2016

2015

2018

2017

2016

2015

2018

2017

2016

2015

2018

2017

2016

2018

2017

2016

2021

2020

2019

2018

2021

2020

2019

2018

2021

2020

2019

2018

2021

2020

2019

2021

2020

2019

150,000

200,000

100,000

75,000

100,000

75,000

100,000

75,000

40,000

$2.49

$1.62

$1.26

$1.06

$2.49

$1.62

$1.26

$1.06

$2.49

$1.62

$1.26

$1.06

$2.49

$1.62

$2.49

$1.62

$1.26

100,000

100%

100,000

100%

100,000

100%

374,244

324,734

125,699

187,122

121,775

94,274

187,122

121,775

94,274

187,122

121,775

187,122

121,775

50,280

5. Contractual arrangements for Executive KMP

Each Executive KMP member, including the Managing Director, has a formal contract, known as a service
agreement. These service agreements are of a continuing nature and have no fixed term of service. There were
no changes to the service agreements for Executive KMP in FY18.

The Group requires Executive KMP to provide six months’ written notice of their intention to leave CTM.
Termination payments are assessed on a case-by-case basis and are capped by law. As is the case for all
employees, KMP employment may be terminated immediately by serious misconduct.

Directors’ Report (continued)

Remuneration report (continued)

6. Non-Executive director arrangements

In contrast to Executive KMP remuneration, the remuneration of CTM’s Non-Executive Directors is not linked to
performance, which is consistent with Non-Executive Directors being responsible for objective and independent
oversight of the Group.

Non-executive Directors’ fees and payments are reviewed annually by the Board. The Chairman’s fees
are determined independently to the fees of Non-Executive Directors. The Chairman is not present at any
discussions relating to determination of his own remuneration.

Non-Executive Directors have not received any fees other than those described in this section, and do not
receive bonuses or any other incentive payments or retirement benefits. Non-Executive Directors are reimbursed
for expenses properly incurred in performing their duties as a Director of CTM.

Directors’ fees
The current base fees were last increased with effect from 25 September 2017.

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 $700,000
(2017: $700,000).

Details of the remuneration of the Non-Executive Directors of the Group are set out in the following table.

Name

Tony Bellas

Stephen Lonie

Greg Moynihan

Admiral Robert J. Natter

Total Non-Executive Director
Remuneration

Year

2018

2017

2018

2017

2018

2017

2018

2017

2018

2017

Director fees Super-annuation*

Total

134,904

120,000

107,342

100,000

107,342

100,000

131,797

126,688

481,385

446,688

12,816

11,400

10,198

9,500

10,198

9,500

33,212

30,400

147,720

131,400

117,540

109,500

117,540

109,500

131,797

126,688

514,597

477,088

* Superannuation contributions required under the Australian superannuation guarantee legislation are made and are deducted from the
Directors’ overall fee entitlements.

Directors’ Report (continued)

Remuneration report (continued)

7. Additional required disclosures

Equity instruments held by key management personnel
The number of ordinary shares held during the financial year by CTM’s directors and KMP is set out in the
following table:

Ordinary shares

Balance at
30 June 2017

Purchased

Disposed

Received on
vesting of
rights

Other
changes
during the
year

Balance at
30 June 2018

Non-Executive Directors

Tony Bellas

Stephen Lonie

Greg Moynihan

Admiral Robert J.
Natter

Executive Directors

243,836

254,312

143,200

(23,000)

10,000

(46,000)

Jamie Pherous

21,650,000

Laura Ruffles

98,691

Other key management personnel of the Group

Steve Fleming

Larry Lo

Debbie Carling

Chris Thelen

48,145

25,000

11,307

905,547

(1,165,000)

(50,000)

69,433

(92,447)

(905,000)

69,433

11,537

196,552

220,836

254,312

107,200

20,485,000

118,124

25,131

94,433

22,844

197,099

* Equity portion of deferred consideration payment in relation to the Chambers Travel acquisition.

All equity transactions with key management personnel have been entered into under terms and conditions no
more favourable than those the Group would have adopted if dealing at arm’s length.

Shares under option
There are currently no unissued ordinary shares of CTM under option. No share options were granted as equity
compensation benefits during the financial year (2017: nil).

Other transactions and balances with key management personnel
Deferred consideration balance of $8.7 million was paid to Chris Thelen and a deferred consideration balance of
$0.5 million was paid to Debbie Carling, in relation to the Chambers Travel acquisition. The remaining balance of
$13.6 million is payable to Chris Thelen within 12 months and is included in the Acquisition payable balance in
note 11.

During the year ended 30 June 2018, Jamie Pherous, an executive director, entered into a transaction with the
company under normal commercial terms for the provision of event travel management. A balance of $377,955
is receivable as at 30 June 2018 which has been subsequently paid after period end.

Directors of the Group hold other directorships in public corporations, 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.

Insurance of officers and indemnities
An Officers’ Deed of Indemnity, Access and Insurance is in place for Directors, 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 Group, or to intervene in any proceedings to which the Group is a party, for the
purpose of taking responsibility on behalf of the Group for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf of the Group with leave of the Court under section
237 of the Corporations Act 2001.

Non-audit services
The Group may decide to employ the auditor on assignments in addition to its statutory audit duties, where the
auditor’s expertise and experience with the Group are important.

Details of the amounts paid or payable to PricewaterhouseCoopers, the auditor of the consolidated entity, for
audit and non-audit services provided during the year are set out in note 28.

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.

Auditor’s 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 Group is of a kind referred to in Class Order 2016/191, issued by the Australian Securities and Investments
Commission, relating to the ‘’rounding off’’ of amounts in the Directors’ Report. Amounts in the Directors’ Report
have been rounded off in accordance with that Class Order to the nearest thousand dollars or in certain cases,
to the nearest dollar.

Signed in accordance with a resolution of the Directors.

Mr Tony Bellas

Chairman

Brisbane, 22 August, 2018

Mr Jamie Pherous

Managing Director

Corporate Governance Statement
The Board and management of Corporate Travel Management Limited are committed to achieving and
demonstrating the highest standards of corporate governance. Corporate Travel Management Limited
has reviewed its corporate governance practices against the Corporate Governance Principles and
Recommendations (3rd edition) published by the ASX Corporate Governance Council.

The 2018 corporate governance statement is dated as at 30 June 2018 and reflects the corporate governance
practices in place throughout the 2018 financial year. The 2018 corporate governance statement was approved
by the Board on 22 August 2018. A description of the Group’s current corporate governance practices is set out
in the Group’s corporate governance statement which can be viewed at www.travelctm.com/resources/investor-
relations/corporate-governance/.

Consolidated Statement
of Financial Position
As at 30 June 2018

Revenue

Other income

Total revenue and other income

Operating expenses

Employee benefits

Occupancy

Depreciation and amortisation

Information technology and telecommunications

Travel and entertainment

Administrative and general

Total operating expenses

Finance costs

Profit before income tax

Income tax expense

Profit for the year

Profit attributable to:

Owners of Corporate Travel Management Limited

Non-controlling interests

Other comprehensive income

Items that may be reclassified to profit or loss:

Note

2018
$’000

2017
$’000

371,030

324,391

1,206

1,483

372,236

325,874

(186,214)

(175,175)

(12,429)

(17,833)

(31,281)

(4,554)

(12,657)

(16,157)

(20,239)

(5,181)

(13,029)

(15,396)

(265,340)

(244,805)

(3,226)

(3,443)

103,670

(23,088)

77,626

(19,788)

80,582

57,838

24(b)

76,712

3,870

80,582

54,556

3,282

57,838

Exchange differences on translation of foreign operations

16,266

(8,639)

Changes in the fair value of cash flow hedges

Other comprehensive income for the period, net of tax

Total comprehensive income for the year

Total comprehensive income for the year attributable to:

Owners of Corporate Travel Management Limited

Non-controlling interests

16,353

96,935

92,359

4,576

96,935

360

(8,279)

49,559

46,130

3,429

49,559

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)

72.4

71.4

53.5

52.5

The above Consolidated Statement of Comprehensive Income should be read in conjunction with the
accompanying notes.

ASSETS

Current assets

Cash and cash equivalents

Trade and other receivables

Other current assets

Total current assets

Non-current assets

Plant and equipment

Intangible assets

Deferred tax assets

Total non-current assets

TOTAL ASSETS

LIABILITIES

Current liabilities

Trade and other payables

Borrowings

Income tax payable

Provisions

Total current liabilities

Non-current liabilities

Trade and other payables

Borrowings

Provisions

Deferred tax liabilities

Total non-current liabilities

TOTAL LIABILITIES

NET ASSETS

EQUITY

Contributed equity

Reserves

Retained earnings

Capital and reserves attributed to owners of the company

Non-controlling interests – equity

TOTAL EQUITY

Note

2018
$’000

2017
$’000

84,297

79,217

252,237

202,435

4,203

4,462

340,737

286,114

6,118

5,262

451,597

439,797

6,389

8,982

464,104

454,041

804,841

740,155

253,621

233,049

14,677

7,310

15,786

18,122

8,238

14,512

291,394

273,921

2,872

29,301

1,833

7,949

41,955

24,868

27,301

2,653

10,008

64,830

333,349

338,751

471,492

401,404

13(a)

13(b)

13(c)

24(b)

301,747

281,847

19,369

133,218

454,334

17,158

12,999

91,470

386,316

15,088

471,492

401,404

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying
notes.

FINANCIAL STATEMENTSFINANCIAL STATEMENTS

Consolidated Statement of Changes in Equity
For the year ended 30 June 2018

Consolidated Statement of Cash Flows
For the year ended 30 June 2018

Note

Contributed
Equity
$’000

Retained
Earnings
$’000

Other
Reserves
$’000

Total
$’000

Non-
Controlling
Interests
$’000

Total
Equity
$’000

Balance at 30 June 2016

175,231

63,802

19,645

258,678

14,765

273,443

Profit for the period as reported
in 2017 financial statements

Other comprehensive income
(net of tax)

Total comprehensive income
for the year

54,556

3,282

57,838

(8,426)

147

(8,279)

54,556

(8,426)

46,130

3,429

49,559

Transactions with owners in their capacity as owners:

Shares issued

Dividends paid

Non-controlling interests
disposal/acquisition of
subsidiary

Share based payments

13(a)

106,616

(27,554)

106,616

(27,554)

(2,960)

(30,514)

666

(520)

146

(146)

106,616

(26,888)

2,300

1,780

2,300

81,508

(3,106)

78,402

Balance at 30 June 2017

281,847

91,470

12,999

386,316

15,088

401,404

Profit for the period as reported
in 2018 financial statements

Other comprehensive income
(net of tax)

Total comprehensive income
for the year

76,712

3,870

80,582

15,647

707

16,354

76,712

15,647

92,359

4,577

96,936

Transactions with owners in their capacity as owners:

Shares issued

Dividends paid

Share based payments

13(a)

19,900

(34,964)

19,900

(34,964)

(2,507)

(37,471)

(9,277)

Balance at 30 June 2018

301,747

133,218

19,369

454,334

17,158

471,492

19,900

(34,964)

(9,277)

(24,341)

(2,507)

(26,848)

Cash flows from operating activities

Receipts from customers (inclusive of GST)

Payments to suppliers and employees (inclusive of GST)

Transaction costs relating to acquisition of subsidiary

Interest received

Finance costs

Income tax paid

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

Proceeds from sale of financial assets

Purchase of controlled entities, contingent consideration

Payments relating to purchase of controlled entities, net of cash acquired

Proceeds from sale of controlled entities

Net cash flows from investing activities

Cash flows from financing activities

Proceeds from issue of new shares

Share issue transaction costs

Proceeds from borrowings

Repayments of borrowings

Dividends paid to company’s shareholders

Dividends paid to non-controlling interests in subsidiaries

Net cash flows from financing activities

Net increase / (decrease) 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

Note

2018
$’000

2017
$’000

337,468

334,806

(217,621)

(242,836)

(151)

131

(2,584)

(22,851)

(771)

197

(2,160)

(19,958)

94,392

69,278

(2,676)

(11,057)

(1,316)

(12,634)

(33,476)

(3,683)

(34,308)

(69,418)

394

(50,876)

(117,269)

(38)

114,917

(117,995)

(34,964)

(2,507)

(40,587)

2,929

2,151

79,217

84,297

72,181

(2,003)

57,134

(48,039)

(27,554)

(2,960)

48,759

768

(2,729)

81,178

79,217

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying
notes.

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

FINANCIAL STATEMENTSFINANCIAL STATEMENTS

Notes to the Consolidated
Financial Statements.

Basis of preparation

Critical estimates, assumptions and judgements

Performance

This section explains the results and performance of the Group. It provides a breakdown of those
individual line items in the financial statements, that the Directors consider most relevant in the
context of the operations of the Group, or where there have been significant changes that required
specific explanations. It also provides detail on how the performance of the Group has translated
into returns to shareholders.

1. Segment reporting

2. Revenue

3. Earnings per share

4. Dividends paid and proposed

Income tax expense

6. Expenses

Group structure

This section explains significant aspects of the Group structure and how changes have affected
the financial position and performance of the Group.

7. Business combinations

Intangible assets

Capital

A core part of the Group’s operations is to maintain a strong financial position and low levels of
external debt. This section explains how the Group has performed in areas relating to capital
management.

9. Cash and cash equivalents

10. Trade and other receivables

11. Trade and other payables

12. Provisions

13. Contributed equity, reserves and retained earnings

14. Borrowings

Risk

This section discusses the Group’s exposure to various financial risks, explains how these affect
the Group’s financial position and performance, and what the Group does to manage these risks.

15. Impairment testing of goodwill

16. Financial risk management

Unrecognised items

This section provides information about items that are not recognised in the financial statements,
but could potentially have a significant impact on the Group’s financial position and performance.

17. Contingent liabilities

18. Commitments

19. Events occurring after the reporting period

Other items

This section provides information on items which require disclosure to comply with Australian
Accounting Standards and other regulatory pronouncements, however are not considered critical
in understanding the financial performance of the Group.

20. Other current assets

21. Plant and equipment

22. Fair value measurement

23. Share-based payments

24. Interest in other entities

25. Related party transactions

26. Parent entity financial information

27. Deed of cross guarantee

28. Auditors’ remuneration

29. Summary of significant account policies

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSCritical estimates, assumptions 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.

In the process of applying the Group’s accounting
policies, management is required to exercise
judgement. Those judgements involving estimations
that may have an effect on the amounts recognised in
the financial statements.

The Group makes estimates, assumptions and
judgements concerning the future. The resulting
accounting estimates will, by definition, seldom
equal the related actual results. The judgements,
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:

• Impairment of goodwill

ο Refer note 15 – Impairment testing of goodwill.

• Allowance for doubtful debts

ο Refer note 10 – Trade and other receivables.

• Override revenue

ο Refer note 2 – Revenue.

• Software developed or acquired not as part of a

business combination

ο Refer note 8 – Intangible assets.

iii) Foreign operations

The results and financial position of all the foreign
operations that have functional currencies different
to the presentation currencies 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.

Basis of preparation

Basis of consolidation

a)
The consolidated financial statements comprise the
financial statements of Corporate Travel Management
Limited and its controlled entities (“CTM” or “the
Group”).

Subsidiaries are all entities over which the Group has
control. The Group controls an entity when the Group
is exposed to, or has right to, variable returns from
its involvement with the entity and has ability to affect
those returns through its power to direct the activities
of the 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.

Subsidiaries are fully consolidated from the date
on which control is transferred to the Group and
deconsolidated from the date that control ceases.

b) 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 Group’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 in the Consolidated Statement of Comprehensive
Income 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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSPerformance

This section explains the results and performance of the Group. It provides a breakdown of those individual line
items in the financial statements, that the Directors consider most relevant in the context of the operations of the
Group, or where there have been significant changes that required specific explanations. It also provides detail on
how the performance of the Group has translated into returns to shareholders.

Segment reporting

Description of segments

a)
The operating segments are based on the reports reviewed by the group of key senior managers who assess
performance and determine resource allocation.

The Chief Operating Decision Makers (“CODM”) are Managing Director Jamie Pherous (MD), Global Chief
Financial Officer Steve Fleming (CFO) and Global Chief Operating Officer Laura Ruffles (COO).

The CODM considers, organises and manages the business from a geographic perspective. The CODM has
identified four operating segments being Travel Services Australia and New Zealand, Travel Services North
America, Travel Services Asia, and Travel Services Europe. There are currently no non-reportable segments.

Segment information provided to the Chief Operating Decision Makers

b)
The CODM assess 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 2018 is
as follows:

Travel
services

Australia
and New
Zealand
$’000

2018

Travel
services

North
America
$’000

Asia
$’000

Europe
$’000

Other*
$’000

Total
$’000

108,519

127,003

53,816

81,692

371,030

44,038

37,888

19,541

34,232

(10,249)

125,450

131

3,226

2,045

15,788

23,088

Total revenue from
external parties

Adjusted EBITDA

Interest revenue

Interest expense

Depreciation

Amortisation

Income tax expense

Total segment assets

117,863

262,535

160,757

250,755

12,931

804,841

Total assets include:

Non-current assets

- Plant and equipment

- Intangibles

2,581

57,799

1,522

646

1,369

6,118

201,760

38,450

149,851

3,737

451,597

Total segment liabilities

49,292

34,334

88,371

84,708

76,644

333,349

* The other segment includes the Group support service, created to support the operating segments and growth
of the global business.

Segment reporting (continued)

Segment information provided to the Chief Operating Decision Makers (continued)

Travel
services

Australia
and New
Zealand
$’000

2017

Travel
services

North
America
$’000

Asia
$’000

Europe
$’000

Other*
$’000

Total
$’000

Total revenue from
external parties

Adjusted EBITDA

Interest revenue

Interest expense

Depreciation

Amortisation

Income tax expense

91,502

126,647

56,700

49,238

304

324,391

36,328

35,883

18,064

18,364

(10,024)

98,615

197

3,443

1,883

14,274

19,788

Total segment assets

110,265

248,171

144,012

226,294

11,413

740,155

Total assets include:

Non-current assets

- Plant and equipment

- Intangibles

Total segment liabilities

2,705

55,745

44,289

760

194,482

61,575

455

37,947

77,319

1,342

148,834

5,262

4,014

441,022

65,534

90,034

338,751

Other segment information

i) Adjusted EBITDA

The reconciliation of adjusted EBITDA to operating profit before income tax is provided as follows:

Adjusted EBITDA

Interest revenue

Finance costs

Depreciation

Amortisation

One off items

Gain on sale of subsidiary

Acquisition / non-recurring costs

Profit before income tax from continuing operations

Accounting policy

2018
$’000

2017
$’000

125,450

98,615

131

(3,226)

(2,045)

197

(3,443)

(1,883)

(15,788)

(14,274)

(852)

103,670

912

(2,498)

77,626

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 CODM has been identified as a group of executives, which is the steering
committee that makes strategic decisions.

Goodwill is allocated by management to groups of cash-generating units on a segment level.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: PERFORMANCENOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: PERFORMANCE

2. Revenue

2. Revenue (continued)

Revenue from the sale of travel services

Revenue from other sources

Rental income

Interest

Other revenue

Total revenue

Accounting policy

2018
$’000

2017
$’000

369,086

323,190

131

1,720

1,944

133

197

871

1,201

371,030

324,391

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 are met. The amount of revenue is not
considered to be reliably measured 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.

Revenue is recognised for the major business activities as follows:

• Revenue from sale of travel services

Revenue from sale of travel services represents net revenue earned via commissions and fees, and also
includes any commission payable by suppliers after completion of the transaction. Commission and fees
from the sale of travel services are recognised when a travel booking is received and travel documents are
issued. Commission payable by suppliers includes PDC’s, which is recognised upon receipt or confirmed
commissionable by supplier, the point at which it can be reliably measured, and it is probable that future
economic benefits will flow to the entity.

Revenue relating to volume incentives (override revenue) are recognised at the amount receivable when
annual targets are likely to be achieved.

• Rental income

Rental income is recognised when the right to receive revenue is established.

•

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.

Critical estimates, assumptions and judgements

• 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:

ο 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.

ο 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.

Critical estimates, assumptions and judgements (continued)

ο 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.

Earnings per share

3.
The following information reflects the income and share data used in the basic and diluted earnings per share
computations:

2018
$’000

2017
$’000

Net profit attributable to ordinary equity holders of Corporate Travel Management
Limited

76,712

54,556

2018
Shares

2017
Shares

Weighted average number of ordinary shares used as a denominator in
calculating basic earnings per share

105,941,226

101,929,958

Adjustments for calculation of diluted earnings per share:
Share appreciation rights (i)

Deferred shares on acquisitions (ii)

Weighted average number of ordinary shares and potential ordinary shares
used as the denominator in calculating diluted earnings per share

1,247,408

1,489,362

249,644

567,661

107,438,278

103,986,981

i) Share appreciation rights

Share Appreciation Rights (SARs) are considered to be potential ordinary shares. They have been included
in the determination of diluted earnings per share if the required hurdles would have been met based on the
Group’s performance up to the reporting date, and to the extent to which they are dilutive. The options have not
been included in the determination of basic earnings per share. Details relating to the options are set out in note
23.

ii) Deferred shares

Deferred shares on acquisitions relates to shares offered as part of the contingent consideration payable
component of a business combination. They have been included in the determination of diluted earnings per
share if the required hurdles would have been met based on the Group’s performance up to the reporting date,
and to the extent to which they are dilutive. The deferred shares have not been included in the determination of
basic earnings per share.

Accounting policy

Basic earnings per share are calculated as net profit attributable to owners of the Group, 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 of 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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: PERFORMANCENOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: PERFORMANCE

4. Dividends paid and proposed

Ordinary shares

Final franked dividend paid for the year ended 30 June 2017 of 18.0 cents (2016:
15.0 cents) per fully paid share

Interim franked dividend for the year ended 30 June 2018 of 15.0 cents (2017:
12.0 cents) per fully paid share

2018
$’000

2017
$’000

19,048

14,928

15,916

12,626

34,964

27,554

Approved by the Board of Directors on 22 August 2018 (not recognised as a
liability as at 30 June 2018)

Final franked dividend for the year ended 30 June 2018 of 21.0 cents (2017: 18.0
cents) per fully paid share

22,698^

18,940^

^ This dividend does not include shares issued post balance sheet date as part of the vesting of share appreciation rights.

The final dividend recommended after 30 June 2018 will be 50% franked out of existing franking credits, or out
of franking credits arising from the payment of income tax in the year ending 30 June 2019.

Franking credit balance

Franking credits available for subsequent reporting periods based on a tax rate of
30% (2017: 30%)

2018
$’000

2017
$’000

4,993

6,881

The above amounts are calculated from the balance of the franking account as at the end of the reporting
period, adjusted for franking credits and debits that will arise from the settlement of liabilities of or receivables for
income tax and dividends after the end of the year.

Accounting policy

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.

Income tax expense

Current income tax

Current tax on profits for the year

Adjustments for current tax of prior periods

Deferred income tax

(Increase) decrease in deferred tax assets

Increase (decrease) in deferred tax liabilities

Income tax expense

Numerical reconciliation of income tax expense to prima facie tax payable

Accounting profit before income tax

Tax at the Australian tax rate of 30% (2016: 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

Changes in tax rates

Adjustments for current tax of prior periods

Research and development tax credit

Unrecognised tax losses

Income tax expense

Deferred income tax

Deferred tax assets

The balance comprises temporary differences attributable to:

Provisions

Employee benefits

Other

Set off against deferred tax liabilities

Net deferred tax assets

Deferred tax liabilities

The balance comprises temporary differences attributable to:

Depreciation / amortisation

Accrued income

Other

Set off against deferred tax assets

Net deferred tax liabilities

2018
$’000

2017
$’000

25,420

(1,012)

19,633

(619)

601

(1,921)

726

23,088

19,788

103,670

31,101

77,626

23,288

823

(36)

787

(58)

(5,150)

(2,520)

(1,012)

(55)

(5)

447

(481)

(34)

344

(3,192)

(619)

(45)

(8,800)

(3,466)

23,088

19,788

2018
$’000

2017
$’000

4,815

6,638

11,483

(5,094)

6,087

6,779

12,896

(3,914)

6,389

8,982

8,708

2,383

1,952

13,043

(5,094)

10,409

2,581

932

13,922

(3,914)

7,949

10,008

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: PERFORMANCENOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: PERFORMANCE

Income tax expense (continued)

Deferred tax
assets

Transfer
from
income
tax
receivable

(Charged)/
credited
in year via
P&L
$’000

(Charged)/
credited
in year via
equity
$’000

Acquisition
of
subsidiaries
$’000

Sale
of an
entity
$’000

At 1 July
$’000

Change in
FX rates
$’000

At 30 June
$’000

2018

Provisions

Employee
benefits

Other

2017

Provisions

Employee
benefits

Other

Deferred tax
liabilities

2018

Depreciation
/ amortisation

Accrued
income

Other

2017

Depreciation
/ amortisation

Accrued
income

Other

6,087

6,779

12,896

7,348

2,244

163

9,755

(925)

324

(398)

(465)

(601)

(863)

4,815

6,638

11,483

(1,130)

(7)

(32)

(112)

404

4,131

(132)

(726)

4,124

(164)

(1)

(113)

6,087

6,779

12,896

Transfer
from
income
tax
receivable

(Charged)/
credited
in year via
P&L
$’000

(Charged)/
credited
in year via
equity
$’000

Acquisition
of
subsidiaries
$’000

Sale
of an
entity
$’000

At 1 July
$’000

Change in
FX rates
$’000

At 30 June
$’000

10,409

2,581

932

13,922

8,297

1,345

1,393

11,035

154

(2,020)

(206)

305

(1,921)

(1,238)

1,286

561

(461)

3,566

319

8,708

2,383

1,952

327

13,043

(216)

10,409

(50)

2,581

932

(266)

13,922

On 22 December 2017, tax reform legislation was enacted in the US reducing the corporate tax rate from 35%
to 21% effective 1 January 2018. As a result, all US deferred tax balances have been remeasured using the new
corporate tax rate. The impact of the change in tax rate has been recognised in tax expense in profit or loss.

Accounting policy

Tax consolidation

Corporate Travel Management Limited and its 100%
owned Australian resident subsidiaries have formed
a tax consolidated group with effect from 1 July 2008.
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.

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 Group’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 nor 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.

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
Statement of Cash Flows 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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: PERFORMANCENOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: PERFORMANCE

Expenses

Profit before income tax includes the following specific expenses:

Depreciation and amortisation

Depreciation of non-current assets – plant and equipment note 21

Amortisation of client contracts and relationships – intangibles note 8

Amortisation of software – intangibles note 8

Amortisation of other intangible assets – intangibles note 8

Finance costs

Bank loans

Other interest

Other expense disclosures

Defined contribution superannuation expense

Rental expense relating to operating leases

Accounting policy

2018
$’000

2017
$’000

2,045

10,186

5,174

428

1,883

11,100

2,949

225

17,833

16,157

2,425

801

3,226

6,303

8,828

1,542

1,901

3,443

5,730

9,536

Depreciation expense
Depreciation is calculated over plant and equipment using the following estimated useful lives and methods:

Item

Plant and equipment:
Leasehold improvements

Computer hardware

Furniture, fixture and equipment

Years

Method

3 - 8

2.5 - 3

4 - 10

Straight line

Diminishing value or straight line

The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted, if appropriate, at
each financial year end.

Amortisation expense
The useful lives of these intangible assets are assessed to be finite.

A summary of the amortisation policies applied to the Group’s intangible assets is as follows:

Item

Method

Internally generated /
acquired

Client contracts and relationships

Diminishing value - ranging between
three and seventeen years

Acquired

Software

Straight line - ranging between three and
five years

Acquired/ Internally
generated

Other intangible assets

Straight line - ten years

Acquired

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’.

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.

Group Structure

This section explains significant aspects of the Group structure and how changes have affected the financial
position and performance of the Group.

7. Business combinations

Prior period business combinations

On 1 July 2016, the Group acquired 100% of the
shares of Travizon, Inc., All Performance Associates,
Inc., and Business Travel, Inc., trading as Travizon
Travel.

On 1 February 2017, the Group acquired 100% of the
shares of Arizonaco Limited and Portall Travel Limited,
trading as Redfern Travel, and on the same date the
Group acquired 100% of the shares of Andrew Jones
Travel Pty Ltd, trading as Andrew Jones Travel.

The accounting for the business combinations for all
three prior period acquisitions has been finalised as
at 30 June 2018 and no material adjustments have
been made during the period to the opening balance
sheet of Travizon Travel and Andrew Jones Travel. The
Group has amended the accounts receivable balance
for Redfern Travel by $1.2 million to align the trade
receivable to the Group policy based on additional
information obtained during the adjusting period.

Accounting policy

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, amount of any non-
controlling interest in the acquired entity, 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.

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, and interest expense resulting from
discounting is recognised within finance costs in the
Statement of Comprehensive Income. Any subsequent
adjustment to the final contingent consideration, based
on actual results as at 30 June 2017, will be reflected
in the Statement of Comprehensive Income.

The Group recognises any non-controlling interest, in
the acquired entity on an acquisition-by-acquisition
basis either at fair value or at the non-controlling
interests’ proportionate share of the acquired entity’s
net identifiable assets.

Non-controlling interests in the results and equity of
subsidiaries are shown separately in the Consolidated
Statement of Comprehensive Income, Consolidated
Statement of Financial Position and Consolidated
Statement of Changes in Equity.

Critical estimates, assumptions and judgements

• 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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: GROUP STRUCTURENOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: PERFORMANCE

Intangible assets

Intangible assets (continued)

Client
contracts and
relationships
$’000

Software
$’000

Goodwill
$’000

Other
Intangible
assets
$’000

Year ended 30 June 2018

Cost

55,167

33,151

407,187

Accumulated depreciation

(35,027)

(12,752)

Opening net book amount

Additions

Amortisation charge

Exchange differences

20,140

29,411

(10,186)

915

20,399

14,217

11,057

(5,174)

299

407,187

392,013

15,174

Closing net book amount

20,140

20,399

407,187

Year ended 30 June 2017
Cost

Accumulated depreciation

Opening net book amount

52,970

(23,559)

29,411

19,448

Additions

21,664

(7,447)

14,217

8,391

8,318

392,347

(313)

392,034

280,107

Additions through the acquisition
of entities/businesses

Disposals through sale of an
entity

Amortisation charge

Exchange differences

Closing net book amount

Customer contracts

21,542

665

122,614

(15)

(367)

(11,100)

(479)

29,411

(2,949)

(193)

(10,341)

14,217

392,013

4,156

439,797

Total
$’000

500,192

(48,595)

451,597

439,797

11,057

(15,788)

16,531

451,597

471,494

(31,676)

439,818

308,090

12,634

144,821

(382)

(14,274)

(11,092)

Accounting policy (continued)

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 (refer note 15).

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.

Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the
goodwill relates.

Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss
is recognised.

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.

Critical estimates, assumptions and judgements

• Software developed or acquired not as part of a business combination

The Group recognises internally generated software assets arising from development once they meet
the criteria set out in the Australian Accounting Standards. Estimates are used in determining the costs
capitalised to each project and the useful life for amortisation. There is also judgement involved in assessing
how the asset will deliver probable future economic benefit to the Group.

4,687

(816)

3,871

4,156

(428)

143

3,871

4,513

(357)

4,156

144

4,316

(225)

(79)

The customer contracts were acquired as part of a business combination (see note 7 for details). They are
recognised at their fair value at the date of acquisition and are subsequently amortised based on the timing of
projected cash flows of the contracts over their estimated useful lives.

Accounting policy

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 developed or 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.

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.

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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: GROUP STRUCTURENOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: GROUP STRUCTURE

Capital

A core part of the Group’s operations is to maintain a strong financial position and low levels of external debt.
This section explains how the Group has performed in areas relating to capital management.

9. Cash and cash equivalents (continued)

Net debt reconciliation

This section sets out an analysis of net debt and the movements in net debt for each of the periods presented.

9. Cash and cash equivalents

Cash at bank and on hand

Client accounts

2018
$’000

57,019

27,278

84,297

2017
$’000

49,192

30,025

79,217

Cash at bank earns interest at floating rates based on daily bank deposit rates: 2018: 0.00%-1.95% (2017:
0.00%-1.95%). The client accounts earn interest at floating rates based on daily bank deposit rates: 2018:
0.00%-1.30% (2017: 0.00%-1.30%). The weighted average interest rate for the year was 0.12% (2017: 0.24%).

No bank overdraft facilities were in place at 30 June 2018, refer note 14.

Accounting policy

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, with a maturity
of three months or less.

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.

Reconciliation of profit after income tax to net cash inflow from operating
activities

Profit for the year

Adjustments for:

Depreciation and amortisation

Net exchange differences

Non-cash interest

Non-cash employee benefits expense

Non-cash release of earn out payable

Net (gain)/loss on sale of subsidiary

Appreciation in value of investments

Net gain/(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 note 14

2018
$’000

2017
$’000

80,582

57,838

17,833

16,160

(92)

678

2,168

(750)

(5)

1,274

1,366

(912)

(2)

(41,341)

(2,433)

669

(999)

1,730

33,919

94,392

928

841

(1,198)

(4,661)

69,278

Cash and cash equivalents

Borrowings (repayable within 1 year)

Borrowings (repayable after 1 year)

Net cash and cash equivalents

Cash and cash equivalents

Gross debt - variable interest rates

Net cash and cash equivalents

2018
$’000

2017
$’000

84,297

79,217

(14,677)

(29,301)

(18,122)

(27,301)

40,319

33,794

84,297

79,217

(43,978)

(45,423)

40,319

33,794

Cash/ bank
overdraft
$’000

Borrowings
due within 1
year
$’000

Borrowings
due after 1
year
$’000

Net cash and cash equivalents as at 1 July 2017

79,217

(18,122)

(27,301)

Cash flows

Foreign exchange adjustments

2,929

2,151

4,186

(741)

(1,518)

(482)

Net cash and cash equivalents as at 30 June 2018

84,297

(14,677)

(29,301)

10. Trade and other receivables

Total
$’000

33,794

5,597

928

40,319

Current
Trade receivables (i)

Client receivables (i)

Allowance for doubtful debts

Deposits (ii)

Other receivables

2018
$’000

2017
$’000

43,149

32,000

202,330

158,146

(2,615)

(2,141)

242,864

188,005

7,587

1,786

13,125

1,305

252,237

202,435

(i) Trade and client receivables are non-interest bearing and are generally on terms ranging from 7 to 30 days. This balance
includes amounts receivable from a related party – see note disclosure 25(e).

(ii) Deposits relate to advance deposits to suppliers and deposits made on behalf of clients for leisure travel which will occur at
a future date. Supplier deposits within the Westminster Travel business pertains to securing access during high sales periods,
which is the business practise in Hong Kong.

As of 30 June 2018, trade and client receivables of $33,905,000 (2017: $24,605,000) 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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: CAPITALNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: CAPITAL

10. Trade and other receivables (continued)

11.

Trade and other payables

The ageing analysis of these trade and client receivables is as follows:

0 – 31 days

31 – 60 days

60+ days

Balance at 30 June

2018
$’000

2017
$’000

24,307

16,463

3,793

5,805

4,338

3,804

33,905

24,605

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.

Detail regarding risk exposure relating to credit, market and interest rate risk have been disclosed in note 16.

Fair value

Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value.

Accounting policy

Trade and client receivables, which generally have 7 to 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.

Critical estimates, assumptions and judgements

• 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.

Current

Trade payables (i)

Client payables (i)

Other payables and accruals (ii)

Acquisition payable (iii)

Non-current

Other payables and accruals

Acquisition payable

Contingent consideration payable

2018
$’000

2017
$’000

12,536

13,156

185,122

148,703

33,458

22,505

26,247

44,943

253,621

233,049

2,872

4,112

12,596

8,160

24,868

(i) Trade payables and client payables are non-interest bearing and are normally settled on terms ranging from 7 to 30 days.

(ii) Included within other payables and accruals are amounts due to related parties – see related party disclosure note 25(e).

(iii)This balance represents amounts payable relating to business combinations which are no longer contingent on
performance hurdles. This balances includes an amount payable to a related party – see disclosure note 25(e).

Fair value
The carrying value of these payables is assumed to approximate their fair value.

Interest rate risk and liquidity risk
Information regarding interest rate risk and liquidity risk exposure is set out in note 16.

Accounting policy

Trade and other payables and client payables 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 goods and services.
These amounts are unsecured and are paid within terms ranging from 7 to 30 days from recognition. They are
recognised initially at their fair value and subsequently measured at amortised cost using the effective interest
method.

Client payables 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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: CAPITALNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: CAPITAL

12. Provisions

Movements in provisions

At 1 July 2017

Arising during the year

Utilised

Write back of provision

Changes due to change in foreign currency

At 30 June 2018

2018

Current

Non-current

2017

Current

Non-current

Accounting policy

Employee
entitlements
$’000

Make-good
provision
$’000

Provisions
for other
liabilities
and charges
$’000

Total
$’000

5,635

6,882

(6,541)

(106)

5,935

4,720

1,215

5,935

4,263

1,372

5,635

638

(87)

(5)

655

618

655

157

481

638

10,892

38,534

17,165

45,509

(36,020)

(42,648)

(2,779)

(2,890)

402

483

11,029

17,619

11,029

10,092

800

10,892

15,786

1,833

17,619

14,512

2,653

17,165

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.

12. Provisions (continued)

Accounting policy (continued)

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 obligations

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.

The obligations are presented as current liabilities in the Statement of Financial Position if the entity does not
have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of
when the actual settlement is expected to occur.

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.

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.

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.

Provision for other liabilities and charges

i) Provision for unclaimed charges

The Group recognises a provision for unclaimed charges, arising from the sale of travel services. This
provision pertains to the Asian business, and is common practice in this market. Based on historical data and
past experience, management considers the possibility of claims and if appropriate it is written back to the
consolidated income statement.

ii) Provision for fixed price contract

The Group recognises a provision where the estimated cost of fulfilling the obligations on a fixed price contract
may exceed the future expected economic benefits, over its remaining term. This exposure is limited to one fixed
price contract for a remaining term of one and a half years.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: CAPITALNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: CAPITAL

13. Contributed equity, reserves and retained earnings

13. Contributed equity, reserves and retained earnings (continued)

Contributed equity

Ordinary shares

Issued and fully paid

2018
$’000

2017
$’000

301,747

281,847

Ordinary shares entitle the holder to receive dividends as declared and, in the event of winding up the Group, to
participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid
up on shares held.

On a show of hands, every holder of ordinary shares present at a meeting, in person or by proxy, is entitled to
one vote, and upon a poll each share is entitled to one vote.

Ordinary shares have no par value and the company does not have a limited amount of authorised capital.

Movement in ordinary share capital

Opening balance as at 1 July 2016

1 July 2016

Shares issued

Initial consideration for the Travizon Travel
business combination.

2 September 2016

Shares issued

Share appreciation rights issue.

24 January 2017

Shares issued

1 February 2017

Shares issued

Capital raising used primarily for the
acquisitions of Redfern Travel and Andrew
Jones Travel.

Initial consideration for the Redfern Travel
and Andrew Jones Travel business
combinations.

30 May 2017

Shares issued

Employee compensation

Total shares issued

Less: transaction costs arising on share issue

Deferred tax credit recognised directly in equity

At 30 June 2017

Opening balance as at 1 July 2017

22 August 2017

Shares issued

Share appreciation rights issue.

13 October 2017

Shares issued

Contingent consideration payment for the
Chambers Travel business combination

Number of
shares

$’000

98,078,805

175,231

1,236,458

17,793

204,216

4,744,475

3,198

71,167

952,795

16,369

4,500

7,142,444

108,626

(2,003)

(7)

105,221,249

281,847

105,221,249

281,847

600,600

286,604

13,754

6,313

Total shares issued

887,204

20,067

Less: transaction costs arising on share issue

Deferred tax credit recognised directly in equity

(38)

(129)

At 30 June 2018

106,108,453

301,747

Contributed equity (continued)

a)
Capital management

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 note 14), general cash (refer note 9) 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, operational plan, 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

2018
$’000

2017
$’000

43,978

471,492

45,423

401,404

11%

Reserves

b)
The following table shows a breakdown of the ‘reserves’ line item as per the Consolidated Statement of Financial
Position, and the movements in these reserves during the year. A description of the nature and purpose of each
reserve is provided in the following table.

At 30 June 2016

Currency translation differences – current period

Deferred tax

Other comprehensive income

Non-controlling interests disposal/acquisition of subsidiary

Share-based payment expenses

At 30 June 2017

Currency translation differences – current period

Deferred tax

Other comprehensive income

Share-based payment expenses

At 30 June 2018

FX
translation

$’000

17,331

(8,887)

461

(8,426)

(520)

8,385

15,373

274

15,647

24,032

Share based
payment
$’000

Total

$’000

2,314

19,645

2,300

4,614

(9,277)

(4,663)

(8,887)

461

(8,426)

(520)

2,300

12,999

15,373

274

15,647

(9,277)

19,369

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: CAPITALNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: CAPITAL

13. Contributed equity, reserves and retained earnings (continued)

14. Borrowings (continued)

The unused portion of the Group’s total facilities at 30 June 2018 is set out in the following table:

Unused

Used (i)

Total facilities

$’000

25,358

126,161

151,519

(i) Included within the used portion of the total facilities listed above are bank guarantees of $83.6 million. See
note 17 for the total amount of bank guarantees for the Group.

Accounting policy

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 cost.

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.

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 the Consolidated
Statement of Comprehensive Income, which is measured as the difference between the carrying amount of the
financial liability and the fair value of the equity instruments issued.

Reserves (continued)

Nature and purpose of other reserves

Foreign currency translation
Exchange differences arising on translation of foreign controlled entities are recognised in other comprehensive
income and accumulated in a separate reserve within equity. The cumulative amount is recognised in the
Consolidated Statement of Comprehensive Income when the net investment is sold.

Share-based payments
The share-based payments reserve is used to recognise the grant date fair value of deferred shares granted to
employees but not yet vested.

Retained earnings

Movements in retained earnings were as follows:

Balance at 1 July
Net profit for the year

Non-controlling interest disposals/acquisition of subsidiary

Dividends

Balance at 30 June

Accounting policy

2018
$’000

91,470

76,712

2017
$’000

63,802

54,556

666

(34,964)

(27,554)

133,218

91,470

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.

14. Borrowings
A breakdown of the existing borrowings balance is set out in the following table:

Current Borrowings

Non-current Borrowings

Total Borrowings

2018
$’000

14,677

29,301

43,978

2017
$’000

18,122

27,301

45,423

Financial facilities
The Group holds a Club Facility with HSBC Bank and the Commonwealth Bank of Australia. This multi-currency
facility includes lines of credit up to $150.2 million. Security has been provided over CTM Group assets and
subsidiary shareholding to a Security Trustee for the benefit of the financiers. The existing Group Facility
Agreement offered CTM flexibility to activate an optional, one-off increase of facility B with both banks, up to a
maximum additional contribution of $35 million. CTM Treasury requested this be activated for the remainder of
the facility expiring in January 2020, to support the growth of the business. The increase concluded post year
end, in July 2018, for the full entitlement, increasing the facility to $183.5 million.

The Group has further facilities of $1.3 million available in Asia, which are utilised for bank guarantees required
for supplier bonding purposes.

The available facilities are multi-currency, but have been expressed in their Australian dollar equivalent for
purposes of this disclosure.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: CAPITALNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: CAPITAL
Risk

This section discusses the Group’s exposure to various financial risks, explains how these affect the Group’s
financial position and performance, and what the Group does to manage these risks.

Impairment testing of goodwill

15.
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 service - Australia and New Zealand

Travel service - North America

Travel service - Asia

Travel service - Europe

Total

2018
$’000

2017
$’000

46,997

46,884

194,270

186,669

27,497

26,568

138,423

131,892

407,187

392,013

The recoverable amount of the cash generating unit has been determined based on financial budgets set for the
next financial year and management’s cash flow projections for subsequent years.

2018
Pre-tax nominal discount rate applied to the cash flow projection

Cash flows beyond the next financial year, up to year 5, are
extrapolated using an average growth rate of:

Revenue

Operating expenses

Long term growth rate

2017
Pre-tax nominal 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

Operating expenses

Long term growth rate

Travel services

Australia
and New
Zealand

North
America

Asia

Europe

12.77%

11.55%

10.86%

10.71%

3.50%

3.00%

2.00%

3.50%

3.00%

2.00%

3.50%

3.00%

2.00%

3.50%

3.00%

2.00%

16.06%

16.48%

12.59%

11.96%

3.50%

3.00%

2.00%

3.50%

2.50%

2.00%

3.50%

3.00%

2.00%

5.00%

3.00%

2.00%

Key assumptions used for value-in-use calculations for the years ended 30 June 2018 and 30 June 2017

The following key assumptions were applied to the cash flow projections when determining the value-in-use:

• Pre-tax discount rates - reflect specific risks relating to the relevant segments and the countries in which they

operate.

• Budgeted revenue – the basis used to determine the amount assigned to the budgeted sales volume is

the average value achieved in the year immediately before the budgeted year, expected client retentions,
adjusted for growth and other known circumstances.

• Budgeted operating expenses – the basis used to determine the amount 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.

• Long term growth rate – the growth rate used to extrapolate cash flows beyond the budget period.

15.

Impairment testing of goodwill (continued)

Sensitivity to changes in assumptions

Management recognises that there are various reasons 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:

Possible change considered

Change required to
indicate an impairment

Growth rates – Travel services – Australia and New Zealand
Revenue

Reduction in yield, rates, client retention

Decrease to (7.06%)

Operating expenses

Higher labour and / or other support costs

Increase to 14.88%

Growth rates – Travel services – North America
Revenue

Reduction in yield, rates, client retention

Decrease to 0.90%

Operating expenses

Higher labour and / or other support costs

Increase to 6.10%

Growth rates – Travel services – Asia
Revenue

Reduction in yield, rates, client retention

Decrease to (4.57%)

Operating expenses

Higher labour and / or other support costs

Increase to 10.73%

Growth rates – Travel services – Europe
Revenue

Reduction in yield, rates, client retention

Decrease to (6.66%)

Operating expenses

Higher labour and / or other support costs

Increase to 16.32%

Accounting policy

Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be
impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair
value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped
at the lowest levels for which there are separately identifiable cash inflows which are largely independent of
the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than
goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each
reporting period.

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.

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.

Critical estimates, assumptions and judgements

•

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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: RISKNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: RISK16. Financial risk management
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 risk arising from the Group’s financial instruments are 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 the note. The Group is not exposed directly to commodity trading risks.

Interest rate risk

a)
As at 30 June 2018, the Group had interest bearing borrowings of $44.0 million, therefore the Group’s income
and operating cash flows would be impacted by changes in market interest rates. Interest rate risk is managed
by way of proactive action by management and advisors. At balance date CTM has no interest rate cap, swap or
options in place and has managed interest rate risk by fixing interest payable for short terms of 1 - 6 months on
material borrowings. Under the terms of CTM’s financing arrangements, interest payable is determined using an
appropriate base for the currency borrowed.

Changes in US LIBOR (London Interbank Offered Rate) for example could therefore affect CTM in the medium
or long term and accordingly, various strategies to mitigate interest payable may be adopted should material
volatility or rates increases be forecast. The Group has considered its exposure to interest rate movements and
note that significant changes in interest rates would not result in a material impact to Finance costs.

The Group has interest bearing assets (cash and cash equivalents) with a short turnover period. The interest
earned from these assets is not considered material to the Group.

Credit risk

b)
The Group trades only with 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. For some client receivables, the Group may also obtain
security in the form of deposits. In addition, receivable balances are monitored on an ongoing basis, with the
result that the Group’s exposure to bad debts is considered reasonable.

With respect to credit risk arising from the other financial assets of the Group, comprising of 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’s cash (refer note 9), is held at financial institutions with the following credit ratings:

Australia and New Zealand

North America

Asia

Europe

Total

Client and Trade receivables are held with predominantly un-rated entities – see note 10.

2018
$’000

Moody’s
Investor
Service
Rating

7,273

19,062

Aa3-A1

Aa1-A2

29,285

Aa1-Baa3

28,677

Aa3-Baa1

84,297

16. Financial risk management (continued)

Liquidity risk

c)
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 repayments and interest resulting from recognised
financial liabilities as at 30 June 2018.

The Group’s financial liabilities comprise of trade and other payables, borrowings, and no derivative financial
instruments are held. The respective undiscounted cash flows for the respective upcoming fiscal years are
included in the following table. Cash flows for financial liabilities without fixed amount or timing are based on the
conditions existing at 30 June 2018.

The remaining non-derivative contractual maturities of the Group’s financial liabilities are:

1 year or less

1 – 5 years

Over 5 years

Contractual cash flows

Carrying amount

2018
$’000

2017
$’000

2018
$’000

2017
$’000

253,556

232,783

253,621

233,049

1,691

24,368

2,872

24,868

Total Trade and Other Payables

255,247

257,151

256,493

257,917

1 year or less

1 – 5 years

Over 5 years

Total Borrowings

14,677

29,301

18,122

27,301

14,677

29,301

18,122

27,301

43,978

45,423

43,978

45,423

Foreign exchange risk

d)
The Group operates internationally and is subject to foreign exchange risk arising from exposure to foreign
currencies.

The Group adopts various procedures and policies to manage foreign currency risk where practicable.
These procedures include the use of natural hedges arising from trading operations and subsidiaries’ results,
forecasting of future cash flows by currency, and can include the use of forward exchange contracts where
abnormal transactions outside of operating activities could give rise to a material exposure – e.g. initial and
contingent consideration payments made in relation to acquisitions (note 11). Additionally, the Group has a
multi-currency debt facility which allows for borrowings in the relevant entity’s functional currency. At 30 June
2018, there is one forward exchange contracts in place to hedge the final deferred consideration payment for
Chris Thelen as part of the Chambers acquisition.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: RISKNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: RISK

16. Financial risk management (continued)

Foreign exchange risk (continued)

d)
The following table includes the financial assets and liabilities denominated in currencies other than the
functional currency of the respective entities and presents the Group’s exposure to foreign exchange risk at the
end of the reporting period, expressed in Australian dollars.

2018

USD

HKD

GBP

NZD

JPY

Others

Total

Cash
and cash
equivalents
$’000

Trade
and other
receivables
$’000

Related
party loans
$’000

Trade
and other
payables
$’000

Borrowings
$’000

1,186

6,661

23,067

(3,505)

439

257

109

697

232

(23,698)

448

(6,009)

1,036

2,690

7,427

(5,522)

(57)

(80)

(1)

(1,257)

(1,441)

(6,341)

Total
$’000

27,409

(23,084)

(5,832)

1,037

(1,062)

(214)

(1,746)

Based on the 2018 balances, a 10% stronger/(weaker) Australian dollar against the currencies held, would result
in Profit & Loss impact of $187,810/($158,418).

2017

USD

HKD

GBP

NZD

JPY

Others

Total

Cash
and cash
equivalents
$’000

Trade
and Other
receivables
$’000

Related
party loans
$’000

Trade
and Other
payables
$’000

Borrowings
$’000

5,014

15,018

(5,864)

1,874

346

170

957

147

(21,339)

1,592

1,457

368

1,610

(90)

(182)

(1)

(1,635)

(1,793)

(9,565)

3,409

5,529

(1,662)

Total
$’000

16,042

(20,936)

1,470

1,458

(1,465)

1,142

(2,289)

Unrecognised Items

This section provides information about items that are not recognised in the financial statements, but could
potentially have a significant impact on the Group’s financial position and performance.

17. Contingent liabilities

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 Association regulations.
Guarantees provided by the parent are held on behalf of other Group entities. Refer note 14 for details of security
provided for the financing facilities.

Guarantees provided for:

Various vendors

Total

2018
$’000

2017
$’000

83,586

50,199

There were no other contingencies as at reporting date (2017: $nil).

18. Commitments

Operating lease commitments – Group as lessee

a)
The Group has entered into commercial leases for the rental of premises. These leases have an average life of
between one and eight 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

Total

2018
$’000

8,837

13,244

1,070

23,151

2017
$’000

8,060

14,244

1,675

23,979

Capital commitments

b)
There is no significant capital expenditure contracted as at the end of the reporting period but not recognised as
liabilities.

Accounting policy

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.

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 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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: UNRECOGNISED ITEMSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: RISK
19. Events occuring after the reporting period
Other than the following items, 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 or affairs
of the Group or subsequent financial years.

Other Items

This section provides information on items which require disclosure to comply with Australian Accounting
Standards and other regulatory pronouncements, however are not considered critical in understanding the financial
performance of the Group.

20. Other current assets

Prepayments

Financial assets at fair value

21. Plant and equipment

2018
$’000

3,701

502

4,203

2017
$’000

4,226

236

4,462

Year ended 30 June 2018

Cost

Accumulated depreciation

Opening net book amount

Additions

Depreciation charge

Exchange differences

Closing net book amount

Year ended 30 June 2017

Cost

Accumulated depreciation

Opening net book amount

Additions

Additions through the acquisition of
entities/ businesses

Transfers/reallocations

Disposals through sale of an entity

Depreciation charge

Exchange differences

Closing net book amount

Furniture,
fixtures and
equipment
$’000

Computer
equipment
$’000

Leasehold
improvements
$’000

Other
$’000

Total
$’000

5,582

(4,406)

1,176

870

647

(353)

1,176

5,124

(4,254)

870

621

377

223

195

(82)

(388)

(76)

870

9,009

(6,801)

2,208

1,755

1,351

(967)

2,208

7,598

(5,843)

1,755

1,310

810

528

5,203

(2,604)

2,599

2,544

678

(672)

2,599

5,269

(2,725)

2,544

3,315

129

138

(195)

(14)

(687)

1,755

(249)

(724)

(65)

2,544

449

(314)

135

(53)

135

447

(354)

180

(75)

(84)

20,243

(14,125)

6,118

5,262

2,765

(2,045)

136

6,118

18,438

(13,176)

5,262

5,426

1,328

889

(420)

(1,883)

(78)

5,262

No additions during the year (2017: $nil) were financed under lease agreements.

Accounting policy

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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: OTHER ITEMSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: UNRECOGNISED ITEMS

21. Plant and equipment (continued)

Accounting policy (continued)

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.

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
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 the Statement of Comprehensive Income in the
year the asset is derecognised.

22. Fair value measurement

Fair value hierarchy

23. Share-based payments

Share appreciation rights

The establishment of the CTM Share Appreciation Rights (SARs) Plan was approved by the Board on 19
October 2012. The SARs Plan is designed to provide long-term incentives for senior executives to deliver long-
term shareholder returns. Under the plan, participants are granted SARs which only vest if certain performance
standards are met, and the employee remains in service. Participation in the plan is at the Board’s absolute
discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed
benefits.

Once vested, a participant will be deemed to have automatically exercised all vested SARs and CTM will settle
its obligation in line with the SARs Plan. There is no consideration payable by the participant upon exercising of
vested SARs. When exercised, the conversion of a SAR to an equity or cash based settlement, is determined
using a formula referencing the relevant share prices of CTM, the number of SARs exercised, and is at the
Board’s sole absolute discretion.

Grants made during 2018 will vest on a scaled basis as follows:

• 50% vest at 80% target achievement;

• 75% vest at 90% target achievement; and

• 100% at 100% target achievement.

For equity based settlements, the calculation is as follows:
Equity Settlement Amount = ((SMV – BP) / SMV) x PQSR

For cash based settlements, the calculation is as follows:
Cash Settlement Amount = (SMV – BP) x PQSAR

The balance for the Group’s asset and liabilities measured and recognised at fair value is nil. The following table
represents the changes for the year ended 30 June 2018.

Where:

Opening balance 1 July 2017

Additions

Transfer to Acquisition payable (i)

Foreign exchange movement

Discount unwind

Closing balance 30 June 2018

Contingent
Consideration
$’000

8,160

(9,029)

593

276

(i) The balance transferred to Acquisition payable during the period consists of the Redfern Travel contingent
consideration ($9.0 million), based on the financial criteria relating to the earn out period being met.

Fair values of other financial instruments

At 30 June 2018 there is one forward exchange contracts in place to hedge the deferred consideration payment
for Chris Thelen, as a part of the Chambers acquisition. The foreign exchange contracts have been accounted
for using hedge accounting and designated at the inception of the transaction as cash flow hedges. The forward
contracts are assessed at fair value and the effectiveness of the hedge is tested at each reporting date. The fair
value is assessed to be $0.5 million at 30 June 2018 and recognised through Other comprehensive income.

The Group also has a number of financial instruments which are not measured at fair value in the Statement of
Financial Position. For these instruments, their carrying value was considered to be a reasonable approximation
of their fair value.

Valuation processes

The finance department of the Group performs the valuations of assets required for financial reporting purposes,
including level 3 fair values. This team reports directly to the Chief Financial Officer (CFO) and the Audit
Committee (AC). Discussions of valuation processes and results are held between the CFO, AC, and the finance
team at least once every six months, in line with the Group’s reporting dates.

Equity Settlement Amount – is the number of shares to be issued or transferred to the relevant participant in
equity settlement of the performance qualified SAR at exercise;

Cash Settlement Amount – is the amount paid to a participant in cash settlement of a performance qualified
SAR at exercise;

SMV – the Subsequent Market Value is the market value of a CTM Ltd share as at the performance
qualification date in connection with that SAR;

BP – the Base Price of the SAR as determined by the Board; and

PQSAR – is the total number of performance qualified SARs with the same Base Price held by the relevant
participant.

SARs granted under the plan carry no dividend or voting rights.

The following table summarises the SARs granted under the plan, no SARS expired during the periods below:

As at 1 July

Granted during the year

Exercised during the year

Forfeited during the year

As at 30 June

Vested and exercisable at 30 June

2018 Number
of SARS

2017 Number
of SARS

3,117,500

2,185,000

1,610,000

1,582,500

(865,000)

(300,000)

(287,000)

(350,000)

3,575,500

3,117,500

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: OTHER ITEMSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: OTHER ITEMS

24.

Interests in other entities

Material subsidiaries

a)
The Group’s principal subsidiaries at 30 June 2018 are set out in the following table. Unless otherwise stated,
each entity has share capital consisting solely of ordinary shares that are held by the Group, and the proportion
of ownership interests held equals the voting rights held by the Group. The country of incorporation or
registration is also their principal place of business.

Subsidiaries that provide travel services and contribute more than 5% of the Group’s net profit before tax or 5%
of the Group’s net assets are considered material to the Group.

Name of entity

Place of business/
country of
incorporation

Ownership
interest held
by The Group

Ownership
interest held
by non-
controlling
interest

Principal
activities

2018
%

2017
%

2018
%

2017
%

Corporate Travel Management Group
Pty Ltd*

Australia

100

Corporate Travel Management North
America Inc

United States of
America

100

- Travel services

Westminster Travel Limited

Hong Kong

75.1

24.9

24.9 Travel services

Corporate Travel Management (United
Kingdom) Limited

United Kingdom

100

Redfern Travel Ltd

United Kingdom

100

- Travel services

* This subsidiary has been granted relief from the necessity to prepare financial reports in accordance with Class Order 2016/785 issued by the
Australian Securities and Investments Commission. For further information refer to note 27.

23. Share-based payments (continued)

Share appreciation rights (continued)

SARs outstanding at the end of the year have the following expiry date and share base prices:

Grant date

Performance period

1 July 2014

1 July 2015

1 July 2016

1 July 2014 – 30 June 2017

1 July 2015 – 30 June 2018

1 July 2016 – 30 June 2019

22 August 2017

1 July 2017 – 30 June 2020

Base price

SARS
30 June 2018

SARS
30 June 2017

$7.00

$8.80

$11.50

$15.33

$23.90

50,000

795,000

1,332,500

1,398,000

865,000

50,000

795,000

1,407,500

3,575,500

3,117,500

On 22 August 2018, 509,961 shares will be issued upon vesting of 845,000 SARs. In addition to the share issue,
1,598,000 SARs will be granted, pursuant to the CTM SARs plan.

Fair value of SARs granted

The assessed fair value at grant date of the SARs granted during the year ended 30 June 2018 was $2.49 per
SAR (2017 - $1.62). The fair value at grant date has been determined using a Black-Scholes pricing model that
takes into account the share price at the time of the grant, the exercise price, the term of the SAR, the expected
dividend yield, the expected price volatility of the underlying share and the risk free interest rate for the term of
the SAR.

The fair value model inputs for SARs granted during the year ended 30 June 2018 included:

• SARs are granted for no consideration and vest based on Corporate Travel Management Limited’s Earnings

per Share growth over a 3 year vesting period.

• Base price: $23.90 (2017 - $15.33).

• Grant Date: 22 July 2017 (2017 - 1 July 2016).

• Expiry Date: 1 July 2020 (2017 - 1 July 2019).

• Share Price at Grant Date: $21.85 (2017 - $14.20).

• Expected price volatility of the Group’s shares: 25% (2017 - 25%).

• Expected dividend yield: 3.0% (2017 - 3.0%).

• Risk-free interest rate: 1.94% (2017 - 1.52%).

The expected price volatility is based on the historic volatility, based on the remaining life of the SARS, adjusted
for any expected changes to future volatility due to publicly available information.

Expenses arising from SARS

Total expenses arising from share-based payment transactions recognised during the period as part of
employee benefit expense relating to share appreciation rights is $2,176,000 (2017: $1,366,000).

Accounting policy

Share-based compensation benefits are provided to employees by way of a SARs. The fair value of SARs
granted is recognised as an employee benefits expense, with a corresponding increase in equity. The total
amount to be expensed is determined by reference to the fair value of the rights granted, which includes any
market performance conditions and the impact of any non-vesting conditions but excludes the impact of any
service and non-market performance vesting conditions.

Non-market vesting conditions are included in assumptions about the number of SARs that are expected to
vest. The total expense is recognised over the vesting period, which is the period over which all of the specified
vesting conditions are to be satisfied. At the end of each period, CTM revises its estimates of the number of
SARs that are expected to vest based on the non-market vesting conditions. CTM recognises the impact of the
revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: OTHER ITEMSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: OTHER ITEMS24.

Interests in other entities (continued)

25. Related party transactions (continued)

Non-controlling interests (NCI)

b)
The following table summarises the financial information for Wealthy Aim Investments Limited (“Westminster
Travel”), which has a non-controlling interest which is material to the Group.

The Westminster Travel Group includes non-controlling interests which are not material to the Group.

The amounts disclosed are before inter-company eliminations.

Summarised Statement of Financial Position

Current assets

Current liabilities

Current net assets

Non-current assets

Non-current liabilities

Non-current net assets

Net assets

Accumulated NCI

Summarised Statement of Comprehensive Income

Revenue

Profit for the period

Other comprehensive income

Total comprehensive income

Profit / (loss) allocated to NCI

Dividends paid to NCI

Summarised Statement of Cash Flows

Cash flows from operating activities

Cash flows from investing activities

Cash flows from financing activities

Net increase / (decrease) in cash and cash equivalents

2018
$’000

2017
$’000

145,404

126,882

(85,983)

(74,699)

59,421

17,482

(936)

16,546

75,967

17,158

2018
$’000

53,807

15,648

2,699

18,348

3,870

2,507

2018
$’000

18,311

(832)

52,183

16,277

(1,088)

15,189

67,372

15,304

2017
$’000

57,832

14,836

2,430

17,266

3,189

2,568

2017
$’000

12,038

(175)

Transactions with other related parties

d)
Deferred consideration balance of $8.7 million was paid to Chris Thelen and a deferred consideration balance of
$0.5 million was paid to Debbie Carling, in relation to the Chambers Travel acquisition. The remaining balance of
$13.6 million is payable to Chris Thelen within 12 months and is included in the Acquisition payable balance in
note 11.

Outstanding balances with related parties

e)
The following balances are outstanding at the end of the reporting period in relation to transactions with related
parties:

Trade and other receivables
Key management personnel

Other payables
Key management personnel (i)

Other related parties

2018
$’000

378

2017
$’000

13,631

21,798

(i) The payable represents the present value of the deferred consideration payable to Chris Thelen, as a part of the acquisition of Chambers

Travel Group Limited ($13.6 million) – refer to note 11.

Terms and conditions

f)
Directors for 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.

All transactions were made on normal commercial terms and conditions and at market rates.

Outstanding balances are unsecured and are repayable in cash.

26. Parent entity financial information

Summary financial information

The individual financial statements of the parent entity show the following aggregate amounts:

(13,085)

(11,966)

4,394

(103)

Statement of Financial Position

25. Related party transactions

Parent entities

a)
The ultimate parent entity within the Group is Corporate Travel Management Limited.

Subsidiaries

b)
Interest in subsidiaries are set out in note 24.

Key management personnel compensation

Short-term

Post-employment

Long-term benefits

Share-based payments

2018
$

2017
$

4,767,414

4,440,380

254,361

211,064

13,259

(46,564)

766,245

498,523

5,801,279

5,103,403

Current assets

Total assets

Current liabilities

Total liabilities

Net assets

Shareholders’ equity

Issued capital

Reserves

Retained earnings

Shareholders’ equity

Profit for the year

Total comprehensive income

2018
$’000

2017
$’000

1,279

1,068

397,056

26,988

352,332

29,973

47,938

15,243

349,118

337,089

322,150

302,250

17,158

9,810

13,429

21,410

349,118

337,089

34,113

28,267

34,113

28,267

Detailed remuneration disclosures are provided in the Remuneration Report on pages 30-38.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: OTHER ITEMSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: OTHER ITEMS

26. Parent entity financial information (continued)

Guarantees entered into by the parent entity

b)
The parent entity is party to the overall financing arrangements and related security as detailed in note 14 and
note 17.

Contingent liabilities of the parent entity

c)
The parent entity did not have any contingent liabilities as at 30 June 2018 or 30 June 2017.

Contractual commitments

d)
The parent did not have any contractual commitments at 30 June 2018 or 30 June 2017.

Accounting policy

The financial information for the parent entity, Corporate Travel Management Limited, has been prepared on the
same basis as the consolidated financial statements, except as follows:

Investments in subsidiaries

i)
Investments in subsidiaries are accounted for at cost in the financial statements of Corporate Travel
Management Limited.

ii) Tax consolidation legislation
Corporate Travel Management Limited and its wholly-owned Australian controlled entities have implemented
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 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.

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.

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 in the parent company and consolidated
financial statements.

27. Deed of cross guarantee
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), Corporate
Travel Management North America Limited, Corporate Travel Management North America, Inc, Sara Enterprise,
Inc., 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 2016/785 (as amended) issued by the
Australian Securities and Investments Commission.

These companies represent a ‘closed group’ for the purposes of the Class Order and, as there are no other
parties to the deed of cross guarantee that are controlled by Corporate Travel Management Limited, they also
represent the ‘extended closed Group’.

The following table presents a consolidated income statement, a Consolidated Statement of Comprehensive
Income and a summary of movements in consolidated retained earnings for the year ended 30 June 2018 of the
closed Group.

Consolidated Statement of Comprehensive Income

Revenue

Other income

Total revenue and other income

Operating expenses

Employee benefits

Occupancy

Depreciation and amortisation

Information technology and telecommunications

Travel and entertainment

Administrative and general

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 or loss:

Exchange differences on translation of foreign operations

Changes in the fair value of cash flow hedge

Other comprehensive income for the period, net of tax

Total comprehensive income for the year

2018
$’000

2017
$’000

235,600

21,276

256,876

216,263

9,823

226,086

(127,478)

(119,940)

(6,244)

(8,221)

(6,088)

(9,730)

(20,790)

(17,189)

(3,048)

(8,007)

(3,833)

(9,818)

(173,788)

(166,598)

(4,519)

(2,645)

78,569

(16,065)

56,843

(14,850)

62,504

41,993

7,119

7,206

69,710

(3,230)

360

(2,870)

39,123

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: OTHER ITEMSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: OTHER ITEMS

27. Deed of cross guarantee (continued)

Consolidated Statement of Financial Position

28. Auditors’ remuneration
The auditor of the Group is PricewaterhouseCoopers.

ASSETS

Current assets

Cash and cash equivalents

Trade and other receivables

Other current assets

Related party receivable

Total current assets

Non-current assets

Plant and equipment

Intangible assets

Investment in related parties

Deferred tax assets

Related party receivable

Total non-current assets

TOTAL ASSETS

LIABILITIES

Current liabilities

Trade and other payables

Borrowings

Income tax payable

Provisions

Related party payable

Total current liabilities

Non-current liabilities

Trade and other payables

Borrowings

Provisions

Related party payable

Deferred tax liabilities

Total non-current liabilities

TOTAL LIABILITIES

NET ASSETS

EQUITY

Contributed equity

Reserves

Retained earnings

TOTAL EQUITY

2018
$’000

2017
$’000

26,857

87,057

1,962

4,241

32,091

66,618

236

1,732

120,117

100,677

3,865

254,301

187,487

5,863

2,925

454,441

574,558

3,177

244,922

175,656

9,012

432,767

533,444

77,271

3,700

855

4,927

85,450

18,095

2,691

4,742

16,321

59,470

103,074

170,448

1,180

20,777

1,194

44,892

4,691

72,734

1,186

1,927

4,975

8,088

175,808

178,536

398,750

354,908

301,747

281,847

8,596

88,407

11,474

61,587

398,750

354,908

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

Other advisory services

Total remuneration of PricewaterhouseCoopers Australia

Other PricewaterhouseCoopers network firms:

Other services in relation to the entity and any other entity in the consolidated group:

Audit and review of the financial report

Tax compliance

Other services

Total remuneration of PricewaterhouseCoopers network firms

Non-PricewaterhouseCoopers firms:

Services in relation to the entity and any other entity in the consolidated group:

2018

2017

455,805

531,419

214,700

220,578

76,508

72,127

747,013

824,124

466,452

471,027

8,357

16,257

43,639

6,071

491,066

520,737

Audit and review of the financial report

Total remuneration of Non-PricewaterhouseCoopers firms

69,749

101,703

69,749

101,703

29. Summary of significant accounting policies

Basis of preparation

a)
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.

i) 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 financial assets and liabilities, fair value through Statement of Comprehensive Income.

New and amended standards

b)
There are no new standards and amendments to standards that are mandatory for the first time for the financial
year beginning 1 July 2017 that materially affect the amounts recognised in the current period or any prior period
and are not likely to affect future periods. The Group has not early adopted any amendments, standards or
interpretations that have been issued but are not yet effective in the current year.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: OTHER ITEMSNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: OTHER ITEMS

29. Summary of significant account policies (continued)

New and amended standards (continued)

b)
Certain new accounting standards and interpretations have been published that are not mandatory for the
reporting period ending 30 June 2018 and have not been adopted early by the Group. The Group’s assessment
of the impact of these new standards and interpretations is set out in the following table.

Mandatory application
date / date of adoption
by the Group

Mandatory for financial
year ending 30 June
2019.

The Group does not
intend to early adopt
the standard before its
effective date.

Mandatory for financial
year ending 30 June
2019.

At this stage, the Group
does not intend to adopt
the standard before its
effective date.

Mandatory for financial
year ending 30 June
2020.

At this stage, the Group
does not intend to adopt
the standard before its
effective date.

Title of
standard

AASB 9

Financial
instruments

AASB 15

Revenue
from
contracts
with
customers

AASB 16

Leases

Summary and impact on the Group’s financial statements

The new standard addresses the classification, measurement and
derecognition of financial assets and financial liabilities, introduces new
rules for hedge accounting and a new impairment model for financial
assets.

The Group has undertaken an assessment of the potential impact of this
new standard and at this stage, does not expect there to be a material
impact on the Group’s results.

The AASB has issued a new standard for the recognition of revenue,
which will replace AASB 118, which covers revenue arising from the sale
of goods and the rendering of services and AASB 111, which covers
construction contracts. The new standard is based on the principle that
revenue is recognised when control of a good or service transfers to a
customer. The standard permits either a full retrospective or a modified
retrospective approach for the adoption.

The Group has performed a detailed analysis of the revenue from
contracts with customers based on a portfolio approach. Approximately
95% of the revenue has been included as part of the review. There is no
projected material impact to the Group’s financial results. There will be
changes to the Group’s revenue disclosures as part of the adoption of
AASB15.

AASB 16 was issued in February 2016. It will result in almost all leases
being recognised on the balance sheet, as the distinction between
operating and finance leases is removed. Under the new standard, an
asset (the right to use the leased item) and a financial liability to pay
rentals are recognised. The only exceptions are short-term and low-value
leases. The accounting for lessors will not significantly change.

As at the reporting date, the group has operating lease commitments
of $23.2million. Refer note 18. In FY17 the Group conducted a detailed
preliminary assessment of the forecast impact of AASB 16 on the
Group’s profit, balance sheet and cash flows. Property leases are the
main leases which will be impacted by the new standard for CTM.

Based on this initial assessment the Group expects a material increase
in both lease liabilities and right-of-use assets. The Group EBITDA
is expected to be materially positively impacted as lease costs are
reclassified as interest and depreciation, although the impact on the
Group’s profit is not expected to be material.

The full impact of the standard will however depend on the leases in
place on transition. During FY19 the Group will update the assessment
of the standard and provide further disclosure on the expected impact.

Accounting policies of subsidiaries have been changed, where necessary, to ensure consistency with policies
adopted by the Group.

Rounding of amounts

c)
The Company is of a kind referred to in Class Order 2016/191, issued by the Australian Securities and
Investments Commission, relating to the “rounding off” of amounts in the financial statements. Amounts in the
financial statements have been rounded off in accordance with that Class Order to the nearest thousand dollars,
or in certain cases, the nearest dollar.

Directors’ Declaration
In the Directors’ opinion:

(a) The financial statements and notes set out on pages 42 to 90 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 2018 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

closed group identified in note 27 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 27.

Note 29 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

Brisbane, 22 August 2018

Mr Jamie Pherous

Managing Director

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS: OTHER ITEMS

Our audit approach

An audit is designed to provide reasonable assurance about whether the financial report is free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of
the financial report.

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the
financial report as a whole, taking into account the geographic and management structure of the Group, its
accounting processes and controls and the industry in which it operates.

The Group provides travel management solutions to the corporate market and operates in four broad
geographic regions, being Australia & New Zealand (“ANZ”), North America, Asia and Europe. The regional
finance functions report to the Group finance function in Brisbane, Australia where consolidation is performed.

Materiality

 For the purpose of our audit we used overall Group materiality of $5.2 million, which represents

approximately 5% of the Group’s profit before tax.

 We applied this threshold, together with qualitative considerations, to determine the scope of our audit
and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on
the financial report as a whole.

 We chose Group profit before tax as the benchmark because the Group is a profit oriented entity and

because, in our view, it is one of the metrics against which the performance of the Group is most commonly
measured and it is a generally accepted benchmark.

 We selected 5% based on our professional judgement noting that it is also within the range of commonly

acceptable profit related thresholds.

Audit scope

 Our audit focused on where the Group made subjective judgements; for example, significant accounting

estimates involving assumptions and inherently uncertain future events.

 In establishing the overall approach to the Group audit, we determined the type of audit work that

needed to be performed by us, as the Group engagement team, and by component auditors in Hong
Kong and the UK operating under our instruction. We structured our audit as follows:
- We engaged component auditors in Hong Kong and the UK to perform audit procedures over the

Asia and Europe regions respectively.

- We performed audit procedures over the North America region, which included us visiting the

Houston based finance function.

- We also performed audit procedures over the Australia & New Zealand region, in addition to

auditing the consolidation of the Group’s regional reporting units into the Group’s financial report.

 For the work performed by component auditors in Hong Kong and the UK, we determined the level of
involvement we needed to have in the audit work at these locations to be satisfied that sufficient audit
evidence had been obtained as a basis for our opinion on the Group financial report as a whole. This
included active dialogue throughout the year through discussions, issuing written instructions, receiving
formal interoffice reporting, as well as attending final clearance meetings with local management.

PricewaterhouseCoopers, ABN 52 780 433 757 480 Queen Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001 T: +61 7 3257 5000, F: +61 7 3257 5999, www.pwc.com.au Liability limited by a scheme approved under Professional Standards Legislation. Independent auditor’s reportTo the members of Corporate Travel Management Limited Report on the audit of the financial report Our opinion In our opinion: The accompanying financial report of Corporate Travel Management Limited (the Company) and its controlled entities (together, the Group) is in accordance with the Corporations Act 2001, including: a)giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its financialperformance for the year then endedb)complying with Australian Accounting Standards and the Corporations Regulations 2001.What we have audited The Group financial report comprises: the consolidated statement of financial position as at 30 June 2018the consolidated statement of comprehensive income for the year then endedthe consolidated statement of changes in equity for the year then endedthe consolidated statement of cash flowsfor the year then endedthe notes to the consolidated financial statements, which include a summary of significant accountingpoliciesthe directors’ declaration.Basis for opinionWe conducted our audit in accordance with Australian Accounting Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. IndependenceWe are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the consolidated financial statements of the current period. These matters were addressed in the context of our
audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. Further, any commentary on the outcomes of a particular audit
procedure is made in that context. We communicated the key audit matters to the Audit Committee.

Key audit matter

Revenue recognition

Refer to Note 2 Revenue

The Group’s provision of travel services to clients drives a
number of revenue streams.

The recognition of revenue from these sources is largely
dependent on the terms of the underlying contracts with
the customer, the supplier, or both. Contracts can be
complex and bespoke in terms of their fee structures, the
range and mix of services provided, as well as potential for
late adjustments and renegotiations of contractual terms.

In addition, judgement is involved in the recognition of
revenue related to volume incentives (“overrides”) as
revenue is accrued based on estimated Total Transaction
Value (“TTV”) for the period, with reference to terms
stipulated in supplier agreements.

We focused on revenue recognition due to the materiality
of the revenue balance as a whole and on the revenue
streams ‘fees’, ‘commissions’ and ‘overrides’ in particular.
This was because of their relative significance to the overall
revenue balance, the bespoke nature of the agreements and
(in the case of overrides) the judgement involved in
accurately recognising revenue.

How our audit addressed the Key audit matter

Our procedures in relation to the recognition of revenue from
all significant revenue streams included, amongst others:



Obtaining an understanding of the Group’s revenue
recognition processes

Utilising data analytic techniques for selected
geographical locations to identify revenue
transactions for our testing of journals

Considering the Group’s assessment of the expected
impact of AASB 15 on the financial statements.

In addition, we performed the following procedures
specific to the below revenue streams, on a sampling basis,
amongst others:

Overrides



Comparing the percentages, rates and TTV inputs
used in the underlying calculations to percentages
and rates stipulated in the overrides agreements,
and known TTV data supplied by a third party

Testing a sample of overrides payments received
during the year to remittance and bank statements

Fees & Commissions



Utilising data analytic techniques to reconcile the
total recognised revenue for fees and commissions
for selected geographical locations to recorded total
cash received for those selected locations

Agreeing a sample of recorded fees and
commissions transactions to supporting documents,
including customer agreements, invoices,
remittances and bank statements.

Key audit matter

How our audit addressed the Key audit matter

Impairment assessment on the Group’s goodwill
balances

Our procedures in relation to the impairment assessment of
goodwill included, amongst others:

Refer to Note 15 Impairment testing of goodwill

 Assessing the appropriateness of the Group’s

At 30 June 2018, the Group recorded $451.6m of
intangible assets, of which $407.2m related to goodwill.
These assets are allocated between four cash generating
units (“CGUs”), being Australia & New Zealand, North
America, Europe and Asia.

As required by Australian Accounting Standards, at 30
June 2018 the Group performed an impairment
assessment over the goodwill balance by calculating the
recoverable amount for each CGU, using a ‘value in use’
discounted cash flow model.

Given the level of judgement involved in estimating the key
assumptions in the valuation models, including forecast
performance, growth rates and discount rates, and the
materiality of the goodwill recognised on the Group’s
balance sheet, we determined that this was a key audit
matter.

No impairment charge was recorded by the Group in the
current financial year.

determination of its CGUs



Testing the mathematical accuracy of the underlying
calculations in the Group’s discounted cash flow
valuation models

 Comparing the cash flow forecasts for FY19 used in

the models to the Board approved budget for FY19

 Comparing the FY18 actual results with prior year
forecasts to assess the historical accuracy of the
Group’s forecasting processes

 Evaluating the key assumptions in the cash flow
models, including long term growth rates and
discount rates



Performing sensitivity analysis to assess the impact
of reasonably possible changes in the assumptions
used in the valuation models, including the discount
rates, growth rates, and FY19 forecast.

Based on our procedures we found that headroom remained
between the carrying value of each CGU’s assets (including
goodwill) and the Group’s calculation of the recoverable
amount, and as such no impairment of goodwill was
identified.

We also compared the Group’s net assets as at 30 June 2018
of $471.5m to its market capitalisation of $2,896.8m at 30
June 2018, and noted the $2,425.3m of implied headroom in
the comparison.

Key audit matter

How our audit addressed the Key audit matter

Capitalisation of internally generated software
development costs

Refer to Note 8 Intangible assets

Our procedures in relation to the capitalisation of internally
generated software development costs included, amongst
others:

The Group has software development teams in each of its
regions, and during the year ended 30 June 2018, material
expenditure has been incurred in developing technology
solutions.

This expenditure is capitalised when the development
projects meet the criteria of AASB 138 Intangible assets.

In the year ended 30 June 2018, there were software
additions of $11.1m, which primarily relates to salary costs
associated with internally developed computer software.

We focused on this area due to the level of judgement
involved in assessing whether the costs meet the
recognition criteria for capitalisation per AASB 138, as well
as the quantum of expenditure capitalised during the year.

 Developing an understanding of the Group’s policy
for capitalising software development costs and the
process for capturing costs



Testing a sample of capitalised costs by obtaining
payslip data and timesheet records

Testing, on a sampling basis, whether transfers from
‘work in progress’ to ‘software’ have occurred at the
appropriate time upon completion of the
development project

 Assessing, on a sampling basis, the reasonableness
of the useful life applied to internally generated
software assets once transferred from ‘work in
progress’

 Assessing, on a sampling basis, whether the

remaining useful life of developed software assets is
still reasonable

 Assessing the accuracy and completeness of related
disclosures in the financial statements as at 30 June
2018.

Other information
The directors are responsible for the other information. The other information comprises the information
included in the annual report for the year ended 30 June 2018, but does not include the financial report and our
auditor’s report thereon. Prior to the date of this auditor's report, the other information we obtained included
the Chairman and Managing Director’s Report, Corporate Directory, Directors’ Report, Corporate Governance
Statement and Shareholder Information. We expect the remaining other information to be made available to us
after the date of this auditor's report.

Our opinion on the financial report does not cover the other information and accordingly we do not and will not
express an opinion or any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with the
financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.

When we read the other information not yet received as identified above, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to the directors and use our professional
judgement to determine the appropriate action to take.

Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001, and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view, and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no
realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of the
financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf . This
description forms part of our auditor’s report.

Report on the remuneration report

Our opinion on the remuneration report

We have audited the remuneration report included in pages 30 to 38 of the directors’ report for the year ended
30 June 2018.

In our opinion, the remuneration report of Corporate Travel Management Limited for the year ended 30 June
2018 complies with section 300A of the Corporations Act 2001.

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the remuneration report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on
the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.

PricewaterhouseCoopers

Michael Shewan
Partner

Brisbane
22 August 2018

Shareholder Information (continued)

Equity security holders (continued)

Unquoted equity securities

Share Appreciation Rights

3,575,500

Substantial holders

d)
Substantial holders (including associate holdings) in the Company are set as follows:

Number on issue

Number of
holders

HSBC Custody Nominees (Australia) Ltd

Pherous Holdings Pty Ltd

J P Morgan Nominees Australia Limited

Pinnacle Investment Management Group Limited and Pinnacle
Investment Management Limited

Hyperion Asset Management Limited

Voting rights

e)
The voting rights attaching to each class of equity securities are set out below:

Number
held

Percentage
Issued shares

24,640,176

20,485,000

12,108,357

5,651,178

5,019,113

22.87%

19.01%

11.24%

5.65%

5.04%

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.

Share Appreciation Rights
Share appreciation rights have no voting rights.

Shareholder Information
The shareholder information set out below was applicable at 19 July 2018.

Distribution of equity securities

a)
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

There were 194 holders of less than a marketable parcel of ordinary shares.

Equity security holders

Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted equity securities are listed as follows:

Number of
shareholders

8,328

4,225

485

327

13,408

HSBC Custody Nominees (Australia) Ltd

Pherous Holdings Pty Ltd

J P Morgan Nominees Australia Limited

Citicorp Nominees Pty Limited

National Nominees Limited

Claire Lesley Gray

BNP Paribas Noms Pty Ltd

BNP Paribas Nominees Pty Ltd

Matimo Pty Ltd

Steven Craig Smith

Ms Helen Logas

National Nominees Limited

Doobie Investments Pty Limited

Mr Matthew Dalling

Matthew Michael Cantelo

Citicorp Nominees Pty Limited

Shamiz Pty Ltd

AMP Life Limited

Joseph D McClure and Julie A McClure

Dr David John Ritchie and Dr Gillian Joan Ritchie

2018
Number
held

Percentage of
issued shares

24,640,176

20,485,000

12,108,357

4,240,048

3,816,399

2,062,978

1,708,531

1,481,250

1,279,350

1,084,338

1,036,764

965,659

924,936

819,171

760,270

570,511

526,893

518,166

440,180

381,468

22.87%

19.01%

11.24%

3.94%

3.54%

1.91%

1.59%

1.37%

1.19%

1.01%

0.96%

0.90%

0.86%

0.76%

0.71%

0.53%

0.49%

0.48%

0.41%

0.35%

79,850,445

74.12%

100

101

Corporate Directory

Directors

Secretary

Tony Bellas
Stephen Lonie
Greg Moynihan
Jamie Pherous
Admiral Robert J. Natter, U.S. Navy (Ret.)
Laura Ruffles

S. Fleming
S. Yeates

Notice of Annual General Meeting

The Annual General Meeting of Corporate Travel Management will
be held in Brisbane on Wednesday 31 October 2018 at 11am at
the office of Allens Linklaters (Level 26, 480 Queen Street, Brisbane
QLD 4000).

Registered office in Australia

Level 24, 307 Queen Street
Brisbane QLD 4000

Share register

Auditor

Computershare Investor Services Pty Limited
117 Victoria Street
West End QLD 4101
Telephone: 1300 782 544

PricewaterhouseCoopers Australia
480 Queen Street
Brisbane QLD 4000

Stock exchange listing

Corporate Travel Management shares are listed on the Australian
Securities Exchange (ASX).

Website address

www.travelctm.com

ABN

17 131 207 611

102

103

Registered Office

Level 24,
307 Queen Street,
Brisbane QLD 4000
www.travelctm.com